Bill Text: CA AB330 | 2011-2012 | Regular Session | Introduced
Bill Title: Local agencies: redevelopment.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2012-02-01 - Died pursuant to Art. IV, Sec. 10(c) of the Constitution. From committee: Filed with the Chief Clerk pursuant to Joint Rule 56. [AB330 Detail]
Download: California-2011-AB330-Introduced.html
BILL NUMBER: AB 330 INTRODUCED
BILL TEXT
INTRODUCED BY Assembly Member Norby
FEBRUARY 10, 2011
An act to amend Section 33080.2 of, and to add Sections 33080.9,
33080.10, 33080.11, and 33080.12 to, the Health and Safety Code,
relating to redevelopment.
LEGISLATIVE COUNSEL'S DIGEST
AB 330, as introduced, Norby. Local agencies: redevelopment.
The Community Redevelopment Law requires every redevelopment
agency to present an annual report to its legislative body that
includes an independent financial audit report for the previous
fiscal year and to inform the legislative body of major audit
violations. The failure to correct the major violations may result in
the filing of an action by the Attorney General. The Department of
Housing and Community Development may examine the records of
redevelopment agencies.
This bill would establish a specified procedure by which the
department, the Attorney General, and the courts would handle major
audit violations. The bill also would authorize the Controller to
conduct quality control reviews of independent financial audit
reports to the extent it is feasible to do so within existing
budgetary resources, and refer suspected violations to the California
Board of Accountancy, as provided.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 33080.2 of the Health and Safety Code is
amended to read:
33080.2. (a) When the agency presents the annual report to the
legislative body pursuant to Section 33080.1, the agency shall inform
the legislative body of any major audit
violations of this part based on the independent financial audit
report or an audit or investigation conducted by the department
. The agency shall inform the legislative body that the failure
to correct a major audit violation of this part may result in the
filing of an action by the Attorney General pursuant to Section
33080.8.
(b) The legislative body shall review any report submitted
pursuant to Section 33080.1 and take any action it deems appropriate
on that report no later than the first meeting of the legislative
body occurring more than 21 days from the receipt of the report.
SEC. 2. Section 33080.9 is added to the Health and Safety Code, to
read:
33080.9. (a) (1) The department shall forward to the Attorney
General and the Controller a copy of any audit or investigation of a
redevelopment agency conducted pursuant to Section 50464.
(2) On or before April 1 of each year, the department shall
determine for all audits and investigations conducted the previous
year, including those audits and investigations conducted pursuant to
Section 50464, whether an audit or investigation contains major
audit violations, as defined in subdivision (j) of Section 33080.8.
(b) On or before June 1 of each year, the department shall
determine for each major audit violation identified pursuant to
subdivision (a) if the agency has corrected the major audit
violation. Before making this determination, the department shall
consult with each affected agency. In making this determination, the
department may request and shall receive the prompt assistance of
public officials and public agencies, including, but not limited to,
the affected agencies, counties, and cities. If the department
determines an agency has not corrected the major audit violation, the
department shall send a list of those agencies, their major audit
violations, all relevant documentation, and the affidavits required
pursuant to subdivision (e) to the Attorney General for any action
pursuant to this section.
(c) For each agency the department refers to the Attorney General
pursuant to subdivision (b), the department shall notify the agency
and its legislative body that the agency was on the list sent to the
Attorney General. The notice shall inform the agency and its
legislative body of the duties imposed pursuant to Section 33080.2.
(d) The Attorney General shall determine whether to file an action
to compel the agency's compliance with this article within 45 days
of receiving notice from the department regarding major audit
violations. Any action filed pursuant to this section shall be
commenced in the County of Sacramento. The time limit for the
Attorney General to make this determination is directory and not
mandatory.
(e) Any action shall be accompanied by the affidavit or affidavits
setting forth the facts that demonstrate a likelihood of success on
the merits of the claim that the agency has a major audit violation.
The affidavit also shall certify that the agency and its legislative
body were notified of the action no less than 10 days prior to the
date on which the action was filed. The agency shall file a response
to any action filed by the Attorney General pursuant to this section
within 15 days of service.
(f) Nothing in this section shall be construed to permit the
department to initiate or settle litigation, or to resolve any
departmental audit or investigation in a manner contrary to law.
SEC. 3. Section 33080.10 is added to the Health and Safety Code,
to read:
33080.10. In an action to compel an agency's compliance with this
article pursuant to Section 33080.9, all of the following apply:
(a) (1) On the earliest day that the business of the court will
permit, but no later than 45 days after the filing of an action, the
court shall conduct a hearing to determine if good cause exists for
believing the agency has a major audit violation, as defined in
subdivision (j) of Section 33080.8, and has not corrected the major
audit violation.
(2) If the court determines that no major audit violation exists
or that the agency had a major audit violation and has corrected the
major audit violation, the court shall dismiss the action.
(3) If the court determines there is good cause to believe the
agency had a major audit violation and has not corrected that major
audit violation, the court shall set a hearing on the matter within
60 days. The court also shall issue immediately an order that
prohibits the agency doing any of the following:
(A) Encumbering any funds or expending any money derived from any
source, other than a Low and Moderate Income Housing Fund, except to
pay the obligations designated in subparagraphs (A) to (G),
inclusive, of paragraph (1) of subdivision (e) of Section 33334.12.
(B) Adopting a redevelopment plan.
(C) Amending a redevelopment plan, except to correct the major
audit violation that is the subject of the action.
(D) Issuing, selling, offering for sale, or delivering any bonds
or any other evidence of indebtedness, except to increase, improve,
or preserve, or assist in the construction or rehabilitation of,
housing units that will be occupied by and affordable to persons or
families of extremely low, very low, low, or moderate income, in
accordance with this part.
(E) Incurring any indebtedness, except to increase, improve, or
preserve, or assist in the construction or rehabilitation of, housing
units that will be occupied by and affordable to persons or families
of extremely low, very low, low, or moderate income, in accordance
with this part.
(b) If a court finds, on the basis of the subsequent hearing set
pursuant to paragraph (3) of subdivision (a), that the agency has a
major audit violation and has not corrected the major audit
violation, the court shall order the agency to comply with this
article within 30 days and order the agency to forfeit to the state
no more than any of the following, as applicable:
(1) Two thousand dollars ($2,000) in the case of an agency with
total revenue in the prior year of at least one hundred thousand
dollars ($100,000) as reported in the Controller's annual financial
reports.
(2) Five thousand dollars ($5,000) in the case of an agency with
total revenue in the prior year of at least one hundred thousand
dollars ($100,000) but less than two hundred fifty thousand dollars
($250,000) as reported in the Controller's annual financial reports.
(3) Ten thousand dollars ($10,000) in the case of an agency with
total revenue in the prior year of at least two hundred fifty
thousand dollars ($250,000) as reported in the Controller's annual
financial reports.
(c) The order issued by the court pursuant to paragraph (3) of
subdivision (a) shall continue in effect until the court determines
the agency has corrected the major audit violation. If the court
determines that the agency has corrected the major audit violation,
the court may dissolve its order at any time.
(d) An action filed pursuant to this section is in addition to any
other remedy and is not an exclusive means to compel compliance.
This section is not intended to preclude an action to compel
compliance with this article by any other interested party or
resident of the jurisdiction.
SEC. 4. Section 33080.11 is added to the Health and Safety Code,
to read:
33080.11. (a) The Controller may conduct quality control reviews
of independent financial audit reports required by Section 33080.1 to
the extent it is feasible to do so within existing budgetary
resources. The Controller shall communicate the results of his or her
reviews to the independent auditor and the agency for which the
audit was conducted, and shall review his or her findings with the
independent auditor.
(b) If the quality control review indicates the audit was
conducted in a manner that may constitute unprofessional conduct, as
defined in Section 5100 of the Business and Professions Code,
including, but not limited to, gross negligence resulting in a
material misstatement in the audit, the Controller shall refer the
case to the California Board of Accountancy. If the California Board
of Accountancy determines that the independent auditor conducted an
audit in an unprofessional manner, the independent auditor is
prohibited from performing any redevelopment agency audit for a
period of three years, in addition to any other penalties the
California Board of Accountancy may impose.
SEC. 5. Section 33080.12 is added to the Health and Safety Code,
to read:
33080.12. (a) Whenever the Controller determines through two
consecutive quality control reviews, pursuant to Section 33080.11,
that audits performed by an independent auditor pursuant to Section
33080.1 were not performed in substantial conformity with provisions
of the audit and report guidelines adopted pursuant to Section
33080.3, the Controller shall notify in writing the independent
auditor and the California Board of Accountancy. If the independent
auditor does not file an appeal in writing to the California Board of
Accountancy within 30 calendar days after receipt of the Controller'
s notification, the Controller's determination under this section
shall be final.
(b) If an appeal is filed with the California Board of
Accountancy, the board shall complete an investigation of the appeal.
On the basis of the investigation, the board may do any of the
following:
(1) Find the Controller's determination should not be upheld and
has no effect.
(2) Schedule the appeal for a hearing.
(c) If the Controller's determination pursuant to subdivision (a)
becomes final, the independent auditor shall be ineligible to conduct
audits pursuant to Section 33080.1 for a period of three years, or,
in the event of an appeal, for any period and subject to conditions
that may be ordered by the California Board of Accountancy. No later
than March 1 following the date on which the Controller's
determination becomes final, the Controller shall notify each agency
of those independent auditors determined to be ineligible under this
section or Section 33080.11. Agencies shall not use the audit
services of an independent auditor ineligible under this section.
(d) For the purposes of this section, "independent auditor" shall
mean any person or firm entering into a contract to conduct an audit
under Section 33080.1.
(e) This section shall not preclude the California Board of
Accountancy from taking any disciplinary action it deems appropriate
under other provisions of law.
