New water rights 'fee' sparks action

By Kate Campbell

Farmers and ranchers who hold water rights in California have been getting an unpleasant surprise in the mail. The Board of Equalization, on behalf of the State Water Resources Control Board, has sent notices to some 13,000 water rights holders telling them they owe a new fee.

Payments for the new water right fees for fiscal year 2003-2004 are due on Feb. 9.

In some cases these unexpected payment notices are for thousands of dollars, which has triggered calls to the California Farm Bureau Federation and to county Farm Bureau offices around the state.

The annual fee for permitted or licensed water rights is three cents per acre-foot or a minimum of $100. For stockpond registrations, the fee is $100 per pond every five years.

These payment notices have been generated as a result of passage of Senate Bill 1049, a trailer bill enacted in October that also calls for greatly increased and new fees for dam safety inspections and fire protection in state responsibility areas.

The bills for water rights fees were mailed Jan. 8 after the state water board adopted emergency regulations laying out the fee schedule on, among other things, permits or licenses to divert water.

The fee schedule was devised so that the total amount of fees collected will equal the amount necessary to fully fund the operations of the water board's Division of Water Rights. For the second half of fiscal year 2003-2004, that amount is $4.4 million, of which $670,000 is to cover the costs incurred by the Board of Equalization for billing and collecting the fees.

The Northern California Water Association and Central Valley Project Water Association filed suit challenging the new water right fees, pointing out that they're an unconstitutional tax. Last week the Sacramento County Superior Court 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.

CFBF Director of Water Resources Tony Francois warned the state water board in a November letter that the proposed annual water right fees, and in particular the minimum fees proposed for permit or license holders and for stockpond registration renewals, are not regular fees but, in fact, are illegally imposed taxes.

He pointed out that the new, thinly disguised tax on water rights is no different in substance from the state's "ill-fated car tax increase where the pain of the state's budget mismanagement is being transferred to those who are not responsible for it."

Francois told the state water board that Farm Bureau is "cognizant that the board finds itself in a difficult situation, and the state's fiscal affairs are in disarray. Unfortunately, we can only view the Legislature's failure to responsibly fund the division as tantamount to resolving a hostage crisis by shooting the hostages.

"It's not the fault of the state's water users and rights owners that the state's general fund is stretched too thin. The solution to the problem lies within state government.

"Simply handing the burden over to those who didn't cause it in the first place, and without proper legal authority, will not stand," said Francois. "We have no choice in this matter but to take legal action to protect the interests of our members."