BILL ANALYSIS
SB 565
Page 1
REPLACE - 08/18/10 Changes per consultant.
SENATE THIRD READING
SB 565 (Pavley and Steinberg)
As Amended August 16, 2010
Majority vote
SENATE VOTE :Vote not relevant
WATER, PARKS & WILDLIFE 7-6
APPROPRIATIONS 9-6
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|Ayes:|Huffman, Arambula, |Ayes:|Fuentes, Bradford, |
| |Blumenfield, De La Torre, | |Huffman, Coto, Gatto, |
| |Gatto, | |Hall, Skinner, Solorio, |
| |Bonnie Lowenthal, Salas | |Torlakson |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Fuller, Anderson, Tom |Nays:|Conway, Harkey, Miller, |
| |Berryhill, | |Nielsen, Norby, Torrico |
| |Caballero, Fletcher, | | |
| |Yamada | | |
| | | | |
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SUMMARY : 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 :
1) Makes state and local agencies subject to the new fees
established under this bill and any fees which may be
established pursuant to the Sacramento-San Joaquin Delta
Reform Act.
2) Gives the SWRCB new powers in investigations or proceedings
related to waste or unreasonable use of water, water rights,
and availability of unappropriated water. These powers
include the ability to:
a) Request technical or monitoring program reports in a
person or entity's possession or, for diversions over 200
acre feet (af) annually, the ability to request preparation
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of technical or monitoring reports;
b) Charge others a portion of the cost of the report if a
report covers several diversions; and,
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 an unauthorized
diversion or use of water or failure to comply with a cease
and desist order at $1,000 per day for a first offense of
less than 1,000 af on any given day. The maximum penalty for
subsequent offenses is the greater of either $5,000 per day
or the economic benefit of the unauthorized diversion. The
economic benefit of the unauthorized diversion is also the
maximum penalty for a first offense which exceeds 1,000 af on
any given day.
4) Where the economic benefit of the violation is equal to the
market value of the water, determines the market value as the
price, 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 and requires civil
liability determinations to consider, with respect to the
violator, the ability to pay and the effect on the ability to
continue in business.
7) Conforms the Delta Watermaster's SWRCB-delegated authority to
the existing process for reconsideration, amendment, and
judicial review of water right decisions and orders.
8) Requires fees for statements of diversion and use, including
those for riparian rights and appropriative rights
established prior to 1914, and for dedications of in-stream
flow pursuant to Water Code Section 1707, to the extent those
dedications are not already subject to fees.
9) Provides that the failure to pay a statement fee may result
in cancellation of the statement or referral to State Board
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of Equalization for collection of the fee.
10)Allows the SWRCB or a court to impose a fine equal to 150% of
the fees an authorized diversion or use would have paid in
instances where there has been an unauthorized diversion or
use, failure to file a statement of diversion or use, or
material misstatement on a statement of diversion or use.
11)Calls for vigorous enforcement of waste and unreasonable use
of water, unreasonable method of diversion, and monitoring
requirements.
12)Requires the SWRCB to establish a schedule of penalties for
the de minimis water right violations of small farms.
13)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.
14)Allows a successor to the Bay Delta Authority to enforce Bay
Delta Authority grant or loan requirements for monthly
records of water diversions.
15)Adds a rebuttable presumption of nonuse, which could lead to
forfeiture of a water right, for failure to submit a
statement of water use. Exempts a statement of use which is
submitted, even if later canceled for failure to pay a fee,
from the rebuttable presumption of nonuse.
EXISTING LAW :
1) Prohibits, generally, a state or local government, 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 a 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.
2) Establishes the Water Rights Fund (WRF) and requires
specified fees and penalties collected by the SWRCB, or State
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Board of Equalization on behalf of the SWRCB, to be deposited
in the WRF.
3) Establishes that the unauthorized diversion or use of water
is a trespass. Allows civil liability to be imposed for the
unauthorized diversion or use of water not to exceed $500 per
day. 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.
4) 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.
5) 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. Allows the SWRCB to establish
reasonable general conditions for small domestic or livestock
stockponds uses.
6) Requires an amended registration form for a change in the
point of diversion or place of use of water.
7) Requires each person or entity that holds an appropriative
permit or license to pay an annual fee according to a fee
schedule established by the SWRCB. 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 Equalization for collection of
the unpaid fee.
8) 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.
9) Makes it the intent of the legislature that the State should
take vigorous action to enforce appropriative water rights
permits, licenses, certifications and registrations, SWRCB
orders and decisions, and to prevent the unlawful diversion
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of water.
10)Requires, with certain exceptions, that each water diverter
must file with the SWRCB a statement of diversion and use.
Requires specified information in a statement, including, as
of January 1, 2012, monthly records of water diversions.
Conditions eligibility for certain grants or loans on
compliance with monthly reporting requirement.
FISCAL EFFECT :
1)Ongoing annual costs (WRF) 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; and,
e) Establish fee schedules for those newly required to
report "statements of diversion and use" and collecting new
fees.
2)Increased annual revenue (WRF) of an unknown amount but
potentially:
a) $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. This revenue would
directly offset GF costs that would otherwise be used to
pay for processing of statements of diversion and use;
b) 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
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use; and,
c) Tens of thousands of dollars from penalties that apply
to small farms for de minimis water right violations.
COMMENTS : The California Constitution requires all water use to
be beneficial and not wasteful. Generally, there are two types
of surface water rights in California: Riparian and
appropriative rights. Riparian rights apply to property
adjacent to a stream for agricultural or domestic use. Riparian
rights do not require a permit from the water board, though the
board asks riparian users to report diversions in a statement of
diversion and use. Appropriative rights generally apply to the
use on a property not adjacent to the body of water from which
the diversion is made. Appropriative rights require a permit
from the water board, unless the appropriative right precedes
1914 (when California changed water use laws). The SWRCB issues
permits for water use and enforces violations of use permits and
the Constitution. This enforcement may include cancellation of
use permits.
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 Natural
Resources Agency 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 SWRCB'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.
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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 perspectives 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 all of these
specific provisions this year.
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 recommendations and
benefit the public and water rights holders statewide by
providing the SWRCB the tools it needs to eliminate illegal
diversions and de-incentivize illegal behavior. These tools
include ensuring proper reporting of water diversion and use,
establishment of reporting incentives, and increases in fines
for illegal diversions. 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.
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 response to opponents' concerns, amendments were adopted to
clarify that: 1) The SWRCB can only request a person or entity
develop a technical or monitoring report if that person or
entity uses 200 af annually or more; 2) Property inspections may
only be conducted with the landowner's permission or a duly
obtained warrant; 3) The maximum penalty for a first enforcement
proceeding for the unauthorized diversion or use of water or the
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violation of cease and desist order, is $1,000 per day unless
the unauthorized diversion at issue exceeds 1000 af on any given
day, in which case the maximum penalty is the greater of either
$1,000 per day or the economic benefit of the violation, defined
as the savings or monetary gain derived from the act or omission
that constitutes the violation; 4) The maximum penalty in
subsequent enforcement proceedings is the greater of either
$5,000 per day or the economic benefit of the violation; and, 5)
A statement of use which is submitted, even if later canceled
for failure to pay a fee, is exempt from the rebuttable
presumption of nonuse.
Analysis Prepared by : Tina Cannon Leahy / W., P. & W. / (916)
319-2096
FN: 0006308 0006136