BILL ANALYSIS                                                                                                                                                                                                    



          SENATE COMMITTEE ON NATURAL RESOURCES AND WATER
                             Senator Fran Pavley, Chair
                                2015 - 2016  Regular 

          Bill No:            AB 1390         Hearing Date:    June 23,  
          2015
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          |Author:    |Alejo                  |           |                 |
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          |Version:   |May 18, 2015    Amended                              |
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          |Urgency:   |No                     |Fiscal:    |Yes              |
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          |Consultant:|Dennis O'Connor                                      |
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                        Subject:  Groundwater: adjudication.


          BACKGROUND AND EXISTING LAW
          Last session the Legislature enacted the Sustainable Groundwater  
          Management Act (SGMA).  Among other things, SGMA requires that  
          each high- and medium-priority groundwater basins be managed  
          pursuant to a groundwater sustainability plan, with the goal of  
          achieving sustainability within 20 years.

          Many basins will be able to achieve sustainability through more  
          active and deliberate management.  In some basins, however, to  
          avoid undesirable results, some groundwater uses may need to be  
          reduced or otherwise changed.  SGMA states in several places  
          that it does not determine or change groundwater rights.  To  
          define, reduce, or otherwise change groundwater rights one must  
          use the common law process of adjudication.

          An adjudication of groundwater rights is initiated by a law  
          suit.  The impetus for such a suit is usually some alleged harm  
          purportedly caused by excessive groundwater depletion. These  
          harms could include chronic lowering of groundwater levels;  
          subsidence; misallocation of storage; water quality; seawater  
          intrusion; well interference; shortages; or water rights  
          disputes.  

          In basins where a lawsuit is brought to adjudicate the basin,  
          the groundwater rights of all the overliers and appropriators  
          are determined by the court. The court also decides: 1) who the  







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          extractors are; 2) how much groundwater those well owners can  
          extract; and 3) who the Watermaster will be to ensure that the  
          basin is managed in accordance with the court's decree. The  
          Watermaster must report periodically to the court.

          Given the different kinds of groundwater rights and the  
          relationships between them, coming to a determination is a  
          complex task, often taking well over a decade of judicial  
          activity - the Antelope Valley adjudication has taken 15 years  
          and counting.

          It will be difficult, if not impossible, for some basins to  
          comply with the requirements of SGMA if they have to wait 15+  
          years for a final determination of rights pursuant to existing  
          law.

          On November 20, 2014, this committee held an informational  
          hearing, titled "Resolving Disputes Regarding Groundwater  
          Rights: Why Does It Take So Long and What Might Be Done to  
          Accelerate the Process?"  At that hearing, witnesses identified  
          a number of items that cause unnecessary delay.  These included  
          issues of basin boundaries, notice and service, discovery, and  
          expert testimony.  
          PROPOSED LAW
          This bill would establish a new chapter in the Code of Civil  
          Procedures titled "Actions Relating to Groundwater Rights."  
          Specifically, this bill would: 


          1.Find and declare that it provides a more streamlined and  
            expeditious groundwater adjudication process, while at the  
            same time fully respecting established principles of water  
            rights law and providing participants appropriate due process.  



          2.State that the new chapter does not alter groundwater rights  
            or the law concerning groundwater rights.


          3.Establish the specific procedures for commencing action,  
            including:
                 Establishing whom to name as defendants.
                 Serving named parties within 30 days of the filing of  








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               the complaint.
                 Requiring the plaintiff, or its representative, to  
               personally appear at a meeting of the board of supervisors  
               of each county overlying the basin at least in part, and  
               announce that the plaintiff has filed the adjudication  
               action and where copies of the complaint may be obtained.
                 Requiring a preliminary hearing within 180 days of the  
               filing of the complaint, to conduct a preliminary hearing  
               to determine if the action should proceed to  
               comprehensively determine groundwater rights in the basin
                 Establishing the specific language of the notice of  
               commencement of groundwater basin adjudication.
                 Establishing a process whereby the county assessor would  
               include a court-approved notice and form answer with the  
               next property tax bill sent to each landowner in the basin.
                 Allowing only two disqualifications of judges pursuant  
               to CCP 170.6.


          1.Establish the specific procedures to conduct the adjudication,  
            including:
                 Authorizing the court to convene a case management  
               conference within 60 days after service is completed.
                 Authorizing the court to divide the adjudication action  
               into phases.
                 Establishing the initial basin boundaries for an  
               adjudication action as those identified in the Department  
               of Water Resources' (DWR) Bulletin 118.
                 Requiring parties to shall provide the court or special  
               master initial disclosures of specified information without  
               waiting for a discovery request.
                 Requiring parties to disclose to the other parties the  
               identity of any expert witness it may use at trial to  
               present evidence.
                 Authorizing the court to require the parties to submit  
               written testimony of relevant witnesses in the forms of  
               affidavits or declarations under penalty of perjury in lieu  
               of presenting live testimony.
                 Authorizing the court to appoint a special master, as  
               specified.
                 Authorizing the creation of a technical committee to aid  
               the special master.
                 Establishing as the policy of the state to encourage the  
               compromise and settlement of adjudication actions, and  








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               provide special procedures to aid creation of a compromise  
               and settlement.
                 Requiring the court to impose a physical solution that  
               is part of a stipulated judgment as a component of the  
               final judgment if the physical solution satisfies specific  
               criteria, and if a party submits a proposed stipulated  
               judgment that is supported by:
               (1)                                More than 50 percent of  
                 all named parties in the adjudication action and
               (2)                                Groundwater rights  
                 holders holding title to at least 75 percent of the  
                 groundwater production during the past 10 years in the  
                 basin.


          ARGUMENTS IN SUPPORT
          According to a coalition of agricultural interests "When  
          Governor Brown signed the Sustainable Groundwater Management Act  
          (SGMA) bill package last year, there was interest in improving  
          the groundwater adjudication process.  AB 1390 will add a new  
          chapter to the Code of Civil Procedure making improvements to  
          the judicial proceedings of comprehensive adjudications of  
          groundwater rights in a basin.  Well interference and other  
          claims that do not require the comprehensive adjudication of an  
          entire groundwater basin will follow existing procedures.

          "The goal of AB 1390 is to address the time sinks that occur in  
          current groundwater adjudications by clarifying the processes  
          that must be followed.  Streamlining the process will ease the  
          burden on the courts, provide the parties with the most  
          efficient resolution possible, protect individual rights, all  
          the while appropriately coordinating adjudication actions with  
          SGMA.

          "The bill would also facilitate and encourage the early  
          settlement of groundwater adjudications by providing tools and  
          opportunities for courts, claimants, and local groundwater  
          management entities to develop solutions in a timelier manner."

          ARGUMENTS IN OPPOSITION
          The Rural County Representatives of California (RCRC) and the  
          California Association of Counties (CSAC) raise a number of  
          objections.  These include requiring the plaintiff to appear  
          before the board of supervisors to announce the initiation of  








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          the adjudication action.  They argue that members of the general  
          public may not directly place items on the meeting agenda of the  
          Board of Supervisors.  So, the required notice would likely not  
          be posted on the meeting agenda and the announcement would have  
          to be made during the general comment period, meaning  
          potentially-impacted parties would be unaware that the notice  
          would be provided at the meeting.  Additionally, the Supervisors  
          would be unable to respond to the plaintiff's notice or ask  
          questions."  RCRC and CSAC also object to having the county  
          assessors include a court-approved notice and form answer with  
          the property tax bill, and raise a number of concerns with due  
          process.

          The Sierra Club opposes AB 1391 in part because it believes that  
          the bill may undermine the efforts of SGMA.  Additionally, the  
          Sierra Club argues that provisions that permit a stipulated  
          judgment and settlement based on an agreement of only 50% of  
          parties with 75% of water production for the past 10 years will  
          adversely affect smaller landowners and leave them without a  
          voice in a settlement.   

          The California League of Conservation Voters, Clean Water  
          Action, and Community Water Center criticize the 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 sometimes sent to escrow  
          companies that pay the taxes, and not to the property-owning  
          taxpayer.  

          COMMENTS
           Everyone Agrees The Current Process Needs Improvement.   At this  
          committee's hearing last November, no one argued that the  
          current adjudication process couldn't be improved.  Indeed, all  
          agreed that adjudications took much too long and all were able  
          to identify a number of areas of the process that could be  
          streamlined. 
           
          Appellate Court Justice Ronald Robie described the real problem  
          best at the November 2014 hearing when, commenting on the decade  
          plus time to complete an adjudication, he observed "That's good  
          for the lawyers, but you know that when you do have that many  
          lawyers working, you're also costing a lot of money to the  








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          people who have the rights, so groundwater adjudications at the  
          common law can be expensive to the parties."

           There Is A Question Of Where To Put The Improvements.   This bill  
          proposes to put the changes to the groundwater adjudication  
          process in the Code of Civil Procedure.  Another bill, SB 226  
          (Pavley) proposes to place expedited adjudication language in  
          SGMA to ensure that any future adjudication is done so "in  
          furtherance of the objectives" of SGMA.  This is an issue that  
          perhaps is better addressed by the Judiciary Committee.

           There Is A Question Of How The System Should Be Improved.   There  
          seems to be broad agreement on what things slow down the  
          adjudication process.  These include things like determining  
          basin boundaries, notice and service of affected parties,  
          discovery, relitigation of previous determinations of fact or  
          law, identification of and testimony of expert witnesses, and  
          challenging judges for alleged bias.  There is less agreement on  
          which aspects of the adjudication can be addressed and how they  
          can be addressed without compromising due process  
          considerations.  This too is an issue that perhaps is better  
          addressed by the Judiciary Committee.

           Level of Detail.   This bill at times goes into tremendous detail  
          on some parts of the adjudicative process.  For example, the two  
          subdivisions of 833 that detail the specific language of the  
          notice of commencement of groundwater basin adjudication  
          (subdivisions a and b) span nearly two pages.  It is not clear  
          whether this level of detail is helpful or unhelpful.  This too  
          is yet another issue that perhaps is better addressed by the  
          Judiciary Committee.

           Protection Of Environment.   At the November 2014 hearing, in  
          response to a question regarding whether it would be helpful to  
          clarify in the law how to address, for example, areas where  
          there is a very clear surface-groundwater interaction, Justice  
          Robie observed that groundwater adjudications are "a common law  
          proceeding and common law doesn't provide for protection of  
          ecosystems. In other words, when you have a groundwater  
          adjudication, protection of ecosystems or environmental factors  
          of that type are not currently covered in what you normally  
          raise in an adjudication ? subsidence and things like that, they  
          haven't dealt with ?but you get to that frequently in practical  
          matter through CEQA where mitigation is required, but an  








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          adjudication of course is not subject to CEQA, so I think you  
          pointed to something that could be added to it. In an  
          adjudication, you only have the right holders present. There's  
          no place for intervention by public interest groups or anybody  
          else that I'm aware of."  

          This bill does not address how to ensure an adjudication  
          appropriately considers environmental factors.

           Related Bills.   A number of bills were introduced this year to  
          address one or more aspects of groundwater management in general  
          and accelerated adjudication of groundwater rights in  
          particular.  Bills still under active consideration this year  
          are:

           AB 453 (Bigelow)Authorizes existing groundwater management  
                        plans (aka AB 3030 plans) to be renewed and  
                        amended for high and medium priority basins, until  
                        a GSP is adopted.  Also grants agencies operating  
                        under an AB 3030 plan the same powers and  
                        authorities of a groundwater management agencies  
                        the authorities of a groundwater sustainably  
                        agency.
           AB 617 (Perea)Makes numerous changes throughout SGMA: Some  
                        changes are minor and technical; others are  
                        substantive policy changes, such as eliminating  
                        the requirement that a groundwater sustainability  
                        agency submit its groundwater sustainability plan  
                        to DWR as a condition of a groundwater  
                        sustainability agency becoming authorized exercise  
                        its powers to implement SGMA.
           AB 938 (Salas)Makes a minor technical change regarding  
                        reprioritization of groundwater basins under SGMA.
           AB 939 (Salas)Makes a minor technical change regarding making  
                        data in support of a proposed available to the  
                        public.
           AB 1242 (Gray)Requires the State Water Resources Control Board,  
                        when setting flow requirements for a Water Quality  
                        Control Plan (WQCP), to take into consideration  
                        any applicable groundwater sustainability plans if  
                        a groundwater basin could be affected and to  
                        identify projects for fish recovery that may be  
                        undertaken in lieu of instream flows.
           SB 13 (Pavley)Makes numerous non-substantive technical changes  








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                        to SGMA.
           SB 226 (Pavley)Streamlines legal processes used to assign water  
                        rights in a groundwater basin.

           Double-Referral.  The Rules Committee referred this bill to both  
          the Committee on Natural Resources and Water and to the  
          Committee on Judiciary. Therefore, if this bill passes this  
          committee, it will be referred to the Committee on Judiciary,  
          which will consider the issues within their jurisdiction.

          SUGGESTED AMENDMENTS 
          
          SUPPORT
          California Farm Bureau Federation (Sponsor)
          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 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 Association

          OPPOSITION
          California Association of Counties (CSAC)
          California League of Conservation Voters
          Clean Water Action
          Community Water Center
          Rural County Representatives of California 
          Sierra Club California

          One individual
                                      -- END --








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