Amended in Senate April 12, 2016

Amended in Senate March 28, 2016

Senate Bill No. 1318

Introduced by Senator Wolk

February 19, 2016

An act to amend Sections begin delete 56133, 56133.5, end delete 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.

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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.

end delete begin delete

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 entered into an enforceable agreement to extend the same services to all disadvantaged communities within its sphere of 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 the 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.

end delete begin delete

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.

end delete begin delete

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 entered into an enforceable agreement to extend those services to all disadvantaged communities within its sphere of 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.

end delete

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 an annexation to a qualified special district. begin delete 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 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, 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. end delete The bill would define “qualified special district” to mean a special district with more than 500 service connections that provides drinking water or wastewater 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. begin delete 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. end delete

begin delete This bill would instead require the commission to assess the feasibility of governmental reorganization of particular agencies and recommend reorganization of those agencies. end delete 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 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.

Where there exists a disadvantaged unincorporated community that lacks adequate drinking water and wastewater services and infrastructure within or contiguous with the subject sphere, this bill would instead require the commission to make the assessment of alternatives and to include the safe drinking water review described above if the information is begin delete readily end delete available begin insert from the State Water Resources Control Board or other sources. This bill would, on or before January 1, 2022, and every 5 years thereafter, require the commission to conduct service reviews sufficient to have reviewed the entire territory of the county. The bill would require the commission to file a map of the county that identifies disadvantaged unincorporated communities that lack safe drinking water or adequate wastewater with the Office of Planning and Research, and would require the Office of Planning and Research to post the map on its Internet Web site. The bill would additionally require the commission, within 2 years of identifying a disadvantaged unincorporated community that lacks safe drinking water or adequate wastewater services, to recommend a plan based on the alternatives analyzed and adopt any actions necessary to implement the plan, as specified end insert .

By imposing new duties on local government officials, this bill would impose a 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:

begin delete

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 entered
into an enforceable agreement to extend the same services to all
disadvantaged communities within its sphere of influence or
adjacent to its jurisdictional boundaries that lack safe drinking
water or adequate wastewater 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) 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 the 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 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 entered
into an enforceable agreement to extend those services to all
disadvantaged communities within its sphere of influence or
contiguous with a city’s or district’s jurisdictional boundaries that
lack safe 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 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 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 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
that provides drinking water or wastewater 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.

end delete

begin insert

begin insert SECTION 1. end insert   

end insert

begin insert Section 56375 of the end insert begin insert Government Code end insert begin insert is
amended to read: end insert

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 begin insert or to a qualified special district end insert of any territory
greater than 10 acres, or as determined by commission policy,
where there exists 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.

(B) An application to annex a contiguous disadvantaged
community shall not be required if either of the following apply:

(i) A prior application for annexation of the same disadvantaged
community has been made in the preceding five years.

(ii) The commission finds, based upon written evidence, that a
majority of the registered voters within the affected begin delete territory end delete
begin insert disadvantaged unincorporated community end insert are opposed to
annexation.

begin insert

(C) For purposes of this paragraph, “a qualified special
district” means a special district with more than 500 service
connections that provides drinking water or wastewater services.

end insert

(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.

begin delete SEC. 4. end delete

begin insert SEC. 2. end insert   

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 begin delete shall end delete
begin insert may end insert 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 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.

begin delete SEC. 5. end delete

begin insert SEC. 3. end insert   

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. Where there exists a disadvantaged unincorporated
community that lacks adequate drinking water and wastewater
services and infrastructure within or contiguous with the subject
sphere, the commission shall assess various alternatives for
improving efficiency and affordability of begin insert drinking water or
wastewater end insert 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 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) if the
information is begin delete readily end delete available begin insert end insert begin insert from the State Water Resources
Control Board or other sources end insert . 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)  begin insert (1) end insert begin insert   end insert 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.

begin insert

(2) On or before January 1, 2022, and every five years
thereafter, the commission shall conduct service reviews sufficient
to have reviewed the entire territory of the county.

end insert begin insert

(f) The commission shall file a map of the county that identifies
disadvantaged unincorporated communities that lack safe drinking
water or adequate wastewater in electronic format with the Office
of Planning and Research. The Office of Planning and Research
shall make the map available on its Internet Web site.

end insert begin insert

(g) (1) Within two years of identification of a disadvantaged
unincorporated community that lacks safe drinking water or
adequate wastewater services pursuant to this section, the
commission shall recommend a plan based on the alternatives
analyzed and shall adopt any actions necessary to implement the
plan, including sphere of influence updates, extensions of service,
or changes of organization.

end insert begin insert

(2) Actions taken to adopt a plan under this subdivision shall
not be subject to an election or any protest proceedings, as defined
in Section 56069.5, except that the commission shall conduct
protest proceedings for residents of the disadvantaged community.

end insert begin insert

(3) The commission shall not be required to adopt or implement
a plan if the commission finds, based on substantial evidence, that
there is no technical or economically feasible way of connecting
the disadvantaged unincorporated community to an existing system,
considering any financial assistance available from the State Water
Resources Control Board or any other applicable source of
financial assistance. 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.

end insert begin insert

(h) (1) Notwithstanding Section 56133, 56133.5, or 56375, on
and after January 1, 2022, a commission shall not change the
sphere of influence of, or authorize extension of services by, a
qualifying city or special district if the commission has not done
one of the following:

end insert begin insert

(A) Conducted the analysis required by this section.

end insert begin insert

(B) Adopted a plan or taken the actions required by subdivision
(g).

end insert begin insert

(2) Notwithstanding Section 56133, 56133.5, or 56375, a
commission shall not change the sphere of influence of, or
authorize an extension of services by, a qualifying city or special
district if the city or special district has been designated in a plan
developed pursuant to subdivision (g) to provide water or
wastewater services and the city or special district has not begun
providing water or wastewater service, as identified by the
commission’s plan, within three years of being designated in the
plan.

end insert begin insert

(3) The prohibition against a change to a sphere of influence
or extension of service pursuant to paragraphs (1) and (2) shall
not apply to either of the following:

end insert begin insert

(A) An application to extend services to, or include in their
sphere of influence, a disadvantaged unincorporated community.

end insert begin insert

(B) An extension of service authorized pursuant to subdivision
(c) of Section 56133.

end insert begin insert

(i) As used in this section, “a qualifying city or special district”
means a city or special district that provides water service or
wastewater services and serves 500 or more connections.

end insert

begin delete SEC. 6. end delete

begin insert SEC. 4. end insert   

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.