Amended in Assembly August 18, 2014

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

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(Coauthors: Assembly Members Alejo and Waldron)

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February 22, 2013

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

LEGISLATIVE COUNSEL’S DIGEST

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

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Existing

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begin insert (1) end insert begin insert   end insert begin insert Existing end insert 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 begin delete territory. The bill would, end delete begin insert territory that, until January 1, 2025, end insert in the case of a change of organization or reorganization initiated by a local agency begin delete and consented to by each affected agency, end delete that includes a disadvantaged, unincorporated community, begin delete authorize end delete begin insert authorizes end insert a local agency to include in its resolution of application begin delete a end delete begin insert an annexation development end insert plan to improve or upgrade structures, roads, sewer or water facilities, or other infrastructure to serve the disadvantaged, unincorporated begin delete community and end delete begin insert community. This bill end insert would authorize the local agency formation commission to begin delete amend end delete begin insert approve end insert the proposal to include the formation of a special district begin insert or reorganization of a special district end insert , as specified. begin insert This bill would require an annexation plan to include certain information. end insert

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Existing

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begin insert (2) end insert begin insert   end insert begin insert Existing end insert 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 local agencies whose service area or service responsibility would be altered by the jurisdictional change, as specified.

This bill would begin insert , until January 1, 2025, end insert authorize a local agency that files a begin delete petition end delete begin insert resolution of application end insert 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 begin delete a end delete begin insert an annexation development end insert 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 begin delete between the respective affected local agencies and the special district. end delete begin insert as specified. end insert 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 begin insert end insert begin insert including any portion of a redevelopment project area, as specified, or end insert 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
begin delete incorporated into the approval of end delete begin insert considered by local agencies and
the local agency formation commission when evaluating the
proposal for end insert 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)  begin delete Only in end delete begin insert (1) end insert begin insert   end insert begin insert In end insert the case of a change of organization or
reorganization initiated by a local agency begin delete and consented to by each
affected agency, end delete that includes a disadvantaged, unincorporated
community as defined in Section begin delete 56033.5: end delete

begin delete (1) end delete begin delete   end delete begin delete A end delete begin insert 56033.5, a end insert begin insert end insert local agency may include in its resolution of
application for change of organization or reorganization begin delete a end delete begin insert an
annexation development end insert 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 district or reorganization of begin delete a end delete begin insert one or more existing end insert
special begin delete district end delete begin insert districts end insert with the begin insert consent of each end insert special district’s
begin delete consent. end delete begin insert governing body. end insert

begin insert

(2) The annexation development plan submitted pursuant to this
subdivision shall include information that demonstrates that the
formation or reorganization of the special district will provide all
of the following:

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(A) The necessary financial resources to improve or upgrade
structures, roads, sewer, or water facilities or other infrastructure.
The annexation development plan shall also clarify the local entity
that shall be responsible for the delivery and maintenance of the
services identified in the application.

end insert begin insert

(B) An estimated time frame for constructing and delivering the
services identified in the application.

end insert begin insert

(C) The governance, oversight, and long-term maintenance of
the services identified in the application after the initial costs are
recouped and the tax increment financing terminates.

end insert begin delete

(2)

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begin insert (3) end insert  If a local agency includes begin delete a end delete begin insert an annexation development end insert plan
pursuant to begin delete paragraph (1), end delete begin insert this subdivision, end insert a local agency
formation commission may begin delete amend end delete begin insert approve end insert the proposal for a
change of organization or reorganization to include the formation
of a special district or reorganization of a special district with the
special district’s consent, 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 and all required formation proceedings.

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(4) Pursuant to Section 56881, the commission shall include in
its resolution making determinations a description of the
annexation development plan, including, but not limited to, an
explanation of the proposed financing mechanism adopted pursuant
to Section 99.3 of the Revenue and Taxation Code, including, but
not limited to, any planned debt issuance associated with that
annexation development plan.

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(d)  begin delete Nothing in this section precludes end delete begin insert This section shall not
preclude end insert a local agency formation commission from considering
any other options or exercising its powers under Section 56375.

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(e) This section shall remain in effect only until January 1, 2025,
and as of that date is repealed.

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begin insert SEC. 3. end insert   

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begin insert Section 56653 is added to the end insert begin insert Government Code end insert begin insert , to
read: end insert

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begin insert 56653. end insert   

(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) This section shall become operative on January 1, 2025.

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begin delete SEC. 3. end delete
begin insert SEC. 4. end insert   

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

99.3.  

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

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

(3) “Territory” means all or part of the land that is included in
the begin delete petition end delete begin insert resolution of application end insert 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 resolution of application for a
change of organization or reorganization, and one or more other
begin insert consenting end insert local agencies that will improve or upgrade structures
to serve a disadvantaged, unincorporated community subject to
that begin delete petition, end delete begin insert resolution of application, end insert may agree on begin delete a end delete begin insert an
annexation development end insert plan for financing services and structures
pursuant to this section.

(d) The begin insert annexation development end insert 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
begin insert consenting end insert local agencies that consent to the begin insert annexation
development end insert 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 begin delete affected end delete begin insert consenting end insert 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 begin delete affected end delete begin insert consenting end insert 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 begin delete affected end delete
begin insert consenting end insert local agencies and school entities as taxes by or for the
begin delete affected end delete begin insert consenting end insert local agencies and school entities on all
property are paid.

(2) That portion of the levied taxes each year specified in the
begin delete adopted infrastructure financing plan end delete begin insert annexation development plan
adopted pursuant to subdivision (c) end insert for the city and each begin delete affected
taxing entity end delete begin insert consenting local agency end insert 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 or reorganized
with the special district’s consent pursuant to subdivision (c) of
Section 56653 of the Government Code that will finance the
infrastructure improvements begin insert , including, but not limited to, water,
wastewater, and stormwater systems and local streets, roads, and
sidewalks, end insert to serve the disadvantaged, unincorporated community.
begin insert A consenting local agency may advance funds to the special district
that is formed or reorganized pursuant to paragraph (2) of
subdivision (c) of Section 56653 of the Government Code. The
special district shall use those advanced funds solely for the
purposes specified in the annexation development plan adopted
pursuant to subdivision (c) and shall repay the consenting local
agency with revenue from the taxes received pursuant to this
subdivision. end insert

(e)  begin delete A end delete begin insert An annexation development end insert plan adopted pursuant to begin delete this
section end delete begin insert subdivision (c) end insert shall specify a date upon which the division
of taxes described in subdivision (d) shall terminate.

(f)  begin delete A end delete begin insert An annexation development end insert plan adopted pursuant to begin delete this
section end delete begin insert subdivision (c) end insert 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)  begin delete Any end delete begin insert An annexation development end insert plan adopted begin delete under this
section end delete begin insert pursuant to subdivision (c) end insert shall not result in a reduction
of property tax revenues allocated to any school entity as defined
in subdivision (f) of Section 95.

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(h) Any plan adopted pursuant to this section shall not include
any portion of a redevelopment project area which is or has been
previously created pursuant to Part 1 (commencing with Section
33000) of Division 24 of the Health and Safety Code.

end insert begin insert

(i) This section shall remain in effect only until January 1, 2025,
and as of that date is repealed.

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