ITEM:		ACTION ITEMS
2.	RECEIVE STAFF ANALYSIS OF AB 1421 AND AUTHORIZE COMMENT LETTER BE SENT TO ASSEMBLY MEMBERS LAIRD AND SALINAS
Meeting Date:			March 31, 2005	Budgeted:	N/A
From:			David A. Berger,	Program/	N/A
			General Manager	Line Item No.:
Prepared By:			Same	Cost Estimate:	N/A
General Counsel Approval: N/A
Committee Recommendation: N/A
CEQA Compliance: N/A

SUMMARY: The purpose of this item is for the Board of Directors to receive District staff’s initial analysis of AB 1421 (Exhibit 2-A), which Assembly Members John Laird and Simon Salinas recently submitted for consideration by the State Legislature. Staff also is proposing that the Board discuss and decide on the District’s key concerns and objectives regarding this bill for Assembly member Laird’s consideration.

RECOMMENDATION: District staff recommends that the Board: 1) Review and discuss staff’s initial analysis of AB 1421 as described below; 2) approve, or modify as appropriate and approve, a draft letter to Assembly member Laird containing the District’s comments on AB 1421 (Exhibit 2-B); and, 3) direct staff to continue to actively monitor AB 1421, and take appropriate actions to ensure that the Board’s key concerns and objectives are addressed and considered as the bill moves through the Legislature.

BACKGROUND: On February 22, 2005 Assembly Members Laird and Salinas introduced into the State Legislature Assembly Bill 1421. AB 1421 proposes to amend the California Water Code to prohibit a state agency from approving and/or awarding grant funds for a project that would provide water within the MPWMD’s boundaries, unless 750 acre feet/year of water from that water supply project is allocated to affordable housing as specified in the respective General Plan of each city and county within the District’s boundaries. The bill defines “affordable housing” as housing that is offered below the fair market rate and that provides a preference to the local work force. AB 1421 declares that unique water supply and housing conditions extant on the Monterey Peninsula warrants exceptions to California constitutional requirements that a) general laws of the state be uniformly applied (Article IV, Section 16), and b) each state law creating a mandate on local government either be fully funded by the Legislature, or its mandated action is suspended (Article XIII B, Sec. 6).

District staff has reviewed AB 1421 and to date has identified the following two concerns:

1) The word “project” is undefined in the bill, so it is unclear what type of water project would be required to allocate water to affordable housing. For example, if AB 1421 were to become law as currently written, the State Water Resources Control Board might interpret it to require that 750 acre-feet per year of water recovered in the future from the District’s Aquifer Storage and Recovery (ASR) project be allocated to new affordable housing development, as a condition of approving the District’s future temporary and permanent ASR water rights applications; rather than to assist in compliance with the Order 95-10 Carmel River water production limit.

2) The bill appears to create a local government mandate, i.e. a water project serving the MPWMD area is required to allocate supply to affordable housing. However, AB 1421 declares it is a Non-State mandated Local Program without a supporting rationale, and no State appropriation is provided. The bill could, for instance, require that Prop. 50 bond proceeds be granted to the District to capitalize the proportionate share of a water supply project that would be allocated to meet its affordable housing mandate.

Staff has reviewed its concerns about AB 1421 in its current form with Reed Addis of Assembly Member Laird’s office, who encouraged the District Board to provide its formal input. Attached is a draft letter identifying these concerns, and stating the Board’s objective that they be addressed in amendments. The Board may wish to modify the letter to identify other concerns to the District about the bill as presently drafted.

Under Assembly procedures, the Rules Committee cannot refer AB 1421 to an Assembly committee to be heard for at least 30 days from introduction, or March 26, nor can amendments be considered during this time period. Mr. Addis committed to notify us to which committee the bill is referred, and when it is scheduled to be heard. We will update this report at your March 31 meeting, if we are provided this information by then.

EXHIBITS

2-A AB 1421 (Laird/Salinas)

2-B Proposed Comment Letter

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