AB 851, as amended, Mayes. Local government: organization: disincorporations.
(1) Existing law specifies a procedure for the legislative body of a city, county, or district to propose to the voters an ordinance or resolution to adopt a special tax pursuant to constitutional requirements. Existing law authorizes a local agency which is conducting proceedings for the incorporation of a city, formation of a district, change of organization, a reorganization, a change of organization of a city, or a municipal reorganization to propose the adoption of a special tax on behalf of the affected city or district in accordance with this procedure.
This bill would additionally authorize a local agency conducting proceedings for the disincorporation of a city to propose the adoption of a special tax on behalf of an affected city in accordance with the above-described procedure.
(2) Existing law, the Cortese-Knox-Hertzberg Local Government Reorganization Act of 2000, provides the authority and procedures for the initiation, conduct, and completion of changes of organization and reorganization of cities and districts. The act requires a local agency or school district that initiates proceedings for a change of local government organization or reorganization, by submitting a resolution of application to a local agency formation commission, to also submit a plan for providing services within the affected territory, as specified.
This bill would, in the case of a disincorporation or reorganization that includes a disincorporation, require the plan for services to include specific provisions, including, among others, an enumeration and description of the services currently provided by the city proposed for disincorporation.
(3) The act requires a petitioner or legislative body desiring to initiate proceedings to submit an application to the executive officer of the local agency formation commission, and requires the local agency formation commission, with regard to an application that includes an incorporation, to immediately notify all affected local agencies and any applicable state agency, as specified.
This bill would extend that requirement to an application that includes a disincorporation.
(4) Existing law prohibits the commission from approving or conditionally approving a proposal for an incorporation unless the commission finds, among other things, that the proposal is consistent with the intent of the act, the incorporation is consistent with the spheres of influence of affected local agencies, and the proposed city is expected to receive revenues sufficient to provide public services and facilities and a reasonable reserve during the 3 fiscal years following incorporation.
This bill would additionally prohibit the commission from approving or conditionally approving a proposal that includes a disincorporation unless the commission finds, among other things, that the disincorporation is consistent with the intent of the act, the disincorporation will address necessary changes to spheres of influence of affected agencies, and the service responsibilities of the city proposed for disincorporation have been assigned, as specified.
(5) Existing law requires the executive officer of the commission to prepare a comprehensive fiscal analysis for any proposal that includes an incorporation, as specified.
This bill would additionally require the executive officer to prepare a comprehensive fiscal analysis for any proposal that includes a disincorporation, as specified.
(6) Existing law requires the commission to determine the amount of property tax revenue to be exchanged by the affected local agency for a proposal that includes the incorporation of a city, and sets forth the procedures to be followed in making that determination.
This bill would additionally require the commission to determine the amount of property tax revenue to be exchanged by the affected city and any successor or affected local agency for a proposal that includes a disincorporation of a city, and would set forth the procedures to be followed in making that determination.
The bill would additionally require the commission to determine, where the proposal includes the disincorporation of a city with the assignment of property tax revenues to a successor, the increase of the appropriations limit for a successor, if the successor is an existing entity, or the appropriations limit for a new special district, as specified.
The bill would state the intent of the Legislature that a proposal that includes a disincorporation of a city result in a determination that the debt or contractual obligations and responsibilities of the city being disincorporated be the responsibility of the same territory for repayment. The bill would require the city being disincorporated to provide a written statement prior to issuance of a certificate for filing for a proposal that includes a disincorporation that includes specified information relating to its debts and contractual obligations.
(7) Existing law authorizes the commission, in approving a disincorporation of a city, the dissolution of a district, or the reorganization or consolidation of agencies that result in the dissolution of one or more districts or disincorporation of one or more cities, to make the approval conditional upon the agency being dissolved not approving any increase in compensation or benefits for specified officers of the agency, or appropriating, encumbering, expending, or otherwise obligating any revenue of the agency beyond that provided in the current budget at the time the dissolution is approved by the commission, unless it first finds that an emergency exists.
This bill would modify this provision to authorize the commission to make the approval conditional upon prohibiting the district that is being dissolved or the city that is being disincorporated from approving any increase in compensation or benefits for specified officers of the agency, or appropriating, encumbering, expending, or otherwise obligating any revenue of the agency beyond that provided in the current budget at the time the dissolution is approved by the commission, unless it first finds that an emergency exists.
The act also authorizes the commission to require a single question appearing on the ballot upon issues of annexation and reorganization in any election at which the questions of annexation and district reorganization or incorporation and district reorganization are to be considered at the same time.
This bill would additionally apply these provisions to a disincorporation and district reorganization.
(8) Existing law provides that an organization or reorganization may provide for, or be made subject to, specified terms and conditions, including the levying of assessments, including certain fees, or the approval by the voters of general or special taxes. Under existing law, these terms and conditions may not directly regulate land use, property development, or subdivision requirements, and the imposition of such a fee as a condition of the issuance of a building permit does not constitute a direct regulation of land use, property development, or subdivision requirements.
This bill would expand the scope of terms and conditions that may be provided for or required as a condition of an organization or reorganization to include the levying of fees generally. The bill would also make technical, nonsubstantive changes to this provision.
(9) Existing law requires every public officer of a city being disincorporated, prior to the effective date of the disincorporation, to turn the public property in his or her possession over to the board of supervisors.
This bill would repeal this provision.
(10) The act requires the commission, after ascertaining that the disincorporation has carried, to determine and certify in a written statement to the board of supervisors the indebtedness of the city, the amount of money in its treasury, and the amount of any tax levy or other obligation due the city that is unpaid or has not been collected.
This bill would repeal this provision.
(11) Existing law requires the board of supervisors to make specified determinations if the commission does not provide the board with a statement of those determinations.
This bill would repeal this provision.
(12) Existing law requires the tax collector to collect any tax that has been levied by a disincorporated city that remains uncollected when due and pay it into the county treasury.
This bill would provide that the tax collected and paid into the county treasury is on behalf of the designated successor or county to wind up affairs of the disincorporated city.
(13) Existing law requires the board of supervisors of a county to cause taxes to be levied and collected from within the territory formerly included within a disincorporated city, if there is not sufficient money in the treasury of a disincorporated city to the credit of the special fund to pay any city indebtedness as it becomes due. Existing law provides that any taxes levied pursuant to this provision are to be assessed, levied, and collected in the same manner and at the same time as other county taxes, and are additional taxes upon the property included within the territory of the disincorporated city.
This bill would repeal these provisions.
(14) Existing law requires the board of supervisors to levy a special tax upon all property within the disincorporated city if the revenues from specified public utilities are not sufficient for the administration, conduct, or improvement of the public utility.
This bill would repeal this provision.
(15) Existing law requires the board of supervisors to annually, at the time other county taxes are levied and collected, to levy and collect a special tax on the remainder of the territory of a disincorporated city sufficient to pay the balance of the debt, and pay that sum to the city treasurer. Existing law requires the city treasurer to pay the bonded indebtedness as it becomes due with the proceeds of those taxes.
This bill would repeal these provisions.
(16) Existing law provides that on and after the effective date of a disincorporation, the territory of the disincorporated city, all inhabitants within the territory, and all persons formerly entitled to vote by reason of residing within the territory cease to be subject to the jurisdiction of the disincorporated city and have none of the rights or duties of inhabitants or voters of a city.
This bill would additionally provide that as of the effective date of a disincorporation, the general plan of the disincorporated city that was in effect immediately prior to the effective date of the disincorporation constitutes the community plan of the county for the territory of the disincorporated city, the zoning ordinances of the disincorporated city that were in effect immediately prior to the effective date of the disincorporation constitute the zoning ordinances of the county for that territory, and any conditional use permit or legal nonconforming use that was in place immediately prior to the effective date of the disincorporation remains in force pursuant to the community plan and zoning ordinances. The bill would provide that any use of land that was authorized under the general plan and zoning ordinances immediately prior to the effective date of the disincorporation continues to be authorized for as long a period as may be required by the California Constitution or the United States Constitution.
(17) Existing law requires a county auditor to adjust the allocation of property tax revenues for local agencies whose service area or service responsibility may be altered by specified jurisdictional changes. Existing law establishes procedures for determining the exchange of property tax revenues between a city and a county in the case of a jurisdictional change that consists of a city’s qualified annexation of unincorporated territory, defined to mean an annexation of unincorporated territory for which an application or resolution was filed on or after January 1, 1998, and on or before January 1, 2015.
This bill would include a city disincorporation and dissolved district in those jurisdictional changes. The bill would also expand the above-described definition of a qualified annexation of unincorporated territory to include an annexation for which an application or resolution was filed on or before January 1, 2021.
By increasing the duties of the county auditor, this bill would impose a state-mandated local program.
(18) 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, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to these statutory provisions.
Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.
The people of the State of California do enact as follows:
Section 50077 of the Government Code is
2amended to read:
(a) Except as provided in Section 7282 of the Revenue
4and Taxation Code, the legislative body of any city, county, or
5district may, following notice and public hearing, propose by
6ordinance or resolution the adoption of a special tax. The ordinance
7or resolution shall include the type of tax and rate of tax to be
8levied, the method of collection, and the date upon which an
9election shall be held to approve the levy of the tax. The
10proposition shall be submitted to the voters of the city, county, or
11district, or a portion thereof, and, upon the approval of two-thirds
12of the votes cast by voters voting upon the proposition, the city,
13county, or district may levy the tax.
14(b) The legislative body of a city, or district, may provide for
15the collection of the special tax in the same manner and subject to
16the same penalty as, or with, other charges and taxes fixed and
17collected by the city, or district, or, by agreement with the county,
18by the county on behalf of the city, or district. If the special taxes
19are collected by the county on behalf of the city, or district, the
20county may deduct its reasonable costs incurred for the service
21before remittal of the balance to the city.
22(c) The legislative body of a local agency which is conducting
23proceedings for the incorporation of a city, the formation of a
24district, a change of organization, a reorganization, a change of
25organization of a city, a municipal reorganization, or the
26disincorporation of a city may propose by ordinance or resolution
27the
adoption of a special tax in accordance with the provisions of
28subdivision (a) on behalf of an affected city or district.
29(d) As used in this section “district” means an agency of the
30state, formed pursuant to general law or special act, for the local
31performance of governmental or proprietary functions within
32limited boundaries.
Section 56653.1 is added to the Government Code, to
34read:
In the case of a disincorporation or reorganization
36that includes a disincorporation, the plan for services required by
37subdivision (a) of Section 56653 shall include the following:
P8 1(a) An enumeration and description of the services currently
2provided by the city proposed for disincorporation and an
3identification of the entity or entities proposed to assume
4responsibility for the services following completion of
5disincorporation.
6(b) An enumeration and description of each service proposed
7to be discontinued or transferred, the current financing of the
8service or services, and any method of financing proposed by the
9
successor.
10(c) A delineation of any existing financing of services currently
11provided to include, but not be limited to, bonds, assessments,
12community facility district governance, general taxes, special taxes,
13other charges, and joint powers authorities or agreements.
14(d) An indication of any current bankruptcy proceeding,
15including, but not limited to, status and exit plan.
16(e) An indication of any current order relating to services
17provided by the city proposed for disincorporation by any agency,
18department, office, or other division of the state, including, but
19not limited to, a cease and desist order or water prohibition order.
20(f) A written
statement from each entity identified pursuant to
21subdivision (a) that it has received a copy of the plan for services
22submitted pursuant to this section.
23(g) Any other information that the executive officer may deem
24necessary to evaluate the plan for services submitted.
Section 56658 of the Government Code is amended
26to read:
(a) Any petitioner or legislative body desiring to initiate
28proceedings shall submit an application to the executive officer of
29the principal county.
30(b) (1) Immediately after receiving an application and before
31issuing a certificate of filing, the executive officer shall give mailed
32notice that the application has been received to each affected
33agency, the county committee on school district organization, and
34each school superintendent whose school district overlies the
35affected territory. The notice shall generally describe the proposal
36and the affected territory. The executive officer shall not be
37required to give notice pursuant to this subdivision if a local agency
38
has already given notice pursuant to subdivision (c) of Section
3956654.
P9 1(2) It is the intent of the Legislature that a proposal for
2incorporation or disincorporation shall be processed in a timely
3manner. With regard to an application that includes an
4incorporation or disincorporation, the executive officer shall
5immediately notify all affected local agencies and any applicable
6state agencies by mail and request the affected agencies to submit
7the required data to the commission within a reasonable timeframe
8established by the executive officer. Each affected agency shall
9respond to the executive officer within 15 days acknowledging
10receipt of the request. Each affected local agency and the officers
11and departments thereof shall submit the required data to the
12executive officer within the timelines established by the executive
13officer.
Each affected state agency and the officers and departments
14thereof shall submit the required data to the executive officer within
15the timelines agreed upon by the executive officer and the affected
16state departments.
17(3) If a special district is, or as a result of a proposal will be,
18located in more than one county, the executive officer of the
19principal county shall immediately give the executive officer of
20each other affected county mailed notice that the application has
21been received. The notice shall generally describe the proposal
22and the affected territory.
23(c) Except when a commission is the lead agency pursuant to
24Section 21067 of the Public Resources Code, the executive officer
25shall determine within 30 days of receiving an application whether
26the application is
complete and acceptable for filing or whether
27the application is incomplete.
28(d) The executive officer shall not accept an application for
29filing and issue a certificate of filing for at least 20 days after giving
30the mailed notice required by subdivision (b). The executive officer
31shall not be required to comply with this subdivision in the case
32of an application which meets the requirements of Section 56662
33or in the case of an application for which a local agency has already
34given notice pursuant to subdivision (c) of Section 56654.
35(e) If the appropriate fees have been paid, an application shall
36be deemed accepted for filing if no determination has been made
37by the executive officer within the 30-day period. An executive
38officer shall accept for filing, and file, any application
submitted
39in the form prescribed by the commission and containing all of
40the information and data required pursuant to Section 56652.
P10 1(f) When an application is accepted for filing, the executive
2officer shall immediately issue a certificate of filing to the
3applicant. A certificate of filing shall be in the form prescribed by
4the executive officer and shall specify the date upon which the
5proposal shall be heard by the commission. From the date of
6issuance of a certificate of filing, or the date upon which an
7application is deemed to have been accepted, whichever is earlier,
8an application shall be deemed filed pursuant to this division.
9(g) If an application is determined not to be complete, the
10executive officer shall immediately transmit that determination to
11the applicant
specifying those parts of the application which are
12incomplete and the manner in which they can be made complete.
13(h) Following the issuance of the certificate of filing, the
14executive officer shall proceed to set the proposal for hearing and
15give published notice thereof as provided in this part. The date of
16the hearing shall be not more than 90 days after issuance of the
17certificate of filing or after the application is deemed to have been
18accepted, whichever is earlier. Notwithstanding Section 56106,
19the date for conducting the hearing, as determined pursuant to this
20subdivision, is mandatory.
Section 56770 is added to the Government Code, to
22read:
The commission shall not approve or conditionally
24approve any proposal that includes a disincorporation, unless,
25based on the entire record, the commission makes all of the
26following determinations:
27(a) The proposed disincorporation is consistent with the intent
28of this division to provide for a sustainable system for the delivery
29of services.
30(b) The commission has considered the service reviews of
31municipal services and spheres of influence of the affected local
32agencies, and the disincorporation will address the necessary
33changes to those spheres of influence, if any.
34(c) It has reviewed the comprehensive fiscal analysis prepared
35pursuant to Section 56804.
36(d) It has reviewed the executive officer’s report and
37recommendation prepared pursuant to Section 56665, and the oral
38or written testimony presented at its public hearing.
39(e) The service responsibilities of the city proposed for
40disincorporation have been assigned through terms and conditions
P11 1authorized by Sections 56885.5, 56886, and 57302, and Chapter
25 (commencing with Section 57400) of Part 5.
Section 56804 is added to the Government Code, to
4read:
For any proposal that includes a disincorporation, the
6executive officer shall prepare, or cause to be prepared by contract,
7a comprehensive fiscal analysis. This analysis shall become part
8of the report required pursuant to Section 56665. Data used for the
9analysis shall be from the most recent fiscal year for which data
10is available, preceding the issuances of the certificate of filing.
11When data requested by the executive officer in the notice to
12affected agencies, pursuant to paragraph (2) of subdivision (b) of
13Section 56658, is unavailable, the analysis shall document the
14source and methodology of the data used. The analysis shall review
15and document each of the following:
16(a) The direct and indirect costs incurred by the city proposed
17for disincorporation for providing public servicesbegin delete and facilitiesend delete
18 during the three fiscal years immediately preceding the submittal
19of the proposal for disincorporation.
20(b) The direct and indirect costs incurred by the city proposed
21for disincorporation for current and proposed capital
22improvements, facilities, assets, and infrastructure.
23(b)
end delete
24begin insert(c)end insert The sources of funding, if any, available to the entities
25proposed to assume the obligations of the citybegin delete being begin insert proposed for disincorporationend insert and the related
26disincorporatedend delete
27costs, including all actual direct and indirect costs, inbegin insert
theend insert provision
28of existing services.
29(c)
end delete
30begin insert(d)end insert When determining costs, the executive officer shall also
31include all direct and indirect costs of any public services that are
32proposed to be transferred to state agencies for delivery.
33(d)
end delete
34begin insert(e)end insert The
revenues of the citybegin delete being disincorporatedend deletebegin insert
proposed for
35disincorporationend insert during the three fiscal years immediately
36preceding the initiation of the disincorporation proposal.
37(e)
end delete
38begin insert(f)end insert Any other information and analysis needed to make the
39findings required by Section 56770.
Section 56813 is added to the Government Code, to
2read:
(a) If the proposal includes the disincorporation of a
4city, as defined in Section 56034, the commission shall determine
5the amount of property tax revenue to be exchanged by the affected
6city and any successor or affected local agency pursuant to this
7section.
8(b) The commission shall notify the county auditor of the
9proposal, the affected local agencies to be extinguished, and the
10services proposed to be transferred to new jurisdictions, and
11identify for the auditor the changes to occur.
12(c) If the proposal would not transfer all of the service
13responsibilities of the disincorporating city to the
affected county
14or to a single affected agency, the commission and the county
15
auditor shall do all of the following:
16(1) The county auditor shall determine the proportion that the
17amount of property tax revenue derived by the city being
18disincorporated pursuant to subdivision (b) of Section 93 of the
19Revenue and Taxation Code bears to the total amount of revenue
20from all sources, available for general purposes, received by the
21city being disincorporated in the prior fiscal year and provide their
22response within 15 days of receiving notification from the
23commission pursuant to subdivision (b). For purposes of making
24this determination and the determination required by paragraph
25(3), “total amount of revenue from all sources available for general
26purposes” means the total amount of revenue which the city being
27disincorporated may use on a discretionary basis for any purpose
28and does not include any of
the following:
29(A) Revenue that, by statute or ordinance, is required to be used
30for a specific purpose.
31(B) Revenue from fees, charges, or assessments that are levied
32to specifically offset the cost of particular services and that do not
33exceed the cost reasonably borne in providing these services.
34(C) Revenue received from the federal government that is
35required to be used for a specific purpose.
36(2) The commission shall determine, based on information
37submitted by the city being disincorporated, an amount equal to
38the total net cost to that city during the prior fiscal year of providing
39those services that an affected agency will assume within the area
40subject
to the proposal. For purposes of this paragraph, “total net
P13 1cost” means the total direct and indirect costs that were funded by
2general purpose revenues of the city being disincorporated and
3excludes any portion of the total cost that was funded by any
4revenues of that agency that are specified in subparagraphs (A),
5(B), and (C) of paragraph (1).
6(3) For the services to be transferred to each affected local
7agency, the commission shall multiply the amount determined
8pursuant to paragraph (2) by the proportion determined pursuant
9to paragraph (1) to derive the amount of property tax revenue used
10to provide services by the city being disincorporated during the
11prior fiscal year within the area subject to the proposal. The county
12auditor shall adjust the amount so determined by the annual tax
13increment pursuant to the procedures set forth in
Chapter 6
14(commencing with Section 95) of Part 0.5 of Division 1 of the
15Revenue and Taxation Code, to the fiscal year in which the affected
16agency receives its next allocation of property taxes.
17(d) If the proposal for disincorporation would transfer all of the
18service responsibilities of the city proposed for disincorporation,
19other than those that are proposed to be discontinued, to a single
20successor, the commission shall request the auditor to determine
21the property tax revenue allocated to the city being disincorporated
22by tax rate area, or portion thereof, and transmit that information
23to the commission.
24(e) The executive officer shall notify the auditor of the amount
25determined pursuant to subdivision (c) or (d), as the case may be,
26and, where applicable, the period of
time within which and the
27procedure by which the transfer of property tax revenues will be
28effected pursuant to this section, at the time the executive officer
29records a certificate of completion pursuant to Section 57203 for
30any proposal described in subdivision (a), and the auditor shall
31transfer that amount to the affected agency or agencies that will
32assume the services as determined by the commission. Any
33property tax not transferred to an affected agency pursuant to
34subdivision (c) shall be transferred to the affected county.
35(f) For purposes of this section, “prior fiscal year” means the
36most recent fiscal year preceding the issuance of the certificate of
37filing for which data is available on actual direct and indirect costs
38and revenues needed to perform the calculations required by this
39section.
P14 1(g) Any action brought by a city or district to contest any of the
2determinations of the county auditor or the commission with regard
3to the amount of property tax revenue to be exchanged by the
4affected local agencies pursuant to this section shall be commenced
5within three years of the effective date of the disincorporation.
Section 56814 is added to the Government Code, to
7read:
If the proposal includes the disincorporation of a city,
9as defined in Section 56034, with the assignment of property tax
10revenues to a successor the commission shall make the following
11determinations, as appropriate:
12(a) The increase of the appropriations limit for the successor if
13the successor is an existing entity.
14(b) The appropriations limit for a new special district through
15a formation process as defined by Section 56810.
Section 56816 is added to the Government Code, to
17read:
(a) It is the intent of the Legislature that any proposal
19that includes the disincorporation of a city result in a determination
20that the debt or contractual obligations and responsibilities of the
21city being disincorporated shall be the responsibility of that same
22territory for repayment. To ascertain this information, the city shall
23provide a written statement that determines and certifies all of the
24following to the commission prior to the issuance of a certificate
25of filing for a disincorporation proposal, pursuant to Sections 56651
26and 56658:
27(1) The indebtedness of the city.
28(2) The amount of money in the city’s treasury.
29(3) The amount of any tax levy or other obligation due the city
30that is unpaid or has not been collected.
31(4) The amount of current and future liabilities, both internal
32debt owed to other special or restricted funds or enterprise funds
33within the agency and external debt owed to other public agencies
34or outside lenders or that results from contractual obligations,
35which may include contracts for goods or services, retirement
36obligations, actuarially determined unfunded pension liability of
37all classes in a public retirement system, including any
38documentation related to the termination of public retirement
39contract provisions, and the liability for other postemployment
40benefits. The information required by this paragraph shall include
P15 1any associated
revenue stream for financing that may be or has
2been committed to that liability, including employee contributions.
3(b) The city shall provide a written statement identifying the
4successor agency to the city’s former redevelopment agency, if
5any, pursuant to Section 34173 of the Health and Safety Code.
Section 56885.5 of the Government Code is amended
7to read:
(a) In any commission order giving approval to any
9change of organization or reorganization, the commission may
10make that approval conditional upon any of the following factors:
11(1) Any of the conditions set forth in Section 56886.
12(2) The initiation, conduct, or completion of proceedings for
13another change of organization or a reorganization.
14(3) The approval or disapproval, with or without election, as
15may be provided by this division, of any resolution or ordinance
16ordering that change of organization or reorganization.
17(4) With respect to any commission determination to approve
18the disincorporation of a city, the dissolution of a district, or the
19reorganization or consolidation of agencies that results in the
20dissolution of one or more districts or the disincorporation of one
21or more cities, a condition that prohibits a district that is being
22dissolved or a city that is being disincorporated from taking any
23of the following actions, unless it first finds that either an
24emergency situation exists as defined in Section 54956.5, or the
25legislative body of the successor, as designated by the commission
26has taken action approving one or more of the following actions:
27(A) Approving any increase in compensation or benefits for
28members of the governing board, its officers, or the executive
29officer
of the agency.
30(B) Appropriating, encumbering, expending, or otherwise
31obligating, any revenue of the agency beyond that provided in the
32current budget at the time the commission approves the dissolution
33or disincorporation.
34(b) If the commission so conditions its approval, the commission
35may order that any further action pursuant to this division be
36continued and held in abeyance for the period of time designated
37by the commission, not to exceed six months from the date of that
38conditional approval.
39(c) The commission order may also provide that any election
40called upon any change of organization or reorganization shall be
P16 1called, held, and conducted before, upon the same date as, or after
2the date of any election to be
called, held, and conducted upon any
3other change of organization or reorganization.
4(d) The commission order may also provide that in any election
5at which the questions of annexation and district reorganization
6or, incorporation and district reorganization, or disincorporation
7and district reorganization are to be considered at the same time,
8there shall be a single question appearing on the ballot upon the
9issues of annexation and district reorganization or incorporation
10and district reorganization.
Section 56886 of the Government Code is amended
12to read:
Any change of organization or reorganization may
14provide for, or be made subject to one or more of, the following
15terms and conditions. If a change of organization or reorganization
16is made subject to one or more of the following terms and
17conditions in the commission’s resolution making determinations,
18the terms and conditions imposed shall prevail in the event of a
19conflict between a specific term and condition authorized pursuant
20to this section and any of the general provisions of Part 5
21(commencing with Section 57300). However, none of the following
22terms and conditions shall directly regulate land use, property
23development, or subdivision requirements:
24(a) The payment of a fixed or determinable
amount of money,
25either as a lump sum or in installments, for the acquisition, transfer,
26use, or right of use of all or any part of the existing property, real
27or personal, of any city, county, or district.
28(b) The levying or fixing and the collection of any of the
29following, for the purpose of providing for any payment required
30pursuant to subdivision (a):
31(1) Special, extraordinary, or additional taxes or assessments.
32(2) Special, extraordinary, or additional service charges, rentals,
33or rates.
34(3) Both taxes or assessments and service charges, rentals, or
35rates.
36(c) The imposition, exemption,
transfer, division, or
37apportionment, as among any affected cities, affected counties,
38affected districts, and affected territory of liability for payment of
39all or any part of principal, interest, and any other amounts which
40shall become due on account of all or any part of any outstanding
P17 1or then authorized but thereafter issued bonds, including revenue
2bonds, or other contracts or obligations of any city, county, district,
3or any improvement district within a local agency, and the levying
4or fixing and the collection of any (1) taxes or assessments, or (2)
5service charges, rentals, or rates, or (3) both taxes or assessments
6and service charges, rentals, or rates, in the same manner as
7provided in the original authorization of the bonds and in the
8amount necessary to provide for that payment.
9(d) If, as a result of any term or condition
made pursuant to
10subdivision (c), the liability of any affected city, affected county,
11or affected district for payment of the principal of any bonded
12indebtedness is increased or decreased, the term and condition
13may specify the amount, if any, of that increase or decrease which
14
shall be included in, or excluded from, the outstanding bonded
15indebtedness of that entity for the purpose of the application of
16any statute or charter provision imposing a limitation upon the
17principal amount of outstanding bonded indebtedness of the entity.
18(e) The formation of a new improvement district or districts or
19the annexation or detachment of territory to, or from, any existing
20improvement district or districts.
21(f) The incurring of new indebtedness or liability by, or on behalf
22of, all or any part of any local agency, including territory being
23annexed to any local agency, or of any existing or proposed new
24improvement district within that local agency. The new
25indebtedness may be the obligation solely of territory to be annexed
26if the local agency
has the authority to establish zones for incurring
27indebtedness. The indebtedness or liability shall be incurred
28
substantially in accordance with the laws otherwise applicable to
29the local agency.
30(g) The issuance and sale of any bonds, including authorized
31but unissued bonds of a local agency, either by that local agency
32or by a local agency designated as the successor to any local agency
33which is extinguished as a result of any change of organization or
34reorganization.
35(h) The acquisition, improvement, disposition, sale, transfer, or
36division of any property, real or personal.
37(i) The disposition, transfer, or division of any moneys or funds,
38including cash on hand and moneys due but uncollected, and any
39other obligations.
P18 1(j) The fixing and establishment
of priorities of use, or right of
2use, of water, or capacity rights in any public improvements or
3facilities or any other property, real or personal. However, none
4of the terms and conditions ordered pursuant to this subdivision
5shall modify priorities of use, or right of use, to water, or capacity
6rights in any public improvements or facilities that have been fixed
7and established by a court or an order of the State Water Resources
8Control Board.
9(k) The establishment, continuation, or termination of any office,
10department, or board, or the transfer, combining, consolidation,
11or separation of any offices, departments, or boards, or any of the
12functions of those offices, departments, or boards, if, and to the
13extent that, any of those matters is authorized by the principal act.
14(l) The employment, transfer, or discharge of employees, the
15continuation, modification, or termination of existing employment
16contracts, civil service rights, seniority rights, retirement rights,
17and other employee benefits and rights.
18(m) The designation of a city, county, or district, as the successor
19to any local agency that is extinguished as a result of any change
20of organization or reorganization, for the purpose of succeeding
21to all of the rights, duties, and obligations of the extinguished local
22agency with respect to enforcement, performance, or payment of
23any outstanding bonds, including revenue bonds, or other contracts
24and obligations of the extinguished local agency.
25(n) The designation of (1) the method for the selection of
26members of the legislative body of
a district or (2) the number of
27those members, or (3) both, where the proceedings are for a
28consolidation, or a reorganization providing for a consolidation or
29formation of a new district and the principal act provides for
30alternative methods of that selection or for varying numbers of
31those members, or both.
32(o) The initiation, conduct, or completion of proceedings on a
33proposal made under, and pursuant to, this division.
34(p) The fixing of the effective date or dates of any change of
35organization, subject to the limitations of Section 57202.
36(q) Any terms and conditions authorized or required by the
37principal act with respect to any change of organization.
38(r) The continuation or provision of any service provided at that
39time, or previously authorized to be provided by an official act of
40the local agency.
P19 1(s) The levying of either of the following:
2(1) Assessments or fees, including the imposition of a fee
3pursuant to Section 50029 or 66484.3. For the purposes of this
4section, imposition of a fee as a condition of the issuance of a
5building permit does not constitute direct regulation of land use,
6property development, or subdivision requirements.
7(2) General or special taxes subject to approval by the voters.
8(t) The extension or continuation of any previously authorized
9charge, fee, assessment,
or tax by the local agency or a successor
10local agency in the affected territory.
11(u) The transfer of authority and responsibility among any
12affected cities, affected counties, and affected districts for the
13administration of special tax and special assessment districts,
14including, but not limited to, the levying and collecting of special
15taxes and special assessments, including the determination of the
16annual special tax rate within authorized limits; the management
17of redemption, reserve, special reserve, and construction funds;
18the issuance of bonds which are authorized but not yet issued at
19the time of the transfer, including not yet issued portions or phases
20of bonds which are authorized; supervision of construction paid
21for with bond or special tax or assessment proceeds; administration
22of agreements to acquire public facilities and
reimburse advances
23made to the district; and all other rights and responsibilities with
24respect to the levies, bonds, funds, and use of proceeds that would
25have applied to the local agency that created the special tax or
26special assessment district.
27(v) Any other matters necessary or incidental to any of the terms
28and conditions specified in this section. If a change of organization,
29reorganization, or special reorganization provides for, or is made
30subject to one or more of, the terms and conditions specified in
31this section, those terms and conditions shall be deemed to be the
32exclusive terms and conditions for the change of organization,
33reorganization, or special reorganization, and shall control over
34any general provisions of Part 5 (commencing with Section 57300).
Section 57401 of the Government Code is repealed.
Section 57402 of the Government Code is repealed.
Section 57404 of the Government Code is repealed.
Section 57405 of the Government Code is amended
39to read:
If a tax has been levied by the disincorporated city and
2remains uncollected, the county tax collector shall collect it when
3due and pay it into the county treasury on behalf of the designated
4successor agency or county to wind up the affairs of the
5disincorporated city.
Section 57409 of the Government Code is repealed.
Section 57410 of the Government Code is repealed.
Section 57416 of the Government Code is repealed.
Section 57423 of the Government Code is repealed.
Section 57424 of the Government Code is repealed.
Section 57426 is added to the Government Code, to
12read:
As of the effective date of the disincorporation, all of
14the following apply:
15(a) The general plan of the disincorporated city that was in effect
16immediately prior to the effective date of the disincorporation shall
17constitute the community plan of the county for the territory of
18the disincorporated city until the county updates the community
19plan, adopts a specific plan, or amends its county general plan for
20the unincorporated territory.
21(b) The zoning ordinances of the disincorporated city that were
22in effect immediately prior to the effective date of the
23disincorporation shall constitute the zoning ordinances of the
24county
for that territory, and shall be so identified in any
25community plan, specific plan, or general plan amendment adopted
26by the county, until the county updates the zoning ordinances
27applicable to that territory.
28(c) Any conditional use permit or legal nonconforming use that
29was in place immediately prior to the effective date of the
30disincorporation shall remain in force pursuant to the community
31plan and zoning ordinances.
32(d) Any use of land that was authorized under the general plan
33and zoning ordinances immediately prior to the effective date of
34the disincorporation shall continue to be authorized, for as long a
35period as may be required by the California Constitution or United
36States Constitution.
Section 99 of the Revenue and Taxation Code is
38amended to read:
(a) For the purposes of the computations required by this
40chapter:
P21 1(1) In the case of a jurisdictional change, other than a city
2incorporation, city disincorporation, or a formation of a district as
3defined in Section 2215, the auditor shall adjust the allocation of
4property tax revenue determined pursuant to Section 96 or 96.1,
5or the annual tax increment determined pursuant to Section 96.5,
6for local agencies whose service area or service responsibility
7would be altered by the jurisdictional change, as determined
8pursuant to subdivision (b) or (c).
9(2) In the case of a city incorporation or disincorporation, the
10auditor
shall assign the allocation of property tax revenues
11determined pursuant to Section 56810 of the Government Code
12and the adjustments in tax revenues that may occur pursuant to
13Section 56815 of the Government Code to the newly formed city
14or district and shall make the adjustment as determined by Section
1556810 or 56813 in the allocation of property tax revenue
16determined pursuant to Section 96 or 96.1 for each local agency
17whose service area or service responsibilities would be altered by
18the incorporation.
19(3) In the case of a formation of a district as defined in Section
202215, the auditor shall assign the allocation of property tax
21revenues determined pursuant to Section 56810 of the Government
22Code to the district and shall make the adjustment as determined
23by Section 56810, or for the disincorporated city or dissolved
24district as
determined by Section 56813, in the allocation of
25property tax revenue determined pursuant to Section 96 or 96.1
26for each local agency whose service area or service responsibilities
27would be altered by the change of organization.
28(b) Upon the filing of an application or a resolution pursuant to
29the Cortese-Knox-Hertzberg Local Government Reorganization
30Act of 2000 (Division 3 (commencing with Section 56000) of Title
315 of the Government Code), but prior to the issuance of a certificate
32of filing, the executive officer shall give notice of the filing to the
33assessor and auditor of each county within which the territory
34subject to the jurisdictional change is located. This notice shall
35specify each local agency whose service area or responsibility will
36be altered by the jurisdictional change.
37(1) (A) The county assessor shall provide to the county auditor,
38within 30 days of the notice of filing, a report which identifies the
39assessed valuations for the territory subject to the jurisdictional
40change and the tax rate area or areas in which the territory exists.
P22 1(B) The auditor shall estimate the amount of property tax
2revenue generated within the territory that is the subject of the
3jurisdictional change during the current fiscal year.
4(2) The auditor shall estimate what proportion of the property
5tax revenue determined pursuant to paragraph (1) is attributable
6to each local agency pursuant to Sections 96.1 and 96.5.
7(3) Within 45 days of notice of the filing of an application or
8resolution,
the auditor shall notify the governing body of each local
9agency whose service area or service responsibility will be altered
10by the jurisdictional change of the amount of, and allocation factors
11with respect to, property tax revenue estimated pursuant to
12paragraph (2) that is subject to a negotiated exchange.
13(4) Upon receipt of the estimates pursuant to paragraph (3), the
14local agencies shall commence negotiations to determine the
15amount of property tax revenues to be exchanged between and
16among the local agencies. Except as otherwise provided, this
17negotiation period shall not exceed 60 days. If a local agency
18involved in these negotiations notifies the other local agencies, the
19county auditor, and the local agency formation commission in
20writing of its desire to extend the negotiating period, the negotiating
21
period shall be 90 days.
22The exchange may be limited to an exchange of property tax
23revenues from the annual tax increment generated in the area
24subject to the jurisdictional change and attributable to the local
25agencies whose service area or service responsibilities will be
26altered by the proposed jurisdictional change. The final exchange
27resolution shall specify how the annual tax increment shall be
28allocated in future years.
29(5) In the event that a jurisdictional change would affect the
30service area or service responsibility of one or more special
31districts, the board of supervisors of the county or counties in which
32the districts are located shall, on behalf of the district or districts,
33negotiate any exchange of property tax revenues. Prior to entering
34into negotiation on
behalf of a district for the exchange of property
35tax revenue, the board shall consult with the affected district. The
36
consultation shall include, at a minimum, notification to each
37member and executive officer of the district board of the pending
38consultation and provision of adequate opportunity to comment
39on the negotiation.
P23 1(6) Notwithstanding any other provision of law, the executive
2officer shall not issue a certificate of filing pursuant to Section
356658 of the Government Code until the local agencies included
4in the property tax revenue exchange negotiation, within the
5negotiation period, present resolutions adopted by each such county
6and city whereby each county and city agrees to accept the
7exchange of property tax revenues.
8(7) In the event that the commission modifies the proposal or
9its resolution of determination, any local agency whose service
10area or service
responsibility would be altered by the proposed
11jurisdictional change may request, and the executive officer shall
12grant, 30 days for the affected agencies, pursuant to paragraph (4),
13to renegotiate an exchange of property tax revenues.
14Notwithstanding the time period specified in paragraph (4), if the
15resolutions required pursuant to paragraph (6) are not presented
16to the executive officer within the 30-day period, all proceedings
17of the jurisdictional change shall automatically be terminated.
18(8) In the case of a jurisdictional change that consists of a city’s
19qualified annexation of unincorporated territory, an exchange of
20property tax revenues between the city and the county shall be
21determined in accordance with subdivision (e) if that exchange of
22revenues is not otherwise determined pursuant to either of the
23following:
24(A) Negotiations completed within the applicable period or
25periods as prescribed by this subdivision.
26(B) A master property tax exchange agreement among those
27local agencies, as described in subdivision (d).
28For purposes of this paragraph, a qualified annexation of
29unincorporated territory means an annexation, as so described, for
30which an application or a resolution was filed on or after January
311, 1998, and on or before January 1, 2021.
32(9) No later than the date on which the certificate of completion
33of the jurisdictional change is recorded with the county recorder,
34the executive officer shall notify the auditor or auditors of the
35exchange of property tax revenues and the auditor
or auditors shall
36make the appropriate adjustments as provided in subdivision (a).
37(c) Whenever a jurisdictional change is not required to be
38reviewed and approved by a local agency formation commission,
39the local agencies whose service area or service responsibilities
40
would be altered by the proposed change, shall give notice to the
P24 1State Board of Equalization and the assessor and auditor of each
2county within which the territory subject to the jurisdictional
3change is located. This notice shall specify each local agency
4whose service area or responsibility will be altered by the
5jurisdictional change and request the auditor and assessor to make
6the determinations required pursuant to paragraphs (1) and (2) of
7subdivision (b). Upon notification by the auditor of the amount
8of, and allocation factors with respect to, property tax subject to
9exchange, the local agencies, pursuant to the provisions of
10paragraphs (4) and (6) of subdivision (b), shall determine the
11amount of property tax revenues to be exchanged between and
12among the local agencies. Notwithstanding any other provision of
13law, no such jurisdictional change shall become effective until
14each
county and city included in these negotiations agrees, by
15resolution, to accept the negotiated exchange of property tax
16
revenues. The exchange may be limited to an exchange of property
17tax revenue from the annual tax increment generated in the area
18subject to the jurisdictional change and attributable to the local
19agencies whose service area or service responsibilities will be
20altered by the proposed jurisdictional change. The final exchange
21resolution shall specify how the annual tax increment shall be
22allocated in future years. Upon the adoption of the resolutions
23required pursuant to this section, the adopting agencies shall notify
24the auditor who shall make the appropriate adjustments as provided
25in subdivision (a). Adjustments in property tax allocations made
26as the result of a city or library district withdrawing from a county
27free library system pursuant to Section 19116 of the Education
28Code shall be made pursuant to Section 19116 of the Education
29Code, and this subdivision shall not apply.
30(d) With respect to adjustments in the allocation of property
31
taxes pursuant to this section, a county and any local agency or
32agencies within the county may develop and adopt a master
33property tax transfer agreement. The agreement may be revised
34from time to time by the parties subject to the agreement.
35(e) (1) An exchange of property tax revenues that is required
36by paragraph (8) of subdivision (b) to be determined pursuant to
37this subdivision shall be determined in accordance with all of the
38following:
39(A) The city and the county shall mutually select a third-party
40consultant to perform a comprehensive, independent fiscal analysis,
P25 1funded in equal portions by the city and the county, that specifies
2estimates of all tax revenues that will be derived from the annexed
3territory and the costs of city and
county services with respect to
4the annexed territory. The analysis shall be completed within a
5period not to exceed 30 days, and shall be based upon the general
6plan or adopted plans and policies of the annexing city and the
7intended uses for the annexed territory. If, upon the completion of
8the analysis period, no exchange of property tax revenues is agreed
9upon by the city and the county, subparagraph (B) shall apply.
10(B) The city and the county shall mutually select a mediator,
11funded in equal portions by those agencies, to perform mediation
12for a period not to exceed 30 days. If, upon the completion of the
13mediation period, no exchange of property tax revenues is agreed
14upon by the city and the county, subparagraph (C) shall apply.
15(C) The city and the county shall mutually
select an arbitrator,
16funded in equal portions by those agencies, to conduct an advisory
17arbitration with the city and the county for a period not to exceed
1830 days. At the conclusion of this arbitration period, the city and
19the county shall each present to the arbitrator its last and best offer
20with respect to the exchange of property tax revenues. The
21arbitrator shall select one of the offers and recommend that offer
22to the governing bodies of the city and the county. If the governing
23body of the city or the county rejects the recommended offer, it
24shall do so during a public hearing, and shall, at the conclusion of
25that hearing, make written findings of fact as to why the
26recommended offer was not accepted.
27(2) Proceedings under this subdivision shall be concluded no
28more than 150 days after the auditor provides the notification
29pursuant
to paragraph (3) of subdivision (b), unless one of the
30periods specified in this subdivision is extended by the mutual
31agreement of the city and the county. Notwithstanding any other
32provision of law, except for those conditions that are necessary to
33implement an exchange of property tax revenues determined
34pursuant to this subdivision, the local agency formation
35commission shall not impose any fiscal conditions upon a city’s
36qualified annexation of unincorporated territory that is subject to
37this subdivision.
38(f) Except as otherwise provided in subdivision (g), for the
39purpose of determining the amount of property tax to be allocated
40in the 1979-80 fiscal year and each fiscal year thereafter for those
P26 1local agencies that were affected by a jurisdictional change which
2was filed with the State Board of Equalization after January 1,
31978,
but on or before January 1, 1979. The local agencies shall
4determine by resolution the amount of property tax revenues to be
5exchanged between and among the affected agencies and notify
6the auditor of the determination.
7(g) For the purpose of determining the amount of property tax
8to be allocated in the 1979-80 fiscal year and each fiscal year
9thereafter, for a city incorporation that was filed pursuant to
10Sections 54900 to 54904, inclusive, of the Government Code after
11January 1, 1978, but on or before January 1, 1979, the amount of
12property tax revenue considered to have been received by the
13jurisdiction for the 1978-79 fiscal year shall be equal to two-thirds
14of the amount of property tax revenue projected in the final local
15agency formation commission staff report pertaining to the
16incorporation multiplied by the proportion that the
total amount
17of property tax revenue received by all jurisdictions within the
18county for the 1978-79 fiscal year bears to the total amount of
19property tax revenue received by all jurisdictions within the county
20for the 1977-78 fiscal year. Except, however, in the event that the
21final commission report did not specify the amount of property
22tax revenue projected for that incorporation, the commission shall
23by October 10 determine pursuant to Section 54790.3 of the
24Government Code the amount of property tax to be transferred to
25the city.
26The provisions of this subdivision shall also apply to the
27allocation of property taxes for the 1980-81 fiscal year and each
28fiscal year thereafter for incorporations approved by the voters in
29June 1979.
30(h) For the purpose of the computations made pursuant to this
31section,
in the case of a district formation that was filed pursuant
32to Sections 54900 to 54904, inclusive, of the Government Code
33after January 1, 1978, but before January 1, 1979, the amount of
34property tax to be allocated to the district for the 1979-80 fiscal
35year and each fiscal year thereafter shall be determined pursuant
36to Section 54790.3 of the Government Code.
37(i) For the purposes of the computations required by this chapter,
38in the case of a jurisdictional change, other than a change requiring
39an adjustment by the auditor pursuant to subdivision (a), the auditor
40shall adjust the allocation of property tax revenue determined
P27 1pursuant to Section 96 or 96.1 or its predecessor section, or the
2annual tax increment determined pursuant to Section 96.5 or its
3predecessor section, for each local school district, community
4college district, or county
superintendent of schools whose service
5area or service responsibility would be altered by the jurisdictional
6change, as determined as follows:
7(1) The governing body of each district, county superintendent
8of schools, or county whose service areas or service responsibilities
9would be altered by the change shall determine the amount of
10property tax revenues to be exchanged between and among the
11affected jurisdictions. This determination shall be adopted by each
12affected jurisdiction by resolution. For the purpose of negotiation,
13the county auditor shall furnish the parties and the county board
14of education with an estimate of the property tax revenue subject
15to negotiation.
16(2) In the event that the affected jurisdictions are unable to agree,
17within 60 days after the
effective date of the jurisdictional change,
18and if all the jurisdictions are wholly within one county, the county
19board of education shall, by resolution, determine the amount of
20property tax revenue to be exchanged. If the jurisdictions are in
21more than one county, the State Board of Education shall, by
22resolution, within 60 days after the effective date of the
23jurisdictional change, determine the amount of property tax to be
24exchanged.
25(3) Upon adoption of any resolution pursuant to this subdivision,
26the adopting jurisdictions or State Board of Education shall notify
27the county auditor who shall make the appropriate adjustments as
28provided in subdivision (a).
29(j) For purposes of subdivision (i), the annexation by a
30community college district of territory within a county not
31previously
served by a community college district is an alteration
32of service area. The community college district and the county
33shall negotiate the amount, if any, of property tax revenues to be
34exchanged. In these negotiations, there shall be taken into
35consideration the amount of revenue received from the timber
36yield tax and forest reserve receipts by the community college
37district in the area not previously served. In no event shall the
38property tax revenue to be exchanged exceed the amount of
39property tax revenue collected prior to the annexation for the
40purposes of paying tuition expenses of residents enrolled in the
P28 1community college district, adjusted each year by the percentage
2change in population and the percentage change in the cost of
3living, or per capita personal income, whichever is lower, less the
4amount of revenue received by the community college district in
5the annexed area from the
timber yield tax and forest reserve
6receipts.
7(k) At any time after a jurisdictional change is effective, any of
8the local agencies party to the agreement to exchange property tax
9revenue may renegotiate the agreement with respect to the current
10fiscal year or subsequent fiscal years, subject to approval by all
11local agencies affected by the renegotiation.
If the Commission on State Mandates determines
13that this act contains costs mandated by the state, reimbursement
14to local agencies and school districts for those costs shall be made
15pursuant to Part 7 (commencing with Section 17500) of Division
164 of Title 2 of the Government Code.
O
95