California Supreme Court Upholds Constitutionality of Water Fees
On January 31, 2011, the California Supreme Court upheld the constitutionality of the State Water Resources Control Board’s water right fee program. California Farm Bureau Federation v. State Water Resources Control Board. By way of background, California’s Water Code was amended in 2003 to require the Board to collect user fees to support the work of its Water Rights Division. The fees are paid by each state permit and license holder, and federal contractors with rights in U.S. Bureau of Reclamation projects. When the Board adopted regulations establishing the fees, various water right holders sued. The plaintiffs argued the fee program was unconstitutional “on its face” because the fee imposed a tax (which under California law requires a two-thirds vote of the Legislature), not a regulatory fee (which requires only a majority vote). The court dismissed the argument, finding instead that the fee program establishes a permissible regulatory fee for the purpose of paying the costs of administering a regulatory program, thus requiring a simple majority vote of the Legislature. The court concluded the water right fee statutes were facially constitutional, and remanded the matter for further consideration of an independent “as applied” challenge.