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Santa Clara court invalidates Groundwater Extraction Fee on the grounds that it violates Proposition 218

Posted by: Aqua Blog Maven on May 22, 2009 at 8:24 am

From Jonathan R. Schutz of Somach, Simmons & Dunn:

On April 23, 2009, the Santa Clara Superior Court ruled that the Santa Clara Valley Water District’s (District) groundwater extraction fee violates the provisions of the California Constitution added by Proposition 218. The fee applied to approximately 4,000 well owners, and the Court’s ruling could require that the District refund up to $250,000,000. The case continues a recent trend of rulings where a local agency’s fee program has been invalidated under Proposition 218.

Background on the Fee and Proposition 218

Proposition 218 intended to limit the methods by which local government can exact revenue from taxpayers. Since it was passed, only the following levies may be imposed on property or persons as a result of property ownership: (1) ad valorem property tax; (2) special taxes; (3) assessments; (4) fees and charges for property-related services. (Cal. Const., art. XIII D, § 3(a).) In this case, fees were at issue. A “fee” or “charge” is “any levy other than an ad valorem tax, special tax, or an assessment, imposed by an agency upon a parcel or upon a person as an incident of property ownership, including a user fee or charge for a property related service.” (Id. at XIII D, § 2(e).) Revenue generated from the fee may not exceed the funds required to provide the service and the amount of a fee imposed upon any parcel may “not exceed the proportional cost of the service attributable to the parcel.” (Id. at §§ 9(a), (b).) A property related fee may only be imposed or increased after a specified voter approval process.

Read more background and analysis from Somach Simmons & Dunn by clicking here.

May 22, 2009 · Filed Under Groundwater

Comments

One Response to “Santa Clara court invalidates Groundwater Extraction Fee on the grounds that it violates Proposition 218”

  1. dfb on May 24th, 2009 1:58 am

    This ruling is likely to go up the chain to the Cal Supreme Court and will ultimately need to be sorted out by the legislature. Great Oaks and other water users are extracting water from an aquifer that has a history of depletion and land subsistence. If the district were not refilling the aquifer, those companies and others who rely on groundwater would deplete the aquifer faster than it can be refilled and it would subside or be invaded with salt water from the bay. In other words, they are pumping ground water that belongs to the district and should pay for it.

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