Amended  IN  Senate  July 13, 2023
Amended  IN  Assembly  May 08, 2023
Amended  IN  Assembly  March 23, 2023

CALIFORNIA LEGISLATURE— 2023–2024 REGULAR SESSION

Assembly Bill
No. 1205

Introduced by Assembly Member Bauer-Kahan
(Principal coauthor: Senator Hurtado)
(Coauthor: Assembly Member Friedman)

February 16, 2023

An act to add and repeal Section 100.1 to of the Water Code, relating to water.


LEGISLATIVE COUNSEL'S DIGEST


AB 1205, as amended, Bauer-Kahan. Water rights: sale, transfer, or lease: agricultural lands.
Existing law declares that, because of the conditions prevailing in this state, the general welfare requires that the water resources of the state be put to beneficial use to the fullest extent of which they are capable, that the waste or unreasonable use or unreasonable method of use of water be prevented, and that the conservation of the water is to be exercised with a view to the reasonable and beneficial use of the water in the interest of the people and for the public welfare.

This bill would find and declare that speculation or profiteering by an investment fund in the sale, transfer, or lease of an interest in any surface water right or groundwater water right previously put to beneficial use on agricultural lands within the state is a waste or an unreasonable use of water.

This bill would require the State Water Resources Control Board to, on or before January 1, 2027, conduct a study and report to the Legislature and appropriate policy committees on the existence of speculation or profiteering by an investment fund in the sale, transfer, or lease of an interest in any surface water right or groundwater right previously put to beneficial use on agricultural lands, as specified. The bill would repeal this provision on January 1, 2031.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: NOYES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 Section 100.1 is added to the Water Code, to read:

100.1.
 (a) (1) On or before January 1, 2027, the state board shall conduct a study and report to the Legislature on the existence of speculation or profiteering by an investment fund in the sale, transfer, or lease of an interest in any surface water right or groundwater right previously put to beneficial use on agricultural lands. The state board shall provide this report to the appropriate policy committees of the Legislature.
(2) The report shall include, but is not limited to, all of the following:
(A) The investment funds that are buying agricultural land and where those investment funds are located.
(B) Any parent companies of the investment fund.
(C) The amount of agricultural land being purchased by the investment fund.
(D) How often agricultural lands are being bought by investment funds.
(E) What is being done with the land and any associated water right.
(F) If water is being sold, the amount that is being paid for the water.
(G) The extent that the actions of these investment funds are negatively impacting local communities.
(b) (1) A report to be submitted pursuant to subdivision (a) shall be submitted in compliance with Section 9795 of the Government Code.
(2) Pursuant to Section 10231.5 of the Government Code, this section is repealed on January 1, 2031.

SECTION 1.Section 100.1 is added to the Water Code, to read:
100.1.

(a)For the purposes of this section, the following definitions apply:

(1)“Agricultural land” has the same meaning as defined in Section 10213 of the Public Resources Code.

(2)“Investment fund” means a private equity fund, public equity fund, venture capital fund, hedge fund, fixed income fund, real estate fund, infrastructure fund, or similar pooled investment entity that is, or holds itself out as being, engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting, owning, holding, or trading securities or other assets.

(3)“Speculation” means the sale, transfer, or lease of an interest in a water right by an investment fund to profit from an increase in the water’s value in a subsequent transaction or without a plan to put the water to beneficial use.

(b)The Legislature hereby finds and declares that speculation or profiteering by an investment fund in the sale, transfer, or lease of an interest in any surface water right or groundwater water right previously put to beneficial use on agricultural lands within the state is a waste or an unreasonable use of water within the meaning of Section 2 of Article X of the California Constitution.