BILL NUMBER: AB 851 INTRODUCED
BILL TEXT
INTRODUCED BY Assembly Member Mayes
FEBRUARY 26, 2015
An act to amend Sections 56658, 56885.5, and 57405 of, to add
Sections 56653.1, 56770, 56804, 56813, 56814, 56815, and 57426 to,
and to repeal Sections 57401, 57402, 57404, 57409, 57410, 57416,
57417, 57423, and 57424 of, the Government Code, and to amend Section
99 of the Revenue and Taxation Code, relating to local government.
LEGISLATIVE COUNSEL'S DIGEST
AB 851, as introduced, Mayes. Local government: organization:
disincorporations.
(1) 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, in the case of a disincorporation or
reorganization that includes a disincorporation, require the plan for
services to include specific provisions, including, among others, an
enumeration and description of the services currently provided by
the city proposed for disincorporation and an outline of current
retirement obligations, as specified.
(2) The act requires a petitioner or legislative body desiring to
initiate proceedings to submit an application to the executive
officer of the local agency formation commission, and requires the
local agency formation commission, with regard to an application that
includes an incorporation, to immediately notify all affected local
agencies and any applicable state agency, as specified.
This bill would extend that requirement to an application that
includes a disincorporation.
(3) Existing law prohibits the commission from approving or
conditionally approving a proposal for an incorporation unless the
commission finds, among other things, that the proposal is consistent
with the intent of the act, the incorporation is consistent with the
spheres of influence of affected local agencies, and the proposed
city is expected to receive revenues sufficient to provide public
services and facilities and a reasonable reserve during the three
fiscal years following incorporation.
This bill would additionally prohibit the commission from
approving or conditionally approving a proposal that includes a
disincorporation unless the commission finds, among other things,
that the disincorporation is consistent with the intent of the act,
the disincorporation will address necessary changes to spheres of
influence of affected agencies, and the service responsibilities of
the city proposed for disincorporation have been assigned, as
specified.
(4) Existing law requires the executive officer of the commission
to prepare a comprehensive fiscal analysis for any proposal that
includes an incorporation, as specified.
This bill would additionally require the executive officer to
prepare a comprehensive fiscal analysis for any proposal that
includes a disincorporation, as specified.
(5) Existing law requires the commission to determine the amount
of property tax revenue to be exchanged by the affected local agency
for a proposal that includes the incorporation of a city, and sets
forth the procedures to be followed in making that determination.
This bill would additionally require the commission to determine
the amount of property tax revenue to be exchanged by the affected
city and any successor agency or affected local agency for a proposal
that includes a disincorporation of a city, and would set forth the
procedures to be followed in making that determination.
The bill would additionally require the commission to determine,
where the proposal includes the disincorporation of a city with the
assignment of property tax revenues to a successor agency, the
increase of the appropriations limit for the successor agency or
agencies, if the successor agency or agencies are existing entities,
or the appropriations limit for a new special district, as specified.
The bill would state the intent of the Legislature that a proposal
that includes a disincorporation of a city result in a determination
that the debt or contractual obligations and responsibilities of the
city being disincorporated be the responsibility of the same
territory for repayment. The bill would require, prior to issuance of
a certificate for filing for a proposal that includes a
disincorporation, specified information relating to the debts and
contractual obligations of the city being disincorporated.
(6) Existing law authorizes the commission, in approving a
disincorporation of a city, the dissolution of a district, or the
reorganization or consolidation of agencies that result in the
dissolution of one or more districts or disincorporation of one or
more cities, to make the approval conditional upon the agency being
dissolved not approving any increase in compensation or benefits for
specified officers of the agency, or appropriating, encumbering,
expending, or otherwise obligating any revenue of the agency beyond
that provided in the current budget at the time the dissolution is
approved by the commission, unless it first finds that an emergency
exists.
This bill would modify this provision to authorize the commission
to make the approval conditional upon a condition prohibiting the
district that is being dissolved or the city that is being
disincorporated from approving any increase in compensation or
benefits for specified officers of the agency, or appropriating,
encumbering, expending, or otherwise obligating any revenue of the
agency beyond that provided in the current budget at the time the
dissolution is approved by the commission, unless it first finds that
an emergency exists.
The act also authorizes the commission to require a single
question appearing on the ballot upon issues of annexation and
reorganization in any election at which the questions of annexation
and district reorganization or incorporation and district
reorganization are to be considered at the same time.
This bill would additionally apply these provisions to a
disincorporation and district reorganization.
(7) Existing law requires every public officer of a city being
disincorporated, prior to the effective date of the disincorporation,
to turn the public property in his or her possession over to the
board of supervisors.
This bill would repeal this provision.
(8) The act requires the commission, after ascertaining that the
disincorporation has carried, to determine and certify in a written
statement to the board of supervisors the indebtedness of the city,
the amount of money in its treasury, and the amount of any tax levy
or other obligation due the city that is unpaid or has not been
collected.
This bill would repeal this provision.
(9) Existing law requires the board of supervisors to make
specified determinations if the commission does not provide the board
with a statement of those determinations.
This bill would repeal this provision.
(10) Existing law requires the tax collector to collect any tax
that has been levied by a disincorporated city that remains
uncollected when due and pay it into the county treasury.
This bill would provide that the tax collected and paid into the
county treasury is on behalf of the designated successor agency or
county to wind up affairs of the disincorporated city.
(11) Existing law requires the board of supervisors of a county to
cause taxes to be levied and collected from within the territory
formerly included within a disincorporated city, if there is not
sufficient money in the treasury of a disincorporated city to the
credit of the special fund to pay any city indebtedness as it becomes
due. Existing law provides that any taxes levied pursuant to this
provision are to be assessed, levied, and collected in the same
manner and at the same time as other county taxes, and are additional
taxes upon the property included within the territory of the
disincorporated city.
This bill would repeal these provisions.
(12) Existing law requires the board of supervisors to levy a
special tax upon all property within the disincorporated city if the
revenues from specified public utilities are not sufficient for the
administration, conduct, or improvement of the public utility.
Existing law requires all sums collected to be placed in a separate
fund in the county treasury for the administration, conduct, and
improvement of the public utility for which the tax is levied.
This bill would repeal these provisions.
(13) Existing law requires the board of supervisors to annually,
at the time other county taxes are levied and collected, to levy and
collect a special tax on the remainder of the territory of a
disincorporated city sufficient to pay the balance of the debt, and
pay that sum to the city treasurer. Existing law requires the city
treasurer to pay the bonded indebtedness as it becomes due with the
proceeds of those taxes.
This bill would repeal these provisions.
(14) Existing law provides that on and after the effective date of
a disincorporation, the territory of the disincorporated city, all
inhabitants within the territory, and all persons formerly entitled
to vote by reason of residing within the territory cease to be
subject to the jurisdiction of the disincorporated city and have none
of the rights or duties of inhabitants or voters of a city.
This bill would additionally provide that as of the effective date
of a disincorporation, the general plan of the general plan of the
disincorporated city that was in effect immediately prior to the
effective date of the disincorporation constitutes the community plan
of the county for the territory of the disincorporated city, the
zoning ordinances of the disincorporation that were in effect
immediately prior to the effective date of the disincorporation
constitute the zoning ordinances of the county for that territory,
and any conditional use permit or legal nonconforming use that was in
place immediately prior to the effective date of the
disincorporation remains in force pursuant to the community plan and
zoning ordinances. The bill would provide that any use of land that
was authorized under the general plan and zoning ordinances
immediately prior to the effective date of the disincorporation
continues to be authorized, consistent with the requirements of that
community plan and those zoning ordinances, for at least 10 years
following the effective date of the disincorporation, as specified.
The bill would additionally require the board of supervisors of the
affected county to, within 90 days of the effective date of the
disincorporation, adopt an expedited permit process relating to
business, development, and health and safety permits for the
territory of the disincorporated city, as specified.
(15) Existing law requires a county auditor to adjust the
allocation of property tax revenues for local agencies whose service
area or service responsibility may be altered by specified
jurisdictional changes.
This bill would include a city disincorporation and dissolved
district in those jurisdictional changes. By increasing the duties of
the county auditor, this bill would impose a state-mandated local
program.
(16) The California Constitution requires the state to reimburse
local agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that, if the Commission on State Mandates
determines that the bill contains costs mandated by the state,
reimbursement for those costs shall be made pursuant to these
statutory provisions.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 56653.1 is added to the Government Code, to
read:
56653.1. In the case of a disincorporation or reorganization that
includes a disincorporation, the plan for services required by
subdivision (a) of Section 56653 shall include the following:
(a) An enumeration and description of the services currently
provided by the city proposed for disincorporation and an
identification of the entity or entities proposed to assume
responsibility for the services following completion of
disincorporation.
(b) An enumeration and description of each service proposed to be
discontinued, the current financing of the service or services, and
any method of financing proposed by the successor agency or agencies.
(c) A delineation of any existing financing of services currently
provided to include, but not be limited to, bonds, assessments,
community facility district governance, general taxes, special taxes,
other charges, and joint powers authorities or agreements.
(d) An indication of any current bankruptcy proceeding, including,
but not limited to, status and exit plan.
(e) An indication of any current order by any agency, department,
office, or other division of the state, including but not limited to,
a cease and desist order or water prohibition order.
(f) An outline of current retirement obligations, actuarially
determined unfunded liability, and any documentation related to
termination of public retirement contract provisions.
(g) A written acknowledgment from each affected local agency
proposed to assume services from the city proposed for
disincorporation.
(h) Any other information that the executive officer may deem
necessary to fully consider the disincorporation proposal.
SEC. 2. Section 56658 of the Government Code is amended to read:
56658. (a) Any petitioner or legislative body desiring to
initiate proceedings shall submit an application to the executive
officer of the principal county.
(b) (1) Immediately after receiving an application and before
issuing a certificate of filing, the executive officer shall give
mailed notice that the application has been received to each affected
agency, the county committee on school district organization, and
each school superintendent whose school district overlies the
affected territory. The notice shall generally describe the proposal
and the affected territory. The executive officer shall not be
required to give notice pursuant to this subdivision if a local
agency has already given notice pursuant to subdivision (c) of
Section 56654.
(2) It is the intent of the Legislature that an
a proposal for incorporation proposal
or disincorporation shall be processed in a timely manner.
With regard to an application that includes an incorporation or
disincorporation , the executive officer shall immediately
notify all affected local agencies and any applicable state agencies
by mail and request the affected agencies to submit the required data
to the commission within a reasonable timeframe established by the
executive officer. Each affected agency shall respond to the
executive officer within 15 days acknowledging receipt of the
request. Each affected local agency and the officers and departments
thereof shall submit the required data to the executive officer
within the timelines established by the executive officer. Each
affected state agency and the officers and departments thereof shall
submit the required data to the executive officer within the
timelines agreed upon by the executive officer and the affected state
departments.
(3) If a special district is, or as a result of a proposal will
be, located in more than one county, the executive officer of the
principal county shall immediately give the executive officer of each
other affected county mailed notice that the application has been
received. The notice shall generally describe the proposal and the
affected territory.
(c) Except when a commission is the lead agency pursuant to
Section 21067 of the Public Resources Code, the executive officer
shall determine within 30 days of receiving an application whether
the application is complete and acceptable for filing or whether the
application is incomplete.
(d) The executive officer shall not accept an application for
filing and issue a certificate of filing for at least 20 days after
giving the mailed notice required by subdivision (b). The executive
officer shall not be required to comply with this subdivision in the
case of an application which meets the requirements of Section 56662
or in the case of an application for which a local agency has already
given notice pursuant to subdivision (c) of Section 56654.
(e) If the appropriate fees have been paid, an application shall
be deemed accepted for filing if no determination has been made by
the executive officer within the 30-day period. An executive officer
shall accept for filing, and file, any application submitted in the
form prescribed by the commission and containing all of the
information and data required pursuant to Section 56652.
(f) When an application is accepted for filing, the executive
officer shall immediately issue a certificate of filing to the
applicant. A certificate of filing shall be in the form prescribed by
the executive officer and shall specify the date upon which the
proposal shall be heard by the commission. From the date of issuance
of a certificate of filing, or the date upon which an application is
deemed to have been accepted, whichever is earlier, an application
shall be deemed filed pursuant to this division.
(g) If an application is determined not to be complete, the
executive officer shall immediately transmit that determination to
the applicant specifying those parts of the application which are
incomplete and the manner in which they can be made complete.
(h) Following the issuance of the certificate of filing, the
executive officer shall proceed to set the proposal for hearing and
give published notice thereof as provided in this part. The date of
the hearing shall be not more than 90 days after issuance of the
certificate of filing or after the application is deemed to have been
accepted, whichever is earlier. Notwithstanding Section 56106, the
date for conducting the hearing, as determined pursuant to this
subdivision, is mandatory.
SEC. 3. Section 56770 is added to the Government Code, to read:
56770. The commission shall not approve or conditionally approve
any proposal that includes a disincorporation, unless, based on the
entire record, the commission makes all of the following
determinations:
(a) The proposed disincorporation is consistent with the intent of
this division, including, but not limited to, the policies of
Sections 56001, 56300, 56301, and 56377 to provide for a sustainable
system for the delivery of services.
(b) The proposal has reviewed the municipal service reviews and
spheres of influence of the affected local agencies, and the
disincorporation will address the necessary changes to those spheres
of influence.
(c) It has reviewed the comprehensive fiscal analysis prepared
pursuant to Section 56804.
(d) It has reviewed the executive officer's report and
recommendation prepared pursuant to Section 56665, and the oral or
written testimony presented at its public hearing.
(e) The service responsibilities of the city proposed for
disincorporation have been assigned through terms and conditions
authorized by Sections 56885.5, 56886, and 57300, and Chapter 5
(commencing with Section 57400) of Part 5.
SEC. 4. Section 56804 is added to the Government Code, to read:
56804. For any proposal that includes a disincorporation, the
executive officer shall prepare, or cause to be prepared by contract,
a comprehensive fiscal analysis. This analysis shall become part of
the report required pursuant to Section 56665. Data used for the
analysis shall be from the most recent fiscal year for which data is
available, preceding the issuances of the certificate of filing. When
data requested by the executive officer in the notice to affected
agencies, pursuant to paragraph (2) of subdivision (b) of Section
56658, is unavailable, the analysis shall document the source and
methodology of the data used. The analysis shall review and document
each of the following:
(a) The direct and indirect costs incurred by the city proposed
for disincorporation for providing public services and facilities
during the three fiscal years immediately preceding the submittal of
the proposal for disincorporation.
(b) The ability of the entities proposed to assume the obligations
of the city being disincorporated and the related costs, including
all actual direct and indirect costs, in provision of existing
services.
(c) When determining costs, the executive officer shall also
include all direct and indirect costs of any public services that are
proposed to be transferred to state agencies for delivery.
(d) The revenues of the city being disincorporated during the
three fiscal years immediately preceding the initiation of the
disincorporation proposal.
(e) Any other information and analysis needed to make the findings
required by Section 56770.
SEC. 5. Section 56813 is added to the Government Code, to read:
56813. (a) If the proposal includes the disincorporation of a
city, as defined in Section 56034, the commission shall determine the
amount of property tax revenue to be exchanged by the affected city
and any successor agency or affected local agency pursuant to this
section.
(b) The commission shall notify the county auditor of the
proposal, the affected local agencies to be extinguished, and the
services proposed to be transferred to new jurisdictions, and
identify for the auditor the changes to occur.
(c) If the proposal would not transfer all of the service
responsibilities of the disincorporating city to the affected county
or to a single affected agency, the commission and the county auditor
shall do all of the following:
(1) The county auditor shall determine the proportion that the
amount of property tax revenue derived by the city being
disincorporated pursuant to subdivision (b) of Section 93 of the
Revenue and Taxation Code bears to the total amount of revenue from
all sources, available for general purposes, received by the city
being disincorporated in the prior fiscal year and provide their
response in compliance with paragraph (2) of subdivision (b) of
Section 56658. For purposes of making this determination and the
determination required by paragraph (3), "total amount of revenue
from all sources available for general purposes" means the total
amount of revenue which the city being disincorporating may use on a
discretionary basis for any purpose and does not include any of the
following:
(A) Revenue that, by statute, is required to be used for a
specific purpose.
(B) Revenue from fees, charges, or assessments that are levied to
specifically offset the cost of particular services and that do not
exceed the cost reasonably borne in providing these services.
(C) Revenue received from the federal government that is required
to be used for a specific purpose.
(2) The commission shall determine, based on information submitted
by the city being disincorporated, an amount equal to the total net
cost to that city during the prior fiscal year of providing those
services that an affected agency will assume within the area subject
to the proposal. For purposes of this paragraph, "total net cost"
means the total direct and indirect costs that were funded by general
purpose revenues of the city being disincorporated and excludes any
portion of the total cost that was funded by any revenues of that
agency that are specified in subparagraphs (A), (B), and (C) of
paragraph (1).
(3) For the services to be transferred to each affected local
agency, the commission shall multiply the amount determined pursuant
to paragraph (2) by the proportion determined pursuant to paragraph
(1) to derive the amount of property tax revenue used to provide
services by the city being disincorporated during the prior fiscal
year within the area subject to the proposal. The county auditor
shall adjust the amount so determined by the annual tax increment
pursuant to the procedures set forth in Chapter 6 (commencing with
Section 95) of Part 0.5 of Division 1 of the Revenue and Taxation
Code, to the fiscal year in which the affected agency receives its
next allocation of property taxes.
(d) If the proposal for disincorporation would transfer all of the
service responsibilities of the city proposed for disincorporation,
other than those that are proposed to be discontinued, to a single
successor agency, the commission shall request the auditor to
determine the property tax revenue allocated to the city being
disincorporated by tax rate area, or portion thereof, and transmit
that information to the commission.
(e) The executive officer shall notify the auditor of the amount
determined pursuant to subdivision (c) or (d), as the case may be,
and, where applicable, the period of time within which and the
procedure by which the transfer of property tax revenues will be
effected pursuant to this section, at the time the executive officer
records a certificate of completion pursuant to Section 57203 for any
proposal described in subdivision (a), and the auditor shall
transfer that amount to the affected agency or agencies that will
assume the services as determined by the commission. Any property tax
not transferred to an affected agency pursuant to subdivision (c)
shall be transferred to the affected county.
(f) For purposes of this section, "prior fiscal year" means the
most recent fiscal year preceding the issuance of the certificate of
filing for which data is available on actual direct and indirect
costs and revenues needed to perform the calculations required by
this section.
(g) Any action brought by a city or district to contest any of the
determinations of the county auditor or the commission with regard
to the amount of property tax revenue to be exchanged by the affected
local agencies pursuant to this section shall be commenced within
three years of the effective date of the disincorporation.
SEC. 6. Section 56814 is added to the Government Code, to read:
56814. If the proposal includes the disincorporation of a city,
as defined in Section 56034, with the assignment of property tax
revenues to a successor agency the commission shall make the
following determinations, as appropriate:
(a) The increase of the appropriations limit for the successor
agency, or agencies, if the successor agency or agencies is an
existing entity.
(b) The appropriations limit for a new special district through a
formation process as defined by Section 56810.
SEC. 7. Section 56815 is added to the Government Code, to read:
56815. (a) It is the intent of the Legislature that any proposal
that includes the disincorporation of a city result in a
determination that the debt or contractual obligations and
responsibilities of the city being disincorporated shall be the
responsibility of that same territory for repayment. To ascertain
this information, the following shall be provided to the commission
prior to the issuance of a certificate of filing for a
disincorporation proposal, pursuant to Sections 56651 and 56658:
(1) The city shall provide a written statement that determines and
certifies all of the following:
(A) The indebtedness of the city.
(B) The amount of money in the city's treasury.
(C) The amount of any tax levy or other obligation due the city
that is unpaid or has not been collected.
(D) The amount of unfunded pension liability of all classes in a
public retirement system, and the liability for other postemployment
benefits.
(2) The county treasurer shall identify all taxes levied and
uncollected.
(3) A written statement of all redevelopment successor agency
designations and current balances and obligations.
(b) The commission shall not approve a proposal that includes a
disincorporation unless it makes the determinations required by
Section 56770.
SEC. 8. Section 56885.5 of the Government Code is amended to read:
56885.5. (a) In any commission order giving approval to any
change of organization or reorganization, the commission may make
that approval conditional upon any of the following factors:
(1) Any of the conditions set forth in Section 56886.
(2) The initiation, conduct, or completion of proceedings for
another change of organization or a reorganization.
(3) The approval or disapproval, with or without election, as may
be provided by this division, of any resolution or ordinance ordering
that change of organization or reorganization.
(4) With respect to any commission determination to approve the
disincorporation of a city, the dissolution of a district, or the
reorganization or consolidation of agencies which
that results in the dissolution of one or more districts
or the disincorporation of one or more cities, a condition
prohibiting an agency that prohibits a district that
is being dissolved from taking any of the following actions,
unless it first finds that an emergency situation exists as defined
in Section 54956.5 , or if the governing body of the successor
agency or agencies, as designated by the commission,
approves :
(A) Approving any increase in compensation or benefits for members
of the governing board, its officers, or the executive officer of
the agency.
(B) Appropriating, encumbering, expending, or otherwise
obligating, any revenue of the agency beyond that provided in the
current budget at the time the commission approves the
dissolution is approved by the commission. or
disincorporation.
(b) If the commission so conditions its approval, the commission
may order that any further action pursuant to this division be
continued and held in abeyance for the period of time designated by
the commission, not to exceed six months from the date of that
conditional approval.
(c) The commission order may also provide that any election called
upon any change of organization or reorganization shall be called,
held, and conducted before, upon the same date as, or after the date
of any election to be called, held, and conducted upon any other
change of organization or reorganization.
(d) The commission order may also provide that in any election at
which the questions of annexation and district reorganization
or or, incorporation and district
reorganization , or disincorporation and district
reorganization are to be considered at the same time, there
shall be a single question appearing on the ballot upon the issues of
annexation and district reorganization or incorporation and district
reorganization.
SEC. 9. Section 57401 of the Government Code is repealed.
57401. Prior to the effective date of the disincorporation, every
public officer of the city shall turn over to the board of
supervisors the public property in his or her possession.
SEC. 10. Section 57402 of the Government Code is repealed.
57402. After ascertaining that disincorporation has carried, the
commission shall determine and certify in a written statement to the
board of supervisors the indebtedness of the city, the amount of
money in its treasury, and the amount of any tax levy or other
obligation due the city which is unpaid or has not been collected.
SEC. 11. Section 57404 of the Government Code is repealed.
57404. If the commission does not provide the board of
supervisors with the certified statement required by Section 57402,
the board shall make the determinations provided for in that section.
SEC. 12. Section 57405 of the Government Code is amended to read:
57405. If a tax has been levied by the disincorporated city and
remains uncollected, the county tax collector shall collect it when
due and pay it into the county treasury on behalf of the
designated successor agency or county to wind up the affairs of the
disincorporated city .
SEC. 13. Section 57409 of the Government Code is repealed.
57409. If there is not sufficient money in the treasury to the
credit of the special fund to pay any city indebtedness, the board of
supervisors shall cause to be levied, and there shall be collected
from the territory formerly included within the city, taxes
sufficient to pay the indebtedness as it becomes due.
SEC. 14. Section 57410 of the Government Code is repealed.
57410. Any taxes levied pursuant to Section 57409 shall be
assessed, levied, and collected in the same manner and at the same
time as other county taxes, and are additional taxes upon the
property included within the territory of the disincorporated city.
SEC. 15. Section 57416 of the Government Code is repealed.
57416. If the revenues from any public utility referred to in
Section 57415 are not sufficient for its administration, conduct, or
improvement, the board of supervisors shall levy a special tax upon
all property within the disincorporated city. The special tax shall
be levied upon the assessed value of the property as shown by the
equalized assessment roll in effect on the first day of March of that
year, and collected in the same manner and form of other county
taxes.
SEC. 16. Section 57417 of the Government Code is repealed.
57417. All sums collected shall be placed in a separate fund in
the county treasury for the administration, conduct, and improvement
of the public utility for which the tax is levied.
SEC. 17. Section 57423 of the Government Code is repealed.
57423. Annually, at the time other county taxes are levied and
collected, the board of supervisors shall levy and collect a special
tax on the remainder of the territory sufficient to pay the balance
of the debt, and pay this sum to the city treasurer.
SEC. 18. Section 57424 of the Government Code is repealed.
57424. With the proceeds of those taxes, the city treasurer shall
pay the bonded indebtedness as it becomes due.
SEC. 19. Section 57426 is added to the Government Code, to read:
57426. (a) As of the effective date of the disincorporation, all
of the following apply:
(1) The general plan of the disincorporated city that was in
effect immediately prior to the effective date of the
disincorporation shall constitute the community plan of the county
for the territory of the disincorporated city.
(2) The zoning ordinances of the disincorporated city that were in
effect immediately prior to the effective date of the
disincorporation shall constitute the zoning ordinances of the county
for that territory.
(3) Any conditional use permit or legal nonconforming use that was
in place immediately prior to the effective date of the
disincorporation shall remain in force pursuant to the community plan
and zoning ordinances.
(4) Any use of land that was authorized under the general plan and
zoning ordinances immediately prior to the effective date of the
disincorporation shall continue to be authorized, consistent with the
requirements of that community plan and those zoning ordinances, for
at least 10 years following the effective date of the
disincorporation, any longer period required by the California
Constitution or United States Constitution, or any longer period to
the extent permitted by the general plan and zoning ordinances of the
county applicable to that territory following that 10-year period.
(b) The board of supervisors of the affected county shall, within
90 days of the effective date of disincorporation, adopt an expedited
permit process relating to business, development, and health and
safety permits for the territory of the disincorporated city that is
comparable to the permit process that existing in that city
immediately preceding disincorporation.
SEC. 20. Section 99 of the Revenue and Taxation Code is amended to
read:
99. (a) For the purposes of the computations required by this
chapter:
(1) In the case of a jurisdictional change, other than a city
incorporation , city disincorporation, or a formation of a
district as defined in Section 2215, the auditor shall adjust the
allocation of property tax revenue determined pursuant to Section 96
or 96.1, or the annual tax increment determined pursuant to Section
96.5, for local agencies whose service area or service responsibility
would be altered by the jurisdictional change, as determined
pursuant to subdivision (b) or (c).
(2) In the case of a city incorporation or disincorporation
, the auditor shall assign the allocation of property tax
revenues determined pursuant to Section 56810 of the Government Code
and the adjustments in tax revenues that may occur pursuant to
Section 56815 of the Government Code to the newly formed city or
district and shall make the adjustment as determined by Section 56810
in the allocation of property tax revenue determined pursuant to
Section 96 or 96.1 for each local agency whose service area or
service responsibilities would be altered by the incorporation.
(3) In the case of a formation of a district as defined in Section
2215, the auditor shall assign the allocation of property tax
revenues determined pursuant to Section 56810 of the Government Code
to the district and shall make the adjustment as determined by
Section 56810 , or for the disincorporated city or
dissolved district as determined by Section 56813, in the
allocation of property tax revenue determined pursuant to Section 96
or 96.1 for each local agency whose service area or service
responsibilities would be altered by the formation.
change of organization.
(b) Upon the filing of an application or a resolution pursuant to
the Cortese-Knox-Hertzberg Local Government Reorganization Act of
2000 (Division 3 (commencing with Section 56000) of Title 5 of the
Government Code), but prior to the issuance of a certificate of
filing, the executive officer shall give notice of the filing to the
assessor and auditor of each county within which the territory
subject to the jurisdictional change is located. This notice shall
specify each local agency whose service area or responsibility will
be altered by the jurisdictional change.
(1) (A) The county assessor shall provide to the
county auditor, within 30 days of the notice of filing, a report
which identifies the assessed valuations for the territory subject to
the jurisdictional change and the tax rate area or areas in which
the territory exists.
(B) The auditor shall estimate the amount of property tax revenue
generated within the territory that is the subject of the
jurisdictional change during the current fiscal year.
(2) The auditor shall estimate what proportion of the property tax
revenue determined pursuant to paragraph (1) is attributable to each
local agency pursuant to Sections 96.1 and 96.5.
(3) Within 45 days of notice of the filing of an application or
resolution, the auditor shall notify the governing body of each local
agency whose service area or service responsibility will be altered
by the jurisdictional change of the amount of, and allocation factors
with respect to, property tax revenue estimated pursuant to
paragraph (2) that is subject to a negotiated exchange.
(4) Upon receipt of the estimates pursuant to paragraph (3), the
local agencies shall commence negotiations to determine the amount of
property tax revenues to be exchanged between and among the local
agencies. Except as otherwise provided, this negotiation period shall
not exceed 60 days. If a local agency involved in these negotiations
notifies the other local agencies, the county auditor, and the local
agency formation commission in writing of its desire to extend the
negotiating period, the negotiating period shall be 90 days.
The exchange may be limited to an exchange of property tax
revenues from the annual tax increment generated in the area subject
to the jurisdictional change and attributable to the local agencies
whose service area or service responsibilities will be altered by the
proposed jurisdictional change. The final exchange resolution shall
specify how the annual tax increment shall be allocated in future
years.
(5) In the event that a jurisdictional change would affect the
service area or service responsibility of one or more special
districts, the board of supervisors of the county or counties in
which the districts are located shall, on behalf of the district or
districts, negotiate any exchange of property tax revenues. Prior to
entering into negotiation on behalf of a district for the exchange of
property tax revenue, the board shall consult with the affected
district. The consultation shall include, at a minimum, notification
to each member and executive officer of the district board of the
pending consultation and provision of adequate opportunity to comment
on the negotiation.
(6) Notwithstanding any other provision of law, the executive
officer shall not issue a certificate of filing pursuant to Section
56658 of the Government Code until the local agencies included in the
property tax revenue exchange negotiation, within the negotiation
period, present resolutions adopted by each such county and city
whereby each county and city agrees to accept the exchange of
property tax revenues.
(7) In the event that the commission modifies the proposal or its
resolution of determination, any local agency whose service area or
service responsibility would be altered by the proposed
jurisdictional change may request, and the executive officer shall
grant, 30 days for the affected agencies, pursuant to paragraph (4),
to renegotiate an exchange of property tax revenues. Notwithstanding
the time period specified in paragraph (4), if the resolutions
required pursuant to paragraph (6) are not presented to the executive
officer within the 30-day period, all proceedings of the
jurisdictional change shall automatically be terminated.
(8) In the case of a jurisdictional change that consists of a city'
s qualified annexation of unincorporated territory, an exchange of
property tax revenues between the city and the county shall be
determined in accordance with subdivision (e) if that exchange of
revenues is not otherwise determined pursuant to either of the
following:
(A) Negotiations completed within the applicable period or periods
as prescribed by this subdivision.
(B) A master property tax exchange agreement among those local
agencies, as described in subdivision (d).
For purposes of this paragraph, a qualified annexation of
unincorporated territory means an annexation, as so described, for
which an application or a resolution was filed on or after January 1,
1998, and on or before January 1, 2015.
(9) No later than the date on which the certificate of completion
of the jurisdictional change is recorded with the county recorder,
the executive officer shall notify the auditor or auditors of the
exchange of property tax revenues and the auditor or auditors shall
make the appropriate adjustments as provided in subdivision (a).
(c) Whenever a jurisdictional change is not required to be
reviewed and approved by a local agency formation commission, the
local agencies whose service area or service responsibilities would
be altered by the proposed change, shall give notice to the State
Board of Equalization and the assessor and auditor of each county
within which the territory subject to the jurisdictional change is
located. This notice shall specify each local agency whose service
area or responsibility will be altered by the jurisdictional change
and request the auditor and assessor to make the determinations
required pursuant to paragraphs (1) and (2) of subdivision (b). Upon
notification by the auditor of the amount of, and allocation factors
with respect to, property tax subject to exchange, the local
agencies, pursuant to the provisions of paragraphs (4) and (6) of
subdivision (b), shall determine the amount of property tax revenues
to be exchanged between and among the local agencies. Notwithstanding
any other provision of law, no such jurisdictional change shall
become effective until each county and city included in these
negotiations agrees, by resolution, to accept the negotiated exchange
of property tax revenues. The exchange may be limited to an exchange
of property tax revenue from the annual tax increment generated in
the area subject to the jurisdictional change and attributable to the
local agencies whose service area or service responsibilities will
be altered by the proposed jurisdictional change. The final exchange
resolution shall specify how the annual tax increment shall be
allocated in future years. Upon the adoption of the resolutions
required pursuant to this section, the adopting agencies shall notify
the auditor who shall make the appropriate adjustments as provided
in subdivision (a). Adjustments in property tax allocations made as
the result of a city or library district withdrawing from a county
free library system pursuant to Section 19116 of the Education Code
shall be made pursuant to Section 19116 of the Education Code, and
this subdivision shall not apply.
(d) With respect to adjustments in the allocation of property
taxes pursuant to this section, a county and any local agency or
agencies within the county may develop and adopt a master property
tax transfer agreement. The agreement may be revised from time to
time by the parties subject to the agreement.
(e) (1) An exchange of property tax revenues that is required by
paragraph (8) of subdivision (b) to be determined pursuant to this
subdivision shall be determined in accordance with all of the
following:
(A) The city and the county shall mutually select a third-party
consultant to perform a comprehensive, independent fiscal analysis,
funded in equal portions by the city and the county, that specifies
estimates of all tax revenues that will be derived from the annexed
territory and the costs of city and county services with respect to
the annexed territory. The analysis shall be completed within a
period not to exceed 30 days, and shall be based upon the general
plan or adopted plans and policies of the annexing city and the
intended uses for the annexed territory. If, upon the completion of
the analysis period, no exchange of property tax revenues is agreed
upon by the city and the county, subparagraph (B) shall apply.
(B) The city and the county shall mutually select a mediator,
funded in equal portions by those agencies, to perform mediation for
a period not to exceed 30 days. If, upon the completion of the
mediation period, no exchange of property tax revenues is agreed upon
by the city and the county, subparagraph (C) shall apply.
(C) The city and the county shall mutually select an arbitrator,
funded in equal portions by those agencies, to conduct an advisory
arbitration with the city and the county for a period not to exceed
30 days. At the conclusion of this arbitration period, the city and
the county shall each present to the arbitrator its last and best
offer with respect to the exchange of property tax revenues. The
arbitrator shall select one of the offers and recommend that offer to
the governing bodies of the city and the county. If the governing
body of the city or the county rejects the recommended offer, it
shall do so during a public hearing, and shall, at the conclusion of
that hearing, make written findings of fact as to why the recommended
offer was not accepted.
(2) Proceedings under this subdivision shall be concluded no more
than 150 days after the auditor provides the notification pursuant to
paragraph (3) of subdivision (b), unless one of the periods
specified in this subdivision is extended by the mutual agreement of
the city and the county. Notwithstanding any other provision of law,
except for those conditions that are necessary to implement an
exchange of property tax revenues determined pursuant to this
subdivision, the local agency formation commission shall not impose
any fiscal conditions upon a city's qualified annexation of
unincorporated territory that is subject to this subdivision.
(f) Except as otherwise provided in subdivision (g), for the
purpose of determining the amount of property tax to be allocated in
the 1979-80 fiscal year and each fiscal year thereafter for those
local agencies that were affected by a jurisdictional change which
was filed with the State Board of Equalization after January 1, 1978,
but on or before January 1, 1979. The local agencies shall determine
by resolution the amount of property tax revenues to be exchanged
between and among the affected agencies and notify the auditor of the
determination.
(g) For the purpose of determining the amount of property tax to
be allocated in the 1979-80 fiscal year and each fiscal year
thereafter, for a city incorporation that was filed pursuant to
Sections 54900 to 54904 after January 1, 1978, but on or before
January 1, 1979, the amount of property tax revenue considered to
have been received by the jurisdiction for the 1978-79 fiscal year
shall be equal to two-thirds of the amount of property tax revenue
projected in the final local agency formation commission staff report
pertaining to the incorporation multiplied by the proportion that
the total amount of property tax revenue received by all
jurisdictions within the county for the 1978-79 fiscal year bears to
the total amount of property tax revenue received by all
jurisdictions within the county for the 1977-78 fiscal year. Except,
however, in the event that the final commission report did not
specify the amount of property tax revenue projected for that
incorporation, the commission shall by October 10 determine pursuant
to Section 54790.3 of the Government Code the amount of property tax
to be transferred to the city.
The provisions of this subdivision shall also apply to the
allocation of property taxes for the 1980-81 fiscal year and each
fiscal year thereafter for incorporations approved by the voters in
June 1979.
(h) For the purpose of the computations made pursuant to this
section, in the case of a district formation that was filed pursuant
to Sections 54900 to 54904, inclusive, of the Government Code after
January 1, 1978, but before January 1, 1979, the amount of property
tax to be allocated to the district for the 1979-80 fiscal year and
each fiscal year thereafter shall be determined pursuant to Section
54790.3 of the Government Code.
(i) For the purposes of the computations required by this chapter,
in the case of a jurisdictional change, other than a change
requiring an adjustment by the auditor pursuant to subdivision (a),
the auditor shall adjust the allocation of property tax revenue
determined pursuant to Section 96 or 96.1 or its predecessor section,
or the annual tax increment determined pursuant to Section 96.5 or
its predecessor section, for each local school district, community
college district, or county superintendent of schools whose service
area or service responsibility would be altered by the jurisdictional
change, as determined as follows:
(1) The governing body of each district, county superintendent of
schools, or county whose service areas or service responsibilities
would be altered by the change shall determine the amount of property
tax revenues to be exchanged between and among the affected
jurisdictions. This determination shall be adopted by each affected
jurisdiction by resolution. For the purpose of negotiation, the
county auditor shall furnish the parties and the county board of
education with an estimate of the property tax revenue subject to
negotiation.
(2) In the event that the affected jurisdictions are unable to
agree, within 60 days after the effective date of the jurisdictional
change, and if all the jurisdictions are wholly within one county,
the county board of education shall, by resolution, determine the
amount of property tax revenue to be exchanged. If the jurisdictions
are in more than one county, the State Board of Education shall, by
resolution, within 60 days after the effective date of the
jurisdictional change, determine the amount of property tax to be
exchanged.
(3) Upon adoption of any resolution pursuant to this subdivision,
the adopting jurisdictions or State Board of Education shall notify
the county auditor who shall make the appropriate adjustments as
provided in subdivision (a).
(j) For purposes of subdivision (i), the annexation by a community
college district of territory within a county not previously served
by a community college district is an alteration of service area. The
community college district and the county shall negotiate the
amount, if any, of property tax revenues to be exchanged. In these
negotiations, there shall be taken into consideration the amount of
revenue received from the timber yield tax and forest reserve
receipts by the community college district in the area not previously
served. In no event shall the property tax revenue to be exchanged
exceed the amount of property tax revenue collected prior to the
annexation for the purposes of paying tuition expenses of residents
enrolled in the community college district, adjusted each year by the
percentage change in population and the percentage change in the
cost of living, or per capita personal income, whichever is lower,
less the amount of revenue received by the community college district
in the annexed area from the timber yield tax and forest reserve
receipts.
(k) At any time after a jurisdictional change is effective, any of
the local agencies party to the agreement to exchange property tax
revenue may renegotiate the agreement with respect to the current
fiscal year or subsequent fiscal years, subject to approval by all
local agencies affected by the renegotiation.
SEC. 21. If the Commission on State Mandates determines that this
act contains costs mandated by the state, reimbursement to local
agencies and school districts for those costs shall be made pursuant
to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of
the Government Code.