BILL NUMBER: AB 3030 INTRODUCED
BILL TEXT
INTRODUCED BY Assembly Member Brownley
FEBRUARY 22, 2008
An act to add Section 53756 to the Government Code, relating to
local government.
LEGISLATIVE COUNSEL'S DIGEST
AB 3030, as introduced, Brownley. Local publicly owned water
utility: rate cases.
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. Existing
law provides notice, protest, and hearing procedures for the levying
of new or increased fees and charges by local government agencies
pursuant to Articles XIII C and XIII D of the California
Constitution.
This bill would authorize a local publicly owned water utility, as
defined, to adopt a multiyear rate schedule establishing water
service charges and fees, for a period not to exceed 5 years. The
bill would require that the rate schedule be adopted by the governing
board of the utility in a public ratemaking case proceeding
utilizing the procedures authorized by current law. The bill would
require that if the rate schedule includes future cost adjustments
for inflation for variable costs, that the adjustments be in lieu of
scheduled increases based upon anticipated inflation and that the
adjustments be based upon a clearly identified and recognized
inflation measurement formula over which the utility has no control
and that notice be given pursuant to existing law of any inflation
adjustment, a minimum of 30 days before the adjustment takes effect.
The bill would authorize the rate schedule to include future cost
adjustments that allow for the passthrough of water commodity costs,
in lieu of scheduled increases for anticipated cost increases, if
certain circumstances take place.
Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 53756 is added to the Government Code, to read:
53756. (a) For purposes of this section, "local publicly owned
water utility" means an entity of local government that provides
water to residential end-use consumers, and may include a special law
water district as defined in Section 861 of, municipal corporations
providing water service pursuant to Section 9 of Article XI of the
California Constitution, a public utility owned and operated by a
municipal corporation pursuant to Division 5 (commencing with Section
10001) of, a municipal utility district that provides water service
organized pursuant to Division 6 (commencing with Section 11501) of,
or a public utility district that provides water service organized
pursuant to Division 7 (commencing with Section 15501) of, the Public
Utilities Code, an irrigation district organized pursuant to
Division 11 (commencing with Section 20500) of, a county water
district organized pursuant to Division 12 (commencing with Section
30000) of, a water district organized pursuant to Division 13
(commencing with Section 34000) of, a county waterworks district
organized pursuant to Division 16 (commencing with Section 55000) of,
or a municipal water district organized pursuant to Division 20
(commencing with Section 71000) of, the Water Code, a joint powers
authority that includes one or more of these entities organized
pursuant to Chapter 5 (commencing with Section 6500) of Division 7 of
Title 1, or an entity of local government established pursuant to an
uncodified water district act.
(b) A local publicly owned water utility may adopt a multiyear
rate schedule establishing water service charges and fees, for a
period not to exceed five years.
(c) The rate schedule shall be adopted by the governing board of
the local publicly owned water utility in a public ratemaking case
proceeding utilizing the procedures of Section 53755.
(d) (1) The rate schedule may include future cost adjustments for
inflation for variable costs, that are in lieu of scheduled increases
based upon anticipated inflation, and are based upon a clearly
identified and recognized inflation measurement formula over which
the local publicly owned water utility has no control.
(2) Notice of any inflation adjustment made pursuant to the
formula shall be provided pursuant to subdivision (a) of Section
53755, a minimum of 30 days before the adjustment takes effect.
(e) The rate schedule may include future cost adjustments that
allow for the passthrough of water commodity costs, in lieu of
scheduled increases for anticipated water supply cost increases, if
all the following are true:
(1) Water commodity costs incurred by the local publicly owned
water utility vary according to a binding contract with a water
supplier and the cost of water is established by the water supplier
and not the local publicly owned water utility.
(2) The local publicly owned water utility makes the terms of the
contract reasonably available to ratepayers for review.
(3) The local publicly owned water utility utilizes a water
commodity balancing account, set at a level to cover anticipated
water supply cost increases, in order to moderate fluctuations in
water supply costs.
(4) The governing body of the local publicly owned water utility
determines, for an increase in water supply costs, that the balancing
account will be insufficient to pay for the increase in water supply
costs without impairment of the financial condition of the utility.
The governing body of the local publicly owned water utility
determines, for a decrease in water supply costs, that the amount
paid into the balancing account may be reduced without impairment of
the financial condition of the utility.
(5) Notice of any water supply passthrough adjustment and of the
determination of the governing board pursuant to paragraph (4) is
provided pursuant to subdivision (a) of Section 53755, a minimum of
30 days before the adjustment takes effect.