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6. VWC will file final tax returns as required by the Internal Revenue Service.

Discussion of California Environmental Quality Act (CEQA) Analysis

No analysis of environmental impacts of the Dissolution is required under the California
Environmental Quality Act (Pub. Res. Code §§ 21000 et seq.) (“CEQA”) and State CEQA
Guidelines (14 Cal. Code Regs. § 15000 et seq.) for the following reasons:

The Dissolution is not a “project” under CEQA
The Dissolution demanded by SB 634 is a legislative act of the state legislature. The
State CEQA Guidelines (14 Cal. Code Regs., § 15000 et seq.) expressly provide that
CEQA does not apply to legislation adopted or proposed by the legislature. (State CEQA
Guidelines, § 15378(b)(1).) As such, CEQA does not apply to the Dissolution because it
is not a “project” under CEQA.

The legislature did not intend the Dissolution to undergo CEQA review
The legislature – through Assembly Bill 634 – required that SCV Water take action on
the Dissolution no later than January 31, 2018. Language in the bill expressly states
that the new SCV Water Board hold its first meeting “as soon as possible” and that SCV
Water dissolve VWC “on or before January 31, 2018.” As a practical matter, then, the
Legislature could not have intended SCV Water to undertake substantive CEQA review,
because such review will take longer than the 31-days available to comply with the
statute. Thus, it is reasonable to conclude that the legislature did not intend for the
Dissolution to be subject to CEQA. This situation is akin to the Tuolumne Jobs & Small
Business Alliance v. Superior Court case, in which the Supreme Court found that
because of the short deadlines set forth in the Elections Code’s procedures for cities to
either adopt a qualified voter initiative or hold a special election, it would be impossible to
complete CEQA review before a city adopted a voter initiative. ((2015) 59 Cal.4th 1029.)
The “Legislature is presumed to be aware of all laws in existence when it passes or
amends a statute” and that “[i]f the Legislature had intended to require CEQA review
before direct adoption, despite the [short] deadlines, it could have easily said so. It did
not.” (Id. at 1039.) Similarly, here, the legislature did not state that the Dissolution was
subject to CEQA, and SB 634’s requirements to hold a SCV Water Board meeting “as
soon as possible” and dissolve VWC by January 31, 2018 indicate that the legislature
did not intend CEQA review to occur prior to the Dissolution.

The Dissolution is a ministerial action not subject to CEQA
The Dissolution is a ministerial action because it involves little or no judgment by the
public agency. (See State CEQA Guidelines, § 15369.) The Dissolution is commanded
by the legislature in SB 634, and SCV Water exercises little to no discretion in
undertaking the Dissolution mandated by SB 634. CEQA Guidelines section 15268
states that ministerial projects are not subject to the requirements of CEQA. As such,
the Dissolution called for in SB 634 is not subject to CEQA.

The Dissolution is exempt from CEQA
Even if the Dissolution is a “project” and subject to CEQA, it is exempt under State
CEQA Guidelines section 15061(b)(3)-Common Sense Exemption. The “common sense
exemption” states that a lead agency may find a project exempt from CEQA is “it can be
seen with certainty that there is no possibility that the activity in question may have a
significant effect on the environment.” The Dissolution is exempt under State CEQA
Guidelines section 15061(b)(3) because it will have no significant effect on the
environment—it is a change in legal organization that dissolves a private water company
owned by SCV Water to transition its operations into SCV Water. No operational
change is contemplated.

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