BILL NUMBER: AB 2304INTRODUCED BILL TEXT INTRODUCED BY Assembly Member Levine FEBRUARY 18, 2016 An act to add Chapter 7.5 (commencing with Section 485) to Division 1 of the Water Code, relating to water. LEGISLATIVE COUNSEL'S DIGEST AB 2304, as introduced, Levine. California Water Market Exchange. Existing law, the Costa-Isenberg Water Transfer Act of 1986, requires the Department of Water Resources to establish an ongoing program to facilitate the voluntary exchange or transfer of water and implement the various laws that pertain to water transfers. The act requires the department to create and maintain a list of entities seeking to enter into water supply transfers, leases, exchanges, or other similar arrangements and to maintain a list of the physical facilities that may be available to carry out water supply transfers. The act requires the department to prepare a water transfer guide with prescribed components. This bill would establish the California Water Market Exchange, governed by a 5-member board, in the Natural Resources Agency. This bill would require the market exchange, on or before December 31, 2017, to create a centralized water market platform on its Internet Web site that provides ready access to information about water available for transfer or exchange. This bill, for all transfers and exchanges of water occurring on or after January 1, 2018, would require the submission of certain data and information to the market exchange and the payment of an administrative fee to the market exchange, as specified. This bill would require the market exchange to develop specified procedures in consultation with federal, state, and local agencies. Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. It is the intent of the Legislature in creating the California Water Market Exchange that the market exchange do all of the following: (a) Create water sustainability, resiliency, and adaptability to drought and climate change. (b) Provide important benefits and opportunities for disadvantaged communities and environmental resources. (c) Increase transparency and decisionmaking capacity by better integrating data collection and reporting. (d) Facilitate water transfers and exchanges by the establishment of a centralized exchange platform and streamline review and approval processes. (e) Enable and encourage public and private investments in water use efficiency measures through participation in water transfers and exchanges. (f) Provide water transfers and exchanges as an effective mechanism for sustainable management of surface and groundwater resources in the state. SEC. 2. Chapter 7.5 (commencing with Section 485) is added to Division 1 of the Water Code, to read: CHAPTER 7.5. CALIFORNIA WATER MARKET EXCHANGE 485. This chapter shall be known, and may be cited, as the California Water Market Exchange Act of 2016. 486. The following definitions govern the construction of this chapter: (a) "Disadvantaged community" has the same meaning as defined in Section 79505.5. (b) "Market exchange" means the California Water Market Exchange established in Section 487. (c) "Small community water system" has the same meaning as defined in Section 116275 of the Health and Safety Code. 487. (a) The California Water Market Exchange is hereby established in the Natural Resources Agency. (b) The market exchange shall be governed by a five-member board, composed as follows: (1) The Secretary of the Natural Resources Agency. (2) Four individuals appointed by the Governor. (c) Each board member appointed by the Governor shall hold office for a term of four years. The Governor shall stagger the terms of the initial members appointed. A vacancy shall be filled by the Governor by appointing a member to serve the remainder of the term. 488. (a) On or before December 31, 2017, the market exchange shall create a centralized water market platform on its Internet Web site that provides ready access to information about water available for transfer or exchange. The platform shall be readily available to the public and contain all data and information collected by the market exchange in order to ensure transparency of information regarding the quantities of water available for transfer or exchange and the prices paid for transferred or exchanged water. (b) Before a transfer or exchange of water, the market exchange shall require the submission of data and information that includes, but is not limited to, all of the following: (1) The names of the water buyer and seller. (2) The quantity of water to be transferred or exchanged. (3) The price to be paid for the water transfer or exchange. (4) The time and duration of the water transfer or exchange. (5) The nature of the underlying right to the water proposed to be transferred or exchanged. (6) The origin location and proposed place of use of the transferred or exchanged water. (7) A description of the conveyance and storage facilities necessary to complete the transfer or exchange. (8) An identification of any third-party impacts that may result from the transfer or exchange. (c) After a transfer or exchange of water, the market exchange shall require the submission of data and information that includes, but is not limited to, all of the following: (1) The quantity of water transferred or exchanged. (2) The conveyance and storage facilities used to complete the water transfer or exchange. (3) The time and duration of the water transfer or exchange. 489. The Legislature intends that water transfers and exchanges protect and enhance environmental and community benefits that include the following: (a) Instream flows and ecosystem water supply. (b) Improved water monitoring and data networks. (c) Ecosystem restoration projects benefitting aquatic and riparian species. (d) Improved drinking water supply and quality projects. (e) Development of needed technical, managerial, and financial capacity for disadvantaged communities. (f) Acquisition through the market exchange of needed water supplies for small community water systems. 490. On or before December 31, 2017, the market exchange shall do both of the following: (a) Develop procedures, in consultation with federal, state, and local agencies with jurisdiction over water transfers or exchanges, to streamline and expedite review and action upon applications to transfer or exchange water and to prioritize projects that provide environmental and community benefits as described in Section 489. The procedures shall recommend types of transfers and exchanges that could be more routinely approved. (b) Establish standards and procedures to ensure that transfers and exchanges protect environmental and community benefits consistent with Section 489 and to encourage projects that improve environmental conditions, provide safe drinking water, and provide other community benefits. 491. (a) Anyone submitting information pursuant to subdivision (b) or (c) of Section 488 shall pay an administrative fee, established by the market exchange, to recover the reasonable costs of the market exchange in administering this chapter. (b) Fees imposed pursuant to subdivision (a) shall be deposited in the California Water Market Exchange Fund that is hereby created in the State Treasury. Moneys in the fund shall be available, upon appropriation by the Legislature, to the market exchange for the purposes of this chapter. 492. (a) This chapter applies in addition to any other law relating to water transfers and exchanges. (b) This chapter applies to all transfers and exchanges of water occurring on or after January 1, 2018.