BILL ANALYSIS Ó
AB 2403
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ASSEMBLY THIRD READING
AB 2403 (Rendon and Mullin)
As Amended April 10, 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 : Expands the definition of "water" in the Proposition 218
Omnibus Implementation Act. Specifically, this bill :
1)Makes changes to the Proposition 218 Omnibus Implementation Act of
1996 to add that the current definition of "water" includes, but
is not limited to, recycled water, and reclaimed stormwater for
the provision of water service.
2)Finds and declares that this act is declaratory of existing law,
including the decision of the Sixth District Court of Appeal in
Griffith v. Pajaro Valley Water Management Agency (2013) 220
Cal.App.4th 586 and Howard Jarvis Taxpayers Association v. City of
Salinas (2002) 98 Cal.App.4th 1351.
3)Makes other technical and conforming changes.
4)Finds and declares that the provisions of the Proposition 218
Omnibus Implementation Act shall be liberally construed to
effectuate its purposes of limiting local government revenue and
enhancing taxpayer consent.
EXISTING LAW :
1)Defines, for purposes of Article XIII C and Article XIII D of the
California Constitution and the Proposition 218 Omnibus
Implementation Act, "water" to mean "any system of public
improvement intended to provide for the production, storage,
supply, treatment, or distribution of water".
2)"Recycled water" means, pursuant to the Water Code, "water which,
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as a result of treatment of waste, is suitable for a direct
beneficial use or a controlled use that would not otherwise occur
and is therefore considered a valuable resource."
3)Provides notice, protest, hearing, and election procedures for the
levying of new or increased assessments or property-related fees
or charges by local government agencies pursuant to Proposition
218.
FISCAL EFFECT : None
COMMENTS :
1)Current law and purpose of this bill. Under the Proposition 218
Omnibus Implementation Act, current law defines "water" to mean
"any system of public improvement intended to provide for the
production, storage, supply, treatment, or distribution of water."
This bill makes changes to that definition to add "including, but
not limited to, recycled water and reclaimed stormwater for the
provision of water service." This bill is author-sponsored.
2)Author's statement. According to the author, "This bill would put
the new Griffith decision into statute and allow public agencies
to apply the simpler protest process to their approval of
stormwater management fees, where the management programs address
both water supply and water quality. Specifically, the bill
clarifies the statutory definition of 'water' to include recycled
water and stormwater intended for water supply.
"In 2002, the [Sixth District] Court of Appeal interpreted this
exception for water/sewer rates to exclude costs for stormwater
drains. The service in the 2002 case emphasized flood control,
moving water to the ocean as quickly as possible. That program
had nothing to do with water supply. Those fees had developed to
address the water quality challenges presented by stormwater.
Stormwater management has changed since 2002. Since Proposition
218 passed in 1996, managing stormwater has become more about
water supply, as agencies develop methods to 'capture' stormwater,
clean it, and recharge groundwater aquifers for water supply. In
2013, the Court of Appeals again considered stormwater in a
Proposition 218 context, for a program that charged fees for
groundwater recharge, including stormwater capture.
"This bill offers one alternative to address the evolving nature
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of California's stormwater management programs, especially the
growing development of 'stormwater recapture' programs for
recharging groundwater aquifers."
3)Proposition 218 Omnibus Implementation Act. Proposition 218
Omnibus Implementation Act distinguishes among taxes, assessments
and fees for property-related revenues, and requires certain
actions before such revenues may be collected. Counties and other
local agencies with police powers may impose any one of these
options on property owners, after completing the Proposition 218
Omnibus Implementation Act process. Special districts created by
statute, however, must have specific authority for each of these
revenue sources.
The California Constitution defines a fee (or charge) as any levy
other than an ad valorem tax, special tax, or assessment that is
imposed by a local government on a parcel or on a person as an
incident of property ownership, including a user fee for a
property-related service. The fee imposed on any parcel or person
cannot exceed the proportional cost of the service that is
attributable to the parcel. Prior to imposing or increasing a
property-related fee, the local government is required to identify
the parcels, mail a written notice to all the property owners
subject to the fee detailing the amount of the fee, the reason for
the fee, and the date, time, and location of a public hearing on
the proposed fee. No sooner than 45 days after mailing the notice
to property owners, the agency must conduct a public hearing on
the proposed fee. If a majority of owners of the identified
parcels provide written protests against the fee, it cannot be
imposed or increased by the agency.
Additionally, Article XIII D Section 6 subdivision (c) of the
California Constitution, provides election requirements, "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."
The election for the fee is required to be conducted no less than
45 days following the public hearing.
The definition of "water" under the Proposition 218 Omnibus
Implementation Act is significant because the election
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requirements are on fees for services other than water, sewer, and
trash services.
4)Griffith v. Pajaro Valley Water Management Agency. Prior to the
appellate decision in Griffith v. Pajaro Valley Water Management
Agency, the issue of whether a charge for groundwater augmentation
was considered a water service and therefore exempt from the
election requirements was contested. Under Griffith the court
relied on the definition of "water" in Proposition 218 Omnibus
Implementation Act narrowly construing an earlier decision in
Howard Jarvis Taxpayers Association v. City of Salinas, which did
not apply the Act's definitions to a storm water charge dispute.
The Griffith decision found that a groundwater augmentation charge
is a fee for "water service".
According to the Griffith decision, "Moreover, the Legislature has
endorsed the view that water service means more than just
supplying water. The Proposition 218 Omnibus Implementation Act,
enacted specifically to construe Proposition 218 Omnibus
Implementation Act, defines 'water' as 'any systems of public
improvements intended to provide for the production, storage,
supply, treatment, or distribution of water'. Thus, the entity
who produces, stores, supplies, treats, or distributes water
necessarily provides water service. Defendant's statutory mandate
to purchase, capture, store, and distribute supplemental water
therefore describes water service." The Court made several other
decisions regarding Proposition 218 Omnibus Implementation Act,
however, the portions of the case that discuss "water service" are
especially pertinent to this bill.
5)Policy considerations. This bill does not directly insert
language from the Griffith decision into the definition of "water"
in the Proposition 218 Omnibus Implementation Act. The
Legislature may wish to consider if the changes made by this bill
to the definition of water lend clarity to the issue. For
example, it is not entirely clear what "recycled water and
reclaimed water for the provision of water service" actually is.
The Legislature may wish to consider following the appellate
decision in Griffith which has provided more guidance on several
issues under Proposition 218 Omnibus Implementation Act's
provisions regarding water, sewer, trash, and other
property-related fees if it is helpful for the Legislature to
amend the definition of "water." The Legislature may wish to
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consider if it is the best policy to let stakeholders continue to
rely on the court's decision in light of the clarity provided by
Griffith.
6)Arguments in support. Supporters argue that while California's
drought and efforts to provide a continued, safe, reliable supply
of water presents many challenges, that the clarifying language in
this bill provides an opportunity to remove any confusion that may
exist and will enable all of our communities to get one step
closer to attaining a sustainable water future.
7)Arguments in opposition. None on file.
Analysis Prepared by : Misa Yokoi-Shelton / L. GOV. / (916)
319-3958 FN:
0003378