BILL ANALYSIS                                                                                                                                                                                                    Ķ



          SENATE COMMITTEE ON NATURAL RESOURCES AND WATER
                             Senator Fran Pavley, Chair
                                2015 - 2016  Regular 

          Bill No:            SB 1026         Hearing Date:    April 12,  
          2016
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          |Author:    |Nielsen                |           |                 |
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          |Version:   |February 12, 2016                                    |
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          |Urgency:   |No                     |Fiscal:    |Yes              |
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          |Consultant:|William Craven                                       |
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            Subject:  Department of Fish and Wildlife:  lake or streambed  
                                alteration agreements


          BACKGROUND AND EXISTING LAW
             1.   Fish and Game Code. 

          California has numerous state laws designed to protect fish and  
          wildlife. This bill would affect Fish and Game Code Section 1602  
          which is commonly referred to as one part of the "streambed  
          alteration" statute which begins at Section 1600. It contains  
          the provisions relating to permits for streambed and lake  
          agreements that, when issued, determine the extent to which a  
          planned activity within a stream or river may adversely affect  
          fish or wildlife or habitat and what off-setting mitigation may  
          be required. In the absence of a permit, the section states that  
          an entity may not substantially divert or obstruct the natural  
          flow of stream or deposit or dispose of material. Existing law  
          requires the entity to notify the Department of Fish and  
          Wildlife (DFW) which triggers the negotiation of the standards  
          that may apply to the request.  At that point the entity and   
          DFW enter into a streambed alteration agreement (SAA) that  
          contains any necessary provisions to mitigate the planned  
          activity's potentially adverse consequences. 

          This law was enacted first in 1970, reenacted in 1976, and  
          amended in 2003, but the purpose of the law has never changed.  
          The law declares "the protection and conservation of the fish  
          and wildlife resources of this state are of utmost public  






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          interest. Fish and wildlife are the property of the people and  
          provide a major contribution to the economy of the state, as  
          well as providing a significant part of the people's food  
          supply; therefore their conservation is a proper responsibility  
          of the state."

          A permit fee is required, and the law provides for binding  
          arbitration in the event of a disagreement. 

          Existing law and determinations made by DFW do not require  
          physical alteration of a streambed for the permitting provisions  
          to apply, although that was contested in recent and unsuccessful  
          litigation brought by the Siskiyou County Farm Bureau and which  
          this bill seeks to address. 

          Specifically, section 1602 prohibits, in relevant part, those  
          diversions that substantially divert or obstruct the natural  
          flow of the river in the absence of the permit described  
          earlier. 

          The section does not apply to the routine maintenance and  
          operation of water supply, drainage, flood control, or waste  
          treatment and disposal facilities except when the work described  
          in the SAA has substantially changed, or the conditions  
          affecting fish and wildlife resources have substantially  
          changed. 

             2.   Water Law. 

          Water use by those with appropriative or riparian rights is  
          limited by the "reasonable use" doctrine which forbids the waste  
          of water or its unreasonable use. In addition, the public trust  
          doctrine vests the state with sovereign authority over all  
          navigable waterways. 

          Although the term "water rights" is often rhetorically discussed  
          as an absolute concept of ownership, the water in California is  
          in fact owned by the people of California. Water Code Section  
          102. The right to use water may be acquired in the manner  
          provided by law. 

          The "public trust doctrine" requires the state, as a trustee, to  

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          manage its public trust resources (including wildlife and water)  
          to derive the maximum benefit for its citizenry. The benefits to  
          be considered and balanced include economic, recreational,  
          aesthetic and environmental; if at any time the trustee  
          determines that a use of water other than the then current use  
          would better serve the public trust, the state has the power and  
          the obligation to reallocate that water in accordance with the  
          public's interest. Even if the water at issue has been put to  
          beneficial use (and relied upon) for decades, it
          can be taken from one user in favor of another need or use. The  
          public trust doctrine therefore means that no water rights in  
          California are truly "vested" in the traditional sense of  
          property rights. Sawyer, Primer on California Water Law, 10. 

          In all contexts, what constitutes a reasonable use of water  
          depends on many factors and often involve "statewide  
          considerations of transcendent importance." These statewide  
          considerations, as defined in court decisions and the state  
          constitution, are that 'limited water resources be put only to  
          those beneficial uses "to the fullest extent of which they are  
          capable," that "waste or unreasonable use" be prevented, and  
          that conservation be exercised "in the interest of the people  
          and for the public welfare." 

          PROPOSED LAW
          This bill limits and re-defines the threshold for a streambed  
          alteration agreement to require substantial alterations of the  
          "bed, channel, or bank" of any river or stream. It also adds an  
          exemption to section 1602 of the Fish and Game Code that would  
          apply to "routine maintenance and repair of facilities for  
          instream agricultural irrigation diversions." 

          ARGUMENTS IN SUPPORT
          According to the author, the original intent of section 1602 was  
          limited to large construction projects and mining operations  
          that could substantially alter a streambed or channel and  
          thereby physically divert the flow of a river or stream. The  
          author argues that in 2005 DFW expanded its interpretation of  
          the section to require agricultural water right owners to obtain  
          permit for extracting water in routine and ongoing operations.  
          In addition to the burdensome nature of the permitting process,  
          the author predicts that in low water years, permits will not be  

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          issued. 

          The California Central Valley Flood Control Association is  
          particularly supportive of the provision regarding routine  
          maintenance and repair of diversion facilities not being subject  
          to a SAA. The group believes that the potential threat to  
          streams or fisheries from routine maintenance and repair of  
          facilities is very low, especially when best management  
          practices could be developed and used. 

          The California Cattlemen's Association agrees with the author  
          regarding the original purpose of the Section 1600 permits, and  
          is concerned about the burden on farmers and ranchers. It also  
          says that DFW is now expanding the scope of the permits into  
          certain floodplains. It is concerned that the new regulations of  
          the state water board to require all diversions greater than 10  
          acre-feet to monitor and report water use within statutory  
          parameters could also trigger the need for Section 1600 permits  
          unless this bill is passed. 

          The California Farm Bureau states that farmers and ranchers  
          should not be required to obtain 1600 agreements "simply to open  
          a headgate and exercise their existing water right to irrigate  
          their crops or pastures." 

          ARGUMENTS IN OPPOSITION
          None received. 

          COMMENTS
             1.   The policy arguments in support advanced by the author  
               were considered and rejected in a unanimous, published  
               Court of Appeal decision in 2015.   Siskiyou Farm Bureau v.  
               Department of Fish and Wildlife  . 

          The court disposed of the arguments as follows: 

             a)   The word "divert" clearly and without ambiguity includes  
               diversions that do not alter the streambed itself.  A  
               diversion can and does mean a diversion of water, whether  
               or not the streambed or channel is physically altered.  It  
               rejected all of the Farm Bureau arguments that questioned  
               that conclusion. The court did point out that the  

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               Legislature created the statutory balance that is currently  
               in effect, and theoretically could alter that balance.  
               However, the court noted that such a step could  risk the  
               de-watering of streams that provide important fish habitat,  
               especially in drought years.  

             b)   The court did not accept the Farm Bureau view that DFW  
               abruptly changed its policy and began enforcing Section  
               1602 in a way that it had never done before. However, even  
               if DFW had not enforced 1602 in such a way previously, the  
               statute does not preclude it from doing so "in the face of  
               extreme drought and piscatorial peril." DFW has the legal  
               authority to prevent "substantial dewatering of streams  
               absent physical alteration to the streambeds."

             c)   Whether a diversion is substantial depends on a number  
               of factors "including the amount of water taken relative to  
               the supply, the use to which the water is applied, the  
               historical usage by the diverter, and the needs of the  
               fish, given the palpable fact that-due to yet another in a  
               series of recurring drought conditions in California-there  
               simply is not enough water to satisfy all legitimate  
               needs." 

             d)   The water law considerations that were recited earlier  
               came from this decision. 

             e)   The court rejected the Farm Bureau position that the use  
               of this statute casts DFW as another arbiter of water  
               rights, usurping authority from the State Water Board. That  
               argument was opposed in court by the State Water Board  
               itself and the court pointed out that the section does not  
               blur the lines of authority between the two agencies. 

             f)   In its conclusion, the court cited Dr. Seuss for the  
               proposition that the existing statute is not ambiguous and  
               that the Legislature created the statutory balance knowing  
               exactly what the words mean-"I meant what I said and I said  
               what I meant," Dr. Seuss wrote in  Horton Hatches the Egg  .

             1.   It is worth noting that the one of the important fish  
               species that is at risk in Siskiyou County when streams are  

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               inadequate to provide habitat is Coho salmon. In 2005, the  
               coho salmon was listed as threatened under the California  
               Endangered Species Act. 

          The National Marine Fisheries Service has divided West Coast  
          coho into six evolutionary significant units, including the  
          South Oregon/Northern California Coasts (SONCC), which is  
          comprised of 41 populations. Once numbering 150,000 to 400,000  
          naturally spawning fish in the mid-twentieth century,  
          populations have declined to a mere 10,000.  In light of this  
          trend, the U.S. government in 1997 listed the SONCC coho unit as  
          endangered under the federal Endangered Species Act. (Note: The  
          overall Coho population has declined further since this report  
          was published in 2012.)

          It is a threatened species under California law. 

          Coho runs in particular will likely continue to be extremely low  
          because of warm oceans which is a lingering effect of the warm  
          North Pacific "Blob" and this year's El Niņo weather system, and  
          what appears to be an ongoing, but less severe drought,  
          notwithstanding the rains of 2016. 

          The overall picture of coho salmon in California is one of  
          severely depleted populations. The main factors and threats  
          affecting population viability of coho salmon, as listed in the  
          DFW Recovery Strategy, have not changed substantially over  
          several decades:  That document states: "The ongoing population  
          declines are thought to be largely attributable to human causes,  
          such as  water diversions  , stream flow regulation, forestry and  
          man-made barriers affecting migration. Of particular concern is  
          the loss and degradation of suitable freshwater and estuarine  
          habitat conditions for juvenile rearing and adult reproduction  
          (emphasis added).  

          That report continues: "However, in recent years, the primary  
          causes of population decline have been compounded by natural  
          environmental factors, specifically poor ocean conditions in  
          2005 and 2006, which led to low adult survival in the marine  
          environment and poor returns in both 2006-07 and 2007-08. In  
          addition, recent ongoing drought conditions have further  
          hampered population recovery through the adverse effects of low  

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          flow conditions on adult spawning and juvenile survival in  
          coastal watersheds."

          Many observers believe that northern California Coho salmon are  
          at great risk of extinction within several decades if the  
          current rate of decline continues. 

          Since 1986, DFW, through its Fisheries Restoration Grant  
          Program, has spent $250 million on 433 projects in northern  
          California to benefit Coho salmon. Of that, more than $100  
          million has been spent since 2004. 

             2.   Staff suggested to the author's staff and the  
               representative of the California Central Valley Flood  
               Control Association that a conversation with DFW about  
               routine maintenance of facilities and the best management  
               practices that might be developed may be useful. Existing  
               law has a current exemption for routine maintenance and  
               operation of water supply, drainage, flood control, or  
               waste treatment and disposal facilities following  
               notification to the department unless the work or  
               conditions affecting fish and wildlife resources have  
               substantially changes and those resources are adversely  
               affected by the activity under the agreement. Such a  
               conversation to see if things can be worked out should  
               occur prior to legislation on an additional exemption for  
               the routine maintenance and repair of facilities of  
               instream agricultural irrigation diversions as proposed in  
               this bill. 


          
          SUPPORT
          California Central Valley Flood Control Association
          California Cattlemen's Association
          California Farm Bureau

          OPPOSITION
          None Received

          
                                      -- END --

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