CA SB646

Revises the definition of "fee" under the Mitigation Fee Act for water and sewer connections to require that the estimated reasonable cost of labor and materials bears a fair or reasonable relationship to the payor's burdens on, or benefits received from, the connection.

Maintains existing requirement that local agencies cannot impose connection fees or capacity charges exceeding the estimated reasonable cost of providing the service unless approved by two-thirds vote of electors.

Requires local agencies to deposit capacity charges in separate capital facilities funds, keep them separate from other agency moneys (except for investments), and expend them solely for their intended purpose.

Mandates local agencies make public annual financial reports within 180 days of fiscal year-end detailing charges collected, fund balances, public improvements funded, and any interfund transfers or loans from the capital facilities fund.

Specifies that judicial challenges to fee or capacity charge ordinances must be brought pursuant to Section 66022 of the Government Code.