BILL ANALYSIS
 
 

 
                       SENATE LOCAL GOVERNMENT COMMITTEE
                      Senator Richard K. Rainey, Chairman
 

          BILL NO:  AB 1556                     HEARING:  8/25/00
          AUTHOR:  Correa                       FISCAL:  No
          VERSION:  8/21/00                     CONSULTANT:  Detwiler
 
                           ANNEXATION OF MCAS EL TORO

                           Background and Existing Law

          The power to create local governments and set their
          boundaries belongs to the legislative branch.  The
          California Legislature has delegated much of its authority
          over the boundaries of cities and special districts to the
          local agency formation commissions (LAFCOs).  The courts
          refer to LAFCOs as the Legislature's watchdogs over local
          boundaries.

          The Cortese-Knox Act requires four, sometimes five, steps
          for city annexations:

                First  is the application to LAFCO.  Landowners or
          registered voters can petition LAFCO, asking for
          annexation.  Alternatively, a city can apply directly to
          LAFCO by adopting a resolution.  In any case, there must be
          an environmental review document.  Further, the city and
          the county government must agree to a property tax
          exchange.  Without a property tax exchange agreement, LAFCO
          can't consider the annexation.

                Second  is LAFCO's review and approval.  After
          receiving a staff report and considering the environmental
          document at a public hearing, the commission can approve or
          deny the proposed annexation.

                Third  is a public hearing held by the city council to
          measure protests.  If the property is uninhabited (less
          than 12 registered voters), then the annexation goes
          forward without an election unless there is a majority
          landowner protest.  If the property is inhabited (12 or
          more voters), then:
                If protests are less than 25% of the voters, the
               annexation goes forward without an election.  See step
               five.
                If protests are between 25% and 50%, the annexation
               goes forward, subject to voter approval.  See step four.
                If protests are 50% or more of the voters, the
               annexation stops.

                Fourth  is the election among the registered voters in
          the area proposed for annexation to the city, but only if
          there was 25% or more protest among the voters.  If the
          protests were less than 25%, there is no election.

                Fifth  is the filing of formal documents, making the
          annexation official.

          A crucial decision is whether the area to be annexed has 12
          or more registered voters, making it inhabited and raising
          the possibility of an election.  That fact is determined
          when the city council adopts a resolution applying to LAFCO
          (if the council gave 20 days' prior notice)  or  the date on
          which LAFCO accepts the annexation application as complete
          (including the required property tax exchange agreement).
          If there are fewer than 12 registered voters on that date,
          local officials must treat the proposal as an uninhabited
          annexation, even if many voters move onto the property
          later.

          The future of the former Marine Corps Air Station (MCAS) El
          Toro remains controversial.  The federal government has
          recognized the County of Orange as the "local redevelopment
          authority" responsible for converting the former military
          base to civilian uses.

          About 420 acres of the former base are already inside
          Irvine's city limits but the other approximately 4,300
          acres are in the unincorporated territory of Orange County.
           In 1994, the County's voters passed Measure A, calling for
          a civilian airport at El Toro.  A 1996 ballot measure to
          overturn Measure A failed.  In March 2000, the voters
          passed Measure F to require 2/3-voter approval before the
          County supervisors can approve any airport, jail, or
          hazardous waste facility.  Arguments in the lawsuit
          challenging Measure F will occur in mid-September.

          Orange County wants federal officials eventually to
          transfer title to the former base to the county government.
           In the meantime, the County has leased the property from
          the Navy to start the conversion to civilian uses.  Some
          county supervisors want to lease about 850 abandoned
          military housing units to a private developer who would
          rehabilitate the dwellings and then rent some of them at
          affordable rates.  The County's draft plan calls for the
          eventual demolition of those housing projects and the
          operation of a civilian airport.

          In 1999, the City of Irvine filed a preliminary application
          with the Orange LAFCO to annex about 4,400 acres, including
          the rest of MCAS El Toro.  Irvine's general plan calls for
          commercial and residential land uses but not an airport.
          County officials fear that if Irvine annexes El Toro, they
          won't be able to convert the base into a civilian airport.
          State law gives cities control over airports within their
          boundaries.  County officials further worry that if tenants
          move into former military housing, the new residents could
          vote in an election to annex the territory to Irvine.
          County officials want to block the annexation to Irvine
          until the federal government transfers ownership to the
          county government.
 

                                   Proposed Law

          Assembly Bill 1556 prohibits the Orange Local Agency
          Formation Commission (LAFCO) from approving or
          conditionally approving the annexation of Marine Corps Air
          Station El Toro until the title to that territory transfers
          to the local redevelopment authority, or until January 1,
          2007, whichever occurs first.

                                     Comments

          1.   Opportunity knocks  .  Orange County faces a dilemma that
          AB 1556 resolves.  On the one hand, the County wants to
          start converting MCAS El Toro to civilian uses by reopening
          former military dwellings to affordable housing.  On the
          other hand, the County worries that the new residents might
          vote to annex the property to Irvine.  Annexation to Irvine
          will preclude the property's use as a civilian airport.  By
          temporarily blocking the annexation of El Toro, AB 1556
          gives Orange County the advantage it needs for the next six
          years.  By keeping MCAS El Toro under the County's control
          until 2007, AB 1556 promotes the political stability that's
          necessary to convert the former military base to civilian
          control.

          2.   The bill isn't necessary  .  Current law already allows
          Orange County to block Irvine's proposed annexation of El
          Toro.  By declining to sign a property tax exchange
          agreement, the County can prevent the Orange LAFCO from
          considering Irvine's annexation application.  If LAFCO
          can't act on the proposal, there's no danger that the new
          residents of the former military housing could vote in an
          annexation election.  Given the provisions of current law,
          the Committee may wish to consider if AB 1556 is necessary.

          3.   It's still uninhabited  .  Even if Orange County agreed
          to a property tax exchange with Irvine and city officials
          filed their application with LAFCO, the Cortese-Knox Act
          wouldn't consider El Toro to be inhabited territory.  The
          date on which officials determine if the territory is
          inhabited or uninhabited is the date that LAFCO accepts a
          city's annexation application as complete.  As long as
          Orange County officials don't allow tenants into the former
          military housing until after LAFCO accepts Irvine's
          application, state law treats the property as uninhabited.
          Even if the County allows hundreds of tenants into the
          planned affordable housing after that date, the annexation
          will proceed as legally uninhabited territory.  In that
          case, even if LAFCO approves Irvine's request, the
          Cortese-Knox Act does not provide for an annexation
          election.  Current law allows Orange County to block
          Irvine's uninhabited annexation by filing a majority
          landowner protest.

          4.   Legislative prerogative  .  The Legislature has the
          constitutional power to control the boundaries of local
          governments: counties, cities, special districts, and
          school districts.  As long as the Legislature honors the
          constitutional rights of residents and landowners, it can
          change local boundaries.  A 1907 U.S. Supreme Court
          decision held that state legislatures can constitutionally
          create, expand, diminish, or totally abolish cities with or
          without the consent of their residents, or even against
          their protest.  California's courts continue to follow this
          precedent.  Although banning a city annexation is unusual,
          AB 1556 is within the Legislature's constitutional
          prerogative.
 
          5.   Legislative history  .  Originally introduced by Assembly
          Member Maddox as a spot bill dealing with the Business and
          Professions Code, AB 1556 eventually blossomed into a  measure
          benefiting freeway billboards in Garden Grove.  The
          August 21 amendments stripped those provisions, added
          Assembly Members Correa and Granlund as the authors, and
          inserted the language that temporarily prohibits the
          annexation of MCAS El Toro.

          6.   Technical error  .  The August 21 amendments rewrote the
          entire bill, including the so-called relating clause in the
          measure's title.  Previously a bill relating to "outdoor
          advertising," Legislative Counsel now says the bill relates
          to "redevelopment."  AB 1556 actually relates to local
          agencies' boundaries, not redevelopment.  The Committee may
          wish to consider making a technical amendment that allows
          Legislative Counsel to correct its erroneous relating
          clause.
 

                                 Assembly Actions

          Not relevant to the August 21, 2000 version of the bill.
 

                         Support and Opposition  (8/23/)

           Support  :  Orange County Supervisors Coad, Smith, Silva;
          California State Council of Laborers, California State
          Council of Carpenters, Central Labor Council of Orange
          County, International Brotherhood of Electrical Workers
          Local 441, Laborers Local 652, Orange County Business
          Council, State Building Trades Council.

           Opposition  :  California Association of LAFCOs,
          approximately 850 individuals.