Existing law, the Mello-Roos Community Facilities Act of 1982, authorizes the legislative body of a local agency, as defined, to create a community facilities district to finance specified types of services within an area.

Existing law prohibits a territory that is dedicated or restricted to agricultural, open-space, or conservation uses from being included within or annexed to a specified community facilities district without the landowners consent.

This bill would, notwithstanding those prohibitions, specify that for territory that is located within the regional shoreline of the County of San Mateo, the consent of a landowner is not required, if specified conditions are met.

This bill would make legislative findings and declarations as to the necessity of a special statute for the County of San Mateo.

Existing law, the Mello-Roos Community Facilities Act of 1982, authorizes the legislative body of a local agency, as defined, to create a community facilities district to finance specified types of services within an area.

Existing law prohibits a territory that is dedicated or restricted to agricultural, open-space, or conservation uses from being included within or annexed to a specified community facilities district without the landowners consent.

This bill would, notwithstanding those prohibitions, specify that for territory that is located within the regional shoreline of the County of San Mateo, the consent of a landowner is not required, if specified conditions are met.

This bill would make legislative findings and declarations as to the necessity of a special statute for the County of San Mateo.

Existing law, the Mello-Roos Community Facilities Act of 1982, authorizes the legislative body of a local agency, as defined, to create a community facilities district to finance specified types of services within an area.

Existing law prohibits a territory that is dedicated or restricted to agricultural, open-space, or conservation uses from being included within or annexed to a specified community facilities district without the landowners consent.

This bill would, notwithstanding those prohibitions, specify that for territory that is located within the regional shoreline of the County of San Mateo, the consent of a landowner is not required, if specified conditions are met.

This bill would make legislative findings and declarations as to the necessity of a special statute for the County of San Mateo.

Existing law, the Mello-Roos Community Facilities Act of 1982, authorizes the legislative body of a local agency, as defined, to create a community facilities district to finance specified types of services within an area.

Existing law prohibits a territory that is dedicated or restricted to agricultural, open-space, or conservation uses from being included within or annexed to a specified community facilities district without the landowners consent.

This bill would, notwithstanding those prohibitions, specify that for territory that is located within the regional shoreline of the County of San Mateo, the consent of a landowner is not required, if specified conditions are met.

This bill would make legislative findings and declarations as to the necessity of a special statute for the County of San Mateo.

Existing law, the Mello-Roos Community Facilities Act of 1982, authorizes the legislative body of a local agency, as defined, to create a community facilities district to finance specified types of services within an area.

Existing law prohibits a territory that is dedicated or restricted to agricultural, open-space, or conservation uses from being included within or annexed to a specified community facilities district without the landowners consent.

This bill would, notwithstanding those prohibitions, specify that for territory that is located within the regional shoreline of the County of San Mateo, the consent of a landowner is not required, if specified conditions are met.

This bill would make legislative findings and declarations as to the necessity of a special statute for the County of San Mateo.

 UNFINISHED BUSINESS  

Bill No: SB 390

Author: Becker (D), et al.

Amended: 8/20/25 in Assembly

Vote: 21

SENATE LOCAL GOVERNMENT COMMITTEE: 7-0, 5/7/25

AYES: Durazo, Choi, Arreguín, Cabaldon, Laird, Seyarto, Wiener

SENATE FLOOR: 39-0, 5/27/25

AYES: Allen, Alvarado-Gil, Archuleta, Arreguín, Ashby, Becker, Blakespear, Cabaldon, Caballero, Cervantes, Choi, Cortese, Dahle, Durazo, Gonzalez, Grayson, Grove, Hurtado, Jones, Laird, Limón, McGuire, McNerney, Menjivar, Niello, Ochoa Bogh, Padilla, Pérez, Richardson, Rubio, Seyarto, Smallwood-Cuevas, Stern, Strickland, Umberg, Valladares, Wahab, Weber Pierson, Wiener

NO VOTE RECORDED: Reyes

ASSEMBLY FLOOR: 74-1, 8/28/25 - See last page for vote

SUBJECT: Community facilities district: inclusion or annexation of territory: County of San Mateo

SOURCE: City of South San Francisco

DIGEST:

This bill allows Mello-Roos Community Facilities Districts in the regional shoreline of the County of San Mateo to include properties with specified easements without landowner consent.

Assembly Amendments

of 8/20/25 add coauthors.

ANALYSIS:

Existing law:

1. Allows, under the Mello-Roos Community Facilities Act, counties, cities, special districts, and school districts to levy special taxes (parcel taxes) to finance a wide variety of public works, such as parks, recreation centers, schools, libraries, child care facilities, and utility infrastructure.
2. Allows a Mello-Roos Community Facilities District (CFD) to issue bonds against these special taxes to finance the public works projects with 2/3-voter approval.
3. Provides that if there are fewer than 12 registered voters in the territory of the CFD, the affected landowners vote.
4. Prohibits including in a CFD territory that is subject to open space, conservation, or agricultural use easements unless the landowner of the parcel consents.

This bill provides that the consent of a landowner owning territory that is dedicated or restricted to agricultural, open-space, or conservation uses is not required in order to include land within a CFD, if the territory:

• 1. Is located within the regional shoreline of the County of San Mateo; and
  2. Has existing entitlements for, or is already developed with, development of commercial, residential, or industrial uses.

Background

South San Francisco. The City of South San Francisco, located within the County of San Mateo, fronts the San Francisco Bay. South San Francisco incorporated in 1908 following a dispute within the City of San Bruno over the failure to approve development of a smelter. South San Francisco became known as the “industrial city” as other industrial development located there. Today, South San Francisco is better known for its biotechnology firms: the biotechnology giant Genentech opened in 1976 and today is the city’s largest employer.

Because of its location on the Bay, the shoreline within South San Francisco is subject to the jurisdiction of the San Francisco Bay Conservation and Development Commission (BCDC), which the Legislature created in 1965 to regulate development in and around the San Francisco Bay to protect the Bay’s health and ensure public access. BCDC regulates activities in the Bay, in some connected wetlands and waterways, in the Bay’s salt ponds, and in a 100-foot wide strip of land surrounding the Bay (the shoreline band).

State law authorizes BCDC to issue permits for certain actions, including to make any substantial change in use of any water, land or structure in its jurisdiction. Accordingly, development activities—which can range from residential and commercial endeavors to piers and ports—in the shoreline band require a permit from BCDC.

To ensure public access, BCDC often requires easements on properties or dedication of land to public uses as a condition of development.

South San Francisco development plans. South San Francisco expects to experience rapid growth in employees and residents in its “Eastern Neighborhoods” area near the shoreline: growing from 35,000 employees in 2019 to 45,000 in 2024, with a projected increase to over 100,000 employees and 10,000 residents by 2040. Two significant developments include the existing Genentech campus, which is regulated by a Master Plan that includes additional development capacity, and Oyster Point, which is a planned mixed-use development of 50 acres along the waterfront. Oyster Point has received the necessary entitlements to begin construction and has completed the first phase of its development, with four phases remaining to be completed.

To support this growth, South San Francisco needs to improve its transportation infrastructure, including to rehabilitate roadways, develop transit corridors, make pedestrian improvements, and establish bikeways and trails. To fund these activities, South San Francisco wants to establish a CFD. However, there are over 100 property owners in the proposed CFD, and many of the properties have granted easements to BCDC as a result of BCDC permitting requirements. As a result, Mello-Roos requires the consent of those property owners to include their parcels in the CFD. South San Francisco is concerned that this requirement will allow property owners to opt out of paying the taxes that support the CFD, even though they would benefit from the transportation improvements that it would fund. It wants the Legislature to create an exception to the consent requirement in the Mello-Roos Act.

Comments

Purpose of this bill. According to the author, “SB 390 is a targeted bill to fix a loophole affecting infrastructure financing in South San Francisco. Under current law, parcels with conservation easements, even if fully developed, are exempt from being included in a Community Facilities District (CFD) without landowner consent. This has blocked the City from equitably funding critical shoreline infrastructure. SB 390 allows these parcels to be included in a CFD when clear public benefit criteria are met—ensuring all benefiting properties contribute fairly to projects like flood protection and public access, while preserving conservation goals.”

Splitting this bill. Under the Mello-Roos Act, if there are fewer than 12 registered voters that live within the territory of a CFD, landowners in the area cast the vote to levy a special tax. Because CFDs apportion votes on the basis of acreage, larger landowners have a bigger say (and pay more of the tax). They can use this to prevail over smaller landowners—except if those landowners have open space or conservation easements on their properties. SB 390 creates an exception to this requirement for properties that have entitled or existing development on them, on the logic that (1) these properties are not actually agricultural or open space, and (2) the proposed transportation improvements will benefit these properties, so their owners should pay their fair share of the infrastructure costs. SB 390 doesn’t remove the vote requirement to impose the tax, but it does take away a tool that landowners might use to resist paying the tax, for better or worse.

FISCAL EFFECT: Appropriation: No Fiscal Com.: No Local: No

SUPPORT: (Verified 8/28/25)

City of South San Francisco (source)

OPPOSITION: (Verified 8/28/25)

None received

ASSEMBLY FLOOR: 74-1, 8/28/25

AYES: Addis, Aguiar-Curry, Ahrens, Alanis, Arambula, Ávila Farías, Bains, Bauer-Kahan, Bennett, Boerner, Bonta, Bryan, Calderon, Caloza, Carrillo, Castillo, Chen, Connolly, Davies, Dixon, Elhawary, Ellis, Flora, Fong, Gabriel, Gallagher, Garcia, Gipson, Jeff Gonzalez, Mark González, Hadwick, Haney, Harabedian, Hart, Hoover, Irwin, Jackson, Kalra, Krell, Lackey, Lee, Lowenthal, Macedo, McKinnor, Muratsuchi, Nguyen, Ortega, Pacheco, Papan, Patel, Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Ransom, Celeste Rodriguez, Michelle Rodriguez, Rogers, Blanca Rubio, Sanchez, Schiavo, Schultz, Sharp-Collins, Solache, Soria, Stefani, Tangipa, Wallis, Ward, Wicks, Wilson, Zbur, Rivas

NOES: DeMaio

NO VOTE RECORDED: Alvarez, Berman, Ta, Valencia

Prepared by: Anton Favorini-Csorba / L. GOV. / (916) 651-4119

8/28/25 16:50:03

**** END ****

SENATE THIRD READING

STR Bill Id:SB 390

Author:(Becker)

As Amended Ver:August 20, 2025

Majority vote

SUMMARY

Allows Mello-Roos Community Facilities Districts (CFDs) in San Mateo County to include specified properties with specified easements without landowner consent.

Major Provisions

1. Provides that the consent of a landowner owning territory that is dedicated or restricted to agricultural, open-space, or conservation uses, and is located within the regional shoreline of San Mateo County shall not be required in order to include a territory within or annex a territory to a CFD, if, despite the dedication or restriction, the territory meets either of the following conditions:
   1. A parcel in the territory has existing entitlements for development of commercial, residential, or industrial uses.
   2. A parcel in the territory is already developed with commercial, residential, or industrial uses.
2. Finds and declares that a special statute is necessary and that a general statute cannot be made applicable because of San Francisco Bay Conservation and Development Commission easements in San Mateo County.

COMMENTS

1. Mello-Roos. The Mello-Roos Community Facilities Act allows counties, cities, special districts, and school districts to levy special taxes (parcel taxes), with 2/3rds voter approval, to finance a wide variety of public works, including parks, recreation centers, schools, libraries, child care facilities, and utility infrastructure. A CFD issues bonds against these special taxes to finance the public works projects.

In addition to financing public capital facilities, CFD special taxes can fund a limited list of public services: police services, fire protection, recreation programs, library services, museum operations, park maintenance, flood protection, hazardous waste cleanup, street and road maintenance, lighting of parks, parkways, streets, roads, and open space, plowing and removal of snow, and graffiti management and removal.

To initiate the formation of a CFD, a local agency′s legislative body must adopt a resolution of intention to establish the district, which must do all of the following: describe the district′s boundaries; describe the facilities and services proposed to be financed; state that a special tax, secured by a lien against real property, will be annually levied; specify, in detail, the rate, method of apportionment, and manner of collections of the special tax; and, fix a time and place for public hearing. After holding the hearing and considering protests, the legislative body, to establish the CFD, must adopt a resolution of formation containing all of the information provided in the resolution of intention; and, if a special tax is to be levied, include additional information about the tax levy that must be approved by registered voters. If there are fewer than 12 registered voters in the territory of the CFD, the affected landowners vote. In that case, landowners get one vote per acre included in the CFD.

The Legislature enacted SB 1515 (Machado), Chapter 174, Statutes of 2002, to prevent local officials from levying Mello-Roos taxes for public works when the property owner had restricted their property to open space and agricultural uses through voluntary easements or contractual restrictions under the Williamson Act. SB 1515 excluded from a CFD lands subject to any of those easements or contracts from a CFD that provides facilities or services related to sewers, nonagricultural water, or streets and roads unless the landowner consents.

1. South San Francisco. The City of South San Francisco, located within the County of San Mateo, fronts the San Francisco Bay. South San Francisco incorporated in 1908 and currently has a population of more than 65,000 residents. Today, South San Francisco is known for its more than 250 biotechnology firms including Genentech. Because of its location on the Bay, the shoreline within South San Francisco is subject to the jurisdiction of the San Francisco Bay Conservation and Development Commission (BCDC), which the Legislature created in 1965 to regulate development in and around the San Francisco Bay. BCDC regulates activities in the Bay, in some connected wetlands and waterways, in the Bay′s salt ponds, and in a 100-foot wide strip of land surrounding the Bay (the shoreline band).

State law authorizes BCDC to issue permits for certain actions, including to make any substantial change in use of any water, land or structure in its jurisdiction. Accordingly, development activities, which can range from residential and commercial endeavors to piers and ports, in the shoreline band require a permit from BCDC. To ensure public access, BCDC often requires easements on properties or dedication of land to public uses as a condition of development.

1. South San Francisco Development Plans. South San Francisco expects to experience rapid growth in employees and residents in its ″Eastern Neighborhoods″ area near the shoreline: growing from 35,000 employees in 2019 to 45,000 in 2024, with a projected increase to over 100,000 employees and 10,000 residents by 2040.

To support this growth, South San Francisco needs to improve its transportation infrastructure, including to rehabilitate roadways, develop transit corridors, make pedestrian improvements, and establish bikeways and trails. To help fund these activities, South San Francisco wants to establish a CFD. However, there are many properties that have been granted easements to BCDC as a result of BCDC permitting requirements. As a result, CFD Law requires the consent of those property owners to include their parcels in the CFD.

According to the Author

″SB 390 is a targeted bill to fix a loophole affecting infrastructure financing in South San Francisco. Under current law, parcels with conservation easements, even if fully developed, are exempt from being included in a Community Facilities District (CFD) without landowner consent. This has blocked the City from equitably funding critical shoreline infrastructure. SB 390 allows these parcels to be included in a CFD when clear public benefit criteria are met—ensuring all benefiting properties contribute fairly to projects like flood protection and public access, while preserving conservation goals.″

Arguments in Support

According to the sponsors, the City of South San Francisco, ″The City of South San Francisco′s East of 101 area is home to the largest and fastest-growing biotechnology cluster in the world, with over 250 firms and 7.5 million square feet of space under construction or approved for development. In addition, the area hosts one of the most active and diverse hubs of industrial and warehouse activity in the Bay Area. The City anticipates the East of 101 area to see a tripling of employees to approximately 100,000 by 2040.

″To respond to and prepare for this growth, and to ensure that South San Francisco remains a global leader in biotechnology innovation, the City is implementing its transportation improvements that enhance transit, biking, and pedestrian safety, intersection improvements to facilitate a more efficient movement of cars and trucks, and improved access to the Bay Trail and shoreline for residential neighborhoods and the downtown with crossings over Highway 101. The work will be funded by General Fund dollars and the Eastern Neighborhoods CFD, consisting of over 330 property owners and 479 parcels whose biotechnology, office, warehouse, industrial, and hospitality tenants face significant transportation challenges.

″The Mello-Roos Act grants counties, cities, special districts, and school districts the authority to form CFDs, dependent on a supermajority vote of property owners in the proposed district, to finance critical public infrastructure such as transportation, school, and sewer improvements. Under Government Code Section 53312.8, the Mello-Roos Act exempts landowners with open-space or conservation easements from being included in a CFD without their express consent. This enables parcels that are already developed, but have an open space easement, to avoid contributing their fair share to public infrastructure funding. The conservation easement on these properties accommodates the San Francisco Bay Trail, a 350-mile paved and developed multi-use path that circles the bay. This legislation would in no way impact the existing protections of the Bay Trail. Instead, it would increase access to the trail by providing new connections across Highway 101, which currently acts as a barrier between the western and eastern sides of the City.

″SB 390 seeks to make minor adjustments only as it relates to South San Francisco because properties within the proposed area can evade their financial responsibility to participate in the CFD, even if the public infrastructure funds directly benefit those properties. This loophole arises simply because the property owners previously agreed to restrict development on part of the parcel as a condition for developing the remainder.″

Arguments in Opposition

None on file.

FISCAL COMMENTS

None.

VOTES

SENATE FLOOR: 39-0-1

YES: Allen, Alvarado-Gil, Archuleta, Arreguín, Ashby, Becker, Blakespear, Cabaldon, Caballero, Cervantes, Choi, Cortese, Dahle, Durazo, Gonzalez, Grayson, Grove, Hurtado, Jones, Laird, Limón, McGuire, McNerney, Menjivar, Niello, Ochoa Bogh, Padilla, Pérez, Richardson, Rubio, Seyarto, Smallwood-Cuevas, Stern, Strickland, Umberg, Valladares, Wahab, Weber Pierson, Wiener

ABS, ABST OR NV: Reyes

ASM LOCAL GOVERNMENT: 9-0-1

YES: Carrillo, Hoover, Pacheco, Ramos, Ransom, Blanca Rubio, Stefani, Haney, Wilson

ABS, ABST OR NV: Ta

UPDATED

VERSION: August 20, 2025

CONSULTANT: Jimmy MacDonald / L. GOV. / (916) 319-3958 FN: 0001183

SENATE THIRD READING

STR Bill Id:SB 390

Author:(Becker)

As Amended Ver:April 30, 2025

Majority vote

SUMMARY

Allows Mello-Roos Community Facilities Districts (CFDs) in San Mateo County to include specified properties with specified easements without landowner consent.

Major Provisions

1. Provides that the consent of a landowner owning territory that is dedicated or restricted to agricultural, open-space, or conservation uses, and is located within the regional shoreline of San Mateo County shall not be required in order to include a territory within or annex a territory to a CFD, if, despite the dedication or restriction, the territory meets either of the following conditions:
   1. A parcel in the territory has existing entitlements for development of commercial, residential, or industrial uses.
   2. A parcel in the territory is already developed with commercial, residential, or industrial uses.
2. Finds and declares that a special statute is necessary and that a general statute cannot be made applicable because of San Francisco Bay Conservation and Development Commission easements in San Mateo County.

COMMENTS

1. Mello-Roos. The Mello-Roos Community Facilities Act allows counties, cities, special districts, and school districts to levy special taxes (parcel taxes), with 2/3rds voter approval, to finance a wide variety of public works, including parks, recreation centers, schools, libraries, child care facilities, and utility infrastructure. A CFD issues bonds against these special taxes to finance the public works projects.

In addition to financing public capital facilities, CFD special taxes can fund a limited list of public services: police services, fire protection, recreation programs, library services, museum operations, park maintenance, flood protection, hazardous waste cleanup, street and road maintenance, lighting of parks, parkways, streets, roads, and open space, plowing and removal of snow, and graffiti management and removal.

To initiate the formation of a CFD, a local agency's legislative body must adopt a resolution of intention to establish the district, which must do all of the following: describe the district's boundaries; describe the facilities and services proposed to be financed; state that a special tax, secured by a lien against real property, will be annually levied; specify, in detail, the rate, method of apportionment, and manner of collections of the special tax; and, fix a time and place for public hearing. After holding the hearing and considering protests, the legislative body, to establish the CFD, must adopt a resolution of formation containing all of the information provided in the resolution of intention; and, if a special tax is to be levied, include additional information about the tax levy that must be approved by registered voters. If there are fewer than 12 registered voters in the territory of the CFD, the affected landowners vote. In that case, landowners get one vote per acre included in the CFD.

The Legislature enacted SB 1515 (Machado), Chapter 174, Statutes of 2002, to prevent local officials from levying Mello-Roos taxes for public works when the property owner had restricted their property to open space and agricultural uses through voluntary easements or contractual restrictions under the Williamson Act. SB 1515 excluded from a CFD lands subject to any of those easements or contracts from a CFD that provides facilities or services related to sewers, nonagricultural water, or streets and roads unless the landowner consents.

1. South San Francisco. The City of South San Francisco, located within the County of San Mateo, fronts the San Francisco Bay. South San Francisco incorporated in 1908 and currently has a population of more than 65,000 residents. Today, South San Francisco is known for its more than 250 biotechnology firms including Genentech. Because of its location on the Bay, the shoreline within South San Francisco is subject to the jurisdiction of the San Francisco Bay Conservation and Development Commission (BCDC), which the Legislature created in 1965 to regulate development in and around the San Francisco Bay. BCDC regulates activities in the Bay, in some connected wetlands and waterways, in the Bay's salt ponds, and in a 100-foot wide strip of land surrounding the Bay (the shoreline band).

State law authorizes BCDC to issue permits for certain actions, including to make any substantial change in use of any water, land or structure in its jurisdiction. Accordingly, development activities, which can range from residential and commercial endeavors to piers and ports, in the shoreline band require a permit from BCDC. To ensure public access, BCDC often requires easements on properties or dedication of land to public uses as a condition of development.

1. South San Francisco Development Plans. South San Francisco expects to experience rapid growth in employees and residents in its "Eastern Neighborhoods" area near the shoreline: growing from 35,000 employees in 2019 to 45,000 in 2024, with a projected increase to over 100,000 employees and 10,000 residents by 2040.

To support this growth, South San Francisco needs to improve its transportation infrastructure, including to rehabilitate roadways, develop transit corridors, make pedestrian improvements, and establish bikeways and trails. To help fund these activities, South San Francisco wants to establish a CFD. However, there are many properties that have been granted easements to BCDC as a result of BCDC permitting requirements. As a result, CFD Law requires the consent of those property owners to include their parcels in the CFD.

According to the Author

"SB 390 is a targeted bill to fix a loophole affecting infrastructure financing in South San Francisco. Under current law, parcels with conservation easements, even if fully developed, are exempt from being included in a Community Facilities District (CFD) without landowner consent. This has blocked the City from equitably funding critical shoreline infrastructure. SB 390 allows these parcels to be included in a CFD when clear public benefit criteria are met—ensuring all benefiting properties contribute fairly to projects like flood protection and public access, while preserving conservation goals."

Arguments in Support

According to the sponsors, the City of South San Francisco, "The City of South San Francisco's East of 101 area is home to the largest and fastest-growing biotechnology cluster in the world, with over 250 firms and 7.5 million square feet of space under construction or approved for development. In addition, the area hosts one of the most active and diverse hubs of industrial and warehouse activity in the Bay Area. The City anticipates the East of 101 area to see a tripling of employees to approximately 100,000 by 2040.

"To respond to and prepare for this growth, and to ensure that South San Francisco remains a global leader in biotechnology innovation, the City is implementing its transportation improvements that enhance transit, biking, and pedestrian safety, intersection improvements to facilitate a more efficient movement of cars and trucks, and improved access to the Bay Trail and shoreline for residential neighborhoods and the downtown with crossings over Highway 101. The work will be funded by General Fund dollars and the Eastern Neighborhoods CFD, consisting of over 330 property owners and 479 parcels whose biotechnology, office, warehouse, industrial, and hospitality tenants face significant transportation challenges.

"The Mello-Roos Act grants counties, cities, special districts, and school districts the authority to form CFDs, dependent on a supermajority vote of property owners in the proposed district, to finance critical public infrastructure such as transportation, school, and sewer improvements. Under Government Code Section 53312.8, the Mello-Roos Act exempts landowners with open-space or conservation easements from being included in a CFD without their express consent. This enables parcels that are already developed, but have an open space easement, to avoid contributing their fair share to public infrastructure funding. The conservation easement on these properties accommodates the San Francisco Bay Trail, a 350-mile paved and developed multi-use path that circles the bay. This legislation would in no way impact the existing protections of the Bay Trail. Instead, it would increase access to the trail by providing new connections across Highway 101, which currently acts as a barrier between the western and eastern sides of the City.

"SB 390 seeks to make minor adjustments only as it relates to South San Francisco because properties within the proposed area can evade their financial responsibility to participate in the CFD, even if the public infrastructure funds directly benefit those properties. This loophole arises simply because the property owners previously agreed to restrict development on part of the parcel as a condition for developing the remainder."

Arguments in Opposition

None on file.

FISCAL COMMENTS

None.

VOTES

SENATE FLOOR: 39-0-1

YES: Allen, Alvarado-Gil, Archuleta, Arreguín, Ashby, Becker, Blakespear, Cabaldon, Caballero, Cervantes, Choi, Cortese, Dahle, Durazo, Gonzalez, Grayson, Grove, Hurtado, Jones, Laird, Limón, McGuire, McNerney, Menjivar, Niello, Ochoa Bogh, Padilla, Pérez, Richardson, Rubio, Seyarto, Smallwood-Cuevas, Stern, Strickland, Umberg, Valladares, Wahab, Weber Pierson, Wiener

ABS, ABST OR NV: Reyes

ASM LOCAL GOVERNMENT: 9-0-1

YES: Carrillo, Hoover, Pacheco, Ramos, Ransom, Blanca Rubio, Stefani, Haney, Wilson

ABS, ABST OR NV: Ta

UPDATED

VERSION: April 30, 2025

CONSULTANT: Jimmy MacDonald / L. GOV. / (916) 319-3958 FN: 0000985

Date of Hearing: June 18, 2025

ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT

Juan Carrillo, Chair

SBPCA Bill Id:SB 390

Author:(Becker) – As Amended Ver:April 30, 2025

SENATE VOTE: 39-0

SUBJECT: Community facilities district: inclusion or annexation of territory: County of San Mateo.

SUMMARY: Allows Mello-Roos Community Facilities Districts (CFDs) in San Mateo County to include specified properties with specified easements without landowner consent. Specifically, this bill:

1. Provides that the consent of a landowner owning territory that is dedicated or restricted to agricultural, open-space, or conservation uses, and is located within the regional shoreline of San Mateo County shall not be required in order to include a territory within or annex a territory to a CFD, if, despite the dedication or restriction, the territory meets either of the following conditions:
   1. A parcel in the territory has existing entitlements for development of commercial, residential, or industrial uses.
   2. A parcel in the territory is already developed with commercial, residential, or industrial uses.
2. Finds and declares that a special statute is necessary and that a general statute cannot be made applicable because of San Francisco Bay Conservation and Development Commission easements in San Mateo County.

EXISTING LAW:

1. Allows, under the Mello-Roos Community Facilities Act, counties, cities, special districts, and school districts to levy special taxes (parcel taxes) to finance a wide variety of public works, such as parks, recreation centers, schools, libraries, child care facilities, and utility infrastructure [Government Code (GC) §§ 53311 et seq.]
2. Allows a Mello-Roos Community Facilities District (CFD) to issue bonds against these special taxes to finance the public works projects with 2/3-voter approval (GC §§ 53326 & 53328).
3. Provides that if there are fewer than 12 registered voters in the territory of the CFD, the affected landowners vote on the levy of a special tax (GC § 53326).
4. Specifies that territory that is dedicated or restricted to agricultural, open-space, or conservation uses may not be included within or annexed to a CFD that provides or would provide facilities or services related to sewers, nonagricultural water, or streets and roads, unless the landowner consents to the inclusion or annexation of that territory to the CFD (GC § 53312.8).

FISCAL EFFECT: None.

COMMENTS:

1. Mello-Roos. The Mello-Roos Community Facilities Act allows counties, cities, special districts, and school districts to levy special taxes (parcel taxes), with 2/3rds voter approval, to finance a wide variety of public works, including parks, recreation centers, schools, libraries, child care facilities, and utility infrastructure. A CFD issues bonds against these special taxes to finance the public works projects.

In addition to financing public capital facilities, CFD special taxes can fund a limited list of public services: police services, fire protection, recreation programs, library services, museum operations, park maintenance, flood protection, hazardous waste cleanup, street and road maintenance, lighting of parks, parkways, streets, roads, and open space, plowing and removal of snow, and graffiti management and removal.

To initiate the formation of a CFD, a local agency's legislative body must adopt a resolution of intention to establish the district, which must do all of the following: describe the district's boundaries; describe the facilities and services proposed to be financed; state that a special tax, secured by a lien against real property, will be annually levied; specify, in detail, the rate, method of apportionment, and manner of collections of the special tax; and, fix a time and place for public hearing. After holding the hearing and considering protests, the legislative body, to establish the CFD, must adopt a resolution of formation containing all of the information provided in the resolution of intention; and, if a special tax is to be levied, include additional information about the tax levy that must be approved by registered voters. If there are fewer than 12 registered voters in the territory of the CFD, the affected landowners vote. In that case, landowners get one vote per acre included in the CFD.

The Legislature enacted SB 1515 (Machado), Chapter 174, Statutes of 2002, to prevent local officials from levying Mello-Roos taxes for public works when the property owner had restricted their property to open space and agricultural uses through voluntary easements or contractual restrictions under the Williamson Act. SB 1515 excluded from a CFD lands subject to any of those easements or contracts from a CFD that provides facilities or services related to sewers, nonagricultural water, or streets and roads unless the landowner consents.

1. South San Francisco. The City of South San Francisco, located within the County of San Mateo, fronts the San Francisco Bay. South San Francisco incorporated in 1908 and currently has a population of more than 65,000 residents. Today, South San Francisco is known for its more than 250 biotechnology firms including Genentech. Because of its location on the Bay, the shoreline within South San Francisco is subject to the jurisdiction of the San Francisco Bay Conservation and Development Commission (BCDC), which the Legislature created in 1965 to regulate development in and around the San Francisco Bay. BCDC regulates activities in the Bay, in some connected wetlands and waterways, in the Bay’s salt ponds, and in a 100-foot wide strip of land surrounding the Bay (the shoreline band).

State law authorizes BCDC to issue permits for certain actions, including to make any substantial change in use of any water, land or structure in its jurisdiction. Accordingly, development activities, which can range from residential and commercial endeavors to piers and ports, in the shoreline band require a permit from BCDC. To ensure public access, BCDC often requires easements on properties or dedication of land to public uses as a condition of development.

1. South San Francisco Development Plans. South San Francisco expects to experience rapid growth in employees and residents in its “Eastern Neighborhoods” area near the shoreline: growing from 35,000 employees in 2019 to 45,000 in 2024, with a projected increase to over 100,000 employees and 10,000 residents by 2040.

To support this growth, South San Francisco needs to improve its transportation infrastructure, including to rehabilitate roadways, develop transit corridors, make pedestrian improvements, and establish bikeways and trails. To help fund these activities, South San Francisco wants to establish a CFD. However, there are many properties that have been granted easements to BCDC as a result of BCDC permitting requirements. As a result, CFD Law requires the consent of those property owners to include their parcels in the CFD.

1. Bill Summary and Author’s Statement. This bill provides that the consent of a landowner owning territory that is dedicated or restricted to agricultural, open-space, or conservation uses within the regional shoreline of San Mateo County is not required in order to include land within a CFD, if the territory has existing entitlements for, or is already developed with, development of commercial, residential, or industrial uses. The City of South San Francisco is the sponsor of this bill.

According to the author, “SB 390 is a targeted bill to fix a loophole affecting infrastructure financing in South San Francisco. Under current law, parcels with conservation easements, even if fully developed, are exempt from being included in a Community Facilities District (CFD) without landowner consent. This has blocked the City from equitably funding critical shoreline infrastructure. SB 390 allows these parcels to be included in a CFD when clear public benefit criteria are met—ensuring all benefiting properties contribute fairly to projects like flood protection and public access, while preserving conservation goals."

1. Arguments in Support. According to the sponsors, the City of South San Francisco, “The City of South San Francisco’s East of 101 area is home to the largest and fastest-growing biotechnology cluster in the world, with over 250 firms and 7.5 million square feet of space under construction or approved for development. In addition, the area hosts one of the most active and diverse hubs of industrial and warehouse activity in the Bay Area. The City anticipates the East of 101 area to see a tripling of employees to approximately 100,000 by 2040.

“To respond to and prepare for this growth, and to ensure that South San Francisco remains a global leader in biotechnology innovation, the City is implementing its transportation improvements that enhance transit, biking, and pedestrian safety, intersection improvements to facilitate a more efficient movement of cars and trucks, and improved access to the Bay Trail and shoreline for residential neighborhoods and the downtown with crossings over Highway 101. The work will be funded by General Fund dollars and the Eastern Neighborhoods CFD, consisting of over 330 property owners and 479 parcels whose biotechnology, office, warehouse, industrial, and hospitality tenants face significant transportation challenges.

“The Mello-Roos Act grants counties, cities, special districts, and school districts the authority to form CFDs, dependent on a supermajority vote of property owners in the proposed district, to finance critical public infrastructure such as transportation, school, and sewer improvements. Under Government Code § 53312.8, the Mello-Roos Act exempts landowners with open-space or conservation easements from being included in a CFD without their express consent. This enables parcels that are already developed, but have an open space easement, to avoid contributing their fair share to public infrastructure funding. The conservation easement on these properties accommodates the San Francisco Bay Trail, a 350-mile paved and developed multi-use path that circles the bay. This legislation would in no way impact the existing protections of the Bay Trail. Instead, it would increase access to the trail by providing new connections across Highway 101, which currently acts as a barrier between the western and eastern sides of the City.

“SB 390 seeks to make minor adjustments only as it relates to South San Francisco because properties within the proposed area can evade their financial responsibility to participate in the CFD, even if the public infrastructure funds directly benefit those properties. This loophole arises simply because the property owners previously agreed to restrict development on part of the parcel as a condition for developing the remainder.”

1. Arguments in Opposition. None on file.

REGISTERED SUPPORT / OPPOSITION:

Support

City of South San Francisco [SPONSOR]

Opposition

None on file

Analysis Prepared by: Jimmy MacDonald / L. GOV. / (916) 319-3958

 THIRD READING  

Bill No: SB 390

Author: Becker (D)

Amended: 4/30/25

Vote: 21

SENATE LOCAL GOVERNMENT COMMITTEE: 7-0, 5/7/25

AYES: Durazo, Choi, Arreguín, Cabaldon, Laird, Seyarto, Wiener

SUBJECT: Community facilities district: inclusion or annexation of territory: County of San Mateo

SOURCE: City of South San Francisco

DIGEST:

This bill allows Mello-Roos Community Facilities Districts in the regional shoreline of the County of San Mateo to include properties with specified easements without landowner consent.

ANALYSIS:

Existing law:

1. Allows, under the Mello-Roos Community Facilities Act, counties, cities, special districts, and school districts to levy special taxes (parcel taxes) to finance a wide variety of public works, such as parks, recreation centers, schools, libraries, child care facilities, and utility infrastructure.
2. Allows a Mello-Roos Community Facilities District (CFD) to issue bonds against these special taxes to finance the public works projects with 2/3-voter approval.
3. Provides that if there are fewer than 12 registered voters in the territory of the CFD, the affected landowners vote.
4. Prohibits including in a CFD territory that is subject to open space, conservation, or agricultural use easements unless the landowner of the parcel consents.

This bill provides that the consent of a landowner owning territory that is dedicated or restricted to agricultural, open-space, or conservation uses is not required in order to include land within a CFD, if the territory:

• 1. Is located within the regional shoreline of the County of San Mateo; and
  2. Has existing entitlements for, or is already developed with, development of commercial, residential, or industrial uses.

Background

South San Francisco. The City of South San Francisco, located within the County of San Mateo, fronts the San Francisco Bay. South San Francisco incorporated in 1908 following a dispute within the City of San Bruno over the failure to approve development of a smelter. South San Francisco became known as the “industrial city” as other industrial development located there. Today, South San Francisco is better known for its biotechnology firms: the biotechnology giant Genentech opened in 1976 and today is the city’s largest employer.

Because of its location on the Bay, the shoreline within South San Francisco is subject to the jurisdiction of the San Francisco Bay Conservation and Development Commission (BCDC), which the Legislature created in 1965 to regulate development in and around the San Francisco Bay to protect the Bay’s health and ensure public access. BCDC regulates activities in the Bay, in some connected wetlands and waterways, in the Bay’s salt ponds, and in a 100-foot wide strip of land surrounding the Bay (the shoreline band).

State law authorizes BCDC to issue permits for certain actions, including to make any substantial change in use of any water, land or structure in its jurisdiction. Accordingly, development activities—which can range from residential and commercial endeavors to piers and ports—in the shoreline band require a permit from BCDC.

To ensure public access, BCDC often requires easements on properties or dedication of land to public uses as a condition of development.

South San Francisco development plans. South San Francisco expects to experience rapid growth in employees and residents in its “Eastern Neighborhoods” area near the shoreline: growing from 35,000 employees in 2019 to 45,000 in 2024, with a projected increase to over 100,000 employees and 10,000 residents by 2040. Two significant developments include the existing Genentech campus, which is regulated by a Master Plan that includes additional development capacity, and Oyster Point, which is a planned mixed-use development of 50 acres along the waterfront. Oyster Point has received the necessary entitlements to begin construction and has completed the first phase of its development, with four phases remaining to be completed.

To support this growth, South San Francisco needs to improve its transportation infrastructure, including to rehabilitate roadways, develop transit corridors, make pedestrian improvements, and establish bikeways and trails. To fund these activities, South San Francisco wants to establish a CFD. However, there are over 100 property owners in the proposed CFD, and many of the properties have granted easements to BCDC as a result of BCDC permitting requirements. As a result, Mello-Roos requires the consent of those property owners to include their parcels in the CFD. South San Francisco is concerned that this requirement will allow property owners to opt out of paying the taxes that support the CFD, even though they would benefit from the transportation improvements that it would fund. It wants the Legislature to create an exception to the consent requirement in the Mello-Roos Act.

Comments

Purpose of the bill. According to the author, “SB 390 is a targeted bill to fix a loophole affecting infrastructure financing in South San Francisco. Under current law, parcels with conservation easements, even if fully developed, are exempt from being included in a Community Facilities District (CFD) without landowner consent. This has blocked the City from equitably funding critical shoreline infrastructure. SB 390 allows these parcels to be included in a CFD when clear public benefit criteria are met—ensuring all benefiting properties contribute fairly to projects like flood protection and public access, while preserving conservation goals.”

Splitting the bill. Under the Mello-Roos Act, if there are fewer than 12 registered voters that live within the territory of a CFD, landowners in the area cast the vote to levy a special tax. Because CFDs apportion votes on the basis of acreage, larger landowners have a bigger say (and pay more of the tax). They can use this to prevail over smaller landowners—except if those landowners have open space or conservation easements on their properties. SB 390 creates an exception to this requirement for properties that have entitled or existing development on them, on the logic that (1) these properties are not actually agricultural or open space, and (2) the proposed transportation improvements will benefit these properties, so their owners should pay their fair share of the infrastructure costs. SB 390 doesn’t remove the vote requirement to impose the tax, but it does take away a tool that landowners might use to resist paying the tax, for better or worse.

FISCAL EFFECT: Appropriation: No Fiscal Com.: No Local: No

SUPPORT: (Verified 5/8/25)

City of South San Francisco (source)

OPPOSITION: (Verified 5/8/25)

None received

Prepared by: Anton Favorini-Csorba / L. GOV. / (916) 651-4119

5/9/25 13:49:39

**** END ****

SENATE COMMITTEE ON LOCAL GOVERNMENT

Senator María Elena Durazo, Chair

2025 - 2026 Regular

Community facilities district: inclusion or annexation of territory: County of San Mateo

Allows Mello-Roos Community Facilities Districts to include properties with specified easements without landowner consent.

Background

The Mello-Roos Community Facilities Act allows counties, cities, special districts, and school districts to levy special taxes (parcel taxes) to finance a wide variety of public works, such as parks, recreation centers, schools, libraries, child care facilities, and utility infrastructure. A Mello-Roos Community Facilities District (CFD) issues bonds against these special taxes to finance the public works projects. Like all special taxes, Mello-Roos Act special taxes require 2/3-voter approval. If there are fewer than 12 registered voters in the territory of the CFD, the affected landowners vote. In that case, landowners get one vote per acre included in the CFD.

In addition to financing public or governmental capital facilities, Mello-Roos Act special taxes can fund a limited list of public services: police services, fire protection, recreation programs, library services, museum operations, park maintenance, flood protection, hazardous waste cleanup, street and road maintenance, lighting of parks, parkways, streets, roads, and open space, plowing and removal of snow, and graffiti management and removal.

The Mello-Roos Act is an important feature of the local fiscal landscape, providing local officials with a key tool for accumulating the public capital needed to pay for public works projects needed to support new development or redevelopment.

When some landowners complained that local officials were levying Mello-Roos taxes for public works even though they had restricted their property to open space and agricultural uses through voluntary easements or contractual restrictions under the Williamson Act, the Legislature enacted SB 1515 (Machado, 2002). SB 1515 excludes from a CFD lands subject to any of those easements or contracts from a CFD that provides facilities or services related to sewers, nonagricultural water, or streets and roads unless the landowner consents.

South San Francisco. The City of South San Francisco, located within the County of San Mateo, fronts the San Francisco Bay. South San Francisco incorporated in 1908 following a dispute within the City of San Bruno over the failure to approve development of a smelter. South San Francisco became known as the “industrial city” as other industrial development located there. Today, South San Francisco is better known for its biotechnology firms: the biotechnology giant Genentech opened in 1976 and today is the city’s largest employer.

Because of its location on the Bay, the shoreline within South San Francisco is subject to the jurisdiction of the San Francisco Bay Conservation and Development Commission (BCDC), which the Legislature created in 1965 to regulate development in and around the San Francisco Bay to protect the Bay’s health and ensure public access. BCDC regulates activities in the Bay, in some connected wetlands and waterways, in the Bay’s salt ponds, and in a 100-foot wide strip of land surrounding the Bay (the shoreline band).

State law authorizes BCDC to issue permits for certain actions, including to make any substantial change in use of any water, land or structure in its jurisdiction. Accordingly, development activities—which can range from residential and commercial endeavors to piers and ports—in the shoreline band require a permit from BCDC.

To ensure public access, BCDC often requires easements on properties or dedication of land to public uses as a condition of development.

South San Francisco development plans. South San Francisco expects to experience rapid growth in employees and residents in its “Eastern Neighborhoods” area near the shoreline: growing from 35,000 employees in 2019 to 45,000 in 2024, with a projected increase to over 100,000 employees and 10,000 residents by 2040. Two significant developments include the existing Genentech campus, which is regulated by a Master Plan that includes additional development capacity, and Oyster Point, which is a planned mixed-use development of 50 acres along the waterfront. Oyster Point has received the necessary entitlements to begin construction and has completed the first phase of its development, with four phases remaining to be completed.

To support this growth, South San Francisco needs to improve its transportation infrastructure, including to rehabilitate roadways, develop transit corridors, make pedestrian improvements, and establish bikeways and trails. To fund these activities, South San Francisco wants to establish a CFD. However, there are over 100 property owners in the proposed CFD, and many of the properties have granted easements to BCDC as a result of BCDC permitting requirements. As a result, Mello-Roos requires the consent of those property owners to include their parcels in the CFD. South San Francisco is concerned that this requirement will allow property owners to opt out of paying the taxes that support the CFD, even though they would benefit from the transportation improvements that it would fund. It wants the Legislature to create an exception to the consent requirement in the Mello-Roos Act.

Proposed Law

Senate Bill 390 provides that the consent of a landowner owning territory that is dedicated or restricted to agricultural, open-space, or conservation uses is not required in order to include land within a CFD, if the territory:

• Is located within the regional shoreline of the County of San Mateo; and
• Has existing entitlements for, or is already developed with, development of commercial, residential, or industrial uses.

Comments

1. Purpose of the bill. According to the author, “SB 390 is a targeted bill to fix a loophole affecting infrastructure financing in South San Francisco. Under current law, parcels with conservation easements, even if fully developed, are exempt from being included in a Community Facilities District (CFD) without landowner consent. This has blocked the City from equitably funding critical shoreline infrastructure. SB 390 allows these parcels to be included in a CFD when clear public benefit criteria are met—ensuring all benefiting properties contribute fairly to projects like flood protection and public access, while preserving conservation goals.”

2. Splitting the bill. Under the Mello-Roos Act, if there are fewer than 12 registered voters that live within the territory of a CFD, landowners in the area cast the vote to levy a special tax. Because CFDs apportion votes on the basis of acreage, larger landowners have a bigger say (and pay more of the tax). They can use this to prevail over smaller landowners—except if those landowners have open space or conservation easements on their properties. SB 390 creates an exception to this requirement for properties that have entitled or existing development on them, on the logic that (1) these properties are not actually agricultural or open space, and (2) the proposed transportation improvements will benefit these properties, so their owners should pay their fair share of the infrastructure costs. SB 390 doesn’t remove the vote requirement to impose the tax, but it does take away a tool that landowners might use to resist paying the tax, for better or worse.

3. Special legislation. Section 16 of Article IV of the California Constitution prohibits special legislation when a general law can apply. SB 390 contains findings and declarations explaining the need for legislation that applies only to the County of San Mateo because of the unique and special circumstances due to BCDC easements in the County of San Mateo.

Support and Opposition

(5/2/2025)

Support: City of South San Francisco (Sponsor)

Opposition: None Submitted

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