Amended in Senate June 11, 2013

Amended in Senate May 24, 2013

California Legislature—2013–14 Regular Session

Assembly BillNo. 662


Introduced by Assembly Members Atkins, Dickinson, Mitchell, Perea, Ting, and Torres

begin insert

(Coauthor: Senator Wolk)

end insert

February 21, 2013


An act to amend Section 53395.4 of the Government Code, and to amend Sections 34163, 34171, 34177, 34178, 34191.4, and 34191.5 of the Health and Safety Code, relating to local government.

LEGISLATIVE COUNSEL’S DIGEST

AB 662, as amended, Atkins. Local government: infrastructure financing districts.

(1) Existing law authorizes the creation of infrastructure financing districts, as defined, for the sole purpose of financing public facilities, subject to adoption of a resolution by the legislative body and affected taxing entities proposed to be subject to the division of taxes and voter approval requirements. Existing law prohibits an infrastructure financing district from including any portion of a redevelopment project area.

This bill would delete that prohibition.

(2) Existing law dissolved redevelopment agencies and community development agencies as of February 1, 2012, and provides for the designation of successor agencies to wind down the affairs of the dissolved redevelopment agencies and to, among other things, make payments due for enforceable obligations and to perform obligations required pursuant to any enforceable obligation. Existing law prohibits a successor agency from entering into contracts with, incur obligations, or make commitments to, any entity, as specified, or to amend or modify existing agreements, obligations, or commitments with any entity, for any purpose.

This bill would authorize a successor agency, if the successor agency has received a finding of completion, to enter into, or amend existing, contracts and agreements, make land use decisions, or otherwise administer projects in connection with long-term enforceable obligations, if the contract or agreement, land use decision, or project will not commit new tax funds or otherwise adversely affect the flow of tax increment to the taxing agencies.

(3) Existing law specifies that the term “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, as specified.

This bill would provide that an agreement entered into between the redevelopment agency and the city, county, or city and county that created the redevelopment agency prior to October 1, 2011, is an enforceable obligation if the agreement relates to a project identified, in whole or in part, in an infill infrastructure grant program disbursement agreement entered into by the Department of Housing and Community Development pursuant to the Infill Infrastructure Grant Program.begin insert The bill would also provide that an agreement entered into between the redevelopment agency and the city, county, or city and county that created the redevelopment agency prior to October 1, 2011, is an enforceable obligation if the agreement relates to state highway infrastructure improvements to which the redevelopment agency committed funds pursuant to a specified code section.end insert

(4) Existing law requires a successor agency to submit a Recognized Obligation Payment Schedule to the Department of Finance, and requires the successor agency to make payments pursuant to that schedule.

This bill would authorize the successor agency to schedule Recognized Obligation Payment Schedule payments beyond the existing Recognized Obligation Payment Schedule cycle upon a showing that a lender requires cash on hand beyond the Recognized Obligation Payment Schedule cycle, or when a payment is shown to be due during the Recognized Obligation Payment Schedule period. The bill would authorize the successor agency to utilize reasonable estimates and projections to support payment amounts where a payment is shown to be due during the Recognized Obligation Payment Schedule period but an invoice or other billing document has not been received if the successor agency submits appropriate supporting documentation for the basis of the estimate or projection to the department. The bill would provide that a Recognized Obligation Payment Schedule may also include appropriation of moneys from bonds subject to passage during the Recognized Obligation Payment Schedule cycle when an enforceable obligation requires the agency to issue the bonds and use the proceeds to pay for project expenditures.

(5) Existing law specifies that certain loan agreements entered into by a former redevelopment agency are enforceable obligations and sets forth the requirement for repayment of those loans, as specified.

This bill would prohibit the loan repayment schedule from including amounts paid back pursuant to the due diligence review process during the 2012-13 base year.

(6) Existing law requires a successor agency to prepare a long-range property management plan that addresses the disposition and use of the real properties of a former redevelopment agency and requires a transfer of the property to the city, county, or city and county if the plan directs the use or liquidation of the property for a project identified in an approved redevelopment plan, as specified.

This bill would specify that the term “identified in an approved redevelopment plan” includes properties listed in a community plan, a 5-year implementation plan, or other similar document.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

P3    1

SECTION 1.  

Section 53395.4 of the Government Code is
2amended to read:

3

53395.4.  

(a) A district may finance only the facilities or
4services authorized in this chapter to the extent that the facilities
5or services are in addition to those provided in the territory of the
6district before the district was created. The additional facilities or
7services may not supplant facilities or services already available
8within that territory when the district was created but may
9supplement those facilities and services as needed to serve new
10developments.

11(b) A district may include areas that are not contiguous.

P4    1

SEC. 2.  

Section 34163 of the Health and Safety Code is
2amended to read:

3

34163.  

Notwithstanding Part 1 (commencing with Section
433000), Part 1.5 (commencing with Section 34000), Part 1.6
5(commencing with Section 34050), and Part 1.7 (commencing
6with Section 34100), or any other law, commencing on the effective
7date of this part, an agency shall not have the authority to, and
8shall not, do any of the following:

9(a) Make loans or advances or grant or enter into agreements
10to provide funds or provide financial assistance of any sort to any
11entity or person for any purpose, including, but not limited to, all
12of the following:

13(1) Loans of moneys or any other thing of value or commitments
14to provide financing to nonprofit organizations to provide those
15organizations with financing for the acquisition, construction,
16rehabilitation, refinancing, or development of multifamily rental
17housing or the acquisition of commercial property for lease, each
18pursuant to Chapter 7.5 (commencing with Section 33741) of Part
191.

20(2) Loans of moneys or any other thing of value for residential
21construction, improvement, or rehabilitation pursuant to Chapter
228 (commencing with Section 33750) of Part 1. These include, but
23are not limited to, construction loans to purchasers of residential
24housing, mortgage loans to purchasers of residential housing, and
25loans to mortgage lenders, or any other entity, to aid in financing
26pursuant to Chapter 8 (commencing with Section 33750).

27(3) The purchase, by an agency, of mortgage or construction
28loans from mortgage lenders or from any other entities.

29(b) (1) Enter into contracts with, incur obligations, or make
30commitments to, any entity, whether governmental, tribal, or
31private, or any individual or groups of individuals for any purpose,
32including, but not limited to, loan agreements, passthrough
33agreements, regulatory agreements, services contracts, leases,
34disposition and development agreements, joint exercise of powers
35agreements, contracts for the purchase of capital equipment,
36agreements for redevelopment activities, including, but not limited
37to, agreements for planning, design, redesign, development,
38demolition, alteration, construction, reconstruction, rehabilitation,
39site remediation, site development or improvement, removal of
40graffiti, land clearance, and seismic retrofits.

P5    1(2) Notwithstanding paragraph (1), if a successor agency has
2received a finding of completion, the successor agency may enter
3into, or amend existing, contracts and agreements, make land use
4decisions, or otherwise administer projects in connection with
5long-term enforceable obligations, if the contract or agreement,
6land use decision, or project will not commit new tax funds, or
7will not otherwise adversely affect the flow of tax increment to
8the taxing agencies.

9(c) Amend or modify existing agreements, obligations, or
10commitments with any entity, for any purpose, including, but not
11limited to, any of the following:

12(1) Renewing or extending term of leases or other agreements,
13except that the agency may extend lease space for its own use to
14a date not to exceed six months after the effective date of the act
15adding this part and for a rate no more than 5 percent above the
16rate the agency currently pays on a monthly basis.

17(2) Modifying terms and conditions of existing agreements,
18obligations, or commitments.

19(3) Forgiving all or any part of the balance owed to the agency
20on existing loans or extend the term or change the terms and
21conditions of existing loans.

22(4) Making any future deposits to the Low and Moderate Income
23Housing Fund created pursuant to Section 33334.3.

24(5) Transferring funds out of the Low and Moderate Income
25Housing Fund, except to meet the minimum housing-related
26obligations that existed as of January 1, 2011, to make required
27payments under Sections 33690 and 33690.5, and to borrow funds
28pursuant to Section 34168.5.

29(d) Dispose of assets by sale, long-term lease, gift, grant,
30exchange, transfer, assignment, or otherwise, for any purpose,
31including, but not limited to, any of the following:

32(1) Assets, including, but not limited to, real property, deeds of
33trust, and mortgages held by the agency, moneys, accounts
34receivable, contract rights, proceeds of insurance claims, grant
35proceeds, settlement payments, rights to receive rents, and any
36other rights to payment of whatever kind.

37(2) Real property, including, but not limited to, land, land under
38water and waterfront property, buildings, structures, fixtures, and
39improvements on the land, any property appurtenant to, or used
40in connection with, the land, every estate, interest, privilege,
P6    1easement, franchise, and right in land, including rights-of-way,
2terms for years, and liens, charges, or encumbrances by way of
3judgment, mortgage, or otherwise, and the indebtedness secured
4by the liens.

5(e) Acquire real property by any means for any purpose,
6including, but not limited to, the purchase, lease, or exercising of
7an option to purchase or lease, exchange, subdivide, transfer,
8assume, obtain option upon, acquire by gift, grant, bequest, devise,
9or otherwise acquire any real property, any interest in real property,
10and any improvements on it, including the repurchase of developed
11property previously owned by the agency and the acquisition of
12real property by eminent domain; provided, however, that nothing
13in this subdivision is intended to prohibit the acceptance or transfer
14of title for real property acquired prior to the effective date of this
15part.

16(f) Transfer, assign, vest, or delegate any of its assets, funds,
17rights, powers, ownership interests, or obligations for any purpose
18to any entity, including, but not limited to, the community, the
19legislative body, another member of a joint powers authority, a
20trustee, a receiver, a partner entity, another agency, a nonprofit
21corporation, a contractual counterparty, a public body, a
22limited-equity housing cooperative, the state, a political subdivision
23of the state, the federal government, any private entity, or an
24individual or group of individuals.

25(g) Accept financial or other assistance from the state or federal
26government or any public or private source if the acceptance
27necessitates or is conditioned upon the agency incurring
28indebtedness as that term is described in this part.

29

SEC. 3.  

Section 34171 of the Health and Safety Code is
30amended to read:

31

34171.  

The following terms shall have the following meanings:

32(a) “Administrative budget” means the budget for administrative
33costs of the successor agencies as provided in Section 34177.

34(b) “Administrative cost allowance” means an amount that,
35subject to the approval of the oversight board, is payable from
36property tax revenues of up to 5 percent of the property tax
37allocated to the successor agency on the Recognized Obligation
38Payment Schedule covering the period January 1, 2012, through
39June 30, 2012, and up to 3 percent of the property tax allocated to
40the Redevelopment Obligation Retirement Fund money that is
P7    1allocated to the successor agency for each fiscal year thereafter;
2provided, however, that the amount shall not be less than two
3hundred fifty thousand dollars ($250,000), unless the oversight
4board reduces this amount, for any fiscal year or such lesser amount
5as agreed to by the successor agency. However, the allowance
6amount shall exclude, and shall not apply to, any administrative
7costs that can be paid from bond proceeds or from sources other
8than property tax. Administrative cost allowances shall exclude
9any litigation expenses related to assets or obligations, settlements
10and judgments, and the costs of maintaining assets prior to
11disposition. Employee costs associated with work on specific
12project implementation activities, including, but not limited to,
13construction inspection, project management, or actual
14construction, shall be considered project-specific costs and shall
15not constitute administrative costs.

16(c) “Designated local authority” shall mean a public entity
17formed pursuant to subdivision (d) of Section 34173.

18(d) (1) “Enforceable obligation” means any of the following:

19(A) Bonds, as defined by Section 33602 and bonds issued
20pursuant to Chapter 10.5 (commencing with Section 5850) of
21Division 6 of Title 1 of the Government Code, including the
22required debt service, reserve set-asides, and any other payments
23required under the indenture or similar documents governing the
24issuance of the outstanding bonds of the former redevelopment
25agency. A reserve may be held when required by the bond
26indenture or when the next property tax allocation will be
27insufficient to pay all obligations due under the provisions of the
28bond for the next payment due in the following half of the calendar
29year.

30(B) Loans of moneys borrowed by the redevelopment agency
31for a lawful purpose, to the extent they are legally required to be
32 repaid pursuant to a required repayment schedule or other
33mandatory loan terms.

34(C) Payments required by the federal government, preexisting
35obligations to the state or obligations imposed by state law, other
36than passthrough payments that are made by the county
37auditor-controller pursuant to Section 34183, or legally enforceable
38payments required in connection with the agencies’ employees,
39including, but not limited to, pension payments, pension obligation
40debt service, unemployment payments, or other obligations
P8    1conferred through a collective bargaining agreement. Costs incurred
2to fulfill collective bargaining agreements for layoffs or
3terminations of city employees who performed work directly on
4behalf of the former redevelopment agency shall be considered
5enforceable obligations payable from property tax funds. The
6obligations to employees specified in this subparagraph shall
7remain enforceable obligations payable from property tax funds
8 for any employee to whom those obligations apply if that employee
9is transferred to the entity assuming the housing functions of the
10former redevelopment agency pursuant to Section 34176. The
11successor agency or designated local authority shall enter into an
12agreement with the housing entity to reimburse it for any costs of
13the employee obligations.

14(D) Judgments or settlements entered by a competent court of
15law or binding arbitration decisions against the former
16redevelopment agency, other than passthrough payments that are
17made by the county auditor-controller pursuant to Section 34183.
18Along with the successor agency, the oversight board shall have
19the authority and standing to appeal any judgment or to set aside
20any settlement or arbitration decision.

21(E) Any legally binding and enforceable agreement or contract
22that is not otherwise void as violating the debt limit or public
23 policy. However, nothing in this act shall prohibit either the
24successor agency, with the approval or at the direction of the
25oversight board, or the oversight board itself from terminating any
26existing agreements or contracts and providing any necessary and
27required compensation or remediation for such termination. Titles
28of or headings used on or in a document shall not be relevant in
29determining the existence of an enforceable obligation.

30(F) Contracts or agreements necessary for the administration or
31operation of the successor agency, in accordance with this part,
32including, but not limited to, agreements concerning litigation
33expenses related to assets or obligations, settlements and
34judgements, and the costs of maintaining assets prior to disposition,
35and agreements to purchase or rent office space, equipment and
36supplies, and pay-related expenses pursuant to Section 33127 and
37for carrying insurance pursuant to Section 33134.

38(G) Amounts borrowed from, or payments owing to, the Low
39and Moderate Income Housing Fund of a redevelopment agency,
40which had been deferred as of the effective date of the act adding
P9    1this part; provided, however, that the repayment schedule is
2approved by the oversight board. Repayments shall be transferred
3to the Low and Moderate Income Housing Asset Fund established
4pursuant to subdivision (d) of Section 34176 as a housing asset
5and shall be used in a manner consistent with the affordable
6housing requirements of the Community Redevelopment Law (Part
71 (commencing with Section 33000)).

8(2) For purposes of this part, “enforceable obligation” does not
9include any agreements, contracts, or arrangements between the
10city, county, or city and county that created the redevelopment
11agency and the former redevelopment agency. However, written
12agreements entered into (A) at the time of issuance, but in no event
13later than December 31, 2010, of indebtedness obligations, and
14(B) solely for the purpose of securing or repaying those
15indebtedness obligations may be deemed enforceable obligations
16for purposes of this part. Notwithstanding this paragraph, loan
17agreements entered into between the redevelopment agency and
18the city, county, or city and county that created it, within two years
19of the date of creation of the redevelopment agency, may be
20deemed to be enforceable obligations. Notwithstanding this
21paragraph, an agreement entered into between the redevelopment
22agency and the city, county, or city and county that created the
23redevelopment agency prior to October 1, 2011, is an enforceable
24obligation if the agreement relates to a project identified, in whole
25or in part, in an infill infrastructure grant program disbursement
26agreement entered into by the Department of Housing and
27Community Development pursuant to the Infill Infrastructure Grant
28Program and in accordance with Part 12 (commencing with Section
2953545.12) of Division 31.begin insert Notwithstanding this paragraph, an
30agreement entered into between the redevelopment agency and
31the city, county, or city and county that created the redevelopment
32agency prior to October 1, 2011, is an enforceable obligation if
33the agreement relates to state highway infrastructure improvements
34to which the redevelopment agency committed funds pursuant to
35the provisions of Section 33445.end insert

36(3) Contracts or agreements between the former redevelopment
37agency and other public agencies, to perform services or provide
38funding for governmental or private services or capital projects
39outside of redevelopment project areas that do not provide benefit
40to the redevelopment project and thus were not properly authorized
P10   1under Part 1 (commencing with Section 33000) shall be deemed
2void on the effective date of this part; provided, however, that such
3contracts or agreements for the provision of housing properly
4authorized under Part 1 (commencing with Section 33000) shall
5not be deemed void.

6(e) “Indebtedness obligations” means bonds, notes, certificates
7of participation, or other evidence of indebtedness, issued or
8delivered by the redevelopment agency, or by a joint exercise of
9powers authority created by the redevelopment agency, to
10third-party investors or bondholders to finance or refinance
11redevelopment projects undertaken by the redevelopment agency
12in compliance with the Community Redevelopment Law (Part 1
13(commencing with Section 33000)).

14(f) “Oversight board” shall mean each entity established pursuant
15to Section 34179.

16(g) “Recognized obligation” means an obligation listed in the
17Recognized Obligation Payment Schedule.

18(h) “Recognized Obligation Payment Schedule” means the
19document setting forth the minimum payment amounts and due
20dates of payments required by enforceable obligations for each
21six-month fiscal period as provided in subdivision (m) of Section
2234177.

23(i) “School entity” means any entity defined as such in
24subdivision (f) of Section 95 of the Revenue and Taxation Code.

25(j) “Successor agency” means the successor entity to the former
26redevelopment agency as described in Section 34173.

27(k) “Taxing entities” means cities, counties, a city and county,
28special districts, and school entities, as defined in subdivision (f)
29of Section 95 of the Revenue and Taxation Code, that receive
30passthrough payments and distributions of property taxes pursuant
31to the provisions of this part.

32(l) “Property taxes” include all property tax revenues, including
33those from unitary and supplemental and roll corrections applicable
34to tax increment.

35(m) “Department” means the Department of Finance unless the
36context clearly refers to another state agency.

37(n) “Sponsoring entity” means the city, county, or city and
38county, or other entity that authorized the creation of each
39redevelopment agency.

P11   1(o) “Final judicial determination” means a final judicial
2determination made by any state court that is not appealed, or by
3a court of appellate jurisdiction that is not further appealed, in an
4action by any party.

5

SEC. 4.  

Section 34177 of the Health and Safety Code is
6amended to read:

7

34177.  

Successor agencies are required to do all of the
8following:

9(a) Continue to make payments due for enforceable obligations.

10(1) On and after February 1, 2012, and until a Recognized
11Obligation Payment Schedule becomes operative, only payments
12required pursuant to an enforceable obligations payment schedule
13shall be made. The initial enforceable obligation payment schedule
14shall be the last schedule adopted by the redevelopment agency
15under Section 34169. However, payments associated with
16obligations excluded from the definition of enforceable obligations
17by paragraph (2) of subdivision (d) of Section 34171 shall be
18excluded from the enforceable obligations payment schedule and
19be removed from the last schedule adopted by the redevelopment
20agency under Section 34169 prior to the successor agency adopting
21it as its enforceable obligations payment schedule pursuant to this
22subdivision. The enforceable obligation payment schedule may
23be amended by the successor agency at any public meeting and
24shall be subject to the approval of the oversight board as soon as
25the board has sufficient members to form a quorum. In recognition
26of the fact that the timing of the California Supreme Court’s ruling
27in the case California Redevelopment Association v. Matosantos
28(2011) 53 Cal.4th 231 delayed the preparation by successor
29agencies and the approval by oversight boards of the January 1,
302012, through June 30, 2012, Recognized Obligation Payment
31Schedule, a successor agency may amend the Enforceable
32Obligation Payment Schedule to authorize the continued payment
33of enforceable obligations until the time that the January 1, 2012,
34through June 30, 2012, Recognized Obligation Payment Schedule
35has been approved by the oversight board and by the Department
36of Finance. The successor agency may utilize reasonable estimates
37and projections to support payment amounts for enforceable
38obligations if the successor agency submits appropriate supporting
39documentation of the basis for the estimate or projection to the
40Department of Finance.

P12   1(2) The Department of Finance and the Controller shall each
2have the authority to require any documents associated with the
3enforceable obligations to be provided to them in a manner of their
4choosing. Any taxing entity, the department, and the Controller
5shall each have standing to file a judicial action to prevent a
6violation under this part and to obtain injunctive or other
7appropriate relief.

8(3) Commencing on the date the Recognized Obligation Payment
9Schedule is valid pursuant to subdivision (l), only those payments
10listed in the Recognized Obligation Payment Schedule may be
11made by the successor agency from the funds specified in the
12Recognized Obligation Payment Schedule. In addition, after it
13becomes valid, the Recognized Obligation Payment Schedule shall
14supersede the Statement of Indebtedness, which shall no longer
15be prepared nor have any effect under the Community
16Redevelopment Law (Part 1 (commencing with Section 33000)).

17(4) Nothing in the act adding this part is to be construed as
18preventing a successor agency, with the prior approval of the
19oversight board, as described in Section 34179, from making
20payments for enforceable obligations from sources other than those
21listed in the Recognized Obligation Payment Schedule.

22(5) From February 1, 2012, to July 1, 2012, a successor agency
23shall have no authority and is hereby prohibited from accelerating
24payment or making any lump-sum payments that are intended to
25prepay loans unless such accelerated repayments were required
26prior to the effective date of this part.

27(b) Maintain reserves in the amount required by indentures,
28trust indentures, or similar documents governing the issuance of
29outstanding redevelopment agency bonds.

30(c) Perform obligations required pursuant to any enforceable
31obligation.

32(d) Remit unencumbered balances of redevelopment agency
33funds to the county auditor-controller for distribution to the taxing
34entities, including, but not limited to, the unencumbered balance
35of the Low and Moderate Income Housing Fund of a former
36redevelopment agency. In making the distribution, the county
37auditor-controller shall utilize the same methodology for allocation
38and distribution of property tax revenues provided in Section
3934188.

P13   1(e) Dispose of assets and properties of the former redevelopment
2agency as directed by the oversight board; provided, however, that
3the oversight board may instead direct the successor agency to
4transfer ownership of certain assets pursuant to subdivision (a) of
5Section 34181. The disposal is to be done expeditiously and in a
6manner aimed at maximizing value. Proceeds from asset sales and
7related funds that are no longer needed for approved development
8projects or to otherwise wind down the affairs of the agency, each
9as determined by the oversight board, shall be transferred to the
10county auditor-controller for distribution as property tax proceeds
11under Section 34188. The requirements of this subdivision shall
12not apply to a successor agency that has been issued a finding of
13completion by the Department of Finance pursuant to Section
1434179.7.

15(f) Enforce all former redevelopment agency rights for the
16benefit of the taxing entities, including, but not limited to,
17continuing to collect loans, rents, and other revenues that were due
18to the redevelopment agency.

19(g) Effectuate transfer of housing functions and assets to the
20appropriate entity designated pursuant to Section 34176.

21(h) Expeditiously wind down the affairs of the redevelopment
22agency pursuant to the provisions of this part and in accordance
23with the direction of the oversight board.

24(i) Continue to oversee development of properties until the
25contracted work has been completed or the contractual obligations
26of the former redevelopment agency can be transferred to other
27parties. Bond proceeds shall be used for the purposes for which
28bonds were sold unless the purposes can no longer be achieved,
29in which case, the proceeds may be used to defease the bonds.

30(j) Prepare a proposed administrative budget and submit it to
31the oversight board for its approval. The proposed administrative
32budget shall include all of the following:

33(1) Estimated amounts for successor agency administrative costs
34for the upcoming six-month fiscal period.

35(2) Proposed sources of payment for the costs identified in
36paragraph (1).

37(3) Proposals for arrangements for administrative and operations
38services provided by a city, county, city and county, or other entity.

39(k) Provide administrative cost estimates, from its approved
40administrative budget that are to be paid from property tax revenues
P14   1deposited in the Redevelopment Property Tax Trust Fund, to the
2county auditor-controller for each six-month fiscal period.

3(l) (1) Before each six-month fiscal period, prepare a
4Recognized Obligation Payment Schedule in accordance with the
5requirements of this paragraph. For each recognized obligation,
6the Recognized Obligation Payment Schedule shall identify one
7or more of the following sources of payment:

8(A) Low and Moderate Income Housing Fund.

9(B) Bond proceeds.

10(C) Reserve balances.

11(D) Administrative cost allowance.

12(E) The Redevelopment Property Tax Trust Fund, but only to
13the extent no other funding source is available or when payment
14from property tax revenues is required by an enforceable obligation
15or by the provisions of this part.

16(F) Other revenue sources, including rents, concessions, asset
17sale proceeds, interest earnings, and any other revenues derived
18from the former redevelopment agency, as approved by the
19oversight board in accordance with this part.

20(2) A Recognized Obligation Payment Schedule shall not be
21deemed valid unless all of the following conditions have been met:

22(A) A Recognized Obligation Payment Schedule is prepared
23by the successor agency for the enforceable obligations of the
24former redevelopment agency. The initial schedule shall project
25the dates and amounts of scheduled payments for each enforceable
26obligation for the remainder of the time period during which the
27redevelopment agency would have been authorized to obligate
28property tax increment had the a redevelopment agency not been
29dissolved.

30(B) The Recognized Obligation Payment Schedule is submitted
31to and duly approved by the oversight board. The successor agency
32shall submit a copy of the Recognized Obligation Payment
33Schedule to the county administrative officer, the county
34auditor-controller, and the Department of Finance at the same time
35that the successor agency submits the Recognized Obligation
36Payment Schedule to the oversight board for approval.

37(C) A copy of the approved Recognized Obligation Payment
38Schedule is submitted to the county auditor-controller and both
39the Controller’s office and the Department of Finance and be posted
40on the successor agency’s Internet Web site.

P15   1(3) The Recognized Obligation Payment Schedule shall be
2forward looking to the next six months. The first Recognized
3 Obligation Payment Schedule shall be submitted to the Controller’s
4office and the Department of Finance by April 15, 2012, for the
5period of January 1, 2012, to June 30, 2012, inclusive. This
6Recognized Obligation Payment Schedule shall include all
7payments made by the former redevelopment agency between
8January 1, 2012, through January 31, 2012, and shall include all
9payments proposed to be made by the successor agency from
10February 1, 2012, through June 30, 2012. Former redevelopment
11agency enforceable obligation payments due, and reasonable or
12necessary administrative costs due or incurred, prior to January 1,
132012, shall be made from property tax revenues received in the
14spring of 2011 property tax distribution, and from other revenues
15and balances transferred to the successor agency.

16(m) The Recognized Obligation Payment Schedule for the period
17of January 1, 2013, to June 30, 2013, shall be submitted by the
18successor agency, after approval by the oversight board, no later
19than September 1, 2012. Commencing with the Recognized
20Obligation Payment Schedule covering the period July 1, 2013,
21through December 31, 2013, successor agencies shall submit an
22oversight board-approved Recognized Obligation Payment
23Schedule to the Department of Finance and to the county
24auditor-controller no fewer than 90 days before the date of property
25tax distribution. The Department of Finance shall make its
26determination of the enforceable obligations and the amounts and
27funding sources of the enforceable obligations no later than 45
28days after the Recognized Obligation Payment Schedule is
29submitted. Within five business days of the department’s
30determination, a successor agency may request additional review
31by the department and an opportunity to meet and confer on
32disputed items. The meet and confer period may vary; an untimely
33submittal of a Recognized Obligation Payment Schedule may result
34in a meet and confer period of less than 30 days. The department
35shall notify the successor agency and the county auditor-controllers
36as to the outcome of its review at least 15 days before the date of
37property tax distribution.

38(1) The successor agency shall submit a copy of the Recognized
39Obligation Payment Schedule to the Department of Finance
40electronically, and the successor agency shall complete the
P16   1Recognized Obligation Payment Schedule in the manner provided
2for by the department. A successor agency shall be in
3noncompliance with this paragraph if it only submits to the
4department an electronic message or a letter stating that the
5oversight board has approved a Recognized Obligation Payment
6Schedule.

7(2) If a successor agency does not submit a Recognized
8Obligation Payment Schedule by the deadlines provided in this
9subdivision, the city, county, or city and county that created the
10redevelopment agency shall be subject to a civil penalty equal to
11ten thousand dollars ($10,000) per day for every day the schedule
12is not submitted to the department. The civil penalty shall be paid
13to the county auditor-controller for allocation to the taxing entities
14under Section 34183. If a successor agency fails to submit a
15Recognized Obligation Payment Schedule by the deadline, any
16creditor of the successor agency or the Department of Finance or
17any affected taxing entity shall have standing to and may request
18a writ of mandate to require the successor agency to immediately
19perform this duty. Those actions may be filed only in the County
20of Sacramento and shall have priority over other civil matters.
21Additionally, if an agency does not submit a Recognized Obligation
22Payment Schedule within ten days of the deadline, the maximum
23administrative cost allowance for that period shall be reduced by
2425 percent.

25(3) If a successor agency fails to submit to the department an
26oversight board-approved Recognized Obligation Payment
27Schedule that complies with all requirements of this subdivision
28within five business days of the date upon which the Recognized
29Obligation Payment Schedule is to be used to determine the amount
30of property tax allocations, the department may determine if any
31amount should be withheld by the county auditor-controller for
32payments for enforceable obligations from distribution to taxing
33entities, pending approval of a Recognized Obligation Payment
34Schedule. The county auditor-controller shall distribute the portion
35of any of the sums withheld pursuant to this paragraph to the
36affected taxing entities in accordance with paragraph (4) of
37subdivision (a) of Section 34183 upon notice by the department
38that a portion of the withheld balances are in excess of the amount
39of enforceable obligations. The county auditor-controller shall
40distribute withheld funds to the successor agency only in
P17   1accordance with a Recognized Obligation Payment Schedule
2approved by the department. County auditor-controllers shall lack
3the authority to withhold any other amounts from the allocations
4provided for under Section 34183 or 34188 unless required by a
5court order.

6(4) (A) The Recognized Obligation Payment Schedule payments
7required pursuant to this subdivision may be scheduled beyond
8the existing Recognized Obligation Payment Schedule cycle upon
9a showing that a lender requires cash on hand beyond the
10Recognized Obligation Payment Schedule cycle.

11(B) When a payment is shown to be due during the Recognized
12Obligation Payment Schedule period, but an invoice or other billing
13document has not yet been received, the successor agency may
14utilize reasonable estimates and projections to support payment
15amounts for enforceable obligations if the successor agency submits
16appropriate supporting documentation of the basis for the estimate
17or projection to the department.

18(C) A Recognized Obligation Payment Schedule may also
19include appropriation of moneys from bonds subject to passage
20during the Recognized Obligation Payment Schedule cycle when
21an enforceable obligation requires the agency to issue the bonds
22and use the proceeds to pay for project expenditures.

23(n) Cause a postaudit of the financial transactions and records
24of the successor agency to be made at least annually by a certified
25public accountant.

26

SEC. 5.  

Section 34178 of the Health and Safety Code is
27amended to read:

28

34178.  

(a) Commencing on the operative date of this part,
29agreements, contracts, or arrangements between the city or county,
30or city and county that created the redevelopment agency and the
31redevelopment agency are invalid and shall not be binding on the
32successor agency; provided, however, that a successor entity
33wishing to enter or reenter into agreements with the city, county,
34or city and county that formed the redevelopment agency that it
35is succeeding may do so upon obtaining the approval of its
36oversight board. A successor agency or an oversight board shall
37not exercise the powers granted by this subdivision to restore
38funding for an enforceable obligation that was deleted or reduced
39by the Department of Finance pursuant to subdivision (h) of Section
4034179 unless it reflects the decisions made during the meet and
P18   1confer process with the Department of Finance or pursuant to a
2court order.

3(b) Notwithstanding subdivision (a), any of the following
4agreements are not invalid and may bind the successor agency:

5(1) A duly authorized written agreement entered into at the time
6of issuance, but in no event later than December 31, 2010, of
7indebtedness obligations, and solely for the purpose of securing
8or repaying those indebtedness obligations.

9(2) A written agreement between a redevelopment agency and
10the city, county, or city and county that created it that provided
11loans or other startup funds for the redevelopment agency that
12were entered into within two years of the formation of the
13redevelopment agency.

14(3) A joint exercise of powers agreement in which the
15redevelopment agency is a member of the joint powers authority.
16However, upon assignment to the successor agency by operation
17of the act adding this part, the successor agency’s rights, duties,
18and performance obligations under that joint exercise of powers
19agreement shall be limited by the constraints imposed on successor
20agencies by the act adding this part.

21(4) An agreement entered into between the redevelopment
22agency and the city, county, or city and county that created the
23redevelopment agency prior to October 1, 2011, if the agreement
24relates to a project identified, in whole or in part, in an infill
25infrastructure grant program disbursement agreement entered into
26 by the Department of Housing and Community Development
27pursuant to the Infill Infrastructure Grant Program in accordance
28with Part 12 (commencing with Section 53545.12) of Division 31.

begin insert

29(5) An agreement entered into between the redevelopment
30agency and the city, county, or city and county that created the
31redevelopment agency prior to October 1, 2011, if the agreement
32relates to state highway infrastructure improvements to which the
33redevelopment agency committed funds pursuant to the provisions
34of Section 33445.

end insert
35

SEC. 6.  

Section 34191.4 of the Health and Safety Code is
36amended to read:

37

34191.4.  

The following provisions shall apply to any successor
38agency that has been issued a finding of completion by the
39Department of Finance:

P19   1(a) All real property and interests in real property identified in
2subparagraph (C) of paragraph (5) of subdivision (c) of Section
334179.5 shall be transferred to the Community Redevelopment
4Property Trust Fund of the successor agency upon approval by the
5Department of Finance of the long-range property management
6plan submitted by the successor agency pursuant to subdivision
7(b) of Section 34191.7 unless that property is subject to the
8requirements of any existing enforceable obligation.

9(b) (1) Notwithstanding subdivision (d) of Section 34171, upon
10application by the successor agency and approval by the oversight
11board, loan agreements entered into between the redevelopment
12agency and the city, county, or city and county that created by the
13redevelopment agency shall be deemed to be enforceable
14obligations provided that the oversight board makes a finding that
15the loan was for legitimate redevelopment purposes.

16(2) If the oversight board finds that the loan is an enforceable
17obligation, the accumulated interest on the remaining principal
18amount of the loan shall be recalculated from origination at the
19interest rate earned by funds deposited into the Local Agency
20Investment Fund. The loan shall be repaid to the city, county, or
21city and county in accordance with a defined schedule over a
22reasonable term of years at an interest rate not to exceed the interest
23rate earned by funds deposited into the Local Agency Investment
24Fund. The annual loan repayments provided for in the recognized
25obligations payment schedules shall be subject to all of the
26following limitations:

27(A) Loan repayments shall not be made prior to the 2013-14
28fiscal year. Beginning in the 2013-14 fiscal year, the maximum
29repayment amount authorized each fiscal year for repayments
30made pursuant to this subdivision and paragraph (7) of subdivision
31(e) of Section 34176 combined shall be equal to one-half of the
32increase between the amount distributed to the taxing entities
33pursuant to paragraph (4) of subdivision (a) of Section 34183 in
34that fiscal year and the amount distributed to taxing entities
35pursuant to that paragraph in the 2012-13 base year. Loan or
36deferral repayments made pursuant to this subdivision shall be
37second in priority to amounts to be repaid pursuant to paragraph
38(7) of subdivision (e) of Section 34176.

39(B) Repayments received by the city, county or city and county
40that formed the redevelopment agency shall first be used to retire
P20   1any outstanding amounts borrowed and owed to the Low and
2Moderate Income Housing Fund of the former redevelopment
3agency for purposes of the Supplemental Educational Revenue
4Augmentation Fund and shall be distributed to the Low and
5Moderate Income Housing Asset Fund established by subdivision
6(d) of Section 34176.

7(C) Twenty percent of any loan repayment shall be deducted
8from the loan repayment amount and shall be transferred to the
9Low and Moderate Income Housing Asset Fund, after all
10outstanding loans from the Low and Moderate Income Housing
11Fund for purposes of the Supplemental Educational Revenue
12Augmentation Fund have been paid.

13(D) The loan repayment schedule shall not include amounts
14paid back pursuant to the due diligence review process during the
152012-13 base year.

16(c) (1) Bond proceeds derived from bonds issued on or before
17December 31, 2010, shall be used for the purposes for which the
18bonds were sold.

19(2) (A) Notwithstanding Section 34177.3 or any other
20conflicting provision of law, bond proceeds in excess of the
21amounts needed to satisfy approved enforceable obligations shall
22thereafter be expended in a manner consistent with the original
23bond covenants. Enforceable obligations may be satisfied by the
24creation of reserves for projects that are the subject of the
25enforceable obligation and that are consistent with the contractual
26obligations for those projects, or by expending funds to complete
27the projects. An expenditure made pursuant to this paragraph shall
28constitute the creation of excess bond proceeds obligations to be
29paid from the excess proceeds. Excess bond proceeds obligations
30shall be listed separately on the Recognized Obligation Payment
31Schedule submitted by the successor agency.

32(B) If remaining bond proceeds cannot be spent in a manner
33consistent with the bond covenants pursuant to subparagraph (A),
34the proceeds shall be used to defease the bonds or to purchase
35those same outstanding bonds on the open market for cancellation.

36

SEC. 7.  

Section 34191.5 of the Health and Safety Code is
37amended to read:

38

34191.5.  

(a) There is hereby established a Community
39Redevelopment Property Trust Fund, administered by the successor
40agency, to serve as the repository of the former redevelopment
P21   1agency’s real properties identified in subparagraph (C) of paragraph
2(5) of subdivision (c) of Section 34179.5.

3(b) The successor agency shall prepare a long-range property
4management plan that addresses the disposition and use of the real
5properties of the former redevelopment agency. The report shall
6be submitted to the oversight board and the Department of Finance
7for approval no later than six months following the issuance to the
8successor agency of the finding of completion.

9(c) The long-range property management plan shall do all of
10the following:

11(1) Include an inventory of all properties in the trust. The
12inventory shall consist of all of the following information:

13(A) The date of the acquisition of the property and the value of
14the property at that time, and an estimate of the current value of
15the property.

16(B) The purpose for which the property was acquired.

17(C) Parcel data, including address, lot size, and current zoning
18in the former agency redevelopment plan or specific, community,
19or general plan.

20(D) An estimate of the current value of the parcel including, if
21available, any appraisal information.

22(E) An estimate of any lease, rental, or any other revenues
23generated by the property, and a description of the contractual
24requirements for the disposition of those funds.

25(F) The history of environmental contamination, including
26designation as a brownfield site, any related environmental studies,
27and history of any remediation efforts.

28(G) A description of the property’s potential for transit-oriented
29development and the advancement of the planning objectives of
30the successor agency.

31(H) A brief history of previous development proposals and
32activity, including the rental or lease of property.

33(2) Address the use or disposition of all of the properties in the
34trust. Permissible uses include the retention of the property for
35governmental use pursuant to subdivision (a) of Section 34181,
36the retention of the property for future development, the sale of
37the property, or the use of the property to fulfill an enforceable
38obligation. The plan shall separately identify and list properties in
39the trust dedicated to governmental use purposes and properties
40retained for purposes of fulfilling an enforceable obligation. With
P22   1respect to the use or disposition of all other properties, all of the
2following shall apply:

3(A) (i) If the plan directs the use or liquidation of the property
4for a project identified in an approved redevelopment plan, the
5property shall transfer to the city, county, or city and county.

6(ii) For purposes of this subparagraph, the term “identified in
7an approved redevelopment plan” includes properties listed in a
8community plan, a five-year implementation plan, or other similar
9document.

10(B) If the plan directs the liquidation of the property or the use
11of revenues generated from the property, such as lease or parking
12revenues, for any purpose other than to fulfill an enforceable
13obligation or other than that specified in subparagraph (A), the
14proceeds from the sale shall be distributed as property tax to the
15taxing entities.

16(C) Property shall not be transferred to a successor agency, city,
17county, or city and county, unless the long-range property
18management plan has been approved by the oversight board and
19the Department of Finance.



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