Untitled California Attorney General Opinion

TO BE PUBLISHED IN THE OFFICIAL REPORTS
OFFICE OF THE ATTORNEY GENERAL
State of California
DANIEL E. LUNGREN
Attorney General
______________________________________
OPINION :
: No. 97-302
of :
: July 14, 1997
DANIEL E. LUNGREN :
Attorney General :
:
ANTHONY M. SUMMERS :
Deputy Attorney General :
:
______________________________________________________________________
THE HONORABLE RICHARD K. RAINEY, MEMBER OF THE CALIFORNIA STATE
SENATE, has requested an opinion on the following question:
May a water district, without violating the constitutional limitation placed upon fees for
service, impose a tiered water rate structure that assesses a higher charge per unit of water as the level of
consumption increases?
CONCLUSION
A water district, without violating the constitutional limitation placed upon fees for service,
may impose a tiered water rate structure that assesses a higher charge per unit of water as the level of
consumption increases.
ANALYSIS
The East Bay Municipal Water District has imposed an "inclining block" or "tiered" rate
structure. This type of water rate assesses a higher charge per unit of water as the level of consumption
increases. (Brydon v. East Bay Mun. Utility Dist. (1994) 24 Cal. App. 4th 178, 184.) We are asked whether
such a rate structure comports with the requirements of newly adopted article XIII D of the Constitution.
Subdivision (b) of section 6 of article XIII D provides in part:
"A fee or charge shall not be extended, imposed, or increased by any agency unless it
meets all of the following requirements:
"(1) Revenues derived from the fee or charge shall not exceed the funds required to
provide the property related service.
". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
"(3) The amount of a fee or charge imposed upon any parcel or person as an incident
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of property ownership shall not exceed the proportional cost of the service attributable to the
parcel."
We conclude that the newly adopted constitutional limitation placed upon fees for service is inapplicable to
the water rate structure in question.
Article XIII D provides as to the scope of its applicability:
"§ 1. Application of article.
"Notwithstanding any other provision of law, the provisions of this article shall apply
to all assessments, fees and charges, whether imposed pursuant to state statute or local
government charter authority. . . .
"§ 2. Definitions.
"As used in this article:
". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
"(e) `Fee' or `charge' means any levy other than an ad valorem tax, a special tax, or an
assessment, imposed by an agency upon a parcel or upon a person as an incident of property
ownership, including a user fee or charge for a property related service.
". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
"(h) `Property-related service' means a public service having a direct relationship to
property ownership.
". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ."
In determining whether article XIII D is applicable to a water rate imposed by a municipal
water district, we apply well-established principles of constitutional interpretation. In Amador Valley Joint
Union High Sch. Dist. v. State Bd. of Equalization (1978) 22 Cal. 3d 208, 244-245, the court stated:
". . . California courts have held that constitutional and other enactments must receive
a liberal, practical common-sense construction which will meet changed conditions and the
growing needs of the people. [Citations.] A constitutional amendment should be construed in
accordance with the natural and ordinary meaning of its words. . . .
". . . [W]hen, as here, the enactment follows voter approval, the ballot summary and
arguments and analysis presented to the electorate in connection with a particular measure may
be helpful in determining the probable meaning of uncertain language. [Citations.]"
Applying these principles of construction to the constitutional language in question, we give the terms their
usual and ordinary meanings. A water charge that is based upon the ownership of land and calculated based
upon the amount of land involved must be said to have a "direct relationship to property ownership." Water
Code section 71630, for example, permits a municipal water district to fix a "water standby assessment or
availability charge" whether the water is actually used or not (see Cal. Const., art. XIII D, § 6, subd. (4)), and
such fees are calculated based upon acreage owned (Wat. Code, § 71631).
On the other hand, a water charge that is imposed whether the purchaser is a landowner or
not, such as upon construction companies for filling their water tank trucks (see Wat. Code, § 71610), would
not have a "direct relationship to property ownership " At most the relationship would be indirect in such
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not have a direct relationship to property ownership. At most, the relationship would be indirect in such
circumstances.
We have examined in detail the voters' pamphlet supplied to the electorate concerning the
scope and effect of Proposition 218, which added article XIII D to the Constitution in 1996. (Ballot Pamp.,
Proposed Amends. to Cal. Const. with arguments to voters, Gen. Elec. (Nov. 5, 1996) pp. 72-77.) Nothing
therein supports the conclusion that all water rates necessarily come within its terms or that none are subject
to its requirements. Of particular significance is the argument in favor of the proposition submitted by its
proponents:
"VOTE YES ON PROPOSITION 218. IT WILL GIVE YOU THE RIGHT TO
VOTE ON TAX INCREASES!
"Proposition 218 guarantees your right to vote on local tax increases--even when they
are called something else, like `assessments' or `fees' and imposed on homeowners.
"Proposition 218 guarantees your right to vote on taxes imposed on your water, gas,
electric, and telephone bills.
". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
". . . cities have increased utility taxes 415% . . . .
"Non-voted taxes on electricity, gas, water, and telephone services hit renters and
homeowners hard.
". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
"FOR THE RIGHT TO VOTE ON TAXES, VOTE YES ON PROPOSITION 218."
(Id., at p. 76.)
While the proponents indicate that "taxes imposed on . . . water . . . bills" would come under the requirements
of Proposition 218, such language suggests that the water charges themselves would not be subject to the
proposition's requirements. We believe that each water fee or charge must be examined individually in light
of the constitutional mandate.
The tiered water rate structure in question is based upon the amount of water used. Such a
rate mechanism is in contrast to fees or assessments that are levied against a parcel of land on a per-parcel or
per-acre basis. While water consumption may correlate to some extent with the size of the particular parcel,
factors such as whether the land has been developed, the nature of the development, the amount and type of
vegetation present, and the number of people per household will also affect water consumption and the
charges incurred. We believe that fees for water that are based upon metered amounts used are not "imposed
. . . as an incident of property ownership" and do not have "a direct relationship to property ownership."
Consequently, such fees would not be governed by article XIII D of the Constitution. Footnote No. 1
We conclude that a water district, without violating the constitutional limitation placed upon
fees for services, may impose a tiered water rate structure that assesses a higher charge per unit of water as
the level of consumption increases.
*****
Footnote No. 1
Not only is article XIII D inapplicable to the water rate structure in question, we believe that each rate of the tiered rate
structure would meet the newly adopted constitutional limitation of not exceeding "the proportional cost of the service
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attributable to the parcel." (Cal. Const., art. XIII D, § 6, subd. (b)(3).) Here the district has made the requisite findings of
proportionality, which would be binding upon a court in the absence of contrary evidence. (See Wat. Code, § 71616:
Brydon v. East Bay Mun. Utility Dist., supra, 24 Cal.App.4th at 187-195, 201-202; Carlton Santee Corp. v. Padre Dam
Municipal Water Dist. (1981) 120 Cal. App. 3d 14, 31.)
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