AB 2618,
as amended, Nazarian. begin deletecommunity facilities districts. end deletebegin insertCommunity facilities districts: powers.end insert
(1) The Mello-Roos Community Facilities Act of 1982 specifies the requirements for the establishment of a community facilities district, including, among other things, a petition, a hearing, the establishment of the boundaries of the community facilities district, and an election on the question. A community facilities district formed pursuant to that law is authorized to, among other things, finance and refinance the acquisition, installation, and improvement of energy efficiency, water conservation, and renewable energy improvements to or on real property and in buildings, as specified.
end insertbegin insertThis bill would specify that for purposes of financing and refinancing these types of improvements, a community facilities district may utilize purchase power agreements.
end insertbegin insert(2) Existing law additionally authorizes an alternative procedure for establishing a community facilities district under which the district initially consists solely of territory proposed for annexation to the community facilities district in the future, and territory is annexed and subjected to special taxes only upon unanimous approval of the owners, to finance and refinance the acquisition, installation, and improvement of energy efficiency, water conservation, and renewable energy improvements.
end insertbegin insertThis bill would authorize a community facilities district that is formed pursuant to the alternative procedure to additionally finance seismic retrofitting, as specified.
end insertThe Mello-Roos Community Facilities Act of 1982 specifies the requirements for the establishment of a community facilities district, including, among other things, a petition, a hearing, the establishment of the boundaries of the community facilities district, and an election on the question. Existing law authorizes an alternative procedure for establishing a community facilities district under which the district initially consists solely of territory proposed for annexation to the community facilities district in the future, and territory is annexed and subjected to special taxes only upon unanimous approval of the owners.
end deleteThis bill would make nonsubstantive changes to those provisions.
end deleteVote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.
The people of the State of California do enact as follows:
begin insertSection 53313.5 of the end insertbegin insertGovernment Codeend insertbegin insert is
2amended to read:end insert
A community facilities district may also finance the
4purchase, construction, expansion, improvement, or rehabilitation
5of any real or other tangible property with an estimated useful life
6of five years or longer or may finance planning and design work
7that is directly related to the purchase, construction, expansion, or
8rehabilitation of any real or tangible property. The facilities need
9not be physically located within the district. A district may not
10lease out facilities that it has financed except pursuant to a lease
11agreement or annexation agreement entered into prior to January
121, 1988. A district may only finance the purchase of facilities
13whose construction has been completed, as determined by the
14legislative body, before the resolution of formation to establish
15the district is adopted pursuant to Section 53325.1, except that a
16district
may finance the purchase of facilities completed after the
17adoption of the resolution of formation if the facility was
18constructed as if it had been constructed under the direction and
19supervision, or under the authority of, the local agency that will
P3 1own or operate the facility. For example, a community facilities
2district may finance facilities, including, but not limited to, the
3following:
4(a) Local park, recreation, parkway, and open-space facilities.
5(b) Elementary and secondary schoolsites and structures
6provided that the facilities meet the building area and cost standards
7established by the State Allocation Board.
8(c) Libraries.
9(d) Child care facilities, including costs of insuring the facilities
10against loss, liability insurance in connection
with the operation
11of the facility, and other insurance costs relating to the operation
12of the facilities, but excluding all other operational costs. However,
13the proceeds of bonds issued pursuant to this chapter shall not be
14used to pay these insurance costs.
15(e) The district may also finance the construction or
16undergrounding of water transmission and distribution facilities,
17natural gas pipeline facilities, telephone lines, facilities for the
18transmission or distribution of electrical energy, and cable
19television lines to provide access to those services to customers
20who do not have access to those services or to mitigate existing
21visual blight. The district may enter into an agreement with a public
22utility to utilize those facilities to provide a particular service and
23for the conveyance of those facilities to the public utility. “Public
24utility” shall include all utilities, whether public and regulated by
25the Public Utilities Commission,
or municipal. If the facilities are
26conveyed to the public utility, the agreement shall provide that the
27cost or a portion of the cost of the facilities that are the
28responsibility of the utility shall be refunded by the public utility
29to the district or improvement area thereof, to the extent that
30refunds are applicable pursuant to (1) the Public Utilities Code or
31rules of the Public Utilities Commission, as to utilities regulated
32by the commission, or (2) other laws regulating public utilities.
33Any reimbursement made to the district shall be utilized to reduce
34or minimize the special tax levied within the district or
35improvement area, or to construct or acquire additional facilities
36within the district or improvement area, as specified in the
37resolution of formation.
38(f) The district may also finance the acquisition, improvement,
39rehabilitation, or maintenance of any real or other tangible property,
40whether privately or publicly owned, for
flood and storm protection
P4 1services, including, but not limited to, storm drainage and treatment
2systems and sandstorm protection systems.
3(g) The district may also pay in full all amounts necessary to
4eliminate any fixed special assessment liens or to pay, repay, or
5defease any obligation to pay or any indebtedness secured by any
6tax, fee, charge, or assessment levied within the area of a
7community facilities district or may pay debt service on that
8indebtedness. When the amount financed by the district is to pay
9a tax, fee, charge, or assessment imposed by a public agency other
10than the one conducting the proceedings, and if the amount
11provided to the other public agency will not be entirely used to
12pay off or prepay an assessment lien or special tax obligation
13pursuant to the property owner’s legal right to do so, the written
14consent of the other public agency is required. In addition, tax
15revenues of a district may be used to make lease or
debt service
16payments on any lease, lease-purchase contract, or certificate of
17participation used to finance facilities authorized to be financed
18by the district.
19(h) Any other governmental facilities that the legislative body
20creating the community facilities district is authorized by law to
21contribute revenue to, or construct, own, or operate. However, the
22district shall not operate or maintain or, except as otherwise
23provided in subdivisions (e) and (k), have any ownership interest
24in any facilities for the transmission or distribution of natural gas,
25telephone service, or electrical energy.
26(i) (1) A district may also pay for the following:
27(A) Work deemed necessary to bring buildings or real property,
28including privately owned buildings or real property, into
29compliance with seismic safety
standards or regulations. Only
30work certified as necessary to comply with seismic safety standards
31or regulations by local building officials may be financed. No
32project involving the dismantling of an existing building and its
33replacement by a new building, nor the construction of a new or
34substantially new building may be financed pursuant to this
35subparagraph. Work on qualified historical buildings or structures
36shall be done in accordance with the State Historical Building
37Code (Part 2.7 (commencing with Section 18950) of Division 13
38of the Health and Safety Code).
39(B) In addition, within any county or area designated by the
40President of the United States or by the Governor as a disaster area
P5 1or for which the Governor has proclaimed the existence of a state
2of emergency because of earthquake damage, a district may also
3pay for any work deemed necessary to repair any damage to real
4property directly or indirectly caused by the occurrence of
an
5earthquake cited in the President’s or the Governor’s designation
6or proclamation, or by aftershocks associated with that earthquake,
7including work to reconstruct, repair, shore up, or replace any
8building damaged or destroyed by the earthquake, and specifically
9including, but not limited to, work on any building damaged or
10destroyed in the Loma Prieta earthquake that occurred on October
1117, 1989, or by its aftershocks. Work may be financed pursuant
12to this subparagraph only on property or buildings identified in a
13resolution of intention to establish a community facilities district
14adopted within seven years of the date on which the county or area
15is designated as a disaster area by the President or by the Governor
16or on which the Governor proclaims for the area the existence of
17a state of emergency.
18(2) Work on privately owned property, including reconstruction
19or replacement of privately owned buildings pursuant to
20subparagraph (B) of
paragraph (1), may only be financed by a tax
21levy if all of the votes cast on the question of levying the tax, vote
22in favor of levying the tax, or with the prior written consent to the
23tax of the owners of all property that may be subject to the tax, in
24that case the prior written consent shall be deemed to constitute a
25vote in favor of the tax and any associated bond issue. Any district
26created to finance seismic safety work on privately owned
27buildings, including repair, reconstruction, or replacement of
28privately owned buildings pursuant to this subdivision, shall consist
29only of lots or parcels that the legislative body finds have buildings
30that were damaged or destroyed by the earthquake cited pursuant
31to subparagraph (B) of paragraph (1) or by the aftershocks of that
32earthquake.
33(j) A district may also pay for the following:
34(1) Work deemed necessary to repair and abate
damage caused
35to privately owned buildings and structures by soil deterioration.
36“Soil deterioration” means a chemical reaction by soils that causes
37structural damage or defects in construction materials including
38concrete, steel, and ductile or cast iron. Only work certified as
39necessary by local building officials may be financed. No project
40involving the dismantling of an existing building or structure and
P6 1its replacement by a new building or structure, nor the construction
2of a new or substantially new building or structure may be financed
3pursuant to this paragraph.
4(2) Work on privately owned buildings and structures pursuant
5to this subdivision, including reconstruction, repair, and abatement
6of damage caused by soil deterioration, may only be financed by
7a tax levy if all of the votes cast on the question of levying the tax
8vote in favor of levying the tax. Any district created to finance the
9work on privately owned buildings or
structures, including
10reconstruction, repair, and abatement of damage caused by soil
11deterioration, shall consist only of lots or parcels on which the
12legislative body finds that the buildings or structures to be worked
13on pursuant to this subdivision suffer from soil deterioration.
14(k) A district may also finance the acquisition, improvement,
15rehabilitation, or maintenance of any real or other tangible property,
16whether privately or publicly owned, for the purposes of removal
17or remedial action for the cleanup of any hazardous substance
18released or threatened to be released into the environment. As used
19in this subdivision, “remedial action” and “removal” shall have
20the meaning set forth in Sections 25322 and 25323, respectively,
21of the Health and Safety Code, and “hazardous substance” shall
22have the meaning set forth in Section 25281 of the Health and
23Safety Code.
24(l) begin insert(1)end insertbegin insert end insertA district may also finance and refinance the acquisition,
25installation, and improvement of energy efficiency, water
26conservation, and renewable energy improvements that are affixed,
27as specified in Section 660 of the Civil Code, to or on real property
28and in buildings, whether the real property or buildings are
29privately or publicly owned. Energy efficiency, water conservation,
30and renewable energy improvements financed by a district may
31only be installed on a privately owned building and on privately
32owned real property with the prior written consent of the owner
33or owners of the building or real property.begin delete Thisend delete
34begin insert(2)end insertbegin insert end insertbegin insertThisend insert chapter shall not
be used to finance installation of
35energy efficiency, water conservation, and renewable energy
36improvements on a privately owned building or on privately owned
37real property in connection with the initial construction of a
38residential building unless the initial construction is undertaken
39by the intended owner or occupant.
P7 1(3) A district may use power purchase agreements for purposes
2of financing and refinancing improvements pursuant to this
3subdivision.
4(m) Any improvement on private property authorized to be
5financed by this section shall constitute a “public facility” for
6purposes of this chapter and a “public improvement” for purposes
7of Part 1 (commencing with Section 3100) and Part 2 (commencing
8with Section 3110) of Division 4.5 of the Streets and Highways
9Code,
whether the improvement is owned by a private entity, if
10the legislative body has determined that the improvement provides
11a public benefit, or the improvement is owned by a public agency.
begin insertSection 53328.1 of the end insertbegin insertGovernment Codeend insertbegin insert is amended
13to read:end insert
(a) As an alternate and independent procedure for
15forming a community facilities district, the legislative body may
16form a community facilities district that initially consists solely
17of territory proposed for annexation to the community facilities
18district in the future, with the condition that a parcel or parcels
19within that territory may be annexed to the community facilities
20district and subjected to the special tax only with the unanimous
21approval of the owner or owners of the parcel or parcels at the
22time that the parcel or parcels are annexed. In that case, the
23legislative body shall follow the procedures set forth in this article
24for the formation of a community facilities district, with the
25following exceptions:
26(1) The legislative body shall not be
obligated to specify the
27rate or rates of special tax in the resolution of intention or the
28resolution of formation, provided that both of the following are
29met:
30(A) The resolution of intention and the resolution of formation
31include a statement that the rate shall be established in an amount
32required to finance or refinance the authorized improvements and
33to pay the district’s administrative expenses.
34(B) The maximum rate of special tax applicable to a parcel or
35parcels shall be specified in the unanimous approval described in
36this section relating to the parcel or parcels.
37(2) The legislative body shall not be obligated to specify in the
38resolution of intention the conditions under which the obligation
39to pay the specified special tax may be prepaid and permanently
40satisfied. Instead, a prepayment provision may be
included in the
P8 1unanimous approval of the owner or owners of each parcel or
2parcels at the time that the parcel or parcels are annexed to the
3community facilities district.
4(3) In lieu of approval pursuant to an election held in accordance
5with the procedures set forth in Sections 53326, 53327, 53327.5,
6and 53328, the appropriations limit for the community facilities
7district, the applicable rate of the special tax and the method of
8apportionment and manner of collection of that tax, and the
9authorization to incur bonded indebtedness for the community
10facilities district shall be specified and be approved by the
11unanimous approval of the owner or owners of each parcel or
12parcels at the time that the parcel or parcels are annexed to the
13community facilities district. No additional hearings or procedures
14are required, and the unanimous approval shall be deemed to
15constitute a unanimous vote in favor of the appropriations limit
16for the community
facilities district, the authorization to levy the
17special tax on the parcel or parcels, and the authorization to incur
18bonded indebtedness for the community facilities district.
19(4) Notwithstanding Section 53324, this paragraph establishes
20the applicable protest provisions in the event a local agency forms
21a community facilities district pursuant to the procedures set forth
22in this section. If 50 percent or more of the registered voters, or
23six registered voters, whichever is more, residing within the
24territory proposed to be annexed to the community facilities district
25in the future, or if the owners of one-half or more of the area of
26land proposed to be annexed in the future and not exempt from
27the special tax, file written protests against establishment of the
28community facilities district, and protests are not withdrawn so as
29to reduce the protests to less than a majority, no further proceedings
30to form the community facilities district
shall be undertaken for a
31period of one year from the date of decision of the legislative body
32on the issues discussed at the hearing. If the majority protests of
33the registered voters or of the landowners are only against the
34furnishing of a specified type or types of facilities or services
35within the district, or against levying a specified special tax, those
36types of facilities or services or the specified special tax shall be
37eliminated from the resolution of formation.
38(5) The legislative body shall not record a notice of special tax
39lien against any parcel or parcels in the community facilities district
40until the owner or owners of the parcel or parcels have given their
P9 1unanimous approval of the parcel’s or parcels’ annexation to the
2community facilities district, at which time the notice of special
3tax lien shall be recorded against the parcel or parcels as set forth
4in Section 53328.3.
5(b) Notwithstanding the provisions of Section 53340, after
6adoption of the resolution of formation for a community facilities
7district described in subdivision (a), the legislative body may, by
8ordinance, provide for the levy of the special taxes on parcels that
9will annex to the community facilities district at the rate or rates
10to be approved unanimously by the owner or owners of each parcel
11or parcels to be annexed to the community facilities district and
12for apportionment and collection of the special taxes in the manner
13specified in the resolution of formation. No further ordinance shall
14be required even though no parcels may then have annexed to the
15community facilities district.
16(c) The local agency may bring an action to determine the
17validity of any special taxes levied pursuant to this chapter and
18authorized pursuant to the procedures set forth in this section
19pursuant to Chapter 9 (commencing with Section 860) of Title
10
20of Part 2 of the Code of Civil Procedure. Notwithstanding Section
2153359, if an action is brought by an interested person pursuant to
22Section 863 of the Code of Civil Procedure to determine the
23validity of any special taxes levied against a parcel pursuant to
24this chapter and authorized pursuant to the procedures set forth in
25this section, the action shall be brought pursuant to Chapter 9
26(commencing with Section 860) of Title 10 of Part 2 of the Code
27of Civil Procedure, but shall, notwithstanding the time limits
28specified in Section 860 of the Code of Civil Procedure, be
29commenced within 15 days after the date on which the notice of
30special tax lien is recorded against the parcel. Any appeal from a
31judgment in any action or proceeding described in this subdivision
32shall be commenced within 30 days after entry of judgment.
33(d) A community facilities district formed pursuant to this
34section may only finance facilities pursuant tobegin delete subdivisionend delete
35begin insert subdivisions (i) orend insert (l) of Section 53313.5.
36(e) In connection with formation of a community facilities
37district and annexation of a parcel or parcels to the community
38facilities district pursuant to this section, and the conduct of an
39election on the proposition to authorize bonded indebtedness
40pursuant to the alternate procedures set forth in Section 53355.5,
P10 1the local agency may, without additional hearings or procedures,
2designate a parcel or parcels as an improvement area within the
3community facilities district. After the designation of a parcel or
4parcels as an improvement area, all proceedings for approval of
5the appropriations limit, the rate and method of apportionment and
6manner of collection of special tax and the authorization to incur
7bonded indebtedness for
the parcel or parcels shall apply only to
8the improvement area.
9(f) In connection with a community facilities district formed
10under this section, as an alternate and independent procedure for
11making the changes described in Section 53330.7, the changes
12may be made with the unanimous approval of the owner or owners
13of the parcel or parcels that will be affected by the change and
14with the written consent of the local agency. No additional hearings
15or procedures are required, and the unanimous approval shall be
16deemed to constitute a unanimous vote in favor of the proposed
17changes. If the proceeds of a special tax are being used to retire
18any debt incurred pursuant to this chapter and the unanimous
19approval relates to the reduction of the special tax rate, the
20unanimous approval shall recite that the reduction or termination
21of the special tax will not interfere with the timely retirement of
22that debt.
Section 53328.1 of the Government Code is
24amended to read:
(a) As an alternate and independent procedure for
26forming a community facilities district, the legislative body may
27form a community facilities district that initially consists solely
28of territory proposed for annexation to the community facilities
29district in the future, with the condition that a parcel or parcels
30within that territory may be annexed to the community facilities
31district and subjected to the special tax only with the unanimous
32approval of the owner or owners of the parcel or parcels at the
33time that the parcel or parcels are annexed. In that case, the
34legislative body shall follow the procedures set forth in this article
35for the formation of a community facilities district, with the
36following exceptions:
37(1) The legislative body
is not required to specify the rate or
38rates of special tax in the resolution of intention or the resolution
39of formation, provided that both of the following are met:
P11 1(A) The resolution of intention and the resolution of formation
2include a statement that the rate shall be established in an amount
3required to finance or refinance the authorized improvements and
4to pay the district’s administrative expenses.
5(B) The maximum rate of special tax applicable to a parcel or
6parcels shall be specified in the unanimous approval described in
7this section relating to the parcel or parcels.
8(2) The legislative body
is not required to specify in the
9resolution of intention the conditions under which the obligation
10to pay the specified special tax may be prepaid and permanently
11satisfied. Instead, a prepayment provision may be included in the
12unanimous approval of the owner or owners of each parcel or
13parcels at the time that the parcel or parcels are annexed to the
14community facilities district.
15(3) In lieu of approval pursuant to an election held in accordance
16with the procedures set forth in Sections 53326, 53327, 53327.5,
17and 53328, the appropriations limit for the community facilities
18district, the applicable rate of the special tax and the method of
19apportionment and manner of collection of that tax, and the
20authorization to incur bonded indebtedness for the community
21facilities district shall be specified and be approved by the
22unanimous approval of the owner or owners of each parcel or
23parcels at the time that the parcel or
parcels are annexed to the
24community facilities district. No additional hearings or procedures
25are required, and the unanimous approval shall be deemed to
26constitute a unanimous vote in favor of the appropriations limit
27for the community facilities district, the authorization to levy the
28special tax on the parcel or parcels, and the authorization to incur
29bonded indebtedness for the community facilities district.
30(4) Notwithstanding Section 53324, this paragraph establishes
31the applicable protest provisions in the event a local agency forms
32a community facilities district pursuant to the procedures set forth
33in this section. If 50 percent or more of the registered voters, or
34six registered voters, whichever is more, residing within the
35territory proposed to be annexed to the community facilities district
36in the future, or if the owners of one-half or more of the area of
37land proposed to be annexed in the future and not exempt from
38the special
tax, file written protests against establishment of the
39community facilities district, and protests are not withdrawn so as
40to reduce the protests to less than a majority, no further proceedings
P12 1to form the community facilities district shall be undertaken for a
2period of one year from the date of decision of the legislative body
3on the issues discussed at the hearing. If the majority protests of
4the registered voters or of the landowners are only against the
5furnishing of a specified type or types of facilities or services
6within the district, or against levying a specified special tax, those
7types of facilities or services or the specified special tax shall be
8eliminated from the resolution of formation.
9(5) The legislative body shall not record a notice of special tax
10lien against any parcel or parcels in the community facilities district
11until the owner or owners of the parcel or parcels have given their
12unanimous approval of the parcel’s
or parcels’ annexation to the
13community facilities district, at which time the notice of special
14tax lien shall be recorded against the parcel or parcels as set forth
15in Section 53328.3.
16(b) Notwithstanding the provisions of Section 53340, after
17adoption of the resolution of formation for a community facilities
18district described in subdivision (a), the legislative body may, by
19ordinance, provide for the levy of the special taxes on parcels that
20will annex to the community facilities district at the rate or rates
21to be approved unanimously by the owner or owners of each parcel
22or parcels to be annexed to the community facilities district and
23for apportionment and collection of the special taxes in the manner
24specified in the resolution of formation. No further ordinance shall
25be required even though no parcels may then have annexed to the
26community facilities district.
27(c) The
local agency may bring an action to determine the
28validity of any special taxes levied pursuant to this chapter and
29authorized pursuant to the procedures set forth in this section
30pursuant to Chapter 9 (commencing with Section 860) of Title 10
31of Part 2 of the Code of Civil Procedure. Notwithstanding Section
3253359, if an action is brought by an interested person pursuant to
33Section 863 of the Code of Civil Procedure to determine the
34validity of any special taxes levied against a parcel pursuant to
35this chapter and authorized pursuant to the procedures set forth in
36this section, the action shall be brought pursuant to Chapter 9
37(commencing with Section 860) of Title 10 of Part 2 of the Code
38of Civil Procedure, but shall, notwithstanding the time limits
39specified in Section 860 of the Code of Civil Procedure, be
40commenced within 15 days after the date on which the notice of
P13 1special tax lien is recorded against the parcel. Any appeal from a
2judgment in any action or proceeding described in this subdivision
3
shall be commenced within 30 days after entry of judgment.
4(d) A community facilities district formed pursuant to this
5section may only finance facilities pursuant to subdivision (l) of
6Section 53313.5.
7(e) In connection with formation of a community facilities
8district and annexation of a parcel or parcels to the community
9facilities district pursuant to this section, and the conduct of an
10election on the proposition to authorize bonded indebtedness
11pursuant to the alternate procedures set forth in Section 53355.5,
12the local agency may, without additional hearings or procedures,
13designate a parcel or parcels as an improvement area within the
14community facilities district. After the designation of a parcel or
15parcels as an improvement area, all proceedings for approval of
16the appropriations limit, the rate and method of apportionment and
17manner of collection of special tax and the
authorization to incur
18bonded indebtedness for the parcel or parcels shall apply only to
19the improvement area.
20(f) In connection with a community facilities district formed
21under this section, as an alternate and independent procedure for
22making the changes described in Section 53330.7, the changes
23may be made with the unanimous approval of the owner or owners
24of the parcel or parcels that will be affected by the change and
25with the written consent of the local agency. No additional hearings
26or procedures are required, and the unanimous approval shall be
27deemed to constitute a unanimous vote in favor of the proposed
28changes. If the proceeds of a special tax are being used to retire
29any debt incurred pursuant to this chapter and the unanimous
30approval relates to the reduction of the special tax rate, the
31unanimous approval shall recite that the reduction or termination
32of the special tax will not interfere with the timely retirement of
33that
debt.
O
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