BILL ANALYSIS                                                                                                                                                                                                    




                     SENATE GOVERNANCE & FINANCE COMMITTEE
                            Senator Lois Wolk, Chair
          

          BILL NO:  SB 171                      HEARING:  5/8/13
          AUTHOR:  Hueso                        FISCAL:  No
          VERSION:  4/8/13                      TAX LEVY:  No
          CONSULTANT:  Austin                   

            COACHELLA VALLEY WATER DISTRICT'S PROPERTY RELATED FEES
          

           Allow the Coachella Valley Water District to levy property  
                                 related fees.


                           Background and Existing Law  

          Proposition 218 (1996) defined a property-related fee or  
          charge as any levy other than an ad valorem tax, a special  
          tax, or an assessment imposed by an agency on a parcel or a  
          person as an incident of property ownership, including a  
          user fee or charge for a property-related service.

          Before a local government can charge a new property-related  
          fee, or increase an existing fee, Proposition 218 requires  
          local officials to:
                 Identify the parcels to be charged.
                 Calculate the fee for each parcel.
                 Notify the parcels' owners in writing about the  
               fees and the hearing.
                 Hold a public hearing to consider and count  
               protests.
                 Abandon the fees if a majority of the parcels'  
               owners protest.

          New or increased property-related fees also require:
                 A majority-vote of the affected property owners; 
                 Two-thirds registered voter approval; or,
                 Weighted ballot approval by the affected property  
               owners.

          The election requirements don't apply to property-related  
          fees for sewer, water, or refuse collection services.  A  
          2002 appellate court decision in Howard Jarvis Taxpayers  
          Association v. City of Salinas found that a city's charges  
          on developed parcels to fund storm water management were  
          property-related fees, and were not covered by Proposition  




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          218's exemption for "sewer" or "water" services.  As a  
          result, storm water fees require a vote of property owners  
          or registered voters.

          Drainage from impervious surfaces produces urban runoff,  
          stormwater discharges, and water pollution.  To protect  
          rivers and oceans, the federal Clean Water Act requires the  
          states to reduce pollution from urban runoff.  Most  
          stormwater discharges require National Pollutant Discharge  
          Elimination (NPDES) permits.  In California, the State  
          Water Resources Control Board (SWRCB) and the Regional  
          Water Quality Control Boards (RWQCBs) are pushing counties,  
          cities, and special districts to reduce urban runoff and  
          stormwater discharges.  
           
          Formed in 1918, the Coachella Valley Water District (CVWD)  
          provides irrigation and drinking water, collects and  
          recycles wastewater, provides storm water protection,  
          replenishes the groundwater basin and promotes water  
          conservation to over 107,000 homes and businesses across  
          1,000 square miles mostly within the Coachella Valley in  
          Riverside County.  CVWD is governed by a five-member Board  
          of Directors elected to four-year terms by district voters.  
           Each director represents a division of the district, but  
          is elected at-large by all voters.  The Board of Directors  
          sets policy and represents the ratepayers.  The District  
          can levy special assessments to raise funds for  
          constructing, operating, and maintaining public works (SB  
          650, Kelley, 1993).  

          The Legislature has authorized counties, cities, sanitary  
          districts, county sanitation districts, sewer maintenance  
          districts, and other districts responsible for sanitary  
          sewers and sewerage systems to impose fees in connection  
          with storm drainage services and facilities (SB 682, Mello,  
          1991). In 2005, the Legislature authorized the Ventura  
          County Watershed Protection District to impose property  
          related fees to fund storm drainage services and facilities  
          (AB 554, Nava, 2005). In 2010, the Los Angeles County Flood  
          Control District was granted the same power (AB 2554,  
          Brownley, 2010).  Coachella Valley Water District officials  
          want the Legislature to grant them the same authority.


                                   Proposed Law  






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          Senate Bill 171 authorizes the Coachella Valley Water  
          District to impose a fee or charge to pay for constructing,  
          operating, improving and maintaining the District's public  
          works in compliance with Article XIII D of the California  
          Constitution.

          SB 171 clarifies that the Coachella Valley Water District's  
          benefit assessments must comply with the state laws that  
          implement Proposition 218, including majority vote  
          threshold requirements.

                               State Revenue Impact
           
          No estimate.


                                     Comments 

           1.Purpose of the bill  .  The Coachella Valley Water District  
            covers more than 
          1,000 square miles, and there is only one drainage system  
          in the Lower Coachella Valley that handles stormwater,  
          agricultural drainage, and now urban drainage.  The system  
          was originally constructed by the Bureau of Reclamation to  
          manage storm flows and agricultural drainage, but urban  
          development that is moving into the Lower Valley also uses  
          the system.  Operation and maintenance costs of the system  
          are currently paid by the farmers in the Lower Valley. As  
          farm areas are urbanized, the number of farmers has  
          decreased while urban drainage has driven costs up.  The  
          current fee structure has caused shortages in funding for  
          operations and maintenance and is unsustainable as  
          agricultural contributions continue to decline.   SB 171's  
          aim is to provide a tool to the Coachella Valley Water  
          District to assist in the continued operation and  
          maintenance of their drainage facilities.

          2.    Is a fee necessary  ?  The District already has the  
          authority to impose benefit assessments.  Under Proposition  
          218, benefit assessments need weighted majority property  
          owner approval.  Rather than expose the taxpayers to a new  
          type of fee, the Committee may wish to consider whether the  
          District should use its existing revenue tools.

          3.    Proposition 218 still intact  .  Proposition 218  
          protects property owners' interests by requiring a local  





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          government that wants to charge a property-related fee to  
          meet certain requirements.  SB 171 does not change that.   
          If the District uses 
          SB 171 to impose a property-related fee, it must meet the  
          constitutional requirements added by Proposition 218.  If  
          it can't, it can't impose the fee.



                         Support and Opposition  (5/2/13)

           Support  :  Coachella Valley Water District, Desert Valleys  
          Builders Association

           Opposition  : Unknown.