Existing law designates the Metropolitan Transportation Commission (MTC) as the regional transportation planning agency for the 9-county San Francisco Bay area, with various powers and duties relative to transportation planning, programming, and funding. Existing law requires the California Transportation Commission, when allocating funds for construction on the state highway system within the region under the jurisdiction of the MTC, to conform to the regional transportation plan and the schedule of priorities adopted by the MTC, but authorizes the California Transportation Commission to deviate from the MTCs plan and schedule because of an overriding statewide interest. Existing law describes the authorized routes in the state highway system, which includes the routes in the interstate highway system in California.

This bill would, in this regard, delete a specific reference to the interstate highway system and instead refer solely to the state highway system.

Date of Hearing: April 25, 2017

ASSEMBLY COMMITTEE ON WATER, PARKS, AND WILDLIFE

Eduardo Garcia, Chair

ABPCA Bill Id:AB 1427 (

Author:Eggman) – As Amended Ver:March 21, 2017

SUBJECT: Water: underground storage

SUMMARY: Allows stored groundwater to be declared a beneficial use for purposes of water rights. Specifically, this bill:

1. Revises the beneficial use doctrine for water rights to additionally provide that certain uses of groundwater storage constitute beneficial use. These include:
   1. Protection of water quality.
   2. Recovery of groundwater levels.
2. Provides that the forfeiture period of a water right does not apply to water being beneficially used, or being held in storage, for a later use.

EXISTING LAW:

1. Recognizes that water resources belong to the people of the state but that individuals can hold rights to use water.
2. Recognizes two primary forms of water rights:
   1. Riparian rights, which are based on applying water from a stream or watercourse to adjoining land; and,
   2. Appropriative water rights, which attach when an entity, whether or not it borders a water course, is the first in time to divert the water and use it in a way that is both reasonable and beneficial.
3. Specifies that any portion of an appropriative water right that is not used beneficially during a five-year period may be considered abandoned. Technically, it means that volume of water reverts back to the public and may be available for use by others.
4. Allows water that is stored underground to be considered to have been beneficially used if the following three things happen:
   1. The purpose for which the water was later used was identified at the time of storage;
   2. The use that was identified was considered beneficial; and,
   3. The water was actually applied to that use.

FISCAL EFFECT: Unknown

COMMENTS:

Author’s Statement.

Protecting groundwater and groundwater basins is critical for the environment, agriculture, and our communities. The need for groundwater recharge was recognized by the administration during discussions on the Sustainable Groundwater Management Act, but the beneficial use question was abandoned when a solution did not quickly materialize. The legislature passed the Act because we recognize as a state that groundwater and basins are a critical component of our water system. Currently, diversion to underground storage is considered a beneficial use only if the surface water is stored in the ground and then subsequently extracted for a consumptive beneficial use. The withdrawal and beneficial use of that stored water has to occur within five years or the right to that water is forfeited. This creates a perverse incentive, and fails to account for the fact that there is a need to recharge aquifers for reasons other than later consumptive use. There are inherent benefits to having water underground, including the protection of water quality and prevention of subsidence.

Groundwater Storage in California. Recent actions related to groundwater have focused on applying a growing body of science to the law. Groundwater remains the greatest water storage asset in the state. According to the Department of Water Resources, storage from all major reservoirs in the state totals less than 50 million acre-feet (AF). Groundwater capacity is estimated at between 850 million and 1.4 billion AF. As has been widely reported, however, this capacity figure is reduced by water quality issues. Salinity, chemical concentrations, and degradation of groundwater basins is a challenge to utilizing groundwater to the fullest extent possible.

Converting the status of water that is "parked" underground from an intermediary point on the beneficial use continuum into an end point has complex ramifications to the existing water rights system, and beneficial use doctrine, with far-reaching consequences.

Beneficial use is a fundamental principal of water rights law. It defines and limits, on an ongoing basis, the scope of an appropriative water right. It is the difference between a "paper" water right – a document asserting that an individual has the right to a specific amount of water, whether they have used it or not – and a "wet" water right, meaning a water right of continuing validity because the amount of water described has been reasonably, beneficially, and continuously used.

The difference between the two does matter. California is an arid state. The beneficial use concept was born out of recognition that economic opportunities, from gold mining to farming, are tied to the availability of water. It rewards those intrepid individuals who are "first in time" to put the water to use and gives them water rights senior to all others who come after. Later the doctrine was modified to prohibit the squandering or hoarding of water by limiting the legal right to only that portion that is used reasonably and continuously.

The seniority of a water right is important. In times of shortage the most senior water rights holder receives all of his or her allocation, and then the next most senior, and so on and so forth. The most junior water rights holders might receive nothing. Some junior water rights holders during the recent extended drought were required to cease withdrawals so that senior water rights holders would be kept whole.

This bill could potentially allow a senior water right to be created, enlarged, maintained, or all three, upon the assertion that a recharge of groundwater from overlying land occurred. There is no requirement that the action be deliberate or not otherwise a waste of water, such as from flooding a field or leaking from a ditch. A claim to the amount of water in recharge could then be sold or transferred. Perhaps more importantly, the portion of water diverted to recharge would be denied to downstream water users.

Supporting arguments: Supporters of a similar bill, AB 647 (Eggman), from 2015, which died in Senate Natural Resources Committee argued that it is necessary to "allow entities who wish to recharge an aquifer for the health of the basin, to do so without being at risk of forfeiting their water right." Supporters state that the policy of preventing water in underground storage from being considered abandoned after five years "will confirm into law what Californians already know: that groundwater recharge of surface water is not only a beneficial use of water, but a critical component of stabilization of groundwater basins throughout California."

Opposing arguments. Opponents argue that they support groundwater banking and conjunctive use programs and that for many decades, local governments have successfully managed some groundwater basins (particularly adjudicated basins) and have created groundwater banking and recharge programs in water banks like Kern Water Bank and Semitropic. Opponents state that they are unaware of any situation where existing law on beneficial use precluded groundwater recharge and management programs, and thus it is not clear why such a dramatic change in law is necessary. Opponents voice concern that this bill might effectively increase the overallocation of water in California and cause injury to existing water rights holders and other water users, including State Water Project and Central Valley Project contractors, as well as the state's salmon fishery and other instream beneficial uses of water.

Related Legislation.

SB 13 (Pavley), Chapter 255, Statutes of 2015, made numerous technical and clarifying amendments to SGMA and related sections of the Water Code.

AB 1390 (Alejo), Chapter 672, Statutes of 2015, streamlined legal processes used to assign water rights in adjudicated groundwater basin.

SB 226 (Pavley), Chapter 676, Statutes of 2015, establishes special procedures for judicial use in determining rights to groundwater under SGMA.

SB 1168 (Pavley), Chapter 346, Statutes of 2014, Sustainable Groundwater Management Act.

AB 1739 (Dickinson), Chapter 347, Statutes of 2014, Sustainable Groundwater Management Act.

AB 647 (Eggman), 2015 (Died in Senate Natural Resources Committee), substantially similar to this bill, relative to groundwater storage and water rights.

REGISTERED SUPPORT / OPPOSITION:

Support

None on file

Opposition

Oppose Unless Amended

Alameda County Zone 7 Water Agency

Antelope Valley East Kern Water Agency

Coachella Valley Water District

Cucamonga Valley Water District

Metropolitan Water District of Southern California

Mojave Water Agency

Three Valleys Municipal Water District

Westlands Water District

Analysis Prepared by: Catherine Freeman / W., P., & W. /

Date of Hearing: May 3, 2017

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez Fletcher, Chair

ABPCA Bill Id:AB 1427

Author:(Eggman) – As Amended Ver:March 21, 2017

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill revises the beneficial use doctrine for water rights to provide that certain uses of stored water while underground constitute beneficial use. These include but are not limited to: a) the protection of water quality; and b) the recovery of groundwater levels.

This bill also provides that the forfeiture periods of a water right do not apply to water that is beneficially used in the aquifer, or being held in storage for later beneficial use.

FISCAL EFFECT:

1. Increased annual ongoing State Water Resources Control Board (SWRCB) costs of $280,000 (Water Rights Fund) to process applications for water rights permits, temporary permits, and change petitions to add groundwater recharge as a beneficial use.
2. Unknown increased costs associated with potential increases in enforcement and litigation costs to respond to allegations of waste and unreasonable use, unauthorized diversions, and impacts to public trust.

COMMENTS:

1. Purpose. According to the author, currently, diversion to underground storage is considered a beneficial use only if the surface water is stored in the ground and then subsequently extracted for a consumptive beneficial use. The withdrawal and beneficial use of that stored water has to occur within five years or the right to that water is forfeited. This bill recognizes there are inherent benefits to having water underground, including the protection of water quality and prevention of subsidence
2. Background. California's system for surface water rights recognizes both riparian rights and appropriative rights. Riparian rights are based on applying water from a stream or watercourse to the adjoining land. Appropriative rights allow a person to acquire a right to divert, store, and use water regardless of whether the land it is used on is adjacent.

An appropriative water right is based on the concept of "first in time is first in right" and is generally subject to the issuance of a permit by the SWRCB with the exception of pre-1914 appropriative rights (those water rights initiated before 1914 when the Water Commission Act took effect).

Groundwater storage or recharge refers to the injection of surface water into the aquifer.

1. Reasonable and Beneficial use. California's water law and policy, Article X, Section 2 of the California Constitution, requires that all uses of the state's water be both reasonable and beneficial. It places a significant limitation on water rights by prohibiting the waste, unreasonable use, unreasonable method of use, or unreasonable method of diversion of water.

A portion of an appropriative water right that is not used beneficially during a five-year period may be considered abandoned and available for use by others.

This bill prevents the reversion of a water right during a five-year period in which the water is used for groundwater recharge beneficial to the aquifer or for later beneficial use.

1. Prior Legislation. AB 647 (Eggman), of the 2015-2016 Legislative Session, was substantially similar to this bill. AB 647 failed passage in the Senate Natural Resources and Water Committee.

Analysis Prepared by: Jennifer Galehouse / APPR. / (916) 319-2081