SAN BUENAVENTURA, CITY OF v. UNITED WATER CONSERVATION DISTRICT

Amicus Curiae Brief of Water Replenishment District of Southern California

Cal.November 30, 2015

supreme courTcopy COPY SERVICE ON ATTORNEY GENERAL REQUIRED BY CAL. RULES OF COURT, RULE 8.29(c)(1). 5226036 IN THE SUPREME SUPREME COURT OF CALIFORNIA)” NOV 3 @ 2015 CITY OF SAN BUENAVENTURA, Frank A. McGcure Clerk Plaintiff, Cross-defendant and Avpellant, Deputy v. UNITE D WATER CO NSERV ATION DISTR ICT AND BOA RD OF DiRECTORS OF UNITED WATER CONSERVATIONDISTRICT, Defendants, Cross-coinplainants and Appellants. AFTER A DECISION BY THE COURT OF APPEAL, SECOND APPELLATE DISTRICT, [VISION SIX CASE No. VENCI-00401714 AND 1414739 APPLICATION FOR LEAVE TO FILE AMICUS CURTAE BRIEF IN SUPPORT OF DEFENDANTS; AMICUS CURIAE BRIEF OF WATER REPLENISHMENT DISTRICT OF SOUTHERN CALIFORNIA HORVITZ & LEVY Lup hen DAVID M. AXELRAD(BaR No. 75731) RECE!' © *MITCHELL C. TILNER (Bar No. 93028) eect 15760 VENTURA BOULEVARD, 18TH FLOOR NOV 19 gins ENCINO, CALIFORNIA 91436-3000 (818) 995-0800 » FAX: (818) 995-3157 daxelrad@horvitzlevy.com mtilner@horvitzlevy.com ATTORNEYS FOR AMICUS CURIAE WATER REPLENISHMENTDISTRICT OF SOUTHERNCALIFORNIA TABLE OF CONTENTS Page TABLE OF AUTHORITIES oo... ccccccsecssceessssecsesssscesessnsesensees ill APPLICATION FOR LEAVE TO FILE AMICUS CURIAE BRIEF IN SUPPORT OF DEFENDANTS......0......0cecceeeeeeeeeees 1 AMICUS CURITAE BRIEF oo... ccccccecsecsseeessscesssessseseeeeeseees 6 LEGAL ARGUMENT.cccccseessseessecescsseessseessssccessscssesevneeeaes 6 I. PROPOSITION 218 DOES NOTAPPLYTO CHARGES IT. If. IMPOSED ON THE ACTIVITY OF PUMPING GROUNDWATER0000. ccecccceseesceesessesseeeseeesseecssenssenees A. Article XIII D applies to (1) “a user fee or charge for a property-related service” and (2) any other charge on a parcel or person “as an incident of property ownership.” ............cccceceeesseseccceeeeeeseeeees B. Apump chargeis not “a user fee or charge for a property-related Service.”.........ccccccccccseeeeseeesseeeeees C. Apump chargeis not a charge on a parcel or ona person “as an incident of property ownership.”... D. Article XIII D applies to charges imposed as an incident ofparcel ownership, not as an incident of water rights ownership ............cc.ccccsesssssesssecceeeeeaes EK. Pajaro should be disapproved to the extent it held that article XIII D applies to pump charges PROPOSITION 26 DOES NOT APPLY TO CHARGES IMPOSED ON THE ACTIVITY OF PUMPING GROUNDWATER WHERE, AS HERE, THE CHARGES DO NOT EXCEED THE REASONABLE COSTS OF REGULATING THE ACTIVITY .......0........ IF THE COURT HOLDS THAT THE DISTRICT'S PUMP CHARGES VIOLATE PROPOSITIONS218 OR 26, THE COURT SHOULD RESERVE THE seeeee 6 sessees 6 beeen 9 bees 11 wees 16 eee 18 beees 24 QUESTION WHETHER THOSE PROPOSITIONS APPLY TO REPLENISHMENT ASSESSMENTS IMPOSED ON PUMPERS IN ADJUDICATED BASINS,000.0... ccecesccssceseceeeeeeceeaeeececsesseesseseaeeeeeeaeessseeeseseeseas 27 CONCLUSIONo.ooeeeceeeeesneeeeesseessesssesesseesaseceesesseessseseseeeas 33 CERTIFICATE OF WORD COUNT. ........cccccccessceessceeesseesseseeeeaes 34 il TABLE OF AUTHORITIES Cases Alpaugh Irr. Dist. v. County ofKern (1952) 113 CalApp.2d 286...cccccceccessseceeeeeesseeens AmadorValley Joint Union High Sch. Dist. v. State Bd. of Equalization (1978) 22 Cal.3d 208.000... ccecescccssesseeeesssseeeseceeesseeess Apartment Assn. of Los Angeles County, Inc. v. City of Los Angeles (2001) 24 Cal4th 830 oo... cceccccseestseceeessseeeeeeeseeees Bighorn-Desert View Water Agency v. Verjil (2006) 39 Cal4th 205ooecccecsseescteeeeesssseeeeeesenes California Redevelopment Assn. v. Matosantos (2011) 53 Cal.4th 230 ooceeccsecsesreeeseesteeeeenenes Greene v. Marin County Flood Control & Water Conservation Dist. (2010) 49 Cal4th 277 oocccecsseesseeseteseesssseeeeeeeeees Griffith v. City of Santa Cruz (2012) 207 CalApp.4th 982 ....c.cccccccscssecsessessessesesesseense Howard Jarvis Taxpayers Assn. v. City of Riverside (1999) 73 Cal.App.4th 679 00... ccccccssssseseseccesceeeees Howard Jarvis Taxpayers Assn. v. City of Roseville (2002) 97 Cal.App.4th 637 ooo. eccccsceeessteessseseeeeessens Howard Jarvis Taxpayers Assn. v. City of Salinas (2002) 98 CalApp.4th 1351 ooo... .cccceccescsssecsssesessceestseeees Orange County Water Dist. v. Farnsworth (1956) 188 Cal.App.2d 518.0... iceecceeeseseeceseauseneees ill Page(s) beseeeeeeeee 14 beseeees 6, 16 .... Dassim we DASSLM beteceeaeeee 21 biveseaees 6, 7 seseeeeeeees 26 beseeeteeeeees 7 i seeeseeeeees 7 wee eeeeeeeeees 9 beseeteeees 11 Pajaro Valley Water Management Agency v. Amrhein (2007) 150 Cal.App.4th 1364 oo... eeceecceseccecceesenseneees passim Paland v. Brooktrails Township Community Services Dist. Bd. of Directors (2009) 179 Cal.App.4th 1358 oo...ccccsssseccceccssesceeceeeeccceece 6 Richmond v. Shasta Community Services Dist. (2004) 32 Cal.4th 409oo.eereeseseecees 10, 15, 16, 22, 23 Schmeer v. County of Los Angeles (2013) 213 Cal.App.4th 1810 ooeeeceeeseeseeees 6, 8, 12, 24 Silicon Valley Taxpayers’ Assn., Inc. v. Santa Clara County Open Space Authority (2008) 44 Cal4th 481 oo...cccccccsccscccceccsceueasssseesseeeesgensens 20 Wright v. Best (1942) 19 Cal.2d 868.00...ee ccccccccccccccsesccesccesccesessueseccuceseceeces 14 Constitutions Cal. Constitution art. art. art. art. art. art. art. art. art. art. art. art. art. art. art. art. art XG Q cecceccccsesssesecseceescassesusssssessussvsssseasaueassesessseavssseveseeeee 30 MTD A eeecccccccccccsseeeeeessesssssevsesesseesescescusessstterensteenes 6, 24 XID C occ ccccccccccececcsseeseeccsvsssccssessecsesseeeeuseseesentnns 7, 24, 26 XU C, § 1, subd. (€) oo...cccececccccsevssssssssttessessseeeees 24 XII C, § 1, subd. ()(1)....ieccceecececccssenseneeeeeeees 4, 25 XII C, § 2, subd. (dD) oo... ecccscccceeccecccseusesesssseeesseentans 25 XITD Doceccccccccsssssseeccccesssseeccescccssssesseuseccvessensenes passim XIII D, § 2, subd. ()0.ccccccccsessseeecccevenseeceees 17, 25 XIII D, § 2, subd. (e) .....cceceeeceeeeeeee 3, 8, 9, 15, 22, 23 XIII D, § 2, subd. (Ch)...ccccccccccccccceeeeeeeeeeees 9, 10, 22 XIII D, § 2, subd. (2) .....cccccccccccccscccccccccecccceceeeceecsesseseeersetans 30 AIT D, § 8 veeeeeccssssssesseessssccsssecscececcccsesceessesevesteneessenaes 17 XIII D, § 4, subd. (a)...eeseececceeeceeeccesecssaeaessess 17 XII D, § 4, subd. (fo... ceccccssccssssseeseassseeceesseeeeeeeees 17 XIII D, § 6, subds. (a)(1)-(2) .oeccceceeccccecssecssssssessececcececeeeeees 17 XII D, § 6, subd. (D)(8) oo... ceceesssssssscsssssesesscceccceceeeeeees 18 XIII D, § 6, subd. (C) oo...ccccccssssssssssssssesccessesceecceeeeeeess 10 1v Statutes Water Code § 1072011 occeeccccccescssssnceessssssccssssseesesssessesstssecseeeeeceeccesencese 30 § 10720.8 oo... cc ccccsssssesssssssssesecccccecssscecesseceeeauanaaesscessseuaasenstsesess 31 §§ 10720-10736.6 occ ccccceecccccccecessscseesssceusuucsssecsecseseauesesersesecs 31 § 10730.2, subd. (8)...........:cccccsssssccesssscccesessececeeseccaceceseccessececerecs 30 § 10730.2, subd. (C) ........ccceeeeecccessssscsssscccececececesceeesttcesesuuseeuseeeess 30 § GOOOO et SEQ. oeeeeeeseececessseesseeseeeseecsaseecesseeesssscsscesesaeees 1, 32 § C0022 oo... eccscccceeeccesssssscecessccssscsssccsceceussevsceesteaeseseeeseuceceverens 29 § COQ2Q0 ooo ecesssccccccccceenseenccesuesesscsenssesessccececeveesttttssaetstsaasaneees 2 § C0222 ooeceecccceccsessseseesesssssscevessessesssussaresesensecsvestesueasessesesreseeeeeve 2 § COBO oo. cccccesscececceeeecececescesscsessssussssussvsesssesstsstttessececsse 2, 29 8§ 60306-60309ooo...cece eeeeecsesessssccessecceccccceeecereetettseneaaaaes 29, 32 § C0325 ooo cceessscccccccccessseescceesstsseversssesececeeeeeerersretsnanes 2, 138, 29 § 6082701 oo.eeeeeeeeeesseeeeaaeeeeceesesesseeeeesseceuseustsescesecesenea 2, 13, 29 § GOBL 7 ooo ceccesssscccccecccessssesecsesesssvesssseescececececesseeeettuseasaaaaaeesess 31 § 60317, subd.(8)...cccccececcccesesececeeccceeeuseseceseeesceeeteseececes 29 §§ 603825-60327.1 oo... cceescccccecsssssesssceeccecesceecsceseesantenssestueeenss 31 § T4000 et SOQ. oe. ee eeeecccssssseseecessecsseseeascecessesscusesssestecsecessttcees 32 § T5522 voeccscsecsscssecssssessesvesecsescsucarssesssessesusstsseaveseaseatsareaeeveeee 10, 13 § 75560-75601 0... ccccccceesseesessessnssecessersceceesceseseveceestnteserstsseeecs 32 §§ 75590-75591occcccccccccccesesecevesssssessnstceeaseeeecesseseeeeeeseetees 31 § TBO occecccccscessesssssvssesecsevsececsecsusssesssessessesucsusstsasessateacarsaeaseees 11 § T5598 oo eccccccccsssssecceecececceecccsscsscesssececsussuescsaauecesecessecersseeeeeers 31 § 755QA oocccccccscsssecssesssssvsssesuvsucsesaessesesecsusssesetstessearessesssareaseeserses 31 § T5G12eeccccccccsscscecssccccecsscscesecsvssesecesttsnenseesstacauseseseceeeecessness 13 § TECoo cccccccsecsessessesecssessssvssssessecssssssesucsassusatsuesaesaessesssatsscesesses 13 Miscellaneous Black’s Law Dictionary (9th ed. 2009) .0..... eee eececcceecscccccceeceseeeeees 17 List of adjudicated basins and subbasins (2013) Cal. Dept. of Water Resources [as of Nov. 13, 2015] ooo... ccc ccccsescssecesseececesssesesssssessssssseseeasees 28 Sen. Bill No. 1168 (2013-2014 Reg. Sess.) § 1, Subd. (€)(2) .o....ceeccceeecccceccccssesssssseccvessessaceesecessetsseeeeecessnaaece 32 Ss PC)bLoeOC: 932 § 1, subd. (0)(4) occcccceccssscesssscecceeecececeeseestettnaeeccsesuceseeese 31 IN THE SUPREME COURT OF CALIFORNIA CITY OF SAN BUENAVENTURA, Plaintiff, Cross-defendant and Appellant, Vv. UNITED WATER CONSERVATION DISTRICT AND BOARD OF DIRECTORS OF UNITED WATER CONSERVATIONDISTRICT, Defendants, Cross-complainants and Appellants. APPLICATION FOR LEAVETO FILE AMICUS CURIAE BRIEF IN SUPPORT OF DEFENDANTS Pursuant to California Rules of Court, rule 8.520(f), the Water Replenishment District of Southern California (WRD) requests permission to file the attached amicus curiae brief in support of defendants, cross-complainants and appellants United Water Conservation District and Board of Directors of United Water Conservation District (collectively, the District). WRDis a government agency established by a vote of the people in 1959 under the Water ReplenishmentDistrict Act of 1955. (Wat. Code, § 60000 et seq.) WRD’s primary responsibility is to replenish water pumped from two connected groundwaterbasins in southern Los Angeles County known as the Central Basin and the West Coast Basin. (Water Replenishment District of Southern California, Cost of Service Report (Apr. 2, 2015) pp. 49, 81 (COS Report).)! WRD’s service area encompasses about 420 square miles, 43 cities, and a population of nearly 4 million people. (Id. p. 7.) WRODis generally empowered to take acts necessary to replenish andprotect the quality of the groundwaterin the basinsit manages. (Wat. Code, §§ 60220, 60222.) To help fund the ongoing replenishment program, WRD’s board is authorized to levy a “replenishment assessment” on “the operators of all water- producingfacilities in the district.” (Wat. Code, §§ 60305, 60325, 60327.1.) Among the operators are municipal water utilities, investor-owned water companies, and mutual water companies,all ofwhom extract groundwaterfrom the basins pursuant to pumping rights adjudicated by the superior court decades ago.? (COS Report, supra, p. 1.) One of the two issues before this Court is whether the District's groundwater pump charges violate Proposition 218 or Proposition 26. WRD is currently litigating a similar issue— whether Proposition 218 governs WRD’s_ replenishment 1 The COS Reportis available at http://www.wrd.org/WRD-CSR- 2015-16.pdf. 2 The judgment adjudicating pumpingrights in the West Coast Basin wasentered in August 1961 in California Water Service Co.v. City of Compton, Los Angeles Superior Court Case No. 506,806. The judgment adjudicating pumpingrights in the Central Basin was entered in October 1965 in Central and West Basin Water Replenishment Districts v. Adams, Los Angeles Superior Court Case No. C786656. assessments. Plaintiff, cross-defendant and appellant City of San Buenaventura (the City) mentioned the WRD litigation in its petition for review. (See PFR 36 & fn. 21.) This Court’s decision could affect not only the course and outcome ofthat litigation but also the process by which WRDlevies replenishment assessments going forward. WRD thus has a vital interest in the Court’s decision in this case. WRD’s counsel has reviewed the parties’ briefs on the merits andbelieves the Court would benefit from additional briefing on the issue whetherthe District’s pump charges violate Proposition 218 or Proposition 26. WRD’s proposed amicusbrief explains: e Proposition 218 does not apply to the District’s pump charges. Proposition 218 applies only to (1) “a user fee or charge for a property related service” and (2) any other charge on a parcel or person “as an incident of property ownership.” (Cal. Const., art. XIII D, § 2, subd. (e).)? The District’s pump chargesdo not fall into either of these categories. e The City errs whenit argues that because waterrights themselves are “property,” pump chargesare necessarily imposed as an incident of property ownership. Proposition 218 applies only to charges imposed as an incident of parcel ownership, not as an incident of water rights ownership. ° The Court of Appeal’s opinion in Pajaro Valley Water Management Agency v. Amrhein (2007) 150 Cal.App.4th 1364 3 In this application and the accompanying amicuscuriaebrief,all undesignated citations to “articles” are to the California Constitution. & (Pajaro), on which the City heavily relies, was poorly reasoned and should be disapproved to the extent it held Proposition 218 applies to pump charges. e Proposition 26 does not apply to the District’s pump charges. Proposition 26 applies to “taxes,” but a charge is not a “tax” when it is (1) “imposed for a specific benefit conferred or privilege granteddirectly to the payor that is not provided to those not charged” andit (2) “does not exceed the reasonable costs to the local governmentofconferring the benefit or granting theprivilege.” (Art. XITI C, § 1, subd. (e)(1).) The District’s pump chargessatisfy both of these requirements. Consequently, they are not “taxes” governed by Proposition 26. e If this Court nevertheless decides that either Proposition 218 or Proposition 26 does apply to the District’s pump charges, the Court’s opinion should respect the distinction between unadjudicated groundwater basins (at issue in this case) and adjudicated groundwaterbasins (such as those WRD manages) by making clear that the opinion does not necessarily apply to replenishment assessments imposed on pumpers in adjudicated basins. The parties do not address the distinction between unadjudicated and adjudicated basins, but it is of critical importance to WRD. No party or counselfor a party authored or helpedto fund any portion of WRD’s proposed amicus brief, which has been funded solely by WRD. | For these reasons, WRDrespectfully requests that this Court accept for filing the attached amicuscuriaebrief. November18, 2015 HORVITZ & LEVY LLP DAVID M. AXELRAD MITCHELLC. TILNER By: ViceCHlect{CELA "rt, Mitchell C. Tilner Attorneys for Amicus Curiae WATER REPLENISHMENT DISTRICT OF SOUTHERN CALIFORNIA AMICUS CURIAE BRIEF LEGAL ARGUMENT I. PROPOSITION 218 DOES NOT APPLY TO CHARGES IMPOSED ON THE ACTIVITY OF PUMPING GROUNDWATER. A. Article XIII D applies to (1) “a user fee or charge for a property-related service” and (2) any other charge ona parcel or person “as an incident of property ownership.” Proposition 218 is best understood in its historical context. (Greene v. Marin County Flood Control & Water Conservation Dist. (2010) 49 Cal.4th 277, 284 (Greene).) The history traces back to 1978, when the electorate adopted Proposition 13 addingarticle XIII A to the California Constitution.4 (Paland v. Brooktrails Township Community Services Dist. Bd. of Directors (2009) 179 Cal.App.4th 1358, 1365, fn. 8.) The principal purpose of Proposition 13 was “to assure effective real property tax relief’ (AmadorValley Joint Union High Sch. Dist. v. State Bd. of Equalization (1978) 22 Cal.3d 208, 231 (Amador Valley)) by limiting local taxes on 4 For a more detailed history of Propositions 13, 218 and 26, see Schmeer v. County of Los Angeles (2013) 213 Cal.App.4th 1310, 1317-1326 (Schmeer). homeowners (Apartment Assn. ofLos Angeles County, Inc. v. City of Los Angeles (2001) 24 Cal.4th 830, 836, 839 (Apartment Assn.)). Proposition 13’s “principal provisions limited ad valorem property taxes to 1 percent of a property’s assessed valuation and limited increases in the assessed valuation to 2 percent per year unless and until the property changed hands.” (Greene, supra, 49 Cal.4th at p. 284.) Proposition 13 also barred local governments and special districts from enacting any special tax without a two- thirds vote of the electorate. (Apartment Assn., supra, 24 Cal.4th at p. 836.) In 1996, reacting to certain judicial interpretations of Proposition 13 and other perceived “government-devised loopholes in” the measure, the electorate adopted Proposition 218. (Apartment Assn., supra, 24 Cal.4th at p. 839; see Howard Jarvis Taxpayers Assn. v. City ofRiverside (1999) 73 Cal.App.4th 679, 681- 682 [discussing backgroundof Proposition 218].) Proposition 218 added articles XIII C and XIII D to the California Constitution. Article XIII D governs imposition of local taxes, assessments, fees and charges related to property, while article XIII C governs imposition of all local “taxes,” as defined. (See Bighorn-Desert View Water Agency v. Verjil (2006) 39 Cal.4th 205, 215-216 (Bighorn); Howard Jarvis Taxpayers Assn. v. City of Roseville (2002) 97 Cal.App.4th 637, 640.) Proposition 218 “ ‘buttresses Proposition 13’s limitations on ad valorem property taxes and special taxes by placing analogous restrictions on assessments, fees, and charges,’ ” as defined in Proposition 218. (Apartment Assn., supra, 24 Cal.4th at p. 837; see Schmeer, supra, 213 Cal.App.4th at p. 1821 [“Proposition 218... established procedural requirements for the imposition of new or increased fees and charges relating to real property and requirementsfor existing fees and charges”].) Article XIII D authorizes four categories of local property taxes: (1) ad valorem property taxes, (2) special taxes, (3) assessments, and (4) fees or charges. (Apartment Assn., supra, 24 Cal.4th at p. 837.) In this case, the City does not contend the District’s pump charges implicate thefirst three categories of local property taxes; the controversy is whether the pump chargesfall within the fourth category—fees or charges—governedbyarticle XIII D. (See OBOM 27, 40-53 [discussing provisionsof article XIII D applicable to fees and charges].) Article XIII D’s definition of “fee” and “charge” narrows the commonly understood meaning of those terms.5 “ ‘Fee’ or ‘charge’ means any levy other than an ad valorem tax, a special tax, or an assessment, imposed by an agency upona parcel or upon a person as an incident of property ownership,includinga userfee or charge for a property-related service.” (Art. XIII D, § 2, subd. (e).) The word “including” in this definition is a term of enlargement. (Bighorn, supra, 39 Cal.4th at p. 217.) Consequently, a charge is governed by article XIII D if it is (1) “a user fee or charge for a property-related service” or (2) a charge imposed on a parcel or person “as an incident of property ownership.” 5 As defined in article XIII D, the terms “fee” and “charge” are synonymous. (Bighorn, supra, 39 Cal.4th at p. 214, fn. 4.) We use the terms interchangeably in this brief. As we explain below, the pump chargesat issue do not fall into either category and thus are not governedby article XIII D. B. » defines “ ‘tax’” to mean “anylevy, charge, or exaction of any kind imposed by a local government,” with seven enumerated exceptions. (Art. XIII C, § 1, subd. (e).) Before a local government may impose a “tax,” 1e., a levy, charge, or exaction not falling within one of the seven exceptions, the local government must comply with one oftwo 10 Proposition 26 also amended section 3 of article XIII A. (Schmeer, supra, 213 Cal.App.4th at p. 1322.) By its terms, that section applies to levies, charges and exactions imposedby the state Legislature, not to charges imposedby local agency. 24 voter-approval requirements, depending on whether the local government proposes to impose a “general tax” or a “special tax.” (See art. XIII C, § 2, subds. (b) & (d).) Thecritical question then is whether a pumpchargeis a “tax” as defined in Proposition 26. ce 299Proposition 26 excepts from the definition of “‘tax’” any “charge imposed [1] for a specific benefit conferred or privilege granted directly to the payor that is not provided to those not charged, and [2] which does not exceed the reasonable costs to the local governmentofconferring the benefit or grantingthe privilege.” (Art. XIII C, § 1, subd.(e)(1).) The Court of Appeal succinctly explained why the District’s pumpchargesatisfies the first element of this exception: “Pumpers receive an obvious benefit—they may extract groundwater from a managed basin.” (Typed opn. 25.) The court continued: The City complains that pumpers are merely exercising their existing property rights and that the District “does not grant the City a right or privilege to use groundwater any more than the County grants a homeownerthe rightto live in his or her home when collecting the property tax.” This analogy is inapt. A pumpfee is more like the entrancefee to a state or local park, which is not a tax .... Although citizens generally have the right to enter such public land, the governmentis entitled to charge them a fee for its efforts to maintain the land so that it can be enjoyed by all who use it... . Without the District’s resource management operations, groundwater would be depleted far faster and overdraft in the District would be far more severe. The District’s conservation efforts 25 thus constitute a specific benefit that accruesdirectly to those who use groundwater. (Ibid.) Whether a pumpchargesatisfies the second element of the subdivision (e)(1) exception to the definition of “tax” depends on whether the total charges collected from all pumpersin a district exceed the district’s reasonable costs of granting and regulating the privilege ofpumping. So long as the charges imposedare “related to the overall cost ofthe governmentalregulation” and do not generate a surplus that can be spent for other governmental purposes, the charges should pass muster underthe subdivision (e)(1) exception. (See Griffith v. City ofSanta Cruz (2012) 207 Cal.App.4th 982, 996- 997.) This inquiry is fact-based and can only be undertaken on a case-by-case basis. The Court of Appeal here independently reviewed the record (typed opn. 12, 27) and concluded “that the District’s pump fees do not exceed the reasonable cost of regulating the District’s groundwater supply” (typed opn. 27). If this Court accepts that conclusion, then the Court should hold the pump charges are not “taxes” within the meaning of Proposition 26 and thus are not governed by article XIII C.44 11 The City’s petition for review raised two issues questioning the standard of review applied by the Court of Appeal (see PFR 1 [Questions 1. and 2.], 28-35), but this Court declined to grant review on those issues. Inits reply brief, the City continues to press these non-issues. (See RBOM 11-16.) 26 III. IF THE COURT HOLDS THAT THE DISTRICT’S PUMP CHARGES VIOLATE PROPOSITIONS218 OR 26, THE COURT SHOULD RESERVE THE QUESTION WHETHER THOSE PROPOSITIONS APPLY TO REPLENISHMENT ASSESSMENTS IMPOSED ON PUMPERSIN ADJUDICATED BASINS. For the reasonsdiscussed in Parts I. and II. above and in the District’s answerbrief on the merits, the Court should hold that the District’s pump charges do not violate either Proposition 218 or Proposition 26. Neither proposition applies to the pumpcharges. If, however, the Court decides that Proposition 218 or Proposition 26 applies to the pump chargesat issue and that the charges violate either Proposition 218 or Proposition 26, WRD respectfully requests that the Court makeclearits decision does not necessarily apply to replenishment assessments levied on operators of water-productionfacilities in adjudicated groundwater basins. As the District accurately observes in its brief, “Proposition 218 cases turn on their unique facts.” (ABOM 41.) Not all Proposition 218 and groundwater fee cases are alike. The nature of the agency, municipality or waterdistrict responsible for imposing the chargein a given case may warrant a different analysis and different outcome. The purpose for which the fee is imposed, the conduct on which thefee is imposed, the mannerin whichthefee is imposed, and whether the costs of service or benefits provided can be allocated by 27 the agency on a parcel-by-parcel basis, will all be outcome determinative of any Proposition 218 issue. (Ibid.) Though both the District and WRD manage groundwater resources, they—and their respective pump charges and replenishment assessments—differ in significant ways. Most importantly, pumping rights in the two groundwater basins under WRD’s management have been adjudicated. The West Coast and Central Basins together form a common underground pool shared by pumpersin both basins. (COS Report, supra, pp. 49, 81.) Decades ago, the courts adjudicated the pumpingrightsofall persons and entities who extract groundwater from those basins.!2 The courts found that various pumpers had pumpingrights under the doctrine of mutual prescription. In contrast, pumping rights in seven of the eight basins falling underthe District’s authority (all but the Santa Paula Basin) have not been adjudicated. (List of adjudicated basins and subbasins (2013) Cal. Dept. of Water Resources [as of Nov. 13, 2015].) The total pumping permitted by the Central Basin and West Coast Basin adjudications exceeds the “natural safe yield” determined by the Department ofWater Resources. In other words, the adjudications allow pumpers to extract more water from the basins each year than naturereturnsto the basins through natural 12 See ante, fn. 2. 28 recharge, a condition knownas “overdraft.” (COS Report, supra, pp. 1, 43; see Wat. Code § 60022 [defining “Annual overdraft”].) The adjudications thus presuppose and depend on a replenishment program to remedy the overdraft. (COS Report, supra, p. 21.) WRD wasestablished specifically to implement and manage that replenishment program, whichdirectly or indirectly benefits all pumpersin both basins. (/d. at pp. 1-2, 54, 81.) To help fund the ongoing replenishment program, WRD’s board is authorized to levy a “replenishment assessment” on “the operators of all water-producing facilities in the district.” (Wat. Code, §§ 60305, 60325, 60327.1.) The Code establishes procedures for the board to provide notice and to hold a hearing on each year’s proposed replenishment assessment. (Wat. Code, §§ 60306-60309.) If, after the hearing, the WRD boarddecides a replenishment assessment is necessary, “the board shall levy a replenishment assessmenton the production of groundwater from the groundwater supplies within the district during the [following] fiscal year... , and the replenishment assessment shall be fixed by the board at a uniform rate per acre-foot of groundwater produced.” (Wat. Code, § 60317, subd.(a).) Whether Proposition 218 applies to replenishment assessments on groundwater production from adjudicated basinsis an important question not raised by the present appeal. And to answer that question, the courts may need to answer a numberof sub-questions,also not currently before this Court. For example: 29 1. Are adjudicated water rights “tenancies of real property” within the meaningof Proposition 218? (See art. XIII D, § 2, subd.(g).) 2. Would applying Proposition 218 to replenishment assessments on the exercise of adjudicated water rights conflict with or undermine the mandate of article X, section 2 of the California Constitution, which “requires that the water resourcesof the State be put to beneficial use to the fullest extent of which they are capable, and that the waste or unreasonable use or unreasonable method of use of water be prevented, and that the conservation of such waters is to be exercised with a view to the reasonable and beneficial use thereof in the interest of the people and for the public welfare”? (Art. X, § 2.) Significantly, in the Sustainable Groundwater Management Act (Act), signed into law on September 16, 2014, the Legislature implicitly recognized that Proposition 218 may applydifferently to unadjudicated and adjudicated basins. The Act establishes a statewide regime for managing groundwater basins. (Wat. Code, § 10720.1.) The Act authorizes an agency that adopts a groundwater sustainability plan under the Act to “impose fees on the extraction of groundwater from the basin to fund costs of groundwater management... .” (Wat. Code, § 10730.2, subd.(a).) When adoptingsuchfees, the agency must comply with Proposition 218. (Ud., § 10730.2, subd.(c).) But, recognizing the need to avoid interfering with currently successful groundwater management, the Legislature exempted agencies managing adjudicated basins from the statutory mandate 30 that fees be imposed in compliance with Proposition 218. (See Wat. Code, § 10720.8 [with exceptions not pertinent here, part 2.74, comprising §§ 10720-10736.6, does not apply to twenty-six “adjudicated areas,” including the Central and West Coast Basins managed by WRD]; see also Sen. Bill No. 1168 (2013-2014 Reg. Sess.) § 1, subd. (b)(4) [Legislature intended “[t]o respect overlying and other proprietary rights to groundwater’].) In other words,in the Legislature’s view, agencies responsible for managing adjudicated basins need not comply with Proposition 218 when imposingfees on groundwater extraction. A future case may present this Court with an opportunity to decide whetherthe Court shares the Legislature’s view. But the present case, which involves mostly unadjudicated basins, affords no such opportunity. Aside from the fundamental distinction between adjudicated and unadjudicated basins, appellant District and WRD differ in other respects. For example, unlike the District’s pump charges, which by statute must distinguish between agricultural and non-agricultural uses (Wat. Code, § 75594), WRD’s replenishment assessments must be uniform for all pumpersin thedistrict; that is, all pumpers must pay the same amountperacre-foot of extracted water. (See COS Report, supra, pp. 81-84.) Also, unlike appellant District, which may establish zones and impose pumpchargesin fewerthan all zones (Wat. Code, §§ 75590- 75591, 75593), WRD mustlevy any replenishment assessments on all operators of water-producingfacilities within the district (Wat. Code, §§ 60317, 60325-60327.1). 31 Further, WRD andthe District were formed under, and are governed by, different enabling acts. The District was created under the Water Conservation District Law of 1931. (Wat. Code § 74000 et seq.) WRD wascreated under the Water Replenishment District Act. (Wat. Code, § 60000 et seq.). The District and WRD are subject to different statutory schemes and procedures for determining whether to impose pump charges (the District) or replenishment assessments (WRD). (Compare Wat. Code, § 75560- 75601 with Wat. Code, §§ 60306-60309.) The Legislature has found: “Groundwater provides a significant portion of California's water supply. Groundwater accounts for more than one-third of the water used by Californians in an average year and more than one-half of the water used by Californians in a drought year when other sources are unavailable.” (Sen. Bill No. 1168 (2013-2014 Reg. Sess.) § 1, subd. (a)(2).) In light of the historic drought conditions currently confronting our state,it is ofparamount importance that WRD and other managers of adjudicated basins not be unnecessarily hamstrungin fulfilling their responsibilities to manage andprotect California’s tenuous groundwater supply. Proper managementof groundwater resources “help[s] protect communities, farms, and the environment against prolonged dry periods and climate change, preserving water supplies for existing and potential beneficial use.” (Sen. Bill No. 1168 (2013-2014 Reg. Sess.) § 1, subd. (a)(4).) Accordingly, WRD respectfully requests that any opinion by this Court holding that Proposition 218 or Proposition 26 applies to the District's pump charges be narrowly crafted, to preserve for 32 future decision the important question whether those propositions also apply to adjudicated basins. CONCLUSION For the reasons discussed above andin the District’s answer brief on the merits, this Court should hold that the District’s pump chargesdo not violate Proposition 218 or Proposition 26—because neither proposition applies to the pump charges. If the court nevertheless holds that the District’s pump charges violate either proposition, the Court’s opinion should reserve for future decision the question whether those propositions apply to replenishment assessments imposed on pumpers in adjudicated basins. November 18, 2015 HORVITZ & LEVY LLP DAVID M. AXELRAD MITCHELL C. TILNER By: ViUEtaet G- ~~ Mitchell C. Tilner Attorneys for Amicus Curiae WATER REPLENISHMENT DISTRICT OF SOUTHERN CALIFORNIA 33 CERTIFICATE OF WORD COUNT (Cal. Rules of Court, rule 8.520(c)(1).) Thetext of this brief consists of 6,827 words as counted by the Microsoft Word version 2010 word processing program used to generate the petition. Dated: November 18, 2015 Mitchell C. Tilner - 34 PROOF OF SERVICE STATE OF CALIFORNIA, COUNTY OF LOS ANGELES At the timeof service, I was over 18 years of age and nota party to this action. I am employed in the County of Los Angeles, State of California. My business addressis 15760 Ventura Boulevard, 18th Floor, Encino, California 91436-3000. On November 18, 2015, I served true copies of the following document(s) described as APPLICATION FOR LEAVE TO FILE AMICUS CURIAE BRIEF IN SUPPORT OF DEFENDANTS; AMICUS CURIAE BRIEF OF WATER REPLENISHMENT DISTRICT OF SOUTHERN CALIFORNIAontheinterested parties in this action as follows: SEE ATTACHED SERVICELIST BY MAIL: I enclosed the document(s) in a sealed envelope or package addressed to the persons at the addresses listed in the Service List and placed the envelope for collection and mailing, following our ordinary business practices. I am readily familiar with Horvitz & Levy LLP’s practice for collecting and processing correspondence for mailing. On the same day that the correspondenceis placedfor collection and mailing, it is deposited in the ordinary course of business with the United States Postal Service, in a sealed envelope with postage fully prepaid. I declare under penalty of perjury under the lawsof the State of California that the foregoing is true andcorrect. Executed on November18, 2015, at Encino, California. (daosdbuollts aryn Shields SERVICELIST City of San Buenaventura v. United Water Conservation District and BoardofDirectors of United Water Conservation District Supreme Court No. S226036 Individual / Counsel Served Party Represented Anthony Hubert Trembley Jane E. Usher Cheryl A. Orr Musick Peeler & Garrett 2801 Townsgate Road, Suite 200 Westlake Village, CA 91361 Appellants and Cross-Respondents United Water Conservation District; Board of Directors of United Water Conservation District Michael G. Colantuono David J. Ruderman MeganS.Knize Colantuono, Highsmith & Whatley, PC 300 S. Grand Avenue, Suite 2700 Los Angeles, CA 90071-3137 Respondent and Cross-Appellant City of San Buenaventura Gregory G. Diaz, City Attorney City of San Buenaventura P.O. Box 99 Ventura, CA 93002-0099 Respondent and Cross-Appellant City of San Buenaventura Dennis O. LaRochelle Susan L. McCarthy John M. Mathews Arnold LaRochelle VanConas & Zirbel LLP 300 Esplanade Drive, Suite 2100 Oxnard, CA 93036 Mathews Intervener Pleasant Valley County Water District Nancy N. McDonough, GeneralCounselChristian C. Scheuring, Assoc.CounselCalifornia Farm Bureau Federation2300 River Plaza DriveSacramento, CA 95833 IntervenerCalifornia Farm BureauFederation; and Farm Bureau ofVentura Count Clerk for the Honorable ThomasP. Anderle Santa Barbara Superior Court 1100 Anacapa Street Santa Barbara, CA 93121 Trial Judge Case No. VENCI 00401714 and 1414739 Clerk of the Court California Court of Appeal Second Appellate District, Div. 6 200 East Santa Clara Street Ventura, CA 93001 Court of Appeal Case No. B251810 Office of the Attorney General Consumer Law Section 455 Golden Gate Avenue, Suite 11000 San Francisco, CA 94102 -