AB 851, as amended, Mayes. Local government: organization: disincorporations.
(1) Existing law specifies a procedure for the legislative body of a city, county, or district to propose to the voters an ordinance or resolution to adopt a special tax pursuant to constitutional requirements. Existing law authorizes a local agency which is conducting proceedings for the incorporation of a city, formation of a district, change of organization, a reorganization, a change of organization of a city, or a municipal reorganization to propose the adoption of a special tax on behalf of the affected city or district in accordance with this procedure.
This bill would additionally authorize a local agency conducting proceedings for the disincorporation of a city to propose the adoption of a special tax on behalf of an affected city in accordance with the above-described procedure.
(2) 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.
(3) 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.
(4) 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.
(5) 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.
(6) 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 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, the increase of the appropriations limit for a successor, if the successor is an existing entity, 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 statement prior to issuance of a certificate for filing for a proposal that includes a disincorporation that includes specified information relating to its debts and contractual obligations.
(7) 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 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.
(8) Existing law provides that an organization or reorganization may provide for, or be made subject to, specified terms and conditions, including the levying of assessments, including certain fees, or the approval by the voters of general or special taxes. Under existing law, these terms and conditions may not directly regulate land use, property development, or subdivision requirements, and the imposition of such a fee as a condition of the issuance of a building permit does not constitute a direct regulation of land use, property development, or subdivision requirements.
This bill would expand the scope of terms and conditions that may be provided for or required as a condition of an organization or reorganization to include the levying of fees generally. The bill would also make technical, nonsubstantive changes to this provision.
(9) 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.
(10) 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.
(11) 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.
(12) 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 or county to wind up affairs of the disincorporated city.
(13) 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.
(14) 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.
(15) 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.
(16) 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 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 disincorporated city 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.
(17) 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. Existing law establishes procedures for determining the exchange of property tax revenues between a city and a county in the case of a jurisdictional change that consists of a city’s qualified annexation of unincorporated territory, defined to mean an annexation of unincorporated territory for which an application or resolution was filed on or after January 1, 1998, and on or before January 1, 2015.
This bill would include a city disincorporation and dissolved district in those jurisdictional changes. The bill would also expand the above-described definition of a qualified annexation of unincorporated territory to include an annexation for which an application or resolution was filed on or before January 1, 2021.
By increasing the duties of the county auditor, this bill would impose a state-mandated local program.
(18) 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 50077 of the Government Code is
2amended to read:
(a) Except as provided in Section 7282 of the Revenue
4and Taxation Code, the legislative body of any city, county, or
5district may, following notice and public hearing, propose by
6ordinance or resolution the adoption of a special tax. The ordinance
7or resolution shall include the type of tax and rate of tax to be
8levied, the method of collection, and the date upon which an
9election shall be held to approve the levy of the tax. The
10proposition shall be submitted to the voters of the city, county, or
11district, or a portion thereof, and, upon the approval of two-thirds
12of the votes cast by voters voting upon the proposition, the city,
13county, or district may levy the tax.
14(b) The legislative body of a city, or district, may provide for
15the collection of the special tax in the same manner and subject to
16the same penalty as, or with, other charges and taxes fixed and
17collected by the city, or district, or, by agreement with the county,
18by the county on behalf of the city, or district. If the special taxes
19are collected by the county on behalf of the city, or district, the
20county may deduct its reasonable costs incurred for the service
21before remittal of the balance to the city.
22(c) The legislative body of a local agency which is conducting
23proceedings for the incorporation of a city, the formation of a
24district, a change of organization, a reorganization, a change of
25organization of a city, a municipal reorganization, or the
26disincorporation of a city may propose by ordinance or resolution
27the adoption of a special tax in accordance with the provisions of
28subdivision (a) on behalf of an affected city or district.
29(d) As used in this section “district” means an agency of the
30state, formed pursuant to general law or special act, for the local
31performance of governmental or proprietary functions within
Section 56653.1 is added to the Government Code, to
In the case of a disincorporation or reorganization
5that includes a disincorporation, the plan for services required by
6subdivision (a) of Section 56653 shall include the following:
7(a) An enumeration and description of the services currently
8provided by the city proposed for disincorporation and an
9identification of the entity or entities proposed
10to assume responsibility for the services following completion of
12(b) An enumeration and description of each service proposed
13to be discontinued or transferred, the current financing of the
14service or services, and any method of financing proposed by the
16(c) A delineation of any existing financing of services currently
17provided to include, but not be limited to, bonds, assessments,
18community facility district governance, general taxes, special taxes,
19other charges, and joint powers authorities or agreements.
20(d) An indication of any current bankruptcy proceeding,
21including, but not limited to, status and exit plan.
22(e) An indication of any current order relating to services
23provided by the city proposed for disincorporation by any agency,
24department, office, or other division of the state, including, but
25not limited to, a cease and desist order or water prohibition order.
26(f) A written
statement from each entity identified pursuant to
27subdivision (a) that it has received a copy of the plan for services
28submitted pursuant to this section.
29(g) Any other information that the executive officer may deem
30necessary to evaluate the plan for services submitted.
Section 56658 of the Government Code is amended
(a) Any petitioner or legislative body desiring to initiate
35proceedings shall submit an application to the executive officer of
36the principal county.
37(b) (1) Immediately after receiving an application and before
38issuing a certificate of filing, the executive officer shall give mailed
39notice that the application has been received to each affected
40agency, the county committee on school district organization, and
P9 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
5 has 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.
P10 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
31approve any proposal that includes a disincorporation, unless,
32based on the entire record, the commission makes all of the
34(a) The proposed disincorporation is consistent with the intent
35of this division to provide for a sustainable system for the delivery
37(b) The commission has considered the service reviews of
38municipal services and spheres of influence of the affected local
39agencies, and the disincorporation will address the necessary
40changes to those spheres of influence, if any.
P11 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 5.
Section 56804 is added to the Government Code, to
For any proposal that includes a disincorporation, the
14executive officer shall prepare, or cause to be prepared by contract,
15a comprehensive fiscal analysis. This analysis shall become part
16of the report required pursuant to Section 56665. Data used for the
17analysis shall be from the most recent fiscal year for which data
18is available, preceding the issuances of the certificate of filing.
19When data requested by the executive officer in the notice to
20affected agencies, pursuant to paragraph (2) of subdivision (b) of
21Section 56658, is unavailable, the analysis shall document the
22source and methodology of the data used. The analysis shall review
23and document each of the following:
direct and indirect costs incurred by the city proposed
25for disincorporation for providing public services during the three
26fiscal years immediately preceding the submittal of the proposal
28(b) The direct and indirect costs incurred by the city proposed
29for disincorporation for current and proposed capital improvements,
30facilities, assets, and infrastructure.
31(c) The sources of funding, if any, available to the entities
32proposed to assume the obligations of the city proposed for
begin delete33 disincorporation and the related costs, including all actual direct
34and indirect costs, in the provision of existing services.end delete
30 39(d)end delete
P12 1 When determining costs, the executive officer shall also
2include all direct and indirect costs of any public services that are
3proposed to be transferred to state agencies for delivery.
34 4(e)end delete
5 The revenues of the city proposed for disincorporation during
6the three fiscal years immediately preceding the initiation of the
38 8(f)end delete
9 Any other information and analysis needed to make the
10findings required by Section 56770.
Section 56813 is added to the Government Code, to
(a) If the proposal includes the disincorporation of a
15city, as defined in Section 56034, the commission shall determine
16the amount of property tax revenue to be exchanged by the affected
17city and any successor or affected local agency pursuant to this
19(b) The commission shall notify the county auditor of the
20proposal, the affected local agencies to be extinguished, and the
21services proposed to be transferred to new jurisdictions, and
22identify for the auditor the changes to occur.
23(c) If the proposal would not transfer all of the service
24responsibilities of the disincorporating city to the affected county
25or to a single affected agency, the commission and the county
26 auditor shall do all of the following:
27(1) The county auditor shall determine the proportion that the
28amount of property tax revenue derived by the city being
29disincorporated pursuant to subdivision (b) of Section 93 of the
30Revenue and Taxation Code bears to the total amount of revenue
31from all sources, available for general purposes, received by the
32city being disincorporated in the prior fiscal year and provide
begin delete theirend delete
33 response within 15 days of receiving notification from
34the commission pursuant to subdivision (b). For purposes of
35making this determination and the determination required by
36paragraph (3), “total amount of revenue from all sources available
37for general purposes” means the total amount of revenue which
38the city being disincorporated may use on a discretionary basis for
39any purpose and does not include any of the following:
P13 1(A) Revenue that, by statute or ordinance, is required to be used
2for a specific purpose.
3(B) Revenue from fees, charges, or assessments that are levied
4to specifically offset the cost of particular services and that do not
5exceed the cost reasonably borne in providing these services.
6(C) Revenue received from the federal government that is
7required to be used for a specific purpose.
8(2) The commission shall determine, based on information
9submitted by the city being disincorporated, an amount equal to
10the total net cost to that city during the prior fiscal year of providing
11those services that an affected agency will assume within the area
12subject to the proposal. For purposes of this paragraph, “total net
13cost” means the total direct and indirect costs that were funded by
14general purpose revenues of the city being disincorporated and
15excludes any portion of the total cost that was funded by any
16revenues of that agency that are specified in subparagraphs (A),
17(B), and (C) of paragraph (1).
18(3) For the services to be transferred to each affected local
19agency, the commission shall multiply the amount determined
20pursuant to paragraph (2) by the proportion determined pursuant
21to paragraph (1) to derive the amount of property tax revenue used
22to provide services by the city being disincorporated during the
23prior fiscal year within the area subject to the proposal. The county
24auditor shall adjust the amount so determined by the annual tax
25increment pursuant to the procedures set forth in Chapter 6
26(commencing with Section 95) of Part 0.5 of Division 1 of the
27Revenue and Taxation Code, to the fiscal year in which the affected
28agency receives its next allocation of property taxes.
29(d) If the proposal for disincorporation would transfer all of the
30service responsibilities of the city proposed for disincorporation,
31other than those that are proposed to be discontinued, to a single
32successor, the commission shall request the auditor to determine
33the property tax revenue allocated to the city being disincorporated
34by tax rate area, or portion thereof, and transmit that information
35to the commission.
36(e) The executive officer shall notify the auditor of the amount
37determined pursuant to subdivision (c) or (d), as the case may be,
38and, where applicable, the period of time within which and the
39procedure by which the transfer of property tax revenues will be
40effected pursuant to this section, at the time the executive officer
P14 1records a certificate of completion pursuant to Section 57203 for
2any proposal described in subdivision (a), and the auditor shall
3transfer that amount to the affected agency or agencies that will
4assume the services as determined by the commission. Any
5property tax not transferred to an affected agency pursuant to
6subdivision (c) shall be transferred to the affected county.
7(f) For purposes of this section, “prior fiscal year” means the
8most recent fiscal year preceding the issuance of the certificate of
9filing for which data is available on actual direct and indirect costs
10and revenues needed to perform the calculations required by this
12(g) Any action brought by a city or district to contest any of the
13determinations of the county auditor or the commission with regard
14to the amount of property tax revenue to be exchanged by the
15affected local agencies pursuant to this section shall be commenced
16within 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,
21as defined in Section 56034, with the assignment of property tax
22 revenues to a successor the commission shall make the following
23determinations, as appropriate:
24(a) The increase of the appropriations limit for the successor if
25the successor is an existing entity.
26(b) The appropriations limit for a new special district through
27a 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
32that includes the disincorporation of a city result in a determination
33that the debt or contractual obligations and responsibilities of the
34city being disincorporated shall be the responsibility of that same
35territory for repayment. To ascertain this information, the city shall
36provide a written statement that determines and certifies all of the
37following to the commission prior to the issuance of a certificate
38of filing for a disincorporation proposal, pursuant to Sections 56651
40(1) The indebtedness of the city.
P15 1(2) The amount of money in the city’s treasury.
2(3) The amount of any tax levy or other obligation due the city
3that is unpaid or has not been collected.
4(4) The amount of current and future liabilities, both internal
5debt owed to other special or restricted funds or enterprise funds
6within the agency and external debt owed to other public agencies
7or outside lenders or that results from contractual obligations,
8which may include contracts for goods or services, retirement
9obligations, actuarially determined unfunded pension liability of
10all classes in a public retirement system, including any
11documentation related to the termination of public retirement
12contract provisions, and the liability for other postemployment
13benefits. The information required by this paragraph shall include
14any associated revenue stream for financing that may be or has
15been committed to that liability, including employee contributions.
16(b) The city shall provide a written statement identifying the
17successor agency to the city’s former redevelopment agency, if
18any, 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
23change of organization or reorganization, the commission may
24make that approval conditional upon any of the following factors:
25(1) Any of the conditions set forth in Section 56886.
26(2) The initiation, conduct, or completion of proceedings for
27another change of organization or a reorganization.
28(3) The approval or disapproval, with or without election, as
29may be provided by this division, of any resolution or ordinance
30ordering that change of organization or reorganization.
31(4) With respect to any commission determination to approve
32the disincorporation of a city, the dissolution of a district, or the
33reorganization or consolidation of agencies that results in the
34dissolution of one or more districts or the disincorporation of one
35or more cities, a condition that prohibits a district that is being
36dissolved or a city that is being disincorporated from taking any
37of the following actions, unless it first finds that either an
38emergency situation exists as defined in Section 54956.5, or the
39legislative body of the successor, as designated by the commission
40has taken action approving one or more of the following actions:
P16 1(A) Approving any increase in compensation or benefits for
2members of the governing board, its officers, or the executive
3officer of the agency.
4(B) Appropriating, encumbering, expending, or otherwise
5obligating, any revenue of the agency beyond that provided in the
6current budget at the time the commission approves the dissolution
8(b) If the commission so conditions its approval, the commission
9may order that any further action pursuant to this division be
10continued and held in abeyance for the period of time designated
11by the commission, not to exceed six months from the date of that
13(c) The commission order may also provide that any election
14called upon any change of organization or reorganization shall be
15called, held, and conducted before, upon the same date as, or after
16the date of any election to be called, held, and conducted upon any
17other change of organization or reorganization.
18(d) The commission order may also provide that in any election
19at which the questions of annexation and district reorganization
20or, incorporation and district reorganization, or disincorporation
21and district reorganization are to be considered at the same time,
22there shall be a single question appearing on the ballot upon the
23issues of annexation and district reorganization or incorporation
24and district reorganization.
Section 56886 of the Government Code is amended
Any change of organization or reorganization may
29provide for, or be made subject to one or more of, the following
30terms and conditions. If a change of organization or reorganization
31is made subject to one or more of the following terms and
32conditions in the commission’s resolution making determinations,
33the terms and conditions imposed shall prevail in the event of a
34conflict between a specific term and condition authorized pursuant
35to this section and any of the general provisions of Part 5
36(commencing with Section 57300). However, none of the following
37terms and conditions shall directly regulate land use, property
38development, or subdivision requirements:
39(a) The payment of a fixed or determinable
amount of money,
40either as a lump sum or in installments, for the acquisition, transfer,
P17 1use, or right of use of all or any part of the existing property, real
2or personal, of any city, county, or district.
3(b) The levying or fixing and the collection of any of the
4following, for the purpose of providing for any payment required
5pursuant to subdivision (a):
6(1) Special, extraordinary, or additional taxes or assessments.
7(2) Special, extraordinary, or additional service charges, rentals,
9(3) Both taxes or assessments and service charges, rentals, or
11(c) The imposition, exemption,
transfer, division, or
12apportionment, as among any affected cities, affected counties,
13affected districts, and affected territory of liability for payment of
14all or any part of principal, interest, and any other amounts which
15shall become due on account of all or any part of any outstanding
16or then authorized but thereafter issued bonds, including revenue
17bonds, or other contracts or obligations of any city, county, district,
18or any improvement district within a local agency, and the levying
19or fixing and the collection of any (1) taxes or assessments, or (2)
20service charges, rentals, or rates, or (3) both taxes or assessments
21and service charges, rentals, or rates, in the same manner as
22provided in the original authorization of the bonds and in the
23amount necessary to provide for that payment.
24(d) If, as a result of any term or condition made
25subdivision (c), the liability of any affected city, affected county,
26or affected district for payment of the principal of any bonded
27indebtedness is increased or decreased, the term and condition
28may specify the amount, if any, of that increase or decrease which
29 shall be included in, or excluded from, the outstanding bonded
30indebtedness of that entity for the purpose of the application of
31any statute or charter provision imposing a limitation upon the
32principal amount of outstanding bonded indebtedness of the entity.
33(e) The formation of a new improvement district or districts or
34the annexation or detachment of territory to, or from, any existing
35improvement district or districts.
36(f) The incurring of new indebtedness or liability by, or on behalf
37of, all or any part of any local agency, including territory being
38annexed to any local agency, or of any existing or proposed new
39improvement district within that local agency. The new
40indebtedness may be the obligation solely of territory to be annexed
P18 1if the local agency has the authority to establish zones for incurring
2indebtedness. The indebtedness or liability shall be incurred
3 substantially in accordance with the laws otherwise applicable to
4the local agency.
5(g) The issuance and sale of any bonds, including authorized
6but unissued bonds of a local agency, either by that local agency
7or by a local agency designated as the successor to any local agency
8which is extinguished as a result of any change of organization or
10(h) The acquisition, improvement, disposition, sale, transfer, or
11division of any property, real or personal.
12(i) The disposition, transfer, or division of any moneys or funds,
13including cash on hand and moneys due but uncollected, and any
15(j) The fixing and
establishment of priorities of use, or right of
16use, of water, or capacity rights in any public improvements or
17facilities or any other property, real or personal. However, none
18of the terms and conditions ordered pursuant to this subdivision
19shall modify priorities of use, or right of use, to water, or capacity
20rights in any public improvements or facilities that have been fixed
21and established by a court or an order of the State Water Resources
23(k) The establishment, continuation, or termination of any office,
24department, or board, or the transfer, combining, consolidation,
25or separation of any offices, departments, or boards, or any of the
26functions of those offices, departments, or boards, if, and to the
27extent that, any of those matters is authorized by the principal act.
28(l) The employment, transfer, or discharge of employees, the
29continuation, modification, or termination of existing employment
30contracts, civil service rights, seniority rights, retirement rights,
31and other employee benefits and rights.
32(m) The designation of a city, county, or district, as the successor
33to any local agency that is extinguished as a result of any change
34of organization or reorganization, for the purpose of succeeding
35to all of the rights, duties, and obligations of the extinguished local
36agency with respect to enforcement, performance, or payment of
37any outstanding bonds, including revenue bonds, or other contracts
38and obligations of the extinguished local agency.
39(n) The designation of (1) the method for the selection of
40members of the legislative body of a district or (2) the number of
P19 1those members, or (3) both, where the proceedings are for a
2consolidation, or a reorganization providing for a consolidation or
3formation of a new district and the principal act provides for
4alternative methods of that selection or for varying numbers of
5those members, or both.
6(o) The initiation, conduct, or completion of proceedings on a
7proposal made under, and pursuant to, this division.
8(p) The fixing of the effective date or dates of any change of
9organization, subject to the limitations of Section 57202.
10(q) Any terms and conditions authorized or required by the
11principal act with respect to any change of organization.
12(r) The continuation or provision of any service provided at that
13time, or previously authorized to be provided by an official act of
14the local agency.
15(s) The levying of either of the following:
16(1) Assessments or fees, including the imposition of a fee
17pursuant to Section 50029 or 66484.3. For the purposes of this
18section, imposition of a fee as a condition of the issuance of a
19building permit does not constitute direct regulation of land use,
20property development, or subdivision requirements.
21(2) General or special taxes subject to approval by the voters.
22(t) The extension or continuation of any previously authorized
23charge, fee, assessment, or tax by the local agency or a successor
24local agency in the affected territory.
25(u) The transfer of authority and responsibility among any
26affected cities, affected counties, and affected districts for the
27administration of special tax and special assessment districts,
28including, but not limited to, the levying and collecting of special
29taxes and special assessments, including the determination of the
30annual special tax rate within authorized limits; the management
31of redemption, reserve, special reserve, and construction funds;
32the issuance of bonds which are authorized but not yet issued at
33the time of the transfer, including not yet issued portions or phases
34of bonds which are authorized; supervision of construction paid
35for with bond or special tax or assessment proceeds; administration
36of agreements to acquire public facilities and reimburse advances
37made to the district; and all other rights and responsibilities with
38respect to the levies, bonds, funds, and use of proceeds that would
39have applied to the local agency that created the special tax or
40special assessment district.
P20 1(v) Any other matters necessary or incidental to any of the terms
2and conditions specified in this section. If a change of organization,
3reorganization, or special reorganization provides for, or is made
4subject to one or more of, the terms and conditions specified in
5this section, those terms and conditions shall be deemed to be the
6exclusive terms and conditions for the change of organization,
7reorganization, or special reorganization, and shall control over
8any general provisions of Part 5 (commencing with Section 57300).
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
37the following apply:
38(a) The general plan of the disincorporated city that was in effect
39immediately prior to the effective date of the disincorporation shall
40constitute the community plan of the county for the territory of
P21 1the disincorporated city until the county updates the community
2plan, adopts a specific plan, or amends its county general plan for
3the unincorporated territory.
4(b) The zoning ordinances of the disincorporated city that were
5in effect immediately prior to the effective date of the
6disincorporation shall constitute the zoning ordinances of the
7county for that territory, and shall be so identified in any
8community plan, specific plan, or general plan amendment adopted
9by the county, until the county updates the zoning ordinances
10applicable to that territory.
11(c) Any conditional use permit or legal nonconforming use that
12was in place immediately prior to the effective date of the
13disincorporation shall remain in force pursuant to the community
14plan and zoning ordinances.
15(d) Any use of land that was authorized under the general plan
16and zoning ordinances immediately prior to the effective date of
17the disincorporation shall continue to be authorized, for as long a
18period as may be required by the California Constitution or United
Section 99 of the Revenue and Taxation Code is
22amended to read:
(a) For the purposes of the computations required by this
25(1) In the case of a jurisdictional change, other than a city
26incorporation, city disincorporation, or a formation of a district as
27defined in Section 2215, the auditor shall adjust the allocation of
28property tax revenue determined pursuant to Section 96 or 96.1,
29or the annual tax increment determined pursuant to Section 96.5,
30for local agencies whose service area or service responsibility
31would be altered by the jurisdictional change, as determined
32pursuant to subdivision (b) or (c).
33(2) In the case of a city incorporation or disincorporation, the
34auditor shall assign the allocation of property tax revenues
35determined pursuant to Section 56810 of the Government Code
36and the adjustments in tax revenues that may occur pursuant to
37Section 56815 of the Government Code to the newly formed city
38or district and shall make the adjustment as determined by Section
3956810 or 56813 in the allocation of property tax revenue
40determined pursuant to Section 96 or 96.1 for each local agency
P22 1whose service area or service responsibilities would be altered by
3(3) In the case of a formation of a district as defined in Section
42215, the auditor shall assign the allocation of property tax
5revenues determined pursuant to Section 56810 of the Government
6Code to the district and shall make the adjustment as determined
7by Section 56810, or for the disincorporated city or dissolved
8district as determined by Section 56813, in the allocation of
9property tax revenue determined pursuant to Section 96 or 96.1
10for each local agency whose service area or service responsibilities
11would be altered by the change of organization.
12(b) Upon the filing of an application or a resolution pursuant to
13the Cortese-Knox-Hertzberg Local Government Reorganization
14Act of 2000 (Division 3 (commencing with Section 56000) of Title
155 of the Government Code), but prior to the issuance of a certificate
16of filing, the executive officer shall give notice of the filing to the
17assessor and auditor of each county within which the territory
18subject to the jurisdictional change is located. This notice shall
19 specify each local agency whose service area or responsibility will
20be altered by the jurisdictional change.
21(1) (A) The county assessor shall provide to the county auditor,
22within 30 days of the notice of filing, a report which identifies the
23assessed valuations for the territory subject to the jurisdictional
24change and the tax rate area or areas in which the territory exists.
25(B) The auditor shall estimate the amount of property tax
26revenue generated within the territory that is the subject of the
27jurisdictional change during the current fiscal year.
28(2) The auditor shall estimate what proportion of the property
29tax revenue determined pursuant to paragraph (1) is attributable
30to each local agency pursuant to Sections 96.1 and 96.5.
31(3) Within 45 days of notice of the filing of an application or
32resolution, the auditor shall notify the governing body of each local
33agency whose service area or service responsibility will be altered
34by the jurisdictional change of the amount of, and allocation factors
35with respect to, property tax revenue estimated pursuant to
36paragraph (2) that is subject to a negotiated exchange.
37(4) Upon receipt of the estimates pursuant to paragraph (3), the
38local agencies shall commence negotiations to determine the
39amount of property tax revenues to be exchanged between and
40among the local agencies. Except as otherwise provided, this
P23 1negotiation period shall not exceed 60 days. If a local agency
2involved in these negotiations notifies the other local agencies, the
3county auditor, and the local agency formation commission in
4writing of its desire to extend the negotiating period, the negotiating
5 period shall be 90 days.
6The exchange may be limited to an exchange of property tax
7revenues from the annual tax increment generated in the area
8subject to the jurisdictional change and attributable to the local
9agencies whose service area or service responsibilities will be
10altered by the proposed jurisdictional change. The final exchange
11resolution shall specify how the annual tax increment shall be
12allocated in future years.
13(5) In the event that a jurisdictional change would affect the
14service area or service responsibility of one or more special
15districts, the board of supervisors of the county or counties in which
16the districts are located shall, on behalf of the district or districts,
17negotiate any exchange of property tax revenues. Prior to entering
18into negotiation on behalf of a district for the exchange of property
19tax revenue, the board shall consult with the affected district. The
20 consultation shall include, at a minimum, notification to each
21member and executive officer of the district board of the pending
22consultation and provision of adequate opportunity to comment
23on the negotiation.
24(6) Notwithstanding any other provision of law, the executive
25officer shall not issue a certificate of filing pursuant to Section
2656658 of the Government Code until the local agencies included
27in the property tax revenue exchange negotiation, within the
28negotiation period, present resolutions adopted by each such county
29and city whereby each county and city agrees to accept the
30exchange of property tax revenues.
31(7) In the event that the commission modifies the proposal or
32its resolution of determination, any local agency whose service
33area or service responsibility would be altered by the proposed
34jurisdictional change may request, and the executive officer shall
35grant, 30 days for the affected agencies, pursuant to paragraph (4),
36to renegotiate an exchange of property tax revenues.
37Notwithstanding the time period specified in paragraph (4), if the
38resolutions required pursuant to paragraph (6) are not presented
39to the executive officer within the 30-day period, all proceedings
40of the jurisdictional change shall automatically be terminated.
P24 1(8) In the case of a jurisdictional change that consists of a city’s
2qualified annexation of unincorporated territory, an exchange of
3property tax revenues between the city and the county shall be
4determined in accordance with subdivision (e) if that exchange of
5revenues is not otherwise determined pursuant to either of the
7(A) Negotiations completed within the applicable period or
8periods as prescribed by this subdivision.
9(B) A master property tax exchange agreement among those
10local agencies, as described in subdivision (d).
11For purposes of this paragraph, a qualified annexation of
12unincorporated territory means an annexation, as so described, for
13which an application or a resolution was filed on or after January
141, 1998, and on or before January 1, 2021.
15(9) No later than the date on which the certificate of completion
16of the jurisdictional change is recorded with the county recorder,
17the executive officer shall notify the auditor or auditors of the
18exchange of property tax revenues and the auditor or auditors shall
19make the appropriate adjustments as provided in subdivision (a).
20(c) Whenever a jurisdictional change is not required to be
21reviewed and approved by a local agency formation commission,
22the local agencies whose service area or service responsibilities
23 would be altered by the proposed change, shall give notice to the
24State Board of Equalization and the assessor and auditor of each
25county within which the territory subject to the jurisdictional
26change is located. This notice shall specify each local agency
27whose service area or responsibility will be altered by the
28jurisdictional change and request the auditor and assessor to make
29the determinations required pursuant to paragraphs (1) and (2) of
30subdivision (b). Upon notification by the auditor of the amount
31of, and allocation factors with respect to, property tax subject to
32exchange, the local agencies, pursuant to the provisions of
33paragraphs (4) and (6) of subdivision (b), shall determine the
34amount of property tax revenues to be exchanged between and
35among the local agencies. Notwithstanding any other provision of
36law, no such jurisdictional change shall become effective until
37each county and city included in these negotiations agrees, by
38resolution, to accept the negotiated exchange of property tax
39 revenues. The exchange may be limited to an exchange of property
40tax revenue from the annual tax increment generated in the area
P25 1subject to the jurisdictional change and attributable to the local
2agencies whose service area or service responsibilities will be
3altered by the proposed jurisdictional change. The final exchange
4resolution shall specify how the annual tax increment shall be
5allocated in future years. Upon the adoption of the resolutions
6required pursuant to this section, the adopting agencies shall notify
7the auditor who shall make the appropriate adjustments as provided
8in subdivision (a). Adjustments in property tax allocations made
9as the result of a city or library district withdrawing from a county
10free library system pursuant to Section 19116 of the Education
11Code shall be made pursuant to Section 19116 of the Education
12Code, and this subdivision shall not apply.
13(d) With respect to adjustments in the allocation of property
14 taxes pursuant to this section, a county and any local agency or
15agencies within the county may develop and adopt a master
16property tax transfer agreement. The agreement may be revised
17from time to time by the parties subject to the agreement.
18(e) (1) An exchange of property tax revenues that is required
19by paragraph (8) of subdivision (b) to be determined pursuant to
20this subdivision shall be determined in accordance with all of the
22(A) The city and the county shall mutually select a third-party
23consultant to perform a comprehensive, independent fiscal analysis,
24funded in equal portions by the city and the county, that specifies
25estimates of all tax revenues that will be derived from the annexed
26territory and the costs of city and county services with respect to
27the annexed territory. The analysis shall be completed within a
28period not to exceed 30 days, and shall be based upon the general
29plan or adopted plans and policies of the annexing city and the
30intended uses for the annexed territory. If, upon the completion of
31the analysis period, no exchange of property tax revenues is agreed
32upon by the city and the county, subparagraph (B) shall apply.
33(B) The city and the county shall mutually select a mediator,
34funded in equal portions by those agencies, to perform mediation
35for a period not to exceed 30 days. If, upon the completion of the
36mediation period, no exchange of property tax revenues is agreed
37upon by the city and the county, subparagraph (C) shall apply.
38(C) The city and the county shall mutually select an
39funded in equal portions by those agencies, to conduct an advisory
40arbitration with the city and the county for a period not to exceed
P26 130 days. At the conclusion of this arbitration period, the city and
2the county shall each present to the arbitrator its last and best offer
3with respect to the exchange of property tax revenues. The
4arbitrator shall select one of the offers and recommend that offer
5to the governing bodies of the city and the county. If the governing
6body of the city or the county rejects the recommended offer, it
7shall do so during a public hearing, and shall, at the conclusion of
8that hearing, make written findings of fact as to why the
9recommended offer was not accepted.
10(2) Proceedings under this subdivision shall be concluded no
11more than 150 days after the auditor provides the notification
12pursuant to paragraph (3) of subdivision (b), unless one of the
13periods specified in this subdivision is extended by the mutual
14agreement of the city and the county. Notwithstanding any other
15provision of law, except for those conditions that are necessary to
16implement an exchange of property tax revenues determined
17pursuant to this subdivision, the local agency formation
18commission shall not impose any fiscal conditions upon a city’s
19qualified annexation of unincorporated territory that is subject to
21(f) Except as otherwise provided in subdivision (g), for the
22purpose of determining the amount of property tax to be allocated
23in the 1979-80 fiscal year and each fiscal year thereafter for those
24local agencies that were affected by a jurisdictional change which
25was filed with the State Board of Equalization after January 1,
261978, but on or before January 1, 1979. The local agencies shall
27determine by resolution the amount of property tax revenues to be
28exchanged between and among the affected agencies and notify
29the auditor of the determination.
30(g) For the purpose of determining the amount of property tax
31to be allocated in the 1979-80 fiscal year and each fiscal year
32thereafter, for a city incorporation that was filed pursuant to
33Sections 54900 to 54904, inclusive, of the Government Code after
34January 1, 1978, but on or before January 1, 1979, the amount of
35property tax revenue considered to have been received by the
36jurisdiction for the 1978-79 fiscal year shall be equal to two-thirds
37of the amount of property tax revenue projected in the final local
38agency formation commission staff report pertaining to the
39incorporation multiplied by the proportion that the total amount
40of property tax revenue received by all jurisdictions within the
P27 1county for the 1978-79 fiscal year bears to the total amount of
2property tax revenue received by all jurisdictions within the county
3for the 1977-78 fiscal year. Except, however, in the event that the
4final commission report did not specify the amount of property
5tax revenue projected for that incorporation, the commission shall
6by October 10 determine pursuant to Section 54790.3 of the
7Government Code the amount of property tax to be transferred to
9The provisions of this subdivision shall also apply to the
10allocation of property taxes for the 1980-81 fiscal year and each
11fiscal year thereafter for incorporations approved by the voters in
13(h) For the purpose of the computations made pursuant to this
14section, in the case of a district formation that was filed pursuant
15to Sections 54900 to 54904, inclusive, of the Government Code
16after January 1, 1978, but before January 1, 1979, the amount of
17property tax to be allocated to the district for the 1979-80 fiscal
18year and each fiscal year thereafter shall be determined pursuant
19to Section 54790.3 of the Government Code.
20(i) For the purposes of the computations required by this chapter,
21in the case of a jurisdictional change, other than a change requiring
22an adjustment by the auditor pursuant to subdivision (a), the auditor
23shall adjust the allocation of property tax revenue determined
24pursuant to Section 96 or 96.1 or its predecessor section, or the
25annual tax increment determined pursuant to Section 96.5 or its
26predecessor section, for each local school district, community
27college district, or county superintendent of schools whose service
28area or service responsibility would be altered by the jurisdictional
29change, as determined as follows:
30(1) The governing body of each district, county superintendent
31of schools, or county whose service areas or service responsibilities
32would be altered by the change shall determine the amount of
33property tax revenues to be exchanged between and among the
34affected jurisdictions. This determination shall be adopted by each
35affected jurisdiction by resolution. For the purpose of negotiation,
36the county auditor shall furnish the parties and the county board
37of education with an estimate of the property tax revenue subject
39(2) In the event that the affected jurisdictions are unable to agree,
40within 60 days after the effective date of the jurisdictional change,
P28 1and if all the jurisdictions are wholly within one county, the county
2board of education shall, by resolution, determine the amount of
3property tax revenue to be exchanged. If the jurisdictions are in
4more than one county, the State Board of Education shall, by
5resolution, within 60 days after the effective date of the
6jurisdictional change, determine the amount of property tax to be
8(3) Upon adoption of any resolution pursuant to this subdivision,
9the adopting jurisdictions or State Board of Education shall notify
10the county auditor who shall make the appropriate adjustments as
11provided in subdivision (a).
12(j) For purposes of subdivision (i), the annexation by a
13community college district of territory within a county not
14previously served by a community college district is an alteration
15of service area. The community college district and the county
16shall negotiate the amount, if any, of property tax revenues to be
17exchanged. In these negotiations, there shall be taken into
18consideration the amount of revenue received from the timber
19yield tax and forest reserve receipts by the community college
20district in the area not previously served. In no event shall the
21property tax revenue to be exchanged exceed the amount of
22property tax revenue collected prior to the annexation for the
23purposes of paying tuition expenses of residents enrolled in the
24community college district, adjusted each year by the percentage
25change in population and the percentage change in the cost of
26living, or per capita personal income, whichever is lower, less the
27amount of revenue received by the community college district in
28the annexed area from the timber yield tax and forest reserve
30(k) At any time after a jurisdictional change is effective, any of
31the local agencies party to the agreement to exchange property tax
32revenue may renegotiate the agreement with respect to the current
33fiscal year or subsequent fiscal years, subject to approval by all
34local agencies affected by the renegotiation.
If the Commission on State Mandates determines that
37this act contains costs mandated by the state, reimbursement to
38local agencies and school districts for those costs shall be made
P29 1pursuant to Part 7 (commencing with Section 17500) of Division
24 of Title 2 of the Government Code.