By: Donald Wagner, Esq.

California’s unprecedented drought provided the impetus in Sacramento in the closing weeks of the Legislature’s 2013-14 session for the passage of sweeping new regulations governing groundwater. The new rules, which Gov. Brown likely will sign, amount to a broad re-write of California’s existing groundwater law, the first substantial changes to the law in approximately one hundred years. And with the new rules comes significant new authority for a state agency, drawing upon potentially billions of dollars in new fees, to implement new groundwater management plans over the objections of local water authorities. 

Orange County’s groundwater management system, accomplished across numerous governmental jurisdictions and which has, so far, spared Orange County from the full effects of the drought, is held up as the model for the new state scheme. But the legislation goes well beyond anything done in Orange County. Major changes are coming in the way California regulates and allocates its ground water, and in the way our citizens pay for that water.

The two bills awaiting action by the governor are SB 1168 (Pavley) and AB 1739 (Dickenson). Senator Fran Pavley’s bill grants to the State Water Resources Control Board (“SWRCB”) both new regulatory authority over groundwater use and broad discretion to take over management of local groundwater basins.  The goal of SB 1168 is “sustainable groundwater management,” defined in the bill as “the management and use of groundwater in a manner that can be maintained during the planning and implementation horizon without causing undesirable results.” The bill goes on to define such “undesirable results” as: (1) the chronic lowering of groundwater levels, excluding drought; (2) a significant and unreasonable reduction of groundwater storage; (3) significant seawater intrusion; (4) significant and unreasonable degraded water quality; (5) a significant land subsidence that interferes with surface land uses; and, (6) the depletions of interconnected surface water that have adverse impacts on beneficial uses. One can expect years of litigation over these factors. 

The new “sustainable groundwater management” system replaces California’s century-old definition of “safe yield,” defined by our courts as “the maximum quantity of water that can be withdrawn annually from a groundwater basin without causing an undesirable result.” Instead, SB 1168’s new water management scheme, according to the bill, is “to provide multiple benefits without resulting in or aggravating conditions that cause…” certain economic, social, or environmental impacts. This is a broad expansion of existing law. 

Currently, under prevailing court adjudications of groundwater resources, only the rights of property owners are considered. The suddenly changed standard of SB 1168 has as yet completely unknown limits. This will likely cause a great deal of future uncertainty for groundwater users, and could force the re-opening of many existing groundwater management plans. 

Finally, the bill ties together groundwater and surface water in an unprecedented expansion of regulatory authority under the “undesirable result” definition. Specifically, the bill’s new definition of “undesirable result” now explicitly includes certain impacts to surface water that have “adverse impacts on beneficial uses.” That is a broad expansion of current legal interpretations of the connection between groundwater and surface water, providing environmentalists and other interests with a new legal platform to sue groundwater users.  

AB 1739 by Assemblyman Roger Dickenson provides for a host of new regulatory action – and the imposition of new fees – by the SWRCB and local water jurisdictions. For example, it requires a city or county, prior to adoption or revision of a general plan, to review and if necessary, revise, the land use, conservation, open space, or any other element of the general plan to address the adoption of a groundwater sustainability plan or groundwater management plan, or an adjudication of water rights, or an order by the SWRCB to require local agencies to manage groundwater. It also authorizes the SWRCB to adopt emergency regulations for the filing of extraction reports by individual extractors not in a managed basin, to adopt a fee schedule for the costs of planning and implementing groundwater management plans in so-called “probationary basins,” and allows it to issue Cease and Desist Orders to enforce groundwater extraction restrictions or limitations. The board is further authorized to investigate and determine information necessary for any groundwater extraction report, and can significantly fine any user for failure to report.

Local authorities are also given enhanced fee authority under AB 1739. In particular, it authorizes: (1) local agencies to establish fees to recover specified costs, including projects, land acquisition, maintenance, and operations, related to development and implementation of the groundwater management plan; (2) provides for fee collection procedures and penalties for non-payment; (3) authorizes the local agency, following an investigation of groundwater resources, to make a determination fixing the amount of groundwater that can be extracted from groundwater facilities for purposes of levying a groundwater charge; and, (4)  authorizes civil penalties for excess extractions up to $500 per acre-foot of water extracted in excess of the amount authorized and up to $1000 plus $100 each day for violations of rules, regulations, ordinances, or resolutions.

The planning mandates arising out of both bills are quite broad. Initial estimates are that the bills will apply to groundwater basins representing more than 90% of the groundwater pumped in this state. Moreover, that coverage could be expanded even further, for example, by the new authority expressly provided to the Department of Fish and Wildlife in SB 1168 to designate additional basins for the new regulatory requirements “where species and ecosystems are vulnerable to existing or future groundwater conditions.”  

Both measures drew intense criticism. Over fifty diverse organizations, from the California Chamber of Commerce to the Cattlemen’s Association to the Construction and Industrial Materials Association, along with almost all North State and Central Valley agricultural interests most immediately impacted by the comprehensive new regulatory structure formally objected and registered opposition. Environmental and property rights issues were at the fore of the opposition. According to opponents, these bills include multiple provisions that will allow environmental attorneys future opportunities to stake a claim to groundwater rights. These potentially include: (1) requiring groundwater plans to include consideration of “impacts to groundwater dependent ecosystems”; (2) authorizing the Department of Fish and Wildlife to prioritize additional groundwater basins for their environmental values, forcing local property owners and agencies to follow the dictates of Sen. Pavley’s bill; and, (3) the lack of a CEQA exemption for adoption of groundwater plans, which will allow environmental interests to sue local plans.

A significant Constitutional concern also exists about these bills. Specifically, they presume that a local entity – or the SWRCB acting on behalf of the local entity – can use statutory authority to curtail pumping rights on its own, according to its management plan.  The constitutionality of such a provision is unclear at best, and it will certainly lead to extensive litigation.  Access to groundwater has long been held to be a property right in California for an overlying landowner.  While that right is limited (it is “correlative” with other landowners in the same basin, and limited to the “safe yield” of the basin), generally speaking, curtailing a property right requires legal due process not provided for in these bills. That is why the process of adjudication – a court process that determines “safe yield” of a basin and curtails the rights of pumpers accordingly (if necessary) – developed as it did. By removing that protection, an arguable “taking” without just compensation is worked by these bills. 

Mark Twain reportedly said whiskey’s for drinking and water for fighting over. With these two new bills, many more fights over water are in California’s future. 

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