BILL ANALYSIS Ó AB 418 Page 1 CONCURRENCE IN SENATE AMENDMENTS AB 418 (Mullin) As Amended February 10, 2014 2/3 vote. Urgency ----------------------------------------------------------------- |ASSEMBLY: | |(May 9, 2013) |SENATE: |27-8 |(February 20, | | | | | | |2014) | ----------------------------------------------------------------- (vote not relevant) ------------------------------------------------------------------------ |COMMITTEE VOTE: |7-2 |(April 2, 2014) |RECOMMENDATION: |concur | |(L. Gov.) | | | | | ------------------------------------------------------------------------ Original Committee Reference: JUD. SUMMARY : Authorizes the City/County Association of Governments (C/CAG) of San Mateo County to impose a special tax, in compliance with Article XIII C of the California Constitution, or to impose a property related fee, in compliance with Article XIII D of the California Constitution, to implement stormwater management programs consistent with the joint powers agreement of C/CAG's member agencies. The Senate amendments delete the Assembly version of this bill, and instead: 1)Authorize C/CAG to impose a special tax, in compliance with Article XIII C of the California Constitution, or to impose a property related fee, in compliance with Article XIII D of the California Constitution, to implement stormwater management programs consistent with the joint powers agreement of C/CAG's member agencies. 2)Allow the special tax or property related fee, at the option of C/CAG, to be collected on the tax rolls of the county in the same manner, by the same persons, subject to the same penalties, and at the same time as county ad valorem property taxes. Allow the county auditor to deduct the amount required to reimburse the county for its actual cost of collection. AB 418 Page 2 3)Contain an urgency clause. 4)Find and declare that a special statute is necessary because of the unique circumstances applicable only to C/CAG. 5)Find and declare that this bill responds to the specific and unique circumstances of C/CAG and that it is the intent of the Legislature that this act shall not be construed to limit, expand, or otherwise change any local agency's authority to exercise powers under the Joint Exercise of Powers Act. 6)Find and declare that this bill will enable C/CAG to do all of the following: a) Protect, in conjunction with its member agencies, the watersheds and natural resources within C/CAG and restore and enhance the environment, including the long-term protection of the waters of local creeks, the San Francisco Bay, and the coastline along the Pacific Ocean; b) Develop and adopt a countywide stormwater management program designed to coordinate, fund, and implement water pollution prevention programs within the County of San Mateo by C/CAG or its member agencies; and, c) Impose, consistent with the California Constitution, a special tax or property related fee to fund activities outlined in its joint powers agreement and consistent with municipal stormwater permit requirements mandated by the San Francisco Bay Regional Water Quality Control Board. EXISTING LAW : 1)Allows two or more public agencies by agreement, if authorized by their legislative or other governing bodies, to jointly exercise any power common to the contracting parties. 2)Requires two-thirds voter approval for a special tax. 3)Provides notice, protest, and hearing procedures for the levying of new or increased assessments or property related fees or charges by local government agencies pursuant to Proposition 218 (1996). AS PASSED BY THE ASSEMBLY , this bill required state agencies to AB 418 Page 3 post a specifically described graphical Internet link referencing the State Auditor's Web site location that contains information on how to file a complaint pursuant to the California Whistleblower Protection Act. FISCAL EFFECT : None COMMENTS : 1)Purpose of the bill. This bill authorizes C/CAG to impose a special tax or a property related fee, in compliance with the California Constitution, to implement stormwater management programs consistent with the joint powers agreement of C/CAG's member agencies. 2)Author's statement. According to the author, "C/CAG is a joint powers agency formed in 1991 to provide a forum for all local governments in San Mateo County to work together on common issues. C/CAG's member agencies are the County of San Mateo and the 20 cities and towns within the county. In addition to its primary role as the county's Congestion Management Agency, C/CAG provides numerous other services, including managing the Countywide Water Pollution Prevention Program, which supports member agencies in complying with municipal stormwater regulations issued by the San Francisco Bay Regional Water Quality Control Board under its Municipal Regional Permit. Although C/CAG is not a permittee under the permit, it does implement compliance programs for certain requirements on behalf of its member agencies when it is more efficient or cost-effective to perform those services at a countywide level (e.g. water quality monitoring). "C/CAG and about half of its member agencies have existing pre-Proposition 218 assessments dedicated to stormwater pollution prevention programs. In some cases, member agencies that currently don't have a dedicated stormwater assessment are funding stormwater compliance activities through other sources, including their local general funds. C/CAG has two existing countywide stormwater assessments imposed through the San Mateo County Flood Control District under the Board of Supervisors. Those two assessments generate approximately $1.5 million annually. "In 2010, San Mateo County voters approved C/CAG's Measure M, authorizing a $10 vehicle registration fee that primarily funds AB 418 Page 4 congestion management-related activities, but is also used for stormwater pollution prevention programs by both C/CAG and its member agencies. C/CAG's member agencies have been required to implement increasingly expensive programs to address a variety of ubiquitous stormwater pollutants and others that are challenging to address, including trash, pesticides, mercury, and polychlorinated biphenyls, existing revenues are now insufficient to meet regulatory demands. C/CAG estimates countywide funding deficits exceed $15 million per year for C/CAG and its member agencies to provide compliant stormwater programs over the next five year-term of the Municipal Regional Permit. "C/CAG believes it is the most appropriate agency to pursue countywide funding in its role as the Countywide Water Pollution Prevention Program administrator, given that any decision to place a special tax or property-related fee before voters or property owners would be subject to approval by C/CAG's Board of Directors, which includes an elected official from each of the 21 local agencies. C/CAG is pursuing enabling legislation because there are no other viable means already codified for a joint powers agency to propose special taxes or property-related fees for stormwater pollution prevention programs." 3)Proposition 218. The California Constitution distinguishes among taxes, assessments and fees for property related revenues, and requires certain actions before such revenues may be collected. This bill requires C/CAG to comply with the provisions of Proposition 218 (1996) which require a two-thirds voter approval for a special tax. For a property related fee Proposition 218 requires local officials to identify the parcels, calculate the fee for each parcel, and conduct a majority protest proceeding 45 days after mailing notice of a new fee to all fee payers. Additionally, Article XIII D, Section 6, subdivision (c) of the California Constitution provides that "Except for fees or charges for sewer, water, and refuse collection services, no property related fee or charge shall be imposed or increased unless and until that fee or charge is submitted and approved by a majority vote of the property owners of the property subject to the fee or charge or, at the option of the agency, by a two-thirds vote of the electorate residing in the affected area." Counties and other local agencies with police powers may impose any one of these options on property owners, after completing the Proposition 218 process. Special districts created by statute, however, must have specific authority for each of these revenue AB 418 Page 5 sources. 4)Joint Exercise of Powers Act. The Joint Exercise of Powers Act provides the statutory authority for public entities to create and use a joint powers agreement, which is a legal framework for state and local governments to exercise common powers and even create new public entities. They are an attractive tool for local governments because they facilitate more efficient service provision through collaboration, and because they permit local entities to issue bonds without voter ratification. Current law authorizes joint powers authorities (JPAs) to jointly exercise any power common to the contracting parties, if authorized by their legislative or governing body. However, current law is silent on a JPA's explicit authority to impose a special tax, assessment, or property related fee. AB 2170 (Mullin) of the current legislative session, pending in the Assembly, addresses this issue by explicitly authorizing two or more public agencies by agreement to jointly exercise any power common to the contracting parties including, but not limited to, the authority to levy a fee or tax. AB 2170 finds and declares that a JPA has all powers common to the contracting parties, so long as those powers are specified in the joint powers agreement, therefore, the bill does not constitute a change in law, but is declaratory of existing law. 5)Previous legislation. In 2004, AB 1546 (Simitian), Chapter 931, Statutes of 2004, granted C/CAG the authority to impose an annual fee on motor vehicles for programs to manage traffic congestion and stormwater pollution. This authority was extended until January 1, 2013, by SB 348 (Simitian), Chapter 377, Statutes of 2008. SB 613 (Simitian) of 2007, would have extended the authority until January 1, 2019, but was vetoed by Governor Schwarzenegger. 6)Arguments in support. Supporters argue while ultimate approval of any new funding stream still rests with the voters and property owners within our jurisdictions pursuant to the Constitution that this bill will enable a coordinated countywide approach to funding stormwater pollution prevention programs consistent with the consolidated regional regulations issued by the San Francisco Bay Regional Water Quality Control Board. 7)Arguments in opposition. Opposition argues that this bill is unnecessary because San Mateo County, its cities, and some of its AB 418 Page 6 special districts already have authority to fund stormwater programs using existing revenue tools. Analysis Prepared by : Misa Yokoi-Shelton / L. GOV. / (916) 319-3958 FN: 0003116