BILL ANALYSIS Ó AB 715 Page 1 Date of Hearing: August 13, 2014 ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT K.H. "Katcho" Achadjian, Chair AB 715 (Dickinson) - As Amended: June 16, 2014 SUBJECT : Sacramento Area Flood Control Agency: assessments. SUMMARY : Authorizes the Sacramento Area Flood Control Agency (SAFCA) to make specified changes to existing benefit assessment districts pursuant to the requirements put in place by Proposition 218 (1996). The Senate amendments delete the Assembly version of this bill, and instead: 1)Define that "change" includes "correct, alter, modify, add, omit, increase, decrease, extend, or any other change." 2)Authorize SAFCA to change, at any time, any of the following: a) The boundaries of an assessment district established by SAFCA; b) Any project identified in a report prepared by SAFCA in order to form an assessment district; c) Any assessment levied by SAFCA; and, d) Any act, determination, or provision by SAFCA or the board with respect to any assessment district established by SAFCA. 3)Require any proceeding for any change described in 2) above, to be initiated, conducted, and completed consistent with: a) Article XIII D of the California Constitution; b) The Proposition 218 Omnibus Implementation Act; and, c) The procedures provided in existing law for SAFCA for the establishment of an assessment district, except as specified in 4) and 5) below. 4)Require in proceedings to annex territory to an existing AB 715 Page 2 assessment district that the resolution, report, notices of hearing, right of majority protest and election are limited to the territory proposed to be annexed. 5)Allow SAFCA in proceedings to detach an area from an existing assessment district or dissolve an existing assessment district, to dispense with the preparation and approval of the report required pursuant to existing law at the formation of a new assessment district. 6)Prohibit SAFCA from undertaking any change with respect to any assessment district while the bonds secured by the assessment levied in that assessment district are outstanding, unless the board determines in a resolution of intention with respect to the change that it will not interfere with the timely retirement of the bonds. AS PASSED BY THE ASSEMBLY , this bill revised appellate review of certain summary judgment issues. FISCAL EFFECT : None COMMENTS : 1)Sacramento Flood Control Agency (SAFCA). SAFCA, formed in 1990, is a joint powers agency comprised of Sacramento County, Sutter County, the City of Sacramento, Sacramento County Water Agency, Sutter County Water Agency, Reclamation District No. 1000, and the American River Flood Control District. SAFCA is responsible for coordinating a regional effort to finance, provide, and maintain facilities and works necessary to ensure a reasonable and prudent level of flood protection in designated residential, commercial, or industrial areas within its boundaries and for providing local assurances and participating in cost sharing for federal flood control projects. SAFCA is governed by the Sacramento Area Flood Control Agency Act enacted by the Legislature in 1990 (SB 46 (Garamendi), Chapter 510). Current law authorizes SAFCA to levy assessments, reassessments, or special taxes and to issue bonds to finance the acquisition, construction, maintenance, or operation of authorized flood control facilities. SAFCA may levy assessments, reassessments, or special taxes, and issue bonds pursuant to the Improvement Act of 1911, the Improvement Bond AB 715 Page 3 Act of 1915, the Municipal Improvement Act of 1913, the Benefit Assessment Act of 1982, the Integrated Financing District Act, the Mello-Roos Community Facilities Act of 1982, and the Marks-Roos Local Bond Pooling Act of 1985. SAFCA's special act also establishes another process that SAFCA may use, as an alternative or in addition to its other powers, to levy assessments and issue bonds. Unlike some other state laws authorizing local governments to levy benefit assessments, current law does not explicitly authorize SAFCA to make changes to an existing assessment district. 2)Purpose of this bill. This bill authorizes SAFCA to make changes to the boundaries, projects, assessments, and any act, determination or provision by SAFCA with respect to any existing assessment districts established by SAFCA. Under this bill, SAFCA must comply with the requirements in Article XIII D of the California Constitution, the Proposition 218 Omnibus Implementation Act, and the requirements in existing law for SAFCA to initiate, conduct, and complete proceedings for any change. This bill defines the term "change" to include "correct, alter, modify, add, omit, increase, decrease, extend, or any other change." This bill also requires that, in proceedings to annex territory to an existing assessment district, the resolutions, report, notices of hearing, right of majority protest, and any election must be limited to the territory proposed to be annexed. In proceedings to detach an area from an existing assessment district or dissolve an existing assessment district, SAFCA may dispense with the preparation and approval of the report that is required as part of the process to establish a district. This bill prohibits SAFCA from making a change to any assessment district while the bond secured by the assessments levied in that assessment district are outstanding, unless SAFCA's board determines in the resolution of intention with respect to the change that it will not interfere with the bonds' timely retirement. This bill is sponsored by SAFCA. 3)Author's statement. According to the author, "Now that the [United States] President has signed legislation authorizing the Natomas Levee Project, the local community must begin working on coming up with the local share of the costs. SAFCA has two assessment districts in place already. Funds from those assessments have gone toward work currently completed on AB 715 Page 4 the Natomas Levee project. SAFCA could create another assessment district. This is time consuming and expensive. Or, as this [bill] envisions, SAFCA could modify one of the existing districts and save the time and expense of a third district. This 'new' district would have to be voted upon and approved by the local residents, and it is subject to the requirements of Article XIII D of the California Constitution and Proposition 218." 4)Benefit Assessments and Proposition 218. Most of the special assessment acts provide for the issuance of bonds, generally secured by the property within the district, and then the bonded indebtedness is repaid with money generated by the assessments. Most assessments are levied against real property, and are generally collected on the property tax roll, secured by a lien against the assessed property, and subject to Proposition 218. Proposition 218 distinguishes among taxes, assessments and fees for property-related revenues, and requires certain actions before such revenues may be collected. Counties and other local agencies with police powers may impose any one of these options on property owners, after completing the Proposition 218 process. Special districts created by statute, however, must have specific authority for each of these revenue sources. 5)Arguments in support. Supporters argue that this bill authorizes SAFCA to increase an assessment, extend its term, and change the boundaries of an existing assessment district in compliance with existing law, including Proposition 218. 6)Arguments in opposition. None. 7)Gut and amend. This bill was substantially amended in the Senate and therefore no Assembly policy committee has heard the subject matter of this bill during this legislative session. REGISTERED SUPPORT / OPPOSITION : Support Sacramento Area Flood Control Agency [SPONSOR] AB 715 Page 5 Opposition None on file Analysis Prepared by : Misa Yokoi-Shelton / L. GOV. / (916) 319-3958