BILL ANALYSIS Ó AB 402 Page 1 CONCURRENCE IN SENATE AMENDMENTS AB 402 (Dodd) As Amended August 26, 2015 Majority vote -------------------------------------------------------------------- |ASSEMBLY: | |(May 28, 2015) |SENATE: |39-0 |(September 1, | | |54-23 | | | |2015) | | | | | | | | | | | | | | | -------------------------------------------------------------------- Original Committee Reference: L. GOV. SUMMARY: Establishes a pilot program, until January 1, 2021, for Napa 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. The Senate amendments: 1)Remove Sonoma LAFCO from the pilot program established by this bill. 2)Define "planned use" to mean any project that is included in an approved specific plan as of July 1, 2015. AB 402 Page 2 3)Specify that the extension of services outside of boundaries will not result in either a) adverse impacts of open space or agricultural lands or b) growth inducing impacts. 4)Require the Napa and San Bernardino LAFCOs to submit the specified report before January 1, 2020. 5)Require the pilot program established pursuant to this bill to be consistent with existing law regarding just compensation for the takings of private utilities. 6)Add chaptering out language to avoid conflicts with SB 239 (Hertzberg) of the current legislative session, currently pending in the Assembly. 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. AB 402 Page 3 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 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 4 AS PASSED BY THE ASSEMBLY, this bill: 1)Allowed 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 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)Defined planned use to mean any project that is included in an approved specific plan. 3)Required 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. AB 402 Page 5 4)Declared 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)Provided that existing law, which allows LAFCO to authorize a 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)Made other technical and conforming changes. 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 AB 402 Page 6 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 Napa and San Bernardino LAFCOs, until January 1, 2021, to allow service extensions outside spheres of influence and jurisdictional boundaries, beyond health and safety issues. Under this bill, Napa 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 either adverse impacts on open space or agricultural lands, or growth inducing impacts; and, c) a later sphere of influence change 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 two LAFCOs submit a report, before January 1, 2020, 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. Unfortunately, AB 402 Page 7 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." 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. 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. 7)Arguments in Opposition. California Building Industry Association, opposed unless amended, argues that LAFCO's do AB 402 Page 8 not have unlimited resources, therefore, some LAFCOS do not conduct MSR on areas outside a sphere of influence. However, this bill requires that the extension of service or services deficiency was identified and evaluated in a MSR. Analysis Prepared by: Misa Lennox / L. GOV. / (916) 319-3958 FN: 0001933