Bill Text: CA SB450 | 2011-2012 | Regular Session | Amended
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Redevelopment.
Spectrum: Moderate Partisan Bill (Democrat 4-1)
Status: (Vetoed) 2012-03-01 - Consideration of Governor's veto stricken from file. Veto sustained. [SB450 Detail]
Download: California-2011-SB450-Amended.html
Bill Title: Redevelopment.
Spectrum: Moderate Partisan Bill (Democrat 4-1)
Status: (Vetoed) 2012-03-01 - Consideration of Governor's veto stricken from file. Veto sustained. [SB450 Detail]
Download: California-2011-SB450-Amended.html
BILL NUMBER: SB 450 AMENDED
BILL TEXT
AMENDED IN SENATE APRIL 11, 2011
AMENDED IN SENATE MARCH 29, 2011
INTRODUCED BY Senator Lowenthal
(Principal coauthor: Senator DeSaulnier)
(Principal coauthor: Assembly Member Torres)
(Coauthors: Assembly Members Atkins and Norby)
FEBRUARY 16, 2011
An act to amend Sections 33080.1, 33080.2, 33080.8, 33334.2,
33334.3, 33334.4, 33334.12, 33334.16, 33413, 33413.5, 33487, and
33490 of, to add Sections 33080.9, 33080.10, 33080.11, 33080.12,
33506, and 50464.5 to, and to add Article 13 (commencing with Section
33460) to Chapter 4 of Part 1 of Division 24 of, the Health and
Safety Code, relating to redevelopment.
LEGISLATIVE COUNSEL'S DIGEST
SB 450, as amended, Lowenthal. Redevelopment.
(1) The Community Redevelopment Law requires that each
redevelopment agency submit the final report of any audit undertaken
by any other local, state, or federal government entity to its
legislative body and to additionally present an annual report to the
legislative body containing specified information.
This bill would require the agency to include additional
information relating to any major audit violations, as defined, any
corrections to those violations, and planning and general
administrative expenses of the Low and Moderate Income Housing Fund.
The bill would authorize the Controller to conduct quality control
reviews of independent financial audit reports and require the
Controller to the results of his or her reviews. The Controller would
be required to comply with certain notification and referral
provisions in the event that the audit was conducted in a manner that
may constitute unprofessional conduct.
The bill would require the Department of Housing and Community
Development to conduct audits of redevelopment agencies to ensure
compliance with the housing provisions of the Community Redevelopment
Law. The bill would require each agency to annually deposit 0.05% of
any tax increment deposited into the Low and Moderate Income Housing
Fund into the Redevelopment Agency Accountability Fund, which the
bill would create, to fund the department audits.
(2) Existing law requires that funds used for purposes of
increasing, improving, and preserving a community's supply of low-
and moderate-income housing be held in a separate Low and Moderate
Income Housing Fund until used. Existing law limits the planning and
general administrative costs which may be paid with moneys from the
Low and Moderate Income Housing Fund.
The bill would revise the costs and expenses which may be
considered planning and general administrative costs for the purposes
of being paid from the Low and Moderate Income Housing Fund. Except
as provided, the bill would prohibit an agency from expending more
than 15% of the tax increment deposited in the fund for planning and
general administrative costs. The bill would impose other reporting
and accountability measures on agencies with respect to the use of
moneys in the fund for planning and administrative purposes. The bill
would impose a statute of limitations for an action to compel agency
compliance with specified provisions.
(3) Existing law requires, except as specified, each agency to
expend over each 10-year period of the implementation plan, the
moneys in the Low and Moderate Income Fund to assist housing for
persons of moderate, low, and very low income according to specified
calculations.
The bill would instead require that at least 70%
75% of the agency's expenditures from the fund
directly assist the new construction, acquisition, and substantial
rehabilitation or preservation of rental housing
for persons of extremely low, very low, low, or moderate income,
20% with at least 25% of which
is the expenditures required to be directed
towards rental housing for persons of extremely
low-income and at least 50% of the expenditures required to be
directed towards housing for persons of very low-income .
(4) Existing law authorizes a redevelopment agency to merge
project areas under its jurisdiction, and requires that at least 20%
of specified taxes allocated to the redevelopment agency to be
deposited into the Low and Moderate Income Housing Fund to assist in
the construction or rehabilitation of housing units for very low, and
moderate-income households, as specified. Existing law requires that
if those funds have not been committed for that purpose within 6
years, the agency shall offer the funds to the housing authority that
operates within the jurisdiction of the agency, as specified.
This bill would repeal the requirement that the funds be offered
to the housing authority.
(4)
(5) Existing law requires an agency that has failed to
expend or encumber excess surplus in the Low and Moderate Income
Housing Fund within one year to disburse the surplus voluntarily to
the appropriate county housing authority or another public agency or
to expend or encumber the surplus within two additional years.
The bill would delete these provisions. The bill would modify the
definition of the term "excess surplus."
(5)
(6) Whenever low- or moderate-income housing dwelling
units are destroyed or removed from the low- and moderate-income
housing market as part of a redevelopment that is subject to a
written agreement with the agency, or where financial assistance has
been provided by the agency, the agency is required to provide
replacement housing within 4 years of the destruction or removal.
The bill would modify the agency's obligation to provide
replacement housing to low- or moderate-income persons and families
and would impose new requirements on the agency with respect to the
replacement housing plan and housing specifications. If a court has
found that an agency has failed to comply with these provisions, the
bill would require the court, at a minimum, to issue an order
temporarily prohibiting the agency from issuing any debt for any
project area, except as specified.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 33080.1 of the Health and Safety Code is
amended to read:
33080.1. Every redevelopment agency shall submit the final report
of any audit undertaken by any other local, state, or federal
government entity to its legislative body within 30 days of receipt
of that audit report. In addition, every redevelopment agency shall
present an annual report to its legislative body within six months of
the end of the agency's fiscal year. The annual report shall contain
all of the following:
(a) (1) An independent financial audit report for the previous
fiscal year. "Audit report" means an examination of, and opinion on,
the financial statements of the agency which present the results of
the operations and financial position of the agency, including all
financial activities with moneys required to be held in a separate
Low and Moderate Income Housing Fund pursuant to Section 33334.3.
This audit shall be conducted by a certified public accountant or
public accountant, licensed by the State of California, in accordance
with Government Auditing Standards adopted by the Comptroller
General of the United States. The audit report shall meet, at a
minimum, the audit guidelines prescribed by the Controller's office
pursuant to Section 33080.3 and also include a report on the agency's
compliance with laws, regulations, and administrative requirements
governing activities of the agency, and a calculation of the excess
surplus in the Low and Moderate Income Housing Fund as defined in
subdivision (g) of Section 33334.12. The audit report shall include a
statement from the auditor as to whether or not the agency has any
major audit violations, as defined in subdivision (j) of Section
33080.8.
(2) A statement describing each corrective measure taken in that
fiscal year to correct major audit violations identified during or
prior to that fiscal year by the agency, its auditor, or the
Department of Housing and Community Development.
(3) However, the legislative body may elect to omit from inclusion
in the audit report any distinct activity of the agency that is
funded exclusively by the federal government and that is subject to
audit by the federal government.
(b) A fiscal statement for the previous fiscal year that contains
the information required pursuant to Section 33080.5.
(c) A description of the agency's activities in the previous
fiscal year affecting housing and displacement that contains the
information required by Sections 33080.4 and 33080.7.
(d) A description of the agency's progress, including specific
actions and expenditures, in alleviating blight in the previous
fiscal year.
(e) A list of, and status report on, all loans made by the
redevelopment agency that are fifty thousand dollars ($50,000) or
more, that in the previous fiscal year were in default, or not in
compliance with the terms of the loan approved by the redevelopment
agency.
(f) A description of the total number and nature of the properties
that the agency owns and those properties the agency has acquired in
the previous fiscal year.
(g) A list of the fiscal years that the agency expects each of the
following time limits to expire:
(1) The time limit for the commencement for eminent domain
proceedings to acquire property within the project area.
(2) The time limit for the establishment of loans, advances, and
indebtedness to finance the redevelopment project.
(3) The time limit for the effectiveness of the redevelopment
plan.
(4) The time limit to repay indebtedness with the proceeds of
property taxes.
(h) A statement of the amount and percentage of tax increment
expended from the Low and Moderate Income Housing Fund for planning
and general administration in each of the preceding five fiscal years
that begin after December 31, 2011, broken down by the categories
described in paragraph (1) of subdivision (d) of Section 33334.3.
(i) A list of all real properties owned by the agency and
purchased with funds from the Low and Moderate Income Housing Fund
, the date of acquisition for each property, the agency's
intended purpose for each property, a statement of the amount, if
any, of moneys from the Low and Moderate Income Housing Fund used to
acquire the property, and a statement of the amount, if any, of
moneys from the Low and Moderate Income Housing Fund used to maintain
the property.
(j) A list of the redevelopment projects that have caused a
replacement obligation pursuant to subdivision (a) of Section 33413,
and of the development projects that have caused a production
obligation pursuant to subdivision (b) of Section 33413, the
respective number of units the agency is obligated to replace or
produce as a result of each project, and the location and status of
the replacement and production units. This list shall cover each
fiscal year from the agency's last adopted implementation plan and
also include any projects for which covenants required by paragraph
(5) of subdivision (c) of Section 33413 have not been recorded for
the identified replacement or production obligation.
(k) Any other information that the agency believes useful to
explain its programs, including, but not limited to, the number of
jobs created and lost in the previous fiscal year as a result of its
activities.
SEC. 2. Section 33080.2 of the Health and Safety Code is amended
to read:
33080.2. (a) When the agency presents the annual report to the
legislative body pursuant to Section 33080.1, the agency shall inform
the legislative body of any major audit violations of this part
based on the independent financial audit report or an audit
investigation conducted by the department. The agency shall inform
the legislative body that the failure to correct a major audit
violation of this part may result in the filing of an action by the
Attorney General pursuant to Section 33080.8 in a form that indicates
whether a referral to the Attorney General has been made.
(b) The legislative body shall review any report submitted
pursuant to Section 33080.1 and take any action it deems appropriate
on that report no later than the first meeting of the legislative
body occurring more than 21 days from the receipt of the report.
SEC. 3. Section 33080.8 of the Health and Safety Code is amended
to read:
33080.8. (a) On or before April 1 of each year, the Controller
shall compile a list of agencies that appear to have major audit
violations as defined in this section, based on the independent
financial audit reports filed with the Controller pursuant to Section
33080.
(b) On or before June 1 of each year, for each major audit
violation of each agency identified pursuant to subdivision (a), the
Controller shall determine if the agency has corrected the major
audit violation. Before making this determination, the Controller
shall consult with each affected agency. In making this
determination, the Controller may request and shall receive the
prompt assistance of public officials and public agencies, including,
but not limited to, the affected agencies, counties, and cities. If
the Controller determines that an agency has not corrected the major
audit violation, the Controller shall send a list of those agencies,
their major violations, all relevant documents, and the affidavits
required pursuant to subdivision (d) to the Attorney General for
action pursuant to this section.
(c) For each agency that the Controller refers to the Attorney
General pursuant to subdivision (b), the Controller shall notify the
agency and the legislative body that the agency was on the list sent
to the Attorney General. The Controller's notice shall inform the
agency and the legislative body of the duties imposed by Section
33080.2.
(d) Within 45 days of receiving the referral from the Controller
pursuant to subdivision (b), the Attorney General shall determine
whether to file an action to compel the agency's compliance with this
part. Any action filed pursuant to this section shall be commenced
in the County of Sacramento. The time limit for the Attorney General
to make this determination is directory and not mandatory. Any action
shall be accompanied by an affidavit or affidavits, to be provided
by the Controller with the referral, setting forth facts that
demonstrate a likelihood of success on the merits of the claim that
the agency has a major audit violation. The affidavit shall also
certify that the agency and the legislative body were informed not
less than 10 days prior to the date on which the action was filed.
The agency shall file a response to any action filed by the Attorney
General pursuant to this section within 15 days of service.
(e) (1) On the earliest day that the business of the court will
permit, but not later than 45 days after the filing of an action
pursuant to this section, the court shall conduct a hearing to
determine if good cause exists for believing that the agency has a
major audit violation and has not corrected that violation.
(2) If the court determines that no good cause exists or that the
agency had a major audit violation but corrected the major audit
violation, the court shall dismiss the action.
(3) If the court determines that there is good cause for believing
that the agency has a major audit violation and has not corrected
that major audit violation, the court shall immediately issue an
order that prohibits the agency from doing any of the following:
(A) Encumbering any funds or expending any money derived from any
source except to pay the obligations designated in subparagraphs (A)
to (G), inclusive, of paragraph (1) of subdivision (e) of Section
33334.12.
(B) Adopting a redevelopment plan.
(C) Amending a redevelopment plan except to correct the major
audit violation that is the subject of the action.
(D) Issuing, selling, offering for sale, or delivering any bonds
or any other evidence of indebtedness.
(E) Incurring any indebtedness.
(f) In a case that is subject to paragraph (3) of subdivision (e),
the court shall also set a hearing on the matter within 60 days.
(g) If, on the basis of that subsequent hearing, the court
determines that the agency has a major audit violation and has not
corrected that violation, the court shall order the agency to comply
with this part within 30 days, and order the agency to forfeit to the
state no more than:
(1) Two thousand dollars ($2,000) in the case of a community
redevelopment agency with a total revenue, in the prior year, of less
than one hundred thousand dollars ($100,000) as reported in the
Controller's annual financial reports.
(2) Five thousand dollars ($5,000) in the case of a community
redevelopment agency with a total revenue, in the prior year, of at
least one hundred thousand dollars ($100,000) but less than two
hundred fifty thousand dollars ($250,000) as reported in the
Controller's annual financial reports.
(3) Ten thousand dollars ($10,000) in the case of a community
redevelopment agency with a total revenue, in the prior year, of at
least two hundred fifty thousand dollars ($250,000) as reported in
the Controller's annual financial reports.
(h) The order issued by the court pursuant to paragraph (3) of
subdivision (e) shall continue in effect until the court determines
that the agency has corrected the major audit violation. If the court
determines that the agency has corrected the major audit violation,
the court may dissolve its order issued pursuant to paragraph (3) of
subdivision (e) at any time.
(i) An action filed pursuant to this section to compel an agency
to comply with this part is in addition to any other remedy, and is
not an exclusive means to compel compliance.
(j) As used in this section, "major audit violation" means that,
for the fiscal year in question, an agency did not:
(1) File an independent financial audit report that substantially
conforms with the requirements of subdivision (a) of Section 33080.1.
(2) File a fiscal statement that includes substantially all of the
information required by Section 33080.5.
(3) Establish time limits, as required by Section 33333.6.
(4) Deposit all required tax increment revenues directly into the
Low and Moderate Income Housing Fund upon receipt, as required by
Section 33334.3, 33334.6, 33487, or 33492.16.
(5) Establish a Low and Moderate Income Housing Fund, as required
by subdivision (a) of Section 33334.3.
(6) Accrue interest earned by the Low and Moderate Income Housing
Fund to that fund, as required by subdivision (b) of Section 33334.3.
(7) Comply with subdivisions (d) and (e) of Section 33334.3,
governing eligible expenditures for planning and general
administration from the Low and Moderate Income Housing Fund.
(8) Initiate development of housing on real property acquired
using moneys from the Low and Moderate Income Housing Fund or sell
the property, as required by Section 33334.16.
(9) Adopt an implementation plan, as required by Section 33490.
SEC. 4. Section 33080.9 is added to the Health and Safety Code, to
read:
33080.9. (a) (1) The department shall forward to the Attorney
General and the Controller a copy of any audit or investigation of a
redevelopment agency conducted pursuant to Section 50464.5.
(2) On or before April 1 of each year, the department shall
determine for all audits and investigations conducted the previous
year, including those audits and investigations conducted pursuant to
Section 50464.5, whether an audit or investigation contains major
audit violations, as defined in subdivision (j) of Section 33080.8.
(b) On or before June 1 of each year, the department shall
determine for each major audit violation identified pursuant to
subdivision (a) if the agency has corrected the major audit
violation. Before making this determination, the department shall
consult with each affected agency. In making this determination, the
department may request and shall receive the prompt assistance of
public officials and public agencies, including, but not limited to,
the affected agencies, counties, and cities. If the department
determines an agency has not corrected the major audit violation, the
department shall send a list of those agencies, their major audit
violations, all relevant documentation, and the affidavits required
pursuant to subdivision (e) to the Attorney General for any action
pursuant to this section.
(c) For each agency the department refers to the Attorney General
pursuant to subdivision (b), the department shall notify the agency
and its legislative body that the agency was on the list sent to the
Attorney General. The notice shall inform the agency and its
legislative body of the duties imposed pursuant to Section 33080.2.
(d) The Attorney General shall determine whether to file an action
to compel the agency's compliance with this article within 45 days
of receiving notice from the department regarding major audit
violations. Any action filed pursuant to this section shall be
commenced in the superior court of any county where the Attorney
General has an office. The time limit for the Attorney General to
make this determination is directory and not mandatory.
(e) Any action shall be accompanied by the affidavit or affidavits
setting forth the facts that demonstrate a likelihood of success on
the merits of the claim that the agency has a major audit violation.
The affidavit shall also certify that the agency and its legislative
body were notified of the action no less than 10 days prior to the
date on which the action was filed. The agency shall file a response
to any action filed by the Attorney General pursuant to this section
within 15 days of service.
(f) Nothing in this section shall be construed to permit the
department to initiate or settle litigation, or to resolve any
departmental audit or investigation in a manner contrary to law.
SEC. 5. Section 33080.10 is added to the Health and Safety Code,
to read:
33080.10. In an action to compel an agency's compliance with this
article pursuant to Section 33080.9, all of the following shall
apply:
(a) (1) On the earliest day that the business of the court will
permit, but no later than 45 days after the filing of an action, the
court shall conduct a hearing to determine if good cause exists for
believing the agency has a major audit violation, as defined in
subdivision (j) of Section 33080.8, and has not corrected the major
audit violation.
(2) If the court determines that no major audit violation exists
or that the agency had a major audit violation and has corrected the
major audit violation, the court shall dismiss the action.
(3) If the court determines there is good cause to believe the
agency had a major audit violation and has not corrected that major
audit violation, the court shall set a hearing on the matter within
60 days. The court also shall issue immediately an order that
prohibits the agency from doing any of the following:
(A) Encumbering any funds or expending any money derived from any
source, other than a Low and Moderate Income Housing Fund, except to
pay the obligations designated in subparagraphs (A) to (G),
inclusive, of paragraph (1) of subdivision (e) of Section 33334.12.
(B) Adopting a redevelopment plan.
(C) Exercising the power of eminent domain.
(D) Amending a redevelopment plan, except to correct the major
audit violation that is the subject of the action.
(E) Issuing, selling, offering for sale, or delivering any bonds
or any other evidence of indebtedness, except to increase, improve,
preserve, or assist in the construction or rehabilitation of, housing
units that will be occupied by and affordable to persons or families
of extremely low, very low, low, or moderate income, in accordance
with this part.
(F) Incurring any indebtedness, except to increase, improve,
preserve, or assist in the construction or rehabilitation of, housing
units that will be occupied by and affordable to persons or families
of extremely low, very low, low, or moderate income, in accordance
with this part.
(b) If a court finds, on the basis of the subsequent hearing set
pursuant to paragraph (3) of subdivision (a), that the agency has a
major audit violation and has not corrected the major audit
violation, the court shall order the agency to comply with this
article within 30 days and order the agency to forfeit to the state a
monetary sanction commensurate with the violation.
(c) The order issued by the court pursuant to paragraph (3) of
subdivision (a) shall continue in effect until the court determines
the agency has corrected the major audit violation. If the court
determines that the agency has corrected the major audit violation,
the court may dissolve its order at any time.
(d) An action filed pursuant to this section is in addition to any
other remedy and is not an exclusive means to compel compliance.
This section is not intended to preclude an action to compel
compliance with this article by any other interested party or
resident of the jurisdiction.
SEC. 6. Section 33080.11 is added to the Health and Safety Code,
to read:
33080.11. (a) The Controller may conduct quality control reviews
of independent financial audit reports required by Section 33080.1 to
the extent it is feasible to do so within existing budgetary
resources. The Controller shall communicate the results of his or her
reviews to the independent auditor and the agency for which the
audit was conducted, and shall review his or her findings with the
independent auditor.
(b) If the quality control review specified in subdivision (a)
indicates the audit was conducted in a manner that may constitute
unprofessional conduct, as defined in Section 5100 of the Business
and Professions Code, including, but not limited to, gross negligence
resulting in a material misstatement in the audit, the Controller
shall refer the case to the California Board of Accountancy. If the
board determines that the independent auditor conducted an audit in
an unprofessional manner, the independent auditor is prohibited from
performing any redevelopment agency audit for a period of three
years, in addition to any other penalties the board may impose.
SEC. 7. Section 33080.12 is added to the Health and Safety Code,
to read:
33080.12. (a) (1) Whenever the Controller determines through two
consecutive quality control reviews, pursuant to Section 33080.11,
that audits performed by an independent auditor pursuant to Section
33080.1 were not performed in substantial conformity with provisions
of the audit and report guidelines adopted pursuant to Section
33080.3, the Controller shall notify in writing the independent
auditor and the California Board of Accountancy.
(2) If the independent auditor does not file an appeal in writing
to the board within 30 calendar days after receipt of the Controller'
s notification, the Controller's determination under this section
shall be final.
(3) If an appeal is filed with the California Board of
Accountancy, the board shall complete an investigation of the appeal.
On the basis of the investigation, the board may do either of the
following:
(A) Find the Controller's determination should not be upheld and
has no effect.
(B) Schedule the appeal for a hearing.
(b) If the Controller's determination pursuant to subdivision (a)
becomes final, the independent auditor shall be ineligible to conduct
audits pursuant to Section 33080.1 for a period of three years, or,
in the event of an appeal, for any period and subject to conditions
that may be ordered by the California Board of Accountancy. No later
than March 1 following the date on which the Controller's
determination becomes final, the Controller shall notify each agency
of those independent auditors determined to be ineligible under this
section or Section 33080.11. Agencies shall not use the audit
services of an independent auditor ineligible under this section.
(c) For the purposes of this section, "independent auditor" shall
mean any person or firm entering into a contract to conduct an audit
under Section 33080.1.
(d) This section shall not preclude the California Board of
Accountancy from taking any disciplinary action it deems appropriate
under any other provisions of law.
SEC. 8. Section 33334.2 of the Health and Safety Code is amended
to read:
33334.2. (a) Except as provided in subdivision (k), not less than
20 percent of all taxes that are allocated to the agency pursuant to
Section 33670 shall be used by the agency for the purposes of
increasing, improving, and preserving the community's supply of low-
and moderate-income housing available at affordable housing cost, as
defined by Section 50052.5, to persons and families of low or
moderate income, as defined in Section 50093, lower income
households, as defined by Section 50079.5, very low income
households, as defined in Section 50105, and extremely low income
households, as defined by Section 50106, that is occupied by these
persons and families, unless one of the following findings is made
annually by resolution:
(1) (A) That no need exists in the community to improve, increase,
or preserve the supply of low- and moderate-income housing,
including housing for very low income households in a manner that
would benefit the project area and that this finding is consistent
with the housing element of the community's general plan required by
Article 10.6 (commencing with Section 65580) of Chapter 3 of Division
1 of Title 7 of the Government Code, including its share of the
regional housing needs of very low income households and persons and
families of low or moderate income.
(B) This finding shall only be made if the housing element of the
community's general plan demonstrates that the community does not
have a need to improve, increase, or preserve the supply of low- and
moderate-income housing available at affordable housing cost to
persons and families of low or moderate income and to very low income
households. This finding shall only be made if it is consistent with
the planning agency's annual report to the legislative body on
implementation of the housing element required by subdivision (b) of
Section 65400 of the Government Code. No agency of a charter city
shall make this finding unless the planning agency submits the report
pursuant to subdivision (b) of Section 65400 of the Government Code.
This finding shall not take effect until the agency has complied
with subdivision (b) of this section.
(2) (A) That some stated percentage less than 20 percent of the
taxes that are allocated to the agency pursuant to Section 33670 is
sufficient to meet the housing needs of the community, including its
share of the regional housing needs of persons and families of low-
or moderate-income and very low income households, and that this
finding is consistent with the housing element of the community's
general plan required by Article 10.6 (commencing with Section 65580)
of Chapter 3 of Division 1 of Title 7 of the Government Code.
(B) This finding shall only be made if the housing element of the
community's general plan demonstrates that a percentage of less than
20 percent will be sufficient to meet the community's need to
improve, increase, or preserve the supply of low- and moderate-income
housing available at affordable housing cost to persons and families
of low or moderate income and to very low income households. This
finding shall only be made if it is consistent with the planning
agency's annual report to the legislative body on implementation of
the housing element required by subdivision (b) of Section 65400 of
the Government Code. No agency of a charter city shall make this
finding unless the planning agency submits the report pursuant to
subdivision (b) of Section 65400 of the Government Code. This finding
shall not take effect until the agency has complied with subdivision
(b) of this section.
(C) For purposes of making the findings specified in this
paragraph and paragraph (1), the housing element of the general plan
of a city, county, or city and county shall be current, and shall
have been determined by the department pursuant to Section 65585 to
be in substantial compliance with Article 10.6 (commencing with
Section 65580) of Chapter 3 of Division 1 of Title 7 of the
Government Code.
(3) (A) That the community is making a substantial effort to meet
its existing and projected housing needs, including its share of the
regional housing needs, with respect to persons and families of low
and moderate income, particularly very low income households, as
identified in the housing element of the community's general plan
required by Article 10.6 (commencing with Section 65580) of Chapter 3
of Division 1 of Title 7 of the Government Code, and that this
effort, consisting of direct
financial contributions of local funds used to increase and improve
the supply of housing affordable to, and occupied by, persons and
families of low or moderate income and very low income households is
equivalent in impact to the funds otherwise required to be set aside
pursuant to this section. In addition to any other local funds, these
direct financial contributions may include federal or state grants
paid directly to a community and that the community has the
discretion of using for the purposes for which moneys in the Low and
Moderate Income Housing Fund may be used. The legislative body shall
consider the need that can be reasonably foreseen because of
displacement of persons and families of low or moderate income or
very low income households from within, or adjacent to, the project
area, because of increased employment opportunities, or because of
any other direct or indirect result of implementation of the
redevelopment plan. No finding under this subdivision may be made
until the community has provided or ensured the availability of
replacement dwelling units as defined in Section 33411.2 and until it
has complied with Article 9 (commencing with Section 33410).
(B) In making the determination that other financial contributions
are equivalent in impact pursuant to this subdivision, the agency
shall include only those financial contributions that are directly
related to programs or activities authorized under subdivision (e).
(C) The authority for making the finding specified in this
paragraph shall expire on June 30, 1993, except that the expiration
shall not be deemed to impair contractual obligations to bondholders
or private entities incurred prior to May 1, 1991, and made in
reliance on the provisions of this paragraph. Agencies that make this
finding after June 30, 1993, shall show evidence that the agency
entered into the specific contractual obligation with the specific
intention of making a finding under this paragraph in order to
provide sufficient revenues to pay off the indebtedness.
(b) Within 10 days following the making of a finding under either
paragraph (1) or (2) of subdivision (a), the agency shall send the
Department of Housing and Community Development a copy of the
finding, including the factual information supporting the finding and
other factual information in the housing element that demonstrates
that either (1) the community does not need to increase, improve, or
preserve the supply of housing for low- and moderate-income
households, including very low income households, or (2) a percentage
less than 20 percent will be sufficient to meet the community's need
to improve, increase, and preserve the supply of housing for low-
and moderate-income households, including very low income households.
Within 10 days following the making of a finding under paragraph (3)
of subdivision (a), the agency shall send the Department of Housing
and Community Development a copy of the finding, including the
factual information supporting the finding that the community is
making a substantial effort to meet its existing and projected
housing needs. Agencies that make this finding after June 30, 1993,
shall also submit evidence to the department of its contractual
obligations with bondholders or private entities incurred prior to
May 1, 1991, and made in reliance on this finding.
(c) In any litigation to challenge or attack a finding made under
paragraph (1), (2), or (3) of subdivision (a), the burden shall be
upon the agency to establish that the finding is supported by
substantial evidence in light of the entire record before the agency.
If an agency is determined by a court to have knowingly
misrepresented any material facts regarding the community's share of
its regional housing need for low- and moderate-income housing,
including very low income households, or the community's production
record in meeting its share of the regional housing need pursuant to
the report required by subdivision (b) of Section 65400 of the
Government Code, the agency shall be liable for all court costs and
plaintiff's attorney's fees, and shall be required to allocate not
less than 25 percent of the agency's tax increment revenues to its
Low and Moderate Income Housing Fund in each year thereafter.
(d) Nothing in this section shall be construed as relieving any
other public entity or entity with the power of eminent domain of any
legal obligations for replacement or relocation housing arising out
of its activities.
(e) In carrying out the purposes of this section, the agency may
exercise any or all of its powers for the construction,
rehabilitation, or preservation of affordable housing for extremely
low, very low, low-, and moderate-income persons or families,
including the following:
(1) Acquire real property or building sites subject to Section
33334.16.
(2) (A) Improve real property or building sites with onsite or
offsite improvements, but only if both (i) the improvements are part
of the new construction or rehabilitation of affordable housing units
for low- or moderate-income persons that are directly benefited by
the improvements, and are a reasonable and fundamental component of
the housing units, and (ii) the agency requires that the units remain
available at affordable housing cost to, and occupied by, persons
and families of extremely low, very low, low, or moderate income for
the same time period and in the same manner as provided in
subdivision (c) and paragraph (2) of subdivision (f) of Section
33334.3.
(B) If the newly constructed or rehabilitated housing units are
part of a larger project and the agency improves or pays for onsite
or offsite improvements pursuant to the authority in this
subdivision, the agency shall pay only a portion of the total cost of
the onsite or offsite improvement. The maximum percentage of the
total cost of the improvement paid for by the agency shall be
determined by dividing the number of housing units that are
affordable to low- or moderate-income persons by the total number of
housing units, if the project is a housing project, or by dividing
the cost of the affordable housing units by the total cost of the
project, if the project is not a housing project.
(3) Donate real property to private or public persons or entities.
(4) Finance insurance premiums pursuant to Section 33136.
(5) Construct buildings or structures.
(6) Acquire buildings or structures.
(7) Rehabilitate buildings or structures.
(8) Provide subsidies to, or for the benefit of, extremely low
income households, as defined by Section 50106, very low income
households, as defined by Section 50105, lower income households, as
defined by Section 50079.5, or persons and families of low or
moderate income, as defined by Section 50093, to the extent those
households cannot obtain housing at affordable costs on the open
market. Housing units available on the open market are those units
developed without direct government subsidies.
(9) Develop plans, pay principal and interest on bonds, loans,
advances, or other indebtedness, or pay financing or carrying
charges.
(10) Maintain the community's supply of mobilehomes.
(11) Preserve the availability to lower income households of
affordable housing units in housing developments that are assisted or
subsidized by public entities and that are threatened with imminent
conversion to market rates.
(f) The agency may use these funds to meet, in whole or in part,
the replacement housing provisions in Section 33413. However, nothing
in this section shall be construed as limiting in any way the
requirements of that section.
(g) (1) The agency may use these funds inside or outside the
project area. The agency may only use these funds outside the project
area upon a resolution of the agency and the legislative body that
the use will be of benefit to the project. The determination by the
agency and the legislative body shall be final and conclusive as to
the issue of benefit to the project area. The Legislature finds and
declares that the provision of replacement housing pursuant to
Section 33413 is always of benefit to a project. Unless the
legislative body finds, before the redevelopment plan is adopted,
that the provision of low- and moderate-income housing outside the
project area will be of benefit to the project, the project area
shall include property suitable for low- and moderate-income housing.
(2) (A) The Contra Costa County Redevelopment Agency may use these
funds anywhere within the unincorporated territory, or within the
incorporated limits of the City of Walnut Creek on sites contiguous
to the Pleasant Hill BART Station Area Redevelopment Project area.
The agency may only use these funds outside the project area upon a
resolution of the agency and board of supervisors determining that
the use will be of benefit to the project area. In addition, the
agency may use these funds within the incorporated limits of the City
of Walnut Creek only if the agency and the board of supervisors find
all of the following:
(i) Both the County of Contra Costa and the City of Walnut Creek
have adopted and are implementing complete and current housing
elements of their general plans that the Department of Housing and
Community Development has determined to be in compliance with the
requirements of Article 10.6 (commencing with Section 65580) of
Chapter 3 of Division 1 of Title 7 of the Government Code.
(ii) The development to be funded shall not result in any
residential displacement from the site where the development is to be
built.
(iii) The development to be funded shall not be constructed in an
area that currently has more than 50 percent of its population
comprised of racial minorities or low-income families.
(iv) The development to be funded shall allow construction of
affordable housing closer to a rapid transit station than could be
constructed in the unincorporated territory outside the Pleasant Hill
BART Station Area Redevelopment Project.
(B) If the agency uses these funds within the incorporated limits
of the City of Walnut Creek, all of the following requirements shall
apply:
(i) The funds shall be used only for the acquisition of land for,
and the design and construction of, the development of housing
containing units affordable to, and occupied by, low- and
moderate-income persons.
(ii) If less than all the units in the development are affordable
to, and occupied by, low- or moderate-income persons, any agency
assistance shall not exceed the amount needed to make the housing
affordable to, and occupied by, low- or moderate-income persons.
(iii) The units in the development that are affordable to, and
occupied by, low- or moderate-income persons shall remain affordable
for a period of at least 55 years.
(iv) The agency and the City of Walnut Creek shall determine, if
applicable, whether Article XXXIV of the California Constitution
permits the development.
(h) The Legislature finds and declares that expenditures or
obligations incurred by the agency pursuant to this section shall
constitute an indebtedness of the project.
(i) This section shall only apply to taxes allocated to a
redevelopment agency for which a final redevelopment plan is adopted
on or after January 1, 1977, or for any area that is added to a
project by an amendment to a redevelopment plan, which amendment is
adopted on or after the effective date of this section. An agency
may, by resolution, elect to make all or part of the requirements of
this section applicable to any redevelopment project for which a
redevelopment plan was adopted prior to January 1, 1977, subject to
any indebtedness incurred prior to the election.
(j) (1) (A) An action to compel compliance with the requirement of
Section 33334.3 to deposit not less than 20 percent of all taxes
that are allocated to the agency pursuant to Section 33670 or other
revenue in the Low and Moderate Income Housing Fund shall be
commenced within 10 years of the alleged violation. A cause of action
for a violation accrues on the last day of the fiscal year in which
the funds were required to be deposited in the Low and Moderate
Income Housing Fund.
(B) An action to compel compliance with the requirement of this
section or Section 33334.6 that money deposited in the Low and
Moderate Income Housing Fund be used by the agency for purposes of
increasing, improving, and preserving the community's supply of low-
and moderate-income housing available at affordable housing cost
shall be commenced within 10 years of the alleged violation. A cause
of action for a violation accrues on the date of the actual
expenditure of the funds.
(C) An agency found to have deposited less into the Low and
Moderate Income Housing Fund than mandated by Section 33334.3 or to
have spent money from the Low and Moderate Income Housing Fund for
purposes other than increasing, improving, and preserving the
community's supply of low- and moderate-income housing, as mandated,
by this section or Section 33334.3 or 33334.6 shall repay the funds
with interest, plus an additional 50 percent of that amount and
interest, in one lump sum pursuant to Section 970.4 or 970.5 of the
Government Code or may do either of the following:
(i) Petition the court under Section 970.6 for repayment in
installments.
(ii) Repay the portion of the judgment due to the Low and Moderate
Income Housing Fund in equal installments over a period of five
years following the judgment.
(D) An action to compel compliance with the
requirements of Section 33487 shall be commenced within 10 years of
the alleged violation. A cause of action accrues on the
actual date of the last day of the fiscal year in which the
funds were required to be deposited in the Low and Moderate Income
Housing Fund or the date of the actual expenditure of the funds, as
applicable. In the event the deposits to the Low and Moderate Income
Housing Fund are less than the amounts required pursuant to Section
33487, or the expenditures from the Low and Moderate Income Housing
Fund are not consistent with Section 33487, the repayment required by
subparagraph (C) is applicable. This subparagraph applies to actions
filed on or after January 1, 2012.
(2) Repayment shall not be made from the funds required to be set
aside or used for low- and moderate-income housing pursuant to this
part, or any other funds designated for affordable housing.
(3) Notwithstanding clauses (i) and (ii) of subparagraph (C) or
subparagraph (D) of paragraph (1), all costs, including reasonable
attorney's fees if included in the judgment, are due and shall be
paid upon entry of judgment or order.
(4) Except as otherwise provided in this subdivision, Chapter 2
(commencing with Section 970) of Part 5 of Division 3.6 of Title 1 of
the Government Code for the enforcement of a judgment against a
local public entity applies to a judgment against a local public
entity that violates this section.
(5) Except as provided in subparagraph (D) of paragraph (1), this
subdivision applies to actions filed on and after January 1, 2006.
(6) The limitations period specified in subparagraphs (A), (B),
and (D) of paragraph (1) does not apply to a cause of action brought
pursuant to Chapter 9 (commencing with Section 860) of Title 10 of
Part 2 of the Code of Civil Procedure.
(k) (1) From July 1, 2009, to June 30, 2010, inclusive, an agency
may suspend all or part of its required allocation to the Low and
Moderate Income Housing Fund from taxes that are allocated to that
agency pursuant to Section 33670.
(2) An agency that suspends revenue pursuant to paragraph (1)
shall pay back to its low- and moderate-income housing fund the
amount of revenue that was suspended in the 2009-10 fiscal year
pursuant to this subdivision from July 1, 2010, to June 30, 2015,
inclusive.
(3) An agency that suspends revenue pursuant to paragraph (1) and
fails to repay or have repaid on its behalf the amount of revenue
suspended pursuant to paragraph (2) shall, commencing July 1, 2015,
be required to allocate an additional 5 percent of all taxes that are
allocated to that agency pursuant to Section 33670 for low- and
moderate-income housing for the remainder of the time that the agency
receives allocations of tax revenue pursuant to Section 33670.
(4) An agency that fails to pay or have paid on its behalf the
full amount calculated pursuant to subparagraph (J) of paragraph (2)
of subdivision (a) of Section 33690, or subparagraph (J) of paragraph
(2) of subdivision (a) of Section 33690.5, as the case may be,
shall, commencing July 1, 2010, or July 1, 2011, as applicable, be
required to allocate an additional 5 percent of all taxes that are
allocated to that agency pursuant to Section 33670 for low- and
moderate-income housing for the remainder of the time that the agency
receives allocations of tax revenue pursuant to Section 33670.
SEC. 9. Section 33334.3 of the Health and Safety Code is amended
to read:
33334.3. (a) The funds that are required by Section 33334.2 or
33334.6 to be used for the purposes of increasing, improving, and
preserving the community's supply of low- and moderate-income housing
shall be held in a separate Low and Moderate Income Housing Fund
until used.
(b) Any interest earned by the Low and Moderate Income Housing
Fund and any repayments or other income to the agency for loans,
advances, or grants, of any kind from the Low and Moderate Income
Housing Fund, shall accrue to and be deposited in, the fund and may
only be used in the manner prescribed for the Low and Moderate Income
Housing Fund.
(c) The moneys in the Low and Moderate Income Housing Fund shall
be used to increase, improve, and preserve the supply of low- and
moderate-income housing within the territorial jurisdiction of the
agency.
(d) (1) It is the intent of the Legislature that the Low and
Moderate Income Housing Fund be used to the maximum extent possible
to defray the actual cost of producing, improving, or preserving low-
and moderate-income housing and to restrict the use of Low and
Moderate Income Housing Fund moneys for planning and general
administrative costs to those which are necessary for and directly
related to lawful use of the Low and Moderate Income Housing Fund.
Subject to the restrictions set forth in paragraph (2), all of the
following costs shall be considered planning and general
administrative costs for the purposes of funds paid from the Low and
Moderate Income Housing Fund:
(A) Employee compensation costs, including salaries, wages, and
benefits, and related nonpersonnel costs, including, but not limited
to, travel, training, publications, and conferences, paid to or on
behalf of any agency, city, or county employee whose duties include
activities authorized under subdivision (e) of Section 33334.2. If
the employee spends any time on matters other than those authorized
under subdivision (e) of Section 33334.2, Low and Moderate Income
Housing Fund moneys may only be used to pay for employee compensation
and related nonpersonnel costs in proportion to the actual time that
the employee spends on activities authorized under subdivision (e)
of Section 33334.2.
(B) Employee compensation costs, including salaries, wages, and
benefits, paid to or on behalf of any agency, city, or county
employee who supervises or manages the work of an employee or
employees specified in subparagraph (A) or who provides general
administrative services, including, but not limited to, finance,
legal, human resources, information technology, and other
administrative services, that indirectly support activities
authorized under subdivision (e) of Section 33334.2 and nonpersonnel
costs, including, but not limited to, travel, training, publications,
and conferences, for such employees that are directly related to
such activities. Employee compensation costs shall (i) be justified
by an independent cost allocation study no more than six years old,
and (ii) not represent a greater proportion of the employee's total
compensation than the proportion of employees working directly and
exclusively on activities authorized under subdivision (e) of Section
33334.2 in comparison to the total number of employees supervised,
managed, or indirectly supported by that employee.
(C) Overhead costs, including, but not limited to, rent or
mortgage payments, equipment, and office supplies, provided that if
the overhead costs are shared with departments or employees whose
duties include activities other than those authorized under
subdivision (e) of Section 33334.2. The proportion of the overhead
costs paid from the Low and Moderate Income Housing Fund shall not
exceed the proportion of employees working directly and exclusively
on activities authorized under subdivision (e) of Section 33334.2
represented in comparison to the total number of employees sharing
the space, equipment, or office supplies.
(D) The total value of any contracts for agency planning or
administrative services that are related to activities authorized
under subdivision (e) of Section 33334.2 and that are not associated
with a specific housing development project allowed pursuant to
Sections 33334.2, 33334.3, and 33334.6.
(2) (A) Except as provided in subparagraph (B), an agency in any
fiscal year shall not expend more than 15 percent of the tax
increment deposited into the Low and Moderate Income Housing Fund for
planning and general administrative costs.
(B) Subparagraph (A) shall not apply to a project area-specific
Low and Moderate Income Housing Fund during the first five fiscal
years after adoption of that specific project area. Subparagraph (A)
shall apply to a new or amended project area if tax increment for
that new or amended project area is deposited into an aggregate Low
and Moderate Income Housing Fund covering more than one project area.
(3) At the time the budget is adopted, the agency shall annually
adopt a separate written resolution making a finding, based on
substantial evidence in the record, that the planning and general
administrative expenses budgeted for the fiscal year to be paid from
the Low and Moderate Income Housing Fund shall not exceed 15 percent
of the tax increment to be deposited into the Low and Moderate Income
Housing Fund for that fiscal year or that the exception in
subparagraph (B) of paragraph (2) applies. The resolution shall do
all of the following:
(A) State the percentage of tax increment to be deposited into the
Low and Moderate Income Housing Fund that is budgeted for planning
and general administration in the fiscal year.
(B) Consistent with the categories described in paragraph (1),
itemize each category of planning and general administration
expenditures from the Low and Moderate Income Housing Fund and
explicitly describe how the expenditures are necessary for the
production, improvement, or preservation of low- and moderate-income
housing.
(C) List the title of any agency, city, or county employees for
whom any portion of his or her salary, wages, benefits, or
nonpersonnel costs is paid from the Low and Moderate Income Housing
Fund, the nature of the employee's activities eligible to be paid
from the Low and Moderate Income Housing Fund, the percentage of time
the employees spends on activities eligible to be paid from the Low
and Moderate Income Housing Fund, and the percentage of the employee'
s salary, wages, benefits, and nonpersonnel costs paid from the Low
and Moderate Income Housing Fund.
(D) List any overhead costs that are paid directly or indirectly
from the Low and Moderate Income Housing Fund, identify by title and
department any other employees with whom the overhead costs are
shared, and specify the total cost of the shared overhead costs.
(4) In a challenge related to the proportionality of costs, as
required by subparagraphs (A), (B), and (C) of paragraph (1), the
agency shall bear the burden of proof to demonstrate that the costs
are proportionate.
(e) Notwithstanding paragraph (1) of subdivision (d), the agency
shall not expend moneys from the Low and Moderate Income Housing Fund
for any of the following purposes:
(1) Code enforcement.
(2) Land use planning or related activities of a planning
department, including development or revision of the general plan
housing element, except for the payment of normal project-related
planning fees applicable to all similar development projects.
(3) Lobbying. The Legislature finds and declares that this
paragraph is declaratory of existing law.
(4) Administration of nonredevelopment activities unrelated to
activities allowed pursuant to this section, and Sections 33334.2,
33334.6, and 33487.
(f) (1) The requirements of this subdivision apply to all new or
substantially rehabilitated housing units developed or otherwise
assisted with moneys from the Low and Moderate Income Housing Fund,
pursuant to an agreement approved by an agency on or after January 1,
1988. Except to the extent that a longer period of time may be
required by other provisions of law, the agency shall require that
housing units subject to this subdivision shall remain available at
affordable housing cost to, and occupied by, persons and families of
low or moderate income and very low income and extremely low income
households for the longest feasible time, but for not less than the
following periods of time:
(A) Fifty-five years for rental units. However, the agency may
replace rental units with equally affordable and comparable rental
units in another location within the community if (i) the replacement
units are available for occupancy prior to the displacement of any
persons and families of low or moderate income residing in the units
to be replaced and (ii) the comparable replacement units are not
developed with moneys from the Low and Moderate Income Housing Fund.
(B) Forty-five years for owner-occupied units. However, the agency
may permit sales of owner-occupied units prior to the expiration of
the 45-year period for a price in excess of that otherwise permitted
under this subdivision pursuant to an adopted program which protects
the agency's investment of moneys from the Low and Moderate Income
Housing Fund, including, but not limited to, an equity sharing
program which establishes a schedule of equity sharing that permits
retention by the seller of a portion of those excess proceeds based
on the length of occupancy. The remainder of the excess proceeds of
the sale shall be allocated to the agency and deposited in the Low
and Moderate Income Housing Fund. Only the units originally assisted
by the agency shall be counted towards the agency's obligations under
Section 33413.
(C) Fifteen years for mutual self-help housing units that
are occupied by and affordable to very low and low-income households.
However, the agency may permit sales of mutual self-help housing
units prior to expiration of the 15-year period for a price in excess
of that otherwise permitted under this subdivision pursuant to an
adopted program that (i) protects the agency's investment of moneys
from the Low and Moderate Income Housing Fund, including, but not
limited to, an equity sharing program that establishes a schedule of
equity sharing that permits retention by the seller of a portion of
those excess proceeds based on the length of occupancy; and (ii)
ensures through a recorded regulatory agreement, deed of trust, or
similar recorded instrument that if a mutual self-help housing unit
is sold at any time after expiration of the 15-year period and prior
to 45 years after the date of recording of the covenants or
restrictions required pursuant to paragraph (2), the agency recovers,
at a minimum, its original principal from the Low and Moderate
Income Housing Fund from the proceeds of the sale and deposits those
funds into the Low and Moderate Income Housing Fund. The remainder of
the excess proceeds of the sale not retained by the seller shall be
allocated to the agency and deposited in the Low and Moderate Income
Housing Fund. For the purposes of this subparagraph, "mutual
self-help housing unit" means an owner-occupied housing unit for
which persons and families of very low and low income contribute no
fewer than 500 hours of their own labor in individual or group
efforts to provide a decent, safe, and sanitary ownership housing
unit for themselves, their families, and others authorized to occupy
that unit. Nothing in this subparagraph precludes the agency and the
developer of the mutual self-help housing units from agreeing to
45-year deed restrictions.
(2) If land on which those dwelling units are located is deleted
from the project area, the agency shall continue to require that
those units remain affordable as specified in this subdivision.
(3) The agency shall require the recording in the office of the
county recorder of the following documents:
(A) The covenants or restrictions implementing this subdivision
for each parcel or unit of real property subject to this subdivision.
The agency shall obtain and maintain a copy of the recorded
covenants or restrictions for not less than the life of the covenant
or restriction.
(B) For all new or substantially rehabilitated units developed or
otherwise assisted with moneys from the Low and Moderate Income
Housing Fund on or after January 1, 2008, a separate document called
"Notice of Affordability Restrictions on Transfer of Property," set
forth in 14-point type or larger. This document shall contain all of
the following information:
(i) A recitation of the affordability covenants or restrictions.
If the document recorded under this subparagraph is recorded
concurrently with the covenants or restrictions recorded under
subparagraph (A), the recitation of the affordability covenants or
restrictions shall also reference the concurrently recorded document.
If the document recorded under this subparagraph is not recorded
concurrently with the covenants or restrictions recorded under
subparagraph (A), the recitation of the affordability covenants or
restrictions shall also reference the recorder's identification
number of the document recorded under subparagraph (A).
(ii) The date the covenants or restrictions expire.
(iii) The street address of the property, including, if
applicable, the unit number, unless the property is used to
confidentially house victims of domestic violence.
(iv) The assessor's parcel number for the property.
(v) The legal description of the property.
(4) The agency shall require the recording of the document
required under subparagraph (B) of paragraph (3) not more than 30
days after the date of recordation of the covenants or restrictions
required under subparagraph (A) of paragraph (3).
(5) The county recorder shall index the documents required to be
recorded under paragraph (3) by the agency and current owner.
(6) Notwithstanding Section 27383 of the Government Code, a county
recorder may charge all authorized recording fees to any party,
including a public agency, for recording the document specified in
subparagraph (B) of paragraph (3).
(7) Notwithstanding any other provision of law, the covenants or
restrictions implementing this subdivision shall run with the land
and shall be enforceable against any owner who violates a covenant or
restriction and each successor in interest who continues the
violation, by any of the following:
(A) The agency.
(B) The community, as defined in Section 33002.
(C) A resident of a unit subject to this subdivision.
(D) A residents' association with members who reside in units
subject to this subdivision.
(E) A former resident of a unit subject to this subdivision who
last resided in that unit.
(F) An applicant seeking to enforce the covenants or restrictions
for a particular unit that is subject to this subdivision, if the
applicant conforms to all of the following:
(i) Is of low or moderate income, as defined in Section 50093.
(ii) Is able and willing to occupy that particular unit.
(iii) Was denied occupancy of that particular unit due to an
alleged breach of a covenant or restriction implementing this
subdivision.
(G) A person on an affordable housing waiting list who is of low
or moderate income, as defined in Section 50093, and who is able and
willing to occupy a unit subject to this subdivision.
(8) A dwelling unit shall not be counted as satisfying the
affordable housing requirements of this part, unless covenants for
that dwelling unit are recorded in compliance with subparagraph (A)
of paragraph (3).
(9) Failure to comply with the requirements of subparagraph (B) of
paragraph (3) shall not invalidate any covenants or restrictions
recorded pursuant to subparagraph (A) of paragraph (3).
(g) "Housing," as used in this section, includes residential
hotels, as defined in subdivision (k) of Section 37912. The
definitions of "lower income households," "very low income
households," and "extremely low income households" in Sections
50079.5, 50105, and 50106 shall apply to this section. "Longest
feasible time," as used in this section, includes, but is not limited
to, unlimited duration.
(h) "Increasing, improving, and preserving the community's supply
of low- and moderate-income housing," as used in this section and in
Section 33334.2, includes the preservation of rental housing units
assisted by federal, state, or local government on the condition that
units remain affordable to, and occupied by, low- and
moderate-income households, including extremely low and very low
income households, for the longest feasible time, but not less than
55 years, beyond the date the subsidies and use restrictions could be
terminated and the assisted housing units converted to market rate
rentals. In preserving these units the agency shall require that the
units remain affordable to, and occupied by, persons and families of
low- and moderate-income and extremely low and very low income
households for the longest feasible time but not less than 55 years.
However, the agency may replace rental units with equally affordable
and comparable rental units in another location within the community
if (1) the replacement units in another location are available for
occupancy prior to the displacement of any persons and families of
low or moderate income residing in the units to be replaced and (2)
the comparable replacement units are not developed with moneys from
the Low and Moderate Income Housing Fund.
(i) Agencies that have more than one project area may satisfy the
requirements of Sections 33334.2 and 33334.6 and of this section by
allocating, in any fiscal year, less than 20 percent in one project
area, if the difference between the amount allocated and the 20
percent required is instead allocated, in that same fiscal year, to
the Low and Moderate Income Housing Fund from tax increment revenues
from other project areas. Prior to allocating funds pursuant to this
subdivision, the agency shall make the finding required by
subdivision (g) of Section 33334.2.
(j) Funds from the Low and Moderate Income Housing Fund shall not
be used to the extent that other reasonable means of private or
commercial financing of the new or substantially rehabilitated units
at the same level of affordability and quantity are reasonably
available to the agency or to the owner of the units. Prior to the
expenditure of funds from the Low and Moderate Income Housing Fund
for new or substantially rehabilitated housing units, where those
funds will exceed 50 percent of the cost of producing the units, the
agency shall find, based on substantial evidence, that the use of the
funds is necessary because the agency or owner of the units has made
a good faith attempt but been unable to obtain commercial or private
means of financing the units at the same level of affordability and
quantity.
SEC. 10. Section 33334.4 of the Health and Safety Code is amended
to read:
33334.4. (a) (1) During each 10-year period of the
implementation plan, as specified in clause (iii) of subparagraph (A)
of paragraph (2) of subdivision (a) of Section 33490, all of the
following shall apply:
(A) At least 75 percent of each agency's expenditures from the
Low and Moderate Income Housing Fund exclusive of debt service
payments shall directly assist the new construction, acquisition, and
substantial rehabilitation, or preservation of housing for persons
of extremely low, very low, or low income.
(B) At least 25 50 percent of each
agency's expenditures from the Low and Moderate Income Housing Fund
exclusive of debt service payments shall directly assist the new
construction, acquisition, and substantial rehabilitation, or
preservation of housing for persons of very low income.
(C) At least 25 percent of each agency's expenditures from the Low
and Moderate Income Housing Fund exclusive of debt service payments
shall directly assist the new construction, acquisition, and
substantial rehabilitation, or preservation of housing for persons of
extremely low income.
(2) The expenditures for extremely low income housing, pursuant
to subparagraph (C) of paragraph (1), shall count towards the
requirements of subparagraphs (A) and (B) of paragraph (1), and the
expenditures for very low and extremely low income housing pursuant
to subparagraphs (B) and (C) of paragraph (1) shall count towards the
requirements of subparagraph (A) of paragraph (1).
(3) (A) For purposes of this subdivision, "preservation" means
preserving the affordability of an assisted housing development that
is eligible for prepayment or termination or for which within the
expiration of rental restrictions is scheduled to occur within five
years, as those terms are defined in Section 65863.10 of the
Government Code.
(B) For purposes of this section, "housing for persons of
extremely low income" shall mean housing that is available at an
affordable rent or affordable housing cost to, and occupied by,
households earning 30 percent of the area median income or 30 percent
of the statewide median income, whichever is greater.
(b) Each agency shall expend over the duration of each
redevelopment implementation plan, the moneys in the Low and Moderate
Income Housing Fund to assist housing that is available to all
persons regardless of age in at least the same proportion as the
number of low-income households with a member under age 65 years
bears to the total number of low-income households of the community
as reported in the most recent census of the United States Census
Bureau.
(c) An agency that has deposited in the Low and Moderate Income
Housing Fund over the first five years of the period of an
implementation plan an aggregate that is less than two million
dollars ($2,000,000) shall have an extra five years to meet the
requirements of this section.
SEC. 11. Section 33334.12 of the Health and Safety Code is amended
to read:
33334.12. (a) Agencies shall expend moneys from the Low and
Moderate Income Housing Fund in a manner that does not accrue an
excess surplus, as defined in paragraph (1) of subdivision (c). If an
agency, after three years has elapsed from the date that the moneys
become excess surplus, has not expended or encumbered its excess
surplus, the agency shall be subject to sanctions pursuant to
subdivision (b) (e) , until the agency
has expended or encumbered its excess surplus plus an additional
amount, equal to 50 percent of the amount of the excess surplus that
remains at the end of the three-year period. The additional
expenditure shall not be from the agency's Low and Moderate Income
Housing Fund, or any other city, county, or agency special fund
related to housing, but shall be used in a manner that meets all
requirements for expenditures from that fund.
(b) For disbursements or expenditures of excess surplus made prior
to January 1, 2012, the housing authority or other public agency to
which the money is transferred shall utilize the moneys for the
purposes of, and subject to the same restrictions that are applicable
to, the redevelopment agency under this part, and for that purpose
may exercise all of the powers of a housing authority under Part 2
(commencing with Section 34200) to an extent not inconsistent with
these limitations.
(c) For disbursements or expenditures of excess surplus made prior
to January 1, 2012, notwithstanding Section 34209 or any other law,
for the purpose of accepting a transfer of, and using, moneys
pursuant to this section, the housing authority of a county or other
public agency may exercise its powers within the territorial
jurisdiction of a city redevelopment agency located in that county.
(d) For disbursements or expenditures of excess surplus made prior
to January 1, 2012, the amount of excess surplus that shall be
transferred to the housing authority or other public agency because
of a failure of the redevelopment agency to expend or encumber excess
surplus within one year shall be the amount of the excess surplus
that is not so expended or encumbered. The housing authority or other
public agency to which the moneys are transferred shall expend or
encumber these moneys for authorized purposes not later than three
years after the date these moneys were transferred from the Low and
Moderate Income Housing Fund.
(e) (1) Until a time when the agency has expended or encumbered
excess surplus moneys pursuant to subdivision (a), the agency shall
be prohibited from encumbering any funds or expending any moneys
derived from any source, except that the agency may encumber funds
and expend moneys to pay the following obligations, if any, that were
incurred by the agency prior to three years from the date the moneys
became excess surplus:
(A) Bonds, notes, interim certificates, debentures, or other
obligations issued by an agency, whether funded, refunded, assumed,
or otherwise, pursuant to Article 5 (commencing with Section 33640).
(B) Loans or moneys advanced to the agency, including, but not
limited to, loans from federal, state, or local agencies, or a
private entity.
(C) Contractual obligations which, if breached, could subject the
agency to damages or other liabilities or remedies.
(D) Obligations incurred pursuant to Section 33445.
(E) Indebtedness incurred pursuant to Section 33334.2 or 33334.6.
(F) Obligations incurred pursuant to Section 33401.
(G) An amount, to be expended for the operation and administration
of the agency, that may not exceed 75 percent of the amount spent
for those purposes in the preceding fiscal year.
(2) This subdivision shall not be construed to prohibit the
expenditure of excess surplus funds or other funds to meet the
requirement in subdivision (a) that the agency spend or encumber
excess surplus funds, plus an amount equal to 50 percent of excess
surplus, prior to spending or encumbering funds for any other
purpose.
(f) For purposes of this section:
(1) "Excess surplus" means any unexpended and unencumbered amount
in an agency's Low and Moderate Income Housing Fund, plus the amount
of funds expended from the Low and Moderate Income Housing Fund for
real property that the agency has owned for more than three years and
for which the agency has not completed one of the activities
described in subparagraphs (A) and (B) of paragraph (1) of
subdivision (a) of Section 33334.16, that exceeds the greater of one
million dollars ($1,000,000) or the aggregate amount deposited into
the Low and Moderate Income Housing Fund pursuant to Sections 33334.2
and 33334.6 during the agency's preceding four fiscal years. The
first fiscal year to be included in this computation is the 1989-90
fiscal year, and the first date on which an excess surplus may exist
is July 1, 1994.
(2) Moneys shall be deemed encumbered if committed pursuant to a
legally enforceable contract or agreement for expenditure for
purposes specified in Section 33334.2 or 33334.3.
(3) (A) For purposes of determining whether an excess surplus
exists, it is the intent of the Legislature to give credit to
agencies which convey land for less than fair market value, on which
low- and moderate-income housing is built or is to be built if at
least 49 percent of the units developed on the land are available at
affordable housing cost to lower income households for at least the
time specified in subdivision (e) of Section 33334.3, and otherwise
comply with all of the provisions of this division applicable to
expenditures of moneys from a low- and moderate-income housing fund
established pursuant to Section 33334.3. Therefore, for the sole
purpose of determining the amount, if any, of an excess surplus, an
agency may make the following calculation: if an agency sells,
leases, or grants land acquired with moneys from the Low and Moderate
Income Housing Fund, established pursuant to Section 33334.3, for an
amount which is below fair market value, and if at least 49 percent
of the units constructed or rehabilitated on the land are affordable
to lower income households, as defined in Section 50079.5, the
difference between the fair market value of the land and the amount
the agency receives may be subtracted from the amount of moneys in an
agency's Low and Moderate Income Housing Fund.
(B) If taxes that are deposited in the Low and Moderate Income
Housing Fund are used as security for bonds or other indebtedness,
the proceeds of the bonds or other indebtedness, and income and
expenditures related to those proceeds, shall not be counted in
determining whether an excess surplus exists. The unspent portion of
the proceeds of bonds or other indebtedness, and income related
thereto, shall be excluded from the calculation of the unexpended and
unencumbered amount in the Low and Moderate Income Housing Fund when
determining whether an excess surplus exists.
(C) Nothing in this subdivision shall be construed to restrict the
authority of an agency provided in any other provision of this part
to expend funds from the Low and Moderate Income Housing Fund.
(D) The department shall develop and periodically revise the
methodology to be used in the calculation of excess surplus as
required by this section. The director shall appoint an advisory
committee to advise in the development of this methodology. The
advisory committee shall include department staff, affordable housing
advocates, and representatives of the California Redevelopment
Association, the California Society of Certified Public Accountants,
the Controller, and any other authorities or persons interested in
the field that the director deems necessary and appropriate.
(g) Communities in which an agency has disbursed excess surplus
funds pursuant to this section shall not disapprove a low- or
moderate-income housing project funded in whole or in part by the
excess surplus funds if the project is consistent with applicable
building codes and the land use designation specified in any element
of the general plan as it existed on the date the application was
deemed complete. A local agency may require compliance with local
development standards and policies appropriate to and consistent with
meeting the quantified objectives relative to the development of
housing, as required in housing elements of the community pursuant to
subdivision (b) of Section 65583 of the Government Code.
(h) Notwithstanding subdivision (a), any agency that has funds
that become excess surplus on July 1, 1994, shall have, pursuant to
subdivision (a), until January 1, 1995, to decide to transfer the
funds to a housing authority or other public agency, or until January
1, 1997, to expend or encumber those funds, or face sanctions
pursuant to subdivision (e).
SEC. 12. Section 33334.16 of the Health and Safety Code is amended
to read:
33334.16. (a) (1) For each interest in real property acquired
using moneys from the Low and Moderate Income Housing Fund, the
agency shall, within five years from the date it first acquires the
property interest for the development of housing affordable to
persons and families of low and moderate income, complete at least
one of the following activities:
(A) Enter into a disposition and development agreement with a
third party for the development of housing affordable to persons and
families of low and moderate income.
(B) Obtain final land use entitlements and secure full financing
for agency development of housing affordable to persons and families
of low and moderate income.
(2) If neither of these activities has been completed within five
years, or if less than 10 percent of the dwelling units or floor area
ratio of a project is developed within 10 years from the date the
agency originally acquired the property, the agency shall reimburse
the Low and Moderate Income Housing Fund 150 percent of the amount
expended to acquire and maintain the property or of the
current fair market value of the property, whichever amount is
greater.
(3) If the agency owns two or more adjacent parcels of real
property that comprise a single redevelopment project for which the
parcels are described in the implementation plan, the date of
acquisition for all such parcels shall be the date of acquisition of
the last acquired parcel, provided that this date shall not be later
than 5 years after the acquisition of the first parcel.
(b) At any time, if a real property acquired using moneys from the
Low and Moderate Income Housing Fund is sold or transferred for a
purpose other than housing affordable to persons and families of low
and moderate income, or if the real property is developed such that
less than 50 percent of the floor area is housing affordable to
persons and families of low and moderate income, the agency, in
addition to proceeds from the sale or transfer, shall deposit into
the Low and Moderate Income Housing Fund from agency revenues other
than those required to be deposited in the Low and Moderate Income
Housing Fund an amount equal to 50 percent of the fair market value
of the property at the time it is sold or, if the property is not
sold, of the fair market value of the land at the time a building
permit is issued for the property.
SEC. 13. Section 33413 of the Health and Safety Code is amended to
read:
33413. (a) Whenever dwelling units affordable to or occupied by
persons and families of low or moderate income are destroyed or
removed from the low- and moderate-income housing market as part of a
redevelopment project that is subject to a written agreement with
the agency or where financial assistance has been provided by the
agency, the agency shall, within four years of the destruction or
removal, rehabilitate, develop, or construct, or
cause to be constructed, for rental or sale to persons and families
of low or moderate income, an equal number of replacement dwelling
units that have an equal or greater number of bedrooms as those
destroyed or removed units at affordable housing costs within the
project area. The replacement obligation shall apply to all units
affordable to low or moderate income persons or families at the time
of initiation of negotiations of a written agreement with or
financial assistance from the agency. For purposes of this section,
the rehabilitation of an existing nonresidential structure, at least
50 percent of the floor area ratio of which will be used for
residential purposes shall constitute construction.
(1) When dwelling units are destroyed or removed after September
1, 1989, 75 percent of the replacement dwelling units shall replace
dwelling units available at affordable housing cost in the same or a
lower income level of very low income households, lower income
households, and persons and families of low and moderate income, as
the persons displaced from those destroyed or removed units.
(2) When dwelling units are destroyed or removed on or after
January 1, 2002, 100 percent of the replacement dwelling units shall
be available at affordable housing cost to persons in the same or a
lower income category (extremely low, very low, low, or moderate), as
the persons displaced from those destroyed or removed units. This
paragraph is declaratory of existing law.
(3) On or after January 1, 2012, in the case where the agency is
obligated to replace vacant units, those replacement units shall be
available at housing costs in the same or lower income category
(extremely low, very low, low, or moderate) in the same proportion as
the units occupied or last occupied by low- and moderate-income
households in the property.
(4) Up to 25 percent of the replacement obligation incurred during
a five-year implementation plan may be satisfied with units that
have been rehabilitated such that after-rehabilitation value is
increased by 50 percent or more of the pre-rehabilitation value, as
evidenced by pre and post rehabilitation appraisals and, the
rehabilitated units were, at the time the dwelling units to be
replaced were destroyed or removed were both
either of the following:
(A) Occupied by extremely low or very low income households at
risk of demolition or closure due to substandard conditions.
(A) At risk of demolition or closure due to substandard conditions
and occupied by extremely low or very low income households.
(B) Vacant due to substandard conditions as defined in Section
1941.1 of the Civil Code.
(5) For each project
containing rehabilitated replacement units, the agency shall adopt a
separate written resolution, after public hearing and based on
substantial evidence, that the rehabilitation of the replacement
dwelling units complies with this subdivision.
(b) (1) Prior to the time limit on the effectiveness of the
redevelopment plan established pursuant to Sections 33333.2, 33333.6,
and 33333.10 at least 30 percent of all new and substantially
rehabilitated dwelling units developed by an agency shall be
available at affordable housing cost to, and occupied by, persons and
families of low or moderate income. Not less than 50 percent of the
dwelling units required to be available at affordable housing cost
to, and occupied by, persons and families of low or moderate income
shall be available at affordable housing cost to, and occupied by,
very low income households.
(2) (A) (i) Prior to the time limit on the effectiveness of the
redevelopment plan established pursuant to Sections 33333.2, 33333.6,
and 33333.10 at least 15 percent of all new and substantially
rehabilitated dwelling units developed within a project area under
the jurisdiction of an agency by public or private entities or
persons other than the agency shall be available at affordable
housing cost to, and occupied by, persons and families of low or
moderate income. Not less than 40 percent of the dwelling units
required to be available at affordable housing cost to, and occupied
by, persons and families of low or moderate income shall be available
at affordable housing cost to, and occupied by, very low income
households.
(ii) To satisfy this paragraph, in whole or in part, the agency
may cause, by regulation or agreement, to be available, at affordable
housing cost, to, and occupied by, persons and families of low or
moderate income or to very low income households, as applicable, two
units outside a project area for each unit that otherwise would have
been required to be available inside a project area.
(iii) On or after January 1, 2002, as used in this paragraph and
in paragraph (1), "substantially rehabilitated dwelling units" means
all units substantially rehabilitated, with agency assistance. Prior
to January 1, 2002, "substantially rehabilitated dwelling units"
shall mean substantially rehabilitated multifamily rented dwelling
units with three or more units regardless of whether there is agency
assistance, or substantially rehabilitated, with agency assistance,
single-family dwelling units with one or two units.
(iv) As used in this paragraph and in paragraph (1), "substantial
rehabilitation" means rehabilitation, the value of which constitutes
25 percent of the after rehabilitation value of the dwelling,
inclusive of the land value.
(v) To satisfy this paragraph, the agency may aggregate new or
substantially rehabilitated dwelling units in one or more project
areas, if the agency finds, based on substantial evidence, after a
public hearing, that the aggregation will not cause or exacerbate
racial, ethnic, or economic segregation.
(B) To satisfy the requirements of paragraph (1) and subparagraph
(A), the agency may purchase, or otherwise acquire or cause by
regulation or agreement the purchase or other acquisition of,
long-term affordability covenants on multifamily units that restrict
the cost of renting or purchasing those units that either: (i) are
not presently available at affordable housing cost to persons and
families of low or very low income households, as applicable; or (ii)
are units that are presently available at affordable housing cost to
this same group of persons or families, but are units that the
agency finds, based upon substantial evidence, after a public
hearing, cannot reasonably be expected to remain affordable to this
same group of persons or families.
(C) To satisfy the requirements of paragraph (1) and subparagraph
(A), the long-term affordability covenants purchased or otherwise
acquired pursuant to subparagraph (B) shall be required to be
maintained on dwelling units at affordable housing cost to, and
occupied by, persons and families of low or very low income, for the
longest feasible time but not less than 55 years for rental units and
45 years for owner-occupied units. Not more than 50 percent of the
units made available pursuant to paragraph (1) and subparagraph (A)
may be assisted through the purchase or acquisition of long-term
affordability covenants pursuant to subparagraph (B). Not less than
50 percent of the units made available through the purchase or
acquisition of long-term affordability covenants pursuant to
subparagraph (B) shall be available at affordable housing cost to,
and occupied by, very low income households.
(D) To satisfy the requirements of paragraph (1) and subparagraph
(A), each mutual self-help housing unit, as defined in subparagraph
(C) of paragraph (1) of subdivision (f) of Section 33334.3, that is
subject to a 15-year deed restriction shall count as one-third of a
unit.
(3) The requirements of this subdivision shall apply independently
of the requirements of subdivision (a). The requirements of this
subdivision shall apply, in the aggregate, to housing made available
pursuant to paragraphs (1) and (2), respectively, and not to each
individual case of rehabilitation, development, or construction of
dwelling units, unless an agency determines otherwise.
(4) Each redevelopment agency, as part of the implementation plan
required by Section 33490, shall adopt a plan to comply with the
requirements of this subdivision for each project area. The plan
shall be consistent with, and may be included within, the community's
housing element. The plan shall be reviewed and, if necessary,
amended at least every five years in conjunction with either
the housing element cycle or the plan implementation
cycle. The plan shall ensure that the requirements of this
subdivision are met every 10 years. If the requirements of this
subdivision are not met by the end of each 10-year period, the agency
shall meet these goals on an annual basis until the requirements for
the 10-year period are met. If the agency has exceeded the
requirements within the 10-year period, the agency may count the
units that exceed the requirement in order to meet the requirements
during the next 10-year period. The plan shall contain the contents
required by paragraphs (2), (3), and (4) of subdivision (a) of
Section 33490.
(c) (1) The agency shall require that the aggregate number of
replacement dwelling units and other dwelling units rehabilitated,
developed, constructed, or price restricted pursuant to subdivision
(a) or (b) remain available at affordable housing cost to, and
occupied by, persons and families of low-income, moderate-income, and
very low income households, respectively, for the longest feasible
time, but for not less than 55 years for rental units, 45 years for
home ownership units, and 15 years for mutual self-help housing
units, as defined in subparagraph (C) of paragraph (1) of subdivision
(f) of Section 33334.3, except as set forth in paragraph (2).
Nothing in this paragraph precludes the agency and the developer of
the mutual self-help housing units from agreeing to 45-year deed
restrictions.
(2) Notwithstanding paragraph (1), the agency may permit sales of
owner-occupied units prior to the expiration of the 45-year period,
and mutual self-help housing units prior to the expiration of the
15-year period, established by the agency for a price in excess of
that otherwise permitted under this subdivision pursuant to an
adopted program that protects the agency's investment of moneys from
the Low and Moderate Income Housing Fund, including, but not limited
to, an equity sharing program that establishes a schedule of equity
sharing that permits retention by the seller of a portion of those
excess proceeds, based on the length of occupancy. The remainder of
the excess proceeds of the sale shall be allocated to the agency, and
deposited into the Low and Moderate Income Housing Fund. The agency
shall, within three years from the date of sale pursuant to this
paragraph of each home ownership or mutual self-help housing unit
subject to a 45-year deed restriction, and every third mutual
self-help housing unit subject to a 15-year deed restriction, expend
funds to make affordable an equal number of units at the same or
lowest income level as the unit or units sold pursuant to this
paragraph, for a period not less than the duration of the original
deed restrictions. Only the units originally assisted by the agency
shall be counted towards the agency's obligations under Section
33413.
(3) The requirements of this section shall be made enforceable in
the same manner as provided in paragraph (7) of subdivision (f) of
Section 33334.3.
(4) If land on which the dwelling units required by this section
are located is deleted from the project area, the agency shall
continue to require that those units remain affordable as specified
in this subdivision.
(5) For each unit counted towards the requirements of subdivisions
(a) and (b), the agency shall require the recording in the office of
the county recorder of covenants or restrictions that ensure
compliance with this subdivision. With respect to covenants or
restrictions that are recorded on or after January 1, 2008, the
agency shall comply with the requirements of paragraphs (3) and (4)
of subdivision (f) of Section 33334.3.
(d) (1) This section applies only to redevelopment projects for
which a final redevelopment plan is adopted pursuant to Article 5
(commencing with Section 33360) on or after January 1, 1976, and to
areas that are added to a project area by amendment to a final
redevelopment plan adopted on or after January 1, 1976. In addition,
subdivision (a) shall apply to any other redevelopment project with
respect to dwelling units destroyed or removed from the low- and
moderate-income housing market on or after January 1, 1996,
irrespective of the date of adoption of a final redevelopment plan or
an amendment to a final redevelopment plan adding areas to a project
area. Additionally, any agency may, by resolution, elect to make all
or part of the requirements of this section applicable to any
redevelopment project of the agency for which the final redevelopment
plan was adopted prior to January 1, 1976. In addition, subdivision
(b) shall apply to redevelopment plans adopted prior to January 1,
1976, for which an amendment is adopted pursuant to Section 33333.10,
except that subdivision (b) shall apply to those redevelopment plans
prospectively only so that the requirements of subdivision (b) shall
apply only to new and substantially rehabilitated dwelling units for
which the building permits are issued on or after the date that the
ordinance adopting the amendment pursuant to Section 33333.10 becomes
effective.
(2) An agency may, by resolution, elect to require that whenever
dwelling units housing persons or families of low or moderate income
are destroyed or removed from the low- and moderate-income housing
market as part of a redevelopment project, the agency shall replace
each dwelling unit with up to three replacement dwelling units
pursuant to subdivision (a).
(e) Except as otherwise authorized by law, this section does not
authorize an agency to operate a rental housing development beyond
the period reasonably necessary to sell or lease the housing
development.
(f) Notwithstanding subdivision (a), the agency may replace
destroyed or removed dwelling units with a fewer number of
replacement dwelling units if the replacement dwelling units meet
both of the following criteria:
(1) The total number of bedrooms in the replacement dwelling units
equals or exceeds the number of bedrooms in the destroyed or removed
units. Destroyed or removed units having one or no bedroom are
deemed for this purpose to have one bedroom.
(2) The replacement units are affordable to and occupied by the
same income level of households as the destroyed or removed units.
(g) "Longest feasible time," as used in this section, includes,
but is not limited to, unlimited duration.
(h) If a court finds that an agency has failed to comply with the
requirements of this section, the court, at a minimum, shall issue an
order that prohibits the agency from issuing any debt for any
project area, except debt from which all the proceeds will be
deposited into the Low and Moderate Income Housing Fund or otherwise
used to comply with the requirements of this section, until such time
as the court finds that the agency has fully complied with the
requirements of this section.
SEC. 14. Section 33413.5 of the Health and Safety Code is amended
to read:
33413.5. Not less than 30 days prior to the execution of an
agreement for acquisition of real property, or the execution of an
agreement for the disposition and development of property, the
execution of an owner participation agreement, which agreement would
lead to the destruction or removal of dwelling units from the low-
and moderate-income housing market, the agency shall adopt by
resolution a replacement housing plan. For a reasonable time prior to
adopting a replacement housing plan by resolution, the agency shall
make available a draft of the proposed replacement housing plan for
review and comment by the project area committee, other public
agencies, and the general public.
The replacement housing plan shall include (1) the general
location of housing to be rehabilitated, developed,
rehabilitated or constructed pursuant to Section
33413, (2) a description of the occupancy and affordability
restrictions to be imposed on the replacement dwelling units, (3)
substantial evidence supporting a finding that the replacement
dwelling units will meet the needs of the households displaced from
the dwelling units that the replacement units are intended to
replace, (4) a declaration of whether the agency intends to
rehabilitate existing dwelling units pursuant to paragraph (5) of
subdivision (a) of Section 33413, (5) an adequate means of financing
such rehabilitation, development,
rehabilitation or construction, (6) a finding that the
replacement housing does not require the approval of the voters
pursuant to Article XXXIV of the California Constitution, or that
such approval has been obtained, (7) the number of dwelling units
housing persons and families of low or moderate income planned for
construction or rehabilitation, and (8) the timetable for meeting the
plan's relocation, rehabilitation, and replacement housing
objectives. A dwelling unit whose replacement is required by Section
33413 but for which no replacement housing plan has been prepared,
shall not be destroyed or removed from the low- and moderate-income
housing market until the agency has by resolution adopted a
replacement housing plan.
Nothing in this section shall prevent an agency from destroying or
removing from the low- and moderate-income housing market a dwelling
unit which the agency owns and which is an immediate danger to
health and safety. The agency shall, as soon as practicable, adopt by
resolution a replacement housing plan with respect to such dwelling
unit.
SEC. 15. Article 13 (commencing with Section 33460) is added to
Chapter 4 of Part 1 of Division 24 of the Health and Safety Code, to
read:
Article 13. Accountability Audits
33460. (a) The Legislature hereby finds and declares both of the
following:
(1) Past department audits of redevelopment agencies have
uncovered errors, omissions, and violations that have resulted in
significant repayments to agencies' Low and Moderate Income Housing
Fund, thereby providing additional resources for increasing,
improving, and preserving the supply of low- and moderate- income
housing available at affordable housing cost.
(2) Providing funding for future department audits of
redevelopment agencies will ensure that tax increment, interest, and
debt proceeds are appropriately deposited into the Low and Moderate
Income Housing Fund and that agencies make only legal expenditures
from the fund, thereby providing additional resources for increasing,
improving, and preserving the supply of low- and moderate-income
housing available at affordable housing cost. As a result, the
deposits required by this section are permissible pursuant to
paragraph (7) of subdivision (a) of Section 25.5 of Article XIII of
the California Constitution.
(b) Immediately upon receipt, each agency shall annually deposit
one-half of one-tenth (.0005) percent of any tax increment deposited
into the Low and Moderate Income Housing Fund into the Redevelopment
Agency Accountability Fund created pursuant to Section 50464.5 to be
used solely for the purpose described in subdivision (b) of that
section.
SEC. 16. Section 33487 of the Health and Safety Code is amended to
read:
33487. (a) Subject to subdivisions (a) and (b) of Section 33486,
not less than 20 percent of all taxes that are allocated to the
redevelopment agency pursuant to Section 33670 for redevelopment
projects merged pursuant to this article, irrespective of the date of
adoption of the final redevelopment plans, shall be deposited by the
agency in the Low and Moderate Income Housing Fund established
pursuant to Section 33334.3, or which shall be established for
purposes of this section. The agency shall use the moneys in this
fund to assist in the construction or rehabilitation of housing units
that will be available to, or occupied by, persons and families of
low or moderate income, as defined in Section 50093, and very low
income households, as defined in Section 50105, at an affordable
housing cost for the longest feasible time period but not less than
55 years for rental units and 45 years for owner-occupied units. For
the purposes of this subdivision, "construction and rehabilitation"
shall include acquisition of land, improvements to land; the
acquisition, rehabilitation, or construction of structures; or the
provision of subsidies necessary to provide housing for persons and
families of low or moderate income, as defined in Section 50093, and
very low income households, as defined in Section 50105.
(b) The agency may use the funds set aside by subdivision (a)
inside or outside the project area. However, the agency may only use
these funds outside the project area upon a resolution of the agency
and the legislative body that the use will be of benefit to the
project. This determination by the agency and the legislative body
shall be final and conclusive as to the issue of benefit to the
project area. The Legislature finds and declares that the provision
of replacement housing pursuant to Section 33413 is of benefit to a
project.
The Legislature finds and declares that expenditures or
obligations incurred by the agency pursuant to this section shall
constitute an indebtedness of the project.
(c) If moneys deposited in the Low and Moderate Income Housing
Fund pursuant to this section have not been committed for the
purposes specified in subdivisions (a) and (b) for a period of six
years following deposit in that fund, the agency shall offer these
moneys to the housing authority that operates within the jurisdiction
of the agency, if activated pursuant to Section 34240, for the
purpose of constructing or rehabilitating housing as provided in
subdivisions (a) and (b). However, if no housing authority operates
within the jurisdiction of the agency, the agency may retain these
moneys for use pursuant to this section.
(d)
(c) If the agency deposits less than 20 percent of
taxes allocated pursuant to Section 33670, due to the provisions of
subdivisions (a) and (b) of Section 33486, in any fiscal year, a
deficit shall be created in the Low and Moderate Income Housing Fund
in an amount equal to the difference between 20 percent of the taxes
allocated pursuant to Section 33670 and the amount deposited in that
year. The deficit, if any, created pursuant to this section
constitutes an indebtedness of the project. The agency shall
eliminate the deficit by expending taxes allocated in years
subsequent to creation of the deficit and, until the time when that
deficit has been eliminated, an agency shall not incur new
obligations for purposes other than those set forth in Section 33487,
except to comply with the terms of any resolution or other agreement
pledging taxes allocated pursuant to Section 33670 that existed on
the date of merger pursuant to this article.
(e)
(d) Notwithstanding subdivision (d) of Section 33413,
any agency that merges its redevelopment project areas pursuant to
this article shall be subject to subdivisions (a) and (c) of Section
33413.
SEC. 17. Section 33490 of the Health and Safety Code is amended to
read:
33490. (a) (1) (A) On or before December 31, 1994, and each five
years thereafter, each agency that has adopted a redevelopment plan
prior to December 31, 1993, shall adopt, after a public hearing, an
implementation plan that shall contain the specific goals and
objectives of the agency for the project area, the specific programs,
including potential projects, and estimated expenditures proposed to
be made during the next five years, and an explanation of how the
goals and objectives, programs, and expenditures will eliminate
blight within the project area and implement the requirements of
Section 33333.10, if applicable, and Sections 33334.2, 33334.4,
33334.6, and 33413. After adoption of the first implementation plan,
the parts of the implementation plan that address Section 33333.10,
if applicable, and Sections 33334.2, 33334.4, 33334.6, and 33413
shall be adopted every five years either in conjunction with the
housing element cycle or the implementation plan cycle and shall be
made available to the public on the Internet. The agency may amend
the implementation plan after conducting a public hearing on the
proposed amendment. If an action attacking the adoption, approval, or
validity of a redevelopment plan adopted prior to January 1, 1994,
has been brought pursuant to Chapter 5 (commencing with Section
33500), the first implementation plan required pursuant to this
section shall be adopted within six months after a final judgment or
order has been entered. Subsequent implementation plans required
pursuant to this section shall be adopted pursuant to the terms of
this section, and as if the first implementation plan had been
adopted on or before December 31, 1994.
(B) Adoption of an implementation plan shall not constitute an
approval of any specific program, project, or expenditure and shall
not change the need to obtain any required approval of a specific
program, project, or expenditure from the agency or community. The
adoption of an implementation plan shall not constitute a project
within the meaning of Section 21000 of the Public Resources Code.
However, the inclusion of a specific program, potential project, or
expenditure in an implementation plan prepared pursuant to
subdivision (c) of Section 33352 in conjunction with a redevelopment
plan adoption shall not eliminate analysis of those programs,
potential projects, and expenditures in the environmental impact
report prepared pursuant to subdivision (k) of Section 33352 to the
extent that it would be otherwise required. In addition, the
inclusion of programs, potential projects, and expenditures in an
implementation plan shall not eliminate review pursuant to the
California Environmental Quality Act (Division 13 (commencing with
Section 21000) of the Public Resources Code), at the time of the
approval of the program, project, or expenditure, to the extent that
it would be otherwise required.
(2) (A) A portion of the implementation plan shall address the
agency housing responsibilities and shall contain a section
addressing Section 33333.10, if applicable, and Sections 33334.2,
33334.4, and 33334.6, the Low and Moderate Income Housing Fund, and,
if subdivision (b) of Section 33413 applies, a section addressing
agency developed and project area housing. The section addressing the
Low and Moderate Income Housing Fund shall contain:
(i) The amount available in the Low and Moderate Income Housing
Fund and the estimated amounts which will be deposited in the Low and
Moderate Income Housing Fund during each of the next five years.
(ii) A housing program with estimates of the number of new,
rehabilitated, or price restricted units to be assisted during each
of the five years and estimates of the expenditures of moneys from
the Low and Moderate Income Housing Fund during each of the five
years.
(iii) A description of how the housing program will implement the
requirement for expenditures of moneys in the Low and Moderate Income
Housing Fund over a 10-year period for various groups as required by
Section 33334.4. For project areas to which subdivision (b) of
Section 33413 applies, the 10-year period within which Section
33334.4 is required to be implemented shall be the same 10-year
period within which subdivision (b) of Section 33413 is required to
be implemented. Notwithstanding the first sentence of Section 33334.4
and the first sentence of this clause, in order to allow these two
10-year time periods to coincide for the first time period, the time
to implement the requirements of Section 33334.4 shall be extended
two years, and project areas in existence on December 31, 1993, shall
implement the requirements of Section 33334.4 on or before December
31, 2014, and each 10 years thereafter rather than December 31, 2012.
For project areas to which subdivision (b) of Section 33413 does not
apply, the requirements of Section 33334.4 shall be implemented on
or before December 31, 2014, and each 10 years thereafter.
(iv) This requirement to include a description of how the housing
program will implement Section 33334.4 in the implementation plan
shall apply to implementation plans adopted pursuant to subdivision
(a) on or after December 31, 2002.
(B) For each project area to which subdivision (b) of Section
33413 applies, the section addressing the agency developed and
project area housing shall contain:
(i) Estimates of the number of new, substantially rehabilitated or
price restricted residential units to be developed or purchased
within one or more project areas, both over the life of the plan and
during the next 10 years.
(ii) Estimates of the number of units of very low, low-, and
moderate-income households required to be developed within one or
more project areas in order to meet the requirements of paragraph (2)
of subdivision (b) of Section 33413, both over the life of the plan
and during the next 10 years.
(iii) A statement of the number of units of very low, low-, and
moderate-income households which have been developed over the life
of the plan within one or more project areas which meet the
requirements of subdivision (b) of Section 33413.
(iv) Estimates of the number of agency developed residential units
which will be developed during the next five years, if any, which
will be governed by paragraph (1) of subdivision (b) of Section
33413.
(v) Estimates of the number of agency developed units for very
low, low-, and moderate-income households which will be developed by
the agency during the next five years to meet the requirements of
paragraph (1) of subdivision (b) of Section 33413.
(C) The section addressing Section 33333.10, if applicable, and
Section 33334.4 shall contain all of the following:
(i) The number of housing units needed for very low income
persons, low-income persons, and moderate-income persons as each of
those needs have been identified in the most recent determination
pursuant to Section 65584 of the Government Code, and the proposed
amount of expenditures from the Low and Moderate Income Housing Fund
for each income group during each year of the implementation plan
period.
(ii) The total population of the community and the population
under 65 years of age as reported in the most recent census of the
United States Census Bureau.
(iii) A housing program that provides a detailed schedule of
actions the agency is undertaking or intends to undertake to ensure
expenditure of the Low and Moderate Income Housing Fund in the
proportions required by Section 33333.10, if applicable, purchasing
multiple parcels pursuant to subparagraph (A) of paragraph (3) of
subdivision (a) of Section 33334.16, if applicable, and Section
33334.4.
(iv) For the previous implementation plan period, the amounts of
Low and Moderate Income Housing Fund moneys utilized to assist units
affordable to, and occupied by, extremely low income households, very
low income households, and low-income households; the number, the
location, and level of affordability of units newly constructed with
other locally controlled government assistance and without agency
assistance and that are required to be affordable to, and occupied
by, persons of low, very low, or extremely low income for at least 55
years for rental housing or 45 years for homeownership housing, and
the amount of Low and Moderate Income Housing Fund moneys utilized to
assist housing units available to families with children, and the
number, location, and level of affordability of those units.
(3) If the implementation plan contains a project that will result
in the destruction or removal of dwelling units that will have to be
replaced pursuant to subdivision (a) of Section 33413, the
implementation plan shall identify proposed locations suitable for
those replacement dwelling units. If the implementation plan contains
a project that has resulted in the destruction or removal of
dwelling units that must be replaced pursuant to subdivision (a) of
Section 33413, the implementation plan shall identify either of the
following:
(A) The replacement dwelling units that satisfy each replacement
housing obligation.
(B) In the case where dwelling units have been destroyed or
removed, but replacement units are not yet complete, the proposed
location of the replacement dwelling units.
(4) The implementation plan shall include a complete accounting
for compliance with its affordable housing obligations over the life
of the plan, including the total number of units the agency is
obligated to replace pursuant to subdivision (a) of Section 33413,
the number of units the agency is obligated to produce pursuant to
subdivision (b) of Section 33413, and the number of dwelling units
that satisfy these obligations. For each owner-occupied unit or
rental unit counted towards meeting the agency obligations, or for
each group of such units, if more than one unit is subject to the
same covenant, the implementation plan shall identify all of the
following:
(A) The street address and assessor's parcel number of the
property.
(B) The size of each unit, measured by the number of bedrooms.
(C) The housing cost of each unit, according to the categories
required by Section 33413.
(D) The year in which the construction or substantial
rehabilitation of the unit was completed.
(E) The date of recordation and document number of the
affordability covenants or restrictions required under subdivision
(f) of Section 33334.3 or subdivision (c) of Section 33413.
(F) The date on which the covenants or restrictions expire.
(G) For the projects developed prior to January 1, 2002, a
statement of the effective period of the land use controls
established in the plan at the time each unit was developed.
(H) For owner-occupied units that have changed ownership during
the reporting year, as described in subdivision (a), the date and
document number of the new affordability covenants or other documents
recorded to assure that the affordability restriction is enforceable
and continues to run with the land.
(5) Notwithstanding subparagraphs (A) and (E) of paragraph (4),
the implementation plan shall omit any property used to
confidentially house victims of domestic violence.
(6) For a project area that is within six years of the time limit
on the effectiveness of the redevelopment plan established pursuant
to Section 33333.2, 33333.6, 33333.7, or 33333.10, the portion of the
implementation plan addressing the housing responsibilities shall
specifically address the ability of the agency to comply, prior to
the time limit on the effectiveness of the redevelopment plan, with
subdivision (a) of Section 33333.8, subdivision (a) of Section 33413
with respect to replacement dwelling units, subdivision (b) of
Section 33413 with respect to project area housing, and the
disposition of the remaining moneys in the Low and Moderate Income
Housing Fund.
(7) The implementation plan shall identify the fiscal year that
the agency expects each of the following time limits to expire:
(A) The time limit for the commencement for eminent domain
proceedings to acquire property within the project area.
(B) The time limit for the establishment of loans, advances, and
indebtedness to finance the redevelopment project.
(C) The time limit for the effectiveness of the redevelopment
plan.
(D) The time limit to repay indebtedness with the proceeds of
property taxes.
(b) For a project area for which a redevelopment plan is adopted
on or after January 1, 1994, the implementation plan prepared
pursuant to subdivision (c) of Section 33352 shall constitute the
initial implementation plan and thereafter the agency after a public
hearing shall adopt an implementation plan every five years
commencing with the fifth year after the plan has been adopted.
Agencies may adopt implementation plans that include more than one
project area.
(c) Every agency, at least once within the five-year term of the
plan, shall conduct a public hearing and hear testimony of all
interested parties for the purpose of reviewing the redevelopment
plan and the corresponding implementation plan for each redevelopment
project within the jurisdiction and evaluating the progress of the
redevelopment project. The hearing required by this subdivision shall
take place no earlier than two years and no later than three years
after the adoption of the implementation plan. For a project area
that is within three years of the time limit on the effectiveness of
the redevelopment plan established pursuant to Section 33333.2,
33333.6, 33333.7, or 33333.10, the review shall specifically address
those items in paragraph (4) of subdivision (a). An agency may hold
one hearing for two or more project areas if those project areas are
included within the same implementation plan.
(d) Notice of public hearings conducted pursuant to this section
shall be published pursuant to Section 6063 of the Government Code,
mailed at least three weeks in advance to all persons and agencies
that have requested notice, and posted in at least four permanent
places within the project area for a period of three weeks and
concurrently posted on the Internet. Publication, mailing, and
posting shall be completed not less than 10 days prior to the date
set for hearing.
SEC. 18. Section 33506 is added to the Health and Safety Code, to
read:
33506. (a) An action to compel compliance with any of the
following provisions shall be commenced within 6 years from the time
limit of the effectiveness of the plan established pursuant to
Sections 33333.2, 33333.6, and 33333.10, or the
date the agency exceeds a limit on the number of dollars of taxes
that may be divided and allocated to the redevelopment agency if
required by Section 33333.4 , or the date the agency
exceeds the limit on the number of dollars of taxes in a
redevelopment plan, whichever is later:
(1) The obligation to make deposits to and expenditures from the
Low and Moderate Income Housing Fund pursuant to Sections 33334.4,
33492.16, and other similar and related provisions of law.
(2) The obligation to eliminate project deficits pursuant to
Sections 33334.6, 33487, 33492.16, and other similar and related
provisions of law.
(3) The obligation to expend or transfer
encumber excess surplus funds pursuant to Section 33334.12 and
other similar and related provisions of law.
(4) The obligation to provide relocation assistance pursuant to
Article 9 (commencing with Section 33410), Section 7260 of the
Government Code, or other applicable relocation laws.
(5) The obligation to provide replacement housing pursuant to
subdivision (a) of Section 33413, Article 9 (commencing with Section
33410), and other similar and related provisions of law.
(6) The obligation to provide inclusionary housing
pursuant to provide housing pursuant to subdivision
(b) of Section 33413 and other similar and related provisions
of law.
(7) The obligation to monitor and enforce affordability covenants
required pursuant to Section 33418.
(8) The obligation to continue the project past the effectiveness
date of the redevelopment plan pursuant to Section 33333.8.
(b) Notwithstanding subdivision (a), an agency or its successor
entity shall continue to monitor and enforce the covenants covered by
Section 33418 for the entire period of the covenant. An action to
compel compliance with the covenants required by subdivision (f)
of Section 33334.3 and subdivision (c) of Section 33413, or
the obligation to monitor and enforce such covenants pursuant to
Section 33418 shall be commenced within six years from the expiration
of the covenants.
(c) This section applies to actions pending on and after January
1, 2012.
SEC. 19. Section 50464.5 is added to the Health and Safety Code,
to read:
50464.5. (a) The Redevelopment Agency Accountability Fund is
hereby created in the State Treasury and is available, upon
appropriation, to the department for the purposes of subdivision (b).
Notwithstanding Section 16305.7 of the Government Code, any moneys
received by the department pursuant to Section 33460, and any other
sources, repayments, interest, or new appropriations, shall be
deposited in the fund. Moneys in the fund shall not be subject to
transfer to any other fund pursuant to any provision of Part 2
(commencing with Section 16300) of Division 4 of Title 2 of the
Government Code, except the Surplus Money Investment Fund. The
department may require the transfer of moneys in the fund to the
Surplus Money Investment Fund for investment pursuant to Article 4
(commencing with Section 16470) of Chapter 3 of Part 2 of Division 4
of Title 2 of the Government Code. Notwithstanding Section 16305.7 of
the Government Code, all interest, dividends, and pecuniary gains
from the investments shall accrue to the fund.
(b) With funds made available pursuant to subdivision (a), the
department shall conduct audits of redevelopment agencies to ensure
compliance with the housing provisions of the Community Redevelopment
Law. The department shall include in the audits a review of agency
compliance with production and replacement housing obligations,
recording and monitoring of affordability covenants, provision of
relocation assistance, propriety of deposits to and expenditures from
the Low and Moderate Income Housing Fund, compliance with the debt
limit of the agency, adoption of a legally sufficient implementation
plan, each of the major audit violations pursuant to subdivision (j)
of Section 33080.8, and any other accounting practice or provision of
the Community Redevelopment Law in the discretion of the department.
The department shall require that each agency take action to correct
the audit violations. If the department determines that an agency
has not corrected the audit violations within 180 days of a final
audit report, it shall forward all relevant documents to the Attorney
General for action pursuant to Section 33080.9. The department shall
make available on its Internet Web site the final audit reports, a
statement of any resolution of audit reports, or if not resolved, the
date audit reports were forwarded to the Attorney General.
