BILL ANALYSIS                                                                                                                                                                                                    



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          Date of Hearing:  June 30, 2015


                   ASSEMBLY COMMITTEE ON WATER, PARKS, AND WILDLIFE


                                  Marc Levine, Chair


          SB  
          226 (Pavley) - As Amended May 5, 2015


          SENATE VOTE:  23-14


          SUBJECT:  Sustainable Groundwater Management Act: groundwater  
          rights.


          SUMMARY:  Streamlines groundwater adjudications by adding special  
          procedures under, and consistent with, the Sustainable  
          Groundwater Management Act (SGMA).  Specifically, this bill:  


          1)Adds a new Chapter 12 to SGMA titled Determination of Rights to  
            Groundwater.  
          2)Finds and declares that it establishes a timely and  
            comprehensive method for determining rights to groundwater. 

          3)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. 

          4)Requires the process for determining rights to groundwater to  
            be available to any court of competent jurisdiction. 










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          5)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.

          6)Directs a court, in making its determination of rights to  
            groundwater, to avoid undesirable results as defined in SGMA.

          7)Provides that it applies to Indian tribes and the federal  
            government to the extent authorized by federal and tribal law.   


          8)Requires the boundaries of a basin to be as identified in  
            Bulletin 118, unless other basin boundaries are established  
            pursuant to SGMA.

          9)Authorizes the Department of Water Resources (DWR) and the  
            California Department of Fish and Wildlife to intervene in an  
            action or proceeding if they claim an interest relating to the  
            action or proceeding. 

          10)Specifies service and notice procedures. 

          11)Requires a party to provide specified initial disclosures to  
            the other parties, including, among other disclosures,  
            information relating to expert witnesses, and sets time  
            deadlines for the initial disclosures and expert witness  
            information to be provided.

          12)Makes other conforming and technical changes to the Water  
            Code.

          EXISTING LAW:   


          1)Allows a party with rights to 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  









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            the basin.

          2)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.

          3)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 degradation.

          4)Requires, by June 30 2017, that local agencies form one or more  
            Groundwater Sustainability Agencies (GSAs) in all high and  
            medium priority basins subject to the Sustainable Groundwater  
            Management Act (SGMA) for the purpose of developing and  
            adopting Groundwater Sustainability Plans (GSPs) or submit  
            existing groundwater management plans that DWR determines are  
            functionally equivalent to SGMA GSPs.

          5)Requires, by January 31, 2020, that GSAs in all high and medium  
            priority basins subject to a chronic condition of overdraft  
            develop and adopt GSPs that provide for the sustainable  
            management of the groundwater basin, as defined.

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

          7)Allows the State Water Resources Control Board (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 GSP is adopted  
            which DWR deems insufficient and where the basin is in a  









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            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,  
          pursuant to Senate Rule 28.8, negligible state costs.


          COMMENTS:  This bill tries to address some of the delays in  
          groundwater adjudications by creating standardized forms,  
          processes, requirements, and timelines but does them in the  
          context of amending, and maintaining consistency with, SGMA.   
          This bill is dual referred to the Assembly Committee on  
          Judiciary. For that reason, this analysis only covers this bill's  
          general and SGMA-related ramifications for California groundwater  
          management. 


          1)Author's statement:  The author states that under current law,  
            groundwater rights adjudications take an extraordinarily long  
            time and are extraordinarily expensive.  The author adds that  
            as she was working last year to enact SGMA it became clear that  
            there will almost certainly be more adjudications and that 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."  The author adds that this bill "tackles  
            head-on the various time sinks" that witnesses identified at  
            her informational hearing last November on groundwater  
            adjudication regarding basin boundaries, notice and service,  
            discovery, and expert witnesses.  The author concludes that  
            with these changes, this bill "will reduce needless delays  
            while still protecting due process rights."

          2)Background:  The adoption of SGMA last year was a historic  
            effort that took effect on January 1, 2015.  However, even as  
            SGMA was being developed many stakeholders voiced a desire to  
            include language that would streamline groundwater  









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            adjudications as an additional tool.  At one point AB 1739  
            (Dickinson), one of the three bills that ultimately formed  
            SGMA, included a placeholder for language to streamline  
            groundwater adjudications but the subject ultimately proved too  
            complex to resolve in time for inclusion.  Nevertheless,  
            Governor Jerry Brown in his September 16, 2014 signing message  
            for SGMA stated that not only would he work closely with all  
            affected groups to ensure that SGMA was fairly implemented but  
            that further, he would "submit for legislative consideration  
            during the next session a proposal to streamline judicial  
            adjudications of groundwater rights."


            It is undisputable that adjudications are complicated.  As the  
            Water Education Foundation, a nonprofit nonpartisan educational  
            entity states succinctly in its definition of adjudication:  
            "When multiple parties withdraw water from the same aquifer,  
            groundwater pumpers can ask the court to adjudicate, or hear  
            arguments for and against, to better define the rights that  
            various entities have to use groundwater resources.  This is  
            known as groundwater adjudication.  Through adjudication, the  
            courts can assign specific water rights to water users and can  
            compel the cooperation of those who might otherwise refuse to  
            limit their pumping of groundwater.  Watermasters are typically  
            appointed by the court to ensure that pumping conforms to the  
            limits defined by the adjudication."  


            Determining who has groundwater rights that could be affected  
            by an adjudication and the scope of those rights is difficult  
            as there are no state law requirements to report groundwater  
            withdrawals.  State law gives every overlying property owner a  
            potential right in an unadjudicated groundwater basin.  So  
            noticing all of those parties that there will be an  
            adjudication action can be lengthy and expensive.  There are  
            also technical disagreements among parties, including as to the  
            historic groundwater use which could affect the scope of one's  









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            rights.  


            On November 20, 2014, the author of this bill, as Chair of the  
            Senate Natural Resources and Water Committee, held an  
            information hearing entitled Resolving Disputes Regarding  
            Groundwater Rights: Why Does It Take So Long and What Might Be  
            Done to Accelerate the Process? In that hearing expert  
            observations from Third District Court of Appeals Judge Ronald  
            B. Robie and others were presented that raised many of the  
            issues discussed above.  The Antelope Valley groundwater  
            adjudication, referenced at the hearing, provided an example.   
            As Fiona Smith reports in the Daily Journal article State  
            Looking to Speed Groundwater Lawsuits (October 29, 2014), the  
            Antelope Valley groundwater basin adjudication "has been  
            sitting in a trial court for 15 years. The case is enormous,  
            involving a multitude of public agencies and landowners large  
            and small who hold groundwater pumping rights.  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 9,404 docket entries in the case so  
            far and more than 100 lawyers listed on the case."  Ms. Smith  
            also references the Santa Maria groundwater basin, in Santa  
            Barbara and San Luis Obispo counties, as an adjudication that  
            "took 15 years to work through the trial and appellate courts,  
            and it is still not completely resolved.  That case involved  
            thousands of parties and has cost tens of millions of dollars,  
            said Henry S. Weinstock, a partner at Nossaman LLP who worked  
            on the case."


          3)Dual referral:  This bill is double-referred and will next go  
            to the Assembly Judiciary Committee.


          4)Prior and related Legislation:  The three-bill package of  
            legislation forming SGMA and related statutes is:  









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          SB 1168 (Pavley), Chapter 346, Statutes of 2014; AB 1739  
            (Dickinson) Chapter 347, Statutes of 2014; and, SB 1319  
            (Pavley), Chapter 348, Statutes of 2014.


            This is one of 7 currently-active bills in the Legislature  
            proposing changes to SGMA and its related statutes:  


            AB 1390 (Alejo) is the most directly-related bill.  Like this  
            bill, AB 1390 creates a streamlined process for groundwater  
            adjudications but on a separate track that optional allows SGMA  
            plans to be considered or incorporated.


            AB 453 (Bigelow) allows groundwater management plans adopted  
            prior to SGMA to be amended and extended; allows a local agency  
            to impose fees and collect groundwater extraction information  
            for developing and adopting a revised groundwater management  
            plan; and, prohibits Water Rights Fund fees from being used for  
            SGMA enforcement.


            AB 617 (Perea) makes substantive changes to SGMA including, but  
            not limited to, allowing mutual water companies to join GSA's  
            using Joint Powers of Agreement.  


            AB 938 (Salas) specifies that when a basin is reprioritized to  
            high or medium and thus becomes subject to SGMA then extended  
            SGMA deadlines apply to a combination of agencies (plural) and  
            not just an agency (singular).  


            AB 939 (Salas) changes the time period for providing technical  
            data upon which a SGMA fee is based from 10 days before the  
            meeting to adopt the fee to 20 days before such meeting.









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            AB 1242 (Gray) requires the State Water Board, when setting  
            in-stream flows, to take into account any groundwater  
            management plan, including under SGMA, and requires the State  
            Water Board to identify projects for fish recovery that may be  
            undertaken in lieu of instream flows.


            SB 13 (Pavley) makes several technical cleanup changes to SGMA  
            and related statutory sections.


          5)Supporting arguments:  Supporters state that this bill creates  
            a streamlined process for judicial adjudications of groundwater  
            basins in a manner that protects individual rights, ensures the  
            prevention of undesirable results consistent with SGMA, and  
            allows agency intervention where the environment may  
            necessitate.  Supporters add that" until the implementation of  
            plans under SGMA, individuals with their groundwater rights  
            being infringed upon do not have easy access to relief through  
            the courts.  Final decisions only deal with water rights,  
            ignoring the numerous other problems that can occur within a  
            groundwater basin that SGMA addresses."  Supporters add that  
            this bill helps ease the burden on individuals and the courts  
            by standardizing and expanding service of process requirements,  
            and allowing DWR and DFW to intervene in an adjudication,  
            should their interests need to be addressed.  Supporters  
            conclude that, finally, "any decision a court issues will  
            attempt to avoid an undesirable result as defined under SGMA"  
            which "creates a better process for adjudication of groundwater  
            rights holders and the environment." 


          6)Opposing arguments:  Opponents state that they are sponsoring  
            AB 1390, a comprehensive bill to address streamlining  
            groundwater adjudications by "adding a new chapter to the Code  









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            of Civil Procedure making improvements to the judicial  
            proceedings of comprehensive adjudications of groundwater  
            rights in a basin."  Opponents state that AB 1390 will reduce  
            the burden of groundwater adjudications on both the courts and  
            claimants without altering the law of groundwater rights and  
            without disruption to the [SGMA] planning process.  Opponents  
            add that while they appreciate this author's "interest in the  
            issue of adjudication we respectfully prefer the approach  
            offered in AB 1390."  Other opponents support "aligning  
            streamlined adjudications process with SGMA objectives" however  
            they do not support this bill's approach of including  
            streamlined groundwater adjudications within SGMA as SGMA is a  
            law that "already includes significant groundwater reforms"  
            focused on improving the sustainability and reliability of  
            California's groundwater basins.  Opponents therefore, believe  
            SGMA "should be given time to be implemented and that it is  
            premature to make significant policy changes to the Act at this  
            time."
          REGISTERED SUPPORT / OPPOSITION:




          Support
          All Outdoors


          American River Conservancy


          American River Touring Association Inc. (ARTA)


          American Whitewater


          California Canoe and Kayak









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          California Outdoors


          California Sportfishing Protection Alliance


          California Water Impact Network (C-WIN)


          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










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          Northern California Council of the International Federation of  
          Fly Fishers


          Planning and Conservation League


          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










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          The Nature Conservancy


          Tuolumne River Trust


          Winnemem Wintu Tribe




          Opposition
          African American Farmers of California


          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











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          California Citrus Mutual


          California Cotton Ginners Association


          California Cotton Growers Association


          California Dairies Inc.


          California Farm Bureau Federation


          California Floral Council


          California Fresh Fruit Association


          California Grain and Feed Association


          California Pear Growers Association


          California Seed Association


          California Tomato Growers Association


          Kings River Conservation District


          Kings River Water Association









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          National Hmong American Farmers 


          Nisei Farmers League


          Pacific Egg and Poultry Association


          Southwest California Legislative Council


          Western Agricultural Processors Association


          Western Growers Association


          Western Plant Health Association




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