BILL ANALYSIS                                                                                                                                                                                                    



                                                                     SB 226


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          SENATE THIRD READING


          SB  
          226 (Pavley)


          As Amended  September 1, 2015


          Majority vote


          SENATE VOTE:  23-14


           ------------------------------------------------------------------ 
          |Committee       |Votes|Ayes                  |Noes                |
          |                |     |                      |                    |
          |                |     |                      |                    |
          |                |     |                      |                    |
          |----------------+-----+----------------------+--------------------|
          |Water           |8-5  |Levine, Dababneh,     |Bigelow, Dahle,     |
          |                |     |Dodd, Cristina        |Beth Gaines,        |
          |                |     |Garcia, Gomez, Lopez, |Harper, Mathis      |
          |                |     |Rendon, Williams      |                    |
          |                |     |                      |                    |
          |----------------+-----+----------------------+--------------------|
          |Judiciary       |7-3  |Mark Stone, Alejo,    |Wagner, Gallagher,  |
          |                |     |Chau, Chiu, Cristina  |Maienschein         |
          |                |     |Garcia, Holden,       |                    |
          |                |     |O'Donnell             |                    |
          |                |     |                      |                    |
          |----------------+-----+----------------------+--------------------|
          |Appropriations  |12-0 |Gomez, Bloom, Bonta,  |                    |
          |                |     |Calderon, Nazarian,   |                    |
          |                |     |Eggman, Eduardo       |                    |
          |                |     |Garcia, Holden,       |                    |
          |                |     |Quirk, Rendon, Weber, |                    |








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          |                |     |Wood                  |                    |
          |                |     |                      |                    |
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          SUMMARY:  Adds a new chapter to the Sustainable Groundwater  
          Management Act (SGMA) that integrates and streamlines the  
          groundwater adjudication process for groundwater basins that are  
          subject to SGMA.  Specifically, this bill:  


          1)Clarifies that the state may intervene as a matter of right in  
            any suit brought in any court for determination of rights to  
            water.  Specifies that this does not change substantive law.
          2)Expands SGMA's findings to include that SGMA is to provide a  
            more efficient and cost-effective groundwater adjudication  
            process that protects water rights, ensures due process,  
            prevents unnecessary delay, and furthers the SGMA's  
            objectives. 


          3)Allows that water rights may be determined in an adjudication  
            action pursuant to the procedural streamlining processes that  
            would be established by AB 1390 (Alejo) of the current  
            legislative session, which would add a new Chapter 7 to the  
            Code of Civil Procedure. 


          4)Expands the entities who may file a request with Department of  
            Water Resources (DWR) to revise groundwater basin boundaries  
            to include an entity directed by the court in an adjudication  
            action.


          5)Adds a new Chapter 12 to SGMA titled Determination of Rights  
            to Groundwater and states that except in that Chapter,  
            adjudication actions shall be conducted in accordance with  
            Chapter 7 of the Code of Civil Procedure.  









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          6)Directs the court, in an adjudication of a basin subject to  
            SGMA, to manage the proceeding in a manner that minimizes  
            interference with the timely completion and implementation of  
            a groundwater sustainability plan (GSP), avoids redundancy and  
            unnecessary costs in the development of technical information  
            and a physical solution, and is consistent with the attainment  
            of sustainable groundwater management with the timeframes  
            established by SGMA.


          7)Provides that State enforcement under SGMA shall not apply to  
            a court-approved stipulated groundwater adjudication judgment  
            if the stipulated judgment is submitted to DWR and DWR  
            determines it is a SGMA GSP equivalent for the basin.  Allows  
            the same court that is handling the adjudication to review  
            DWR's determination and treats such review as a coordinated  
            legal action.


          8)Allows the court, after notice and, if necessary, an  
            evidentiary hearing, to amend a judgment in response to DWR's  
            assessment, including incorporating corrective actions DWR has  
            identified to make the judgment consistent with SGMA and  
            achieve the sustainability goal.


          9)Prohibits a court from approving an entry of judgment in an  
            adjudication action of a basin required to have a SGMA GSP  
            unless the court first finds that the judgment will not  
            substantially impair the ability of a groundwater  
            sustainability agency (GSA), the State Water Resources Control  
            Board (State Water Board), or DWR, to comply with SGMA and  
            achieve sustainable groundwater management. 


          10)Is operative only if AB 1390 is also enacted and becomes  
            effective.









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          11)Includes conforming changes to avoid conflicting with the  
            technical corrections to SGMA contained in SB 13 (Pavley) of  
            the current legislative session.


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


          5)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  








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            existing groundwater management plans that DWR determines are  
            functionally equivalent to SGMA GSPs.


          6)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.


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


          8)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  
            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 Assembly Appropriations  
          Committee, there are unknown costs, potentially in the hundreds  
          of thousands of dollars, for state agency intervention in water  
          rights suits.


          COMMENTS:  This bill addresses the standards and processes for  
          streamlined groundwater adjudications in groundwater basins that  
          are subject to SGMA.  This bill references the general  
          procedures for streamlining groundwater adjudications that are  
          established by AB 1390 and which would be applicable to any  
          basin.  However, this bill also sets out, in a new Chapter to  
          SGMA, 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.








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          The adoption of SGMA last year was a historic effort that took  
          effect on January 1, 2015.  Many local agencies are now in the  
          process of creating their GSAs in order to develop and implement  
          GSPs that will achieve sustainable management of their  
          groundwater basins within a twenty year time frame.  During  
          SGMA's development in 2014 many stakeholders voiced a desire to  
          streamline groundwater adjudications as an additional tool to  
          help manage groundwater in California.  Both Senator Pavley, one  
          of the original SGMA authors, and Governor Jerry Brown when he  
          signed SGMA, committed to working on streamlining groundwater  
          adjudications in 2015.


          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  
          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  








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          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, under current law, groundwater rights  
          adjudications take an extraordinarily long time and are  
          extraordinarily expensive.  The author notes that as she was  
          working last year to enact SGMA it became clear that: there will  
          almost certainly be more such groundwater adjudications; and, it  
          will be difficult, if not impossible, for some basins to comply  
          with the requirements of SGMA unless the adjudication process is  
          streamlined.  The author advises that this bill, along with AB  
          1390, tackle head on the various time sinks witnesses identified  
          at the Senate Natural Resources and Water Committee information  
          hearing last November on groundwater adjudication.  The author  
          explains the differences between this bill and AB 1390, which  
          are contingently enacted by advising that this bill contains all  
          necessary changes to SGMA, including establishing how  
          adjudications in high- and medium-priority basins would be  
          accommodated within SGMA without changing any of the policies  
          inherent within SGMA while AB 1390 includes all process and  
          procedural changes necessary to accelerate adjudications without  
          changing groundwater rights law.  The author concludes that this  
          bill and AB 1390, together, will reduce needless delays in  
          settling groundwater rights disputes while still protecting due  
          process rights.


          It is unclear whether opposition to this bill remains.  Most  
          former opposition to this bill was submitted when this bill and  
          AB 1390 were competing measures and came from entities and  
          organizations that supported AB 1390 and felt that it was  
          preferable.  Those opponents also felt that the Code of Civil  
          Procedure was the appropriate place for procedural streamlining  
          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  








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          proposal that places the SGMA-specific language in this bill and  
          the procedural streamlining processes in AB 1390, which amends  
          the Code of Civil Procedure.    


          In addition to AB 1390, there are two bills pending in the  
          Legislature that make changes to SGMA.  SB 13, referenced above,  
          makes several technical cleanup changes to SGMA and its related  
          statutory sections.  SB 13 is on the Governor's desk awaiting  
          action.  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:  
          0001880