BILL ANALYSIS                                                                                                                                                                                                    



                                                                  SB 565
                                                                  Page  1

          Date of Hearing:   June 29, 2010

                   ASSEMBLY COMMITTEE ON WATER, PARKS AND WILDLIFE
                             Jared William Huffman, Chair
              SB 565 (Pavley) - As Proposed to Be Amended:  June 29, 2010

           SENATE VOTE  :  Not relevant
           
          SUBJECT  :   Water diversions and uses:  reporting, fees, and  
          illegal activities 

           SUMMARY  :   This bill provides increased consequences for failing  
          to report water diversions and uses and provides the State Water  
          Resources Control Board (SWRCB) with new authorities and  
          resources to investigate and prosecute unauthorized diversions  
          and uses.  Specifically,  this bill  , as presented in the attached  
          mock-up version:    

          1) Allows the SWRCB to charge fees for services related to: water  
             rights; distributions of water in watermaster serviced areas;  
             statements of water diversion and use; water quality; and,  
             duties required pursuant to the Sacramento-San Joaquin Delta  
             Reform Act.

          2) Gives the SWRCB new powers in investigations or proceedings  
             related to unreasonable use of water and violations of cease  
             and desist orders, cleanup and abatement orders, waste  
             discharges, and oil spills.  These powers include the ability  
             to:

             a.   Request technical or monitoring program reports in a  
               person or entity's possession which are related to that  
               entity's diversion and use; or, for diversions or uses over  
               200 acre feet (af) annually, the ability to request  
               preparation of technical or monitoring reports related to  
               that entity's diversion and use.  
              b.    Charge others a portion of the cost of the report if a  
                report covers several diversions.
             c.   Enter onto property and make inspections with the owner's  
               permission or by a duly obtained warrant. 

          3) Sets the maximum civil liability for unauthorized diversion or  
             use of water or failure to comply with a cease and desist  
             order issued by the SWRCB at:

             a.   $1,000 per day for a first enforcement proceeding where  







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               the unauthorized diversion or use of water does not exceed  
               1,000 af on any day of the unauthorized diversion or use. 
             b.   The greater of $1,000 per day or the market value of the  
               water for an unauthorized diversion or use of water  
               exceeding 1,000 af on any day of the unauthorized diversion  
               or use. 
             c.   The greater of $5,000 per day or the market value of the  
               water for additional enforcement proceedings.

          4) Requires the market value of the water, for purposes of civil  
             liability, be set in accordance with the most recent value,  
             per af, of local short-term water transfers.

          5) Conforms the SWRCB's hearing process for illegal diversions  
             and uses to the process for hearings and investigations under  
             the SWRCB's general authorities.  

          6) Ensures that parties are not subject to duplicative penalties  
             for the same act or failure to act.

          7) Adds "ability to pay" and "effect on business" to the criteria  
             for determining the amount of civil liability.

          8) Conforms the Delta Watermaster's SWRCB-delegated authority to  
             the existing process for reconsideration, amendment, and  
             judicial review of water right decisions and orders. 

          9) Adds the following uses to those required to pay annual fees:   
             small domestic uses, livestock stockpond registrations,  
             dedications of in-stream flow pursuant to Water Code Section  
             1707, rights determined under court decree; and statements of  
             diversion and use, including those for riparian rights and  
             appropriative rights established prior to 1914.

          10)Adds "statements" to the list of actions for which failure to  
             pay a fee may result in cancellation of the right conveyed by  
             the statement or referral to State Board of Equalization for  
             collection of the fee.

          11)For unauthorized diversions or uses, failures to file or  
             material misstatements on a statement of diversion or use,  
             allows the SWRCB or a court to impose a fine equal to 150% of  
             the annual fees an authorized diversion or use would have  
             paid.

          12)Subjects waste and unreasonable use of water, unreasonable  







                                                                  SB 565
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             method of diversion, and enforcing monitoring requirements to  
             vigorous enforcement.

          13)Requires the SWRCB to establish a schedule of penalties that  
             apply to small farms for de minimis water right violations.

          14)Establishes higher penalties or new categories of penalties  
             for: failure to comply with a cease and desist order;  
             misstatements in monitoring requirements; and, violations of  
             any term or condition in a permit, license, certificate, or  
             registration or any order or regulation adopted by the SWRCB.

          15)Allows the SWRCB or a superior court to establish a penalty,  
             not to exceed $500 per day, for:

             a.   Violations of a reporting or monitoring requirement,  
               material misstatements in any record or report, or tampering  
               with or rendering inaccurate any monitoring device required  
               under the reporting or monitoring requirement; and,
             b.   Violations of any term or condition of a permit, license,  
               certificate, or registration issued under Water Code  
               division 2, or any order or regulation adopted by the SWRCB  
               to prevent waste or unreasonable use of water.

            Allows the court to take into account various factors,  
            including, but not limited to, the extent and nature of harm  
            and ability to pay, when determining the appropriate amount of  
            the penalty.

          16)Where compliance with a Bay Delta Authority grant or loan is  
             conditioned on submitting  monthly records of water  
             diversions, adds "successor to the Bay Delta Authority."

          17)Adds a rebuttable presumption of nonuse - which could lead to  
             forfeiture of a water right - for failure to submit a  
             statement of water use.  Clarifies that a diversion or use in  
             a statement which is submitted but canceled for failure to pay  
             a fee is still considered submitted and not subject to the  
             presumption.

           EXISTING LAW  :
           
          1) Generally prohibits the state, or a county, city, district, or  
             other political subdivision, or any public officer or body  
             acting in its official capacity on behalf of any of those  
             entities, from being required to pay any fee for the  







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             performance of an official service. Existing law exempts from  
             this provision any fee or charge for official services  
             required pursuant to specified provisions of law relating to  
             water use or water quality. 

          2) Establishes the Water Rights Fund and requires specified fees  
             and penalties collected by the SWRCB, or State Board of  
             Equalization on behalf of the SWRCB, to be deposited in the  
             Water Rights Fund.

          3) Establishes that the unauthorized diversion or use of water is  
             a trespass.

          4) Allows civil liability to be imposed for the unauthorized  
             diversion or use of water not to exceed $500 per day.

          5) Allows the SWRCB, in determining the amount of civil  
             liability, to take into consideration all relevant  
             circumstances, including the extent of the harm of the  
             violation, the nature and persistence of the violation over  
             time, and any corrective action taken by the violator.

          6) Requires the SWRCB to appoint, for a term of four years, a  
             Delta Watermaster to provide timely monitoring and enforcement  
             of SWRCB orders and license and permit terms and conditions in  
             the Sacramento-San Joaquin Delta.

          7) Requires the registration of small domestic or livestock  
             stockponds and allows revocation of any right acquired by  
             registering to be the penalty for failing to renew a  
             registration in substantial compliance with the section  
             governing those registrations.

          8) Allows the SWRCB to establish reasonable general conditions  
             for small domestic or livestock stockponds uses.

          9) Requires an amended registration form for a change in the  
             point of diversion or place of use of water.  

          10)Requires each person or entity that holds a permit or license  
             to appropriate water to pay an annual fee according to a fee  
             schedule established by the SWRCB.

          11)Allows that if a fee is not paid when due, the SWRCB may  
             cancel the application, registration, petition, request, or  
             claim and may refer the matter to the State Board of  







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             Equalization for collection of the unpaid fee.

          12)For unauthorized diversions or uses, allows the SWRCB or a  
             court to impose an additional liability in an amount equal to  
             the annual fees had the diversion or use been authorized.

          13)Makes it the intent of the legislature that the State should  
             take vigorous action to enforce the terms and conditions of  
             permits, licenses, certifications and registrations to  
             appropriate water, to enforce SWRCB orders and decisions, and  
             to prevent the unlawful diversion of water.

          14)Requires, with certain exceptions, that each person who  
             diverts water must file with the SWRCB a prescribed statement  
             of diversion and use.  Requires a statement to include  
             specified information, including, on and after January 1,  
             2012, monthly records of water diversions.  Conditions  
             eligibility for certain grants or loans on compliance with the  
             requirement for monthly records of water diversions, unless  
             subject to an enumerated exception.

          15)Requires funds generated by specified civil penalties to be  
             deposited in the Water Rights Fund.

           FISCAL EFFECT  :   Unknown

           COMMENTS  :     

          During its 2005-2006 Regular Session, the Legislature passed and  
          the Governor signed AB 1200 (Laird), AB 1803 (Assembly Budget  
          Committee), and SB 1574 (Kuehl).  Together, these bills required  
          an assessment of the potential impacts on water supplies of  
          catastrophic failures in the Sacramento-San Joaquin Delta Estuary  
          (Delta), an identification and evaluation of options to protect  
          water supplies and the ecosystem of the Delta, the development of  
          a vision for a sustainable Delta, and a strategic plan to achieve  
          a sustainable Delta.  

          Specifically, SB 1574 directed the Resources Agency Secretary to  
          convene a committee to develop and submit to the legislature a  
          strategic vision for a sustainable Delta.  On September 28, 2006,  
          Governor Schwarzenegger issued Executive Order S-17-06 which  
          incorporated the principles of AB 1200, AB 1803, and SB 1574,  
          including initiating the Delta Vision by requiring an independent  
          Blue Ribbon Task Force to submit to the Delta Vision Committee  
          and the Governor, by October 1, 2008, a strategic plan to  







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          implement the Delta Vision.  Thereafter, the Executive Order  
          required the Delta Vision Committee, by December 31, 2008, to  
          make final recommendations to the Legislature and the Governor  
          for implementing the Delta Vision and Strategic Plan.

          In 2008, during development of the Delta Vision, the SWRCB  
          explained to the Blue Ribbon Task Force that a lack of adequate  
          reporting information on water diversions and uses was limiting  
          the ability of the SWRCB to assess water availability and  
          determine where unauthorized diversions and uses were occurring.   
          Although, with certain exceptions, each person who diverts or  
          uses water must file a statement of use and diversion with the  
          SWRCB, there is no penalty for a riparian water user (one who  
          borders a water body and has a right to make reasonable use of  
          natural flow) or a "Pre-1914" water user (one whose appropriative  
          rights were grandfathered at the time of California's Water  
          Commission Act) to fail to file a statement of use.  Reporting is  
          even spotty for post-1914 appropriative water rights holders over  
          whom the SWRCB has direct permitting and license authority.  For  
          those water rights holders, the SWRCB estimated that only 68%  
          were submitting completed water use reports and that it was  
          difficult to verify the quality of the information except as part  
          of limited enforcement actions.

          Also in 2008, the Delta Vision process received an analysis on  
          the "Economic Efficiency of Water Use and Allocation in  
          California."  One focus of that report was on water rights  
          enforcement and found that "efficient enforcement requires that  
          penalties for non-compliance be sufficient to deter unauthorized  
          uses."  As the report stated, if the value of the water exceeds  
          the cost of the fine divided by the chance of having to pay the  
          penalty, then an illegal water diverter may be tempted to make a  
          business decision to continue an unauthorized diversion or use.  

          The Delta Vision Committee Implementation Report (a.k.a. the  
          Chrisman Report), dated December 31, 2008, while not commenting  
          on this precise set of penalties and enforcement authorities,  
          called for legislation to enhance and expand the SWRCB's water  
          rights administrative accountability finding, "[t]hese  
          recommendations do not adversely affect the current water right  
          priority system, including area-of-origin priorities, but rather  
          strengthen the current administrative system." As the Chrisman  
          Report concluded, "appropriate enforcement will protect existing  
          water rights."  After delivery of the Delta Vision  
          recommendations by the Delta Vision Blue Ribbon Task Force, the  
          Legislature began deliberations as to how to respond.







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          SB 229 (Pavley), as amended July 9, 2009, sought to enact the  
          Delta Vision recommendations regarding water rights and water use  
          reporting.  In August of  2009, SB 229 and four other bills  
          concerning key water and Delta issues - AB 39 (Huffman), AB 49  
          (Feuer), SB 12 (Simitian), and SB 458 (Wolk) - were introduced as  
          "pre-print" proposals for public review and discussion over the  
          summer recess.  During August 2009, this Committee and Senate  
          Natural Resources and Water Committee held joint informational  
          hearings.  After these hearings, legislative leadership appointed  
          a conference committee, which convened and held additional public  
          hearings, with legislator discussions of key issues.  A  
          conference committee report was reported to the floors of the two  
          houses. Then, the policy provisions of that conference committee  
          report were consolidated into a single vehicle, SB 68  
          (Steinberg).

          This bill is substantially similar to the provisions on water  
          rights enforcement contained in SB 68, which was heard and passed  
          by this committee on September 11, 2009.  After the Legislature  
          adjourned without voting on SB 68, Governor Schwarzenegger called  
          a special session, the 7th Extraordinary Session, to finish  
          developing a water policy bill package to address pending Delta  
          and water issues.  Up until the last week of the 7th  
          Extraordinary Session, provisions to expand the SWRCB's  
          enforcement toolbox, consistent with Senator Pavley's SB 229,  
          were a key part of the package.  

          Ultimately, the Legislature passed a 5-bill package which  
          included SBX7 1 (Simitian), SBX7 2 (Cogdill), SBX7 6 (Steinberg),  
          SBX7 7 (Steinberg), and SBX7 8 (Steinberg).  SBX7 1 established a  
          new legal and policy framework for the State's management of the  
          Delta, including creating several new Delta governance entities  
          and a Delta Watermaster, while SBX7 8 included a narrower set of  
          SWRCB enforcement tools drawn mostly from another bill, AB 900  
          (De L?on).  This bill addresses some of the critical remaining  
          Delta Vision recommendations on water rights and water use  
          reporting.

          Supporters of this bill state that the "Blue Ribbon Delta Vision  
          Task Force found that information about current diversions and  
          use is inadequate and there is a need for better and more  
          comprehensive data."  They quote the Delta Vision Strategic Plan  
          as stating, "The SWRCB will require secure annual funding for  
          additional positions to investigate water rights compliance,  
          illegal diversions, waste, and unreasonable use.  The State  







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          Board's capacity should be expanded to be able to:
               i.        Require monitoring by all water diverters,  
                 including those within the Delta who are currently not  
                 required to report diversions; 
               ii.       Authorize monetary penalties for monitoring and  
                 reporting violations;
               iii.   Create adequate penalties for unauthorized diversions  
                 and violations; and,
               iv.       Possess provisions for interim relief?"

          Supporters state this bill is a reasonable and moderate piece of  
          much-needed legislation that would implement some, but not even  
          all, of the Delta Vision Task Force's very sensible  
          recommendations.  They note it "will benefit the public and water  
          rights holders statewide by providing the SWRCB the tools it  
          needs to eliminate illegal diversions.  These tools include  
          ensuring proper reporting of water diversion and use,  
          establishment of reporting incentives, and increases in fines for  
          illegal diversions."  They conclude that at "a time when  
          conflicts about water are escalating and the state and water  
          agencies are making substantial investments in water  
          conservation, it is essential that we take reasonable steps to  
          ensure that illegal diversions of water are not tolerated."  

          This bill also addresses points that were raised in the economic  
          analysis report to Delta Vision which found that low penalties  
          may, in some cases, incentivize illegal behavior.  This bill  
          raises the enforcement penalties for unauthorized diversions and  
          uses and, in the case of large unauthorized diversions (1,000 af  
          or over) or repeat offenders, makes the potential maximum penalty  
          equal to the market value, per acre foot, of the water which was  
          illegally diverted or used.  As supporters remarked, "fines for  
          illegal activity established by current law have not been changed  
          since 1991 and do not serve as a disincentive since the value of  
          water illegally diverted is often substantially greater."  In  
          addition, by requiring all diverters to report their use and pay  
          reasonable fees, this bill also addresses arguments that while  
          38% of California's water is diverted and used by riparians,  
          pre-1914 water users, and others not subject to direct SWRCB  
          permitting authority, those users are not paying a fair share of  
          monitoring and enforcement. 

          Opponents to this bill feel it would add sweeping new authority  
          to inspect private property for vaguely defined purposes and  
          without clear boundaries and require water users to perform  
          expensive engineering reports and technical monitoring studies.   







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          In addition, opponents were concerned that penalties for  
          unauthorized diversions and uses of water could be calculated on  
          the highest market value of the water.  Opponents were also  
          concerned about the increased scope of new fee provisions, the  
          amount of fees, increased reporting requirements, and the  
          potential for forfeiture of  water rights for failure to pay  
          fees.  In addition, opponents did not feel it was appropriate to  
          place water diversion and use fees and penalties in a subaccount  
          of the Water Rights Fund which could be allocated to restoration  
          projects and conservancies.

          In response to opponents' concerns, the attached proposed  
          Committee Amendments to this bill: 
           Limit SWRCB authority to request technical and monitoring study  
            reports to those reports already in the possession or control  
            of the entity diverting or using water unless that entity's  
            diversion or use is over 200 af annually.  If an entity is  
            diverting or using more than 200 af annually, the SWRCB can  
            request preparation of technical or monitoring study reports.   
            The 200 af threshold was chosen because the Water Code defines  
            a minor water right application as direct diversion of 3  
            cubic-feet per second or less or storage of 200 af per year or  
            less.  In addition, the SWRCB states 70% of the water rights  
            are issued for 100 af per year or less.
           Clarify that the only notices and orders the SWRCB may change  
            on its own motion are notices and orders relating to  
            requirements for technical or monitoring program reports.
           Clarify that property inspections may only be conducted with  
            the landowner's permission or a duly obtained warrant.
           Establish that penalties based on the market value of water  
            only apply to repeat enforcement actions or unauthorized  
            diversions or uses which equaled or exceeded 1,000 af or  
            greater on any given day of the unauthorized diversion or use.
           Eliminate language creating a subaccount in the Water Rights  
            Fund that could allocate funding to restoration projects and  
            conservancies.
           Clarify that a statement of diversion or use that is submitted  
            but canceled is still deemed submitted and therefore will not  
            trigger the rebuttable presumption of nonuse which attaches  
            when no statement is submitted.

           REGISTERED SUPPORT / OPPOSITION  :


           Support 
           Calif. League of Conservation Voters







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          Clean Water Action
          Defenders of Wildlife
          East Bay Municipal Utility District
          Environmental Defense Fund
          Golden Gate Fishermen's Associations
          Natural Resources Defense Council

          Pacific Coast Federation of Fishermen's Associations
          Planning and Conservation League
          Sierra Club California
          The Bay Institute
          Water4Fish

          Opposition 







































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           Agricultural Council of California
          Association of California Water Agencies
          Calif. Assoc. of Nurseries and Garden Centers
                                                                     Calif. Association of Wheat Growers
          Calif. Bean Shippers Association
          Calif. Building Industry Association
          Calif. Cattlemen's Association
          Calif. Chamber of Commerce
          Calif. Citrus Mutual
          Calif. Cotton Growers and Ginners Association
          Calif. Farm Bureau Federation
          Calif. Grain and Feed 
          Calif. Grape and Tree Fruit League
          Calif. Municipal Utilities Association
          Calif. Pear Growers
          Calif. Rice Industry Association
          Calif. Seed Association
          Calif. State Flower Association
          Calif. Tomato Growers Association
          Calif. Warehouse Association
          City of Sacramento (unless amended)
          Desert Water Agency
          East Valley Water District
          El Dorado Irrigation District
          Friant Water Authority
          Glenn Colusa Irrigation District
          Henry Miller Reclamation District
          Imperial Irrigation District
          Kern County Water Agency
          Kings River Conservation District
          Modesto Irrigation District
          Nisei Farmer's League
          Northern California Water Association
          Pacific Egg and Poultry Association
          Pacific Gas and Electric Company
          Regional Council of Rural Counties
          Sacramento Regional Water Alliance
          San Juan Water District
          Solano County Water Agency
          Valley Ag Water Coalition
          Western Agricultural Processors Association
          Western Growers
          Western Pistachio Association
          Wine Institute
            







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             Analysis Prepared by  :    Tina Cannon Leahy / W., P. & W. / (916)  
            319-2096 


















































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                     AS PROPOSED TO BE AMENDED
                         BY THE COMMITTEE

                   --- AMENDMENTS ARE BOLD ---
            
                                AMENDED IN ASSEMBLY MAY 20, 2010

                         AMENDED IN ASSEMBLY FEBRUARY 1, 2010

                                 AMENDED IN SENATE JUNE 2, 2009

                                 AMENDED IN SENATE MAY 4, 2009

                               AMENDED IN SENATE APRIL 13, 2009

            SENATE BILL                                                  
                              No. 565



                           Introduced by Senators Pavley and Steinberg
                          (Principal coauthor: Assembly Member Huffman)


                                                 February 27, 2009

               An act to amend Sections 6103.1 and 6103.4 of the  
            Government
            Code, to amend Sections 1052, 1055, 1055.2, 1055.3, 1120,  
            1228.5,
            1228.7, 1525, 1535, 1538,  1550  , 1551, 1825, 1845, 5103, and  
            5106 of,
            and to add Sections 1051.1,  1240.5,   1052.5,  1826, 1846,  
            and 1847 to,
            the Water Code, relating to water resources.


                                         legislative counsel's digest

               SB 565, as amended, Pavley. Water resources.
               (1)  Existing law generally prohibits the state, or a  
            county, city,
            district, or other political subdivision, or any public  
            officer or body
            acting in its official capacity on behalf of any of those  
            entities, from







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            being required to pay any fee for the performance of an  
            official service.
            Existing law exempts from this provision any fee or charge  
            for official
            services required pursuant to specified provisions of law  
            relating to
            water use or water quality.
               This bill would expand the exemption to other provisions  
            relating to
            water use, including provisions that require the payment of  
            fees to the



                                                                         
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             SB 565                                       - 2 -

            State Water Resources Control Board (board) for official  
            services
            relating to statements of water diversion and use.
               (2)  Existing law authorizes the board to investigate  
            all streams, stream
            systems, lakes, or other bodies of water, take testimony  
            relating to the
            rights to water or the use of water, and ascertain whether  
            water filed
            upon or attempted to be appropriated is appropriated under  
            the laws of
            the state. Existing law requires the board to take  
            appropriate actions to
            prevent waste or the unreasonable use of water. Under  
            existing law, the
            board makes determinations with regard to the availability  
            of recycled
            water.
               This bill would authorize the board, in conducting an  
            investigation
            or proceeding for these purposes, to order any person or  
            entity that
            diverts water or uses water to submit any technical or  
            monitoring report
            related to the diversion or use of water by that  
            person or entity in that person or entities  
            possession or, for diversions or uses over 200  
            acre-feet annually, the board may order  
            preparation of technical or monitoring reports.  
            The bill would authorize the board, in  
            connection with the investigation or proceeding,  
            to inspect the facilities of any person or  
            entity to determine compliance with specified  
            water use requirements either with that person  
            or entities permission or with a duly obtained  
            warrant.
               (3)  Existing law declares that the diversion or use of  
            water other than
            as authorized by specified provisions of law is a trespass.  
            Existing law
            authorizes the administrative imposition of civil liability  
            by the board
            for a trespass in an amount not to exceed $500 for each day  
            in which







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            the trespass occurs. Moneys generated by the imposition of  
            civil liability
            under these provisions are deposited in the Water Rights  
            Fund.
               This bill would provide that a person or entity  
            committing a trespass
            may be liable in an amount not to exceed the sum of $1,000  
            or $5,000
            for each day in which the trespass occurs, as specified, or  
            the highest
            market value of the water, as specified, whichever is the  
            greater amount.
            The moneys would be required to be deposited in the Water  
            Rights
            Fund, as specified.  The bill would establish the Water  
            Rights Protection
            Subaccount in the Water Rights Fund. Specified penalties  
            would be
            required to be deposited in the subaccount. The bill would  
            state
            legislative intent regarding the expenditure of the moneys  
            in the
            subaccount.
               (4)  Existing law, with certain exceptions, requires  
            each person who
            diverts water after December 31, 1965, to file with the  
            board a prescribed
            statement of diversion and use. Existing law requires a  
            statement to
            include specified information, including, on and after  
            January 1, 2012,
            monthly records of water diversions.
               This bill would establish a rebuttable presumption, as  
            specified, in
            any proceeding before the board in which it is alleged that   
            an  


                                                                         
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                                              - 3 -                      
                                            
            SB 565

             appropriative right   a right to appropriate water  has  
            ceased or is subject
            to prescribed action, that no use required to be included  
            in a statement
            of diversion and use occurred unless that use is included  
            in a statement
            that is submitted to the board within a specified time  
            period.
               The bill would require a person who files a statement of  
            diversion
            and use, and certain petitions involving a change in a  
            water right, to
            pay an annual fee, for deposit in the Water Rights Fund.  
            The bill would
            include as recoverable costs, for which the board may be  
            reimbursed
            from the fund upon appropriation therefor, costs incurred  
            in connection
            with carrying out requirements relating to the statements  
            of diversion
            and use and the performance of duties under  the public  
            trust doctrine  
             and  provisions that require the reasonable use of water.
               (5)  Existing law authorizes the board to issue a cease  
            and desist order
            against a person who is violating, or threatening to  
            violate, certain
            requirements, including requirements set forth in a  
            decision or order
            relating to the unauthorized use of water. Any person who  
            violates a
            cease and desist order may be liable in an amount not to  
            exceed $1,000
            for each day in which the violation occurs. Revenue  
            generated from
            these penalties is deposited in the Water Rights Fund.
               This bill would increase, as specified, the civil  
            penalties that apply
            to a person who violates a cease and desist order. The bill  
            would impose
            civil liability, in an amount not to exceed $500 for each  
            day in which







                                                                  SB 565
                                                                  Page  19

            a violation occurs, for a failure to comply with various  
            reporting or
            monitoring requirements  , including requirements imposed  
            pursuant to  
             the public trust doctrine  . The bill would authorize the  
            board to impose
            additional civil liability, in an amount not to exceed $500  
            for each day
            in which a violation occurs, for the violation of a permit,  
            license,
            certificate, or registration, or an order or regulation  
            involving the
            unreasonable use of water. The board would be required to  
            establish a
            schedule of penalties that applies to small farms for de  
            minimus water
            right violations. Funds derived from the imposition of  
            these civil
            penalties would be deposited in the Water Rights Fund, as  
            specified.
                The bill would establish, in a proceeding before the  
            board in which  
             it is alleged that an appropriative water right has ceased,  
            or is subject  
             to prescribed action, a rebuttable presumption that no use  
            occurred on  
             or after January 1, 2010, unless that diversion or use was  
            included in a  
             specified statement submitted to the board within 6 months  
            after the  
             statement is required to be filed with the board, as  
            specified.  
               Vote:   majority.  Appropriation:   no.  Fiscal  
            committee:   yes.
            State-mandated local program:   no.


                                                                         
                                                  94














                                                                  SB 565
                                                                  Page  20

             SB 565                                       - 4 -

                    The people of the State of California do enact as  
            follows:

             1        SECTION 1.   Section 6103.1 of the Government  
            Code is
             2    amended to read:
             3        6103.1.   Section 6103 does not apply to any fee  
            or charge for
             4    official services required by Part 1 (commencing with  
            Section
             5    1000), Part 2 (commencing with Section 1200), Part 3
             6    (commencing with Section 2000), Part 4 (commencing  
            with Section
             7    4000), Part 5 (commencing with Section 4999), or Part  
            5.1
             8    (commencing with Section 5100), of Division 2,  
            Division 7
             9    (commencing with Section 13000), or Division 35  
            (commencing
            10    with Section 85000) of the Water Code.
            11        SEC. 2.   Section 6103.4 of the Government Code  
            is amended
            12    to read:
            13        6103.4.   Section 6103 does not apply to any fee  
            or charge for
            14    official services required by Section  100860 100860.1  
            of the Health and
            15    Safety Code.
            16        SEC. 3.  Section 1051.1 is added to the Water  
            Code, to read:
            17        1051.1.  (a)  (1)  In conducting any  
            investigation or proceeding
            18    specified in Section 275 or 1051, or Article 7  
            (commencing with
            19    Section 13550) of Chapter 7 of Division 7,  
            the board may order
            20    any person or entity that diverts or uses  
            water to  prepare and  submit
            21    to the board  any  technical or monitoring program  
            reports related
            22    to that person's or entity's diversion or  
               use of water  as the board may specify  , if the  
               technical or monitoring program reports are  
               within that person's or entity's possession  







                                                                  SB 565
                                                                  Page  21

               or control.  Except as provided in paragraph  
               (2), the board shall not require a person or  
               entity to prepare any new report for purposes  
               of this section.  
                 (2) The board may order a person or entity  
               that diverts 200 or more acre feet of water  
               per year to prepare and submit technical or  
               monitoring program reports related to that  
               person's or entity's diversion and use of  
               water as the board may specify, for purposes  
               of paragraph (1).  If the preparation of such  
               technical or monitoring program reports would  
               create a material financial hardship, the  
               person or entity may request that the board  
               revise its order to avoid such material  
               financial hardship.
            23      The  
            24       (3)  (2)  The costs incurred by the person or entity  
            in the preparation
            25    of  those reports   reports required pursuant to this  
            subdivision shall
            26    bear a reasonable relationship to the need for the  
            report and the
            27    benefit to be obtained from the report.  If  
            28       (4)  (3)  If the preparation of individual reports  
            would result in a
            29    duplication of effort, or if the reports are  
            necessary to evaluate the
            30    cumulative effect of several diversions or uses of  
            water, the board
            31    may order any person or entity subject to this  
            subdivision to pay
            32    a reasonable share of the cost of preparing reports.
            33       (b)  Any order issued under this section shall be  
            served by
            34    personal service or registered mail on the party  
            required to submit
            35    technical or monitoring program reports or to pay a  
            share of the
            36    costs of preparing reports. Unless the board issues  
            the order after
            37    a hearing, the order shall inform the party of the  
            right to request a
            38    hearing within 30 days after the party has been  
            served. If the party








                                                                  SB 565
                                                                  Page  22

                                                                         
                                                  94

                                                          - 5 -          
                                         
             SB 565

             1    does not request a hearing within that  
            30-day period, the order
             2    shall take effect as issued. If the party  
            requests a hearing within
             3    that 30-day period, the board may adopt a  
            decision and order after
             4    conducting a hearing.
             5       (c)  Upon application of any person or  
            entity or upon its own
             6    motion, the board may review and revise  
               any order requiring technical or monitoring  
               program reports issued pursuant
             7    to this section, in accordance with the  
            procedures set forth in
             8    subdivision (b).
             9       (d)  In conducting any investigation  
            or proceeding specified in
            10    Section 275 or 1051, or Article 7  
            (commencing with Section
            11    13550) of Chapter 7 of Division 7, the  
               board, with the consent of the owner or  
               possessor of the facilities or, if the  
               consent is withheld, with a warrant duly  
               issued pursuant to the procedure set forth  
               in Title 13 (commencing with Section  
               1822.50) of Part 3 of the Code of Civil  
               Procedure, may inspect the
            12    facilities of any person or entity to  
            ascertain whether the purposes
            13    of Section 100 and this division are being  
            met and to ascertain
            14    compliance with any permit, license, certification,  
            registration,
            15    decision, order, or regulation issued under Section  
            275, this
            16    division, or Article 7 (commencing with Section  
            13550) of Chapter
            17    7 of Division 7. The board shall adopt regulations  
            for procedures







                                                                  SB 565
                                                                  Page  23

            18    pursuant to Article 13 (commencing with Section  
            11460.10) of
            19    Chapter 4.5 of Part 1 of Division 3 of Title 2 of the  
            Government
            20    Code, and any time extensions necessary to implement  
            those
            21    regulations.   Except in the event of an  
            emergency affecting the 
             22     public health or safety the inspection  
            shall be made with the
             23     consent of the owner or possessor of the  
            facilities or, if the consent  24     is withheld,  
            with a warrant duly issued pursuant to the  
            procedure  25     set forth in Title 13 (commencing  
            with Section 1822.50) of Part
             26     3 of the Code of Civil Procedure.  
            27        SEC. 4.  Section 1052 of the Water  
            Code is amended to read:
            28        1052.  (a)  The diversion or use of water subject  
            to this division
            29    other than as authorized in this division is a  
            trespass.
            30       (b)  The Attorney General, upon request of the  
            board, shall
            31    institute in the superior court in and for any county  
            in which the
            32    diversion or use is threatened, is occurring, or has  
            occurred an
            33    action for the issuance of injunctive relief as may  
            be warranted by
            34    way of temporary restraining order, preliminary  
            injunction, or
            35    permanent injunction.
            36       (c)  (1)  Any person or entity committing a  
            trespass as defined
            37    in this section may be liable in an amount not to  
            exceed  the greater  
            38     of either of  the following amounts:
             39       (A)  For a first enforcement proceeding  
                where the unauthorized diversion or use of  
                water does not exceed 1,000 acre feet per day  
                on any day,  One  one thousand dollars ($1,000)  
                for each day in which the
            40    trespass occurs  for the first enforcement  
            proceeding or five  .
                 (B) For a first enforcement proceeding where  







                                                                  SB 565
                                                                  Page  24

                the unauthorized diversion or use of water  
                exceeds 1,000 acre feet per day on any day in  
                which the trespass occurs, the greater of  
                either of the following:
                 (i) One thousand dollars ($1,000) for each  
                day in which the trespass occurs.
                 (ii)  The highest market value of the water  
                subject to the trespass as determined  
                pursuant to Section 1052.5. 
                 (C) For any subsequent enforcement  
                proceeding, the greater of either of the  
                following:
                                                            94
                                                                         
                                                            
            SB 565                                       - 6 -

             1       (i)  five  Five thousand dollars ($5,000)  
            for each day in which the trespass occurs  for any  
            subsequent enforcement proceeding  .
             3        (B)  (ii) The highest market value of the water  
            subject to the trespass
             4    as determined  on a regional basis   pursuant to  
            Section 1052.5.
             5       (2)  The Attorney General, upon request of the  
            board, shall
             6    petition the superior court to impose, assess, and  
            recover any sums
             7    pursuant to this subdivision. In determining the  
            appropriate amount,
             8    the court shall take into consideration all relevant  
            circumstances,
             9    including, but not limited to, the extent of harm  
            caused by the
            10    violation, the nature and persistence of the  
            violation, the length of
            11    time over which the violation occurs, and, with  
            respect to the
            12    violator, the ability to pay, the effect on the  
            ability to continue in
            13    business, the corrective action, if any, taken by the  
            violator, and
            14    other matters as justice may require.
            15       (3)  Civil liability may be imposed by the board  
            pursuant to
            16    Section 1055.







                                                                  SB 565
                                                                  Page  25

            17       (d)   (1)  All funds recovered pursuant to this  
            section shall be
            18    deposited in the Water Rights Fund established  
            pursuant to Section
            19    1550.
            20     (2) Any funds recovered pursuant to this  
            section that exceed 
             21     the amounts that were authorized before  
            January 1, 2011, shall be
             22    deposited in the Water Rights Protection  
            Subaccount in the Water
             23     Rights Fund established pursuant to Section 1550.
             24       (e)  The remedies prescribed in this section are  
            cumulative and
            25    not alternative.
            26       (f)  The increase in the amount of penalties that  
                                                    may be imposed
            27    pursuant to the amendments made to this section by   
            this act during  
            28    Senate Bill 565 of the 2009?10 Regular Session of the  
            Legislature
            29    does not apply to violations that occurred prior to  
            January 1, 2011.
            30        SEC. 5.  Section 1052.5 is added to the Water  
            Code, to read:
            31        1052.5.   In establishing the highest market  
            value of water for
            32    purposes of Sections 1052 and 1845, the board shall  
            consider the
            33    price, per acre foot, of water transferred or  
               exchanged within the watershed where the trespass
            34    occurred during a period of one year immediately  
            preceding the
            35    first day on which the trespass occurred, or, if  
            there has been no
            36    transfer or exchange of water within the watershed  
            during that period, the
            37    board shall consider the price per acre foot of water  
            transferred within the
            38    watershed in the most recent year in which there has  
            been a
            39    transfer or exchange.  Board Consideration shall  
               include only transfers of one year or less in  
               duration.  For the purposes of this section, the  
               board shall only consider the price per acre foot  
               of transfers or exchanges of water or water rights  







                                                                  SB 565
                                                                  Page  26

               for a period of one year or less.  The one-year  
               period does not include any time required for  
               monitoring, reporting, or mitigation before or  
               after the transfer or exchange is carried out.

                                                                   
                                                           94

                                                          - 7 -          
                                         
             SB 565

             1         SEC. 5.  
             2        SEC. 6.  Section 1055 of the Water Code is  
            amended to read:
             3        1055.   (a)  The executive director of the board  
            may issue a
             4    complaint to any person or entity on which  
            administrative civil
             5    liability may be imposed pursuant to Section 1052,  
            Article 4
             6    (commencing with Section 1845) of Chapter 12 of Part  
            2 of
             7    Division 2, or Section 5107. The complaint shall  
            allege the act or
             8    failure to act that constitutes a trespass or  
            violation, the provision
             9    of law authorizing civil liability to be imposed, and  
            the proposed
            10    civil liability.
            11       (b)  The complaint shall be served by personal  
            notice or certified
            12    mail, and shall inform the party served that the  
            party may request
            13    a hearing not later than 20 days from the date the  
            party was served.
            14    The hearing shall be before the board or a member of  
            the board in
            15    accordance with Section 183.
            16       (c)  The board may adopt an order setting  
            administrative civil
            17    liability, or determining that no liability will be  
            imposed, after any
            18    necessary hearing.
            19       (d)  Orders setting administrative civil liability  
            shall become







                                                                  SB 565
                                                                  Page  27

            20    effective and final upon issuance thereof and payment  
            shall be
            21    made.
            22         SEC. 6.  
            23        SEC. 7.  Section 1055.2 of the Water Code is  
            amended to read:
            24        1055.2.   No person or entity shall  A person or  
            entity shall not
            25    be subject to both civil liability imposed under  
            Section 1055 and
            26    civil liability imposed by the superior court under  
            Section 1052,
            27    1845, or 1846 for the same act or failure to act.
            28         SEC. 7.  
            29        SEC. 8.  Section 1055.3 of the Water Code is  
            amended to read:
            30        1055.3.  In determining the amount of civil  
            liability, the board
            31    shall take into consideration all relevant  
            circumstances, including,
            32    but not limited to, the extent of harm caused by the  
            violation, the
            33    nature and persistence of the violation, the length  
            of time over
            34    which the violation occurs, and with respect to the  
            violator, the
            35    ability to pay, the effect on the ability to continue  
            in business, the
            36    corrective action, if any, taken by the violator, and  
            other matters
            37    as justice may require.
            38         SEC. 8.  
            39        SEC. 9.  Section 1120 of the Water Code is  
            amended to read:


                                                                         
                                                  94
             SB 565                                       - 8 -

             1        1120.  This chapter applies to any decision or  
            order issued under
             2    this part or Section 275, Part 2 (commencing with  
            Section 1200),
             3    Part 2 (commencing with Section 10500) of Division 6,  
            Article 7







                                                                 SB 565
                                                                  Page  28

             4    (commencing with Section 13550) of Chapter 7 of  
            Division 7,
             5    Section 85230, or the public trust doctrine.
             6         SEC. 9.  
             7        SEC. 10.  Section 1228.5 of the Water Code is  
            amended to read:
             8        1228.5.   (a)  Registration of a small domestic  
            or livestock
             9    stockpond use pursuant to this article shall be  
            renewed prior to the
            10    expiration of each five-year period following  
            completed
            11    registration.
            12       (b)  Renewal of registration shall be made upon a  
            form prescribed
            13    by the board and shall contain  such   a  report of  
            water use made
            14    pursuant to the registration as may be required by  
            the board.
            15       (c)  The conditions established by the board  
            pursuant to Section
            16    1228.6  which   that  are in effect at the time of  
            renewal of registration
            17    shall supersede the conditions  which   that  were  
            applicable to the
            18    original completed registration.
            19       (d)  Failure to renew registration in substantial  
            compliance with
            20    the reporting requirements prescribed by the board  
            within the time
            21    period specified in subdivision (a), or to pay the  
            renewal fee
            22    specified in subdivision (b) of Section 1525, shall  
            result by
            23    operation of law in the revocation of any right  
            acquired pursuant
            24    to this article.
            25         SEC. 10.  
            26        SEC. 11.  Section 1228.7 of the Water Code is  
            amended to read:
            27        1228.7.  (a)  Any registrant may change the point  
            of diversion
            28    or place of use by delivering to the board an amended  
            registration
            29    form in accordance with Section 1228.3, including  
            payment of the







                                                                  SB 565
                                                                  Page  29

            30    registration fee specified in Section 1525, except  
            that the purpose
            31    of the use may not be changed and the change may not  
            operate to
            32    the injury of any legal user of the water involved.
            33       (b)  Any completed amended registration of water  
            use continues
            34    in effect the priority of right as of the date of the  
            original completed
            35    registration.
            36       (c)  All provisions of this article regarding  
            appropriations made
            37    pursuant thereto, including, but not limited to,  
            provisions regarding
            38    enforcement, are applicable to the appropriation as  
            described in
            39    the completed amended registration, except that the  
            conditions
            40    established by the board pursuant to Section 1228.6  
            which are in

                                                                         
                                                  94
                                                          - 9 -          
                                        
             SB 565

             1    effect at the time of completion of the amended  
            registration shall
             2    supersede the conditions which were applicable to the  
            original
             3    completed registration.
             4         SEC. 11.    Section 1240.5 is added to the Water  
            Code, to read:  
             5         1240.5.   (a)    In any proceeding before the board  
            in which it is  
             6     alleged that a right to appropriate water has ceased  
            or is subject to  
             7     forfeiture or revocation for nonuse, there shall be a  
            rebuttable  
             8     presumption that no use occurred unless that use is  
            included in a  
             9     statement submitted pursuant to any reporting or  
            monitoring  
            10     requirement established under any permit, license,  
            certificate,  







                                                                  SB 565
                                                                  Page  30

            11     registration, decision or order, or regulation issued  
            by the board  
            12     pursuant to this division, Section 275,Article 7  
            (commencing with  
            13     Section 13550) of Division 7, or the public trust  
            doctrine under  
            14     this part, and the statement is submitted within six  
            months after it  
            15     is required to be filed with the board. This section  
            does not apply  
            16     to any diversion or use that occurred before January  
            1, 2010.  
            17        (b)    The rebuttable presumption established in  
            subdivision (a)  
            18     applies only if the failure to file the statement is  
            shown to be  
            19     willful.  
            20        SEC. 12.  Section 1525 of the Water Code is  
            amended to read:
            21        1525.  (a)  Each person or entity who holds a  
            permit or license
            22    to appropriate water, and each lessor of water leased  
            under Chapter
            23    1.5 (commencing with Section 1020) of Part 1, shall  
            pay an annual
            24    fee according to a fee schedule established by the  
            board.
            25       (b)  Each person or entity who files any of the  
            following shall
            26    pay a fee according to a fee schedule established by  
            the board:
            27       (1)  An application for a permit to appropriate  
            water.
            28       (2)  A registration of appropriation for a small  
            domestic use or
            29    livestock stockpond use.
            30       (3)  A petition for an extension of time within  
            which to begin
            31    construction, to complete construction, or to apply  
            the water to
            32    full beneficial use under a permit.
            33       (4)  A petition to change the point of diversion,  
            place of use, or
            34    purpose of use, under a registration for small  
            domestic use or
            35    livestock stockpond use, or under a permit or  







                                                                  SB 565
                                                                  Page  31

            license.
            36       (5)  A petition to change the conditions of a  
            permit or license,
            37    requested by the permittee or licensee, that is not  
            otherwise subject
            38    to paragraph (3) or (4).

                                                                         
                                                  94
             SB 565                                      - 10 -

             1       (6)  A petition under Section 1707 or 1740 to  
            change the point
             2    of diversion, place of use, or purpose of use of a  
            water right that
             3    is not subject to a permit or license to appropriate  
            water.
             4       (7)  A petition to change the point of discharge,  
            place of use, or
             5    purpose of use, of treated wastewater, requested  
            pursuant to Section
             6    1211.
             7       (8)  An application for approval of a water lease  
            agreement.
             8       (9)  A request for release from priority pursuant  
            to Section 10504.
             9       (10)  An application for an assignment of a  
            state-filed application
            10    pursuant to Section 10504.
            11       (11)  A statement of water diversion and use  
            pursuant to Part
            12    5.1 (commencing with Section 5100).
            13       (c)  The board shall set the fee schedule  
            authorized by this section
            14    so that the total amount of fees collected pursuant  
            to this section
            15    equals that amount necessary to recover costs  
            incurred in
            16    connection with the issuance, administration, review,  
            monitoring,
            17    and enforcement of permits, licenses, certificates,  
            and registrations
            18    to appropriate water, water leases, statements of  
            diversion and use,
            19    and orders approving changes in point of discharge,  
            place of use,







                                                                  SB 565
                                                                  Page  32

            20    or purpose of use of treated wastewater. The board  
            may include,
            21    as recoverable costs, but is not limited to  
            including, the costs
            22    incurred in reviewing applications, registrations,  
            statements of
            23    diversion and use, petitions and requests,  
            prescribing terms of
            24    permits, licenses, registrations, and change orders,  
            enforcing and
            25    evaluating compliance with permits, licenses,  
            certificates,
            26    registrations, change orders, and water leases,  
            inspection,
            27    monitoring, planning, modeling, reviewing documents  
            prepared
            28    for the purpose of regulating the diversion and use  
            of water,
            29    applying and enforcing  the public trust doctrine,   
            Section 275, the
            30    prohibition set forth in Section 1052 against the  
            unauthorized
            31    diversion or use of water subject to this division,  
            the requirements
            32    under Part 5.1 (commencing with Section 5100) for  
            filing
            33    statements of diversion and use, and the  
            administrative costs
            34    incurred in connection with carrying out these  
            actions.
            35       (d)  (1)  The board shall adopt the schedule of  
            fees authorized
            36    under this section as emergency regulations in  
            accordance with
            37    Section 1530.
            38       (2)  For filings subject to subdivision (b), the  
            schedule may
            39    provide for a single filing fee or for an initial  
            filing fee followed
            40    by an annual fee, as appropriate to the type of  
            filing involved, and

                       94                                               
                                - 11 -
            SB 565








                                                                  SB 565
                                                                  Page  33

             1    may include supplemental fees for filings that have  
            already been
             2    made but have not yet been acted upon by the board at  
            the time
             3    the schedule of fees takes effect.
             4       (3)  The board shall set the amount of total  
            revenue collected
             5    each year through the fees authorized by this section  
            at an amount
             6    equal to the revenue levels set forth in the annual  
            Budget Act for
             7    this activity. The board shall review and revise the  
            fees each fiscal
             8    year as necessary to conform with the revenue levels  
            set forth in
             9    the annual Budget Act. If the board determines that  
            the revenue
            10    collected during the preceding year was greater than,  
            or less than,
            11    the revenue levels set forth in the annual Budget  
            Act, the board
            12    may further adjust the annual fees to compensate for  
            the over or
            13    under collection of revenue.
            14       (e)  Annual fees imposed pursuant to this section  
            for the 2003?04
            15    fiscal year shall be assessed for the entire 2003?04  
            fiscal year.
            16       (f)  Fees imposed on holders of riparian water  
            rights or rights to
            17    water appropriated prior to December 19, 1914,  
            pursuant to this
            18    chapter shall bear a fair or reasonable relationship  
            to the payor's
            19    burden on, or benefits from, the board's water rights  
            program
            20    funded by those fees.
            21        SEC. 13.  Section 1535 of the Water Code is  
            amended to read:
            22        1535.   (a)  Any fee subject to this chapter that  
            is required in
            23    connection with the filing of an application,  
            registration, request,
            24    statement, or proof of claim, other than an annual  
            fee required after
            25    the period covered by the initial filing fee, shall  







                                                                  SB 565
                                                                  Page  34

            be paid to the
            26    board.
            27       (b)  If a fee established under subdivision (b) of  
            Section 1525,
            28    Section 1528, or Section 13160.1 is not paid when  
            due, the board
            29    may cancel the application, registration, petition,  
            request, statement,
            30    or claim, or may refer the matter to the State Board  
            of Equalization
            31    for collection of the unpaid fee.
            32        SEC. 14.  Section 1538 of the Water Code is  
            amended to read:
            33        1538.  (a)  In any proceeding pursuant to Section  
            1052 in which
            34    it is determined that there has been a violation of  
            the prohibition
            35    against the unauthorized diversion or use of water  
            subject to this
            36    division, the board or court, as the case may be, may  
            impose an
            37    additional liability in the amount of 150 percent of  
            any annual fees
            38    that would have been required under this division if  
            the diversion
            39    or use had been authorized by a permit or license to  
            appropriate
            40    water.
                                                         94             
                                    - 12 -
            SB 565 
            
             1       (b)  In any proceeding pursuant to Section 5107 in  
            which the
             2    board imposes liability for a failure to file a  
            statement of diversion
             3    and use or for a material misstatement in a statement  
            of diversion
             4    and use, the board may impose an additional liability  
            in the amount
             5    of 150 percent of any fees that have not been paid  
            but would have
             6    been required under this division if the statement of  
            diversion and
             7    use had been filed and did not make any material  
            misstatement.







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                                                                  Page  35

             8       (c)  The additional liability imposed under this  
            section may
             9    include interest, at the rate provided under Section  
            685.010 of the
            10    Code of Civil Procedure, from the dates the annual  
            fees would
            11    have been assessed.
            12        SEC 15.  Section 1550 of the Water Code is  
            amended to read:
             13      1550.  (a)  There is in the State Treasury a Water  
            Rights Fund,  
            14      which is hereby established.  
            15      (b)  There is hereby established the Water Rights  
            Protection  
            16      Subaccount in the Water Rights Fund.  It is the  
            intent of the  
            17      Legislature that the moneys in the Water Rights  
            Protection  
            18      Subaccount be available for expenditure, upon  
            appropriation by 
            19      the Legislature, to reduce fees on water rights  
            holders, for water  
            20      restoration projects, conservancies, and for General  
            Fund purposes.  
            21      and conservancies.
             22        SEC.  16.  15.  Section 1551 of the Water Code is  
            amended to read:
            23        1551.   All of the following shall be deposited  
            in the Water
            24    Rights Fund:
            25       (a)  All fees, expenses, and penalties collected  
            by the board or
            26    the State Board of Equalization under this chapter  
            and Part 3
            27    (commencing with Section 2000).
            28       (b)  All funds collected under Section 1052,  
            Article 4
            29    (commencing with Section 1845) of Chapter 12, and  
            Section 5107.
            30       (c)  All fees collected under Section 13160.1 in  
            connection with
            31    certificates for activities involving hydroelectric  
            power projects
            32    subject to licensing by the Federal Energy Regulatory  
            Commission.
            33        SEC.  17.  16.  Section 1825 of the Water Code is  







                                                                  SB 565
                                                                  Page  36

            amended to read:
            34        1825.   It is the intent of the Legislature that  
            the state should
            35    take vigorous action to enforce the terms and  
            conditions of permits,
            36    licenses, certifications, and registrations to  
            appropriate water, to
            37    enforce state board orders and decisions, to prevent  
            the unlawful
            38    diversion of water, and to prevent the waste,  
            unreasonable use,
            39    unreasonable method of use, or unreasonable method of  
            diversion,
            40    of water, and to enforce reporting and monitoring  
            requirements.

                                                                         
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                                                         - 13 -          
                                         
            SB 565

             1        SEC.  18.  17.  Section 1826 is added to the Water  
            Code, to read:
             2        1826.   The board shall establish a schedule of  
            penalties that
             3    applies to small farms for de minimis water right  
            violations under
             4    this division.
             5        SEC.  19.  18.  Section 1845 of the Water Code is  
            amended to read:
             6        1845.   (a)  Upon the failure of any person to  
            comply with a
             7    cease and desist order issued by the board pursuant  
            to this chapter,
             8    the Attorney General, upon the request of the board,  
                                                              shall petition
             9    the superior court for the issuance of prohibitory or  
            mandatory
            10    injunctive relief as appropriate, including a  
            temporary restraining
            11    order, preliminary injunction, or permanent  
            injunction.
            12       (b)  (1)  Any person or entity who violates a  
            cease and desist
            13    order issued pursuant to this chapter may be liable  







                                                                  SB 565
                                                                  Page  37

            in an amount
            14    not to exceed  the greater of either of  the following  
             amounts  :
            15       (A)  For a first enforcement proceeding  
               where the violation of a cease and desist  
               order does not involve an unauthorized  
               diversion or use of water exceeding 1,000 acre  
               feet, one thousand dollars ($1,000) for each  
               day in which the
            16    violation occurs  for the first enforcement  
            proceeding or five  .
                 (B) For a first enforcement proceeding where  
               the violation of a cease and desist order  
               involves a diversion or use of water exceeding  
               1,000 acre feet per day on any day in which  
               the violation occurs, the greater of either of  
               the following:
                 (i) One thousand dollars ($1,000) for each  
               day in which the violation occurs.
                 (ii)  The highest market value of the water  
               subject to the violation as determined  
               pursuant to Section 1052.5. 
                 (C) For any subsequent enforcement  
               proceeding, the greater of either of the  
               following:
            17       (i) Five thousand dollars ($5,000) for  
            each day in which the violation
            18    occurs  for any subsequent enforcement  
            proceeding  .
            19       (ii) The highest market value of the  
            water subject to the violation as determined  on a  
            20     regional basis   pursuant to Section 1052.5.
            21       (2)  Civil liability may be imposed by the  
            superior court. The
            22    Attorney General, upon the request of the board,  
            shall petition the
            23    superior court to impose, assess, and recover those  
            sums.
            24       (3)  Civil liability may be imposed  
            administratively by the board
            25    pursuant to Section 1055.
            26       (c)  In determining the appropriate amount, the  
            court, or the
            27    board, as the case may be, shall take into  
            consideration all relevant
            28    circumstances, including, but not limited to, the  







                                                                  SB 565
                                                                  Page  38

            extent of harm
            29    caused by the violation, the nature and persistence  
            of the violation,
            30    the length of time over which the violation occurs,  
            and, with respect
            31    to the violator, the ability to pay, the effect on  
            the ability to
            32    continue in business, the corrective action, if any,  
            taken by the
            33    violator, and other matters as justice may require.
            34       (d)  (1)   All funds recovered pursuant to this  
            section shall be
            35    deposited in the Water Rights Fund established  
            pursuant to Section
            36    1550.
            37     (2) Any funds recovered pursuant to this  
            section that exceed 
             38     the amounts that were authorized before  
            January 1, 2011, shall be  39     deposited in the  
            Water Rights Protection Subaccount in the Water  40  
               Rights Fund established pursuant to Section  
            1550. 
             
                                                                         
                                                  94
             SB 565                                      - 14 -

             1       (e)  The increase in the amount of penalties that  
            may be imposed
             2    pursuant to the amendments made to this section by   
            this act during  
             3    Senate Bill 565 of the 2009?10 Regular Session of the  
            Legislature
             4    does not apply to violations that occurred prior to  
            January 1, 2011.
             5        SEC.  20.  19.  Section 1846 is added to the Water  
            Code, to read:
             6        1846.   (a)  Any person or entity subject to a  
            monitoring or
             7    reporting requirement specified in subdivision (f)  
            who violates
             8    that reporting or monitoring requirement, makes a  
            material
             9    misstatement in any record or report submitted under  
            that reporting
            10    or monitoring requirement, or tampers with or renders  







                                                                  SB 565
                                                                  Page  39

            inaccurate
            11    any monitoring device required under that reporting  
            or monitoring
            12    requirement shall be liable for a sum not to exceed  
            five hundred
            13    dollars ($500) for each day in which the violation  
            occurs.
            14       (b)  Civil liability may be imposed by the  
            superior court. The
            15    Attorney General, upon the request of the board,  
            shall petition the
            16    superior court to impose, assess, and recover those  
            sums.
            17       (c)  Civil liability may be imposed  
            administratively by the board
            18    pursuant to Section 1055.
            19       (d)  In determining the appropriate amount, the  
            court, or the
            20    board, as the case may be, shall take into  
            consideration all relevant
            21    circumstances, including, but not limited to, the  
            extent of harm
            22    caused by the violation, the nature and persistence  
            of the violation,
            23    the length of time over which the violation occurs,  
            and, with respect
            24    to the violator, the ability to pay, the effect on  
            the ability to
            25    continue in business, the corrective action, if any,  
            taken by the
            26    violator, and other matters as justice may require.
            27       (e)  All funds recovered pursuant to this section  
            shall be
            28    deposited  in the Water Rights Protection Subaccount   
            in the Water
            29    Rights Fund established pursuant to Section 1550.
            30       (f)  (1)  This section applies to any reporting or  
            monitoring
            31    requirement established under any permit, license,  
            certificate,
            32    registration, decision or order, or regulation issued  
            by the board
            33    pursuant to this division, Section 275, or Article 7  
            (commencing
            34    with Section 13550) of Division 7  , or the public  
            trust doctrine  .







                                                                  SB 565
                                                                  Page  40

            35       (2)  This section also applies to any reporting or  
            monitoring
            36    requirement established by the department under  
            Section 275, if
            37    the department requests enforcement pursuant to this  
            section.
            38       (3)  This section does not provide a basis for  
            imposing liability
            39    on a watermaster who is subject to reporting or  
            monitoring

                                                                         
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                                                           - 15 -        
                                                          
            SB 565

             1    requirements but does not divert or use the water  
            subject to those
             2    requirements.
             3        SEC.  21.  20.  Section 1847 is added to the Water  
            Code, to read:
             4        1847.   (a)  Any person or entity who violates  
            any term or
             5    condition of a permit, license, certificate, or  
            registration issued
             6    under this division or any order or regulation  
            adopted by the board
             7    under Section 275 may be liable in an amount not to  
            exceed five
             8    hundred dollars ($500) for each day in which the  
            violation occurs.
             9       (b)  Civil liability may be imposed by the  
            superior court. The
            10    Attorney General, upon the request of the board,  
            shall petition the
            11    superior court to impose, assess, and recover those  
            sums.
            12       (c)  Civil liability may be imposed  
            administratively by the board
            13    pursuant to Section 1055.
            14       (d)  In determining the appropriate amount, the  
            court, or the
            15    board, as the case may be, shall take into  
            consideration all relevant
            16    circumstances, including, but not limited to, the  







                                                                  SB 565
                                                                  Page  41

            extent of harm
            17    caused by the violation, the nature and persistence  
            of the violation,
            18    the length of time over which the violation occurs,  
            and, with respect
            19    to the violator, the ability to pay, the effect on  
            the ability to
            20    continue in business, the corrective action, if any,  
            taken by the
            21    violator, and other matters as justice may require.
            22       (e)  No liability shall be recoverable under this  
            section for any
            23    violation for which liability is recovered under  
            Section 1052 or
            24    1846.
            25       (f)  All funds recovered pursuant to this section  
            shall be deposited
            26    in the Water Rights Protection Subaccount in the  
            Water Rights
            27    Fund established pursuant to Section 1550.
            28        SEC.  22.  21.  Section 5103 of the Water Code  , as  
            amended by  
            29     Section 5 of Chapter 2 of the Seventh Extraordinary  
            Session of  
            30     the Statutes of 2009,  is amended to read:
            31        5103.  Each statement shall be prepared on a form  
            provided by
            32    the board. The statement shall include all of the  
            following
            33    information:
            34       (a)  The name and address of the person who  
            diverted water and
            35    of the person filing the statement.
            36       (b)  The name of the stream or other source from  
            which water
            37    was diverted, and the name of the next major stream  
            or other body
            38    of water to which the source is tributary.
            39       (c)  The place of diversion. The location of the  
            diversion works
            40    shall be depicted on a specific United States  
            Geological Survey

                                                                         
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            SB 565                                      - 16 -







                                                                  SB 565
                                                                  Page  42


             1    topographic map, or shall be identified using the  
            California
             2    Coordinate System, or latitude and longitude  
            measurements. If
             3    assigned, the public land description to the nearest  
            40-acre
             4    subdivision and the assessor's parcel number shall  
            also be provided.
             5       (d)  The capacity of the diversion works and of  
            the storage
             6    reservoir, if any, and the months in which water was  
            used during
             7    the preceding calendar year.
             8       (e)  (1)  On and after January 1, 2012, monthly  
            records of water
             9    diversions. The measurements of the diversion shall  
            be made using
            10    best available technologies and best professional  
            practices. Nothing
            11    in this paragraph shall be construed to require the  
            implementation
            12    of technologies or practices by a person who provides  
            to the board
            13    documentation demonstrating that the implementation  
            of those
            14    practices is not locally cost effective.
            15       (2)  (A)  The terms of, and eligibility for, any  
            grant or loan
            16    awarded or administered by the department, the board,  
            or the
            17    California Bay-Delta Authority, or its successor on  
            behalf of a
            18    person that is subject to paragraph (1) shall be  
            conditioned on
            19    compliance with that paragraph.
            20       (B)  Notwithstanding subparagraph (A), the board  
            may determine
            21    that a person is eligible for a grant or loan even  
            though the person
            22    is not complying with paragraph (1), if both of the  
            following apply:
            23       (i)  The board determines that the grant or loan  
            will assist the
            24    grantee or loan recipient in complying with paragraph  
            (1).







                                                                  SB 565
                                                                  Page  43

            25       (ii)  The person has submitted to the board a  
            one-year schedule
            26    for complying with paragraph (1).
            27       (C)  It is the intent of the Legislature that the  
            requirements of
            28    this subdivision shall complement and not affect the  
            scope of
            29    authority granted to the board by provisions of law  
            other than this
            30    article.
            31       (f)  The purpose of use.
            32       (g)  A general description of the area in which  
            the water was
            33    used. The location of the place of use shall be  
            depicted on a specific
            34    United States Geological Survey topographic map and  
            on any other
            35    maps with identifiable landmarks. If assigned, the  
            public land
            36    description to the nearest 40-acre subdivision and  
            the assessor's
            37    parcel number shall also be provided.
            38       (h)  The year in which the diversion was commenced  
            as near as
            39    is known.
            40        SEC.  23.  22.  Section 5106 of the Water Code is  
            amended to read:

                                                                         
                                                  94























                                                                  SB 565
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                                                       - 17 -          
                                      
           SB 565

           1        5106.  (a)  Neither the statements submitted  
          under this part nor
           2    the determination of facts by the board pursuant to  
          Section 5105
           3    shall establish or constitute evidence of a right to  
          divert or use
           4    water.
           5       (b)  (1)  The board may rely on the names and  
          addresses included
           6    in statements submitted under this part for the  
          purpose of
           7    determining the names and addresses of persons who  
          are to receive
           8    notices with regard to proceedings before the board.
           9       (2)  Notwithstanding paragraph (1), any person may  
          submit, in
          10    writing, a request to the board to provide  
          notification to a different
          11    address, and the board shall provide the notification  
          to that address.
          12       (3)  If the board provides notice to persons who  
          file statements
          13    under this part, the notice shall not be determined  
          to be inadequate
          14    on the basis that notice was not received by a  
          person, other than a
          15    party to whom the board's action is directed, who  
          fails to file a
          16    statement required to be filed under this part.
          17       (4)  This subdivision does not affect the  
          requirement in Section
          18    2527 to provide notice to all persons who own land  
          that appears
          19    to be riparian to the stream system.
          20       (c)  In any proceeding before the board to  
          determine whether an
          21    application for a permit to appropriate water should  
          be approved,
          22    any statement submitted under this part or  
          determination by the
          23    board pursuant to Section 5105 is evidence of the  








                                                                  SB 565
                                                                  Page  45

          facts stated
          24    therein.
          25       (d)  (1)  In any proceeding before the board in  
          which it is alleged
          26    that  an appropriative right   a right to appropriate  
          water  has ceased
          27    or is subject to forfeiture for nonuse  because water  
          has not been  
          28     put to beneficial use  , there shall be a rebuttable  
          presumption that
          29    no use required to be included in a statement  
          submitted under this
          30    part occurred unless that use is included in a  
          statement submitted
          31    under this part and that the statement is submitted  
          within six
          32    months after it is required to be filed with the  
          board.  For the 
                   purposes of this subsection, a use included in a  
          statement canceled
                   pursuant to Section1535(b) is still deemed  
          submitted. 
          33       (2)  Paragraph (1) does not apply to any use that  
          occurred before
          34    January 1, 2010.
          35        (3)    The rebuttable presumption established in  
          paragraph (1)  
          36     applies only if the failure to file the statement is  
          shown to be  
          37     willful.  


                                                                  O