Legal Alerts

Funding Sources Potentially Impacted for Cities and Counties

In a much anticipated decision with potentially far-reaching implications for cities and counties across California, the California Supreme Court determined that certain requirements in municipal stormwater permits are state mandates subject to reimbursement under the California Constitution. Under Article XIII B §6, if the Legislature or a state agency requires a local government to provide a new program or higher level of service, the local government is entitled to reimbursement from the State for the associated costs. Reimbursement is not available if the new program or increased service is mandated by a federal law.

Cities (and the County) in Los Angeles County challenged portions of their stormwater permit as new programs or higher levels of service. The State argued that the requirements were mandated by the federal Clean Water Act. Siding with the County and the cities, the Supreme Court determined that the challenged inspection and trash receptacle requirements are state mandates subject to reimbursement by the State. The Court reasoned that federal law did not require the State to impose any specific permit conditions, but gave the State discretion to determine which specific controls were necessary. The State failed to show that the challenged conditions were mandated by federal law.

A number of similar claims have been on hold with the California Commission on State Mandates (the deciding agency) while the Supreme Court considered the challenge. Now that a decision has been issued, these test claims will begin moving through the Commission. As a result of the Court’s decision, the State will be required to present a stronger argument for how the challenged requirements are federal, rather than state, mandates. For municipalities seeking to comply with and fund requirements in stormwater permits, this decision may open up a new and long-awaited source of funding.

If you have any questions about this opinion or how it may impact your organization, please contact the attorney authors of this Legal Alert listed to the right in the firm’s Environmental Law & Natural Resources practice group, or your BB&K attorney.

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