BILL NUMBER: SBX1 30 INTRODUCED
BILL TEXT
INTRODUCED BY Senator Alquist
(Principal coauthors: Senators Corbett and Simitian)
(Principal coauthors: Assembly Members Beall, Campos, and Fong)
(Coauthor: Senator Blakeslee)
(Coauthor: Assembly Member Wieckowski)
SEPTEMBER 8, 2011
An act to amend Sections 34162 and 34163 of the Health and Safety
Code, relating to redevelopment, and declaring the urgency thereof,
to take efffect immediately.
LEGISLATIVE COUNSEL'S DIGEST
SB 30, as introduced, Alquist. Community redevelopment.
Existing law suspends various activities of redevelopment
agencies, including, among other things, refunding, restructuring, or
refinancing indebtedness or obligations that existed prior to
January 1, 2011, or amending or modifying existing agreements,
obligations, or commitments with any entity for any purpose. Existing
law authorizes a redevelopment agency to issue Emergency Refunding
Bonds in specified circumstances, including, among others, when it is
the only means available to the agency to avoid a default on
outstanding agency bonds. Existing law also dissolves redevelopment
agencies and community development agencies, as of October 1, 2011,
and designates successor agencies, as defined.
The bill would, notwithstanding these restrictions, authorize a
redevelopment agency, for purposes of certain bonds secured with a
credit enhancement issued by a 3rd-party credit provider, to seek an
extension of the credit enhancement or to modify or amend the terms
of existing agreements with the credit provider to avoid or delay the
incurrence of certain types of reimbursement obligations. This bill
would also authorize a redevelopment agency to issue Emergency
Refunding Bonds in specified situations relating to lines of credit
obtained from a financial institution.
The California Constitution authorizes the Governor to declare a
fiscal emergency and to call the Legislature into special session for
that purpose. Governor Schwarzenegger issued a proclamation
declaring a fiscal emergency, and calling a special session for this
purpose, on December 6, 2010. Governor Brown issued a proclamation on
January 20, 2011, declaring and reaffirming that a fiscal emergency
exists and stating that his proclamation supersedes the earlier
proclamation for purposes of that constitutional provision.
This bill would state that it addresses the fiscal emergency
declared and reaffirmed by the Governor by proclamation issued on
January 20, 2011, pursuant to the California Constitution.
This bill would declare that it is to take effect immediately as
an urgency statute.
Vote: 2/3. Appropriation: no. Fiscal committee: no. State-mandated
local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 34162 of the Health and Safety Code is amended
to read:
34162. (a) Notwithstanding Part 1 (commencing with Section
33000), Part 1.5 (commencing with Section 34000), Part 1.6
(commencing with Section 34050), and Part 1.7 (commencing with
Section 34100), or any other law, commencing on the effective date of
this act, an agency shall be unauthorized and shall not take any
action to incur indebtedness, including, but not limited to, any of
the following:
(1) Issue or sell bonds, for any purpose, regardless of the source
of repayment of the bonds. As used in this section, the term "bonds,"
includes, but is not limited to, any bonds, notes, bond anticipation
notes, interim certificates, debentures, certificates of
participation, refunding bonds, or other obligations issued by an
agency pursuant to Part 1 (commencing with Section 33000), and
Section 53583 of the Government Code, pursuant to any charter city
authority or any revenue bond law.
(2) Incur indebtedness payable from prohibited sources of
repayment, which include, but are not limited to, income and revenues
of an agency's redevelopment projects, taxes allocated to the
agency, taxes imposed by the agency pursuant to Section 7280.5 of the
Revenue and Taxation Code, assessments imposed by the agency, loan
repayments made to the agency pursuant to Section 33746, fees or
charges imposed by the agency, other revenues of the agency, and any
contributions or other financial assistance from the state or federal
government.
(3) (A) Refund, restructure, or refinance
indebtedness or obligations that existed as of January 1, 2011,
including, but not limited to, any of the following:
(A)
(i) Refund bonds previously issued by the agency or by
another political subdivision of the state, including, but not
limited to, those issued by a city, a housing authority, or a
nonprofit corporation acting on behalf of a city or a housing
authority.
(B)
(ii) Exercise the right of optional redemption of any
of its outstanding bonds or elect to purchase any of its own
outstanding bonds.
(C)
(iii) Modify or amend the terms and conditions, payment
schedules, amortization or maturity dates of any of the agency's
bonds or other obligations that are outstanding or exist as of
January 1, 2011.
(B) Notwithstanding the restrictions set forth in this paragraph,
in order to preserve the revenues and assets of an agency with
outstanding bonds that were issued prior to January 1, 2011, that are
secured with a credit enhancement issued by a third-party credit
provider prior to January 1, 2011, that agency may modify or amend
the terms of existing agreements with that credit provider if the
modification or amendment would avoid or delay the incurrence of a
reimbursement obligation of the agency owing to the credit provider
which is immediately due and payable or which is payable over a
shorter period of time than the scheduled amortization of the bonds.
(4) Take out or accept loans or advances, for any purpose, from
the state or the federal government, any other public agency, or any
private lending institution, or from any other source. For purposes
of this section, the term "loans" include, but are not limited to,
agreements with the community or any other entity for the purpose of
refinancing a redevelopment project and moneys advanced to the agency
by the community or any other entity for the expenses of
redevelopment planning, expenses for dissemination of redevelopment
information, other administrative expenses, and overhead of the
agency.
(5) Execute trust deeds or mortgages on any real or personal
property owned or acquired by it.
(6) Pledge or encumber, for any purpose, any of its revenues or
assets. As used in this part, an agency's "revenues and assets"
include, but are not limited to, agency tax revenues, redevelopment
project revenues, other agency revenues, deeds of trust and mortgages
held by the agency, rents, fees, charges, moneys, accounts
receivable, contracts rights, and other rights to payment of whatever
kind or other real or personal property. As used in this part, to
"pledge or encumber" means to make a commitment of, by the grant of a
lien on and a security interest in, an agency's revenues or assets,
whether by resolution, indenture, trust agreement, loan agreement,
lease, installment sale agreement, reimbursement agreement, mortgage,
deed of trust, pledge agreement, or similar agreement in which the
pledge is provided for or created.
(b) Any actions taken that conflict with this section are void
from the outset and shall have no force or effect.
(c) Notwithstanding subdivision (a), a redevelopment agency may
issue refunding bonds, which are referred to in this part as
Emergency Refunding Bonds, only where all of the following conditions
are met:
(1) The issuance of Emergency Refunding Bonds is the only means
available to the agency to avoid a default on outstanding agency
bonds. bonds or lines of credit obtained from
a financial institution.
(2) Both the county treasurer and the Treasurer have approved the
issuance of Emergency Refunding Bonds.
(3) Emergency Refunding Bonds are issued only to provide funds for
any single debt service payment that is due prior to October 1,
2011, and that is more than 20 percent larger than a level debt
service payment would be for that bond. bond,
or, in the case of a line of credit obtained from a financial
institution, for which the line of credit expires prior to October 1,
2011, and payment is due.
(4) The principal amount of outstanding agency bonds is not
increased. increased, except if Emergency
Refunding Bonds are issued for the purpose of paying off a line of
credit as allowed pursuant to paragraph (3) and, in that case, only
in an amount that corresponds to the amount of the line of credit
payment, as well as the costs of issuance of the Emergency Refunding
Bonds and a reserve fund for the Emergency Refunding Bonds.
SEC. 2. 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) (1) Amend or modify existing agreements,
obligations, or commitments with any entity, for any purpose,
including, but not limited to, any of the following:
(1)
(A) 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)
(B) Modifying terms and conditions of existing
agreements, obligations, or commitments.
(3)
(C) 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)
(D) Increasing its deposits to the Low and Moderate
Income Housing Fund created pursuant to Section 33334.3 beyond the
minimum level that applied to it as of January 1, 2011.
(5)
(E) 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, and to
make required payments under Sections 33690 and 33690.5, and
to borrow funds pursuant to Section 34168.5. 33690.5.
(2) Notwithstanding the restrictions set forth in this
subdivision, in order to preserve the revenues and assets of an
agency with outstanding bonds that were issued prior to January 1,
2011, that are secured with a credit enhancement issued by a
third-party credit provider prior to January 1, 2011, that agency may
seek the extension of the credit enhancement and, in connection
therewith, may amend or modify the terms of existing agreements with
the credit provider if the extension, amendment, or modification
would avoid or delay the incurrence of a reimbursement obligation of
the agency owing to the credit provider which is immediately due or
payable or which is payable over a shorter period of time than the
scheduled amortization of the bonds.
(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. 3. This act addresses the fiscal emergency declared and
reaffirmed by the Governor by proclamation on January 20, 2011,
pursuant to subdivision (f) of Section 10 of Article IV of the
California Constitution.
SEC. 4. This act is an urgency statute necessary for the immediate
preservation of the public peace, health, or safety within the
meaning of Article IV of the Constitution and shall go into immediate
effect. The facts constituting the necessity are:
In order to allow redevelopment agencies to renew or modify lines
of credit and credit enhancements prior to defaulting on obligations,
it is necessary that these provisions take effect immediately.