BILL ANALYSIS Ó
SENATE COMMITTEE ON GOVERNANCE AND FINANCE
Senator Robert M. Hertzberg, Chair
2015 - 2016 Regular
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|Bill No: |AB 2470 |Hearing |6/22/16 |
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|Author: |Gonzalez |Tax Levy: |No |
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|Version: |4/26/16 |Fiscal: |Yes |
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|Consultant|Favorini-Csorba |
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Municipal water districts: water service: Indian tribes
Requires a district to provide water to an Indian tribe outside
of the district's boundaries upon request of the tribe.
Background
Local Government Boundaries. The Cortese-Knox-Hertzberg Act
creates a local agency formation commission (LAFCO) in each
county to control the boundaries of cities, county service
areas, and most special districts. Local governments can only
exercise their powers and provide services where LAFCO allows
them to; the courts refer to LAFCOs as the Legislature's
watchdog over boundary changes. To plan for the future
boundaries and service areas of the cities and special
districts, a LAFCO must adopt a policy document for each city
and district called a sphere of influence. The LAFCOs' boundary
decisions must be consistent with the spheres of influence of
the affected cities or districts. Spheres must be updated at
least every five years. In order to determine spheres of
influence, LAFCOs must periodically conduct a "municipal service
review" (MSR) to inform their decisions about spheres of
influence. LAFCOs may also create special study areas to
investigate the potential for annexations or other boundary
changes.
LAFCO boundary changes can be considered projects under the
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California Environmental Quality Act (CEQA), in which case an
annexation is scrutinized for environmental or growth-inducing
impacts.
Municipal Water Districts. The Municipal Water District Act of
1911 establishes the powers and organization of municipal water
districts. Among other things, the act allows municipal water
districts to sell water to entities within the district for use
within the district and to levy taxes on the land within the
district. When acquiring new customers, municipal water
districts may require them to implement water conservation
requirements. A district may also establish special rates for
areas acquired by annexation and may charge special fees when it
serves areas that do not pay district taxes, such as property
taxes.
San Diego County Water Provision. The Metropolitan Water
District of Southern California (Metropolitan) is a water
wholesaler that sells water to its 26 member agencies. About
one-quarter of the water Metropolitan sells is purchased by the
San Diego County Water Authority (SDCWA). SDCWA then sells it
to its 24 member agencies, including Padre Dam Municipal Water
District and Otay Water District, and coordinates regional water
supplies. Metropolitan and SDCWA can only serve water within
their boundaries, so annexations to member agencies like Padre
Dam and Otay Water District also require annexations to
Metropolitan and SDCWA. Thus an annexation of territory to
these retail water agencies would require LAFCO approval and
must also be consistent with Met's Administrative Code, the
County Water Authority Act, and SDCWA's Annexation Policies and
Procedures, which requires the Water Authority to evaluate the
adequacy of water supplies and facilities to meet the needs of
the proposed annexed territory.
Sycuan Tribe. The Sycuan Band of the Kumeyaay Nation is a
federally recognized tribe of Mission Indians from Southern
California, near El Cajon. The Tribe consists of 220 members,
approximately 160 of whom are voting members (over 18 years
old). The Tribe opened its first gambling facility, the Sycuan
Bingo Palace, on its reservation in 1983. In 1999, the Tribe
entered into a tribal-state gaming compact with the State of
California which has provided it with extensive economic
opportunities, including a profitable casino that can operate
lucrative Class III games such as slot machines, in exchange for
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accepting some gaming regulations, mitigating some of the
impacts of the gaming operations, and paying substantial fees.
In 2015, the Legislature ratified a new compact with the state
that expanded the number of Class III games that the tribe may
operate and requires payment of fees to the state of around $11
million annually, including 4.75% of the tribe's gross gaming
revenue plus a share of the costs of the state to perform duties
required by the compact. Within the last 15 years, due in part
to the economic success of the tribal government gaming
operation, the tribe has purchased a number of private parcels
of land to augment its original reservation lands.
The Sycuan Tribe is a sovereign government and is therefore not
subject to state and local laws and regulations, except for
those required under the compact. The compact requires the
Tribe to prepare a Tribal Environmental Impact Report (TEIR) and
negotiate mitigation of any off-reservation impacts prior to
initiating the development of a project for a facility. The
Tribe's failure to prepare an adequate TEIR when required is
deemed a breach of the compact and is grounds for issuance of an
injunction or other appropriate equitable relief. A completed
TEIR must be filed with San Diego County, the Department of
Justice, the State Clearinghouse and the State Gaming Agency.
In 2015, Sycuan issued a notice of preparation of a TEIR for an
expansion of their hotel and casino located on the reservation.
Otay Water District and Padre Dam currently serve water to much
of the tribe's lands. However, the original reservation remains
outside of, but largely surrounded by, the two districts'
territories and is served by a single well that is vulnerable to
contamination. In order to secure water for the original
reservation, Sycuan paid to extend a water line through Padre
Dam territory to the border of the district but was unable to
connect to the system without going through LAFCO. Instead,
Sycuan subsequently submitted a petition in 2008 to the Otay
Water District to annex the original reservation parcels to the
district. Otay prepared a draft environmental impact report
covering the annexation and circulated it for comment, but
Sycuan later withdrew the application.
Seeking to ensure that it has access to water sources other than
the groundwater well on the reservation, Sycuan wants to connect
to one of the two bordering water districts-most likely, Padre
Dam Municipal Water District.
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Proposed Law
Assembly Bill 2470 requires-notwithstanding any other law-a
district to provide water to an Indian tribe upon request of the
tribe, subject to specified conditions. The water must be
provided as if the Indian tribe's lands had been fully annexed
into the district's territory and the territory of any other
public agencies that are required for the provision of water
service.
The bill only applies to Indian lands that meet requirements
that narrow the bill to apply only to the Sycuan tribe,
specifically:
The lands were owned by the tribe on January 1, 2016;
The lands are contiguous with at least two districts;
The lands lie within the special study area of at least
one district; and,
At least 70% of the Indian tribe's total Indian lands
are currently within the boundaries of one or more
districts.
AB 2470 requires the tribe to meet certain conditions prior to
the district providing water. Specifically, the tribe must
comply with all federal and tribal laws and secure all federal
and tribal approvals necessary for the water to be provided on
substantially the same terms applicable to customers of the
district. The Indian tribe must also, by agreement, accept all
terms of and payments to the district and to any public agency
providing water to said district, including service payments.
These terms and payments are a condition of continued service by
the district.
AB 2470 deems the service area of a district providing water to
a tribe pursuant to this bill to include the tribe's lands as
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long as water is provided to the tribe, the tribe owes money to
the district, or there is an agreement between the tribe and the
district, whichever is longest.
State Revenue Impact
No estimate.
Comments
1. Purpose of the bill . The original Sycuan reservation is
currently served by a single well that is vulnerable to upstream
contamination and could be threatened by an earthquake due to
the geology of the area. But time-consuming and expensive local
processes stand in the way of shoring up supplies for the
reservation, even though there are two water districts that
border the tribe's land and water lines have already been laid.
AB 2470 cuts through the red tape of these processes by
requiring a nearby district to serve the original reservation.
It provides the Sycuan tribe with the independence that is
warranted by its sovereign nation status and lets the tribe deal
with the Legislature on equal footing instead of subjecting
itself to local processes-the outcome of which is far from
guaranteed. AB 2470 paves the way for quickly addressing the
public safety risks currently faced by the tribe, while ensuring
that it pays its fair share for water service.
2. Precedent . The Legislature has delegated the power to
control local boundaries to the 58 LAFCOs, directing the LAFCOs
to discourage urban sprawl, preserve open space and agricultural
lands, and provide efficient government services, while
considering local conditions and circumstances. This bill
bypasses LAFCO and circumvents the usual annexation process,
including approval by other districts in the chain of water
suppliers. Currently, Metropolitan and the Eastern Municipal
Water District in Riverside County are undergoing an annexation
process to include a commercial zone within the Pechanga Indian
Reservation into the district. Proponents of this bill argue
that it is appropriate for the Legislature to make this
determination, instead of LAFCO, to reflect the unique
relationship between the state and the tribe. Will this bill
set a precedent and encourage additional tribes or other parties
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to bypass the local process, and instead, ask for a statutory
fix from the Legislature?
3. CEQA . Annexation often requires CEQA analysis on the part of
the LAFCO and the agency proposing the annexation, and the 2008
proceedings for annexation of the reservation into Otay Water
District was no exception. Yet CEQA does not apply to actions
where an agency has no discretion. By mandating that a district
serve the tribe instead of going through LAFCO, AB 2470
eliminates a level of CEQA analysis that would otherwise need to
be done. Should some analysis of the potential for growth
inducement be required?
4. Who pays ? Annexations to water districts, including
Metropolitan, SDCWA, and Padre Dam typically include payment of
connection fees to ensure that new customers share in the costs
of the infrastructure that the districts have developed. These
fees can be considerable-potentially reaching the millions of
dollars. In addition, these districts levy taxes and
assessments that the tribe's lands would not be subject to. AB
2470 requires Sycuan to make payments as if the tribe's lands
were fully annexed but also provides that water must be provided
on the same terms as those for existing customers. Thus it is
ambiguous whether these districts will be authorized to charge
connection fees or fees in lieu of taxes, potentially shifting
burdens onto existing ratepayers. As sovereign nations, tribes
generally may not be sued, leaving the water districts with few
options in the event of any dispute. The Committee may wish to
consider amending AB 2470 to specify that the payments made by
the tribe shall include connection fees and other fees necessary
to ensure that the cost of infrastructure is equitably
distributed between the tribe and existing ratepayers.
5. Mandate . The California Constitution generally requires the
state to reimburse local agencies for their costs when the state
imposes new programs or additional duties on them. According to
the Legislative Counsel's Office, AB 2470 creates a new
state-mandated local program because it imposes new duties on
municipal water districts. AB 2470 disclaims this liability by
stating that no reimbursement is required under the Constitution
because local agencies have the authority to levy fees
sufficient to cover the cost of the increased services.
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Assembly Actions
Assembly Local Government Committee: 8-0
Assembly Appropriations Committee: 20-0
Assembly Floor: 67-0
Support and
Opposition (6/16/16)
Support : Sycuan Band of the Kumeyaay Nation (sponsor); Ace
Parking Management, Inc; Agua Caliente Band of Cahuilla Indians
Tribal Council; Associated General Contractors of America, San
Diego Chapter, Inc.; Barona Band of Mission Indians; Barrio
Station; California Teamsters Public Affairs Council; Cynthia L.
Eldred, Esq.; Deputy Sheriff's Association of San Diego County;
Endangered Habitats League; JDRF San Diego; Kumeyaay Diegueno
Land Conservancy; Leong-Kuba Sea Products, Inc; Mayor Kevin L.
Faulconer, City of San Diego; Mayor Randy Voepel, City of
Santee; Moceri Produce; Mothers Against Drunk Driving; Newport
Meat Company; Ocean Defenders Alliance; Otay Water District;
Paradise Creek Educational Park; Pepsi Beverages Company;
PlanSEA.org; San Diego County Water Authority; San Diego Gas &
Electric; San Diego Museum of Man; San Diego Police Officers
Association; San Diego Regional Economic Development
Corporation; Santa Ynez Band of Chumash Indians; Supervisor Bill
Horn, 5th District, County of San Diego; The Art Miles Mural
Project; Urban Corps of San Diego County; UNITE HERE; Wildcoast.
Opposition : Unknown.
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