Amended in Assembly April 11, 2016

Amended in Assembly April 5, 2016

Amended in Assembly March 17, 2016

California Legislature—2015–16 Regular Session

Assembly BillNo. 2032


Introduced by Assembly Member Linder

February 16, 2016


An act to amend Sections 56804, 56816, 57405, and 57412 of the Government Code, relating to local government.

LEGISLATIVE COUNSEL’S DIGEST

AB 2032, as amended, Linder. Change of organization: cities: disincorporation.

(1) Existing law, the Cortese-Knox-Hertzberg Local Government Reorganization Act of 2000, requires the executive officer of a local agency formation commission to prepare a comprehensive fiscal analysis for any proposal that includes a disincorporation, as specified. Existing law requires the comprehensive fiscal analysis to include, among other things, a review and documentation of specified costs associated with the proposed disincorporation.

This bill would additionally require the comprehensive fiscal analysis to include a review and documentation of all current and long-term liabilities of the city proposed forbegin delete disincorporation.end deletebegin insert disincorporation and the potential financing mechanism or mechanisms to address any identified shortfalls and obligations, as end insertbegin insertspecified.end insert

(2) The act states 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. To ascertain this information, the act requires the city being disincorporated to provide a written statement that includes specified information relating to its debts and contractual obligations.

This bill would additionally require that statement to include the amount of any assessment due the city that is unpaid or uncollected.

(3) The act requires the county tax collector to collect a tax that has been levied by the disincorporated city that remains uncollected.

This bill would additionally require the county tax collector to collect an assessment that has been levied by the disincorporated city that remains uncollected. By imposing new duties on local officials, this bill would impose a state-mandated local program.

(4) The act requires the board of supervisors to provide for the collection of debts due to a city being disincorporated and to wind up its affairs, as specified.

This bill would instead require the governing board of the successor to provide for the collection of debts due to the city and to wind up its affairs, as specified.

(5) 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:

P2    1

SECTION 1.  

Section 56804 of the Government Code is
2amended to read:

3

56804.  

For any proposal that includes a disincorporation, the
4executive officer shall prepare, or cause to be prepared by contract,
5a comprehensive fiscal analysis. This analysis shall become part
6of the report required pursuant to Section 56665. Data used for the
7analysis shall be from the most recent fiscal year for which data
8is available, preceding the issuances of the certificate of filing.
9When data requested by the executive officer in the notice to
10affected agencies, pursuant to paragraph (2) of subdivision (b) of
P3    1Section 56658, is unavailable, the analysis shall document the
2source and methodology of the data used. The analysis shall review
3and document each of the following:

4(a) The direct and indirect costs incurred by the city proposed
5for disincorporation for providing public services during the three
6fiscal years immediately preceding the submittal of the proposal
7for disincorporation.

8(b) The direct and indirect costs incurred by the city proposed
9for disincorporation for current and proposed capital improvements,
10facilities, assets, and infrastructure.

11(c) The sources of funding, if any, available to the entities
12proposed to assume the obligations of the city proposed for
13disincorporation.

14(d) The anticipated costs, including all direct and indirect costs,
15to the entities proposed to assume the obligations of the city
16proposed for disincorporation in the provision of services to the
17area proposed for disincorporation.

18(e) When determining costs, the executive officer shall also
19include all direct and indirect costs of any public services that are
20proposed to be transferred to state agencies for delivery.

21(f) The revenues of the city proposed for disincorporation during
22the three fiscal years immediately preceding the initiation of the
23disincorporation proposal.

begin delete

24(g) Any other information and analysis needed to make the
25findings required by Section 56770.

end delete
begin delete

19 26(h)

end delete

27begin insert(g)end insert All current and long-term liabilities, including, but not
28limited to, debt obligations, of the city proposed for
29disincorporation, including the balance of the restricted and
30unrestricted funds available to extinguish the obligations and
31liabilities.

begin insert

32
(h) The potential financing mechanism or mechanisms to address
33any shortfalls and obligations for those responsibilities identified
34in this section, including, but not limited to, taxes or assessments.

end insert
begin insert

35
(i) Any other information and analysis needed to make the
36findings required by Section 56770.

end insert
37

SEC. 2.  

Section 56816 of the Government Code is amended
38to read:

39

56816.  

(a) It is the intent of the Legislature that any proposal
40that includes the disincorporation of a city result in a determination
P4    1that the debt or contractual obligations and responsibilities of the
2city being disincorporated shall be the responsibility of that same
3territory for repayment. To ascertain this information, the city shall
4provide a written statement that determines and certifies all of the
5following to the commission prior to the issuance of a certificate
6of filing for a disincorporation proposal, pursuant to Sections 56651
7and 56658:

8(1) The indebtedness of the city.

9(2) The amount of money in the city’s treasury.

10(3) The amount of any tax levy, assessment, or other obligation
11due the city that is unpaid or has not been collected.

12(4) The amount of current and future liabilities, both internal
13debt owed to other special or restricted funds or enterprise funds
14within the agency and external debt owed to other public agencies
15or outside lenders or that results from contractual obligations,
16which may include contracts for goods or services, retirement
17obligations, actuarially determined unfunded pension liability of
18all classes in a public retirement system, including any
19documentation related to the termination of public retirement
20contract provisions, and the liability for other postemployment
21benefits. The information required by this paragraph shall include
22any associated revenue stream for financing that may be or has
23been committed to that liability, including employee contributions.

24(b) The city shall provide a written statement identifying the
25successor agency to the city’s former redevelopment agency, if
26any, pursuant to Section 34173 of the Health and Safety Code.

27

SEC. 3.  

Section 57405 of the Government Code is amended
28to read:

29

57405.  

If a tax or assessment has been levied by the
30disincorporated city and remains uncollected, the county tax
31collector shall collect it when due and pay it into the county
32treasury on behalf of the designated successor agency or county
33to wind up the affairs of the disincorporated city.

34

SEC. 4.  

Section 57412 of the Government Code is amended
35to read:

36

57412.  

The governing body of the successor shall provide for
37collection of debts due the city and wind up its affairs. Upon an
38order by the commission, the appropriate officer of the successor
39shall perform any act necessary for winding up the city affairs,
P5    1with the same effect as if it had been performed by the proper city
2officer.

3

SEC. 5.  

If the Commission on State Mandates determines that
4this act contains costs mandated by the state, reimbursement to
5local agencies and school districts for those costs shall be made
6pursuant to Part 7 (commencing with Section 17500) of Division
74 of Title 2 of the Government Code.



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