Navigating the Next Phase of SGMA:
Implications for Tule Subbasin &
Agricultural Real Estate
By Murray Ag Real Estate®
The California State Water Resources Control Board's July 2026 executive meeting regarding the Tule Subbasin created another milestone in California's ongoing implementation of the Sustainable Groundwater Management Act (SGMA). While recent headlines have rightly focused on proposed pumping restrictions near the Friant-Kern Canal, the larger story is about the continued evolution of groundwater management and what it means for the future of agriculture in the southern San Joaquin Valley.
For landowners, growers, lenders, and investors, this is a time to stay informed and engaged. The State has outlined a proposed path forward, but significant opportunities remain for local Groundwater Sustainability Agencies (GSAs) to develop and implement solutions that could keep groundwater management at the local level.
Understanding the Proposal
The State Water Board presented a phased Interim Plan that would initially focus on addressing subsidence impacting the Friant-Kern Canal. The proposal includes:
• A potential pumping moratorium in areas surrounding the Friant-Kern Canal, with limited exceptions for human health and safety.
• An accelerated timeline that could see a draft Interim Plan released in January 2027, notices to pumpers in February, a final draft in March, and possible Board adoption in April 2027.
• A second phase that could introduce additional pumping reductions elsewhere in the subbasin while addressing impacts to domestic wells.
Equally important, the State made clear that an Interim Plan is not inevitable. If the Tule Subbasin's GSAs successfully resolve deficiencies in their Groundwater Sustainability Plans, they may exit probation before an Interim Plan is adopted.
And that distinction matters, as this remains a dynamic process, with local agencies, consultants, irrigation districts, growers, and State staff actively working toward a collaborative solution.
Why the State is Focused on the Tule Subbasin
The State's concern centers on continued land subsidence and its impact on critical public infrastructure. According to the July presentation, the Tule Subbasin has experienced the greatest recorded land subsidence in California since 2015, with approximately 7.7 feet of subsidence measured in portions of the Lower Tule area. The estimated cost to repair damage to the Friant-Kern Canal now approaches $800 million.
Whether stakeholders agree with every aspect of the proposed regulatory response, protecting critical infrastructure has become one of the State's highest priorities.
What this Means for Agricultural Real Estate
Water has always influenced agricultural land values and it is increasingly one of the defining characteristics that separates one property from another.
Periods of regulatory uncertainty naturally create questions throughout the marketplace: Buyers become more selective, lenders conduct additional due diligence and sellers wonder how evolving groundwater policies may influence the long-term value of their properties.
However, uncertainty should not be confused with uniform impact—agricultural real estate has never been a one-size-fits-all market, and that remains true today. The long-term outlook for an individual property depends on numerous factors, including:
Two neighboring ranches can have very different long-term outlooks based on these characteristics, which is why broad headlines rarely tell the complete story.
Beyond the Headlines, Building For the Future
An encouraging message from the State's presentation was its continued emphasis on local groundwater management as the preferred outcome under SGMA. The Board outlined ongoing opportunities for technical collaboration and reiterated that local agencies can regain control by producing an acceptable plan.
While the proposed timeline is certainly more aggressive than many anticipated, it also reinforces the urgency for local agencies to continue working together toward practical, implementable solutions. A few actions you can take right now:
• Have an active dialogue with your GSA and irrigation district representatives.
• Know where you are in your current pumped groundwater relative to historical years.
• If you have been active in recharge efforts, have this information documented and available. A good rule of thumb is to have quantitative data to inform stakeholders.
At Murray Ag Real Estate®, we understand that these discussions extend well beyond real estate. The decisions being made today will affect farming families, agricultural employees, processors, lenders, local businesses, schools, and the rural communities that have long depended on a vibrant agricultural economy.
We also recognize that uncertainty can create hesitation and believe our role is not to speculate on regulatory outcomes or predict the future. Our responsibility is to help clients understand how evolving water policy intersects with agricultural land values, investment decisions, estate planning, and long-term ownership strategies.
The Tule Subbasin remains home to some of California's most productive farmland. While the regulatory landscape continues to evolve, we remain confident and committed to help clients make informed decisions, support local collaboration, and navigate long-term planning with clarity, perspective, and confidence.
