Dep't of Fin. v. Comm'n on State Mandates

• Decision Date: 24 October 2022
• Docket Number: C092139
• Citation: 85 Cal.App.5th 535,301 Cal.Rptr.3d 562
• Parties: DEPARTMENT OF FINANCE et al., Plaintiffs, Cross-defendants and Appellants, v. COMMISSION ON STATE MANDATES, Defendant and Respondent; County of San Diego et al., Defendants, Cross-complainants and Appellants.
• Court: California Court of Appeals Court of Appeals

85 Cal.App.5th 535

301 Cal.Rptr.3d 562

DEPARTMENT OF FINANCE et al., Plaintiffs, Cross-defendants and Appellants,

v.COMMISSION ON STATE MANDATES, Defendant and Respondent;

County of San Diego et al., Defendants, Cross-complainants and Appellants.

C092139

Court of Appeal, Third District, California.

Filed October 24, 2022

Ryan R. Davis, Office of the State Attorney General, 1300 I. Street, Suite 125, P.O. Box 944255, Sacramento, CA 94425, for Plaintiff, Cross-defendant and Appellant.

Camille S. Shelton, Commission on State Mandates, Chief Legal Counsel, 980 9th Street, Suite 300, Sacramento, CA 95814-2719, for Defendant and Respondent.

Christina Rea Snider, Office of County Counsel, 1600 Pacific Highway, Room 355, San Diego, CA 92101-2437, for Defendant, Cross-complainant and Appellant.

Shawn David Hagerty, Best Best & Krieger, LLP, 655 West Broadway, 15th Floor, San Diego, CA 92101-3301, Helen Holmes Peak, Lounsbery, Ferguson, Altona & Peak LLP, 960 Canterbury Place, Suite 300, Escondido, CA 92025-3836, for Defendant, Cross-complainant and Appellant.

Frederick Michael Ortlieb, San Diego City Attorney Office, 1200 Third Avenue, Suite 1620, San Diego, CA 92101, for Defendant, Cross-complainant and Appellant.

HULL, Acting P. J.

The California Constitution requires the state to provide a subvention of funds to compensate local governments for the cost of a new program or higher level of service mandated by the state. ( Cal. Const., art. XIII B, § 6 (Section 6 ).) Subvention is not available if the local governments have the authority to levy service charges, fees, or assessments sufficient to pay for the mandated program or higher level of service. ( Gov. Code, § 17556, subd. (d) ( section 17556 (d) ).) Defendant and respondent Commission on State Mandates (the Commission) adjudicates claims for subvention. ( Gov. Code, §§ 17525, 17551.)

This appeal concerns whether Section 6 requires the state to reimburse the defendant local governments (collectively permittees or copermittees) for costs they incurred to satisfy conditions which the state imposed on their stormwater discharge permit. The Commission determined that six of the eight permit conditions challenged in this action were reimbursable state mandates. They required permittees to provide a new program. Permittees also did not have sufficient legal authority to levy a fee for those conditions because doing so required preapproval by the voters.

The Commission also determined that the other two conditions requiring the development and implementation of environmental mitigation plans for certain new development were not reimbursable state mandates. Permittees had authority to levy a fee for those conditions.

On petitions for writ of administrative mandate, the trial court in its most recent ruling in this action upheld the Commission's decision in its entirety and denied the petitions.

Plaintiffs, cross-defendants and appellants State Department of Finance, the State Water Resources Board, and the Regional Water Quality Board, San Diego Region (collectively the State) appeal. They contend the six permit conditions found to be reimbursable state mandates are not mandates because the permit does not require permittees to provide a new program and permittees have authority to levy fees for those conditions without obtaining voter approval.

Defendant, cross-complainant, and appellant permittees cross appeal. They contend the other two conditions found not to be reimbursable state mandates are reimbursable because permittees do not have authority to levy fees for those conditions. Specifically, they cannot develop fees that would meet all constitutional requirements for an enforceable fee.¹

The Commission has filed a respondent's brief. As part of its brief, it claims it erred in concluding that part of one of the challenged conditions, which mandates street sweeping, was a reimbursable mandate. The Commission now agrees with the State that permittees have authority to levy a fee to recover the cost of complying with that condition and it is not reimbursable under Section 6.

Except to hold that the street sweeping condition is not a reimbursable mandate, we affirm the judgment.

FACTS AND PROCEEDINGS

For a fuller discussion of the stormwater discharge permitting system and the constitutional mandate subvention system, please see the discussion in Department of Finance v. Commission on State Mandates (2017) 18 Cal.App.5th 661, 668-675, 226 Cal.Rptr.3d 846 ( San Diego Mandates I ). For our purposes, it is sufficient to state that the federal Clean Water Act ( 33 U.S.C. § 1251 et seq. ) prohibits pollutant discharges into the nation's waters unless they comply with a permit, established effluent limitations, or standards of performance. The Clean Water Act created the National Pollutant Discharge Elimination System (NPDES) to permit water pollutant discharges that comply with all statutory and administrative requirements. ( San Diego Mandates I, at pp. 668-669, 226 Cal.Rptr.3d 846.)

Pursuant to federal approval granted under the Clean Water Act, California under the Porter-Cologne Water Quality Control Act ( Wat. Code, § 13000 et seq. ) operates the NPDES permitting system and regulates discharges within the state under state and federal law. ( San Diego Mandates I, supra , 18 Cal.App.5th at pp. 669-670, 226 Cal.Rptr.3d 846.)

The Clean Water Act requires an NPDES permit for any discharge from a municipal separate storm sewer system (MS4) serving a population of 100,000 or more. ( 33 U.S.C. § 1342 (p)(2)(C), (D).) " ‘[A] permit may be issued either on a system- or jurisdiction-wide basis, must effectively prohibit non-stormwater discharges into the storm sewers, and must "require controls to reduce the discharge of pollutants to the maximum extent practicable." ( 33 U.S.C. § 1342 (p)(3)(B), italics [omitted].)’ " ( San Diego Mandates I, supra , 18 Cal.App.5th at p. 670, 226 Cal.Rptr.3d 846.)

In 2007, the Regional Water Quality Control Board, San Diego Region (San Diego Regional Board), issued an NPDES permit to permittees for the operation of their MS4. ( San Diego Mandates I, supra , 18 Cal.App.5th at p. 670, 226 Cal.Rptr.3d 846.) "The permit was actually a renewal of a nation pollutant discharge elimination system (NPDES) permit first issued in 1990 and renewed in 2001. The San Diego Regional Board stated the new permit ‘specifies requirements necessary for the Co-permittees to reduce the discharge of pollutants in urban runoff to the maximum extent practicable (MEP).’ The San Diego Regional Board found that although the permittees had generally been implementing the management programs required in the 2001 permit, ‘urban runoff discharges continue to cause or contribute to violations of water quality standards. This [permit] contains new or modified requirements that are necessary to improve Co-permittees’ efforts to reduce the discharge of pollutants in urban runoff to the MEP and achieve water quality standards.’

"The permit requires the permittees to implement various programs to manage their urban runoff that were not required in the 2001 permit. It requires the permittees to implement programs in their own jurisdictions. It requires the permittees in each watershed to collaborate to implement programs to manage runoff from that watershed, and it requires all of the permittees in the region to collaborate to implement programs to manage regional runoff. The permit also requires the permittees to assess the effectiveness of their programs and collaborate in their efforts.

"The specific permit requirements involved in this case require the permittees to do the following:

"(1) As part of their jurisdictional management programs:

"(a) Sweep streets at certain times, depending on the amount of debris they generate, and report the number of curb miles swept and tons of material collected; "(b) Inspect, maintain, and clean catch basins, storm drain inlets, and other stormwater conveyances at specified times and report on those activities;

"(c) Collaboratively develop and individually implement a hydromodification management plan to manage increases in runoff discharge rates and durations;

"(d) Collectively update the best management practices requirements listed in their local standard urban stormwater mitigation plans (SUSMP's) and add low impact development best management practices for new real property development and redevelopment; "(e) Individually implement an education program using all media to inform target communities about [MS4s] and impacts of urban runoff, and to change the communities’ behavior and reduce pollutant releases to MS4s;

"(2) As part of their watershed management programs, collaboratively develop and implement watershed water quality activities and education activities within established schedules and by means of frequent regularly scheduled meetings;

"(3) As part of their regional management programs:

"(a) Collaboratively develop and implement a regional urban runoff management program to reduce the discharge of pollutants from MS4s to the maximum extent practicable;

"(b) Collaboratively develop and implement a regional education program focused on residential sources of pollutants;

"(4) Annually assess the effectiveness of the jurisdictional, watershed, and regional urban runoff management programs, and collaboratively develop a long-term effectiveness assessment to assess the effectiveness of all of the urban runoff management programs; and

"(5) Jointly execute a memorandum of understanding, joint powers authority, or other formal agreement that defines the permittees’ responsibilities under the permit and establishes a management structure, standards for conducting meetings, guidelines for workgroups, and a process to address permittees’ noncompliance with the formal agreement.

"The permittees estimated complying with these conditions would cost them more than $66 million over the life of the permit." ( San Diego Mandates I, supra , 18 Cal.App.5th at pp. 670-672,...