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FA -21 Legislative Bill Action ............................... ............................... . index. This law was enacted in 1998 in response to a California Supreme Court decision in San Marcos Water District v. San Marcos Unified School District. In that case, the school district claimed a capacity fee imposed by the water district constituted a special assessment and, therefore, the water district lacked the statutory authority to impose the charge on the school district. The court held in favor of the school district and the Legislature responded with a law that authorized public utilities to impose "capital facilities fees" or "capacity charges" on public agencies with certain restrictions. A key problem that has arisen is the ava- lanche of litigation against utilities relates to the terminology: "capital facilities fees." The educa- tion community and other public agencies have asserted that any charge or fee that has a capital component is a capital facility fee, and thus subject to all of the statutory limitations embodied in the Government Code. The utility community has contended that connection fees and capacity fees are capital facility fees, but that utility rates (most of which contain a component to finance ongoing capital work) are not capital facility fees. AB 1051 • Clarify that "capital facilities fees" does not include utility service rates or commodity charges, and provide that a public agency may be charged for; and must pay utility rates contain- ing a capital component for the operation, mainte- nance, repair, replacement, or rehabilitation of facilities that benefit a public agency receiving utility services. • Clarify the requirement that any judicial action seeking a refund of a capital facilities fee, service rate or commodity charges, or challenging the validity of these fees, to be brought in accordance with specified law relating to validating proceed- ings; and require any action or proceeding to be commenced within 120 days of the effective date of the adoption of the fee, rate or charge. The bill would not increase the rates, charges, or fees associated with the cost of capital facilities to educational institutions or public agencies o relieve public utilities from the duty to negotiate a capital facilities fee (connection fee or capacity charge) when requested to do so by a school or public agency. Cities, especially those with utilities, should write letters of support to the author, their Assem- bly Member and members of the Assembly Local Government Committee, to which AB 1051 has been referred. If your city has been hit by a lawsuit over capital facility fees, please include that information and the potential cost to the city. Be sure and send the League a copy of your letter. Staff: Yvonne Hunter, Status: Pending in Assem- bly Local Government. Position: Support. HUMAN RESOURCES AB 136 (Kehoe) Workers' Compensation. Disability: Leave Of Absence. This bill extends temporary disability (Labor Code 4850) for safety officers to two years. This bill would have dramati- cally adverse effects on local agency budgets at a time when the economy and the state budget crisis are forcing layoffs and local service cut- backs. Under current law, firefighters and police officers are entitled to up to one year of temporary disability time off while receiving tax -free pay- ments of their full salary. Because the benefit is full salary, but tax free, the amount received by the injured officer significantly exceeds their normal take -home compensation. A temporarily injured safety employee under this law cannot retire until their "4850" time is exhausted. The local agency cannot permanently fill that position until the injured worker returns to modified work or retires. One missing employee severely hampers re- sponse models and emergency operations so overtime personnel are hired back to sustain staffing levels. Typically, a local agency backfills positions for the entire year, which increases costs extensively (full salary for the injured officer; time and a half for the replacement who is out on "4850" time). This occurs even when the agency Visit the League's Official Web Site-- www.cacities.org PRIORITY FOCUS /PAGE 11