SUMMARY OF THE SUSTAINABLE GROUNDWATER MANAGEMENT ACT

Transcription

1 SUMMARY OF THE SUSTAINABLE GROUNDWATER MANAGEMENT ACT Prepared by Peter L. Candy August 2015 I. INTRODUCTION The Sustainable Groundwater Management Act ( SGMA or Act ), effective January 1, 2015, fundamentally changes California s approach to managing its groundwater basins. Prior to SGMA, except for in a few areas of the state where county ordinances were adopted or special legislation applied, there was no regulatory scheme in place to achieve sustainable management of the state s groundwater resources. In fact, in most situations, the most efficacious way to regulate groundwater extractions was to quantify the rights of basin users through expensive and protracted basin adjudications. Under SGMA, the Legislature has set an aggressive schedule for local water districts, cities, or counties to assume the role of local groundwater regulator, to adopt regulatory plans, and to achieve groundwater sustainability by implementing those plans. SGMA empowers local groundwater regulators to impose fees, mandate pumping reductions, and require other measures to achieve groundwater sustainability within established time frames. The intent of the legislation is to provide local governing boards with the authority to manage groundwater for their own long-term self-interest; however, allocating the burden of cutbacks on groundwater extractions, as well as responsibility for payment of pump assessments to fund necessary basin replenishment and other management objectives is likely to result in conflicts between stakeholders. If stakeholders fail to timely reach consensus on what the regulatory plan will look like, and how the plan will be implemented, SGMA authorizes the state to intervene and impose its own plan for achieving sustainability of the local groundwater resource. 1 P age Peter L. Candy

2 II. THE ACT APPLIES TO ALL GROUNDWATER BASINS SPECIAL EMPHASIS IS PLACED ON MEDIUM- OR HIGH- PRIORITY BASINS The Act s regulatory requirements apply to all groundwater basins in the state, but special requirements apply to basins or sub-basins that the California Department of Water Resources ( DWR ) designates as medium- or high-priority basins. (Water Code ) A. Designation of Groundwater Basins Pursuant to the Act, groundwater basins are identified and delineated based upon the designation of basins or sub-basins set forth in DWR s Bulletin 118. (Water Code ) But because DWR s basin boundaries were not necessarily developed for management purposes, they are necessarily optimal for effective management in many locales. To address this concern, the Act allows stakeholders to request that DWR revise basin boundaries to better facilitate groundwater management. (Id ) By January 1, 2016, DWR must develop regulations regarding the information required to support basin boundary modification requests. (Id (b).) B. Ranking of Groundwater Basins Under the Act, DWR was required to rank each of the basins or sub-basins identified in Bulletin 118 as either a very low-, low-, medium-, or high-priority basin based on different factors threatening the basin s integrity. DWR was required to complete its initial ranking of basins by January 31, (Water Code (b).) In establishing these rankings, DWR was required to consider many of the same factors considered in ranking basins under the California Statewide Groundwater Elevation Monitoring ( CASGEM ) program. The only distinction is that, under the Act, DWR must also consider adverse impacts on local habitat and local streamflows. The factors DWR must consider in ranking basins are as follows: The population overlying the basin; Projected growth of overlying population; The number of public supply wells producing from the basin; The total number of wells producing from the basin; Overlying irrigated acreage; Reliance on groundwater as the primary source of water; Impacts on the groundwater, including overdraft, subsidence, saline intrusion, and other water quality degradation; and Any other information determined to be relevant, including adverse impacts on local habitat and local streamflows. (Water Code 10933(b).) 2 P age Peter L. Candy

3 C. DWR s Basin Prioritization On December 15, 2014, DWR announced that the basin prioritization it finalized in June 2014 under the CASGEM program would be its initial prioritization in compliance with the Act. DWR's current basin priority map shows 127 high- and medium-priority basins. A basin s initial prioritization under the Act may change in the future any time DWR updates Bulletin 118. The next update is expected in D. Adjudicated Basins and AB 3030 Basins The Act's regulatory planning mandates do not apply to adjudicated basins where groundwater rights have been quantified and/or a court judgment establishes a watermaster to oversee management of groundwater resources. (Water Code ) Nevertheless, adjudicated basins are still required to comply with certain reporting requirements. (Id (f).) In addition, areas covered by so-called AB 3030 groundwater management plans previously adopted under Water Code section are subject to the Act's new regulatory planning mandates. Existing AB 3030 groundwater management plans in medium- and high-priority basins must be replaced or augmented in order to meet the sustainability plan requirements set forth in the Act. (Water Code et seq.; (a).) III. THE ACT REFLECTS A LEGISLATIVE PREFERENCE FOR LOCAL REGULATION OF GROUNDWATER BASINS Fundamental to SGMA s statutory scheme is the concept that groundwater management is best accomplished locally. The Act encourages local management of groundwater basins through the actions of local governmental agencies. The state s primary roll under the Act is to provide guidance and technical support to local agencies implementing the Act, and only when local agencies fail to meet the milestones or other requirements established under the Act does SGMA require state-level regulatory intervention. SGMA encourages local regulation to the greatest extent feasible, while minimizing state intervention to only when necessary to ensure that local agencies manage groundwater in a sustainable manner. (Water Code (h).) A. Establishment of Groundwater Sustainability Agencies The Act requires local districts, cities, or counties to assume the role of local groundwater regulator through the identification or creation of Groundwater Sustainability Agencies ( GSAs ) for every basin in the state. (See Water Code , 10723, ) The Act requires GSAs to be designated by June 30, (Id (a)(1).) GSAs must be a public agency or group of public agencies within the geographic limits of a groundwater basin. Any local agency or combination of local agencies overlying a groundwater basin may elect to be 3 P age Peter L. Candy

4 a GSA. (Id (a).) The Act defines local agency as a local public agency with water supply, water management, or land use responsibilities within a groundwater basin. (Id (m).) In many basins, there is likely to be conflict over which of several existing local agencies should be the designated the GSA. The Act attempts to address this by allowing for the creation of new entities to act as GSAs, thus sharing the responsibility of basin governance. Stakeholders in basins with multiple overlying local jurisdictions must agree on whether to have a single GSA carrying out a single sustainability plan, or to have multiple GSAs that will each develop and carry out separate sustainability plans in coordination with the other GSAs in that basin. In multijurisdictional basins, the single-agency approach may be carried out through a joint powers authority, a memorandum of agreement, or other agreement. (Water Code (a).) B. Counties Act as GSAs in White Areas In so-called white areas, where no local agency with water supply management authority exists, the county automatically assumes the role of GSA. (Water Code 10724(a). However, a county has the option to reject this role if it chooses to do so by notifying DWR. (Id (b).) In such cases, groundwater pumping in white areas does not escape regulation under the Act. Section 10724(b) states that when counties reject the role of GSA in areas where they otherwise have jurisdiction, the areas are subject to the new groundwater production monitoring and reporting requirements set forth in the Act. (Id.) C. Stakeholder Involvement The Act does not extend opportunities for shared governance to nongovernmental stakeholders. Water Code (b) allows water corporations regulated by the Public Utilities Commission to participate in GSAs, but only if the local agencies approve their participation. Otherwise, non-governmental stakeholders are relegated to the status of interested persons under Water Code Local agencies have the option of creating advisory committees allowing interested persons to provide input on GSA decision-making, but there is nothing in the Act which mandates this as a requirement. D. Practical Considerations In areas of the state where agricultural interests compete increasingly with municipal and industrial (M&I) interests for limited access to a shared groundwater resource, the exclusion of non-governmental stakeholders from the GSA decision-making process places agricultural landowners at a disadvantage. Owners of land overlying a groundwater basin (e.g., farmers) hold overlying rights. Cities, public water suppliers, and anyone exporting groundwater for use outside a basin hold appropriative rights. Overlying rights are superior in 4 P age Peter L. Candy

5 priority to appropriative rights. The cumulative needs of all overlying owners must be satisfied before there is any surplus water available for appropriation. City of Pasadena v. City of Alhambra (1949) 33 Cal. 2d 908, If overlying owners are using the full safe yield of the basin for reasonable and beneficial use, then no surplus water exists, and technically no water is available for appropriation. Corona Foothill Lemon Co. v. Lillibridge (1937) 8 Cal. 2d 522; Monolith Portland Cement Co. v. Mojave Public Utility District (1957) 154 Cal. App. 2d 487. E. Procedural Requirements Before electing to become a GSA, the local agency or group of local agencies must hold a noticed public hearing on the subject in the county or counties overlying the basin. (Water Code 10723(b).) GSAs must be designated for all groundwater basins by June 30, (Id (a)(1).) The failure of a local agency or group of local agencies to designate a GSA by the June 30, 2017 deadline triggers a requirement that the state intervene to act in their place. (Id (a).) IV. GROUNDWATER SUSTAINABILITY PLANS The principal goal of SGMA is to ensure that all groundwater basins are managed sustainably. (Water Code (a).) Accordingly, for all medium- and highpriority basins, the Act requires GSAs to adopt Groundwater Sustainability Plans ( Sustainability Plans or GSPs ), or alternatives that comply with the Act. Sustainability Plans must be designed to achieve sustainability within a twenty (20) year plan implementation horizon. (Id (a)(1) and (2); (b)(1).) For all low- and very low-priority basins, GSAs are encouraged to adopt Sustainability Plans, but there is nothing in the Act which makes adoption mandatory. (Water Code (b).) A. Deadlines For Sustainability Plan Adoption The Act establishes deadlines for GSAs with jurisdiction over medium- and highpriority basins to adopt Sustainability Plans or alternatives that comply with the Act. (Water Code (a)(1) and (2).) GSAs in medium- or high-priority basins with critical conditions of overdraft must approve their Sustainability Plans by January 31, (Id (a)(1).) GSAs in medium- or high-priority basins without critical conditions of overdraft have until January 31, 2022 to adopt Sustainability Plans. (Id (a)(2).) B. Contents As indicated previously, Sustainability Plans must be designed to achieve sustainability within twenty (20) years of adoption. (Water Code (b)(1).) The Act uses the term sustainability goal, defined as 5 P age Peter L. Candy

6 implementation of measures targeted to ensure that the applicable basin is operated within its sustainable yield. (Id (t).) A basin s sustainable yield is calculated as the maximum quantity of water... that can be withdrawn annually from a groundwater supply without causing an undesirable result. (Id (v).) Undesirable results are defined under the Act as: Chronic lowering of groundwater levels indicating a significant and unreasonable depletion of supply; Significant and unreasonable reduction of groundwater storage; Significant and unreasonable seawater intrusion; Significant and unreasonable degraded water quality, including the migration of contaminant plumes that impair water supplies; Significant and unreasonable land subsidence that substantially interferes with surface land uses; and/or Surface water depletions that have significant and unreasonable adverse impacts on beneficial uses of surface water. (Water Code 10721(w).) Notably, the Act does not expressly define overdraft, nor consider it to be an undesirable result. Instead, the Act considers the chronic lowering of groundwater levels indicating a significant and unreasonable depletion of supply to be an undesirable result. The Act specifically states that overdraft during a period of drought is not sufficient to establish this type of chronic lowering (i.e., undesirable result), provided the basin is managed in a way that ensures groundwater reduction during drought periods is offset by recharge during other periods. (Water Code 10721(w)(1).) Thus, it seems that Sustainability Plans may authorize some level of overdraft (i.e., pumping in excess of safe-yield) in times of drought, provided there is a reasonable basis for the GSA to conclude that the corresponding drawdown in basin water levels will be offset by recharge during wet cycles. 1 Sustainability Plans must provide a description of the physical setting and characteristics of the aquifer system underlying the basin. (Water Code (a).) They must specify measurable objectives to achieve the sustainability goal within twenty years of adoption. (Id (b).) They must also specify interim milestones in increments of five years demonstrating that progress toward the sustainability goal is being achieved. (Id.) The Act provides a list of additional required components, many of which are similar to 1 In City of Santa Maria v. Adam (2012) 211 Cal.App.4th 266, , the court defined overdraft as pumping which exceeds safe-yield. The court s definition was used for purposes of determining when the statutory period for acquiring prescriptive rights commenced. 6 Page Peter L. Candy

7 the current requirements for AB 3030 groundwater management plans. (Id et seq.) The Act requires GSAs to address all the following issues in Sustainability Plans where appropriate: Control of saline water intrusion; Wellhead protection areas and recharge areas; Migration of contaminated groundwater; A well abandonment and well destruction program; Replenishment of groundwater extractions; Activities implementing, opportunities for, and removing impediments to, conjunctive use or underground storage; Well construction policies; Measures addressing groundwater contamination cleanup, recharge, diversions to storage, conservation, water recycling, conveyance, and extraction projects; Efficient water management practices, as defined in Water Code 10902, for the delivery of water and water conservation methods to improve the efficiency of water use; Efforts to develop relationships with state and federal regulatory agencies; Processes to review land use plans and efforts to coordinate with land use planning agencies to assess activities that potentially create risks to groundwater quality or quantity; and Impacts on groundwater dependent ecosystems. (Water Code ) Finally, although Sustainability Plans must be designed to achieve the sustainability goal within twenty (20) years of adoption, they must incorporate an overall planning horizon spanning fifty (50) years. (Water Code (c); 10721(q).) 2 C. Stakeholder Participation When developing Sustainability Plans, GSAs are required to consider the interests of all beneficial uses and users of groundwater. (Water Code , ) The interests to be considered must include the following: 2 Water Code (c) requires GSPs to include a planning and implementation horizon. Water Code 10721(q) defines planning and implementation horizon as fifty years. 7 Page Peter L. Candy

8 holders of overlying groundwater rights (including agricultural users and domestic well owners); municipal well operators; public water systems; local land use planning agencies; environmental users of groundwater; surface water users, if there is a hydrologic connection between the applicable surface and groundwater bodies; the federal government, including the military and federal land managers; California Native American tribes; disadvantaged communities; any judicially appointed watermaster administering the final judgment in a groundwater rights adjudication; any water replenishment district; and certain local agencies conducting groundwater elevation monitoring. (Water Code ) Prior to initiating development of a Sustainability Plan, the local GSA must provide DWR, the public, and the governing body of any city or county located within the planning area with a written statement describing how interested parties may participate in the development and implementation of the Sustainability Plan. (Id (a).) D. Practical Considerations Determining a basin s sustainable yield and other technical matters required to develop a GSP may generate considerable controversy among stakeholders. As an initial measure, the GSA might focus on building consensus for its GSP by collaborating with stakeholders in the preparation of the technical study needed to support GSP development. To facilitate such efforts, the GSA could establish a technical advisory committee comprised of representatives from divergent stakeholder groups. The committee could oversee management of the technical study and development of the technical report needed to support GSP development. To the extent divergent interests share in the development of the technical study, they will be more likely to accept the technical findings and support the management strategies adopted. E. Procedural Requirements Adoption or amendment of a Sustainability Plan must occur following a public hearing held at least ninety (90) days after providing notice to any city or county within the area covered by the proposed plan or amendment. (Water Code ) The process of preparing and adopting a Sustainability Plan is 8 P age Peter L. Candy

9 exempt from review under the California Environmental Quality Act ("CEQA"). (Water Code ) F. DWR Regulations DWR must issue emergency regulations by June 1, 2016 to guide GSAs on their development of Sustainability Plans. (Water Code ) In addition, the regulations must address criteria DWR will apply evaluating the adequacy of Sustainability Plans, and inter-agency agreements to coordinate sustainability planning in basins with multiple agencies involved in groundwater management. (Id.) G. Post-Adoption Requirements Upon adoption of a Sustainability Plan, the designated GSA must submit the Plan for DWR review. (Water Code (a), 10733(a). DWR is required to apply the Act and its regulations in reviewing the adequacy of all GSPs. The Act requires DWR to evaluate each GSP for adequacy within two years after its adoption and submission. (Id (d).) Upon completion of its review, DWR has the power to request changes in order to address deficiencies. If DWR finds problems, it may recommend corrective actions. (Id.) DWR is required to re-evaluate GSPs every five years to ensure continued compliance and sufficiency. (Water Code ) The focus is on achieving milestones, objectives and the twenty-year sustainability goal. (Id.) Similar to DWR's initial assessment, its follow-up five-year assessments may recommend corrective actions to address any GSP deficiencies. (Id.) GSAs are also required to periodically evaluate their Sustainability Plans, postadoption, to assess changing basin conditions that might warrant modifications. The focus again is to ensure timely achievement of milestones, objectives, and the twenty-year sustainability goal. (Water Code ) In addition, GSAs are required to submit to DWR annual compliance reports containing basin groundwater data, including elevation, aggregate extraction, water usage and any changes in groundwater storage. (Id ) H. Funding To fund development and enforcement of a Sustainability Plan, GSAs are authorized to impose fees on groundwater production or other regulated activity following noticed public hearings. (Water Code 10730(a)-(c) and ) 9 P age Peter L. Candy

10 V. GROUNDWATER SUSTAINABILITY AGENCIES HAVE BROAD POWERS TO IMPLEMENT GROUNDWATER SUSTAINABILITY PLANS The Act vests local agencies with significant powers when acting in the capacity of GSAs. The Act authorizes GSAs to: Adopt rules, regulations, ordinances, and resolutions; Conduct investigations of water rights; Require well registration; Require well operators to measure and report extractions; Require reporting of diversions of surface water to storage; Acquire property and water rights; Reclaim water; Impose well spacing requirements; Regulate groundwater extractions, including limiting or prohibiting groundwater production; Impose fees and assessments; and Undertake enforcement actions for noncompliance. A. Specific Powers The Act empowers GSAs to directly regulate groundwater pumping by restricting or suspending well production, prohibiting new well construction, imposing wellspacing requirements, and requiring measurement (e.g., metering) and reporting of groundwater production by well owners. (Water Code , (a).) 3 In addition, GSAs have authority to conduct investigations to determine specific groundwater management needs, to help prepare sustainability plans, to propose and update fees, and to monitor compliance and enforcement of sustainability plan requirements. (Water Code ) This includes the power to inspect private property or facilities with an owner s consent or via an inspection warrant. (Id (c).) For purposes of carrying out projects to augment water supply availability, the Act gives GSAs a range of powers, including authority to acquire property, water rights, and water supplies, and to construct, operate, and maintain works or improvements within or outside of the GSA's boundaries. (Water Code ) GSAs may also reclaim, purify, desalinate, treat, or otherwise manage 3 A notable exemption from metering and reporting requirements applies to de minimus extractors. (Water Code (e).) Water Code 10721(e) defines de minimis extractor to mean a person who extracts, for domestic purposes, two acre-feet or less per year. 10 Page Peter L. Candy

11 and control polluted water, wastewater, or other waters for subsequent use in achieving basin sustainability. (Id (e).) To fund groundwater management actions, including construction, operation, and maintenance of new water development facilities, the Act empowers GSAs to impose fees pursuant to article XIII D, section 6(a) and (b) of the California Constitution. This includes fixed fees, fees charged on a volumetric basis, fees that increase over time, and fees based on impacts to the groundwater basin. (Water Code (a)-(d).) Small domestic wells are exempt from fees unless a GSA decides to regulate small pumpers. (Id (a).) 4 Under the Act, well permitting authority is to remain primarily with counties. The Act authorizes GSAs to request that counties provide well construction applications for the GSA s consideration and comment, but GSAs are not authorized to issue well construction permits unless that power is delegated to them by the county. (Water Code (b). B. Penalties The Act authorizes GSAs to impose civil penalties of up to $500 per acre-foot of groundwater pumped in excess of the amount authorized by a Sustainability Plan. No prior notice of the violation is required in order for the penalty to be assessed. In addition, GSAs may impose civil penalties of $1,000 plus $100 per day for other violations, provided that 30 days prior notice of the violation is given, and compliance is not achieved within the 30 day time-frame. (Water Code 10732(a)(1 )-(2).) C. Practical Considerations Developing the political consensus needed to make hard choices about how to achieve sustainability will become a significant future challenge for GSAs. The intent of the legislation is to provide local governing boards with the authority to manage groundwater for their own long-term self-interest; however, allocating the burden of cutbacks on groundwater extractions, as well as responsibility for payment of pump assessments to fund necessary basin replenishment and other management objectives is likely to result in conflicts between stakeholders. Under the common law, senior priority water rights holders are generally not required to reduce extractions or incur significant expense for the benefit of lower-priority water rights holders. (City of Barstow v. Mojave Water Agency (2000) 23 Cal. 4th 1224, ) Therefore, significant conflicts are likely to 4 Water Code 10730(a) prohibits GSAs from imposing fee on de minimis extractors unless the GSA is regulating de minimis extractors. Water Code (e) defines de minimis extractor to mean a person who extracts, for domestic purposes, two acre-feet or less per year. 11 Page Peter L. Candy

12 arise in the exercise of a GSA s powers under the Act, where water rights priorities are contested or the equities of a proposed management action are disputed. If a negotiated agreement cannot be reached to resolve such conflicts, the basin may be subject to SWRCB intervention or a groundwater adjudication. The GSA should pursue early and diligent outreach to affected groundwater users to encourage consensus on these subjects. VI. ACHIEVING SUSTAINABILITY IN COMPLIANCE WITH GROUNDWATER SUSTAINABILITY PLANS The Act imposes a twenty (20) year deadline for GSAs to achieve sustainability in their basins once a Sustainability Plan has been adopted. (Water Code (b)(1).) The Act defines sustainability as operating the basin within its sustainable yield, which generally means the maximum quantity of water that can be withdrawn annually from a groundwater supply without causing an undesirable result. (Id (t), 10721(v) and 10721(w).) DWR may grant up to two extensions of five years each to GSAs that are able to demonstrate good cause for not achieving sustainability within the Act's twenty (20) year deadline. (Id (b)(3).) VII. DIRECT STATE REGULATION IN THE EVENT LOCAL EFFORTS FAIL If local groundwater management efforts fall short, the State Water Resources Control Board ( SWRCB ) may step in and impose its own interim sustainability plan. State intervention represents a backstop when local agencies are unwilling or unable to sustainably manage their groundwater basins. The Act authorizes the SWRCB to intervene upon a local agency s failure to: Timely designate a GSA; Timely adopt a Sustainability Plan; Adopt a Sustainability Plan whose content is adequate to achieve groundwater sustainability; or Implement an otherwise adequate Sustainability Plan. (Water Code ) Specifically, the Act authorizes the SWRCB to designate certain medium- and high-priority basins as probationary basins if prescribed local management requirements are not met. (Water Code ) The SWRCB is authorized to designate medium- and high-priority basins subject to critical conditions of overdraft as probationary basins if (1) no local agency has been designated as the GSA by June 2017; or (2) the agency designated as the GSA fails to prepare and adopt an adequate GSP by January 31, (Id (a)(1)-(3).) 12 P age Peter L. Candy

13 The SWRCB is authorized to designate all other medium- and high-priority basins as probationary basins if (1) no local agency has been designated as the GSA by June 2017; or (2) the agency designated as the GSA fails to prepare and adopt a GSP by January 31, 2022; or (3) the GSP is inadequate and the basin is either in a condition of long-term overdraft or groundwater extractions are resulting in a significant depletion of interconnected surface waters. (Water Code (a)(1), (4)-(5).) For those basins designated as probationary basins, the Act authorizes the SWRCB to remove groundwater authority from local agencies and to adopt and implement an interim plan. (Water Code (a).) Interim plans must identify actions to bring the basin into balance, including a time schedule and description of the plan s monitoring components. (Id (b).) The Act also allows interim plans to incorporate restrictions on groundwater extractions and principles and guidelines for the administration of surface water rights that are connected to the basin. (Id (c).) Where the SWRCB has intervened, local agencies can restore local control by petitioning the State Board to relinquish its management role. (Water Code (g)(1).) The SWRCB must act on the petition within ninety (90) days. (Id (g)(2).) The local agency must demonstrate that, as the designated GSA for the basin, it has adopted an adequate Sustainability Plan. (Id (g)(1).) The filing of a judicial order or decree entered in an adjudication action may also be sufficient to rescind an interim plan. (Id (g)(1)(B),(2),(4).) VIII. SUSTAINABILITY PLANS AND GROUNDWATER RIGHTS Groundwater rights are defined according to common law principles that state courts have developed since California's statehood. (See, e.g., City of Barstow v. Mojave Water Agency (2000) 23 Cal.4th 1224; City of Santa Maria v. Adam (2012) 211 Cal.App.4th 266.) The principal California groundwater rights are overlying rights held by owners of land overlying a groundwater basin (e.g., farmers); appropriative rights of cities, public water suppliers, and anyone exporting groundwater for use outside a basin; and prescriptive rights. (City of Santa Maria, supra, 211 Cal.App.4th at ) All groundwater rights are subject to the reasonable use doctrine arising from article X, section 2 of the California Constitution. (Id. at pp ) Generally speaking, overlying landowners have first priority to a basin's sustainable yield and, as between one another, each is entitled to his or her reasonable correlative share. (City of Santa Maria, supra, 211 Cal.App.4th at ) Under a strict application of the water right priority system, if landowners overlying a basin reasonably need all of the basin's sustainable yield, appropriators of groundwater might, in theory, be cut off from continuing their groundwater use. (Id.) However, if the basin in question were in overdraft, 13 P age Peter L. Candy

14 appropriators using non-surplus groundwater might have acquired prescriptive rights, entitling them to a portion of a basin's safe yield against the claims of overlying landowners. (Id.) The Act expresses the Legislature s intention that neither the Act, nor the actions of a GSA, nor any Sustainability Plan developed pursuant to the Act shall determine or alter common law water rights or water right priorities. (Water Code (b), (a)(2), (b), (i); see also (a), ) In this regard, the Act does not determine or change any groundwater rights, nor does it authorize GSAs or the SWRCB to determine or change groundwater rights. In practice, balancing a basin s safe yield will frequently require reductions in cumulative and individual groundwater production and/or significant assessments to fund replenishment programs. Efforts to allocate the burdens of these programs among competing groundwater users will often be met with claims respecting water right priorities. Conflicts among water rights holders may arise if Sustainability Plans limit groundwater pumping or impose fees or other requirements in ways that seem inconsistent with groundwater right priorities. For example, a Sustainability Plan that reduces current groundwater pumping by farmers without restricting groundwater pumping by cities might result in claims that farmers' overlying rights are being infringed for the benefit of cities whose appropriative rights are junior in priority. Similarly, a Sustainability Plan that imposes fees on groundwater pumping by farmers without imposing the fees on groundwater pumping by cities might result in identical claims. The Act is silent on how pumping allocations and obligations to pay for basin replenishment and management programs will intersect with traditional water right priorities. GSAs will need to resolve such claims through negotiation, litigation, or both. GSAs may facilitate compromise by structuring their Sustainability Plans in ways that respect underlying groundwater rights. For example, the GSA might establish different classes of production allocations and distribute financial responsibilities in a manner that reflects traditional groundwater right priorities. Further, groundwater users might be encouraged to support a Sustainability Plan in order to participate in attractive new opportunities offered by the Plan. Examples include opportunities to carry over unused production allocations from year to year, storage and conjunctive use programs, and voluntary market-based transfers of production allocations. IX. LITIGATION The Act authorizes GSAs to validate their Sustainability Plans pursuant to Code of Civil Procedure section 860 et seq. (Water Code (a).) This process affords the GSA a means to immunize their Sustainability Plans from future legal challenges. The Act prohibits a GSA from bringing an action to determine the validity of a Sustainability Plan sooner than 180 days after Plan adoption. (Id.) 14 P age Peter L. Candy

15 In the meantime, courts may review the legality of a Sustainability Agency's actions pursuant to a traditional writ of mandate under Code of Civil Procedure section (Water Code (e).) In addition, the Act provides that actions to attack, review, set aside, void, or annul any ordinance or resolution that imposes a new or increased fee to support sustainability planning and implementation must be brought within 180 days after adoption. (Water Code (c).) Groundwater adjudications may be the inevitable result for many basins in which conflicts over water right priorities exist. Once complete, the judgment entered in a groundwater adjudication generally provides valuable legal certainty and an efficient means of basin management. For this reason, groundwater adjudication may be a prudent strategy to achieve finality respecting groundwater rights and the durability of Sustainability Plans. Adjudications also benefit from the court s continued jurisdiction to resolve future conflicts pursuant to post-judgment proceedings. This avoids the prospect that a future conflict could nullify aspects of the Plan or otherwise disrupt management. Unfortunately, groundwater adjudications often take far too long (sometimes decades) and cost far too much. A conceptual procedure to streamline groundwater adjudications was considered for inclusion in the Act, but was excluded because of inadequate time to address the complexities of such a process. Efforts are under way to develop legislation to establish a streamlined adjudication procedure for the Legislature s consideration in Such a result could be highly beneficial to cost-effectively resolve groundwater disputes and implement comprehensive management in a timely manner. X. LAND USE PLANNING SGMA amends the Government Code to require close coordination between land use planning agencies and GSAs in the adoption or amendment of any General Plan. (Government Code ) The net result is that land use planning may be constrained by a Sustainability Plan until such time as sufficient groundwater supplies become available. Furthermore, case law acknowledges that future, unexercised overlying rights may have to give way to present reasonable uses a deprioritization of dormant (unused) overlying rights. SGMA builds on this principle. If a landowner s demands are not yet known or development is not sufficiently planned, a GSA s powers may be exercised in a manner that does not account for the land s potential future uses. 15 P age Peter L. Candy

16 XI. CONCLUSION SGMA requires local agencies to enact plans for the sustainable management of local groundwater resources, but the Legislature left key practical issues for future compromise or litigation. For example, the Act does not provide for determinations of groundwater rights or how they relate to pumping allocations and obligations to pay for basin replenishment and management. While Section of the Act declares that the exercise of a GSA s powers shall not be construed to be a final determination of rights to extract groundwater from the basin..., it will be difficult to reconcile these two competing interests. Local stakeholders will be left to resolve water right controversies either through negotiated compromise or the courts. Absent a court challenge or outright basin adjudication, property rights may be compromised in basins with insufficient supplies to serve all projected demands. Peter L. Candy Shareholder, A Professional Corporation 1126 Santa Barbara Street Santa Barbara CA Direct Dial: (805) Ext. 218 Cell Phone: (805) Fax: (805) Switchboard: 16 P age Peter L. Candy