CFBF takes action on water rights 'fees'

By Kate Campbell

Merced cattle rancher Horace Kelsey, 86, said his family secured the water rights for their ranch nearly a half century ago. And, until now, he has never been charged for those rights. Essentially, water rights are legal documents stored by the state in the event a question comes up.

With passage of state Senate Bill 1049 last October, however, Kelsey now has to pay $600 a year for the stock ponds on his ranch. SB 1049 took effect on Jan. 1. It amended the state water code to require all persons or governmental entities who hold a permit or a license to appropriate water or who lease water to pay new annual "fees."

Calls about these suddenly imposed state charges have been coming into California Farm Bureau Federation and county Farm Bureau offices around the state. CFBF's board of directors last week reviewed the issues surrounding the imposition of what some legal experts say actually are illegal taxes.

The CFBF board has authorized Farm Bureau to take action to have these illegal fees removed. That effort was officially launched on Monday, with the filing of a Petition for Reconsideration with the state water board. Along with CFBF, all 53 county Farm Bureaus and eight water rights holders who paid the charges under protest are named as co-petitioners.

The fee schedule was created by the State Water Resources Control Board and set so that the total amount of fees collected would equal the amount needed to fully fund the operations of its Division of Water Rights. For the second half of fiscal year 2003-04, that amount is $4.4 million, of which $670,000 goes to cover the state Board of Equalization for billing and collecting the fees.

The state water board's emergency regulations under SB 1049, a trailer (funding) bill, which also calls for greatly increased and new fees for dam safety inspections and fire protection in state responsibility areas, set the fees on water rights holders or licensees at the greater of $100 or three cents per acre-foot of water per year. The fee schedule also imposed a $100 five-year registration renewal fee for small, domestic livestock ponds.

On Jan. 8, the state Board of Equalization, on the state water board's behalf, mailed bills to some 13,000 holders of permits or licenses to divert water. Horace Kelsey was one of those who got a bill. He paid the bill last week, but sent the check along with a letter of protest.

"We filed for our water right more than 40 years ago and we've never had a fee like this before," Kelsey said. "We've got small stock ponds in various locations. My father put up most of the dams and I put up the rest. The ponds water our cattle and also serve the ducks, mud hens and geese that migrate through. They give the birds a place to rest and feed.

"This new fee is unnecessary and expensive and it's just another cost on top of everything else we have to pay. They say I have to pay $100 apiece on six ponds. On top of that, they say now I have to pay a fee for one dam of $502 a year. The dam inspection fees used to be a whole lot less. And, they've added another $100 fee for the lake the dam is holding back.

"It seems to me they need to control their expenses up there in Sacramento and not expect to put this on the farmers. Livestock growing isn't very lucrative at best. Everything has gotten higher and now they're adding on all these extra charges. They're just trying to squeeze us out, that's all."

CFBF Associate Counsel Carl Borden said, "The board will undoubtedly deny our petition for reconsideration. We will then file a petition for a writ of mandate with the Sacramento County Superior Court. We believe the fees are, in fact, unlawfully imposed taxes and that the court will agree with us."

Before the state water board adopted the so-called "fee" schedule, Farm Bureau and other organizations strenuously objected, pointing out that the law requires a relationship between fees charged and benefits received by those who foot the bill.

Article XIII-A of the California Constitution, which was added by Proposition 13, requires legislation resulting in new or increased taxes be approved by a two-thirds vote of each house of the Legislature. As that requirement was not met, the resulting exactions are invalid, Borden said.

ýhe Northern California Water Association and Central Valley Project Water Association have already filed suit challenging the new water right fees, pointing out that they're an unconstitutional tax. A Sacramento County Superior Court judge recently approved a stipulation that permits all state water rights holders to file a formal protest of the tax when they send in payment for their water rights fees.

Last week, private property owners joined Shasta County supervisors in calling for a reversal of the water rights fees. The Shasta board of supervisors unanimously agreed to join a lawsuit against the state water board.

The Redding Record Searchlight reports that the county and five of its special districts have been charged $2,559 for their water rights, while the Redding water utility has been billed $3,723. The Bella Vista Water District has to pay nearly $9,000 and the Anderson-Cottonwood Irrigation District has been charged $3,473.

Alfalfa grower Bill DeWitt, who serves on the city of South Gate's planning commission and is a former mayor, said, "The way these fees were imposed is inappropriate. They are not fees, really they're a tax. It's one that not only affects the farm community, but it affects all pumpers throughout California that use state water.

"In the city of South Gate, we only pump about 12,000 acre-feet a year, which is small compared to some of the farming interests," DeWitt said. "If it starts out at three cents now, what's to stop them from making the charge a dollar an acre-foot next year?"

DeWitt said what's at stake is how the new fee/tax was imposed.

"It's the principle of how they did it that's wrong, more than the actual dollars and cents affecting our jurisdiction at this time. If the state is allowed to proceed with what they have done, what's to stop them from increasing the charges in the future? That's the problem as I see it. It affects all municipalities, everyone in the state."

Patricia Pereira, 64, who runs a herd of black angus cattle in Campo Seco, said, "Words cannot express how upset I am about the passage of SB 1049. It's such a burden on rural people and we have had no opportunity to vote on the tax. We all have to be vigilant in protecting our rights. It seems like the state is trying to make up for its losses by charging the rural people of California."

Pereira, who was widowed 12 years ago, said she thinks it's going to take organizations like Farm Bureau and people working together to fight these illegal taxes.

"Water is a very big issue for me," she said. "In Spanish, Campo Seco means dry camp. If I have to pay $100 this year for my water rights and maybe $350 next year, when are these fees going to go down?

"I run my operation all by myself," she said. "It's a hard life, but it's a good life. You have to have a passion for it and I love it. I don't want to be forced out. Anything that happens to threaten my ability to continue I'm very vigilant about. I have a very small pond, but it's the principle."