Commentary: Farmers should brace for new state water rules, fees

By Alexandra Biering

California farmers and ranchers who divert water and violate orders or reporting requirements from the California State Water Resources Control Board may feel sticker shock when new increased penalties take effect Jan. 1.

The state water board’s powers to issue fines for water rights violations were first established in the 1980s and have remained mostly unchanged. In 1980, the California Legislature and Gov. Jerry Brown approved a law that gave the state water board the authority to issue cease-and-desist orders when the board has evidence that a diverter has violated an order.

Such an incident occurred in August 2022 with a group of diverters along the Shasta River. After several consecutive drought years, the diverters were placed under an emergency curtailment order to protect salmon. U.S. Geological Survey stream-flow gauges that year showed that the Shasta River water level dropped by more than half in less than a day, and the individuals were found by the state to be in violation of the order.

In response to the incident, California lawmakers introduced a bill sponsored by environmental groups that would have given the board new enforcement authority to increase fines for violating board orders from the levels set almost 40 years ago.

Through the advocacy of the California Farm Bureau and its allies, the bill was narrowed to only increase penalty fines without giving the state water board new regulatory powers. The legislation, Assembly Bill 460, was signed by Gov. Gavin Newsom and takes effect Jan. 1. It affects anyone with water rights claims, licenses or permits who diverts water illegally.

Under the changes enacted by AB 460, the penalty fine for violating a cease-and-desist order issued by the state water board increases from $1,000 per day to $2,000. The penalty fine for violating a water rights order or regulation or failing to report flood flow diversions for recharge during flood emergencies increases from $500 per day to $1,000.

The act of violating a curtailment order, such as what occurred on the Shasta River in 2022 and prompted the introduction of AB 460, will carry a fine of $10,000 per day and $2,500 per acre-foot diverted. In addition, on Jan. 1, 2026, the state water board is required to adjust the amount of penalty fines annually based on inflation.

As part of its adjustment of water rights fees and water quality fees this fall, the state water board established a new late fee that will be assessed each year to diverters who fail to report their annual water diversions or who report the information more than 30 days after the reporting deadline. The late fee scales up depending on the size of the water right and the amount of time that has lapsed since the reporting deadline. The board established a 30-day grace period beginning Feb. 1 before the late fee is assessed; however, starting March 2, fees will begin to accrue.

At the low end, diverters with water rights of less than 100 acre-feet and who submit their reports within 60 days after the deadline face a late fee equal to 25% of their annual water right fee. This percentage increases every 30 days.

At the high end, diverters with water rights of more than 25,000 acre-feet face a minimum 60% late fee and a maximum 85% late fee if they fail to report after the 30-day grace period.

All water rights holders are annually required to submit Water Diversion and Use Reports electronically to the board between Oct. 1 and Jan. 31 for the previous water year. The water year runs from Oct. 1 to the following Sept. 30. For example, this year, water rights holders would submit a report that showed how much water they diverted and used from Oct. 1, 2023, to Sept. 30, 2024.

The board’s establishment of a late fee for water diversion and use reports is intended to increase rates of reporting compliance, which are generally high among large diverters but lower for many small diverters who divert less than 100 acre-feet, according to the state water board.

View the state water board’s updated water rights fee schedule summary for fiscal year 2024-2025 at www.waterboards.ca.gov/resources/fees/stakeholder/docs/2024/fy2425-fee-schedule-summary.pdf.

(Alexandra Biering is a director of policy advocacy for the California Farm Bureau. She may be contacted at abiering@cfbf.com.)