BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 2259
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          ASSEMBLY THIRD READING
          AB 2259 (Ridley-Thomas)
          As Amended  April 1, 2014
          Majority vote 

           LOCAL GOVERNMENT    9-0                                         
           
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          |Ayes:|Achadjian, Levine, Alejo, |     |                          |
          |     |Bradford, Gordon,         |     |                          |
          |     |Melendez, Mullin, Rendon, |     |                          |
          |     |Waldron                   |     |                          |
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          SUMMARY  :  Requires actions to challenge a replenishment  
          assessment for the Water Replenishment District of Southern  
          California (WRD) to be commenced within 120 days of the adoption  
          of the resolution or motion to levy the replenishment  
          assessment.  Specifically,  this bill  :  

          1)Requires a judicial action or proceeding to attack, review,  
            set aside, void, or annul a resolution or motion levying a  
            replenishment assessment for WRD to be commenced within 120  
            days of the adoption of the resolution or motion.  

          2)Requires that an action by a local agency or interested person  
            regarding the replenishment assessment be brought pursuant to  
            the chapter in the Code of Civil Procedure related to  
            "Validating Proceedings."

           EXISTING LAW :

          1)Provides, under the WRD Act, for the formation of a water  
            replenishment district and grants authority to a water  
            replenishment district relating to the replenishment,  
            protection, and preservation of groundwater supplies within  
            that district.

          2)Requires, if the Board of WRD (the Board) determines that a  
            replenishment assessment shall be levied upon the production  
            of groundwater from groundwater supplies within the district  
            during the ensuing fiscal year immediately following the  
            making of that determination, the Board to levy a  
            replenishment assessment on the production of groundwater from  








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            the groundwater supplies within the district during the fiscal  
            year commencing on July 1st next.

          3)Specifies that the replenishment assessment shall be fixed by  
            the Board at a uniform rate per acre-foot of groundwater so  
            produced.

          4)Requires the producers of the groundwater to pay the  
            replenishment assessment to WRD at the times and in the manner  
            provided.

          5)Provides for validating proceedings in the Code of Civil  
            Procedure.

           FISCAL EFFECT  :  None

           COMMENTS  :   

          1)Purpose of this bill.  This bill establishes a 120-day period  
            by which actions challenging the replenishment assessment must  
            be brought.  The 120-day period would begin on the date upon  
            which the Board made the determination to impose the  
            replenishment assessment.  The bill is sponsored by WRD.

          2)Background.  WRD, which was established by voters in Los  
            Angeles County in 1959, is the state's only water  
            replenishment district. WRD was established while the Los  
            Angeles County court proceeded through adjudication of  
            groundwater rights in the Central Basin and West Coast Basin  
            aquifers.  The main function of WRD is to recharge water into  
            groundwater basins for later withdrawal by water purveyors,  
            and WRD has certain legal authorities to accomplish this  
            purpose.  WRD earns revenue by charging water replenishment  
            assessments to the agencies, utilities, and companies that  
            pump groundwater.  WRD also gets property tax revenues from  
            its share of the 1% property tax rate.  Funds are used to buy  
            surface water that then percolates into the groundwater basin.

          3)Author's statement.  According to the author, "The Water  
            Replenishment District Act does not specify a time period for  
            legal challenges to the replenishment assessment.  This bill  
            would establish a 120-day period by which actions challenging  
            the replenishment assessment must be brought; the 120-day  
            period would begin on the date upon which the board made the  








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            determination to impose the replenishment assessment.

            "The bill provides that any such challenge must be in the form  
            of validation action of a writ of mandamus.  The latter option  
            is provided as Code of Civil Procedure Section 860 is not  
            always allowed as a mechanism by which a person can seek  
            judicial invalidation of a public agency's action.  For  
            example, one line of case law holds that such a lawsuit is  
            available only in bonds and other similar financing  
            transactions.  Accordingly, a person challenging an agency's  
            actions will file a petition for writ of mandamus."

            The author also points to a number of statutes and case law  
            that recognize a short statute of limitations whereby a party  
            can challenge the adoption of a local agency public utility  
            tax, assessment, rate, fee or charge. This includes the  
            Mitigation Fee Act (contained in the Government Code),  
            Irrigation District Law, Municipal Water District Law, Water  
            Conservation District Law, and statutes regarding the  
            liability of public entities to pay for public utility capital  
            facilities fees.  The author notes, "The purpose of such a  
            short statute of limitations is to enhance the budgetary  
            stability of public utilities by promptly informing them of  
            any challenges to their ability to charge and collect fees."

          4)Related legislation.  SB 620 (Wright), Chapter 638, Statutes  
            of 2013, repealed a limitation on the expenditure of WRD's  
            annual reserve fund for a five-year period and requires WRD to  
            establish a budget advisory committee for purposes of  
            reviewing a replenishment assessment and WRDs annual operating  
            budget.  WRD would then be required to consult with that  
            advisory committee and would be required to maintain records  
            regarding the recommendations of the budget advisory committee  
            and the final decisions made by the Board of WRD.  Provisions  
            related the budget advisory committee become inoperative on  
            June 30, 2019, and are repealed as of January 1, 2020.  
             
             Provisions in SB 620 also increase the penalty that may be  
            imposed for the failure of the owner of a water-producing  
            facility to file certain reports.  Additionally, the bill  
            provides that the court shall direct that WRD or operator of a  
            water-producing facility be awarded the reasonable attorney's  
            fees and costs relating to a motion seeking injunctive relief  
            whenever WRD or operator of a water-producing facility  








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            prevails on a petition or complaint.  
            SB 620 was sponsored by WRD.

            AB 2189 (Garcia), currently pending in the Assembly, would  
            incorporate into the WRD Act the procedures and substantive  
            requirements of Proposition 218 of 1996.

          5)Arguments in support.  The sponsor argues that over 70% of the  
            revenue collected by WRD is expended in the fiscal year in  
            which the assessment is imposed to purchase or produce  
            replenishment water and that the lack of a statute of  
            limitations for legal challenges for the assessment  
            jeopardizes the financial security of WRD as well as the duty  
            to replenish groundwater basins that serve over 10% of  
            California's population.

          6)Arguments in opposition.  None on file.

           
          Analysis Prepared by  :    Debbie Michel / L. GOV. / (916)  
          319-3958 


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