BILL NUMBER: ABX1 26	CHAPTERED
	BILL TEXT

	CHAPTER  5
	FILED WITH SECRETARY OF STATE  JUNE 29, 2011
	APPROVED BY GOVERNOR  JUNE 28, 2011
	PASSED THE SENATE  JUNE 15, 2011
	PASSED THE ASSEMBLY  JUNE 15, 2011
	AMENDED IN SENATE  JUNE 14, 2011

INTRODUCED BY   Assembly Member Blumenfield

                        MAY 19, 2011

   An act to amend Sections 33500, 33501, 33607.5, and 33607.7 of,
and to add Part 1.8 (commencing with Section 34161) and Part 1.85
(commencing with Section 34170) to Division 24 of, the Health and
Safety Code, and to add Sections 97.401 and 98.2 to the Revenue and
Taxation Code, relating to redevelopment, and making an appropriation
therefor, to take effect immediately, bill related to the budget.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 26, Blumenfield. Community redevelopment.
   (1) The Community Redevelopment Law authorizes the establishment
of redevelopment agencies in communities to address the effects of
blight, as defined. Existing law provides that an action may be
brought to review the validity of the adoption or amendment of a
redevelopment plan by an agency, to review the validity of agency
findings or determinations, and other agency actions.
   This bill would revise the provisions of law authorizing an action
to be brought against the agency to determine or review the validity
of specified agency actions.
   (2) Existing law also requires that if an agency ceases to
function, any surplus funds existing after payment of all obligations
and indebtedness vest in the community.
   The bill would suspend various agency activities and prohibit
agencies from incurring indebtedness commencing on the effective date
of this act. Effective October 1, 2011, the bill would dissolve all
redevelopment agencies and community development agencies in
existence and designate successor agencies, as defined, as successor
entities. The bill would impose various requirements on the successor
agencies and subject successor agency actions to the review of
oversight boards, which the bill would establish.
   The bill would require county auditor-controllers to conduct an
agreed-upon procedures audit of each former redevelopment agency by
March 1, 2012. The bill would require the county auditor-controller
to determine the amount of property taxes that would have been
allocated to each redevelopment agency if the agencies had not been
dissolved and deposit this amount in a Redevelopment Property Tax
Trust Fund in the county. Revenues in the trust fund would be
allocated to various taxing entities in the county and to cover
specified expenses of the former agency. By imposing additional
duties upon local public officials, the bill would create a
state-mandated local program.
   (3) The bill would prohibit a redevelopment agency from issuing
new bonds, notes, interim certificates, debentures, or other
obligations if any legal challenge to invalidate a provision of this
act is successful.
   (4) The bill would appropriate $500,000 to the Department of
Finance from the General Fund for administrative costs associated
with the bill.
   (5) The bill would provide that its provisions take effect only if
specified legislation is enacted in the 2011-12 First Extraordinary
Session of the Legislature.
   (6) The California Constitution requires the state to reimburse
local agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
   This bill would provide that no reimbursement is required by this
act for a specified reason.
   (7) The California Constitution authorizes the Governor to declare
a fiscal emergency and to call the Legislature into special session
for that purpose. Governor Schwarzenegger issued a proclamation
declaring a fiscal emergency, and calling a special session for this
purpose, on December 6, 2010. Governor Brown issued a proclamation on
January 20, 2011, declaring and reaffirming that a fiscal emergency
exists and stating that his proclamation supersedes the earlier
proclamation for purposes of that constitutional provision.
   This bill would state that it addresses the fiscal emergency
declared and reaffirmed by the Governor by proclamation issued on
January 20, 2011, pursuant to the California Constitution.
   (8) This bill would declare that it is to take effect immediately
as a bill providing for appropriations related to the Budget Bill.
   Appropriation: yes.


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

  SECTION 1.  The Legislature finds and declares all of the
following:
   (a) The economy and the residents of this state are slowly
recovering from the worst recession since the Great Depression.
   (b) State and local governments are still facing incredibly
significant declines in revenues and increased need for core
governmental services.
   (c) Local governments across this state continue to confront
difficult choices and have had to reduce fire and police protection
among other services.
   (d) Schools have faced reductions in funding that have caused
school districts to increase class size and layoff teachers, as well
as make other hurtful cuts.
   (e) Redevelopment agencies have expanded over the years in this
state. The expansion of redevelopment agencies has increasingly
shifted property taxes away from services provided to schools,
counties, special districts, and cities.
   (f) Redevelopment agencies take in approximately 12 percent of all
of the property taxes collected across this state.
   (g) It is estimated that under current law, redevelopment agencies
will divert $5 billion in property tax revenue from other taxing
agencies in the 2011-12 fiscal year.
   (h) The Legislature has all legislative power not explicitly
restricted to it. The California Constitution does not require that
redevelopment agencies must exist and, unlike other entities such as
counties, does not limit the Legislature's control over that
existence. Redevelopment agencies were created by statute and can
therefore be dissolved by statute.
   (i) Upon their dissolution, any property taxes that would have
been allocated to redevelopment agencies will no longer be deemed tax
increment. Instead, those taxes will be deemed property tax revenues
and will be allocated first to successor agencies to make payments
on the indebtedness incurred by the dissolved redevelopment agencies,
with remaining balances allocated in accordance with applicable
constitutional and statutory provisions.
   (j) It is the intent of the Legislature to do all of the following
in this act:
   (1) Bar existing redevelopment agencies from incurring new
obligations, prior to their dissolution.
   (2) Allocate property tax revenues to successor agencies for
making payments on indebtedness incurred by the redevelopment agency
prior to its dissolution and allocate remaining balances in
accordance with applicable constitutional and statutory provisions.
   (3) Beginning October 1, 2011, allocate these funds according to
the existing property tax allocation within each county to make the
funds available for cities, counties, special districts, and school
and community college districts.
   (4) Require successor agencies to expeditiously wind down the
affairs of the dissolved redevelopment agencies and to provide the
successor agencies with limited authority that extends only to the
extent needed to implement a winddown of redevelopment agency
affairs.
  SEC. 2.  Section 33500 of the Health and Safety Code is amended to
read:
   33500.  (a) Notwithstanding any other provision of law, including
Section 33501, an action may be brought to review the validity of the
adoption or amendment of a redevelopment plan at any time within 90
days after the date of the adoption of the ordinance adopting or
amending the plan, if the adoption of the ordinance occurred prior to
January 1, 2011.
   (b) Notwithstanding any other provision of law, including Section
33501, an action may be brought to review the validity of any
findings or determinations by the agency or the legislative body at
any time within 90 days after the date on which the agency or the
legislative body made those findings or determinations, if the
findings or determinations occurred prior to January 1, 2011.
   (c) Notwithstanding any other law, including Section 33501, an
action may be brought to review the validity of the adoption or
amendment of a redevelopment plan at any time within two years after
the date of the adoption of the ordinance adopting or amending the
plan, if the adoption of the ordinance occurred after January 1,
2011.
   (d) Notwithstanding any other law, including Section 33501, an
action may be brought to review the validity of any findings or
determinations by the agency or the legislative body at any time
within two years after the date on which the agency or the
legislative body made those findings or determinations, if the
findings or determinations occurred after January 1, 2011.
  SEC. 3.  Section 33501 of the Health and Safety Code is amended to
read:
   33501.  (a) An action may be brought pursuant to Chapter 9
(commencing with Section 860) of Title 10 of Part 2 of the Code of
Civil Procedure to determine the validity of bonds and the
redevelopment plan to be financed or refinanced, in whole or in part,
by the bonds, or to determine the validity of a redevelopment plan
not financed by bonds, including without limiting the generality of
the foregoing, the legality and validity of all proceedings
theretofore taken for or in any way connected with the establishment
of the agency, its authority to transact business and exercise its
powers, the designation of the survey area, the selection of the
project area, the formulation of the preliminary plan, the validity
of the finding and determination that the project area is
predominantly urbanized, and the validity of the adoption of the
redevelopment plan, and also including the legality and validity of
all proceedings theretofore taken and (as provided in the bond
resolution) proposed to be taken for the authorization, issuance,
sale, and delivery of the bonds, and for the payment of the principal
thereof and interest thereon.
   (b) Notwithstanding subdivision (a), an action to determine the
validity of a redevelopment plan, or amendment to a redevelopment
plan that was adopted prior to January 1, 2011, may be brought within
90 days after the date of the adoption of the ordinance adopting or
amending the plan.
   (c) Any action that is commenced on or after January 1, 2011,
which is brought pursuant to Chapter 9 (commencing with Section 860)
of Title 10 of Part 2 of the Code of Civil Procedure to determine the
validity or legality of any issue, document, or action described in
subdivision (a), may be brought within two years after any triggering
event that occurred after January 1, 2011.
    (d) For the purposes of protecting the interests of the state,
the Attorney General and the Department of Finance are interested
persons pursuant to Section 863 of the Code of Civil Procedure in any
action brought with respect to the validity of an ordinance adopting
or amending a redevelopment plan pursuant to this section.
    (e) For purposes of contesting the inclusion in a project area of
lands that are enforceably restricted, as that term is defined in
Sections 422 and 422.5 of the Revenue and Taxation Code, or lands
that are in agricultural use, as defined in subdivision (b) of
Section 51201 of the Government Code, the Department of Conservation,
the county agricultural commissioner, the county farm bureau, the
California Farm Bureau Federation, and agricultural entities and
general farm organizations that provide a written request for notice,
are interested persons pursuant to Section 863 of the Code of Civil
Procedure, in any action brought with respect to the validity of an
ordinance adopting or amending a redevelopment plan pursuant to this
section.
  SEC. 4.  Section 33607.5 of the Health and Safety Code is amended
to read:
   33607.5.  (a) (1) This section shall apply to each redevelopment
project area that, pursuant to a redevelopment plan which contains
the provisions required by Section 33670, is either: (A) adopted on
or after January 1, 1994, including later amendments to these
redevelopment plans; or (B) adopted prior to January 1, 1994, but
amended, after January 1, 1994, to include new territory. For plans
amended after January 1, 1994, only the tax increments from territory
added by the amendment shall be subject to this section. All the
amounts calculated pursuant to this section shall be calculated after
the amount required to be deposited in the Low and Moderate Income
Housing Fund pursuant to Sections 33334.2, 33334.3, and 33334.6 has
been deducted from the total amount of tax increment funds received
by the agency in the applicable fiscal year.
   (2) The payments made pursuant to this section shall be in
addition to any amounts the affected taxing entities receive pursuant
to subdivision (a) of Section 33670. The payments made pursuant to
this section to the affected taxing entities, including the
community, shall be allocated among the affected taxing entities,
including the community if the community elects to receive payments,
in proportion to the percentage share of property taxes each affected
taxing entity, including the community, receives during the fiscal
year the funds are allocated, which percentage share shall be
determined without regard to any amounts allocated to a city, a city
and county, or a county pursuant to Sections 97.68 and 97.70 of the
Revenue and Taxation Code, and without regard to any allocation
reductions to a city, a city and county, a county, a special
district, or a redevelopment agency pursuant to Sections 97.71,
97.72, and 97.73 of the Revenue and Taxation Code and Section
33681.12. The agency shall reduce its payments pursuant to this
section to an affected taxing entity by any amount the agency has
paid, directly or indirectly, pursuant to Section 33445, 33445.5,
33445.6, 33446, or any other provision of law other than this section
for, or in connection with, a public facility owned or leased by
that affected taxing agency, except: (A)  any amounts the agency has
paid directly or indirectly pursuant to an agreement with a taxing
entity adopted prior to January 1, 1994; or (B)  any amounts that are
unrelated to the specific project area or amendment governed by this
section. The reduction in a payment by an agency to a school
district, community college district, or county office of education,
or for special education, shall be subtracted only from the amount
that otherwise would be available for use by those entities for
educational facilities pursuant to paragraph (4). If the amount of
the reduction exceeds the amount that otherwise would have been
available for use for educational facilities in any one year, the
agency shall reduce its payment in more than one year.
   (3) If an agency reduces its payment to a school district,
community college district, or county office of education, or for
special education, the agency shall do all of the following:
   (A) Determine the amount of the total payment that would have been
made without the reduction.
   (B) Determine the amount of the total payment without the
reduction which: (i) would have been considered property taxes; and
(ii) would have been available to be used for educational facilities
pursuant to paragraph (4).
   (C) Reduce the amount available to be used for educational
facilities.
   (D) Send the payment to the school district, community college
district, or county office of education, or for special education,
with a statement that the payment is being reduced and including the
calculation required by this subdivision showing the amount to be
considered property taxes and the amount, if any, available for
educational facilities.
   (4) (A) Except as specified in subparagraph (E), of the total
amount paid each year pursuant to this section to school districts,
43.3 percent shall be considered to be property taxes for the
purposes of paragraph (1) of subdivision (h) of Section 42238 of the
Education Code, and 56.7 percent shall not be considered to be
property taxes for the purposes of that section and shall be
available to be used for educational facilities, including, in the
case of amounts paid during the 2011-12 fiscal year through the
2015-16 fiscal year, inclusive, land acquisition, facility
construction, reconstruction, remodeling, maintenance, or deferred
maintenance.
   (B) Except as specified in subparagraph (E), of the total amount
paid each year pursuant to this section to community college
districts, 47.5 percent shall be considered to be property taxes for
the purposes of Section 84751 of the Education Code, and 52.5 percent
shall not be considered to be property taxes for the purposes of
that section and shall be available to be used for educational
facilities, including, in the case of amounts paid during the 2011-12
fiscal year through the 2015-16 fiscal year, inclusive, land
acquisition, facility construction, reconstruction, remodeling,
maintenance, or deferred maintenance.
   (C) Except as specified in subparagraph (E), of the total amount
paid each year pursuant to this section to county offices of
education, 19 percent shall be considered to be property taxes for
the purposes of Section 2558 of the Education Code, and 81 percent
shall not be considered to be property taxes for the purposes of that
section and shall be available to be used for educational
facilities, including, in the case of amounts paid during the 2011-12
fiscal year through the 2015-16 fiscal year, inclusive, land
acquisition, facility construction, reconstruction, remodeling,
maintenance, or deferred maintenance.
   (D) Except as specified in subparagraph (E), of the total amount
paid each year pursuant to this section for special education, 19
percent shall be considered to be property taxes for the purposes of
Section 56712 of the Education Code, and 81 percent shall not be
considered to be property taxes for the purposes of that section and
shall be available to be used for education facilities, including, in
the case of amounts paid during the 2011-12 fiscal year through the
2015-16 fiscal year, inclusive, land acquisition, facility
construction, reconstruction, remodeling, maintenance, or deferred
maintenance.
   (E) If, pursuant to paragraphs (2) and (3), an agency reduces its
payments to an educational entity, the calculation made by the agency
pursuant to paragraph (3) shall determine the amount considered to
be property taxes and the amount available to be used for educational
facilities in the year the reduction was made.
   (5) Local education agencies that use funds received pursuant to
this section for school facilities shall spend these funds at schools
that are: (A) within the project area, (B) attended by students from
the project area, (C) attended by students generated by projects
that are assisted directly by the redevelopment agency, or (D)
determined by the governing board of a local education agency to be
of benefit to the project area.
   (b) Commencing with the first fiscal year in which the agency
receives tax increments and continuing through the last fiscal year
in which the agency receives tax increments, a redevelopment agency
shall pay to the affected taxing entities, including the community if
the community elects to receive a payment, an amount equal to 25
percent of the tax increments received by the agency after the amount
required to be deposited in the Low and Moderate Income Housing Fund
has been deducted. In any fiscal year in which the agency receives
tax increments, the community that has adopted the redevelopment
project area may elect to receive the amount authorized by this
paragraph.
   (c) Commencing with the 11th fiscal year in which the agency
receives tax increments and continuing through the last fiscal year
in which the agency receives tax increments, a redevelopment agency
shall pay to the affected taxing entities, other than the community
which has adopted the project, in addition to the amounts paid
pursuant to subdivision (b) and after deducting the amount allocated
to the Low and Moderate Income Housing Fund, an amount equal to 21
percent of the portion of tax increments received by the agency,
which shall be calculated by applying the tax rate against the amount
of assessed value by which the current year assessed value exceeds
the first adjusted base year assessed value. The first adjusted base
year assessed value is the assessed value of the project area in the
10th fiscal year in which the agency receives tax increment revenues.

   (d) Commencing with the 31st fiscal year in which the agency
receives tax increments and continuing through the last fiscal year
in which the agency receives tax increments, a redevelopment agency
shall pay to the affected taxing entities, other than the community
which has adopted the project, in addition to the amounts paid
pursuant to subdivisions (b) and (c) and after deducting the amount
allocated to the Low and Moderate Income Housing Fund, an amount
equal to 14 percent of the portion of tax increments received by the
agency, which shall be calculated by applying the tax rate against
the amount of assessed value by which the current year assessed value
exceeds the second adjusted base year assessed value. The second
adjusted base year assessed value is the assessed value of the
project area in the 30th fiscal year in which the agency receives tax
increments.
   (e) (1) Prior to incurring any loans, bonds, or other
indebtedness, except loans or advances from the community, the agency
may subordinate to the loans, bonds, or other indebtedness the
amount required to be paid to an affected taxing entity by this
section, provided that the affected taxing entity has approved these
subordinations pursuant to this subdivision.
   (2) At the time the agency requests an affected taxing entity to
subordinate the amount to be paid to it, the agency shall provide the
affected taxing entity with substantial evidence that sufficient
funds will be available to pay both the debt service and the payments
required by this section, when due.
   (3) Within 45 days after receipt of the agency's request, the
affected taxing entity shall approve or disapprove the request for
subordination. An affected taxing entity may disapprove a request for
subordination only if it finds, based upon substantial evidence,
that the agency will not be able to pay the debt payments and the
amount required to be paid to the affected taxing entity. If the
affected taxing entity does not act within 45 days after receipt of
the agency's request, the request to subordinate shall be deemed
approved and shall be final and conclusive.
   (f) (1) The Legislature finds and declares both of the following:
   (A) The payments made pursuant to this section are necessary in
order to alleviate the financial burden and detriment that affected
taxing entities may incur as a result of the adoption of a
redevelopment plan, and payments made pursuant to this section will
benefit redevelopment project areas.
   (B) The payments made pursuant to this section are the exclusive
payments that are required to be made by a redevelopment agency to
affected taxing entities during the term of a redevelopment plan.
   (2) Notwithstanding any other provision of law, a redevelopment
agency shall not be required, either directly or indirectly, as a
measure to mitigate a significant environmental effect or as part of
any settlement agreement or judgment brought in any action to contest
the validity of a redevelopment plan pursuant to Section 33501, to
make any other payments to affected taxing entities, or to pay for
public facilities that will be owned or leased to an affected taxing
entity.
   (g) As used in this section, a "local education agency" is a
school district, a community college district, or a county office of
education.
  SEC. 5.  Section 33607.7 of the Health and Safety Code is amended
to read:
   33607.7.  (a) This section shall apply to a redevelopment plan
amendment for any redevelopment plans adopted prior to January 1,
1994, that increases the limitation on the number of dollars to be
allocated to the redevelopment agency or that increases, or
eliminates pursuant to paragraph (1) of subdivision (e) of Section
33333.6, the time limit on the establishing of loans, advances, and
indebtedness established pursuant to paragraphs (1) and (2) of
subdivision (a) of Section 33333.6, as those paragraphs read on
December 31, 2001, or that lengthens the period during which the
redevelopment plan is effective if the redevelopment plan being
amended contains the provisions required by subdivision (b) of
Section 33670. However, this section shall not apply to those
redevelopment plans that add new territory.
   (b) If a redevelopment agency adopts an amendment that is governed
by the provisions of this section, it shall pay to each affected
taxing entity either of the following:
   (1) If an agreement exists that requires payments to the taxing
entity, the amount required to be paid by an agreement between the
agency and an affected taxing entity entered into prior to January 1,
1994.
   (2) If an agreement does not exist, the amounts required pursuant
to subdivisions (b), (c), (d), and (e) of Section 33607.5, until
termination of the redevelopment plan, calculated against the amount
of assessed value by which the current year assessed value exceeds an
adjusted base year assessed value. The amounts shall be allocated
between property taxes and educational facilities, including, in the
case of amounts paid during the 2011-12 fiscal year through the
2015-16 fiscal year, inclusive, land acquisition, facility
construction, reconstruction, remodeling, maintenance, or deferred
maintenance, according to the appropriate formula in paragraph (3) of
subdivision (a) of Section 33607.5. In determining the applicable
amount under Section 33607.5, the first fiscal year shall be the
first fiscal year following the fiscal year in which the adjusted
base year value is determined.
   (c) The adjusted base year assessed value shall be the assessed
value of the project area in the year in which the limitation being
amended would have taken effect without the amendment or, if more
than one limitation is being amended, the first year in which one or
more of the limitations would have taken effect without the
amendment. The agency shall commence making these payments pursuant
to the terms of the agreement, if applicable, or, if an agreement
does not exist, in the first fiscal year following the fiscal year in
which the adjusted base year value is determined.
  SEC. 6.  Part 1.8 (commencing with Section 34161) is added to
Division 24 of the Health and Safety Code, to read:

      PART 1.8.  RESTRICTIONS ON REDEVELOPMENT AGENCY OPERATIONS


      CHAPTER 1.  SUSPENSION OF AGENCY ACTIVITIES AND PROHIBITION ON
CREATION OF NEW DEBTS


   34161.  Notwithstanding Part 1 (commencing with Section 33000),
Part 1.5 (commencing with Section 34000), Part 1.6 (commencing with
Section 34050), and Part 1.7 (commencing with Section 34100), or any
other law, commencing on the effective date of this part, no agency
shall incur new or expand existing monetary or legal obligations
except as provided in this part. All of the provisions of this part
shall take effect and be operative on the effective date of the act
adding this part.
   34162.  (a) Notwithstanding Part 1 (commencing with Section
33000), Part 1.5 (commencing with Section 34000), Part 1.6
(commencing with Section 34050), and Part 1.7 (commencing with
Section 34100), or any other law, commencing on the effective date of
this act, an agency shall be unauthorized and shall not take any
action to incur indebtedness, including, but not limited to, any of
the following:
   (1) Issue or sell bonds, for any purpose, regardless of the source
of repayment of the bonds. As used in this section, the term "bonds,"
includes, but is not limited to, any bonds, notes, bond anticipation
notes, interim certificates, debentures, certificates of
participation, refunding bonds, or other obligations issued by an
agency pursuant to Part 1 (commencing with Section 33000), and
Section 53583 of the Government Code, pursuant to any charter city
authority or any revenue bond law.
   (2) Incur indebtedness payable from prohibited sources of
repayment, which include, but are not limited to, income and revenues
of an agency's redevelopment projects, taxes allocated to the
agency, taxes imposed by the agency pursuant to Section 7280.5 of the
Revenue and Taxation Code, assessments imposed by the agency, loan
repayments made to the agency pursuant to Section 33746, fees or
charges imposed by the agency, other revenues of the agency, and any
contributions or other financial assistance from the state or federal
government.
   (3) Refund, restructure, or refinance indebtedness or obligations
that existed as of January 1, 2011, including, but not limited to,
any of the following:
   (A) Refund bonds previously issued by the agency or by another
political subdivision of the state, including, but not limited to,
those issued by a city, a housing authority, or a nonprofit
corporation acting on behalf of a city or a housing authority.
   (B) Exercise the right of optional redemption of any of its
outstanding bonds or elect to purchase any of its own outstanding
bonds.
   (C) Modify or amend the terms and conditions, payment schedules,
amortization or maturity dates of any of the agency's bonds or other
obligations that are outstanding or exist as of January 1, 2011.
   (4) Take out or accept loans or advances, for any purpose, from
the state or the federal government, any other public agency, or any
private lending institution, or from any other source. For purposes
of this section, the term "loans" include, but are not limited to,
agreements with the community or any other entity for the purpose of
refinancing a redevelopment project and moneys advanced to the agency
by the community or any other entity for the expenses of
redevelopment planning, expenses for dissemination of redevelopment
information, other administrative expenses, and overhead of the
agency.
   (5) Execute trust deeds or mortgages on any real or personal
property owned or acquired by it.
   (6) Pledge or encumber, for any purpose, any of its revenues or
assets. As used in this part, an agency's "revenues and assets"
include, but are not limited to, agency tax revenues, redevelopment
project revenues, other agency revenues, deeds of trust and mortgages
held by the agency, rents, fees, charges, moneys, accounts
receivable, contracts rights, and other rights to payment of whatever
kind or other real or personal property. As used in this part, to
"pledge or encumber" means to make a commitment of, by the grant of a
lien on and a security interest in, an agency's revenues or assets,
whether by resolution, indenture, trust agreement, loan agreement,
lease, installment sale agreement, reimbursement agreement, mortgage,
deed of trust, pledge agreement, or similar agreement in which the
pledge is provided for or created.
            (b) Any actions taken that conflict with this section are
void from the outset and shall have no force or effect.
   (c) Notwithstanding subdivision (a), a redevelopment agency may
issue refunding bonds, which are referred to in this part as
Emergency Refunding Bonds, only where all of the following conditions
are met:
   (1) The issuance of Emergency Refunding Bonds is the only means
available to the agency to avoid a default on outstanding agency
bonds.
   (2) Both the county treasurer and the Treasurer have approved the
issuance of Emergency Refunding Bonds.
   (3) Emergency Refunding Bonds are issued only to provide funds for
any single debt service payment that is due prior to October 1,
2011, and that is more than 20 percent larger than a level debt
service payment would be for that bond.
   (4) The principal amount of outstanding agency bonds is not
increased.
   34163.  Notwithstanding Part 1 (commencing with Section 33000),
Part 1.5 (commencing with Section 34000), Part 1.6 (commencing with
Section 34050), and Part 1.7 (commencing with Section 34100), or any
other law, commencing on the effective date of this part, an agency
shall not have the authority to, and shall not, do any of the
following:
   (a) Make loans or advances or grant or enter into agreements to
provide funds or provide financial assistance of any sort to any
entity or person for any purpose, including, but not limited to, all
of the following:
   (1) Loans of moneys or any other thing of value or commitments to
provide financing to nonprofit organizations to provide those
organizations with financing for the acquisition, construction,
rehabilitation, refinancing, or development of multifamily rental
housing or the acquisition of commercial property for lease, each
pursuant to Chapter 7.5 (commencing with Section 33741) of Part 1.
   (2) Loans of moneys or any other thing of value for residential
construction, improvement, or rehabilitation pursuant to Chapter 8
(commencing with Section 33750) of Part 1. These include, but are not
limited to, construction loans to purchasers of residential housing,
mortgage loans to purchasers of residential housing, and loans to
mortgage lenders, or any other entity, to aid in financing pursuant
to Chapter 8 (commencing with Section 33750).
   (3) The purchase, by an agency, of mortgage or construction loans
from mortgage lenders or from any other entities.
   (b) Enter into contracts with, incur obligations, or make
commitments to, any entity, whether governmental, tribal, or private,
or any individual or groups of individuals for any purpose,
including, but not limited to, loan agreements, passthrough
agreements, regulatory agreements, services contracts, leases,
disposition and development agreements, joint exercise of powers
agreements, contracts for the purchase of capital equipment,
agreements for redevelopment activities, including, but not limited
to, agreements for planning, design, redesign, development,
demolition, alteration, construction, reconstruction, rehabilitation,
site remediation, site development or improvement, removal of
graffiti, land clearance, and seismic retrofits.
   (c) Amend or modify existing agreements, obligations, or
commitments with any entity, for any purpose, including, but not
limited to, any of the following:
   (1) Renewing or extending term of leases or other agreements,
except that the agency may extend lease space for its own use to a
date not to exceed six months after the effective date of the act
adding this part and for a rate no more than 5 percent above the rate
the agency currently pays on a monthly basis.
   (2) Modifying terms and conditions of existing agreements,
obligations, or commitments.
   (3) Forgiving all or any part of the balance owed to the agency on
existing loans or extend the term or change the terms and conditions
of existing loans.
   (4) Increasing its deposits to the Low and Moderate Income Housing
Fund created pursuant to Section 33334.3 beyond the minimum level
that applied to it as of January 1, 2011.
   (5) Transferring funds out of the Low and Moderate Income Housing
Fund, except to meet the minimum housing-related obligations that
existed as of January 1, 2011, to make required payments under
Sections 33690 and 33690.5, and to borrow funds pursuant to Section
34168.5.
   (d) Dispose of assets by sale, long-term lease, gift, grant,
exchange, transfer, assignment, or otherwise, for any purpose,
including, but not limited to, any of the following:
   (1) Assets, including, but not limited to, real property, deeds of
trust, and mortgages held by the agency, moneys, accounts
receivable, contract rights, proceeds of insurance claims, grant
proceeds, settlement payments, rights to receive rents, and any other
rights to payment of whatever kind.
   (2) Real property, including, but not limited to, land, land under
water and waterfront property, buildings, structures, fixtures, and
improvements on the land, any property appurtenant to, or used in
connection with, the land, every estate, interest, privilege,
easement, franchise, and right in land, including rights-of-way,
terms for years, and liens, charges, or encumbrances by way of
judgment, mortgage, or otherwise, and the indebtedness secured by the
liens.
   (e) Acquire real property by any means for any purpose, including,
but not limited to, the purchase, lease, or exercising of an option
to purchase or lease, exchange, subdivide, transfer, assume, obtain
option upon, acquire by gift, grant, bequest, devise, or otherwise
acquire any real property, any interest in real property, and any
improvements on it, including the repurchase of developed property
previously owned by the agency and the acquisition of real property
by eminent domain; provided, however, that nothing in this
subdivision is intended to prohibit the acceptance or transfer of
title for real property acquired prior to the effective date of this
part.
   (f) Transfer, assign, vest, or delegate any of its assets, funds,
rights, powers, ownership interests, or obligations for any purpose
to any entity, including, but not limited to, the community, the
legislative body, another member of a joint powers authority, a
trustee, a receiver, a partner entity, another agency, a nonprofit
corporation, a contractual counterparty, a public body, a
limited-equity housing cooperative, the state, a political
subdivision of the state, the federal government, any private entity,
or an individual or group of individuals.
   (g) Accept financial or other assistance from the state or federal
government or any public or private source if the acceptance
necessitates or is conditioned upon the agency incurring indebtedness
as that term is described in this part.
   34164.  Notwithstanding Part 1 (commencing with Section 33000),
Part 1.5 (commencing with Section 34000), Part 1.6 (commencing with
Section 34050), and Part 1.7 (commencing with Section 34100), or any
other law, commencing on the effective date of this part, an agency
shall lack the authority to, and shall not, engage in any of the
following redevelopment activities:
   (a) Prepare, approve, adopt, amend, or merge a redevelopment plan,
including, but not limited to, modifying, extending, or otherwise
changing the time limits on the effectiveness of a redevelopment
plan.
   (b) Create, designate, merge, expand, or otherwise change the
boundaries of a project area.
   (c) Designate a new survey area or modify, extend, or otherwise
change the boundaries of an existing survey area.
   (d) Approve or direct or cause the approval of any program,
project, or expenditure where approval is not required by law.
   (e) Prepare, formulate, amend, or otherwise modify a preliminary
plan or cause the preparation, formulation, modification, or
amendment of a preliminary plan.
   (f) Prepare, formulate, amend, or otherwise modify an
implementation plan or cause the preparation, formulation,
modification, or amendment of an implementation plan.
   (g) Prepare, formulate, amend, or otherwise modify a relocation
plan or cause the preparation, formulation, modification, or
amendment of a relocation plan where approval is not required by law.

   (h) Prepare, formulate, amend, or otherwise modify a redevelopment
housing plan or cause the preparation, formulation, modification, or
amendment of a redevelopment housing plan.
   (i) Direct or cause the development, rehabilitation, or
construction of housing units within the community, unless required
to do so by an enforceable obligation.
   (j) Make or modify a declaration or finding of blight, blighted
areas, or slum and blighted residential areas.
   (k) Make any new findings or declarations that any areas of blight
cannot be remedied or redeveloped by private enterprise alone.
   (l) Provide or commit to provide relocation assistance, except
where the provision of relocation assistance is required by law.
   (m) Provide or commit to provide financial assistance.
   34165.  Notwithstanding Part 1 (commencing with Section 33000),
Part 1.5 (commencing with Section 34000), Part 1.6 (commencing with
Section 34050), and Part 1.7 (commencing with Section 34100), or any
other law, commencing on the effective date of this part, an agency
shall lack the authority to, and shall not, do any of the following:
   (a) Enter into new partnerships, become a member in a joint powers
authority, form a joint powers authority, create new entities, or
become a member of any entity of which it is not currently a member,
nor take on nor agree to any new duties or obligations as a member or
otherwise of any entity to which the agency belongs or with which it
is in any way associated.
   (b) Impose new assessments pursuant to Section 7280.5 of the
Revenue and Taxation Code.
   (c) Increase the pay, benefits, or contributions of any sort for
any officer, employee, consultant, contractor, or any other goods or
service provider that had not previously been contracted.
   (d) Provide optional or discretionary bonuses to any officers,
employees, consultants, contractors, or any other service or goods
providers.
   (e) Increase numbers of staff employed by the agency beyond the
number employed as of January 1, 2011.
   (f) Bring an action pursuant to Chapter 9 (commencing with Section
860) of Title 10 of Part 2 of the Code of Civil Procedure to
determine the validity of any issuance or proposed issuance of
revenue bonds under this chapter and the legality and validity of all
proceedings previously taken or proposed in a resolution of an
agency to be taken for the authorization, issuance, sale, and
delivery of the revenue bonds and for the payment of the principal
thereof and interest thereon.
   (g) Begin any condemnation proceeding or begin the process to
acquire real property by eminent domain.
   (h) Prepare or have prepared a draft environmental impact report.
This subdivision shall not alter or eliminate any requirements of the
California Environmental Quality Act (Division 13 (commencing with
Section 21000) of the Public Resources Code).
   34166.  No legislative body or local governmental entity shall
have any statutory authority to create or otherwise establish a new
redevelopment agency or community development commission. No
chartered city or chartered county shall exercise the powers granted
in Part 1 (commencing with Section 33000) to create or otherwise
establish a redevelopment agency.
   34167.  (a) This part is intended to preserve, to the maximum
extent possible, the revenues and assets of redevelopment agencies so
that those assets and revenues that are not needed to pay for
enforceable obligations may be used by local governments to fund core
governmental services including police and fire protection services
and schools. It is the intent of the Legislature that redevelopment
agencies take no actions that would further deplete the corpus of the
agencies' funds regardless of their original source. All provisions
of this part shall be construed as broadly as possible to support
this intent and to restrict the expenditure of funds to the fullest
extent possible.
   (b) For purposes of this part, "agency" or "redevelopment agency"
means a redevelopment agency created or formed pursuant to Part 1
(commencing with Section 33000) or its predecessor or a community
development commission created or formed pursuant to Part 1.7
(commencing with Section 34100) or its predecessor.
   (c) Nothing in this part in any way impairs the authority of a
community development commission, other than in its authority to act
as a redevelopment agency, to take any actions in its capacity as a
housing authority or for any other community development purpose of
the jurisdiction in which it operates.
   (d) For purposes of this part, "enforceable obligation" means any
of the following:
   (1) Bonds, as defined by Section 33602 and bonds issued pursuant
to Section 5850 of the Government Code, including the required debt
service, reserve set-asides and any other payments required under the
indenture or similar documents governing the issuance of the
outstanding bonds of the redevelopment agency.
   (2) Loans of moneys borrowed by the redevelopment agency for a
lawful purpose, including, but not limited to, moneys borrowed from
the Low and Moderate Income Housing Fund, to the extent they are
legally required to be repaid pursuant to a required repayment
schedule or other mandatory loan terms.
   (3) Payments required by the federal government, preexisting
obligations to the state or obligations imposed by state law, other
than passthrough payments that are made by the county
auditor-controller pursuant to Section 34183, or legally enforceable
payments required in connection with the agencies' employees,
including, but not limited to, pension payments, pension obligation
debt service, and unemployment payments.
   (4) Judgments or settlements entered by a competent court of law
or binding arbitration decisions against the former redevelopment
agency, other than passthrough payments that are made by the county
auditor-controller pursuant to Section 34183. Along with the
successor agency, the oversight board shall have the authority and
standing to appeal any judgment or to set aside any settlement or
arbitration decision.
   (5) Any legally binding and enforceable agreement or contract that
is not otherwise void as violating the debt limit or public policy.
   (6) Contracts or agreements necessary for the continued
administration or operation of the redevelopment agency to the extent
permitted by this part, including, but not limited to, agreements to
purchase or rent office space, equipment and supplies, and
pay-related expenses pursuant to Section 33127 and for carrying
insurance pursuant to Section 33134.
   (e) To the extent that any provision of Part 1 (commencing with
Section 33000), Part 1.5 (commencing with Section 34000), Part 1.6
(commencing with Section 34050), or Part 1.7 (commencing with Section
34100) conflicts with this part, the provisions of this part shall
control. Further, if any provision in Part 1 (commencing with Section
33000), Part 1.5 (commencing with Section 34000), Part 1.6
(commencing with Section 34050), or Part 1.7 (commencing with Section
34100) provides an authority that this part is restricting or
eliminating, the restriction and elimination provisions of this part
shall control.
   (f) Nothing in this part shall be construed to interfere with a
redevelopment agency's authority, pursuant to enforceable obligations
as defined in this chapter, to (1) make payments due, (2) enforce
existing covenants and obligations, or (3) perform its obligations.
   (g) The existing terms of any memorandum of understanding with an
employee organization representing employees of a redevelopment
agency adopted pursuant to the Meyers-Milias-Brown Act that is in
force on the effective date of this part shall continue in force
until September 30, 2011, unless a new agreement is reached with a
recognized employee organization prior to that date.
   (h) After the enforceable obligation payment schedule is adopted
pursuant to Section 34169, or after 60 days from the effective date
of this part, whichever is sooner, the agency shall not make a
payment unless it is listed in an adopted enforceable obligation
payment schedule, other than payments required to meet obligations
with respect to bonded indebtedness.
   (i) The Department of Finance and the Controller shall each have
the authority to require any documents associated with the
enforceable obligations to be provided to them in a manner of their
choosing. Any taxing entity, the department, and the Controller shall
each have standing to file a judicial action to prevent a violation
under this part and to obtain injunctive or other appropriate relief.

   (j) For purposes of this part, "auditor-controller" means the
officer designated in subdivision (e) of Section 24000 of the
Government Code.
   34167.5.  Commencing on the effective date of the act adding this
part, the Controller shall review the activities of redevelopment
agencies in the state to determine whether an asset transfer has
occurred after January 1, 2011, between the city or county, or city
and county that created a redevelopment agency or any other public
agency, and the redevelopment agency. If such an asset transfer did
occur during that period and the government agency that received the
assets is not contractually committed to a third party for the
expenditure or encumbrance of those assets, to the extent not
prohibited by state and federal law, the Controller shall order the
available assets to be returned to the redevelopment agency or, on or
after October 1, 2011, to the successor agency, if a successor
agency is established pursuant to Part 1.85 (commencing with Section
34170). Upon receiving such an order from the Controller, an affected
local agency shall, as soon as practicable, reverse the transfer and
return the applicable assets to the redevelopment agency or, on or
after October 1, 2011, to the successor agency, if a successor agency
is established pursuant to Part 1.85 (commencing with Section
34170). The Legislature hereby finds that a transfer of assets by a
redevelopment agency during the period covered in this section is
deemed not to be in the furtherance of the Community Redevelopment
Law and is thereby unauthorized.
   34168.  (a) Notwithstanding any other law, any action contesting
the validity of this part or Part 1.85 (commencing with Section
34170) or challenging acts taken pursuant to these parts shall be
brought in the Superior Court of the County of Sacramento.
   (b) If any provision of this part or the application thereof to
any person or circumstance is held invalid, the invalidity does not
affect other provisions or applications of this part which can be
given effect without the invalid provision or application, and to
this end, the provisions of this part are severable.
      CHAPTER 2.  REDEVELOPMENT AGENCY RESPONSIBILITIES


   34169.  Until successor agencies are authorized pursuant to Part
1.85 (commencing with Section 34170), redevelopment agencies shall do
all of the following:
   (a) Continue to make all scheduled payments for enforceable
obligations, as defined in subdivision (d) of Section 34167.
   (b) Perform obligations required pursuant to any enforceable
obligations, including, but not limited to, observing covenants for
continuing disclosure obligations and those aimed at preserving the
tax-exempt status of interest payable on any outstanding agency
bonds.
   (c) Set aside or maintain reserves in the amount required by
indentures, trust indentures, or similar documents governing the
issuance of outstanding redevelopment agency bonds.
   (d) Consistent with the intent declared in subdivision (a) of
Section 34167, preserve all assets, minimize all liabilities, and
preserve all records of the redevelopment agency.
   (e) Cooperate with the successor agencies, if established pursuant
to Part 1.85 (commencing with Section 34170), and provide all
records and information necessary or desirable for audits, making of
payments required by enforceable obligations, and performance of
enforceable obligations by the successor agencies.
   (f) Take all reasonable measures to avoid triggering an event of
default under any enforceable obligations as defined in subdivision
(d) of Section 34167.
   (g) (1) Within 60 days of the effective date of this part, adopt
an Enforceable Obligation Payment Schedule that lists all of the
obligations that are enforceable within the meaning of subdivision
(d) of Section 34167 which includes the following information about
each obligation:
   (A) The project name associated with the obligation.
   (B) The payee.
   (C) A short description of the nature of the work, product,
service, facility, or other thing of value for which payment is to be
made.
   (D) The amount of payments obligated to be made, by month, through
December 2011.
   (2) Payment schedules for issued bonds may be aggregated, and
payment schedules for payments to employees may be aggregated. This
schedule shall be adopted at a public meeting and shall be posted on
the agency's Internet Web site or, if no Internet Web site exists, on
the Internet Web site of the legislative body, if that body has an
Internet Web site. The schedule may be amended at any public meeting
of the agency. Amendments shall be posted to the Internet Web site
for at least three business days before a payment may be made
pursuant to an amendment. The Enforceable Obligation Payment Schedule
shall be transmitted by mail or electronic means to the county
auditor-controller, the Controller, and the Department of Finance. A
notification providing the Internet Web site location of the posted
schedule and notifications of any amendments shall suffice to meet
this requirement.
   (h) Prepare a preliminary draft of the initial recognized
obligation payment schedule, no later than September 30, 2011, and
provide it to the successor agency, if a successor agency is
established pursuant to Part 1.85 (commencing with Section 34170).
   (i) The Department of Finance may review a redevelopment agency
action taken pursuant to subdivision (g) or (h). As such, all agency
actions shall not be effective for three business days, pending a
request for review by the department. Each agency shall designate an
official to whom the department may make these requests and who shall
provide the department with the telephone number and e-mail contact
information for the purpose of communicating with the department
pursuant to this subdivision. In the event that the department
requests a review of a given agency action, the department shall have
10 days from the date of its request to approve the agency action or
return it to the agency for reconsideration and this action shall
not be effective until approved by the department. In the event that
the department returns the agency action to the agency for
reconsideration, the agency must resubmit the modified action for
department approval and the modified action shall not become
effective until approved by the department. This subdivision shall
apply to a successor agency, if a successor agency is established
pursuant to Part 1.85 (commencing with Section 34170), as a successor
entity to a dissolved redevelopment agency, with respect to the
preliminary draft of the initial recognized obligation payment
schedule.
      CHAPTER 3.  APPLICATION OF PART TO FORMER PARTICIPANTS OF THE
ALTERNATIVE VOLUNTARY REDEVELOPMENT PROGRAM


   34169.5.  (a) It is the intent of the Legislature that a
redevelopment agency, that formerly operated pursuant to the
Alternative Voluntary Redevelopment Program (Part 1.9 (commencing
with Section 34192)), but that becomes subject to this part pursuant
to Section 34195, shall be subject to all of the requirements of this
part, except that dates and deadlines shall be appropriately
modified, as provided in this section, to reflect the date that the
agency becomes subject to this part.
   (b) For purposes of a redevelopment agency that becomes subject to
this part pursuant to Section 34195, the following shall apply:
   (1) Any reference to "January 1, 2011," shall be construed to mean
January 1 of the year preceding the year that the redevelopment
agency became subject to this part, but no earlier than January 1,
2011.
   (2) Any reference to a date "60 days from the effective date of
this part" shall be construed to mean 60 days from the date that the
redevelopment agency becomes subject to this part.
   (3) Except as provided in paragraphs (1) and (2), any reference to
a date certain shall be construed to be the date, measured from the
date that the redevelopment agency became subject to this part, that
is equivalent to the duration of time between the effective date of
this part and the date certain identified in statute.
  SEC. 7.  Part 1.85 (commencing with Section 34170) is added to
Division 24 of the Health and Safety Code, to read:

      PART 1.85.  DISSOLUTION OF REDEVELOPMENT AGENCIES AND
DESIGNATION OF SUCCESSOR AGENCIES


      CHAPTER 1.  EFFECTIVE DATE, CREATION OF FUNDS, AND DEFINITION
OF TERMS


   34170.  (a) Unless otherwise specified, all provisions of this
part shall become operative on October 1, 2011.
   (b) If any provision of this part or the application thereof to
any person or circumstance is held invalid, the invalidity shall not
affect other provisions or applications of this part which can be
given effect without the invalid provision or application, and to
this end, the provisions of this part are severable.
   34170.5.  (a) The successor agency shall create within its
treasury a Redevelopment Obligation Retirement Fund to be
administered by the successor agency.
   (b) The county auditor-controller shall create within the county
treasury a Redevelopment Property Tax Trust Fund for the property tax
revenues related to each former redevelopment agency, for
administration by the county auditor-controller.
   34171.  The following terms shall have the following meanings:
   (a) "Administrative budget" means the budget for administrative
costs of the successor agencies as provided in Section 34177.
   (b) "Administrative cost allowance" means an amount that, subject
to the approval of the oversight board, is payable from property tax
revenues of up to 5 percent of the property tax allocated to the
successor agency for the 2011-12 fiscal year and up to 3 percent of
the property tax allocated to the Redevelopment Obligation Retirement
Fund money that is allocated to the successor agency for each fiscal
year thereafter; provided, however, that the amount shall not be
less than two hundred fifty thousand dollars ($250,000) for any
fiscal year or such lesser amount as agreed
                to by the successor agency. However, the allowance
amount shall exclude any administrative costs that can be paid from
bond proceeds or from sources other than property tax.
   (c) "Designated local authority" shall mean a public entity formed
pursuant to subdivision (d) of Section 34173.
   (d) (1) "Enforceable obligation" means any of the following:
   (A) Bonds, as defined by Section 33602 and bonds issued pursuant
to Section 58383 of the Government Code, including the required debt
service, reserve set-asides, and any other payments required under
the indenture or similar documents governing the issuance of the
outstanding bonds of the former redevelopment agency.
   (B) Loans of moneys borrowed by the redevelopment agency for a
lawful purpose, to the extent they are legally required to be repaid
pursuant to a required repayment schedule or other mandatory loan
terms.
   (C) Payments required by the federal government, preexisting
obligations to the state or obligations imposed by state law, other
than passthrough payments that are made by the county
auditor-controller pursuant to Section 34183, or legally enforceable
payments required in connection with the agencies' employees,
including, but not limited to, pension payments, pension obligation
debt service, unemployment payments, or other obligations conferred
through a collective bargaining agreement.
   (D) Judgments or settlements entered by a competent court of law
or binding arbitration decisions against the former redevelopment
agency, other than passthrough payments that are made by the county
auditor-controller pursuant to Section 34183. Along with the
successor agency, the oversight board shall have the authority and
standing to appeal any judgment or to set aside any settlement or
arbitration decision.
   (E) Any legally binding and enforceable agreement or contract that
is not otherwise void as violating the debt limit or public policy.
However, nothing in this act shall prohibit either the successor
agency, with the approval or at the direction of the oversight board,
or the oversight board itself from terminating any existing
agreements or contracts and providing any necessary and required
compensation or remediation for such termination.
   (F) Contracts or agreements necessary for the administration or
operation of the successor agency, in accordance with this part,
including, but not limited to, agreements to purchase or rent office
space, equipment and supplies, and pay-related expenses pursuant to
Section 33127 and for carrying insurance pursuant to Section 33134.
   (G) Amounts borrowed from or payments owing to the Low and
Moderate Income Housing Fund of a redevelopment agency, which had
been deferred as of the effective date of the act adding this part;
provided, however, that the repayment schedule is approved by the
oversight board.
   (2) For purposes of this part, "enforceable obligation" does not
include any agreements, contracts, or arrangements between the city,
county, or city and county that created the redevelopment agency and
the former redevelopment agency. However, written agreements entered
into (A) at the time of issuance, but in no event later than December
31, 2010, of indebtedness obligations, and (B) solely for the
purpose of securing or repaying those indebtedness obligations may be
deemed enforceable obligations for purposes of this part.
Notwithstanding this paragraph, loan agreements entered into between
the redevelopment agency and the city, county, or city and county
that created it, within two years of the date of creation of the
redevelopment agency, may be deemed to be enforceable obligations.
   (3) Contracts or agreements between the former redevelopment
agency and other public agencies, to perform services or provide
funding for governmental or private services or capital projects
outside of redevelopment project areas that do not provide benefit to
the redevelopment project and thus were not properly authorized
under Part 1 (commencing with Section 33000) shall be deemed void on
the effective date of this part; provided, however, that such
contracts or agreements for the provision of housing properly
authorized under Part 1 (commencing with Section 33000) shall not be
deemed void.
   (e) "Indebtedness obligations" means bonds, notes, certificates of
participation, or other evidence of indebtedness, issued or
delivered by the redevelopment agency, or by a joint exercise of
powers authority created by the redevelopment agency, to third-party
investors or bondholders to finance or refinance redevelopment
projects undertaken by the redevelopment agency in compliance with
the Community Redevelopment Law (Part 1 (commencing with Section
33000)).
   (f) "Oversight board" shall mean each entity established pursuant
to Section 34179.
   (g) "Recognized obligation" means an obligation listed in the
Recognized Obligation Payment Schedule.
   (h) "Recognized Obligation Payment Schedule" means the document
setting forth the minimum payment amounts and due dates of payments
required by enforceable obligations for each six-month fiscal period
as provided in subdivision (m) of Section 34177.
   (i) "School entity" means any entity defined as such in
subdivision (f) of Section 95 of the Revenue and Taxation Code.
   (j) "Successor agency" means the county, city, or city and county
that authorized the creation of each redevelopment agency or another
entity as provided in Section 34173.
   (k) "Taxing entities" means cities, counties, a city and county,
special districts, and school entities, as defined in subdivision (f)
of Section 95 of the Revenue and Taxation Code, that receive
passthrough payments and distributions of property taxes pursuant to
the provisions of this part.
      CHAPTER 2.  EFFECT OF REDEVELOPMENT AGENCY DISSOLUTION


   34172.  (a) (1) All redevelopment agencies and redevelopment
agency components of community development agencies created under
Part 1 (commencing with Section 33000), Part 1.5 (commencing with
Section 34000), Part 1.6 (commencing with Section 34050), and Part
1.7 (commencing with Section 34100) that were in existence on the
effective date of this part are hereby dissolved and shall no longer
exist as a public body, corporate or politic. Nothing in this part
dissolves or otherwise affects the authority of a community
redevelopment commission, other than in its authority to act as a
redevelopment agency, in its capacity as a housing authority or for
any other community development purpose of the jurisdiction in which
it operates. For those other nonredevelopment purposes, the community
development commission derives its authority solely from federal or
local laws, or from state laws other than the Community Redevelopment
Law (Part 1 (commencing with Section 33000)).
   (2) A community in which an agency has been dissolved under this
section may not create a new agency pursuant to Part 1 (commencing
with Section 33000), Part 1.5 (commencing with Section 34000), Part
1.6 (commencing with Section 34050), or Part 1.7 (commencing with
Section 34100). However, a community in which the agency has been
dissolved and the successor entity has paid off all of the former
agency's enforceable obligations may create a new agency pursuant to
Part 1 (commencing with Section 33000), Part 1.5 (commencing with
Section 34000), Part 1.6 (commencing with Section 34050), or Part 1.7
(commencing with Section 34100), subject to the tax increment
provisions contained in Chapter 3.5 (commencing with Section 34194.5)
of Part 1.9 (commencing with Section 34192).
   (b) All authority to transact business or exercise powers
previously granted under the Community Redevelopment Law (Part 1
(commencing with Section 33000) is hereby withdrawn from the former
redevelopment agencies.
   (c) Solely for purposes of Section 16 of Article XVI of the
California Constitution, the Redevelopment Property Tax Trust Fund
shall be deemed to be a special fund of the dissolved redevelopment
agency to pay the principal of and interest on loans, moneys advanced
to, or indebtedness, whether funded, refunded, assumed, or otherwise
incurred by the redevelopment agency to finance or refinance, in
whole or in part, the redevelopment projects of each redevelopment
agency dissolved pursuant to this part.
   (d) Revenues equivalent to those that would have been allocated
pursuant to subdivision (b) of Section 16 of Article XVI of the
California Constitution shall be allocated to the Redevelopment
Property Tax Trust Fund of each successor agency for making payments
on the principal of and interest on loans, and moneys advanced to or
indebtedness incurred by the dissolved redevelopment agencies.
Amounts in excess of those necessary to pay obligations of the former
redevelopment agency shall be deemed to be property tax revenues
within the meaning of subdivision (a) of Section 1 of Article XIII A
of the California Constitution.
   34173.  (a) Successor agencies, as defined in this part, are
hereby designated as successor entities to the former redevelopment
agencies.
   (b) Except for those provisions of the Community Redevelopment Law
that are repealed, restricted, or revised pursuant to the act adding
this part, all authority, rights, powers, duties, and obligations
previously vested with the former redevelopment agencies, under the
Community Redevelopment Law, are hereby vested in the successor
agencies.
   (c) (1) Where the redevelopment agency was in the form of a joint
powers authority, and where the joint powers agreement governing the
formation of the joint powers authority addresses the allocation of
assets and liabilities upon dissolution of the joint powers
authority, then each of the entities that created the former
redevelopment agency may be a successor agency within the meaning of
this part and each shall have a share of assets and liabilities based
on the provisions of the joint powers agreement.
   (2) Where the redevelopment agency was in the form of a joint
powers authority, and where the joint powers agreement governing the
formation of the joint powers authority does not address the
allocation of assets and liabilities upon dissolution of the joint
powers authority, then each of the entities that created the former
redevelopment agency may be a successor agency within the meaning of
this part, a proportionate share of the assets and liabilities shall
be based on the assessed value in the project areas within each
entity's jurisdiction, as determined by the county assessor, in its
jurisdiction as compared to the assessed value of land within the
boundaries of the project areas of the former redevelopment agency.
   (d) (1) A city, county, city and county, or the entities forming
the joint powers authority that authorized the creation of each
redevelopment agency may elect not to serve as a successor agency
under this part. A city, county, city and county, or any member of a
joint powers authority that elects not to serve as a successor agency
under this part must file a copy of a duly authorized resolution of
its governing board to that effect with the county auditor-controller
no later than one month prior to the effective date of this part.
   (2) The determination of the first local agency that elects to
become the successor agency shall be made by the county
auditor-controller based on the earliest receipt by the county
auditor-controller of a copy of a duly adopted resolution of the
local agency's governing board authorizing such an election. As used
in this section, "local agency" means any city, county, city and
county, or special district in the county of the former redevelopment
agency.
   (3) If no local agency elects to serve as a successor agency for a
dissolved redevelopment agency, a public body, referred to herein as
a "designated local authority" shall be immediately formed, pursuant
to this part, in the county and shall be vested with all the powers
and duties of a successor agency as described in this part. The
Governor shall appoint three residents of the county to serve as the
governing board of the authority. The designated local authority
shall serve as successor agency until a local agency elects to become
the successor agency in accordance with this section.
   (e) The liability of any successor agency, acting pursuant to the
powers granted under the act adding this part, shall be limited to
the extent of the total sum of property tax revenues it receives
pursuant to this part and the value of assets transferred to it as a
successor agency for a dissolved redevelopment agency.
   34174.  (a) Solely for the purposes of Section 16 of Article XVI
of the California Constitution, commencing on the effective date of
this part, all agency loans, advances, or indebtedness, and interest
thereon, shall be deemed extinguished and paid; provided, however,
that nothing herein is intended to absolve the successor agency of
payment or other obligations due or imposed pursuant to the
enforceable obligations; and provided further, that nothing in the
act adding this part is intended to be construed as an action or
circumstance that may give rise to an event of default under any of
the documents governing the enforceable obligations.
   (b) Nothing in this part, including, but not limited to, the
dissolution of the redevelopment agencies, the designation of
successor agencies, and the transfer of redevelopment agency assets
and properties, shall be construed as a voluntary or involuntary
insolvency of any redevelopment agency for purposes of the indenture,
trust indenture, or similar document governing its outstanding
bonds.
   34175.  (a) It is the intent of this part that pledges of revenues
associated with enforceable obligations of the former redevelopment
agencies are to be honored. It is intended that the cessation of any
redevelopment agency shall not affect either the pledge, the legal
existence of that pledge, or the stream of revenues available to meet
the requirements of the pledge.
   (b) All assets, properties, contracts, leases, books and records,
buildings, and equipment of the former redevelopment agency are
transferred on October 1, 2011, to the control of the successor
agency, for administration pursuant to the provisions of this part.
This includes all cash or cash equivalents and amounts owed to the
redevelopment agency as of October 1, 2011.
   34176.  (a) The city, county, or city and county that authorized
the creation of a redevelopment agency may elect to retain the
housing assets and functions previously performed by the
redevelopment agency. If a city, county, or city and county elects to
retain the responsibility for performing housing functions
previously performed by a redevelopment agency, all rights, powers,
duties, and obligations, excluding any amounts on deposit in the Low
and Moderate Income Housing Fund, shall be transferred to the city,
county, or city and county.
   (b) If a city, county, or city and county does not elect to retain
the responsibility for performing housing functions previously
performed by a redevelopment agency, all rights, powers, assets,
liabilities, duties, and obligations associated with the housing
activities of the agency, excluding any amounts in the Low and
Moderate Income Housing Fund, shall be transferred as follows:
   (1) Where there is no local housing authority in the territorial
jurisdiction of the former redevelopment agency, to the Department of
Housing and Community Development.
   (2) Where there is one local housing authority in the territorial
jurisdiction of the former redevelopment agency, to that local
housing authority.
   (3) Where there is more than one local housing authority in the
territorial jurisdiction of the former redevelopment agency, to the
local housing authority selected by the city, county, or city and
county that authorized the creation of the redevelopment agency.
   (c) Commencing on the operative date of this part, the entity
assuming the housing functions formerly performed by the
redevelopment agency may enforce affordability covenants and perform
related activities pursuant to applicable provisions of the Community
Redevelopment Law (Part 1 (commencing with Section 33000),
including, but not limited to, Section 33418.
      CHAPTER 3.  SUCCESSOR AGENCIES


   34177.  Successor agencies are required to do all of the
following:
   (a) Continue to make payments due for enforceable obligations.
   (1) On and after October 1, 2011, and until a Recognized
Obligation Payment Schedule becomes operative, only payments required
pursuant to an enforceable obligations payment schedule shall be
made. The initial enforceable obligation payment schedule shall be
the last schedule adopted by the redevelopment agency under Section
34169. However, payments associated with obligations excluded from
the definition of enforceable obligations by paragraph (2) of
subdivision (e) of Section 34171 shall be excluded from the
enforceable obligations payment schedule and be removed from the last
schedule adopted by the redevelopment agency under Section 34169
prior to the successor agency adopting it as its enforceable
obligations payment schedule pursuant to this subdivision. The
enforceable obligation payment schedule may be amended by the
successor agency at any public meeting and shall be subject to the
approval of the oversight board as soon as the board has sufficient
members to form a quorum.
   (2) The Department of Finance and the Controller shall each have
the authority to require any documents associated with the
enforceable obligations to be provided to them in a manner of their
choosing. Any taxing entity, the department, and the Controller shall
each have standing to file a judicial action to prevent a violation
under this part and to obtain injunctive or other appropriate relief.

   (3) Commencing on January 1, 2012, only those payments listed in
the Recognized Obligation Payment Schedule may be made by the
successor agency from the funds specified in the Recognized
Obligation Payment Schedule. In addition, commencing January 1, 2012,
the Recognized Obligation Payment Schedule shall supersede the
Statement of Indebtedness, which shall no longer be prepared nor have
any effect under the Community Redevelopment Law.
   (4) Nothing in the act adding this part is to be construed as
preventing a successor agency, with the prior approval of the
oversight board, as described in Section 34179, from making payments
for enforceable obligations from sources other than those listed in
the Recognized Obligation Payment Schedule.
   (5) From October 1, 2011, to July 1, 2012, a successor agency
shall have no authority and is hereby prohibited from accelerating
payment or making any lump-sum payments that are intended to prepay
loans unless such accelerated repayments were required prior to the
effective date of this part.
   (b) Maintain reserves in the amount required by indentures, trust
indentures, or similar documents governing the issuance of
outstanding redevelopment agency bonds.
   (c) Perform obligations required pursuant to any enforceable
obligation.
   (d) Remit unencumbered balances of redevelopment agency funds to
the county auditor-controller for distribution to the taxing
entities, including, but not limited to, the unencumbered balance of
the Low and Moderate Income Housing Fund of a former redevelopment
agency. In making the distribution, the county auditor-controller
shall utilize the same methodology for allocation and distribution of
property tax revenues provided in Section 34188.
   (e) Dispose of assets and properties of the former redevelopment
agency as directed by the oversight board; provided, however, that
the oversight board may instead direct the successor agency to
transfer ownership of certain assets pursuant to subdivision (a) of
Section 34181. The disposal is to be done expeditiously and in a
manner aimed at maximizing value. Proceeds from asset sales and
related funds that are no longer needed for approved development
projects or to otherwise wind down the affairs of the agency, each as
determined by the oversight board, shall be transferred to the
county auditor-controller for distribution as property tax proceeds
under Section 34188.
   (f) Enforce all former redevelopment agency rights for the benefit
of the taxing entities, including, but not limited to, continuing to
collect loans, rents, and other revenues that were due to the
redevelopment agency.
   (g) Effectuate transfer of housing functions and assets to the
appropriate entity designated pursuant to Section 34176.
   (h) Expeditiously wind down the affairs of the redevelopment
agency pursuant to the provisions of this part and in accordance with
the direction of the oversight board.
   (i) Continue to oversee development of properties until the
contracted work has been completed or the contractual obligations of
the former redevelopment agency can be transferred to other parties.
Bond proceeds shall be used for the purposes for which bonds were
sold unless the purposes can no longer be achieved, in which case,
the proceeds may be used to defease the bonds.
   (j) Prepare a proposed administrative budget and submit it to the
oversight board for its approval. The proposed administrative budget
shall include all of the following:
   (1) Estimated amounts for successor agency administrative costs
for the upcoming six-month fiscal period.
   (2) Proposed sources of payment for the costs identified in
paragraph (1).
   (3) Proposals for arrangements for administrative and operations
services provided by a city, county, city and county, or other
entity.
   (k) Provide administrative cost estimates, from its approved
administrative budget that are to be paid from property tax revenues
deposited in the Redevelopment Property Tax Trust Fund, to the county
auditor-controller for each six-month fiscal period.
   (l) (1) Before each six-month fiscal period, prepare a Recognized
Obligation Payment Schedule in accordance with the requirements of
this paragraph. For each recognized obligation, the Recognized
Obligation Payment Schedule shall identify one or more of the
following sources of payment:
   (A) Low and Moderate Income Housing Fund.
   (B) Bond proceeds.
   (C) Reserve balances.
   (D) Administrative cost allowance.
   (E) The Redevelopment Property Tax Trust Fund, but only to the
extent no other funding source is available or when payment from
property tax revenues is required by an enforceable obligation or by
the provisions of this part.
   (F) Other revenue sources, including rents, concessions, asset
sale proceeds, interest earnings, and any other revenues derived from
the former redevelopment agency, as approved by the oversight board
in accordance with this part.
   (2) A Recognized Obligation Payment Schedule shall not be deemed
valid unless all of the following conditions have been met:
   (A) A draft Recognized Obligation Payment Schedule is prepared by
the successor agency for the enforceable obligations of the former
redevelopment agency by November 1, 2011. From October 1, 2011, to
July 1, 2012, the initial draft of that schedule shall project the
dates and amounts of scheduled payments for each enforceable
obligation for the remainder of the time period during which the
redevelopment agency would have been authorized to obligate property
tax increment had such a redevelopment agency not been dissolved, and
shall be reviewed and certified, as to its accuracy, by an external
auditor designated pursuant to Section 34182.
   (B) The certified Recognized Obligation Payment Schedule is
submitted to and duly approved by the oversight board.
   (C) A copy of the approved Recognized Obligation Payment Schedule
is submitted to the county auditor-controller and both the Controller'
s office and the Department of Finance and be posted on the successor
agency's Internet Web site.
   (3) The Recognized Obligation Payment Schedule shall be forward
looking to the next six months. The first Recognized Obligation
Payment Schedule shall be submitted to the Controller's office and
the Department of Finance by December 15, 2011, for the period of
January 1, 2012, to June 30, 2012, inclusive. Former redevelopment
agency enforceable obligation payments due, and reasonable or
necessary administrative costs due or incurred, prior to January 1,
2012, shall be made from property tax revenues received in the spring
of 2011 property tax distribution, and from other revenues and
balances transferred to the successor agency.
   34178.  (a) Commencing on the operative date of this part,
agreements, contracts, or arrangements between the city or county, or
city and county that created the redevelopment agency and the
redevelopment agency are invalid and shall not be binding on the
successor agency; provided, however, that a successor entity wishing
to enter or reenter into agreements with the city, county, or city
and county that formed the redevelopment agency that it is succeeding
may do so upon obtaining the approval of its oversight board.
   (b) Notwithstanding subdivision (a), any of the following
agreements are not invalid and may bind the successor agency:
   (1) A duly authorized written agreement entered into at the time
of issuance, but in no event later than December 31, 2010, of
indebtedness obligations, and solely for the purpose of securing or
repaying those indebtedness obligations.
   (2) A written agreement between a redevelopment agency and the
city, county, or city and county that created it that provided loans
or other startup funds for the redevelopment agency that were entered
into within two years of the formation of the redevelopment agency.
   (3) A joint exercise of powers agreement in which the
redevelopment agency is a member of the joint powers authority.
However, upon assignment to the successor agency by operation of the
act adding this part, the successor agency's rights, duties, and
performance obligations under that joint exercise of powers agreement
shall be limited by the constraints imposed on successor agencies by
the act adding this part.
   34178.7.  For purposes of this chapter with regard to a
redevelopment agency that becomes subject to this part pursuant to
Section 34195, only references to "October 1, 2011," and to the
"operative date of this part" shall be modified in the manner
described in Section 34191. All other dates shall be modified only as
necessary to reflect the appropriate fiscal year or portion of a
fiscal year.
      CHAPTER 4.  OVERSIGHT BOARDS


   34179.  (a) Each successor agency shall have an oversight board
composed of seven members. The members shall elect one of their
members as the chairperson and shall report the name of the
chairperson and other members to the Department of Finance on or
                                     before January 1, 2012. Members
shall be selected as follows:
   (1) One member appointed by the county board of supervisors.
   (2) One member appointed by the mayor for the city that formed the
redevelopment agency.
   (3) One member appointed by the largest special district, by
property tax share, with territory in the territorial jurisdiction of
the former redevelopment agency, which is of the type of special
district that is eligible to receive property tax revenues pursuant
to Section 34188.
   (4) One member appointed by the county superintendent of education
to represent schools if the superintendent is elected. If the county
superintendent of education is appointed, then the appointment made
pursuant to this paragraph shall be made by the county board of
education.
   (5) One member appointed by the Chancellor of the California
Community Colleges to represent community college districts in the
county.
   (6) One member of the public appointed by the county board of
supervisors.
   (7) One member representing the employees of the former
redevelopment agency appointed by the mayor or chair of the board of
supervisors, as the case may be, from the recognized employee
organization representing the largest number of former redevelopment
agency employees employed by the successor agency at that time.
   (8) If the county or a joint powers agency formed the
redevelopment agency, then the largest city by acreage in the
territorial jurisdiction of the former redevelopment agency may
select one member. If there are no cities with territory in a project
area of the redevelopment agency, the county superintendent of
education may appoint an additional member to represent the public.
   (9) If there are no special districts of the type that are
eligible to receive property tax pursuant to Section 34188, within
the territorial jurisdiction of the former redevelopment agency, then
the county may appoint one member to represent the public.
   (10) Where a redevelopment agency was formed by an entity that is
both a charter city and a county, the oversight board shall be
composed of seven members selected as follows: three members
appointed by the mayor of the city, where such appointment is subject
to confirmation by the county board of supervisors, one member
appointed by the largest special district, by property tax share,
with territory in the territorial jurisdiction of the former
redevelopment agency, which is the type of special district that is
eligible to receive property tax revenues pursuant to Section 34188,
one member appointed by the county superintendent of education to
represent schools, one member appointed by the Chancellor of the
California Community Colleges to represent community college
districts, and one member representing employees of the former
redevelopment agency appointed by the mayor of the city where such an
appointment is subject to confirmation by the county board of
supervisors, to represent the largest number of former redevelopment
agency employees employed by the successor agency at that time.
   (b) The Governor may appoint individuals to fill any oversight
board member position described in subdivision (a) that has not been
filled by January 15, 2012, or any member position that remains
vacant for more than 60 days.
   (c) The oversight board may direct the staff of the successor
agency to perform work in furtherance of the oversight board's duties
and responsibilities under this part. The successor agency shall pay
for all of the costs of meetings of the oversight board and may
include such costs in its administrative budget. Oversight board
members shall serve without compensation or reimbursement for
expenses.
   (d) Oversight board members shall have personal immunity from suit
for their actions taken within the scope of their responsibilities
as oversight board members.
   (e) A majority of the total membership of the oversight board
shall constitute a quorum for the transaction of business. A majority
vote of the total membership of the oversight board is required for
the oversight board to take action. The oversight board shall be
deemed to be a local entity for purposes of the Ralph M. Brown Act,
the California Public Records Act, and the Political Reform Act of
1974.
   (f) All notices required by law for proposed oversight board
actions shall also be posted on the successor agency's Internet Web
site or the oversight board's Internet Web site.
   (g) Each member of an oversight board shall serve at the pleasure
of the entity that appointed such member.
   (h) The Department of Finance may review an oversight board action
taken pursuant to the act adding this part. As such, all oversight
board actions shall not be effective for three business days, pending
a request for review by the department. Each oversight board shall
designate an official to whom the department may make such requests
and who shall provide the department with the telephone number and
e-mail contact information for the purpose of communicating with the
department pursuant to this subdivision. In the event that the
department requests a review of a given oversight board action, it
shall have 10 days from the date of its request to approve the
oversight board action or return it to the oversight board for
reconsideration and such oversight board action shall not be
effective until approved by the department. In the event that the
department returns the oversight board action to the oversight board
for reconsideration, the oversight board shall resubmit the modified
action for department approval and the modified oversight board
action shall not become effective until approved by the department.
   (i) Oversight boards shall have fiduciary responsibilities to
holders of enforceable obligations and the taxing entities that
benefit from distributions of property tax and other revenues
pursuant to Section 34188. Further, the provisions of Division 4
(commencing with Section 1000) of the Government Code shall apply to
oversight boards. Notwithstanding Section 1099 of the Government
Code, or any other law, any individual may simultaneously be
appointed to up to five oversight boards and may hold an office in a
city, county, city and county, special district, school district, or
community college district.
   (j) Commencing on and after July 1, 2016, in each county where
more than one oversight board was created by operation of the act
adding this part, there shall be only one oversight board appointed
as follows:
   (1) One member may be appointed by the county board of
supervisors.
   (2) One member may be appointed by the city selection committee
established pursuant to Section 50270 of the Government Code. In a
city and county, the mayor may appoint one member.
   (3) One member may be appointed by the independent special
district selection committee established pursuant to Section 56332 of
the Government Code, for the types of special districts that are
eligible to receive property tax revenues pursuant to Section 34188.
   (4) One member may be appointed by the county superintendent of
education to represent schools if the superintendent is elected. If
the county superintendent of education is appointed, then the
appointment made pursuant to this paragraph shall be made by the
county board of education.
   (5) One member may be appointed by the Chancellor of the
California Community Colleges to represent community college
districts in the county.
   (6) One member of the public may be appointed by the county board
of supervisors.
   (7) One member may be appointed by the recognized employee
organization representing the largest number of successor agency
employees in the county.
   (k) The Governor may appoint individuals to fill any oversight
board member position described in subdivision (j) that has not been
filled by July 15, 2016, or any member position that remains vacant
for more than 60 days.
   (l) Commencing on and after July 1, 2016, in each county where
only one oversight board was created by operation of the act adding
this part, then there will be no change to the composition of that
oversight board as a result of the operation of subdivision (b).
   (m) Any oversight board for a given successor agency shall cease
to exist when all of the indebtedness of the dissolved redevelopment
agency has been repaid.
   34180.  All of the following successor agency actions shall first
be approved by the oversight board:
   (a) The establishment of new repayment terms for outstanding loans
where the terms have not been specified prior to the date of this
part.
   (b) Refunding of outstanding bonds or other debt of the former
redevelopment agency by successor agencies in order to provide for
savings or to finance debt service spikes; provided, however, that no
additional debt is created and debt service is not accelerated.
   (c) Setting aside of amounts in reserves as required by
indentures, trust indentures, or similar documents governing the
issuance of outstanding redevelopment agency bonds.
   (d) Merging of project areas.
   (e) Continuing the acceptance of federal or state grants, or other
forms of financial assistance from either public or private sources,
where assistance is conditioned upon the provision of matching
funds, by the successor entity as successor to the former
redevelopment agency, in an amount greater than 5 percent.
   (f) (1) If a city, county, or city and county wishes to retain any
properties or other assets for future redevelopment activities,
funded from its own funds and under its own auspices, it must reach a
compensation agreement with the other taxing entities to provide
payments to them in proportion to their shares of the base property
tax, as determined pursuant to Section 34188, for the value of the
property retained.
   (2) If no other agreement is reached on valuation of the retained
assets, the value will be the fair market value as of the 2011
property tax lien date as determined by the county assessor.
   (g) Establishment of the Recognized Obligation Payment Schedule.
   (h) A request by the successor agency to enter into an agreement
with the city, county, or city and county that formed the
redevelopment agency that it is succeeding.
   (i) A request by a successor agency or taxing entity to pledge, or
to enter into an agreement for the pledge of, property tax revenues
pursuant to subdivision (b) of Section 34178.
   34181.  The oversight board shall direct the successor agency to
do all of the following:
   (a) Dispose of all assets and properties of the former
redevelopment agency that were funded by tax increment revenues of
the dissolved redevelopment agency; provided, however, that the
oversight board may instead direct the successor agency to transfer
ownership of those assets that were constructed and used for a
governmental purpose, such as roads, school buildings, parks, and
fire stations, to the appropriate public jurisdiction pursuant to any
existing agreements relating to the construction or use of such an
asset. Any compensation to be provided to the successor agency for
the transfer of the asset shall be governed by the agreements
relating to the construction or use of that asset. Disposal shall be
done expeditiously and in a manner aimed at maximizing value.
   (b) Cease performance in connection with and terminate all
existing agreements that do not qualify as enforceable obligations.
   (c) Transfer housing responsibilities and all rights, powers,
duties, and obligations along with any amounts on deposit in the Low
and Moderate Income Housing Fund to the appropriate entity pursuant
to Section 34176.
   (d) Terminate any agreement, between the dissolved redevelopment
agency and any public entity located in the same county, obligating
the redevelopment agency to provide funding for any debt service
obligations of the public entity or for the construction, or
operation of facilities owned or operated by such public entity, in
any instance where the oversight board has found that early
termination would be in the best interests of the taxing entities.
   (e) Determine whether any contracts, agreements, or other
arrangements between the dissolved redevelopment agency and any
private parties should be terminated or renegotiated to reduce
liabilities and increase net revenues to the taxing entities, and
present proposed termination or amendment agreements to the oversight
board for its approval. The board may approve any amendments to or
early termination of such agreements where it finds that amendments
or early termination would be in the best interests of the taxing
entities.
      CHAPTER 5.  DUTIES OF THE AUDITOR-CONTROLLER


   34182.  (a) (1) The county auditor-controller shall conduct or
cause to be conducted an agreed-upon procedures audit of each
redevelopment agency in the county that is subject to this part, to
be completed by March 1, 2012.
   (2) The purpose of the audits shall be to establish each
redevelopment agency's assets and liabilities, to document and
determine each redevelopment agency's passthrough payment obligations
to other taxing agencies, and to document and determine both the
amount and the terms of any indebtedness incurred by the
redevelopment agency and certify the initial Recognized Obligation
Payment Schedule.
   (3) The county auditor-controller may charge the Redevelopment
Property Tax Trust Fund for any costs incurred by the county
auditor-controller pursuant to this part.
   (b) By March 15, 2012, the county auditor-controller shall provide
the Controller's office a copy of all audits performed pursuant to
this section. The county auditor-controller shall maintain a copy of
all documentation and working papers for use by the Controller.
   (c) (1) The county auditor-controller shall determine the amount
of property taxes that would have been allocated to each
redevelopment agency in the county had the redevelopment agency not
been dissolved pursuant to the operation of the act adding this part.
These amounts are deemed property tax revenues within the meaning of
subdivision (a) of Section 1 of Article XIII A of the California
Constitution and are available for allocation and distribution in
accordance with the provisions of the act adding this part. The
county auditor-controller shall calculate the property tax revenues
using current assessed values on the last equalized roll on August
20, pursuant to Section 2052 of the Revenue and Taxation Code, and
pursuant to statutory formulas or contractual agreements with other
taxing agencies, as of the effective date of this section, and shall
deposit that amount in the Redevelopment Property Tax Trust Fund.
   (2) Each county auditor-controller shall administer the
Redevelopment Property Tax Trust Fund for the benefit of the holders
of former redevelopment agency enforceable obligations and the taxing
entities that receive passthrough payments and distributions of
property taxes pursuant to this part.
   (3) In connection with the allocation and distribution by the
county auditor-controller of property tax revenues deposited in the
Redevelopment Property Tax Trust Fund, in compliance with this part,
the county auditor-controller shall prepare estimates of amounts to
be allocated and distributed, and provide those estimates to both the
entities receiving the distributions and the Department of Finance,
no later than November 1 and May 1 of each year.
   (4) Each county auditor-controller shall disburse proceeds of
asset sales or reserve balances, which have been received from the
successor entities pursuant to Sections 34177 and 34187, to the
taxing entities. In making such a distribution, the county
auditor-controller shall utilize the same methodology for allocation
and distribution of property tax revenues provided in Section 34188.
   (d) By October 1, 2012, the county auditor-controller shall report
the following information to the Controller's office and the
Director of Finance:
   (1) The sums of property tax revenues remitted to the
Redevelopment Property Tax Trust Fund related to each former
redevelopment agency.
   (2) The sums of property tax revenues remitted to each agency
under paragraph (1) of subdivision (a) of Section 34183.
   (3) The sums of property tax revenues remitted to each successor
agency pursuant to paragraph (2) of subdivision (a) of Section 34183.

   (4) The sums of property tax revenues paid to each successor
agency pursuant to paragraph (3) of subdivision (a) of Section 34183.

   (5) The sums paid to each city, county, and special district, and
the total amount allocated for schools pursuant to paragraph (4) of
subdivision (a) of Section 34183.
   (6) Any amounts deducted from other distributions pursuant to
subdivision (b) of Section 34183.
   (e) A county auditor-controller may charge the Redevelopment
Property Tax Trust Fund for the costs of administering the provisions
of this part.
   (f) The Controller may audit and review any county
auditor-controller action taken pursuant to the act adding this part.
As such, all county auditor-controller actions shall not be
effective for three business days, pending a request for review by
the Controller. In the event that the Controller requests a review of
a given county auditor-controller action, he or she shall have 10
days from the date of his or her request to approve the county
auditor-controller's action or return it to the county
auditor-controller for reconsideration and such county
auditor-controller action shall not be effective until approved by
the Controller. In the event that the Controller returns the county
auditor-controller's action to the county auditor-controller for
reconsideration, the county auditor-controller must resubmit the
modified action for Controller approval and such modified county
auditor-controller action shall not become effective until approved
by the Controller.
   34183.  (a) Notwithstanding any other law, from October 1, 2011,
to July 1, 2012, and for each fiscal year thereafter, the county
auditor-controller shall, after deducting administrative costs
allowed under Section 34182 and Section 95.3 of the Revenue and
Taxation Code, allocate moneys in each Redevelopment Property Tax
Trust Fund as follows:
   (1) Subject to any prior deductions required by subdivision (b),
first, the county auditor-controller shall remit from the
Redevelopment Property Tax Trust Fund to each local agency and school
entity an amount of property tax revenues in an amount equal to that
which would have been received under Section 33401, 33492.140,
33607, 33607.5, 33607.7, or 33676, as those sections read on January
1, 2011, or pursuant to any passthrough agreement between a
redevelopment agency and a taxing jurisdiction that was entered into
prior to January 1, 1994, that would be in force during that fiscal
year, had the redevelopment agency existed at that time. The amount
of the payments made pursuant to this paragraph shall be calculated
solely on the basis of passthrough payment obligations, existing
prior to the effective date of this part and continuing as
obligations of successor entities, shall occur no later than January
16, 2012, and no later than June 1, 2012, and each January 16 and
June 1 thereafter. Notwithstanding subdivision (e) of Section 33670,
that portion of the taxes in excess of the amount identified in
subdivision (a) of Section 33670, which are attributable to a tax
rate levied by a taxing agency for the purpose of producing revenues
in an amount sufficient to make annual repayments of the principal
of, and the interest on, any bonded indebtedness for the acquisition
or improvement of real property shall be allocated to, and when
collected shall be paid into, the fund of that taxing agency.
   (2) Second, on January 16, 2012, and June 1, 2012, and each
January 16 and June 1 thereafter, to each successor agency for
payments listed in its Recognized Obligation Payment Schedule for the
six-month fiscal period beginning January 1, 2012, or July 1, 2012,
and each January 16 and June 1 thereafter, in the following order of
priority:
   (A) Debt service payments scheduled to be made for tax allocation
bonds.
   (B) Payments scheduled to be made on revenue bonds, but only to
the extent the revenues pledged for them are insufficient to make the
payments and only where the agency's tax increment revenues were
also pledged for the repayment of the bonds.
   (C) Payments scheduled for other debts and obligations listed in
the Recognized Obligation Payment Schedule that are required to be
paid from former tax increment revenue.
   (3) Third, on January 16, 2012, and June 1, 2012, and each January
16 and June 1 thereafter, to each successor agency for the
administrative cost allowance, as defined in Section 34171, for
administrative costs set forth in an approved administrative budget
for those payments required to be paid from former tax increment
revenues.
   (4) Fourth, on January 16, 2012, and June 1, 2012, and each
January 16 and June 1 thereafter, any moneys remaining in the
Redevelopment Property Tax Trust Fund after the payments and
transfers authorized by paragraphs (1) to (3), inclusive, shall be
distributed to local agencies and school entities in accordance with
Section 34188.
   (b) If the successor agency reports, no later than December 1,
2011, and May 1, 2012, and each December 1 and May 1 thereafter, to
the county auditor-controller that the total amount available to the
successor agency from the Redevelopment Property Tax Trust Fund
allocation to that successor agency's Redevelopment Obligation
Retirement Fund, from other funds transferred from each redevelopment
agency, and from funds that have or will become available through
asset sales and all redevelopment operations, are insufficient to
fund the payments required by paragraphs (1) to (3), inclusive, of
subdivision (a) in the next six-month fiscal period, the county
auditor-controller shall notify the Controller and the Department of
Finance no later than 10 days from the date of that notification. The
county auditor-controller shall verify whether the successor agency
will have sufficient funds from which to service debts according to
the Recognized Obligation Payment Schedule and shall report the
findings to the Controller. If the Controller concurs that there are
insufficient funds to pay required debt service, the amount of the
deficiency shall be deducted first from the amount remaining to be
distributed to taxing entities pursuant to paragraph (4), and if that
amount is exhausted, from amounts available for distribution for
administrative costs in paragraph (3). If an agency, pursuant to the
provisions of Section 33492.15, 33492.72, 33607.5, 33671.5, 33681.15,
or 33688, made passthrough payment obligations subordinate to debt
service payments required for enforceable obligations, funds for
servicing bond debt may be deducted from the amounts for passthrough
payments under paragraph (1), as provided in those sections, but only
to the extent that the amounts remaining to be distributed to taxing
entities pursuant to paragraph (4) and the amounts available for
distribution for administrative costs in paragraph (3) have all been
exhausted.
   (c) The county treasurer may loan any funds from the county
treasury that are necessary to ensure prompt payments of
redevelopment agency debts.
   (d) The Controller may recover the costs of audit and oversight
required under this part from the Redevelopment Property Tax Trust
Fund by presenting an invoice therefor to the county
auditor-controller who shall set aside sufficient funds for and
disburse the claimed amounts prior to making the next distributions
to the taxing jurisdictions pursuant to Section 34188. Subject to the
approval of the Director of Finance, the budget of the Controller
may be augmented to reflect the reimbursement, pursuant to Section
28.00 of the Budget Act.
   34185.  Commencing on January 16, 2012, and on each January 16 and
June 1 thereafter, the county auditor-controller shall transfer,
from the Redevelopment Property Tax Trust Fund of each successor
agency into the Redevelopment Obligation Retirement Fund of that
agency, an amount of property tax revenues equal to that specified in
the Recognized Obligation Payment Schedule for that successor agency
as payable from the Redevelopment Property Tax Trust Fund subject to
the limitations of Sections 34173 and 34183.
   34186.  Differences between actual payments and past estimated
obligations on recognized obligation payment schedules must be
reported in subsequent recognized obligation payment schedules and
shall adjust the amount to be transferred to the Redevelopment
Obligation Retirement Fund pursuant to this part. These estimates and
accounts shall be subject to audit by county auditor-controllers and
the Controller.
   34187.  Commencing January 1, 2012, whenever a recognized
obligation that had been identified in the Recognized Payment
Obligation Schedule is paid off or retired, either through early
payment or payment at maturity, the county auditor-controller shall
distribute to the taxing entities, in accordance with the provisions
of the Revenue and Taxation Code, all property tax revenues that were
associated with the payment of the recognized obligation.
   34188.  For all distributions of property tax revenues and other
moneys pursuant to this part, the distribution to each taxing entity
shall be in an amount proportionate to its share of property tax
revenues in the tax rate area in that fiscal year, as follows:
   (a) (1) For distributions from the Redevelopment Property Tax
Trust Fund, the share of each taxing entity shall be applied to the
amount of property tax available in the Redevelopment Property Tax
Trust Fund after deducting the amount of any distributions under
paragraphs (2) and (3) of subdivision (a) of Section 34183.
   (2) For each taxing entity that receives passthrough payments,
that agency shall receive the amount of any passthrough payments
identified under paragraph (1) of subdivision (a) of Section 34183,
in an amount not to exceed the amount that it would receive pursuant
to this section in the absence of the passthrough agreement. However,
to the extent that the passthrough payments received by the taxing
entity are less than the amount that the taxing entity would receive
pursuant to this section in the absence of a passthrough agreement,
the taxing entity shall receive an additional payment that is
equivalent to the difference between those amounts.
   (b) Property tax shares of local agencies shall be determined
based on property tax allocation laws in effect on the date of
distribution, without the revenue exchange amounts allocated pursuant
to Section 97.68 of the Revenue and Taxation Code, and without the
property taxes                                           allocated
pursuant to Section 97.70 of the Revenue and Taxation Code.
   (c) The total school share, including passthroughs, shall be the
share of the property taxes that would have been received by school
entities, as defined in subdivision (f) of Section 95 of the Revenue
and Taxation Code, in the jurisdictional territory of the former
redevelopment agency, including, but not limited to, the amounts
specified in Sections 97.68 and 97.70 of the Revenue and Taxation
Code.
   34188.8.  For purposes of a redevelopment agency that becomes
subject to this part pursuant to Section 34195, a date certain
identified in this chapter shall not be subject to Section 34191,
except for dates certain in Section 34182 and references to "October
1, 2011," or to the "operative date of this part,". However, for
purposes of those redevelopment agencies, a date certain identified
in this chapter shall be appropriately modified, as necessary to
reflect the appropriate fiscal year or portion of a fiscal year.
      CHAPTER 6.  EFFECT OF THE ACT ADDING THIS PART ON THE COMMUNITY
REDEVELOPMENT LAW


   34189.  (a) Commencing on the effective date of this part, all
provisions of the Community Redevelopment Law that depend on the
allocation of tax increment to redevelopment agencies, including, but
not limited to, Sections 33445, 33640, 33641, 33645, and subdivision
(b) of Section 33670, shall be inoperative, except as those sections
apply to a redevelopment agency operating pursuant to Part 1.9
(commencing with Section 34192).
   (b) The California Law Revision Commission shall draft a Community
Redevelopment Law cleanup bill for consideration by the Legislature
no later than January 1, 2013.
   (c) To the extent that a provision of Part 1 (commencing with
Section 33000), Part 1.5 (commencing with Section 34000), Part 1.6
(commencing with Section 34050), and Part 1.7 (commencing with
Section 34100) conflicts with this part, the provisions of this part
shall control. Further, if a provision of Part 1 (commencing with
Section 33000), Part 1.5 (commencing with Section 34000), Part 1.6
(commencing with Section 34050), or Part 1.7 (commencing with Section
34100) provides an authority that the act adding this part is
restricting or eliminating, the restriction and elimination
provisions of the act adding this part shall control.
   (d) It is intended that the provisions of this part shall be read
in a manner as to avoid duplication of payments.
      CHAPTER 7.  STABILIZATION OF LABOR AND EMPLOYMENT RELATIONS


   34190.  (a) It is the intent of the Legislature to stabilize the
labor and employment relations of redevelopment agencies and
successor agencies in furtherance of and connection with their
responsibilities under the act adding this part.
   (b) Nothing in the act adding this part is intended to relieve any
redevelopment agency of its obligations under Chapter 10 (commencing
with Section 3500) of Division 4 of Title 1 of the Government Code.
Subject to the limitations set forth in Section 34165, prior to its
dissolution, a redevelopment agency shall retain the authority to
meet and confer over matters within the scope of representation.
   (c) A successor agency, as defined in Sections 34171 and 34173,
shall constitute a public agency within the meaning of subdivision
(c) of Section 3501 of the Government Code.
   (d) Subject to the limitations set forth in Section 34165,
redevelopment agencies, prior to and during their winding down and
dissolution, shall retain the authority to bargain over matters
within the scope of representation.
   (e) In recognition that a collective bargaining agreement
represents an enforceable obligation, a successor agency shall become
the employer of all employees of the redevelopment agency as of the
date of the redevelopment agency's dissolution. If, pursuant to this
provision, the successor agency becomes the employer of one or more
employees who, as employees of the redevelopment agency, were
represented by a recognized employee organization, the successor
agency shall be deemed a successor employer and shall be obligated to
recognize and to meet and confer with such employee organization. In
addition, the successor agency shall retain the authority to bargain
over matters within the scope of representation and shall be deemed
to have assumed the obligations under any memorandum of understanding
in effect between the redevelopment agency and recognized employee
organization as of the date of the redevelopment agency's
dissolution.
   (f) The Legislature finds and declares that the duties and
responsibilities of local agency employer representatives under this
chapter are substantially similar to the duties and responsibilities
required under existing collective bargaining enforcement procedures
and therefore the costs incurred by the local agency employer
representatives in performing those duties and responsibilities under
the act adding this part are not reimbursable as state-mandated
costs. Furthermore, the Legislature also finds and declares that to
the extent the act adding this part provides the funding with which
to accomplish the obligations provided herein, the costs incurred by
the local agency employer representatives in performing those duties
and responsibilities under the act adding this part are not
reimbursable as state-mandated costs.
   (g) The transferred memorandum of understanding and the right of
any employee organization representing such employees to provide
representation shall continue as long as the memorandum of
understanding would have been in force, pursuant to its own terms.
One or more separate bargaining units shall be created in the
successor agency consistent with the bargaining units that had been
established in the redevelopment agency. After the expiration of the
transferred memorandum of understanding, the successor agency shall
continue to be subject to the provisions of the Meyers-Milias-Brown
Act.
   (h) Individuals formerly employed by redevelopment agencies that
are subsequently employed by successor agencies shall, for a minimum
of two years, transfer their status and classification in the civil
service system of the redevelopment agency to the successor agency
and shall not be required to requalify to perform the duties that
they previously performed or duties substantially similar in nature
and in required qualification to those that they previously
performed. Any such individuals shall have the right to compete for
employment under the civil service system of the successor agency.
      CHAPTER 8.  APPLICATION OF PART TO FORMER PARTICIPANTS OF THE
ALTERNATIVE VOLUNTARY REDEVELOPMENT PROGRAM


   34191.  (a) It is the intent of the Legislature that a
redevelopment agency that formerly operated pursuant to the
Alternative Voluntary Redevelopment Program (Part 1.9 (commencing
with Section 34192)), that becomes subject to this part pursuant to
Section 34195, shall be subject to all of the requirements of this
part, except that dates and deadlines shall be appropriately
modified, as provided in this section, to reflect the date that the
agency becomes subject to this part.
   (b) Except as otherwise provided by law, for purposes of a
redevelopment agency that becomes subject to this part pursuant to
Section 34195, the following shall apply:
   (1) Any reference to "January 1, 2011," shall be construed to mean
January 1 of the year preceding the year that the redevelopment
agency became subject to this part, but no earlier than January 1,
2011.
   (2) Any reference to "October 1, 2011," or to the "operative date
of this part," shall mean the date that is the equivalent to the
"October 1, 2011," identified in Section 34167.5 for that
redevelopment agency as determined pursuant to Section 34169.5.
   (3) Except as provided in paragraphs (1) and (2), any reference to
a date certain shall be construed to be the date, measured from the
date that the redevelopment agency became subject to this part, that
is equivalent to the duration of time between the operative date of
this part and the date certain identified in statute.
  SEC. 8.  Section 97.401 is added to the Revenue and Taxation Code,
to read:
   97.401.  Commencing October 1, 2011, the county auditor shall make
the calculations required by Section 97.4 based on the amount
deposited on behalf of each former redevelopment agency into the
Redevelopment Property Tax Trust Fund pursuant to paragraph (1) of
subdivision (c) of Section 34182 of the Health and Safety Code. The
calculations required by Section 97.4 shall result in cities,
counties, and special districts annually remitting to the Educational
Revenue Augmentation Fund the same amounts they would have remitted
but for the operation of Part 1.8 (commencing with Section 34161) and
Part 1.85 (commencing with Section 34170) of Division 24 of the
Health and Safety Code.
  SEC. 9.  Section 98.2 is added to the Revenue and Taxation Code, to
read:
   98.2.  For the 2011-12 fiscal year, and each fiscal year
thereafter, the computations provided for in Sections 98 and 98.1
shall be performed in a manner which recognizes that passthrough
payments formerly required under the Community Redevelopment Law
(Part 1 (commencing with Section 33000) of Division 24 of the Health
and Safety Code) are continuing to be made under the authority of
Part 1.85 (commencing with Section 34170) of Division 24 of the
Health and Safety Code and those payments shall be recognized in the
TEA calculations as though they were made under the Community
Redevelopment Law. Additionally, the computations provided for in
Sections 98 and 98.1 shall be performed in a manner that recognizes
payments to a Redevelopment Property Tax Trust Fund, established
pursuant to Section 34170.5 of the Health and Safety Code as if they
were payments to a redevelopment agency as provided in subdivision
(b) of Section 33670 of the Health and Safety Code.
  SEC. 10.  If a legal challenge to invalidate any provision of this
act is successful, a redevelopment agency shall be prohibited from
issuing new bonds, notes, interim certificates, debentures, or other
obligations, whether funded, refunded, assumed, or otherwise,
pursuant to Article 5 (commencing with Section 33640) of Chapter 6 of
Part 1 of Division 24 of the Health and Safety Code.
  SEC. 11.  The sum of five hundred thousand dollars ($500,000) is
hereby appropriated to the Department of Finance from the General
Fund for allocation to the Treasurer, Controller, and Department of
Finance for administrative costs associated with this act. The
department shall notify the Joint Legislative Budget Committee and
the fiscal committees in each house of any allocations under this
section no later than 10 days following that allocation.
  SEC. 12.  If any provision of this act or the application thereof
to any person or circumstance is held invalid, the invalidity shall
not affect other provisions or applications of this act which can be
given effect without the invalid provision or application and to this
end, the provisions of this act are severable. The Legislature
expressly intends that the provisions of Part 1.85 (commencing with
Section 34170) of Division 24 of the Health and Safety Code are
severable from the provisions of Part 1.8 (commencing with Section
34161) of Division 24 of the Health and Safety Code, and if Part 1.85
is held invalid, then Part 1.8 shall continue in effect.
  SEC. 13.   No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because a
local agency or school district has the authority to levy service
charges, fees, or assessments sufficient to pay for the program or
level of service mandated by this act, within the meaning of Section
17556 of the Government Code.
  SEC. 14.  This act shall take effect contingent on the enactment of
Assembly Bill 27 of the 2011-12 First Extraordinary Session or
Senate Bill 15 of in the 2011-12 First Extraordinary Session and only
if the enacted bill adds Part 1.9 (commencing with Section 34192) to
Division 24 of the Health and Safety Code.
  SEC. 15.  This act addresses the fiscal emergency declared and
reaffirmed by the Governor by proclamation on January 20, 2011,
pursuant to subdivision (f) of Section 10 of Article IV of the
California Constitution.
  SEC. 16.   This act is a bill providing for appropriations related
to the Budget Bill within the meaning of subdivision (e) of Section
12 of Article IV of the California Constitution, has been identified
as related to the budget in the Budget Bill, and shall take effect
immediately.