BILL ANALYSIS Ó
AB 1390
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Date of Hearing: April 14, 2015
ASSEMBLY COMMITTEE ON WATER, PARKS, AND WILDLIFE
Marc Levine, Chair
AB 1390
(Alejo) - As Amended March 26, 2015
SUBJECT: Groundwater: adjudication
SUMMARY: Streamlines legal processes used during a legal action
to assign rights in a groundwater basin and, upon a final
judgment, makes the adjudicated basin exempt from all provisions
of the Sustainable Groundwater Management Act (SGMA) except
annual court-mandated reporting. Specifically, this bill:
1)Creates a new chapter in the Code of Civil Procedure related
to groundwater rights.
2)Finds and declares the benefits of a streamlined groundwater
adjudication process.
3)Defines various terms.
4)Establishes special procedures that govern all groundwater
adjudication actions, with exceptions, and allows a court to:
a) Determine all rights in a groundwater basin;
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b) Declare the priority, amount, purpose of use, extraction
location, and place of use of the groundwater, together
with other relief or a "physical solution" to conflicts.
c) Expedite resolution, including encouraging the parties
to use a Groundwater Sustainability Plan (GSP) developed
pursuant to SGMA as the basis of a stipulated judgment
setting forth a physical solution for management of the
basin.
5)Specifies that a claimant shall name as defendants in an
adjudication action: counties, special districts, public water
systems, and small water systems.
6)Specifies duties of a plaintiff (the party bringing the suit)
to serve (meaning provide notice of the action to) all parties
with a potential interest, including appearing at any relevant
boards of supervisors and mailing notices of the action, as
specified, to all landowners in the basin as an enclosure with
their next property tax statement and including with that
notice a "form answer" for parties wishing to participate.
7)Allows any party owning land overlying the basin to become a
party.
8)Allows a court to hold a preliminary hearing to determine if
the case should proceed.
9)Requires the court, upon motion of any party, to transfer the
adjudication to a neutral county if a local agency is a party.
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10)Limits judge disqualifications for the adjudication.
11)Defines groundwater adjudications as complex civil matters.
12)Encourages electronic service of pleadings.
13)Allows the court to convene a case management conference, as
specified, and take actions to organize the case including
dividing it into discrete phases.
14) Specifies that the initial basin boundaries for purposes of
the groundwater adjudication shall be the same as those found
in the Department of Water Resources publication Bulletin 118,
but allows the court to adjust the boundaries.
15)Requires that parties initially and expeditiously disclose
specifics regarding their preceding 10 years of groundwater
use; any other relevant, associated, water use; and, the
contact information of persons who could verify. Encourages
information in electronic form.
16)Allows the court to require any supplemental disclosures.
17)Specifies requirements for expert witness identification,
qualifications, subject matter, and reporting, including
disclosing amount of compensation.
18)Allows a court to impose lesser requirements on expert
witnesses uses for impeachment or rebuttal.
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19)Allows a court to require witnesses submit written testimony
and species certain content and timing for written testimony.
20)Allows the court to establish a list of special masters;
appoint a special master in the adjudication in order to
facilitate and mediate include creating a technical committee
of the parties, the parties' representatives, or both; and,
sets out special masters' duties.
21)Sets out duties for a technical committee to an adjudication,
if created.
22)Applies Evidence Code rules, as specified, to all mediations,
settlement conferences, and other out-of-court negotiations.
23)Makes it the policy of the state, and sets forth procedures,
to encourage settlement and compromise including granting the
court broad powers to stay an action (pause it).
24)Allows a party, or group of parties, that is more than 50
percent of all named parties in the adjudication and who hold
at least 75% of the groundwater rights to enter into a
proposed stipulated judgment and binds the court to impose any
physical solution from that settlement.
25)Exempts the basin subject to an adjudication order or final
judgment from all requirements of SGMA except minimal
reporting, to the extent feasible.
EXISTING LAW:
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1)Allows a party with rights to a groundwater basin to initiate
a lawsuit so the court can decide the groundwater rights of
all parties overlying the basin and others who may export
water out the basin.
2)Empowers the court to decide who the extractors are, how much
groundwater those well owners can extract, and who will ensure
that the basin is managed according to the court's decree
(generally called a "watermaster"), including periodically
reporting to the court.
3)Requires the Department of Water Resources (DWR) prioritize
California's groundwater basins in order to focus state
resources. The basins are prioritized as either high, medium,
low, or very low based on a combination of factors including,
but not limited to, overlying population, level of dependence
for urban and agricultural water supplies, and impacts on the
groundwater from overdraft, subsidence, saline water
intrusion, and water quality degradation.
4)Requires, by June 30 2017, the formation of one or more
Groundwater Sustainability Agencies (GSAs) in all high and
medium priority basins subject to the Sustainable Groundwater
Management Act (SGMA).
5)Requires, by January 31, 2020, that GSAs in all high and
medium priority basins subject to a chronic condition of
overdraft develop and adopt Groundwater Sustainability Plans
(GSPs) that provide for the sustainable management of the
groundwater basin, as defined.
6)Requires, by January 31, 2022, that GSAs in all other high and
medium priority basins subject to SGMA develop and adopt GSPs.
7)Allows the State Water Resources Control Board (State Water
Board) to impose an interim plan for management of a
groundwater basin if no GSA is formed by the deadline, no GSP
is adopted by the appropriate deadline, or a GSP is adopted
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which DWR deems insufficient and where the basin is in a
chronic condition of overdraft or in a condition where
groundwater pumping is causing a significant depletion of
interconnected surface waters.
COMMENTS: This bill addresses the legitimate need to provide a
more streamlined groundwater adjudication process but might
create a separate legal path for groundwater management that
conflicts with and undermines SGMA if the two are not
reconciled. This bill is dual referred to the Assembly
Committee on Judiciary. For that reason, this analysis only
covers this bill's general and SGMA-related ramifications for
groundwater management in California.
The adoption of SGMA last year was a historic effort that only
took effect on January 1, 2015 - a little over four months ago.
It has tight timelines for the formation of GSAs and the
formation of GSPs and it will take many years and substantial
local investments for GSPs to be developed and implemented. The
primary difference between SGMA and previous groundwater
statutes in California is that SGMA has a sustainability
requirement, a 50 year planning horizon, and mandates that
sustainability be reached (with certain exceptions) in 20 years.
It also empowers locals to charge fees for groundwater
management, require groundwater reporting, and enforce their
local requirements. If locals are unable or unwilling to come
together as a GSA or develop a plan that meets the acts
requirements, the State Water Board can declare a basin
probationary and impose an interim plan until the locals can
act.
1. The need to streamline groundwater adjudications is
well-documented
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As the Water Education Foundation, a nonprofit nonpartisan
educational entity states succinctly in its definition of
adjudication: "When multiple parties withdraw water from the
same aquifer, groundwater pumpers can ask the court to
adjudicate, or hear arguments for and against, to better define
the rights that various entities have to use groundwater
resources. This is known as groundwater adjudication. Through
adjudication, the courts can assign specific water rights to
water users and can compel the cooperation of those who might
otherwise refuse to limit their pumping of groundwater.
Watermasters are typically appointed by the court to ensure that
pumping conforms to the limits defined by the adjudication."
Determining who has groundwater rights that could be affected by
an adjudication and the scope of those rights is difficult as
there are no state law requirements to report groundwater
withdrawals. State law gives every overlying property owner a
potential right in an unadjudicated groundwater basin. So
noticing all of those parties that there will be an adjudication
action can be lengthy and expensive. There are also technical
disagreements among parties, including as to the historic
groundwater use which could affect the scope of one's rights.
On November 20, 2014 the Senate Natural Resources and Water
Committee held an information hearing entitled Resolving
Disputes Regarding Groundwater Rights: Why Does It Take So Long
and What Might Be Done To Accelerate The Process? In that
hearing expert observations from Third District Court of Appeals
Judge Ronald B. Robie and others were presented that raised many
of the issues discussed above. In addition, the Antelope Valley
groundwater adjudication provided an example. As Fiona Smith
reports in the Daily Journal article State Looking to Speed
Groundwater Lawsuits (October 29, 2014), the Antelope Valley
groundwater basin adjudication "has been sitting in a trial
court for 15 years. The case is enormous, involving a multitude
of public agencies and landowners large and small who hold
groundwater pumping rights. Parties include cities, farmers,
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the federal government, and a class of 85,000 property owners
who hold groundwater rights but who have never pumped water.
There are 9,404 docket entries in the case so far and more than
100 lawyers listed on the case." She also references the Santa
Maria groundwater basin, in Santa Barbara and San Luis Obispo
counties, as an adjudication that "took 15 years to work through
the trial and appellate courts, and it is still not completely
resolved. That case involved thousands of parties and has cost
tens of millions of dollars, said Henry S. Weinstock, a partner
at Nossaman LLP who worked on the case."
This bill tries to address some of the delays in groundwater
adjudications by creating some standardized forms, processes,
and requirements. Importantly, it wrestles with the notice
issue utilizing multiple approaches including that notice can be
made on property tax bills. This bill wrestles with the
groundwater history issue by requiring that parties disclose
specifics regarding their preceding 10 years of groundwater use
up front. This bill also encourages information being provided
in electronic form, sets out standards for the role of technical
experts, and encourages settlement.
2. Future groundwater adjudications should be harmonized with
SGMA
After entry of final judgment in a groundwater adjudication,
this bill makes the adjudicated basin exempt from SGMA except
for requiring certain reporting information, to the extent
available. That is the requirement for adjudications which
existed prior to the enactment of SGMA but it is not analogous.
Prior adjudications were listed and excluded from SGMA to make
it clear that the statute was not retroactive. It would be
unfair to re-open prior adjudications, which as discussed above
are lengthy and complex, and subject them to a standard that was
not in effect at the time the adjudication decision was
rendered.
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The same is not true of adjudications on a going-forward basis.
There is now a new sustainability standard for basin management.
SGMA defines sustainable groundwater management as the
management and use of groundwater in a manner that can be
maintained during the planning and implementation horizon
without causing undesirable results. It then goes on to define
undesireable results as the following effects caused by
groundwater conditions occurring throughout the basin:
(1) Chronic lowering of groundwater levels indicating a
significant and unreasonable depletion of supply if continued
over the planning and implementation horizon?.
(2) Significant and unreasonable reduction of groundwater
storage.
(3) Significant and unreasonable seawater intrusion.
(4) Significant and unreasonable degraded water quality,
including the migration of contaminant plumes that impair
water supplies.
(5) Significant and unreasonable land subsidence that
substantially interferes with surface land uses.
(6) Surface water depletions that have significant and
unreasonable adverse impacts on beneficial uses of the surface
water.
Pre-SGMA groundwater adjudications did not include the new
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standard because it didn't exist. That means that the body of
case law surrounding adjudications, and which some attorneys
will attempt to rely on, does not address or meet sustainability
goals. This bill references SGMA and allows a court to consider
the Act, but it does not mandate that an adjudication action be
consistent. It says that a GSP may serve as the basis of a
stipulated judgment, but it doesn't require it. As stated
above, it then makes the adjudicated basin exempt from the Act.
This has the potential to de-stabilize local agencies efforts to
comply with SGMA. At every turn where locals attempt to develop
a plan provision that is disliked but necessary - such as
charging fees or limiting withdrawals in any way - a
dissatisfied minority could pull the rug out from under the plan
development by filing an adjudication action and thus enveloping
the future of the plan in a cloud of uncertainty as the
subsequent action could supersede all SGMA requirements. This
is compounded by the fact that locals will still have to develop
and implement SGMA plans, even if an adjudication is pending.
The Act was purposely drafted that way so that entities could
not throw themselves into decades-long adjudications as a way of
circumventing sustainable basin management.
Supporting arguments: The author states that when Governor
Brown signed SGMA last year he acknowledged the need to develop
a streamlined groundwater adjudication process. The author adds
that this bill is "meant to address the time sinks that occur in
current groundwater adjudications by clarifying the processes
that must be followed. The author states that streamlining
adjudications "will ease the burden on the courts, provide the
parties with the most efficient resolution possible, protect
individual rights, all while appropriately integrating
adjudication actions with SGMA." Other supporters state that
this bill will address particular challenges that exist in
groundwater adjudications including determination of venue,
identification of basin boundaries, disqualification of judges,
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notice and service of parties, discovery and the ability of the
parties to reach settlement." Supporters add this bill will do
that "without impacting due process or changing California water
law."
Opposing arguments: Opponents advise the worked diligently to
ensure that the historic groundwater legislation that passed in
2014 protects communities whose water supplies are or will be
threatened by the unsustainable management of California's
groundwater resources. Opponents state that while they
"appreciate the need to streamline the adjudication process and
support the goals of the bill, it is imperative that the rights
of underrepresented and disadvantaged communities are adequately
represented in the process." Opponents state that the
legislation does not adequately address those needs unless
amended to provide for attorney's fees and costs, ensure that
appropriate notices are translated and that the adjudication
will not delay implementation of SGMA's goals.
Committee staff suggests this bill be amended to conform with
SGMA
SGMA currently requires that a future adjudication be submitted
to DWR for an evaluation as to whether it could serve as a
functional equivalent to a GSP. It is only a potential conflict
of laws if the way that a future adjudications and SGMA
harmonize is not spelled out. If the adjudication is designed
to be functionally equivalent to a GSP, there will be no
conflict. Committee staff suggests, on a going-forward basis,
that the author revise the bill to make clear that future
adjudications will meet SGMA sustainability requirements and
that future adjudications will not be automatically
grandfathered in under the statute.
Related legislation
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SB 226 (Pavley) also seeks to streamline groundwater
adjudication processes and timelines but as a new chapter under
SGMA.
Other SGMA-related legislation
In addition to SB 226, mentioned above, there are 13 other bills
in the Legislature proposing changes to SGMA and its related
statutes. The other bills are: AB 452 (Bigelow) prohibiting the
State Water Board from using Water Rights Fund monies for SGMA
enforcement, except funds collected from SGMA enforcement; AB
453 (Bigelow) allowing groundwater management plans adopted
prior to SGMA to be amended and extended; AB 454 (Bigelow)
adding one year to the deadline to form a GSA or adopt a GSP; AB
455 (Bigelow) requiring the Judicial Council to come up with a
270-day process for completing all California Environmental
Quality Act (CEQA) legal challenges to SGMA projects; AB 617
(Perea) adding mutual water companies to GSAs; AB 938 (Salas)
making minor technical changes to SGMA; AB 939 (Salas) changing
the time period for providing technical data upon which a fee is
based from 10 days to 20 days before the meeting to adopt the
fee; AB 1242 (Gray) prohibiting the State Water Board from
setting in-stream flows standards unless the Board mitigates for
the potential local response of increased groundwater use; AB
1243 (Gray) rebating 50% of all SGMA enforcement penalties back
to local governments and water districts for groundwater
recharge projects; AB 1531 (Environmental Safety and Toxic
Materials Committee) making minor technical changes to SGMA; SB
13 (Pavley) making noncontroversial technical cleanup changes to
SGMA; and SB 487 (Nielsen) exempting SGMA projects from CEQA.
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REGISTERED SUPPORT / OPPOSITION:
Support
Agricultural Council of California
Almond Hullers and Processors Association
Association of California Egg Farmers
California Association of Wheat Growers
California Bean Shippers Association
California Cattlemen's Association
California Chamber of Commerce
California Citrus Mutual
California Cotton Ginners Association
California Cotton Growers Association
California Dairies Inc.
California Farm Bureau Federation
California Fresh Fruit Association
California Grain and Feed Association
California Pear Growers Association
California Seed Association
California Tomato Growers Association
Pacific Egg and Poultry Association
Western Agricultural Processors Association
Western Growers
AssociationOpposition
Clean Water Action (unless amended)
Community Water Center (unless amended)
Sierra Club California (unless amended)
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Analysis Prepared by:Tina Cannon Leahy / W., P., & W. / (916)
319-2096