BILL ANALYSIS Ó
AB 851
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Date of Hearing: May 13, 2015
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Jimmy Gomez, Chair
AB
851 (Mayes) - As Amended May 7, 2015
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Urgency: No State Mandated Local Program: YesReimbursable:
No
SUMMARY:
This bill makes changes to the city disincorporation process in
the Cortese-Knox Hertzberg Act (Act). Specifically, this bill:
AB 851
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1)Requires the city to provide a written statement to the local
agency formation commission (LAFCO) prior to filing a proposal
to initiate disincorporation proceedings that determines and
certifies the indebtedness of the city, the amount of money in
the city's treasury, the amount of any tax levy or other
obligation due the city that is unpaid or has not been
collected, and the amount of current and future liabilities.
Requires the city to identify the successor agency to the
city's former redevelopment agency, if any.
2)Specifies information that must be included in a plan for
services with a proposal for a disincorporation.
3)Requires notification to affected local agencies and requires
local agencies to provide data to the executive officer in
order to process a proposal in a timely manner.
4)Requires the executive officer to prepare a comprehensive
fiscal analysis for a disincorporation proposal.
5)Prohibits a LAFCO from approving or conditionally approving
any proposal that includes a disincorporation, unless a LAFCO
makes specified determinations.
6)Requires LAFCO to determine the amount of property tax revenue
to be exchanged by the disincorporating city and any successor
agency or affected local agency pursuant to a specified
process that is substantially similar to the process in
existing law for incorporations.
FISCAL EFFECT:
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Negligible state costs. Local mandate costs to LAFCOs are
non-reimbursable because they charge fees for the services they
provide.
COMMENTS:
1)Purpose. According to the author, "The statutes addressing
disincorporation have not been updated since the inception of
LAFCOs in 1963. Under existing law, the intended procedure
for dispensing with debt and unfunded liabilities is not in
compliance with Propositions 13 and 218. This could result in
the county at large being responsible for the debts and
unfunded liabilities of a city that has disincorporated. This
bill brings the sections of the Act into full compliance with
the mandates of Propositions 13 and 218."
2)LAFCOs. LAFCOs are responsible for coordinating logical and
timely changes in local governmental boundaries. The Act
establishes procedures for local government changes of
organization, including city incorporations,
disincorporations, annexations to a city or special district,
and city and special district consolidations. LAFCOs regulate
boundary changes through the approval or denial of proposals
by other public agencies or individuals.
3)Disincorporation in California. Seventeen cities have
disincorporated in California's history, but only two cities
have disincorporated since the creation of LAFCOs in 1963.
The City of Cabazon, located in Riverside County, was
disincorporated in 1973, and went through the process
contained in LAFCO law. The Town of Hornitos, located in
Mariposa County, was disincorporated by statute in 1972 (AB
2374, Chappie).
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More recent discussions regarding disincorporation relate to
several cities in California impacted by the redirection of
Vehicle License Fee (VLF) revenues away from newly
incorporated cities and annexations as part of the realignment
shift in 2011.
Analysis Prepared by:Jennifer Swenson / APPR. / (916)
319-2081