BILL NUMBER: AB 981	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Bloom

                        FEBRUARY 22, 2013

   An act to amend Sections 34176 and 34191.4 of the Health and
Safety Code, relating to community redevelopment.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 981, as introduced, Bloom. Redevelopment dissolution.
   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
provides for the transfer of housing assets and functions previously
performed by the dissolved redevelopment agency to one of several
specified public entities. Existing law authorizes that entity to
designate the use of, and commit, indebtedness obligation proceeds
that were issued for affordable housing purposes prior to January 1,
2011, and were backed by the Low and Moderate Income Housing Fund.
   This bill would instead authorize that entity to designate the use
of, and commit, indebtedness obligation proceeds that were issued
prior to June 28, 2011.
   Existing law authorizes the Department of Finance to issue a
finding of completion to a successor agency that completes a due
diligence review and meets other requirements. Upon receiving a
finding of completion, a successor agency is authorized to expend
excess bond proceeds derived from bonds issued on or before December
31, 2010, in a manner consistent with the original bond covenants.
   The bill would modify this authorization to include the
expenditure of excess bond proceeds derived from bonds issued on or
before June 28, 2011.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


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

  SECTION 1.  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 authority to perform housing functions previously
performed by a redevelopment agency, all rights, powers, duties,
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,
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) 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) If there is one local housing authority in the territorial
jurisdiction of the former redevelopment agency, to that local
housing authority.
   (3) 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 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)), 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   June 28, 2011  .
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.
   (h) Subdivisions (d) and (e) of Section 33334.3 and any other
applicable sections of the Community Redevelopment Law shall apply
for purposes of funding administrative and planning costs associated
with the implementation of this section. For this purpose, the term
"Low and Moderate Income Housing Fund" shall mean the "Low and
Moderate Income Housing Asset Fund." This section shall not be
construed to provide any stream of tax increment financing.
  SEC. 2.  Section 34191.4 of the Health and Safety Code is amended
to read:
   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   June 28, 2011  , 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.