BILL ANALYSIS �
SENATE JUDICIARY COMMITTEE
Senator Hannah-Beth Jackson, Chair
2013-2014 Regular Session
AB 2259 (Ridley-Thomas)
As Amended May 21, 2014
Hearing Date: June 10, 2014
Fiscal: No
Urgency: No
TH
SUBJECT
Water Replenishment: Assessments
DESCRIPTION
This bill would create a 120-day statute of limitation for
challenging the adoption of a replenishment assessment by a
water replenishment district.
This bill would also specify that an action challenging the
adoption of a replenishment assessment shall be brought as a
validation action or as a writ of review, mandate, or
prohibition.
BACKGROUND
The Water Replenishment District Act ("Act") (Wat. Code Sec.
60000 et seq.) provides for the formation of water replenishment
districts and grants certain authority to a water replenishment
district relating to the replenishment, protection, and
preservation of ground water supplies within that district. In
general, the Act requires the board of directors of a water
replenishment district to set water replenishment assessments to
purchase replenishment water or to remove contaminants from the
ground water supplies of the district, and requires the water
replenishment assessment to be fixed at a uniform rate per
acre-foot of ground water produced within the district.
Replenishment assessments are assessed against the operators of
all water-producing facilities in a water replenishment
district. To date, only one water replenishment district has
been formed in California - the Water Replenishment District of
Southern California (WRD).
(more)
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In recent years, WRD has been involved in litigation with a
group of cities within its jurisdiction over whether the
District, when imposing replenishment assessments, complied with
the constitutional requirements established by Proposition 218
(1996). Among other things, Proposition 218 established new
procedural requirements for special districts and other local
governments to levy assessments and impose new, or increase
existing, property-related fees and charges. To date, these
suits have not been resolved.
This bill would amend the Water Replenishment District Act to
require any judicial action or proceeding challenging a
resolution or motion levying a replenishment assessment to be
brought within 120 days following the adoption of the resolution
or motion. This bill would also specify that a judicial action
or proceeding brought within the limitation period shall be
brought as a validation action or as a writ of review, mandate,
or prohibition.
CHANGES TO EXISTING LAW
Existing law , the Water Replenishment District Act, provides
that a water replenishment district may do any act necessary to
replenish the ground water of said district. (Wat. Code Sec.
60220.)
Existing law provides that a water replenishment district may
take any action necessary to protect or prevent interference
with water, the quality thereof, or water rights of persons or
property within the district, as specified, and for the purposes
of replenishing the ground water supplies within the district, a
district may do any act in order to put to beneficial use any
water under its control or management. (Wat. Code Secs. 60222,
60223.)
Existing law provides that if a water replenishment district
board determines that a replenishment assessment shall be levied
upon the production of ground water from ground water supplies
within the district during the ensuing fiscal year, immediately
following the making of that determination the board shall levy
a replenishment assessment on the production of ground water
from the ground water supplies within the district during the
fiscal year commencing on July 1st next, and the replenishment
assessment shall be fixed by the board at a uniform rate per
acre-foot of ground water so produced. (Wat. Code Sec. 60317.)
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Existing law provides that notice of the levying of a
replenishment assessment shall be given to the operators of all
water-producing facilities in the district, and all assessments
so levied are due and payable to the district by each producer
in quarterly installments, computed based upon the production in
acre-feet of ground water so produced from such water-producing
facility. (Wat. Code Secs. 60325, 60327.)
This bill would provide that a judicial action or proceeding to
attack, review, set aside, void, or annul a resolution or motion
levying a replenishment assessment shall be commenced within 120
days following the adoption of the resolution or motion by the
water replenishment district board.
This bill would specify that an action under the above provision
shall be brought as a validation action pursuant to Section 680
et seq., of the Code of Civil Procedure, or as a writ of review,
mandate, or prohibition pursuant to Section 1067 et seq., of the
Code of Civil Procedure.
COMMENT
1. Stated need for the bill
The author writes:
The Water Replenishment District Act . . . authorizes a water
replenishment district to impose an assessment on the
production of ground water for purposes of purchasing or
providing water to replenish the ground water basin,
remediation of ground water contamination and the cost of
capital improvement projects. . . . [The Act] authorizes a
district to levy a replenishment assessment on the production
of ground water from the ground water supplies within the
district and requires producers of that ground water to pay
the replenishment assessment to the district.
The Water Replenishment District Act does not specify a time
period for legal challenges to the replenishment assessment. .
. . This legislative proposal would establish a 120-day period
by which actions challenging the replenishment assessment must
be brought; the 120-day period would begin on the date upon
which the board made the determination to impose the
replenishment assessment.
2. Statute of Limitation
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Statutes of limitations are a fundamental element of California
law. By limiting the time period within which a party can bring
a cause of action against another, statutes of limitations
provide finality to disputes that otherwise might never end.
Without statutes of limitations, ancient wrongs committed while
someone is young might become the subject of litigation years
later in their old age. Statutes of limitations "are designed
to promote justice by preventing surprises through the revival
of claims that have been allowed to slumber until evidence has
been lost, memories have faded, and witnesses have disappeared.
The theory is that even if one has a just claim it is unjust not
to put the adversary on notice to defend within the period of
limitation and that the right to be free of stale claims in time
comes to prevail over the right to prosecute them." (Order of
R. Telegraphers v. Railway Express Agency, Inc. (1944), 321 U.S.
342, 348-349.)
Additionally, statutes of limitations are occasionally imposed
to accommodate the planning requirements of financially
constrained local agencies. California courts have observed
that, depending on the situation, "a relatively short statute of
limitations" may be necessary "so that local agencies will be
promptly informed of any challenges to their ability to collect
fees and spend the revenues thereby generated." (San Marcos
Water Dist. v. San Marcos Unified Sch. Dist. (Cal.App.4th Dist.
1987), 190 Cal.App.3d 1083, 1085.)
This bill would impose a relatively short statute of limitation
for parties to challenge the adoption of a replenishment
assessment by a water replenishment district, requiring parties
to initiate suit within 120 days of the adoption of a resolution
or motion levying the replenishment assessment. Staff notes
that this limitation period would be one of the shortest in
California law. Typically, claims against governmental entities
are subject to a 180-day statute of limitations. (See e.g. Gov.
Code Sec. 911.2 ["A claim relating to a cause of action for
death or for injury to person or to personal property or growing
crops shall be presented . . . not later than six months after
the accrual of the cause of action."].) Occasionally, statutes
of limitations for claims against the government are even
shorter, but the event triggering the commencement of the
limitations period is offset from the event triggering the claim
itself. (See e.g. Wat. Code Sec. 43850 [providing that no
action shall be brought or maintained before any court attacking
any assessment of any district unless it is commenced within 60
days of the date upon which the assessment roll is filed with
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the county treasurer].) This bill would implement a statute of
limitation period shorter than 6 months without offsetting the
point at which the statute begins to run.
The City of Cerritos, writing in opposition, suggests that the
120-day limitation period proposed may not allow public agencies
sufficient time "to go through their own extensive process to
evaluate whether to file a lawsuit." To ensure that litigants
have sufficient time to fairly present their claims to a
reviewing court, the Committee may wish to consider the
following amendment to extend the statute of limitation from 120
to 180 days:
Suggested Amendment :
On page 2, line 25, strike "120" and insert "180"
3. Form of Action
Typically, an action to set aside an agency decision, such as
the levying of an assessment, takes the form of a writ of
mandate. Should a plaintiff prevail in such an action, the
reviewing court issues a writ directing the agency to correct
whatever deficiency the court found, and the agency, having
corrected the problem, issues its return back to the court.
In addition to a writ of mandate, this bill would also allow a
litigant to proceed with a validation action to challenge the
adoption of a replenishment assessment. Unlike a writ of
mandate, a validation action can only be maintained if
specifically authorized by statute. (See Bonander v. Town of
Tiburon (Cal. 2009), 46 Cal.4th 646, 656 ["This procedure, which
the Legislature codified as Code of Civil Procedure sections 860
through 870, does not, in itself, authorize any validation
actions; rather, it establishes a uniform system that other
statutory schemes must activate by reference."].) The Water
Replenishment District Act does not presently authorize
litigants to challenge the adoption of replenishment assessments
through use of a validation action, so the changes proposed in
this bill would substantively alter the forms of procedure
available to litigants seeking to challenge these assessments.
Generally, a validation action permits a public agency to
initiate in court an action to "validate" or review the validity
of an action it has taken. This type of action permits a party
to initiate a "proceeding in rem brought against all persons
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interested in a specified matter." California Statewide
Communities Development Authority v. All Persons Interested etc.
(Cal. 2007), 40 Cal.4th 788, 795. According to the California
Supreme Court:
The judgment in a proceeding brought under the general
validation procedure is binding and conclusive against the
agency and against all other persons. Because the proceeding
is in the nature of an action against the entire world,
jurisdiction of all interested parties may be had by newspaper
publication of summons and such other notice as the court may
order. More importantly, the general validation procedure is
broad enough to include actions to invalidate public agency
matters (sometimes called reverse validation actions). Code
of Civil Procedure section 863 permits any interested person
to bring an action to determine the validity of the matter,
and the phrase any interested person might of course include a
party contesting the matter in question. (Bonander v. Town of
Tiburon, 46 Cal.4th 646, 656 (Cal. 2009) [internal citations
and quotation marks omitted].)
Because a validation action is brought "against the entire
world," parties who fail to contest the legality or validity of
the challenged action within the context of the validation
proceeding may be barred from bringing future claims based on
that same challenged action.
The City of Cerritos, writing in opposition, notes that a water
replenishment district may be able to shorten a statute of
limitation pertaining to challenges levied against replenishment
assessments by initiating a validation action shortly after a
replenishment assessment is adopted. Code of Civil Procedure
Section 860 permits a public agency to initiate a validation
proceeding, when authorized by statute, within 60 days of taking
the subject act. If a water replenishment district were to
immediately initiate a validation action and publish the
required summons, it could, within four weeks, theoretically
preclude any party who has not filed a written answer to the
validation action complaint from bringing any future claim
challenging the subject act.
To ensure that litigants challenging a water replenishment
district's acts have sufficient time to fairly present their
claims to a reviewing court, the Committee may wish to consider
the following amendment to strike the ability to bring a
validation action:
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Suggested Amendment :
On page 2, line 28 through 29, strike: "Chapter 9 (commencing
with Section 860) of Title 10 of Part 2 of, or"
On page 2, line 30, strike "of," and insert "of"
4. Retroactivity
Opponents to this bill note that WRD is in active litigation
regarding whether past replenishment assessments it has levied
were assessed in compliance with Proposition 218. They argue
that, "given the potential implications AB 2259 may have on
ongoing litigation, we believe a clarification that [this bill]
shall apply only prospectively is necessary."
"Generally, statutes operate prospectively only." (McClung v.
Employment Dev. Dept. (2004) 34 Cal.4th 467, 475.)
[T]he presumption against retroactive legislation is deeply
rooted in our jurisprudence, and embodies a legal doctrine
centuries older than our Republic. Elementary considerations
of fairness dictate that individuals should have an
opportunity to know what the law is and to conform their
conduct accordingly; settled expectations should not be
lightly disrupted. For that reason, the principle that the
legal effect of conduct should ordinarily be assessed under
the law that existed when the conduct took place has timeless
and universal appeal. (Landgraf v. USI Film Products (1994)
511 U.S. 244, 265 (internal citations omitted).)
"A statute does not operate [retroactively] merely because it is
applied in a case arising from conduct antedating the statute's
enactment, or upsets expectations based in prior law. Rather,
the court must ask whether the new provision attaches new legal
consequences to events completed before its enactment."
(Landgraf, 511 U.S. at 269-70 (internal citations omitted).)
"This is not to say," however, "that a statute may never apply
retroactively." (McClung, 34 Cal.4th at 475.) In California,
"[a] statute's retroactivity is, in the first instance, a policy
determination for the Legislature and one to which courts defer
absent some constitutional objection to retroactivity." (Id.,
at 475.) Under California law, "a statute may be applied
retroactively only if it contains express language of
retroactivity or if other sources provide a clear and
unavoidable implication that the Legislature intended
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retroactive application." (Myers v. Philip Morris Companies,
Inc. (2002) 28 Cal.4th 828, 844.)
Neither the author nor the sponsor of AB 2259 have expressed an
intent that this bill should apply retroactively to ongoing
litigation or past replenishment assessments. Nor is there a
strong public policy rationale suggesting that retroactive
application ought to apply in this case. To clarify that this
bill will not have any retroactive effect, the author offers the
following amendments:
Author's Amendment :
On page 2, line 23, following "motion" insert: "made on or
after January 1, 2015"
On page 2, line 27, following "person" insert: "brought on or
after January 1, 2015"
Support : Association of California Water Agencies
Opposition : City of Cerritos
HISTORY
Source : Water Replenishment District of Southern California
Related Pending Legislation : AB 2189 (Garcia) would make a
number of changes to the Water Replenishment District Act and
imposes a Proposition 218-like process on water replenishment
districts concerning how replenishment assessments are
calculated and levied. This bill was held under submission in
the Assembly Committee on Appropriations.
Prior Legislation :
SB 620 (Wright, Ch. 638, Stats. 2013) repealed a limitation on
the expenditure of a water replenishment district's annual
reserve fund for a five-year period, and requires districts to
establish budget advisory committees for the purpose of
reviewing replenishment assessments and a district's annual
operating budget. This bill also requires a court to award
reasonable attorney's fees and costs relating to a motion
seeking injunctive relief against a defendant operator of a
water-producing facility that has not registered with a district
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or that is delinquent in the payment of a replenishment
assessment.
AB 954 (Calderon, 2011) would have required water replenishment
districts to impose water replenishment assessments on the
production of ground water from each ground water basin based on
the actual cost of replenishing the ground water basin, removing
contaminants from the ground water basin, and the administrative
costs of the district. This bill would have also required
replenishment assessments to be charged at a fixed uniform rate.
This bill died in the Assembly Committee on Local Government.
SB 1412 (Calderon, 2010) was substantially similar to AB 954
(Calderon, 2011). This bill died in the Senate Committee on
Natural Resources and Water.
SB 2016 (Green, Ch. 389, Stats. 1990) authorized water
replenishment districts to take any action necessary or
desirable to prevent contaminants from entering a district's
ground water supplies, to remove contaminants, and to determine
the existence and location of contaminants and persons
responsible. This bill also authorized districts to raise funds
to remove contaminants from ground water supplies, as specified.
Prior Vote :
Assembly Floor (Ayes 75, Noes 0)
Assembly Committee on Local Government (Ayes 9, Noes 0)
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