HomeMy WebLinkAbout2012-03-13 - AGENDA REPORTS - SB 654 SB 986 AB 1585 (2)CONSENT CALENDAR
DATE:
SUBJECT:
DEPARTMENT:
Agenda Item: 3
CITY OF SANTA CLARITA
AGENDA REPORT
City Manager Approval:
Item to be presented by:
March 13, 2012
Michael Murphy
STATE LEGISLATION: SB 654, SB 986, AB 1585
City Manager's Office
RECOMMENDED ACTION
City Council adopt "support" positions for Senate Bill 654, Senate Bill 986 and Assembly Bill
1585, as recommended by the City Council Ad -Hoc Subcommittee on Redevelopment. Position
statements shall be transmitted to each bill's author, members of the Santa Clarita legislative
delegation, appropriate legislative committees, Governor Brown, the California Redevelopment
Association and the League of California Cities.
BACKGROUND
On December 29, 2011, the California Supreme Court ruled in California Redevelopment
Association (CRA) v. Matosantos that the provisions of ABIX 26, Chapter 5, Statutes of
2011-2012 First Extraordinary Session were upheld. In the wake of the Supreme Court's ruling
and the failure of legislative efforts to extend the life of redevelopment agencies, redevelopment
agencies throughout California ceased to exist on February 1, 2012. As the winding down
process moves forward, specific situations have arisen, which necessitate the. introduction of new
legislation designed to address ambiguities, unintended consequences or problems not
specifically covered under the provisions of AB 1 X 26.
Three bills, SB 654, SB 986 and AB 1585, have been amended or introduced in an effort to
address technical fixes necessary to ensure clarity and resolution of problems identified thus far
with the elimination of redevelopment agencies authorized under ABIX 26.
Senate Bill 654, authored by Senate President Pro Tem Darrell Steinberg (D -06 -Sacramento),
allows the host city of a redevelopment agency under elimination to retain specified funds in the
former redevelopment agency's housing fund to ensure that communities have the ability to
increase, improve, and preserve supplies of low and moderate income housing. In the case of
increase, improve, and preserve supplies of low and moderate income housing. In the case of
Santa Clarita, this would enable the City to retain $8,896,406 to be used toward construction of
affordable housing. Senate Bill 654 has been approved by the Senate and is currently awaiting
consideration in the State Assembly. The bill has not yet been assigned to a committee.
Senate Bill 986, introduced by Senator Bob Dutton (R -3 -Rancho Cucamonga), provides
clarification that all bond proceeds initiated by the former redevelopment agency are considered
encumbered and prohibits a successor agency from sending the proceeds to the county
auditor -controller. The bond proceeds could only be used for the purposes for which the bonds
were sold and must be used by December 14, 2014. A successor agency is the newly created
agency responsible for implementation of the obligations entered into by the former
redevelopment agency. The City Council serves as the successor agency to the former
Redevelopment Agency of the City of Santa Clarita. SB 986 has been assigned to the Senate
Committee on Government and Finance. A hearing date has not yet been set for the bill.
Assembly Bill 1585, introduced by Assembly Speaker John Perez (D -46 -Los Angeles), seeks to
resolve a number of uncertainties resulting from the earlier redevelopment agency dissolution
legislation. In a provision similar to that contained within SB 654, the bill clarifies that low and
moderate income housing funds are to be transferred to the successor agency to provide
affordable housing. The housing funds are to be maintained in a separate account and at least 80
percent of the funds must be encumbered within three years.
AB 1585 also provides additional clarity to the definition of an "enforceable obligation" to
include loans specific to a project area or other specified obligations, including those between a,
city and redevelopment agency, prior to December 31, 2010. The measure also clarifies the term
"adminstrative cost allowances" to include temporary increases in order to carry out enforceable
obligations. Both of the proposed clarifications would be subject to oversight board authority.
Furthermore, AB 1585 clarifies the functions of successor agencies and oversight boards. The
bill has been assigned to the Assembly Committee on Housing and Community Development,
although no hearing date has yet been'set for AB 1585.
The City Council Ad -Hoc Subcommittee on Redevelopment met on February 16, 2012, to
consider positions on each of the bills. The Subcommittee recommends that the City Council
adopt a "support" position for SB 654, SB 986 and AB 1585.
ALTERNATIVE ACTIONS
1. Oppose SB 654, SB 986, and AB 1585.
2. Take no position on SB 654, AB 986, and AB 1585.
3. Other action as determined by the City Council.
FISCAL IMPACT
Adoption of the recommended action will not require any additional resources beyond those
currently contained within the approved FY 2011/12 budget.
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ATTACHMENTS
SB 654 available in the City Clerk's Reading File
SB 986 available in the City Clerk's Reading File
AB 1585 available in the City Clerk's Reading File
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AMENDED IN SENATE JANUARY 31, 2012
AMENDED IN SENATE JANUARY 11, 2012
AMENDED IN SENATE JANUARY 4, 2012
SENATE BILL
No. 654
Introduced by Senator Steinberg
February 18, 2011
An act to amend Sections 34171,.34176,34177, and 34178 of the
Health and Safety Code, relating to redevelopment, and deelaring-the
LEGISLATIVE COUNSEL'S DIGEST
S13 654, as amended, Steinberg. Redevelopment.
Existing law suspends various activities of redevelopment agencies
and prohibits the agencies from incurring indebtedness for a specified
period. Existing law also dissolves redevelopment agencies and
community development agencies, as of October 1, 2011, and designates
successor agencies, as defined. Existing law requires successor agencies
to wind down the affairs of the dissolved redevelopment agencies and
to, among other things, repay enforceable obligations, as defined, and
to remit unencumbered balances of redevelopment agency funds,
including housing funds, to the county auditor -controller for distribution
to taxing entities.
Existing law authorizes the city, county, or city and county that
authorized the creation of a redevelopment agency to retain the housing
assets, functions, and powers previously performed by the
redevelopment agency, excluding amounts on deposit in the Low and
Moderate Income Housing Fund.
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. This bill would revise the definition of the term "enforceable
obligation" and modify provisions relating to the transfer of housing
funds and responsibilities associated with dissolved redevelopment
agencies. The bill would provide that any amounts on deposit in the
Low and Moderate Income Housing Fund of a dissolved redevelopment
agency be transferred to specified entities. The bill would make
conforming changes.
Existing law provides that upon a specified date, agreements,
contracts, or arrangements between the city or county, or city and county
that created the redevelopment agency and the redevelopment agency
are invalid. Notwithstanding this provision, an agreement that provided
loans or other startup funds for the agency that was entered into within
2 years of the formation of the agency is valid and binds the successor
agency.
The bill would expand this exception to include an agreement
involving a loan specific to a project area and other specified obligations.
This bill would deelare that it is to take effeet immediately as an
urgeney statute-.
Vote: 113 -majority. Appropriation: no. Fiscal committee: yes.
State -mandated local program: no.
The people of the State of California do enact as follows:
1 SECTION 1. Section 34171 of the Health and Safety Code is
2 amended to read:
3 34171. The following terms shall have the following meanings:
4 (a) "Administrative budget" means the budget for administrative
5 costs of the successor agencies as provided in Section 34177.
6 (b) "Administrative cost allowance" means an amount that,
7 subject to the approval of the oversight board, is payable from
8 property tax revenues of up to 5 percent of the property tax
9 allocated to the successor agency for the 2011-12 fiscal year and
10 up to 3 percent of the property tax allocated to the Redevelopment
11 Obligation Retirement Fund money that is allocated to the
12 successor agency for each fiscal year thereafter; provided, however,
13 that the amount shall not be less than two hundred fifty thousand
14 dollars ($250,000) for any fiscal year or such lesser amount as
15 agreed to by the successor agency. However, the allowance amount
16 shall exclude any administrative costs that can be paid from bond
17 proceeds or from sources other than property tax.
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1 (c) "Designated local authority" shall mean a public entity
2 formed pursuant to subdivision (d) of Section 34173.
3 (d) (1) "Enforceable obligation" means any of the following:
4 (A) Bonds, as defined by Section 33602 and bonds issued
5 pursuant to Section 58383 of the Government Code, including the
6 required debt service, reserve set -asides, and any other payments
7 required under the indenture or similar documents governing the
8 issuance of the outstanding bonds of the former redevelopment
9 agency..
10 (B) Loans of moneys borrowed by the redevelopment agency
11 for a lawful purpose, to the extent they are legally required to be
12 repaid pursuant to a required repayment schedule or other
13 mandatory loan terms.
14 (C) Payments required by the federal government, preexisting
15 obligations to the state or obligations imposed by state law, other
16 than passthrough payments that are made by the county
17 auditor -controller pursuant to Section 34183, or legally enforceable
18 payments required in connection with the agencies' employees,
19 including, but not limited to, pension payments, pension obligation
20 debt service, unemployment payments, or other obligations
21 conferred through a collective bargaining agreement.
22 (D) Judgments or settlements entered by a competent court of
23 law or binding arbitration decisions against the former
24 redevelopment agency, other than passthrough payments that are
25 made by the county auditor -controller pursuant to Section 34183.
26 Along with the successor agency, the oversight board shall have
27 the authority and standing to appeal any judgment or to set aside
28 any settlement or arbitration decision.
29 (E) Any legally binding and enforceable agreement or contract
30 that is not otherwise void as violating the debt limit or public
31 policy. However, nothing in this act shall prohibit either the
32 successor agency, with the approval or at the direction of the
33 oversight board, or the oversight board itself from terminating any
34 existing agreements or contracts and providing any necessary and
35 required compensation or remediation for such termination.
36 (F) Contracts or agreements necessary for the administration or
37 operation of the successor agency, in accordance with this part,
38 including, but not limited to, agreements to purchase or rent office
39 space, equipment and supplies, and pay -related expenses pursuant
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to Section 33127 and for carrying insurance pursuant to Section
33134.
(G) Amounts borrowed from or payments owing to the Low
and Moderate Income Housing Fund of a redevelopment agency,
which had been deferred as of the effective date of the act adding
this part; provided, however, that the repayment schedule is
approved by the oversight board.
(2) For purposes of this part, "enforceable obligation" does not
include any agreements, contracts, or arrangements between the
city, county, or city and county that created the redevelopment
agency and the former redevelopment agency. However, written
agreements entered into (A) at the time of issuance, but in no event
later than December 31, 2010, of indebtedness obligations, and
(B) solely for the purpose of securing or repaying those
indebtedness obligations may be deemed enforceable obligations
for purposes of this part. Notwithstanding this paragraph, loan
agreements entered into between the redevelopment agency and
the city, county, or city and county that created it, within two years
of the date of creation of the redevelopment agency, or within two
years of the date of the creation of a project area if the loan is
specific to that project area, and any obligations imposed by
paragraph (1) of subdivision (d) of Section 33691 may be deemed
to be enforceable obligations.
(3) Contracts or agreements between the former redevelopment
agency and other public agencies, to perform services or provide
funding for governmental or private services or capital projects
outside of redevelopment project areas that do not provide benefit
to the redevelopment project and thus were not properly authorized
under Part 1 (commencing with Section 33000) shall be deemed
void on the effective date of this part; provided, however, that such
contracts or agreements for the provision of housing properly
authorized under Part 1 (commencing with Section 33000) shall
not be deemed void.
(e) "Indebtedness obligations" means bonds, notes, certificates
of participation, or other evidence of indebtedness, issued or
delivered by the redevelopment agency, or by a joint exercise of
powers authority created by the redevelopment agency, to
third -party investors or bondholders to finance or refinance
redevelopment projects undertaken by the redevelopment agency
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in compliance with the Community Redevelopment Law (Part 1
(commencing with Section 33000)).
(f) "Oversight board" shall mean each entity established pursuant
to Section 34179.
(g) "Recognized obligation" means an obligation listed in the
Recognized Obligation Payment Schedule.
(h) "Recognized Obligation Payment Schedule" means the
document setting forth the minimum payment amounts and due
dates of payments required by enforceable obligations for each
six-month fiscal period as provided in subdivision (m) of Section
34177.
(i) "School entity" means any entity defined as such in
subdivision (f) of Section 95 of the Revenue.and Taxation Code.
0) "Successor agency" means the county, city, or city and county
that authorized the creation of each redevelopment agency or
another entity as provided in Section 34173.
(k) "Taxing entities" means cities, counties, a city and county,
special districts, and school entities, as defined in subdivision (f)
of Section 95 of the Revenue and Taxation Code, that receive
passthrough payments and distributions of property taxes pursuant
to the provisions of this part.
SEC. 2. Section 34176 of the Health and Safety Code is
amended to read:
34176. (a) The city, county, or city and county that authorized
the creation of a redevelopment agency may elect to retain the
housing assets and functions previously performed by the
redevelopment agency. If a city, county, or city and county elects
to retain the responsibility for performing housing functions
previously performed by a redevelopment agency, all rights,
powers, duties, and obligations associated with the housing
activities of the agency, including any amounts on deposit in the
Low and Moderate Income Housing Fund, shall be transferred to
the city, county, or city and county. Any funds transferred to the
city, county, or city and county pursuant to this subdivision shall
be maintained in a separate Low and Moderate Income Housing
Fund and expended pursuant to the provisions of the Community
Redevelopment Law relating to the Low and Moderate Income
Housing Fund.
(b) If a city, county, or city and county does not elect to retain
the responsibility for performing housing functions previously
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1 performed by a redevelopment agency, all rights, powers, assets,
2 liabilities, duties, and obligations associated with the housing
3 activities of the agency, including any amounts in the Low and
4 Moderate Income Housing Fund, shall be transferred as follows:
5 (1) Where there is one local housing authority in the territorial
6 jurisdiction of the former redevelopment agency, to that local
7 housing authority.
8 (2) Where there is more than one local housing authority in the
9 territorial jurisdiction of the former redevelopment agency, to the
10 local housing authority selected by the city, county, or city and
11 county that authorized the creation of the redevelopment agency.
12 (3) Where there is no local housing authority in the territorial
13 jurisdiction of the former redevelopment agency or where the local
14 housing authority selected does not accept the responsibility for
15 performing housing functions previously performed by the former
16 redevelopment agency, to the Department of Housing and
17 Community Development.
18 (c) Commencing on the operative date of this part, the entity
19 assuming the housing functions formerly performed by the
20 redevelopment agency shall enforce affordability covenants and
21 perform related activities pursuant to applicable provisions of the
22 Community Redevelopment Law (Part 1 (commencing with
23 Section 33000)), including, but not limited to, Section 33418.
24 SEC. 3. Section 34177 of the Health and Safety Code is
25 amended to read:
26 34177. Successor agencies are required to do all of the
27 following:
28 (a) Continue to make payments, due for enforceable obligations.
29 (1) On and after October 1, 2011, and until a Recognized
30 Obligation Payment Schedule becomes operative, only payments
31 required pursuant to an enforceable obligations payment schedule
32 shall be made. The initial enforceable obligation payment schedule
33 shall be the last schedule adopted by the redevelopment agency
34 under Section 34169. However, payments associated with
35 obligations excluded from the definition of enforceable obligations
36 by paragraph (2) of subdivision (d) of Section 34171 shall be
37 excluded from the enforceable obligations payment schedule and
38 be removed from the last schedule adopted by the redevelopment
39 agency under Section 34169 prior to the successor agency adopting
40 it as its enforceable obligations payment schedule pursuant to this
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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 January 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 January
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 October 1, 2011, 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. 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.
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(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.
(i) Enforce all former redevelopment agency rights for the
benefit of the taxing entities, including, but not limited to,
continuing to collect loans, rents, and other revenues that were due
to the redevelopment agency.
(g) Effectuate transfer of housing functions and assets to the
appropriate entity designated pursuant to Section 34176.
(h) Expeditiously wind down the affairs of the redevelopment
agency pursuant to the provisions of this part and in accordance
with the direction of the oversight board.
(i) Continue to oversee development of properties until the
contracted work has been completed or the contractual obligations
of the former redevelopment agency can be transferred to other
parties. Bond proceeds shall be used for the purposes for which
bonds were sold unless the purposes can no longer be achieved,
in which case, the proceeds may be used to defease the bonds.
0) 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.
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(0 (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 November 1, 2011. 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 such a
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 December 15, 2011, for
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1 the period of January 1, 2012, to June 30, 2012, inclusive. Former
2 redevelopment agency enforceable obligation payments due, and
3 reasonable or necessary administrative costs due or incurred, prior
4 to January 1, 2012, shall be made from property tax revenues
5 received in the spring of 2011 property tax distribution, and from
6 other revenues and balances transferred to the successor agency:
7 SEC. 4. Section 34178 of the Health and Safety Code is
8 amended to read:
9 34178. (a) Commencing on the operative date of this part,
10 agreements, contracts, or arrangements between the city or county,
11 or city and county that created the redevelopment agency and the
12 redevelopment agency are invalid and shall not be binding on the
13 successor agency; provided, however, that a successor entity
14 wishing to enter or reenter into agreements with the city, county,
15 or city and county that formed the redevelopment agency that it
16 is succeeding may do so upon obtaining the approval of its
17 oversight board.
18 (b) Notwithstanding subdivision (a), any of the following
19 agreements are not invalid and may bind the successor agency:
20 (1) A duly authorized written agreement entered into at the time
21 of issuance, but in no event later than December 31, 2010, of
22 indebtedness obligations, and solely for the purpose of securing
23 or repaying those indebtedness obligations.
24 (2) A written agreement between a redevelopment agency and.
25 the city, county, or city and county that created it that provided
26 loans or other startup funds for the redevelopment agency that
27 were entered into within. two years of the formation of the
28 redevelopment agency, or within two years of the date of the
29 creation of a project area if the loan is specific to that project area,
30 and any obligations imposed by paragraph (1) of subdivision (d)
31 of Section 33691.
32 (3) A joint exercise of powers agreement in which the
33 redevelopment agency is a member of the joint powers authority.
34 However, upon assignment to the successor agency by operation
35 of the act adding this part, the successor agency's rights, duties,
36 and performance obligations under that joint exercise of powers
37 agreement shall be limited by the constraints imposed on successor
38 agencies by the act adding this part.
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40 immediate preservation ofthe publie peaee, health, or safety within
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I the meaning of Artiele 1NI of the Gonstitution and shall go into
3 in order to effeetuate the transfer of housing fitnds and
4 responsibilities assoeiated with dissolved redevelopment ageneies,
5 it is neeessary that this aet take immediate eff�et.
Cel
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SENATE BILL No. 986
Introduced by Senator Dutton
January 31, 2012
An act to amend Sections 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 introduced, Dutton. Redevelopment: bond proceeds.
Existing law dissolves redevelopment agencies and community
development agencies, as of February 1, 2012, and designates 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 provide that all bond proceeds that were generated
by the former redevelopment agency shall be deemed to be encumbered
and would prohibit a successor agency from remitting these proceeds
to the county auditor -controller. This bill would also require that the
proceeds of bonds issued by a former redevelopment agency must 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 14, 2014. This
bill would also provide that if an enforceable obligation is not entered
into by that time, or if the purpose for which the bonds were sold can
no longer be achieved, then the bond proceeds shall be used to defease
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the bonds or to purchase outstanding bonds on the open market for
cancellation.
This bill would also require the oversight board to approve of the
establishment of an enforceable obligation with respect to bond
proceeds. This bill would prohibit the oversight board from disapproving
the establishment of an enforceable obligation with respect to bond
proceeds 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:
1 SECTION 1. Section 34177 of the Health and Safety Code is
2 amended to read:
3 34177. Successor agencies are required to do all of the
4 following:
5 (a) Continue to make payments due for enforceable obligations.
6 (1) On and after October 1, 2011, and until a Recognized
7 Obligation Payment Schedule becomes operative, only payments
8 required pursuant to an enforceable obligations payment schedule
9 shall be made. The initial enforceable obligation payment schedule
10 shall be the last schedule adopted by the redevelopment agency
11 under Section 34169.. However, payments associated with
12 obligations excluded from the definition of enforceable obligations
13 by paragraph (2) of subdivision (e) of Section 34171 shall be
14 excluded from the enforceable obligations payment schedule and
15 be removed from the last schedule adopted by the redevelopment
16 agency under Section 34169 prior to the successor agency adopting
17 it as its enforceable obligations payment schedule pursuant to this
18 subdivision. The enforceable obligation payment schedule may
19 be amended by the successor agency at any public meeting and
20 shall be subject to the approval of the oversight board as soon as
21 the board has sufficient members to form a quorum.
22 (2) The Department of Finance and the Controller shall each
23 have the authority to require any documents associated with the
24 enforceable obligations to be provided to them in a manner of their
25 choosing. Any taxing entity, the department, and the Controller
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1 shall each have standing to file a judicial action to prevent a
2 violation under this part and to obtain injunctive or other
3 appropriate relief.
4 (3) Commencing on January 1, 2012, only those payments listed
5 in the Recognized Obligation Payment Schedule may be made by
6 the successor agency from the funds specified in the Recognized
7 Obligation Payment Schedule. In addition, commencing January
8 1, 2012, the Recognized Obligation Payment Schedule shall
9 supersede the Statement of Indebtedness, which shall no longer
10 be prepared nor have . any effect under the Community
1 1 Redevelopment Law.
12 (4) Nothing in the act adding this part is to be construed as
13 preventing a successor agency, with the prior approval of the
14 oversight board, as described in Section 34179, from making
15 payments for enforceable obligations from sources other than those
16 listed in the Recognized Obligation Payment Schedule.
17 (5) From October 1, 2011, to July 1, 2012, a successor agency
18 shall have no authority and is hereby prohibited from accelerating
19 payment or making any lump -sum payments that are intended to
20 prepay loans unless such accelerated repayments were required
21 prior to the effective date of this part.
22 (b) Maintain reserves in the amount required by indentures,
23 trust indentures, or similar documents governing the issuance of
24 outstanding redevelopment agency bonds.
25 (c) Perform obligations required pursuant to any enforceable
26 obligation.
27 (d) Remit unencumbered balances of redevelopment agency
28 funds to the county auditor -controller for distribution to the taxing
29 entities, including, but not limited to, the unencumbered balance
30 of the Low and Moderate Income Housing Fund of a former
31 redevelopment agency. In making the distribution, the county
32 auditor -controller shall utilize the same methodology for allocation
33 and distribution of property tax revenues provided in Section
34 34188. For purposes of this subdivision, bond proceeds of the
35 redevelopment agency shall be deemed to be encumbered, and
36 therefore the successor agency shall not remit those funds to the
37 county auditor -controller.
38 (e) Dispose of assets and properties of the former redevelopment
39 agency as directed by the oversight board; provided, however, that
40 the oversight board may instead direct the successor agency to
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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 shall be used for the purposes for which
the bonds were sold tinless the purposes ean no longer be aehieved,
in whieh ease, the proeeeds may be used to defease the ,f
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 fuoll the purposes for which
the bonds were sold by the dissolved redevelopment agency. Any
amount of bond proceeds not subject to an enforceable obligation
as of January 1, 2015, shall be used to defease the bonds or to
purchase outstanding bonds on the open market for cancellation.
If the purposes for which the bonds were sold by the dissolved
redevelopment agency 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.
0) 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:
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(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.
(0 (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 November 1, 2011. 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 stieh-a 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.
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I
6-
1 (B) The certified Recognized Obligation Payment Schedule is
2 submitted to and duly approved by the oversight board.
3 (C) A copy of the approved Recognized Obligation Payment
4 Schedule is submitted to the county auditor -controller and both
5 the Controller's office and the Department of Finance and be posted
6 on the successor agency's Internet Web site.
7 (3) The Recognized Obligation Payment Schedule shall be
8 forward looking to the next six months. The first Recognized
9 Obligation Payment Schedule shall be submitted to the Controller's
10 office and the Department of Finance by December 15, 2011, for
11 the period of January 1, 2012, to June 30, 2012, inclusive. Former
12 redevelopment agency enforceable obligation payments due, and
13 reasonable or necessary administrative costs due or incurred, prior
14 to January 1, 2012, shall be made from property tax revenues
15 received in the spring of 2011 property tax distribution, and from
16 other revenues and balances transferred to the successor agency.
17 SEC. 2. Section 34180 of the Health and Safety Code is
18 amended to read:
19 34180. All of the following successor agency actions shall first
20 be approved by the oversight board:
21 (a) The establishment of new repayment terms for outstanding
22 loans where the terms have not been specified prior to the date of
23 this part.
24 (b) Refunding of outstanding bonds or other debt of the former
25 redevelopment agency by successor agencies in order to provide
26 for savings or to finance debt service spikes; provided, however,
27 that no additional debt is created and debt service is not accelerated.
28 (c) Setting aside of amounts in reserves as required by
29 indentures, trust indentures, or similar documents governing the
30 issuance of outstanding redevelopment agency bonds.
31 (d) Merging of project areas.
32 (e) Continuing the acceptance of federal or state grants, or other
33 forms of financial assistance from either public or private sources,
34 where assistance is conditioned upon the provision of matching
35 funds, by the successor entity as successor to the former
36 redevelopment agency, in an amount greater than 5 percent.
37 (f) (1) If a city, county, or city and county wishes to retain any
38 properties or other assets for future redevelopment activities,
39 funded from its own funds and under its own auspices, it must
40 reach a compensation agreement with the other taxing entities to
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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.
0) The establishment of an enforceable obligation with respect
to bond proceeds pursuant to subdivision (i) of Section 34177.
However, the oversight board shall not disapprove the
establishment of an enforceable obligation with respect to bond
proceeds if that obligation is reasonably in furtherance of the
purposes for which the bonds were sold.
SEC. 3. 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.
0
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CALIFORNIA LEGISLATURE -2011-12 REGULAR SESSION
ASSEMBLY BILL No. 1585
Introduced by Assembly Members.John A. Perez,Atkins, Dickinson,
Hill, Mitchell, Perea, and Torres
February 2, 2012
An act to amend Sections 34171, 34176, 34177, 34179, 34180, 34181,
and 34183 of the Health and Safety Code, relating to redevelopment,
and declaring the urgency thereof, to take effect immediately.
LEGISLATIVE COUNSEL'S DIGEST
AB 1585, as introduced, John A. P6rez. Redevelopment.
Existing law dissolves redevelopment agencies and community
development agencies, as of February 1, 2012, and designates successor
agencies, as defined. Existing law requires successor agencies to wind
down the affairs of the dissolved redevelopment agencies and to, among
other things, repay enforceable obligations, as defined, and to remit
unencumbered balances of redevelopment agency funds, including
housing funds, to the county auditor -controller for distribution to taxing
entities.
Existing law authorizes the city, county, or city and county that
authorized the creation of a redevelopment agency to retain the housing
assets, functions, and powers previously performed by the
redevelopment agency, excluding amounts on deposit in the Low and
Moderate Income Housing Fund.
This bill would modify the scope of the term "enforceable obligation"
and modify provisions relating to the transfer of housing funds and
responsibilities associated with dissolved redevelopment agencies. The
bill would provide that any amounts on deposit in the Low and Moderate
Income Housing Fund of a dissolved redevelopment agency be
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transferred
2—
transferred to specified entities. The bill would make conforming
changes.
Existing law provides that, upon a specified date, agreements,
contracts, or arrangements between the city or county, or city and county
that created the redevelopment agency and the redevelopment agency
are invalid. Notwithstanding this provision, an agreement that provided
loans or other startup funds for the agency that was entered into within
2 years of the formation of the agency is valid and binds the successor
agency.
The bill would expand this exception to include an agreement
involving a loan specific to a project area and other specified obligations.
The bill would provide that other loan agreements entered into between
the redevelopment agency and the city, county, or city and county that
created it are deemed to be enforceable obligations, except as specified.
The bill would further expand upon, and clarify, the scope of the
successor agency's and the oversight board's responsibilities.
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.•
1 SECTION 1. Section 34171 of the Health and Safety Code is
2 amended to read:
3 34171. The following terms shall have the following meanings:
4 (a) "Administrative budget" means the budget for administrative
5 costs of the successor agencies as provided in Section 34177.
6 (b) "Administrative cost allowance" means an amount that,
7 subject to the approval of the oversight board, is payable from
8 property tax revenues of up to 5 percent of the property tax
9 allocated to the successor agency for the 2011-12 fiscal year and
10 up to 3 percent of the property tax allocated to the Redevelopment
11 Obligation Retirement Fund money that is allocated to the
12 successor agency for each fiscal year thereafter, except as provided
13 by subdivision (Z) of Section 34180; provided, however, that the
14 amount shall not be less than two hundred fifty thousand dollars
15 ($250,000) for any fiscal year or such lesser amount as agreed to
16 by the successor agency. However, the allowance amount shall
17 exclude any administrative costs that can be paid from bond
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proceeds or from sources other than property tax. Employee costs
associated with work on speck project implementation activities,
including, but not limited to, construction inspection, project
management, or actual construction, shall be considered
project -specific costs and are not administrative costs.
(c) "Designated local authority" shall mean a public entity
formed pursuant to subdivision (d) of Section 34173.
(d) (1) "Enforceable obligation" means any of the following:
(A) Bonds, as defined by Section 33602 and bonds issued
pursuant to Section 58383 of the Government Code, including the
required debt service, reserve set -asides, and any other payments
required under the indenture or similar documents governing the
issuance of the outstanding bonds of the former redevelopment
agency.
(B) Loans of moneys borrowed by the redevelopment agency
for a lawful purpose, to the extent they are legally required to be
repaid pursuant to a required repayment schedule or other
mandatory loan terms.
(C) Payments required by the federal government, preexisting
obligations to the state or obligations imposed by state law, other
than passthrough payments that are made by the county
auditor -controller pursuant to Section 34183, or legally enforceable
payments required in connection with the agencies' employees,
including, but not limited to, pension payments, pension obligation
debt service, unemployment payments, or other obligations
conferred through a collective bargaining agreement. Costs
incurred to fu f ll collective bargaining agreements for layoffs or
terminations of city employees who performed work directly on
behalf of the former redevelopment agency shall be considered
enforceable obligations payable from property tax funds.
(D) Judgments or settlements entered by a competent court of
law or binding arbitration decisions against the former
redevelopment agency, other than passthrough payments that are
made by the county auditor -controller pursuant to Section 34183.
Along with the successor agency, the oversight board shall have
the authority and standing to appeal any judgment or to set aside
any settlement or arbitration decision.
(E) Any legally binding and enforceable agreement or contract
that is not otherwise void as violating the debt limit or public
policy. However, nothing in this act shall prohibit either the
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successor agency, with the approval or at the direction of the
oversight board, or the oversight board itself from terminating any
existing agreements or contracts and providing any necessary and
required compensation or remediation for such termination.
(F) Contracts or agreements necessary for the administration or
operation of the successor agency, in accordance with this part,
including, but not limited to, agreements to purchase or rent office
space, equipment and supplies, and pay -related expenses pursuant
to Section 33127 and for carrying insurance pursuant to Section
33134.
(G) Amounts borrowed from or payments owing to the Low
and Moderate Income Housing Fund of a redevelopment agency,
which had been deferred as of the effective date of the act adding
this part; provided, however, that the repayment schedule is
approved by the oversight board.
(2) (A) Except as specifically provided in this
part, "enforceable obligation" does not include any agreements,
contracts, or arrangements between the city, county, or city and
county that created the redevelopment agency and the former
redevelopment agency. However, written agreements entered into
(A) at the time of issuance, but in no event later than December
31, 2010, of indebtedness obligations, and (B) solely for the
purpose of securing or repaying those indebtedness obligations
may be deemed enforceable obligations for purposes of this part.
Notwithstanding this paragraph, loan
(B) Loan agreements entered into between the redevelopment
agency and the city, county, or city and county that created it,
within two years of the date of creation of the redevelopment
agency, or within two years of the date of the creation of a project
area if the loan is speck to that project area, and any obligations
imposed by paragraph (I)- of subdivision (d) of Section 33691 may
be deemed to be enforceable obligations.
(C) Other loan agreements entered into between the
redevelopment agency and the city, county, or city and county that
created it, may be deemed to be enforceable obligations, subject
to subdivision (k) of Section 34180.
(3) Contracts or agreements between the former redevelopment
agency and other public agencies, to perform services or provide
funding for governmental or private services or capital projects
outside of redevelopment project areas that do not provide benefit
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to the redevelopment project and thus were not properly authorized
under Part 1 (commencing with Section 33000) shall be deemed
void on the effective date of this part; provided, however, that such
contracts or agreements for the provision of housing properly
authorized under Part 1 (commencing with Section 33000) shall
not be deemed void.
(e) "Indebtedness obligations" means bonds, notes, certificates
of participation, or other evidence of indebtedness, issued or
delivered by the redevelopment agency, or by a joint exercise of
powers authority created by the redevelopment agency, to
third -party investors or bondholders to finance or refinance
redevelopment projects undertaken by the redevelopment agency
in compliance with the Community Redevelopment Law (Part 1
(commencing with Section 33000)).
(f) "Oversight board" shall mean each entity established pursuant
to Section 34179.
(g) "Recognized obligation" means an obligation listed in the
Recognized Obligation Payment Schedule.
(h) "Recognized Obligation Payment Schedule" means the
document setting forth the minimum payment amounts and due
dates of payments required by enforceable obligations for each
six-month fiscal period as provided in subdivision (m) of Section
34177.
(i) "School entity" means any entity defined as such in
subdivision (f) of Section 95 of the Revenue and Taxation Code.
0) "Successor agency" means the county, city, or city and county
that authorized the creation of each redevelopment agency or
another entity as provided in Section 34173.
(k) "Taxing entities" means cities, counties, a city and county,
special districts, and school entities, as defined in subdivision (f)
of Section 95 of the Revenue and Taxation Code, that receive
passthrough payments and distributions of property taxes pursuant
to the provisions of this part.
SEC. 2. Section 34176 of the Health and Safety Code is
amended to read:
34176. (a) The city, county, or city and county that authorized
the creation of a redevelopment agency may elect to retain the
housing assets and functions previously performed by the
redevelopment agency. If a city, county, or city and county elects
to retain the responsibility for performing housing functions
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previously performed by a redevelopment agency, all rights,
powers, duties, and obligations, exeluding obligations associated
with the housing activities of the agency, including any amounts
on deposit in the Low and Moderate Income Housing Fund, shall
be transferred to the city, county, or city and county. Any funds
transferred to the city, county, or city and county pursuant to this
subdivision shall be maintained in a separate Low and Moderate
Income Housing Fund and expended pursuant to the provisions
of the Community Redevelopment Law relating to the Low and
Moderate Income Housing Fund.
(b) If a city, county, or city and county does not elect to retain
the responsibility for performing housing functions previously
performed by a redevelopment agency, all rights, powers, assets,
liabilities, duties, and obligations associated with the housing
activities of the agency,exeluding including any amounts in the
Low and Moderate Income Housing Fund, shall be transferred as
follows:
f
(2�
(1)Where there is one local housing authority in the territorial
jurisdiction of the former redevelopment agency; to that local
housing authority.
(2) Where there is more than one local housing authority in the
territorial jurisdiction of the former redevelopment agency, to the
local housing authority selected by the city, county, or city and
county that authorized the creation of the redevelopment agency.
(3) Where there is no local housing authority in the territorial
jurisdiction of the former redevelopment agency or where the local
housing authority selected does not accept the responsibility for
performing housing functions previously performed by the former
redevelopment agency, to the Department of Housing and
Community Development.
(c) Commencing on the operative date of this part, the entity
assuming the housing functions formerly performed by the
redevelopment agency shall enforce affordability covenants
and perform related activities pursuant to applicable provisions of
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the Community Redevelopment Law (Part 1 (commencing with
Section 33000), including, but not limited to, Section 33418.
(d) If the city, county, or city and county, or other public entity
that performs housing functions pursuant to this section has not
expended or encumbered at least 80 percent of the moneys in the
Low and Moderate Income Housing Fund within three years of
the date of receipt of those moneys by the entity assuming housing
responsibilities pursuant to this part, then the excess amount,
minus the amount necessarily reserved for the ongoing monitoring
and maintenance oj'affordable housingprojects, shall be allocated
to the auditor -controller for housing purposes pursuant to existing
law.
SEC. 3. 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.
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1 (3) Commencing on May 1, 2012, only those payments listed
2 in the Recognized Obligation Payment Schedule may be made by
3 the successor agency from the funds specified in the Recognized
4 Obligation Payment Schedule. In addition, commencing May 1,
5 2012, the Recognized Obligation Payment Schedule shall supersede
6 the Statement of Indebtedness, which shall no longer be prepared
7 nor have any effect under the Community Redevelopment Law.
8 (4) Nothing in the act adding this part is to be construed as
9 preventing a successor agency, with the prior approval of the
10 oversight board, as described in Section 34179, from making
11 payments for enforceable obligations from sources other than those
12 listed in the Recognized Obligation Payment Schedule.
13 (5) From February 1, 2012, to July 1, 2012, a successor agency
14 shall have no authority and is hereby prohibited from accelerating
15 payment or making any lump -sum payments that are intended to
16 prepay loans unless such accelerated repayments were required
17 prior to the effective date of this part.
18 (b) Maintain reserves in the amount required by indentures,
19 trust indentures, or similar documents governing the issuance of
20 outstanding redevelopment agency bonds.
21 (c) Perform obligations required pursuant to any enforceable
22 obligation.
23 (d) Remit unencumbered balances of redevelopment agency
24 funds to the county auditor -controller for distribution to the taxing
25 entities, ineltiding, but not limited to,
26 of the 17ow and Moderate ineome I lousing Fund of a former
27 redevelopment ageney. In making the distribution, the county
28 auditor -controller shall utilize the same methodology for allocation
29 and distribution of property tax revenues provided in Section
30 34188.
31 (e) Dispose of assets and properties of the former redevelopment
32 agency as directed by the oversight board; provided, however, that
33 the oversight board may instead direct the successor agency to
34 transfer ownership of certain assets pursuant to subdivision (a) of
35 Section 34181. The disposal is to be done expeditiously and in a
36 manner aimed at maximizing value. Proceeds from asset sales and
37 related funds that are no longer needed for approved development
38 projects or to otherwise wind down the affairs of the agency, each
39 as determined by the oversight board, shall be transferred to the
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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 shall be used for the purposes for which
bonds were sold unless the purposes can no longer be achieved,
in which case, the proceeds may be used to defease the bonds.
0) 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.
(0 (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.
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(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
February 1, 2012, 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 such a
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 May 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. 4. Section 34179 of the Health and Safety Code is
amended to read:
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34179. (a) Each successor agency shall have an oversight
board composed of seven members. The members shall elect one
of their members as the chairperson and shall report the name of
the chairperson and other members to the Department of Finance
on or before May 1, 2012. Members shall be selected as follows:
(1) One member appointed by the county board of supervisors.
(2) One member appointed by the mayor for the city that formed
the redevelopment agency.
(3) One member appointed by the largest special district, by
property tax share, with territory in the territorial jurisdiction of
the former redevelopment agency, which is of the type of special
district that is eligible to receive property tax revenues pursuant
to Section 34188.
(4) One member appointed by the county superintendent of
education to represent schools if the superintendent is elected. If
the county superintendent of education is appointed, then the
appointment made pursuant to this paragraph shall be made by the
county board of education.
(5) One member appointed by the Chancellor of the California
Community Colleges to represent community college districts in
the county.
(6) One member of the public appointed by the county board
of supervisors.
(7) One member representing the employees of the former
redevelopment agency appointed by the mayor or chair of the
board of supervisors, as the case may be, from the recognized
employee organization representing the largest number of former
redevelopment agency employees employed by the successor
agency at that time. In the case where city employees performed
administrative duties of the former redevelopment agency, the
appointment shall be made from the recognized employee
organization representing those employees. In voting to approve
a contract as an enforceable obligation, a member appointed
pursuant to this paragraph shall not be deemed to be interested
in the contract by virtue of being an employee of the successor
agency or community for purposes of Section 1090 of the
Government Code.
(8) If the county or a joint powers agency formed the
redevelopment agency, then the largest city by acreage in the
territorial jurisdiction of the former redevelopment agency may
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select one member. If there are no cities with territory in a project
area of the redevelopment agency, the county superintendent of
education may appoint an additional member to represent the
public.
(9) If there are no special districts of the type that are eligible
to receive property tax pursuant to Section 34188, within the
territorial jurisdiction of the former redevelopment agency, then
the county may appoint one member to represent the public.
(10) Where a redevelopment agency was formed by an entity
that is both a charter city and a county, the oversight board shall
be composed of seven members selected as follows: three members
appointed by the mayor of the city, where such appointment is
subject to confirmation by the county board of supervisors, one
member appointed by the largest special district, by property tax
share, with territory in the territorial jurisdiction of the former
redevelopment agency, which is the type of special district that is
eligible to receive property tax revenues pursuant to Section 34188,
one member appointed by the county superintendent of education
to represent schools, one member appointed by the Chancellor of
the California Community Colleges to represent community college
districts, and one member representing employees of the former
redevelopment agency appointed by the mayor of the city where
such an appointment is subject to confirmation by the county board
of supervisors, to represent the largest number of former
redevelopment agency employees employed by the successor
agency at that time.
(b) The Governor may appoint individuals to fill any oversight
board member position described in subdivision (a) that has not
been filled by May 15, 2012, or any member position that remains
vacant for more than 60 days.
(c) The oversight board may direct the staff of the successor
agency to perform work in furtherance of the oversight board's
duties and responsibilities under this part. The successor agency
shall pay for all of the costs of meetings of the oversight board
and may include such costs in its administrative budget. Oversight
board members shall serve without compensation or reimbursement
for expenses.
(d) Oversight board members shall have personal immunity
from suit for their actions taken within the scope of their
responsibilities as oversight board members.
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(e) A majority of the total membership of the oversight board
shall constitute a quorum for the transaction of business. A majority
vote of the total membership of the oversight board is required for
the oversight board to take action. The oversight board shall be
deemed to be a local entity for purposes of the Ralph M. Brown
Act, the California Public Records Act, and the Political Reform
Act of 1974.
(f) All notices required by law for proposed oversight board
actions shall also be posted on the successor agency's Internet
Web site or the oversight board's Internet Web site.
(g) Each member of an oversight board shall serve at the
pleasure of the entity that appointed such member.
(h) The Department of Finance may review an oversight board
action taken pursuant to the aet addittg this part. As such, all
oversight board actions shall not be effective for three business
days, pending a request for review by the department. Each
oversight board shall designate an official to whom the department
may make such requests and who shall provide the department
with the telephone number and e-mail contact information for the
purpose of communicating with the department pursuant to this
subdivision. In the event that the department requests a review of
a given oversight board action, it shall have 10 days from the date
of its request to approve the oversight board action or return it to
the oversight board for reconsideration and such oversight board
action shall not be effective until approved by the department. In
the event that the department returns the oversight board action to
the oversight board for reconsideration, the oversight board shall
resubmit the modified action for department approval and the
modified oversight board action shall not become effective until
approved by the department.
(i) Oversight boards shall have fiduciary responsibilities to
holders of enforceable obligations and the taxing entities that
benefit from distributions of property tax and other revenues
pursuant to Section 34188. Further, the provisions of Division 4
(commencing with Section 1000) of the Government Code shall
apply to oversight boards. Notwithstanding Section 1099 of the
Government Code, or any other law, any individual may
simultaneously be appointed to up to five oversight boards and
may hold an office in a city, county, city and county, special
district, school district, or community college district.
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0) Commencing on and after July 1, 2016, in each county where
more than one oversight board was created by operation of the act
adding this part, there shall be only one oversight board appointed
as follows:
(1) One member may be appointed by the county board of
supervisors.
(2) One member may be appointed by the city selection
committee established pursuant to Section 50270 of the
Government Code. In a city and county, the mayor may appoint
one member.
(3) One member may be appointed by the independent special
district selection committee established pursuant to Section 56332
of the Government Code, Tor the types of special districts that are
eligible to receive property tax revenues pursuant to Section 34188.
(4) One member may be appointed by the county superintendent
of education to represent schools if the superintendent is elected.
If the county superintendent of education is appointed, then the
appointment made pursuant to this paragraph shall be made by the
county board of education.
(5) One member may be appointed by the Chancellor of the
California Community Colleges to represent community college
districts in the county.
(6) One member of the public may be appointed by the county
board of supervisors.
(7) One member may be appointed by the recognized employee
organization representing the largest number of successor agency
employees in the county.
(k) The Governor may appoint individuals to fill any oversight
board member position described in subdivision 0) that has not
been filled by July 15, 2016, or any member position that remains
vacant for more than 60 days.
(0 Commencing on and after July 1, 2016, in each county where
only one oversight board was created by operation of the act adding
this part, then there will be no change to the composition of that
oversight board as a result of the operation of subdivision (b).
(m) Any oversight board for a given successor agency shall
cease to exist when all of the indebtedness of the dissolved
redevelopment agency has been repaid.
SEC. 5. Section 34180 of the Health and Safety Code is
amended to read:
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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) Entering into a financing arrangement, including, the
issuance of bonds, to fund required payments under an enforceable
obligation that exceed the amount ofproperty tax revenue available
to the agency during the payment period. This subdivision shall
not be deemed to authorize a successor agency to create an
additional enforceable obligation, as defined by this part, other
than for necessary financing costs.
(d) Setting aside of amounts in reserves as required by
indentures, trust indentures, or similar documents governing the
issuance of outstanding redevelopment agency bonds.
(e) Merging of project areas.
(fi 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.
(g) (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.
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(h) Establishment of the Recognized Obligation Payment
Schedule.
(i) 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.
6) 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.
(k) The establishment of a loan between a city, county, or city
and county and a redevelopment agency as an enforceable
obligation pursuant to subparagraph (C) of paragraph (2) of
subdivision (d) of Section 34171, provided that the oversight board
makes a finding that the loan was for legitimate redevelopment
purposes, had economic substance, and was based on reasonable
repayment terms.
(l) The approval of temporary increases in the administrative
cost allowance to carry out the requirements of an enforceable
obligation, to cover litigation costs, or to maintain and preserve
the value of assets while in the possession of the successor agency.
SEC. 6. Section 34181 of the Health and Safety Code is
amended to read:
34181. The oversight board shall direct the successor agency
to do all of the following:
(a) Compile a complete inventory of existing real property assets
of the former redevelopment agency, by project area. The inventory
shall include general categories of real property assets, the purpose
for which they were originally acquired, the original purchase
price of each asset and the estimated current market value. Prior
to the disposal of any nonfinancial real property asset, the
oversight board shall receive and review the inventory compiled
by the successor agency, and adopt a policy or strategy for the
disposal or transfer ofsuch assets consistent with the requirements
of subdivision (b).
(a)
(b) Dispose of all assets and properties of the former
redevelopment agency that were funded by tax increment revenues
of the dissolved redevelopment agency; provided, however, that
the oversight board may instead direct the successor agency to
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transfer ownership of those assets that were constructed and used
for a governmental purpose, such as roads, school buildings, parks,
and fire stations, or are integral to the operation of a governmental
purpose asset, such as a parkingfacility, to the appropriate public
jurisdiction pursuant to any existing agreements relating to the
construction or use of such an asset. Any compensation to be
provided to the successor agency for the transfer of the asset shall
be governed by-tke agreements, if any, relating to the construction
or use of that asset. Disposal shall be done expeditiously and in -a
j at maximizing value in an expeditious but orderly
manner that preserves the value of the asset.
(b)
(c) Cease performance in connection with and terminate all
existing agreements that do not qualify as enforceable obligations.
fe
(d) Transfer housing responsibilities and all rights, powers,
duties, and obligations along with obligations, including any
amounts on deposit in the Low and Moderate Income Housing
Fund to the appropriate entity pursuant to Section 34176.
f4)
(e) Terminate any agreement, between the dissolved
redevelopment agency and any public entity located in the same
county, obligating the redevelopment agency to provide funding
for any debt service obligations of the public entity or for the
construction, or operation of facilities owned or operated by such
public entity, in any instance where the oversight board has found
that early termination would be in the best interests of the taxing
entities.
f0
(f) Determine whether any contracts, agreements, or other
arrangements between the dissolved redevelopment agency and
any private parties should be terminated or renegotiated to reduce
liabilities and increase net revenues to the taxing entities, and
present proposed termination or amendment agreements to the
oversight board for its approval. The board may approve any
amendments to or early termination of such agreements where it
finds that amendments or early termination would be in the best
interests of the taxing entities.
SEC. 7. Section 34183 of the Health and Safety Code is
amended to read:
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34183. (a) Notwithstanding any other law, from February 1,
2012, to July 1, 2012, and for each fiscal year thereafter, the county
auditor -controller shall, after deducting administrative costs
allowed under Section 34182 and Section 95.3 of the Revenue and
Taxation Code, allocate moneys in each Redevelopment Property
Tax Trust Fund as follows:
(I) Subject to any prior deductions required by subdivision (b),
first, the county auditor -controller shall remit from the
Redevelopment Property Tax Trust Fund to each local agency and
school entity an amount of property tax revenues in an amount
equal to that which would have been received under Section 33401,
33492.140, 33607, 33607.5, 33607.7, or 33676, as those sections
read on January 1, 2011, or pursuant to any passthrough agreement
between a redevelopment agency and a taxing jurisdiction that
was entered into prior to January 1, 1994, that would be in force
during that fiscal year, had the redevelopment agency existed at
that time. The amount of the payments made pursuant to this
paragraph shall be calculated solely on the basis of passthrough
payment obligations, existing prior to the effective date of this part
and continuing as obligations of successor entities, shall occur no
later than May 16, 2012, and no later than June 1, 2012, and each
January 16 and June 1 thereafter. Notwithstanding subdivision (e)
of Section 33670, that portion of the taxes in excess of the amount
identified in subdivision (a) of Section 33670, which are
attributable to a tax rate levied by a taxing agency for the purpose
of producing revenues in an amount sufficient to make annual
repayments of the principal of, and the interest on, any bonded
indebtedness for the acquisition or improvement of real property
shall be allocated to, and when collected shall be paid into, the
fund of that taxing agency.
(2) (A) Second, on May 16, 2012, and June 1, 2012, and each
January 16 and June 1 thereafter, to each successor agency for
payments listed in its Recognized Obligation Payment Schedule
for the fiscal period beginning May 1, 2012, or the six-month fiscal
period beginning July 1, 2012, and each January 16 and June 1
thereafter, in the following order of priority:
()
(i) Debt service payments scheduled to be made for tax
allocation bonds.
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(ii) Payments scheduled to be made on revenue bonds, but only
to the extent the revenues pledged for them are insufficient to make
the payments and only where the agency's tax increment revenues
were also pledged for the repayment of the bonds.
(iii) Payments scheduled for other debts and obligations listed
in the Recognized Obligation Payment Schedule that are required
to be paid from former tax increment revenue.
(B) For purposes of allocations made pursuant to this
paragraph, the auditor -controller shall reserve additional funds
in the Redevelopment Property Tax Trust Fund at the time of the
January 16 allocation, if necessary, to cover payments made in
the second half of the calendar year that are in excess of the
amounts anticipated to be deposited in the Redevelopment Property
Tax Trust Fund from the allocation that is received in May or
June.
(3) Third, on May 16, 2012, and June 1, 2012, and each January
16 and June 1 thereafter, to each successor agency for the
administrative cost allowance, as defined in Section 34171, for
administrative costs set forth in an approved administrative budget
for those payments required to be paid from former tax increment
revenues.
(4) Fourth, on May 16, 2012, and June 1, 2012, and each January
16 and June 1 thereafter, any moneys remaining in the
Redevelopment Property Tax Trust Fund after the payments and
transfers authorized by paragraphs (1) to (3), inclusive, shall be
distributed to local agencies and school entities in accordance with
Section 34188.
(b) If the successor agency reports, no later than April 1, 2012,
and May 1, 2012, and each December 1 and May 1 thereafter, to
the county auditor -controller that the total amount available to the
successor agency from the Redevelopment Property Tax Trust
Fund allocation to that successor agency's Redevelopment
Obligation Retirement Fund, from other funds transferred from
each redevelopment agency, and from funds that have or will
become available through asset sales and all redevelopment
operations, are insufficient to fund the payments required by
paragraphs (1) to (3), inclusive, of subdivision (a) in the next
six-month fiscal period, the county auditor -controller shall notify
the Controller and the Department of Finance no later than 10 days
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1 from the date of that notification. The county auditor -controller
2 shall verify whether the successor agency will have sufficient funds
3 from which to service debts according to the Recognized
4 Obligation Payment Schedule and shall report the findings to the
5 Controller. If the Controller concurs that there are insufficient
6 funds to pay required debt service, the amount of the deficiency
7 shall be deducted first from the amount remaining to be distributed
8 to taxing entities pursuant to paragraph (4), and if that amount is
9 exhausted, from amounts available for distribution for
10 administrative costs in paragraph (3). If an agency, pursuant to the
11 provisions of Section 33492.15, 33492.72, 33607.5, 33671.5,
12 33681.15, or 33688, made passthrough payment obligations
13 subordinate to debt service payments required for enforceable
14 obligations, funds for servicing bond debt may be deducted from
15 the amounts for passthrough payments under paragraph (1), as
16 provided in those sections, but only to the extent that the amounts
17 remaining to be distributed to taxing entities pursuant to paragraph
18 (4) and the amounts available for distribution for administrative
19 costs in paragraph (3) have all been exhausted.
20 (c) The county treasurer may loan any funds from the county
21 treasury that are necessary to ensure prompt payments of
22 redevelopment agency debts.
23 (d) The Controller may recover the costs of audit and oversight
24 required under this, part from the Redevelopment Property Tax
25 Trust Fund by presenting an invoice therefor to the county
26 auditor -controller who shall set aside sufficient funds for and
27 disburse the claimed amounts prior to making the next distributions
28 to the taxing jurisdictions pursuant to Section 34188. Subject to
29 the approval of the Director of Finance, the budget of the Controller
30 may be augmented to reflect the reimbursement, pursuant to
31 Section 28.00 of the Budget Act.
32 SEC. 8. This act is an urgency statute necessary for the
33 immediate preservation of the public peace, health, or safety within
34 the meaning of Article IV of the Constitution and shall go into
35 immediate effect. The facts constituting the necessity are:
36 In order to effectuate the orderly implementation of
37 responsibilities associated with dissolved redevelopment agencies,
38 it is necessary that this act take immediate effect.
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