BILL NUMBER: AB 948 CHAPTERED 10/10/01 CHAPTER 667 FILED WITH SECRETARY OF STATE OCTOBER 10, 2001 APPROVED BY GOVERNOR OCTOBER 9, 2001 PASSED THE ASSEMBLY SEPTEMBER 12, 2001 PASSED THE SENATE SEPTEMBER 6, 2001 AMENDED IN SENATE SEPTEMBER 4, 2001 AMENDED IN SENATE JUNE 26, 2001 AMENDED IN SENATE JUNE 13, 2001 AMENDED IN ASSEMBLY APRIL 19, 2001 AMENDED IN ASSEMBLY MARCH 27, 2001 INTRODUCED BY Assembly Member Kelley FEBRUARY 23, 2001 An act to amend Sections 56375, 56425, 56821, 56821.5, 56822, 56824.1, 56824.7, 56834, 56853, 56863, 56886, and 57114 of, to add Section 56877 to, to add Article 1.5 (commencing with Section 56824.10) to Chapter 5 of Part 3 of Division 3 of Title 5 of, to repeal Sections 56820, 56820.5, 56820.7, and 56821.7 of, and to repeal and add Section 56811 of, the Government Code, relating to local agency formation. LEGISLATIVE COUNSEL'S DIGEST AB 948, Kelley. Local agency formation. (1) Existing law prescribes generally the powers and duties of the local agency formation commission in each county with respect to the review approval or disapproval of proposals for changes of organization or reorganization of cities and special districts within that county. Existing law requires that a city or special district request and receive written approval from the commission in the affected county before providing new or extended services outside its jurisdictional boundaries. This bill would enact provisions to govern commission proceedings to consider the exercise of new or different functions or services by special districts. (2) Existing law authorizes the commission itself to initiate certain changes of organization when consistent with a recommendation or conclusion of a specified study. This bill would cross-reference the requirement that the commission make certain determinations concerning the likely effects of the change of organization or reorganization. (3) Under existing law, the commission is required, with respect to the incorporation of a new city or the formation of a new district, to determine the number of voters residing within the proposed city or special district. This bill would require the commission, with respect to the formation of a landowner-voter special district, to determine the number of owners of land within the proposed district and the assessed value of land in the proposed district, thereby imposing a state-mandated local program. (4) Under existing law, the commission is required to develop and determine the sphere of influence of each local governmental agency within the county. For any sphere of influence or a sphere of influence that includes a special district, the commission is required to perform certain duties, including determining that no new or different function or class of service shall be provided by any existing district, except upon approval by the commission. This bill would repeal that requirement. (5) Existing law authorizes the commission to undertake proceedings for the adoption, amendment, or repeal of regulations affecting the functions and services of special districts on its own initiative or in response to the initiative of the special districts and authorizes the commission to adopt, amend, or repeal those regulations. The commission may condition the approval of the application for formation of a special district upon the adoption, amendment, or repeal of regulations concerning the functions and services proposed to be provided by the district. This bill would limit this authority to the repeal of those regulations. (6) Existing law requires the commission to approve or conditionally approve a proposal for the consolidation or reorganization of districts into a single local agency if a majority of the members of 2 or more legislative bodies adopt substantially similar resolutions of application proposing the consolidation or reorganization. This bill would prohibit the commission from making a material change in such a consolidation or reorganization proposal that would add or delete districts without the written consent of the applicant local agencies. (7) Existing law authorizes the commission to order certain changes of organization without an election but requires an election in each affected city or district if the written protests meet specified requirements. This bill would provide that when a change of organization or reorganization includes the annexation of inhabited territory to a district and the assessed value of the land or the number of registered voters in the subject territory exceeds 1/2 of that in the existing district, the commission may require a confirmation by the voters in the subject territory. (8) Under existing law, within 35 days after the conclusion of a hearing on an original and an alternative proposal to form a subsidiary district, the commission is required to adopt its resolution of determination that (a) denies both proposals, (b) approves both proposals, or (c) approves one proposal and denies the other. This bill would delete the option of the commission to approve both the original proposal and the alternative proposal. (9) Existing law authorizes the commission to make any change of organization or reorganization subject to various terms and conditions, including the fixing and establishment of priorities of use, or right of use, of water, or capacity rights in any public improvements or facilities or any other property. This bill would provide that these specific terms and conditions shall not modify priorities of use, or right of use, to water, or capacity rights in any public improvements or facilities that have been fixed and established by a court or an order of the State Water Resources Control Board. (10) This bill would incorporate additional changes in Section 57114 of the Government Code proposed by AB 720, to be operative if AB 720 and this bill are both enacted and become effective on or before January 1, 2002, and this bill is enacted last. (11) The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 56375 of the Government Code is amended to read: 56375. The commission shall have all of the following powers and duties subject to any limitations upon its jurisdiction set forth in this part: (a) To review and approve or disapprove with or without amendment, wholly, partially, or conditionally, proposals for changes of organization or reorganization, consistent with written policies, procedures, and guidelines adopted by the commission. The commission may initiate proposals for (1) consolidation of districts, as defined in Section 56036, (2) dissolution, (3) merger, or (4) establishment of a subsidiary district, or a reorganization that includes any of these changes of organization. A commission shall have the authority to initiate only a (1) consolidation of districts, (2) dissolution, (3) merger, (4) establishment of a subsidiary district, or (5) a reorganization that includes any of these changes of organization, if that change of organization or reorganization is consistent with a recommendation or conclusion of a study prepared pursuant to Section 56378 or 56425, and the commission makes the determinations specified in subdivision (b) of Section 56881. However, a commission shall not have the power to disapprove an annexation to a city, initiated by resolution, of contiguous territory that the commission finds is any of the following: (1) Surrounded or substantially surrounded by the city to which the annexation is proposed or by that city and a county boundary or the Pacific Ocean if the territory to be annexed is substantially developed or developing, is not prime agricultural land as defined in Section 56064, is designated for urban growth by the general plan of the annexing city, and is not within the sphere of influence of another city. (2) Located within an urban service area that has been delineated and adopted by a commission, which is not prime agricultural land, as defined by Section 56064, and is designated for urban growth by the general plan of the annexing city. (3) An annexation or reorganization of unincorporated islands meeting the requirements of Section 56375.3. As a condition to the annexation of an area that is surrounded, or substantially surrounded, by the city to which the annexation is proposed, the commission may require, where consistent with the purposes of this division, that the annexation include the entire island of surrounded, or substantially surrounded, territory. A commission shall not impose any conditions that would directly regulate land use density or intensity, property development, or subdivision requirements. When the development purposes are not made known to the annexing city, the annexation shall be reviewed on the basis of the adopted plans and policies of the annexing city or county. A commission shall require, as a condition to annexation, that a city prezone the territory to be annexed. However, the commission shall not specify how, or in what manner, the territory shall be prezoned. The decision of the commission with regard to a proposal to annex territory to a city shall be based upon the general plan and prezoning of the city. (b) With regard to a proposal for annexation or detachment of territory to, or from, a city or district or with regard to a proposal for reorganization that includes annexation or detachment, to determine whether territory proposed for annexation or detachment, as described in its resolution approving the annexation, detachment, or reorganization, is inhabited or uninhabited. (c) With regard to a proposal for consolidation of two or more cities or districts, to determine which city or district shall be the consolidated, successor city or district. (d) To approve the annexation of unincorporated, noncontiguous territory, subject to the limitations of Section 56742, located in the same county as that in which the city is located, and that is owned by a city and used for municipal purposes and to authorize the annexation of the territory without notice and hearing. (e) To approve the annexation of unincorporated territory consistent with the planned and probable use of the property based upon the review of general plan and prezoning designations. No subsequent change may be made to the general plan for the annexed territory or zoning that is not in conformance to the prezoning designations for a period of two years after the completion of the annexation, unless the legislative body for the city makes a finding at a public hearing that a substantial change has occurred in circumstances that necessitate a departure from the prezoning in the application to the commission. (f) With respect to the incorporation of a new city or the formation of a new special district, to determine the number of registered voters residing within the proposed city or special district or, for a landowner-voter special district, the number of owners of land and the assessed value of their land within the territory proposed to be included in the new special district. The number of registered voters shall be calculated as of the time of the last report of voter registration by the county elections official to the Secretary of State prior to the date the first signature was affixed to the petition. The executive officer shall notify the petitioners of the number of registered voters resulting from this calculation. The assessed value of the land within the territory proposed to be included in a new landowner-voter special district shall be calculated as shown on the last equalized assessment roll. (g) To adopt written procedures for the evaluation of proposals. The commission may adopt standards for any of the factors enumerated in Section 56668. Any standards adopted by the commission shall be written. (h) To adopt standards and procedures for the evaluation of service plans submitted pursuant to Section 56653 and the initiation of a change of organization or reorganization pursuant to subdivision (a). (i) To make and enforce regulations for the orderly and fair conduct of hearings by the commission. (j) To incur usual and necessary expenses for the accomplishment of its functions. (k) To appoint and assign staff personnel and to employ or contract for professional or consulting services to carry out and effect the functions of the commission. (l) To review the boundaries of the territory involved in any proposal with respect to the definiteness and certainty of those boundaries, the nonconformance of proposed boundaries with lines of assessment or ownership, and other similar matters affecting the proposed boundaries. (m) To waive the restrictions of Section 56744 if it finds that the application of the restrictions would be detrimental to the orderly development of the community and that the area that would be enclosed by the annexation or incorporation is so located that it cannot reasonably be annexed to another city or incorporated as a new city. (n) To waive the application of Section 25210.90 or Section 22613 of the Streets and Highways Code if it finds the application would deprive an area of a service needed to ensure the health, safety, or welfare of the residents of the area and if it finds that the waiver would not affect the ability of a city to provide any service. However, within 60 days of the inclusion of the territory within the city, the legislative body may adopt a resolution nullifying the waiver. (o) If the proposal includes the incorporation of a city, as defined in Section 56043, or the formation of a district, as defined in Section 2215 of the Revenue and Taxation Code, the commission shall determine the property tax revenue to be exchanged by the affected local agencies pursuant to Section 56810. (p) To authorize a city or district to provide new or extended services outside its jurisdictional boundaries pursuant to Section 56133. (q) To enter into an agreement with the commission for an adjoining county for the purpose of determining procedures for the consideration of proposals that may affect the adjoining county or where the jurisdiction of an affected agency crosses the boundary of the adjoining county. SEC. 2. Section 56425 of the Government Code is amended to read: 56425. (a) In order to carry out its purposes and responsibilities for planning and shaping the logical and orderly development and coordination of local governmental agencies so as to advantageously provide for the present and future needs of the county and its communities, the commission shall develop and determine the sphere of influence of each local governmental agency within the county and enact policies designed to promote the logical and orderly development of areas within the sphere. (b) At least 30 days prior to submitting an application to the commission for a determination of a new sphere of influence, or to update an existing sphere of influence for a city, representatives from the city shall meet with county representatives to discuss the proposed sphere, and its boundaries, and explore methods to reach agreement on the boundaries, development standards, and zoning requirements within the sphere to ensure that development within the sphere occurs in a manner that reflects the concerns of the affected city and is accomplished in a manner that promotes the logical and orderly development of areas within the sphere. If no agreement is reached between the city and county within 30 days, then the parties may, by mutual agreement, extend discussions for an additional period of 30 days. If an agreement is reached between the city and county regarding the boundaries, development standards, and zoning requirements within the proposed sphere, the agreement shall be forwarded to the commission, and the commission shall consider and adopt a sphere of influence for the city consistent with the policies adopted by the commission pursuant to this section, and the commission shall give great weight to the agreement in the commission' s final determination of the city sphere. (c) If the commission's final determination is consistent with the agreement reached between the city and county pursuant to subdivision (b), the agreement shall be adopted by both the city and county after a noticed public hearing. Once the agreement has been adopted by the affected local agencies and their respective general plans reflect that agreement, then any development approved by the county within the sphere shall be consistent with the terms of that agreement. (d) If no agreement is reached pursuant to subdivision (b), the application may be submitted to the commission and the commission shall consider a sphere of influence for the city consistent with the policies adopted by the commission pursuant to this section. (e) In determining the sphere of influence of each local agency, the commission shall consider and prepare a written statement of its determinations with respect to each of the following: (1) The present and planned land uses in the area, including agricultural and open-space lands. (2) The present and probable need for public facilities and services in the area. (3) The present capacity of public facilities and adequacy of public services that the agency provides or is authorized to provide. (4) The existence of any social or economic communities of interest in the area if the commission determines that they are relevant to the agency. (f) Upon determination of a sphere of influence, the commission shall adopt that sphere, and shall review and update, as necessary, the adopted sphere not less than once every five years. (g) The commission may recommend governmental reorganizations to particular agencies in the county, using the spheres of influence as the basis for those recommendations. Those recommendations shall be made available, upon request, to other agencies or to the public. The commission shall make all reasonable efforts to ensure wide public dissemination of the recommendations. (h) When adopting, amending, or updating a sphere of influence for a special district, the commission shall do all of the following: (1) Require existing districts to file written statements with the commission specifying the functions or classes of services provided by those districts. (2) Establish the nature, location, and extent of any functions or classes of services provided by existing districts. (i) Subdivisions (b), (c), and (d) shall become inoperative as of January 1, 2007, unless a later enacted statute, that becomes operative on or before January 1, 2007, deletes or extends that date. SEC. 3. Section 56811 of the Government Code is repealed. SEC. 4. Section 56811 is added to the Government Code, to read: 56811. (a) If a proposal includes the formation of a new special district, the commission shall determine the appropriations limit of the district in accordance with Section 7902.7 and Article XIIIB of the California Constitution. The commission shall determine the provisional appropriations limit of the district in the following manner: (1) Estimate the amount of revenue anticipated to be received by the district from the proceeds of taxes for the first full fiscal year of operation. (2) Adjust the amount determined in paragraph (1) for the estimated change in the cost of living and population in the next full fiscal year of operation and any other changes that may be required or permitted by Article XIIIB of the California Constitution. (b) The governing body of the district shall determine the proposed permanent appropriations limit of the district to be submitted to the voters in the following manner: (1) Determine the amount of revenue actually received by the district from the proceeds of taxes for the first full fiscal year of operation. (2) Adjust the amount determined in paragraph (1) for the estimated change in the cost of living and population in the next full fiscal year of operation and any other changes that may be required or permitted by Article XIIIB of the California Constitution. (c) The permanent appropriations limit of the district shall be set at the first district election that is held following the first full fiscal year of operation and shall not be considered to be a change in the appropriations limit of the city pursuant to Section 4 of Article XIIIB of the California Constitution. SEC. 5. Section 56820 of the Government Code is repealed. SEC. 6. Section 56820.5 of the Government Code is repealed. SEC. 7. Section 56820.7 of the Government Code is repealed. SEC. 8. Section 56821 of the Government Code is amended to read: 56821. Either the commission or the legislative body of any independent special district within a county may adopt a resolution initiating proceedings as follows: (a) It may propose representation of special districts upon the commission. (b) It may propose the repeal of regulations affecting the functions and services of special districts. SEC. 9. Section 56821.5 of the Government Code is amended to read: 56821.5. A certified copy of any resolution which has been adopted by an independent special district pursuant to subdivision (b) of Section 56821 shall be filed with the executive officer. If a resolution, or substantially identical resolution, has been filed by a majority of independent special districts within the county, then, not later than 35 days after the filing, the commission shall adopt a resolution of intention in accordance with the filed resolution or resolutions. SEC. 10. Section 56821.7 of the Government Code is repealed. SEC. 11. Section 56822 of the Government Code is amended to read. 56822. Whenever the commission, or the independent special districts, as the case may be, have complied with the applicable provisions of Sections 56821, 56821.1, 56821.3, and 56821.5, the commission shall adopt a resolution of intention pursuant to this section. The resolution of intention shall do all of the following: (a) 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. (b) If the resolution of intention proposes only the repeal of regulations affecting the functions and services of special districts, it shall state that the commission proposes either of the following: (1) To consider the proposal without reference to a special district advisory committee, in which case the resolution shall contain the text of the regulations proposed to be repealed. (2) To refer the proposal to a special district advisory committee for study, report, and recommendation, in which case the resolution shall include the regulations proposed to be repealed. In addition, the resolution of intention adopted pursuant to this subdivision shall also fix a time, not less than 15 or more than 35 days after the adoption of the resolution of intention, and the place of hearing by the commission on the question of whether the proposal made by the resolution should be disapproved, approved, and ordered without reference to a special district advisory committee, or referred to a special district advisory committee for study, report, and recommendation to the commission. (c) If the resolution of intention proposes representation of special districts on the commission, it shall state that the commission proposes to refer the proposal to a special district advisory committee and the commission shall immediately order the proposal referred to that committee pursuant to Section 56823. SEC. 12. Section 56824.1 of the Government Code is amended to read: 56824.1. Not later than 35 days after the filing with the executive officer of the report and recommendation of a special district advisory committee, the commission shall take one of the following actions: (a) If the report concerns only the repeal of regulations affecting the functions and services of special districts, the commission may do either of the following: (1) Disapprove the report without further notice and hearing. (2) Adopt a resolution of intention to hold a hearing on the report pursuant to subdivision (c). (b) If the report concerns a request for special district representation on the commission, the commission shall adopt a resolution declaring its intention to approve the report and recommendation. (c) A resolution of intention shall do all of the following: (1) Refer to the report and recommendation of the special district advisory committee, generally describe the nature and contents of the report and recommendation, and refer to the report and recommendation on file with the executive officer for a detailed description report and recommendation. (2) Declare the intention of the commission to approve the recommendation and report, as filed. (3) Fix a time, not less than 15 days, or more than 35 days, after the adoption of the resolution of intention, and the place of hearing by the commission, on the question of whether the report and recommendation filed by the special district advisory committee should be approved, either as filed or as ordered changed by the commission after notice and hearing. SEC. 13. Section 56824.7 of the Government Code is amended to read: 56824.7. Any resolution approving the report and recommendation of a special district advisory committee, either as filed or as changed by the commission, shall order both of the following: (a) The repeal of regulations, in accordance with the recommendations of the approved report. (b) The chairperson of the commission 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 if special district representatives on the commission are to be selected pursuant to Section 56332. SEC. 13.5. Article 1.5 (commencing with Section 56824.10) is added to Chapter 5 of Part 3 of Division 3 of Title 5 of the Government Code, to read: Article 1.5. New or Different Services 56824.10. Commission proceedings for the exercise of new or different functions or classes of services by special districts may be initiated by a resolution of application in accordance with this article. 56824.12. (a) A proposal by a special district to provide a new or different function or class of services within its jurisdictional boundaries shall be made by the adoption of a resolution of application by the legislative body of the special district and shall include all of the matters specified for a petition in Section 56700, and be submitted with a plan for services prepared pursuant to Section 56653. The plan for services for purposes of this article shall also include all of the following information: (1) The total estimated cost to provide the new or different function or class of services within the special district's jurisdictional boundaries. (2) The estimated cost of the new or different function or class of services to customers within the special district's jurisdictional boundaries. The estimated costs may be identified by customer class. (3) An identification of existing providers, if any, of the new or different function or class of services proposed to be provided and the potential fiscal impact to the customers of those existing providers. (4) A plan for financing the establishment of the new or different function or class of services within the special district's jurisdictional boundaries. (5) Alternatives for the establishment of the new or different functions or class of services within the special district's jurisdictional boundaries. (b) The clerk of the legislative body adopting a resolution of application shall file a certified copy of that resolution with the executive officer. Except as provided in subdivision (c), the commission shall process resolutions of application adopted pursuant to this article in accordance with Section 56824.14. (c) (1) Prior to submitting a resolution of application pursuant to this article to the commission, the legislative body of the special district shall conduct a public hearing on the resolution. Notice of the hearing shall be published pursuant to Sections 56153 and 56154. (2) Any affected local agency, affected county, or any interested person who wishes to appear at the hearing shall be given an opportunity to provide oral or written testimony on the resolution. 56824.14. (a) The commission shall review and approve or disapprove with or without amendments, wholly, partially, or conditionally, proposals for the establishment of new or different functions or class of services within the jurisdictional boundaries of a special district after a public hearing called and held for that purpose. (b) At least 21 days prior to the date of that hearing, the executive officer shall give mailed notice of the hearing to each affected local agency or affected county, and to any interested party who has filed a written request for notice with the executive officer. In addition, at least 21 days prior to the date of that hearing, the executive officer shall cause notice of the hearing to be published in accordance with Section 56153 in a newspaper of general circulation that is circulated within the territory affected by the proposal proposed to be adopted. (c) The commission may continue from time to time any hearing called pursuant to this section. The commission shall hear and consider oral or written testimony presented by any affected local agency, affected county, or any interested person who appears at any hearing called and held pursuant to this section. SEC. 14. Section 56834 of the Government Code is amended to read: 56834. From time to time during the course of study upon a proposed plan of reorganization, the commission may do any of the following: (a) Extend the time for completion and submission of the report and recommendation of a reorganization committee. (b) Change the scope of the study by the addition or deletion of territory or subject districts, except that the authority granted to a commission under this subdivision shall not apply to a change of organization or reorganization as described in subdivision (a) of Section 56853. (c) Authorize the committee to develop, study, report, and make recommendations upon alternative plans of reorganization. SEC. 15. Section 56853 of the Government Code is amended to read: 56853. (a) If a majority of the members of each of the legislative bodies of two or more local agencies adopt substantially similar resolutions of application making proposals either for the consolidation of districts or for the reorganization of all or any part of the districts into a single local agency, the commission shall approve, or conditionally approve, the proposal. The commission shall order the consolidation or reorganization without an election, except as otherwise provided in subdivision (b) of Section 57081. (b) Except as provided in subdivision (d), a commission may order any material change in the provisions or the terms and conditions of the consolidation or reorganization, as set forth in the proposals of the local agencies. The commission shall direct the executive officer to give each subject agency mailed notice of any change prior to ordering a change. The commission shall not, without the written consent of all subject agencies, take any further action on the consolidation or reorganization for 30 days following that mailing. Upon written demand by any subject agency, filed with the executive officer during that 30-day period, the commission shall make determinations upon the proposals only after notice and hearing on the proposals. If no written demand is filed, the commission may make those determinations without notice and hearing. The application of any provision of this subdivision may be waived by consent of all of the subject agencies. (c) Where the commission has initiated a change of organization or reorganization affecting more than one special district, the commission may utilize and is encouraged to utilize a reorganization committee to review the proposal. (d) The commission shall not order a material change in the provisions of a consolidation or reorganization, as set forth in the proposals of the local agencies pursuant to subdivision (a), that would add or delete districts without the written consent of the applicant local agencies. SEC. 16. Section 56863 of the Government Code is amended to read: 56863. (a) Within 35 days following the conclusion of a hearing on an original and an alternative proposal to form a subsidiary district, the commission shall adopt its resolution of determination, which shall do one of the following: (1) Deny both the original proposal and the alternative proposal. (2) Approve one proposal and deny the other. (b) "Alternative proposal," as used in this section, means an alternative proposal to a subsidiary district proposal as provided for in Section 56861. SEC. 17. Section 56877 is added to the Government Code, to read: 56877. When a change of organization or a reorganization includes the annexation of inhabited territory to a district and the assessed value of land within the territory equals one-half or more of the assessed value of land within the district, or the number of registered voters residing within the territory equals one-half or more of the number of registered voters residing within the district, the commission may determine as a condition of the proposal that the change of organization or reorganization shall also be subject to confirmation by the voters in an election to be called, held, and conducted within the territory of the district to which annexation is proposed. SEC. 18. Section 56886 of the Government Code is amended to read: 56886. Any change of organization or reorganization may provide for, or be made subject to one or more of, the following terms and conditions. However, none of the following terms and conditions shall directly regulate land use, property development, or subdivision requirements: (a) The payment of a fixed or determinable amount of money, either as a lump sum or in installments, for the acquisition, transfer, use or right of use of all or any part of the existing property, real or personal, of any city, county, or district. (b) The levying or fixing and the collection of any of the following, for the purpose of providing for any payment required pursuant to subdivision (a): (1) Special, extraordinary, or additional taxes or assessments. (2) Special, extraordinary, or additional service charges, rentals, or rates. (3) Both taxes or assessments and service charges, rentals, or rates. (c) The imposition, exemption, transfer, division, or apportionment, as among any affected cities, affected counties, affected districts, and affected territory of liability for payment of all or any part of principal, interest, and any other amounts which shall become due on account of all or any part of any outstanding or then authorized but thereafter issued bonds, including revenue bonds, or other contracts or obligations of any city, county, district, or any improvement district within a local agency, and the levying or fixing and the collection of any (1) taxes or assessments, or (2) service charges, rentals, or rates, or (3) both taxes or assessments and service charges, rentals, or rates, in the same manner as provided in the original authorization of the bonds and in the amount necessary to provide for that payment. (d) If, as a result of any term or condition made pursuant to subdivision (c), the liability of any affected city, affected county, or affected district for payment of the principal of any bonded indebtedness is increased or decreased, the term and condition may specify the amount, if any, of that increase or decrease which shall be included in, or excluded from, the outstanding bonded indebtedness of that entity for the purpose of the application of any statute or charter provision imposing a limitation upon the principal amount of outstanding bonded indebtedness of the entity. (e) The formation of a new improvement district or districts or the annexation or detachment of territory to, or from, any existing improvement district or districts. (f) The incurring of new indebtedness or liability by, or on behalf of, all or any part of any local agency, including territory being annexed to any local agency, or of any existing or proposed new improvement district within that local agency. The new indebtedness may be the obligation solely of territory to be annexed if the local agency has the authority to establish zones for incurring indebtedness. The indebtedness or liability shall be incurred substantially in accordance with the laws otherwise applicable to the local agency. (g) The issuance and sale of any bonds, including authorized but unissued bonds of a local agency, either by that local agency or by a local agency designated as the successor to any local agency which is extinguished as a result of any change of organization or reorganization. (h) The acquisition, improvement, disposition, sale, transfer, or division of any property, real or personal. (i) The disposition, transfer, or division of any moneys or funds, including cash on hand and moneys due but uncollected, and any other obligations. (j) The fixing and establishment of priorities of use, or right of use, of water, or capacity rights in any public improvements or facilities or any other property, real or personal. However, none of the terms and conditions ordered pursuant to this subdivision shall modify priorities of use, or right of use, to water, or capacity rights in any public improvements or facilities that have been fixed and established by a court or an order of the State Water Resources Control Board. (k) The establishment, continuation, or termination of any office, department, or board, or the transfer, combining, consolidation, or separation of any offices, departments, or boards, or any of the functions of those offices, departments, or boards, if, and to the extent that, any of those matters is authorized by the principal act. (l) The employment, transfer, or discharge of employees, the continuation, modification, or termination of existing employment contracts, civil service rights, seniority rights, retirement rights, and other employee benefits and rights. (m) The designation of a city, county, or district, as the successor to any local agency which is extinguished as a result of any change of organization or reorganization, for the purpose of succeeding to all of the rights, duties, and obligations of the extinguished local agency with respect to enforcement, performance, or payment of any outstanding bonds, including revenue bonds, or other contracts and obligations of the extinguished local agency. (n) The designation of (1) the method for the selection of members of the legislative body of a district or (2) the number of those members, or (3) both, where the proceedings are for a consolidation, or a reorganization providing for a consolidation or formation of a new district and the principal act provides for alternative methods of that selection or for varying numbers of those members, or both. (o) The initiation, conduct, or completion of proceedings on a proposal made under, and pursuant to, this division. (p) The fixing of the effective date of any change of organization, subject to the limitations of Section 57202. (q) Any terms and conditions authorized or required by the principal act with respect to any change of organization. (r) The continuation or provision of any service provided at that time, or previously authorized to be provided by an official act of the local agency. (s) The levying of assessments, including the imposition of a fee pursuant to Section 50029 or 66484.3 or the approval by the voters of general or special taxes. For the purposes of this section, imposition of a fee as a condition of the issuance of a building permit does not constitute direct regulation of land use, property development, or subdivision requirements. (t) The extension or continuation of any previously authorized charge, fee, assessment, or tax by the local agency or a successor local agency in the affected territory. (u) The transfer of authority and responsibility among any affected cities, affected counties, and affected districts for the administration of special tax and special assessment districts, including, but not limited to, the levying and collecting of special taxes and special assessments, including the determination of the annual special tax rate within authorized limits; the management of redemption, reserve, special reserve, and construction funds; the issuance of bonds which are authorized but not yet issued at the time of the transfer, including not yet issued portions or phases of bonds which are authorized; supervision of construction paid for with bond or special tax or assessment proceeds; administration of agreements to acquire public facilities and reimburse advances made to the district; and all other rights and responsibilities with respect to the levies, bonds, funds, and use of proceeds that would have applied to the local agency that created the special tax or special assessment district. (v) Any other matters necessary or incidental to any of the terms and conditions specified in this section. SEC. 19. Section 57114 of the Government Code is amended to read: 57114. (a) Notwithstanding Section 56854 and Section 57089, for any proposal for the dissolution of one or more districts and the annexation of all or substantially all of their territory to another district, not initiated by the commission pursuant to subdivision (a) of Section 56375, the commission shall forward the change of organization or reorganization for confirmation by the voters if the commission finds either of the following: (1) In the case of inhabited territory, that a petition requesting that the proposal be submitted to confirmation by the voters has been signed by either of the following: (A) At least 25 percent of the number of landowners within any affected district within the affected territory who own at least 25 percent of the assessed value of land within the territory. (B) At least 25 percent of the voters entitled to vote as a result of residing within, or owning land within, any affected district within the affected territory. (2) In the case of a landowner-voter district, that the territory is uninhabited and a petition requesting that the proposal be submitted to confirmation by the voters has been signed by at least 25 percent of the number of landowners within any affected district within the affected territory, owning at least 25 percent of the assessed value of land within the territory of that district. (b) If a petition that meets the requirements of this section has been filed, the commission shall approve the proposal subject to confirmation by the voters of each district that has filed such a petition. The voter confirmation requirements set forth in subdivision (a) shall not apply to any proposal initiated by the commission under Section 56375 or where each affected district has consented to the proposal by a resolution adopted by a majority vote of its board of directors. SEC. 19.5. Section 57114 of the Government Code is amended to read: 57114. (a) Notwithstanding Sections 56854 and 57111, for any proposal for the dissolution of one or more districts and the annexation of all or substantially all of their territory to another district, not initiated by the commission pursuant to subdivision (a) of Section 56375, the commission shall forward the change of organization or reorganization for confirmation by the voters if the commission finds either of the following: (1) In the case of inhabited territory, that a petition requesting that the proposal be submitted to confirmation by the voters has been signed by either of the following: (A) At least 25 percent of the number of landowners within any affected district within the affected territory who own at least 25 percent of the assessed value of land within the territory. (B) At least 25 percent of the voters entitled to vote as a result of residing within, or owning land within, any affected district within the affected territory. (2) In the case of a landowner-voter district, that the territory is uninhabited and a petition requesting that the proposal be submitted to confirmation by the voters has been signed by at least 25 percent of the number of landowners within any affected district within the affected territory, owning at least 25 percent of the assessed value of land within the territory of that district. (b) If a petition that meets the requirements of this section has been filed, the commission shall approve the proposal subject to confirmation by the voters of each district that has filed such a petition. The voter confirmation requirements set forth in subdivision (a) shall not apply to any proposal initiated by the commission under Section 56375 or where each affected district has consented to the proposal by a resolution adopted by a majority vote of its board of directors. SEC. 20. Section 19.5 of this bill incorporates amendments to Section 57114 of the Government Code proposed by both this bill and AB 720. It shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2002, (2) each bill amends Section 57114 of the Government Code, and (3) this bill is enacted after AB 720, in which case Section 19 of this bill shall not become operative. SEC. 21. No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because a local agency or school district has the authority to levy service charges, fees, or assessments sufficient to pay for the program or level of service mandated by this act, within the meaning of Section 17556 of the Government Code.