BILL ANALYSIS �
------------------------------------------------------------
|SENATE RULES COMMITTEE | AB 2567|
|Office of Senate Floor Analyses | |
|1020 N Street, Suite 524 | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
------------------------------------------------------------
THIRD READING
Bill No: AB 2567
Author: Carter (D)
Amended: 6/18/12 in Senate
Vote: 21
SENATE GOVERNANCE & FINANCE COMMITTEE : 8-0, 6/13/12
AYES: Wolk, Dutton, DeSaulnier, Fuller, Hernandez, Kehoe,
La Malfa, Liu
ASSEMBLY FLOOR : 74-1, 5/21/12 - See last page for vote
SUBJECT : Sewer collection agency: schedule of fees
SOURCE : Ross Valley Sanitary District
DIGEST : This bill allows an agency providing wastewater
service to adopt a schedule of fees or charges authorizing
automatic adjustments that pass through increases in
wholesale charges for water, sewage treatment, or
wastewater treatment or adjustments for inflation, as
specified.
ANALYSIS :
Existing law:
1. Requires, generally, pursuant to Articles XIIIC and
XIIID of the California Constitution (Cal. Const.), that
assessments, fees, and charges be submitted to property
owners for approval or rejection after the provision of
CONTINUED
AB 2567
Page
2
written notice and the holding of a public hearing.
2. Prescribes specific procedures and parameters for local
jurisdictions to comply with Cal. Const. Articles XIIIC
and XIIID.
3. Establishes notice, protest, and hearing procedures for
the levying of new or increased fees and charges by
local government agencies pursuant to Cal. Const.
Articles XIII C and XIIID.
4. Allows an agency providing water, sewer, or refuse
collection service to adopt a schedule of fees or
charges authorizing automatic adjustments that pass
through increases in wholesale charges for water or
adjustments for inflation, if it complies with all of
the following:
A. It adopts the schedule of fees or charges for a
property-related service for a period not to exceed
five years pursuant to existing law;
B. The schedule of fees or charges may include a
schedule of adjustments, including a clearly defined
formula for adjusting for inflation. Any inflation
adjustment to a fee or charge for a property-related
service shall not exceed the cost of providing that
service;
C. The schedule of fees or charges for an agency that
purchases wholesale water from a public agency may
provide for automatic adjustments that pass through
the adopted increases or decreases in the wholesale
charges for water established by the other agency;
and,
D. Notice of any adjustment pursuant to the schedule
shall be given pursuant to existing law, not less
than 30 days before the effective date of the
adjustment.
This bill allows an agency providing wastewater service to
adopt a schedule of fees or charges authorizing automatic
adjustments that pass through increases in wholesale
AB 2567
Page
3
charges for water, sewage treatment, or wastewater
treatment or adjustments for inflation, if it complies with
all of the following:
1. It adopts the schedule of fees or charges for a
property-related service for a period not to exceed five
years pursuant to the Proposition 218 Omnibus
Implementation Act.
2. The schedule of fees or charges may include a schedule
of adjustments, including a clearly defined formula for
adjustment for inflation.
3. The schedule of fees or charges for an agency that
purchases wholesale water, sewage treatment, or
wastewater treatment from a public agency may provide
for automatic adjustments that pass through the adopted
increases or decreases in the wholesale charges for
water, sewage treatment, or wastewater treatment
established by the other agency.
4. Notice of any adjustment pursuant to the schedule shall
be given pursuant to the Proposition 218 Omnibus
Implementation Act not less than 30 days before the
effective date of the adjustment.
Comments
In a unanimous decision, the California Supreme Court held
in Bighorn-Desert View Water Agency v. Verjil (2006) 39
Cal. 4th 205 that charges for on-going water delivery are
subject to Proposition 218 restrictions. Given this
decision public agencies are now required to provide notice
to customers and property owners regarding a proposed
increase of an existing fee or charge for a
property-related service being provided to a parcel.
Customers and property owners are then given an opportunity
to protest the proposed increase. AB 1260 (Caballero),
Chapter 280, Statutes of 2007, clarified the noticing and
protest requirements for property-related services.
However, some local agencies questioned whether or not it
was legal for them to create a schedule of fees or charges
for a property-related service since customers or property
owners would only be able to protest at the initial
AB 2567
Page
4
adoption of the schedule and not at any of the scheduled
increases.
AB 3030 (Brownley), Chapter 611, Statutes of 2008,
authorized an agency providing water, sewer, or refuse
collection service to adopt a schedule of fees or charges
for a property-related service for a period of up to five
years. That bill provided public agencies the opportunity
to plan long term and to save money by not requiring the
costly noticing requirement every time the cost of service
rises. This was especially true for those public agencies
that receive water from a water wholesaler. Wholesale
water providers are able to increase the cost of water at
any point without noticing requirements because all of
their customers are public agencies. However, if a public
agency had to raise its rates due to the increased cost of
water from the wholesaler, the public agency had to provide
notice to each of its customers and hold a protest hearing
before it could increase rates.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 6/19/12)
Ross Valley Sanitary District (source)
Association of California Water Agencies
ASSEMBLY FLOOR : 74-1, 5/21/12
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Beall,
Bill Berryhill, Block, Blumenfield, Bonilla, Bradford,
Brownley, Buchanan, Butler, Charles Calderon, Campos,
Carter, Cedillo, Conway, Cook, Davis, Dickinson, Eng,
Feuer, Fong, Fuentes, Furutani, Beth Gaines, Galgiani,
Garrick, Gatto, Gordon, Gorell, Grove, Hagman, Halderman,
Hall, Harkey, Hayashi, Hill, Huber, Hueso, Jeffries,
Jones, Knight, Lara, Logue, Bonnie Lowenthal, Ma,
Mansoor, Mendoza, Miller, Mitchell, Monning, Morrell,
Nestande, Nielsen, Norby, Olsen, Pan, V. Manuel P�rez,
Portantino, Silva, Skinner, Smyth, Solorio, Swanson,
Torres, Valadao, Wagner, Wieckowski, Williams, Yamada,
John A. P�rez
NOES: Huffman
AB 2567
Page
5
NO VOTE RECORDED: Chesbro, Donnelly, Fletcher, Roger
Hern�ndez, Perea
AGB:k 6/19/12 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
**** END ****