BILL NUMBER: AB 2838	CHAPTERED
	BILL TEXT

	CHAPTER   761
	FILED WITH SECRETARY OF STATE   SEPTEMBER 27, 2000
	APPROVED BY GOVERNOR   SEPTEMBER 26, 2000
	PASSED THE ASSEMBLY   AUGUST 31, 2000
	PASSED THE SENATE   AUGUST 30, 2000
	AMENDED IN SENATE   AUGUST 29, 2000
	AMENDED IN SENATE   AUGUST 28, 2000
	AMENDED IN SENATE   AUGUST 25, 2000
	AMENDED IN SENATE   AUGUST 10, 2000
	AMENDED IN SENATE   AUGUST 7, 2000
	AMENDED IN SENATE   JUNE 28, 2000
	AMENDED IN ASSEMBLY   MAY 18, 2000

INTRODUCED BY   Assembly Member Hertzberg
   (Coauthors:  Assembly Members Alquist, Calderon, Cardenas, Knox,
Kuehl, Romero, Strom-Martin, Thomson, and Torlakson)
   (Coauthors:  Senators Johnston and Rainey)

                        FEBRUARY 28, 2000

   An act to amend Section 35721 of, and to add Sections 35700.5 and
35721.5 to, the Education Code, to amend Sections 34880, 56000,
56001, 56029, 56036, 56038, 56046, 56048, 56064, 56067, 56068, 56069,
56074, 56100, 56101, 56106, 56107, 56122, 56123, 56124, 56129,
56132, 56133, 56150, 56154, 56156, 56157, 56159, 56300, 56301, 56325,
56326, 56326.5, 56327, 56328, 56329, 56332, 56334, 56375, 56375.5,
56377, 56383, 56384, 56386, 56425, 56429, 56653, 56705, 56706, 56708,
56710, 57000, 57001, 57002, 57003, 57007, 57008, 57025, 57026,
57050, 57051, 57052, 57075, 57075.5, 57076, 57077, 57078, 57080,
57081, 57090, 57125, 57126, 57127, 57129, 57130, 57131, 57133, 57138,
57144, 57145, 57146, 57148, 57149, 57150, 57176, 57176.1, 57177,
57177.5, 57178, 57179, 57200, 57201, 57302, 57303, 57379, 57384,
57402, and 57404 of, to amend the heading of Chapter 4 (commencing
with Section 56800) of Part 3 of Division 3 of Title 5 of, to amend
and renumber Sections 57053, 57079.5, 57082, 57082.5, 57083, 57083.5,
57084, 57085, 57086, 57087, 57087.5, 57087.7, 57088, 57089, 57091,
57092, 57093, 57100, 57101, 57102, 57103, 57103.1, and 57104 of, to
amend, renumber, and add Section 56800 of, to add Sections 56020.5,
56020.7, 56037.5, 56038.5, 56100.1, 56325.1, 56327.3, 56332.5,
56375.3, 56381.6, 56425.5, 56430, 56655, 56657, 56658, 56660, 56661,
56662, 56663, 56664, 56665, 56666, 56667, 56668, 56668.5, 56700.1,
56700.4, 56803, 56815.2, 56848, and 57078.5 to, to add a heading as
Article 1 (commencing with Section 56800) to, and to add Article 2
(commencing with Section 56810) and Article 3 (commencing with
Section 56815) to, Chapter 4 of Part 3 of Division 3 of Title 5 of,
to add Article 1 (commencing with Section 56820) to, to add a heading
as Article 2 (commencing with Section 56825) to, to add Article 3
(commencing with Section 56859) to, to add Article 4 (commencing with
Section 56864) to, and to add Article 5 (commencing with Section
56875) to, Chapter 5 of Part 3 of Division 3 of Title 5 of, to add a
heading as Chapter 5 (commencing with Section 56820) to, to add
Chapter 3 (commencing with Section 56720) and Chapter 6 (commencing
with Section 56880) to, Part 3 of Division 3 of Title 5 of, to add
and repeal Section 56434 of, to repeal Sections 56022, 56108, 56109,
56110, 56111, 56111.1, 56111.5, 56111.6, 56111.7, 56111.9, 56111.10,
56111.11, 56111.12, 56111.13, 56111.14, 56112, 56113, 56114, 56330,
56375.1, 56375.4, 56375.45, 56426, 56656, 56700.3, 56700.5, 56701,
56702, 56800.3, 56827.5, 56828.5, 56833.1, 56833.3, 56833.5, 56839.1,
56840.5, 56842.2, 56842.5, 56842.6, 56842.7, 56844.1, 56844.2,
56848.3, 56848.5, 56850, 56851, 56852, 56852.3, 56852.5, 56858,
56859, 57004, 57005, 57006, 57079, and 57175 of, to repeal the
heading of Chapter 5 (commencing  with Section 56825) of Part 3 of
Division 3 of Title 5 of, to repeal Chapter 5 (commencing with
Section 56450) of, and Chapter 6 (commencing with Section 56475) of,
Part 2 of Division 3 of Title 5 of, to repeal Chapter 3 (commencing
with Section 56750) of Part 3 of Division 3 of Title 5 of, and to
repeal and add Sections 56380, 56381, 56801, 56802, 56826, 56827,
56828, 56829, 56830, 56831, 56832, 56833, 56834, 56835, 56836, 56837,
56838, 56839, 56840, 56841, 56842, 56843, 56844, 56845, 56846,
56847, 56849, 56853, 56854, 56855, 56856, and 56857 of, the
Government Code, and to amend Section 99 of the Revenue and Taxation
Code, relating to local agencies.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 2838, Hertzberg.  Local agency formation commissions.
   (1) Under existing law, the Cortese-Knox Local Government
Reorganization Act of 1985, the local agency formation commission in
each county is required to review and approve or disapprove proposals
for changes of organization or reorganization of cities and
districts within the county.  If a proposal is approved, further
proceedings, including a hearing and an election if required, are
conducted by the county or other public agency designated as the
conducting authority.
   This bill would rename the act as the Cortese-Knox-Hertzberg Local
Government Reorganization Act of 2000, delete references in the act
to the conducting authority, and transfer its duties and powers to
the commission.
   (1.5) Under existing law, an action to reorganize school districts
may be initiated by a petition filed with the county superintendent
of schools signed by 25% of the registered voters in the territory to
be reorganized.  Following the receipt of a petition signed by at
least 10% of the qualified electors of a school district for
unification or other organization, the county committee on school
district organization is required to hold a public hearing.
   This bill would require the county committee to provide written
notice to the commission before initiating proceedings to consider
any reorganization plan under either provision.  The bill would also
require the county committee to hold a public hearing on receipt of a
resolution of a local agency, as specified, for consideration of
unification or other reorganization.
   (2) Under the act, noncontiguous territory may not be annexed to a
city.  However, statutory exceptions permit particular cities to
annex noncontiguous territory that constitutes a state correctional
facility or a state correctional training facility.
   This bill would delete these exceptions and authorize any city to
annex that noncontiguous territory upon approval of the local agency
formation commission.
   (3) Existing law authorizes a city or district to provide new or
extended services by contract or agreement outside its jurisdictional
boundaries if it receives written approval from the commission but
provides that this approval requirement does not apply to contracts
or agreements solely involving 2 or more public agencies.
   This bill would permit this exception where the public service to
be provided is an alternative to or substitute for public services
already being provided, as specified.  This bill would also require
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, to determine whether the request is complete
and acceptable for filing and, if not, to transmit that
determination to the requester, specifying the parts that are
incomplete.  When the request is deemed complete, the executive
officer would be required to place the request on the agenda of the
next commission meeting.
   (4) Existing law specifies how required notice shall be published,
posted, or mailed with respect to the proceedings of a local agency
formation commission.
   This bill would provide that required notice shall also be given
in electronic format on a website provided by the commission to the
extent that the commission maintains a website.  The bill would
require the commission to establish and maintain, or otherwise
provide access to, notices and provide other commission information
for the public through an Internet website, thereby imposing a
state-mandated local program.
   This bill would require the commission to provide written notice
of a proposed reorganization that may affect school attendance for a
district to the countywide school district and each school
superintendent whose district would be affected.
   This bill would additionally require the commission to provide
mailed notice to all registered voters and owners of property within
300 feet of the exterior boundary of the property that is the subject
of a commission hearing.
   (5) Existing law defines "landowner" or "owner of land" for
purposes of the act as any person shown as the owner of land on the
last equalized assessment roll except where that person is no longer
the owner.
   This bill would change that definition to any person shown as the
owner of land on the most recent assessment roll being prepared by
the county at the time the commission adopts a resolution of
application except where that person is no longer the owner, and
would make related changes.
   (6) Existing provisions of the act require that notices of
hearings of a local agency formation commission be published at least
15 days prior to the date of the hearing.
   This bill would change that period to at least 20 days prior to
the date of the hearing.
   (7) Existing law declares the intent of the Legislature that each
commission establish policies and exercise its powers to encourage
efficient urban development and consideration of preserving
open-space lands.
   This bill would declare the intent of the Legislature that each
commission establish written policies and procedures not later than
January 1, 2002.  The bill would require the policies and procedures
to include lobbying disclosure and reporting requirements and forms
to be used for submittals to the commission.
   (8) The act establishes the purposes of a local agency formation
commission, such as discouraging urban sprawl and encouraging orderly
formation and development of local agencies.
   This bill would add to those purposes preserving open-space and
agricultural lands and efficiently providing government services.
The bill would also require a commission, when formation of a new
governmental entity is proposed, to make a determination as to
whether existing agencies can feasibly provide the needed service or
services in a more efficient and accountable manner.  The bill would
require a commission to apply various factors when reviewing and
approving or disapproving proposals that may convert open-space lands
to other uses.
   (9) The act establishes procedures for the selection of the 5
members of a local agency formation commission.
   This bill would increase the number of members to 7 and would
revise the selection procedures.
   Existing law provides that the commission for Los Angeles County
consists of 7 members.
   This bill would increase that membership to 9 members.
   (10) Existing law sets forth the various powers and duties of a
local agency formation commission in reviewing and approving or
disapproving proposals for changes of organization or reorganization.
  Among other things, a commission may require as a condition to
annexation that a city prezone the territory to be annexed.
   This bill would provide that a commission shall require that
prezoning, and would require that approval of the annexation be
consistent with the planned and probable use of the property based
upon the review of the general plan and prezoning designations.
   This bill would also authorize a commission to enter into an
agreement with the commission of an adjoining county to determine
procedures for considering proposals that may affect the adjoining
county.  The bill would also authorize a commission to review the
consistency of a proposal within a city's general plan when a
proposed action would require the extension of critical services.
   This bill would authorize a commission to require the disclosure
of contributions, expenditures, and independent expenditures made in
support of or opposition to a proposal and to require lobbying
disclosure and reporting requirements for persons who attempt to
influence pending decisions by commission members, staff, or
consultants, would prescribe how disclosure is to be made, and would
require a commission to hold public hearings to discuss the adoption
of policies and procedures governing disclosure, thereby imposing a
state-mandated local program.
   (11) Existing law requires the county board of supervisors to
provide for necessary quarters, facilities, supplies, and the usual
and necessary operating expenses of a local agency formation
commission.  The commission is required to submit an estimate of
operating expenses to the board.
   This bill would repeal that requirement and provide that the
commission expenses shall be provided by the county, the cities, and
the special districts.  The bill would require that the estimate be
submitted to the cities and the counties and would require the
commission to adopt a budget following a noticed public hearing,
thereby imposing a state-mandated local program.
   (12) Existing law authorizes a local agency formation commission
to establish a schedule of fees for the costs of proceedings under
the Cortese-Knox Local Government Reorganization Act of 1985,
including a fee for checking the sufficiency of any petition filed
with the executive officer of the commission.
   This bill would require the signatures on a petition to be
verified by the county elections official.  The bill would provide
that the costs of verification shall be provided for in the same
manner and by the same agencies that bear those costs for an
initiative petition in the same jurisdiction.
   The bill would also authorize a commission to waive a fee in the
public interest and to request a loan from the Controller for
petition proceedings for an incorporation, as specified.
   (13) Existing law authorizes a local agency formation commission
to appoint an executive officer and legal counsel.
   This bill would require a commission to appoint an executive
officer and legal counsel, would authorize the commission to appoint
staff, and would provide for alternatives if there is a conflict of
interest on a matter before the commission.
   (14) Existing law requires a local agency formation commission to
develop and determine the sphere of influence of each local
governmental agency within the county and periodically review and
update the adopted sphere of influence.
   This bill would require the review and update not less than once
every 5 years.  For that update and review the bill would require a
commission to conduct a service review of municipal services provided
in the county.  The bill would require a commission to make certain
determinations concerning functions and services provided by existing
districts before approving any special district sphere of influence
or any sphere of influence that includes a special district.
   (15) Existing law requires a local agency formation commission to
develop, determine, and adopt a sphere of influence for each local
governmental agency that provides facilities or services related to
development no later than January 1, 1985.
   This bill instead would require the commission to develop and
determine the sphere of influence of each local governmental agency
and update that sphere of influence not less than once every 5 years
and would provide a procedure until January 1, 2007, for city and
county representatives to reach agreement on the scope of the
proposed or revised sphere of influence.  The bill would authorize
the commission to review and approve a proposal that extends services
into unserved, unincorporated areas and to review the creation of
new service providers, as specified.
   (15.5) Existing law authorizes certain local agencies to establish
sewer and water supply facilities on designated lands related to the
development of certain territory within the Norton Air Force Base
Redevelopment Project Area, as specified.
   This bill would provide that a determination of a city's sphere of
influence that includes any of that redevelopment project area shall
not preclude any other local agency from providing facilities or
services related to development, as specified.
   (16) Under the act, a local agency formation commission may adopt
regulations affecting the functions and services of special
districts.  As long as those regulations are in effect, the special
districts must be represented on the commission.
   This bill would repeal this representation requirement and would
provide that if the commission has special district representation
prior to January 1, 2001, a majority of the independent special
districts may require the commission to repeal previously adopted
regulations that limit the exercise of powers of special districts.
   (17) Existing law creates the Special Commission on Los Angeles
Boundaries with specified duties and implements that commission only
to the extent that funds are appropriated in the annual Budget Act.
   This bill would repeal these provisions.
   (18) Existing law defines a special reorganization as a
reorganization that includes the detachment of territory from a city
or city and county and the incorporation of that entire detached
territory as a city.
   This bill would specify that proceedings for a special
reorganization shall be conducted in accordance with the procedures
otherwise prescribed for incorporation of a city.
   The bill would also require that expenditures and contributions
for political purposes related to a change of organization or
reorganization proposal be disclosed and reported in the manner
provided for local initiative measures.
   (19) Existing law specifies the percentages of registered voters
or landowners who must sign petitions for various changes or
organization.
   This bill would revise these percentages for city consolidations,
city annexations, city detachments, district detachments or
annexations, district dissolutions, district mergers, or the
establishment of a district as a subsidiary district of a city.
   (20) Existing law requires that commission review of a
reorganization proposal include, but not be limited to, specified
factors.
   This bill would add to those factors the ability of the newly
formed or receiving entity to provide services, the timely
availability of adequate water supplies, the extent to which the
proposal will assist the receiving entity in achieving its fair share
of the regional housing needs, and information from landowners or
relating to existing land use designations.
   This bill would also require a commission, in considering a
proposal including the formation of a new government, to make a
determination of the efficiency of existing agencies in providing the
needed service or services.  The bill would authorize the commission
to consider regional growth goals and policies established by local
elected officials.
   (21) Existing law provides that in any order approving a change of
organization or reorganization, the commission may make approval
conditional on any of specified factors.
   This bill would authorize a condition prohibiting an agency being
dissolved from taking certain actions unless an emergency situation
exists.
   (22) This bill would require the Office of Planning and Research,
in consultation with the Controller, to convene a task force of
representatives from local agencies and commissions to create
statewide guidelines for the incorporation process.
   (23) Existing law authorizes any person or affected agency to file
a written request to amend or reconsider a commission resolution
making determinations.
   This bill would require the request to state new or different
facts or applicable new law to warrant reconsideration of the
resolution.
   (24) Existing law requires the conducting authority to consider
certain factors if a proposed change of organization is a district
annexation.
   This bill would require a commission to consider these factors for
a city detachment or a district annexation, other than a special
reorganization, would add as a factor any resolution objecting to the
action that may be filed by an affected agency, and would require
the commission to give great weight to such a resolution.
   (25) Existing law requires, in the event of a jurisdictional
change that would affect the service area or responsibility of one or
more special districts, that the board of supervisors negotiate any
exchange of property taxes on behalf of the district or districts.
   This bill would require the board, prior to entering into
negotiation, to consult with the affected districts, with notice to
the district board members and executive officer, and adequate
opportunity for comment.
   (26) This bill would incorporate additional changes in specified
sections of the Government Code proposed by AB 1495 and AB 2779, that
would become operative if either or both of those bills and this
bill are enacted and become effective on or before January 1, 2001,
and this bill is enacted last.
  (27) 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, including the creation of a State Mandates Claims Fund
to pay the costs of mandates that do not exceed $1,000,000 statewide
and other procedures for claims whose statewide costs exceed
$1,000,000.
   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.


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


  SECTION 1.  Section 35700.5 is added to the Education Code, to
read:
   35700.5.  Before initiating proceedings to consider any
reorganization plan, the county committee on school district
organization shall provide written notice of the proposed action to
the local agency formation commission for the affected area.
  SEC. 1.5.  Section 35721 of the Education Code is amended to read:

   35721.  (a) On receipt of a petition signed by at least 10 percent
of the qualified electors residing in any district for a
consideration of unification or other reorganization of any area, the
county committee shall hold a public hearing on the petition at a
regular or special meeting.
   (b) On receipt of a petition signed by at least 5 percent of the
qualified electors residing in a school district with over 200,000
pupils in average daily attendance in which the petition is to
reorganize the district into two or more districts, the county
committee shall hold a public hearing on the petition at a regular or
special meeting.
   (c) On receipt of a resolution approved by a majority of the
members of a city council, county board of supervisors, governing
body of a special district, or local agency formation commission that
has jurisdiction over all or a portion of the school district for
consideration of unification or other reorganization of any area, the
county committee shall hold a public hearing on the proposal at a
regular or special meeting.
   (d) Following the hearing conducted pursuant to subdivision (a),
(b), or (c), the county committee shall grant or deny the petition.
If the county committee grants the petition, it shall adopt a
tentative recommendation following which action it shall hold one or
more public hearings in the area proposed for reorganization.  The
provisions of Sections 35705 and 35705.5 shall apply to any such
public hearing.
  SEC. 2.  Section 35721.5 is added to the Education Code, to read:
   35721.5.  Before initiating proceedings to consider any
reorganization plan, the county committee on school district
organization shall provide written notice of the proposed action to
the local agency formation commission for the affected area.
  SEC. 3.  Section 34880 of the Government Code is amended to read:
   34880.  (a) If the petition or proposal developed by the
commission for submission to the electorate for incorporation or
special reorganization of a city provides for the election of members
of the legislative body by (or from) districts and includes
substantially the provisions required to be included in an ordinance
providing for that election, including Section 34871, the members of
the legislative body shall be elected in the manner provided in the
petition or proposal.
   (b) The members of the legislative body shall hold office until
the next general municipal election.  At the next general municipal
election the members elected by or from the even-numbered districts
shall hold office for four years and the members elected by or from
the odd-numbered districts shall hold office for two years.
Thereafter the term of office is four years.
  SEC. 3.5.  Section 56000 of the Government Code is amended to read:

   56000.  This division shall be known and may be cited as the
Cortese-Knox-Hertzberg Local Government Reorganization Act of 2000.

  SEC. 4.  Section 56001 of the Government Code is amended to read:
   56001.  The Legislature finds and declares that it is the policy
of the state to encourage orderly growth and development which are
essential to the social, fiscal, and economic well-being of the
state.  The Legislature recognizes that the logical formation and
determination of local agency boundaries is an important factor in
promoting orderly development and in balancing that development with
sometimes competing state interests of discouraging urban sprawl,
preserving open-space and prime agricultural lands, and efficiently
extending government services.  The Legislature also recognizes that
providing housing for persons and families of all incomes is an
important factor in promoting orderly development.  Therefore, the
Legislature further finds and declares that this policy should be
effected by the logical formation and modification of the boundaries
of local agencies, with a preference granted to accommodating
additional growth within, or through the expansion of, the boundaries
of those local agencies which can best accommodate and provide
necessary governmental services and housing for persons and families
of all incomes in the most efficient manner feasible.
   The Legislature recognizes that urban population densities and
intensive residential, commercial, and industrial development
necessitate a broad spectrum and high level of community services and
controls.  The Legislature also recognizes  that when areas become
urbanized to the extent that they need the full range of community
services, priorities are required to be established regarding the
type and levels of services that the residents of an urban community
need and desire; that community service priorities be established by
weighing the total community service needs against the total
financial resources available for securing community services; and
that those community service priorities are required to reflect local
circumstances, conditions, and limited financial resources.  The
Legislature finds and declares that a single multipurpose
governmental agency is accountable for community service needs and
financial resources and, therefore, may be the best mechanism for
establishing community service priorities especially in urban areas.
Nonetheless, the Legislature recognizes the critical role of many
limited purpose agencies, especially in rural communities.  The
Legislature also finds that, whether governmental services are
proposed to be provided by a single-purpose agency, several agencies,
or a multipurpose agency, responsibility should be given to the
agency or agencies that can best provide government services.
  SEC. 5.  Section 56020.5 is added to the Government Code, to read:

   56020.5.  "Certificate of completion" means the document prepared
by the executive officer and recorded with the county recorder that
confirms the final successful resolution of a change of organization
or reorganization.
  SEC. 6.  Section 56020.7 is added to the Government Code, to read:

   56020.7.  "Certificate of termination of proceedings" means the
document prepared by the executive officer and retained by the
commission that indicates that a proposal for a change of
organization or reorganization was terminated because of a majority
written protest or rejection by voters in an election.
  SEC. 7.  Section 56022 of the Government Code is repealed.
  SEC. 8.  Section 56029 of the Government Code is amended to read:
   56029.  "Conducting authority" means the commission of the
principal county of the entity proposing a change of organization or
reorganization, unless another conducting authority is specified by
law.
  SEC. 9.  Section 56036 of the Government Code is amended to read:
   56036.  (a) "District" or "special district" means an agency of
the state, formed pursuant to general law or special act, for the
local performance of governmental or proprietary functions within
limited boundaries.  "District" or "special district" includes a
county service area, but excludes all of the following:
   (1) The state.
   (2) A county.
   (3) A city.
   (4) A school district or a community college district.
   (5) A special assessment district.
   (6) An improvement district.
   (7) A community facilities district formed pursuant to the
Mello-Roos Community Facilities Act of 1982, Chapter 2.5 (commencing
with Section 53311) of Part 1 of Division 2 of Title 5.
   (8) A permanent road division formed pursuant to Article 3
(commencing with Section 1160) of Chapter 4 of Division 2 of the
Streets and Highways Code.
   (9) An air pollution control district or an air quality
maintenance district.
   (10) A service zone of a fire protection district.
   (b) Except as otherwise provided in paragraph (1), each of the
entities listed in paragraph (1) is a "district" or a "special
district" for the purposes of this division.
   (1) For the purposes of Chapter 1 (commencing with Section 57000)
to Chapter 7 (commencing with Section 57175), inclusive, of Part 4 or
Part 5 (commencing with Section 57300), none of the following
entities is a "district" or a "special district:"
   (A) A unified or union high school library district.
   (B) A bridge and highway district.
   (C) A joint highway district.
   (D) A transit or rapid transit district.
   (E) A metropolitan water district.
   (F) A separation of grade district.
   (2) Any proceedings pursuant to Part 4 (commencing with Section
57000) for a change of organization involving an entity described in
paragraph (1) shall be conducted pursuant to the principal act
authorizing the establishment of that entity.
   (c) Except as otherwise provided in paragraph (1), each of the
entities listed in paragraph (1) is a "district" or "special district"
for purposes of this division.
   (1) For the purposes of Chapter 1 (commencing with Section 57000)
to Chapter 7 (commencing with Section 57175), inclusive, of Part 4 or
Part 5 (commencing with Section 57300), none of the following
entities is a "district" or "special district" if the commission of
the principal county determines, in accordance with Sections 56127
and 56128, that the entity is not a "district" or "special district."

   (A) A flood control district.
   (B) A flood control and floodwater conservation district.
   (C) A flood control and water conservation district.
   (D) A conservation district.
   (E) A water conservation district.
   (F) A water replenishment district.
   (G) The Orange County Water District.
   (H) A California water storage district.
   (I) A water agency.
   (J) A county water authority or a water authority.
   (2) If the commission determines that an entity described in
paragraph (1) is not a "district" or "special district," any
proceedings pursuant to Part 4 (commencing with Section 57000) for a
change of organization involving the entity shall be conducted
pursuant to the principal act authorizing the establishment of that
entity.
  SEC. 10.  Section 56037.5 is added to the Government Code, to read:

   56037.5.  "Elections official" shall have the same meaning as in
Section 320 of the Elections Code.
  SEC. 11.  Section 56038 of the Government Code is amended to read:

   56038.  "Executive officer" means the executive officer appointed
by a commission.
  SEC. 12.  Section 56038.5 is added to the Government Code, to read:

   56038.5.  "Feasible" means capable of being accomplished in a
successful manner within a reasonable period of time, taking into
account economic, legal, social, and technological factors.
  SEC. 13.  Section 56046 of the Government Code is amended to read:

   56046.  "Inhabited territory" means territory within which there
reside 12 or more registered voters.  The date  on which the number
of registered voters is determined  is the date of the adoption of a
resolution of application by the legislative body pursuant to Section
56654, if the legislative body has complied with subdivision (b) of
that section, or the date a petition or other resolution of
application is accepted for filing and a certificate of filing is
issued by the executive officer.  All other territory shall be deemed
"uninhabited."
  SEC. 14.  Section 56048 of the Government Code is amended to read:

   56048.  (a) Except as otherwise provided in subdivision (b) or
(c), "landowner" or "owner of land" means all of the following:
   (1) Any person shown as the owner of land on the most recent
assessment roll being prepared by the county at the time the
commission adopts a resolution of application except where that
person is no longer the owner.  Where that person is no longer the
owner, the landowner or owner of land is any person entitled to be
shown as owner of land on the next assessment roll.
   (2) Where land is subject to a recorded written agreement of sale,
any person  shown in the agreement as purchaser.
   (3) Any public agency owning land.
   (b) "Landowner" or "owner of land" does not include a public
agency which owns highways, rights-of-way, easements, waterways, or
canals.
   (c) For the purpose of mailed notice provided pursuant to Section
56157, "landowner" or "owner of land" means each person to whom land
is assessed, as shown upon the most recent assessment roll being
prepared by the county at the time the commission adopts a resolution
of application, at the address shown upon that assessment roll.
  SEC. 15.  Section 56064 of the Government Code is amended to read:

   56064.  "Prime agricultural land" means an area of land, whether a
single parcel or contiguous parcels, that has not been developed for
a use other than an agricultural use and that meets any of the
following qualifications:
   (a) Land that qualifies, if irrigated, for rating as class I or
class II in the USDA Natural Resources Conservation Service land use
capability classification, whether or not land is actually irrigated,
provided that irrigation is feasible.
   (b) Land that qualifies for rating 80 through 100 Storie Index
Rating.
   (c) Land that supports livestock used for the production of food
and fiber and that has an annual carrying capacity equivalent to at
least one animal unit per acre as defined by the United States
Department of Agriculture in the National Handbook on Range and
Related Grazing Lands, July, 1967, developed pursuant to Public Law
46, December 1935.
   (d) Land planted with fruit or nut-bearing trees, vines, bushes,
or crops that have a nonbearing period of less than five years and
that will return during the commercial bearing period on an annual
basis from the production of unprocessed agricultural plant
production not less than four hundred dollars ($400) per acre.
   (e) Land that has returned from the production of unprocessed
agricultural plant products an annual gross value of not less than
four hundred dollars ($400) per acre for three of the previous five
calendar years.
  SEC. 16.  Section 56067 of the Government Code is amended to read:

   56067.  "Proceeding," "proceeding for a change of organization,"
or "proceeding for a reorganization" means proceedings taken by the
commission for a proposed change of organization or reorganization
pursuant to Part 4 (commencing with Section 57000).
  SEC. 17.  Section 56068 of the Government Code is amended to read:

   56068.  "Proponent" means the person or persons who file a notice
of intention to circulate a petition with the executive officer.
  SEC. 18.  Section 56069 of the Government Code is amended to read:

   56069.  "Proposal" means a request or statement of intention made
by petition or by resolution of application of a legislative body or
of a school district proposing proceedings for the change of
organization or reorganization described in the request or statement
of intention.
  SEC. 19.  Section 56074 of the Government Code is amended to read:

   56074.  "Service" means a class established within, and as a part
of, a single function, as provided by regulations adopted by the
commission pursuant to Chapter 5 (commencing with Section 56820) of
Part 3.
  SEC. 21.  Section 56100 of the Government Code is amended to read:

   56100. Except as otherwise provided in paragraph (2) of
subdivision (b) of Section 56036, paragraph (2) of subdivision (c) of
Section 56036, and Section 56101, this division provides the sole
and exclusive authority and procedure for the initiation, conduct,
and completion of changes of organization and reorganization for
cities and districts.  All changes of organization and
reorganizations shall be initiated, conducted, and completed in
accordance with, and as provided in, this division.
   Notwithstanding any other provision of law, proceedings for the
formation of a district shall be conducted as authorized by the
principal act of the district proposed to be formed, except that the
commission shall serve as the conducting authority and the procedural
requirements of this division shall apply and shall prevail in the
event of conflict with the procedural requirements of the principal
act of the district.  In the event of such a conflict, the commission
shall specify the procedural requirements that apply, consistent
with the requirements of this section.
  SEC. 21.5.  Section 56100.1 is added to the Government Code, to
read:
   56100.1.  A commission may require, through the adoption of
written policies and procedures, the disclosure of contributions, as
defined in Section 82015, expenditures, as defined in Section 82025,
and independent expenditures, as defined in Section 82031, made in
support of or opposition to a proposal.  Disclosure shall be made
either to the commission's executive officer, in which case it shall
be posted on the commission's website, if applicable, or to the board
of supervisors of the county in which the commission is located,
which may designate a county officer to receive the disclosure.
Disclosure pursuant to a requirement under the authority provided in
this section shall be in addition to any disclosure required by Title
9 (commencing with Section 81000) or by local ordinance.
  SEC. 22.  Section 56101 of the Government Code is amended to read:

   56101.  This division does not apply to any proceeding for a
change of organization or reorganization for which the application
shall have been accepted for filing by the executive officer pursuant
to Section 56658 prior to January 1, 2001.  These pending
proceedings may be continued and completed under, and in accordance
with, the provisions of law under which the proceedings were
commenced.  The repeals, amendments, and additions made by the act
enacting this division shall not apply to any of those pending
proceedings, and, the laws existing prior to January 1, 2001, shall
continue in full force and effect, as applied to those pending
proceedings.
  SEC. 23.  Section 56106 of the Government Code is amended to read:

   56106.  Any provisions in this division governing the time within
which an official or the commission is to act shall in all instances,
except for notice requirements and the requirements of subdivision
(i) of Section 56658, be deemed directory, rather than mandatory.
  SEC. 24.  Section 56107 of the Government Code is amended to read:

   56107.  (a) This division shall be liberally construed to
effectuate its purposes.  No change of organization or reorganization
ordered under this division and no resolution adopted by the
commission making determinations upon a proposal shall be invalidated
because of any defect, error, irregularity, or omission in any act,
determination, or procedure which does not adversely and
substantially affect the rights of any person, city, county,
district, the state, or any agency or subdivision of the state.
   (b) All determinations made by a commission under, and pursuant
to, this division shall be final and conclusive in the absence of
fraud or prejudicial abuse of discretion.
   (c) In any action or proceeding to attack, review, set aside,
void, or annul a determination by a commission on grounds of
noncompliance with this division, any inquiry shall extend only to
whether there was fraud or a prejudicial abuse of discretion.
Prejudicial abuse of discretion is established if the court finds
that the determination or decision is not supported by substantial
evidence in light of the whole record.
  SEC. 25.  Section 56108 of the Government Code is repealed.
  SEC. 26.  Section 56109 of the Government Code is repealed.
  SEC. 27.  Section 56110 of the Government Code is repealed.
  SEC. 28.  Section 56111 of the Government Code is repealed.
  SEC. 29.  Section 56111.1 of the Government Code is repealed.
  SEC. 30.  Section 56111.5 of the Government Code is repealed.
  SEC. 31.  Section 56111.6 of the Government Code is repealed.
  SEC. 32.  Section 56111.7 of the Government Code is repealed.
  SEC. 33.  Section 56111.9 of the Government Code is repealed.
  SEC. 34.  Section 56111.10 of the Government Code is repealed.
  SEC. 35.  Section 56111.11 of the Government Code is repealed.
  SEC. 36.  Section 56111.12 of the Government Code is repealed.
  SEC. 37.  Section 56111.13 of the Government Code is repealed.
  SEC. 38.  Section 56111.14 of the Government Code is repealed.
  SEC. 39.  Section 56112 of the Government Code is repealed.
  SEC. 40.  Section 56113 of the Government Code is repealed.
  SEC. 41.  Section 56114 of the Government Code is repealed.
  SEC. 42.  Section 56122 of the Government Code is amended to read:

   56122.  Section 56886 and any term and condition provided by, or
made pursuant to, that section shall be enforceable by, between,
among, and against any public agency or agencies designated in the
term and condition, but shall not constitute, or be given effect as,
a limitation upon the power of any bondholder or other creditor to
enforce his or her rights, particularly any rights provided for by
Part 5 (commencing with Section 57300), as if Section 56886 had not
been enacted or the term and condition had not been made or provided
pursuant to that section.
  SEC. 43.  Section 56123 of the Government Code is amended to read:

   56123.  Except as otherwise provided in Section 56124, if a
proposed change of organization or a reorganization applies to two or
more affected counties, for the purpose of this division, exclusive
jurisdiction shall be vested in the commission of the principal
county.  Any notices, proceedings, orders, or any other acts
authorized or required to be given, taken, or made by the commission,
board of supervisors, clerk of a county, or any other county
official, shall be given, taken, or made by the persons holding those
offices in the principal county.  The commission of the principal
county shall provide notice to the chair, each board member, and the
executive officer of all affected agencies of any proceedings,
actions, or reports on the proposed change of organization or
reorganization.  Any officer of a county other than the principal
county shall cooperate with the commission of the principal county
and shall furnish the commission of the principal county with any
certificates, records, or certified copies of records as may be
necessary to enable the commission of the principal county to comply
with this division.
  SEC. 44.  Section 56124 of the Government Code is amended to read:

   56124.  If a proposed change of organization or a reorganization
applies to two or more affected counties, for purposes of this
division, exclusive jurisdiction may be vested in the commission of
an affected county other than the commission of the principal county
if all of the following occur:
   (a) The commission of the principal county approves of having
exclusive jurisdiction vested in another affected county.
   (b) The commission of the principal county designates the affected
county which shall assume exclusive jurisdiction.
   (c) The commission of the affected county so designated agrees to
assume exclusive jurisdiction.
   If exclusive jurisdiction is vested in the commission of an
affected county other than the principal county pursuant to this
section, any notices, proceedings, orders, or any other acts
authorized or required to be given, taken, or made by the commission,
board of supervisors, clerk of a county, or any other officer of a
county, shall be given, taken, or made by the persons holding those
offices in the affected county.  Any officer of a county other than
the affected county shall cooperate with the commission of the
affected county and shall furnish the commission of the affected
county with any certificates, records, or certified copies of records
as may be necessary to enable the commission of the affected county
to comply with this division.
  SEC. 45.  Section 56129 of the Government Code is amended to read:

   56129.  (a) If a public utility has been granted a certificate of
public convenience and necessity authorizing and requiring it to
furnish gas or electric service within a certain service area and, as
a result of a change of organization or a reorganization, territory
consisting of all, or any part, of that service area becomes a part
of, or is formed into, a district authorized by its principal act to
furnish gas or electric service, the district shall not furnish that
service within the territory except upon approval by both of the
following:
   (1) The commission after receipt and consideration of the report
of the Public Utilities Commission made as provided in Section 56131.

   (2) The voters within the territory, given at an election as
provided in Section 56130.
   (b) If both of those approvals are given, upon assumption of
service by the district the public utility may at any time thereafter
withdraw service within the territory, unless otherwise ordered by
the Public Utilities Commission.
   (c) "Gas or electric service," as used in this section and in
Sections 56130, 56131, and 56875, means the distribution and sale for
any purpose, other than for the purpose of resale, of gas or
electricity for light, heat, or power.
  SEC. 46.  Section 56132 of the Government Code is amended to read:

   56132.  (a) This section shall only apply to any change of
organization or reorganization that includes detachment of territory
from the Broadmoor Police Protection District in the County of San
Mateo and which includes or accommodates, or is intended to
facilitate, an annexation of territory to another local agency that
has initiated the change of organization or reorganization.  This
section does not, however, apply to any territory comprising real
property owned by the San Francisco Bay Area Rapid Transit District.

   If the commission adopts a resolution approving such a change of
organization or reorganization, the board of commissioners of the
district may, within 15 days thereafter, adopt a resolution finding
either that the proposed detachment may or will not adversely affect
the district's ability to efficiently provide its law enforcement
services in the remainder of the district.  The district shall, if it
adopts a resolution, file a certified copy of its resolution with
the local agency to which the affected territory is proposed to be
annexed and the commission.  If that resolution finds that the
proposed detachment may have an adverse financial
                       effect, then the reorganization shall not
become effective unless a majority of the voters voting at a special
election of the district called for that purpose approve the
detachment.  The Broadmoor Police Protection District shall pay the
costs of the election.  For purposes of this section, it shall be
conclusively presumed that any affected local agency which adopts a
resolution under Section 56654 requesting a detachment of contiguous
territory from the Broadmoor Police Protection District and which
could have concurrently requested annexation of the affected
territory, intends to do so.
   (b) The Legislature finds and declares that a special law is
necessary and that a general law cannot be made applicable within the
meaning of Section 16 of Article IV of the California Constitution
because of the following special circumstances:
   The Broadmoor Police Protection District consists primarily of
suburban residential properties which have long enjoyed an urban
level of police services.  The threat of continued piecemeal
detachments of territory from the district threatens its ability to
continue providing that level of service on an economically efficient
basis.
   (c) This section shall remain in effect only until January 1,
2002, and as of that date is repealed, unless a later enacted
statute, that is enacted prior to January 1, 2002, deletes or extends
that date.
  SEC. 47.  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
boundaries only if it first requests and receives written approval
from the commission in the affected county.
   (b) The commission may authorize a city or district to provide new
or extended services outside its jurisdictional boundaries but
within its sphere of influence in anticipation of a later change of
organization.
   (c) The commission may authorize a city or district to provide new
or extended services outside its jurisdictional boundaries and
outside its sphere of influence to respond to an existing or
impending threat to the public health or safety of the residents of
the affected territory if both of the following requirements are met:

   (1) The entity applying for the contract 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, or sewer system corporation as defined in
Section 230.6 of the Public Utilities Code, that has filed a map and
a statement of its service capabilities with the commission.
   (d) The executive officer, within 30 days of receipt of a request
for approval by a city or district of a contract 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 those requests to the executive officer.  The
commission or executive officer shall approve, disapprove, or approve
with conditions the contract for extended services.  If the contract
is disapproved or approved with conditions, the applicant may
request reconsideration, citing the reasons for reconsideration.
   (e) This section does not apply to contracts or agreements solely
involving 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.  This
section does not apply to contracts for the transfer of nonpotable
or nontreated water.  This section does not apply to contracts or
agreements solely involving 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.  This section does not apply to an
extended service that a city or district was providing on January 1,
1994.  This section does not apply to 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 boundaries.
  SEC. 48.  Section 56150 of the Government Code is amended to read:

   56150.  Unless the provision or context otherwise requires,
whenever this division requires notice to be published, posted, or
mailed, the notice shall be published, posted, or mailed as provided
in this chapter.  Unless the provision or context otherwise requires,
whenever this division requires notice to be given that notice shall
also be given in electronic format on a website provided by the
commission, to the extent that the commission maintains a website.
  SEC. 50.  Section 56154 of the Government Code is amended to read:

   56154.  If the published notice is a notice of a hearing,
publication of the notice shall be commenced at least 21 days prior
to the date specified in the notice for the hearing.
  SEC. 51.  Section 56156 of the Government Code is amended to read:

   56156.  If the mailed notice is notice of a hearing, the notice
shall be mailed at least 21 days prior to the date specified in the
notice for hearing.
  SEC. 52.  Section 56157 of the Government Code is amended to read:

   56157.  When mailed notice is required to be given to:
   (a) A county, city, or district, it shall be addressed to the
clerk of the county, city, or district.
   (b) A commission, it shall be addressed to the executive officer.

   (c) Proponents, it shall be addressed to the persons so designated
in the petition at the address specified in the petition.
   (d) Landowners, it shall be addressed to each person to whom land
is assessed, as shown upon the most recent assessment roll being
prepared by the county at the time the commission adopts a resolution
of application, at the address shown upon the assessment roll.
   (e) Persons requesting special notice, it shall be addressed to
each person who has filed a written request for special notice with
the executive officer or clerk at the mailing address specified in
the request.
   (f) To all registered voters and owners of property, to the
address as shown on the most recent assessment roll being prepared by
the county at the time a resolution of application is adopted to
initiate proceedings within 300 feet of the exterior boundary of the
property that is the subject of the hearing at least 21 days prior to
the hearing.  This requirement may be waived if proof satisfactory
to the commission is presented that shows that individual notices to
registered voters and landowners have already been provided by the
initiating agency.  Notice shall also either be posted or published
in one newspaper 21 days prior to the hearing.  If this section would
require more than 1,000 notices to be mailed, then notice may
instead be provided pursuant to paragraph (1) of subdivision (b) of
Section 65954.6.
  SEC. 53.  Section 56159 of the Government Code is amended to read:

   56159.  Posted notice shall remain posted for not less than five
days.  If the posted notice is notice of a hearing, posting shall be
commenced at least 21 days prior to the date specified in the notice
for hearing and shall continue to the time of the hearing.
  SEC. 54.  Section 56300 of the Government Code is amended to read:

   56300.  (a) It is the intent of the Legislature that each
commission, not later than January 1, 2002, shall establish written
policies and procedures and exercise its powers pursuant to this part
in a manner consistent with those policies and procedures and that
encourages and provides planned, well-ordered, efficient urban
development patterns with appropriate consideration of preserving
open-space lands within those patterns.
   (b) Each commission with a proposal pending on January 1, 2001,
shall, by March 31, 2001, hold a public hearing to discuss the
adoption of policies and procedures to require the disclosure of
contributions, expenditures, and independent expenditures authorized
by Section 56100.1.  Reporting requirements adopted pursuant to this
section shall be effective upon the date of adoption or a later date
specified in the resolution.  Any commission that does not have a
proposal pending on January 1, 2001, shall hold a public hearing to
discuss the adoption of those policies and procedures within 90 days
of submission of a proposal or at any time prior to submission of a
proposal.  Once a hearing has taken place under this subdivision, no
subsequent hearing shall be required except by petition of 100 or
more registered voters residing in the county in which the commission
is located.
   (c) A commission may require, through the adoption of written
policies and procedures, lobbying disclosure and reporting
requirements for persons who attempt to influence pending decisions
by commission members, staff, or consultants.  Disclosure shall be
made either to the commission's executive officer, in which case it
shall be posted on the commission website, if applicable, or to the
recorder, registrar of voters, or clerk of the board of supervisors
of the county in which the commission is located.  Each commission
that on January 1, 2001, has a pending proposal, as defined in
Section 56069 shall, by March 31, 2001, hold a public hearing to
discuss the adoption of policies and procedures governing lobbying
disclosure authorized by this subdivision.  Reporting requirements
adopted pursuant to this section shall be effective upon the date of
adoption or on a later date specified in the resolution.  Any
commission that does not have a proposal pending on January 1, 2001,
shall hold a public hearing to discuss the adoption of those policies
and procedures within 90 days of submission of a proposal, or at any
time prior to submission of a proposal.
   (d) Any public hearings required by this section may be held
concurrently.
   (e) The written policies and procedures adopted by the commission
shall include forms to be used for various submittals to the
commission including at a minimum a form for any protests to be filed
with the commission concerning any proposed organization change.
   (f) (1) On or before January 1, 2002, the commission shall
establish and maintain, or otherwise provide access to notices and
other commission information for the public through an Internet
website.
   (2) The written policies and procedures adopted by the commission
shall require that, to the extent that the commission maintains an
Internet website, notice of all public hearings and commission
meetings shall be made available in electronic format on that site.

  SEC. 55.  Section 56301 of the Government Code is amended to read:

   56301.  Among the purposes of a commission are discouraging urban
sprawl, preserving open-space and prime agricultural lands,
efficiently providing government services, and encouraging the
orderly formation and development of local agencies based upon local
conditions and circumstances.  One of the objects of the commission
is to make studies and to obtain and furnish information which will
contribute to the logical and reasonable development of local
agencies in each county and to shape the development of local
agencies so as to advantageously provide for the present and future
needs of each county and its communities.  When the formation of a
new government entity is proposed, a commission shall make a
determination as to whether existing agencies can feasibly provide
the needed service or services in a more efficient and accountable
manner.  If a new single-purpose agency is deemed necessary, the
commission shall consider reorganization with other single-purpose
agencies that provide related services.
  SEC. 56.  Section 56325 of the Government Code is amended to read:

   56325.  There is hereby continued in existence in each county a
local agency formation commission.  Except as otherwise provided in
this chapter, the commission shall consist of members selected as
follows:
   (a) Two appointed by the board of supervisors from their own
membership.  The board of supervisors shall appoint a third
supervisor who shall be an alternate member of the commission.  The
alternate member may serve and vote in place of any supervisor on the
commission who is absent or who disqualifies himself or herself from
participating in a meeting of the commission.
   If the office of a regular county member becomes vacant, the
alternate member may serve and vote in place of the former regular
county member until the appointment and qualification of a regular
county member to fill the vacancy.
   (b) Two selected by the cities in the county, each of whom shall
be a mayor or council member, appointed by the city selection
committee.  The city selection committee  shall also designate one
alternate member who shall be appointed and serve pursuant to Section
56335.  The alternate shall also be a mayor or council member.  The
city selection committee is encouraged to select members to fairly
represent the diversity of the cities in the county, with respect to
population and geography.
   (c) Two presiding officers or members of legislative bodies of
independent special districts selected by the independent special
district selection committee pursuant to Section 56332.  The
independent special district selection committee shall also designate
a presiding officer or member of the legislative body of an
independent special district as an alternative member who shall be
appointed and serve pursuant to Section 56332.  The independent
special district selection committee is encouraged to make selections
that fairly represent the diversity of the independent special
districts in the county, with respect to population and geography.
   (d) One representing the general public appointed by the other
members of the commission.  The other members of the commission may
also designate one alternate member who shall be appointed and serve
pursuant to Section 56331.  Selection of the public member and
alternate public member shall be subject to the affirmative vote of
at least one of the members selected by each of the other appointing
authorities.
  SEC. 57.  Section 56325.1 is added to the Government Code, to read:

   56325.1.  While serving on the commission, all commission members
shall exercise their independent judgment on behalf of the interests
of residents, property owners, and the public as a whole in
furthering the purposes of this division.  Any member appointed on
behalf of local governments shall represent the interests of the
public as a whole and not solely the interests of the appointing
authority.  This section does not require the abstention of any
member on any matter, nor does it create a right of action in any
person.
  SEC. 58.  Section 56326 of the Government Code is amended to read:

   56326.  In Los Angeles County, the commission shall consist of
nine members, selected as follows:
   (a) Two appointed by the board of supervisors from its own
membership.  The board of supervisors shall also appoint a third
supervisor who shall be an alternate member of the commission.  The
alternate member may serve and vote in place of any supervisor on the
commission who is absent or who disqualifies himself or herself from
participating in a meeting of the commission.
   If the office of the regular county member becomes vacant, the
alternate member may serve and vote in place of the former regular
county member until the appointment and qualification of a regular
county member to fill the vacancy.
   (b) One appointed by the board of supervisors, who shall not be a
member of the board of supervisors but who shall be a resident of the
San Fernando Valley Statistical Area, as defined in subdivision (c)
of Section 11093.  The board of supervisors shall also appoint an
alternate member who shall not be a member of the board of
supervisors but who is a resident of the San Fernando Valley
Statistical Area.  The alternate member may serve and vote in place
of the member appointed pursuant to this subdivision if that member
is absent or disqualifies himself or herself from participating in a
meeting of the commission.
   If the office of the regular member becomes vacant, the alternate
member may serve and vote in place of the former regular member until
the appointment and qualification of a regular member to fill the
vacancy.
   (c) Two selected by the cities in the county, each of whom shall
be a mayor or council member, appointed by the city selection
committee.  The city selection committee shall also designate one
alternate member who shall be appointed and serve pursuant to Section
56335.  The alternate shall also be a mayor or council member.  The
city selection committee is encouraged to select members to fairly
represent the diversity of the cities in the county, with respect to
population and geography.
   (d) One selected by a city in the county having a population in
excess of 30  percent of the total population of the county who is a
member of the legislative body of the city, appointed by the
presiding officer of the legislative body.  The presiding officer of
the legislative body shall also designate an alternate member who is
a member of the legislative body.  The alternate member may serve and
vote in place of the member appointed pursuant to this subdivision
if the member is absent or disqualifies himself or herself from
participating in a meeting of the commission.
   If the office of the regular member becomes vacant, the alternate
member may serve and vote in place of the former regular member until
the appointment and qualification of a regular member to fill the
vacancy.
   (e) Two presiding officers or members of legislative bodies of
independent special districts selected by an independent special
district selection committee pursuant to Section 56332.  The
independent special district selection committee shall also designate
one alternate member who shall be a presiding officer or member of
the legislative body of an independent special district and shall be
appointed and serve pursuant to Section 56332.  The independent
special district selection committee is encouraged to select members
to fairly represent the diversity of the independent special
districts in the county, with respect to population and geography.
   (f) One representing the general public appointed by the other
members of the commission.
  SEC. 59.  Section 56326.5 of the Government Code is amended to
read:
   56326.5.  In Sacramento County, the commission shall consist of
seven members, selected as follows:
   (a) Two appointed by the board of supervisors from their own
membership.  The board of supervisors shall appoint a third
supervisor who shall serve as an alternate member of the commission.
The alternate member may serve and vote in place of any supervisor
on the commission who is absent or who disqualifies himself or
herself from participating in a meeting of the commission.  If the
office of the regular county member becomes vacant, the alternate
member may serve and vote in place of the former regular county
member until the appointment and qualification of a regular county
member to fill the vacancy.
   (b) One selected by the City of Sacramento who is a member of the
city council, appointed by the mayor and confirmed by the city
council.  The mayor shall also appoint, subject to confirmation by
the council, an alternate member who is a member of the city council.
  The alternate member may serve and vote in place of the regular
city member if the city member is absent or disqualifies himself or
herself from participating in a meeting of the commission.  If the
office of the regular city member becomes vacant, the alternate
member may serve and vote in place of the former regular city member
until the appointment and qualification of a regular city member to
fill the vacancy.
   (c) One selected by the cities in the county, who is a mayor or
council member appointed by the city selection committee.  The city
selection committee shall also designate one alternate member who
shall be appointed and serve pursuant to Section 56335.  The
alternate shall also be a mayor or council member.  The city
selection committee is encouraged to select members to fairly
represent the diversity of the cities in the county, with respect to
population and geography.
   (d) Two presiding officers or members of legislative bodies of
independent special districts selected by an independent special
district selection committee pursuant to Section 56332.  The
independent special district selection committee shall also designate
one alternate member who shall be a presiding officer or member of
the legislative body of an independent special district and shall be
appointed and serve pursuant to Section 56332.  The independent
special district selection committee is encouraged to select members
to fairly represent the diversity of the independent special
districts in the county, with respect to population and geography.
   (e) One representing the general public, appointed by the other
six members of the commission.  The commission may also appoint an
alternate public member who may serve and vote in the place of the
regular public member if the regular public member is absent or
disqualifies himself or herself from participating in a meeting of
the commission.  If the office of the regular public member becomes
vacant, the alternate member may serve and vote in place of the
former regular public member until the appointment and qualification
of a regular public member to fill the vacancy.
  SEC. 60.  Section 56327 of the Government Code is amended to read:

   56327.  In Santa Clara County, the commission shall consist of
five members, selected as follows:
   (a) Two appointed by the board of supervisors from their own
membership.  The board of supervisors shall appoint a third
supervisor who shall serve as an alternate member of the commission.
The alternate member may serve and vote in place of any supervisor
on the commission who is absent or who disqualifies himself or
herself from participating in a meeting of the commission.  If the
office of the regular county member becomes vacant, the alternate
member may serve and vote in place of the former regular county
member until the appointment and qualification of a regular county
member to fill the vacancy.
   (b) One selected by the city in the county having the largest
population, who is a member of the legislative body of the city,
appointed by the city council.  The city council shall  also appoint
an alternate member who is a member of the legislative body of the
city.  The alternate member may serve and vote in place of the
regular city member if the city member is absent or disqualifies
himself or herself from participating in a meeting of the commission.
  If the office of the regular city member becomes vacant, the
alternate member may serve and vote in place of the former regular
city member until the appointment and qualification of a regular city
member to fill the vacancy.
   (c) One selected by the cities in the county, who is a mayor or
council member appointed by the city selection committee.  The city
selection committee shall also designate one alternate member who
shall be appointed and serve pursuant to Section 56335.  The
alternate shall also be a mayor or council member.  The city
selection committee is encouraged to select members to fairly
represent the diversity of the cities in the county, with respect to
population and geography.
   (d) One representing the general public, appointed by the other
four members of the commission.  This member shall not be a resident
of a city which is already represented on the commission.  The
commission may also appoint an alternate public member, who shall not
be a resident of a city represented on the commission, and who may
serve and vote in the place of the regular public member if the
regular public member is absent or disqualifies himself or herself
from participating in a meeting of the commission.  If the office of
the regular public member becomes vacant, the alternate member may
serve and vote in place of the former regular public member until the
appointment and qualification of a regular public member to fill the
vacancy.
  SEC. 60.5.  Section 56327.3 is added to the Government Code, to
read:
   56327.3.  In Santa Clara County, the commission shall be enlarged
by two members if, pursuant to the provisions of Chapter 5
(commencing with Section 56820), the commission orders representation
of special districts upon the commission.
  SEC. 61.  Section 56328 of the Government Code is amended to read:

   56328.  (a) In San Diego County, the commission, which consists of
seven members, augmented pursuant to Section 56332, shall be
additionally augmented by the appointment of an eighth member and
that member shall, notwithstanding subdivision (b) of Section 56325,
be a member of the legislative body of the city in the county having
the largest population, appointed by the legislative body of that
city.
   (b) The legislative body of the city shall appoint an alternate
member at the same time and in the same manner as it appoints the
regular member appointed pursuant to subdivision (a).  If the regular
city member is absent from a commission meeting, or disqualifies
himself or herself from participating in a meeting, the alternate
member may serve and vote in place of the regular city member for
that meeting.  If the office of the regular city member becomes
vacant, the                                            alternate
member may serve and vote in place of the former regular city member
until the appointment and qualification of a regular city member to
fill the vacancy.
  SEC. 62.  Section 56329 of the Government Code is amended to read:

   56329.  If there is no city in the county, the commission shall
consist of five members, selected as follows which may be further
augmented pursuant to Sections 56332 and 56332.5:
   (a) Three appointed by the board of supervisors from their own
membership.  The board of supervisors shall appoint a fourth
supervisor who is an alternate member of the commission.  The
alternate member may serve and vote in place of any supervisor on the
commission who is absent or who disqualifies himself or herself from
participating in a meeting of the commission.
   If the office of a regular county member becomes vacant, the
alternate member may serve and vote in place of the former regular
county member until the appointment and qualification of a regular
county member to fill the vacancy.
   (b) Two representing the general public appointed by the other
three members of the commission.  Selection of the public member and
alternate public member shall be subject to the affirmative vote of
at least one of the members selected by each of the other appointing
authorities.
  SEC. 63.  Section 56330 of the Government Code is repealed.
  SEC. 64.  Section 56332 of the Government Code is amended to read:

   56332.  (a) The independent special district selection committee
shall consist of the presiding officer of the legislative body of
each independent special district.  However, if the presiding officer
of an independent special district is unable to attend a meeting of
the independent special district selection committee, the legislative
body of the district may appoint one of its members to attend the
meeting of the selection committee in the presiding officer's place.
Those districts shall include districts located wholly within the
county and those containing territory within the county representing
50 percent or more of the assessed value of taxable property of the
district, as shown on the last equalized county assessment roll.
Each member of the committee shall be entitled to one vote for each
independent special district of which he or she is the presiding
officer.  Members representing a majority of the eligible districts
shall constitute a quorum.
   (b) The executive officer shall call and give written notice of
all meetings of the members of the selection committee.  A meeting
shall be called and held under either of the following circumstances:

   (1) Whenever a vacancy exists among the members or alternate
members representing independent special districts upon the
commission.
   (2) Upon receipt of a written request by one or more members of
the selection committee representing districts having 10 percent or
more of the assessed value of taxable property within the county, as
shown on the last equalized county assessment roll.
   (c) (1) If the executive officer determines that a meeting of the
special district selection committee, for the purpose of selecting
the special district representatives or for filling a vacancy, is not
feasible, the executive officer may conduct the business of the
committee in writing, as provided in this subdivision.  The executive
officer may call for nominations to be submitted in writing within
30 days.  At the end of the nominating period, the executive officer
shall prepare and deliver, or send by certified mail, to each
independent special district one ballot and voting instructions.
   (2) As an alternative to the delivery or certified mail, the
executive officer, with the prior concurrence of the district, may
transmit the ballot and voting instructions by electronic mail,
provided that the executive officer shall retain written evidence of
the receipt of that material.
   (3) The ballot shall include the names of all nominees and the
office for which each was nominated.  The districts shall return the
ballots to the executive officer by the date specified in the voting
instructions, which date shall be at least 30 days from the date on
which the executive officer mailed the ballots to the districts.
   (4) If the executive officer has transmitted the ballot and voting
instructions by electronic mail, the districts may return the
ballots to the executive officer by electronic mail, provided that
the executive officer retains written evidence of the receipt of the
ballot.
   (5) Any ballot received by the executive officer after the
specified date is invalid.  The executive officer shall announce the
results of the election within seven days of the specified date.
   (d) The selection committee shall appoint two regular members and
one alternate member to the commission.  The members so appointed
shall be elected or appointed special district officers residing
within the county but shall not be members of the legislative body of
a city or county.  If one of the regular district members is absent
from a commission meeting or disqualifies himself or herself from
participating in a meeting, the alternate district member may serve
and vote in place of the regular district member for that meeting.
The representation by a regular district member who is a special
district officer shall not disqualify, or be cause for
disqualification of, the member from acting on a proposal affecting
the special district.  The special district selection committee may,
at the time it appoints a member or alternate, provide that the
member or alternate is disqualified from voting on proposals
affecting the district of which the member is a representative.
   (e) If the office of a regular district member becomes vacant, the
alternate member may serve and vote in place of the former regular
district member until the appointment and qualification of a regular
district member to fill the vacancy.
  SEC. 65.  Section 56332.5 is added to the Government Code, to read:

   56332.5.  If the commission does not have representation from
independent special districts on January 1, 2001, the commission
shall initiate proceedings for representation of independent special
districts upon the commission if requested by independent special
districts pursuant to this section.  If an independent special
district adopts a resolution proposing representation of independent
special districts upon the commission, it shall immediately forward a
copy of the resolution to the executive officer.  Upon receipt of
those resolutions from a majority of independent special districts
within a county, adopted by the districts within one year from the
date that the first resolution was adopted, the commission, at its
next regular meeting, shall adopt a resolution of intention.  The
resolution of intention shall state whether the proceedings are
initiated by the commission or by an independent special district or
districts, in which case, the names of those districts shall be set
forth.  The commission shall order the executive officer to call and
give notice of a meeting of the independent special district
selection committee to be held within 15 days after the adoption of
the resolution in order to select independent special district
representation on the commission pursuant to Section 56332.
  SEC. 66.  Section 56334 of the Government Code is amended to read:

   56334.  The term of office of each member shall be four years and
until the appointment and qualification of his or her successor.
Upon enlargement of the commission by two members, as provided in
Section 56332, the new members first appointed to represent
independent special districts shall classify themselves by lot so
that the expiration date of the term of office of one new member
coincides with the existing member who holds the office represented
by the original two-year term on the commission and of the other new
member coincides with the existing member who holds the office
represented by the original four-year term on the commission.  The
body which originally appointed a member whose term has expired shall
appoint his or her successor for a full term of four years.  Any
member may be removed at any time and without cause by the body
appointing that member.  The expiration date of the term of office of
each member shall be the first Monday in May in the year in which
the term of the member expires, unless procedures adopted by the
commission specify an alternate date to apply uniformly to all
members.  However, the length of a term of office shall not be
extended more than once.  Any vacancy in the membership of the
commission shall be filled for the unexpired term by appointment by
the body which originally appointed the member whose office has
become vacant.
   The chairperson of the commission shall be selected by the members
of the commission.
   Commission members and alternates shall be reimbursed for the
actual amount of their reasonable and necessary expenses incurred in
attending meetings and in performing the duties of their office.  The
board of supervisors may authorize payment of a per diem to
commission members and alternates for each day while they are in
attendance at meetings of the commission.
  SEC. 67.  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) To review and approve or disapprove with or without amendment,
wholly, partially, or conditionally, proposals for changes of
organization or reorganization, consistent with written policies,
procedures, and guidelines adopted by the commission.  The commission
may initiate proposals for (1) consolidation of districts, as
defined in Section 56036, (2) dissolution, (3) merger, or (4)
establishment of a subsidiary district, or a reorganization that
includes any of these changes of organization.  A commission shall
have the authority to initiate only a (1) consolidation of districts,
(2) dissolution, (3) merger, (4) establishment of a subsidiary
district, or (5) a reorganization that includes any of these changes
of organization, if that change of organization or reorganization is
consistent with a recommendation or conclusion of a study prepared
pursuant to Section 56378 or 56425.  However, a commission shall not
have the power to disapprove an annexation to a city, initiated by
resolution, of contiguous territory that the commission finds is any
of the following:
   (1) 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.
   (2) 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.
   (3) An annexation or reorganization of unincorporated islands
meeting the requirements of Section 56375.3.
   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.
   A commission shall not impose any conditions that would directly
regulate land use density or intensity, property development, or
subdivision requirements.  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.  However, the
commission shall not specify how, or in what manner, the territory
shall be prezoned.  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.
   (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.  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.
   (g) To adopt written procedures for the evaluation of proposals.
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 25210.90 or 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.
  SEC. 68.  Section 56375.1 of the Government Code is repealed.
  SEC. 68.5.  Section 56375.3 is added to the Government Code, to
read:
   56375.3.  (a) In addition to those powers enumerated in Section
56375, a commission may approve the annexation to a city after notice
and hearing, and order annexation of the territory without an
election, or waive the protest hearing proceedings pursuant to Part
4, commencing with Section 57000, if the annexation meets the
requirements of this subdivision and is proposed by resolution
adopted by the affected city, if the commission finds that the
territory contained in an annexation proposal meets all of the
following requirements:
   (1) It does not exceed 75 acres in area, that area constitutes the
entire island, and that island does not constitute a part of an
unincorporated area that is more than 100 acres in area.
   (2) The territory constitutes an entire unincorporated island
located within the limits of a city, or constitutes a reorganization
containing a number of individual unincorporated islands.
   (3) It is surrounded in either of the following ways:
   (A) Surrounded, or substantially surrounded, by the city to which
annexation is proposed or by the city and a county boundary or the
Pacific Ocean.
   (B) Surrounded by the city to which annexation is proposed and
adjacent cities.
   (C) This subdivision shall not be construed to apply to any
unincorporated island within a city that is a gated community where
services are currently provided by a community services district.
   (D) Notwithstanding any other provision of law, at the option of
either the city or the county, a separate property tax transfer
agreement may be agreed to between a city and a county pursuant to
Section 99 of the Revenue and Taxation Code regarding an annexation
subject to this subdivision without affecting any existing master tax
sharing agreement between the city and county.
   (4) It is substantially developed or developing.  The finding
required by this subparagraph shall be based upon one or more
factors, including, but not limited to, any of the following factors:

   (A) The availability of public utility services.
   (B) The presence of public improvements.
   (C) The presence of physical improvements upon the parcel or
parcels within the area.
   (5) It is not prime agricultural land, as defined by Section
56064.
   (6) It will benefit from the annexation or is receiving benefits
from the annexing city.
   (b) Notwithstanding any other provision of this subdivision, this
subdivision shall not apply to all or any part of that portion of the
development project area referenced in subdivision (e) of Section
33492.41 of the Health and Safety Code that as of January 1, 2000,
meets all of the following requirements:
   (1) Is unincorporated territory.
   (2) Contains at least 100 acres.
   (3) Is surrounded or substantially surrounded by incorporated
territory.
   (4) Contains at least 100 acres zoned for commercial or industrial
uses or is designated on the applicable county general plan for
commercial or industrial uses.
  SEC. 69.  Section 56375.4 of the Government Code is repealed.
  SEC. 69.5.  Section 56375.5 of the Government Code is amended to
read:
   56375.5.  Every determination made by a commission regarding the
matters provided for by subdivisions (a), (m), and (n) of Section
56375 shall be consistent with the spheres of influence of the local
agencies affected by those determinations.
  SEC. 70.  Section 56375.45 of the Government Code is repealed.
  SEC. 71.  Section 56377 of the Government Code is amended to read:

   56377.  In reviewing and approving or disapproving proposals which
could reasonably be expected to induce, facilitate, or lead to the
conversion of existing open-space lands to uses other than open-space
uses, the commission shall consider all of the following policies
and priorities:
   (a) Development or use of land for other than open-space uses
shall be guided away from existing prime agricultural lands in
open-space use toward areas containing nonprime agricultural lands,
unless that action would not promote the planned, orderly, efficient
development of an area.
   (b) Development of existing vacant or nonprime agricultural lands
for urban uses within the existing jurisdiction of a local agency or
within the sphere of influence of a local agency should be encouraged
before any proposal is approved which would allow for or lead to the
development of existing open-space lands for non-open-space uses
which are outside of the existing jurisdiction of the local agency or
outside of the existing sphere of influence of the local agency.
  SEC. 72.  Section 56380 of the Government Code is repealed.
  SEC. 73.  Section 56380 is added to the Government Code, to read:
   56380.  The commission shall make its own provision for necessary
quarters, equipment, and supplies as well as personnel.  The
commission may choose to contract with any public agency or private
party for personnel and facilities.
  SEC. 74.  Section 56381 of the Government Code is repealed.
  SEC. 75.  Section 56381 is added to the Government Code, to read:
   56381.  (a) The commission shall adopt annually, following noticed
public hearings, a proposed budget by May 1 and final budget by June
15.  At a minimum, the proposed and final budget shall be equal to
the budget adopted for the previous fiscal year unless the commission
finds that reduced staffing or program costs will nevertheless allow
the commission to fulfill the purposes and programs of this chapter.
  The commission shall transmit its proposed and final budgets to the
board of supervisors; to each city; to the clerk and chair of the
city selection committee, if any, established in each county pursuant
to Article 11 (commencing with Section 50270) of Chapter 1 of Part 1
of Division 1; to each independent special district; and to the
clerk and chair of the independent special district selection
committee, if any, established pursuant to Section 56332.
   (b) After public hearings, consideration of comments, and adoption
of a final budget by the commission pursuant to subdivision (a), the
auditor shall apportion the net operating expenses of a commission
in the following manner:
   (1) In counties in which there is city and independent special
district representation on the commission, the county, cities, and
independent special districts shall each provide a one-third share of
the commission's operational costs.  The cities' share shall be
apportioned in proportion to each city's total revenues, as reported
in the most recent edition of the Cities Annual Report published by
the Controller, as a percentage of the combined city revenues within
a county, or by an alternative method approved by a majority of
cities representing the majority of the combined cities' populations.
  The independent special districts' share shall be apportioned in a
similar manner according to each district's revenues for general
purpose transactions, as reported in the most recent edition of the
"Financial Transactions Concerning Special Districts" published by
the Controller, or by an alternative method approved by a majority of
the agencies, representing a majority of their combined populations.
  For the purposes of fulfilling the requirement of this section, a
multicounty independent special district shall be required to pay its
apportionment in its principal county.  It is the intent of the
Legislature that no single district or class or type of district
shall bear a disproportionate amount of the district share of costs.

   (2) In counties in which there is no independent special district
representation on the commission, the county and its cities shall
each provide a one-half share of the commission's operational costs.
The cities' share shall be apportioned in the manner described in
paragraph (1).
   (3) In counties in which there are no cities, the county and its
special districts shall each provide a one-half share of the
commission's operational costs.  The independent special districts'
share shall be apportioned in the manner described for cities'
apportionment in paragraph (1).  If there is no independent special
district representation on the commission, the county shall pay all
of the commission's operational costs.
   (4) Instead of determining apportionment pursuant to paragraph
(1), (2), or (3), any alternative method of apportionment of the net
operating expenses of the commission may be used if approved by a
majority vote of each of the following:  the board of supervisors; a
majority of the cities representing a majority of the total
population of cities in the county; and the independent special
districts representing a majority of the combined total population of
independent special districts in the county.
   (c) After apportioning the costs as required in subdivision (b),
the auditor shall request payment from the board of supervisors and
from each city and each independent special district no later than
July 1 of each year for the amount that entity owes and the actual
administrative costs incurred by the auditor in apportioning costs
and requesting payment from each entity.  If the county, a city, or
an independent special district does not remit its required payment
within 60 days, the commission may determine an appropriate method of
collecting the required payment, including a request to the auditor
to collect an equivalent amount from the property tax, or any fee or
eligible revenue owed to the county, city, or district.  The auditor
shall provide written notice to the county, city, or district prior
to appropriating a share of the property tax or other revenue to
                                                the commission for
the payment due the commission pursuant to this section.  Any
expenses incurred by the commission or the auditor in collecting late
payments or successfully challenging nonpayment shall be added to
the payment owed to the commission.  Between the beginning of the
fiscal year and the time the auditor receives payment from each
affected city and district, the board of supervisors shall transmit
funds to the commission sufficient to cover the first two months of
the commission's operating expenses as specified by the commission.
When the city and district payments are received by the commission,
the county's portion of the commission's annual operating expenses
shall be credited with funds already received from the county.  If,
at the end of the fiscal year, the commission has funds in excess of
what it needs, the commission may retain those funds and calculate
them into the following fiscal year's budget.  If, during the fiscal
year, the commission is without adequate funds to operate, the board
of supervisors may loan the commission funds and recover those funds
in the commission's budget for the following fiscal year.
  SEC. 75.5.  Section 56381.6 is added to the Government Code, to
read:
   56381.6.  (a) Notwithstanding the provisions of Section 56381, for
counties whose membership on the commission is established pursuant
to Sections 56326, 56326.5, 56327, or 56328, the commission's annual
operational costs shall be apportioned among the classes of public
agencies that select members on the commission in proportion to the
number of members selected by each class.  The classes of public
agencies that may be represented on the commission are the county,
the cities, and independent special districts.  Any alternative cost
apportionment procedure may be adopted by the commission, subject to
a majority affirmative vote of the commission that includes the
affirmative vote of at least one of the members selected by the
county, one of the members selected by a city, and one of the members
selected by a special district, if special districts are represented
on the commission.
   (b) Allocation of costs among individual cities and independent
special districts and remittance of payments shall be in accordance
with the procedures of Section 56381.  Notwithstanding Section 56381,
any city that has permanent membership on the commission pursuant to
Sections 56326, 56326.5, 56327, or 56328 shall be apportioned the
same percentage of the commission's annual operational costs as its
permanent member bears to the total membership of the commission,
excluding any public members selected by all the members.  The
balance of the cities' portion of the commission's annual operational
costs shall be apportioned to the remaining cities in the county in
accordance with the procedures of Section 56381.
  SEC. 76.  Section 56383 of the Government Code is amended to read:

   56383.  (a) The commission may establish a schedule of fees for
the costs of proceedings taken pursuant to this division, including,
but not limited to, all of the following:
   (1) Filing and processing applications filed with the commission.

   (2) Proceedings undertaken by the commission and any
reorganization committee.
   (3) Amending a sphere of influence.
   (4) Reconsidering a resolution making determinations.
   (b) The schedule of fees shall not exceed the estimated reasonable
cost of providing the service for which the fee is charged and shall
be imposed pursuant to  Section 66016.
   (c) The commission may require that a fee be deposited with the
executive officer before any further action is taken.  The deposit of
the fee shall be made within the time period specified by the
commission.  No petition shall be deemed filed until the fee has been
deposited.
   (d) The commission may waive a fee if it finds that payment would
be detrimental to the public interest.
   (e) The signatures on a petition submitted to the commission shall
be verified by the elections official  of the county and the costs
of verification shall be provided for in the same manner and by the
same agencies which bear the costs of verifying signatures for an
initiative petition in the same county.
   (f) Waiver of fees is limited to those costs incurred by the
commission in the processing of a proposal.
   (g) For incorporation proceedings that have been initiated by the
filing of a sufficient number of voter signatures on petitions that
have been verified by the county registrar of voters, the commission
may, upon the receipt of a certification by the proponents that they
are unable to raise sufficient funds to reimburse fees for the
proceedings, take no action on the proposal and request a loan from
the General Fund of an amount sufficient to cover those expenses
subject to availability of an appropriation for those purposes and in
accordance with any provisions of the appropriation.  Repayment of
the loan shall be made a condition of approval of the incorporation,
if successful, and shall become an obligation of the newly formed
city.  Repayment shall be made within two years of the effective date
of incorporation.  If the proposal is denied by the commission or
defeated at an election, the loan shall be forgiven.
  SEC. 77.  Section 56384 of the Government Code is amended to read:

   56384.  (a) The commission shall appoint an executive officer who
shall conduct and perform the day-to-day business of the commission.
If the executive officer is subject to a conflict of interest on a
matter before the commission, the commission shall appoint an
alternate executive officer.  The commission may recover its costs by
charging fees pursuant to Section 56383.
   (b) The commission shall appoint legal counsel to advise it.  If
the commission's counsel is subject to a conflict of interest on a
matter before the commission, the commission shall appoint alternate
legal counsel to advise it.  The commission may recover its costs by
charging fees pursuant to Section 56383.
   (c) The commission may appoint staff as it deems appropriate.  If
staff for the commission is subject to a conflict of interest on a
matter before the commission, the commission shall appoint alternate
staff to assist it.  The commission may recover its costs by charging
fees pursuant to Section 56383.
   (d) For purposes of this section, the term "conflict of interest"
shall be defined as it is for the purpose of the Political Reform Act
of 1974 and shall also include matters proscribed by Article 4
(commencing with Section 1090) of Chapter 1 of Division 4 of Title 1.

  SEC. 78.  Section 56386 of the Government Code is amended to read:

   56386.  (a) The officers and employees of a city, county, or
special district, including any local agency, school district,
community college district, and any regional agency, or state agency
or department, as may be necessary, or any other public agency shall
furnish the executive officer with any records or information in
their possession which may be necessary to assist the commission and
the executive officer in their duties, including, but not limited to,
the preparation of reports pursuant to Sections 56665 and 56800.
   (b) Upon request by the commission or the executive officer, the
county surveyor, or any other county officer, county official, or
employee as the board of supervisors may designate, shall examine and
report to the commission or the executive officer upon any
application or other document involving any of the matters specified
in subdivision (j) of Section 56375.
  SEC. 79.  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 so as 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 local governmental agency within the
county and enact policies designed to promote the logical and orderly
development of areas within the sphere.
   (b) At least 30 days prior to submitting an application to the
commission for a determination of a new sphere of influence, or to
update an existing sphere of influence for a city, representatives
from the city shall meet with county representatives to discuss the
proposed sphere, and its boundaries, and explore methods to reach
agreement on the boundaries, development standards, 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 no agreement is
reached between the city and county within 30 days, then the parties
may, by mutual agreement, extend discussions for an additional period
of 30 days.  If an agreement is reached between the city and county
regarding the boundaries, development standards, and zoning
requirements within the proposed sphere, the agreement shall be
forwarded to the commission, and 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 in the commission'
s 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.
   (f) Upon determination of a sphere of influence, the commission
shall adopt that sphere, and shall review and update, as necessary,
the adopted sphere not less than once every five years.
   (g) The commission may recommend governmental reorganizations to
particular agencies in the county, using the spheres of influence as
the basis for those recommendations.  Those recommendations shall be
made available, upon request, to other agencies or to the public.
The commission shall make all reasonable efforts to ensure wide
public dissemination of the recommendations.
   (h) For any sphere of influence or a sphere of influence that
includes a special district, the commission shall do all of the
following:
   (1) Require existing districts to file written statements with the
commission specifying the functions or classes of services provided
by those districts.
   (2) Establish the nature, location, and extent of any functions or
classes of services provided by existing districts.
   (3) Determine that, except as otherwise authorized by the
regulations, no new or different function or class of service shall
be provided by any existing district, except upon approval by the
commission.
   (i) Subdivisions (b), (c), and (d) shall become inoperative as of
January 1, 2007, unless a later enacted statute, that becomes
operative on or before January 1, 2007, deletes or extends that date.

  SEC. 79.5.  Section 56425.5 is added to the Government Code, to
read:
   56425.5.  (a) A determination of a city's sphere of influence, in
any case where that sphere of influence includes any portion of the
redevelopment project area referenced in subdivision (e) of Section
33492.41 of the Health and Safety Code, shall not preclude any other
local agency, as defined in Section 54951, including the
redevelopment agency referenced in Section 33492.41 of the Health and
Safety Code, in addition to that city, from providing facilities or
services related to development, as defined in subdivision (e) of
Section 56426, to or in that portion of the redevelopment project
area that, as of January 1, 2000, meets all of the following
requirements:
   (1) Is unincorporated territory.
   (2) Contains at least 100 acres.
   (3) Is surrounded or substantially surrounded by incorporated
territory.
   (4) Contains at least 100 acres zoned for commercial or industrial
uses or is designated on the applicable county general plan for
commercial or industrial uses.
   (b) Facilities or services related to development may be provided
by other local agencies to all or any portion of the area defined in
paragraphs (1) to (4), inclusive, of subdivision (a).  Subdivision
(a) shall apply regardless of whether the determination of the sphere
of influence is made before or after January 1, 2000.
  SEC. 80.  Section 56426 of the Government Code is repealed.
  SEC. 80.5.  Section 56429 of the Government Code is amended to
read:
   56429.  (a) Notwithstanding Sections 56425, 56427, and 56428, a
petition for removal of territory from a sphere of influence
determination may be brought pursuant to this section by landowners
within the redevelopment project area referenced in subdivision (e)
of Section 33492.41 of the Health and Safety Code, if, at the time
the petition is submitted, the area for which the petition is being
requested meets all of the following requirements:
   (1) Is unincorporated territory.
   (2) Contains at least 100 acres.
   (3) Is surrounded or substantially surrounded by incorporated
territory.
   (4) Contains at least 100 acres zoned for commercial or industrial
uses or is designated on the applicable county general plan for
commercial or industrial uses.
   (b) On receipt of a petition signed by landowners owning at least
25 percent of the assessed value of the land within the affected
territory, the commission shall hear and consider oral or written
testimony.
   (c) The petition shall be placed on the agenda of the commission
in accordance with subdivision (b) of Section 56428.
   (d) The executive officer shall give notice of the hearing in
accordance with Section 56427.
   (e) From the date of filing of the petition to the conclusion of
the hearing, the commission shall accept written positions from any
owner of land in the unincorporated territory that is seeking removal
from a city's sphere of influence.
   (f) The petition to remove territory from a city's sphere of
influence shall be granted and given immediate effect if the
commission finds that written positions filed in favor of the
petition and not withdrawn prior to the conclusion of the hearing
represent landowners owning 50 percent or more of the assessed value
of the land within the affected territory.
   (g) No removal of territory from a city's sphere of influence that
is proposed by petition and adopted pursuant to this section shall
be repealed or amended except by the petition and adoption procedure
provided in subdivisions (a) to (f), inclusive.  In all other
respects, a removal of territory from a city's sphere of influence
proposed by petition and adopted pursuant to this section shall have
the same force and effect as any amendment to or removal of territory
from a city's sphere of influence approved by the commission.  No
territory removed from a city's sphere of influence pursuant to this
section shall be annexed to that city, unless the territory is
subsequently added to the sphere of influence of the city pursuant to
the petition and adoption procedure provided in this section.
   (h) Pursuant to Section 56383, the commission may establish a
schedule of fees for the costs of carrying out this section.
   (i) All proper expenses incurred in connection with removal of
territory from a city's sphere of influence pursuant to this section
shall be paid by the proponents.
  SEC. 81.  Section 56430 is added to the Government Code, 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) Infrastructure needs or deficiencies.
   (2) Growth and population projections for the affected area.
   (3) Financing constraints and opportunities.
   (4) Cost avoidance opportunities.
   (5) Opportunities for rate restructuring.
   (6) Opportunities for shared facilities.
   (7) Government structure options, including advantages and
disadvantages of consolidation or reorganization of service
providers.
   (8) Evaluation of management efficiencies.
   (9) Local accountability and governance.
   (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.

   (c) 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 Section 56426.5 or to update a sphere of influence pursuant
to Section 56425.
   (d) Not later than July 1, 2001, the Office of Planning and
Research, in consultation with commissions, the California
Association of Local Agency Formation Commissions, and other local
governments, shall prepare guidelines for the service reviews to be
conducted by commissions pursuant to this section.
  SEC. 82.  Section 56434 is added to the Government Code, to read:
   56434.  (a) The commission may review and approve a proposal that
extends services into previously unserved territory within
unincorporated areas and may review the creation of new service
providers to extend urban type development into previously unserved
territory within unincorporated areas to ensure that the proposed
extension is consistent with the policies of Sections 56001, 56300,
56301, and the adopted policies of the commission implementing these
sections, including promoting orderly development, discouraging urban
sprawl, preserving open space and prime agricultural lands,
providing housing for persons and families of all incomes, and the
efficient extension of governmental services.
   (b) This section shall remain in effect only until January 1,
2007, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2007, deletes or extends
that date.
  SEC. 83.  Chapter 5 (commencing with Section 56450) of Part 2 of
Division 3 of Title 5 of the Government Code is repealed.
  SEC. 84.  Chapter 6 (commencing with Section 56475) of Part 2 of
Division 3 of Title 5 of the Government Code is repealed.
  SEC. 86.  Section 56653 of the Government Code is amended to read:

   56653.  (a) Whenever a local agency or school district submits a
resolution of application for a change of organization or
reorganization pursuant to this part, the local agency shall submit
with the resolution of application a plan for providing services
within the affected territory.
   (b) The plan for providing services shall include all of the
following information and any additional information required by the
commission or the executive officer:
   (1) An enumeration and description of the services to be extended
to the affected territory.
   (2) The level and range of those services.
   (3) An indication of when those services can feasibly be extended
to the affected territory.
   (4) An indication of any improvement or upgrading of structures,
roads, sewer or water facilities, or other conditions the local
agency would impose or require within the affected territory if the
change of organization or reorganization is completed.
   (5) Information with respect to how those services will be
financed.
  SEC. 87.  Section 56655 is added to the Government Code, to read:
   56655.  If two or more proposals pending before the commission
conflict or in any way are inconsistent with each other, as
determined by the commission, the commission may determine the
relative priority for conducting any further proceedings based on any
of those proposals.  That determination shall be included in the
terms and conditions imposed by the commission.  In the absence of
that determination, priority is given to that proceeding which shall
be based upon the proposal first filed with the executive officer.
  SEC. 88.  Section 56656 of the Government Code is repealed.
  SEC. 89.  Section 56657 is added to the Government Code, to read:
   56657.  Notwithstanding Section 56655, the commission shall not
approve a proposal for incorporation, consolidation of districts,
dissolution, merger, or establishment of a subsidiary district, or a
reorganization that includes any of these changes of organization
until it has considered any other change of organization which
conflicts with the subject proposal and which was submitted to the
commission within 60 days of the submission of the subject proposal.

  SEC. 90.  Section 56658 is added to the Government Code, to read:
   56658.  (a) Any petitioner or legislative body desiring to
initiate proceedings shall submit an application to the executive
officer of the principal county.
   (b) Immediately after receiving an application and before issuing
a certificate of filing, the executive officer shall give mailed
notice that the application has been received to each interested
agency, each subject agency, the county committee on school district
organization, and each school superintendent whose school district
overlies the subject area.  The notice shall generally describe the
proposal and the affected territory.  The executive officer shall not
be required to give notice pursuant to this subdivision if a local
agency has already given notice pursuant to subdivision (b) of
Section 56654.
   (c) If a special district is, or as a result of a proposal will
be, located in more than one county, the executive officer of the
principal county shall immediately give the executive officer of each
other affected county mailed notice that the application has been
received.  The notice shall generally describe the proposal and the
affected territory.
   (d) Except when a commission is the lead agency pursuant to
Section 21067 of the Public Resources Code, the executive officer
shall determine within 30 days of receiving an application whether
the application is complete and acceptable for filing or whether the
application is incomplete.
   (e) The executive officer shall not accept an application for
filing and issue a certificate of filing for at least 20 days after
giving the mailed notice required by subdivision (b).  The executive
officer shall not be required to comply with this subdivision in the
case of an application which meets the requirements of Section 56663
or in the case of an application for which a local agency has already
given notice pursuant to subdivision (b) of Section 56654.
   (f) If the appropriate fees have been paid, an application shall
be deemed accepted for filing if no determination has been made by
the executive officer within the 30-day period.  An executive officer
shall accept for filing, and file, any application submitted in the
form prescribed by the commission and containing all of the
information and data required pursuant to Section 56652.
   (g) When an application is accepted for filing, the executive
officer shall immediately issue a certificate of filing to the
applicant.  A certificate of filing shall be in the form prescribed
by the executive officer and shall specify the date upon which the
proposal shall be heard by the commission.  From the date of issuance
of a certificate of filing, or the date upon which an application is
deemed to have been accepted, whichever is earlier, an application
shall be deemed filed pursuant to this division.
   (h) If an application is determined not to be complete, the
executive officer shall immediately transmit that determination to
the applicant specifying those parts of the application which are
incomplete and the manner in which they can be made complete.
   (i) Following the issuance of the certificate of filing, the
executive officer shall proceed to set the proposal for hearing and
give published notice thereof as provided in this part.  The date of
the hearing shall be not more than 90 days after issuance of the
certificate of filing or after the application is deemed to have been
accepted, whichever is earlier.  Notwithstanding Section 56106, the
date for conducting the hearing, as determined pursuant to this
subdivision, is mandatory.
  SEC. 90.5.  Section 56658 is added to the Government Code, to read:

   56658.  (a) Any petitioner or legislative body desiring to
initiate proceedings shall submit an application to the executive
officer of the principal county.
   (b) (1) Immediately after receiving an application and before
issuing a certificate of filing, the executive officer shall give
mailed notice that the application has been received to each
interested agency, each subject agency, the county committee on
school district organization, and each school superintendent whose
school district overlies the subject area.  The notice shall
generally describe the proposal and the affected territory.  The
executive officer shall not be required to give notice pursuant to
this subdivision if a local agency has already given notice pursuant
to subdivision (b) of Section 56654.
   (2) It is the intent of the Legislature that an incorporation
proposal shall be processed in a timely manner.  With regard to an
application                                              that
includes an incorporation, the executive officer shall immediately
notify all affected local agencies and any applicable state agencies
by mail and request the affected agencies to submit the required data
to the commission within a reasonable timeframe established by the
executive officer.  Each affected agency shall respond to the
executive officer within 15 days acknowledging receipt of the
request.  Each affected local agency and the officers and departments
thereof shall submit the required data to the executive officer
within the timelines established by the executive officer.  Each
affected state agency and the officers and departments thereof shall
submit the required data to the executive officer within the
timelines agreed upon by the executive officer and the affected state
departments.
   (c) If a special district is, or as a result of a proposal will
be, located in more than one county, the executive officer of the
principal county shall immediately give the executive officer of each
other affected county mailed notice that the application has been
received.  The notice shall generally describe the proposal and the
affected territory.
   (d) Except when a commission is the lead agency pursuant to
Section 21067 of the Public Resources Code, the executive officer
shall determine within 30 days of receiving an application whether
the application is complete and acceptable for filing or whether the
application is incomplete.
   (e) The executive officer shall not accept an application for
filing and issue a certificate of filing for at least 20 days after
giving the mailed notice required by subdivision (b).  The executive
officer shall not be required to comply with this subdivision in the
case of an application which meets the requirements of Section 56663
or in the case of an application for which a local agency has already
given notice pursuant to subdivision (b) of Section 56654.
   (f) If the appropriate fees have been paid, an application shall
be deemed accepted for filing if no determination has been made by
the executive officer within the 30-day period.  An executive officer
shall accept for filing, and file, any application submitted in the
form prescribed by the commission and containing all of the
information and data required pursuant to Section 56652.
   (g) When an application is accepted for filing, the executive
officer shall immediately issue a certificate of filing to the
applicant.  A certificate of filing shall be in the form prescribed
by the executive officer and shall specify the date upon which the
proposal shall be heard by the commission.  From the date of issuance
of a certificate of filing, or the date upon which an application is
deemed to have been accepted, whichever is earlier, an application
shall be deemed filed pursuant to this division.
   (h) If an application is determined not to be complete, the
executive officer shall immediately transmit that determination to
the applicant specifying those parts of the application which are
incomplete and the manner in which they can be made complete.
   (i) Following the issuance of the certificate of filing, the
executive officer shall proceed to set the proposal for hearing and
give published notice thereof as provided in this part.  The date of
the hearing shall be not more than 90 days after issuance of the
certificate of filing or after the application is deemed to have been
accepted, whichever is earlier.  Notwithstanding Section 56106, the
date for conducting the hearing, as determined pursuant to this
subdivision, is mandatory.
  SEC. 91.  Section 56660 is added to the Government Code, to read:
   56660.  The executive officer shall give notice of any hearing by
the commission by publication, as provided in Sections 56153 and
56154, and by posting, as provided in Sections 56158 and 56159.
  SEC. 92.  Section 56661 is added to the Government Code, to read:
   56661.  To the extent that the commission maintains an Internet
website, notice of all public hearings shall be made available in
electronic format on that site.  The executive officer shall also
give mailed notice of any hearing by the commission, as provided in
Sections 56155 to 56157, inclusive, by mailing notice of the hearing
or transmitting by electronic mail, if available to the recipient, to
all of the following persons and entities:
   (a) To each affected local agency by giving notice to each elected
local official, each member of the governing body, and the executive
officer of the agency.
   (b) To the proponents, if any.
   (c) To each person who has filed a written request for special
notice with the executive officer.
   (d) If the proposal is for any annexation or detachment, or for a
reorganization providing for the formation of a new district, to each
city within three miles of the exterior boundaries of the territory
proposed to be annexed, detached, or formed into a new district.
   (e) If the proposal is to incorporate a new city or for the
formation of a district, to the affected county.
   (f) If the proposal includes the formation of, or annexation of
territory to, a fire protection district formed pursuant to the Fire
Protection District Law of 1987, Part 3 (commencing with Section
13800) of Division 12 of the Health and Safety Code, and all or part
of the affected territory has been classified as a state
responsibility area, to the Director of Forestry and Fire Protection.

   (g) If the proposal would result in the annexation to a city of
land that is subject to a contract executed pursuant to the
Williamson Act (Chapter 7 (commencing with Section 51200) of Division
1), to the Director of Conservation.
   (h) To all registered voters and owners of property, as shown on
the most recent assessment roll being prepared by the county at the
time the commission adopts a resolution of application, within 300
feet of the exterior boundary of the property that is the subject of
the hearing at least 20 days prior to the hearing.  In lieu of the
assessment roll, the agency may use the records of the county
assessor or tax collector or any other more current record.  Notice
shall also either be posted or published in one newspaper 20 days
prior to the hearing.  If this section would require more than 1,000
notices to be mailed, then notice may instead be provided pursuant to
paragraph (1) of subdivision (b) of Section 65954.6.
  SEC. 93.  Section 56662 is added to the Government Code, to read:
   56662.  (a) The commission may make either of the following
determinations without notice and hearing:
   (1) Subject to the limitations of Section 56663, approval or
disapproval of a proposal for an annexation, detachment, or
reorganization which consists solely of annexations or detachments,
or both.
   (2) Subject to the limitations of Section 56663, approval or
disapproval of the formation of a county service area.
   (b) Except for the determinations authorized to be made by
subdivision (a), the commission shall not make any determinations
upon any proposal, plan of reorganization, or report and
recommendation of a reorganization committee until after public
hearing by the commission on that proposal, plan of reorganization,
or report and recommendation of a reorganization committee.
  SEC. 94.  Section 56663 is added to the Government Code, to read:
   56663.  (a) If a petition for an annexation, a detachment, or a
reorganization consisting solely of annexations or detachments, or
both, or the formation of a county service area is signed by all of
the owners of land within the affected territory of the proposed
change of organization or reorganization, or if a resolution of
application by a legislative body of an affected district, affected
county, or affected city making a proposal for an annexation or
detachment, or for a reorganization consisting solely of annexations
or detachments, or both, or the formation of a county service area is
accompanied by proof, satisfactory to the commission, that all the
owners of land within the affected territory have given their written
consent to that change of organization or reorganization, the
commission may approve or disapprove the change of organization or
reorganization, without notice and hearing by the commission.  In
those cases, the commission may also approve and conduct proceedings
for the change of organization or reorganization under any of the
following conditions:
   (1) Without notice and hearing.
   (2) Without an election.
   (3) Without notice, hearing, or an election.
   (b) The executive officer shall give any affected agency mailed
notice of the filing of the petition or resolution of application
initiating proceedings by the commission.  The commission shall not,
without the written consent of the subject agency, take any further
action on the petition or resolution of application for 10 days
following that mailing.  Upon written demand by an affected local
agency, filed with the executive officer during that 10-day period,
the commission shall make determinations upon the petition or
resolution of application only after notice and hearing on the
petition or resolution of application.  If no written demand is
filed, the commission may make those determinations without notice
and hearing.  By written consent, which may be filed with the
executive officer at any time, a subject agency may do any of the
following:
   (1) Waive the requirement of mailed notice.
   (2) Consent to the commission making determinations without notice
and hearing.
   (3) Waive the requirement of mailed notice and consent to the
commission making determinations without notice and hearing.
   (c) In the case of uninhabited territory, the commission may waive
protest proceedings pursuant to Part 4 (commencing with Section
57000) entirely if all of the following conditions apply:
   (1) All the owners of land within the affected territory have
given their written consent to the change of organization or
reorganization.
   (2) All affected local agencies that will gain or lose territory
as a result of the change of organization or reorganization have
consented in writing to a waiver of protest proceedings.
   (3) The commission has provided written notice of commission
proceedings to all property owners and registered voters within the
subject territory and no opposition is received prior to or during
the commission meeting.
   (d) In the case of inhabited city and district annexations or
detachments, or both, the commission may waive protest proceedings
pursuant to Part 4 (commencing with Section 57000) entirely if both
of the following conditions apply:
   (1) The commission has provided written notice of commission
proceedings to all registered voters and landowners within the
affected territory and no opposition from registered voters or
landowners within the affected territory is received prior to or
during the commission meeting.  The written notice shall disclose to
the registered voters and landowners that unless opposition is
expressed regarding the proposal or the commission's intention to
waive protest proceedings, that there will be no subsequent protest
and election proceedings.
   (2) All affected local agencies that will gain or lose territory
as a result of the change of organization or reorganization have
consented in writing to a waiver of protest proceedings.
  SEC. 95.  Section 56664 is added to the Government Code, to read:
   56664.  Where the commission desires to provide for notice and
hearing prior to making a determination on a matter which the
commission is authorized, but not required, to determine without
notice and hearing, the commission shall order a public hearing on
that matter and set a date, time, and place for the hearing.  The
date of hearing shall not be more than 90 days after the date of the
order.
  SEC. 96.  Section 56665 is added to the Government Code, to read:
   56665.  The executive officer shall review each application which
is filed with the executive officer and shall prepare a report,
including his or her recommendations, on the application.  The report
shall be completed not less than five days prior to the date
specified in the notice of hearing.  Upon completion, the executive
officer shall furnish copies of the report to each of the following:

   (a) The officers or persons designated in the application.
   (b) Each local agency whose boundaries or sphere of influence
would be changed by the proposal or recommendation.
   (c) Each affected local agency which has filed a request for a
report with the executive officer.
   (d) The executive officer of another affected county when a
district is or will be located in that other county.
   (e) Each affected city.
  SEC. 97.  Section 56666 is added to the Government Code, to read:
   56666.  (a) The hearing shall be held by the commission upon the
date and at the time and place specified.  The hearing may be
continued from time to time but not to exceed 70 days from the date
specified in the original notice.
   (b) At the hearing, the commission shall hear and receive any oral
or written protests, objections, or evidence which shall be made,
presented, or filed, and consider the report of the executive officer
and the plan for providing services to the territory prepared
pursuant to Section 56653.
  SEC. 97.5.  Section 56666 is added to the Government Code, to read:

   56666.  (a) The hearing shall be held by the commission upon the
date and at the time and place specified.  The hearing may be
continued from time to time but not to exceed 70 days from the date
specified in the original notice.
   (b) At the hearing, the commission shall hear and receive any oral
or written protests, objections, or evidence which shall be made,
presented, or filed, and consider the report of the executive officer
and the plan for providing services to the territory prepared
pursuant to Section 56653.
   (c) Prior to any continuance of a hearing pursuant to this section
regarding a proposal that includes an incorporation, the chief
petitioners shall have an opportunity to address the commission on
any potential impacts or hardships on the incorporation effort that
may result from a delay.  The commission shall consider the potential
impacts on the incorporation proponents prior to making a decision
on the duration of any continuance.
  SEC. 98.  Section 56667 is added to the Government Code, to read:
   56667.  If the report filed pursuant to Section 56665 indicates
that more than 50 percent of the land proposed for incorporation is
owned by or dedicated to the use of a city or county and that the
proposed incorporation would result in a revenue loss to that city or
county, and at the hearing held pursuant to Section 56666 the board
of supervisors of the county or city council of the city presents a
resolution objecting to the incorporation, no further proceedings
shall be conducted by the commission and no new proposal involving
incorporation of substantially the same territory shall be initiated
for one year.
   In the absence of a resolution of objection from a city or county,
the commission may approve the proposal only if it imposes as a
condition thereto that the newly incorporated city may not adopt any
regulation or policy which would have a negative fiscal impact on any
contract existing at the time of the incorporation which is related
to the publicly owned land.
   This section shall not preclude the completion of proceedings to
incorporate territory which is the subject of incorporation
proceedings filed with the executive officer of the commission prior
to February 15, 1986.
  SEC. 99.  Section 56668 is added to the Government Code, to read:
   56668.  Factors to be considered in the review of a proposal shall
include, but not be limited to, all of the following:
   (a) Population, population density; land area and land use; per
capita assessed valuation; topography, natural boundaries, and
drainage basins; proximity to other populated areas; the likelihood
of significant growth in the area, and in adjacent incorporated and
unincorporated areas, during the next 10 years.
   (b) Need for organized community services; the present cost and
adequacy of governmental services and controls in the area; probable
future needs for those services and controls; probable effect of the
proposed incorporation, formation, annexation, or exclusion and of
alternative courses of action on the cost and adequacy of services
and controls in the area and adjacent areas.
   "Services," as used in this subdivision, refers to governmental
services whether or not the services are services which would be
provided by local agencies subject to this division, and includes the
public facilities necessary to provide those services.
   (c) The effect of the proposed action and of alternative actions,
on adjacent areas, on mutual social and economic interests, and on
the local governmental structure of the county.
   (d) The conformity of both the proposal and its anticipated
effects with both the adopted commission policies on providing
planned, orderly, efficient patterns of urban development, and the
policies and priorities set forth in Section 56377.
   (e) The effect of the proposal on maintaining the physical and
economic integrity of agricultural lands, as defined by Section
56016.
   (f) The definiteness and certainty of the boundaries of the
territory, the nonconformance of proposed boundaries with lines of
assessment or ownership, the creation of islands or corridors of
unincorporated territory, and other similar matters affecting the
proposed boundaries.
   (g) Consistency with city or county general and specific plans.
   (h) The sphere of influence of any local agency which may be
applicable to the proposal being reviewed.
   (i) The comments of any affected local agency.
   (j) The ability of the newly formed or receiving entity to provide
the services which are the subject of the application to the area,
including the sufficiency of revenues for those services following
the proposed boundary change.
   (k) Timely availability of water supplies adequate for projected
needs as specified in Section 65352.5.
   (l) The extent to which the proposal will assist the receiving
entity in achieving its fair share of the regional housing needs as
determined by the appropriate council of governments.
   (m) Any information or comments from the landowner or owners.
   (n) Any information relating to existing land use designations.
  SEC. 99.5.  Section 56668.5 is added to the Government Code, to
read:
   56668.5.  The commission may, but is not required to, consider the
regional growth goals and policies established by a collaboration of
elected officials only, formally representing their local
jurisdictions in an official capacity on a regional or subregional
basis.  This section does not grant any new powers or authority to
the commission or any other body to establish regional growth goals
and policies independent of the powers granted by other laws.
  SEC. 100.  Section 56700.1 is added to the Government Code, to
read:
   56700.1.  Expenditures for political purposes related to a change
of organization or reorganization proposal that has been submitted to
a commission, and contributions in support of or in opposition to
those measures, shall be disclosed and reported to the same extent
and subject to the same requirements as provided for local initiative
measures to be presented to the electorate.
  SEC. 101.  Section 56700.3 of the Government Code is repealed.
  SEC. 102.  Section 56700.4 is added to the Government Code, to
read:
   56700.4.  (a) Before circulating any petition for change of
organization, the proponent shall file with the executive officer a
notice of intention that shall include the name and mailing address
of the proponent and a written statement, not to exceed 500 words in
length, setting forth the reasons for the proposal.  The notice shall
be signed by a representative of the proponent, and shall be in
substantially the following form:
      Notice of Intent to Circulate Petition
    Notice is hereby given of the intention to circulate a petition
proposing to ____.
The reasons for the proposal are:

   (b) After the filing required pursuant to subdivision (a), the
petition may be circulated for signatures.
   (c) Upon receiving the notice, the executive officer shall notify
any affected jurisdictions.
   (d) The notice requirements of this section shall apply in
addition to any other applicable notice requirements.
  SEC. 103.  Section 56700.5 of the Government Code is repealed.
  SEC. 104.  Section 56701 of the Government Code is repealed.
  SEC. 105.  Section 56702 of the Government Code is repealed.
  SEC. 106.  Section 56705 of the Government Code is amended to read:

   56705.  (a) Except as otherwise provided in subdivision (b), no
petition shall be accepted for filing unless the signatures on the
petition are secured within six months of the date on which the first
signature on the petition was affixed and the petition is submitted
to the executive officer for filing within 60 days after the last
signature is affixed.  If the elapsed time between the date on which
the last signature is affixed and the date on which the petition is
submitted for filing is more than 60 days, the executive officer
shall file the petition in accordance with Section 56709.
   (b) (1) Notwithstanding subdivision (a), in cities with a
population of more than 100,000 residents that are located in a
county with a population of over 4,000,000, no petition shall be
accepted for filing unless the signatures thereon have been secured
within 90 days of the publication of the notice required pursuant to
Section 56760 and the petition is submitted to the executive officer
for filing within 60 days after the last signature is affixed.  If
the elapsed time between the date on which the last signature is
affixed and the date on which the petition is submitted for filing is
more than 60 days, the executive officer shall file the petition in
accordance with Section 56709.
   (2) This subdivision shall not apply to a petition for a special
reorganization, as defined in Section 56075.5.  Subdivision (a) shall
apply to a special reorganization, as defined in Section 56075.5,
regardless of the number of residents in the city or county in which
signatures have been secured on the petition.  This paragraph is
declaratory of existing law.
  SEC. 107.  Section 56706 of the Government Code is amended to read:

   56706.  (a) Within 30 days after the date of receiving a petition,
the executive officer shall cause the petition to be examined by the
county elections official, in accordance with Sections 9113 to 9115,
inclusive, of the Elections Code and shall prepare a certificate of
sufficiency indicating whether the petition is signed by the
requisite number of signers.
   (b) (1) Except as provided in paragraph (2), if the certificate of
the executive officer shows the petition to be insufficient, the
executive officer shall immediately give notice by certified mail of
the insufficiency to the proponents, if any.  That mailed notice
shall state in what amount the petition is insufficient.  Within 15
days after the date of the notice of insufficiency, a supplemental
petition bearing additional signatures may be filed with the
executive officer.
   (2) Notwithstanding paragraph (1), the proponents of the petition
may, at their option, collect signatures for an additional 15 days
immediately following the statutory period allowed for collecting
signatures without waiting for notice of insufficiency.  Any
proponent choosing to exercise this option may not file a
supplemental petition as provided in paragraph (1).
   (c) Within 10 days after the date of filing a supplemental
petition, the executive officer shall examine the supplemental
petition and certify in writing the results of his or her
examination.
   (d) A certificate of sufficiency shall be signed by the executive
officer and dated.  That certificate shall also state the minimum
signature requirements for a sufficient petition and show the results
of the executive officer's examination.  The executive officer shall
mail a copy of the certificate of sufficiency to the proponents, if
any.
  SEC. 108.  Section 56708 of the Government Code is amended to read:

   56708.  If a petition is signed by owners of land, the executive
officer shall cause the names of the signers on the petition to be
compared with the names of the persons shown as owners of land on the
most recent assessment roll being prepared by the county at the time
the commission adopts a resolution of application and ascertain, to
the extent possible, both of the following:
   (a) The total number of landowners within the territory and the
total assessed valuation of all land within the affected territory.
   (b) The total number of landowners represented by qualified
signers and the total assessed valuation of land owned by qualified
signers.
  SEC. 109.  Section 56710 of the Government Code is amended to read:

   56710.  For purposes of evaluating the sufficiency of any petition
signed by owners of land:
   (a) The assessed value to be given land exempt from taxation or
owned by a public agency shall be determined by the county assessor,
at the request of the executive officer, in the same amount as the
county assessor would assess that land, if the land were not exempt
from taxation or owned by a public agency.
   (b) The value given land held in joint tenancy or tenancy in
common shall be determined in proportion to the proportionate
interest of the petitioner in that land.
   (c) The executive officer shall disregard the signature of any
person not shown as owner on the most recent assessment roll being
prepared by the county at the time the commission adopts a resolution
of application unless prior to certification the executive officer
is furnished with written evidence, satisfactory to the executive
officer, that the signer meets any of the following requirements:
   (1) Is a legal representative of the owner.
   (2) Is entitled to be shown as owner of land on the next
assessment roll.
   (3) Is a purchaser of land under a recorded written agreement of
sale.
   (4) Is authorized to sign for, and on behalf of, any public agency
owning land.
  SEC. 110.  Chapter 3 (commencing with Section 56720) is added to
Part 3 of Division 3 of Title 5 of the Government Code, to read:

      CHAPTER 3.  PROCEEDINGS FOR CITIES

                 Article 1.  Incorporation

   56720.  The commission shall not approve or conditionally approve
any proposal that includes an incorporation, unless the commission
finds, based on the entire record, that:
   (a) The proposed incorporation is consistent with the intent of
this division, including, but not limited to, the policies of
Sections 56001, 56300, 56301, and 56377.
   (b) It has reviewed the spheres of influence of the affected local
agencies and the incorporation is consistent with those spheres of
influence.
   (c) It has reviewed the comprehensive fiscal analysis prepared
pursuant to Section 56800 and the Controller's report prepared
pursuant to Section 56801.
   (d) It has reviewed the executive officer's report and
recommendation prepared pursuant to Section 56665, and the testimony
presented at its public hearing.
   (e) The proposed city is expected to receive revenues sufficient
to provide public services and facilities and a reasonable reserve
during the three fiscal years following incorporation.
   56722.  If a petition is for incorporation of a new city, or
consolidation of cities, the petition may propose a name for the new
or consolidated city.
   The proposed name for the new or consolidated city may contain the
word "town."
   56723.  If the petition is for incorporation, it may also include
provisions for appointment of a city manager and appointment of
elective city officials, except city council members.
   56724.  (a) If the commission approves a proposal that includes
the incorporation of a city, the resolution making determinations
shall, upon the incorporation applicant's request, specify that the
first election of city officers is to be held after voter approval of
the proposal.
   (b) If the applicant has submitted an application to the
commission prior to the effective date of this section, the applicant
may request that the election of city officers be held after the
vote on the incorporation proposal.
   (c) If the election of city officers is to be conducted after the
vote on the incorporation proposal, the commission shall not set the
effective date to be sooner than the election date of the city
officers.

      Article 2.  Special Reorganization

   56730.  Proceedings for a special reorganization shall be
conducted in accordance with the procedures otherwise prescribed for
incorporation of a city, including, but not limited to, the
provisions specified in Sections 56720, 56800, 56810, and 56815.
Notwithstanding any other provision of this division, an election, if
required, shall be conducted in accordance with Sections 57119 and
57132.5.

      Article 3.  Annexation and Other Changes of Organization

   56737.  When a change of organization or a reorganization includes
the annexation of inhabited territory to a city and the assessed
value of land within the territory equals one-half or more of the
assessed value of land within the city, or the number of registered
voters residing within the territory equals one-half or more of the
number of registered voters residing within the city, the commission
may determine as a condition of the proposal that the change of
organization or reorganization shall also be subject to confirmation
by the voters in an election to be called, held, and conducted within
the territory of the city to which annexation is proposed.
   56738.  If the proposal would result in the annexation to a city
of land that is subject to a contract executed pursuant to the
Williamson Act (Chapter 7 (commencing with Section 51200) of Division
1), then the petition shall state whether the city shall succeed to
the contract pursuant to Section 51243 or whether the city intends to
exercise its option to not succeed to the contract pursuant to
Section 51243.5.
   56740.  (a) No tidelands or submerged lands, as defined in
subdivision (g), which are owned by the state or by its grantees in
trust shall be incorporated into, or annexed to, a city, except lands
which may be approved by the State Lands Commission.
   (b) If those tidelands or submerged lands are included within the
boundaries of any territory proposed to be incorporated into, or
annexed to, a city, a description of the boundaries, together with a
map showing the boundaries, shall be filed with the State Lands
Commission by the proponents of the incorporation or annexation.  The
filing with the State Lands Commission shall be made prior to the
executive officer issuing a certificate of filing for the proposal.
   (c) The State Lands Commission shall approve or disapprove all
portions of the boundaries located upon the tidelands or submerged
lands.  In making that determination, it shall, where feasible and
appropriate, require any extensions of land boundaries of the city or
proposed city to be at right angles to the general direction of the
shoreline at each point of intersection of the shoreline with the
land boundaries of the city or proposed city.  However, in the
interest of ensuring an orderly and equitable pattern of offshore
boundaries, the State Lands Commission may establish angles and other
courses for each offshore boundary it deems necessary considering
any irregularity of the shoreline, other geographical features, the
effect of incorporation or annexation of the offshore or submerged
lands on the uplands of the city, or proposed city, and adjoining
territory, and the existing and potential boundaries of other cities
and of unincorporated communities.
   (d) Within 45 days after the filing of the boundary description
and map with the State Lands Commission, the State Lands Commission
shall make a determination of the proper offshore or submerged lands
boundaries.  That determination shall be final and conclusive.  If
the State Lands Commission does not make the determination within
that time, the proposed offshore or submerged lands boundaries shall
be deemed approved.
   (e) The State Lands Commission shall report its determination to
the executive officer and to each affected city, affected county,
affected district, or person, if any, that has filed the boundary
description and map.  Thereafter, filings and action may be taken
pursuant to this part.
   (f) The local agency formation commission may review and make
determinations as to all portions of the boundaries, other than those
offshore or submerged lands boundaries.
   (g) "Submerged lands," as used in this section, includes, but is
not limited to, lands underlying navigable waters which are in
sovereign ownership of the state whether or not those waters are
subject to tidal influences.
   56741.  Territory may not be annexed to a city unless it is
located in the same county.  Unless otherwise provided in this
division, territory may not be annexed to a city unless it is
contiguous to the city at the time the proposal is initiated pursuant
to this part.  Territory incorporated as a city shall be located
within one county and, except as otherwise provided in Section 56742,
shall be contiguous with all other territory being incorporated as a
city.
   56742.  Notwithstanding Section 56741, upon approval of the
commission a city may annex noncontiguous territory not exceeding 300
acres in area, which is located in the same county as that in which
the city is situated, and which is owned by the city and is being
used for municipal purposes at the time commission proceedings are
initiated.  If, after the completion of the annexation, the city
sells that territory or any part of that territory, all of the
territory which is no longer owned by the city shall cease to be a
part of the city.  Territory which is used by a city for reclamation,
disposal, and storage of treated wastewater may be annexed to the
city pursuant to this section without limitation as to the size of
the area encompassed within the territory so annexed.
   If territory is annexed pursuant to this section, the annexing
city may not annex any territory not owned by the city and not
contiguous to the city, although the territory is contiguous to the
territory annexed pursuant to this section.
   Notwithstanding any other provision of this section, a city which
annexes territory pursuant to this section may annex additional
territory in the same county as that in which the city is situated
which is owned by the United States government or the State of
California and which is contiguous to the first-annexed territory if
the total acreage of the first-annexed and the subsequently annexed
territory together does not exceed 300 acres in area.  If after the
completion of the subsequent annexation, the city sells all or any
part of the first-annexed territory, the subsequently annexed
territory shall cease to be part of the city if the subsequently
annexed territory is no longer contiguous to territory owned by the
city.
   When territory ceases to be part of a city pursuant to this
section, the legislative body of the city shall adopt a resolution
confirming the detachment.  The resolution shall describe the
detached territory and shall be accompanied by a map indicating the
territory.  Immediately upon adoption of the resolution, the city
clerk shall make any filing required by Chapter 8 (commencing with
Section 57200) of Part 4.
   If territory annexed to a city pursuant to this section becomes
contiguous to the city, the limitations imposed by this section shall
cease to apply.
   56742.5.  (a) Notwithstanding Section 56741, upon approval of the
commission any city may annex noncontiguous territory which
constitutes a state correctional facility or a state correctional
training facility.  If, after the completion of the annexation, the
State of California sells that territory or any part thereof, all of
the territory which is no longer owned by the state shall cease to be
a part of the city which annexed the territory.
   (b) If territory is annexed pursuant to this section, the city may
not annex any territory not owned by the State of California and not
contiguous to the city although that territory is contiguous to the
territory annexed pursuant to this section.
   (c) When territory ceases to be part of the city pursuant to this
section, the legislative body of the city shall adopt a resolution
confirming the detachment of that territory from the city.  The
resolution shall describe the detached territory and shall be
accompanied by a map indicating the territory.  Immediately upon
adoption of the resolution, the city clerk shall make any filing
provided for by Chapter 8 (commencing with Section 57200) of Part 4
of Division 3.
   (d) If territory annexed pursuant to this section becomes
contiguous to the city, the limitations imposed by this section shall
cease to apply.
   (e) A city may enter into an agreement with any other city under
which the city apportions any increase in state subventions resulting
from the annexation of territory pursuant to this section.
   56743.  (a) Notwithstanding Section 56741, upon approval of the
commission a city may annex noncontiguous territory not exceeding
3,100 acres in area, which is located in the same county as that in
which the city is situated, and which is owned by the city and is
being used for municipal water purposes at the time preliminary
proceedings are initiated pursuant to this part.  If, after the
completion of the annexation, the city sells that territory or any
part thereof, all of that territory which is no longer owned by the
city shall cease to be a part of the city.
   (b) If territory is annexed pursuant to this section, the annexing
city may not annex any territory not owned by it and not contiguous
to it although that territory is contiguous to the territory annexed
pursuant to this section.
   (c) When territory ceases to be part of a city pursuant to this
section, the legislative body of the city shall adopt a resolution
confirming the detachment of that territory from the city.  The
resolution shall describe the detached  territory and shall be
accompanied by a map indicating the territory.  Immediately  upon
adoption of the resolution, the city clerk shall make any filing
provided for by Chapter 8 (commencing with Section 57200) of Part 4.

   (d) If territory annexed to a city pursuant to this section
becomes contiguous to the city, the limitations imposed by this
section shall cease to apply.
   (e) If territory is annexed pursuant to this section, it shall be
used only for municipal water purposes.  The city may, however, enter
into agreements to lease the land for timber production or grazing
by animals.  If the territory is used by the city for any other
purpose at any time, it shall cease to be a part of the city.
   (f) This section applies only to the City of Willits.
   56744.  Unless otherwise determined by the commission pursuant to
subdivision (l) of Section 56375, territory shall not be incorporated
into, or annexed to, a city pursuant to this division if, as a
result of that incorporation or annexation, unincorporated territory
is completely surrounded by that city or by territory of that city on
one or more sides and the Pacific Ocean on the remaining sides.
   56745.  If authorized pursuant to Section 56375.3, the commission
may order annexation of the territory without an election.
   56746.  (a) The authority to initiate, conduct, and complete any
proceeding pursuant to Section 56745 does not apply to any territory
which, after January 1, 2000, became surrounded or substantially
surrounded by the city to which annexation is proposed.  The
authority to initiate, conduct, and complete any proceeding pursuant
to Section 56745 shall expire January 1, 2007.  The period of time
between January 1, 2000, and January 1, 2007, shall not include any
period of time during which, in an action pending in any court, a
local agency is enjoined from conducting proceedings pursuant to
Section 56745.  Upon final disposition of that case, the previously
enjoined local agency may initiate, conduct, and complete proceedings
pursuant to Section 56745 for the same period of time as was
remaining under that seven-year limit at the time the injunction
commenced.  However, if the remaining time is less than six months,
that authority shall continue for six months following final
disposition of the action.
   (b) Between January 1, 2000, and January 1, 2007, no new proposal
involving the same or substantially the same territory as a proposal
initiated pursuant to Section 56745 after January 1, 2000, shall be
initiated for two years after the date of adoption by the commission
of a resolution terminating proceedings.
   56747.  (a) Notwithstanding Section 56031, unincorporated
territory consisting of property abutting on a street, highway, or
road, and the street, highway, or road, to the extent that it abuts
that property, together with the road strip may be annexed to a city
pursuant to this division under the following conditions:
   (1) The annexation may be made only if the property to be annexed
is within the sphere of influence of the annexing city, as adopted by
the commission, and lies within an unincorporated area wholly
surrounded by the annexing city or the annexing city and the county
line or the annexing city and the Pacific Ocean or the annexing city
and a boundary of another city.
   (2) The property to be annexed shall not be annexed if the
distance between the boundary of the annexing city and the point
closest to the annexing city at which the road strip connects with
the abutting property, as measured by the road  strip, is more than
one-half mile.
   (b) Subsequent annexations to the road strip and abutting
territory shall not be made unless both of the following conditions
are met:
   (1) The distance between the point at which the original road
strip abuts the boundary of the annexing city and the point closest
to the city at which the road strip connects with the abutting
property to be annexed, as measured by the road strip, is one-half
mile or less.
   (2) The annexation is contiguous to the road strip.
   (c) As used in this section:
   (1) "Property to be annexed" means the property abutting on a
street, highway, or road, and the street, highway, or road, to the
extent it abuts the property.
   (2) "Road strip" means the street, highway, or road which connects
the territory of the property to be annexed to the annexing city.
   (d) This section applies only to the City of Cupertino.
   56749.  (a) The commission shall not approve or conditionally
approve a change of organization or reorganization that would result
in the annexation to a city of territory that is within a farmland
security zone created pursuant to Article 7 (commencing with Section
51296) of Chapter 7 of Division 1.  However, this subdivision shall
not apply under any of the following circumstances:
   (1) If the farmland security zone is located within a designated,
delineated area that has been approved by the voters as a limit for
existing and future urban facilities, utilities, and services.
   (2) If annexation of a parcel or a portion of a parcel is
necessary for the location of a public improvement, as defined in
Section 51290.5, except as provided in subdivision (f) or (g) of
Section 51296.
   (3) If the landowner consents to the annexation.
   (b) This section shall not apply during the three-year period
preceding the termination of a farmland security zone contract under
Article 7 (commencing with Section 51296) of Chapter 7 of Division 1.

   56750.  Notwithstanding Sections 56300 and 56301, the commission
shall not disapprove a change of organization or reorganization where
the reason for disapproval is that the farmland security zone is
excluded from the affected territory.
   56751.  (a) Upon receipt by the commission of a proposed change of
organization or reorganization, except a special reorganization,
that includes the detachment of territory from any city, the
commission shall place the proposal on the agenda for the next
commission meeting for information purposes only and shall transmit a
copy of the proposal to any city from which the detachment of
territory is requested.
   (b) No later than 60 days after the date that the proposal is on
the commission's meeting agenda in accordance with subsection (a), an
affected city may adopt and transmit to the commission a resolution
requesting termination of the proceedings.
   (c) If an affected city has adopted and transmitted to the
commission a resolution requesting termination of proceedings within
the time period prescribed by this section, then the commission shall
terminate the proceedings upon receipt of the resolution from the
city.
   56752.  If the proposal would result in the annexation to a city
of land that is subject to a contract executed pursuant to the
Williamson Act (Chapter 7 (commencing with Section 51200) of Division
1), then the resolution shall state whether the city shall succeed
to the contract pursuant to Section 51243 or whether the city intends
to exercise its option to not succeed to the contract pursuant to
Section 51243.5.
   56753.  The executive officer shall give mailed notice of any
hearing by the commission, as provided in Sections 56155 to 56157,
inclusive, by mailing notice of the hearing to the Director of
Conservation if the proposal would result in the annexation to a city
of land that is subject to a contract executed pursuant to the
Williamson Act (Chapter 7 (commencing with Section 51200) of Division
1).
   56753.5.  Within 10 days after receiving a proposal that would
result in the annexation to a city of land that is subject to a
contract executed pursuant to the Williamson Act (Chapter 7
(commencing with Section 51200) of Division 1), the executive officer
shall notify the Director of Conservation of the proposal.  The
notice shall include the contract number, the date of the contract's
execution, and a copy of any protest that the city had filed pursuant
to Section 51243.5.
   56754.  If a change of organization or reorganization would result
in the annexation to a city of land that is subject to a contract
executed pursuant to the Williamson Act (Chapter 7 (commencing with
Section 51200) of Division 1), the commission shall determine one of
the following:
   (a) That the city shall succeed to the rights, duties, and powers
of the county pursuant to Section 51243, or
   (b) That the city may exercise its option to not succeed to the
rights, duties, and powers of the county pursuant to Section 51243.5.

   56755.  Prior to submitting a resolution of application for the
annexation of territory described in Section 56375.3 to the
commission, the legislative body adopting the resolution shall
conduct a public hearing on the resolution.  Notice of the hearing
shall be published pursuant to Sections 56153 and 56154.  At the
hearing, any landowner shall be given an opportunity to present his
or her views on the resolution.
   56756.  The clerk of the legislative body adopting a resolution of
application shall file a certified copy of that resolution with the
executive officer.
   56757.  (a) The commission shall not review a reorganization that
includes an annexation to any city in Santa Clara County of
unincorporated territory that is within the urban service area of the
city if the reorganization is initiated by resolution of the
legislative body of the city.
   (b) The city council shall be the conducting authority for the
reorganization and the proceedings for the reorganization shall be
initiated and conducted as nearly as may be practicable in accordance
with Part 4 (commencing with Section 57000).
   (c) The city council, in adopting the resolution approving the
reorganization, shall make all of the following findings:
   (1) That the unincorporated territory is within the urban service
area of the city as adopted by the commission.
   (2) That the county surveyor has determined the boundaries of the
proposal to be definite and certain, and in compliance with the road
annexation policies of the commission.  The city shall reimburse the
county for the actual costs incurred by the county surveyor in making
this determination.
   (3) That the proposal does not split lines of assessment or
ownership.
   (4) That the proposal does not create islands or areas in which it
would be difficult to provide municipal services.
   (5) That the proposal is consistent with the adopted general plan
of the city.
   (6) That the territory is contiguous to existing city limits.
   (7) That the city has complied with all conditions imposed by the
commission for inclusion of the territory in the urban service area
of the city.
   (d) All reorganizations which involve territory for which the land
use designation in the general plan of the city has changed from the
time that the urban service area of the city was last adopted by the
commission, and which are processed by a city pursuant to this
section shall be subject to an appeal to the commission upon
submission of a petition of appeal, signed by at least 50 registered
voters in the county.
   (e) An appeal to the commission may also be made by submission of
a resolution of appeal adopted by the legislative body of a special
district solely for the purpose of determining whether some or all of
the territory contained in the reorganization proposal should also
be annexed or detached from that special district.
   (f) Any petition submitted under subdivision (d) or resolution
submitted under subdivision (e) shall be submitted to the executive
officer within 15 days of the adoption by the city council of the
resolution approving the annexation.  The executive officer shall
schedule the hearing for the next regular meeting of the commission
as is practicable.  The commission may set a reasonable appeal fee.
   56758.  If the proposal includes the annexation of inhabited
territory to a city with over 100,000 residents which is located in a
county with a population of over 4,000,000, no proceedings shall be
initiated either by petition or by application of a legislative body
unless the proposal is consistent with the sphere of influence of any
affected city or affected district.
   56759.  In any order approving a proposal for an annexation or a
reorganization that includes annexation of inhabited territory to a
city when the assessed value of land within that territory proposed
to be annexed equals one-half, or  more, of that within the city, as
shown by the last equalized assessment rolls, or the number of
registered voters of the territory equals one-half, or more, of the
number of registered voters within the city, as shown by the county
register  of voters, the commission shall require that an election
called upon the question of confirming the annexation or
reorganization shall also be called, held, and conducted within the
territory of the city to which territory is proposed to be annexed.

      Article 4.  Initiation by Petition

   56760.  (a) Before circulating any petition for change of
organization for a city with a population of more than 100,000 which
is located in a county with a population of over 4,000,000, the
proponents shall publish a notice of intention which shall include a
written statement not to exceed 500 words in length, setting forth
the reasons for the proposal.  The notice shall be published pursuant
to Section 56153.  The notice shall be signed by at least one, but
not more than three, chief petitioners and shall be in substantially
the following form:

      Notice of Intent to Circulate Petition

   Notice is hereby given of the intention to circulate a petition
proposing to ____ territory to the City of ____.
   The reasons for the proposal are:

   (b) Within five days after the date of publication, the chief
petitioners shall file with the clerk of the city and the executive
officer a copy of the notice together with an affidavit made by a
representative of the newspaper in which the notice was published
certifying to the fact of publication.
   (c) After the filing required pursuant to subdivision (b), the
petition may be circulated for signatures.
   56764.  A petition for the incorporation of a city shall be signed
by either of the following:
   (a) Not less than 25 percent of the registered voters residing in
the area to be incorporated, as determined by the commission pursuant
to subdivision  (f) of Section 56375.
   (b) Not less than 25 percent of the number of owners of land
within the territory proposed to be incorporated who also own not
less than 25 percent of the assessed value of land within the
territory proposed to be incorporated, as shown on the last equalized
assessment roll of the county.
   56765.  A petition for the disincorporation of a city shall be
signed by not less than 25 percent of the registered voters residing
in the city proposed to be disincorporated as shown on the county
register of voters.
   56766.  A petition for the consolidation of two or more cities
shall be signed by not less than 5 percent of the registered voters
of each affected city as shown on the county register of voters.
   56767.  (a) Except as otherwise provided in subdivision (b), a
petition for annexation of territory to a city shall be signed by
either of the following:
   (1) Not less than 5 percent of the number of registered voters
residing within the territory proposed to be annexed as shown on the
county register of voters.
   (2) Not less than 5 percent of the number of owners of land within
the territory proposed to be annexed who also own 5 percent of the
assessed value of land within the territory as shown on the last
equalized assessment roll.
   (b) Notwithstanding subdivision (a), a petition for the annexation
of territory to a city with more than 100,000 residents which is
located in a county with a population of over 4,000,000, shall be
signed by either of the following:
   (1) Not less than 5 percent of the number of registered voters
residing within the territory proposed to be annexed as shown on the
county register of voters.
   (2) Not less than 5 percent of the number of owners of land within
the territory proposed to be annexed who also own 5 percent of the
assessed value of land within the territory as shown on the last
equalized assessment roll.
   56768.  A petition for detachment of territory from a city shall
be signed by either of the following:
   (a) Not less than 25 percent of the registered voters residing
within the territory proposed to be detached, as shown on the county
register of voters.
   (b) Not less than 25 percent of the number of owners of land
within the territory proposed to be detached who also own 25 percent
of the assessed value of land within the territory, as shown on the
last equalized assessment roll.
  SEC. 111.  Chapter 3 (commencing with Section 56750) of Part 3 of
Division 3 of Title 5 of the Government Code is repealed.
  SEC. 112.  The heading of Chapter 4 (commencing with Section 56800)
of Part 3 of Division 3 of Title 5 of the Government Code is amended
to read:

      CHAPTER 4.  FISCAL PROVISIONS

  SEC. 113.  A heading is added as Article 1 (commencing with Section
56800) to Chapter 4 of Part 3 of Division 3 of Title 5 of the
Government Code, to read:

      Article 1.  Comprehensive Fiscal Analysis

  SEC. 114.  Section 56800 of the Government Code is amended and
renumbered to read:
   56654.  (a) A proposal for a change of organization or a
reorganization may be made by the adoption of a resolution of
application by the legislative body of an affected local agency.
   (b) At least 20 days before the adoption of the resolution, the
legislative body may give mailed notice of its intention to adopt a
resolution of application to the commission and to each interested
agency and each subject agency.  The notice shall generally describe
the proposal and the affected territory.
   (c) Except for the provisions regarding signers and signatures, a
resolution of application shall contain all of the matters specified
for a petition in Section 56700 and shall be submitted with a plan
for services prepared pursuant to Section 56653.
  SEC. 115.  Section 56800 is added to the Government Code, to read:

   56800.  For any proposal which includes an incorporation, the
executive officer shall prepare, or cause to be prepared by contract,
a comprehensive fiscal analysis.  This analysis shall become part of
the report required pursuant to Section 56665.  Data used for the
analysis shall be from the most recent fiscal year for which data are
available, provided that the data are not more than one fiscal year
old.  When data from the most recent fiscal year are unavailable, the
executive officer may request supplemental data.  The analysis shall
review and document each of the following:
   (a) The costs to the proposed city of providing public services
and facilities during the three fiscal years following incorporation.

   (b) The revenues of the proposed city during the three fiscal
years following incorporation.
   (c) The effects on the costs and revenues of any affected local
agency during the three fiscal years of incorporation.
   (d) Any other information and analysis needed to make the findings
required by Section 56720.
  SEC. 115.5.  Section 56800 is added to the Government Code, to
read:
   56800.  For any proposal which includes an incorporation, the
executive officer shall prepare, or cause to be prepared by contract,
a comprehensive fiscal analysis.  This analysis shall become part of
the report required pursuant to Section 56665.  Data used for the
analysis shall be from the most recent fiscal year for which data are
available preceding the issuance of the certificate of filing.  When
data from the most recent fiscal year are unavailable,  the analysis
shall document the source and methodology of the data used.  The
analysis shall review and document each of the following:
   (a) The costs to the proposed city of providing public services
and facilities during the three fiscal years following incorporation
with the following criteria:
   (1) When determining costs, the executive officer shall include
all direct and indirect costs associated with the current provision
of existing services in the affected territory.  These costs should
reflect the actual or estimated costs at which the existing level of
service could be contracted by the proposed city following an
incorporation, if the city elects to do so, and shall include any
general fund expenditures used to support or subsidize a
fee-supported service where the full costs of providing the service
are not fully recovered through fees.  The executive officer shall
also identify which of these costs shall be transferred to the new
city that result in an administrative cost reduction to other
agencies.  In the analysis, the executive officer shall also review
how the costs of any existing services compare to the costs of
services provided in cities with similar populations and similar
geographic size that provide a similar level and range of services
and shall make a reasonable determination of the costs expected to be
borne by the newly incorporated city.
   (2) When determining costs, the executive officer shall also
include all direct and indirect costs, of any public services that
are proposed to be assumed by the new city and that are provided by
state agencies in the area proposed to be incorporated.
   (b) The revenues of the proposed city during the three fiscal
years following incorporation.
   (c) The effects on the costs and revenues of any affected local
agency during the three fiscal years of incorporation.
   (d) Any other information and analysis needed to make the findings
required by Section 56720.
  SEC. 116.  Section 56800.3 of the Government Code is repealed.
  SEC. 117.  Section 56801 of the Government Code is repealed.
  SEC. 118.  Section 56801 is added to the Government Code, to read:

   56801.  (a) For any proposal that includes an incorporation, the
executive officer shall, at the request of an interested party, which
request is submitted pursuant to subdivision (b), and prior to
issuing his or her report and recommendation pursuant to Section
56665, request the Controller to review the comprehensive fiscal
analysis prepared pursuant to Section 56800.  The request by an
interested party shall specify in writing any element of the
comprehensive fiscal analysis that the Controller is requested to
review and the reasons the Controller is requested to review each
element.
   (b) The commission may adopt written procedures for the
acceptance, referral, and payment for a request for the Controller's
review, which shall include setting a time period during which an
interested party is permitted to submit a request pursuant to
subdivision (a).  The time period for accepting a request shall not
be less than 30 days following notice given in the same manner as
specified in Section 56153.
   (c) Within 45 days of receiving the analysis, the Controller shall
issue a report to the executive officer regarding the accuracy and
reliability of the information, methodologies, and documentation used
in the analysis.  The times within which the executive officer or
commission is required to act pursuant to this chapter shall be
tolled for the time required by the Controller for completion of the
report.  The executive officer shall include the results of the
Controller's report into his or her own report and recommendation
issued pursuant to Section 56665.
   (d) Notwithstanding Sections 56378 and 56386, the Controller may
charge the commission for the actual costs incurred pursuant to this
section.  The commission may recover these costs by charging the
person who requested the Controller's review.
  SEC. 119.  Section 56802 of the Government Code is repealed.
  SEC. 120.  Section 56802 is added to the Government Code, to read:

   56802.  (a) For any proposal for incorporation of the territory
within the Mountain House Community Services District, San Joaquin
County shall provide the required funds to those petitioners filing
the incorporation application for all costs involved in filing the
application for incorporation pursuant to this division, including
the preparation of the comprehensive fiscal analysis pursuant to
Section 56800.
   (b) The funds provided by the county pursuant to this section
shall not be construed to be a gift of public funds and may only be
granted to a quasi-public or nonprofit organization formed for the
purpose of pursuing incorporation of the Mountain House area.
   (c) San Joaquin County shall provide the funds required in
subdivision (a) only one time, upon the first filing of application
for incorporation.
  SEC. 121.  Section 56803 is added to the Government Code, to read:

   56803.  If the commission approves a proposal which includes the
incorporation of a city, the resolution making determinations shall
accept or reject each of the findings and recommendations made in the
executive officer's report prepared pursuant to Section 56665, and
the fiscal analysis prepared pursuant to Section 56800.  If the
commission rejects a finding or recommendation, the resolution making
determinations shall include findings by the commission which
present the basis for any rejection.
  SEC. 122.  Article 2 (commencing with Section 56810) is added to
Chapter 4 of Part 3 of Division 3 of Title 5 of the Government Code,
to read:

      Article 2.  Property Tax Exchange

   56810.  (a) (1) If the proposal includes the incorporation of a
city, as defined in Section 56043, the commission shall determine the
amount of property tax revenue to be exchanged by the affected local
agency pursuant to this section and Section 56815.
   (2) If the proposal includes the formation of a district, as
defined in Section 2215 of the Revenue and Taxation Code, the
commission shall determine the amount of property tax to be exchanged
by the affected local agency pursuant to this section.
   (b) The commission shall notify the county auditor of the proposal
and the services which the new jurisdiction proposes to assume
within the area, and identify for the auditor the existing service
providers within the area subject to the proposal.
   (c) If the proposal would not transfer all of an affected agency's
service responsibilities to the proposed city or district, the
commission and the county auditor shall do all of the following:
   (1) The county auditor shall determine the proportion that the
amount of property tax revenue derived by each affected local agency
pursuant to subdivision (b) of Section 93 of the Revenue and Taxation
Code bears to the total amount of revenue from all sources,
available for general purposes, received by each affected local
agency in the prior fiscal year.  For purposes of making this
determination and the determination required by paragraph (3), "total
amount of revenue from all sources available for general purposes"
means the total amount of revenue which an affected local agency may
use on a discretionary basis for any purpose and does not include any
of the following:
   (A) Revenue which, by statute, is required to be used for a
specific purpose.
   (B) Revenue from fees, charges, or assessments which are levied to
specifically offset the cost of particular services and do not
exceed the cost reasonably borne in providing these services.
   (C) Revenue received from the federal government which is required
to be used for a specific purpose.
   (2) The commission shall determine, based on information submitted
by each affected local agency, an amount equal to the total net cost
to each affected local agency during the prior fiscal year of
providing those services which the new jurisdiction will assume
within the area subject to the proposal.  For purposes of this
paragraph, "total net cost" means the total direct and indirect costs
which were funded by general purpose revenues of the affected local
agency and excludes any portion of the total cost which was funded by
any revenues of that agency which are specified in subparagraphs
(A), (B), and (C) of paragraph (1).
   (3) The commission shall multiply the amount determined pursuant
to paragraph (2) for each affected local agency by the corresponding
proportion determined pursuant to paragraph (1) to derive the amount
of property tax revenue used to provide services by each affected
local agency during the prior fiscal year within the area subject to
the proposal.  The county auditor shall adjust the amount described
in the previous sentence by the annual tax increment according to the
procedures set forth in Chapter 6 (commencing with Section 95) of
Part 0.5 of Division 1 of the Revenue and Taxation Code, to the
fiscal year in which the new city or district receives its initial
allocation of property taxes.
   (4) For purposes of this subdivision, in any county in which,
prior to the adoption of Article XIIIA of the California
Constitution, and continuing thereafter, a separate fund or funds
were established consisting of revenues derived from the
unincorporated area of the county and from which fund or funds
services rendered in the unincorporated area have been paid, the
amount of property tax revenues derived pursuant to paragraph (3),
may, at the discretion of the commission, be transferred to the
proposed city over a period not to exceed 12 fiscal years following
its incorporation.  In determining whether the transfer of the amount
of property tax revenues determined pursuant to paragraph (3) shall
occur entirely within the fiscal year immediately following the
incorporation of the proposed city or shall be phased in over a
period not to exceed 12 full fiscal years following the
incorporation, the commission shall consider each of the following:
   (A) The total amount of revenue from all sources available to the
proposed city.
   (B) The fiscal impact of the proposed transfer on the transferring
agency.
   (C) Any other relevant facts which interested parties to the
exchange may present to the commission in written form.
   The decision of the commission shall be supported by written
findings setting forth the basis for its decision.
   (d) If the proposal would transfer all of an affected agency's
service responsibilities to the proposed city or district, the
commission shall request the auditor to determine the property tax
revenue generated for the affected service providers by tax rate
area, or portion thereof, and transmit that information to the
commission.
   (e) The executive officer shall notify the auditor of the amount
determined pursuant to paragraph (3) of subdivision (c) or
subdivision (d), as the case may be, and, where applicable, the
period of time within which and the procedure by which the transfer
of property tax revenues will be effected pursuant to paragraph (4)
of subdivision (c), at the time the executive officer records a
certificate of completion pursuant to Section 57203 for any proposal
described in subdivision (a), and the auditor shall transfer that
amount to the new jurisdiction.
   (f) The amendments to this section enacted during the 1985-86
Regular Session of the Legislature shall apply to any proposal
described in subdivision (a) for which a certificate of completion is
recorded with the county recorder on or after January 1, 1987.
   (g) For purposes of this section, "prior fiscal year" means the
most recent fiscal year for which data on actual direct and indirect
costs and revenues needed to perform the calculations required by
this section are available preceding the fiscal year in which the
commission approves by resolution the city's proposal to incorporate
or the district's proposal to form.
   (h) An action brought by a city or district to contest any
determinations of the county auditor or the commission with regard to
the amount of property tax revenue to be exchanged by the affected
local agency pursuant to this section shall be commenced within three
years of the effective date of the city's incorporation or the
district's formation.  These actions may be brought by any city that
incorporated or by any district that formed on or after January 1,
1986.
   (i) This section applies to any city that incorporated or district
that formed on or after January 1, 1986.
   (j) The calculations and procedures specified in this section
shall be made prior to and shall be incorporated into the
calculations specified in Section 56815.
   56811.  If a proposal includes the formation of a district, the
commission shall determine the appropriations limit of the district
in accordance with Section 7902.7 and Article XIIIB of the California
Constitution.
   56812.  (a) If a proposal includes the incorporation of a city,
the commission shall determine the provisional appropriations limit
of the city in accordance with Section 7902.7 and Article XIIIB of
the California Constitution.  The commission shall determine the
provisional appropriations limit of the city in the following manner:

   (1) Estimate the amount of revenue anticipated to be received by
the city from the proceeds of taxes for the first full fiscal year of
operation.
   (2) Adjust the amount determined in paragraph (1) for the
estimated change in the cost of living and population in the next
full fiscal year of operation and such other changes as may be
required or permitted by Article XIIIB of the California
Constitution.
   (b) The governing body of the city shall determine the proposed
permanent appropriations limit of the city to be submitted to the
voters in the following manner:
   (1) Determine the amount of revenue actually received by the city
from the proceeds of taxes for the first full fiscal year of
operation.
   (2) Adjust the amount determined in paragraph (1) for the
estimated change in the cost of living and population in the next
full fiscal year of operation and such other changes as may be
required or permitted by Article XIIIB of the California
Constitution.
   (c) The permanent appropriations limit of the city shall be set at
the first municipal election which is held following the first full
fiscal year of operation and shall not be considered to be a change
in the appropriations limit of the city pursuant to Section 4 of
Article XIIIB of the California Constitution.
  SEC. 123.  Article 3 (commencing with Section 56815) is added to
Chapter 4 of Part 3 of Division 3 of Title 5 of the Government Code,
to read:

      Article 3.  Revenue Neutrality

   56815.  (a) It is the intent of the Legislature that any proposal
that includes an incorporation should result in a similar exchange of
both revenue and responsibility for service delivery among the
county, the proposed city, and other subject agencies.  It is the
further intent of the Legislature that an incorporation should not
occur primarily for financial reasons.
   (b) The commission shall not approve a proposal that includes an
incorporation unless it finds that the following two quantities are
substantially equal:
   (1) Revenues currently received by the local agency transferring
the affected territory which, but for the operation of this section,
would accrue to the local agency receiving the affected territory.
   (2) Expenditures currently made by the local agency transferring
the affected territory for those services which will be assumed by
the local agency receiving the affected territory.
   (c) Notwithstanding subdivision (b), the commission may approve a
proposal that includes an incorporation if it finds either of the
following:
   (1) The county and all of the subject agencies agree to the
proposed transfer.
   (2) The negative fiscal effect has been adequately mitigated by
tax sharing agreements, lump-sum payments, payments over a fixed
period of time, or any other terms and conditions pursuant to Section
56886.
   (d) Nothing in this section is intended to change the distribution
of growth on the revenues within the affected territory unless
otherwise provided in the agreement or agreements specified in
paragraph (2) of subdivision (c).
   (e) Any terms and conditions that mitigate the negative fiscal
effect of a proposal that contains an incorporation shall be included
in the commission resolution making determinations adopted pursuant
to Section 56880 and the terms and conditions specified in the
questions pursuant to Section 57134.
  SEC. 123.5.  Section 56815 is added to the Government Code, to
read:
   56815.  (a) It is the intent of the Legislature that any proposal
that includes an incorporation should result in a similar exchange of
both revenue and responsibility for service delivery among the
county, the proposed city, and other subject agencies.  It is the
further intent of the Legislature that an incorporation should not
occur primarily for financial reasons.
   (b) The commission shall not approve a proposal that includes an
incorporation unless it finds that the following two quantities are
substantially equal:
   (1) Revenues currently received by the local agency transferring
the affected territory that, but for the operation of this section,
would accrue to the local agency receiving the affected territory.
   (2) Expenditures, including direct and indirect expenditures,
currently made by the local agency transferring the affected
territory for those services that will be assumed by the local agency
receiving the affected territory.
   (c) Notwithstanding subdivision (b), the commission may approve a
proposal that includes an incorporation if it finds either of the
following:
   (1) The county and all of the subject agencies agree to the
proposed transfer.
   (2) The negative fiscal effect has been adequately mitigated by
tax sharing agreements, lump-sum payments, payments over a fixed
period of time, or any other terms and conditions pursuant to Section
56886.
   (d) Nothing in this section is intended to change the distribution
of growth on the revenues within the affected territory unless
otherwise provided in the agreement or agreements specified in
paragraph (2) of subdivision (c).
   (e) Any terms and conditions that mitigate the negative fiscal
effect of a proposal that contains an incorporation shall be included
in the commission resolution making determinations adopted pursuant
to Section 56880 and the terms and conditions specified in the
questions pursuant to Section 57134.
  SEC. 123.7.  Section 56815 is added to the Government Code, to
read:
   56815.  (a) It is the intent of the Legislature that any proposal
that includes an incorporation should result in a similar exchange of
both revenue and responsibility for service delivery among the
county, the proposed city, and other subject agencies.  It is the
further intent of the Legislature that an incorporation should not
occur primarily for financial reasons.
   (b) The commission shall not approve a proposal that includes an
incorporation unless it finds that the following two quantities are
substantially equal:
   (1) Revenues currently received by the local agency transferring
the affected territory that, but for the operation of this section,
would accrue to the local agency receiving the affected territory.
   (2) Expenditures, including direct and indirect expenditures,
currently made by the local agency transferring the affected
territory for those services that will be assumed by the local agency
receiving the affected territory.
   (c) Notwithstanding subdivision (b), the commission may approve a
proposal that includes an incorporation if it finds either of the
following:
   (1) The county and all of the subject agencies agree to the
proposed transfer.
   (2) The negative fiscal effect has been adequately mitigated by
tax sharing agreements, lump-sum payments, payments over a fixed
period of time, or any other terms and conditions pursuant to Section
56886.
   (d) Nothing in this section is intended to change the distribution
of growth on the revenues within the affected territory unless
otherwise provided in the agreement or agreements specified in
paragraph (2) of subdivision (c).
   (e) Any terms and conditions that mitigate the negative fiscal
effect of a proposal that contains an incorporation shall be included
in the commission resolution making determinations adopted pursuant
to Section 56880 and the terms and conditions specified in the
questions pursuant to Section 57134.
   (f) For any incorporation approved by the voters on or after
January 1, 2001, voter approval of terms and conditions, including,
but not limited to, fiscal mitigation measures, which terms and
conditions were found by the commission to constitute an agreement by
the proponents of incorporation and the affected agency, shall
constitute a binding contractual obligation of the affected new city
and each party to the agreement to comply with those terms and
conditions.
  SEC. 124.  Section 56815.2 is added to the Government Code, to
read:
   56815.2.  By July 1, 2001, the Governor's Office of Planning and
Research, in consultation with the Controller, shall convene a task
force composed of representatives of cities, counties, special
districts, and local agency formation commissions, as nominated by
their statewide organizations and associations, with expertise in
local government fiscal issues for the purpose of creating statewide
guidelines for the incorporation process.
                       The guidelines shall be completed by January
1, 2002, by the Office of Planning and Research and shall serve as
minimum statewide guidelines for the incorporation process.  The
guidelines shall include, but not be limited to, information to
assist incorporation proponents to understand the incorporation
process, its timelines, and likely costs.  They shall also provide
direction to affected agencies regarding the type of information that
should be included in the comprehensive fiscal analysis of an
incorporation, as well as suggestions for alternative ways to achieve
fiscally neutral incorporations.  The guidelines shall be advisory
to the commissions in the review of incorporation proposals.
  SEC. 125.  A heading is added as Chapter 5 (commencing with Section
56820) to Part 3 of Division 3 of Title 5 of the Government Code, to
read:

      CHAPTER 5.  PROCEEDINGS FOR SPECIAL DISTRICTS

  SEC. 126.  Article 1 (commencing with Section 56820) is added to
Chapter 5 of Part 3 of Division 3 of the Government Code, to read:

      Article 1.  Representation and Functions

   56820.  The commission may take proceedings pursuant to this
chapter for the adoption, amendment, or repeal of regulations
affecting the functions and services of special districts within the
county.  Those proceedings may be initiated either by the commission
or by independent special districts within the county.  If the
commission has representation from special districts prior to January
1, 2001, and if the commission has previously adopted regulations
limiting the exercise of powers by its special districts as a
condition of that representation, those regulations shall be repealed
upon the request of a majority of independent special districts
within the county.
   56820.5.  The commission may adopt, amend, or repeal regulations
affecting the functions and services of special districts within the
county.  The regulations shall designate the special districts, by
type and by principal act, to which they apply and the regulations
shall not apply to, or affect the functions and services of, any
special districts not so designated.  The regulations may do any of
the following:
   (a) Classify the various types of service which customarily are,
or can be, provided within a single function of a special district.
A class may be based upon the type of service, the purpose or use of
the service, the facilities used to provide the service, the type of
consumers or users of the service, the extent  of territory provided
with the service, and any other factors which, in the opinion of the
commission, are necessary or convenient to group persons, properties,
or activities into a class having common characteristics distinct
from those of other classes.
   (b) Require existing districts to file written statements with the
commission specifying the functions or classes of service provided
by those districts.
   (c) Establish the nature, location, and extent of any functions or
classes of  service provided by existing districts.
   (d) Determine that, except as otherwise authorized by the
regulations, no new or different function or class of service shall
be provided by any existing district.
   The regulations shall not apply to the extension or enlargement,
within the boundaries of an existing special district, of any
function or service which the commission, pursuant to this section,
has established is currently being provided by that special district.

   56820.7.  In any county where regulations have been adopted, an
application for  the formation of a special district shall set forth
the functions and services proposed to be provided by the district.
If, in the opinion of the commission, approval of the application
will necessitate adoption of any new regulations or the amendment or
repeal of any existing regulations, the commission may condition
approval of the application upon the adoption, amendment, or repeal
of the regulations and shall initiate and conduct proceedings
pursuant to this chapter for the adoption, amendment, or repeal of
those regulations.
   56821.  Either the commission or the legislative body of any
independent special district within a county may adopt a resolution
initiating proceedings as follows:
   (a) It may propose representation of special districts upon the
commission.
   (b) It may propose the adoption, amendment, or repeal of
regulations affecting the functions and services of special
districts, in which case it shall request that the commission do
either of the following:
   (1) Consider the proposal without reference to a special district
advisory committee, in which case the resolution shall contain the
text of the regulations proposed to be adopted, amended, or repealed.

   (2) Refer the proposal to a special district advisory committee
for study, report, and recommendation, in which case the resolution
shall generally describe the nature of the regulations proposed to be
amended, adopted, or repealed and, if then available, shall refer to
a text on file with the clerk of the district for a detailed
description of the regulations.
   56821.1.  If the commission adopts a resolution pursuant to
subdivision (a) of Section 56821, the executive officer shall
immediately call a meeting of the independent special district
selection committee referred to in Section 56332.  The meeting shall
be held not less than 15, or more than 35, days from the adoption of
the resolution by the commission.  The independent special district
selection committee shall meet at the time and place designated by
the executive officer and shall consider the resolution adopted by
the commission.  By majority vote of those district representatives
voting on the issue, the selection committee shall either approve or
disapprove the resolution adopted by the commission.  If the
selection committee approves the resolution adopted by the
commission, it shall immediately inform the executive officer of that
action, and the commission at its next meeting shall adopt a
resolution of intention pursuant to Section 56822.  If the selection
committee disapproves the resolution adopted by the commission, it
shall immediately inform the executive officer of this action and all
further proceedings under this chapter shall cease.
   56821.3.  If an independent special district adopts a resolution
pursuant to subdivision (a) of Section 56821, it shall immediately
forward a copy of the resolution to the executive officer.  Upon
receipt of those resolutions from a majority of independent special
districts within a county, adopted by the districts within one year
from the date that the first resolution was adopted, the commission,
at its next regular meeting, shall adopt a resolution of intention
pursuant to Section 56822.
   56821.5.  A certified copy of any resolution which has been
adopted by an independent special district pursuant to subdivision
(b) of Section 56821 and a copy of the text, if any, of proposed
regulations referred to in the resolution shall be filed with the
executive officer.  If a resolution, or substantially identical
resolution, has been filed by a majority of independent special
districts within the county, then, not later than 35 days after the
filing, the commission shall adopt a resolution of intention in
accordance with the filed resolution or resolutions.
   56821.7.  Minor changes in any existing regulation affecting
special districts may be ordered by the commission, without adoption
of a resolution of intention, notice, and hearing, or reference to a
special district advisory committee, if the commission makes a
determination that those changes will not substantially affect the
functions and services of any special district subject to those
regulations and that determination is concurred in by both of the
commission members appointed to represent the special districts.
   56822.  Whenever the commission, or the independent special
districts, as the  case may be, have complied with the applicable
provisions of Sections 56821, 56821.1, 56821.3, and 56821.5, the
commission shall adopt a resolution of intention pursuant to this
section.  The resolution of intention shall do all of the following:

   (a) State whether the proceedings are initiated by the commission
or by an independent special district or districts, in which case,
the names of those districts shall be set forth.
   (b) If the resolution of intention proposes only the adoption,
amendment, or repeal of regulations affecting the functions and
services of special districts, it shall state that the commission
proposes either of the following:
   (1) To consider the proposal without reference to a special
district advisory committee, in which case the resolution shall
contain the text of the regulations proposed to be adopted, amended,
or repealed.
   (2) To refer the proposal to a special district advisory committee
for study, report, and recommendation, in which case the resolution
shall generally describe the nature of the regulations proposed to be
amended, adopted, or repealed and, if then available, shall refer to
a text on file with the executive officer for a detailed description
of the regulations.
   In addition, the resolution of intention adopted pursuant to this
subdivision shall also fix a time, not less than 15 or more than 35
days after the adoption of the resolution of intention, and the place
of hearing by the commission on the question of whether the proposal
made by the resolution should be disapproved, approved, and ordered
without reference to a special district advisory committee, or
referred to a special district advisory committee for study, report,
and recommendation to the commission.
   (c) If the resolution of intention proposes representation of
special districts on the commission, it shall state that the
commission proposes to refer the proposal to a special district
advisory committee and the commission shall immediately order the
proposal referred to that committee pursuant to Section 56823.
   56822.3.  If a hearing is called pursuant to subdivision (b) of
Section 56822, the executive officer shall give notice of the hearing
by publication, as provided in Sections 56153 and 56154, by posting,
as provided in Sections 56158 and 56159, and by mailing to the clerk
of the county and each local agency within the county, as provided
in Sections 56155, 56156, and 56157.
   56822.5.  The hearing referred to in Section 56822.3 shall be held
by the commission at the time and place specified or to which the
hearing may be continued.  After the conclusion of the hearing, the
commission shall adopt a resolution disapproving the proposal made by
the resolution of intention, approving and ordering the proposal
without reference to a special district advisory committee, or
ordering the proposal referred to a special district advisory
committee for study, report, and recommendation.
   56823.  If the commission orders a proposal referred to a special
district advisory committee for study, report, and recommendation,
the appointment of, and proceedings by, the advisory committee shall
be made and taken substantially in accordance with the provisions of
Chapter 6 (commencing with Section 56826), pertaining to
reorganization committees, except that the advisory committee shall
not be terminated until after the commission acts upon the report and
recommendation of the advisory committee.  When applied to
proceedings taken pursuant to this chapter:
   (a) "Plan of reorganization" means a plan containing the text of
regulations affecting the functions and services of special
districts.
   (b) "Proposal of reorganization," "reorganization," or "change of
organization" means a proposal made pursuant to this chapter.
   (c) "Reorganization committee" means the special district advisory
committee.
   (d) "Subject district" means an independent special district
affected by a proposal made pursuant to this chapter.
   If the commission is of the opinion that special districts, other
than independent special districts, may be affected by the proposal,
then, in addition to the appointment of voting members to the
advisory committee to represent independent special districts, the
commission may authorize the legislative bodies of special districts,
other than independent special districts, to appoint nonvoting
members to the advisory committee.  Any nonvoting member shall have
all of the rights of a voting member except the right to vote.
   56824.  Where a special district advisory committee consists of
voting members representing more than five independent special
districts, the advisory committee may appoint an executive committee
to undertake all or part of the study and may authorize the executive
committee to prepare a tentative report and recommendation for
submission to and approval by the full advisory committee.  The
executive committee shall consist of the number of voting members as
the advisory committee may determine.  If the commission authorizes
the appointment of nonvoting members to the advisory committee, those
nonvoting members may appoint members to the executive committee in
numbers not exceeding those appointed by the voting members and any
nonvoting member appointed to the executive committee shall have all
of the rights of a voting member on the committee, except the right
to vote.
   Upon completion of the studies of the executive committee, the
executive committee shall report to the full advisory committee and
submit any tentative report and recommendation prepared by the
executive committee.  Thereafter, the advisory committee may reject
any tentative report and recommendation submitted, may adopt any
tentative report and recommendation submitted, either as submitted by
the executive committee or as changed by the full advisory
committee, or the advisory committee may prepare its own report and
recommendation.
   56824.1.  Not later than 35 days after the filing with the
executive officer of the report and recommendation of a special
district advisory committee, the commission shall take one of the
following actions:
   (a) If the report concerns only the adoption, amendment, or repeal
of regulations affecting the functions and services of special
districts, the commission may do either of the following:
   (1) Disapprove the report without further notice and hearing.
   (2) Adopt a resolution of intention to hold a hearing on the
report pursuant to subdivision (c).
   (b) If the report concerns a request for special district
representation on the commission, the commission shall adopt a
resolution declaring its intention to approve the report and
recommendation.
   (c) A resolution of intention shall do all of the following:
   (1) Refer to the report and recommendation of the special district
advisory committee, generally describe the nature and contents of
the report and recommendation, and refer to the report and
recommendation on file with the executive officer for a detailed
description report and recommendation.
   (2) Declare the intention of the commission to approve the
recommendation and report, as filed or as those regulations may be
changed by the commission after notice and hearing.
   (3) Fix a time, not less than 15 days, or more than 35 days, after
the adoption of the resolution of intention, and the place of
hearing by the commission, on the question of whether the report and
recommendation filed by the special district advisory committee
should be approved, either as filed or as ordered changed by the
commission after notice and hearing.
   56824.3.  The executive officer shall give notice of the hearing
by publication, as provided in Sections 56153 and 56154, by posting,
as provided in Sections 56158 and 56159, and by mailing to the clerk
of the county and each local agency within the county, as provided in
Sections 56155, 56156, and 56157.
   56824.5.  The hearing shall be held by the commission at the time
and place specified or to which the hearing may be continued.  During
the course of the hearing, the commission may propose changes in the
report and recommendations.  Any proposed changes shall be referred,
for review, to the special district advisory committee, or if the
advisory committee has appointed an executive committee, to that
executive committee.  The advisory committee, or the executive
committee, shall have 60 days to report back to the commission.  If
no report is received by the commission within 60 days, the advisory
committee shall be deemed to have approved the proposed changes in
the report and recommendation.
   Within 30 days after the conclusion of the hearing, the commission
shall adopt a resolution approving the report and recommendation,
either as filed or as those regulations may be changed by the
commission.
   56824.7.  Any resolution approving the report and recommendation
of a special district advisory committee, either as filed or as
changed by the commission, shall order both of the following:
   (a) The adoption, amendment, or repeal of regulations, in
accordance with the recommendations of the approved report.
   (b) The chairperson of the commission to call and give notice of a
meeting of the independent special district selection committee to
be held within 15 days after the adoption of the resolution if
special district representatives on the commission are to be selected
pursuant to Section 56332.
  SEC. 127.  The heading of Chapter 5 (commencing with Section 56825)
of Part 3 of Division 3 of Title 5 of the Government Code is
repealed.
  SEC. 128.  A heading is added as Article 2 (commencing with Section
56825) to Chapter 5 of Part 3 of Division 3 of Title 5 of the
Government Code, to read:

      Article 2.  Reorganization

  SEC. 129.  Section 56826 of the Government Code is repealed.
  SEC. 130.  Section 56826 is added to the Government Code, to read:

   56826.  A reorganization or a plan of reorganization shall provide
for one or more changes of organization of any type for each of the
subject districts and may provide for the formation of one or more
new districts pursuant to the principal act or acts designated in the
reorganization or plan of reorganization and Section 56100.
  SEC. 131.  Section 56827 of the Government Code is repealed.
  SEC. 132.  Section 56827 is added to the Government Code, to read:

   56827.  (a) Except as provided in subdivision (b), upon the
presentation of any petition or applications making a proposal for a
reorganization, the commission may take proceedings pursuant to Part
3 (commencing with Section 56650) without referring the proposal to a
reorganization committee, as provided in this part.
   (b) The commission may refer to a reorganization committee any
incorporation proposal that includes, or may be modified to include,
any of the following changes of organization affecting an independent
special district:  consolidation, dissolution, formation, merger, or
establishment of a subsidiary district.
  SEC. 133.  Section 56827.5 of the Government Code is repealed.
  SEC. 134.  Section 56828 of the Government Code is repealed.
  SEC. 135.  Section 56828 is added to the Government Code, to read:

   56828.  Before any proposal for reorganization is referred to any
reorganization committee, the commission may provide for a public
hearing on the question of whether the proposal should be disapproved
or referred to a reorganization committee and set a time and place
for that hearing.
  SEC. 136.  Section 56828.5 of the Government Code is repealed.
  SEC. 137.  Section 56829 of the Government Code is repealed.
  SEC. 138.  Section 56829 is added to the Government Code, to read:

   56829.  The executive officer shall give notice of that hearing by
publication, as provided in Sections 56153 and 56154, and by
posting, as provided in Sections 56158 and 56159.
  SEC. 139.  Section 56830 of the Government Code is repealed.
  SEC. 140.  Section 56830 is added to the Government Code, to read:

   56830.  The executive officer shall also give mailed notice of any
hearing, as provided in Sections 56155 to 56157, inclusive, by
mailing notice of hearing to all of the following persons and
entities:
   (a) Each affected city and affected district.
   (b) The chief petitioners, if any.
   (c) Each person who has filed a written request for special notice
with the executive officer.
  SEC. 141.  Section 56831 of the Government Code is repealed.
  SEC. 142.  Section 56831 is added to the Government Code, to read:

   56831.  The hearing shall be held by the commission on the date
and at the time and place specified in the notice.  After the
conclusion of the hearing, the commission shall adopt a resolution
doing either of the following:
   (a) Disapproving the proposal of reorganization.
   (b) Ordering the proposal referred to a reorganization committee
for study, report, and recommendation.
  SEC. 143.  Section 56832 of the Government Code is repealed.
  SEC. 144.  Section 56832 is added to the Government Code, to read:

   56832.  The commission may accept contributions from any source
for the purpose of paying the expenses of a reorganization committee
in the conduct of its study, report, and recommendation.  Any
affected county, affected city, or affected district may make
contributions for that purpose.  The commission and any affected
county, affected city, or affected district may make any of its
facilities available for the use of a reorganization committee and
may authorize any of its officers and employees to furnish advice,
assistance, or services to the committee.
  SEC. 145.  Section 56833 of the Government Code is repealed.
  SEC. 146.  Section 56833 is added to the Government Code, to read:

   56833.  Any resolution adopted by the commission ordering a
proposal of reorganization referred to a reorganization committee
shall do all of the following:
   (a) Describe the proposed reorganization and designate the subject
districts (the description and designation may be by reference to
the proposal).
   (b) Specify the maximum number of members, not to exceed three, to
represent each subject district on the committee.
   (c) Fix a time and place for the first meeting of the
reorganization committee.
   (d) Designate a date, not less than 60 days from the date of the
first meeting of the committee, for the completion and submission to
the commission of the report and recommendation of the committee.
  SEC. 147.  Section 56833.1 of the Government Code is repealed.
  SEC. 148.  Section 56833.3 of the Government Code is repealed.
  SEC. 149.  Section 56833.5 of the Government Code is repealed.
  SEC. 150.  Section 56834 of the Government Code is repealed.
  SEC. 151.  Section 56834 is added to the Government Code, to read:

   56834.  From time to time during the course of study upon a
proposed plan of reorganization, the commission may do any of the
following:
   (a) Extend the time for completion and submission of the report
and recommendation of a reorganization committee.
   (b) Change the scope of the study by the addition or deletion of
territory or of subject districts.
   (c) Authorize the committee to develop, study, report, and make
recommendations upon alternative plans of reorganization.
  SEC. 152.  Section 56835 of the Government Code is repealed.
  SEC. 153.  Section 56835 is added to the Government Code, to read:

   56835.  At least 15 days before the date of the first meeting of a
reorganization committee, the executive officer shall mail a copy of
the resolution adopted by the commission to each subject district
designated in the resolution.
  SEC. 154.  Section 56836 of the Government Code is repealed.
  SEC. 155.  Section 56836 is added to the Government Code, to read:

   56836.  Any person, including, but not limited to, a member of the
legislative body of a subject district and an officer or employee of
the district, may be appointed as a member to represent the district
upon a reorganization committee.
  SEC. 156.  Section 56837 of the Government Code is repealed.
  SEC. 157.  Section 56837 is added to the Government Code, to read:

   56837.  (a) The legislative body of each affected district shall
appoint one or more members, not to exceed the maximum number
specified by the commission, to represent the district on the
reorganization committee.  That legislative body may remove and
replace any member previously appointed by it, and may fill any
vacancy in its membership upon the committee.
   (b) In the case of a reorganization committee created pursuant to
subdivision (b) of Section 56827, the county board of supervisors
shall appoint one or more members, not to exceed the maximum number
specified by the commission, to represent the county on the
reorganization committee.  The county board of supervisors may
appoint any person, including, but not limited to, an officer or
employee of the county to represent the county on the reorganization
committee.  The county board of supervisors may remove and replace
any member previously appointed by it, and may fill any vacancy in
its membership on the committee.
   (c) In the case of a reorganization committee created pursuant to
subdivision (b) of Section 56827, the commission shall appoint one or
more members to represent the general public on the reorganization
committee.  The number of members appointed to represent the general
public shall not exceed the maximum number specified by the
commission to represent the county or each subject district.  A
member appointed pursuant to this subdivision shall not be an officer
or employee of any local agency.  The commission may remove and
replace any member previously appointed by it, and may fill any
vacancy in its membership on the committee.
  SEC. 158.  Section 56838 of the Government Code is repealed.
  SEC. 159.  Section 56838 is added to the Government Code, to read:

   56838.  The clerk of a subject district shall give immediate
notice to the executive officer of all appointments and removals made
by the legislative body to a reorganization committee.
  SEC. 160.  Section 56839 of the Government Code is repealed.
  SEC. 161.  Section 56839 is added to the Government Code, to read:

   56839.  At any time after the date fixed for the first meeting of
a reorganization committee or during the course of the study by the
committee, if the legislative body of any subject district, after
written request by the executive officer, does not appoint any
members to the committee, those members may be appointed by the
commission.
                                                             SEC.
162.  Section 56839.1 of the Government Code is repealed.
  SEC. 163.  Section 56840 of the Government Code is repealed.
  SEC. 164.  Section 56840 is added to the Government Code, to read:

   56840.  If, during the course of study upon a proposed plan of
reorganization, the commission authorizes a change in the scope of
the study, the membership of the reorganization committee shall be
immediately changed to exclude representatives of each district or
city for which a change of organization is no longer proposed and to
include representatives of each district or city for which a new
change of organization is proposed.
  SEC. 165.  Section 56840.5 of the Government Code is repealed.
  SEC. 166.  Section 56841 of the Government Code is repealed.
  SEC. 167.  Section 56841 is added to the Government Code, to read:

   56841.  Subject to any standards and procedures adopted by
regulation by the commission, a reorganization committee shall
provide for the selection of a presiding officer and secretary either
of whom may but are not required to be members of the committee,
adopt the standards and procedures which it deems advisable, fix the
time and place for meetings of the committee, and determine the
manner and method to be followed by the committee in its study,
report, and recommendation.
  SEC. 168.  Section 56842 of the Government Code is repealed.
  SEC. 169.  Section 56842 is added to the Government Code, to read:

   56842.  A quorum shall be deemed to be present at a meeting of a
reorganization committee if members representing one-half or more of
the subject districts are present.  Each subject district shall be
entitled to one vote at any reorganization committee meeting, which
vote shall be determined by a majority of the members of the district
present at the meeting.
  SEC. 170.  Section 56842.2 of the Government Code is repealed.
  SEC. 171.  Section 56842.5 of the Government Code is repealed.
  SEC. 172.  Section 56842.6 of the Government Code is repealed.
  SEC. 173.  Section 56842.7 of the Government Code is repealed.
  SEC. 174.  Section 56843 of the Government Code is repealed.
  SEC. 175.  Section 56843 is added to the Government Code, to read:

   56843.  If a reorganization committee does not complete and submit
its report and recommendation before the date specified by the
commission or, prior to that date, if members of the committee
representing one-half or more of the subject districts report to the
commission that the committee is unable to agree upon the report and
recommendation, the commission may either order the discharge of the
committee, or appoint additional members to the committee, not to
exceed the maximum number authorized for a single subject district,
to represent the public and order the committee, as so enlarged, to
continue its study.
  SEC. 176.  Section 56844 of the Government Code is repealed.
  SEC. 177.  Section 56844 is added to the Government Code, to read:

   56844.  If the commission orders the discharge of a reorganization
committee, the commission may make a study, report, and
recommendation upon a plan of reorganization in the place of the
reorganization committee.
  SEC. 178.  Section 56844.1 of the Government Code is repealed.
  SEC. 179.  Section 56844.2 of the Government Code, as added by
Chapter 911 of the Statutes of 1997, is repealed.
  SEC. 180.  Section 56844.2 of the Government Code, as added by
Chapter 590 of the Statutes of 1998, is repealed.
  SEC. 181.  Section 56845 of the Government Code is repealed.
  SEC. 182.  Section 56845 is added to the Government Code, to read:

   56845.  If the commission appoints additional members to the
reorganization committee to represent the public and orders the
reorganization committee, as so enlarged, to continue its study, the
additional members shall have all of the rights and powers of members
representing a single subject district, including participation in
all studies, reports, and recommendations, attendance at all
meetings, and the casting of a single vote on behalf of all of the
additional members on any matter before the committee.
  SEC. 183.  Section 56846 of the Government Code is repealed.
  SEC. 184.  Section 56846 is added to the Government Code, to read:

   56846.  Every officer of any affected county, affected city, or
affected district shall make available to a reorganization committee
any records, reports, maps, data, or other documents which in any way
affect or pertain to the committee's study, report, and
recommendation and shall confer with the committee concerning the
problems and affairs of that county, city, or district.
  SEC. 185.  Section 56847 of the Government Code is repealed.
  SEC. 186.  Section 56847 is added to the Government Code, to read:

   56847.  Upon completion of the study of a reorganization
committee, the committee shall prepare and submit to the commission a
report and recommendation containing all of the following:
   (a) A brief summary of the nature and extent of the study of the
committee.
   (b) A full and complete description of the plan of reorganization
and any alternative plans of reorganization which were studied by the
committee.
   (c) The recommendation of the committee for the approval or
disapproval of all or any part of the plan of reorganization and of
any alternative plans of reorganization.
  SEC. 187.  Section 56848 is added to the Government Code, to read:

   56848.  Approval by a reorganization committee of the report and
recommendation shall require the affirmative vote of more than
one-half of the subject districts represented on the reorganization
committee.
  SEC. 188.  Section 56848.3 of the Government Code is repealed.
  SEC. 189.  Section 56848.5 of the Government Code is repealed.
  SEC. 190.  Section 56849 of the Government Code is repealed.
  SEC. 191.  Section 56849 is added to the Government Code, to read:

   56849.  The reorganization committee shall file the original of
its report and recommendation with the executive officer and a copy
of the report and recommendation with the clerk of each subject
district.  Upon filing that report and recommendation with the
executive officer, the reorganization committee shall be terminated.
However, the commission may cause the committee to be reconvened at
any time for the sole purpose of correcting or clarifying any error,
omission, or uncertainty appearing in the report and recommendation,
as determined by the commission.
  SEC. 192.  Section 56850 of the Government Code is repealed.
  SEC. 193.  Section 56851 of the Government Code is repealed.
  SEC. 194.  Section 56852 of the Government Code is repealed.
  SEC. 195.  Section 56852.3 of the Government Code is repealed.
  SEC. 196.  Section 56852.5 of the Government Code is repealed.
  SEC. 197.  Section 56853 of the Government Code is repealed.
  SEC. 198.  Section 56853 is added to the Government Code, to read:

   56853.  (a) If a majority of the members of each of the
legislative bodies of two or more local agencies adopt substantially
similar resolutions of application making proposals either for the
consolidation of districts or for the reorganization of all or any
part of the districts into a single local agency, the commission
shall approve, or conditionally approve, the proposal.  The
commission shall order the consolidation or reorganization without an
election, except as otherwise provided in subdivision (b) of Section
57081.
   (b) Before ordering any material change in the provisions or the
terms and conditions of the consolidation or reorganization, as set
forth in the proposals of the local agencies, the commission shall
direct the executive officer to give each subject agency mailed
notice of that change.  The commission shall not, without the written
consent of all subject agencies, take any further action on the
consolidation or reorganization for 30 days following that mailing.
Upon written demand by any subject agency, filed with the executive
officer during that 30-day period, the commission shall make
determinations upon the proposals only after notice and hearing
proposals.  If no written demand is filed, the commission may make
those determinations without notice and hearing.  The application of
any provision of this subdivision may be waived by consent of all of
the subject agencies.
   (c) Where the commission has initiated a change of organization or
reorganization affecting more than one special district, the
commission may utilize and is encouraged to utilize a reorganization
committee to review the proposal.
  SEC. 199.  Section 56854 of the Government Code is repealed.
  SEC. 200.  Section 56854 is added to the Government Code, to read:

   56854.  (a) Notwithstanding Sections 57077 and 57107, the
commission shall order (1) the consolidation of districts, (2)
dissolution, (3) merger, or (4) the establishment of a subsidiary
district, or (5) a reorganization that includes any of these changes
of organization without an election, except that an election shall be
held in each affected city or district if there are written protests
as follows:
   (1) Where the proposal was not initiated by the commission, and
where an affected city or district has not objected by resolution to
the proposal, a written protest has been submitted that meets the
requirements specified in subdivisions (b) and (c) of Section 57081.

   (2) Where the proposal was not initiated by the commission, and
where an affected city or district has objected by resolution to the
proposal, a written protest has been submitted that meets the
requirements specified in paragraphs (1) and (2) of subdivision (a)
and subdivision (b) of Section 57114.
   (3) Where the proposal was initiated by the commission, and
regardless of whether an affected city or district has objected to
the proposal by resolution, a written protest has been submitted that
meets the requirements of Section  57113.
   (b) Notwithstanding subdivision (a), the commission shall not
order a merger or establishment of a subsidiary district without the
consent of the affected city.
   (c) This section shall not apply to any proposal for a change of
organization or reorganization that is submitted to the commission
before January 1, 2003, where the Goleta Sanitary District or the
Goleta West Sanitary District is an affected district.  The
Legislature finds and declares that a special law is necessary and
that a general law cannot be made applicable within the meaning of
Section 16 of Article IV of the California Constitution because of
the following special circumstances:
   The voters of the Goleta Sanitary District previously voted
against a proposed consolidation with the Goleta West Sanitary
District by a margin of two to one.  More recently, a reorganization
proposal was submitted to the commission in Santa Barbara County that
would have combined the Goleta Sanitary District and the Goleta West
Sanitary District under circumstances where no opportunity for
confirmation by the Goleta Sanitary District voters would be
available.  In light of the issues that were raised in connection
with these earlier consolidation and reorganization proposals, a
five-year moratorium on the application of Section 56854 to proposals
affecting the Goleta Sanitary District or the Goleta West Sanitary
District is necessary to ensure an opportunity for voter
confirmation.
  SEC. 201.  Section 56855 of the Government Code is repealed.
  SEC. 202.  Section 56855 is added to the Government Code, to read:

   56855.  (a) This section shall apply to any proposal which
contains the annexation of territory to a fire protection district
which is organized pursuant to the Fire Protection District Law of
1987, Part 3 (commencing with Section 13800) of Division 12 of the
Health and Safety Code, and the affected territory is or is proposed
to be all or part of a city which is within the fire protection
district.
   (b) Prior to the adoption by the local agency formation commission
of a resolution making determinations, the district may request and
the commission shall impose, as a term and condition, a requirement
that the legislative body of the city shall enter into a contract
with the district.  The contract shall require:
   (1) That the affected territory shall remain part of the district
for a period of at least 10 years.
   (2) That the city shall pay the cost of services provided by the
district.  This payment shall be in amounts and on terms specified in
the contract.
   (3) Any other conditions to which the city and the district
mutually agree.
  SEC. 203.  Section 56856 of the Government Code is repealed.
  SEC. 204.  Section 56856 is added to the Government Code, to read:

   56856.  (a) The commission shall not approve or conditionally
approve a change of organization or reorganization that would result
in the annexation to a special district of territory that is within a
farmland security zone created pursuant to Article 7 (commencing
with Section 51296) of Chapter 7 of Division 1 if that special
district provides or would provide facilities or services related to
sewers, nonagricultural water, or streets and roads, unless the
facilities or services benefit land uses that are allowed under the
farmland security zone contract and the landowner consents to the
change of organization or reorganization.
   (b) This section shall not apply during the three-year period
preceding the termination of a farmland security zone contract under
Article 7 (commencing with Section 51296) of Chapter 7 of Division 1.

  SEC. 205.  Section 56857 of the Government Code is repealed.
  SEC. 205.5.  Section 56857 is added to the Government Code, to
read:
   56857.  (a) Upon receipt by the commission of a proposed change of
organization or reorganization that includes the annexation or
territory to any district, if the proposal is not filed by the
affected district the commission shall place the proposal on the
agenda for the next commission meeting for information purposes only
and shall transmit a copy of the proposal to any district to which an
annexation of territory is requested.
   (b) No later than 60 days after the date that the proposal is on
the commission's meeting agenda in accordance with subsection (a), an
affected district may adopt and transmit to the commission a
resolution requesting termination of the proceedings.
   (c) If an affected district has adopted and transmitted to the
commission a resolution requesting termination of proceedings within
the time period prescribed by this section, then the commission shall
terminate the proceedings upon receipt of the resolution from the
district.
  SEC. 206.  Section 56858 of the Government Code is repealed.
  SEC. 207.  Section 56859 of the Government Code is repealed.
  SEC. 208.  Article 3 (commencing with Section 56859) is added to
Chapter 5 of Part 3 of Division 3 of Title 5 of the Government Code,
to read:

      Article 3.  Formation

   56859.  Proceedings for the formation of a district shall be
conducted as authorized in the principal act of the district proposed
to be formed and Section 56100.
   56860.  If a proposal for formation of a new district is made by
petition, the petition shall comply with the signature requirements
and content of a petition for formation of the district as set forth
in the principal act under which the new district is proposed to be
formed.
   56860.5.  If a petition is for consolidation of districts or
formation of a new district, the petition may propose a name for the
new or consolidated district.
   56861.  (a) Within 10 days after receiving a proposal to form a
subsidiary district, the executive officer shall notify by certified
mail the district or districts which are the subject of the proposal.

   (b) Within 35 days after receiving the notice from the executive
officer, the board of directors of the subject district or districts
may do either of the following:
   (1) Adopt a resolution consenting to the subsidiary district
proposal, with or without requesting additional terms and conditions.

   (2) Adopt a resolution of intention to file an alternative
proposal to the subsidiary district proposal.
   (c) Any resolution adopted under paragraph (1) or (2) of
subdivision (b) shall immediately be filed with the executive
officer.
   56862.  (a) If a district files a resolution of intention to file
an alternative proposal pursuant to paragraph (2) of subdivision (b)
of Section 56861, the executive officer shall take no further action
on the original proposal to form a subsidiary district for a period
of 70 days.  During this period, the district which has filed a
resolution of intention shall prepare and submit a completed
application for the alternative proposal in a form similar to the
original proposal, as prescribed by the commission.
   (b) A district which has filed a resolution of intention to file
an alternative proposal but which does not file a completed
application within the prescribed time period, shall be deemed to
have consented to the original proposal to form a subsidiary
district.
   (c) After receiving an alternative proposal, the executive officer
shall analyze and report on both the original proposal and the
alternative proposal concurrently and set both for hearing by the
commission in order that both proposals may be considered
simultaneously at a single hearing.
   (d) "Alternative proposal," as used in this section, means an
alternative proposal to a subsidiary district proposal as provided
for in Section 56861.
   56863.  (a) Within 35 days following the conclusion of a hearing
on an original and an alternative proposal to form a subsidiary
district, the commission shall adopt its resolution of determination,
which shall do one of the following:
   (1) Deny both the original proposal and the alternative proposal.

   (2) Approve both the original proposal and the alternative
proposal.
   (3) Approve one proposal and deny the other.
   (b) If the commission approves both proposals, it shall adopt an
order directing the board of supervisors to consider both proposals
at a single hearing and to  do one of the following:
   (1) Deny both the original proposal and the alternative proposal.

   (2) Approve both the original proposal and the alternative
proposal.
   (3) Approve one proposal and deny the other.
   (c) "Alternative proposal," as used in this section, means an
alternative proposal to a subsidiary district proposal as provided
for in Section 56861.
  SEC. 209.  Article 4 (commencing with Section 56864) is added to
Chapter 5 of Part 3 of Division 3 of Title 5 of the Government Code,
to read:

      Article 4.  Initiation by Petition

   56864.  Petitions for the annexation of territory to, or
detachment of territory from, a district shall be signed as follows:

   (a) For a registered voter district, by any of the following:
   (1) Not less than 25 percent of the registered voters within the
territory proposed to be annexed.
   (2) Not less than 25 percent of the number of landowners within
the territory proposed to be annexed who also own not less than 25
percent of the assessed value of land within the territory.
   (b) For a landowner-voter district, by not less than 25 percent of
the number of landowners owning land within the territory proposed
to be annexed who also own not less than 25 percent of the assessed
value of land within the territory.
   56864.1.  (a) A petition for reorganization shall be signed so as
to comply with the applicable signature requirements of this article
with respect to each of the various changes proposed in the petition.

   (b) If a proposal for reorganization includes a proposal for the
formation of a new district, the petition shall comply with the
signature requirements, if any, of a petition for formation of the
district, as set forth in the principal act designated in the
petition for formation, and if there are no such requirements, then
the requirements of this part pertaining to dissolution.
   (c) If a proposal for reorganization includes incorporation, the
petition shall comply with the signature requirements for
incorporation.
   56864.3.  If a person is qualified to sign for two or more of the
changes of organization proposed by the petition, that person need
sign the petition only once and his or her signature shall be counted
as if that person had signed and requested each change of
organization.
   56865.  Petitions for the consolidation of two or more districts
shall be signed as follows:
   (a) For registered voter districts, by not less than 5 percent of
the registered voters within each of the several districts.
   (b) For landowner-voter districts, by landowner-voters within each
of the several districts constituting not less than 5 percent of the
number of landowner-voters owning land within each of the several
districts and who also own not less than 5 percent of the assessed
value of land within each of the several districts.
   56866.  Petitions for a merger of a district of limited powers
which overlaps a city, or for the establishment of the district as a
subsidiary district of the city, shall be signed as follows:
   (a) For a resident voter district, by either of the following:
   (1) Five percent of the registered voters of the district.
   (2) Five percent of the registered voters residing within the
territory of the city outside the boundaries of the district.
   (b) For a landowner-voter district, by either of the following:
   (1) Five percent of the number of landowner-voters within the
district who also own not less than 5 percent of assessed value of
land within the district.
   (2) Five percent of the registered voters residing within the
territory of the city outside the boundaries of the district.
   56870.  Except as otherwise provided in Section 56871, petitions
for the dissolution of a district shall be signed as follows:
   (a) For resident voter districts, by either of the following:
   (1) Not less than 10 percent of the registered voters within the
district.
   (2) Not less than 10 percent of the number of landowners within
the district who also own not less than 10 percent of the assessed
value of land within the district.
   (b) For landowner-voter districts, by not less than 10 percent of
the number of landowner-voters within the district who also own not
less than 10 percent of the assessed value of land within the
district.
   56871.  A petition for the dissolution of a registered voter
district, signed by three or more registered voters within the
district or by three or more landowners within a landowner-voter
district, shall be deemed to be a sufficient petition, if, in
addition to the matters required by Section 56700, the petition
recites that the district has been in existence for at least three
years and states, on information and belief, that the corporate
powers of the district have not  been used and that one or more of
the following conditions have existed or now exist:
   (a) That during the three-year period preceding the date of the
first signature upon the petition any of the following events have
not occurred:
   (1) There has not been a duly selected and acting quorum of the
board of directors of the district.
   (2) The board of directors has not furnished or provided services
or facilities of substantial benefit to residents, landowners, or
property within the district.
   (3) The board of directors has not levied or fixed and collected
any taxes, assessments, service charges, rentals, or rates or
expended the proceeds of those levies or collections for district
purposes.
   (b) That during the one-year period preceding the date of the
first signature upon the petition a quorum of the duly selected and
acting board of directors has not met for the purpose of transacting
district business.
   (c) That, upon the date of the first signature upon the petition,
the district had no assets, other than money in the form of cash,
investments, or deposits.
  SEC. 210.  Article 5 (commencing with Section 56875) is added to
Chapter 5 of Part 3 of Division 3 of Title 5 of the Government Code,
to read:

      Article 5.  Miscellaneous

   56875.  If any sufficient petition or resolution of application
shall propose, as a part of the petition or resolution of
application, that the district shall furnish gas or electric service,
as provided in Sections 56129 to 56131, inclusive, a certified copy
of the report of the Public Utilities Commission shall be on file
with the executive officer prior to setting that petition or
resolution for public hearing by the commission.
   56876.  In any order approving a proposal for an annexation to, or
detachment from, a district, the commission may determine that any
election called upon the question of confirming an order for the
annexation or detachment shall be called, held, and conducted upon
that question under either of the following conditions:
   (a) Only within the territory ordered to be annexed or detached.
   (b) Both within the territory ordered to be annexed or detached
and within all or any part of the district which is outside of the
territory.
  SEC. 211.  Chapter 6 (commencing with Section 56880) is added to
Part 3 of Division 3 of Title 5 of the Government Code, to read:

      CHAPTER 6.  COMMISSION DECISION
      Article 1.  Determinations

   56880.  At any time not later than 35 days after the conclusion of
the hearing, the commission shall adopt a resolution making
determinations approving or disapproving the proposal, with or
without conditions, the plan of reorganization, or any alternative
plan of reorganization as set forth in the report and recommendation
of a reorganization committee.  If the commission disapproves the
proposal, plan of reorganization, or any alternative plan of
reorganization, no further proceedings shall be taken on those
proposals or plans.
   56881.  The resolution making determinations shall also do all of
the following:
   (a) Make any of the findings or determinations authorized or
required pursuant to Section 56375.
   (b) For any proposal initiated by the commission pursuant to
subdivision (a) of Section 56375, make both of the following
determinations:
   (1) Public service costs of a proposal that the commission is
authorizing are likely to be less than or substantially similar to
the costs of alternative means of providing the service.
   (2) A change or organization or reorganization that is authorized
by the commission promotes public access and accountability for
community services needs
and financial resources.
   (c) If applicable, assign a distinctive short-term designation to
the affected territory and a description of the territory.
   (d) Initiate protest proceedings pursuant to Part 4 (commencing
with Section 57000) in compliance with the resolution.
   56882.  The executive officer shall mail a copy of the resolution
adopted by the commission making determinations addressed to each of
the following persons or entities:
   (a) The proponents, if any, where the proceedings for change of
organization were initiated by petition.
   (b) Each affected local agency whose boundaries would be changed
by the proposal.
   56883.  The executive officer may, before the completion of a
proceeding, on good cause being shown, correct clerical errors or
mistakes made through inadvertence, surprise, or excusable neglect
that may be contained in the resolution adopted by the commission
making determinations, upon written request by any member of the
commission, by the executive officer, or by any affected agency.  A
correction made pursuant to this section shall not be cause for
filing a request pursuant to Section 56895.
   56884.  (a) Except as otherwise provided in subdivision (b), if
the commission wholly disapproves any proposal:
   (1) No further proceedings shall be taken on that proposal.
   (2) No similar proposal involving the same or substantially the
same territory shall be initiated for one year after the date of
adoption of the resolution terminating proceedings.
   (b) The commission may waive the requirements of subdivision (a)
if it finds those requirements are detrimental to the public
interest.

      Article 2.  Terms and Conditions

   56885.  The commission may, at any time, authorize any legislative
body holding a hearing pursuant to this division, to continue the
hearing to a date or dates extending beyond the dates specified in
this division.
   56885.5.  (a) In any commission order giving approval to any
change of organization or reorganization, the commission may make
that approval conditional upon any of the following factors:
   (1) Any of the conditions set forth in Section 56886.
   (2) The initiation, conduct, or completion of proceedings for
another change of organization or a reorganization.
   (3) The approval or disapproval, with or without election, as may
be provided by this division, of any resolution or ordinance ordering
that change of organization or reorganization.
   (4) With respect to any commission determination to approve the
disincorporation of a city, the dissolution of a district, or the
reorganization or consolidation of agencies which results in the
dissolution of one or more districts or the disincorporation of one
or more cities, a condition prohibiting an agency being dissolved
from taking any of the following actions, unless it first finds that
an emergency situation exists as defined in Section 54956.5:
   (A) Approving any increase in compensation or benefits for members
of the governing board, its officers, or the executive officer of
the agency.
   (B) Appropriating, encumbering, expending, or otherwise
obligating, any revenue of the agency beyond that provided in the
current budget at the time the dissolution is approved by the
commission.
   (b) If the commission so conditions its approval, the commission
may order that any further action pursuant to this division be
continued and held in abeyance for the period of time designated by
the commission, not to exceed six months from the date of that
conditional approval.
   (c) The commission order may also provide that any election called
upon any change of organization or reorganization shall be called,
held, and conducted before, upon the same date as, or after the date
of any election to be called, held, and conducted upon any other
change of organization or reorganization.
   (d) The commission order may also provide that in any election at
which the questions of annexation and district reorganization or
incorporation and district reorganization are to be considered at the
same time, there shall be a single question appearing on the ballot
upon the issues of annexation and district reorganization or
incorporation and district reorganization.
   56886.  Any change of organization or reorganization may provide
for, or be made subject to one or more of, the following terms and
conditions.  However, none of the following terms and conditions
shall directly regulate land use, property development, or
subdivision requirements:
   (a) The payment of a fixed or determinable amount of money, either
as a lump sum or in installments, for the acquisition, transfer, use
or right of use of all or any part of the existing property, real or
personal, of any city, county, or district.
   (b) The levying or fixing and the collection of any of the
following, for the purpose of providing for any payment required
pursuant to subdivision (a):
   (1) Special, extraordinary, or additional taxes or assessments.
   (2) Special, extraordinary, or additional service charges,
rentals, or rates.
   (3) Both taxes or assessments and service charges, rentals, or
rates.
   (c) The imposition, exemption, transfer, division, or
apportionment, as among any affected cities, affected counties,
affected districts, and affected territory of liability for payment
of all or any part of principal, interest, and any other amounts
which shall become due on account of all or any part of any
outstanding or then authorized but thereafter issued bonds, including
revenue bonds, or other contracts or obligations of any city,
county, district, or any improvement district within a local agency,
and the levying or fixing and the collection of any (1) taxes or
assessments, or (2) service charges, rentals, or rates, or (3) both
taxes or assessments and service charges, rentals, or rates, in the
same manner as provided in the original authorization of the bonds
and in the amount necessary to provide for that payment.
   (d) If, as a result of any term or condition made pursuant to
subdivision (c), the liability of any affected city, affected county,
or affected district for payment of the principal of any bonded
indebtedness is increased or decreased, the term and condition may
specify the amount, if any, of that increase or decrease which shall
be included in, or excluded from, the outstanding bonded indebtedness
of that entity for the purpose of the application of any statute or
charter provision imposing a limitation upon the principal amount of
outstanding bonded indebtedness of the entity.
   (e) The formation of a new improvement district or districts or
the annexation or detachment of territory to, or from, any existing
improvement district or districts.
   (f) The incurring of new indebtedness or liability by, or on
behalf of, all or any part of any local agency, including territory
being annexed to any local agency, or of any existing or proposed new
improvement district within that local agency.  The new indebtedness
may be the obligation solely of territory to be annexed if the local
agency has the authority to establish zones for incurring
indebtedness.  The indebtedness or liability shall be incurred
substantially in accordance with the laws otherwise applicable to the
local agency.
   (g) The issuance and sale of any bonds, including authorized but
unissued bonds of a local agency, either by that local agency or by a
local agency designated as the successor to any local agency which
is extinguished as a result of any change of organization or
reorganization.
   (h) The acquisition, improvement, disposition, sale, transfer, or
division of any property, real or personal.
   (i) The disposition, transfer, or division of any moneys or funds,
including cash on hand and moneys due but uncollected, and any other
obligations.
   (j) The fixing and establishment of priorities of use, or right of
use, of water, or capacity rights in any public improvements or
facilities or of any other property, real or personal.
   (k) The establishment, continuation, or termination of any office,
department, or board, or the transfer, combining, consolidation, or
separation of any offices, departments, or boards, or any of the
functions of those offices, departments, or boards, if, and to the
extent that, any of those matters is authorized by the principal act.

   (l) The employment, transfer, or discharge of employees, the
continuation, modification, or termination of existing employment
contracts, civil service rights, seniority rights, retirement rights,
and other employee benefits and rights.
   (m) The designation of a city, county, or district, as the
successor to any local agency which is extinguished as a result of
any change of organization or reorganization, for the purpose of
succeeding to all of the rights, duties, and obligations of the
extinguished local agency with respect to enforcement, performance,
or payment of any outstanding bonds, including revenue bonds, or
other contracts and obligations of the extinguished local agency.
   (n) The designation of (1) the method for the selection of members
of the legislative body of a district or (2) the number of those
members, or (3) both, where the proceedings are for a consolidation,
or a reorganization providing for a consolidation or formation of a
new district and the principal act provides for alternative methods
of that selection or for varying numbers of those members, or both.
   (o) The initiation, conduct, or completion of proceedings on a
proposal made under, and pursuant to, this division.
   (p) The fixing of the effective date of any change of
organization, subject to the limitations of Section 57202.
   (q) Any terms and conditions authorized or required by the
principal act with respect to any change of organization.
   (r) The continuation or provision of any service provided at that
time, or previously authorized to be provided by an official act of
the local agency.
   (s) The levying of assessments, including the imposition of a fee
pursuant to Section 50029 or 66484.3 or the approval by the voters of
general or special taxes.  For the purposes of this section,
imposition of a fee as a condition of the issuance of a building
permit does not constitute direct regulation of land use, property
development, or subdivision requirements.
   (t) The extension or continuation of any previously authorized
charge, fee, assessment, or tax by the local agency or a successor
local agency in the affected territory.
   (u) The transfer of authority and responsibility among any
affected cities, affected counties, and affected districts for the
administration of special tax and special assessment districts,
including, but not limited to, the levying and collecting of special
taxes and special assessments, including the determination of the
annual special tax rate within authorized limits; the management of
redemption, reserve, special reserve, and construction funds; the
issuance of bonds which are authorized but not yet issued at the time
of the transfer, including not yet issued portions or phases of
bonds which are authorized; supervision of construction paid for with
bond or special tax or assessment proceeds; administration of
agreements to acquire public facilities and reimburse advances made
to the district; and all other rights and responsibilities with
respect to the levies, bonds, funds, and use of proceeds that would
have applied to the local agency that created the special tax or
special assessment district.
   (v) Any other matters necessary or incidental to any of the terms
and conditions specified in this section.
   56886.5.  If a proposal includes the formation of a new
government, the commission shall determine whether existing agencies
can feasibly provide the needed service or services in a more
efficient and accountable manner.  If a new single-purpose agency is
deemed necessary, the commission shall consider reorganization with
other single-purpose agencies that provide related services.
   56887.  Any change of organization or reorganization may be
conditionally approved by a local agency formation commission subject
to the certification by the California Coastal Commission of an
amendment to the local coastal program of a city or a county.
   56887.5.  If any change of organization or reorganization pertains
to city or district territory which is located, in whole or in part,
within the boundaries of any city or county, any terms and
conditions authorized by Section 56886 may be made applicable to that
city or county.  However, no indebtedness or liability which is
subject to the requirement of an election, under the provisions of
Section 18 of Article XVI of the California Constitution, shall be
incurred or assumed by any city or county, except as provided in
Section 18 of Article XVI of the California Constitution.
   56888.  (a) This section shall only apply to a special
reorganization.
   (b) All public employees to which Chapter 10 (commencing with
Section 3500) of Division 4 of Title 1 applies shall continue to be
deemed public employees of the original local agency or of the newly
incorporated local agency for all the purposes of that chapter,
including, but not limited to, the continuation and application of
any collective bargaining agreement that applies to these employees,
and all representational and collective bargaining rights under that
chapter.
   (c) Any existing collective bargaining agreement shall remain in
effect and be fully binding on the original local agency or on the
newly incorporated local agency, and on the employee organizations
that are parties to the agreement for the balance of the term of the
agreement, and until a subsequent agreement has been established.
   (d) Any existing retiree benefits, including, but not limited to,
health, dental, and vision care benefits, shall not be diminished.
   (e) Notwithstanding any other provision of law, an employee
organization that has been recognized as the exclusive representative
of local agency public employees affected by a special
reorganization shall retain exclusive representation of the unit
employees of the original local agency, or of the newly incorporated
local agency.
   56889.  If any commission order approving or conditionally
approving a change of organization or reorganization would result in
the annexation to a city of land that is subject to a contract
executed pursuant to the Williamson Act (Chapter 7 (commencing with
Section 51200) of Division 1), for which the commission has
determined pursuant to Section 56754 that the city shall succeed to
the contract, the commission shall impose a condition that requires
the city to adopt the rules and procedures required by the Williamson
Act, including but not limited to the rules and procedures required
by Sections 51231, 51237, and 51237.5.
   56890.  Any of the terms and conditions authorized by Section
56886 may be made applicable to all or any part of any city or
district or any improvement district within that local agency or any
territory annexed to, or detached from, any  city or district or
improvement district within that local agency.

      Article 3.  Reconsideration

   56895.  (a) When a commission has adopted a resolution making
determinations, any person or affected agency may file a written
request with the executive officer requesting amendments to or
reconsideration of the resolution.  The request shall state the
specific modification to the resolution being requested and shall
state what new or different facts that could not have been presented
previously, or applicable new law, are claimed to warrant the
reconsideration. If the request is filed by a school district that
received notification pursuant to Section 56658, the commission shall
consider that request at a public hearing.
   (b) Notwithstanding Section 56106, the deadlines set by this
section are mandatory.  The person or agency shall file the written
request within 30 days of the adoption of the initial or superseding
resolution by the commission making determinations.  If no person or
agency files a timely request, the commission shall not take any
action pursuant to this section.
   (c) Upon receipt of a timely request, the executive officer shall
not take any further action until the commission acts on the request.

   (d) Upon receipt of a timely request by the executive officer, the
time to file any action, including, but not limited to, an action
pursuant to Section 21167 of the Public Resources Code and any
provisions of Part 4 (commencing with Section 57000) governing the
time within which the commission is to act shall be tolled for the
time that the commission takes to act on the request.
   (e) The executive officer shall place the request on the agenda of
the next meeting of the commission for which notice can be given
pursuant to this subdivision.  The executive officer shall give
notice of the consideration of the request by the commission in the
same manner as for the original proposal.  The executive officer may
give notice in any other manner as he or she deems necessary or
desirable.
   (f) At that meeting, the commission shall consider the request and
receive any oral or written testimony.  The consideration may be
continued from time to time but not to exceed 70 days from the date
specified in the notice.  The person or agency which filed the
request may withdraw it at any time prior to the conclusion of the
consideration by the commission.
   (g) At the conclusion of its consideration, the commission may
approve or disapprove with or without amendment, wholly, partially,
or conditionally, the request.  If the commission disapproves the
request, it shall not adopt a new resolution making determinations.
If the commission approves the request, with or without amendment,
wholly, partially, or conditionally, the commission shall adopt a
resolution making determinations which shall supersede the resolution
previously issued.
   (h) The determinations of the commission shall be final and
conclusive.  No person or agency shall make any further request for
the same change or a substantially similar change, as determined by
the commission.
   (i) Notwithstanding subdivision (h), clerical errors or mistakes
may be corrected pursuant to Section 56854.

      Article 4.  Amendment

   56897.  If pursuant to Section 56895, the commission approves any
addition, deletion, amendment, or revision of its resolution making
determinations, further proceedings for the change of organization or
reorganization shall be taken in compliance with that addition,
deletion, amendment, or revision.  Any provision of this division
requiring compliance with the resolution adopted by the commission
making determinations shall be deemed to include any addition,
deletion, amendment, or revision made to that resolution.
   56898.  Whenever the executive officer is required by law to
prepare an impartial analysis of a ballot proposition for approval by
the commission, the commission may, by regulation, provide a
procedure for approval or modification of the executive officer's
analysis.
   In any event, the analysis shall be prepared and submitted to the
commission in sufficient time for the commission to consider and
approve or modify the analysis, and submit the analysis to the
officials conducting the election not later than the last day for
submission of rebuttal arguments.  The impartial analysis submitted
by the commission shall not exceed 500 words in length and shall
include a general description of the affected territory.
  SEC. 211.5.  Section 56895 is added to the Government Code, to
read:
   56895.  (a) When a commission has adopted a resolution making
determinations, any person or affected agency may file a written
request with the executive officer requesting amendments to or
reconsideration of the resolution.  The request shall state the
specific modification to the resolution being requested and shall
state what new or different facts that could not have been presented
previously, or applicable new law, are claimed to warrant the
reconsideration.  If the request is filed by a school district that
received notification pursuant to Section 56658, the commission shall
consider that request at a public hearing.
   (b) Notwithstanding Section 56106, the deadlines set by this
section are mandatory.  The person or agency shall file the written
request within 30 days of the adoption of the initial or superseding
resolution by the commission making determinations.  If no person or
agency files a timely request, the commission shall not take any
action pursuant to this section.
   (c) Upon receipt of a timely request, the executive officer shall
not take any further action until the commission acts on the request.

   (d) Upon receipt of a timely request by the executive officer, the
time to file any action, including, but not limited to, an action
pursuant to Section 21167 of the Public Resources Code and any
provisions of Part 4 (commencing with Section 57000) governing the
time within which the commission is to act shall be tolled for the
time that the commission takes to act on the request.
   (e) The executive officer shall place the request on the agenda of
the next meeting of the commission for which notice can be given
pursuant to this subdivision.  The executive officer shall give
notice of the consideration of the request by the commission in the
same manner as for the original proposal.  The executive officer may
give notice in any other manner as he or she deems necessary or
desirable.
   (f) At that meeting, the commission shall consider the request and
receive any oral or written testimony.  The consideration may be
continued from time to time but not to exceed 35 days from the date
specified in the notice.  The person or agency which filed the
request may withdraw it at any time prior to the conclusion of the
consideration by the commission.
   (g) At the conclusion of its consideration, the commission may
approve or disapprove with or without amendment, wholly, partially,
or conditionally, the request.  If the commission disapproves the
request, it shall not adopt a new resolution making determinations.
If the commission approves the request, with or without amendment,
wholly, partially, or conditionally, the commission shall adopt a
resolution making determinations which shall supersede the resolution
previously issued.
   (h) The determinations of the commission shall be final and
conclusive.  No person or agency shall make any further request for
the same change or a substantially similar change, as determined by
the commission.
   (i) Notwithstanding subdivision (h), clerical errors or mistakes
may be corrected pursuant to Section  56883.
  SEC. 212.  Section 57000 of the Government Code is amended to read:

   57000.  (a) After adoption of a resolution making determinations
by the commission pursuant to Part 3 (commencing with Section 56650),
protest proceedings for a change of organization or reorganization
shall be taken pursuant to this part.
   (b) If a proposal is approved by the commission, with or without
amendment, wholly, partially, or conditionally, the commission shall
conduct proceedings in accordance with this part.  The proceedings
shall be conducted and completed pursuant to those provisions which
are applicable to the proposal and the territory contained in the
proposal as it is approved by the commission.  If the commission
approves the proposal with modifications or conditions, proceedings
shall be conducted and completed in compliance with those
modifications or conditions.
   (c) Any reference in this part to the commission also means the
executive officer for any function which the executive officer will
perform pursuant to a delegation of authority from the commission.
   (d) When the commission makes a determination pursuant to this
division that will require an election to be conducted, it shall
inform the board of supervisors or the city council of the affected
city of that determination and request the board or the city council
to direct the elections official to conduct the necessary election.
   (e) When a board of supervisors or a city council is informed by
the commission that a determination has been made which requires an
election, it shall direct the elections official to conduct the
necessary election.  The board or council shall do all of the
following:
   (1) Call, provide for, and give notice of a special election or
elections upon that question.
   (2) Fix a date of election.
   (3) Designate precincts and polling places.
   (4) Take any other action necessary to call, provide for, and give
notice of the special election or elections and to provide for the
conduct and the canvass of returns of the election, as determined by
the commission.
   (f) Any provision in this part which requires that an election be
called, held, provided for, or conducted shall mean that the
procedures specified in subdivisions (d) and (e) shall be followed.

  SEC. 213.  Section 57001 of the Government Code is amended to read:

   57001.  If a certificate of completion for a change of
organization or reorganization has not been filed within one year
after the commission approves a proposal for that proceeding, the
proceeding shall be deemed abandoned unless prior to the expiration
of that year the commission authorizes an extension of time for that
completion.  The extension may be for any period deemed reasonable to
the commission for completion of necessary prerequisite actions by
any party.  If a proceeding has not been completed because of the
order or decree of a court of competent jurisdiction temporarily
enjoining or restraining the proceedings, this shall not be deemed a
failure of completion and the one-year period shall be tolled for the
time that order or decree is in effect.
  SEC. 214.  Section 57002 of the Government Code is amended to read:

   57002.  (a) Within 35 days following the adoption of the
commission's resolution making determinations, and following the
reconsideration period specified in subdivision (b) of Section 56895
the executive officer of the commission shall set the proposal for
hearing and give notice of that hearing by mailing, publication, and
posting, as provided in Chapter 4 (commencing with Section 56150) of
Part 1.  The date of that hearing shall not be less than 15 days, or
more than 60 days, after the date the notice is given.
   (b) Where the proceeding is for the establishment of a district of
limited powers as a subsidiary district of a city, upon the request
of the affected district, the date of the hearing shall be at least
90 days, but no more than
      135 days, from the date the notice is given.
   (c) If authorized by the commission pursuant to Section 56663, a
change of organization or reorganization may be approved without
notice, hearing, and election.
  SEC. 214.5.  Section 57002 of the Government Code is amended to
read:
   57002.  (a) Within 35 days following the adoption of the
commission's resolution making determinations, and following the
reconsideration period specified in subdivision (b) of Section 56895,
the executive officer of the commission shall set the proposal for
hearing and give notice of that hearing by mailing, publication, and
posting, as provided in Chapter 4 (commencing with Section 56150) of
Part 1.  The date of that hearing shall not be less than 15 days, or
more than 60 days, after the date the notice is given.
   (b) Notwithstanding subdivision (a), for any proposal that
includes an incorporation, the clerk of the conducting authority
shall set the proposal for hearing within 15 days following the
adoption of the commission's resolution making determinations.  The
hearing shall be set for the next regularly scheduled hearing that
provides sufficient time to give public notice of that hearing by
mailing, publication, and posting, as provided in Chapter 4
(commencing with Section 56150) of Part 1.
   (c) Where the proceeding is for the establishment of a district of
limited powers as a subsidiary district of a city, upon the request
of the affected district, the date of the hearing shall be at least
90 days, but no more than 135 days, from the date the notice is
given.
   (d) If authorized by the commission pursuant to Section 56663, a
change of organization or reorganization may be approved without
notice, hearing, and election.
  SEC. 215.  Section 57003 of the Government Code is amended to read:

   57003.  Once notice is given by the executive officer of the
commission pursuant to this chapter, and until proceedings are
completed or terminated pursuant to this part, no conflicting
petition or resolution of application seeking the change of
organization or reorganization of all or part of  the territory
described by the notice given by the executive officer shall be filed
with, or acted on, by the commission.
  SEC. 216.  Section 57004 of the Government Code is repealed.
  SEC. 217.  Section 57005 of the Government Code is repealed.
  SEC. 218.  Section 57006 of the Government Code is repealed.
  SEC. 219.  Section 57007 of the Government Code is amended to read:

   57007.  Except when a district formation is part of a
reorganization, protest proceedings shall be conducted as set forth
in the principal act of the district to be formed, and commission
protest proceedings shall not apply, except for the provisions
relating to the completion and effective date of a change of
organization or reorganization contained in Chapter 3 (commencing
with Section 57200).  When the district formation is part of a
reorganization, all of the proceedings shall be conducted pursuant to
this part and Section 56100.
  SEC. 220.  Section 57008 of the Government Code is amended to read:

   57008.  For any proposal initiated by the commission pursuant to
subdivision (a) of Section 56375, the commission shall hold a public
protest hearing in the affected territory.
  SEC. 221.  Section 57025 of the Government Code is amended to read:

   57025.  (a) The executive officer of the commission shall give
notice of the protest hearing to be held on the proposal by
publication pursuant to Sections 56153 and 56154 and by posting
pursuant to Sections 56158 and 56159.
   (b) The executive officer shall also give mailed notice to each
affected city, affected district, or affected county, the proponents,
if any, all landowners owning land within any territory proposed to
be formed into, or to be annexed to, or detached from, an improvement
district within any city or district, and to persons requesting
special notice, in accordance with the provisions of Sections 56155
to 56157, inclusive.
   (c) In the case of a proposed annexation to a city of affected
territory consisting of 75 acres or less, the executive officer of
the commission shall give mailed notice to each landowner within the
affected territory.
   (d) In the case of a proposed change of organization or
reorganization that would result in the extension of any previously
authorized special tax or benefit assessment to the affected
territory, the executive officer of the commission shall give mailed
notice to each landowner within the affected territory.
  SEC. 222.  Section 57026 of the Government Code is amended to read:

   57026.  The mailed notice required to be given by Section 57025
shall contain all of the following information:
   (a) A statement of the distinctive short form designation assigned
by the commission to the proposal.
   (b) A statement of the manner in which, and by whom, proceedings
were initiated.  However, a reference to the proponents, if any,
shall be sufficient where proceedings were initiated by a petition.
   (c) A description of the exterior boundaries of the subject
territory.
   (d) A description of the particular change or changes of
organization proposed for each of the subject districts or cities and
new districts or new cities proposed to be formed, and any terms and
conditions to be applicable.  The description may include a
reference to the commission's resolution making determinations for a
full and complete description of the change of organization or
reorganization, and the terms and conditions.
   (e) A statement of the reason or reasons for the change of
organization or reorganization as set forth in the proposal submitted
to the commission.
   (f) (1) Except as otherwise provided in paragraph (2), a statement
of the time, date, and place of the protest hearing on the proposed
change of organization or reorganization.
   (2) Notwithstanding paragraph (1), if inhabited territory is
proposed to be annexed to a city with more than 100,000 residents
which is located in a county with a population of over 4,000,000 the
date shall be at least 90 days, but not more than 105 days, after the
date of adoption of the resolution initiating the proceedings.  The
resolution shall specify a date 90 days prior to the hearing when
registered voters may begin to file protests.
   (g) If the subject territory is inhabited and the change of
organization or reorganization provides for the submission of written
protests, a statement that any owner of land within the territory,
or any registered voter residing within the territory, may file a
written protest against the proposal with the executive officer of
the commission at any time prior to the conclusion of the hearing by
the commission on the proposal.
   (h) If the subject territory is uninhabited and the change of
organization or reorganization provides for submission of written
protests, a statement that any owner of land within the territory may
file a written protest against the proposal with the executive
officer of the commission at any time prior to the conclusion of the
hearing by the commission on the proposal.
  SEC. 223.  Section 57050 of the Government Code is amended to read:

   57050.  (a) The protest hearing on the proposal shall be held by
the commission on the date and at the time specified in the notice
given by the executive officer.  The hearing may be continued from
time to time but not to exceed 60 days from the date specified for
the hearing in the notice.
   (b) At the protest hearing, prior to consideration of protests,
the commission's resolution making determinations shall be
summarized.  At that hearing, the commission shall hear and receive
any oral or written protests, objections, or evidence which is made,
presented, or filed.  Any person who has filed a written protest may
withdraw that protest at any time prior to the conclusion of the
hearing.
  SEC. 223.5.  Section 57050 of the Government Code is amended to
read:
   57050.  (a) The protest hearing on the proposal shall be held by
the commission on the date and at the time specified in the notice
given by the  executive officer.  The hearing may be continued from
time to time but not to exceed 60 days from the date specified for
the hearing in the notice.  The hearing on a proposal that includes
an incorporation may be continued from time to time but not to exceed
35 days from the date specified for the hearing in the notice.
   (b) At the protest hearing, prior to consideration of protests,
the commission's resolution making determinations shall be
summarized.  At that hearing, the commission shall hear and receive
any oral or written protests, objections, or evidence which is made,
presented, or filed.  Any person who has filed a written protest may
withdraw that protest at any time prior to the conclusion of the
hearing.
  SEC. 224.  Section 57051 of the Government Code is amended to read:

   57051.  At any time prior to the conclusion of the protest hearing
in the notice given by the executive officer, but not thereafter,
any owner of land or any registered voter within inhabited territory
proposed to be annexed or detached, or any owner of land within
uninhabited territory proposed to be annexed or detached, may file a
written protest against the annexation or detachment.  Each written
protest shall state whether it is made by a landowner or registered
voter and the name and address of the owner of the land affected and
the street address or other description sufficient to identify the
location of the land or  the name and address of the registered voter
as it appears on the affidavit of registration.  Protests may be
made on behalf of an owner of land by an agent authorized in writing
by the owner to act as agent with respect to that land.  Protests may
be made on behalf of a private corporation which is an owner of land
by any officer or employee of the corporation without written
authorization by the corporation to act as agent in making that
protest.
   Each written protest shall show the date that each signature was
affixed to the protest.  All signatures without a date or bearing a
date prior to the date of publication of the notice shall be
disregarded for purposes of ascertaining the value of any written
protests.
  SEC. 225.  Section 57052 of the Government Code is amended to read:

   57052.  Upon conclusion of the protest hearing, the commission
shall determine the value of written protests filed and not
withdrawn.  The value of written protests shall be determined in the
same manner prescribed in Sections 56707, 56708, and 56710 for
determining the sufficiency of petitions filed with the commission.

  SEC. 226.  Section 57053 of the Government Code is amended and
renumbered to read:
   56886.3.  If the terms and conditions of any change of
organization provide for the formation of a new improvement district,
or the annexation or detachment of territory to, or from, an
existing improvement district, the commission shall do all of the
following:
   (a) Exclude any lands proposed to be formed into, or to be annexed
to, the improvement district which the commission finds will not be
benefited by becoming a part of the improvement district.
   (b) Exclude any lands proposed to be detached from an improvement
district which the commission finds will be benefited by remaining a
part of the improvement district.
  SEC. 227.  Section 57075 of the Government Code is amended to read:

   57075.  In the case of registered voter districts or cities, where
a change of organization or reorganization consists solely of
annexations, detachments, or formation of county service areas, or
any combination of those proposals, the commission, not more than 30
days after the conclusion of the hearing, shall make a finding
regarding the value of written protests filed and not withdrawn, and
take one of the following actions, except as provided in subdivision
(b) of Section 57002.
   (a) In the case of inhabited territory, take one of the following
actions:
   (1) Terminate proceedings if a majority protest exists in
accordance with Section 57078.
   (2) Order the change of organization or reorganization subject to
confirmation by the registered voters residing within the affected
territory if written protests have been filed and not withdrawn by
either of the following:
   (A) At least 25 percent, but less than 50 percent, of the
registered voters residing in the affected territory.
   (B) At least 25 percent of the number of owners of land who also
own at least 25 percent of the assessed value of land within the
affected territory.
   (3) Order the change of organization or reorganization without an
election if written protests have been filed and not withdrawn by
less than 25 percent of the registered voters or less than 25 percent
of the number of owners of land owning less than 25 percent of the
assessed value of land within the affected territory.
   (b) In the case of uninhabited territory, take either of the
following actions:
   (1) Terminate proceedings if a majority protest exists in
accordance with Section 57078.
   (2) Order the change of organization or reorganization if written
protests have been filed and not withdrawn by owners of land who own
less than 50 percent of the total assessed value of land within the
affected territory.
  SEC. 228.  Section 57075.5 of the Government Code is amended to
read:
   57075.5.  Notwithstanding Section 57075, if territory proposed to
be annexed to a city with more than 100,000 residents is inhabited
and is located in a county with a population of over 4,000,000, the
commission, not more than 30 days after conclusion of the hearing,
shall make a finding regarding the value of written protests filed
and not withdrawn and shall take one of the following actions:
   (a) Terminate proceedings if written protests have been filed and
not withdrawn by 50 percent or more of the registered voters within
the affected territory.
   (b) Order the territory annexed subject to the confirmation by the
voters on the question, and call a special election and submit to
the voters residing within the affected territory the question of
whether it shall be annexed to the city, if written protests have
been filed and not withdrawn by either 15 percent or more of the
registered voters within the territory, or 15 percent or more of the
number of owners of land who also own not less than 15 percent of the
total assessed value of land within the territory.
   (c) Order the territory annexed without an election if written
protests have  been filed and not withdrawn by less than 15 percent
of the registered voters within the territory and less than 15
percent of the owners of land who own less than 15 percent of the
total assessed value of land within the territory.
  SEC. 229.  Section 57076 of the Government Code is amended to read:

   57076.  In the case of landowner-voter districts, where a change
of organization or reorganization consists solely of annexations or
detachments, or any combination of those proposals, the commission,
not more than 30 days after the conclusion of the hearing, shall make
a finding regarding the value of written protests filed and not
withdrawn, and take one of the following actions, except as provided
in subdivision (b) of Section 57002:
   (a) Terminate proceedings if a majority protest exists in
accordance with Section 57078.
   (b) Order the change of organization or reorganization subject to
an election within the affected territory if written protests have
been filed and not withdrawn represent either of the following:
   (1) Twenty-five percent or more of the number of owners of land
who also own 25 percent or more of the assessed value of land within
the territory.
   (2) Twenty-five percent or more of the voting power of landowner
voters entitled to vote as a result of owning property within the
territory.
   (c) Order the change of organization or reorganization without an
election if written protests have been filed and not withdrawn by
less than 25 percent of the number of owners of land who own less
than 25 percent of the assessed value of land within the affected
territory.
  SEC. 230.  Section 57077 of the Government Code is amended to read:

   57077.  (a) Where a change of organization consists of a
dissolution, disincorporation, incorporation, establishment of a
subsidiary district, consolidation, or merger, the commission, not
more than 30 days after the conclusion of the hearing, shall make a
finding regarding the value of written protests filed and not
withdrawn, and take one of the following actions:
   (1) Terminate proceedings if a majority protest exists in
accordance with Section 57078.
   (2) Order the change of organization subject to confirmation of
the voters, or in the case of a landowner-voter district, subject to
confirmation by the landowners, unless otherwise stated in the
formation provisions of the enabling statute of the district.
   (3) Order the change of organization without election if it is a
change of organization that meets the requirements of Section 57081,
57102, or 57107; otherwise, the commission shall take the action
specified in paragraph (2).
   (b) Where a reorganization consists of one or more dissolutions,
incorporations, formations, disincorporations, mergers,
establishments of subsidiary districts, consolidations, or any
combination of those proposals, the commission, not more than 30 days
after the conclusion of the hearing, shall make a finding regarding
the value of written protests filed and not withdrawn and take one of
the following actions:
   (1) Terminate proceedings if a majority protest exists in
accordance with Section 57078.
   (2) Order the reorganization subject to confirmation of the
voters, or in the case of landowner-voter districts, subject to
confirmation by the landowners, unless otherwise stated in the
formation provisions of the enabling statute of the district.
   (3) Order the reorganization without election  if it is a
reorganization which meets the requirements of Section 57081, 57102,
57107, or 57111; otherwise, the commission shall take the action
specified in paragraph (2).
  SEC. 231.  Section 57078 of the Government Code is amended to read:

   57078.  In the case of any reorganization or change of
organization, a majority protest shall be deemed to exist and the
proposed change of organization or reorganization shall be abandoned
if the commission finds that written protests filed and not withdrawn
prior to the conclusion of the hearing represent any of the
following:
   (a) In the case of uninhabited territory, landowners owning 50
percent or more of the assessed value of the land within the
territory.
   (b) In the case of inhabited territory, 50 percent or more of the
voters residing in the territory.
   (c) In the case of a landowner-voter district, 50 percent or more
of the voting power of the voters entitled to vote as a result of
owning land within the district.
  SEC. 232.  Section 57078.5 is added to the Government Code, to
read:
   57078.5.  If a proposed annexation consists of two or more
distinct communities, as defined in the county general plan, census
unincorporated places listing, or other commonly recognized community
designation, as determined by the commission, and any one community
has more than 250 registered voters, any protest filed pursuant to
Section 57078 shall be accounted separately for that community,
unless the annexation is proposed pursuant to Section 56375.3.
  SEC. 233.  Section 57079 of the Government Code is repealed.
  SEC. 234.  Section 57079.5 of the Government Code is amended and
renumbered to read:
   56668.3.  (a) If the proposed change of organization or
reorganization includes a city detachment or district annexation,
except a special reorganization, and the proceeding has not been
terminated based upon receipt of a resolution requesting termination
pursuant to either Section 56751 or Section 56857, factors to be
considered by the commission shall include all of the following:
   (1) Whether the proposed annexation will be for the interest of
landowners or present or future inhabitants within the district and
within the territory proposed to be annexed to the district.
   (2) The commission's resolution making determinations.
   (3) Any factors which may be considered by the commission as
provided in Section 56668.
   (4) Any resolution objecting to the action that may be filed by an
affected agency.
   (5) Any other matters which the commission deems material.
   (b) The commission shall give great weight to any resolution
objecting to the action that is filed by a city or a district.  The
commission's consideration shall be based only on financial or
service related concerns expressed in the protest.  Except for
findings regarding the value of written protests, the commission is
not required to make any express findings concerning any of the
factors considered by the commission.
  SEC. 235.  Section 57080 of the Government Code is amended to read:

   57080.  (a) With respect to a proceeding initiated on or after
January 1, 2000, when approved and authorized by the commission
pursuant to Section 56745, the commission shall, not later than 35
days after conclusion of the hearing, adopt a resolution ordering the
annexation without an election or shall terminate the proceedings.
Sections 57050, 57051, 57052, subdivision (a) of 57075, and Section
57078 do not apply to any annexation subject to this subdivision.
   (b) With respect to a proceeding initiated on or after January 1,
2007, when approved and authorized by the commission pursuant to
Section 56375.3, Sections 57050, 57051, and 57052, shall apply and
subdivision (a) of Section 57075 does not apply.
   (1) If the territory proposed to be annexed is inhabited
territory, the commission, not more than 30 days after conclusion of
the hearing, shall make a finding regarding the value of written
protests filed and not withdrawn and shall do either of the
following:
   (A) Terminate proceedings if written protests have been filed and
not withdrawn by 50 percent or more of the registered voters within
the affected territory.
   (B) Order the territory annexed without an election.
   (2) If the territory proposed to be annexed is uninhabited, the
commission, not more than 30 days after conclusion of the hearing,
shall adopt a resolution which does either of the following:
   (A) Terminates proceedings.
   (B) Orders the territory annexed.
  SEC. 236.  Section 57081 of the Government Code is amended to read:

   57081.  (a) If authorized by the commission pursuant to Section
56853, the protest proceedings shall be conducted for the
consolidation of districts or the reorganization of all or any part
of those districts into a single local agency pursuant to this
section.  The commission shall hold at least one noticed public
hearing on the proposal within 30 days after approval of the
application by the commission.  After the conclusion of the hearing,
the commission shall order the consolidation or reorganization
without an election, except as otherwise provided in subdivision (b).

   (b) An election shall only be held if the commission finds either
of the following:
   (1) In the case of inhabited territory, that a petition requesting
that the proposal be submitted to confirmation by the voters has
been signed by either of the following:
   (A) At least 25 percent of the number of landowners within the
territory subject to the consolidation or reorganization who own at
least 25 percent of the assessed value of land within the territory.

   (B) At least 25 percent of the voters entitled to vote as a result
of residing within, or owning land within, the territory.
   (2) In the case of a landowner-voter district, that the territory
is uninhabited and a petition requesting that the proposal be
submitted to confirmation by the voters has been signed by at least
25 percent of the number of landowners within the territory subject
to the consolidation or reorganization, owning at least 25 percent of
the assessed value of land within the territory.
   (c) The petition shall be filed with the commission prior to the
conclusion of the protest hearing.
  SEC. 237.  Section 57082 of the Government Code is amended and
renumbered to read:
   57100.  Any commission resolution ordering a change of
organization or a reorganization shall contain all of the following:

   (a) A statement that the action is being taken pursuant to this
division.
   (b) A statement of the type of change of organization or
reorganization being acted on.
   (c) A description of the exterior boundaries of the territory for
each change of organization or reorganization approved by the
commission.
   (d) The name or names of any new or consolidated city or district.

   (e) All of the terms and conditions upon the change of
organization or reorganization approved by the commission.
   (f) The reasons for the change of organization or reorganization.

   (g) A statement as to whether the regular county assessment roll
or another assessment roll will be utilized.
   (h) A statement that the affected territory will or will not be
taxed for existing general bonded indebtedness of any agency whose
boundaries are changed.
   (i) Any other matters that the commission deems material.
  SEC. 238.  Section 57082.5 of the Government Code is amended and
renumbered to read:
   57101.  With respect to any proceeding that would result in the
annexation to a city of land that is subject to a contract executed
pursuant to the Williamson Act (Chapter 7 (commencing with Section
51200) of Division 1), for which the commission has determined
pursuant to Section 56754 that the city may exercise its option to
not succeed to the contract, the commission shall include within its
resolution ordering the annexation of the territory a finding
regarding whether the city intends to not succeed to the contract.
  SEC. 239.  Section 57083 of the Government Code is amended and
renumbered to read:
   57102.  (a) In any resolution ordering a dissolution, the
commission shall make findings upon one or more of the following
matters:
   (1) That the corporate powers have not been used, as specified in
Section 56871, and that there is a reasonable probability that those
powers will not be used in the future.
   (2) That the district is a registered-voter district and is
uninhabited.
   (3) That the board of directors of the district has, by unanimous
resolution, consented to the dissolution of the district.
                          (b) If the commission makes any of the
findings specified in subdivision (a), the commission may, except as
otherwise provided in Section 57103, order the dissolution of the
district without election.
  SEC. 240.  Section 57083.5 of the Government Code is amended and
renumbered to read:
   57103.  Any order in any resolution adopted by the commission on
or after January 1, 1986, ordering the dissolution of a local
hospital district, organized pursuant to Division 23 (commencing with
Section 32000) of the Health and Safety Code, is subject to
confirmation by the voters.
  SEC. 240.5.  Section 57084 of the Government Code is amended and
renumbered to read:
   57104.  Any order of merger may be adopted for a district of
limited powers, including any district previously established as a
subsidiary district, if the entire territory of the district is
included within the boundaries of a city upon the date of the order.

  SEC. 241.  Section 57085 of the Government Code is amended and
renumbered to read:
   57105.  An order establishing a district of limited powers as a
subsidiary district may be adopted if upon the date of that order the
commission determines that either of the following situations
exists:
   (a) The entire territory of the district is included within the
boundaries of a city.
   (b) A portion or portions of the territory of the district are
included within the boundaries of a city and that portion or portions
meet both of the following requirements:
   (1) Represent 70 percent or more of the area of land within the
district, as determined by reference to the statements and the maps
or plats filed pursuant to Chapter 8 (commencing with Section 54900)
of Division 2 of Title 5 for the current fiscal year.
   (2) Contain 70 percent or more of the number of registered voters
who reside within the district as shown on the voters' register in
the office of the county clerk or registrar of voters.
  SEC. 241.5.  Section 57086 of the Government Code is amended and
renumbered to read:
   57106.  For the purposes of Sections 57104 and 57105, the
boundaries shall be determined as of the date of adoption of the
order of the commission.  Any then pending but uncompleted
proceedings for changes in the boundaries of the city or district
shall be disregarded.
  SEC. 242.  Section 57087 of the Government Code is amended and
renumbered to read:
   57107.  In any resolution ordering a merger or establishment of a
subsidiary district, the commission shall take one of the following
actions:
   (a) Order the merger or establishment of the subsidiary district
subject to confirmation of the voters upon the questions, as the case
may be, of merger, the establishment of a subsidiary district, or
both merger and the establishment of a subsidiary district.
   (b) Order the merger or establishment of the subsidiary district
without election, if the legislative body of the city and the board
of directors of the district have by resolution consented to the
merger or the establishment of the subsidiary district.
  SEC. 243.  Section 57087.5 of the Government Code is amended and
renumbered to read:
   57108.  At any time prior to the conclusion of the protest hearing
by the commission ordering the district to be merged with or
established as a subsidiary district of a city, a petition may be
filed with the executive officer referring, by date of adoption, to
the commission's resolution making determinations and requesting that
any election upon that question be called, held, and conducted only
within that district.  Any petition so filed shall be immediately
examined and certified by the executive officer by the same method
and in the same manner as provided in Sections 56707 to 56711,
inclusive, for the examination of petitions by the executive officer.
  The commission shall forward the proposal for an election upon the
question of a merger or the establishment of a subsidiary district
only within the district to be merged or established as a subsidiary
district, if the executive officer certifies that any petition so
filed was signed by either of the following:
   (a) In the case of a registered voter district, by not less than
10 percent of the registered voters of the district.
   (b) In the case of a landowner-voter district, by not less than 10
percent of the number of landowner-voters within the district who
also own not less than 10 percent of the assessed value of land
within the district.
  SEC. 244.  Section 57087.7 of the Government Code is amended and
renumbered to read:
   57109.  At any time prior to the  completion of the protest
hearing by the commission and the adoption of a resolution ordering a
reorganization that includes an incorporation and the establishment
of a subsidiary district or a merger, a petition may be filed with
the executive officer referring, by date of adoption, to the
commission's resolution making determinations and requesting that a
separate election be called, held, and conducted only within that
district on the establishment of the subsidiary district or the
merger.  That election shall be conducted at the same time as the
election on the incorporation.  Any petition so filed shall be
immediately examined and certified by the executive officer by the
same method and in the same manner as provided in Sections 56707 to
56711, inclusive, for the examination of petitions by the executive
officer.  The commission shall call, hold, and conduct any election
upon the question of a merger or the establishment of a subsidiary
district only within the district to be merged or established as a
subsidiary district, if the executive officer certifies that any
petition so filed was signed by either of the following:
   (a) In the case of a registered voter district, by not less than
10 percent of the registered voters of the district.
   (b) In the case of a landowner-voter district, by not less than 10
percent of the number of landowner-voters within the district who
also own not less than 10 percent of the assessed value of land
within the district.
  SEC. 245.  Section 57088 of the Government Code is amended and
renumbered to read:
   57110.  In any resolution approving, subject to the confirmation
of the voters, both an original and an alternative proposal as
determined by the commission pursuant to paragraph (2) of subdivision
(a) of Section 56863, the ballot at the election shall enable those
voting to do one of the following:
   (a) Disapprove both proposals.
   (b) Approve either the original proposal or the alternative
proposal.
   The board of supervisors shall adopt a resolution confirming the
proposal which was favored by a majority of votes cast at the
election.  Where both proposals were favored by a majority of the
votes cast, the board of supervisors shall adopt a resolution
confirming the proposal which received the greater number of votes.

  SEC. 245.5.  Section 57089 of the Government Code is amended and
renumbered to read:
   57111.  In any reorganization proceeding where the component
changes of organization would not individually require a confirmation
election, no confirmation election shall be required to approve the
reorganization.
  SEC. 246.  Section 57090 of the Government Code is amended to read:

   57090.  (a) Except as otherwise provided in subdivision (b), if
proceedings are terminated, either by majority protest as provided in
Sections 57075, 57076, and 57077, or if a majority of voters do not
confirm the change of organization or reorganization as provided in
Section 57179, no substantially similar proposal for a change of
organization or reorganization of the same or substantially the same
territory may be filed with the commission within two years after the
date of adoption of the certificate of termination adopted by the
commission if the proposal included an incorporation or city
consolidation and within one year for any other change of
organization or reorganization.
   (b) The commission may waive the requirements of subdivision (a)
if it finds these requirements are detrimental to the public
interest.
  SEC. 247.  Section 57091 of the Government Code is amended and
renumbered to read:
   57112.  (a) Except as otherwise provided in subdivision (b), if
proceedings are terminated by failure of a majority of voters to
confirm a resolution ordering merger or establishment of a subsidiary
district, no new proposal for a merger or establishment of a
subsidiary district involving the same district may be filed with the
commission within two years of the date of the certification adopted
by the commission, pursuant to Section 57179.
   (b) The commission may waive the requirements of subdivision (a)
if it finds these requirements are detrimental to the public
interest.
  SEC. 248.  Section 57092 of the Government Code is amended and
renumbered to read:
   57113.  (a) Notwithstanding Section 57081, 57102, 57107, 57108, or
57111, for any proposal that was initiated by the commission
pursuant to subdivision (a) of Section 56375, the commission shall
forward the change of organization or reorganization for confirmation
by the voters if the commission finds either of the following:
   (1) In the case of inhabited territory, that a petition requesting
that the proposal be submitted to confirmation by the voters has
been signed by either of the following:
   (A) At least 10 percent of the number of landowners within any
affected district within the affected territory who own at least 10
percent of the assessed value of land within the territory.  However,
if the number of landowners within an affected district is less than
300, the petition requesting the proposal to be submitted to the
voters shall be signed by at least 25 percent of the landowners who
own at least 25 percent of the assessed value of land within the
territory of the affected district.
   (B) At least 10 percent of the voters entitled to vote as a result
of residing within, or owning land within, any affected district
within the affected territory.  However, if the number of voters
entitled to vote within an affected district is less than 300, the
petition requesting the proposal to be submitted to the voters shall
be signed by at least 25 percent of the voters entitled to vote.
   (2) In the case of a landowner-voter district, that the territory
is uninhabited and a petition requesting that the proposal be
submitted to confirmation by the voters has been signed by at least
10 percent of the number of landowners within any affected district
within the affected territory, owning at least 10 percent of the
assessed value of land within the territory.  However, if the number
of voters entitled to vote within an affected district is less than
300, the petition requesting the proposal to be submitted to the
voters shall be signed by at least 25 percent of the voters entitled
to vote.
   (b) The petition shall be filed with the commission prior to the
conclusion of the protest hearing.
  SEC. 249.  Section 57093 of the Government Code is amended and
renumbered to read:
   57114.  (a) Notwithstanding Section 56854 and Section 57089, for
any proposal for the dissolution of one or more districts and the
annexation of all or substantially all of their territory to another
district, the commission shall forward the change of organization or
reorganization for confirmation by the voters if the commission finds
either of the following:
   (1) In the case of inhabited territory, that a petition requesting
that the proposal be submitted to confirmation by the voters has
been signed by either of the following:
   (A) At least 25 percent of the number of landowners within any
affected district within the affected territory who own at least 25
percent of the assessed value of land within the territory.
   (B) At least 25 percent of the voters entitled to vote as a result
of residing within, or owning land within, any affected district
within the affected territory.
   (2) In the case of a landowner-voter district, that the territory
is uninhabited and a petition requesting that the proposal be
submitted to confirmation by the voters has been signed by at least
25 percent of the number of landowners within any affected district
within the affected territory, owning at least 25 percent of the
assessed value of land within the territory of that district.
   (b) If a petition that meets the requirements of this section has
been filed, the commission shall approve the proposal subject to
confirmation by the voters of each district that has filed such a
petition.  The voter confirmation requirements set forth in
subdivision (a) shall not apply to any proposal initiated by the
commission under Section 56375 or where each affected district has
consented to the proposal by a resolution adopted by a majority vote
of its board of directors.
  SEC. 250.  Section 57100 of the Government Code is amended and
renumbered to read:
   57115.  Any resolution of the commission forwarding a change of
organization or a reorganization for confirmation by the voters
shall, in addition to any applicable requirements contained in
Sections 57100 to 57111, inclusive, do all of the following:
   (a) Designate the affected territory within which the special
election or elections shall be held.
   (b) Provide for the question or questions to be submitted to the
voters.
   (c) Specify any terms or conditions provided for in the change of
organization or reorganization.
   (d) State the vote required for confirmation of the change of
organization or reorganization.
  SEC. 251.  Section 57101 of the Government Code is amended and
renumbered to read:
   57116.  In addition to any other requirements, any resolution of
the commission ordering an incorporation subject to an election shall
do all of the following:
   (a) Provide for the election of the officers of the proposed city
required to be elected, except as provided in Section 56727 and
except as to officers designated as appointive, pursuant to Section
56723.
   (b) Provide for the election on the question of whether members of
the city council in future elections are to be elected by district
or at large.
   (c) If the petition so requests, state that the voters may express
a preference as to whether or not the city shall operate under the
city manager form of government, the ballot question being for or
against the city manager form of government.
   (d) If the petition so requests, state that the voters may express
their preference between names for the new city.
  SEC. 252.  Section 57102 of the Government Code is amended and
renumbered to read:
   57117.  In addition to any other requirements, any resolution of
the commission ordering a consolidation of cities subject to an
election shall do all of the following:
   (a) Provide for the election of officers of the successor city
required to be elected.
   (b) State that the voters may express their preference as to the
name of the successor city.
  SEC. 253.  Section 57103 of the Government Code is amended and
renumbered to read:
   57118.  In any resolution ordering a change of organization or
reorganization subject to the confirmation of the voters, the
commission shall determine that an election will be held:
   (a) Within the territory of each city or district ordered to be
incorporated, formed, disincorporated, dissolved or consolidated.
   (b) Within the entire territory of each district ordered to be
merged with or established as a subsidiary district of a city, or
both within the district and within the entire territory of the city
outside the boundaries of the district.
   (c) If the executive officer certifies a petition pursuant to
Section 57108 or 57109, within the territory of the district ordered
to be merged with or established as a subsidiary district of a city.

   (d) Within the territory ordered to be annexed or detached.
   (e) If ordered by the commission pursuant to Section 56876 or
56759, both within the territory ordered to be annexed or detached
and within all or the part of the city or district which is outside
of the territory.
   (f) If the election is required by Section 57114, separately
within the territory of each affected district that has filed a
petition meeting the requirements of Section 57114.
  SEC. 254.  Section 57103.1 of the Government Code is amended and
renumbered to read:
   57119.  Notwithstanding Section  57118, in any resolution ordering
a special reorganization, the commission shall call an election in
both of the following territories:
   (a) The territory ordered to be detached from the city.
   (b) The entire territory of the city from which the detachment is
ordered to occur.
  SEC. 255.  Section 57104 of the Government Code is amended and
renumbered to read:
   57120.  In addition to any other requirements, any resolution of
the commission ordering an incorporation or a formation subject to an
election shall provide for the establishment of the appropriations
limit determined pursuant to Section 56811.
  SEC. 256.  Section 57125 of the Government Code is amended to read:

   57125.  Special elections called within all or any part of a city
or registered-voter district shall be governed by the general
election provisions and the local election provisions of the
Elections Code, so far as they may be applicable, relating to the
qualifications of voters, the manner of voting, the form of the
ballot, the duties of precinct and election officers, the canvassing
of returns, and all other particulars.  If the commission determines
that there is any inconsistency:
   (a) Between the general elections provisions and the local
elections provisions of the Elections Code, the local elections
provisions shall control.
   (b) Between this division and the Elections Code, this division
shall control.
  SEC. 257.  Section 57126 of the Government Code is amended to read:

   57126.  Special elections called within all or any part of a
landowner-voter district shall be governed by the general elections
provisions of the principal act, so far as they may be applicable,
relating to the qualifications of voters, the manner of voting, the
form of the ballot, the duties of precinct and election officers, the
canvassing of returns, and all other particulars.  To the extent of
any inconsistency between the provisions of this division and the
principal act as determined by the commission, the provisions of this
division shall control.
  SEC. 258.  Section 57127 of the Government Code is amended to read:

   57127.  If the commission calls any special election within all or
any part of any district, any references in the principal act to the
board of directors of the district and to the clerk or secretary of
the district shall be deemed to mean the commission and the executive
officer, respectively.
  SEC. 259.  Section 57129 of the Government Code is amended to read:

   57129.  Where any records of a city or a district are required for
the purpose of calling, holding, or conducting any special election
called by the commission pursuant to this division, those records or
certified copies of those records shall be delivered, upon request,
to the elections official by the city or district officer having
custody of the records or copies and shall be returned to that
officer immediately after the canvass of the election returns.  All
other election records, documents, instruments, and election
supplies, including, but not limited to, rosters, ballots, and tally
sheets, shall be retained or disposed of by the elections official in
the manner provided by law.
  SEC. 260.  Section 57130 of the Government Code is amended to read:

   57130.  The elections official shall cause notice of each change
of organization or reorganization election to be given by
publication, posting, and mailing as provided in Chapter 1
(commencing with Section 57025) of Part 4.
  SEC. 260.5.  Section 57131 of the Government Code is amended to
read:
   57131.  The notice of election required to be given by Section
57130 shall contain all of the matters specified in Section 57115.
  SEC. 261.  Section 57133 of the Government Code is amended to read:

   57133.  The question or questions to be submitted at any special
election or elections called pursuant to this part shall be in
substantially the following form:
   (a) For an incorporation:  "Shall the order adopted on ____, 20
__, by the Local Agency Formation Commission of ____ County ordering
the incorporation of the territory described in the order and
designated in the order as ____ (insert the distinct short form
designation previously assigned by the commission) be confirmed?"
   (b) For an annexation:  "Shall the order adopted on ____, 20 __,
by the ____ (insert Local Agency Formation Commission) ordering the
annexation to ____ (insert city or district) of the territory
described in that order and designated as ____ (insert the short form
designation previously assigned by the commission) be confirmed?"
   (c) For a detachment:  "Shall the order adopted on ____, 20 __, by
the ____ (insert Local Agency Formation Commission) ordering the
detachment from the ____ (insert city or district) of the territory
described in the order and designated in the order as ____ (insert
the short form designation previously assigned by the commission) be
confirmed?"
   (d) For a city consolidation:  "Shall the order adopted on ____,
20 __, by the ____ (insert Local Agency Formation Commission) of the
County of ____ (insert name of city) ordering the consolidation of
the Cities of ____ (insert names of all cities ordered consolidated)
into a single city known as the City of ____ be confirmed?"
   (e) For a disincorporation:  "Shall the order adopted on ____, 20
__, by the Local Agency Formation Commission of the County of ____
ordering the disincorporation of the City of ____ be confirmed?"
   (f) For a reorganization:  "Shall the order adopted on ____, 20
__, by the ____ (insert Local Agency Formation Commission) ordering a
reorganization affecting the ____ (insert names of all affected
cities or districts) and providing for ____ (insert list of all
changes of organization or new cities proposed to be incorporated or
districts to be formed) be confirmed?"
   (g) For a district dissolution:  "Shall the order adopted on ____,
20 __, by the Local Agency Formation Commission of the County of
____ ordering the dissolution of the ____ district be confirmed?"
   (h) For a district consolidation:  "Shall the order adopted on
____, 20 __, by the Local Agency Formation Commission of the County
of ____ ordering the consolidation of ____ (insert the names of all
districts ordered consolidated) into a single district known as the
____ District be confirmed?"
   (i) For a merger:  "Shall the order adopted on ____, 20 __, by the
Local Agency Formation Commission of the County of ____ ordering the
merger of the ____ District with the City of ____ be confirmed?"
   (j) For establishment of a subsidiary district:  "Shall the order
adopted on ____, 20 __, by the Local Agency Formation Commission of
the County of ____ ordering the ____  District established as a
subsidiary district of the City of ____ be confirmed?"
   (k) For a district formation, use form of question under principal
act of district being formed.  If none, use substantially the
following form:  "Shall the order adopted on ____, 20 __, by the
Local Agency Formation Commission of ____ County ordering the
formation of a district in the territory described, known as ____, be
approved?"
  SEC. 262.  Section 57138 of the Government Code is amended to read:

   57138.  If the commission orders both a merger and the
establishment of a subsidiary district, questions on each matter
shall be printed on the ballot, one above the other.  Immediately
preceding the first question, there shall be printed in the words
"Vote on both questions."
  SEC. 263.  Section 57144 of the Government Code is amended to read:

   57144.  Within five days after a special election is called
pursuant to this part, the executive officer shall submit to the
commission, for its approval or modification, an impartial analysis
of the proposed incorporation or change of organization.
   The impartial analysis shall not exceed 500 words in length in
addition to a general description of the boundaries of the territory
affected.
   The commission shall approve or modify the analysis and submit the
analysis to the elections official no later than the last day for
submission of rebuttal arguments.
   Immediately below the impartial analysis there shall be printed in
no less than 10-point bold type a legend substantially as follows:
   "The above statement is an impartial analysis of Proposition ____.
  If you desire a copy of the proposition, please call the elections
official's office at (insert telephone number) and a copy will be
mailed at no cost to you."
  SEC. 264.  Section 57145 of the Government Code is amended to read:

   57145.  (a) The legislative body of any affected agency, or any
member or members of the legislative body of any affected agency
authorized by it, or any individual voter or association of citizens
entitled to vote on the change of organization or reorganization, or
any combination of those voters and association of citizens may file
a written argument for, or a written argument against, the question
to be submitted to the voters.
   Arguments shall not exceed 300 words in length and shall be filed
with the elections official no later than the last day for submission
of arguments specified by Section 57146.
   (b) If more than one argument for or more than one argument
against the proposal is filed with the elections official within the
time prescribed in Section 57145, the elections official shall select
one of the arguments for printing and distribution to the voters.
   In selecting the arguments, the elections official shall give
preference and priority in the order named to the following
arguments:
   (1) The legislative body of an affected agency or any authorized
member or members of the legislative body.
   (2) Individual voters or association of citizens or a combination
of voters and associations.
  SEC. 265.  Section 57146 of the Government Code is amended to read:

   57146.  (a) On the basis of the time reasonably necessary to
prepare and print the arguments, analysis, and sample ballots for the
election, the elections official shall fix and determine a
reasonable date prior to the election after which no arguments for or
against the measure may be submitted for printing and distribution
to the voters.  Notice of the date fixed shall be published in
accordance                                              with Section
56153 in a newspaper of general circulation which is circulated in
the affected territory.  Arguments may be changed until and including
the date fixed by the elections official.
   (b) The notice shall contain all of the following information:
   (1) A statement of the proposition to be voted on and a general
description of the boundaries of the affected territory.
   (2) An invitation to any registered voter or association of
citizens entitled to vote on the proposal to submit and file with the
elections official for printing and distribution in the ballot
pamphlet, an argument for or an argument against the proposal.
   (3) The date of the election.
   (4) A statement that only one argument for and one argument
against will be selected and printed in the ballot pamphlet.
   (5) A statement that arguments shall not exceed 300 words in
length and shall be accompanied by not more than five signatures.
  SEC. 266.  Section 57148 of the Government Code is amended to read:

   57148.  (a) The elections official shall cause a ballot pamphlet
concerning the proposal to be printed and mailed to each voter
entitled to vote on the question.
   The ballot pamphlet shall contain all of the following information
in the order prescribed:
   (1) The impartial analysis of the proposition prepared by the
commission.
   (2) One argument for the proposal, if any.
   (3) One rebuttal to the argument for the proposal, if any.
   (4) One argument against the proposal, if any.
   (5) One rebuttal to the argument against the proposal, if any.
   A copy of the complete text of the proposition shall be made
available by the elections official, to any voter upon request.
   (b) The elections official shall mail a ballot pamphlet to each
voter entitled to vote in the election at least 10 days prior to the
date of the election.  The ballot pamphlet is "official matter"
within the meaning of Section 13303 of the Elections Code.
  SEC. 267.  Section 57149 of the Government Code is amended to read:

   57149.  The canvass of ballots cast at any election held pursuant
to this division shall be conducted pursuant to Sections 15300 to
15309, inclusive, of the Elections Code.  The elections official
shall immediately, upon the completion of any canvass, report the
results to the executive officer of the local agency formation
commission.
  SEC. 268.  Section 57150 of the Government Code is amended to read:

   57150.  All proper expenses incurred in conducting elections for a
change of organization or reorganization pursuant to this chapter
shall be paid, unless otherwise provided by agreement between the
commission and the proponents, as follows:
   (a) In the case of annexation or detachment proceedings, by the
local agency to or from which territory is annexed, or from which
territory is detached, or was proposed to be annexed or detached.
   (b) In the case of incorporation or formation proceedings, by the
newly incorporated city or the newly formed district, if successful,
or by the county within which the proposed city or district is
located if the incorporation proceedings are terminated.  In the case
of a separate election for city officers held following the election
for incorporation pursuant to Section 56825.5, by the newly
incorporated city.
   (c) In the case of disincorporation or dissolution proceedings,
from the remaining assets of the disincorporated city or dissolved
district or by the city proposed to be disincorporated or the
district proposed to be dissolved if disincorporation or dissolution
proceedings are terminated.
   (d) In the case of consolidation proceedings, by the successor
city or district or by the local agencies proposed to be
consolidated, to be paid by those local agencies in proportion to
their respective assessed values, if proceedings are terminated.
   (e) In the case of a reorganization:
   (1) If the reorganization is ordered, by the affected local
agencies or successor local agencies, as the case may be, for any of
the above-enumerated changes of organization which may be included in
the particular reorganization, to be paid by those local agencies in
proportion to their assessed value.
   (2) If the reorganization proceedings are terminated or the
proposal is defeated, by the county within which the city is located.

  SEC. 269.  Section 57175 of the Government Code is repealed.
  SEC. 270.  Section 57176 of the Government Code is amended to read:

   57176.  The commission shall execute, within 30 days of the
canvass of the election, a certificate of completion confirming the
order of the change of organization or reorganization if a majority
of votes cast upon the question are in favor of the change of
organization or reorganization in any of the following circumstances:

   (a) At an election called in the territory ordered to be organized
or reorganized.
   (b) At an election called within the territory ordered to be
organized or reorganized and within the territory of the affected
agency.
   (c) At both an election called within the area to be organized or
reorganized and an election called within the territory of an
affected city, when required by the commission pursuant to Section
56759.
  SEC. 271.  Section 57176.1 of the Government Code is amended to
read:
   57176.1.  Notwithstanding Section 57176, the commission shall
execute, within 30 days of the canvass of the election, a certificate
of completion confirming a special reorganization if a majority of
votes cast upon the question are in favor of the special
reorganization in both of the following circumstances:
   (a) An election called in the territory ordered to be detached
from the city.
   (b) An election called in the entire territory of the city from
which the detachment is ordered to occur.
  SEC. 272.  Section 57177 of the Government Code is amended to read:

   57177.  The commission shall execute a certificate of completion
confirming either the order of a merger or the order for the
establishment of a subsidiary district in the following manner:
   (a) Where the question submitted to the voters was only upon
merger or only upon establishment of a subsidiary district, the
commission shall execute a certificate of completion confirming the
order if a majority of the votes cast on the question favored the
order either:
   (1) At an election called only within the district.
   (2) At each election, where one election was called within the
district and another election was called within the territory of the
city outside the boundaries of the district.
   (b) Where both the question of merger and the question of
establishment of a subsidiary district were submitted to the voters
within the district only and both questions were favored by a
majority of the voters, the commission shall order that change of
organization favored by the greater number of voters.  Where the
number of votes was the same on both questions, the merger shall be
ordered.
   (c) Where both the question of merger and the question of
establishment of a subsidiary district were submitted at an election
called both within the district and at an election within the
territory of the city outside the district boundaries, and both
questions were favored by a majority of the voters in both areas,
that change of organization receiving the greater number of votes in
both elections shall be completed.  Where the number of votes was the
same, or where the question of merger received the greater number of
votes in one of the elections, a merger shall be completed.
  SEC. 273.  Section 57177.5 of the Government Code is amended to
read:
   57177.5.  In the case of elections on an order of consolidation of
cities or districts, the commission shall take one of the following
actions:
   (a) Execute a certificate of completion confirming the order of
consolidation if, within the territory of each city or district
ordered to be consolidated, a majority of the votes cast on the
question favored the consolidation.
   (b) Execute a certificate of completion terminating proceedings
if, in one of the cities or districts ordered to be consolidated, the
votes cast in favor of consolidation did not constitute a majority.

  SEC. 274.  Section 57178 of the Government Code is amended to read:

   57178.  In addition to any other requirements, the certificate of
completion confirming an order of incorporation or consolidation of
cities shall do all of the following:
   (a) Give the name of the new or successor city favored by the
electors.
   (b) Declare the persons receiving the highest number of votes for
the several offices of the new or successor city to be elected to
those offices.  If the incorporation applicant requested that the
first election for city officers was to occur after the election on
the proposal which included incorporation, the resolution shall call
an election at which city officers shall be elected.
   (c) In the case of an incorporation, declare which system of
electing council members was favored, that is, election by district
or election at large; and declare whether the city manager form of
government was favored by the electors.
  SEC. 275.  Section 57179 of the Government Code is amended to read:

   57179.  If the majority of the votes cast is against the change of
organization or reorganization, the commission shall execute a
certificate of termination proceedings.
  SEC. 276.  Section 57200 of the Government Code is amended to read:

   57200.  (a) Immediately after completion of proceedings ordering a
change of organization or reorganization without election or
confirming an order for a change of organization or reorganization
after confirmation by the voters, the executive officer shall prepare
and execute a certificate of completion and shall make the filings
required by this division.
   (b) Whenever the commission approves the inclusion of any
territory of a landscape and lighting assessment district within a
city, the executive officer shall notify the clerk of the landscape
and lighting assessment district or other person designated by the
district to receive notification.
  SEC. 277.  Section 57201 of the Government Code is amended to read:

   57201.  The certificate of completion prepared and executed by the
executive officer shall contain all of the following information:
   (a) The name of each newly incorporated city, each new district,
and the name of each existing local agency for which a change of
organization or reorganization was ordered and the name of the county
within which any new or existing local agencies are located.
   (b) A statement of each type of change of organization or
reorganization ordered.
   (c) A description of the boundaries of the new city ordered
incorporated, the  new district ordered formed or of any territory
affected by the change of organization or reorganization, which
description may be made by reference to a map and legal description
showing the boundaries attached to the certificate.
   (d) Any terms and conditions of the change of organization or
reorganization.  The terms and conditions shall provide public
utilities, as defined in Section 216 of the Public Utilities Code, 90
days following the recording of the certificate of completion to
make the necessary changes to impacted utility customer accounts.
  SEC. 278.  Section 57302 of the Government Code is amended to read:

   57302.  The general provisions of this part shall apply only if,
and to the extent that, the terms and conditions of any change of
organization or reorganization do not make specific provision for any
of the matters referred to in this part.  If a change of
organization or a reorganization specifically provides for, and is
made subject to any of, the terms and conditions authorized by
Section 56886, the specific terms and conditions shall control over
the general provisions of this part.  Any of those terms and
conditions may be provided for, and be made applicable to, any
affected county, affected city, or affected district, to all or any
part of the territory of the county, city, or district, to any
territory proposed to be annexed to the county, city, or district and
to the owner or owners of property within that territory.
  SEC. 279.  Section 57303 of the Government Code is amended to read:

   57303.  If no determination is made pursuant to subdivision (d) of
Section 56886, the principal amount of bonded indebtedness which may
be incurred or assumed by any city, county, or district, under any
statute or charter provision imposing a limitation on bonded
indebtedness, shall not be affected by any change of organization or
reorganization.
  SEC. 280.  Section 57379 of the Government Code is amended to read:

   57379.  If the first general municipal election following an
incorporation election will occur less than one year after the
effective date of incorporation, or occurred on or after November 1,
1987, and less than one year after the incorporation election, of the
five elected members of the city council, the three receiving the
lowest number of votes shall hold office until the second general
municipal election following the incorporation election and until
their successors are elected and qualified, and the two receiving the
highest number of votes shall hold office until the third general
municipal election following the incorporation election and until
their successors are elected and qualified.
   The first general municipal election following the incorporation
election shall not be held unless either a proposition is to be voted
upon or offices other than city council member offices are to be
filled.
   In the event that, pursuant to Section 56727, the first election
for city council members was held after the election on the
incorporation proposal, the term "incorporation election" in this
section means the first election for city council members.
  SEC. 281.  Section 57384 of the Government Code is amended to read:

   57384.  (a) Except as provided in subdivision (b), whenever a city
has been incorporated from territory formerly unincorporated, the
board of supervisors shall continue to furnish, without additional
charge, to the area incorporated all services furnished to the area
prior to the incorporation.  Those services shall be furnished for
the remainder of the fiscal year during which the incorporation
became effective or until the city council requests discontinuance of
the services, whichever occurs first.
   (b) This subdivision applies only to incorporations for which the
petition or resolution of application for incorporation is filed with
the commission on or after January 1, 1987.  Prior to the commission
adopting a resolution making determinations, the board of
supervisors may request that the city reimburse the county for the
net cost of services provided pursuant to subdivision (a).  The
commission shall impose this requirement as a term and condition of
its resolution.  The city shall be obligated to reimburse the county
within five years of the effective date of the incorporation or for a
period in excess of five years, if the board of supervisors agrees
to a longer period.  As used in this subdivision, "net cost of
services" means the total direct and indirect expense to the county
of providing services, as determined pursuant to paragraph (2) of
subdivision (c) of Section 56810, adjusted by any subsequent change
in the California Consumer Price Index, less any revenues which the
county retains that were generated from the formerly unincorporated
territory during the period of time the services are furnished
pursuant to subdivision (a). This subdivision applies only to those
services which are to be assumed by the city.
   (c) At the request of the city council, the board of supervisors,
by resolution, may determine to furnish, without charge, to the area
incorporated all or a portion of services furnished to the area prior
to the incorporation for an additional period of time after the end
of the fiscal year during which the incorporation became effective.
The additional period of time after the end of the fiscal year during
which the incorporation became effective for which the board of
supervisors determines to provide services, without charge, and the
specific services to be provided shall be specifically stated in the
resolution adopted by the board of supervisors.
  SEC. 282.  Section 57402 of the Government Code is amended to read:

   57402.  After ascertaining that disincorporation has carried, the
commission shall determine and certify in a written statement to the
board of supervisors the indebtedness of the city, the amount of
money in its treasury, and the amount of any tax levy or other
obligation due the city which is unpaid or has not been collected.
  SEC. 283.  Section 57404 of the Government Code is amended to read:

   57404.  If the commission does not provide the board of
supervisors with the certified statement required by Section 57402,
the board shall make the determinations provided for in that section.

  SEC. 285.  Section 99 of the Revenue and Taxation Code is amended
to read:
   99.  (a) For the purposes of the computations required by this
chapter:
   (1) In the case of a jurisdictional change, other than a city
incorporation or a formation of a district as defined in Section
2215, the auditor shall adjust the allocation of property tax revenue
determined pursuant to Section 96 or 96.1, or the annual tax
increment determined pursuant to Section 96.5, for local agencies
whose service area or service responsibility would be altered by the
jurisdictional change, as determined pursuant to subdivision (b) or
(c).
   (2) In the case of a city incorporation, the auditor shall assign
the allocation of property tax revenues determined pursuant to
Section 56810 of the Government Code and the adjustments in tax
revenues that may occur pursuant to Section 56815 of the Government
Code to the newly formed city or district and shall make the
adjustment as determined by Section 56810 in the allocation of
property tax revenue determined pursuant to Section 96 or 96.1 for
each local agency whose service area or service responsibilities
would be altered by the incorporation.
   (3) In the case of a formation of a district as defined in Section
2215, the auditor shall assign the allocation of property tax
revenues determined pursuant to Section 56810 of the Government Code
to the district and shall make the adjustment as determined by
Section 56810 in the allocation of property tax revenue determined
pursuant to Section 96 or 96.1 for each local agency whose service
area or service responsibilities would be altered by the formation.
   (b) Upon the filing of an application or a resolution pursuant to
the Cortese-Knox Local Government Reorganization Act of 1985
(Division 3 (commencing with Section 56000) of Title 5 of the
Government Code), but prior to the issuance of a certificate of
filing, the executive officer shall give notice of the filing to the
assessor and auditor of each county within which the territory
subject to the jurisdictional change is located.  This notice shall
specify each local agency whose service area or responsibility will
be altered by the jurisdictional change.
   (1) (A) The county assessor shall provide to the county auditor,
within 30 days of the notice of filing, a report which identifies the
assessed valuations for the territory subject to the jurisdictional
change and the tax rate area or areas in which the territory exists.

   (B) The auditor shall estimate the amount of property tax revenue
generated within the territory that is the subject of the
jurisdictional change during the current fiscal year.
   (2) The auditor shall estimate what proportion of the property tax
revenue determined pursuant to paragraph (1) is attributable to each
local agency pursuant to Section 96.1 and Section 96.5.
   (3) Within 45 days of notice of the filing of an application or
resolution, the auditor shall notify the governing body of each local
agency whose service area or service responsibility will be altered
by the amount of, and allocation factors with respect to, property
tax revenue estimated pursuant to paragraph (2) that is subject to a
negotiated exchange.
   (4) Upon receipt of the estimates pursuant to paragraph (3) the
local agencies shall commence negotiations to determine the amount of
property tax revenues to be exchanged between and among the local
agencies.  This negotiation period shall not exceed 60 days.
   The exchange may be limited to an exchange of property tax
revenues from the annual tax increment generated in the area subject
to the jurisdictional change and attributable to the local agencies
whose service area or service responsibilities will be altered by the
proposed jurisdictional change.  The final exchange resolution shall
specify how the annual tax increment shall be allocated in future
years.
   (5) In the event that a jurisdictional change would affect the
service area or service responsibility of one or more special
districts, the board of supervisors of the county or counties in
which the districts are located shall, on behalf of the district or
districts, negotiate any exchange of property tax revenues.  Prior to
entering into negotiation on behalf of a district for the exchange
of property tax revenue, the board shall consult with the affected
district.  The consultation shall include, at a minimum, notification
to each member and executive officer of the district board of the
pending consultation and provision of adequate opportunity to comment
on the negotiation.
   (6) Notwithstanding any other provision of law, the executive
officer shall not issue a certificate of filing pursuant to Section
56658 of the Government Code until the local agencies included in the
property tax revenue exchange negotiation, within the 60-day
negotiation period, present resolutions adopted by each such county
and city whereby each county and city agrees to accept the exchange
of property tax revenues.
   (7) In the event that the commission modifies the proposal or its
resolution of determination, any local agency whose service area or
service responsibility would be altered by the proposed
jurisdictional change may request, and the executive officer shall
grant, 15 days for the affected agencies, pursuant to paragraph (4)
to renegotiate an exchange of property tax revenues.  Notwithstanding
the time period specified in paragraph (4), if the resolutions
required pursuant to paragraph (6) are not presented to the executive
officer within the 15-day period, all proceedings of the
jurisdictional change shall automatically be terminated.
   (8) In the case of a jurisdictional change that consists of a city'
s qualified annexation of unincorporated territory, an exchange of
property tax revenues between the city and the county shall be
determined in accordance with subdivision (e) if that exchange of
revenues is not otherwise determined pursuant to either of the
following:
   (A) Negotiations completed within the applicable period or periods
as prescribed by this subdivision.
   (B) A master property tax exchange agreement among those local
agencies, as described in subdivision (d).
   For purposes of this paragraph, a qualified annexation of
unincorporated territory means an annexation, as so described, for
which proceedings before the relevant local agency formation
commission are initiated, as provided in Section 56651 of the
Government Code, on or after January 1, 1998, and on or before
January 1, 2005.
   (9) No later than the date on which the certificate of completion
of the jurisdictional change is recorded with the county recorder,
the executive officer shall notify the auditor or auditors of the
exchange of property tax revenues and the auditor or auditors shall
make the appropriate adjustments as provided in subdivision (a).
   (c) Whenever a jurisdictional change is not required to be
reviewed and approved by a local agency formation commission, the
local agencies whose service area or service responsibilities would
be altered by the proposed change, shall give notice to the State
Board of Equalization and the assessor and auditor of each county
within which the territory subject to the jurisdictional change is
located.  This notice shall specify each local agency whose service
area or responsibility will be altered by the jurisdictional change
and request the auditor and assessor to make the determinations
required pursuant to paragraphs (1) and (2) of subdivision (b).  Upon
notification by the auditor of the amount of, and allocation factors
with respect to, property tax subject to exchange, the local
agencies, pursuant to the provisions of paragraphs (4) and (6) of
subdivision (b), shall determine the amount of property tax revenues
to be exchanged between and among the local agencies.
Notwithstanding any other provision of law, no such jurisdictional
change shall become effective until each county and city included in
these negotiations agrees, by resolution, to accept the negotiated
exchange of property tax revenues.  The exchange may be limited to an
exchange of property tax revenue from the annual tax increment
generated in the area subject to the jurisdictional change and
attributable to the local agencies whose service area or service
responsibilities will be altered by the proposed jurisdictional
change.  The final exchange resolution shall specify how the annual
tax increment shall be allocated in future years.  Upon the adoption
of the resolutions required pursuant to this section, the adopting
agencies shall notify the auditor who shall make the appropriate
adjustments as provided in subdivision (a).  Adjustments in property
tax allocations made as the result of a city or library district
withdrawing from a county free library system pursuant to Section
19116 of the Education Code shall be made pursuant to Section 19116
of the Education Code, and this subdivision shall not apply.
   (d) With respect to adjustments in the allocation of property
taxes pursuant to this section, a county and any local agency or
agencies within the county may develop and adopt a master property
tax transfer agreement.  The agreement may be revised from time to
time by the parties subject to the agreement.
   (e) (1) An exchange of property tax revenues that is required by
paragraph (8) of subdivision (b) to be determined pursuant to this
subdivision shall be determined in accordance with all of the
following:
   (A) The city and the county shall mutually select a third-party
consultant to perform a comprehensive, independent fiscal analysis,
funded in equal portions by the city and
               the county, that specifies estimates of all tax
revenues that will be derived from the annexed territory and the
costs of city and county services with respect to the annexed
territory.  The analysis shall be completed within a period not to
exceed 30 days, and shall be based upon the general plan or adopted
plans and policies of the annexing city and the intended uses for the
annexed territory.  If, upon the completion of the analysis period,
no exchange of property tax revenues is agreed upon by the city and
the county, subparagraph (B) shall apply.
   (B) The city and the county shall mutually select a mediator,
funded in equal portions by those agencies, to perform mediation for
a period of not to exceed 30 days.  If, upon the completion of the
mediation period, no exchange of property tax revenues is agreed upon
by the city and the county, subparagraph (C) shall apply.
   (C) The city and the county shall mutually select an arbitrator,
funded in equal portions by those agencies, to conduct an advisory
arbitration with the city and the county for a period of not to
exceed 30 days.  At the conclusion of this arbitration period, the
city and the county shall each present to the arbitrator its last and
best offer with respect to the exchange of property tax revenues.
The arbitrator shall select one of the offers and recommend that
offer to the governing bodies of the city and the county.  If the
governing body of the city or the county rejects the recommended
offer, it shall do so during a public hearing, and shall, at the
conclusion of that hearing, make written findings of fact as to why
the recommended offer was not accepted.
   (2) Proceedings under this subdivision shall be concluded no more
than 150 days after the auditor provides the notification pursuant to
paragraph (3) of subdivision (b), unless one of the periods
specified in this subdivision is extended by the mutual agreement of
the city and the county.  Notwithstanding any other provision of law,
except for those conditions that are necessary to implement an
exchange of property tax revenues determined pursuant to this
subdivision, the local agency formation commission shall not impose
any fiscal conditions upon a city's qualified annexation of
unincorporated territory that is subject to this subdivision.
   (f) Except as otherwise provided in subdivision (g), for the
purpose of determining the amount of property tax to be allocated in
the 1979-80 fiscal year and each fiscal year thereafter for those
local agencies that were affected by a jurisdictional change which
was filed with the State Board of Equalization after January 1, 1978,
but on or before January 1, 1979.  The local agencies shall
determine by resolution the amount of property tax revenues to be
exchanged between and among the affected agencies and notify the
auditor of the determination.
   (g) For the purpose of determining the amount of property tax to
be allocated in the 1979-80 fiscal year and each fiscal year
thereafter, for a city incorporation that was filed pursuant to
Sections 54900 to 54904 after January 1, 1978, but on or before
January 1, 1979, the amount of property tax revenue considered to
have been received by the jurisdiction for the 1978-79 fiscal year
shall be equal to two-thirds of the amount of property tax revenue
projected in the final local agency formation commission staff report
pertaining to the incorporation multiplied by the proportion that
the total amount of property tax revenue received by all
jurisdictions within the county for the 1978-79 fiscal year bears to
the total amount of property tax revenue received by all
jurisdictions within the county for the 1977-78 fiscal year.  Except,
however, in the event that the final commission report did not
specify the amount of property tax revenue projected for that
incorporation, the commission shall by October 10, determine pursuant
to Section 54790.3 of the Government Code the amount of property tax
to be transferred to the city.
   The provisions of this subdivision shall also apply to the
allocation of property taxes for the 1980-81 fiscal year and each
fiscal year thereafter for incorporations approved by the voters in
June 1979.
   (h) For the purpose of the computations made pursuant to this
section, in the case of a district formation that was filed pursuant
to Sections 54900 to 54904, inclusive, of the Government Code after
January 1, 1978, but before January 1, 1979, the amount of property
tax to be allocated to the district for the 1979-80 fiscal year and
each fiscal year thereafter shall be determined pursuant to Section
54790.3 of the Government Code.
   (i) For the purposes of the computations required by this chapter,
in the case of a jurisdictional change, other than a change
requiring an adjustment by the auditor pursuant to subdivision (a),
the auditor shall adjust the allocation of property tax revenue
determined pursuant to Section 96 or 96.1 or its predecessor section,
or the annual tax increment determined pursuant to Section 96.5 or
its predecessor section, for each local school district, community
college district, or county superintendent of schools whose service
area or service responsibility would be altered by the jurisdictional
change, as determined as follows:
   (1) The governing body of each district, county superintendent of
schools, or county whose service areas or service responsibilities
would be altered by the change shall determine the amount of property
tax revenues to be exchanged between and among the affected
jurisdictions.  This determination shall be adopted by each affected
jurisdiction by resolution.  For the purpose of negotiation, the
county auditor shall furnish the parties and the county board of
education with an estimate of the property tax revenue subject to
negotiation.
   (2) In the event that the affected jurisdictions are unable to
agree, within 60 days after the effective date of the jurisdictional
change, and if all the jurisdictions are wholly within one county,
the county board of education shall, by resolution, determine the
amount of property tax revenue to be exchanged.  If the jurisdictions
are in more than one county, the State Board of Education shall, by
resolution, within 60 days after the effective date of the
jurisdictional change, determine the amount of property tax to be
exchanged.
   (3) Upon adoption of any resolution pursuant to this subdivision,
the adopting jurisdictions or State Board of Education shall notify
the county auditor who shall make the appropriate adjustments as
provided in subdivision (a).
   (j) For purposes of subdivision (i), the annexation by a community
college district of territory within a county not previously served
by a community college district is an alteration of service area.
The community college district and the county shall negotiate the
amount, if any, of property tax revenues to be exchanged.  In these
negotiations, there shall be taken into consideration the amount of
revenue received from the timber yield tax and forest reserve
receipts by the community college district in the area not previously
served.  In no event shall the property tax revenue to be exchanged
exceed the amount of property tax revenue collected prior to the
annexation for the purposes of paying tuition expenses of residents
enrolled in the community college district, adjusted each year by the
percentage change in population and the percentage change in the
cost of living, or per capita personal income, whichever is lower,
less the amount of revenue received by the community college district
in the annexed area from the timber yield tax and forest reserve
receipts.
   (k) At any time after a jurisdictional change is effective, any of
the local agencies party to the agreement to exchange property tax
revenue may renegotiate the agreement with respect to the current
fiscal year or subsequent fiscal years, subject to approval by all
local agencies affected by the renegotiation.
  SEC. 286.  This act is intended to implement the recommendations of
the Commission on Local Governance for the 21st Century, as
transmitted to the Legislature on January 20, 2000.
  SEC. 287.  Sections 90.5, 97.5, 115.5, and 211.5 of this bill
incorporate amendments to Sections 56828, 56833.1, 56840, and 56857
of the Government Code proposed by both this bill and AB 1495, which
sections are renumbered respectively as Sections 56658, 56666, 56800,
and 56895 of the Government Code in this bill, and Sections 214.5
and 223.5 of this bill also incorporate amendments to Sections 57002
and 57050 of the Government Code proposed by both this bill and AB
1495.  Those sections of this bill shall only become operative if (1)
both bills are enacted and become effective on or before January 1,
2001, (2) each bill amends or repeals Sections 56828, 56833.1, 56840,
56857, 57002, and 57050 of the Government Code, and (3) this bill is
enacted after AB 1495, in which case Sections 56828, 56833.1, 56840,
56857, 57002, and 57050 of the Government Code, as amended by AB
1495, shall remain operative only until the operative date of this
bill, at which time Sections 90.5, 97.5, 115.5, 211.5, 214.5, and
223.5 of this bill shall become operative, and Sections 90, 97, 115,
214, and 223 of this bill and Section 56895 of the Government Code,
as added by Section 211 of this bill, shall not become operative.
  SEC. 288.  (a) Section 123.5 of this bill incorporates amendments
to Section 56845 of the Government Code proposed by both this bill
and AB 1495, which section is renumbered as Section 56815 of the
Government Code in this bill.  Section 123.5 shall only become
operative if (1) both bills are enacted and become effective on or
before January 1, 2001, (2) each bill amends or repeals Section 56845
of the Government Code, (3) AB 2779 is not enacted or as enacted
does not amend that section, and (4) this bill is enacted after AB
1495, in which case Section 56815 of the Government Code, as added by
Section 123 of this bill, and Section 123.7 of this bill shall not
become operative.
   (b) Section 123.7 of this bill incorporates amendments to Section
56845 of the Government Code proposed by both this bill and AB 2779.
It shall become operative if (1) both bills are enacted and become
effective on or before January 1, 2001, (2) each bill enacted amends
or repeals Section 56845 of the Government Code, (3) AB 1495 is not
enacted or as enacted does not amend that section, and (4) this bill
is enacted after AB 2779, in which case Section 56815 of the
Government Code, as added by Section 123 of this bill, and Section
123.5 of this bill shall not become operative.
   (c) Section 123.7 of this bill also incorporates amendments to
Section 56845 of the Government Code proposed by this bill, AB 1495,
and AB 2779.  It shall also become operative if (1) all three bills
are enacted and become effective on or before January 1, 2001, (2)
all three bills amend or repeal Section 56845 of the Government Code,
and (3) this bill is enacted after AB 1495 and AB 2779, in which
case Section 56815 of the Government Code, as added by Section 123 of
this bill, and Section 123.5 of this bill shall not become
operative.
  SEC. 289.  Notwithstanding Section 17610 of the Government Code, 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.  If the statewide cost of the claim for
reimbursement does not exceed one million dollars ($1,000,000),
reimbursement shall be made from the State Mandates Claims Fund.