Bill Text: CA AB2493 | 2013-2014 | Regular Session | Enrolled
Bill Title: Redevelopment dissolution: housing projects: bond proceeds.
Spectrum: Slight Partisan Bill (Democrat 9-3)
Status: (Vetoed) 2014-09-29 - Vetoed by Governor. [AB2493 Detail]
Download: California-2013-AB2493-Enrolled.html
BILL NUMBER: AB 2493 ENROLLED
BILL TEXT
PASSED THE SENATE AUGUST 28, 2014
PASSED THE ASSEMBLY AUGUST 28, 2014
AMENDED IN SENATE AUGUST 22, 2014
AMENDED IN SENATE AUGUST 18, 2014
AMENDED IN SENATE JULY 1, 2014
AMENDED IN SENATE JUNE 10, 2014
AMENDED IN ASSEMBLY APRIL 10, 2014
AMENDED IN ASSEMBLY MARCH 28, 2014
INTRODUCED BY Assembly Member Bloom
(Coauthors: Assembly Members Achadjian, Alejo, Brown, Lowenthal,
Mullin, V. Manuel Pérez, Nestande, Skinner, and Waldron)
(Coauthors: Senators Lara and Lieu)
FEBRUARY 21, 2014
An act to amend Sections 34176 and 34191.4 of the Health and
Safety Code, relating to community redevelopment.
LEGISLATIVE COUNSEL'S DIGEST
AB 2493, Bloom. Redevelopment dissolution: housing projects: bond
proceeds.
Existing law dissolved redevelopment agencies and community
development agencies, as of February 1, 2012, and provides for the
designation of successor agencies to wind down the affairs of the
dissolved redevelopment agencies and to, among other things, make
payments due for enforceable obligations and to perform obligations
required pursuant to any enforceable obligation. Existing law
provides for the transfer of housing assets and functions previously
performed by the dissolved redevelopment agency to one of several
specified public entities. Existing law authorizes the successor
housing entity to designate the use of, and commit, proceeds from
indebtedness that was issued for affordable housing purposes prior to
January 1, 2011, and was backed by the Low and Moderate Income
Housing Fund.
This bill would instead authorize a successor housing entity to
designate the use of, and commit, proceeds from indebtedness that was
issued for affordable housing purposes prior to June 28, 2011, and
would require the proceeds from bonds issued between January 1, 2011,
and June 28, 2011, be used for projects meeting certain criteria
established in this bill for projects, to be funded by successor
agencies generally, from proceeds of bonds issued during the same
period.
Existing law authorizes the Department of Finance to issue a
finding of completion to a successor agency that completes a due
diligence review and meets other requirements. Upon receiving a
finding of completion, a successor agency is authorized to expend
excess bond proceeds derived from bonds issued on or before December
31, 2010, in a manner consistent with the original bond covenants.
The bill would expand this authorization to include the
expenditure of excess bond proceeds derived from bonds issued on or
before June 28, 2011, and would require proceeds derived from bonds
issued between January 1, 2011, and June 28, 2011, to be used by
successor agencies only for projects meeting certain criteria.
This bill would incorporate additional changes to Section 34191.4
of the Health and Safety Code proposed by AB 1582 and SB 1129 that
would become operative only if this bill and either AB 1582 or SB
1129 are enacted and this bill is enacted last.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 34176 of the Health and Safety Code is amended
to read:
34176. (a) (1) The city, county, or city and county that
authorized the creation of a redevelopment agency may elect to retain
the housing assets and functions previously performed by the
redevelopment agency. If a city, county, or city and county elects to
retain the authority to perform housing functions previously
performed by a redevelopment agency, all rights, powers, duties,
obligations, and housing assets, as defined in subdivision (e),
excluding any amounts on deposit in the Low and Moderate Income
Housing Fund and enforceable obligations retained by the successor
agency, shall be transferred to the city, county, or city and county.
(2) The housing successor shall submit to the Department of
Finance by August 1, 2012, a list of all housing assets that contains
an explanation of how the assets meet the criteria specified in
subdivision (e). The Department of Finance shall prescribe the format
for the submission of the list. The list shall include assets
transferred between February 1, 2012, and the date upon which the
list is created. The department shall have up to 30 days from the
date of receipt of the list to object to any of the assets or
transfers of assets identified on the list. If the Department of
Finance objects to assets on the list, the housing successor may
request a meet and confer process within five business days of
receiving the department objection. If the transferred asset is
deemed not to be a housing asset as defined in subdivision (e), it
shall be returned to the successor agency and the provision of
Section 34178.8 may apply. If a housing asset has been previously
pledged to pay for bonded indebtedness, the successor agency shall
maintain control of the asset in order to pay for the bond debt.
(3) For purposes of this section and Section 34176.1, "housing
successor" means the entity assuming the housing function of a former
redevelopment agency pursuant to this section.
(b) If a city, county, or city and county does not elect to retain
the responsibility for performing housing functions previously
performed by a redevelopment agency, all rights, powers, assets,
duties, and obligations associated with the housing activities of the
agency, excluding enforceable obligations retained by the successor
agency and any amounts in the Low and Moderate Income Housing Fund,
shall be transferred as follows:
(1) If there is no local housing authority in the territorial
jurisdiction of the former redevelopment agency, to the Department of
Housing and Community Development.
(2) If there is one local housing authority in the territorial
jurisdiction of the former redevelopment agency, to that local
housing authority.
(3) If there is more than one local housing authority in the
territorial jurisdiction of the former redevelopment agency, to the
local housing authority selected by the city, county, or city and
county that authorized the creation of the redevelopment agency.
(c) Commencing on the operative date of this part, the housing
successor may enforce affordability covenants and perform related
activities pursuant to applicable provisions of the Community
Redevelopment Law (Part 1 (commencing with Section 33000)),
including, but not limited to, Section 33418.
(d) Except as specifically provided in Section 34191.4, any funds
transferred to the housing successor, together with any funds
generated from housing assets, as defined in subdivision (e), shall
be maintained in a separate Low and Moderate Income Housing Asset
Fund which is hereby created in the accounts of the housing
successor.
(e) For purposes of this part, "housing asset" includes all of the
following:
(1) Any real property, interest in, or restriction on the use of
real property, whether improved or not, and any personal property
provided in residences, including furniture and appliances, all
housing-related files and loan documents, office supplies, software
licenses, and mapping programs, that were acquired for low- and
moderate-income housing purposes, either by purchase or through a
loan, in whole or in part, with any source of funds.
(2) Any funds that are encumbered by an enforceable obligation to
build or acquire low- and moderate-income housing, as defined by the
Community Redevelopment Law (Part 1 (commencing with Section 33000))
unless required in the bond covenants to be used for repayment
purposes of the bond.
(3) Any loan or grant receivable, funded from the Low and Moderate
Income Housing Fund, from homebuyers, homeowners, nonprofit or
for-profit developers, and other parties that require occupancy by
persons of low or moderate income as defined by the Community
Redevelopment Law (Part 1 (commencing with Section 33000)).
(4) Any funds derived from rents or operation of properties
acquired for low- and moderate-income housing purposes by other
parties that were financed with any source of funds, including
residual receipt payments from developers, conditional grant
repayments, cost savings and proceeds from refinancing, and principal
and interest payments from homebuyers subject to enforceable income
limits.
(5) A stream of rents or other payments from housing tenants or
operators of low- and moderate-income housing financed with any
source of funds that are used to maintain, operate, and enforce the
affordability of housing or for enforceable obligations associated
with low- and moderate-income housing.
(6) (A) Repayments of loans or deferrals owed to the Low and
Moderate Income Housing Fund pursuant to subparagraph (G) of
paragraph (1) of subdivision (d) of Section 34171, which shall be
used consistent with the affordable housing requirements in the
Community Redevelopment Law (Part 1 (commencing with Section 33000)).
(B) Loan or deferral repayments shall not be made prior to the
2013-14 fiscal year. Beginning in the 2013-14 fiscal year, the
maximum repayment amount authorized each fiscal year for repayments
made pursuant to this paragraph and subdivision (b) of Section
34191.4 combined shall be equal to one-half of the increase between
the amount distributed to taxing entities pursuant to paragraph (4)
of subdivision (a) of Section 34183 in that fiscal year and the
amount distributed to taxing entities pursuant to that paragraph in
the 2012-13 base year. Loan or deferral repayments made pursuant to
this paragraph shall take priority over amounts to be repaid pursuant
to subdivision (b) of Section 34191.4.
(f) If a development includes both low- and moderate-income
housing that meets the definition of a housing asset under
subdivision (e) and other types of property use, including, but not
limited to, commercial use, governmental use, open space, and parks,
the oversight board shall consider the overall value to the community
as well as the benefit to taxing entities of keeping the entire
development intact or dividing the title and control over the
property between the housing successor and the successor agency or
other public or private agencies. The disposition of those assets may
be accomplished by a revenue-sharing arrangement as approved by the
oversight board on behalf of the affected taxing entities.
(g) (1) (A) The housing successor may designate the use of and
commit indebtedness obligation proceeds that remain after the
satisfaction of enforceable obligations that have been approved in a
Recognized Obligation Payment Schedule and that are consistent with
the indebtedness obligation covenants. The proceeds shall be derived
from indebtedness obligations that were issued for the purposes of
affordable housing prior to June 28, 2011. Bond proceeds derived from
bonds issued between January 1, 2011, and June 28, 2011, shall only
be used for projects that meet the criteria set forth in subparagraph
(A) or (B) of paragraph (1) of subdivision (c) of Section 34191.4.
Enforceable obligations may be satisfied by the creation of reserves
for the projects that are the subject of the enforceable obligation
that are consistent with the contractual obligations for those
projects, or by expending funds to complete the projects.
(B) The housing successor shall provide notice to the successor
agency of any designations of use or commitments of funds specified
in subparagraph (A) that it wishes to make at least 20 days before
the deadline for submission of the Recognized Obligation Payment
Schedule to the oversight board. Commitments and designations shall
not be valid and binding on any party until they are included in an
approved and valid Recognized Obligation Payment Schedule. The review
of these designations and commitments by the successor agency,
oversight board, and Department of Finance shall be limited to a
determination that the designations and commitments are consistent
with bond covenants and that there are sufficient funds available.
(2) Funds shall be used and committed in a manner consistent with
the purposes of the Low and Moderate Income Housing Asset Fund.
Notwithstanding any other law, the successor agency shall retain and
expend the excess housing obligation proceeds at the discretion of
the housing successor, provided that the successor agency ensures
that the proceeds are expended in a manner consistent with the
indebtedness obligation covenants and with any requirements relating
to the tax status of those obligations. The amount expended shall not
exceed the amount of indebtedness obligation proceeds available and
such expenditure shall constitute the creation of excess housing
proceeds expenditures to be paid from the excess proceeds. Excess
housing proceeds expenditures shall be listed separately on the
Recognized Obligation Payment Schedule submitted by the successor
agency.
(h) This section shall not be construed to provide any stream of
tax increment financing.
SEC. 2. Section 34191.4 of the Health and Safety Code is amended
to read:
34191.4. The following provisions shall apply to any successor
agency that has been issued a finding of completion by the Department
of Finance:
(a) All real property and interests in real property identified in
subparagraph (C) of paragraph (5) of subdivision (c) of Section
34179.5 shall be transferred to the Community Redevelopment Property
Trust Fund of the successor agency upon approval by the Department of
Finance of the long-range property management plan submitted by the
successor agency pursuant to subdivision (b) of Section 34191.5
unless that property is subject to the requirements of any existing
enforceable obligation.
(b) (1) Notwithstanding subdivision (d) of Section 34171, upon
application by the successor agency and approval by the oversight
board, loan agreements entered into between the redevelopment agency
and the city, county, or city and county that created the
redevelopment agency shall be deemed to be enforceable obligations
provided that the oversight board makes a finding that the loan was
for legitimate redevelopment purposes.
(2) If the oversight board finds that the loan is an enforceable
obligation, the accumulated interest on the remaining principal
amount of the loan shall be recalculated from origination at the
interest rate earned by funds deposited into the Local Agency
Investment Fund. The loan shall be repaid to the city, county, or
city and county in accordance with a defined schedule over a
reasonable term of years at an interest rate not to exceed the
interest rate earned by funds deposited into the Local Agency
Investment Fund. The annual loan repayments provided for in the
recognized obligation payment schedules shall be subject to all of
the following limitations:
(A) Loan repayments shall not be made prior to the 2013-14 fiscal
year. Beginning in the 2013-14 fiscal year, the maximum repayment
amount authorized each fiscal year for repayments made pursuant to
this subdivision and paragraph (7) of subdivision (e) of Section
34176 combined shall be equal to one-half of the increase between the
amount distributed to the taxing entities pursuant to paragraph (4)
of subdivision (a) of Section 34183 in that fiscal year and the
amount distributed to taxing entities pursuant to that paragraph in
the 2012-13 base year, provided, however, that calculation of the
amount distributed to taxing entities during the 2012-13 base year
shall not include any amounts distributed to taxing entities pursuant
to the due diligence review process established in Sections 34179.5
to 34179.8, inclusive. Loan or deferral repayments made pursuant to
this subdivision shall be second in priority to amounts to be repaid
pursuant to paragraph (7) of subdivision (e) of Section 34176.
(B) Repayments received by the city, county, or city and county
that formed the redevelopment agency shall first be used to retire
any outstanding amounts borrowed and owed to the Low and Moderate
Income Housing Fund of the former redevelopment agency for purposes
of the Supplemental Educational Revenue Augmentation Fund and shall
be distributed to the Low and Moderate Income Housing Asset Fund
established by subdivision (d) of Section 34176.
(C) Twenty percent of any loan repayment shall be deducted from
the loan repayment amount and shall be transferred to the Low and
Moderate Income Housing Asset Fund, after all outstanding loans from
the Low and Moderate Income Housing Fund for purposes of the
Supplemental Educational Revenue Augmentation Fund have been paid.
(c) (1) Bond proceeds derived from bonds issued on or before June
28, 2011, shall be used for the purposes for which the bonds were
sold.
(2) Notwithstanding Section 34177.3 or any other conflicting
provision of law, bond proceeds derived from bonds issued on or
before December 31, 2010, in excess of the amounts needed to satisfy
approved enforceable obligations shall thereafter be expended in a
manner consistent with the original bond covenants. Enforceable
obligations may be satisfied by the creation of reserves for projects
that are the subject of the enforceable obligation and that are
consistent with the contractual obligations for those projects, or by
expending funds to complete the projects. An expenditure made
pursuant to this paragraph shall constitute the creation of excess
bond proceeds obligations to be paid from the excess proceeds. Excess
bond proceeds obligations shall be listed separately on the
Recognized Obligation Payment Schedule submitted by the successor
agency.
(3) (A) Bond proceeds derived from bonds issued between January 1,
2011, and June 28, 2011, shall only be used for projects which meet
the following criteria, as determined by a resolution issued by the
oversight board:
(i) The project shall be consistent with the applicable regional
sustainable communities strategy or alternative planning strategy
adopted pursuant to Section 65080 of the Government Code that the
State Air Resources Board has determined would, if implemented,
achieve the greenhouse gas emission reduction targets established by
the board or, if a sustainable communities strategy is not required
for a region by law, a regional transportation plan that includes
programs and policies to reduce greenhouse gas emissions.
(ii) Two or more significant planning or implementation actions
shall have occurred on or before December 31, 2010. The term
"significant planning and implementation actions" means any of the
following:
(I) An action approved by the governing body of the city, county,
city and county, the board of the former redevelopment agency, or the
planning commission directly related to the planning or
implementation of the project.
(II) The project is included within an approved city, county, city
and county, or redevelopment agency planning document, including,
but not limited to, a redevelopment agency five-year implementation
plan, capital improvement plan, master plan, or other planning
document.
(III) The expenditure by the city, county, city and county, or
project sponsor, of more than twenty-five thousand dollars ($25,000)
on planning-related activities for the project within one fiscal
year, or fifty thousand dollars ($50,000) in total, over multiple
fiscal years.
(iii) Documentation dated on or before December 31, 2010, shall be
provided indicating the intention to finance all or a portion of the
project with the future issuance of long-term debt, or documentation
showing that the issuance of long-term redevelopment agency debt was
being planned on or before December 31, 2010.
(iv) Each construction contract over one hundred thousand dollars
($100,000) shall include a provision that prevailing wage will be
paid by the contractor and all of that contractor's subcontractors.
(v) For each construction contract over two hundred fifty thousand
dollars ($250,000), the successor agency shall require prospective
contractors to submit a standardized questionnaire and financial
statements as part of their bid package, to establish the contractor'
s financial ability and experience in performing large construction
projects.
(B) Any city, county, or city and county that funded an eligible
project, meeting the criteria listed in clauses (i) to (iii),
inclusive, of subparagraph (A) with funds other than redevelopment
funds, between June 28, 2011, and the effective date of the act
adding this paragraph, shall be eligible to be reimbursed utilizing
2011 bond proceeds, if the project meets the purpose for which the
bonds were issued.
(C) Any successor agency requesting the use of bond proceeds
derived from bonds issued between January 1, 2011, and June 28, 2011,
in accordance with subparagraphs (A) and (B), shall place that
request on its Recognized Obligation Payment Schedule. The successor
agency shall place each project on a separate Recognized Obligation
Payment Schedule line item. The successor agency shall detail in the
resolution adopting the Recognized Obligation Payment Schedule how
each project will meet the requirement in subparagraphs (A) and (B),
and all documentation showing how the project meets those criteria
shall be attached to the resolution. The resolution adopting the
Recognized Obligation Payment Schedule, including the supporting
documentation, shall be forwarded to the Department of Finance for
review and approval or denial. Pursuant to subdivision (h) of Section
34179, the Department of Finance may review and deny any action by
the oversight board.
(4) If remaining bond proceeds derived from bonds issued on or
before December 31, 2010, cannot be spent in a manner consistent with
the bond covenants pursuant to paragraph (2), or if bond proceeds
derived from bonds issued between January 1, 2011, and June 28, 2011,
cannot be used for projects that met the requirements in
subparagraphs (A) and (B) of paragraph (3), the proceeds shall be
used to defease all or a portion of the bonds or to purchase all or a
portion of those same outstanding bonds on the open market for
cancellation. If only a portion of the bonds proceeds will be used,
the successor agency shall defease or purchase bonds for cancellation
in a manner that maximizes fiscal savings.
SEC. 2.3. Section 34191.4 of the Health and Safety Code is amended
to read:
34191.4. The following provisions shall apply to any successor
agency that has been issued a finding of completion by the Department
of Finance:
(a) All real property and interests in real property identified in
subparagraph (C) of paragraph (5) of subdivision (c) of Section
34179.5 shall be transferred to the Community Redevelopment Property
Trust Fund of the successor agency upon approval by the Department of
Finance of the long-range property management plan submitted by the
successor agency pursuant to subdivision (b) of Section 34191.5
unless that property is subject to the requirements of any existing
enforceable obligation.
(b) (1) Notwithstanding subdivision (d) of Section 34171, upon
application by the successor agency and approval by the oversight
board, loan agreements, contracts, or arrangements entered into
between the redevelopment agency and the city, county, or city and
county that created the redevelopment agency shall be deemed to be
existing enforceable obligations provided that the oversight board
makes a finding that the loan was for legitimate redevelopment
purposes.
(2) If the oversight board finds that the loan agreement,
contract, or arrangement entered into between the redevelopment
agency and the city, county, or city and county that created the
redevelopment agency is an existing enforceable obligation, the
accumulated interest on the remaining principal amount of the loan
shall be recalculated from the loan origination at the historic
interest rate earned by funds deposited into the Local Agency
Investment Fund at the time of the loan origination and adjusted
quarterly over time. For purposes of this paragraph, the term
"remaining principal amount" means the amount of principal calculated
from the loan origination date and any increase thereto that remains
unpaid as of the date of oversight board approval. After the
interest on the remaining principal amount has been calculated, the
loan shall be repaid to the city, county, or city and county in
accordance with a defined schedule over a reasonable term of years at
an interest rate not to exceed the quarterly adjusted interest rate
earned by funds deposited into the Local Agency Investment Fund. The
annual loan repayments provided for in the recognized obligation
payment schedules shall be subject to all of the following
limitations:
(A) Loan repayments shall not be made prior to the 2013-14 fiscal
year. Beginning in the 2013-14 fiscal year, the maximum repayment
amount authorized each fiscal year for repayments made pursuant to
this subdivision and paragraph (7) of subdivision (e) of Section
34176 combined shall be equal to one-half of the increase between the
amount distributed to the taxing entities pursuant to paragraph (4)
of subdivision (a) of Section 34183 in that fiscal year and the
amount distributed to taxing entities pursuant to that paragraph in
the 2012-13 base year, provided, however, that calculation of the
amount distributed to taxing entities during the 2012-13 base year
shall not include any amounts distributed to taxing entities pursuant
to the due diligence review process established in Sections 34179.5
to 34179.8, inclusive. Loan or deferral repayments made pursuant to
this subdivision shall be second in priority to amounts to be repaid
pursuant to paragraph (7) of subdivision (e) of Section 34176.
(B) Repayments received by the city, county, or city and county
that formed the redevelopment agency shall first be used to retire
any outstanding amounts borrowed and owed to the Low and Moderate
Income Housing Fund of the former redevelopment agency for purposes
of the Supplemental Educational Revenue Augmentation Fund and shall
be distributed to the Low and Moderate Income Housing Asset Fund
established by subdivision (d) of Section 34176.
(C) Twenty percent of any loan repayment shall be deducted from
the loan repayment amount and shall be transferred to the Low and
Moderate Income Housing Asset Fund, after all outstanding loans from
the Low and Moderate Income Housing Fund for purposes of the
Supplemental Educational Revenue Augmentation Fund have been paid.
(c) (1) Bond proceeds derived from bonds issued on or before June
28, 2011, shall be used for the purposes for which the bonds were
sold.
(2) Notwithstanding Section 34177.3 or any other conflicting
provision of law, bond proceeds derived from bonds issued on or
before December 31, 2010, in excess of the amounts needed to satisfy
approved enforceable obligations shall thereafter be expended in a
manner consistent with the original bond covenants. Enforceable
obligations may be satisfied by the creation of reserves for projects
that are the subject of the enforceable obligation and that are
consistent with the contractual obligations for those projects, or by
expending funds to complete the projects. An expenditure made
pursuant to this paragraph shall constitute the creation of excess
bond proceeds obligations to be paid from the excess proceeds. Excess
bond proceeds obligations shall be listed separately on the
Recognized Obligation Payment Schedule submitted by the successor
agency.
(3) (A) Bond proceeds derived from bonds issued between January 1,
2011, and June 28, 2011, shall only be used for projects which meet
the following criteria, as determined by a resolution issued by the
oversight board:
(i) The project shall be consistent with the applicable regional
sustainable communities strategy or alternative planning strategy
adopted pursuant to Section 65080 of the Government Code that the
State Air Resources Board has determined would, if implemented,
achieve the greenhouse gas emission reduction targets established by
the board or, if a sustainable communities strategy is not required
for a region by law, a regional transportation plan that includes
programs and policies to reduce greenhouse gas emissions.
(ii) Two or more significant planning or implementation actions
shall have occurred on or before December 31, 2010. The term
"significant planning and implementation actions" means any of the
following:
(I) An action approved by the governing body of the city, county,
city and county, the board of the former redevelopment agency, or the
planning commission directly related to the planning or
implementation of the project.
(II) The project is included within an approved city, county, city
and county, or redevelopment agency planning document, including,
but not limited to, a redevelopment agency five-year implementation
plan, capital improvement plan, master plan, or other planning
document.
(III) The expenditure by the city, county, city and county, or
project sponsor, of more than twenty-five thousand dollars ($25,000)
on planning-related activities for the project within one fiscal
year, or fifty thousand dollars ($50,000) in total, over multiple
fiscal years.
(iii) Documentation dated on or before December 31, 2010, shall be
provided indicating the intention to finance all or a portion of the
project with the future issuance of long-term debt, or documentation
showing that the issuance of long-term redevelopment agency debt was
being planned on or before December 31, 2010.
(iv) Each construction contract over one hundred thousand dollars
($100,000) shall include a provision that prevailing wage will be
paid by the contractor and all of that contractor's subcontractors.
(v) For each construction contract over two hundred fifty thousand
dollars ($250,000), the successor agency shall require prospective
contractors to submit a standardized questionnaire and financial
statements as part of
their bid package, to establish the contractor's financial ability
and experience in performing large construction projects.
(B) Any city, county, or city and county that funded an eligible
project, meeting the criteria listed in clauses (i) to (iii),
inclusive, of subparagraph (A) with funds other than redevelopment
funds, between June 28, 2011, and the effective date of the act
adding this paragraph, shall be eligible to be reimbursed utilizing
2011 bond proceeds, if the project meets the purpose for which the
bonds were issued.
(C) Any successor agency requesting the use of bond proceeds
derived from bonds issued between January 1, 2011, and June 28, 2011,
in accordance with subparagraphs (A) and (B), shall place that
request on its Recognized Obligation Payment Schedule. The successor
agency shall place each project on a separate Recognized Obligation
Payment Schedule line item. The successor agency shall detail in the
resolution adopting the Recognized Obligation Payment Schedule how
each project will meet the requirement in subparagraphs (A) and (B),
and all documentation showing how the project meets those criteria
shall be attached to the resolution. The resolution adopting the
Recognized Obligation Payment Schedule, including the supporting
documentation, shall be forwarded to the Department of Finance for
review and approval or denial. Pursuant to subdivision (h) of Section
34179, the Department of Finance may review and deny any action by
the oversight board.
(4) If remaining bond proceeds derived from bonds issued on or
before December 31, 2010, cannot be spent in a manner consistent
with the bond covenants pursuant to paragraph (2), or if bond
proceeds derived from bonds issued between January 1, 2011, and June
28, 2011, cannot be used for projects that met the requirements in
subparagraphs (A) and (B) of paragraph (3), the proceeds shall be
used to defease all or a portion of the bonds or to purchase all or a
portion of those same outstanding bonds on the open market for
cancellation. If only a portion of the bonds proceeds will be used,
the successor agency shall defease or purchase bonds for cancellation
in a manner that maximizes fiscal savings.
SEC. 2.5. Section 34191.4 of the Health and Safety Code is amended
to read:
34191.4. The following provisions shall apply to any successor
agency that has been issued a finding of completion by the Department
of Finance:
(a) All real property and interests in real property identified in
subparagraph (C) of paragraph (5) of subdivision (c) of Section
34179.5 shall be transferred to the Community Redevelopment Property
Trust Fund of the successor agency upon approval by the Department of
Finance of the long-range property management plan submitted by the
successor agency pursuant to subdivision (b) of Section 34191.5
unless that property is subject to the requirements of any existing
enforceable obligation.
(b) (1) Notwithstanding subdivision (d) of Section 34171, upon
application by the successor agency and approval by the oversight
board, loans made to a redevelopment agency by the city, county, or
city and county that created the redevelopment agency shall be deemed
to be enforceable obligations provided that the oversight board
makes a finding that the loans were for legitimate redevelopment
purposes.
(2) If the oversight board finds that a loan is an enforceable
obligation, the accumulated interest on the remaining principal
balance of the loan shall be recalculated from origination using the
interest rate earned by funds deposited into the Local Agency
Investment Fund in effect on the date of loan origination, and as
adjusted quarterly thereafter. The remaining principal balance of the
loan and the accumulated interest shall be repaid to the city,
county, or city and county in accordance with a defined schedule over
a reasonable term of years at an interest rate not to exceed the
interest rate earned by funds deposited into the Local Agency
Investment Fund as the rate is adjusted on a quarterly basis. The
annual loan repayments provided for in the recognized obligation
payment schedules shall be subject to all of the following
limitations:
(A) Loan repayments shall not be made prior to the 2013-14 fiscal
year. Beginning in the 2013-14 fiscal year, the maximum repayment
amount authorized each fiscal year for repayments made pursuant to
this subdivision and paragraph (7) of subdivision (e) of Section
34176 combined shall be equal to one-half of the increase between the
amount distributed to the taxing entities pursuant to paragraph (4)
of subdivision (a) of Section 34183 in that fiscal year and the
amount distributed to taxing entities pursuant to that paragraph in
the 2012-13 base year, provided, however, that calculation of the
amount distributed to taxing entities during the 2012-13 base year
shall not include any amounts distributed to taxing entities pursuant
to the due diligence review process established in Sections 34179.5
to 34179.8, inclusive. Loan or deferral repayments made pursuant to
this subdivision shall be second in priority to amounts to be repaid
pursuant to paragraph (7) of subdivision (e) of Section 34176.
(B) Repayments received by the city, county, or city and county
that formed the redevelopment agency shall first be used to retire
any outstanding amounts borrowed and owed to the Low and Moderate
Income Housing Fund of the former redevelopment agency for purposes
of the Supplemental Educational Revenue Augmentation Fund and shall
be distributed to the Low and Moderate Income Housing Asset Fund
established by subdivision (d) of Section 34176.
(C) Twenty percent of any loan repayment shall be deducted from
the loan repayment amount and shall be transferred to the Low and
Moderate Income Housing Asset Fund, after all outstanding loans from
the Low and Moderate Income Housing Fund for purposes of the
Supplemental Educational Revenue Augmentation Fund have been paid.
(3) It is the intent of the Legislature that the amendments to
this subdivision made by the act adding this paragraph be clarifying.
(c) (1) Bond proceeds derived from bonds issued on or before June
28, 2011, shall be used for the purposes for which the bonds were
sold.
(2) Notwithstanding Section 34177.3 or any other conflicting
provision of law, bond proceeds derived from bonds issued on or
before December 31, 2010, in excess of the amounts needed to satisfy
approved enforceable obligations shall thereafter be expended in a
manner consistent with the original bond covenants. Enforceable
obligations may be satisfied by the creation of reserves for projects
that are the subject of the enforceable obligation and that are
consistent with the contractual obligations for those projects, or by
expending funds to complete the projects. An expenditure made
pursuant to this paragraph shall constitute the creation of excess
bond proceeds obligations to be paid from the excess proceeds. Excess
bond proceeds obligations shall be listed separately on the
Recognized Obligation Payment Schedule submitted by the successor
agency.
(3) (A) Bond proceeds derived from bonds issued between January 1,
2011, and June 28, 2011, shall only be used for projects which meet
the following criteria, as determined by a resolution issued by the
oversight board:
(i) The project shall be consistent with the applicable regional
sustainable communities strategy or alternative planning strategy
adopted pursuant to Section 65080 of the Government Code that the
State Air Resources Board has determined would, if implemented,
achieve the greenhouse gas emission reduction targets established by
the board or, if a sustainable communities strategy is not required
for a region by law, a regional transportation plan that includes
programs and policies to reduce greenhouse gas emissions.
(ii) Two or more significant planning or implementation actions
shall have occurred on or before December 31, 2010. The term
"significant planning and implementation actions" means any of the
following:
(I) An action approved by the governing body of the city, county,
city and county, the board of the former redevelopment agency, or the
planning commission directly related to the planning or
implementation of the project.
(II) The project is included within an approved city, county, city
and county, or redevelopment agency planning document, including,
but not limited to, a redevelopment agency five-year implementation
plan, capital improvement plan, master plan, or other planning
document.
(III) The expenditure by the city, county, city and county, or
project sponsor, of more than twenty-five thousand dollars ($25,000)
on planning related activities for the project within one fiscal
year, or fifty thousand dollars ($50,000) in total, over multiple
fiscal years.
(iii) Documentation dated on or before December 31, 2010, shall be
provided indicating the intention to finance all or a portion of the
project with the future issuance of long-term debt, or documentation
showing that the issuance of long-term redevelopment agency debt was
being planned on or before December 31, 2010.
(iv) Each construction contract over one hundred thousand dollars
($100,000) shall include a provision that prevailing wage will be
paid by the contractor and all of that contractor's subcontractors.
(v) For each construction contract over two hundred fifty thousand
dollars ($250,000), the successor agency shall require prospective
contractors to submit a standardized questionnaire and financial
statements as part of their bid package, to establish the contractor'
s financial ability and experience in performing large construction
projects.
(B) Any city, county, or city and county that funded an eligible
project, meeting the criteria listed in clauses (i) to (iii),
inclusive, of subparagraph (A) with funds other than redevelopment
funds, between June 28, 2011, and the effective date of the act
adding this paragraph, shall be eligible to be reimbursed utilizing
2011 bond proceeds, if the project meets the purpose for which the
bonds were issued.
(C) Any successor agency requesting the use of bond proceeds
derived from bonds issued between January 1, 2011, and June 28, 2011,
in accordance with subparagraphs (A) and (B), shall place that
request on its Recognized Obligation Payment Schedule. The successor
agency shall place each project on a separate Recognized Obligation
Payment Schedule line item. The successor agency shall detail in the
resolution adopting the Recognized Obligation Payment Schedule how
each project will meet the requirement in subparagraphs (A) and (B),
and all documentation showing how the project meets those criteria
shall be attached to the resolution. The resolution adopting the
Recognized Obligation Payment Schedule, including the supporting
documentation, shall be forwarded to the Department of Finance for
review and approval or denial. Pursuant to subdivision (h) of Section
34179, the Department of Finance may review and deny any action by
the oversight board.
(4) If remaining bond proceeds derived from bonds issued on or
before December 31, 2010, cannot be spent in a manner consistent with
the bond covenants pursuant to paragraph (2), or if bond proceeds
derived from bonds issued between January 1, 2011, and June 28, 2011,
cannot be used for projects that met the requirements in
subparagraphs (A) and (B) of paragraph (3), the proceeds shall be
used to defease all or a portion of the bonds or to purchase all or a
portion of those same outstanding bonds on the open market for
cancellation. If only a portion of the bonds proceeds will be used,
the successor agency shall defease or purchase bonds for cancellation
in a manner that maximizes fiscal savings.
(d) Notwithstanding subdivision (b) of Section 34163, if a
successor agency has received a finding of completion, the successor
agency may enter into, or amend existing, contracts and agreements,
or otherwise administer projects in connection with enforceable
obligations approved pursuant to subdivision (m) of Section 34177,
including the substitution of private developer capital in a
disposition and development agreement that has been deemed an
enforceable obligation, if the contract, agreement, or project will
not commit new property tax funds, and will not otherwise reduce
property tax revenues or payments made pursuant to paragraph (4) of
subdivision (a) of Section 34183 to the taxing agencies.
SEC. 3. (a) Section 2 of this bill shall become operative only if
(1) this bill is enacted and becomes effective on or before January
1, 2015, (2) this bill amends Section 34191.4 of the Health and
Safety Code, and (3) both Assembly Bill 1582 and Senate Bill 1129 are
not enacted, or as enacted do not amend that section, in which case
neither Section 2.3 nor 2.5 of this bill shall become operative.
(b) Section 2.3 of this bill incorporates amendments to Section
34191.4 of the Health and Safety Code proposed by both this bill and
Assembly Bill 1582. It shall only become operative if (1) both bills
are enacted and become effective on or before January 1, 2015, (2)
each bill amends Section 34191.4 of the Health and Safety Code, (3)
Senate Bill 1129 is not enacted or as enacted does not amend that
section, and (4) this bill is enacted after Assembly Bill 1582, in
which case neither Section 2 nor Section 2.5 of this bill shall
become operative.
(c) Section 2.5 of this bill incorporates amendments to Section
34191.4 of the Health and Safety Code proposed by both this bill and
Senate Bill 1129. It shall only become operative if (1) both bills
are enacted and become effective on or before January 1, 2015, (2)
each bill amends Section 34191.4 of the Health and Safety Code, and
(3) this bill is enacted after Senate Bill 1129, in which case
neither Section 2 nor Section 2.3 of this bill shall become
operative.
