BILL ANALYSIS �
AB 912
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ASSEMBLY THIRD READING
AB 912 (Gordon)
As Amended May 2, 2011
Majority vote
LOCAL GOVERNMENT 9-0
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|Ayes:|Smyth, Alejo, Bradford, | | |
| |Campos, Davis, Gordon, | | |
| |Hueso, Knight, Norby | | |
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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
(LAFCO). Specifically, this bill allows, if a change of
organization consists of the dissolution of a district
recommended for dissolution by a prior action of LAFCO, the
LAFCO may do either of the following:
1)If the dissolution was initiated by the district board,
immediately order the dissolution; or,
2)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 (ACT).
2)Defines "change of organization" to mean any of the following:
a) A city incorporation;
b) A district formation;
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c) An annexation to, or detachment from, a city or
district;
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
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provide the identified service or services within that
designated geographic area.
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 : 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: 1)
immediately order the dissolution if the dissolution was
initiated by the district board; or, 2) 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.
According to the author, 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
that reorganization. However, for a district being dissolved,
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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.
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.
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.
Support arguments: Dissolution of districts can be a lengthy
and expensive process. This bill provides for limited
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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.
Analysis Prepared by : Debbie Michel / L. GOV. / (916)
319-3958
FN: 0000618