BILL NUMBER: AB 637	CHAPTERED  10/11/01

	CHAPTER  738
	FILED WITH SECRETARY OF STATE  OCTOBER 11, 2001
	APPROVED BY GOVERNOR  OCTOBER 10, 2001
	PASSED THE SENATE  SEPTEMBER 12, 2001
	PASSED THE ASSEMBLY  SEPTEMBER 12, 2001
	AMENDED IN SENATE  SEPTEMBER 6, 2001
	AMENDED IN SENATE  AUGUST 21, 2001

INTRODUCED BY   Assembly Member Lowenthal

                        FEBRUARY 22, 2001

   An act to amend Sections 33334.2, 33334.3, 33334.4, and 33490 of,
to amend, repeal, and add Section 33413 of, and to add Section
33411.5 to, the Health and Safety Code, relating to redevelopment.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 637, Lowenthal.  Redevelopment.
   (1) The existing Community Redevelopment Law requires
redevelopment agencies to use not less than 20% of taxes allocated to
the agency for low-and moderate-income housing, as specified.  That
law prescribes how these funds may be used.  New or substantially
rehabilitated housing units developed or otherwise assisted with
moneys from the existing Low and Moderate Income Housing Fund are
required to remain available for prescribed periods of time.
   This bill would require this housing to be occupied by persons and
families of very low, low, or moderate income.  The bill would also
extend the time periods for the housing units to be available to and
occupied by persons and families of low or moderate income and very
low income households.  The bill would prohibit funds from the Low
and Moderate Income Housing Fund from being used to the extent that
other reasonable means of private or commercial financing the new or
substantially rehabilitated units at the same level of affordability
and quantity are reasonably available to the agency or to the owner
of the units.
   (2) Existing law contains findings and declarations that it is the
policy of each redevelopment agency to expend over the duration of
the redevelopment plan, the moneys in the Low and Moderate Income
Housing Fund to assist housing for persons of low and very low
income.
   This bill would require these moneys to be expended over the
duration of the redevelopment implementation plan, as prescribed.
The bill would also require, whenever all or a portion of a
redevelopment project is developed with very low, low-, or
moderate-income housing units developed with agency assistance or
pursuant to the requirements described in (3) below, that the
redevelopment agency require that this housing be made available for
rent or purchase by low- or moderate-income persons or families
displaced by the housing project.  The bill would require the
implementation plan to contain additional information, as prescribed,
relating to the expenditure of Low and Moderate Income Housing Fund.

   (3) The Community Redevelopment Law, until January 1, 2002,
requires that when dwelling units housing persons and families of low
or moderate income are destroyed or removed from the housing market
as part of a redevelopment project, an equal number of replacement
units shall be rehabilitated, developed, or constructed, as
specified.  That law sets forth numerous duties of the redevelopment
agency with respect to these replacement units, including the
responsibilities of the agency regarding long-term affordability
standards, and contains alternate provisions, to become effective on
January 1, 2002, relating to low- and moderate-income replacement
units that do not expressly provide for certain options available
under the provisions in effect until January 1, 2002, including
acquiring housing outside the project area under certain conditions,
aggregating new or substantially rehabilitated dwelling units in one
or more project areas, acquiring certain long-term affordability
covenants, and permitting certain sales of owner-occupied low- and
moderate-income units.
   This bill would, among other things, incorporate within those
provisions that are to become operative on January 1, 2002, the
provisions that are to be repealed on January 1, 2002.  It would also
revise the definition of substantially rehabilitated dwelling units
and the provisions relating to affordability covenants for purposes
of these provisions, effective January 1, 2002, and would further
revise those provisions on January 1, 2006, as specified.
   (4) This bill would incorporate additional changes in Section
33334.2 of the Health and Safety Code proposed by AB 637, AB 661, and
SB 459, to be operative if this bill and one or more of the other
bills are enacted and become effective on or before January 1, 2002,
and this bill is enacted last.
   This bill also would incorporate additional changes in Section
33413 of the Health and Safety Code proposed by SB 211, to be
operative if SB 211 and this bill are both 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.  The Legislature finds and declares that provisions of
the Community Redevelopment Law (Part 1 (commencing with Section
33000) of Division 24 of the Health and Safety Code) that have
required housing units to be available at affordable housing cost to
persons and families of very low, low, or moderate income have also
required these units to be occupied by these same persons and
families.  Thus, the Legislature finds and declares that the addition
of the phrase "occupied by" within this act is declaratory of
existing law.
  SEC. 2.  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 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, 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 which 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 the provisions of 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 which 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 the provisions of 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 of Housing and Community Development 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 of
Housing and Community Development 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 of Housing and
Community Development 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 which 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.
  SEC. 2.1.  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 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, 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 which 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 the provisions of 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 of Housing and
Community Development 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 which 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.
  SEC. 2.2.  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. 2.3.  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 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 a later enacted
statute, that is enacted before January 1, 2005, deletes or extends
that date.
  SEC. 2.4.  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, 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 the provisions of 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 of Housing and Community Development 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 of
Housing and Community Development 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 of Housing and
Community Development 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. 2.5.  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, 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 the provisions of 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 of Housing and
Community Development 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 become operative on January 1, 2005.
  SEC. 3.  Section 33334.3 of the Health and Safety Code is amended
to read:
   33334.3.  (a) The funds that are required by Section 33334.2 or
33334.6 to be used for the purposes of increasing and improving the
community's supply of low- and moderate-income housing shall be held
in a separate Low and Moderate Income Housing Fund until used.
   (b) Any interest earned by the Low and Moderate Income Housing
Fund and any repayments or other income to the agency for loans,
advances, or grants, of any kind from the Low and Moderate Income
Housing Fund, shall accrue to and be deposited in, the fund and may
only be used in the manner prescribed for the Low and Moderate Income
Housing Fund.
   (c) The moneys in the Low and Moderate Income Housing Fund shall
be used to increase, improve, and preserve the supply of low- and
moderate-income housing within the territorial jurisdiction of the
agency.
   (d) It is the intent of the Legislature that the Low and Moderate
Income Housing Fund be used to the maximum extent possible to defray
the costs of production, improvement, and preservation of low- and
moderate-income housing and that the amount of money spent for
planning and general administrative activities associated with the
development, improvement, and preservation of that housing not be
disproportionate to the amount actually spent for the costs of
production, improvement, or preservation of that housing.  The agency
shall determine annually that the planning and administrative
expenses are necessary for the production, improvement, or
preservation of low- and moderate-income housing.
   (e) (1) Planning and general administrative costs which may be
paid with moneys from the Low and Moderate Income Housing Fund are
those expenses incurred by the agency which are directly related to
the programs and activities authorized under subdivision (e) of
Section 33334.2 and are limited to the following:
   (A) Costs incurred for salaries, wages, and related costs of the
agency's staff or for services provided through interagency
agreements, and agreements with contractors, including usual indirect
costs related thereto.
   (B) Costs incurred by a nonprofit corporation which are not
directly attributable to a specific project.
   (2) Legal, architectural, and engineering costs and other
salaries, wages, and costs directly related to the planning and
execution of a specific project which are authorized under
subdivision (e) of Section 33334.2 and which are incurred by a
nonprofit housing sponsor are not planning and administrative costs
for the purposes of this section, but are instead project costs.
   (f) (1) The requirements of this subdivision apply to all new or
substantially rehabilitated housing units developed or otherwise
assisted, with moneys from the Low and Moderate Income Housing Fund,
pursuant to an agreement approved by an agency on or after January 1,
1988.  Except to the extent a longer period of time may be required
by other provisions of law, the agency shall require that housing
units subject to this subdivision shall remain available at
affordable housing costs to, and are occupied by, persons and
families of low or moderate income and very low income households for
the longest feasible time, but for not less than the following
periods of time:
   (A) Fifty-five years for rental units.  However, the agency may
replace rental units with equally affordable and comparable rental
units in another location within the community if (A) the replacement
units are available for occupancy prior to the displacement of any
persons and families of low or moderate income residing in the units
to be replaced and (B) the comparable replacement units are not
developed with moneys from the Low and Moderate Income Housing Fund.

   (B) Forty-five years for owner-occupied units.  However, the
agency may permit sales of owner-occupied units prior to the
expiration of the 45-year period for a price in excess of that
otherwise permitted under this subdivision pursuant to an adopted
program which protects the agency's investment of moneys from the Low
and Moderate Income Housing Fund, including, but not limited to, an
equity sharing program which establishes a schedule of equity sharing
that permits retention by the seller of a portion of those excess
proceeds based on the length of occupancy.  The remainder of the
excess proceeds of the sale shall be allocated to the agency and
deposited in the Low and Moderate Income Housing Fund.  Only the
units originally assisted by the agency shall be counted towards the
agency's obligations under Section 33413.
   (C) If land on which those dwelling units are located is deleted
from the project area, the agency shall continue to require that
those units remain affordable as specified in this subdivision.
   (2) The agency shall require the recording in the office of the
county recorder of covenants or restrictions implementing this
subdivision for each parcel or unit of real property subject to this
subdivision.  Notwithstanding any other provision of law, the
covenants or restrictions shall run with the land and shall be
enforceable, against the original owner and successors in interest,
by the agency or the community.
   (g) "Housing," as used in this section, includes residential
hotels, as defined in subdivision (k) of Section 37912.  The
definitions of "lower income households" and "very low income
households" in Sections 50079.5 and 50105 shall apply to this
section.  "Longest feasible time," as used in this section, includes,
but is not limited to, unlimited duration.
   (h) "Increasing, improving, and preserving the community's supply
of low- and moderate-income housing," as used in this section and in
Section 33334.2, includes the preservation of rental housing units
assisted by federal, state, or local government on the condition that
units remain affordable to, and occupied by, low- and
moderate-income households, including very low income households, for
a specified period of time, beyond the date the subsidies and use
restrictions could be terminated and the assisted housing units
converted to market rate rentals.  In preserving these units the
agency shall require the units remain affordable to, and occupied by,
persons and families of low- and moderate-income and very low income
households for the longest feasible time.  However, the agency may
replace rental units with equally affordable and comparable rental
units in another location within the community if (1) the replacement
units in another location are available for occupancy prior to the
displacement of any persons and families of low or moderate income
residing in the units to be replaced and (2) the comparable
replacement units are not developed with moneys from the Low and
Moderate Income Housing Fund.
   (i) Agencies that have more than one project area may satisfy the
requirements of Sections 33334.2 and 33334.6 and of this section by
allocating, in any fiscal year, less than 20 percent in one project
area, if the difference between the amount allocated and the 20
percent required is instead allocated, in that same fiscal year, to
the Low and Moderate Income Housing Fund from tax increment revenues
from other project areas.  Prior to allocating funds pursuant to this
subdivision, the agency shall make the finding required by
subdivision (g) of Section 33334.2.
   (j) Funds from the Low and Moderate Income Housing Fund shall not
be used to the extent that other reasonable means of private or
commercial financing of the new or substantially rehabilitated units
at the same level of affordability and quantity are reasonably
available to the agency or to the owner of the units.  Prior to the
expenditure of funds from the Low and Moderate Income Housing Fund
for new or substantially rehabilitated housing units, where those
funds will exceed 50 percent of the cost of producing the units, the
agency shall find, based on substantial evidence, that the use of the
funds is necessary because the agency or owner of the units has made
a good faith attempt but been unable to obtain commercial or private
means of financing the units at the same level of affordability and
quantity.
  SEC. 4.  Section 33334.4 of the Health and Safety Code is amended
to read:
   33334.4.  (a) Except as specified in subdivision (b), each agency
shall expend, over the duration of the redevelopment implementation
plan, the moneys in the Low and Moderate Income Housing Fund to
assist housing for persons of low income and housing for persons of
very low income in at least the same proportion as the total number
of housing units needed for each of those income groups bears to the
total number of units needed for persons of moderate, low, and very
low income within the community, as those needs have been determined
for the community pursuant to Section 65584 of the Government Code.
In determining compliance with this obligation, the agency may adjust
the proportion by subtracting from the need identified for each
income category, the number of units for persons of that income
category that are newly constructed over the duration of the
implementation plan with other locally controlled government
assistance and without agency assistance and that are required to be
affordable to, and occupied by, persons of the income category for at
least 55 years for rental housing and 45 years for ownership
housing, except that in making an adjustment the agency may not
subtract units developed pursuant to a replacement housing obligation
under state or federal law.  Each agency shall expend, over the
duration of each redevelopment implementation plan, the moneys in the
Low and Moderate Income Housing Fund to assist housing that is
available to families with children in at least the same proportion
as the population under age 65 years bears to the total population of
the community as reported in the most recent census of the United
States Census Bureau.
   (b) An agency that has deposited in the Low and Moderate Income
Housing Fund over the first five years of the period of an
implementation plan an aggregate that is less than two million
dollars ($2,000,000) shall have an extra five years to meet the
requirements of this section.
  SEC. 5.  Section 33411.5 is added to the Health and Safety Code, to
read:
   33411.5.  Whenever all or any portion of a redevelopment project
is developed with very low, low-, or moderate-income housing units,
and whenever any very low, low-, or moderate-income housing units are
developed with any agency assistance or pursuant to Section 33413,
the agency shall require by contract or other appropriate means that
this housing be made available for rent or purchase to the persons
and families of low or moderate income displaced by the redevelopment
project.  These persons and families shall be given priority in
renting or buying that housing.  However, failure to give that
priority shall not affect the validity of the title to real property.
  The agency shall keep a list of persons and families of low or
moderate income displaced by the redevelopment project who are to be
given priority and may establish reasonable rules for determining the
order or priority on the list.
  SEC. 6.  Section 33413 of the Health and Safety Code, as amended by
Section 3 of Chapter 756 of the Statutes of 2000, is amended to
read:
   33413.  (a) Whenever dwelling units housing persons and families
of low or moderate income are destroyed or removed from the low- and
moderate-income housing market as part of a redevelopment project
that is subject to a written agreement with the agency or where
financial assistance has been provided by the agency, the agency
shall, within four years of the destruction or removal, rehabilitate,
develop, or construct, or cause to be rehabilitated, developed, or
constructed, for rental or sale to persons and families of low or
moderate income, an equal number of replacement dwelling units that
have an equal or greater number of bedrooms as those destroyed or
removed units at affordable housing costs within the territorial
jurisdiction of the agency.  When dwelling units are destroyed or
removed after September 1, 1989, 75 percent of the replacement
dwelling units shall replace dwelling units available at affordable
housing cost in the same income level of very low income households,
lower income households, and persons and families of low and moderate
income, as the persons displaced from those destroyed or removed
units.  When dwelling units are destroyed or removed on or after
January 1, 2002, 100 percent of the replacement dwelling units shall
be available at affordable housing cost to persons in the same or a
lower income category (low, very low, or moderate), as the persons
displaced from those destroyed or removed units.
   (b) (1) At least 30 percent of all new and substantially
rehabilitated dwelling units developed by an agency shall be
available at affordable housing cost to persons and families of low
or moderate income and shall be occupied by these persons and
families. Not less than 50 percent of the dwelling units required to
be available at affordable housing cost to persons and families of
low or moderate income shall be available at affordable housing cost
to, and occupied by, very low income households.
   (2) (A) (i) At least 15 percent of all new and substantially
rehabilitated dwelling units developed within a project area under
the jurisdiction of an agency by public or private entities or
persons other than the agency shall be available at affordable
housing cost to persons and families of low or moderate income and
shall be occupied by these persons and families.  Not less than 40
percent of the dwelling units required to be available at affordable
housing cost to persons and families of low or moderate income shall
be available at affordable housing cost to very low income households
and shall be occupied by these persons and families.
   (ii) To satisfy this paragraph, in whole or in part, the agency
may cause, by regulation or agreement, to be available, at affordable
housing costs, to persons and families of low or moderate income or
to very low income households, as applicable, two units outside a
project area for each unit that otherwise would have been required to
be available inside a project area.
   (iii) On or after January 1, 2002, as used in this paragraph and
in paragraph (1), "substantially rehabilitated dwelling units" means
substantially rehabilitated, with agency assistance, multifamily
rented dwelling units with three or more units, or substantially
rehabilitated, with agency assistance, single-family dwelling units
with one or two units.  Prior to January 1, 2002, "substantially
rehabilitated dwelling units" shall mean substantially rehabilitated
multifamily rented dwelling units with three or more units or
substantially rehabilitated, with agency assistance, single-family
dwelling units with one or two units.
   (iv) As used in this paragraph and in paragraph (1), "substantial
rehabilitation" means rehabilitation, the value of which constitutes
25 percent of the after rehabilitation value of the dwelling,
inclusive of the land value.
   (v) To satisfy this paragraph, the agency may aggregate new or
substantially rehabilitated dwelling units in one or more project
areas, if the agency finds, based on substantial evidence, after a
public hearing, that the aggregation will not cause or exacerbate
racial, ethnic, or economic segregation.
   (B) To satisfy the requirements of paragraph (1) and subparagraph
(A), the agency may purchase, or otherwise acquire or cause by
regulation or agreement the purchase or other acquisition of,
long-term affordability covenants on multifamily units that restrict
the cost of renting or purchasing those units that either:  (i) are
not presently available at affordable housing cost to persons and
families of low or very low income households, as applicable; or (ii)
are units that are presently available at affordable housing cost to
this same group of persons or families, but are units that the
agency finds, based upon substantial evidence, after a public
hearing, cannot reasonably be expected to remain affordable to this
same group of persons or families.
   (C) To satisfy the requirements of paragraph (1) and subparagraph
(A), the long-term affordability covenants purchased or otherwise
acquired pursuant to subparagraph (B) shall be required to be
maintained on dwelling units at affordable housing cost to, and
occupied by, persons and families of low or very low income, for the
longest feasible time but not less than 55 years for rental units and
45 years for owner-occupied units.  Not more than 50 percent of the
units made available pursuant to paragraph (1) and subparagraph (A)
may be assisted through the purchase or acquisition of long-term
affordability covenants pursuant to subparagraph (B).  Not less than
50 percent of the units made available through the purchase or
acquisition of long-term affordability covenants pursuant to
subparagraph (B) shall be available at affordable housing cost to,
and occupied by, very low income households.
   (3) The requirements of this subdivision shall apply independently
of the requirements of subdivision (a).  The requirements of this
subdivision shall apply, in the aggregate, to housing made available
pursuant to paragraphs (1) and (2), respectively, and not to each
individual case of rehabilitation, development, or construction of
dwelling units, unless an agency determines otherwise.
   (4) Each redevelopment agency, as part of the implementation plan
required by Section 33490, shall adopt a plan to comply with the
requirements of this subdivision for each project area.  The plan
shall be consistent with, and may be included within, the community's
housing element.  The plan shall be reviewed and, if necessary,
amended at least every five years in conjunction with either the
housing element cycle or the plan implementation cycle.  The plan
shall ensure that the requirements of this subdivision are met every
10 years.  If the requirements of this subdivision are not met by the
end of each 10-year period, the agency shall meet these goals on an
annual basis until the requirements for the 10-year period are met.
If the agency has exceeded the requirements within the 10-year
period, the agency may count the units that exceed the requirement in
order to meet the requirements during the next 10-year period.  The
plan shall contain the contents required by paragraphs (2) and (3) of
subdivision (a) of Section 33490.
   (c) The agency shall require that the aggregate number of
replacement dwelling units and other dwelling units rehabilitated,
developed, constructed, or price-restricted pursuant to subdivision
(a) or (b) remain available at affordable housing cost to persons and
families of low-income, moderate-income, and very low income
households, respectively, and remain occupied by those persons and
families for the longest feasible time, but for not less than 55
years for rental units and 45 years for home ownership units, except
for the following:
   (1) The agency may permit sales of owner-occupied units prior to
the expiration of the 45-year period established by the agency for a
price in excess of that otherwise permitted under this subdivision
pursuant to an adopted program that protects the agency's investment
of moneys from the Low and Moderate Income Housing Fund, including,
but not limited to, an equity sharing program that establishes a
schedule of equity sharing that permits retention by the seller of a
portion of those excess proceeds, based on the length of occupancy.
The remainder of the excess proceeds of the sale shall be allocated
to the agency, and deposited into the Low and Moderate Income Housing
Fund.  The agency shall, within three years from the date of sale of
units pursuant to this subparagraph, expend funds to make affordable
an equal number of units at the same income level as units sold
pursuant to this subparagraph.
   (2) The requirements of this subdivision shall be made enforceable
in the same manner as provided in paragraph (2) of subdivision (f)
of Section 33334.3.
   (3) If land on which those dwelling units are located is deleted
from the project area, the agency shall continue to require that
those units remain affordable as specified in this subdivision.
   (d) (1) This section applies only to redevelopment projects for
which a final redevelopment plan is adopted pursuant to Article 5
(commencing with Section 33360) on or after January 1, 1976, and to
areas that are added to a project area by amendment to a final
redevelopment plan adopted on or after January 1, 1976.  In addition,
subdivision (a) shall apply to any other redevelopment project with
respect to dwelling units destroyed or removed from the low- and
moderate-income housing market on or after January 1, 1996,
irrespective of the date of adoption of a final redevelopment plan or
an amendment to a final redevelopment plan adding areas to a project
area.  Additionally, any agency may, by resolution, elect to make
all or part of the requirements of this section applicable to any
redevelopment project of the agency for which the final redevelopment
plan was adopted prior to January 1, 1976.
   (2) An agency may, by resolution, elect to require that whenever
dwelling units housing persons or families of low or moderate income
are destroyed or removed from the low- and moderate-income housing
market as part of a redevelopment project, the agency shall replace
each dwelling unit with up to three replacement dwelling units
pursuant to subdivision (a).
   (e) Except as otherwise authorized by law, this section does not
authorize an agency to operate a rental housing development beyond
the period reasonably necessary to sell or lease the housing
development.
   (f) Notwithstanding subdivision (a), the agency may replace
destroyed or removed dwelling units with a fewer number of
replacement dwelling units if the replacement dwelling units meet
both of the following criteria:
   (1) The total number of bedrooms in the replacement dwelling units
equals or exceeds the number of bedrooms in the destroyed or removed
units.  Destroyed or removed units having one or no bedroom are
deemed for this purpose to have one bedroom.
   (2) The replacement units are affordable to and occupied by the
same income level of households as the destroyed or removed units.
   (g) "Longest feasible time," as used in this section, includes,
but is not limited to, unlimited duration.
   (h) This section shall remain in effect only until January 1,
2006, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2006, deletes or extends
that date.
  SEC. 6.5.  Section 33413 of the Health and Safety Code, as amended
by Section 3 of Chapter 756 of the Statutes of 2000, is amended to
read:
   33413.  (a) Whenever dwelling units housing persons and families
of low or moderate income are destroyed or removed from the low- and
moderate-income housing market as part of a redevelopment project
that is subject to a written agreement with the agency or where
financial assistance has been provided by the agency, the agency
shall, within four years of the destruction or removal, rehabilitate,
develop, or construct, or cause to be rehabilitated, developed, or
constructed, for rental or sale to persons and families of low or
moderate income, an equal number of replacement dwelling units that
have an equal or greater number of bedrooms as those destroyed or
removed units at affordable housing costs within the territorial
jurisdiction of the agency.  When dwelling units are destroyed or
removed after September 1, 1989, 75 percent of the replacement
dwelling units shall replace dwelling units available at affordable
housing cost in the same income level of very low income households,
lower income households, and persons and families of low and moderate
income, as the persons displaced from those destroyed or removed
units.  When dwelling units are destroyed or removed on or after
January 1, 2002, 100 percent of the replacement dwelling units shall
be available at affordable housing cost to persons in the same or a
lower income category (low, very low, or moderate), as the persons
displaced from those destroyed or removed units.
   (b) (1) Prior to the time limit on the effectiveness of the
redevelopment plan established pursuant to Sections 33333.2 and
33333.6, at least 30 percent of all new and substantially
rehabilitated dwelling units developed by an agency shall be
available at affordable housing cost to persons and families of low
or moderate income and shall be occupied by these persons and
families.  Not less than 50 percent of the dwelling units required to
be available at affordable housing cost to persons and families of
low or moderate income shall be available at affordable housing cost
to, and occupied by, very low income households.
                                 (2) (A) (i) Prior to the time limit
on the effectiveness of the redevelopment plan established pursuant
to Section 33333.2 and 33333.6, at least 15 percent of all new and
substantially rehabilitated dwelling units developed within a project
area under the jurisdiction of an agency by public or private
entities or persons other than the agency shall be available at
affordable housing cost to persons and families of low or moderate
income and shall be occupied by these persons and families.  Not less
than 40 percent of the dwelling units required to be available at
affordable housing cost to persons and families of low or moderate
income shall be available at affordable housing cost to very low
income households and shall be occupied by these persons and
families.
   (ii) To satisfy this paragraph, in whole or in part, the agency
may cause, by regulation or agreement, to be available, at affordable
housing costs, to persons and families of low or moderate income or
to very low income households, as applicable, two units outside a
project area for each unit that otherwise would have been required to
be available inside a project area.
   (iii) On or after January 1, 2002, as used in this paragraph and
in paragraph (l), "substantially rehabilitated dwelling units" means
substantially rehabilitated, with agency assistance, multifamily
rented dwelling units with three or more units, or substantially
rehabilitated, with agency assistance, single-family dwelling units
with one or two units.  Prior to January 1, 2002, "substantially
rehabilitated dwelling units" shall mean substantially rehabilitated
multifamily rented dwelling units with three or more units or
substantially rehabilitated, with agency assistance, single-family
dwelling units with one or two units.
   (iv) As used in this paragraph and in paragraph (1), "substantial
rehabilitation" means rehabilitation, the value of which constitutes
25 percent of the after rehabilitation value of the dwelling,
inclusive of the land value.
   (v) To satisfy this paragraph, the agency may aggregate new or
substantially rehabilitated dwelling units in one or more project
areas, if the agency finds, based on substantial evidence, after a
public hearing, that the aggregation will not cause or exacerbate
racial, ethnic, or economic segregation.
   (B) To satisfy the requirements of paragraph (1) and subparagraph
(A), the agency may purchase, or otherwise acquire or cause by
regulation or agreement the purchase or other acquisition of,
long-term affordability covenants on multifamily units that restrict
the cost of renting or purchasing those units that either:  (i) are
not presently available at affordable housing cost to persons and
families of low or very low income households, as applicable; or (ii)
are units that are presently available at affordable housing cost to
this same group of persons or families, but are units that the
agency finds, based upon substantial evidence, after a public
hearing, cannot reasonably be expected to remain affordable to this
same group of persons or families.
   (C) To satisfy the requirements of paragraph (1) and subparagraph
(A), the long-term affordability covenants purchased or otherwise
acquired pursuant to subparagraph (B) shall be required to be
maintained on dwelling units at affordable housing cost to, and
occupied by, persons and families of low or very low income, for the
longest feasible time but not less than 55 years for rental units and
45 years for owner-occupied units.  Not more than 50 percent of the
units made available pursuant to paragraph (1) and subparagraph (A)
may be assisted through the purchase or acquisition of long-term
affordability covenants pursuant to subparagraph (B).  Not less than
50 percent of the units made available through the purchase or
acquisition of long-term affordability covenants pursuant to
subparagraph (B) shall be available at affordable housing cost to,
and occupied by, very low income households.
   (3) The requirements of this subdivision shall apply independently
of the requirements of subdivision (a).  The requirements of this
subdivision shall apply, in the aggregate, to housing made available
pursuant to paragraphs (1) and (2), respectively, and not to each
individual case of rehabilitation, development, or construction of
dwelling units, unless an agency determines otherwise.
   (4) Each redevelopment agency, as part of the implementation plan
required by Section 33490, shall adopt a plan to comply with the
requirements of this subdivision for each project area.  The plan
shall be consistent with, and may be included within, the community's
housing element.  The plan shall be reviewed and, if necessary,
amended at least every five years in conjunction with either the
housing element cycle or the plan implementation cycle.  The plan
shall ensure that the requirements of this subdivision are met every
10 years.  If the requirements of this subdivision are not met by the
end of each 10-year period, the agency shall meet these goals on an
annual basis until the requirements for the 10-year period are met.
If the agency has exceeded the requirements within the 10-year
period, the agency may count the units that exceed the requirement in
order to meet the requirements during the next 10-year period.  The
plan shall contain the contents required by paragraphs (2) and (3) of
subdivision (a) of Section 33490.
   (c) The agency shall require that the aggregate number of
replacement dwelling units and other dwelling units rehabilitated,
developed, constructed, or price-restricted pursuant to subdivision
(a) or (b) remain available at affordable housing cost to persons and
families of low-income, moderate-income, and very low income
households, respectively, and remain occupied by those persons and
families for the longest feasible time, but for not less than 55
years for rental units and 45 years for home ownership units, except
for the following:
   (1) The agency may permit sales of owner-occupied units prior to
the expiration of the 45-year period established by the agency for a
price in excess of that otherwise permitted under this subdivision
pursuant to an adopted program that protects the agency's investment
of moneys from the Low and Moderate Income Housing Fund, including,
but not limited to, an equity sharing program that establishes a
schedule of equity sharing that permits retention by the seller of a
portion of those excess proceeds, based on the length of occupancy.
The remainder of the excess proceeds of the sale shall be allocated
to the agency, and deposited into the Low and Moderate Income Housing
Fund.  The agency shall, within three years from the date of sale of
units pursuant to this subparagraph, expend funds to make affordable
an equal number of units at the same income level as units sold
pursuant to this subparagraph.
   (2) The requirements of this subdivision shall be made enforceable
in the same manner as provided in paragraph (2) of subdivision (f)
of Section 33334.3.
   (3) If land on which those dwelling units are located is deleted
from the project area, the agency shall continue to require that
those units remain affordable as specified in this subdivision.
   (d) (1) This section applies only to redevelopment projects for
which a final redevelopment plan is adopted pursuant to Article 5
(commencing with Section 33360) on or after January 1, 1976, and to
areas that are added to a project area by amendment to a final
redevelopment plan adopted on or after January 1, 1976.  In addition,
subdivision (a) shall apply to any other redevelopment project with
respect to dwelling units destroyed or removed from the low- and
moderate-income housing market on or after January 1, 1996,
irrespective of the date of adoption of a final redevelopment plan or
an amendment to a final redevelopment plan adding areas to a project
area.  Additionally, any agency may, by resolution, elect to make
all or part of the requirements of this section applicable to any
redevelopment project of the agency for which the final redevelopment
plan was adopted prior to January 1, 1976.  In addition, subdivision
(b) shall apply to redevelopment plans adopted prior to January 1,
1976, for which an amendment is adopted pursuant to Section 33333.10,
except that subdivision (b) shall apply to those redevelopment plans
prospectively only so that the requirements of subdivision (b) shall
apply only to new and substantially rehabilitated dwelling units for
which the building permits are issued on or after the date that the
ordinance adopting the amendment pursuant to Section 33333.10 becomes
effective.
   (2) An agency may, by resolution, elect to require that whenever
dwelling units housing persons or families of low or moderate income
are destroyed or removed from the low- and moderate-income housing
market as part of a redevelopment project, the agency shall replace
each dwelling unit with up to three replacement dwelling units
pursuant to subdivision (a).
   (e) Except as otherwise authorized by law, this section does not
authorize an agency to operate a rental housing development beyond
the period reasonably necessary to sell or lease the housing
development.
   (f) Notwithstanding subdivision (a), the agency may replace
destroyed or removed dwelling units with a fewer number of
replacement dwelling units if the replacement dwelling units meet
both of the following criteria:
   (1) The total number of bedrooms in the replacement dwelling units
equals or exceeds the number of bedrooms in the destroyed or removed
units.  Destroyed or removed units having one or no bedroom are
deemed for this purpose to have one bedroom.
   (2) The replacement units are affordable to and occupied by the
same income level of households as the destroyed or removed units.
   (g) "Longest feasible time," as used in this section, includes,
but is not limited to, unlimited duration.
   (h) This section shall remain in effect only until January 1,
2006, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2006, deletes or extends
that date.
  SEC. 7.  Section 33413 is added to the Health and Safety Code, to
read:
   33413.  (a) Whenever dwelling units housing persons and families
of low or moderate income are destroyed or removed from the low- and
moderate-income housing market as part of a redevelopment project
that is subject to a written agreement with the agency or where
financial assistance has been provided by the agency, the agency
shall, within four years of the destruction or removal, rehabilitate,
develop, or construct, or cause to be rehabilitated, developed, or
constructed, for rental or sale to persons and families of low or
moderate income, an equal number of replacement dwelling units that
have an equal or greater number of bedrooms as those destroyed or
removed units at affordable housing cost within the territorial
jurisdiction of the agency.  When dwelling units are destroyed or
removed after September 1, 1989, 75 percent of the replacement
dwelling units shall replace dwelling units available at affordable
housing cost to, and occupied by, persons in the same income level of
very low income households, lower income households, and persons and
families of low and moderate income, as the persons displaced from
those destroyed or removed units.  When dwelling units are destroyed
or removed after January 1, 2002, 100 percent of the replacement
dwelling units shall be available at affordable housing cost to, and
occupied by, persons in the same or a lower income category (low,
very low, or moderate) as the persons displaced from those destroyed
or removed units.
   (b) (1) At least 30 percent of all new or rehabilitated dwelling
units developed by an agency shall be available at affordable housing
cost to, and occupied by, persons and families of low or moderate
income.  Not less than 50 percent of the dwelling units required to
be available at affordable housing cost to, and occupied by, persons
and families of low or moderate income shall be available at
affordable housing cost to, and occupied by, very low income
households.
   (2) (A) (i) At least 15 percent of all new or rehabilitated
dwelling units developed within the project area by public or private
entities or persons other than the agency shall be available at
affordable housing cost to, and occupied by, persons and families of
low or moderate income.  Not less than 40 percent of the dwelling
units required to be available at affordable housing cost to, and
occupied by, persons and families of low or moderate income shall be
available at affordable housing cost to, and occupied by, very low
income households.
   (ii) To satisfy this paragraph, in whole or in part, the agency
may cause, by regulation or agreement, to be available, at affordable
housing cost to, and occupied by, persons and families of low or
moderate income or to very low income households, as applicable, two
units outside a project area for each unit that otherwise would have
had to be available inside a project area.
   (iii) To satisfy the provisions of this paragraph, the agency may
aggregate new or rehabilitated dwelling units in one or more project
areas, if the agency finds, based on substantial evidence, after a
public hearing, that the aggregation will not cause or exacerbate
racial, ethnic, or economic segregation.
   (B) To satisfy the requirements of paragraph (1) and subparagraph
(A), the agency may purchase or otherwise acquire or cause by
regulation or agreement the purchase or other acquisition of
long-term affordability covenants on multifamily units that restrict
the cost of renting or purchasing those units that either:  (i) are
not presently available at affordable housing cost to persons and
families of low or very low income households, as applicable; or (ii)
are units that are presently available at affordable housing cost to
this same group of persons or families, but are units that the
agency finds, based upon substantial evidence, after a public
hearing, cannot reasonably be expected to remain affordable to this
same group of persons or families.
   (C) To satisfy the requirements of paragraph (1) and subparagraph
(A), the long-term affordability covenants purchased or otherwise
acquired pursuant to subparagraph (B) shall be required to be
maintained on dwelling units at affordable housing cost to, and
occupied by, persons and families of low or very low income, for the
longest feasible time but not less than 55 years for rental units and
45 years for owner-occupied units.  Not more than 50 percent of the
units made available pursuant to paragraph (1) and subparagraph (A)
may be assisted through the purchase of acquisition of long-term
affordability covenants pursuant to subparagraph (B).  Not less than
50 percent of the units made available through the purchase or
acquisition of long-term affordability covenants pursuant to
subparagraph (B) shall be available at affordable housing cost to,
and occupied by, very low income households.
   (3) The requirements of this subdivision shall apply independently
of the requirements of subdivision (a).  The requirements of this
subdivision shall apply in the aggregate to housing made available
pursuant to paragraphs (1) and (2), respectively, and not to each
individual case of rehabilitation, development, or construction of
dwelling units.
   (4) Each redevelopment agency, as part of the implementation plan
required by Section 33490, shall adopt a plan to comply with the
requirements of this subdivision for each project area.  The plan
shall be consistent with, and may be included within, the community's
housing element.  The plan shall be reviewed and, if necessary,
amended at least every five years in conjunction with either the
housing element cycle or the plan implementation cycle.  The plan
shall ensure that the requirements of this subdivision are met every
10 years.  If the requirements of this subdivision are not met by the
end of each 10-year period, the agency shall meet these goals on an
annual basis until the requirements for the 10-year period are met.
If the agency has exceeded the requirements within the 10-year
period, the agency may count the units that exceed the requirement in
order to meet the requirements during the next 10-year period.  The
plan shall contain the contents required by paragraphs (2) and (3) of
subdivision (a) of Section 33490.
   (c) The agency shall require that the aggregate number of
replacement dwelling units and other dwelling units rehabilitated,
developed, constructed, or price-restricted pursuant to subdivision
(a) or (b) remain available at affordable housing cost to, and
occupied by, persons and families of low-income, moderate-income, and
very low income households, respectively, for the longest feasible
time, but for not less than 55 years for rental units and 45 years
for home ownership units, except for the following:
   (1) The agency may permit sales of owner-occupied units prior to
the expiration of the 45-year period for a price in excess of that
otherwise permitted under this subdivision pursuant to an adopted
program that protects the agency's investment of moneys from the Low
and Moderate Income Housing Fund, including, but not limited to, an
equity sharing program that establishes a schedule of equity sharing
that permits retention by the seller of a portion of those excess
proceeds, based on the length of occupancy.  The remainder of the
excess proceeds of the sale shall be allocated to the agency and
deposited into the Low and Moderate Income Housing Fund.  The agency
shall, within three years from the date of sale of units under this
paragraph, expend funds to make affordable an equal number of units
at the same income level as units sold under this paragraph.  Only
the units originally assisted by the agency shall be counted towards
the agency's obligations under Section 33413.
   (2) The requirements of this subdivision shall be made enforceable
in the same manner as provided in paragraph (2) of subdivision (f)
of Section 33334.3.
   If land on which dwelling units required by this section are
located is deleted from the project area, the agency shall continue
to require that those units remain affordable as specified in this
subdivision.
   (d) (1) This section applies only to redevelopment projects for
which a final redevelopment plan is adopted pursuant to Article 5
(commencing with Section 33360) on or after January 1, 1976, and to
areas which are added to a project area by amendment to a final
redevelopment plan adopted on or after January 1, 1976.  In addition,
subdivision (a) shall apply to any other redevelopment project with
respect to dwelling units destroyed or removed from the low- and
moderate-income housing market on or after January 1, 1996,
irrespective of the date of adoption of a final redevelopment plan or
an amendment to a final redevelopment plan adding areas to a project
area.  Additionally, any agency may, by resolution, elect to make
all or part of the requirements of this section applicable to any
redevelopment project of the agency for which the final redevelopment
plan was adopted prior to January 1, 1976.
   (2) An agency may, by resolution, elect to require that whenever
dwelling units housing persons or families of low or moderate income
are destroyed or removed from the low- and moderate-income housing
market as part of a redevelopment project, the agency shall replace
each dwelling unit with up to three replacement dwelling units
pursuant to subdivision (a).
   (e) Except as otherwise authorized by law, this section does not
authorize an agency to operate a rental housing development beyond
the period reasonably necessary to sell or lease the housing
development.
   (f) Notwithstanding subdivision (a), the agency may replace
destroyed or removed dwelling units with a fewer number of
replacement dwelling units if the replacement dwelling units meet
both of the following criteria:
   (1) The total number of bedrooms in the replacement dwelling units
equals or exceeds the number of bedrooms in the destroyed or removed
units.  Destroyed or removed units having one or no bedroom are
deemed for this purpose to have one bedroom.
   (2) The replacement units are affordable to and occupied by the
same income level of households as the destroyed or removed units.
   (g) "Longest feasible time," as used in this section, includes,
but is not limited to, unlimited duration.
   (h) This section shall become operative on January 1, 2006.
  SEC. 7.5.  Section 33413 is added to the Health and Safety Code, to
read:
   33413.  (a) Whenever dwelling units housing persons and families
of low or moderate income are destroyed or removed from the low- and
moderate-income housing market as part of a redevelopment project
that is subject to a written agreement with the agency or where
financial assistance has been provided by the agency, the agency
shall, within four years of the destruction or removal, rehabilitate,
develop, or construct, or cause to be rehabilitated, developed, or
constructed, for rental or sale to persons and families of low or
moderate income, an equal number of replacement dwelling units that
have an equal or greater number of bedrooms as those destroyed or
removed units at affordable housing cost within the territorial
jurisdiction of the agency.  When dwelling units are destroyed or
removed after September 1, 1989, 75 percent of the replacement
dwelling units shall replace dwelling units available at affordable
housing cost to, and occupied by, persons in the same income level of
very low income households, lower income households, and persons and
families of low and moderate income, as the persons displaced from
those destroyed or removed units.  When dwelling units are destroyed
or removed after January 1, 2002, 100 percent of the replacement
dwelling units shall be available at affordable housing cost to, and
occupied by, persons in the same or a lower income category (low,
very low, or moderate) as the persons displaced from those destroyed
or removed units.
   (b) (1) Prior to the time limit on the effectiveness of the
redevelopment plan established pursuant to Sections 33333.2 and
33333.6, at least 30 percent of all new or rehabilitated dwelling
units developed by an agency shall be available at affordable housing
cost to, and occupied by, persons and families of low or moderate
income.  Not less than 50 percent of the dwelling units required to
be available at affordable housing cost to, and occupied by, persons
and families of low or moderate income shall be available at
affordable housing cost to, and occupied by, very low income
households.
   (2) (A) (i) Prior to the time limit on the effectiveness of the
redevelopment plan established pursuant to Sections 33333.2 and
33333.6, at least 15 percent of all new or rehabilitated dwelling
units developed within the project area by public or private entities
or persons other than the agency shall be available at affordable
housing cost to, and occupied by, persons and families of low or
moderate income.  Not less than 40 percent of the dwelling units
required to be available at affordable housing cost to, and occupied
by, persons and families of low or moderate income shall be available
at affordable housing cost to, and occupied by, very low income
households.
   (ii) To satisfy this paragraph, in whole or in part, the agency
may cause, by regulation or agreement, to be available, at affordable
housing cost to, and occupied by, persons and families of low or
moderate income or to very low income households, as applicable, two
units outside a project area for each unit that otherwise would have
had to be available inside a project area.
   (iii) To satisfy the provisions of this paragraph, the agency may
aggregate new or rehabilitated dwelling units in one or more project
areas, if the agency finds, based on substantial evidence, after a
public hearing, that the aggregation will not cause or exacerbate
racial, ethnic, or economic segregation.
   (B) To satisfy the requirements of paragraph (1) and subparagraph
(A), the agency may purchase or otherwise acquire or cause by
regulation or agreement the purchase or other acquisition of
long-term affordability covenants on multifamily units that restrict
the cost of renting or purchasing those units that either:  (i) are
not presently available at affordable housing cost to persons and
families of low or very low income households, as applicable; or (ii)
are units that are presently available at affordable housing cost to
this same group of persons or families, but are units that the
agency finds, based upon substantial evidence, after a public
hearing, cannot reasonably be expected to remain affordable to this
same group of persons or families.
   (C) To satisfy the requirements of paragraph (1) and subparagraph
(A), the long-term affordability covenants purchased or otherwise
acquired pursuant to subparagraph (B) shall be required to be
maintained on dwelling units at affordable housing cost to, and
occupied by, persons and families of low or very low income, for the
longest feasible time but not less than 55 years for rental units and
45 years for owner-occupied units.  Not more than 50 percent of the
units made available pursuant to paragraph (1) and subparagraph (A)
may be assisted through the purchase of acquisition of long-term
affordability covenants pursuant to subparagraph (B).  Not less than
50 percent of the units made available through the purchase or
acquisition of long-term affordability covenants pursuant to
subparagraph (B) shall be available at affordable housing cost to,
and occupied by, very low income households.
   (3) The requirements of this subdivision shall apply independently
of the requirements of subdivision (a).  The requirements of this
subdivision shall apply in the aggregate to housing made available
pursuant to paragraphs (1) and (2), respectively, and not to each
individual case of rehabilitation, development, or construction of
dwelling units.
   (4) Each redevelopment agency, as part of the implementation plan
required by Section 33490, shall adopt a plan to comply with the
requirements of this subdivision for each project area.  The plan
shall be consistent with, and may be included within, the community's
housing element.  The plan shall be reviewed and, if necessary,
amended at least every five years in conjunction with either the
housing element cycle or the plan implementation cycle.  The plan
shall ensure that the requirements of this subdivision are met every
10 years.  If the requirements of this subdivision are not met by the
end of each 10-year period, the agency shall meet these goals on
                                         an annual basis until the
requirements for the 10-year period are met.  If the agency has
exceeded the requirements within the 10-year period, the agency may
count the units that exceed the requirement in order to meet the
requirements during the next 10-year period.  The plan shall contain
the contents required by paragraphs (2) and (3) of subdivision (a) of
Section 33490.
   (c) The agency shall require that the aggregate number of
replacement dwelling units and other dwelling units rehabilitated,
developed, constructed, or price-restricted pursuant to subdivision
(a) or (b) remain available at affordable housing cost to, and
occupied by, persons and families of low-income, moderate-income, and
very low income households, respectively, for the longest feasible
time, but for not less than 55 years for rental units and 45 years
for home ownership units, except for the following:
   (1) The agency may permit sales of owner-occupied units prior to
the expiration of the 45-year period for a price in excess of that
otherwise permitted under this subdivision pursuant to an adopted
program that protects the agency's investment of moneys from the Low
and Moderate Income Housing Fund, including, but not limited to, an
equity sharing program that establishes a schedule of equity sharing
that permits retention by the seller of a portion of those excess
proceeds, based on the length of occupancy.  The remainder of the
excess proceeds of the sale shall be allocated to the agency and
deposited into the Low and Moderate Income Housing Fund.  The agency
shall, within three years from the date of sale of units under this
paragraph, expend funds to make affordable an equal number of units
at the same income level as units sold under this paragraph.  Only
the units originally assisted by the agency shall be counted towards
the agency's obligations under Section 33413.
   (2) The requirements of this subdivision shall be made enforceable
in the same manner as provided in paragraph (2) of subdivision (f)
of Section 33334.3.
   If land on which dwelling units required by this section are
located is deleted from the project area, the agency shall continue
to require that those units remain affordable as specified in this
subdivision.
   (d) (1) This section applies only to redevelopment projects for
which a final redevelopment plan is adopted pursuant to Article 5
(commencing with Section 33360) on or after January 1, 1976, and to
areas which are added to a project area by amendment to a final
redevelopment plan adopted on or after January 1, 1976.  In addition,
subdivision (a) shall apply to any other redevelopment project with
respect to dwelling units destroyed or removed from the low- and
moderate-income housing market on or after January 1, 1996,
irrespective of the date of adoption of a final redevelopment plan or
an amendment to a final redevelopment plan adding areas to a project
area.  Additionally, any agency may, by resolution, elect to make
all or part of the requirements of this section applicable to any
redevelopment project of the agency for which the final redevelopment
plan was adopted prior to January 1, 1976.  In addition, subdivision
(b) shall apply to redevelopment plans adopted prior to January 1,
1976, for which an amendment is adopted pursuant to Section 33333.10,
except that subdivision (b) shall apply to those redevelopment plans
prospectively only so that the requirements of subdivision (b) shall
apply only to new and substantially rehabilitated dwelling units for
which the building permits are issued on or after the date that the
ordinance adopting the amendment pursuant to Section 33333.10 becomes
effective.
   (2) An agency may, by resolution, elect to require that whenever
dwelling units housing persons or families of low or moderate income
are destroyed or removed from the low- and moderate-income housing
market as part of a redevelopment project, the agency shall replace
each dwelling unit with up to three replacement dwelling units
pursuant to subdivision (a).
   (e) Except as otherwise authorized by law, this section does not
authorize an agency to operate a rental housing development beyond
the period reasonably necessary to sell or lease the housing
development.
   (f) Notwithstanding subdivision (a), the agency may replace
destroyed or removed dwelling units with a fewer number of
replacement dwelling units if the replacement dwelling units meet
both of the following criteria:
   (1) The total number of bedrooms in the replacement dwelling units
equals or exceeds the number of bedrooms in the destroyed or removed
units.  Destroyed or removed units having one or no bedroom are
deemed for this purpose to have one bedroom.
   (2) The replacement units are affordable to and occupied by the
same income level of households as the destroyed or removed units.
   (g) "Longest feasible time," as used in this section, includes,
but is not limited to, unlimited duration.
   (h) This section shall become operative on January 1, 2006.
  SEC. 8.  Section 33490 of the Health and Safety Code is amended to
read:
   33490.  (a) (1) (A) On or before December 31, 1994, and each five
years thereafter, each agency that has adopted a redevelopment plan
prior to December 31, 1993, shall adopt, after a public hearing, an
implementation plan that shall contain the specific goals and
objectives of the agency for the project area, the specific programs,
including potential projects, and estimated expenditures proposed to
be made during the next five years, and an explanation of how the
goals and objectives, programs, and expenditures will eliminate
blight within the project area and implement the requirements of
Sections 33334.2, 33334.4, 33334.6, and 33413.  After adoption of the
first implementation plan, the parts of the implementation plan that
address Sections 33334.2, 33334.4, 33334.6, and 33413 shall be
adopted every five years either in conjunction with the housing
element cycle or the implementation plan cycle.  The agency may amend
the implementation plan after conducting a public hearing on the
proposed amendment.  If an action attacking the adoption, approval,
or validity of a redevelopment plan adopted prior to January 1, 1994,
has been brought pursuant to Chapter 5 (commencing with Section
33500), the first implementation plan required pursuant to this
section shall be adopted within six months after a final judgment or
order has been entered.  Subsequent implementation plans required
pursuant to this section shall be adopted pursuant to the terms of
this section, and as if the first implementation plan had been
adopted on or before December 31, 1994.
   (B) Adoption of an implementation plan shall not constitute an
approval of any specific program, project, or expenditure and shall
not change the need to obtain any required approval of a specific
program, project, or expenditure from the agency or community.  The
adoption of an implementation plan shall not constitute a project
within the meaning of Section 21000 of the Public Resources Code.
However, the inclusion of a specific program, potential project, or
expenditure in an implementation plan prepared pursuant to
subdivision (c) of Section 33352 in conjunction with a redevelopment
plan adoption shall not eliminate analysis of those programs,
potential projects, and expenditures in the environmental impact
report prepared pursuant to subdivision (k) of Section 33352 to the
extent that it would be otherwise required.  In addition, the
inclusion of programs, potential projects, and expenditures in an
implementation plan shall not eliminate review pursuant to the
California Environmental Quality Act (Division 13 (commencing with
Section 21000) of the Public Resources Code), at the time of the
approval of the program, project, or expenditure, to the extent that
it would be otherwise required.
   (2) (A) A portion of the implementation plan shall address the
agency housing responsibilities and shall contain a section
addressing Sections 33334.2, 33334.4, and 33334.6, the Low and
Moderate Income Housing Fund, and, if subdivision (b) of Section
33413 applies, a section addressing agency-developed and project area
housing.  The section addressing the Low and Moderate Income Housing
Fund shall contain:
   (i) The amount available in the Low and Moderate Income Housing
Fund and the estimated amounts which will be deposited in the Low and
Moderate Income Housing Fund during each of the next five years.
   (ii) A housing program with estimates of the number of new,
rehabilitated, or price-restricted units to be assisted during each
of the five years and estimates of the expenditures of moneys from
the Low and Moderate Income Housing Fund during each of the five
years.
   (B) For each project area to which subdivision (b) of Section
33413 applies, the section addressing the agency developed and
project area housing shall contain:
   (i) Estimates of the number of new, substantially rehabilitated or
price-restricted residential units to be developed or purchased
within one or more project areas, both over the life of the plan and
during the next 10 years.
   (ii) Estimates of the number of units of very low, low-, and
moderate-income households required to be developed within one or
more project areas in order to meet the requirements of paragraph (2)
of subdivision (b) of Section 33413, both over the life of the plan
and during the next 10 years.
   (iii) The number of units of very low, low-, and moderate-income
households which have been developed within one or more project areas
which meet the requirements of paragraph (2) of subdivision (b) of
Section 33413.
   (iv) Estimates of the number of agency developed residential units
which will be developed during the next five years, if any, which
will be governed by paragraph (1) of subdivision (b) of Section
33413.
   (v) Estimates of the number of agency developed units for very
low, low-, and moderate-income households which will be developed by
the agency during the next five years to meet the requirements of
paragraph (1) of subdivision (b) of Section 33413.
   (C) The section addressing Section 33334.4 shall contain all of
the following:
   (i) The number of housing units needed for very low income
persons, low-income persons, and moderate-income persons as each of
those needs have been identified in the most recent determination
pursuant to Section 65584 of the Government Code, and the proposed
amount of expenditures from the Low and Moderate Income Housing Fund
for each income group during each year of the implementation plan
period.
   (ii) The total population of the community and the population
under age 65 as reported in the most recent census of the United
States Census Bureau.
   (iii) A housing program that provides a detailed schedule of
actions the agency is undertaking or intends to undertake to ensure
expenditure of the Low and Moderate Income Housing Fund in the
proportions required by Section 33334.4.
   (iv) For the previous implementation plan period, the amounts of
Low and Moderate Income Housing Fund moneys utilized to assist units
affordable to and occupied by very low income households and
low-income households; the number, location, and level of
affordability of units newly constructed with other locally
controlled government assistance and without agency assistance and
that are required to be affordable to, and occupied by, persons of
low or very low income for at least 55 years for rental housing or 45
years for ownership housing; and the amount of Low and Moderate
Income Housing Fund moneys utilized to assist housing units available
to families with children, and the number, location, and level of
affordability of those units.
   (3) If the implementation plan contains a project that will result
in the destruction or removal of dwelling units that will have to be
replaced pursuant to subdivision (a) of Section 33413, the
implementation plan shall identify proposed locations suitable for
those replacement dwelling units.
   (b) For a project area for which a redevelopment plan is adopted
on or after January 1, 1994, the implementation plan prepared
pursuant to subdivision (c) of Section 33352 shall constitute the
initial implementation plan and thereafter the agency after a public
hearing shall adopt an implementation plan every five years
commencing with the fifth year after the plan has been adopted.
Agencies may adopt implementation plans that include more than one
project area.
   (c) Every agency, at least once within the five-year term of the
plan, shall conduct a public hearing and hear testimony of all
interested parties for the purpose of reviewing the redevelopment
plan and the corresponding implementation plan for each redevelopment
project within the jurisdiction and evaluating the progress of the
redevelopment project.  The hearing required by this subdivision
shall take place no earlier than two years and no later than three
years after the adoption of the implementation plan.  An agency may
hold one hearing for two or more project areas if those project areas
are included within the same implementation plan.
   (d) Notice of public hearings conducted pursuant to this section
shall be published pursuant to Section 6063 of the Government Code
and posted in at least four permanent places within the project area
for a period of three weeks.  Publication and posting shall be
completed not less than 10 days prior to the date set for hearing.
  SEC. 9.  (a) Section 2.1 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, and
(3) SB 459 is not enacted or as enacted does not amend that section,
and (4) this bill is enacted after AB 661, in which case Sections 2,
2.2, 2.3, 2.4, and 2.5 of this bill shall not become operative.
   (b) Sections 2.2 and 2.4 of this bill incorporate amendments to
Section 33334.2 of the Health and Safety Code proposed by both this
bill and SB 459.  Sections 2.2 and 2.4 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 SB 459, in which
case Sections 2, 2.1, 2.3, and 2.5 of this bill shall not become
operative.
   (c) Sections 2.3 and 2.5 of this bill incorporate amendments to
Section 33334.2 of the Health and Safety Code proposed by this bill,
AB 661, and SB 459.  Sections 2.3 and 2.5 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 661 and
SB 459, in which case Sections 2, 2.1, 2.2, and 2.4 of this bill
shall not become operative.
  SEC. 10.  Sections 6.5 and 7.5 of this bill incorporate amendments
to Section 33413 of the Health and Safety Code proposed by both this
bill and SB 211.  Sections 6.5 and 7.5 shall only become operative if
(1) both bills are enacted and become effective on or before January
1, 2002, (2) each bill amends Section 33413 of the Health and Safety
Code, and (3) this bill is enacted after SB 211, in which case
Sections 6 and 7 of this bill shall not become operative.