Facing a record drought and dramatic groundwater level declines in some areas, California legislators passed a trio of bills this legislative session that together provide, for the first time in the state’s history, a framework for the sustainable management of the state’s groundwater resources. The three bills, Senate Bills 1168 (Pavley) and 1319 (Pavley) and Assembly Bill 1739 (Dickinson), were signed into law by Governor Brown on 16 September 2014.

The centerpiece of the historic legislation is the addition of Part 2.74, the “Sustainable Groundwater Management Act” (SGMA), to the Water Code. The new law grants certain local public agencies the ability to become a Groundwater Sustainability Agency (GSA) for their basin or a portion thereof, with broad authority to develop and implement Groundwater Sustainability Plans (GSPs). The law significantly increases the monitoring and reporting requirements for almost all groundwater users, with non-compliance subject to action by the local GSA and/or the State Water Resources Control Board (State Board). This newsletter provides answers to several important questions that you may have regarding the new law and its potential impact.

Why Did the Legislature Pass These Bills?

The Legislature recognized in its findings and declarations that groundwater is an essential component of the state’s water supply portfolio and that groundwater supplies must be sustainably managed to help protect against the negative effects of overuse. They also explicitly recognized that effective management is most likely to occur at the local and regional level, but only if certain information is available to the local groundwater management entities and they have sufficient authority and resources to achieve their management goals.

The stated intent of the Legislature in passing these bills was to empower local agencies to sustainably manage groundwater in their areas, including requiring the collection and reporting of data necessary to effectively manage groundwater (e.g., groundwater levels, natural and artificial recharge, geologic information, water balance components), and providing for state intervention if local authorities do not or cannot comply. The Legislature also expressed their intention to respect the overlying and proprietary rights to groundwater under Section 1200 of the Water Code and recognize and preserve the authorities of cities and counties to manage groundwater pursuant to their police powers.

What is Meant by “Sustainable Groundwater Management” and “Sustainable Yield”?

The law defines several terms related to the concept of groundwater sustainability. “Sustainable groundwater management” is defined as management and use of groundwater that can be maintained over the planning and implementation horizon (50 years) without causing an “undesirable result”, which includes: significant and unreasonable depletion of supply (indicated by chronic lowering of groundwater levels), reduction of groundwater storage, seawater intrusion, degraded water quality, land subsidence, and depletions of interconnected surface water. “Sustainability goal” is the achievement of sustainable groundwater management by implementing measures to ensure that a basin is operated within its sustainable yield. “Sustainable yield” of a groundwater basin is defined as the maximum amount of water that can be withdrawn annually from a groundwater supply without causing an undesirable result.

The sustainable yield of a groundwater basin can be estimated through careful construction of a water budget that is based on historical information on groundwater levels, groundwater extraction, cropping/land use, precipitation and climatic data, surface water flows, water imports, as well as understanding of the basin’s geology, soils, and physical geography. EKI has performed such sustainable yield evaluations for basins throughout California and has used the results to assess potential impacts on future groundwater levels caused by changes to water use patterns and practices. In our experience, historical or pre-development groundwater conditions should not be used as a de-facto assumption of the safe yield of a basin. Rather, a thoughtful plan and realistic set of management assumptions and targets can be developed that meet multiple objectives within a basin.

What is a Groundwater Sustainability Agency (GSA)? Who Can Become a GSA? What Do GSAs Do?

Groundwater Sustainability Agencies are the primary new entity called for in the legislation, and their purpose is to implement the provisions of the SGMA. Fifteen agencies created by statute to manage groundwater are deemed the exclusive agency with powers to become a GSA within their boundaries (see section 10723(c) of the Water Code). Outside of those areas, the law allows local public agencies with water supply, water management or land use responsibilities to form a GSA, either singly or in combination with other local agencies. If no local agency elects to become the GSA for an area, the County is presumed to be the GSA. If neither a local agency nor the County assumes the role of GSA for a basin, the California Department of Water Resources (DWR) may assume certain responsibilities and authorities for that basin, including collection of groundwater extraction data.

In furtherance of overall sustainability goals of the SGMA, the powers and authorities vested in the GSAs are broad, and include the authority to: adopt rules, regulations, ordinances, resolutions; conduct investigations; conduct inspections under an inspection warrant; require registration of a groundwater extraction facility (i.e., a well); require measurement of extraction; require annual reporting of extraction by owner or operator; impose fees on groundwater extraction; impose well spacing requirements; control extractions through rules/regulations/limitations/allocations on new groundwater wells or groundwater extraction; and acquire, use, operate, lease, and otherwise manage real and personal property of all kinds, including land, surface water and groundwater, water rights, and infrastructure.

For local public agencies that may want to become a GSA for their basin, assuming they are not within an area with a pre-designated local agency with such authority (see section 10723(c) of the Water Code), the steps include: holding a public meeting wherein the interests of all beneficial uses and users of groundwater are considered, passing a resolution forming the new agency, and submitting a notice of intent to DWR that includes the service area boundaries, the basin the agency is managing, and other GSAs operating within the basin, a copy of the resolution forming the GSA, a copy of any new bylaws, ordinances, or authorities adopted by the local agency, and a list of interested parties and how their interests will be considered. For parties who are not public agencies but still have a keen interest in the sustainable groundwater management process, the best course of action may be to sign up as an interested party with any local public agency that may be forming a GSA for your area and to stay involved.

What is a Groundwater Sustainability Plan (GSP)?

In high-priority and medium-priority basins (discussed below), GSAs are required to develop and implement a GSP, or an alternative plan, that considers the interests of all beneficial uses and users of groundwater. The GSP must include, among other things: a description of the basin; measurable objectives and interim milestones to achieve the sustainability goals of the SGMA and a description of how those objectives will be met; a 50-year planning and implementation horizon; a description of monitoring sites and protocols; a description of the consideration given to county or city General Plans; and components related to monitoring and management of groundwater levels, groundwater quality, subsidence, surface flow that directly affects groundwater levels or quality or are caused by groundwater extraction, mitigation of overdraft, and recharge areas. As an alternative to developing a GSP, a local agency may choose to submit for review by the DWR an “alternative plan” that the local agency believes satisfies the objectives of the SGMA. The alternative plan may be an “AB-3030” Groundwater Management Plan (GMP) prepared pursuant to Part 2.75 of the Water Code, an adjudication action, or an analysis of the basin prepared by a California-licensed Professional Engineer or Geologist demonstrating that the basin has operated within its sustainable yield for a period of at least 10 years. This alternative plan must be submitted to the DWR for review by 1 January 2017 and every five years thereafter. The law prohibits agencies within high- and medium priority basins from adopting or renewing a GMP under Part 2.75 of the Water Code after 1 January 2015.

Groundwater Sustainability Plans will be the core document on which all future actions by a GSA are predicated. GSPs should be founded on technical analysis based on the available data and best management practices for sustainable groundwater management developed by the DWR and others, but they will also inevitably have economic, social, and political ramifications. As such, a GSA will need to apply a thoughtful and strategic, long-term planning approach when developing the GSP. Clients seeking assistance with GSP development may benefit from EKI’s past experience with complex water resources development and management projects.

Will My Groundwater Basin Be Covered Under a GSP?

The focus of the SGMA is on groundwater basins designated as high-priority or medium-priority under the DWR’s basin prioritization scheme under Section 10933 of the Water Code (amended by these bills). A designation by the DWR based on a wide range of factors was completed earlier in 2014; however, the SGMA requires an additional factor to be considered in the prioritization – adverse impacts on local habitat and local streamflows. As such, the current basin rankings may change upon finalization by 31 January 2015. The current 43 high-priority and 84 medium-priority basins (shown in orange and yellow, respectively, in the figure to the right) account for 96% of the states’ total groundwater pumping. High- and medium-priority basins are required by the bills to have a GSP or approved alternative plan in place by 31 January 2022, or by 2020 if the basin is also designated by the DWR as subject to critical conditions of overdraft. The state’s 26 adjudicated basins, and three other basins which are considered adjudicated for the purposes of this law, are exempt from the provisions of the SGMA. Low-priority and very low-priority basins are encouraged, but not required, to develop a GSP, and are exempt from state intervention, discussed further below.

What is The Role of State Agencies? When Might They Intervene in My Basin?

The DWR and the State Board are also given new authorities and responsibilities under the new law. The DWR must do the following: categorize each basin as high-, medium-, low-, or very low-priority by 31 January 2015; adopt regulations to be used to evaluate proposed revisions to basin boundaries by 1 January 2016; adopt regulations for evaluating GSPs, implementation of GSPs, coordination agreements, and “alternative plans” by 1 June 2016; prepare and release a report on the DWR’s best estimate of water available for replenishment of groundwater in the state by 31 December 2016; and publish a list of Best Management Practices (BMPs) for sustainable groundwater management by 1 January 2017. The DWR is also required to provide technical assistance to a GSA, when requested, for development and implementation of a GSP, and must review and comment on a proposed GSP or alternative plan within two years of its submission by a GSA.

The State Board has the authority to declare a basin as a probationary basin if certain required actions are not taken by local agencies by the dates prescribed in the law, or if the DWR makes a determination that the basin is in a condition of long-term overdraft or a condition where extraction results in significant depletion of interconnected surface water. Once declared a probationary basin, the State Board may develop and implement an Interim Plan that identifies actions needed to correct those conditions. If the required actions are undertaken by local agencies to the satisfaction of the State Board, all or portions of the Interim Plan may be rescinded and responsibilities transferred back to the local agencies. The State Board is also given authority to issue orders, and collect subsequent penalties for non-compliance, for groundwater extraction in excess of limits set in a GSP or Interim Plan.

As a Large Groundwater User, What Will Be Required of Me as Part of This New Legislation?

Generally speaking, groundwater producers will be required to comply with any rules, regulations, ordinances, and resolutions set forth by the GSA for their area. The most likely new requirements for groundwater producers are related to measurement and reporting of groundwater production to the GSA or to the state when no local GSA has been established. Producers may be required by their GSA to register their well, to install a flow measuring device on their well at their cost, to file annual reports on groundwater production, and may be charged a fee on groundwater extraction by the GSA for the purposes of funding and implementing the GSP. In some cases, producers may be subject to extraction allocations or curtailments. Under the enforcement provisions of the law, producers may face civil penalties and/or fines for non-compliance with any rule, regulation, ordinance, or resolution adopted by the GSA for their area, including extraction limitations or reporting requirements set forth in the GSP. De minimis producers, defined as those producing less than 2 acre-feet per year, are exempt from these provisions.

Producers concerned about their ability to continue extraction should consider getting involved with the groundwater management process in their area, a process with many opportunities for public involvement. These opportunities include public meetings and/or comment periods during the following: formation of a GSA by a local agency; review by the DWR of any proposed basin boundary modification; development by the DWR of groundwater management BMPs; and imposition or increasing a fee on extraction by a GSA. Furthermore, under the law the GSA must make available a statement on how interested parties may participate in the development and implementation of a GSP. In our experience, being “in the room” when important topics are on the agenda greatly enhances one’s ability to advocate their position.

How Does This Law Affect Land Use Planning?

The law contains provisions intended to further strengthen the connection between land use planning and water management in California. Specifically, the law requires that local planning agencies review and consider a GSP, GMP, adjudication action, or Interim Plan prior to adopting a substantial amendment to the agency’s General Plan. The planning agency is required to provide a copy of the proposed amendment to, among others, a GSA with authority over the planning area. Likewise, the GSA is required to provide the planning agency with a copy of its GSP (or other applicable plan) and a report on the anticipated effect of the proposed planning amendment on the implementation of the GSP.

The Bottom Line

This new law will provide, for the first time in California history, a robust framework for groundwater management in the state. The regulatory regime intends to empower local agencies to develop and implement sustainable groundwater management themselves, and gives a newly created entity, the GSAs, broad authority to enact the law’s provisions. However, the law also gives the state the authority and responsibility to intervene if local action is deemed insufficient to achieve the sustainability goals. Groundwater producers will face new requirements for flow measurement and reporting and may be charged fees for groundwater extraction and be subject to limitations on extraction or face civil penalties and fines. With effects on groundwater producers, local governments, and the state, not to mention potentially consumers and the environment, the law represents a paradigm shift in California water law.

To find out more about how EKI can assist you in adapting to the new regulatory regime created by this new law, please contact Anona Dutton at adutton@ekiconsult.com or (650)292-9100.