By Brett Stroud

In September 2026, the California State Water Resources Control Board (State Water Board) will consider adopting a new fee under the Sustainable Groundwater Management Act (SGMA). The fee would apply to Groundwater Sustainability Agencies (GSAs) in probationary groundwater basins that ask the State Water Board to consider whether their updated plan adequately manages their portion of the basin and, therefore, whether their landowners should be exempted from probationary fees.

Background: Probation and Exclusion Requests

Under SGMA, when the State Water Board designates a groundwater basin as “probationary,” all groundwater pumpers in the basin become subject to registration and reporting requirements as well as a volumetric fee on groundwater pumping—intended to fund the cost of the State Water Board’s administration of the probationary basin. In addition, the State Water Board can prepare an interim plan to manage the basin until GSAs establish adequate plans.

However, the State Water Board has the authority to exempt pumpers from these requirements and fees if their extractions “are subject to a local plan or program that adequately manages groundwater within the portion of the basin to which that plan or program applies.” (Wat. Code, § 10735.2, subd. (c)(1).) Some colloquially refer to this as the “good actor” or “good guy” exemption or exclusion. Many GSAs in the two probationary basins have indicated that they believe modifications made to their plans since the probationary hearing justify their receiving this exemption and have requested that the State Water Board reconsider granting those exemptions.

Proposed Fee Structure

The State Water Board staff has proposed that the board impose an application fee for seeking a “good actor” exemption. Several GSAs in the probationary basins have made multiple applications in the past, and State Water Board staff says reviewing those requests is very time-consuming. Therefore, they have proposed a fee that would range from $50,000 to $250,000 for each application, depending on the “groundwater usage tier” of the GSA. The proposal has been discussed at workshops and stakeholder meetings, and it is currently expected to go before the State Water Board for potential adoption on September 15, 2026.

GSA managers in the probationary basins argue that the fee creates the wrong incentives by continuing to penalize landowners in GSAs that are doing the necessary work to manage their portion of the basin. They have also raised questions about the other SGMA fees imposed by the State Water Board and how those funds are being used.

Conclusion and Implications

Joaquin Esquivel, the chairman of the State Water Board, has previously commented at a public meeting that the pursuit of the “good actor” exemption is often a “distraction” from the goal of improving GSPs and getting out of probation. However, as the State Water Board staff prepare interim plans for the probationary basins, many GSAs are likely to want their exemption request considered if they believe that they have made the necessary changes to their plan—even if the other GSAs in the basin have not. If the State Water Board adopts this fee, it will certainly affect the cost-benefit analysis of an application. But it might not actually deter GSAs from applying.

 Editors Note: The author represents clients in both of the current probationary basins, including a GSA in the Tulare Lake Subbasin and a water district in the Tule Subbasin.