California Court of Appeals, First District, Second Division
CALIFORNIA BUILDING INDUSTRY ASSOCIATION, Plaintiff and Appellant,
STATE WATER RESOURCES CONTROL BOARD, Defendant and Respondent.
[REVIEW GRANTED BY CAL. SUPREME COURT]
San Francisco City and County Super. Ct. No. CGC-11-516510 Trial Judge Hon. Curtis E. A. Karnow.
[Copyrighted Material Omitted]
[Copyrighted Material Omitted]
[Copyrighted Material Omitted]
[Copyrighted Material Omitted]
[Copyrighted Material Omitted]
Rutan & Tucker and David P. Lanferman for Plaintiff and Appellant.
Kamala D. Harris, Attorney General, Paul D. Gifford and Robert W. Byrne, Assistant Attorneys General, Gavin G. McGabe, Molly K. Mosley, Robert E. Asperger and Tiffany Yee Deputy Attorneys General, for Defendant and Respondent.
Kline, P. J.
When parties discharge waste that could affect the quality of California’s water they must pay an annual permit fee set by the State Water Resources Control Board (the Board). (See Wat. Code, § 13260.) In 2011, two of the five seats of the Board were vacant; two of the remaining three Board members voted to approve an increase of fees for the 2011-2012 fiscal year. The California Building Industry Association (CBIA) asserts that section
183 required the fees to be approved by a majority of the five-person Board. CBIA also contends that the Board violated section 13260 and imposed an illegal tax because the fee imposed on the dischargers in the storm water program-one of eight program areas in the waste discharge permit program-exceeded the cost of regulating this particular program.
The Board responds that a majority of the Board’s quorum voted to approve the fee in compliance with section 181, the applicable statute. The charge was a valid regulatory fee under section 13260, according to the Board, because the total fees collected for all eight programs did not exceed the total cost to regulate the entire waste discharge permit program. The Board maintains that CBIA incorrectly interprets the law to impose a requirement that the fees charged to storm water dischargers must correspond exactly to the costs of regulating that one program.
We conclude that section 181, not section 183, applies to the Board’s adoption of the fee schedule and that the Board’s action complied with section 181. We also reject CBIA’s principal argument that the fees and regulating expenses for one particular program must be equal; we hold that section 13260 requires that the total fees collected from all waste dischargers must equal the costs of regulating the entire waste discharge permit program.
CBIA bears the burden of making a prima facie case showing the fee was invalid. (See California Farm Bureau Federation v. State Water Resources Control Bd. (2011) 51 Cal.4th 421, 436 [121 Cal.Rptr.3d 37, 247 P.3d 112] (Farm Bureau).) Courts have held that a regulatory fee is valid as long as the charges do not surpass the costs of regulating the program and the allocation of the fees to the payor is fair and reasonable. (See, e.g., Sinclair Paint Co. v. State Bd. of Equalization (1997) 15 Cal.4th 866, 878 [64 Cal.Rptr.2d 447, 937 P.2d 1350] (Sinclair Paint); San Diego Gas & Electric Co. v. San Diego County Air Pollution Control Dist. (1988) 203 Cal.App.3d 1132, 1146 [250 Cal.Rptr. 420]; Beaumont Investors v. Beaumont-Cherry Valley Water Dist. (1985) 165 Cal.App.3d 227, 235 [211 Cal.Rptr. 567].) Here, CBIA did not make a prima facie case that the charges surpassed the costs of regulating the program or that allocation of the fees was unfair or unreasonable. Accordingly, we affirm the judgment.
The Permit Fees for Water Dischargers
The Board, a state agency within the California Environmental Protection Agency, regulates water rights and water quality. (§§ 175, 179.) In 1969, the Legislature added to the Water Code, Assembly Bill No. 413 (1969 Reg.Sess.)
(Stats. 1969, ch. 482, p. 1045), which included the Porter-Cologne Water Quality Control Act (the Act), a statewide program for water quality control. (§ 13000 et seq.) Under this Act, nine regional boards, overseen by the Board, administer the state program in their respective regions. (§§ 13140, 13200 et seq., 13240, 13301.) The Act vests the Board with authority to formulate and adopt state policy for water quality control. (§ 13140.)
Parties who discharge waste or propose to discharge waste “that could affect the quality of the waters of the state” are required by the Act to file a “report of waste discharge” (i.e., a permit application) with the Board. (§ 13260, subds. (a)-(c).) Each party filing a permit application under the Act must pay an annual fee according to a fee schedule established by the Board. (§ 13260, subd. (d)(1)(A).) The fees collected are deposited in the Waste Discharge Permit Fund (the Fund), and “[t]he money in the [F]und is available for expenditure by” the Board “upon appropriation by the Legislature solely for the purposes of carrying out this division.” (Id., subd. (d)(2)(A).) “The total amount of annual fees collected... shall equal that amount necessary to recover costs incurred in connection with the issuance, administration, reviewing, monitoring, and enforcement of waste discharge requirements and waivers of waste discharge requirements.” (Id., subd. (d)(1)(B).)
The Board must annually adopt a water quality fee schedule by emergency regulation to establish the amount of fees each discharger must pay that year. (§ 13260, subd. (f)(1).) “The total revenue collected each year through annual fees shall be set at an amount equal to the revenue levels set forth in the Budget Act for this activity. The state board shall automatically adjust the annual fees each fiscal year to conform with the revenue levels set forth in the Budget Act for this activity. If the state board determines that the revenue collected during the preceding year was greater than, or less than, the revenue levels set forth in the Budget Act, the state board may further adjust the annual fees to compensate for the over and under collection of revenue.” (Ibid.)
The Schedule of Fees for the 2011-2012 Fiscal Year
For the 2011-2012 fiscal year, the annual Budget Act provided for $100, 672, 000 in spending from the Fund for the waste discharge permit program, but the projected revenue based on the existing fee schedule was $73, 070, 000. The Board staff calculated that it would have to increase the fees to compensate for a $27.6 million dollar shortfall, and proposed significant fee increases in the eight program areas within the waste discharge
program, including the storm water program area. With regard to the storm water program, the Board had collected substantially more revenues than it reported as “expenditures” for each of the seven fiscal years prior to the fiscal year 2011-2012. The net surplus over the seven years since fiscal year 2004-2005 was $23, 506, 000.
The Board’s staff proposed a 34.9 percent increase in fees for all storm water dischargers to generate fee revenue to equal the storm water program area’s budget of $26, 619, 000 for fiscal year 2011-2012. The Board scheduled a public hearing for September 19, 2011, for the consideration of new “emergency regulations” related to the proposed schedule of fees for fiscal year 2011-2012.
The Board currently consists of five members. (§ 175, subd. (a).) At the time of the hearing on September 19, 2011, two seats on the Board were vacant. The remaining three Board members conducting the hearing considered the opposition to the fee increase presented by CBIA and others. The Board adopted resolution No. 2011-0042, which approved the proposed new schedule of fees. The new fee schedule increased the storm water program fees by 34.9 percent; the total fee increase for all eight programs cumulatively averaged 37.8 percent. Two of the three Board members voted for the resolution, while the third abstained.
On September 22, 2011, the Board submitted the emergency regulation adopted at the Board meeting on September 19, 2011, to the Office of Administrative Law for approval. The emergency regulations were filed with the Secretary of State, and published in the California Code of Regulations.
On December 9, 2011, CBIA filed a petition for writ of mandate and a complaint for declaratory and injunctive relief. CBIA is a nonprofit corporation with 3000 members who are “active in all aspects of the home-building industry throughout California.” CBIA and its members “are required to seek waste discharge and storm water discharge permits from the Board[.]”
CBIA claimed the storm water fees were higher than the amount permitted under section 13260 and were not a valid regulatory fee. Additionally, it
claimed that section 183 requires a majority vote by all members of the Board to adopt a fee schedule, which did not occur; therefore the fee, according to CBIA, was invalid.
The trial court held a hearing on September 20, 2012, and later that day issued an order denying the writ petition. CBIA filed a motion for reconsideration, which was heard on October 25, 2012. The court denied this motion and filed its judgment in favor of the Board.
CBIA filed a timely notice of appeal. After filing their briefs, and at our request, the parties provided supplemental briefing on the applicability of sections 181 and 183.
I. The Number of Board Members Necessary for Approval of the Fee
As noted, in September 2011, when the Board adopted the fee schedule for fiscal year 2011-2012, two Board seats were vacant. Of the three remaining Board members conducting the hearing in September 2011, two voted to approve the fee schedule; the third member abstained.
CBIA contends that under the plain language of section 183, a majority of the Board members-three-had to approve the fee schedule, and the approval by two Board members was not procedurally valid. The Board responds that section 181, not section 183, applies to the Board’s action and the fee was validly approved pursuant to section 181 because two of the three Board members, a majority of the quorum, voted to adopt the fee schedule.
A. Standard of Review
Interpreting statutes is a question of law subject to de novo review. (In re Tobacco II Cases (2009) 46 Cal.4th 298, 311 [93 Cal.Rptr.3d 559, 207 P.3d 201.) " '[A]s in any case of statutory interpretation, our task is to determine afresh the intent of the Legislature by construing in context the language of the statute.’ [Citation.] In determining such intent, we begin with the language of the statute itself. [Citation.] That is, we look first to the words the Legislature used, giving them their usual and ordinary meaning. [Citation.] ‘If there is no ambiguity in the language of the statute, “then the Legislature is presumed to have meant what it said, and the plain meaning of the language governs.” ’ [Citation.] ‘But when the statutory language is ambiguous, “the court may examine the context in which the language appears, adopting the construction that best harmonizes the statute internally
and with related statutes.” ’ [Citation.] [¶] In construing a statute, we must also consider ‘ “the object to be achieved and the evil to be prevented by the legislation.” ’ [Citation.]” (People v. Superior Court (Zamudio) (2000) 23 Cal.4th 183, 192-193 [96 Cal.Rptr.2d 463, 999 P.2d 686].) We “ ‘avoid a construction that would produce absurd consequences, which we presume the Legislature did not intend.’ ” (In re Greg F. (2012) 55 Cal.4th 393, 406 [146 Cal.Rptr.3d 272, 283 P.3d 1160].)
B. The Plain Language of Section 181 and 183
Section 181, consistent with the common-law rule, provides that “[t]hree members of the board shall constitute a quorum for the purpose of transacting any business of the board.” (See Civ. Code, § 12 [“Words giving a joint authority to three or more public officers or other persons are construed as giving such authority to a majority of them, unless it is otherwise expressed in the Act giving the authority”]; Code Civ. Proc., § 15 [same].) “The almost universally accepted common-law rule... is, in the absence of a contrary statutory provision, a majority of a quorum constituted of a simple majority of a collective body is empowered to act for the body. Where the enabling statute is silent on the question, the body is justified in adhering to that common-law rule.” (F.T.C. v. Flotill Products, Inc. (1967) 389 U.S. 179, 183-184 [19 L.Ed.2d 398, 88 S.Ct. 401], fn. omitted; see also McCracken v. City of San Francisco (1860) 16 Cal. 591, 602.) Here, three Board members were present at the meeting and a majority of the quorum approved the fee schedule. Under section 181 and the common law, the Board’s approval of the fee schedule was procedurally valid.
CBIA claims that section 183 creates an exception to the common law rule set forth in section 181. According to CBIA, the plain language in the second paragraph of section 183 requires a majority of the Board, which is three members, to approve any final action of the Board.
Section 183 reads: “The board may hold any hearings and conduct any investigations in any part of the state necessary to carry out the powers vested in it, and for such purposes has the powers conferred upon heads of departments of the state by Article 2 (commencing with Section 11180), Chapter 2, Part 1, Division 3, Title 2 of the Government Code. [¶] Any hearing or investigation by the board may be conducted by any member upon authorization of the board, and he shall have the powers granted to the board by this section, but any final action of the board shall be taken by a majority of all the members of the board, at a meeting duly called and held. [¶] All hearings held by the board or by any member thereof shall be open and public.” (§ 183, fn. omitted.)
We begin with the presumption that, in the absence of an express provision, statutes do not alter the common law and should be construed to avoid conflict with common law rules. (Saala v. McFarland (1965) 63 Cal.2d 124, 130 [45 Cal.Rptr. 144, 403 P.2d 400]; see Li v. Yellow Cab Co. (1975) 13 Cal.3d 804, 815 [119 Cal.Rptr. 858, 532 P.2d 1226].) Accordingly, “ ‘[r]epeal by implication is recognized only where there is no rational basis for harmonizing two potentially conflicting laws.’ [Citation.]” (California Assn. of Health Facilities v. Department of Health Services (1997) 16 Cal.4th 284, 297 [65 Cal.Rptr.2d 872. 940 P.2d 323].)
The middle paragraph of section 183 authorizes a single member of the Board to conduct a hearing or investigation, but specifies that no final action can be taken at that hearing. The first part of the sentence permits hearings and investigations to be “conducted by any member upon authorization of” the Board, and the second part of the same sentence specifies “but any final action of the board shall be taken by a majority of all the members of the board, at a meeting duly called and held.” (§ 183, italics added.) The word “but” is a conjunction and is “used to express a difference or to introduce an added statement." (Cambridge Dictionaries Online (2015) <http://dictionary.cambridge.org/us/dictionary/american-english/but> [as of Apr. 20, 2015].) The use of the word “but” plainly ties the requirement of taking any final action by a majority to the first phrase, which refers to a hearing conducted by one Board member. Furthermore, the end of the sentence specifies that the final action will be taken by a majority of Board members “at a meeting duly called and held” (§ 183); no subsequent meeting would need to be called except in a situation where fewer than a quorum participated in the first hearing or meeting.
Focusing on the word “any, ” CBIA asserts that the “plain meaning” of section 183 is that “any final action” of the Board must be taken by a majority of the members of the Board. They insist that “ ‘[t]he word “any” is not ambiguous[.]’ ” (See People v. Dunbar (2012)209 Cal.App.4th 114, " 118 [146 Cal.Rptr.3d 673]; see id. at pp. 117-118 [statute targets the forgery of “ ‘any book of records[, ]’ ” and the use of the word “ ‘any’ ” indicated that it applied to public or private records, not just public records]; see also Department of California Highway Patrol v. Superior Court (2008) 158 Cal.App.4th 726, 736 [70 Cal.Rptr.3d 280] [use of “the word ‘any’... in a statute unambiguously reflects a legislative intent for that statute to have a broad application”].)
We agree that, standing alone, the word “any” is unambiguous. However, CBIA has not construed this word, as it must, in the context in which it appears. (See Lungren v. Deukmejian (1988) 45 Cal.3d 727, 735 [248 Cal.Rptr. 115, 755 P.2d 299].) We interpret “any, ” as we interpret all the words of the statute, in context, harmonizing to the extent possible all
provisions relating to the same subject matter. (County of Alameda v. Pacific Gas & Electric Co. (1997) 51 Cal.App.4th 1691, 1698 [60 Cal.Rptr.2d 187].) "[T]he word ‘any’ means without limit and no matter what kind.” (Delaney v. Superior Court (1990) 50 Cal.3d 785, 798 [268 Cal.Rptr. 753, 789 P.2d 934].) The plain meaning of this word in context is that all final actions following a hearing or investigation by one Board member must be “taken by a majority of all the members of the board” at another duly called meeting. (§ 183.) This construction is consistent with a broad rather than narrow application of the word “any” (see, e.g., Utility Cost Management v. Indian Wells Valley Water Dist. (2001) 26 Cal.4th 1185, 1191 [114 Cal.Rptr.2d 459, 36 P.3d 2] ["[t]he use of the word ‘any’ and the inclusion of several disjunctives to link essentially synonymous words all serve to broaden the applicability of the provision”]), as no particular action or subset of actions following the hearing or investigation of a single Board member is exempt from the requirement that final action can only be “taken by a majority of all the members of the board, at a meeting duly called and held.” (§ 183.) The Legislature by using the word “any” clearly intended to prevent the Board from ever being able to delegate final decision-making authority to one Board member.
Furthermore, our interpretation of section 183 is consistent with section 175. Subdivision (b) of section 175 states that members of the Board “shall, to the extent possible, be composed of members from different regions of the state” and subdivision (a) provides that the members must represent diverse specialties: “One of the members appointed shall be an attorney admitted to practice law in this state who is qualified in the fields of water supply and water rights, one shall be a registered civil engineer under the laws of this state who is qualified in the fields of water supply and water rights, one shall be a registered professional engineer under the laws of this state who is experienced in sanitary engineering and who is qualified in the field of water quality, and one shall be qualified in the field of water quality. One of the above-appointed persons, in addition to having the specified qualifications, shall be qualified in the field of water supply and water quality relating to irrigated agriculture. One member shall not be required to have specialized experience.” (§ 175, subd. (a).) Section 175 indicates that the Legislature appreciated that the hearings and investigations before the Board requires specialized knowledge and thus under section 183 the Legislature permits the Board to delegate the responsibility of a hearing or an investigation to a Board member with the requisite specialization. However, the expertise of that Board member does not enable him or her to make any final decision; any final action pursuant to this section requires a subsequent hearing and must “be taken by a majority of all the members of the board....” (§ 183.)
The interpretation urged by CBIA and Justice Richman creates an unnecessary conflict between sections 181 and 183. These statutes can clearly
be harmonized, as the express language of section 183 indicates that it applies only to situations in which the Board has delegated authority to one member to conduct a hearing or meeting. Accordingly, because a quorum participated in ...