Date of Hearing: April 24, 2019

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez, Chair

ABPCA Bill Id:AB 448

Author:(Eduardo Garcia) – As Amended Ver:April 3, 2019

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

SUMMARY:

This bill grants owners of small stockponds built before January 1, 2019, with a water right for the principal purpose of watering livestock under specified conditions. Specifically, this bill:

1. Allows the owners of stock ponds built before January 1, 2019, with a size of less than 10 acre-feet (owners), to obtain a right to appropriate water for the principal purpose of watering livestock if the owner files a water right claim with the State Water Resources Control Board (State Water Board) before December 31, 2021.
2. Requires the State Water Board to assess a one-time fee to cover the reasonable administrative costs of the program, not to exceed $2,500 per owner.
3. Gives priority based on date of filing, and subject to provisions of existing law that allow owners to register for certification.
4. Allows the State Water Board to revoke a water right certificate under this section upon a finding that the water has ceased to be used for the purpose specified.
5. Prohibits owners of stockponds filled by a stream determined to be fully appropriated or likely to become fully appropriated from receiving water rights granted under the provisions of this bill.
6. Requires the State Water Board to establish and periodically update reasonable general conditions for the appropriation of water under this bill, including, but not limited to:
7. The appropriation is subject to prior rights.
8. All conditions lawfully required by the Department of Fish and Wildlife (DFW) are conditions upon the appropriation.
9. Diversion works shall be constructed and water applied to beneficial use with due diligence.
10. Allows the State Water Board to establish different conditions for specified coastal streams.
11. Requires the State Water Board to provide a written document setting forth the conditions, upon issuing a certification for a water right pursuant to this bill. Subjects the water right to the conditions at all times.
12. Provides this bill does not apply to segments of streams in tributaries to the Sacramento-San Joaquin River for which the director of DFW has proposed instream flow requirements pursuant to existing law. Requires the State Water Board to give notice to the holder of a water right that applied before flow requirements were proposed of any conditions DFW has determined are necessary when streamflow requirements are proposed.
13. Exempts small stockpond owners from any measurement and reporting requirements and instead requires the State Water Board to assume the declared capacity of a stockpond with a capacity of 10 acres or less is the total amount of water diverted annually.

FISCAL EFFECT

One-time State Water Board estimated costs of $175,000 (1 PY) for rulemaking to determine the fee schedule for applicants for permanent water right certificates.

1. One-time State Water Board estimated costs for processing certificate claims (filed between January 1, 2020 and December 31, 2021) estimated to be $1,575,000 (9 PY) over a three-year period.
2. Annual State Water Board estimated costs of $700,000 (4 PY) to regulate certificate holders through case-by-case proceedings and under the board’s public trust and reasonable use authority and updated general conditions.

All costs are from the Water Rights Fund. Some of the estimated costs will be offset by fee revenues. However, the funding will decrease to near zero in outgoing years. The ongoing costs of the program will need to be covered by other water right fee payers.

If budget authority to implement this bill is not granted in fiscal year 2019-20, costs will be borne by the Water Rights Fund before the fee revenues are generated. This will result in the redirection of existing staff to meet the requirements of the bill and possible delays in processing other unrelated water rights

1. DFW costs of an estimated $3.6 million (23 PY) per year for four years to process Lake and Streambed Alteration Notifications and Agreements and the associated increased workload in the Instream Flow Program.

This estimate assumes 1,000 Lake and Streambed Alteration Notification would be received per year for a four-year period.

COMMENTS:

1. Purpose. This bill is intended to allow owners of small stockponds to pay a one-time fee to obtain a valid water right in the form of a certificate in order to provide a pathway to compliance for those not holding a valid water right. According to the author:

Livestock stockponds are a critical component of most California ranches. Stockponds provide numerous environmental benefits such as promoting wildlife and livestock dispersion, protecting riparian areas, providing habitat for threatened and endangered species like the California tiger salamander, and providing water for fire protection.

Costs associated with the current registration program are currently placing a strain on the State Water Board. Significant fee increases will occur overtime in order to balance the costs to administer the program with the fees that are collected. As a result, compliance will be further strained. AB 448 is likely to result in a increase in revenue for the State Water Board in the short term based on increased compliance and reduce administration costs in the long term.

Given the environmental benefits associated with stockponds, it is in the best interest of California to offer a cost effective program while ensuring the State Water Board has proper oversight to protect senior right holders, including flows that have been allocated to the protection of natural resources.

1. Background. Current law provides for a registration process for stockponds with a capacity of no more than 10 acre-feet. The initial registration fee is set at $250 per pond with an annual renewal fee of $100. This bill gives priority to owners of registered stockponds who file for the permanent water right certificate.

Stockponds are small pools of water in open space settings traditionally used to water livestock (cattle, sheep, goats or horses). Stockponds are impoundments with small earthen levees or berms to contain the water. As ranching has evolved and changed over the years, the use of stockponds has diminished, with ranchers choosing to use troughs or other watering methods. Still, the use of stockponds is a critical overall component to the ranching world and overall ecosystem.

Stockponds can serve as the watering base for helicopter drops of water on wildland fires. They also can provide buffers in fire-prone areas and significant shelter for wildlife in extreme events.

1. Prior Legislation. AB 589 (Bigelow), Chapter 471, Statutes of 2017, provided an alternative method for measurement of water diversions.

AB 2357 (Dahle), of the 2015-2016 Legislative Session, exempted water diversion and uses for livestock stockponds from annual measurement and reporting regulations if the diversions are less than year-round. AB 2357 was held in the Senate Natural Resources and Water Committee.

AB 1905 (Alejo), Chapter 268, Statutes of 2014, expands the ability to hold two water rights registrations for the same water storage facility and adds fire protection to the list of allowable uses for livestock stockponds.

AB 964 (Huffman), Chapter 579, Statutes of 2011 provides a streamlined mechanism for small irrigation uses, as defined, to obtain a water right from the State Water Board by expanding the existing water right registration process to include those uses.

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

Date of Hearing: March 26, 2019

ASSEMBLY COMMITTEE ON WATER, PARKS, AND WILDLIFE

Eduardo Garcia, Chair

ABPCA Bill Id:AB 448 (

Author:Eduardo Garcia) – As Introduced Ver:February 11, 2019

SUBJECT: Water rights: stockponds

SUMMARY: This bill provides an alternative method for compliance with livestock stockpond water rights claims. Specifically, this bill:

1. Provides, for stock ponds built before January 1, 2019, and with a size less than 10 acre-feet, has a water right for the purpose of watering livestock, if that person files a water right claim before December 31, 2021.
2. Requires, as part of the one-time process, the State Water Resources Control Board (State Water Board) to assess a fee to cover the reasonable administrative costs of the program, not to exceed $2,500.
3. Gives priority based on date of filing, and subject to existing law.
4. Allows the State Water Board to revoke a water right certificate under this section upon a finding that the water has ceased to be used for the purpose specified.
5. Requires the State Water Board to assume the declared capacity of the stockpond under this section.

EXISTING LAW:

1. Finds and declares that it is necessary and beneficial to the state to clear up uncertain water rights for water storage which has been constructed for livestock watering use, including domestic and recreational use which is incidental to livestock use. (Water Code [WC] §1226)
2. Authorizes the State Water Board to issue a water right certificate to an owner of a dam or impoundment structure. The certificate serves as a valid water right to divert water to storage for the purposes of watering livestock, not irrigation, and could be revoked if the water ceased to be used for the stated purpose. Certain water rights, filed prior to 1997 were declared to have a valid water right. (WC §1226.1 et seq.)
3. Requires water right registration for small domestic use, including incidental stock watering and irrigation uses, a small irrigation use, and for a livestock stockpond subject to prior rights. (WC §1228.1)
4. Defines livestock stock pond to mean a water impoundment structure constructed for livestock watering use not to exceed direct diversion of 4,500 gallons per day, or diversion to storage of 10 acre-feet per year, as that use is defined by the board, and including impoundment for incidental aesthetic, fire protection, recreational, or fish and wildlife purposes. (WC §1228.1)
5. Allows a person to obtain a right to appropriate water for a small domestic, small irrigation, or livestock stockpond use upon first registering the use with the board and thereafter applying the water to reasonable and beneficial use with due diligence. (WC §1228.2)
6. Requires each person with a registration of water use to pay an annual fee according to a fee schedule established by the State Water Board, and registrations of water use are required to be renewed every five years.

FISCAL EFFECT: Unknown. This bill is keyed fiscal.

COMMENTS: This bill is intended to allow owners of stockponds with a capacity of no more than 10 acre-feet to pay a one-time fee to obtain a valid water right in the form of a certificate in order to provide a pathway to compliance for those not holding a valid water right. Essentially, this grandfathers in existing stockponds, using a streamlined program.

Author’s Statement:

Livestock stockponds are a critical component of most California ranches. Stockponds provide numerous environmental benefits such as promoting wildlife and livestock dispersion, protecting riparian areas, providing habitat for threatened and endangered species like the California tiger salamander, and providing water for fire protection.

Costs associated with the current registration program are currently placing a strain on the State Water Board. Significant fee increases will occur overtime in order to balance the costs to administer the program with the fees that are collected. As a result, compliance will be further strained. AB 448 is likely to result in a increase in revenue for the State Water Board in the short term based on increased compliance and reduce administration costs in the long term.

Given the environmental benefits associated with stockponds, it is in the best interest of California to offer a cost effective program while ensuring the State Water Board has proper oversight to protect senior right holders, including flows that have been allocated to the protection of natural resources.

Background:

What is a Stockpond? Stockponds are small pools of water in open space settings traditionally used to water livestock (cattle, sheep, goats or horses). Stockponds are generally less than 10 acre-feet of water (most are well below this size)—impoundments with small earthen levees or berms to contain the water. As ranching has evolved and changed over the years, the use of stockponds has diminished, with ranchers choosing to use troughs or other watering methods. Still, the use of stockponds is a critical overall component to the ranching world and overall ecosystem. Many a rancher has approached a stockpond only to see many forms of wildlife using the pond—from birds and deer to amphibians and other species.

Stockponds are also a key tool for firefighters—they serve as the watering base for helicopter drops of water on wildland fires. They also can provide buffers in fire-prone areas and significant shelter for wildlife in extreme events.

How Are Stockpond Water Rights Managed? Current law provides for a registration process for stockponds with a capacity of no more than 10 acre-feet. The initial registration fee is set at $250 per pond with an annual renewal fee of $100. These fees are likely to be increased in 2020 or later because the State Water Resources Control Board (State Water Board) has indicated that the cost of the program exceeds the total amount of fees collected.

What are the Co-Benefits of Stockponds Beyond Stock Management? The University of California Cooperative Extension (UCCE) wrote an extensive analysis providing the resource values of stockponds. In their letter, they state:

Although most stock ponds in California were developed to provide water for grazing livestock, they are increasingly recognized for their habitat value. Stock ponds provide crucial breeding habitat for two federally listed species, California red-legged frog (Rana draytonii) and California tiger salamander (Ambystoma californiense), and several other species throughout the Central Valley, Coast Range and the foothills of the Sierra Nevada range. … Historic amphibian habitat in California has been lost due to development and conversion to cropland, and the creation and maintenance of stock ponds by ranchers has been credited with maintaining amphibian populations in many places. … At Point Reyes National Seashore in Marin County, for example, there are over 120 breeding sites supporting thousands of frogs and most breeding site are stockponds on lands grazed by cattle (Fellers et al. 2004).

East Bay Regional Park District, in its discussion of the benefits of grazing animals on lands in close proximity to populated areas, state “ponds developed for livestock watering support large numbers of breeding amphibians, which also feed on the abundant insect life found in the surrounding grasslands. In many cases, these man-made stockponds provide replacement habitat for native amphibians since the natural water features that once supported them have been lost to development.”

In its March 2010 report, An Economic Analysis of the Benefits of Habitat Conservation on California Rangelands, Defenders of Wildlife states “Ranches in California’s Central Valley provide the last, best remaining habitats for many of what were wider-ranging species, including freshwater fish, wintering birds and waterfowl, invertebrates and mammals. These lands are also critical for wildlife adaptation to climate change.”

What Happens if Ranchers Choose Not to Register their Stockpond? According to the author, many ranchers are concerned that the fees are too high compared to the benefits of the stockpond. Faced with the cost of obtaining a water right under current law, some stockpond owners may choose not to maintain their ponds, or may remove their stockponds, resulting in the loss of the co-benefits enumerated above. For non-registered stockponds, this results in a lack of knowledge of the stockponds by the State Water Board, resulting in inaccurate accountings of water availability—a particularly concerning situation when curtailments occur.

Prior and Related Legislation:

AB 589 (Bigelow), Chapter 471 Statutes of 2017, provided an alternative method for measurement of water diversions.

AB 2357 (Dahle, 2016) would have exempted from the State Board’s annual measurement and reporting regulations water diversion and uses for livestock stockponds if the diversions are less than year-round. Held in the Senate Natural Resources and Water Committee.

AB 1905 (Alejo), Chapter 268 Statutes of 2014, expanded the ability to hold two water rights registrations for the same water storage facility and adds fire protection to the list of allowable uses for livestock stockponds.

AB 964 (Huffman and Chesbro), Chapter 579, Statutes of 2011, provided a streamlined mechanism for small irrigation uses, as defined, to obtain a water right from the State Water Resources Control Board (SWRCB) by expanding the existing water right registration process to include those uses.

Considerations: The author may wish to consider a smaller size limit for this streamlined stockpond registration program as a pilot to determine if this brings more stockponds into compliance. The author may also consider working with the State Water Board to determine if there are other ways of providing a pathway to compliance for non-registered stockponds.

Committee Amendments: None at this time.

Supporting Arguments: Supporters argue that streamlining the process for ranchers to obtain a water right for stockponds would both improve the administration of the state’s water rights system and would reduce stress on critical environmental habitat. They raise the issue that stockpond co-benefits include groundwater recharge, sediment management, waterfowl habitat, and, separately, fire suppression. Other supporters argue that the current registration fees are too high, and provide a disincentive to compliance, risking both information about stream flows and co-benefits.

Opposing Arguments: Those in opposition argue that this creates a “one and done” process in which the State Water Board must approve a water right for certain stockponds. They argue that the State Water Board, under current law, must review the registration of all water rights and must share the registration with the Department of Fish and Wildlife (DFW) for an opportunity to develop special conditions beyond the volume and use restrictions. These may include minimum streamflow requirements and water impoundment concerns on rivers designated as wild and scenic, among other considerations. Opponents argue that this bill ignores all of the approval criteria available to the State Water Board and the DFW, removes reporting requirements, and makes registration permanent with no renewal or review to ensure compliance, thus jeopardizing the public trust.

REGISTERED SUPPORT / OPPOSITION:

Support

Association of California Water Agencies

California Cattlemen's Association

California Farm Bureau Federation

Ducks Unlimited

San Luis Obispo County Farm Bureau

Opposition

None on file

Analysis Prepared by: Catherine Freeman / W., P., & W. / (916) 319-2096