BILL NUMBER: SB 1298 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY AUGUST 1, 2016
AMENDED IN ASSEMBLY JUNE 13, 2016
INTRODUCED BY Senator Hertzberg
FEBRUARY 19, 2016
An act to amend Sections Section
53750 and 53755 of, and to add Section 53756.5 to,
of the Government Code, relating to local government
finance.
LEGISLATIVE COUNSEL'S DIGEST
SB 1298, as amended, Hertzberg. Local government: fees and
charges.
Articles XIII C and XIII D of the California Constitution
generally require that assessments, fees, and charges be submitted to
property owners for approval or rejection after the provision of
written notice and the holding of a public hearing. Existing law, the
Proposition 218 Omnibus Implementation Act, prescribes specific
procedures and parameters for local jurisdictions to comply with
Articles XIII C and XIII D of the California Constitution and defines
terms for these purposes.
Existing statutory law establishes notice, protest, and hearing
procedures for the levying of new or increased fees or charges by
local government agencies pursuant to Article XIII D of the
California Constitution.
This bill would define the terms "proportional cost of the service
attributable to the parcel" and "sewer service," and would
recast the definition of "water" to mean "water service,"
service " for these purposes. The bill
would additionally specify that one vote per parcel may be counted
in determining whether a proposed fee or charge is approved by a
majority vote, as specified.
The bill would additionally authorize an agency to impose a
conservation and efficiency fee or charge for water service, in
addition to any property-related fee or charge imposed for water
service, to achieve specified conservation and efficiency purposes.
The bill would provide that a conservation and efficiency fee or
charge may raise revenue as an incident to its regulatory purpose and
would require the agency to use any revenue to pay the cost of
providing the service or for lowering the rate or rate structure of
the associated property-related fee or charge. The bill would require
a conservation and efficiency fee or charge to bear a fair or
reasonable relationship to the burdens imposed on the local agency or
the benefits received from the water service based on the amount of
water used by each customer or class of customers, as specified.
Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The Legislature finds and declares all of the
following:
(a) The ongoing, historic drought has made clear that California
must invest in a 21st century water management system capable of
effectively meeting the economic, social, and environmental needs of
the state.
(b) Sufficient and reliable funding to pay for local water
projects is necessary to improve the state's water infrastructure.
(c) Proposition 218, approved in 1996, was meant to improve
transparency and accountability of local government fees. Some court
interpretations of the law have constrained three
important tools that local governments need to manage water
supplies and supplies, address water
pollution: pollution and provide stormwater
management, rates to encourage water conservation, and
assistance for low-income Californians. management.
(d) Stormwater is a key source of local water supply, and careful
management is necessary to reduce pollution. But a court decision has
required stormwater and flood control programs to meet a higher
standard than other water-related services to raise capital,
preventing many important projects from being built.
(e) One important way to encourage water conservation is to charge
higher rates to customers using excessive amounts of water. This is
a common practice throughout the world and a requirement for
California's private water agencies. Unfortunately, a recent court
decision has made it difficult and confusing for local agencies to
implement this necessary tool.
(f) The United States Environmental Protection Agency has found
that water rates exceeding 2 percent of monthly income are
unaffordable, which is the case for millions of Californians. Private
water and energy utilities are required to offer programs to make
rates affordable to low-income households. Local governments in
California, however, are concerned that recent court decisions
regarding Proposition 218 could prohibit them from providing the same
service.
(g)
(e) This act is intended to provide guidance to local
agencies and courts on the implementation of Articles XIII C and XIII
D of the California Constitution and shall not be construed to amend
those articles.
SEC. 2. Section 53750 of the Government Code is amended to read:
53750. For purposes of Article XIII C and Article XIII D of the
California Constitution and this article:
(a) "Agency" means any local government as defined in subdivision
(b) of Section 1 of Article XIII C of the California Constitution.
(b) "Assessment" means any levy or charge by an agency upon real
property that is based upon the special benefit conferred upon the
real property by a public improvement or service, that is imposed to
pay the capital cost of the public improvement, the maintenance and
operation expenses of the public improvement, or the cost of the
service being provided. "Assessment" includes, but is not limited to,
"special assessment," "benefit assessment," "maintenance assessment,"
and "special assessment tax."
(c) "District" means an area that is determined by an agency to
contain all of the parcels that will receive a special benefit from a
proposed public improvement or service.
(d) "Drainage system" means any system of public improvements that
is intended to provide for erosion control, for landslide abatement,
or for other types of water drainage.
(e) "Extended," when applied to an existing tax or fee or charge,
means a decision by an agency to extend the stated effective period
for the tax or fee or charge, including, but not limited to,
amendment or removal of a sunset provision or expiration date.
(f) "Flood control" means any system of public improvements that
is intended to protect property from overflow by water.
(g) "Identified parcel" means a parcel of real property that an
agency has identified as having a special benefit conferred upon it
and upon which a proposed assessment is to be imposed, or a parcel of
real property upon which a proposed property-related fee or charge
is proposed to be imposed.
(h) (1) "Increased," when applied to a tax, assessment, or
property-related fee or charge, means a decision by an agency that
does either of the following:
(A) Increases any applicable rate used to calculate the tax,
assessment, fee, or charge.
(B) Revises the methodology by which the tax, assessment, fee, or
charge is calculated, if that revision results in an increased amount
being levied on any person or parcel.
(2) A tax, fee, or charge is not deemed to be "increased" by an
agency action that does either or both of the following:
(A) Adjusts the amount of a tax, fee, or charge in accordance with
a schedule of adjustments, including a clearly defined formula for
inflation adjustment that was adopted by the agency prior to November
6, 1996.
(B) Implements or collects a previously approved tax, fee, or
charge, so long as the rate is not increased beyond the level
previously approved by the agency, and the methodology previously
approved by the agency is not revised so as to result in an increase
in the amount being levied on any person or parcel.
(3) A tax, assessment, fee, or charge is not deemed to be
"increased" in the case in which the actual payments from a person or
property are higher than would have resulted when the agency
approved the tax, assessment, fee, or charge, if those higher
payments are attributable to events other than an increased rate or
revised methodology, such as a change in the density, intensity, or
nature of the use of land.
(i) "Notice by mail" means any notice required by Article XIII C
or XIII D of the California Constitution that is accomplished through
a mailing, postage prepaid, deposited in the United States Postal
Service and is deemed given when so deposited. Notice by mail may be
included in any other mailing to the record owner that otherwise
complies with Article XIII C or XIII D of the California Constitution
and this article, including, but not limited to, the mailing of a
bill for the collection of an assessment or a property-related fee or
charge.
(j) "Proportional cost of the service attributable to the parcel,"
when applied to a fee or charge for water or sewer service, means
the share of the total cost of providing water or sewer service to
water or sewer users within the service area reasonably attributable
to the parcel. The total cost of providing water or sewer service
includes all costs of acquiring water and water rights, costs of
collecting, conveying, treating, and managing water and wastewater,
and costs of satisfying all regulatory requirements
lawfully imposed on water and sewer service providers, and
costs of providing communitywide water service in an equitable
manner, including the cost of lifeline water rates.
providers.
(k) "Record owner" means the owner of a parcel whose name and
address appears on the last equalized secured property tax assessment
roll, or in the case of any public entity, the State of California,
or the United States, means the representative of that public entity
at the address of that entity known to the agency.
(l) "Sewer service" means services provided by all real estate,
fixtures, and personal property owned, controlled, operated, or
managed in connection with or to facilitate sewage collection,
treatment, or disposition for sanitary or drainage purposes,
including lateral and connecting sewers, interceptors, trunk and
outfall lines, sanitary sewage treatment or disposal plants or works,
drains, conduits, outlets for surface or storm waters, and any and
all other works, property, or structures necessary or convenient for
the collection or disposal of sewage, industrial waste, or surface or
storm waters. "Sewer system" shall not include a sewer system that
merely collects sewage on the property of a single owner.
(m) "Registered professional engineer" means an engineer
registered pursuant to the Professional Engineers Act (Chapter 7
(commencing with Section 6700) of Division 3 of the Business and
Professions Code).
(n) "Vector control" means any system of public improvements or
services that is intended to provide for the surveillance,
prevention, abatement, and control of vectors as defined in
subdivision (k) of Section 2002 of the Health and Safety Code and a
pest as defined in Section 5006 of the Food and Agricultural Code.
(o) "Water service" "Water" means
services provided by any system of public
improvements intended to provide for the production, storage, supply,
treatment, or distribution of water from any source.
SEC. 3. Section 53755 of the Government Code is
amended to read:
53755. (a) (1) The notice required by paragraph (1) of
subdivision (a) of Section 6 of Article XIII D of the California
Constitution of a proposed increase of an existing fee or charge for
a property-related service being provided to a parcel may be given by
including it in the agency's regular billing statement for the fee
or charge or by any other mailing by the agency to the address to
which the agency customarily mails the billing statement for the fee
or charge.
(2) The notice required by paragraph (1) of subdivision (a) of
Section 6 of Article XIII D of the California Constitution of a
proposed new fee or charge may be given in the manner authorized for
notice of an increase of a fee or charge if the agency is currently
providing an existing property-related service to the address.
(3) If the agency desires to preserve any authority it may have to
record or enforce a lien on the parcel to which service is provided,
the agency shall also mail notice to the recordowner's address shown
on the last equalized assessment roll if that address is different
than the billing or service address.
(b) One written protest per parcel, filed by an owner or tenant of
the parcel, shall be counted in calculating a majority protest to a
proposed new or increased fee or charge subject to the requirements
of Section 6 of Article XIII D of the California Constitution.
(c) One vote per parcel, filed by an owner or tenant of the
parcel, shall be counted in determining whether a proposed fee or
charge is approved by a majority vote pursuant to subdivision (c) of
Section 6 of Article XIII D of the California Constitution.
(d) Any agency that bills, collects, and remits a fee or charge on
behalf of another agency may provide the notice required by Section
6 of Article XIII D of the California Constitution on behalf of the
other agency.
SEC. 4. Section 53756.5 is added to the
Government Code, to read:
53756.5. (a) The Legislature finds and declares all of the
following:
(1) Water service may be used for purposes that are indispensable
to the use of the property, including, but not limited to, cooking,
sanitation, and reasonable irrigation.
(2) Water service may also be used for purposes that are not
indispensable to the use of property, including, but not limited to,
excessive indoor use, unabated leakage, excessive irrigation, and
other activities that constitute an inefficient use of the water.
(3) The amount of water that is indispensable to the use of a
property may vary depending on the use to which the property is put,
local conditions, water shortages, environmental factors, and other
factors affecting water demand and supply availability.
(4) Local agencies should have the authority to determine the
amount of water that is indispensable for property use, given the
above conditions.
(5) Charges for water that is not indispensable for property use
are not imposed as an incident of property ownership and therefore
are not property-related charges as defined by Article XIII D of the
California Constitution.
(6) Charges for water that is not indispensable for property use
may be either specific benefits or specific government services under
Article XIII C of the California Constitution.
(7) Article XIII C of the California Constitution does not
identify the costs that may be associated with water service, define
"a fair or reasonable relationship" between the costs of the service
and the burdens or benefits associated with the service, or prescribe
a particular method for allocating the costs of providing
nonproperty-related water services or benefits.
(b) An agency may, in addition to any property-related fee or
charge imposed pursuant to Article XIII D of the California
Constitution and this article for water service, impose or increase a
separate and distinct conservation and efficiency fee or charge for
the same service to create price signals to encourage conservation
and increased efficiency in the use of water. A conservation and
efficiency fee or charge imposed pursuant to this section may be
imposed on water that is not indispensable for property use. A
conservation and efficiency fee or charge imposed pursuant to this
section may be imposed for purposes including, but not limited to:
(1) Deterrence of excess consumption of water, as determined by
the local agency.
(2) Encouragement of the adoption of technologies that support
more efficient use of water.
(3) To encourage compliance with the goals of avoiding waste and
unreasonable use of water pursuant to Section 2 of Article X of the
California Constitution.
(c) (1) A conservation and efficiency fee or charge may raise
revenue as an incident to its intended purpose. Any revenue produced
shall only be used to pay the costs of providing water service, to
lower the rate or rate structure of the associated property-related
fee or charge for water service, or to provide lower rates or rebates
for disadvantaged households. The total amount collected from the
property-related fee or charge for water service and the conservation
and efficiency fee or charge shall not exceed the reasonable costs
incurred by the agency to provide the water service.
(2) The rate of a conservation and efficiency fee or charge shall
bear a fair or reasonable relationship to the burden imposed on the
local agency or the benefits received from the water service based on
the amount of water used by each customer or class of customers. The
agency may determine that the burden on, or the benefits derived
from, the provision of water service per unit of water used is
greater for customers who use relatively large amounts of water for
their type and size of real property. The agency may establish a rate
structure for a conservation and efficiency fee or charge intended
to encourage conservation and increased efficiency of water use in
order to bring the burdens of providing water service to customers or
classes of customers into reasonable balance. The charges may be
structured in a tiered, ascending, or other incremental manner. In
addition, the agency may determine that the fairness of the rate
structure is enhanced if it provides for lower rates for
disadvantaged households, also known as lifeline rates.
(d) Consideration and imposition or increase of a conservation and
efficiency fee or charge shall comply with the notice, hearing,
protest, and election requirements, if any, required by Article XIII
D of the California Constitution. However, the requirements of
paragraph (3) of subdivision (b) of Section 6 of Article XIII D shall
not apply to any conservation and efficiency fee or charge levied
pursuant to this section.
(e) (1) For the purposes of this section, "reasonable costs" of
the specific benefit or specific government service shall include,
but are not limited to, costs that will, directly or indirectly,
enable an agency to meet water demands, reduce water demands,
conserve potable water supplies, procure water supplies to provide
water that is not indispensable to the use of property, and provide
communitywide water service in an equitable manner, including
lifeline water rates. The determination of reasonable costs may
consider the relative income of the payer of the fee or charge.
(2) For the purposes of this section and Article XIII C of the
California Constitution, "fair or reasonable relationship" may
include a relationship consistent with principles of equity that hold
that more affluent individuals benefit more from public services,
including water service, than less affluent individuals receiving the
same service.
SEC. 5. The provisions of this act are
severable. If any provision of this act or its application is held
invalid, that invalidity shall not affect other provisions or
applications that can be given effect without the invalid provision
or application.