Article 4. Improvement Districts of California Health And Safety Code >> Division 6. >> Part 1. >> Chapter 4. >> Article 4.

An improvement district may be formed to undertake any project for any one or more of the purposes stated in Section 6512 that is of special benefit to the area of such improvement district, including in any such project, any required investigation, study, analysis, appraisal or financing plan.

The formation of an improvement district shall be initiated by a resolution of the district board which shall contain all of the following:
  (a) A description of the proposed boundaries of the improvement district proposed to be formed.
  (b) A brief general description of the project proposed to be undertaken within such improvement district.
  (c) A statement that the proposed project will be a special benefit to such improvement district.
  (d) A statement of the district board's intention to undertake the project.
  (e) An estimate of the cost of the proposed project.
  (f) The method by which the proposed project is proposed to be financed, including the amount of bonded debt, if any, to be incurred; and, to the extent that the project is to be financed by taxes levied in such improvement district for purposes other than the payment of the principal of, and interest on, bonds, the proposed maximum amount of such tax which may be levied in any year, which maximum shall not exceed one dollar ($1) per one hundred dollars ($100) of the assessed value of the taxable property in such improvement district.
  (g) The time, place, and date for a hearing by the district board on the matters stated in such resolution, which shall be not less than 15 nor more than 60 days after the date of adoption of the resolution initiating formation proceedings.

The secretary shall give notice of the time and place of the hearing by causing a copy of the resolution adopted pursuant to Section 6550.2 to be published for the time provided by Section 6066 of the Government Code in a newspaper of general circulation, circulated in the proposed improvement district, but if there is no such newspaper, then in one circulated in the county in which the proposed improvement district is situated. The secretary shall also mail copies of the resolution to all landowners owning land within the proposed improvement district.

The hearing on the proposed improvement district shall be held by the board of directors upon the date and at the time specified in the resolution initiating proceedings. At the hearing the board of directors shall hear and receive any oral or written protests, objections, or evidence which shall be made, presented, or filed. Any person who shall have filed a written protest may withdraw the same at any time prior to the conclusion of the hearing.

The district board shall have power to change the boundaries of the proposed improvement district, the project to be undertaken, the estimate of the cost of the project, the method by which the project is to be financed, or any two or more of such matters; provided, however, that the board shall not change such boundaries so as to include any territory which will not, in its judgment, be benefited by such improvement and shall exclude from the proposed improvement district any territory which it finds will not be benefited by inclusion therein.

If the district board proposes to change the boundaries of the proposed improvement district by adding territory thereto, the project, the estimate of cost, or the method by which the project is to be financed or to increase the proposed maximum amount of the tax, it shall state the proposed change and the time and place for a hearing thereon in a resolution and give notice of such hearing in the manner required by Section 6550.3. At the time and place fixed for the hearing, or at any time and place to which the hearing is adjourned, the district board shall continue with the hearing. At the hearing any person interested, including any person owning property within the district or within the proposed improvement district, may appear and present any matters material to the changes stated in the notice.

If prior to the conclusion of the hearing written protests against the formation of the proposed improvement district or the proposed project signed by the current holders of title to taxable property within the proposed improvement district which, as shown by the last equalized assessment roll, constitutes more than one-half of the total assessed value of taxable property within the proposed improvement district, are filed with the district board, further proceedings relating to the proposed improvement district and the proposed project shall be terminated and no proceedings for the formation of any improvement district to undertake the proposed project shall be instituted for a period of six months following the date of the conclusion of the hearing. Where taxable property is owned in joint tenancy, tenancy in common, or any other multiple ownership, the first one of such owners who signs the written protest shall commit all such property to the protest.

At the conclusion of the hearing, if the proceedings are not terminated pursuant to Section 6550.7, the district board shall by resolution determine whether it is deemed necessary to form the improvement district and to undertake the project and, if so, the amount of any proposed debt to be incurred to finance the project, that the exterior boundaries of the portion of the district which will be benefited are set forth on a map on file with the district board (which map shall govern for all details as to the extent of the improvement district), and that such portion of the district set forth on such map shall thereupon constitute and be known as "Improvement District No. __ of ____ (name of sanitary district)," and the determination made in said resolution shall be final and conclusive. After the formation of such improvement district within a sanitary district, all proceedings for the purpose of any bond election for the project for which the improvement district was formed shall be limited and shall apply only to such improvement district, and taxes for the payment of such bonds and the interest thereon, shall be derived exclusively from an annual tax upon the taxable property in such improvement district.

When the district board has made its determinations as provided in Section 6550.8, and if the board deems it necessary to incur a bonded indebtedness to finance the project for which the improvement district was formed, the board shall by resolution call a special election in such improvement district for the purpose of submitting to the qualified voters thereof, the proposition of incurring such indebtedness by the issuance of bonds of the district for such improvement district. Such resolution shall state:
  (a) That the board deems it necessary to incur the bonded indebtedness.
  (b) The purpose for which the bonded indebtedness will be incurred.
  (c) The amount of debt to be incurred.
  (d) The name of the improvement district to be benefited by such indebtedness, and that a map showing the exterior boundaries of such improvement district is on file with the district board, which map shall govern for all details as to the extent of the improvement district.
  (e) That taxes for the payment of such bonds and the interest thereon shall be derived exclusively from an annual tax upon the taxable property in such improvement district.
  (f) The maximum term the bonds proposed to be issued shall run before maturity, which shall not exceed 40 years.
  (g) The maximum rate of interest to be paid, which shall not be more than the rate specified in this part for bonds of the district, payable at the times specified in this chapter for bonds of the district.
  (h) The measure to be submitted to the voters.
  (i) The date of the election.
  (j) The election precincts, polling places and election officers.

Except as otherwise provided in this article, notice of the election shall be given and the election shall be held and conducted in the same manner as elections for the authorization of bonds of the entire sanitary district, and if two-thirds of the votes cast are in favor of incurring the bonded indebtedness, as proposed, bonds of the district, issued in the name of the district and designated "Bonds of ____ (naming the sanitary district) for Improvement District No. __", shall be issued and sold for the amount stated in the resolution calling the election in the same form and manner as bonds of the entire sanitary district. Each bond of the district for an improvement district and all interest coupons thereof, shall state that taxes for the payment thereof shall be derived exclusively from an annual tax upon the taxable property in the improvement district.

No irregularities or informalities in conducting such election shall invalidate the same, if the election shall have otherwise been fairly conducted. Any action or proceedings, wherein the validity of the formation of the improvement district or of any bonds issued for it or of the proceedings in relation thereto is contested, questioned or denied, shall be commenced within three months from the date of such election; otherwise, such bonds and all proceedings in relation thereto, including the formation of the improvement district, shall be held to be valid and in every respect legal and incontestable.

Any moneys required to be raised from taxes for the purpose of paying the principal of and interest on bonds of the district for an improvement district shall be derived exclusively from an annual tax upon the taxable property in the improvement district of such sanitary district, and all the taxable property within the improvement district of such sanitary district shall be and remain liable to be taxed for such payments. The district board shall annually, at the time and in the manner of levying other district taxes, levy and cause to be collected a tax upon the taxable property in the improvement district, based upon the last equalized assessment roll of the district, sufficient to pay the interest on the bonds for that year and such portion of the principal as is to become due before the time for making the next general tax levy. Such bonds and the interest thereon shall not be taxable in this state.

Subject to such limitations as may be contained in the resolution declaring the improvement district to be formed, the district board shall have the power in any year to cause taxes to be levied and collected in any improvement district to finance any project of such improvement district and to pay the costs of administration, maintenance, and operation of any works or facilities of, or for, such improvement district.

The procedure for levying and collecting taxes in any improvement district shall be the same as is provided in Chapter 7 (commencing at Section 6695) of this part for taxes on property in districts.

All taxes collected pursuant to this article shall be expended only for the payment of bond principal and interest, or only for the improvement district project for which levied, except that any surplus tax proceeds levied otherwise than for payment of bond principal and interest which remain after the completion of any improvement district project for which levied shall be transferred to the bond interest and redemption fund of such improvement district, if any, otherwise to the district's general fund.

For the purpose of any tax levied under this article, the properties within any improvement district shall be deemed to be equally benefited.

Territory within a district, but not a part of an improvement district created pursuant to this article, may be annexed to such improvement district whether or not contiguous thereto.

Annexation of territory to an improvement district shall be initiated by a resolution of the district board which shall contain at least all of the following:
  (a) A description of the territory proposed to be annexed.
  (b) A statement that the area to be annexed to the improvement district will be benefited by such annexation.
  (c) The time, place, and date for a hearing by the district board on the proposed annexation, which shall not be less than 15 nor more than 60 days after the date of adoption of the resolution initiating annexation proceedings.
  (d) Any additional matters which the district board may determine are necessary or convenient to the annexation proceedings.

The resolution shall be published and notice of the hearing on the proposed annexation shall be given, in the manner required by Section 6550.3, except that in applying such section the words "improvement district" shall mean the territory proposed to be annexed.

The hearing on the proposed annexation shall be held in the manner required by Section 6550.4, except that in applying such section the words, "improvement district" shall mean the territory proposed to be annexed.

The district board shall have the power to change the boundaries of territory proposed to be annexed to an improvement district, but shall not include any territory which, in its judgment, will not be benefited by inclusion within the improvement district, nor shall it exclude any territory which it finds would be benefited by inclusion within the improvement district.

If the district board proposes to change the boundaries of the territory proposed to be annexed by adding territory thereto, it shall give notice thereof in the manner provided in Section 6550.19. Owners of land within the affected territory shall be given an opportunity to appear before the district board pursuant to Section 6550.20 and to register any protests.

At the conclusion of the hearing, the district board may, by resolution, order the annexation to the improvement district of such territory as it determines will be benefited by inclusion therein.

If all the owners of land within the territory proposed to be annexed have given their written assent to such annexation, the board may, by resolution, order such an annexation without notice and hearing by the board.

After the adoption of a resolution ordering such annexation, or a resolution confirming an order of annexation following an election thereon, the secretary shall file a certified copy thereof with a map of the territory thus annexed with the county assessor and the county tax collector of each county in which such annexed territory is situated and with the State Board of Equalization.

Territory annexed to an improvement district shall be subject to existing bond issues and indebtedness of the improvement district from and after the filing with the county assessor specified in Section 6550.25.