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~c . . INTERIM REPORT ON WATER TRANSFER ACTIVITY IN CALIFORNIA October 5, 1988 I. STATE POLICY Since 1980, California law has strongly encouraged the voluntary transfer of water. Section 109 of the Water Code declares that it is the policy of the state "to facilitate the voluntary transfer of water and water rights where consistent with the public welfare of the place of export and the place of import." Cal. Water Code S 109 (a) . It also directs the Department of Water Resources, the State Water Resources Control Board, and other appropriate state agencies "to encourage voluntary transfers of water and water rights, including . . . providing technical assistance to . . . identify and implement water conservation measures which will make additional water available for transfer." I.!;!. S 109 (b) . This policy is implemented principally by sections 380 through 387 of the Water Code. Section 382 provides that "[n]otwithstanding any other provision of law, every local or regional public agency authorized . . . to sell water . . . may sell, lease, exchange, or otherwise transfer water that is surplus to the needs of the agency's water users for use outside of the agency." 19.. S 382. The determination of whether surplus water exists essentially is left to the judgment of the local agency or the water users themselves. 19.. S 383. All transfers made pursuant to sections 380 through 387 are subject to the approval of the state Water Resources Control Board, I.!;!. S 386. Before allowing a transfer, the Board must determine that "the change may be made without injuring any legal user of the water and without unreasonably affecting fish, wildlife, or other instream beneficial uses." I.!;!. It also must find that the transfer will not "unreasonably affect the overall economy of the area from which the water is being transferred." ~. Although the Legislature initially limited transfers to seven years, the Code now authorizes the parties to agree on a longer term. I.!;!. S 387. These provisions are supplemented by several related sections of the Water Code. Sections 1010 and 1011 declare, for examnple, that water that is saved as a result of using reclaimed waste water or implementing conservation measures may be sold, leased, exchanged or otherwise transferred. 19. SS 1010(b) & 1011(b). Section 1244 states that "the sale, lease, exchange, or transfer of water or water rights, in itself, shall not constitute evidence of waste or unreasonable use" of the water. 19.. S 1244 (emphasis added). The purpose of these provisions is to assure users who offer water for transfer that the state will -1 -