BILL ANALYSIS
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|SENATE RULES COMMITTEE | AB 2795|
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CONSENT
Bill No: AB 2795
Author: Assembly Local Government Committee
Amended: 5/27/10 in Senate
Vote: 21
SENATE LOCAL GOVERNMENT COMMITTEE : 3-0, 6/9/10
AYES: Kehoe, DeSaulnier, Price
NO VOTE RECORDED: Cox, Aanestad
ASSEMBLY FLOOR : 74-0, 5/6/10 - See last page for vote
SUBJECT : Local government: organization
SOURCE : Author
DIGEST : This bill makes nine changes to the state laws
affecting local agency formation commissions and local
governments' boundaries.
ANALYSIS : The Cortese-Knox-Hertzberg Local Government
Reorganization Act delegates the Legislature's power to
control the boundaries of cities and special districts to
local agency formation commissions (LAFCOs). The courts
call LAFCOs the Legislature's watchdog over local boundary
changes.
As practitioners find problems with the
Cortese-Knox-Hertzberg Act, they ask for statutory
improvements. The Assembly Local Government Committee
responds by authoring clean-up bills. Last year's LAFCO
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clean-up bill was AB 1582 (Assembly Local Government
Committee, Chapter 155, Statutes of 2009).
This bill makes makes nine changes to the state laws
affecting local agency formation commissions (LAFCOs) and
local governments' boundaries.
1. Districts' services . A special district must get the
LAFCO's approval before it can provide new services or
divest itself of the power to provide services. In
creating the detailed procedures for adding and
divesting services (AB 2484, Caballero, 2008), the
Legislature did not define those terms. This bill
defines "divestiture of power" as the termination of a
district's authority to provide services.
2. Selection of special district members . Half of the 58
LAFCOs have used current law to seat representatives of
independent special districts as commissioners. An
"independent special districts selection committee,"
composed of the presiding officers of the independent
special districts in that county, appoints two regular
members and one alternate member to the LAFCO. The
LAFCO's executive officer calls for the selection
committee to meet when there's a vacancy, or if
districts with at least 10 percent of the countywide
taxable property request a meeting. Some executive
officers say that waiting until a vacancy occurs
deprives special districts of representation. They want
to call meetings when it's clear that a vacancy is about
to occur. This bill allows a LAFCO executive officer to
call a meeting of the independent special district
selection committee when the executive officer
anticipates that a vacancy for a special district seat
on the LAFCO will occur within 90 days.
3. Selection procedures . Half of the 58 LAFCOs have used
current law to seat representatives of independent
special districts as commissioners. An "independent
special districts selection committee," composed of the
presiding officers of the independent special districts
in that county, appoints two regular members and one
alternate member to the LAFCO. The LAFCO's executive
officer conducts the selection committee's meetings.
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Some executive officers say that running a meeting to
select the commissioners who will then be their bosses
may compromise the perception of their independence.
They want to delegate the conduct of these meetings to
others. For the special district selection process,
this bill defines "executive officer" to include a
designee authorized by the LAFCO.
4. LAFCO initiation of district proposals . The
Cortese-Knox-Hertzberg Act provides three ways to start
boundary change proposals: (1) by petition of the
affected voters or landowners, (2) by resolution of an
affected local agency, or (3) in the case of special
district boundary changes, by the LAFCO itself. The Act
is silent on the form of the LAFCO's action. To
initiate a special district boundary change, this bill
requires the LAFCO to adopt a resolution.
5. LAFCO budgets . Local agencies pay for the LAFCOs'
annual budgets. Where a LAFCO has only county and city
representatives, the county government and the cities
split the cost. Where independent special districts
have representation, the county government, the cities,
and the districts each pay a third of the LAFCO's
budget. State law allocates the districts' share among
the independent districts in proportion to their total
revenues. To compute the share for most districts,
local officials rely on the most recent edition of the
State Controller's "Special Districts Annual Report."
They must discount a district's total revenues by the
amount of category aid from other governmental agencies.
Some executive officers note that the State
Controller's annual report uses a more modern term for
that type of revenue. This bill substitutes the term
"intergovernmental revenue" in the computation of
special districts' shares of the LAFCOs' budgets.
6. Boundary change elections . The Cortese-Knox-Hertzberg
Act requires voter approval of certain boundary change
proposals. When a LAFCO orders an election, the
affected county board of supervisors or city council
conducts the election. Some executive officers note
that the statute still implies that the LAFCOs call and
conduct these elections. This bill clarifies that when
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a boundary change election is needed, the board of
supervisors or city council calls and conducts the
elections.
7. New city councils . The Cortese-Knox-Hertzberg Act
spells out the terms of office for the first five city
council members of newly incorporated cities. For new
city councils elected at large, the three council
members who received the lowest number of votes hold
office until the first general municipal election after
incorporation. The other two members hold office until
the second general municipal election. After those
elections, city council members serve staggered
four-year terms. This bill increases, from two to
three, the number of new city council members who hold
office until the second general municipal election after
incorporation. This bill reduces, from three to two,
the number of council members who hold office until the
first general municipal election.
8. Property tax revenue negotiations . Before a LAFCO
executive officer can accept a proposed boundary change,
local officials must negotiate a transfer of property
tax revenues. State law provides an elaborate process
for local officials to follow, including gathering
information from county officials and conducting
negotiations that can last for up to 60 days. Because
these negotiations can be contentious, some local
officials want more time to talk. This bill allows a
90-day negotiation period if any of the involved local
agencies notifies the other local agencies, the county
auditor, and the LAFCO in writing.
9. Property tax revenue changes . Before a LAFCO executive
officer can accept a proposed boundary change, local
officials must negotiate a transfer of property tax
revenues. If the LAFCO later modifies the boundary
change, state law allows an affected local agency to
have 15 days to renegotiate the property tax revenue
transfer. Some executive officers say that 15 days
isn't long enough for local officials to renegotiate.
This bill extends, from 15 days to 30 days, the amount
of time that local officials can renegotiate a property
tax transfer agreement if the LAFCO modifies the
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proposed boundary change.
Technical amendments . In addition to its substantive
changes to the Cortese-Knox-Hertzberg Act, this bill makes
formatting amendments.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 6/10/10)
California Association of Local Agency Formation
Commissions
California Special Districts Association
ASSEMBLY FLOOR :
AYES: Adams, Ammiano, Anderson, Arambula, Beall, Bill
Berryhill, Tom Berryhill, Blakeslee, Blumenfield,
Bradford, Brownley, Buchanan, Caballero, Charles
Calderon, Carter, Chesbro, Conway, Cook, Coto, Davis, De
Leon, DeVore, Emmerson, Eng, Evans, Feuer, Fletcher,
Fong, Fuentes, Fuller, Furutani, Gaines, Galgiani,
Garrick, Hagman, Hall, Harkey, Hayashi, Hernandez, Hill,
Huber, Huffman, Jeffries, Jones, Knight, Lieu, Logue,
Bonnie Lowenthal, Ma, Miller, Monning, Nava, Nestande,
Niello, Nielsen, Norby, V. Manuel Perez, Portantino,
Ruskin, Salas, Saldana, Silva, Skinner, Smyth, Solorio,
Audra Strickland, Swanson, Torlakson, Torres, Torrico,
Tran, Villines, Yamada, John A. Perez
NO VOTE RECORDED: Bass, Block, De La Torre, Gilmore,
Mendoza
AGB:nl 6/10/10 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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