Amended in Assembly August 11, 2016

Amended in Assembly August 1, 2016

Amended in Assembly June 13, 2016

Senate BillNo. 1298

Introduced by Senator Hertzberg

February 19, 2016

An act to amend Section 53750 of the Government Code, relating to local government finance.


SB 1298, as amended, Hertzberg. Local government: fees and charges.

Articles XIII C and XIII D of the California Constitution generally require that assessments, fees, and charges be submitted to property owners for approval or rejection after the provision of written notice and the holding of a public hearing. Existing law, the Proposition 218 Omnibus Implementation Act, prescribes specific procedures and parameters for local jurisdictions to comply with Articles XIII C and XIII D of the California Constitution and defines terms for these purposes.

This bill would define thebegin delete terms “proportional cost of the service attributable to the parcel” and “sewer service”end deletebegin insert term “sewer”end insert for these purposes.

Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.

The people of the State of California do enact as follows:

P2    1


The Legislature finds and declares all of the

3(a) The ongoing, historic drought has made clear that California
4must invest in a 21st century water management system capable
5of effectively meeting the economic, social, and environmental
6needs of the state.

7(b) Sufficient and reliable funding to pay for local water projects
8is necessary to improve the state’s water infrastructure.

9(c) Propositionbegin delete 218,end deletebegin insert 218 wasend insert approvedbegin insert by the votersend insert inbegin delete 1996,
10was meant to improve transparency and accountability of local
11government fees.end delete
begin insert 1996.end insert Some court interpretations of the law have
12constrained important tools that local governments need to manage
begin delete water supplies, address water pollution and provide stormwater
14management.end delete
begin insert storm water and drainage runoff.end insert

15(d) begin deleteStormwater is a key source of local water supply, end deletebegin insertStorm
16 waters are carried off in storm sewers, end insert
and careful management
17is necessary to reduce pollution. But a court decision hasbegin delete required
18stormwater and flood control programs to meet a higher standard
19than other water-related services to raise capital,end delete
begin insert excluded storm
20water from those provisions of Proposition 218 that apply to
21property-related fees for sewer and water,end insert
preventing many
22important projects from being built.

begin delete

23(e) This act is intended to provide guidance to local agencies
24and courts on the implementation of Articles XIII C and XIII D of
25the California Constitution and shall not be construed to amend
26those articles.

end delete
begin insert

(e) The Court of Appeal in Howard Jarvis Taxpayers Ass’n v.
28City of Salinas (2002) 98 Cal.App.4th 1351, concluded that the
29term “sewer,” as used in Proposition 218, is “ambiguous” but
30rejected, and refused to use, the statutory definition of the term
31“sewer system” which was part of the then-existing law as Section
32230.5 of the Public Utilities Code.

end insert
begin insert

(f) The Legislature reaffirms and reiterates that the definition
34found in Section 230.5 of the Public Utilities Code is the definition
35of “sewer” or “sewer service” that should be used in the
36Proposition 218 Omnibus Implementation Act.

end insert

SEC. 2.  

Section 53750 of the Government Code is amended
38to read:

P3    1


For purposes of Article XIII C and Article XIII D of
2the California Constitution and this article:

3(a) “Agency” means any local government as defined in
4subdivision (b) of Section 1 of Article XIII C of the California

6(b) “Assessment” means any levy or charge by an agency upon
7real property that is based upon the special benefit conferred upon
8the real property by a public improvement or service, that is
9imposed to pay the capital cost of the public improvement, the
10maintenance and operation expenses of the public improvement,
11or the cost of the service being provided. “Assessment” includes,
12but is not limited to, “special assessment,” “benefit assessment,”
13“maintenance assessment,” and “special assessment tax.”

14(c) “District” means an area that is determined by an agency to
15contain all of the parcels that will receive a special benefit from a
16proposed public improvement or service.

17(d) “Drainage system” means any system of public
18improvements that is intended to provide for erosion control, for
19landslide abatement, or for other types of water drainage.

20(e) “Extended,” when applied to an existing tax or fee or charge,
21means a decision by an agency to extend the stated effective period
22for the tax or fee or charge, including, but not limited to,
23amendment or removal of a sunset provision or expiration date.

24(f) “Flood control” means any system of public improvements
25that is intended to protect property from overflow by water.

26(g) “Identified parcel” means a parcel of real property that an
27agency has identified as having a special benefit conferred upon
28it and upon which a proposed assessment is to be imposed, or a
29parcel of real property upon which a proposed property-related
30fee or charge is proposed to be imposed.

31(h) (1) “Increased,” when applied to a tax, assessment, or
32property-related fee or charge, means a decision by an agency that
33does either of the following:

34(A) Increases any applicable rate used to calculate the tax,
35assessment, fee, or charge.

36(B) Revises the methodology by which the tax, assessment, fee,
37or charge is calculated, if that revision results in an increased
38amount being levied on any person or parcel.

39(2) A tax, fee, or charge is not deemed to be “increased” by an
40agency action that does either or both of the following:

P4    1(A) Adjusts the amount of a tax, fee, or charge in accordance
2with a schedule of adjustments, including a clearly defined formula
3for inflation adjustment that was adopted by the agency prior to
4November 6, 1996.

5(B) Implements or collects a previously approved tax, fee, or
6charge, so long as the rate is not increased beyond the level
7previously approved by the agency, and the methodology
8previously approved by the agency is not revised so as to result in
9an increase in the amount being levied on any person or parcel.

10(3) A tax, assessment, fee, or charge is not deemed to be
11“increased” in the case in which the actual payments from a person
12or property are higher than would have resulted when the agency
13approved the tax, assessment, fee, or charge, if those higher
14payments are attributable to events other than an increased rate or
15revised methodology, such as a change in the density, intensity,
16or nature of the use of land.

17(i) “Notice by mail” means any notice required by Article XIII C
18or XIII D of the California Constitution that is accomplished
19through a mailing, postage prepaid, deposited in the United States
20Postal Service and is deemed given when so deposited. Notice by
21mail may be included in any other mailing to the record owner
22that otherwise complies with Article XIII C or XIII D of the
23California Constitution and this article, including, but not limited
24to, the mailing of a bill for the collection of an assessment or a
25property-related fee or charge.

begin delete

26(j) “Proportional cost of the service attributable to the parcel,”
27when applied to a fee or charge for water or sewer service, means
28the share of the total cost of providing water or sewer service to
29water or sewer users within the service area reasonably attributable
30to the parcel. The total cost of providing water or sewer service
31includes all costs of acquiring water and water rights, costs of
32collecting, conveying, treating, and managing water and
33wastewater, and costs of satisfying all regulatory requirements
34lawfully imposed on water and sewer service providers.

end delete
begin delete

18 35(k)

end delete

36begin insert(j)end insert “Record owner” means the owner of a parcel whose name
37and address appears on the last equalized secured property tax
38assessment roll, or in the case of any public entity, the State of
39California, or the United States, means the representative of that
40public entity at the address of that entity known to the agency.

begin delete

23 P5    1(l) “Sewer service”

end delete

2begin insert(k)end insertbegin insertend insertbegin insert“Sewer”end insert means servicesbegin insert and systemsend insert provided by all real
3estate, fixtures, and personal property owned, controlled, operated,
4or managed in connection with or to facilitate sewage collection,
5treatment, or disposition for sanitary or drainage purposes,
6including lateral and connecting sewers, interceptors, trunk and
7outfall lines, sanitary sewage treatment or disposal plants or works,
8drains, conduits, outlets for surface or storm waters, and any and
9all other works, property, or structures necessary or convenient
10for the collection or disposal of sewage, industrial waste, or surface
11or storm waters. “Sewer system” shall not include a sewer system
12that merely collects sewage on the property of a single owner.

begin delete

34 13(m)

end delete

14begin insert(l)end insert “Registered professional engineer” means an engineer
15registered pursuant to the Professional Engineers Act (Chapter 7
16(commencing with Section 6700) of Division 3 of the Business
17and Professions Code).

begin delete

38 18(n)

end delete

19begin insert(m)end insert “Vector control” means any system of public improvements
20or services that is intended to provide for the surveillance,
21prevention, abatement, and control of vectors as defined in
22subdivision (k) of Section 2002 of the Health and Safety Code and
23a pest as defined in Section 5006 of the Food and Agricultural

begin delete

4 25(o)

end delete

26begin insert(n)end insert “Water” means any system of public improvements intended
27to provide for the production, storage, supply, treatment, or
28distribution of water from any source.