BILL ANALYSIS Ó AB 402 Page 1 ASSEMBLY THIRD READING AB 402 (Dodd) As Amended May 18, 2015 Majority vote ------------------------------------------------------------------- |Committee |Votes |Ayes |Noes | | | | | | | | | | | |----------------+------+--------------------+----------------------| |Local |6-3 |Gonzalez, Alejo, |Maienschein, Linder, | |Government | |Chiu, Cooley, |Waldron | | | |Gordon, Holden | | | | | | | | | | | | ------------------------------------------------------------------- SUMMARY: Establishes a pilot program, until January 1, 2021, for the Napa, Sonoma, and San Bernardino local agency formation commissions (LAFCOs) to authorize a city or district to extend services outside of boundaries for additional purposes beyond responding to a threat to public health or safety. Specifically, this bill: 1)Allows the Napa, Sonoma, and San Bernardino LAFCOs, until January 1, 2021, to authorize a city or district to provide new or extended services outside its jurisdictional boundaries and outside its sphere of influence, if consistent with adopted policy, to support existing or planned uses involving public or AB 402 Page 2 private properties, subject to approval at a noticed public hearing where LAFCO makes all of the following determinations: a) The extension of service or services deficiency was identified and evaluated in a review of municipal services (MSR) prepared, pursuant to existing law; b) The extension of service will not result in adverse impacts on open space or agricultural lands, or have growth inducing impacts; and, c) A later change of organization involving the subject territory and its affected agency is not feasible under existing law or desirable based on the adopted policies of LAFCO. 2)Defines planned use to mean any project that is included in an approved specific plan. 3)Requires the Napa, Sonoma, and San Bernardino LAFCOs to submit a report to the Legislature on their participation in the pilot program, including how many requests for extension of services were received pursuant to the authority granted by this bill, and the action by the LAFCO to approve, disapprove, or approve with conditions the extension of services. 4)Declares that a special law is necessary and that a general law cannot be made applicable within the meaning of the California Constitution because of the unique circumstances in Napa, Sonoma, and San Bernardino. 5)Provides that existing law, which allows LAFCO to authorize a AB 402 Page 3 city or district to provide new or extended services outside it jurisdictional boundary and outside its sphere of influence to respond to an existing or impending threat of public health and safety, must be consistent with adopted policy. 6)Makes other technical and conforming changes. EXISTING LAW: 1)Establishes the Cortese-Knox-Hertzberg Local Government Reorganization Act of 2000 (Cortese-Knox-Hertzberg Act), which defines the procedures for the organization and reorganization of cities, counties, and special districts. 2)Authorizes a city or district to provide new or extended services by contract or agreement outside its jurisdictional boundaries, if it requests and receives written approval from the LAFCO in the affected county. 3)Allows a LAFCO to authorize a city or district to provide new or extended services outside its boundaries, but within its sphere of influence in anticipation of a later change of organization. 4)Allows a LAFCO to authorize a city or district to provide new or extended services outside its boundaries and outside its sphere of influence to respond to an existing or impending threat to AB 402 Page 4 the public health or safety of the residents of the affected territory, if both of the following requirements are met: a) The entity applying for the contract has provided LAFCO with documentation of a threat to the health and safety of the public or the affected residents; and, b) The LAFCO has notified any alternate service providers, including any water corporation or sewer system corporation that has filed a map and statement of service capabilities with the LAFCO. 5)Establishes requirements and a timeframe for an executive officer, upon receipt of a request for approval by a city or district of a contract to extend services outside boundaries. Requires, upon receipt of a complete request, the request to be placed on the agenda or a LAFCO meeting, unless the LAFCO has delegated the approval of requests to the executive commissioner. 6)Requires the LAFCO or executive officer to approve, disapprove, or approve with conditions the contract for extended services. Allows an applicant, if a contract is disapproved or approved with conditions, to request reconsideration and cite the reasons why. 7)Provides exemptions to the requirement in existing law for specified contracts or agreements, including contracts or agreements solely involving two or more public agencies, contracts for the transfer of nonpotable or nontreated water, and contracts or agreements solely involving the provision of surplus water to agricultural lands and facilities. AB 402 Page 5 FISCAL EFFECT: None COMMENTS: 1)Current Law. The Cortese-Knox-Hertzberg Act delegates the Legislature's power to control the boundaries of cities and special districts to LAFCOs. The Legislature created LAFCOs to discourage urban sprawl, preserve open space and prime agricultural lands, encourage the orderly formation and development of local agencies, and to ensure the efficient provision of government services. The Cortese-Knox-Hertzberg Act requires that cities and districts must get a LAFCO's written approval before they can serve territory outside their boundaries pursuant to AB 1335 (Gotch), Chapter 1307, Statutes of 1993. This requirement was established because of a concern that some cities and districts might be circumventing LAFCO review by signing contracts to provide services outside their boundaries without annexing the territory. AB 1335, however, recognized the need to accommodate unexpected local conditions and several exemptions were established. LAFCO approval is not required for contracts or agreements solely involving two or more public agencies where the public service to be provided is an alternative to, or substitute for, public services already being provided by an existing public service provider and where the level of service to be provided is consistent with the level of service contemplated by the exiting service provider. In 1999, the Legislature expanded these provisions to allow services outside spheres of influence to correct public health and safety problems, pointing to failing septic tanks and water wells to exemplify the necessity for the change. 2)Bill Summary. This bill establishes a pilot program for the Napa, Sonoma, and San Bernardino LAFCOs, until January 1, 2021, to allow service extensions outside spheres of influence and AB 402 Page 6 jurisdictional boundaries, beyond health and safety issues. Under this bill, Napa, Sonoma and San Bernardino LAFCOs may authorize, if consistent with their adopted policies, a city or district to extend services to support existing or planned uses, as defined by this bill, involving public or private properties, if the approval is done at a noticed public hearing where the LAFCO makes specified determinations. The determinations must include that: a) the extension of service or service deficiency was identified and evaluated in an MSR; b) the extension of service will not result in adverse impacts on open space or agricultural lands, or have growth inducing impacts; and, c) a later change of organization involving the subject territory and its affected agency is not feasible, or desirable based on the adopted policies of the LAFCO. Additionally, this bill requires that the three LAFCOs submit a report to the Legislature on their participation in the five-year pilot program. This bill is sponsored by the author. 3)Author's Statement. According to the author, "There are instances when existing or approved developments lie outside a sphere of influence of a municipal service provider, and that are in need of those municipal services. For example, the ABAG [Association of Bay Area Governments] Regional Housing Needs Allocation (RHNA) process may require the location of affordable housing outside the City of Napa's sphere of influence. Unfortunately, current law will not permit municipal services to be extended outside the service provider's sphere of influence unless a city or district receives written approval from the LAFCO in the affected county pursuant to a very limited set of special circumstances. "An additional example would be Whetstone winery in Napa. This existing development lies adjacent to a city water line and is outside of the city's sphere of influence in an unincorporated area surrounded by agricultural lands. When the property owner AB 402 Page 7 submitted the application for water service to be extended to this property to allow for a fire hydrant to be serviced, the extension was denied because this was not a residential property and the health and safety exemption in [current law] could not be applied. The only means to extend water to this property would be to annex it into the city's sphere of influence. With a city water line running adjacent to the property, allowing Whetstone an exemption to access this city water rather than annexing the property into the city's sphere of influence would be a greater protection to the surrounding agricultural lands than extending the sphere of influence into the unincorporated area." 4)Policy Considerations. Proposed changes to the laws governing outside service extensions have been debated among LAFCOs for many years and have largely divided practitioners. On one hand, some LAFCOs can provide examples where outside service extensions seem to be the only option because of local geography, politics, and other circumstances, so more flexibility is appealing. On the other hand, some LAFCOs feel that an expansion to this provision of law is fundamentally against the core purpose and mission of LAFCOs and could impact agricultural lands or have growth inducing effects. a) Growth Inducing? In opposition to this bill, the California Farm Bureau Federation argues "In order to carry out these responsibilities for planning and shaping the local and orderly development, LAFCOs must develop and determine a [sphere of influence] SOI for each city and special district and enact policies designed to promote logical and orderly development of areas within the SOI. By providing significantly broader authority for LAFCOs to approve service extensions beyond SOIs in support of urban development, we believe that [this bill] would render SOIs moot as probable service area boundaries." AB 402 Page 8 b) Terminology. The Legislature may wish to ask the author to strike out the term "existing or planned use" to be consistent with the author's intent to address service extensions to existing developments. The Legislature may wish to consider whether it would be possible for LAFCO to approve an extension of services for a planned use that would not inherently have growth inducing impacts. The Legislature may wish to consider if this bill may lead to costly litigation for LAFCOs if this bill requires substantive changes in LAFCO policies which will influence growth patterns and affect land use, thus leading to potential impacts to the environment that may be subject to California Environmental Quality Act. c) Impact on Voters. The Legislature may wish to consider if this bill will result in more cities and districts extending services outside their boundaries instead of annexing territory into their boundaries. If more services are extended outside of boundaries, instead of annexing territory into a district, then voters within that territory cannot vote in the elections that directly impact the service they are receiving. 5)Related Legislation. This bill is substantially similar to SB 1498 (Emmerson) of 2012, which was never heard in the Senate Governance and Finance Committee. 6)Arguments in Support. Napa County argues that this bill seeks to provide LAFCOs with more flexibility to approve service extensions outside of a sphere of influence without requiring annexation of territories that might lead to unintended sprawl. AB 402 Page 9 7)Arguments in Opposition. The California Farm Bureau Federation argues, "As amended in the Assembly Local Government Committee, the damage caused by the bill would be limited to three counties: Napa, Sonoma, and San Bernardino and for a period of 5 years. The specific plan requirement will do nothing to limit the negative impacts of urban development outside a jurisdiction's SOI while creating a huge loophole in the landmark regional transportation planning, housing, and greenhouse gas reduction measure: SB 375 (Steinberg) [Chapter 728, Statutes of 2008]." Analysis Prepared by: Misa Lennox / L. GOV. / (916) 319-3958 FN: 0000455