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Show CHAPTER I EXPERIENCE OF STATES AND SELECTED FOREIGN GOVERNMENTS WITH WATER USER FEES GENERAL Various forms of water user charges have been utilized by foreign governments and by U. S. federal government agencies, and sewer and water charges by local governments are common. States generally have not employed water- user fees as a source of operating funds for water agencies or of water development capital. A 1974 survey of state water financing arrangements in connection with this project and in cooperation with the Utah Division of Water Resources revealed that few states are imposing water user charges on uses other than recreation and then on only a limited basis ( see Table 1). Just two states reported a fee for water diversions; two others have fees for waste discharges; three reported fees on hydropower; only one has storage fees; and one other state levies fees on water rights from state lands. Nine states sell water from state water projects or from purchased storage in federal projects. Table 1. State user fee programs. Arkansas Storage California X Hawaii X Water Rights0 Indiana X Kansas X Louisiana X Michigan Waste Discharge Nevada X Hydropower & Diversion New Hampshire X New Jersey X Diversion New York Hydropower Ohio X Oregon Hydropower Wisconsin Waste Discharge Source: Survey of state water- user fee programs conducted in cooperation with the Utah Division of Water Resources, 46 states responded. Exclusive of one- time permit fees and recreation fees and licenses. cLeases out water rights from state lands. Although state water sales constitute a different form of payment by users than the user fee ( excise tax) being considered in this study, information on water sales is included in Table 1. State experience in structuring and administering water sales may have application in establishing user fee systems. The brief descriptions of various state and foreign government systems which follow are divided into two sections: one on user fees and one on water sales. Several states have established special revolving water development funds and some states make annual appropriations for state and local water projects. Most, if not all, states have license fees and access fees for fishing, hunting, and various other forms of water recreation. The revenues from these fees, however, ordinarily serve to defray management and operating expenses of the agencies concerned with these activities, and none is made available for water development or for administrative expenses of water management agencies. WATER USER FEES Ecuador The water user fee similar to an excise tax is rare; however, it is being employed in a few places. Ecuador, South America, ( Daines and Falconi, 1974) treats water as a publicly owned commodity and charges a concession tax on its use. This tax is not related to maintenance, operation, or the value of the works from which the user benefits, but is a tax on the use of water per se. The amount of the tax varies with the amount of use, and different rates are applied to different uses. Only culinary use is exempt. The tax is based upon metered use or upon the amount awarded in the concession. The funds generated by the tax are used to finance the operation of the government's water agency. See Appendix A for a schedule of charges. British Columbia In British Columbia, Canada, ownership of water resources rests with the province, and annual rental fees must be paid for storage and diversion rights for a 3 |