CALIFORNIAFARM BUREAU FEDERATION v. CALIFORNIASTATE WATER RESOURCES CONTROL BOARD

Filed 1/17/07

CERTIFIED FOR PUBLICATION

COPY

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

THIRD APPELLATE DISTRICT

(Sacramento)

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     APPEAL from a judgment of the Superior Court of Sacramento County, Cadei, J.  Reversed with directions.

     Gibson, Dunn & Crutcher, David A. Battaglia and Eileen M. Ahern; Nancy N. McDonough, Carl G. Borden, for Plaintiff and Appellant California Farm Bureau Federation.

     Somach, Simmons & Dunn, Stuart L. Somach, Kristen T. Castanos, Robert B. Hoffman and Daniel Kelly, for Plaintiffs and Appellants Northern California Water Association and Central Valley Project Water Association.

     Bill Lockyer, Attorney General, David S. Chaney, Senior Assistant Attorney General, William L. Carter, Supervising Deputy Attorney General, Matthew J. Goldman and Molly K. Mosley, Deputy Attorneys General, for Defendants and Respondents.

     O'Laughlin & Paris, Tim O'Laughlin and William C. Paris for San Joaquin River Group Authority as Amicus Curiae.

     Downey Brand, Kevin M. O'Brien, Jennifer L. Harder and Joseph S. Schofield for Amicus Association of California Water Agencies as Amicus Curiae.

     Jason E. Resnick for Western Growers Association, California Cattlemen's Association, and California Grape and Tree Fruit League as Amici Curiae.

     In this appeal we consider whetherthe State Water Resources Control Board's (SWRCB) imposition of new annualfees on holders of water rightpermits and licenses under Water Code section 1525 and implementing emergency regulations constituted lawful regulatory fees or unlawful taxes adopted in violation of article XIIIA of the California Constitution (Proposition 13).^[1]  Also challenged as unconstitutional are new annualfees imposed on persons and entities that contract for water from the United States Bureau of Reclamation (Bureau) pursuant to Water Code sections 1540 and 1560,^[2] and the emergency regulations.  

     The California Farm Bureau Federation (Farm Bureau), Northern California Water Association (NCWA), Central Valley Project Water Association (CVPWA) and individual fee payers filed this action against the SWRCB for declaratory and injunctive relief, and writ of mandate (Code Civ. Proc., §§  526, 863, 1060, 1085) after the SWRCB denied their requests for reconsideration and refund of annual fees billed in January 2004.  Among other things, plaintiffs seek invalidation of the allegedly unconstitutional statutes, rescission of the emergency regulations, and refund of fees paid. 

     Applying the independent standard of review in our analysis of the constitutionality of the statutes and emergency regulations, we reject plaintiffs' claim that sections 1525, 1540 and 1560 are facially invalid.  We conclude instead that the annual fees are unlawful as applied through the emergency regulations.  Accordingly, we shall reverse the judgment in part, and remand with directions regarding the adoption of new fee schedules and refund of the annual fees unlawfully imposed. 

FACTUAL AND PROCEDURAL BACKGROUND

A.  The Parties

     Plaintiff Farm Bureau alleges the state and county farm bureaus, named as plaintiffs in its complaint, are membership organizations authorized to take judicial action to protect the rights of farm families that hold water rights subject to the fees imposed by Senate Bill No. 1049 and the emergency regulations.  Farm Bureau alleges the individuals named as plaintiffs in its complaint hold water rights and were assessed the challenged fees. 

     Plaintiff NCWA alleges it represents over 70 agricultural water districts within the Sacramento River Basin, some of which hold water rights, some of which receive water under contract with the Bureau of Reclamation, and others that operate hydroelectric plants licensed or regulated by the Federal Energy Regulatory Commission (FERC). 

     The CVPWA alleges it represents â€