BILL NUMBER: AB 1338 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MAY 2, 2011
INTRODUCED BY Assembly Member Roger Hernández
FEBRUARY 18, 2011
An act to add Section 53085.5 to the Government Code,
relating to local government. An act to add Section
33391.1 to the Health and Safety Code, relating to redevelopment.
LEGISLATIVE COUNSEL'S DIGEST
AB 1338, as amended, Roger Hernández. Local government:
economic development: financial assistance.
Redevelopment.
The Community Redevelopment Law authorizes the establishment of
redevelopment agencies in communities to address the effects of
blight, as defined, in blighted areas in those communities known as
project areas. Existing law authorizes an agency to, within a survey
area or for purposes of development, purchase, lease, obtain, or
acquire any real or personal property and to acquire real property by
eminent domain.
This bill would require that on and after January 1, 2012, all
real property purchased or otherwise acquired in exchange for
financial remuneration by an agency pursuant to the above provisions
be subject to an appraisal by a qualified independent appraiser to
determine the fair market value of that property.
Existing law authorizes a local agency, as defined, to require an
applicant for economic development loans, grants, or similar
financial assistance to sign a statement under penalty of perjury
that he or she has not been convicted of a felony.
This bill would require a local agency, as defined, that provides
financial subsidies for economic development prior to paying out any
financial subsidies to make a written finding that the financial
subsidy is not a gift of public funds, and, if relevant, require the
developer to provide a 3rd-party appraisal of the property based on
the fair market value of the property. The bill would, if relevant,
prohibit the local agency from providing more than 25% of the total
financial subsidy until the developer can demonstrate that the
project is ready to enter the construction phase, and no more than
50% of the total financial subsidy until the developer can
demonstrate that at least 50% of the project, as proposed, has been
completed. The bill would authorize the local agency to require the
developer to return the financial subsidy if, after 2 years from
approval, the project is not yet ready to enter the construction
stage.
The bill would also state legislative findings and declarations
that this issue is a statewide concern and not a municipal affair.
Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 33391.1 is added to the Health and
Safety Code, to read:
33391.1. On and after January 1, 2012, all real property
purchased or otherwise acquired in exchange for financial
remuneration by an agency pursuant to Section 33391 shall be subject
to an appraisal by a qualified independent appraiser to determine the
fair market value of that property.
SECTION 1. Section 53085.5 is added to the
Government Code, to read:
53085.5. (a) Any local agency that provides economic development
loans, grants, or similar financial assistance, shall do all of the
following:
(1) Prior to providing any economic development loans, grants, or
similar financial assistance, make a written determination that the
subsidy is not a gift of public funds, as that term is used in
Section 6 of Article XVI of the California Constitution.
(2) In the case of assistance involving property acquisition,
prior to providing any economic development loans, grants, or similar
financial assistance, require the applicant to provide a third-party
appraisal of the property. The third-party appraiser shall use fair
market value to determine the value of the property.
(3) In the case of assistance involving construction, provide no
more than 25 percent of the total economic development loans, grants,
or similar financial assistance to be provided until the applicant
is able to demonstrate that the project is ready to enter the
construction phase.
(4) In the case of assistance involving construction, if the
applicant has demonstrated that the project is ready to enter the
construction phase and has received up to 25 percent of the total
economic development loans, grants, or similar financial assistance,
pursuant to paragraph (3), provide no more than 50 percent of the
total economic development loans, grants, or similar financial
assistance until the applicant can demonstrate that at least 50
percent of the project, as proposed, has been completed.
(5) In the case of assistance involving construction, if the
applicant has demonstrated that at least 50 percent of the project,
as proposed, has been completed and has received up to 50 percent of
the total economic development loans, grants, or similar financial
assistance, pursuant to paragraph (4), the local agency may provide
the applicant the remaining portion of the total amount of the
economic development loans, grants, or similar financial assistance.
(b) In the case of assistance involving construction, if, after
two years from the date of approval of the project and the economic
development loans, grants, or similar financial assistance, the local
agency determines that the project is not ready to enter the
construction phase, pursuant to paragraph (3) of subdivision (a), the
local agency may require the applicant to return the total financial
subsidy that the developer has received to the local agency.
(c) For purposes of this section, "local agency" means any city,
county, city and county, district, special district, or redevelopment
agency.
SEC. 2. The Legislature finds and declares that
responsible use of public funds is an issue of statewide concern and
not a municipal affair as that term is used in Section 5 of Article
XI of the California Constitution. Accordingly, it is the intent of
the Legislature that Section 53085.5 of the Government Code applies
to every city, county, and city and county in this state, including
charter cities, charter counties, and charter city and counties.