BILL ANALYSIS Ó AB 1704 Page 1 Date of Hearing: March 29, 2016 ASSEMBLY COMMITTEE ON WATER, PARKS, AND WILDLIFE Marc Levine, Chair AB 1704 (Dodd) - As Amended March 16, 2016 SUBJECT: Water rights SUMMARY: Requires the State Water Resources Control Board (SWRCB) to adopt general conditions for small irrigation use according to certain timelines, and would specify some of the conditions. Specifically, this bill: 1)Modifies the information to be included in a registration of water use for appropriation of water to include a certification that the registrant has provided a copy of the registration form to the Department of Fish and Wildlife (DFW) and agrees to comply with the general conditions applicable. Requires that the registration form include instructions for complying with those conditions. 2)Requires the SWRCB to consult with the DFW in establishing general conditions for water appropriations for small irrigation uses. 3)Requires the general conditions to include conditions required by the DFW to comply with laws regarding streambed alteration agreements. AB 1704 Page 2 4)Allows the general conditions to include requirements applicable only to specific methods of diversion or categories of registration, commensurate with the project's environmental impact. Specifies that such requirements may include, but are not limited to, an assessment to avoid potential site-specific impacts on fish and wildlife resources, and submission of site-specific information. 5)States that it is the intent of the Legislature that the SWRCB and DFW adopt general conditions that simplify the issuance of registrations in a cost-effective and environmentally protective manner, and that the regulatory burden of complying with the general conditions will be commensurate with the complexity and number of resources potentially affected by the registration. 6)Repeals provisions of existing law providing that the SWRCB does not need to adopt general conditions for small irrigation use until the SWRCB determines that funds are available for that purpose, prohibiting registrations for small irrigation use from being authorized until the SWRCB adopts general conditions to protect instream beneficial uses, and allowing the SWRCB to adopt general conditions for some methods or uses before others. 7)Requires the SWRCB no later than June 30, 2017, to adopt general conditions that would permit a registrant to construct facilities to store water for small irrigation use during times of high stream flow in exchange for the registrant reducing existing diversions during periods of low stream flow, for all of the following: a) Diversions from coastal streams entering the Pacific AB 1704 Page 3 Ocean and streams entering the San Francisco Bay to off-stream storage reservoirs or on-stream storage reservoirs located on stream reaches where fish are not present. No diversion under this paragraph may result in cumulative stream flow depletion at the one-square mile drainage that exceeds 10 percent of the average annual volume of stream flow. Diversions under this paragraph from watersheds that support salmonid fisheries and from drainage areas of one square mile or less shall be subject to the following general conditions: i. Diversions from drainage areas greater than one-half square mile but no more than one square mile shall occur only from November 1 to March 31 of each year and only when stream flow exceeds the February median flow at the point of diversion; ii. Diversions from drainage areas greater than one-quarter square mile but no more than one-half square mile, shall occur only when stream flow exceeds the February median flow at the point of diversion; iii. Diversions from drainage areas one-quarter square mile or less may occur without season of diversion or minimum bypass requirements. b) Diversions from other streams for which, in the judgment of the SWRCB, the reduction in existing diversions during low flow periods will result in a benefit to fish and wildlife. AB 1704 Page 4 8)Requires that facilities to store water for small irrigation uses shall be subject to all of the following general conditions: a) No water shall be diverted or used under the registration and no construction shall commence until the applicant has obtained and is in compliance with all necessary permits and approvals required by other agencies; b) All appropriations, including the method of diversion, purpose of use, and quantity of water diverted, are subject to the continuing authority of the SWRCB to protect the public trust and prevent waste and unreasonable use. c) Diversion of water under appropriation is subject to prior rights, and applicants may be required to compensate downstream holders of prior rights for any injury caused by releases. d) The appropriations are subject to available flows. e) The appropriations do not authorize take of species protected under state or federal endangered species acts. f) The appropriations are subject to applicable SWRCB water measurement and reporting regulations. 9)Requires the SWRCB to adopt general conditions for registration of small irrigation use for purposes other than those described in 7) above by no later than June 30, 2018. AB 1704 Page 5 10)Requires that a registration fee of $500, and a renewal registration fee of $250, be paid to the DFW for small irrigation use registrations. 11)Authorizes the SWRCB to issue and renew registrations for stream segments for which the DFW establishes proposed streamflow requirements under Section 10002 of the Public Resources Code (which requires DFW to identify and list those streams and watercourses throughout the state for which minimum flow levels need to be established in order to assure the continued viability of stream-related fish and wildlife resources) if the registration includes conditions consistent with the proposed streamflow requirements, and strikes a provision of existing law that prohibits new registrations for small irrigation uses from being approved for streams for which DFW establishes proposed instream flow requirements. EXISTING LAW: 1)Requires the SWRCB to establish reasonable general conditions to which all registrations of appropriations for Small Domestic, Small Irrigation, and Livestock Stock pond Uses shall be subject. Requires that the conditions include that the appropriation is subject to prior rights, that all conditions lawfully required by the DFW are conditions of the appropriation, that diversions be constructed and water applied to beneficial use with due diligence, and that the registration be renewed and water use reported pursuant to law and rules of the SWRCB. 2)Provides that the SWRCB is not required to adopt general conditions for small irrigation use until the SWRCB determines AB 1704 Page 6 that funds are available for that purpose. 3)Prohibits a registration for small irrigation use from being authorized until the SWRCB establishes general conditions for small irrigation use. Authorizes the SWRCB to establish general conditions for some methods of diversion or categories of small irrigation use before others. FISCAL EFFECT: Unknown COMMENTS: This bill requires the SWRCB, by a specified date and in consultation with the DFW, to adopt general conditions for registrations to divert and store water for small irrigation uses, and specifies in statute what some of the conditions shall be. 1)Author's Statement: This bill modifies current law pertaining to conditions for registrations of small irrigation ponds by enabling the SWRCB to jointly develop general conditions with the DFW, and requiring the registrant to demonstrate compliance with these general conditions. This bill also facilitates small irrigation use registrations statewide during periods of high stream flow that result in the reduction of existing diversions during periods of low stream flow. This bill is a measure that will assist growers and benefit habitat for fish species in our streams and rivers. 2)Background: The small irrigation registration process was created by AB 964 (Huffman), Chapter 579, Statutes of 2011, in response to resource conflicts that were occurring when sprinklers used to protect vineyards against frost were creating simultaneous water demands that, when combined with other water uses, were causing drops in river flows that could be harmful to salmon and other fish. The small irrigation use AB 1704 Page 7 registration process was created in order to create an expedited water right for a pond that stores less than 20 acre-feet annually so that a vineyard could draw from its pond for frost protection instead of directly from the stream. However, the bill was not limited to frost protection uses. The SWRCB at that time identified that one quarter of its currently-pending water rights applications were for uses of 20 acre-feet per year or less. Therefore, creation of a small irrigation registration process was expected to streamline permitting for some of those small irrigation uses and help the SWRCB eliminate some of its water right permitting backlog. In addition to DFW's ability under existing law to impose project-specific terms and conditions on water registrations, AB 964 required the SWRCB to develop general conditions that protect in-stream beneficial uses before the small irrigation registration process may be used. AB 964 allowed the SWRCB to develop general conditions for some areas or uses before others but mandated that the SWRCB develop general conditions for frost protection uses in the northern California coastal stream area by June 30, 2012, unless the SWRCB determined it had insufficient funds for that purpose. On July 25, 2012, the SWRCB approved an initial set of general conditions for Small Irrigation Use registrations. The conditions were developed by the SWRCB's Division of Water Rights staff in consultation with a stakeholder group that included representatives from DFW, Trout Unlimited, the Wine Institute, the California Association of Wine Grape Growers and others. The author and sponsors of this bill indicate that although the SWRCB did adopt general conditions for small irrigation use registrations for purposes of frost protection in the north coast region, registrants still needed to comply with AB 1704 Page 8 additional conditions and processes imposed by the DFW. The information that was required by DFW to be included for a successful application was not always clear to the applicant, and registrations still were being reviewed and acted upon by the DFW on a case by case basis. As a result, according to the sponsors, many of the proposed registrations were not acted upon in a timely manner due in part to limited staff resources at DFW, and to a lack of information as to what should be included in the application. In addition, the author and sponsors of this bill object to a provision in the existing law that prohibits new small irrigation use registrations from being issued for diversions from streams for which DFW recommends instream flow requirements. Instead, this bill would allow the registrations to be issued for such streams if the registration includes conditions that are consistent with the proposed streamflow requirements. The author and sponsors indicate that this bill is a work in progress, and that the author is committed to continuing to work with the SWRCB and the DFW to address concerns with this bill. Among other things, the SWRCB is concerned that the timeframe of June 30, 2017 is an insufficient length of time to complete the process of establishing general conditions. Concerns have also been raised regarding the deletion of existing provisions of the law that protect public trust resources by requiring that general conditions be established before registrations for small irrigation use are approved, and that allow the SWRCB to establish general conditions for some methods of diversion or categories of use before others. In addition, concerns have also been raised regarding the need to preserve the authority of DFW to impose additional site-specific conditions where necessary to protect fish and wildlife. Committee amendments are proposed (described below) to address these issues. 3)Prior or Related Legislation: AB 964 (Huffman), Chapter 579, Statutes of 2011, authorized any person to obtain a right to appropriate water for a small irrigation use, as defined by AB 1704 Page 9 the bill, upon registering the use with the SWRCB and applying the water to reasonable and beneficial use with due diligence. AB 964 provided that the SWRCB is not required to adopt general conditions applicable to appropriations for small irrigation use until the board determines that funds are available for that purpose. AB 964 also required the SWRCB, prior to adopting other general conditions for small irrigation use, and no later than June 30, 2012, to adopt general conditions for small irrigation use for facilities used for frost protection with respect to specified north coast streams. AB 1244 (Gray) of this Session would require the SWRCB, when adopting general conditions, to consult with the Department of Food and Agriculture and the University of California Cooperative Extension, regarding relevant agricultural information, and with DFW regarding potential impacts on fish and wildlife species, for small irrigation use. AB 1244 is pending in the Senate Natural Resources & Water Committee. SB 798 (Committee on Natural Resources & Water), Chapter 683, Statutes of 2015, deleted an obsolete provision of the law added by AB 964, which required the SWRCB, prior to adopting general conditions for other small irrigation uses and no later than June 30, 2012, to adopt general conditions for small irrigation use for facilities used for frost protection with respect to specified north coast streams. The SWRCB adopted those conditions. 4)Support Arguments: Supporters emphasize that rural water users have opportunities to change water use practice in ways that can benefit threatened and endangered fish species in critically dry years. However, in some cases, landowners who are willing to make such changes are unable to do so due to delays in the approval process for small irrigation uses. This bill would establish general conditions for such uses that should accelerate permit processing, especially during times of drought. According to supporters, many wine grape AB 1704 Page 10 growers would like to reduce diversions during the warm weather irrigation season by obtaining rights to store water during peak flow winter months in small on-farm storage ponds, but obtaining permits for such small irrigation storage ponds has been difficult. Supporters also express support for the provisions in this bill that would require the DFW to propose general conditions, and to make such permits available statewide. 5)Opposition Arguments: The Sierra Club opposes this bill unless amended to clarify DFW's authority to address site-specific conditions, and other clarifications. Concerns have been raised regarding the deletion in this bill of provisions in the existing law which do three things: 1) provide that a registration for small irrigation use is not authorized until the SWRCB establishes general conditions for that use; 2) authorize the SWRCB to establish general conditions for some methods and uses before others; and 3) provide that the SWRCB is not required to adopt general conditions if it does not have funds available to do so. The SWRCB has also indicated that the deadline of June 30, 2017 for completion of general conditions is impractical and that additional time will be needed. The author and sponsors have expressed an openness to consider a reasonable extension of time, in addition to other amendments. 6)Suggested Committee Amendments: This bill seeks to facilitate, expedite and expand approval of registrations for water diversions for small irrigation storage ponds by establishing a date certain by which the SWRCB must adopt general conditions for certain diversions, and by requiring the SWRCB and the DFW to work together in establishing the conditions. This bill also codifies a considerable level of detail as to what must be included in the conditions. Because conditions and trends can change over time, particularly with climate change impacts and cyclical droughts, an argument can be made that this level of detail would be better left to the AB 1704 Page 11 SWRCB and DFW to determine based on conditions, rather than being codified in statute. In order to facilitate future modifications where necessary, committee staff recommends that an amendment be taken to allow the SWRCB to modify these details in the future through regulation. Secondly, this bill deletes the existing requirement in law that a registrant must comply with other lawful conditions required by the DFW. The deletion of this language could be interpreted as precluding the DFW from requiring additional site-specific conditions where necessary to protect fish and wildlife. The sponsors have indicated it is not their intent to diminish the authority of DFW but rather to clarify what should be included in the registration regarding site specific details in order to expedite the process. Committee staff therefore recommends that amendments be added to clarify DFW's continuing authority to impose site specific conditions in addition to general conditions where necessary to protect fish and wildlife. Third, this bill deletes existing language clarifying that registrations for small irrigation use are not authorized until the SWRCB establishes general conditions, and clarifying that the SWRCB may establish general conditions for some methods of diversion or categories of small irrigation use before others. Committee staff recommends that amendments be adopted to reinstate these provisions. The suggested committee amendments to address these issues are as follows: Amend Section 1228.6(a)(1)(B) to read: (B) General conditionsshall beapplicable to the diversion of water as required by the Department of Fish and Wildlife to AB 1704 Page 12 comply with the requirements in Chapter 6 (commencing with Section 1600) of Division 2 of the Fish and Game Code. The general conditions may include requirements applicable only to specific methods of diversion or categories of registration, commensurate with the project's environmental impact. These requirements may include, but shall not be limited to,both ofthe following: (i) An assessment to avoid potential site-specific impacts on fish and wildlife resources. (ii) Submission of site-specific information. (iii) Consultation with the Department of Fish and Wildlife regarding the findings of the site-specific assessments and information. (iv) Implementation of additional measures the Department of Fish and Wildlife lawfully deems necessary to avoid site-specific impacts on fish and wildlife resources identified in paragraphs (i), (ii) or (iii). Add a new subdivision (d) to Section 1229 to read: (d) The board may periodically adopt regulations to update the general conditions specified in this section, beginning on January 1, 2020. Add a new subdivision (e) to Section 1229 as follows: (e) (i) A registration for small irrigation use pursuant to this article is not authorized until the board establishes general conditions for small irrigation use pursuant to subdivision (a) of Section 1228.6 or this section. (ii) The board may establish general conditions for some AB 1704 Page 13 methods of diversion or categories of small irrigation use before establishing general conditions for other methods or categories, in which case a registration for small irrigation use is authorized only for those methods or categories for which the board has established general conditions for the protection of instream beneficial uses. REGISTERED SUPPORT / OPPOSITION: Support Association of California Water Agencies California Association of Winegrape Growers (Co-sponsor) Sonoma County Water Agency Wine Institute (Co-sponsor) Opposition Sierra Club California (unless amended) AB 1704 Page 14 Analysis Prepared by:Diane Colborn / W., P., & W. / (916) 319-2096