21st Century Challenges for California Water Law

Stefanie Hedlund

Best Best & Krieger LLP

Why do water lawyers love California?

“In California, whiskey is for drinking, and

water is for fighting.” -- Mark Twain

Water Supplies

• Surface Water

• Groundwater

• Recycled Water

State Water Project

• Development delayed by Depression, then WWII

• 1959 - California Water Resources Development Bond Act, aka the Burns-Porter Act

– Authorized $1.75 billion in bonds to assist in financing the construction of the state water facilities.

• 1960 – voters approved the Act & the bonds

• Met contracts w/ SWP

• Water permits granted to DWR

State Water Project (SWP)

• Never fully built out – paper water v. wet water dilemma

• Contracted to deliver 4.2 MAFY

• D-1485 estimated dependable supplies @ 2.3 MAFY

• That # may go down, depending on effects of other environmental laws

State Water Project • About 1/2 of the SWP

supply comes from Lake Oroville in Butte County

• Rest is developed from the Sacramento-San Joaquin Delta

• Pumped south from Tracy into the California Aqueduct

• Some of the flows are re-regulated in San Luis Reservoir, a joint-use facility

Themes in California Water Law

Connection Between Property Ownership and Right to Use Water

All Water Rights Are Usufructuary (“Use”), No Private Ownership

California has most complex water law in the United States

• Surface water - riparian, appropriate, prescriptive

• Groundwater – overlying, appropriative, prescriptive

“And you may ask yourself – Well … how did I get here”

– The Talking Heads

The California Legislature

• 1850

• Probably late in the afternoon

• In California, water is located where the people aren’t– Northern California water supplies

– Southern California water demand

• Concurrent growth of population, agriculture, and industry

• New (post-facilities) environmental concerns

Supply and Demand ProblemsSupply and Demand Problems

Riparian Rights

– Right of landowner next to surface water to use enough water to meet needs of that land

– Correlative and of equal priority

– Runs with land, not lost by non-use

– Not quantified

– Not regulated or permitted by State

Independence & Statehood

• Inherited U.S. legal system – based on English common law principles

• Riparian rights – Right of landowner adjacent to a watercourse to flow

sufficient to meet needs of that land

– Correlative & equal

– Works well in wet environments like England

– Also applied to owners of land overlying groundwater basins

Riverside County Early 1900’s

• Riparian rights do not work well in arid lands

• By 1887, Colorado, Utah, Idaho, Montana, Wyoming, New Mexico, the Dakotas and Arizona had legislatively eliminated them in favor of appropriative rights

• What was happening in California?

The Gold Rush

Mining – large-scale irrigation diversions in mining ditches

Miners didn’t own land

Prior appropriation

Appropriative Water Right

• Right to divert specific quantity to specific location for specific purpose(s)

• Does not depend on ownership of land

• “First in time, first in right”

• “Use it or Lose it”

• May be used on lands away from streams or outside a watershed

• All other western states eliminate riparian rights

• In 1886 California Supreme Court writes 100 page decision keeping both riparian and appropriative rights

• Now there are a small number of riparian rights but…

Groundwater Law

Early 1900’s - groundwater starts to emerge as a source of water

Percolating Groundwater

English law is Rule of Capture

Groundwater Law

California Supreme Court rejects rule of capture

Effectively adopts riparian right for groundwater (“overlying right”)

Overlying Right

• To use percolating groundwater must own overlying property

• Must be used on overlying property• Not quantified• Correlative• Not lost by non-use• Not regulated or permitted

Appropriative Right

• Right to pump specific quantity

• Does not depend on land ownership

• “First in time, first in right”

• Not permitted or regulated

• Lost by non-use

• Must be surplus to overlying uses

• Almost all municipal and industrial uses are appropriative

California has no statewide regulation of groundwater

Texas is only other State that doesn’t have some type of comprehensive groundwater regulation

Where are We Now?

Surface Water

• Riparian rights unregulated

• Appropriative rights regulated and prioritized based on time use began, not on economic value or current societal values

Where Are We Now?

Underground Water

Largely unregulated, agricultural uses (overlying uses) generally have priority

Where Are We Now?

Old Rule of Ground Water Law:

“Pump Until You Get Sued”

Where Are We Now?

Revised Rule of Groundwater Law:

“Pump Until a Judge Tells You Not To”

Current Challenges

Groundwater Regulation• Unquantified overlying rights

• Conjunctive Use in unregulated groundwater basins

• Ownership of stored underground water

• Overlying priority

Current Challenges

Recycled Water • Water Code Section 1210 states that owner of

treatment plant holds exclusive right as against suppliers

• After water enters ground?

• After water transported in river?

• Must it be used directly?

Current Challenges

Environmental Uses

• Water rights for instream uses?

• Endangered Species Act

Current Challenges

Land/Water Rights Connection• Should it be severed?• Chile (privatized resource) • Australia (public resource) – freely

transferrable• Pros – economically efficient, promote

reallocation• Cons – social and environmental costs

Water Planning

Statutory and case law from the last 10 years, and particularly the last 5, mandate that water supply planning be a critical part of the California Environmental Quality Act (CEQA) process for new development.

Water supply planning requirements are most acute for large projects.

Relevant statutes related to water supply

• In 2001 the Legislature enacted two statutes related to the water supply planning process– “SB 610” (Water Code, § 10910 et seq.)

– “SB 221” (Gov’t Code, § 66493 et seq.)

• These statutes apply to large scale development projects at the initial stage of environmental review (SB 610), and also at the subdivision map stage (SB 221), to ensure that water will actually be available when projects are built.

• Under SB 610 the city or county (i.e., the land use authority) must request a “water supply assessment” (WSA) from the applicable public water system provider. If there is no water provider, the city or county must prepare the WSA.

• Water Code, §10912 defines “Project” as any of the following:– Residential development of more than 500 dwelling units.– Shopping center or business employing more than 1,000 persons or with more than

500,000 square feet of floor space.– Commercial office building employing more than 1,000 persons or with at least

250,000 square feet.– Hotel or motel, or both, having more than 500 rooms. – Industrial, manufacturing, or processing plants, or industrial parks planned to house

more than 1,000 persons, occupying more than 40 acres of land, or having more than 650,000 square feet of floor area.

– A mixed-use project that includes one or more of the above.– A project that would demand an amount of water equivalent to, or greater than, the

amount of water required by a 500 dwelling unit project.

• If a public water system has fewer than 5,000 service connections, then "project" means any proposed development that would represent an increase of 10 % or more in the number of the public water system's existing service connections (or call for an equivalent amount of water).

• The WSA must describe whether the project has an adequate water supply under existing and future conditions. More specifically, the WSA must evaluate whether the water supplier’s “projected water supplies” will meet the “projected water demand” for the project, when considered in light of “existing and planned future uses” that are or will be dependent on such supplies, “including agricultural and manufacturing uses.” (Water Code, at § 10910(c)(4).)

Summary of SB610 and SB221• If a public water system has fewer than 5,000 service connections, then

"project" means any proposed development that would represent an increase of 10 % or more in the number of the public water system's existing service connections (or call for an equivalent amount of water).

• The WSA must describe whether the project has an adequate water supply under existing and future conditions. More specifically, the WSA must evaluate whether the water supplier’s “projected water supplies” will meet the “projected water demand” for the project, when considered in light of “existing and planned future uses” that are or will be dependent on such supplies, “including agricultural and manufacturing uses.” (Water Code, at § 10910(c)(4).)

Conclusions

A City or County must have a Water Supply Assessment prepared foA City or County must have a Water Supply Assessment prepared for any large project r any large project undergoing CEQA compliance, e.g. specific plans or other large dundergoing CEQA compliance, e.g. specific plans or other large development.evelopment.

The water supply agency’s Urban Water Management Plan may be relThe water supply agency’s Urban Water Management Plan may be relied upon if it ied upon if it anticipated the demand from the Project and contains all Water Canticipated the demand from the Project and contains all Water Code requirements.ode requirements.

WSAs must look forward at least 20 years, covering all types of WSAs must look forward at least 20 years, covering all types of water conditions.water conditions.

The water supplier must offer a plan to acquire additional supplThe water supplier must offer a plan to acquire additional supplies if adequate supplies are ies if adequate supplies are not available. not available.

If firm water supplies are not available, specific sources of If firm water supplies are not available, specific sources of wetwet water must be identified water must be identified and analyzed. Illusory (and analyzed. Illusory (paperpaper) water supplies cannot be relied upon e.g. unfulfilled State ) water supplies cannot be relied upon e.g. unfulfilled State Water Project entitlements purchasing water rights may work. IgWater Project entitlements purchasing water rights may work. Ignoring the water noring the water deficiency problem altogether, or calling the potential lack of deficiency problem altogether, or calling the potential lack of water “speculative,” will also water “speculative,” will also not work.not work.