BILL NUMBER: SB 841	AMENDED
	BILL TEXT

	AMENDED IN SENATE  MARCH 24, 2011

INTRODUCED BY   Senator Wolk

                        FEBRUARY 18, 2011

   An act to  amend Section 40059.1 of   add
Section 40059.2 to  the Public Resources Code, relating to solid
waste.



	LEGISLATIVE COUNSEL'S DIGEST


   SB 841, as amended, Wolk. Solid waste: enterprises: contracts.
   The existing California Integrated Waste Management Act of 1989
allows each county, city, or district to determine aspects of solid
waste handling that are of local concern and the means by which the
services are to be provided. Existing law imposes specified
restrictions on the enforceability of certain indemnity obligations
related to source reduction and diversion contained in a provision,
term, condition, or requirement in an ordinance, contract, franchise,
license, permit, or other entitlement or right adopted, entered
into, issued, or granted by a local agency. Existing law prohibits a
solid waste enterprise, as defined, from being liable for the
indemnity obligation under certain circumstances. 
   This bill would make technical corrections to that provision,
including with regard to the Department of Resources Recycling and
Recovery.  
   This bill would additionally prohibit the enforcement of an
indemnity obligation that requires a solid waste enterprise to defend
and hold harmless the local agency in connection with the local
agency's imposition of fees, charges, levies, exactions, or
assessments that are found by final judgment of a court to have been
imposed in violation of Article XIII C or XIII D of the California
Constitution or that require a solid waste enterprise to refund
certain fees. 
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

   SECTION 1.    Section 40059.2 is added to the 
 Public Resources Code   , to read:  
   40059.2.  (a) The Legislature hereby finds and declares both of
the following:
   (1) In 1996, the voters of California adopted Proposition 218,
which among other things, limits the ability of local agencies to
impose certain property-related fees and assessments without prior
property owner consent. In 2010, California voters passed Proposition
26, a further initiative that limits the ability of local agencies
to impose fees, levies, charges, or other exactions without prior
voter approval. These initiatives, among other things, amended
Article XIII C and Article XIII D of the California Constitution.
   (2) The public policy objective of the Legislature in enacting
this section is to ensure that those local agencies that require an
indemnity obligation from solid waste enterprises, as a condition of
providing solid waste handling services within the local agency's
jurisdiction, retain their responsibility for complying with Article
XIII C and Article XIII D of the California Constitution, by
obtaining any necessary voter or property owner approval before
adopting any fees, levies, charges, assessments, or other exactions
that are collected for the local agency by the solid waste
enterprise.
   (b) For the purposes of this section, the following terms have the
following meanings:
   (1) "Indemnity obligation" means an indemnity obligation directly
or indirectly related to the failure of a local agency to obtain
voter or property owner approval of a fee, levy, charge, assessment,
or other exaction, as required by Article XIII C, or Article XIII D
of the California Constitution, if that indemnity obligation is
expressly assumed by, or imposed upon, the solid waste enterprise,
including pursuant to ordinance, contract, franchise, license,
permit, or other entitlement or right, for the benefit of the local
agency.
   (2) "Local agency" means a county, city, city and county,
district, regional agency as defined in Section 40181, or other local
government agency.
   (c) An indemnity obligation that meets either of the following
conditions is subject to subdivision (d):
   (1) The indemnity obligation is authorized or required by a
provision, term, condition, or requirement contained in an ordinance,
contract, franchise, license, permit, or other entitlement or right
adopted, entered into, issued, or granted, as the case may be, by a
local agency for solid waste handling services, including the
recycling, processing, or composting of solid waste.
   (2) The indemnity obligation is authorized or required in a
request for bids or proposals in connection with a contract or
franchise specified in paragraph (1).
   (d) Notwithstanding any provision, term, condition, or
requirement, the indemnity obligation is null and void as against
public policy and is not enforceable if it does either of the
following:
   (1) Requires a solid waste enterprise to defend and hold harmless
the local agency in connection with the local agency's imposition of
fees, charges, levies, exactions, or assessments that are found by
final judgment of a court to have been imposed in violation of
Article XIII C, or Article XIII D of the California Constitution.
   (2) (A) Requires a solid waste enterprise to refund fees to its
customers, if the fees are collected on behalf of the local agency by
the solid waste enterprise and have been remitted by the solid waste
enterprise to the local agency.
   (B) The obligation to refund the fees subject to this paragraph
that are remitted to the local agency shall remain with the local
agency, which shall be responsible for refunding the fees.
   (e) The provisions of this section are not subject to waiver, and
any attempted waiver shall be null and void as against public policy.

   (f) This section is not intended to do any of the following:
   (1) Add to or expand the authority of local agencies to determine
aspects of solid waste collection and handling specified in Section
40059.
   (2) Alter the authority of business entities to collect or process
materials that are not solid waste.
   (3) Affect any contract right existing on the effective date of
this section.  
  SECTION 1.    Section 40059.1 of the Public
Resources Code is amended to read:
   40059.1.  (a) The Legislature hereby finds and declares both of
the following:
   (1) In 1989, the Legislature enacted this division as the
California Integrated Waste Management Act of 1989. One of the key
provisions of this division is that each local agency has the
responsibility for diverting 50 percent of all solid waste generated
within the local agency by January 1, 2000.
   (2) The public policy objective of the Legislature in enacting
this section is to ensure that those local agencies that require an
indemnity obligation retain their responsibility for implementing the
diversion requirements of this division.
   (b) For the purposes of this section, the following terms have the
following meanings:
   (1) "Indemnity obligation" means any indemnity obligation directly
or indirectly related to the failure of a local agency to meet the
solid waste diversion requirements imposed by Chapter 6 (commencing
with Section 41780) of Part 2, that is expressly assumed by, or
imposed upon, the solid waste enterprise, whether pursuant to
ordinance, contract, franchise, license, permit, or other entitlement
or right, for the benefit of the local agency.
   (2) "Local agency" means any county, city, city and county,
district, regional agency as defined in Section 40181, or other local
government agency.
   (c) A provision, term, condition, or requirement contained in any
ordinance, contract, franchise, license, permit, or other entitlement
or right adopted, entered into, issued, or granted, as the case may
be, by a local agency for solid waste collection and handling,
including the recycling, processing, or composting of solid waste, or
in any request for bids or proposals in connection with a contract
or franchise, that authorizes or requires the imposition of an
indemnity obligation, shall, notwithstanding the provision, term,
condition, or requirement, be subject to all of the following
restrictions:
   (1) An indemnity obligation shall not be enforceable if the
penalty imposed by the department pursuant to Section 41850 is based
solely upon the failure of the local agency to establish and maintain
a source reduction and recycling element pursuant to Chapter 2
(commencing with Section 41000) of Part 2, Chapter 3 (commencing with
Section 41300) of Part 2, or Section 41750.1, as applicable.
   (2) A penalty imposed by the department pursuant to Section 41850
is based upon a local agency's failure to meet the solid waste
diversion requirements imposed by Chapter 6 (commencing with Section
41780) of Part 2, resulting in whole or in part from the solid waste
enterprise's breach of contract or noncompliance with any other
authorization, shall be apportioned in accordance with the percentage
of fault of the local agency and the solid waste enterprise.
   (3) For purposes of this section, a solid waste enterprise is not
liable for the indemnity obligation to the extent that the solid
waste enterprise's breach or noncompliance resulted from the action
or failure to act of the local agency.
   (4) No payment required or imposed pursuant to an indemnity
obligation, whether required or imposed by ordinance, contract,
franchise, license, permit, or other entitlement or right, may exceed
that portion of any penalty assessed by the department against the
local agency that was caused by the solid waste enterprise's breach
or noncompliance of an express obligation or requirement.
   (5) An indemnity obligation shall not be enforceable against a
solid waste enterprise until the local agency has affirmatively
sought, in good faith, all administrative relief available pursuant
to Chapter 6 (commencing with Section 41780) and Chapter 7
(commencing with Section 41800) of Part 2, unless the local agency
demonstrates good cause, based on substantial evidence in the record,
for not pursuing that administrative relief. The solid waste
enterprise shall cooperate, in good faith, with the local agency
seeking that administrative relief and shall provide in writing to
the local agency all known defenses to the imposition of penalties.
   (d) Nothing in this section shall be construed to preclude either
party from seeking any other remedy under law or equity.
   (e) The provisions of this section are not subject to waiver, and
any attempted waiver shall be null and void as against public policy.

   (f) This section is not intended to do any of the following:
   (1) Add to or expand the authority of local agencies to determine
aspects of solid waste collection and handling pursuant to Section
40059.
   (2) Alter the authority of business entities to collect or process
materials that are not solid waste.
   (3) Affect any contract right existing on January 1, 1999.