Bill Text: CA AB2618 | 2015-2016 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Community facilities districts: powers.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Passed) 2016-09-29 - Chaptered by Secretary of State - Chapter 796, Statutes of 2016. [AB2618 Detail]

Download: California-2015-AB2618-Amended.html

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BILL NUMBER: AB 2618	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  MAY 2, 2016
	AMENDED IN ASSEMBLY  MARCH 17, 2016

INTRODUCED BY   Assembly Member Nazarian

                        FEBRUARY 19, 2016

   An act to amend  Sections 53313.5 and  
Section  53328.1 of the Government Code, relating to local
government.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 2618, as amended, Nazarian. Community facilities districts:
powers. 
   (1) The 
    The  Mello-Roos Community Facilities Act of 1982
specifies the requirements for the establishment of a community
facilities district, including, among other things, a petition, a
hearing, the establishment of the boundaries of the community
facilities district, and an election on the question.  A
  Existing law authorizes a  community facilities
district formed pursuant  to that law is authorized to, among
other things, finance and refinance the acquisition, installation,
and improvement of energy efficiency, water conservation, and
renewable energy improvements to or on real property and in
buildings, as specified.  
   This bill would specify that for purposes of financing and
refinancing these types of improvements, a community facilities
district may utilize purchase power agreements. 
    (2)     Existing law
additionally authorizes   to  an alternative
procedure  for establishing a community facilities district
 under which the district initially consists solely of
territory proposed for annexation to the community facilities
district in the  future,   future  and
territory is annexed and subjected to special taxes only upon
unanimous approval of the owners, to finance and refinance the
acquisition, installation, and improvement of energy efficiency,
water conservation, and renewable energy improvements.
   This bill would authorize a community facilities district that is
formed pursuant to the alternative procedure to additionally finance
seismic retrofitting, as specified.
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
   
  SECTION 1.    Section 53313.5 of the Government
Code is amended to read:
   53313.5.  A community facilities district may also finance the
purchase, construction, expansion, improvement, or rehabilitation of
any real or other tangible property with an estimated useful life of
five years or longer or may finance planning and design work that is
directly related to the purchase, construction, expansion, or
rehabilitation of any real or tangible property. The facilities need
not be physically located within the district. A district may not
lease out facilities that it has financed except pursuant to a lease
agreement or annexation agreement entered into prior to January 1,
1988. A district may only finance the purchase of facilities whose
construction has been completed, as determined by the legislative
body, before the resolution of formation to establish the district is
adopted pursuant to Section 53325.1, except that a district may
finance the purchase of facilities completed after the adoption of
the resolution of formation if the facility was constructed as if it
had been constructed under the direction and supervision, or under
the authority of, the local agency that will own or operate the
facility. For example, a community facilities district may finance
facilities, including, but not limited to, the following:
   (a) Local park, recreation, parkway, and open-space facilities.
   (b) Elementary and secondary schoolsites and structures provided
that the facilities meet the building area and cost standards
established by the State Allocation Board.
   (c) Libraries.
   (d) Child care facilities, including costs of insuring the
facilities against loss, liability insurance in connection with the
operation of the facility, and other insurance costs relating to the
operation of the facilities, but excluding all other operational
costs. However, the proceeds of bonds issued pursuant to this chapter
shall not be used to pay these insurance costs.
   (e) The district may also finance the construction or
undergrounding of water transmission and distribution facilities,
natural gas pipeline facilities, telephone lines, facilities for the
transmission or distribution of electrical energy, and cable
television lines to provide access to those services to customers who
do not have access to those services or to mitigate existing visual
blight. The district may enter into an agreement with a public
utility to utilize those facilities to provide a particular service
and for the conveyance of those facilities to the public utility.
"Public utility" shall include all utilities, whether public and
regulated by the Public Utilities Commission, or municipal. If the
facilities are conveyed to the public utility, the agreement shall
provide that the cost or a portion of the cost of the facilities that
are the responsibility of the utility shall be refunded by the
public utility to the district or improvement area thereof, to the
extent that refunds are applicable pursuant to (1) the Public
Utilities Code or rules of the Public Utilities Commission, as to
utilities regulated by the commission, or (2) other laws regulating
public utilities. Any reimbursement made to the district shall be
utilized to reduce or minimize the special tax levied within the
district or improvement area, or to construct or acquire additional
facilities within the district or improvement area, as specified in
the resolution of formation.
   (f) The district may also finance the acquisition, improvement,
rehabilitation, or maintenance of any real or other tangible
property, whether privately or publicly owned, for flood and storm
protection services, including, but not limited to, storm drainage
and treatment systems and sandstorm protection systems.
   (g) The district may also pay in full all amounts necessary to
eliminate any fixed special assessment liens or to pay, repay, or
defease any obligation to pay or any indebtedness secured by any tax,
fee, charge, or assessment levied within the area of a community
facilities district or may pay debt service on that indebtedness.
When the amount financed by the district is to pay a tax, fee,
charge, or assessment imposed by a public agency other than the one
conducting the proceedings, and if the amount provided to the other
public agency will not be entirely used to pay off or prepay an
assessment lien or special tax obligation pursuant to the property
owner's legal right to do so, the written consent of the other public
agency is required. In addition, tax revenues of a district may be
used to make lease or debt service payments on any lease,
lease-purchase contract, or certificate of participation used to
finance facilities authorized to be financed by the district.
   (h) Any other governmental facilities that the legislative body
creating the community facilities district is authorized by law to
contribute revenue to, or construct, own, or operate. However, the
district shall not operate or maintain or, except as otherwise
provided in subdivisions (e) and (k), have any ownership interest in
any facilities for the transmission or distribution of natural gas,
telephone service, or electrical energy.
   (i) (1) A district may also pay for the following:
   (A) Work deemed necessary to bring buildings or real property,
including privately owned buildings or real property, into compliance
with seismic safety standards or regulations. Only work certified as
necessary to comply with seismic safety standards or regulations by
local building officials may be financed. No project involving the
dismantling of an existing building and its replacement by a new
building, nor the construction of a new or substantially new building
may be financed pursuant to this subparagraph. Work on qualified
historical buildings or structures shall be done in accordance with
the State Historical Building Code (Part 2.7 (commencing with Section
18950) of Division 13 of the Health and Safety Code).
   (B) In addition, within any county or area designated by the
President of the United States or by the Governor as a disaster area
or for which the Governor has proclaimed the existence of a state of
emergency because of earthquake damage, a district may also pay for
any work deemed necessary to repair any damage to real property
directly or indirectly caused by the occurrence of an earthquake
cited in the President's or the Governor's designation or
proclamation, or by aftershocks associated with that earthquake,
including work to reconstruct, repair, shore up, or replace any
building damaged or destroyed by the earthquake, and specifically
including, but not limited to, work on any building damaged or
destroyed in the Loma Prieta earthquake that occurred on October 17,
1989, or by its aftershocks. Work may be financed pursuant to this
subparagraph only on property or buildings identified in a resolution
of intention to establish a community facilities district adopted
within seven years of the date on which the county or area is
designated as a disaster area by the President or by the Governor or
on which the Governor proclaims for the area the existence of a state
of emergency.
   (2) Work on privately owned property, including reconstruction or
replacement of privately owned buildings pursuant to subparagraph (B)
of paragraph (1), may only be financed by a tax levy if all of the
votes cast on the question of levying the tax, vote in favor of
levying the tax, or with the prior written consent to the tax of the
owners of all property that may be subject to the tax, in that case
the prior written consent shall be deemed to constitute a vote in
favor of the tax and any associated bond issue. Any district created
to finance seismic safety work on privately owned buildings,
including repair, reconstruction, or replacement of privately owned
buildings pursuant to this subdivision, shall consist only of lots or
parcels that the legislative body finds have buildings that were
damaged or destroyed by the earthquake cited pursuant to subparagraph
(B) of paragraph (1) or by the aftershocks of that earthquake.
   (j) A district may also pay for the following:
   (1) Work deemed necessary to repair and abate damage caused to
privately owned buildings and structures by soil deterioration. "Soil
deterioration" means a chemical reaction by soils that causes
structural damage or defects in construction materials including
concrete, steel, and ductile or cast iron. Only work certified as
necessary by local building officials may be financed. No project
involving the dismantling of an existing building or structure and
its replacement by a new building or structure, nor the construction
of a new or substantially new building or structure may be financed
pursuant to this paragraph.
   (2) Work on privately owned buildings and structures pursuant to
this subdivision, including reconstruction, repair, and abatement of
damage caused by soil deterioration, may only be financed by a tax
levy if all of the votes cast on the question of levying the tax vote
in favor of levying the tax. Any district created to finance the
work on privately owned buildings or structures, including
reconstruction, repair, and abatement of damage caused by soil
deterioration, shall consist only of lots or parcels on which the
legislative body finds that the buildings or structures to be worked
on pursuant to this subdivision suffer from soil deterioration.
   (k) A district may also finance the acquisition, improvement,
rehabilitation, or maintenance of any real or other tangible
property, whether privately or publicly owned, for the purposes of
removal or remedial action for the cleanup of any hazardous substance
released or threatened to be released into the environment. As used
in this subdivision, "remedial action" and "removal" shall have the
meaning set forth in Sections 25322 and 25323, respectively, of the
Health and Safety Code, and "hazardous substance" shall have the
meaning set forth in Section 25281 of the Health and Safety Code.
   (  l  ) (1) A district may also finance and
refinance the acquisition, installation, and improvement of energy
efficiency, water conservation, and renewable energy improvements
that are affixed, as specified in Section 660 of the Civil Code, to
or on real property and in buildings, whether the real property or
buildings are privately or publicly owned. Energy efficiency, water
conservation, and renewable energy improvements financed by a
district may only be installed on a privately owned building and on
privately owned real property with the prior written consent of the
owner or owners of the building or real property.
   (2) This chapter shall not be used to finance installation of
energy efficiency, water conservation, and renewable energy
improvements on a privately owned building or on privately owned real
property in connection with the initial construction of a
residential building unless the initial construction is undertaken by
the intended owner or occupant.
   (3) A district may use power purchase agreements for purposes of
financing and refinancing improvements pursuant to this subdivision.
   (m) Any improvement on private property authorized to be financed
by this section shall constitute a "public facility" for purposes of
this chapter and a "public improvement" for purposes of Part 1
(commencing with Section 3100) and Part 2 (commencing with Section
3110) of Division 4.5 of the Streets and Highways Code, whether the
improvement is owned by a private entity, if the legislative body has
determined that the improvement provides a public benefit, or the
improvement is owned by a public agency.
   SEC. 2.   SECTION 1.   Section 53328.1
of the Government Code is amended to read:
   53328.1.  (a) As an alternate and independent procedure for
forming a community facilities district, the legislative body may
form a community facilities district that initially consists solely
of territory proposed for annexation to the community facilities
district in the future, with the condition that a parcel or parcels
within that territory may be annexed to the community facilities
district and subjected to the special tax only with the unanimous
approval of the owner or owners of the parcel or parcels at the time
that the parcel or parcels are annexed. In that case, the legislative
body shall follow the procedures set forth in this article for the
formation of a community facilities district, with the following
exceptions:
   (1) The legislative body shall not be obligated to specify the
rate or rates of special tax in the resolution of intention or the
resolution of formation, provided that both of the following are met:

   (A) The resolution of intention and the resolution of formation
include a statement that the rate shall be established in an amount
required to finance or refinance the authorized improvements and to
pay the district's administrative expenses.
   (B) The maximum rate of special tax applicable to a parcel or
parcels shall be specified in the unanimous approval described in
this section relating to the parcel or parcels.
   (2) The legislative body shall not be obligated to specify in the
resolution of intention the conditions under which the obligation to
pay the specified special tax may be prepaid and permanently
satisfied. Instead, a prepayment provision may be included in the
unanimous approval of the owner or owners of each parcel or parcels
at the time that the parcel or parcels are annexed to the community
facilities district.
   (3) In lieu of approval pursuant to an election held in accordance
with the procedures set forth in Sections 53326, 53327, 53327.5, and
53328, the appropriations limit for the community facilities
district, the applicable rate of the special tax and the method of
apportionment and manner of collection of that tax, and the
authorization to incur bonded indebtedness for the community
facilities district shall be specified and be approved by the
unanimous approval of the owner or owners of each parcel or parcels
at the time that the parcel or parcels are annexed to the community
facilities district. No additional hearings or procedures are
required, and the unanimous approval shall be deemed to constitute a
unanimous vote in favor of the appropriations limit for the community
facilities district, the authorization to levy the special tax on
the parcel or parcels, and the authorization to incur bonded
indebtedness for the community facilities district.
   (4) Notwithstanding Section 53324, this paragraph establishes the
applicable protest provisions in the event a local agency forms a
community facilities district pursuant to the procedures set forth in
this section. If 50 percent or more of the registered voters, or six
registered voters, whichever is more, residing within the territory
proposed to be annexed to the community facilities district in the
future, or if the owners of one-half or more of the area of land
proposed to be annexed in the future and not exempt from the special
tax, file written protests against establishment of the community
facilities district, and protests are not withdrawn so as to reduce
the protests to less than a majority, no further proceedings to form
the community facilities district shall be undertaken for a period of
one year from the date of decision of the legislative body on the
issues discussed at the hearing. If the majority protests of the
registered voters or of the landowners are only against the
furnishing of a specified type or types of facilities or services
within the district, or against levying a specified special tax,
those types of facilities or services or the specified special tax
shall be eliminated from the resolution of formation.
   (5) The legislative body shall not record a notice of special tax
lien against any parcel or parcels in the community facilities
district until the owner or owners of the parcel or parcels have
given their unanimous approval of the parcel's or parcels' annexation
to the community facilities district, at which time the notice of
special tax lien shall be recorded against the parcel or parcels as
set forth in Section 53328.3.
   (b) Notwithstanding the provisions of Section 53340, after
adoption of the resolution of formation for a community facilities
district described in subdivision (a), the legislative body may, by
ordinance, provide for the levy of the special taxes on parcels that
will annex to the community facilities district at the rate or rates
to be approved unanimously by the owner or owners of each parcel or
parcels to be annexed to the community facilities district and for
apportionment and collection of the special taxes in the manner
specified in the resolution of formation. No further ordinance shall
be required even though no parcels may then have annexed to the
community facilities district.
   (c) The local agency may bring an action to determine the validity
of any special taxes levied pursuant to this chapter and authorized
pursuant to the procedures set forth in this section pursuant to
Chapter 9 (commencing with Section 860) of Title 10 of Part 2 of the
Code of Civil Procedure. Notwithstanding Section 53359, if an action
is brought by an interested person pursuant to Section 863 of the
Code of Civil Procedure to determine the validity of any special
taxes levied against a parcel pursuant to this chapter and authorized
pursuant to the procedures set forth in this section, the action
shall be brought pursuant to Chapter 9 (commencing with Section 860)
of Title 10 of Part 2 of the Code of Civil Procedure, but shall,
notwithstanding the time limits specified in Section 860 of the Code
of Civil Procedure, be commenced within 15 days after the date on
which the notice of special tax lien is recorded against the parcel.
Any appeal from a judgment in any action or proceeding described in
this subdivision shall be commenced within 30 days after entry of
judgment.
   (d) A community facilities district formed pursuant to this
section may only finance facilities pursuant to subdivisions (i) or
(l) of Section 53313.5.
   (e) In connection with formation of a community facilities
district and annexation of a parcel or parcels to the community
facilities district pursuant to this section, and the conduct of an
election on the proposition to authorize bonded indebtedness pursuant
to the alternate procedures set forth in Section 53355.5, the local
agency may, without additional hearings or procedures, designate a
parcel or parcels as an improvement area within the community
facilities district. After the designation of a parcel or parcels as
an improvement area, all proceedings for approval of the
appropriations limit, the rate and method of apportionment and manner
of collection of special tax and the authorization to incur bonded
indebtedness for the parcel or parcels shall apply only to the
improvement area.
   (f) In connection with a community facilities district formed
under this section, as an alternate and independent procedure for
making the changes described in Section 53330.7, the changes may be
made with the unanimous approval of the owner or owners of the parcel
or parcels that will be affected by the change and with the written
consent of the local agency. No additional hearings or procedures are
required, and the unanimous approval shall be deemed to constitute a
unanimous vote in favor of the proposed changes. If the proceeds of
a special tax are being used to retire any debt incurred pursuant to
this chapter and the unanimous approval relates to the reduction of
the special tax rate, the unanimous approval shall recite that the
reduction or termination of the special tax will not interfere with
the timely retirement of that debt.