BILL ANALYSIS                                                                                                                                                                                                    Ó

          |SENATE RULES COMMITTEE            |                        AB 402|
          |Office of Senate Floor Analyses   |                              |
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                                   THIRD READING 

          Bill No:  AB 402
          Author:   Dodd (D)
          Amended:  6/30/15 in Senate
          Vote:     21  

           SENATE GOVERNANCE & FIN. COMMITTEE:  6-0, 6/24/15
           AYES:  Hertzberg, Beall, Hernandez, Lara, Moorlach, Pavley
           NO VOTE RECORDED:  Nguyen

           ASSEMBLY FLOOR:  54-23, 5/28/15 - See last page for vote

           SUBJECT:   Local agency services:  contracts

          SOURCE:    Author

          DIGEST:  This bill establishes a pilot program to allow local  
          agency formation commissions (LAFCOs) in Napa and San Bernardino  
          counties to authorize extensions of service to areas outside of  
          a local agency's sphere of influence to support existing or  
          planned uses, as defined. 


          Existing law:

          1)Establishes the Cortese-Knox-Hertzberg Local Government  
            Reorganization Act of 2000, which defines the procedures for  
            the organization and reorganization of cities, counties, and  


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            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  

          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 the public health or safety of the residents of the  
            affected territory, if both of the following requirements are  

             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  

          6)Requires the LAFCO or executive officer to approve,  
            disapprove, or approve with conditions the contract for  


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                                                                    Page  3

            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.  

          This bill:

          1)Allows the Napa 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 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 either (1)  
               adverse impacts on open space or agricultural lands, or (2)  
               growth inducing impacts; and,

             c)   A later sphere of influence change involving the subject  
               territory and its affected agency is not feasible under  
               existing law or desirable based on the adopted policies of  

          2)Defines planned use to mean any project that is included in an  
            approved specific plan as of July 1, 2015.  

          3)Requires the Napa and San Bernardino LAFCOs to submit a  


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            report, by January 1, 2020 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 and San Bernardino.  

          5)Makes other technical and conforming changes.  


          The Planning and Zoning Law requires every county and city to  
          adopt a general plan that sets out planned uses for all of the  
          area covered by the plan.  Cities' and counties' major land use  
          decisions-including development permitting-must be consistent  
          with their general plans.  In this way, the general plan is a  
          blueprint for future development.  The general plan must cover  
          all of the area within a city or county's boundaries and can  
          include areas outside of the agency's boundaries that, in the  
          judgment of local planners, relate to the planning effort.  This  
          can include planning development in areas that may become the  
          future boundaries of the agency.  Local agencies may also adopt  
          specific plans that provide for the systematic implementation of  
          a general plan in a particular area.

          The Cortese-Knox-Hertzberg Local Government Reorganization Act  
          (Act) delegates the Legislature's power to control the  
          boundaries of cities and special districts to LAFCOs.  Each  
          county has a LAFCO, which is governed by a board of elected  
          officials-including city council members and county  
          supervisors-and at least one member of the public appointed by  
          the other members.  About half of LAFCO boards have  
          representatives from special districts. 

          Controlling boundaries means LAFCOs control the timing and  


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          location of development, because they determine the type of  
          services that are available to support development-and those  
          that aren't.  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.  LAFCOs must adopt written policies to further these  

          LAFCOs also implement these goals by determining a "sphere of  
          influence" for each local agency in its county.  A sphere of  
          influence designates an agency's probable future physical  
          boundary and service area.  It is territory that a city or  
          special district will annex in the future. It's also the area  
          where the local government will build facilities and deliver  
          services sometime in the future.  

          The Act also requires cities and districts to get a LAFCO's  
          written approval before they can serve territory outside their  
          boundaries.  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.  However, the  
          Legislature recognized the need to accommodate unexpected local  
          conditions and several exemptions were established.  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. 

          When a city or special district requests to extend services  
          outside of its boundaries, the LAFCO must follow certain  
          procedures and deadlines to determine whether the application is  
          complete and then approve, disapprove, or conditionally approve  
          the extension of service.

          Some local officials want to expand the range of circumstances  
          under which they can extend services outside of their agencies'  
          spheres of influence.


          Purpose of the bill.  AB 402 provides LAFCOs with more  


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          flexibility to approve service extensions outside of a sphere of  
          influence without requiring annexation of territories that might  
          lead to unintended sprawl.  Under current law, an agency's  
          sphere must be extended to contiguous territory.  Thus, if an  
          agency wants to serve an area outside its sphere for purposes  
          other than health and safety, its sphere must be extended all  
          the way to that area.  This can lead to illogical and  
          inefficient development patterns if a city wants to serve an  
          existing development. For example, Whetstone winery in Napa is  
          an existing development that 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 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, potentially allowing future development in  
          all of the territory between the city's current sphere and the  
          winery.  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.  

          FISCAL EFFECT:   Appropriation:    No          Fiscal  
          Com.:NoLocal:    No

          SUPPORT:   (Verified7/1/15)

          Napa County Board of Supervisors
          Napa County Local Agency Formation Commission
          San Bernardino Local Agency Formation Commission

          OPPOSITION:   (Verified7/1/15)


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          California Building Industries Association

          ASSEMBLY FLOOR:  54-23, 5/28/15
          AYES:  Alejo, Bonilla, Bonta, Brown, Burke, Calderon, Campos,  
            Chang, Chau, Chiu, Chu, Cooley, Cooper, Dababneh, Daly, Dodd,  
            Eggman, Frazier, Gallagher, Cristina Garcia, Eduardo Garcia,  
            Gipson, Gomez, Gonzalez, Gray, Roger Hernández, Holden,  
            Jones-Sawyer, Levine, Lopez, Low, Maienschein, Mayes, McCarty,  
            Medina, Mullin, Nazarian, Obernolte, O'Donnell, Perea, Quirk,  
            Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth,  
            Mark Stone, Thurmond, Ting, Weber, Williams, Wood, Atkins
          NOES:  Achadjian, Travis Allen, Baker, Bigelow, Brough, Chávez,  
            Dahle, Beth Gaines, Gatto, Hadley, Harper, Irwin, Jones, Kim,  
            Lackey, Linder, Mathis, Melendez, Olsen, Patterson, Wagner,  
            Waldron, Wilk
          NO VOTE RECORDED:  Bloom, Gordon, Grove

          Prepared by:Anton Favorini-Csorba / GOV. & F. / (916) 651-4119
          7/1/15 16:21:19

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