BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    SB 1069


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          Date of Hearing:  June 29, 2016


                       ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT


                           Susan Talamantes Eggman, Chair


          SB  
          1069 (Wieckowski) - As Amended June 16, 2016


          SENATE VOTE:  29-3


          SUBJECT:  Land use:  zoning.


          SUMMARY:  Makes a number of changes to state law regarding  
          second units.  Specifically, this bill:  


          1)Replaces the term "second dwelling unit" with "accessory  
            dwelling unit" in specified sections of housing law.


          2)Requires, if a local agency, by ordinance, provides for the  
            creation of accessory dwelling units (ADUs) in single-family  
            and multifamily residential zones, the ordinance to do all of  
            the following:


             a)   Designate areas within the jurisdiction of the local  
               agency where ADUs may be permitted.  The designation of  
               areas may be based on criteria, that may include, but are  
               not limited to, the adequacy of water and sewer services  
               and the impact of ADUs on traffic flow and public safety;









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             b)   Impose standards on ADUs that include, but are not  
               limited to, parking, height, setback, lot coverage,  
               architectural review, maximum size of a unit, and standards  
               that prevent adverse impacts on any real property that is  
               listed in the California Register of Historic Places; and,


             c)   Provide that ADUs do not exceed the allowable density  
               for the lot upon which the ADU is located and that ADUs are  
               a residential use that is consistent with the existing  
               general plan and zoning designation for the lot.


          3)Requires a local agency with an ADU ordinance to consider  
            permits within 90 days of submittal of a complete building  
            permit application. 


          4)Requires a local agency that has not adopted an ADU ordinance  
            to approve or disapprove a permit application ministerially  
            without discretionary review, unless it adopts an ordinance  
            within 90 days, instead of 120 days, after receiving the  
            application. 


          5)Requires every local agency to ministerially approve the  
            creation of an ADU, if the ADU complies with all of the  
            following:


             a)   The unit is not intended for sale separate from the  
               primary residence and may be rented;


             b)   The lot is zoned for single-family or multifamily use;


             c)   The lot contains an existing single-family dwelling;








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             d)   The ADU is either attached to the existing dwelling and  
               located within the living area of the existing dwelling or  
               detached from the existing dwelling and located on the same  
               lot as the existing dwelling;


             e)   The increase floor area of an attached ADU shall not  
               exceed 50 percent of the existing living area;


             f)   The total area of floorspace for a detached ADU shall  
               not exceed 1,200 square feet;


             g)   The requirements relating to height, setback, lot  
               coverage, architectural review, site plan review, fees,  
               charges, and other zoning requirements generally applicable  
               to residential construction in the zone in which the  
               property is located;


             h)   Local building code requirements that apply to detached  
               dwellings, if appropriate; and,


             i)   Approval by the local health officer where a private  
               sewage disposal system is being used, if required.


          6)Allows a local agency to require an applicant for a permit for  
            an ADU to be an owner-occupant or that property to be used for  
            rentals of terms longer than 30 days.


          7)Prohibits ADUs being required to provide fire sprinklers, if  
            they are not required for the primary residence.









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          8)Allows tandem parking on an existing driveway to meet  
            specified parking requirements for an ADU.


          9)Prohibits a public agency from imposing parking standards for  
            an ADU in any of the following instances:


             a)   The ADU is located within  mile of public transit or  
               shopping;


             b)   The ADU is located within an architecturally and  
               historically significant historic district;


             c)   The ADU is part of the existing primary residence;


             d)   When on-street parking permits are required but not  
               offered to the occupant of the ADU; or,


             e)   When there is a car share vehicle located within one  
               block of the ADU.


          10)Requires, notwithstanding existing law, a local agency to  
            ministerially approve an application for a building permit to  
            create within a single-family residential zone one ADU per  
            single-family lot, if the unit is contained within the  
            existing space of a single-family residence or accessory  
            structure, has independent exterior access from the existing  
            residence, and the side and rear setbacks are sufficient for  
            fire safety.  Specifies that ADUs shall not be required to  
            provide fire sprinklers, if they are not required for the  
            primary residence.









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          11)Prohibits ADUS from being considered new residential uses for  
            the purposes of calculating private or public utility  
            connection fees, including water and sewer service.


          12)Deletes language from existing law that prohibits local  
            agencies from adopting an ordinance, which totally precludes  
            second units, unless the ordinance contains specified  
            findings.


          13)Revises and adds to existing findings and declarations  
            regarding accessory dwelling units.


          14)States that no reimbursement is required because a local  
            agency or school district has the authority to levy service  
            charges, fees, or assessments sufficient to pay for the  
            program or level of service mandated by this act, as  
            specified.


          EXISTING LAW:   


          1)Defines "second unit" as an attached or a detached residential  
            dwelling unit, which provides complete independent living  
            facilities for one or more persons.  


          2)Provides that a second unit must include permanent provisions  
            for living, sleeping, eating, cooking, and sanitation on the  
            same parcel as the single-family dwelling is situated.  


          3)Permits a local agency, by ordinance, to provide for the  
            creation of second units in single-family and multifamily  
            residential zones, as specified.  








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          4)Requires, if a local agency adopts a second-unit ordinance,  
            that applications be considered ministerially without  
            discretionary review or a hearing. Additionally, nothing may  
            be construed to require a local government to adopt or amend  
            an ordinance regulating the issuance of variances or  
            special-use permits for second units. 


          5)Requires a local agency that has not adopted a second-unit  
            ordinance to accept and approve or disapprove the application  
            ministerially, without discretionary review or hearing, within  
            120 days after receiving the application. Requires every local  
            agency to grant a variance or special permit for the creation  
            of a second unit if the second unit complies with all of the  
            following:


             a)   The unit is not intended for sale and may be rented;


             b)   The lot is zoned for single-family or multifamily use;


             c)   The lot contains an existing single-family dwelling;


             d)   The second unit is either attached to the existing  
               dwelling and located within the living area of the existing  
               dwelling or detached and located on the same lot as the  
               existing dwelling;


             e)   The increased floor area of an attached second unit  
               shall not exceed 30% of the existing living area;


             f)   The total area floor space shall not exceed 1,200 square  








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               feet;


             g)   Requirements relating to height, setback, lot coverage,  
               architectural review, site plan review, fees, charges, and  
               other zoning requirements generally applicable to  
               residential construction in the zone in which the property  
               is located;


             h)   Local building code requirements that apply to detached  
               dwellings; and,


             i)   The unit is approved by the local health officer where a  
               private sewage disposal system is being used. 


          6)Provides that no local agency may adopt an ordinance that  
            totally precludes second units, unless the ordinance contains  
            findings and acknowledges that the ordinance may limit housing  
            opportunities of the region, and further contains findings  
            from which specific adverse impacts on the public health,  
            safety, and welfare would result. 


          7)Provides that a local agency may establish maximum and minimum  
            unit size requirements for both attached and detached second  
            units.  


          8)Establishes the maximum standards that local agencies shall  
            use to evaluate proposed accessory dwelling units on lots  
            zoned for residential use that contain an existing  
            single-family dwelling.  No additional standards shall be  
            utilized or imposed, except that a local agency may require an  
            applicant for a permit to be an owner-occupant. 










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          9)Provides that parking requirements shall not exceed one  
            parking space per unit or per bedroom, but that additional  
            parking may be required with a finding that additional parking  
            requirements are directly related to the use of the second  
            unit and consistent with existing neighborhood standards. 


          FISCAL EFFECT:  According to the Senate Appropriations  
          Committee, pursuant to Senate Rule 28.8, negligible state costs.


          COMMENTS:  


          1)Background.  ADUs, which are referred to in existing law as  
            "second units," are additional living quarters on  
            single-family lots that are independent of the primary  
            dwelling unit.  Also known as accessory apartments, accessory  
            dwellings, mother-in-law units, or granny flats, ADUs are  
            either attached or detached to the primary dwelling unit, and  
            provide complete independent living facilities for one or more  
            persons.  This includes permanent provisions for living,  
            sleeping, eating, cooking, and sanitation. 


            In 2002, AB 1866 (Wright), Chapter 1062, Statutes of 2002,  
            required local governments to use a ministerial process for  
            approving ADUs,  notwithstanding other laws that regulate the  
            issuance of variances or special use permits.  A local  
            government may provide for the construction of ADUs by  
            ordinance, and may designate areas where ADUs are allowed, as  
            well as require standards for parking, setback, lot coverage,  
            and maximum size.  If a local government has not adopted an  
            ordinance governing ADUs, it must grant a variance or special  
            use permit for the creation of ADUs, if the unit complies with  
            requirements specified in statute, including size and zoning  
            restrictions.










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          2)Author's Statement.  According to the author, "Accessory  
            dwellings provide part of the solution to the housing crisis.   
            They are the only source of housing that can be added within a  
            year at an affordable price, in existing developed communities  
            served by infrastructure consistent with SB 375, without  
            public subsidy, and action by the State on a few issues will  
            make this possible for tens of thousands of owners to  
            immediately benefit and help their communities.


            "ADUs - referred to in existing law as second units - are  
            additional living quarters on single-family lots that are  
            independent of the primary dwelling unit. These units are  
            inherently affordable - costing as little as $10,000 to  
            $200,000 or 50-90% less to build than conventional infill  
            development. Under existing law, any property owner has the  
            ability to construct an ADU on their property should they meet  
            certain zoning and building requirements. However, a  
            significant number of homeowners are prevented from  
            constructing these units due to the layers of zoning and  
            regulatory barriers such as lot size, setbacks, independent  
            off-street parking, and costly duplicative fees.  For example,  
            most local agencies treat accessory dwellings like a "new  
            development" and require sprinklers and new service fees that  
            can double the cost of building the unit itself (adding fee  
            costs of $10,000-75,000/unit) which unreasonably burdens  
            owners trying to add this low-cost, green, infill form of  
            housing.


            "Despite the existence of the Second Unit Enabling Act  
            amended and  by AB 1866 (2003), studies at UC Berkeley and  
            UCLA demonstrate that taken together many local agency  
            zoning standards plus high fees prevent owners from creating  
            an accessory dwelling, even within an existing structure  
            that has been accepted by the neighborhood.  Drawing a  
            random sample of 10% of California's 482 jurisdictions, a  
            team from UC Berkeley found that most jurisdictions impose  
            one or more of three main barriers to construction  








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            effectively preventing all but a small number of parcels  
            from ever qualifying for an accessory dwelling regulations  
            including minimum lot size, setbacks, and parking  
            requirements.  A similar study led by a team at UCLA found  
            that Los Angeles County jurisdictions similarly had layered  
            regulations that taken together preclude many owners from  
            ever qualifying for a legal accessory dwelling.  


            "With these barriers to construction, homeowners, especially  
            lower income homeowners who face dire family needs and  
            potential foreclosure if they cannot share with family  
            members or rent space in their homes, build accessory  
            dwellings illegally.  A recent study by UT-Austin Professor  
            Jake Wegmann found that 55% of ALL NEW, the housing units  
            produced in the Gateway Cities area of Southeast Los Angeles  
            County between 1980 and 2010, were unpermitted illegal  
            accessory dwellings.   With regulations making it  
            challenging to build legally, the study concluded that the  
            majority of housing in the Gateway area is now produced  
            illegally.


            "The widespread existence of barriers preventing ADUs and  
            the resulting frequency of illegal accessory dwellings  
            documents the need for the State to intervene to ensure more  
            and safer accessory dwellings.  The State must intervene and  
            eliminate barriers to accessory dwelling units which exist  
            despite 14 years of State legislation that require local  
            agencies to allow accessory dwellings.  These barriers,  
            including parking, fees, and zoning limits prevent  
            homeowners from legally taking care of their families during  
            times of economic difficulty, and prevent people with too  
            much house from sharing a space on their property [with]  
            those who have too little.  The State must remove the most  
            significant barriers and fees so that homeowners can create  
            legal and safe accessory dwellings, inspected and approved  
            under California's rigorous building, fire, and safety codes  
            and bring these onto the tax rolls as legal improved space.   








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          3)May Revise and Current Legislation on ADUs.  According to the  
            Governor's 2016-17 May Revision:


               The Administration is also supportive of other initiatives  
               to increase housing supply where such initiatives do not  
               create a state reimbursable mandate. This includes using  
               inventory such as accessory dwelling units (additional  
               living quarters on single-family lots that are independent  
               of the primary dwelling unit)?.. Policies can increase the  
               availability of accessory dwelling units with expanded  
               ministerial approval, shortened permitting timelines,  
               reduced duplicative fees, and relaxed parking requirements,  
               consistent with the principles identified by SB 1069  
               (2016). The state can further increase supply by  
               eliminating overly burdensome requirements for accessory  
               dwelling units identified by AB 2299 (2016), such as  
               passageways to public streets and setbacks of five feet  
               from lot lines.


            As mentioned above, there are several pending bills that aim  
            to increase the availability of ADUs, including the following:


             a)   AB 2299 (Bloom) requires every city and county,  
               including charter cities, to adopt an ordinance that  
               provides for the creation of second units and repeals the  
               ability of local governments to enact ordinances banning  
               second units.  The bill requires the second unit ordinance  
               to designate areas where second units are permitted; impose  
               standards such as parking, lot coverage, setbacks, and  
               architectural review; and, provide that second units do not  
               exceed the allowable density for the lot upon which they  
               are located.  The ordinance cannot impose parking standards  
               on second units that are located within: 








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             (1) one-half mile of public transit or shopping, or (2) an  
               historic district.  

             AB 2299 also prohibits local governments from requiring more  
               than one parking space per unit or bedroom.  If a garage,  
               carport, or covered parking structure is demolished to  
               build a second unit and the local agency requires those  
               spaces to be replaced, the replacement spaces can be in any  
               configuration on the lot, including as tandem spaces.  
             In addition, the bill allows local agencies to reduce or  
               eliminate parking requirements for any second unit located  
               within its jurisdiction.

             AB 2299 prohibits local agencies from requiring second units  
               to have a pathway clear to the sky between the second unit  
               and a public street, and second units that are constructed  
               above a garage on an alley cannot be required to have a  
               setback of more than five feet.  The bill deems second  
               units to be accessory uses or accessory buildings, if they  
               meet the statutory criteria in current law to automatically  
               receive a variance or special use permit.

             AB 2299 is currently pending in the Senate Governance and  
               Finance Committee.
              
              b)   AB 2406 (Thurmond) allows local agencies to adopt an  
               ordinance that authorizes the construction of "junior  
               accessory dwelling units" of 500 square feet or less and  
               includes standards that local agencies may adopt regarding  
               those units.  The bill is pending on the Senate Floor.



              
           1)Policy Considerations.  The Committee may wish to consider the  
            following.










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             a)   Local Agency Fees:


               i)     Connection Fees and Capacity Charges.  Water  
                 retailers and sanitation agencies levy connection fees to  
                 ensure that a new development pays for the costs that it  
                 imposes on the water system, such as to maintain water  
                 pressure for firefighting or expand wastewater treatment  
                 capacity.  These fees are a key part of these agencies'  
                 rate structures - monthly water and sewer bills do not  
                 entirely fund an agency's operations.  Opponents to the  
                 bill note that the cumulative impact of thousands of new  
                 units on a water or sewer system could create financial  
                 strains for those agencies, necessitating rate hikes on  
                 existing customers that have already paid their fair  
                 share of the water system's costs. 


                 SB 1069 provides the following language:


                 Fees charged for the construction of accessory dwelling  
                 units shall be determined in accordance with Chapter 5  
                 (commencing with Section 66000).  Accessory dwelling  
                 units shall not be considered new residential uses for  
                 the purposes of calculating private or public utility  
                 connection fees, including water and sewer service.


                 Local agencies are authorized, pursuant to Government  
                 Code Section 66013    [Chapter 7:  Fees for Specific  
                 Purposes], to impose fees for water connections or sewer  
                 connections, and impose capacity charges, but are  
                 prohibited from exceeding the "estimated reasonable cost  
                 of providing the service for which the fee or charge is  
                 imposed?"


                 Government Code Section 66013 is not referenced in the  








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                 provisions of SB 1069.


               ii)    Constitutional Issues.  The Association of  
                 California Water Agencies notes that "The state  
                 constitution and state law, namely Article XIII C,  
                 section 1 (e)(2), Article XIII D, section 6(b) and  
                 Government Code Section 66013, require that water and  
                 wastewater rates and charges be based on cost of service  
                 principles.  Because of these requirements, an agency may  
                 not waive, discount, or establish differential rates that  
                 pass on costs associated with obtaining water and/or  
                 wastewater service to the general customer base or to  
                 other fee payers."


                 The Committee may wish to consider whether charging some  
                 ADUs less for their capacity charges or connection fees  
                       could result in violating Proposition 26 (2010).  


                 If a local agency's connection fee or capacity charge is  
                 challenged, the agency may not be able to meet the burden  
                 of proof requirements specified in Prop. 26 - the local  
                 government bears the burden of proving by a preponderance  
                 of the evidence that a levy, charge, or other exaction is  
                 not a tax, that the amount is no more than necessary to  
                 cover the reasonable costs of the governmental activity,  
                 and that the manner in which those costs are allocated to  
                 a payor bear a fair and reasonable relationship to the  
                 payor's burdens on, or benefits received from, the  
                 governmental activity.
               iii)   Mandate Disclaimer.  The bill, in Section 7,  
                 contains a mandate disclaimer which specifies that no  
                 reimbursement is required by the bill because a local  
                 agency has the authority to levy service charges, fees,  
                 or assessment sufficient to pay for the program or level  
                 of service mandated by the bill.  The Committee may wish  
                 to consider whether local agencies will have the  








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                 authority to levy fees and charges that are sufficient to  
                 pay for the requirements in the bill, given the issues  
                 raised above.


             b)   Impact on Existing Resources.  According to the City of  
               Roseville, in opposition to the bill, "the City is  
               supportive of ADU, and has set aside areas in the last two  
               adopted specific plan areas that allow second units by  
               right.  However, the location and number 


             of units allowed was carefully analyzed through the  
               environmental review process and thoughtfully designed to  
               ensure that the City allocated sufficient water supplies,  
               and wastewater and other utility capacity.  The plan also  
               included a fiscal analysis to ensure that the City had  
               sufficient funding to provide adequate police, fire, parks  
               and recreation facilities and other services to serve  
               project areas."
               Further, the City of Roseville notes that "As a full  
               service city providing water, wastewater, recycled water,  
               solid waste and electric services, we are concerned this  
               measure could result in rate hikes to existing private and  
               public utility customers?The City has secured a surface  
               water allocation sufficient to serve the build out of the  
               City based on a detailed analysis of potential units.  If  
               additional units were to be allowed by right, but not  
               subjected to review and if they are not currently included  
               in the City's Urban Water Management Plan, it may impact  
               existing residences especially in a drought situation."


             c)   Definitions.  The American Planning Association,  
               California Chapter, notes that it has a "Support, if  
               amended" position on the bill and that "as written the bill  
               doesn't allow an ordinance to require parking to be proved  
               if the ADU 'is located within one-half mile of public  
               transit or shopping.'  They ask that the bill be amended to  








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               remove "shopping" and better define "transit" by including  
               the definition of a "major transit stop" as used in 


             AB 744 (Chau), Chapter 699, Statutes of 2015.  
          2)Arguments in Support.  Supporters argue that ADUs are the only  
            widely supported approach to get thousands of low cost units  
            on the market fast and that ADUs provide lower cost and  
            low-carbon footprint homes in existing neighborhoods  
            consistent with architectural traditions, and that this bill  
            would further simplify the process of ADU adoption for  
            residents by reducing parking requirements and streamlining  
            the permitting process.


          3)Arguments in Opposition.  Opponents write that the bill  
            removes any local land use flexibility, limits the public  
            engagement process, could result in rate hikes to existing  
            private and public utility customers, and that the cumulative  
            impact of thousands of new units on a water or sewer system  
            could create financial strains for utility agencies on  
            existing customers who have already paid their fair share to  
            be part of that system.


          4)Double-Referral.  This bill was heard in the Housing &  
            Community Development Committee on June 15, 2016, and passed  
            with a 6-0 vote.


          
















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          REGISTERED SUPPORT / OPPOSITION:




          Support


          Bay Area Council [SPONSOR]


          BRIDGE Housing


          American Planning Association, California Chapter (if amended)


          AARP


          BIA Bay Area


          BHV CenterStreet Properties


          Bishop Ranch


          Blue Shield of California








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          CalChamber


          California Association of Realtors


          California Building Industry Association


          California Council for Affordable Housing


          California Housing Consortium


          California Renters Legal Advocacy & Education Fund


          California Rural Legal Assistance Foundation


          California School Employees Association


          Center for Creative Land Recycling


          Chase Communications


          City of Berkeley, Los Angeles, Oakland


          City and County of San Francisco


          Colliers International








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          Comcast


          Cushman & Wakefield


          East Bay Leadership Council


          Eden Housing


          Emerald Fund


          Facebook


          Greenbelt Alliance


          Greenberg Traurig LLP


          Hallisey & Johnson Law


          Hanson Bridgett


          HKS Architects


          Housing Trust Silicon Valley


          Jenifer Hernandez








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          Kaiser Permanente


          Joint Venture Silicon Valley


          LA-Más


          Lenny, Mendonca, McKinsey & Company


          Lilypad Homes


          Local Government Commission


          MacKenzie Communications, Inc.


          Main Street Property Services


          LA-Mas


          Lennar Urban


          Los Angeles Chamber of Commerce




          Support (continued)









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          Manatt, Phelps & Phillips LLP


          Marvell


          Montezuma Wetlands LLC


          Nehemiah Corporation of America


          New Avenue Homes


          Nossaman LLP


          NHA Advisors


          Nibbi Brothers Construction


          Non-profit Housing Association of Northern California


          North Bay Leadership Council


          North Lake Tahoe Resort Association


          Natural Resources Defense Council


          Orange County Business Council









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          Pier 39


          Planning and Conservation League


          Plant Construction Company, L.P.


          Plumbing-Heating-Cooling Contractors Association


          Polaris Pacific


          Radiant Brands


          Read Investments


          Redondo Beach Chamber of Commerce


          Reuben, Junius & Rose, LLP


          Rhoades Planning Group


          Richard Rosenberg


          San Francisco Chamber of Commerce


          San Francisco Housing Action Coalition









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          San Mateo County Economic Development Association


          SARES.REGIS Group


          Silicon Valley Leadership Group


          SPUR


          SV Angel


          SV@Home


          Technology Credit Union


          Terner Center for Housing Innovation


          The Home Depot


          The Two Hundred


          TMG Partners


          United Parcel Service


          Virgin America









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          WEBCORBUILDERS


          Western Center on Law and Poverty


          Individual letters (3)




          









          Opposition


          Association of California Water Agencies


          California State Association of Counties


          Dublin San Ramon Services District


          Cities of: 


            Angels Camp, Brentwood, Burbank, Cerritos, Clearlake,  
            Cloverdale, Commerce, Camarillo, Daly City, Dublin, Goleta,  








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            Laguna Hills, Lake Forest, Lakeport, Lakewood, La Mirada,  
            Lodi, Los Banos, Manteca, Merced, Mill Valley, Morena Valley,  
            Rancho Cucamonga, Rancho Palos Verdes, Redding, Riverbank,  
            Roseville, Placerville, San Carlos, San Clemente, San Rafael,  
            South Gate, Sunnyvale, Tehama, Thousand Oaks, Torrance


          League of California Cities


          Ventura Council of Governments




          Analysis Prepared by:Debbie Michel / L. GOV. / (916)  
          319-3958