Bill Text: CA AB1585 | 2011-2012 | Regular Session | Amended
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Community development.
Spectrum: Partisan Bill (Democrat 7-0)
Status: (Passed) 2012-09-29 - Chaptered by Secretary of State - Chapter 777, Statutes of 2012. [AB1585 Detail]
Download: California-2011-AB1585-Amended.html
Bill Title: Community development.
Spectrum: Partisan Bill (Democrat 7-0)
Status: (Passed) 2012-09-29 - Chaptered by Secretary of State - Chapter 777, Statutes of 2012. [AB1585 Detail]
Download: California-2011-AB1585-Amended.html
BILL NUMBER: AB 1585 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MARCH 21, 2012
AMENDED IN ASSEMBLY MARCH 15, 2012
AMENDED IN ASSEMBLY MARCH 8, 2012
INTRODUCED BY Assembly Members John A. Pérez, Atkins, Dickinson,
Hill, Mitchell, Perea, and Torres
FEBRUARY 2, 2012
An act to amend Sections 34171, 34173, 34176, 34177, 34179, 34180,
34181, 34182, 34183, 34187, and 34189 of the Health and Safety Code,
relating to redevelopment, and declaring the urgency thereof, to
take effect immediately.
LEGISLATIVE COUNSEL'S DIGEST
AB 1585, as amended, John A. Pérez. Redevelopment.
Existing law dissolved redevelopment agencies and community
development 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 and to, among other things, repay enforceable
obligations, as defined, and to remit unencumbered balances of
redevelopment agency funds, including housing funds, to the county
auditor-controller for distribution to taxing entities.
Existing law authorizes the city, county, or city and county that
authorized the creation of a redevelopment agency to retain the
housing assets, functions, and powers previously performed by the
redevelopment agency, excluding amounts on deposit in the Low and
Moderate Income Housing Fund.
This bill would modify the scope of the term "enforceable
obligation" and modify provisions relating to the transfer of housing
funds and responsibilities associated with dissolved redevelopment
agencies. The bill would provide that any amounts on deposit in the
Low and Moderate Income Housing Fund of a dissolved redevelopment
agency be transferred to specified entities. The bill would make
conforming changes.
Existing law provides that, upon a specified date, agreements,
contracts, or arrangements between the city or county, or city and
county that created the redevelopment agency and the redevelopment
agency are invalid. Notwithstanding this provision, an agreement that
provided loans or other startup funds for the agency that was
entered into within 2 years of the formation of the agency is valid
and binds the successor agency.
The bill would expand this exception to include an agreement
involving a loan specific to a project area and other specified
obligations. The bill would provide that other loan agreements
entered into between the redevelopment agency and the city, county,
or city and county that created it are deemed to be enforceable
obligations, except as specified. The bill would further expand upon,
and clarify, the scope of the successor agency's and the oversight
board's responsibilities.
This bill would declare that it is to take effect immediately as
an urgency statute.
Vote: 2/3. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 34171 of the Health and Safety Code is amended
to read:
34171. The following terms shall have the following meanings:
(a) "Administrative budget" means the budget for administrative
costs of the successor agencies as provided in Section 34177.
(b) "Administrative cost allowance" means an amount that, subject
to the approval of the oversight board, is payable from property tax
revenues of up to 5 percent of the property tax allocated to the
former redevelopment agency and successor agency for the 2011-12
fiscal year and up to 3 percent of the property tax allocated to the
Redevelopment Obligation Retirement Fund money that is allocated to
the successor agency for each fiscal year thereafter, except as
provided by subdivision (l) of Section 34180; provided, however, that
the amount shall not be less than two hundred fifty thousand dollars
($250,000) for any fiscal year or such lesser amount as agreed to by
the successor agency. However, the allowance amount shall exclude
any administrative costs that can be paid from bond proceeds or from
sources other than property tax. Employee costs associated with work
on specific project implementation activities, including, but not
limited to, construction inspection, project management, or actual
construction, shall be considered project-specific costs and are not
administrative costs.
(c) "Designated local authority" shall mean a public entity formed
pursuant to subdivision (d) of Section 34173.
(d) (1) "Enforceable obligation" means any of the following:
(A) Bonds, as defined by Section 33602 and bonds issued pursuant
to Section 5850 of the Government Code, including the required annual
debt service, reserve set-asides, and any other payments required
under the indenture or similar documents governing the issuance of
the outstanding bonds of the former redevelopment agency.
(B) Loans of moneys borrowed by the redevelopment agency for a
lawful purpose, to the extent they are legally required to be repaid
pursuant to a required repayment schedule or other mandatory loan
terms.
(C) Payments required by the federal government, preexisting
obligations to the state or obligations imposed by state law, other
than passthrough payments that are made by the county
auditor-controller pursuant to Section 34183, or legally enforceable
payments required in connection with the agencies' employees,
including, but not limited to, pension payments, pension obligation
debt service, unemployment payments, or other obligations conferred
through a collective bargaining agreement. Costs incurred to fulfill
collective bargaining agreements for layoffs or terminations of city
employees who performed work directly on behalf of the former
redevelopment agency shall be considered enforceable obligations
payable from property tax funds. The obligations to employees
specified in this subparagraph shall remain enforceable obligations
payable from property tax funds for any employee to whom those
obligations apply if that employee is transferred to the entity
assuming the housing functions of the former redevelopment agency
pursuant to Section 34176. The successor agency or designated local
authority shall enter into an agreement with the housing entity to
reimburse it for any costs of the employee obligations.
(D) Judgments or settlements entered by a competent court of law
or binding arbitration decisions against the former redevelopment
agency, other than passthrough payments that are made by the county
auditor-controller pursuant to Section 34183. Along with the
successor agency, the oversight board shall have the authority and
standing to appeal any judgment or to set aside any settlement or
arbitration decision.
(E) Any legally binding and enforceable agreement or contract that
is not otherwise void as violating the debt limit or public policy.
However, nothing in this act shall prohibit either the successor
agency, with the approval or at the direction of the oversight board,
or the oversight board itself from terminating any existing
agreements or contracts and providing any necessary and required
compensation or remediation for such termination.
(F) Contracts or agreements necessary for the administration or
operation of the successor agency, in accordance with this part,
including, but not limited to, agreements to purchase or rent office
space, equipment and supplies, and pay-related expenses pursuant to
Section 33127 and for carrying insurance pursuant to Section 33134.
(G) Amounts borrowed from or payments owing to the Low and
Moderate Income Housing Fund of a redevelopment agency, which had
been deferred as of the effective date of the act adding this part;
provided, however, that the repayment schedule is approved by the
oversight board. Repayments shall be made to the Low and Moderate
Income Housing Fund maintained by the entity assuming the housing
functions formerly performed by the redevelopment agency, as
described in Section 34176.
(2) (A) Except as specifically provided in this part, "enforceable
obligation" does not include any agreements, contracts, or
arrangements between the city, county, or city and county that
created the redevelopment agency and the former redevelopment agency.
However, written agreements entered into (i) at the time of
issuance, but in no event later than December 31, 2010, of
indebtedness obligations, and (ii) solely for the purpose of securing
or repaying those indebtedness obligations may be deemed enforceable
obligations for purposes of this part.
(B) Loan agreements entered into between the redevelopment agency
and the city, county, or city and county that created it, within two
years of the date of creation of the redevelopment agency, or within
two years of the date of the creation of a project area if the loan
is specific to that project area, and any obligations imposed by
paragraph (1) of subdivision (d) of Section 33691 may be deemed to be
enforceable obligations.
(C) Other loan agreements entered into between the redevelopment
agency and the city, county, or city and county that created it shall
be deemed to be enforceable obligations, if the conditions of
subdivision (k) of Section 34180 are met.
(3) Contracts or agreements between the former redevelopment
agency and other public agencies, to perform services or provide
funding for governmental or private services or capital projects
outside of redevelopment project areas that do not provide benefit to
the redevelopment project and thus were not properly authorized
under Part 1 (commencing with Section 33000) shall be deemed void on
the effective date of this part; provided, however, that such
contracts or agreements for the provision of housing properly
authorized under Part 1 (commencing with Section 33000) shall not be
deemed void.
(e) "Indebtedness obligations" means bonds, notes, certificates of
participation, or other evidence of indebtedness, issued or
delivered by the redevelopment agency, or by a joint exercise of
powers authority created by the redevelopment agency, to third-party
investors or bondholders to finance or refinance redevelopment
projects undertaken by the redevelopment agency in compliance with
the Community Redevelopment Law (Part 1 (commencing with Section
33000)).
(f) "Oversight board" shall mean each entity established pursuant
to Section 34179.
(g) "Recognized obligation" means an obligation listed in the
Recognized Obligation Payment Schedule.
(h) "Recognized Obligation Payment Schedule" means the document
setting forth the minimum payment amounts and due dates of payments
required by enforceable obligations for each six-month fiscal period
or annual period as provided in subdivision (l) of Section 34177.
(i) "School entity" means any entity defined as such in
subdivision (f) of Section 95 of the Revenue and Taxation Code.
(j) "Successor agency" means the county, city, or city and county
that authorized the creation of each redevelopment agency acting in
its separate capacity as a successor agency or another entity as
provided in Section 34173.
(k) "Taxing entities" means cities, counties, a city and county,
special districts, and school entities, as defined in subdivision (f)
of Section 95 of the Revenue and Taxation Code, that receive
passthrough payments and distributions of property taxes pursuant to
the provisions of this part.
SEC. 2. Section 34173 of the Health and Safety Code is amended to
read:
34173. (a) Successor agencies, as defined in this part, are
hereby designated as successor entities to the former redevelopment
agencies. A successor agency shall constitute a legally
distinct and separate body For purposes of this part,
a successor agency is a public entity separate from the entity or
entities that authorized the creation of each redevelopment agency
that acts, by resolution, on its own behalf and shall have all
the powers and duties set forth herein, the power to sue and be sued,
and such additional powers as may be conferred upon it. Each
successor agency shall be deemed to be a local entity for purposes of
the Ralph M. Brown Act (Chapter 9 (commencing with Section 54950) of
Part 1 of Division 2 of Title 5 of the Government Code).
(b) Except for those provisions of the Community Redevelopment Law
that are repealed, restricted, or revised pursuant to the act adding
this part, all authority, rights, powers, duties, and obligations
previously vested with the former redevelopment agencies, under the
Community Redevelopment Law, are hereby vested in the successor
agencies.
(c) (1) Where the redevelopment agency was in the form of a joint
powers authority, and where the joint powers agreement governing the
formation of the joint powers authority addresses the allocation of
assets and liabilities upon dissolution of the joint powers
authority, then each of the entities that created the former
redevelopment agency may be a successor agency within the meaning of
this part and each shall have a share of assets and liabilities based
on the provisions of the joint powers agreement.
(2) Where the redevelopment agency was in the form of a joint
powers authority, and where the joint powers agreement governing the
formation of the joint powers authority does not address the
allocation of assets and liabilities upon dissolution of the joint
powers authority, then each of the entities that created the former
redevelopment agency may be a successor agency within the meaning of
this part, a proportionate share of the assets and liabilities shall
be based on the assessed value in the project areas within each
entity's jurisdiction, as determined by the county assessor, in its
jurisdiction as compared to the assessed value of land within the
boundaries of the project areas of the former redevelopment agency.
(d) (1) A city, county, city and county, or the entities forming
the joint powers authority that authorized the creation of each
redevelopment agency may elect not to serve as a successor agency
under this part. A city, county, city and county, or any member of a
joint powers authority that elects not to serve as a successor agency
under this part must file a copy of a duly authorized resolution of
its governing board to that effect with the county auditor-controller
no later than January 13, 2012.
(2) The determination of the first local agency that elects to
become the successor agency shall be made by the county
auditor-controller based on the earliest receipt by the county
auditor-controller of a copy of a duly adopted resolution of the
local agency's governing board authorizing such an election. As used
in this section, "local agency" means any city, county, city and
county, or special district in the county of the former redevelopment
agency.
(3) If no local agency elects to serve as a successor agency for a
dissolved redevelopment agency, a public body, referred to herein as
a "designated local authority" shall be immediately formed, pursuant
to this part, in the county and shall be vested with all the powers
and duties of a successor agency as described in this part. The
Governor shall appoint three residents of the county to serve as the
governing board of the authority. The designated local authority
shall serve as successor agency until a local agency elects to become
the successor agency in accordance with this section.
(4) A city, county, or city and county, or the entities forming
the joint powers authority that authorized the creation of a
redevelopment agency and that elected not to serve as the successor
agency under this part, may subsequently reverse this decision and
agree to serve as the successor agency pursuant to this section.
Any reversal of this decision shall not become effective for 60 days
after notice has been given to the current successor agency and the
oversight board and shall not invalidate any action of the successor
agency or oversight board taken prior to the effective date of the
transfer of responsibility.
(e) The liability of any successor agency, acting pursuant to the
powers granted under the act adding this part, shall be limited to
the extent of the total sum of property tax revenues it receives
pursuant to this part and the value of assets transferred to it as a
successor agency for a dissolved redevelopment agency.
SEC. 3. Section 34176 of the Health and Safety Code is amended to
read:
34176. (a) 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 responsibility for performing housing functions
previously performed by a redevelopment agency, all rights, powers,
duties, and obligations assets, liabilities,
duties, and obligations, excluding enforceable obligations of the
successor agency, associated with the housing activities of the
agency, including any amounts on deposit in the Low and Moderate
Income Housing Fund, shall be transferred to the city, county, or
city and county. Any funds transferred to the city, county, or city
and county pursuant to this subdivision shall be maintained in a
separate Low and Moderate Income Housing Fund and expended pursuant
to the provisions of the Community Redevelopment Law relating to the
Low and Moderate Income Housing Fund.
(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,
liabilities, duties, and obligations , excluding enforceable
obligations of the successor agency, associated with the
housing activities of the agency, including any amounts in the Low
and Moderate Income Housing Fund, shall be transferred as follows:
(1) Where there is one local housing authority in the territorial
jurisdiction of the former redevelopment agency, to that local
housing authority.
(2) Where 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.
(3) Where there is no local housing authority in the territorial
jurisdiction of the former redevelopment agency or where the local
housing authority selected does not accept the responsibility for
performing housing functions previously performed by the former
redevelopment agency, to the Department of Housing and Community
Development. Funds shall be deposited into the State Low and Moderate
Income Housing Trust Fund and awarded on a competitive basis to
projects within the counties in which the funds were collected.
Priority shall be given to eligible projects for extremely low, very
low, and low-income projects.
(c) Commencing on the operative date of this part, the entity
assuming the housing functions formerly performed by the
redevelopment agency shall 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) The succeeding housing entity shall contract to expend at
least 80 percent of the moneys in the Low and Moderate Income Housing
Fund within two years of the date of receipt of those moneys. If
within four years of the date of receipt of those moneys the
succeeding housing entity has not spent the money in the Low and
Moderate Income Housing Fund, then the excess amount, minus the
amount necessarily reserved for the ongoing monitoring and
maintenance of affordable housing projects, shall be transferred to
the State Low and Moderate Income Housing Trust Fund, which is hereby
created, for expenditure by the Department of Housing and Community
Development for the purpose of increasing the supply of low- and
moderate-income housing in the county with priority given to
extremely low, very low, and low-income projects. Excess funds shall
not be transferred to the department if the succeeding housing entity
applies for, and receives, a waiver from the department. If a waiver
is granted, funds shall remain with the entity for an additional two
years from the date of waiver approval. In approving a waiver, the
department shall consider, among other factors, whether the city,
county, or city and county, or housing authority has a site specific
project plan with local approvals, including the issuance of building
permits, whether the project has secured financing, and evidence
that some funds have been expended from the Low and Moderate Income
Housing Fund. A succeeding housing entity may reapply at the end of
the two-year period for a renewal of the previously granted waiver.
(e) A succeeding housing entity may transfer all or a portion of
the moneys in the Low and Moderate Income Housing Fund to another
succeeding housing entity within the county where the moneys were
collected, to be spent on affordable housing if all of the following
conditions are met:
(1) The funds shall be spent on projects that primarily benefit
low-income families or families that are below low income.
(2) Both succeeding housing entities involved in the transfer
adopt a resolution detailing the need for the transfer of funds and
the intended use of the funds by the receiving jurisdiction.
(3) The funds shall be spent in compliance with subdivision (d).
(f) The succeeding housing entity shall, within 45 days of the
date the act amending this section takes effect or 45 days from
receipt of moneys for the Low and Moderate Income Housing Fund,
whichever date is later, notify the department of the amount of
moneys on deposit in the Low and Moderate Income Housing Fund and
that entity's plan for spending the funds. Two years from this date,
the succeeding housing entity shall report to the department the
percentage of funds that it has entered into contract to spend.
Within four years of receipt of the funds, the succeeding housing
entity shall report to the department if there are remaining moneys
in the Low and Moderate Income Housing Fund and if it will apply for
a waiver specified in subdivision (d) or whether the excess amount
will be transferred to the department.
(g) For purposes of this section, "succeeding housing entity"
means the entity that assumes responsibility for retaining the
housing assets and functions previously performed by a redevelopment
agency, as described in subdivisions (a) and (b).
SEC. 4. 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 (e) 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.
(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, commencing on the date the
Recognized Obligation Payment Schedule is valid pursuant to
subdivision (l), 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.
(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. 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 in an expeditious but
orderly manner that preserves the value of the asset. 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.
(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 draft Recognized Obligation Payment Schedule is prepared by
the successor agency for the enforceable obligations of the former
redevelopment agency by March 1, 2012. From January 1, 2012, to June
30, 2012, inclusive, the initial draft of that schedule shall project
the dates and amounts of scheduled payments for each
enforceable obligation, and shall be
reviewed and certified, as to its accuracy, by an external auditor
designated pursuant to Section 34182.
(B) The certified Recognized Obligation Payment Schedule is
submitted to and duly approved by the oversight board.
(C) A copy of the approved Recognized Obligation Payment Schedule
is submitted to the county auditor-controller and both the Controller'
s office and the Department of Finance and be 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. However, the first
Recognized Obligation Payment Schedule submitted for the year may, if
necessary, include the total amount of payments required for an
enforceable obligation for the next two six-month periods and, in the
case of debt obligations, may include, if necessary, the amount of
the annual debt service, reserve set-asides, and any other amounts
required under indenture or similar documents. 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) Cause a postaudit of the financial transactions and records of
the successor agency to be made at least annually by a certified
public accountant.
SEC. 5. Section 34179 of the Health and Safety Code is amended to
read:
34179. (a) Each successor agency shall have an oversight board
composed of seven members. The members shall elect one of their
members as the chairperson and shall report the name of the
chairperson and other members to the Department of Finance on or
before May 1, 2012. Members shall be selected as follows:
(1) One member appointed by the county board of supervisors.
(2) One member appointed by the mayor for the city that formed the
redevelopment agency.
(3) One member appointed by the special district having the
largest property tax share within the redevelopment project areas of
the former redevelopment agency, which is of the type of special
district that is eligible to receive property tax revenues pursuant
to Section 34188.
(4) One member appointed by the county superintendent of education
to represent schools if the superintendent is elected. If the county
superintendent of education is appointed, then the appointment made
pursuant to this paragraph shall be made by the county board of
education.
(5) One member appointed by the Chancellor of the California
Community Colleges to represent community college districts in the
county.
(6) One member of the public appointed by the county board of
supervisors.
(7) One member representing the employees of the former
redevelopment agency appointed by the mayor or chair of the board of
supervisors, as the case may be, from the recognized employee
organization representing the largest number of former redevelopment
agency employees employed by the successor agency at that time. In
the case where city or county employees performed administrative
duties of the former redevelopment agency, the appointment shall be
made from the recognized employee organization representing those
employees. If a recognized employee organization does not exist for
either the employees of the former redevelopment agency or the city
or county employees performing administrative duties of the former
redevelopment agency, the appointment shall be made from among the
employees of the successor agency. In voting to approve a contract as
an enforceable obligation, a member appointed pursuant to this
paragraph shall not be deemed to be interested in the contract by
virtue of being an employee of the successor agency or community for
purposes of Section 1090 of the Government Code.
(8) If the county or a joint powers agency formed the
redevelopment agency, then the largest city by acreage in the
territorial jurisdiction of the former redevelopment agency may
select one member. If there are no cities with territory in a project
area of the redevelopment agency, the county superintendent of
education may appoint an additional member to represent the public.
(9) If there are no special districts of the type that are
eligible to receive property tax pursuant to Section 34188, within
the territorial jurisdiction of the former redevelopment agency, then
the county may appoint one member to represent the public.
(10) Where a redevelopment agency was formed by an entity that is
both a charter city and a county, the oversight board shall be
composed of seven members selected as follows: three members
appointed by the mayor of the city, where such appointment is subject
to confirmation by the county board of supervisors, one member
appointed by the largest special district, by property tax share,
with territory in the territorial jurisdiction of the former
redevelopment agency, which is the type of special district that is
eligible to receive property tax revenues pursuant to Section 34188,
one member appointed by the county superintendent of education to
represent schools, one member appointed by the Chancellor of the
California Community Colleges to represent community college
districts, and one member representing employees of the former
redevelopment agency appointed by the mayor of the city where such an
appointment is subject to confirmation by the county board of
supervisors, to represent the largest number of former redevelopment
agency employees employed by the successor agency at that time.
(b) The Governor may appoint individuals to fill any oversight
board member position described in subdivision (a) that has not been
filled by May 15, 2012, or any member position that remains vacant
for more than 60 days.
(c) The oversight board may direct the staff of the successor
agency to perform work in furtherance of the oversight board's duties
and responsibilities under this part. The successor agency shall pay
for all of the costs of meetings of the oversight board and may
include such costs in its administrative budget. Oversight board
members shall serve without compensation or reimbursement for
expenses.
(d) Oversight board members shall have personal immunity from suit
for their actions taken within the scope of their responsibilities
as oversight board members.
(e) A majority of the total membership of the oversight board
shall constitute a quorum for the transaction of business. A majority
vote of the total membership of the oversight board is required for
the oversight board to take action. The oversight board shall be
deemed to be a local entity for purposes of the Ralph M. Brown Act,
the California Public Records Act, and the Political Reform Act of
1974. All actions taken by the oversight board shall be adopted by
resolution.
(f) All notices required by law for proposed oversight board
actions shall also be posted on the successor agency's Internet Web
site or the oversight board's Internet Web site.
(g) Each member of an oversight board shall serve at the pleasure
of the entity that appointed such member.
(h) The Department of Finance may review an oversight board action
taken pursuant to this part. As such, all oversight board actions
shall not be effective for three business days, pending a request for
review by the department. Each oversight board shall designate an
official to whom the department may make such requests and who shall
provide the department with the telephone number and email contact
information for the purpose of communicating with the department
pursuant to this subdivision. In the event that the department
requests a review of a given oversight board action, it shall have 10
days from the date of its request to approve the oversight board
action or return it to the oversight board for reconsideration and
such oversight board action shall not be effective until approved by
the department. In the event that the department returns the
oversight board action to the oversight board for reconsideration,
the oversight board shall resubmit the modified action for department
approval and the modified oversight board action shall not become
effective until approved by the department.
(i) Oversight boards shall have fiduciary responsibilities to
holders of enforceable obligations and the taxing entities that
benefit from distributions of property tax and other revenues
pursuant to Section 34188. Further, the provisions of Division 4
(commencing with Section 1000) of the Government Code shall apply to
oversight boards. Notwithstanding Section 1099 of the Government
Code, or any other law, any individual may simultaneously be
appointed to up to five oversight boards and may hold an office in a
city, county, city and county, special district, school district, or
community college district.
(j) Commencing on and after July 1, 2016, in each county where
more than one oversight board was created by operation of the act
adding this part, there shall be only one oversight board appointed
as follows:
(1) One member may be appointed by the county board of
supervisors.
(2) One member may be appointed by the city selection committee
established pursuant to Section 50270 of the Government Code. In a
city and county, the mayor may appoint one member.
(3) One member may be appointed by the independent special
district selection committee established pursuant to Section 56332 of
the Government Code, for the types of special districts that are
eligible to receive property tax revenues pursuant to Section 34188.
(4) One member may be appointed by the county superintendent of
education to represent schools if the superintendent is elected. If
the county superintendent of education is appointed, then the
appointment made pursuant to this paragraph shall be made by the
county board of education.
(5) One member may be appointed by the Chancellor of the
California Community Colleges to represent community college
districts in the county.
(6) One member of the public may be appointed by the county board
of supervisors.
(7) One member may be appointed by the recognized employee
organization representing the largest number of successor agency
employees in the county.
(k) The Governor may appoint individuals to fill any oversight
board member position described in subdivision (j) that has not been
filled by July 15, 2016, or any member position that remains vacant
for more than 60 days.
(l) Commencing on and after July 1, 2016, in each county where
only one oversight board was created by operation of the act adding
this part, then there will be no change to the composition of that
oversight board as a result of the operation of subdivision (b).
(m) Any oversight board for a given successor agency shall cease
to exist when all of the indebtedness of the dissolved redevelopment
agency has been repaid.
SEC. 6. Section 34180 of the Health and Safety Code is amended to
read:
34180. All of the following successor agency actions shall first
be approved by the oversight board:
(a) The establishment of new repayment terms for outstanding loans
where the terms have not been specified prior to the date of this
part.
(b) Refunding of outstanding bonds or other debt of the former
redevelopment agency by successor agencies in order to provide for
savings or to finance debt service spikes; provided, however, that no
additional debt is created and debt service is not accelerated.
(c) Entering into a financing agreement, including the issuance of
bonds, to fund required payments under an enforceable obligation
that exceed the amount of property tax revenue available to the
successor agency during the payment period. This subdivision shall
not be deemed to authorize a successor agency to create an additional
enforceable obligation, as defined by this part, other than for
necessary financing costs.
(d) Setting aside of amounts in reserves as required by
indentures, trust indentures, or similar documents governing the
issuance of outstanding redevelopment agency bonds.
(e) Merging of project areas.
(f) Continuing the acceptance of federal or state grants, or other
forms of financial assistance from either public or private sources,
where assistance is conditioned upon the provision of matching
funds, by the successor entity as successor to the former
redevelopment agency, in an amount greater than 5 percent of the
total grant amount.
(g) (1) If a city, county, or city and county wishes to retain any
properties or other assets for future redevelopment activities,
funded from its own funds and under its own auspices, it must reach a
compensation agreement with the other taxing entities to provide
payments to them in proportion to their shares of the base property
tax, as determined pursuant to Section 34188, for the value of the
property retained.
(2) If no other agreement is reached on valuation of the retained
assets, the value will be the fair market value as of the 2011
property tax lien date as determined by the county assessor.
(h) Establishment of the Recognized Obligation Payment Schedule.
(i) A request by the successor agency to enter into an agreement
with the city, county, or city and county that formed the
redevelopment agency that it is succeeding.
(j) A request by a successor agency or taxing entity to pledge, or
to enter into an agreement for the pledge of, property tax revenues
pursuant to subdivision (b) of Section 34178.
(k) A loan between a city, county, or city and county and a
redevelopment agency as an enforceable obligation pursuant to
subparagraph (C) of paragraph (2) of subdivision (d) of Section
34171, provided that the oversight board makes a finding that the
loan was for legitimate redevelopment purposes and conditions its
approval on the loan being 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.
(l) The approval of temporary increases in the administrative cost
allowance to carry out the requirements of an enforceable
obligation, to cover litigation costs, or to maintain and preserve
the value of assets while in the possession of the successor agency.
SEC. 7. Section 34181 of the Health and Safety Code is amended to
read:
34181. The oversight board shall direct the successor agency to
do all of the following:
(a) Compile a complete inventory of existing real property assets
of the former redevelopment agency, by project area. The inventory
shall include general categories of real property assets, the purpose
for which they were originally acquired, the original purchase price
of each asset and the estimated current market value. Prior to the
disposal of any real property asset, the oversight board shall
receive and review the inventory compiled by the successor agency,
and adopt a policy or strategy for the disposal or transfer of such
assets consistent with the requirements of subdivision (b).
(b) Dispose of all assets and properties of the former
redevelopment agency that were funded by tax increment revenues of
the dissolved redevelopment agency , other than those
transferred pursuant to subdivision (d) ; provided, however,
that the oversight board may instead direct the successor agency to
transfer ownership of those assets that were constructed and used for
a governmental purpose, such as roads, school buildings, parks, and
fire stations, or are integral to the operation of a governmental
purpose asset, such as a parking facility, to the appropriate public
jurisdiction pursuant to existing agreements, if any, relating to the
construction or use of such an asset. Any compensation to be
provided to the successor agency for the transfer of the asset shall
be governed by agreements, if any, relating to the construction or
use of that asset. Disposal shall be done in an expeditious but
orderly manner that preserves the value of the asset.
(c) Cease performance in connection with and terminate all
existing agreements that do not qualify as enforceable obligations.
(d) Transfer housing responsibilities and all rights, powers,
assets, liabilities, duties, and obligations, excluding
enforceable obligations of the successor agency, but including
any amounts on deposit in the Low and Moderate Income Housing Fund to
the appropriate entity pursuant to Section 34176.
(e) Terminate any agreement, between the dissolved redevelopment
agency and any public entity located in the same county, obligating
the redevelopment agency to provide funding for any debt service
obligations of the public entity or for the construction or operation
of facilities owned or operated by such public entity, in any
instance where the oversight board has found that early termination
would be in the best interests of the taxing entities.
(f) Determine whether any contracts, agreements, or other
arrangements between the dissolved redevelopment agency and any
private parties should be terminated or renegotiated to reduce
liabilities and increase net revenues to the taxing entities, and
present proposed termination or amendment agreements to the oversight
board for its approval. The board may approve any amendments to or
early termination of such agreements where it finds that amendments
or early termination would be in the best interests of the taxing
entities.
SEC. 8. Section 34182 of the Health and Safety Code is amended to
read:
34182. (a) (1) The county auditor-controller shall conduct or
cause to be conducted an agreed-upon procedures audit of each
redevelopment agency in the county that is subject to this part, to
be completed by July 1, 2012.
(2) The purpose of the audits shall be to establish each
redevelopment agency's assets and liabilities, to document and
determine each redevelopment agency's passthrough payment obligations
to other taxing agencies, and to document and determine both the
amount and the terms of any indebtedness incurred by the
redevelopment agency and certify the initial Recognized Obligation
Payment Schedule.
(3) The county auditor-controller may charge the Redevelopment
Property Tax Trust Fund for any costs incurred by the county
auditor-controller pursuant to this part.
(b) By July 15, 2012, the county auditor-controller shall provide
the Controller's office a copy of all audits performed pursuant to
this section. The county auditor-controller shall maintain a copy of
all documentation and working papers for use by the Controller.
(c) (1) The county auditor-controller shall determine the amount
of property taxes that would have been allocated to each
redevelopment agency in the county had the redevelopment agency not
been dissolved pursuant to the operation of the act adding this part.
These amounts are deemed property tax revenues within the meaning of
subdivision (a) of Section 1 of Article XIII A of the California
Constitution and are available for allocation and distribution in
accordance with the provisions of the act adding this part. The
county auditor-controller shall calculate the property tax revenues
using current assessed values on the last equalized roll on August
20, pursuant to Section 2052 of the Revenue and Taxation Code, and
pursuant to statutory formulas or contractual agreements with other
taxing agencies, as of the effective date of this section, and shall
deposit that amount along with unitary and supplemental tax increment
due to the former redevelopment agency in the Redevelopment Property
Tax Trust Fund.
(2) Each county auditor-controller shall administer the
Redevelopment Property Tax Trust Fund for the benefit of the holders
of former redevelopment agency enforceable obligations and the taxing
entities that receive passthrough payments and distributions of
property taxes pursuant to this part.
(3) In connection with the allocation and distribution by the
county auditor-controller of property tax revenues deposited in the
Redevelopment Property Tax Trust Fund, in compliance with this part,
the county auditor-controller shall prepare estimates of amounts to
be allocated and distributed, and provide those estimates to both the
entities receiving the distributions and the Department of Finance,
no later than November 1 and May 1 of each year.
(4) Each county auditor-controller shall disburse proceeds of
asset sales or reserve balances, which have been received from the
successor entities pursuant to Sections 34177 and 34187, to the
taxing entities. In making such a distribution, the county
auditor-controller shall utilize the same methodology for allocation
and distribution of property tax revenues provided in Section 34188.
(d) By October 1, 2012, the county auditor-controller shall report
the following information to the Controller's office and the
Director of Finance:
(1) The sums of property tax revenues remitted to the
Redevelopment Property Tax Trust Fund related to each former
redevelopment agency.
(2) The sums of property tax revenues remitted to each agency
under paragraph (1) of subdivision (a) of Section 34183.
(3) The sums of property tax revenues remitted to each successor
agency pursuant to paragraph (2) of subdivision (a) of Section 34183.
(4) The sums of property tax revenues paid to each successor
agency pursuant to paragraph (3) of subdivision (a) of Section 34183.
(5) The sums paid to each city, county, and special district, and
the total amount allocated for schools pursuant to paragraph (4) of
subdivision (a) of Section 34183.
(6) Any amounts deducted from other distributions pursuant to
subdivision (b) of Section 34183.
(e) A county auditor-controller may charge the Redevelopment
Property Tax Trust Fund for the costs of administering the provisions
of this part.
(f) The Controller may audit and review any county
auditor-controller action taken pursuant to the act adding this part.
As such, all county auditor-controller actions shall not be
effective for three business days, pending a request for review by
the Controller. In the event that the Controller requests a review of
a given county auditor-controller action, he or she shall have 10
days from the date of his or her request to approve the county
auditor-controller's action or return it to the county
auditor-controller for reconsideration and such county
auditor-controller action shall not be effective until approved by
the Controller. In the event that the Controller returns the county
auditor-controller's action to the county auditor-controller for
reconsideration, the county auditor-controller must resubmit the
modified action for Controller approval and such modified county
auditor-controller action shall not become effective until approved
by the Controller.
SEC. 9. Section 34183 of the Health and Safety Code is amended to
read:
34183. (a) Notwithstanding any other law, from February 1, 2012,
to July 1, 2012, and for each fiscal year thereafter, the county
auditor-controller shall, after deducting administrative costs
allowed under Section 34182 and Section 95.3 of the Revenue and
Taxation Code, allocate moneys in each Redevelopment Property Tax
Trust Fund as follows:
(1) Subject to any prior deductions required by subdivision (b),
first, the county auditor-controller shall remit from the
Redevelopment Property Tax Trust Fund to each local agency and school
entity an amount of property tax revenues in an amount equal to that
which would have been received under Section 33401, 33492.140,
33607, 33607.5, 33607.7, or 33676, as those sections read on January
1, 2011, or pursuant to any passthrough agreement between a
redevelopment agency and a taxing jurisdiction that was entered into
prior to January 1, 1994, that would be in force during that fiscal
year, had the redevelopment agency existed at that time. The amount
of the payments made pursuant to this paragraph shall be calculated
solely on the basis of passthrough payment obligations, existing
prior to the effective date of this part and continuing as
obligations of successor entities, shall occur no later than May 16,
2012, and no later than June 1, 2012, and each January 16 and June 1
thereafter. Notwithstanding subdivision (e) of Section 33670, that
portion of the taxes in excess of the amount identified in
subdivision (a) of Section 33670, which are attributable to a tax
rate levied by a taxing agency for the purpose of producing revenues
in an amount sufficient to make annual repayments of the principal
of, and the interest on, any bonded indebtedness for the acquisition
or improvement of real property shall be allocated to, and when
collected shall be paid into, the fund of that taxing agency.
(2) (A) Second, on May 16, 2012, and June 1, 2012, and each
January 16 and June 1 thereafter, to each successor agency for
payments listed in its Recognized Obligation Payment Schedule for the
six-month fiscal period beginning January 1, 2012, or July 1, 2012,
and each January 16 and June 1 thereafter, in the following order of
priority:
(i) Debt service payments scheduled to be made for tax allocation
bonds.
(ii) Payments scheduled to be made on revenue bonds, but only to
the extent the revenues pledged for them are insufficient to make the
payments and only where the agency's tax increment revenues were
also pledged for the repayment of the bonds.
(iii) Payments scheduled for other debts and obligations listed in
the Recognized Obligation Payment Schedule that are required to be
paid from former tax increment revenue.
(B) For purposes of allocations made pursuant to this paragraph,
the auditor-controller shall reserve additional funds in the
Redevelopment Property Tax Trust Fund at the time of the January 16
allocation, if necessary, to cover payments made in the second half
of the calendar year, as described in the Recognized Obligation
Payment Schedule, that are in excess of the amounts anticipated to be
deposited in the Redevelopment Property Tax Trust Fund from the
allocation that is received in May or June.
(3) Third, on May 16, 2012, and June 1, 2012, and each January 16
and June 1 thereafter, to each successor agency for the
administrative cost allowance, as defined in Section 34171, for
administrative costs set forth in an approved administrative budget
for those payments required to be paid from former tax increment
revenues.
(4) Fourth, on May 16, 2012, and June 1, 2012, and each January 16
and June 1 thereafter, any moneys remaining in the Redevelopment
Property Tax Trust Fund after the payments and transfers authorized
by paragraphs (1) to (3), inclusive, shall be distributed to local
agencies and school entities in accordance with Section 34188.
(b) If the successor agency reports, no later than April 1, 2012,
and May 1, 2012, and each December 1 and May 1 thereafter, to the
county auditor-controller that the total amount available to the
successor agency from the Redevelopment Property Tax Trust Fund
allocation to that successor agency's Redevelopment Obligation
Retirement Fund, from other funds transferred from each redevelopment
agency, and from funds that have or will become available through
asset sales and all redevelopment operations, are insufficient to
fund the payments required by paragraphs (1) to (3), inclusive, of
subdivision (a) in the next six-month fiscal period, the county
auditor-controller shall notify the Controller and the Department of
Finance no later than 10 days from the date of that notification. The
county auditor-controller shall verify whether the successor agency
will have sufficient funds from which to service debts according to
the Recognized Obligation Payment Schedule and shall report the
findings to the Controller. If the Controller concurs that there are
insufficient funds to pay required debt service, the amount of the
deficiency shall be deducted first from the amount remaining to be
distributed to taxing entities pursuant to paragraph (4), and if that
amount is exhausted, from amounts available for distribution for
administrative costs in paragraph (3). If an agency, pursuant to the
provisions of Section 33492.15, 33492.72, 33607.5, 33671.5, 33681.15,
or 33688, made passthrough payment obligations subordinate to debt
service payments required for enforceable obligations, funds for
servicing bond debt may be deducted from the amounts for passthrough
payments under paragraph (1), as provided in those sections, but only
to the extent that the amounts remaining to be distributed to taxing
entities pursuant to paragraph (4) and the amounts available for
distribution for administrative costs in paragraph (3) have all been
exhausted.
(c) The county treasurer may loan any funds from the county
treasury that are necessary to ensure prompt payments of
redevelopment agency debts.
(d) The Controller may recover the costs of audit and oversight
required under this part from the Redevelopment Property Tax Trust
Fund by presenting an invoice therefor to the county
auditor-controller who shall set aside sufficient funds for and
disburse the claimed amounts prior to making the next distributions
to the taxing jurisdictions pursuant to Section 34188. Subject to the
approval of the Director of Finance, the budget of the Controller
may be augmented to reflect the reimbursement, pursuant to Section
28.00 of the Budget Act.
SEC. 10. Section 34187 of the Health and Safety Code is amended to
read:
34187. Commencing May 1, 2012, whenever a recognized obligation
that had been identified in the Recognized Payment Obligation
Schedule is paid off or retired, either through early payment or
payment at maturity, the county auditor-controller shall distribute
to the taxing entities, in accordance with the provisions of the
Revenue and Taxation Code, all property tax revenues that were
associated with the payment of the recognized obligation to the
extent not currently required for the payment of other recognized
obligations.
SEC. 11. Section 34189 of the Health and Safety Code is amended to
read:
34189. (a) Commencing on the effective date of this part, all
provisions of the Community Redevelopment Law that depend on the
allocation of tax increment to redevelopment agencies, including, but
not limited to, Sections 33445, 33640, 33641, 33645, and subdivision
(b) of Section 33670, shall be inoperative.
(b) To the extent that a provision of Part 1 (commencing with
Section 33000), Part 1.5 (commencing with Section 34000), Part 1.6
(commencing with Section 34050), and Part 1.7 (commencing with
Section 34100) conflicts with this part, the provisions of this part
shall control. Further, if a provision of Part 1 (commencing with
Section 33000), Part 1.5 (commencing with Section 34000), Part 1.6
(commencing with Section 34050), or Part 1.7 (commencing with Section
34100) provides an authority that the act adding this part is
restricting or eliminating, the restriction and elimination
provisions of the act adding this part shall control.
(c) It is intended that the provisions of this part shall be read
in a manner as to avoid duplication of payments.
SEC. 12. This act is an urgency statute necessary for the
immediate preservation of the public peace, health, or safety within
the meaning of Article IV of the Constitution and shall go into
immediate effect. The facts constituting the necessity are:
In order to effectuate the orderly implementation of
responsibilities associated with dissolved redevelopment agencies, it
is necessary that this act take immediate effect.
