BILL ANALYSIS
SB 894
Page 1
Date of Hearing: June 30, 2010
ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
Cameron Smyth, Chair
SB 894 (Committee on Local Government) - As Amended: June 7,
2010
SENATE VOTE : 30-0
SUBJECT : Local Government Omnibus Act of 2010.
SUMMARY : Enacts the "Local Government Omnibus Act of 2010" and
makes 24 changes to the state laws affecting local agencies'
powers and duties. Specifically, this bill makes changes in the
following subject areas:
1)City boundary lawsuits . The Cortese-Knox-Hertzberg Local
Government Reorganization Act of 2000 (Cortese-Knox-Hertzberg)
controls cities' boundaries, including the incorporation of
new cities, city annexations, and city consolidations.
Cortese-Knox-Hertzberg explains that any lawsuits challenging
boundary changes are required to be filed under the standard
Code of Civil Procedure methods that set a 60-day statute of
limitations. The author, however, notes an older, separate
provision in the Code of Civil Procedure sets a 90-day statute
of limitations for filing lawsuits that challenge city
incorporations, annexations, and consolidations. The last
time the Legislature amended that section was 1957, and it
appears to have been forgotten when legislators rewrote the
city boundary laws in 1977, 1985, and 2000. To avoid
confusion over two different deadlines, the author wants the
Legislature to repeal the contradictory provision in the Code
of Civil Procedure. SB 894 repeals the outdated deadline for
filing lawsuits affecting city incorporations, annexations,
and consolidations.
2)Land use mediation law clean-up . Judges can resolve land use
and environmental lawsuits through mediation. A judge can
invite the litigants to use a mediator to resolve their case
before it goes to trial. Judges can use these mediation
procedures for lawsuits that affect 10 specified statutes:
a) Development projects;
b) California Environmental Quality Act decisions;
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c) Time limits in the Permit Streamlining Act or
Subdivision Map Act;
d) School districts' developer fees;
e) Developer fees;
f) The adequacy of general plans or specific plans;
g) Local agency formation commission decisions;
h) The adoption or amendments of redevelopment plans;
i) Zoning decisions; and,
j) Airport land use decisions.
Although no one keeps track, practitioners say judges do not
use these mediation procedures often. The author believes one
reason judges may not use the law is the authority appears
only in a general statutory location and not in each of the
affected laws. The author wants the Legislature to insert a
cross-reference to the existing mediation procedures in each
of the affected statutes. SB 894 inserts the statutory
cross-reference to the existing land use and environmental
dispute mediation law in each of the affected statutes. SB
894 also corrects the references to the existing laws that
describe school districts' developer fees and the Mitigation
Fee Act. The changes in SB 894 are consistent with current
law and do not change state policies or result in new
state-mandated local programs.
3)Commission on State Mandates reports . The California
Constitution requires the state to reimburse local governments
for the cost of new programs or higher levels of service
mandated by the Legislature or any state agency. The
Commission on State Mandates (Commission) is a quasi-judicial
body that decides test claims for reimbursable state-mandates.
If the Commission identifies a state-mandated program, it
adopts parameters and guidelines defining what activities will
be reimbursed and adopts statewide cost estimates. The
Commission reports to the Legislature semiannually on the
status of state-mandate claims. In 2007, the Legislature
allowed the Department of Finance and local governments to use
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alternative processes to resolve claims and parameters and
guidelines for state mandates. In October 2009, the State
Auditor questioned why public officials were not using these
alternative processes. The State Auditor recommended the
Commission add additional information in its semiannual report
about the status of these alternative measures and any delays.
The Commission agrees and wants the Legislature to require
this information in the semiannual reports. SB 894 requires
the Commission to include more information in its semiannual
reports to the Legislature, specifically explaining the use of
alternative processes and any delays.
4)Fresno and Merced counties' boundaries . State statutes recite
the official boundary descriptions of all 58 counties.
Existing law also allows counties to adjust their mutual
boundaries. After counties use this procedure, they ask the
Legislature to revise their statutory boundary descriptions to
match the new realities. For example, Kern and Los Angeles
county officials used this procedure in 2000 when property
owners asked to transfer about 1,000 acres near the Tejon Pass
from Los Angeles County to Kern County. The Legislature then
corrected the counties' statutory boundary descriptions. In
2007, Fresno and Merced county officials used the same
procedures to shift 4,175 acres from Fresno County to Merced
County near the City of Dos Palos. The county boundary
changes took effect on January 1, 2008, and county officials
want the Legislature to conform their statutory boundary
descriptions to match the new legal reality. SB 894 amends
the statutory boundary descriptions for Fresno County and
Merced County to conform to the counties' current boundaries.
5)County boundary lawsuits . State law spells out the procedures
for changing county boundaries, either as minor boundary
changes or boundary changes. State law also spells out the
procedures for forming new counties and for consolidating
counties. Unlike the statute that controls boundary changes
for cities and special districts, state law does not set a
deadline for filing lawsuits to challenge county boundary
changes, formations, and consolidations. The standard statute
of limitations for lawsuits that challenge government
decisions is 60 days. The author wants the Legislature to
apply the standard statute of limitations to lawsuits that
challenge county boundary changes, formations, and
consolidations. SB 894 requires lawsuits that challenge
county boundary changes, formations, and consolidations to
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follow the standard procedures and deadlines for lawsuits that
challenge government decisions.
6)SLON cross-references . The California Constitution prevents
counties and cities from creating multi-year general
obligation debt without 2/3-voter approval. Because this
constitutional ban does not mention special districts, the
Legislature has allowed some districts to borrow money without
voter approval by issuing "promissory notes." Special
districts' promissory notes are not backed by a guaranteed
source of revenue. This lack of security makes them a
relatively risky investment that drives up their borrowing
costs. Because promissory notes do not require voter
approval, they are attractive financing tools. In 1994, as a
more secure and less expensive alternative to potentially
risky promissory notes, the Legislature allowed all special
districts to issue securitized limited obligation notes
(SLONs). SLONs are like promissory notes in that they do not
require voter approval, but a special district must secure its
SLONs by pledging a dedicated stream of revenues. It takes a
4/5 vote of a district's governing board to issue SLONs. The
authority for districts to issue SLONs sunsets on December 31,
2014. Although the SLON law applies to all special districts,
none of the districts' principal acts contains
cross-references to the SLON statute. SB 894 inserts
references to the SLON law in the special district statutes
that list the districts' short-term borrowing powers. SB 894
says these cross references are declaratory of existing law.
7)MACs & CSDs . A municipal advisory council (MAC) is an
appointed or elected body that advises county supervisors on
topics that affect an unincorporated community. State law
prohibits public officials from holding incompatible offices,
with exceptions. One exception is state law may expressly
authorize holding dual offices. In 1991, the Legislature
expressly declared service on a recreation and park district's
board is not incompatible with service on a MAC. In 2001, the
Legislature revised the state laws that govern park districts
and restated the MAC exception in the Recreation and Park
District Law. In 2005, when the Legislature revised the state
laws that govern community services districts (CSDs), it also
declared service on a CSD board was not incompatible with
serving on a MAC. However, the Legislature failed to make the
parallel change in the MAC law. To avoid misunderstandings,
the author wants the Legislature to add CSDs to the list of
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special districts' boards that are not incompatible with
serving on a MAC. SB 894 adds community services districts to
the statute that declares service on a municipal advisory
council is not an incompatible office.
8)Gender-specific city council references . All general law
cities have city councils with at least five members.
Although older statutes still refer to city council members as
"councilmen" or "councilwomen," state law makes it clear that
any member of a city council can be called a "council member."
Nevertheless, at least 16 older sections in the Government
Code and the Health & Safety Code still use the terms
"councilman" and "councilmen," or use the male pronoun "his."
The author wants the Legislature to use gender-neutral terms
in the state laws that refer to city council members. SB 894
changes the statutory references to city "councilman" and
"councilmen" to city "council member" and "council members."
9)Health care districts' assets . The Local Health Care District
Law governs the 80 special districts that own and operate
local public hospitals and clinics. In 1982, the Legislature
authorized health care districts to transfer some of their
assets to nonprofit corporations. In 1992, the Legislature
required health care districts to get majority-voter approval
before transferring 50 percent or more of their assets to
nonprofit corporations. In 1998, the Legislature required
health care districts to get majority-voter approval before
transferring or leasing 50 percent or more of their assets to
any corporation at fair market value. That requirement would
have automatically terminated on January 1, 2001. In 2000,
the Legislature extended the sunset date to January 1, 2006,
and directed the Legislative Analyst's Office (LAO) to
determine if the requirement should be permanent. A November
2004 LAO report concluded that, after studying just one
transfer from a district to a for-profit corporation, there
was no basis to recommend a continuation of the requirement
for voter approval. In 2005, the Legislature extended the
sunset date to January 1, 2011. The Washington Township
Healthcare District wants the Legislature to make the
requirement permanent. SB 894 makes permanent the requirement
that healthcare districts get majority-voter approval before
they transfer or lease 50 percent or more of their assets to
corporations. Specifically, SB 894 deletes the sunset clauses
and repeals the outdated statutory versions.
10)Permit Streamlining Act clean-up . More than 30 years ago,
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the Legislature passed the Permit Streamlining Act after the
Dow Chemical Company dropped its plans to build a plant in
Solano County. Once a public agency receives a development
permit application, officials have 30 days to determine if it
is complete. If the application is not complete, the agency
is required to explain what is missing. If the agency fails
to determine an application's completeness, the Act declares
the application is deemed complete. The Act also sets
deadlines for public officials to act on development permit
applications. For applications pending when the Legislature
passed the Act, those time limits are measured from January 1,
1978. The author notes this 33-year old section is obsolete
and wants the Legislature to repeal it. SB 894 repeals the
outdated time limits in the Permit Streamlining Act.
11)Redevelopment audit terms . When a redevelopment agency
presents its annual report, including its annual independent
financial audit report, to its underlying city council or
county board of supervisors, the agency is required to explain
any "major violations" the auditor found. In 2003, the
Legislature changed this term to "major audit violation," but
neglected to change all the other references. To avoid
confusion, the author wants the Legislature to use the correct
term. SB 894 changes statutory references to "major
violations" to "major audit violations" in the state law that
tells redevelopment agencies what to do with their annual
reports.
12)Redevelopment spending outside project areas . The Community
Redevelopment Law allows redevelopment officials to pay for
public works projects inside redevelopment project areas.
Before they can pay for public works that are located outside
project areas, officials are required to make five findings.
These new requirements took effect on January 1, 2010, but a
2009 bill (SB 93 (Kehoe), Chapter 555, Statutes of 2009)
grandfathered public works projects with financing,
construction, or installation underway. Redevelopment
officials note, however, that state law does not explain that
grandfathered projects can still proceed under the former
statute. SB 894 clarifies that, when redevelopment officials
pay for public works projects that are located outside a
redevelopment project area but were underway before the
Legislature imposed the new requirements, they can proceed
under the former statutory requirements.
13)Air pollution control officers' deputies . State law governs
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the structure and powers of air pollution control districts
(APCDs) and air quality management districts (AQMDs). Each
county's APCD appoints an air pollution control officer (APCO)
who in turn appoints the APCD's personnel. Formally appointed
deputies have general statutory authority to perform their
superiors' powers. Citing Rauer v. Lowe (1885)107 Cal. 229, a
1987 Attorney General's opinion explained that a "government
official may not appoint a deputy without appropriate legal
authority" (70 Ops.Cal.Atty.Gen. 250 [1987]). Although many
APCOs designate deputies to carry out delegated duties, there
is no explicit authority to appoint Deputy APCOs for APCDs.
However, state law explicitly allows deputies for the South
Coast AQMD, the Mojave Desert AQMD, and the Antelope Valley
AQMD. County officials want the Legislature to give APCOs the
explicit statutory authority to appoint deputies, subject to
the APCD boards' direction. SB 894 allows air pollution
control officers to appoint deputies.
14)West Nile virus and intergovernmental cooperation . State law
requires an agency that responds to an outbreak of West Nile
virus or other mosquito-borne disease to either contract with
a local mosquito and vector control agency that has a
cooperative agreement with the State Department of Health
Services (Department) or consult directly with the Department.
This law would have automatically terminated on January 1,
2009, but the Legislature extended the sunset date to January
1, 2011. The Mosquito and Vector Control Association of
California wants the Legislature to extend the sunset date for
another year so legislators will have more time to consider a
permanent statute. SB 894 extends the sunset date from
January 1, 2011, to January 1, 2012, for the state law that
requires public agencies to work with the Department during an
outbreak of West Nile virus or other mosquito-borne diseases.
15)Publishing water reservoir rules . Counties, cities, and
special districts with water reservoirs that are used for
fishing or recreation are required to publish their watershed
rules and regulations at least once in a general circulation
newspaper in the county where the reservoir is located. The
East Bay Municipal Utility District (EBMUD) operates seven
drinking water reservoirs, five of which are used for fishing
and recreation. Also, the reservoirs are in five different
counties. Publishing the full text of EBMUD's watershed rules
and regulations costs approximately $20,000 each time the
District changes them, although it is not clear if public
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agencies are required to republish their rules and regulations
when they are amended. Other statutory publishing
requirements allow public officials to print only summaries of
their ordinances when they change. Instead of publishing the
full text of changes to its reservoir rules and regulations,
EBMUD wants the Legislature to allow public agencies to
publish summaries of the changes. SB 894 allows public
agencies to publish summaries of the changes to their
watershed rules and regulations for reservoirs.
16)County public works contracts and change orders . State law
spells out the competitive bidding procedures that counties
follow when they issue public works contracts. The county
board of supervisors (board) is required to approve changes to
these contracts by a 4/5 vote. However, the board can
delegate this authority to the county engineer or other county
officer. For a contract worth more than $250,000, the change
order cannot be more than $25,000, plus 5 percent of the
amount over $250,000. In no event can the change order be
more than $150,000. Los Angeles County officials note
inflation has eroded the purchasing power of the $150,000
limit since the Legislature last raised that amount. The
equivalent of $150,000 in 1998 dollars would be $209,100 in
2009. SB 894 raises the limit on change orders for public
works contracts that a board can delegate to county officials
from $150,000 to $210,000.
17)County bridge contracts and change orders . State law spells
out the competitive bidding procedures that counties follow
when they issue contracts to build or alter bridges and
subways. The board is required to approve changes to these
contracts by a 4/5 vote. Los Angeles County officials note
that, unlike the laws governing other county public works
contracts, this statute does not allow the board to delegate
the authority to approve change orders to county officials.
Taking individual change orders to the board is time consuming
and increases the costs of bridge projects. They want the
Legislature to allow boards to delegate change orders for
bridge and subway construction contracts, following the same
thresholds as change orders for other county construction
contracts. SB 894 allows a board to delegate its authority to
approve change orders on county bridge and subway construction
contracts to county officers:
a) For contracts of $50,000 or less, the maximum amount is
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$5,000;
b) For contracts worth between $50,000 and $250,000, the
maximum amount is 10 percent of the amount of the cost of
the original contract; and,
c) For contracts worth more than $250,000, the maximum
amount is $25,000 plus 5 percent of the amount over
$250,000. In no event can the change order be more than
$210,000.
18)County waterworks districts' contracts and change orders .
The County Waterworks District Law says a board is the ex
officio governing board of a county waterworks district.
State law spells out the competitive bidding procedures that
county waterworks districts follow when they issue contracts
to build water facilities. Los Angeles County officials note
that, unlike the laws governing county public works contracts,
this statute does not allow the boards to approve changes to
county waterworks districts' contracts or to delegate the
authority to approve change orders to county officials. They
want the Legislature to allow boards to delegate change orders
for construction contracts, using the same thresholds as
change orders for county construction contracts. SB 894
allows a board, acting as a county waterworks district's
governing board, to delegate to the district manager or other
district official the authority to approve change orders on
construction contracts:
a) For contracts of $50,000 or less, the maximum amount is
$5,000;
b) For contracts worth between $50,000 and $250,000, the
maximum amount is 10 percent of the amount of the cost of
the original contract; and,
c) For contracts worth more than $250,000, the maximum
amount is $25,000 plus 5 percent of the amount over
$250,000. In no event can the change order be more than
$210,000.
19)Redevelopment agencies' design-build cross-reference .
Redevelopment agencies can use the design-build contracting
method until January 1, 2016. In describing the public works
projects to which the language applies, the statute
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incorrectly cites Health & Safety Code Section 33455 instead
of Section 33445. Also, the Legislature created a new
provision for public works projects outside redevelopment
project areas, but current law does not recognize the new
provision. SB 894 corrects the statutory cross-references in
state law that allows redevelopment agencies to use the
design-build contracting method.
20)Los Angeles County Flood Control District's contracts and
change orders . The Los Angeles County Flood Control District
Act says the Los Angeles County Board of Supervisors is the
Los Angeles County Flood Control District's (District) ex
officio governing board. State law spells out the competitive
bidding procedures the District follows when it issues
contracts to build water facilities. Los Angeles County
officials note that, unlike the laws governing county public
works contracts, this statute does not allow the county
supervisors to approve changes to the District's contracts or
to delegate the authority to approve change orders to county
officials. They want the Legislature to allow the Los Angeles
County Board of Supervisors to delegate change orders for the
District's construction contracts, using the same thresholds
as change orders for county construction contracts. SB 894
allows the Los Angeles County Board of Supervisors to delegate
to the District's chief engineer or other District officer the
authority to approve change orders on construction contracts:
a) For contracts of $50,000 or less, the maximum amount is
$5,000.
b) For contracts worth between $50,000 and $250,000, the
maximum amount is 10 percent of the amount of the cost of
the original contract.
c) For contracts worth more than $250,000, the maximum
amount is $25,000 plus 5 percent of the amount over
$250,000. In no event can the change order be more than
$210,000.
21)Property tax transfer clarification . Existing law spells out
how county officials are required to allocate property tax
revenues to counties, cities, special districts, and school
districts. Local officials can agree among themselves to
reallocate property tax revenues, transferring revenue from
one local agency to one or more other agencies, provided four
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conditions exist. The second condition is the transfer will
not increase the ratio between the transferring agency's user
charges and the revenues the agency uses to pay for services.
When interpreting this language, a 2006 Attorney General's
opinion noted words were missing from the description. SB 894
clarifies the state law that permits local agencies to
voluntarily transfer property tax revenues by inserting
language suggested by an Attorney General's opinion and using
consistent statutory terms.
22)Publishing water districts' regulations . Water districts can
adopt "equitable rules and regulations" that govern the sale
and distribution of water. After they publish these rules and
regulations once a week for two weeks in a general circulation
newspaper, they can enforce the regulations. The Irvine Ranch
Water District says it costs between $10,000 and $20,000 to
publish its lengthy rules and regulations. Other statutory
publishing requirements allow public officials to print only
summaries of their ordinances when they change. Instead of
publishing the full text of its amended water rules and
regulations, the Irvine Ranch Water District wants the
Legislature to allow water districts to publish summaries. SB
894 allows districts to publish summaries of the changes to
their water rules and regulations.
23)Reclamation districts' seals . State law recognizes public
agencies' seals as formal signs of executing documents. State
law allows many types of special districts to adopt and alter
official seals. For example, community services districts,
mosquito and vector control districts, and county water
districts can adopt and alter seals. A reclamation district
is required to adopt a seal that contains its number and
county's name. All reclamation district documents that
require the board of trustees' approval need the district's
seal. The California Central Valley Flood Control Association
says requiring seals on reclamation districts' documents is
antiquated. SB 894 allows rather than requires a reclamation
district to adopt and alter a seal. SB 894 requires
reclamation districts' documents that need the board of
trustee's approval to be signed by either a district trustee
or the board's secretary, instead of requiring the district's
seal.
24)North Delta Water Agency's elections . Formed in 1973 as one
of the three successors to the Delta Water Agency, the North
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Delta Water Agency (Agency) operates under its own special
act. The Agency's voters are landowners within its boundaries
and each landowner gets one vote for every acre owned. The
Agency's principal act says the board of directors has five
members, one from each of the Agency's divisions. Each board
member must be a property owner or a property owner's legal
representative within the division the member represents. The
Agency's general manager notes the statute is unclear about
which voters elect the board members. SB 894 clarifies the
Agency's board members are elected by divisions, elected only
by the voters of each division and not at large.
25)Legislative declarations . SB 894 expresses the Legislature's
intent to cut costs by combining several noncontroversial
items relating to local government into a single bill.
FISCAL EFFECT : Unknown
COMMENTS :
1)Each year local officials discover problems with the state
statutes that affect counties, cities, special districts, and
redevelopment agencies, as well as the laws on land use
planning and development. The Senate Local Government
Committee believes that these minor problems do not warrant
separate (and expensive) bills. According to the Legislative
Analyst, in 2001-02 the cost of producing a bill was $17,890.
2)The Senate Local Government Committee responds by combining
several of these minor topics into an annual "omnibus bill."
For example, SB 113, Chapter 332, Statutes of 2009, was the
Committee's annual omnibus bill, which contained 39
noncontroversial statutory changes, avoiding about $700,000 in
legislative costs. Although this practice may violate a
strict interpretation of the single-subject rule expressed in
Harbor v. Deukmejian (1987) 43 Cal. 3d 1078, and Californians
for an Open Primary v. McPherson (2006) 38 Cal.4th 735, the
Senate Local Government Committee believes it is an
expeditious and relatively inexpensive way to respond to
multiple requests.
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REGISTERED SUPPORT / OPPOSITION :
Support
Association of CA Water Agencies
CA Association of Local Agency Formation Commissions
CA Central Valley Flood Control Association
CA Redevelopment Association
CA Special Districts Association
CA State Association of Counties
Commission on State Mandates
Counties of Fresno, Los Angeles, and Merced
East Bay Municipal Utility District
Howard Jarvis Taxpayers Association
Irvine Ranch Water District
Mosquito and Vector Control Association of CA
San Francisco Bay Area Rapid Transit District
South Coast Air Quality Management District
Washington Hospital Healthcare System
Individual letter (1)
Opposition
None on file
Analysis Prepared by : Jennifer R. Klein / L. GOV. / (916)
319-3958