California Water Agency Imposed Unlawful Tax, State Court Rules

Water replenishment charges imposed by the Coachella Valley Water District are unconstitutional taxes because the district failed to justify its practice of charging customers in different areas unequal rates, a California appeals court held.

The California Court of Appeal, Fourth District, held these charges violate the allocation rule in the California constitution which requires fees and taxes to be fairly allocated among payers. The court determined the district couldn’t provide a reasonable justification for charging higher rates to residents in its western area compared to those in its eastern area, so the court affirmed a refund of about $13.4 million ...