AB 851, as amended, 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.
(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 3 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
begin delete agencyend delete 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
begin delete successor agency,end delete the increase of the appropriations limit for begin delete the successor agency or agencies,end delete if the successor begin delete agency or agencies areend delete existing begin delete entities,end delete
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 the city being disincorporated to provide a written
begin delete statement,end delete prior to issuance of a certificate for filing for a proposal that includes a begin delete disincorporation,end delete that includes
specified information relating to its debts and contractual obligations.
(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
begin delete a conditionend delete
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.
begin delete end delete 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
begin delete agencyend delete 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.
This bill would repeal this provision.
(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,
begin delete the general plan ofend delete
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 begin delete disincorporationend delete 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 for as long a period as may be required by the California Constitution or the United States Constitution.
(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 56653.1 is added to the Government
2Code, to read:
In the case of a disincorporation or reorganization
4that includes a disincorporation, the plan for services required by
5subdivision (a) of Section 56653 shall include the following:
6(a) An enumeration and description of the services currently
7provided by the city proposed for disincorporation and an
8identification of the entity or entities proposed to assume
9responsibility for the services following completion of
11(b) An enumeration and description of each service proposed
12to be discontinued or transferred, the current financing of the
13service or services, and any method of financing proposed by the
begin delete successor agency or agencies.end delete
15(c) A delineation of any existing financing of services currently
16provided to include, but not be limited to, bonds, assessments,
17community facility district governance, general taxes, special taxes,
18other charges, and joint powers authorities or agreements.
19(d) An indication of any current bankruptcy proceeding,
20including, but not limited to, status and exit plan.
21(e) An indication of any current order relating to services
22provided by the city proposed for disincorporation by any agency,
23department, office, or other division of the state, including, but
24not limited to, a cease and desist order or water prohibition order.
25(f) A written statement from each entity identified pursuant to
26subdivision (a) that it has received a copy of the plan for services
27submitted pursuant to this section.
28(g) Any other information that the executive officer may deem
29necessary to evaluate the plan for services submitted.
Section 56658 of the Government Code is amended
(a) Any petitioner or legislative body desiring to initiate
33proceedings shall submit an application to the executive officer of
34the principal county.
35(b) (1) Immediately after receiving an application and before
36issuing a certificate of filing, the executive officer shall give mailed
37notice that the application has been received to each affected
38agency, the county committee on school district organization, and
P7 1each school superintendent whose school district overlies the
2affected territory. The notice shall generally describe the proposal
3and the affected territory. The executive officer shall not be
4required to give notice pursuant to this subdivision if a local agency
5has already given notice pursuant to subdivision (c) of Section
7(2) It is the intent of the Legislature that a proposal for
8incorporation or disincorporation shall be processed in a timely
9manner. With regard to an application that includes an
10incorporation or disincorporation, the executive officer shall
11immediately notify all affected local agencies and any applicable
12state agencies by mail and request the affected agencies to submit
13the required data to the commission within a reasonable timeframe
14established by the executive officer. Each affected agency shall
15respond to the executive officer within 15 days acknowledging
16receipt of the request. Each affected local agency and the officers
17and departments thereof shall submit the required data to the
18executive officer within the timelines established by the executive
19officer. Each affected state agency and the officers and departments
20thereof shall submit the required data to the executive officer within
21the timelines agreed upon by the executive officer and the affected
23(3) If a special district is, or as a result of a proposal will be,
24located in more than one county, the executive officer of the
25principal county shall immediately give the executive officer of
26each other affected county mailed notice that the application has
27been received. The notice shall generally describe the proposal
28and the affected territory.
29(c) Except when a commission is the lead agency pursuant to
30Section 21067 of the Public Resources Code, the executive officer
31shall determine within 30 days of receiving an application whether
32the application is complete and acceptable for filing or whether
33the application is incomplete.
34(d) The executive officer shall not accept an application for
35filing and issue a certificate of filing for at least 20 days after giving
36the mailed notice required by subdivision (b). The executive officer
37shall not be required to comply with this subdivision in the case
38of an application which meets the requirements of Section 56662
39or in the case of an application for which a local agency has already
40given notice pursuant to subdivision (c) of Section 56654.
P8 1(e) If the appropriate fees have been paid, an application shall
2be deemed accepted for filing if no determination has been made
3by the executive officer within the 30-day period. An executive
4officer shall accept for filing, and file, any application submitted
5in the form prescribed by the commission and containing all of
6the information and data required pursuant to Section 56652.
7(f) When an application is accepted for filing, the executive
8officer shall immediately issue a certificate of filing to the
9applicant. A certificate of filing shall be in the form prescribed by
10the executive officer and shall specify the date upon which the
11proposal shall be heard by the commission. From the date of
12issuance of a certificate of filing, or the date upon which an
13application is deemed to have been accepted, whichever is earlier,
14an application shall be deemed filed pursuant to this division.
15(g) If an application is determined not to be complete, the
16executive officer shall immediately transmit that determination to
17the applicant specifying those parts of the application which are
18incomplete and the manner in which they can be made complete.
19(h) Following the issuance of the certificate of filing, the
20executive officer shall proceed to set the proposal for hearing and
21give published notice thereof as provided in this part. The date of
22the hearing shall be not more than 90 days after issuance of the
23certificate of filing or after the application is deemed to have been
24accepted, whichever is earlier. Notwithstanding Section 56106,
25the date for conducting the hearing, as determined pursuant to this
26subdivision, is mandatory.
Section 56770 is added to the Government Code, to
The commission shall not approve or conditionally
30approve any proposal that includes a disincorporation, unless,
31based on the entire record, the commission makes all of the
33(a) The proposed disincorporation is consistent with the intent
34of this division to provide for a sustainable system for the delivery
36(b) The commission has considered the service reviews of
37municipal services and spheres of influence of the affected local
38agencies, and the disincorporation will address the necessary
39changes to those spheres of influence, if any.
P9 1(c) It has reviewed the comprehensive fiscal analysis prepared
2pursuant to Section 56804.
3(d) It has reviewed the executive officer’s report and
4recommendation prepared pursuant to Section 56665, and the oral
5or written testimony presented at its public hearing.
6(e) The service responsibilities of the city proposed for
7disincorporation have been assigned through terms and conditions
8authorized by Sections 56885.5, 56886, and 57302, and Chapter
95 (commencing with Section 57400) of Part
begin delete 5 and the commission
10has approved a transition plan to provide those services, if one was
11requested by the executive officer.end delete
Section 56804 is added to the Government Code, to
For any proposal that includes a disincorporation, the
15executive officer shall prepare, or cause to be prepared by contract,
16a comprehensive fiscal analysis. This analysis shall become part
17of the report required pursuant to Section 56665. Data used for the
18analysis shall be from the most recent fiscal year for which data
19is available, preceding the issuances of the certificate of filing.
20When data requested by the executive officer in the notice to
21affected agencies, pursuant to paragraph (2) of subdivision (b) of
22Section 56658, is unavailable, the analysis shall document the
23source and methodology of the data used. The analysis shall review
24and document each of the following:
25(a) The direct and indirect costs incurred by the city proposed
26for disincorporation for providing public services and facilities
27during the three fiscal years immediately preceding the submittal
28of the proposal for disincorporation.
29(b) The sources of funding, if any, available to the entities
30proposed to assume the obligations of the city being
31disincorporated and the related costs, including all actual direct
32and indirect costs, in provision of existing services.
33(c) When determining costs, the executive officer shall also
34include all direct and indirect costs of any public services that are
35proposed to be transferred to state agencies for delivery.
36(d) The revenues of the city being disincorporated during the
37three fiscal years immediately preceding the initiation of the
39(e) Any other information and analysis needed to make the
40findings required by Section 56770.
Section 56813 is added to the Government Code, to
(a) If the proposal includes the disincorporation of a
4city, as defined in Section 56034, the commission shall determine
5the amount of property tax revenue to be exchanged by the affected
6city and any successor
begin delete agencyend delete or affected local agency pursuant
7to this section.
8(b) The commission shall notify the county auditor of the
9proposal, the affected local agencies to be extinguished, and the
10services proposed to be transferred to new jurisdictions, and
11identify for the auditor the changes to occur.
12(c) If the proposal would not
transfer all of the service
13responsibilities of the disincorporating city to the affected county
14or to a single affected agency, the commission and the county
15 auditor shall do all of the following:
16(1) The county auditor shall determine the proportion that the
17amount of property tax revenue derived by the city being
18disincorporated pursuant to subdivision (b) of Section 93 of the
19Revenue and Taxation Code bears to the total amount of revenue
20from all sources, available for general purposes, received by the
21city being disincorporated in the prior fiscal year and provide their
22response within 15 days of receiving notification from the
23commission pursuant to subdivision (b). For purposes of making
24this determination and the determination required by paragraph
25(3), “total amount of revenue from all sources available for general
26purposes” means the total amount of revenue which the city being
27disincorporated may use on a discretionary basis for any purpose
28and does not include any of the following:
29(A) Revenue that, by statute or ordinance, is required to be used
30for a specific purpose.
31(B) Revenue from fees, charges, or assessments that are levied
32to specifically offset the cost of particular services and that do not
33exceed the cost reasonably borne in providing these services.
34(C) Revenue received from the federal government that is
35required to be used for a specific purpose.
36(2) The commission shall determine, based on information
37submitted by the city being disincorporated, an amount equal to
38the total net cost to that city during the prior fiscal year of providing
39those services that an affected agency will assume within the area
40subject to the proposal. For purposes of this paragraph, “total net
P11 1cost” means the total direct and indirect costs that were funded by
2general purpose revenues of the city being disincorporated and
3excludes any portion of the total cost that was funded by any
4revenues of that agency that are specified in subparagraphs (A),
5(B), and (C) of paragraph (1).
6(3) For the services to be transferred to each affected local
7agency, the commission shall multiply the amount determined
8pursuant to paragraph (2) by the proportion determined pursuant
9to paragraph (1) to derive the amount of property tax revenue used
10to provide services by the city being disincorporated during the
11prior fiscal year within the area subject to the proposal. The county
12auditor shall adjust the amount so determined by the annual tax
13increment pursuant to the procedures set forth in Chapter 6
14(commencing with Section 95) of Part 0.5 of Division 1 of the
15Revenue and Taxation Code, to the fiscal year in which the affected
16agency receives its next allocation of property taxes.
17(d) If the proposal for disincorporation would transfer all of the
18service responsibilities of the city proposed for disincorporation,
19other than those that are proposed to be discontinued, to a single
begin delete successor agency,end delete the commission shall request the
21auditor to determine the property tax revenue allocated to the city
22being disincorporated by tax rate area, or portion thereof, and
23transmit that information to the commission.
24(e) The executive officer shall notify the auditor of the amount
25determined pursuant to subdivision (c) or (d), as the case may be,
26and, where applicable, the period of time within which and the
27procedure by which the transfer of property tax revenues will be
28effected pursuant to this section, at the time the executive officer
29records a certificate of completion pursuant to Section 57203 for
30any proposal described in subdivision (a), and the auditor shall
31transfer that amount to the affected agency or agencies that will
32assume the services as determined by the commission. Any
33property tax not transferred to an affected agency pursuant to
34subdivision (c) shall be transferred to the affected county.
35(f) For purposes of this section, “prior fiscal year” means the
36most recent fiscal year preceding the issuance of the certificate of
37filing for which data is available on actual direct and indirect costs
38and revenues needed to perform the calculations required by this
P12 1(g) Any action brought by a city or district to contest any of the
2determinations of the county auditor or the commission with regard
3to the amount of property tax revenue to be exchanged by the
4affected local agencies pursuant to this section shall be commenced
5within three years of the effective date of the disincorporation.
Section 56814 is added to the Government Code, to
If the proposal includes the disincorporation of a city,
9as defined in Section 56034, with the assignment of property tax
10revenues to a successor
begin delete agencyend delete the commission shall make the
11following determinations, as appropriate:
12(a) The increase of the appropriations limit for the successor
begin delete agency, or agencies,end delete if the successor begin delete agency or agenciesend delete is an
15(b) The appropriations limit for
a new special district through
16a formation process as defined by Section 56810.
Section 56816 is added to the Government Code, to
(a) It is the intent of the Legislature that any proposal
20that includes the disincorporation of a city result in a determination
21that the debt or contractual obligations and responsibilities of the
22city being disincorporated shall be the responsibility of that same
23territory for repayment. To ascertain this information, the city shall
24provide a written statement that determines and certifies all of the
25following to the commission prior to the issuance of a certificate
26of filing for a disincorporation proposal, pursuant to Sections 56651
28(1) The indebtedness of the city.
29(2) The amount of money in the city’s treasury.
30(3) The amount of any tax levy or other obligation due the city
31that is unpaid or has not been collected.
32(4) The amount of current and future liabilities, both internal
33debt owed to other special or restricted funds or enterprise funds
34within the agency and external debt owed to other public agencies
35or outside lenders or that results from contractual obligations,
36which may include contracts for goods or services, retirement
37obligations, actuarially determined unfunded pension liability of
38all classes in a public retirement system, including any
39documentation related to the termination of public retirement
40contract provisions, and the liability for other postemployment
P13 1benefits. The information required by this paragraph shall include
2any associated revenue stream for financing that may be or has
3been committed to that liability, including employee contributions.
4(b) The city shall provide a written statement identifying the
5successor agency to the city’s former redevelopment agency, if
6any, pursuant to Section 34173 of the Health and Safety Code.
Section 56885.5 of the Government Code is amended
(a) In any commission order giving approval to any
10change of organization or reorganization, the commission may
11make that approval conditional upon any of the following factors:
12(1) Any of the conditions set forth in Section 56886.
13(2) The initiation, conduct, or completion of proceedings for
14another change of organization or a reorganization.
15(3) The approval or disapproval, with or without election, as
16may be provided by this division, of any resolution or ordinance
17ordering that change of organization or reorganization.
18(4) With respect to any commission determination to approve
19the disincorporation of a city, the dissolution of a district, or the
20reorganization or consolidation of agencies that results in the
21dissolution of one or more districts or the disincorporation of one
22or more cities, a condition that prohibits a district that is being
23dissolved or a city that is being disincorporated from taking any
24of the following actions, unless it first finds that either an
25emergency situation exists as defined in Section 54956.5, or the
26legislative body of the
begin delete successor agency or agencies,end delete
27 as designated by the commission has taken action approving one
28or more of the following actions:
29(A) Approving any increase in compensation or benefits for
30members of the governing board, its officers, or the executive
31officer of the agency.
32(B) Appropriating, encumbering, expending, or otherwise
33obligating, any revenue of the agency beyond that provided in the
34current budget at the time the commission approves the dissolution
36(b) If the
commission so conditions its approval, the commission
37may order that any further action pursuant to this division be
38continued and held in abeyance for the period of time designated
39by the commission, not to exceed six months from the date of that
P14 1(c) The commission order may also provide that any election
2called upon any change of organization or reorganization shall be
3called, held, and conducted before, upon the same date as, or after
4the date of any election to be called, held, and conducted upon any
5other change of organization or reorganization.
6(d) The commission order may also provide that in any election
7at which the questions of annexation and district reorganization
8or, incorporation and district reorganization, or disincorporation
9and district reorganization are to be considered at the same time,
10there shall be a single question appearing on the ballot upon the
11issues of annexation and district reorganization or incorporation
12and district reorganization.
Section 57401 of the Government Code is repealed.
Section 57402 of the Government Code is repealed.
Section 57404 of the Government Code is repealed.
Section 57405 of the Government Code is amended
If a tax has been levied by the disincorporated city and
19remains uncollected, the county tax collector shall collect it when
20due and pay it into the county treasury on behalf of the designated
21successor agency or county to wind up the affairs of the
Section 57409 of the Government Code is repealed.
Section 57410 of the Government Code is repealed.
Section 57416 of the Government Code is repealed.
Section 57423 of the Government Code is repealed.
Section 57424 of the Government Code is repealed.
Section 57426 is added to the Government Code, to
As of the effective date of the disincorporation, all of
31the following apply:
32(a) The general plan of the disincorporated city that was in effect
33immediately prior to the effective date of the disincorporation shall
34constitute the community plan of the county for the territory of
35the disincorporated city until the county updates the community
begin delete plan.end delete
zoning ordinances of the disincorporated city that were
39in effect immediately prior to the effective date of the
40disincorporation shall constitute the zoning ordinances of the
P15 1county for that
begin delete territoryend delete until the county updates the zoning ordinances
4applicable to that territory.
5(c) Any conditional use permit or legal nonconforming use that
6was in place immediately prior to the effective date of the
7disincorporation shall remain in force pursuant to the community
8plan and zoning ordinances.
begin deleteNotwithstanding subdivisions (a), (b), or (c), any end deleteuse
10of land that was authorized under the general plan and zoning
11ordinances immediately prior to the effective date of the
12disincorporation shall continue to be authorized, for as long a
13period as may be required by the California Constitution or United
Section 99 of the Revenue and Taxation Code is
16amended to read:
(a) For the purposes of the computations required by this
19(1) In the case of a jurisdictional change, other than a city
20incorporation, city disincorporation, or a formation of a district as
21defined in Section 2215, the auditor shall adjust the allocation of
22property tax revenue determined pursuant to Section 96 or 96.1,
23or the annual tax increment determined pursuant to Section 96.5,
24for local agencies whose service area or service responsibility
25would be altered by the jurisdictional change, as determined
26pursuant to subdivision (b) or (c).
27(2) In the case of a city incorporation or disincorporation, the
28auditor shall assign the allocation of property tax revenues
29determined pursuant to Section 56810 of the Government Code
30and the adjustments in tax revenues that may occur pursuant to
31Section 56815 of the Government Code to the newly formed city
32or district and shall make the adjustment as determined by Section
3356810 or 56813 in the allocation of property tax revenue
34determined pursuant to Section 96 or 96.1 for each local agency
35whose service area or service responsibilities would be altered by
37(3) In the case of a formation of a district as defined in Section
382215, the auditor shall assign the allocation of property tax
39revenues determined pursuant to Section 56810 of the Government
40Code to the district and shall make the adjustment as determined
P16 1by Section 56810, or for the disincorporated city or dissolved
2district as determined by Section 56813, in the allocation of
3property tax revenue determined pursuant to Section 96 or 96.1
4for each local agency whose service area or service responsibilities
5would be altered by the change of organization.
6(b) Upon the filing of an application or a resolution pursuant to
7the Cortese-Knox-Hertzberg Local Government Reorganization
8Act of 2000 (Division 3 (commencing with Section 56000) of Title
95 of the Government Code), but prior to the issuance of a certificate
10of filing, the executive officer shall give notice of the filing to the
11assessor and auditor of each county within which the territory
12subject to the jurisdictional change is located. This notice shall
13specify each local agency whose service area or responsibility will
14be altered by the jurisdictional change.
15(1) (A) The county assessor shall provide to the county auditor,
16within 30 days of the notice of filing, a report which identifies the
17assessed valuations for the territory subject to the jurisdictional
18change and the tax rate area or areas in which the territory exists.
19(B) The auditor shall estimate the amount of property tax
20revenue generated within the territory that is the subject of the
21jurisdictional change during the current fiscal year.
22(2) The auditor shall estimate what proportion of the property
23tax revenue determined pursuant to paragraph (1) is attributable
24to each local agency pursuant to Sections 96.1 and 96.5.
25(3) Within 45 days of notice of the filing of an application or
26resolution, the auditor shall notify the governing body of each local
27agency whose service area or service responsibility will be altered
28by the jurisdictional change of the amount of, and allocation factors
29with respect to, property tax revenue estimated pursuant to
30paragraph (2) that is subject to a negotiated exchange.
31(4) Upon receipt of the estimates pursuant to paragraph (3), the
32local agencies shall commence negotiations to determine the
33amount of property tax revenues to be exchanged between and
34among the local agencies. Except as otherwise provided, this
35negotiation period shall not exceed 60 days. If a local agency
36involved in these negotiations notifies the other local agencies, the
37county auditor, and the local agency formation commission in
38writing of its desire to extend the negotiating period, the negotiating
39 period shall be 90 days.
P17 1The exchange may be limited to an exchange of property tax
2revenues from the annual tax increment generated in the area
3subject to the jurisdictional change and attributable to the local
4agencies whose service area or service responsibilities will be
5altered by the proposed jurisdictional change. The final exchange
6resolution shall specify how the annual tax increment shall be
7allocated in future years.
8(5) In the event that a jurisdictional change would affect the
9service area or service responsibility of one or more special
10districts, the board of supervisors of the county or counties in which
11the districts are located shall, on behalf of the district or districts,
12negotiate any exchange of property tax revenues. Prior to entering
13into negotiation on behalf of a district for the exchange of property
14tax revenue, the board shall consult with the affected district. The
15 consultation shall include, at a minimum, notification to each
16member and executive officer of the district board of the pending
17consultation and provision of adequate opportunity to comment
18on the negotiation.
19(6) Notwithstanding any other provision of law, the executive
20officer shall not issue a certificate of filing pursuant to Section
2156658 of the Government Code until the local agencies included
22in the property tax revenue exchange negotiation, within the
23negotiation period, present resolutions adopted by each such county
24and city whereby each county and city agrees to accept the
25exchange of property tax revenues.
26(7) In the event that the commission modifies the proposal or
27its resolution of determination, any local agency whose service
28area or service responsibility would be altered by the proposed
29jurisdictional change may request, and the executive officer shall
30grant, 30 days for the affected agencies, pursuant to paragraph (4),
31to renegotiate an exchange of property tax revenues.
32Notwithstanding the time period specified in paragraph (4), if the
33resolutions required pursuant to paragraph (6) are not presented
34to the executive officer within the 30-day period, all proceedings
35of the jurisdictional change shall automatically be terminated.
36(8) In the case of a jurisdictional change that consists of a city’s
37qualified annexation of unincorporated territory, an exchange of
38property tax revenues between the city and the county shall be
39determined in accordance with subdivision (e) if that exchange of
P18 1revenues is not otherwise determined pursuant to either of the
3(A) Negotiations completed within the applicable period or
4periods as prescribed by this subdivision.
5(B) A master property tax exchange agreement among those
6local agencies, as described in subdivision (d).
7For purposes of this paragraph, a qualified annexation of
8unincorporated territory means an annexation, as so described, for
9which an application or a resolution was filed on or after January
101, 1998, and on or before January 1, 2015.
11(9) No later than the date on which the certificate of completion
12of the jurisdictional change is recorded with the county recorder,
13the executive officer shall notify the auditor or auditors of the
14exchange of property tax revenues and the auditor or auditors shall
15make the appropriate adjustments as provided in subdivision (a).
16(c) Whenever a jurisdictional change is not required to be
17reviewed and approved by a local agency formation commission,
18the local agencies whose service area or service responsibilities
19 would be altered by the proposed change, shall give notice to the
20State Board of Equalization and the assessor and auditor of each
21county within which the territory subject to the jurisdictional
22change is located. This notice shall specify each local agency
23whose service area or responsibility will be altered by the
24jurisdictional change and request the auditor and assessor to make
25the determinations required pursuant to paragraphs (1) and (2) of
26subdivision (b). Upon notification by the auditor of the amount
27of, and allocation factors with respect to, property tax subject to
28exchange, the local agencies, pursuant to the provisions of
29paragraphs (4) and (6) of subdivision (b), shall determine the
30amount of property tax revenues to be exchanged between and
31among the local agencies. Notwithstanding any other provision of
32law, no such jurisdictional change shall become effective until
33each county and city included in these negotiations agrees, by
34resolution, to accept the negotiated exchange of property tax
35 revenues. The exchange may be limited to an exchange of property
36tax revenue from the annual tax increment generated in the area
37subject to the jurisdictional change and attributable to the local
38agencies whose service area or service responsibilities will be
39altered by the proposed jurisdictional change. The final exchange
40resolution shall specify how the annual tax increment shall be
P19 1allocated in future years. Upon the adoption of the resolutions
2required pursuant to this section, the adopting agencies shall notify
3the auditor who shall make the appropriate adjustments as provided
4in subdivision (a). Adjustments in property tax allocations made
5as the result of a city or library district withdrawing from a county
6free library system pursuant to Section 19116 of the Education
7Code shall be made pursuant to Section 19116 of the Education
8Code, and this subdivision shall not apply.
9(d) With respect to adjustments in the allocation of property
10 taxes pursuant to this section, a county and any local agency or
11agencies within the county may develop and adopt a master
12property tax transfer agreement. The agreement may be revised
13from time to time by the parties subject to the agreement.
14(e) (1) An exchange of property tax revenues that is required
15by paragraph (8) of subdivision (b) to be determined pursuant to
16this subdivision shall be determined in accordance with all of the
18(A) The city and the county shall mutually select a third-party
19consultant to perform a comprehensive, independent fiscal analysis,
20funded in equal portions by the city and the county, that specifies
21estimates of all tax revenues that will be derived from the annexed
22territory and the costs of city and county services with respect to
23the annexed territory. The analysis shall be completed within a
24period not to exceed 30 days, and shall be based upon the general
25plan or adopted plans and policies of the annexing city and the
26intended uses for the annexed territory. If, upon the completion of
27the analysis period, no exchange of property tax revenues is agreed
28upon by the city and the county, subparagraph (B) shall apply.
29(B) The city and the county shall mutually select a mediator,
30funded in equal portions by those agencies, to perform mediation
31for a period not to exceed 30 days. If, upon the completion of the
32mediation period, no exchange of property tax revenues is agreed
33upon by the city and the county, subparagraph (C) shall apply.
34(C) The city and the county shall mutually select
35funded in equal portions by those agencies, to conduct an advisory
36arbitration with the city and the county for a period not to exceed
3730 days. At the conclusion of this arbitration period, the city and
38the county shall each present to the arbitrator its last and best offer
39with respect to the exchange of property tax revenues. The
40arbitrator shall select one of the offers and recommend that offer
P20 1to the governing bodies of the city and the county. If the governing
2body of the city or the county rejects the recommended offer, it
3shall do so during a public hearing, and shall, at the conclusion of
4that hearing, make written findings of fact as to why the
5recommended offer was not accepted.
6(2) Proceedings under this subdivision shall be concluded no
7more than 150 days after the auditor provides the notification
8pursuant to paragraph (3) of subdivision (b), unless one of the
9periods specified in this subdivision is extended by the mutual
10agreement of the city and the county. Notwithstanding any other
11provision of law, except for those conditions that are necessary to
12implement an exchange of property tax revenues determined
13pursuant to this subdivision, the local agency formation
14commission shall not impose any fiscal conditions upon a city’s
15qualified annexation of unincorporated territory that is subject to
17(f) Except as otherwise provided in subdivision (g), for the
18purpose of determining the amount of property tax to be allocated
19in the 1979-80 fiscal year and each fiscal year thereafter for those
20local agencies that were affected by a jurisdictional change which
21was filed with the State Board of Equalization after January 1,
221978, but on or before January 1, 1979. The local agencies shall
23determine by resolution the amount of property tax revenues to be
24exchanged between and among the affected agencies and notify
25the auditor of the determination.
26(g) For the purpose of determining the amount of property tax
27to be allocated in the 1979-80 fiscal year and each fiscal year
28thereafter, for a city incorporation that was filed pursuant to
29Sections 54900 to
begin delete 54904end delete
30 after January 1, 1978, but on or before January 1, 1979, the amount
31of property tax revenue considered to have been received by the
32jurisdiction for the 1978-79 fiscal year shall be equal to two-thirds
33of the amount of property tax revenue projected in the final local
34agency formation commission staff report pertaining to the
35incorporation multiplied by the proportion that the total amount
36of property tax revenue received by all jurisdictions within the
37county for the 1978-79 fiscal year bears to the total amount of
38property tax revenue received by all jurisdictions within the county
39for the 1977-78 fiscal year. Except, however, in the event that the
40final commission report did not specify the amount of property
P21 1tax revenue projected for that incorporation, the commission shall
2by October 10 determine pursuant to Section 54790.3 of the
3Government Code the amount of property tax to be transferred to
5The provisions of this subdivision shall also apply to the
6allocation of property taxes for the 1980-81 fiscal year and each
7fiscal year thereafter for incorporations approved by the voters in
9(h) For the purpose of the computations made pursuant to this
10section, in the case of a district formation that was filed pursuant
11to Sections 54900 to 54904, inclusive, of the Government Code
12after January 1, 1978, but before January 1, 1979, the amount of
13property tax to be allocated to the district for the 1979-80 fiscal
14year and each fiscal year thereafter shall be determined pursuant
15to Section 54790.3 of the Government Code.
16(i) For the purposes of the computations required by this chapter,
17in the case of a jurisdictional change, other than a change requiring
18an adjustment by the auditor pursuant to subdivision (a), the auditor
19shall adjust the allocation of property tax revenue determined
20pursuant to Section 96 or 96.1 or its predecessor section, or the
21annual tax increment determined pursuant to Section 96.5 or its
22predecessor section, for each local school district, community
23college district, or county superintendent of schools whose service
24area or service responsibility would be altered by the jurisdictional
25change, as determined as follows:
26(1) The governing body of each district, county superintendent
27of schools, or county whose service areas or service responsibilities
28would be altered by the change shall determine the amount of
29property tax revenues to be exchanged between and among the
30affected jurisdictions. This determination shall be adopted by each
31affected jurisdiction by resolution. For the purpose of negotiation,
32the county auditor shall furnish the parties and the county board
33of education with an estimate of the property tax revenue subject
35(2) In the event that the affected jurisdictions are unable to agree,
36within 60 days after the effective date of the jurisdictional change,
37and if all the jurisdictions are wholly within one county, the county
38board of education shall, by resolution, determine the amount of
39property tax revenue to be exchanged. If the jurisdictions are in
40more than one county, the State Board of Education shall, by
P22 1resolution, within 60 days after the effective date of the
2jurisdictional change, determine the amount of property tax to be
4(3) Upon adoption of any resolution pursuant to this subdivision,
5the adopting jurisdictions or State Board of Education shall notify
6the county auditor who shall make the appropriate adjustments as
7provided in subdivision (a).
8(j) For purposes of subdivision (i), the annexation by a
9community college district of territory within a county not
10previously served by a community college district is an alteration
11of service area. The community college district and the county
12shall negotiate the amount, if any, of property tax revenues to be
13exchanged. In these negotiations, there shall be taken into
14consideration the amount of revenue received from the timber
15yield tax and forest reserve receipts by the community college
16district in the area not previously served. In no event shall the
17property tax revenue to be exchanged exceed the amount of
18property tax revenue collected prior to the annexation for the
19purposes of paying tuition expenses of residents enrolled in the
20community college district, adjusted each year by the percentage
21change in population and the percentage change in the cost of
22living, or per capita personal income, whichever is lower, less the
23amount of revenue received by the community college district in
24the annexed area from the timber yield tax and forest reserve
26(k) At any time after a jurisdictional change is effective, any of
27the local agencies party to the agreement to exchange property tax
28revenue may renegotiate the agreement with respect to the current
29fiscal year or subsequent fiscal years, subject to approval by all
30local agencies affected by the renegotiation.
If the Commission on State Mandates determines
32that this act contains costs mandated by the state, reimbursement
33to local agencies and school districts for those costs shall be made
34pursuant to Part 7 (commencing with Section 17500) of Division
354 of Title 2 of the Government Code.