Amended in Assembly May 22, 2015

California Legislature—2015–16 Regular Session

Assembly Bill No. 1532

Introduced by Committee on Local Government

March 23, 2015

An act to amend Sections 56131.5, 56325, 56326, 56326.5, 56327, 56327.3, 56329, 56332, 56332.5, 56375.3, 56381.6, 56383, 56384, begin delete 56653, end delete 57002, 57075, 57075.5, 57177.5, and 57179 of the Government Code, relating to local government.

LEGISLATIVE COUNSEL’S DIGEST

AB 1532, as amended, Committee on Local Government. Local government: omnibus.

(1) Existing law, the Cortese-Knox-Hertzberg Local Government Reorganization Act of 2000, requires a local agency formation commission to notify specified state agencies having oversight or regulatory responsibility over, or a contractual relationship with, a local health care district when a proposal is made for any of specified changes of organization affecting that district.

This bill would update obsolete references to a “hospital” district and replace outdated references to the State Department of Health Services with references to the State Department of Public Health and the State Department of Health Care Services.

(2) The Cortese-Knox-Hertzberg Local Government Reorganization Act of 2000 establishes in each county a local agency formation commission consisting of 7 members and provides for the selection of members of the commission and designation of alternate members according to specified procedures. Existing law establishes special procedures for the creation and selection of members of the commissions for Los Angeles County, Sacramento County, Santa Clara County, and counties in which there are no cities. Existing law provides for the selection of representatives of independent special districts on each commission by an independent special district selection committee. Existing law also provides for the apportionment of the annual operational costs for specified commissions among the classes of public agencies that select members on the commission.

This bill would recast these provisions and instead provide for the appointment of members and alternates to the commission of each county, including the above-described counties for which special procedures apply. The bill would also make various technical changes.

(3) Existing law authorizes the commission to waive protest proceedings and approve a change of organization or reorganization of a city, after notice and a hearing, of unincorporated islands. Existing law excludes from these provisions an unincorporated island within a city that is a gated community where services are currently provided by a community services district. Existing law also authorizes, at the option of either the city or the county, a separate property tax transfer agreement between a city and a county regarding an annexation of territory subject to these provisions without affecting an existing master tax sharing agreement between the city and the county.

This bill would make technical, nonsubstantive changes to these provisions.

(4) Under existing law, a commission may establish a schedule of fees and service charges for proceedings taken by the commission, including a fee for amending a sphere of influence.

This bill would expand the list of proceedings in that provision to include updating a sphere of influence.

(5) Existing law requires the commission to appoint legal counsel. If the commission’s legal counsel is subject to a conflict of interest on an issue before the commission, existing law requires the commission to appoint alternate staff to assist it. Existing law defines, for the purposes of provisions relating to commission officers and staff, the term “conflict of interest”.

This bill would expand the definition of “conflict of interest” with respect to the commission’s legal counsel to include matters covered by specified rules promulgated by the State Bar of California pertaining to representation of adverse interests.

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(6) Existing law establishes procedures for commission proceedings for a change of organization or reorganization, as defined. Existing law requires that an applicant seeking a change of organization or reorganization, among other things, submit a plan for providing services within the affected territory. The plan must include specified information, including an enumeration and description of the services to be extended to the affected territory and indication of when those services can feasibly be extended to the affected territory.

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This bill would provide that the plan may alternatively specify services currently provided in the affected territory. The bill would also require only that the plan indicate when services can be feasibly extended to the affected territory if new services are proposed.

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(7)

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begin insert (6) end insert  Existing law generally requires the commission to conduct a hearing for a change of organization or reorganization, as specified. However, the commission may, without a hearing, approve a change of organization that consists of an annexation or a detachment, or a reorganization that consists solely of annexations or detachments, or both, or the formation of a county service area begin delete that, end delete for which the commission is authorized to waive protest proceedings if certain things have occurred.

This bill would additionally authorize the commission to approve, without a hearing, a proposal for an annexation, a detachment, or a reorganization consisting solely of annexations or detachments, or both, or formation of a county service area for which the commission is authorized to make determinations without a hearing and to waive protest proceedings, if the affected territory is uninhabited and certain conditions are met.

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(8)

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begin insert (7) end insert  Under existing law, in cases involving specified kinds of change of organization or reorganization the commission must, within 30 days after a hearing, make findings regarding the value of written protests filed and not withdrawn and take a specified action. If a majority protest exists, as specified, the commission must terminate proceedings. If written protests have been filed and not withdrawn by either between 25% and 50% of the registered voters in the affected territory or 25% of the number of owners of land who also own at least 25% of the assessed value of land within the affected territory, the commission must order the organization or change of organization subject to confirmation by the registered voters of the affected territory. If written protests have been filed and not withdrawn by less than 25% of the registered voters in the affected territory or less than 25% of the number of owners of land owning less than 25% of the assessed value of land within the affected territory, the commission must order the change of organization or reorganization.

This bill would recast these provisions to specify that the commission may order the change of organization or reorganization without an election only if there is neither a majority protest nor written protests filed and not withdrawn by between 25% and 50% of the registered voters in the affected territory or 25% of the number of owners of land who also own at least 25% of the assessed value of land within the affected territory.

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(9)

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begin insert (8) end insert  Under existing law, notwithstanding the above-described procedures for protest, in cases where a city with more than 100,000 people proposes to annex inhabited territory located in a county with a population of over 400,000, the commission must, within 30 days after a hearing, make findings regarding the value of written protests filed and not withdrawn and take specified action. If written protests have been filed and not withdrawn by 50% or more of the registered voters within the affected territory, the commission must terminate proceedings. If written protests have been filed and not withdrawn by either 15% or more of the registered voters in the affected territory or 15% or more of the number of owners of land who also own at least 15% of the assessed value of land within the affected territory, the commission must order the territory annexed subject to confirmation by the voters within the affected territory on the question of whether to be annexed to the city. The commission must request the city council to call a special election for this purpose. If written protests have been filed and not withdrawn by less than 15% of the registered voters in the affected territory and less than 15% of the owners of land who also own less than 15% of the assessed value of land within the affected territory, the commission must order the territory annexed without an election.

This bill would recast these provisions to specify that the commission may order the annexation without an election only if there are neither written protests filed and not withdrawn by 50% of more of the registered voters within the affected territory nor written protests filed and not withdrawn by 15% or more of the registered voters in the affected territory or 15% of the number of owners of land who also own at least 15% of the assessed value of land within the affected territory. The bill would also specify that the confirmation under these provisions is subject to a special election by the registered voters residing within the affected territory.

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(10)

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begin insert (9) end insert  Existing law requires the commission, in the case of elections on an order of consolidation of cities or districts, to issue a certificate of completion confirming the order of consolidation, or a certification of completion terminating proceedings, as specified.

This bill would instead require the commission to issue either a certification of completion or a certification of termination, as specified.

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(11)

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begin insert (10) end insert  Existing law requires the commission to execute a certificate of termination of proceedings if the majority of the votes cast by members of the commission are against the change in organization or reorganization.

This bill would instead require the commission to execute a certificate of termination of proceedings if the votes in favor of the change in organization or reorganization do not constitute a majority.

Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Section 56131.5 of the Government Code is
amended to read:

56131.5.  

(a) Upon the filing of an application for the formation
of, annexation to, consolidation of, or dissolution of a local health
care district created pursuant to Division 23 (commencing with
Section 32000) of the Health and Safety Code or of an application
for a reorganization including any of those changes of organization
or the initiation by the commission of any of those changes of
organization or any reorganization including any of those changes
of organization, the commission shall notify all state agencies that
have oversight or regulatory responsibility over, or a contractual
relationship with, the local health care district that is the subject
of the proposed change of organization or reorganization, of its
receipt of the application or the initiation by the commission of
the proposed change of organization or reorganization and the
proposal, including, but not limited to, the following:

(1) The State Department of Health Care Services, including,
but not limited to, the Medi-Cal Division.

(2) The Office of Statewide Health Planning and Development,
including, but not limited to, the Cal-Mortgage Loan Insurance
Division.

(3) The California Health Facilities Financing Authority.

(4) The State Department of Public Health, including, but not
limited to, the Licensing and Certification Division.

(b) A state agency shall have 60 days from the date of receipt
of notification by the commission to comment on the proposal.
The commission shall consider all comments received from any
state agency in making its decision.

SEC. 2.  

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
appointed 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 appointed 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 appoint one
alternate member who shall also be a mayor or council member
and shall be appointed and serve pursuant to Section 56335. The
city selection committee is encouraged to appoint 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 appointed by the independent special
district selection committee pursuant to Section 56332. The
independent special district selection committee shall also appoint
a presiding officer or member of the legislative body of an
independent special district as an alternate member who shall be
appointed and serve pursuant to Section 56332. The independent
special district selection committee is encouraged to make
appointments 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 appoint one alternate member who shall serve pursuant
to Section 56331. Appointment of the public member and alternate
public member shall be subject to the affirmative vote of at least
one of the members appointed by each of the other appointing
authorities. Whenever a vacancy occurs in the public member or
alternate public member position, the commission shall cause a
notice of vacancy to be posted as provided in Section 56158. A
copy of this notice shall be sent to the clerk or secretary of the
legislative body of each local agency within the county. Final
appointment to fill the vacancy may not be made for at least 21
days after the posting of the notice.

SEC. 3.  

Section 56326 of the Government Code is amended
to read:

56326.  

In Los Angeles County, the commission shall consist
of nine members, appointed 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 appointed 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 appoint one
alternate member who shall also be a mayor or council member
and shall be appointed and serve pursuant to Section 56335. The
city selection committee is encouraged to appoint members to
fairly represent the diversity of the cities in the county, with respect
to population and geography.

(d) One appointed by the presiding officer of the legislative
body of 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. The presiding officer of the
legislative body shall also appoint 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 appointed by the independent special
district selection committee pursuant to Section 56332. The
independent special district selection committee shall also appoint
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 appoint
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. The other members of the commission
may also appoint one alternate member who shall serve pursuant
to Section 56331.

SEC. 4.  

Section 56326.5 of the Government Code is amended
to read:

56326.5.  

In Sacramento County, the commission shall consist
of seven members, appointed 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 appointed 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 appointed 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 appoint one alternate member
who shall also be a mayor or council member and shall be
appointed and serve pursuant to Section 56335. The city selection
committee is encouraged to appoint 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 appointed by the independent special
district selection committee pursuant to Section 56332. The
independent special district selection committee shall also appoint
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 appoint
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. 5.  

Section 56327 of the Government Code is amended
to read:

56327.  

In Santa Clara County, the commission shall consist
of five members, appointed 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 appointed 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 appointed 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 appoint one alternate member
who shall also be a mayor or council member and shall be
appointed and serve pursuant to Section 56335. The city selection
committee is encouraged to appoint 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, or, if the commission is enlarged pursuant to Section 56327.3,
the other six, 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. 6.  

Section 56327.3 of the Government Code is amended
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 56821), the commission orders
representation of special districts upon the commission.

SEC. 7.  

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, appointed 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. Appointment 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. 8.  

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 participate in a meeting
or election of the independent special district selection committee,
the legislative body of the district may appoint one of its members
as an alternate to participate in 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 or his or her alternate
as designated by the governing body. 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 one of the following circumstances:

(1) Whenever the executive officer anticipates that a vacancy
will occur within the next 90 days among the members or alternate
member representing independent special districts on the
commission.

(2) Whenever a vacancy exists among the members or alternate
member representing independent special districts upon the
commission.

(3) 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) The selection committee shall appoint two regular members
and one alternate member to the commission. The members so
appointed shall be elected or appointed members of the legislative
body of an independent special district 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. Service on the
commission by a regular district member shall not disqualify, or
be cause for disqualification of, the member from acting on
proposals affecting the special district on whose legislative body
the member serves. 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 on whose legislative body the member serves.

(d) 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.

(e) A majority of the independent special district selection
committee may determine to conduct the committee’s business by
mail, including holding all elections by mailed ballot, pursuant to
subdivision (f).

(f) If the independent special district selection committee has
determined to conduct the committee’s business by mail or if the
executive officer determines that a meeting of the special district
selection committee, for the purpose of appointing the special
district members or filling vacancies, is not feasible, the executive
officer shall conduct the business of the committee by mail.
Elections by mail shall be conducted as provided in this
subdivision.

(1) The executive officer shall prepare and deliver a call for
nominations to each eligible district. The presiding officer, or his
or her alternate as designated by the governing body, may respond
in writing by the date specified in the call for nominations, which
date shall be at least 30 days from the date on which the executive
officer mailed the call for nominations to the eligible district.

(2) At the end of the nominating period, if only one candidate
is nominated for a vacant seat, that candidate shall be deemed
appointed. If two or more candidates are nominated, the executive
officer shall prepare and deliver one ballot and voting instructions
to each eligible district. The ballot shall include the names of all
nominees and the office for which each was nominated. Each
presiding officer, or his or her alternate as designated by the
governing body, shall return the ballot 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 ballot to the eligible district.

(3) The call for nominations, ballot, and voting instructions shall
be delivered by certified mail to each eligible district. As an
alternative to the delivery by certified mail, the executive officer,
with prior concurrence of the presiding officer or his or her
alternate as designated by the governing body, may transmit
materials by electronic mail.

(4) If the executive officer has transmitted the call for
nominations or ballot by electronic mail, the presiding officer, or
his or her alternate as designated by the governing body, may
respond to the executive officer by electronic mail.

(5) Each returned nomination and ballot shall be signed by the
presiding officer or his or her alternate as designated by the
governing body of the eligible district.

(6) For an election to be valid, at least a quorum of the special
districts must submit valid ballots. The candidate receiving the
most votes shall be elected, unless another procedure has been
adopted by the selection committee. Any nomination and ballot
received by the executive officer after the date specified is invalid,
provided, however, that if a quorum of ballots is not received by
that date, the executive officer shall extend the date to submit
ballots by 60 days and notify all districts of the extension. The
executive officer shall announce the results of the election within
seven days of the date specified.

(7) All election materials shall be retained by the executive
officer for a period of at least six months after the announcement
of the election results.

(g) For purposes of this section, “executive officer” means the
executive officer or designee as authorized by the commission.

SEC. 9.  

Section 56332.5 of the Government Code is amended
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 appoint independent special district
representation on the commission pursuant to Section 56332.

SEC. 10.  

Section 56375.3 of the Government Code is amended
to read:

56375.3.  

(a) In addition to those powers enumerated in Section
56375, a commission shall approve, after notice and hearing, the
change of organization or reorganization of a city, and waive
protest proceedings pursuant to Part 4 (commencing with Section
57000) entirely, if all of the following are true:

(1) The change of organization or reorganization is initiated on
or after January 1, 2000.

(2) The change of organization or reorganization is proposed
by resolution adopted by the affected city.

(3) The commission finds that the territory contained in the
change of organization or reorganization proposal meets all of the
requirements set forth in subdivision (b).

(b) Subdivision (a) applies to territory that meets all of the
following requirements:

(1) It does not exceed 150 acres in area, and that area constitutes
the entire island.

(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.

(4) It is substantially developed or developing. The finding
required by this paragraph 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 change of organization or
reorganization or is receiving benefits from the annexing city.

(7) This subdivision does not apply to any unincorporated island
within a city that is a gated community where services are currently
provided by a community services district.

(8) Notwithstanding any other 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.

(c) 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.

(d) The Legislature finds and declares that the powers set forth
in subdivision (a) for territory that meets all the specifications in
subdivision (b) are consistent with the intent of promoting orderly
growth and development pursuant to Section 56001 and facilitate
the annexation of disadvantaged unincorporated communities, as
defined in Section 56033.5.

SEC. 11.  

Section 56381.6 of the Government Code is amended
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 appoint members to the
commission in proportion to the number of members appointed
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 appointed by the county, one
of the members appointed by the cities, and one of the members
appointed by districts, 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. 12.  

Section 56383 of the Government Code is amended
to read:

56383.  

(a) The commission may establish a schedule of fees
and a schedule of service charges for the 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 or updating a sphere of influence.

(4) Reconsidering a resolution making determinations.

(b) The 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. The service charges shall not
exceed the cost of providing the service for which the service
charge is charged and shall be imposed pursuant to Section 66016.

(c) The commission may require that an applicant deposit some
or all of the required amount that will be owed with the executive
officer before any further action is taken. The deposit shall be
made within the time period specified by the commission. No
application shall be deemed filed until the applicant deposits the
required amount with the executive officer. The executive officer
shall provide the applicant with an accounting of all costs charged
against the deposited amount. If the costs are less than the deposited
amount, the executive officer shall refund the balance to the
applicant after the executive officer verifies the completion of all
proceedings. If the costs exceed the deposited amount, the applicant
shall pay the difference prior to the completion of all proceedings.

(d) The commission may reduce or waive a fee, service charge,
or deposit if it finds that payment would be detrimental to the
public interest. The reduction or waiver of any fee, service charge,
or deposit is limited to the costs incurred by the commission in
the proceedings of an application.

(e) Any mandatory time limits for commission action may be
deferred until the applicant pays the required fee, service charge,
or deposit.

(f) The signatures on a petition submitted to the commission by
registered voters 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.

(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, service charges, or deposits 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. 13.  

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) (1) 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 (Title begin delete 9(commences end delete begin insert 9 (commencing end insert with
Section 81000)) and shall also include matters proscribed by Article
4 (commencing with Section 1090) of Chapter 1 of Division 4 of
Title 1.

(2) For the purposes of subdivision (b), the term “conflict of
interest” shall also include matters addressed by Rule 3-310 of the
Rules of Professional Conduct promulgated by the State Bar of
California, pertaining to representation of adverse interests.

begin delete

SEC. 14.  

Section 56653 of the Government Code, as amended
by Section 2 of Chapter 784 of the Statutes of 2014, is amended
to read:

56653.  

(a) If a proposal for a change of organization or
reorganization is submitted pursuant to this part, the applicant shall
submit 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 currently
provided or 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, if new services are proposed.

(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.

(c) (1) In the case of a change of organization or reorganization
initiated by a local agency that includes a disadvantaged,
unincorporated community as defined in Section 56033.5, a local
agency may include in its resolution of application for change of
organization or reorganization an annexation development plan
adopted pursuant to Section 99.3 of the Revenue and Taxation
Code to improve or upgrade structures, roads, sewer or water
facilities, or other infrastructure to serve the disadvantaged,
unincorporated community through the formation of a special
district or reorganization of one or more existing special districts
with the consent of each special district’s governing body.

(2) The annexation development plan submitted pursuant to this
subdivision shall include information that demonstrates that the
formation or reorganization of the special district will provide all
of the following:

(A) The necessary financial resources to improve or upgrade
structures, roads, sewer, or water facilities or other infrastructure.
The annexation development plan shall also clarify the local entity
that shall be responsible for the delivery and maintenance of the
services identified in the application.

(B) An estimated timeframe for constructing and delivering the
services identified in the application.

(C) The governance, oversight, and long-term maintenance of
the services identified in the application after the initial costs are
recouped and the tax increment financing terminates.

(3) If a local agency includes an annexation development plan
pursuant to this subdivision, a local agency formation commission
may approve the proposal for a change of organization or
reorganization to include the formation of a special district or
reorganization of a special district with the special district’s
consent, including, but not limited to, a community services district,
municipal water district, or sanitary district, to provide financing
to improve or upgrade structures, roads, sewer or water facilities,
or other infrastructure to serve the disadvantaged, unincorporated
community, in conformity with the requirements of the principal
act of the district proposed to be formed and all required formation
proceedings.

(4) Pursuant to Section 56881, the commission shall include in
its resolution making determinations a description of the annexation
development plan, including, but not limited to, an explanation of
the proposed financing mechanism adopted pursuant to Section
99.3 of the Revenue and Taxation Code, including, but not limited
to, any planned debt issuance associated with that annexation
development plan.

(d) This section shall not preclude a local agency formation
commission from considering any other options or exercising its
powers under Section 56375.

(e) This section shall remain in effect only until January 1, 2025,
and as of that date is repealed.

SEC. 15.  

Section 56653 of the Government Code, as added by
Section 3 of Chapter 784 of the Statutes of 2014, is amended to
read:

56653.  

(a) If a proposal for a change of organization or
reorganization is submitted pursuant to this part, the applicant shall
submit 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 currently
provided or 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, if new services are proposed.

(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.

(c) This section shall become operative on January 1, 2025.

end delete

begin delete SEC. 16. end delete
begin insert SEC. 14. end insert   

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, 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 hearing shall not be held prior to the expiration of the
reconsideration period specified in subdivision (b) of Section
56895. The date of that hearing shall not be less than 21 days, or
more than 60 days, after the date the notice is given.

(b) Where the proceeding is for the establishment of a district
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 56662
or 56663, a change of organization or reorganization may be
approved without notice, hearing, and election.

begin delete SEC. 17. end delete
begin insert SEC. 15. end insert   

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, the exercise of new or different functions
or class of services or the divestiture of the power to provide
particular functions or class of services within all or part of the
jurisdictional boundaries of a special district, 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 paragraphs (1) and (2) of this subdivision do not
apply.

(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.

begin delete SEC. 18. end delete
begin insert SEC. 16. end insert   

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
residing within the affected territory.

(b) Order the change of organization or reorganization subject
to confirmation by the registered voters residing within the affected
territory, and request the city council to 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 of the
following:

(1) At least 15 percent of the registered voters residing within
the affected territory.

(2) At least 15 percent of the number of owners of land who
also own not less than 15 percent of the total assessed value of
land within the affected territory.

(c) Order the territory annexed without an election if
subdivisions (a) and (b) do not apply.

begin delete SEC. 19. end delete
begin insert SEC. 17. end insert   

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 termination of 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.

begin delete SEC. 20. end delete
begin insert SEC. 18. end insert   

Section 57179 of the Government Code is amended
to read:

57179.  

The commission shall execute a certificate of
termination of proceedings if the votes cast in favor of the change
of organization or reorganization do not constitute a majority.