SB 389: New Law Sharpens the Microscope's Focus on Water Rights

10.23.2023

On October 8, 2023, Governor Gavin Newsom signed Senate Bill 389 (“SB 389”) granting new water rights powers to the State Water Resources Control Board (“SWRCB”). With SB 389’s passage the Legislature has signaled a continued interest in increasing the State’s role with respect to water rights.^[1]

As explained by the SWRCB, a “riparian water right is a right to use the natural flow of water on riparian land” and riparian land is “land that touches a lake, river, stream, or creek.”^[2] An appropriative right is held by “one who takes water for use on non-riparian land or who uses water that would not be there under natural conditions on riparian land appropriates water.”^[3] An appropriative right acquired before 1914 is know as a pre-1914 appropriative water right. Although riparian and pre-1914 appropriative water right holders do not need a water rights permit issued by the SWRCB, pre-1914 appropriative water right holders do need a permit if the use of water has increased since 1914.^[4] Riparian and pre-1914 appropriative water rights can only be confirmed by the courts.^[5]

The Planning and Conservation League (“PCL”), a California environmental group founded in 1965, sponsored SB 389. As summarized in an April 20, 2023 Senate Committee on Natural Resources and Water legislative analysis (“April 2023 Senate Analysis”), PCL and other environmental groups submitted a coalition letter that included the following background:

“[n]either holders of riparian rights nor pre-1914 appropriative rights require a permit or license from [SWRCB]. According to one study, self-reported riparian and pre-1914 water claims account for the diversion of over 2.3 million acre-feet of water a year from the Sacramento-San Joaquin Delta watershed. Because [SWRCB] does not issue permits or licenses for riparian and pre-1914 appropriative rights, the extent and scope of these rights are poorly understood. …

[SWRCB] presently lacks the tools for promptly investigating and determining whether senior water right claims are inflated or represent the amounts that the claimants have the right to divert and use. Reforms allowing [SWRCB] to verify these claimed water rights could make water available for more junior water rights holders and for fishery and other beneficial uses of water in times of scarcity.

The Water Code amendment proposed by SB 389 would address this gap in [SWRCB] authority by allowing [SWRCB] to selectively investigate and determine whether a water right claimant, diverter, or user is diverting or using water under a defensible claim of right. With this authority, [SWRCB] will have the ability to better manage the system for the benefit of all users, and the ecology of California’s many beautiful streams.”^[6]

As originally introduced, SB 389 would have given the SWRCB the right to “determine” certain water rights based on its investigations. As summarized in the April 2023 Senate Analysis, SB 389 would have:

“3) After notice and opportunity for hearing, authorize[d] SWRCB to issue a decision or order determining the diversion and use basis of right, including the authorized scope of the diversion and use, or may issue a decision or order determining that the diversion and use is not authorized under any basis of right.

4) Provide[d] that, in determining whether a holder of an appropriative water right has forfeited the right or any portion of the right, SWRCB is not required to find the existence of a conflicting claim by any water right holder within the stream system during the period of forfeiture.

5) [Put] the burden of proving by the preponderance of evidence the elements of the basis of right on the water right claimant, diverter, or user in any SWRCB proceeding to determine a diversion and use basis of right.”

The chaptered version of SB 389 removed the “determination” power and instead only allows the SWRCB to “investigate and ascertain” whether or not a water right is valid. As explained in an August 14, 2023 Assembly Committee on Appropriations legislative analysis:

“The most recent amendments removed what would have been a new authority for the State Water Board to ‘determine’ the validity of water rights. Instead, the bill expands the State Water Board’s existing authority to investigate and ‘ascertain’ whether water has a valid claim or appropriative water right for its use. This change has the effect of slightly expanding the State Water Board’s existing authority to ascertain water availability, by allowing investigation of claims of riparian as well as appropriative rights.”^[7]

Notwithstanding the “determination” change, a number of stakeholders remained “opposed” to SB 389 with at least one stakeholder contending that “[s]ubstantive changes to the state’s water rights will have ripple effects with unintended consequences to what is a complex system.” We will continue to monitor the impact of SB 389 and stand ready to advise public and private water rights holders in this new regulatory environment.