BILL ANALYSIS
SENATE LOCAL GOVERNMENT COMMITTEE
BILL NO: AB 2554 HEARING: 8/11/10
AUTHOR: Brownley FISCAL: No
VERSION: 8/5/10 CONSULTANT:
Weinberger
[REVISED]
LOS ANGELES COUNTY FLOOD CONTROL DISTRICT'S FEES
Background and Existing Law
Proposition 218 (1996) defined a property-related fee or
charge as any levy other than an ad valorem tax, a special
tax, or an assessment imposed by an agency on a parcel or
on a person as an incident of property ownership, including
a user fee or charge for a property-related service.
Before a local government can charge a new property-related
fee, or increase an existing one, Proposition 218 requires
local officials to:
Identify the parcels to be charged.
Calculate the fee for each parcel.
Notify the parcels' owners in writing about the
fees and the hearing.
Hold a public hearing to consider and count
protests.
Abandon the fees if a majority of the parcels'
owners protest.
Further, new or increased property-related fees require:
A majority-vote of the affected property owners;
or,
Two-thirds registered voter approval; or,
Weighted ballot approval by the affected property
owners.
The election requirements don't apply to property-related
fees for sewer, water, or refuse collection services. A
2002 appellate court decision in Howard Jarvis Taxpayers
Association v. City of Salinas found that a city's charges
on developed parcels to fund stormwater management were
property-related fees, and were not covered by Proposition
218's exemption for "sewer" or "water" services. As a
result, stormwater fees require a vote of property owners
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or registered voters.
Drainage from impervious surfaces produces urban runoff,
stormwater discharges, and water pollution. To protect
rivers and oceans, the federal Clean Water Act requires the
states to reduce pollution from urban runoff. Most
stormwater discharges require National Pollutant Discharge
Elimination (NPDES) permits. In California, the State
Water Resources Control Board (SWRCB) and the Regional
Water Quality Control Boards (RWQCBs) are pushing counties,
cities, and special districts to reduce urban runoff and
stormwater discharges.
Formed in 1915 (SB 459, Benedict and Carr, 1915), the Los
Angeles County Flood Control District is a special act
special district that provides flood control and water
quality services to 85 cities and most of the
unincorporated area in Los Angeles County. Governed ex
officio by the Los Angeles County Board of Supervisors, the
District has statutory authorization to levy ad valorem
taxes and assessments. However, it lacks the authority to
impose property-related fees.
The Legislature has authorized counties, cities, sanitary
districts, county sanitation districts, sewer maintenance
districts, and other districts responsible for sanitary
sewers and sewerage systems to impose fees in connection
with storm drainage services and facilities (SB 682, Mello,
1991). In 2005, the Legislature authorized the Ventura
County Watershed Protection District to impose property
related fees to fund storm drainage services and facilities
(AB 554, Nava, 2005). The Los Angeles County Flood Control
District is asking the Legislature to grant it the same
authority.
Proposed Law
Assembly Bill 2554 authorizes the Los Angeles County Flood
Control District to impose a fee or charge anywhere within
the District's territory, in compliance with Article XIII D
of the California Constitution, to pay the costs and
expenses of carrying out projects and providing services to
improve water quality and reduce stormwater and urban
runoff pollution in the District.
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AB 2554 requires the fees to be collected with county
taxes. The revenues must be paid into the county treasury
to District's credit. The board of supervisors may spend
the funds to pay for the District's costs.
The bill requires the District to allocate the revenues as
follows:
10% to the District to implement and administer
water quality programs and to pay the District's costs
for levying and collecting the fee and distributing
revenues.
40% to Los Angeles County and to the cities within
the District, divided proportionally among each
jurisdiction, to be expended for water quality
improvement programs.
50% to nine watershed authority groups that the
District must authorize by ordinance, divided
proportionally among each watershed, to implement
collaborative water quality improvement plans or
programs in the watersheds.
AB 2554 requires nine watershed authority groups to be
established under the Joint Exercise of Powers Act for the
following watersheds: Ballona Creek, Dominguez Channel,
Upper Los Angeles River, Lower Los Angeles River, Rio
Hondo, Upper San Gabriel River, Lower San Gabriel River,
Santa Clara River, and Santa Monica Bay.
The bill specifies that implementation of a watershed
authority group's collaborative water quality plan or
program requires the consent of any member agency whose
jurisdiction comprises more than 40% of the total land area
in a watershed.
AB 2554 requires the District's governing board to adopt an
ordinance to implement its fee authority.
The bill makes other technical amendments to the District's
authorizing statutes.
Comments
1. Vital funding for cleaner water . The Los Angeles
County Flood Control District covers more than 3,000 square
miles and includes the vast majority of drainage
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infrastructure within incorporated and unincorporated Los
Angeles County. Storm water and urban runoff drain into
the District's system and ultimately into the Pacific
Ocean, carrying trash, bacteria, and other pollutants.
Aging infrastructure, increasingly stringent clean water
laws, and unmet drainage needs require the District to
invest in costly flood protection, water quality, and water
conservation projects that threaten to overwhelm its
existing revenue stream. AB 2554 gives the District, with
voter approval, a stable and long-term revenue stream for
constructing and maintaining watershed management projects.
The August 5 amendments to AB 2554 reflect an agreement
reached between the District and cities within its
boundaries to take a regional approach to using fee
revenues to address clean water compliance issues.
2. Is a fee necessary ? The District already has the
authority to impose benefit assessments, which need
weighted majority property owner approval. However, unlike
many other special districts, the District lacks the
statutory authority to levy a special tax with 2/3-voter
approval. Rather than expose the taxpayers to a new type
of fee, the Committee may wish to consider whether the
District should use its existing tools or whether the
Legislature should authorize the District to levy a special
tax subject to the requirements of Proposition 218.
3. Proposition 218 still intact . Proposition 218 protects
property owners' interests by requiring a local government
that wants to charge a property-related fee to meet certain
requirements. AB 2554 doesn't change that. If the
District uses AB 2554 to impose a property-related fee, it
must meet the constitutional requirements added by
Proposition 218. If it can't follow the Constitution, it
can't impose the fee.
4. Striking a balance . AB 2554 balances the state's need
to be specific in granting fee authority to the District
while also providing local officials with sufficient
discretion to address local needs. For example, the bill
doesn't specify whether the District must impose the fee
throughout the district or whether the fee authority can be
imposed only in those areas that have watershed authority
groups. By broadly requiring the District to adopt an
implementing ordinance, AB 2554 attempts to ensure that the
District spells out the fee program's structure in detail
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without having to put all of those details into state law.
5. Other bills . The Senate Local Government Committee
passed AB 564 (Brownley, 2008), which authorized the Los
Angeles County Flood Control District to charge property
related fees throughout the district. That bill died on
the Senate Floor. AB 139 (Brownley, 2009), which also
authorized the District to charge property-related fees was
never heard by a policy committee.
6. Other approaches . In recent years, the Senate Local
Government Committee has considered other proposals to help
local governments finance the increasing costs of managing
stormwater and urban runoff. SCA 18 (Liu, 2009) and SCA 12
(Torlakson, 2006) added stormwater and urban runoff
services to the list of property-related fees (water,
sewer, and refuse collection) that do not require electoral
approval. AB 938 (Calderon, 2006) allowed local officials
to charge regulatory fees to implement new watershed plans,
thereby sidestepping the constitutional question about
whether stormwater runoff fees are property-related fees.
SCA 18 and SCA 12 effectively overturned the 2002 Salinas
decision, while AB 938 sidestepped it. By contrast, AB
2554 accommodates the court's decision by asking for the
authority to seek voter approval for the Los Angeles County
Flood Control District's property-related fees.
7. Legislative history . At its June 30 hearing, the
Senate Local Government Committee approved an earlier
version of AB 2554 by a 3-2 vote. Because the August 5
amendments rewrote AB 2554 to expand the geographic area in
which the district can levy fees, specify the allocation of
fee revenues, and provide for the creation of watershed
authority groups, the Senate Rules Committee referred the
bill back to the Senate Local Government Committee under
Senate Rule 29.10.
Assembly Actions
Assembly Local Government Committee: 6-2
Assembly Floor: 48-28
Support and Opposition (8/9/10)
Support : County of Los Angeles, Association of California
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Water Agencies, California State Association of Counties,
Los Angeles and San Gabriel Rivers Watershed Council, Los
Angeles Stormwater Quality Partnership, Tree People.
Opposition : Howard Jarvis Taxpayers Association.