The State Water Resources Control Board voted Dec. 2 to adopt regulations implementing Assembly Bill 460 (2024), which requires the board to adjust Division 2 water-right civil penalties for inflation.

"AB 460 was passed by the legislature in 2024 and signed by the governor. The key requirement is that the state water board adjust water-right civil penalty amounts for inflation by regulation," said Jason Grimm of the Office of Chief Counsel during the presentation.

Grimm walked the board through the implementation calculation: the board uses the California Consumer Price Index from June of the prior year to develop a ratio compared with the CPI at the time the statute was last adopted or amended, multiplies the statute's penalty by that ratio, and then applies statutory rounding rules (to the nearest $10, $100, $1,000 or $5,000 depending on the amount).

As a numerical example, Grimm explained that a $500-per-day penalty could become $1,260 by the CPI ratio and then would be rounded to $1,000 per the rounding table specified in the proposed regulation.

Staff said seven different water-code provisions receive adjustments in the proposed rule; the rule also includes delegated, non-substantive clarifying updates to several Title 23 CCR sections. Grimm recommended adoption; the board adopted the regulation by unanimous roll call vote.

After adoption, board staff will file the regulation with the California Secretary of State and file an implementation report with the Legislature as required by statute.