BILL ANALYSIS Ó
AB 1963
Page 1
Date of Hearing: April 9, 2014
ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
K.H. "Katcho" Achadjian, Chair
AB 1963 (Atkins) - As Introduced: February 19, 2014
SUBJECT : Redevelopment.
SUMMARY : Deletes the January 1, 2015, date by which the Long
Range Property Management Plan (LRPMP) submitted by a successor
agency must be approved by the Department of Finance (DOF).
EXISTING LAW :
1)Dissolves redevelopment agencies and provides for the
designation of successor agencies.
2)Requires successor agencies to wind down the affairs of the
dissolved redevelopment agencies.
3)Defines "enforceable obligations."
4)Requires successor agencies make payments due to enforceable
obligations, as specified.
5)Requires each successor agency to have an oversight board of
seven members to approve certain actions of the successor
agency.
6)Requires DOF to review the actions of an oversight board.
7)Requires DOF to issue a finding of completion to the successor
agency, within five business days, once the following
conditions have been met and verified:
a) The successor agency has paid the full amount as
determined during the due diligence reviews and the county
auditor-controller has reported those payments to DOF;
b) The successor agency has paid the full amount as
determined during the July True-up process; or,
c) The successor agency has paid the full amount upon a
final judicial determination of the amounts due and
confirmation that those amounts have been paid by the
AB 1963
Page 2
county auditor-controller.
8)Allows the successor agency, upon receiving the finding of
completion, to:
a) Retain dissolved redevelopment agency assets;
b) Place loan agreements between the former redevelopment
agency and sponsoring entity on the Recognized Obligation
Payments Schedule, as an enforceable obligation, provided
the oversight board makes a finding that the loan was for
legitimate redevelopment purposes; and,
c) Utilize proceeds derived from bonds issued prior to
January 1, 2011, in a manner consistent with the original
bond covenants.
9)Requires, after DOF issues a finding of completion, the
successor agency to prepare a long-range property management
plan that addresses the disposition and use of the real
properties of the former redevelopment agency, and requires
the report to be submitted to the oversight board and DOF for
approval no later than six months following the issuance to
the successor agency of the finding of completion.
10) Specifies, if DOF has not approved a long-range property
management plan by January 1, 2015, that property of the
former redevelopment agency be disposed of according to
current law.
FISCAL EFFECT : This bill is keyed fiscal.
COMMENTS :
1)Purpose of this bill . This bill deletes the January 1, 2015,
date by which the LRPMP submitted by a successor agency must
be approved by DOF. This bill is author-sponsored.
2)RDA Dissolution . As part of the winding down of redevelopment
agencies, AB 1484 (Blumenfield), Chapter 26, Statutes of 2012,
made various statutory changes associated with the dissolution
of redevelopment agencies and addressed a number of
substantive issues related to administrative processes,
affordable housing activities, repayment of loans from
communities, use of existing bond proceeds and the disposition
or retention of former redevelopment agency assets.
AB 1963
Page 3
One of the provisions in AB 1484 allowed successor agencies
that have received a "finding of completion" from DOF to have
additional discretion regarding former agency real property
assets, loan repayments to the local government community that
formed the agency, and use of proceeds from bonds issued by
the former redevelopment agency. In order to receive the
finding of completion, the successor agency must undergo
specified due diligence reviews and make the requirement
payments to DOF.
Once the successor agency receives the finding of completion,
the agency gains access to three specific benefits listed in
statute - first, the ability to transfer former redevelopment
agency-owned properties to the city or county for
redevelopment upon completion of a
long-term management plan approved by DOF; second, the ability
to repay city loans made to the redevelopment agency; and
third, the ability to use unspent bond proceeds issued by
redevelopment agencies prior to December 31, 2010. Once a
finding of completion is issued, the successor agency must
prepare a long-range property management plan that addresses
the disposition and use of the real properties of the former
redevelopment agency. The report is required to be submitted
to the oversight board and DOF for approval no later than six
months following the issuance to the successor agency of the
finding of completion. Existing law requires DOF to approve a
long-range property management plan by January 1, 2015.
3)Author's statement . The author notes that "During the
February 25, 2014 hearing of the Assembly Budget Subcommittee
#6, DOF reported to Committee members that there are currently
230 long range property management plans that have been
submitted to DOF, 65 of which have been approved. This means
that 320 active successor agencies still need DOF approval by
the end of 2014. This submission and review process may take
longer than originally planned."
"Given the fact that the approval of the Plans are the key to
preventing widespread "fire sale" of properties that
Legislators were hoping to avoid through the passage of AB
1484, it is crucial that all successor agencies that are able
to receive a finding of completion are able to get an approved
plan."
AB 1963
Page 4
4)Arguments in support . Supporters argue that by removing the
stringent deadline, both successor agencies and DOF will
experience increased flexibility to review property assets and
the LRPMPs.
5)Arguments in opposition . None on file.
6)Committee amendments and urgency clause . The Committee may
wish to consider whether deleting the date in statute is
appropriate, and whether a better approach may be to push the
date out one year (to January 1, 2016) to allow for more time,
but still specify a firm ending date.
In addition to the committee amendments, the author would also
like to add in an urgency clause to the bill.
REGISTERED SUPPORT / OPPOSITION :
Support
BRIDGE Housing
California Infill Builders Federation
California Rural Legal Assistance Foundation
League of California Cities
Western Center on Law & Poverty
Opposition
None on file
Analysis Prepared by : Debbie Michel / L. GOV. / (916)
319-3958