BILL ANALYSIS                                                                                                                                                                                                    



                                                                      AB 1390


                                                                      Page  1





          ASSEMBLY THIRD READING


          AB  
          1390 (Alejo and Perea)


          As Amended  April 30, 2015


          Majority vote


           ------------------------------------------------------------------- 
          |Committee       |Votes |Ayes                    |Noes              |
          |                |      |                        |                  |
          |                |      |                        |                  |
          |----------------+------+------------------------+------------------|
          |Water           |14-0  |Levine, Bigelow, Dahle, |                  |
          |                |      |Dodd, Beth Gaines,      |                  |
          |                |      |Cristina Garcia, Gomez, |                  |
          |                |      |Gray, Harper, Lopez,    |                  |
          |                |      |Medina, Rendon,         |                  |
          |                |      |Ridley-Thomas, Williams |                  |
          |                |      |                        |                  |
          |----------------+------+------------------------+------------------|
          |Judiciary       |10-0  |Mark Stone, Wagner,     |                  |
          |                |      |Alejo, Chau, Chiu,      |                  |
          |                |      |Gallagher, Cristina     |                  |
          |                |      |Garcia, Holden,         |                  |
          |                |      |Maienschein, O'Donnell  |                  |
          |                |      |                        |                  |
          |----------------+------+------------------------+------------------|
          |Appropriations  |17-0  |Gomez, Bigelow, Bloom,  |                  |
          |                |      |Bonta, Calderon, Chang, |                  |
          |                |      |Daly, Eggman,           |                  |
          |                |      |Gallagher, Eduardo      |                  |
          |                |      |Garcia, Holden, Jones,  |                  |
          |                |      |Quirk, Rendon, Wagner,  |                  |








                                                                      AB 1390


                                                                      Page  2





          |                |      |Weber, Wood             |                  |
          |                |      |                        |                  |
          |                |      |                        |                  |
           ------------------------------------------------------------------- 


          SUMMARY:  Streamlines legal processes used to assign water rights  
          in a groundwater basin.  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;


             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 the Sustainable Groundwater Management Act (SGMA)  
               as the basis of a stipulated judgment setting forth a  
               physical solution for basin management.









                                                                      AB 1390


                                                                      Page  3






          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.


          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.








                                                                      AB 1390


                                                                      Page  4







          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 used for impeachment or rebuttal.


          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, including 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,  








                                                                      AB 1390


                                                                      Page  5





            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 (i.e. pause it).


          24)Allows a party, or group of parties, that is more than 50% 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.


          EXISTING LAW:  


          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  
            of 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 to 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  








                                                                      AB 1390


                                                                      Page  6





            groundwater from overdraft, subsidence, saline water intrusion,  
            and water quality degradation.


          4)Requires, under SGMA, that local agencies form Groundwater  
            Sustainability Agencies (GSAs) by June 30, 2017, in all high and  
            medium priority basins that have not been adjudicated.  Requires  
            GSAs in all high and medium priority basins, as defined, to  
            develop and adopt GSPs that provide for the sustainable  
            management of the groundwater basin by January 31, 2020, or  
            January 31, 2022, as specified.  Allows the State Water  
            Resources Control Board to impose an interim plan for  
            groundwater management if no GSA is formed by the deadline, no  
            GSP is adopted by the appropriate deadline, or a GSP is adopted  
            which the Department of Water Resources deems insufficient. 


          FISCAL EFFECT:  According to the Assembly Appropriations  
          Committee, this bill imposes no additional state costs.  


          COMMENTS:  This bill streamlines the procedures used in a legal  
          action to obtain a basin-wide adjudication of groundwater rights.   




          Groundwater adjudications are legal processes where multiple  
          parties who withdraw water from the same aquifer can ask the court  
          to better define the rights that various entities have to use  
          groundwater resources.  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  
          groundwater pumping.  Because the amount of water that can be  
          collectively withdrawn from an aquifer without causing harm can  
          vary from year to year, courts retain continuing jurisdiction over  
          the groundwater basin and appoint a watermaster to ensure that  
          pumping conforms to the limits defined by the adjudication.









                                                                      AB 1390


                                                                      Page  7






          Currently, it is very difficult to determine who has groundwater  
          rights that could be affected in an adjudication and the scope of  
          those rights.  There are no state law requirements to report  
          groundwater withdrawals, so identifying existing pumpers and  
          getting accurate data is complicated.  Also, State law gives every  
          overlying property owner a potential right in an unadjudicated  
          groundwater basin, so there may also be many unexercised rights of  
          unidentified people to consider.  Identifying and noticing all of  
          those parties can be lengthy and expensive.  There are also  
          technical disagreements among parties, including as to the  
          historic groundwater use, which could affect the amount of  
          groundwater to which each party is entitled.

          A recent news article on the Antelope Valley groundwater  
          adjudication highlights the challenges.  The case is enormous and  
          has been sitting in a trial court for 15 years.  It involves a  
          multitude of public agencies and landowners large and small who  
          hold groundwater pumping rights including cities, farmers, the  
          federal government, and a class of 85,000 property owners who have  
          never pumped water.  There are 9,404 docket entries in the case so  
          far and more than 100 lawyers involved.  Another example is the  
          Santa Maria groundwater basin in Santa Barbara and San Luis Obispo  
          Counties.  That case involved thousands of parties, cost an  
          estimated tens of millions of dollars, and after 15 years in the  
          trial and appellate courts, it is still not completely resolved.  


          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 tackles the groundwater history  
          issue by requiring that parties disclose specifics regarding their  
          preceding 10 years of groundwater use up front.  This bill also  
          encourages the providing of information in electronic form, sets  
          out standards for the role of technical experts, and encourages  
          settlement.









                                                                      AB 1390


                                                                      Page  8






          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 and 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, 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.


          Opponents criticize this bill for not adequately protecting the  
          interests of disadvantaged communities, failing to provide  
          attorney's fees and costs for those with a significant financial  
          hardship, failing to provide notices in multiple languages, and  
          requiring notices to be sent with property tax statements, which  
          are only sent twice per year and are sometimes sent to escrow  
          companies that send the taxes, and not to the property-owning  
          taxpayer.  


          Other stakeholders do not officially oppose this bill at this time  
          but have raised concerns that the bill will impose new burdens on  
          cities and counties, especially by requiring that the plaintiff  
          name cities and counties as defendants whether the cities and  
          counties have an interest in the adjudication or not.


          There is currently one other bill on groundwater adjudication  
          pending in the Legislature, SB 226 (Pavley) of the current  
          legislative session, which seeks to streamline groundwater  








                                                                      AB 1390


                                                                      Page  9





          adjudication processes and timelines but as a new chapter under  
          SGMA. 




          Analysis Prepared by:                                               
                          Tina Leahy / W., P., & W. / (916) 319-2096  FN:  
          0000391