Dark Clouds Over California: The Sustainable Groundwater Management Act of 2014

I am excited to release a new white paper regarding the California Sustainable Groundwater Management Act of 2014, entitled Dark Clouds Over California. Please download the white paper and share with your colleagues. For your convenience, the executive summary is published below. Additionally, the Act is spread across three legislative bills, some of which modify each other, making them difficult to read. A compiled version of the Act is available here. Other provisions of the three bills that are not contained within the main body of the Act may be found here.

Executive Summary

During 2014, the California Legislature passed and Governor Brown signed into law three bills that together represent the most significant groundwater legislation in state history: Senate Bills 1168 and 1319 (Pavley) and Assembly Bill 1739 (Dickinson), known as the Sustainable Groundwater Management Act of 2014 (Act). This white paper describes the contents and implications of the Act for groundwater users in California.

Overview of the Act

The Act applies to groundwater found within 515 basins delineated by the California Department of Water Resources (DWR) across the state. DWR has categorized each of those basins as high, medium, low or very low priority, and the 127 basins designated as high or medium priority are the source of approximately 90 percent of all groundwater produced in the state. Groundwater found in fractured bedrock or other geological formations outside the boundaries of a basin is not covered by the Act. In addition, the Act does not apply to 26 basins that have been subject to prior court adjudication, mostly in Southern California.

For the first time in California law, the Act authorizes the establishment of “groundwater sustainability agencies.” A groundwater sustainability agency is not a type of new, independent agency, but a designation that one or a combination of existing local agencies may elect to confer on themselves. The Legislature expressly designated 15 agencies with prior groundwater management roles to be the exclusive sustainability agency within their boundaries. In addition, a group of local agencies may jointly form a sustainability agency through execution of a joint powers or other agreement. Sustainability agencies will be the primary actors for groundwater management in the future, subject to evaluation and potential intervention by the state.

The Legislature has granted broad discretionary powers to sustainability agencies, including authority to allocate groundwater supplies between users within their boundaries and regulate, limit or suspend groundwater extractions. An agency may adopt rules, regulations, ordinances and resolutions related to groundwater management, and has broad powers regarding groundwater monitoring and the construction and operation of new and existing wells. A sustainability agency may impose fees to fund the cost of a sustainability program, including permit fees, groundwater extraction fees and fees imposed as ad valorem property taxes.

A sustainability agency must adopt a groundwater sustainability plan for each high and medium priority basin by January 31, 2022. If DWR has designated a basin as being subject to critical conditions of overdraft, the sustainability plan must be adopted by the earlier date of January 31, 2020. All plans must be submitted to DWR, which will review them for adequacy. If a sustainability agency is not established for the entire area of a high or medium priority basin by July 1, 2017, or a sustainability plan has not been adopted by the deadlines above, or DWR has determined that a sustainability plan is inadequate, the State Water Resources Control Board (SWRCB) may declare the basin to be a probationary basin and adopt an interim plan of the SWRCB’s own creation. Alternatively, an agency may propose a management strategy that does not meet the requirements of a sustainability plan, if the strategy would achieve the sustainability goals of the basin.

Conclusions and criticisms

Selected conclusions and criticisms regarding the Act include the following:

  • The definition of sustainability includes a generally adequate 50-year planning period, but the Act does not define sustainability in terms of the triple goals of maintaining strong water supplies, the environment and the economy. In addition, the Act does not require sustainability agencies to address climate change or variability.
  • The Act gives primary control over groundwater to local public agencies. Disputes are likely given the multitude of local agencies within most groundwater basins and the inherent conflict of interest created by granting one type of groundwater user authority over other users.
  • The power of a sustainability agency to impose permit fees, groundwater extraction fees and ad valorem property taxes will provide important funding for sustainability programs and projects. That power may be abused, however, and an unscrupulous local agency may use its fee authority to collect significant sums from groundwater users.
  • The Act does not adequately recognize or protect groundwater rights and investments. A sustainability agency or the SWRCB may unduly restrict the exercise of groundwater rights through its sustainability plan or rules and regulations.
  • The Act does not prohibit sustainability agencies from taking certain actions against public policy, including water protectionism and anti-trading rules. Those actions may prevent the full and flexible development of the groundwater resources of the state for the benefit of all its citizens.
  • Following the Act, future development of water supplies in California is likely to focus on development of groundwater in low and very low priority basins, water recycling and the desalination of brackish groundwater and seawater. Water use efficiency will remain an important focus, but will require improvement in conjunctive use of water supplies through water markets and trading to realize the full benefits.
  • The clear winners of the Act are local agencies, while clear losers include public utilities, mutual water companies and agricultural groundwater users, especially in the Central Valley. Those parties are likely to bring numerous per se and as applied challenges to the Act, based on alleged violations of due process, equal protection and property rights.

While the Act has a laudable purpose of achieving sustainable groundwater resources for California, there are many negative features of the Act for groundwater users, especially those who are not local public agencies. The title of this white paper, Dark Clouds Over California, reflects the concern of those groundwater users, both urban and agricultural, for whom it is unclear if the Act will bring the steady rain of water security to California, or only the violent storm of legal uncertainty and upheaval.

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