SB 1766

Present law provides independent authority for the establishment and governance of an infrastructure development district. This bill clarifies that such independent authority does not affect the operation of other parts of the law that provide a separate independent authority for the establishment and governance of a central business improvement or infrastructure development district. PUBLIC HEARINGS Present law allows governing bodies of host municipalities to hold a joint public hearing upon receiving the filing of a petition initiating the creation of an infrastructure development district. This bill clarifies that the municipalities may hold sep arate public hearings when a governing body makes approval contingent on the approval of another governing body. ESTABLISHMENT RESOLUTION Present law provides the requirements for what must be contained with an establishment resolution adopted by the governing body of the municipalities. This bill eliminates the requirement that the establishing resolution contain the maximum rate of levy of the special assessment that may be imposed. Present law authorizes host municipalities who have adopted an establishment resolution for an infrastructure development district to levy special assessments against all properties located within that portion of the infrastructure development district l ying within the boundaries of such host municipality. This bill allows an establishment resolution to provide that a portion of special assessments be set aside for the actual cost of administrative expenses, including expenses incurred by the host munic ip ality and the officers of the municipality in administering the collection and allocation of special assessments. MAXIMUM TERMS OF BONDS, NOTES, OR OTHER DEBT OBLIGATIONS Present law allows a host municipality of an infrastructure development district to borrow money and issue bonds, notes, or other obligations for the purpose of paying infrastructure costs identified in the establishment resolution, reimbursing the devel oper for the prior payment of infrastructure costs, or refunding or refinancing such bonds, notes, or obligations. This bill clarifies that the maximum term of any bonds, notes, or other debt obligations must not exceed 30 years from the first issuance. F or projects with multiple phases of development, bonds may be issued for each phase of development and each phase must not exceed 30 years from date of issuance of the bonds for that phase. DISTRICT DISSOLUTION Present law requires that infrastructure districts be dissolved by the governing bodies of the host municipality no later than 20 years from the date the district is established. This bill, instead, requires that districts be dissolved no later than 30 years from the date that the last assessment is first levied. ON MARCH 16, 2026, THE SENATE ADOPTED AMENDMENT #1 AND PASSED SENATE BILL 1766, AS AMENDED. AMENDMENT #1 clarifies that infrastructure districts must be dissolved by the governing bodies of the host municipality no later than 30 years from the date that the last assessment is first levied, or immediately upon one of the following occurrences:  Written petition filed by the owners of either 75% of the assessed value of the property in the district, based on the most recent certified city property tax rolls, or 50% of the owners of record within the district; provided, that dissolution must not occur prior to the payment in full and discharge of debt obligations secured by special assessment revenues of the district.  The payment and discharge of all outstanding bonds, notes, or other obligations payable solely from the special assessment revenues levied on the property within the district. DEFINITION OF HOST MUNICIPALITY Present law authorizes the governing body of a host municipality to create one or more infrastructure development districts located in whole or in part within the boundaries of such municipality. Host municipalities have the authority to (i) borrow mon ey and issue bonds, notes, or other obligations; (ii) pledge to the payment of the principal, premium, and interest on the bonds, notes, or other obligations; (iii) delegate to an industrial development corporation incorporated by the host municipality or a nother host municipality for the district authority to issue revenue bonds; and (iv) delegate to a public building authority the authority to issue revenue bonds. Present law defines a "host municipality"" to mean the following:  For a district the boundaries of which are not located entirely within a single incorporated town or city that (i) levies and directly administers the billing of ad valorem real property taxes, each county within which the boundaries of the district are located; or (ii) has authorized and entered into contracts, agreements, or other arrangements directing the billing, collection, and enforcement of the payment of special assessments levied by an incorporated town or city and in the same manner in which such city or town is authorized to bill, collect, and enforce the payment of ad valorem property taxes under the applicable provisions of present law and any municipal charter, each county within which the boundaries of the district are located.  For districts the boundaries of which are located entirely within a single incorporated town or city that (i) levies and directly administers the billing of ad valorem real property taxes, such town or city ; and (ii) has authorized and entered into contracts, agreements, or other arrangements directing the billing, collection, and enforcement of the payment of special assessments levied by such town or city and in the same manner in which such city or town is authorized to bill, collect, and enforce the payment of ad valorem property taxes under the applicable provisions of present law and any municipal charter, such town or city . This amendment revises such definition to, instead, define a ""host municipality"" to mean the following:  For a district the boundaries of which are not located entirely within a single incorporated town or city that (i) levies and directly administers the billing of ad valorem real property taxes, each county within which the boundaries of the district are located; or (ii) levies, and has authorized and entered into contracts, agreements, or other arrangements directing the administration of, ad valorem real property taxes under the applicable provisions of present law and any municipal charter, each county within which the boundaries of the district are located .  For districts the boundaries of which are located entirely within a single incorporated town or city that (i) levies and directly administers the billing of ad valorem real property taxes, such town or city ; or (ii) levies, and has authorized and entered into contracts, agreements, or other arrangements directing the administration of, ad valorem real property taxes under the applicable provisions of present law and any municipal charter, such town or city . ADMINISTRATION OF INFRASTRUCTURE DEVELOPMENT DISTRICTS Present law authorizes a host municipality to levy special assessments against all properties located within an infrastructure development district lying within the boundaries of such host municipality. Host municipalities may adopt appropriate policies and procedures to administer districts, including c ontracting with outside professional administrators. This amendment requires a host municipality to enter into a written contract with an outside professional administrator it chooses to delegate administration to. Such a contract must require all costs a ssociated with administration to be paid from special assessment revenues from within the district. As used in this amendment, ""administration"" includes (i) the collection, remittance, and enforcement of assessments; (ii) any applicable continuing disclo sure requirements; (iii) any duties related to title transfer of public infrastructure; and (iv) any other district-related duties deemed necessary. This amendment also authorizes a host municipality to manage the administration, in whole or in part, of a district or to delegate the administration, in whole or in part, of a district to the municipality currently administering the host municipality's ad valorem real property taxes. However, prior to delegating district administration to a municipality, an interlocal agreement between the host municipality and the municipality must be approved by the governing bodies of both the host municipality and th e municipality. A county trustee is not required to participate in district administration without an agreement between the county trustee and a host municipality regarding the administration of the district. LIENS AND COLLECTION OF SPECIAL ASSESSMENTS Present law provides that an assessment, any interest accruing on an assessment, and the costs of collection of an assessment constitute a lien on and against the property upon which the assessment is levied that is superior to a lien of any trust deed, mortgage, mechanic's or material supplier's lien, or other encumbrance, except a lien of the state, county, or municipality for taxes. However, amounts collected by the host municipality must not be allocated to the payment of a special assessment by an owner in the district until all taxes, penalties, and interest relating to real property taxes impo se d by any governmental entity have been paid in full. The host municipality may allocate any payment received by an owner that is designated to pay special assessments to the payment of outstanding taxes, penalties, and interest until such an amount is pa id in full. This amendment clarifies that a municipality that has been delegated administration responsibilities must follow the same guidelines regarding amounts collected for the payment of a special assessment when there are outstanding taxes assessed a gainst the property by a governmental entity. DELINQUENT ASSESSMENTS Present law provides that, if an assessment is or becomes delinquent and the property subject to the delinquency has been or is to be sold to the host municipality for the delinquency, redemption of such property is permitted upon payment not later than one year after the date of the sale, of the full amount due, plus interest, any taxes paid by the host municipality, and accrued costs and redemption fees as may be prescribed by resolution of the host municipality. This amendment, instead, requires that, for any assessment that is or becomes delinquent, delinquency proceedings to be carried out in the same manner as delinquency proceedings for ad valorem real property taxes."