This document discusses water trading and groundwater management in California. It defines water trading as temporary, long-term, or permanent trades of water rights or contracts. Water trading matters for water-limited regions like California as it can reduce drought costs, accommodate demand shifts, and help adapt to climate change. However, water trading requires infrastructure to connect sources and destinations, and protections like preventing unreasonable harm to other users and local economic impacts. California's extensive infrastructure facilitates long-distance water trades. The document also summarizes California's 2014 Sustainable Groundwater Management Act and its requirements for local agencies to attain sustainability goals like balanced water levels and reduced overdrafting through strategies like cooperative recharging programs and water trading within basins.