BILL NUMBER: SB 459	CHAPTERED  10/04/01

	CHAPTER  471
	FILED WITH SECRETARY OF STATE  OCTOBER 4, 2001
	APPROVED BY GOVERNOR  OCTOBER 3, 2001
	PASSED THE SENATE  SEPTEMBER 10, 2001
	PASSED THE ASSEMBLY  SEPTEMBER 5, 2001
	AMENDED IN ASSEMBLY  SEPTEMBER 4, 2001
	AMENDED IN ASSEMBLY  JULY 19, 2001
	AMENDED IN ASSEMBLY  JUNE 30, 2001
	AMENDED IN ASSEMBLY  JUNE 20, 2001
	AMENDED IN SENATE  JUNE 4, 2001
	AMENDED IN SENATE  APRIL 23, 2001

INTRODUCED BY   Senator McPherson
   (Coauthor:  Assembly Member Salinas)

                        FEBRUARY 22, 2001

   An act to amend, repeal, and add Section 33334.2 of, and to add
and repeal Section 33334.22 of, the Health and Safety Code, relating
to housing.



	LEGISLATIVE COUNSEL'S DIGEST


   SB 459, McPherson.  Housing programs:  eligibility.
   Existing law governing housing and home finance generally defines
the term "affordable housing cost" to mean, with respect to very low,
lower, and moderate-income households receiving assistance on or
after January 1, 1991, housing costs not exceeding the product of a
specified percentage times a specified percent of the area median
income.  Under existing law, this definition is used for determining,
among other things, the affordability of housing made available
pursuant to a requirement that a redevelopment agency allocate 20% of
tax-increment revenues for housing available at affordable housing
cost.
   This bill would separately define affordable housing cost for any
redevelopment agency within Santa Cruz County, with that specified
percentage increased, for purposes of the provisions requiring a
redevelopment agency to allocate 20% of tax-increment revenues for
housing available at affordable housing cost.  The bill also would
require the Department of Housing and Community Development to adopt
specified regulations relative to housing affordability for purposes
of the bill.  These provisions would be repealed on January 1, 2005.

   This bill would also impose specified reporting requirements on
those redevelopment agencies and the Controller relating to the
assistance provided by those agencies in Santa Cruz County.
   This bill would incorporate additional changes in Section 33334.2
of the Health and Safety Code proposed by AB 637, AB 661, or both, to
be operative if this bill and one or both of the other bills are
enacted and become effective on or before January 1, 2002, and this
bill is enacted last.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 33334.2 of the Health and Safety Code is
amended to read:
   33334.2.  (a) Not less than 20 percent of all taxes that are
allocated to the agency pursuant to Section 33670 shall be used by
the agency for the purposes of increasing, improving, and preserving
the community's supply of low- and moderate-income housing available
at affordable housing cost, as defined by Sections 33334.22 and
50052.5, to persons and families of low or moderate income, as
defined in Section 50093, and very low income households, as defined
in Section 50105, unless one of the following findings is made
annually by resolution:
   (1) (A) That no need exists in the community to improve, increase,
or preserve the supply of low- and moderate-income housing,
including housing for very low income households in a manner that
would benefit the project area and that this finding is consistent
with the housing element of the community's general plan required by
Article 10.6 (commencing with Section 65580) of Chapter 3 of Division
1 of Title 7 of the Government Code, including its share of the
regional housing needs of very low income households and persons and
families of low or moderate income.
   (B) This finding shall only be made if the housing element of the
community's general plan demonstrates that the community does not
have a need to improve, increase, or preserve the supply of low- and
moderate-income housing available at affordable housing cost to
persons and families of low or moderate income and to very low income
households.  This finding shall only be made if it is consistent
with the planning agency's annual report to the legislative body on
implementation of the housing element required by subdivision (b) of
Section 65400 of the Government Code.  No agency of a charter city
shall make this finding unless the planning agency submits the report
pursuant to subdivision (b) of Section 65400 of the Government Code.
  This finding shall not take effect until the agency has complied
with subdivision (b) of this section.
   (2) (A) That some stated percentage less than 20 percent of the
taxes that are allocated to the agency pursuant to Section 33670 is
sufficient to meet the housing needs of the community, including its
share of the regional housing needs of persons and families of low-or
moderate-income and very low income households, and that this
finding is consistent with the housing element of the community's
general plan required by Article 10.6 (commencing with Section 65580)
of Chapter 3 of Division 1 of Title 7 of the Government Code.
   (B) This finding shall only be made if the housing element of the
community's general plan demonstrates that a percentage of less than
20 percent will be sufficient to meet the community's need to
improve, increase, or preserve the supply of low- and moderate-income
housing available at affordable housing cost to persons and families
of low or moderate income and to very low income households.  This
finding shall only be made if it is consistent with the planning
agency's annual report to the legislative body on implementation of
the housing element required by subdivision (b) of Section 65400 of
the Government Code.  No agency of a charter city shall make this
finding unless the planning agency submits the report pursuant to
subdivision (b) of Section 65400 of the Government Code.  This
finding shall not take effect until the agency has complied with
subdivision (b) of this section.
   (C) For purposes of making the findings specified in this
paragraph and paragraph (1), the housing element of the general plan
of a city or county shall be current, shall have been submitted to
the Department of Housing and Community Development within the
applicable time period, and shall be in compliance with Article 10.6
(commencing with Section 65580) of Chapter 3 of Division 1 of Title 7
of the Government Code.
   (3) (A) That the community is making a substantial effort to meet
its existing and projected housing needs, including its share of the
regional housing needs, with respect to persons and families of low
and moderate income, particularly very low income households, as
identified in the housing element of the community's general plan
required by Article 10.6 (commencing with Section 65580) of Chapter 3
of Division 1 of Title 7 of the Government Code, and that this
effort, consisting of direct financial contributions of local funds
used to increase and improve the supply of housing affordable to
persons and families of low or moderate income and very low income
households, is equivalent in impact to the funds otherwise required
to be set aside pursuant to this section.  In addition to any other
local funds, these direct financial contributions may include federal
or state grants paid directly to a community and which the community
has the discretion of using for the purposes for which moneys in the
Low and Moderate Income Housing Fund may be used.  The legislative
body shall consider the need that can be reasonably foreseen because
of displacement of persons and families of low or moderate income or
very low income households from within, or adjacent to, the project
area, because of increased employment opportunities, or because of
any other direct or indirect result of implementation of the
redevelopment plan.  No finding under this subdivision may be made
until the community has provided or ensured the availability of
replacement dwelling units as defined in Section 33411.2 and until it
has complied with Article 9 (commencing with Section 33410).
   (B) In making the determination that other financial contributions
are equivalent in impact pursuant to this subdivision, the agency
shall include only those financial contributions that are directly
related to programs or activities authorized under subdivision (e) of
this section.
   (C) The authority for making the finding specified in this
paragraph shall expire on June 30, 1993, except that the expiration
shall not be deemed to impair contractual obligations to bondholders
or private entities incurred prior to May 1, 1991, and made in
reliance on this paragraph.  Agencies that make this finding after
June 30, 1993, shall show evidence that the agency entered into the
specific contractual obligation with the specific intention of making
a finding under this paragraph in order to provide sufficient
revenues to pay off the indebtedness.
   (b) Within 10 days following the making of a finding under either
paragraph (1) or (2) of subdivision (a), the agency shall send the
department a copy of the finding, including the factual information
supporting the finding and other factual information in the housing
element that demonstrates that either (1) the community does not need
to increase, improve, or preserve the supply of housing for low- and
moderate-income households, including very low income households, or
(2) a percentage less than 20 percent will be sufficient to meet the
community's need to improve, increase, and preserve the supply of
housing for low- and moderate-income households, including very low
income households.  Within 10 days following the making of a finding
under paragraph (3) of subdivision (a), the agency shall send the
department a copy of the finding, including the factual information
supporting the finding that the community is making a substantial
effort to meet its existing and projected housing needs.  Agencies
that make this finding after June 30, 1993, shall also submit
evidence to the department of its contractual obligations with
bondholders or private entities incurred prior to May 1, 1991, and
made in reliance on this finding.
   (c) In any litigation to challenge or attack a finding made under
paragraph (1), (2), or (3) of subdivision (a), the burden shall be
upon the agency to establish that the finding is supported by
substantial evidence in light of the entire record before the agency.
  If an agency is determined by a court to have knowingly
misrepresented any material facts regarding the community's share of
its regional housing need for low- and moderate-income housing,
including very low income households, or the community's production
record in meeting its share of the regional housing need pursuant to
the report required by subdivision (b) of Section 65400 of the
Government Code, the agency shall be liable for all court costs and
plaintiff's attorney's fees, and shall be required to allocate not
less than 25 percent of the agency's tax increment revenues to its
Low and Moderate Income Housing Fund in each year thereafter.
   (d) Nothing in this section shall be construed as relieving any
other public entity or entity with the power of eminent domain of any
legal obligations for replacement or relocation housing arising out
of its activities.
   (e) In carrying out the purposes of this section, the agency may
exercise any or all of its powers, including the following:
   (1) Acquire real property or building sites subject to Section
33334.16.
   (2) Improve real property or building sites with onsite or offsite
improvements, but only if either (A) the improvements are made as
part of a program which results in the new construction or
rehabilitation of affordable housing units for low- or
moderate-income persons that are directly benefited by the
improvements or (B) the agency finds that the improvements are
necessary to eliminate a specific condition that jeopardizes the
health or safety of existing low- or moderate-income residents.
   (3) Donate real property to private or public persons or entities.

   (4) Finance insurance premiums pursuant to Section 33136.
   (5) Construct buildings or structures.
   (6) Acquire buildings or structures.
   (7) Rehabilitate buildings or structures.
   (8) Provide subsidies to, or for the benefit of, very low income
households, as defined by Section 50105, lower income households, as
defined by Section 50079.5, or persons and families of low or
moderate income, as defined by Section 50093, to the extent those
households cannot obtain housing at affordable costs on the open
market.  Housing units available on the open market are those units
developed without direct government subsidies.
   (9) Develop plans, pay principal and interest on bonds, loans,
advances, or other indebtedness, or pay financing or carrying
charges.
   (10) Maintain the community's supply of mobilehomes.
   (11) Preserve the availability to lower income households of
affordable housing units in housing developments which are assisted
or subsidized by public entities and which are threatened with
imminent conversion to market rates.
   (f) The agency may use these funds to meet, in whole or in part,
the replacement housing provisions in Section 33413.  However,
nothing in this section shall be construed as limiting in any way the
requirements of that section.
   (g) (1) The agency may use these funds inside or outside the
project area.  The agency may only use these funds outside the
project area upon a resolution of the agency and the legislative body
that the use will be of benefit to the project.  The determination
by the agency and the legislative body shall be final and conclusive
as to the issue of benefit to the project area.  The Legislature
finds and declares that the provision of replacement housing pursuant
to Section 33413 is always of benefit to a project.  Unless the
legislative body finds, before the redevelopment plan is adopted,
that the provision of low- and moderate-income housing outside the
project area will be of benefit to the project, the project area
shall include property suitable for low- and moderate-income housing.

   (2) (A) The Contra Costa County Redevelopment Agency may use these
funds anywhere within the unincorporated territory, or within the
incorporated limits of the City of Walnut Creek on sites contiguous
to the Pleasant Hill BART Station Area Redevelopment Project area.
The agency may only use these funds outside the project area upon a
resolution of the agency and board of supervisors determining that
the use will be of benefit to the project area.  In addition, the
agency may use these funds within the incorporated limits of the City
of Walnut Creek only if the agency and the board of supervisors find
all of the following:
   (i) Both the County of Contra Costa and the City of Walnut Creek
have adopted and are implementing complete and current housing
elements of their general plans that the department has determined to
be in compliance with the requirements of Article 10.6 (commencing
with Section 65580) of Chapter 3 of Division 1 of Title 7 of the
Government Code.
   (ii) The development to be funded shall not result in any
residential displacement from the site where the development is to be
built.
   (iii) The development to be funded shall not be constructed in an
area that currently has more than 50 percent of its population
comprised of racial minorities or low-income families.
   (iv) The development to be funded shall allow construction of
affordable housing closer to a rapid transit station than could be
constructed in the unincorporated territory outside the Pleasant Hill
BART Station Area Redevelopment Project.
   (B) If the agency uses these funds within the incorporated limits
of the City of Walnut Creek, all of the following requirements shall
apply:
   (i) The funds shall be used only for the acquisition of land for,
and the design and construction of, the development of housing
containing units affordable to low- and moderate-income persons.
   (ii) If less than all the units in the development are affordable
to low- or moderate-income persons, any agency assistance shall not
exceed the amount needed to make the housing affordable to low- or
moderate-income persons.
   (iii) The units in the development that are affordable to low- or
moderate-income persons shall remain affordable for a period of at
least 55 years.
   (iv) The agency and the City of Walnut Creek shall determine, if
applicable, whether Article XXXIV of the California Constitution
permits the development.
   (h) The Legislature finds and declares that expenditures or
obligations incurred by the agency pursuant to this section shall
constitute an indebtedness of the project.
   (i) The requirements of this section shall only apply to taxes
allocated to a redevelopment agency for which a final redevelopment
plan is adopted on or after January 1, 1977, or for any area that is
added to a project by an amendment to a redevelopment plan, which
amendment is adopted on or after the effective date of this section.
An agency may, by resolution, elect to make all or part of the
requirements of this section applicable to any redevelopment project
for which a redevelopment plan was adopted prior to January 1, 1977,
subject to any indebtedness incurred prior to the election.
   (j) This section shall remain in effect only until January 1,
2005, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2005, deletes or extends
that date.
  SEC. 1.3.  Section 33334.2 of the Health and Safety Code is amended
to read:
   33334.2.  (a) Not less than 20 percent of all taxes that are
allocated to the agency pursuant to Section 33670 shall be used by
the agency for the purposes of increasing, improving, and preserving
the community's supply of low- and moderate-income housing available
at affordable housing cost, as defined by Sections 33334.22 and
50052.5, to persons and families of low or moderate income, as
defined in Section 50093, and very low income households, as defined
in Section 50105, that is occupied by these persons and families,
unless one of the following findings is made annually by resolution:

   (1) (A) That no need exists in the community to improve, increase,
or preserve the supply of low- and moderate-income housing,
including housing for very low income households in a manner that
would benefit the project area and that this finding is consistent
with the housing element of the community's general plan required by
Article 10.6 (commencing with Section 65580) of Chapter 3 of Division
1 of Title 7 of the Government Code, including its share of the
regional housing needs of very low income households and persons and
families of low or moderate income.
   (B) This finding shall only be made if the housing element of the
community's general plan demonstrates that the community does not
have a need to improve, increase, or preserve the supply of low- and
moderate-income housing available at affordable housing cost to
persons and families of low or moderate income and to very low income
households.  This finding shall only be made if it is consistent
with the planning agency's annual report to the legislative body on
implementation of the housing element required by subdivision (b) of
Section 65400 of the Government Code.  No agency of a charter city
shall make this finding unless the planning agency submits the report
pursuant to subdivision (b) of Section 65400 of the Government Code.
  This finding shall not take effect until the agency has complied
with subdivision (b) of this section.
   (2) (A) That some stated percentage less than 20 percent of the
taxes that are allocated to the agency pursuant to Section 33670 is
sufficient to meet the housing needs of the community, including its
share of the regional housing needs of persons and families of low or
moderate income and very low income households, and that this
finding is consistent with the housing element of the community's
general plan required by Article 10.6 (commencing with Section 65580)
of Chapter 3 of Division 1 of Title 7 of the Government Code.
   (B) This finding shall only be made if the housing element of the
community's general plan demonstrates that a percentage of less than
20 percent will be sufficient to meet the community's need to
improve, increase, or preserve the supply of low- and moderate-income
housing available at affordable housing cost to persons and families
of low or moderate income and to very low income households.  This
finding shall only be made if it is consistent with the planning
agency's annual report to the legislative body on implementation of
the housing element required by subdivision (b) of Section 65400 of
the Government Code.  No agency of a charter city shall make this
finding unless the planning agency submits the report pursuant to
subdivision (b) of Section 65400 of the Government Code.  This
finding shall not take effect until the agency has complied with
subdivision (b) of this section.
   (C) For purposes of making the findings specified in this
paragraph and paragraph (1), the housing element of the general plan
of a city or county shall be current, shall have been submitted to
the Department of Housing and Community Development within the
applicable time period, and shall be in compliance with Article 10.6
(commencing with Section 65580) of Chapter 3 of Division 1 of Title 7
of the Government Code.
   (3) (A) That the community is making a substantial effort to meet
its existing and projected housing needs, including its share of the
regional housing needs, with respect to persons and families of low
and moderate income, particularly very low income households, as
identified in the housing element of the community's general plan
required by Article 10.6 (commencing with Section 65580) of Chapter 3
of Division 1 of Title 7 of the Government Code, and that this
effort, consisting of direct financial contributions of local funds
used to increase and improve the supply of housing affordable to
persons and families of low or moderate income and very low income
households that is occupied by these persons and families, is
equivalent in impact to the funds otherwise required to be set aside
pursuant to this section.  In addition to any other local funds,
these direct financial contributions may include federal or state
grants paid directly to a community and which the community has the
discretion of using for the purposes for which moneys in the Low and
Moderate Income Housing Fund may be used. The legislative body shall
consider the need that can be reasonably foreseen because of
displacement of persons and families of low or moderate income or
very low income households from within, or adjacent to, the project
area, because of increased employment opportunities, or because of
any other direct or indirect result of implementation of the
redevelopment plan.  No finding under this subdivision may be made
until the community has provided or ensured the availability of
replacement dwelling units as defined in Section 33411.2 and until it
has complied with Article 9 (commencing with Section 33410).
   (B) In making the determination that other financial contributions
are equivalent in impact pursuant to this subdivision, the agency
shall include only those financial contributions that are directly
related to programs or activities authorized under subdivision (e) of
this section.
   (C) The authority for making the finding specified in this
paragraph shall expire on June 30, 1993, except that the expiration
shall not be deemed to impair contractual obligations to bondholders
or private entities incurred prior to May 1, 1991, and made in
reliance on this paragraph.  Agencies that make this finding after
June 30, 1993, shall show evidence that the agency entered into the
specific contractual obligation with the specific intention of making
a finding under this paragraph in order to provide sufficient
revenues to pay off the indebtedness.
   (b) Within 10 days following the making of a finding under either
paragraph (1) or (2) of subdivision (a), the agency shall send the
department a copy of the finding, including the factual information
supporting the finding and other factual information in the housing
element that demonstrates that either (1) the community does not need
to increase, improve, or preserve the supply of housing for low- and
moderate-income households, including very low income households, or
(2) a percentage less than 20 percent will be sufficient to meet the
community's need to improve, increase, and preserve the supply of
housing for low- and moderate-income households, including very low
income households.  Within 10 days following the making of a finding
under paragraph (3) of subdivision (a), the agency shall send the
department a copy of the finding, including the factual information
supporting the finding that the community is making a substantial
effort to meet its existing and projected housing needs.  Agencies
that make this finding after June 30, 1993, shall also submit
evidence to the department of its contractual obligations with
bondholders or private entities incurred prior to May 1, 1991, and
made in reliance on this finding.
   (c) In any litigation to challenge or attack a finding made under
paragraph (1), (2), or (3) of subdivision (a), the burden shall be
upon the agency to establish that the finding is supported by
substantial evidence in light of the entire record before the agency.
  If an agency is determined by a court to have knowingly
misrepresented any material facts regarding the community's share of
its regional housing need for low- and moderate-income housing,
including very low income households, or the community's production
record in meeting its share of the regional housing need pursuant to
the report required by subdivision (b) of Section 65400 of the
Government Code, the agency shall be liable for all court costs and
plaintiff's attorney's fees, and shall be required to allocate not
less than 25 percent of the agency's tax increment revenues to its
Low and Moderate Income Housing Fund in each year thereafter.
   (d) Nothing in this section shall be construed as relieving any
other public entity or entity with the power of eminent domain of any
legal obligations for replacement or relocation housing arising out
of its activities.
   (e) In carrying out the purposes of this section, the agency may
exercise any or all of its powers for the construction,
rehabilitation, or preservation of affordable housing for very low,
low-, and moderate-income persons or families, including the
following:
   (1) Acquire real property or building sites subject to Section
33334.16.
   (2) Improve real property or building sites with onsite or offsite
improvements, but only if both (A) the improvements are part of the
new construction or rehabilitation of affordable housing units for
low- or moderate-income persons that are directly benefited by the
improvements , and are a reasonable and fundamental component of the
housing units, and (B) the agency requires that the units remain
available at affordable housing cost to persons and families of very
low, low, or moderate income, and are occupied by these persons and
families, for the same time period and in the same manner as provided
in subdivision (c) and paragraph (2) of subdivision (f) of Section
33334.3.
   If the newly constructed or rehabilitated housing units are part
of a larger project and the agency improves or pays for onsite or
offsite improvements pursuant to the authority in this subdivision,
the agency shall pay only a portion of the total cost of the onsite
or offsite improvement.  The maximum percentage of the total cost of
the improvement paid for by the agency shall be determined by
dividing the number of housing units that are affordable to low- or
moderate-income persons by the total number of housing units, if the
project is a housing project, or by dividing the cost of the
affordable housing units by the total cost of the project, if the
project is not a housing project.
   (3) Donate real property to private or public persons or entities.

   (4) Finance insurance premiums pursuant to Section 33136.
   (5) Construct buildings or structures.
   (6) Acquire buildings or structures.
   (7) Rehabilitate buildings or structures.
   (8) Provide subsidies to, or for the benefit of, very low income
households, as defined by Section 50105, lower income households, as
defined by Section 50079.5, or persons and families of low or
moderate income, as defined by Section 50093, to the extent those
households cannot obtain housing at affordable costs on the open
market.  Housing units available on the open market are those units
developed without direct government subsidies.
   (9) Develop plans, pay principal and interest on bonds, loans,
advances, or other indebtedness, or pay financing or carrying
charges.
   (10) Maintain the community's supply of mobilehomes.
   (11) Preserve the availability to lower income households of
affordable housing units in housing developments that are assisted or
subsidized by public entities and that are threatened with imminent
                                             conversion to market
rates.
   (f) The agency may use these funds to meet, in whole or in part,
the replacement housing provisions in Section 33413.  However,
nothing in this section shall be construed as limiting in any way the
requirements of that section.
   (g) (1) The agency may use these funds inside or outside the
project area.  The agency may only use these funds outside the
project area upon a resolution of the agency and the legislative body
that the use will be of benefit to the project.  The determination
by the agency and the legislative body shall be final and conclusive
as to the issue of benefit to the project area.  The Legislature
finds and declares that the provision of replacement housing pursuant
to Section 33413 is always of benefit to a project.  Unless the
legislative body finds, before the redevelopment plan is adopted,
that the provision of low- and moderate-income housing outside the
project area will be of benefit to the project, the project area
shall include property suitable for low- and moderate-income housing.

   (2) (A) The Contra Costa County Redevelopment Agency may use these
funds anywhere within the unincorporated territory, or within the
incorporated limits of the City of Walnut Creek on sites contiguous
to the Pleasant Hill BART Station Area Redevelopment Project area.
The agency may only use these funds outside the project area upon a
resolution of the agency and board of supervisors determining that
the use will be of benefit to the project area.  In addition, the
agency may use these funds within the incorporated limits of the City
of Walnut Creek only if the agency and the board of supervisors find
all of the following:
   (i) Both the County of Contra Costa and the City of Walnut Creek
have adopted and are implementing complete and current housing
elements of their general plans that the department has determined to
be in compliance with the requirements of Article 10.6 (commencing
with Section 65580) of Chapter 3 of Division 1 of Title 7 of the
Government Code.
   (ii) The development to be funded shall not result in any
residential displacement from the site where the development is to be
built.
   (iii) The development to be funded shall not be constructed in an
area that currently has more than 50 percent of its population
comprised of racial minorities or low-income families.
   (iv) The development to be funded shall allow construction of
affordable housing closer to a rapid transit station than could be
constructed in the unincorporated territory outside the Pleasant Hill
BART Station Area Redevelopment Project.
   (B) If the agency uses these funds within the incorporated limits
of the City of Walnut Creek, all of the following requirements shall
apply:
   (i) The funds shall be used only for the acquisition of land for,
and the design and construction of, the development of housing
containing units affordable to low- and moderate-income persons.
   (ii) If less than all the units in the development are affordable
to low- or moderate-income persons, any agency assistance shall not
exceed the amount needed to make the housing affordable to low- or
moderate-income persons.
   (iii) The units in the development that are affordable to low- or
moderate-income persons shall remain affordable for a period of at
least 55 years.
   (iv) The agency and the City of Walnut Creek shall determine, if
applicable, whether Article XXXIV of the California Constitution
permits the development.
   (h) The Legislature finds and declares that expenditures or
obligations incurred by the agency pursuant to this section shall
constitute an indebtedness of the project.
   (i) The requirements of this section shall only apply to taxes
allocated to a redevelopment agency for which a final redevelopment
plan is adopted on or after January 1, 1977, or for any area that is
added to a project by an amendment to a redevelopment plan, which
amendment is adopted on or after the effective date of this section.
An agency may, by resolution, elect to make all or part of the
requirements of this section applicable to any redevelopment project
for which a redevelopment plan was adopted prior to January 1, 1977,
subject to any indebtedness incurred prior to the election.
   (j) This section shall remain in effect only until January 1,
2005, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2005, deletes or extends
that date.
  SEC. 1.5.  Section 33334.2 of the Health and Safety Code is amended
to read:
   33334.2.  (a) Not less than 20 percent of all taxes that are
allocated to the agency pursuant to Section 33670 shall be used by
the agency for the purposes of increasing, improving, and preserving
the community's supply of low- and moderate-income housing available
at affordable housing cost, as defined by Sections 33334.22 and
50052.5, to persons and families of low or moderate income, as
defined in Section 50093, and very low income households, as defined
in Section 50105, unless one of the following findings is made
annually by resolution:
   (1) (A) That no need exists in the community to improve, increase,
or preserve the supply of low- and moderate-income housing,
including housing for very low income households in a manner that
would benefit the project area and that this finding is consistent
with the housing element of the community's general plan required by
Article 10.6 (commencing with Section 65580) of Chapter 3 of Division
1 of Title 7 of the Government Code, including its share of the
regional housing needs of very low income households and persons and
families of low or moderate income.
   (B) This finding shall only be made if the housing element of the
community's general plan demonstrates that the community does not
have a need to improve, increase, or preserve the supply of low- and
moderate-income housing available at affordable housing cost to
persons and families of low or moderate income and to very low income
households.  This finding shall only be made if it is consistent
with the planning agency's annual report to the legislative body on
implementation of the housing element required by subdivision (b) of
Section 65400 of the Government Code.  No agency of a charter city
shall make this finding unless the planning agency submits the report
pursuant to subdivision (b) of Section 65400 of the Government Code.
  This finding shall not take effect until the agency has complied
with subdivision (b) of this section.
   (2) (A) That some stated percentage less than 20 percent of the
taxes that are allocated to the agency pursuant to Section 33670 is
sufficient to meet the housing needs of the community, including its
share of the regional housing needs of persons and families of low or
moderate income and very low income households, and that this
finding is consistent with the housing element of the community's
general plan required by Article 10.6 (commencing with Section 65580)
of Chapter 3 of Division 1 of Title 7 of the Government Code.
   (B) This finding shall only be made if the housing element of the
community's general plan demonstrates that a percentage of less than
20 percent will be sufficient to meet the community's need to
improve, increase, or preserve the supply of low- and moderate-income
housing available at affordable housing cost to persons and families
of low or moderate income and to very low income households.  This
finding shall only be made if it is consistent with the planning
agency's annual report to the legislative body on implementation of
the housing element required by subdivision (b) of Section 65400 of
the Government Code.  No agency of a charter city shall make this
finding unless the planning agency submits the report pursuant to
subdivision (b) of Section 65400 of the Government Code.  This
finding shall not take effect until the agency has complied with
subdivision (b) of this section.
   (C) For purposes of making the findings specified in this
paragraph and paragraph (1), the housing element of the general plan
of a city or county shall be current, shall have been submitted to
the department within the applicable time period, and shall be in
compliance with Article 10.6 (commencing with Section 65580) of
Chapter 3 of Division 1 of Title 7 of the Government Code.
   (3) (A) That the community is making a substantial effort to meet
its existing and projected housing needs, including its share of the
regional housing needs, with respect to persons and families of low
and moderate income, particularly very low income households, as
identified in the housing element of the community's general plan
required by Article 10.6 (commencing with Section 65580) of Chapter 3
of Division 1 of Title 7 of the Government Code, and that this
effort, consisting of direct financial contributions of local funds
used to increase and improve the supply of housing affordable to
persons and families of low or moderate income and very low income
households, is equivalent in impact to the funds otherwise required
to be set aside pursuant to this section.  In addition to any other
local funds, these direct financial contributions may include federal
or state grants paid directly to a community and which the community
has the discretion of using for the purposes for which moneys in the
Low and Moderate Income Housing Fund may be used. The legislative
body shall consider the need that can be reasonably foreseen because
of displacement of persons and families of low or moderate income or
very low income households from within, or adjacent to, the project
area, because of increased employment opportunities, or because of
any other direct or indirect result of implementation of the
redevelopment plan.  No finding under this subdivision may be made
until the community has provided or ensured the availability of
replacement dwelling units as defined in Section 33411.2 and until it
has complied with Article 9 (commencing with Section 33410).
   (B) In making the determination that other financial contributions
are equivalent in impact pursuant to this subdivision, the agency
shall include only those financial contributions that are directly
related to programs or activities authorized under subdivision (e) .

   (C) The authority for making the finding specified in this
paragraph shall expire on June 30, 1993, except that the expiration
shall not be deemed to impair contractual obligations to bondholders
or private entities incurred prior to May 1, 1991, and made in
reliance on this paragraph.  Agencies that make this finding after
June 30, 1993, shall show evidence that the agency entered into the
specific contractual obligation with the specific intention of making
a finding under this paragraph in order to provide sufficient
revenues to pay off the indebtedness.
   (b) Within 10 days following the making of a finding under either
paragraph (1) or (2) of subdivision (a), the agency shall send the
department a copy of the finding, including the factual information
supporting the finding and other factual information in the housing
element that demonstrates that either (1) the community does not need
to increase, improve, or preserve the supply of housing for low- and
moderate-income households, including very low income households, or
(2) a percentage less than 20 percent will be sufficient to meet the
community's need to improve, increase, and preserve the supply of
housing for low- and moderate-income households, including very low
income households.  Within 10 days following the making of a finding
under paragraph (3) of subdivision (a), the agency shall send the
department a copy of the finding, including the factual information
supporting the finding that the community is making a substantial
effort to meet its existing and projected housing needs.  Agencies
that make this finding after June 30, 1993, shall also submit
evidence to the department of its contractual obligations with
bondholders or private entities incurred prior to May 1, 1991, and
made in reliance on this finding.
   (c) In any litigation to challenge or attack a finding made under
paragraph (1), (2), or (3) of subdivision (a), the burden shall be
upon the agency to establish that the finding is supported by
substantial evidence in light of the entire record before the agency.
  If an agency is determined by a court to have knowingly
misrepresented any material facts regarding the community's share of
its regional housing need for low- and moderate-income housing,
including very low income households, or the community's production
record in meeting its share of the regional housing need pursuant to
the report required by subdivision (b) of Section 65400 of the
Government Code, the agency shall be liable for all court costs and
plaintiff's attorney's fees, and shall be required to allocate not
less than 25 percent of the agency's tax increment revenues to its
Low and Moderate Income Housing Fund in each year thereafter.
   (d) Nothing in this section shall be construed as relieving any
other public entity or entity with the power of eminent domain of any
legal obligations for replacement or relocation housing arising out
of its activities.
   (e) In carrying out the purposes of this section, the agency may
exercise any or all of its powers, including the following:
   (1) Acquire real property or building sites subject to Section
33334.16.
   (2) Improve real property or building sites with onsite or offsite
improvements, but only if either (A) the improvements are made as
part of a program which results in the new construction or
rehabilitation of affordable housing units for low- or
moderate-income persons that are directly benefited by the
improvements or (B) the agency finds that the improvements are
necessary to eliminate a specific condition that jeopardizes the
health or safety of existing low- or moderate-income residents.
   (3) Donate real property to private or public persons or entities.

   (4) Finance insurance premiums pursuant to Section 33136.
   (5) Construct buildings or structures.
   (6) Acquire buildings or structures.
   (7) Rehabilitate buildings or structures.
   (8) Provide subsidies to, or for the benefit of, very low income
households, as defined by Section 50105, lower income households, as
defined by Section 50079.5, or persons and families of low or
moderate income, as defined by Section 50093, to the extent those
households cannot obtain housing at affordable costs on the open
market.  Housing units available on the open market are those units
developed without direct government subsidies.
   (9) Develop plans, pay principal and interest on bonds, loans,
advances, or other indebtedness, or pay financing or carrying
charges.
   (10) Maintain the community's supply of mobilehomes.
   (11) Preserve the availability to lower income households of
affordable housing units in housing developments which are assisted
or subsidized by public entities and which are threatened with
imminent conversion to market rates.
   (f) The agency may use these funds to meet, in whole or in part,
the replacement housing provisions in Section 33413.  However,
nothing in this section shall be construed as limiting in any way the
requirements of that section.
   (g) (1) The agency may use these funds inside or outside the
project area.  The agency may only use these funds outside the
project area upon a resolution of the agency and the legislative body
that the use will be of benefit to the project.  The determination
by the agency and the legislative body shall be final and conclusive
as to the issue of benefit to the project area.  The Legislature
finds and declares that the provision of replacement housing pursuant
to Section 33413 is always of benefit to a project.  Unless the
legislative body finds, before the redevelopment plan is adopted,
that the provision of low- and moderate-income housing outside the
project area will be of benefit to the project, the project area
shall include property suitable for low- and moderate-income housing.

   (2) (A) The Contra Costa County Redevelopment Agency may use these
funds anywhere within the unincorporated territory, or within the
incorporated limits of the City of Walnut Creek on sites contiguous
to the Pleasant Hill BART Station Area Redevelopment Project area.
The agency may only use these funds outside the project area upon a
resolution of the agency and board of supervisors determining that
the use will be of benefit to the project area.  In addition, the
agency may use these funds within the incorporated limits of the City
of Walnut Creek only if the agency and the board of supervisors find
all of the following:
   (i) Both the County of Contra Costa and the City of Walnut Creek
have adopted and are implementing complete and current housing
elements of their general plans that the department has determined to
be in compliance with the requirements of Article 10.6 (commencing
with Section 65580) of Chapter 3 of Division 1 of Title 7 of the
Government Code.
   (ii) The development to be funded shall not result in any
residential displacement from the site where the development is to be
built.
   (iii) The development to be funded shall not be constructed in an
area that currently has more than 50 percent of its population
comprised of racial minorities or low-income families.
   (iv) The development to be funded shall allow construction of
affordable housing closer to a rapid transit station than could be
constructed in the unincorporated territory outside the Pleasant Hill
BART Station Area Redevelopment Project.
   (B) If the agency uses these funds within the incorporated limits
of the City of Walnut Creek, all of the following requirements shall
apply:
   (i) The funds shall be used only for the acquisition of land for,
and the design and construction of, the development of housing
containing units affordable to low- and moderate-income persons.
   (ii) If less than all the units in the development are affordable
to low- or moderate-income persons, any agency assistance shall not
exceed the amount needed to make the housing affordable to low- or
moderate-income persons.
   (iii) The units in the development that are affordable to low- or
moderate-income persons shall remain affordable for a period of at
least 55 years.
   (iv) The agency and the City of Walnut Creek shall determine, if
applicable, whether Article XXXIV of the California Constitution
permits the development.
   (3) (A) The Orange County Development Agency may use these funds
anywhere within the unincorporated territory, or within the
incorporated limits of any city within the County of Orange.  The
agency may only use these funds outside the project area upon a
resolution of the agency and board of supervisors determining that
the use will be of benefit to the project area.  In addition, the
agency may use these funds within the incorporated limits of a city
only if the agency and the board of supervisors find all of the
following:
   (i) Both the County of Orange and the city have adopted and are
implementing complete and current housing elements of their general
plans that the department has determined to be in compliance with the
requirements of Article 10.6 (commencing with Section 65580) of
Chapter 3 of Division 1 of Title 7 of the Government Code.
   (ii) The development to be funded shall not result in any
residential displacement from the site where the development is to be
built.
   (iii) The development to be funded shall be a rental housing
development containing units affordable to lower income households or
very low income households, as defined in Sections 50079.5 and
50105.
   (iv) The development is in an area with a need for additional
affordable housing.
   (v) If applicable, Article XXXIV of the California Constitution
permits the development.
   (vi) The city in which the development is to be constructed has
certified to the agency that the city's redevelopment agency, if one
exists, is not subject to sanctions pursuant to subdivision (e) of
Section 33334.12 for failure to expend or encumber a housing fund
excess surplus.
   (B) If the agency uses these funds within the incorporated limits
of a city, all of the following requirements shall apply:
   (i) The funds shall be used only for the acquisition of land for,
and the design and construction of, housing containing units
affordable to lower income households or very low income households,
as defined in Sections 50079.5 and 50105, or for the acquisition or
rehabilitation of publicly assisted rental housing that is threatened
with conversion to market rates.
   (ii) If less than all the units in the development are affordable
to lower income households or very low income households, any agency
assistance shall not exceed the amount needed to make the housing
affordable to lower income households and very low income households.

   (iii) The units in the development that are affordable to lower
income households or very low income households shall remain
affordable for a period of at least 55 years.  Compliance with this
requirement shall be ensured by the execution and recordation of
covenants and restrictions that, notwithstanding any other provision
of law, shall run with the land.
   (iv) No development shall be located in a census tract where more
than 50 percent of its population is very low income.
   (v) Assisted developments shall be located on sites suitable for
multifamily housing near public transportation.
   (vi) Developed units shall not be treated as meeting the regional
housing needs allocation under both the city's and county's housing
elements.
   (vii) The funds shall be used only for developments for which the
city in which the development will be constructed has approved the
agency's use of funds for the development or has granted land use
approvals for the development.
   (viii) The aggregate number of units assisted by the county over
each five-year period shall include at least 10 percent that are
affordable to households earning 30 percent or less of the area
median income, and at least 40 percent that are affordable to very
low income households.
   (C) The Orange County Development Agency shall make diligent
efforts to obtain the development of low- and moderate-income housing
in unincorporated areas, including in developing areas of the
county.
   (h) The Legislature finds and declares that expenditures or
obligations incurred by the agency pursuant to this section shall
constitute an indebtedness of the project.
   (i) The requirements of this section shall only apply to taxes
allocated to a redevelopment agency for which a final redevelopment
plan is adopted on or after January 1, 1977, or for any area that is
added to a project by an amendment to a redevelopment plan, which
amendment is adopted on or after the effective date of this section.
An agency may, by resolution, elect to make all or part of the
requirements of this section applicable to any redevelopment project
for which a redevelopment plan was adopted prior to January 1, 1977,
subject to any indebtedness incurred prior to the election.
   (j) This section shall remain in effect only until January 1,
2005, and as of that date is repealed, unless alter enacted statute,
that is enacted before January 1, 2005, deletes or extends that date.

  SEC. 1.7.  Section 33334.2 of the Health and Safety Code is amended
to read:
   33334.2.  (a) Not less than 20 percent of all taxes that are
allocated to the agency pursuant to Section 33670 shall be used by
the agency for the purposes of increasing, improving, and preserving
the community's supply of low- and moderate-income housing available
at affordable housing cost, as defined by Sections 33334.22 and
50052.5, to persons and families of low or moderate income, as
defined in Section 50093, and very low income households, as defined
in Section 50105, that is occupied by these persons and families,
unless one of the following findings is made annually by resolution:

   (1) (A) That no need exists in the community to improve, increase,
or preserve the supply of low- and moderate-income housing,
including housing for very low income households in a manner that
would benefit the project area and that this finding is consistent
with the housing element of the community's general plan required by
Article 10.6 (commencing with Section 65580) of Chapter 3 of Division
1 of Title 7 of the Government Code, including its share of the
regional housing needs of very low income households and persons and
families of low or moderate income.
   (B) This finding shall only be made if the housing element of the
community's general plan demonstrates that the community does not
have a need to improve, increase, or preserve the supply of low- and
moderate-income housing available at affordable housing cost to
persons and families of low or moderate income and to very low income
households.  This finding shall only be made if it is consistent
with the planning agency's annual report to the legislative body on
implementation of the housing element required by subdivision (b) of
Section 65400 of the Government Code.  No agency of a charter city
shall make this finding unless the planning agency submits the report
pursuant to subdivision (b) of Section 65400 of the Government Code.
  This finding shall not take effect until the agency has complied
with subdivision (b) of this section.
   (2) (A) That some stated percentage less than 20 percent of the
taxes that are allocated to the agency pursuant to Section 33670 is
sufficient to meet the housing needs of the community, including its
share of the regional housing needs of persons and families of low or
moderate income and very low income households, and that this
finding is consistent with the housing element of the community's
general plan required by Article 10.6 (commencing with Section 65580)
of Chapter 3 of Division 1 of Title 7 of the Government Code.
   (B) This finding shall only be made if the housing element of the
community's general plan demonstrates that a percentage of less than
20 percent will be sufficient to meet the community's need to
improve, increase, or preserve the supply of low- and moderate-income
housing available at affordable housing cost to persons and families
of low or moderate income and to very low income households.  This
finding shall only be made if it is consistent with the planning
agency's annual report to the legislative body on implementation of
the housing element required by subdivision (b) of Section 65400 of
the Government Code.  No agency of a charter city shall make this
finding unless the planning agency submits the report pursuant to
subdivision (b) of Section 65400
      of the Government Code.  This finding shall not take effect
until the agency has complied with subdivision (b) of this section.
   (C) For purposes of making the findings specified in this
paragraph and paragraph (1), the housing element of the general plan
of a city or county shall be current, shall have been submitted to
the department within the applicable time period, and shall be in
compliance with Article 10.6 (commencing with Section 65580) of
Chapter 3 of Division 1 of Title 7 of the Government Code.
   (3) (A) That the community is making a substantial effort to meet
its existing and projected housing needs, including its share of the
regional housing needs, with respect to persons and families of low
and moderate income, particularly very low income households, as
identified in the housing element of the community's general plan
required by Article 10.6 (commencing with Section 65580) of Chapter 3
of Division 1 of Title 7 of the Government Code, and that this
effort, consisting of direct financial contributions of local funds
used to increase and improve the supply of housing affordable to
persons and families of low or moderate income and very low income
households that is occupied by these persons and families, is
equivalent in impact to the funds otherwise required to be set aside
pursuant to this section.  In addition to any other local funds,
these direct financial contributions may include federal or state
grants paid directly to a community and which the community has the
discretion of using for the purposes for which moneys in the Low and
Moderate Income Housing Fund may be used.  The legislative body shall
consider the need that can be reasonably foreseen because of
displacement of persons and families of low or moderate income or
very low income households from within, or adjacent to, the project
area, because of increased employment opportunities, or because of
any other direct or indirect result of implementation of the
redevelopment plan.  No finding under this subdivision may be made
until the community has provided or ensured the availability of
replacement dwelling units as defined in Section 33411.2 and until it
has complied with Article 9 (commencing with Section 33410).
   (B) In making the determination that other financial contributions
are equivalent in impact pursuant to this subdivision, the agency
shall include only those financial contributions that are directly
related to programs or activities authorized under subdivision (e) .

   (C) The authority for making the finding specified in this
paragraph shall expire on June 30, 1993, except that the expiration
shall not be deemed to impair contractual obligations to bondholders
or private entities incurred prior to May 1, 1991, and made in
reliance on this paragraph.  Agencies that make this finding after
June 30, 1993, shall show evidence that the agency entered into the
specific contractual obligation with the specific intention of making
a finding under this paragraph in order to provide sufficient
revenues to pay off the indebtedness.
   (b) Within 10 days following the making of a finding under either
paragraph (1) or (2) of subdivision (a), the agency shall send the
department a copy of the finding, including the factual information
supporting the finding and other factual information in the housing
element that demonstrates that either (1) the community does not need
to increase, improve, or preserve the supply of housing for low- and
moderate-income households, including very low income households, or
(2) a percentage less than 20 percent will be sufficient to meet the
community's need to improve, increase, and preserve the supply of
housing for low- and moderate-income households, including very low
income households.  Within 10 days following the making of a finding
under paragraph (3) of subdivision (a), the agency shall send the
department a copy of the finding, including the factual information
supporting the finding that the community is making a substantial
effort to meet its existing and projected housing needs.  Agencies
that make this finding after June 30, 1993, shall also submit
evidence to the department of its contractual obligations with
bondholders or private entities incurred prior to May 1, 1991, and
made in reliance on this finding.
   (c) In any litigation to challenge or attack a finding made under
paragraph (1), (2), or (3) of subdivision (a), the burden shall be
upon the agency to establish that the finding is supported by
substantial evidence in light of the entire record before the agency.
  If an agency is determined by a court to have knowingly
misrepresented any material facts regarding the community's share of
its regional housing need for low- and moderate-income housing,
including very low income households, or the community's production
record in meeting its share of the regional housing need pursuant to
the report required by subdivision (b) of Section 65400 of the
Government Code, the agency shall be liable for all court costs and
plaintiff's attorney's fees, and shall be required to allocate not
less than 25 percent of the agency's tax increment revenues to its
Low and Moderate Income Housing Fund in each year thereafter.
   (d) Nothing in this section shall be construed as relieving any
other public entity or entity with the power of eminent domain of any
legal obligations for replacement or relocation housing arising out
of its activities.
   (e) In carrying out the purposes of this section, the agency may
exercise any or all of its powers for the construction,
rehabilitation, or preservation of affordable housing for very low,
low-, and moderate-income persons or families, including the
following:
   (1) Acquire real property or building sites subject to Section
33334.16.
   (2) Improve real property or building sites with onsite or offsite
improvements, but only if both (A) the improvements are part of the
new construction or rehabilitation of affordable housing units for
low- or moderate-income persons that are directly benefited by the
improvements , and are a reasonable and fundamental component of the
housing units, and (B) the agency requires that the units remain
available at affordable housing cost to persons and families of very
low, low, or moderate income, and are occupied by these persons and
families, for the same time period and in the same manner as provided
in subdivision (c) and paragraph (2) of subdivision (f) of Section
33334.3.
   If the newly constructed or rehabilitated housing units are part
of a larger project and the agency improves or pays for onsite or
offsite improvements pursuant to the authority in this subdivision,
the agency shall pay only a portion of the total cost of the onsite
or offsite improvement.  The maximum percentage of the total cost of
the improvement paid for by the agency shall be determined by
dividing the number of housing units that are affordable to low- or
moderate-income persons by the total number of housing units, if the
project is a housing project, or by dividing the cost of the
affordable housing units by the total cost of the project, if the
project is not a housing project.
   (3) Donate real property to private or public persons or entities.

   (4) Finance insurance premiums pursuant to Section 33136.
   (5) Construct buildings or structures.
   (6) Acquire buildings or structures.
   (7) Rehabilitate buildings or structures.
   (8) Provide subsidies to, or for the benefit of, very low income
households, as defined by Section 50105, lower income households, as
defined by Section 50079.5, or persons and families of low or
moderate income, as defined by Section 50093, to the extent those
households cannot obtain housing at affordable costs on the open
market.  Housing units available on the open market are those units
developed without direct government subsidies.
   (9) Develop plans, pay principal and interest on bonds, loans,
advances, or other indebtedness, or pay financing or carrying
charges.
   (10) Maintain the community's supply of mobilehomes.
   (11) Preserve the availability to lower income households of
affordable housing units in housing developments that are assisted or
subsidized by public entities and that are threatened with imminent
conversion to market rates.
   (f) The agency may use these funds to meet, in whole or in part,
the replacement housing provisions in Section 33413.  However,
nothing in this section shall be construed as limiting in any way the
requirements of that section.
   (g) (1) The agency may use these funds inside or outside the
project area.  The agency may only use these funds outside the
project area upon a resolution of the agency and the legislative body
that the use will be of benefit to the project.  The determination
by the agency and the legislative body shall be final and conclusive
as to the issue of benefit to the project area.  The Legislature
finds and declares that the provision of replacement housing pursuant
to Section 33413 is always of benefit to a project.  Unless the
legislative body finds, before the redevelopment plan is adopted,
that the provision of low- and moderate-income housing outside the
project area will be of benefit to the project, the project area
shall include property suitable for low- and moderate-income housing.

   (2) (A) The Contra Costa County Redevelopment Agency may use these
funds anywhere within the unincorporated territory, or within the
incorporated limits of the City of Walnut Creek on sites contiguous
to the Pleasant Hill BART Station Area Redevelopment Project area.
The agency may only use these funds outside the project area upon a
resolution of the agency and board of supervisors determining that
the use will be of benefit to the project area.  In addition, the
agency may use these funds within the incorporated limits of the City
of Walnut Creek only if the agency and the board of supervisors find
all of the following:
   (i) Both the County of Contra Costa and the City of Walnut Creek
have adopted and are implementing complete and current housing
elements of their general plans that the department has determined to
be in compliance with the requirements of Article 10.6 (commencing
with Section 65580) of Chapter 3 of Division 1 of Title 7 of the
Government Code.
   (ii) The development to be funded shall not result in any
residential displacement from the site where the development is to be
built.
   (iii) The development to be funded shall not be constructed in an
area that currently has more than 50 percent of its population
comprised of racial minorities or low-income families.
   (iv) The development to be funded shall allow construction of
affordable housing closer to a rapid transit station than could be
constructed in the unincorporated territory outside the Pleasant Hill
BART Station Area Redevelopment Project.
   (B) If the agency uses these funds within the incorporated limits
of the City of Walnut Creek, all of the following requirements shall
apply:
   (i) The funds shall be used only for the acquisition of land for,
and the design and construction of, the development of housing
containing units affordable to low- and moderate-income persons.
   (ii) If less than all the units in the development are affordable
to low- or moderate-income persons, any agency assistance shall not
exceed the amount needed to make the housing affordable to low- or
moderate-income persons.
   (iii) The units in the development that are affordable to low- or
moderate-income persons shall remain affordable for a period of at
least 55 years.
   (iv) The agency and the City of Walnut Creek shall determine, if
applicable, whether Article XXXIV of the California Constitution
permits the development.
   (3) (A) The Orange County Development Agency may use these funds
anywhere within the unincorporated territory, or within the
incorporated limits of any city within the County of Orange.  The
agency may only use these funds outside the project area upon a
resolution of the agency and board of supervisors determining that
the use will be of benefit to the project area.  In addition, the
agency may use these funds within the incorporated limits of a city
only if the agency and the board of supervisors find all of the
following:
   (i) Both the County of Orange and the city have adopted and are
implementing complete and current housing elements of their general
plans that the department has determined to be in compliance with the
requirements of Article 10.6 (commencing with Section 65580) of
Chapter 3 of Division 1 of Title 7 of the Government Code.
   (ii) The development to be funded shall not result in any
residential displacement from the site where the development is to be
built.
   (iii) The development to be funded shall be a rental housing
development containing units affordable to lower income households or
very low income households, as defined in Sections 50079.5 and
50105.
   (iv) The development is in an area with a need for additional
affordable housing.
   (v) If applicable, Article XXXIV of the California Constitution
permits the development.
   (vi) The city in which the development is to be constructed has
certified to the agency that the city's redevelopment agency, if one
exists, is not subject to sanctions pursuant to subdivision (e) of
Section 33334.12 for failure to expend or encumber a housing fund
excess surplus.
   (B) If the agency uses these funds within the incorporated limits
of a city, all of the following requirements shall apply:
   (i) The funds shall be used only for the acquisition of land for,
and the design and construction of, housing containing units
affordable to lower income households or very low income households,
as defined in Sections 50079.5 and 50105, or for the acquisition or
rehabilitation of publicly assisted rental housing that is threatened
with conversion to market rates.
   (ii) If less than all the units in the development are affordable
to lower income households or very low income households, any agency
assistance shall not exceed the amount needed to make the housing
affordable to lower income households and very low income households.

   (iii) The units in the development that are affordable to lower
income households or very low income households shall remain
affordable for a period of at least 55 years.  Compliance with this
requirement shall be ensured by the execution and recordation of
covenants and restrictions that, notwithstanding any other provision
of law, shall run with the land.
   (iv) No development shall be located in a census tract where more
than 50 percent of its population is very low income.
   (v) Assisted developments shall be located on sites suitable for
multifamily housing near public transportation.
   (vi) Developed units shall not be treated as meeting the regional
housing needs allocation under both the city's and county's housing
elements.
   (vii) The funds shall be used only for developments for which the
city in which the development will be constructed has approved the
agency's use of funds for the development or has granted land use
approvals for the development.
   (viii) The aggregate number of units assisted by the county over
each five-year period shall include at least 10 percent that are
affordable to households earning 30 percent or less of the area
median income, and at least 40 percent that are affordable to very
low income households.
   (C) The Orange County Development Agency shall make diligent
efforts to obtain the development of low- and moderate-income housing
in unincorporated areas, including in developing areas of the
county.
   (h) The Legislature finds and declares that expenditures or
obligations incurred by the agency pursuant to this section shall
constitute an indebtedness of the project.
   (i) The requirements of this section shall only apply to taxes
allocated to a redevelopment agency for which a final redevelopment
plan is adopted on or after January 1, 1977, or for any area that is
added to a project by an amendment to a redevelopment plan, which
amendment is adopted on or after the effective date of this section.
An agency may, by resolution, elect to make all or part of the
requirements of this section applicable to any redevelopment project
for which a redevelopment plan was adopted prior to January 1, 1977,
subject to any indebtedness incurred prior to the election.
   (j) This section shall remain in effect only until January 1,
2005, and as of that date is repealed, unless alter enacted statute,
that is enacted before January 1, 2005, deletes or extends that date.

  SEC. 2.  Section 33334.2 is added to the Health and Safety Code, to
read:
   33334.2.  (a) Not less than 20 percent of all taxes that are
allocated to the agency pursuant to Section 33670 shall be used by
the agency for the purposes of increasing, improving, and preserving
the community's supply of low- and moderate-income housing available
at affordable housing cost, as defined by Section 50052.5, to persons
and families of low or moderate income, as defined in Section 50093,
and very low income households, as defined in Section 50105, unless
one of the following findings is made annually by resolution:
   (1) (A) That no need exists in the community to improve, increase,
or preserve the supply of low- and moderate-income housing,
including housing for very low income households in a manner that
would benefit the project area and that this finding is consistent
with the housing element of the community's general plan required by
Article 10.6 (commencing with Section 65580) of Chapter 3 of Division
1 of Title 7 of the Government Code, including its share of the
regional housing needs of very low income households and persons and
families of low or moderate income.
   (B) This finding shall only be made if the housing element of the
community's general plan demonstrates that the community does not
have a need to improve, increase, or preserve the supply of low- and
moderate-income housing available at affordable housing cost to
persons and families of low or moderate income and to very low income
households.  This finding shall only be made if it is consistent
with the planning agency's annual report to the legislative body on
implementation of the housing element required by subdivision (b) of
Section 65400 of the Government Code.  No agency of a charter city
shall make this finding unless the planning agency submits the report
pursuant to subdivision (b) of Section 65400 of the Government Code.
  This finding shall not take effect until the agency has complied
with subdivision (b) of this section.
   (2) (A) That some stated percentage less than 20 percent of the
taxes that are allocated to the agency pursuant to Section 33670 is
sufficient to meet the housing needs of the community, including its
share of the regional housing needs of persons and families of low or
moderate income and very low income households, and that this
finding is consistent with the housing element of the community's
general plan required by Article 10.6 (commencing with Section 65580)
of Chapter 3 of Division 1 of Title 7 of the Government Code.
   (B) This finding shall only be made if the housing element of the
community's general plan demonstrates that a percentage of less than
20 percent will be sufficient to meet the community's need to
improve, increase, or preserve the supply of low- and moderate-income
housing available at affordable housing cost to persons and families
of low or moderate income and to very low income households.  This
finding shall only be made if it is consistent with the planning
agency's annual report to the legislative body on implementation of
the housing element required by subdivision (b) of Section 65400 of
the Government Code.  No agency of a charter city shall make this
finding unless the planning agency submits the report pursuant to
subdivision (b) of Section 65400 of the Government Code.  This
finding shall not take effect until the agency has complied with
subdivision (b) of this section.
   (C) For purposes of making the findings specified in this
paragraph and paragraph (1), the housing element of the general plan
of a city or county shall be current, shall have been submitted to
the Department of Housing and Community Development within the
applicable time period, and shall be in compliance with Article 10.6
(commencing with Section 65580) of Chapter 3 of Division 1 of Title 7
of the Government Code.
   (3) (A) That the community is making a substantial effort to meet
its existing and projected housing needs, including its share of the
regional housing needs, with respect to persons and families of low
and moderate income, particularly very low income households, as
identified in the housing element of the community's general plan
required by Article 10.6 (commencing with Section 65580) of Chapter 3
of Division 1 of Title 7 of the Government Code, and that this
effort, consisting of direct financial contributions of local funds
used to increase and improve the supply of housing affordable to
persons and families of low or moderate income and very low income
households, is equivalent in impact to the funds otherwise required
to be set aside pursuant to this section.  In addition to any other
local funds, these direct financial contributions may include federal
or state grants paid directly to a community and which the community
has the discretion of using for the purposes for which moneys in the
Low and Moderate Income Housing Fund may be used.  The legislative
body shall consider the need that can be reasonably foreseen because
of displacement of persons and families of low or moderate income or
very low income households from within, or adjacent to, the project
area, because of increased employment opportunities, or because of
any other direct or indirect result of implementation of the
redevelopment plan.  No finding under this subdivision may be made
until the community has provided or ensured the availability of
replacement dwelling units as defined in Section 33411.2 and until it
has complied with Article 9 (commencing with Section 33410).
   (B) In making the determination that other financial contributions
are equivalent in impact pursuant to this subdivision, the agency
shall include only those financial contributions that are directly
related to programs or activities authorized under subdivision (e) of
this section.
   (C) The authority for making the finding specified in this
paragraph shall expire on June 30, 1993, except that the expiration
shall not be deemed to impair contractual obligations to bondholders
or private entities incurred prior to May 1, 1991, and made in
reliance on this paragraph.  Agencies that make this finding after
June 30, 1993, shall show evidence that the agency entered into the
specific contractual obligation with the specific intention of making
a finding under this paragraph in order to provide sufficient
revenues to pay off the indebtedness.
   (b) Within 10 days following the making of a finding under either
paragraph (1) or (2) of subdivision (a), the agency shall send the
department a copy of the finding, including the factual information
supporting the finding and other factual information in the housing
element that demonstrates that either (1) the community does not need
to increase, improve, or preserve the supply of housing for low- and
moderate-income households, including very low income households, or
(2) a percentage less than 20 percent will be sufficient to meet the
community's need to improve, increase, and preserve the supply of
housing for low- and moderate-income households, including very low
income households.  Within 10 days following the making of a finding
under paragraph (3) of subdivision (a), the agency shall send the
department a copy of the finding, including the factual information
supporting the finding that the community is making a substantial
effort to meet its existing and projected housing needs.  Agencies
that make this finding after June 30, 1993, shall also submit
evidence to the department of its contractual obligations with
bondholders or private entities incurred prior to May 1, 1991, and
made in reliance on this finding.
   (c) In any litigation to challenge or attack a finding made under
paragraph (1), (2), or (3) of subdivision (a), the burden shall be
upon the agency to establish that the finding is supported by
substantial evidence in light of the entire record before the agency.
  If an agency is determined by a court to have knowingly
misrepresented any material facts regarding the community's share of
its regional housing need for low- and moderate-income housing,
including very low income households, or the community's production
record in meeting its share of the regional housing need pursuant to
the report required by subdivision (b) of Section 65400 of the
Government Code, the agency shall be liable for all court costs and
plaintiff's attorney's fees, and shall be required to allocate not
less than 25 percent of the agency's tax increment revenues to its
Low and Moderate Income Housing Fund in each year thereafter.
   (d) Nothing in this section shall be construed as relieving any
other public entity or entity with the power of eminent domain of any
legal obligations for replacement or relocation housing arising out
of its activities.
   (e) In carrying out the purposes of this section, the agency may
exercise any or all of its powers, including the following:
   (1) Acquire real property or building sites subject to Section
33334.16.
   (2) Improve real property or building sites with onsite or offsite
improvements, but only if either (A) the improvements are made as
part of a program which results in the new construction or
rehabilitation of affordable housing units for low- or
moderate-income persons that are directly benefited by the
improvements or (B) the agency finds that the improvements are
necessary to eliminate a specific condition that jeopardizes the
health or safety of existing low- or moderate-income residents.
   (3) Donate real property to private or public persons or entities.

   (4) Finance insurance premiums pursuant to Section 33136.
   (5) Construct buildings or structures.
   (6) Acquire buildings or structures.
   (7) Rehabilitate buildings or structures.
   (8) Provide subsidies to, or for the benefit of, very low income
households, as defined by Section 50105, lower income households, as
defined by Section 50079.5, or persons and families of low or
moderate income, as defined by Section 50093, to the extent those
households cannot obtain housing at affordable costs on the open
market.  Housing units available on the open market are those units
                                        developed without direct
government subsidies.
   (9) Develop plans, pay principal and interest on bonds, loans,
advances, or other indebtedness, or pay financing or carrying
charges.
   (10) Maintain the community's supply of mobilehomes.
   (11) Preserve the availability to lower income households of
affordable housing units in housing developments which are assisted
or subsidized by public entities and which are threatened with
imminent conversion to market rates.
   (f) The agency may use these funds to meet, in whole or in part,
the replacement housing provisions in Section 33413.  However,
nothing in this section shall be construed as limiting in any way the
requirements of that section.
   (g) (1) The agency may use these funds inside or outside the
project area.  The agency may only use these funds outside the
project area upon a resolution of the agency and the legislative body
that the use will be of benefit to the project.  The determination
by the agency and the legislative body shall be final and conclusive
as to the issue of benefit to the project area.  The Legislature
finds and declares that the provision of replacement housing pursuant
to Section 33413 is always of benefit to a project.  Unless the
legislative body finds, before the redevelopment plan is adopted,
that the provision of low- and moderate-income housing outside the
project area will be of benefit to the project, the project area
shall include property suitable for low- and moderate-income housing.

   (2) (A) The Contra Costa County Redevelopment Agency may use these
funds anywhere within the unincorporated territory, or within the
incorporated limits of the City of Walnut Creek on sites contiguous
to the Pleasant Hill BART Station Area Redevelopment Project area.
The agency may only use these funds outside the project area upon a
resolution of the agency and board of supervisors determining that
the use will be of benefit to the project area.  In addition, the
agency may use these funds within the incorporated limits of the City
of Walnut Creek only if the agency and the board of supervisors find
all of the following:
   (i) Both the County of Contra Costa and the City of Walnut Creek
have adopted and are implementing complete and current housing
elements of their general plans that the department has determined to
be in compliance with the requirements of Article 10.6 (commencing
with Section 65580) of Chapter 3 of Division 1 of Title 7 of the
Government Code.
   (ii) The development to be funded shall not result in any
residential displacement from the site where the development is to be
built.
   (iii) The development to be funded shall not be constructed in an
area that currently has more than 50 percent of its population
comprised of racial minorities or low-income families.
   (iv) The development to be funded shall allow construction of
affordable housing closer to a rapid transit station than could be
constructed in the unincorporated territory outside the Pleasant Hill
BART Station Area Redevelopment Project.
   (B) If the agency uses these funds within the incorporated limits
of the City of Walnut Creek, all of the following requirements shall
apply:
   (i) The funds shall be used only for the acquisition of land for,
and the design and construction of, the development of housing
containing units affordable to low- and moderate-income persons.
   (ii) If less than all the units in the development are affordable
to low- or moderate-income persons, any agency assistance shall not
exceed the amount needed to make the housing affordable to low- or
moderate-income persons.
   (iii) The units in the development that are affordable to low- or
moderate-income persons shall remain affordable for a period of at
least 55 years.
   (iv) The agency and the City of Walnut Creek shall determine, if
applicable, whether Article XXXIV of the California Constitution
permits the development.
   (h) The Legislature finds and declares that expenditures or
obligations incurred by the agency pursuant to this section shall
constitute an indebtedness of the project.
   (i) The requirements of this section shall only apply to taxes
allocated to a redevelopment agency for which a final redevelopment
plan is adopted on or after January 1, 1977, or for any area that is
added to a project by an amendment to a redevelopment plan, which
amendment is adopted on or after the effective date of this section.
An agency may, by resolution, elect to make all or part of the
requirements of this section applicable to any redevelopment project
for which a redevelopment plan was adopted prior to January 1, 1977,
subject to any indebtedness incurred prior to the election.
   (j) This section shall become operative on January 1, 2005.
  SEC. 3.  Section 33334.22 is added to the Health and Safety Code,
to read:
   33334.22.  (a) The Legislature finds and declares that in order to
avoid serious economic hardships and accompanying blight, it is
necessary to enact this section, which shall apply only within Santa
Cruz County, and which is enacted for the purpose of providing
housing assistance to very low, lower, and moderate-income
households.
   (b) Notwithstanding Section 50052.5, any redevelopment agency
within Santa Cruz County may make assistance available from its low-
and moderate-income housing fund directly to a homebuyer for the
purchase of an owner-occupied home, and for purposes of that
assistance and this section, "affordable housing cost" shall not
exceed the following:
   (1) For very low income households, the product of 40 percent
times 50 percent of the area median income adjusted for family size
appropriate for the unit.
   (2) For lower income households whose gross incomes exceed the
maximum income for very low income households and do not exceed 70
percent of the area median income adjusted for family size, the
product of 40 percent times 70 percent of the area median income
adjusted for family size appropriate for the unit.  In addition, for
any lower income household that has a gross income that equals or
exceeds 70 percent of the area median income adjusted for family
size, it shall be optional for any state or local funding agency to
require that the affordable housing cost not exceed 40 percent of the
gross income of the household.
   (3) For moderate income households, affordable housing cost shall
not exceed the product of 40 percent times 110 percent of the area
median income adjusted for family size appropriate for the unit.  In
addition, for any moderate-income household that has a gross income
that exceeds 110 percent of the area median income adjusted for
family size, it shall be optional for any state of local funding
agency to require that affordable housing cost not exceed 40 percent
of the gross income of the household.
   (c) Any agency in Santa Cruz County that provides assistance
pursuant to this section shall include in the annual report to the
Controller, pursuant to Sections 33080 and 33080.1, all of the
following information:
   (1) The sales prices of homes purchased with assistance from the
agency's low and moderate income housing fund for each year from 2000
to 2004, inclusive.
   (2) The sales prices of homes purchased and rehabilitated with
assistance from the agency's low and moderate income housing fund for
each year from 2000 to 2004, inclusive.
   (3) The incomes, and percentage of income paid for housing costs,
of all households that purchased, and that purchased and
rehabilitated, homes with assistance from the agency's low and
moderate income housing fund for each year from 2000 to 2004,
inclusive.
   (d) Except as provided in subdivision (b), all provisions of
Section 50052.5, including any definitions, requirements, standards,
and regulations adopted to implement those provisions, shall apply to
this section.
   (e) This section shall remain in effect only until January 1,
2005, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2005, deletes or extends
that date.
  SEC. 4.  The Controller shall furnish a compilation of the
information described in subdivision (c) of Section 33334.22 of the
Health and Safety Code to the Legislature and the Director of Housing
and Community Development no later than April 1, 2005.
  SEC. 5.  (a) Section 1.3 of this bill incorporates amendments to
Section 33334.2 of the Health and Safety Code proposed by both this
bill and AB 637.  It shall only become operative if (1) both bills
are enacted and become effective on or before January 1, 2002, (2)
each bill amends Section 33334.2 of the Health and Safety Code, (3)
AB 661 is not enacted or as enacted does not amend that section, and
(4) this bill is enacted after AB 637, in which case Sections 1, 1.5,
and 1.7 of this bill shall not become operative.
   (b) Section 1.5 of this bill incorporates amendments to Section
33334.2 of the Health and Safety Code proposed by both this bill and
AB 661.  It shall only become operative if (1) both bills are enacted
and become effective on or before January 1, 2002, (2) each bill
amends Section 33334.2 of the Health and Safety Code, (3) AB 637 is
not enacted or as enacted does not amend that section, and (4) this
bill is enacted after AB 661, in which case Sections 1, 1.3, and 1.7
of this bill shall not become operative.
   (c) Section 1.7 of this bill incorporates amendments to Section
33334.2 of the Health and Safety Code proposed by this bill, AB 637,
and AB 661.  It shall only become operative if (1) all three bills
are enacted and become effective on or before January 1, 2002, (2)
all three bills amend Section 33334.2 of the Health and Safety Code,
and (3) this bill is enacted after AB 637 and AB 661, in which case
Sections 1, 1.3, and 1.5 of this bill shall not become operative.