BILL ANALYSIS �
AB 912
Page 1
Date of Hearing: May 11, 2011
ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
Cameron Smyth, Chair
AB 912 (Gordon) - As Amended: May 2, 2011
SUBJECT : Local government: organization.
SUMMARY : Establishes, in specified circumstances, an expedited
dissolution process for a district recommended for dissolution
by a prior action of a local agency formation commission.
Specifically, this bill :
1)Allows, if a change of organization consists of the
dissolution of a district recommended for dissolution by a
prior action of the local agency formation commission (LAFCO),
the LAFCO may do either of the following:
a) If the dissolution was initiated by the district board,
immediately order the dissolution; or,
b) Within 60 days following the application being deemed
complete by the LAFCO, hold at least one noticed public
hearing on the proposal, and following the conclusion of
the hearing, LAFCO may order the dissolution without an
election, unless a majority protest exists, pursuant to
existing law.
EXISTING LAW :
1)Establishes the procedures for the organization and
reorganization of cities, counties, and special districts
under the Cortese-Knox-Hertzberg Local Reorganization Act of
2000.
2)Defines "change of organization" to mean any of the following:
a) A city incorporation;
b) A district formation;
c) An annexation to, or detachment from, a city or
district;
AB 912
Page 2
d) A disincorporation of a city;
e) A consolidation of cities or special districts;
f) A merger or establishment of a subsidiary district; or,
g) A proposal for the exercise of new or different
functions or classes of services, or divestiture of the
power to provide particular functions or classes of
services, within all or part of the jurisdictional
boundaries of a special district.
1)Defines "dissolution" to mean the dissolution,
disincorporation, extinguishment, and termination of the
existence of a district and the cessation of all its corporate
powers, except as the LAFCO may otherwise provide pursuant to
existing law or for the purpose of winding up the affairs of
the district.
2)Provides, in the case of any reorganization or change of
organization, a majority protest is deemed to exist and the
proposed change of organization or reorganization shall be
abandoned if the LAFCO finds that written protests filed and
not withdrawn prior to the conclusion of the hearing represent
any of the following:
a) In the case of uninhabited territory, landowners owning
50% or more of the assessed value of the land within the
territory;
b) In the case of inhabited territory, 50% or more of the
voters residing in the territory; or,
c) In the case of a landowner-voter district, 50% or more
of the voting power of the voters entitled to vote as a
result of owning land within the district.
3)Requires LAFCOS to conduct a service review of the municipal
services provided in the county or other appropriate area
designated by LAFCO, and in that municipal service review, the
LAFCO shall comprehensively review all of the agencies that
provide the identified service or services within that
designated geographic area.
AB 912
Page 3
4)Requires, if a change or organization consists of a
dissolution, the LAFCO to do either of the following:
a) Order the change of organization subject to confirmation
of the voters, or in the case of a landowner-voter
district, subject to confirmation by the landowners, unless
otherwise stated in the formation provisions of the
enabling statute of the district or otherwise authorized
pursuant to existing law; or,
b) Order the change of organization without election if it
is a change of organization that meets specified
requirements in current law.
FISCAL EFFECT : None
COMMENTS :
1)Current law requires a LAFCO, when that LAFCO is considering a
change or organization that consists of a dissolution, to
either order a change of organization subject to confirmation
of the voters, or to order the change of organization without
an election if the change of organization meets certain
specified requirements. This bill, instead, authorizes a
LAFCO, for a situation in which the LAFCO is considering a
change of organization that consists of the dissolution of a
district recommended for dissolution by a prior action of that
LAFCO, to do either one of the following: a) Immediately
order the dissolution if the dissolution was initiated by the
district board; or, b) Within 60 days following the
application being deemed complete by the LAFCO, the LAFCO must
hold at least one noticed public hearing on the
proposal, and order the dissolution without an election, unless
a majority protest exists. The provisions of the bill allow
for an expedited process for the dissolution of a district, if
specified conditions are met, thus saving time, resources, and
potentially eliminating the need for an election.
2)According to the author's office, district reorganization is
often initiated by the affected district based on the LAFCO's
or district's analysis indicating that there will be improved
service delivery, cost savings, of efficiencies of scale from
AB 912
Page 4
that reorganization. However, for a district being dissolved,
this process can be cost prohibitive, as a successor agency
would probably assume any debts of the district. The author
notes that by facilitating the dissolution of extraneous
districts, this bill encourages more efficient use of local
resources and delivery of local government services.
3)The California Special Districts Association (CSDA) has
concerns that the wording of one section of the bill may be
too broad. Specifically, the language which says that if a
change of organization consists of the dissolution of a
district recommended for dissolution "by a prior action of the
commission" may catch a recommendation that was adopted by a
LAFCO several years in the past and may not be relevant
anymore.
CSDA recommends language which ties the recommendation to a
district's Municipal Service Review (MSR). MSRs are required
to be completed by LAFCOs every five years to comprehensively
review all of the agencies that provide the identified service
or services within that designated geographic area. CSDA also
recommends that language in this bill be made to apply to
special districts that no longer perform the primary functions
for which the special district was established to perform.
4)The California Association of Local Agency Formation
Commissions (CALAFCO) writes that they are in conceptual
support of this bill, as the intent of the bill is to give
LAFCOs additional authority to dissolve special districts
under certain circumstances, similar to the island annexation
provisions contained in the Act.
CALAFCO raises several issues that require additional
clarification in this bill. First, CALAFCO recommends tying
the "prior action" language to either an MSR or a sphere of
influence update to ensure that actions are both timely and
relevant. Second, CALAFCO recommends that the parties who may
apply for dissolution be identified and limited in the bill's
provisions. And third, CALAFCO suggests clarifying wording in
the bill's provisions to ensure that the provisions are
explicit in their meaning and use the correct terminology that
is used in the Act.
5)Support arguments: Dissolution of districts can be a lengthy
and expensive process, as was identified in several recent
AB 912
Page 5
informational hearings held by the Assembly Local Government
Committee. This bill provides for limited circumstances for a
quicker process to dissolve a district in order to encourage
more efficient delivery of local government services.
Opposition arguments: Both CSDA and CALAFCO have concerns
that the language in the bill is currently too broad and must
be tightened to reflect only certain types of actions taken by
a LAFCO. The Committee may wish to ask the author how he
plans to address the concerns of these two groups.
REGISTERED SUPPORT / OPPOSITION :
Support
CALAFCO �in concept]
Concerns
California Special Districts Association
Opposition
None on file
Analysis Prepared by : Debbie Michel / L. GOV. / (916)
319-3958