Bill Text: CA AB1582 | 2013-2014 | Regular Session | Amended
Bill Title: Redevelopment: successor agencies: postcompliance provisions: loans.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Engrossed - Dead) 2014-08-25 - Read second time. Ordered to third reading. Re-referred to Com. on RLS. pursuant to Senate Rule 29.10(c). [AB1582 Detail]
Download: California-2013-AB1582-Amended.html
BILL NUMBER: AB 1582 AMENDED
BILL TEXT
AMENDED IN SENATE AUGUST 22, 2014
AMENDED IN SENATE JUNE 17, 2014
AMENDED IN SENATE JUNE 2, 2014
AMENDED IN ASSEMBLY APRIL 22, 2014
AMENDED IN ASSEMBLY APRIL 3, 2014
INTRODUCED BY Assembly Member Mullin
FEBRUARY 3, 2014
An act to amend, repeal, and add Section 34177
amend Section 34191.4 of the Health and Safety Code,
relating to redevelopment.
LEGISLATIVE COUNSEL'S DIGEST
AB 1582, as amended, Mullin. Redevelopment: successor agencies:
Recognized Obligation Payment Schedule.
postcompliance provisions: loans.
The Community Redevelopment Law authorized the establishment of
redevelopment agencies in communities to address the effects of
blight, as defined. Existing law dissolved redevelopment agencies as
of February 1, 2012, and provides for the designation of successor
agencies, as defined. Existing law requires successor agencies to
wind down the affairs of the dissolved redevelopment agencies.
Existing law requires a successor agency to, among other things,
prepare a Recognized Obligation Payment Schedule for payments on
enforceable obligations for each 6-month fiscal period.
This bill would, commencing January 1, 2016, revise the timeline
for the preparation of the required Recognized Obligation Payment
Schedule to provide that the successor agency prepare a schedule for
a 12-month fiscal period, with the first of these periods beginning
July 1, 2016, and would authorize the Recognized Obligation Payment
Schedule to be amended by the oversight board during a 12-month
fiscal period if the amendment is approved at least 90 days before
the date of the next property tax distribution.
Under existing law, the Department of Finance is authorized to
issue a finding of completion to a successor agency that completes
specified requirements. Upon receiving a finding of completion, the
successor agency is authorized to participate in a loan repayment
program and limited property management activities. Under existing
law, after the successor agency receives a finding of completion,
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 are deemed to be enforceable
obligations, provided that the oversight board makes a finding that
the loan was for legitimate redevelopment purposes.
This bill would require the interest rate on 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 of the loan as an enforceable obligation, to be subject to
an adjusted interest rate, as prescribed.
This bill would incorporate additional changes to Section 34191.4
of the Health and Safety Code proposed by AB 2493 and SB 1129 that
would become operative if this bill and either AB 2493 and SB 1129,
or both, are enacted and this bill is enacted last.
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 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. The
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
December 31, 2010, shall be used for the purposes for which the bonds
were sold.
(2) (A) Notwithstanding Section 34177.3 or any other conflicting
provision of law, bond proceeds 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.
(B) If remaining bond proceeds cannot be spent in a manner
consistent with the bond covenants pursuant to subparagraph (A), the
proceeds shall be used to defease the bonds or to purchase those same
outstanding bonds on the open market for cancellation.
SEC. 1.5. 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, 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. The
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
qu arterly 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
December 31, 2010, June 28, 2011, shall
be used for the purposes for which the bonds were sold.
(2) (A) 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 requirements 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.
(B)
(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
subparagraph (A), 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. (a) Section 1 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
2493 and Senate Bill 1129 are not enacted, or as enacted do not amend
that section, in which case Section 1.5 of this bill shall not
become operative.
(b) Section 1.5 of this bill incorporates amendments to Section
34191.4 of the Health and Safety Code proposed by both this bill and
Assembly Bill 2493. 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) Senate Bill 1129 is not enacted or as enacted does not amend that
section, and (4) this bill is enacted after Assembly Bill 2493, in
which case Section 1 of this bill shall not become operative.
SECTION 1. Section 34177 of the Health and
Safety Code is amended to read:
34177. Successor agencies are required to do all of the
following:
(a) Continue to make payments due for enforceable obligations.
(1) On and after February 1, 2012, and until a Recognized
Obligation Payment Schedule becomes operative, only payments required
pursuant to an enforceable obligations payment schedule shall be
made. The initial enforceable obligation payment schedule shall be
the last schedule adopted by the redevelopment agency under Section
34169. However, payments associated with obligations excluded from
the definition of enforceable obligations by paragraph (2) of
subdivision (d) of Section 34171 shall be excluded from the
enforceable obligations payment schedule and be removed from the last
schedule adopted by the redevelopment agency under Section 34169
prior to the successor agency adopting it as its enforceable
obligations payment schedule pursuant to this subdivision. The
enforceable obligation payment schedule may be amended by the
successor agency at any public meeting and shall be subject to the
approval of the oversight board as soon as the board has sufficient
members to form a quorum. In recognition of the fact that the timing
of the California Supreme Court's ruling in the case California
Redevelopment Association v. Matosantos (2011) 53 Cal.4th 231 delayed
the preparation by successor agencies and the approval by oversight
boards of the January 1, 2012, through June 30, 2012, Recognized
Obligation Payment Schedule, a successor agency may amend the
Enforceable Obligation Payment Schedule to authorize the continued
payment of enforceable obligations until the time that the January 1,
2012, through June 30, 2012, Recognized Obligation Payment Schedule
has been approved by the oversight board and by the Department of
Finance. The successor agency may utilize reasonable estimates and
projections to support payment amounts for enforceable obligations if
the successor agency submits appropriate supporting documentation of
the basis for the estimate or projection to the Department of
Finance and the auditor-controller.
(2) The Department of Finance and the Controller shall each have
the authority to require any documents associated with the
enforceable obligations to be provided to them in a manner of their
choosing. Any taxing entity, the department, and the Controller shall
each have standing to file a judicial action to prevent a violation
under this part and to obtain injunctive or other appropriate relief.
(3) Commencing on the date the Recognized Obligation Payment
Schedule is valid pursuant to subdivision (l), only those payments
listed in the Recognized Obligation Payment Schedule may be made by
the successor agency from the funds specified in the Recognized
Obligation Payment Schedule. In addition, after it becomes valid, the
Recognized Obligation Payment Schedule shall supersede the Statement
of Indebtedness, which shall no longer be prepared nor have any
effect under the Community Redevelopment Law (Part 1 (commencing with
Section 33000)).
(4) Nothing in the act adding this part is to be construed as
preventing a successor agency, with the prior approval of the
oversight board, as described in Section 34179, from making payments
for enforceable obligations from sources other than those listed in
the Recognized Obligation Payment Schedule.
(5) From February 1, 2012, to July 1, 2012, a successor agency
shall have no authority and is hereby prohibited from accelerating
payment or making any lump-sum payments that are intended to prepay
loans unless such accelerated repayments were required prior to the
effective date of this part.
(b) Maintain reserves in the amount required by indentures, trust
indentures, or similar documents governing the issuance of
outstanding redevelopment agency bonds.
(c) Perform obligations required pursuant to any enforceable
obligation.
(d) Remit unencumbered balances of redevelopment agency funds to
the county auditor-controller for distribution to the taxing
entities, including, but not limited to, the unencumbered balance of
the Low and Moderate Income Housing Fund of a former redevelopment
agency. In making the distribution, the county auditor-controller
shall utilize the same methodology for allocation and distribution of
property tax revenues provided in Section 34188.
(e) Dispose of assets and properties of the former redevelopment
agency as directed by the oversight board; provided, however, that
the oversight board may instead direct the successor agency to
transfer ownership of certain assets pursuant to subdivision (a) of
Section 34181. The disposal is to be done expeditiously and in a
manner aimed at maximizing value. Proceeds from asset sales and
related funds that are no longer needed for approved development
projects or to otherwise wind down the affairs of the agency, each as
determined by the oversight board, shall be transferred to the
county auditor-controller for distribution as property tax proceeds
under Section 34188. The requirements of this subdivision shall not
apply to a successor agency that has been issued a finding of
completion by the Department of Finance pursuant to Section 34179.7.
(f) Enforce all former redevelopment agency rights for the benefit
of the taxing entities, including, but not limited to, continuing to
collect loans, rents, and other revenues that were due to the
redevelopment agency.
(g) Effectuate transfer of housing functions and assets to the
appropriate entity designated pursuant to Section 34176.
(h) Expeditiously wind down the affairs of the redevelopment
agency pursuant to the provisions of this part and in accordance with
the direction of the oversight board.
(i) Continue to oversee development of properties until the
contracted work has been completed or the contractual obligations of
the former redevelopment agency can be transferred to other parties.
Bond proceeds shall be used for the purposes for which bonds were
sold unless the purposes can no longer be achieved, in which case,
the proceeds may be used to defease the bonds.
(j) Prepare a proposed administrative budget and submit it to the
oversight board for its approval. The proposed administrative budget
shall include all of the following:
(1) Estimated amounts for successor agency administrative costs
for the upcoming six-month fiscal period.
(2) Proposed sources of payment for the costs identified in
paragraph (1).
(3) Proposals for arrangements for administrative and operations
services provided by a city, county, city and county, or other
entity.
(k) Provide administrative cost estimates, from its approved
administrative budget that are to be paid from property tax revenues
deposited in the Redevelopment Property Tax Trust Fund, to the county
auditor-controller for each six-month fiscal period.
(l) (1) Before each six-month fiscal period, prepare a Recognized
Obligation Payment Schedule in accordance with the requirements of
this paragraph. For each recognized obligation, the Recognized
Obligation Payment Schedule shall identify one or more of the
following sources of payment:
(A) Low and Moderate Income Housing Fund.
(B) Bond proceeds.
(C) Reserve balances.
(D) Administrative cost allowance.
(E) The Redevelopment Property Tax Trust Fund, but only to the
extent no other funding source is available or when payment from
property tax revenues is required by an enforceable obligation or by
the provisions of this part.
(F) Other revenue sources, including rents, concessions, asset
sale proceeds, interest earnings, and any other revenues derived from
the former redevelopment agency, as approved by the oversight board
in accordance with this part.
(2) A Recognized Obligation Payment Schedule shall not be deemed
valid unless all of the following conditions have been met:
(A) A Recognized Obligation Payment Schedule is prepared by the
successor agency for the enforceable obligations of the former
redevelopment agency. The initial schedule shall
project the dates and amounts of
scheduled payments for each enforceable obligation for the remainder
of the time period during which the redevelopment agency would have
been authorized to obligate property tax increment had the a
redevelopment agency not been dissolved.
(B) The Recognized Obligation Payment Schedule is submitted to and
duly approved by the oversight board. The successor agency shall
submit a copy of the Recognized Obligation Payment Schedule to the
county administrative officer, the county auditor-controller, and the
Department of Finance at the same time that the successor agency
submits the Recognized Obligation Payment Schedule to the oversight
board for approval.
(C) A copy of the approved Recognized Obligation Payment Schedule
is submitted to the county auditor-controller, the Controller's
office, and the Department of Finance, and is posted on the successor
agency's Internet Web site.
(3) The Recognized Obligation Payment Schedule shall be forward
looking to the next six months. The first Recognized Obligation
Payment Schedule shall be submitted to the Controller's office and
the Department of Finance by April 15, 2012, for the period of
January 1, 2012, to June 30, 2012, inclusive. This Recognized
Obligation Payment Schedule shall include all payments made by the
former redevelopment agency between January 1, 2012, through January
31, 2012, and shall include all payments proposed to be made by the
successor agency from February 1, 2012, through June 30, 2012. Former
redevelopment agency enforceable obligation payments due, and
reasonable or necessary administrative costs due or incurred, prior
to January 1, 2012, shall be made from property tax revenues received
in the spring of 2011 property tax distribution, and from other
revenues and balances transferred to the successor agency.
(m) The Recognized Obligation Payment Schedule for the period of
January 1, 2013, to June 30, 2013, shall be submitted by the
successor agency, after approval by the oversight board, no later
than September 1, 2012. Commencing with the Recognized Obligation
Payment Schedule covering the period July 1, 2013, through December
31, 2013, successor agencies shall submit an oversight board-approved
Recognized Obligation Payment Schedule to the Department of Finance
and to the county auditor-controller no fewer than 90 days before the
date of property tax distribution. The Department of Finance shall
make its determination of the enforceable obligations and the amounts
and funding sources of the enforceable obligations no later than 45
days after the Recognized Obligation Payment Schedule is submitted.
Within five business days of the department's determination, a
successor agency may request additional review by the department and
an opportunity to meet and confer on disputed items. The meet and
confer period may vary; an untimely submittal of a Recognized
Obligation Payment Schedule may result in a meet and confer period of
less than 30 days. The department shall notify the successor agency
and the county auditor-controllers as to the outcome of its review at
least 15 days before the date of property tax distribution.
(1) The successor agency shall submit a copy of the Recognized
Obligation Payment Schedule to the Department of Finance
electronically, and the successor agency shall complete the
Recognized Obligation Payment Schedule in the manner provided for by
the department. A successor agency shall be in noncompliance with
this paragraph if it only submits to the department an electronic
message or a letter stating that the oversight board has approved a
Recognized Obligation Payment Schedule.
(2) If a successor agency does not submit a Recognized Obligation
Payment Schedule by the deadlines provided in this subdivision, the
city, county, or city and county that created the redevelopment
agency shall be subject to a civil penalty equal to ten thousand
dollars ($10,000) per day for every day the schedule is not submitted
to the department. The civil penalty shall be paid to the county
auditor-controller for allocation to the taxing entities under
Section 34183. If a successor agency fails to submit a Recognized
Obligation Payment Schedule by the deadline, any creditor of the
successor agency or the Department of Finance or any affected taxing
entity shall have standing to and may request a writ of mandate to
require the successor agency to immediately perform this duty. Those
actions may be filed only in the County of Sacramento and shall have
priority over other civil matters. Additionally, if an agency does
not submit a Recognized Obligation Payment Schedule within 10 days of
the deadline, the maximum administrative cost allowance for that
period shall be reduced by 25 percent.
(3) If a successor agency fails to submit to the department an
oversight board-approved Recognized Obligation Payment Schedule that
complies with all requirements of this subdivision within five
business days of the date upon which the Recognized Obligation
Payment Schedule is to be used to determine the amount of property
tax allocations, the department may determine if any amount should be
withheld by the county auditor-controller for payments for
enforceable obligations from distribution to taxing entities, pending
approval of a Recognized Obligation Payment Schedule. The county
auditor-controller shall distribute the portion of any of the sums
withheld pursuant to this paragraph to the affected taxing entities
in accordance with paragraph (4) of subdivision (a) of Section 34183
upon notice by the department that a portion of the withheld balances
are in excess of the amount of enforceable obligations. The county
auditor-controller shall distribute withheld funds to the successor
agency only in accordance with a Recognized Obligation Payment
Schedule approved by the department. County auditor-controllers shall
lack the authority to withhold any other amounts from the
allocations provided for under Section 34183 or 34188 unless required
by a court order.
(4) (A) The Recognized Obligation Payment Schedule payments
required pursuant to this subdivision may be scheduled beyond the
existing Recognized Obligation Payment Schedule cycle upon a showing
that a lender requires cash on hand beyond the Recognized Obligation
Payment Schedule cycle.
(B) When a payment is shown to be due during the Recognized
Obligation Payment Schedule period, but an invoice or other billing
document has not yet been received, the successor agency may utilize
reasonable estimates and projections to support payment amounts for
enforceable obligations if the successor agency submits appropriate
supporting documentation of the basis for the estimate or projection
to the department and the auditor-controller.
(C) A Recognized Obligation Payment Schedule may also include
appropriation of moneys from bonds subject to passage during the
Recognized Obligation Payment Schedule cycle when an enforceable
obligation requires the agency to issue the bonds and use the
proceeds to pay for project expenditures.
(n) Cause a postaudit of the financial transactions and records of
the successor agency to be made at least annually by a certified
public accountant.
(o) This section shall remain in effect only until July 1, 2016,
and as of that date is repealed.
SEC. 2. Section 34177 is added to the Health
and Safety Code, to read:
34177. Successor agencies are required to do all of the
following:
(a) Continue to make payments due for enforceable obligations.
(1) On and after February 1, 2012, and until a Recognized
Obligation Payment Schedule becomes operative, only payments required
pursuant to an enforceable obligations payment schedule shall be
made. The initial enforceable obligation payment schedule shall be
the last schedule adopted by the redevelopment agency under Section
34169. However, payments associated with obligations excluded from
the definition of enforceable obligations by paragraph (2) of
subdivision (d) of Section 34171 shall be excluded from the
enforceable obligations payment schedule and be removed from the last
schedule adopted by the redevelopment agency under Section 34169
prior to the successor agency adopting it as its enforceable
obligations payment schedule pursuant to this subdivision. The
enforceable obligation payment schedule may be amended by the
successor agency at any public meeting and shall be subject to the
approval of the oversight board as soon as the board has sufficient
members to form a quorum. In recognition of the fact that the timing
of the California Supreme Court's ruling in the case California
Redevelopment Association v. Matosantos (2011) 53 Cal.4th 231 delayed
the preparation by successor agencies and the approval by oversight
boards of the January 1, 2012, through June 30, 2012, Recognized
Obligation Payment Schedule, a successor agency may amend the
Enforceable Obligation Payment Schedule to authorize the continued
payment of enforceable obligations until the time that the January 1,
2012, through June 30, 2012, Recognized Obligation Payment Schedule
has been approved by the oversight board and by the Department of
Finance. The successor agency may utilize reasonable estimates and
projections to support payment amounts for enforceable obligations if
the successor agency submits appropriate supporting documentation of
the basis for the estimate or projection to the Department of
Finance and the auditor-controller.
(2) The Department of Finance and the Controller shall each have
the authority to require any documents associated with the
enforceable obligations to be provided to them in a manner of their
choosing. Any taxing entity, the department, and the Controller shall
each have standing to file a judicial action to prevent a violation
under this part and to obtain injunctive or other appropriate relief.
(3) Commencing on the date the Recognized Obligation Payment
Schedule is valid pursuant to subdivision (l), only those payments
listed in the Recognized Obligation Payment Schedule may be made by
the successor agency from the funds specified in the Recognized
Obligation Payment Schedule. In addition, after it becomes valid, the
Recognized Obligation Payment Schedule shall supersede the Statement
of Indebtedness, which shall no longer be prepared nor have any
effect under the Community Redevelopment Law (Part 1 (commencing with
Section 33000)).
(4) Nothing in the act adding this part is to be construed as
preventing a successor agency, with the prior approval of the
oversight board, as described in Section 34179, from making payments
for enforceable obligations from sources other than those listed in
the Recognized Obligation Payment Schedule.
(5) From February 1, 2012, to July 1, 2012, a successor agency
shall have no authority and is hereby prohibited from accelerating
payment or making any lump-sum payments that are intended to prepay
loans unless the accelerated repayments were required prior to the
effective date of this part.
(b) Maintain reserves in the amount required by indentures, trust
indentures, or similar documents governing the issuance of
outstanding redevelopment agency bonds.
(c) Perform obligations required pursuant to any enforceable
obligation.
(d) Remit unencumbered balances of redevelopment agency funds to
the county auditor-controller for distribution to the taxing
entities, including, but not limited to, the unencumbered balance of
the Low and Moderate Income Housing Fund of a former redevelopment
agency. In making the distribution, the county auditor-controller
shall utilize the same methodology for allocation and distribution of
property tax revenues provided in Section 34188.
(e) Dispose of assets and properties of the former redevelopment
agency as directed by the oversight board; provided, however, that
the oversight board may instead direct the successor agency to
transfer ownership of certain assets pursuant to subdivision (a) of
Section 34181. The disposal is to be done expeditiously and in a
manner aimed at maximizing value. Proceeds from asset sales and
related funds that are no longer needed for approved development
projects or to otherwise wind down the affairs of the agency, each as
determined by the oversight board, shall be transferred to the
county auditor-controller for distribution as property tax proceeds
under Section 34188. The requirements of this subdivision shall not
apply to a successor agency that has been issued a finding of
completion by the Department of Finance pursuant to Section 34179.7.
(f) Enforce all former redevelopment agency rights for the benefit
of the taxing entities, including, but not limited to, continuing to
collect loans, rents, and other revenues that were due to the
redevelopment agency.
(g) Effectuate transfer of housing functions and assets to the
appropriate entity designated pursuant to Section 34176.
(h) Expeditiously wind down the affairs of the redevelopment
agency pursuant to the provisions of this part and in accordance with
the direction of the oversight board.
(i) Continue to oversee development of properties until the
contracted work has been completed or the contractual obligations of
the former redevelopment agency can be transferred to other parties.
Bond proceeds shall be used for the purposes for which bonds were
sold unless the purposes can no longer be achieved, in which case,
the proceeds may be used to defease the bonds.
(j) Prepare a proposed administrative budget and submit it to the
oversight board for its approval. The proposed administrative budget
shall include all of the following:
(1) Estimated amounts for successor agency administrative costs
for the upcoming 12-month fiscal period.
(2) Proposed sources of payment for the costs identified in
paragraph (1).
(3) Proposals for arrangements for administrative and operations
services provided by a city, county, city and county, or other
entity.
(k) Provide administrative cost estimates, from its approved
administrative budget that are to be paid from property tax revenues
deposited in the Redevelopment Property Tax Trust Fund, to the county
auditor-controller for each 12-month fiscal period.
(l) (1) Before each 12-month fiscal period, prepare a Recognized
Obligation Payment Schedule in accordance with the requirements of
this paragraph. For each recognized obligation, the Recognized
Obligation Payment Schedule shall identify one or more of the
following sources of payment:
(A) Low and Moderate Income Housing Fund.
(B) Bond proceeds.
(C) Reserve balances.
(D) Administrative cost allowance.
(E) The Redevelopment Property Tax Trust Fund, but only to the
extent no other funding source is available or when payment from
property tax revenues is required by an enforceable obligation or by
the provisions of this part.
(F) Other revenue sources, including rents, concessions, asset
sale proceeds, interest earnings, and any other revenues derived from
the former redevelopment agency, as approved by the oversight board
in accordance with this part.
(2) A Recognized Obligation Payment Schedule shall not be deemed
valid unless all of the following conditions have been met:
(A) A Recognized Obligation Payment Schedule is prepared by the
successor agency for the enforceable obligations of the former
redevelopment agency. The initial schedule shall project the dates
and amounts of scheduled payments for each enforceable obligation for
the remainder of the time period during which the redevelopment
agency would have been authorized to obligate property tax increment
had the redevelopment agency not been dissolved.
(B) The Recognized Obligation Payment Schedule is submitted to and
duly approved by the oversight board. The successor agency shall
submit a copy of the Recognized Obligation Payment Schedule to the
county administrative officer, the county auditor-controller, and the
Department of Finance at the same time that the successor agency
submits the Recognized Obligation Payment Schedule to the oversight
board for approval.
(C) A copy of the approved Recognized Obligation Payment Schedule
is submitted to the county auditor-controller, the Controller's
office, and the Department of Finance, and is posted on the successor
agency's Internet Web site.
(3) The Recognized Obligation Payment Schedule shall be forward
looking to the next 12-month fiscal period, for the first 12-month
fiscal period commencing after January 1, 2016. The first Recognized
Obligation Payment Schedule shall be submitted to the Controller's
office and the Department of Finance by April 15, 2012, for the
period of January 1, 2012, to June 30, 2012, inclusive. This
Recognized Obligation Payment Schedule shall include all payments
made by the former redevelopment agency between January 1, 2012,
through January 31, 2012, and shall include all payments proposed to
be made by the successor agency from February 1, 2012, through June
30, 2012. Former redevelopment agency enforceable obligation payments
due, and reasonable or necessary administrative costs due or
incurred, prior to January 1, 2012, shall be made from property tax
revenues received in the spring of 2011 property tax distribution,
and from other revenues and balances transferred to the successor
agency.
(4) The Recognized Obligation Payment Schedule may be amended by
the oversight board during a 12-month fiscal period as long as the
amendment is approved at least 90 days before the date of the next
property tax distribution.
(m) The Recognized Obligation Payment Schedule for the period of
January 1, 2013, to June 30, 2013, shall be submitted by the
successor agency, after approval by the oversight board, no later
than September 1, 2012. Commencing with the Recognized Obligation
Payment Schedule covering the period of July 1, 2013, through
December 31, 2013, successor agencies shall submit an oversight
board-approved Recognized Obligation Payment Schedule to the
Department of Finance and to the county auditor-controller no fewer
than 90 days before the date of property tax distribution. The
Department of Finance shall make its determination of the enforceable
obligations and the amounts and funding sources of the enforceable
obligations no later than 45 days after the Recognized Obligation
Payment Schedule is submitted. Within five business days of the
department's determination, a successor agency may request additional
review by the department and an opportunity to meet and confer on
disputed items. The meet and confer period may vary; an untimely
submittal of a Recognized Obligation Payment Schedule may result in a
meet and confer period of less than 30 days. The department shall
notify the successor agency and the county auditor-controllers as to
the outcome of its review at least 15 days before the date of
property tax distribution.
(1) The successor agency shall submit a copy of the Recognized
Obligation Payment Schedule to the Department of Finance
electronically, and the successor agency shall complete the
Recognized Obligation Payment Schedule in the manner provided for by
the department. A successor agency shall be in noncompliance with
this paragraph if it only submits to the department an electronic
message or a letter stating that the oversight board has approved a
Recognized Obligation Payment Schedule.
(2) If a successor agency does not submit a Recognized Obligation
Payment Schedule by the deadlines provided in this subdivision, the
city, county, or city and county that created the redevelopment
agency shall be subject to a civil penalty equal to ten thousand
dollars ($10,000) per day for every day the schedule is not submitted
to the department. The civil penalty shall be paid to the county
auditor-controller for allocation to the taxing entities under
Section 34183. If a successor agency fails to submit a Recognized
Obligation Payment Schedule by the deadline, any creditor of the
successor agency or the Department of Finance or any affected taxing
entity shall have standing to and may request a writ of mandate to
require the successor agency to immediately perform this duty. Those
actions may be filed only in the County of Sacramento and shall have
priority over other civil matters. Additionally, if an agency does
not submit a Recognized Obligation Payment Schedule within 10 days of
the deadline, the maximum administrative cost allowance for that
period shall be reduced by 25 percent.
(3) If a successor agency fails to submit to the department an
oversight board-approved Recognized Obligation Payment Schedule that
complies with all requirements of this subdivision within five
business days of the date upon which the Recognized Obligation
Payment Schedule is to be used to determine the amount of property
tax allocations, the department may determine if any amount should be
withheld by the county auditor-controller for payments for
enforceable obligations from distribution to taxing entities, pending
approval of a Recognized Obligation Payment Schedule. The county
auditor-controller shall distribute the portion of any of the sums
withheld pursuant to this paragraph to the affected taxing entities
in accordance with paragraph (4) of subdivision (a) of Section 34183
upon notice by the department that a portion of the withheld balances
are in excess of the amount of enforceable obligations. The county
auditor-controller shall distribute withheld funds to the successor
agency only in accordance with a Recognized Obligation Payment
Schedule approved by the department. County auditor-controllers shall
lack the authority to withhold any other amounts from the
allocations provided for under Section 34183 or 34188 unless required
by a court order.
(4) (A) The Recognized Obligation Payment Schedule payments
required pursuant to this subdivision may be scheduled beyond the
existing Recognized Obligation Payment Schedule cycle upon a showing
that a lender requires cash on hand beyond the Recognized Obligation
Payment Schedule cycle.
(B) When a payment is shown to be due during the Recognized
Obligation Payment Schedule period, but an invoice or other billing
document has not yet been received, the successor agency may utilize
reasonable estimates and projections to support payment amounts for
enforceable obligations if the successor agency submits appropriate
supporting documentation of the basis for the estimate or projection
to the department and the auditor-controller.
(C) A Recognized Obligation Payment Schedule may also include
appropriation of moneys from bonds subject to passage during the
Recognized Obligation Payment Schedule cycle when an enforceable
obligation requires the agency to issue the bonds and use the
proceeds to pay for project expenditures.
(n) Cause a postaudit of the financial transactions and records of
the successor agency to be made at least annually by a certified
public accountant.
(o) The 12-month fiscal period specified in subdivisions (j), (k),
and (l) shall correspond to the period from July 1 through June 30,
inclusive, unless an oversight board and the Department of Finance
approve a successor agency's request for the 12-month fiscal period
to correspond with a different fiscal year used by the city,
county, or city and county that
created the former redevelopment agency.
(p) This section shall not be construed to alter the semiannual
distribution of Redevelopment Property Tax Trust Fund payments made
in accordance with the projected payment schedule of the approved
Recognized Obligation Payment Schedule.
(q) This section shall become operative on January 1, 2016.
