Amended in Senate August 19, 2016

Amended in Senate August 16, 2016

Amended in Assembly May 2, 2016

Amended in Assembly March 17, 2016

California Legislature—2015–16 Regular Session

Assembly BillNo. 2618


Introduced by Assembly Member Nazarian

February 19, 2016


An act to amend Section 53328.1 of the Government Code, relating to local government.

LEGISLATIVE COUNSEL’S DIGEST

AB 2618, as amended, Nazarian. Community facilities districts: powers.

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. Existing law authorizes a community facilities district formed pursuant to an alternative procedure 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.

This bill would authorize a community facilities district that is formed pursuant to the alternative procedure to additionally finance seismic retrofitting, as specified.

This bill would incorporate changes to Section 53328.1 of the Government Code proposed by both this bill and AB 2693, which would become operative only if both bills are enacted and become effective on or before January 1, 2017, and this bill is chaptered last.

Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.

The people of the State of California do enact as follows:

P2    1

SECTION 1.  

Section 53328.1 of the Government Code is
2amended to read:

3

53328.1.  

(a) As an alternate and independent procedure for
4forming a community facilities district, the legislative body may
5form a community facilities district that initially consists solely
6of territory proposed for annexation to the community facilities
7district in the future, with the condition that a parcel or parcels
8within that territory may be annexed to the community facilities
9district and subjected to the special tax only with the unanimous
10approval of the owner or owners of the parcel or parcels at the
11time that the parcel or parcels are annexed. In that case, the
12legislative body shall follow the procedures set forth in this article
13for the formation of a community facilities district, with the
14following exceptions:

15(1) The legislative body shall not be obligated to specify the
16rate or rates of special tax in the resolution of intention or the
17resolution of formation, provided that both of the following are
18met:

19(A) The resolution of intention and the resolution of formation
20include a statement that the rate shall be established in an amount
21required to finance or refinance the authorized improvements and
22to pay the district’s administrative expenses.

23(B) The maximum rate of special tax applicable to a parcel or
24parcels shall be specified in the unanimous approval described in
25this section relating to the parcel or parcels.

26(2) The legislative body shall not be obligated to specify in the
27resolution of intention the conditions under which the obligation
28to pay the specified special tax may be prepaid and permanently
P3    1satisfied. Instead, a prepayment provision may be included in the
2unanimous approval of the owner or owners of each parcel or
3parcels at the time that the parcel or parcels are annexed to the
4community facilities district.

5(3) In lieu of approval pursuant to an election held in accordance
6with the procedures set forth in Sections 53326, 53327, 53327.5,
7and 53328, the appropriations limit for the community facilities
8district, the applicable rate of the special tax and the method of
9apportionment and manner of collection of that tax, and the
10authorization to incur bonded indebtedness for the community
11facilities district shall be specified and be approved by 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. No additional hearings or procedures
15are required, and the unanimous approval shall be deemed to
16constitute a unanimous vote in favor of the appropriations limit
17for the community facilities district, the authorization to levy the
18special tax on the parcel or parcels, and the authorization to incur
19bonded indebtedness for the community facilities district.

20(4) Notwithstanding Section 53324, this paragraph establishes
21the applicable protest provisions in the event a local agency forms
22a community facilities district pursuant to the procedures set forth
23in this section. If 50 percent or more of the registered voters, or
24six registered voters, whichever is more, residing within the
25territory proposed to be annexed to the community facilities district
26in the future, or if the owners of one-half or more of the area of
27land proposed to be annexed in the future and not exempt from
28the special tax, file written protests against establishment of the
29community facilities district, and protests are not withdrawn so as
30to reduce the protests to less than a majority, no further proceedings
31to form the community facilities district shall be undertaken for a
32period of one year from the date of decision of the legislative body
33on the issues discussed at the hearing. If the majority protests of
34the registered voters or of the landowners are only against the
35furnishing of a specified type or types of facilities or services
36within the district, or against levying a specified special tax, those
37types of facilities or services or the specified special tax shall be
38eliminated from the resolution of formation.

39(5) The legislative body shall not record a notice of special tax
40lien against any parcel or parcels in the community facilities district
P4    1until the owner or owners of the parcel or parcels have given their
2unanimous approval of the parcel’s or parcels’ annexation to the
3community facilities district, at which time the notice of special
4tax lien shall be recorded against the parcel or parcels as set forth
5in Section 53328.3.

6(b) Notwithstanding the provisions of Section 53340, after
7adoption of the resolution of formation for a community facilities
8district described in subdivision (a), the legislative body may, by
9ordinance, provide for the levy of the special taxes on parcels that
10will annex to the community facilities district at the rate or rates
11to be approved unanimously by the owner or owners of each parcel
12or parcels to be annexed to the community facilities district and
13for apportionment and collection of the special taxes in the manner
14specified in the resolution of formation. No further ordinance shall
15be required even though no parcels may then have annexed to the
16community facilities district.

17(c) The local agency may bring an action to determine the
18validity of any special taxes levied pursuant to this chapter and
19authorized pursuant to the procedures set forth in this section
20pursuant to Chapter 9 (commencing with Section 860) of Title 10
21of Part 2 of the Code of Civil Procedure. Notwithstanding Section
2253359, if an action is brought by an interested person pursuant to
23Section 863 of the Code of Civil Procedure to determine the
24validity of any special taxes levied against a parcel pursuant to
25this chapter and authorized pursuant to the procedures set forth in
26this section, the action shall be brought pursuant to Chapter 9
27(commencing with Section 860) of Title 10 of Part 2 of the Code
28of Civil Procedure, but shall, notwithstanding the time limits
29specified in Section 860 of the Code of Civil Procedure, be
30commenced within 15 days after the date on which the notice of
31special tax lien is recorded against the parcel. Any appeal from a
32judgment in any action or proceeding described in this subdivision
33shall be commenced within 30 days after entry of judgment.

34(d) A community facilities district formed pursuant to this
35section may only finance facilities pursuant to subdivision (i) or
36(l) of Section 53313.5.

37(e) In connection with formation of a community facilities
38district and annexation of a parcel or parcels to the community
39facilities district pursuant to this section, and the conduct of an
40election on the proposition to authorize bonded indebtedness
P5    1pursuant to the alternate procedures set forth in Section 53355.5,
2the local agency may, without additional hearings or procedures,
3designate a parcel or parcels as an improvement area within the
4community facilities district. After the designation of a parcel or
5parcels as an improvement area, all proceedings for approval of
6the appropriations limit, the rate and method of apportionment and
7manner of collection of special tax and the authorization to incur
8bonded indebtedness for the parcel or parcels shall apply only to
9the improvement area.

10(f) In connection with a community facilities district formed
11under this section, as an alternate and independent procedure for
12making the changes described in Section 53330.7, the changes
13may be made with the unanimous approval of the owner or owners
14of the parcel or parcels that will be affected by the change and
15with the written consent of the local agency. No additional hearings
16or procedures are required, and the unanimous approval shall be
17deemed to constitute a unanimous vote in favor of the proposed
18changes. If the proceeds of a special tax are being used to retire
19any debt incurred pursuant to this chapter and the unanimous
20approval relates to the reduction of the special tax rate, the
21unanimous approval shall recite that the reduction or termination
22of the special tax will not interfere with the timely retirement of
23that debt.

24

SEC. 1.5.  

Section 53328.1 of the Government Code is amended
25to read:

26

53328.1.  

(a) As an alternate and independent procedure for
27forming a community facilities district, the legislative body may
28form a community facilities district that initially consists solely
29of territory proposed for annexation to the community facilities
30district in the future, with the condition that a parcel or parcels
31within that territory may be annexed to the community facilities
32district and subjected to the special tax only with the unanimous
33approval of the owner or owners of the parcel or parcels at the
34time that the parcel or parcels are annexed. In that case, the
35legislative body shall follow the procedures set forth in this article
36for the formation of a community facilities district, with the
37following exceptions:

38(1) The legislative body shall not be obligated to specify the
39rate or rates of special tax in the resolution of intention or the
P6    1resolution of formation, provided that both of the following are
2met:

3(A) The resolution of intention and the resolution of formation
4include a statement that the rate shall be established in an amount
5required to finance or refinance the authorized improvements and
6to pay the district’s administrative expenses.

7(B) The maximum rate of special tax applicable to a parcel or
8parcels shall be specified in the unanimous approval described in
9this section relating to the parcel or parcels.

10(2) The legislative body shall not be obligated to specify in the
11resolution of intention the conditions under which the obligation
12to pay the specified special tax may be prepaid and permanently
13satisfied. Instead, a prepayment provision may be included in the
14unanimous approval of the owner or owners of each parcel or
15parcels at the time that the parcel or parcels are annexed to the
16community facilities district.

17(3) In lieu of approval pursuant to an election held in accordance
18with the procedures set forth in Sections 53326, 53327, 53327.5,
19and 53328, the appropriations limit for the community facilities
20district, the applicable rate of the special tax and the method of
21apportionment and manner of collection of that tax, and the
22authorization to incur bonded indebtedness for the community
23facilities district shall be specified and be approved by the
24unanimous approval of the owner or owners of each parcel or
25parcels at the time that the parcel or parcels are annexed to the
26community facilities district. No additional hearings or procedures
27are required, and the unanimous approval shall be deemed to
28constitute a unanimous vote in favor of the appropriations limit
29for the community facilities district, the authorization to levy the
30special tax on the parcel or parcels, and the authorization to incur
31bonded indebtedness for the community facilities district.

32(4) Notwithstanding Section 53324, this paragraph establishes
33the applicable protest provisions in the event a local agency forms
34a community facilities district pursuant to the procedures set forth
35in this section. If 50 percent or more of the registered voters, or
36six registered voters, whichever is more, residing within the
37territory proposed to be annexed to the community facilities district
38in the future, or if the owners of one-half or more of the area of
39land proposed to be annexed in the future and not exempt from
40the special tax, file written protests against establishment of the
P7    1community facilities district, and protests are not withdrawn so as
2to reduce the protests to less than a majority, no further proceedings
3to form the community facilities district shall be undertaken for a
4period of one year from the date of decision of the legislative body
5on the issues discussed at the hearing. If the majority protests of
6the registered voters or of the landowners are only against the
7furnishing of a specified type or types of facilities or services
8within the district, or against levying a specified special tax, those
9types of facilities or services or the specified special tax shall be
10eliminated from the resolution of formation.

11(5) The legislative body shall not record a notice of special tax
12lien against any parcel or parcels in the community facilities district
13until the owner or owners of the parcel or parcels have given their
14unanimous approval of the parcel’s or parcels’ annexation to the
15community facilities district, at which time the notice of special
16tax lien shall be recorded against the parcel or parcels as set forth
17in Section 53328.3.

18(b) Notwithstanding the provisions of Section 53340, after
19adoption of the resolution of formation for a community facilities
20district described in subdivision (a), the legislative body may, by
21ordinance, provide for the levy of the special taxes on parcels that
22will annex to the community facilities district at the rate or rates
23to be approved unanimously by the owner or owners of each parcel
24or parcels to be annexed to the community facilities district and
25for apportionment and collection of the special taxes in the manner
26specified in the resolution of formation. No further ordinance shall
27be required even though no parcels may then have annexed to the
28community facilities district.

29(c) The local agency may bring an action to determine the
30validity of any special taxes levied pursuant to this chapter and
31authorized pursuant to the procedures set forth in this section
32pursuant to Chapter 9 (commencing with Section 860) of Title 10
33of Part 2 of the Code of Civil Procedure. Notwithstanding Section
3453359, if an action is brought by an interested person pursuant to
35Section 863 of the Code of Civil Procedure to determine the
36validity of any special taxes levied against a parcel pursuant to
37this chapter and authorized pursuant to the procedures set forth in
38this section, the action shall be brought pursuant to Chapter 9
39(commencing with Section 860) of Title 10 of Part 2 of the Code
40of Civil Procedure, but shall, notwithstanding the time limits
P8    1specified in Section 860 of the Code of Civil Procedure, be
2commenced within 15 days after the date on which the notice of
3special tax lien is recorded against the parcel. Any appeal from a
4judgment in any action or proceeding described in this subdivision
5shall be commenced within 30 days after entry of judgment.

6(d) A community facilities district formed pursuant to this
7section may only finance facilities pursuant to subdivision (i) or
8(l) of Section 53313.5.

9(e)  (1) The legislative body shall comply with the requirements
10specified in Sections 5898.16 and 5898.17 of the Streets and
11Highways Code prior to the annexation of a parcel or parcels to a
12community facilities district formed pursuant to this section.

13(2) A parcel or parcels shall not be annexed to a community
14facilities district formed pursuant to this sectionbegin insert end insertbegin insertif the parcel owner
15or owners are seeking financing for improvement on a residential
16property with four or fewer units,end insert
unless the parcel complies with
17the conditions specified inbegin insert paragraphs (1) to (5), inclusive, and
18paragraph (8), and, in addition, for properties with energy
19efficiency improvements specified under subdivision (l) of Section
2053313.5, paragraph (7), ofend insert
subdivision (a) of Section 26063 of the
21Public Resourcesbegin delete Code and in subdivision (b) of Section 10081
22of Title 4 of the California Code of Regulations.end delete
begin insert Code.end insert

23(f) In connection with formation of a community facilities
24district and annexation of a parcel or parcels to the community
25facilities district pursuant to this section, and the conduct of an
26election on the proposition to authorize bonded indebtedness
27pursuant to the alternate procedures set forth in Section 53355.5,
28the local agency may, without additional hearings or procedures,
29designate a parcel or parcels as an improvement area within the
30community facilities district. After the designation of a parcel or
31parcels as an improvement area, all proceedings for approval of
32the appropriations limit, the rate and method of apportionment and
33manner of collection of special tax and the authorization to incur
34bonded indebtedness for the parcel or parcels shall apply only to
35the improvement area.

36(g) In connection with a community facilities district formed
37under this section, as an alternate and independent procedure for
38making the changes described in Section 53330.7, the changes
39may be made with the unanimous approval of the owner or owners
40of the parcel or parcels that will be affected by the change and
P9    1with the written consent of the local agency. No additional hearings
2or procedures are required, and the unanimous approval shall be
3deemed to constitute a unanimous vote in favor of the proposed
4changes. If the proceeds of a special tax are being used to retire
5any debt incurred pursuant to this chapter and the unanimous
6approval relates to the reduction of the special tax rate, the
7unanimous approval shall recite that the reduction or termination
8of the special tax will not interfere with the timely retirement of
9that debt.

10

SEC. 2.  

Section 1.5 of this bill incorporates amendments to
11Section 53328.1 of the Government Code proposed by both this
12bill and Assembly Bill 2693. It shall only become operative if (1)
13both bills are enacted and become effective on or before January
141, 2017, (2) each bill amends Section 53328.1 of the Government
15Code, and (3) this bill is enacted after Assembly Bill 2693, in
16which case Section 1 of this bill shall not become operative.



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