The California Court of Appeal, Fifth Appellate District, has ruled in favor of the State Water Resources Control Board (State Board) in a case brought by the Kings County Farm Bureau and others, allowing the State Board to move forward with its plans to regulate groundwater usage in the Tulare subbasin. The court reversed a lower court’s decision that had blocked the State Board’s actions, clarifying the scope of the Sustainable Groundwater Management Act (the Act) and the State Board’s authority under it.
Background of the Case
The case centers on the Tulare Lake groundwater subbasin, a region facing significant groundwater challenges. In 2014, California passed the Sustainable Groundwater Management Act (the Act) to address these issues. The Act prioritizes the management of groundwater resources by local agencies, with the state stepping in when necessary.
The State Board initiated actions to implement monitoring, reporting, and fee provisions triggered when the Tulare subbasin was designated as “probationary” due to the inadequacy of local groundwater management plans. The Kings County Farm Bureau and others challenged the State Board’s actions, arguing the Board was exceeding its authority. They filed a writ of mandate and a complaint to halt the State Board’s actions, and the trial court initially sided with the Farm Bureau.
The Court’s Decision: Key Takeaways
The Court of Appeal’s decision addressed several key issues, ultimately siding with the State Board on most points:
Underground Regulations: The Farm Bureau argued that the State Board’s actions, as outlined in its staff report, constituted “underground regulations” that should have been adopted through the formal rule-making process of the Administrative Procedure Act (APA). The Court of Appeal disagreed. It determined that the Act exempts the State Board from APA requirements for actions taken under sections 10735.2 and 10735.8, which include designating a basin as probationary. The court found that the State Board’s actions were authorized under the Act, and therefore, exempt from the APA.
Fees and the “Pay First” Rule: The Farm Bureau also challenged fees imposed by the State Board, claiming they were an illegal tax, not a regulatory fee, and therefore violated Proposition 13 and Proposition 26, which require a two-thirds vote for new taxes. The Court of Appeal held that the challenge to the fees was subject to the “pay first” rule, which means the Farm Bureau must pay the fees before challenging them in court. The court noted that the Farm Bureau’s challenge relied on arguments that would classify the fee as a tax, thus triggering the “pay first” rule. The court found that the Farm Bureau could not proceed with its claim without paying the fees first.
Declaratory Relief: The Farm Bureau sought declaratory relief regarding the legality of the probationary designation. The Court of Appeal ruled that declaratory relief was not appropriate because the Legislature had already designated a specific remedy—a writ of mandate—for challenging the State Board’s administrative decisions.
Implications of the Ruling
The Court of Appeal’s ruling allows the State Board to move forward with its plans to oversee groundwater management in the Tulare subbasin. This means the State Board can continue to implement the monitoring, reporting, and fee provisions triggered by the probationary designation. The ruling clarifies the state’s role in groundwater management under the Act, emphasizing the importance of local agency action while preserving the State Board’s authority to intervene when necessary.
The decision also reinforces the “pay first” rule, requiring those who challenge taxes or fees to pay them before pursuing legal action. This principle is intended to ensure that essential government services are not disrupted during tax disputes.
The court’s decision will likely have a significant impact on groundwater management in California, providing guidance on how the State Board can implement the Act and how local agencies and individuals can challenge its actions.