Cal. Bldg. Indus. Ass'n v. State Water Res. Control Bd.

Department of Finance v. Commission on State Mandates (2016) 1 Cal.5th 749 , 755-756, 207 Cal.Rptr.3d 44 , 378 P.3d 356 .)

To finance the permit programs, the Legislature authorized the imposition of a

when the Board takes any final action, including the adoption of a fee schedule. The dissent concluded in error.

We review questions of statutory construction de novo. Our primary task "in interpreting a statute is to determine the Legislature's intent, giving effect to the law's purpose. [Citation.] We consider first the words of a statute, as the most reliable indicator of legislative intent. [Citation.]" ( Tuolumne Jobs & SmallBusiness Alliance v. Superior Court (2014) 59 Cal.4th 1029 , 1037, 175 Cal.Rptr.3d 601 , 330 P.3d 912 .) We construe the statute's words in context, harmonizing statutory provisions to avoid absurd results. ( John v. Superior Court (2016) 63 Cal.4th 91 , 96, 201 Cal.Rptr.3d 459 , 369 P.3d 238 .) If the statutory text is susceptible to more than one reasonable construction, we may consider extrinsic aids such as legislative history to facilitate our interpretative analysis. ( Fluor Corp. v. Superior Court (2015) 61 Cal.4th 1175 , 1198, 191 Cal.Rptr.3d 498 , 354 P.3d 302 .)

With those principles in mind, we agree with the majority below. Section 183's requirement that a final action "be taken by a majority of all the members of the board" only applies when the Board has authorized a single member to conduct a hearing or investigation under section 183. This conclusion is rooted in the language and structure of section 183 when read in the context of section 181 and other provisions of the Water Code.

To understand the mechanics of this scheme, it is helpful to begin with section 181, which provides that three members of the Board constitute a quorum for the purpose of transacting any Board business. The Water Code does not define the phrase "transacting any business," but the applicable regulations provide illumination. The Board's business includes: holding public meetings ( Cal. Code Regs., tit. 23, § 647 et seq. ); holding adjudicative proceedings and issuing decisions ( Cal. Code Regs., tit. 23, § 648 et seq. ); conducting rulemaking and informational proceedings ( Cal. Code Regs., tit. 23, § 649 et seq. ); and adopting, amending, and repealing rules and regulations ( ibid .). For each of these functions, section 181 establishes a quorum threshold which is consistent with the common law rule. Section 183 contains a limited exception to the quorum requirement for a specific Board function. It permits the Board to authorize a single member to conduct a hearing or an investigation, and gives that member all the powers granted to the Board, but it requires that "any final action ...

could be taken by two members under the rule permitting a board to act by a majority of a quorum. (28 Ops.Cal.Atty.Gen., supra , 260.) The Attorney General found that the language requiring final action by the Board as a whole "simply constitute[d] a proviso to the clause [that authorized] the board to delegate all its powers to any one of its members. The phrase constitutes a command only that the board not delegate to one member its final decision-making power." ( Ibid .)

Opinions of the Attorney General, " 'while not binding, are entitled to great weight. [Citations.] In the absence of controlling authority, these opinions are persuasive "since the Legislature is presumed to be cognizant of that construction of the statute." ' " ( California Assn. of Psychology Providers v. Rank (1990) 51 Cal.3d 1 , 17, 270 Cal.Rptr. 796 , 793 P.2d 2 , quoting Napa Valley Educators' Assn. v. Napa Valley Unified School Dist . (1987) 194 Cal.App.3d 243 , 251, 239 Cal.Rptr. 395 .) If the Legislature disagreed with the Attorney General's opinion, it could have drafted section 183 differently. (See Rank , at p. 17, 270 Cal.Rptr. 796 , 793 P.2d 2 .) It did not do so.

Plaintiff and the dissent below rely heavily on Senator Cologne's letter and the internal committee report. As to the letter, we do not consider

the storm water permit fee on two statutory grounds. First, plaintiff alleges the fee violated section 13260, subdivision (d)(1)(B), which provides that "[t]he total amount of annual fees collected pursuant to this section 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." Second, plaintiff alleged the Board violated section 13260, subdivision (f)(1), which provides that "[i]f 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 ... adjust the annual fees to compensate for the over and under collection of revenue."

In support of its statutory claims, plaintiff points to evidence that storm water permit fee revenues exceeded storm water program area expenditures

in article XIII A of the California Constitution (article XIII A).

a. Article XIII A

In June 1978, voters passed Proposition 13, adding article XIII A to the state Constitution. (

Whether a statute imposes a fee or a tax is a question of law to be decided upon an independent review of the record. ( Farm Bureau , supra , 51 Cal.4th at p. 436, 121 Cal.Rptr.3d 37 , 247 P.3d 112 , citing Sinclair Paint , supra , 15 Cal.4th at p. 874, 64 Cal.Rptr.2d 447 , 937 P.2d 1350 .) The plaintiff must initially establish a prima facie case that the fee is invalid. ( Farm Bureau , at p. 436, 121 Cal.Rptr.3d 37 , 247 P.3d 112 .) If the plaintiff does so, the state must produce evidence

establish a prima facie case: (1) that the amount of the waste discharge permit fees exceeded the reasonable cost of administering the permit program; and (2) that the fees were allocated in an unreasonable manner. It also held that, even if a prima facie showing had shifted the burden of production to the Board, the record demonstrated that the program's costs would exceed projected fee revenues and that the fees were fairly allocated.

Plaintiff argues the trial court and the Court of Appeal erred by applying Farm Bureau 's burden-shifting framework because, after the adoption of Proposition 26, the state bears the burden of proof in all actions challenging fees. Plaintiff then argues that the Board failed to show: (1) that the amount of the storm water permit fee did not exceed the reasonable costs of funding the storm water program area; and (2) that the fees were fairly allocated.

approximately $6 to $8 million in that year. Combined, these actions created a substantial funding shortfall that the Board had to recover through increased fee revenues.

Plaintiff next turns its focus to the storm water permit fee, arguing that it would exceed the costs attributable to the storm water program area. This argument fails for the same reason that plaintiff's statutory argument regarding costs failed. A valid regulatory fee may not exceed the estimated costs of the relevant regulatory activity. ( Sinclair Paint , supra , 15 Cal.4th at p. 878, 64 Cal.Rptr.2d 447 , 937 P.2d 1350 ; accord Farm Bureau , supra , 51 Cal.4th at p. 438, 121 Cal.Rptr.3d 37 , 247 P.3d 112 .) Here, the relevant regulatory activity includes all eight program areas funded by the permit fees, not just the storm water program area. All of the program areas are components of the Board's broad duty to regulate parties who discharge waste. (§ 13263, subd. (a).) As noted, from fiscal year 2004-05 through fiscal year 2010-11, total program costs exceeded total permit

see also Professional Scientists , at p. 950, 94 Cal.Rptr.2d 535 .)

From fiscal year 2004-05 through fiscal year 2010-11, 23 percent of all program area expenditures were attributable to the

votes for the Board to take any final action. It contends the Water Code supplants the general rule regarding the number of votes required for action by a collective body. Those arguments fail.

The "almost universally accepted common-law rule is [that] ... in the absence of a contrary statutory provision, a majority

board." (Stats. 1969, ch. 800, § 1, p. 1617, italics added.) The bill's legislative history includes a letter by Senator Gordon Cologne to the Lieutenant Governor, Ed Reinecke. Embedded within that letter is an internal senate committee report discussing the intent of the amendment. The quoted report states: "The present law is ambiguous as to whether final action by the state board always requires a majority consisting of three members of the five-man state board, or whether the majority required is only that of the 'members of the board (present) at a meeting duly called and held.' In the latter case three members could constitute a quorum, and the vote of two members would constitute a majority of the members at the meeting. An amendment has been made to this section to remove the ambiguity by requiring that final board action shall always require the

shall be taken by a majority of all the members of the board." (§ 183.)

California Teachers Assn. v. San Diego Community College Dist . (1981) 28 Cal.3d 692 , 700, 170 Cal.Rptr. 817 , 621 P.2d 856 .) A contrary rule would allow an individual legislator to characterize an enactment in ways he or she might have preferred or intended but for which there was not sufficient legislative support. Any conclusion that the Cologne letter was virtually conclusive proof of legislative intent ignores this long-standing principle.

As to the quoted report, the dissent overstates its relevance. The report relates only to the amendment of section 183. It does not mention section 181. As explained, section 183's rule only applies when the Board has delegated its powers to a single member. Senator Cologne's letter and the report can be read as relating the rule that applies only when such a delegation has occurred. Additionally, the letter and report were printed in the Senate Journal two days after the Senate passed the amendment. Thus, it is not clear that Senate members or staffs read the letter or the accompanying report before passing the amendment.

Plaintiff also argues Marina County Water Dist. v. State Water Resources Control Bd . (1984) 163 Cal.App.3d 132 , 209 Cal.Rptr. 212 supports its position. But the Marina court did not interpret section 183. It simply mentioned the statute in discussing an earlier judgment against the Board. ( Marina , at p. 136, 209 Cal.Rptr. 212 .) It is axiomatic that cases are not authority for propositions that are not considered. ( Sonic-Calabasas A, Inc. v. Moreno (2013) 57 Cal.4th 1109 , 1160, 163 Cal.Rptr.3d 269 , 311 P.3d 184 .)

In adopting the fee schedule, the Board did not delegate to a single member the authority to conduct an investigation or hold a hearing. As a result, section 183's final action requirement did not constrain the Board's authority to adopt the schedule. Section 181's quorum threshold was satisfied. Plaintiff's procedural challenge to the fee schedule fails.

1. Statutory Challenges to Storm Water Fee

The fee schedule included eight different waste discharge permit fees. Each corresponded to a Board-created permit category, referred to as a program

Jacks v. City of Santa Barbara (2017) 3 Cal.5th 248 , 258, 219 Cal.Rptr.3d 859 , 397 P.3d 210 ( Jacks ).) The "initiative's purpose was to assure effective real property tax relief by means of an 'interlocking "package" ' consisting of a real property tax rate limitation (art. XIII A, § 1), a real property assessment limitation (art. XIII A, § 2), a restriction on state taxes (art. XIII A, § 3), and a restriction on local taxes (art. XIII A, § 4)." ( Sinclair Paint Co. v. State Bd. of Equalization (1997) 15 Cal.4th 866 , 872, 64 Cal.Rptr.2d 447 , 937 P.2d 1350 ( Sinclair Paint ).) Here, we are concerned with section 3 of article XIII A, the restriction on state taxes.

When adopted, section 3 of article XIII A provided in relevant part that "any changes in State taxes enacted for the purpose of increasing revenues collected pursuant thereto ... must be imposed by an Act passed by not less than two-thirds of all members elected to each of the two houses of the Legislature ...." (Former art. XIII A, § 3.) The term "tax," however, was not defined by Proposition 13. As a result, determining whether a levy was a fee or a tax became "a recurring chore" for California courts. (

Board was authorized to adopt the fee schedule by emergency regulation. ( Id . at pp. 433-434, 121 Cal.Rptr.3d 37 , 247 P.3d 112 .) The plaintiffs alleged the statutory scheme and implementing regulations violated article XIII A on their face and as applied. ( Farm Bureau , at p. 435, 121 Cal.Rptr.3d 37 , 247 P.3d 112 .)

Guide, Gen. Elec. (Nov. 2, 2010) text of Prop. 26, § 1, subd. (e), p. 114.)

Proposition 26 made three significant amendments. First, it modified the language of article XIII A's operative provision. The original formulation required two-thirds approval for "any changes in State taxes enacted for the purpose of increasing revenues." (Art. XIII A, former § 3, italics added.) The

argues the Board's adoption of the fee schedule by emergency regulation, which it was authorized to do by section 13260,

fee revenues by $10.7 million. Moreover, for fiscal year 2011-12, estimated program costs were $101.4 million, while projected revenues were $100.7 million. Thus, the record demonstrates that fee revenues did not and would not exceed the reasonable costs of administering the entire permit program.

The second question under Sinclair Paint is whether the fee is used to generate excess revenue , that is, to generate more revenue than necessary to pay for the regulatory program. (See Sinclair Paint , supra , 15 Cal.4th at p. 876, 64 Cal.Rptr.2d 447 , 937 P.2d 1350 ; accord Farm Bureau , supra , 51 Cal.4th at p. 438, 121 Cal.Rptr.3d 37 , 247 P.3d 112 ["[w]hat a fee cannot do is exceed the reasonable cost of regulation with the generated surplus used for general revenue collection"].) There was no evidence that the approved fees were designed to generate excess revenue. Instead, the scheme explicitly limited fees to the amount necessary to recover the administrative costs of the permit program. ( § 13260, subd. (d)(1)(B).) Moreover, all fees are deposited in the Permit Fund and can only be spent to implement the Porter-Cologne Water Quality Control Act. ( § 13260, subd. (d)(2)(A).) The fees cannot be spent for unrelated purposes.

(

concurrence of a majority of all the members of the board, not merely a majority of a quorum." (3 Sen. J. (1969 Reg. Sess.) p. 5154.) The dissent concluded that the letter and the report were "virtually conclusive proof" that section 183 was intended to override the general rule and section 181

Read together, the plain language and structure of the two sections support the conclusion that section 183's final action requirement only applies when the Board has delegated its hearing or investigation powers to a single member. By its own terms, section 183 relates only to the Board's power to hold hearings and conduct investigations. It does not mention the Board's other functions. Its final action requirement must be read in that context. In addition, as the majority below correctly noted, the use of the conjunction "but" in section 183 links the phrase containing the final action requirement to the phrase that refers to a hearing conducted by a single member. The majority below also correctly noted that there would be no need for a final action to be taken at a subsequent meeting, as section 183 requires, except when "fewer than a quorum participated in the first hearing or meeting." When read in the context of section 181 and the applicable regulations, it is evident that the final action requirement is meant to prevent the Board from delegating its final decisionmaking authority to a single member.

The Attorney General reached this same conclusion in a 1956 opinion. (28 Ops.Cal.Atty.Gen. 259 (1956).) When that opinion was issued, the Board had three members. ( Id . at p. 260.) Former section 193, like current section 183, permitted the Board to authorize a single member to conduct a hearing or investigation, but required that any final action "be taken by the board as a whole." (Former § 193, added by Stats. 1956, 1st Ex. Sess., ch. 52, § 7, p. 426, and renumbered as § 183 by Stats. 1957, ch. 1932, § 32, p. 3374.) The question presented to the Attorney General was whether former section 193 required that all three members participate in every final action, or whether some final actions

the motives or understandings of individual legislators who voted for a statute when attempting to construe it. ( Ross v. RagingWire Telecommunications, Inc. (2008) 42 Cal.4th 920 , 931, 70 Cal.Rptr.3d 382 , 174 P.3d 200 .) This is true even when the legislator who authored the bill purports to offer an opinion. This rule exists because there is " ' "no guarantee ... that those who supported [the] proposal shared [the author's] view of its compass." ' " ( Id . at p. 931, 70 Cal.Rptr.3d 382 , 174 P.3d 200 , quoting

California Assn. of Prof. Scientists v. Department of Fish & Game (2000) 79 Cal.App.4th 935 , 939, 94 Cal.Rptr.2d 535 ( Professional Scientists ).)

In Sinclair Paint , supra , 15 Cal.4th 866 , 64 Cal.Rptr.2d 447 , 937 P.2d 1350 , this court addressed the distinction between taxes, which require two-thirds approval, and regulatory fees, which do not. We held that article XIII A does not restrict the state's authority to impose a bona fide regulatory fee. ( Sinclair Paint , at p. 881, 64 Cal.Rptr.2d 447 , 937 P.2d 1350 .) But a levy only qualifies as a regulatory fee if (1) the amount of the fee does not exceed the reasonable costs of providing the services for which it is charged, (2) the fee is not levied for unrelated revenue purposes, and (3) the amount of the fee bears a reasonable relationship to the burdens created by the feepayers' activities or operations. ( Ibid . ) If those conditions are not met, the levy is a tax. As one appellate court explained, a "reasonable way to achieve Proposition 13's goal of tax relief is to shift the costs of controlling ... sources of pollution from the tax-paying public to the pollution-causing industries themselves." ( San Diego Gas & Electric Co. v. San Diego County Air Pollution Control Dist . (1988) 203 Cal.App.3d 1132 , 1148, 250 Cal.Rptr. 420 .) But the state may not charge an amount exceeding the costs it incurs because, if it were so allowed, "the imposition of fees would become a vehicle for generating revenue independent of the purpose of the fees." ( Jacks , supra , 3 Cal.5th at p. 261, 219 Cal.Rptr.3d 859 , 397 P.3d 210 .)

We later reaffirmed these principles in California Farm Bureau Federation v. State Water Resources Control Bd . (2011) 51 Cal.4th 421 , 121 Cal.Rptr.3d 37 , 247 P.3d 112 ( Farm Bureau ). That case involved a statutory and regulatory scheme identical in many respects to this one. Farm Bureau arose out of a challenge not to storm water permit fees, but to water rights permit fees. ( Id . at p. 429, 121 Cal.Rptr.3d 37 , 247 P.3d 112 .) These fees are also set by the Board. ( Ibid . ) As with waste discharge permits, the Board was required to adopt a fee schedule for water rights permit holders. ( Id. at pp. 431-432, 121 Cal.Rptr.3d 37 , 247 P.3d 112 .) The total amount of fees was to be equal to the cost of administering the permit program, and total fee revenue was to match the revenue levels set out in the Budget Act. ( Farm Bureau , at p. 432, 121 Cal.Rptr.3d 37 , 247 P.3d 112 .) All fees were deposited in the Water Rights Fund and could only be used to carry out the work of the Water Rights Division. ( Id . at p. 433, 121 Cal.Rptr.3d 37 , 247 P.3d 112 .) Like here, the

provision now reads: "Any change in state statute which results in any taxpayer paying a higher tax must be imposed by an act passed by not less than two-thirds of all members elected to each of the two houses of the Legislature ...." (Art. XIII A, § 3, subd. (a), italics added.) Second, the term "tax," as used in article XIII A, section 3, is now defined as "any levy, charge, or exaction of any kind imposed by the State," with five qualified exceptions. (Art. XIII A, § 3, subd. (b).) If a levy meets the requirements of an exception, the levy is not a tax as a matter of law. One of those exceptions is for charges "imposed for the reasonable regulatory costs to the State incident to issuing licenses and permits, performing investigations, inspections, and audits ... and the administrative

violated constitutional restrictions on regulatory fees. For its part, the Board does not argue it was free from the restraints of article XIII A in setting the fees. Instead, it urges that the burden shifting added by Proposition 26 should not apply because Proposition 26's amendments were not meant to apply retroactively, except in limited circumstances not present here. (See ante , 232 Cal.Rptr.3d at p. 76, fn. 11, 416 P.3d at p. 64, fn. 11, fn. 11.) The Board contends that the burden of proof framework described in Farm Bureau should apply.

The Court of Appeal agreed with the Board. It reasoned that plaintiff had relied on cases applying Proposition 13, which required a two-thirds vote "to impose 'any change in state taxes enacted for the purpose of increasing revenues.' (Former Cal. Const., art. XIII A, § 3.) However, Proposition 26 modified Proposition 13 [in 2010]. The current provision ... restricts '[a]ny change in state statute which results in any taxpayer paying a higher tax ....' ( Cal. Const., art. XIII A, § 3.) The Board's fee schedule is not a 'change in state statute,' and this constitutional provision does not apply. (See Western States Petroleum Assn. v. Board of Equalization (2013) 57 Cal.4th 401 , 423-424, 159 Cal.Rptr.3d 702 , 304 P.3d 188 .) Rather than a constitutional challenge to the fee, [plaintiff's] argument is essentially that, under the case law applying the original language of Proposition 13, the Board's imposition is not a valid regulatory fee, but an illegal tax."

Based on that reasoning, the Court of Appeal determined that Proposition 26, including its burden of proof modification, did not apply to plaintiff's action. It evaluated plaintiff's claim under the framework from Farm Bureau , and held that plaintiff had failed to

We agree with the Court of Appeal's conclusion, but under slightly different reasoning. The Board concedes the state Constitution limited its authority to impose these fees. Indeed, the Board admits the restrictions on regulatory fees described in Sinclair Paint and subsequently codified in article XIII A (as amended by Prop. 26) applied to its adoption of the fee schedule. Thus, the parties agree that the fees must not exceed the reasonable costs of the permit program, must not be levied for unrelated revenue purposes, and must be allocated in a reasonable manner. In terms of article XIII A's restrictions on the Board, the only question truly in dispute is which party bore the burden of proof.

Plaintiff argued in both of its trial briefs and in its opening appellate brief

needed was the Legislature's decision to discontinue subsidies it had been paying to the Permit Fund. In fiscal year 2010-11, the Legislature had authorized an $18.3 million subsidy from the general fund to the Permit Fund and had separately provided $3.1 million to support the NPDES and the irrigated lands program areas. Those payments were discontinued in fiscal year 2011-12. In addition, the state ended its temporary furlough program in fiscal year 2011-12. As a consequence, Board staff projected that permit-related staffing costs would increase by

The final question is that of fair allocation. ( Equilon Enterprises LLC v. Board of Equalization (2010) 189 Cal.App.4th 865 , 870, 117 Cal.Rptr.3d 223 ( Equilon Enterprises ).) The first two questions involve the size of the fee revenue pie. The allocation question addresses how the pie is sliced. This third question considers whether any class of feepayers is shouldering too large a portion of the associated regulatory costs. Plaintiff argues the fees were not fairly allocated because storm water permit fee payers had historically paid more than the costs of the storm water program area, while payers of the other seven permit fees had historically paid less than their program area costs. In other words, plaintiff argues that storm water permit holders had been subsidizing costs that should have been borne by holders of the other seven permits. The Court of Appeal held plaintiff failed to make a prima facie case. We agree.

The record demonstrates that permit fees were reasonably allocated among fee payers. A "regulatory fee, to survive as a fee, does not require a precise cost-fee ratio." ( Professional Scientists , supra , 79 Cal.App.4th at p. 950, 94 Cal.Rptr.2d 535 .) Fees must bear a fair or reasonable relationship to the fee payers' burdens on or benefits from the regulatory activity. ( Farm Bureau , supra , 51 Cal.4th at p. 437, 121 Cal.Rptr.3d 37 , 247 P.3d 112 .) But "[r]egulatory fees, unlike other types of user fees, often are not easily correlated to a specific, ascertainable cost." ( Professional Scientists , at p. 950, 94 Cal.Rptr.2d 535 ; accord Moore v. City of Lemon Grove (2015) 237 Cal.App.4th 363 , 368, 188 Cal.Rptr.3d 130 .) As a consequence, an "inherent component of reasonableness in this context is flexibility." ( Equilon Enterprises , supra , 189 Cal.App.4th at p. 883, 117 Cal.Rptr.3d 223 ; accord Farm Bureau , at p. 442, 121 Cal.Rptr.3d 37 , 247 P.3d 112 .) So long as "there is a reasonable basis in the record for the manner in which the fee is allocated among those responsible for paying it," a regulatory fee will not be deemed an unconstitutional tax under article XIII A. ( Equilon Enterprises , at p. 870, 117 Cal.Rptr.3d 223 ;

projecting future permit fee revenues and expenditures, this difference is reasonable and passes muster under the flexible standard that applies to regulatory fees.

Moreover, we note that the gap between storm water permit fee revenues and storm water program area expenses had narrowed in the years leading up to this action. In fiscal years 2004-05, 2005-06, and 2006-07, permit fee revenues exceeded program area expenses by $5.2 million, $4.8 million, and $4.7 million, respectively. In fiscal year 2010-11, the year immediately preceding plaintiff's challenge, storm water permit fee revenues exceeded storm water program area expenses by only $1.1 million. On this record, taking into account the imprecision inherent in predictions, there is insufficient evidence to support a finding that the Board employed a faulty methodology to allocate fees or intended to subsidize other program areas with storm water permit fee revenues.

In challenging the allocation of permit fees, plaintiff relies on Capistrano Taxpayers Assn., Inc. v. City of San Juan Capistrano (2015) 235 Cal.App.4th 1493 , 186 Cal.Rptr.3d 362 ( Capistrano ). But that case is distinguishable. It involved a water district's tiered rate structure, which was imposed on property owners and increased progressively in relation to usage. ( Capistrano , at pp. 1499-1501, 186 Cal.Rptr.3d 362 .) The Court of Appeal concluded the district had failed to show its property-related fees did not exceed the cost of services attributable to each parcel. ( Id . at pp. 1506-1508, 186 Cal.Rptr.3d 362 .)

As to allocation, the restrictions on property-related fees in article XIII D of the state Constitution are different from those imposed on regulatory fees by article XIII A. Article XIII D provides that the amount of a property-related fee "shall not exceed the proportional cost of the service attributable to the parcel." ( Cal. Const., art. XIII D, § 6, subd. (b)(3).) In Capistrano , the water district conceded that its tiered pricing did not reflect increased costs and that it "effectively used revenues from the top tiers to subsidize below-cost rates for the bottom tier." ( Capistrano , supra , 235 Cal.App.4th at p. 1499, 186 Cal.Rptr.3d 362 .) Under article XIII A, all that is required is that the record demonstrate a reasonable basis for the manner in which the fee is allocated among those who pay it. ( Equilon Enterprises , supra , 189 Cal.App.4th at p. 870, 117 Cal.Rptr.3d 223 .) The Court of Appeal's reasoning in Capistrano does not compel a different conclusion under article XIII A.