AB 2032: Change of organization: cities: disincorporation.
- Session Year: 2015-2016
- House: Assembly
- Latest Version Date: 2016-08-22
(1)Existing law, the Cortese-Knox-Hertzberg Local Government Reorganization Act of 2000, requires the executive officer of a local agency formation commission to prepare a comprehensive fiscal analysis for any proposal that includes a disincorporation, as specified. Existing law requires the comprehensive fiscal analysis to include, among other things, a review and documentation of specified costs associated with the proposed disincorporation.
This bill would additionally require the comprehensive fiscal analysis to include a review and documentation of all current and long-term liabilities of the city proposed for disincorporation and the potential financing mechanism or mechanisms to address any identified shortfalls and obligations, as specified.
(2)The act states 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. To ascertain this information, the act requires the city being disincorporated to provide a written statement that includes specified information relating to its debts and contractual obligations.
This bill would additionally require that statement to include the amount of any assessment due the city that is unpaid or uncollected.
(3)The act requires the county tax collector to collect a tax that has been levied by the disincorporated city that remains uncollected.
This bill would additionally require the county tax collector to collect an assessment that has been levied by the disincorporated city that remains uncollected. By imposing new duties on local officials, this bill would impose a state-mandated local program.
(4)The act requires the board of supervisors to provide for the collection of debts due to a city being disincorporated and to wind up its affairs, as specified.
This bill would instead require the governing board of the successor to provide for the collection of debts due to the city and to wind up its affairs, as specified.
(5)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.
(1)Existing law, the Cortese-Knox-Hertzberg Local Government Reorganization Act of 2000, requires the executive officer of a local agency formation commission to prepare a comprehensive fiscal analysis for any proposal that includes a disincorporation, as specified. Existing law requires the comprehensive fiscal analysis to include, among other things, a review and documentation of specified costs associated with the proposed disincorporation.
This bill would additionally require the comprehensive fiscal analysis to include a review and documentation of all current and long-term liabilities of the city proposed for disincorporation and the potential financing mechanism or mechanisms to address any identified shortfalls and obligations, as specified.
(2)The act states 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. To ascertain this information, the act requires the city being disincorporated to provide a written statement that includes specified information relating to its debts and contractual obligations.
This bill would additionally require that statement to include the amount of any assessment due the city that is unpaid or uncollected.
(3)The act requires the county tax collector to collect a tax that has been levied by the disincorporated city that remains uncollected.
This bill would additionally require the county tax collector to collect an assessment that has been levied by the disincorporated city that remains uncollected. By imposing new duties on local officials, this bill would impose a state-mandated local program.
(4)The act requires the board of supervisors to provide for the collection of debts due to a city being disincorporated and to wind up its affairs, as specified.
This bill would instead require the governing board of the successor to provide for the collection of debts due to the city and to wind up its affairs, as specified.
(5)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.
(1)Existing law, the Cortese-Knox-Hertzberg Local Government Reorganization Act of 2000, requires the executive officer of a local agency formation commission to prepare a comprehensive fiscal analysis for any proposal that includes a disincorporation, as specified. Existing law requires the comprehensive fiscal analysis to include, among other things, a review and documentation of specified costs associated with the proposed disincorporation.
This bill would additionally require the comprehensive fiscal analysis to include a review and documentation of all current and long-term liabilities of the city proposed for disincorporation and the potential financing mechanism or mechanisms to address any identified shortfalls and obligations, as specified.
(2)The act states 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. To ascertain this information, the act requires the city being disincorporated to provide a written statement that includes specified information relating to its debts and contractual obligations.
This bill would additionally require that statement to include the amount of any assessment due the city that is unpaid or uncollected.
(3)The act requires the county tax collector to collect a tax that has been levied by the disincorporated city that remains uncollected.
This bill would additionally require the county tax collector to collect an assessment that has been levied by the disincorporated city that remains uncollected. By imposing new duties on local officials, this bill would impose a state-mandated local program.
(4)The act requires the board of supervisors to provide for the collection of debts due to a city being disincorporated and to wind up its affairs, as specified.
This bill would instead require the governing board of the successor to provide for the collection of debts due to the city and to wind up its affairs, as specified.
(5)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.
(1)Existing law, the Cortese-Knox-Hertzberg Local Government Reorganization Act of 2000, requires the executive officer of a local agency formation commission to prepare a comprehensive fiscal analysis for any proposal that includes a disincorporation, as specified. Existing law requires the comprehensive fiscal analysis to include, among other things, a review and documentation of specified costs associated with the proposed disincorporation.
This bill would additionally require the comprehensive fiscal analysis to include a review and documentation of all current and long-term liabilities of the city proposed for disincorporation. disincorporation and the potential financing mechanism or mechanisms to address any identified shortfalls and obligations, as specified.
(2)The act states 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. To ascertain this information, the act requires the city being disincorporated to provide a written statement that includes specified information relating to its debts and contractual obligations.
This bill would additionally require that statement to include the amount of any assessment due the city that is unpaid or uncollected.
(3)The act requires the county tax collector to collect a tax that has been levied by the disincorporated city that remains uncollected.
This bill would additionally require the county tax collector to collect an assessment that has been levied by the disincorporated city that remains uncollected. By imposing new duties on local officials, this bill would impose a state-mandated local program.
(4)The act requires the board of supervisors to provide for the collection of debts due to a city being disincorporated and to wind up its affairs, as specified.
This bill would instead require the governing board of the successor to provide for the collection of debts due to the city and to wind up its affairs, as specified.
(5)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.
(1)Existing law, the Cortese-Knox-Hertzberg Local Government Reorganization Act of 2000, provides the authority and procedure for the initiation, conduct, and completion of changes of organization and reorganization for cities and districts. The act prohibits the local area formation commission from approving or conditionally approving any proposal that includes a disincorporation of a city unless the commission determines, 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.
This bill would additionally require the commission to determine that the proposed disincorporation is consistent with the intent that all debt and contractual obligations and responsibilities of the city being disincorporated be the responsibility of the same territory for repayment, that existing and projected future revenues of the city to be disincorporated are sufficient to meet all expenditures, debts, and obligations of the former city, as specified, and that the appropriate appointing power of the successor or successors approves the terms of continuing employment or transfer of any employees from employment with the disincorporated city to employment with the successor or successors. By imposing new duties on local officials, this bill would impose a state-mandated local program.
(2)
(1)Existing law law, the Cortese-Knox-Hertzberg Local Government Reorganization Act of 2000, requires the executive officer of the a local agency formation commission to prepare a comprehensive fiscal analysis for any proposal that includes an incorporation, a disincorporation, as specified. Existing law requires the comprehensive fiscal analysis to include, among other things, a review and documentation of specified costs associated with the proposed disincorporation.
This bill would require the comprehensive fiscal analysis to include an analysis of the former citys most recently completed financial statements audited by a certified public accountant, as specified. The bill would additionally require the executive officer to obtain written input from the successor or successors proposed to assume responsibility for the former citys operations during the preparation of the comprehensive fiscal analysis, as specified. The bill would additionally require the comprehensive fiscal analysis to include, among other things, include a review and documentation of all debt obligations and current and long-term liabilities of the city proposed for disincorporation and specified revenue sources. The bill would require the executive officer to provide the successor or successors at least 30 days to evaluate and validate the accuracy and sufficiency of the data used to prepare the comprehensive fiscal analysis. By imposing new duties on local officials, this bill would impose a state-mandated local program. disincorporation.
(3)Existing law requires 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 sets forth the procedures to be followed in making that determination.
This bill would revise these provisions to require the determination to be included in the comprehensive fiscal analysis, as specified.
(4)Existing law
(2)The act states 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. Existing law To ascertain this information, the act requires 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.
This bill would additionally require that statement to include, among other things, the amount of money in the possession of custodians and trustees and an identification of whether any of the money is restricted, and a statement of whether there is any pending or potential litigation or claims against the city proposed to be disincorporated. include the amount of any assessment due the city that is unpaid or uncollected.
(5)Existing law
(3)The act requires the county tax collector to collect a tax that has been levied by the disincorporated city that remains uncollected.
This bill would additionally require the county tax collector to collect an assessment that has been levied by the disincorporated city that remains uncollected. By imposing new duties on local officials, this bill would impose a state-mandated local program.
(6)Existing law requires all money paid into the county treasury pursuant to provisions relating to the disincorporation of a city to be placed to the credit of a special fund established for the purpose of settling the affairs of the disincorporated city.
This bill would provide that the successor or successors to the disincorporated city are not liable to creditors of the former city, if at all, other than for those amounts actually paid into that special fund.
(7)Existing law
(4)The act requires the board of supervisors to provide for the collection of debts due to a city being disincorporated and to wind up its affairs, as specified.
This bill would instead require the governing board of the successor to the city being disincorporated to provide for the collection of debts due to the city and to wind up its affairs, as specified.
The
(5)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.
Existing
(1)Existing law, the Cortese-Knox-Hertzberg Local Government Reorganization Act of 2000, provides the authority and procedure for the initiation, conduct, and completion of changes of organization and reorganization for cities and districts. The act prohibits the local area formation commission from approving or conditionally approving any proposal that includes a disincorporation of a city unless the commission determines, 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.
This bill would make a nonsubstantive change to this provision.
This bill would additionally require the commission to determine that the proposed disincorporation is consistent with the intent that all debt and contractual obligations and responsibilities of the city being disincorporated be the responsibility of the same territory for repayment, that existing and projected future revenues of the city to be disincorporated are sufficient to meet all expenditures, debts, and obligations of the former city, as specified, and that the appropriate appointing power of the successor or successors approves the terms of continuing employment or transfer of any employees from employment with the disincorporated city to employment with the successor or successors. By imposing new duties on local officials, this bill would impose a state-mandated local program.
(2)Existing law requires the executive officer of the commission to prepare a comprehensive fiscal analysis for any proposal that includes an incorporation, as specified. Existing law requires the comprehensive fiscal analysis to include, among other things, a review and documentation of specified costs associated with the proposed disincorporation.
This bill would require the comprehensive fiscal analysis to include an analysis of the former citys most recently completed financial statements audited by a certified public accountant, as specified. The bill would additionally require the executive officer to obtain written input from the successor or successors proposed to assume responsibility for the former citys operations during the preparation of the comprehensive fiscal analysis, as specified. The bill would additionally require the comprehensive fiscal analysis to include, among other things, a review and documentation of all debt obligations and current long-term liabilities of the city proposed for disincorporation and specified revenue sources. The bill would require the executive officer to provide the successor or successors at least 30 days to evaluate and validate the accuracy and sufficiency of the data used to prepare the comprehensive fiscal analysis. By imposing new duties on local officials, this bill would impose a state-mandated local program.
(3)Existing law requires 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 sets forth the procedures to be followed in making that determination.
This bill would revise these provisions to require the determination to be included in the comprehensive fiscal analysis, as specified.
(4)Existing law states 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. Existing law requires 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.
This bill would additionally require that statement to include, among other things, the amount of money in the possession of custodians and trustees and an identification of whether any of the money is restricted, and a statement of whether there is any pending or potential litigation or claims against the city proposed to be disincorporated.
(5)Existing law requires the county tax collector to collect a tax that has been levied by the disincorporated city that remains uncollected.
This bill would additionally require the county tax collector to collect an assessment that has been levied by the disincorporated city that remains uncollected. By imposing new duties on local officials, this bill would impose a state-mandated local program.
(6)Existing law requires all money paid into the county treasury pursuant to provisions relating to the disincorporation of a city to be placed to the credit of a special fund established for the purpose of settling the affairs of the disincorporated city.
This bill would provide that the successor or successors to the disincorporated city are not liable to creditors of the former city, if at all, other than for those amounts actually paid into that special fund.
(7)Existing law requires the board of supervisors to provide for the collection of debts due to a city being disincorporated and to wind up its affairs, as specified.
This bill would instead require the governing board of the successor to the city being disincorporated to provide for the collection of debts due to the city and to wind up its affairs, as specified.
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.
Existing law, the Cortese-Knox-Hertzberg Local Government Reorganization Act of 2000, provides the authority and procedure for the initiation, conduct, and completion of changes of organization and reorganization for cities and districts. The act prohibits the local area formation commission from approving or conditionally approving any proposal that includes a disincorporation of a city unless the commission determines, 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.
This bill would make a nonsubstantive change to this provision.
For any proposal that includes a disincorporation, the executive officer shall prepare, or cause to be prepared by contract, a comprehensive fiscal analysis. This analysis shall become part of the report required pursuant to Section 56665. Data used for the analysis shall be from the most recent fiscal year for which data is available, preceding the issuances of the certificate of filing. When data requested by the executive officer in the notice to affected agencies, pursuant to paragraph (2) of subdivision (b) of Section 56658, is unavailable, the analysis shall document the source and methodology of the data used. The analysis shall review and document each of the following:
(a)The direct and indirect costs incurred by the city proposed for disincorporation for providing public services during the three fiscal years immediately preceding the submittal of the proposal for disincorporation.
(b)The direct and indirect costs incurred by the city proposed for disincorporation for current and proposed capital improvements, facilities, assets, and infrastructure.
(c)The sources of funding, if any, available to the entities proposed to assume the obligations of the city proposed for disincorporation.
(d)The anticipated costs, including all direct and indirect costs, to the entities proposed to assume the obligations of the city proposed for disincorporation in the provision of services to the area proposed for disincorporation.
(e)When determining costs, the executive officer shall also include all direct and indirect costs of any public services that are proposed to be transferred to state agencies for delivery.
(f)The revenues of the city proposed for disincorporation during the three fiscal years immediately preceding the initiation of the disincorporation proposal.
(g)All current and long-term liabilities, including, but not limited to, debt obligations, of the city proposed for disincorporation, including the balance of the restricted and unrestricted funds available to extinguish the obligations and liabilities.
(h)The potential financing mechanism or mechanisms to address any shortfalls and obligations for those responsibilities identified in this section, including, but not limited to, taxes or assessments.
(i)Any other information and analysis needed to make the findings required by Section 56770.
SEC. 2.Section 56816 of the Government Code is amended to read:56816.(a)It is the intent of the Legislature that any proposal that includes the disincorporation of a city result in a determination that the debt or contractual obligations and responsibilities of the city being disincorporated shall be the responsibility of that same territory for repayment. To ascertain this information, the city shall provide a written statement that determines and certifies all of the following to the commission prior to the issuance of a certificate of filing for a disincorporation proposal, pursuant to Sections 56651 and 56658:
(1)The indebtedness of the city.
(2)The amount of money in the citys treasury.
(3)The amount of any tax levy, assessment, or other obligation due to the city that is unpaid or has not been collected.
(4)The amount of current and future liabilities, both internal debt owed to other special or restricted funds or enterprise funds within the agency and external debt owed to other public agencies or outside lenders or that results from contractual obligations, which may include contracts for goods or services, retirement obligations, actuarially determined unfunded pension liability of all classes in a public retirement system, including any documentation related to the termination of public retirement contract provisions, and the liability for other postemployment benefits. The information required by this paragraph shall include any associated revenue stream for financing that may be or has been committed to that liability, including employee contributions.
(b)The city shall provide a written statement identifying the successor agency to the citys former redevelopment agency, if any, pursuant to Section 34173 of the Health and Safety Code.
SEC. 3.Section 57405 of the Government Code is amended to read:57405.If a tax or assessment has been levied by the disincorporated city and remains uncollected, the county tax collector shall collect it when due and pay it into the county treasury on behalf of the designated successor agency or county to wind up the affairs of the disincorporated city.
SEC. 4.Section 57412 of the Government Code is amended to read:57412.The governing body of the successor shall provide for collection of debts due the city and wind up its affairs. Upon an order by the commission, the appropriate officer of the successor shall perform any act necessary for winding up the city affairs, with the same effect as if it had been performed by the proper city officer.
SEC. 5.If the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code.
For any proposal that includes a disincorporation, the executive officer shall prepare, or cause to be prepared by contract, a comprehensive fiscal analysis. This analysis shall become part of the report required pursuant to Section 56665. Data used for the analysis shall be from the most recent fiscal year for which data is available, preceding the issuances of the certificate of filing. When data requested by the executive officer in the notice to affected agencies, pursuant to paragraph (2) of subdivision (b) of Section 56658, is unavailable, the analysis shall document the source and methodology of the data used. The analysis shall review and document each of the following:
(a)The direct and indirect costs incurred by the city proposed for disincorporation for providing public services during the three fiscal years immediately preceding the submittal of the proposal for disincorporation.
(b)The direct and indirect costs incurred by the city proposed for disincorporation for current and proposed capital improvements, facilities, assets, and infrastructure.
(c)The sources of funding, if any, available to the entities proposed to assume the obligations of the city proposed for disincorporation.
(d)The anticipated costs, including all direct and indirect costs, to the entities proposed to assume the obligations of the city proposed for disincorporation in the provision of services to the area proposed for disincorporation.
(e)When determining costs, the executive officer shall also include all direct and indirect costs of any public services that are proposed to be transferred to state agencies for delivery.
(f)The revenues of the city proposed for disincorporation during the three fiscal years immediately preceding the initiation of the disincorporation proposal.
(g)All current and long-term liabilities, including, but not limited to, debt obligations, of the city proposed for disincorporation, including the balance of the restricted and unrestricted funds available to extinguish the obligations and liabilities.
(h)The potential financing mechanism or mechanisms to address any shortfalls and obligations for those responsibilities identified in this section, including, but not limited to, taxes or assessments.
(i)Any other information and analysis needed to make the findings required by Section 56770.
SEC. 2.Section 56816 of the Government Code is amended to read:56816.(a)It is the intent of the Legislature that any proposal that includes the disincorporation of a city result in a determination that the debt or contractual obligations and responsibilities of the city being disincorporated shall be the responsibility of that same territory for repayment. To ascertain this information, the city shall provide a written statement that determines and certifies all of the following to the commission prior to the issuance of a certificate of filing for a disincorporation proposal, pursuant to Sections 56651 and 56658:
(1)The indebtedness of the city.
(2)The amount of money in the citys treasury.
(3)The amount of any tax levy, assessment, or other obligation due to the city that is unpaid or has not been collected.
(4)The amount of current and future liabilities, both internal debt owed to other special or restricted funds or enterprise funds within the agency and external debt owed to other public agencies or outside lenders or that results from contractual obligations, which may include contracts for goods or services, retirement obligations, actuarially determined unfunded pension liability of all classes in a public retirement system, including any documentation related to the termination of public retirement contract provisions, and the liability for other postemployment benefits. The information required by this paragraph shall include any associated revenue stream for financing that may be or has been committed to that liability, including employee contributions.
(b)The city shall provide a written statement identifying the successor agency to the citys former redevelopment agency, if any, pursuant to Section 34173 of the Health and Safety Code.
SEC. 3.Section 57405 of the Government Code is amended to read:57405.If a tax or assessment has been levied by the disincorporated city and remains uncollected, the county tax collector shall collect it when due and pay it into the county treasury on behalf of the designated successor agency or county to wind up the affairs of the disincorporated city.
SEC. 4.Section 57412 of the Government Code is amended to read:57412.The governing body of the successor shall provide for collection of debts due the city and wind up its affairs. Upon an order by the commission, the appropriate officer of the successor shall perform any act necessary for winding up the city affairs, with the same effect as if it had been performed by the proper city officer.
SEC. 5.If the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code.
For any proposal that includes a disincorporation, the executive officer shall prepare, or cause to be prepared by contract, a comprehensive fiscal analysis. This analysis shall become part of the report required pursuant to Section 56665. Data used for the analysis shall be from the most recent fiscal year for which data is available, preceding the issuances of the certificate of filing. When data requested by the executive officer in the notice to affected agencies, pursuant to paragraph (2) of subdivision (b) of Section 56658, is unavailable, the analysis shall document the source and methodology of the data used. The analysis shall review and document each of the following:
(a)The direct and indirect costs incurred by the city proposed for disincorporation for providing public services during the three fiscal years immediately preceding the submittal of the proposal for disincorporation.
(b)The direct and indirect costs incurred by the city proposed for disincorporation for current and proposed capital improvements, facilities, assets, and infrastructure.
(c)The sources of funding, if any, available to the entities proposed to assume the obligations of the city proposed for disincorporation.
(d)The anticipated costs, including all direct and indirect costs, to the entities proposed to assume the obligations of the city proposed for disincorporation in the provision of services to the area proposed for disincorporation.
(e)When determining costs, the executive officer shall also include all direct and indirect costs of any public services that are proposed to be transferred to state agencies for delivery.
(f)The revenues of the city proposed for disincorporation during the three fiscal years immediately preceding the initiation of the disincorporation proposal.
(g)All current and long-term liabilities, including, but not limited to, debt obligations, of the city proposed for disincorporation, including the balance of the restricted and unrestricted funds available to extinguish the obligations and liabilities.
(h)The potential financing mechanism or mechanisms to address any shortfalls and obligations for those responsibilities identified in this section, including, but not limited to, taxes or assessments.
(i)Any other information and analysis needed to make the findings required by Section 56770.
SEC. 2.Section 56816 of the Government Code is amended to read:56816.(a)It is the intent of the Legislature that any proposal that includes the disincorporation of a city result in a determination that the debt or contractual obligations and responsibilities of the city being disincorporated shall be the responsibility of that same territory for repayment. To ascertain this information, the city shall provide a written statement that determines and certifies all of the following to the commission prior to the issuance of a certificate of filing for a disincorporation proposal, pursuant to Sections 56651 and 56658:
(1)The indebtedness of the city.
(2)The amount of money in the citys treasury.
(3)The amount of any tax levy, assessment, or other obligation due to the city that is unpaid or has not been collected.
(4)The amount of current and future liabilities, both internal debt owed to other special or restricted funds or enterprise funds within the agency and external debt owed to other public agencies or outside lenders or that results from contractual obligations, which may include contracts for goods or services, retirement obligations, actuarially determined unfunded pension liability of all classes in a public retirement system, including any documentation related to the termination of public retirement contract provisions, and the liability for other postemployment benefits. The information required by this paragraph shall include any associated revenue stream for financing that may be or has been committed to that liability, including employee contributions.
(b)The city shall provide a written statement identifying the successor agency to the citys former redevelopment agency, if any, pursuant to Section 34173 of the Health and Safety Code.
SEC. 3.Section 57405 of the Government Code is amended to read:57405.If a tax or assessment has been levied by the disincorporated city and remains uncollected, the county tax collector shall collect it when due and pay it into the county treasury on behalf of the designated successor agency or county to wind up the affairs of the disincorporated city.
SEC. 4.Section 57412 of the Government Code is amended to read:57412.The governing body of the successor shall provide for collection of debts due the city and wind up its affairs. Upon an order by the commission, the appropriate officer of the successor shall perform any act necessary for winding up the city affairs, with the same effect as if it had been performed by the proper city officer.
SEC. 5.If the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code.
For any proposal that includes a disincorporation, the executive officer shall prepare, or cause to be prepared by contract, a comprehensive fiscal analysis. This analysis shall become part of the report required pursuant to Section 56665. Data used for the analysis shall be from the most recent fiscal year for which data is available, preceding the issuances of the certificate of filing. When data requested by the executive officer in the notice to affected agencies, pursuant to paragraph (2) of subdivision (b) of Section 56658, is unavailable, the analysis shall document the source and methodology of the data used. The analysis shall review and document each of the following:
(a)The direct and indirect costs incurred by the city proposed for disincorporation for providing public services during the three fiscal years immediately preceding the submittal of the proposal for disincorporation.
(b)The direct and indirect costs incurred by the city proposed for disincorporation for current and proposed capital improvements, facilities, assets, and infrastructure.
(c)The sources of funding, if any, available to the entities proposed to assume the obligations of the city proposed for disincorporation.
(d)The anticipated costs, including all direct and indirect costs, to the entities proposed to assume the obligations of the city proposed for disincorporation in the provision of services to the area proposed for disincorporation.
(e)When determining costs, the executive officer shall also include all direct and indirect costs of any public services that are proposed to be transferred to state agencies for delivery.
(f)The revenues of the city proposed for disincorporation during the three fiscal years immediately preceding the initiation of the disincorporation proposal.
(g)Any other information and analysis needed to make the findings required by Section 56770.
(h)
(g)All current and long-term liabilities, including, but not limited to, debt obligations, of the city proposed for disincorporation, including the balance of the restricted and unrestricted funds available to extinguish the obligations and liabilities.
(h)The potential financing mechanism or mechanisms to address any shortfalls and obligations for those responsibilities identified in this section, including, but not limited to, taxes or assessments.
(i)Any other information and analysis needed to make the findings required by Section 56770.
SEC. 2.Section 56816 of the Government Code is amended to read:56816.(a)It is the intent of the Legislature that any proposal that includes the disincorporation of a city result in a determination that the debt or contractual obligations and responsibilities of the city being disincorporated shall be the responsibility of that same territory for repayment. To ascertain this information, the city shall provide a written statement that determines and certifies all of the following to the commission prior to the issuance of a certificate of filing for a disincorporation proposal, pursuant to Sections 56651 and 56658:
(1)The indebtedness of the city.
(2)The amount of money in the citys treasury.
(3)The amount of any tax levy, assessment, or other obligation due the city that is unpaid or has not been collected.
(4)The amount of current and future liabilities, both internal debt owed to other special or restricted funds or enterprise funds within the agency and external debt owed to other public agencies or outside lenders or that results from contractual obligations, which may include contracts for goods or services, retirement obligations, actuarially determined unfunded pension liability of all classes in a public retirement system, including any documentation related to the termination of public retirement contract provisions, and the liability for other postemployment benefits. The information required by this paragraph shall include any associated revenue stream for financing that may be or has been committed to that liability, including employee contributions.
(b)The city shall provide a written statement identifying the successor agency to the citys former redevelopment agency, if any, pursuant to Section 34173 of the Health and Safety Code.
SEC. 3.Section 57405 of the Government Code is amended to read:57405.If a tax or assessment has been levied by the disincorporated city and remains uncollected, the county tax collector shall collect it when due and pay it into the county treasury on behalf of the designated successor agency or county to wind up the affairs of the disincorporated city.
SEC. 4.Section 57412 of the Government Code is amended to read:57412.The governing body of the successor shall provide for collection of debts due the city and wind up its affairs. Upon an order by the commission, the appropriate officer of the successor shall perform any act necessary for winding up the city affairs, with the same effect as if it had been performed by the proper city officer.
SEC. 5.If the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code.
The commission shall not approve or conditionally approve a proposal that includes a disincorporation, unless, based on the entire record, the commission makes all of the following determinations:
(a)The proposed disincorporation is consistent with both of the following:
(1)The intent of this division to provide for a sustainable system for the delivery of services.
(2)The intent stated in Section 56816 that all debt and contractual obligations and responsibilities of the city being disincorporated shall be the responsibility of the same territory for repayment.
(b)The commission has considered the service reviews of municipal services and spheres of influence of the affected local agencies, and the disincorporation will address the necessary changes to those spheres of influence, if any.
(c)It has reviewed the comprehensive fiscal analysis prepared pursuant to Section 56804.
(d)It has reviewed the executive officers report and recommendation prepared pursuant to Section 56665, and the oral or written testimony presented at its public hearing.
(e)Existing and projected future revenues of the city to be disincorporated are sufficient to meet all expenditures, debts, and obligations of the former city or, if there are not sufficient revenues, the tax rate upon which the commission conditions its approval for disincorporation shall be sufficient to meet all identified financial shortfalls of the former city.
(f)The service responsibilities of the city proposed for disincorporation have been assigned through terms and conditions authorized by Sections 56885.5, 56886, and 57302, and Chapter 5 (commencing with Section 57400) of Part 5.
(g)The appropriate appointing power of the successor or successors approves the terms of continuing employment or transfer of any employees from employment with the disincorporated city to employment with the successor or successors.
SEC. 2.Section 56804 of the Government Code is amended to read:56804.(a)For any proposal that includes a disincorporation, the executive officer shall prepare, or cause to be prepared by contract, a comprehensive fiscal analysis that includes an analysis of the former citys most recently completed financial statements audited by a certified public accountant and identifies any concerns raised by the certified public accountant. The executive officer shall obtain written input from the successor or successors or the petitioners proposed to assume responsibility for the former citys operations during the preparation of the comprehensive fiscal analysis to assist in determining whether revenue shortfalls, if any, will leave unfunded debts or liabilities after disincorporation. This analysis shall become part of the report required pursuant to Section 56665. Data used for the analysis shall be from the most recent fiscal year for which data is available, preceding the issuances of the certificate of filing. When data requested by the executive officer in the notice to affected agencies, pursuant to paragraph (2) of subdivision (b) of Section 56658, is unavailable, the analysis shall document the source and methodology of the data used. The analysis shall review and document each of the following:
(1)The direct and indirect costs incurred by the city proposed for disincorporation for providing public services during the three fiscal years immediately preceding the submittal of the proposal for disincorporation.
(2)The direct and indirect costs incurred by the city proposed for disincorporation for current and proposed capital improvements, facilities, assets, and infrastructure.
(3)The sources of funding, if any, available to the entities proposed to assume the obligations of the city proposed for disincorporation.
(4)The anticipated costs, including all direct and indirect costs, to the entities proposed to assume the obligations of the city proposed for disincorporation in the provision of services to the area proposed for disincorporation.
(5)When determining costs, the executive officer shall also include all direct and indirect costs of any public services that are proposed to be transferred to state agencies for delivery.
(6)The revenues of the city proposed for disincorporation during the three fiscal years immediately preceding the initiation of the disincorporation proposal.
(7)All debt obligations and current and long-term liabilities of the city proposed for disincorporation, including the balance of restricted and unrestricted funds available to extinguish the obligations and liabilities.
(8)The required financing mechanism(s) to address any shortfalls and obligations for those responsibilities identified in this section, including, but not limited to, taxes or assessments.
(9)A determination of the proportion that the amount of property tax revenue derived by the city being disincorporated pursuant to subdivision (b) of Section 93 of the Revenue and Taxation Code bears to the total amount of revenue from all sources available for general purposes received by the city being disincorporated in the prior fiscal year. For purposes of making this determination and the determination required by paragraph (3) of subdivision (c) of Section 56813, total amount of revenue from all sources available for general purposes means the total amount of revenue that the city being disincorporated may use on a discretionary basis for any purpose and does not include any of the following:
(A)Revenue that, by statute or ordinance, is required to be used for a specific purpose.
(B)Revenue from fees, charges, or assessments that are levied to specifically offset the cost of particular services and that do not exceed the cost reasonably borne in providing these services.
(C)Revenue received from the federal government that is required to be used for a specific purpose.
(10)Any other information and analysis needed to make the findings required by Section 56770.
(b)The executive officer shall provide the successor or successors at least 30 days to review, evaluate, and validate the accuracy and sufficiency of the data used to prepare the comprehensive fiscal analysis.
SEC. 3.Section 56813 of the Government Code is amended to read:56813.(a)If the proposal includes the disincorporation of a city, as defined in Section 56034, the commission shall determine the amount of property tax revenue to be exchanged by the affected city and any successor or affected local agency pursuant to this section.
(b)The commission shall notify the county auditor of the proposal, the affected local agencies to be extinguished, and the services proposed to be transferred to new jurisdictions, and identify for the auditor the changes to occur.
(c)The commission shall determine, based on information certified by the governing body of the city being disincorporated, an amount equal to the total net cost to that city during the prior fiscal year of providing those services that an affected agency will assume within the area subject to the proposal. For purposes of this paragraph, total net cost means the total direct and indirect costs that were funded by general purpose revenues of the city being disincorporated and excludes any portion of the total cost that was funded by any revenues of that agency that are specified in subparagraphs (A), (B), and (C) of paragraph (9) of subdivision (a) of Section 56804.
(d)For the services to be transferred to each affected local agency, the commission shall multiply the amount determined pursuant to subdivision (c) by the proportion determined pursuant to paragraph (9) of subdivision (a) of Section 56804 to derive the amount of property tax revenue used to provide services by the city being disincorporated during the prior fiscal year within the area subject to the proposal. The county auditor shall adjust the amount so determined by the annual tax increment pursuant to the procedures set forth in Chapter 6 (commencing with Section 95) of Part 0.5 of Division 1 of the Revenue and Taxation Code, to the fiscal year in which the affected agency receives its next allocation of property taxes.
(e)If the proposal for disincorporation would transfer all of the service responsibilities of the city proposed for disincorporation, other than those that are proposed to be discontinued, to a single successor, the commission shall request the auditor to determine the property tax revenue allocated to the city being disincorporated by tax rate area, or portion thereof, and transmit that information to the commission.
(f)The executive officer shall notify the auditor of the amount determined pursuant to paragraph (9) of subdivision (a) of Section 56804 or of subdivision (e) of this section, as the case may be, and, where applicable, the period of time within which and the procedure by which the transfer of property tax revenues will be effected pursuant to this section, at the time the executive officer records a certificate of completion pursuant to Section 57203 for any proposal described in subdivision (a), and the auditor shall transfer that amount to the affected agency or agencies that will assume the services as determined by the commission. Any property tax not transferred to an affected agency pursuant to paragraph (9) of subdivision (a) of Section 56804 shall be transferred to the affected county.
(g)For purposes of this section, prior fiscal year means the most recent fiscal year preceding the issuance of the certificate of filing for which data is available on actual direct and indirect costs and revenues needed to perform the calculations required by this section.
(h)Any action brought by a city, county, or district to contest any of the determinations of the county auditor or the commission with regard to the amount of property tax revenue to be exchanged by the affected local agencies pursuant to this section shall be commenced within three years of the effective date of the disincorporation.
SEC. 4.Section 56816 of the Government Code is amended to read:56816.(a)It is the intent of the Legislature that any proposal that includes the disincorporation of a city result in a determination that the debt or contractual obligations and responsibilities of the city being disincorporated shall be the responsibility of that same territory for repayment. To ascertain this information, the city shall provide a written statement that is certified by its legislative body and determines all of the following to the commission prior to the issuance of a certificate of filing for a disincorporation proposal, pursuant to Sections 56651 and 56658:
(1)The indebtedness of the city.
(2)The amount of money in the citys treasury, including an identification of any money that is restricted.
(3)The amount of money in the possession of custodians and trustees and an identification of any money that is restricted.
(4)The amount of any tax levy, direct assessment, or other obligation due the city that is unpaid or has not been collected.
(5)Current and long-term receivables owed to the city.
(6)A statement of whether there are any pending or potential litigation or claims against the city, including potential liability.
(7)The amount of current and future liabilities, both internal debt owed to other special or restricted funds or enterprise funds within the agency and external debt owed to other public agencies or outside lenders or that results from contractual obligations, which may include contracts for goods or services, retirement obligations, actuarially determined unfunded pension liability of all classes in a public retirement system, including any documentation related to the termination of public retirement contract provisions, and the liability for other postemployment benefits. The information required by this paragraph shall include any associated revenue stream for financing that may be or has been committed to that liability, including employee contributions.
(8)The annual amount of voter-approved pensions levied by the city and a determination of unfunded pension tax liability owed to the California Public Employees Retirement System.
(b)The successor agency to the citys former redevelopment agency, if any, shall be determined pursuant to Section 34173 of the Health and Safety Code.
SECTION 1.Section 56804 of the Government Code is amended to read:56804.For any proposal that includes a disincorporation, the executive officer shall prepare, or cause to be prepared by contract, a comprehensive fiscal analysis. This analysis shall become part of the report required pursuant to Section 56665. Data used for the analysis shall be from the most recent fiscal year for which data is available, preceding the issuances of the certificate of filing. When data requested by the executive officer in the notice to affected agencies, pursuant to paragraph (2) of subdivision (b) of Section 56658, is unavailable, the analysis shall document the source and methodology of the data used. The analysis shall review and document each of the following:
(a)The direct and indirect costs incurred by the city proposed for disincorporation for providing public services during the three fiscal years immediately preceding the submittal of the proposal for disincorporation.
(b)The direct and indirect costs incurred by the city proposed for disincorporation for current and proposed capital improvements, facilities, assets, and infrastructure.
(c)The sources of funding, if any, available to the entities proposed to assume the obligations of the city proposed for disincorporation.
(d)The anticipated costs, including all direct and indirect costs, to the entities proposed to assume the obligations of the city proposed for disincorporation in the provision of services to the area proposed for disincorporation.
(e)When determining costs, the executive officer shall also include all direct and indirect costs of any public services that are proposed to be transferred to state agencies for delivery.
(f)The revenues of the city proposed for disincorporation during the three fiscal years immediately preceding the initiation of the disincorporation proposal.
(g)Any other information and analysis needed to make the findings required by Section 56770.
(h)All current and long-term liabilities, including, but not limited to, debt obligations, of the city proposed for disincorporation, including the balance of the restricted and unrestricted funds available to extinguish the obligations and liabilities.
SEC. 2.Section 56816 of the Government Code is amended to read:56816.(a)It is the intent of the Legislature that any proposal that includes the disincorporation of a city result in a determination that the debt or contractual obligations and responsibilities of the city being disincorporated shall be the responsibility of that same territory for repayment. To ascertain this information, the city shall provide a written statement that determines and certifies all of the following to the commission prior to the issuance of a certificate of filing for a disincorporation proposal, pursuant to Sections 56651 and 56658:
(1)The indebtedness of the city.
(2)The amount of money in the citys treasury.
(3)The amount of any tax levy levy, assessment, or other obligation due the city that is unpaid or has not been collected.
(4)The amount of current and future liabilities, both internal debt owed to other special or restricted funds or enterprise funds within the agency and external debt owed to other public agencies or outside lenders or that results from contractual obligations, which may include contracts for goods or services, retirement obligations, actuarially determined unfunded pension liability of all classes in a public retirement system, including any documentation related to the termination of public retirement contract provisions, and the liability for other postemployment benefits. The information required by this paragraph shall include any associated revenue stream for financing that may be or has been committed to that liability, including employee contributions.
(b)The city shall provide a written statement identifying the successor agency to the citys former redevelopment agency, if any, pursuant to Section 34173 of the Health and Safety Code.
SEC. 5.SEC. 3.Section 57405 of the Government Code is amended to read:57405.If a tax or assessment has been levied by the disincorporated city and remains uncollected, the county tax collector shall collect it when due and pay it into the county treasury on behalf of the designated successor agency or county to wind up the affairs of the disincorporated city.
SEC. 6.Section 57407 of the Government Code is amended to read:57407.(a)All money paid into the county treasury pursuant to this chapter shall be placed to the credit of a special fund established for the purpose of settling the affairs of the disincorporated city.
(b)The successor or successors to the disincorporated city shall not be liable to creditors of the former city, if at all, other than for those amounts actually paid into the special fund established pursuant to subdivision (a). For purposes of this section, creditors include, but are not limited to, employees and bondholders of the disincorporated city.
SEC. 7.SEC. 4.Section 57412 of the Government Code is amended to read:57412.The governing body of the successor shall provide for collection of debts due the city and wind up its affairs. Upon an order by the commission, the appropriate officer of the successor shall perform any act necessary for winding up the city affairs, with the same effect as if it had been performed by the proper city officer.
SEC. 8.SEC. 5.If the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code.
The commission shall not approve or conditionally approve a proposal that includes a disincorporation, unless, based on the entire record, the commission makes all of the following determinations:
(a)The proposed disincorporation is consistent with the both of the following:
(1)The intent of this division to provide for a sustainable system for the delivery of services.
(2)The intent stated in Section 56816 that all debt and contractual obligations and responsibilities of the city being disincorporated shall be the responsibility of the same territory for repayment.
(b)The commission has considered the service reviews of municipal services and spheres of influence of the affected local agencies, and the disincorporation will address the necessary changes to those spheres of influence, if any.
(c)It has reviewed the comprehensive fiscal analysis prepared pursuant to Section 56804.
(d)It has reviewed the executive officers report and recommendation prepared pursuant to Section 56665, and the oral or written testimony presented at its public hearing.
(e)
(e)Existing and projected future revenues of the city to be disincorporated are sufficient to meet all expenditures, debts, and obligations of the former city or, if there are not sufficient revenues, the tax rate upon which the commission conditions its approval for disincorporation shall be sufficient to meet all identified financial shortfalls of the former city.
(f)The service responsibilities of the city proposed for disincorporation have been assigned through terms and conditions authorized by Sections 56885.5, 56886, and 57302, and Chapter 5 (commencing with Section 57400) of Part 5.
(g)The appropriate appointing power of the successor or successors approves the terms of continuing employment or transfer of any employees from employment with the disincorporated city to employment with the successor or successors.
SEC. 2.Section 56804 of the Government Code is amended to read:56804.(a)For any proposal that includes a disincorporation, the executive officer shall prepare, or cause to be prepared by contract, a comprehensive fiscal analysis that includes an analysis of the former citys most recently completed financial statements audited by a certified public accountant and identifies any concerns raised by the certified public accountant. The executive officer shall obtain written input from the successor or successors or the petitioners proposed to assume responsibility for the former citys operations during the preparation of the comprehensive fiscal analysis to assist in determining whether revenue shortfalls, if any, will leave unfunded debts or liabilities after disincorporation. This analysis shall become part of the report required pursuant to Section 56665. Data used for the analysis shall be from the most recent fiscal year for which data is available, preceding the issuances of the certificate of filing. When data requested by the executive officer in the notice to affected agencies, pursuant to paragraph (2) of subdivision (b) of Section 56658, is unavailable, the analysis shall document the source and methodology of the data used. The analysis shall review and document each of the following:
(a)
(1)The direct and indirect costs incurred by the city proposed for disincorporation for providing public services during the three fiscal years immediately preceding the submittal of the proposal for disincorporation.
(b)
(2)The direct and indirect costs incurred by the city proposed for disincorporation for current and proposed capital improvements, facilities, assets, and infrastructure.
(c)
(3)The sources of funding, if any, available to the entities proposed to assume the obligations of the city proposed for disincorporation.
(d)
(4)The anticipated costs, including all direct and indirect costs, to the entities proposed to assume the obligations of the city proposed for disincorporation in the provision of services to the area proposed for disincorporation.
(e)
(5)When determining costs, the executive officer shall also include all direct and indirect costs of any public services that are proposed to be transferred to state agencies for delivery.
(f)
(6)The revenues of the city proposed for disincorporation during the three fiscal years immediately preceding the initiation of the disincorporation proposal.
(7)All debt obligations and current and long-term liabilities of the city proposed for disincorporation, including the balance of restricted and unrestricted funds available to extinguish the obligations and liabilities.
(8)The required financing mechanism(s) to address any shortfalls and obligations for those responsibilities identified in this section, including, but not limited to, taxes or assessments.
(9)A determination of the proportion that the amount of property tax revenue derived by the city being disincorporated pursuant to subdivision (b) of Section 93 of the Revenue and Taxation Code bears to the total amount of revenue from all sources available for general purposes received by the city being disincorporated in the prior fiscal year. For purposes of making this determination and the determination required by paragraph (3) of subdivision (c) of Section 56813, total amount of revenue from all sources available for general purposes means the total amount of revenue that the city being disincorporated may use on a discretionary basis for any purpose and does not include any of the following:
(A)Revenue that, by statute or ordinance, is required to be used for a specific purpose.
(B)Revenue from fees, charges, or assessments that are levied to specifically offset the cost of particular services and that do not exceed the cost reasonably borne in providing these services.
(C)Revenue received from the federal government that is required to be used for a specific purpose.
(g)
(10)Any other information and analysis needed to make the findings required by Section 56770.
(b)The executive officer shall provide the successor or successors at least 30 days to review, evaluate, and validate the accuracy and sufficiency of the data used to prepare the comprehensive fiscal analysis.
SEC. 3.Section 56813 of the Government Code is amended to read:56813.(a)If the proposal includes the disincorporation of a city, as defined in Section 56034, the commission shall determine the amount of property tax revenue to be exchanged by the affected city and any successor or affected local agency pursuant to this section.
(b)The commission shall notify the county auditor of the proposal, the affected local agencies to be extinguished, and the services proposed to be transferred to new jurisdictions, and identify for the auditor the changes to occur.
(c)If the proposal would not transfer all of the service responsibilities of the disincorporating city to the affected county or to a single affected agency, the commission and the county auditor shall do all of the following:
(1)The county auditor shall determine the proportion that the amount of property tax revenue derived by the city being disincorporated pursuant to subdivision (b) of Section 93 of the Revenue and Taxation Code bears to the total amount of revenue from all sources, available for general purposes, received by the city being disincorporated in the prior fiscal year and provide his or her response within 15 days of receiving notification from the commission pursuant to subdivision (b). For purposes of making this determination and the determination required by paragraph (3), total amount of revenue from all sources available for general purposes means the total amount of revenue which the city being disincorporated may use on a discretionary basis for any purpose and does not include any of the following:
(A)Revenue that, by statute or ordinance, is required to be used for a specific purpose.
(B)Revenue from fees, charges, or assessments that are levied to specifically offset the cost of particular services and that do not exceed the cost reasonably borne in providing these services.
(C)Revenue received from the federal government that is required to be used for a specific purpose.
(2)
(c)The commission shall determine, based on information submitted certified by the governing body of the city being disincorporated, an amount equal to the total net cost to that city during the prior fiscal year of providing those services that an affected agency will assume within the area subject to the proposal. For purposes of this paragraph, total net cost means the total direct and indirect costs that were funded by general purpose revenues of the city being disincorporated and excludes any portion of the total cost that was funded by any revenues of that agency that are specified in subparagraphs (A), (B), and (C) of paragraph (1). paragraph (9) of subdivision (a) of Section 56804.
(3)
(d)For the services to be transferred to each affected local agency, the commission shall multiply the amount determined pursuant to paragraph (2) subdivision (c) by the proportion determined pursuant to paragraph (1) (9) of subdivision (a) of Section 56804 to derive the amount of property tax revenue used to provide services by the city being disincorporated during the prior fiscal year within the area subject to the proposal. The county auditor shall adjust the amount so determined by the annual tax increment pursuant to the procedures set forth in Chapter 6 (commencing with Section 95) of Part 0.5 of Division 1 of the Revenue and Taxation Code, to the fiscal year in which the affected agency receives its next allocation of property taxes.
(d)
(e)If the proposal for disincorporation would transfer all of the service responsibilities of the city proposed for disincorporation, other than those that are proposed to be discontinued, to a single successor, the commission shall request the auditor to determine the property tax revenue allocated to the city being disincorporated by tax rate area, or portion thereof, and transmit that information to the commission.
(e)
(f)The executive officer shall notify the auditor of the amount determined pursuant to paragraph (9) of subdivision (c) or (d), (a) of Section 56804 or of subdivision (e) of this section, as the case may be, and, where applicable, the period of time within which and the procedure by which the transfer of property tax revenues will be effected pursuant to this section, at the time the executive officer records a certificate of completion pursuant to Section 57203 for any proposal described in subdivision (a), and the auditor shall transfer that amount to the affected agency or agencies that will assume the services as determined by the commission. Any property tax not transferred to an affected agency pursuant to paragraph (9) of subdivision (c) (a) of Section 56804 shall be transferred to the affected county.
(f)
(g)For purposes of this section, prior fiscal year means the most recent fiscal year preceding the issuance of the certificate of filing for which data is available on actual direct and indirect costs and revenues needed to perform the calculations required by this section.
(g)
(h)Any action brought by a city, county, or district to contest any of the determinations of the county auditor or the commission with regard to the amount of property tax revenue to be exchanged by the affected local agencies pursuant to this section shall be commenced within three years of the effective date of the disincorporation.
SEC. 4.Section 56816 of the Government Code is amended to read:56816.(a)It is the intent of the Legislature that any proposal that includes the disincorporation of a city result in a determination that the debt or contractual obligations and responsibilities of the city being disincorporated shall be the responsibility of that same territory for repayment. To ascertain this information, the city shall provide a written statement that is certified by its legislative body and determines and certifies all of the following to the commission prior to the issuance of a certificate of filing for a disincorporation proposal, pursuant to Sections 56651 and 56658:
(1)The indebtedness of the city.
(2)The amount of money in the citys treasury, including an identification of any money that is restricted.
(3)The amount of money in the possession of custodians and trustees and an identification of any money that is restricted.
(3)
(4)The amount of any tax levy levy, direct assessment, or other obligation due the city that is unpaid or has not been collected.
(5)Current and long-term receivables owed to the city.
(6)A statement of whether there are any pending or potential litigation or claims against the city, including potential liability.
(4)
(7)The amount of current and future liabilities, both internal debt owed to other special or restricted funds or enterprise funds within the agency and external debt owed to other public agencies or outside lenders or that results from contractual obligations, which may include contracts for goods or services, retirement obligations, actuarially determined unfunded pension liability of all classes in a public retirement system, including any documentation related to the termination of public retirement contract provisions, and the liability for other postemployment benefits. The information required by this paragraph shall include any associated revenue stream for financing that may be or has been committed to that liability, including employee contributions.
(8)The annual amount of voter-approved pensions levied by the city and a determination of unfunded pension tax liability owed to the California Public Employees Retirement System.
(b)The city shall provide a written statement identifying the successor agency to the citys former redevelopment agency, if any, shall be determined pursuant to Section 34173 of the Health and Safety Code.
SEC. 5.Section 57405 of the Government Code is amended to read:57405.If a tax or assessment has been levied by the disincorporated city and remains uncollected, the county tax collector shall collect it when due and pay it into the county treasury on behalf of the designated successor agency or county to wind up the affairs of the disincorporated city.
SEC. 6.Section 57407 of the Government Code is amended to read:57407.(a)All money paid into the county treasury pursuant to this chapter shall be placed to the credit of a special fund established for the purpose of settling the affairs of the disincorporated city.
(b)The successor or successors to the disincorporated city shall not be liable to creditors of the former city, if at all, other than for those amounts actually paid into the special fund established pursuant to subdivision (a). For purposes of this section, creditors include, but are not limited to, employees and bondholders of the disincorporated city.
SEC. 7.Section 57412 of the Government Code is amended to read:57412.The board of supervisors governing body of the successor shall provide for collection of debts due the city and wind up its affairs. Upon an order by the board of supervisors, commission, the appropriate county officer of the successor shall perform any act necessary for winding up the city affairs, with the same effect as if it had been performed by the proper city officer.
SEC. 8.If the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code.
The commission shall not approve or conditionally approve any a proposal that includes a disincorporation, unless, based on the entire record, the commission makes all of the following determinations:
(a)The proposed disincorporation is consistent with the intent of this division to provide for a sustainable system for the delivery of services.
(b)The commission has considered the service reviews of municipal services and spheres of influence of the affected local agencies, and the disincorporation will address the necessary changes to those spheres of influence, if any.
(c)It has reviewed the comprehensive fiscal analysis prepared pursuant to Section 56804.
(d)It has reviewed the executive officers report and recommendation prepared pursuant to Section 56665, and the oral or written testimony presented at its public hearing.
(e)The service responsibilities of the city proposed for disincorporation have been assigned through terms and conditions authorized by Sections 56885.5, 56886, and 57302, and Chapter 5 (commencing with Section 57400) of Part 5.
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Date
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Status
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|---|---|
| May 19, 2016 | Read third time. Passed. Ordered to the Senate. (Ayes 76. Noes 0. Page 4869.) |
| Aug 22, 2016 | Chaptered by Secretary of State - Chapter 163, Statutes of 2016. |
| Aug 22, 2016 | Approved by the Governor. |
| Aug 10, 2016 | Enrolled and presented to the Governor at 3 p.m. |
| Aug 4, 2016 | Senate amendments concurred in. To Engrossing and Enrolling. (Ayes 77. Noes 0. Page 5699.). |
| Aug 4, 2016 | Senate amendments concurred in. To Engrossing and Enrolling. |
| Jun 30, 2016 | Read third time. Passed. Ordered to the Assembly. (Ayes 37. Noes 0. Page 4650.). |
| Jun 30, 2016 | Read third time. Passed. Ordered to the Assembly. |
| Jun 30, 2016 | In Assembly. Concurrence in Senate amendments pending. May be considered on or after July 30 pursuant to Assembly Rule 77. |
| Jun 30, 2016 | In Assembly. Concurrence in Senate amendments pending. May be considered on or after July 29 pursuant to Assembly Rule 77. |
| Jun 28, 2016 | Read second time. Ordered to Consent Calendar. |
| Jun 27, 2016 | From committee: Be placed on second reading file pursuant to Senate Rule 28.8 and ordered to consent calendar. |
| Jun 15, 2016 | From committee: Do pass and re-refer to Com. on APPR. with recommendation: To Consent Calendar. (Ayes 7. Noes 0.) (June 15). Re-referred to Com. on APPR. |
| Jun 6, 2016 | From committee chair, with author's amendments: Amend, and re-refer to committee. Read second time, amended, and re-referred to Com. on GOV. & F. |
| May 26, 2016 | Referred to Com. on GOV. & F. |
| May 19, 2016 | Read third time. Passed. Ordered to the Senate. (Ayes 76. Noes 0.) |
| Feb 16, 2016 | Read first time. To print. |
| May 19, 2016 | Read third time. Passed. Ordered to the Senate. |
| May 19, 2016 | In Senate. Read first time. To Com. on RLS. for assignment. |
| May 12, 2016 | Read second time. Ordered to Consent Calendar. |
| May 11, 2016 | From committee: Do pass. To Consent Calendar. (Ayes 20. Noes 0.) (May 11). |
| Apr 21, 2016 | From committee: Do pass and re-refer to Com. on APPR. with recommendation: To Consent Calendar. (Ayes 9. Noes 0.) (April 20). Re-referred to Com. on APPR. |
| Apr 12, 2016 | Re-referred to Com. on L. GOV. |
| Apr 11, 2016 | In committee: Set, first hearing. Hearing canceled at the request of author. |
| Apr 11, 2016 | From committee chair, with author's amendments: Amend, and re-refer to Com. on L. GOV. Read second time and amended. |
| Apr 6, 2016 | Re-referred to Com. on L. GOV. |
| Apr 5, 2016 | From committee chair, with author's amendments: Amend, and re-refer to Com. on L. GOV. Read second time and amended. |
| Mar 28, 2016 | Re-referred to Com. on L. GOV. |
| Mar 17, 2016 | Referred to Com. on L. GOV. |
| Mar 17, 2016 | From committee chair, with author's amendments: Amend, and re-refer to Com. on L. GOV. Read second time and amended. |
| Feb 17, 2016 | From printer. May be heard in committee March 18. |
|
Date
|
Description
|
Location
|
Votes
|
|
|---|---|---|---|---|
| Aug 4, 2016 | AB 2032 LINDER Concurrence in Senate Amendments | Assembly Floor |
Passed |
|
| Jun 30, 2016 | Consent Calendar 2nd AB2032 Linder | Senate Floor |
Passed |
|
| Jun 15, 2016 | Do pass, but first be re-referred to the Committee on [Appropriations] with the recommendation: To Consent Calendar | Senate Standing Committee on Governance and Finance |
Passed |
|
| May 19, 2016 | AB 2032 LINDER Consent Calendar Second Day Regular Session | Assembly Floor |
Passed |
|
| May 11, 2016 | Do pass. To Consent Calendar. | Assembly Standing Committee on Appropriations |
Passed |
|
| Apr 20, 2016 | Do pass and be re-referred to the Committee on [Appropriations] with recommendation: To Consent Calendar | Assembly Standing Committee on Local Government |
Passed |
This list shows positions taken on this bill by organizations on the date displayed, which is linked to the original source.
Positions by individuals are not included.
|
Organization
|
Position
|
Date
|
|---|---|---|
| California Association of LAFCOs | ** Support | Aug 4, 2016 |
| Orange County LAFCO | ** Support | Aug 4, 2016 |
| State Association Of County Auditors | ** Support | Aug 4, 2016 |
| State Association of County Auditors [SPONSOR] | ** Support | Aug 4, 2016 |
CONCURRENCE IN SENATE AMENDMENTS
CSA1 Bill Id:AB 2032
Author:(Linder)
As Amended Ver:June 6, 2016
Majority vote
ASSEMBLY: | 76-0 | (May 19, 2016) | SENATE: | 37-0 | (June 30, 2016) |
Original Committee Reference: L. GOV.
SUMMARY: Makes several minor changes to the city disincorporation process in the Cortese-Knox-Hertzberg Act (Act).
The Senate amendments make minor and technical changes.
EXISTING LAW:
- Establishes the procedures for the organization and reorganization of cities, counties, and special districts, including procedures for the disincorporation of a city under the Act.
- Defines "disincorporation" to mean "the dissolution, extinguishment, or termination of the existence of a city and the cessation of its corporate powers, except for the purpose of winding up the affairs of the city."
- Requires the city to provide a written statement to the local agency formation commission (LAFCO) prior to filing a proposal to initiate disincorporation proceedings that determines and certifies specified information.
- Requires the LAFCO executive officer to prepare a comprehensive fiscal analysis for a disincorporation proposal, and provides a specified list of financial information that first must be reviewed and included in the fiscal analysis.
- Requires the county tax collector, if a tax has been levied by the disincorporated city and remains uncollected, to collect it when due and pay it into the county treasury on behalf of the designated successor agency or county to wind up with affairs of the disincorporated city.
- Requires the board of supervisors to provide for collection of debts due the city and wind up its affairs. Requires the appropriate county officer, upon an order by the board of supervisors, to perform any act necessary for winding up the city affairs, as specified.
AS PASSED BY THE ASSEMBLY, this bill:
- Added assessments to the list of information, which includes the amount of any tax or obligation due to the city that must be provided by a city in a written statement to LAFCO prior to initiating disincorporation proceedings.
- Added to the list of information required to be in a comprehensive fiscal analysis prepared by a LAFCO executive officer for a proposal to discorporate a city, the following: a) all current and long-term liabilities, including, but not limited to, debt obligations of the city proposed for disincorporation, including the balance of restricted and unrestricted funds available to extinguish the obligations and liabilities; and, b) the potential financing mechanism or mechanisms to address any shortfalls and obligations for those specified responsibilities, including, but not limited to, taxes or assessments.
- Required the county tax collector, if an assessment has been levied by the disincorporated city and remains uncollected, to collect it in the same manner provided in law for the collection of taxes.
- Required the governing body of the successor, instead of the board of supervisors, to provide for the collection of debts due to the city and wind up its affairs. Requires the officer of the successor, instead of the county officer, to perform any acts necessary for winding up the city affairs, upon order by LAFCO.
- Provided that, if the Commission on State Mandates determines that this bill contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made, pursuant to current laws governing state mandated local costs.
FISCAL EFFECT: According to the Senate Appropriations Committee, pursuant to Senate Rule 28.8, negligible state costs.
COMMENTS:
- Background and Bill Summary. LAFCOs are responsible for coordinating logical and timely changes in local governmental boundaries, conducting special studies that review ways to reorganize, and simplify, and streamlining governmental organization for each city and special district within each county. The courts refer to LAFCOs as the Legislature's "watchdog" over local boundary changes. The Act establishes procedures for local government changes of organization, including city disincorporations. AB 851 (Mayes), Chapter 304, Statutes of 2015, updated the city disincorporation process in the Act and amended many statutes that were enacted decades ago.
This bill makes several minor changes to the statutes that govern the city disincorporation process. For example, this bill will add additional financial information to the list established by AB 851 to be included in the financial analysis as part of an executive director's report to LAFCO in recommendation of approving or disapproving a proposed change of organization or reorganization. Current law requires a fiscal analysis to be done for disincorporation and would provide LAFCO, successors, and the public with more information about the financial status and impact of a city disincorporation. This bill is sponsored by the State Association of County Auditors.
- Arguments in Support. The State Association of County Auditors argues that this bill contains several technical, but important amendments to recently enacted law for the city disincorporation process.
- Arguments in Opposition. None on file.
Analysis Prepared by: Misa Lennox / L. GOV. / (916) 319-3958 FN: 0003581
Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 | AB 2032 |
CONSENT
Bill No: AB 2032
Amended: 6/6/16 in Senate
SENATE GOVERNANCE & FIN. COMMITTEE: 7-0, 6/15/16
AYES: Hertzberg, Nguyen, Beall, Hernandez, Lara, Moorlach, Pavley
SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8
ASSEMBLY FLOOR: 76-0, 5/19/16 (Consent) - See last page for vote
SUBJECT: Change of organization: cities: disincorporation
SOURCE: State Association of County Auditors
DIGEST: This bill requires additional financial information to be identified during a city disincorporation.
Existing law:
- Establishes procedures for local government changes of organization, including city incorporations, disincorporations, annexations to a city or special district, and city and special district consolidations.
- Tasks Local Agency Formation Commissions (LAFCOs) with coordinating logical and timely changes in local governmental boundaries, conducting special studies that review ways to reorganize, simplify, and streamline governmental structures, and preparing a sphere of influence for each city and special district within each county.
- Requires a plan for providing services following disincorporation that identifies the services currently provided in the city and which “successor agencies” will provide those services in the future.
- Requires the LAFCO executive officer must also develop a comprehensive fiscal analysis that reviews and documents information about the financial condition, costs, and revenues of a city proposed for disincorporation, including:
- The cost of providing services and the revenues to the city in the past three fiscal years,
- The cost of current and proposed capital improvements, facilities, assets, and infrastructure,
- The sources of funding available to the entities that take over providing services, and
- The anticipated costs to the agency designated to take over service provision of providing those services.
- Requires the city proposed for disincorporation to provide a written statement that identifies the indebtedness of the city, the amount of money in the city’s treasury, the amount of uncollected tax levies or other obligations due to the city, and the amount of current and future liabilities of the city.
- Requires the county tax collector to collect any unpaid taxes owed to the city and provide the revenues to the agency taking over service provision.
- Requires the board of supervisors to collect debts due to the city and perform any other acts necessary for winding up the affairs of the city.
This bill:
- Requires the comprehensive fiscal analysis prepared by the LAFCO’s executive officer to include:
- All current and long-term liabilities, including debt obligations, of the city proposed for disincorporation and the funds available to discharge those liabilities; and
- The potential financing mechanisms available to meet those obligations. It also requires the city’s written statement of liabilities to include the amount of any assessment due to the city.
- Requires the tax collector to also collect any assessments due to the disincorporated city.
- Directs the successor agency’s governing body and officers, instead of the board of supervisors and the county officers, to wind up the disincorporated city’s affairs.
Background
Last year, the Legislature significantly amended the process for city disincorporations for the first time since 1963, with the goal of ensuring that the full effects of disincorporation are identified and understood before voters decide to approve or reject it (AB 851, Mayes, Chapter 304, Statutes of 2015).
The State Association of County Auditors wants to ensure that all relevant financial information is disclosed during the disincorporation process and that all debts are successfully collected.
Comments
Purpose of the bill. Although AB 851 comprehensively updated LAFCO statutes relating to city disincorporations, some small errors remain. AB 2032 makes minor changes to ensure that important financial information, such as current and future liabilities and potential financing mechanisms, are not left out of the LAFCO executive officer’s comprehensive fiscal analysis of disincorporation. It also ensures that county tax collectors can collect unpaid assessments that are owed to the disincorporated city. Finally, it addresses a technical error that results in inconsistency in the disincorporation process by ensuring that the most appropriate agency, which may or may not be the county, winds up the affairs of the disincorporated city. These changes will make the disincorporation process run as smoothly as possible if it is needed in the future.
FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: Yes
State Association of County Auditors (source)
California Association of LAFCOs
Orange County LAFCO
OPPOSITION: (Verified 6/29/16)
None received
ASSEMBLY FLOOR: 76-0, 5/19/16
AYES: Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker, Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper, Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mayes, Medina, Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Quirk, Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Wood, Rendon
NO VOTE RECORDED: Chang, Mathis, McCarty, Williams
Prepared by: Anton Favorini-Csorba / GOV. & F. / (916) 651-4119
6/29/16 15:56:01
**** END ****
SENATE COMMITTEE ON GOVERNANCE AND FINANCE
Senator Robert M. Hertzberg, Chair
2015 - 2016 Regular
Bill No: | AB 2032 | Hearing Date: | 6/15/16 |
Author: | Linder | Tax Levy: | No |
Version: | 6/6/16 | Fiscal: | Yes |
Consultant: | Favorini-Csorba | ||
Change of organization: cities: disincorporation
Requires additional financial information to be identified during disincorporation.
Background and Existing Law
Local Agency Formation Commissions (LAFCOs) are responsible for coordinating logical and timely changes in local governmental boundaries, conducting special studies that review ways to reorganize, simplify, and streamline governmental structures, and preparing a sphere of influence for each city and special district within each county. The courts refer to LAFCOs as the Legislature's "watchdog" over local boundary changes. The Cortese-Knox Hertzberg Local Government Reorganization Act of 2000 (the Act) establishes procedures for local government changes of organization, including city incorporations, disincorporations, annexations to a city or special district, and city and special district consolidations. LAFCOs regulate boundary changes through the approval or denial of proposals by other public agencies or individuals for these procedures.
Last year, the Legislature significantly amended the process for city disincorporations for the first time since 1963, with the goal of ensuring that the full effects of disincorporation are identified and understood before voters decide to approve or reject it (AB 851, Mayes, 2015). Among other things, AB 851 requires a plan for providing services following disincorporation that identifies the services currently provided in the city and which “successor agencies” will provide those services in the future. The LAFCO executive officer must also develop a comprehensive fiscal analysis that reviews and documents information about the financial condition, costs, and revenues of a city proposed for disincorporation, including:
- The cost of providing services and the revenues to the city in the past 3 fiscal years,
- The cost of current and proposed capital improvements, facilities, assets, and infrastructure,
- The sources of funding available to the entities that take over providing services, and
- The anticipated costs to the agency designated to take over service provision of providing those services.
AB 851 also requires the city proposed for disincorporation to provide a written statement that identifies the indebtedness of the city, the amount of money in the city’s treasury, the amount of uncollected tax levies or other obligations due to the city, and the amount of current and future liabilities of the city. Once disincorporated, the county tax collector must collect any unpaid taxes owed to the city and provide the revenues to the agency taking over service provision, and the board of supervisors must collect debts due to the city and perform any other acts necessary for winding up the affairs of the city.
The State Association of County Auditors wants to ensure that all relevant financial information is disclosed during the disincorporation process and that all debts are successfully collected.
Proposed Law
Assembly Bill 2032 requires the comprehensive fiscal analysis prepared by the LAFCO’s executive officer to include (1) all current and long-term liabilities, including debt obligations, of the city proposed for disincorporation and the funds available to discharge those liabilities; and (2) the potential financing mechanisms available to meet those obligations. It also requires the city’s written statement of liabilities to include the amount of any assessment due to the city, and requires the tax collector to also collect any assessments due to the disincorporated city. AB 2032 directs the successor agency’s governing body and officers, instead of the board of supervisors and the county officers, to wind up the disincorporated city’s affairs.
State Revenue Impact
No estimate.
Comments
1. Purpose of the bill. Although AB 851 (Mayes, 2015) comprehensively updated LAFCO statutes relating to city disincorporations, some small errors remain. AB 2032 makes minor changes to ensure that important financial information, such as current and future liabilities and potential financing mechanisms, are not left out of the LAFCO executive officer’s comprehensive fiscal analysis of disincorporation. It also ensures that county tax collectors can collect unpaid assessments that are owed to the disincorporated city. Finally, it addresses a technical error that results in inconsistency in the disincorporation process by ensuring that the most appropriate agency, which may or may not be the county, winds up the affairs of the disincorporated city. These changes will make the disincorporation process run as smoothly as possible if it is needed in the future.
2. Mandate. The California Constitution generally requires the state to reimburse local agencies for their costs when the state imposes new programs or additional duties on them. According to the Legislative Counsel’s Office, AB 2032 creates a new state-mandated local program because county tax collectors will have to collect unpaid assessments, thereby increasing their duties. AB 2032 says that if the Commission on State Mandates determines that it creates a state-mandated local program, the state must reimburse local agencies by following the existing statutory process for mandate claims.
Assembly Actions
Assembly Local Government Committee: 9-0
Assembly Appropriations Committee: 20-0
Assembly Floor: 76-0
Support and Opposition
(6/9/16)
Support: State Association of County Auditors (sponsor); California Association of LAFCOs; Orange County LAFCO.
Opposition: Unknown.
-- END --
Date of Hearing: May 11, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
ABPCA Bill Id:AB 2032
Author:(Linder) – As Amended Ver:April 11, 2016
Policy Committee: | Local Government | Vote: | 9 - 0 |
|
| ||
|
|
Urgency: No State Mandated Local Program: Yes Reimbursable: Yes
SUMMARY: This bill makes several changes to the city disincorporation process in the Cortese-Knox-Hertzberg Act (Act). Specifically, this bill:
- Adds assessments to the list of information that must be provided by a city in a written statement to the local agency formation commission (LAFCO) prior to initiating disincorporation proceedings.
- Adds all current and long-term liabilities, and the potential financing mechanism or mechanisms to address any shortfalls and obligations for those responsibilities, to the list of information required to be in a comprehensive fiscal analysis prepared by a LAFCO executive officer for a proposal to discorporate a city.
- Requires the county tax collector, if an assessment has been levied by the disincorporated city and remains uncollected, to collect it in the same manner provided in law for the collection of taxes.
- Requires the governing body of the successor, instead of the board of supervisors, to provide for the collection of debts due to the city and wind up its affairs. Requires the officer of the successor, instead of the county officer, to perform any acts necessary for winding up the city affairs, upon order by LAFCO.
FISCAL EFFECT:
- LAFCOs are fee supported, thus there are no state costs associated with their duties.
- Potentially reimbursable state mandate costs to county tax collectors to collect outstanding assessments. These costs are likely minor and disincorporations are rare.
COMMENTS:
- Purpose. According to the author, "The State Association of County Auditors is seeking minor amendments to provide more clarity to county auditors potentially tasked with administering a disincorporation. The amendments will add categories of “obligations” that the successor agency may need disclosed and also further detail on mechanisms to address debt and obligations that will be taken on by the successor."
- Background. LAFCOs are responsible for coordinating changes in local governmental boundaries for each city and special district within each county. The Act establishes procedures for local government changes of organization, including city disincorporations. AB 851 (Mayes), Chapter 304, Statutes of 2015, updated the city disincorporation process in the Act. This bill makes several minor changes to those statutes in order to improve the process.
Analysis Prepared by: Jennifer Swenson / APPR. / (916) 319-2081
Date of Hearing: April 20, 2016
ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
Susan Talamantes Eggman, Chair
ABPCA Bill Id:AB 2032 (
Author:Linder) – As Amended Ver:April 11, 2016
SUBJECT: Change of organization: cities: disincorporation.
SUMMARY: Makes several minor changes to the city disincorporation process in the Cortese-Knox-Hertzberg Act (Act). Specifically, this bill:
- Adds assessments to the list of information, which includes the amount of any tax or obligation due to the city that must be provided by a city in a written statement to the local agency formation commission (LAFCO) prior to initiating disincorporation proceedings.
- Adds to the list of information required to be in a comprehensive fiscal analysis prepared by a LAFCO executive officer for a proposal to discorporate a city, as follows:
- All current and long-term liabilities, including, but not limited to, debt obligations of the city proposed for disincorporation, including the balance of restricted and unrestricted funds available to extinguish the obligations and liabilities; and,
- The potential financing mechanism or mechanisms to address any shortfalls and obligations for those responsibilities identified in this section, including, but not limited to, taxes or assessments.
- Requires the county tax collector, if an assessment has been levied by the disincorporated city and remains uncollected, to collect it in the same manner provided in law for the collection of taxes.
- Requires the governing body of the successor, instead of the board of supervisors, to provide for the collection of debts due to the city and wind up its affairs. Requires the officer of the successor, instead of the county officer, to perform any acts necessary for winding up the city affairs, upon order by LAFCO.
- Provides that, if the Commission on State Mandates determines that this bill contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made, pursuant to current laws governing state mandated local costs.
EXISTING LAW:
- Establishes the procedures for the organization and reorganization of cities, counties, and special districts, including procedures for the disincorporation of a city under the Act.
- Defines "disincorporation" to mean "the dissolution, extinguishment, or termination of the existence of a city and the cessation of its corporate powers, except for the purpose of winding up the affairs of the city."
- Requires the city to provide a written statement to LAFCO prior to filing a proposal to initiate disincorporation proceedings that determines and certifies specified information, including the amount of any tax levies or other obligations due the city that is unpaid or has not been collected.
- Requires the LAFCO executive officer to prepare a comprehensive fiscal analysis for a disincorporation proposal, and provides a specified list of financial information that first must be reviewed and included in the fiscal analysis.
- Requires the county tax collector, if a tax has been levied by the disincorporated city and remains uncollected, to collect it when due and pay it into the county treasury on behalf of the designated successor agency or county to wind up with affairs of the disincorporated city.
- Requires the board of supervisors to provide for collection of debts due the city and wind up its affairs. Requires the appropriate county officer, upon an order by the board of supervisor, to perform any act necessary for winding up the city affairs, as specified.
FISCAL EFFECT: This bill is keyed fiscal.
COMMENTS:
- Background and Bill Summary. LAFCOs are responsible for coordinating logical and timely changes in local governmental boundaries, conducting special studies that review ways to reorganize, and simplify, and streamlining governmental organization for each city and special district within each county. The courts refer to LAFCOs as the Legislature's "watchdog" over local boundary changes. The Act establishes procedures for local government changes of organization, including city disincorporations. AB 851 (Mayes), Chapter 304, Statutes of 2015, updated the city disincorporation process in the Act and amended many statutes that were enacted decades ago.
This bill makes several minor changes to the statutes that govern the city disincorporation process. For example, this bill will add additional financial information to the list established by AB 851 to be included in the financial analysis as part of an executive director's report to LAFCO in recommendation of approving or disapproving a proposed change of organization or reorganization. Current law requires a fiscal analysis to be done for disincorporation and would provide LAFCO, successors, and the public with more information about the financial status and impact of a city disincorporation. This bill is sponsored by the State Association of County Auditors.
- Author's Statement. According to the author, "The State Association of County Auditors is seeking some minor amendments to provide more clarity to county auditors potentially tasked with administering a disincorporation. The amendments will add some categories of “obligations” that the successor agency may need disclosed and also further detail on mechanisms to address debt and obligations that will be taken on by the successor."
- Arguments in Support. The State Association of County Auditors argues that this bill contains several technical, but important amendments to recently enacted law for the city disincorporation process. According to the State Association of County Auditors, they "requested that the disclosure requirements contained in the disincorporation process include current and long term liabilities as well as detail on restricted and unrestricted funds available to extinguish obligations that is due in the distant future was not disclosed."
- Arguments in Opposition. None on file.
REGISTERED SUPPORT / OPPOSITION:
Support
State Association of County Auditors [SPONSOR]
E
Opposition
None on file
Analysis Prepared by: Misa Lennox / L. GOV. / (916) 319-3958
Bill Author
Bill Co-Author(s):