11/9/2009  by Stoel Rives LLP.

Say goodbye to water use as usual. On November 5, 2009, the California Legislature passed several landmark water bills characterized by Governor Arnold Schwarzenegger as "the most comprehensive water infrastructure package … in the history of California." The five-bill package is the result of a herculean bipartisan effort that includes an $11.1 billion bond measure that requires voter approval to pay for a comprehensive infrastructure program. The major components of the five bills are:

Senate Bill X7 1: Delta Governance and Management.

This bill, which sets forth co-equal goals of providing a more reliable water supply and protecting the Delta ecosystem, creates mammoth changes to Delta governance in an effort to respond to the Sacramento-San Joaquin Delta's water infrastructure and watershed crisis. While SB X7 1 does not authorize the construction of a canal through or around the Delta, often referred to as a peripheral canal, it does provide for the creation of a new seven-member governing council to oversee management of the Delta, which is authorized to approve or disapprove the controversial peripheral canal. More specifically, this bill:

• Creates a new and independent state agency, the Delta Stewardship Council ("Council"), authorized to develop and implement a comprehensive management plan for the Delta to meet the needs for reasonable and beneficial uses of water. The Council is given consistency jurisdiction over certain state and local agency actions that will occur within the boundaries of the Delta. An appeal provision is established to permit a person to challenge the consistency of a proposed action within the Council's jurisdiction.
• Revises the existing Delta Protection Act of 1992 to reduce the members on the existing Delta Protection Commission from 23 to 15. The bill requires the Commission to appoint at least one advisory committee, consisting of representatives from state agencies and stakeholders interested in the Delta's water supply, ecosystem, socioeconomic sustainability, and utility infrastructure, to provide input based on their differing perspectives of the Delta.
• Establishes a new conservancy, the Sacramento-San Joaquin Delta Conservancy, charged with the primary authority to implement ecosystem restoration, environmental protection, and economic well-being in the Delta.
• Requires the State Water Resources Control Board to establish new flow criteria for the Delta ecosystem necessary to protect public trust resources.

Senate Bill X7 2: Water Bond Measure.

The $11.1 billion water bond measure is expected to be on the November 2010 ballot. It includes earmarks for the following:

• $455 million for drought relief, including water conservation and efficiency projects.
• $1.5 billion for water supply reliability.
• $2.25 billion for Delta sustainability.
• $3 billion for water storage projects, including surface storage, groundwater storage, and conjunctive use projects.
• $1.785 million for conservation and watershed protection.
• $1 billion for groundwater protection and water quality.
• $1 billion for water recycling programs.

This bill creates new regulations to monitor groundwater levels throughout the state. For the first time in California, statutes will require specified entities to file standardized groundwater monitoring reports. Specifically:

• This bill requires groundwater elevations in all groundwater basins to be monitored locally and the data to be made readily available.
• This bill permits local agencies to qualify as the monitoring agency for certain portions of a basin or sub-basin as designated by the Department of Water Resources.
• If the state is required to perform groundwater monitoring functions, prescribed local entities would not be eligible for water grants or loans.

This conservancy bill requires sustainable water use and mandatory reductions. It requires:

• The state to achieve a 20% reduction in urban per capita water use by December 31, 2020 with incremental progress of 10% reduction by 2015.
• Each urban water supplier to develop water use targets by 2011.
• Agricultural water suppliers to implement efficient water management practices by July 2012 and prepare water management plans by December 2012.
• The Department of Water Resources to develop water use reporting forms.
• Every urban and agricultural water supplier to comply with water conservation requirements in order to be eligible for state water grants or loans.

Senate Bill X7 8: Water Rights Enforcement.

This legislation, which was weakened in the final package, may see additional revisions in the next legislative session. This water rights bill:

• By removing exemptions in existing law, requires most diverters of surface water, including riparian and pre-1914 users, to submit diversion and use statements to the State Water Resources Control Board. This requirement does not apply to diversions from springs of less than 25 acre-feet in any year and registered stockpond users. The statements require information regarding the person submitting the statement, the area in which the water is diverted and used, the purpose of the use, the name of the water source, the capacity of the diversion works, and the year in which the diversion commenced.
• Subjects a person to a misdemeanor penalty of $1,000 or six months imprisonment for making a material misstatement in the diversion and use statement.
• Subjects a person to civil liability of $1,000, plus $500 per day for failing to file a use statement after the State Water Resources Control Board has called the violation to the diverter's attention.
• Subjects a person to civil liability of $25,000, plus $1,000 for each day for tampering with a measuring device and failing to correct the violation after notification from the State Water Resources Control Board.
• Appropriates money from certain bond acts to support the State Water Resources Control Board enforcement efforts, including the addition of 25 enforcement staff.

The Governor is expected to sign the water bills today. Doing so will be the genesis to a framework of a new water policy of sustainability touching every segment of the state's population that, even with the best of intentions, is sure to ignite controversies in the years to come among the various water agencies, stakeholders, water users, and voters.

If you have questions about the issues addressed in this alert, please contact:

Barbara Brenner at  This e-mail address is being protected from spambots. You need JavaScript enabled to view it or (916) 319-4676
Michael Campos at  This e-mail address is being protected from spambots. You need JavaScript enabled to view it or (916) 319-4655
Craig Wilson at This e-mail address is being protected from spambots. You need JavaScript enabled to view it or (916) 447-0700
Stacy Gillespie at This e-mail address is being protected from spambots. You need JavaScript enabled to view it or (916) 319-4649