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Key Regulations Under California’s Sustainable Groundwater Management Act Will Be Finalized June 1

April 27, 2016

As controversy abounds over exactly what effect this winter’s El Niño rains have had on the longstanding drought in California, efforts to develop comprehensive state groundwater regulation continue to advance. The Department of Water Resources recently wrapped up the public comment period for its draft regulations on Groundwater Sustainability Plans under the 2014 Sustainable Groundwater Management Act (“SGMA”). The comments submitted reveal that the battle between competing interests that characterized the passage of SGMA is far from over, and that there is still much valuable regulatory territory to be won or lost. The finalized regulations, due June 1, will have a significant impact on the developing role of Groundwater Sustainability Agencies and on just how much control is left at the local level.

Water districts and counties especially should be following these regulations closely and should talk to experts about how best to meet their interests while complying with the new requirements. Likewise, groundwater users should be making sure that their local authorities stay on top of SGMA developments. In addition to new regulations being promulgated, the state legislature continues to explore modifications to SGMA before its effects have even been felt.

The Last State in the West to Comprehensively Regulate Groundwater

In September 2014, Governor Jerry Brown signed into law a three-bill suite collectively known as the Sustainable Groundwater Management Act. Though California had made various attempts at state-level involvement in groundwater management throughout the past century, the signing of SGMA made it the last of the Western states to enact a comprehensive regulatory scheme for its groundwater resources.[1]

SGMA requires groundwater basins to be managed sustainably at the local level. It provides for the creation of local Groundwater Sustainability Agencies (“GSAs”) with various financial and enforcement powers, tasked with developing and implementing Groundwater Sustainability Plans (“GSPs”) for the basins or sub-basins under their jurisdiction. GSPs must be in place by 2020 or 2022, and must achieve sustainability by 2040 or 2042.[2] At the state level, the Department of Water Resources (“DWR”) supplies technical recommendations and monitors technical sufficiency, and the State Water Resources Control Board (“SWRCB”) exercises the police power to step in if local agencies fail.

GSAs may be existing local agencies or may be newly created for the purpose of SGMA compliance. Existing local water agencies can first elect to be the GSA, but not every groundwater user is under the jurisdiction of an existing local water agency. Counties are made the default GSA for remaining areas, and allowed to opt-out if they so choose. If no other agency then forms a GSA for the left-out areas, groundwater users in those areas must report directly to SWRCB, which can charge fees for having to assume management responsibility.[3]

SGMA defines sustainable groundwater management as the “management and use of groundwater in a manner that can be maintained during the planning and implementation horizon without causing undesirable results.”[4] Six “undesirable results” are enumerated, forming the key criteria for a GSP’s success: (i) chronic lowering of groundwater levels indicating a significant and unreasonable depletion of supply; (ii) significant and unreasonable reduction of groundwater storage; (iii) significant and unreasonable seawater intrusion; (iv) significant and unreasonable degraded water quality; (v) significant and unreasonable land subsidence; and (vi) surface water depletions that have significant and unreasonable adverse impacts on beneficial uses of the surface water.[5]

Several milestones in the implementation of SGMA have already been achieved. These include the initial prioritization of basins,[6] completed by Jan. 1, 2015; regulations for modifying groundwater basin boundaries,[7] completed by Jan. 1, 2016; and the identification of “critically overdrafted” basins,[8] completed in January 2016. DWR’s GSP and Alternatives regulations[9] are due June 1, 2016. DWR regulations regarding water available for replenishment[10] and best management practices[11] are both due Jan. 1, 2017. An interim update to Bulletin 118,[12] which delineates groundwater basins based on the latest hydrological and geological data, is due in January 2017 with a comprehensive update due in 2020.

Public Comments on Newest Draft Regulations Reveal Unresolved Tensions 

The most recent regulations to be published pursuant to SGMA are DWR’s Draft Groundwater Sustainability Plan (GSP) Emergency Regulations, which deal with the development and evaluation of GSPs, Alternatives, and Coordination Agreements.[13] DWR published its draft regulations on February 18, 2016, following an extensive public scoping period that took place during much of 2015. The public comment period for the draft regulations closed on April 1, 2016, and the final regulations are due on June 1, 2016.

The draft regulations establish procedures to be followed in creating GSPs (or sanctioned “Alternatives” to GSPs), and in coordinating GSPs within and amongst individual basins. They specify technical and reporting standards, administrative requirements, monitoring requirements, and necessary GSP contents. Importantly, the draft regulations do not themselves establish quantitative or even qualitative thresholds for “significant and unreasonable” effects. They leave this to the discretion of local agencies. What the draft regulations do require is that all local agencies construct these thresholds in certain ways.

The public comments received by DWR reveal a number of common concerns, many of which are, as would be expected, conflicting.[14] Many commenters charged that DWR exceeded or even contradicted SGMA’s mandate in places, and these statutory challenges will likely find their way to the courts in the not-too-distant future.

A number of commenters expressed concerns with DWR’s innovation of the “Coordinating Agency,” a mandatory entity under the draft regulations that serves as a single point of contact with DWR for a single basin. For example, the Kings County Farm Bureau expressed concerns that creation of a Coordinating Agency would create a hierarchy among the GSAs that was not contemplated in SGMA and that would undermine GSA authority.[15] Likewise, the San Joaquin Farm Bureau Federation argued that implementing Coordinating Agencies would divest GSAs of their power, and that each basin should be able to develop its own coordination strategy which may or may not include a Joint Powers Authority.[16] Along similar lines, the Northern California Water Association urged DWR not to try to make headway toward a one-plan-per-basin approach, which it argued was explicitly rejected in SGMA.[17]

Additional concerns were expressed by stakeholders regarding the amount of flexibility provided at the local level. Several commenters charged that DWR had developed regulations that are too prescriptive and universal where SGMA was meant to allow for significant local variation. For instance, the Santa Clara Valley Water District argued that the regulations go too far in telling GSAs how to set thresholds for “significant and unreasonable” impacts, such as by requiring that the threshold for significant and undesirable seawater intrusion be a location, while a rate of intrusion might be more meaningful locally.[18] The Santa Clara Valley Water District further expressed concern that the draft regulation’s data reporting requirements are excessive and impractical, and suggested that local agencies should be responsible for synthesizing local data and providing DWR with a summary. The Sacramento Suburban Water District commented on a perception shared by several commenters that DWR had assumed local entities would fail, when in fact many are already managing groundwater successfully.[19] The Sacramento Suburban Water District additionally expressed concern that some of DWR’s requirements would impose such high costs that they would actually interfere with effective groundwater management that is already taking place.

One common source for these concerns would seem to be the fact that the power dynamics of the new groundwater scheme are simply not yet settled. It is not yet clear which local agencies will ultimately get to play the role of GSA or exactly what territory those GSAs will control. On top of that, DWR’s draft regulations create the possibility of one “Coordinating Agency” having supercontrol over all of the GSAs for a single designated basin. Groundwater users cannot yet feel certain about whose authority they will have to deal with, or how that authority will be exercised. Thus, one advantage of erring toward local flexibility is that it makes it easier to maintain the power dynamics that already exist in a region and therefore easier for groundwater users to predict what the future holds.

By contrast, a number of environmental advocacy and academic commenters took issue with the “substantial compliance” standard that DWR worked into the regulations. The aggregated Sierra Club comment letters sent in by over 4,000 individual members called on DWR to require GSAs to actually achieve sustainability.[20] The UC Berkeley School of Law’s Center for Law, Energy and the Environment advocated for deleting the concept of “substantial compliance” altogether, urging DWR to focus on providing more guidance on agency formation in order to ensure effective governance.[21] The Union of Concerned Scientists also called for deleting the “substantial compliance” standard and expressed concern that the draft regulations do not pay enough attention to actual sustainability.[22] Similarly, The Nature Conservancy advocated for erring on the side of being overly prescriptive and overly conservative in groundwater management.[23]

The comments received by DWR reflect the competing concerns that attended SGMA’s passage: balancing local control over local resources against a statewide need to achieve sustainability. Since many of the comments call for fundamental changes to the structure DWR has created in the draft regulations, and on both sides of the scale, it seems unlikely that DWR will adopt those suggestions in the two months it has to finalize the regulations. As is often the case, commenters who submitted narrowly tailored and specific suggestions are likely to see the greater payoff from their efforts.

A Restless Legislature

Ongoing SGMA regulatory rollouts are not the only place that California groundwater management is currently in flux. The California state legislature continues to engage in the project as well. For example, SB 13 was signed by the Governor in September 2015 to make various clarifying changes to SGMA related to GSA formation. There are currently at least three bills under consideration that would affect the management of groundwater in California.

In the Assembly, two bills are under consideration that deal with the possibility of a statewide market for water transfers. AB 2304, a bill introduced by Assembly Member Marc Levine (D-San Rafael), would create a centralized online water market platform called the California Water Market Exchange under the purview of the state Natural Resources Agency.[24] AB 1755, introduced by Assembly Member Bill Dodd (D-Napa), would create a statewide water information system and online water transfer information clearinghouse.[25]

In the Senate, SB 1317, introduced by Senator Lois Wolk (D-Davis), also known as the Aquifer Protection Act, would significantly accelerate requirements under SGMA by requiring cities and counties overlying high- and medium-priority basins to add certain conditions to new well permits by July 1, 2017.[26] SB 1317 would exempt local jurisdictions that have already enacted aquifer protection measures as well as small household wells and replacement wells. The bill would represent a marked curtailing of the local flexibility provided under SGMA, mandating specific requirements in just over the next year and vesting the associated authority exclusively in cities and counties.

Whether these particular bills become law or not, more such bills are likely to continue to emerge, especially to the extent that the many undesirable results of poor groundwater management continue to make headlines between now and the 2040/42 deadline for GSP success. Legislators will want to respond to their constituents’ concerns about land subsidence, sea water contamination, and lost access to groundwater, and it will be hard to simply respond that these things will brought below a “significant and unreasonable” threshold some twenty years from now.

Of course, additional changes to groundwater management in California may also come in the form of eventual judicial challenges, such as statutory challenges to agency regulations or constitutional challenges to SGMA itself. The results of these cases may have substantial impacts not only on the enforcement of SGMA but also on state authority over water resources more broadly.

Looking Forward

In 2014, California ended its days of being the only state in the West to lack a comprehensive groundwater regulatory scheme. Though it was behind the curve on that issue, California generally has a history of leading the nation in environmental regulation. Now that SGMA has opened the door to state-level groundwater management, stakeholder engagement may drive trendsetting innovation once more. From water districts to environmental organizations to farming associations to universities, Californians are wise to pay attention to the challenges and opportunities that SGMA presents.

For more information, please contact Marina Cassio in our San Francisco office or any of the members of our Water Quality or Water Resources teams.

[1] See Tina Cannon Leahy, “Desperate Times Call for Sensible Measures: The Making of the California Sustainable Groundwater Management Act,” 9 Golden Gate U. Envtl. J. 5, 5­­–6 (2015).

[2] Cal. Water Code §§ 10720.7(a); 10727.2(b)(1). All further statutory references are to the Cal. Water Code unless otherwise specified.

[3] See Leahy, supra note 1, at 36–37.

[4] § 10721(v).

[5] § 10721(x). For a more exhaustive discussion of the requirements of SGMA and issues related to its implementation, see Kevin T. Haroff, “New Groundwater Legislation Will Have Dramatic Impacts on California Agriculture,” Marten Law News, January 22, 2015.

[6] § 10722.4; see DWR, Initial Groundwater Basin Prioritization under the SGM Act.

[7] § 10722.2; see DWR, Basin Boundary Modifications.

[8] § 12924; see DWR, Critically Overdrafted Basins.

[9] § 10733.2; see DWR, Groundwater Sustainability Plan Emergency Regulations.

[10] § 10729(c).

[11] § 10729(d).

[12] § 12924.

[13] See supra note 9.

[14] See DWR, Public Comments - Draft GSP Emergency Regulations.

[15] Comments from the Kings County Farm Bureau (April 1, 2016).

[16] Comments from the San Joaquin Farm Bureau Federation (April 1, 2016).

[17] Comments from the Northern California Water Association (April 1, 2016).

[18] Comments from the Santa Clara Valley Water District (Mar. 30, 2016).

[19] Comments from the Sacramento Suburban Water District (April 1, 2016).

[20] Comments from Sierra Club members (April 1, 2016).

[21] Comments from UC Berkeley School of Law Center for Law, Energy & the Environment (April 1, 2016).

[22] Comments from the Union of Concerned Scientists (April 1, 2016).

[23] Comments from The Nature Conservancy (April 1, 2016).

[24] AB 2304 - California Water Market Exchange.

[25] AB 1755 - The Open and Transparent Water Data Act.

[26] SB 1317 - Conditional Use Permit; Groundwater Extraction Facility.

 

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