BILL NUMBER: AB 1484	AMENDED
	BILL TEXT

	AMENDED IN SENATE  JUNE 25, 2012

INTRODUCED BY   Committee on Budget (Blumenfield (Chair), Alejo,
Bonilla, Brownley, Buchanan, Butler, Cedillo, Chesbro, Dickinson,
Feuer, Gordon, Huffman, Mitchell, Monning, and Swanson)

                        JANUARY 10, 2012

    An act relating to the Budget Act of 2012.  
An act to amend Section 53760.1 of the Government Code, and to amend
Sections 33500, 33501, 34163, 34171, 34173, 34175, 34176, 34177,
34178, 34179, 34180, 34181, 34182, 34183, 34185, 34186, 34187, 34188,
and 34189 of, to add Sections 34167.10, 34177.3, 34177.5, 34178.8,
34179.5, 34179.6, 34179.7, 34179.8, 34182.5, 34183.5, 34189.1,
34189.2, and 34189.3 to, to add Chapter 9 (commencing with Section
34191.1) to Part 1.85 of Division 24 of, and to add and repeal
Section 34176.5 of, the Health and Safety Code, relating to community
redevelopment, and making an appropriation therefor, to take effect
immediately, bill related to the budget.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1484, as amended, Committee on Budget.  Budget Act of
2012.   Community redevelopment.  
   The Community Redevelopment Law authorizes the establishment of
redevelopment agencies in communities to address the effects of
blight, and, among other things, provides that an action may be
brought to review the validity of specified agency actions, findings,
or determinations that occurred after January 1, 2011, within 2
years of the triggering event.  
   This bill would toll the time limit for bringing an action until
the Department of Finance issues a finding of completion to the
successor agency.  
   Existing law dissolved redevelopment agencies and community
development agencies, as of February 1, 2012, and provides for the
designation of successor agencies, as defined. Existing law requires
successor agencies to wind down the affairs of the dissolved
redevelopment agencies and to, among other things, make payments due
for enforceable obligations, as defined, perform obligations required
pursuant to any enforceable obligation, dispose of all assets of the
former redevelopment agency, and to remit unencumbered balances of
redevelopment agency funds, including housing funds, to the county
auditor-controller for distribution to taxing entities.  
   Existing law authorizes the city, county, or city and county that
authorized the creation of a redevelopment agency to retain the
housing assets, functions, and powers previously performed by the
redevelopment agency, excluding amounts on deposit in the Low and
Moderate Income Housing Fund.  
   The bill would modify provisions relating to the transfer of
housing responsibilities associated with dissolved redevelopment
agencies and would define the term "housing asset" for these
purposes. The bill would impose new requirements on successor
agencies with regard to the submittal of the Recognized Obligation
Payment Schedule, the conducting of a due diligence review to
determine the unobligated balances available for transfer to affected
taxing entities, and the recovery and subsequent remittance of funds
determined to have been transferred absent an enforceable
obligation. The bill would authorize the Department of Finance to
issue a finding of completion to a successor agency that completes
the due diligence review and meets other requirements. Upon receiving
a finding of completion, the bill would authorize the successor
agency to participate in a loan repayment program and limited
property management activities.  
   Existing law authorizes the Department of Finance and the
Controller to require any documents associated with enforceable
obligations to be provided to them in a manner of their choosing.
 
   The bill would authorize the county auditor-controller and the
department, under specified circumstances, to require the return of
funds improperly spent or transferred to a public entity and would
authorize the department and the Controller to require the State
Board of Equalization and the county auditor-controller to offset
sales and use tax and property tax allocations, respectively, to the
local agency. The bill would authorize the Controller to review the
activities of a successor agency to determine if an improper asset
transfer had occurred between the successor agency and the city or
county that created the former redevelopment agency, and would
require the Controller to order the return of these assets if such an
asset transfer did occur.  
   The bill would impose new requirements on the county
auditor-controller relating to the allocation of property tax
revenues to affected taxing entities during a specified timeframe. By
imposing additional duties upon local public officials, the bill
would create a state-mandated local program.  
   The bill would appropriate up to $22,000,000 to the Department of
Finance from the General Fund for costs associated with the bill, as
specified.  
   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.  
   This bill would declare that it is to take effect immediately as a
bill providing for appropriations related to the Budget Bill. 

   This bill would express the intent of the Legislature to enact
statutory changes relating to the Budget Act of 2012. 
   Vote: majority. Appropriation:  no   yes
 . Fiscal committee:  no   yes  .
State-mandated local program:  no   yes  .


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

   SECTION 1.    Section 53760.1 of the   
 Government Code   is amended to read: 
   53760.1.  As used in this article the following terms have the
following meanings:
   (a) "Chapter 9" means Chapter 9 (commencing with Section 901) of
Title 11 of the United States Code.
   (b) "Creditor" means either of the following:
   (1) An entity that has a noncontingent claim against a
municipality that arose at the time of or before the commencement of
the neutral evaluation process and whose claim represents at least
five million dollars ($5,000,000) or comprises more than 5 percent of
the local public entity's debt or obligations, whichever is less.
   (2) An entity that would have a noncontingent claim against the
municipality upon the rejection of an executory contract or unexpired
lease in a Chapter 9 case and whose claim would represent at least
five million dollars ($5,000,000) or comprises more than 5 percent of
the local public entity's debt or obligations, whichever is less.
   (c) "Debtor" means a local public entity that may file for
bankruptcy under Chapter 9.
   (d) "Good faith" means participation by a party in the neutral
evaluation process with the intent to negotiate toward a resolution
of the issues that are the subject of the neutral evaluation process,
including the timely provision of complete and accurate information
to provide the relevant parties through the neutral evaluation
process with sufficient information, in a confidential manner, to
negotiate the readjustment of the municipality's debt.
   (e) "Interested party" means a trustee, a committee of creditors,
an affected creditor, an indenture trustee, a pension fund, a
bondholder, a union that, under its collective bargaining agreements,
has standing to initiate contract or debt restructuring negotiations
with the municipality, or a representative selected by an
association of retired employees of the public entity who receive
income from the public entity convening the neutral evaluation. A
local public entity may invite holders of contingent claims to
participate as interested parties in the neutral evaluation if the
local public entity determines that the contingency is likely to
occur and the claim may represent five million dollars ($5,000,000)
or comprise more than 5 percent of the local public entity's debt or
obligations, whichever is less.
   (f) "Local public entity" means any county, city, district, public
authority, public agency, or other entity, without limitation, that
is a municipality as defined in Section 101(40) of Title 11 of the
United States Code (bankruptcy), or that qualifies as a debtor under
any other federal bankruptcy law applicable to local public entities
 , and also includes a successor agency to a redevelopment agency
created pursuant to Part 1.85 (commencing with Section 34170) of
Division 24 of the Health and Safety Code  . For purposes of
this article, "local public entity" does not include a school
district.
   (g) "Local public entity representative" means the person or
persons designated by the local public agency with authority to make
recommendations and to attend the neutral evaluation on behalf of the
governing body of the municipality.
   (h) "Neutral evaluation" is a form of alternative dispute
resolution that may be known as mandatory mediation. A "neutral
evaluator" may also be known as a mediator.
   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. 
   (e) The time limit for bringing an action under subdivision (c) or
(d) shall be tolled with respect to the adoptions, findings, and
determinations of any former redevelopment agency or its legislative
body until the Department of Finance has issued a finding of
completion to the successor agency of that former redevelopment
agency pursuant to Section 34179.7. Subdivisions (c) and (d) shall
not apply to any adoption, finding, or determination of any former
redevelopment agency or its legislative body after the department has
issued a finding of completion to the successor agency of that
former redevelopment agency pursuant to Section 34179.7. 
   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.  The time limit for
bringing an action under this subdivision shall be tolled with
respect to the validity or legality of any issue, document, or action
described in subdivision (a) of any former redevelopment agency or
its legislative body until the Department of Finance has issued a
finding of completion to the successor agency of that former
redevelopment agency pursuant to Section 34179.7. This subdivision
shall not apply to any adoption, finding, or determination of any
former redevelopment agency or its legislative body after the
department has issued a finding of completion to the successor agency
of that former redevelopment agency pursuant to Section 34179.7.

   (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 34163 of the   Health and
Safety Code   is amended to read: 
   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   Making any future 
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.
   SEC. 5.    Section 34167.10 is added to the 
 Health and Safety Code   , to read:  
   34167.10.  (a) Notwithstanding any other law, for purposes of this
part and Part 1.85 (commencing with Section 34170), the definition
of a city, county, or city and county includes, but is not limited
to, the following entities:
   (1) Any reporting entity of the city, county, or city and county
for purposes of its comprehensive annual financial report or similar
report.
   (2) Any component unit of the city, county, or city and county.
   (3) Any entity which is controlled by the city, county, or city
and county, or for which the city, county, or city and county is
financially responsible or accountable.
   (b) The following factors shall be considered in determining that
an entity is controlled by the city, county, or city and county, and
are therefore included in the definition of a city, county, or city
and county for purposes of this part and Part 1.85 (commencing with
Section 34170):
   (1) The city, county, or city and county exercises substantial
municipal control over the entity's operations, revenues, or
expenditures.
   (2) The city, county, or city and county has ownership or control
over the entity's property or facilities.
   (3) The city, county, or city and county and the entity share
common or overlapping governing boards, or coterminous boundaries.
   (4) The city, county, or city and county was involved in the
creation or formation of the entity.
   (5) The entity performs functions customarily or historically
performed by municipalities and financed thorough levies of property
taxes.
   (6) The city, county, or city and county provides administrative
and related business support for the entity, or assumes the expenses
incurred in the normal daily operations of the entity.
   (c) For purposes of this section, it shall not be relevant that
the entity is formed as a separate legal entity, nonprofit
corporation, or otherwise, or is not subject to the constitution debt
limitation otherwise applicable to a city, county, or city and
county. The provisions in this section are declarative of existing
law as the entities described herein are and were intended to be
included within the requirements of this part and Part 1.85
(commencing with Section 34170) and any attempt to determine
otherwise would thwart the intent of these two parts. 
   SEC. 6.    Section 34171 of the   Health and
Safety Code   is amended to read: 
   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  
on the Recognized Obligation Payment Schedule covering the period
January 1, 2012, through June 30, 2012,  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) , unless
the oversight board reduces this amount,  for any fiscal year or
such lesser amount as agreed to by the successor agency. However,
the allowance amount shall exclude  , and shall not apply to,
 any administrative costs that can be paid from bond proceeds or
from sources other than property tax.  Administrative cost
allowances shall exclude any litigation expenses related to assets or
obligations, settlements and   judgments, and the costs of
maintaining assets prior to disposition. Employee costs associated
with work on specific project implementation activities, including,
but not limited to, construction inspection, project management, or
actual construction, shall be considered project-specific costs and
shall not constitute administrative costs. 
   (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   Chapter 10.5  
(commencing with Section 5850) of Division 6 of Title 1  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.  A reserve may be held when
required by the bond indenture or when the next property tax
allocation will be insufficient to pay all obligations due under the
provisions of the bond for the next payment due in the following half
of the calendar year. 
   (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.  Costs incurred to
fulfill collective bargaining agreements for layoffs or terminations
of city employees who performed work directly on behalf of the former
redevelopment agency shall be considered enforceable obligat 
 ions payable from property tax funds. The obligations to
employees specified in this subparagraph shall remain enforceable
obligations payable from property tax funds for any employee to whom
those obligations apply if that employee is  transferred to
the entity assuming the housing functions of the former redevelopment
agency pursuant to Section 34176. The successor agency or designated
local authority shall enter into an agreement with the housing
entity to reimburse it for any costs of the employee obligations.

   (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.  Titles of or
headings used on or in a document shall not be relevant in
determining the existence of an enforceable obligation. 
   (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 concerning litigation
expenses related to asse   ts or obligations, settlements
and judgements, and the costs of maintaining assets prior to
disposition, and  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.  Repayments shall be transferred
to the Low and Moderate Income Housing Asset Fund established
pursuant to subdivision (d) of Section 34176 as a housing asset and
shall be used in a manner consistent with the affordable housing
requirements of the Community Redevelopment Law (Part 1 (commencing
with Section 33000)). 
   (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   successor entity to the former
redevelopment agency  as  provided  
described  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. 
   (l) "Property taxes" include all property tax revenues, including
those from unitary and supplemental and roll corrections applicable
to tax increment.  
   (m) "Department" means the Department of Finance unless the
context clearly refers to another state agency.  
   (n) "Sponsoring entity" means the city, county, or city and
county, or other entity that authorized the creation of each
redevelopment agency.  
   (o) "Final judicial determination" means a final judicial
determination made by any state court that is not appealed, or by a
court of appellate jurisdiction that is not further appealed, in an
action by any party. 
   SEC. 7.    Section 34173 of the   Health and
Safety Code   is amended to read: 
   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   If  the redevelopment
agency was in the form of a joint powers authority, and 
where   if  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   If  the redevelopment
agency was in the form of a joint powers authority, and 
where   if  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 January 13, 2012.
   (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)  (A)    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. 
   (B) Designated local authority members are protected by the
immunities applicable to public entities and public employees
governed by Part 1 (commencing with Section 810) and Part 2
(commencing with Section 814) of Division 3.6 of Title 1 of the
Government Code.  
   (4) A city, county, or city and county, or the entities forming
the joint powers authority that authorized the creation of a
redevelopment agency and that elected not to serve as the successor
agency under this part, may subsequently reverse this decision and
agree to serve as the successor agency pursuant to this section. Any
reversal of this decision shall not become effective for 60 days
after notice has been given to the current successor agency and the
oversight board and shall not invalidate any action of the successor
agency or oversight board taken prior to the effective date of the
transfer of responsibility. 
   (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. 
   (f) Any existing cleanup plans and liability limits authorized
under the Polanco Redevelopment Act (Article 12.5 (commencing with
Section 33459) of Chapter 4 of Part 1) shall be transferred to the
successor agency and may be transferred to the successor housing
entity at that entity's request.  
   (g) A successor agency is a separate public entity from the public
agency that provides for its governance and the two entities shall
not merge. The liabilities of the former redevelopment agency shall
not be transferred to the sponsoring entity and the assets shall not
become assets of the sponsoring entity. A successor agency has its
own name, can be sued, and can sue. All litigation involving a
redevelopment agency shall automatically be transferred to the
successor agency. The separate former redevelopment agency employees
shall not automatically become sponsoring entity employees of the
sponsoring entity and the successor agency shall retain its own
collective bargaining status. As successor entities, successor
agencies succeed to the organizational status of the former
redevelopment agency, but without any legal authority to participate
in redevelopment activities, except to complete any work related to
an approved enforceable obligation. Each successor agency shall be
deemed to be a local entity for purposes of the Ralph M. Brown Act
(Chapter 9 (commencing with Section 54950) of Part 1 of Division 2 of
Title 5 of the Government Code).  
   (h) The city, county, or city and county that authorized the
creation of a redevelopment agency may loan or grant funds to a
successor agency for administrative costs, enforceable obligations,
or project-related expenses at the city's discretion, but the receipt
and use of these funds shall be reflected on the Recognized
Obligation Payment Schedule or the administrative budget and
therefore are subject to the oversight and approval of the oversight
board. An enforceable obligation shall be deemed to be created for
the repayment of those loans.  
   (i) At the request of the city, county, or city and county,
notwithstanding Section 33205, all land use related plans and
functions of the former redevelopment agency are hereby transferred
to the city, county, or city and county that authorized the creation
of a redevelopment agency; provided, however, that the city, county,
or city and county shall not create a new project area, add territory
to, or expand or change the boundaries of a project area, or take
any action that would increase the amount of obligated property tax
(formerly tax increment) necessary to fulfill any existing
enforceable obligation beyond what was authorized as of June 27,
2011. 
   SEC. 8.    Section 34175 of the   Health and
Safety Code   is amended to read: 
   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 February 1, 2012, 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 February 1, 2012.  Any legal or
contractual restrictions on the use of these funds or assets shall
also be transferred to the successor agency. 
   SEC. 9.    Section 34176 of the   Health and
Safety Code   is amended to read: 
   34176.  (a)  (1)    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
 authority to perform  housing functions previously
performed by a redevelopment agency, all rights, powers, duties,
 and  obligations,  and housing assets, as
defined in subdivision (e),  excluding any amounts on deposit in
the Low and Moderate Income Housing Fund  and enforceable
obligations retained by the successor agency  , shall be
transferred to the city, county, or city and county. 
   (2) The entity assuming the housing functions of the former
redevelopment agency shall submit to the Department of Finance by
August 1, 2012, a list of all housing assets that contains an
explanation of how the assets meet the criteria specified in
subdivision (e). The Department of Finance shall prescribe the format
for the submission of the list. The list shall include assets
transferred between February 1, 2012, and the date upon which the
list is created. The department shall have up to 30 days from the
date of receipt of the list to object to any of the assets or
transfers of assets identified on the list. If the Department of
Finance objects to assets on the list, the entity assuming the
housing functions of the former redevelopment agency may request a
meet and confer process within five business days of receiving the
department objection. If the transferred asset is deemed not to be a
housing asset as defined in subdivision (e), it shall be returned to
the successor agency and the provision of Section 34178.8 may apply.
If a housing asset has been previously pledged to pay for bonded
indebtedness, the successor agency shall maintain control of the
asset in order to pay for the bond debt. 
   (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  enforceable
obligations retained by the successor agency and  any amounts
in the Low and Moderate Income Housing Fund, shall be transferred as
follows:
   (1)  Where   If  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   If  there is one local
housing authority in the territorial jurisdiction of the former
redevelopment agency, to that local housing authority.
   (3)  Where   If    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   that assumes  the housing
functions formerly performed by the redevelopment agency  and
receives the transferred housing assets  may enforce
affordability covenants and perform related activities pursuant to
applicable provisions of the Community Redevelopment Law (Part 1
(commencing with Section  33000)   33000)) 
, including, but not limited to, Section 33418. 
   (d) Except as specifically provided in Section 34191.4, any funds
transferred to the city, county, or city and county or designated
entity pursuant to this section, together with any funds generated
from housing assets, as defined in subdivision (e), shall be
maintained in a separate Low and Moderate Income Housing Asset Fund
which is hereby created in the accounts of the entity assuming the
housing functions pursuant to this section. Funds in this account
shall be used in accordance with applicable housing-related
provisions of the Community Redevelopment Law (Part 1 (commencing
with Section 33000)).  
   (e) For purposes of this part, "housing asset" includes all of the
following:  
   (1) Any real property, interest in, or restriction on the use of
real property, whether improved or not, and any personal property
provided in residences, including furniture and appliances, all
housing-related files and loan documents, office supplies, software
licenses, and mapping programs, that were acquired for low- and
moderate-income housing purposes, either by purchase or through a
loan, in whole or in part, with any source of funds.  
   (2) Any funds that are encumbered by an enforceable obligation to
build or acquire low- and moderate-income housing, as defined by the
Community Redevelopment Law (Part 1 (commencing with Section 33000))
unless required in the bond covenants to be used for repayment
purposes of the bond.  
   (3) Any loan or grant receivable, funded from the Low and Moderate
Income Housing Fund, from homebuyers, homeowners, nonprofit or
for-profit developers, and other parties that require occupancy by
persons of low or moderate income as defined by the Community
Redevelopment Law (Part 1 (commencing with Section 33000)). 

   (4) Any funds derived from rents or operation of properties
acquired for low- and moderate-income housing purposes by other
parties that were financed with any source of funds, including
residual receipt payments from developers, conditional grant
repayments, cost savings and proceeds from refinancing, and principal
and interest payments from homebuyers subject to enforceable income
limits.  
   (5) A stream of rents or other payments from housing tenants or
operators of low- and moderate-income housing financed with any
source of funds that are used to maintain, operate, and enforce the
affordability of housing or for enforceable obligations associated
with low- and moderate-income housing.  
   (6) (A) Repayments of loans or deferrals owed to the Low and
Moderate Income Housing Fund pursuant to subparagraph (G) of
paragraph (1) of subdivision (d) of Section 34171, which shall be
used consistent with the affordable housing requirements in the
Community Redevelopment Law (Part 1 (commencing with Section 33000)).
 
   (B) Loan or deferral repayments shall not be made prior to the
2013-14 fiscal year. Beginning in the 2013-14 fiscal year, the
maximum repayment amount authorized each fiscal year for repayments
made pursuant to this paragraph and subdivision (b) of Section
34191.4 combined shall be equal to one-half of the increase between
the amount distributed to taxing entities pursuant to paragraph (4)
of subdivision (a) of Section 34183 in that fiscal year and the
amount distributed to taxing entities pursuant to that paragraph in
the 2012-13 base year. Loan or deferral repayments made pursuant to
this paragraph shall take priority over amounts to be repaid pursuant
to subdivision (b) of Section 34191.4.  
   (f) If a development includes both low- and moderate-income
housing that meets the definition of a housing asset under
subdivision (e) and other types of property use, including, but not
limited to, commercial use, governmental use, open space, and parks,
the oversight board shall consider the overall value to the community
as well as the benefit to taxing entities of keeping the entire
development intact or dividing the title and control over the
property between the housing successor and the successor agency or
other public or private agencies. The disposition of those assets may
be accomplished by a revenue-sharing arrangement as approved by the
oversight board on behalf of the affected taxing entities.  

   (g) (1) (A) The entity assuming the housing functions pursuant to
this section may designate the use of and commit indebtedness
obligation proceeds that remain after the satisfaction of enforceable
obligations that have been approved in a Recognized Obligation
Payment Schedule and that are consistent with the indebtedness
obligation covenants. The proceeds shall be derived from indebtedness
obligations that were issued for the purposes of affordable housing
prior to January 1, 2011, and were backed by the Low and Moderate
Income Housing Fund. Enforceable obligations may be satisfied by the
creation of reserves for the projects that are the subject of the
enforceable obligation that are consistent with the contractual
obligations for those projects, or by expending funds to complete the
projects.  
   (B) The entity assuming the housing functions pursuant to this
section shall provide notice to the successor agency of any
designations of use or commitments of funds specified in subparagraph
(A) that it wishes to make at least 20 days before the deadline for
submission of the Recognized Obligation Payment Schedule to the
oversight board. Commitments and designations shall not be valid and
binding on any party until they are included in an approved and valid
Recognized Obligation Payment Schedule. The review of these
designations and commitments by the successor agency, oversight
board, and Department of Finance shall be limited to a determination
that the designations and commitments are consistent with bond
covenants and that there are sufficient funds available.  
   (2) Funds shall be used and committed in a manner consistent with
the purposes of the Low and Moderate Income Housing Asset Fund.
Notwithstanding any other law, the successor agency shall retain and
expend the excess housing obligation proceeds at the discretion of
the succeeding housing entity, provided that the successor agency
ensures that the proceeds are expended in a manner consistent with
the indebtedness obligation covenants and with any requirements
relating to the tax status of those obligations. The amount expended
shall not exceed the amount of indebtedness obligation proceeds
available and such expenditure shall constitute the creation of
excess housing proceeds expenditures to be paid from the excess
proceeds. Excess housing proceeds expenditures shall be listed
separately on the Recognized Obligation Payment Schedule submitted by
the successor agency. 
   SEC. 10.    Section 34176.5 is added to the 
 Health and Safety Code   , to read:  
   34176.5.  (a) Notwithstanding any other law, the Director of
Finance is authorized to contract with auditors, lawyers, and other
types of advisors and consultants to assist, advise, and represent
the director and the Department of Finance in any matter or action
arising out of or contemplated by this part or Part 1.8 (commencing
with Section 34161). In furtherance of this authorization, Sections
14827.1, 14827.2, and 14838 of the Government Code, and Article 4
(commencing with Section 10335) of Chapter 2 of Part 2 of Division 2
of and Section 10295 of, the Public Contract Code shall not apply to
any agreement entered into by the director pursuant to this section.
   (b) In addition to the waivers of statute provided in subdivision
(a), Section 6072 of the Business and Professions Code shall not
apply to the legal services agreement entered into by the director
pursuant to this section.
   (c) This section shall remain in effect only until January 1,
2014, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2014, deletes or extends
that date. 
   SEC. 11.    Section 34177 of the   Health
and Safety Code   is amended to read: 
   34177.  Successor agencies are required to do all of the
following:
   (a) Continue to make payments due for enforceable obligations.
   (1) On and after February 1, 2012, 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)   (d)  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.  In recognition of the
fact that the timing of the California Supreme Court's ruling in the
case California Redevelopment Association v. Matosantos (2011) 53
Cal.4th 231 delayed the preparation by successor agencies and the
approval by oversight boards of the January 1, 2012, through June 30,
2012, Recognized Obligation Payment Schedule, a successor agency may
amend   the Enforceable Obligation Payment Schedule to
authorize the continued payment of enforceable obligations until the
time that the January 1, 2012, through June 30, 2012, Recognized
Obligation Payment Schedule has been approved by the  
oversight board and by the Department of Finance. 
   (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  May 1, 2012   the date the
Recognized Obligation Payment Schedule is valid pursuant to
subdivision (l)  , 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 May 1, 2012   after it
becomes valid  , 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
 (Part 1 (commencing with Section 33000))  .
   (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 February 1, 2012, 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.  The requirements of this subdivision shall
not apply to a successor agency that has been issued a finding of
completion by the Department of Finance pursuant to Section 34179.7.

   (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 March 1,
2012. From October 1, 2011, to July 1, 2012, the   . 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   the  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.
 The successor agency shall submit a copy of the Recognized
Obligation Payment Schedule to the county administrative officer, the
county auditor-controller, and the Department of Finance at the same
time that the successor agency submits the Recognized Obligation
Payment Schedule to the oversight board for approval. 
   (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 April 15, 2012, for the period of
January 1, 2012, to June 30, 2012, inclusive.  This Recognized
Obligation Payment Schedule shall include all payments made by the
former redevelopment agency between January 1, 2012, through January
31, 2012, and shall include all payments proposed to be made by the
successor agency from February 1, 2012, through June 30, 2012. 
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. 
   (m) The Recognized Obligation Payment Schedule for the period of
January 1, 2013, to June 30, 2013, shall be submitted by the
successor agency, after approval by the oversight board, no later
than September 1, 2012. Commencing with the Recognized Obligation
Payment Schedule covering the period July 1, 2013, through December
31, 2013, successor agencies shall submit an oversight board-approved
Recognized Obligation Payment Schedule to the Department of Finance
and to the county auditor-controller no fewer than 90 days before the
date of property tax distribution. The Department of Finance shall
make its determination of the enforceable obligations and the amounts
and funding sources of the enforceable obligations no later than 45
days after the Recognized Obligation Payment Schedule is submitted.
Within five business days of the department's determination, a
successor agency may request additional review by the department and
an opportunity to meet and confer on disputed items. The meet and
confer period may vary; an untimely submittal of a Recognized
Obligation Payment Schedule may result in a meet and confer period of
less than 30 days. The department shall notify the successor agency
and the county auditor-controllers as to the outcome of its review at
least 15 days before the date of property tax distribution. 

   (1) The successor agency shall submit a copy of the Recognized
Obligation Payment Schedule to the Department of Finance
electronically, and the successor agency shall complete the
Recognized Obligation Payment Schedule in the manner provided for by
the department. A successor agency shall be in noncompliance with
this paragraph if it only submits to the department an electronic
message or a letter stating that the oversight board has approved a
Recognized Obligation Payment Schedule.  
   (2) If a successor agency does not submit a Recognized Obligation
Payment Schedule by the deadlines provided in this subdivision, the
city, county, or city and county that created the redevelopment
agency shall be subject to a civil penalty equal to ten thousand
dollars ($10,000) per day for every day the schedule is not submitted
to the department. The civil penalty shall be paid to the county
auditor-controller for allocation to the taxing entities under
Section 34183. If a successor agency fails to submit a Recognized
Obligation Payment Schedule by the deadline, any creditor of the
successor agency or the Department of Finance or any affected taxing
entity shall have standing to and may request a writ of mandate to
require the successor agency to immediately perform this duty. Those
actions may be filed only in the County of Sacramento and shall have
priority over other civil matters. Additionally, if an agency does
not submit a Recognized Obligation Payment Schedule within ten days
of the deadline, the maximum administrative cost allowance for that
period shall be reduced by 25 percent.  
   (3) If a successor agency fails to submit to the department an
oversight board-approved Recognized Obligation Payment Schedule that
complies with all requirements of this subdivision within five
business days of the date upon which the Recognized Obligation
Payment Schedule is to be used to determine the amount of property
tax allocations, the department may determine if any amount should be
withheld by the county auditor-controller for payments for
enforceable obligations from distribution to taxing entities, pending
approval of a Recognized Obligation Payment Schedule. The county
auditor-controller shall distribute the portion of any of the sums
withheld pursuant to this paragraph to the affected taxing entities
in accordance with paragraph (4) of subdivision (a) of Section 34183
upon notice by the department that a portion of the withheld balances
are in excess of the amount of enforceable obligations. The county
auditor-controller shall distribute withheld funds to the successor
agency only in accordance with a Recognized Obligation Payment
Schedule approved by the department. County auditor-controllers shall
lack the authority to withhold any other amounts from the
allocations provided for under Section 34183 or 34188 unless required
by a court order.  
   (n) Cause a postaudit of the financial transactions and records of
the successor agency to be made at least annually by a certified
public accountant. 
   SEC. 12.    Section 34177.3 is added to the 
 Health and Safety Code   , to read:  
   34177.3.  (a) Successor agencies shall lack the authority to, and
shall not, create new enforceable obligations under the authority of
the Community Redevelopment Law (Part 1 (commencing with Section
33000)) or begin new redevelopment work, except in compliance with an
enforceable obligation that existed prior to June 28, 2011.
   (b) Successor agencies may create enforceable obligations to
conduct the work of winding down the redevelopment agency, including
hiring staff, acquiring necessary professional administrative
services and legal counsel, and procuring insurance.
   (c) Successor agencies shall lack the authority to, and shall not,
transfer any powers or revenues of the successor agency to any other
party, public or private, except pursuant to an enforceable
obligation on a Recognized Obligation Payment Schedule approved by
the department. Any such transfers of authority or revenues that are
not made pursuant to an enforceable obligation on a Recognized
Obligation Payment Schedule approved by the Department of Finance are
hereby declared to be void, and the successor agency shall take
action to reverse any of those transfers. The Controller may audit
any transfer of authority or revenues prohibited by this section and
may order the prompt return of any money or other things of value
from the receiving party.
   (d) Redevelopment agencies that resolved to participate in the
Voluntary Alternative Redevelopment Program under Chapter 6 of the
First Extraordinary Session of the Statutes of 2011 were and are
subject to the provisions of Part 1.8 (commencing with Section
34161). Any actions taken by redevelopment agencies to create
obligations after June 27, 2011, are ultra vires and do not create
enforceable obligations.
   (e) The Legislature finds and declares that the provisions of this
section are declaratory of existing law. 
   SEC. 13.    Section 34177.5 is added to the 
 Health and Safety Code   , to read:  
   34177.5.  (a) In addition to the powers granted to each successor
agency, and notwithstanding anything in the act adding this part,
including, but not limited to, Sections 34162 and 34189, a successor
agency shall have the authority, rights, and powers of the
redevelopment agency to which it succeeded solely for the following
purposes:
   (1) For the purpose of issuing bonds or incurring other
indebtedness to refund the bonds or other indebtedness of its former
redevelopment agency or of the successor agency to provide savings to
the successor agency, provided that (A) the total interest cost to
maturity on the refunding bonds or other indebtedness plus the
principal amount of the refunding bonds or other indebtedness shall
not exceed the total remaining interest cost to maturity on the bonds
or other indebtedness to be refunded plus the remaining principal of
the bonds or other indebtedness to be refunded, and (B) the
principal amount of the refunding bonds or other indebtedness shall
not exceed the amount required to defease the refunded bonds or other
indebtedness, to establish customary debt service reserves, and to
pay related costs of issuance. If the foregoing conditions are
satisfied, the initial principal amount of the refunding bonds or
other indebtedness may be greater than the outstanding principal
amount of the bonds or other indebtedness to be refunded. The
successor agency may pledge to the refunding bonds or other
indebtedness the revenues pledged to the bonds or other indebtedness
being refunded, and that pledge, when made in connection with the
issuance of such refunding bonds or other indebtedness, shall have
the same lien priority as the pledge of the bonds or other
obligations to be refunded, and shall be valid, binding, and
enforceable in accordance with its terms.
   (2) For the purpose of issuing bonds or other indebtedness to
finance debt service spikes, including balloon maturities, provided
that (A) the existing indebtedness is not accelerated, except to the
extent necessary to achieve substantially level debt service, and (B)
the principal amount of the bonds or other indebtedness shall not
exceed the amount required to finance the debt service spikes,
including establishing customary debt service reserves and paying
related costs of issuance.
   (3) For the purpose of amending an existing enforceable obligation
under which the successor agency is obligated to reimburse a
political subdivision of the state for the payment of debt service on
a bond or other obligation of the political subdivision, or to pay
all or a portion of the debt service on the bond or other obligation
of the political subdivision to provide savings to the successor
agency, provided that (A) the enforceable obligation is amended in
connection with a refunding of the bonds or other obligations of the
political subdivision so that the enforceable obligation will apply
to the refunding bonds or other refunding indebtedness of the
political subdivision, (B) the total interest cost to maturity on the
refunding bonds or other indebtedness plus the principal amount of
the refunding bonds or other indebtedness shall not exceed the total
remaining interest cost to maturity on the bonds or other
indebtedness to be refunded plus the remaining principal of the bonds
or other indebtedness to be refunded, and (C) the principal amount
of the refunding bonds or other indebtedness shall not exceed the
amount required to defease the refunded bonds or other indebtedness,
to establish customary debt service reserves and to pay related costs
of issuance. The pledge set forth in that amended enforceable
obligation, when made in connection with the execution of the
amendment of the enforceable obligation, shall have the same lien
priority as the pledge in the enforceable obligation prior to its
amendment and shall be valid, binding, and enforceable in accordance
with its terms.
   (4) For the purpose of issuing bonds or incurring other
indebtedness to make payments under enforceable obligations when the
enforceable obligations include the irrevocable pledge of property
tax increment, formerly tax increment revenues prior to the effective
date of this part, or other funds and the obligation to issue bonds
secured by that pledge. The successor agency may pledge to the bonds
or other indebtedness the property tax revenues and other funds
described in the enforceable obligation, and that pledge, when made
in connection with the issuance of the bonds or the incurring of
other indebtedness, shall be valid, binding, and enforceable in
accordance with its terms. This paragraph shall not be deemed to
authorize a successor agency to increase the amount of property tax
revenues pledged under an enforceable obligation or to pledge any
property tax revenue not already pledged pursuant to an enforceable
obligation. This paragraph does not constitute a change in, but is
declaratory of, the existing law.
   (b) The refunding bonds authorized under this section may be
issued under the authority of Article 11 (commencing with Section
53580) of Chapter 3 of Part 1 of Division 2 of Title 5 of the
Government Code, and the refunding bonds may be sold at public or
private sale, or to a joint powers authority pursuant to the
Marks-Roos Local Bond Pooling Act (Article 4 (commencing with Section
6584) of Chapter 5 of Division 7 of Title 1 of the Government Code).

   (c) (1) Prior to incurring any bonds or other indebtedness
pursuant to this section, the successor agency may subordinate to the
bonds or other indebtedness the amount required to be paid to an
affected taxing entity pursuant to paragraph (1) of subdivision (a)
of Section 34183, provided that the affected taxing entity has
approved the subordinations pursuant to this subdivision.
   (2) At the time the successor agency requests an affected taxing
entity to subordinate the amount to be paid to it, the successor
agency shall provide the affected taxing entity with substantial
evidence that sufficient funds will be available to pay both the debt
service on the bonds or other indebtedness and the payments required
by paragraph (1) of subdivision (a) of Section 34183, 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 successor agency will not be able to pay the debt service
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.
   (d) 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 or other obligations
authorized by this section, the pledge of revenues to those bonds or
other obligations authorized by this section, the legality and
validity of all proceedings theretofore taken and, as provided in the
resolution of the legislative body of the successor agency
authorizing the bonds or other obligations authorized by this
section, proposed to be taken for the authorization, execution,
issuance, sale, and delivery of the bonds or other obligations
authorized by this section, and for the payment of debt service on
the bonds or the payment of amounts under other obligations
authorized by this section. Subdivision (c) of Section 33501 shall
not apply to any such action. The Department of Finance shall be
notified of the filing of any action as an affected party.
   (e) Notwithstanding any other law, including, but not limited to,
Section 33501, an action to challenge the issuance of bonds, the
incurrence of indebtedness, the amendment of an enforceable
obligation, or the execution of a financing agreement by a successor
agency shall be brought within 30 days after the date on which the
oversight board approves the resolution of the successor agency
approving the issuance of bonds, the incurrence of indebtedness, the
amendment of an enforceable obligation, or the execution of a
financing agreement authorized under this section.
   (f) The actions authorized in this section shall be subject to the
approval of the oversight board, as provided in Section 34180.
Additionally, an oversight board may direct the successor agency to
commence any of the transactions described in subdivision (a) so long
as the successor agency is able to recover its related costs in
connection with the transaction. After a successor agency, with
approval of the oversight board, issues any bonds, incurs any
indebtedness, or executes an amended enforceable obligation pursuant
to subdivision (a), the oversight board shall not unilaterally
approve any amendments to or early termination of the bonds,
indebtedness, or enforceable obligation. If, under the authority
granted to it by subdivision (h) of Section 34179, the Department of
Finance either reviews and approves or fails to request review within
five business days of an oversight board approval of an action
authorized by this section, the scheduled payments on the bonds or
other indebtedness shall be listed in the Recognized Obligation
Payment Schedule and shall not be subject to further review and
approval by the department or the Controller. The department may
extend its review time to 60 days for actions authorized in this
section and may seek the assistance of the Treasurer in evaluating
proposed actions under this section.
   (g) Any bonds, indebtedness, or amended enforceable obligation
authorized by this section shall be considered indebtedness incurred
by the dissolved redevelopment agency, with the same legal effect as
if the bonds, indebtedness, financing agreement, or amended
enforceable obligation had been issued, incurred, or entered into
prior to June 29, 2011, in full conformity with the applicable
provisions of the Community Redevelopment Law that existed prior to
that date, shall be included in the successor agency's Recognized
Obligation Payment Schedule, and shall be secured by a pledge of, and
lien on, and shall be repaid from moneys deposited from time to time
in the Redevelopment Property Tax Trust Fund established pursuant to
subdivision (c) of Section 34172, as provided in paragraph (2) of
subdivision (a) of Section 34183. Property tax revenues pledged to
any bonds, indebtedness, or amended enforceable obligations
authorized by this section are taxes allocated to the successor
agency pursuant to subdivision (b) of Section 33670 and Section 16 of
Article XVI of the California Constitution.
   (h) The successor agency shall make diligent efforts to ensure
that the lowest long-term cost financing is obtained. The financing
shall not provide for any bullets or spikes and shall not use
variable rates. The successor agency shall make use of an independent
financial advisor in developing
              financing proposals and shall make the work products of
the financial advisor available to the Department of Finance at its
request.
   (i) If an enforceable obligation provides for an irrevocable
commitment of property tax revenue and where allocation of such
revenues is expected to occur over time, the successor agency may
petition the Department of Finance to provide written confirmation
that its determination of such enforceable obligation as approved in
a Recognized Obligation Payment Schedule is final and conclusive, and
reflects the department's approval of subsequent payments made
pursuant to the enforceable obligation. If the confirmation is
granted, then the department's review of such payments in future
Recognized Obligation Payment Schedules shall be limited to
confirming that they are required by the prior enforceable
obligation.
   (j) The successor agency may request that the department provide a
written determination to waive the two-year statute of limitations
on an action to review the validity of the adoption or amendment of a
redevelopment plan pursuant to subdivision (c) of Section 33500 or
on any findings or determinations made by the agency pursuant to
subdivision (d) of Section 33500. The department at its discretion
may provide a waiver if it determines it is necessary for the agency
to fulfill an enforceable obligation. 
   SEC. 14.    Section 34178 of the   Health
and Safety Code   is amended to read: 
   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.  A
successor agency or an oversight board shall not exercise the powers
granted by this subdivision to restore funding for an enforceable
obligation that was deleted or reduced by the Department of Fina
  nce pursuant to subdivision (h) of Section 34179 unless it
reflects the decisions made during the meet and confer process with
the Department of Finance or pursuant to a court order. 
   (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.
   SEC. 15.    Section 34178.8 is added to the 
 Health and Safety Code   , to read:  
   34178.8.  Commencing on the effective date of the act adding this
section, the Controller shall review the activities of successor
agencies in the state to determine if an asset transfer has occurred
after January 31, 2012, between the successor agency and the city,
county, or city and county that created a redevelopment agency, or
any other public agency, that was not made pursuant to an enforceable
obligation on an approved and valid Recognized Obligation Payment
Schedule. If such an asset transfer did occur, to the extent not
prohibited by state and federal law, the Controller shall order the
available assets to be returned to the successor agency. Upon
receiving that order from the Controller, an affected local agency
shall, as soon as practicable, reverse the transfer and return the
applicable assets to the successor agency. This section shall not
apply to housing assets as defined in subdivision (e) of Section
34176. 
   SEC. 16.    Section 34179 of the   Health
and Safety Code   is amended to read: 
   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 May 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)  (A)    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. 
   (B)  On or after the effective date of this subparagraph, the
county auditor-controller may determine which is the largest special
district for purposes of this section. 
   (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. 
In the case where city or county employees performed administrative
duties of the former redevelopment agency, the appointment shall be
made from the recognized employee organization representing those
employees. If a recognized employee organization does not exist for
either the employees of the former redevelopment agency or the city
or county employees performing administrative duties of the former
redevelopment agency, the appointment shall be made from among the
employees of the successor agency. In voting to approve a contract as
an enforceable obligation, a member appointed pursuant to this
paragraph shall not be deemed to be interested in the contract by
virtue of being an employee of the successor agency or community for
purposes of Section 1090 of the Government Code. 
   (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   If  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   if that  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 
 if that  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 May 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.   are
protected by the immunities applicable to public entities and public
employees governed by Part 1 (commencing with Section 810) and Part 2
(commencing with Section 814) of Division 3.6 of Title 1 of the
Government Code. 
   (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.  All actions taken by the oversight board shall be adopted
by resolution. 
   (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.   Written notice and information about all
actions taken by an oversight board shall be provided to the
department by electronic means and in a manner of the department's
choosing. An action shall become effective five business days after
notice in the manner specified by the department is provided unless
the department requests a review.  Each oversight board shall
designate an official to whom the department may make  such
  those  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   Except as otherwise provided
in this part, in  the event that the department requests a
review of a given oversight board action, it shall have  10
  40  days from the date of its request to approve
the oversight board action or return it to the oversight board for
reconsideration and  such   th   e
 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.  If the department
reviews a Recognized Obligation Payment Schedule, the department may
eliminate or modify any item on that schedule prior to its approval.
The county auditor-controller shall reflect the actions of the
department in determining the amount of property tax revenues to
allocate to the successor agency. The department shall provide notice
to the successor agency and the county auditor-controller as to the
reasons for its actions. To the extent that an oversight board
continues to dispute a determination with the department, one or
  more future recognized obligation schedules may reflect
any resolution of that dispute. The department may also agree to an
amendment to a R   ecognized Obligation Payment Schedule to
reflect a resolution of a disputed item; however, this shall not
affect a past allocation of property tax or create a liability for
any affected taxing entity. 
   (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. 
   (n) An oversight board may direct a successor agency to provide
additional legal or financial advice than what was given by agency
staff.  
   (o) An oversight board is authorized to contract with the county
or other public or private agencies for administrative support. 

   (p) On matters within the purview of the oversight board,
decisions made by the oversight board supersede those made by the
successor agency or the staff of the successor agency. 
   SEC. 17.    Section 34179.5 is added to the 
 Health and Safety Code   , to read:  
   34179.5.  (a) In furtherance of subdivision (d) of Section 34177,
each successor agency shall employ a licensed accountant, approved by
the county auditor-controller and with experience and expertise in
local government accounting, to conduct a due diligence review to
determine the unobligated balances available for transfer to taxing
entities. As an alternative, an audit provided by the county
auditor-controller that provides the information required by this
section may be used to comply with this section with the concurrence
of the oversight board.
   (b) For purposes of this section the following terms shall have
the following meanings:
   (1) "Cash" and "cash equivalents" includes, but is not limited to,
cash in hand, bank deposits, Local Agency Investment Fund deposits,
deposits in the city or county treasury or any other pool, marketable
securities, commercial paper, United States Treasury bills, banker's
acceptances, payables on demand and amounts due from other parties
as defined in subdivision (c), and any other money owned by the
successor agency.
   (2) "Enforceable obligation" includes any of the items listed in
subdivision (d) of Section 34171, contracts detailing specific work
to be performed that were entered into by the former redevelopment
agency prior to June 28, 2011, with a third party that is other than
the city, county, or city and county that created the former
redevelopment agency, and indebtedness obligations as defined in
subdivision (e) of Section 34171.
   (3) "Transferred" means the transmission of money to another party
that is not in payment for goods or services or an investment or
where the payment is de minimus. Transfer also means where the
payments are ultimately merely a restriction on the use of the money.

   (c) At a minimum, the review required by this section shall
include the following:
   (1) The dollar value of assets transferred from the former
redevelopment agency to the successor agency on or about February 1,
2012.
   (2) The dollar value of assets and cash and cash equivalents
transferred after January 1, 2011, through June 30, 2012, by the
redevelopment agency or the successor agency to the city, county, or
city and county that formed the redevelopment agency and the purpose
of each transfer. The review shall provide documentation of any
enforceable obligation that required the transfer.
   (3) The dollar value of any cash or cash equivalents transferred
after January 1, 2011, through June 30, 2012, by the redevelopment
agency or the successor agency to any other public agency or private
party and the purpose of each transfer. The review shall provide
documentation of any enforceable obligation that required the
transfer.
   (4) The review shall provide expenditure and revenue accounting
information and identify transfers and funding sources for the
2010-11 and 2011-12 fiscal years that reconciles balances, assets,
and liabilities of the successor agency on June 30, 2012 to those
reported to the Controller for the 2009-10 fiscal year.
   (5) A separate accounting for the balance for the Low and Moderate
Income Housing Fund for all other funds and accounts combined shall
be made as follows:
   (A) A statement of the total value of each fund as of June 30,
2012.
   (B) An itemized statement listing any amounts that are legally
restricted as to purpose and cannot be provided to taxing entities.
This could include the proceeds of any bonds, grant funds, or funds
provided by other governmental entities that place conditions on
their use.
   (C) An itemized statement of the values of any assets that are not
cash or cash equivalents. This may include physical assets, land,
records, and equipment. For the purpose of this accounting, physical
assets may be valued at purchase cost or at any recently estimated
market value. The statement shall list separately housing-related
assets.
   (D) An itemized listing of any current balances that are legally
or contractually dedicated or restricted for the funding of an
enforceable obligation that identifies the nature of the dedication
or restriction and the specific enforceable obligation. In addition,
the successor agency shall provide a listing of all approved
enforceable obligations that includes a projection of annual spending
requirements to satisfy each obligation and a projection of annual
revenues available to fund those requirements. If a review finds that
future revenues together with dedicated or restricted balances are
insufficient to fund future obligations and thus retention of current
balances is required, it shall identify the amount of current
balances necessary for retention. The review shall also detail the
projected property tax revenues and other general purpose revenues to
be received by the successor agency, together with both the amount
and timing of the bond debt service payments of the successor agency,
for the period in which the oversight board anticipates the
successor agency will have insufficient property tax revenue to pay
the specified obligations.
   (E) An itemized list and analysis of any amounts of current
balances that are needed to satisfy obligations that will be placed
on the Recognized Obligation Payment Schedules for the current fiscal
year.
   (6) The review shall total the net balances available after
deducting the total amounts described in subparagraphs (B) to (E),
inclusive, of paragraph (5). The review shall add any amounts that
were transferred as identified in paragraphs (2) and (3) of
subdivision (c) if an enforceable obligation to make that transfer
did not exist. The resulting sum shall be available for allocation to
affected taxing entities pursuant to Section 34179.6. It shall be a
rebuttable presumption that cash and cash equivalent balances
available to the successor agency are available and sufficient to
disburse the amount determined in this paragraph to taxing entities.
If the review finds that there are insufficient cash balances to
transfer or that cash or cash equivalents are specifically obligated
to the purposes described in subparagraphs (B), (D), and (E) of
paragraph (5) in such amounts that there is insufficient cash to
provide the full amount determined pursuant to this paragraph, that
amount shall be demonstrated in an additional itemized schedule.

   SEC. 18.    Section 34179.6 is added to the 
 Health and Safety Code   , to read:  
   34179.6.  The review required pursuant to Section 34179.5 shall be
submitted to the oversight board for review. The successor agency
shall submit a copy of the Recognized Obligation Payment Schedule to
the county administrative officer, the county auditor-controller, and
the Department of Finance at the same time that the successor agency
submits the review to the oversight board for review.
   (a) By October 1, 2012, each successor agency shall provide to the
oversight board, the county auditor-controller, the Controller, and
the Department of Finance the results of the review conducted
pursuant to Section 34179.5 for the Low and Moderate Income Housing
Fund and specifically the amount of cash and cash equivalents
determined to be available for allocation to taxing entities. By
December 15, 2012, each successor agency shall provide to the
oversight board, the county auditor-controller, the Controller, and
the department the results of the review conducted pursuant to
Section 34179.5 for all of the other fund and account balances and
specifically the amount of cash and cash equivalents determined to be
available for allocation to taxing entities. The department may
request any supporting documentation and review results to assist in
its review under subdivision (d). The department may specify the form
and manner information about the review shall be provided to it.
   (b) Upon receipt of the review, the oversight board shall convene
a public comment session to take place at least five business days
before the oversight board holds the approval vote specified in
subdivision (c). The oversight board also shall consider any opinions
offered by the county auditor-controller on the review results
submitted by the successor agencies.
   (c) By October 15, 2012, for the Low and Moderate Income Housing
Fund and by January 15, 2013, for all other funds and
                                    accounts, the oversight board
shall review, approve, and transmit to the department and the county
auditor-controller the determination of the amount of cash and cash
equivalents that are available for disbursement to taxing entities as
determined according to the method provided in Section 34179.5. The
oversight board may adjust any amount provided in the review to
reflect additional information and analysis. The review and approval
shall occur in public sessions. The oversight board may request from
the successor agency any materials it deems necessary to assist in
its review and approval of the determination. The oversight board
shall be empowered to authorize a successor agency to retain assets
or funds identified in subparagraphs (B) to (E), inclusive, of
paragraph (5) of subdivision (c) of Section 34179.5. An oversight
board that makes that authorization also shall identify to the
department the amount of funds authorized for retention, the source
of those funds, and the purposes for which those funds are being
retained. The determination and authorization to retain funds and
assets shall be subject to the review and approval of the department
pursuant to subdivision (d).
   (d) The department may adjust any amount associated with the
determination of the resulting amount described in paragraph (6) of
subdivision (c) of Section 34179.5 based on its analysis and
information provided by the successor agency and others. The
department shall consider any findings or opinions of the county
auditor-controllers and the Controller. The department shall complete
its review of the determinations provided pursuant to subdivision
(c) no later than November 9, 2012, for the Low and Moderate Income
Housing Fund and also shall notify the oversight board and the
successor agency of its decision to overturn any decision of the
oversight board to authorize a successor agency to retain assets or
funds made pursuant to subdivision (c). The department shall complete
its review of the determinations provided pursuant to subdivision
(c) no later than April 1, 2013, for the other funds and accounts and
also shall notify the oversight board and the successor agency of
its decision to overturn any oversight board authorizations made
pursuant to subdivision (c). The department shall provide the
oversight board and the successor agency an explanation of its basis
for overturning or modifying any findings, determinations, or
authorizations of the oversight board made pursuant to subdivision
(c).
   (e) The successor agency and the entity or entities that created
the former redevelopment agency may request to meet and confer with
the department to resolve any disputes regarding the amounts or
sources of funds identified as determined by the department. The
request shall be made within five business days of the transmission,
and no later than November 16, 2012, for the determination regarding
the Low and Moderate Income Housing Fund, to the successor agency or
the designated local authority of the department's determination,
decisions, and explanations and shall be accompanied by an
explanation and documentation of the basis of the dispute. The
department shall meet and confer with the requesting party and modify
its determinations and decisions accordingly. The department shall
either confirm or modify its determinations and decisions within 30
days of the request to meet and confer.
   (f)  Each successor agency shall transmit to the county
auditor-controller the amount of funds required pursuant to the
determination of the department within five working days of receipt
of the notification under subdivision (c) or (e) if a meet and confer
request is made. Successor agencies shall make diligent efforts to
recover any money determined to have been transferred without an
enforceable obligation as described in paragraphs (2) and (3) of
subdivision (c) of Section 34179.5. The department shall notify the
county auditor-controllers of its actions and the county
auditor-controllers shall disburse the funds received from successor
agencies to taxing entities pursuant to Section 34188 within five
working days of receipt. Amounts received after November 28, 2012,
and April 10, 2013, may be held and disbursed with the regular
payments to taxing entities pursuant to Section 34183.
   (g) By December 1, 2012, the county auditor-controller shall
provide the department a report specifying the amount submitted by
each successor agency pursuant to subdivision (d) for low- and
moderate-income housing funds, and specifically noting those
successor agencies that failed to remit the full required amount. By
April 20, 2013, the county auditor-controller shall provide the
department a report detailing the amount submitted by each successor
agency pursuant to subdivision (d) for all other funds and accounts,
and specifically noting those successor agencies that failed to remit
the full required amount.
   (h) If a successor agency fails to remit to the county
auditor-controller the sums identified in subdivisions (d) and (f),
by the deadlines specified in those subdivisions, the following
remedies are available:
   (1) (A) If the successor agency cannot promptly recover the funds
that have been transferred to another public agency without an
enforceable obligation as described in paragraphs (2) and (3) of
subdivision (c) of Section 34179.5, the funds may be recovered
through an offset of sales and use tax or property tax allocations to
the local agency to which the funds were transferred. To recover
such funds, the Department of Finance may order the State Board of
Equalization to make an offset pursuant to subdivision (a) of Section
34179.8. If the Department of Finance does not order a sales tax
offset, the county auditor-controller may reduce the property tax
allocations to any local agency in the county that fails to repay
funds pursuant to subdivision (c) of Section 34179.8.
   (B) The county auditor-controller and the department shall each
have the authority to demand the return of funds improperly spent or
transferred to a private person or other private entity. If funds are
not repaid within 60 days, they may be recovered through any lawful
means of collection and are subject to a ten percent penalty plus
interest at the rate charged for late personal income tax payments
from the date the improper payment was made to the date the money is
repaid.
   (C) If the city, county, or city and county that created the
former redevelopment agency is also performing the duties of the
successor agency, the Department of Finance may order an offset to
the distribution provided to the sales and use tax revenue to that
agency pursuant to subdivision (a) of Section 34179.8. This offset
shall be equal to the amount the successor fails to remit pursuant to
subdivision (f). If the Department of Finance does not order a sales
tax offset, the county auditor-controller may reduce the property
tax allocations of the city, county, or city and county that created
the former redevelopment agency pursuant to subdivision (c) of
Section 34179.8.
   (D) The department and the county auditor-controller shall
coordinate their actions undertaken pursuant to this paragraph.
   (2) Alternatively or in addition to the remedies provided in
paragraph (1), the department may direct the county
auditor-controller to deduct the unpaid amount from future
allocations of property tax to the successor agency under Section
34183 until the amount of payment required pursuant to subdivision
(d) is accomplished.
   (3) If the Department of Finance determines that payment of the
full amount required under subdivision (d) is not currently feasible
or would jeopardize the ability of the successor agency to pay
enforceable obligations in a timely manner, it may agree to an
installment payment plan.
   (i) (1) If a legal action contesting a withholding effectuated by
the State Board of Equalization pursuant to subparagraphs (B), (C),
or (B) and (C) of paragraph (2) of subdivision (b) of Section 34183.5
is successful and results in a final judicial determination, the
court shall order the state to pay to the prevailing party a penalty
equal to a percentage of the amount of funds found by the court to be
improperly withheld, as provided in Section 34179.8. This percentage
shall be equivalent to the number of months the funds have been
found by the court to be improperly withheld, not to exceed 10
percent.
   (2) If a legal action contesting an offset effectuated by the
State Board of Equalization or the county auditor-controller pursuant
to subdivision (h) is successful and results in a final judicial
determination, the court shall order the state or the county
auditor-controller to pay to the prevailing party a penalty equal to
10 percent of the amount of funds found by the court to be improperly
offset, as provided in Section 34179.8.
   (j) If a legal challenge to invalidate any provision in
subdivision (h) or subparagraph (B) or (C), or subparagraphs (B) and
(C) of paragraph (2) of subdivision (b) of Section 34183.5 is
successful and results in a final judicial determination, the
invalidated provision shall become inoperative and subdivision (i)
shall become inoperative with respect to the invalidated provision.

   SEC. 19.    Section 34179.7 is added to the 
 Health and Safety Code   , to read:  
   34179.7.  Upon full payment of the amounts determined in
subdivision (d) or (e) of Section 34179.6 as reported by the county
auditor-controller pursuant to subdivision (g) of Section 34179.6 and
of any amounts due as determined by Section 34183.5, or upon a final
judicial determination of the amounts due and confirmation that
those amounts have been paid by the county auditor-controller, the
department shall issue, within five business days, a finding of
completion of the requirements of Section 34179.6 to the successor
agency. 
   SEC. 20.    Section 34179.8 is added to the 
 Health and Safety Code   , to read:  
   34179.8.  (a) If an offset or withholding of sales and use tax is
ordered by the Department of Finance pursuant to this part, the State
Board of Equalization shall reduce the distribution of sales and use
taxes collected under Chapter 1 (commencing with Section 7200) of
Part 1.5 of Division 2 of the Revenue and Taxation Code to the entity
that is the subject of the offset or withholding and shall direct
the Controller to issue a warrant in the amount of any offset
pursuant to subdivision (h) of Section 34179.6 to the county
auditor-controller. The county auditor-controller shall distribute
this amount to the taxing entities for the former redevelopment area
according to Section 34188.
   (b) (1) If a court has issued a final judicial determination or
the department determines that some or all of the amount collected
through the offset of sales and use tax has been paid by another
means and no additional amount is owed, the court or the department
shall notify the State Board of Equalization of that determination.
Upon notification, the State Board of Equalization shall reverse the
relevant amount of sales and use tax offset, add any penalty payable
under subdivision (i) of Section 34179.6, and adjust the next
distribution of sales and use tax to the affected local entity by
reducing the allocation of tax to the General Fund and increasing the
distribution to the local entity by that sum.
   (2) The board shall inform the Controller of the reversal of the
offset of sales and use tax undertaken pursuant to paragraph (1). The
Controller shall send a demand for payment to the county
auditor-controller for the amount of the offset reversal, excluding
any penalty amount determined by the court pursuant to subdivision
(i) of Section 34179.6 to be applicable to the offset. The
auditor-controller shall reduce allocations to taxing entities in the
next distributions under Section 34188 until the amount of the
reversed offset is recovered and shall pay such recovered amounts to
the State Controller for deposit in the General Fund.
   (c) (1) If an offset of property tax is ordered by the county
auditor-controller pursuant to this part, the auditor-controller
shall reduce the distribution of property taxes to the entity that is
the subject of the offset and shall distribute the amount to the
taxing entities for the former redevelopment area according to
Section 34188.
   (2) If a court has issued a final judicial determination or the
department determines that some or all of the amount collected
through the offset made pursuant to paragraph (1) has been paid by
another means and no additional amount is owed, the court or the
department shall notify the county auditor-controller of that
determination. Upon notification, the county auditor-controller shall
reverse the relevant amount of property tax revenues offset in the
next distribution of property tax to the affected local entity by
reducing the allocation of tax to the taxing entities of the former
redevelopment area under Section 34188 and increasing the
distribution of property taxes to the local entity that was subject
to the offset. 
   SEC. 21.    Section 34180 of the   Health
and Safety Code   is amended to read: 
   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.  A   n oversight board shall not have the
authority to reestablish loan agreements between the successor agency
and the city, county, or city and county that formed the
redevelopment agency except as provided in Chapter 9 (commencing with
Section 34191.1).  
   (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.
 
   (b) The issuance of bonds or other indebtedness or the pledge or
agreement for the pledge of property tax revenues (formerly tax
increment prior to the effective date of this part) pursuant to
subdivision (a) of Section 34177.5. 
   (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   if that  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
  an independent appraiser approved by the oversight
board  .
   (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.  An oversight board
shall not have the   authority to reestablish loan
agreements between the successor agency and the city, county, or city
and county that formed the redevelopment agency except as provided
in Chapter 9 (commencing with Section 34191.1). Any actions to
reestablish any other agreements that are in furtherance of
enforceable obligations, with the city, county, or city and county
that formed the redevelopment agency are invalid until they are
included in an approved and valid Recognized Obligation Payment
Schedule. 
   (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.
   (j) Any document submitted by a successor agency to an oversight
board for approval by any provision of this part shall also be
submitted to the county administrative officer, the county
auditor-controller, and the Department of Finance at the same time
that the successor agency submits the document to the oversight
board.
   SEC. 22.    Section 34181 of the   Health
and Safety Code   is amended to read: 
   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,  police  and fire stations,  libraries, and
local agency   administrative buildings, 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.  Asset
disposition may be accomplished by a distribution of income to taxing
entities proportionate to their property tax share from one or more
properties that may be transferred to a public or private agency for
management pursuant to the direction of the oversight board. 
   (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
  assets  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   those 
agreements  where   if  it finds that
amendments or early termination would be in the best interests of the
taxing entities. 
   (f) All actions taken pursuant to subdivisions (a) and (c) shall
be approved by resolution of the oversight board at a public meeting
after at least 10 days' notice to the public of the specific proposed
actions. The actions shall be subject to review by the Department of
Finance pursuant to Section 34179 except that the department may
extend its review period by up to 60 days. If the department does not
object to an action subject to this section, and if no action
challenging an action is commenced within 60 days of the approval of
the action by the oversight board, the action of the oversight board
shall be considered final and can be relied upon as conclusive by any
person. If an action is brought to challenge an action involving
title to or an interest in real property, a notice of pendency of
action shall be recorded by the claimant as provided in Title 4.5
(commencing with Section 405) of Part 2 of the Code of Civil
Procedure within a 60-day period. 
   SEC. 23.    Section 34182 of the   Health
and Safety Code   is amended to read: 
   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  July   October  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   entities  ,
and to document and determine both the amount and the terms of any
indebtedness incurred by the redevelopment agency  and
certify   pursuant to  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  July 15   October 5  , 2012, the
county auditor-controller shall provide the Controller's office 
and the Department of Finance  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   entities  , 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 
of property tax  to be allocated and distributed  ,
  and the amounts of passthrough payments to be made in
the upcoming six   -month period,  and provide those
estimates to both the entities receiving the distributions and the
Department of Finance, no later than  November  
October  1 and  May   April  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 
 the  county  auditor-controller  
auditor-controller's  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   the  modified county 
auditor-controller   auditor-controller's  action
shall not become effective until approved by the Controller.
   SEC. 24.    Section 34182.5 is added to the 
 Health and Safety Code   , to read:  
   34182.5.  A county auditor-controller may review the Recognized
Obligation Payment Schedules and object to the inclusion of any items
that are not demonstrated to be enforceable obligations and may
object to the funding source proposed for any items. This review may
take place prior to the submission of the Recognized Obligation
Payment Schedule to the oversight board or subsequent to oversight
board action. The county auditor-controller shall promptly transmit
notice of any of those objections to the successor agency, the
oversight board, and the Department of Finance. Notice shall be given
at least 60 days prior to an allocation date specified in Section
34183, except that for the January 1, 2013 to June 30, 2013
Recognized Obligation Payment Schedule, notice shall be given no
later than October 1, 2012. If an oversight board disputes the
finding of the county auditor-controller, it may refer the matter to
the Department of Finance for a determination of what will be
approved for inclusion in the Recognized Obligation Payment Schedule.

   SEC. 25.    Section 34183 of the   Health
and Safety Code   is amended to read: 
   34183.  (a) Notwithstanding any other law, from February 1, 2012,
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 
 entity  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 May 16, 2012, and no later than
June 1, 2012, and each January  16   2  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   entity 
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   entity
 .  The amount of passthrough payments computed pursuant to
this section, including any passthrough agreements, shall be computed
as though the requirement to set aside funds for the Low and
Moderate Income Housing Fund was still in effect. 
   (2) Second, on  May 16, 2012, and  June 1, 2012,
and each January  16   2 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   and
 July 1, 2012, and each January  16   2
 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   if  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  May 16, 2012, and  June 1, 2012,
and each January  16   2  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  May 16, 2012, and  June 1, 2012,
and each January  16   2  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 April 1, 2012,
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  ,   or as expressly provided in a
passthrough agreement entered into pursuant to Section 33401, 
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  to the Redevelopment Property Tax Trust Fund of the
successor agency for the purpose of paying an item approved on the
Recognized Obligation Payment Schedule at the request of the
Department of Finance  that are necessary to ensure prompt
payments of redevelopment agency debts.  An enforceable
obligation is created for repayment of those loans. 
   (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   entities 
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. 
   (e) Within 10 days of each distribution of property tax, the
county auditor-controller shall provide a report to the department
regarding the distribution for each successor agency that includes
information on the total available for allocation, the passthrough
amounts and how they were calculated, the amounts distributed to
successor agencies, and the amounts distributed to taxing entities in
a manner and form specified by the department. This reporting
requirement shall also apply to distributions required under
subdivision (b) of Section 34183.5. 
   SEC. 26.    Section 34183.5 is added to the 
 Health and Safety Code   , to read:  
   34183.5.  (a) The Legislature hereby finds and declares that due
to the delayed implementation of this part due to the California
Supreme Court's ruling in the case California Redevelopment
Association v. Matosantos et al. (2011) 53 Cal.4th 231, some
disruption to the intended application of this part and other law
with respect to passthrough payments may have occurred.
   (1) If a redevelopment agency or successor agency did not pay any
portion of an amount owed for the 2011-12 fiscal year to an affected
taxing entity pursuant to Section 33401, 33492.140, 33607, 33607.5,
33607.7, or 33676, or pursuant to any passthrough agreement entered
into before January 1, 1994, between a redevelopment agency and an
affected taxing entity, and to the extent the county
auditor-controller did not remit the amounts owed for passthrough
payments during the 2011-12 fiscal year, the county
auditor-controller shall make the required payments to the taxing
entities owed passthrough payments and shall reduce the amounts to
which the successor agency would otherwise be entitled pursuant to
paragraph (2) of subdivision (a) of Section 34183 at the next
allocation of property tax under this part, subject to the provisions
of subdivision (b) of Section 34183. If the amount of available
property tax allocation to the successor agency is not sufficient to
make the required payment, the county auditor-controller shall
continue to reduce allocations to the successor agency under
paragraph (2) of subdivision (a) of Section 34183 until the time that
the owed amount is fully paid. Alternately, the county
auditor-controller may accept payment from the successor agency's
reserve funds for payments of passthrough payments owed as defined in
this subdivision.
   (2) If a redevelopment agency did not pay any portion of the
amount owed for the 2011-12 fiscal year to an affected taxing entity
pursuant to Section 33401, 33492.140, 33607, 33607.5, 33607.7, or
33676, or pursuant to any passthrough agreement entered into before
January 1, 1994, between a redevelopment agency and an affected
taxing entity, but the county auditor-controller did pay the
difference that was owing, the auditor controller shall deduct from
the next allocation of property tax to the successor agency under
paragraph (2) of subdivision (a) of Section 34183, the amount of the
payment made on behalf of the successor agency by the county
auditor-controller, not to exceed one-half the amount of passthrough
payments owed for the 2011-12 fiscal year. If the amount of available
property tax allocation to the successor agency is not sufficient to
make the required deduction, the county auditor-controller shall
continue to reduce allocations to the successor agency under
paragraph (2) of subdivision (a) of Section 34183 until the time that
the amount is fully deducted. Alternatively, the auditor-controller
may accept payment from the successor agency's reserve funds for
deductions of passthrough payments owed as defined in this
subdivision. Amounts reduced from successor agency payments under
this paragraph are available for the purposes of paragraphs (2) to
(4), inclusive, of subdivision (a) of Section 34183 for the six-month
period for which the property tax revenues are being allocated.
   (b) In recognition of the fact that county auditor-controllers
were unable to make the payments required by paragraph (4) of
subdivision (a) of Section 34183 for the period January 1, 2012,
through June 30, 2012, on January 16, 2012, due to the California
Supreme Court's ruling in the case of California Redevelopment
Association v. Matosantos (2011) 53 Cal.4th 231, in addition to
taking the actions specified in Section 34183 with respect to the
June 1 property tax allocations, county auditor-controllers should
have made allocations as provided in paragraph (1).
   (1) From the allocations made on June 1, 2012, for the Recognized
Obligation Payment Schedule covering the period July 1, 2012, through
December 31, 2012, deduct from the amount that otherwise would be
deposited in the Redevelopment Property Tax Trust Fund on behalf of
the successor agency an amount equivalent to the amount that each
affected taxing entity was entitled to pursuant to paragraph (4) of
subdivision (a) of Section 34183 for the period January 1, 2012,
through June 30, 2012. The amount to be retained by taxing entities
pursuant to paragraph (4) of subdivision (a) of Section 34183 for the
January 1, 2012, through June 30, 2012, period is determined based
on the Recognized Obligation Payment Schedule approved by the
Department of Finance pursuant to subdivision (h) of Section 34179
and any amount determined to be owed pursuant to subdivision (b). Any
amounts so computed shall not be offset by any shortages in funding
for recognized obligations for the period covering July 1, 2012,
through December 31, 2012.
   (2) (A) If an affected taxing entity has not received the full
amount to which it was entitled pursuant to paragraph (4) of
subdivision (a) of Section 34183 of the property tax distributed for
the period January 1, 2012, through June 30, 2012, and paragraph (1),
no later than July 9, 2012, the county auditor-controller shall
determine the amount, if any, that is owed by each successor agency
to taxing entities and send a demand for payment from the funds of
the successor agency for the amount owed to taxing entities if it has
distributed the June 1, 2012, allocation to the successor agencies.
No later than July 12, 2012, successor agencies shall make payment of
the amounts demanded to the county auditor-controller for deposit
into the Redevelopment Property Tax Trust Fund and subsequent
distribution to taxing entities. No later than July 16, 2012, the
county auditor-controller shall make allocations of all money
received by that date from successor agencies in amounts owed to
taxing entities under this paragraph to taxing entities in accordance
with Section 34183. The county auditor-controller shall make
allocations of any money received after that date under this
paragraph within five business days of receipt. These duties are not
discretionary and shall be carried out with due diligence.
   (B) If a county auditor-controller fails to determine the amounts
owed to taxing entities and present a demand for payment by July 9,
2012, to the successor agencies, the Department of Finance or any
affected taxing entity may request a writ of mandate to require the
county auditor-controller to immediately perform this duty. Such
actions may be filed only in the County of Sacramento and shall have
priority over other civil matters. Any county in which the county
auditor-controller fails to perform the duties under this paragraph
shall be subject to a civil penalty of 10 percent of the amount owed
to taxing entities plus 1.5 percent of the amount owed to taxing
entities for each month that the duties are not performed. The civil
penalties shall be payable to the taxing entities under Section
34183. Additionally, any county in which the county
auditor-controller fails to make the required determinations and
demands for payment under this paragraph by July 9, 2012, or fails to
distribute the full amount of funds received from successor agencies
as required by this paragraph shall not receive the distribution of
sales and use tax scheduled for July 18, 2012, or any subsequent
payment, up to the amount owed to taxing entities, until the county
auditor-controller performs the duties required by this paragraph.
   (C) If a successor agency fails to make the payment demanded under
subparagraph (A) by July 12, 2012, the Department of Finance or any
affected taxing entity may file for a writ of mandate to require the
successor agency to immediately make this payment. Such actions may
be filed only in the County of Sacramento and shall have priority
over other civil matters. Any successor agency that fails to make
payment by July 12, 2012, under this paragraph shall be subject to a
civil penalty of 10 percent of the amount owed to taxing entities
plus one and one-half percent of the amount owed to taxing entities
for each month that the payments are not made. Additionally, the city
or county or city and county that created the redevelopment agency
shall also be subject to a civil penalty of 10 percent of the amount
owed to taxing entities plus 1.5 percent of the amount owed to taxing
entities for each month the payment is late. The civil penalties
shall be payable to the taxing entities under Section 34183. If the
Department of Finance finds that the imposition of penalties will
jeopardize the payment of enforceable obligations it may request the
court to waive some or all of the penalties. A successor agency that
does not pay the amount required under this subparagraph by July 12,
2012, shall not pay any obligations other than bond debt service
until full payment is made to the county auditor-controller.
Additionally, any city, county or city and county that created the
redevelopment agency that fails to make the required payment under
this paragraph by July 12, 2012, shall not receive the distribution
of sales and use tax scheduled for July 18, 2012, or any subsequent
payment, up to the amount owed to taxing entities, until the payment
required by this paragraph is made.
   (D) The Legislature hereby finds and declares that time is of the
essence. Funds that should have been received and were expected and
spent in anticipation of receipt by community colleges, schools,
counties, cities, and special districts have not been received
resulting in significant fiscal impact to the state and taxing
entities. Continued delay and uncertainly whether funds will be
received warrants the availability of extraordinary relief as
authorized herein.
   (3) If an affected taxing entity has not received the full amount
to which it was entitled pursuant to paragraph (4) of subdivision (a)
of Section 34183 for the period January 1, 2012, through June 30,
2012, and paragraph (1), the county auditor-controller shall reapply
the provisions of paragraph (1) to each subsequent property tax
allocation until such time as the affected taxing entity has received
the full amount to which it was entitled pursuant to paragraph (4)
of subdivision (a) of Section 34183 for the period January 1, 2012,
through June 30, 2012. 
   SEC. 27.    Section 34185 of the   Health
and Safety Code   is amended to read: 
   34185.  Commencing on  May 16, 2012   June 1,
2012  , and on each January  16   2 
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  
subdivision (l) of Section 34177 and Section  34183.
   SEC. 28.    Section 34186 of the   Health
and Safety Code   is amended to read: 
   34186.   (a)    Differences between actual
payments and past estimated obligations on recognized obligation
payment schedules  must   shall  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. 
   (b) Differences between actual passthrough obligations and
property tax amounts and the amounts used by the county
auditor-controller in determining the amounts to be allocated under
Sections 34183 and 34188 for a prior six-month period shall be
applied as adjustments to the property tax and passthrough amounts in
subsequent periods as they become known. County auditor-controllers
shall not delay payments under this part to successor agencies or
taxing entities based on pending transactions, disputes, or for any
other reason, other than a court order, and shall use the Recognized
Obligation Payment Schedule approved by the Department of Finance and
the most current data for passthroughs and property tax available
prior to the statutory distribution dates to make the allocations
required on the dates required. 
   SEC. 29.    Section 34187 of the   Health
and Safety Code   is amended to read: 
   34187.   (a)     (1)   
Commencing May 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. 
   (2) Notwithstanding paragraph (1), the Department of Finance may
authorize a successor agency to retain property tax that otherwise
would be distributed to affected taxing entities pursuant to this
subdivision, to the extent the department determines the successor
agency requires those funds for the payment of enforceable
obligations. Upon making a determination, the department shall
provide the county auditor-controller with information detailing the
amounts that it has authorized the successor agency to retain. Upon
determining the successor agency no longer requires additional funds
pursuant to this subdivision, the department shall notify the
successor agency and the county auditor-controller. The county
auditor-controller shall then distribute the funds in question to the
affected taxing entities in accordance with the provisions of the
Revenue and Taxation Code.  
   (b) When all of the debt of a redevelopment agency has been
retired or paid off, the successor agency shall dispose of all
remaining assets and terminate its existence within one year of the
final debt payment. When the successor agency is terminated, all
passthrough payment obligations shall cease and no property tax shall
be allocated to the Redevelopment
                Property Tax Trust Fund for that agency. 
   SEC. 30.    Section 34188 of the   Health
and Safety Code   is amended to read: 
   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. 
   (d) This section shall not be construed to increase any
allocations of excess, additional, or remaining funds that would
otherwise have been allocated to cities, counties, cities and
counties, or special districts pursuant to clause (i) of subparagraph
(B) of paragraph (4) of subdivision (d) of Section 97.2, clause (i)
of subparagraph (B) of paragraph (4) of subdivision (d) of Section
97.3, or Article 4 (commencing with Section 98) of Chapter 6 of Part
0.5 of Division 1, of the Revenue and Taxation Code, had this section
not been enacted. 
   SEC. 31.    Section 34189 of the   Health
and Safety Code   is amended to read: 
   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) 
    (b)  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) 
    (c)  It is intended that the provisions of this part
shall be read in a manner as to avoid duplication of payments.
   SEC. 32.    Section 34189.1 is added to the 
 Health and Safety Code   , to read:  
   34189.1.  No party, public or private, may pursue, nor does a
court have jurisdiction over, a validation action with respect to any
action of a redevelopment agency or a successor agency to a
redevelopment agency that took place on or after January 1, 2011,
unless the Department of Finance and the Controller, representing
interests of the State of California and each of the taxing entities
who could be affected financially by the action, has been properly
noticed. All actions shall be filed in the County of Sacramento.

   SEC. 33.    Section 34189.2 is added to the 
 Health and Safety Code   , to read:  
   34189.2.  A successor agency or any party to an enforceable
obligation as defined under this part shall properly notice the state
with respect to a validation action involving any enforceable
obligation or matter of title to an asset that belonged to a
redevelopment agency. For such an action to be properly filed, both
the Controller and the Director of Finance shall be noticed and
actions shall be filed in the County of Sacramento. 
   SEC. 34.    Section 34189.3 is added to the 
 Health and Safety Code   , to read:  
   34189.3.  An action contesting any act taken or determinations or
decisions made pursuant to this part or Part 1.8 (commencing with
Section 34161) may be brought in superior court and shall be filed in
the County of Sacramento. 
   SEC. 35.    Chapter 9 (commencing with Section
34191.1) is added to Part 1.85 of Division 24 of the  
Health and Safety Code  , to read:  
      CHAPTER 9.  POSTCOMPLIANCE PROVISIONS


   34191.1.  The provisions of this chapter shall apply to a
successor agency upon that agency's receipt of a finding of
completion by the Department of Finance pursuant to Section 34179.7.
   34191.3.  Notwithstanding Section 34191.1, the requirements
specified in subdivision (e) of Section 34177 and subdivision (a) of
Section 34181 shall be suspended, except as those provisions apply to
the transfers for governmental use, until the Department of Finance
has approved a long-range property management plan pursuant to
subdivision (b) of Section 34191.5, at which point the plan shall
govern, and supersede all other provisions relating to, the
disposition and use of the real property assets of the former
redevelopment agency. If the department has not approved a plan by
January 1, 2015, subdivision (e) of Section 34177 and subdivision (a)
of Section 34181 shall be operative with respect to that successor
agency.
   34191.4.  The following provisions shall apply to any successor
agency that has been issued a finding of completion by the Department
of Finance:
   (a) All real property and interests in real property identified in
subparagraph (C) of paragraph (5) of subdivision (c) of Section
34179.5 shall be transferred to the Community Redevelopment Property
Trust Fund of the successor agency upon approval by the Department of
Finance of the long-range property management plan submitted by the
successor agency pursuant to subdivision (b) of Section 34191.7
unless that property is subject to the requirements of any existing
enforceable obligation.
   (b) (1) Notwithstanding subdivision (d) of Section 34171, upon
application by the successor agency and approval by the oversight
board, loan agreements entered into between the redevelopment agency
and the city, county, or city and county that created by the
redevelopment agency shall be deemed to be enforceable obligations
provided that the oversight board makes a finding that the loan was
for legitimate redevelopment purposes.
   (2) If the oversight board finds that the loan is an enforceable
obligation, the accumulated interest on the remaining principal
amount of the loan shall be recalculated from origination at the
interest rate earned by funds deposited into the Local Agency
Investment Fund. The loan shall be repaid to the city, county, or
city and county in accordance with a defined schedule over a
reasonable term of years at an interest rate not to exceed the
interest rate earned by funds deposited into the Local Agency
Investment Fund. The annual loan repayments provided for in the
recognized obligations payment schedules shall be subject to all of
the following limitations:
   (A) Loan repayments shall not be made prior to the 2013-14 fiscal
year. Beginning in the 2013-14 fiscal year, the maximum repayment
amount authorized each fiscal year for repayments made pursuant to
this subdivision and paragraph (7) of subdivision (e) of Section
34176 combined shall be equal to one-half of the increase between the
amount distributed to the taxing entities pursuant to paragraph (4)
of subdivision (a) of Section 34183 in that fiscal year and the
amount distributed to taxing entities pursuant to that paragraph in
the 2012-13 base year. Loan or deferral repayments made pursuant to
this subdivision shall be second in priority to amounts to be repaid
pursuant to paragraph (7) of subdivision (e) of Section 34176.
   (B) Repayments received by the city, county or city and county
that formed the redevelopment agency shall first be used to retire
any outstanding amounts borrowed and owed to the Low and Moderate
Income Housing Fund of the former redevelopment agency for purposes
of the Supplemental Educational Revenue Augmentation Fund and shall
be distributed to the Low and Moderate Income Housing Asset Fund
established by subdivision (d) of Section 34176.
   (C) Twenty percent of any loan repayment shall be deducted from
the loan repayment amount and shall be transferred to the Low and
Moderate Income Housing Asset Fund, after all outstanding loans from
the Low and Moderate Income Housing Fund for purposes of the
Supplemental Educational Revenue Augmentation Fund have been paid.
   (c) (1) Bond proceeds derived from bonds issued on or before
December 31, 2010, shall be used for the purposes for which the bonds
were sold.
   (2) (A) Notwithstanding Section 34177.3 or any other conflicting
provision of law, bond proceeds in excess of the amounts needed to
satisfy approved enforceable obligations shall thereafter be expended
in a manner consistent with the original bond covenants. Enforceable
obligations may be satisfied by the creation of reserves for
projects that are the subject of the enforceable obligation and that
are consistent with the contractual obligations for those projects,
or by expending funds to complete the projects. An expenditure made
pursuant to this paragraph shall constitute the creation of excess
bond proceeds obligations to be paid from the excess proceeds. Excess
bond proceeds obligations shall be listed separately on the
Recognized Obligation Payment Schedule submitted by the successor
agency.
   (B) If remaining bond proceeds cannot be spent in a manner
consistent with the bond covenants pursuant to subparagraph (A), the
proceeds shall be used to defease the bonds or to purchase those same
outstanding bonds on the open market for cancellation.
   34191.5.  (a) There is hereby established a Community
Redevelopment Property Trust Fund, administered by the successor
agency, to serve as the repository of the former redevelopment agency'
s real properties identified in subparagraph (C) of paragraph (5) of
subdivision (c) of Section 34179.5.
   (b) The successor agency shall prepare a long-range property
management plan that addresses the disposition and use of the real
properties of the former redevelopment agency. The report shall be
submitted to the oversight board and the Department of Finance for
approval no later than six months following the issuance to the
successor agency of the finding of completion.
   (c) The long-range property management plan shall do all of the
following:
   (1) Include an inventory of all properties in the trust. The
inventory shall consist of all of the following information:
   (A) The date of the acquisition of the property and the value of
the property at that time, and an estimate of the current value of
the property.
   (B) The purpose for which the property was acquired.
   (C) Parcel data, including address, lot size, and current zoning
in the former agency redevelopment plan or specific, community, or
general plan.
   (D) An estimate of the current value of the parcel including, if
available, any appraisal information.
   (E) An estimate of any lease, rental, or any other revenues
generated by the property, and a description of the contractual
requirements for the disposition of those funds.
   (F) The history of environmental contamination, including
designation as a brownfield site, any related environmental studies,
and history of any remediation efforts.
   (G) A description of the property's potential for transit-oriented
development and the advancement of the planning objectives of the
successor agency.
   (H) A brief history of previous development proposals and
activity, including the rental or lease of property.
   (2) Address the use or disposition of all of the properties in the
trust. Permissible uses include the retention of the property for
governmental use pursuant to subdivision (a) of Section 34181, the
retention of the property for future development, the sale of the
property, or the use of the property to fulfill an enforceable
obligation. The plan shall separately identify and list properties in
the trust dedicated to governmental use purposes and properties
retained for purposes of fulfilling an enforceable obligation. With
respect to the use or disposition of all other properties, all of the
following shall apply:
   (A) If the plan directs the use or liquidation of the property for
a project identified in an approved redevelopment plan, the property
shall transfer to the city, county, or city and county.
   (B) If the plan directs the liquidation of the property or the use
of revenues generated from the property, such as lease or parking
revenues, for any purpose other than to fulfill an enforceable
obligation or other than that specified in subparagraph (A), the
proceeds from the sale shall be distributed as property tax to the
taxing entities.
   (C) Property shall not be transferred to a successor agency, city,
county, or city and county, unless the long-range property
management plan has been approved by the oversight board and the
Department of Finance. 
   SEC. 36.    The Legislature finds and declares as
follows:  
   (a) Certain provisions of Assembly Bill 26 of the 2011-12 First
Extraordinary Session of 2011 (Ch. 5, 2011-12 First Ex. Sess.) are
internally inconsistent, or uncertain in their meaning, with regard
to the calculation of the amount to be paid by a county
auditor-controller from the Redevelopment Property Tax Trust Fund to
meet passthrough payment obligations to local agencies and school
entities.  
   (b) Consistent with the statement in Section 34183 of the Health
and Safety Code, as added by the measure identified in subdivision
(a), that the provisions of that section are to apply
"n]otwithstanding any other law," it was the intent of the
Legislature in enacting that measure that the amount of the
passthrough payments that are addressed by that section be determined
in the manner specified by paragraph (1) of subdivision (a) of
Section 34183 of the Health and Safety Code, and that the amount so
calculated not be reduced or adjusted pursuant to the operation of
any other provision of that measure. 
   SEC. 37.    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. 
   SEC. 38.    There is hereby appropriated up to
twenty-two million dollars ($22,000,000) from the General Fund, for
allocation to departments by the Director of Finance in furtherance
of the objectives of this act. Up to two million dollars ($2,000,000)
of this amount may be allocated to the Director of the Trial Court
Trust Fund for allocation by the Administrative Office of the Courts
to the Superior Court of California, County of Sacramento for work
associated with Part 1.85 (commencing with Section 34170) of Division
24 of the Health and Safety Code. An allocation of funds approved by
the Director of Finance under this item shall become effective no
sooner than 30 days after the director files written notification
thereof with the Chairperson of the Joint Legislative Budget
Committee, and the chairpersons of the fiscal committees in each
house of the Legislature, or no sooner than any lesser time the
chairperson of the joint committee, or his or her designee, may in
each instance determine. 
   SEC. 39.    No reimbursement is required by this act
pursuant to Section 6 of Article XIII B of the California
Constitution because this act provides for offsetting savings to
local agencies or school districts that result in no net costs to the
local agencies or school districts, within the meaning of Section
17556 of the Government Code. 
   SEC. 40.    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.  
  SECTION 1.    It is the intent of the Legislature
to enact statutory changes relating to the Budget Act of 2012.