BILL ANALYSIS
SENATE LOCAL GOVERNMENT COMMITTEE
Senator Dave Cox, Chair
BILL NO: AB 2483 HEARING: 6/30/10
AUTHOR: Coto FISCAL: Yes
VERSION: 6/28/10 CONSULTANT: Detwiler
SANTA CLARA VALLEY WATER DISTRICT
Background and Existing Law
The Santa Clara Valley Water District operates under a 1951
special act, providing flood control and water services.
Over the last 50 years, the District's mission changed from
serving an agricultural base into an urban water agency.
In 1962, the District gained the ability to levy
groundwater charges in areas that benefit from the recharge
of underground water supplies or the distribution of
imported water to those areas. The owners of water
producing facilities pay the groundwater charges. The
District's Act spells out the procedures that it must
follow before levying the annual groundwater charges,
including a detailed annual report, public notices, and a
public hearing (SB 1x, Thompson, 1962).
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
on 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 one, 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.
Further, new or increased property-related fees require:
A majority-vote of the affected property owners;
or,
Two-thirds registered voter approval; or,
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Weighted ballot approval by the affected property
owners.
However, the election requirements don't apply to
property-related fees for sewer, water, or refuse
collection services.
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Proposed Law
I. Annual groundwater report . Before the Santa Clara
Valley Water District can impose groundwater charges, the
District must prepare a detailed written report about its
water supply activities. The annual report must include:
A financial analysis of the water utility system.
Information about present and future water
requirements, available water supply, and future
capital and maintenance and operating requirements.
A method to finance those requirements.
A recommendation regarding groundwater charges and
their rates.
Further, the annual report must also include:
The amount of groundwater produced and alternative
water sources.
The estimated costs for recharging each zone.
The estimated costs of mitigating the effects of
pumping.
Information regarding the benefits received in each
zone.
Assembly Bill 2483 requires the District's annual report to
include the groundwater monitoring information it
collected. For each zone, AB 2483 requires the report to
recommend whether a groundwater charge should:
Remain as is.
Be decreased.
Be increased.
Be newly imposed.
II. Levying groundwater charges . After publishing a
public notice in a general circulation newspaper and then
holding a public hearing to take evidence, the District's
board of directors can determine before July 1 of each year
whether to levy groundwater charges in any zone. The
District's board sets the charges, which must be computed
at fixed and uniform rates based on acre-feet for
agricultural water and water other than for agricultural
water. Different zones can have different rates.
Operators who extract groundwater above specified amounts
must pay proportional increases if the District's board
finds that drought and water shortage conditions require
increased charges. The increased charges must be directly
related to groundwater levels. The District's board must
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establish the rates each year in accordance with the
District's annual budget. The rate for agricultural water
can't be more than one-fourth of the rate for water other
than agricultural water.
Assembly Bill 2483 repeals the requirements for the
District's board to levy annual groundwater rates based on
the District's annual budget. Instead, AB 2483 allows the
District's board to impose or modify groundwater charges
based on the annual report and the findings and
determinations from the public hearing. The bill provides
that an approved groundwater charge remains in effect until
the District's board determines that it should be
eliminated, decreased, or increased. AB 2483 repeals the
requirement that the District's increased charges because
of drought and water shortage conditions must be directly
related to groundwater levels.
III. Water policies and programs . Assembly Bill 2483
allows the District to provide incentives to implement
urban water conservation measures. AB 2483 lets the
District require water conservation practices in certain
situations. The bill also adds language to the Act's
statement of legislative intent and adds seven more actions
to the District's listed powers.
Comments
1. That was then, this is now . Santa Clara County was a
very different place when the Legislature created the Santa
Clara Valley Water District's predecessor in 1951.
Agricultural practices, water policy, and land use patterns
have changed since 1962, when the District gained the
statutory ability to levy groundwater charges. The
District needs to modernize its special statute so that it
can serve its 21st Century customers. AB 2435 (Coto, 2006)
and AB 466 (Coto, 2009) started the modernization process
which AB 2483 continues. By allowing the District's board
to levy groundwater charges that last longer than just one
year, the bill creates economic certainty for those who use
the area's groundwater. By allowing groundwater charges to
remain in effect until changes are warranted, AB 2483 also
reduces the District's administrative costs.
2. Clarity, please . When the voters amended the
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California Constitution by passing Proposition 218 (1996),
they required local officials to follow new procedures for
levying special taxes, benefit assessments, and fees.
Legislators responded in 1997 by passing statutory
procedures to implement Proposition 218. More recent
legislation clarified the notice and protest requirements
for property related fees after the Desert Water Agency
decision (AB 1260, Caballero, 2007). The District's 1962
procedures for levying groundwater charges don't look like
those constitutional or statutory requirements; there's no
mailed notice to property owners, no procedure for counting
protests, and no majority-protest that stops new or
increased charges. Instead of tinkering with procedures
that are nearly a half-century old, the Committee may wish
to consider rewriting the process that the District's board
must follow when levying groundwater charges. Why not
repeal the District Act's current Sections 26.6 and 26.7
and simply require the District to comply with Article XIII
D of the California Constitution and its implementing
statutes?
3. What is it ? Is the District's groundwater charge a
property-related fee for water service? Proposition 218
requires new or increased property-related fees to get: (a)
a majority-vote of the affected property owners, (b)
two-thirds registered voter approval, or (c) weighted
ballot approval by the affected property owners. However,
those requirements don't apply to property-related fees for
sewer, water, or refuse collection services. The 1962
statute allows the District to levy groundwater charges for
the production of water in zones that benefit from the
District's activities to recharge groundwater supplies or
import water. In light of that established description,
the Committee may wish to consider amending AB 2483 to
statutorily declare that the District's groundwater charges
are property-related charges for water service. With that
statutory clarity, the District's board could set
groundwater charges by following public notice, hearing,
and protest procedures that comply with Proposition 218
(see Comment #2 above) without the need for annual
elections.
4. Pending litigation . On June 28, the Third District
Court of Appeals will hear oral arguments in a Proposition
218 case that challenges the North San Joaquin Water
Conservation District's groundwater charges. Later this
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summer, written briefs are due in the Sixth District Court
of Appeals in a case challenging the Santa Clara Valley
Water District's groundwater charges. Because legislative
changes are prospective, AB 2483 shouldn't affect either
pending appeal. The Committee may wish to consider whether
the Legislature should wait for the courts to interpret the
constitutional issues surrounding groundwater charges. Or
should the Legislature demonstrate its policy leadership
and amend the statutes. Is it wise to legislate while
others litigate?
5. Double-referred . Because AB 2483 affects the
District's water supply and conservation programs as well
as its procedures for levying groundwater charges, the
Senate Rules Committee referred the bill to two policy
committees. The Senate Natural Resources and Water
Committee hears AB 2483 on June 29. If the bill passes
that Committee, the Senate Local Government Committee will
hear the bill on June 30.
6. They asked, they'll pay . Legislative Counsel's Digest
notes that AB 2483 creates a new state-mandated local
program. The California Constitution requires the state to
reimburse local agencies for the costs of new state
mandates, except in certain circumstances. One
constitutionally permitted circumstance is when the local
agency asked for the mandate. AB 2483 properly disclaims
that state's reimbursement responsibility by noting that
the District asked for it.
Assembly Actions
Assembly Local Government Committee: 6-3
Assembly Water, Parks & Wildlife Committee: 9-3
Assembly Appropriations Committee: 12-5
Assembly Floor: 49-28
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Support and Opposition (6/24/10)
Support : Santa Clara Valley Water District, American
Federation of State, County and Municipal Employees,
Association of California Water Agencies, California
Special Districts Association, Professional and Technical
Engineers IFPTE Local 21, Sierra Club-California, Clean
Water Action, one individual.
Opposition : California Cattlemen's Association, California
Chamber of Commerce, California Farm Bureau Federation,
California Water Service Company, Great Oaks Water Company,
San Jose Water Company, Silicon Valley Taxpayers'
Association, Western Growers.