The Sustainable Groundwater Management Act (SGMA), which requires local agencies to form Groundwater Sustainability Agencies (GSAs) to adopt Groundwater Sustainability Plans (GSPs) to ensure sustainable groundwater management in all high- and medium-priority groundwater basins, is well into its implementation phase. The deadlines for GSAs to submit GSPs for all high- and medium-priority basins have passed, and the Department of Water Resources continues to issue determinations on submitted GSPs. As GSPs are approved, GSAs have begun to pursue projects to implement their GSPs, primarily comprising groundwater recharge projects. These projects are generally subject to the requirements of the California Environmental Quality Act (CEQA), which mandates environmental review of discretionary public agency actions.

The History of SGMA and CEQA

SGMA expressly exempts the preparation and adoption of GSPs from CEQA. However, it takes great care to avoid exempting projects taken to implement GSPs from environmental review, stating that “nothing in this part shall be interpreted as exempting from [CEQA] a project that would implement actions taken pursuant to a plan adopted pursuant to [SGMA].”

There have been multiple attempts to limit CEQA’s application to such projects since SGMA’s 2014 adoption. For instance, in the 2015-2016 Legislative Session, SB 487 proposed to exempt GSA formation, GSP amendment, and certain projects implementing GSAs from CEQA. The bill proposed exemptions solely for implementation projects that did not involve the construction or installation of new facilities. After SB 487 failed, legislators took a step back. AB 2720, introduced in the 2019-2020 Legislative Session, instead attempted to streamline CEQA review for groundwater recharge projects on agricultural lands that were fallowed as a result of GSP implementation. Like SB 487, AB 2720 was unsuccessful. To date, the Legislature has not adopted a bill addressing CEQA exemptions or streamlining for SGMA implementation projects.

Executive Order N-7-22

In April through October of 2021, Governor Newsom proclaimed a state of emergency due to drought conditions throughout the state. On March 28, 2022, in light of the drought emergency, the Governor issued Executive Order N-7-22 providing additional expansions of authority and related measures to address the drought. This included two points of particular note. First, the Order suspended CEQA for projects and activities for the purpose of water conservation to the extent necessary to address the impacts of the drought, provided that the Secretary of Natural Resources grants a request for the suspension. The Secretary was advised to consider whether such projects are necessary to address impacts of the drought, while at the same time protecting public health and the environment. This suspension could apply to non-recharge actions taken by GSAs to implement their GSPs.

Second, the Order suspended CEQA with respect to groundwater recharge projects to the extent necessary to address drought impacts. This measure far surpasses the exemptions and streamlining contained in failed legislative proposals. GSAs have already begun to rely on this suspension for groundwater recharge projects resulting from GSP implementation, thereby entirely avoiding the requirement for environmental review.

The Order does not have a certain expiration date; instead, its provisions will likely be rescinded when the Governor proclaims that drought conditions have ended.

Moving Forward

SGMA has been regarded as a response to emergency groundwater conditions since its adoption, irrespective of whether a drought emergency has been declared. The Legislature provided that “[e]xcessive groundwater extraction can cause overdraft, failed wells, deteriorated water quality, environmental damage, and irreversible land subsidence that damages infrastructure and diminishes the capacity of aquifers to store water in the future,” and that “[g]roundwater management will not be effective unless local actions to sustainably manage groundwater basins and subbasins are taken.”

Executive Order N-7-22 provides an opportunity to treat the suspension of CEQA for SGMA implementation projects as a “test case,” giving the State an opportunity to observe the types of projects that are implemented and any resulting impacts thereof. Given that the Order will, eventually, expire, this provides a natural occasion for the Legislature to reconsider whether to pursue a statutory exemption for projects implementing SGMA, regardless of whether there is a currently-proclaimed drought emergency. This is consistent with the understanding that SGMA is necessary to prevent emergency conditions associated with groundwater overdraft, as well as precedent for exempting projects taken to address emergency situations from CEQA under CEQA’s governing regulations.

For more information about the intersection of SGMA and CEQA, including the applicability of Executive Order N-7-22 to specific projects, please contact Ellen Moskal at emoskal@somachlaw.com or Kelley Taber at ktaber@somachlaw.com.

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