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
begin delete repeal this provisionend delete.
(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 56045.5 is added to the Government Code, to
“Indirect cost” has the same meaning as used in
4paragraph (2) of subdivision (b) of Section 33338 of the Education
Section 56653.1 is added to the Government Code, to
In the case of a disincorporation or reorganization
9that includes a disincorporation, the plan for services required by
10subdivision (a) of Section 56653 shall include the following:
11(a) An enumeration and description of the services currently
12provided by the city proposed for disincorporation and an
13identification, where applicable, of the entity or entities proposed
14to assume responsibility for the services following completion of
16(b) An enumeration and description of each service proposed
17to be discontinued or transferred, the current financing of the
18service or services, and any method of financing proposed by the
20(c) A delineation of any existing financing of services currently
21provided to include, but not be limited to, bonds, assessments,
22community facility district governance, general taxes, special taxes,
23other charges, and joint powers authorities or agreements.
24(d) An indication of any current bankruptcy proceeding,
25including, but not limited to, status and exit plan.
26(e) An indication of any current order relating to services
27provided by the city proposed for disincorporation by any agency,
28department, office, or other division of the state, including, but
29not limited to, a cease and desist order or water prohibition order.
30(f) A written
statement from each entity identified pursuant to
31subdivision (a) that it has received a copy of the plan for services
32submitted pursuant to this section.
33(g) Any other information that the executive officer may deem
34necessary to evaluate the plan for services submitted.
Section 56658 of the Government Code is amended
(a) Any petitioner or legislative body desiring to initiate
38proceedings shall submit an application to the executive officer of
39the principal county.
P9 1(b) (1) Immediately after receiving an application and before
2issuing a certificate of filing, the executive officer shall give mailed
3notice that the application has been received to each affected
4agency, the county committee on school district organization, and
5each school superintendent whose school district overlies the
6affected territory. The notice shall generally describe the proposal
7and the affected territory. The executive officer shall not be
8required to give notice pursuant to this subdivision if a local agency
9 has already given notice pursuant to subdivision (c) of Section
11(2) It is the intent of the Legislature that a proposal for
12incorporation or disincorporation shall be processed in a timely
13manner. With regard to an application that includes an
14incorporation or disincorporation, the executive officer shall
15immediately notify all affected local agencies and any applicable
16state agencies by mail and request the affected agencies to submit
17the required data to the commission within a reasonable timeframe
18established by the executive officer. Each affected agency shall
19respond to the executive officer within 15 days acknowledging
20receipt of the request. Each affected local agency and the officers
21and departments thereof shall submit the required data to the
22executive officer within the timelines established by the executive
23officer. Each affected state agency and the officers and departments
24thereof shall submit the required data to the executive officer within
25the timelines agreed upon by the executive officer and the affected
27(3) If a special district is, or as a result of a proposal will be,
28located in more than one county, the executive officer of the
29principal county shall immediately give the executive officer of
30each other affected county mailed notice that the application has
31been received. The notice shall generally describe the proposal
32and the affected territory.
33(c) Except when a commission is the lead agency pursuant to
34Section 21067 of the Public Resources Code, the executive officer
35shall determine within 30 days of receiving an application whether
36the application is complete and acceptable for filing or whether
37the application is incomplete.
38(d) The executive officer shall not accept an application for
39filing and issue a certificate of filing for at least 20 days after giving
40the mailed notice required by subdivision (b). The executive officer
P10 1shall not be required to comply with this subdivision in the case
2of an application which meets the requirements of Section 56662
3or in the case of an application for which a local agency has already
4given notice pursuant to subdivision (c) of Section 56654.
5(e) If the appropriate fees have been paid, an application shall
6be deemed accepted for filing if no determination has been made
7by the executive officer within the 30-day period. An executive
8officer shall accept for filing, and file, any application submitted
9in the form prescribed by the commission and containing all of
10the information and data required pursuant to Section 56652.
11(f) When an application is accepted for filing, the executive
12officer shall immediately issue a certificate of filing to the
13applicant. A certificate of filing shall be in the form prescribed by
14the executive officer and shall specify the date upon which the
15proposal shall be heard by the commission. From the date of
16issuance of a certificate of filing, or the date upon which an
17application is deemed to have been accepted, whichever is earlier,
18an application shall be deemed filed pursuant to this division.
19(g) If an application is determined not to be complete, the
20executive officer shall immediately transmit that determination to
21the applicant specifying those parts of the application which are
22incomplete and the manner in which they can be made complete.
23(h) Following the issuance of the certificate of filing, the
24executive officer shall proceed to set the proposal for hearing and
25give published notice thereof as provided in this part. The date of
26the hearing shall be not more than 90 days after issuance of the
27certificate of filing or after the application is deemed to have been
28accepted, whichever is earlier. Notwithstanding Section 56106,
29the date for conducting the hearing, as determined pursuant to this
30subdivision, is mandatory.
Section 56770 is added to the Government Code, to
The commission shall not approve or conditionally
34approve any proposal that includes a disincorporation, unless,
35based on the entire record, the commission makes all of the
37(a) The proposed disincorporation is consistent with the intent
38of this division to provide for a sustainable system for the delivery
P11 1(b) The commission has considered the service reviews of
2municipal services and spheres of influence of the affected local
3agencies, and the disincorporation will address the necessary
4changes to those spheres of influence, if any.
5(c) It has reviewed the comprehensive fiscal analysis prepared
6pursuant to Section 56804.
7(d) It has reviewed the executive officer’s report and
8recommendation prepared pursuant to Section 56665, and the oral
9or written testimony presented at its public hearing.
10(e) The service responsibilities of the city proposed for
11disincorporation have been assigned through terms and conditions
12authorized by Sections 56885.5, 56886, and 57302, and Chapter
135 (commencing with Section 57400) of Part 5.
Section 56804 is added to the Government Code, to
For any proposal that includes a disincorporation, the
17executive officer shall prepare, or cause to be prepared by contract,
18a comprehensive fiscal analysis. This analysis shall become part
19of the report required pursuant to Section 56665. Data used for the
20analysis shall be from the most recent fiscal year for which data
21is available, preceding the issuances of the certificate of filing.
22When data requested by the executive officer in the notice to
23affected agencies, pursuant to paragraph (2) of subdivision (b) of
24Section 56658, is unavailable, the analysis shall document the
25source and methodology of the data used. The analysis shall review
26and document each of the following:
27(a) The direct and indirect costs incurred by the city proposed
28for disincorporation for providing public services during the three
29fiscal years immediately preceding the submittal of the proposal
31(b) The direct and indirect costs incurred by the city proposed
32for disincorporation for current and proposed capital improvements,
33facilities, assets, and infrastructure.
34(c) The sources of funding, if any, available to the entities
35proposed to assume the obligations of the city proposed for
37(d) The anticipated costs, including all
begin delete actualend delete direct and indirect
begin delete to the successorend delete in the
40provision of services to the area proposed for disincorporation.
P12 1(e) 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.
4(f) The revenues of the city proposed for disincorporation during
5the three fiscal years immediately preceding the initiation of the
7(g) Any other information and analysis needed to make the
8findings required by Section 56770.
Section 56813 is added to the Government Code, to
(a) If the proposal includes the disincorporation of a
12city, as defined in Section 56034, the commission shall determine
13the amount of property tax revenue to be exchanged by the affected
14city and any successor or affected local agency pursuant to this
16(b) The commission shall notify the county auditor of the
17proposal, the affected local agencies to be extinguished, and the
18services proposed to be transferred to new jurisdictions, and
19identify for the auditor the changes to occur.
20(c) If the proposal would not transfer all of the service
21responsibilities of the disincorporating city to the affected county
22or to a single affected agency, the commission and the county
23 auditor shall do all of the following:
24(1) The county auditor shall determine the proportion that the
25amount of property tax revenue derived by the city being
26disincorporated pursuant to subdivision (b) of Section 93 of the
27Revenue and Taxation Code bears to the total amount of revenue
28from all sources, available for general purposes, received by the
29city being disincorporated in the prior fiscal year and provide his
30or her response within 15 days of receiving notification from the
31commission pursuant to subdivision (b). For purposes of making
32this determination and the determination required by paragraph
33(3), “total amount of revenue from all sources available for general
34purposes” means the total amount of revenue which the city being
35disincorporated may use on a discretionary basis for any purpose
36and does not include any of the following:
37(A) Revenue that, by statute or ordinance, is required to be used
38for a specific purpose.
P13 1(B) Revenue from fees, charges, or assessments that are levied
2to specifically offset the cost of particular services and that do not
3exceed the cost reasonably borne in providing these services.
4(C) Revenue received from the federal government that is
5required to be used for a specific purpose.
6(2) The commission shall determine, based on information
7submitted by the city being disincorporated, an amount equal to
8the total net cost to that city during the prior fiscal year of providing
9those services that an affected agency will assume within the area
10subject to the proposal. For purposes of this paragraph, “total net
11cost” means the total direct and indirect costs that were funded by
12general purpose revenues of the city being disincorporated and
13excludes any portion of the total cost that was funded by any
14revenues of that agency that are specified in subparagraphs (A),
15(B), and (C) of paragraph (1).
16(3) For the services to be transferred to each affected local
17agency, the commission shall multiply the amount determined
18pursuant to paragraph (2) by the proportion determined pursuant
19to paragraph (1) to derive the amount of property tax revenue used
20to provide services by the city being disincorporated during the
21prior fiscal year within the area subject to the proposal. The county
22auditor shall adjust the amount so determined by the annual tax
23increment pursuant to the procedures set forth in Chapter 6
24(commencing with Section 95) of Part 0.5 of Division 1 of the
25Revenue and Taxation Code, to the fiscal year in which the affected
26agency receives its next allocation of property taxes.
27(d) If the proposal for disincorporation would transfer all of the
28service responsibilities of the city proposed for disincorporation,
29other than those that are proposed to be discontinued, to a single
30successor, the commission shall request the auditor to determine
31the property tax revenue allocated to the city being disincorporated
32by tax rate area, or portion thereof, and transmit that information
33to the commission.
34(e) The executive officer shall notify the auditor of the amount
35determined pursuant to subdivision (c) or (d), as the case may be,
36and, where applicable, the period of time within which and the
37procedure by which the transfer of property tax revenues will be
38effected pursuant to this section, at the time the executive officer
39records a certificate of completion pursuant to Section 57203 for
40any proposal described in subdivision (a), and the auditor shall
P14 1transfer that amount to the affected agency or agencies that will
2assume the services as determined by the commission. Any
3property tax not transferred to an affected agency pursuant to
4subdivision (c) shall be transferred to the affected county.
5(f) For purposes of this section, “prior fiscal year” means the
6most recent fiscal year preceding the issuance of the certificate of
7filing for which data is available on actual direct and indirect costs
8and revenues needed to perform the calculations required by this
10(g) Any action brought by a city or district to contest
11any of the determinations of the county auditor or the commission
12with regard to the amount of property tax revenue to be exchanged
13by the affected local agencies pursuant to this section shall be
14commenced within three years of the effective date of the
Section 56814 is added to the Government Code, to
If the proposal includes the disincorporation of a city,
19as defined in Section 56034, with the assignment of property tax
20revenues to a successor the commission shall make the following
21determinations, as appropriate:
22(a) The increase of the appropriations limit for the successor if
23the successor is an existing entity.
24(b) The appropriations limit for a new special district through
25a 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
29that includes the disincorporation of a city result in a determination
30that the debt or contractual obligations and responsibilities of the
31city being disincorporated shall be the responsibility of that same
32territory for repayment. To ascertain this information, the city shall
33provide a written statement that determines and certifies all of the
34following to the commission prior to the issuance of a certificate
35of filing for a disincorporation proposal, pursuant to Sections 56651
37(1) The indebtedness of the city.
38(2) The amount of money in the city’s treasury.
39(3) The amount of any tax levy or other obligation due the city
40that is unpaid or has not been collected.
P15 1(4) The amount of current and future liabilities, both internal
2debt owed to other special or restricted funds or enterprise funds
3within the agency and external debt owed to other public agencies
4or outside lenders or that results from contractual obligations,
5which may include contracts for goods or services, retirement
6obligations, actuarially determined unfunded pension liability of
7all classes in a public retirement system, including any
8documentation related to the termination of public retirement
9contract provisions, and the liability for other postemployment
10benefits. The information required by this paragraph shall include
11any associated revenue stream for financing that may be or has
12been committed to that liability, including employee contributions.
13(b) The city shall provide a written statement identifying the
14successor agency to the city’s former redevelopment agency, if
15any, 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
19change of organization or reorganization, the commission may
20make that approval conditional upon any of the following factors:
21(1) Any of the conditions set forth in Section 56886.
22(2) The initiation, conduct, or completion of proceedings for
23another change of organization or a reorganization.
24(3) The approval or disapproval, with or without election, as
25may be provided by this division, of any resolution or ordinance
26ordering that change of organization or reorganization.
27(4) With respect to any commission determination to approve
28the disincorporation of a city, the dissolution of a district, or the
29reorganization or consolidation of agencies that results in the
30dissolution of one or more districts or the disincorporation of one
31or more cities, a condition that prohibits a district that is being
32dissolved or a city that is being disincorporated from taking any
33of the following actions, unless it first finds that either an
34emergency situation exists as defined in Section 54956.5, or the
35legislative body of the successor, as designated by the commission
36has taken action approving one or more of the following actions:
37(A) Approving any increase in compensation or benefits for
38members of the governing board, its officers, or the executive
39officer of the agency.
P16 1(B) Appropriating, encumbering, expending, or otherwise
2obligating, any revenue of the agency beyond that provided in the
3current budget at the time the commission approves the dissolution
5(b) If the commission so conditions its approval, the commission
6may order that any further action pursuant to this division be
7continued and held in abeyance for the period of time designated
8by the commission, not to exceed six months from the date of that
10(c) The commission order may also provide that any election
11called upon any change of organization or reorganization shall be
12called, held, and conducted before, upon the same date as, or after
13the date of any election to be called, held, and conducted upon any
14other change of organization or reorganization.
15(d) The commission order may also provide that in any election
16at which the questions of annexation and district reorganization
17or, incorporation and district reorganization, or disincorporation
18and district reorganization are to be considered at the same time,
19there shall be a single question appearing on the ballot upon the
20issues of annexation and district reorganization or incorporation
21and district reorganization.
Section 56886 of the Government Code is amended
Any change of organization or reorganization may
25provide for, or be made subject to one or more of, the following
26terms and conditions. If a change of organization or reorganization
27is made subject to one or more of the following terms and
28conditions in the commission’s resolution making determinations,
29the terms and conditions imposed shall prevail in the event of a
30conflict between a specific term and condition authorized pursuant
31to this section and any of the general provisions of Part 5
32(commencing with Section 57300). However, none of the following
33terms and conditions shall directly regulate land use, property
34development, or subdivision requirements:
35(a) The payment of a fixed or determinable
amount of money,
36either as a lump sum or in installments, for the acquisition, transfer,
37use, or right of use of all or any part of the existing property, real
38or personal, of any city, county, or district.
P17 1(b) The levying or fixing and the collection of any of the
2following, for the purpose of providing for any payment required
3pursuant to subdivision (a):
4(1) Special, extraordinary, or additional taxes or assessments.
5(2) Special, extraordinary, or additional service charges, rentals,
7(3) Both taxes or assessments and service charges, rentals, or
9(c) The imposition, exemption,
transfer, division, or
10apportionment, as among any affected cities, affected counties,
11affected districts, and affected territory of liability for payment of
12all or any part of principal, interest, and any other amounts which
13shall become due on account of all or any part of any outstanding
14or then authorized but thereafter issued bonds, including revenue
15bonds, or other contracts or obligations of any city, county, district,
16or any improvement district within a local agency, and the levying
17or fixing and the collection of any (1) taxes or assessments, or (2)
18service charges, rentals, or rates, or (3) both taxes or assessments
19and service charges, rentals, or rates, in the same manner as
20provided in the original authorization of the bonds and in the
21amount necessary to provide for that payment.
22(d) If, as a result of any term or condition
made pursuant to
23subdivision (c), the liability of any affected city, affected county,
24or affected district for payment of the principal of any bonded
25indebtedness is increased or decreased, the term and condition
26may specify the amount, if any, of that increase or decrease which
27 shall be included in, or excluded from, the outstanding bonded
28indebtedness of that entity for the purpose of the application of
29any statute or charter provision imposing a limitation upon the
30principal amount of outstanding bonded indebtedness of the entity.
31(e) The formation of a new improvement district or districts or
32the annexation or detachment of territory to, or from, any existing
33improvement district or districts.
34(f) The incurring of new indebtedness or liability by, or on behalf
35of, all or any part of any local agency, including territory being
36annexed to any local agency, or of any existing or proposed new
37improvement district within that local agency. The new
38indebtedness may be the obligation solely of territory to be annexed
39if the local agency has the authority to establish zones for incurring
40indebtedness. The indebtedness or liability shall be incurred
P18 1 substantially in accordance with the laws otherwise applicable to
2the local agency.
3(g) The issuance and sale of any bonds, including authorized
4but unissued bonds of a local agency, either by that local agency
5or by a local agency designated as the successor to any local agency
6which is extinguished as a result of any change of organization or
8(h) The acquisition, improvement, disposition, sale, transfer, or
9division of any property, real or personal.
10(i) The disposition, transfer, or division of any moneys or funds,
11including cash on hand and moneys due but uncollected, and any
13(j) The fixing and establishment
of priorities of use, or right of
14use, of water, or capacity rights in any public improvements or
15facilities or any other property, real or personal. However, none
16of the terms and conditions ordered pursuant to this subdivision
17shall modify priorities of use, or right of use, to water, or capacity
18rights in any public improvements or facilities that have been fixed
19and established by a court or an order of the State Water Resources
21(k) The establishment, continuation, or termination of any office,
22department, or board, or the transfer, combining, consolidation,
23or separation of any offices, departments, or boards, or any of the
24functions of those offices, departments, or boards, if, and to the
25extent that, any of those matters is authorized by the principal act.
26(l) The employment, transfer, or discharge of employees, the
27continuation, modification, or termination of existing employment
28contracts, civil service rights, seniority rights, retirement rights,
29and other employee benefits and rights.
30(m) The designation of a city, county, or district, as the successor
31to any local agency that is extinguished as a result of any change
32of organization or reorganization, for the purpose of succeeding
33to all of the rights, duties, and obligations of the extinguished local
34agency with respect to enforcement, performance, or payment of
35any outstanding bonds, including revenue bonds, or other contracts
36and obligations of the extinguished local agency.
37(n) The designation of (1) the method for the selection of
38members of the legislative body of a district or (2) the number of
39those members, or (3) both, where the proceedings are for a
40consolidation, or a reorganization providing for a consolidation or
P19 1formation of a new district and the principal act provides for
2alternative methods of that selection or for varying numbers of
3those members, or both.
4(o) The initiation, conduct, or completion of proceedings on a
5proposal made under, and pursuant to, this division.
6(p) The fixing of the effective date or dates of any change of
7organization, subject to the limitations of Section 57202.
8(q) Any terms and conditions authorized or required by the
9principal act with respect to any change of organization.
10(r) The continuation or provision of any service provided at that
11time, or previously authorized to be provided by an official act of
12the local agency.
13(s) The levying of either of the following:
14(1) Assessments or fees, including the imposition of a fee
15pursuant to Section 50029 or 66484.3. For the purposes of this
16section, imposition of a fee as a condition of the issuance of a
17building permit does not constitute direct regulation of land use,
18property development, or subdivision requirements.
19(2) General or special taxes subject to approval by the voters.
20(t) The extension or continuation of any previously authorized
21charge, fee, assessment, or tax by the local agency or a successor
22local agency in the affected territory.
23(u) The transfer of authority and responsibility among any
24affected cities, affected counties, and affected districts for the
25administration of special tax and special assessment districts,
26including, but not limited to, the levying and collecting of special
27taxes and special assessments, including the determination of the
28annual special tax rate within authorized limits; the management
29of redemption, reserve, special reserve, and construction funds;
30the issuance of bonds which are authorized but not yet issued at
31the time of the transfer, including not yet issued portions or phases
32of bonds which are authorized; supervision of construction paid
33for with bond or special tax or assessment proceeds; administration
34of agreements to acquire public facilities and reimburse advances
35made to the district; and all other rights and responsibilities with
36respect to the levies, bonds, funds, and use of proceeds that would
37have applied to the local agency that created the special tax or
38special assessment district.
39(v) Any other matters necessary or incidental to any of the terms
40and conditions specified in this section. If a change of organization,
P20 1reorganization, or special reorganization provides for, or is made
2subject to one or more of, the terms and conditions specified in
3this section, those terms and conditions shall be deemed to be the
4exclusive terms and conditions for the change of organization,
5reorganization, or special reorganization, and shall control over
6any general provisions of Part 5 (commencing with Section 57300).
Section 57401 of the Government Code is repealed.end delete
Prior to the effective date of the disincorporation,
begin delete everyend delete
11 public officer of the
begin delete turn over to the board of supervisors the public property .
14in his or her possessionend delete
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
21remains uncollected, the county tax collector shall collect it when
22due and pay it into the county treasury on behalf of the designated
23successor 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
33the following apply:
34(a) The general plan of the disincorporated city that was in effect
35immediately prior to the effective date of the disincorporation shall
36constitute the community plan of the county for the territory of
37the disincorporated city until the county updates the community
38plan, adopts a specific plan, or amends its county general plan for
39the unincorporated territory.
P21 1(b) The zoning ordinances of the disincorporated city that were
2in effect immediately prior to the effective date of the
3disincorporation shall constitute the zoning ordinances of the
4county for that territory, and shall be so identified in any
5community plan, specific plan, or general plan amendment adopted
6by the county, until the county updates the zoning ordinances
7applicable to that territory.
8(c) Any conditional use permit or legal nonconforming use that
9was in place immediately prior to the effective date of the
10disincorporation shall remain in force pursuant to the community
11plan and zoning ordinances.
12(d) Any use of land that was authorized under the general plan
13and zoning ordinances immediately prior to the effective date of
14the disincorporation shall continue to be authorized, for as long a
15period as may be required by the California Constitution or United
Section 99 of the Revenue and Taxation Code is
18amended to read:
(a) For the purposes of the computations required by this
21(1) In the case of a jurisdictional change, other than a city
22incorporation, city disincorporation, or a formation of a district as
23defined in Section 2215, the auditor shall adjust the allocation of
24property tax revenue determined pursuant to Section 96 or 96.1,
25or the annual tax increment determined pursuant to Section 96.5,
26for local agencies whose service area or service responsibility
27would be altered by the jurisdictional change, as determined
28pursuant to subdivision (b) or (c).
29(2) In the case of a city incorporation or disincorporation, the
30auditor shall assign the allocation of property tax revenues
31determined pursuant to Section 56810 of the Government Code
32and the adjustments in tax revenues that may occur pursuant to
33Section 56815 of the Government Code to the newly formed city
34or district and shall make the adjustment as determined by Section
3556810 or 56813 in the allocation of property tax revenue
36determined pursuant to Section 96 or 96.1 for each local agency
37whose service area or service responsibilities would be altered by
39(3) In the case of a formation of a district as defined in Section
402215, the auditor shall assign the allocation of property tax
P22 1revenues determined pursuant to Section 56810 of the Government
2Code to the district and shall make the adjustment as determined
3by Section 56810, or for the disincorporated city or dissolved
4district as determined by Section 56813, in the allocation of
5property tax revenue determined pursuant to Section 96 or 96.1
6for each local agency whose service area or service responsibilities
7would be altered by the change of organization.
8(b) Upon the filing of an application or a resolution pursuant to
9the Cortese-Knox-Hertzberg Local Government Reorganization
10Act of 2000 (Division 3 (commencing with Section 56000) of Title
115 of the Government Code), but prior to the issuance of a certificate
12of filing, the executive officer shall give notice of the filing to the
13assessor and auditor of each county within which the territory
14subject to the jurisdictional change is located. This notice shall
15specify each local agency whose service area or responsibility will
16be altered by the jurisdictional change.
17(1) (A) The county assessor shall provide to the county auditor,
18within 30 days of the notice of filing, a report which identifies the
19assessed valuations for the territory subject to the jurisdictional
20change and the tax rate area or areas in which the territory exists.
21(B) The auditor shall estimate the amount of property tax
22revenue generated within the territory that is the subject of the
23jurisdictional change during the current fiscal year.
24(2) The auditor shall estimate what proportion of the property
25tax revenue determined pursuant to paragraph (1) is attributable
26to each local agency pursuant to Sections 96.1 and 96.5.
27(3) Within 45 days of notice of the filing of an application or
28resolution, the auditor shall notify the governing body of each local
29agency whose service area or service responsibility will be altered
30by the jurisdictional change of the amount of, and allocation factors
31with respect to, property tax revenue estimated pursuant to
32paragraph (2) that is subject to a negotiated exchange.
33(4) Upon receipt of the estimates pursuant to paragraph (3), the
34local agencies shall commence negotiations to determine the
35amount of property tax revenues to be exchanged between and
36among the local agencies. Except as otherwise provided, this
37negotiation period shall not exceed 60 days. If a local agency
38involved in these negotiations notifies the other local agencies, the
39county auditor, and the local agency formation commission in
P23 1writing of its desire to extend the negotiating period, the negotiating
2 period shall be 90 days.
3The exchange may be limited to an exchange of property tax
4revenues from the annual tax increment generated in the area
5subject to the jurisdictional change and attributable to the local
6agencies whose service area or service responsibilities will be
7altered by the proposed jurisdictional change. The final exchange
8resolution shall specify how the annual tax increment shall be
9allocated in future years.
10(5) In the event that a jurisdictional change would affect the
11service area or service responsibility of one or more special
12districts, the board of supervisors of the county or counties in which
13the districts are located shall, on behalf of the district or districts,
14negotiate any exchange of property tax revenues. Prior to entering
15into negotiation on behalf of a district for the exchange of property
16tax revenue, the board shall consult with the affected district. The
17 consultation shall include, at a minimum, notification to each
18member and executive officer of the district board of the pending
19consultation and provision of adequate opportunity to comment
20on the negotiation.
21(6) Notwithstanding any other provision of law, the executive
22officer shall not issue a certificate of filing pursuant to Section
2356658 of the Government Code until the local agencies included
24in the property tax revenue exchange negotiation, within the
25negotiation period, present resolutions adopted by each such county
26and city whereby each county and city agrees to accept the
27exchange of property tax revenues.
28(7) In the event that the commission modifies the proposal or
29its resolution of determination, any local agency whose service
30area or service responsibility would be altered by the proposed
31jurisdictional change may request, and the executive officer shall
32grant, 30 days for the affected agencies, pursuant to paragraph (4),
33to renegotiate an exchange of property tax revenues.
34Notwithstanding the time period specified in paragraph (4), if the
35resolutions required pursuant to paragraph (6) are not presented
36to the executive officer within the 30-day period, all proceedings
37of the jurisdictional change shall automatically be terminated.
38(8) In the case of a jurisdictional change that consists of a city’s
39qualified annexation of unincorporated territory, an exchange of
40property tax revenues between the city and the county shall be
P24 1determined in accordance with subdivision (e) if that exchange of
2revenues is not otherwise determined pursuant to either of the
4(A) Negotiations completed within the applicable period or
5periods as prescribed by this subdivision.
6(B) A master property tax exchange agreement among those
7local agencies, as described in subdivision (d).
8For purposes of this paragraph, a qualified annexation of
9unincorporated territory means an annexation, as so described, for
10which an application or a resolution was filed on or after January
111, 1998, and on or before January 1, 2021.
12(9) No later than the date on which the certificate of completion
13of the jurisdictional change is recorded with the county recorder,
14the executive officer shall notify the auditor or auditors of the
15exchange of property tax revenues and the auditor or auditors shall
16make the appropriate adjustments as provided in subdivision (a).
17(c) Whenever a jurisdictional change is not required to be
18reviewed and approved by a local agency formation commission,
19the local agencies whose service area or service responsibilities
20 would be altered by the proposed change, shall give notice to the
21State Board of Equalization and the assessor and auditor of each
22county within which the territory subject to the jurisdictional
23change is located. This notice shall specify each local agency
24whose service area or responsibility will be altered by the
25jurisdictional change and request the auditor and assessor to make
26the determinations required pursuant to paragraphs (1) and (2) of
27subdivision (b). Upon notification by the auditor of the amount
28of, and allocation factors with respect to, property tax subject to
29exchange, the local agencies, pursuant to the provisions of
30paragraphs (4) and (6) of subdivision (b), shall determine the
31amount of property tax revenues to be exchanged between and
32among the local agencies. Notwithstanding any other provision of
33law, no such jurisdictional change shall become effective until
34each county and city included in these negotiations agrees, by
35resolution, to accept the negotiated exchange of property tax
36 revenues. The exchange may be limited to an exchange of property
37tax revenue from the annual tax increment generated in the area
38subject to the jurisdictional change and attributable to the local
39agencies whose service area or service responsibilities will be
40altered by the proposed jurisdictional change. The final exchange
P25 1resolution shall specify how the annual tax increment shall be
2allocated in future years. Upon the adoption of the resolutions
3required pursuant to this section, the adopting agencies shall notify
4the auditor who shall make the appropriate adjustments as provided
5in subdivision (a). Adjustments in property tax allocations made
6as the result of a city or library district withdrawing from a county
7free library system pursuant to Section 19116 of the Education
8Code shall be made pursuant to Section 19116 of the Education
9Code, and this subdivision shall not apply.
10(d) With respect to adjustments in the allocation of property
11 taxes pursuant to this section, a county and any local agency or
12agencies within the county may develop and adopt a master
13property tax transfer agreement. The agreement may be revised
14from time to time by the parties subject to the agreement.
15(e) (1) An exchange of property tax revenues that is required
16by paragraph (8) of subdivision (b) to be determined pursuant to
17this subdivision shall be determined in accordance with all of the
19(A) The city and the county shall mutually select a third-party
20consultant to perform a comprehensive, independent fiscal analysis,
21funded in equal portions by the city and the county, that specifies
22estimates of all tax revenues that will be derived from the annexed
23territory and the costs of city and county services with respect to
24the annexed territory. The analysis shall be completed within a
25period not to exceed 30 days, and shall be based upon the general
26plan or adopted plans and policies of the annexing city and the
27intended uses for the annexed territory. If, upon the completion of
28the analysis period, no exchange of property tax revenues is agreed
29upon by the city and the county, subparagraph (B) shall apply.
30(B) The city and the county shall mutually select a mediator,
31funded in equal portions by those agencies, to perform mediation
32for a period not to exceed 30 days. If, upon the completion of the
33mediation period, no exchange of property tax revenues is agreed
34upon by the city and the county, subparagraph (C) shall apply.
35(C) The city and the county shall mutually select
36funded in equal portions by those agencies, to conduct an advisory
37arbitration with the city and the county for a period not to exceed
3830 days. At the conclusion of this arbitration period, the city and
39the county shall each present to the arbitrator its last and best offer
40with respect to the exchange of property tax revenues. The
P26 1arbitrator shall select one of the offers and recommend that offer
2to the governing bodies of the city and the county. If the governing
3body of the city or the county rejects the recommended offer, it
4shall do so during a public hearing, and shall, at the conclusion of
5that hearing, make written findings of fact as to why the
6recommended offer was not accepted.
7(2) Proceedings under this subdivision shall be concluded no
8more than 150 days after the auditor provides the notification
9pursuant to paragraph (3) of subdivision (b), unless one of the
10periods specified in this subdivision is extended by the mutual
11agreement of the city and the county. Notwithstanding any other
12provision of law, except for those conditions that are necessary to
13implement an exchange of property tax revenues determined
14pursuant to this subdivision, the local agency formation
15commission shall not impose any fiscal conditions upon a city’s
16qualified annexation of unincorporated territory that is subject to
18(f) Except as otherwise provided in subdivision (g), for the
19purpose of determining the amount of property tax to be allocated
20in the 1979-80 fiscal year and each fiscal year thereafter for those
21local agencies that were affected by a jurisdictional change which
22was filed with the State Board of Equalization after January 1,
231978, but on or before January 1, 1979. The local agencies shall
24determine by resolution the amount of property tax revenues to be
25exchanged between and among the affected agencies and notify
26the auditor of the determination.
27(g) For the purpose of determining the amount of property tax
28to be allocated in the 1979-80 fiscal year and each fiscal year
29thereafter, for a city incorporation that was filed pursuant to
30Sections 54900 to 54904, inclusive, of the Government Code after
31January 1, 1978, but on or before January 1, 1979, the amount of
32property tax revenue considered to have been received by the
33jurisdiction for the 1978-79 fiscal year shall be equal to two-thirds
34of the amount of property tax revenue projected in the final local
35agency formation commission staff report pertaining to the
36incorporation multiplied by the proportion that the total amount
37of property tax revenue received by all jurisdictions within the
38county for the 1978-79 fiscal year bears to the total amount of
39property tax revenue received by all jurisdictions within the county
40for the 1977-78 fiscal year. Except, however, in the event that the
P27 1final commission report did not specify the amount of property
2tax revenue projected for that incorporation, the commission shall
3by October 10 determine pursuant to Section 54790.3 of the
4Government Code the amount of property tax to be transferred to
6The provisions of this subdivision shall also apply to the
7allocation of property taxes for the 1980-81 fiscal year and each
8fiscal year thereafter for incorporations approved by the voters in
10(h) For the purpose of the computations made pursuant to this
11section, in the case of a district formation that was filed pursuant
12to Sections 54900 to 54904, inclusive, of the Government Code
13after January 1, 1978, but before January 1, 1979, the amount of
14property tax to be allocated to the district for the 1979-80 fiscal
15year and each fiscal year thereafter shall be determined pursuant
16to Section 54790.3 of the Government Code.
17(i) For the purposes of the computations required by this chapter,
18in the case of a jurisdictional change, other than a change requiring
19an adjustment by the auditor pursuant to subdivision (a), the auditor
20shall adjust the allocation of property tax revenue determined
21pursuant to Section 96 or 96.1 or its predecessor section, or the
22annual tax increment determined pursuant to Section 96.5 or its
23predecessor section, for each local school district, community
24college district, or county superintendent of schools whose service
25area or service responsibility would be altered by the jurisdictional
26change, as determined as follows:
27(1) The governing body of each district, county superintendent
28of schools, or county whose service areas or service responsibilities
29would be altered by the change shall determine the amount of
30property tax revenues to be exchanged between and among the
31affected jurisdictions. This determination shall be adopted by each
32affected jurisdiction by resolution. For the purpose of negotiation,
33the county auditor shall furnish the parties and the county board
34of education with an estimate of the property tax revenue subject
36(2) In the event that the affected jurisdictions are unable to agree,
37within 60 days after the effective date of the jurisdictional change,
38and if all the jurisdictions are wholly within one county, the county
39board of education shall, by resolution, determine the amount of
40property tax revenue to be exchanged. If the jurisdictions are in
P28 1more than one county, the State Board of Education shall, by
2resolution, within 60 days after the effective date of the
3jurisdictional change, determine the amount of property tax to be
5(3) Upon adoption of any resolution pursuant to this subdivision,
6the adopting jurisdictions or State Board of Education shall notify
7the county auditor who shall make the appropriate adjustments as
8provided in subdivision (a).
9(j) For purposes of subdivision (i), the annexation by a
10community college district of territory within a county not
11previously served by a community college district is an alteration
12of service area. The community college district and the county
13shall negotiate the amount, if any, of property tax revenues to be
14exchanged. In these negotiations, there shall be taken into
15consideration the amount of revenue received from the timber
16yield tax and forest reserve receipts by the community college
17district in the area not previously served. In no event shall the
18property tax revenue to be exchanged exceed the amount of
19property tax revenue collected prior to the annexation for the
20purposes of paying tuition expenses of residents enrolled in the
21community college district, adjusted each year by the percentage
22change in population and the percentage change in the cost of
23living, or per capita personal income, whichever is lower, less the
24amount of revenue received by the community college district in
25the annexed area from the timber yield tax and forest reserve
27(k) At any time after a jurisdictional change is effective, any of
28the local agencies party to the agreement to exchange property tax
29revenue may renegotiate the agreement with respect to the current
30fiscal year or subsequent fiscal years, subject to approval by all
31local agencies affected by the renegotiation.
If the Commission on State Mandates determines
33that this act contains costs mandated by the state, reimbursement
34to local agencies and school districts for those costs shall be made
35pursuant to Part 7 (commencing with Section 17500) of Division
364 of Title 2 of the Government Code.