BILL ANALYSIS                                                                                                                                                                                                    






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          |SENATE RULES COMMITTEE            |                        SB 226|
          |Office of Senate Floor Analyses   |                              |
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                                   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.








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          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.









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             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.







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          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








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          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  







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            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







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          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







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          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  







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            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


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