BILL NUMBER: AB 2406 CHAPTERED
BILL TEXT
CHAPTER 209
FILED WITH SECRETARY OF STATE AUGUST 27, 2010
APPROVED BY GOVERNOR AUGUST 27, 2010
PASSED THE SENATE AUGUST 9, 2010
PASSED THE ASSEMBLY MAY 13, 2010
AMENDED IN ASSEMBLY APRIL 28, 2010
AMENDED IN ASSEMBLY APRIL 8, 2010
INTRODUCED BY Assembly Member Blakeslee
FEBRUARY 19, 2010
An act to add Section 33334.25 to the Health and Safety Code,
relating to redevelopment.
LEGISLATIVE COUNSEL'S DIGEST
AB 2406, Blakeslee. 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 or after January
1, 2020.
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.