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Most people as a courtesy set up behind the high tide line. This is easy to see on the beach as the sand changes color and texture above and below the line. This allows the lifeguards to see the beach.
It depends what you mean by "near the water." Pop up canopies are allowed on the beach, but are not allowed east of the row of lifeguard stands (i.e., between line of the stands and the water). The same restriction applies to umbrellas. The restriction ensure that lifeguards view of each other and of the water is not obstructed.
The distance from the water to the line of stands varies with tides and beach terrain, but is generally is no more than about 50-feet.