Existing law, the Cemetery and Funeral Act, establishes the Cemetery and Funeral Bureau within the Department of Consumer Affairs and sets forth its powers and duties relating to the licensure and regulation of, among others, cemeteries and cemetery authorities.

This bill, if the County of Marin acquires title to the Mount Tamalpais Mortuary and Cemetery pursuant to specified provisions, would authorize the county to transfer its ownership, care, and management to a California nonprofit organization in good standing or a cemetery authority, as specified. The bill would provide that a successor that acquires ownership of, or assumes responsibility for the care and management of, the Mount Tamalpais Mortuary and Cemetery is not liable for any debts, obligations, taxes, fines, judgments, or recordkeeping failures of a prior owner or cemetery authority arising before the date the successor acquires ownership or assumes responsibility for the Mount Tamalpais Mortuary and Cemetery.

The bill would repeal these provisions on January 1, 2029.

This bill would make legislative findings and declarations as to the necessity of a special statute for the County of Marin.

This bill would also make its provisions operative contingent on the enactment of SB 1312 of the 202526 Regular Session.

Existing law, the Cemetery and Funeral Act, establishes the Cemetery and Funeral Bureau within the Department of Consumer Affairs and sets forth its powers and duties relating to the licensure and regulation of, among others, cemeteries and cemetery authorities.

This bill, if the County of Marin acquires title to the Mount Tamalpais Mortuary and Cemetery pursuant to specified provisions, would authorize the county to transfer its ownership, care, and management to a California nonprofit organization in good standing or a cemetery authority, as specified. The bill would provide that a successor that acquires ownership of, or assumes responsibility for the care and management of, the Mount Tamalpais Mortuary and Cemetery is not liable for any debts, obligations, taxes, fines, judgments, or recordkeeping failures of a prior owner or cemetery authority arising before the date the successor acquires ownership or assumes responsibility for the Mount Tamalpais Mortuary and Cemetery.

The bill would repeal these provisions on January 1, 2029.

This bill would make legislative findings and declarations as to the necessity of a special statute for the County of Marin.

This bill would also make its provisions operative contingent on the enactment of SB 1312 of the 202526 Regular Session.

(1)Existing law, the Sustainable Groundwater Management Act, requires all groundwater basins designated as high- or medium-priority basins by the Department of Water Resources to be managed under a groundwater sustainability plan or coordinated groundwater sustainability plans, except as specified. Existing law defines various terms for purposes of the act.

This bill would add various defined terms for purposes of the act, including the terms managed wetland and small community water system.

(2)Existing law authorizes any local agency or combination of local agencies overlying a groundwater basin to decide to become a groundwater sustainability agency for that basin and imposes specified duties upon that agency or combination of agencies, as provided. Existing law grants a groundwater sustainability agency specified authority and authorizes a groundwater sustainability agency to regulate groundwater extraction using that authority.

This bill would prohibit a groundwater sustainability agency from using that authority regarding the establishment of groundwater extraction allocations for small community water systems serving disadvantaged communities from permitted public water supply wells and to managed wetland extractors, except as specified. The bill would repeal this provision on January 1, 2029.

(3)Existing law requires a groundwater sustainability plan, where appropriate and in collaboration with the appropriate local agencies, to contain certain information, including control of saline water intrusion, wellhead protection areas and recharge areas, a well abandonment and well destruction program, well construction policies, and impacts on groundwater-dependent ecosystems.

This bill would additionally require the information regarding a groundwater sustainability plan to include, among other things, the plans water supply and economic impacts on managed wetlands, managed wetland extractors, and small community water systems serving disadvantaged communities. The bill would repeal this provision on January 1, 2029.

(4)Existing law authorizes a groundwater sustainability agency that adopts a groundwater sustainability plan to impose fees on the extraction of groundwater from the basin to fund costs of groundwater management, as specified.

This bill would prohibit a groundwater sustainability agency from imposing a fee upon a small community water system serving a disadvantaged community or imposing a fee for managed wetland purposes, provided the water use for each user does not increase above what was historically required to support the small community water system or the managed wetland. If a small community water system or a managed wetland extractor increases its extraction of groundwater above what was historically required to support the small community water system or annually flood the managed wetland, the bill would authorize a groundwater sustainability agency to impose a fee for the usage above the historical amount. The bill would repeal this provision on January 1, 2029.

(1)Existing law, the Sustainable Groundwater Management Act, requires all groundwater basins designated as high- or medium-priority basins by the Department of Water Resources to be managed under a groundwater sustainability plan or coordinated groundwater sustainability plans, except as specified. Existing law defines various terms for purposes of the act.

This bill would add various defined terms for purposes of the act, including the terms managed wetland and small community water system.

(2)Existing law authorizes any local agency or combination of local agencies overlying a groundwater basin to decide to become a groundwater sustainability agency for that basin and imposes specified duties upon that agency or combination of agencies, as provided. Existing law grants a groundwater sustainability agency specified authority and authorizes a groundwater sustainability agency to regulate groundwater extraction using that authority.

This bill would prohibit a groundwater sustainability agency from using that authority regarding the establishment of groundwater extraction allocations for small community water systems serving disadvantaged communities from permitted public water supply wells and to managed wetland extractors, except as specified. The bill would repeal this provision on January 1, 2029.

(3)Existing law requires a groundwater sustainability plan, where appropriate and in collaboration with the appropriate local agencies, to contain certain information, including control of saline water intrusion, wellhead protection areas and recharge areas, a well abandonment and well destruction program, well construction policies, and impacts on groundwater-dependent ecosystems.

This bill would additionally require the information regarding a groundwater sustainability plan to include, among other things, the plans water supply and economic impacts on managed wetlands, managed wetland extractors, and small community water systems serving disadvantaged communities. The bill would repeal this provision on January 1, 2029.

(4)Existing law authorizes a groundwater sustainability agency that adopts a groundwater sustainability plan to impose fees on the extraction of groundwater from the basin to fund costs of groundwater management, as specified.

This bill would prohibit a groundwater sustainability agency from imposing a fee upon a small community water system serving a disadvantaged community or imposing a fee for managed wetland purposes, provided the water use for each user does not increase above what was historically required to support the small community water system or the managed wetland. The bill would repeal this provision on January 1, 2029.

Existing law establishes the governing body of a county drainage district as a board of directors of not less than 5 members, as specified.

This bill would make nonsubstantive changes to that provision.

CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 929

Author:(Connolly)

As Amended Ver:August 26, 2026

Majority vote

SUMMARY

Authorizes the County of Marin to transfer the ownership, care, and management of the Mount Tamalpais Mortuary and Cemetery to either a nonprofit organization or another cemetery authority licensed by the Cemetery and Funeral Bureau (Bureau), if the County of Marin acquires title to that cemetery, and provides that any successor who assumes ownership or responsibility of the cemetery shall not be liable for any debts, obligations, taxes, fines, judgments, or recordkeeping failures of a prior owner or cemetery authority, with the exception of burial rights or prepaid burial contracts.

Senate Amendments

1. Strike all the prior contents of the bill.
2. Insert new language providing that if the County of Marin acquires title to the Mount Tamalpais Mortuary and Cemetery, the county may subsequently transfer its ownership, care, and management to either a California nonprofit organization in good standing or a cemetery authority licensed under the Cemetery and Funeral Act.
3. Provide that a successor that acquires ownership of, or assumes responsibility for the care and management of, the Mount Tamalpais Mortuary and Cemetery shall not be liable for any debts, obligations, taxes, fines, judgments, or recordkeeping failures of a prior owner or cemetery authority arising before the date the successor acquires ownership or assumes responsibility for the care and management of the Mount Tamalpais Mortuary and Cemetery.
4. Specify that nothing in the bill relieves the successor of the obligation to honor valid burial rights or prepaid burial contracts.
5. Provide that the above protections shall apply to any transfer regardless of when the County of Marin acquired title to the Mount Tamalpais Mortuary and Cemetery and regardless of whether the transfer to the successor occurs before, on, or after the effective date of the bill.
6. Subject the provisions of the bill to repeal on January 1, 2029.
7. Make the effect of the bill contingent on the enactment of SB 1312 (Richardson).

COMMENTS

Cemetery and Funeral Bureau. The Bureau was established in 1995 when the previously distinct Cemetery Board and Board of Funeral Directors and Embalmers were merged into a consolidated program under the DCA. As a bureau under the DCA, the Bureau is charged with administering and enforcing the Cemetery and Funeral Act. A voluntarily established Advisory Committee, comprised of representatives of both the industry and the public, assists the Bureau in engaging consumers and licensees in its regulatory activities.

The Bureau oversees 14 different professional categories within the so-called ″death care″ industry, with approximately 11,315 licensees currently active with the Bureau. The Bureau′s licensing program includes funeral establishments and directors; embalmers and apprentice embalmers; cremated remains disposers, crematories, crematory managers, and hydrolysis facilities; cemetery managers, brokers, branches, and salespersons; and certain private, nonreligious cemeteries. Beginning in 2027, the Bureau will also license reduction facilities. The Bureau is additionally tasked with the fiduciary responsibility of overseeing more than three billion dollars in funds held and invested by funeral establishments and cemeteries, including endowment care funds and preneed trust funds.

The Bureau plays a vital role in protecting consumers from fraud, negligence, and other misconduct in the course of obtaining cemetery and funeral services, a time when consumers are frequently grieving and vulnerable to dishonest dealings. In its enforcement of the Cemetery and Funeral Act, the Bureau is authorized to inspect any premises in which the business of a funeral establishment, reduction facility, cemetery, or crematory is conducted; where embalming is practiced; or where human remains are stored. The Bureau is then empowered to take disciplinary action against a licensee for violations of the law. The Cemetery and Funeral Act declares that protection of the public shall be the Bureau′s highest priority.

It is important to note that the Bureau′s authority is exclusively over privately-owned cemeteries. Public cemeteries, those owned by religious corporations, and cemeteries established prior to 1939 with under 10 acres who do not collect an endowment care fund, are exempt from Bureau oversight. Of the hundreds, if not thousands, of cemeteries within the state of California, the Bureau only regulates 192 licensed cemeteries operated by private business owners, the majority of which are opened to the public for burials. For those cemeteries that are licensed, the Bureau is entrusted with ensuring that the remains of loved ones are treated with dignity and respect in perpetuity.

Responsibility for Abandoned Cemeteries. Currently, when a private cemetery that has not interred more than 10 human bodies in the preceding five years threatens or endangers the health, safety, comfort, or welfare of the public, statute allows (but does not require) a city or county to declare that cemetery abandoned. The abandoned cemetery is then declared a pioneer memorial park and is maintained by the city or county. This statute, however, only applied to those abandoned cemeteries that never collected endowment care funds—in other words, cemeteries established prior to 1939.

The Act only provides for two options for maintenance by a private cemetery by an entity other than the licensee. One statute authorizes a court to appoint a temporary licensed cemetery manager to manage the property and serve prepaid internments, or the county if there is no appointed temporary manager. The Bureau states that typically when a cemetery is within city limits, a county will not utilize this section and defer to the city (as occurred with Lincoln Memorial Park Cemetery). Statute additionally allows a city or county to perform maintenance within a cemetery when its license has been revoked, suspended, or not renewed. This law only applies to maintenance necessary to protect the health and safety of the public. In other words, while dry weeds creating a fire hazard would be addressed, the law does not provide for cosmetic upkeep to grounds and embellishments, which while not a matter of safety are important for communities whose families are interred in the cemetery.

In the above cases, local governments are not required to take action following the abandonment of a cemetery, but are merely permitted to under certain circumstances. The Bureau has pointed out that when a cemetery is proposed to be created, the local government in which it will be situated has to authorize and zone a parcel of land as cemetery property with approval to intern decedents. Local authorities are responsible for determining whether a piece of property within their communities will be dedicated as cemetery property, and local governments know that there is no guarantee a private cemetery business will remain active forever.

In its 2024 sunset review report, the Bureau suggested that the Legislature consider amending current statute to vest the responsibility of perpetual care with the jurisdiction that authorized the underlying use upon abandonment of a cemetery, contending that local governments—who initially permitted and zoned the private cemetery with full knowledge that they may eventually cease private operations—should ultimately be responsible for the cemetery′s perpetual care. Such a mandate, however, would conceivably create challenges with local governments who argue that a lack of resources would not allow them to successfully assume responsibility for all private cemeteries within their boundaries.

Recognizing that the importance of this issue necessitates a thorough discussion of all potential options, AB 3254 (Berman, Chapter 589, Stats. of 2024) required the Bureau, by July 1, 2027, to convene a workgroup comprised of representatives from the cemetery industry, county government, and other interested stakeholders to discuss options for ensuring continued care, maintenance, and embellishment of abandoned cemeteries, including the possibility of requiring counties to assume responsibility for cemeteries located within their boundaries that become abandoned. The Bureau was required to report on the workgroup′s discussions and recommendations no later than January 1, 2028 in advance of its next sunset review.

Arguing that the increasingly squalid condition of abandoned cemeteries in her district and throughout the state requires urgent action, the author of this bill introduced SB 777 in 2025 to address the issue of abandoned cemeteries. Initial iterations of the bill would have established a new process whereby local governments assume control of abandoned endowment care cemeteries, funded via a new grant program administered by the Bureau with money collected as part of an increase to every fee under the Bureau′s jurisdiction. SB 777 received significant opposition from cemetery stakeholders and representatives of local government, and committee analysis noted that it would be appropriate to allow the Bureau to complete its workgroup discussions and provide its recommendations on an accelerated timeline. SB 777 was subsequently amended to require the workgroup to convene no later than March 1, 2026, and to provide a summary of its discussions and its recommendations to the Legislature by June 2026.

The Bureau′s workgroup held an in-person meeting on January 21, 2026. During this meeting, members ″noted a practical risk of counties assuming the responsibility of maintenance of abandoned cemeteries. If a county invests significant resources to maintain a neglected private cemetery, the property′s value may increase, allowing the private owner to sell and keep the benefit without reimbursing the county. This creates an illogical incentive for property owners to defer maintenance and shifts costs to the public.″ According to the Bureau, the argument was made that ″local governments are neither designed nor resourced to provide ongoing upkeep for privately owned property. Clear statutory direction is needed to avoid unintended fiscal burdens on counties and to ensure private owners remain accountable for maintenance obligations.″

SB 1312 (Richardson) was subsequently introduced this year to implement the recommendations of the Bureau′s workgroup. First, it would formally define an ″abandoned endowment care cemetery″ and establish a mechanism for a city, county, or city and county to declare an endowment care cemetery to be abandoned when specified conditions are met. Once a cemetery has been declared abandoned, SB 1312 would provide that the ownership of the abandoned endowment care cemetery real property may transfer to the county in which the cemetery is located. A city, county, or city and county would be authorized to transfer the care and management of an abandoned endowment care cemetery to a California nonprofit public benefit corporation in good standing to oversee burials, and for the care, maintenance, and embellishment of the cemetery.

Mount Tamalpais Mortuary and Cemetery. Beginning in 2022, the Bureau began taking enforcement actions against the owner of an endowment care cemetery in San Rafael for failing to adequately maintain the property and properly manage its endowment care trust. It was subsequently determined that millions of dollars from the trust had been diverted into inappropriate investments and personal expenses rather than cemetery care and maintenance. In 2025, the Bureau revoked the cemetery′s license and issued cease-and-desist orders to stop conducting cemetery operations. Additionally, the Bureau seized $52 million in endowment care funds that are reserved for the care and maintenance of the four cemeteries under the control of the cemetery owner.

However, while the cemetery owner no longer had a license to operate a cemetery business, they still maintained ownership and possession of the land where the cemetery was located, which remained an active burial site. Meanwhile, the cemetery grounds continued to fall into disrepair, with reports of overgrown vegetation, obscured headstones, gopher damage, deteriorating infrastructure, and a lack of regular maintenance. These poor conditions have caused understandable grief and dismay for the families of those interred at the cemetery, including members of synagogues who had long utilized the cemetery for religious burials.

Because the owner of the cemetery in San Rafael never willingly relinquished their license or title to the cemetery property, the cemetery would not necessarily be considered ″abandoned″ in the traditional sense. However, the failure of the cemetery to maintain a minimum standard of care implicates the same concerns for health and safety as well as the dignity of those interred. Additionally, many individuals pre-purchased plots on the land, desiring to be laid to rest alongside family members. The County of Marin has characterized the current state of the dispute with this cemetery as ″a serious gap in California′s regulatory framework for private cemeteries when ownership fail but operations continue″ and has sought to resolve the situation as part of the broader solution to abandoned cemetery issues.

This bill would provide that if the County of Marin acquires title to the Mount Tamalpais Mortuary and Cemetery pursuant to the authority proposed to be established in SB 1312, the county may subsequently transfer its ownership, care, and management to either a nonprofit entity or another licensee of the Bureau. The successor that acquires ownership or responsibility of the cemetery would be made not liable for any debts, obligations, taxes, fines, judgments, or recordkeeping failures of a prior owner, with the exception of burial rights or prepaid burial contracts. The provisions of this bill would be contingent upon the enactment of SB 1312 and would specifically apply to the County of Marin and the Mount Tamalpais Mortuary and Cemetery

According to the Author

″For years, families in Marin County have been forced to personally maintain the graves of their loved ones in overgrown grounds, damaged, and unsafe conditions due to the mismanagement and neglect at Mt. Tamalpais Cemetery. AB 929 offers a long-term path forward by allowing the County of Marin to transfer this property to a responsible nonprofit or licensed cemetery authority.″

Arguments in Support

The County of Marin writes in support: ″If Marin acquires Mt. Tamalpais pursuant to the process established by SB 1312, AB 929 authorizes the County to subsequently transfer ownership, care, and management of the cemetery to either: a California nonprofit organization in good standing; or a cemetery authority licensed under California′s Cemetery and Funeral Act. This is critical, as it allows the County of Marin to serve as a bridge to responsible ownership, rather than permanently owning a private cemetery. AB 929 also protects a successor from liabilities created by the cemetery′s prior owner – including debts, obligations, taxes, fines, judgments and recordkeeping failures – while expressly requiring the successor to honor valid burial rights and prepaid burial contracts. AB 929 is narrowly tailored to Mt. Tamalpais Cemetery, sunsets January 1, 2029, and only becomes operative if SB 1312 is enacted.″

Arguments in Opposition

There is no opposition on file.

FISCAL COMMENTS

This bill is keyed nonfiscal by the Legislative Counsel.

VOTES:

ASM WATER, PARKS, AND WILDLIFE: 9-3-1

YES: Papan, Alvarez, Ávila Farías, Bennett, Boerner, Caloza, Hart, Celeste Rodriguez, Rogers

NO: Jeff Gonzalez, Macedo, Tangipa

ABS, ABST OR NV: Bains

ASM APPROPRIATIONS: 11-4-0

YES: Wicks, Arambula, Calderon, Caloza, Elhawary, Fong, Mark González, Hart, Pacheco, Pellerin, Solache

NO: Sanchez, Dixon, Ta, Tangipa

ASSEMBLY FLOOR: 45-16-18

YES: Addis, Ahrens, Arambula, Ávila Farías, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Calderon, Caloza, Carrillo, Connolly, Elhawary, Fong, Gabriel, Garcia, Gipson, Mark González, Haney, Harabedian, Hart, Jackson, Kalra, Krell, Lee, Lowenthal, McKinnor, Muratsuchi, Ortega, Papan, Patel, Pellerin, Petrie-Norris, Quirk-Silva, Celeste Rodriguez, Rogers, Schiavo, Schultz, Sharp-Collins, Stefani, Wicks, Wilson, Zbur, Rivas

NO: Alanis, Castillo, Davies, DeMaio, Dixon, Ellis, Gallagher, Jeff Gonzalez, Hadwick, Hoover, Lackey, Macedo, Patterson, Sanchez, Ta, Wallis

ABS, ABST OR NV: Aguiar-Curry, Alvarez, Bains, Bryan, Chen, Flora, Irwin, Nguyen, Pacheco, Ramos, Ransom, Michelle Rodriguez, Blanca Rubio, Solache, Soria, Tangipa, Valencia, Ward

UPDATED

VERSION: August 26, 2026

CONSULTANT: Robert Sumner / B. & P. / (916) 319-3301 FN: 0004512

SENATE COMMITTEE ON

BUSINESS, PROFESSIONS AND ECONOMIC DEVELOPMENT

Senator Dr. Aisha Wahab, Chair

2025 - 2026 Regular

Bill No: Hearing Date: August 26, 2026

Subject:

SUMMARY:

Permits the County of Marin to transfer the ownership of a single, designated, abandoned endowment care cemetery to either a nonprofit entity or another licensee of the Cemetery and Funeral Bureau (Bureau), as specified, and sunsets that authority on January 1, 2029.

NOTE: Senate floor amendments of 8/26/26 create a new bill and this measure has been referred to the Committee pursuant to Senate Rule 29.10 (c) for consideration. The Committee may, by a vote of the majority, either: (1) hold the bill, or (2) return the bill to the Senate floor for consideration of the bill as amended.

Existing law:

1. Establishes the Bureau within the Department of Consumer Affairs (DCA) to administer and enforce the Cemetery and Funeral Act (Act), subject to review by the Legislature as though it were scheduled to be repealed on January 1, 2029. (Business and Professions Code (BPC) § 7602)
2. Establishes the Act, which provides for the licensing and oversight of 14 professional categories within the death care industry. (BPC §§ 7600 et seq.)
3. Permits the Bureau to inspect the premises in which the business of a funeral establishment, reduction facility, cemetery, or crematory is conducted, where embalming is practiced, or where human remains are stored. (BPC § 7607)
   
4. Defines a “cemetery manager” as a person who engages in or conducts those activities involved in, or incidental to, the maintaining, operating, or improving a cemetery licensed under the Act, the interring of human remains, and the care, preservation, and embellishment of cemetery property. (BPC § 7611.4(a))
   
5. Exempts the following from the provisions of the Act:
   
6. A religious corporation, church, religious society or denomination, a corporation sole administering temporalities of any church or religious society or denomination, or any cemetery organized, controlled, and operated by any of them.
   
7. A public cemetery.
   
8. Any private or fraternal burial park not exceeding 10 acres in area, established prior to September 19, 1939; however, those cemeteries are subject to the cemetery brokerage provisions of the Act, and any cemetery is subject to all of the provisions of the Act, if it collects a care, maintenance, or embellishment deposit or sets up a trust for burial purposes, as specified, including funeral services such as mortuary, cremation, or other commodities or services furnished at the time of and in connection with that funeral or cremation. (BPC § 7612.2)
   
9. Authorizes a cemetery authority from time to time to adopt plans for the general care, maintenance, and embellishment of its cemetery, and charge and collect from all subsequent purchasers of plots such reasonable sum as, in the judgment of the cemetery authority, will aggregate a fund, the reasonable income from which will provide care, maintenance and embellishment. (HSC § 8728)
   
10. Requires the endowment care fund to be kept separate and apart from all other cemetery funds, including separate records and books, as specified, and prohibits when selling cemetery property, a commission being paid to a broker or salesman on the amount deposited by the purchaser in the fund. (HSC § 8738.2)

This bill:

1. Authorizes the County of Marin, if it acquires title to the Mount Tamalpais Mortuary and Cemetery, to transfer ownership, care and management to either of the following:
   
   1. A California nonprofit organization in good standing;
      
   2. A cemetery authority licensed under the Cemetery Act.
      
2. Exempts the entity that acquires the Mount Tamalpais Mortuary and Cemetery from liability for any debts, obligations, taxes, fines, judgements, or recordkeeping failures of a prior owner or cemetery authority arising before the date the successor acquires ownership and assumes responsibility for the care and management of the Mount Tamalpais Mortuary and Cemetery; however, this does not absolve the successor from honoring valid burial rights or prepaid burial contracts.
   
3. States that liability exemptions are applicable to any transfer regardless of when the County of Marin acquired title to the Mount Tamalpais Mortuary and Cemetery and regardless of whether the successor transfer occurs before or after the effective implementation date of this bill.
   
4. Sunsets the authority provided in this bill on January 1, 2029.
   
5. Makes the provisions of this bill operative only if SB 1312 (Richardson) is enacted.
   
6. Makes findings and declarations related to the necessity to create a tailored and narrow transfer process for the County of Marin.

FISCAL EFFECT:

Unknown. This bill is not keyed fiscal by Legislative Counsel.

COMMENTS:

1. Purpose. The County of Marin is the sponsor of this bill. According to the Author, “For years, families in Marin County have been forced to personally maintain the graves of their loved ones in overgrown grounds, damaged, and unsafe conditions due to the mismanagement and neglect at Mt. Tamalpais Cemetery. AB 929 offers a long-term path forward by allowing the County of Marin to transfer this property to a responsible nonprofit or licensed cemetery authority.”
2. Background.

Cemetery and Funeral Bureau. The Bureau licenses, regulates, and investigates complaints against California funeral establishments, funeral directors, embalmers, apprentice embalmers, cemetery brokers, cemetery salespersons, cremated remains disposers, crematories, crematory managers, cemetery managers, cemetery brokers and privately-owned cemeteries in the state. The Bureau does not have authority over cemeteries operated by religious organizations, cities, counties, or cemetery districts, the military, or tribal governments. The Bureau has oversight of both the fiduciary and operational activities of its licensing population. With respect to the financial aspect of the industry, the Bureau is responsible for the oversight and regulation of preneed funeral trust funds, cemetery endowment care trust funds, and cemetery special care trust funds.

Cemetery Oversight. When it comes to operating a cemetery, there are typically two licenses involved: 1) the cemetery manager who is the person engaged in the maintenance, operations, and improvements of a licensed cemetery and 2) the cemetery authority, which includes cemetery association, corporation, sole, limited liability company, or other person owning or controlling the cemetery lands or property. The Bureau oversees approximately 19 cemetery authority licensees. When the Bureau revokes a cemetery authority license, its regulatory jurisdiction over that business or individual ends. However, cemeteries are unique in that the Bureau can revoke the license, but the “business” does not end. There is still a piece of land or real estate wherein deceased people are buried that must be maintained. The Bureau’s jurisdiction over a revoked or lapsed cemetery license remains only for approving interments as specified in BPC § 7653.1 and pursuant to Title 16 of the California Code of Regulations § 2332. Current law permits the Bureau to approve interments in cemeteries where the license has lapsed or been revoked. However, the Bureau’s authorization is limited to allowing interments for decedents who have a right of interment through a preneed contract. The endowment care funds associated with that cemetery must remain as trust funds and can only be used for the purpose for which they were intended.

A Bureau-licensed cemetery is any private, non-religious cemetery established after 1939. Any cemetery established after September 7, 1955, is required to be an endowment care cemetery (HSC § 8739.1). An endowment care cemetery is one in which a portion of the purchase price contributes to an endowment care fund. Income generated from the fund provides for the regular care of the cemetery, including routine maintenance such as cutting grass, grave upkeep, caring for trees, maintenance of water supply systems, roads, drainage, etc. The minimum amount to be contributed for the endowment care fund is provided in HSC § 8738. Endowment care funds are collected no later than at completion of the initial sale. The intent of endowment care is to ensure that the maintenance and care of cemetery grounds are continuous to help prevent cemeteries from falling into disrepair. The Bureau has the authority to inspect and audit endowment care funds and cemeteries are required to report annually the status and conditions of such funds (BPC § 7612.6).

Pursuant to current regulations, every cemetery with an endowment care fund must develop cemetery maintenance standards. These standards are to help ensure the property can maintain a condition that helps to prevent the offensive deterioration of a cemetery. Examples of maintenance standards include trimming or mowing grass, removing shrubs and trees, removing or suppressing weeds, providing enough water to keep grass and plants green as seasonably possible in accordance with natural terrain, availability of water, and local or county ordinances regarding water use.

The monies reserved for endowment care are based on the sale from each interment space sold and those deposits are to be added to the principal of the trust. Current law prohibits spending the principal of the endowment care trust fund and instead, the principal is to be invested with the intent to earn income for the cemetery’s long term general care and maintenance. Part of the issue for many cemeteries, especially older cemeteries, is they have limited new interment space to offer, and therefore are no longer able to collect funds for purposes of endowment care. As the cost of maintenance and care for cemeteries and properties in general has increased, invested dollars from many years ago may not be sufficient to keep up with today’s maintenance or repair costs.

As noted by the Bureau in its 2024 Sunset Review Report, “it is the older cemeteries that are struggling with maintenance. Once a cemetery has sold most or all its cemetery spaces, business operating finances decline, and the cemetery authority must rely more on the income from the endowment care fund to maintain the cemetery grounds.” As reported in the Bureau’s 2017 Endowment Care Sufficiency Study, “many licensed cemeteries in California have an underfunded endowment care. As these cemeteries are private businesses, this leads to either the abandonment of the cemetery by cancelling the license, or the Bureau pursuing disciplinary measures that can include revocation.”

Abandoned Endowment Care Cemeteries. Separate but related to the lack of sufficient endowment care funds, is the issue of abandoned private cemeteries. The Bureau’s 2024 staff sunset background paper noted growing concerns regarding abandoned cemeteries and posed the question as to what steps could be taken to ensure that older cemeteries are appropriately and respectfully maintained by another entity after they have been abandoned by a licensee. Currently, when a private cemetery has not interred more than 10 human bodies in the preceding five years or if it threatens or endangers the health, safety, comfort, or welfare of the public, statute allows (but does not require) a city or county to declare that cemetery abandoned.

Pursuant to BPC § 7613.11, 90 days following the cancellation, revocation, or suspension of a cemetery license, the Bureau is required to take title of the endowment care funds and take possession of all the books, records, property, or assets and act as the conservator over the management of the cemetery. The goal is to ensure the cemetery can be maintained for the time being while there is no licensee. The Bureau is to appoint a trustee to manage the funds. However, if the ownership is transferred to another licensee, then the Bureau does not need to intervene.

To help determine a practicable resolution to the vexing challenge of abandoned privately-owned cemeteries, AB 3254 (Berman, Chapter 589, Stats. of 2024) required the Bureau to convene a workgroup by July 1, 2027. The workgroup was to be comprised of representatives from the cemetery industry, county government, and other interested stakeholders to discuss options for ensuring continued care, maintenance, and embellishment of abandoned cemeteries, including the possibility of requiring counties to assume responsibility for cemeteries located within their boundaries that become abandoned. That bill also required the Bureau to report on the workgroup’s discussions and recommendations no later than January 1, 2028, in advance of its next sunset review. Subsequently, SB 777 (Richardson, Chapter 658, Statutes of 2025) required the workgroup to convene sooner, and the Bureau provide a report to the Legislature by March 1, 2026.

To address the current issue that arises when a cemetery property is no longer under the oversight of a Bureau-cemetery licensee, SB 1312 (Richardson of 2026) proposes to establish a process by which a county can take title to an abandoned endowment care cemetery property and subsequently transfer the cemetery property to a nonprofit public benefit corporation for purposes of maintenance and care of the cemetery property. As proposed by SB 1312, a cemetery will be considered abandoned if 1) the license has been canceled, suspended, or revoked by the Bureau and within a year a new licensee has not assumed responsibility, 2) the Bureau has conserved the endowment care fund as authorized under existing law and 3) the cemetery is negatively impacting public safety and welfare.

If a county takes title of the property, the county will be required to honor any outstanding contracts for burial that were sold or executed by the previous cemetery licensee. Upon the transfer of ownership of the abandoned cemetery to a county, SB 1312 proposes to exempt the county that takes title of the property from any debts, obligations, taxes, fines, or judgements of the previous owner. Any outstanding endowment care funds must be transferred to the county and placed in a special county fund which the county may only be expended for the care, maintenance, and embellishment of the abandoned endowment care cemetery.

While a county may choose to take ownership of the property, it may not want to provide the care and maintenance of the cemetery. To that end, SB 1312 would permit a county to transfer responsibility for only the care and maintenance of that cemetery to a California nonprofit public benefit corporation in good standing to oversee the burials, care, maintenance, and embellishment of the cemetery. Under this circumstance, the nonprofit public benefit corporation may seek reimbursement from the Bureau for monies from the endowment care fund for purposes of care, maintenance, and embellishment of the cemetery property. The Bureau is to remain in control of the endowment care funds until such time new licensee is identified or the county resumes management. Under this scenario, the nonprofit is exempt from any liability for the debts, obligations, taxes, fines or judgement of the abandoned cemetery’s previous owner.

This bill also addresses concerns with abandoned endowment care cemeteries, as proposed to be defined in SB 1312. In contrast with SB 1312, instead of a county maintaining ownership of the abandoned cemetery, this bill will permit a county to transfer the ownership to a designated entity. While SB 1312 authorizes the county to transfer the property for care and maintenance (not ownership), this bill will permit the County of Marin to transfer the ownership of a single designated cemetery property, the Mount Tamalpais Mortuary and Cemetery, to either a nonprofit in good standing or another Bureau-licensee. SB 1312 does not provide a pathway for another licensee to take ownership of the property should a licensee be interested. The provisions of this bill are limited to one cemetery property, and the provisions are set to sunset on January 1, 2029. This bill will take effect only if SB 1312 is chaptered into law.

1. Related Legislation. SB 1312 (Richardson of 2026) establishes a process for an endowment care cemetery to be declared abandoned by a county and have its title transferred to the county in which the cemetery is located and permits the county to transfer the care and maintenance of the cemetery to a California nonprofit public benefit corporation, as specified. (Status: This bill will also be heard in this committee on August 26, 2026.)

SB 777 (Richardson, Chapter 658, Statutes of 2025) Revised the timeframe and stakeholder participants for the Bureau to convene a workgroup from July 1, 2027, to March 1, 2026, and provide a report to the Legislature no later than June 1, 2026, instead of January 1, 2028, summarizing the discussions of the workgroup.

SB 344 (Weber-Pierson of 2025) would clarify that, in addition to bridges and docks, cremated or hydrolyzed human remains cannot be scattered from a “dock attached to a shore.” (Status: This bill is pending on the Assembly Inactive File.)

AB 3254 (Berman, Chapter 589, Statutes of 2024) extended the sunset date for the Bureau and required the Bureau to convene a work group of interested stakeholders to make recommendations relating to abandoned cemeteries.

AB 651 (Gipson, Chapter 442, Statutes of 2021) authorizes a county to assume the responsibility of a cemetery, under specified conditions, and authorizes the county to maintain public access to that cemetery; increases the required contribution amounts for an endowment care fund, as specified; requires the Bureau to examine an endowment care fund when it receives a valid complaint of misconduct; and requires the Bureau to conduct a study of endowment care funds by January 1, 2029.

AB 926 (Irwin, Chapter 750, Statutes of 2017) authorizes a cemetery authority to convert its endowment care fund distribution method to a unitrust distribution method, upon application and approval from the Bureau, subject to specific requirements, beginning January 1, 2020.

AB 180 (Bonilla, Chapter 395, 2015) required the bureau to conduct a study to obtain information to determine if the endowment care fund levels of its licensees’ cemeteries are sufficient to cover the cost of future maintenance, as specified, and to report its findings and recommendations to those policy committees by January 1, 2018.

1. Arguments in Support. The Marin County Board of Supervisors writes in support and notes that the bill “is critical, as it allows the County of Marin to serve as a bridge to responsible ownership, rather than permanently owning a private cemetery. AB 929 also protects a successor from liabilities created by the cemetery’s prior owner – including debts, obligations, taxes, fines, judgments and recordkeeping failures – while expressly requiring the successor to honor valid burial rights and prepaid burial contracts. AB 929 is narrowly tailored to Mt. Tamalpais Cemetery, sunsets January 1, 2029, and only becomes operative if SB 1312 is enacted.”
   
2. Policy Issues for Consideration. Current law provides distinct exemptions from the Funeral Act and regulation by the Bureau for the following:

• A religious corporation, church, religious society or denomination, a corporation sole administering temporalities of any church or religious society or denomination, or any cemetery organized, controlled, and operated by any of them;
• A public cemetery; or,
• Any private or fraternal burial park not exceeding 10 acres in area, established prior to September 19, 1939; however, (1) those cemeteries are subject to the cemetery brokerage provisions of the Cemetery Act, and (2) any cemetery is subject to all of the provisions of the Cemetery act if the cemetery collects a care, maintenance, or embellishment deposit or sets up a trust for burial purposes, as specified.

This bill will allow the County of Marin to transfer ownership to a “nonprofit in good standing” but current law does not expressly exempt a nonprofit in good standing from the Funeral Act. As a result of the way this bill is drafted, the nonprofit that receives ownership of the Mount Tamalpais Mortuary and Cemetery may not be exempt from Bureau oversight. In contrast, SB 1312 specifically exempts a “nonprofit public benefit corporation” from being subject to the Funeral Act if the cemetery property is transferred from a county for the care and maintenance of an abandoned endowment care cemetery.

Licensure helps ensure accountability of endowment care funds. Current law prohibits licensees from spending the principal of an endowment care fund. If the conflict between these measures is resolved in the future and the goal is for all types of nonprofits which are transferred responsibility or ownership of a cemetery from a county to be exempt from the Funeral Act, the law should be amended in the future to establish clear standards and strong protections for the expenditure of endowment care funds that are no longer subject to the Bureau’s oversight and regulations.

SUPPORT AND OPPOSITION:

Support:

Marin County Board of Supervisors

Opposition:

None received for the current version of this bill.

-- END --

 THIRD READING  

Bill No: AB 929

Author: Connolly (D)

Amended: 8/26/26 in Senate

Vote: 21

SENATE BUS., PROF. & ECON. DEV. COMMITTEE: 8-1, 8/26/26

AYES: Wahab, Choi, Archuleta, Caballero, Grayson, Menjivar, Smallwood-Cuevas, Strickland

NOES: Niello

NO VOTE RECORDED: Arreguín, Umberg

SUBJECT: Abandoned endowment care cemeteries: County of Marin

SOURCE: The County of Marin

DIGEST:

This bill permits the County of Marin to transfer the ownership of a single, designated, abandoned endowment care cemetery to either a nonprofit entity or another licensee of the Cemetery and Funeral Bureau (Bureau), as specified, and sunsets that authority on January 1, 2029.

Senate floor amendments of 8/26/26 assist Marin County in transferring ownership of the Mount Tamalpais Mortuary and Cemetery.

ANALYSIS:

Existing law:

1. Establishes the Bureau within the Department of Consumer Affairs (DCA) to administer and enforce the Cemetery and Funeral Act (Act), subject to review by the Legislature as though it were scheduled to be repealed on January 1, 2029. (Business and Professions Code (BPC) § 7602)
   
2. Requires the Bureau, to protect consumers, to adopt regulations that establish minimum standards of maintenance for endowment care cemeteries under the jurisdiction of the Bureau. The regulations must consider differences in cemetery size, location, topography, and type of interments, along with the extent to which funds are available from the cemetery’s endowment care funds to perform maintenance. (BPC § 7612.4(a))
   

This bill:

1. Authorizes the County of Marin, if it acquires title to the Mount Tamalpais Mortuary and Cemetery, to transfer ownership, care and management to either a California nonprofit organization in good standing, or a cemetery authority licensed under the Funeral Act
   
2. Exempts the entity that acquires the Mount Tamalpais Mortuary and Cemetery from liability for any debts, obligations, taxes, fines, judgements, or recordkeeping failures of a prior owner or cemetery authority arising before the date the successor acquires ownership and assumes responsibility for the care and management of the Mount Tamalpais Mortuary and Cemetery; however, this does not absolve the successor from honoring valid burial rights or prepaid burial contracts.
   
3. States that liability exemptions are applicable to any transfer regardless of when the County of Marin acquired title to the Mount Tamalpais Mortuary and Cemetery and regardless of whether the successor transfer occurs before or after the effective implementation date of this bill.
   
4. Makes the provisions of this bill operative only if SB 1312 (Richardson) is enacted; makes findings and declarations related to the necessity to create a tailored and narrow transfer process for the County of Marin; and sunsets the authority provided in this bill on January 1, 2029.

Background

Cemetery and Funeral Bureau. A Bureau-licensed cemetery is any private, non-religious cemetery established after 1939. Any cemetery established after September 7, 1955, is required to be an endowment care cemetery (Health & Safety Code (HSC) § 8739.1). An endowment care cemetery is one in which a portion of the purchase price contributes to an endowment care fund. Income generated from the fund provides for the regular care of the cemetery, including routine maintenance such as cutting grass, grave upkeep, caring for trees, maintenance of water supply systems, roads, drainage, etc. The minimum amount to be contributed for the endowment care fund is provided in HSC § 8738. Endowment care funds are collected no later than at completion of the initial sale. The intent of endowment care is to ensure that the maintenance and care of cemetery grounds are continuous to help prevent cemeteries from falling into disrepair. The Bureau has the authority to inspect and audit endowment care funds and cemeteries are required to report annually the status and conditions of such funds (BPC § 7612.6).

Pursuant to current regulations, every cemetery with an endowment care fund must develop cemetery maintenance standards. These standards help ensure the property can maintain a condition that prevents the offensive deterioration of a cemetery. Examples of maintenance standards include trimming or mowing grass, removing shrubs and trees, removing or suppressing weeds, providing enough water to keep grass and plants green as seasonably possible in accordance with natural terrain, availability of water, and local or county ordinances regarding water use.

Abandoned Endowment Care Cemeteries. The Bureau’s 2024 staff sunset background paper noted growing concerns regarding abandoned cemeteries and posed the question as to what steps could be taken to ensure that older cemeteries are appropriately and respectfully maintained by another entity after they have been abandoned by a licensee. Currently, when a private cemetery has not interred more than 10 human bodies in the preceding five years or if it threatens or endangers the health, safety, comfort, or welfare of the public, statute allows (but does not require) a city or county to declare that cemetery abandoned.

Pursuant to BPC § 7613.11, 90 days following the cancellation, revocation, or suspension of a cemetery license, the Bureau is required to take title of the endowment care funds and take possession of all the books, records, property, or assets and act as the conservator over the management of the cemetery. The goal is to ensure the cemetery can be maintained for the time being while there is no licensee. The Bureau is to appoint a trustee to manage the funds. If the ownership is transferred to another licensee, then the Bureau does not need to intervene.

To address the current issue that arises when a cemetery property is no longer under the oversight of a Bureau-cemetery licensee, SB 1312 (Richardson of 2026) proposes to establish a process by which a county can take title to an abandoned endowment care cemetery property and subsequently transfer the cemetery property to a nonprofit public benefit corporation for purposes of maintenance and care of the cemetery property. As proposed by SB 1312, a cemetery will be considered abandoned if 1) the license has been canceled, suspended, or revoked by the Bureau and within a year a new licensee has not assumed responsibility, 2) the Bureau has conserved the endowment care fund as authorized under existing law and 3) the cemetery is negatively impacting public safety and welfare.

If a county takes title of the property, the county will be required to honor any outstanding contracts for burial that were sold or executed by the previous cemetery licensee. Upon the transfer of ownership of the abandoned cemetery to a county, SB 1312 proposes to exempt the county that takes title of the property from any debts, obligations, taxes, fines, or judgements of the previous owner. Any outstanding endowment care funds must be transferred to the county and placed in a special county fund which the county may only be expended for the care, maintenance, and embellishment of the abandoned endowment care cemetery.

While a county may choose to take ownership of the property, it may not want to provide the care and maintenance of the cemetery. To that end, SB 1312 permits a county to transfer responsibility for only the care and maintenance of that cemetery to a California nonprofit public benefit corporation in good standing to oversee the burials, care, maintenance, and embellishment of the cemetery. Under this circumstance, the nonprofit public benefit corporation may seek reimbursement from the Bureau for monies from the endowment care fund for purposes of care, maintenance, and embellishment of the cemetery property. The Bureau is to remain in control of the endowment care funds until such time new licensee is identified or the county resumes management. Under this scenario, the nonprofit is exempt from any liability for the debts, obligations, taxes, fines or judgement of the abandoned cemetery’s previous owner.

This bill also addresses concerns with abandoned endowment care cemeteries, as proposed to be defined in SB 1312. In contrast with SB 1312, instead of a county maintaining ownership of the abandoned cemetery, this bill will permit a county to transfer the ownership to a designated entity. While SB 1312 authorizes the county to transfer the property for care and maintenance (not ownership), this bill will permit the County of Marin to transfer the ownership of a single designated cemetery property, the Mount Tamalpais Mortuary and Cemetery, to either a nonprofit in good standing or another Bureau-licensee. SB 1312 does not provide a pathway for another licensee to take ownership of the property should a licensee be interested. The provisions of this bill are limited to one cemetery property, and the provisions are set to sunset on January 1, 2029. This bill will take effect only if SB 1312 is chaptered into law.

This bill will allow the County of Marin to transfer ownership to a “nonprofit in good standing” but current law does not expressly exempt a nonprofit in good standing from the Funeral Act. As a result of the way this bill is drafted, the nonprofit that receives ownership of the Mount Tamalpais Mortuary and Cemetery may not be exempt from Bureau oversight. In contrast, SB 1312 specifically exempts a “nonprofit public benefit corporation” from being subject to the Funeral Act if the cemetery property is transferred from a county for the care and maintenance of an abandoned endowment care cemetery.

Licensure helps ensure accountability of endowment care funds. Current law prohibits licensees from spending the principal of an endowment care fund. If the conflict between these measures is resolved in the future and the goal is for all types of nonprofits which are transferred responsibility or ownership of a cemetery from a county to be exempt from the Funeral Act, the law should be amended in the future to establish clear standards and strong protections for the expenditure of endowment care funds that are no longer subject to the Bureau’s oversight and regulations.

FISCAL EFFECT: Appropriation: No Fiscal Com.: No Local: No

SUPPORT: (Verified 8/26/26)

Marin County Board of Supervisors

The County of Marin (source)

OPPOSITION: (Verified 8/26/26)

None received

ARGUMENTS IN SUPPORT: Marin County Board of Supervisors notes, “… If Marin acquires Mt. Tamalpais pursuant to the process established by SB 1312, AB 929 authorizes the County to subsequently transfer ownership, care, and management of the cemetery to either:

• a California nonprofit organization in good standing; or

• a cemetery authority licensed under California’s Cemetery and Funeral Act. This is critical, as it allows the County of Marin to serve as a bridge to responsible ownership, rather than permanently owning a private cemetery.”

ASSEMBLY FLOOR: 45-16, 5/29/25

AYES: Addis, Ahrens, Arambula, Ávila Farías, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Calderon, Caloza, Carrillo, Connolly, Elhawary, Fong, Gabriel, Garcia, Gipson, Mark González, Haney, Harabedian, Hart, Jackson, Kalra, Krell, Lee, Lowenthal, McKinnor, Muratsuchi, Ortega, Papan, Patel, Pellerin, Petrie-Norris, Quirk-Silva, Celeste Rodriguez, Rogers, Schiavo, Schultz, Sharp-Collins, Stefani, Wicks, Wilson, Zbur, Rivas

NOES: Alanis, Castillo, Davies, DeMaio, Dixon, Ellis, Gallagher, Jeff Gonzalez, Hadwick, Hoover, Lackey, Macedo, Patterson, Sanchez, Ta, Wallis

NO VOTE RECORDED: Aguiar-Curry, Alvarez, Bains, Bryan, Chen, Flora, Irwin, Nguyen, Pacheco, Ramos, Ransom, Michelle Rodriguez, Blanca Rubio, Solache, Soria, Tangipa, Valencia, Ward

Prepared by: Elissa Silva / B., P. & E.D. / 916-651-4104

8/26/26 19:36:59

**** END ****

 THIRD READING  

Bill No: AB 929

Author: Connolly (D)

Amended: 6/26/25 in Senate

Vote: 21

SENATE NATURAL RES. & WATER COMMITTEE: 4-3, 6/24/25

AYES: Limón, Allen, Laird, Stern

NOES: Seyarto, Grove, Hurtado

SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8

ASSEMBLY FLOOR: 45-16, 5/29/25 - See last page for vote

SUBJECT: Sustainable groundwater management: managed wetlands

SOURCE: Author

DIGEST:

This bill, until January 1, 2029, prohibits groundwater sustainability agencies from exercising certain authority to regulate groundwater extractions for and impose fees on small community water systems serving disadvantaged communities and managed wetland extractors.

ANALYSIS:

Existing law:

1. Provides, under the Sustainable Groundwater Management Act (SGMA), that local agencies must sustainably manage groundwater in high- or medium-priority basins by 2040. Defines sustainable management of groundwater as the avoidance of the following six “undesirable results:” (a) chronic lowering of groundwater levels; (b) reduction of groundwater storage; (c) seawater intrusion; (d) degraded water quality; (e) land subsidence; and (f) depletions of interconnected surface water. (Water Code (WAT.) §§10720 et seq.)
2. Requires critically overdrafted groundwater basins and high- or medium-priority groundwater basins to be managed under a groundwater sustainability plan (GSP) that are developed and implemented by a groundwater sustainability agency (GSA). (WAT. §10720.7)
3. Grants various authorities to GSAs, including the authority to regulate, limit, or suspend pumping from groundwater wells, and to establish groundwater allocations. (WAT. §10726.4)
4. Provides that a GSA may impose fees on groundwater extraction to fund the costs of groundwater management. (WAT. §10730.2)

This bill:

1. Until January 1, 2029, provides that a GSA’s authority to regulate, limit, or suspend extractions from groundwater wells or otherwise establish groundwater extraction allocations does not apply to groundwater allocations from permitted public water supply wells for small community water systems serving disadvantaged communities and does not apply to managed wetland extractors. Prohibits a GSA from imposing a fee on these users as long as their water use does not increase above what was historically required.
   
   1. Authorizes a GSA to regulate usage above the amount historically required to support the small community water system or annually flood the managed wetland.
      
   2. Authorizes a GSA to develop and implement corrective actions, in cooperation with an affected managed wetland extractor, if the GSA reasonably determines that groundwater extractions for managed wetlands are directly causing undesirable results/
      
2. Require GSPs, until January 1, 2029, to also include specified information related to managed wetlands and small community water systems serving disadvantaged communities.
   

Background

SGMA. Passed in 2014, SGMA provides a comprehensive framework to manage groundwater resources in overdrafted groundwater basins. To comply with SGMA, local agencies in overdrafted basins were required to form a GSA and develop GSPs that will lead to sustainable groundwater management over 20 years. SGMA defines sustainable groundwater management as the avoidance of “undesirable results,” as specified. SGMA also intends for GSAs to have flexibility to address conditions unique to their particular basin.

Wetlands in California. Over 90% of the state's wetlands have been drained, mostly for agricultural purposes, and California now only has about 454,000 acres of nonagricultural wetlands. The remaining wetlands are vulnerable to development, roads, farming practices, hydromodification, pollutants, invasive species, climate change, and a host of other potential stressors. California's wetlands have significant environmental and economic value for humans and wildlife. These benefits include water storage, groundwater recharge, pollution control, nutrient cycling, shoreline protection, maintenance of biodiversity, recreation, education, and carbon sequestration.

Small community water systems. Community water systems serve at least 15 service connections used by yearlong residents or regularly serve at least 25 yearlong residents. Eighty-six percent of regulated community water systems in the state are considered “small,” servicing less than 3,300 service connections. There are approximately 2,500 small community water systems in California regulated for drinking water by the State Water Board, serving approximately 8% of the population.

See the Senate Natural Resources and Water Committee analysis for more information.

Comments

Author’s statement. According to the author, “Wetlands are a critical natural resource for our state, and small, rural communities are being hit the hardest by the state’s depleting groundwater resources. These disadvantaged communities usually depend on a single source for their water supply, leaving them vulnerable to drought and affordability challenges. AB 929 brings California closer to protecting safe and clean water accessibility for all California communities and maintaining precious wetland habitat before it permanently disappears.”

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No

SUPPORT: (Verified 9/9/25)

Alianza Coachella Valley
Audubon California
Cactus To Cloud Institute
California Native Plant Society, Alta Peak Chapter
California Waterfowl Association
Clean Water Action
Cleanearth4kids.org
Community Water Center
Delta Waterfowl
Eco San Diego
Environmental Protection Information Center
Friends of Harbors, Beaches and Parks
Friends of the Dunes
Grassland Water District
Leadership Counsel Action
Outward Bound Adventures
Resource Renewal Institute
Santa Clara Valley Bird Alliance
Sierra Club California
The Nature Conservancy
Tulare Basin Wetlands Association

OPPOSITION: (Verified 9/9/25)

Association of California Water Agencies

California Chamber of Commerce

California Farm Bureau Federation

California Groundwater Coalition

California Municipal Utilities Association

Kern County Farm Bureau
Mission Springs Water District

Northern California Water Association
Stockton East Water District
Tri-county Water Authority
Valley Ag Water Coalition
Western Canal Water District

Western Growers Association

ARGUMENTS IN SUPPORT: According to a coalition letter of several environmental groups, including, among others, Delta Waterfowl, The Nature Conservancy, Sierra Club California, and Resource Renewal Institute, “SGMA requires [GSAs] to consider the interests of environmental users and small drinking water systems in [GSPs]. However, several proposed GSPs did not thoroughly identify managed wetlands and small water systems serving disadvantaged communities, or their water needs, and did not analyze impacts from GSA management actions on those users. Moreover, several GSPs propose a one-size-fits-all cap on groundwater allocations, which will cut supplies for small community water systems and managed wetlands at the same rate as agricultural users. This approach will deprive some small communities of access to safe and affordable water and will cause some of the state’s last wetlands to go dry.”

ARGUMENTS IN OPPOSITION: According to the California Chamber of Commerce, Western Growers Association, California Farm Bureau, and California Municipal Utilities Association, “the provisions of this bill that would exempt [small community water systems and managed wetlands] from GSA management would place an even greater burden of achieving sustainability onto other groundwater users and undermine the success of SGMA.” The groups also argue that the carve out of certain users means that not all water users are regulated by SGMA and that certain water users will be prioritized above others.

The Association of California Water Agencies, also on behalf of other water agencies, further argue that the bill would “undermine the ability of [GSAs] to continue making progress toward achieving groundwater sustainability and is inconsistent with the original agreement that allowed [SGMA] to be passed. … The carve-outs proposed by AB 929 break that agreement. By exempting this large class of users from SGMA, AB 929 would prohibit GSAs from exercising their statutorily granted authority regarding groundwater extractions.”

ASSEMBLY FLOOR: 45-16, 5/29/25

AYES: Addis, Ahrens, Arambula, Ávila Farías, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Calderon, Caloza, Carrillo, Connolly, Elhawary, Fong, Gabriel, Garcia, Gipson, Mark González, Haney, Harabedian, Hart, Jackson, Kalra, Krell, Lee, Lowenthal, McKinnor, Muratsuchi, Ortega, Papan, Patel, Pellerin, Petrie-Norris, Quirk-Silva, Celeste Rodriguez, Rogers, Schiavo, Schultz, Sharp-Collins, Stefani, Wicks, Wilson, Zbur, Rivas

NOES: Alanis, Castillo, Davies, DeMaio, Dixon, Ellis, Gallagher, Jeff Gonzalez, Hadwick, Hoover, Lackey, Macedo, Patterson, Sanchez, Ta, Wallis

NO VOTE RECORDED: Aguiar-Curry, Alvarez, Bains, Bryan, Chen, Flora, Irwin, Nguyen, Pacheco, Ramos, Ransom, Michelle Rodriguez, Blanca Rubio, Solache, Soria, Tangipa, Valencia, Ward

Prepared by: Genevieve Wong / N.R. & W. / (916) 651-4116

9/9/25 12:06:45

**** END ****

 THIRD READING  

Bill No: AB 929

Author: Connolly (D)

Amended: 6/26/25 in Senate

Vote: 21

SENATE NATURAL RES. & WATER COMMITTEE: 4-3, 6/24/25

AYES: Limón, Allen, Laird, Stern

NOES: Seyarto, Grove, Hurtado

SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8

ASSEMBLY FLOOR: 45-16, 5/29/25 - See last page for vote

SUBJECT: Sustainable groundwater management: managed wetlands

SOURCE: Author

DIGEST:

This bill, until January 1, 2029, prohibits groundwater sustainability agencies from exercising certain authority to regulate groundwater extractions for and impose fees on small community water systems serving disadvantaged communities and managed wetland extractors.

ANALYSIS:

Existing law:

1. Provides, under the Sustainable Groundwater Management Act (SGMA), that local agencies must sustainably manage groundwater in high- or medium-priority basins by 2040. Defines sustainable management of groundwater as the avoidance of the following six “undesirable results:” (a) chronic lowering of groundwater levels; (b) reduction of groundwater storage; (c) seawater intrusion; (d) degraded water quality; (e) land subsidence; and (f) depletions of interconnected surface water. (Water Code (WAT.) §§10720 et seq.)
2. Requires critically overdrafted groundwater basins and high- or medium-priority groundwater basins to be managed under a groundwater sustainability plan (GSP) that are developed and implemented by a groundwater sustainability agency (GSA). (WAT. §10720.7)
3. Grants various authorities to GSAs, including the authority to regulate, limit, or suspend pumping from groundwater wells, and to establish groundwater allocations. (WAT. §10726.4)
4. Provides that a GSA may impose fees on groundwater extraction to fund the costs of groundwater management. (WAT. §10730.2)

This bill:

1. Until January 1, 2029, provides that a GSA’s authority to regulate, limit, or suspend extractions from groundwater wells or otherwise establish groundwater extraction allocations does not apply to groundwater allocations from permitted public water supply wells for small community water systems serving disadvantaged communities and does not apply to managed wetland extractors. Prohibits a GSA from imposing a fee on these users as long as their water use does not increase above what was historically required.
   
   1. Authorizes a GSA to regulate usage above the amount historically required to support the small community water system or annually flood the managed wetland.
      
   2. Authorizes a GSA to develop and implement corrective actions, in cooperation with an affected managed wetland extractor, if the GSA reasonably determines that groundwater extractions for managed wetlands are directly causing undesirable results/
      
2. Require GSPs, until January 1, 2029, to also include specified information related to managed wetlands and small community water systems serving disadvantaged communities.
   

Background

SGMA. Passed in 2014, SGMA provides a comprehensive framework to manage groundwater resources in overdrafted groundwater basins. To comply with SGMA, local agencies in overdrafted basins were required to form a GSA and develop GSPs that will lead to sustainable groundwater management over 20 years. SGMA defines sustainable groundwater management as the avoidance of “undesirable results,” as specified. SGMA also intends for GSAs to have flexibility to address conditions unique to their particular basin.

Wetlands in California. Over 90% of the state's wetlands have been drained, mostly for agricultural purposes, and California now only has about 454,000 acres of nonagricultural wetlands. The remaining wetlands are vulnerable to development, roads, farming practices, hydromodification, pollutants, invasive species, climate change, and a host of other potential stressors. California's wetlands have significant environmental and economic value for humans and wildlife. These benefits include water storage, groundwater recharge, pollution control, nutrient cycling, shoreline protection, maintenance of biodiversity, recreation, education, and carbon sequestration.

Small community water systems. Community water systems serve at least 15 service connections used by yearlong residents or regularly serve at least 25 yearlong residents. Eighty-six percent of regulated community water systems in the state are considered “small,” servicing less than 3,300 service connections. There are approximately 2,500 small community water systems in California regulated for drinking water by the State Water Board, serving approximately 8% of the population.

See the Senate Natural Resources and Water Committee analysis for more information.

Comments

Author’s statement. According to the author, “Wetlands are a critical natural resource for our state, and small, rural communities are being hit the hardest by the state’s depleting groundwater resources. These disadvantaged communities usually depend on a single source for their water supply, leaving them vulnerable to drought and affordability challenges. AB 929 brings California closer to protecting safe and clean water accessibility for all California communities and maintaining precious wetland habitat before it permanently disappears.”

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No

SUPPORT: (Verified 7/14/25)

Alianza Coachella Valley
Audubon California
Cactus To Cloud Institute
California Native Plant Society, Alta Peak Chapter
California Waterfowl Association
Clean Water Action
Cleanearth4kids.org
Community Water Center
Delta Waterfowl
Eco San Diego
Environmental Protection Information Center
Friends of Harbors, Beaches and Parks
Friends of the Dunes
Grassland Water District
Leadership Counsel Action
Outward Bound Adventures
Resource Renewal Institute
Santa Clara Valley Bird Alliance
Sierra Club California
The Nature Conservancy
Tulare Basin Wetlands Association

OPPOSITION: (Verified 7/14/25)

Association of California Water Agencies

California Chamber of Commerce

California Farm Bureau Federation

California Groundwater Coalition

California Municipal Utilities Association
Mission Springs Water District

Northern California Water Association
Stockton East Water District
Tri-county Water Authority
Valley Ag Water Coalition
Western Canal Water District

Western Growers Association

ARGUMENTS IN SUPPORT: According to a coalition letter of several environmental groups, including, among others, Delta Waterfowl, The Nature Conservancy, Sierra Club California, and Resource Renewal Institute, “SGMA requires [GSAs] to consider the interests of environmental users and small drinking water systems in [GSPs]. However, several proposed GSPs did not thoroughly identify managed wetlands and small water systems serving disadvantaged communities, or their water needs, and did not analyze impacts from GSA management actions on those users. Moreover, several GSPs propose a one-size-fits-all cap on groundwater allocations, which will cut supplies for small community water systems and managed wetlands at the same rate as agricultural users. This approach will deprive some small communities of access to safe and affordable water and will cause some of the state’s last wetlands to go dry.”

ARGUMENTS IN OPPOSITION: According to the California Chamber of Commerce, Western Growers Association, California Farm Bureau, and California Municipal Utilities Association, “the provisions of this bill that would exempt [small community water systems and managed wetlands] from GSA management would place an even greater burden of achieving sustainability onto other groundwater users and undermine the success of SGMA.” The groups also argue that the carve out of certain users means that not all water users are regulated by SGMA and that certain water users will be prioritized above others.

The Association of California Water Agencies, also on behalf of other water agencies, further argue that the bill would “undermine the ability of [GSAs] to continue making progress toward achieving groundwater sustainability and is inconsistent with the original agreement that allowed [SGMA] to be passed. … The carve-outs proposed by AB 929 break that agreement. By exempting this large class of users from SGMA, AB 929 would prohibit GSAs from exercising their statutorily granted authority regarding groundwater extractions.”

ASSEMBLY FLOOR: 45-16, 5/29/25

AYES: Addis, Ahrens, Arambula, Ávila Farías, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Calderon, Caloza, Carrillo, Connolly, Elhawary, Fong, Gabriel, Garcia, Gipson, Mark González, Haney, Harabedian, Hart, Jackson, Kalra, Krell, Lee, Lowenthal, McKinnor, Muratsuchi, Ortega, Papan, Patel, Pellerin, Petrie-Norris, Quirk-Silva, Celeste Rodriguez, Rogers, Schiavo, Schultz, Sharp-Collins, Stefani, Wicks, Wilson, Zbur, Rivas

NOES: Alanis, Castillo, Davies, DeMaio, Dixon, Ellis, Gallagher, Jeff Gonzalez, Hadwick, Hoover, Lackey, Macedo, Patterson, Sanchez, Ta, Wallis

NO VOTE RECORDED: Aguiar-Curry, Alvarez, Bains, Bryan, Chen, Flora, Irwin, Nguyen, Pacheco, Ramos, Ransom, Michelle Rodriguez, Blanca Rubio, Solache, Soria, Tangipa, Valencia, Ward

Prepared by: Genevieve Wong / N.R. & W. / (916) 651-4116

7/15/25 16:23:46

**** END ****

SENATE COMMITTEE ON NATURAL RESOURCES AND WATER

Senator Monique Limón, Chair

2025 - 2026 Regular

Bill No: AB 929 Hearing Date: June 24, 2025

Subject: Sustainable groundwater management: managed wetlands

SUMMARY

This bill, until January 1, 2029, would prohibit groundwater sustainability agencies from exercising certain authority to regulate groundwater extractions for and impose fees on small community water systems serving disadvantaged communities and managed wetland extractors.

BACKGROUND AND EXISTING LAW

Sustainable Groundwater Management Act (SGMA). Passed in 2014, SGMA provides a comprehensive framework to manage groundwater resources in overdrafted groundwater basins (i.e. those basins deemed high- or medium-priority by the Department of Water Resources (DWR)). To comply with SGMA, local agencies in overdrafted basins had to form a groundwater sustainability agency (GSA) by 2017 and develop groundwater sustainability plans (GSPs) by 2020 or 2022 that will lead to sustainable groundwater management over 20 years. SGMA defines sustainable groundwater management as the avoidance of “undesirable results,” as specified. SGMA’s explicit intent is to keep management of groundwater resources at the local level while allowing for state intervention if local agencies are unsuccessful or get off track in meeting their sustainability goals. SGMA also intends for GSAs to have flexibility to address conditions unique to their particular basin and states that it does not alter groundwater rights.

One of the first steps GSAs have had to take is to identify groundwater users and uses in their basins and develop a corresponding groundwater budget. In many instances GSAs have developed, or are still developing, groundwater pumping allocations that apportion an allowable amount of groundwater pumping to groundwater users in the basin that the GSA manages. GSPs vary, but in many cases the groundwater pumping allocation represents the amount of groundwater a user may pump in a given year without incurring fees or penalties. Oftentimes, a user may pump and use more groundwater than their allocation, but the GSA will typically charge a pumper a significant fee per acre-foot (AF) of water pumped in excess of their allocation in order to dissuade groundwater pumpers from exceeding their pumping allocations (in some GSPs, certain groundwater users have received a pumping allocation of zero and typically have to pay fees for every AF of groundwater pumped and used). In some cases, GSAs also permit the trade or sale of groundwater pumping extractions amongst users in their basin. A groundwater pumping allocation does not represent a given landowner’s groundwater rights.

Wetlands in California. A wetland encompasses a wide variety of land types and includes desert playas, washes, and oases, marshes, meadows, bogs, fens, sag ponds, vernal pools, tidal flats, tidal marshes, and even wastewater treatment ponds. Generally, wetlands are lower elevation lands that are covered, either seasonally or permanently, with shallow water. Wetlands occur in all regions of California and in both coastal (brackish or saline water) and inland areas (typically freshwater). Wetlands form where rainfall or water runoff accumulates and where groundwater saturates the topsoil.

Prior to European colonization of the state, around 5 million acres of wetlands supported lush aquatic vegetation and provided habitat for hundreds of species of fish and wildlife as well as food, clothing, protection from predators, and transportation for native people. Over 90% of the state's wetlands have been drained, mostly for agricultural purposes, and California now only has about 454,000 acres of nonagricultural wetlands.^[1] The remaining wetlands are vulnerable to development, roads, farming practices, hydromodification, pollutants, invasive species, climate change, and a host of other potential stressors.^[2]

California's wetlands have significant environmental and economic value for humans and wildlife. These benefits include water storage, groundwater recharge, pollution control, nutrient cycling, shoreline protection, maintenance of biodiversity, recreation, education, and carbon sequestration. While at the time of statehood, wetlands were perceived more negatively and terms such as “swamp” or “mire” were used to describe wetland areas, wetlands have come to be increasingly valued for the many benefits they provide to society.

The Central Valley Joint Venture (CVJV) is a coalition of 20 public and private organizations that work together and with other partners to conserve migratory birds and their habitats in the Central Valley. According to its 2020 Implementation Plan, roughly 220,000 acres of managed wetlands remain in the Central Valley. This number represents less than 5% of the Central Valley’s historic wetlands. The Implementation Plan estimates that wetlands need between 2.5 AF and 7.4 AF per acre of water annually depending on habitat type (5.1 AF for seasonal wetlands, 7.4 AF for semi-permanent wetlands, 2.5 AF for winter flooding of rice fields, and 5 AF for rice growing), time of year, and other factors. A lot of this water demand is met with surface water supplied as required through the federal Central Valley Project Improvement Act (CVPIA). Under CVPIA, refuges are supposed to receive their historical average supplies (“Level 2”) of 422,251 AF annually and incremental (“Level 4”) supplies of an additional 133,264 AF. Level 4 supplies usually go unmet, particularly in dry years. What portion of the remaining wetland need is met by surface water and groundwater supplies is not well-defined.

The CVJV Implementation Plan notes that SGMA implementation is likely to pose challenges for wetland managers, particularly in the southern San Joaquin Valley as these wetlands “rely on groundwater as a source – and for some the only source – of water supply…. Implementation of SGMA in these areas is likely to reduce groundwater availability to a fraction of what is needed to manage wetlands.” Finally, the CVJV Implementation Plan contends that it will be difficult for wetland managers to compete with other users (e.g., agriculture) in the groundwater trading programs that many GSPs are proposing.

AB 2875 (Friedman, Chapter 579, Statutes of 2024) declares it state policy to ensure no net loss and long-term gain in the quantity, quality, and permanence of wetlands acreage and values in California.

Small community water systems. Community water systems serve at least 15 service connections used by yearlong residents or regularly serve at least 25 yearlong residents. Eighty-six percent of regulated community water systems in the state are considered “small,” servicing less than 3,300 service connections. There are approximately 2,500 small community water systems in California regulated for drinking water by the State Water Board, serving approximately 8% of the population.

AB 685 (Eng, Chapter 524, Statutes of 2012) declares it state policy that every human has the right to safe, clean, affordable, and accessible water adequate for human consumption, cooking, and sanitary purposes.

Groundwater Sustainability Assessments. A study by Audubon California, sponsor of the bill, in collaboration with Clean Water Action, found that many GSPs for critically overdrafted basins did not adequately account for the groundwater needs of disadvantaged communities and the environment.^[3] The report includes results from their review of 31 GSPs in 2020 and 64 GSPs in 2022 to evaluate how well drinking water users, disadvantaged communities, the environment, stakeholder involvement, and climate change were addressed in GSPs. The report provides recommendations to DWR on how to protect vulnerable drinking water users and disadvantaged communities as SGMA is being implemented.

Among other things, the report evaluated whether GSPs provided a description of direct and indirect impacts on disadvantaged communities and drinking water users and groundwater dependent ecosystems and instream habitats within interconnected surface waters when defining undesirable results and minimum thresholds for chronic lowering of groundwater levels and degraded water quality. The authors did this by reviewing GSPs, DWR determination letters, and State Water Board comment letters. Their review found that almost all GSPs (except two) failed to consider impacts of their sustainable management criteria on disadvantaged communities and the environment. DWR evaluations and State Water Board comment letters noted similar deficiencies in consideration of beneficial users. These deficiencies were also identified as required corrective actions by DWR in determination letters for incomplete basins.

However, the report found that DWR’s determinations were broad and lacked details for issues relating to disadvantaged communities, drinking water users, and the environment. Without specific guidance to consider these users in future plans, the report concludes that it is unclear whether these issues will be addressed in future GSPs. Finally, the report provides recommendations that include requiring all GSAs to analyze the impacts of sustainable management criteria on disadvantaged communities and the environment as beneficial users of groundwater and certain GSA reporting requirements in annual reports, among others.

Existing law:

1. Provides, under SGMA, that local agencies must sustainably manage groundwater in high- or medium-priority basins by 2040. Defines sustainable management of groundwater as the avoidance of the following six “undesirable results:” (a) chronic lowering of groundwater levels; (b) reduction of groundwater storage; (c) seawater intrusion; (d) degraded water quality; (e) land subsidence; and (f) depletions of interconnected surface water. (Water Code (WAT.) §§10720 et seq.)
2. Requires critically overdrafted groundwater basins to be managed under a GSP by January 31, 2020, and high- or medium-priority groundwater basins to be managed under a GSP by January 31, 2022. (WAT. §10720.7)
3. Requires a GSA to consider the interests of all beneficial uses and users of groundwater in implementing SGMA. (WAT. §10723.2)
4. Grants various authorities to GSAs, including the authority to impose spacing requirements on groundwater wells, to regulate, limit, or suspend pumping from groundwater wells, and to establish groundwater allocations and accounting rules for carrying over or transferring groundwater pumping extractions. (WAT. §10726.4)
5. Requires a GSA in a basin subject to SGMA to develop a GSP that has various components, including a description of the physical setting of the basin, measureable objectives to achieve sustainable management, how groundwater levels and quality will be monitored, and monitoring sites and protocols. (WAT. §10727)
6. Requires GSAs to encourage the involvement of diverse social, cultural, and economic elements of a basin’s population during development and implementation of a GSP. (WAT. §10727.8)
7. Provides that a GSA may impose fees on groundwater extraction to fund the costs of groundwater management. (WAT. §10730.2)
8. Defines “de minimis extractor” as a person who pumps two AF or less of groundwater annually for domestic purposes. (WAT. §10721)
   
9. Defines “small community water system” as a community water system that serves no more than 3,300 service connections or a yearlong population of no more than 10,000 persons. (Health and Safety Code §116275)

PROPOSED LAW

This bill would:

1. Until January 1, 2029, provide that a GSA’s authority to regulate, limit, or suspend extractions from groundwater wells or otherwise establish groundwater extraction allocations does not apply to groundwater allocations from permitted public water supply wells for small community water systems serving disadvantaged communities and does not apply to managed wetland extractors.
   
   1. Authorizes a GSA to regulate usage above the amount historically required to support the small community water system or annually flood the managed wetland and allows the GSA to require the small community water system or managed wetland extractor to demonstrate historic usage.
      
   2. Authorizes a GSA to develop and implement corrective actions, in cooperation with an affected managed wetland extractor, if the GSA reasonably determines that groundwater extractions for managed wetlands are directly causing undesirable results.
      
2. Until January 1, 2029, prohibits a GSA from imposing a fee upon a small community water system serving a disadvantaged community or impose a fee for managed wetland purposes, provided that the water use for each user does not increase above what was historically required.
   
3. Require GSPs, until January 1, 2029 to also include:
   
   1. The plan’s impacts on water supply and economic impacts on managed wetlands and managed wetland extractors and water supply and economic impacts on small community water systems serving disadvantaged communities.
   2. A list of small community water systems that serve disadvantaged communities and extract water from the basin, the estimated population served by each of those systems, and the water consumption of each of those systems.
   3. A list of managed wetlands subject to the plan, the acreage of each of the wetlands, and water consumption of each wetland area.

ARGUMENTS IN SUPPORT

According to the author, “Wetlands are a critical natural resource for our state, and small, rural communities are being hit the hardest by the state’s depleting groundwater resources. These disadvantaged communities usually depend on a single source for their water supply, leaving them vulnerable to drought and affordability challenges. AB 929 brings California closer to protecting safe and clean water accessibility for all California communities and maintaining precious wetland habitat before it permanently disappears.”

According to a coalition letter of several environmental groups, including, among others, Delta Waterfowl, The Nature Conservancy, Sierra Club California, and Resource Renewal Institute, “SGMA requires [GSAs] to consider the interests of environmental users and small drinking water systems in [GSPs]. However, several proposed GSPs did not thoroughly identify managed wetlands and small water systems serving disadvantaged communities, or their water needs, and did not analyze impacts from GSA management actions on those users. Moreover, several GSPs propose a one-size-fits-all cap on groundwater allocations, which will cut supplies for small community water systems and managed wetlands at the same rate as agricultural users. This approach will deprive some small communities of access to safe and affordable water and will cause some of the state’s last wetlands to go dry.”

ARGUMENTS IN OPPOSITION

Writing with an oppose unless amended position, California Chamber of Commerce, Western Growers Association, California Farm Bureau, and California Municipal Utilities Association, argue that “the provisions of this bill that would exempt [small community water systems and managed wetlands] from GSA management would place an even greater burden of achieving sustainability onto other groundwater users and undermine the success of SGMA.” The groups also argue that the carve out of certain users means that not all water users are regulated by SGMA, that certain water users will be prioritized above others, and GSAs may be in violation of Proposition 218 and Proposition 26.

Also writing in opposition, the Association of California Water Agencies, also on behalf of other water agencies, argue that the bill would “undermine the ability of [GSAs] to continue making progress toward achieving groundwater sustainability and is inconsistent with the original agreement that allowed [SGMA] to be passed. … The carve-outs proposed by AB 929 break that agreement. By exempting this large class of users from SGMA, AB 929 would prohibit GSAs from exercising their statutorily granted authority regarding groundwater extractions. … ACWA is unaware of instances were fees or pumping allocations have created an unreasonable burden or interrupted the operations of managed wetlands or small community water systems that serve a disadvantaged community.”

COMMENTS

Take two. Last year this committee heard a similar bill by the same author, AB 828. There are two main differences between this bill and AB 828, as it passed out of this committee:

• AB 828 gave a GSA authority to regulate usage above the average amount extracted annually between 2015 – 2020; this bill authorizes a GSA to regulate usage above what was historically required to support the small community water system or annually flood the managed wetland. According to the author, this change was made because small community water systems and managed wetlands may not have pumped or pumped very little groundwater between 2015-2020 for various reasons, creating an artificially low average.
  

For example, according to the author, some prominent wetland properties in Tulare took advantage of a dry year during the drought to do necessary earthwork, resulting in bypassing groundwater opportunities which would now affect the baseline calculation. Another example is some wells had well outages, maintenance, or replacement which could impact baseline usage calculations. Finally, costs may have played a factor into the amount pumped as public agencies may not have had the funding to operate pumps on wetlands due to declining public fund availability. By using a historical average, it allows for a more accurate depicture of the water needed to support the small community water system or managed wetland.

• AB 828 exempted managed wetlands and small community water systems serving disadvantaged communities from groundwater pumping regulation and fees unless it was in a basin with a GSP that was approved by DWR after January 1, 2025; this bill exempts managed wetlands and small community water systems serving disadvantaged communities until January 1, 2029, unless they go over their historical usage.

Need for bill. Opponents of the bill have questioned whether there is a demonstrated statewide need for the bill as it is unclear if small community water systems serving disadvantaged communities or managed wetlands are not receiving the amount of water needed or if the water systems or managed wetland operators are unable to pay the fees.

According to the author, many GSPs did not thoroughly identify managed wetlands and small water systems, or their water needs; implementation of the GSPs will result in an inequitable impact to those users that could deprive small communities and managed wetlands of water or charge unsustainable fees. Additionally, the study Stakeholder integration predicts better outcomes from groundwater sustainability policy, published by Nature Communications in June 2023, found, among other things, that most wells and ecosystems were not protected and economically vulnerable groups are less integrated and protected.

AB 929 would require GSPs, until January 1, 2029, to include information relating to managed wetlands and small community water systems that serve disadvantaged communities and the plan’s impacts on those users. Because GSPs are required to be reviewed every five years, this information will be included in a GSP’s next update. During this time period, the water allocation for managed wetlands and small community water systems will be based on its historical usage and the users will not be subject to fees unless they go over the historical amount. In a way, this bill would “freeze” these users in place until the GSPs are updated and the state can ensure that a GSP considers the impacts to these users.

Additionally, in response to the issue of whether managed wetland operators are able to pay fees set by GSPs, supporters of the bill argue that private wetlands with publicly purchased permanent easements are not run as for-profit enterprises and the cost of maintaining the wetland exceeds its recreational value. Supporters have also provided examples from managed wetlands operators from Kern County Subbasin and Merced Subbasin who are struggling to pay the fees that are imposed by their governing GSPs. For example, a representative of Flynn Ranch Wetland Easement Property in the Merced Subbasin states, “Not all managed wetlands are dues paying duck clubs. Our 1,200 acres of wetlands is a case in point. We do not lease our property out for hunting and the only income we generate is from some cattle grazing, which barely brings in enough money to cover insurance and property taxes … . Consequently, we have gotten to the point of not turning on our pumps for any length of time due to the high cost of electricity. Adding SMGA fees on top of all these costs will only further assure that we cannot manage our property to benefit wildlife.” According to a representative of Goose Lake Property in Kern County, “inflationary pressures on fuel for habitat maintenance, and insurance, coupled with a decline in hunter success” has caused them to reach “a breaking point where wetland managers are no longer willing to flood and maintain their wetlands.”

Impact on GSP implementation. According to a coalition’s opposition letter, “[o]ver the past three years, there have been approximately 11,000 new domestic wells drilled. There are 9,000 active community supply wells, 3,200 active non-community supply wells, and 2,000 active non-transient non-community supply wells in California” and “GSAs simply cannot sustainably manage their basins if these wells are exempt from SGMA.” However, this bill would not exempt all of these wells; this bill would temporarily exempt small community water systems serving disadvantaged communities. It is unclear how many small community water systems would be subject to this bill. Further, these water systems would be limited to the amount historically needed to support the system; if the community water system goes over that amount, the GSA would be able to regulate the amount and impose fees on the additional usage.

According to information provided by the author, small community water systems and managed wetlands make up a small portion of the water used and land occupied in basins. Managed wetlands were identified in 12 of 21 critically overdrafted basins, 2 of which have significant surface water supplies (Delta Mendota and Merced). Of the critically overdrafted basins with managed wetlands that do not have surface water supplies, AB 929, according to information provided by the author, affects less than 1% of total basin acreage in 9 of 10 overdrafted basins - at most, 1.6% of one basin.

Similarly, opposition argues that if these users are not required to pay fees until 2029, it will substantially impact their ability to raise revenue to fund GSP implementation and achieve groundwater sustainability. According to some opponents, “some GSAs would face over $300,000 in lost fees only due to the small community water system exemption.” However, GSPs all differ in fee structure and it is unclear if this number would also be representative of all GSAs. Additionally, it is unclear if this example represents an annual number, the amount of fees until 2029, or the total amount.

Does AB 929 violate Proposition 218 or Proposition 26? Article XIIID of the California Constitution, which was added by Proposition 218 in 1996, imposes certain substantive and procedural restrictions on taxes, assessments, fees, and charges assessed by any agency upon any parcel of property or upon any person as an incident of property ownership. Among the charges subject to the article are charges “for property-related services.” Thus, Article XIIID prohibits the amount of a charge imposed upon any parcel or person as an incident of property ownership from exceeding the proportional cost of the service attributable to the parcel (Cal. Const. Art. XIIID, §6(b)(3)).

Article III C of the California Constitution was also added by Proposition 218 and amended by Proposition 26 in 2010. Proposition 26 amended Article III C to define the term “tax” as including any levy, charge, or exaction of any kind imposed by a local government. Additionally, Proposition 26 exempted certain charges from being considered taxes, including charges for “a specific benefit conferred or privilege granted” or “a specific government service or product” that is provided “directly to the payor that is not provided to those not charged and which does not exceed the reasonable costs to the local government.”

Opponents of the bill have argued that AB 929, by providing fee exemptions for some users, could violate both Proposition 218 and Proposition 26.

However, according to an Office of Legislative Counsel (OLC) opinion obtained by the author, it is OLC’s opinion that AB 828 (Connolly, 2024), as amended on January 11, 2024, would not subject the groundwater extraction charge to the requirements of Article XIII D and that the bill, on its face, would not subject the groundwater extraction charge to Article XIII C. Although the opinion was written to AB 828, the legal analysis may still be relevant in the context of this bill since the particular language in question is largely the same. The office did note, however, that the implementation of AB 828 could subject to groundwater extraction charge to the requirements of Article XIII C depending on the particular facts. To reach these conclusions, the opinion was guided by the California Supreme Court ruling in City of San Buenaventura v. United Water Conservation District, which analyzed a similar groundwater extraction charge under Proposition 218 and Proposition 26 (see City of San Buenaventura v. United Water Conservation Dist. (2017) 3 Cal.5th 1191).

GSAs may impose fees if extraction exceeds what is historically required. AB 929 provides that a GSA “shall not impose a fee upon a small community water system serving a disadvantaged community or impose a fee for managed wetland purposes, provided the water use for each user does not increase above what was historically required to support the small community water system or the managed wetland” (Section 7 of the bill, proposed WAT §10730.2(e)). This implies, but does not explicitly state, that a GSA may impose fees if the water use goes above what was historically required for the additional amount. The committee may wish to amend the bill to explicitly give GSAs this authority. See Amendment 1.

Veto message of AB 828. In his veto message of AB 828, Governor Newsom wrote,

“While I appreciate the author’s intent to address the needs of small water systems serving these communities, excluding some groundwater extractors from GSAs does not align with the goals of the Sustainable Groundwater Management Act (SGMA) to analyze groundwater basins comprehensively to ensure future long-term sustainability. … I believe we should continue to implement the SGMA framework as is without creating exceptions for certain groundwater extractors.”

The author may wish to continue to work with the Administration to ensure that AB 929 is responsive to any outstanding concerns.

SUGGESTED AMENDMENTS

AMENDMENT 1

Amend Section 10730.2(e) of the Water Code, Section 7 of the bill, to read:

(e) A groundwater sustainability agency shall not impose a fee upon a small community water system serving a disadvantaged community or impose a fee for managed wetland purposes, provided the water use for each user does not increase above what was historically required to support the small community water system or managed wetland. If a small community water system or a managed wetland extractor increases its extraction of groundwater above what was historically required to support the small community water system or annually flood the managed wetland, a groundwater sustainability agency shall have the authority to impose a fee for the usage above that amount.

SUPPORT

Alianza Coachella Valley
Audubon California
Cactustocloud Institute
California Native Plant Society, Alta Peak Chapter
California Waterfowl Association
Clean Water Action
Cleanearth4kids.org
Community Water Center
Delta Waterfowl
Eco San Diego
Environmental Protection Information Center
Friends of Harbors, Beaches and Parks
Friends of the Dunes
Grassland Water District
Leadership Counsel Action
Outward Bound Adventures
Resource Renewal Institute
Santa Clara Valley Bird Alliance
Sierra Club California
Sierra Club of California
The Nature Conservancy
Tulare Basin Wetlands Association

OPPOSITION

Association of California Water Agencies

California Chamber of Commerce (unless amended)

California Farm Bureau Federation (unless amended)

California Groundwater Coalition

California Municipal Utilities Association (unless amended)
Mission Springs Water District

Northern California Water Association (unless amended)
Stockton East Water District
Tri-county Water Authority
Valley Ag Water Coalition
Western Canal Water District

Western Growers Association (unless amended)

-- END --

1. According to the US Fish and Wildlife Service: https://www.fws.gov/sites/default/files/documents/National-Water-Summary-Wetland-Resources-california.pdf ↑

2. See California Wetland Program Plan, 2023-2028: https://www.epa.gov/system/files/documents/2023-07/CA%20WPP_2023_Final_Signed.pdf ↑

3. Arthur, S., N. Atume, J.P. Ortiz-Partida, M.M. Rohde. 2022. Groundwater Sustainability Assessments: A Review of the Department of Water Resources’ Determinations on Groundwater Sustainability Plans in Critically Overdrafted Basins. Groundwater Leadership Forum. https://cleanwater.org/sites/default/files/docs/publications/2022%20California%20-%20NGO-DWR-Determinations-Analysis-2022.pdf ↑

ASSEMBLY THIRD READING

ATR Bill Id:AB 929

Author:(Connolly)

As Amended Ver:May 1, 2025

Majority vote

SUMMARY

Exempts, until January 1, 2029, groundwater use by managed wetlands and small community water systems serving a disadvantaged community (DAC) from a groundwater sustainability agency's (GSA) authority to regulate groundwater pumping and assess fees under the Sustainable Groundwater Management Act (SGMA).

Major Provisions

1. Provides that a GSA's authority to regulate groundwater usage through the establishment of groundwater pumping allocations shall not apply to small community water systems serving DACs with water from permitted public water supply wells or to managed wetland extractors. Provides, however, that a GSA may regulate any groundwater pumping by small community water systems and managed wetland extractors that exceeds their historic pumping levels.
2. Permits a GSA to require that a small community water system or managed wetland extractor demonstrate their historic groundwater usage.
3. Provides that a GSA may exercise its authority to regulate groundwater pumping for a managed wetland if the GSA reasonably determines that groundwater pumping for the managed wetland is directly causing undesirable results. In doing so, the GSA may develop and implement corrective actions in cooperation with the managed wetland extractor.
4. Provides that a GSA shall not impose a fee on groundwater pumping for small community water systems serving DACs or managed wetland purposes unless pumping for either of these purposes exceeds what was historically required to support the small community water system or managed wetland.
5. Sunsets the provisions of this bill on January 1, 2029.

COMMENTS

Passed in 2014, SGMA provides a comprehensive framework to manage groundwater resources in groundwater basins designated as high- or medium-priority by the Department of Water Resources (DWR). To comply with SGMA, local agencies in these basins had to form a GSA by 2017 and develop groundwater sustainability plans (GSPs) by 2020 or 2022 that will lead to sustainable groundwater management over 20 years. SGMA defines sustainable groundwater management as the avoidance of adverse impacts or "undesirable results." SGMA's explicit intent is to keep management of groundwater resources at the local level while allowing for state intervention if local agencies are unsuccessful or get off track in meeting their sustainability goals. SGMA also intends for GSAs to have flexibility to address conditions unique to their particular basin and states that SGMA does not alter groundwater rights.

One of the first steps GSAs have to take is to identify groundwater users and uses in their basins and develop a corresponding groundwater budget ("sustainable yield"). In many instances GSAs have developed, or are still developing, groundwater pumping allocations that permit a specific amount of groundwater pumping to groundwater users in the basin that the GSA manages. GSPs vary, but in many cases the groundwater pumping allocation represents the amount of groundwater a user may pump in a given year without incurring fees or penalties. Oftentimes, a user may pump and use more groundwater than their allocation, but the GSA will typically charge a pumper a significant fee per acre-foot (AF) of water pumped in excess of their allocation in order to dissuade groundwater pumpers from exceeding their pumping allocations (in some GSPs, certain groundwater users have received a pumping allocation of zero and typically have to pay fees for every AF of groundwater pumped and used). GSAs may also permit the trade or sale of groundwater pumping extractions among users in their basin. A groundwater pumping allocation does not determine a given landowner's groundwater rights.

This bill exempts wetland managers from fees and pumping allocations imposed by GSAs for a period of three years. According to the 2020 Central Valley Joint Venture Implementation Plan, roughly 220,000 acres of managed wetlands remain in the Central Valley. This number represents less than 5% of the Central Valley's historic wetlands. The Implementation Plan estimates that wetlands need between 2.5 AF and 7.4 AF per acre annually depending on habitat type (5.1 AF for seasonal wetlands, 7.4 AF for semi-permanent wetlands, 2.5 AF for winter flooding of rice fields, and 5 AF for rice growing), time of year, and other factors. A lot of this water demand is met with surface water supplied through the federal Central Valley Project as required under Central Valley Project Improvement Act (CVPIA). Under CVPIA, refuges are supposed to receive their historical average supplies ("Level 2") of 422,251 AF annually and incremental ("Level 4") supplies of an additional 133,264 AF. Level 4 supplies usually go unmet, particularly in dry years. What portion of the remaining wetland need is met by surface water and groundwater supplies is not well-defined.

A recent analysis finds that the thresholds in current GSPs will lead to the de-watering (defined as when groundwater levels fall below the depth of a groundwater well) of 15% of public supply wells in the Central Valley (Bostic, Mendez-Barrientos, Pauloo, Dobbin, and MacClements, 2023). This bill will apply to some of these public supply wells (those that are used by a small community water system to provide water to DAC) and exempt them from a GSA's authority to regulate groundwater pumping for a period of three years. It is challenging to estimate how much groundwater pumping by small community water systems will be affected by this bill. A typical rule of thumb is that one AF of water is sufficient to meet the needs of two average California households for one year; however, water use varies greatly across regions and between rural and urban settings. If a system serves several hundred (or more) connections and relies exclusively on groundwater, it would represent a not insignificant use of groundwater in a basin's overall groundwater budget.

AB 828 (Connolly) of 2023 was substantially similar to this bill except that the major provisions of AB 828 would not have applied to groundwater basins with a GSP approved by the Department of Water Resources after January 1, 2025 or that are being managed under an interim plan adopted by the State Water Resources Control Board (State Water Board). AB 828 was vetoed by the Governor on September 25, 2024. Part of the veto message stated: "While I appreciate the author's intent to address the needs of small water systems serving these communities, excluding some groundwater extractors from GSAs does not align with the goals of [SGMA] to analyze groundwater basins comprehensively to ensure future long-term sustainability."

According to the Author

"Wetlands are a critical natural resource for our state, and small, rural communities are being hit the hardest by the state's depleting groundwater resources. These [DACs] usually depend on a single source for their water supply, leaving them vulnerable to drought and affordability challenges. [This bill] brings California closer to protecting safe and clean water accessibility for all California communities and maintaining precious wetland habitat before it permanently disappears."

Arguments in Support

Audubon California is the sponsor of this bill and maintains it is necessary because GSAs generally did not do an adequate job of identifying small community water systems and managed wetlands in their GSPs and did not analyze the impacts GSPs will have on these groundwater users. Audubon California argues small community water systems in DACs "are especially vulnerable to drought and over-pumping by neighboring water users" and "are also often faced with affordability challenges to accessing water, which will be aggravated if GSAs can sharply curtail their water allocations and charge high fees to communities just trying to meet their basic water needs." Finally, Audubon California contends managed wetlands are especially important given that California has lost more than 90% of its historic wetlands and notes that "these declines are projected to worsen due to ongoing habitat loss and climate change."

Arguments in Opposition

The California Groundwater Coalition (CGC) opposes this bill and argues that it will limit the ability of GSAs to manage groundwater sustainably and add additional requirements for which GSAs will be unable to recoup costs: "this is information that the GSA may not have and given the exclusion of [small community water systems and managed wetlands] for the GSA's fee structure, this additional cost will fall on the rest of the water users in the basin." In addition, CGC notes that the Governor vetoed AB 828 last year that was very similar to this bill and maintains that "nothing has changed since the veto."

FISCAL COMMENTS

According to the Assembly Appropriations Committee:

1. Cost savings of an unknown amount to the Department of Fish and Wildlife (DFW). Currently, DFW, in its role as a landowner subject to SGMA, is responsible for paying fees to GSAs for any groundwater it extracts and uses to flood the wetlands that it manages within the basin. This bill, by providing that a GSA shall not impose a fee on groundwater use by managed wetlands will result in cost savings to DFW. DFW notes it is difficult to quantify these savings, because SGMA implementation is only recently underway and many GSPs are yet to be finalized. As more GSPs are finalized, DFW anticipates fees to increase.

2) The State Water Board and DWR anticipate minor and absorbable costs as a result of this bill.

VOTES

ASM WATER, PARKS, AND WILDLIFE: 9-3-1

YES: Papan, Alvarez, Ávila Farías, Bennett, Boerner, Caloza, Hart, Celeste Rodriguez, Rogers

NO: Jeff Gonzalez, Macedo, Tangipa

ABS, ABST OR NV: Bains

ASM APPROPRIATIONS: 11-4-0

YES: Wicks, Arambula, Calderon, Caloza, Elhawary, Fong, Mark González, Hart, Pacheco, Pellerin, Solache

NO: Sanchez, Dixon, Ta, Tangipa

UPDATED

VERSION: May 1, 2025

CONSULTANT: Pablo Garza / W., P., & W. / (916) 319-2096 FN: 0000439

Date of Hearing: May 14, 2025

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Buffy Wicks, Chair

ABPCA Bill Id:AB 929

Author:(Connolly) – As Amended Ver:May 1, 2025

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill exempts, until January 1, 2029, groundwater use by managed wetlands and small community water systems serving a disadvantaged community (DAC) from a groundwater sustainability agency’s (GSA) authority to regulate groundwater pumping and assess fees under the Sustainable Groundwater Management Act (SGMA).

Specifically, this bill, among other things:

1. Provides that a GSA’s authority to regulate groundwater usage through the establishment of groundwater extraction allocations shall not apply to a small community water system serving a DAC from a permitted public water supply well or to a managed wetland extractor. Provides, however, that if a small community water system or a managed wetland extractor increases its extraction of groundwater above what was historically required to support the small community water system or annually flood the managed wetland, a GSA has the authority to regulate usage above that amount. Permits a GSA to require that a small community water system or managed wetland extractor demonstrate historic groundwater usage.
2. Provides that a small community water system serving a DAC or managed wetland extractor may receive a groundwater recharge credit established by a GSA.
3. Provides that a GSA may exercise its authority to regulate groundwater pumping for a managed wetland if the GSA reasonably determines that groundwater pumping for the managed wetland is directly causing undesirable results, as specified. In doing so, the GSA may develop and implement corrective actions in cooperation with the managed wetland extractor.
4. Provides that if a person pumps groundwater for both managed wetland and other purposes, the exemptions under this bill apply only to the groundwater pumped for managed wetland purposes.
5. Provides that a GSA shall not impose a fee on groundwater pumping for small community water systems serving DACs or managed wetland purposes unless pumping for either of these purposes exceeds what was historically required to support the small community water system or managed wetland.
6. Requires a groundwater sustainability plan (GSP) to include, where appropriate, specified elements related to managed wetlands, managed wetland extractors, and small community water systems serving DACs.
7. Sunsets the provisions of this bill on January 1, 2029.

FISCAL EFFECT:

1) Cost savings of an unknown amount to the Department of Fish and Wildlife (DFW). Currently, DFW, in its role as a landowner subject to SGMA, is responsible for paying fees to GSAs for any groundwater it extracts and uses to flood the wetlands that it manages within the basin. This bill, by providing that a GSA shall not impose a fee on groundwater use by managed wetlands, as specified, will result in cost savings to the department. DFW notes it is difficult to quantify these savings, because SGMA implementation is only recently underway and many GSPs are yet to be finalized. As more GSPs are finalized, DFW anticipates fees to increase.

2) The State Water Resources Control Board (State Water Board) and the Department of Water Resources (DWR) anticipate minor and absorbable costs as a result of this bill.

COMMENTS:

1) Purpose. According to the author:

Wetlands are a critical natural resource for our state, and small, rural communities are being hit the hardest by the state’s depleting groundwater resources. These [DACs] usually depend on a single source for their water supply, leaving them vulnerable to drought and affordability challenges. [This bill] brings California closer to protecting safe and clean water accessibility for all California communities and maintaining precious wetland habitat before it permanently disappears.

2) Background. Enacted in 2014, SGMA provides a comprehensive framework to manage groundwater resources in overdrafted groundwater basins (those basins deemed high- or medium priority by DWR). To comply with SGMA, a local agency in an overdrafted basin was required to form a GSA by 2017 and develop a GSP by 2020 or 2022 that will lead to sustainable groundwater management over 20 years. SGMA’s explicit intent is to keep management of groundwater resources at the local level while allowing for state intervention if a local agency is unsuccessful or gets off track in meeting its sustainability goals. SGMA also provides a GSA flexibility to address conditions unique to its particular basin and states that SGMA does not alter groundwater rights.

One of the first steps a GSA has to take is to identify groundwater users and uses in its basin and develop a corresponding groundwater budget. In many instances, GSAs have developed, or are still developing, groundwater pumping allocations that apportion an allowable amount of groundwater pumping to groundwater users in the basin that the GSA manages. GSPs vary, but in many cases, the groundwater pumping allocation represents the amount of groundwater a user may pump in a given year without incurring fees or penalties. Oftentimes, a user may pump and use more groundwater than their user’s allocation, but the GSA will typically charge a user a significant fee per acre-feet (AF) of water pumped in excess of their allocation in order to dissuade groundwater pumpers from exceeding their pumping allocations.

GSPs for critically overdrafted basins were submitted to DWR in January 2020 and GSPs for the remaining high- and medium- priority basins were submitted to DWR in January 2022. As of today, 86 groundwater basins are being operated under “adequate” GSPs. Seven basins have GSPs deemed “inadequate” and have been referred to the State Water Board for further corrections or designation as a probationary basin. Of these “inadequate” basins, the State Water Board has designated two as “probationary” and taken steps to manage them on an interim basis. Adequate GSPs for critically overdrafted basins are currently undergoing their first five-year review by DWR as required under SGMA.

This bill prohibits a GSA from imposing a fee on a small community water system serving a DAC or managed wetland purposes, provided the water use for each user does not increase above the extractor’s average annual extraction from 2015 to 2020. As noted earlier, the State Water Board may place a basin in probation if DWR finds that the GSA is failing to sustainably manage its groundwater. As part of the state intervention process, the State Water Board is required to recover its programmatic costs. Most groundwater pumpers in basins subject to state intervention will be required to pay the State Water Board fees. This bill does not impact fees imposed by the State Water Board.

According to supporters of the bill, while SGMA requires a GSA to consider the interests of environmental users and small drinking water systems in its GSP, in practice, many GSAs are falling short of this requirement. Supporters note that several GSPs propose a one-size-fits-all cap on groundwater allocations, which will cut supplies for small community water systems and managed wetlands at the same rates as agricultural users – thereby depriving some small communities access to safe and affordable water and causing some of the state’s last wetlands to go dry. Supporters note that affordability challenges “will be aggravated if GSAs can sharply curtail their water allocations and charge high fees to communities just trying to meet their basic water needs.

Organizations in opposition to the bill argue, among other things, that by exempting certain classes of water users from paying GSA fees and charges, “this bill complicates GSA compliance with constitutional requirements to assess proportionate and fair charges on all beneficiaries of their services, per Propositions 218 and 26.” Opponents argue this means “the remaining water users, such as agricultural uses and municipal uses not covered by the narrow definition of a small community water system and managed wetlands, would face disproportionately higher fees.”

3) Prior Legislation. AB 828 (Connolly), of the 2023-2024 Legislative Session, was substantially similar to this bill except that the major provisions of AB 828 would not have applied to a groundwater basin with a GSP approved by DWR after January 1, 2025, or that is being managed under an interim plan adopted by the State Water Board. AB 828 was vetoed by the Governor, who stated that while he appreciates the author’s intent to address the needs of small water systems serving these communities, “excluding some groundwater extractors from GSAs does not align with the goals of [SGMA] to analyze groundwater basins comprehensively to ensure future long-term sustainability.”

Analysis Prepared by: Nikita Koraddi / APPR. / (916) 319-2081

Date of Hearing: April 29, 2025

ASSEMBLY COMMITTEE ON WATER, PARKS, AND WILDLIFE

Diane Papan, Chair

ABPCA Bill Id:AB 929 (

Author:Connolly) – As Amended Ver:March 24, 2025

SUBJECT: Sustainable groundwater management: managed wetlands

SUMMARY: Exempts groundwater use by managed wetlands and small community water systems serving a disadvantaged community (DAC) from a groundwater sustainability agency’s (GSA) authority to regulate groundwater pumping and assess fees under the Sustainable Groundwater Management Act (SGMA). Specifically, this bill:

1. Provides that a GSA’s authority to regulate groundwater usage through the establishment of groundwater pumping allocations shall not apply to small community water systems serving DACs with water from permitted public water supply wells nor to managed wetland extractors. Provides, however, that a GSA may regulate any groundwater pumping by small community water systems and managed wetland extractors that exceeds their historic pumping levels.
2. Permits a GSA to require that a small community water system or managed wetland extractor demonstrate their historic groundwater usage.
3. Provides that a small community water system serving a DAC or managed wetland extractor may receive a groundwater recharge credit established by a GSA.
4. Provides that a GSA may exercise its authority to regulate groundwater pumping for a managed wetland if the GSA reasonably determines that groundwater pumping for the managed wetland is directly causing undesirable results. In doing so, the GSA may develop and implement corrective actions in cooperation with the managed wetland extractor.
5. Provides that if a person pumps groundwater for both managed wetland and other purposes (e.g., agricultural use), the exemptions under this bill only apply to the groundwater pumped for managed wetland purposes.
6. Provides that a GSA shall not impose a fee on groundwater pumping for small community water systems serving DACs or managed wetland purposes unless pumping for either of these purposes exceeds what was historically required to support the small community water system or managed wetland.
7. Requires a groundwater sustainability plan (GSP) to include, where appropriate, the following additional elements:
   1. Water supply and economic impacts on managed wetlands and managed wetland extractors;
   2. Water supply and economic impacts on small community water systems serving DACs;
   3. A list of small community water systems that serve DACs and pump groundwater in the basin, the estimated population served by each such system, and the water consumption of each such system; and
   4. A list of managed wetlands subject to the GSP, the acreage of each such wetland, and the water consumption of each such wetland.
8. Defines the following terms for the purposes of this bill:
   1. “Disadvantaged community,” consistent with Water Code § 79505.5, as a community with an annual median household income that is less than 80% of the statewide annual median.
   2. “Managed wetland” as the portion of public or private property that is flooded to promote habitat and food production and that is designated or administered as any of the following: a state wildlife area or ecological reserve, a national wildlife refuge, a Central Valley Project Improvement Act (CVPIA) of 1992 wetland habitat area, a conservation easement held by a public agency or nongovernmental conservation organization, or a wildlife habitat contract of no less than 10 years in duration administered by specified agencies;
   3. “Managed wetland extractor” as a person who extracts groundwater for managed wetlands; and
   4. “Small community water system” as a system serving no more than 3,300 connections or a year-long population of no more than 10,000 individuals consistent with Health and Safety Code § 116275.
9. Makes findings and declarations regarding the challenges faced by small community water systems, failure of many GSPs to adequately consider groundwater needs of small community water systems, the value and importance of wetlands, and the significant loss of wetlands.

EXISTING LAW:

1. Provides, under SGMA, that local agencies must sustainably manage groundwater in high- or medium-priority basins by 2040. Defines sustainable management of groundwater as the avoidance of the following six “undesirable results:” (a) chronic lowering of groundwater levels; (b) reduction of groundwater storage; (c) seawater intrusion; (d) degraded water quality; (e) land subsidence; and (f) depletions of interconnected surface water (Water Code § 10720 et seq.).
2. Requires critically overdrafted groundwater basins to be managed under a groundwater sustainability plan (GSP) by January 31, 2020 and high- or medium-priority groundwater basins to be managed under a GSP by January 31, 2022 (Water Code § 10720.7).
3. Requires a GSA to consider the interests of all beneficial uses and users of groundwater in implementing SGMA (Water Code § 10723.2).
4. Grants various authorities to GSAs including the authority to impose spacing requirements on groundwater wells, to regulate, limit, or suspend pumping from groundwater wells, and to establish groundwater allocations and accounting rules for carrying over or transferring groundwater pumping extractions (Water Code § 10726.4).
5. Requires a GSA in a basin subject to SGMA to develop a GSP that has various components including, a description of the physical setting of the basin, measureable objectives to achieve sustainable management, how groundwater levels and quality will be monitored, and monitoring sites and protocols (Water Code § 10727).
6. Requires GSAs to encourage the involvement of diverse social, cultural, and economic elements of a basin’s population during development and implementation of a GSP (Water Code § 10727.8).
7. Provides that a GSA may impose fees on groundwater extraction to fund the costs of groundwater management (Water Code § 10730.2).
8. Defines “de minimis extractor” as a person who pumps two acre-feet (AF) or less of groundwater annually for domestic purposes (Water Code § 10721).
9. Defines “small community water system” as a community water system that serves no more than 3,300 service connections or a yearlong population of no more than 10,000 persons (Health and Safety Code § 116275).

FISCAL EFFECT: Unknown. This bill is keyed fiscal.

COMMENTS:

1. Purpose of this bill. SGMA requires GSAs to identify all groundwater users and uses in their GSPs; however, now that all GSPs have been submitted to DWR for review, it is apparent that the majority of submitted GSPs did not thoroughly identify these users or their groundwater needs. This bill’s intent is to ensure these users can continue to pump the groundwater they need without incurring penalties under SGMA. According to the author, “Wetlands are a critical natural resource for our state, and small, rural communities are being hit the hardest by the state’s depleting groundwater resources. These [DACs] usually depend on a single source for their water supply, leaving them vulnerable to drought and affordability challenges. [This bill] brings California closer to protecting safe and clean water accessibility for all California communities and maintaining precious wetland habitat before it permanently disappears.”
2. Background. Passed in 2014, SGMA provides a comprehensive framework to manage groundwater resources in overdrafted groundwater basins (i.e., those basins deemed high- or medium-priority by DWR). To comply with SGMA, local agencies in overdrafted basins had to form a GSA by 2017 and develop GSPs by 2020 or 2022 that will lead to sustainable groundwater management over 20 years. SGMA defines sustainable groundwater management as the avoidance of “undesirable results” (see #1, above, under Existing Law). SGMA’s explicit intent is to keep management of groundwater resources at the local level while allowing for state intervention if local agencies are unsuccessful or get off track in meeting their sustainability goals. SGMA also intends for GSAs to have flexibility to address conditions unique to their particular basin and states that it does not alter groundwater rights.
   
   One of the first steps GSAs have to take is to identify groundwater users and uses in their basins and develop a corresponding groundwater budget. In many instances GSAs have developed, or are still developing, groundwater pumping allocations that apportion an allowable amount of groundwater pumping to groundwater users in the basin that the GSA manages. GSPs vary, but in many cases the groundwater pumping allocation represents the amount of groundwater a user may pump in a given year without incurring fees or penalties. Oftentimes, a user may pump and use more groundwater than their allocation, but the GSA will typically charge a pumper a significant fee per AF of water pumped in excess of their allocation in order to dissuade groundwater pumpers from exceeding their pumping allocations (in some GSPs, certain groundwater users have received a pumping allocation of zero and typically have to pay fees for every AF of groundwater pumped and used). GSAs may also permit the trade or sale of groundwater pumping extractions amongst users in their basin. A groundwater pumping allocation does not determine a given landowner’s groundwater rights.
   
   GSPs. GSPs for critically over-drafted basins were submitted to DWR in January 2020 and GSPs for the remaining high- and medium- priority basins were submitted to DWR in January 2022. As of today, 86 groundwater basins are being operated under “adequate” GSPs. Seven basins have GSPs deemed “inadequate” (Tule, Tulare Lake, Kern County, Kaweah, Delta-Mendota, Chowchilla, Pleasant Valley) and have been referred to the State Water Resources Control Board (State Water Board) for further corrections and/or designation as a probationary basin. Of these “inadequate” basins, the State Water Board has designated two as “probationary” (Tule and Tulare Lake) and taken steps to manage them on an interim basis. Adequate GSPs for critically over-drafted basins are currently undergoing their first five-year review by DWR as required under SGMA.
   
   DWR cites various deficiencies in the GSPs for the seven inadequate basins. The majority do not adequately address chronic lowering of groundwater levels and land subsidence; several that involve multiple agencies do not use consistent data or definitions of undesirable results; the Chowchilla GSP does not adequately examine whether there are interconnected surface waters in the basin; and the Tule and Tulare Lake GSPs do not adequately address degraded water quality, among other deficiencies. Generally, these inadequate GSPs do not adequately account for groundwater use by small community water systems serving DACs or managed wetlands, but DWR does not identify these as deficiencies that need to be corrected in the GSPs either.
   
   Central Valley wetlands. According to the 2020 Central Valley Joint Venture (CVJV) Implementation Plan, roughly 220,000 acres of managed wetlands remain in the Central Valley. This number represents less than 5% of the Central Valley’s historic wetlands. The Implementation Plan estimates that wetlands need between 2.5 AF and 7.4 AF per acre annually depending on habitat type (5.1 AF for seasonal wetlands, 7.4 AF for semi-permanent wetlands, 2.5 AF for winter flooding of rice fields, and 5 AF for rice growing), time of year, and other factors. A lot of this water demand is met with surface water supplied through the federal Central Valley Project as required under CVPIA. Under CVPIA, refuges are supposed to receive their historical average supplies (“Level 2”) of 422,251 AF annually and incremental (“Level 4”) supplies of an additional 133,264 AF. Level 4 supplies usually go unmet, particularly in dry years. What portion of the remaining wetland need is met by surface water and groundwater supplies is not well-defined.
   
   The CVJV Implementation Plan does note that SGMA implementation is likely to pose challenges for wetland managers, particularly in the southern San Joaquin Valley as these wetlands “rely on groundwater as a source – and for some the only source – of water supply…. Implementation of SGMA in these areas is likely to reduce groundwater availability to a fraction of what is needed to manage wetlands.” Finally, the CVJV Implementation Plan contends that it will be difficult for wetland managers to compete with other users (e.g., agriculture) in the groundwater trading programs that many GSPs are proposing.

No net loss of wetlands state policy. Governor Wilson issued Executive Order (EO) W-59-93 in 1993 that put in place the "California Wetlands Conservation Policy" that rests on three primary objectives: (a) to ensure no net loss and long-term gain of wetlands acreage and values; (b) to reduce complexity in the administration of state and federal wetlands conservation programs; and (c) to encourage partnerships, landowner incentives, and cooperative planning the basis of wetlands conservation. The EO calls for, among other things, an inventory and accounting system for wetlands, state assistance for local wetland planning efforts, development of a consistent definition of wetlands, development of consistent standards and guidelines concerning wetland mitigation and monitoring of mitigation and restoration efforts, and increased efficiency of wetlands-related permitting processes. AB 2875 (Friedman) codified this policy in 2024 (see “Related legislation,” below).

Small community water systems. A recent analysis finds that the thresholds in current GSPs will lead to the de-watering (defined as when groundwater levels fall below the depth of a groundwater well) of 15% of public supply wells in the Central Valley (the analysis covers 5,300 public supply wells).^[1] This bill will apply to some of these public supply wells (those that are used by a small community water system to provide water to DAC) and exempt them from a GSA’s authority to regulate groundwater pumping. It is challenging to estimate how much groundwater pumping by small community water systems will be affected by this bill. A typical rule of thumb is that one AF of water is sufficient to meet the needs of two average California households for one year; however, water use varies greatly across regions and between rural and urban settings. If a system serves several hundred (or more) connections and relies exclusively on groundwater, it would represent a not insignificant use of groundwater in a basin’s overall groundwater budget.

1. Arguments in support. Audubon California is the sponsor of this bill and maintains it is necessary because GSAs generally did not do an adequate job of identifying small community water systems and managed wetlands in their GSPs and did not analyze the impacts GSPs will have on these groundwater users. Audubon California argues small community water systems in DACs “are especially vulnerable to drought and over-pumping by neighboring water users” and “are also often faced with affordability challenges to accessing water, which will be aggravated if GSAs can sharply curtail their water allocations and charge high fees to communities just trying to meet their basic water needs.” Finally, Audubon California contends managed wetlands are especially important given that California has lost more than 90% of its historic wetlands and notes that “these declines are projected to worsen due to ongoing habitat loss and climate change.”
2. Arguments in opposition. The California Groundwater Coalition (CGC) opposes this bill and argues that it will limit the ability of GSAs to manage groundwater sustainably and add additional requirements for which GSAs will be unable to recoup costs: “this is information that the GSA may not have and given the exclusion of [small community water systems and managed wetlands] for the GSA’s fee structure, this additional cost will fall on the rest of the water users in the basin.” In addition, CGC notes that the Governor vetoed AB 828 last year that was very similar to this bill and maintains that “nothing has changed since the veto.”
3. Proposed committee amendments. Add a three-year sunset date to this bill.
4. Related legislation. AB 828 (Connolly) of 2023 was substantially similar to this bill except that the major provisions of AB 828 would not have applied to groundwater basins with a GSP approved by the Department of Water Resources after January 1, 2025 or that are being managed under an interim plan adopted by the State Water Board. AB 828 was vetoed by the Governor on September 25, 2024. The Governor’s veto message stated:

This bill excludes small community water systems serving [DACs] and managed wetlands from [GSA] extraction limits and fees.

Ensuring safe and reliable drinking water for disadvantaged communities remains a key priority for this Administration. In the last five years, we have distributed more than $1 billion in grants to disadvantaged communities to rectify failing drinking water systems. While I appreciate the author's intent to address the needs of small water systems serving these communities, excluding some groundwater extractors from GSAs does not align with the goals of [SGMA] to analyze groundwater basins comprehensively to ensure future long-term sustainability.

Groundwater accounts for 40 to 60% of our water supplies, and many communities, especially in the Central Valley, are groundwater-dependent. SGMA serves as a critical buffer to protect drinking water supplies against the impacts of drought and climate change. Successful implementation of SGMA is also integral to protecting state infrastructure from the effects of subsidence.

On September 16th, we marked the 10-year anniversary of the enactment of SGMA. While I am proud of all the milestones we have met, and the investments my Administration has made, I also recognize there is still much we need to accomplish. I believe we should continue to implement the SGMA framework as is without creating exceptions for certain groundwater extractors.

AB 2875 (Friedman), Chapter 579, Statutes of 2024, declares it is state policy to ensure no net loss, and long-term gain, in the quantity, quality, and permanence of wetlands acreage.

AB 321 (Mathis), Chapter 67, Statutes of 2017, clarifies the definition of “agricultural users” to include “farmers, ranchers, and dairy professionals” for the purposes of defining the beneficial users of groundwater that a GSA must consider in the implementation of SGMA.

REGISTERED SUPPORT / OPPOSITION:

Support

Audubon California (sponsor)

Alianza Coachella Valley
Alta Peak Chapter, California Native Plant Society
Cactustocloud Institute
California Waterfowl Association
CleanEarth4Kids.org
ECO San Diego
Environmental Protection Information Center
Friends of Harbors, Beaches and Parks
Friends of the Dunes
Grassland Water District
Outward Bound Adventures
Resource Renewal Institute
Santa Clara Valley Bird Alliance
Sierra Club California
The Nature Conservancy

Opposition

California Groundwater Coalition
Mission Springs Water District
Valley Ag Water Coalition

Oppose Unless Amended

California Chamber of Commerce
California Farm Bureau Federation
California Municipal Utilities Association
Western Growers Association

Analysis Prepared by: Pablo Garza / W., P., & W. / (916) 319-2096

1. Darcy Bostic, Linda Mendez-Barrientos, Rich Pauloo, Kristin Dobbin, and Victoria MacClements, “Thousands of Domestic and Public Supply Wells Face Failure Despite Groundwater Sustainability Reform in California’s Central Valley,” Scientific Reports, 13, 14797 (2023). ↑