Amended in Assembly June 16, 2014

Amended in Assembly June 9, 2014

Amended in Assembly August 6, 2013

Amended in Assembly June 4, 2013

Senate Bill No. 614

Introduced by Senator Wolk

February 22, 2013

An act to amend Section 56653 of the Government Code, and to add Section 99.3 to the Revenue and Taxation Code, relating to local government.

LEGISLATIVE COUNSEL’S DIGEST

SB 614, as amended, Wolk. Local government: jurisdictional changes: infrastructure financing.

Existing law, the Cortese-Knox-Hertzberg Local Government Reorganization Act of 2000, provides the authority and procedures for the initiation, conduct, and completion of changes of organization and reorganization of cities and districts. The act requires a local agency or school district that initiates proceedings for a change of local government organization or reorganization by submitting a resolution of application to a local agency formation commission to also submit a plan for providing services within the affected territory, as specified.

This bill would instead require, if a proposal for a change of organization or reorganization is submitted to a local commission, that the applicant submit a plan for providing services within the affected territory. The bill would, in the case of a change of organization begin insert or reorganization initiated by a local agency and consented to by each affected agency, end insert that includes a disadvantaged, unincorporated community, authorize a local agency to include in its resolution of application a plan to improve or upgrade structures, roads, sewer or water facilities, or other infrastructure to serve the disadvantaged, unincorporated community and would authorize the local begin insert agency formation end insert commission to amend the proposal to include the formation of a special district, as specified.

Existing law requires a county auditor, in the case of a jurisdictional change caused by the formation of a district, to adjust the allocation of property tax revenue pursuant to the agreement of begin delete , for end delete local agencies whose service area or service responsibility would be altered by the jurisdictional change, as specified.

This bill would authorize a local agency that files a petition for change of organization, and one or more other local agencies that will improve or upgrade structures to serve a disadvantaged, unincorporated community, to agree on a plan for financing services and structures that may provide that taxes, levied upon taxable property in the area included within the territory each year by or for the benefit of the local agency and one or more other local agencies that consent to the plan, be divided between the respective affected local agencies and the special district. This bill would require the plan to include a date on which that division of taxes shall terminate, and would allow the plan to provide for the issuance of indebtedness, as specified. The bill would prohibit any plan developed under these provisions from resulting in a reduction of property tax revenues to school entities.

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

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

SECTION 1.  

It is the intent of the Legislature to provide
additional options for financing infrastructure that can be
incorporated into the approval of an annexation of a disadvantaged,
unincorporated community.

SEC. 2.  

Section 56653 of the Government Code is amended
to read:

56653.  

(a) If a proposal for a change of organization or
reorganization is submitted pursuant to this part, the applicant shall
submit a plan for providing services within the affected territory.

(b) The plan for providing services shall include all of the
following information and any additional information required by
the commission or the executive officer:

(1) An enumeration and description of the services to be
extended to the affected territory.

(2) The level and range of those services.

(3) An indication of when those services can feasibly be
extended to the affected territory.

(4) An indication of any improvement or upgrading of structures,
roads, sewer or water facilities, or other conditions the local agency
would impose or require within the affected territory if the change
of organization or reorganization is completed.

(5) Information with respect to how those services will be
financed.

(c) Only in the case of a change of organization or reorganization
begin insert initiated by a local agency and consented to by each affected
agency, end insert that includes a disadvantaged, unincorporated community
as defined in Section 56033.5:

(1) A local agency may include in its resolution of application
for change of organization or reorganization a plan adopted
pursuant to Section 99.3 of the Revenue and Taxation Code to
improve or upgrade structures, roads, sewer or water facilities, or
other infrastructure to serve the disadvantaged, unincorporated
community through the formation of a special begin delete district. end delete begin insert district or
reorganization of a special district with the special district’s
consent. end insert

(2) If a local agency includes a plan pursuant to paragraph (1),
a begin delete commission may, subject to paragraph (3), amend the petition end delete
begin insert local agency formation commission may amend the proposal end insert for
a change of organization or reorganization to include the formation
of a special begin delete district, end delete begin insert district or reorganization of a special district
with the special district’s consent, end insert including, but not limited to, a
community services district, municipal water district, or sanitary
district, to provide financing to improve or upgrade structures,
roads, sewer or water facilities, or other infrastructure to serve the
disadvantaged, unincorporated community, in conformity with the
requirements of the principal act of the district proposed to be
formed begin insert and all required formation proceedings end insert .

begin delete

(3) Consistent with paragraph (3) of subdivision (a) of Section
56375, a commission may initiate the formation of a special district
only if a request to form a special district is made by a local agency
pursuant to paragraph (1).

end delete begin insert

(d) Nothing in this section precludes a local agency formation
commission from considering any other options or exercising its
powers under Section 56375.

end insert

SEC. 3.  

Section 99.3 is added to the Revenue and Taxation
Code, to read:

99.3.  

(a) The plan for financing services that is included in a
petition for change of organization or reorganization filed by a
local agency begin insert and consented to by each affected agency, end insert pursuant
to Section 56653 of the Government Code for a disadvantaged,
unincorporated community may include a plan adopted pursuant
to this section.

(b) For purposes of this section, the following definitions apply:

(1) “Local agency” means a local agency as defined by
subdivision (a) of Section 95, and does not include any school
entity as defined in subdivision (f) of Section 95.

(2) “Affected local agency” means a local agency that has
adopted a resolution of its governing begin delete board end delete begin insert body end insert consenting to the
plan developed pursuant to this section.

(3) “Territory” means all or part of the land that is included in
the petition for change of organization or reorganization filed by
the local agency.

(4) “Certificate of completion” is defined as provided in Section
56020.5 of the Government Code.

(5) “Disadvantaged, unincorporated community” is defined as
provided in Section 56033.5 of the Government Code.

(c) A local agency that files a begin delete petition for end delete begin insert resolution of
application for a end insert change of organization or reorganization, and
one or more other local agencies that will improve or upgrade
structures to serve a disadvantaged, unincorporated community
subject to that petition, may agree on a plan for financing services
and structures pursuant to this section.

(d) The plan agreed upon pursuant to subdivision (c) may
contain a provision that taxes levied upon taxable property in the
area included within the territory each year by or for the benefit
of the local agency and one or more other local agencies that
consent to the plan, be divided as follows:

(1) That portion of the taxes that would have been produced by
the rate upon which the tax is levied each year by or for each of
the affected local agencies upon the total sum of the assessed value
of the taxable property in the territory as shown upon the
assessment roll used in connection with the taxation of the property
by the affected local agency, last equalized prior to the effective
date of the certification of completion, and that portion of taxes
by or for each school entity, shall be allocated to, and when
collected shall be paid to, the respective affected local agencies
and school entities as taxes by or for the affected local agencies
and school entities on all property are paid.

(2) That portion of the levied taxes each year specified in the
adopted infrastructure financing plan for the city and each affected
taxing entity that has agreed to participate pursuant to this section,
in excess of the amount specified in paragraph (1), shall be
allocated to, and when collected shall be paid into a special fund
of a special district formed begin insert or reorganized with the special district’s
consent end insert pursuant to subdivision (c) of Section 56653 of the
Government Code that will finance the infrastructure improvements
to serve the disadvantaged, unincorporated community.

(e) A plan adopted pursuant to this section shall specify a date
upon which the division of taxes described in subdivision (d) shall
terminate.

(f) A plan adopted pursuant to this section may include a
provision for the issuance of indebtedness. Any indebtedness shall
be issued in conformity with Articles 4.5 (commencing with
Section 53506) and 5 (commencing with Section 53510) of Chapter
3 of Part 1 of Division 2 of Title 5 of the Government Code or the
principal act of the special district.

(g) Any plan adopted under this section shall not result in a
reduction of property tax revenues allocated to any school entity
as defined in subdivision (f) of Section 95.