Not financial, but it's essentially considered to be stealing water from the river basin, which is allocated by an old agreement [1]. I don't know the details, but I've heard that this has been relaxed quite a bit in recent years, with collection limits replacing outright bans in several jurisdictions.
Eh it's both. Rain water collects through the watershed and somebody owns the rights to that water.
So you can get into some really funky situations where you are "technically" stealing that water if you improve rainwater->groundwater retention on your property and as a result either have to dismantle the retention mechanisms or have to pay out damages.
Interesting. Do these rights also come with responsibilities ?
If the rights owner fails to collect their water in a timely manner( like heavy rains or blockages leading to water logging or flooding), should they be held responsible in any way ?
Water rights must be used in accordance with the terms dictated by the State when they were assigned. It's literally "use it or lose it".
I finished building three ponds on my farm in 2022. The permits dictated the times of year that I could store water (vs letting the flow pass unimpeded), what I can do with the stored water, and the size and function of bypass channels. If they decide it's necessary, they can tell me to install flow meters and depth gauges.
In times of drought, they unilaterally can order me to leave my ponds empty and let all water pass through, because older water right holders get precedence. They can hold me accountable if I do not follow their terms, up to and including revoking my permits.
Honestly, I'm not really sure it was worth the effort and cost, because the whole point was to improve water security on my property... but I have no meaningful control. It's completely bonkers, because my ponds have unquestionably improved the watershed's ability to store water. If anything, they should be paying farmers to build more small ponds like mine.
In other words, these government regulations pose a significant impediment to solving the growing water crisis. No sane person would go near the process, which I now understand is why most of the ponds in this area were built without permits.
[1] https://en.wikipedia.org/wiki/Colorado_River_Compact