BILL ANALYSIS �
AB 2403
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ASSEMBLY THIRD READING
AB 2403 (Rendon)
As Amended May 15, 2014
Majority vote
LOCAL GOVERNMENT 9-0
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|Ayes:|Achadjian, Levine, Alejo, | | |
| |Bradford, Gordon, | | |
| |Melendez, Mullin, Rendon, | | |
| |Waldron | | |
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SUMMARY : Expands the definition of "water" in the Proposition
218 Omnibus Implementation Act. Specifically, this bill :
1)Makes changes to the Proposition 218 Omnibus Implementation
Act of 1996 to add "from any source" to the current definition
of "water."
2)Finds and declares that this act is declaratory of existing
law, including the decision of the Sixth District Court of
Appeal in Griffith v. Pajaro Valley Water Management Agency
(2013) 220 Cal.App.4th 586 and Howard Jarvis Taxpayers
Association v. City of Salinas (2002) 98 Cal.App.4th 1351.
3)Makes other technical and conforming changes.
4)Finds and declares that the provisions of the Proposition 218
Omnibus Implementation Act shall be liberally construed to
effectuate its purposes of limiting local government revenue
and enhancing taxpayer consent.
EXISTING LAW :
1)Defines, for purposes of Article XIII C and Article XIII D of
the California Constitution and the Proposition 218 Omnibus
Implementation Act, "water" to mean "any system of public
improvement intended to provide for the production, storage,
supply, treatment, or distribution of water".
2)"Recycled water" means, pursuant to the Water Code, "water
which, as a result of treatment of waste, is suitable for a
direct beneficial use or a controlled use that would not
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otherwise occur and is therefore considered a valuable
resource."
3)Provides notice, protest, hearing, and election procedures for
the levying of new or increased assessments or
property-related fees or charges by local government agencies
pursuant to Proposition 218.
FISCAL EFFECT : None
COMMENTS :
1)Current law and purpose of this bill. The Proposition 218
Omnibus Implementation Act, currently defines "water" to mean
"any system of public improvement intended to provide for the
production, storage, supply, treatment, or distribution of
water." Under this bill the definition of water is "any
system of public improvement intended to provide for the
production, storage, supply, treatment or distribution of
water from any source." This bill is author-sponsored.
2)Author's statement. According to the author, "This bill would
put the new Griffith decision into statute and allow public
agencies to apply the simpler protest process to their
approval of stormwater management fees, where the management
programs address both water supply and water quality.
"In 2002, the [Sixth District] Court of Appeal interpreted
this exception for water/sewer rates to exclude costs for
stormwater drains. The service in the 2002 case emphasized
flood control, moving water to the ocean as quickly as
possible. That program had nothing to do with water supply.
Those fees had developed to address the water quality
challenges presented by stormwater. Stormwater management has
changed since 2002. Since Proposition 218 passed in 1996,
managing stormwater has become more about water supply, as
agencies develop methods to 'capture' stormwater, clean it,
and recharge groundwater aquifers for water supply. In 2013,
the Court of Appeals again considered stormwater in a
Proposition 218 context, for a program that charged fees for
groundwater recharge, including stormwater capture.
"This bill offers one alternative to address the evolving
nature of California's stormwater management programs,
especially the growing development of 'stormwater recapture'
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programs for recharging groundwater aquifers."
3)Proposition 218 Omnibus Implementation Act. Proposition 218
Omnibus Implementation Act distinguishes among taxes,
assessments and fees for property-related revenues, and
requires certain actions before such revenues may be
collected. Counties and other local agencies with police
powers may impose any one of these options on property owners,
after completing the Proposition 218 Omnibus Implementation
Act process. Special districts created by statute, however,
must have specific authority for each of these revenue
sources.
The California Constitution defines a fee (or charge) as any
levy other than an ad valorem tax, special tax, or assessment
that is imposed by a local government on a parcel or on a
person as an incident of property ownership, including a user
fee for a property-related service. The fee imposed on any
parcel or person cannot exceed the proportional cost of the
service that is attributable to the parcel. Prior to imposing
or increasing a property-related fee, the local government is
required to identify the parcels, mail a written notice to all
the property owners subject to the fee detailing the amount of
the fee, the reason for the fee, and the date, time, and
location of a public hearing on the proposed fee. No sooner
than 45 days after mailing the notice to property owners, the
agency must conduct a public hearing on the proposed fee. If
a majority of owners of the identified parcels provide written
protests against the fee, it cannot be imposed or increased by
the agency.
Additionally, Article XIII D Section 6 subdivision (c) of the
California Constitution, provides election requirements,
"Except for fees or charges for sewer, water, and refuse
collection services, no property-related fee or charge shall
be imposed or increased unless and until that fee or charge is
submitted and approved by a majority vote of the property
owners of the property subject to the fee or charge or, at the
option of the agency, by a two-thirds vote of the electorate
residing in the affected area." The election for the fee is
required to be conducted no less than 45 days following the
public hearing.
The definition of "water" under the Proposition 218 Omnibus
Implementation Act is significant because the election
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requirements are on fees for services other than water, sewer,
and trash services.
4)Griffith v. Pajaro Valley Water Management Agency. Prior to
the appellate decision in Griffith v. Pajaro Valley Water
Management Agency, the issue of whether a charge for
groundwater augmentation was considered a water service and
therefore exempt from the election requirements was contested.
Under Griffith the court relied on the definition of "water"
in Proposition 218 Omnibus Implementation Act narrowly
construing an earlier decision in Howard Jarvis Taxpayers
Association v. City of Salinas, which did not apply the Act's
definitions to a storm water charge dispute. The Griffith
decision found that a groundwater augmentation charge is a fee
for "water service".
According to the Griffith decision, "Moreover, the Legislature
has endorsed the view that water service means more than just
supplying water. The Proposition 218 Omnibus Implementation
Act, enacted specifically to construe Proposition 218 Omnibus
Implementation Act, defines 'water' as 'any systems of public
improvements intended to provide for the production, storage,
supply, treatment, or distribution of water'. Thus, the
entity who produces, stores, supplies, treats, or distributes
water necessarily provides water service. Defendant's
statutory mandate to purchase, capture, store, and distribute
supplemental water therefore describes water service." The
Court made several other decisions regarding Proposition 218
Omnibus Implementation Act, however, the portions of the case
that discuss "water service" are especially pertinent to this
bill.
The Legislature may wish to consider following the appellate
decision in Griffith which has provided more guidance on
several issues under Proposition 218 Omnibus Implementation
Act's provisions regarding water, sewer, trash, and other
property-related fees if it is helpful for the Legislature to
amend the definition of "water." The Legislature may wish to
consider if it is the best policy to let stakeholders continue
to rely on the court's decision in light of the clarity
provided by Griffith.
5)Arguments in support. Supporters argue that while
California's drought and efforts to provide a continued, safe,
reliable supply of water presents many challenges, that the
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clarifying language in this bill provides an opportunity to
remove any confusion that may exist and will enable all of our
communities to get one step closer to attaining a sustainable
water future.
6)Arguments in opposition. None on file.
Analysis Prepared by : Misa Yokoi-Shelton / L. GOV. / (916)
319-3958
FN: 0003431