BILL ANALYSIS                                                                                                                                                                                                    

                                                                 AB 426
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         AB 426 (Salas)
         As Amended  April 23, 2013
         Majority vote 

          WATER, PARKS & WILDLIFE      10-5                   APPROPRIATIONS  
         |Ayes:|Rendon, Blumenfield,      |Ayes:|Gatto, Bocanegra,         |
         |     |Bocanegra, Fong, Frazier, |     |Bradford,                 |
         |     |Gatto, Gomez, Gray,       |     |Ian Calderon, Campos,     |
         |     |Yamada, Bloom             |     |Eggman, Gomez, Hall,      |
         |     |                          |     |Rendon, Pan, Quirk, Weber |
         |     |                          |     |                          |
         |Nays:|Bigelow, Allen, Dahle,    |Nays:|Harkey, Bigelow,          |
         |     |Beth Gaines, Patterson    |     |Donnelly, Linder, Wagner  |
         |     |                          |     |                          |
          SUMMARY  :  Allows a party with a water right that was decreed  
         through a statutory adjudication prior to January 1, 1981, to use  
         an alternative voluntary method for seeking a temporary,  
         long-term, or permanent transfer of that water right.  Allows that  
         party, instead of going back to court, to seek a change through  
         the same administrative processes at the State Water Resources  
         Control Board (State Water Board) that are available to parties  
         with statutorily adjudicated water rights that date after January  
         1, 1981, or who hold permits or licenses, regardless of the date.

          EXISTING LAW  :  

          1)Requires, since 1914, that a party seeking to appropriate  
           surface waters of the state apply to the State Water Board for a  
           permit or license and empowers the State Water Board with  
           continuing jurisdiction over those permits and licenses.  Grants  
           continued recognition to other types of water rights that  
           existed at the time the permit system was created including  
           riparian rights, pre-1914 appropriative rights, and others,  
           subject to certain conditions.

         2)Allows a water rights applicant, permittee, or licensee to  
           petition the State Water Board in order to make a change in the  
           point of diversion, place of use, or purpose of use from that  


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           specified in a water rights application, permit, or license  
           (change petition).  

         3)Allows the State Water Board to approve a valid change petition  
           as long as, among other requirements, the change would not  
           result in substantial injury to any legal user of water and  
           would not unreasonably affect fish, wildlife, or other instream  
           beneficial uses.

         4)Establishes procedures for determining all of the water rights  
           on a stream system, including rights based on appropriation,  
           riparian right, or other basis, pursuant to administrative  
           proceedings before the State Water Board followed by judicial  
           proceedings and the issuance of a decree that is conclusive as  
           to the rights of all existing claimants or would-be claimants  
           upon that stream system (statutory adjudication decree).

         5)Allows, for a water right obtained pursuant to a statutory  
           adjudication decree issued after January 1, 1981, or for a water  
           right pursuant to a statutory adjudication decree but that is  
           based on a permit or license, regardless of the date of the  
           decree, the water right holder to seek a change to that water  
           right through a change petition to the State Water Board.  

         6)Requires, if the statutory adjudication decree was issued before  
           January 1, 1981, and the water right is not based on a permit or  
           license, the water right holder to seek a change to that water  
           right by petitioning the court with jurisdiction over the  
           decreed rights.

          FISCAL EFFECT  :  According to the Assembly Appropriations  
         Committee, there are minor, absorbable costs associated with this  

          COMMENTS  :  The original statute first allowing the holder of  
         rights under a statutorily adjudicated decree to transfer them by  
         voluntarily going to the State Water Board, instead of a court,  
         was enacted on January 1, 1981. What is less clear is why the  
         statute, by its own terms, only applied to decrees that were  
         issued after its enactment.

         A severe drought and significant water shortages between 1976 and  
         1977 highlighted the strengths and weaknesses of the state's water  
         rights laws, then-Governor Jerry Brown created the Governor's  


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         Commission to Review California Water Rights Law (Commission) and  
         mandated it review existing law and propose modifications.  The  
         Final Report issued by that Commission contained detailed legal  
         analyses and recommendations for both administrative actions and  
         statutory changes to the Water Code.

         One major area of the Final Report focused on improving  
         efficiencies in water use, including encouraging voluntary  
         short-term and long-term transfers.  Those sections were enacted,  
         together with several other provisions, in AB 1147 (Filante),  
         Chapter 933, Statutes of 1980.  AB 1147 addressed water rights;  
         clarified the ownership of waste water and waste water facilities;  
         and allowed for the transfer of water rights, including rights  
         held subject to a statutory adjudication decree.  In the March 19,  
         1979, digest to AB 1147, the Legislative Counsel's office stated  
         that  AB 1147 would permit the transfer of any water right,  
         including riparian rights, which has been quantified after the  
         effective date of the bill pursuant to a statutory adjudication.  

         Eight years later, AB 982 (Costa), Chapter 1145, Statutes of 1988,  
         amended, repealed, and reordered several of the Water Code  
         Sections created under AB 1147.  In the reorder, AB 982 moved the  
         provisions related to transferring rights subject to a statutory  
         adjudication decree from Water Code Section 1745 to Water Code  
         Section 1740 but left the statutory language virtually unchanged,  
         including the old effective date. That date was carried forward by  
         deleting "subsequent to the enactment of this legislation" and  
         inserting "after January 1, 1981."  No reason for maintaining that  
         effective date was provided.

         According to the author, this bill provides an optional, voluntary  
         process for water right holders to gain permission from the State  
         of California to transfer their water rights to other parties but  
         does not mandate that such water rights holders go to the State  
         Water Board for permission.  The author states that by authorizing  
         an additional, voluntary process through an administrative agency,  
         that this bill encourages water transfers because it allows those  
         with old water rights to participate in the transfer market  
         through a simpler process than petitioning a court to reopen an  
         entire adjudication.  The author adds that the effect of the  
         limitation to post-1981 decrees has severely limited the  
         applicability of this water transfer section to all but a few  
         adjudication decrees that were entered before that date.


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          Analysis Prepared by  :    Tina Cannon Leahy / W., P. & W. / (916)  
                                                                 FN: 0000584