BILL ANALYSIS �
SENATE GOVERNANCE & FINANCE COMMITTEE
Senator Lois Wolk, Chair
BILL NO: AB 418 HEARING: 1/15/14
AUTHOR: Mullin FISCAL: No
VERSION: 1/6/14 TAX LEVY: No
CONSULTANT: Weinberger
SPECIAL TAXES AND FEES FOR
STORMWATER MANAGEMENT (URGENCY)
Allows the City/County Association of Governments of San
Mateo County to impose a special tax or property-related
fee to fund stormwater management programs.
Background and Existing Law
Drainage from impervious surfaces produces urban runoff,
stormwater discharges, and water pollution. To protect
rivers and oceans, the federal Clean Water Act requires
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.
Counties and cities can impose special taxes and benefit
assessments to fund some water pollution prevention and
stormwater management programs. Under Proposition 218
(1996), a special tax needs 2/3-voter approval and benefit
assessments need weighted majority property owner approval.
Property related fees are another potential source of
revenues for county and city stormwater compliance efforts.
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:
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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,
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 stormwater management were
property-related fees, and were not covered by Proposition
218's exemption for "sewer" or "water" services. As a
result, stormwater fees require a vote of property owners
or registered voters.
The Joint Exercise of Powers Act allows two or more public
agencies to use their powers in common if they sign a joint
powers agreement. Sometimes an agreement creates a new,
separate government called a joint powers authority (JPA).
Public officials have created more than 700 JPAs, which are
confederations of governments working together for common
purposes.
Formed in 1991, the City/County Association of Governments
of San Mateo County is a JPA with a membership comprised of
San Mateo County and the 20 cities within San Mateo County.
In addition to its primary role as the county's congestion
management agency, C/CAG performs several other roles,
including managing the Countywide Water Pollution
Prevention Program. To help address a shortfall in
countywide funding for pollution prevention and stormwater
management programs, C/CAG officials want the Legislature
to explicitly authorize their JPA to impose either a
special tax or property-related fee to fund stormwater
pollution prevention programs.
AB 418 -- 1/6/14 -- Page 3
Proposed Law
Assembly Bill 418 allows the City/County Association of
Governments of San Mateo County to impose, for the purposes
of implementing stormwater management programs consistent
with the agencies' joint powers agreement, either:
A special tax subject to the procedures and
requirements set forth in Article XIIIC of the
California Constitution, or
A property-related fee subject to the procedures
and requirements set forth in Article XIII D of the
California Constitution.
AB 418 allows the special tax or property-related fee, at
the option of the City/County Association of Governments of
San Mateo County, to be collected on the tax rolls of the
county in the same manner, by the same persons, subject to
the same penalties, and at the same time as, together with
and not separate from, county ad valorem property taxes.
The bill allows the county auditor to deduct, from what is
collected on the tax rolls, an amount required to reimburse
the county for its actual cost of collection.
State Revenue Impact
No estimate.
Comments
1. Purpose of the bill . Like many agencies throughout the
state, San Mateo County's local governments are struggling
to fund countywide stormwater compliance activities. San
Mateo County voters approved a vehicle registration fee to
provide some funding for stormwater pollution prevention
and other local agencies fund stormwater programs using
special assessments and, in some cases, General Fund
revenues. However, these funding sources are not keeping
pace with the increasing costs of regulatory compliance.
C/CAG estimates that San Mateo's countywide funding deficit
for providing compliant stormwater programs over the next
five years will exceed $15 million annually. Because C/CAG
already manages San Mateo's Countywide Water Pollution
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Prevention Program, and because its board includes an
elected official from San Mateo County and each city within
the county, C/CAG is viewed as the most appropriate entity
to raise additional funding for countywide programs.
However, C/CAG officials worry that they may lack the
authority to levy taxes or impose property related fees
because the Joint Exercise of Powers Act does not
explicitly extend that authority to JPAs. In response to
this statutory ambiguity, and the conflicting legal
interpretations that it invites, AB 418 provides C/CAG with
clear and explicit authority to raise revenues for
stormwater programs by levying special taxes or property
related fees.
2. Unintended consequences . Although C/CAG wants explicit
statutory authority to levy taxes and fees to avoid any
ambiguity about how the Joint Exercise of Powers Act can be
interpreted, AB 418 may have unintended consequences for
other JPAs that are already using the Act to raise revenues
through fees or assessments. One rule of legal
interpretation is that if a law mentions some things, by
implication the statute excludes other things (expressio
unius est exclusio alterius). By granting statutory tax
and fee authority exclusively to C/CAG, AB 418 may be
interpreted as denying that authority to all other JPAs
that don't have explicit authority in state law. To avoid
undermining the legal authority under which other JPAs can
raise revenues using powers that their members hold in
common, the Committee may wish to consider amending AB 418
to state that the bill is intended to clarify C/CAG's
powers under the Joint Exercise of Powers Act and should
not be interpreted to alter or diminish any powers that the
Act provides to joint powers authorities.
3. Solving a different problem . Designating a different
countywide agency in San Mateo County to fund stormwater
programs using revenue tools that are already available to
cities and counties does little to address the more
fundamental water pollution challenges confronting local
officials throughout California. Federal and state water
quality regulators want local officials to reduce urban
runoff and clean up stormwater. But constitutional limits
make it hard for local officials to raise the revenues
needed to pay for countywide stormwater facilities and
services. Besides notice, hearing, and protests,
property-related fees for stormwater and urban runoff
AB 418 -- 1/6/14 -- Page 5
purposes need elections. Special taxes require two-thirds
voter approval. AB 418 doesn't change that. If C/CAG
wants to impose a special tax or property-related fee, it
must meet the constitutional requirements. As a result, it
is unclear whether AB 418 actually makes it easier for San
Mateo officials to reduce their estimated $15 million
annual funding deficit for stormwater programs. Another
approach would be to reevaluate whether the Constitution
should impose a higher approval threshold on
property-related fees for stormwater services than it
imposes on water, sewer, and refuse collection fees.
Previous Legislatures have considered several proposals to
amend the constitution to eliminate this disparity,
including, most recently, SCA 18 (Liu, 2009).
4. Urgency . Regular statutes take effect on January 1
following their enactment; bills passed in 2014 take effect
on January 1, 2015. The California Constitution allows
bills with urgency clauses to take effect immediately if
they're needed for the public peace, health, and safety. AB
418 contains an urgency clause declaring that it is
necessary for its provisions to go into effect immediately
to provide for the protection the water of local creeks,
the San Francisco Bay, and the coastline for the use and
enjoyment of the citizens of San Mateo and aquatic life.
5. Special legislation . The California Constitution
prohibits special legislation when a general law can apply
(Article IV, �16). AB 418 contains findings and
declarations explaining the need for legislation that
applies only to the City/County Association of Governments
of San Mateo County.
6. Gut and amend . As introduced, AB 418 required the
State Auditor's website to include specified information
about the California Whistleblower Protection Act. In
August, 2013, AB 418 was amended to delete that language
and insert language relating to stormwater management taxes
and fees in San Mateo County. In September, 2013,
amendments again deleted the bill's contents and inserted
language relating to electric vehicles. The Senate
Governance & Finance Committee never heard any of those
versions of the bill. The January 6 amendments deleted AB
418's contents and inserted the current language relating
to taxes and fees for stormwater management in San Mateo
County.
AB 418 -- 1/6/14 -- Page 6
Assembly Actions
Not relevant to the January 6 version of the bill.
Support and Opposition (1/9/14)
Support : City/County Association of Governments of San
Mateo County, Cities of Brisbane and San Carlos.
Opposition : Unknown.