On May 3, 2024, the California Department of Fish and Wildlife (CDFW or Department) published a Notice of Proposed Action (Proposed Rule) to update its regulations for Lake or Streambed Alteration Agreements (LSAAs). As described in more detail below, the Proposed Rule establishes a new process for CDFW’s suspension and revocation of an LSAA in the case of permittee noncompliance.

Under current law, an entity must notify CDFW before it undertakes an activity that substantially alters the flow, bed, channel, or bank of any river, stream, or lake. (See Fish & G. Code, § 1602.) If CDFW determines that the proposed activity will adversely affect fish or wildlife resources, the Department will recommend measures to protect the identified resources. If the parties agree, they then enter into an agreement (referred to as an LSAA) that incorporates these protection measures. Only then can the permittee’s proposed activity proceed. (Id. § 1603.)

LSAA violations are subject to both criminal and civil liability. For instance, a violation of Fish and Game Code Section 1600 is a misdemeanor and subject to a fine of up to $1,000, imprisonment of up to six months, or both a fine and imprisonment. For repeated violations on the same LSAA, the punishment increases to a fine of up to $5,000, imprisonment of up to a year, or both. Section 1615 also establishes civil penalties of up to $25,000 per violation.

Section 1612 provides CDFW the right to revoke an LSAA if a permittee is noncompliant with its terms or, for long-term agreements, a permittee fails to provide timely status reports under Section 1605(g). However, current regulations provide little to no authorization for CDFW to administratively enforce compliance once an LSAA has been issued. Rather, the attorney general, district attorney or city attorney may bring a criminal or civil action compelling a permittee’s compliance with its LSAA. Section 1612 requires CDFW to establish the procedure for suspension or revocation of an LSAA, including the requirement for CDFW to provide written notice and an opportunity to cure, but CDFW has not proposed such regulations until now.

CDFW’s Proposed Rule would establish a new procedure under which CDFW may administratively suspend or revoke an LSAA due to permittee noncompliance. Specifically, the Proposed Rule sets out the following new process under Section 1612:

• Step 1: If CDFW determines a permittee has failed to comply with its LSAA, CDFW will send a notice of noncompliance. The notice must include: (1) a description of the deficiency and the actions needed to correct the deficiency, (2) a deadline for correcting the deficiency, and (3) confirmation that CDFW will suspend the LSAA unless the deficiency is corrected.
• Step 2: If the permittee demonstrates that each deficiency has been corrected by the deadline provided in the notice of noncompliance, and CDFW agrees, CDFW must notify the permittee that the LSAA remains in effect. Conversely, if the deficiency is not corrected, CDFW will send the applicant a further notice of suspension that: (1) states that the LSAA is suspended, (2) provides another deadline for correcting each deficiency, and (3) explains that if each deficiency has not been corrected by the deadline, the LSAA will be revoked. Notably, during this suspension period, continuation of the activity authorized under the LSAA could potentially result in separate enforcement violations under the Fish and Game Code.
• Step 3: If the applicant satisfactorily demonstrates that each deficiency has been corrected, and CDFW agrees, CDFW must notify the entity that the suspension is released and the LSAA is again in effect. If the entity does not remedy the deficiency, CDFW will send the applicant a notice of LSAA revocation.

Under the Proposed Rule, LSAA permittees are now provided two opportunities to cure outstanding LSAA deficiencies and areas of noncompliance, likely before other more severe and punitive enforcement penalties are pursued. However, the Proposed Rule does expressly grant CDFW authority to impose penalties and fines during the noncompliance period until identified deficiencies are formally corrected, so permittees should remain vigilant in tracking compliance with LSAA protective measures and ensuring timely submittal of all required reporting obligations. In addition, if an applicant anticipates any potential difficulties in meeting LSAA requirements (most commonly due to weather/field delays or due to lengthy internal review processes), it should contact CDFW as soon as possible to discuss the situation and potential accommodations, as the Proposed Rule specifies a process by which CDFW may provide an extension.

The Proposed Rule is open for public comment until June 18, 2024, at which time CDFW will hold a public hearing to take written or oral statements from the public. At the completion of the hearing, CDFW will determine whether to adopt the Proposed Rule, either in its current or a modified form. We will be tracking the outcome of this hearing and provide subsequent legal updates as events continue to develop over the next few months. In the interim, please contact us with any questions as to how this Proposed Rule may affect your LSAA or project.