February 27, 2017 – Claiming that California’s “water management at the state level is broken,” Assembly member Adam C. Gray (D-Merced) plugged introduction of his Assembly Bill 313 via Maven’s Notebook on February 6, 2017.

In his cliché-ridden press release, Mr. Gray argues that “anyone who has tried to work with the state on water knows that the left hand doesn’t know what the right hand is doing, conflicts of interest are the norm, and state agencies act as their own prosecution, judge and jury. The net effect,” he contends, “is an ineffective bureaucratic maze which leaves us unable to capitalize on vital opportunities and prioritizes special interests working behind the scenes over good public policy.”

AB 313 would reorganize state water governance to advance water contractors’ interests over legitimate water right holders in the areas of permitting, enforcement, and settling water rights disputes (called “adjudications”). It would create yet another new department, the State Water Project Commission.

The bill would remap, but not eliminate, the state’s conflict of interest in water, and further distance state water agencies from public account.

The idea of AB 313 is to harness state bureaucracy to better serve the California Department of Water Resources, the Bureau of Reclamation and state and federal water contractors. In this light, Mr. Gray’s proposal is a companion bill to recent congressional passage of the Water Infrastructure Investment Now bill, S. 612, whose Subtitle J was authored by Representative David Valadao and Senator Dianne Feinstein, and signed into law during President Barack Obama’s lame-duck session last December.

But let’s take Mr. Gray’s rhetoric at face value for a moment. Do his claims withstand scrutiny?

Left Hand, Right Hand
Mr. Gray argues that the state’s left hand does not know what its right hand is doing—a classic bureaucratic problem, sometimes called “staying in silos.” He cites no examples, and his proposed bill no findings on this accusation.

To be fair, staffs of state and federal water agencies work hard to coordinate amongst themselves and with others—to operate their water projects during drought and flood to protect public health and safety, to accommodate in real time the needs of migrating salmon and steelhead and other water supply and ecological problems. These are important tasks state and federal agency professionals perform.

During recent drought years, DWR, the Bureau and the State Water Board all coordinated with each other; some might argue they do so to a fault with all the meetings and conferences their officials attend. They do not always get things right, as winter-run and spring-run Chinook salmon experienced disastrously during the drought summers of 2014 and 2015 along the Sacramento River. But agency failures occur not for lack of talking to each other.

Conflict of Interest? You Bet.
Assembly member Gray’s mention of a state “conflict of interest” applies richly to the State Water Board and the Department of Water Resources when it comes to Central Valley and Bay-Delta issues. On one hand, the State Water Board is our state’s water regulator, and on the other, DWR is the state’s water developer of the State Water Project in close coordination with the U.S. Bureau of Reclamation’s Central Valley Project. How can one hand regulate the other without a conflict of interest?

But what we at Restore the Delta think is a particularly acute conflict is probably not what Assembly member Gray has in mind. AB 313 would split water rights enforcement authority from permitting authority and remove both from State Water Board control. Enforcement of water rights would be handled by the Office of Administrative Hearings (which presently has zero expertise in water rights) while DWR would retain permitting—yes, DWR would handle new permits in the world of AB 313.

On February 9, 2017, Rick Gilmore, general manager of Byron Bethany Irrigation District (BBID) in the southern Delta, issued a statement supporting AB 313 which may explain what Gray means.

In his statement, Gilmore complained, “The current system allows the State Water Board to conduct water rights hearings in which Board staff act as prosecutors, presenting a case to Board members who act as the judge, in a court the Board runs themselves,” Gilmore said. “This unchecked power prevents water right holders across the state from being fairly treated.”

This is whining about an “unchecked” governmental power. Regulatory agencies have long had combined powers to streamline the public’s access to due process. To lawyers, this is simply the State Water Board’s long-settled “quasi-judicial” role, a normal part of Board enforcement activity, and has been for decades. It is also typical of most regulatory boards, state and local. Board staff has been empowered for literally decades to prosecute water rights violations. All parties may challenge agency actions in court.

Prosecutor, Judge, and Jury—So?
In 2015, the State Water Board alleged that BBID improperly diverted water from the Delta near the state and federal Delta export pumps near Tracy.

The case against BBID was dismissed in 2016 for lack of evidence, acknowledges Gilmore. For one thing, BBID’s attorney was able to air the district’s vigorous defense fully before Board hearing officers. Despite Board staff having prosecuted BBID, the Board’s hearing officers (led by engineer Tam Doduc) saw that the prosecution’s case was poorly mounted. Due process was served. Case dismissed.

While AB 313 provides that the Office of Administrative Hearings (OAH) would process enforcement and adjudication “decisions,” and succeed the State Water Board to this authority, its “decisions” would have only the status of “recommendations” that would go to the director of the DWR for a final decision. (See AB 313, Section 1, proposed Water Code section 11376.5.)

With AB 313 in place, had OAH challenged BBID’s diversions in the same situation, its determinations would have to be recommended to the Director of DWR for a final opinion. How would that work out for BBID?

AB 313 would create more, not less bureaucracy, more confusion and less coherence in state water regulation. Two agencies—not just one, like the State Water Board at present—would need to have water rights-related records—DWR and the OAH. They would have to coordinate and synchronize records across department lines, rather than the present internal communication for a single archive that now occurs between enforcement and permitting staff at the State Water Board. It’s a recipe for red tape and inefficiency. Where is the justice or efficiency in that?

Yet More Bureaucracy!
There is still more to AB 313, alas.

AB 313 would also establish a new state department called the State Water Project Commission. The bill would take away from DWR its present State Water Project construction and operation matters—including the SWP’s water rights.

This change merely relocates the state’s conflict of interest in water from one department to another. Instead of the State Water Board as regulator and DWR as operator of the SWP, you would have OAH as regulator and the Commission as operator. Different agencies; same conflict of interest. How is that an improvement in water regulation and law?

It’s actually worse. The SWP commission would have nine appointees to govern the State Water Project, all of them appointed by California’s governor to staggered four-year terms. Commissioners would have very small stipends not to exceed $500 per month, guaranteeing they would all be wealthy individuals or paid by well-connected water contractors to ensure that their interests would be well represented in SWP commission decision making.

This would represent a virtual privatization of control over the State Water Project by the contractors. SWP commissioners would be accountable politically only to the Governor and to the water contractors, who would be guided by campaign donations by and large, opening new vistas of potential pay-to-play corruption for enterprising water buffaloes.

And California would have the SWP commission coming to DWR for matters affecting SWP water rights, similar to how DWR comes now before the State Water Board. The difference: the SWP and its commission would be less accountable to the public than ever.

In Defense of the State Water Board
The Legislature gave the State Water Board authority to regulate both water quality and water rights in 1967. Fifty years later, the wisdom of this regulatory structure lies in recognizing that in many instances, the basis for a useable water right is the protection of water quality in the state’s water bodies.

Sometimes to protect water quality, it is necessary to adjust water rights. Nowhere is this more true than in the Bay-Delta estuary. Until the Legislature gave both authorities to one agency, there were big problems—in the Bay, the Delta, and elsewhere—with sewage, agricultural and urban polluted runoff, and long-vested water rights were harmed by these environmental problems. And no government body was responsible or accountable for solving them. Those were bad old days.

Having the two types of authority under one roof made for a much more accountable government agency—the State Water Resources Control Board—that could more efficiently regulate and protect water rights by regulating and protecting water quality in California. Undeniably, water quality in California has improved since 1967 when the Legislature combined these two functions in the State Water Board.

Pull those two authorities apart—as AB 313 would—and California, the Central Valley and the Bay-Delta estuary would return to a time when the state lacked power to protect water quality because it lacked the ability to permit and enforce water rights—and to protect rights fro lack of coherent water quality enforcement. Could the State Water Board do better today using these combined powers? Of course. But to undo them would be a worse bureaucratic, legal, public health, and environmental nightmare.

Worst of all, with AB 313 it would be self-inflicted.

As rock ’n’ roller Pete Townshend of The Who once sang, “Meet the new laws! Same as the old laws!” AB 313 is not yet law. But it opens a new front of attack—government organization—by state and federal water contractors to remap how the State of California governs water.

We look for more such attacks ahead.