BILL ANALYSIS                                                                                                                                                                                                    

                                                                     SB 226

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          226 (Pavley)

          As Amended  September 3, 2015

          Majority vote

          SENATE VOTE:  23-14

          |Committee       |Votes|Ayes                   |Noes                 |
          |                |     |                       |                     |
          |                |     |                       |                     |
          |                |     |                       |                     |
          |Water           |8-5  |Levine, Dababneh,      |Bigelow, Dahle, Beth |
          |                |     |Dodd, Cristina Garcia, |Gaines, Harper,      |
          |                |     |Gomez, Lopez, Rendon,  |Mathis               |
          |                |     |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,                |                     |
          |                |     |                       |                     |
          |                |     |                       |                     |


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          |                |     |Eduardo Garcia,        |                     |
          |                |     |Holden, Quirk, Rendon, |                     |
          |                |     |Weber, Wood            |                     |
          |                |     |                       |                     |
          |                |     |                       |                     |

          SUMMARY:  Integrates and streamlines the groundwater  
          adjudication process for groundwater basins that are subject to  
          the Sustainable Groundwater Management Act (SGMA), primarily by  
          adding a new chapter to SGMA.  Specifically, this bill:  

          1)Acknowledges the state's current ability to intervene in a  
            comprehensive adjudication, but does not expand the authority  
            of any state agency.
          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 Act's objectives.  

          3)Recognizes 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 Title 10 of Part 2 of the Code of Civil Procedure (new CCP  

          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 to file the request.

          5)Adds a new Chapter 12 to SGMA titled Determination of Rights  


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            to Groundwater and states that except as provided in that  
            Chapter, adjudication actions shall be conducted in accordance  
            with the new CCP provisions.  

          6)Directs the court, in an adjudication of a basin required to  
            have a plan under 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 groundwater adjudication judgment if the  
            judgment is submitted to DWR and DWR determines it satisfies  
            the objectives of SGMA 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  

          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. 


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

          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)Expresses the state's regulatory and supervisory authority  
            over all waters in the state, surface and underground, by  
            declaring that all waters in the state are property of the  
            people of the state, while recognizing that rights may be  
            acquired to the use of water.

          2)Establishes background principles that apply to all water  
            diversion and use, including the Constitutional prohibition  
            against waste, unreasonable use, unreasonable method of  
            diversion or unreasonable method of use.

          3)Allows a party with rights to extract and use water in 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.

          4)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.


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          5)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  

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

          7)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  
            existing groundwater management plans or adjudications that  
            DWR determines are functionally equivalent to SGMA GSPs.

          8)Requires, by January 31, 2020, that GSAs in all critically  
            overdrafted high and medium priority basins develop and adopt  
            GSPs that provide for the sustainable management of the  
            groundwater basin, as defined.

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

          10)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. 


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          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 new CCP  
          provisions 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.

          The adoption of SGMA last year was a historic effort.  SGMA 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  


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          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  
          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 are extraordinarily time-consuming and 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 SGMA's requirements  
          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 subject to SGMA  
          would be accommodated without changing any of the policies  


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          inherent within SGMA; and, AB 1390 includes all process and  
          procedural changes necessary to accelerate adjudications without  
          changing substantive 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.

          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  
          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.  Following the latest amendments to  
          this bill, 20 out of the 28 former opponents switched to a  
          position of support and it is unclear whether opposition to this  
          bill still remains.      

          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.


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