After July 1, 2012, Local Agencies Have Limited Ability to Require Solid Waste Enterprises to Indemnify Them for Violations of Proposition 218
November 30, 2011, by Jennifer E. Faught
Some local agencies require garbage franchisees or permittees to indemnify them for liabilities related to Proposition 218. Agencies entering into or renewing solid waste franchise agreements on or after July 1, 2012 may take note that SB 841, signed by Governor Brown on October 9, 2011, limits the ability to enforce such requirements.
SB 841 adds new section of the California Public Resources Code (40059.2), which makes unenforceable the provisions of any local agency contract, permit or ordinance entered into or effective after July 1, 2012 that require a solid waste enterprise to indemnify the local agency for the agency's "failure to obtain voter or property owner approval" of a fee in violation of Article XIIIC or XIIID of the California Constitution. Similarly unenforceable will be any indemnity obligation that would require a solid waste enterpriseto refund to its customers fees that were collected on behalf of or remitted to the local agency, where the fees were imposed in violation of the above constitutional provisions, as determined by a court. Such indemnity provisions in current permits or agreements remain enforceable.
The new prohibition targets specific indemnity requirements; other forms of indemnification related to fees for solid waste services may still be permissible.
The text of SB 841 may be found here.