California Legislature Passes Tough Groundwater Management Law

Pumping Reductions, Fees, Monitoring, Other Measures Authorized To Carry Out Local Sustainability Plans That Must Pass State Muster

September 3, 2014 | Bulletin No. 1140275.1

Local government agencies in areas experiencing groundwater overdraft problems would face strict deadlines to approve and carry out "sustainable groundwater management plans" that can limit groundwater pumping and impose fees to pay for overdraft solutions, under new state legislation Gov. Brown is expected to sign.

The groundwater management mandates come from three bills—SB 1168, SB 1319 and AB 1739—generally dubbed the "Sustainable Groundwater Management Act."  The bills were passed on August 29, 2014, as the state confronts three consecutive years of drought and mounting concerns about the long-term sustainability of groundwater supplies.  Groundwater provides up to up to 100 percent of the local water supply in some areas, meets about 40 percent of statewide water demand in average years, and meets up to 60 percent of statewide demand in dry years.

State Rankings To Drive Basin Management

The California Department of Water Resources ("DWR") will use its Bulletin 118 to identify groundwater basins, which it will then rank as very low, low, medium or high priority—depending on the conditions and circumstances of each basin.  DWR's ranking will drive many of the Act's planning mandates.

In basins DWR ranks as medium or high priority with a critical condition of overdraft, one or more sustainable groundwater management plans must be adopted by 2020.  In basins DWR ranks medium or high priority, but without critical conditions of overdraft, one or more sustainability plans must be adopted by 2022.

In basins DWR ranks as low and very low priority, sustainability plans are optional. 

DWR's initial basin priority rankings are due by January 31, 2015.

All told, thousands of landowners, public water suppliers (e.g., public agencies or private water companies), cities, counties and other stakeholders in more than 100 basins across the state may be affected.  The Act would not apply to basins where groundwater rights have been adjudicated and a court retains continuing jurisdiction to manage the basin through a court-appointed watermaster entity.  So-called "AB 3030 plans" adopted under Water Code section 10750 would have to be upgraded to satisfy the Act in areas ranked by DWR as medium to high priority.

Local Sustainability Agencies Must be Designated

Groundwater users and other stakeholders would have until 2017 to designate a "groundwater sustainability agency" to prepare and implement a sustainability plan meeting the legislation's strict new requirements.

A local agency or combination of local agencies that elect to be the groundwater sustainability agency for all or part of a basin must submit to DWR a notice of intent describing the proposed boundaries of the basin or portion of the basin that the sustainability agency intends to manage.  To qualify, the local agency must have water supply, water management or land use responsibility within a basin.  A combination of local agencies may form a sustainability agency through a joint powers agreement or other legal agreement.

DWR must publicly post each notice of intent.  Ninety days after posting by DWR, the subject agency is presumed to be the exclusive groundwater sustainability agency within the area of the basin that agency is managing.  Where multiple agencies post notices of intent for overlapping territories within a basin, the agencies will have to resolve how to coordinate their management efforts.  Negotiations to structure the locally designated sustainability agency may be complicated in basins with multiple agencies seeking to perform the role of sustainability agency.

In portions of a basin that lie outside the boundaries of a local sustainability agency, the county is presumed to be the sustainability agency for those portions.

Local Sustainability Plans Mandated

Sustainability plans would have an overall 50-year time horizon with five-year milestones to accomplish sustainability objectives within 20 years of initial plan implementation. 

To accomplish sustainability, plans will need to specify a basin's "safe yield" or "sustainable yield," based on the volume of groundwater that can be pumped without causing long-term problems, like significant and unreasonable depletion of supply from chronic lowering of groundwater levels, loss of groundwater storage, seawater intrusion (in coastal basins), degraded water quality, migration of contaminant plumes, land subsidence and groundwater pumping that significantly and unreasonably impairs surface water uses (e.g., by depleting stream flows). 

Approval of sustainability plans is exempt from California Environmental Quality Act ("CEQA") review, just as approval of urban water management plans is exempt from CEQA.

Plans May Prescribe Pumping Limits

The Act authorizes a range of groundwater management tools, including: Mandatory well registration, mandatory measurement devices, well spacing requirements on new wells, pumping reports, inspections, fees and the power to regulate, limit or suspend groundwater pumping and to prohibit new wells or increased pumping from existing wells.

Direct State Regulation If Local Plans Fail

If local groundwater management efforts fall short, the State Water Resources Control Board ("Water Board") may step in and impose its own "interim" sustainability plan.  The potential for direct state regulation of local groundwater might lead some basins to adopt more demanding sustainability plans to preserve local control.

Water Board intervention may occur based on: (1) local failure to timely designate a local sustainability agency; (2) failure to timely adopt a sustainability plan; (3) failure to adopt a sustainability plan whose content is adequate to achieve groundwater sustainability; (4) failure to implement an otherwise adequate sustainability plan.  In addition, after January 31, 2022, the Water Board may step in if it agrees with DWR that a sustainability plan is inadequate and the basin is in overdraft.  After January 1, 2025, the Water Board may step in if it agrees with DWR that a plan is inadequate and groundwater pumping is significantly depleting interconnected surface waters (e.g., streams or lakes).

Where the Water Board has stepped in, local control may be restored by petitioning the Water Board to relinquish its management role based on the designation of a local sustainable agency, submission of an adequate sustainability plan, and demonstration of ability to implement the plan.

The Act does not determine or change groundwater rights, which are defined according to common law principles the state courts have developed since California's statehood.  Conflict may arise if sustainable groundwater management plans impose fees or limit groundwater pumping in ways that seem inconsistent with groundwater rights law.

DWR is required to issue emergency regulations by June 1, 2016, to guide development of sustainability plans.  DWR will apply the Act and its regulations in reviewing the adequacy of all plans.  The regulations also will address inter-agency agreements to coordinate sustainability planning in basins with multiple agencies involved in groundwater management.

What To Do Now

Get involved.  Thousands of landowners, public agencies and other stakeholders will be directly affected by California's tough new groundwater management law.  One key to successfully navigating the law's mandates will be early participation in the process to designate the local sustainability agency and to help develop its sustainability plan.  Early involvement can head off disputes that might otherwise result in litigation or, at least, can position a stakeholder to better protect its rights and interests in the event litigation arises.

How Kronick Can Help

For more than 50 years, our firm has helped landowners, public water suppliers, city and county land-use agencies and others successfully navigate California's water supply challenges.  We have broad and deep experience representing clients throughout the state  in groundwater matters, including: Basinwide groundwater adjudications in the Santa Maria Basin, the Seaside Basin and Antelope Valley; local groundwater pumping disputes; groundwater development investigations to support land-use planning decisions; water supply due diligence for real property and business acquisitions; and in a wide range of transactions, regulatory negotiations and litigation throughout California.  Our knowledge, experience, network of professional water industry contacts and solution-driven approach help clients efficiently achieve their water-related business objectives.