Owners May Have to Pay for Piers in Public Waters : Government: A bill would rescind an obscure law that allows some wealthy landowners to moor their boats free.

Courtesy of the California Legislature, some of the state’s wealthiest homeowners living on its most desirable inland waterways are mooring their boats at rent-free private docks and piers built in public waters.

Under an obscure 1978 law, the state has issued permits that excuse the landowners--many of them California’s power elite--from paying any rent to the state, although the structures occupy space in a state waterway. The homeowners are treated differently than owners of commercial marinas and oil platforms, who routinely pay annual fees for the use of tidelands.

Now, owners of the private piers are coming under attack in the Legislature, where lawmakers are scrambling for ways to make up the state’s record $14.3-billion budget gap. Rethinking the loophole, some lawmakers now say it is time these boat owners pay up.

The list of those holding the renewable five- and 10-year permits has grown to 1,000 people throughout California.

In Southern California, the only concentration of rent-free slips and docks under state jurisdiction are the 102 in the main channels of Huntington Harbour in Huntington Beach. All other waterways are either considered parts of private developments or are controlled by local governments.

In Huntington Harbour, one person with a private pier is Tirso del Junco, a general surgeon who is vice chairman of the state’s Republican Party and has been appointed a University of California regent.

Elsewhere, the piers exist around Lake Tahoe and throughout northern counties. Their owners include Insurance Commissioner John Garamendi, computer magnate William Hewlett, 1976 Olympic decathlon gold medal winner Bruce Jenner, and family members of the publishers of the San Francisco Chronicle and Sacramento Bee.

“It’s absolutely unfair,” Assemblywoman Jackie Speier (D-South San Francisco) said about the rent-free piers. “If you look at it in the cold light of day, it’s indefensible that someone would have a lease for public lands and not pay rent for it..

“There are so many well-heeled people in California that have these piers and coincidentally have connections with the power structure, whether it is the elected officials or their surrogates,” said Speier. “And it’s just one of those perks that people have become accustomed to having.”

Defenders of the private piers say charging rent is a “soak-the-rich” scheme that would subject waterfront homeowners to double taxation because they are already paying higher property taxes because of the exclusive launches.

“We bought the house with the idea that we live on the water and we have a dock,” said Sarah L. Wilson, whose husband is a staff commodore at the Huntington Harbour Yacht Club. “Our taxes pay for it. There’s no way in the world we should pay again.”

Speier stumbled over the issue last fall while working on other matters pertaining to the Lands Commission, the agency that leases sovereign lands below the high-water mark along 1,100 miles of navigable rivers, lakes, streams and coastline. The commission’s 4-million-acre jurisdiction extends three miles out into the ocean and includes Lake Tahoe.

Each year, the agency collects $170 million in rent, most of it from oil and gas exploration leases off the coast of Orange, Santa Barbara, Los Angeles and Ventura counties. Under the “public trust doctrine,” fair-market rents are charged for commercial slips, pipelines, oil platforms and telecommunication lines.

In 1976, at the urging of the Lands Commission, the attorney general ruled that failure to charge rent for the private piers was an unconstitutional gift of public funds. A Contra Costa legislator countered with a 1978 law that codified the privilege, based on the concept that launches provided a “public benefit” during boating emergencies.

Ten years ago, a Los Angeles lawmaker made a run at the rent-free piers. His bill died quickly in the Senate Government Organization Committee.

Now, Speier has resurrected the challenge with a proposal to charge fair-market rent for private piers, docks, slips--and even buoys--in the public waterways. It passed the Assembly 42 to 30 on June 12 and a hearing before the same Senate committee is set for today.

Estimates vary on how much Speier’s measure would net. The commission said it would gain between $225,000 to $675,000 annually on the recreational piers. Speier said she would not be surprised if the state recovers more than $1 million. Pier owners could be looking at charges from $300 to $400 a year.

Apart from the money, Speier’s measure has taken on symbolic proportions. While the state is raising taxes on the middle-class and cutting benefits to the poor, the liberal Democrat said it is only right that it abolish a “sacred cow” privilege for “people who subscribe to the lifestyle of the rich and famous.”

How the increases would affect homeowners is unknown, but recent private pier applications suggest stiff increases. The state last year charged a developer in Huntington Harbour $2,485 in rent for five piers that homeowners enjoy free.

Whatever the cost, Huntington Harbour property owners say they are dismayed at Speier’s intentions. Already this year, they’ve beaten back one unrelated proposal from the city for a local dock tax.

“If this ever comes to the forefront, we’re going to have a war,” said pier owner William H. Wilson, the commodore and retired Bechtel engineer who helped build the San Onofre nuclear power plant. “This girl, this young woman that’s putting in this bill is equating us with Exxon.

“I’m just a poor private citizen,” said Wilson, who owns a 44-foot sportfishing boat moored at his home on Bolero Lane. “I worked all my life. I live here. I bought the house. I got a lease for the submerged water under my dock for 10 years from the state, and I intend to keep that.”

Times staff writer David Lesher contributed to this story.