BILL ANALYSIS Ó
AB 738
Page 1
Date of Hearing: May 6, 2015
ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
Brian Maienschein, Chair
AB 738
(Beth Gaines) - As Amended April 6, 2015
SUBJECT: Sacramento Regional Transit District.
SUMMARY: Makes changes to Sacramento Regional Transit
District's (RT) boundaries and establishes a new process for the
annexation and detachment of territory. Specifically, this
bill:
1)Repeals existing law which governs RT boundaries, and instead,
requires RT's boundaries to include the following:
a) The cities of Sacramento and Rancho Cordova;
b) The unincorporated territory of Sacramento County that
is within the urban service area, as determined by the
Board of Supervisors;
c) The cities of Citrus Heights, Elk Grove, Davis, Folsom,
Rancho Cordova, Roseville, Sacramento, West Sacramento, and
Woodland, and the counties of Sacramento and Yolo that have
annexed to RT; and,
AB 738
Page 2
d) A city incorporated on or after January 1, 2016, in
which the city consists entirely of territory that was
included in RT prior to the city's incorporation.
2)Prohibits RT's boundaries from being affected by the
incorporation of any territory wholly or partly within RT's
boundaries or by annexation to or detachment from any city or
territory wholly or partly within RT's boundaries, except as
follows:
a) If a city is included in RT and annexes territory
outside RT's boundaries, then that territory is deemed
incorporated and annexed into RT, upon completion of the
city annexation proceeding; and,
b) If territory partly within and partly outside RT is
incorporated as a new city, on or after January 1, 2016,
then the new city is deemed incorporated into and annexed
into RT, upon completion of the city incorporation
proceeding.
3)Provides that territory deemed incorporated and annexed to RT,
pursuant to 1), and 2), above, shall be subject to taxation,
in accordance with the assessable valuation of the property in
that territory for general district purposes and for payment
of any indebtedness incurred by RT, as specified.
4)Prohibits RT from levying an ad valorem property tax within
the boundaries of any city that is not within RT's boundaries.
5)Prohibits RT from levying an ad valorem property tax in all or
AB 738
Page 3
part of an unincorporated area of any county, if the
unincorporated area is not within RT's boundaries.
6)Repeals a provision in existing law which governs the
annexation process for a city or county to become part of RT
which required written request by that city or county and
approval by Sacramento Area Council of Governments, and
instead, establishes a negotiated annexation process.
7)Allows any city or county listed in 1), above, to be annexed
to RT in the manner provided in 8), below.
8)Requires the legislative body of the city or county proposed
to be annexed to agree in writing with RT's board of directors
(Board) upon the terms and conditions of annexation. The
agreement, among other things, may provide for the levy and
collection of special taxes within the city or unincorporated
area of the county, the fixing of rates, rentals, and charges
differing from elsewhere in the district, and the transfer of
property.
9)Authorizes RT to detach territory within its boundaries by a
supermajority vote of the Board, which shall be at least 80%
of the non-weighted vote of the existing Board, provided that
the detached territory shall not be relieved from liability
for taxation for the payment of any bonded indebtedness
existing at the time of detachment, and provided that all
other pending legal and financial obligations have been
resolved by mutual agreement.
10)Provides that the detachment of territory from RT shall be
effective upon giving the notice to the Board of Equalization
and the county assessor as required by current law for local
AB 738
Page 4
agency formation commissions to file boundary changes.
11)Requires notice of the detachment of territory from RT to be
given to each assessor whose roll is used for a tax levy, as
specified.
12)Makes conforming changes to the definition of "member entity"
in RT's Act to mean a city or county that is within the
boundaries of RT as defined in 1), above.
EXISTING LAW:
1)Establishes the Sacramento Regional Transit District Act (Act)
which governs the powers and functions of RT, and establishes
RT's territory and Board.
2)Provides that RT shall be formed upon the adoption of a
resolution by the City Council of Sacramento and by the
Sacramento County Board of Supervisors declaring there is a
need for RT.
3)Authorizes RT to comprise the cities of Citrus Heights, Elk
Grove, Davis, Folsom, Rancho Cordova, Roseville, Sacramento,
West Sacramento, and Woodland, and specified territory in
Sacramento and Yolo counties to the extent they are not
included in the above-mentioned cities.
4)Provides any city or county may annex to and become part of RT
upon approval by the Board following a written request by that
city or county and the approval of the Sacramento Area Council
of Governments.
AB 738
Page 5
5)Requires RT's boundaries, at any point in time, to include:
a) All the area of any city eligible to participate as
defined in 3), or 4), above, in which the governing body
has declared a need for RT to operate; and,
b) That area of any county eligible to participate under
3), or 4), above, within which the governing body has
declared a need for RT to operate.
6)Authorizes RT to operate and exercise its powers within any
city provided that RT has no power to levy an ad valorem
property tax within the boundaries of any city, unless the
city council adopts a resolution declaring there is a need for
RT to operate and levy a tax within the city boundaries.
7)Authorizes RT to operate and exercise its powers within all or
part of the unincorporated area of any county provided that RT
has no power to levy an ad valorem property tax within any
unincorporated area, unless the board of supervisors of the
county adopts a resolution declaring a need for RT to operate
and levy a tax within the unincorporated area of the county.
8)Specifies that a city or county that is not annexed to RT may
become a participating entity that is entitled to make at
least one appointment to the Board, if they enter into an
agreement with RT to pay their proportional share of RT's cost
to provide rail or other district-wide transit services to the
entity and the District agrees to maintain a specified level
of services and is not obligated to provide transit services
AB 738
Page 6
along any particular route or location.
9)Defines "member entity" to mean a city or county that is
annexed to RT pursuant to 2), 3), or 4), above. Defines
"member entities" to mean all those cities and counties.
10)Defines "participating entity" to mean a city or county that
is not annexed to RT, but has entered into a specified
agreement to pay its proportional share of RT's cost to
provide rail or other district-wide transit services to the
entity.
FISCAL EFFECT: None
COMMENTS:
1)RT. The Legislature authorized the creation of the Sacramento
Regional Transit District in 1971 to operate a comprehensive
public transportation system for the Sacramento region.
RT serves an area encompassing 418 square miles and 1.4 million
people; it operates 67 bus routes and 38.6 miles of light rail
service. RT is governed by an 11-member Board of Directors
comprised of eight directors that are appointed by the annexed
jurisdictions, which are "member entities," including
Sacramento County, and the cities of Sacramento and Rancho
Cordova. Additionally, three directors are appointed by
non-annexed jurisdictions, which are "participating entities,"
including the cities of Citrus Heights, Elk Grove, and Folsom.
Board members vote based on a weighted vote system
established by AB 2137 (Niello), Chapter 227, Statutes of
2008, which is based upon the type of membership and the
financial contribution made by each entity to RT.
AB 738
Page 7
2)Bill Summary. This bill makes several changes to the way RT's
boundaries may be changed by establishing a new process for
annexation and detachment of territory.
Current law allows any city or county to annex and become part
of RT upon approval of the Board, if the request is made in
writing by the city or county, and the Sacramento Area Council
of Governments approves the annexation. This bill repeals
this provision of law and establishes a new annexation process
for RT. This bill authorizes RT and the legislative body of a
city or county proposed to be annexed to agree in writing on
the terms and conditions for annexation. This process is
already contained in statute for several other transit
districts. Under this bill, the agreement for annexation may
include the fixing of rates or charges, the transfer of
property, or provide for the levy and collection of special
taxes. The annexation process would apply to any city listed
in the territory defined in RT's enabling act, which means the
cities of Citrus Heights, Elk Grove, Davis, Folsom, Roseville,
West Sacramento, Woodland and specified territory in
Sacramento and Yolo counties could be annexed pursuant to this
process. If a city or county wanted to be annexed to RT and
they weren't listed in RT's enabling act, they would need to
modify statute.
Under current law, if a new city incorporated entirely within
the territory of RT, the new city council would need to annex
back into the district to activate their membership as a
member entity. Under this bill, if a new city incorporates
after January 1, 2016, and is entirely within RT's boundaries
or includes any territory within RT's boundaries, that city
would automatically be annexed to RT as a member entity. Also
mirroring existing law for other transit districts, this bill
authorizes RT to detach territory within its boundaries with a
AB 738
Page 8
vote
of 80% of the non-weighted Board.
This bill is sponsored by RT.
3)Author's Statement. According to the author, "The purpose of
this bill is two-fold: 1) A number of jurisdictions presently
contract with RT for service (the cities of Citrus Heights,
Folsom, and Elk Grove). As contracting parties, these
jurisdictions are able to maintain a degree of control over
the operations of service within their boundaries; these
jurisdictions have expressed reluctance to annex to RT and
cede control over service that is of benefit to their
citizens. Addition of a provision for a negotiated annexation
would permit RT and the affected jurisdiction to negotiate an
annexation agreement that might commit RT to certain service
levels and amenities; 2) The other concern this bill addresses
is future incorporation of areas within RT's present
boundaries. RT has made significant capital investments in
bus and rail transit facilities within its present boundaries
and its operations are designed to provide efficient
transportation within those boundaries. As RT's Act is
presently written, a newly incorporated area must
affirmatively act to annex to RT to remain within its
boundaries. To protect RT's existing investments in these
areas and the integrity
of its existing transit network, this bill would specify that
these areas remain a part of RT notwithstanding a new
incorporation."
4)Policy Consideration. The Committee may wish to consider,
even with the 80% non-weighted vote threshold to detach
territory, if it would be possible for the Board to detach
territory without that territory's consent. If so, the author
and sponsor may wish to consider, if there should be sign-off
from both RT's Board and the governing body of the territory
AB 738
Page 9
proposed to be detached.
5)Arguments in Support. Supporters argue that this bill
addresses issues unique to the manner in which cities and
counties may activate their participation with RT.
6)Arguments in Opposition. None on file.
REGISTERED SUPPORT / OPPOSITION:
Support
Sacramento Regional Transit District [SPONSOR]
Opposition
None on file
Analysis Prepared by:Misa Lennox / L. GOV. / (916) 319-3958
AB 738
Page 10