BILL ANALYSIS �
AB 2189
Page 1
Date of Hearing: May 14, 2014
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
AB 2189 (Garcia) - As Amended: April 22, 2014
Policy Committee: Local
GovernmentVote:5 - 1
Urgency: No State Mandated Local Program:
Yes Reimbursable: Yes
SUMMARY
This bill makes a number of changes to the Water Replenishment
District of Southern California's (District) Act and imposes a
Proposition 218-like process on the District as to how its
replenishment assessment is calculated and applied.
FISCAL EFFECT
1)This billed is keyed a reimbursable state mandate. Should the
Commission on State Mandates determine that this bill contains
reimbursable costs, they are likely to be as follows:
a) Significant one-time GF costs to the State in the range
of $5 million to $14 million to reimburse the District for
additional monitoring, data gathering, and model
development necessary to make the detailed rate
determinations required by this bill.
b) On-going GF costs of around $100,000 to reimburse the
District for annual data updates and model runs.
c) On-going unknown costs to reimburse the District for
administrative activities to meet the notice, hearing and
protest requirements.
1)There is pending litigation on the issue of whether
Proposition 218 applies to the District's replenishment
assessment. If the District loses in court, they will be
compelled to comply with Proposition 218 without state
reimbursement. This bill requires the state to pay for an
outcome (Proposition 218 compliance) that is likely to be
AB 2189
Page 2
compelled by the court anyway, with no requirement for state
reimbursement.
COMMENTS
1)Purpose . According to the author, "This bill conforms the
replenishment assessment statutory process to the
constitutional requirements of Proposition 218. It ensures
accountability and transparency of the replenishment
assessment. Water service providers and other pumpers will
now have meaningful review of the District's proposed expenses
and the ability to adequately represent ratepayers in that
process."
2)Pending litigation . The District opposes the bill because it
interferes with pending litigation regarding whether
Proposition 218 applies to the replenishment assessment.
According to the District, "The April 25, 2011 writ hearing
transcript on the question as to whether Proposition 218
applies to the replenishment assessment imposed under the Act
in the Water Code clearly states that while the trial court
judge believes Proposition 218 applies, he is not going to
issue a final order pending resolution of the damages phase of
the trial (scheduled for later this year). No final ruling
has been issued, the District is not compelled by a final
order to comply with Proposition 218, and the District has not
had an opportunity to appeal the tentative ruling."
3)Background . The Water Replenishment District of Southern
California was established by voters in Los Angeles County in
1959 and is the state's only water replenishment district. The
District was established while the Los Angeles County court
proceeded through adjudication of groundwater rights in the
Central Basin and West Coast Basin aquifers. The District's
main function is to recharge water into groundwater basins for
later withdrawal by water purveyors. The District earns
revenue by charging water replenishment assessments to the
agencies, utilities, and companies that pump groundwater. The
District also gets property tax revenues from its share of the
1% property tax rate. Funds are used to buy surface water
that then percolates into the groundwater basin.
4)Replenishment Assessment . The District has, for the last 50
years, imposed the replenishment assessment on a uniform
basis, which was negotiated among the affected parties based
AB 2189
Page 3
on geotechnical data that supports the existing practice and
is consistent with the Act. The Board is required to follow
specified procedures and processes when determining the amount
of a replenishment assessment, including a public hearing to
determine whether a replenishment assessment should be levied.
If, after the hearing, the Board determines a replenishment
assessment should be levied upon the production of groundwater
from groundwater supplies, the Board must fix the
replenishment assessment at a uniform rate per acre-foot of
groundwater produced. The current rate is $258 per acre-foot.
5)Related legislation .
a) AB 2259 (Ridley-Thomas), 2014, requires actions to
challenge a replenishment assessment for the Water
Replenishment District of Southern California to be
commenced within 120 days of the adoption of the resolution
or motion to levy the replenishment assessment. This bill
is pending in the Senate Judiciary Committee.
b) SB 620 (Wright), Chapter 638, Statues of 2013, repealed
a limitation on the expenditure of the District's annual
reserve fund for a five-year period and required the
District to establish a budget advisory committee for
purposes of reviewing the replenishment assessment and the
District's annual operating budget. The District is
required to consult with that advisory committee and to
maintain records regarding the recommendations of the
budget advisory committee and the final decisions made by
the Board of the District.
Analysis Prepared by : Jennifer Swenson / APPR. / (916)
319-2081