Wat. Code, § 72143.1

If any producer subject to production assessments, after having been given notice as required by Section 72142.2, fails to file an annual report on production, such producer shall, in addition to the liability for interest provided in Section 72142.4, become liable to the assessing district for a penalty of two dollars ($2) per acre-foot produced during the fiscal year subject to such report.

If the board of the assessing district has probable cause to believe that the production by any producer is unreported or, if reported, is substantially in excess of that disclosed by the annual report of such producer, such board shall cause an investigation and report to be made concerning such production. Such board shall determine and fix the correct amount of production for any such producer, not to exceed the maximum production capacity of such producer’s water producing facilities; provided, however, where a water measuring device is permanently attached thereto, the record of production as disclosed by such water measuring device shall be presumed to be accurate, and the burden shall be upon such board to establish to the contrary.

After such determination has been made by such board, a written notice thereof shall be mailed to the producer by such assessing district at his address as shown by the primary district’s records. Any such determination made by such board shall be conclusive on the producer, and production assessments based thereon, together with interest and penalties, shall be payable immediately, unless such producer shall file with such board within 10 days after the mailing of such notice a written protest setting forth the ground or grounds for protesting the amount of production so determined or the production assessment, interest, and penalties so levied thereon. Upon the filing of such protest, such board shall hold a hearing at which time the total amount of production and the production assessment thereon shall be determined, and the interest and penalties fixed, which action shall be conclusive if based upon substantial evidence. A notice of such hearing shall be mailed to the protestant at least 10 days before the date fixed for the hearing. Notice of the determination by such board shall be mailed to each protestant. Such producer shall have 20 days from the date of mailing of such notice to pay the production assessment, interest, and penalties so fixed by such board. Within 30 days after the conclusion of the proceedings under this section, such assessing district shall deliver a copy of the notice of the determination to the primary district.