Bill Text: CA SB1129 | 2013-2014 | Regular Session | Enrolled
Bill Title: Redevelopment: successor agencies to redevelopment agencies.
Spectrum: Partisan Bill (Democrat 4-0)
Status: (Vetoed) 2014-09-29 - In Senate. Consideration of Governor's veto pending. [SB1129 Detail]
Download: California-2013-SB1129-Enrolled.html
BILL NUMBER: SB 1129 ENROLLED
BILL TEXT
PASSED THE SENATE AUGUST 29, 2014
PASSED THE ASSEMBLY AUGUST 27, 2014
AMENDED IN ASSEMBLY AUGUST 22, 2014
AMENDED IN ASSEMBLY AUGUST 20, 2014
AMENDED IN SENATE MAY 27, 2014
AMENDED IN SENATE APRIL 22, 2014
INTRODUCED BY Senator Steinberg
(Principal coauthors: Senators Corbett and Liu)
(Principal coauthor: Assembly Member Gatto)
FEBRUARY 19, 2014
An act to amend Sections 33130, 34167.5, 34171, 34177, 34177.5,
34179, 34180, 34191.4, and 34191.5 of the Health and Safety Code,
relating to redevelopment.
LEGISLATIVE COUNSEL'S DIGEST
SB 1129, Steinberg. Redevelopment: successor agencies to
redevelopment agencies.
(1) Existing law dissolved redevelopment agencies and community
development agencies as of February 1, 2012, and provides for the
designation of successor agencies to wind down the affairs of the
dissolved redevelopment agencies, subject to review by oversight
boards, and to, among other things, make payments due for enforceable
obligations and to perform obligations required pursuant to any
enforceable obligation. Existing law requires the Department of
Finance to issue a finding of completion to a successor agency upon
confirmation by the county auditor-controller that specified payments
have been fully made by the successor agency. Existing law prohibits
a successor agency from entering into contracts with, incurring
obligations or making commitments to, any entity, as specified; or
from amending or modifying existing agreements, obligations, or
commitments with any entity, for any purpose. Existing law defines
"enforceable obligation" for these purposes to generally exclude any
agreements, contracts, or arrangements between the city, county, or
city and county that created the redevelopment agency and the former
redevelopment agency.
This bill would authorize a successor agency, if the successor
agency has received a finding of completion, to enter into, or amend
existing, contracts and agreements, or otherwise administer projects
in connection with enforceable obligations, if the contract,
agreement, or project will not commit new property tax funds or
otherwise adversely affect the flow of specified tax revenues or
payments to the taxing agencies, as specified.
The bill would specifically include within the definition of
"enforceable obligation" an agreement entered into by the
redevelopment agency prior to June 30, 2011, if the agreement relates
to state highway infrastructure improvements to which the
redevelopment agency committed funds pursuant to specified law.
(2) Existing law requires that loan agreements entered into
between the redevelopment agency and the city, county, or city and
county that created the redevelopment agency be deemed enforceable
obligations if the oversight board makes a specific finding. Existing
law requires that, if the loan is an enforceable obligation, the
accumulated interest on the remaining principal amount of the loan be
recalculated from origination at that interest rate earned by funds
deposited into the Local Agency Investment Fund and requires the loan
to be repaid in accordance with a defined schedule at an interest
rate not to exceed that interest rate.
This bill would revise those provisions to provide that any
accumulated interest on the remaining principal balance of the loan
be recalculated from origination using the interest rate earned by
funds deposited into the Local Agency Investment Fund in effect on
the date of loan origination, and as adjusted quarterly thereafter
and that the remaining balance of the loan and the accumulated
interest be repaid in accordance with a defined schedule at an
interest rate not to exceed that interest rate as the rate is
adjusted on a quarterly basis. This bill would state the Legislature'
s intent that these revisions be clarifying.
(3) Existing law requires a successor agency to prepare a
recognized obligation payment schedule, which sets forth the minimum
payment amounts and due dates of payments required by enforceable
obligations for each 6-month fiscal period, that is required to be
submitted to, and approved by, the oversight board, and submitted to
other entities, including the Department of Finance. Existing law
requires the Department of Finance to 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.
This bill would require the rejection of an enforceable obligation
from a recognized obligation payment schedule for a successor agency
that has received a finding of completion from the department to be
submitted to the oversight board for review and approval, and would
provide that the determination of the oversight board is final and
conclusive without further review by the department.
(4) Existing law provides that, if an enforceable obligation
provides for an irrevocable commitment of property tax revenue and
the allocation of those revenues is expected to occur over time, the
successor agency may petition the Department of Finance to provide
written confirmation that its determination of the enforceable
obligation as approved in a Recognized Obligation Payment Schedule is
final and conclusive, and reflects the department's approval of
subsequent payments made pursuant to the enforceable obligation.
This bill would require the Department of Finance to provide that
written confirmation within 45 days.
(5) Existing law requires a city, county, or city and county that
wishes to retain any properties or other assets for future
redevelopment activities, funded from its own funds and under its own
auspices, to reach a compensation agreement with the other taxing
entities to provide payments to them in proportion to their shares of
the base property tax for the value of the property retained, as
specified.
This bill would specify that these provisions do not apply to the
disposition of properties pursuant to a long-range property
management plan.
(6) Existing law requires the disposition of assets and properties
of the former redevelopment agency as directed by the oversight
board, as specified, and suspends these requirements until the
Department of Finance has approved a long-range property management
plan, as specified. Upon approval of a long-range property management
plan, the plan governs and supersedes, all other provisions relating
to the disposition and use of the real property assets of the former
redevelopment agency. Existing law requires the property of a former
redevelopment agency to be disposed of according to law if the
department has not approved a long-range property management plan by
January 1, 2016.
This bill would prohibit the department from requiring
compensation agreements as part of the approval of a long-range
property management plan and would specify the criteria the
department may consider in approving a long-range property management
plan. The bill would require the department to approve long-range
property management plans as expeditiously as possible. This bill
would also provide that actions relating to the disposition of
property after approval of a long-range property management plan do
not require review by the department.
(7) Existing law requires the Controller to review the activities
of redevelopment agencies in the state to determine whether an asset
transfer has occurred after January 1, 2011, between the city or
county, or city and county that created a redevelopment agency or any
other public agency, and the redevelopment agency.
This bill would require the review to be completed no later than
January 1, 2016.
(8) Existing law prohibits an agency or community officer or
employee who is required to participate in the formulation of, or to
approve plans or policies for, the redevelopment of a project area
from acquiring any interest in any property included within a project
area within the community.
This bill would provide that an agency or community officer or
employee is not prohibited from acquiring an interest in property
within a former redevelopment project area of a dissolved
redevelopment agency, as specified.
(9) Existing law requires each successor agency to have an
oversight board composed of 7 members and requires each member to be
appointed by a specified authority.
This bill would allow each appointing authority to appoint an
alternate representative to serve on the oversight board as may be
necessary. This bill would provide that the alternative
representative has the same participatory and voting rights as all
other attending members of the oversight board, and would require the
successor agency to promptly notify the Department of Finance
regarding the appointment of any alternate representative.
(10) This bill would incorporate additional changes to Section
34180 of the Health and Safety Code proposed by SB 1404 that would
become operative only if this bill and SB 1404 are both chaptered and
this bill is chaptered last.
(11) This bill would incorporate additional changes to Section
34191.4 of the Health and Safety Code proposed by AB 2493 that would
become operative only if this bill and AB 2493 are both chaptered and
this bill is chaptered last.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 33130 of the Health and Safety Code is amended
to read:
33130. (a) No agency or community officer or employee who in the
course of his or her duties is required to participate in the
formulation of, or to approve plans or policies for, the
redevelopment of a project area shall acquire any interest in any
property included within a project area within the community. If any
such officer or employee owns or has any direct or indirect financial
interest in property included within a project area, that officer or
employee shall immediately make a written disclosure of that
financial interest to the agency and the legislative body and the
disclosure shall be entered on the minutes of the agency and the
legislative body. Failure to make the disclosure required by this
subdivision constitutes misconduct in office.
(b) Subdivision (a) does not prohibit any agency or community
officer or employee from acquiring an interest in property within a
former redevelopment project area of a redevelopment agency dissolved
pursuant to Part 1.85 (commencing with Section 34170).
(c) Subdivision (a) does not prohibit any agency or community
officer or employee from acquiring an interest in property within the
project area for the purpose of participating as an owner or
reentering into business pursuant to this part if that officer or
employee has owned a substantially equal interest as that being
acquired for the three years immediately preceding the selection of
the project area.
(d) A rental agreement or lease of property which meets all of the
following conditions is not an interest in property for purposes of
subdivision (a):
(1) The rental or lease agreement contains terms that are
substantially equivalent to the terms of a rental or lease agreement
available to any member of the general public for comparable property
in the project area.
(2) The rental or lease agreement includes a provision which
prohibits any subletting, sublease, or other assignment at a rate in
excess of the rate in the original rental or lease agreement.
(3) The property which is subject to the rental or lease agreement
is used in the pursuit of the principal business, occupation, or
profession of the officer or employee.
(4) The agency or community officer or employee who obtains the
rental or lease agreement immediately makes a written disclosure of
that fact to the agency and the legislative body.
SEC. 2. Section 34167.5 of the Health and Safety Code is amended
to read:
34167.5. Commencing on the effective date of the act adding this
part, the Controller shall review the activities of redevelopment
agencies in the state to determine whether an asset transfer has
occurred after January 1, 2011, between the city or county, or city
and county that created a redevelopment agency or any other public
agency, and the redevelopment agency. The review required by this
section shall be completed no later than January 1, 2016. If such an
asset transfer did occur during that period and the government agency
that received the assets is not contractually committed to a third
party for the expenditure or encumbrance of those assets, to the
extent not prohibited by state and federal law, the Controller shall
order the available assets to be returned to the redevelopment agency
or, on or after October 1, 2011, to the successor agency, if a
successor agency is established pursuant to Part 1.85 (commencing
with Section 34170). Upon receiving that order from the Controller,
an affected local agency shall, as soon as practicable, reverse the
transfer and return the applicable assets to the redevelopment agency
or, on or after October 1, 2011, to the successor agency, if a
successor agency is established pursuant to Part 1.85 (commencing
with Section 34170). The Legislature hereby finds that a transfer of
assets by a redevelopment agency during the period covered in this
section is deemed not to be in the furtherance of the Community
Redevelopment Law and is thereby unauthorized.
SEC. 3. 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
successor agency on the Recognized Obligation Payment Schedule
covering the period January 1, 2012, through June 30, 2012, 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; provided, however, that the
amount shall not be less than two hundred fifty thousand dollars
($250,000), unless the oversight board reduces this amount, for any
fiscal year or such lesser amount as agreed to by the successor
agency. However, the allowance amount shall exclude, and shall not
apply to, any administrative costs that can be paid from bond
proceeds or from sources other than property tax. Administrative cost
allowances shall exclude any litigation expenses related to assets
or obligations, settlements and judgments, and the costs of
maintaining assets prior to disposition. 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
shall not constitute 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 Chapter 10.5 (commencing with Section 5850) of Division 6 of Title
1 of the Government Code, including the required 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. A reserve may
be held when required by the bond indenture or when the next property
tax allocation will be insufficient to pay all obligations due under
the provisions of the bond for the next payment due in the following
half of the calendar year.
(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. Titles of or
headings used on or in a document shall not be relevant in
determining the existence of an enforceable obligation.
(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 concerning litigation
expenses related to assets or obligations, settlements and judgments,
and the costs of maintaining assets prior to disposition, and
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 transferred to the Low and
Moderate Income Housing Asset Fund established pursuant to
subdivision (d) of Section 34176 as a housing asset and shall be used
in a manner consistent with the affordable housing requirements of
the Community Redevelopment Law (Part 1 (commencing with Section
33000)).
(2) For purposes of 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 (A) at the time of issuance, but in no event later than December
31, 2010, of indebtedness obligations, and (B) solely for the
purpose of securing or repaying those indebtedness obligations may be
deemed enforceable obligations for purposes of this part.
Notwithstanding this paragraph, 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, may be deemed to be enforceable obligations.
Notwithstanding this paragraph, an agreement entered into by the
redevelopment agency prior to June 30, 2011, is an enforceable
obligation if the agreement relates to state highway infrastructure
improvements to which the redevelopment agency committed funds
pursuant to Section 33445.
(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
as provided in subdivision (m) 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 successor entity to the former
redevelopment agency as described 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.
(l) "Property taxes" include all property tax revenues, including
those from unitary and supplemental and roll corrections applicable
to tax increment.
(m) "Department" means the Department of Finance unless the
context clearly refers to another state agency.
(n) "Sponsoring entity" means the city, county, or city and
county, or other entity that authorized the creation of each
redevelopment agency.
(o) "Final judicial determination" means a final judicial
determination made by any state court that is not appealed, or by a
court of appellate jurisdiction that is not further appealed, in an
action by any party.
(p) From July 1, 2014, to July 1, 2018, inclusive, "housing entity
administrative cost allowance" means an amount of up to 1 percent of
the property tax allocated to the Redevelopment Obligation
Retirement Fund on behalf of the successor agency for each applicable
fiscal year, but not less than one hundred fifty thousand dollars
($150,000) per fiscal year.
(1) If a local housing authority assumed the housing functions of
the former redevelopment agency pursuant to paragraph (2) or (3) of
subdivision (b) of Section 34176, then the housing entity
administrative cost allowance shall be listed by the successor agency
on the Recognized Obligation Payment Schedule. Upon approval of the
Recognized Obligation Payment Schedule by the oversight board and the
department, the housing entity administrative cost allowance shall
be remitted by the successor agency on each January 2 and July 1 to
the local housing authority that assumed the housing functions of the
former redevelopment agency pursuant to paragraph (2) or (3) of
subdivision (b) of Section 34176.
(2) If there are insufficient moneys in the Redevelopment
Obligations Retirement Fund in a given fiscal year to make the
payment authorized by this subdivision, the unfunded amount may be
listed on each subsequent Recognized Obligation Payment Schedule
until it has been paid in full. In these cases the five-year time
limit on the payments shall not apply.
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 (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 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.
(5) Prior to the rejection of an enforceable obligation from a
recognized obligation payment schedule for a successor agency that
has received a finding of completion from the Department of Finance
under Section 34179.7, the Department of Finance shall submit the
proposed rejection to the oversight board for review and approval,
whose determination shall be final and conclusive without further
review by the Department of Finance.
(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.
SEC. 5. Section 34177.5 of the Health and Safety Code is amended
to read:
34177.5. (a) In addition to the powers granted to each successor
agency, and notwithstanding anything in the act adding this part,
including, but not limited to, Sections 34162 and 34189, a successor
agency shall have the authority, rights, and powers of the
redevelopment agency to which it succeeded solely for the following
purposes:
(1) For the purpose of issuing bonds or incurring other
indebtedness to refund the bonds or other indebtedness of its former
redevelopment agency or of the successor agency to provide savings to
the successor agency, provided that (A) the total interest cost to
maturity on the refunding bonds or other indebtedness plus the
principal amount of the refunding bonds or other indebtedness shall
not exceed the total remaining interest cost to maturity on the bonds
or other indebtedness to be refunded plus the remaining principal of
the bonds or other indebtedness to be refunded, and (B) the
principal amount of the refunding bonds or other indebtedness shall
not exceed the amount required to defease the refunded bonds or other
indebtedness, to establish customary debt service reserves, and to
pay related costs of issuance. If the foregoing conditions are
satisfied, the initial principal amount of the refunding bonds or
other indebtedness may be greater than the outstanding principal
amount of the bonds or other indebtedness to be refunded. The
successor agency may pledge to the refunding bonds or other
indebtedness the revenues pledged to the bonds or other indebtedness
being refunded, and that pledge, when made in connection with the
issuance of such refunding bonds or other indebtedness, shall have
the same lien priority as the pledge of the bonds or other
obligations to be refunded, and shall be valid, binding, and
enforceable in accordance with its terms.
(2) For the purpose of issuing bonds or other indebtedness to
finance debt service spikes, including balloon maturities, provided
that (A) the existing indebtedness is not accelerated, except to the
extent necessary to achieve substantially level debt service, and (B)
the principal amount of the bonds or other indebtedness shall not
exceed the amount required to finance the debt service spikes,
including establishing customary debt service reserves and paying
related costs of issuance.
(3) For the purpose of amending an existing enforceable obligation
under which the successor agency is obligated to reimburse a
political subdivision of the state for the payment of debt service on
a bond or other obligation of the political subdivision, or to pay
all or a portion of the debt service on the bond or other obligation
of the political subdivision to provide savings to the successor
agency, provided that (A) the enforceable obligation is amended in
connection with a refunding of the bonds or other obligations of the
political subdivision so that the enforceable obligation will apply
to the refunding bonds or other refunding indebtedness of the
political subdivision, (B) the total interest cost to maturity on the
refunding bonds or other indebtedness plus the principal amount of
the refunding bonds or other indebtedness shall not exceed the total
remaining interest cost to maturity on the bonds or other
indebtedness to be refunded plus the remaining principal of the bonds
or other indebtedness to be refunded, and (C) the principal amount
of the refunding bonds or other indebtedness shall not exceed the
amount required to defease the refunded bonds or other indebtedness,
to establish customary debt service reserves and to pay related costs
of issuance. The pledge set forth in that amended enforceable
obligation, when made in connection with the execution of the
amendment of the enforceable obligation, shall have the same lien
priority as the pledge in the enforceable obligation prior to its
amendment and shall be valid, binding, and enforceable in accordance
with its terms.
(4) For the purpose of issuing bonds or incurring other
indebtedness to make payments under enforceable obligations when the
enforceable obligations include the irrevocable pledge of property
tax increment, formerly tax increment revenues prior to the effective
date of this part, or other funds and the obligation to issue bonds
secured by that pledge. The successor agency may pledge to the bonds
or other indebtedness the property tax revenues and other funds
described in the enforceable obligation, and that pledge, when made
in connection with the issuance of the bonds or the incurring of
other indebtedness, shall be valid, binding, and enforceable in
accordance with its terms. This paragraph shall not be deemed to
authorize a successor agency to increase the amount of property tax
revenues pledged under an enforceable obligation or to pledge any
property tax revenue not already pledged pursuant to an enforceable
obligation. This paragraph does not constitute a change in, but is
declaratory of, the existing law.
(b) The refunding bonds authorized under this section may be
issued under the authority of Article 11 (commencing with Section
53580) of Chapter 3 of Part 1 of Division 2 of Title 5 of the
Government Code, and the refunding bonds may be sold at public or
private sale, or to a joint powers authority pursuant to the
Marks-Roos Local Bond Pooling Act of 1985 (Article 4 (commencing with
Section 6584) of Chapter 5 of Division 7 of Title 1 of the
Government Code).
(c) (1) Prior to incurring any bonds or other indebtedness
pursuant to this section, the successor agency may subordinate to the
bonds or other indebtedness the amount required to be paid to an
affected taxing entity pursuant to paragraph (1) of subdivision (a)
of Section 34183, provided that the affected taxing entity has
approved the subordinations pursuant to this subdivision.
(2) At the time the successor agency requests an affected taxing
entity to subordinate the amount to be paid to it, the successor
agency shall provide the affected taxing entity with substantial
evidence that sufficient funds will be available to pay both the debt
service on the bonds or other indebtedness and the payments required
by paragraph (1) of subdivision (a) of Section 34183, when due.
(3) Within 45 days after receipt of the agency's request, the
affected taxing entity shall approve or disapprove the request for
subordination. An affected taxing entity may disapprove a request for
subordination only if it finds, based upon substantial evidence,
that the successor agency will not be able to pay the debt service
payments and the amount required to be paid to the affected taxing
entity. If the affected taxing entity does not act within 45 days
after receipt of the agency's request, the request to subordinate
shall be deemed approved and shall be final and conclusive.
(d) An action may be brought pursuant to Chapter 9 (commencing
with Section 860) of Title 10 of Part 2 of the Code of Civil
Procedure to determine the validity of bonds or other obligations
authorized by this section, the pledge of revenues to those bonds or
other obligations authorized by this section, the legality and
validity of all proceedings theretofore taken and, as provided in the
resolution of the legislative body of the successor agency
authorizing the bonds or other obligations authorized by this
section, proposed to be taken for the authorization, execution,
issuance, sale, and delivery of the bonds or other obligations
authorized by this section, and for the payment of debt service on
the bonds or the payment of amounts under other obligations
authorized by this section. Subdivision (c) of Section 33501 shall
not apply to any such action. The Department of Finance shall be
notified of the filing of any action as an affected party.
(e) Notwithstanding any other law, including, but not limited to,
Section 33501, an action to challenge the issuance of bonds, the
incurrence of indebtedness, the amendment of an enforceable
obligation, or the execution of a financing agreement by a successor
agency shall be brought within 30 days after the date on which the
oversight board approves the resolution of the successor agency
approving the issuance of bonds, the incurrence of indebtedness, the
amendment of an enforceable obligation, or the execution of a
financing agreement authorized under this section.
(f) The actions authorized in this section shall be subject to the
approval of the oversight board, as provided in Section 34180.
Additionally, an oversight board may direct the successor agency to
commence any of the transactions described in subdivision (a) so long
as the successor agency is able to recover its related costs in
connection with the transaction. After a successor agency, with
approval of the oversight board, issues any bonds, incurs any
indebtedness, or executes an amended enforceable obligation pursuant
to subdivision (a), the oversight board shall not unilaterally
approve any amendments to or early termination of the bonds,
indebtedness, or enforceable obligation. If, under the authority
granted to it by subdivision (h) of Section 34179, the Department of
Finance either reviews and approves or fails to request review within
five business days of an oversight board approval of an action
authorized by this section, the scheduled payments on the bonds or
other indebtedness shall be listed in the Recognized Obligation
Payment Schedule and shall not be subject to further review and
approval by the department or the Controller. The department may
extend its review time to 60 days for actions authorized in this
section and may seek the assistance of the Treasurer in evaluating
proposed actions under this section.
(g) Any bonds, indebtedness, or amended enforceable obligation
authorized by this section shall be considered indebtedness incurred
by the dissolved redevelopment agency, with the same legal effect as
if the bonds, indebtedness, financing agreement, or amended
enforceable obligation had been issued, incurred, or entered into
prior to June 29, 2011, in full conformity with the applicable
provisions of the Community Redevelopment Law that existed prior to
that date, shall be included in the successor agency's Recognized
Obligation Payment Schedule, and shall be secured by a pledge of, and
lien on, and shall be repaid from moneys deposited from time to time
in the Redevelopment Property Tax Trust Fund established pursuant to
subdivision (c) of Section 34172, as provided in paragraph (2) of
subdivision (a) of Section 34183. Property tax revenues pledged to
any bonds, indebtedness, or amended enforceable obligations
authorized by this section are taxes allocated to the successor
agency pursuant to subdivision (b) of Section 33670 and Section 16 of
Article XVI of the California Constitution.
(h) The successor agency shall make diligent efforts to ensure
that the lowest long-term cost financing is obtained. The financing
shall not provide for any bullets or spikes and shall not use
variable rates. The successor agency shall make use of an independent
financial advisor in developing financing proposals and shall make
the work products of the financial advisor available to the
Department of Finance at its request.
(i) If an enforceable obligation provides for an irrevocable
commitment of property tax revenue and where allocation of such
revenues is expected to occur over time, the successor agency may
petition the Department of Finance to provide written confirmation
within 45 days that its determination of such enforceable obligation
as approved in a Recognized Obligation Payment Schedule is final and
conclusive, and reflects the department's approval of subsequent
payments made pursuant to the enforceable obligation. If the
confirmation is granted, then the department's review of such
payments in future Recognized Obligation Payment Schedules shall be
limited to confirming that they are required by the prior enforceable
obligation.
(j) The successor agency may request that the department provide a
written determination to waive the two-year statute of limitations
on an action to review the validity of the adoption or amendment of a
redevelopment plan pursuant to subdivision (c) of Section 33500 or
on any findings or determinations made by the agency pursuant to
subdivision (d) of Section 33500. The department at its discretion
may provide a waiver if it determines it is necessary for the agency
to fulfill an enforceable obligation.
SEC. 6. 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) (A) 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 of the type of special
district that is eligible to receive property tax revenues pursuant
to Section 34188.
(B) On or after the effective date of this subparagraph, the
county auditor-controller may determine which is the largest special
district for purposes of this section.
(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) If 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, if that 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 if that
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.
(11) Each appointing authority identified in this subdivision may,
but is not required to, appoint an alternate representative to serve
on the oversight board as may be necessary to attend any meeting of
the oversight board in the event that the appointing authority's
primary representative is unable to attend any meeting for any
reason. If the alternate representative attends any meeting in place
of the primary representative, the alternative representative shall
have the same participatory and voting rights as all other attending
members of the oversight board. The successor agency shall promptly
notify the department regarding the appointment of any alternate
representative to the oversight board.
(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 are protected by the immunities
applicable to public entities and public employees governed by Part 1
(commencing with Section 810) and Part 2 (commencing with Section
814) of Division 3.6 of Title 1 of the Government Code.
(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. Written notice and information about
all actions taken by an oversight board shall be provided to the
department by electronic means and in a manner of the department's
choosing. An action shall become effective five business days after
notice in the manner specified by the department is provided unless
the department requests a review. Each oversight board shall
designate an official to whom the department may make those 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. Except as otherwise provided
in this part, in the event that the department requests a review of
a given oversight board action, it shall have 40 days from the date
of its request to approve the oversight board action or return it to
the oversight board for reconsideration and the 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. If the department reviews a Recognized Obligation
Payment Schedule, the department may eliminate or modify any item on
that schedule prior to its approval. The county auditor-controller
shall reflect the actions of the department in determining the amount
of property tax revenues to allocate to the successor agency. The
department shall provide notice to the successor agency and the
county auditor-controller as to the reasons for its actions. To the
extent that an oversight board continues to dispute a determination
with the department, one or more future recognized obligation
schedules may reflect any resolution of that dispute. The department
may also agree to an amendment to a Recognized Obligation Payment
Schedule to reflect a resolution of a disputed item; however, this
shall not affect a past allocation of property tax or create a
liability for any affected taxing entity.
(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.
(n) An oversight board may direct a successor agency to provide
additional legal or financial advice than what was given by agency
staff.
(o) An oversight board is authorized to contract with the county
or other public or private agencies for administrative support.
(p) On matters within the purview of the oversight board,
decisions made by the oversight board supersede those made by the
successor agency or the staff of the successor agency.
SEC. 7. 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. An oversight board shall not have the authority to reestablish
loan agreements between the successor agency and the city, county, or
city and county that formed the redevelopment agency except as
provided in Chapter 9 (commencing with Section 34191.1).
(b) The issuance of bonds or other indebtedness or the pledge or
agreement for the pledge of property tax revenues (formerly tax
increment prior to the effective date of this part) pursuant to
subdivision (a) of Section 34177.5.
(c) Setting aside of amounts in reserves as required by
indentures, trust indentures, or similar documents governing the
issuance of outstanding redevelopment agency bonds.
(d) Merging of project areas.
(e) Continuing the acceptance of federal or state grants, or other
forms of financial assistance from either public or private sources,
if that 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.
(f) (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 an independent appraiser
approved by the oversight board.
(3) This subdivision does not apply to the disposition of
properties pursuant to a long-range property management plan.
(g) Establishment of the Recognized Obligation Payment Schedule.
(h) 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. An oversight board shall
not have the authority to reestablish loan agreements between the
successor agency and the city, county, or city and county that formed
the redevelopment agency except as provided in Chapter 9 (commencing
with Section 34191.1). Any actions to reestablish any other
agreements that are in furtherance of enforceable obligations, with
the city, county, or city and county that formed the redevelopment
agency are invalid until they are included in an approved and valid
Recognized Obligation Payment Schedule.
(i) 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.
(j) Any document submitted by a successor agency to an oversight
board for approval by any provision of this part shall also be
submitted to the county administrative officer, the county
auditor-controller, and the Department of Finance at the same time
that the successor agency submits the document to the oversight
board.
SEC. 7.5. 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. An oversight board shall not have the authority to reestablish
loan agreements between the successor agency and the city, county, or
city and county that formed the redevelopment agency except as
provided in Chapter 9 (commencing with Section 34191.1).
(b) The issuance of bonds or other indebtedness or the pledge or
agreement for the pledge of property tax revenues (formerly tax
increment prior to the effective date of this part) pursuant to
Section 33333.7 and subdivision (a) of Section 34177.5.
(c) Setting aside of amounts in reserves as required by
indentures, trust indentures, or similar documents governing the
issuance of outstanding redevelopment agency bonds.
(d) Merging of project areas.
(e) Continuing the acceptance of federal or state grants, or other
forms of financial assistance from either public or private sources,
if that 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.
(f) (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 an independent appraiser
approved by the oversight board.
(3) This subdivision does not apply to the disposition of
properties pursuant to a long-range property management plan.
(g) Establishment of the Recognized Obligation Payment Schedule.
(h) 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. An oversight board shall
not have the authority to reestablish loan agreements between the
successor agency and the city, county, or city and county that formed
the redevelopment agency except as provided in Chapter 9 (commencing
with Section 34191.1). Any actions to reestablish any other
agreements that are in furtherance of enforceable obligations, with
the city, county, or city and county that formed the redevelopment
agency are invalid until they are included in an approved and valid
Recognized Obligation Payment Schedule.
(i) 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.
(j) Any document submitted by a successor agency to an oversight
board for approval by any provision of this part shall also be
submitted to the county administrative officer, the county
auditor-controller, and the Department of Finance at the same time
that the successor agency submits the document to the oversight
board.
SEC. 8. Section 34191.4 of the Health and Safety Code is amended
to read:
34191.4. The following provisions shall apply to any successor
agency that has been issued a finding of completion by the Department
of Finance:
(a) All real property and interests in real property identified in
subparagraph (C) of paragraph (5) of subdivision (c) of Section
34179.5 shall be transferred to the Community Redevelopment Property
Trust Fund of the successor agency upon approval by the Department of
Finance of the long-range property management plan submitted by the
successor agency pursuant to subdivision (b) of Section 34191.5
unless that property is subject to the requirements of any existing
enforceable obligation.
(b) (1) Notwithstanding subdivision (d) of Section 34171, upon
application by the successor agency and approval by the oversight
board, loans made to a redevelopment agency by the city, county, or
city and county that created the redevelopment agency shall be deemed
to be enforceable obligations provided that the oversight board
makes a finding that the loans were for legitimate redevelopment
purposes.
(2) If the oversight board finds that a loan is an enforceable
obligation, the accumulated interest on the remaining principal
balance of the loan shall be recalculated from origination using the
interest rate earned by funds deposited into the Local Agency
Investment Fund in effect on the date of loan origination, and as
adjusted quarterly thereafter. The remaining balance of the loan and
the accumulated interest shall be repaid to the city, county, or city
and county in accordance with a defined schedule over a reasonable
term of years at an interest rate not to exceed the interest rate
earned by funds deposited into the Local Agency Investment Fund as
the rate is adjusted on a quarterly basis. The annual loan repayments
provided for in the recognized obligation payment schedules shall be
subject to all of the following limitations:
(A) Loan repayments shall not be made prior to the 2013-14 fiscal
year. Beginning in the 2013-14 fiscal year, the maximum repayment
amount authorized each fiscal year for repayments made pursuant to
this subdivision and paragraph (7) of subdivision (e) of Section
34176 combined shall be equal to one-half of the increase between the
amount distributed to the taxing entities pursuant to paragraph (4)
of subdivision (a) of Section 34183 in that fiscal year and the
amount distributed to taxing entities pursuant to that paragraph in
the 2012-13 base year, provided, however, that calculation of the
amount distributed to taxing entities during the 2012-13 base year
shall not include any amounts distributed to taxing entities pursuant
to the due diligence review process established in Sections 34179.5
to 34179.8, inclusive. Loan or deferral repayments made pursuant to
this subdivision shall be second in priority to amounts to be repaid
pursuant to paragraph (7) of subdivision (e) of Section 34176.
(B) Repayments received by the city, county, or city and county
that formed the redevelopment agency shall first be used to retire
any outstanding amounts borrowed and owed to the Low and Moderate
Income Housing Fund of the former redevelopment agency for purposes
of the Supplemental Educational Revenue Augmentation Fund and shall
be distributed to the Low and Moderate Income Housing Asset Fund
established by subdivision (d) of Section 34176.
(C) Twenty percent of any loan repayment shall be deducted from
the loan repayment amount and shall be transferred to the Low and
Moderate Income Housing Asset Fund, after all outstanding loans from
the Low and Moderate Income Housing Fund for purposes of the
Supplemental Educational Revenue Augmentation Fund have been paid.
(3) It is the intent of the Legislature that the amendments to
this subdivision made by the act adding this paragraph be clarifying.
(c) (1) Bond proceeds derived from bonds issued on or before
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.
(d) Notwithstanding subdivision (b) of Section 34163, if a
successor agency has received a finding of completion, the successor
agency may enter into, or amend existing, contracts and agreements,
or otherwise administer projects in connection with enforceable
obligations approved pursuant to subdivision (m) of Section 34177,
including the substitution of private developer capital in a
disposition and development agreement that has been deemed an
enforceable obligation, if the contract, agreement, or project will
not commit new property tax funds, and will not otherwise reduce
property tax revenues or payments made pursuant to paragraph (4) of
subdivision (a) of Section 34183 to the taxing agencies.
SEC. 8.5. Section 34191.4 of the Health and Safety Code is amended
to read:
34191.4. The following provisions shall apply to any successor
agency that has been issued a finding of completion by the Department
of Finance:
(a) All real property and interests in real property identified in
subparagraph (C) of paragraph (5) of subdivision (c) of Section
34179.5 shall be transferred to the Community Redevelopment Property
Trust Fund of the successor agency upon approval by the Department of
Finance of the long-range property management plan submitted by the
successor agency pursuant to subdivision (b) of Section 34191.5
unless that property is subject to the requirements of any existing
enforceable obligation.
(b) (1) Notwithstanding subdivision (d) of Section 34171, upon
application by the successor agency and approval by the oversight
board, loans made to a redevelopment agency by the city, county, or
city and county that created the redevelopment agency shall be deemed
to be enforceable obligations provided that the oversight board
makes a finding that the loans were for legitimate redevelopment
purposes.
(2) If the oversight board finds that a loan is an enforceable
obligation, the accumulated interest on the remaining principal
balance of the loan shall be recalculated from origination using the
interest rate earned by funds deposited into the Local Agency
Investment Fund in effect on the date of loan origination, and as
adjusted quarterly thereafter. The remaining principal balance of the
loan and the accumulated interest shall be repaid to the city,
county, or city and county in accordance with a defined schedule over
a reasonable term of years at an interest rate not to exceed the
interest rate earned by funds deposited into the Local Agency
Investment Fund as the rate is adjusted on a quarterly basis. The
annual loan repayments provided for in the recognized obligation
payment schedules shall be subject to all of the following
limitations:
(A) Loan repayments shall not be made prior to the 2013-14 fiscal
year. Beginning in the 2013-14 fiscal year, the maximum repayment
amount authorized each fiscal year for repayments made pursuant to
this subdivision and paragraph (7) of subdivision (e) of Section
34176 combined shall be equal to one-half of the increase between the
amount distributed to the taxing entities pursuant to paragraph (4)
of subdivision (a) of Section 34183 in that fiscal year and the
amount distributed to taxing entities pursuant to that paragraph in
the 2012-13 base year, provided, however, that calculation of the
amount distributed to taxing entities during the 2012-13 base year
shall not include any amounts distributed to taxing entities pursuant
to the due diligence review process established in Sections 34179.5
to 34179.8, inclusive. Loan or deferral repayments made pursuant to
this subdivision shall be second in priority to amounts to be repaid
pursuant to paragraph (7) of subdivision (e) of Section 34176.
(B) Repayments received by the city, county, or city and county
that formed the redevelopment agency shall first be used to retire
any outstanding amounts borrowed and owed to the Low and Moderate
Income Housing Fund of the former redevelopment agency for purposes
of the Supplemental Educational Revenue Augmentation Fund and shall
be distributed to the Low and Moderate Income Housing Asset Fund
established by subdivision (d) of Section 34176.
(C) Twenty percent of any loan repayment shall be deducted from
the loan repayment amount and shall be transferred to the Low and
Moderate Income Housing Asset Fund, after all outstanding loans from
the Low and Moderate Income Housing Fund for purposes of the
Supplemental Educational Revenue Augmentation Fund have been paid.
(3) It is the intent of the Legislature that the amendments to
this subdivision made by the act adding this paragraph be clarifying.
(c) (1) Bond proceeds derived from bonds issued on or before June
28, 2011, shall be used for the purposes for which the bonds were
sold.
(2) Notwithstanding Section 34177.3 or any other conflicting
provision of law, bond proceeds derived from bonds issued on or
before December 31, 2010, in excess of the amounts needed to satisfy
approved enforceable obligations shall thereafter be expended in a
manner consistent with the original bond covenants. Enforceable
obligations may be satisfied by the creation of reserves for projects
that are the subject of the enforceable obligation and that are
consistent with the contractual obligations for those projects, or by
expending funds to complete the projects. An expenditure made
pursuant to this paragraph shall constitute the creation of excess
bond proceeds obligations to be paid from the excess proceeds. Excess
bond proceeds obligations shall be listed separately on the
Recognized Obligation Payment Schedule submitted by the successor
agency.
(3) (A) Bond proceeds derived from bonds issued between January 1,
2011, and June 28, 2011, shall only be used for projects which meet
the following criteria, as determined by a resolution issued by the
oversight board:
(i) The project shall be consistent with the applicable regional
sustainable communities strategy or alternative planning strategy
adopted pursuant to Section 65080 of the Government Code that the
State Air Resources Board has determined would, if implemented,
achieve the greenhouse gas emission reduction targets established by
the board or, if a sustainable communities strategy is not required
for a region by law, a regional transportation plan that includes
programs and policies to reduce greenhouse gas emissions.
(ii) Two or more significant planning or implementation actions
shall have occurred on or before December 31, 2010. The term
"significant planning and implementation actions" means any of the
following:
(I) An action approved by the governing body of the city, county,
city and county, the board of the former redevelopment agency, or the
planning commission directly related to the planning or
implementation of the project.
(II) The project is included within an approved city, county, city
and county, or redevelopment agency planning document, including,
but not limited to, a redevelopment agency five-year implementation
plan, capital improvement plan, master plan, or other planning
document.
(III) The expenditure by the city, county, city and county, or
project sponsor, of more than twenty-five thousand dollars ($25,000)
on planning related activities for the project within one fiscal
year, or fifty thousand dollars ($50,000) in total, over multiple
fiscal years.
(iii) Documentation dated on or before December 31, 2010, shall be
provided indicating the intention to finance all or a portion of the
project with the future issuance of long-term debt, or documentation
showing that the issuance of long-term redevelopment agency debt was
being planned on or before December 31, 2010.
(iv) Each construction contract over one hundred thousand dollars
($100,000) shall include a provision that prevailing wage will be
paid by the contractor and all of that contractor's subcontractors.
(v) For each construction contract over two hundred fifty thousand
dollars ($250,000), the successor agency shall require prospective
contractors to submit a standardized questionnaire and financial
statements as part of their bid package, to establish the contractor'
s financial ability and experience in performing large construction
projects.
(B) Any city, county, or city and county that funded an eligible
project, meeting the criteria listed in clauses (i) to (iii),
inclusive, of subparagraph (A) with funds other than redevelopment
funds, between June 28, 2011, and the effective date of the act
adding this paragraph, shall be eligible to be reimbursed utilizing
2011 bond proceeds, if the project meets the purpose for which the
bonds were issued.
(C) Any successor agency requesting the use of bond proceeds
derived from bonds issued between January 1, 2011, and June 28, 2011,
in accordance with subparagraphs (A) and (B), shall place that
request on its Recognized Obligation Payment Schedule. The successor
agency shall place each project on a separate Recognized Obligation
Payment Schedule line item. The successor agency shall detail in the
resolution adopting the Recognized Obligation Payment Schedule how
each project will meet the requirement in subparagraphs (A) and (B),
and all documentation showing how the project meets those criteria
shall be attached to the resolution. The resolution adopting the
Recognized Obligation Payment Schedule, including the supporting
documentation, shall be forwarded to the department for review and
approval or denial. Pursuant to subdivision (h) of Section 34179, the
department may review and deny any action by the oversight board.
(4) If remaining bond proceeds derived from bonds issued on or
before December 31, 2010, cannot be spent in a manner consistent with
the bond covenants pursuant to paragraph (2), or if bond proceeds
derived from bonds issued between January 1, 2011, and June 28, 2011,
cannot be used for projects that met the requirements in
subparagraphs (A) and (B) of paragraph (3), the proceeds shall be
used to defease all or a portion of the bonds or to purchase all or
a portion of those same outstanding bonds on the open market for
cancellation. If only if a portion of the bonds proceeds will be
used, the successor agency shall defease or purchase bonds for
cancellation in a manner that maximizes fiscal savings.
(d) Notwithstanding subdivision (b) of Section 34163, if a
successor agency has received a finding of completion, the successor
agency may enter into, or amend existing, contracts and agreements,
or otherwise administer projects in connection with enforceable
obligations approved pursuant to subdivision (m) of Section 34177,
including the substitution of private developer capital in a
disposition and development agreement that has been deemed an
enforceable obligation, if the contract, agreement, or project will
not commit new property tax funds, and will not otherwise reduce
property tax revenues or payments made pursuant to paragraph (4) of
subdivision (a) of Section 34183 to the taxing agencies.
SEC. 9. Section 34191.5 of the Health and Safety Code is amended
to read:
34191.5. (a) There is hereby established a Community
Redevelopment Property Trust Fund, administered by the successor
agency, to serve as the repository of the former redevelopment agency'
s real properties identified in subparagraph (C) of paragraph (5) of
subdivision (c) of Section 34179.5.
(b) The successor agency shall prepare a long-range property
management plan that addresses the disposition and use of the real
properties of the former redevelopment agency. The report shall be
submitted to the oversight board and the Department of Finance for
approval no later than six months following the issuance to the
successor agency of the finding of completion.
(c) The long-range property management plan shall do all of the
following:
(1) Include an inventory of all properties in the trust. The
inventory shall consist of all of the following information:
(A) The date of the acquisition of the property and the value of
the property at that time, and an estimate of the current value of
the property.
(B) The purpose for which the property was acquired.
(C) Parcel data, including address, lot size, and current zoning
in the former agency redevelopment plan or specific, community, or
general plan.
(D) An estimate of the current value of the parcel including, if
available, any appraisal information.
(E) An estimate of any lease, rental, or any other revenues
generated by the property, and a description of the contractual
requirements for the disposition of those funds.
(F) The history of environmental contamination, including
designation as a brownfield site, any related environmental studies,
and history of any remediation efforts.
(G) A description of the property's potential for transit-oriented
development and the advancement of the planning objectives of the
successor agency.
(H) A brief history of previous development proposals and
activity, including the rental or lease of property.
(2) Address the use or disposition of
all of the properties in the trust. Permissible uses include the
retention of the property for governmental use pursuant to
subdivision (a) of Section 34181, the retention of the property for
future development, the sale of the property, or the use of the
property to fulfill an enforceable obligation. The plan shall
separately identify and list properties in the trust dedicated to
governmental use purposes and properties retained for purposes of
fulfilling an enforceable obligation. With respect to the use or
disposition of all other properties, all of the following shall
apply:
(A) (i) If the plan directs the use or liquidation of the property
for a project identified in an approved redevelopment plan, the
property shall transfer to the city, county, or city and county.
(ii) For purposes of this subparagraph, the term "identified in an
approved redevelopment plan" includes properties listed in a
community plan or a five-year implementation plan.
(B) If the plan directs the liquidation of the property or the use
of revenues generated from the property, such as lease or parking
revenues, for any purpose other than to fulfill an enforceable
obligation or other than that specified in subparagraph (A), the
proceeds from the sale shall be distributed as property tax to the
taxing entities.
(C) Property shall not be transferred to a successor agency, city,
county, or city and county, unless the long-range property
management plan has been approved by the oversight board and the
Department of Finance.
(d) The department shall not require a compensation agreement or
agreements as described in subdivision (f) of Section 34180 as part
of the approval of a long-range property management plan.
(e) The department shall only consider whether the long-range
property management plan makes a good faith effort to address the
requirements set forth in subdivision (c).
(f) The department shall approve long-range property management
plans as expeditiously as possible.
(g) Actions relating to the disposition of property after approval
of a long-range property management plan shall not require review by
the department.
SEC. 10. Section 7.5 of this bill incorporates amendments to
Section 34180 of the Health and Safety Code proposed by both this
bill and Senate Bill 1404. 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 34180 of the Health and Safety Code,
and (3) this bill is enacted after Senate Bill 1404, in which case
Section 7 of this bill shall not become operative.
SEC. 11. Section 8.5 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) this bill is enacted after Assembly Bill 2493, in which
case Section 8 of this bill shall not become operative.
