Groundwater Fees Surge: California Ranchers Face New SGMA Levies as State Steps In

A New Layer of Costs for California’s Ag Producers

California ranchers and rural landowners are facing a new reality under the Sustainable Groundwater Management Act (SGMA)—the state’s landmark groundwater law.

In basins where sustainability plans are not meeting state standards, the California State Water Resources Control Board (SWRCB) has begun enforcing a combination of per-acre fees, base well charges, and volumetric extraction assessments. While some areas are seeing a relatively modest $1.50-per-acre GSA fee, producers in probationary basins can also be subject to $300 per well annually plus $20–$25 per acre-foot extracted, depending on whether pumping is metered.

State Water Board Fee Schedule:

• $300 per well (annual base filing fee)

• $20 per acre-foot if metered, $25 per acre-foot if unmetered

• Additional $15 per acre-foot in probationary basins(SWRCB Fee Schedule)

  
  

Why the State is Stepping In

SGMA, passed in 2014, tasked local Groundwater Sustainability Agencies (GSAs) with crafting and implementing Groundwater Sustainability Plans (GSPs) to bring aquifers into balance by 2040–2042. When local efforts fall short, the State Water Board is required by law to intervene under California Water Code §10735–10737.8.

The California Department of Water Resources (DWR) reviews all local plans and has identified multiple critically overdrafted basins, where declining groundwater levels threaten both agricultural operations and environmental stability (DWR Bulletin 118).

According to SWRCB guidance, the fees “recover costs incurred by the Board for oversight, enforcement, and development of interim plans” in basins failing to meet SGMA requirements. This includes field inspections, water use audits, and installation of flow meters on high-capacity wells.

What This Means for Ranchers

While $1.50 per acre may sound minor, the layered nature of SGMA charges—combining per-acre fees from GSAs with per-well and volumetric fees from the state—can have significant budget impacts. Large-scale ranchers and dairies in areas like the Tulare Lake Subbasin, currently under state probation, could see thousands in added annual costs.

The USDA Economic Research Service notes that increased water regulation and associated fees tend to ripple through the ag economy, affecting both production costs and land values.

Long-Term Implications

For California’s ranchers, these fees are more than a line item—they represent the beginning of more intensive state oversight in water management. The state’s objective is to ensure groundwater use stays within the “safe yield” threshold, but that often requires producers to make operational changes, such as:

• Installing meters on irrigation wells

• Reducing groundwater pumping

• Investing in on-farm water efficiency projects

  
  

DWR emphasizes that without these interventions, some basins could see up to 100 feet of additional groundwater level decline over the next two decades.

Bottom Line

The $1.50-per-acre GSA fee is just the surface cost—when paired with state-imposed SGMA assessments, it signals a fundamental shift in how California manages groundwater. For ranchers, the challenge will be balancing operational viability with the realities of a tightening water budget.

With state agencies committed to aggressive enforcement, and climate pressures adding uncertainty, proactive planning and close coordination with GSAs will be essential for agricultural businesses in the years ahead.