Assembly Standing Committee on Water, Parks, and Wildlife

Good morning. We're going to begin the informational hearing for the Water, Parks, and Wildlife Committee.

Okay, we're good. And the mic is on. Morning. I'm going to start by sharing the digital information to ensure the public's access to the discussion. First, the hearing is streamed live on the Assembly's website for anyone who wants to tune in. Second, after the final panel, the committee will take public comment either in person here in room 444. If you want to come join us, or via phone if you want to provide public comment via phone. The call-in number for the hearing is eight.

Oh, it wasn't on. Do you want me to start over?

I know, everybody thought I was on. We'll start over. Good morning again. We're beginning the informational hearing for Water, Parks, and Wildlife Committee. I'll share logistical information to ensure public's access to our discussion. First, the hearing is being streamed live on the Assembly's website. Second, after the final panel, the Committee will take public comment either here in person in room 444 in the state capitol, or via the phone.

If you want to provide public comment via phone, the call-in number for this hearing is 877-692-8957, and the PIN is 131-5444. Please call in when you've heard the last witness on our agenda. The operator on the line will give you instructions on how to be placed in the queue. If you're calling in, please eliminate all background noise, which means muting the live stream broadcast on your devices to reduce sound issues. Now, let's turn to the merits of the hearing.

So I'll begin with opening remarks and then turn it to the Vice Chair, if he has them, and anyone else who'd like to discuss. So I want to thank all my colleagues who are here this morning bright and early on this rainy day, and our witnesses for taking the time to discuss how climate change is impacting our water rights system here in California. The weather patterns of the last two decades in California have been anything but normal.

We're technically still in the second-worst drought on record. It started just a few years following what previously had been the second-worst drought on record from 2012 to 2016. I know it's hard for many to believe, as it's pouring outside, that we're still in drought conditions. And recent research indicates that California and the entire Southwest has actually been in a mega drought since the turn of the century.

Also, since the turn of the century, we've seen an increase in temperatures of nearly three degrees fahrenheit and experienced our six hottest years on record since 2014. This begs the question of whether our water rights system, which still adheres to the fundamental principles put into place in the 19th century, is a system that can perform in our climate change present and our future. I realize some will say that just because something old, it isn't broken.

And I agree, there are times when what we set up originally still works. But it's not just that California's basic water rights system has not fundamentally changed in more than a century. It is also the fact that we're increasingly seeing signs that it's not functioning well and equitably here in California.

Emergency curtailments, temporary urgency change petitions and an inability to halt illegal diversions, long delays for new water rights permits, and an inability to take advantage of excess flows during atmospheric rivers and other examples point to the need for change and modernization. I know, as I've been told, this is not an easy conversation, but I think it's long overdue. I look forward to hearing different perspectives on how we can work together to modernize our water rights systems.

It is necessary for California's diverse communities, our economy, including and especially our agricultural economy and natural resources, that we get this right. With that, I will turn to my colleagues who'd like to make additional introductory remarks. Vice Chair.

Thank you, Madam Chair. We know we're facing challenges as we look at our weathering patterns, as we look at a 21st century, as we look at what we are able to do, especially with the technologies that we have. I know a lot of us are wondering how we can better manage the water that we're getting because we can't control when we get it, but we can control what we do when we get it.

So, I'm looking forward to hearing from the panelists and looking at new ways we can manage to do things in a smarter way. We know we must capture water when we have it. We must convey it; we must recharge.

But at the same time, we also need to give a chance for other regulations like Sigma and other things that are still relatively new and make sure that we're not setting up obstacles for these new things as they come online, that we're providing incentives for people to be good actors, and that we're also respecting historical land and water rights as well. And not fully shaking up the apple cart because we have a lot of people that depend on water deliveries and water infrastructure.

One of the key things that always concerns me when it comes to water is the fact that when you look at the ROI. We have a lot of people that are paying 100% of their water bill expecting an allocation and often get 0% in return. And water is the only business where you pay full price and can get absolutely nothing. So we need to look at how those allocations work and look at that as well as we move forward. Thank you.

Thank you. Any other members want to make comments? No. You want to get. Oh, yes, Assemblymember Bennett.

Just very briefly. Number one, I want to compliment you and the authors of this report. I think it was great preparation for this hearing. The four items that were identified in terms of major concepts, streamlining of oversight, improving accuracy and transparency of information, addressing environmental water needs, and increasing flexibility, are just spot on. We need all four of those things. Like you said, none of them are easy in this field. But almost everything seems impossible. Almost everything seems impossible until it's not.

And we're going to find that until it's not come true in California. And sooner or later, as the crisis keeps getting worse and it's better for us to be as proactive as we can. So thank you very much. I appreciate this.

Thank you, Assemblymember. And I want to reiterate your thanks to the staff who did an incredible job on the report and preparing for today's hearing. So, we'll move to our first panel. I think they are both appearing via live stream.

We're going to have Ellen Hanak, Vice President and Director of Water Policy and Senior Fellow at the Public Policy Institute of California, and Brian Gray, Senior Fellow of the Public Policy Institute of California, and they'll be discussing the 21st-century climate and our 19th-century system for water rates.

Thank you so much for the invitation. Can you hear me okay?

Yes.

Great. Okay. So, Madam Chair, Mr. Vice Chair, and committee members, really an honor to be invited to speak with you today. I'll just say Brian and I are here, but we prepared this testimony together with a third colleague, Jeff Mount. And what we're going to talk to you a little bit about today is just some of this context of how the changing climate is adding to the challenges of stressing the water rights system that we have in California.

Then, a little bit of illustration of what we've been seeing in the big Delta watershed, the Sacramento-San Joaquin River watershed, which is the source of water for most Californians. And then we'll talk about some what we think are kind of modest and pragmatic recommendations for ways to improve management both in dry times and in times of abundance, which are both things that your comments referenced in the beginning here and the committee's note referenced. So, next slide, please.

So first, just looking at how the changing climate is exposing weaknesses in our water rights system with respect to managing dry times or managing scarcity, which I think is probably what most of this hearing is going to focus on. It's important to know. Starting point, as the committee's note pointed out, California has a very volatile climate, actually the most volatile climate in the country in terms of year to year variations in precipitation.

So we're used to droughts, we're used to wet periods, but the projections are that we're going to have increased volatility and projections also of warming and of reduced snowpack and reduced runoff and of shorter, spikier wet seasons. So basically, drier dries and wetter wets. And we are already now seeing the drier dry part. So that's about managing scarcity. The last two droughts were droughts of record. That was in part because they were such warm droughts. So, warming is making droughts more intense.

And it's doing that both by reducing the availability of snow, but also by contributing to atmospheric thirst, which is basically sort of evaporative demand of the atmosphere, which is making soils drier, which is shrinking snow packs, which is making plants thirstier. And all of that is basically just meaning for any given amount of precipitation, we're getting less of it. We're also seeing more rapid shifts in conditions, so things can get bad very quickly in terms of drought conditions.

All of this means, and we'll get into this a little bit more later, that it requires more nimble ability to enforce and curtail water rights. The water rights system is designed especially for managing shortages and having that done in an orderly way. And we're just experiencing more acute shortages now. So we need more nimble ability to do this. Next slide, please. So now over to the managing abundance, which we're starting to see again in full force right now.

This is the sort of wetter wets question, and the models are projecting wetter and sort of spikier wets. We have seen definitely some record storms and some record conditions in recent years. It's too early to say that we're already in that phase of experience in terms of whether the record has really shifted toward wet or wets. But it is clear that we need to be doing a better job capturing more flows from big storms, in part just because of increased drought intensity.

And just the dries are getting drier. So we need to be able to take advantage of those wets when we have them. And a second piece of this is a new part of the landscape, which the Vice Chair mentioned is the Sustainable Groundwater Management Act, which means that there are many agricultural areas in particular that have deficits now. And capturing more flows from wet periods is one of the key adaptation strategies for managing that and getting groundwater basins into balance.

So all of this has implications for the water rights system, too, in terms of more nimble permitting of high-flow diversions when we have these big storms. We'll talk a little bit more about that in a minute, too. Okay, so next slide, please. So now I want to just give you a couple of illustrations from the Delta watershed.

And this is drawing from a study that we issued last year that was led by Greg Gartrell, where we looked at about 40 years of data from this watershed. So the whole Sacramento and San Joaquin river basin and the delta to look at basically what water was coming in, where water was going.

And one of the key things here in this watershed, which is the source of water for 30 million people, 6 million acres of farmland, and it's also home to a really important and threatened ecosystem. There's a lot of demand on this water. It's a very variable system, like California overall. So this just shows you in a kind of cartoon sketch a couple of recent years: 2017, which was the wettest on record in Northern California, and 2021, which was an extremely dry year.

And so, I want to go to the next slide now and talk first about this dry year. So these bars here are showing you just first explain so you can read them quickly. For 2017 and for 2021, that top line water sources, that's how much water was available in the watershed. Water uses is where the water went in terms of upstream use, use within the delta, and exports.

And then delta outflow is the amount of water that went out under the Golden Gate bridge into the ocean. And that includes water for maintaining salinity. That's what we call system outflow, to keep the water fresh enough for people to use it. Ecosystem outflow, which is additional water for managing ecosystems. And then that orange piece is uncaptured outflow. That's basically water above and beyond what's required for regulatory purposes. So, let's look at 2021 first.

What you can see there is that it was a dry year, not a whole lot of water sources. That's very short little bar there. The dark blue is water released from reservoirs. The light blue is the water that actually was runoff that fell into the watershed. And we say that this was a year that broke the water supply system of the delta of the Central Valley because 100% of that runoff was used upstream or within the delta.

So all of the water that was used for delta outflow, for maintaining salinity at a low enough level, for use for ecosystems, very small bit. And then a smidgen of uncaptured outflow, all of that had to come from reservoir releases as well as all of the amount of water exported. Clearly, something is off when that much, basically no water, kind of got past the delta that fell into the system from runoff.

And I'll get into the implications of that in a little bit in terms of our recommendations. So let's go now to the next slide. And here we're going to focus on 2017, that very wet year, and what we found in this analysis. Also, we looked at the three most recent wet years where regulations have been precurrent. So, since late 2000, 2011, and 2017. and 2019.

In all three of these years, there was a lot of that orange bar, that uncaptured outflow, meaning a lot of water was going out of the delta at times because it was above and beyond the regulatory needs and it was above and beyond the capacity to capture it. We looked at this specifically for exports and found that even under existing water rights and under existing regulations, there's capacity in these kinds of years to capture more water if there's the physical place to put it south of the delta; there was room at the pumps, there was room in the aqueducts, and there just wasn't the ability to capture all of it. So that could have, in these different wet years, been anywhere from 400 to 800,000 extra acre-feet of water. But there's also clearly additional water from high-flow storms that could be captured upstream and recharged into groundwater basins. And this is the same kind of discussion that we've been having this year with folks now, especially with Sigma, the Groundwater Act.

They're really looking, people are really very mobilized to try to do additional capture of water from large storms, and we're improving on that, but we're not quite there yet, so let's go to the next slide. So, we want to acknowledge that there has been some important recent progress on adapting the Water Rights Administration to changing conditions. We think more work is needed, but it's important to know that things have been moving. And some of this has been really thanks to support from the Legislature.

So in 2014, in the midst of that record drought, back in the last decade, the water code, Section 1058.5, was amended to explicitly, for the first time, explicitly authorize the State Water Board to issue emergency regulations for curtailment. And so that's really important. And it's been important for the board's authority to do that. In these latest droughts that we've had, it does have some limitations that we want to flag them.

One of them is that the board can only step in this way if there's been an emergency drought declaration by the governor or if we are in a critically dry year that's preceded by at least two dry or below normal or critically dry years. So, in other words, it can't be until at least the third year of dry times. And then there have also been changes in measurement and reporting requirements that the legislature enacted in 2015 under SB 88.

That's been important, although compliance here has been a challenge on the abundance side. Managing abundance, the State Water Board has created new, streamlined permitting guidelines for high flows, in part with some support from legislative guidance on some things. But there are still some uncertainties about this. So we have some recommendations to also kind of tighten this up. Next slide, please. And now I'm going to run through, we've got a set of recommendations both for scarcity and for abundance.

I'm going to run through them quickly and then pass the word over to Brian, who's the legal mind in our team, and he's going to give you a little bit more thought on this. So, first, recommendations for better managing scarcity. The first is that we recommend that the legislature expressly authorize the State Water Board to enforce and, if necessary, curtail all water rights, including riparian and pre-1914 appropriators.

The note from the committee staff summarized that nicely in terms of the different authorities that the board has, and the board has, under court rulings, been found under Section 1058.5 to have the authority to curtail riparians and pre-1914 appropriators. But we think it would be good to clarify this in the water code as well. Same thing for groundwater rights that significantly affect surface waters. The second recommendation is to enable the board to respond more quickly to changing conditions.

And this one is a simple kind of additional tweak to Section 1058.5, which is to remove those two triggers that I just mentioned so that the board could, in its judgment, step in as things evolve quickly. And just to highlight how important this is, that year 2021 that I showed you, which we say kind of broke the delta's, the Central Valley's water system, in that all of the runoff was used upstream or within the delta. That's a year that was only the second dry year.

2019 was a very wet year, so that year would not have qualified as dry with enabling the board to step in with that trigger, except that the governor did step in with an emergency declaration. So the third now is creating incentives to improve measurement and reporting. And this is kind of building on SD 88 from 2015, which requires measurement and reporting. Compliance is okay but not great. And the frequency of reporting that's required is not great. It's annual reports of monthly diversions and use.

We're suggesting that the board should have more flexibility to require more frequent reporting. In some situations, especially in drought, much more frequent reporting is needed, and even potentially, in some cases, real-time measurement. The second piece of this is a suggestion to have a complementary approach of basically incentivizing diverters to provide the kind of information that's really needed to do a more comprehensive job on this.

Basically requiring diverters to prove both the existence of a valid water right and the lawful exercise of that right under current conditions. And that's especially talking about riparians and pre-1914 appropriators. And then the fourth recommendation here really goes beyond the Water Rights Administration issues that we're talking about here.

But we thought it was important to mention for you in our delta study, what we found is that we are now at a point where some long standing senior contracts that both the Central Valley project and the state water project have with folks. They established these for some folks who had pre-existing senior water rights in the project areas. And those contracts have very sort of tight requirements on what needs to be delivered.

And those limits are at this point, too high relative to the kinds of conditions that we're starting to experience in this watershed in dry times. So, in 2021, it's quite likely that meeting the obligations of those contracts exceeded what those folks would have gotten under their preexisting water rights, just given how tight things were in 2022. Conditions on the Shasta side of the Sacramento Valley were so dire that folks actually went into negotiation.

The CVP settlement contractors negotiated a one time extreme cutback in the deliveries that they got under their contract because there just wasn't the water available. We're suggesting it's going to behoove all parties to just revisit these contracts and renegotiate them, recognizing the seniority of those underlying rights but still putting more order into the system so that we don't need to have ad hoc negotiations when things get dire. So, next slide, please. And now, on the abundance side, a few recommendations are here.

The first is a recommendation to explicitly empower the board to administer a special permitting system for high water flow. So basically, the board has been doing this. We think it does have authority, but it would be useful for this to be explicitly stated by the legislature. The second is developing water-specific high-flow diversion thresholds. Right now, the board has set a default at daily flows at the nintieth percentile. Some other conditions along those lines. That's a good starting point.

But watershed by watershed, sometimes that could be too high, sometimes that might be too low. And so we suggest that the board, working together with DWR, which is doing a lot of deep work on these issues, together with stakeholders in the watersheds, could determine thresholds by watershed. The third is confirming that recharge with high flows is a beneficial use. This has been a really contentious issue and one where I think a lot of folks don't recognize what the board is doing.

The board has stated that recharge per se is not a beneficial use, but it has been interpreting, building on your law, AB 658, from 2019, it's been building on to acknowledge a variety of in-place beneficial uses of stored groundwater for addressing various kinds of undesirable impacts of groundwater overdraft. And it would just be useful to confirm that and clarify it for everyone. And then, finally, as with shortages, it's important to act quickly when storms come.

And so here we're suggesting facilitating upfront, programmatic permitting so that the board can quickly step in and approve something when the storms are there and giving folks the capacity to step in and divert the water and recharge it. And with that, I'm going to pass the word back to Brian, and maybe if you could go back to slide eight, please.

Great. Well, thank you, Ellen. Madam Chair and ranking member Vice Chair, members of the committee, thank you very much for having us. Thank you for accommodating us and letting us testify remotely as well. I want to say also that we have been doing a lot of work on several questions that you raised in your opening statements. We have issued a series of reports on managing water for fish and other environmental uses more effectively and more efficiently.

We've also done several, a series of studies on managing water in the San Joaquin Valley, specifically addressing the problems of changing land use, chronic water shortages, as well as implementation and compliance with SGMA. We're not going to talk about any of that directly today, but I just wanted to highlight that that work is there. We would be happy to meet with members of the dommittee informally or the committee. We'd be happy to come back and talk about those things as well.

So what I want to do is just add a little bit more context to the recommendations that Ellen has just highlighted. We also describe these recommendations in more detail in some additional notes that accompany our written testimony, so if you'd like to refer to that if there's anything that we don't cover explicitly. So, first, on the recommendations for better managing scarcity. The first relates to the scope of the State Water Board's curtailment authority.

And there's been confusion over the board's authority to curtail the exercise of water rights, as well as classes of water rights during drought. And this confusion has arisen, I think, for two reasons. First, the board has used two different statutes to curtail water rights, sections 1052 and 1058.5, and the courts have issued differing opinions on the scope of the board's curtailment jurisdiction.

These cases are not necessarily inconsistent, but we think it would be very helpful for the legislature to clarify that the board's enforcement and curtailment authority applies to the exercise of all surface water rights, including riparians and pre-1914 appropriators who are statutorily exempt from the board's general permitting and licensing jurisdiction. As Ellen noted, these water rights account for about 35% of California's surface water withdrawals, and on small streams, these non-permitted rights often predominate.

And I think it's fair to say that the board simply cannot get a handle on water use and enforce the existing priorities of water rights unless it has more comprehensive authority. We also think that the board should have clear enforcement and curtailment authority over a limited class of groundwater rights, specifically, those users whose pumping may significantly affect the volume or the flow of water in hydrologically connected surface streams.

The board has asserted this type of authority over some groundwater right holders in the Russian, the Scott, and the Shasta river systems based on the board's findings that their wells effectively divert water from the rivers themselves. But statutory clarity is essential in this area. Again, the board has been hamstrung, I think, by some of the controversies over the scope of its authority, and we think the legislature could play a very constructive role by helping to clear this up.

The second point relates to the timing of the board's curtailment authority, and Ellen mentioned these two triggers where the board's authority under Section 1058.5 comes into play, and that's the gubernatorial declaration of a drought emergency or a critically dry year immediately following two or more dry years themselves. And we think these triggers are problematic for two reasons. The first is that conditions that warrant curtailment may exist in some watersheds well before the governor declares a regional or statewide drought emergency.

And second, as we learned from the past two droughts, water supplies can become critically scarce even in years that are preceded by years of relative abundance. So, we think the legislature could strengthen the board's ability to enforce the constitutional waste and unreasonable use mandates and allow it to respond more quickly to water shortages by simply eliminating these triggers. The third point here relates to the lack of current and accurate information on water rights and water use.

We've heard from a number of members of the board, staff, and other parties who've been frustrated that the board simply doesn't have adequate information about water rights and water use to exercise its enforcement and curtailment authority in times of drought. And so we have a couple of ideas here. The first is the legislature could build on SB 88 monitoring and reporting requirements by allowing the board to require more frequent reporting as warranted by current or projected hydrologic conditions.

This could be weekly reporting; it could be daily reporting, and it could be monthly reporting, depending on the circumstances. A second and complementary approach, we think, would create incentives for water right holders to gather and report accurate information to the board. And so we would urge the committee to explore legislation that would place the burden of proving both the existence of a valid water right and the lawful exercise of that right on the water right holder, again, in enforcement and compliance and curtailment proceedings.

The latter requirement, relating to the lawful exercise of the water right, would include a requirement to show evidence that the diversions do not exceed the volume or the timing authorized by the water right, evidence of compliance with the place of use and purpose of use, limitations on the water right and evidence that the diversions are neither wasteful nor unreasonable under current hydrologic conditions, all of which are required by the law.

But we think shifting the burden of proof to the water rights holders would do several things. It would create incentives for non-permitted water rights holders to seek confirmation from the board of the validity and extent of their water rights. It would also create incentives for all users to install technology that would enable them to prove the valid exercise of their water rights.

And it would relieve the board of really the immense burden of investigating and attempting to monitor the exercise of all water rights across the state's various watersheds, especially during times of drought. Excuse me, the fourth note on this slide, as Ellen mentioned, really doesn't involve legislative action. And so, I'm just going to skip it in the interest of time and move on to the next slide, please, and just provide a little more details on managing water during times of abundance.

So, if we could have the next slide up, that would be great. Thank you. So, as Ellen mentioned, in 2019, the board created a special permitting guideline for the diversion of high water flows for groundwater recharge. And the guidelines build on AB 658, which also was enacted in 2019.

But most of the high-flow permitting is really the board's own creation, and we believe it would be useful for the legislature to confirm the board's authority to issue special permits for the diversion and storage of high water flows. If the committee chooses to explore this, we want to highlight three factors that we think are particularly important in such legislation. And the first is the definition of high-flow events.

And again, Ellen mentioned these two triggers, and the one has provided the most controversy has been that diversions are permitted when daily stream flow at the point of diversion is above the 90th percentile, with diversion rates limited to 20% of the total stream flow at that point. And that criterion has been particularly controversial for a number of reasons. I think, in part, it's because it's based on a general risk analysis that really didn't consider hydrologic and ecologic conditions within specific watersheds.

Yet some type of dividing point for triggering this program is important because this diversion threshold serves a couple of very important interests. First, it protects existing water users by limiting their high-flow diversions to water that has not previously been appropriated and, therefore, can be lawfully claimed by existing senior water rights holders. And second, it protects water quality, fish, and other in-stream uses by ensuring that the new diversions don't unduly diminish the ecological services that are provided by seasonal high flows.

And so we recommend that the committee consider legislation, as Ellen mentioned, that would direct the board to engage with the Department of Water Resources and other interested parties to look at this question by individual specific watershed, focusing on the watersheds that are likely to be the sources of future high flow diversions. And then, based on this analysis, the board would set new diversion thresholds for each watershed.

The 90th percentile threshold, which exists statewide today, could continue as the general interim standard until the board publishes individual criteria. The second point here relates to the diversion of high flows and storage as of beneficial use. And as Ellen mentioned, section 1242 of the water code states that underground storage of surface water is a beneficial use, but only if the stored water is thereafter applied to a defined beneficial use.

And in its 2019 guidelines, the board defined beneficial use to include a variety of in place beneficial use, excuse me, from underground storage, and these include prevention of saltwater intrusion into freshwater aquifers, protection against subsidence and compaction of aquifers, and support of groundwater dependent ecosystems and other surface water resources.

And the board also encouraged groundwater sustainability agencies charged with implementing SGMAto develop underground storage projects using high flow diversions in order to address other undesirable results from groundwater overdraft as defined by SGMA, and to assist the GSA's overall compliance with SGMA sustainability directive. The general definition of beneficial use for groundwater storage has been a somewhat contentious topic.

We think in this area, the board's broader definition makes a lot of sense, and it would be helpful for the legislature to confirm this broad interpretation, at least in the context of the high flow diversion and storage program.

And then finally, as Ellen mentioned, as with enforcement and curtailment of water rights during times of shortage, rapidly changing high flow and floodwater conditions also require prompt action, both by the board and by parties that are seeking to divert high water flows when they are available and when they are still available. We believe that new legislation could further this goal by authorizing the use of programmatic, hydrologic, and environmental analyses.

These would be upfront analyses of various questions that relate to the program that the board could then use to review and approve specific high-flow diversion requests on an expedited basis, and the programmatic analysis would include input from DWR, Department of Fish and Wildlife, GSAs counties, and other relevant agencies and stakeholders. This programmatic analysis, we think, would be especially helpful for long-term permit applicants for high-flow diversions.

The analysis would better enable them to plan and develop the diversion, conveyance and recharge facilities that are needed to harvest and store high water diversions. It also would provide greater certainty to these parties that their investments in infrastructure will actually be put to use when hydrologic conditions permit. Programmatic analysis also would enable the board to determine in advance the conditions that have to be placed on the diversion and recharge projects to protect fish and other important public interests.

These interests could include the siding of groundwater recharge facilities near small community and domestic wells, as well as in areas that support groundwater dependent ecosystems, all of which may benefit from higher and more groundwater, higher and more stable groundwater levels.

Brian, I don't know if you have more slides, but if you could wrap this one up so we can go to questions.

I'm right at my conclusion.

Thank you.

Perfect timing. So if I could just have the next slide, I just want to point out the cornerstone of California's water policy, which is Article 10, section two of the constitution, and it has three directives that I think are particularly apt here today. The first is that the people of California when they approved this in 1928, recognized that the conditions of California are different from many other states.

And the general welfare requires that water resources be put to beneficial use to the fullest extent to which they are capable. And what this really means is that we need to promote allocated efficiency and use. It also stipulates that the water is limited to the water that is reasonably required for beneficial use, and the water rights do not extend to waste or unreasonable use. And again, this is a call for, again, efficiency, or relative efficiency, in how we use our water.

And the third directive indicates, again, that the legislature plays a special role in this area and that these principles should guide legislative actions. And in past years, the legislature has acted on numerous occasions to ensure that our laws keep place with changing hydrologic conditions, new scientific understanding, and contemporary public values. The predicted effects of climate change, many of which, as Ellen said, we're now experiencing, also require new legal and policy responses. So, with that, we'll be happy to answer any questions.

Thank you both so much for that presentation. Looking to see if any members want to open with questions. Mr. Bennett.

I have a quick question and then a quick follow up. Just comment with the area, the Water Board, my understanding, has a limited ability to regulate extractions of groundwater except where it affects surface water. Is that accurate?

Yes. In fact, the board's authority over groundwater, even hydrologically connected groundwater, the only explicit statutory authority for that is for the Scott River watershed and the statutory adjudication that was authorized by the legislature. In that case, the board, in several systems, as I mentioned, has exercised that authority essentially on the theory that the groundwater pumping so close to the river is tantamount to withdrawals from the river itself. So that's why we think it's an important hydrologic connection and we believe it would be really helpful for the Legislature to give more general authority to the board over that. We're not recommending general permitting authority over groundwater. We think that we need to really see how SGMA plays out before we would recommend a broader change.

And then, Madam Chair, if you don't mind, I'll be in and out some. And I just want to make sure I get this comment made.

I think this presentation, I think, really emphasizes how the fact that we have more flexible water, more variable water situation than we've had in the past with climate change, we're going to have wetter wets and drier dries, and an increased demand on the water with the atmospheric drought that they refer to, more variability means we need more flexibility on the ground to be able to move forward. And so I think these recommendations sort of emphasize that.

But when you try to move to more flexibility, there is an inherent resistance that comes from people, particularly in the water world. They don't want change. And I just would like to get this out there that in Ventura County, we've sort of, in a microcosm, dealt with many of these issues. Recharge, groundwater over depletion, surface recharge, how much can you take off of the rivers, et cetera.

And for people who are currently using water, the best thing that can happen, I think, to them is for us to get this greater flexibility and get it clarified to actually protect the current water users because the current system will put the current water users at greater and greater risk during these dry periods that we've seen.

And so I just would encourage people to be open so that we can have a really healthy dialogue about the changes we need to get greater flexibility to protect current water users and, of course, protect future water users and the public in general. Thank you.

Thank you, Assembly Member. Anybody else? Questions? Yeah, Assembly Member Ward.

Thank you. I really appreciate this overview and just had kind of two overarching questions. I wondered if you could respond just generally to those. I'm mindful you just mentioned, actually, in response to the last question about letting SGMA play itself out. But we know that, and I think, as mentioned in your report, too, working on groundwater management solutions probably is the most cost-effective way to store these opportunities as they come, especially in the deluge that they are.

And I'm wondering, yes, it's good to probably sort of update the statutory abilities for the waterboard to do to be more effective at doing what it does. Letting SGMA play out, are we wasting time right now when we should be trying to make the investments that we know we need to make right now to be able to produce more cost-effective solutions for water storage? Should we really be prioritizing this year's efforts on conscientiously making SGMA work quicker?

And then also, how does the Central Valley Project and federal infrastructure play into the Water Board's management and just generally California's management of water systems? Where does our authorities stop, I guess, in this coordination between these two systems, if at all?

Maybe I'll answer briefly the legal aspects and then I'll turn it over to Ellen. When I said that we should let SGMA play out, it was in the context of saying that we are not currently recommending that the legislature authorize the board to have permitting authority and licensing authority over all groundwater extractions, rather only those that are hydrologically connected and have a significant effect on surface streams.

Otherwise, I'll let Ellen answer the rest of the SGMA questions. On the relationship between California law and the federal Central Valley Project, the Central Valley Project Improvement Act of 1992 says explicitly that the Bureau of Reclamation, in operating the project, shall comply with all aspects of federal and state law, including all decisions of the State Water Resources Control Board. So there is extremely limited, if any, federal preemption of state authority as applied to CBP operations.

So maybe I'll chime in then on the SGMA piece a little bit more. SGMA was not intended to be implemented overnight because I think the legislature recognized that they were charting out a big assignment for folks in terms of developing new governance structures, developing accounts in many cases for the first time for their basins, and then figuring out what kinds of projects and actions to put in place in order to address undesirable results of groundwater use.

And you had a hearing about a year ago looking at the first groundwater plans that were submitted, and the Department of Water Resources rejected, sent a lot of them back for extra homework, let's say, and asked them to be revised, especially plans from the San Joaquin Valley, because they didn't meet all of the criteria that the department deemed they should. Those are now under review again, and I think we're going to be hearing the final word from DWR on those pretty soon.

But what's clear in looking at how implementation has been evolving is that these are works in progress, and people are not standing still. It's not like they submitted a plan and said, okay, I'm going to sit back and wait. They've been continuing to work on addressing undesirable results and on developing their projects and actions.

And the latest drought has really pushed demand management to the forefront in a number of the basins where they've started to do allocations and set up trading and all kinds of things, but pretty much 201 in these basins. They are emphasizing as a key priority storing more groundwater. So our recommendations here are really about enabling that to happen more easily.

Okay, thank you.

Thank you. Assembly Member Ward. I have a couple of questions. Oh, yeah, sorry. To the Vice Chair, because he has to...

Thank you, Madam Chair. I think my favorite thing hearing in here is the discussion about vital use for groundwater recharge. And this is something that definitely we need to look more at, and I look forward to hearing more information about because we all know we get these monstrous flows right now, and we've seen in the charts that a lot of this is going out to the delta.

And ensuring that we make a point as a legislative body that recharging the groundwater is a vital use will dramatically change what we're dealing with with reaching SGMA goals and overdraft basins and those things. So, as we move forward, I just encourage my colleagues to look at that and make that something that we talk about more often. Thank you.

That was what my question was going to be about, Mr. Vice Chair. So I'll segue right into it. So my question, actually, piggybacking on what the Vice Chair said, is there's no question that I see the benefit of groundwater recharge being a beneficial use in wet years like we're seeing this year. I'm wondering if there are downsides to that being the case in dry years, where we have a very limited resource that we are trying to ensure everyone gets as much access to as possible.

Maybe that's not an issue, but I'm just curious.

Again, Ellen will answer most of this, but legally, I think it's important to distinguish between the diversions, the right to, which kicks in during extremely wet years, and then the storage and storage as a beneficial use. Water stored high flow diversions stored in groundwater aquifers in a wet year will stay there during the dry years, and it will serve very important purposes, in fact, even more important general public purposes, if and when water users shift to increase their pumping from the groundwater basin.

So I think the big concern really should be limiting the diversions in the drier years. I mean, they're limited anyway by just the hydrologic available flows and do not focus so much on dry-year wet-year distinctions in looking at the beneficial use.

Of storage itself, that makes sense. And I will say to my colleagues who keep bringing up SGMA, we are working to put together an informational hearing. We had one last year, and looking at where we are now, a lot of these deadlines keep coming. And then my second question is, the Colorado River obviously is a hot topic in the water right now. And we know it's an overallocated resource. And my question is, do we sort of understand that about the Colorado River?

Do we have the same understanding of our own water here in California? Do we have an overallocation? Is it allocated properly under the water rights system? Do we even know the answer to that question? I don't know if you can provide insight on that.

Ellen, why don't you go ahead? And I'll...

We can only use the water that we actually have with surface water. That's kind of obvious. And when the reservoirs are depleted, they're depleted. Where we've been overusing water has been in the groundwater basins, where it makes sense to use more groundwater in dry years. But then you've got to get the groundwater levels back up again in wet years.

And the problem we've had is that we've been using too much in the normal years or the kind of middling years, and so only really recharging in wet years. And we do have to get better at using less, which is why demand management is part of the formula for SGMA. But the more we can store actively, the easier that's going to be in terms of adaptation in those regions which depend a lot on agriculture for their economy and their society.

Right. And I understand what you're saying about groundwater. I guess my question is, you had that chart up where you showed in, I think it was 2017, the very dry year if my recollection is correct, how little we were exporting from the delta. Right. It was little gray line, Teeny tiny. So my reading of that chart was during our dry rears to your point, when we don't have the surface water, we're exporting very little to people who believe they have water rights. Right.

I mean, that's my understanding of what's happening. And so you're saying we just don't have it. Well, yes, I understand that. But have we overalllocated? Do people believe they're getting the water that, in many, many years, we will not have?

This is the issue of the contracts that folks have, and it was mentioned, I think, by the Vice Chair, and you'll often hear about percentages of what's delivered relative to a contract. Face value: the folks who are getting lower deliveries are more junior. So within the projects, within the CBP and the SWP, the folks who have senior contracts are much more likely to be made whole than the folks who came more recently. So in a sense, we are curtailing on a regular basis in the delta.

The more junior contractors we're not doing it with the senior ones at this point. That's something that we point out is a weakness right now.

And if I could just add one thing on that. Our water rights system is based on seniority of right, with riparians at the top, followed by the senior most appropriators. Those rights were established, as Madam Chair, you said at the outset, in the late 19th and early 20th centuries; it's not at all clear that that allocation of water with those most senior rights comports with what the needs of society are today. Now, there are other priorities.

There are some statutory priorities that prefer, say, domestic use that create a human right to water. And there are regulatory priorities, water quality standards, endangered species requirements, the public trust doctrine. But I think it's a very good question for the Committee to ask, or at least keep in the back of your minds, is: Do we have an allocation that makes sense and comports with the realities of the early 20th century, 21st and moving into the middle of the 21st century?

Thank you. And I just wanted to add an equity lens to that for those that are new to the committee. We did a hearing last year on Native American tribes and access to water. And given our history and when this was all created pre-1914, our Native Americans are not, despite the fact that they were the first people on the land, our senior water rights holders. Right. And so they are getting their water in different ways and adjudications and the like, which take decades.

And many came to us and told us they have no access to clean drinking water. And that's just one example of an underrepresented community that this water rights system does not take care of. Right. And so when we talk about junior water rights holders and others not having access to water, we need to make sure that we're thinking about what that means, given the dynamics pre-1914 and today.

Thank you.

So we're going to move to panel two, "How do we modernize Water Rights administration." On this panel, we're going to have Eric Ekdahl, Deputy Director of the Division of Water Rights at the State Water Resources Control Board, and, and Yvonne west, Director, Office of Enforcement of the State Water Resources Control Board, and they're both here in person. Welcome. I don't know if you have it. You guys can decide who goes first.

Good morning. Is the microphone on? Sounds like it, yes. Great. Thank you. Thank you. Chair and Members of the Committee, my name is Eric Ekdahl. I'm the Deputy Director for the Division of Water Rights at the State Water Resources Control Board. I'm joined today by Yvonne west, our Director of the Office of Enforcement. We're going to run through a very high level overview of kind of what we've been doing so far to modernize water rights within the constructs and kind of authorities that we already have.

If you can, go to the next slide. So I think it's worth maybe taking a quick second to say what do we mean by water rights modernization? A lot of times we put that word out there, and then immediately we get a bunch of either press or blog posts or something that kind of express a lot of alarm and concern.

What we're talking about is updating this system created over 100 years ago in the Water Commission Act, and not looking at wholesale reform but providing additional technical tools, additional technical resources, staffing resources so that we can work within the existing system, that we have to make sure that our water rights system does, in fact, work like it's supposed to.

And so, really, we're looking at reinvesting and making sure that we can actually do what the water code already says we can do and making sure we can do it as efficiently and effectively as possible. So the subsequent bullets are working within the existing system and looking at how that existing system dictates the legal framework that we have to work within. There's a statement at the bottom there: timely and accurate data impacts how we plan for a resilient future.

And that's going to be a common theme that I'll come back to is data and accurate data and timely data. And that's really the kind of key for what we mean by modernization, although it's probably the least exciting way to go about talking about something. Let's double down on accounting is not really a great selling point, but that's kind of what we're focusing on. Next slide, please. It's also probably worth it to take a quick moment to talk about the types of water rights.

This is, again, a very simplifying slide, but represents the very complicated nature of California water rights. We have post-1914 appropriate rights for reference. Those are the only types that the board has direct permitting and regulatory authority over under most circumstances. So pre-14 appropriative, overlying groundwater, riparian, prescriptive, adjudicated, federally reserved Pueblo. We generally don't actually have much authority over those. There are circumstances, drought emergencies, when certain levels of authority can be applied or not.

Roughly 45% of the state's water rights by number fall into the pre-1914 appropriate and riparian category and about 30% to 35% by volume. On another note, it's only the post-1914 appropriative rights that pay water rights fees. Pre-1914 and riparian do not. Next slide, please. So what are we doing now? Specific to kind of this doubling down on accounting? The board, in 2021, working with the legislature and the Administration, received about $30 million to reinvest in our water rights data management system.

We are developing a project called Updating Water Rights Fata for California or Upward California, looking at replacing that kind of old and outdated system. Digitizing our paper documents. We're still a paper-based system, and there are about 7 million pages of records. The only way you can access them is to come to the CalEPA building, go to our file room. We have some giant Rolodex machines. They're pretty fantastic to look at.

Amazing in many ways, but it's an old and outdated system, and it really adds to this equity issue. How easily can anybody, whether you're a water right holder or interested member of the public, access those records and actually get to them? So the start of the upward process will start digitizing. I think there's an additional budget request to continue that process.

But looking at how we also do electronic content management, moving to kind of a map-based or GIS or geospatially driven system so that you can click on a point and say, "Here's the water, right? Here's the data associated with it. Here's the diversion data." These are all things we can't do right now. Additional resources were highlighted in the water supply strategy released in August of 2022, which really identified areas to modernize in California's water rights system.

Looking at drought planning, investing in our supply and demand assessment tools, looking at the tools that we used in the Russian River specifically to kind of identify who should be curtailed, looking at water availability and demand, looking at telemetry research and funding for a pilot project to look at how telemetry could work and provide us that better and more real-time data and then increased enforcement.

And so we did see between the July and August portions of the budget last year specific allocations for each one of those bullet points going forward. And so those are things that are actively underway and we are working on now. Next slide, please. So what does this get us? It gets us better data, but those better data points lead to better decisions. We can do kind of more real-time data-driven decisions, especially during drought, especially during times of high flow as well.

And it's really that data that's key to planning and managing and providing that access to everybody. It also leads to innovative local solutions. We'll hear from the Russian River flood control district, I think, later in the panel this morning. But I have one more slide on it in a bit, and it allows the development of local kind of innovative approaches that otherwise wouldn't be an option. Next slide, please. So this is a complicated table, but I wanted to point out kind of why this is necessary.

And we have two watersheds, the San Joaquin River and the Sacramento River. And we look at the number of claims. What do I mean by claim? It's a riparian or pre-1914, right? We don't actually have the authority to verify whether those claims are real or not, so we call them claims. And in 2018 and 2019, we have some diversion data that was reported by just the largest diverters. So there are about 2600 pre-14 riparian total diversions rather, claims in the San Joaquin, about 4000 in the Sacramento. If we just look at a subset of those, the largest amount look at the Sacramento River in 2019. Specifically, the user reported diversion data reported 29 million acre feet of diversions. Well, that math just doesn't work. There was 29 million acre-feet of flow out of the Sacramento and probably all of 2021 and maybe 22 combined. So what went on? What was actually happening?

Well, when we go in and kind of take a look at the data, it's full of errors. And most of those errors are probably not intentional. It's a little thing like missing a decimal point. So instead of 1000 acre-feet, you report 10,000 acre-feet. The bigger one is gallons versus acre-feet. So, one acre-foot is about 325,000 gallons. Well, imagine if you report that in acre-feet instead, and pretty soon, you're off by a very substantial amount.

So when staff actually go in and look at it? Well, it's probably closer to 4 million acre-feet of diversions in 2019, or a factor of. Well, they were off by 86%. So these are issues that repeat year after year after year, and it makes it very difficult to actually go in and figure out who's using water accurately. Where is it being used, and when is it being used yet? That's kind of the key component of California's water rights system.

We have to have a better understanding of when it's being used where it's being used, especially if we head into an era of climate change with drier dries and wetter wets. And so by investing in the data system, we're hoping to get better QA/QC, quality assurance protocols that kind of prohibit some of these just common errors. But it will lead to a substantial reduction in staff time to go back in and clean up this data and just fix it over time.

It'll take a couple of years, but that's one of the kind of low-hanging fruits that we can go after, and, I think, become much more efficient, much more quickly when the system is in place. Next slide, please. What does this look like in practice? When we are able to invest the time and the staff and pull together accurate data, and work with stakeholders and diverters at the local level, we can do innovative and flexible things.

And in the Russian River, we did allocate a couple years worth of staff time and developed in cooperation with diverters at the local level. And just to be very clear, this would not have happened without the local cooperation and investment by their staff and time. Come up with a voluntary water-sharing program that effectively forestalled curtailments because users were able to divert and share amongst themselves and figure out how to do that accounting amongst themselves. Next slide, please. So what's next? We're working on the data.

We're working on the accounting. I think we do need to recognize that existing processes take a long time. There's a lot of due process, there's a lot of just steps that are inherently required. We also have to respond to workload as it comes up. So we've been in a drought emergency for a couple of years. We had to redirect about 85% of the division to emergency drought response, and that was critical work, and it was important to do so.

But it does mean that other things are paused or stopped during that time. The third bullet gets to, I think, some of what we heard from the previous presenters and some of the questions that followed. Most water outside of flood flows is probably spoken for or allocated in some respect. It's very, very complicated to figure that out, especially when you're dealing with data sets that are not robust or accurate.

And you have to spend a lot of time going back and looking at what is the actual demand potential water. Right. Applicants have to do the same thing, so it affects their timelines as well. And if we do look at different approaches, if there is a request to look at more structural changes to how we operate the system, that's going to require more structural changes to existing laws and regulations, and that will come with potential impacts to diverters in the environment.

Could be positive impacts, could be negative impacts. Depends on what the scope and scale of those structural changes are. And with that, I'll turn it over to my colleague to talk about enforcement.

Good morning, Madam Chair, members of the committee. Thank you. My name is Yvonne West. I'm the Director of the Office of Enforcement at the State Water Resources Control Board. If we could go to the next slide, please. In looking at and determining how to modernize our enforcement program to protect our water rights system, it's important to look at how our system operates in times of scarcity when we're talking about dealing with our future climate fluctuations and difficulties.

So, in looking at the 2021 and 2022 drought response under the governor's emergency drought proclamation, the State Water Board adopted four emergency regulations. And these emergency regulations authorize the issuance of a number of orders to protect in stream flows in key watersheds to curtail water diversions and use in the order of the water right priority, and provided authorization to issue orders seeking additional information relevant to determine compliance with those emergency curtailment orders. Next slide, please.

So, in ensuring compliance with the emergency curtailment orders, there was an unprecedented level of enforcement and field presence. The division conducted inspections, required enhanced reporting, and conduct enforcement when appropriate in these watersheds. The division has a variety of tools at its disposal when it has to respond to a violation. If you can go to the next slide, please.

In responding to a violation, the division has current authority to issue cease and desist orders for violations or threatened violations of permit and license terms, unauthorized diversions, or regulations such as the emergency regulations I just referenced. Unfortunately, these cease and desist orders are not final, statutorily, are not final until 20 days has lapsed an opportunity to request a hearing. If that hearing isn't requested, the order becomes final. Or if a hearing is requested, there is a need to hold the hearing and issue a final order, and at that point, the cease and desist order becomes final and enforceable. The division also has administrative civil liability authority for a number of different types of violations, again including unauthorized diversions, failure to file statements, a lack of response to those information orders. These violations can vary in both process. In imposing the penalties and the potential penalty. They can vary from anywhere from $500 today to $10,000 per day.

And then some of those violations in between even have some volumetric penalties under specific hydrological conditions and in times of drought. Another of its tools that we have in the toolbox is information orders. And this was something that I referenced earlier; was relied on in those four watersheds to require enhanced reporting. Our authority to issue those orders is explicitly contained within the emergency regulations that were adopted by the board. And then a tool that we don't have currently is interim relief, immediate interim relief.

The state board cannot administratively issue something similar to a temporary restraining order or preliminary injunction. So with these tools, the division in those four watersheds using these tools was really successful in its drought response and saw some on-the-ground benefits for those watersheds, some real flow improvements in certain areas, and did obtain some significant compliance with requests for information, verification of curtailment, things along those lines. However, there were challenges even with these tools. We were faced with many challenges during the most recent drought.

And if we go to the next slide. One of those challenges is really illustrated by the situation we had with the Shasta River Water Association this last summer. So, if you look at this chart, this black line on this chart shows the minimum stream flow requirements that were imposed on the Shasta River. This is a 50 CFS-level of minimum flow. It was intended to protect both fall-run Chinook salmon and threatened Coho salmon.

When the flows in the river dropped below this, 50 CFS diversions were curtailed. Based on their order of priority, the Shasta River Water Association was issued a curtailment order. And if you'll see on this chart, it's hard for me. I wish I had a pointer. I don't. But when you see that steep drop in the red line, those are river flows. And that steep drop occurred on the evening of August 17. Yeah, it started. When that drop started, the Division of Water Rights staff inspected it.

The very next day, the 18th, they issued the Shasta River Water Association a notice of violation. On the 19th, they issued a draft cease and desist order. Upon issuance of that draft cease and desist order, Shasta River Water Association had 20 days in which to request a hearing. During the first eight days is where you see all those diversions in that really low river flow there. It dropped the river down, and for eight days, they filled their member's ponds. On August 24, they ceased their diversions and you see the river rebounding back up to that 50 CSF level. Eventually, the cease and desist order was issued on September 12th after the 20 days. That was the day after the 20 days for the requesting a hearing lapsed without a request for a hearing. Subsequently, an ACL complaint was issued for a maximum statutory liability amount of $4,000, which was finalized and paid at this point. So here you can see the maximum total penalty that the state board could impose for these violations.

These intentional violations of their curtailment regulations was clearly not a deterrent. In fact, in the fall of 2022, the Shasta-Scott River watershed had 44 ongoing complaints related to unlawful diversion of water, and the public complaints in this watershed alone accounted for 25% of our water rights complaints statewide. So just turning with that, I just want to emphasize that the division has worked very hard, a lot of great effort, and a lot of great field presence, and we did obtain a lot of good compliance.

But moving to the next slide we saw, the Shasta River Water Association - can I get the next slide, please? Really was one incident, but it demonstrated a lot of the enforcement challenges that we face. Additional challenges that we face include the fact that investigation and enforcement are very time-intensive, very labor-intensive, and very resource-intensive. As we are talking about an increased system for need, flexibility, and response, there are a lot of procedures and processes that make that very difficult.

Our field presence alone is not enough to prevent violations. Our inspections are conducted on consent, and not every diversion can be inspected. We saw some really high diversion numbers on my previous slide in those key watersheds, but we hit a significant number of points of diversion and a significant millions of acres that represent a significant millions of acres of feet of water rights in those systems, but there are still many that we were unable to visit and to verify compliance.

So we really rely on the data. We really rely on that enhanced reporting. It's really important to verify compliance. And as we've seen, another challenge is that sometimes the economic benefit of noncompliance is significant, and it makes it very difficult to disincentivize and prevent intentional violations. In square city situations, as we had in 2021, there was a need for immediate compliance and timely enforcement. And our current cease and desist authority imposes procedural challenges that sometimes prevent the necessarily timely enforcement.

And then lastly, something we've heard through some of the other testimony here today: there are a lot of uncertainties surrounding both what water rights are being claimed and what the State Water Board's jurisdiction and authority is. Those legal uncertainties do provide some additional incentive to take water now and seek forgiveness or challenge enforcement later.

Even with all of those challenges, I do want to say that in modernizing the water rights system, the state board, in modernizing our enforcement system, is working hard within the parameters of our existing authority to find creative ways and efficient ways to overcome or at least minimize these challenges so that we can bring enforcement and obtain adequate and timely enforcement to maintain the integrity of the water rights system to protect our existing water rights holders and our natural resources.

It is a challenge, and I don't want to be overly negative, but a lot of the things that Eric, my colleague Eric pointed out, all of the data initiatives and the other work that we're doing all play into and will help us minimize these challenges. So thank you.

Thank you both. And I'm, as a former regulatory lawyer, I'm a little bit of an enforcement geek, so I appreciate your work. I think we like to put laws on the books, but we also need to enforce them. So I appreciate that. Anyone have any questions? You want to start off, Assemblymember Pellerin.

So when it comes to the water rights, you were saying that some are just claimed rights that you can't confirm.

Yeah, pre-14 and riparian rights. It goes back to the kind of water law established in the Water Commission Act of 1913. It was enacted in 1914. After it was litigated, it essentially clarified and stated that riparians and pre-14s are essentially grandfathered in, and they are outside the board's direct regulatory purview and oversight. And so they do have to report their diversion data. And there are certain things that they do have to comply with, but they don't get a permit from the State Water Board.

And those diversions have never actually been vetted and claimed or vetted and verified, whether through an adjudicative proceeding or through the board's permitting process. And so we refer to them as claims because they have claimed that they have a right and they've filed some amount of paperwork. So it's not like they're entirely outside the purview of the entire state's regulatory structure. But we don't have the same types of oversight authority. We don't have terms and conditions on those rights.

They're largely able to do what they claim they were always able to do.

So we do know who they are?

Generally.

Okay.

Generally, and it's important to note, like-

Maybe someday we could put that actually in a database.

It is in a database. So if you have a claim, you're supposed to file an initial statement of diversion in use with the State Water Board and we do have many hundreds or thousands of these statewide. But something like a riparian, there's no kind of use it or lose it provision. So you could have a parcel that touches a watercourse and has never diverted water, and tomorrow, decide that you're going to use your riparian claim and start diverting.

In that case, we actually don't know the full world of what could be out there. And we do believe that there is some amount of statement filers that haven't filed, people that should have but have not.

Another question, too, on this hearing process. So you give them a cease and desist. It's not final for 20 days, and then they could request a hearing. If they request a hearing, how soon does that take place?

So there's no statutorily required timing, and it is up to the administrative hearings office to schedule them. They can take anywhere from a month to six months to schedule and have a hearing. In an urgency situation, we could request a quicker hearing. We could not do that till after the 20 days. They have the 20 days to request the hearing, then it becomes final. That sometimes might be your quickest route because if there's not a requested hearing, then your draft cease and desist order becomes final.

The other option is to try to schedule a hearing quickly and then hold that hearing and wait for your decision and your final order.

And in the meantime, they're filling their ponds.

In the meantime, they're filling their ponds.

Yeah.

Okay. Thank you.

At $500 a day, you'll see a bill on that. I already introduced it. Did you have a question? Thank you. I might be taking care of it with your bill.

Back to the point of the $4,000 fine. Is this what your bill is addressing?

My bill does discuss fines. We will have that conversation. But if you have questions on it.

Yeah, obviously, that seems ridiculously low when you're siphoning off a ton of water for 20 days. So, are there recommendations about updating that and changing it?

And also to Assemblymember Pellerin's point of the hearing process, is there a way that that needs to be kind of updated and adjusted, especially considering that right now we are an ongoing drought, basically, and in pretty urgent need on a regular basis and need to act much more quickly than a hearing in six months when we're talking about water diversion.

Yeah. To speak to the current requirements, the current requirements do have that 20 day period. As the enforcement staff, we can ask for expedited hearings, take some time. Those penalties do go up once the cease and desist order is in place. Currently, they go up to 10,000 per day. Here, clearly, under the current authority, couldn't get there to prevent that eight days of diversion. We moved as quickly as we could under the existing statutes.

We are exploring how to get there within our current statutory structure in seeking a TRO or otherwise going to the Attorney General's Office to try to get some sort of more immediate expedited relief. It just really is a challenge right now as things are currently outlined. We do have some authorities. If this was a different type of person exercising their rights, if it was a permittee or a licensee, the potential penalties would have been higher, especially during a drought period.

We could have perhaps gotten volumetric penalties per gallon. There was a significant amount of gallons diverted during these eight days in this current period. Again, it comes down to some of those different treatment of different rights under the existing statute and what we can and can't do. So I'll leave it there.

Thank you. Kudos to your department how quickly you acted on that chart. I have to say we don't see that all the time in enforcement.

Well, this was a unique situation in that the Shasta River Water Association told us they were going to do this. Then they did it.

That was kind of them.

The reason I can talk about this is because they were very public about their motivation and there was lots of public discussion about why they did this and that it was an intentional decision.

Yeah. Now, there was a lot of press on it as well. Assemblymember Bennett.

Thank you. Number one, I appreciate you clarifying that the modification effort is not an effort at wholesale change, but that's just the modernization effort. Certainly other major changes are potentially supported by the Department of Water Resources, DWR.

So, just to clarify, where the State Water Board, Department of Water Resources - no, I know, I know. We often get confused and any kind of potential legislative change, we do work with our Office of Legislative Affairs and go through the regular procedures.

You have no authority to verify water rights at this point in time.

That's not quite clear. Again, it's very complicated, but we have no authority to verify the validity, verify the validity of riparian and pre-14 claims. Right. If it's a post-1914, yes. They've come in through a permitting process either by the board or our predecessor agency. And there are other circumstances where we do take a look and get involved sometimes through a court reference and other procedures. But for the most part, pre-14s and riparians, we don't have the ability to.

Do you anticipate that after you electronically scan, digitize all of these documents, et cetera, that you would have significantly increased capability to verify pre-1914 and riparian rights?

Probably not. It's tied to the authority in the water code and the Water Commission Act.

Capability, not legality.

Even the ability to kind of look at what's in a file from 1915, it's going to be pretty limited. We didn't really start receiving diversion data until just probably 2009 in any kind of coherent form. So a lot of those older documents are important for understanding the basis of what was claimed. But it doesn't give us that full suite that we would need to do to actually do it.

Thank you. I'd like to mention electronic metering to the extent that you're talking about improved data going forward, and I'll tell the story. When I first got on to the groundwater agency in Ventura County, which was established by the state legislature back in the late 1980s, way before SGMA, it was all voluntary reporting. And I kept questioning how valid is the voluntary reporting.

And the enormous pushback came from all of the voluntary reporters that I was a distrustful person and that I should just trust everybody in terms of their water reporting, even though if you overreported if you reported that you took out too much, you got a big fine. And yet nobody seemed to ever report that they had taken out too much. Really vilified, right? For asking this question. Every year until we went to a water market.

And the day we went to a water market, the exact same people that came to me and said, because they kept saying, "Why do you want this?" I said, "Because I don't know that we can trust everybody to accurately report." The day we went to a water market, those exact same people came and testified that said, "We need electronic metering." And when I said, "Why?" And they said, "Because everybody's cheating on these reports," right?

So I just want to get that out there, that voluntary reporting is fraught with problems. And one of the problems is when you want to do the things that we need to do with water in California. If you don't have certainty, if people can't trust the system, then they lose confidence in the system. And the same thing is true. If we have laws that you can't enforce. People also say, well, "Why should I follow when they're announcing that they're going to violate? So I might as well violate also." And if it's just voluntary reporting. Maybe I won't report even accurately. So it's a huge issue that we have to address. And I just want to offer that electronic metering; we gave grants for everybody to do it, but we did require it if you wanted to divert. And it has been very successful in increasing the sense of accountability that is out there and the accuracy of the information.

Both how much is being taken out and when is it being taken out are important pieces of information if we're going to manage water in California. Two other quick things. Number one, relying on emergency orders of the governor as the only way to get this done is not a very efficient way to manage water in California. That's the only time you really have authority to do a lot of things. And this is a very specific side question.

Bottled water off of surface water diversions is federally permitted. And can you tell me about bottled water getting their own separate federal permits and therefore not needing state permits?

You want to take it?

So, depending on the source of the bottled water, they would still be subject to the state water rights requirements and laws. And we have an active enforcement case currently pending, at least on one situation. The federal permit isn't preempt them from having to comply with water rights laws.

So what does the federal permit allow them to do?

That is a good question. I don't have a lot of background on it, so it's something I'd have would look into.

I think, and this is something that we can go back and look and clarify and provide additional details on, but in the ongoing enforcement case, which again, we can't really go into too much detail because, unlike the Shasta situation, there isn't a lot of public information about it, and it is kind of firewalled until the decision is out. But that diverter obtained a federal special use permit to be able to go in and construct or operate their system.

And so, not every bottled water entity would need something like that because, in this scenario, their source of diversion is within the federal property.

There's FDA authorizations and other federal authorizations that they have to get as well.

Thank you, Assemblymember Schiavo.

Can I just ask one more clarifying question? So, on the situation where they have 20 days to request a hearing, if they do request a hearing, and then it takes a month or six months or however long it takes to get that hearing, can they continue to divert water during that time?

Yes. No. In theory, there was an underlying order that prohibited them from diverting. They would still be subject to that $500 a day. The $10,000 a day would not kick until the cease and desist order was final adopted order.

Which won't happen until after.

Until after the hearing.

Okay.

So, the way that our authority is currently structured. So there was an order. They were in violation. They were violating each day that would have continued until the hearing. And then the $10,000 a day penalty would have only taken effect after the order was final.

Okay. Thank you.

Thank you. One of the things when I became chair of this committee and started learning about water rights was if I claimed to own a piece of property pre-1914, somebody would verify that ownership right was real. And yet, almost half of our water rights holders and a third of our water is owned by people who claim to own something that nobody verifies. It's fascinating to me. So I'll just put that out there. And it is a really scarce resource. Right.

As is land. So, it is a property right. That's something that I think we need to think deep about. But I wanted to ask. And I think I may know the answer to this. But I'm going to ask Mr. Erik anyways. So, I want to really commend the administration's efforts in modernizing the water rights system to allow us to know what exists and what is being used. I think those are obviously incredibly important elements. And I think you did a good job laying it out there.

I'm just curious if there is anything beyond that that the administration intends to do. Right.

Having the information is important in one thing. But I think that it's from what I'm hearing not just my opinion on this committee, that there's more that needs to be done to modernize our system. I'm wondering if at this time the Administration has anything to propose.

We don't have anything specific to propose here. But I think again working with the legislature and the administration, it's something that we're open to exploring and working and kind of looking at technical input where we can provide it. And it is very complicated and it is a challenging time when we're slingshotting between drought and flood and drought. And we didn't really touch on it today, but groundwater recharge. How do we do that more effectively and efficiently? And there's a lot of kind of.

I think misperceptions about that. But it's still tied to data. And there's a lot that could be done. And we're open to conversations.

Yeah. I want to thank you for all your proposals on that. I know the legislature has been incredibly supportive in budget negotiations, and I know there's more to come, but yes, having a warehouse of documents is not necessarily the best. And I've got eight more years, so I look forward to that map that I can touch. I'll see it in my time, hopefully. Well, thank you both for being here. Really appreciate your expertise, as usual.

Oh, they're all remote on the next panel, I'm being told. So you're all, oh, even the first one. Okay, so everybody will be appearing remotely. We have Council Member Arron Troy Hockaday from the Karuk Tribe, Elizabeth Salamone, General Manager of the Mendocino County Russian River Flood Control and Water Conservation Improvement District, and Felicia Marcus, the Landreth Visiting Fellow at Stanford University. And they'll be discussing examples of challenges to water rights administration. Council Member Hockaday, do you want to begin?

Can you hear me?

Yes, I can.

Hi. Good morning everybody and thank you for letting me be here today. My name is Arron Hockaday. I'm elected council mayor for the Karuk Tribe in Northern California. I'm born and raised in Happy Camp. I'm one of the last fishermen, traditional fishermen in our tribe, in the world to fish on the climate the way we do today since time memorial. I just want to give you a little brief background on what our tribal statement is.

Karuk Tribe is the third largest tribe in California. We have over 8000 tribal members and descendants. Our mission as a tribal member is to promote general welfare for our crooked people and establish quality and justice for our tribe and restoring our traditions, our traditions, our customs and our languages and our ancestrals rights for our self-governance. I'm a little nervous because this is the only second time I've ever talked in front of a committee.

You're doing great and we're so happy to have you.

So bear with me, please. The Karuk Tribe are salmon people. We live in the Klamath National Basin. We have ceremonies for our salmon when they return to the Klamath River to where they spawn at on the Klamath River and we are having difficulty with our salmon coming back and returning on the Klamath River. As everybody knows, the Klamath Basin is in dire straits for everything, for water quality, for farmers, for us fishermen right now.

So like we said today, I've heard quite a few statements that we are in a crisis of a drought in the last couple of last 10 years. Definitely it's all due to climate change. We all know that we have to adapt to the times that where we're at right now. We're faced with these droughts and port water conditions, with the fish kills we've had in the last couple of years and everything. It's really hard to work with the fishing game to restore our fish.

When we take one step forward we're taking another step backwards because of the drought and the water quality. I also heard today the legal conversions on the Shasta River that, to us travel people that are on the Klamath River was very devastating. Just prior, two weeks before the farmers took the water, half the water off the Shasta River, we had a devastation thunderstorm that went over the Kinsey Fire. For a 50-mile stretch, there was no oxygen in the water for over 24 hours.

It killed over thousands of fish species in the Klamath River for 50 miles. That's 50 miles of dead fish. Thousands, from suckers to crawdads to trout, stillhead to salmon, everything ran prey. We have major pictures. Our biologists worked for weeks on data on that. Then two weeks later, the farmers tell us they're going to take water from the Shasta River. And they took it. I cried that day. I'm so emotional right now. By living here and seeing what they did is devastating. It's our future.

It's our future for our children, our culture, our way of life. And to have us get kicked while we're already down was a very sad day. So sorry for being emotional about that. But that's just the way I feel. The Shasta and the Shasta River is very important. It's one of our last Shasta in the Scott River. One of the last salmon producers for the Klamath River.

History shows that back before towering motor stuff, the river had over 800 and some thousand salmon yearly coming up to Klamath. I mean, that fed everybody and took everything. It's sad to see. Now we're winding down to where the Shasta River only gets maybe up to 1000 salmon into it per year. Scott River rarely gets over 1500. That's fall salmon and coho. With the devastation of the groundwater pumping, which I heard today has lots of effects.

Our biologists have done studies after studies showing that pumping groundwater and drought years affects the river flows. We all see it. We live here. You go up there on August night, there ain't no water from Callahan to bottom of the Scott River. I mean, there's no water to the end of the valley until you get down into the canyon. Then the water pops back up. I mean, you guys got documentations of that? So how's fish supposed to survive?

Or how's anybody supposed to survive in something like that? Bear with me a little bit. I agree with what a few people saying from me, that the Talmuds went to the legal water versions for $500 a day. The farmers just laughed at us. They even told you guys that newspapers, they laughed at us. They even talked about they weren't going to pay it because it wasn't worth the, the crime to them the fine was nothing.

When you got over 80 farmers paying $50 for 20 days filling up their ponds and killing fish on the banks and going against ordinances, it was terrible to see and then turn around and laugh at us because they did it knowing that nothing was going to happen. They just got slapped on their hand, says, go to your corner, you got a timeout. I mean, that's what it felt like. The tribe is not against farmers. We're not against farming. We love potatoes.

We need alfalfa to feed our cattle. Matter of fact, I have two families that I'm related. They're my families that have, one has a cattle ranch in Big Springs, the other one has a ranch in Montague. Like I said, we're not against farming. It's just the way they do it nowadays. It's all about money, and we all know that everything's about money nowadays. It's just a bad thing.

I think if the Water Board would raise their fines a little more, I think we'd stop some of those concealments. But just want to let you know, a lot of this just didn't start over days. It just didn't start 20 years ago. This started over 100 years ago when Native Americans were not considered people yet. And in the last 40, 50 years, now that tribal members have rights, travel, tribes have rights.

I think you guys need to bring us aboard on some of these boards on these meetings, because back when we took care of the land, we don't own the water. We don't own the land. We took care of the land and the lands provided for us, and we kept it nice till every year that we got plenty of what we needed. Nowadays, natural resources, because of all the environmentalists and everything else in the world, stop logging, which we don't call logging, we call harvest projects.

All this brush and timber that's out there just laying in the ground right now, not being used for nothing, not for boards or toilet paper or paper to write on or grocery bags. It's all going to waste building fuels up. We got a lot of small trees out there sucking up the water along these bricks. It just needs to be managed. Once you manage that right, we could have some more water back. I mean, it's all due to climate change. Don't get me wrong.

We're in a climate change. We all got to adjust to it. Sorry about that. Today, the Kuruk tribe, in 2017, we took a stand and said that we'd only harvest 200 salmon for our ceremony purposes. Only for ceremony leaders to have for ceremonies for bringing the salmon home.

We're still doing it today, even though there was a big fresh fish run last year, because that's how important the fish are to our people and to our culture, that we're willing to take that and live with what we have to do for the future of our children and our culture. We want to be here for another thousands of years, just like everybody else will want to be.

As you guys know, it took us 25 years, but we got four dams coming up on the Klamath River, and that water was used, nothing but for power. It wasn't used for aquaculture or drinking water or anything. So we're glad to see those come down. Thanks to Governor Newsom and Fish and Wildlife, Chuck Bottomham. Thanks for all their hard work with the tribes, the State of California for this adventure to get it done, which will restore some fish habitat.

It's still got a long road ahead of us. Hopefully here in about two to three weeks, people will start to go to work on those dams.

Like I said earlier, we're fix people. We fix the world. We have our sermons for renewal to fix the world for everybody. And it's pretty hard right now, and we're having troubles trying to fix the Klamath Basin. I know you guys were talking about the Sacramento River and the American River. Nobody brought it up, but you guys just had a major sturgeon kill down there a couple of years ago.

And last year, I mean, those fish lived to be 200, 300 years old, and there were quite a few of those killed. And a couple of years before that, you had salmon kills on the Russian River. These are things that are not out there in public eye, but we all know these are happening. Sorry about that.

We need to put our tribal knowledges on some of these boards, because the way the United States government and State of California in the last hundred years, we all need to work together. We can't be separate and fighting amongst each other anymore to save this bar. Just on one note, I want to let you guys know that the tribe is supporting the AB 460. We are dedicated on that, and we're going to in support of that bill, so hope it passes.

I just want to let you know that my Chairman, Buster Adbury, has been for the last four to five years, wanting to do conservation by saving some of this winter water with the farmers in the Shasta. We all know that in the Shasta Valley, that it's lab of base. So the water just sips through those ponds they have out there during the summertime. If we can go in there and line them or support them, align some of these ponds they have, the water wouldn't seep through.

We did a project in Montague with the city water. We did that, and the excess water went back into the river. That was a success story. I don't see why the state has not followed on some of the lines like that we did. And just want to say again, thank you very much. And I just want to let you know that we're not against the farmers. We all need what we need from the farmers.

But at the same time, the fish are the senior right holders of the water. Remember that, not humans. The fish are the senior right holders. Thank you very much, Yotois, and thank you for your time.

Thank you so much. Council Member, I think you spoke incredibly eloquently, and we have an incredible amount to learn from our native people who, as you said, took care of this land for much longer than any of us and did an incredible job. So I appreciate your historical perspective and everything you had to share. Ms. Salamone, are you online?

Good morning. Thanks. Can you hear me okay?

Yes.

Okay, great. Thank you so much for having me this morning. Welcome to everyone. And I just have to say what an honor it is to be on this panel, testifying with these amazing minds today. You have some of the best folks in the state speaking and teaching you today about what's happening. So I'm going to touch a little bit about some things that Eric Ekdahl mentioned. I am a manager of the Mendocino County Russian River Flood Control and Water Conservation Improvement District.

We administer the water supply that is made available from a flood control project. You may be familiar with some of the photos that were taken of the Governor in April of 2021, when he declared drought the first time in that year in our local reservoir, Lake Mendocino, from the bottom of the reservoir. By that time, stakeholders and the State Water Resources Control Board staff, initiated by Eric Ekdahl himself, had already been in communication for about nine months addressing our concerns about the worsening conditions.

Eric came to us and suggested that we find an innovative local solution, as he mentioned earlier. But as you heard, water rights law did not provide a mechanism by which the State Water Resource Control Board could initiate a timely response to the failing conditions and to assist local water uses. So here's what we were facing. We didn't have enough water to go around. Logical thinking would lead us to say, okay, everyone could use a little bit less water.

So anyone with any experience in splitting a pitcher of lemonade between several children knows how you do this. But guess what? The law doesn't create a path for this basic exercise in sharing. It says the oldest child gets a full glass, whether they can finish that glass or not. And if there is no lemonade left by the time the youngest child holds out their glass, that's tough. They get none. So that's what happened in the Russian River. Except it wasn't lemonade. It was water.

And that water provides for human health and safety, for commerce and agriculture, and for sustaining fish, wildlife and environmental health. And for the first time ever, in 2021, the state had to issue curtailments of all water rights in the Russian River, including riparian and pre 14. So cutting off some of the users completely, while others experienced no shortages at all, which did not happen in 2021, but happens in other years with curtailment. That was not working for our community, and no one wanted that.

It created hardships environmentally and economically. We formed a Steering Committee. Mr. Ekdal referred to that earlier of the process that took hundreds of hours over approximately a year and a half, a little bit more. And we called this initiative the Upper Russian River Water Sharing Program. The State Water Board adopted this program into the emergency regulations in spring 2022, and the program was able to run for a number of weeks successfully. Participants in the program pour the lemonade differently.

The oldest one takes a little bit less than they would usually drink so that there is some left for the youngest. It may not be as much as they would love to have, but it was better than none. And that's it. That's pretty much how the program works. There's a legal document, of course, lots of attorney talk in that. There's a lengthy assessment that you can read. There's an extraordinary excel spreadsheet that calculates just how much lemonade everyone gets based on their age.

And there's an implementation report that was written recently and submitted, which will be published soon, that explains the entire process. And it's written in such a way as anyone can read and understand what we did. This program took a lot of hours and a lot of collaboration, and it would have been more of a streamlined process if there was better data to support it. However, there were still limitations on how and when we can use this program. It was referred to earlier.

Without the Governor's proclamation, the State Water Board cannot issue emergency regulations and therefore the program cannot run as it has been currently designed. We are looking for adaptations. The Steering Committee continues to meet and enhance this program. There is hope that it will be used as a pilot project in other watersheds in the state as well. But I have to stress it should not be this difficult for water users to locally manage a reduced water supply for the health and well-being of their community.

Our region experienced the inequities of following the water rights system by date of priority, and it didn't like it. We found a way to adapt without throwing out the current system completely. Many are proposing this adaptation to modernize the system. So modernizing is the term that's being used. And quite frankly, it's because the term reform really scares people. But whatever we call it, this process needs to be collaborative and it needs to include the water right holders and all beneficial uses.

It needs to be a meaningful modernization. The Water Sharing Program, it shows that it can be done. We can work together to make these things adaptable and modernized. It will take more thoughtful engagement and it will take the funding to back up that engagement. One way we could do this is to create watershed-based forums that would involve stakeholders and state agencies much like we did with this development of the water sharing program, but expanded.

These forums could address resiliency issues, but more importantly even is they provide the lines of communication needed to modernize and to adapt to an already changed climate and a climate that continues to change rapidly. We need water users and water suppliers to buy into the modernization to trust, as was brought up earlier today. The law must develop procedures that allow for adaptation to address the uniqueness of individual watersheds and communities, while also ensuring the stewardship of our shared natural resources.

And there must be sufficient funding to implement these initiatives thoroughly. Mandating, without funding these mandates drains the resources and effectiveness not only of the new initiative, but of everything else we are already doing. So today I've given you a very brief example of how water rights law is rigid. It exasperates the hardship of those it's meant to serve. What I want to stress is the operating system is outdated and it needs an overhaul. But as has been touched upon today, flexibility is not the only issue.

The system is deeply flawed in addressing equity. We need to examine the degree to which water rights are linked with wealth, power, and privilege. There is almost no recognition for the people of these lands whose relationship with the water and everything it touches is immeasurable. It is timeless. This examination of the system must address the effects of systemic racism.

It must also examine relationships and connection, the relationships and connection between people and the ecosystem, the wildlife to habitat, agencies to the stakeholders, and water uses and people to one another. This is a time to be bold, not by mandating actions from the top down, but by building something better from the ground up. This means we must work with the water suppliers, the water users, the cultural and environmental stewards, and the state agencies. We all together need to invest in a system that we build together equitably.

Thank you. I look forward to your questions and always available for follow up anytime after this too. Thank you.

Thank you so much. It was really fun to hear about what you guys are doing, and I think it really represents the best of humanity to be able to come together and decide what's good for everybody. So I appreciate that. Lastly, we'll hear from Felicia Marcus, Landreth Visiting Fellow at Stanford. Are you there, Felicia?

I am. Hey, well, still morning. Good morning, Madam Chair, Mr. Vice Chair, members and staff. It's nice to see you, even virtually, not surprisingly, given the great speakers and practitioners you've already had, I'm going to echo some of the things you've heard from them and you're no doubt going to hear from later speakers and with so many speakers, I'm just going to share some observations at the moment and stand ready to converse more deeply over time.

I'm not focusing on water management overall, the massive challenge we have protecting ecosystems or many other things, I'm going to focus on implementation. It's wonky, but it's pretty darn important. As someone who worked with the great staff and colleagues at the Water Board to try and implement the water rights process we have, I do have some observations about why it's hard to implement the system that we theoretically have.

And while there are many discussions taking place about the very nature of the Western water rights paradigm, such as who was really here first, I'll focus on implementation of the system that we have today. So take my observations of that, observations from the field, from someone who's been in the trenches, and one who has and is now engaged with practitioners from other western states and has familiarity with how others do this work in the western US, the eastern US and some other countries.

As Yogi Berra once said, in theory, there's no difference between theory and practice. In practice there is. And even in theory, though other states look at California's system of administering water rights with a mix of shock and disappointment and wonder how we can possibly implement it. In practice, it's even harder to implement than they may think. Although the waterboard really does a heroic job of trying to implement it with the tools it has.

I've often said, and I've had many jobs, that I've never had a job, as I did at the Water Board, where I said, you've got to be kidding me so many times. And it was almost always about water rights, what obligations were, what tools we had or didn't have, what data we had or hadn't have, some of which you've heard about today. So my observations are going to fall into four categories, and you've already heard about them and you're already considering addressing, which is handy.

First, the sheer complexity of having multiple water rights systems, which we have, makes us unique. The lack of clear, accessible, and trued-up data, information that should be important for both water rights holders and administration of the system, unwieldy processes, third, where delay can become an end in itself, and frankly, number four, a lack of staffing and funding to do the job that the Water Board is tasked with doing. So let's talk about complexity for a second. We don't have one water rights system.

We have a system of systems, or even a system with components and concepts that differ wildly. Let's break it into four, though Mr. Ekdahl's slide that showed all of the Olympic rings, though more than in the Olympics, is also true. First, we have those riparian rights that were mentioned where the water rights holders in theory share correlatively their ability to take from the stream. They can't store it, they can't transfer it. Then we have two different sets of appropriate rights.

The pre-14s you've heard about that don't have to get permits and the post-14 appropriate ones. They're both set up on a seniority system, first in time, first in right, and frankly, some people claim both. And the Water Board's been spending time trying to sort that out and get folks to elect. Then finally we have groundwater, which is inherently correlative.

And we have Sigma creating an alternate path to court adjudication to try and settle the relative rights and manage what is a shared resource under the ground. Other states do not have this many different systems. They don't. For example, when other states moved to codify appropriative rights from riparian back in the 18th century, let alone the 19th century or the 19th century, let alone the 20th century, they shifted away from riparian rights rather than layering a new system on.

And although all western states employ the priority system that had its origin in mining claims, they do not treat juniors and seniors quite as differently as we do when we treat one class of pre-14 water rights holders who preceded the passage of the Water Commission Act very differently from those who came after. I mean, this may just be the result of what could get passed at the time, which is how a lot of legislation evolves over time.

But we seem to have far more difficulty than other states in developing one intelligible system with common treatment and metrics for all water rights holders. Even in a seniority system. There are historical reasons why it happened, but it makes our system or systems difficult to implement. As I'll mention in a moment, they've managed to have seniority-based systems that are more transparent, quantified, and manageable in a way that can be seen by all.

Many Western states do manage surface and guan water independently, although they were once all connected. But they do tend to manage them more similarly, in a more integrated manner than we do, where we manage them completely separately, except where the interconnection is still quite obvious. We now have Sigma, which is working its way through implementation, with many good people working hard in communities to get to sustainability, and others helping them figure out how to get to sustainability.

So I'm not going to address groundwater further this morning. I just raise it to note it has another big difference with many, if not all western states. And I keep saying Western states because Eastern states do it very differently than the Western states that rely on the seniority system. This complexity and differing treatment afforded different types of water rights adds its own level of effort, cost, and confusion to many water rights holders in the public.

It also leads to a lack of understanding about what water rights really are across the public policy discourse, and because of the other challenges of how little we've built out the data and actual relative rights of our water rights holders, it leads to years of litigation on basic concepts and the ability for people to believe their water rights are something other than they may be, and a chaotic public discourse on important public policy decisions.

Let's talk about data for a minute, or the lack of a clear, accessible and quantified set of data across the water rights system. I'm just going to give you a couple of thoughts here, and you've already heard about it, both in terms of the technical capability to acquire and use data, in terms of our legal capacity to use it. It's a huge issue, and one we prioritized improving in the last drought.

We needed clear data to even lay a foundation for a realistic conversation about water rights. In the absence of that data, water rights are an assertion, often deeply held by very nice people, of what they are, by thousands of water rights holders, many times in conflict with each other.

And while conflicts between water users and environmental goals frequently capture the headlines, the conflicts between water users are even greater in times arguing about whose molecule it is in a given body of water once you get to the delta. So there are these conflicts between juniors and seniors, of course, the more senior, but also conflicts over stored water going by a diversion that a senior is frankly not entitled to, as well as other conflicts.

So technically, we don't have anywhere near the number of stream gauges or other modern measurement devices we need to tell us what's going on in anything close to real-time. This is important for the integrity of whatever system or systems that we have, and it is important in managing the natural resources, public health, and water rights administration of the system.

This is improving with really hard work by the water rights staff, the Delta Watermaster's work, and the introduction of better remote sensing and other approximation tools, and the collaborative work of many stakeholders to try and find ways to accurately assess where water is, whose it may be, and what the impact of where it is and where it isn't is.

You all gave the Water Board the authority to order measurement devices for the first time in 2015, and we did those regs in 2016, but they aren't anywhere near complied with yet. Fortunately, you and the Administration have given the waterboard some more staffing and resources to both digitize the data and water rights that we do have and to enforce some of the rules on the book. But it's a very small step compared to the needs of a modern system or systems.

That said, it's a start and we need all that and more process. I could spend all day on this. I won't just a few comments. With respect to how we use the data that we do have in other states. The state or large swaths of the state are adjudicated or quantified. These are processes that can take decades, but they started decades ago and we didn't except in some river reaches, but not the big ones.

To take just a couple of example, Idaho finished the Snake River adjudication after 27 years, just during the last 10 years, and a lot of Californians went to that celebration to go take a look. Colorado's quantified their water rights down to what runs off urban houses and lots. Our system, as has been said, came out of mining claims processes originally, but without the rigor of filing and policing those claims that the mining rights had.

And most other states reformed how they administered these by different times in the 20th century to make their systems more intelligible and workable, with the ability to assess the rights of each water rights holder and hold them all accountable to each other, seeing that as good government, important to commerce, important to the environment, important just as good public policy. The accounting was sorted out in very different ways, but all lead to some level of predictability and transparency and a method for enforcing the system.

Again, all somewhat different, but they're all more quantified and transparent than ours. Process in general for implementing this, in a word, laborious. Senior water rights holders, as you've heard, do not have to obtain a permit and do not pay any fees to administer the system. Nor do riparian rights holders, although as seniors they benefit the most from the administration of the Water Rights System seniority system.

Junior water rights holders do pay fees and need to get permits, but they do not have to true up their water rights to a license, which would clearly show what their rights are versus what they claim. In theory they do, but they don't. Both now have to report their use yearly, which is progress gained through legislation in 2009 and 2014 and 15. And as noted, if in designated places and at significant scales. They now have to measure what they report in some approved measurement manner.

In theory. These are relatively big steps forward that the Legislature has made over the last decade or so from where we were. But again, as I said before, only baby steps compared to other states. Because water rights are a property right, albeit a use right, and not a fee right, much decision-making affecting their rights requires an evidentiary adjudicatory hearing, which can take a lot of time and a lot of staffing to resolve.

Backlogs are big, although they may be getting better with the addition of ALJs. Thank you very much for that. I've seen the Water Board step in and step up in the last few years to take on more dispute resolution and adjudications, which is all to the good. But there's a need for more. And as Yvonne West illustrated, enforcement is amazingly complex and unwieldy. Making it clearer and more implementable is again just good public policy.

The fact that there's no interim relief as future speakers will also address is a challenge, and the waterboard does an amazing job with their hands tied behind their back, wearing blindfolds with paperclips and rubber bands. We need to find ways to make this much easier to administer. One place where California is actually ahead of other states is in its theoretically robust tools for protecting the public trust, resources, and in determining waste and unreasonable uses, as has been mentioned.

But those are just as challenging to implement in a laborious process that's fraught with opportunities for delay. And we certainly have not been able to meet our obligations here to the public except occasionally and in notable ways, both in the emergency regulations that were laid out in Yvonne West's presentation, but occasional moments at Mono Lake and in the Bay Delta, but not nearly as much as we need to across waterways across the entire state.

If we could find a way to more quickly establish the environmental needs and the relative rights of water rights holders on scores of important waterways, we would have a more rational and workable system and would be doing something very important for the people here now and for people in the future. It'd also be great to allow the Water Board to initiate adjudications rather than having to wait for petitions to do so.

And frankly, many water rights holders still argue, and it needs to be litigated over and over and over again, that the Water Board has no authority over them at all. All of this takes time. It creates confusion and distrust and detracts from the challenging work that is only going to get more challenging with climate change to figure out how to have a workable system, resolve conflicts, and have a system that's clear to all. Finally, funding and staffing.

This is not a panacea, but a real necessity, given the complexity of these multiple systems and processes. The Water Board has never been staffed anywhere near the level necessary to figure out the tangle of relative rights with the tools that they do have and to implement the system as it should be in theory.

In theory, we should be curtailing in many more years than we do, since we didn't over many years when we did step up to do it in the historic drought of the middle of the last decade, we were accused of taking away water rights when in fact we were simply trying to implement the law as it was written, but had not been in previous years, let alone routinely. Again, as been mentioned, senior water rights holders who don't need formal permits under the way our system is constructed do not pay fees.

The Legislature has given general funds to help administrate the program that pertains to them, yet they are the people who theoretically benefit the most from the system we have, as the Water Board is charged with curtailing more junior users in favor of more seniors, fees can also incentivize better reporting. I'll simply say that, but this is not to pick on seniors. It's just no matter how you slice it, we need more money. We don't have a public goods charge as we do in energy.

We don't have a fund that would normally help defray the cost of implementing a system, and we put it all on a fee base of a subset of the water users and then need to supplement it with general funds. And so as a result, the size of the staffing and the ability of what we can do is seriously constrained. Again, I suspect the Water Board would need more staff to implement even a more streamlined system.

But a more streamlined, quantified and clear system would surely be less expensive to implement than the one we have now and would be better public policy. Erik Ekdahl mentioned a point about how staff in the emergencies where the Water Board gets the authority to step up and do a lot of things in a concentrated time detract staff from other work.

Certainly in the drought that I was more involved in in the middle of the last decade, the staff that had to go move to work on all of these drought measures in this incredibly complex world delayed the water quality control plan process for the San Joaquin and the Bay Delta and Sacramento proper by years because it was all the same people. These aren't simple issues in conclusion and the existing system is one that communities have relied on for over 100 years.

So I want to say it is not easy to change it, and any change should be considered very, very thoughtfully. There are hopes and dreams wrapped up in every conversation with water users and with one user's hopes and dreams colliding with others, be they other water users or Fish and Wildlife or other communities, environmentalists, indigenous communities and the like. So it's very difficult.

But at the very least, good public policy suggests that whatever system we have be more transparent and implementable than the tools the Water Board is left with now, where they can only act quickly in a reasonable time frame during a crisis when a Governor issues an executive order, the crises ahead will make our crises today look like a picnic. So we need to invest in a system that can work for everyone, both water rights holders and the public's interest in good government and protecting the environment.

I commend you for being willing to consider this very, very high value, but not-so-glamorous issue of how to make water rights work better. It's not something to be resolved in a day, but I appreciate you starting the journey, and I encourage you to spend some time in the future looking at what others have done in other states and countries. It's a wide menu of options, not to adopt any of them, but to choose from and construct what's appropriate for California.

The PPIC recommendations are a good start, as are the recommendations that will follow me, but I'll hold specific recommendations till I hear more through this hearing. And the others you will no doubt have is once a board member, always a board member. So there's more to be said. But you have a lot of fine speakers with tons of experience in this field. So just thank you. Thank you very much for having me today, and I look forward to watching your progress.

Thank you. And I appreciate your comment about how this is the start of a journey. As I said, I have eight more years, but many sitting here have more than that. So we've got the time to try to make a dent in this morass. Any questions from my colleagues? I have a question for you, Ms. Marcus.

So I have started studying sort of some of the different water rights systems abroad and domestically, and I'm curious if you have specific water rights systems, be it another state or another country, that you think we could learn from.

Well, I think learning from a number of them is always helpful. In a lot of states, they refer to it as water tenure, a little different than water rights, and they evolve it more easily than we do in the Eastern US, for example, they don't have the seniority system and appropriate. And they take a more equitable sort of correlative view of this with permits that get reupped not for a couple of years, but 20 or 30 years.

Not saying that's the way to go, but it's an interesting model. I think one place that's always useful to look at and many people misquote all the time is Australia. And I think, again, I don't think adopting their model is a good idea because there are parts of it I like and parts of it I don't. But there are really interesting things they've done over the course of the last 100 or so years.

For example, one of their senior officials visited California to see how our system worked around the late 18 hundreds or early 19 hundreds, just as people from other states did, because ours was kind of one of the first and people mimicked it originally. And like other Western states, they decided to change how they administered it relatively early.

And in Australia, while they still have a seniority system, they moved to shares that are then in a case of a drought, people in a couple of classes share correlatively again like you would with riparian or with groundwater in the shortage. So you have a couple of classes of people who are treated more or less the same, unlike the system we have now, where it's first in time, first and right by the nanosecond.

And you've got to figure it out with all those 7000 pieces of paper and figure it out and people can argue about it and fight about it forever. There they've regularized their system and they use shares. I'm oversimplifying. Then I'll just give you one or two more examples with them. Then. I think in the 80s they had a national marketing initiative where they were really focused on digitizing.

Not digitizing, but figuring out how to measure everything because they thought it would give them a more competitive edge in the world to actually know. So they did a lot of work in that arena. And then in their big millennial drought they also made changes that people tend to refer to as if they're the only reforms they did that had to do with trading and other things. I won't get into that because I think that's a whole nother set of issues.

But I think just thinking about how you can have a system that's more neighborly, frankly, and more transparent so people don't have to guess if someone's advantaged or not and they know what's going to happen in a case of shortage is more helpful. And I would suspect if we look at more countries, it seems that more countries and states have that than we do.

Interesting. Thank you so much. And one of my takeaways today is going to be what the Council Member said, that the fish are actually the most senior water right holders. They were here first.

Yes, they are.

So thank you all. If there's no more questions, then we'll move on to our last panel. And I will say that all of the people who are speaking today are incredible resources and are available to chat with us outside of this anytime we want to learn from them. And our whole panel is here in person. That's fun.

It's like every other panel. Awesome. So on this panel, which will focus on proposals for modernizing water rights Administration. So where should we go with all of this learning? We have Richard Frank, Professor of Environmental Practice and Director of California Environmental Law and Policy Center at UC Davis, Jennifer Harder, Professor at McGeorge School of Law, David Guy, President of the Northern California Water Association, and Russel Mclaughlin, Counselor to Melbourne, my Alma mater. Welcome.

Start with Mr. Frank.

Thank you, Madam Chair. Happy to be here at UC Davis, I teach a number of environmental courses, including water law and environmental enforcement. I'm joined by Professor Harder, who will give a broader, more detailed introduction. But she is one of the preeminent state experts in water law. In California we're confronting 21st century climate change, drought and water supply problems with a 20th century system of California water infrastructure and a 19th century system of water rights. And that's a problem.

Our water rights system, as has been already discussed today, is antiquated, relatively inflexible, and really in many ways, not completely, but in many ways, out of step and not responsive to the modern water challenges that we're facing. We need a more nimble system, we need a more efficient system of water rights than we have now. These problems have been highlighted by the media recently in a couple of major reports. You already heard about the Shasta River, Ciskyo County issues.

That was a story broken by the Sacramento Bee in November of last year. I'll allude to that in a little bit more detail in a moment. But just last week, the New York Times talked about a problem not related to drought and water shortages, but water surpluses. When last Wednesday reported on, a number of parties wanted to divert and capture stormwater runoff and use it for groundwater recharge and had permits pending for some time before the Water Board.

But the Water Board was not able to act on those permits and authorized those stormwater recapture projects on a timely basis. And those permits were not issued until the availability of those stormwater supplies were gone or almost gone.

So, to deal with these kinds of problems, a small group of water wonks, including myself, were recruited by the Planning Conservation League foundation in early 2021 to convene and discuss and hopefully come up with consensus based reform recommendations, how the water rights system could be made more nimble, more responsive, not to gut it, not to replace it with something completely new, but to improve it and make it more responsive to the current conditions.

That group, which consisted of a number of water law professors, one former waterboard Member, and one of the state's preeminent and then retired water law experts, deliberated for a full year and in January of 2022 came up with a report on that very subject and made 11 separate, specific recommendations on suggested reforms. We've provided that report to your Committee staff.

In 20222 of the recommendations were introduced in the form of bills in the Legislature, and they passed SB 125, which expressly directed the Water Board to incorporate and consider climate change issues in its water allocation and planning decisions. And a second Bill, AB 2108 which directed the board and authorized the board to provide funding to underrepresented communities and tribal governments to more in a meaningful and timely way to participate in board deliberations.

This year we are back with additional suggestions from our recommendations, and I want to talk very briefly about two of those before I turn things over to Professor Harder. The first, and you've heard about some of the problems here, but we have explicit recommendations about the need to increase and enhance the Water Board's enforcement powers with a specific focus on its authority to issue so called interim relief orders in California.

The California court system and the Water Board share concurrent authority to oversee and administer California's water rights system. Courts in water disputes that come before them, and any number of civil disputes have well established authority to issue interim relief in the form of temporary restraining orders, preliminary injunctions. The board, however, by contrast, has very limited interim relief authority. It's time consuming, it's really inefficient, and it's not able to exercise that interim relief authority as quickly as courts are.

We believe that what the head of enforcement of the Water Board delicately referred to as procedural challenges related to that, that is an understatement at best. It really is a flaw in the system. We believe that needs to be remedied by the Legislature to clarify and expand the board's authority to provide interim relief. And I want to make stress that that doesn't mean that the parties involved don't get due process, they don't get a hearing.

But just like courts oftentimes feel compelled by the circumstances to issue immediate court order, interim order until a hearing can be heard. But to prevent damage from occurring to parties and third parties in the interim, so too should the board have that authority. The related problem that again has been highlighted by the Shasta River contretemps from last year, last summer, is the fact that the current authority of the board to assess civil penalties administratively is, in our view, woefully inadequate.

And the Shasta River situation is a poster child for why and how that is the case. But that's by no means an isolated incident. It's just that, I guess to their partial credit, the ranchers and farmers in Siskyou county were very explicit about what they were doing and not apologetic. But the board finds the fines that are statutorily authorized for the board to assess are simply not adequate or not enough to serve as a deterrent to illegal behavior and to violations of the board's authority.

And the board's regulations and the board's order. It's simply, as was demonstrated in the Sacramento Bee article, perceived by folks as a cost of doing business, and the $4,000 in eventually administered fines in that case simply didn't serve as a disincentive to the affected farmers and ranchers in the area.

And the problem with that, just beyond just the philosophy of vigorous enforcement, is it's unfair to other water users that are complying with the law and creates an unlevel playing field among competing water users in a particular district or basin. And of course, it is deleterious to the environment, as the tribal Member representative attested. So we are gratified that the chair has introduced legislation to address those two reforms that I've discussed, and with that I'll stop and turn things over to my colleague.

Thank you, Madam Chair and Committee Members. I'm very pleased to be here today. My name is Jennifer Harder. I'm a Professor at McGeorge School of Law in Sacramento, and it was my great privilege to be part of the recommendations on drought and climate change group that included Professor Frank and others. And I concur wholeheartedly with those proposals and just want to add two more of our proposals for you today.

So our group concluded after more than a year of study that a critical step, if not the most critical step, needed to address drought and the climate crisis is to eliminate uncertainty regarding the board's authority over riparian and pre 14 rights. You've heard about that from other speakers today. This uncertainty is created by several factors, including generality in the law, lack of clarity, and inconsistency, and it has exponentially pernicious effects. It leads to needless litigation, which wastes the resources of the state.

And even if litigation isn't brought, the threat of litigation makes the state wary to take action, even where action is critical to protecting statewide interests. And you've heard about the delay, the confusion and the distrust that is created by that situation. So my two reform proposals that come from this group both relate to this issue. The first is called verification, and you've heard that term already today.

The verification recommendation is based on the fact to which all agree that the single most important thing the state needs is better information about who is using how much water and for what purposes, and where. As many have said, the state does not have that information about many of the state's most impactful water rights.

So the idea behind verification is simply to provide the board with the clear authority to ask any water user, regardless of the basis of their water rights to provide information about their water rights and water use. In other words, they have to prove the existence of a valid water right, and then they have to prove that they are validly exercising that water right.

The board has some tools for requesting such information, but the key tool does not clearly state that the board has authority to use that tool. In the context of pre 14 and riparian rights, which creates that pernicious uncertainty I mentioned earlier, this is a recipe for dysfunction.

Giving the board basic access to basic information about all water rights and ensuring the board can take action where people are illegally diverting water is critical to ensuring that California has a world class water rights system that is equal to its water resources, its water economy, and its environment. The second reform that I will discuss here relates to this process you've heard about today called curtailment, which simply means, this has been pointed out, enforce the priority system.

So a quick refresher, priority in water rights refers to a date. It's a date associated with appropriate water rights holders, and sometimes with riparian rights holders. And under that system, the water rights holders with the earliest dates called seniors get water first in a drought, and water rights holders with later dates called juniors, are not allowed to divert water until more water becomes available. So curtailment is simply the process of implementing these priority rules.

Now, contrary to some of the mythology that's in the media sometimes this is a complex area, and I know people are trying to understand it. The waterboard did not invent curtailment, and curtailment is not the taking away of a water right. The concept of reducing diversion consistent with authority has been a central feature of our water rights system since the earliest days. The difference is that for the most part, the curtailment process, the priority system, has been self policing.

It means that water users were expected to simply know how much water is available, all the priorities above them and below them, what water belonged to others and had been released from storage, or they could divert and to adjust as water availability changed. And the only oversight of this process has been through the court system after injury has already occurred. And then the court has to address that complex system of water rights you've heard about today instead of the expert agency.

So in the last two droughts, it became clear that this self policing system wasn't working. And the board, to its enormous credit, stepped in for two reasons. And one was to ensure that priority system was functioning effectively to protect senior water users, who are the ones who benefit from the priority system.

The other was to ensure that when water availability was calculated there was sufficient water left in stream to ensure we weren't drying up streams and killing all the fish, and to ensure that basic human health and safety needs were met and to implement that human right to water. These objectives are squarely within the charge given to the board by the Legislature and recognized by the courts, which is to undertake the comprehensive planning and allocation of water resources.

Of course, because of the pernicious uncertainty I mentioned earlier, when the board took action, it was challenged in court, which is what our recommendation is intended to avoid. There were two appellate cases decided in the last two years. In one case, the board's decision was upheld, the board's action was upheld, and in the other case, the board's action was held to be inconsistent with the water code.

The court held the language of a particular water code section didn't give the board authority to apply priority rules to water users as a group, even though that's the only time priority matters, and even though by definition all diversions outside priority invade other rights. The court acknowledged that the board does have the authority to take action under other laws.

But our group concluded, as have others you've heard from today, that these laws are either too limited or they lack clarity, and therefore invoking them will result in more litigation. That's guaranteed. So the board needs to be able to act quickly to respond to changing conditions and take action with clear authority. We can fix that problem, the Legislature can fix that problem and avoid the expensive lawsuits that drain the resources of the state.

The court that issued that negative ruling in fact recognized that its holding created problems and inconsistencies, and the court invited the Legislature to address the problem. So that's we are here urging the Legislature to do that with our proposals and very much appreciate the proposals that have come forward already. So a couple of final points. First, our proposals preserve the local water supplier role in water management. State authority is central to the recommendation that I'm discussing here.

But that recommendation also preserves our dual system of local and state management, which is necessary to address the climate crisis. But for that local state collaboration to work effectively, the state must have clear authority. It must have that state backstop. It is only the fact of that backstop that protects those statewide interests. And second, the changes are protective of property rights in water verification and enforcing priority. Do not seek to abolish the water rights system as some have called for.

And if some charge, when they hear the word verification, they actually do the opposite. Clarifying the board's authority over pre 14 and riparian rights protects all water rights and all uses of water, including the human right to water and in stream flow for fish. By removing illegal uses, water is available to those who hold the actual rights to it. They protect that central feature, the priority.

And the proposal ensures that we will have the data and the information that the state needs to operate the system effectively. So that is why you're hearing these proposals from many different voices. You're hearing them from the Public Policy Institute of California, from our group. They're also consistent with a draft report that's been released by the Center for Law, Energy and the Environment at Berkeley law that was issued February 6, improving California Water Rights Administration for future droughts.

That report has been informed by a cross section of experts, including representatives of water right holders. And in fact, many water right holders support the proposals. And that is because the law is at its most effective. When its terms are clear, it becomes stable, predictable, reliable, and supportive of investment stability, predictability, and increased certainty.

These are the things that water right holders want, and in the long run, will facilitate our efforts to improve the efficiency of the system, such as through transfers, such as implementing the sustainable groundwater Management act and taking better advantage of those wet years that we heard about earlier today. Thank you. I appreciate the opportunity.

Thank you. I know I'm a former litigator, but I love legal clarity. So I appreciate your recommendations. Mr. Guy, you want to take it on next?

Thank you. Madam Chair and Members of the Committee, thank you for the opportunity to be here. You've heard a lot, so it's getting late in the hearing. My name is David Guy. I'm the President of the Northern California Water Association. We represent the water suppliers, the cities, the counties, in the Sacramento Valley. That's from Sacramento to Redding, about two and a half hour drive on I-5, from the Sierra Nevada on the east to the coast range on the west.

And we supply water for every imaginable purpose. Obviously, you have cities and rural communities, you have farms. We serve water for all the state and federal wildlife refuges, as well as for a variety of salmon efforts and other endangered and terrestrial species. So I think I'm here today maybe to offer a little bit of a practical approach to kind of the way things have been working. I think the important thing is we strongly support a robust enforcement process.

And, in fact, I think we have a direct interest in the prohibiting illegal diversions of water. I think that goes without saying, the certainty that many folks have talked about today. And so I think is what we would like to suggest is that you really think about how you go about that enforcement in a meaningful way. In the last several years, since 2014-15 we have worked very well with the State Water Board in this process.

I know it's fashionable to say bad things about the State Water Board, but the reality is we have to sit down and work with them. And I think you heard earlier today from Eric and the team over there that this is hard work. We've sat down, we've been over there every week since 2014 working through a water unavailability methodology, making sure that that process is tracked properly. And the reality is, I think it has worked.

I'm probably the only one in the room here that's representing people that have actually been curtailed. Let me tell you, that is a painful thing for people. That includes rural communities, disadvantaged communities, it includes farms, it includes refuges, it includes the whole suite of things. But that's part of the process. And people that have been curtailed understand that that is part of the process.

And in fact, the way it's worked over the last some years is folks that think they are going to be curtailed based upon their water right. We sit down with the waterboard staff and we work on this methodology and make sure that we all have kind of common set of facts on when the date of that curtailment needs to occur so that people can plan and so they know when that is going to happen. I think if you ask the State Water Board staff, who has been the most aggressive proponent of enforcement over the last 10 years, I think it has to be us.

We have been over there pretty persistently suggesting that they more aggressively enforce. But it's hard work, and I think people need to kind of think about the real context in which that occurs. We have very much supported the $82 million dedicated by the Legislature and the Administration over the last several years to the State Water Board to do that. I believe there's another 31 million in the governor's proposed budget that we support.

We think that will be helpful to the State Water Board to take this on. And we think that the upward program and some of the work there just needs to keep moving forward, and it takes hard work. People need to get under the hood and work with that process. We've also been very much encouraging the kind of the complaint process that you've heard a little bit about where water users on systems can use that process to talk about illegal diversions.

And I think that process needs to be taken a little bit more seriously. I think obviously, folks out on the ground have a real keen sense of what's going on, and I think taking advantage of that is very important. We appreciated the provisions in the governor's water supply strategy to modernize water rights. I think there's some very good things in there that we'd love to continue to work with your Committee and others on in advancing that.

And, in fact, we really appreciate some of the, I know today the focus has largely been upon water rights and kind of the Administration of the water rights process, but there's a lot of broader set of issues that I think would be really helpful. You've heard a lot about groundwater recharge today. That is obviously an important water rights question. And I think implementing that system for groundwater recharge, as you've heard, is really important, as well as other surface water projects throughout the state.

So I think there's a lot of modernization that can take place in California that is, I think, much broader than the conversation today, and I think would probably, actually probably benefit the State of California in some ways more obviously. Like others, we're looking at the set of bills that are before your Committee that several of you have authored, and we look forward to working with you in that process. We think we can bring a practical approach to those bills.

That's, I think, what is important, and we look forward to working with you in that process. I think it ought to be said and just kind of in closing that implementing a water rights system is hard work. I don't think we underestimate that. We can put lots of words on a piece of paper that's easy. Implementing a system is hard work. I say let's get together with the State Water Board and let's work together to implement this system.

That's what we've been doing in the Sacramento Valley, and we want to continue to do that as we prepare for a more modern water system as we go forward. So thank you for the opportunity to be here today. And I did submit the white paper, I think, for the packet I hope folks have yet. Thank you. I hope folks have seen that. And, boy, we're just really open to the discourse around this. Any thoughts, ideas, we just think there's a lot that we can be doing working together to make California's water system more modern. So thank you for that.

Thank you. I will say you're not the only one in the room that represents people affected by curtailed, Lance. But we all understand the pain has.

I'm the first one that spoke and represented folks that have been curtailed, everybody else. It's academic.

Yeah, but this is why we're having this conversation. We understand the pain and it's not working right now, I think, in the way it's structured. But I appreciate your comments that there's a broader conversation. I'm not even keeping us on time with trying to keep it narrow. So there is a lot more to talk about.

Thank you.

Mr. Mclaughlin.

Good afternoon, Madam Chair, Members of the Committee. My name is Russell McGlothlin. I'm a water rights attorney for 23 years, all pretty much focused on California Water Rights Administration policy. It's an honor to be here. I do need to say from the outset that the views I'll express are mine and they're not of my clients or my law firm. I would bring three key messages understand the source of the problem, much of which has been identified already today.

Avoid proposals to scrap our existing structure or regulate reallocations. Instead, focus on tightening, defining, monitoring, and enforcing water priorities to foster greater certainty to allow regulated but markets based reallocations. The problem insufficient definition of rights monitoring oversight markets to reallocate results in uncertainty that frustrates water rights administration, investments, and innovation and perpetuates inefficient use of water. Users often claim rights as the state board, Mr. Ekdahl said, as claims that will not stand up to judicial scrutiny if challenged. Sometimes we call these paper water rights.

There is insufficient procedures to separate the valid from the invalid claims. Among the valid claims, there is insufficient clarity and enforcement of priorities between competing rights. Water is already an inherently uncertain resource because it's shared, it's transient, and it's variable. These inherent challenges are accentuated in California because common law has merged two very different water rights structures, the riparian structure common in the eastern half of the country with the prior appropriation state common in the western half of the country.

And for many of our rights, there is no cap. There's no definition of exactly how much you can take at exactly what flow conditions. But the solution is not to scrap this system or to regulate reallocation. Such proposals will further uncertainty, increase conflict in litigation, and perpetuate inefficient water policy.

The better approach is to lean in to our existing system to foster carefully defined and capped rights that are subject to strong monitoring, strong oversight, and strong enforcement, coupled with enhancement of the supply where feasible, for example, greater high flow capture, conjunctive use, reclamation, and reuse and to structure a carefully managed but robust trading of well defined and capped rights. In short, the solution is to cap rights, enhance supply trade rights, cap, enhance, and trade.

This promotes certainty on which public and private water users can anchor economic, social, and environmental planning and balances consumptive and environmental in stream water demands. Water markets, which are promoted by the water rights certainty and Administration, in turn provide three key benefits. They foster reallocation of water from lower to higher value uses, they reveal the true value of the resource, and they incentivize conservation. So what would this look like? Much you've heard already a clear definition of rights queued to water availability stream flows.

So not just rights generally, but rights up the ladder based upon the water available at any particular time. Improved data, data transparency and availability, Mr. Ekdahl said. It's boring, I think, but very important. I couldn't concur more. Better data and transparency and availability. This is the foundation on which we structure capped and well defined rights. Accurate monitoring and diversions we heard from Assembly Member Bennett the possibility of electronic monitoring, but yes, certainly better monitoring, which is correlated to the rights and the enforcement.

Careful integration of authorized and monitored consumptive versions with the necessary baseline protections for environmental and in stream demands. Source to source flow coordination we don't need to adjudicate all interconnected basins together or define all the rights, but we have to have coordinated management between sources that are interconnected hydrogeologically structured and continual updating. Improvement of technical understanding do adaptive management.

This is a process, and it always has to come back through a feedback loop for adaptive management. And then again, regulated but robust opportunities for water right transfers. Things change. So how do we do this? There's certainly a role for the State Water Board permitting and oversight, but frankly, it's insufficient. The board does not permit riparian or pre 14 diversions or groundwater, and it's not a court with the ultimate authority to adjudicate groundwater rights.

Furthermore, understandably, the staff has so many calls on its time, and you saw, for example, just the pre 14 and riparian right, thousands of rights, each with a claim. That process to put that all on the board is an immense staffing burden, given the resources we presently have. So there's a role for the courts, but this process is relatively slow and it's expensive, but it can be improved. In 2015, the Legislature adopted AB 1390 to reform the adjudication process.

In the groundwater context, that's a perfect example that might be looked at for better, more efficient surface water adjudications as well. There are some modest but very helpful improvements improving existing statutory surface water adjudications adjudications under 2500 at Sec of the Water Code that start with the board and in the courts authorizing the State Board to initiate them, and adjudicating integrated supplies that the PPIC PCL report recommends.

Very good recommendations, but we should also look at more robust possibilities, specific processes or even specific courts for adjudicating watersheds and integrated water supplies like is done in some other states. More deliberate use of special masters to help the courts.

That can be the state board, but it can also be other individuals to process adjudications, more clear rules and process for Post Adjudication Administration of water sources and defined rights, funding for Administration of adjudicated rights, and funding for water masters to help the Administration post adjudication, funding for improved data development organization and access, funding for mediation and facilitation of water rights settlements.

The ideal adjudication is the one that is done following compromise and settlement, what we sometimes call a friendly adjudication, although some people will call that an oxymoron. But it can happen, and facilitating mediation with the judgment day of a decision can pay great dividends. Perhaps it's also time for a new Commission, 45 years ago in 1978, there was the governor's Commission to review water rights. Your report, the PPIC report cited that several times. It's still a very strong document that can be looked at.

But perhaps it's time to do that again now and to explore and advise on approaches and opportunities, study and potentially incorporate lessons from other states, as Ms. Marcus recommended. Look to, for example, Colorado and its water courts. Look to Idaho, as Ms. Marcus mentioned, and their adjudication process. Look to Australia and other countries and how they do it as well. I appreciate that the tightly defined and administered water rights regime I'm advocating is challenging.

It will take a long time and it's very expensive, but there is no shortcut to taming the water commons. This is what it will take. Thank you.

Thank you. You read my mind. I was wondering if you were going to recommend the courts that they have in other states. Any other questions for my colleagues? I know they're late, so they have to go, but I appreciate them being here. I have one question for you, Mr. McGlothlin. You spoke about a little bit about the transfer trade of rights. Can you just go a little bit deeper in your recommendation there?

Certainly, trading does great things. I think we can all recognize it incentivizes conservation and moves our water from inefficient uses to higher use to benefit uses. It doesn't happen where you don't have well defined rights because you don't have scarcity. Scarcity is a primary necessity for to have markets. So you have to have the well defined rights that are correlated to the supply and sustainability.

And then that bucket or that pie, if you will, of the consumptive use, allowing people to trade in a structured, regulated manner really provides benefits. And the place I would direct you to of where this really works is in the adjudicated groundwater basins that have a very well defined rights, have a watermaster administering with court oversight. So there's no question about who has what and how it moves from one person to the other.

As Assembly Member Bennett said this morning, you know when there's an opportunity for transferring the users, then say, let's get our definition, our monitoring, and our enforcement very specific.

Interesting. Thank you.

Can I add just real quick to that?

Yeah.

Water transfers, I think, have been a really effective tool over the last 30 years in California water policy. And I know in the Sacramento Valley, obviously, the important thing is to make sure that the local needs are met. But in areas where there is additional water, there have been transfers to every part of the state. That includes cities, that includes disadvantaged communities, it includes wildlife refuges.

And I think that the transfer mechanism, I think, just shows that the water rights system, I think, in my view, is actually working pretty well because transfers now happen in California without a lot of fanfare. And that wasn't the case 30 years ago.

Interesting. Thank you. Well, I really appreciate this. I think it's been a super helpful hearing. I've learned a lot. I actually have to say I heard a lot of consensus, which I appreciate, doesn't happen a lot in this building, about some things we should be focused on. So thank you all for being here and sharing your expertise. And I'm sure more questions will arise as we work towards solutions to these many problems. Appreciate it. Yeah. Okay. We're going to do in the room first. Yeah.

So we will now move to public comment. We'll be doing 1 minute each, given that I've already kept you all 30 minutes over. And we will start with public comment here in the room. So if you'd like to speak, please come forward to microphone. And just remember to in addition to your comment name and organization, please. Thank you.

Good afternoon, Madam Chair and Members. Chris Anderson, on behalf of the Association of California Water Agencies.

Is that mic on? I'm sorry. Yeah. Okay.

First, just want to thank the Committee and the staff for organizing and the hearing on an incredibly important topic. ACWA represents over 460 public water agencies that collectively deliver 90% of the water used for residential, commercial, agricultural and environmental purposes. Yeah, let's see if we can get it. There we go. California's water right priority system is essential to our state's economic, social and environmental stability.

The water rights that the people, the Legislature and the courts have developed over the past century have provided the legal frameworks based upon which billions of dollars have been invested to make water available for Californians. The Legislature and water agencies in California are acutely aware that climate change is one of the most serious and concerning pressures on our water resources and systems today, and that climate change will exacerbate the hydrologic extremes and increased challenges to water management.

As California's continue to make significant advances in using water efficiently and developing resilient water supplies, utilizing the water right priority system is foundational to ensuring water supply liability. We do appreciate that the Administration and the Water Board are proposing additional improvements to tools that will enhance data and transparency in order to improve water rights. Administration and we know that this year will be full of very robust discussions about several proposals that ACWA will certainly be engaged in.

We certainly believe that any and all legislative proposals must maintain the existing priority system as its legal and operational foundation, working within this existing structure to meeting the water needs of the state, and we look forward to continued discussions and opportunities to collaborate throughout the year. Thank you.

Thank you.

Thank you. Chair Members of the Committee, this is Alex Loomer. On behalf of the Nature Conservancy and Trout unlimited, I really enjoyed the discussion and appreciate you all to dedicating the time to dive into these issues, and I want to flag a couple of relevant bills. California is experiencing water whiplash more frequent and longer droughts punctuated by more intense storms, a byproduct of climate change. Assembly Bill 1272 by Assembly Member Wood is critical to proactively addressing this new reality that we're facing.

By requiring the state to develop principles and guidelines for the diversion and use of water in coastal watersheds during times of water shortage. AB 1272 will allow the state to better protect important coastal rivers and provide more sustainable water supplies for both people and nature. Importantly, the coast represents a bright spot because the watersheds produce more than enough water for people in nature. If only we can manage it wisely and that would be a plus.

Finally, on behalf of the Environmental Defense Fund and the Nature Conservancy, in light of the comments about the importance of water data, I'd also like to note that SB 361 by Senator Dodd will help improve water data systems by upgrading our stream gauges and other water data infrastructure. Comprehensive water data is essential to manage water and meet multiple needs, including the protection of threatened and endangered aquatic species, critical freshwater ecosystems, senior water rights and water transfers thank you for the opportunity to provide comments.

Thank you.

My name is Grenille Bopri. I am a row crop farmer in the legal delta. I'm a trustee to reclamation district 551 and we have partnered with Professor Jeff Mitchell at the UCANR on water efficiency studies. The delta is a unique tidal estuary with surface water constantly flowing up and down as groundwater. Groundwater in most of the legal delta is actually pretty high. Our farm's groundwater reaches a Low of only 12ft deep.

According to NASA's grace program, without proper drainage and nonconsumptive use, lands in the legal delta would see the water table rise above the soil, flooding the region and spurring natural vegetation. And actually, per Department of Water Resources 2009 California Water Plan update, this would actually increase the water use in the delta compared to current agriculture uses.

Here are some of the numbers provided by DUWR tomatoes have the lowest evaporation rate at an annual rate of 34.3 inches, whereas flooded repairing habitats and vegetations had the absolutely highest annual rate of evaporate transpiration of 67.8 inches. Hence any delays in non conceptive water use for agriculture in the legal delta. Per water code Section 878 will increase the rate of evaporation and thus water use in the delta. In the era of climate change, evaporation already far outweighs our rainfall more than ever.

California requires investment in flood water reclamation to maintain the hydrological balance both in the delta and across the state, emphasizing groundwater recharge. For these reasons, I applaud the introduction of AB 305 by Assembly Member Carlos Villapudua in hopes of making these changes. Thank you, Committee thank you.

Hi, Madam Chair and Members of the Committee, my name is Cody Phillips. I'm the policy analyst for California Coastkeeper Alliance. I want to thank you for holding this important hearing today, and while there's a lot to be said, my comments are going to be focused on two points I just really want to highlight.

The first is that it's very important to note that the current water system really embodies what it means to have systemic inequalities, because the system favors the oldest senior water rights but prevented many nonwhite settlers from holding water rights. At the outset, keeping the current system really only works to enshrine those historic inequalities.

Restore the Delta, a nonprofit, just released the results of a California water rights analysis that was actually previously published by DWR, and the results are really not surprising if you keep in mind how the water rights systems was originally dealt with. So any modernizing of the system really can't just look forward. It also has to look backward to make sure that those inequities aren't carried forward.

The second is I want to make sure that the State Water Board isn't just given the legal ability to modernize the water system, but also the resources on the ground to move forward. With that, they have many legal obligations, like the obligation to protect the public trust, to ensure no waste and unreasonable use, and to curtail rights when there's not enough water to go around.

AB 1337 will actually give the Water Board the authority to curtail water rights to protect those necessary needs, but without granting the State Water Board additional resources to enforce those grants, then we're really having some oversight there. So modernizing our water rights includes consideration of both the legal structure and what's happening on the ground. Thank you for the time.

Thank you.

Good afternoon. My name is Ashley Overhouse. I'm the water policy advisor with Defenders of Wildlife. I'm also here on behalf of Restore the Delta, who my colleague just previously mentioned. Thank you to this Committee. And special thanks to Madam Chair for holding this important hearing. We greatly appreciate it and your efforts to enforce water law, specifically by empowering the State Water Board to ensure fish and rivers get water extinction is not a cost of business.

Defenders supports AB 460 and is grateful to all who have worked on the legislation. The last four years and subsequent water management decisions have had real impacts on cities, farms, and also the environment, and fisheries. And with the climate impacts becoming the new normal, we must be better prepared moving forward. That requires changing the status quo and not continuing to rely on waivers or a string of emergency drought declarations.

In addition to the expertise you heard today, defenders also urges lawmakers in the Committee to seek environmental justice perspective potentially on future panels or future hearings, specifically from restore the delta. And we want to thank for the inclusion of tribal voices from the Karuk tribe today, and Madam Chair, for acknowledging the interconnection of the importance of tribal water rights and tribal voices in future hearings and discussions that this Committee will, I'm sure, take on. Thank you so much for your time.

Thank you.

Hello. My name is Michelle Reimers. I'm the General manager for Turlock Irrigation district. We are the oldest irrigation district in the state. We have both senior and post 1914 water rights. I feel like there was a little bit of water right holders left out of this discussion. We do our very best, we have, we're not all bad actors. We're very transparent. We've worked with the State Water Board. We do all of our reporting as public.

I do agree that there is room to improve the water rights system. As it's written today. We support the implementation of the water rights priority system. We support that State Water Board staff use its authority to stop illegal diversions. But I do agree they need more resources. It's been said that the system should be adapted to being more nimble and efficient, and I don't disagree, but I think the infrastructure has to match that as well. I appreciate the opportunity to make these comments. Thanks.

Thank you. I don't see any more comments in the room, so we will go to the phone lines. Moderator are you there?

Thank you.

Awesome.

For public comment. If you wish to make public comment at this time, please press one followed by zero. And we'll go to line 32. Hi, caller on line 32, your phone is open. Are you there?

And just a reminder to the caller's name and organization, if you have one. And we're keeping it to one to two minutes.

Hello, can you hear me?

Yes, we can hear you.

Hi, my name is Stephanie and I'm a ratepayer out in a small, little rural community. Well, it's urban and rural. I just want to say, afternoon, Madam Chair and Committee Members. In the opening, I've been on the phone for quite a while. It was stated how we can better manage, and then it went on to say, when can we get it right? I think those are two simple questions that should have been asked, especially the last 100 years, maybe in the last 40.

But here's my point. It doesn't take a genius to know that this is literally below needs right now. I think what you guys are implementing, and it was stated in your hearing, we are in a crisis and I don't know why we're recreating everything over and over. It seems to be that every time you turn around, and even a gentleman that stated in the last comments, the environmentalist, he stated climate again, you can see it on media. Media is going to push whatever they want.

It's common sense right now. But I think last week or two weeks ago, I was on the flood control hearing and they were talking about getting in touch with the national weather. It's like, come on, that could have been done, like in 1996 when it was electronically, they could get online and access it that's 27 years ago. Why are we still dealing with all these issues? It does not make sense.

And the last thing I need to say is the gentleman that was on the phone, that was Native American, I think the problem would be solved if we all would just leave and hand this land back to the Native Americans. Thank you.

Thank you for calling in. Next caller, please.

Line 40, four zero.

Hi, my name is Tyna. I'm out in Yuba county and just listening to the conversations today. I don't know that I have any great answers either, but I do object that there are not any water rights holders invited to your conversation today. You all seem to be working in an echo chamber. And also, as a Member of the public, I want to make sure you understand that we have no faith in your ability to solve this problem. Thank you.

Thanks for calling in.

Thank you. At this time, there are no further lines in queue for public comment.

Great. Well, then, with that, we will adjourn this hearing. Thanks, everybody, for participating.

Madam Chair. Jump back in the. I want to meet, um.