BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 2032|
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CONSENT
Bill No: AB 2032
Author: Linder (R)
Amended: 6/6/16 in Senate
Vote: 21
SENATE GOVERNANCE & FIN. COMMITTEE: 7-0, 6/15/16
AYES: Hertzberg, Nguyen, Beall, Hernandez, Lara, Moorlach,
Pavley
SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8
ASSEMBLY FLOOR: 76-0, 5/19/16 (Consent) - See last page for
vote
SUBJECT: Change of organization: cities: disincorporation
SOURCE: State Association of County Auditors
DIGEST: This bill requires additional financial information to
be identified during a city disincorporation.
ANALYSIS:
Existing law:
1)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.
AB 2032
Page 2
2)Tasks Local Agency Formation Commissions (LAFCOs) with
coordinating logical and timely changes in local governmental
boundaries, conducting special studies that review ways to
reorganize, simplify, and streamline governmental structures,
and preparing a sphere of influence for each city and special
district within each county.
3)Requires a plan for providing services following
disincorporation that identifies the services currently
provided in the city and which "successor agencies" will
provide those services in the future.
4)Requires the LAFCO executive officer must also develop a
comprehensive fiscal analysis that reviews and documents
information about the financial condition, costs, and revenues
of a city proposed for disincorporation, including:
a) The cost of providing services and the revenues to the
city in the past three fiscal years,
b) The cost of current and proposed capital improvements,
facilities, assets, and infrastructure,
c) The sources of funding available to the entities that
take over providing services, and
d) The anticipated costs to the agency designated to take
over service provision of providing those services.
5)Requires the city proposed for disincorporation to provide a
written statement that identifies the indebtedness of the
city, the amount of money in the city's treasury, the amount
of uncollected tax levies or other obligations due to the
city, and the amount of current and future liabilities of the
city.
AB 2032
Page 3
6)Requires the county tax collector to collect any unpaid taxes
owed to the city and provide the revenues to the agency taking
over service provision.
7)Requires the board of supervisors to collect debts due to the
city and perform any other acts necessary for winding up the
affairs of the city.
This bill:
1)Requires the comprehensive fiscal analysis prepared by the
LAFCO's executive officer to include:
a) All current and long-term liabilities, including debt
obligations, of the city proposed for disincorporation and
the funds available to discharge those liabilities; and
b) The potential financing mechanisms available to meet
those obligations. It also requires the city's written
statement of liabilities to include the amount of any
assessment due to the city.
2)Requires the tax collector to also collect any assessments due
to the disincorporated city.
3)Directs the successor agency's governing body and officers,
instead of the board of supervisors and the county officers,
to wind up the disincorporated city's affairs.
Background
AB 2032
Page 4
Last year, the Legislature significantly amended the process for
city disincorporations for the first time since 1963, with the
goal of ensuring that the full effects of disincorporation are
identified and understood before voters decide to approve or
reject it (AB 851, Mayes, Chapter 304, Statutes of 2015).
The State Association of County Auditors wants to ensure that
all relevant financial information is disclosed during the
disincorporation process and that all debts are successfully
collected.
Comments
Purpose of the bill. Although AB 851 comprehensively updated
LAFCO statutes relating to city disincorporations, some small
errors remain. AB 2032 makes minor changes to ensure that
important financial information, such as current and future
liabilities and potential financing mechanisms, are not left out
of the LAFCO executive officer's comprehensive fiscal analysis
of disincorporation. It also ensures that county tax collectors
can collect unpaid assessments that are owed to the
disincorporated city. Finally, it addresses a technical error
that results in inconsistency in the disincorporation process by
ensuring that the most appropriate agency, which may or may not
be the county, winds up the affairs of the disincorporated city.
These changes will make the disincorporation process run as
smoothly as possible if it is needed in the future.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: Yes
SUPPORT: (Verified6/29/16)
State Association of County Auditors (source)
AB 2032
Page 5
California Association of LAFCOs
Orange County LAFCO
OPPOSITION: (Verified6/29/16)
None received
ASSEMBLY FLOOR: 76-0, 5/19/16
AYES: Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker,
Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke,
Calderon, Campos, Chau, Chávez, Chiu, Chu, Cooley, Cooper,
Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Beth Gaines,
Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson,
Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper, Roger
Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey,
Levine, Linder, Lopez, Low, Maienschein, Mayes, Medina,
Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen,
Patterson, Quirk, Ridley-Thomas, Rodriguez, Salas, Santiago,
Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber,
Wilk, Wood, Rendon
NO VOTE RECORDED: Chang, Mathis, McCarty, Williams
Prepared by: Anton Favorini-Csorba / GOV. & F. / (916) 651-4119
6/29/16 15:56:01
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