HomeMy WebLinkAbout9, Prop 26
Workshop Item # 9 March 2, 2011 Proposition 26Discussion of California
Discussion of California Proposition 26 2 Electrical service charges specifically exempted–Similar to Proposition 13 but applies to water rates–California Proposition 218•Case law has
never been applied to electricity rates–Voter approval–Established that fees = reasonable cost and equitable or;–California Proposition 13•‘Rule of Reasonableness’–Within the purview
of the Board–Setting electric rates and defining utility programs •Background / History
New InformationDiscussion of California Proposition 26 3 Must have voter approval (2/3) unless exempted–kind imposed by a local government.”Defines tax to mean “any levy, charge, or
exaction of any –Proposition 26•Presentation by John Baker, Myers Nave–Discussed Proposition 26 at recent Strategic Issues Conference–Northern California Power Agency–courts must interpret–Propositi
on is broadly worded –May impact how Board sets rates and defines programs–Supermajority Vote to Pass New Taxes and Fees Act–Voters passed California Proposition 26 (Nov. 2010)•
New InformationDiscussion of California Proposition 26 4 of service or product’ exception appliesElectricity rates and programs may be exempted if the ‘cost –Regulatory fees apply to
both water and electric utilities–Water rates covered by Proposition 218–For application of Proposition 26 to the District•Regulatory fees–Charges for use of or entrance to real property;
and–Fines and penalties;–Fees imposed as a condition of development;–Fees subject to Proposition 218;–Fees based on cost of service or product;–Main exemptions to Proposition 26 requirements:•
New InformationDiscussion of California Proposition 26 5 Requires that the fees be proportionate to use–That the estimated costs are reasonable; and–Nearly identical to Proposition 13
standard:–Meaning of “costs of providing the service”•government of providing the service or product”“Which does not exceed the reasonable costs to the local –“That is not provided
to those not charged”; and–“Provided directly to the payor”;–“Imposed for a specific government service or product”;–Cost of service or product exception:•
New InformationDiscussion of California Proposition 26 6 True impacts of Proposition 26 may take years to understand–Work closely with NCPA, CMUA, and others–Residential vs. commercial–income
rates-Low–Tiered rates–Impacts on electric rate setting–‘Payments in lieu of taxes’–Redding Electric Utility–Track court cases–Next Steps•
Fiscal ImpactDiscussion of California Proposition 26 7 itemThere are no fiscal impacts associated with this workshop •Fiscal impacts of Proposition 26 are yet to be determined•
RecommendationDiscussion of California Proposition 26 8 Receive this report and provide comment•