District Dissolution - - CA Public Resources

Section § 26567.1

This law explains the process for dissolving a district in California. A district can be dissolved if the legislative body decides so through a resolution, provided they have sufficient evidence supporting one or more specific findings, such as the district not using its powers, lacking significant assets, or failing to comply with original formation conditions. The dissolution must also be approved by property owners holding more than 50% of the district's property value. Before finalizing, a public hearing is required, with notices sent to homeowners with details and allowing for written objections.

(a) The legislative body may, by resolution, order the dissolution of a district formed under this division. Any resolution ordering a dissolution is valid only if the legislative body, based on substantial evidence on the record, makes one or more of the following findings:

(1) The corporate powers have not been used, there is a reasonable probability that those powers will not be used in the future, and the district holds no significant liquid assets.

(2) The board of directors, by resolution passed by unanimous vote of the directors, or by a vote of the owners of more than 50 percent of the assessed valuation of the real property in the district, approved the dissolution of the district.

(3) The district has not levied or collected any assessments and holds no significant liquid assets.

(4) The district has not substantially complied with a material condition of the resolution of formation adopted by the legislative body.

(b) If the board of directors is comprised of members of the legislative body, the decision of the board to dissolve a district shall be approved by the owners of more than 50 percent of the assessed valuation of the real property in the district within 90 days after a valid resolution ordering dissolution.

(c) A legislative body or a board of directors shall adopt a resolution setting a public hearing on the proposed dissolution and directing that notice shall be sent to the last known address of each homeowner within the district. The notice shall include the date, time, and place of the hearing and include a copy of the proposed resolution ordering dissolution. The notice shall be mailed first-class, postage prepaid, in the United States mail and be postmarked no later than 30 days prior to the date of the hearing. The notice shall also set forth the address where written objections to the dissolution of the district may be mailed or otherwise delivered up to and including the time of the hearing.

district dissolution legislative body resolution substantial evidence corporate powers unused board of directors vote property owner approval public hearing notice mailing notice requirements real property valuation unanimous board vote compliance with formation conditions assessment collection liquid assets hearing objections notice timing

(Added by Stats. 1998, Ch. 806, Sec. 1. Effective January 1, 1999.)

Section § 26567.2

This law section allows a legislative body to bypass some usual steps when dissolving a district. Specifically, they don't need to create certain plans or resolutions. Once the district is dissolved, the legislative body must take over all of the district's remaining duties and obligations.

In dissolution proceedings, the legislative body may dispense with the resolution and plan of control required by Sections 26553, 26558, and 26562. After the dissolution of the district, the legislative body shall assume all remaining responsibilities and obligations of the district.

dissolution proceedings bypass resolution plan of control legislative body responsibilities district obligations assume responsibilities district dissolution legislative body duties remaining obligations dispense with resolution Section 26553 Section 26558 Section 26562 district dissolution process takeover responsibilities

(Added by Stats. 1998, Ch. 806, Sec. 1. Effective January 1, 1999.)

Section § 26567.3

After a district is dissolved, the board of directors has 90 days to return any liquid assets to those who contributed, based on their contribution amounts. They must also decide how to handle any remaining physical improvements and assets. If anyone within the district has a different idea for distributing these assets, they can propose a plan. This alternative plan can be adopted if more than half of the property owners, based on property value, agree to it.

Within 90 days after a dissolution, the board of directors shall return any liquid assets of the district to the landowners and local agencies in the same proportion that they have contributed to the revenue of the district, and shall provide by resolution for the distribution for ownership of any capital improvements and assets of the district. Within 90 days of a valid resolution ordering dissolution, any property owner within the district may offer an alternative plan for the distribution for ownership of any capital improvements and real assets of the district which shall be adopted if approved by the owners of more than 50 percent of the assessed valuation of the real property in the district.

district dissolution return of liquid assets board of directors landowners local agencies capital improvements assets distribution alternative plan property owners assessed valuation real property resolution for dissolution contribution proportion real assets ownership distribution plan approval

(Added by Stats. 1998, Ch. 806, Sec. 1. Effective January 1, 1999.)