BILL ANALYSIS �
SENATE GOVERNANCE & FINANCE COMMITTEE
Senator Lois Wolk, Chair
BILL NO: AB 2403 HEARING: 6/11/14
AUTHOR: Rendon FISCAL: No
VERSION: 6/2/14 TAX LEVY: No
CONSULTANT: Weinberger
PROPERTY RELATED FEES
Clarifies the Proposition 218 Omnibus Implementation Act's
definition of "water."
Background and Existing Law
Proposition 218 (1996) imposed constitutional limits on
local officials' ability to impose, increase, and extend
fees, including property-related fees. Proposition 218
defined a property-related fee 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 for a
property-related service. The Legislature enacted the
Proposition 218 Omnibus Implementation Act to translate
many of Proposition 218's requirements into statutory
definitions and procedures (SB 919, Rainey, 1997).
Before a local government can charge a new property-related
fee, or increase an existing one, Proposition 218 requires
local officials to:
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.
New or increased property-related fees generally require:
A majority-vote of the affected property owners;
or,
Two-thirds registered voter approval; or,
Weighted ballot approval by the affected property
owners.
AB 2403 -- 6/2/14 -- Page 2
However, these vote requirements don't apply to
property-related fees for sewer, water, or refuse
collection services. Determining what services fall within
the definition of "water" services, which can be funded
with fees that are not subject to a vote, has been the
subject of litigation. An appellate court decision in
Howard Jarvis Taxpayers Association v. City of Salinas
(2002) found that a city's charges on developed parcels to
fund stormwater management were property-related fees, and
were not covered by the exemption for sewer or water
services. A subsequent appellate court decision in
Griffith v. Pajaro Valley Water Management Agency (2013)
found that a groundwater augmentation charge is a fee for
water service, as defined by Proposition 218.
In light of these court rulings and local governments'
continued struggles to finance storm water management,
groundwater augmentation, water conservation, and similar
activities, some local officials want the Legislature to
clarify the Proposition 218 Omnibus Implementation Act's
definition of "water."
Proposed Law
Assembly Bill 2403 clarifies that the Proposition 218
Omnibus Implementation Act's current definition of "water"
includes improvements for producing, storing, supplying,
treating, or distributing of water from any source.
AB 2403 enacts legislative findings and declarations
stating that:
The provisions of the Proposition 218 Omnibus
Implementation Act must be liberally construed to
effectuate its purposes of limiting local government
revenue and enhancing taxpayer consent.
The bill's provisions advance specified policies
established by the California Constitution.
The bill's provisions are declaratory of existing
law.
The bill makes additional technical, non-substantive
amendments to state law.
AB 2403 -- 6/2/14 -- Page 3
State Revenue Impact
No estimate.
Comment
Purpose of the bill . AB 2403 amends the Proposition 218
Implementation Act to define "water" in a manner that is
consistent with recent appellate court decisions. In doing
so, AB 2403 clarifies local agencies' ability to impose
some storm water management fees, where the management
programs capture storm water for domestic and irrigation
supply, without having to subject those fees to a vote.
The bill bolsters important elements of local storm water
management programs, including the growing development of
storm water recapture programs for recharging groundwater
aquifers.
Assembly Actions
Assembly Local Government Committee: 9-0
Assembly Floor: 74-1
Support and Opposition (6/5/14)
Support : California Coastkeeper Alliance; Clean Water
Action/Clean Water Fund; Climate Resolve; Coalition for Our
Water Future; Signal Hill City Councilmember Larry
Forester; David Nahai Consulting Service, LLC; Desert Water
Agency; East Valley Water District; El Dorado Irrigation
District; Heal the Bay; HOK Product Design; Horny Toad
Outdoor Apparel; LA Conservation Corps; Los Angeles
Waterkeeper; Natural Resources Defense Council; Richard
Watson & Associates; Santa Monica Bay Restoration
Commission; Seventh Generation Advisors; Southern
California Watershed Alliance; Surfrider Foundation; The
Energy Coalition; The River Project; TreePeople; Urban
Semillas; 3 individual letters
Opposition : Unknown.
AB 2403 -- 6/2/14 -- Page 4