BILL ANALYSIS Ó SENATE COMMITTEE ON NATURAL RESOURCES AND WATER Senator Fran Pavley, Chair 2015 - 2016 Regular Bill No: AB 1390 Hearing Date: June 23, 2015 ----------------------------------------------------------------- |Author: |Alejo | | | ----------------------------------------------------------------- ----------------------------------------------------------------- |Version: |May 18, 2015 Amended | ----------------------------------------------------------------- ----------------------------------------------------------------- |Urgency: |No |Fiscal: |Yes | ----------------------------------------------------------------- ----------------------------------------------------------------- |Consultant:|Dennis O'Connor | | | | ----------------------------------------------------------------- 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 AB 1390 (Alejo) Page 2 of ? 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 AB 1390 (Alejo) Page 3 of ? 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 AB 1390 (Alejo) Page 4 of ? 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 AB 1390 (Alejo) Page 5 of ? 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 AB 1390 (Alejo) Page 6 of ? 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 AB 1390 (Alejo) Page 7 of ? 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 AB 1390 (Alejo) Page 8 of ? 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 -- AB 1390 (Alejo) Page 9 of ?