BILL ANALYSIS �
AB 2403
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CONCURRENCE IN SENATE AMENDMENTS
AB 2403 (Rendon and Mullin)
As Amended June 2, 2014
Majority vote
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|ASSEMBLY: |74-1 |(May 19, 2014) |SENATE: |35-0 |(June 16, |
| | | | | |2014) |
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Original Committee Reference: L. GOV.
SUMMARY : Expands the definition of "water" in the Proposition 218 of
1996 Omnibus Implementation Act.
The Senate amendments remove references to specific court cases,
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, from the findings and
declarations.
EXISTING LAW :
1)Defines, for purposes of the California Constitution Article XIII C
and Article XIII D 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 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
Omnibus Implementation Act.
AS PASSED BY THE ASSEMBLY , this bill:
1)Made changes to the Proposition 218 Omnibus Implementation Act to
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add "from any source" to the current definition of "water."
2)Found and declared 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 and Howard Jarvis
Taxpayers Association v. City of Salinas.
3)Made other technical and conforming changes.
4)Found and declared 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.
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 [v. Pajaro Valley Water Management Agency] 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,
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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' 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, California Constitution Article XIII D, Section 6(c)
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
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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 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 v. Pajaro
Valley Water Management Agency 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 v. Pajaro
Valley Water Management Agency decision found that a groundwater
augmentation charge is a fee for "water service".
According to the Griffith v. Pajaro Valley Water Management Agency
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 v. Pajaro Valley Water Management Agency 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
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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 v. Pajaro Valley Water Management Agency.
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 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: 0003969