With the passage of the Sustainable Groundwater Management Act in 2014, California will now take a different approach to how it handles its groundwater supply.  For the first time the state will be involved in regulating groundwater, although much of the power and control will, at least initially, lie in the hands of local agencies. 

A. A Local Framework

The Sustainable Groundwater Management Act of 2014 (“SGMA”) is a package of three bills, consisting of AB 1739 (Dickinson), SB 1168 (Pavley), and SB 1319 (Pavley) passed by the Legislature.  The bills were signed into law by Governor Brown on September 16, 2014.  In his signing message, Governor Brown noted, “[a] central feature of these bills is the recognition that groundwater management in California is best accomplished locally.”  Under SGMA, local authorities will hold most of the power, while the state will intervene only in limited circumstances.   

B. Benchmarks for Implementation

The SGMA looks almost 30 years into the future, setting several goals along the way.  The idea is to foster accountability and progress at interim steps, with an ultimate goal of establishing groundwater sustainability in all “high” and “medium” priority basins by 2042.  Groundwater sustainability is defined as achieving a “sustainable yield” in the basins.  In short, this means the amount of water drawn from the basins would not cause: (i) an unreasonable decrease of groundwater levels; (ii) an unreasonable reduction of groundwater storage; (iii) an unreasonable intrusion of seawater; (iv) degraded water quality; (v) land subsidence; or (vi) a depletion of interconnected surface waters [Water Code § 10721(w)]. 

In order to achieve the SGMA’s goals, the following interim objectives must be met by the prescribed dates:  
 

• By January 31, 2015, the California Department of Water Resources (“DWR”) had categorized and prioritized groundwater basins as “high,” “medium,” “low,” or “very low.”  DWR concluded that there were 127 basins that qualified as “high” or “medium” priority, accounting for about 96% of groundwater use in California.  DWR, in its Bulletin 118 and subsequent updates to that bulletin, will also designate any basins that are subject to critical conditions of overdraft.  Although the SGMA applies to all groundwater basins in California, its provisions focus on regulating those with a “high” or “medium” priority designation (with very few of its provisions applying to basins with “low” or “very low” priority designations). 

• By June 30, 2017, a local Groundwater Sustainability Agency (“GSAs”; see Item C, below) must be formed for each “high” and “medium” priority basin.  The GSAs will be established by local agencies (it appears that counties have taken the lead in establishing the GSAs, although SGMA, in Water Code section 10723(c), designates certain existing groundwater agencies as the GSAs for the basins in their respective service areas) in the areas that overlie those basins, and will be the primary vehicle by which the goals of the SGMA are implemented.  Once formed, the GSAs must assess the conditions in local basins and develop Groundwater Sustainability Plans (“GSPs”), as explained below.  

• By January 31, 2020, the GSAs must develop unique GSPs for “high” or “medium” priority basins that are in critical overdraft, as designated by DWR.  The GSPs must include a description of current basin conditions; information regarding subsidence in the basin; historical demand of water in the basin; estimated future demand of water in the basin; information regarding groundwater-surface water interaction; a draft basin water budget; and measurable objectives and milestones.  The GSPs must provide for sustainability within a 20-year time frame.  

• By January 31, 2022, for “high” and “medium” basins not in critical overdraft, the GSAs must develop a unique GSP for each basin.  The same requirements and 20-year time frame apply as they do for basins in critical overdraft, as specified in the prior paragraph.   

• By January 31, 2040, the GSP goals for “high” or “medium” priority basins in critical overdraft must be achieved.  

• By January 31, 2042, the GSP goals for “high” or “medium” priority basins not in critical overdraft must be achieved. 

C. New Powers for Local GSAs

In order for groundwater basins to be dealt with on the local level, the GSAs will be given new tools.  The SGMA provides that GSAs will have the power to implement and enforce their GSPs using the following powers: 

• The ability to request registration of groundwater wells; 

• The ability to require the measurement of groundwater well extractions and annual extraction reports;  

• The power to impose limits on extractions from specific groundwater wells;  

• The power to assess fees to implement local GSPs; and  

• The power to request adjustments to basin boundaries, including to create new subbasins. 

[Water Code §§ 10722.2; 10725 et seq.] 

D. State Backstop

The SGMA is largely controlled, governed, and implemented by local agencies.  However, the State Water Resources Control Board (“State Water Board”) reserves the right to intervene if the local authorities do not properly follow the provisions of the SGMA.  Such intervention by the State Water Board is referred to as a “State Backstop.”  Following are situations in which the State Backstop would be implemented: 

• if, by June 30, 2017, a GSA is not formed for a “high” or “medium” priority basin.  

• if, by January 31, 2020, a GSP is not adopted in a “high” or “medium” priority basin in critical overdraft. 

• if, by January 31, 2022, a GSP is not adopted in a “high” or “medium” priority basin not in critical overdraft.  

• if, by January 31, 2025, a GSP is not adopted or is determined to be inadequate (i.e., not able to achieve sustainability over time), and also there are substantial depletions of interconnected surface waters.  

E. Adjudicated Basins

The SGMA does not apply to the following adjudicated basins that are already being overseen by the courts: 

• Beaumont Basin  
• Brite Basin 
• Central Basin 
• Chino Basin 
• Cucamonga Basin 

• Cummings Basin 
• Goleta Basin 
• Lytle Basin 
• Main San Gabriel Basin 
• Mojave Basin Area 

• Puente Basin 
• Raymond Basin  
• Rialto-Colton Basin 
• Riverside Basin 
• San Bernardino Basin Area 

• San Jacinto Basin 
• Santa Margarita River Watershed 
• Santa Maria Valley Basin 
• Santa Paula Basin 
• Scott River Stream System 

• Seaside Basin 
• Six Basins 
• Tehachapi Basin 
• Upper Los Angeles River Area 
• Warren Valley Basin 

• West Coast Basin 

• Regarding the Antelope Valley Basin – If the superior court issues a final judgement, order or decree, the Antelope Valley Basin at issue in the Antelope Valley Groundwater Cases shall be treated as an adjudicated basin by the SGMA. 

• Regarding Inyo County – Any groundwater basin (or portion thereof) managed under the terms of the stipulated judgment issued in Inyo County Case No. 12908 shall be treated as an adjudicated basin by the SGMA.  

• Regarding the Los Osos Groundwater Basin – If the superior court issues a final judgement, order or decree, the Los Osos Groundwater Basin at issue in San Luis Obispo County Superior Court Case No. CV 040126 shall be treated as an adjudicated basin by the SGMA. 

[Water Code § 10720.8(a)-(d).] 

If one of the basins listed above has had only a portion of its area adjudicated (i.e. the groundwater extraction rights have only been determined for a portion of the basin), then the exception applies only to that already-adjudicated portion.  The portion of the basin left unadjudicated must comply with all of the rest of the rules of the SGMA, as outlined in this article.  

The Watermaster or local agency in charge of the basins listed above must (i) provide a copy of the final governing judgment, order or decree to DWR by April 1, 2016; (ii) provide DWR with a copy, within 90 days of entry by a court, of any amendment to the final judgment, order or decree entered after April 1, 2016; and (iii) starting on April 1, 2016, provide an annual report to DWR consisting of: groundwater elevation data; data showing the aggregate groundwater extraction for the preceding year; status of the surface water supply used or available for groundwater recharge; the total water use of the basin; and any change in groundwater storage.  [Water Code § 10720.8(f).] 

F. Available Funds 

In recognition of the importance of sustainable groundwater management, the Proposition 1 water bond, included $100 million in funding for use by DWR for sustainable groundwater management issues.  Additional Prop. 1 monies are allocated for cleanup of groundwater, groundwater storage projects, and other efforts to ensure that California’s groundwater is clean and sustainable.   

G. Pending “Clean-Up” Legislation

There are a number of bills pending in the California Legislature that would alter parts of the SGMA if they are passed into law. 

• Extending Deadlines – Assembly Bill 454 would alter a few of the deadlines outlined in Item D, above, as follows: 

• The deadline for the GSAs of “high” and “medium” basins not in critical overdraft to develop a GSP would be moved from January 31, 2022 to January 31, 2023.  

• The date in which a State Backstop could be implemented if a GSP is not adopted or is determined to be inadequate would be moved from January 31, 2025 to January 31, 2026. 

• The date in which the State Water Board could intervene if a GSA has not been formed for a “high” or “medium” priority basin would be moved from June 30, 2017 to June 30, 2018. 

• Participation of Mutual Water Companies and Investor-Owned Water Companies in a GSA – Senate Bill 13 would provide authorization for mutual water companies and investor-owned water companies to participate in a GSA through a memorandum of agreement or other legal agreement.  

• Additional Contractual Powers for GSAs – Assembly Bill 617 would authorize GSAs to enter into written agreements and funding with private parties that help facilitate GSPs that are in place.   

H. Final Thoughts

With the passage of SGMA and the beginning actions to implement its deadlines, it is important for groundwater producers to become involved in the discussions concerning groundwater issues in the basin or basins from which they produce their water.  Specifically, producers should participate in meetings concerning the formation of GSAs, to ensure they “have a seat at the table” early on during GSA formation discussions.  For public agencies, they can now become members of a GSA joint powers agency, while mutual water companies and investor-owned water companies would be able to do so if SB 13 in the current legislative session becomes law.  Such direct involvement is a good way to ensure a producer’s interests are represented and, to the extent possible, protected. 

In conclusion, the Sustainable Groundwater Management Act signals that water sustainability is a priority for both the Governor and the Legislature.  With the passage of SGMA, the Legislature has also indicated its understanding that groundwater management is best facilitated locally.  With a healthy portion of Proposition 1 funding designated for groundwater sustainability, this is an opportunity for local water authorities to implement beneficial measures to carry California into the future, through more careful management of California’s groundwater resources.