BILL ANALYSIS                                                                                                                                                                                                    Ó

          |SENATE RULES COMMITTEE            |                        SB 226|
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                                UNFINISHED BUSINESS 

          Bill No:  SB 226
          Author:   Pavley (D)
          Amended:  9/3/15  
          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 FLOOR:  23-14, 5/26/15
           AYES:  Allen, Beall, Block, De León, Hancock, Hernandez,  
            Hertzberg, Hill, Hueso, Jackson, Lara, Leno, Leyva, Liu,  
            McGuire, Mendoza, Mitchell, Monning, Pan, Pavley, Roth,  
            Wieckowski, Wolk
           NOES:  Anderson, Bates, Berryhill, Cannella, Fuller, Gaines,  
            Huff, Moorlach, Morrell, Nguyen, Nielsen, Runner, Stone, Vidak
           NO VOTE RECORDED:  Galgiani, Hall

           ASSEMBLY FLOOR:  74-3, 9/10/15 - See last page for vote
           SUBJECT:   Sustainable Groundwater Management Act: groundwater  

          SOURCE:    Author


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          DIGEST:   This bill 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.  

          Assembly Amendments delete provisions regarding the judicial  
          process for determining groundwater rights and added provisions  
          regarding how the state enforcement provisions of SGMA apply to  
          groundwater adjudications.


          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)Authorizes a court to order a reference to the State Water  
            Resources Control Board (state board), as referee, of any and  
            all issues involved in a suit brought in any court of  


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            competent jurisdiction in this state for determination of  
            rights to water.

          5)Requires all groundwater basins designated as high- or  
            medium-priority basins by the Department of Water Resources  
            (DWR) that are designated as subject to critical overdraft  
            conditions to be managed under a groundwater sustainability  
            plan (GSP) or coordinated GSPs by January 31, 2020.

          6)Requires all other groundwater basins designated as high- or  
            medium-priority basins to be managed under a GSP or  
            coordinated GSP by January 31, 2022.

          7)Authorizes a local agency to request that the DWR revise the  
            boundaries of a basin.

          8)Authorizes state board to designate certain high- and  
            medium-priority basins as a probationary basin if certain  
            criteria are met. 

          9)Authorizes the state board to develop an interim plan for a  
            probationary basin if the state board determines that a local  
            agency has not remedied a deficiency that resulted in  
            designating the basin as a probationary basin within a certain  

          This bill:

          1)Authorizes the state to intervene in a comprehensive  
            adjudication conducted as specified in AB 1390 (Alejo) of the  
            2015-16 Regular Session.

          2)Requires a court, in an adjudication action to determine  
            rights to groundwater in a basin that is required to have a  


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            GSP under SGMA, to manage the proceedings in a manner that:

             a)   Minimizes interference with the timely completion and  
               implementation of a GSP, 

             b)   Avoids redundancy and unnecessary costs in the  
               development of technical information and a physical  
               solution, and 

             c)   Is consistent with the attainment of sustainable  
               groundwater management within the timeframes established by  

          3)Authorizes an entity, when directed by the court in an  
            adjudication action to file such a request, to request that  
            the DWR revise the boundaries of a basin.

          4)Prohibits the provisions relating to probationary basins and  
            interim plans from applying to a judgment approved by the  
            court if:

             a)   The judgment is submitted to DWR for evaluation and  
               assessment, and 

             b)   DWR determines that the judgment satisfies the  
               objectives of SGMA for the basin. 

          5)Requires DWR to submit to the court assessments and any  
            recommended corrective actions for these judgments and would  
            require the court to determine whether to amend the judgment  
            to adopt DWR's recommended corrective actions. 

          6)Prohibits a court from approving entry of judgment in an  


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            adjudication action for a basin required to have a GSP under  
            SGMA unless the court finds that the judgment will not  
            substantially impair the ability of a groundwater  
            sustainability agency, the board, or the department to comply  
            with SGMA and to achieve sustainable groundwater management.


          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.

          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  

          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.


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          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  

          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.  


          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."


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          Related Legislation

          SB 226 and AB 1390 (Alejo) constitute a single adjudication  
          proposal split into two contingently enacted bills.  Briefly:

          1)SB 226 includes all the necessary changes to SGMA.  This  
            including how adjudications in high- and medium-priority  
            basins would be accommodated within SGMA without changing any  
            of the policies inherent within SGMA.  

          2)AB 1390 includes all process and procedural changes necessary  
            to accelerate adjudications without changing groundwater  
            rights law.

          FISCAL EFFECT:   Appropriation:    No          Fiscal  
          Com.:YesLocal:   No

          According to the Assembly Appropriations Committee:

           Unknown costs, potentially in the hundreds of thousands of  
            dollars, for state agency intervention in water rights suits.

          SUPPORT:   (Verified                        9/10/15)

          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
          California Farm Bureau Federation 
          California Grain and Feed Association


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                                                                    Page  8

          California League of Conservation Voters
          California Pear Growers Association
          California Seed Association
          Clean Water Action California
          Community Water Center
          Leadership Counsel for Justice & Accountability
          Pacific Egg and Poultry Association
          Sierra Club California
          The Nature Conservancy
          Western Growers Association

          OPPOSITION:   (Verified                     9/10/15)

          None received

          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  

          "SB 226 and AB 1390 tackle head on the various time sinks  
          witnesses identified at this committee's hearing last November  
          on groundwater adjudication. Briefly:

          1)SB 226 includes all the necessary changes to SGMA.  This  
            including how adjudications in high- and medium-priority  
            basins would be accommodated within SGMA without changing any  
            of the policies inherent within SGMA.  

          2)AB 1390 includes all process and procedural changes necessary  
            to accelerate adjudications without changing groundwater  


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                                                                    Page  9

            rights law.

          "With these changes, SB 226 will reduce needless delays while  
          still protecting due process rights."

           ASSEMBLY FLOOR:  74-3, 9/10/15
           AYES: Achadjian, Alejo, Travis Allen, Baker, Bloom, Bonilla,  
            Bonta, Brown, Burke, Calderon, Campos, Chang, Chau, Chávez,  
            Chiu, Chu, Cooley, Cooper, Dababneh, Daly, Dodd, Eggman,  
            Frazier, Beth Gaines, Cristina Garcia, Eduardo Garcia, Gatto,  
            Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper,  
            Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim,  
            Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis,  
            Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte,  
            O'Donnell, Olsen, Perea, Quirk, Rendon, Ridley-Thomas,  
            Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond,  
            Ting, Wagner, Weber, Wilk, Williams, Wood, Atkins
           NOES: Brough, Dahle, Gallagher
           NO VOTE RECORDED: Bigelow, Patterson, Waldron

          Prepared by:                                Dennis O'Connor /  
          N.R. & W. / (916) 651-4116
          9/10/15 23:22:53

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