WATER CONSERVATION AND FLOOD CONTROL

WATER CONSERVATION AND FLOOD CONTROL

California law provides that an individual’s water rights do not exceed the amount reasonably required for
beneficial use.

The courts refer water rights litigation to the State Water Resources Control Board for investigation, report,
and/or hearing and preliminary determination, subject to final court decision. (Water Code Section 2000, et
seq.)

Surface water rights are dependent to some extent upon whether or not the surface water is flowing in a defined
channel. A defined channel is any natural watercourse, even though dry during a good portion of the year. If
water flows across the surface of the earth without being contained within any defined channel, the landowner
below may not obstruct it in such a manner as to flood the owner above. Also, a landowner above may not
divert or concentrate such waters upon the landowner below by artificial structures, such as ditches or streets in
a subdivision.

Again, if water is flowing in a defined channel, a landowner may not obstruct or direct such water. A local
flood control district, however, may grant a permit for such diversion if properly approved disposal methods are
provided. Waters overflowing a defined channel are considered floodwaters and a landowner may protect
property by reasonable methods.

Cities, counties and specially created districts may incur indebtedness for the construction of flood control
works. Assessments on the parcels within the area will repay the indebtedness.

Mutual Water Company

Water users may organize a mutual water company in order to secure an ample water supply at a reasonable
cost. The company must file articles of incorporation with the Secretary of State.

In most cases, the stock is made appurtenant to the land; that is, each share of stock is attached to a particular
portion of land and cannot be sold separately. This enables the company to plan its distribution more easily and
prevents speculation in shares.

No cash dividends are declared by these companies, but credits are given to water users if surpluses occur. On
the other hand, assessments may be levied if operating revenues are not sufficient or special improvements are
voted by the directors. Directors are elected by stockholders. The directors usually employ one paid officer, the
secretary, who supervises the clerical help and advises stockholders regarding their water problems.

If the domestic water supply for a subdivision is to be provided by a mutual water company, the application for
a public report on the subdivision must include the information, representations and assurances prescribed by
Corporations Code Section 14312 on a form prescribed by the Real Estate Commissioner.

Public Utilities

Public utilities are corporations which have powers of a public nature, such as the power of condemnation, to
enable them to discharge their duties for the public benefit. They are subject to the regulations and control of
the Public Utilities Commission.

Special Water Districts

Water districts, while state agencies, are not part of the state government as such. Such districts have been
historically divided into two groups: (l) those which protect or reclaim the land from water; and (2) those which

bring water to the land. Some districts of each type have been given powers of the other type. Water districts
may also be classified as existing under general or special laws, the former typically being an enabling act for
the voluntary formation of districts and their government, while the latter either create or provide for the
creation of one district and its government.

Sometimes the district law, though general in form, is so modeled to fit a particular situation that it may be said
to be special in fact. This is true of the Metropolitan Water District Act, originally enacted in 1927, under
which only the Metropolitan Water District of Southern California operates, and of the County Water Authority
Act, originally enacted in 1943, under which only the San Diego County Water Authority operates. Both acts
contemplate the wholesaling of water to cities and districts included in either a metropolitan water district or a
county water authority.

Among the types of districts are:

California water districts,

California water storage districts,

County water districts,

County waterworks districts,

Drainage districts,

Irrigation districts,

Public utility districts, and

Reclamation districts.

Water Pollution Control

Water pollution control for the State is governed by the Porter-Cologne Water Quality Control Act (Water
Code Section 13000 et seq.). This act establishes a State Water Resources Control Board and nine regional
water quality control boards. This act provides a comprehensive scheme for controlling discharge of effluents
which may affect the quality of water. This regulation has frequently involved property owners in regulation or
clean up of spills from septic tanks, underground oil and gasoline storage tanks and other sources which leach
materials into the groundwater.