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Home My WebLink About1997-03-25 - AGENDA REPORTS - SENATE BILL 1266 (2)AGENDA REPORT City Manager ApprovAal Item to be presented - Mike Murphy NEW BUSINESS DATE: March 25, 1997 DEPARTMENT: City Manager's Office The State Water Project (SWP) Contractors are sponsoring Senate Bill 1266 (Knight) relating to redevelopment. The bill, if enacted, would make it permissive for a redevelopment agency board of directors to establish for a State Water Project contractor located within the redevelopment agency, a pass through amount up to 100% of the contractor's tax increment presently retained by the redevelopment agency. In 1993, the California Legislature enacted Assembly Bill 1290, Chapter 942, establishing statutory requirements for financial payments of redevelopment agencies. In short, AB 1290 stopped a practice prevalent among redevelopment agencies in which they negotiated differing pass through rates with affected taxing entities. In 1995, the California Legislature authorized a pass through of funds from redevelopment agencies to SWP Contractors for purposes of making payments on State Water Project bonds. California has 29 State Wat&r Project Contractors, including the Castaic Lake Water Agency (CLWA). Senate Bill 1266 creates permissive exemption authority for all funds of a State Water Project Contractor which would otherwise be diverted to the redevelopment agency. If enacted, a State Water Project Contractor could apply to the redevelopment agency in which the SWP is located for a permissive exemption up to 100% of the money which would otherwise be taken by the redevelopment agency. The exemption, if any, and its final amount would be determined solely by -the affected redevelopment agency's board of directors. In the case of Santa Clarita, should Senate Bill 1266 be enacted, the Santa Clarita redevelopment agency board of directors would have the authority to grant a pass through to CLWA. CLWA General Manager Bob Sagehorn has stated to staff that it is the �� PPH0VF,;01 Ag enda Ituems.1 intention of CLWA to seek a 100% pass through shortly after the legislation becomes effective, presumably January, 1998. Although this legislation originates from CLWA, there is sufficient interest among the SWP Contractors for the association to sponsor the bill addressing a statewide concern. On February 28, 1997, Santa Clarita City Manager George Caravalho, Intergovernmental Relations Officer Mike Murphy, CLWA Board President Bill Cooper and General Manager Bob Sagehorn met with Newhall Land and Farming Company Chief Executive Officer Tom Lee, at Mr. Lee's invitation, to discuss local redevelopment and SB 1266, in particular, During the discussion, it became apparent that CLWA believes that SB 1266 provides a method by which CLWA can end redevelopment disagreements with the City of Santa Clarita. It was requested by CLWA, that the City of Santa Clarita take a neutral position on the bill. In exchange for a neutral stance on SB 1266, Mr. Sagehorn stated that he would make every effort to "minimize" any legal actions brought against the City by CLWA over the redevelopment issue. This does not guarantee that in the event the bill fails to pass for whatever reason, or if enacted and CLWA does not receive its requested exemption, that CLWA. would not initiate a legal action against the City's redevelopment agency. From the City's perspective, a neutral stance means that the City would not attempt to sway the legislative deliberations in favor of or opposition to SB 1266, with the understanding that Santa Clarita would not be referenced by CLWA, any of its contractors or by the SWP Contractors to secure passage of the bill. Even if the measure is enacted into law, the pass through is not automatic. An affirmative action granting a pass through at a specified level must be undertaken by the redevelopment agency board of directors. While this bill provides an avenue for resolution of CLWA's ongoing disagreements with the Santa Clarita relative to redevelopment in downtown Newhall, there are several issues which the City Council should be aware. First, the bill would have statewide application. Any SWP Contractor located within any redevelopment agency would be eligible to request an exemption. Second, this legislation must carve out a niche for SWP Contractors which other taxing agencies could not use as a model to seek future legislative relief from participation in redevelopment agencies. Third, AB 1290 sought to eliminate special pass throughs and this bill may be viewed by some as an effort to undermine the spirit of AB 1290. RECOMMENDED ACTION City Council adopt a formal position of "neutral" regarding Senate Bill 1266. ATTACHMENTS Senate Bill 1266 MPM.st,1266ag.dw Then, press <ENTER> to continue => In bill text, brackets have special meaning: [A> <A] contains added text, and [D> <D] contains deleted text. California 1997-98 Regular Session 1997 CA SB 1266 Introduced 970228 Knight SENATE BILL No. 1266 INTRODUCED BY Senator Knight FEBRUARY 28,1997 An act to amend Section 33607.8 of the Health and Safety Code, relating to redevelopment. LEGISLATIVE COUNSEL'S DIGEST SB 1266, as introduced, Knight. Redevelopment: redevelopment agencies: payments to affected taxing agencies: State Water Resources Development System. Existing law, known as the Community Redevelopment Law, authorizes the establishment of redevelopment agencies in communities to address the effects of blight, as defined, in blighted areas of those communities known as project areas. The existing Community Redevelopment Law requires that, with regard to redevelopment plans adopted, or amended to include new territory, after January 1, 1994, redevelopment agencies make specified payments to local taxing entities that are affected by activities of the redevelopment agencies. The Community Redevelopment Law also provides that these payments are the exclusive payments that redevelopment agencies are required to make to affected taxing entities during the term of a redevelopment plan. Existing law further authorizes a redevelopment agency to make payments from tax increment funds to an affected taxing entity that is a state water supply contractor, subject to the following requirements: (1) the payment shall not exceed the amount that, but for the activities of the redevelopment agency, otherwise would have been received by the affected taxing entity pursuant to a tax that was originally approved by the state's voters prior to July 1, 1978, and (2) the payments shall be made for the purpose of funding the payments of the state water supply contractor pursuant to its water supply contract with the Department of Water Resources for the costs of building, operating, maintaining, and replacing the State Water Resources Development System. This bill would revise the requirements incident to the authorization of a redevelopment agency to make payments from tax increment funds to an affected taxing entity that is a state water supply contractor, by changing the first requirement to provide that the payments may not exceed the amount that, but for the activities of the redevelopment agency, otherwise would have been received by the affected taxing entity from an ad valorem property tax, and by deleting the second requirement. Vote: majority. Appropriation: no. Fiscal committee: no. State -mandated local program: no. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 33607.8 of the Health and Safety Code is amended to read: 33607.8. (a) Notwithstanding any other provision of law, a redevelopment agency may make payments from tax increment funds to an affected taxing entity that is a state water supply contractor !P,, in eteeardanee with beth of the fell * . nts! gtE) R�>�] [A> . <A] The payment [D;; shall -�D! [A> may <A] not exceed the amount that, but for the activities of the redevelopment agency, otherwise would have been received by.the affected taxing entity [P�- plffsuaBt tQ 2 4DI [A> from an ad valorem property <A] tax [D> -that was originally appro*ed by the �_,_ t �Kers prie�rlte Jub i, 1978 -.-<BJ IRS vi 4k;4;Z 9U;i�A;4 UJ Pi i; ug gi i (b) Allocations made by a redevelopment agency for payments made pursuant to subdivision (a) shall not cause any reduction in payments to an affected taxing entity pursuant to paragraph (2) of subdivision (a) of Section 33607.5. (c) For purposes of this section: [D>--(I)-l'State-Water-Reseurces-Development-System�L��nm,- mAgning-as-used-in-Sgation,12cl.q1 oftbaWater-Code—,Z] [D> (2) "State <D] [A> State <A] water supply [D->-eantraeter" �D] [A> contractor <A] has the same meaning as used in Section 11975 of the Water Code. END OF REPORT Enter Bill # (or END to exit) =>