BOARD AGENDA MEMORANDUM
SUBJECT:
Title
Recommendations on Federal Legislation: H.R. 2473 (Harder) - Securing Access for the Central Valley and Enhancing (SAVE) Water Resources Act; and Other Legislation That May Require Urgent Consideration for a Position by the Board.
End
RECOMMENDATION:
Recommendation
Adopt a position of “Support and Amend” on H.R. 2473 (Harder) - Securing Access for the Central Valley and Enhancing (SAVE) Water Resources Act.
Body
SUMMARY:
H.R. 2473 (Harder) - Securing Access for the central Valley and Enhancing
(SAVE) Water Resources Act
Recommendation: Support and Amend
Priority: 1
This bill is an effort to address the continued need for new water supply and improved water infrastructure in California and throughout the arid West. With the Water Infrastructure Improvements for the Nation (WIIN) Act expiring in 2021 and much of the funding having already been exhausted, this bill would extend some of the WIIN Act provisions and authorize new funding. Specifically, the bill includes new funding for WIIN Act storage projects and Title XVI water recycling and desalination projects; requires an evaluation of potential groundwater storage and recharge opportunities; and creates a new Reclamation Infrastructure Finance and Innovation Pilot (RIFIA) Program modeled after the Water Infrastructure Finance and Innovation Act (WIFIA) Program to finance large wastewater, drinking water, and other water resources infrastructure projects.
Status:
The bill was introduced on May 2, 2019, and was referred to the House Committee on Natural Resources. Among the cosponsors is Rep. Jimmy Panetta (D-CA-20).
Proposed Amendments:
In order to better promote the interests of Santa Clara County residents, Valley Water recommends the following amendments to the bill:
1. Include language that will automatically enable State-led projects (defined under Sec. 4007 of the WIIN Act) that have been funded through a competitive process and have received some minimum amount in state funds (e.g., $200 million) to become automatically eligible to receive WIIN Act funding. This would create a clear path for the Pacheco Reservoir Expansion Project (Pacheco Project) to access WIIN Act funding.
2. Increase the amount of funding authorized for new surface or groundwater storage projects above $100 million.
3. Under the RIFIA Pilot Program, strike the provision in current law that automatically imposes a senior lien - a lien that has repayment priority over other liens - on pledged revenues and/or assets in the event of default leading to bankruptcy, insolvency, or liquidation. At a minimum, Valley Water suggests including a clause to enable a waiver under certain circumstances. Existing financing rules prohibit Valley Water from providing a senior lien; thus, borrowing under the RIFIA Program could create a legal problem if Valley Water were to default on the loan.
4. Amend the list of projects for which Reclamation must expedite the feasibility studies to include the Pacheco Project and the Pacheco Alternative under the San Luis Low Point Improvement Project.
Importance to Valley Water:
This bill would authorize new funding for water storage and recycling projects, both of which are important Valley Water priorities that would benefit the residents of Santa Clara County by improving our resilience to drought. While the bill does not, as written, identify a clear path to funding for the Pacheco Project, it does include additional WIIN Act storage and recycled water funding, as well as a new RIFIA pilot program, all of which Valley Water could potentially access to fund our water supply projects. Staff recommends supporting the bill and proposing the aforementioned amendments to improve its value to the people and environment in Santa Clara County.
Pros:
• Includes the “San Luis Reservoir” among the list of projects for which Reclamation would be required to complete the feasibility study. This could be interpreted to include both the Pacheco Reservoir Expansion Project and the San Luis Low Point Improvement Project.
• Includes the entirety of H.R. 1162, the Water Recycling Investment and Improvement Act authored by California Representative Napolitano, which includes much-needed funding ($500 million) for Title XVI recycled water projects under the WIIN Act, strikes the requirement that projects must be named in appropriations bills, and makes the WIIN Act Title XVI program permanent (it is currently set to expire in 2021). The Board previously adopted a position of “Support” on H.R. 1162.
• Includes new funding for WIIN Act storage projects ($100 million). As Congress has already appropriated all prior authorized appropriations for these projects, the significant unmet demand demonstrates the need for new funds.
• Includes a new RIFIA Pilot Program modeled after the WIFIA Program to provide low-interest loans solely for large water supply projects in Reclamation states, plus Alaska and Hawaii.
Cons:
• Does not, as written, include a clear path forward for the Pacheco Reservoir Expansion Project:
o Does not identify a path for the Pacheco Project to access WIIN Act funding; and
o Does not, as currently written, specifically include the Pacheco Reservoir Expansion Project or the San Luis Low Point Improvement Project in the list of projects for which Reclamation would be required to complete the feasibility studies. Without specification, Reclamation could interpret the language as not requiring expedited feasibility studies for those two projects.
• As written, the level of funding for new water storage projects ($100 million) is insufficient to meet demand.
• As written, the RIFIA section does not amend the springing lien provision under current law that imposes a senior lien on pledged revenues and/or assets in the event of default leading to bankruptcy, insolvency, or liquidation.
FINANCIAL IMPACT:
There is no financial impact associated with this item.
CEQA:
The recommended action does not constitute a project under CEQA because it does not have the potential for resulting in direct or reasonably foreseeable indirect physical change in the environment.
ATTACHMENTS:
None.
UNCLASSIFIED MANAGER:
Manager
Rachael Gibson, 408-630-2884