BILL NUMBER: SB 1318	AMENDED
	BILL TEXT

	AMENDED IN SENATE  MARCH 28, 2016

INTRODUCED BY   Senator Wolk

                        FEBRUARY 19, 2016

   An act to amend Sections 56133, 56133.5, 56375, 56425, and 56430
of the Government Code, relating to local government.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 1318, as amended, Wolk. Local government: drinking water
infrastructure or services: wastewater infrastructure or services.
   The Cortese-Knox-Hertzberg Local Government Reorganization Act of
2000 governs the procedures for the formation and change of
organization of cities and special districts.
   Existing law authorizes a city or district to provide new or
extended services by contract or agreement outside its jurisdictional
boundaries only if the city or district requests and receives
permission to do so from the local agency formation commission in the
affected county. Under existing law, the commission may authorize a
city or district to provide new or extended services outside both its
jurisdictional boundaries and its sphere of influence under
specified circumstances.
   This bill would prohibit the commission from authorizing a city or
a district to extend drinking water infrastructure or services or
wastewater infrastructure or services until it has  extended
those   entered into an enforceable agreement to extend
the same  services to all disadvantaged communities within
 or adjacent to  its sphere of  influence,
as specified, or has entered into an agreement to extend those
services to those disadvantaged communities,   influence
or adjacent to its jurisdictional boundaries,  unless specified
conditions are met. The bill would prohibit the commission from
approving a sphere of influence update where there exists a
disadvantaged unincorporated community within  or adjacent to
 the  city   city's  or special
district's sphere of influence  or contiguous with a city's or
qualifying special district's jurisdictional boundaries  that
lacks safe drinking water infrastructure or services or adequate
wastewater infrastructure or services unless specified conditions are
met.
   Existing law establishes a pilot program for the Napa and San
Bernardino local agency formation commissions that permits those
commissions to authorize a city or district to provide new or
extended services outside both its jurisdictional boundaries and its
sphere of influence under specified circumstances.
   This bill would prohibit those commissions from authorizing a city
or a district to extend drinking water infrastructure or services or
wastewater infrastructure or services until it has  extended
  entered into an enforceable agreement to extend those
 services to all disadvantaged communities within  or
adjacent to  its sphere of  influence, as specified,
or has entered into an agreement to extend those services to those
disadvantaged communities.   influence or contiguous
with a city's or district's jurisdictional boundaries that lack safe
drinking water or adequate wastewater infrastructure or services
unless specified conditions are met. 
   Existing law, except as otherwise provided, prohibits a local
agency formation commission from approving an annexation to a city of
any territory greater than 10 acres, or as determined by commission
policy, where there exists a disadvantaged unincorporated community,
as specified, unless an application to annex the disadvantaged
unincorporated community to the subject city has been filed with the
executive officer.
   This bill would extend that prohibition to  the 
 an  annexation to a qualified special district. The bill
would additionally prohibit a commission from approving an annexation
to a city or qualified special district of any territory greater
than 10 acres, or as determined by commission policy, where there
exists a disadvantaged unincorporated community within  or
adjacent to  the sphere of influence of a city or qualified
special district  or contiguous to the city's or qualified
special district's jurisdictional boundaries  that lacks safe
drinking water infrastructure or services or adequate wastewater
infrastructure or services,  unless   unless,
among other things,  the city or  qualified  special
district has entered into an enforceable agreement to extend those
services into the disadvantaged community or  communities, as
specified.   communities.  The bill would define
"qualified special district" to mean a special district with more
than 500 service  connections.   connections
that provides drinking water or waste  water services. 

   Existing law requires a local agency formation commission to
develop and determine the sphere of influence of each city and each
special district within the county and to enact policies designed to
promote the logical and orderly development of areas within the
sphere. Existing law authorizes the commission, in determining a
sphere of influence, to assess the feasibility of governmental
reorganization of particular agencies and recommend reorganization of
those agencies, as provided.
    This bill would instead require the commission to assess the
feasibility of governmental reorganization of particular agencies and
recommend reorganization of those agencies. The bill would prohibit
a commission from approving a sphere of influence update that removes
a disadvantaged community from a city's  or special district's
 sphere of influence unless  a majority of the voters in
the disadvantaged community approve of the proposed sphere of
influence.   the commission makes a finding that removal
of the community will result in improved service delivery to the
community. 
   Existing law requires a commission, in preparing and updating
spheres of influence, to conduct a service review of the municipal
services provided in the county or other area designated by the
commission. Existing law authorizes the commission, in conducting the
review, to assess various alternatives for improving efficiency and
affordability of infrastructure and service delivery, as specified,
and to include a review of whether the agencies under review are in
compliance with the California Safe Drinking Water Act. 
   This 
    Where   there exists a disadvantaged unincorporated
community that lacks adequate drinking water and waste  
water services and infrastructure within or contiguous with the
subject sphere, this  bill would instead require the commission
to make the assessment of  alternative  
alternatives  and to include the safe drinking water review
described  above.   above if the information is
readily available. 
   By imposing new duties on local government officials, this bill
would impose a  state-mandate   state-mandated
 local program.
   The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
   This bill would provide that, if the Commission on State Mandates
determines that the bill contains costs mandated by the state,
reimbursement for those costs shall be made pursuant to these
statutory provisions.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 56133 of the Government Code is amended to
read:
   56133.  (a) A city or district may provide new or extended
services by contract or agreement outside its jurisdictional boundary
only if it first requests and receives written approval from the
commission.
   (b) The commission may authorize a city or district to provide new
or extended services outside its jurisdictional boundary but within
its sphere of influence in anticipation of a later change of
organization.
   (c) If consistent with adopted policy, the commission may
authorize a city or district to provide new or extended services
outside its jurisdictional boundary and outside its sphere of
influence to respond to an existing or impending threat to the health
or safety of the public or the residents of the affected territory,
if both of the following requirements are met:
   (1) The entity applying for approval has provided the commission
with documentation of a threat to the health and safety of the public
or the affected residents.
   (2) The commission has notified any alternate service provider,
including any water corporation as defined in Section 241 of the
Public Utilities Code, that has filed a map and a statement of its
service capabilities with the commission.
   (d) The commission shall not authorize a city or a district to
extend drinking water infrastructure or services or wastewater
infrastructure or services pursuant to this section until it has
 extended those   entered into an enforceable
agreement to extend the same  services to all disadvantaged
communities within  or adjacent to  its sphere of
influence  that are facing existing or impending threats to
the public health or safety or has entered into an agreement to
extend those services to those disadvantaged communities that are
facing existing or impending threats to the public health or safety,
  or adjacent to its jurisdictional boundaries that lack
safe drinking water or adequate waste   water services or
infrastructure as soon as feasible to do so but within a period no
longer than five years,  unless either of the following
conditions are met:
   (1) The commission finds, based upon written evidence, that a
majority of the residents of the affected disadvantaged community or
communities are opposed to receiving the identified service or
services.  These findings shall not interfere with or inform
other programs or policies designed to expand basic services to
disadvantaged unincorporated communities, including, but not limited
to, Sections 116680 to 116684, inclusive, of   the Health
and Safety Code. 
   (2) The extension of services is authorized pursuant to
subdivision  (c).   (c) or the extension of
services is to a disadvantaged community. 
   (e) The executive officer, within 30 days of receipt of a request
for approval by a city or district to extend services outside its
jurisdictional boundary, shall determine whether the request is
complete and acceptable for filing or whether the request is
incomplete. If a request is determined not to be complete, the
executive officer shall immediately transmit that determination to
the requester, specifying those parts of the request that are
incomplete and the manner in which they can be made complete. When
the request is deemed complete, the executive officer shall place the
request on the agenda of the next commission meeting for which
adequate notice can be given but not more than 90 days from the date
that the request is deemed complete, unless the commission has
delegated approval of requests made pursuant to this section to the
executive officer. The commission or executive officer shall approve,
disapprove, or approve with conditions the extended services. If the
new or extended services are disapproved or approved with
conditions, the applicant may request reconsideration, citing the
reasons for reconsideration.
   (f) This section does not apply to any of the following:
   (1) 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 existing service provider.
   (2) The transfer of nonpotable or nontreated water.
   (3) The provision of surplus water to agricultural lands and
facilities, including, but not limited to, incidental residential
structures, for projects that serve conservation purposes or that
directly support agricultural industries. However, prior to extending
surplus water service to any project that will support or induce
development, the city or district shall first request and receive
written approval from the commission in the affected county.
   (4) An extended service that a city or district was providing on
or before January 1, 2001.
   (5) A local publicly owned electric utility, as defined by Section
9604 of the Public Utilities Code, providing electric services that
do not involve the acquisition, construction, or installation of
electric distribution facilities by the local publicly owned electric
utility, outside of the utility's jurisdictional boundary.
   (6) A fire protection contract, as defined in subdivision (a) of
Section 56134.
   (g) This section applies only to the commission of the county in
which the extension of service is proposed.
   (h) The commission shall not approve a sphere of influence update
where there exists a disadvantaged unincorporated community within
 or adjacent to  the  city  
city's  or special district's sphere of influence  or
contiguous with a city's or qualifying special district's
jurisdictional boundaries  that lacks safe drinking water
infrastructure or services or adequate wastewater infrastructure or
services unless the city or special district  or qualified
special district  has entered into an enforceable agreement to
extend those services into the disadvantaged community or communities
 as soon as feasible to do so but  within a period no
longer than  five years of the  approval of the  sphere
of influence change or the commission finds, based upon written
evidence, that a majority of the residents of the affected
disadvantaged community or communities are opposed to receiving the
identified service or services. 
   (1) These findings shall not interfere with or inform other
programs or policies designed to expand basic services to
disadvantaged unincorporated communities, including, but not limited
to, Sections 116680 to 116684, inclusive, of the Health and Safety
Code.  
   (2) A qualifying special district is a special district with more
than 500 service connections that provides drinking water or
wastewater services. 
  SEC. 2.  Section 56133.5 of the Government Code is amended to read:

   56133.5.  (a) A pilot program is hereby established for the Napa
and San Bernardino commissions. If consistent with adopted policy,
the Napa and San Bernardino commissions may authorize a city or
district to provide new or extended services outside its
jurisdictional boundary and outside its sphere of influence to
support existing or planned uses involving public or private
properties, subject to approval at a noticed public hearing in which
the commission makes all of the following determinations:
   (1) The extension of service or services deficiency was identified
and evaluated in a review of municipal services prepared pursuant to
Section 56430.
   (2) The extension of service will not result in either (1) adverse
impacts on open space or agricultural lands or (2) growth inducing
impacts.
   (3) A sphere of influence change involving the subject territory
and its affected agency is not feasible under this division or
desirable based on the adopted policies of the commission.
   (b) Subdivision (d) of Section 56133 shall apply to any request
for new or extended services pursuant to this section.
   (c) The  Napa and San Bernardino  commissions
shall not authorize a city or a district to extend drinking water
infrastructure or services or wastewater infrastructure or services
pursuant to this section until it has  extended 
 entered into an enforceable agreement to extend  those
services to all disadvantaged communities within  or adjacent
to  its sphere of influence  that are facing
existing or impending threats to the public health or safety or has
entered into an agreement to extend those services to those
disadvantaged communities that are facing existing or impending
threats to public health or safety.   or contiguous with
a city's or district's jurisdictional boundaries that lack sa 
 fe drinking water or adequate wastewater infrastructure or
services as soon as feasible to do so but within a period no longer
than five years of the approval of the underlying extension, unless
either of the following conditions are met:  
   (1) The commission finds, based upon written evidence, that a
majority of the residents of the affected disadvantaged community or
communities are opposed to receiving the identified service or
services. These findings shall not interfere with or inform other
programs or policies designed to expand basic services to
disadvantaged unincorporated communities, including, but not limited
to, Sections 116680 to 116684, inclusive, of the Health and Safety
Code.  
   (2) The extension of services is to a disadvantaged community.

   (d) For purposes of this section, "planned use" means any project
that is included in an approved specific plan as of July 1, 2015.
   (e) The Napa and San Bernardino commissions shall submit a report
before 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 this section and the action by the
commission to approve, disapprove, or approve with conditions. The
report required to be submitted pursuant to this subdivision shall be
submitted in compliance with Section 9795 of the Government Code.
   (f) The pilot program established pursuant to this section shall
be consistent with Chapter 8.5 (commencing with Section 1501) of the
Public Utilities Code.
   (g) This section shall remain in effect only until January 1,
2021, and as of that date is repealed.
  SEC. 3.  Section 56375 of the Government Code is amended to read:
   56375.  The commission shall have all of the following powers and
duties subject to any limitations upon its jurisdiction set forth in
this part:
   (a) (1) To review and approve with or without amendment, wholly,
partially, or conditionally, or disapprove proposals for changes of
organization or reorganization, consistent with written policies,
procedures, and guidelines adopted by the commission.
   (2) The commission may initiate proposals by resolution of
application for any of the following:
   (A) The consolidation of a district, as defined in Section 56036.
   (B) The dissolution of a district.
   (C) A merger.
   (D) The establishment of a subsidiary district.
   (E) The formation of a new district or districts.
   (F) A reorganization that includes any of the changes specified in
subparagraph (A), (B), (C), (D), or (E).
   (3) A commission may initiate a proposal described in paragraph
(2) only if that change of organization or reorganization is
consistent with a recommendation or conclusion of a study prepared
pursuant to Section 56378, 56425, or 56430, and the commission makes
the determinations specified in subdivision (b) of Section 56881.
   (4) A commission shall not disapprove an annexation to a city,
initiated by resolution, of contiguous territory that the commission
finds is any of the following:
   (A) Surrounded or substantially surrounded by the city to which
the annexation is proposed or by that city and a county boundary or
the Pacific Ocean if the territory to be annexed is substantially
developed or developing, is not prime agricultural land as defined in
Section 56064, is designated for urban growth by the general plan of
the annexing city, and is not within the sphere of influence of
another city.
   (B) Located within an urban service area that has been delineated
and adopted by a commission, which is not prime agricultural land, as
defined by Section 56064, and is designated for urban growth by the
general plan of the annexing city.
   (C) An annexation or reorganization of unincorporated islands
meeting the requirements of Section 56375.3.
   (5) As a condition to the annexation of an area that is
surrounded, or substantially surrounded, by the city to which the
annexation is proposed, the commission may require, where consistent
with the purposes of this division, that the annexation include the
entire island of surrounded, or substantially surrounded, territory.
   (6) A commission shall not impose any conditions that would
directly regulate land use density or intensity, property
development, or subdivision requirements.
   (7) The decision of the commission with regard to a proposal to
annex territory to a city shall be based upon the general plan and
prezoning of the city. When the development purposes are not made
known to the annexing city, the annexation shall be reviewed on the
basis of the adopted plans and policies of the annexing city or
county. A commission shall require, as a condition to annexation,
that a city prezone the territory to be annexed or present evidence
satisfactory to the commission that the existing development
entitlements on the territory are vested or are already at build-out,
and are consistent with the city's general plan. However, the
commission shall not specify how, or in what manner, the territory
shall be prezoned.
   (8) (A) Except for those changes of organization or reorganization
authorized under Section 56375.3, and except as provided by
subparagraph (B), a commission shall not approve an annexation to a
city or to a qualified special district of any territory greater than
10 acres, or as determined by commission policy, where either of the
following exists:
    (i) (I) A disadvantaged unincorporated community that is
contiguous to the area of proposed annexation, unless an application
to annex the disadvantaged unincorporated community to the subject
city has been filed with the executive officer.
   (II) An application to annex a contiguous disadvantaged community
shall not be required if either of the following apply:
   (ia) A prior application for annexation of the same disadvantaged
community has been made in the preceding five years.
   (ib) The commission finds, based upon written evidence, that a
majority of the registered voters within the affected disadvantaged
community are opposed to annexation.
   (ii) A disadvantaged unincorporated community within  or
adjacent to  the sphere of influence of a city or qualified
special district  or contiguous to the city's or qualified
special district's jurisdictional boundaries  that lacks safe
drinking water infrastructure or services or adequate wastewater
infrastructure or services unless  the   any of
the following conditions are met: 
    (I)     The  city or qualified special
district has entered into an enforceable agreement to extend those
services into the disadvantaged community or communities  as soon
as feasible to do so but  within  a period no longer than
 five years of the  completion   approval
 of the annexation. 
   (II) The commission finds, based upon written evidence, that a
majority of the residents of the affected disadvantaged community or
communities are opposed to receiving the identified service or
services. These findings shall not interfere with or inform other
programs or policies designed to expand basic services to
disadvantaged unincorporated communities, including, but not limited
to, Sections 116680 to 116684, inclusive, of the Health and Safety
Code.  
   (III) The annexation is an annexation of a disadvantaged
community. 
   (B) For purposes of this paragraph, "a qualified special district"
means a special district with more than 500 service 
connections.   connections that provides drinking water
or waste   water services. 
   (b) With regard to a proposal for annexation or detachment of
territory to, or from, a city or district or with regard to a
proposal for reorganization that includes annexation or detachment,
to determine whether territory proposed for annexation or detachment,
as described in its resolution approving the annexation, detachment,
or reorganization, is inhabited or uninhabited.
   (c) With regard to a proposal for consolidation of two or more
cities or districts, to determine which city or district shall be the
consolidated successor city or district.
   (d) To approve the annexation of unincorporated, noncontiguous
territory, subject to the limitations of Section 56742, located in
the same county as that in which the city is located, and that is
owned by a city and used for municipal purposes and to authorize the
annexation of the territory without notice and hearing.
   (e) To approve the annexation of unincorporated territory
consistent with the planned and probable use of the property based
upon the review of general plan and prezoning designations. No
subsequent change may be made to the general plan for the annexed
territory or zoning that is not in conformance to the prezoning
designations for a period of two years after the completion of the
annexation, unless the legislative body for the city makes a finding
at a public hearing that a substantial change has occurred in
circumstances that necessitate a departure from the prezoning in the
application to the commission.
   (f) With respect to the incorporation of a new city or the
formation of a new special district, to determine the number of
registered voters residing within the proposed city or special
district or, for a landowner-voter special district, the number of
owners of land and the assessed value of their land within the
territory proposed to be included in the new special district. The
number of registered voters shall be calculated as of the time of the
last report of voter registration by the county elections official
to the Secretary of State prior to the date the first signature was
affixed to the petition. The executive officer shall notify the
petitioners of the number of registered voters resulting from this
calculation. The assessed value of the land within the territory
proposed to be included in a new landowner-voter special district
shall be calculated as shown on the last equalized assessment roll.
   (g) To adopt written procedures for the evaluation of proposals,
including written definitions consistent with existing state law. The
commission may adopt standards for any of the factors enumerated in
Section 56668. Any standards adopted by the commission shall be
written.
   (h) To adopt standards and procedures for the evaluation of
service plans submitted pursuant to Section 56653 and the initiation
of a change of organization or reorganization pursuant to subdivision
(a).
   (i) To make and enforce regulations for the orderly and fair
conduct of hearings by the commission.
   (j) To incur usual and necessary expenses for the accomplishment
of its functions.
   (k) To appoint and assign staff personnel and to employ or
contract for professional or consulting services to carry out and
effect the functions of the commission.
   (  l  ) To review the boundaries of the territory
involved in any proposal with respect to the definiteness and
certainty of those boundaries, the nonconformance of proposed
boundaries with lines of assessment or ownership, and other similar
matters affecting the proposed boundaries.
   (m) To waive the restrictions of Section 56744 if it finds that
the application of the restrictions would be detrimental to the
orderly development of the community and that the area that would be
enclosed by the annexation or incorporation is so located that it
cannot reasonably be annexed to another city or incorporated as a new
city.
   (n) To waive the application of Section 22613 of the Streets and
Highways Code if it finds the application would deprive an area of a
service needed to ensure the health, safety, or welfare of the
residents of the area and if it finds that the waiver would not
affect the ability of a city to provide any service. However, within
60 days of the inclusion of the territory within the city, the
legislative body may adopt a resolution nullifying the waiver.
   (o) If the proposal includes the incorporation of a city, as
defined in Section 56043, or the formation of a district, as defined
in Section 2215 of the Revenue and Taxation Code, the commission
shall determine the property tax revenue to be exchanged by the
affected local agencies pursuant to Section 56810.
   (p) To authorize a city or district to provide new or extended
services outside its jurisdictional boundaries pursuant to Section
56133.
   (q) To enter into an agreement with the commission for an
adjoining county for the purpose of determining procedures for the
consideration of proposals that may affect the adjoining county or
where the jurisdiction of an affected agency crosses the boundary of
the adjoining county.
   (r) To approve with or without amendment, wholly, partially, or
conditionally, or disapprove pursuant to this section the annexation
of territory served by a mutual water company formed pursuant to Part
7 (commencing with Section 14300) of Division 3 of Title 1 of the
Corporations Code that operates a public water system to a city or
special district. Any annexation approved in accordance with this
subdivision shall be subject to the state and federal constitutional
prohibitions against the taking of private property without the
payment of just compensation. This subdivision shall not impair the
authority of a public agency or public utility to exercise eminent
domain authority.
  SEC. 4.  Section 56425 of the Government Code is amended to read:
   56425.  (a) In order to carry out its purposes and
responsibilities for planning and shaping the logical and orderly
development and coordination of local governmental agencies subject
to the jurisdiction of the commission to advantageously provide for
the present and future needs of the county and its communities, the
commission shall develop and determine the sphere of influence of
each city and each special district, as defined by Section 56036,
within the county and enact policies designed to promote the logical
and orderly development of areas within or adjacent to the sphere.
   (b) Prior to a city submitting an application to the commission to
update its sphere of influence, representatives from the city and
representatives from the county shall meet to discuss the proposed
new boundaries of the sphere and explore methods to reach agreement
on development standards and planning and zoning requirements within
the sphere to ensure that development within the sphere occurs in a
manner that reflects the concerns of the affected city and is
accomplished in a manner that promotes the logical and orderly
development of areas within the sphere. If an agreement is reached
between the city and county, the city shall forward the agreement in
writing to the commission, along with the application to update the
sphere of influence. The commission shall consider and adopt a sphere
of influence for the city consistent with the policies adopted by
the commission pursuant to this section, and the commission shall
give great weight to the agreement to the extent that it is
consistent with commission policies in its final determination of the
city sphere.
   (c) If the commission's final determination is consistent with the
agreement reached between the city and county pursuant to
subdivision (b), the agreement shall be adopted by both the city and
county after a noticed public hearing. Once the agreement has been
adopted by the affected local agencies and their respective general
plans reflect that agreement, then any development approved by the
county within the sphere shall be consistent with the terms of that
agreement.
   (d) If no agreement is reached pursuant to subdivision (b), the
application may be submitted to the commission and the commission
shall consider a sphere of influence for the city consistent with the
policies adopted by the commission pursuant to this section.
   (e) In determining the sphere of influence of each local agency,
the commission shall consider and prepare a written statement of its
determinations with respect to each of the following:
   (1) The present and planned land uses in the area, including
agricultural and open-space lands.
   (2) The present and probable need for public facilities and
services in the area.
   (3) The present capacity of public facilities and adequacy of
public services that the agency provides or is authorized to provide.

   (4) The existence of any social or economic communities of
interest in the area if the commission determines that they are
relevant to the agency.
   (5) For an update of a sphere of influence of a city or special
district that provides public facilities or services related to
sewers, municipal and industrial water, or structural fire
protection, that occurs pursuant to subdivision (g) on or after July
1, 2012, the present and probable need for those public facilities
and services of any disadvantaged unincorporated communities within
or adjacent  to  the existing sphere of influence.
   (f) Upon determination of a sphere of influence, the commission
shall adopt that sphere.
   (g) On or before January 1, 2008, and every five years thereafter,
the commission shall, as necessary, review and update each sphere of
influence.
   (h) In determining a sphere of influence, the commission shall
assess the feasibility of governmental reorganization of particular
agencies and recommend reorganization of those agencies when
reorganization is found to be feasible and if reorganization will
further the goals of orderly development and efficient and affordable
service delivery. The commission shall make all reasonable efforts
to ensure wide public dissemination of the recommendations.

         (i) When adopting, amending, or updating a sphere of
influence for a special district, the commission shall establish the
nature, location, and extent of any functions or classes of services
provided by existing districts.
   (j) When adopting, amending, or updating a sphere of influence for
a special district, the commission may require existing districts to
file written statements with the commission specifying the functions
or classes of services provided by those districts.
   (k) The commission shall not approve a sphere of influence update
that removes a disadvantaged community from a  city's sphere
of influence unless a majority of the voters in the disadvantaged
community approve of the proposed sphere of influence.  
city or a special district unless the commission makes a finding,
based on written evidence, that the removal of the disadvantaged
community will result in improved service delivery to the community.

  SEC. 5.  Section 56430 of the Government Code is amended to read:
   56430.  (a) In order to prepare and to update spheres of influence
in accordance with Section 56425, the commission shall conduct a
service review of the municipal services provided in the county or
other appropriate area designated by the commission. The commission
shall include in the area designated for service review the county,
the region, the subregion, or any other geographic area as is
appropriate for an analysis of the service or services to be
reviewed, and shall prepare a written statement of its determinations
with respect to each of the following:
   (1) Growth and population projections for the affected area.
   (2) The location and characteristics of any disadvantaged
unincorporated communities within or contiguous to the sphere of
influence.
   (3) Present and planned capacity of public facilities, adequacy of
public services, and infrastructure needs or deficiencies including
needs or deficiencies related to sewers, municipal and industrial
water, and structural fire protection in any disadvantaged,
unincorporated communities within or contiguous to the sphere of
influence.
   (4) Financial ability of agencies to provide services.
   (5) Status of, and opportunities for, shared facilities.
   (6) Accountability for community service needs, including
governmental structure and operational efficiencies.
   (7) Any other matter related to effective or efficient service
delivery, as required by commission policy.
   (b) In conducting a service review, the commission shall
comprehensively review all of the agencies that provide the
identified service or services within the designated geographic area.
 The commission   Where there exists a
disadvantaged unincorporated community that lacks adequate drinking
water and waste   water services and infrastructure within
or contiguous with the subject sphere, the commission  shall
assess various alternatives for improving efficiency and
affordability of infrastructure and service delivery within and
contiguous to the sphere of influence, including, but not limited to,
the consolidation of governmental agencies or the extension of
services, or both.
   (c) In conducting a service review, the commission shall include a
review of whether the agencies under review, including any public
water system as defined in Section  116275,  
116275 of the Health and Safety Code,  are in compliance with
the California Safe Drinking Water Act (Chapter 4 (commencing with
Section 116270) of Part 12 of Division 104 of the Health and Safety
 Code).   Code) if the information is readily
available.  A public water system may satisfy any request for
information as to compliance with that act by submission of the
consumer confidence or water quality report prepared by the public
water system as provided by Section 116470 of the Health and Safety
Code.
   (d) The commission may request information, as part of a service
review under this section, from identified public or private entities
that provide wholesale or retail supply of drinking water, including
mutual water companies formed pursuant to Part 7 (commencing with
Section 14300) of Division 3 of Title 1 of the Corporations Code, and
private utilities, as defined in Section 1502 of the Public
Utilities Code.
   (e) The commission shall conduct a service review before, or in
conjunction with, but no later than the time it is considering an
action to establish a sphere of influence in accordance with Section
56425 or 56426.5 or to update a sphere of influence pursuant to
Section 56425.
  SEC. 6.  If the Commission on State Mandates determines that this
act contains costs mandated by the state, reimbursement to local
agencies and school districts for those costs shall be made pursuant
to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of
the Government Code.