Amended in Assembly August 22, 2013

Amended in Senate May 7, 2013

Amended in Senate April 23, 2013

Amended in Senate April 1, 2013

Senate Bill No. 142

Introduced by Senator DeSaulnier

January 30, 2013

An act to repeal Chapter 2 (commencing with Section 99100) of, and to repeal begin delete and end delete begin insert , end insert add begin insert , and repeal end insert Chapter 1 (commencing with Section 99000) of, Part 11 of Division 10 of the Public Utilities Code, relating to transportation.

LEGISLATIVE COUNSEL’S DIGEST

SB 142, as amended, DeSaulnier. Public transit.

Existing law provides for creation of one or more special benefit districts within a transit district or rapid transit district relative to the issuance of bonds to be repaid through special assessments levied on property within the special benefit district, or certain zones within the special benefit district, with the proceeds of the bonds to be used for specified transit improvements. Existing law enacts similar provisions applicable to a municipal transit system owned by a city or city and county.

This bill would repeal all of these provisions.

Existing law, with respect to the Santa Clara Valley Transportation Authority, authorizes the creation of one or more benefit districts by the authority for rail transit purposes.

This bill begin insert , until January 1, 2021, end insert would enact new general provisions similar to the Santa Clara Valley Transportation Authority provisions that would authorize an operator, defined to mean a transit district, municipal operator, or other public agency operating or contracting for the operation of transit, commuter rail, or intercity rail services, to create one or more special benefit districts within the service area of the operator relative to the issuance of bonds to be repaid through special assessments levied on property within the special benefit district, or zones within the special benefit district. An operator other than a transit district or municipal operator would be authorized to implement these provisions only if the action is consistent with the general or specific plans of the city or county within which the special benefit district is to be created. The proceeds of the bonds would be required to be used for eligible transit projects, including transit stations and rail facilities, as defined. The eligible transit projects would be required to provide special benefits to parcels of land, and improvements on those parcels, within the vicinity of transit stations. The bill would require the area included in a benefit district established under these provisions to lie not more than begin delete one end delete begin insert 1⁄2 end insert mile from the center point of a transit station. The bill would require the special benefit assessments authorized by the bill to be levied and collected by the applicable county and would thereby impose a state-mandated local program.

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.

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

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

SECTION 1.  

Chapter 1 (commencing with Section 99000) of
Part 11 of Division 10 of the Public Utilities Code is repealed.

SEC. 2.  

Chapter 1 (commencing with Section 99000) is added
to Part 11 of Division 10 of the Public Utilities Code, to read:

 

Chapter  1. Benefit Assessment Districts

 

99000.  

As used in this chapter, the following terms have the
following meanings:

(a) “Benefit district” means a special benefit assessment district
established pursuant to this chapter, the area of which shall lie not
more than one-half mile from the center point of any transit station
or proposed transit station.

(b) “Board” means the governing board of the operator.

(c) “Eligible transit project” means transit stations and rail
facilities and associated services, but excludes operating costs of
rail or transit services.

(d) (1) For purposes of this chapter, “legal representative”
means an official of a corporation owning real property in the
benefit district.

(2) For purposes of this chapter, “legal representative” also
means a guardian, conservator, executor, or administrator of the
estate of the holder of title to real property in the benefit district
who is all of the following:

(A) The person is appointed under the laws of this state.

(B) The person is entitled to the possession of the estate’s real
property.

(C) The person is authorized by the appointing court to exercise
the particular right, privilege, or immunity which he or she seeks
to exercise.

(e) “Operator” means a transit district, municipal operator, or
other public agency operating or contracting for the operation of
transit, commuter rail, or intercity rail services.

(f) “Rail” means rail transit, commuter rail, or intercity rail.

(g) “Rail facilities” means land, buildings, and equipment, or
any interest therein, whether or not the operation thereof produces
revenue, which has, as its primary purpose, the operation of the
rail system or the providing of services to the passengers of the
rail system, but does not mean any land, buildings, or equipment,
or interest therein, which is used primarily for the production of
revenue not arising from the operation of the rail system.

(h) “Transit station” means a rail station, begin insert or a ferry terminal, end insert
or a bus transfer station as defined in paragraph (2) of subdivision
(b) of Section 65460.1 of the Government Code.

99001.  

The Legislature finds and declares that:

(a) It is necessary and in the best interest of the citizens of the
state to authorize operators to levy special benefit assessments for
needed eligible transit projects on the property that benefits from
those transit projects.

(b) The eligible transit projects provide special benefits to
parcels of land, and improvements thereon, in the vicinity of transit
stations, and provide general benefits to the community at large.
The board of the operator shall be the conclusive judge of the
proportion of special and general benefits produced by the eligible
transit projects and of the distribution of the special benefits among
parcels of property within the benefit assessment district.

99002.  

(a) Whenever the board finds that property adjacent
to, or in the vicinity of, one or more transit stations, or proposed
transit stations, of the operator receives or will receive special
benefit by reason of the location or operation of one or more of
those transit stations, the board may, by resolution adopted by a
two-thirds vote of its members, provide for notice and hearing on
its intention to establish one or more special benefit districts and
levy a special benefit assessment on real property therein for the
purpose of financing, in whole or in part, the acquisition,
construction, development, joint development, operation,
maintenance, or repair of one or more eligible transit projects
located within the benefit district.

(b) In connection with the levy of a special benefit assessment,
the board shall comply with the notice, protest, and hearing
procedures set forth in Section 53753 of the Government Code.

(c) The resolution may provide that the proposed benefit district
will contain separate zones, which may consist of either contiguous
or noncontiguous areas of land within the service area of the
operator. The proposed benefit district and each proposed zone, if
any, therein shall be an area adjacent to, or in the vicinity of, one
or more transit stations or proposed transit stations. The boundaries
of the benefit district and of each zone, if any, therein shall be
drawn so as to reflect, as accurately as possible, the areas in which
special benefits are conferred by reason of the proximity and
operation of one or more transit stations.

(d) A notice stating the time and place of the hearing, and setting
forth the boundaries and purpose of the proposed benefit district,
shall be published prior to the time fixed for the hearing pursuant
to Section 6066 of the Government Code.

(e) An operator other than a transit district, city, or county may
implement a special benefit district under this chapter only if the
action is consistent with the general or specific plans of the city
or county within which the special benefit district is to be created.

99003.  

(a) The resolution shall state, as appropriate, the
maximum and minimum rate of assessment, the amount of the
special benefit assessment and the purposes for which it is to be
levied, the estimated cost of accomplishing the purposes, and the
dates or approximate intervals at which the assessment shall be
levied. The resolution shall also state that the exterior boundaries
of the benefit district are set forth on a map on file with the
operator, which map shall govern for all purposes as to the extent
of the benefit district and zones, if any, therein and that the area
set forth on the map shall thereupon constitute and be known as
“Benefit District No. ____ of the [insert name of operator],” or as
“Benefit Zone ____ of the Benefit District No. ____ of the [insert
name of operator],” as designated by the board.

(b) A copy of the resolution shall be included with the notice
given pursuant to Section 53753 of the Government Code.

99004.  

(a) In determining the amount of a special benefit
assessment, the board shall measure the benefit to real property in
the benefit district or zones therein according to the procedures
and approval process set forth in Section 4 of Article XIII D of
the California Constitution.

(b) The special benefit assessment constitutes a charge imposed
on particular real property for an eligible transit project of direct
benefit to that property, and does not constitute an ad valorem tax
or any other form of general tax levy applying a given rate to the
assessed valuation of all taxable property within the service area
of the operator.

(c) The operator shall possess all powers necessary for,
incidental to, or convenient for, the collection, enforcement,
administration, or distribution of the special benefit assessment in
accordance with California law.

(d) The revenue from a special benefit assessment, which is
imposed pursuant to this chapter, or from bonds secured by such
a special benefit assessment, for the purpose of financing an
eligible transit project located within the benefit district, shall be
used only for financing of the project for which it was levied, and
that revenue shall not be used for any other purpose or the payment
of any other expense of the operator, including, but not limited to,
a transit, transportation, or operating expense.

99005.  

(a) Where any parcel in the benefit district is owned
in joint tenancy, tenancy in common, or any other multiple
ownership, the owners of that parcel may designate in writing
which one of the owners shall be deemed the owner of the parcel
for purposes of submitting an assessment ballot pursuant to Section
53753 of the Government Code. In the absence of a designation,
paragraph (3) of subdivision (e) of Section 53753 of the
Government Code shall apply.

(b) The legal representative of a corporation or an estate owning
real property in the benefit district may act on behalf of the
corporation or the estate.

99006.  

If a majority does not protest the imposition of an
assessment, the board may levy the assessment in accordance with
the resolution adopted pursuant to Section 99002.

99007.  

(a) Any owner or owners of real property, which is, in
whole or in part, within the benefit district, or their legal
representatives, may jointly or severally file with the board a
petition requesting that the real property owned by them or for
which they are the legal representative be excluded from the benefit
district on the ground that the real property sought to be excluded
is not benefited or that the assessment be reduced on the ground
that the assessment exceeds the benefit to that real property.

(b) The real property sought to be excluded or upon which the
assessment is sought to be reduced shall be described by its legal
description and shall be accompanied by a map depicting its
location in relation to the benefit district.

(c) The petition shall contain a statement of facts in support of
the petition and shall be acknowledged by the owner or the legal
representative filing the petition.

99008.  

Notice of each hearing upon the petition for exclusion
or reduction shall be given in accordance with subdivision (d) of
Section 99002. Notice shall also be mailed at least 30 days prior
to the hearing to all record owners of each identified parcel within
the boundaries of the benefit district or zone.

99009.  

At the time and place provided in the notice or at any
time and place to which the hearing is adjourned, the board or its
appointed hearing officer shall hear all of the following:

(a) The petition for exclusion or reduction.

(b) All evidence or proof that may be introduced by or on behalf
of the petitioners.

(c) All objections to the petition that may be presented in writing
by any person, including the authority.

(d) All evidence or proof that may be introduced in support of
objections to the petition.

99010.  

The expenses of giving the notice provided for herein
and of the hearing on the exclusion or reduction petition shall be
paid by the persons filing the petition.

99011.  

Upon the hearing on an exclusion or reduction petition
by the board, or upon the record of hearing by a hearing officer,
the board shall order the petition be denied if the petitioner has
not shown by a preponderance of the evidence that in an exclusion
petition the real property is not benefited or in a reduction petition
that the assessment exceeds the benefit to the property.

99012.  

The board, after the hearing on an exclusion or reduction
petition, shall order one of the following by resolution:

(a) In the case of an exclusion petition, order the exclusion of
all or any part of the real property described in the petition upon
its finding that the property will not be benefited by the operations
of the operator in the vicinity of the benefit district.

(b) In the case of a reduction petition, order a change in the
benefit assessment to all or any portion of the real property
described in the petition to provide that it not exceed the amount
of benefit derived by the operations of the operator in the vicinity
of the benefit district.

(c) Confirm the assessment on the real property subject to the
petition as correctly reflecting the amount of benefit to the real
property.

99013.  

(a) Following formation of the benefit district or
concurrently therewith, if the board deems it necessary to incur a
bonded indebtedness for the acquisition, construction, development,
joint development, completion, operation, maintenance, or repair
of one or more eligible transit facilities located within the benefit
district, the board may provide, by resolution, that the bonded
indebtedness shall be payable from special benefit assessments
levied within the benefit district. The resolution shall be adopted
by a two-thirds vote of the members of the board, and shall declare
and state all of the following:

(1) That the board intends to incur an indebtedness, by the
issuance of bonds of the operator, for the benefit district which the
board has formed, or intends to form, within a portion of the service
area of the operator.

(2) The purposes for which the proposed debt is to be incurred,
which may include all costs and estimated costs necessary or
convenient for, incidental to, or connected with, the
accomplishment of the purposes, including, without limitation,
engineering, inspection, legal, fiscal agent, financial consultant,
bond and other reserve funds, working capital, bond interest
estimated to accrue during the construction period, if any, and for
a period not exceeding three years thereafter, and the expenses of
all proceedings for the authorization, issuance, and sale of the
bonds.

(3) The estimated cost of accomplishing the purposes and the
amount of the principal of the indebtedness to be incurred.

(4) That a general description of the benefit district and of each
zone, if any, therein and maps showing the exterior boundaries
thereof are on file with the operator and available for inspection
by any interested person.

(5) That special benefit assessments for the payment of the
bonds, and the interest thereon, have been, or are proposed to be
levied in the benefit district or zones therein in accordance with
the procedures and approval process set forth in Section 4 of Article
XIII D of the California Constitution.

(6) The extent to which, if at all, all or a portion of the revenues
of the operator are to be used to pay the principal of, interest on,
and sinking fund payments for, the bonds, including the
establishment and maintenance of any reserve fund therefor.

(7) The time and place set for hearing on the proposed issuance
of the bonds.

(8) That, prior to levying a special benefit assessment, the board
shall comply with the notice, protest, and hearing procedures set
forth in Section 53753 of the Government Code.

(9) The maximum term the proposed bonds shall run before
maturity, which shall not exceed 40 years from the date of the
bonds or any series thereof.

(10) The maximum rate or rates of interest to be paid, which
shall not exceed 12 percent per annum.

(11) That the pledge of special benefit assessment revenues to
the bonds authorized by this section has priority over the use of
any of those revenues for pay-as-you-go financing, except to the
extent that this priority is expressly restricted by any of the
operator’s agreements with bondholders.

(b) The notice stating the time and place of the hearing on the
proposed issuance of bonds shall be published prior to the time
fixed for the hearing pursuant to Section 6066 of the Government
Code.

99014.  

At the time and place fixed for the hearing on the
issuance of bonds payable from special benefit assessments levied
under this chapter, or at any time and place to which the hearing
is adjourned, the board shall proceed with the hearing. Interested
persons may appear at the hearing and present matters material to
the questions set forth in the resolution. At the conclusion of the
hearing on the proposed issuance of bonds, the board shall, by
resolution adopted by a two-thirds vote of the members, determine
whether to incur the bonded indebtedness.

The resolution shall state the amount of the proposed debt, the
purposes for which it is to be incurred, and the estimated cost of
accomplishing the purposes. The determinations made in the
resolution are final and conclusive.

99015.  

Special benefit assessments for the payment of the
principal of, and interest on, bonds issued for a benefit district or
zone shall be levied in the benefit district or zone at rates that are
sufficient in the aggregate, together with revenues already collected
and available, to pay the principal of, and interest on, all bonds
the authority issued for the benefit district or zone. Other revenues
of the operator shall be used for the payment of the principal of,
and interest on, the bonds only to the extent set forth in any
agreement of the authority for the benefit of bondholders.

Special benefit assessments in the benefit district and zones, if
any, therein shall be calculated in accordance with the requirements
set forth in Section 4 of Article XIII D of the California
Constitution.

99016.  

The bonds issued pursuant to this chapter shall bear
interest at a rate or rates not exceeding 12 percent per annum,
payable semiannually, except that the first interest payable on the
bonds or any series thereof may be for any period not to exceed
one year as determined by the board.

In the resolution or resolutions providing for the issuance of
bonds, the board may also provide for call and redemption of the
bonds prior to maturity at times and prices and upon any other
terms that it may specify. However, no bond is subject to call or
redemption prior to maturity unless the bond contains a recital to
that effect. The denomination or denominations of bonds shall be
stated in the resolution providing for their issuance, but shall not
be less than five thousand dollars ($5,000). The principal of, and
interest on, the bonds shall be payable in lawful money of the
United States at the office of the treasurer of the authority or at
any other place or places that may be designated by the board, or
at either place or places at the option of the holders of the bonds.
The bonds shall be dated, numbered consecutively, signed by the
board chairperson and chief financial officer, and countersigned
by the secretary and shall have the official seal of the authority
attached. The interest coupons of the bonds shall be signed by the
chief financial officer. The seal and all signatures and
countersignatures may be printed, lithographed, or mechanically
reproduced, except that one signature or countersignature shall be
manually affixed.

If an officer, whose signature or countersignature appears on the
bonds or coupons, leaves office for any reason prior to the delivery
of the bonds, the officer’s signature is as effective as if the officer
had remained in office.

99017.  

The bonds issued pursuant to this chapter may be sold
as the board determines by resolution. The board may sell the
bonds at a price below par.

If the board determines by resolution that the bonds shall be sold
by competitive bid, the board, before selling the bonds, or any part
thereof, shall give notice inviting sealed bids in the manner that it
prescribes. If satisfactory bids are received, the bonds offered shall
be awarded to the highest responsible bidder. If no bids are
received, or if the board determines that the bids received are not
satisfactory as to price or responsibility of the bidders, the board
may reject all bids received, if any, and either readvertise or sell
the bonds at private sale or by negotiation, or by other lawful
means.

If the board determines by resolution that the bonds shall not be
sold by competitive bid, the board may sell the bonds at public or
private sale, by negotiation, or by other lawful means.

99018.  

Delivery of any bonds issued under this chapter may
be made at any place either inside or outside the state, and the
purchase price may be received in cash or bank credits.

99019.  

All accrued interest and premiums received on the sale
of bonds issued by the operator pursuant to this chapter shall be
placed in the fund to be used for the payment of principal of, and
interest on, those bonds. The remainder of the proceeds received
on the sale of the bonds shall be placed in the treasury to secure
those bonds or for the purposes for which the debt was incurred.

When the purposes for which the debt was incurred have been
accomplished, any money remaining shall be either (a) transferred
to the fund to be used for the payment of principal of, and interest
on, the bonds or (b) placed in a fund to be used for the purchase
of those outstanding bonds of the operator, from time to time, in
the open market at the prices and in the manner, either at public
or private sale or otherwise, that the board determines. Bonds so
purchased shall be canceled immediately.

99020.  

The board may provide for the issuance, sale, or
exchange of refunding bonds to redeem or retire any bonds issued
by the operator under this chapter upon the terms, at the times, and
in the manner that it determines. Refunding bonds may be issued
in a principal amount sufficient to pay all, or any part, of the
principal of the outstanding bonds issued under this chapter, the
interest thereon, and the premiums, if any, due upon call and
redemption thereof prior to maturity and all expenses of the
refunding.

The provisions of this chapter, for the issuance and sale of bonds
apply to the issuance and sale of refunding bonds, except that,
when refunding bonds are to be exchanged for outstanding bonds,
the method of exchange shall be as determined by the board.

99021.  

Any bonds issued under this chapter are legal
investment for all trust funds; for the funds of insurance companies,
commercial and savings banks, and trust companies; for state
school funds; and, whenever any money or funds may, by any law
now or hereafter enacted, be invested in bonds of cities, counties,
school districts, or other districts within this state, the money or
funds may be invested in the bonds issued under this chapter.

Whenever bonds of cities, counties, school districts, or other
districts within this state may, by any law now or hereafter enacted,
be used as security for the performance of any act or the deposit
of any public money, bonds issued under this chapter may be so
used.

The provisions of this chapter are in addition to all other laws
relating to legal investments and are controlling as the latest
expression of the Legislature with respect thereto.

99022.  

The board may change the purposes for which any
proposed debt is to be incurred, the estimated cost, the amount of
bonded debt to be incurred, or the boundaries of the benefit district
or zones, if any, therein or one or all of those matters, except that
the board shall not change the boundaries to include any territory
which will not, in its judgment, be benefited by the action of the
operator.

99023.  

(a) The board shall not change the purposes, the
estimated cost, the boundaries of the benefit district or zones, if
any, therein, or the amount of bonded debt to be incurred until
after it gives notice of its intention to do so, stating each proposed
change in the purpose and stating, if applicable, that the exterior
boundaries proposed to be changed are set forth on a map on file
with the operator. The notice shall also specify the time and the
place set for hearing.

(b) The notice shall be published prior to the time set for the
hearing pursuant to Section 6066 of the Government Code.

(c) The notice shall also be mailed at least 30 days prior to the
hearing to all owners of real property affected by the proposed
change whose names and addresses appear on the last equalized
assessment roll or are otherwise known to the board of supervisors
of the county in which the benefit district is located or to the
operator. However, any proposed increases to a special benefit
assessment may not be made unless all notice, protest, and hearing
procedures set forth in Section 53753 of the Government Code
have been followed.

99024.  

At the time and place fixed for a hearing on changes,
or at any time and place to which the hearing is adjourned, the
board shall proceed with the hearing. At the hearing, interested
persons may appear and present matters material to the changes
set forth in the notice.

At the conclusion of the hearing, the board shall, by resolution,
determine whether to make any or all of the changes set forth in
the notice. The determinations made in the resolution are
conclusive and final.

99025.  

All decisions and determinations of the board, upon
notice and hearing, are final and conclusive upon all persons
entitled to appeal to the board as to all errors, informalities, and
irregularities which the board might have avoided or remedied
during the progress of the proceedings or which it can, at that time,
remedy.

Any objection, appeal, or protest not made at the time of any
hearing is deemed to be waived voluntarily by any person who
might have made the appeal, protest, or objection, and the person
is deemed to have consented to the action taken following the
hearing and any other matter on which objection, protest, or appeal
could have been made.

99026.  

Any action or proceeding which contests, questions,
or denies the validity or legality of the formation of any benefit
district or zone, the issuance of any bonds therefor pursuant to this
chapter, or any proceedings relating thereto, shall be commenced
within six months from the date of the formation, or the formation
of the benefit district or zone, the issuance of the bonds, and all
proceedings relating thereto shall be held to be in every respect
valid, legal, and incontestable.

99027.  

When the board has imposed a special benefit
assessment, the secretary shall so certify to the assessor of the
county in which the territory of any benefit district is located and
deliver to the assessor copies of all maps and diagrams of the
benefit district and zones, if any, therein, indicating the amount of
the special benefit assessment to be levied within the benefit district
and zones, if any, therein.

Special benefit assessments authorized by this chapter shall be
levied and collected by the county at the same time and in the same
manner as taxes are levied and collected. The county may deduct
its reasonable expenses of collection and shall transmit the balance
of the assessments to the operator.

99028.  

In the event of conflict with any other law, this chapter
shall prevail with respect to benefit districts within the service area
of the operator.

99029.  

Notwithstanding any other provision of this chapter,
the operator shall not pledge any portion of its general fund
revenues to pay any part of any bonded indebtedness incurred
under this chapter unless required by the California Constitution.

begin insert

begin insert 99030. end insert   

This chapter shall be repealed on January 1, 2021.

end insert

SEC. 3.  

Chapter 2 (commencing with Section 99100) of Part
11 of Division 10 of the Public Utilities Code is repealed.

SEC. 4.  

No reimbursement is required by this act pursuant to
Section 6 of Article XIII B 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.