CDC - Item 4A - Update on Impacts of State Action to Eliminate Redevelopment AgenciesROSEMEAD COMMUNITY
DEVELOPMENT COMMISSION
STAFF REPORT
TO: CHAIRMAN AND COMMISSION MEMBERS AND
MAYOR AND CITY COUNCIL (j
FROM: JEFF ALLRED, CITY MANAGER /EXECUTIVE DIRECTOR
DATE: JANUARY 24, 2012 l �
SUBJECT: UPDATE ON IMPACTS OF STATE ACTION TO ELIMINATE
RED EVELOPMENT AGENCIES
SUMMARY
Due to actions of State lawmakers and an adverse decision of the California Supreme
Court issued on December 29, 2011, all local redevelopment agencies, including the
Rosemead Community Development Commission (CDC), will be dissolved on February
1, 2012. Recently, legislation known as SIB 659 (Padilla) has been introduced in an
effort to postpone the dissolution date to April 15, 2012; however, whether such a
temporary legislative reprieve will be passed by the legislature and signed by the
Governor is unknown at this time. Also, SIB 654 (Steinberg) has been introduced, which
would enable the City to retain the existing fund balance in the CDC Low & Moderate
Housing Fund to continue the operation of low- income housing facilities and activities;
however, the prospects for enactment of that legislation are unclear. The stark reality is
that redevelopment revenues and programs that have been relied upon for decades to
improve quality of life in this community will abruptly end this fiscal year. In the wake of
the elimination of redevelopment, the City will be left with an immediate annual deficit of
$1.875 million on top of another $1 million in other unavoidable cost increases
anticipated in the upcoming fiscal year. Barring any eleventh hour action by the State,
tonight's meeting will be the final meeting of the Rosemead Community Development
Commission.
Recommendation:
That the City Council and Commission: 1) support SIB 659 (Padilla) and SIB 654
(Steinberg) in an effort to obtain some measure of relief to the devastating
consequences of actions taken by State lawmakers to eliminate local redevelopment
funding and programs; and 2) receive and file this report.
BACKGROUND /ANALYSIS
Over the past several years, public facilities and the quality of life in Rosemead have
been improved through actions of the Community Development Commission and its' use
APPROVED FOR CITY COUNCIL AGENDA:
ITEM NO.
City Council Meeting
January 24, 2012
Page 2 of 4
of local redevelopment funds. These projects have included many significant
accomplishments including, but not limited to, the following:
• Construction of the Rosemead Community Recreation Center;
• Construction of Fire Station No. 4 on San Gabriel Blvd utilized by the Los
Angeles County Fire Department;
• Construction of the Public Safety Center on Garvey Avenue utilized by the Los
Angeles County Sheriffs Department and City code enforcement;
• Construction of the Garvey Community Center;
• Construction and operation of the Garvey Senior Citizen Housing Center with
ongoing rent subsidies and services for low- income seniors;
• Construction and operation of the Angelus Senior Citizen Housing Center with
ongoing rent subsidies and services for low- income seniors;
• Construction of infrastructure, i.e., landscaped street medians, sidewalks,
lighting, etc. along commercial corridors including Garvey Ave., Valley Blvd., San
Gabriel Blvd., Del Mar Ave., Walnut Grove Blvd., and Rosemead Blvd.
• Construction of the new Rosemead Aquatics Center;
• Construction of the Rosemead Park walking trail;
• Construction of the Rosemead High School track;
• Acquisition and sale of a blighted commercial property on Glendon Way to a
private firm for renovation and expansion;
• Partnered with a community development housing organization to acquire
residential properties for low /moderate housing in conjunction with federal HUD
funds to meet State Regional Housing Needs mandates and federal
requirements.
Funding Impacts
The elimination of redevelopment funding and the Community Development
Commission will have devastating impacts upon the City of Rosemead's General Fund
budget and the City's ability to continue various service delivery programs. The
elimination of redevelopment funds will create an immediate General Fund budget
deficit of $1.875 million per year. Examples of affected services and budget impacts
include the following:
City Council Meeting
January 24, 2012
Page 3 of 4
Salaries and benefits $1,205,600
Rosemead Chamber of Commerce support $48,000
Professional Planning /Consulting services $50,000
Legal and audit services $42,500
Meetings /Supplies /Dues $13,500
Senior Housing Centers and Subsidies $463,100
This deficit caused by the State's precipitous actions is in addition to another $1 million
of other unavoidable cost increases anticipated in the upcoming fiscal year for items
such as escalating utility rates, insurance costs, retirement rates, Sheriff contract costs,
etc. The action of State lawmakers to eliminate local redevelopment agencies has the
effect of creating a fiscal crisis for the City by more than doubling or even tripling the
size of the projected General Fund structural budget imbalance for the upcoming fiscal
year.
Successor Agency and Oversight Board
At its meeting of January 10, 2012, the Rosemead City Council took action to serve as
the "successor agency" to the Community Development Commission. In this role, the
City Council will be responsible for continuing to make payments for "enforceable
obligations" of the dissolved Community Development Commission such as State -
mandated pass- through payments to other governmental taxing agencies totaling $1.72
million per year, and existing bond debt service obligations totaling $2.45 million per
year. All actions of the City Council taken in its role as successor agency will be subject
to approval of a seven - member Oversight Board that is to be created in accordance with
State law by May 1, 2012.
Existing Bond Proceeds
Currently, the Community Development Commission has approximately $7 million of
locally generated redevelopment bond proceeds on deposit. These bond proceeds
were generated by a 2010 bond issue approved by the Commission and City Council in
2010 for various local infrastructure and facility improvements. The City Attorney and
staff will make a case that these locally generated bond proceeds are legally bound to
be expended on the infrastructure and facility projects for which the bonds were sold.
However, at this time there is no guarantee that argument will be upheld. The
expenditure of these bond proceeds will be subject to approval by the Oversight Board.
Low - income Senior Housing Facilities and Activities
Currently, the Community Development Commission provides annual funding of
City Council Meeting
January 24, 2012
Page 4 of 4
$463,100 for two low- income senior citizen housing facilities —the Garvey Senior
Housing Center and the Angelus Senior Housing Center. The City owns the land for
these facilities and the Rosemead Housing Development owns the buildings. The
annual $463,100 expenditures include $183,000 paid the City in land lease payments,
and $226,200 paid to the City for overhead expenses and insurance. The remaining
annual costs of $53,500 are budgeted to subsidize the rents and cover general utility
and operational costs. The agreements between the Community Development
Commission, the Housing Development Corporation and the City specifically provide
that any funding shortfalls associated with these facilities are the responsibility of the
Community Development Commission. However, with the dissolution of the Community
Development Commission, continued funding for these low income housing facilities
and activities are in question. The City Attorney and staff will make the case that these
contracts and obligations are legally binding and must be maintained with funding from
the existing redevelopment tax increment levy; however, currently, there is no
guarantee that that will be the case.
In an effort to address some of the low- income housing issues created by the
elimination of local redevelopment agencies, SIB 654 (Steinberg) has been introduced
in the legislature. Staff and the City Attorney are hopeful for the passage of this
legislation which would enable the City to retain use of the existing low /moderate
income housing fund balance of the Community Development Commission to continue
the operation of these low- income senior citizen housing facilities. However, the
prospects for enactment of this legislation are unclear at this time.
Attachments —SB 659 (Padilla)
SIB 654 (Steinberg)
AMENDED IN ASSEMBLY JANUARY 13, 2012
AMENDED IN SENATE MAY 11, 2011
AMENDED IN SENATE MARCH 24, 2011
SENATE BILL
No. 659
Introduced by Senator Hern andez Senators Padilla and Rubio
(Principal coauthor: Senator Hernandez)
(Coauthor: Senator Negrete McLeod)
(Coauthors: Assembly Members Ma, Perea, and Solorio)
February 18, 2011
An act to amend Seetion 507 of-, and to add Seetion 301.5 to, the San
Gabriel Basin Water Quality,kuthorit)-Aet (Ghapter 776 oft ie Statutes
of 19 2), relating to the San Gabriel Basin 'Alatef Quality Autborivr
An act to amend Sections 34170, 34172, 34173, 34175, 34177, 34178,
34179, 34182, 34183, 34185, and 34187 of, to add Section 34189.5 to,
and to repeal Sections 34178.7, 34188.8, and 34191 of the Health and
Safety Code, and to amend Section 97.401 of the Revenue and Taxation
Code, relating to community redevelopment.
LEGISLATIVE COUNSEL'S DIGEST
SB 659, as amended, Hemandez Padilla. San G B .., _ . __
QualityAtitherity! board members. Community 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 ofOctober 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
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SB 659
to remit unencumbered balances of redevelopment agency funds,
including housing funds, to the county auditor - controller for distribution
to taxing entities. Existing law imposes various. requirements on
successor agencies and subjects successor agency actions to f the review
of oversight boards.
In the case of California Redevelopment Association v Matosantos,
Case No. 5194861, the California Supreme Court ruled that the
dissolution of redevelopment agencies and community development
agencies shall take effect on February 1, 2012, or 4 months after the
effective date or the deadline for performance of an obligation, except
as specified.
This bill would instead provide that dissolution of redevelopment
agencies and community development agencies shall take effect on April
15, 2012, and as otherwise specified. Other specied provisions would
become effective on May 1, 2012, or require performance of certain
actions on or before July 1, 2012.
remaining term of the offiee, as speeified-.
Vote: majority. Appropriation: no. Fiscal committee: ttayes.
State - mandated local program: no. f
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The people of the State of California do enact as_follows:
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SECTION 1. The Legislature fords and declares all of the
following:
(a) The Legislature's sole objective in enacting this act is to
temporarily delay the dissolution of redevelopment agencies in
order to provide the opportunity to address significant legal,
financial, and practical issues related to the dissolution of
redevelopment agencies that cannot be addressed once the
dissolution occurs.
(b) In enacting this act, the Legislature hereby intends to codify
the California Supreme Courts December 29, 2011, holding in
California Redevelopment Association v Malosantos, Case No.
5194861, while temporarily extending the tinneframe for
implementing Section 7 of Chapter 5 of the First Extraordinary
Session of the Statutes of 2011.
(c) This act shall not be construed as permitting any
redevelopment agency to incur new or expand existing monetary,
legal, or contractual obligations, institute any condemnation
proceedings, or issue any additional bonds, notes, or other
indebtedness between the date of the California Supreme Court's
holding in California Redevelopment Association v. Malosantos,
Case No. 5194861, and April 15, 2012.
SEC. 2. Section 34170 of the Health and Safety Code is
amended to read:
34170. (a) Unless otherwise specified, all provisions of this
part shall become operative on Oetaber 1 , 2011. April 15, 2012.
The operative date of this part, and any amendments thereto, shall
have no effect or the effective date of Chapter 5 of the First
Extraordinary Session of the Statutes of 2011, or the operative
date of Part 1.8 of Division 24.
(b) If any provision of this part or the application thereof to any
person or circumstance is held invalid, the invalidity shall not
affect other provisions or applications of this part which can be
given effect without the invalid provision or application, and to
this end, the provisions of this part are severable.
SEC. 3. Section 34172 of the Health and Safety Code is
amended to read:
34172. (a) (1) All redevelopment agencies and redevelopment
agency components of community development agencies created
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under Part 1 (commencing with Section 33000)
(commencing with Section 34000), Part 1.6 (comme
Section 34050), and Part 1.7 (commencing with Sect
that shall remain in existence on until th effeetia
date of this part and are hereby dissolved and shall no 1
as a public body, corporate or politic effective Aprh
Nothing in this part dissolves or otherwise affects the
a community redevelopment commission, other than in i
to act as a redevelopment agency, in its capacity as
authority or for any other community development pur
jurisdiction in which it operates. For those other nonredi
purposes, the community development commission
authority solely from federal or local laws, or from state
than the Community Redevelopment Law, (Part 1 (cc
with Section 33000)).
(2) A community in which an agency has been will b
under this section may not create a new agency pursua
(commencing with Section 33000), Part 1.5 (comme
Section 34000), Part 1.6 (commencing with Section
Part 1.7 (commencing with Section 34100). However, a
in which the agency has been dissolved and the succ¢
has paid off all of the former agency's enforceable
may create a new agency pursuant to Part 1 (comme
Section 33000), Part 1.5 (commencing with Section 3
1.6 (commencing with Section 34050), or Part 1.7 (cc
with Section 34100), subject to the tax increment
contained in Chapter 3.5 (commencing with Section
Part 1.9 (commencing with Section 34192).
(b) A41— Except as expressly provided in Section
authority to transact business or exercise powers previor
under the Community Redevelopment Law (Part 1 (cc
with Section 33000) is hereby withdrawn from i
redevelopment agencies effective October 1, 2011.
(c) Solely for purposes of Section 16 of Article
California Constitution, the Redevelopment Property
Fund shall be deemed to be a special fund of the
redevelopment agency that will be dissolved to pay t1
of and interest on loans, moneys advanced to, or in(
whether funded, refunded, assumed, or otherwise incu
redevelopment agency to finance or refinance, in whole
Part 1.5
cing with
)n 34100)
operative
tiger exist
15, 2012.
rthority of
;authority
a housing
ose of the
lerives its
laws other
nmencing
dissolved
it to Part 1
icing with
34050), or
ommunity
;sor entity
obligations
icing with
000), Part
nmencing
provisions
4194.5) of
34169, all
dy granted
nmencing
ie former
VI of the
Tax Trust
dissolved
;principal
ebtedness,
Ted by the
or in part,
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the redevelopment projects of each redevelopment agency dissolved
pursuant to this part.
(d) Revenues equivalent to those that would have been allocated
pursuant to subdivision (b) of Section 16 of Article XVI of the
California Constitution shall be allocated to the Redevelopment
Property Tax Trust Fund of each successor agency for making
payments on the principal of and interest on loans, and moneys
advanced to or indebtedness incurred by the dissolved
redevelopment agencies. Amounts in excess of those necessary to
pay obligations of the former redevelopment agency shall be
deemed to be property tax revenues within the meaning of
subdivision (a) of Section 1 of Article XIII A of the California
Constitution.
SEC. 4. Section 34173 of the Health and Safety Code is
amended to read:
34173. (a) Successor agencies, as defined in this part, are
hereby designated as successor entities to the former redevelopment
agencies.
(b) Except for those provisions of the Community
Redevelopment Law that are repealed, restricted, or revised
pursuant to the act adding this part, all authority, rights, powers,
duties, and obligations previously vested with the former
redevelopment agencies, under the Community Redevelopment
Law, are hereby vested in the successor agencies.
(c) (1) Where the redevelopment agency was in the form of a
joint powers authority, and where the joint powers agreement
governing the formation of the joint powers authority addresses
the allocation of assets and liabilities upon dissolution of the joint
powers authority, then each of the entities that created the former
redevelopment agency may be a successor agency within the
meaning of this part and each shall have a share of assets and
liabilities based on the provisions of the joint powers agreement.
(2) Where the redevelopment agency was in the form of a joint
powers authority, and where the joint powers agreement governing
the formation of the joint powers authority does not address the
allocation of assets and liabilities upon dissolution of the joint
powers authority, then each of the entities that created the former
redevelopment agency may be a successor agency within the
meaning of this part, a proportionate share of the assets and
liabilities shall be based on the assessed value in the project areas
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within each entity's jurisdiction, as determined by I
assessor, in its jurisdiction as compared to the assesse
land within the boundaries of the project areas of I
redevelopment agency.
(d) (1) A city, county, city and county, or the entitii
the joint powers authority that authorized the creatir
redevelopment agency may elect not to serve as a succes
under this part. A city, county, city and county, or any i
a joint powers authority that elects not to serve as a
agency under this part must file a copy of a duly
resolution of its governing board to that effect with
auditor - controller no later than
date of this pmt January 13, 2012. Any city, count)
county, or anv member of a joint powers authority tha
to serve as a successor agency may seek reconsiderc
decision not to .serve as a successor agency by submittin
petition for reconsideration to the Governor on or befor
15, 2012. The Governor shall possess the sole authori
a petition for reconsideration. If the Governor grants
for reconsideration, the petitioner shall serve as a succes
notwithstanding its prior election declining to serve as e
agency.
(2) The determination of the first local agency tha
become the successor agency shall be made by t
auditor - controller based on the earliest receipt by I
auditor - controller of a copy of a duly adopted resolu
local agency's governing board authorizing such an e
used in this section, "local agency" means any city, c
and county, or special district in the county of t
redevelopment agency.
(3) If no local agency elects to serve as a successor
a dissolved redevelopment agency, a public body, refern
as a "designated local authority" shall be immediate
pursuant to this part, in the county and shall be vested 1
powers and duties of a successor agency as described i
The Governor shall appoint three residents of the coup
as the governing board of the authority. The desigr
authority shall serve as successor agency until a local ag
to become the successor agency in accordance with thi
county
value of
former
s forming
n of each
oragency
rember of
successor
county
city and
elects not
Pion of its
! a written
February
y to grant
a petition
oragency
successor
elects to
county
county
>n of the
ction. As
mty, city
former
;ency for
to herein
formed,
ith all the
this part.
t to serve
ted local
icy elects
section.
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(e) The liability of any successor agency, acting pursuant to the
powers granted under the act adding this part, shall be limited to
the extent of the total sum of property tax revenues it receives
pursuant to this part and the value of assets transferred to it as a
successor agency for a dissolved redevelopment agency.
SEC. 5. Section 34175 of the Health and Safely Code is
amended to read:
34175. (a) It is the intent of this part that pledges of revenues
associated with enforceable obligations of the former
redevelopment agencies are to be honored. It is intended that the
cessation of any redevelopment agency shall not affect either the
pledge, the legal existence of that pledge, or the stream of revenues
available to meet the requirements of the pledge.
(b) All assets, properties, contracts, leases, books and records,
buildings, and equipment of the former redevelopment agency are
transferred on Getobef 1, 2011 April 15, 2012, to the control of
the successor agency, for administration pursuant to the provisions
of this part. This includes all cash or cash equivalents and amounts
owed to the redevelopment agency as of 0efo`0et4—,m } April
15, 2012.
SEC. 6. 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 ( 1 , 201 April 15, 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
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1 oversight board as soon as the board has sufficient m
2 form a quorum.
3 (2) The Department of Finance and the Controller
4 have the authority to require any documents associate
5 enforceable obligations to be provided to them in a mane
6 choosing. Any taxing entity, the department, and the
7 shall each have standing to file a judicial action to
8 violation under this part and to obtain injunctive
9 appropriate relief.
10 (3) Commencing onga»uary May 1, 2012, or the dat
11 a Recognized Obligation Payment Schedule is dee
12 pursuant to paragraph (2) of subdivision (1), whichev
13 only those payments listed in the Recognized Obligatio
14 Schedule may be made by the successor agency from
15 specified in the Recognized Obligation Payment Sc.
16 addition, commencing —Ja:ivary May 1, 2012, the R
17 Obligation Payment Schedule shall supersede the St,
18 Indebtedness, which shall no longer be prepared not
19 effect under the Community Redevelopment Law.
20 (4) Nothing in the act adding this part is to be co
21 preventing a successor agency, with the prior appro
22 oversight board, as described in Section 34179, fro.
23 payments for enforceable obligations from sources other
24 listed in the Recognized Obligation Payment Schedule
25 (5) From 9etober 1, 2011 April 15, 2012, to Jul,
26 inclusive, a successor agency shall have no authority an
27 prohibited from accelerating payment or making any
28 payments that are intended to prepay loans unless such a
29 repayments were required prior to the effective date of
30 (b) Maintain reserves in the amount required by i
31 trust indentures, or similar documents governing the i
32 outstanding redevelopment agency bonds.
33 (c) Perform obligations required pursuant to any e
34 obligation.
35 (d) Remit unencumbered balances of redevelopme
36 funds to the county auditor - controller for distribution to
37 . entities, including, but not limited to, the unencumber
38 of the Low and Moderate Income Housing Fund of
39 redevelopment agency. In making the distribution, t
40 auditor- controller shall utilize the same methodology foi
to
[all each
with the
r of their
prevent a
or other
on which
tied valid
r is later,
[ Payment
the funds
edule. In
ement of
have any
strued as
al of the
t making
han those
1, 2012,
is hereby
ump -sum
:celerated
his part.
dentures,
nuance of
nt agency
the taxing
:d balance
a former
ie county
allocation
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and distribution of property tax revenues provided in Section
34188.
(e) Dispose of assets and properties of the former redevelopment
agency as directed by the oversight board; provided, however, that
the oversight board may instead direct the successor agency to
transfer ownership of certain assets pursuant to subdivision (a) of
Section 34181. The disposal is to be done expeditiously and in a
manner aimed at maximizing value. Proceeds from asset sales and
related funds that are no longer needed for approved development
projects or to otherwise wind down the affairs of the agency, each
as determined by the oversight board, shall be transferred to the
county auditor - controller for distribution as property tax proceeds
under Section 34188.
(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
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deposited in the Redevelopment Property Tax Trust I
county auditor - controller for each six -month fiscal pe
(1) (1) Before each six -month fiscal period,
Recognized Obligation Payment Schedule in accordai
requirements of this paragraph. For each recognized
the Recognized Obligation Payment Schedule shall i
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,
the extent no other funding source is available or wh
from property tax revenues is required by an enforceabl
or by the provisions of this part.
(F) Other revenue sources, including rents, conces
sale proceeds, interest earnings, and any other reven
from the former redevelopment agency, as appro
oversight board in accordance with this part.
(2) A Recognized Obligation Payment Schedule
deemed valid unless all of the following conditions ha%
(A) A draft Recognized Obligation Payment
prepared by the successor agency for the enforceable
of the former redevelopment agency by November 1
1, 2012. From Oeteber 1 , 2011 April 15, 2012, to h
inclusive, the initial draft of that schedule shall proje
and amounts of scheduled payments for each enforceabl
for the remainder of the time period during
redevelopment agency would have been authorized
property tax increment had such a redevelopment ager
dissolved, and shall be reviewed and certified, as to i
by an external auditor designated pursuant to Section
(B) The certified Recognized Obligation Payment
submitted to and duly approved by the oversight boar
(C) A copy of the approved Recognized Obligatii
Schedule is submitted to the county auditor - controll
the Controller's office and the Department of Finance at
on the successor agency's Internet Web site.
(3) The Recognized Obligation Payment SchedL
forward looking to the next six months. The first
to the
with the
one
only to
s, asset
derived
by the
not be
m met:
lule is
4F+ May
1, 2012,
the dates
hich the
obligate
i not been
accuracy,
1182.
hedule is
Payment
and both
be posted
shall be
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Obligation Payment Schedule shall be submitted to the Controller's
office and the Department of Finance by -
^--vim mbe 'rrrmT May
15, 2012, for the period of4anuary June 1, 2012, to June 30, 2012,
inclusive. Fofmer redevelopment Redevelopment agency_
enforceable obligation payments due, and reasonable or necessary
administrative costs due or incurred, prior to January l April 15,
2012, shall be made from property tax revenues received in the
spring of 2011 property tax distribution, from property tax revenues
received pursuant to Section 34183, and from other revenues and
balances transferred to the successor agency.
SEC. 7. Section 34178 of the Health and Safety Code is
amended to read:
34178. (a) Commencing on the apemfive date of this part
October 1, 2011, agreements, contracts, or arrangements between
the city or county, or city and county that created the
redevelopment agency and the redevelopment agency are invalid
and shall not be binding on the successor agency; provided,
however, that a successor entity wishing to enter or reenter into
agreements with the city, county, or city and county that formed
the redevelopment agency that it is succeeding may do so upon
obtaining the approval of its oversight board.
(b) Notwithstanding subdivision (a), any of the following
agreements are not invalid and may bind the successor agency:
(1) A duly authorized written agreement entered into at the time
of issuance, but in no event later than December 31, 2010, of
indebtedness obligations, and solely for the purpose of securing
or repaying those indebtedness obligations.
(2) A written agreement between a redevelopment agency and
the city, county, or city and county that created it that provided
loans or other startup funds for the redevelopment agency that
were entered into within two years of the formation of the
redevelopment agency.
(3) A joint exercise of powers agreement in which the
redevelopment agency is a member of the joint powers authority.
However, upon assignment to the successor agency by operation
of the act adding this part, the successor agency's rights, duties,
and performance obligations under that joint exercise of powers
agreement shall be limited by the constraints imposed on successor
agencies by the act adding this part.
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SEC. 8. Section 34178.7 of the Health and
repealed.
Code is
fiseal year. SEC 9 Section 34179 of the Health and Safety Code is
amended to read:
34179. (a) Each successor agency shall have an oversight
board composed of seven members. The members shall elect one
of their members as the chairperson and shall report the name of
the chairperson and other members to the Department of Finance
on or beforejanuuary 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. l
(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 islelected. 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. 1
(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
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redevelopment agency employees employed by the successor
agency at that time.
(8) If the county or a joint powers agency formed the
redevelopment agency, then the largest city by acreage in the
territorial jurisdiction of the former redevelopment agency may
select one member. if there are no cities with territory in a project
area of the redevelopment agency, the county superintendent of
education may appoint an additional member to represent the
public.
(9) If there are no special districts of the type that are eligible
to receive property tax pursuant to Section 34188, within the
territorial jurisdiction of the former redevelopment agency, then
the county may appoint one member to represent the public.
(10) 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 by4anaary 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
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1 board members shall serve without compensation or reimbursement
2 for expenses.
3 (d) Oversight board members shall have personal immunity
4 from suit for their actions taken within the scone of their
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responsibilities as oversight board members.
(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. t
(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 act adding 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 al 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
(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
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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.
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, for the types of special districts that are
eligible to receive property tax revenues pursuant to Section 34188.
(4) One member may be appointed by the county superintendent
of education to represent schools if the superintendent is elected.
If the county superintendent of education is appointed, then the
appointment made pursuant to this paragraph shall be made by the
county board of education.
(5) One member may be appointed by the Chancellor of the
California Community Colleges to represent community college
districts in the county.
(6) One member of the public may be appointed by the county
board of supervisors.
(7) One member may be appointed by the recognized employee
organization representing the largest number of successor agency
employees in the county.
(k) The Governor may appoint individuals to fill any oversight
board member position described in subdivision 0) that has not
been filled by July 15, 2016, or any member position that remains
vacant for more than 60 days.
(q 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).
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(m) Any oversight board for a given successor ag'i
cease to exist when all of the indebtedness of the
redevelopment agency has been repaid. 1
SEC. 10. Section 34182 of the Health and Safet
amended to read: {
34182. (a) (1) The county auditor - controller shall'
cause to be conducted an agreed -upon procedures auc
redevelopment agency in the county that is subject to tl
be completed by IMareh July 1, 2012.
(2) The purpose of the audits shall be to estal
redevelopment agency's assets and liabilities, to doci
determine each redevelopment agency's passthrougl
obligations to other taxing agencies, and to docu
determine both the amount and the terms of any inc
incurred by the redevelopment agency and certify
Recognized Obligation Payment Schedule.
(3) The county auditor - controller may charge the Rede
Property Tax Trust Fund for any costs incurred by t
auditor - controller pursuant to this part.
(b) By Marcy July 1, 2012, the county auditor
shall provide the Controller's office a copy of all audits 1
pursuant to this section. The county auditor- contri
maintain a copy of all documentation and working pap i
by the Controller.
(c) (1) The county auditor - controller shall determine t
of property taxes that would have been allocatec
redevelopment agency in the county had the redevelopm
not been dissolved pursuant to the operation of the act a
part. These amounts are deemed property tax revenues
meaning of subdivision (a) of Section 1 of Article XI1
California Constitution and are available for allot
distribution in accordance with the provisions of the
this part. The county auditor - controller shall calculate th
tax revenues using current assessed values on the last
roll on August 20, pursuant to Section 2052 of the Re
Taxation Code, and pursuant to statutory formulas or c
agreements with other taxing agencies, as of the effecti
this section, and shall deposit that amount in the Rede
Property Tax Trust Fund.
ncy shall
dissolved
Code is
onduct or
it of each
is part, to
lish each
ment and
payment
nent and
ebtedness
he initial
felopment
ie county
controller
erformed
Iler shall
rs for use
ie amount
to each
ntagency
]ding this
,vithin the
I A of the
ition and
ct adding
property
equalized
lenue and
date of
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(2) Each county auditor - controller shall administer the
Redevelopment Property Tax Trust Fund for the benefit of the
holders of former redevelopment agency enforceable obligations
and the taxing entities that receive passthrough payments and
distributions of property taxes pursuant to this part.
(3) In connection with the allocation and distribution by the
county auditor - controller of property tax revenues deposited in the
Redevelopment Property Tax Trust Fund, in compliance with this
part, the county auditor - controller shall prepare estimates of
amounts to be allocated and distributed, and provide those estimates
to both the entities receiving the distributions and the Department
of Finance, no later than November I and May 1 of each year.
(4) Each county auditor - controller shall disburse proceeds of
asset sales or reserve balances, which have been received from the
successor entities pursuant to Sections 34177 and 34187, to the
taxing entities. In making such a distribution, the county
auditor - controller shall utilize the same methodology for allocation
and distribution of property tax revenues provided in Section
34188.
(d) By October 1, 2012, the county auditor - controller shall report
the following information to the Controller's office and the Director
of Finance:
(1) The suns of property tax revenues remitted to the
Redevelopment Property Tax Trust Fund related to each former
redevelopment agency.
(2) The sums of property tax revenues remitted to each agency
under paragraph (1) of subdivision (a) of Section 34183.
(3) The sums of property tax revenues remitted to each successor
agency pursuant to paragraph (2) of subdivision (a) of Section
34183.
(4) The sums of property tax revenues paid to each successor
agency pursuant to paragraph (3) of subdivision (a) of Section
34183.
(5) The sums paid to each city, county, and special district, and
the total amount allocated for schools pursuant to paragraph (4)
of subdivision (a) of Section 34183.
(6) Any amounts deducted from other distributions pursuant to
subdivision (b) of Section 34183. -
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1 (e) A county auditor - controller may charge the Redevelopment
2 Property Tax Trust Fund for the costs of administering the
3 provisions of this part.
4 (0 The Controller may audit and review any county
5 auditor - controller action taken pursuant to the act adding this part.
6 As such, all county auditor - controller actions shall not Se effective
7 for three business days, pending a request for review by the
8 Controller. In the event that the Controller requests a review of a
9 given county auditor - controller action, he or she shall have 10 days
10 from the date of his or her request to approve the county
11 auditor- controller's action or return it to the county
12 auditor - controller for reconsideration and such county
13 auditor - controller action shall not be effective until approved by
14 the Controller. In the event that the Controller returns the county
15 auditor - controller's action to the county auditor - controller for
16 reconsideration, the county auditor - controller must resubmit the
17 modified action for Controller approval and such modified county
18 auditor - controller action shall not become effective until approved
19 by the Controller.
20 SEC. 11. Section 34183 of the Health and Safety Code is
21 amended to read:
22 34183. (a) Notwithstanding any other law, from �eteI I
23 20+47Apri115, 2012, to July 1, 2012, inclusive, and for each fiscal
24 year thereafter, the county auditor - controller shall, after
25 administrative costs allowed under Section 34182 and Section 95.3
26 of the Revenue and Taxation Code, allocate moneys in each
27 Redevelopment Property Tax Trust Fund as follows: 1
28 (1) Subject to any prior deductions required by subd ivision (b),
29 first, the county auditor - controller shall remit from the
30 Redevelopment Property Tax Trust Fund to each local agency and
31 school entity an amount of property tax revenues in an amount
32 equal to that which would have been received under Section 33401,
33 33492.140, 33607, 33607.5, 33607.7, or 33676, as those sections
34 read on January 1, 2011, or pursuant to any passthrough agreement
35 between a redevelopment agency and a taxing jurisdiction that
36 was entered into prior to January 1, 1994, that would be in force
37 during that fiscal year, had the redevelopment agency existed at
38 that time. The amount of the payments made pursuant to this
39 paragraph shall be calculated solely on the basis of passthrough
40 payment obligations, existing prior to the effective date of this part
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1 and continuing as obligations of successor entities, shall occur no
2 later than 4anuafy 16, 2012, and no later than June 1, 2012, and
3 each January 16 and June 1 thereafter. Notwithstanding subdivision
4 (e) of Section 33670, that portion of the taxes in excess of the
5 amount identified in subdivision (a) of Section 33670, which are
6 attributable to a tax rate levied by a taxing agency for the purpose
7 of producing revenues in an amount sufficient to make annual
8 repayments of the principal of, and the interest on, any bonded
9 indebtedness for the acquisition or improvement of real property
10 shall be allocated to, and when collected shall be paid into, the
1 1 fund of that taxing agency.
12 (2) Second, on ganttafy 16, 2012, June 1, 2012,.for the
13 period beginning April 15, 1011, and ending December 31, 1011,
14 and each January 16 and June I thereafter, to each successor agency
15 for payments listed in its Recognized Obligation Payment Schedule
16 for the six -month fiscal period beginning 4anuary 1, 2012, or Itt4y
17 ", —ro 12 an Q each January 16 and June 1 thereafte , in the following
18 order of priority:
19 (A) Debt service payments scheduled to be made for tax
20 allocation bonds.
21 (B) Payments scheduled to be made on revenue bonds, but only
22 to the extent the revenues pledged for them are insufficient to make
23 the payments and only where the agency's tax increment revenues
24 were also pledged for the repayment of the bonds.
25 (C) Payments scheduled for other debts and obligations listed
26 in the Recognized Obligation Payment Schedule that are required
27 to be paid from former tax increment revenue.
28 (3) Third, on June 1, 2012, and each
29 January 16 and June 1 thereafter, to each successor agency for the
30 administrative cost allowance, as defined in Section 34171, for
31 administrative costs set forth in an approved administrative budget
32 for those payments required to be paid from former tax increment
33 revenues.
34 (4) Fourth, on januafy 16, 2012, June 1, 2012, and each
35 January 16 and June I thereafter, any moneys remaining in the
36 Redevelopment Property Tax Trust Fund after the payments and
37 transfers authorized by paragraphs (1) to (3), inclusive, shall be
38 distributed to local agencies and school entities in accordance with
39 Section 34188.
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(b) If the successor agency reports, no later than ' 2011, an an May4 15, 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 thel 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 from the date of that notification. Tlie county
auditor- controller shall verify whether the successor agency will
have sufficient funds from which to service debts according to the
Recognized Obligation Payment Schedule and shall report the
findings to the Controller. If the Controller concurs that there are
insufficient funds to pay required debt service, the amount of the
deficiency shall be deducted first from the amount remaining to
be distributed to taxing entities pursuant to paragraph (4), and if
that amount is exhausted, from amounts available for distribution
for administrative costs in paragraph (3). If an agency, pursuant
to the provisions of Section 33492.15, 33492.72, 33607.5, 33671.5,
33681.15, or 33688, made passthrough payment obligations
subordinate to debt service payments required for enforceable
obligations, funds for servicing bond debt may be deducted from
the amounts for passthrough payments under paragraph (1), as
provided in those sections, but only to the extent that thb amounts
remaining to be distributed to taxing entities pursuant tolparagraph
(4) and the amounts available for distribution for administrative
costs in paragraph (3) have all been exhausted.
(c) The county treasurer may loan any funds from the county
treasury that are necessary to ensure prompt paiments of
redevelopment agency debts.
(d) The Controller may recover the costs of audit and oversight
required under this part from the Redevelopment Property Tax
Trust Fund by presenting an invoice therefor to the county
auditor - controller who shall set aside sufficient funds for and
disburse the claimed amounts prior to making the next distributions
to the taxing jurisdictions pursuant to Section 34188. Subject to
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the approval of the Director of Finance, the budget of the Controller.
may be augmented to reflect the reimbursement, pursuant to
Section 28.00 of the Budget Act.
(e) Notwithstanding any other law, on February 1, 2012, for
the period February 1, 2012, to April 15, 2012, inclusive, the
county auditor - controller shall, after deducting administrative
costs allowed under Section 95.3 of the Revenue and Taxation
Code, allocate to redevelopment agencies revenues equivalent to
those that would have been allocated to a community
redevelopment agency to make the payments listed on the
enforceable obligation payment schedule adopted pursuant to
Section 34169. On April 15, 2012, for the period April 15, 2012,
to June 1, 2012, inclusive, the county auditor - controller .shall,
after deducting administrative costs allowed under Section 95.3
of the Revenue and Taxation Code allocate to successor agencies
revenue equivalent to those that would have been allocated to a
community redevelopment agency to make the payments listed on
the enforceable obligation payment schedule adopted pursuant to
Section 34177.
SEC. 12. Section 34185 of the Health and Safety Code is
amended to read:
34185. Commencing onjaauxey 1-6 May 1, 2012, and on each
January 16 and June 1 thereafter, the county auditor - controller
shall transfer, from the Redevelopment Property Tax Trust Fund
of each successor agency into the Redevelopment Obligation
Retirement Fund of that agency, an amount of property tax
revenues equal to that specified in the Recognized Obligation
Payment Schedule for that successor agency as payable from the
Redevelopment Property Tax Trust Fund subject to the limitations
of Sections 34173 and 34183.
SEC. 13. Section 34187 of the Health and Safety Code is
amended to read:
34187. Commencingjanaaty May 1, 2012, whenever a
recognized obligation that had been identified in the Recognized
Payment Obligation Schedule is paid off or retired, either through
early payment or payment at maturity, the county auditor - controller
shall distribute to the taxing entities, in accordance with the
provisions of the Revenue and Taxation Code, all property tax
revenues that were associated with the payment of the recognized
obligation.
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SEC. 14. Section 34188.8 of the Health and
repealed.
Code is
SEC. 15. Section 34189.5 is added to the Health and Safety
Code, to read:
34189.5. In enacting the act that adds this .section, it is the
intent ofthe Legislature to preserve the California Supreme Court's
December 29, 2011, holding in California Redevelopment
Association v. Matosanios, Case No. 5194861, while extending
the timeframe for implementing Ch le I the First
Extraordinary Session of the Statutes of 2011.
(a) Notwithstanding any other provision of this act c
law, a redevelopment agency shall not incur new or expo
monetary, legal, or contractual obligations, im
condemnation proceedings, or issue any additional b(
or other indebtedness commencing December 29, 20
15, 2012, inclusive.
(b) This section shall not be construed to alter o
restriction on redevelopment agency activities contai
1.8 (commencing with Section 34161).
SEC. 16. Section 34191 of the Health and Safe
repealed.
any other
d existing
lute any
ds, notes,
', to April
limit any
, d in Part
Code is
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(b) Exeept as otherwise provided by law, f6f purposes of--a
to Seetion 34195, the fi5llowing shall app4r.
(1) Any refefenee to "januafy 1, 201 T" shall be eonstmed-to
mean 4anuttfy 1 of the yeat: preeeding the year that the
date of this pati shall tnean the date that is the equivalent to the
"6eteber 1, 2911," iden in Secti 34167 for ♦L_.
(3) Exeept as provided in paragraphs (!) and (2), any referettee
to .. date e efta i n shall e artst .,..1 .. . .L _ J,.., W __d f
part; the date that the redevelopment ageftey- beeame sttbjeet to this that is eqttiyalent to the duration of titne between the oper
date ofthis paFt and the date eeftaitt identified in statute.
SEC. 17. Section 97.401 of the Revenue and Taxation Code is
amended to read:
97.401. Commencing 9etebei— r April 15, 2012, the
county auditor shall make the calculations required by Section
97.4 based on the amount deposited on behalf of each former
redevelopment agency into the Redevelopment Property Tax Trust
Fund pursuant to paragraph (1) of subdivision (c) of Section 34182
of the Health and Safety Code. The calculations required by Section
97.4 shall result in cities, counties, and special districts annually
remitting to the Educational Revenue Augmentation Fund the same
amounts they would have remitted but for the operation of Part
1.8 (commencing with Section 3416 1) and Part 1.85 (commencing
with Section 34170) of Division 24 of the Health and Safety Code.
SEGTI N 1 c_...:__ 301 5 i added t the c.._ G n....:_
to read
to subdivision (a) of Section 503, the Board of Direeters of the
(b) With respect to a member or altemate appointed pursttant
to subdivision (b) of Seetion 503, the Board of Bifeetors of the
San Gabriel Valley Munieipal Water Distfiet.
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AMENDED IN SENATE JANUARY 4, 2012
SENATE BILL No. 654
Introduced by Senator Steinberg
February 18, 2011
An act relating to taxation to amend Sections 34171, 34176, and
34177 of the Health and Safety Code, relating to redevelopment.
LEGISLATIVE COUNSEL'S DIGEST
S13 654, as amended, Steinberg.
Patient n- _._,..:__ an d . m__ dable Garr A _ . _ 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 housingfunds, to the county auditor -co ntrollerfor distribution
to taxing entities.
Existing law authorizes the city, county, or city and county that
authorized the creation ofa redevelopment agency to retain the housing
assets, functions, annd powers previously performed by the redevelopment
agency, excluding amours on deposit in the Low and Moderate Income
Housing Fund.
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
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SB 654
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Low and Moderate Income Housing Fund of a dissolved redevelopment
agency be transferred to specked entities. The bill would make
conforming changes. I
P and Affordable G ore A _t
Vote: majority. Appropriation: no. Fiscal committee:" eyes.
State - mandated local program: no.
The people of the State of California do enact
I SECTION]. Section 34171 of the Health and Sgfi L eanings:
Code is
2 amended to read:
3 34171.. The following terms shall have the following meanings:
4 (a) Administrative budget' means the budget for admimstrative
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 fi thousand
14 dollars ($250,000) for any fiscal year or such lesser amount as
15 agreed to by the successor agency. However, the allowanee amount
16 shall exclude any administrative costs that can be paid from bond
17 proceeds or from sources other than property tax.
18 (c) "Designated local authority" shall mean a public entity
19 formed pursuant to subdivision (d) of Section 34173.
20 (d) (1) "Enforceable obligation" means any of the following:
21 (A) Bonds, as defined by Section 33602 and bonds issued
22 pursuant to Section 58383 of the Government Code, including the
23 required debt service, reserve set - asides, and any otherlpayments
24 required under the indenture or similar documents governing the
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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.
(D) Judgments or settlements entered by a competent court of
law or binding arbitration decisions against the former
redevelopment agency, other than passthrough payments that are
made by the county auditor - controller pursuant to Section 34183.
Along with the successor agency, the oversight board shall have
the authority and standing to appeal any judgment or to set aside
any settlement or arbitration decision.
(E) Any legally binding and enforceable agreement or contract
that is not otherwise void as violating the debt limit or public
policy. However, nothing in this act shall prohibit either the
successor agency, with the approval or at the direction of the
oversight board, or the oversight board itself from terminating any
existing agreements or contracts and providing any necessary and
required compensation or remediation for such termination.
(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.
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(2) For purposes of this part, "enforceable obligatior
include any agreements, contracts, or arrangements N
city, county, or city and county that created the rede
agency and the former redevelopment agency. Howev
agreements entered into (A) at the time of issuance, but _
later than December 31, 2010, of indebtedness oblige
(B) solely for the purpose of securing or repay
indebtedness obligations may be deemed enforceable c
for purposes of this part. Notwithstanding this parag
agreements entered into between the redevelopment a
the city, county, or city and county that created it, withir
of the date of creation of the redevelopment agency, or
years of the date of the creation of a project area if i
speck to that project area, and any obligations it
paragraph (1) ofsubdivision (d) of Section 33691 may
to be enforceable obligations.
(3) Contracts or agreements between the former rede
agency and other public agencies, to perform services
funding for governmental or private services or capit
outside of redevelopment project areas that do not prov
to the redevelopment project and thus were not properly
under Part 1 (commencing with Section 33000) shall I
void on the effective date of this part; provided, howeve
contracts or agreements for the provision of housin
authorized under Part 1 (commencing with Section 3
not be deemed void.
(e) "Indebtedness obligations" means bonds, notes, i
of participation, or other evidence of indebtedness,
delivered by the redevelopment agency, or by a joint i
powers authority created by the redevelopment
third -party investors or bondholders to finance or
redevelopment projects undertaken by the redevelopm
in compliance with the Community Redevelopment L
(commencing with Section 33000)).
(f) "Oversight board" shall mean each entity establish¢
to Section 34179.
(g) "Recognized obligation' means an obligation li
Recognized Obligation Payment Schedule.
(h) "Recognized Obligation Payment Schedule"
document setting forth the minimum payment amoun
does not
veen the
written
no event
ans, and
R those
aph, loan
;ency and
two years
vithin two
ie loan is
posed by
e deemed
provide
projects
benefit
deemed
that such
>suea or
-rcise of
mcy, to
efinance
t agency
v (Part 1
pursuant
-d in the
:ans the
and due
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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, xeluding associated with the
housing activities ofthe 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, exeleding including any amounts in the
Low and Moderate Income Housing Fund, shall be transferred as
follows:
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(-
(1) Where there is one local housing authority in tha
jurisdiction of the former redevelopment agency, to
housing authority.
(-)
(2) Where there is more than one local housing auth
territorial jurisdiction of the former redevelopment age
local housing authority selected by the city, county, A
county that authorized the creation of the redevelopme
(3) Where there is no local housing authority in the
jurisdiction of the former redevelopment agency or whe,
housing authority selected does not accept the respon
performing housing functions previously performed by
redevelopment agency, to the Department of Ho
Community Development.
(c) Commencing on the operative date of this part.
assuming the housing functions formerly perform
redevelopment agency -nay shall enforce affordability
and perform related activities pursuant to applicable pr
the Community Redevelopment Law (Part 1 (comme
Section 33000)), including, but not limited to, Section
SEC. 3. Section 34177 of the Health and Safei
amended to read:
34177. Successor agencies are required to do
following:
(a) Continue to make payments due for enforceable c
(1) On and after October 1, 2011, and until a F
Obligation Payment Schedule becomes operative, onl}
required pursuant to an enforceable obligations paymei
shall be made. The initial enforceable obligation payme
shall be the last schedule adopted by the redevelopm
under Section 34169. However, payments assoc
obligations excluded from the definition of enforceable
by paragraph (2) of subdivision -H (d) of Section 341
excluded from the enforceable obligations payment sc
be removed from the last schedule adopted by the rede
agency under Section 34169 prior to the successor agent
it as its enforceable obligations payment schedule purl
subdivision. The enforceable obligation payment sch
be amended by the successor agency at any public tr
territorial
that local
ty in the
Y, to the
city and
agency.
the local
bility for
e former
ine and
the entity
d by the
covenants
visions of
icing with
33418.
� Code is
of the
payments
:schedule
tschedule
nt agency
ded with
I be
and
adopting
rut to this
lule may
;tiri and
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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, ineluding, but not limited to, the tmeneumbered balattee
redevelopment ageney. 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 reds
agency as directed by the oversight board; provided, he
the oversight board may instead direct the successor
transfer ownership of certain assets pursuant to subdiv
Section 34181. The disposal is to be done expedition,
manner aimed at maximizing value. Proceeds from ass
related funds that are no longer needed for approved d(
projects or to otherwise wind down the affairs of the at
as determined by the oversight board, shall be transfe
county auditor - controller for distribution as property tz
under Section 34188.
(f) Enforce all former redevelopment agency rig.
benefit of the taxing entities, including, but not
continuing to collect loans, rents, and other revenues th
to the redevelopment agency.
(g) Effectuate transfer of housing functions and w
appropriate entity designated pursuant to Section 341
(h) Expeditiously wind down the affairs of the red(
agency pursuant to the provisions of this part and in
with the direction of the oversight board.
(i) Continue to oversee development of propertie
contracted work has been completed or the contractual
of the former redevelopment agency can be transferr
parties. Bond proceeds shall be used for the purpose!
bonds were sold unless the purposes can no longer b
in which case, the proceeds may be used to defease th
0) Prepare a proposed administrative budget and s
the oversight board for its approval. The proposed adr
budget shall include all of the following:
(1) Estimated amounts for successor agency adminisl
for the upcoming six -month fiscal period.
(2) Proposed sources of payment for the costs is
paragraph (1).
(3) Proposals for arrangements for administrative anc
services provided by a city, county, city and county, or (
(k) Provide administrative cost estimates, from it
administrative budget that are to be paid from property t:
deposited in the Redevelopment Property Tax Trust F
county auditor - controller for each six -month fiscal per
vever, that
agency to
sion (a) of
y and ina
t sales and
sncy, each
red to the
:proceeds
is for the
mited to,
t were due
sets to the
i.
ielopment
;cordance
until the
bligations
d to other
for which
achieved;
bonds.
ibmit it to
inistrative
attve costs
:ntified in
aperatrons
her entity.
approved
(revenues
nd, to the
od.
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(n (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 extemal 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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the period of January 1, 2012, to June 30, 2012, incl
redevelopment agency enforceable obligation payn
reasonable or necessary administrative costs due or i
to January 1, 2012, shall be made from property
received in the spring of 2011 property tax distribul
other revenues and balances transferred to the succi
7
;. Former
due, and
red, prior
revenues
and from
agency.
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