I

County of Santa CruzREDEVELOPMENT AGENCY

701 OCEAN STREET, ROOM 510, SANTACRUZ,CA95060-4073

(831)454-2280 FAX: (831)454-3420 TOO: (831)454-2123

BETSEY LYNBERG, AGENCY ADMINISTRATOR

June 6,2011Agenda: June 14, 2011

Board of SupervisorsCounty of Santa Cruz701 Ocean Street .Santa Cruz, CA 95060

RE: SUPPORT OF SB286 and AB1250, COMPREHENSIVE PACKAGES OFREDEVELOPMENT REFORM MEASURES

Dear Members of the Board:

Governor Brown's Original and Revised 2011/2012 Proposed State Budgets call for theelimination of redevelopment agencies throughout the State of California. As of this time, theGovernor has not been successful in securing the votes necessary to pass his proposedlegislation, abolishing redevelopment agencies, in conjunction with the adoption of a StateBudget.

In the months since the Governor's Original Proposed Budget was announced, the CaliforniaLeague of Cities and the California Redevelopment Association jointly launched a vigorouscampaign opposing the abolishment of redevelopment agencies and promotingredevelopment reform as an alternative. The campaign was first successful in securing thesupport of Senator Rod Wright (D - Inglewood) who authored SB286, a bill intended toimpose new reforms, increasing accountability while limiting the size and scope ofredevelopment in California.

In addition, the campaign to save redevelopment through reform has been successful inobtaining the support of Assembly Member Luis Alejo (D - Salinas) in the stewardship ofAB1250, which emerged from the Assembly Rules Committee with a hearing waiver in earlyJune. Note should be taken that Senator Wright has joined Assembly Member Alejo as aprincipal co-author of AB1250 and thirteen other Senators and Assembly Members have alsobecome joint- or co-authors of the AB1250. Review of AB1250 indicates that, while notcontaining exactly the same language, the bill parallels the previously introduced SB 286 infocusing on:

S7. /

~Board of SupervisorsJune 6,2011Page 2 of 2

. Narrowing the definition of blight;

. Excluding school district local property tax revenue from tax increment financing for

newly created redevelopment project areas;. Limiting the percentage of jurisdictional land area that may be included within

redevelopment areas;. Prohibition of tax increment funds for specific project types, such as golf courses

and race track facilities;. Increased redevelopment agency reporting, accountability and monitoring; and. Narrower targeting of redevelopment activities to address job creation,

contaminated property cleanup, basic infrastructure needs, transit-orienteddevelopment and affordable housing.

Together SB286 and AB1250 offer an alternative approach that reduces redevelopmentimpacts on the State Budget, while making best practice tools available to local governmentsfor recovery from the recent recession. SB286 and AB1250 are designed to increaseredevelopment agency accountability, reduce redevelopment impacts on school. finance andfocus redevelopment activity on job creation, contaminated property cleanup, basicinfrastructure needs, transit-oriented development, and affordable housing needs at the localgovernment leveL. These bills focus on policy intended to mitigate the conflict between stateand local government regarding redevelopment finance and implementation now and in thefuture. Copies of both bills and staff analysis's of each, along with a proposed resolution areattached.

Accordingly, Staff recommends the Board of Supervisors adoption of the attached resolutionin support of SB286 and AB1250 and the comprehensive reform measures contained therein.

COMMENDED:

an A. Mauriello

Chief Administrative Offcer

Attachments

67. /

3

BEFORE THE BOARD OF SUPERVISORS OF THECOUNTY OF SANTA CRUZ, STATE OF CALIFORNIA

RESOLUTION NO.

On the motion of Superisor_Duly seconded by Supervisor_

The following resolution is adopted:

RESOLUTION SUPPORTING SB286 AND AB1250, COMPREHENSIVEPACKAGES OF REDEVELOPMENT REFORM MEASURES

WHEREAS, the Governor's 2011-12 proposed budget includes legislation that wouldeliminate redevelopment agencies in California, and

WHEREAS, since 1945 redevelopment has been a job engine, blight eliminator, andessential urban revitalization resource for local government; and

WHEREAS, redevelopment has been the primary economic development tool for citiesand counties in California; and

WHEREAS, the League of California Cities, and the California RedevelopmentAssociation authored legislation for major redevelopment reform which has beenincorporated into Senate Bi1286 and Assembly Bill 1250; and

WHEREAS, Senator Wright has sponsored and introduced SB286, with other legislatorsas joint- and co-authors; and

WHEREAS, Assembly Member Alejo has sponsored and introduced AB1250, with otherlegislators as joint- and co-authors; and

WHEREAS, SB286 and AB1250 recognize reform ofredeve10pment practices is needed;and

WHEREAS, SB286 and AB 1250 respond with substantive redevelopment reform thatnarow the future focus of redevelopment to the job creation, contamiated propertycleanup, basic infrastructure, transit-oriented development, and affordable housing needso flo cal governent; and

WHEREAS, SB286 and AB 1250 reduce the future redevelopment impact on the backfillo flo cal school funding through the California State Budget; and

WHEREAS, SB286 and AB1250 represent viable options to Goveror Brown's proposedelimination of all redevelopment agencies in California;

57. I

iNOW, THEREFORE, BE IT RESOLVED that the Board of Supervisors ofthe County ofSanta Cruz formally support the passage of SB286 and AB1250, formg acomprehensive legislative reform package that increases accountability and oversight ofCalifornia redevelopment agencies while preserving the essential economic developmentmechanism ofredeve10pment in California.

BE IT FURTHER RESOLVED that the Board of Supervisors of the County of SantaCruz authories its members and staff to communicate this action of support for SB286and AB 1250 to the Governor, the Legislature, the League of California Cities, theCalifornia Redevelopment Association, business groups, and citizens.

PASSED AND ADOPTED by the Board of Superisors of the County of Santa Cruz,State of California, this dayof_, 2011, by the following vote:

AYES:NOES:ABSENT:

SUPERVISORSSUPERVISORSSUPERVISORS

MARK W. STONE, ChairersonBoard of Superisors

ATTEST:Clerk of said Board

RM:

DISTRIBUTION: Goveror Jerr BrownSenate President pro Ter Darell SteinbergAssembly Speaker John PerezAssembly Member Wi1iam MonningAssembly Member Luis AlejoSenator Joe Simitian

Senator Sam BlakesleeSenate Governance & Finance Committee

Senator Lois Wolk, ChairSenator Robert Huff

5"7./

s-

Senator Mark DeSaulnierSenator Jean FullerSenator Loni HancockSenator Ed HernandezSenator Christine KehoeSenator Doug La Ma1faSenator Carol Liu

Redevelopment Agency Executive DirectorRedevelopment Agency AdministratorCounty Counsel

57./

to

AMENDED IN SENATE APRIL 27,2011

SENATE BILL No. 286

Introduced by Senator Wright(Principal coauthor: Senator Rubio)

February 14,2011

Ali aet to amelid Seetions 33607.5 Md 33607.7 ofthe Health MdAnact to amend Sections 33080.3, 33080.6, 33320.1, 33334.2, 33367,

33426.5,33488,33601,33610,33670, and 33670.5 of, to add Sections33080.14, 33444.7, 33444.8, 33460.1, 33491, 33607.9, 33675.1, and50464.6 to, the Health and Safety Code, relating to redevelopment.

LEGISLATIVE COUNSEL'S DIGEST

SB 286, as amended, Wright. Redevelopmelit: loeal edteation ageneypayments, Redevelopment.

(1) The Community Redevelopment Law authorizes the establishmentof redevelopment agencies in communities to address the effects ofblight, as defined, in blighted areas in those communities known asproject areas. Existing law requires that each redevelopment agencysubmit the final report of any audit undertaken by any other local, state,or federal government entity to its legislative body and to additionallypresent an annual report to the legislative body containing specifedinformation.

This bil would, until January 1, 2013, prohibit the legislative bodyof a city, county,. or city and county from adopting an ordinance toadopt or amend a redevelopment plan, as described. The bil wouldalso impose new requirements on the agency with respect toimplementation plans and evidentiary standards and expand existingprohibitions on agency direct assistance to certain projects.

98

5,.. \

~SB 286 -2-

The bill would require the Controller, on or before January 1, 2013,to issue regulations revising and consolidating reporting forredevelopment agencies and to develop a simple, uniform, and consistentmethodology for the calculation, payment, and reporting of passthrough

payments. The bil would also require the Controller to review andrevise the guidelines adopted for the content of the final report at leastevery 5 years, as specifed. The bil would also transfer certain reporting

requirements from the Department of Housing and CommunityDevelopment to the Controller, as specifed, and require that agenciessend certain notifcations to the Controller in addition to sending the

notifcations to the department. The bil would require that thedepartment develop guidelines establishing standards to evaluate agencyperformance.

(2) The bil would require the State Auditor to conduct audits ofselected redevelopment agencies to ensure compliance with existinglaw. The bil would require each agency, immediately upon receipt, todeposit 0.025% of tax increment into the Redevelopment Agency StateAudit Fund, which the bil would create, to fund the audits.

(3) The California Constitution authorizes a redevelopment agencyto receive funding through tax increment revenues attributable toincreases in assessed property tax valuation of property in a projectarea due to redevelopment. Existing law prescribes the procedure bywhich the tax increment revenue is allocated.

The bil would provide, for purposes of the above provisions, taxincrement revenue transferred to an agency exclude any fundsconsidered educational entity property tax revenues. The bil wouldprovide that this provision applies only to tax increment revenues

generated from any redevelopment project established on or afterJanuary 1, 2012.

(4) The bil would authorize an agency to loan or grant funds forprojects relating to energy effciency or the reduction of greenhousegas emissions. The bil would also authorize an agency to provide directassistance, as described, to businesses within project areas for industrialor manufacturing uses or similar uses of statewide benefit.

The Commnity Redevelopment La.. requires a redevelepmelitageney that has adopted a rede v elopmelt plali on er after JtlM) 1,1994, that eoliailis speeified provisions, amends a plan to inelude ne'vv

teffitory, or amends its plan to modify speeified limitations, to makepayents to taxilig elitities, and requires that these payelts be alloeated

98

51 ' ,

~

-3- SB 286

among these entities in propertion to the pereentage share of propertta revefies reeeited by these entities in these nseal ) eats.

Existing propert tax lavv' reqtlires the eOtlnty ffditor, in eaeh nsealyear, to alloeffEe pfOpert tax regefie to 10eajtlfÏsdietiolis ili aeeerdMeeVi ith speeified fommlas Md f'fOeedures, and gelerally reqtlires thateaehjtlrisdietion be alloeated ali amOtllit eqtlal to the total efthe amotlfiofretentle alloeated te thatjtlisdietioli ili the prior nseal )ear, stlbjeetto eertain modineatiolis, Md that jtlisdietion's portion of the anntlaltax inerement, as denned.

This bil \190tlld, not'W'ithstanding existing law, Oli and after Jantlaf)'

1, 2012, reqtlire that agele) paymelits to a leeal edtleation ageney tlnderthe above provisions be acljtlsted to enstlre that the loeal edtleationageley eelitilitles to reeeive, at a minimtm, the amOtlnt attribtltale tothe ageliey' s propert tax re (elIe reeeived dtlrilig the ) ear immediatelypreeedilig the adoption er amelidment of Ehe redevelopmelit plali.

Vote: majority. Appropriation: no. Fiscal committee: yes.

State-mandated local program: no.

The people of the State of California do enact asfollows:

1 SECTION 1. Section 33080.3 of the Health and Safety Code2 is amended to read:

3 33080.3. The Controller shall develop and periodically revise4 the guidelines for the content of the report required by Section

5 33080.1. The Controller shall appoint an advisory committee to6 advise in the development of the guidelines. The advisory

7 committee shall include representatives from among those persons8 nominated by the department, the Legislative Analyst, the9 California Society of Certified Public Accountants, the California

10 Redevelopment Association, and any other authorities in the field11 that the Controller deems necessary and appropriate. The Controller12 shall review and revise the guidelines at least every five years,13 following consultation with the advisory committee.14 SEC. 2. Section 33080.6 of the Health and Safety Code is15 amended to read:16 33080.6. (a) On or before May i of each year, the departelit17 Controller shall compile and publish annual reports of the activities18 of redevelopment agencies for the previous fiscal year, based on19 the information reported pursuant to subdivision (c) of Section20 33080.1 and reporting the types of findings made by agencies

98

Sc.l

qSB286 -4-

1 pursuant to paragraph (l), (2), or (3) of subdivision (a) of Section2 33334.2, including the date of the findings. The deparment's

3 Controller's compilation shall also report on the project area

4 mergers reported pursuant to Section 33488. The departelit5 Controller shall publish this information for each project area of6 each redevelopment agency. These reports may also eOlitain the7 biennial re 9 ie.. ofreloeatioli assistanee reqtlired by Seetion 50460.8 The first report published pursuant to this section shall be for the9 1984 85 2013-14 fiscal year. For nseal year 1987 88 Md

10 stleeeeding nseal yeMs, the report shall eontain a list of those11 projeet Meas whieh Me liOt stlbjeet to the reqtlirements of Seetion12 33413.13 The departelit shall send a eopy of the exeetltive stlmmary of

14 its report to eaeh redevelopment ageliey feir whieh infeirmation

15 'lv'tS reported ptlrstltlHo Seetioli 33080.1 for the nseal yeM eovered16 by the report. The deparment shall send a eopy of its report to17 eaeh redevelopment ageliey that reqtlests a eOJY.18 (b) Changes to this section made by the act amending this19 section shall take effect on january 1, 2013.20 SEC. 3. Section 33080.14 is added to the Health and Safety21 Code, to read:22 33080.14. (a) On or before january 1, 2013, the department23 shall develop guidelines establishing specifc measures and

24 standards to evaluate redevelopment agency performance in25 specifc areas, including the following:26 (1) A uniform method of calculating and reportingjob creation

27 and retention.28 (2) Standards for measuring the effciency and effectiveness of

29 expenditures for affordable housing.30 (3) Standards for measuring and reducing poverty levels in

31 project areas.32 (4) Standards for measuring and reducing crime in project33 areas.34 (5) Methodsfor measuring reductions in vehicle miles traveled35 accomplished through redevelopment projects, including, but not36 limited to, assistance provided to infill and transit oriented37 development.

38 (6) Standards for reporting on brownfield cleanup and39 hazardous waste mitigation.

98

5(' ,

\0

-5- SB286

1 (b) The department shall appoint an advisory committee to assist

2 and advise in the development of the guidelines required by this3 section. The advisory committee shall include representatives with

4 demonstrated expertise in redevelopment, local government metrics5 that measure anyone or more of the standards described above,6 or any other fields of study that the department deems necessary

7 and appropriate.

8 (c) Commencing with the 2013-14 fiscal year, the annual report9 required by Section 33080.1 shall include a discussion of the

10 redevelopment agency's performance based on the guidelines11 prepared by the department pursuant to this section.12 SEC. 4. Section 33320.1 of the Health and Safety Code is13 amended to read:14 33320.1. (a) "Project area" means, except as provided in15 Section 33320.2, 33320.3, 33320.4, or 33492.3, a predominantly16 urbanized area of a community that is a blighted area, the17 redevelopment of which is necessary to effectuate the publici 8 purposes declared in this part, and that is selected by the planningi 9 commission pursuant to Section 33322.20 (b) As used in this section, "predominantly urbanized" means

21 that not less than 80 percent of the land in the project area is either22 of the following:23 (1) Has been or is developed for urban uses.

24 (2) Is an integral part of one or more areas developed for urban

25 uses that are surrounded or substantially surrounded by parcels26 that have been or are developed for urban uses. Parcels separated27 by only an improved right-of-way shall be deemed adjacent for28 the purpose of this subdivision. Parcels that are not blighted shall29 not be included in the project area for the purpose of obtaining the30 allocation of taxes from the area pursuant to Section 33670 without31 other substantial justification for their inclusion.32 (c) For the purposes of this section, a parcel of property as33 shown on the official maps of the county assessor is developed if34 that parcel is developed in a manner that is consistent with zoning35 standards or is otherwise permitted under law.36 (d) Exceptfor a redevelopment plan or plan amendment to add

37 territory to a project area pursuant to Chapter 4.5 (commencing38 with Section 33492), a redevelopment plan or plan amendment to

39 add territory to a project area shall not be adopted by a community40 if the proposed project area or area to be added by plan

98

S7. (

\ I

SB286 -6-1 amendment, when aggregated with all other existing project areas2 within the community, would result in having (1) 25 percent of a3 city's total land area included within the combined redevelopment4 project areas or (2) 10 percent of a county's or city and county's

5 total unincorporated land area included within redevelopment

6 project areas. The limitations contained in this subdivision shall

7 apply only to a project areafor which afinal redevelopment plan

8 is adopted on or after January 1, 2012, or to an area that is added

9 to a project area by an amendment to a redevelopment plan, which

10 amendment is adopted on or after January 1, 2012.11 W12 (e) The requirement that a project be predominantly urbanized

13 shall apply only to a project area for which a final redevelopment14 plan is adopted on or after January i, 1984, or to an area that is15 added to a project area by an amendment to a redevelopment plan,16 which amendment is adopted on or after January i, 1984.17 SEC 5. Section 33334.2 of the Health and Safety Code is18 amended to read:19 33334.2. (a) Except as provided in subdivision (k), not less20 than 20 percent of all taxes that are allocated to the agency pursuant21 to Section 33670 shall be used by the agency for the purposes of22 increasing, improving, and preserving the community's supply of23 low- and moderate-income housing available at affordable housing24 cost, as defined by Section 50052.5, to persons and families of25 low or moderate income, as defined in Section 50093, lower26 income households, as defined by Section 50079.5, very low27 income households, as defined in Section 50105, and extremely28 low income households, as defined by Section 50 i 06, that is29 occupied by these persons and families, unless one ofthe following30 findings is made annually by resolution:31 (1) (A) That no need exists in the community to improve,

32 increase, or preserve the supply of low- and moderate-income33 housing, including housing for very low income households in a34 manner that would benefit the project area and that this finding is35 consistent with the housing element of the community's general36 plan required by Article 10.6 (commencing with Section 65580)

37 of Chapter 3 of Division 1 of Title 7 of the Government Code,

38 including its share of the regional housing needs of very low39 income households and persons and families of low or moderate40 Income.

98

570 \

\7-

-7- SB286

1 (B) This finding shall only be made if the housing element of

2 the community's general plan demonstrates that the community3 does not have a need to improve, increase, or preserve the supply4 of low- and moderate-income housing available at affordable5 housing cost to persons and families of low or moderate income6 and to very low income households. This finding shall only be7 made if it is consistent with the planning agency's annual report8 to the legislative body on implementation of the housing element

9 required by subdivision (b) of Section 65400 of the Government

10 Code. No agency of a charter city shall make this finding unless11 the planning agency submits the report pursuant to subdivision (b)12 of Section 65400 of the Govemment Code. This finding shall not13 take effect until the agency has complied with subdivision (b) of14 this section.15 (2) (A) That some stated percentage less than 20 percent of the16 taxes that are allocated to the agency pursuant to Section 3367017 is sufficient to meet the housing needs of the community, including18 its share of the regional housing needs of persons and families of19 10w- or moderate-income and very low income households, and

20 that this finding is consistent with the housing element of the21 community's general plan required by Article 10.6 (commencing22 with Section 65580) of Chapter 3 of Division 1 of Title 7 of the23 Government Code.24 (B) This finding shall only be made if the housing element of25 the community's general plan demonstrates that a percentage of26 less than 20 percent wil be suffcient to meet the community's27 need to improve, increase, or preserve the supply of low- and28 moderate-income housing available at affordable housing cost to29 persons and families of low or moderate income and to very low30 income households. This finding shall only be made if it is31 consistent with the planning agency's annual report to the

32 legislative body on implementation of the housing element required33 by subdivision (b) of Section 65400 of the Governent Code. No34 agency of a charter city shall make this finding unless the planning35 agency submits the report pursuant to subdivision (b) of Section36 65400 of the Government Code. This finding shall not take effect37 until the agency has complied with subdivision (b) of this section.38 (C) For purposes of making the findings specified in this39 paragraph and paragraph (1), the housing element of the general40 plan of a city, county, or city and county shall be current, and shall

98

57.. (

\'3SB286 -8-1 have been determined by the department pursuant to Section 65585

2 to be in substantial compliance with Aricle 10.6 (commencing

3 with Section 65580) of Chapter 3 of Division I of Title 7 of the4 Governent Code.5 (3) (A) That the community is making a substantial effort to6 meet its existing and projected housing needs, including its share7 ofthe regional housing needs, with respect to persons and families

8 of low and moderate income, particularly very low income

9 households, as identified in the housing element of the

10 community's general plan required by Article 10.6 (commencing11 with Section 65580) of Chapter 3 of Division 1 of Title 7 of thei 2 Governent Code, and that this effort, consisting of direct financial13 contributions of local funds used to increase and improve the14 supply of housing affordable to, and occupied by, persons and15 families of low or moderate income and very low income

16 households is equivalent in impact to the funds otherwise required17 to be set aside pursuant to this section. In addition to any other18 local funds, these direct financial contributions may include federal19 or state grants paid directly to a community and that the community20 has the discretion of using for the purposes for which moneys in21 the Low and Moderate Income Housing Fund may be used. The

22 legislative body shall consider the need that can be reasonably23 foreseen because of displacement of persons and families of low24 or moderate income or very low income households from within,25 or adjacent to, the project area, because of increased employment26 opportnities, or because of any other direct or indirect result of27 implementation of the redevelopment plan. No finding under this28 subdivision may be made until the community has provided or29 ensured the availability of replacement dwelling units as defined30 in Section 334 i 1.2 and until it has complied with Article 9

31 (commencing with Section 33410).32 (B) In making the determination that other financial33 contributions are equivalent in impact pursuant to this subdivision,34 the agency shall include only those financial contributions that are35 directly related to programs or activities authorized under

36 subdivision (e).37 (C) The authority for making the finding specified in this38 paragraph shall expire on June 30, 1993, except that the expiration39 shall not be deemed to impair contractual obligations to40 bondholders or private entities incurred prior to May 1, 1991, and

98

S('\

Ill

-9- SB 286

1 made in reliance on the provisions ofthis paragraph. Agencies that2 make this finding after June 30, 1993, shall show evidence that3 the agency entered into the specific contractual obligation with4 the specific intention of making a finding under this paragraph in

5 order to provide sufficient revenues to payoff the indebtedness.

6 (b) Within 10 days following the making of a finding under

7 either paragraph (1) or (2) of subdivision (a), the agency shall send8 the Depftment of Housing and Community Develof'ment9 department and the Controller a copy ofthe finding, including the

10 factual information supporting the finding and other factual11 information in the housing element that demonstrates that either12 (1) the community does not need to increase, improve, or preserve13 the supply of housing for low- and moderate-income households,14 including very low income households, or (2) a percentage less15 than 20 percent wil be sufficient to meet the community's need

16 to improve, increase, and preserve the supply of housing for 10w-

17 and moderate-income households, including very low income18 households. Within 10 days following the making of a finding19 under paragraph (3) of subdivision ( a), the agency shall send the20 Departmelit ofIlousing Md Commnity Development department

21 and the Controller a copy of the finding, including the factual22 information supporting the finding that the community is making23 a substantial effort to meet its existing and projected housing needs.24 Agencies that make this finding after June 30, 1993, shall also25 submit evidence to the department of its contractual obligations26 with bondholders or private entities incurred prior to May 1, 1991,27 and made in reliance on this finding.28 (c) In any litigation to challenge or attack a finding made under

29 paragraph (1), (2), or (3) of subdivision (a), the burden shall be30 upon the agency to establish that the finding is supported by31 substantial evidence in light ofthe entire record before the agency.32 If an agency is determined by a court to have knowingly

33 misrepresented any material facts regarding the community's share34 of its regional housing need for low- and moderate-income housing,35 including very low income households, or the community's

36 production record in meeting its share ofthe regional housing need37 pursuant to the report required by subdivision (b) of Section 6540038 of the Government Code, the agency shall be liable for all court39 costs and plaintiff's attorney's fees, and shall be required to allocate40 not less than 25 percent of the agency's tax increment revenues to

98

57.\

( s-SB286 -10-1 its Low and Moderate Income Housing Fund in each year2 thereafter.3 (d) Nothing in this section shall be construed as relieving any4 other public entity or entity with the power of eminent domain of

5 any legal obligations for replacement or relocation housing arising6 out of its activities.7 (e) In carring out the purposes ofthis section, the agency may

8 exercise any or all of its powers for the construction, rehabilitation,9 or preservation of affordable housing for extremely low, very low,

10 10w- and moderate-income persons or families, including the11 following:12 (1) Acquire real propert or building sites subject to Section13 33334.1 6.

14 (2) (A) Improve real propert or building sites with onsite or15 offsite improvements, but only if both (i) the improvements are16 part of the new construction or rehabilitation of affordable housing17 units for low- or moderate-income persons that are directly

18 benefited by the improvements, and are a reasonable and

19 fundamental component of the housing units, and (ii) the agency20 requires that the units remain available at affordable housing cost21 to, and occupied by, persons and families of extremely low, very22 low, low, or moderate income for the same time period and in the23 same manner as provided in subdivision (c) and paragraph (2) of24 subdivision (f) of Section 33334.3.25 (B) If the newly constructed or rehabilitated housing units are26 part of a larger project and the agency improves or pays for onsite27 or offsite improvements pursuant to the authority in this

28 subdivision, the agency shall pay only a portion of the total cost29 of the onsite or offsite improvement. The maximum percentage

30 ofthe total cost of the improvement paid for by the agency shall

31 be determined by dividing the number of housing units that are32 affordable to low- or moderate-income persons by the total number33 of housing units, if the project is a housing project, or by dividing34 the cost of the affordable housing units by the total cost of the35 project, if the project is not a housing project.36 (3) Donate real property to private or public persons or entities.37 (4) Finance insurance premiums pursuant to Section 33136.

38 (5) Construct buildings or structures.

39 (6) Acquire buildings or structures.

40 (7) Rehabilitate buildings or structures.

98

57.l

\b-11- SB 286

1 (8) Provide subsidies to, or for the benefit of, extremely low

2 income households, as defined by Section 50106, very low income3 households, as defined by Section soios, lower income4 households, as defined by Section 50079.5, or persons and families5 of low or moderate income, as defined by Section 50093, to the6 extent those households cannot obtain housing at affordable costs

7 on the open market. Housing units available on the open market8 are those units developed without direct governent subsidies.

9 (9) Develop plans, pay principal and interest on bonds, loans,10 advances, or other indebtedness, or pay financing or carring11 charges.12 (10) Maintain the community's supply of mobile homes.13 (11) Preserve the availability to lower income households of14 affordable housing units in housing developments that are assisted15 or subsidized by public entities and that are threatened with16 imminent conversion to market rates.17 (f) The agency may use these funds to meet, in whole or in part,18 the replacement housing provisions in Section 33413. However,19 nothing in this section shall be construed as limiting in any way20 the requirements of that section.21 (g) (I) The agency may use these funds inside or outside the

22 project area. The agency may only use these funds outside the23 project area upon a resolution of the agency and the legislative24 body that the use will be of benefit to the project. The25 determination by the agency and the legislative body shall be final26 and conclusive as to the issue of benefit to the project area. The27 Legislature finds and declares that the provision of replacement28 housing pursuant to Section 33413 is always of benefit to a project.29 Unless the legislative body finds, before the redevelopment plan30 is adopted, that the provision oflow- and moderate-income housing31 outside the project area will be of benefit to the project, the project32 area shall include property suitable for 10w- and moderate-income33 housing.

34 (2) (A) The Contra Costa County Redevelopment Agency may35 use these funds anywhere within the unincorporated territory, or36 within the incorporated limits of the City of Walnut Creek on sites37 contiguous to the Pleasant Hil BART Station Area Redevelopment

38 Project area. The agency may only use these funds outside the39 project area upon a resolution of the agency and board of40 supervisors determining that the use wil be of benefit to the project

98

57.. L

\7SB 286 -12-1 area. In addition, the agency may use these funds within the

2 incorporated limits ofthe City of Walnut Creek only if the agency3 and the board of supervisors find all of the following:4 (i) Both the County of Contra Costa and the City of Walnut

5 Creek have adopted and are implementing complete and current

6 housing elements of their general plans that the Department of7 Housing and Community Development has determined to be in8 compliance with the requirements of Article 10.6 (commencing9 with Section 65580) of Chapter 3 of Division 1 of Title 7 of the10 Governent Code.11 (ii) The development to be funded shall not result in any12 residential displacement from the site where the development isi 3 to be built.

i 4 (iii) The development to be funded shall not be constructed in

15 an area that currently has more than 50 percent of its population16 comprised of racial minorities or low-income families.17 (iv) The development to be funded shall allow construction of

i 8 affordable housing closer to a rapid transit station than could be19 constructed in the unincorporated territory outside the Pleasant20 Hil BART Station Area Redevelopment Project.2 i (B) Ifthe agency uses these funds within the incorporated limits

22 of the City of Walnut Creek, all of the following requirements

23 shall apply:24 (i) The funds shall be used only for the acquisition of land for,

25 and the design and construction of, the development of housing26 containing units affordable to, and occupied by, 10w- and27 moderate-income persons.

28 (ii) If less than all the units in the development are affordable

29 to, and occupied by, low- or moderate-income persons, any agency30 assistance shall not exceed the amount needed to make the housing

31 affordable to, and occupied by, 10w- or moderate-income persons.

32 (iii) The units in the development that are affordable to, and33 occupied by, low- or moderate-income persons shall remain

34 affordable for a period of at least 55 years.35 (iv) The agency and the City of Walnut Creek shall determine,36 if applicable, whether Aricle xxiv of the California Constitution37 permits the development.

38 (h) The Legislature finds and declares that expenditures or39 obligations incurred by the agency pursuant to this section shall40 constitute an indebtedness of the project.

98

SiD \

\ß.-13- SB 286

1 (i) This section shall only apply to taxes allocated to a

2 redevelopment agency for which a final redevelopment plan is3 adopted on or after January i, 1977, or for any area that is added4 to a project by an amendment to a redevelopment plan, which

5 amendment is adopted on or after the effective date of this section.6 An agency may, by resolution, elect to make all or part of the7 requirements of this section applicable to any redevelopment

8 project for which a redevelopment plan was adopted prior to

9 January 1, 1977, subject to any indebtedness incurred prior to the10 election.11 (j) (1) (A) An action to compel compliance with the12 requirement of Section 33334.3 to deposit not less than 20 percent13 of all taxes that are allocated to the agency pursuant to Section14 33670 in the Low and Moderate Income Housing Fund shall be15 commenced within 10 years of the alleged violation. A cause of16 action for a violation accrues on the last day of the fiscal year in17 which the funds were required to be deposited in the Low and18 Moderate Income Housing Fund.

19 (B) An action to compel compliance with the requirement of20 this section or Section 33334.6 that money deposited in the Low

21 and Moderate Income Housing Fund be used by the agency for22 purposes of increasing, improving, and preserving the community's23 supply of 10w- and moderate-income housing available at

24 affordable housing cost shall be commenced within 10 years of25 the alleged violation. A cause of action for a violation accrues on26 the date of the actual expenditure of the funds.27 (C) An agency found to have deposited less into the Low and28 Moderate Income Housing Fund than mandated by Section 33334.329 or to have spent money from the Low and Moderate Income

30 Housing Fund for purposes other than increasing, improving, and31 preserving the community's supply oflow- and moderate-income

32 housing, as mandated, by this section or Section 33334.6 shall33 repay the funds with interest in one lump sum pursuant to Section34 970.4 or 970.5 of the Government Code or may do either of the35 following:36 (i) Petition the court under Section 970.6 for repayment in37 installments.38 (ii) Repay the portion of the judgment due to the Low and

39 Moderate Income Housing Fund in equal installments over a period40 of five years following the judgment.

98

Sl.t

\qSB 286 -14-

1 (2) Repayment shall not be made from the funds required to be2 set aside or used for low- and moderate-income housing pursuant

3 to this section.4 (3) Notwithstanding clauses (i) and (ii) of subparagraph (C) of

5 paragraph (1), all costs, including reasonable attorney's fees if6 included in the judgment, are due and shall be paid upon entry of7 judgment or order.8 (4) Except as otherwise provided in this subdivision, Chapter

9 2 (commencing with Section 970) of Part 5 of Division 3.6 of Title10 1 of the Government Code for the enforcement of a judgment11 against a local public entity applies to a judgment against a local12 public entity that violates this section.13 (5) This subdivision applies to actions filed on and after Januar

14 1,2006.15 (6) The limitations period specified in subparagraphs (A) and

16 (B) of paragraph (1) does not apply to a cause of action brought17 pursuant to Chapter 9 (commencing with Section 860) of Title 10

18 of Part 2 of the Code of Civil Procedure.19 (k) (1) From July 1,2009, to June 30,20 i 0, inclusive, an agency

20 may suspend all or part of its required allocation to the Low and21 Moderate Income Housing Fund from taxes that are allocated to22 that agency pursuant to Section 33670.23 (2) An agency that suspends revenue pursuant to paragraph (1)

24 shall pay back to its low- and moderate-income housing fund the25 amount of revenue that was suspended in the 2009-10 fiscal year26 pursuant to this subdivision from July 1,2010, to June 30, 2015,27 inclusive.28 (3) An agency that suspends revenue pursuant to paragraph (1)

29 and fails to repay or have repaid on its behalf the amount of revenue30 suspended pursuant to paragraph (2) shall, commencing July i,31 2015, be required to allocate an additional 5 percent of all taxes32 that are allocated to that agency pursuant to Section 33670 for low-33 and moderate-income housing for the remainder of the time that34 the agency receives allocations of tax revenue pursuant to Section35 33670.36 (4) An agency that fails to payor have paid on its behalf the37 full amount calculated pursuant to subparagraph (J) of paragraph38 (2) of subdivision (a) of Section 33690, or subparagraph (1) of

39 paragraph (2) of subdivision (a) of Section 33690.5, as the case40 may be, shall, commencing July 1, 2010, or July t 2011, as

98

'57~ L

2--15- SB286

1 applicable, be required to allocate an additional 5 percent of all

2 taxes that are allocated to that agency pursuant to Section 33670

3 for low- and moderate-income housing for the remainder of the4 time that the agency receives allocations of tax revenue pursuant

5 to Section 33670.

6 SEC. 6. Section 33367 of the Health and Safety Code is

7 amended to read:8 33367. The ordinance shall contain all of the following:9 (a) The purposes and intent of the legislative body with respect

i 0 to the project area.

11 (b) The plan incorporated by reference.

12 (c) A designation of the approved plan as the official13 redevelopment plan of the project area.

14 (d) The findings and detern1Inations of the legislative body,15 .. hieh shall be based on clearly artieulated ami doeumented

16 e'tidenee, that:17 (1) The project area is a blighted area, the redevelopment of18 which is necessary to effectuate the public purposes declared in19 this part. Thisfinding shall be supported by empirical and, to the20 greatest extent fèasible, quantifable evidence demonstrating the21 prevalence of specifc conditions set forth in Section 330310n22 specifc properties that are so substantial that they cause a23 reduction of, or lack of, proper utilization of the entire project24 area. Evidence shall be reasonable in nature, credible, and of solid25 value. Conclusions not based on documented evidence of specifc

26 conditions shall be deemed insuffcient.27 (2) The redevelopment plan would redevelop the area in

28 conformity with this part and in the interests of the public peace,29 health, safety, and welfare.30 (3) The adoption and carring out ofthe redevelopment plan is

31 economically sound and feasible.32 (4) The redevelopment plan is consistent with the general plan33 of the community, including, but not limited to, the community's34 housing element, which substantially complies with the35 requirements of Article 10.6 (commencing with Section 65580)

36 of Chapter 3 of Division I of Title 7 of the Government Code.37 (5) The carring out of the redevelopment plan would promote38 the public peace, health, safety, and welfare of the community and39 would effectuate the purposes and policy of this part.

98

57.\

"2-'

SB286 -16-1 (6) The condemnation of real property, if provided for in the2 redevelopment plan, is necessary to the execution of the3 redevelopment plan and adequate provisions have been made for4 payment for property to be acquired as provided by law.5 (7) The agency has a feasible method or plan for the relocation

6 of families and persons displaced from the project area, if the7 redevelopment plan may result in the temporary or permanent8 displacement of any occupants of housing facilities in the project9 area.

10 (8) (A) There are, or shall be provided, in the project area ori 1 in other areas not generally less desirable in regard to public

12 utilities and public and commercial facilities and at rents or prices13 within the financial means of the families and persons displaced14 from the project area, decent, safe, and sanitary dwellings equal15 in number to the number of and available to the displaced families16 and persons and reasonably accessible to their places of17 employment.18 (B) Families and persons shall not be displaced prior to the19 adoption of a relocation plan pursuant to Sections 33411 and

20 33411.1. Dwellng units housing persons and families of low or21 moderate income shall not be removed or destroyed prior to the22 adoption of a replacement housing plan pursuant to Sections

23 33334.5,33413, and 33413.5. "24 (9) All noncontiguous areas of a project area are either blighted25 or necessary for effective redevelopment and are not included for26 the purpose of obtaining the allocation of taxes from the area27. pursuant to Section 33670 without other substantial justification28 for their inclusion.29 (10) Inclusion of any lands, buildings, or improvements which

30 are not detrimental to the public health, safety, or welfare is3 i necessary for the effective redevelopment of the area of which

32 they are a part; that any area included is necessary for effective33 redevelopment and is not included for the purpose of obtaining34 the allocation of tax increment revenues from the area pursuant to35 Section 33670 without other substantial justification for its36 inclusion.37 (11) The elimination of blight and the redevelopment of the38 project area could not be reasonably expected to be accomplished

39 by private enterprise acting alone without the aid and assistance40 of the agency.

98

5Î~ ,

L-"£

-17- SB286

1 (12) The project area is predominantly urbanized, as defined

2 by subdivision (b) of Section 33320.1.

3 (13) The time limitation and, if applicable, the limitation on the4 number of dollars to be allocated to the agency that are contained5 in the plan are reasonably related to the proposed projects to be

6 implemented in the project area and to the ability of the agency to7 eliminate blight within the project area.

8 (14) The implementation of the redevelopment plan wil improve9 or alleviate the physical and economic conditions of blight in the

10 project area, as described in the report prepared pursuant to Section11 33352.12 (e) A statement that the legislative body is satisfied that13 permanent housing facilities will be available within three years14 from the time occupants of the project area are displaced and that,15 pending the development of the facilities, there will be available16 to the displaced occupants adequate temporary housing facilities17 at rents comparable to those in the community at the time of theiri 8 displacement.

19 SEC 7. Section 33426.5 of the Health and Safety Code is20 amended to read:21 33426.5. Notwithstanding the provisions of Sections 33391,22 33430,33433, and 33445, or any other provision of this part, an23 agency shall not provide any form of direct assistance to the24 following:25 (a) An automobile dealership which wil be or is on a parcel

26 of land which has not previously been developed for urban use,27 unless, prior to the effective date of the act that adds this section,28 the agency either owns the land or has entered into an enforceable29 agreement, for the purchase ofthe land or of an interest in the land,30 including, but not limited to, a lease or an agreement containing31 covenants affecting real propert, that requires the land to be32 developed and used as an automobile dealership.33 (b) (1) A development that wi1 be or is on a parcel ofland of

34 five acres or more which has not previously been developed for35 urban use and that wil, when developed, generate sales or use tax36 pursuant to Part 1.5 (commencing with Section 7200) of Division37 2 of the Revenue and Taxation Code, unless the principal permitted38 use of the development is offce, hotel, manufacturing, or industrial,39 or unless, prior to the effective date ofthe act that adds this section,40 the agency either owns the land or has entered into an enforceable

98

57.1

1,3SB286 -18-

1 agreement, for the purchase ofthe land or of an interest in the land,2 including, but not limited to, a lease or an agreement containing

3 covenants affecting real propert, that requires the land to be4 developed.

5 (2) For the purposes of this subdivision, a parcel shall include6 land on an adjacent or nearby parcel on which a use exists that is7 necessary for the legal development of the parceL.8 (c) A development that will be or is on a parcel of land of 209 acres or more that has not previously been developed for urban

lOuse, except that this restriction shall not apply to land locatedi 1 within both a project area adopted pursuant to Chapter 4.5

12 (commencing with Section 33492) and the boundaries of aformer13 military base that has been closed or realigned by the actions of14 the federal Defense Base Closure and Realignment Commission.i 5 (d) A development or business, either directly or indirectly, for16 the acquisiton, construction, improvement, rehabilitation, or

17 replacement of property that is or would be used for a golf course18 or for a racetrack, speedway or other racing venue.

19 (e) A development or businessJor the acquisition, construction,

20 improvement, rehabilitation, or replacement of property that is or21 would be used for a stadium, coliseum, arena, ballpark or other22 sports facility that is intended for use by a professional sports23 franchise unless the proposed assistance or another component

24 of the financing for the proposed project is submitted to the

25 electorate that resides in the territorial jurisdiction of the agency26 providing assistance, and is approved by a majority of the voters27 voting on the proposed development.

28 W29 (f A development or business, either directly or indirectly, for30 the acquisition, construction, improvement, rehabilitation, or31 replacement of property that is or would be used for gambling or32 gaming of any kind whatsoever including, but not limited to,33 casinos, gaming clubs, bingo operations, or any facility wherein34 banked or percentage games, any fOffi of gambling device, or35 lotteries, other than the California State Lottery, are or wil be36 played.37 tt38 (g) The prohibition in subdivision-. (f is not intended to39 prohibit a redevelopment agency from acquiring property on or in40 which an existing gambling enterprise is located, for the purpose

98

5i ~ t

L.Lt

-19- SB286

I of selling or leasing the property for uses other than gambling,

2 provided that the agency acquires the property for fair market3 value.4 te5 (h) This section shall not be construed to apply to agency

6 assistance in the construction of public improvements that serve

7 all or a portion of a project area and that are not required to be

8 constructed as a condition of approval of a development described

9 in subdivision (a), (b), Of (e), (c), (d), (e), or (f or to prohibit10 assistance in the construction of public improvements that are1 i being constructed for a development that is not described in

12 subdivision (a), (b),-e (c), (d), (e), or (f.13 SEC 8. Section 33444.7 is added to the Health and Safety14 Code, to read:15 33444.7. An agency may establish a program under which iti 6 loans or grants fund~ to owners or tenants to improve, rehabiltate,

17 or retrofit buildings or structures located within the redevelopment18 project area to increase energy effciency or reduce greenhouse

19 gas emissions resulting from such buildings or structures, or to20 facilitate infill development of areas targetedfor such development

21 in an approved sustainable communites strategy that applies to22 the agency's jurisdiction.23 SEC 9. Section 33444.8 is added to the Health and Safety24 Code, to read:25 33444.8. (a) An agency may provide direct assistance to26 businesses within project areas in connection with new or existing27 facilties for industrial or manufacturing uses or similar uses of

28 statewide benefit, where the assistance provided is reasonably29 expected to result in the retention or expansion of not less than 2530 full-time equivalent jobs within the project area.31 (b) Direct assistance may include, but is not limited to, loans,32 loan guarantees, or the provision or replacement of machinery33 and equipment in new or existing facilities for industrial or34 manufacturing uses in the project area.35 (c) The Legislature finds and declares that the purpose of this

36 section is to clarif existing law and to provide agencies with

37 additonal authority to assist businesses in order to encourage the38 retention of existing employment opportunities and the attraction39 of new employment opportunities. These activities and programs

98

51 r \

1.C;

SB286 -20-I shall constitute redevelopment as prescribed in Sections 33020

2 and 33021.

3 SEC 10. Section 33460.1 is added to the Health and Safety4 Code, to read:

5 33460.1. Immediately upon receipt, each agency shall deposit

6 one quarter of one-tenth of 1 percent of the tax increment received7 by the agency after the amount required to be deposited in the Low

8 and Moderate Income Housing Fund has been deducted, into the9 Redevelopment Agency State Audit Fund created pursuant to

10 Section 50464.6 to be used solely for the purpose described inI I subdivision (b) of that section.

12 SEC 11. Section 33488 of the Health and Safety Code is13 amended to read:14 33488. Prior to merging project areas pursuant to Section15 33486, a redevelopment agency shall notify the department and16 the Controller of its intention to merge its project areas, which17 shall occur no later than 30 days prior to adoption of the ordinance18 which provides for merger.19 SEC '¡ 2. Section 33491 is added to the Health and Safety Code,20 to read:21 33491. (a) Commencing with the implementation plan next

22 adoptedfollowing January 1, 2012, an implementation plan shall23 contain the specifc goals and objectives of the agency for the24 project area and the specifc programs and potential projects that25 wil cause not less than 50 percent of its net unencumbered revenue26 during the next five years to be expended for one or more of the27 following:28 (1) Development, including rehabilitation, resulting in29 signifcant job retention or èreation.30 (2) Remediation of contaminated properties.

3 I (3) Infill and transit-oriented development.

32 (4) Military base conversion.33 (5) Public infrastructure, excluding buildings.34 (6) Housing affordable to persons of very low and extremely

35 low income.

36 (b) "Net unencumbered revenue" shall mean all revenue37 received by the agency, less: debt service on bonds, notes and38 other obligations entered into prior to January 1, 2012; payments39 to taxing agencies pursuant to Section 33607.5 or 33607.7 or under

98

57, t

2.0

-21- SB286

1 agreements entered into pursuant to former Section 33401; and2 deposits in the agency's low- and moderate-income housingfund.

3 (c) Prior to approving an implementation plan subject to this

4 subdivision, the agency shall obtain the recommendation of the

5 project area committee. If a project area committee does not exist,

6 the agency shall obtain the recommendation of a community

7 advisory body designated by the legislative body which is8 representative of interests described in subdivision (c) of Section9 33385. If the project area committee or community advisory body

10 does not make its recommendation within 60 days after receiving11 a copy of the proposed implementation plan, the agency may

12 consider the implementation plan without their recommendation.13 (d) The implementation plans adoptedfive and 10 years ajier

14 the implementation plan that implements this subdivision shall15 evaluate the agency's progress in achieving the goals and16 objectives described in subdivision (a). The agency shall obtain17 the recommendation of the project area committee or community18 advisory body in the manner set forth in subdivision (c). If the19 project area committee or community advisory body recommends

20 against adoption of the implementation plan adopted 10 years

21 after the implementation plan that implements this subdivision,

22 the agency shall only adopt that implementation plan upon a23 two-thirds vote of all of its members. Until an implementation plan24 has been approved as setforth in this subdivision, an agency shall25 not undertake any activity not provided for in the existing26 implementation plan.27 SEC. 13. Section 33601 of the Health and Safety Code is28 amended to read:29 33601. (a) An agency may borrow money or accept financial

30 or other assistance from the state or the federal government or any31 other public agency for any redevelopment project within its area32 of operation, and may comply with any conditions of such loan or33 grant.34 An35 (b) An agency may borrow money (by the issuance of bonds or36 otherwise) or accept financial or other assistance from any private37 lending institution for any redevelopment project for any of the38 purposes of this part, and may execute trust deeds or mortgages39 on any real or personal property owned or acquired.

98

57,,/

2.1SB286 -22-1 (c) An agency shall pay interest on any money borrowed from

2 the legislative body at a rate no greater than simple interest on 10

3 year United States Treasury bils. The provisions of this subdivision4 shall become effective January 1, 2012, and shall apply to money5 borrowed from the legislative body at any time, regardless of the6 provisions of any note, agreement, or other written instrument to

7 the contrary.

8 SEC 14. Section 33607.9 is added to the Health and Safety9 Code, to read:

10 33607.9. On or before January 1, 2013, the Controller shall11 develop a simple, uniform, and consistent methodology for the12 calculation, payment, and reporting of pass through payments as13 required by Sections 33607.5 and 33607. 7 that is consistent with14 existing published case law and Attorney General opinions

15 interpreting Sections 33607.5 and 33607. 7. The Controller shall16 appoint an advisory commitee to advise in the development of17 methodology. The advisory committee shall include representatives18 from the Chancellor of the California Community Colleges, the19 State Department of Education, the California Redevelopment

20 Association, county auditor-controllers, and any other authorities21 in the field that the Controller deems necessary or appropriate.22 SEC 15. Section 33610 of the Health and Safety Code is23 amended to read:24 33610. (a) At any time after the agency created for any25 community becomes authorized to transact business and exercise26 its powers, the legislative body ofthe community may appropriate27 to the agency such amounts as the legislative body deems necessary28 for the administrative expenses and overhead of the agency. The29 money appropriated may be paid to the agency as a grant to defray30 the expenses and overhead, or as a loan to be repaid upon such31 terms and conditions as the legislative body may provide.32 In33 (b) In addition to the common understanding and usual34 interpretation of the term, "administrative expense" includes, but35 is not limited to, expenses of redevelopment planning and

36 dissemination of redevelopment information.37 (c) An agency may enter into an agreement with the legislative38 body to reimburse the legislative body for administrative expenses39 and overhead of the agency paid by the legislative body. An agency

98

S7.l

Leg

-23- SB 286

I shall not pay costs of providing services, materials, or facilities

2 which do not directly benefit the redevelopment project.3 SEC. 16. Section 33670 of the Health and Safety Code is4 amended to read:5 33670. Any redevelopment plan may contain a provision that6 taxes, if any, levied upon taxable property in a redevelopment

7 project each year by or for the benefit of the State of Ca1ifomia,8 any city, county, city and county, district, or other public9 corporation (hereinafter sometimes called "taxing agencies") after

10 the effective date of the ordinance approving the redevelopment

11 plan, shall be divided as follows:12 (a) That portion of the taxes which would be produced by the

13 rate upon which the tax is levied each year by or for each of thei 4 taxing agencies upon the total sum of the assessed value of thei 5 taxable property in the redevelopment project as shown upon the

16 assessment roll used in connection with the taxation of that propert17 by the taxing agency, last equalized prior to the effective date of18 the ordinance, shall be allocated to and when collected shall be19 paid to the respective taxing agencies as taxes by or for the taxing20 agencies on all other propert are paid (for the purpose of allocating21 taxes levied by or for any taxing agency or agencies which did not22 include the territory in a redevelopment project on the effective23 date of the ordinance but to which that territory has been annexed24 or otherwise included after that effective date, the assessment roll25 of the county last equalized on the effective date of the ordinance26 shall be used in determining the assessed valuation of the taxable27 propert in the project on the effective date); and28 (b) Except as provided in subdivision (e) or in Section 33492. 15,29 that portion of the levied taxes each year in excess of that amount30 shall be allocated to and when collected shall be paid into a special31 fund of the redevelopment agency to pay the principal of and

32 interest on loans, moneys advanced to, or indebtedness (whether33 funded, refunded, assumed, or otherwise) incurred by the34 redevelopment agency to finance or refinance, in whole or in part,35 the redevelopment project. Unless and until the total assessed36 valuation of the taxable property in a redevelopment project

37 exceeds the total assessed value of the taxable property in that38 project as shown by the last equalized assessment roll referred to39 in subdivision (a), all of the taxes levied and collected upon the40 taxable property in the redevelopment project shall be paid to the

98

~l&1

?!SB286 -24-1 respective taxing agencies. When the loans, advances, and

2 indebtedness, if any, and interest thereon, have been paid, all

3 moneys thereafter received from taxes upon the taxable property4 in the redevelopment project shall be paid to the respective taxing5 agencies as taxes on all other propert are paid.6 (c) In any redevelopment project in which taxes have been

7 divided pursuant to this section prior to 1968, located within any8 county with total assessed valuation subject to general propert9 taxes for the 1967-68 fiscal year between two billion dollars

10 ($2,000,000,000) and two bilion one hundred milion dollars11 ($2,100,000,000), if the total assessed valuation of taxable propert12 within the redevelopment project for the 1967-68 fiscal year wasi 3 reduced, the total sum of the assessed value of taxable property

14 used as the basis for apportionment of taxes under subdivision (a)15 shall be reduced by i 0 percent for the i 968-69 fiscal year and16 fiscal years thereafter.17 (d) For the purposes of this section, taxes shall not include taxesi 8 from the supplemental assessment roll levied pursuant to Chapter19 3.5 (commencing with Section 75) of Part 0.5 of Division 1 of the20 Revenue and Taxation Code for the 1983-84 fiscal year.21 ( e) That portion of the taxes in excess of the amount identified22 in subdivision (a) which are attributable to a tax rate levied by a23 taxing agency for the purpose of producing revenues in an amount24 sufficient to make annual repayments of the principal of, and the25 interest on, any bonded indebtedness for the acquisition or26 improvement of real property shall be allocated to, and when27 collected shall be paid into, the fund of that taxing agency. This28 subdivision shall only apply to taxes levied to repay bonded29 indebtedness approved by the voters of the taxing agency on or30 after January 1, 1989.31 (f For purposes of this section, taxes levied, divided, and32 allocated shall exclude any funds considered educational entity

33 property tax revenues. This subdivision shall apply to tax increment34 revenues generated from any redevelopment project area35 established on or after January 1, 2012.36 SEC. 17. Section 33670.5 of the Health and Safety Code is37 amended to read:38 33670.5. (a) Section 33670 fulfills the intent of Section 16 of39 Article XVI of the Constitution. To further carr out the intent of

40 Section 16 of Article XVI of the Constitution, whenever that

98

51. \

30-25- SB286

1 provision requires the allocation of money between agencies such2 allocation shall be consistent with the intent of the people when

3 they approved Section 16 of Article XVI of the Constitution.4 Whenever money is allocated between agencies by means of a5 comparison of assessed values for different years, that comparison6 shall be based on the same assessment ratio. When there are

7 different assessment ratios for the years compared, the assessed

8 value shall be changed so that it is based on the same assessment

9 ratio for the years so compared.

10 (b) Pursuant to subdivision (f of Section 33670, the Legislature11 finds and declares that moneys allocated pursuant to Section 33670

12 in order to carry out the intent of Section 16 of Article XVI of thei 3 California Constitution exclude any funds considered educational

14 entity property tax revenues.15 SEC. 18. Section 33675.1 is added to the Health and Safetyi 6 Code, to read:

17 33675.1. On or before January 1, 2013, and periodically18 thereafter, the Controller shall review the uniform form for a19 statement of indebtedness and a reconcilation statement prescribed20 pursuant to Section 33675 and shall, after obtaining the input of21 county auditor-controllers, the California Redevelopment

22 Association, the Society of Certifed Public Accountants, and any23 other authorities in the field that the Controller deems necessary24 or appropriate, make revisions to the uniform

form for a statement25 of indebtedness and a reconcilation statement consistent with this26 part, including, but not limited to, the types and amounts of

27 indebtedness to be reported.28 SEC. 19. Section 50464.6 is added to the Health and Safety29 Code, to read:30 50464.6. (a) The Redevelopment Agency State Audit Fund is

31 hereby created in the State Treasury and is available, upon32 appropriation, to the State Auditor for the purposes of subdivision33 (b). Notwithstanding Section 16305.7 of the Government Code,

34 any moneys received by the State Auditor pursuant to Section35 33460.1, and any other sources, repayments, interest, or new36 appropriations, shall be deposited in the fund established by this37 section. Moneys in the fund shall not be subject to transfer to any38 other fund pursuant to any provision of Part 2 (commencing with39 Section 16300) of Division 4 of Title 2 of the Government Code,40 except the Surplus Money Investment Fund. The State Auditor may

98

S7..l

'3\SB286 -26-1 require the transfer of moneys in the fund to the Surplus Money

2 Investment Fund for investment pursuant to Article 4 (commencing3 with Section 16470) of Chapter 3 of Part 2 of Division 4 of Title4 2 of the Government Code. Notwithstanding Section 16305.7 of

5 the Government Code, all interest, dividends, and pecuniary gains6 from the investments shall accrue to the fund.7 (b) To the extent funds are available pursuant to subdivision

8 (a), the State Auditor shall conduct or shall have conducted

9 performance audits of selected redevelopment agencies to ensure10 compliance with the requirements of the Community11 Redevelopment Law. The performance audits conducted pursuant12 to this subdivision shall include reviews of redevelopment agencies'13 separately required independent audits from the previous year.14 The State Auditor shall require that each agency take action to15 correct any audit violations found through the performance audit.16 If the State Auditor determines that an agency has not corrected17 the audit violations within 180 days of a final audit report, the18 State Auditor shall forward all relevant documents to the Attorney19 Generalfor action pursuant to Section 33080.8.20 SEC. 20. (a) By January 1, 2013, the Controller shall issue21 regulations revising and consolidating reportingfor redevelopment22 agencies. The goal of the regulations shall be to dQ all of the23 following: (l) unif and simplif the reporting requirements of

24 redevelopment agencies; (2) focus reporting requirements on25 information that wil be of the greatest utility in monitoring the26 activities of redevelopment agencies and their compliance with27 the provisions of the Community Redevelopment Law; and (3)

28 produce consistent and comparable data using a user-friendly,29 selfchecking electronic data reporting system. The Controller30 shall consult with an advisory committee comprised of persons

3 I nominated by the department, the Legislative Analyst, the32 Caltfornia Society of Certifed Public Accountants, the Caltfornia33 Redevelopment Association, and any other authorites in the field34 that the Controller deems necessary and appropriate.35 (b) In connection with issuing the regulations described in

36 subdivision (a), by January 1, 2013, the Controller shall prepare37 or cause to be prepared a management study that evaluates the38 reporting of redevelopment agencies and recommends any new

39 management systems, including required technology, needed to40 implement the proposed regulations.

98

Sl~ ,

32--27- SB286

1

2 All matter omitted in this version of the bill3 appears in the bil as introduced in the4 Senate, February 14,2011. (JR11)5

o

98

S7.. \

SB 286 Senate Bil - Bil Analysis Page 1 of9

(O~BILL ANALYSIS

SENATE GOVERNANCE & FINANCE COMMITTEESenator Lois Walk, Chair

BILL NO: SB 286AUTHOR: WrightVERSION: 4/27/11CONSULTANT: Weinberger

HEAING: 4/6/11FISCA: YesTAX LEVY: No

REDEVELOPMENT AGENCIES

Revises numerous provisions of the Community RedevelopmentLaw.

Background

The Community Redevelopment Law allows local officials toset-up redevelopment agencies, prepare and adoptredevelopment plans, and finance redevelopment acti vi ties.

A redevelopment agency keeps the property tax incrementrevenues generated from increases in property values withina redevelopment project area. When it adopts aredevelopment plan for a project area and selects a baseyear, the agency "freezes" the amount of property taxrevenues that other local governments receive from theproperty in that area. In future years, as the projectarea's assessed valuation grows above the frozen base, theresul ting property tax revenues --- the property taxincrement --- go to the redevelopment agency instead ofgoing to the underlying local governments.

The diversion of property tax increment financing neverharms schools because the State General Fund automaticallybackfills the difference between what a school districtreceives in property tax revenues and what the districtneeds to meet its revenue allocation limit. When aredevelopment agency diverts property tax revenues from aschool district, the State General Fund pays thedifference.

Citing a significant State General Fund deficit, GovernorBrown iS 2011 - 12 budget proposed eliminating redevelopmentagencies on July 1, 2011 and returning billions of dollarsof property tax revenues to schools, ci ties, and countiesto fund core services in future years. AB 101 (Assembly

D

SB 286 -- 4/27/11 -- Page 2

Budget Committee, 2011) and SB 77 (Senate Budget and FiscalReview Committee, 2011) contain the implementing language.Some legislators oppose the complete elimination ofredevelopment in California. Instead, they want topreserve tax increment financing for local economicdevelopment while revising the Community Redevelopment Lawto reduce redevelopment i s state General Fund impact andimprove redevelopment agencies i performance andaccountabili ty.

Proposed Law

Senate Bill 286 makes numerous changes to provisions of theCommunity Redevelopment Law affecting redevelopmentagencies' :

Tax increment allocations.Project area creation and expansion.Prohibitions against assisting specified types of

development.Redevelopment acti vi ties.Blight findings.Reporting requirements.Audi t requirements.Pass-through paymentsStatements of indebtedness.Adrinistrati ve expenses.Interest payments.

I. Tax increment allocations The California Constitutionauthorizes property tax increment financing (Article XVI,§16). State law lets redevelopment agencies divert otherlocal governments i property tax increment revenues to fightphysical and economic blight. When a redevelopment agencydiverts property tax increment revenues from a schooldistrict, the State General Fund pays the difference,providing an indirect state subsidy to redevelopmentagencies. Senate Bill 286 requires that any fundsconsidered educational entity property tax revenues must beexcluded from any taxes levied, divided, and allocated

Slo(http://ww.1eginfo.ca.gov/pub/11-12/bil/sen/sb _ 0251-0300/sb _ 286 _ cfa_ 20110428_150854... 6/8/2011

SB 286 Senate Bil - Bil Analysis Page 2 of9

Col under the statute that governs the allocation of revenuesfrom taxes levied on taxable property wi thin aredevelopment proj ect. This requirement applies to taxincrement revenues generated from a redevelopment projectestablished on or after January i, 2012. ÝSee §16 and §17of the bilL. J

o

SB 286 -- 4/27/11 -- Page 3

II. Project area creation and expansion Senate Bill 286prohibits a community from adopting a redevelopment plan ora plan amendment to add terri tory to a proj ect area if theproposed project area or area to be added, when aggregatedwith all other project areas within the community, wouldresul t in having:

25% of a city' 5 total land area included wi thin thecombined redevelopment project areas, or10% of a county's, or city and count~, total

unincorporated land area included wi thin redevelopmentproj ect areas.

The prohibition applies only to a proj ect area for which afinal redevelopment plan is adopted on or after January 1,2012 or to an area that is added to a project area by aredevelopment plan amendment adopted on or after January 1,2012. The prohibition does not apply to a redevelopmentplan or plan amendment to add terri tory to a proj ect areapursuant to state laws governing the redevelopment ofclosed mili tary bases. ݧ4. J

III. Prohibi tions acrainst assisting specified types ofdevelopment The Community Redevelopment Law prohibitsredevelopment officials from providing any directassistance to auto dealerships on sites that had not beendeveloped for urban uses and developments of five acres ormore which had not been developed for urban uses and whichgenerate sales or use tax revenues (AB 1290, Isenberg,1993). Redevelopment official are also prohibited fromproviding direct assistance to casinos (AB 2063, Isenberg,1996). In addition to those prohibitions, SB 286 prohibitsredevelopment officials from providing any form of directassistance to:

A development that will be or is on a parcel ofland of 20 acres or more which has not been previouslydeveloped for urban uses. This restriction does notapply to land that is both in a project area andwithin the boundaries of a former military base.A development or business for the acquisition,

construction, improvement, rehabilitation, orreplacement of property that is, or would be, used fora golf course or for a racetrack, speedway, or otherracing venue.A development or business for the acquisition,

construction, improvement, rehabilitation, orreplacement of property that is, or would be, used for

o

SB 286 -- 4/27/11 -- Page 4

a stadium, coliseum, arena, ballpark, or other sportsfacility that is intended for use by a professionalsports franchise unless the proposed assistance oranother component of the financing for the proposedproject is submitted to the electorate that resides inthe territorial jurisdiction of the agency providingassistance and is approved by a majority of the votersvoting on the proposed development.ݧ7" J

IV. Redevelopment activities The Community RedevelopmentLaw describes three redevelopment activities:

The alteration, improvement, modernization,reconstruction, or rehabilitation of structures.

The provision of open space, public or privatebuildings, structures, and improvements.

The replanning, redesign, or development ofundeveloped areas that meet certain conditions.

Senate Bill 286 lets redevelopment officials provide directassistance to businesses within project areas in connectionwith new or existing facilities for industrial ormanufacturing uses of statewide benefit, where theassistance provided is reasonably expected to result in theretention of at least 25 full-time equivalent jobs withinthe project area. This direct assistance can includeloans, loan guarantees, or the provision or replacement ofmachinery and equipment in new or existing facilities forindustrial or manufacturing uses in the project area. SB286 declares that the purpose of this provision is to

5to'\http://ww.leginfo.ca.gov/pub/II-12/bi1/sen/sb_ 0251-0300/sb _286 _cfa_ 20110428_150854... 6/8/2011

SB 286 Senate Bil - Bi1 Analysis Page 3 of9

clarify existing law to provide redevelopment agencies withadditional authority to assist businesses in order toencourage the retention of existing employmentopportunities and the attraction of new employmentopportunities. The bill declares that these activities andprograms constitute redevelopment as prescribed inspecified statutes. ݧ9. 1

toi

The Communi ty Redevelopment Law allows redevelopmentagencies to loan money to rehabilitate commercial buildingswithin project areas. Metropolitan planning organizations(MPOs) must prepare a "sustainable communities strategy" asa component of their regional transportation plans (SB 375,Steinberg, 2008). This strategy is a blueprint forcommuni ties to achieve a region's greenhouse gas emissionsreduction target. SB 286 allows redevelopment agencies toprovide loans or grants to owners or tenants to improve,

SB 286 -- 4/27/11 -- Page 5

rehabilitate, or retrofit buildings or structures within aproject area to increase energy efficiency or reducegreenhouse gas emissions resulting from such building orstructures, or to facilitate infill development of areastargeted for such development in an approved sustainablecommuni ties strategy that applies to the agency'sjurisdiction. ݧ8. J

The Community Redevelopment Law requires redevelopmentofficials to adopt an implementation plan for aredevelopment project area every five years. Beginningwith the implementation plan adopted after January i, 2012,SB 286 requires that an implementation plan must containthe specified goals and obj ecti ves of the agency for theproject area and the specific programs and projects thatwill cause at least 50% of its net unencumered revenueduring the next five years to be spent for one or more ofthe following:

Development, including rehabilitation, resulting insignificant job retention or creation.Remediation of contaminated properties.Infill and transit oriented development.Military base conversion.Public infrastructure, excluding buildings.Housing affordable to persons of very low and

extremely low income.

S8 286 defines "net unencumered revenue" as all revenuerecei ved by the agency less:

Debt service on bonds, notes, and other obligationsentered into prior to January 1, 2012.

Pass-through payments to taxing entities.Deposi ts in the agency i s low- and moderate-income

housing fund.

SB 286 requires an agency to obtain the recommendation ofthe proj ect area committee before approving animplementation plan under the bill's new requirements. Ifa project area committee does not exist, SB 286 requires anagency to obtain the recomméndation of a representativecommunity advisory body designated by the local legislativebody. The agency may consider the implementation planwithout a recommendation if the project area committee orcommunity advisory body doesn't make a recommendationwithin 60 days of receiving the proposed implementationplan.

o

SB 286 -- 4/27/11 -- Page 6

SB 286 requires the implementation plans adopted five and10 years after the first implementation plan adopted underthe bill' s new requirements to evaluate the agency'sprogress in achieving specified goals and objectives. If aproj ect area committee or community advisory bodyrecommends against adoption of the implementation plan thatis to be adopted after 10 years, the agency must only adoptthat implementation plan upon a 2/3-vote of all of itsmembers. Until that implementation plan has been approved,an agency cannot undertake any acti vi ty not provided for inthe existing implementation plan. ݧ12.)

V. Blight findings. The Community Redevelopment Lawrequires an ordinance adopting a redevelopment plan for aproject area to include the local legislative body'sfinding, based on clearly articulated and documentedevidence, that the project area is a blighted area. AB 1290(Isenberg, 1993) enacted the first statutory definition of

57..lhttp://ww.1eginfo.ca.gov/pub/II-12/bil/sen/sb_ 0251-0300/sb _286_ cfa_ 20110428 _150854... 6/8/2011

SB 286 Senate Bil - Bi1 Analysis Page 4 of9

loL\ blight. Partially in reaction to the protests followingthe U. s. Supreme Court i s Kelo decision the Legislaturesubsequently tightened the blight definition (5B 1206,Kehoe, 2006). Senate Bill 286 deletes the requirement thata local legislative body's blight finding must be basedclearly articulated and documented evidence. Instead, 5B286 requires a local legislative body to support a findingthat a project area is blighted with empirical and, to thegreatest extent feasible, quantifiable evidencedemonstrating the prevalence of specified physical andeconomic conditions that cause blight that is sosubstantial that it causes a reduction of, or lack of,proper utilization of the entire project area. Evidencemust be reasonable in nature, credible, and of solid value.Conclusions not based on documented evidence of specificcondi tions are insufficient. ݧ6. J

VI. Reporting requirements The Community RedevelopmentLaw requires every redevelopment agency to file an annualreport with its city councilor county board ofsupervisors. Redevelopment officials must also send a copyto the state Controller, who must compile and publish, byMay 1, annual reports on redevelopment agencies' financialtransactions (SB 1387, Marks, 1984). Redevelopmentagencies i annual reports must contain:

An independent financial audit report.A fiscal statement.

u

5B 286 -- 4/27/11 -- Page 7

A description of the agency's housing activities.A description of the agency's progress in

alleviating blight.A list and status report of loans in default.A description ot the agency's properties and

property acquisitions.A list of the fiscal years that the agency expects

specified time limits to expire.Any other information that the agency believes

useful.

The Controller must develop and periodically revise theguidelines for the content of these reports and mustappoint an advisory committee to advise in the developmentof the guidelines. Senate Bill 286 specifies that theController must review and revise the guidelines at leastevery five years, following consultation with the advisoryconuittee. ݧ1.)

The Conuunity Redevelopment Law requires the CaliforniaDepartment of Housing and Community Development to publishannual reports on redevelopment agencies i activities.Beginning with the 2013-14 fiscal year, SB 286 requires theController to compile and publish the annual reports, andrepeals:

The authority for the annual reports to contain abiennial review of relocation assistance required bystate law.A requirement that the annual reports must list

project areas that are not subject to state lawgoverning the replacement of housing units wi thin aredevelopment proj ect area.A requirement that specified redevelopment agencies

must receive copies of the reports and executivesumaries.ݧ2. J

SB 286 requires the Department of Housing and CommunityDevelopment (BCD) to develop guidelines establishingspecific measures and standards to evaluate redevelopmentagency performance in specific areas, including:

A uniform method of calculating and reporting jobcreation and retention.

Standards for measuring the efficiency andeffectiveness of expenditures for affordable housing.

Standards for measuring and reducing poverty levels

u

5B 286 -- 4/27/11 -- Page 8

in proj ect areas.Standards for measuring and reducing crime in

proj ect areas.Methods for measuring reductions in vehicle miles

traveled accomplished through redevelopment proj ectsincluding assistance provided to intil! and transitoriented development.

Standards for reporting on brownfield cleanup andhazardous waste mitigation.

01..\http://ww.leginfo.ca.gov/pub/11-12/bil/sen/sb_0251-0300/sb _286_ cfa _20110428_150854... 6/8/2011

SB 286 Senate Bil - Bi1 Analysis Page 5 of9

70S8 286 requires HCD to appoint an advisory committee toassist and advise in developing the guidelines. Thecommittee must include representatives with demonstratedexperience in redevelopment, local government metries thatmeasure anyone or more of the specified standards, or anyother fields that HCD deems necessary and appropriate.Beginning with the 2013-14 fiscal year, a redevelopmentagency IS annual report to its legislative body mustinclude a discussion of the redevelopment agency' 5performance based on the guidelines prepared by HCD. ݧ3. J

SB 286 requires the Controller, following consultation withan advisory committee, to issue regulations, by January 1,2013, revising and consolidating reporting forredevelopment agencies. The goal of the regulations mustbe to:

Unify and simplify redevelopment agencies ireporting requirements.

Focus reporting requirements on information thatwill be of greatest utility in monitoring theactivities of redevelopment agencies and theircompliance with the Community Redevelopment Law.

Produce consistent and comparable data using auser-friendly, self-checking electronic data reportingsystem.

SB 286 requires the Controller, by January i, 2013, toprepare, or cause to be prepared, a management study thatevaluates redevelopment agencies' reporting and recommendsany new management systems, including required technology,needed to implement the proposed regulations.ݧ20. J

State law requires a redevelopment agency to set aside 20%of its property tax increment revenues to increase,improve, and preserve the supply of affordable housing,

D

5B 286 4/27/11 -- Page 9

unless it makes specified findings, by resolution. Within10 days of making such a finding, a redevelopment agencymust send the Department of Housing and CommunityDevelopment a copy of the finding including factualinformation supporting the finding and other specifiedinformation. SB 286 requires that a redevelopment agencymust also send a copy of the finding and additionalinformation to the state Controller. ݧ5. J

state law requires a redevelopment agency to notify theDepartment of Housing and Community Development at least 30days before adopting an ordinance to merge redevelopmentproject areas. SB 286 requires a redevelopment agency toalso notify the State Controller at least 30 days beforeadopting an ordinance to merge redevelopment project areas.ݧll.)

VII. Audit requirements The Bureau of State Audits,under the direction of the state Auditor, performsfinancial, compliance, performance, and contract audits oflocal governments, either as required by statute or asrequested by the Joint Legislative Audit Committee (JLAC).Senate Bill 286 creates the Redevelopment State Audit Fundin the State Treasury and makes it available, uponappropriation, to the State Audi tor for specified purposes.SB 286 prohibits transferring moneys in the fund to any

other fund except the Surplus Money Investment Fund,subject to specified conditions. SB 286 requires anredevelopment agency to deposit one quarter of one-tenth of1% of the tax increment received by the agency after theamount to be deposited in the Low and Moderate IncomeHousing Fund has been deducted, into the RedevelopmentState Audit Fund. SB 286 requires that money depositedinto the Fund must solely be used by the State Auditor topay for performance audits of selected redevelopmentagencies to ensure compliance with the CommunityRedevelopment Law's requirements. The performance auditsmust include reviews of the agencies' independent auditsfrom the previous year. The State Auditor must requirethat each agency take action to correct any auditviolations found through the performance audit. If theState Auditor determines that an agency has not correctedan audit violation within 180 days of a final audit report,it must forward all relevant documents to the AttorneyGeneral for action under a statute that lets the AttorneyGeneral sue an agency for failing to correct a major audit

D

58 286 -- 4/27/11 -- Page 10

57. \

http://ww.1eginfo.ca.gov/pub/11-12/bil/sen/sb_0251-0300/sb _286_ cfa _20110428_150854... 6/8/2011

SB 286 Senate Bil - Bil Analysis Page 6 of9

1 \violation. ݧ§lO and 19.J

VIII. Pass-throuah payments The Community RedevelopmentLaw requires redevelopment officials to make pass-throughpayments to schools and other local governments to mitigatethe long-term fiscal effects of property tax incrementfinancing (AB 1290, Isenberg, 1993).

In a May 2008 report, the California State Controller'sOffice found that:

Many school districts and community collegesunderstated the amount of pass-through payments theyrecei ve from redevelopment agencies.

Some redevelopment agencies failed to make theirmandatory pass-through payments.

Redevelopment agencies made numerous reportingerrors which resulted in an understatement ofpass-through payments made to schools.

In response to the Controller's report, a State Budgettrailer bill enacted procedures to identify and recoverpass-through payments that redevelopment agencies failed tomake to K-l4 education agencies for fiscal years 2003-04through 2007-08 and ensure proper payments in 2008-09 (AB1389, Assembly Budget Committee, 2008). Despite a recentAttorney General's opinion and appellate court decision onthe topic, local officials still disagree about howredevelopment agencies should calculate, pay, and reporttheir pass-through payments to local taxing entities.Senate Bill 286 requires the State Controller to develop asimple, uniform, and consistent methodology forcalculating, paying, and reporting pass-through paymentsthat is consistent with published case law and AttorneyGeneral opinions. S8 286 requires the Controller toappoint an advisory committee to advise in developing themethodology. The Committee must include representativesfrom the Chancellor of the California Community Colleges,the State Department of Education, the CaliforniaRedevelopment Association, county auditor-controllers, andany other authorities in the field that the Controller

deems necessary or appropriate. ݧ14.)

ix. Statements of indebtedness The CorrunityRedevelopment Law requires redevelopment officials to filean annual "statement of indebtedness" identifying anagency's bonds, loans, and other debts. The state

D

SB 286 -- 4/27/11 -- Page 11

Controller must prescribe a uniform form of statement ofindebtedness and reconciliation statement. Senate Bill 286requires the state Controller to review the uniform form ofstatement of indebtedness and reconciliation statementprescribed by state law and to revise it, including thetypes and amounts of indebtedness to be reported. Beforemaking revisions, the Controller must obtain input fromcounty auditor-controllers, the California RedevelopmentAssociation, the Society of Certified Public Accountants,and any other authorities in the field that the Controllerdeems necessary and appropriate. SB 286 requires theController to review the uniform form of statement ofindebtedness and reconciliation statement prescribed bystate law on or before January l, 2013, and periodicallyafter that date" ݧ18" J

x. Administrative expenses The Community RedevelopmentLaw allows a local legislative body to appropriate money toa redevelopment agency, either as a grant or a loan, to payfor the agency's administrative expenses and overhead.Senate Bill 286 lets an agency enter into an agreement withits community' 5 legislative body to reimburse theadministrative body for administrative expenses andoverhead of the agency paid by the legislative body. SB286 prohibits an agency from paying the costs of providingservices, materials, or facilities which do not directlybenefit the redevelopment project. ݧlS. J

XI. Interest pavrents The Community Redevelopment Lawlets a redevelopment agency borrow money from any publicagency for any redevelopment project within its area ofoperation. Agencies may also borrow money or acceptfinancial or other assistance from any private lendinginstitution for any redevelopment project. Senate Bill 286limi ts the interest rate on any money a redevelopmentagency borrows from its community's legislative body to arate that doesn1t exceed simple interest on 10-year USTreasury Bills. SB 286 specifies that this limit becomeseffective on January l, 2012, and applies to money borrowedfrom the legislative body at any time, regardless of theprovisions of any note, agreement, or other writteninstrument to the contrary. ݧ13. 1

5£' Lhttp://ww.leginfo.ca.gov/pubI11-12/bil/sen/sb_0251-0300/sb _ 286 _cfa_2011 0428_150854... 6/8/2011

SB 286 Senate Bil - Bi1 Analysis Page 70f9

State Revenue impact 12.

II

5B 286 -- 4/27/11 -- Page 12

No estimate.

Comments

i. Purpose of the bill Eliminating redevelopmentagencies to obtain a relatively small amount of one-timestate General Fund relief is shortsighted. Physical andeconomic blight hold back many California communities.Private investors lack confidence in blighted real estatemarkets. Local officials i tradi tiona! regulatory programsand public works spending aren i t enough to attract andretain private investment. Without economically strongurban areas, the pressure for suburban sprawlincreases. Really tough blight requires the really strongtools that redevelopment provides. At its February 9, 2011hearing on Governor Brown's proposal to eliminateredevelopment, the Senate Governance & Finance Committeeheard testimony from numerous local officials about thedifference that redevelopment agencies are making in theircommuni ties. At a time when local governments arestruggling to recover from the Great Recession, eliminatingredevelopment agencies will make it even harder for localofficials to make the public investments that create jobs,retain businesses, and attract new residents. sa 286offers an alternative approach that seeks to reduceredevelopment agencies' impact on the State General Fund infuture years while improving redevelopment agencies iperformance and accountability. The bill makes substantialreforms to the Community Redevelopment Law, addressing someof the most controversial aspects of redevelopmentactivities. For over 60 years, redevelopment agencies haveliterally changed that way that California looks; largelyfor the better. SB 286 helps ensure that they willcontinue to benefit California i s communities for decades tocorne.

2. Constitutional questions. On November 2, 2010,California voters approved Proposition 22, which amendedthe California Constitution to prohibit the Legislaturefrom requiring a community redevelopment agency to:

Pay, remit, loan, or otherwise transfer, directlyor indirectly, taxes allocated to the agency pursuantto the California Constitution's authorization of taxincrement financing to or for the benefit of theState, any agency of the State, or any jurisdiction.

o

5B 286 -- 4/27/11 -- Page 13

Use, restrict, or assign a particular purpose fortax increment revenues for the benefit of the State,any agency of the State, or any jurisdiction, otherthan for making speci f ied pass-through payments or forincreasing, improving, and preserving the supply oflow and moderate income housing available at anaffordable cost.

To benefit the State General Fund, SB 286 amends thestatutes governing the allocation of property taxes leviedon parcels within a redevelopment area to exclude "anyfunds considered educational entity property tax revenues"from the tax increment that is allocated to project areasestablished after January 1, 2012. The Committee may wishto consider whether SB 286 violates Proposition 22 byincluding a specific category of funds in some projectareas' tax increment, but excluding those funds, to offsetState General Fund spending on schools, from other projectareas' tax increment. The Committee also may wish toconsider whether SB 286 violates Proposition 22 byrequiring redevelopment agencies to deposit a smallpercentage of their tax increment revenues into the StateTreasury to pay for performance audits conducted by theState Auditor.

3. Definition S8 286 doesn't define the phrase "anyfunds considered educational entity property tax revenues,"which is not used anywhere else in statutes. Do"educational entity property tax revenues" include revenuesthat are deposited into a county' 5 Educational RevenueAugmentation Fund? Do they include revenues that would goto "basic aid" school districts, which do not receive abackfill from the State General fund? By using the word"considered, II SB 286 seems to give someone - perhaps acounty auditor - discretion to choose what property tax

57" ,http://ww.leginfo.ca.gov/pub/11-12/bil/senlsb_0251-0300/sb _ 286 _cfa _ 20110428_150854... 6/8/2011

SB 286 Senate Bil - Bi1 Analysis Page 80f9

(? revenues to exclude from a new project area's tax incrementallocations. Rather than forcing local officials tointerpret this unclear phrase, the Corni ttee may wish toconsider amending SB 286 to provide a detailed definitionof what revenues are to be excluded from tax incrementallocations to new redevelopment project areas.

4. Fiscal relief The state government has a policyinterest in seeing that redevelopment projects succeed inboosting local economies and expanding the supply ofaffordable housing. The state government also has a fiscalinterest in redevelopment because the state General Fund

II

SB 286 -- 4/27/11 -- Page 14

subsidizes redevelopment agencies' proj ects. Al though SB286 contains some substantial reforms that address thestate's policy interests in redevelopment activities, thebill offer less substantial fiscal relief. The requirementto exclude educational entity property tax revenues fromtax increment allocations applies only to newly createdproject areas. SB 286 doesn't exclude educational entityproperty tax revenues from tax increment allocated toexisting project areas that - in the future - annex newterritory, merge project areas, extend time limits forissuing debt, or increase the ceiling on the amount ofindebtedness that they may incur. The bill may provide nofiscal relief at all if a court finds its fiscal provisionto be unconstitutional. The Committee may wish to considerwhether SB 286 adequately addresses the state's fiscalinterests in redevelopment.

5. More certaintv, potential cost A 2008 StateController's audit of redevelopment pass-through paymentsto local taxing entities and subsequent reports fromredevelopment agencies on their pass-through paymentsrevealed many areas of disagreement among redevelopmentofficials and county auditors over how those paymentsshould be calculated. An Attorney General's opinion issuedlast September supported redevelopment agencies'interpretation of how some calculations should be made. Anappellate court decision earlier this year in Los AngelesUnified School District v. County of Los Angeles supportedthe school districts i interpretation on another questionregarding pass-through payment calculations. S8 286requires the State Controller to develop a simple, uniform,and consistent methodology for calculating, paying, andreporting pass-through payments. The bill does not make itclear whether the Controller's methodology would be bindingon local governments. The Committee may wish to consideramending SB 286 to require compliance with the Controller'spass-through payment methodology. The Committee may alsowish to consider whether greater certainty aboutpass-through calculations could come at a cost to thestate. If the methodology developed by the Controllerresults in a decrease in the future pass-through paymentsredevelopment agencies must make to schools, the StateGeneral Fund will automatically make up the difference.

6. Blight findings and indebtedness SB 286 builds on thetighter definition of "blight" enacted by S8 1206 (Kehoe,

o

SB 286 -- 4/27/11 -- Page 15

2006) by imposing more rigorous standards on the evidencethat redevelopment officials must use to support a findingthat blight exists within a project area. Redevelopmentofficials must make a finding that blight exists beforethey can create a redevelopment project area, expand aredevelopment project area, merge redevelopment projectareas, or extend the time limits on a redevelopment projectarea. A blight finding is not required beforeredevelopment agency officials increase the ceiling on theamount of indebtedness incurred for a project area. TheCommittee may wish to consider amending SB 286 to apply thebill's more robust blight finding requirement to anyamendment to a redevelopment plan that raises a projectarea's "debt ceiling."

7. Implement reforms before adding responsibilities Someof S8 286' s reforms will significantly change the way thatredevelopment agencies do business, improving their effortsto promote local economic development and provide housing.The bill also expands redevelopment agencies' authority toassist property owners and tenants to increase energyefficiency, reduce greenhouse gas emissions, and createinfill development. Allowing agencies to issue more debtfor new types of redevelopment activities could offset SB

5"7oe\http://ww.leginfo.ca.gov/pub/11-12/bil/sen/sb_0251-0300/sb _ 286_ cfa_ 20110428 _150854... 6/8/2011

SB 286 Senate Bil - Bi1 Analysis Page 9 of9

28615 fiscal benefits and detract from efforts to implementthe bill' s substantial reforms. The Committee may wish toconsider whether legislators should evaluate theeffectiveness of SB 2861 s reforms before authorizing newredevelopment acti vi ties.

71

8. Limited interest SB 286 caps the interest rate on aredevelopment agency i 5 "internal" debts to its city councilor board of supervisors at the simple rate of interest onlO-year US Treasury Bills. That cap applies retroactivelyto money borrowed at any time, regardless of the termsunder which it was originally borrowed. The CaliforniaConstitution prohibits the Legislature from passing anybill impairing the obligation of contracts. The Committeemay wish to consider whether a court would find 58 286' sretroactive interest rate cap to be an unconstitutionalimpairment of a contract.

9. More limited interest S8 286' s interest rate capapplies only to an agency's internal debts. It is aresponse to concerns that local officials can use excessiveinterest rates on internal borrowing to generate revenues

o

5B 286 -- 4/27/11 -- Page 16

for the city or county in which the agency is located.However, some agencies have also paid exorbitant interestrates on debts to private lenders. The Committee may wishto consider amending S8 286 to impose an interest rate capon more types of redevelopment debt.

10. Related legislation S8 286 is not the only billcontaining extensive redevelopment reform proposals.Senate Bill 450 (Lowenthal, 2011) amends numerousprovisions of the Community Redevelopment Law to reform howredvelopment agencies spend their low and moderate incomehousing funds. That bill is scheduled to be heard in theSenate Appropriations Coroi ttee on May 2.

Support and Opposition (4/28/11)

Support California Redevelopment Association, League ofCalifornia Cities.

Opposition Unknown.

57.\http://ww.1eginfo.ca.gov/pub/II-12/bi1/sen/sb_0251-0300/sb _286_ cfa _ 20110428_150854... 6/8/2011

r1~ S8286 vs A81250 - Redevelopment Reform Summary

Senator Rod Wright (D-Inglewood) is authorin.g Senate Bill 286, a bill that would imposenew reforms to increase accountability and limit the size and scope of redevelopment inCalifornia. Assembly members Alejo, Lara, Perea and V. Manuel Perez introduced thecorresponding Assembly Bill whose principal co-author is Senator Wright. Nineadditional assembly members co-authored the bilL.

In its description AB 1250 "(relates) to redevelopment and (is declared in) urgency thereof, to take effect immediately." Moreover, the bill has been amended to require a 2/3vote. The bill is urgency legislation. SB 286, on the other hand, is not urgencylegislation and requires just a majority vote.

Below is an outline of SB286 and AB 1250 reforms by sections including the listing of thesections in the Health and Safety code to be revised. Since SB 286 and AB 1250parallel closely, sections that correspond are typed in regular font. Sections relating toSB 286 only are typed in bold, while sections pertaining to AB 1250 only are underlined.

Section 1: Reporting, Health and Safety Code § 33080.3

Adds language regarding Controllers responsibilities as follows: Controller to review andrevise guidelines at least every 5 years following consultation with the advisorycommittee.

Section 2: Annual Reports, § 33080.6

· Requires the Controller to compile and publish annual reports on or before May 1 ofeach year for each redevelopment agency as of 01/01/13.

· Repeals authority for annual reports~ To contain a biennial review of relocation assistance.~ Requirement to list project areas that are not subject to state law

governing the replacement of housing units within a project area.~ Requirement for specified RDAs to receive copies of reports and

executive summaries.

Section 3: Performance Standards, § 33080.14

· Requires Department of Housing and Community Development (HCD) to develop

guidelines establishing a set of consistent performance standards that all agencieswill use for evaluating RDA performance beginning in FY 2013-14, including:

~ A uniform method of calculating and reporting job creation and retention.~ Standards for measuring the efficiency and effectiveness of expenditures for

affordable housing.~ Standards for measuring and reducing poverty levels in project areas.~ Standards for measuring and reducing crime in project areas.~ Methods for measuring reductions in vehicle miles traveled through such

projects as infill development and transient-oriented development.~ Standards for reporting on brownfield clean-up and hazardous waste

mitigation.. Requires HCD to appoint an advisory committee to assist in developing the

guidelines.. Committee must include representatives with demonstrated experience in

redevelopment, local government metrics or other fields deemed necessary.. Requires annual report as of FY 2013-14 to include discussion of the agency's

performance based on HCD guidelines.

57- \

-,bSection 4: Project Area Creation & Expansion Limits, § 33320.1· Cities in which 25% or more of the land area is in redevelopment project areas and

counties in which 10% or more of unincorporated land is in project areas, cannot addany additional land area to redevelopment.

· Applicable only to project areas for which a redevelopment plan is adopted on orafter January 1, 2012 or to an area that is added to a project area by aredevelopment plan amendment on or after January 1, 2012.

· Does not apply to redevelopment plan or amendment to add territory to project areagoverning the redevelopment of closed military bases or state laws governing suchredevelopment.

Section 5: Housing Area Reporting Relationship, § 33334.2Changes reporting relationship to include both the HCD and the Controller when findingfor less than 20% affordable housing set-aside.

Section 6: Defines" Affected Taxing Entity," § 33353.2· Any governmental agency that levies a property tax on all or a portion of the

properties in the project area in the fiscal year prior to the fiscal year in which thereport was prepared (pursuant to 33328) or any fiscal year after the date aredevelopment plan is adopted.

Section 7: Redefines Blighted Area, § 33367 (Was Section 6 in SB 286)

· Requires local legislative body to support a finding of blight with empirical, feasible,and quantifiable evidence demonstrating the prevalence of specific conditions ofphysical and economic blight that are so substantial they cause a reduction of orprevent the proper utilization of the entire project area.

. Evidence must be reasonable, credible and of solid value.· Conclusions without such evidence are insuffcient.

Section 8: Prohibits Specific Types of Development, § 33426.5 (Was Section 7 in

SB 286)· In addition to current prohibitions (auto dealerships, casinos) redevelopment will be

prohibited on vacant (never developed) tracts of land of 20 acres or more, with anexception for military base conversions.

· Redevelopment would also be prohibited for the acquisition, construction,improvement, rehabilitation or replacement of property that is or would be used for agolf course, racetrack, speedway or other racing venue

· (The prohibition above also applies to the acquisition, construction,improvement, rehabilitation or replacement of property for a stadium,colosseum, arena, ballpark or other professional sports facilty unless theassistance is submitted to the electorate and approved by the majority of thevoters.)

Section 9: Energy Efficiency, § 33444.7 (Was Section 8 in SB 286)

. Allows establishment of a loan or grant program to improve, rehabilitate or retrofitbuildings in the project area to increase energy efficiency or reduce greenhouse gasemissions.

. Allows same to facilitate infill development in the project area for an approvedsustainable communities strategy.

5(~ \

17Section 10: Adds Other Assistance Provisions § 33444.8 (Was Section 9 in S8

286)Allows direct assistance in the form of loans, loan guarantees or the provision orreplacement of machinery and equipment to businesses in the project area in connectionwith new or existing facilities for industrial or manufacturing uses of statewide benefit,where the assistance can reasonably result in the retention or expansion of not less than25 FTE jobs in the project area.

(Section 10: State Audit Fund Requirement § 34460.1Requires agencies to deposit 0.025% of their post-low/mod increment into a fundthat the State Auditor would use to pay for auditing redevelopment agencies.)

Section 11: Merging Project Areas § 33488

Must notify Controller as well as HCD at least 30 days in advance before adopting anordinance to merge RDA project areas.

Section 12: Goals and Objectives, Project Committee § 33491· Redevelopment agencies would be required to adopt specific, performance-based

goals to ensure at least 50% of the net unemcumbered revenue (defined as allrevenue received less debt service on bonds, notes and other obligations enteredinto before 01/01/12; passthrough payments to taxing authorities and affordablehousing fund deposits) address the following State priorities:

y Significant job retention or creation

y Remediating contaminated property

y Infill and transit-oriented development

y Military base conversion

y Public infrastructure (excludes buildings)

y Very low and extremely low income affordable housing

· Requires agencies to establish a local Project Area Committee (PAC) or equivalentcommunity advisory board comprised of local property owners, businesses, renters,home owners and community groups to approve implementation plan.

· Agency may consider implementation of plan without committee recommendation ifno recommendation is forthcoming from the PAC within 60 days of receivingproposed plan.

· The local PAC or equivalent community advisory board shall review the agency's 5-year implementation plan and make a recommendation to the agency. Every 10years, the implementation plan must receive the approval of the PAC or equivalentcommunity advisory board or it has to be approved by a 2/3 vote of the agencyboard.

Section 13: Interest Rate § 33601

· Sets interest rate on borrowed money from legislative body at the equal rate (amaximum of) simple interest on 10 year US Treasury bills.

· Interest rate is applied as of 01/01/12 on money borrowed from the legislative body

at any time, regardless of the provisions of the note. (reach-back)

Section 14: Passthrough Payments § 33607.9

· Controller to develop a uniform, consistent methodology for the calculation, paymentand reporting of passthrough payments and would require that method to beconsistent with both published case law and Attorney General opinions.

· Controller to appoint an advisory committee to advise in the development of themethodology.

S1. \

'7b· Advisory committee to include representatives from the Chancellor of California

Community Colleges, State Department of Education, California RedevelopmentAssociation, county auditor-controllers and others deemed necessary.

Section 15: Administrative Expenses § 33610Would allow redevelopment agencies to reimburse their sponsoring agency foradministrative expenses and overhead, though not for services or materials that do notdirectly benefit the redevelopment project.

Section 16: Educational Taxes and New Project Area § 33670

Beginning January 2012, any new redevelopment plan or project area would beprohibited from collecting the school share of local property tax or tax increment.

Section 17: Statements of Indebtedness § 33675.1 (Was Section 18 in S8 286)

· Requires the Controller to review and revise the uniform statements of indebtednessand reconciliation statement on or before 01/01/13.

· Before making revisions Controller must obtain input from county auditor-controllers,CRA, CA Society of Certified Public Accountants and others as deemed necessary.

(Section 17: Tax Increment Allocations § 33670.5Any funds considered educational entity tax revenues must be excluded from anytaxes levied, divided and allocated under the statue that governs the allocation ofrevenues from taxes levied on taxable property within a redevelopment project.)

Section 18: TI Financing for Projects after 01/01/12, new Sec 6.5 to Part 1 of Div 24of H&S Code· &33679.1 Applies to project areas that are formed after 01/01/12 or to plans that are

adopted after 01/01/12 that add territory· &33679.2 Definitions of "affected taxing entity," "noneducational taxing agency," and

"taxes."· &33679.3 Taxes shall be divided as follows:

y (al a portion shall be paid to the noneducational taxing agency

y (bl that portion of taxes in excess of the amount allocated to the

noneducational taxing agency shall be paid into a special fund of theredevelopment agency to pay the principal and interest on loans

y (cl the portion of taxes in excess of (al for the purpose of producing revenuesin an amount sufficient to make repayments for the acquisition orimprovement of real property shall be paid into the fund of thatnoneducational taxing agency.

y It is the purpose of the legislature to prohibit the use of Section 33670 to

finance community redevelopment after 01/01/2012.. &33679.5 The County Auditor shall prepare for RDA a written statement each year

with detailed taxable assessed value, estimated amounts of taxes calculated. andgross TI information

. &33679.6 Prior to the adoption of a redevelopment plan providing for tax incrementfinancing, any affected taxing entity may elect to be allocated all or a portion of thetax revenues allocated to the agency. The governing body of the affected taxingentity must adopt a resolution to that effect. The affected entity may at any time electnot to receive all or a portion of that allocation.

· &33679.7 Payment to affected taxing entitiesy All amounts in this section are to be calculated after the required deduction to

LMIHF.

5 7~ t

(1~ Payments are in addition to any amounts to the affected taxing entities

received pursuant to Section 33679.3. though it defines code sections thatallow for reductions in payments.

~ ERAF is not an affected taxing agency.~ Each year the agel1Y shall pay to the affected taxing entities 25% of the TI

after the deducted contribution to the LMIHF. Beginning at the 11th year. theagency will pay an additional 21 % of the increase over the new 10th yearbase line. A third tier of 14% is added beginning at the 31st year using the30th year as a new base line. At this point the Agency will be paying to theaffected taxing entities 25% +21% + 14% after the deduction to the LMIHF.

~ Prior to incurring debts. an agency must reguest the affected taxing entitiesfor permission for subordination

~ Statement regarding necessity of payment to alleviate financial burden toaffected taxing entities

(Section 19: Audits, Added § 50464.6· Creates State Audit Fund to be used for specified purposes· Prohibits transfer of monies from this fund to any other fund except Surplus

Money Fund· Money can only be used to pay for performance audits of selected RDAs· Performance audits include reviews of agencies independent audits of

previous year

. The State Auditor shall require that each agency take action to correct any

violations found through the performance audit. If the State Auditordetermines that an agency has not corrected the violations within 180 days ofa final audit report, it shall forward to the Attorney General for action.)

Section 19: Added Reporting Requirements (Was Section 20 in S8 286)· Requires Controller, following consultation with an advisory committee to issue

regulations by 01/01/13 revising and consolidating reporting for RDAs with goalsbeing to:

~ Unify and simplify RDA reporting requirements

~ Focus reporting requirements on information that will be of greatest utilityin monitoring RDA activities and compliance

~ Produce consistent and comparable data within an electronic datareporting system

· Requires Controller to prepare a management study evaluating RDA reporting and

make recommendations for new management systems or technology to implementproposed regulations.

Section 20: This is an urgency statute

S?~l

3"3

AMENDED IN ASSEMBLY JUNE 3, 2011

AMENDED IN ASSEMBLY MAY 27, 2011

CALIFORNIA LEGISLATURE-20Il-12 REGULAR SESSION

ASSEMBLY BILL No. 1250

Introduced by Assembly Members Alejo, Lara, Perea, and V.Manuel Pérez

(Principal coauthor: Senator Wright)(Coauthors: Assembly Members Allen, Campos, Carter, Davis,

Galgiani, Hall, Bonnie Lowenthal, Mendoza, and Solorio)(Coauthor: Senator De León)

February 18,2011

An act to amend Sections 33080.3, 33080.6, 33320.1, 33334.2,33353.2, 33367,33426.5,33488,33601,33610, and 33670 of, to addSections 33080.14, 33444.7, 33444.8, 33491, 33607.9, and 33675.1 to, .and to add Aricle 6.5 (commencing with Section 33679.1) to Chapter6 of Par 1 of Division 24 of, the Health and Safety Code, relating to

redevelopment, and declaring the urgency thereof, to take effectimmediately.

LEGISLATIVE COUNSEL'S DIGEST

AB 1250, as amended, Alejo. Redevelopment.(1) The Community Redevelopment Law authorizes the establishment

of redevelopment agencies in communities to address the effects ofblight, as defined, in blighted areas in those communities known asproject areas. Existing law requires that each redevelopment agencysubmit the final report of any audit undertaken by any other local, state,or federal governent entity to its legislative body and to additionally

97

5i~ \

3Lt

AB 1250 -2-present an annual report to the legislative body containing specifiedinformation.

This bil would impose new requirements on the agency with respectto implementation plans and evidentiary standards and expand existingprohibitions on agency direct assistance to certain projects.

The bil would require the Controller, on or before January 1,2013,to issue regulations revising and consolidating reporting forredevelopment agencies and to develop a simple, unform, and consistentmethodology for the calculation, payment, and reporting of pass throughpayments. The bill would also require the Controller to review andrevise the guidelines adopted for the content of the final report at leastevery 5 years, as specified. The bil would also transfer certain reportingrequirements from the Departent of Housing and CommunityDevelopment to the Controller, as specified, and require that agenciessend certain notifications to the Controller in addition to sending thenotifications to the department. The bil would require that thedepartment develop guidelines establishing standards to evaluate agencypedormance.

(2) The California Constitution authorizes a redevelopment agencyto receive funding through tax increment revenues attrbutable toincreases in assessed propert tax valuation of propert in a project areadue to redevelopment. Existing law prescribes the procedure by whichthe tax increment revenue is allocated.

The bil would establish an altemate procedure by which tax incrementrevenue is allocated for purposes of redevelopment plans adopted onor after January 1, 2012, and for any new territory added to aredevelopment plan that was adopted prior to January 1, 2012, butamended after January 1,2012, to add new terrtory. Specifically, theprocedure would require that tax. increment revenue transferred to anagency exclude any fuds considered educational entity propert taxrevenues, as prescribed.

(3) The bill would authorize an agency to loan or grant funds forprojects relating to energy effciency. The bil would also authorize anagency to provide direct assistance, as described, to businesses withinproject areas for industrial or manufacturing uses or similar uses ofstatewide benefit.

(4) This bil would declare that it is to take effect immediately as anurgency statute.

Vote: majority %. Appropriation: no. Fiscal committee: yes.State-mandated local program: no.

97

Sì. (

~-3- AD 1250

The people of the State of California do enact asfollows:

1 SECTION 1. Section 33080.3 of the Health and Safety Code2 is amended to read:

3 33080.3. The Controller shall develop and periodically revise4 the guidelines for the content of the report required by Section

5 33080.1. The Controller shall appoint an advisory committee to6 advise in the development of the guidelines. The advisory

7 committee shall include representatives from among those persons8 nominated by the department, the Legislative Analyst, the9 California Society of Certified Public Accountants, the California

10 Redevelopment Association, and any other authorities in the field11 that the Controller deems necessary and appropriate. The Controller12 shall review and revise the guidelines at least every five years,13 following consultation with the advisory committee.14 SEC. 2. Section 33080.6 of the Health and Safety Code is15 amended to read:16 33080.6. (a) On or before May 1 of each year, the Controller17 shall compile and publish annual reports of the activities of18 redevelopment agencies for the previous fiscal year, based on the19 information reported pursuant to subdivision (c) of Section 33080.120 and reporting the types of findings made by agencies pursuant to21 paragraph (1), (2), or (3) of subdivision (a) of Section 33334.2,22 including the date of the findings. The Controller's compilation23 shall also report on the project area mergers reported pursuant to24 Section 33488. The Controller shall publish this information for25 each project area of each redevelopment agency. The first report26 published pursuant to this section shall be for the 2013-14 fiscal27 year.28 (b) Changes to this section made by the act amending this

29 section shall take effect on January 1,2013.30 SEC. 3. Section 33080.14 is added to the Health and Safety31 Code, to read:32 33080.14. (a) On or before Januar 1, 2013, the department33 shall develop guidelines establishing specific measures and

34 standards to evaluate redevelopment agency performance in

35 specific areas, including the following:36 (l) A uniform method of calculating and reporting job creation

37 and retention.

97

S1~ \

3(P

AD 1250 -4-1 (2) Standards for measurng the effciency and effectiveness of

2 expenditues for affordable housing.3 (3) Standards for measuring and reducing povert levels in

4 project areas.

5 (4) Standards for measuring and reducing crime in project areas.

6 (5) Methods for measuring reductions in vehicle miles traveled7 accomplished through redevelopment projects, including, but not8 limited to, assistance provided to infill and transit oriented9 development.

10 (6) Standards for reporting on brownfield cleanup and hazardous

11 waste mitigation.12 (b) The departent shall appoint an advisory coinittee to assist13 and advise in the development of the guidelines required by this14 section. The advisory committee shall include representatives with15 demonstrated expertise in redevelopment, local governent metrcs16 that measure anyone or more of the standards described above,17 or any other fields of study that the departent deems necessary18 and appropriate.19 (c) Commencing with the 2013-14 fiscal year, the anual report20 required by Section 33080.1 shall include a discussion of the21 redevelopment agency's performance based on the guidelines22 prepared by the department pursuant to this section.23 SEC. 4. Section 33320.1 of the Health and Safety Code is24 amended to read:25 33320.1. (a) "Project area" means, except as provided in26 Section 33320.2, 33320.3, 33320.4, or 33492.3, a predominantly27 urbanized area of a community that is a blighted area, the28 redevelopment of which is necessary to effectuate the public29 purposes declared in this part, and that is selected by the planning30 commission pursuant to Section 33322.31 (b) As used in this section, "predominantly urbanized" means

32 that not less than 80 percent ofthe land in the project area is either33 of the following:34 (1) Has been or is developed for urban uses.

35 (2) Is an integral part of one or more areas developed for urban

36 uses that are surounded or substantially surounded by parcels37 that have been or are developed for urban uses. Parcels separated38 by only an improved right-of-way shall be deemed adjacent for39 the purpose of this subdivision. Parcels that are not blighted shall40 not be included in the project area for the purpose of obtaining the

97

57. \

31-5- AB 1250

1 allocation of taxes from the area pursuant to Section 33670 without2 other substantial justification for their inclusion.3 (c) For the puroses of this section, a parcel of propert as4 shown on the offcial maps of the county assessor is developed if5 that parcel is developed in a manner that is consistent with zoning

6 standards or is otherwise permitted under law.

7 (d) Except for a redevelopment plan or plan amendment to add

8 territory to a project area pursuant to Chapter 4.5 (commencing9 with Section 33492), a redevelopment plan or plan amendment to

10 add terrtory to a project area shall not be adopted by a community

11 if the proposed project area or area to be added by plan amendment,12 when aggregated with all other existing project areas within the13 community, would result in having (1) 25 percent of a city's or14 city and county's total land area included within the combined

15 redevelopment project areas or (2) 10 percent of a county's total16 unincorporated land area included within redevelopment project17 areas. The limitations contained in this subdivision shall apply18 only to a project area for which a final redevelopment plan is

19 adopted on or after January 1,2012, or to an area that is added to20 a project area by an amendment to a redevelopment plan, which

21 amendment is adopted on or after January i, 2012.22 (e) The requirement that a project be predominantly urbanized

23 shall apply only to a project area for which a final redevelopment24 plan is adopted on or after January 1, 1984, or to an area that is25 added to a project area by an amendment to a redevelopment plan,26 which amendment is adopted on or after January i, 1984.27 SEC. 5. Section 33334.2 of the Health and Safety Code is28 amended to read:29 33334.2. (a) Except as provided in subdivision (k), not less30 than 20 percent of all taxes that are allocated to the agency pursuant31 to Section 33670 shall be used by the agency for the puroses of

32 increasing, improving, and preserving the community's supply of33 10w- and moderate-income housing available at affordable housing34 cost, as defined by Section 50052.5, to persons and families of35 low or moderate income, as defined in Section 50093, lower36 income households, as defined by Section 50079.5, very low37 income households, as defined in Section 50105, and extremely38 low income households, as defined by Section 50106, that is39 occupied by these persons and families, unless one of the following40 findings is made annually by resolution:

97

S7. \

~AB 1250 -6-1 (1) (A) That no need exists in the community to improve,

2 increase, or preserve the supply of low- and moderate-income

3 housing, including housing for very low income households in a

4 manner that would benefit the project area and that this finding is5 consistent with the housing element of the community's general

6 plan required by Article 10.6 (commencing with Section 65580)

7 of Chapter 3 of Division 1 of Title 7 of the Governent Code,8 including its share of the regional housing needs of very low

9 income households and persons and families of low or moderate10 income.11 (B) This finding shall only be made if the housing element of12 the community's general plan demonstrates that the community13 does not have a need to improve, increase, or preserve the supply14 of low- and moderate-income housing available at affordable15 housing cost to persons and families of low or moderate income16 and to very low income households. This finding shall only be17 made if it is consistent with the planning agency's annual report18 to the legislative body on implementation of the housing element19 required by subdivision (b) of Section 65400 of the Governent20 Code. No agency of a charter city shall make this finding unless21 the planing agency submits the report pursuant to subdivision (b)22 of Section 65400 of the Government Code. This finding shall not23 take effect until the agency has complied with subdivision (b) of24 this section.25 (2) (A) That some stated percentage less than 20 percent of the26 taxes that are allocated to the agency pursuant to Section 3367027 is suffcient to meet the housing needs of the community, including28 its share of the regional housing needs of persons and families of29 low- or moderate-income and very low income households, and

30 that this finding is consistent with the housing element of the31 community's general plan required by Article 10.6 (commencing32 with Section 65580) of Chapter 3 of Division 1 of Title 7 of the33 Govemment Code.34 (B) This finding shall only be made if the housing element of35 the community's general plan demonstrates that a percentage of36 less than 20 percent wil be suffcient to meet the community's37 need to improve, increase, or preserve the supply of low- and38 moderate-income housing available at affordable housing cost to39 persons and families of low or moderate income and to very low40 income households. This finding shall only be made if it is

97

57,,1

39-7- AD 1250

1 consistent with the planning agency's annual report to the

2 legislative body on implementation of the housing element required3 by subdivision (b) of Section 65400 of the Governent Code. No4 agency of a charter city shall make this finding unless the planning5 agency submits the report pursuant to subdivision (b) of Section6 65400 of the Govemment Code. This finding shall not take effect7 until the agency has complied with subdivision (b) of this section.8 (C) For purposes of making the findings specified in this9 paragraph and paragraph (1), the housing element of the general

10 plan of a city, county, or city and county shall be curent, and shall11 have been determned by the departent pursuant to Section 6558512 to be in substantial compliance with Article 10.6 (commencing

13 with Section 65580) of Chapter 3 of Division 1 of Title 7 of the14 Govemment Code.15 (3) (A) That the community is making a substantial effort to16 meet its existing and projected housing needs, including its share17 of the regional housing needs, with respect to persons and families18 of low and moderate income, particularly very low income

19 households, as identified in the housing element of the20 community's general plan required by Aricle 10.6 (commencing21 with Section 65580) of Chapter 3 of Division 1 of Title 7 of the22 Governent Code, and that this effort, consisting of direct financial23 contributions of local funds used to increase and improve the24 supply of housing affordable to, and occupied by, persons and25 families of low or moderate income and very low income

26 households is equivalent in impact to the funds otherwise required27 to be set aside pursuant to this section. In addition to any other28 local fuds, these direct financial contrbutions may include federal

29 or state grants paid directly to a community and that the community30 has the discretion of using for the puroses for which moneys in31 the Low and Moderate Income Housing Fund may be used. The

32 legislative body shall consider the need that can be reasonably33 foreseen because of displacement of persons and families of low34 or moderate income or very low income households from within,35 or adjacent to, the project area, because of increased employment36 opportities, or because of any other direct or indirect result of

37 implementation of the redevelopment plan. No finding under this38 subdivision may be made until the community has provided or39 ensured the availability of replacement dwelling units as defined

97

5i~ \

ttoAD 1250 -8-

1 in Section 33411.2 and until it has complied with Article 92 (commencing with Section 33410).3 (B) In making the determination that other financial4 contrbutions are equivalent in impact pursuant to this subdivision,5 the agency shall include only those financial contributions that are6 directly related to programs or activities authorized under

7 subdivision (e).

8 (C) The authority for making the finding specified in this9 paragraph shall expire on June 30, 1993, except that the expiration

10 shall not be deemed to impair contractual obligations to11 bondholders or private entities incured prior to May 1, 1991, and12 made in reliance on the provisions of this paragraph. Agencies that13 make this finding after June 30, 1993, shall show evidence that14 the agency entered into the specific contractual obligation with15 the specific intention of making a finding under this paragraph in16 order to provide suffcient revenues to payoff the indebtedness.17 (b) Within 10 days following the making of a finding under

18 either paragraph (1) or (2) of subdivision (a), the agency shall send19 the department and the Controller a copy of the finding, including20 the factual information supporting the finding and other factual21 information in the housing element that demonstrates that either22 (1) the community does not need to increase, improve, or preserve23 the supply of housing for low- and moderate-income households,24 including very low income households, or (2) a percentage less25 than 20 percent wil be suffcient to meet the community's need

26 to improve, increase, and preserve the supply of housing for low-27 and moderate-income households, including very low income28 households. Within 10 days following the making of a finding29 under paragraph (3) of subdivision (a), the agency shall send the30 department and the Controller a copy of the finding, including the31 factual information supporting the finding that the community is32 making a substantial effort to meet its existing and projected33 housing needs. Agencies that make this finding after June 30,1993,34 shall also submit evidence to the department of its contractual35 obligations with bondholders or private entities incured prior to36 May 1, 1991, and made in reliance on this finding.37 (c) In any litigation to challenge or attack a finding made under

38 paragraph (1), (2), or (3) of subdivision (a), the burden shall be39 upon the agency to establish that the finding is supported by40 substantial evidence in light of the entire record before the agency.

97

57. (

4l-9- AB 1250

1 If an agency is determined by a court to have knowingly

2 misrepresented any material facts regarding the community's share3 of its regional housing need for low- and moderate-income housing,4 including very low income households, or the community's

5 production record in meeting its share of the regional housing need6 pursuant to the report required by subdivision (b) of Section 654007 of the Government Code, the agency shall be liable for all cour8 costs and plaintiff's attomey's fees, and shall be required to allocate

9 not less than 25 percent of the agency's tax increment revenues to10 its Low and Moderate Income Housing Fund in each year11 thereafter.12 (d) Nothing in this section shall be construed as relieving any13 other public entity or entity with the power of eminent domain of14 any legal obligations for replacement or relocation housing arising15 out of its activities.16 (e) In carring out the puroses of this section, the agency may

17 exercise any or all of its powers for the constrction, rehabilitation,18 or preservation of affordable housing for extremely low, very low,19 low- and moderate-income persons or families, including the20 following:21 (l) Acquire real propert or building sites subject to Section

22 33334.16.23 (2) (A) Improve real propert or building sites with onsite or24 offsite improvements, but only if both (i) the improvements are25 part of the new construction or rehabilitation of affordable housing26 units for low- or moderate-income persons that are directly

27 benefited by the improvements, and are a reasonable and

28 fundamental component of the housing units, and (ii) the agency29 requires that the units remain available at affordable housing cost30 to, and occupied by, persons and families of extremely low, very31 low, low, or moderate income for the same time period and in the32 same manner as provided in subdivision (c) and paragraph (2) of33 subdivision (f) of Section 33334.3.34 (B) If the newly constrcted or rehabilitated housing units are35 part of a larger project and the agency improves or pays for onsite36 or offsite improvements pursuant to the authority in this

37 subdivision, the agency shall pay only a portion of the total cost38 of the onsite or offsite improvement. The maximum percentage

39 of the total cost of the improvement paid for by the agency shall40 be determined by dividing the number of housing units that are

97

S7n \

L( 2-

AB 1250 -10-1 affordable to low- or moderate-income persons by the total number

2 of housing units, if the project is a housing project, or by dividing3 the cost of the affordable housing units by the total cost of the

4 project, if the project is not a housing project.5 (3) Donate real property to private or public persons or entities.6 (4) Finance insurance premiums pursuant to Section 33136.

7 (5) Construct buildings or structures.

8 (6) Acquire buildings or structures.

9 (7) Rehabilitate buildings or structures.

10 (8) Provide subsidies to, or for the benefit of, extremely low11 income households, as defined by Section 50106, very low income12 households, as defined by Section 50105, lower income13 households, as defined by Section 50079.5, or persons and families14 of low or moderate income, as defined by Section 50093, to the15 extent those households cannot obtain housing at affordable costs16 on the open market. Housing units available on the open market17 are those units developed without direct governent subsidies.18 (9) Develop plans, pay principal and interest on bonds, loans,19 advances, or other indebtedness, or pay financing or caring20 charges.21 (10) Maintain the community's supply of mobile homes.22 (11) Preserve the availability to lower income households of

23 affordable housing units in housing developments that are assisted24 or subsidized by public entities and that are threatened with25 imminent conversion to market rates.26 (f) The agency may use these funds to meet, in whole or in part,27 the replacement housing provisions in Section 33413. However,28 nothing in this section shall be constred as limiting in any way29 the requirements of that section.

30 (g) (1) The agency may use these fuds inside or outside the

31 project area. The agency may only use these fuds outside the32 project area upon a resolution of the agency and the legislative33 body that the use wil be of benefit to the project. The34 determination by the agency and the legislative body shall be final35 and conclusive as to the issue of benefit to the project area. The36 Legislature finds and declares that the provision of replacement37 housing pursuant to Section 33413 is always of benefit to a project.38 Unless the legislative body finds, before the redevelopment plan39 is adopted, that the provision oflow- and moderate-income housing40 outside the project area wil be of benefit to the project, the project

97

57..\

~3-11- AB 1250

1 area shall include propert suitable for low- and moderate-income

2 housing.

3 (2) (A) The Contra Costa County Redevelopment Agency may4 use these funds anywhere within the unincorporated territory, or5 within the incorporated limits ofthe City of Walnut Creek on sites6 contiguous to the Pleasant Hil BART Station Area Redevelopment7 Project area. The agency may only use these funds outside the8 project area upon a resolution of the agency and board of

9 supervisors determning that the use wil be of benefit to the project10 area. In addition, the agency may use these funds within the

11 incorporated limits of the City of Walnut Creek only if the agency12 and the board of supervisors find all of the following:

13 (i) Both the County of Contra Costa and the City of Walnut

14 Creek have adopted and are implementing complete and current15 housing elements of their general plans that the Departent of16 Housing and Community Development has determined to be in17 compliance with the requirements of Article 10.6 (commencing18 with Section 65580) of Chapter 3 of Division 1 of Title 7 of the19 Government Code.20 (ii) The development to be funded shall not result in any21 residential displacement from the site where the development is22 to be built.23 (iii) The development to be funded shall not be constrcted in

24 an area that currently has more than 50 percent of its population25 comprised of racial minorities or low-income families.26 (iv) The development to be fuded shall allow construction of

27 affordable housing closer to a rapid transit station than could be28 constrcted in the unincorporated terrtory outside the Pleasant29 Hil BART Station Area Redevelopment Project.30 (B) If the agency uses these fuds within the incorporated limits31 of the City of Walnut Creek, all of the following requirements

32 shall apply:33 (i) The funds shall be used only for the acquisition of land for,

34 and the design and constrction of, the development of housing35 containing units affordable to, and occupied by, low- and36 moderate-income persons.

37 (ii) If less than all the units in the development are affordable

38 to, and occupied by, low- or moderate-income persons, any agency

39 assistance shall not exceed the amount needed to make the housing40 affordable to, and occupied by, low- or moderate-income persons.

97

s-z. \

l. '-

AB 1250 -12-1 (iii) The units in the development that are affordable to, and

2 occupied by, low- or moderate-income persons shall remain

3 affordable for a period of at least 55 years.4 (iv) The agency and the City of Walnut Creek shall determine,5 if applicable, whether Aricle xxiv of the Califomia Constitution

6 permits the development.

7 (h) The Legislature finds and declares that expenditues or

8 obligations incured by the agency pursuant to this section shall9 constitute an indebtedness of the project.

10 (i) This section shall only apply to taxes allocated to a11 redevelopment agency for which a final redevelopment plan is12 adopted on or after January 1, 1977, or for any area that is added13 to a project by an amendment to a redevelopment plan, which

14 amendment is adopted on or after the effective date of this section.15 An agency may, by resolution, elect to make all or part of the16 requirements of this section applicable to any redevelopment

17 project for which a redevelopment plan was adopted prior to

18 January 1, 1977, subject to any indebtedness incured prior to the19 election.20 G) (1) (A) An action to compel compliance with the21 requirement of Section 33334.3 to deposit not less than 20 percent22 of all taxes that are allocated to the agency pursuant to Section23 33670 in the Low and Moderate Income Housing Fund shall be24 commenced within 10 years of the alleged violation. A cause of25 action for a violation accrues on the last day of the fiscal year in26 which the funds were required to be deposited in the Low and27 Moderate Income Housing Fund.

28 (B) An action to compel compliance with the requirement of29 this section or Section 33334.6 that money deposited in the Low

30 and Moderate Income Housing Fund be used by the agency for31 puroses of increasing, improving, and preserving the community's32 supply of low- and moderate-income housing available at

33 affordable housing cost shall be commenced within 10 years of34 the alleged violation. A cause of action for a violation accrues on35 the date of the actual expenditure of the funds.36 (C) An agency found to have deposited less into the Low and37 Moderate Income Housing Fund than mandated by Section 33334.338 or to have spent money from the Low and Moderate Income

39 Housing Fund for puroses other than increasing, improving, and40 preserving the community's supply oflow- and moderate-income

97

57.. ,

LtC;-13- AB 1250

1 housing, as mandated, by this section or Section 33334.6 shall2 repay the funds with interest in one lump sum pursuant to Section

3 970.4 or 970.5 of the Govemment Code or may do either of the4 following:5 (i) Petition the cour under Section 970.6 for repayment in

6 installments.

7 (ii) Repay the portion of the judgment due to the Low and

8 Moderate Income Housing Fund in equal installments over a period9 of five years following the judgment.

10 (2) Repayment shall not be made from the funds required to be11 set aside or used for low- and moderate-income housing pursuant12 to this section.13 (3) Notwithstanding clauses (i) and (ii) of subparagraph (C) of14 paragraph (1), all costs, including reasonable attomey's fees if15 included in the judgment, are due and shall be paid upon entry of16 judgment or order.17 (4) Except as otherwise provided in this subdivision, Chapter

18 2 (commencing with Section 970) of Part 5 of Division 3.6 of Title19 1 of the Govemment Code for the enforcement of a judgment20 against a local public entity applies to a judgment against a local21 public entity that violates this section.22 (5) This subdivision applies to actions filed on and after January

23 1,2006.24 (6) The limitations period specified in subparagraphs (A) and

25 (B) of paragraph (1) does not apply to a cause of action brought26 pursuant to Chapter 9 (commencing with Section 860) of Title 10

27 of Part 2 of the Code of Civil Procedure.28 (k) (1) From July 1,2009, to June 30, 2010, inclusive, an agency29 may suspend all or part of its required allocation to the Low and30 Moderate Income Housing Fund from taxes that are allocated to31 that agency pursuant to Section 33670.32 (2) An agency that suspends revenue pursuant to paragraph (1)

33 shall pay back to its low- and moderate-income housing fund the34 amount of revenue that was suspended in the 2009-10 fiscal year35 pursuant to this subdivision from July 1, 2010, to June 30, 2015,36 inclusive.37 (3) An agency that suspends revenue pursuant to paragraph (1)

38 and fails to repay or have repaid on its behalf the amount of revenue39 suspended pursuant to paragraph (2) shall, commencing July 1,40 2015, be required to allocate an additional 5 percent of all taxes

97

57- \

~(oAD 1250 -14-1 that are allocated to that agency pursuant to Section 33670 for low-

2 and moderate-income housing for the remainder of the time that3 the agency receives allocations of tax revenue pursuant to Section4 33670.5 (4) An agency that fails to payor have paid on its behalf the6 full amount calculated pursuant to subparagraph (J) of paragraph7 (2) of subdivision (a) of Section 33690, or subparagraph (1) of

8 paragraph (2) of subdivision (a) of Section 33690.5, as the case9 may be, shall, commencing July 1, 2010, or July 1, 2011, as

10 applicable, be required to allocate an additional 5 percent of all11 taxes that are allocated to that agency pursuant to Section 3367012 for low- and moderate-income housing for the remainder of the13 time that the agency receives allocations of tax revenue pursuant14 to Section 33670.15 SEC. 6. Section 33353.2 of the Health and Safety Code is16 amended to read:17 33353.2. Except as provided in Section 33679.2, "affected18 taxing entity" means any govemmental taxing agency that levies19 a propert tax on all or any portion of the propert located in the20 adopted project area in the fiscal year prior to the fiscal year in21 which the report prepared pursuant to Section 33328 is issued or22 in any fiscal year after the date the redevelopment plan is adopted.23 To the extent that a new governmental taxing agency wholly or24 partially replaces the geographic jurisdiction of a preexisting25 governental taxing agency, the new taxing agency shall be an26 "affected taxing entity" and the preexisting taxing agency shall no27 longer be an "affected taxing entity."28 SEC. 7. Section 33367 of the Health and Safety Code is29 amended to read:30 33367. The ordinance shall contain all of the following:

31 (a) The purposes and intent of the legislative body with respect32 to the project area.33 (b) The plan incorporated by reference.

34 (c) A designation of the approved plan as the offcial35 redevelopment plan of the project area.

36 (d) The findings and determinations of the legislative body that:

37 (1) The project area is a blighted area, the redevelopment of38 which is necessary to effectuate the public puroses declared in39 this part. This finding shall be supported by empirical and, to the40 greatest extent feasible, quantifiable evidence demonstrating the

97

S7..\

LfT

-15- AB 1250

1 prevalence of specific conditions set forth in Section 33031 on2 specific properties that are so substatial that they cause a reduction

3 of, or lack of, proper utilization of the entire project area. Evidence4 shall be reasonable in nature, credible, and of solid value.

5 Conclusions not based on documented evidence of specific6 conditions shall be deemed insuffcient.

7 (2) The redevelopment plan would redevelop the area in

8 conformity with this part and in the interests of the public peace,9 health, safety, and welfare.

10 (3) The adoption and carring out ofthe redevelopment plan is

11 economically sound and feasible.12 (4) The redevelopment plan is consistent with the general plan13 of the community, including, but not limited to, the community's14 housing element, which substantially complies with the15 requirements of Article 10.6 (commencing with Section 65580)

16 of Chapter 3 of Division 1 of Title 7 of the Government Code.17 (5) The carring out of the redevelopment plan would promote

18 the public peace, health, safety, and welfare ofthe community and19 would effectuate the puroses and policy of this part.20 (6) The condemnation of real propert, if provided for in the21 redevelopment plan, is necessary to the execution of the22 redevelopment plan and adequate provisions have been made for23 payment for propert to be acquired as provided by law.24 (7) The agency has a feasible method or plan for the relocation25 of families and persons displaced from the project area, if the26 redevelopment plan may result in the temporary or permanent27 displacement of any occupants of housing facilities in the project28 area.29 (8) (A) There are, or shall be provided, in the project area or30 in other areas not generally less desirable in regard to public

31 utilities and public and commercial facilities and at rents or prices32 within the financial means of the families and persons displaced33 from the project area, decent, safe, and sanitary dwellings equal34 in number to the number of and available to the displaced families35 and persons and reasonably accessible to their places of36 employment.37 (B) Families and persons shall not be displaced prior to the38 adoption of a relocation plan pursuant to Sections 33411 and

39 33411.1. Dwelling units housing persons and families of low or40 moderate income shall not be removed or destroyed prior to the

97

S7. \

\.iAD 1250 -16-1 adoption of a replacement housing plan pursuant to Sections

2 33334.5,33413, and 33413.5.

3 (9) All noncontiguous areas of a project area are either blighted4 or necessary for effective redevelopment and are not included for

5 the purose of obtaining the allocation of taxes from the area6 pursuant to Section 33670 without other substantial justification7 for their inclusion.8 (10) Inclusion of any lands, buildings, or improvements which

9 are not detrimental to the public health, safety, or welfare is10 necessary for the effective redevelopment of the area of which11 they are a part; that any area included is necessary for effective12 redevelopment and is not included for the purpose of obtaining13 the allocation of tax increment revenues from the area pursuant to14 Section 33670 without other substantial justification for its15 inclusion.16 (11) The elimination of blight and the redevelopment of the17 project area could not be reasonably expected to be accomplished

18 by private enterprise acting alone without the aid and assistance19 of the agency.20 (12) The project area is predominantly urbanized, as defined21 by subdivision (b) of Section 33320.1.22 (13) The time limitation and, if applicable, the limitation on the23 number of dollars to be allocated to the agency that are contained24 in the plan are reasonably related to the proposed projects to be25 implemented in the project area and to the ability of the agency to26 eliminate blight within the project area.27 (14) The implementation of the redevelopment plan wil improve

28 or alleviate the physical and economic conditions of blight in the29 project area, as described in the report prepared pursuant to Section30 33352.31 (e) A statement that the legislative body is satisfied that32 permanent housing facilities wil be available within three years33 from the time occupants ofthe project area are displaced and that,34 pending the development of the facilities, there wil be available35 to the displaced occupants adequate temporary housing facilities36 at rents comparable to those in the community at the time of their37 displacement.

38 SEC. 8. Section 33426.5 of the Health and Safety Code is39 amended to read:

97

:J7. (

qC)

-17- AB 1250

1 33426.5. Notwithstanding the provisions of Sections 33391,2 33430, 33433, and 33445, or any other provision of this part, an3 agency shall not provide any form of direct assistance to the4 following:5 (a) An automobile dealership which wil be or is on a parcel

6 of land which has not previously been developed for urban use,

7 unless, prior to the effective date of the act that adds this section,8 the agency either owns the land or has entered into an enforceable9 agreement, for the purchase of the land or of an interest in the land,

10 including, but not limited to, a lease or an agreement containing11 covenants affecting real propert, that requires the land to be12 developed and used as an automobile dealership.13 (b) (1) A development that wil be or is on a parcel of land of14 five acres or more which has not previously been developed for15 urban use and that wil, when developed, generate sales or use tax16 pursuant to Part 1.5 (commencing with Section 7200) of Division17 2 of the Revenue and Taxation Code, unless the principal permitted18 use of the development is offce, hotel, manufactung, or industral,19 or unless, prior to the effective date of the act that adds this section,20 the agency either owns the land or has entered into an enforceable21 agreement, for the purchase of the land or of an interest in the land,22 including, but not limited to, a lease or an agreement containing23 covenants affecting real propert, that requires the land to be24 developed.

25 (2) For the purposes of this subdivision, a parcel shall include26 land on an adjacent or nearby parcel on which a use exists that is27 necessary for the legal development of the parceL.28 (c) A development that will be or is on a parcel of land of 2029 acres or more that has not previously been developed for urban30 use, except that this restrction shall not apply to land located within31 both a project area adopted pursuant to Chapter 4.5 (commencing

32 with Section 33492) and the boundaries of a former military base33 that has been closed or realigned by the actions of the federal34 Defense Base Closure and Realignment Commission.

35 (d) A development or business, either directly or indirectly, for36 the acquisition, construction, improvement, rehabilitation, or37 replacement of propert that is or would be used for a golf course38 or for a racetrack, speedway, or other racing venue.39 (e) A development or business, either directly or indirectly, for40 the acquisition, construction, improvement, rehabilitation, or

97

Sip \

So

AD 1250 -18-1 replacement of propert that is or would be used for gambling or2 gaming of any kind whatsoever including, but not limited to,3 casinos, gaming clubs, bingo operations, or any facility wherein4 banked or percentage games, any form of gambling device, or5 lotteries, other than the California State Lottery, are or wil be6 played.

7 (f) The prohibition in subdivision (e) is not intended to prohibit

8 a redevelopment agency from acquiring propert on or in which

9 an existing gambling enterprise is located, for the purose of sellng10 or leasing the propert for uses other than gambling, provided that

11 the agency acquires the propert for fair market value.12 (g) This section shall not be constred to apply to agency13 assistance in the construction of public improvements that serve14 all or a portion of a project area and that are not required to be15 constructed as a condition of approval of a development described16 in subdivision (a), (b), (c), (d), or (e), or to prohibit assistance in17 the construction of public improvements that are being constrcted18 for a development that is not described in subdivision ( a), (b), (c),19 (d), or (e).20 SEC. 9. Section 33444.7 is added to the Health and Safety21 Code, to read:22 33444.7. An agency may establish a program under which it23 loans or grants fuds to owners or tenants to improve, rehabilitate,24 or retrofit buildings or strctues located within the redevelopment25 project area to increase energy effciency for such buildings or26 strctues, or to facilitate infill development of areas targeted for27 such development in an approved sustainable communities strategy28 that applies to the agency's jurisdiction.29 SEC. 10. Section 33444.8 is added to the Health and Safety30 Code, to read:31 33444.8. (a) An agency may provide direct assistance to32 businesses within project areas in connection with new or existing33 facilities for industral or manufacturing uses or similar uses of34 statewide benefit, where the assistance provided is reasonably35 expected to result in the retention or expansion of not less than 2536 full-time equivalent jobs within the project area.37 (b) Direct assistance may include, but is not limited to, loans,

38 loan guarantees, or the provision or replacement of machinery and39 equipment in new or existing facilities for industrial or40 manufactung uses in the project area.

97

~ 7. (

5"1

-19- AD 1250

1 (c) The Legislature finds and declares that the purpose of this2 section is to clarify existing law and to provide agencies with

3 additional authority to assist businesses in order to encourage the

4 retention of existing employment opportunities and the attraction

5 of new employment opportunities. These activities and programs6 shall constitute redevelopment as prescribed in Sections 33020

7 and 33021.8 SEC. 11. Section 33488 of the Health and Safety Code is9 amended to read:

10 33488. Prior to merging project areas pursuant to Section11 33486, a redevelopment agency shall notify the department and12 the Controller of its intention to merge its project areas, which13 shall occur no later than 30 days prior to adoption of the ordinance14 which provides for merger.15 SEC. 12. Section 33491 is added to the Health and Safety Code,16 to read:17 33491. (a) Commencing with the implementation plan next18 adopted following January 1,2012, an implementation plan shall19 contain the specific goals and objectives of the agency for the20 project area and the specific programs and potential projects that21 wil cause not less than 50 percent of its net unencumbered revenue

22 during the next five years to be expended for one or more of the23 following:24 (1) Development, including rehabilitation, resulting in significant25 job retention or creation.26 (2) Remediation of contaminated properties.

27 (3) Infill and transit-oriented development.

28 (4) Military base conversion.29 (5) Public infrastructure, excluding buildings.

30 (6) Housing affordable to persons of very low and extremely

31 low income.32 (b) "Net unencumbered revenue" shall mean all revenue received

33 by the agency, less: debt service on bonds, notes and other

34 obligations entered into prior to January 1, 2012; payments to35 taxing agencies pursuant to Section 33607.5 or 33607.7 or under36 agreements entered into pursuant to former Section 33401; and37 deposits in the agency's low- and moderate-income housing fund.38 (c) Prior to approving an implementation plan subject to this

39 subdivision, the agency shall obtain the recommendation of the40 project area committee. If a project area committee does not exist,

97

57~ \

5'2

AB 1250 -20-1 the agency shall obtain the recommendation of a community

2 advisory body designated by the legislative body which is3 representative of interests described in subdivision (c) of Section

4 33385. If the project area committee or community advisory body5 does not make its recommendation within 60 days after receiving6 a copy of the proposed implementation plan, the agency may

7 consider the implementation plan without their recommendation.

8 (d) The implementation plans adopted every five years after the

9 implementation plan that implements this subdivision shall evaluate10 the agency's progress in achieving the goals and objectives

11 described in subdivision (a). The agency shall obtain the12 recommendation of the project area committee or community13 advisory body in the maner set fort in subdivision (c). If a project14 area committee or community advisory body recommends against

15 adoption of the implementation plan adopted 10 years or 20 years16 after the implementation plan that implements this subdivision,17 the agency shall only adopt that implementation plan upon a18 two-thirds vote of its members. Until an implementation plan has19 been approved as set forth in this subdivision, an agency shall not20 undertake any activity not provided for in the existing21 implementation plan.22 SEC. 13. Section 33601 of the Health and Safety Code is23 amended to read:24 33601. (a) An agency may borrow money or accept financial

25 or other assistance from the state or the federal governent or any26 other public agency for any redevelopment project within its area27 of operation, and may comply with any conditions of such loan or28 grant.29 (b) An agency may borrow money (by the issuance of bonds or30 otherwise) or accept financial or other assistance from any private31 lending institution for any redevelopment project for any of the32 purposes of this part, and may execute trust deeds or mortgages33 on any real or personal propert owned or acquired.34 (c) An agency shall pay interest on any money borrowed from

35 the legislative body at a rate no greater than simple interest at rate36 equal to the rate on 10-year United States Treasur bils on the37 date the loan is made. The provisions of this subdivision shall38 become effective January 1, 2012, and shall apply to money39 borrowed from the legislative body at any time, regardless of the

97

~7" \

53-21- AB 1250

1 provisions of any note, agreement, or other written instrument to

2 the contrary.

3 SEC. 14. Section 33607.9 is added to the Health and Safety4 Code, to read:

5 33607.9. On or before January 1, 2013, the Controller shall6 develop a simple, uniform, and consistent methodology for the7 calculation, payment, and reporting of passthrough payments as

8 required by Sections 33607.5 and 33607.7 that is consistent with9 existing published case law and Attorney General opinions

10 interpreting Sections 33607.5 and 33607.7. The Controller shall11 appoint an advisory committee to advise in the development of12 methodology. The advisory committee shall include representatives13 from the Chancellor of the California Community Colleges, the14 State Department of Education, the California Redevelopment

15 Association, county auditor-controllers, and any other authorities16 in the field that the Controller deems necessary or appropriate.17 SEC. 15. Section 33610 of the Health and Safety Code is18 amended to read:19 33610. (a) At any time after the agency created for any20 community becomes authorized to transact business and exercise21 its powers, the legislative body of the community may appropriate22 to the agency such amounts as the legislative body deems necessary23 for the administrative expenses and overhead of the agency. The24 money appropriated may be paid to the agency as a grant to defray25 the expenses and overhead, or as a loan to be repaid upon such26 terms and conditions as the legislative body may provide.27 (b) In addition to the common understanding and usual28 interpretation of the term, "administrative expense" includes, but29 is not limited to, expenses of redevelopment planning and

30 dissemination of redevelopment information.31 (c) An agency may enter into an agreement with the legislative32 body to reimburse the legislative body for administrative expenses33 and overhead of the agency paid by the legislative body. An agency34 shall not pay costs of providing services, materials, or facilities35 which do not directly benefit the redevelopment project.36 SEC. 16. Section 33670 of the Health and Safety Code is37 amended to read:38 33670. Any redevelopment plan adopted prior to January 1,39 2012, may contain a provision that taxes, if any, levied upon40 taxable propert in a redevelopment project each year by or for

97

57Q \

5~

AB 1250 -22-1 the benefit of any city, county, city and county, district, or other2 public corporation (hereinafter sometimes called "taxing agencies")

3 after the effective date of the ordinance approving the

4 redevelopment plan, shall be divided as follows:5 (a) That portion of the taxes which would be produced by the

6 rate upon which the tax is levied each year by or for each of the7 taxing agencies upon the total sum of the assessed value of the8 taxable propert in the redevelopment project as shown upon the

9 assessment roll used in connection with the taxation of that propert10 by the taxing agency, last equalized prior to the effective date of11 the ordinance, shall be allocated to and when collected shall be12 paid to the respective taxing agencies as taxes by or for the taxing13 agencies on all other propert are paid (for the purose of allocating14 taxes levied by or for any taxing agency or agencies which did not15 include the territory in a redevelopment project on the effective16 date of the ordinance but to which that territory has been annexed17 or otherwise included after that effective date, the assessment roll18 of the county last equalized on the effective date of the ordinance19 shall be used in determining the assessed valuation of the taxable20 propert in the project on the effective date); and21 (b) Except as provided in subdivision (e) or in Section 33492.15,

22 that portion ofthe levied taxes each year in excess of that amount23 shall be allocated to and when collected shall be paid into a special24 fund of the redevelopment agency to pay the principal of and

25 interest on loans, moneys advanced to, or indebtedness (whether26 fuded, refunded, assumed, or otherwise) incurred by the

27 redevelopment agency to finance or refinance, in whole or in part,28 the redevelopment project. Unless and until the total assessed29 valuation of the taxable propert in a redevelopment project

30 exceeds the total assessed value of the taxable propert in that31 project as shown by the last equalized assessment roll referred to32 in subdivision (a), all of the taxes levied and collected upon the33 taxable propert in the redevelopment project shall be paid to the34 respective taxing agencies. When the loans, advances, and35 indebtedness, if any, and interest thereon, have been paid, all36 moneys thereafter received from taxes upon the taxable propert37 in the redevelopment project shall be paid to the respective taxing38 agencies as taxes on all other propert are paid.39 (c) In any redevelopment project in which taxes have been

40 divided pursuant to this section prior to 1968, located within any

97

57.\

rç ":

-23- AB 1250

1 county with total assessed valuation subject to general propert2 taxes for the 1967-68 fiscal year between two billion dollars3 ($2,000,000,000) and two bilion one hundred milion dollars

4 ($2,100,000,000), if the total assessed valuation of taxable propert5 within the redevelopment project for the 1967-68 fiscal year was6 reduced, the total sum of the assessed value of taxable propert7 used as the basis for apportionment of taxes under subdivision (a)8 shall be reduced by 10 percent for the 1968-69 fiscal year and

9 fiscal years thereafter.10 (d) For the puroses of this section, taxes shall not include taxes11 from the supplemental assessment roll levied pursuant to Chapter12 3.5 (commencing with Section 75) of Part 0.5 of Division 1 of the13 Revenue and Taxation Code for the 1983-84 fiscal year.14 (e) That portion of the taxes in excess of the amount identified

15 in subdivision (a) which are attributable to a tax rate levied by a16 taxing agency for the purpose of producing revenues in an amount

17 suffcient to make annual repayments of the principal of, and the18 interest on, any bonded indebtedness for the acquisition or19 improvement of real propert shall be allocated to, and when20 collected shall be paid into, the fund of that taxing agency. This21 subdivision shall only apply to taxes levied to repay bonded22 indebtedness approved by the voters .of the taxing agency on or23 after January 1, 1989.24 SEC. 17. Section 33675.1 is added to the Health and Safety25 Code, to read:26 33675.1. On or before January 1, 2013, and periodically27 thereafter, the Controller shall review the uniform form for a28 statement of indebtedness and a reconciliation statement prescribed29 pursuant to Section 33675 and shall, after obtaining the input of30 county auditor-controllers, the California Redevelopment31 Association, the Society of Certified Public Accountants, and any32 other authorities in the field that the Controller deems necessary33 or appropriate, make revisions to the uniform form for a statement34 of indebtedness and a reconciliation statement consistent with this35 part, including, but not limited to, the types and amounts of36 indebtedness to be reported.37 SEC. 18. Article 6.5 (commencing with Section 33679.1) is38 added to Chapter 6 of Part 1 of Division 24 ofthe Health and Safety39 Code, to read:

97

57v \

ç~

AD 1250 -24-1

23

4 33679.1. (a) This article shall apply to any redevelopment plan5 adopted on or after January 1, 2012. For purposes of a6 redevelopment plan that is adopted prior to January 1,2012, but7 amended after January 1,2012, this article shall apply only to new8 territory added by that amendment.

9 (b) A redevelopment plàn or plan amendment that is subject to

10 this article shall be adopted and implemented in the manner

11 provided by this part, except to the extent that the other provisions12 of this part are inconsistent with this article, in which case this13 article shall prevaiL.14 33679.2. For

puroses of this aricle, the following terms shall15 have the following meanings:16 (a) Notwithstanding Section 33353.2, for puroses of a17 redevelopment plan or plan amendment subject to this article,18 "affected taxing entity" means any noneducational taxing agency19 that levies a property tax on all or any portion of the propert20 located in the adopted project area in the fiscal year prior to the21 fiscal year in which the report prepared pursuant to Section 3332822 is issued or in any fiscal year after the date the redevelopment plan23 is adopted. To the extent that a new noneducational taxing agency24 wholly or partially replaces the geographic jurisdiction of a25 preexisting noneducational taxing agency, the new noneducational26 taxing agency shall be an "affected taxing entity" and the27 preexisting taxing agency shall no longer be an "affected taxing28 entity."29 (b) "Noneducational taxing agency" means a city, county, city

30 and county, district, or other public corporation, except a school31 distrct, community college district, or county offce of education.32 (c) "Taxes" shall include, but without limitation, all levies on33 an ad valorem basis upon land or real propert. "Taxes" shall not34 include any amounts of money deposited in a Sales and Use Tax35 Compensation Fund pursuant to Section 97.68 ofthe Revenue and36 Taxation Code or a Vehicle License Fee Propert Tax37 Compensation Fund pursuant to Section 97.70 of the Revenue and38 Taxation Code.

39 33679.3. Any redevelopment plan or plan amendment that is40 subject to this article may contain a provision that taxes, if any,

Article 6.5. Tax Increment Financing for Projects Created AfterJanuar 1,2012

97

51. (

5l-25- AB 1250

1 levied upon taxable propert in a redevelopment project each year

2 by or for the benefit of any noneducational taxing agencies after3 the effective date of the ordinance approving the redevelopment

4 plan or plan amendment, shall be divided as follows:5 (a) That portion of the taxes which would be produced by the6 rate upon which the tax is levied each year by or for each of the7 noneducational taxing agencies upon the total sum of the assessed8 value of the taxable propert in the redevelopment project as shown9 upon the assessment roll used in connection with the taxation of

10 that propert by the noneducational taxing agency, last equalized

11 prior to the effective date of the ordinance, shall be allocated to12 and when collected shall be paid to the respective noneducational13 taxing agencies as taxes by or for the noneducational taxing

14 agencies on all other propert are paid (for the purose of allocating15 taxes levied by or for any noneducational taxing agency or agencies16 which did not include the terrtory in a redevelopment project on17 the effective date of the ordinance but to which that terrtory has18 been annexed or otherwise included after that effective date, the19 assessment roll of the county last equalized on the effective date20 of the ordinance shall be used in determining the assessed valuation21 of the taxable propert in the project on the effective date); and22 (b) Except as provided in subdivision (c) orin Section 33492.15,

23 that portion of the levied taxes each year by or for noneducational24 taxing agencies in excess of that amount shall be allocated to and25 when collected shall be paid into a special fud of the26 redevelopment agency to pay the principal of and interest on loans,27 moneys advanced to, or indebtedness (whether funded, refuded,28 assumed, or otherwise) incured by the redevelopment agency to29 finance or refinance, in whole or in part, the redevelopment project.30 Unless and until the total assessed valuation ofthe taxable propert31 in a redevelopment project exceeds the total assessed value of the32 taxable propert in that project as shown by the last equalized33 assessment roll referred to in subdivision (a), all of the taxes levied34 and collected upon the taxable propert in the redevelopment35 project by or for noneducational taxing agencies shall be paid to36 the respective noneducational taxing agencies. When the loans,

37 advances, and indebtedness, if any, and interest thereon, have been38 paid, all moneys thereafter received from taxes upon the taxable

39 propert in the redevelopment project by or for noneducational

97

5'7G \

5~

AD 1250 -26-1 taxing agencies shall be paid to the respective noneducational

2 taxing agencies as taxes on all other propert are paid.3 (c) That portion of the taxes in excess of the amount identified4 in subdivision (a) which are attributable to a tax rate levied by a5 noneducational taxing agency for the purpose of producing

6 revenues in an amount suffcient to make annual repayments of

7 the principal of, and the interest on, any bonded indebtedness for

8 the acquisition or improvement of real propert shall be allocated9 to, and when collected shall be paid into, the fud of that

10 noneducational taxing agency. This subdivision shall only apply11 to taxes levied to repay bonded indebtedness approved by the

12 voters of the noneducational taxing agency.

13 (d) It is the intent of the Legislatue in enacting this section and14 the amendments to Section 33670 made by the act adding this15 section to prohibit the use of Section 33670to finance community16 redevelopment pursuant to any redevelopment plan or plan

17 amendment that is adopted on or after January 1,2012. It is the18 intent of the Legislature that this section provides an alternate

19 method for financing community redevelopment, within the20 meaning of Section 16 of Aricle XVI of the Califomia21 Constitution, for redevelopment plans and plan amendments

22 adopted on or after January i, 2012, that exclude propert taxes23 levied by or for school districts, community college districts, or24 county offces of education. Except as specifically provided in this25 article in regard to plan amendments that add additional terrtory26 to an existing redevelopment plan, it is not the intent of the27 Legislature that this article limit or otherwise apply to the financing28 of community redevelopment pursuant to a redevelopment plan29 adopted prior to January 1,2012.30 33679.4. Notwithstanding any other law, for purposes of any31 redevelopment plan or plan amendment subject to this article:32 (a) A reference in this part to Section 33670 shall be constred

33 to be a reference to Section 33679.3.34 (b) Sections 33328.1, 33360.5, 33607.5, and 33676 shall not

35 apply.36 33679.5. (a) Upon the written request of a redevelopment37 agency for the purose of assisting the agency, the county auditor38 or other offcer responsible for allocation oftax revenues pursuant39 to Section 33679.3 shall prepare a statement each fiscal year for40 each redevelopment project area and each area added to a

97

57~ I

5'1-27- AB 1250

1 redevelopment project area by amendment, which provides for all2 the following:3 (1) The total taxable assessed value of secured, unsecured, and

4 state-assessed railroad and nonoperating, nonunitary propert.

5 (2) The total taxable assessed value used by the county auditor

6 to determine the division of taxes required by subdivision (a) of7 Section 33679.3.

8 (3) The total taxable assessed value used by the county auditor

9 to determine the division of taxes required by subdivision (b) of10 Section 33679.3.

11 (4) The estimated amount of taxes calculated pursuant to12 subdivision (b) of Section 33679.3, as adjusted by subdivision (c)13 of Section 33679.3 and subdivision (a) of Section 33679.6. The

14 statement shall specify the gross amount of tax-increment revenue15 allocated to the agency and any payments to other noneducational16 taxing entities that are deducted from the gross amount allocated.17 (5) The estimated amount of taxes to be allocated pursuant to18 subdivisions ( c) and (d) of Section 100 of the Revenue and19 Taxation Code.

20 (b) If requested to provide a statement pursuant to subdivision

21 (a), the county auditor shall deliver each statement to the respective22 redevelopment agencies receiving propert tax revenue on or before23 November 30 of each year.24 (c) (1) Upon the request of a redevelopment agency pursuant

25 to subdivision (a), and concurrently with the disbursement ofthose26 propert tax revenues, the county auditor shall prepare a statement27 which provides the amount of disbursement made pursuant to all28 of the following:29 (A) Section 33679.3.

30 (B) Section 100 of the Revenue and Taxation Code.31 (C) Supplemental propert tax revenues allocated pursuant to

32 Sections 75 to 75.80 ofthe Revenue and Taxation Code, inclusive.33 (2) The statement provided pursuant to this subdivision shall34 also include corrections, updates, or adjustments, if any, to the35 propert tax revenue amounts and taxable assessed values reported

36 pursuant to subdivision (a) of Section 33679.3.37 (d) The county auditor shall also provide to a redevelopment

38 agency, no later than 30 days after the receipt of a written request39 from that agency, information or clarification with respect to any40 statement issued pursuant to this section.

97

57. \

Cd

AB 1250 -28-1 (e) If any redevelopment agency requests a statement or

2 information pursuant to this section, the agency shall reimburse3 the county auditor for all actual and reasonable costs incured.4 33679.6. (a) Prior to the adoption by the legislative body of a5 redevelopment plan providing for tax increment financing pursuant6 to Section 33679.3, any affected taxing agency may elect to be

7 allocated, in addition to the portion of taxes allocated to the affected8 taxing agency pursuant to subdivision (a) of Section 33679.3, all9 or any portion of the tax revenues allocated to the agency pursuant

10 to subdivision (b) of Section 33679.3 attributable to increases in11 the rate of tax imposed for the benefit of the taxing agency which12 levy occurs after the tax year in which the ordinance adopting the13 redevelopment plan becomes effective.14 (b) The governing body of any affected taxing agency electing

15 to receive allocation of taxes pursuant to this section in addition16 to taxes allocated to it pursuant to subdivision (a) of Section17 33679.3 shall adopt a resolution to that effect and transmit the18 resolution, prior to the adoption of the redevelopment plan, to (1)19 the legislative body, (2) the agency, and (3) the offcial or offcials20 performing the functions of levying and collecting taxes for the21 affected taxing agency. Upon receipt by the offcial or offcials of22 the resolution, allocation of taxes pursuant to this section to the23 affected taxing agency which has elected to receive the allocation24 pursuant to this section by the adoption of the resolution and25 allocation of taxes pursuant to this section shall be made at the26 time or times allocations are made pursuant to subdivision (a) of27 Section 33679.3.

28 (c) An affected taxing agency, at any time after the adoption of29 the resolution, may elect not to receive all or any portion of the30 additional allocation of taxes pursuant to this section by rescinding31 the resolution or by amending the same, as the case may be, and32 giving notice thereof to the legislative body, the agency, and the33 offcial or offcials performing the functions of levying and

34 collecting taxes for the affected taxing agency. After receipt of a35 notice by the offcial or offcials that an affected taxing agency36 has elected not to receive all or a portion of the additional allocation37 of taxes by rescission or amendment of the resolution, any

38 allocation of taxes to the affected taxing agency required to be39 made pursuant to this section shall not thereafter be made but shall40 be allocated to the agency, and the affected taxing agency shall

97

5(ø L

(0\

-29- AB 1250

1 thereafter be allocated only the portion of taxes provided for in

2 subdivision (a) of Section 33679.3. After receipt ofa notice by the3 offcial or offcials that an affected taxing agency has elected to

4 receive additional tax revenues attributable to only a portion of

5 the increases in the rate oftax, only that portion ofthe tax revenues

6 shall thereafter be allocated to the affected taxing agency in

7 addition to the portion of taxes allocated pursuant to subdivision

8 (a) of Section 33679.3, and the remaining portion thereof shall be

9 allocated to the agency.

10 33679.7. (a) (1) All the amounts calculated pursuant to this11 section shall be calculated after the amount required to be deposited12 in the Low and Moderate Income Housing Fund pursuant to

13 Sections 33334.2, 33334.3, and 33334.6 has been deducted from

14 the total amount of tax increment funds received by the agency in15 the applicable fiscal year.16 (2) The payments made pursuant to this section shall be in17 addition to any amounts the affected taxing entities receive18 pursuant to subdivision (a) of Section 33679.3. The payments made19 pursuant to this section to the affected taxing entities, including20 the community, shall be allocated among the affected taxing21 entities, including the community if the community elects to receive22 payments, in proportion to the percentage share of propert taxes23 of each affected taxing entity, including the community, receives24 during the fiscal year the funds are allocated, which percentage25 share shall be determined without regard to (A) any amounts26 allocated to a city, a city and county, or a county pursuant to27 Sections 97.68 and 97.70 ofthe Revenue and Taxation Code, (B)

28 any allocation reductions to a city, a city and county, a county, a29 special district, or a redevelopment agency pursuant to Sections30 97.71, 97.72, and 97.73 of the Revenue and Taxation Code and

31 Section 33681.12, and (C) any amounts allocated to a school32 district, community college district, or county offce of education.33 The agency shall reduce its payments pursuant to this section to34 an affected taxing entity by any amount the agency has paid,35 directly or indirectly, pursuant to Section 33445, 33445.5, 33445.6,36 33446, or any other law other than this section for, orin connection37 with, a public facility owned or leased by that affected taxing

38 agency, except for any amounts that are unrelated to the specific39 project area or amendment govemed by this section. For purposes40 of calculating the allocation of payments made to affected taxing

97

~(1' ,

teL

AB 1250 -30-1 entities pursuant to this section, an Educational Revenue

2 Augmentation Fund created pursuant to Article 3 (commencing3 with Section 97) of Chapter 6 of Part 0.5 of Division 1 of the4 Revenue and Taxation Code is not an affected taxing entity.5 (b) Commencing with the first fiscal year in which the agency6 receives tax increments and continuing through the last fiscal year7 in which the agency receives tax increments, a redevelopment

8 agency shall pay to the affected taxing entities, including the9 community if the community elects to receive a payment, an

10 amount equal to 25 percent of the tax increments received by the11 agency after the amount required to be deposited in the Low and12 Moderate Income Housing Fund has been deducted. In any fiscal13 year in which the agency receives tax increments, the community14 that has adopted the redevelopment project area may elect to

15 receive the amount authorized by this paragraph. If the community16 elects not to receive the amount authorized by this subdivision,17 the portion of the payment made pursuant to this subdivision that18 would otherwise have been calculated for and paid to the19 community based on the community's proportionate share of20 propert tax revenues shall remain with the agency.

21 (c) Commencing with the 11 th fiscal year in which the agency22 receives tax increments and continuing through the last fiscal year23 in which the agency receives tax increments, a redevelopment

24 agency shall pay to the affected taxing entities, other than the25 community which has adopted the project, in addition to the26 amounts paid pursuant to subdivision (b) and after deducting the27 amount allocated to the Low and Moderate Income Housing Fund,28 an amount equal to 21 percent of an amount, which shall be29 calculated by applying the tax rate for the affected taxing entities30 against the amount by which the assessed value of the taxable31 propert in the redevelopment project, as shown upon the

32 assessment roll of the county last equalized on the current year33 anniversary of the effective date of the ordinance adopting the34 redevelopment plan or plan amendment, as applicable, exceeds35 the assessed value of the taxable propert in the redevelopment36 project, as shown upon the assessment roll of the county last37 equalized on the 10th anniversary of the effective date of the38 ordinance adopting the redevelopment plan or plan amendment.

39 The portion ofthe payment made pursuant to this subdivision that40 would otherwise have been calculated for and paid to the

97

si-.. ,

b3

-31- AB 1250

1 community, based on the community's proportionate share of2 propert tax revenues, shall instead be allocated among the other

3 affected taxing entities based on their respective percentage shares

4 calculated in accordance with paragraph (2) of subdivision (a),5 except that the calculation shall be based on the percentage share6 of propert taxes that each affected taxing entity, excluding the

7 community, receives during the fiscal year that the funds are8 allocated.

9 (d) Commencing with the 31 st fiscal year in which the agency10 receives tax increments and continuing through the last fiscal year11 in which the agency receives tax increments, a redevelopment

12 agency shall pay to the affected taxing entities, other than the13 community which has adopted the project, in addition to the14 amounts paid pursuant to subdivisions (b) and (c) and after15 deducting the amount allocated to the Low and Moderate Income

16 Housing Fund, an amount equal to 14 percent of an amount, which17 shall be calculated by applying the tax rate for the affected taxing18 entities against the amount by which the assessed value of the19 taxable propert in the redevelopment project, as shown upon the

20 assessment roll of the county last equalized on the current year21 anniversary of the effective date of the ordinance adopting the22 redevelopment plan or plan amendment exceeds the assessed value23 of the taxable propert in the redevelopment project, as shown

24 upon the assessment roll of the county last equalized on the 30th25 year anniversary of the effective date of the ordinance adopting26 the redevelopment plan or plan amendment. The portion of the27 . payment made pursuant to this subdivision that would otherwise28 have been calculated for and paid to the community, based on the29 community's proportionate share of propert tax revenues, shall30 instead be allocated among the other affected taxing entities based31 on their respective percentage shares calculated in accordance with32 paragraph (2) of subdivision (a), except that the calculation shall33 be based on the percentage share of propert taxes that each34 affected taxing entity, excluding the community, receives during35 the fiscal year that the funds are allocated.36 (e) (1) Prior to incurrng any loans, bonds, or other37 indebtedness, except loans or advances from the community, the38 agency may subordinate to the loans, bonds, or other indebtedness39 the amount required to be paid to an affected taxing entity by this

97

51. \

~Lf

AB 1250 -32-1 section, provided that the affected taxing entity has approved these

2 subordinations pursuant to this subdivision.

3 (2) At the time the agency requests an affected taxing entity to

4 subordinate the amount to be paid to it, the agency shall provide5 the affected taxing entity with substantial evidence that suffcient

6 funds wil be available to pay both the debt service and the7 payments required by this section, when due.8 (3) Within 45 days after receipt of the agency's request, the9 affected taxing entity shall approve or disapprove the request for

10 subordination. An affected taxing entity may disapprove a request11 for subordination only if it finds, based upon substantial evidence,12 that the agency will not be able to pay the debt payments and the13 amount required to be paid to the affected taxing entity. If the14 affected taxing entity does not act within 45 days after receipt of15 the agency's request, the request to subordinate shall be deemed

16 approved and shall be final and conclusive.17 (f) (1) The Legislature finds and declares both of the following:

18 (A) The payments made pursuant to this section are necessary19 in order to alleviate the financial burden and detriment that affected20 taxing entities may incur as a result of the adoption of a21 redevelopment plan, and payments made pursuant to this section22 will benefit redevelopment project areas.23 (B) The payments made pursuant to this section are the exclusive24 payments that are required to be made by a redevelopment agency25 to affected taxing entities during the term of a redevelopment plan.26 (2) Notwithstanding any other law, a redevelopment agency

27 shall not be required, either directly or indirectly, as a measure to28 mitigate a significant environmental effect or as part of any29 settlement agreement or judgment brought in any action to contest30 the validity of a redevelopment plan pursuant to Section 33501,31 to make any other payments to affected taxing entities, or to pay32 for public facilities that wil be owned or leased to an affected33 taxing entity.34 SEC. 19. (a) By January 1, 2013, the Controller shall issue35 regulations revising and consolidating reporting for redevelopment36 agencies. The goal of the regulations shall be to do all of the37 following: (1) unify and simplify the reporting requirements of38 redevelopment agencies; (2) focus reporting requirements on39 information that wil be of the greatest utility in monitoring the40 activities of redevelopment agencies and their compliance with

97

57. \

IoÇ

-33- AD 1250

1 the provisions of the Community Redevelopment Law; and (3)

2 produce consistent and comparable data using a user-friendly,3 self-checking electronic data reporting system. The Controller

4 shall consult with an advisory committee comprised of persons

5 nominated by the department, the Legislative Analyst, the6 California Society of Certified Public Accountants, the California

7 Redevelopment Association, and any other authorities in the field8 that the Controller deems necessary and appropriate.

9 (b) In connection with issuing the regulations described in

10 . subdivision (a), by January 1,2013, the Controller shall prepare11 or cause to be prepared a management study that evaluates the12 reporting of redevelopment agencies and recommends any new

13 management systems, including required technology, needed to14 implement the proposed regulations.15 SEC. 20. This act is an urgency statute necessary for the16 immediate preservation of the public peace, health, or safety within17 the meaning of Article iv of the Constitution and shall go into18 immediate effect. The facts constituting the necessity are:19 In order to preserve housing funds that are needed to house

20 elderly individuals and working families, it is necessary that this21 act take effect immediately.

o

97

S7b L

Alicia Murilo

From: cbdbosmail@co.santa-cruz.ca.usSent: Saturday, June 11, 2011 8:43 PM

To: CBO BOSMAIL

Subject: Agenda Comments

Meeting Date: 6/14/2011 Item Number: 57.1

Name: Charles Paulden Email: Not Supplied

Address: Not Supplied Phone: Not Supplied

Comments:Please let RDA go.Pay down the debt and use a more democratic system to do what we want in our community.RDA is payed by an increase in the tax base.The cost of property is falling and the taxes with them.How will we repay the bonds.

Please just say no.Thank you

6/13/2011 61-\