BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | SB 226| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: SB 226 Author: Pavley (D) Amended: 5/5/15 Vote: 21 SENATE NATURAL RES. & WATER COMMITTEE: 6-2, 4/14/15 AYES: Pavley, Allen, Hueso, Jackson, Monning, Wolk NOES: Stone, Fuller NO VOTE RECORDED: Hertzberg SENATE JUDICIARY COMMITTEE: 5-1, 4/28/15 AYES: Jackson, Hertzberg, Leno, Monning, Wieckowski NOES: Anderson NO VOTE RECORDED: Moorlach SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8 SUBJECT: Sustainable Groundwater Management Act: groundwater rights SOURCE: Author DIGEST: This bill establishes special procedures for courts use in determining rights to groundwater under the Sustainable Groundwater Management Act (SGMA). This bill specifies procedures for, among other things, making determinations of rights to groundwater under SGMA, for serving notice to unknown parties, for providing initial disclosure of discoverable information, including information pertaining to expert witnesses, and for intervention by the Department of Water Resources and the Department of Fish and Wildlife. SB 226 Page 2 ANALYSIS: Last session the Legislature enacted the SGMA (SB 1168, Pavley, Chapter 346, Statutes of 2014). 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. This bill: 1)Adds a new Chapter 12 to SGMA titled DETERMINATION OF RIGHTS TO GROUNDWATER. Specifically: a) Finds and declares that it establishes a timely and comprehensive method for determining rights to groundwater. b) Provides that a court shall use the Code of Civil Procedure for determining rights to groundwater, except as provided by the special procedures established in the bill. c) Requires the process for determining rights to groundwater to be available to any court of competent jurisdiction. d) Deems an action requesting a court to determine water rights under this chapter to be provisionally complex within the meaning provided in the California Rules of Court. e) Directs a court, in making its determination of rights to groundwater, to avoid undesirable results as defined in SGMA. SB 226 Page 3 f) Provides that it applies to Indian tribes and the federal government to the extent authorized by federal and tribal law. g) Requires the boundaries of a basin to be as identified in Bulletin 118, unless other basin boundaries are established pursuant to SGMA. h) Authorizes the Department of Water Resources and the Department of Fish and Wildlife to intervene in an action or proceeding if they claim an interest relating to the action or proceeding. i) Specifies service and notice procedures. j) Requires a party to provide specified initial disclosures to the other parties, including, among other disclosures, information relating to expert witnesses. 2) Makes other conforming and technical changes to the Water Code. Background Among other things, the 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. SB 226 Page 4 An adjudication of groundwater rights is initiated by a lawsuit. 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 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, the Senate Natural Resources and Water 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. Comments SB 226 Page 5 1)Everyone Agrees The Current Process Needs Improvement. At the Senate Natural Resources and Water Committee 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 people who have the rights, so groundwater adjudications at the common law can be expensive to the parties." 2)There Is A Question Of Where To Put The Improvements. This bill proposes to put the changes to the groundwater adjudication process in SGMA to ensure that any future adjudication is done so "in furtherance of the objectives" of SGMA. The Farm Bureau prefers to put such changes in the Code of Civil Procedure instead. 3)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. 4)Protection Of the 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 SB 226 Page 6 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 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 authorizes the Department of Water Resources and the Department of Fish and Wildlife to intervene in an action or proceeding if they claim an interest relating to the action or proceeding. As noted in the Senate Judiciary Committee analysis of this bill, merely allowing these Departments to join as parties to an adjudication would not lead to the recognition of a groundwater right. Just like any other party, these Departments would have to establish their claim to groundwater in the basin under applicable law. Further, it would be premature to conclude as a matter of law that these Departments could not claim a right to groundwater in basins undergoing adjudication, particularly in light of recent court decisions recognizing that certain quantities of groundwater may be subject to the public trust doctrine. Related Legislation AB 1390 (Alejo, 2015) streamline the procedures used in a legal action to obtain a basin-wide adjudication of groundwater rights by adding a new chapter to the Code of Civil Procedure. FISCAL EFFECT: Appropriation: No Fiscal Com.:YesLocal: No SB 226 Page 7 SUPPORT: (Verified 5/19/15) All Outdoors American River Conservancy American River Touring Association Inc. American Whitewater California Canoe and Kayak California Outdoors California Sportfishing Protection Alliance California Water Impact Network Clean Water Action Community Water Center Delta Kayak Adventures Foothill Conservancy Friends of the Eel River Friends of the River Friends of the San Francisco Estuary Merced River Conservation Committee North Coast Rivers Alliance Northern California Council of the International Federation of Fly Fishers Restore Hetch Hetchy Restore the Delta Rivers for Change Rose Foundation for Communities and the Environment Sacramento River Preservation Trust Save the American River Association Sierra Club California Sierra Nevada Alliance Smith River Alliance South Yuba River Citizens League Tuolumne River Trust Winnemem Wintu Tribe OPPOSITION: (Verified 5/19/15) African American Farmers of California California Citrus Mutual California Cotton Ginners Association SB 226 Page 8 California Cotton Growers Association California Dairies Inc. California Farm Bureau Federation California Floral Council California Fresh Fruit Association California Tomato Growers Association National Hmong American Farmers Nisei Farmers League Western Agricultural Processors Association Western Plant Health Association ARGUMENTS IN SUPPORT: According to the author, "Under current law, groundwater rights adjudications take an extraordinarily long time and are extraordinarily expensive. As we were working last year to enact the Sustainable Groundwater Management Act (SGMA) two things became clear: 1) there will almost certainly be more such adjudications, and 2) it will be difficult, if not impossible, for some basins to comply with the requirements of SGMA if we don't speed up the adjudication process." "SB 226 tackles head on the various time sinks witnesses identified at this committee's hearing last November on groundwater adjudication. SB 226 addresses these issues as follows: Basin Boundaries - boundaries shall be as identified in DWR's Bulletin 118, unless modified as provided in SGMA. Notice & Service - notice to known parties is as provided in the Code of Civil Procedures (CCP). Unknown parties would be served by publication. Discovery - follows the Federal procedures, which require disclosure of specific items without awaiting a discovery request. Expert Witness - follows the Federal procedures, which require an SB 226 Page 9 expert witness to provide a written report on opinions the witness will express and the basis and reasons for them." "With these changes, SB 226 will reduce needless delays while still protecting due process rights." ARGUMENTS IN OPPOSITION: The California Farm Bureau Federation writes, "When Governor Brown signed the Sustainable Groundwater Management Act (SGMA) bill package last year, interest in improving the groundwater adjudication process was expressed by the Administration and authors of the bill package. The Farm Bureau has worked with many others since the SGMA was signed into law and has introduced a comprehensive bill (AB 1390 - Alejo) to address the issues by adding a new chapter to the Code of Civil Procedure making improvements to the judicial proceedings of comprehensive adjudications of groundwater rights in a basin. These changes will reduce the burden of groundwater adjudications on both the courts and claimants without altering the law of groundwater rights without disruption the Sustainable Groundwater Management Act planning process. While we appreciate [Senator Pavley's] interest in the issue of adjudication we respectfully prefer the approach offered in AB 1390." "SB 226 makes changes to the SGMA that already includes significant groundwater reforms which focuses on improving the sustainability and reliability of California's groundwater basins. We believe that the SGMA should be given time to be implemented and that it is premature to make significant policy changes to the Act at this time." Prepared by:Dennis O'Connor / N.R. & W. / (916) 651-4116 5/21/15 11:20:32 **** END **** SB 226 Page 10