BILL ANALYSIS                                                                                                                                                                                                    Ó



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          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,









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             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  








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            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  








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            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.  









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          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  








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            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.  








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          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  








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            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  








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            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














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