varner & brandt llp
VARNER & BRANDT LLP LAWYERS A REGISTERED LIMITED LIABILITY PARTNERSHIP REPORT TO THE BOARD OF THE SAN BERNARDINO VALLEY MUNICIPAL WATER DISTRICT
LEGISLATIVE REPORT AND KEY TOPICS November 21, 2017 Summary of Key California Legislative Issues AB 321: •
Summary: This law requires a Groundwater Sustainability Agency (GSA) to solicit the participation of farmers, ranchers, and dairy professionals during the development and implementation of a groundwater sustainability plan. Prior to this bill, existing law, known as the Sustainable Groundwater Management Act, required that all groundwater basins that are designated as subject to critical conditions of overdraft be managed under a groundwater sustainability plan. This law now authorizes any local agency overlying a basin to become a GSA for that basin. This law requires that the GSA seeks the participation of citizen groups, farmers, ranchers, and dairy professionals within the basin region during the development of a groundwater sustainability plan.
•
Status: Approved by the Governor and filed with the Secretary of State on July 17, 2017.
AB 589: •
Summary: This law requires a person who diverts 10 acre-feet of water or more per year under a permit or license to install and maintain a device or employ a method capable of measuring the rate of direct diversion, rate of collection to storage, and rate of withdrawal or release from storage and, until January 1, 2023, would require any diverter who has completed an instructional course regarding the devices or measurement method administered by the University of California Cooperative Extension, including passage of a proficiency test before the completion of the course, to be considered a qualified individual when installing and maintaining devices or implementing methods of measurement that were taught in the course for the diverter’s diversion. The law requires the University of California Cooperative Extension and the State Water Resources Control Board to develop the curriculum of the course and the proficiency test.
•
Status: Approved by the Governor and filed with the Secretary of State on October 4, 2017.
SB 80: •
Summary: This bill would provide for specified notice requirements regarding posting on web sites and sending notices via email pursuant to the California Environmental Quality Act (CEQA) and authorizes a lead agency to electronically file a Notice of Determination (NOD), on Page 1 of 3
any project the lead agency proposes to carry out or approve. This bill would also make filing an NOD mandatory for a project subject to a categorical exemption. •
Status: Passed in the State Assembly on September 7, 2017; passed in the State Senate on September 11, 2017; enrolled on September 13, 2017. Key Water Topics
1. California Supreme Court Declines Review if San Diego Water Case. On September 27, 2017, the California Supreme Court declined review of San Diego County Water Authority v. Metropolitan Water District of Southern California (2017 DJDAR 5905), San Diego Cty. Water Auth. v. Metro. Water Dist. of S. California (2017) 12 Cal.App.5th 1124. This case involved the San Diego County Water Authority (SDCWA) bringing actions against Metropolitan Water District of Southern California (MWD), alleging that the MWD breached a water exchange agreement through the rate charged for transporting water, or “wheeling.” Following bifurcated but coordinated trials, the Superior Court invalidated the rates and entered judgment for the SDCWA. The MWD appealed. The Court of Appeal remanded finding that the Trial Court erroneously held that although the MWD is required to pay its pro rata share of the costs of maintaining the California Aqueduct, these costs may not be considered in calculating the MWD’s wheeling charges, essentially because the MWD does not own the aqueduct. Instead, the Court of Appeal held that the inclusion of the MWD’s system-wide transportation costs, including transportation charges paid to the State Water Project, in the calculation of its wheeling rate does not violate the wheeling statutes (Water Code § 1810 et. seq.), common law, or the parties’ agreement. The allocation of “water stewardship” charges to the wheeling rate was proper. [See Daily Appellate Report, September 29, 2017.] 2. State Water Board Adopts Order on Long-Term Management of Salton Sea. On November 8, 2017, the State Water Resources Control Board (Board) accepted a landmark agreement that defines the state’s commitment to restore and manage the Salton Sea to protect public health and critical Pacific flyway habitat. The agreement also outlines the Board’s oversight role in monitoring and ensuring progress toward the goals of the Salton Sea Management Plan, which sets annual milestones for habitat restoration and dust-suppression projects over the next 10 years. Agreement on the plan was reached through discussions among a broad group of stakeholders led by the California Natural Resources Agency. The Board’s action revises a 2002 order approving a long-term water transfer from the Imperial Irrigation District to the San Diego County Water Authority, the Coachella Valley Water District and the Metropolitan Water District of Southern California. Under terms of that order, water deliveries aimed at mitigating the Salton Sea’s receding shoreline are no longer required after this year. The Salton Sea Management Plan, released earlier this year, outlines a range of measures to address the impacts of reduced water flows. The State has committed more than $80 million in voter-approved bond funds to restore habitat and suppress dust at the lake in the near term. A $14 million grant from the state Wildlife Conservation Board helps to fund habitat conservation at the Salton Sea, and the Salton Sea Authority will administer a $7.5 million U.S. Department of Agriculture grant for water conservation, wetland creation, and air quality mitigation. [See https: //mavensnotebook.com/2017/11/08/news-worth-noting-state-water-board-adopts-order-on-longterm-management-of-salton-sea/.] Page 2 of 3
3. California Landmark Water-Sharing Deal May Be Crumbling. The State’s biggest urban supplier hopes to divert water from farms in the Palo Verde Valley by encouraging conservation. But the move may endanger an existing water-sharing deal that has become a model of cooperation. Twelve years ago, the Palo Verde Irrigation District in Blythe, California, signed an agreement with the Metropolitan Water District of Southern California (MWDSC). It allowed MWDSC to pay Palo Verde farmers to fallow up to 35 percent of their acreage in times of water scarcity, and take delivery of the unused irrigation water, via canal, to serve its urban customers in the Los Angeles area, some 200 miles away. It’s been considered a great deal for both parties. Palo Verde farmers made millions “loaning” their water, while MWDSC gained access to the irrigation district’s senior water rights in the Colorado River, which remain available when the MWDSC’s other supplies are restricted during drought. It also became a promising alternative to the so-called “buy and dry” deals that have taken farmland out of production permanently in other parts of the West. However, in September, Palo Verde filed a lawsuit against MWDSC, alleging that it violated state law when it purchased 12,000 acres of farmland within the Palo Verde district in 2015, adding to 10,000 acres it had bought previously. This made MWDSC the largest single landowner in the valley, controlling almost 20 percent of the entire district, in addition to lesser control over more land via the fallowing contracts. MWDSC has leased the land to other farmers under terms that encourage water conservation, with a goal to divert any conserved water to the L.A. metro area. Palo Verde officials fear the era of cooperative fallowing is over, and that MWDSC is now engaging in a new kind of “buy and dry” program that will eventually harm the rural region’s economy. [See https://www.newsdeeply.com/water/articles/ 2017/11/13/farm-vs-city-california-landmark-water-sharing-deal-may-be-crumbling.]
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LEGISLATIVE REPORT AND KEY TOPICS November 21, 2017 Summary of Key California Legislative Issues AB 321: •
Summary: This law requires a Groundwater Sustainability Agency (GSA) to solicit the participation of farmers, ranchers, and dairy professionals during the development and implementation of a groundwater sustainability plan. Prior to this bill, existing law, known as the Sustainable Groundwater Management Act, required that all groundwater basins that are designated as subject to critical conditions of overdraft be managed under a groundwater sustainability plan. This law now authorizes any local agency overlying a basin to become a GSA for that basin. This law requires that the GSA seeks the participation of citizen groups, farmers, ranchers, and dairy professionals within the basin region during the development of a groundwater sustainability plan.
•
Status: Approved by the Governor and filed with the Secretary of State on July 17, 2017.
AB 589: •
Summary: This law requires a person who diverts 10 acre-feet of water or more per year under a permit or license to install and maintain a device or employ a method capable of measuring the rate of direct diversion, rate of collection to storage, and rate of withdrawal or release from storage and, until January 1, 2023, would require any diverter who has completed an instructional course regarding the devices or measurement method administered by the University of California Cooperative Extension, including passage of a proficiency test before the completion of the course, to be considered a qualified individual when installing and maintaining devices or implementing methods of measurement that were taught in the course for the diverter’s diversion. The law requires the University of California Cooperative Extension and the State Water Resources Control Board to develop the curriculum of the course and the proficiency test.
•
Status: Approved by the Governor and filed with the Secretary of State on October 4, 2017.
SB 80: •
Summary: This bill would provide for specified notice requirements regarding posting on web sites and sending notices via email pursuant to the California Environmental Quality Act (CEQA) and authorizes a lead agency to electronically file a Notice of Determination (NOD), on Page 1 of 3
any project the lead agency proposes to carry out or approve. This bill would also make filing an NOD mandatory for a project subject to a categorical exemption. •
Status: Passed in the State Assembly on September 7, 2017; passed in the State Senate on September 11, 2017; enrolled on September 13, 2017. Key Water Topics
1. California Supreme Court Declines Review if San Diego Water Case. On September 27, 2017, the California Supreme Court declined review of San Diego County Water Authority v. Metropolitan Water District of Southern California (2017 DJDAR 5905), San Diego Cty. Water Auth. v. Metro. Water Dist. of S. California (2017) 12 Cal.App.5th 1124. This case involved the San Diego County Water Authority (SDCWA) bringing actions against Metropolitan Water District of Southern California (MWD), alleging that the MWD breached a water exchange agreement through the rate charged for transporting water, or “wheeling.” Following bifurcated but coordinated trials, the Superior Court invalidated the rates and entered judgment for the SDCWA. The MWD appealed. The Court of Appeal remanded finding that the Trial Court erroneously held that although the MWD is required to pay its pro rata share of the costs of maintaining the California Aqueduct, these costs may not be considered in calculating the MWD’s wheeling charges, essentially because the MWD does not own the aqueduct. Instead, the Court of Appeal held that the inclusion of the MWD’s system-wide transportation costs, including transportation charges paid to the State Water Project, in the calculation of its wheeling rate does not violate the wheeling statutes (Water Code § 1810 et. seq.), common law, or the parties’ agreement. The allocation of “water stewardship” charges to the wheeling rate was proper. [See Daily Appellate Report, September 29, 2017.] 2. State Water Board Adopts Order on Long-Term Management of Salton Sea. On November 8, 2017, the State Water Resources Control Board (Board) accepted a landmark agreement that defines the state’s commitment to restore and manage the Salton Sea to protect public health and critical Pacific flyway habitat. The agreement also outlines the Board’s oversight role in monitoring and ensuring progress toward the goals of the Salton Sea Management Plan, which sets annual milestones for habitat restoration and dust-suppression projects over the next 10 years. Agreement on the plan was reached through discussions among a broad group of stakeholders led by the California Natural Resources Agency. The Board’s action revises a 2002 order approving a long-term water transfer from the Imperial Irrigation District to the San Diego County Water Authority, the Coachella Valley Water District and the Metropolitan Water District of Southern California. Under terms of that order, water deliveries aimed at mitigating the Salton Sea’s receding shoreline are no longer required after this year. The Salton Sea Management Plan, released earlier this year, outlines a range of measures to address the impacts of reduced water flows. The State has committed more than $80 million in voter-approved bond funds to restore habitat and suppress dust at the lake in the near term. A $14 million grant from the state Wildlife Conservation Board helps to fund habitat conservation at the Salton Sea, and the Salton Sea Authority will administer a $7.5 million U.S. Department of Agriculture grant for water conservation, wetland creation, and air quality mitigation. [See https: //mavensnotebook.com/2017/11/08/news-worth-noting-state-water-board-adopts-order-on-longterm-management-of-salton-sea/.] Page 2 of 3
3. California Landmark Water-Sharing Deal May Be Crumbling. The State’s biggest urban supplier hopes to divert water from farms in the Palo Verde Valley by encouraging conservation. But the move may endanger an existing water-sharing deal that has become a model of cooperation. Twelve years ago, the Palo Verde Irrigation District in Blythe, California, signed an agreement with the Metropolitan Water District of Southern California (MWDSC). It allowed MWDSC to pay Palo Verde farmers to fallow up to 35 percent of their acreage in times of water scarcity, and take delivery of the unused irrigation water, via canal, to serve its urban customers in the Los Angeles area, some 200 miles away. It’s been considered a great deal for both parties. Palo Verde farmers made millions “loaning” their water, while MWDSC gained access to the irrigation district’s senior water rights in the Colorado River, which remain available when the MWDSC’s other supplies are restricted during drought. It also became a promising alternative to the so-called “buy and dry” deals that have taken farmland out of production permanently in other parts of the West. However, in September, Palo Verde filed a lawsuit against MWDSC, alleging that it violated state law when it purchased 12,000 acres of farmland within the Palo Verde district in 2015, adding to 10,000 acres it had bought previously. This made MWDSC the largest single landowner in the valley, controlling almost 20 percent of the entire district, in addition to lesser control over more land via the fallowing contracts. MWDSC has leased the land to other farmers under terms that encourage water conservation, with a goal to divert any conserved water to the L.A. metro area. Palo Verde officials fear the era of cooperative fallowing is over, and that MWDSC is now engaging in a new kind of “buy and dry” program that will eventually harm the rural region’s economy. [See https://www.newsdeeply.com/water/articles/ 2017/11/13/farm-vs-city-california-landmark-water-sharing-deal-may-be-crumbling.]
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