BILL ANALYSIS Ó
SB 1266
Page 1
Date of Hearing: June 15, 2016
ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
Susan Talamantes Eggman, Chair
SB
1266 (McGuire) - As Amended April 12, 2016
SENATE VOTE: 36-0
SUBJECT: Joint Exercise of Powers Act: agreements: filings
SUMMARY: Requires joint powers authorities (JPA) or joint
powers agencies that provide municipal services to file joint
powers agreements and amendments with local agency formation
commissions. Specifically, this bill:
1)Requires a JPA to file with a local agency formation
commission (LAFCO) the full text of the joint powers
agreement, and any amendments to the agreement, in the same
manner as filed with the State Controller under existing law,
if the JPA:
a) Meets the definition of a JPA provided in existing law
which defines a JPA formed for the local performance of
governmental functions that includes the provision of
municipal services; and,
b) Includes a local agency member that is a city, county,
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or district.
2)Requires the filing to be with the LAFCO in each county within
which all or any part of a local agency's member's territory
is located.
3)Requires a JPA formed prior to January 1, 2017, and that meets
the criteria in 1) above, to file a copy of the agreement and
any amendments to the agreement with the LAFCO in each county
which all or any part of a local agency's territory is located
no later than July 1, 2017.
4)Prohibits any agency or entity administering a joint powers
agreement or amendment to an agreement which fails to file the
notice with a LAFCO, from issuing any bonds or incurring
indebtedness of any kind until filings are completed.
5)Provides that, if the Commission on State Mandates determines
that this bill contains costs mandated by the state,
reimbursement to local agencies and school districts for those
costs shall be made, pursuant to current law governing state
mandated local costs.
EXISTING LAW:
1)Establishes the Cortese-Knox-Hertzberg Local Government
Reorganization Act of 2000 (Act).
2)Requires LAFCOs to initiate and make studies of existing
governmental agencies, which include, but not be limited to,
inventorying agencies and determining their maximum service
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area and service capacities.
3)Authorizes LAFCOs, in conducting the studies, to request for
land use information, studies, and plans of cities, counties,
districts, including school districts, community college
districts, regional agencies, JPAs, and state agencies and
departments.
4)Requires cities, counties, districts, including school
districts, community college districts, regional agencies,
JPAs, and state agencies and departments to comply with a
LAFCO's request for information.
5)Defines, in the Act, a "joint powers agency or a joint powers
authority" to mean an agency or entity formed, pursuant to the
Joint Exercise of Powers Act, that is formed for the local
performance of governmental functions that includes the
provision of municipal services.
6)Establishes the Joint Exercise of Powers Act.
7)Requires a JPA, when a joint powers agreement provides for the
creation or an agency or entity that is separate from the
parties to the agreement, to prepare and file notice of the
agreement or amendment within 30 days after the effective date
with the office of the Secretary of State and with the State
Controller.
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8)Requires the notice to contain a) the name of each public
agency party to the agreement;
b) the effective date of the agreement; c) a statement of the
purpose of the agreement or the power to be exercised; and d)
a description of the amendment, if any.
9)Prohibits a JPA that failed to file notice, pursuant to 7),
above, from issuing any bonds or incurring indebtedness until
such filings are completed.
FISCAL EFFECT: According to the Senate Appropriations
Committee, pursuant to Senate Rule 28.8, negligible state costs.
COMMENTS:
1)Bill Summary. This bill requires JPAs that are formed for the
purposes of providing municipal services, which include a
local agency member that is a city, district, or county, to
file a copy of the full text of the joint powers agreement and
any amendments to the agreement with LAFCOs. JPAs that fit
the specified criteria, but were formed prior to January 1,
2017, would be required to file the agreement and amendments
with LAFCO, no later than July 1, 2017. Similar to the
prohibition established in existing law for failing to file
with the Controller's office, JPAs would be prohibited from
issuing bonds or incurring indebtedness until filings are
completed with LAFCO.
2)Author's Statement. According to the author, "Many existing
JPAs provide municipal services to communities throughout
California. However, LAFCO officials frequently possess no
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information about the existence and activities of some JPAs
that provide municipal services. This lack of information
about municipal service-providing JPAs makes it difficult for
LAFCOs to fulfill their statutory responsibility to plan and
oversee the responsive, efficient and effective delivery local
government services. A 2011 report produced by the
Legislative Analyst's Office [LAO] noted that LAFCOs lack the
legal authority to ensure that JPAs are providing services and
using public funds efficiently and in a manner consistent with
current law. The LAO suggested that JPAs should be subject to
a higher level of LAFCO oversight and identified "providing
LAFCOs with copies of all JPA agreements, including
amendments" as a policy option.
"SB 1266 does not grant LAFCOs any authority over JPAs'
formation, boundaries, organization, or services, fully
preserving the flexibility and autonomy that JPAs enjoy under
current law. The bill helps LAFCOs provide better oversight
of municipal service delivery by providing them with crucial
information about JPAs that provide those services."
3)Background. With a LAFCO in each of California's 58 counties,
every commission is responsible for coordinating changes in
governmental boundaries, conducting studies that review ways
to reorganize, simplify, and streamline governmental
structures and ensure that services are provided efficiently
and economically. As part of their oversight, LAFCOs are
authorized to request information and governmental agencies
under their review are required to comply with the
commission's request.
Current law authorizes LAFCOs, in conducting studies, to
request specified information from local and state agencies in
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order to inventory agencies and examine issues like their
maximum service area and service capacities. AB 2156
(Achadjian), Chapter 21, Statutes of 2014, added JPAs that
provide municipal services to the list of existing
governmental agencies that must comply with requests from
LAFCOs for information. AB 2156 sought to address some of the
issues identified by the LAO in 2012.
In a January 2012 letter to Assembly Member Dickinson, the LAO
recommended that the Legislature consider expanding JPA
oversight authority to LAFCOs.
"We would also suggest the Legislature consider expanding
LAFCO authority to oversee JPAs. As we describe, LAFCOs have
no statutory authority to oversee the JPAs that districts or
general-purpose governments enter into. This includes JPAs
that are providing services, such as wastewater treatment or
water supply. Consequently, LAFCOs have no statutory
authority to review the financial and service data of these
JPA's boundaries or services in the same way that it can for
individual special districts and other local government
agencies. We do not think this expanded authority should be
undertaken with the intent of discouraging the use of JPAs
because those agreements are one strategy that special
districts use to achieve higher efficiencies. However, we
think that it is important that the entities created under
JPAs be subject to some level of oversight akin to the
districts and general-purpose governments that utilize them."
4)JPAs. The Joint Exercise of Powers Act provides the statutory
authority for public entities to create and use a joint powers
agreement, which is a legal framework for state and local
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governments to exercise common powers and even create new
public entities. They are an attractive tool for local
governments because they facilitate more efficient service
provision through collaboration, and because they permit local
entities to issue bonds without voter ratification.
On March 21, 2012, the Committee held an informational hearing
on the state of oversight of JPAs. The hearing found that
data collection on JPAs appears to be incomplete and
under-resourced, filing compliance is less than ideal, and
oversight remains somewhat fragmentary. The uses of JPAs fall
into five groups: general public services, financial services,
insurance pooling and purchasing discounts, planning services,
and regulatory enforcement. This bill only pertains to those
JPAs formed for the local performance of governmental
functions that includes the provision of municipal services.
5)Arguments in Support. The California Association of Local
Agency Formation Commissions argues "Under existing law, there
is no means for LAFCOs to be informed of the existence and
activities of local municipal service providing JPAs, which
creates an increasing challenge for LAFCOs in meeting their
standing directive to plan and oversee the responsive,
efficient and effective delivery local government services.
This is especially true given the expanding role of JPAs in
delivering municipal services. This bill closes that gap."
6)Arguments in Opposition. None on file.
REGISTERED SUPPORT / OPPOSITION:
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Support
California Association of Local Agency Formation Commissions
[SPONSOR]
Local Agency Formation Commissions of Alameda, Contra Costa,
Imperial, Marin, Merced,
Napa, Riverside, San Diego. San Luis Obispo, San Mateo, and
Yolo
Opposition
None on file
Analysis Prepared by:Misa Lennox / L. GOV. / (916)
319-3958