Amended in Assembly May 20, 2013

Amended in Assembly May 6, 2013

Amended in Assembly April 24, 2013

Amended in Assembly April 4, 2013

California Legislature—2013–14 Regular Session

Assembly Bill No. 1080

Introduced by Assembly Member Alejo

(Principal coauthors: Assembly Members Mullin and V. Manuel Pérez)

(Coauthors: Assembly Members Brown, Ian Calderon, Chau, Perea, Stone, and Williams)

February 22, 2013

An act to add Part 1.87 (commencing with Section 34191.50) to Division 24 of the Health and Safety Code, relating to economic development.

LEGISLATIVE COUNSEL’S DIGEST

AB 1080, as amended, Alejo. Community Revitalization and Investment Authorities.

The Community Redevelopment Law authorizes the establishment of redevelopment agencies in communities to address the effects of blight, as defined. Existing law dissolved redevelopment agencies and community development agencies, as of February 1, 2012, and provides for the designation of successor agencies.

Existing law provides for various economic development programs that foster community sustainability and community and economic development initiatives throughout the state.

This bill would authorize certain public entities of a community revitalization and investment area, as described, to form a community revitalization plan within a community revitalization and investment authority (authority) to carry out the Community Redevelopment Law in a specified manner. The bill would require the authority to adopt a community revitalization plan for a community revitalization and investment area and authorize the authority to include in that plan a provision for the receipt of tax increment funds.

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.  

(a) Certain areas of the state are generally
characterized by buildings in which it is unsafe or unhealthy for
persons to live or work, conditions that make the viable use of
buildings or lots difficult, high business vacancies and lack of
employment opportunities, and inadequate public improvements,
water, or sewer utilities. It is the intent of the Legislature to create
a planning and financing tool to support the revitalization of these
communities.

(b) It is in the interest of the state to support the economic
revitalization of these communities through tax increment
financing.

(c) It is the intent of the Legislature to authorize the creation of
Community Revitalization and Investment Authorities to invest
tax increment revenue to relieve conditions of unemployment,
reduce high crime rates, repair deteriorated or inadequate
infrastructure, promote affordable housing, and improve conditions
leading to increased employment opportunities.

SEC. 2.  

Part 1.87 (commencing with Section 34191.50) is
added to Division 24 of the Health and Safety Code, to read:

 

PART 1.87.  Community Revitalization and
Investment Authorities

 

34191.50.  

As used in this part, the following terms have the
following meanings:

(a) “Authority” means the Community Revitalization and
Investment Authority created pursuant to this part.

(b) “Plan” means a community revitalization plan.

34191.51.  

(a) A community revitalization and investment
authority is a public body, corporate and politic, with jurisdiction
to carry out a community revitalization plan within a community
revitalization and investment area. The authority shall be deemed
to be an “agency” as defined in Section 33003 for purposes of
receiving tax increment revenues pursuant to Article XVI of
Section 16 of the California Constitution. The authority shall have
only those powers and duties specifically set forth in Section
34191.53.

(b) (1) An authority may be created in one of the following
ways:

(A) A city, county, or city and county may adopt a resolution
creating an authority. The composition of the governing board
shall be comprised as set forth in subdivision (c).

(B) A city, county, city and county, and special district, as
special district is defined in subdivision (m) of Section 95 of the
Revenue and Taxation Code, or any combination thereof, may
create an authority by entering into a joint powers agreement
pursuant to Chapter 5 (commencing with Section 6500) of Division
7 of Title 1 of the Government Code.

(2) A school entity, as defined in subdivision begin delete (n) end delete begin insert (f) end insert of Section
95 of the Revenue and Taxation Code, may not participate in an
authority created pursuant to this part.

(c) (1) The governing board of an authority created pursuant
to subparagraph (A) of paragraph (1) of subdivision (b) shall be
appointed by the legislative body of the city, county, or city and
county that created the authority and shall include three members
of the legislative body of the city, county, or city and county that
created the authority and two public members. The appointment
of the two public members shall be subject to the provisions of
Section 54974 of the Government Code. The two public members
shall live or work within the community revitalization and
investment area.

(2) The governing body of the authority created pursuant to
subparagraph (B) of paragraph (2) of subdivision (b) shall be
comprised of a majority of members from the legislative bodies
of the public agencies that created the authority and a minimum
of two public members who live or work within the community
revitalization and investment area. The majority of the board shall
appoint the public members to the governing body. The
appointment of the public members shall be subject to the
provisions of Section 54974 of the Government Code.

(d) An authority may carry out a community revitalization plan
within a community revitalization and investment area. Not less
than 80 percent of the land calculated by census tracts within the
area shall be characterized by both of the following conditions:

(1) An annual median household income that is less than 80
percent of the statewide annual median income.

(2) Three of the following four conditions:

(A) Unemployment that is at least 3 percent higher than
statewide median unemployment.

(B) Crime rates that are 5 percent higher than the statewide
median crime rate.

(C) Deteriorated or inadequate infrastructure such as streets,
sidewalks, water supply, sewer treatment or processing, and parks.

(D) Deteriorated commercial or residential structures.

(e) An authority may also carry out a community revitalization
plan within a community revitalization and investment area
established within a former military base that is principally
characterized by deteriorated or inadequate infrastructure and
structures. Notwithstanding subdivision (c), the governing board
of an authority established within a former military base shall
include a member of the military base closure commission as a
public member.

(f) The conditions described in subdivisions (d) and (e) shall
constitute blight within the meaning of the Community
Redevelopment Law. The authority shall not be required to make
a finding of blight or conduct a survey of blight within the area.

(g) An authority created pursuant to this part shall be a local
public agency subject to the Ralph M. Brown Act (Chapter 9
(commencing with Section 54950) of Part 1 of Division 2 of Title
5 of the Government Code), the California Public Records Act
(Chapter 3.5 (commencing with Section 6250) of Division 7 of
Title 1 of the Government Code), and the Political Reform Act of
1974 (Title 9 (commencing with Section 81000) of the Government
Code).

34191.53.  

An authority may do all of the following:

(a) Provide funding to rehabilitate, repair, upgrade, or construct
infrastructure.

(b) Provide funding for low- and moderate-income housing.

(c) Remedy or remove a release of hazardous substances
pursuant to the Polanco Redevelopment Act (Sections 33459 to
33459.8, inclusive).

(d) Provide for seismic retrofits of existing buildings pursuant
to Section 33420.1.

(e) Acquire and transfer real property in accordance with
paragraph (4) of subdivision (a) of Section 33333.2, Article 7
(commencing with Section 33390) of Part 1 of Division 24, and
Sections 33340, 33349, 33350, 33435, 33436, 33437, 33437.5,
33438, 33439, 33440, 33442, 33443, 33444, 33444.5, 33444.6,
and 33445.

The authority shall retain controls and establish restrictions or
covenants running with the land sold or leased for private use for
such periods of time and under such conditions as are provided in
the plan. The establishment of such controls is a public purpose
under the provisions of this part.

(f) Issue bonds pursuant to Article 5 (commencing with Section
33640) of Chapter 6 of Part 1 of Division 24.

(g) An authority may borrow money, receive grants, or accept
financial or other assistance or investment from the state or the
federal government or any other public agency or private lending
institution for any project or within its area of operation, and may
comply with any conditions of the loan or grant. An authority may
qualify for funding as a disadvantaged community as determined
by the California Environmental Protection Agency pursuant to
Section 79505.5 of the Water Code or as defined by Section
56033.5 of the Government Code. An authority may also enter
into an agreement with a qualified community development entity,
as defined by Section 45D(c) of the Internal Revenue Code, to
coordinate investments of funds derived from the New Markets
Tax Credit with those of the authority in instances where
coordination offers opportunities for greater efficiency of
investments to improve conditions described in subdivisions (d)
and (e) within the territorial jurisdiction of the authority.

(h) At any time after the authority is authorized to transact
business and exercise its powers, the legislative body or bodies of
the local government that created the authority may appropriate
the amounts the legislative body or bodies deem necessary for the
administrative expenses and overhead of the authority.

The money appropriated may be paid to the authority as a grant
to defray the expenses and overhead, or as a loan to be repaid upon
such terms and conditions as the legislative body may provide. If
appropriated as a loan, the property owners within the plan area
shall be made third-party beneficiaries of the repayment of the
loan. In addition to the common understanding and usual
interpretation of the term, “administrative expense” includes, but
is not limited to, expenses of planning and dissemination of
information.

(i) Adopt a community revitalization and investment plan
pursuant to Section 34191.55.

(j) Make loans or grants for owners or tenants to improve,
rehabilitate, or retrofit buildings or structures within the plan area.

(k) Except as specified in Section 33426.5, provide direct
assistance to businesses within the plan area in connection with
new or existing facilities for industrial or manufacturing uses.

34191.55.  

An authority shall adopt a community revitalization
and investment plan that may include a provision for the receipt
of tax increment funds generated within the area according to
Section 33670 provided the plan includes each of the following
elements:

(a) A statement of the principal goals and objectives of the plan.

(b) A description of the deteriorated or inadequate infrastructure
within the area and a program for construction of adequate
infrastructure or repair or upgrading of existing infrastructure.

(c) A program that complies with Sections 33334.2 and all
applicable provisions of the Community Redevelopment Law (Part
1 (commencing with Section 33300) of Division 24). An authority
that includes a provision for the receipt of tax increment revenues
pursuant to Section 33670 in its Community Revitalization and
Investment Plan shall dedicate at least 25 percent of allocated tax
increment revenues for affordable housing purposes. If the authority
makes a finding that combining funding received under this
program with other funding for the same purpose shall reduce
administrative costs or expedite the construction of affordable
housing, then an authority may transfer funding from the program
to the housing authority within the territorial jurisdiction of the
local jurisdiction that created the authority or to the entity that
received the housing assets of the former redevelopment agency
pursuant to Section 34176. Funding shall be spent within the
project area in which the funds were generated. Any recipient of
funds transferred pursuant to this subdivision shall comply with
all applicable provisions of the Community Redevelopment Law.

(d) A program to remedy or remove a release of hazardous
substances, if applicable.

(e) A program to provide funding for or otherwise facilitate the
economic revitalization of the area.

(f) A fiscal analysis setting forth the projected receipt of revenue
and projected expenses over a five-year planning horizon.

(g) The time limits imposed by Section 33333.2.

34191.57.  

(a) The authority shall consider adoption of the plan
at two public hearings that shall take place at least 30 days apart.
At the first public hearing, the authority shall hear all written and
oral comments but take no action. At the second public hearing,
the authority shall consider all written and oral comments and take
action to modify, adopt, or reject the plan.

(b) The draft plan shall be made available to the public and to
each property owner within the area at a meeting held at least 30
days prior to the notice given for the first public hearing. The
purposes of the meeting shall be to allow the staff of the authority
to present the draft plan, answer questions about the plan, and
consider comments about the plan.

(c) (1) Notice of the first public hearing shall be given by
publication not less than once a week for four successive weeks
in a newspaper of general circulation published in the county in
which the area lies and shall be mailed to each property owner
within the proposed area of the plan. Notice of the second public
hearing shall be given by publication not less than 10 days prior
to the date of the second public hearing in a newspaper of general
circulation published in the county in which the area lies and shall
be mailed to each property owner within the proposed area of the
plan. The notice shall do all of the following:

(A) Describe specifically the boundaries of the proposed area.

(B) Describe the purpose of the plan.

(C) State the day, hour, and place when and where any and all
persons having any comments on the proposed plan may appear
to provide written or oral comments to the authority.

(D) Notice of second public hearing shall include a summary
of the changes made to the plan as a result of the oral and written
testimony received at or before the public hearing and shall identify
a location accessible to the public where the plan to be presented
at the second public hearing can be reviewed.

(2) The authority may provide notice of the public hearings to
tenants of properties within the proposed area of the plan in a
manner of its choosing.

(d) At the hour set in the notice required by subdivision (a), the
authority shall consider all written and oral comments.

(e) The authority may adopt the plan at the conclusion of the
second public hearing by ordinance. The ordinance adopting the
plan shall be subject to referendum as prescribed by law for the
ordinances of the local jurisdiction that created the authority.

(f) The redevelopment plan referred to in Section 33670 shall
be the plan adopted pursuant to this section.

34191.59.  

(a) The plan adopted pursuant to Section 34191.57
may include a provision for the receipt of tax increment funds
according to Section 33670 in accordance with this section.

(b) The plan shall limit the taxes that are allocated to the
authority to those defined in Section 33670 collected for the benefit
of the taxing agencies that have adopted a resolution pursuant to
subdivision (d).

(c) The provision for the receipt of tax increment funds shall
become effective in the tax year that begins after the December 1
first following the adoption of the plan.

(d) At any time prior to or after adoption of the plan, any city,
county, or special district, other than a school entity as defined in
subdivision (n) of Section 95 of the Revenue and Taxation Code,
that receives ad valorem property taxes from property located
within an area may adopt a resolution directing the county
auditor-controller to allocate its share of tax increment funds within
the area covered by the plan according to Section 33670 to the
authority. The resolution adopted pursuant to this subdivision may
direct the county auditor-controller to allocate less than the full
amount of the tax increment, establish a maximum amount of time
in years that the allocation takes place, or limit the use of the funds
by the authority for specific purposes or programs. A resolution
adopted pursuant to this subdivision may be repealed and be of no
further effect by giving the county auditor-controller 60 days’
notice; provided, however, that the county auditor-controller shall
continue to allocate to the authority the taxing entity’s share of ad
valorem property taxes that have been pledged to the repayment
of debt issued by the authority until the debt has been fully repaid.

(e) Upon adoption of a plan that includes a provision for the
receipt of tax increment funds according to Section 33670, the
county auditor-controller shall allocate tax increment revenue to
the authority as follows:

(1) If the authority was formed pursuant to subparagraph (A)
of paragraph (1) of subdivision (b) of Section 34191.51, the
authority shall be allocated each year specified in the plan that
portion of the taxes levied for each city, county, city and county,
and special district that has adopted a resolution pursuant to
subdivision (d), in excess of the amount specified in subdivision
(a) of Section 33670.

(2) If the authority was formed pursuant to subparagraph (B)
of paragraph (1) of subdivision (b) of Section 34191.51, the
authority shall be allocated each year specified in the plan that
portion of the taxes levied for each jurisdiction as provided in the
joint powers agreement in excess of the amount specified in
subdivision (a) of Section 33670.

(f) If an area includes, in whole or in part, land formerly or
currently designated as a part of a redevelopment project area, as
defined in Section 33320.1, any plan adopted pursuant to this part
that includes a provision for the receipt of tax increment revenues
according to Section 33670 shall include a provision that tax
increment amounts collected and received by an authority are
subject and subordinate to any preexisting enforceable obligation
as that term is defined by Section 34171.

34191.61.  

(a) The authority shall review the plan at least
annually and make any modifications that are necessary and
appropriate in accordance with the provisions of this section, and
shall require the preparation of an annual independent financial
audit paid for from revenues of the authority.

(b) After holding a public hearing, an authority shall adopt a
report on or before June 30 of each year. Written copies of the
draft report shall be made available to the public 30 days prior to
the public hearing. The clerk of the legislative body shall post the
draft report in an easily identifiable and accessible location on the
authority’s Internet Web site and shall mail a written notice of the
availability of the draft report on the Web site to each owner of
land within the area covered by the plan and to each taxing entity
that has adopted a resolution pursuant to subdivision (d) of Section
34191.59.

(c) The annual report shall contain all of the following:

(1) A description of the projects undertaken in the fiscal year
and a comparison of the progress expected to be made on those
projects compared to the actual progress.

(2) A chart comparing the actual revenues and expenses,
including administrative costs, of the authority to the budgeted
revenues and expenses

(3) The amount of tax increment revenues received.

(4) The amount of revenues received for low- and
moderate-income housing

(5) The amount of revenues expended for low- and
moderate-income housing.

(6) An assessment of the status regarding completion of the
authority’s projects.

(7) The amount of revenues expended to assist private
businesses.

(d) If the authority fails to provide the annual report required
by subdivision (a), the authority shall not spend any funds received
pursuant to a resolution adopted pursuant to subdivision (d) of
Section 34191.59.

(e) Every 10 years, at the public hearing held pursuant to
subdivision (a), the authority shall conduct a protest proceeding
to consider whether the property owners within the plan area wish
to present oral or written protests against the authority. Notice of
this protest proceeding shall be included in the written notice of
the hearing on the annual report and shall inform the property
owner of his or her right to submit an oral or written protest before
the close of the public hearing. The protest may state that the
property owner objects to the authority taking action to implement
the plan on and after the effective date of the election described
in subdivision (f). The authority shall consider all written and oral
protests received prior to the close of the public hearing.

(f) If there is a majority protest, the authority shall call an
election of the property owners in the area covered by the plan,
and shall not initiate or authorize any new projects until the election
is held. A majority protest exists if protests have been filed
representing over 50 percent of the assessed value in the area.

(g) An election required pursuant to subdivision (f) shall be held
within 90 days of the public hearing and may be held by mail-in
ballot.

(h) If a majority of the property owners, weighted proportional
to the assessed value of their property, vote against the authority,
then the authority shall not take any further action to implement
the plan on and after the effective date of the election held pursuant
to subdivision (e). This section shall not prevent the authority from
taking any and all actions and appropriating and expending funds,
including, but not limited to, any and all payments on bonded or
contractual indebtedness, to carry out and complete projects for
which expenditures of any kind had been made prior to the effective
date of the election.