BILL ANALYSIS                                                                                                                                                                                                    

                                                                    AB 1390

                                                                    Page  1


          1390 (Alejo, et al.)

          As Amended  September 4, 2015

          Majority vote

          |ASSEMBLY:  |76-0  |(May 26, 2015) |SENATE: |40-0  |(September 9,    |
          |           |      |               |        |      |2015)            |
          |           |      |               |        |      |                 |
          |           |      |               |        |      |                 |

          Original Committee Reference:  W., P., & W.

          SUMMARY:  Adds a new Chapter 7 to Title 10 of Part 2 of the Code  
          of Civil Procedure (new CCP provisions) that establish methods  
          and procedures for comprehensive groundwater adjudications.

          The Senate amendments:

          1)Require that comprehensive adjudications are conducted  
            consistently with existing laws, including the following:

             a)   Achievement of groundwater sustainability within the  
               timeframes of the Sustainable Groundwater Management Act  

             b)   Federal laws regarding the determination of federal or  


                                                                    AB 1390

                                                                    Page  2

               tribal water rights, as applicable.

             c)   Existing law determining and establishing the priority  
               of unexercised groundwater rights.

             d)   Other provisions of the Code of Civil Procedure to the  
               extent they do not conflict with the new CCP provisions.

          2)Allow a waiver of court fees and costs for eligible applicants  
            with insufficient economic means, as specified, consistent  
            with existing law.

          3)Exempt specified groundwater rights actions that do not rise  
            to the level of a comprehensive adjudication.

          4)Allow joinder of persons who claim rights to divert and use  
            water from interconnected surface water bodies or subterranean  
            streams flowing through known and definite channels if the  
            court finds such joinder is necessary for the fair and  
            effective determination of the groundwater rights in a basin.

          5)Allow a court to exempt parties extracting or diverting five  
            acre-feet or less of water if those parties do not wish to  
            participate in the adjudication and exempting them would not  
            have a material effect on the groundwater rights of other  

          6)Add specificity to how notification of the comprehensive  
            adjudication shall be conducted and broaden the list of  
            persons who shall receive notice of the comprehensive  
            adjudication to include, for example, SGMA groundwater  
            sustainability agencies (GSAs), persons from an interested  
            parties list established under SGMA, California Native  
            American tribes, and others, as specified. 


                                                                    AB 1390

                                                                    Page  3

          7)Require, within 15 days of the court order approving both the  
            notice for the adjudication and a form answer that can be used  
            in response to the notice, that the plaintiff in the  
            adjudication request names and addresses of persons reporting  
            groundwater extractions to the State Water Resources Control  
            Board (State Water Board) and any GSA in the basin.

          8)Refine the entities allowed to intervene by adding the  
            following that overlie a basin or a portion of the basin:  a  
            GSA, a city, county or both.  In accordance with existing law  
            allows a person to apply to intervene who has an interest in  
            the matter in litigation, or in the success of either of the  
            parties, or an interest against both.

          9)Disqualify the judge of a superior court of a county that  
            overlies the basin or any portion of the basin and allow the  
            Judicial Council to assign a judge to preside in all  
            proceedings for the comprehensive adjudication.  

          10)Consolidate, if appropriate, any action against a GSA in the  
            basin with the comprehensive adjudication if the action  
            concerns the adoption, substance, or implementation of the  
            GSA's groundwater sustainability plan (GSP) or the GSA's  
            compliance with SGMA timelines.

          11)Refine procedures that take in to account actual or proposed  
            groundwater basin boundary changes, either in response to  
            boundary changes by the Department of Water Resources (DWR) or  
            by the court directing a party, as specified, to submit a  
            request for a change to DWR.  Specifies DWR's basin boundary  
            changes are subject to judicial review.

          12)Refine service of process in a comprehensive adjudication.

          13)Refine the initial disclosures that parties to an  


                                                                    AB 1390

                                                                    Page  4

            adjudication must share with one another to establish the  
            scope and basis of their claims to groundwater, including any  
            use of expert witnesses. 

          14)Refine the requirements for proposed stipulated judgments  
            supported by more than 50% of the parties who are groundwater  
            extractors in the basin or use the basin for groundwater  
            storage and to be supported by groundwater extractors  
            responsible for at least 75% of the groundwater extracted in  
            the basin during the preceding five years before the filing of  
            the complaint.

          15)Make other technical and conforming changes.

          16)Is operative only if SB 226 (Pavley) of the current  
            legislative session is also enacted and becomes effective.

          EXISTING LAW:  

          1)Expresses the state's regulatory and supervisory authority  
            over all waters in the state, surface and underground, by  
            declaring that all waters in the state are property of the  
            people of the State, while recognizing that rights may be  
            acquired to the use of water.

          2)Establishes background principles that apply to all water  
            diversion and use, including the Constitutional prohibition  
            against waste, unreasonable use, unreasonable method of  
            diversion or unreasonable method of use.

          3)Allows a party with rights to extract and use water in 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.


                                                                    AB 1390

                                                                    Page  5

          4)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.

          5)Requires DWR 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 groundwater from overdraft,  
            subsidence, saline water intrusion, and water quality  

          6)Allows a local agency to file a request with DWR to revise  
            groundwater basin boundaries.

          7)Requires, by June 30, 2017, that local agencies form one or  
            more GSAs in all high and medium priority basins subject to  
            SGMA for the purpose of developing and adopting GSPs or submit  
            existing groundwater management plans or adjudications that  
            DWR determines are functionally equivalent to SGMA GSPs.

          8)Requires, by January 31, 2020, that GSAs in all critically  
            overdrafted high and medium priority basins develop and adopt  
            GSPs that provide for the sustainable management of the  
            groundwater basin, as defined.

          9)Requires, by January 31, 2022, that GSAs in all other high and  
            medium priority basins subject to SGMA develop and adopt GSPs.

          10)Allows the 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  


                                                                    AB 1390

                                                                    Page  6

            GSP is adopted 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. 

          FISCAL EFFECT:  According to the Senate Appropriations  
          Committee, there will be an unknown reduction in costs to the  
          General Fund for the courts.

          COMMENTS:  This bill creates a new chapter in the Code of Civil  
          Procedure that will streamline comprehensive groundwater  
          adjudications.  This bill has also been carefully crafted to  
          take into consideration how comprehensive adjudications will be  
          conducted in basins subject to SGMA.  For that reason, this bill  
          and SB 226 are contingent on the enactment of each other.  This  
          bill sets out the general provisions for streamlining  
          groundwater adjudications that would be applicable to any basin.  
           SB 226 relies on the new CCP provisions created by this bill  
          but then sets out additional standards and procedures for the  
          court to apply in basins that are subject to SGMA in order to  
          ensure minimal interference with GSP development and maintain  
          consistency with SGMA objectives.

          It is undisputable that groundwater adjudications are lengthy,  
          complicated, and expensive.  An adjudication is when multiple  
          parties who withdraw water from the same aquifer ask a court to  
          hear competing arguments and better define the rights that  
          various entities have to use the groundwater resources.  Through  
          the adjudication the court can assign specific water rights to  
          water users and can compel the cooperation of those who might  
          otherwise refuse to limit their groundwater pumping.  Even after  
          a decree is entered, the court retains continuing jurisdiction  
          and usually appoints a watermaster to ensure that pumping  
          conforms to the limits defined by the adjudication.  

          Because there is no state mandate to report groundwater  
          withdrawals it is difficult to determine who should be legally  
          noticed of the court action.  In addition there are usually  


                                                                    AB 1390

                                                                    Page  7

          technical disagreements among parties, including as to the  
          historic groundwater use which could affect the scope of one's  
          rights.  The Antelope Valley groundwater basin in Los Angeles  
          and Kern Counties is illustrative: The adjudication has been  
          sitting in the trial court for 15 years; parties include cities,  
          farmers, the federal government, and a class of 85,000 property  
          owners who hold groundwater rights but who have never pumped  
          water; there are over 9,000 docket entries so far; and, more  
          than 100 lawyers involved.  Similarly, the Santa Maria  
          groundwater basin in Santa Barbara and San Luis Obispo counties  
          took 15 years, involved thousands of parties, cost tens of  
          millions of dollars, and still might not be completely resolved.

          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, 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.

          Most former opposition to this bill was submitted when this bill  
          and SB 226 were competing measures.  Since that time the authors  
          and many of the supporters and opponents of both bills have been  
          working together to develop one integrated, contingently-enacted  
          proposal that places the procedural streamlining processes in  
          this bill and the SGMA-specific language in SB 226.  Following  
          the latest amendments to this bill many of the prior opponents  
          have moved to support positions. 


                                                                    AB 1390

                                                                    Page  8

          No opposition to this bill was received.  However, following the  
          latest set of amendments, concerns were raised by parties that  
          questioned whether this bill could impermissibly affect  
          unexercised water rights (future claims by people who own land  
          overlying the basin but who do not currently pump groundwater)  
          or inappropriately bring surface water rights into the  
          groundwater arena.  However, such concerns ignore that current  
          law already sets forth the ability of the court to determine  
          water right priorities; and, that  where groundwater and surface  
          water are interconnected, the "common source" doctrine applies,  
          integrating water rights and applying priorities without regard  
          to whether the diversion is from surface or groundwater.  The  
          author states that the reason for including provisions  
          acknowledging existing law is to remove some of the unnecessary  
          uncertainty that has been a major obstacle to a speedy and fair  
          resolution of groundwater claims.  

          In particular, concerns were raised that this bill states a  
          court may consider applying the principles established in the  
          1979 California Supreme Court case In re Waters of Long Valley  
          Creek Stream System (Long Valley).  That is existing law and  
          this bill does not change it.  Long Valley is important to  
          reference however as it established a precedent that all water  
          rights, including unexercised water rights, could be given a  
          priority based on the facts of the situation and that addressing  
          all rights would bring clarity to water rights holders and  
          foster more beneficial and efficient uses of the State's waters  
          as mandated by the California Constitution.  In addition, the  
          court reasoned that addressing all water rights could eliminate  
          the uncertainty that leads to recurrent, costly, and piecemeal  
          litigation.  This bill includes detailed procedures to ensure  
          that a comprehensive adjudication is truly comprehensive, with  
          adequate notice and due process protections for all groundwater  
          extractors and overlying landowners.  With those procedural  
          protections, the application of Long Valley could help provide  
          water rights holders the security that the water rights  
          recognized in the decree will be protected, instead of losing  
          out to claims that were not included or quantified.

          In addition to SB 226, there are two other major bills this  


                                                                    AB 1390

                                                                    Page  9

          session concerning groundwater.  SB 13 (Pavley), Chapter 255,  
          Statutes of 2015, makes several technical cleanup changes to  
          SGMA and its related statutory sections.  AB 617 (Perea) of the  
          current legislative session amends SGMA to allow public private  
          partnerships, provide an appeals process to the State Water  
          Board for public agencies if state entities agencies are not  
          working cooperatively to implement the GSP, and to allow  
          groundwater sustainability planning to be incorporated into an  
          Integrated Regional Water Management Plan.  AB 617 is pending in  
          the Senate.

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