Bill Text: CA SB986 | 2011-2012 | Regular Session | Amended
Bill Title: Redevelopment: bond proceeds.
Spectrum: Partisan Bill (Republican 2-0)
Status: (Introduced - Dead) 2012-05-31 - Amendments by Senator Huff tabled on motion of Senator Corbett. (Ayes 21. Noes 13. Page 3747.) Read third time. Urgency clause refused adoption. (Ayes 7. Noes 18. Page 3747.) [SB986 Detail]
Download: California-2011-SB986-Amended.html
BILL NUMBER: SB 986 AMENDED
BILL TEXT
AMENDED IN SENATE MAY 29, 2012
AMENDED IN SENATE APRIL 24, 2012
AMENDED IN SENATE APRIL 11, 2012
INTRODUCED BY Senator Dutton
(Coauthor: Senator Cannella)
JANUARY 31, 2012
An act to amend Sections Section
34177 and 34180 of the Health and Safety Code,
relating to redevelopment, and declaring the urgency thereof, to take
effect immediately.
LEGISLATIVE COUNSEL'S DIGEST
SB 986, as amended, Dutton. Redevelopment: bond proceeds.
Existing law dissolved redevelopment agencies and community
development agencies, as of February 1, 2012, and provides for the
designation of successor agencies, as defined. Existing law requires
that successor entities perform certain duties, including, among
others, remitting unencumbered funds of that agency to the county
auditor-controller, and overseeing the use of bond proceeds. Existing
law requires each successor agency to have an oversight board that
is composed of 7 members who meet certain qualifications. Existing
law requires the oversight board to approve certain actions of the
successor agency.
This bill would require that unencumbered balances of funds that
are derived from tax exempt bond proceeds be used in accordance with
the requirements of this bill. This The
bill would also require that the proceeds of bonds issued by a
former redevelopment agency on or before December 31, 2010, be used
by the successor agency for the purposes for which the bonds were
sold pursuant to an enforceable obligation, as defined, that was
entered into either by the former redevelopment
agency prior to its dissolution , or is entered into by the
successor agency by December 31, 2014. This . The
bill would also provide that if the bond proceeds are not
subject to an enforceable obligation, or if the purpose for which the
bonds were sold can no longer be achieved, then the bond proceeds
shall be used to defease the bonds or to purchase outstanding bonds
on the open market for cancellation.
This bill would also authorize the oversight board to approve of
the establishment of an enforceable obligation with respect to bond
proceeds if certain requirements are met, including, among others, if
that obligation is reasonably in furtherance of the purposes for
which the bonds were sold.
This bill would declare that it is to take effect immediately as
an urgency statute.
Vote: 2/3. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 34177 of the Health and Safety Code is amended
to read:
34177. Successor agencies are required to do all of the
following:
(a) Continue to make payments due for enforceable obligations.
(1) On and after February 1, 2012, and until a Recognized
Obligation Payment Schedule becomes operative, only payments required
pursuant to an enforceable obligations payment schedule shall be
made. The initial enforceable obligation payment schedule shall be
the last schedule adopted by the redevelopment agency under Section
34169. However, payments associated with obligations excluded from
the definition of enforceable obligations by paragraph (2) of
subdivision (e) of Section 34171 shall be excluded from the
enforceable obligations payment schedule and be removed from the last
schedule adopted by the redevelopment agency under Section 34169
prior to the successor agency adopting it as its enforceable
obligations payment schedule pursuant to this subdivision. The
enforceable obligation payment schedule may be amended by the
successor agency at any public meeting and shall be subject to the
approval of the oversight board as soon as the board has sufficient
members to form a quorum.
(2) The Department of Finance and the Controller shall each have
the authority to require any documents associated with the
enforceable obligations to be provided to them in a manner of their
choosing. Any taxing entity, the department, and the Controller shall
each have standing to file a judicial action to prevent a violation
under this part and to obtain injunctive or other appropriate relief.
(3) Commencing on May 1, 2012, only those payments listed in the
Recognized Obligation Payment Schedule may be made by the successor
agency from the funds specified in the Recognized Obligation Payment
Schedule. In addition, commencing May 1, 2012, the Recognized
Obligation Payment Schedule shall supersede the Statement of
Indebtedness, which shall no longer be prepared nor have any effect
under the Community Redevelopment Law.
(4) Nothing in the act adding this part is to be construed as
preventing a successor agency, with the prior approval of the
oversight board, as described in Section 34179, from making payments
for enforceable obligations from sources other than those listed in
the Recognized Obligation Payment Schedule.
(5) From February 1, 2012, to July 1, 2012, a successor agency
shall have no authority and is hereby prohibited from accelerating
payment or making any lump-sum payments that are intended to prepay
loans unless such accelerated repayments were required prior to the
effective date of this part.
(b) Maintain reserves in the amount required by indentures, trust
indentures, or similar documents governing the issuance of
outstanding redevelopment agency bonds.
(c) Perform obligations required pursuant to any enforceable
obligation.
(d) Remit unencumbered balances of redevelopment agency funds to
the county auditor-controller for distribution to the taxing
entities, including, but not limited to, the unencumbered balance of
the Low and Moderate Income Housing Fund of a former redevelopment
agency. In making the distribution, the county auditor-controller
shall utilize the same methodology for allocation and distribution of
property tax revenues provided in Section 34188. Notwithstanding the
requirements of this subdivision, if the unencumbered balance of
funds is derived from tax exempt bond proceeds, those balances shall
be used in accordance with the requirements of subdivision (i).
(e) Dispose of assets and properties of the former redevelopment
agency as directed by the oversight board; provided, however, that
the oversight board may instead direct the successor agency to
transfer ownership of certain assets pursuant to subdivision (a) of
Section 34181. The disposal is to be done expeditiously and in a
manner aimed at maximizing value. Proceeds from asset sales and
related funds that are no longer needed for approved development
projects or to otherwise wind down the affairs of the agency, each as
determined by the oversight board, shall be transferred to the
county auditor-controller for distribution as property tax proceeds
under Section 34188.
(f) Enforce all former redevelopment agency rights for the benefit
of the taxing entities, including, but not limited to, continuing to
collect loans, rents, and other revenues that were due to the
redevelopment agency.
(g) Effectuate transfer of housing functions and assets to the
appropriate entity designated pursuant to Section 34176.
(h) Expeditiously wind down the affairs of the redevelopment
agency pursuant to the provisions of this part and in accordance with
the direction of the oversight board.
(i) Continue to oversee development of properties until the
contracted work has been completed or the contractual obligations of
the former redevelopment agency can be transferred to other parties.
Bond proceeds derived from bonds sold on or before December 31, 2010,
shall be used for the purposes for which the bonds were sold, if and
to the extent that the successor agency is either
performing an obligation required pursuant to any enforceable
obligation entered into by the former redevelopment agency ,
or is performing an enforceable obligation entered into by the
successor agency on or before December 31, 2014, to fulfill the
purposes for which the bonds were sold by the dissolved redevelopment
agency; provided, however, that this section shall not be
interpreted to grant to a successor agency the power of eminent
domain . Any amount of bond proceeds derived from bonds
sold on or before December 31, 2010, not subject to an enforceable
obligation shall be used to defease the bonds or to purchase
outstanding bonds on the open market for cancellation. If the
purposes for which bonds that were sold by the dissolved
redevelopment agency on or before December 31, 2010, can no longer be
achieved, then the proceeds shall be used to defease the bonds or to
purchase outstanding bonds on the open market for cancellation.
(j) Prepare a proposed administrative budget and submit it to the
oversight board for its approval. The proposed administrative budget
shall include all of the following:
(1) Estimated amounts for successor agency administrative costs
for the upcoming six-month fiscal period.
(2) Proposed sources of payment for the costs identified in
paragraph (1).
(3) Proposals for arrangements for administrative and operations
services provided by a city, county, city and county, or other
entity.
(k) Provide administrative cost estimates, from its approved
administrative budget that are to be paid from property tax revenues
deposited in the Redevelopment Property Tax Trust Fund, to the county
auditor-controller for each six-month fiscal period.
(l) (1) Before each six-month fiscal period, prepare a Recognized
Obligation Payment Schedule in accordance with the requirements of
this paragraph. For each recognized obligation, the Recognized
Obligation Payment Schedule shall identify one or more of the
following sources of payment:
(A) Low and Moderate Income Housing Fund.
(B) Bond proceeds.
(C) Reserve balances.
(D) Administrative cost allowance.
(E) The Redevelopment Property Tax Trust Fund, but only to the
extent no other funding source is available or when payment from
property tax revenues is required by an enforceable obligation or by
the provisions of this part.
(F) Other revenue sources, including rents, concessions, asset
sale proceeds, interest earnings, and any other revenues derived from
the former redevelopment agency, as approved by the oversight board
in accordance with this part.
(2) A Recognized Obligation Payment Schedule shall not be deemed
valid unless all of the following conditions have been met:
(A) A draft Recognized Obligation Payment Schedule is prepared by
the successor agency for the enforceable obligations of the former
redevelopment agency by March 1, 2012. From October 1, 2011, to July
1, 2012, the initial draft of that schedule shall project the dates
and amounts of scheduled payments for each enforceable obligation for
the remainder of the time period during which the redevelopment
agency would have been authorized to obligate property tax increment
had that redevelopment agency not been dissolved, and shall be
reviewed and certified, as to its accuracy, by an external auditor
designated pursuant to Section 34182.
(B) The certified Recognized Obligation Payment Schedule is
submitted to and duly approved by the oversight board.
(C) A copy of the approved Recognized Obligation Payment Schedule
is submitted to the county auditor-controller and both the Controller'
s office and the Department of Finance and be posted on the successor
agency's Internet Web site.
(3) The Recognized Obligation Payment Schedule shall be forward
looking to the next six months. The first Recognized Obligation
Payment Schedule shall be submitted to the Controller's office and
the Department of Finance by April 15, 2012, for the period of
January 1, 2012, to June 30, 2012, inclusive. Former redevelopment
agency enforceable obligation payments due, and reasonable or
necessary administrative costs due or incurred, prior to January 1,
2012, shall be made from property tax revenues received in the spring
of 2011 property tax distribution, and from other revenues and
balances transferred to the successor agency.
SEC. 2. Section 34180 of the Health and Safety
Code is amended to read:
34180. All of the following successor agency actions shall first
be approved by the oversight board:
(a) The establishment of new repayment terms for outstanding loans
where the terms have not been specified prior to the date of this
part.
(b) Refunding of outstanding bonds or other debt of the former
redevelopment agency by successor agencies in order to provide for
savings or to finance debt service spikes; provided, however, that no
additional debt is created and debt service is not accelerated.
(c) Setting aside of amounts in reserves as required by
indentures, trust indentures, or similar documents governing the
issuance of outstanding redevelopment agency bonds.
(d) Merging of project areas.
(e) Continuing the acceptance of federal or state grants, or other
forms of financial assistance from either public or private sources,
where assistance is conditioned upon the provision of matching
funds, by the successor entity as successor to the former
redevelopment agency, in an amount greater than 5 percent.
(f) (1) If a city, county, or city and county wishes to retain any
properties or other assets for future redevelopment activities,
funded from its own funds and under its own auspices, it must reach a
compensation agreement with the other taxing entities to provide
payments to them in proportion to their shares of the base property
tax, as determined pursuant to Section 34188, for the value of the
property retained.
(2) If no other agreement is reached on valuation of the retained
assets, the value will be the fair market value as of the 2011
property tax lien date as determined by the county assessor.
(g) Establishment of the Recognized Obligation Payment Schedule.
(h) A request by the successor agency to enter into an agreement
with the city, county, or city and county that formed the
redevelopment agency that it is succeeding.
(i) A request by a successor agency or taxing entity to pledge, or
to enter into an agreement for the pledge of, property tax revenues
pursuant to subdivision (b) of Section 34178.
(j) The establishment of an enforceable obligation with respect to
bond proceeds from bonds sold on or before December 31, 2010,
pursuant to subdivision (i) of Section 34177. The oversight board may
approve the establishment of an enforceable obligation with respect
to bond proceeds if both of the following conditions are met:
(1) The obligation is reasonably in furtherance of the purposes
for which the bonds were sold.
(2) The obligation is consistent with one or more of the
following:
(A) The obligation is required in order to meet a federal or state
matching funds requirement in which federal or state funds have
already been committed, and is specific to the project requiring the
obligation.
(B) The obligation is required in order to meet the requirements
for the expenditure of a local general obligation bond approved by
the voters.
(C) (i) The obligation is required to complete a project specific
to critical public infrastructure that is in, or provides benefit to,
the project area of the former redevelopment agency and the evidence
of the benefit to the community in proceeding with the obligation
substantially outweighs the resulting delay in the distribution of
tax increment to the impacted taxing entities.
(ii) For purposes of this subparagraph, "critical public
infrastructure" does not include any of the following:
(I) An automobile dealership that will be or is on a parcel of
land that has not previously been developed for urban use.
(II) A development project or business that, either directly or
indirectly, acquires, constructs, improves, rehabilitates, or
replaces property that is or would be used for a golf course or for a
racetrack, speedway or other racing venue.
(III) A development project or business that acquires, constructs,
improves, rehabilitates, or replaces property that is or would be
used for a stadium, coliseum, arena, ballpark or other sports
facility that is intended for use by a professional sports franchise.
(IV) A development project or business that, either directly or
indirectly, acquires, constructs, improves, rehabilitates, or
replaces property that is or would be used for gambling or gaming of
any kind whatsoever, including, but not limited to, casinos, gaming
clubs, bingo operations, or any facility in which banked or
percentage games, any form of gambling device, or lotteries, other
than the California State Lottery, are or will be played.
(V) A development project or business that, either directly or
indirectly, acquires, constructs, improves, rehabilitates, or
replaces property that is or would be used for retail, entertainment,
or other private purpose unrelated to public works, such as bridges,
parks, roads, municipal buildings, dams, railroads, schools,
hospitals, and other long-term, public physical assets and
facilities.
SEC. 3. SEC. 2. This act is an
urgency statute necessary for the immediate preservation of the
public peace, health, or safety within the meaning of Article IV of
the Constitution and shall go into immediate effect. The facts
constituting the necessity are:
In order to provide guidance to the successor agencies on the use
of bond proceeds, it is necessary for this act to take effect
immediately.
