BILL ANALYSIS
SENATE LOCAL GOVERNMENT COMMITTEE
BILL NO: SB 1483 HEARING: 8/11/10
AUTHOR: Wright FISCAL: No
VERSION: 6/3/10 CONSULTANT:
Weinberger
MULTIFAMILY IMPROVEMENT DISTRICTS
Background and Existing Law
Several state laws allow local officials to charge benefit
assessments to property owners to pay for public works and
public services. Proposition 218 (1996) requires owners of
real property to approve benefit assessments in a weighted
ballot election; property owners vote in proportion to
their proposed assessments, which reflect how much their
property benefits from the proposed public works or public
services. The courts have said that assessments on
businesses, as opposed to real property, are not subject to
Proposition 218's provisions.
The Multifamily Improvement District Law allows a city
council or county board of supervisors to set up a district
and levy property assessments, business assessments, or
both, to pay for several types of activities and
improvements in multi-family neighborhoods (SB 1404, Soto,
2004).
If a city or county receives a petition signed by either
property owners who would pay more than two-thirds of the
proposed assessment or business owners who would pay more
than two-thirds of the proposed assessment, the city
council or county supervisors may begin to form a
"multifamily improvement district" (MID). Local officials
must develop a management district plan, prepared by a
licensed engineer. Property owners must approve proposed
benefit assessments on real property in a weighted-ballot
protest proceeding pursuant to Proposition 218. A
different statutory notice hearing, and protest procedure
applies to proposed benefit assessments on businesses.
A new MID exists for up to five years. Property owners or
business owners can renew a MID for successive 10-year
periods, following the same procedures as for its original
formation. Property owners or business owners have an
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annual chance to disestablish their MID.
The activities that a MID can pay for include:
Supplemental security.Marketing and advertising.
Landscape maintenance.Managerial services.
Sanitation and graffiti removal.Supplemental code
enforcement.
The improvements that a MID can pay for include:
Parking. Street decorations.Street closings.
Benches and signs. Parks. Security improvements.
Trash receptacles. Fountains.Ramps and
sidewalks.
Street lighting. Planting areas.Building
removal.
A MID may finance these improvements by issuing bonds with
maturities of up to 20 years, paid for with the benefit
assessments. If the MID issues bonds, it may continue to
levy assessments until the assessments pay off the bonds.
A city or county can contract with a private, nonprofit
owners' association to run the MID. After the first year,
the owners' association must provide annual reports about
the MID's spending and assessments. When acting on
improvement district matters, the owners' association must
comply with the Brown Act and the Public Records Act.
`
A city or county may not form a MID on or after January 1,
2012.
Proposed Law
SB 1483 extends the date before which a city or county can
form a multifamily improvement district (MID) by 10 years,
from January 1, 2012 to January 1, 2022.
Comments
1. Extending a useful program . Formed in 2007, with the
approval of more than 82% of the property owners in the
district, the Andy Street Multifamily Improvement District
SB 1483 -- 6/3/10 -- Page 3
in the City of Long Beach is the only MID created since the
Soto bill took effect in 2005. The District's revenues
fund security patrols, public space improvements, and crime
prevention education and training. The Andy Street MID is
succeeding in combating crime in the district, reducing
annual police service calls by more than 50%. Hoping to
build on this success, officials in Long Beach and other
cities are considering forming new MIDs. They want to
extend the MID statute's sunset date to ensure that there
is enough time to complete the formation process for new
districts.
2. What's the rush ? The Senate Local Government Committee
amended the January 1, 2012 sunset date into the 2004 Soto
bill authorizing local governments to form MIDs. Cities
and counties still have more than a year in which to form
MIDs before the statute sunsets. With only one MID
operating and only two or three MID formation efforts
underway, information about the MID statute's effectiveness
is limited. The Committee may wish to consider why the
Legislature needs to extend the MID statute's sunset date
more than a year early.
3. Gut-and-amend . When the Senate passed SB 1483 on May
3, 2010, the bill clarified statutory references to the
definition of "eligible recipient Indian tribes". The June
3 Assembly amendments deleted that language and converted
the bill into a measure extending the Multifamily
Improvement District Law's sunset date. Because this topic
was never heard in the Senate, the Senate Rules Committee
has referred the amended bill under Senate Rule 29.10 to
the Senate Local Government Committee for a hearing on the
Assembly's amendments. At its August 11 hearing, the
Committee has four choices:
Send the bill back to the Senate Floor,
recommending concurrence.
Send the bill back to the Senate Floor,
recommending nonconcurrence.
Send the bill back to the Senate Floor, without
recommendation.
Hold the bill.
Assembly Actions
Assembly Local Government Committee: 9-0
SB 1483 -- 6/3/10 -- Page 4
Assembly Floor: 71-0
Support and Opposition (8/9/10)
Support : Apartment Association, California Southern Cities
and the City of Long Beach.
Opposition : Unknown.