BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 936|
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THIRD READING
Bill No: AB 936
Author: Hueso (D)
Amended: 7/12/11 in Senate
Vote: 21
SENATE GOVERNANCE & FINANCE COMMITTEE : 9-0, 7/6/11
AYES: Wolk, Huff, DeSaulnier, Fuller, Hancock, Hernandez,
Kehoe, La Malfa, Liu
ASSEMBLY FLOOR : 75-0, 5/26/11 (Consent)- See last page for
vote
SUBJECT : Redevelopment: debt forgiveness
SOURCE : California Professional Firefighters
DIGEST : This bill requires, before a redevelopment
agency or public body, forgives a public body for a loan,
advance, or indebtedness, the agency or public body to
adopt a resolution that states it intentions.
ANALYSIS : The Community Redevelopment Law authorizes the
establishment of redevelopment agencies in communities to
address the effects of blight, as defined. Existing law
requires the agencies, among other things, to comply with
public hearing and notice requirements relating to, among
other things, the adoption and amendment of redevelopment
plans, the expenditure of funds, and the financing of
projects.
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This bill requires, before a redevelopment agency or public
body, forgives a public body for a loan, advance, or
indebtedness, the agency or public body to adopt a
resolution that states its intentions.
The agency's or public body's resolution of intention must
specify the:
Name of the public body or agency.
Amount of the forgiveness.
Terms of the loan, advance, or indebtedness.
Fiscal effect of the forgiveness on the public body.
Fiscal effect of the forgiveness on the agency.
Date on which the agency or public body intends to act on
the forgiveness.
The agency or public body must adopt this resolution at
least 15 days before it acts on the proposed forgiveness.
This bill prohibits this resolution and the forgiveness
action from being on the agency's or public body's consent
calendar. Both actions need recorded roll call votes.
The bill also requires each redevelopment agency or public
body to adopt a resolution by February 1, 2012, that
declares whether or not the agency or public body forgave a
public body loan, advance, or indebtedness from January 1,
2010 through December 31, 2011. The agency's resolution of
intention must specify the:
Name of the public body or agency.
Amount of the forgiveness.
Terms of the loan, advance, or indebtedness.
Fiscal effect of the forgiveness on the public body.
Fiscal effect of the forgiveness on the agency.
Date on which the agency intends to act on the
forgiveness.
Within 10 days of adopting this resolution, the agency or
public body must send a copy to its legislative body and
the State Controller.
Background
One of redevelopment agencies' extraordinary powers is the
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ability to divert property tax increment revenues from
counties, cities, special districts, and school districts.
To receive these revenues, redevelopment officials must
file detailed annual statements of indebtedness that allow
county auditors to track the agencies' income,
expenditures, and available revenues. County auditors then
allocate property tax increment revenues to pay the
redevelopment agencies' debts. A standard redevelopment
reference book advises officials: To receive the total
available tax increment, agencies must pay more attention
to making certain that sufficient debt is established.
Redevelopment agencies can create debt by issuing tax
allocation bonds and revenue bonds, and by loaning money to
the underlying city or county. For example, a
redevelopment agency and its city can create debt under a
contract that requires the city to build public works that
benefit a project area. In return, the agency pays the
city specified amounts of property tax increment revenues
each year until the city has enough money to build the
public works projects.
Redevelopment officials reported spending $271 million in
debt principal payments for city and county loans in
2008-09. The redevelopment agencies also received $264
million in advances from cities and counties.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 7/12/11)
California Professional Firefighters (source)
Fire fighters Local 1186 (Vallejo)
San Diego City Fire Fighters, Local 145
Stockton Professional Firefighters, Local 456
Western Center on Law and Poverty
ARGUMENTS IN SUPPORT : According to the author, "AB 936
is needed to ensure that the public has the opportunity to
understand the financial implications of debt forgiveness.
This bill does not hinder the ability of a city or
redevelopment agency to forgive a loan. The requirements
of this bill will ensure that that public has the
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opportunity to evaluate these important financial
decisions. This is a good government bill that will help
spread sunshine on the debt forgiveness process."
ASSEMBLY FLOOR :
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Beall, Bill
Berryhill, Block, Blumenfield, Bonilla, Bradford,
Brownley, Buchanan, Butler, Charles Calderon, Carter,
Chesbro, Conway, Cook, Dickinson, Donnelly, Eng, Feuer,
Fletcher, Fong, Fuentes, Furutani, Beth Gaines, Galgiani,
Garrick, Gatto, Gordon, Grove, Hagman, Halderman, Hall,
Harkey, Hayashi, Roger Hernández, Hill, Huber, Hueso,
Huffman, Jeffries, Knight, Lara, Logue, Bonnie Lowenthal,
Ma, Mansoor, Mendoza, Miller, Mitchell, Monning, Morrell,
Nestande, Nielsen, Norby, Olsen, Pan, Perea, V. Manuel
Pérez, Portantino, Silva, Skinner, Smyth, Solorio,
Swanson, Torres, Valadao, Wagner, Wieckowski, Williams,
Yamada, John A. Pérez
NO VOTE RECORDED: Campos, Cedillo, Davis, Gorell, Jones
AGB:do 7/13/11 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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