LAFCO begins at Section 56000 of the California Government Code. This legislation sets the Commission's powers and duties, procedures for establishing and changing governmental boundaries, and other statewide policies that LAFCOs must consider while making their determinations.

Before making any decision to approve proposals, the Commission is required to determine whether the proposals significantly affect the environment.

If the proposal potentially affects the environment, an environmental initial study is required in order to consider the proposal's effects. Should the initial study determine that the proposal would not have an adverse impact; a “negative declaration” would be submitted for public review prior to action on a proposal. If the potential environmental impacts appear to be substantial and unmitigatable, the project may need to have an environmental impact report (EIR) prepared.

Some proposals are exempt from CEQA; however, alternate forms of an environmental determination (including exemptions) must be included in the public record of the Commission’s proceedings.

California Government Code, 54950, is also known as the “Brown Act” or “Open Meeting Law.” The law sets forth requirements and restrictions governing meetings of the Commission to assure that the public has adequate opportunity to participate in the public hearing process.

The Commission takes into account the revenue and taxation implications of all proposals. The LAFCO office is required by Section 99 of the Revenue and Taxation Code to initiate the property tax negotiation process among all agencies affected by the proposal.

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