BILL NUMBER: AB 2406	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  APRIL 28, 2010
	AMENDED IN ASSEMBLY  APRIL 8, 2010

INTRODUCED BY   Assembly Member Blakeslee

                        FEBRUARY 19, 2010

    An act to amend Section 33334.2 of, and to add Section
33670.6 to, the   An act to add Section 33334.25 to the
 Health and Safety Code, relating to redevelopment.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 2406, as amended, Blakeslee.  Grover Beach and Arroyo
Grande Redevelopment Agencies   Redevelopment  :
pooled housing funds.
   The Community Redevelopment Law authorizes the establishment of
redevelopment agencies in communities to address the effects of
blight, as defined, in blighted areas in those communities known as
project areas. Section 16 of Article XVI of the California
Constitution authorizes a redevelopment agency to receive funding
through tax increments attributable to increases in assessed property
tax valuation of property in a project area due to redevelopment.
Not less than 20% of tax increments generated from a project area are
required to be used by a redevelopment agency to increase and
improve the community's supply of low- and moderate-income housing.

   This bill would authorize contiguous agencies located within
adjoining cities in a metropolitan statistical area to create and
participate in a joint powers authority in order to pool their
housing funds to pay for the direct costs of constructing,
substantially rehabilitating, and preserving the affordability of
housing units affordable to extremely low income persons or
households, as defined.  
   The bill would require that specified terms and conditions be set
forth in a mutually binding contract between the joint powers
authority and each participating agency and a receiving entity for
the use and transfer of pooled housing funds. The bill would also
require that pooled housing funds be spent within a project area of a
participating agency and would also prohibit the creation of a new
joint project funded pursuant to its provisions on and after January
1, 2020.  
   This bill would authorize the Grover Beach Redevelopment Agency
and the Arroyo Grande Redevelopment Agency to combine these funds and
use them anywhere within the incorporated limits of the City of
Grover Beach and the City of Arroyo Grande for capital outlay. The
bill would require the agency to use these combined funds outside the
project area upon a resolution of the agency and the city council
determining that the use will be of benefit to the redevelopment
project area. The bill would state the findings and declarations of
the Legislature concerning the need for special legislation.

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


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

   SECTION 1.    Section 33334.25 is added to the 
 Health and Safety Code   , to read:  
   33334.25.  (a) The Legislature finds and declares all of the
following:
   (1) The transfer of funds to a joint powers authority and the use
of pooled funds within the housing market area of the participating
agencies for the purpose of providing affordable housing is of
benefit to the project area producing the tax increment.
   (2) The cost and availability of land, geophysical and
environmental limitations, community patterns, and the lack of
financing make the availability of affordable housing more difficult
in some communities.
   (3) The cooperation of local agencies and the use of pooled funds
will result in more resources than would otherwise be available for
affordable housing.
   (b) As used in this section, the following terms shall apply:
   (1) "Housing funds" means funds in or from the low- and
moderate-income housing fund established by an agency pursuant to
Section 33334.3.
   (2) "Joint powers authority" means a joint powers authority
created pursuant to Chapter 5 (commencing with Section 6500) of
Division 7 of Title 1 of the Government Code for the purposes of
receiving and using housing funds pursuant to this section.
   (3) "Receiving entity" means any person, partnership, joint
venture, corporation, governmental body, or other organization
receiving housing funds from a joint powers authority for the purpose
of providing housing pursuant to this section.
   (c) Notwithstanding any other provision of law, contiguous
agencies located within adjoining cities within a single metropolitan
statistical area (MSA) may, by agreement, create and participate in
a joint powers authority for the purpose of pooling their housing
funds for the direct costs of constructing, substantially
rehabilitating, and preserving the affordability of housing units
that are affordable to extremely low income households, as defined in
Section 50106. Agencies may participate in the authority upon a
finding based on substantial evidence, after a public hearing, that
the aggregation will not cause or exacerbate racial, ethnic, or
economic segregation. Agencies may transfer a portion of their
housing funds to a joint powers authority for use by the joint powers
authority pursuant to this section. The joint powers authority may
determine the kinds of housing projects or activities to be assisted,
consistent with this section. The joint powers authority may loan,
grant, or advance transferred housing funds from participating
agencies to a receiving entity for any eligible housing development
within the participating agency's jurisdiction, subject to the
requirements of this section. In addition, the agreement may
authorize the joint powers authority to issue bonds and to use the
pooled funds to leverage other funds to assist eligible developments,
including loans from private institutions and assistance provided by
other governmental agencies.
   (d) A mutually binding agreement between the joint powers
authority and each participating agency shall contain the following
terms and conditions:
   (1) The community of each participating agency shall have adopted
up-to-date housing elements pursuant to Article 10.6 (commencing with
Section 65580) of Division 1 of Title 7 of the Government Code, and
the housing elements have been determined to be in compliance with
the law by the Department of Housing and Community Development.
   (2) The community of each participating agency shall have met, in
its current or previous housing element cycle, 50 percent or more of
its share of the region's affordable housing needs, as defined in
Section 65584 of the Government Code, in the very low and lower
income categories of income groups defined in Section 50025.5.
   (3) Each participating agency shall hold, at least 45 days prior
to the transfer of funds to the joint powers authority, a public
hearing, after providing notice pursuant to Section 6062 of the
Government Code to solicit public comments on the draft agreement.
   (4) No housing funds shall be transferred from a project area that
has an indebtedness to its low and moderate-income housing fund
pursuant to Section 33334.6.
   (5) No housing funds shall be transferred from an agency that has
not met its need for replacement housing pursuant to Section 33413,
unless the agency has encumbered and contractually committed
sufficient funds to meet those requirements.
   (6) Pooled funds shall be used within the participating agencies'
jurisdictions.
   (7) The joint powers authority shall comply with this section.
   (8) The joint powers authority shall ensure that the funds it
receives are used in accordance with this section.
   (9) Funds transferred by an agency to a joint powers authority
pursuant to this section shall be expended or encumbered by the joint
powers authority for the purposes of this section within two years
of the transfer. Transferred funds not so expended or encumbered by
the joint powers authority within two years after the transfer shall
be returned to the original agency and shall be deemed excess surplus
funds as provided in, and subject to, the requirements of Sections
33334.10 and 33334.12. Excess surplus funds held by an agency shall
not be transferred to a joint powers authority.
   (10) The joint powers authority shall prepare and submit an annual
report to the department that documents the amount of housing funds
received and expended or allocated for specific housing assistance
activities consistent with Section 33080.4.
   (e) A mutually binding contract between the joint powers authority
and a receiving entity shall contain the following terms and
conditions:
   (1) Pooled housing funds shall be used only to pay for the direct
costs of constructing, substantially rehabilitating, or preserving
the affordability of housing units that are affordable to extremely
low income persons or households.
   (2) Pooled housing funds shall not be used to pay for planning and
administrative costs, offsite improvements associated with a housing
project, or fees or exactions levied solely for development projects
constructed, substantially rehabilitated, or preserved with pooled
funds. The receiving entity shall be subject to the same replacement
requirements provided in Section 33413 and any relocation
requirements applicable pursuant to Section 7260 of the Government
Code.
   (3) The joint powers authority shall make findings, based on
substantial evidence on the record, that each proposed use of pooled
funds will not exacerbate racial or economic segregation.
   (f) Pooled funds expended pursuant to this section shall be spent
within the project area of a participating redevelopment agency.
   (g) On or after January 1, 2020, no new joint project may be
created pursuant to this section.  
  SECTION 1.    Section 33334.2 of the Health and
Safety Code is amended to read:
   33334.2.  (a) Except as provided in subdivision (k), 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, lower income
households, as defined by Section 50079.5, very low income
households, as defined in Section 50105, and extremely low income
households, as defined by Section 50106, 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, county, or city and county shall be current, and shall
have been determined by the department pursuant to Section 65585 to
be in substantial 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, and
occupied by, persons and families of low or moderate income and very
low income households is equivalent in impact to the funds otherwise
required to be set aside pursuant to this section. In addition to
any other local funds, these direct financial contributions may
include federal or state grants paid directly to a community and that
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 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 extremely
low, 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) (A) Improve real property or building sites with onsite or
offsite improvements, but only if both (i) 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 (ii) the agency requires that the units remain
available at affordable housing cost to, and occupied by, persons
and families of extremely low, very low, low, or moderate income 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.
   (B) 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, extremely low
income households, as defined by Section 50106, 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, and occupied by, low- and
moderate-income persons.
   (ii) If less than all the units in the development are affordable
to, and occupied by, low- or moderate-income persons, any agency
assistance shall not exceed the amount needed to make the housing
affordable to, and occupied by, low- or moderate-income persons.
   (iii) The units in the development that are affordable to, and
occupied by, 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) 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) (1) (A) An action to
compel compliance with the requirement of Section 33334.3 to deposit
not less than 20 percent of all taxes that are allocated to the
agency pursuant to Section 33670 in the Low and Moderate Income
Housing Fund shall be commenced within 10 years of the alleged
violation. A cause of action for a violation accrues on the last day
of the fiscal year in which the funds were required to be deposited
in the Low and Moderate Income Housing Fund.
   (B) An action to compel compliance with the requirement of this
section or Section 33334.6 that money deposited in the Low and
Moderate Income Housing Fund be used by the agency for purposes of
increasing, improving, and preserving the community's supply of low-
and moderate-income housing available at affordable housing cost
shall be commenced within 10 years of the alleged violation. A cause
of action for a violation accrues on the date of the actual
expenditure of the funds.
   (C) An agency found to have deposited less into the Low and
Moderate Income Housing Fund than mandated by Section 33334.3 or to
have spent money from the Low and Moderate Income Housing Fund for
purposes other than increasing, improving, and preserving the
community's supply of low- and moderate-income housing, as mandated,
by this section or Section 33334.6 shall repay the funds with
interest in one lump sum pursuant to Section 970.4 or 970.5 of the
Government Code or may do either of the following:
   (i) Petition the court under Section 970.6 for repayment in
installments.
   (ii) Repay the portion of the judgment due to the Low and Moderate
Income Housing Fund in equal installments over a period of five
years following the judgment.
   (2) Repayment shall not be made from the funds required to be set
aside or used for low- and moderate-income housing pursuant to this
section.
   (3) Notwithstanding clauses (i) and (ii) of subparagraph (C) of
paragraph (1), all costs, including reasonable attorney's fees if
included in the judgment, are due and shall be paid upon entry of
judgment or order.
   (4) Except as otherwise provided in this subdivision, Chapter 2
(commencing with Section 970) of Part 5 of Division 3.6 of Title 1 of
the Government Code for the enforcement of a judgment against a
local public entity applies to a judgment against a local public
entity that violates this section.
   (5) This subdivision applies to actions filed on and after January
1, 2006.
   (6) The limitations period specified in subparagraphs (A) and (B)
of paragraph (1) does not apply to a cause of action brought pursuant
to Chapter 9 (commencing with Section 860) of Title 10 of Part 2 of
the Code of Civil Procedure.
   (k) (1) From July 1, 2009, to June 30, 2010, inclusive, an agency
may suspend all or part of its required allocation to the Low and
Moderate Income Housing Fund from taxes that are allocated to that
agency pursuant to Section 33670.
   (2) An agency that suspends revenue pursuant to paragraph (1)
shall pay back to its low- and moderate-income housing fund the
amount of revenue that was suspended in the 2009-10 fiscal year
pursuant to this subdivision from July 1, 2010, to June 30, 2015,
inclusive.
   (3) An agency that suspends revenue pursuant to paragraph (1) and
fails to repay or have repaid on its behalf the amount of revenue
suspended pursuant to paragraph (2) shall, commencing July 1, 2015,
be required to allocate an additional 5 percent of all taxes that are
allocated to that agency pursuant to Section 33670 for low- and
moderate-income housing for the remainder of the time that the agency
receives allocations of tax revenue pursuant to Section 33670.
   (4) An agency that fails to pay or have paid on its behalf the
full amount calculated pursuant to subparagraph (J) of paragraph (2)
of subdivision (a) of Section 33690, or subparagraph (J) of paragraph
(2) of subdivision (a) of Section 33690.5, as the case may be,
shall, commencing July 1, 2010, or July 1, 2011, as applicable, be
required to allocate an additional 5 percent of all taxes that are
allocated to that agency pursuant to Section 33670 for low- and
moderate-income housing for the remainder of the time that the agency
receives allocations of tax revenue pursuant to Section 33670.
   (l) The Grover Beach Redevelopment Agency and the Arroyo Grande
Redevelopment Agency may combine these funds and use them anywhere
within the incorporated limits of the City of Grover Beach and the
City of Arroyo Grande. An agency may only use these combined funds
outside the project area upon a resolution of the agency and the city
council determining that the use will be of benefit to the
redevelopment project area. Funds may not be used for this purpose
until each city is determined by the Department of Housing and
Community Development to be in compliance with the state housing
element.  
  SEC. 2.    Section 33670.6 is added to the Health
and Safety Code, to read:
   33670.6.  With respect to funds allocated pursuant to Section
33670, the Grover Beach Redevelopment Agency and the Arroyo Grande
Redevelopment Agency may combine these funds and use them anywhere
within the incorporated limits of the City of Grover Beach and the
City of Arroyo Grande. An agency may only use these combined funds
outside the project area upon a resolution of the agency and the city
council determining that the use will be of benefit to the
redevelopment project area. Funds may not be used for this purpose
until each city is determined by the Department of Housing and
Community Development to be in compliance with the state housing
element.  
  SEC. 3.    The Legislature finds and declares that
this act is a special law that is necessary because a general law
cannot be made applicable within the meaning of Section 16 of Article
IV of the California Constitution because of the unique
circumstances of the Grover Beach Redevelopment Agency and the Arroyo
Grande Redevelopment Agency.