BILL ANALYSIS Ó AB 2259 Page 1 ASSEMBLY THIRD READING AB 2259 (Ridley-Thomas) As Amended April 1, 2014 Majority vote LOCAL GOVERNMENT 9-0 ----------------------------------------------------------------- |Ayes:|Achadjian, Levine, Alejo, | | | | |Bradford, Gordon, | | | | |Melendez, Mullin, Rendon, | | | | |Waldron | | | ----------------------------------------------------------------- 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 AB 2259 Page 2 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 AB 2259 Page 3 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 AB 2259 Page 4 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 FN: 0003168