BILL ANALYSIS
SB 565
Page 1
Date of Hearing: August 4, 2010
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
SB 565 (Pavley) - As Amended: August 2, 2010
Policy Committee: Water, Parks and
Wildlife Vote: 7-6
Urgency: No State Mandated Local Program:
No Reimbursable: No
SUMMARY
This bill provides the State Water Resources Control Board with
new authority and resources to investigate and prosecute
unauthorized diversions and uses of water, and increases
consequences for failing to report water diversions and uses.
(Summary continued below.)
FISCAL EFFECT
1)Ongoing annual costs (Water Rights Fund) to the water board
ranging from $400,000 to $800,000 to:
a) Conduct hearings to identify diverters who must prepare
and submit technical and monitoring reports and determine
which parties should pay for the reports and the amounts
they should pay.
b) Review revision report orders, upon request or at the
water board's own motion.
c) Review reports.
d) Develop penalties that apply to small farms for de
minimis water right violations.
e) Establish fee schedules for those newly required to
report "statements of diversion and use" and collecting new
fees.
2)Increased annual revenue of an unknown amount, but potentially
$200,000 to $400,000, from requiring additional types of water
diverters to pay annual fees to the water board for filing
statements of diversion and use. (Water Rights Fund) This
revenue would directly offset GF costs that would otherwise be
used to pay for processing of statements of diversion and use.
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3)Increased annual revenue of an unknown amount, but potentially
in the hundreds of thousands of dollars, from new and
increased penalties for unauthorized diversion and use,
failure to comply with cease and desist orders, and failure to
file or material misstatements on a statement of diversion or
use. (Water Rights Fund)
4)Increased annual revenue of an unknown amount, but potentially
in the tens of thousands of dollars, from penalties that apply
to small farms for de minimis water right violations. (Water
Rights Fund)
SUMMARY (continued)
Specifically, this bill:
1)With proposed new authority and resources, the water board
may:
a) Order a water diverter to submit technical or monitoring
reports that are within the diverters possession.
b) In the case of a large diverter-meaning one that diverts
200 or more acre feet of water per year-prepare and submit
technical or monitoring reports, unless doing so would
create a material hardship.
c) Charge other diverter's a portion of the cost of the
report if a report covers several diversions.
d) Enter a diverter's property to investigate water use
violations.
2)Sets the maximum civil liability amounts for unauthorized
diversion or use or failure to comply with a cease and desist
order issued by the board at either (a) a specified schedule
of dollar amounts or (b) the highest market value of the water
diverted.
3)Adds the following types of water uses to those requiring
annual fees to cover costs for administration, monitoring, and
enforcement:
a) small domestic uses;
b) livestock stockpond use;
c) petitions to change point of diversion, place of use, or
purpose of use of a water right not subject to permit,
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including riparian rights and appropriative rights
established prior to 1914. (Annual fees on holders of
riparian water rights and pre-1914 water rights are to bear
a fair or reasonable relationship to the payer's burden on,
or benefits from, the board's water rights program.)
4)Increases consequences for failing to report water diversions
and uses, such as:
a) Adds "statements" to the list of actions for which
failure to pay a fee may result in cancellation of a water
right.
b) Allows the board or a court to impose an enhanced fine
on those who illegally divert or use water that is equal to
150% of the annual fees the diverter or user would have
paid for legal diversion or use.
c) Requires the water board to establish a schedule of
penalties that apply to small farms for de minimis water
right violations.
d) Allows the water board or a superior court to establish
a penalty, not to exceed $500 per day, for:
i) 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.
ii) Violations of any term or condition of certain
permits, licenses, certificates, or registrations or any
order or regulation adopted by the water board to prevent
waste or unreasonable use of water.
e) Adds a rebuttable presumption of nonuse-which could lead
to forfeiture of a water right-for failure to submit a
statement of water use.
COMMENTS
1)Rationale . Supporters describe this bill as implementing many
of the recommendations of the Delta Vision Blue Ribbon Task
Force by providing tools to ensure proper reporting of water
diversion and use, establishing reporting incentives, and
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increasing fines for illegal diversions.
2)Background .
a) Water Use, Rights, Permitting and Enforcement . The
California Constitution requires all water use to be
beneficial and not wasteful. Generally, there are two
types of water use in California:
i) Riparian -Use of water on property adjacent to a
stream for agricultural or domestic use. Does not
require a permit from the water board, though the board
asks riparian users to report diversions in a statement
of diversion and use.
ii) Appropriative -Taking water for use on a property not
adjacent to the body of water from which diversion is
made. Requires a permit from the water board, unless
appropriative right precedes 1914 (when California
changed water use laws).
(Groundwater use is a third type of use, but, generally, it
does not require a permit and is not monitored by the
state.)
The State Water Resources Control Board issues permits for
water use and enforces violations of use permits and the
Constitution. This enforcement may include cancellation of
use permits.
b) Delta Vision and the Water Package of 2009 . SB 1574
(Kuehl, Chapter 535, Statutes of 2006) directed the
Secretary for Resources to convene a committee to develop a
strategic vision for a sustainable Delta, known as the
"Delta Vision." Later that year, the governor issued an
executive order, which required, among other things, an
independent Blue Ribbon Task Force to submit to the Delta
Vision Committee and the governor a strategic plan to
implement the Delta Vision, which was to be recommended to
the Legislature.
In 2008, the task force delivered its finding to the
secretary, who summarized, interpreted and prioritized the
task force's findings in a report describing implementation
of the Delta Vision. Among the many recommendations in the
secretary's report was one to enhance and expand the water
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board's water rights administrative accountability.
In 2009, the Legislature sought to enact many of the
recommendations of the Delta Vision report. A number of
bills included provisions addressing many of the
recommendations included in the report. At one point,
those bills included provisions similar to the elements
contained in this bill. Ultimately, the Legislature passed
a five-bill package, which addressed Delta governance,
groundwater use and reporting, water conservation, water
use reporting and enforcement, and funding through an $11
billion bond proposal. The final package, however, did not
include the provisions included in this bill. There are
conflicting stories as to why these enforcement and
reporting provisions were left out of the water package,
and as to whether there was an agreement to move these
provisions this year.
3)Support . Supporters include East Bay Municipal Utility
District, several environmental organizations and others, who
contend this bill provides the water board with authorities
consistent with those recommended by Delta Vision. They argue
the bill will benefit the public and all the state's water
users by: (a) requiring monitoring by all water diverters; (b)
authorizing monetary penalties for monitoring and reporting
violations; and (c) creating adequate penalties for
unauthorized diversions and violations.
4)Opposition . Opponents include numerous public and private
water agencies, industry groups and others, who express
numerous concerns with the bill. Among those concerns:
a) The board can require water users to fund and perform
expensive reports, in some cases for purposes that provide
public benefits but not directly benefit the water user.
b) Penalties for unauthorized diversions and uses of water
could be calculated on the highest market value of the
water, which may be very costly, difficult to determine or,
in some instances, nonexistent, and subject various types
of users, such as small farmers, to the costs of other
types of users, such as commercial developers.
c) Substantial penalty amounts may be applied not just to
illegal diversions of water but to technical reporting
errors, too.
d) Increased scope of new fee provisions and the amount of
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fees.
e) Increased reporting requirements.
f) Potential forfeiture of water rights for failure to pay
fees.
Analysis Prepared by : Jay Dickenson / APPR. / (916) 319-2081