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Groundwater Pumping Fees Aren't Taxes

By William Vogeler, Esq. on December 12, 2017 | Last updated on March 21, 2019

Groundwater and taxes.

If it were a class in law school, it would be cancelled for lack of interest. Just add a constitutional issue, however, and you get case law worth reading.

In City of San Buenaventura v. United Water Conservation District, the California Supreme Court said water district fees for groundwater conservation are not prohibited taxes under the California Constitution. The decision clears the way for water agencies to charge for conservation services, and gets around voter-approved tax restraints on real property.

The case stems from activities of the United Water Conservation District, which covers about 214,000 acres in Ventura County and water resources from the Santa Clara River. It includes eight groundwater basins.

To replenish diminishing groundwater, which supplies cities, the district diverts water from other sources and charges for pumping it to the area. San Buenaventura sued the district, saying the district's groundwater pumping charges were unconstitutional.

The city claimed the fees violated initiatives that amended the state constitution, limited property taxes and required voter approval. But the Second District Court of Appeal said the district wasn't charging for property-related services.

The Supreme Court agreed, reasoning that the district pumped water to the underground basins -- not to any particular parcel of land. "We therefore conclude that the groundwater charge authorized by Water Code section 75522 is not a charge for a 'property-related service' that falls within the scope of Proposition 218.6," the judges said.

"Reasonable Relationship"

The city also claimed it pays a disproportionate share of the district's charges. The unanimous court remanded the case to the Second District to determine whether the charges were fair and reasonable.

The Associated Press said the decision ensures water districts have money to replenish ground water -- "a key irrigation source for farmers that became even more vital during California's historic drought."

Richard M. Frank, director of the California Environmental Law & Policy Center at the University of California, Davis, said it was a "significant" decision.

"The justices ably worked through the morass of Lilliputian tax principles that California voters have placed in the California Constitution -- and the relevant facts -- to reach a reasoned, fair and practical result," he told Bloomberg News.

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