Amended in Assembly August 6, 2013

Amended in Assembly June 10, 2013

Senate BillNo. 133


Introduced by Senator DeSaulnier

January 28, 2013


An act to amend Sections 33080, 33080.1, 33080.2, 33080.8, 33334.2, 33334.3, 33334.4, 33334.12, 33413, 33413.5, 33418, 33487, and 33490 of, to add Sections 33080.9, 33080.11, 33080.12, 33506, and 50464.5 to, to add Article 13 (commencing with Section 33460) to Chapter 4 of Part 1 of Division 24 of, and to repeal and add Section 33334.16 of, the Health and Safety Code, relating tobegin delete redevelopment .end deletebegin insert redevelopment.end insert

LEGISLATIVE COUNSEL’S DIGEST

SB 133, as amended, DeSaulnier. Redevelopment.

(1) The Community Redevelopment Law requires that each redevelopment agency submit the final report of any audit undertaken by any other local, state, or federal government entity to its legislative body and to additionally present an annual report to the legislative body containing specified information.

This bill would require the agency to include additional information relating to any major audit violations, as defined, any corrections to those violations, and planning and general administrative expenses of the Low and Moderate Income Housing Fund. The bill would authorize the Controller to conduct quality control reviews of independent financial audit reports and require the Controller to publish the results of his or her reviews. The bill would require the Controller to comply with certain notification and referral provisions in the event that the audit was conducted in a manner that may constitute unprofessional conduct.

The bill would require the Department of Housing and Community Development to conduct audits of redevelopment agencies to ensure compliance with the housing provisions of the Community Redevelopment Law. The bill would require each agency to annually deposit 0.05% of any tax increment deposited into the Low and Moderate Income Housing Fund into the Redevelopment Agency Accountability Fund, which the bill would create, to fund the department audits.

(2) Existing law requires that funds used for purposes of increasing, improving, and preserving a community’s supply of low- and moderate-income housing be held in a separate Low and Moderate Income Housing Fund until used. Existing law limits the planning and general administrative costs which may be paid with moneys from the Low and Moderate Income Housing Fund.

The bill would revise the costs and expenses which may be considered planning and general administrative costs for the purposes of being paid from the Low and Moderate Income Housing Fund. Except as provided, the bill would prohibit an agency from expending more than 15% of the tax increment deposited in the fund for planning and general administrative costs. The bill would impose other reporting and accountability measures on agencies with respect to the use of moneys in the fund for planning and administrative purposes. The bill would revise various provisions governing an action to compel agency compliance with specified provisions.

(3) Existing law requires, except as specified, each agency to expend over each 10-year period of the implementation plan, the moneys in the Low and Moderate Income Housing Fund to assist housing for persons of moderate, low, and very low income according to specified calculations.

The bill would instead require that at least 75% of the agency’s expenditures from the fund directly assist the new construction, acquisition and substantial rehabilitation, or preservation of housing for persons of extremely low, very low, low, or moderate income, with at least 25% of the expenditures required to be directed towards housing for persons of extremely low income and at least 50% of the expenditures required to be directed towards housing for persons of very low income.

(4) Existing law authorizes a redevelopment agency to merge project areas under its jurisdiction, and requires that at least 20% of specified taxes allocated to the redevelopment agency be deposited into the Low and Moderate Income Housing Fund to assist in the construction or rehabilitation of housing units for very low, and low- and moderate-income households, as specified. Existing law requires that if those funds have not been committed for that purpose within 6 years, the agency shall offer the funds to the housing authority that operates within the jurisdiction of the agency, as specified.

This bill would delete the requirement that the funds be offered to the housing authority.

(5) Existing law requires an agency that has failed to expend or encumber excess surplus in the Low and Moderate Income Housing Fund within one year to disburse the surplus voluntarily to the appropriate county housing authority or another public agency or to expend or encumber the surplus within 2 additional years.

The bill would delete these provisions. The bill would modify the definition of the term “excess surplus.”

(6) Existing law provides that whenever low- or moderate-income housing dwelling units are destroyed or removed from the low- and moderate-income housing market as part of a redevelopment that is subject to a written agreement with the agency, or where financial assistance has been provided by the agency, the agency is required to provide replacement housing within 4 years of the destruction or removal.

The bill would modify the agency’s obligation to provide replacement housing to low- or moderate-income persons and families and would impose new requirements on the agency with respect to the replacement housing plan and housing specifications. If a court has found that an agency has failed to comply with these provisions, the bill would require the court, at a minimum, to issue an order temporarily prohibiting the agency from issuing any debt for any project area, except as specified.

begin delete

(7) This bill would become operative contingent upon the enactment of SB 341 of the 2012-13 Regular Session.

end delete

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 33080 of the Health and Safety Code is
2amended to read:

3

33080.  

(a)  Every redevelopment agency shall file with the
4Controller within six months of the end of the agency’s fiscal year
P4    1a copy of the report required by Section 33080.1. In addition, each
2redevelopment agency shall file with the department a copy of the
3audit report required by subdivision (a) of Section 33080.1. The
4reports shall be made in the time, format, and manner prescribed
5by the Controller after consultation with the department.

6(b)  The redevelopment agency shall provide a copy of the report
7required by Section 33080.1, upon the written request of any person
8or any taxing agency. If the report does not include detailed
9information regarding administrative costs, professional services,
10or other expenditures required under Section 33080.1, the person
11or taxing agency may request, and the redevelopment agency shall
12provide, that information, upon payment of fees covering the direct
13costs of duplication.

14

SEC. 2.  

Section 33080.1 of the Health and Safety Code is
15amended to read:

16

33080.1.  

Every redevelopment agency shall submit the final
17report of any audit undertaken by any other local, state, or federal
18government entity to its legislative body within 30 days of receipt
19of that audit report. In addition, every redevelopment agency shall
20present an annual report to its legislative body at a public hearing
21and make the report available on its Internet Web site, or if the
22agency does not have an Internet Web site, on the community’s
23Internet Web site, within six months of the end of the agency’s
24fiscal year. The annual report shall contain all of the following:

25(a) (1) An independent financial audit report for the previous
26fiscal year. “Audit report” means an examination of, and opinion
27on, the financial statements of the agency which present the results
28of the operations and financial position of the agency, including
29all financial activities with moneys required to be held in a separate
30Low and Moderate Income Housing Fund pursuant to Section
3133334.3. This audit shall be conducted by a certified public
32accountant or public accountant, licensed by the State of California,
33in accordance with Government Auditing Standards adopted by
34the Comptroller General of the United States. The audit report
35shall meet, at a minimum, the audit guidelines prescribed by the
36Controller’s office pursuant to Section 33080.3 and also include
37a report on the agency’s compliance with laws, regulations, and
38administrative requirements governing activities of the agency,
39and a calculation of the excess surplus in the Low and Moderate
40Income Housing Fund as defined in subdivision (g) of Section
P5    133334.12. The audit report shall include a statement from the
2auditor as to whether or not the agency has any major audit
3violations, as defined in subdivision (j) of Section 33080.8.

4(2) A statement describing each corrective measure taken in
5that fiscal year to correct major audit violations identified during
6or prior to that fiscal year by the agency, its auditor, or the
7Department of Housing and Community Development.

8(3) However, the legislative body may elect to omit from
9inclusion in the audit report any distinct activity of the agency that
10is funded exclusively by the federal government and that is subject
11to audit by the federal government.

12(b) A fiscal statement for the previous fiscal year that contains
13the information required pursuant to Section 33080.5.

14(c) A description of the agency’s activities in the previous fiscal
15year affecting housing and displacement that contains the
16information required by Sections 33080.4 and 33080.7.

17(d) A description of the agency’s progress, including specific
18actions and expenditures, in alleviating blight in the previous fiscal
19year.

20(e) A list of, and status report on, all loans made by the
21redevelopment agency that are fifty thousand dollars ($50,000) or
22more, that in the previous fiscal year were in default, or not in
23compliance with the terms of the loan approved by the
24redevelopment agency.

25(f) A description of the total number and nature of the properties
26that the agency owns and those properties the agency has acquired
27in the previous fiscal year.

28(g) A list of the fiscal years that the agency expects each of the
29following time limits to expire:

30(1) The time limit for the commencement for eminent domain
31proceedings to acquire property within the project area.

32(2) The time limit for the establishment of loans, advances, and
33indebtedness to finance the redevelopment project.

34(3) The time limit for the effectiveness of the redevelopment
35plan.

36(4) The time limit to repay indebtedness with the proceeds of
37property taxes.

38(h) All of the following relating to the agency’s planning and
39general administrative expenses for the most recently completed
40fiscal year paid from the Low and Moderate Income Housing Fund:

P6    1(1) The amount and percentage of funds deposited into the Low
2and Moderate Income Housing Fund, exclusive of debt proceeds,
3expended for planning and general administrative costs described
4in subparagraphs (A), (C), (D), and (E) of paragraph (1) of
5subdivision (d) of Section 33334.3.

6(2) The amount and percentage of funds deposited into the Low
7and Moderate Income Housing Fund, exclusive of debt proceeds,
8expended for planning and general administrative costs described
9in subparagraph (B) of paragraph (1) of subdivision (d) of Section
1033334.3.

11(3) Consistent with the categories described in paragraph (1) of
12subdivision (d) of Section 33334.3, an itemization of each category
13of planning and general administration expenditures from the Low
14and Moderate Income Housing Fund and an explicit description
15of how the expenditures are necessary for the production,
16improvement, or preservation of low- and moderate-income
17housing.

18(4) A list of the title of any agency, city, or county employees
19for whom any portion of his or her salary, wages, benefits, or
20nonpersonnel costs is paid from the Low and Moderate Income
21Housing Fund, the nature of the employee’s activities eligible to
22be paid from the Low and Moderate Income Housing Fund, the
23percentage of time the employee spends on activities eligible to
24be paid from the Low and Moderate Income Housing Fund, the
25percentage of time the employee spends on activities that are
26directly and necessarily associated with a specific eligible housing
27development project or to the direct administration of programs,
28and the percentage of the employee’s salary, wages, benefits, and
29nonpersonnel costs paid from the Low and Moderate Income
30Housing Fund.

31(5) A list of any overhead costs that are paid directly or
32indirectly from the Low and Moderate Income Housing Fund, an
33 identification by title and department of any other employees with
34whom the overhead costs are shared, and a description of the total
35cost of the shared overhead costs.

36(i) A statement of the amount and percentage of funds deposited
37into the Low and Moderate Income Housing Fund, exclusive of
38debt proceeds, expended for planning and general administration
39in each of the preceding five fiscal years that begin after December
P7    131, 2011, broken down by the categories described in paragraph
2(1) of subdivision (d) of Section 33334.3.

3(j) A list of all real properties owned by the agency and
4purchased with funds from the Low and Moderate Income Housing
5Fund, the date of acquisition for each property, the agency’s
6intended purpose for each property, a statement of the amount, if
7any, of moneys from the Low and Moderate Income Housing Fund
8used to acquire the property, and a statement of the amount, if any,
9of moneys from the Low and Moderate Income Housing Fund
10used to maintain the property.

11(k) A list of the redevelopment projects that have caused a
12replacement obligation pursuant to subdivision (a) of Section
1333413, the respective number of units the agency is obligated to
14replace as a result of each project, and the location and status of
15the replacement units. This list shall cover each fiscal year from
16the agency’s last adopted implementation plan.

17(l) A separate list of the development projects that have caused
18a production obligation pursuant to subdivision (b) of Section
1933413, the respective number of units the agency is obligated to
20produce as a result of each project, and the location and status of
21the production units. This list shall cover each fiscal year from the
22agency’s last adopted implementation plan.

23(m) For each housing project for which the agency has
24designated funds, encumbered funds, or amended an existing
25designation or encumbrance of funds during the fiscal year, and
26where the agency’s financing constitutes more than 50 percent of
27the total cost of the low- and moderate-income housing units in
28the project, the project name, location, number of affordable units,
29affordability level, amount of agency financing, and the total cost
30of the low- and moderate-income units.

31(n) An agency that has deposited less than one hundred thousand
32dollars ($100,000) into its Low and Moderate Income Housing
33Fund during the fiscal year is not required to provide in its annual
34report the information described in subdivisions (h) to (m),
35inclusive.

36(o) Any other information that the agency believes useful to
37explain its programs, including, but not limited to, the number of
38jobs created and lost in the previous fiscal year as a result of its
39activities.

P8    1

SEC. 3.  

Section 33080.2 of the Health and Safety Code is
2amended to read:

3

33080.2.  

(a) When the agency presents the annual report to
4the legislative body pursuant to Section 33080.1, the agency shall
5inform the legislative body of any major audit violations of this
6part based on the independent financial audit report or an audit
7investigation conducted by the department. The agency shall inform
8the legislative body that the failure to correct a major audit
9violation of this part may result in the filing of an action by the
10Attorney General pursuant to Section 33080.8 in a form that
11indicates whether a referral to the Attorney General has been made.

12(b) At the time the agency presents the annual report to the
13legislative body pursuant to Section 33080.1, the legislative body
14shall adopt a separate written resolution making a finding, based
15on substantial evidence in the record, that the actual planning and
16general administrative expenses for the most recently completed
17fiscal year paid from the Low and Moderate Income Housing Fund
18did not exceed the limits established in subparagraphs (A) and (B)
19of paragraph (2) of subdivision (d) of Section 33334.3 or that the
20exception in subparagraph (C) of paragraph (2) of subdivision (d)
21of Section 33334.3 applies.

22(c) The legislative body shall review any report submitted
23pursuant to Section 33080.1 and take any action it deems
24appropriate on that report no later than the first meeting of the
25legislative body occurring more than 21 days from the receipt of
26the report.

27

SEC. 4.  

Section 33080.8 of the Health and Safety Code is
28amended to read:

29

33080.8.  

(a)  On or before April 1 of each year, the Controller
30shall compile a list of agencies that appear to have major audit
31violations as defined in this section, based on the independent
32financial audit reports filed with the Controller pursuant to Section
3333080, and make the list available on the Controller’s Internet
34Web site.

35(b)  On or before June 1 of each year, for each major audit
36violation of each agency identified pursuant to subdivision (a), the
37Controller shall determine if the agency has corrected the major
38audit violation. Before making this determination, the Controller
39shall consult with each affected agency and may consult with
40affected local community groups. In making this determination,
P9    1the Controller may request and shall receive the prompt assistance
2of public officials and public agencies, including, but not limited
3to, the affected agencies, counties, and cities. If the Controller
4determines that an agency has not corrected the major audit
5violation, the Controller shall send a list of those agencies, their
6major violations, all relevant documents, and the affidavits required
7pursuant to subdivision (d) to the Attorney General for action
8pursuant to this section.

9(c)  For each agency that the Controller refers to the Attorney
10General pursuant to subdivision (b), the Controller shall notify the
11agency and the legislative body that the agency was on the list sent
12to the Attorney General. The Controller’s notice shall inform the
13agency and the legislative body of the duties imposed by Section
1433080.2.

15(d)  Within 45 days of receiving the referral from the Controller
16pursuant to subdivision (b), the Attorney General shall determine
17whether to file an action to compel the agency’s compliance with
18this part. Any action filed pursuant to this section shall be
19commenced in the superior court of any county in which the
20Attorney General has an office. The time limit for the Attorney
21General to make this determination is directory and not mandatory.
22Any action shall be accompanied by an affidavit or affidavits, to
23be provided by the Controller with the referral, setting forth facts
24that demonstrate a likelihood of success on the merits of the claim
25that the agency has a major audit violation. The affidavit shall also
26certify that the agency and the legislative body were informed not
27less than 10 days prior to the date on which the action was filed.
28The agency shall file a response to any action filed by the Attorney
29General pursuant to this section within 15 days of service.

30(e)  (1)  On the earliest day that the business of the court will
31permit, but not later than 45 days after the filing of an action
32pursuant to this section, the court shall conduct a hearing to
33determine if good cause exists for believing that the agency has a
34major audit violation and has not corrected that violation.

35(2)  If the court determines that no good cause exists or that the
36agency had a major audit violation but corrected the major audit
37violation, the court shall dismiss the action.

38(3)  If the court determines that there is good cause for believing
39that the agency has a major audit violation and has not corrected
P10   1that major audit violation, the court shall immediately issue an
2order that prohibits the agency from doing any of the following:

3(A)  Encumbering any funds or expending any money derived
4from any source except to pay the obligations designated in
5subparagraphs (A) to (F), inclusive, of paragraph (1) of subdivision
6(e) of Section 33334.12, or to pay amounts for the operation and
7administration of the agency in accordance with the agency’s most
8recently adopted budget.

9(B)  Adopting a redevelopment plan.

10(C)  Amending a redevelopment plan except to correct the major
11audit violation that is the subject of the action.

12(D)  Issuing, selling, offering for sale, or delivering any bonds
13or any other evidence of indebtedness, except to increase, improve,
14preserve, or assist in the construction or rehabilitation of, housing
15units that will be occupied by and affordable to persons or families
16of extremely low, very low, low, or moderate income, in
17accordance with this part.

18(E)  Incurring any indebtedness, except to increase, improve,
19preserve, or assist in the construction or rehabilitation of, housing
20units that will be occupied by and affordable to persons or families
21of extremely low, very low, low, or moderate income, in
22accordance with this part.

23(F) Exercising the power of eminent domain.

24(f)  In a case that is subject to paragraph (3) of subdivision (e),
25the court shall also set a hearing on the matter within 60 days after
26issuance of the order.

27(g)  If, on the basis of that subsequent hearing, the court
28determines that the agency has a major audit violation and has not
29corrected that violation, the court shall order the agency to comply
30with this part within 30 days, and order the agency to forfeit to the
31state a monetary sanction commensurate with the violation. The
32sanction shall not be paid from the agency’s Low and Moderate
33Income Housing Fund or any other city, county, or agency special
34fund related to housing.

35(h)  The order issued by the court pursuant to paragraph (3) of
36subdivision (e) shall continue in effect until the court determines
37that the agency has corrected the major audit violation. If the court
38determines that the agency has corrected the major audit violation,
39the court may dissolve its order issued pursuant to paragraph (3)
40of subdivision (e) at any time.

P11   1(i)  An action filed pursuant to this section to compel an agency
2to comply with this part is in addition to any other remedy, and is
3not an exclusive means to compel compliance. This section shall
4not be construed to preclude an action to compel compliance with
5this article by any other interested party or resident of the
6jurisdiction.

7(j)  As used in this section, “major audit violation” means that,
8for the fiscal year in question, an agency did not:

9(1)  File an independent financial audit report that substantially
10conforms with the requirements of subdivision (a) of Section
1133080.1.

12(2)  File a fiscal statement that includes substantially all of the
13information required by Section 33080.5.

14(3)  Establish time limits, as required by Section 33333.6.

15(4)  Deposit all required tax increment revenues and all other
16funds required to be deposited into the fund directly into the Low
17and Moderate Income Housing Fund upon receipt, as required by
18Section 33334.3, 33334.6, 33487, or 33492.16.

19(5)  Establish a Low and Moderate Income Housing Fund, as
20required by subdivision (a) of Section 33334.3 or Section 33487.

21(6)  Accrue interest earned by the Low and Moderate Income
22Housing Fund to that fund, as required by subdivision (b) of
23Section 33334.3.

24(7)  Comply with subdivisions (d) and (e) of Section 33334.3,
25governing eligible expenditures for planning and general
26administration from the Low and Moderate Income Housing Fund
27and adopt the resolution required by subdivision (b) of Section
2833080.2.

29(8)  Initiate development of housing on real property acquired
30using moneys from the Low and Moderate Income Housing Fund
31or sell the property, as required by Section 33334.16.

32(9)  Adopt an implementation plan, as required by Section
3333490.

34

SEC. 5.  

Section 33080.9 is added to the Health and Safety
35Code
, to read:

36

33080.9.  

(a) (1) The department shall forward to the Attorney
37General and the Controller a copy of any audit or investigation of
38a redevelopment agency conducted pursuant to Section 50464.5.

39(2) On or before April 1 of each year, the department shall
40determine for all audits and investigations conducted the previous
P12   1year, including those audits and investigations conducted pursuant
2to Section 50464.5, whether an audit or investigation contains
3major audit violations, as defined in subdivision (j) of Section
433080.8. The department shall make the information available on
5its Internet Web site.

6(b) On or before June 1 of each year, the department shall
7determine for each major audit violation identified pursuant to
8subdivision (a) if the agency has corrected the major audit
9violation. Before making this determination, the department shall
10consult with each affected agency and may consult with affected
11local community groups. In making this determination, the
12department may request and shall receive the prompt assistance
13of public officials and public agencies, including, but not limited
14to, the affected agencies, counties, and cities. If the department
15determines an agency has not corrected the major audit violation,
16the department shall send a list of those agencies, their major audit
17violations, all relevant documentation, and the affidavits required
18pursuant to subdivision (e) to the Attorney General for any action
19pursuant to this section.

20(c) For each agency the department refers to the Attorney
21General pursuant to subdivision (b), the department shall notify
22the agency and its legislative body that the agency was on the list
23sent to the Attorney General. The notice shall inform the agency
24and its legislative body of the duties imposed pursuant to Section
2533080.2.

26(d) For each agency the department refers to the Attorney
27General pursuant to subdivision (b), the provisions of subdivisions
28(d) to (i), inclusive, of Section 33080.8 shall apply, except that
29references to the Controller in those subdivisions shall be deemed
30to refer to the department.

31(e) Nothing in this section shall be construed to permit the
32department to initiate or settle litigation, or to resolve any
33departmental audit or investigation in a manner contrary to law.

34

SEC. 6.  

Section 33080.11 is added to the Health and Safety
35Code
, to read:

36

33080.11.  

(a) The Controller may conduct quality control
37reviews of independent financial and compliance audit reports
38required by Section 33080.1 to the extent it is feasible to do so
39within existing budgetary resources. The Controller shall
40communicate the results of his or her reviews to the independent
P13   1auditor and the agency for which the audit was conducted, and
2shall review his or her findings with the independent auditor.

3(b) If the quality control review specified in subdivision (a)
4indicates the audit was conducted in a manner that may constitute
5unprofessional conduct, as defined in Section 5100 of the Business
6and Professions Code, including, but not limited to, gross
7negligence resulting in a material misstatement in the audit or
8failure to disclose noncompliant acts, the Controller shall refer the
9case to the California Board of Accountancy. If the board
10determines that the independent auditor conducted an audit in an
11unprofessional manner, the independent auditor is prohibited from
12performing any redevelopment agency audit for a period of three
13years, in addition to any other penalties the board may impose.

14

SEC. 7.  

Section 33080.12 is added to the Health and Safety
15Code
, to read:

16

33080.12.  

(a) (1) Whenever the Controller determines through
17two consecutive quality control reviews, pursuant to Section
1833080.11, that audits performed by an independent auditor pursuant
19to Section 33080.1 were not performed in substantial conformity
20with provisions of the audit and report guidelines adopted pursuant
21to Section 33080.3, the Controller shall notify in writing the
22independent auditor and the California Board of Accountancy.

23(2) If the independent auditor does not file an appeal in writing
24to the board within 30 calendar days after receipt of the Controller’s
25notification, the Controller’s determination under this section shall
26be final.

27(3) If an appeal is filed with the California Board of
28Accountancy, the board shall complete an investigation of the
29appeal. On the basis of the investigation, the board may do either
30of the following:

31(A) Find the Controller’s determination should not be upheld
32and has no effect.

33(B) Schedule the appeal for a hearing.

34(b) If the Controller’s determination pursuant to subdivision (a)
35becomes final, the independent auditor shall be ineligible to
36conduct audits pursuant to Section 33080.1 for a period of three
37years, or, in the event of an appeal, for any period and subject to
38conditions that may be ordered by the California Board of
39Accountancy. No later than March 1 following the date on which
40the Controller’s determination becomes final, the Controller shall
P14   1notify each agency of those independent auditors determined to
2be ineligible under this section or Section 33080.11. Agencies
3shall not use the audit services of an independent auditor ineligible
4under this section.

5(c) For the purposes of this section, “independent auditor” shall
6mean any person or firm entering into a contract to conduct an
7audit under Section 33080.1.

8(d) This section shall not preclude the California Board of
9Accountancy from taking any disciplinary action it deems
10appropriate under any other provisions of law.

11

SEC. 8.  

Section 33334.2 of the Health and Safety Code is
12amended to read:

13

33334.2.  

(a) Except as provided in subdivision (k), not less
14than 20 percent of all taxes that are allocated to the agency pursuant
15to Section 33670 shall be used by the agency for the purposes of
16increasing, improving, and preserving the community’s supply of
17low- and moderate-income housing available at affordable housing
18cost, as defined by Section 50052.5, to persons and families of
19low or moderate income, as defined in Section 50093, lower
20income households, as defined by Section 50079.5, very low
21income households, as defined in Section 50105, and extremely
22low income households, as defined by Section 50106, that is
23occupied by these persons and families, unless one of the following
24findings is made annually by resolution:

25(1) (A) That no need exists in the community to improve,
26increase, or preserve the supply of low- and moderate-income
27housing, including housing for very low income households in a
28manner that would benefit the project area and that this finding is
29consistent with the housing element of the community’s general
30plan required by Article 10.6 (commencing with Section 65580)
31of Chapter 3 of Division 1 of Title 7 of the Government Code,
32including its share of the regional housing needs of very low
33income households and persons and families of low or moderate
34income.

35(B) This finding shall only be made if the housing element of
36the community’s general plan demonstrates that the community
37does not have a need to improve, increase, or preserve the supply
38of low- and moderate-income housing available at affordable
39housing cost to persons and families of low or moderate income
40and to very low income households. This finding shall only be
P15   1made if it is consistent with the planning agency’s annual report
2to the legislative body on implementation of the housing element
3required by subdivision (b) of Section 65400 of the Government
4Code. No agency of a charter city shall make this finding unless
5the planning agency submits the report pursuant to subdivision (b)
6of Section 65400 of the Government Code. This finding shall not
7take effect until the agency has complied with subdivision (b) of
8this section.

9(2) (A) That some stated percentage less than 20 percent of the
10taxes that are allocated to the agency pursuant to Section 33670
11is sufficient to meet the housing needs of the community, including
12its share of the regional housing needs of persons and families of
13low- or moderate-income and very low income households, and
14that this finding is consistent with the housing element of the
15community’s general plan required by Article 10.6 (commencing
16with Section 65580) of Chapter 3 of Division 1 of Title 7 of the
17Government Code.

18(B) This finding shall only be made if the housing element of
19the community’s general plan demonstrates that a percentage of
20less than 20 percent will be sufficient to meet the community’s
21need to improve, increase, or preserve the supply of low- and
22moderate-income housing available at affordable housing cost to
23persons and families of low or moderate income and to very low
24income households. This finding shall only be made if it is
25consistent with the planning agency’s annual report to the
26legislative body on implementation of the housing element required
27by subdivision (b) of Section 65400 of the Government Code. No
28agency of a charter city shall make this finding unless the planning
29agency submits the report pursuant to subdivision (b) of Section
3065400 of the Government Code. This finding shall not take effect
31until the agency has complied with subdivision (b) of this section.

32(C) For purposes of making the findings specified in this
33paragraph and paragraph (1), the housing element of the general
34plan of a city, county, or city and county shall be current, and shall
35have been determined by the department pursuant to Section 65585
36to be in substantial compliance with Article 10.6 (commencing
37with Section 65580) of Chapter 3 of Division 1 of Title 7 of the
38Government Code.

39(3) (A) That the community is making a substantial effort to
40meet its existing and projected housing needs, including its share
P16   1of the regional housing needs, with respect to persons and families
2of low and moderate income, particularly very low income
3households, as identified in the housing element of the
4community’s general plan required by Article 10.6 (commencing
5with Section 65580) of Chapter 3 of Division 1 of Title 7 of the
6Government Code, and that this effort, consisting of direct financial
7contributions of local funds used to increase and improve the
8supply of housing affordable to, and occupied by, persons and
9families of low or moderate income and very low income
10households is equivalent in impact to the funds otherwise required
11to be set aside pursuant to this section. In addition to any other
12local funds, these direct financial contributions may include federal
13or state grants paid directly to a community and that the community
14has the discretion of using for the purposes for which moneys in
15the Low and Moderate Income Housing Fund may be used. The
16legislative body shall consider the need that can be reasonably
17foreseen because of displacement of persons and families of low
18or moderate income or very low income households from within,
19or adjacent to, the project area, because of increased employment
20opportunities, or because of any other direct or indirect result of
21implementation of the redevelopment plan. No finding under this
22subdivision may be made until the community has provided or
23ensured the availability of replacement dwelling units as defined
24in Section 33411.2 and until it has complied with Article 9
25(commencing with Section 33410).

26(B) In making the determination that other financial
27contributions are equivalent in impact pursuant to this subdivision,
28the agency shall include only those financial contributions that are
29directly related to programs or activities authorized under
30subdivision (e).

31(C) The authority for making the finding specified in this
32paragraph shall expire on June 30, 1993, except that the expiration
33shall not be deemed to impair contractual obligations to
34bondholders or private entities incurred prior to May 1, 1991, and
35made in reliance on the provisions of this paragraph. Agencies that
36make this finding after June 30, 1993, shall show evidence that
37the agency entered into the specific contractual obligation with
38the specific intention of making a finding under this paragraph in
39order to provide sufficient revenues to pay off the indebtedness.

P17   1(b) Within 10 days following the making of a finding under
2either paragraph (1) or (2) of subdivision (a), the agency shall send
3the Department of Housing and Community Development a copy
4of the finding, including the factual information supporting the
5finding and other factual information in the housing element that
6demonstrates that either (1) the community does not need to
7increase, improve, or preserve the supply of housing for low- and
8moderate-income households, including very low income
9households, or (2) a percentage less than 20 percent will be
10sufficient to meet the community’s need to improve, increase, and
11preserve the supply of housing for low- and moderate-income
12households, including very low income households. Within 10
13days following the making of a finding under paragraph (3) of
14subdivision (a), the agency shall send the Department of Housing
15and Community Development a copy of the finding, including the
16factual information supporting the finding that the community is
17making a substantial effort to meet its existing and projected
18housing needs. Agencies that make this finding after June 30, 1993,
19shall also submit evidence to the department of its contractual
20obligations with bondholders or private entities incurred prior to
21May 1, 1991, and made in reliance on this finding.

22(c) In any litigation to challenge or attack a finding made under
23paragraph (1), (2), or (3) of subdivision (a), the burden shall be
24upon the agency to establish that the finding is supported by
25substantial evidence in light of the entire record before the agency.
26If an agency is determined by a court to have knowingly
27misrepresented any material facts regarding the community’s share
28of its regional housing need for low- and moderate-income housing,
29including very low income households, or the community’s
30production record in meeting its share of the regional housing need
31pursuant to the report required by subdivision (b) of Section 65400
32of the Government Code, the agency shall be liable for all court
33costs and plaintiff’s attorney’s fees, and shall be required to allocate
34not less than 25 percent of the agency’s tax increment revenues to
35its Low and Moderate Income Housing Fund in each year
36thereafter.

37(d) Nothing in this section shall be construed as relieving any
38other public entity or entity with the power of eminent domain of
39any legal obligations for replacement or relocation housing arising
40out of its activities.

P18   1(e) In carrying out the purposes of this section, the agency may
2exercise any or all of its powers for the construction, rehabilitation,
3or preservation of affordable housing for extremely low, very low,
4low-, and moderate-income persons or families, including the
5following:

6(1) Acquire real property or building sites subject to Section
733334.16.

8(2) (A) Improve real property or building sites with onsite or
9offsite improvements, but only if both (i) the improvements are
10part of the new construction or rehabilitation of affordable housing
11units for low- or moderate-income persons that are directly
12benefited by the improvements, and are a reasonable and
13fundamental component of the housing units, and (ii) the agency
14requires that the units remain available at affordable housing cost
15to, and occupied by, persons and families of extremely low, very
16low, low, or moderate income for the same time period and in the
17same manner as provided in subdivision (c) and paragraph (2) of
18subdivision (f) of Section 33334.3.

19(B) If the newly constructed or rehabilitated housing units are
20part of a larger project and the agency improves or pays for onsite
21or offsite improvements pursuant to the authority in this
22subdivision, the agency shall pay only a portion of the total cost
23of the onsite or offsite improvement. The maximum percentage
24of the total cost of the improvement paid for by the agency shall
25be determined by dividing the number of housing units that are
26affordable to low- or moderate-income persons by the total number
27of housing units, if the project is a housing project, or by dividing
28the cost of the affordable housing units by the total cost of the
29project, if the project is not a housing project.

30(3) Donate real property to private or public persons or entities.

31(4) Finance insurance premiums pursuant to Section 33136.

32(5) Construct buildings or structures.

33(6) Acquire buildings or structures.

34(7) Rehabilitate buildings or structures.

35(8) Provide subsidies to, or for the benefit of, extremely low
36income households, as defined by Section 50106, very low income
37households, as defined by Section 50105, lower income
38households, as defined by Section 50079.5, or persons and families
39of low or moderate income, as defined by Section 50093, to the
40extent those households cannot obtain housing at affordable costs
P19   1on the open market. Housing units available on the open market
2are those units developed without direct government subsidies.

3(9) Develop plans, pay principal and interest on bonds, loans,
4advances, or other indebtedness, or pay financing or carrying
5charges.

6(10) Maintain the community’s supply of mobilehomes.

7(11) Preserve the availability to lower income households of
8affordable housing units in housing developments that are assisted
9or subsidized by public entities and that are threatened with
10imminent conversion to market rates.

11(f) The agency may use these funds to meet, in whole or in part,
12the replacement housing provisions in Section 33413. However,
13nothing in this section shall be construed as limiting in any way
14the requirements of that section.

15(g) (1) The agency may use these funds inside or outside the
16project area. The agency may only use these funds outside the
17project area upon a resolution of the agency and the legislative
18body that the use will be of benefit to the project. The
19determination by the agency and the legislative body shall be final
20and conclusive as to the issue of benefit to the project area. The
21Legislature finds and declares that the provision of replacement
22housing pursuant to Section 33413 is always of benefit to a project.
23Unless the legislative body finds, before the redevelopment plan
24is adopted, that the provision of low- and moderate-income housing
25outside the project area will be of benefit to the project, the project
26area shall include property suitable for low- and moderate-income
27housing.

28(2) (A) The Contra Costa County Redevelopment Agency may
29use these funds anywhere within the unincorporated territory, or
30within the incorporated limits of the City of Walnut Creek on sites
31contiguous to the Pleasant Hill BART Station Area Redevelopment
32Project area. The agency may only use these funds outside the
33 project area upon a resolution of the agency and board of
34supervisors determining that the use will be of benefit to the project
35area. In addition, the agency may use these funds within the
36incorporated limits of the City of Walnut Creek only if the agency
37and the board of supervisors find all of the following:

38(i) Both the County of Contra Costa and the City of Walnut
39Creek have adopted and are implementing complete and current
40housing elements of their general plans that the Department of
P20   1Housing and Community Development has determined to be in
2compliance with the requirements of Article 10.6 (commencing
3with Section 65580) of Chapter 3 of Division 1 of Title 7 of the
4Government Code.

5(ii) The development to be funded shall not result in any
6residential displacement from the site where the development is
7to be built.

8(iii) The development to be funded shall not be constructed in
9an area that currently has more than 50 percent of its population
10comprised of racial minorities or low-income families.

11(iv) The development to be funded shall allow construction of
12affordable housing closer to a rapid transit station than could be
13constructed in the unincorporated territory outside the Pleasant
14Hill BART Station Area Redevelopment Project.

15(B) If the agency uses these funds within the incorporated limits
16of the City of Walnut Creek, all of the following requirements
17shall apply:

18(i) The funds shall be used only for the acquisition of land for,
19and the design and construction of, the development of housing
20containing units affordable to, and occupied by, low- and
21moderate-income persons.

22(ii) If less than all the units in the development are affordable
23to, and occupied by, low- or moderate-income persons, any agency
24assistance shall not exceed the amount needed to make the housing
25affordable to, and occupied by, low- or moderate-income persons.

26(iii) The units in the development that are affordable to, and
27occupied by, low- or moderate-income persons shall remain
28affordable for a period of at least 55 years.

29(iv) The agency and the City of Walnut Creek shall determine,
30if applicable, whether Article XXXIV of the California Constitution
31permits the development.

32(h) The Legislature finds and declares that expenditures or
33obligations incurred by the agency pursuant to this section shall
34constitute an indebtedness of the project.

35(i) This section shall only apply to taxes allocated to a
36redevelopment agency for which a final redevelopment plan is
37adopted on or after January 1, 1977, or for any area that is added
38to a project by an amendment to a redevelopment plan, which
39amendment is adopted on or after the effective date of this section.
40An agency may, by resolution, elect to make all or part of the
P21   1requirements of this section applicable to any redevelopment
2project for which a redevelopment plan was adopted prior to
3January 1, 1977, subject to any indebtedness incurred prior to the
4election.

5(j) (1) (A) An action to compel compliance with the
6requirement of Section 33334.3 to deposit not less than 20 percent
7of all taxes that are allocated to the agency pursuant to Section
833670 or other revenue in the Low and Moderate Income Housing
9Fund shall be commenced within 10 years of the alleged violation.
10A cause of action for a violation accrues on the last day of the
11fiscal year in which the funds were required to be deposited in the
12Low and Moderate Income Housing Fund.

13(B) An action to compel compliance with the requirement of
14this section or Section 33334.6 that money deposited in the Low
15and Moderate Income Housing Fund be used by the agency for
16purposes of increasing, improving, and preserving the community’s
17supply of low- and moderate-income housing available at
18affordable housing cost shall be commenced within 10 years of
19the alleged violation. A cause of action for a violation accrues on
20the date of the actual expenditure of the funds.

21(C) An agency found to have deposited less into the Low and
22Moderate Income Housing Fund than mandated by Section 33334.3
23or to have spent money from the Low and Moderate Income
24Housing Fund for purposes other than increasing, improving, and
25preserving the community’s supply of low- and moderate-income
26housing, as mandated, by this section or Section 33334.6 shall
27repay the funds with interest, plus an additional 50 percent of that
28amount and interest, in one lump sum pursuant to Section 970.4
29or 970.5 of the Government Code or may do either of the
30following:

31(i) Petition the court under Section 970.6 for repayment in
32installments.

33(ii) Repay the portion of the judgment due to the Low and
34Moderate Income Housing Fund in equal installments over a period
35of five years following the judgment.

36(D) An action to compel compliance with the requirements of
37Section 33487 shall be commenced within 10 years of the alleged
38violation. A cause of action accrues on the last day of the fiscal
39year in which the funds were required to be deposited in the Low
40and Moderate Income Housing Fund or the date of the actual
P22   1expenditure of the funds, as applicable. In the event the deposits
2to the Low and Moderate Income Housing Fund are less than the
3amounts required pursuant to Section 33487, or the expenditures
4from the Low and Moderate Income Housing Fund are not
5consistent with Section 33487, the repayment required by
6subparagraph (C) is applicable. This subparagraph applies to
7actions filed on or after January 1, 2012.

8(2) Repayment shall not be made from the funds required to be
9set aside or used for low- and moderate-income housing pursuant
10to this part, or any other funds designated for affordable housing.

11(3) Notwithstanding clauses (i) and (ii) of subparagraph (C) or
12subparagraph (D) of paragraph (1), all costs, including reasonable
13attorney’s fees if included in the judgment, are due and shall be
14 paid upon entry of judgment or order.

15(4) Except as otherwise provided in this subdivision, Chapter
162 (commencing with Section 970) of Part 5 of Division 3.6 of Title
171 of the Government Code for the enforcement of a judgment
18against a local public entity applies to a judgment against a local
19public entity that violates this section.

20(5) Except as provided in subparagraph (D) of paragraph (1),
21this subdivision applies to actions filed on and after January 1,
222006.

23(6) The limitations period specified in subparagraphs (A), (B),
24and (D) of paragraph (1) does not apply to a cause of action brought
25pursuant to Chapter 9 (commencing with Section 860) of Title 10
26of Part 2 of the Code of Civil Procedure.

27(k) (1) From July 1, 2009, to June 30, 2010, inclusive, an agency
28may suspend all or part of its required allocation to the Low and
29Moderate Income Housing Fund from taxes that are allocated to
30that agency pursuant to Section 33670.

31(2) An agency that suspends revenue pursuant to paragraph (1)
32shall pay back to its low- and moderate-income housing fund the
33amount of revenue that was suspended in the 2009-10 fiscal year
34pursuant to this subdivision from July 1, 2010, to June 30, 2015,
35inclusive.

36(3) An agency that suspends revenue pursuant to paragraph (1)
37and fails to repay or have repaid on its behalf the amount of revenue
38suspended pursuant to paragraph (2) shall, commencing July 1,
392015, be required to allocate an additional 5 percent of all taxes
40that are allocated to that agency pursuant to Section 33670 for low-
P23   1and moderate-income housing for the remainder of the time that
2the agency receives allocations of tax revenue pursuant to Section
333670.

4(4) An agency that fails to pay or have paid on its behalf the
5full amount calculated pursuant to subparagraph (J) of paragraph
6(2) of subdivision (a) of Section 33690, or subparagraph (J) of
7paragraph (2) of subdivision (a) of Section 33690.5, as the case
8may be, shall, commencing July 1, 2010, or July 1, 2011, as
9applicable, be required to allocate an additional 5 percent of all
10taxes that are allocated to that agency pursuant to Section 33670
11for low- and moderate-income housing for the remainder of the
12time that the agency receives allocations of tax revenue pursuant
13to Section 33670.

14

SEC. 9.  

Section 33334.3 of the Health and Safety Code is
15amended to read:

16

33334.3.  

(a) The funds that are required by Section 33334.2
17or 33334.6 to be used for the purposes of increasing, improving,
18and preserving the community’s supply of low- and
19moderate-income housing shall be held in a separate Low and
20Moderate Income Housing Fund until used.

21(b) Any interest earned by the Low and Moderate Income
22Housing Fund and any repayments or other income to the agency
23for loans, advances, or grants, of any kind from the Low and
24Moderate Income Housing Fund, shall accrue to and be deposited
25in, the fund and may only be used in the manner prescribed for the
26Low and Moderate Income Housing Fund.

27(c) The moneys in the Low and Moderate Income Housing Fund
28shall be used to increase, improve, and preserve the supply of low-
29and moderate-income housing within the territorial jurisdiction of
30the agency.

31(d) (1) It is the intent of the Legislature that the Low and
32Moderate Income Housing Fund be used to the maximum extent
33possible to defray the actual cost of producing, improving, or
34preserving low- and moderate-income housing and to restrict the
35use of Low and Moderate Income Housing Fund moneys for
36planning and general administrative costs to those which are
37necessary for and directly related to lawful use of the Low and
38Moderate Income Housing Fund. All of the following categories
39of costs paid from the Low and Moderate Income Housing Fund
P24   1shall be considered planning and general administrative costs that
2are subject to the restrictions set forth in paragraph (2):

3(A) Employee compensation costs, including salaries, wages,
4and benefits, and related nonpersonnel costs, including, but not
5limited to, travel, training, publications, and conferences, paid to
6or on behalf of any agency, city, or county employee whose duties
7include activities authorized under subdivision (e) of Section
833334.2, except for those activities that are necessary for and
9directly related to the development of a specific eligible housing
10development project or the deliverance of eligible programs serving
11low- and moderate-income households. If the employee spends
12any time on matters other than those authorized under subdivision
13(e) of Section 33334.2, Low and Moderate Income Housing Fund
14moneys may only be used to pay for employee compensation and
15related nonpersonnel costs in proportion to the actual time that the
16employee spends on activities authorized under subdivision (e) of
17Section 33334.2.

18(B) Employee compensation costs, including salaries, wages,
19and benefits, and related nonpersonnel costs, including, but not
20limited to, travel, training, publications, and conferences, paid to
21or on behalf of any agency, city, or county employee for activities
22authorized under subdivision (e) of Section 33334.2 that are
23necessary for and directly related to the development of a specific
24eligible housing development project or the deliverance of eligible
25programs that serve low- and moderate-income households. Those
26activities shall include negotiation and project management of
27disposition and development agreements, land leases, loan
28agreements, and similar affordable housing agreements;
29redevelopment agency work on entitlements for eligible affordable
30housing developments; loan processing and servicing; inspection
31of new and rehabilitated units; construction monitoring of an
32eligible housing development; and monitoring of affordable
33housing units. If the employee spends any time on matters other
34than those authorized under subdivision (e) of Section 33334.2,
35Low and Moderate Income Housing Fund moneys may only be
36used to pay for employee compensation and related nonpersonnel
37costs in proportion to the actual time that the employee spends on
38activities authorized under subdivision (e) of Section 33334.2.

39(C) Employee compensation costs, including salaries, wages,
40and benefits, paid to or on behalf of any agency, city, or county
P25   1employee who supervises or manages the work of an employee or
2employees specified in subparagraph (A) or (B) or who provides
3general administrative services, including, but not limited to,
4finance, legal, human resources, information technology, and other
5administrative services, that indirectly support activities authorized
6under subdivision (e) of Section 33334.2 and nonpersonnel costs,
7including, but not limited to, travel, training, publications, and
8conferences, for those employees that are directly related to those
9activities. Employee compensation costs shall (i) be justified by
10an independent cost allocation study no more than six years old,
11and (ii) not represent a greater proportion of the employee’s total
12compensation than the proportion of employees working directly
13and exclusively on activities authorized under subdivision (e) of
14Section 33334.2 in comparison to the total number of employees
15supervised, managed, or indirectly supported by that employee.

16(D) Overhead costs, including, but not limited to, rent or
17mortgage payments, equipment, and office supplies. If the overhead
18costs are shared with departments or employees whose duties
19include activities other than those authorized under subdivision
20(e) of Section 33334.2, the proportion of the overhead costs paid
21from the Low and Moderate Income Housing Fund shall not exceed
22the proportion of employees working directly and exclusively on
23activities authorized under subdivision (e) of Section 33334.2
24represented in comparison to the total number of employees sharing
25the space, equipment, or office supplies.

26(E) The total value of any contracts for agency planning or
27administrative services that are related to activities authorized
28under subdivision (e) of Section 33334.2.

29(F) Any other costs for planning and general administrative
30activities that are related to activities authorized under subdivision
31(e) of Section 33334.2.

32(2) (A) Except as provided in subparagraph (C), an agency in
33any fiscal year shall not expend more than 10 percent of the money
34deposited into the Low and Moderate Income Housing Fund,
35exclusive of debt proceeds, for planning and general administrative
36costs described in subparagraphs (A), (C), (D), (E), and (F) of
37paragraph (1).

38(B) Except as provided in subparagraph (C), an agency in any
39fiscal year shall not expend more than 10 percent of the money
40deposited into the Low and Moderate Income Housing Fund,
P26   1exclusive of debt proceeds, for planning and general administrative
2costs described in subparagraph (B) of paragraph (1), except that
3an agency may additionally expend for these purposes any
4difference between the cap described in subparagraph (A) and
5actual expenditures for those planning and general administrative
6costs.

7(C) Subparagraphs (A) and (B) shall not apply to a project
8area-specific Low and Moderate Income Housing Fund during the
9first five fiscal years after adoption of that specific project area.
10Subparagraphs (A) and (B) shall apply to a new or amended project
11area if tax increment for that new or amended project area is
12deposited into an aggregate Low and Moderate Income Housing
13Fund covering more than one project area.

14(3) In a challenge related to the proportionality of costs, as
15required by subparagraphs (A), (B), (C), and (D) of paragraph (1),
16the agency shall bear the burden of proof to demonstrate that the
17costs are proportionate. In a challenge related to compliance with
18the requirements of paragraph (2), the agency shall bear the burden
19of proof to demonstrate that costs are appropriately allocated to
20subparagraph (B) of paragraph (1).

21(e) (1) Notwithstanding paragraph (1) of subdivision (d), the
22agency shall not expend moneys from the Low and Moderate
23Income Housing Fund for any of the following purposes:

24(A) Land use planning or related activities of a planning
25department, including development or revision of the general plan
26housing element, except for the payment of normal project-related
27planning fees applicable to all similar development projects. This
28limitation shall not preclude an agency from expending moneys
29from the Low and Moderate Income Housing Fund toward the
30cost of agency staff participation in the development of the general
31plan housing element provided that those costs are counted towards
32the cap described in subparagraph (A) of paragraph (2) of
33subdivision (d).

34(B) Lobbying. The Legislature finds and declares that this
35subparagraph is declaratory of existing law.

36(C) Administration of nonredevelopment activities unrelated to
37activities allowed pursuant to this section, and Sections 33334.2,
3833334.6, and 33487.

39(2) An agency may expend up to 2 percent of the moneys
40deposited into the Low and Moderate Income Housing Fund,
P27   1exclusive of debt proceeds, for code enforcement activities within
2a project area that improve the housing opportunities of low- or
3moderate-income households. However, if code enforcement
4activities result, directly or indirectly, in the displacement of tenants
5or the removal from the market of units affordable to or occupied
6by low- or moderate-income households, the agency shall be
7subject to the relocation and replacement obligations imposed by
8this part and the requirements of Chapter 16 (commencing with
9Section 7260) of Division 7 of Title 1 of the Government Code,
10except that Section 7265.3 of the Government Code shall not apply.

11(f) (1) The requirements of this subdivision apply to all new or
12substantially rehabilitated housing units developed or otherwise
13assisted with moneys from the Low and Moderate Income Housing
14Fund, pursuant to an agreement approved by an agency on or after
15January 1, 1988. Except to the extent that a longer period of time
16may be required by other provisions of law, the agency shall require
17that housing units subject to this subdivision shall remain available
18 at affordable housing cost to, and occupied by, persons and families
19of low or moderate income and very low income and extremely
20low income households for the longest feasible time, but for not
21less than the following periods of time:

22(A) Fifty-five years for rental units. However, the agency may
23replace rental units with equally affordable and comparable rental
24units in another location within the community if (i) the
25replacement units are available for occupancy prior to the
26displacement of any persons and families of low or moderate
27income residing in the units to be replaced and (ii) the comparable
28replacement units are not developed with moneys from the Low
29and Moderate Income Housing Fund.

30(B) Forty-five years for owner-occupied units. However, the
31agency may permit sales of owner-occupied units prior to the
32expiration of the 45-year period for a price in excess of that
33 otherwise permitted under this subdivision pursuant to an adopted
34program which protects the agency’s investment of moneys from
35the Low and Moderate Income Housing Fund, including, but not
36limited to, an equity sharing program which establishes a schedule
37of equity sharing that permits retention by the seller of a portion
38of those excess proceeds based on the length of occupancy. The
39remainder of the excess proceeds of the sale shall be allocated to
40the agency and deposited in the Low and Moderate Income
P28   1Housing Fund. Only the units originally assisted by the agency
2shall be counted towards the agency’s obligations under Section
333413.

4(C) Fifteen years for mutual self-help housing units that are
5occupied by and affordable to very low and low-income
6households. However, the agency may permit sales of mutual
7self-help housing units prior to expiration of the 15-year period
8for a price in excess of that otherwise permitted under this
9subdivision pursuant to an adopted program that (i) protects the
10agency’s investment of moneys from the Low and Moderate
11Income Housing Fund, including, but not limited to, an equity
12sharing program that establishes a schedule of equity sharing that
13permits retention by the seller of a portion of those excess proceeds
14based on the length of occupancy; and (ii) ensures through a
15recorded regulatory agreement, deed of trust, or similar recorded
16instrument that if a mutual self-help housing unit is sold at any
17time after expiration of the 15-year period and prior to 45 years
18after the date of recording of the covenants or restrictions required
19pursuant to paragraph (2), the agency recovers, at a minimum, its
20original principal from the Low and Moderate Income Housing
21Fund from the proceeds of the sale and deposits those funds into
22the Low and Moderate Income Housing Fund. The remainder of
23the excess proceeds of the sale not retained by the seller shall be
24allocated to the agency and deposited in the Low and Moderate
25Income Housing Fund. For the purposes of this subparagraph,
26“mutual self-help housing unit” means an owner-occupied housing
27unit for which persons and families of very low and low income
28contribute no fewer than 500 hours of their own labor in individual
29or group efforts to provide a decent, safe, and sanitary ownership
30housing unit for themselves, their families, and others authorized
31to occupy that unit. Nothing in this subparagraph precludes the
32agency and the developer of the mutual self-help housing units
33from agreeing to 45-year deed restrictions.

34(2) If land on which those dwelling units are located is deleted
35from the project area, the agency shall continue to require that
36those units remain affordable as specified in this subdivision.

37(3) The agency shall require the recording in the office of the
38county recorder of the following documents:

39(A) The covenants or restrictions implementing this subdivision
40for each parcel or unit of real property subject to this subdivision.
P29   1The agency shall obtain and maintain a copy of the recorded
2covenants or restrictions for not less than the life of the covenant
3or restriction.

4(B) For all new or substantially rehabilitated units developed
5or otherwise assisted with moneys from the Low and Moderate
6Income Housing Fund on or after January 1, 2008, a separate
7document called “Notice of Affordability Restrictions on Transfer
8of Property,” set forth in 14-point type or larger. This document
9shall contain all of the following information:

10(i) A recitation of the affordability covenants or restrictions. If
11the document recorded under this subparagraph is recorded
12concurrently with the covenants or restrictions recorded under
13 subparagraph (A), the recitation of the affordability covenants or
14restrictions shall also reference the concurrently recorded
15document. If the document recorded under this subparagraph is
16not recorded concurrently with the covenants or restrictions
17recorded under subparagraph (A), the recitation of the affordability
18covenants or restrictions shall also reference the recorder’s
19identification number of the document recorded under subparagraph
20(A).

21(ii) The date the covenants or restrictions expire.

22(iii) The street address of the property, including, if applicable,
23the unit number, unless the property is used to confidentially house
24victims of domestic violence.

25(iv) The assessor’s parcel number for the property.

26(v) The legal description of the property.

27(4) The agency shall require the recording of the document
28required under subparagraph (B) of paragraph (3) not more than
2930 days after the date of recordation of the covenants or restrictions
30required under subparagraph (A) of paragraph (3).

31(5) The county recorder shall index the documents required to
32be recorded under paragraph (3) by the agency and current owner.

33(6) Notwithstanding Section 27383 of the Government Code,
34a county recorder may charge all authorized recording fees to any
35party, including a public agency, for recording the document
36specified in subparagraph (B) of paragraph (3).

37(7) Notwithstanding any other provision of law, the covenants
38or restrictions implementing this subdivision shall run with the
39land and shall be enforceable against any owner who violates a
P30   1covenant or restriction and each successor in interest who continues
2the violation, by any of the following:

3(A) The agency.

4(B) The community, as defined in Section 33002.

5(C) A resident of a unit subject to this subdivision.

6(D) A residents’ association with members who reside in units
7subject to this subdivision.

8(E) A former resident of a unit subject to this subdivision who
9last resided in that unit.

10(F) An applicant seeking to enforce the covenants or restrictions
11for a particular unit that is subject to this subdivision, if the
12applicant conforms to all of the following:

13(i) Is of low or moderate income, as defined in Section 50093.

14(ii) Is able and willing to occupy that particular unit.

15(iii) Was denied occupancy of that particular unit due to an
16alleged breach of a covenant or restriction implementing this
17subdivision.

18(G) A person on an affordable housing waiting list who is of
19low or moderate income, as defined in Section 50093, and who is
20able and willing to occupy a unit subject to this subdivision.

21(8) A dwelling unit shall not be counted as satisfying the
22affordable housing requirements of this part, unless covenants for
23that dwelling unit are recorded in compliance with subparagraph
24(A) of paragraph (3).

25(9) Failure to comply with the requirements of subparagraph
26(B) of paragraph (3) shall not invalidate any covenants or
27restrictions recorded pursuant to subparagraph (A) of paragraph
28(3).

29(g) “Housing,” as used in this section, includes residential hotels,
30as defined in subdivision (k) of Section 37912. The definitions of
31“lower income households,” “very low income households,” and
32“extremely low income households” in Sections 50079.5, 50105,
33and 50106 shall apply to this section. “Longest feasible time,” as
34used in this section, includes, but is not limited to, unlimited
35duration.

36(h) “Increasing, improving, and preserving the community’s
37supply of low- and moderate-income housing,” as used in this
38section and in Section 33334.2, includes the preservation of rental
39housing units assisted by federal, state, or local government on the
40condition that units remain affordable to, and occupied by, low-
P31   1and moderate-income households, including extremely low and
2very low income households, for the longest feasible time, but not
3less than 55 years, beyond the date the subsidies and use restrictions
4could be terminated and the assisted housing units converted to
5market rate rentals. In preserving these units the agency shall
6require that the units remain affordable to, and occupied by, persons
7and families of low- and moderate-income and extremely low and
8very low income households for the longest feasible time but not
9less than 55 years. However, the agency may replace rental units
10with equally affordable and comparable rental units in another
11location within the community if (1) the replacement units in
12another location are available for occupancy prior to the
13displacement of any persons and families of low or moderate
14income residing in the units to be replaced and (2) the comparable
15replacement units are not developed with moneys from the Low
16and Moderate Income Housing Fund.

17(i) Agencies that have more than one project area may satisfy
18the requirements of Sections 33334.2 and 33334.6 and of this
19section by allocating, in any fiscal year, less than 20 percent in
20one project area, if the difference between the amount allocated
21and the 20 percent required is instead allocated, in that same fiscal
22year, to the Low and Moderate Income Housing Fund from tax
23increment revenues from other project areas. Prior to allocating
24funds pursuant to this subdivision, the agency shall make the
25finding required by subdivision (g) of Section 33334.2.

26(j) Funds from the Low and Moderate Income Housing Fund
27shall not be used to the extent that other reasonable means of
28public, private, or commercial financing for the new begin deleteor end delete
29construction, acquisition, or substantial rehabilitation of units at
30the same level of affordability and quantity are reasonably available
31to the agency or to the owner of the units. Prior to the expenditure
32of funds from the Low and Moderate Income Housing Fund for
33the new construction, acquisition, or substantial rehabilitation of
34housing units, where those funds will exceed 50 percent of the
35cost of producing the units, the agency shall find, based on
36substantial evidence, that the use of the funds is necessary because
37the agency or owner of the units has made a good faith attempt
38but been unable to obtain other public, private, or commercial
39financing of the units at the same level of affordability and quantity.

P32   1

SEC. 10.  

Section 33334.4 of the Health and Safety Code is
2amended to read:

3

33334.4.  

(a) (1) Over each 10-year implementation planning
4period, as specified in clause (iii) of subparagraph (A) of paragraph
5(2) of subdivision (a) of Section 33490, the moneys in the Low
6and Moderate Income Housing Fund to assist housing for persons
7of low income and housing for persons of very low income in at
8least the same proportion as the total number of housing units
9needed for each of those income groups bears to the total number
10of units needed for persons of moderate, low, and very low income
11within the community, as those needs have been determined for
12the community pursuant to Section 65584 of the Government Code.

13(2) Following the last 10-year implementation planning period
14referenced in paragraph (1), all of the following shall apply:

15(A) At least 75 percent of each agency’s expenditures from the
16Low and Moderate Income Housing Fund exclusive of debt service
17payments shall directly assist the new construction, acquisition
18and substantial rehabilitation, or preservation of housing for
19persons of extremely low, very low, or low income.

20(B) At least 50 percent of each agency’s expenditures from the
21Low and Moderate Income Housing Fund exclusive of debt service
22payments shall directly assist the new construction, acquisition
23and substantial rehabilitation, or preservation of housing for
24persons of extremely low or very low income.

25(C) At least 25 percent of each agency’s expenditures from the
26Low and Moderate Income Housing Fund exclusive of debt service
27payments shall directly assist the new construction, acquisition
28and substantial rehabilitation, or preservation of housing for
29persons of extremely low income.

30(3) The expenditures for extremely low income housing,
31pursuant to subparagraph (C) of paragraph (2), shall count towards
32the requirements of subparagraphs (A) and (B) of paragraph (2),
33and the expenditures for very low and extremely low-income
34housing pursuant to subparagraphs (B) and (C) of paragraph (2)
35shall count towards the requirements of subparagraph (A) of
36paragraph (2).

37(4) An agency shall satisfy the requirements of paragraph (2)
38by demonstrating in each implementation plan that as of the end
39of the immediately preceding 5-year implementation planning
40period, the agency’s aggregate expenditures from the Low and
P33   1Moderate Income Housing Fund, exclusive of debt service
2payments, between the end of the last 10-year implementation
3period referenced in paragraph (1) and the end of the immediately
4preceding 5-year implementation planning period satisfy the
5proportionality requirements set forth in paragraph (2).

6(5) (A) For purposes of this subdivision, “preservation” means
7preserving the affordability of an assisted housing development
8that is eligible for prepayment or termination or for which within
9the expiration of rental restrictions is scheduled to occur within
10five years, as those terms are defined in Section 65863.10 of the
11Government Code.

12(B) For purposes of this section, “housing for persons of
13extremely low income” shall mean housing that is available at an
14affordable rent or affordable housing cost to, and occupied by,
15households earning 30 percent of the area median income or 30
16percent of the statewide median income, whichever is greater.

17(b) Each agency shall expend over the duration of each
18redevelopment implementation plan, the moneys in the Low and
19Moderate Income Housing Fund to assist housing that is available
20to all persons regardless of age in at least the same proportion as
21the number of low-income households with a member under begin deleteage end delete
2265 yearsbegin insert of ageend insert bears to the total number of low-income households
23of the community as reported in the most recent census of the
24United States Census Bureau.

25(c) (1) An agency that has deposited an aggregate amount that
26is less than two million dollars ($2,000,000) in the Low and
27Moderate Income Housing Fund over the first 5-year
28implementation planning period following the last 10-year
29implementation planning period referenced in paragraph (1) of
30subdivision (a) shall have 10 years following the last 10-year
31implementation planning period referenced in paragraph (1) of
32subdivision (a) to meet the requirements of paragraph (2) of
33subdivision (a).

34(2) An agency that has deposited in the Low and Moderate
35Income Housing Fund over the first five years of the period of an
36implementation plan an aggregate that is less than two million
37dollars ($2,000,000) shall have an extra five years to meet the
38requirements of this section.

39(d) For the purposes of this section only, funds may be deemed
40expended if the agency has contractually obligated the funds to an
P34   1entity that is independent of the agency or its community for the
2development of a specific eligible housing development, provided
3that if the contract is terminated prior to expenditure of the funds,
4 the funds shall be discounted from the calculations required in
5subdivisions (a) and (b) and the provisions of subdivision (e) shall
6apply.

7(e) (1) If an agency fails to comply with subdivision (a) within
8the required time period, it shall not expend any moneys from the
9Low and Moderate Income Housing Fund to assist households
10whose incomes exceed 50 percent of the area median income until
11the agency has expended the funds that it should have expended
12for extremely low, very low, and low-income housing, respectively,
13in previous implementation plan periods.

14(2) If an agency fails to comply with subdivision (b) within the
15required time period, it shall not expend any moneys from the Low
16and Moderate Income Housing Fund to assist senior households
17until the agency has expended the funds that it should have
18expended for housing available to all persons regardless of age in
19previous implementation plan periods.

20(f) Agencies are encouraged to expend moneys in the Low and
21Moderate Income Housing Fund to assist special housing needs
22identified in the community’s housing element pursuant to
23paragraph (7) of subdivision (a) of Section 65583 of the
24Government Code.

25

SEC. 11.  

Section 33334.12 of the Health and Safety Code is
26amended to read:

27

33334.12.  

(a) Agencies shall expend moneys from the Low
28and Moderate Income Housing Fund in a manner that does not
29accrue an excess surplus, as defined in paragraph (1) of subdivision
30(c). If an agency, after three years has elapsed from the date that
31the moneys become excess surplus, has not expended or
32encumbered its excess surplus, the agency shall be subject to
33sanctions pursuant to subdivision (e), until the agency has expended
34or encumbered its excess surplus plus an additional amount, equal
35to 50 percent of the amount of the excess surplus that remains at
36the end of the three-year period. The additional expenditure shall
37not be from the agency’s Low and Moderate Income Housing
38Fund, or any other city, county, or agency special fund related to
39housing, but shall be used in a manner that meets all requirements
40for expenditures from that fund.

P35   1(b)  For disbursements or expenditures of excess surplus made
2prior to January 1, 2012, the housing authority or other public
3agency to which the money is transferred shall utilize the moneys
4for the purposes of, and subject to the same restrictions that are
5applicable to, the redevelopment agency under this part, and for
6that purpose may exercise all of the powers of a housing authority
7under Part 2 (commencing with Section 34200) to an extent not
8inconsistent with these limitations.

9(c)  For disbursements or expenditures of excess surplus made
10prior to January 1, 2012, notwithstanding Section 34209 or any
11other law, for the purpose of accepting a transfer of, and using,
12moneys pursuant to this section, the housing authority of a county
13or other public agency may exercise its powers within the territorial
14jurisdiction of a city redevelopment agency located in that county.

15(d)  For disbursements or expenditures of excess surplus made
16prior to January 1, 2012, the amount of excess surplus that shall
17be transferred to the housing authority or other public agency
18because of a failure of the redevelopment agency to expend or
19encumber excess surplus within one year shall be the amount of
20the excess surplus that is not so expended or encumbered. The
21housing authority or other public agency to which the moneys are
22transferred shall expend or encumber these moneys for authorized
23purposes not later than three years after the date these moneys
24were transferred from the Low and Moderate Income Housing
25Fund.

26(e)  (1)  Until a time when the agency has expended or
27encumbered excess surplus moneys pursuant to subdivision (a),
28the agency shall be prohibited from encumbering any funds or
29 expending any moneys derived from any source, except that the
30agency may encumber funds and expend moneys to pay the
31following obligations, if any, that were incurred by the agency
32prior to three years from the date the moneys became excess
33surplus:

34(A)  Bonds, notes, interim certificates, debentures, or other
35obligations issued by an agency, whether funded, refunded,
36assumed, or otherwise, pursuant to Article 5 (commencing with
37Section 33640).

38(B)  Loans or moneys advanced to the agency, including, but
39not limited to, loans from federal, state, or local agencies, or a
40private entity.

P36   1(C)  Contractual obligations which, if breached, could subject
2the agency to damages or other liabilities or remedies.

3(D)  Obligations incurred pursuant to Section 33445.

4(E)  Indebtedness incurred pursuant to Section 33334.2 or
533334.6.

6(F)  Obligations incurred pursuant to Section 33401.

7(G)  An amount, to be expended for the operation and
8administration of the agency, that may not exceed 75 percent of
9the amount spent for those purposes in the preceding fiscal year.

10(2)  This subdivision shall not be construed to prohibit the
11expenditure of excess surplus funds or other funds to meet the
12requirement in paragraph (2) of subdivision (a) that the agency
13spend or encumber excess surplus funds, plus an amount equal to
1450 percent of excess surplus, prior to spending or encumbering
15funds for any other purpose.

16(f) For purposes of this section:

17(1)  “Excess surplus” means any unexpended and unencumbered
18amount in an agency’s Low and Moderate Income Housing Fund
19that exceeds the greater of one million dollars ($1,000,000) or the
20aggregate amount deposited into the Low and Moderate Income
21Housing Fund pursuant to Sections 33334.2 and 33334.6 during
22the agency’s preceding four fiscal years. The first fiscal year to be
23included in this computation is the 1989-90 fiscal year, and the
24first date on which an excess surplus may exist is July 1, 1994.

25(2)  Moneys shall be deemed encumbered if committed pursuant
26to a legally enforceable contract or agreement for expenditure for
27purposes specified in Section 33334.2 or 33334.3.

28(3)  (A)  For purposes of determining whether an excess surplus
29exists, it is the intent of the Legislature to give credit to agencies
30which convey land for less than fair market value, on which low-
31and moderate-income housing is built or is to be built if at least
3249 percent of the units developed on the land are available at
33affordable housing cost to lower income households for at least
34the time specified in subdivision (e) of Section 33334.3, and
35otherwise comply with all of the provisions of this division
36applicable to expenditures of moneys from a low- and
37moderate-income housing fund established pursuant to Section
3833334.3. Therefore, for the sole purpose of determining the amount,
39if any, of an excess surplus, an agency may make the following
40calculation: if an agency sells, leases, or grants land acquired with
P37   1moneys from the Low and Moderate Income Housing Fund,
2established pursuant to Section 33334.3, for an amount which is
3below fair market value, and if at least 49 percent of the units
4constructed or rehabilitated on the land are affordable to lower
5income households, as defined in Section 50079.5, the difference
6 between the fair market value of the land and the amount the
7agency receives may be subtracted from the amount of moneys in
8an agency’s Low and Moderate Income Housing Fund.

9(B)  If taxes that are deposited in the Low and Moderate Income
10Housing Fund are used as security for bonds or other indebtedness,
11the proceeds of the bonds or other indebtedness, and income and
12expenditures related to those proceeds, shall not be counted in
13determining whether an excess surplus exists. The unspent portion
14of the proceeds of bonds or other indebtedness, and income related
15thereto, shall be excluded from the calculation of the unexpended
16and unencumbered amount in the Low and Moderate Income
17Housing Fund when determining whether an excess surplus exists.

18(C)  Nothing in this subdivision shall be construed to restrict
19the authority of an agency provided in any other provision of this
20part to expend funds from the Low and Moderate Income Housing
21Fund.

22(D)  The department shall develop and periodically revise the
23methodology to be used in the calculation of excess surplus as
24required by this section. The director shall appoint an advisory
25committee to advise in the development of this methodology. The
26advisory committee shall include department staff, affordable
27housing advocates, and representatives of the California
28Redevelopment Association, the California Society of Certified
29Public Accountants, the Controller, and any other authorities or
30persons interested in the field that the director deems necessary
31and appropriate.

32(g) Communities in which an agency has disbursed excess
33surplus funds pursuant to this section shall not disapprove a low-
34or moderate-income housing project funded in whole or in part by
35the excess surplus funds if the project is consistent with applicable
36building codes and the land use designation specified in any
37element of the general plan as it existed on the date the application
38was deemed complete. A local agency may require compliance
39with local development standards and policies appropriate to and
40consistent with meeting the quantified objectives relative to the
P38   1development of housing, as required in housing elements of the
2community pursuant to subdivision (b) of Section 65583 of the
3Government Code.

4(h) Notwithstanding subdivision (a), any agency that has funds
5that become excess surplus on July 1, 1994, shall have, pursuant
6to subdivision (a), until January 1, 1995, to decide to transfer the
7funds to a housing authority or other public agency, or until January
81, 1997, to expend or encumber those funds, or face sanctions
9pursuant to subdivision (e).

10

SEC. 12.  

Section 33334.16 of the Health and Safety Code is
11repealed.

12

SEC. 13.  

Section 33334.16 is added to the Health and Safety
13Code
, to read:

14

33334.16.  

(a) (1) For each interest in real property acquired
15using moneys from the Low and Moderate Income Housing Fund,
16the agency shall, within five years from the date of acquisition,
17complete at least one of the following activities:

18(A) Enter into a disposition and development agreement or a
19land lease with a third party for the development of housing
20affordable to persons and families of low and moderate income.

21(B) Obtain final land use entitlements and secure full financing
22for agency development of housing affordable to persons and
23families of low and moderate income.

24(C) Submit a remedial action plan for the real property to the
25appropriate oversight agency, including, but not limited to, the
26Department of Toxic Substances Control, a California regional
27water quality control board, or the Office of Humanbegin delete Health Risk
28Assessmentend delete
begin insert and Ecological Riskend insert, for the cleanup of contamination.

29(2) On or after January 1, 2013, if none of the activities
30described in paragraph (1) has been completed within five years,
31or if less than 10 percent of the dwelling units or floor area of a
32project is developed within 10 years from the date the agency
33originally acquired the property, the agency shall reimburse the
34Low and Moderate Income Housing Fund 150 percent of the
35amount expended to acquire and maintain the property or of the
36current fair market value of the property, whichever amount is
37greater.

38(3) If the agency owns two or more adjacent parcels of real
39property that comprise a single redevelopment project for which
40the parcels are described in the implementation plan, the date of
P39   1acquisition for all such parcels shall be the date of acquisition of
2the last acquired parcel, provided that this date shall not be later
3than five years after the acquisition of the first parcel.

4(4) An agency may adopt a resolution to petition the department
5for, and the department may grant, a single extension for up to five
6years of the deadlines established in paragraphs (1) and (2) if the
7department makes a finding that the failure to complete the required
8activities is due to circumstances beyond the agency’s or
9community’s control and that the agency has a feasible plan for
10the development of housing affordable to persons and families of
11low and moderate income on the real property within the period
12of the extension. The agency shall provide information supporting
13the need for the extension and a plan for development of the
14property. The department shall solicit comments from known or
15expected parties interested in the petition and consider comments
16from these and any other parties. The department shall establish
17a schedule of fees to cover but not exceed its costs under this
18begin deletesubparagraphend deletebegin insert paragraphend insert, and at the time the petition is submitted
19the agency shall pay the fees with funds other than those required
20to be set aside or used for low- and moderate-income housing
21pursuant to this part or otherwise designated for affordable housing.

22(b) At any time, in addition to proceeds from the sale or transfer,
23the agency shall deposit into the Low and Moderate Income
24Housing Fund from agency revenues other than those required to
25be deposited in the Low and Moderate Income Housing Fund an
26amount equal to 50 percent of the fair market value of the property
27at the time it is sold or transferred or, if the property is not sold or
28transferred, of the fair market value of the land at the time a
29building permit is issued for the property. This subdivision shall
30apply only under either of the following conditions:

31(1) A real property acquired using moneys from the Low and
32Moderate Income Housing Fund is sold or transferred for a purpose
33other than housing affordable to persons and families of low and
34moderate income.

35(2) A real property acquired using moneys from the Low and
36Moderate Income Housing Fund is developed such that less than
3750 percent of the floor area, or a percentage of the floor area equal
38to the proportion that moneys from the Low and Moderate Income
39Housing Fund represent to the total acquisition cost, whichever is
P40   1less, is housing affordable to persons and families of low and
2moderate income.

3

SEC. 14.  

Section 33413 of the Health and Safety Code is
4amended to read:

5

33413.  

(a) Whenever dwelling units affordable to or occupied
6by persons and families of low or moderate income are destroyed
7or removed from the low- and moderate-income housing market
8as part of a redevelopment project that is subject to a written
9agreement with the agency or where financial assistance has been
10provided by the agency, the agency shall, within four years of the
11destruction or removal, construct, or cause tobegin insert beend insert constructed, for
12rental or sale to persons and families of low or moderate income,
13an equal number of replacement dwelling units that have an equal
14or greater number of bedrooms as those destroyed or removed
15units at affordable housing costs within the territorial jurisdiction
16of the agency, provided that if the units are provided outside the
17project area the agency shall provide two units for each unit the
18agency is obligated to replace. The replacement obligation shall
19apply to all units affordable to low- or moderate-income persons
20or families at the time of initiation of negotiations of a written
21agreement with or financial assistance from the agency. For
22purposes of this section, the inclusion of residential units in the
23rehabilitation of an existing nonresidential structure shall constitute
24construction.

25(1) When dwelling units are destroyed or removed after
26September 1, 1989, 75 percent of the replacement dwelling units
27 shall be available at affordable housing cost to, and occupied by,
28persons and families in the same or a lower income level of very
29low income households, lower income households, and persons
30and families of low and moderate income, as the persons and
31families displaced from those destroyed or removed units.

32(2) When dwelling units are destroyed or removed on or after
33January 1, 2002, 100 percent of the replacement dwelling units
34shall be available at affordable housing cost to, and occupied by,
35persons and families in the same or a lower income category
36(extremely low, very low, low, or moderate), as the persons and
37families displaced from those destroyed or removed units. This
38paragraph is declaratory of existing law.

39(3) On or after January 1, 2012, in the case where the agency
40is obligated to replace vacant units, those replacement units shall
P41   1be available at affordable housing costs to, and occupied by,
2persons and families in the same or lower income category
3(extremely low, very low, low, or moderate) in the same proportion
4as the units occupied or last occupied by low- and moderate-income
5households in the property.

6(4) Up to 25 percent of the replacement obligation incurred
7during a five-year implementation plan may be satisfied in either
8of the following ways:

9(A) With units that have been rehabilitated such that
10after-rehabilitation value is increased by 50 percent or more of the
11prerehabilitation value, as evidenced by pre and post rehabilitation
12appraisals and, the rehabilitated units were, at the time the dwelling
13units to be replaced were destroyed or removed were either of the
14following:

15(i) At risk of demolition or closure due to substandard conditions
16and occupied by extremely low or very low income households.

17(ii) Vacant due to substandard conditions as defined in Section
181941.1 of the Civil Code.

19(B) With substantially rehabilitated multifamily rental dwelling
20units, as defined in paragraph (2) of subdivision (b) and evidenced
21by pre and post rehabilitation appraisals, provided that the agency
22shall substantially rehabilitate within the project area, two units
23for each unit the agency is obligated to replace, or outside of the
24project area, three units for each unit the agency is obligated to
25replace.

26(5) For each project containing rehabilitated replacement units,
27the agency shall adopt a separate written resolution, after public
28hearing and based on substantial evidence, that the rehabilitation
29of the replacement dwelling units complies with this subdivision.

30(b) (1) Prior to the time limit on the effectiveness of the
31redevelopment plan established pursuant to Sections 33333.2,
3233333.6, and 33333.10 at least 30 percent of all new and
33substantially rehabilitated dwelling units developed by an agency
34shall be available at affordable housing cost to, and occupied by,
35persons and families of low or moderate income. Not less than 50
36percent of the dwelling units required to be available at affordable
37housing cost to, and occupied by, persons and families of low or
38moderate income shall be available at affordable housing cost to,
39and occupied by, very low income households.

P42   1(2) (A) (i) Prior to the time limit on the effectiveness of the
2redevelopment plan established pursuant to Sections 33333.2,
333333.6, and 33333.10 at least 15 percent of all new and
4substantially rehabilitated dwelling units developed within a project
5area under the jurisdiction of an agency by public or private entities
6or persons other than the agency shall be available at affordable
7housing cost to, and occupied by, persons and families of low or
8moderate income. Not less than 40 percent of the dwelling units
9required to be available at affordable housing cost to, and occupied
10by, persons and families of low or moderate income shall be
11available at affordable housing cost to, and occupied by, very low
12income households.

13(ii) To satisfy this paragraph, in whole or in part, the agency
14may cause, by regulation or agreement, to be available, at
15affordable housing costbegin delete,end delete to, and occupied by, persons and families
16of low or moderate income or to very low income households, as
17applicable, two units outside a project area for each unit that
18otherwise would have been required to be available inside a project
19area.

20(iii) On or after January 1, 2002, as used in this paragraph and
21in paragraph (1), “substantially rehabilitated dwelling units” means
22all units substantially rehabilitated, with agency assistance. Prior
23to January 1, 2002, “substantially rehabilitated dwelling units”
24shall mean substantially rehabilitated multifamily rented dwelling
25units with three or more units regardless of whether there is agency
26assistance, or substantially rehabilitated, with agency assistance,
27single-family dwelling units with one or two units.

28(iv) As used in this paragraph and in paragraph (1), “substantial
29rehabilitation” means rehabilitation, the value of which constitutes
3025 percent of the after-rehabilitation value of the dwelling,
31inclusive of the land value.

32(v) To satisfy this paragraph, the agency may aggregate new or
33substantially rehabilitated dwelling units in one or more project
34areas, if the agency finds, based on substantial evidence, after a
35public hearing, that the aggregation will not cause or exacerbate
36racial, ethnic, or economic segregation.

37(B) To satisfy the requirements of paragraph (1) and
38subparagraph (A), the agency may purchase, or otherwise acquire
39or cause by regulation or agreement the purchase or other
40acquisition of, long-term affordability covenants on multifamily
P43   1units that restrict the cost of renting or purchasing those units that
2either: (i) are not presently available at affordable housing cost to
3persons and families of low or very low income households, as
4applicable; or (ii) are units that are presently available at affordable
5housing cost to this same group of persons or families, but are
6units that the agency finds, based upon substantial evidence, after
7a public hearing, cannot reasonably be expected to remain
8affordable to this same group of persons or families.

9(C) To satisfy the requirements of paragraph (1) and
10subparagraph (A), the long-term affordability covenants purchased
11or otherwise acquired pursuant to subparagraph (B) shall be
12required to be maintained on dwelling units at affordable housing
13cost to, and occupied by, persons and families of low or very low
14income, for the longest feasible time but not less than 55 years for
15rental units and 45 years for owner-occupied units. Not more than
1650 percent of the units made available pursuant to paragraph (1)
17and subparagraph (A) may be assisted through the purchase or
18acquisition of long-term affordability covenants pursuant to
19subparagraph (B). Not less than 50 percent of the units made
20available through the purchase or acquisition of long-term
21affordability covenants pursuant to subparagraph (B) shall be
22available at affordable housing cost to, and occupied by, very low
23 income households.

24(D) To satisfy the requirements of paragraph (1) and
25subparagraph (A), each mutual self-help housing unit, as defined
26in subparagraph (C) of paragraph (1) of subdivision (f) of Section
2733334.3, that is subject to a 15-year deed restriction shall count as
28one-third of a unit.

29(3) The requirements of this subdivision shall apply
30independently of the requirements of subdivision (a). The
31requirements of this subdivision shall apply, in the aggregate, to
32housing made available pursuant to paragraphs (1) and (2),
33respectively, and not to each individual case of rehabilitation,
34development, or construction of dwelling units, unless an agency
35determines otherwise.

36(4) Each redevelopment agency, as part of the implementation
37plan required by Section 33490, shall adopt a plan to comply with
38the requirements of this subdivision for each project area. The plan
39shall be consistent with, and may be included within, the
40community’s housing element. The plan shall be reviewed and, if
P44   1necessary, amended at least every five years in conjunction with
2the plan implementation cycle. The plan shall ensure that the
3requirements of this subdivision are met every 10 years. If the
4requirements of this subdivision are not met by the end of each
510-year period, the agency shall meet these goals on an annual
6basis until the requirements for the 10-year period are met. If the
7agency has exceeded the requirements within the 10-year period,
8the agency may count the units that exceed the requirement in
9order to meet the requirements during the next 10-year period. The
10plan shall contain the contents required by paragraphs (2), (3), and
11(4) of subdivision (a) of Section 33490.

12(c) (1) The agency shall require that the aggregate number of
13replacement dwelling units and other dwelling units rehabilitated,
14developed, constructed, or price restricted pursuant to subdivision
15(a) or (b) remain available at affordable housing cost to, and
16occupied by, persons and families of extremely low income, very
17low income, low income, and moderate income, respectively, for
18the longest feasible time, but for not less than 55 years for rental
19units, 45 years for home ownership units, and 15 years for mutual
20self-help housing units, as defined in subparagraph (C) of paragraph
21(1) of subdivision (f) of Section 33334.3, except as set forth in
22paragraph (2). Nothing in this paragraph precludes the agency and
23the developer of the mutual self-help housing units from agreeing
24to 45-year deed restrictions.

25(2) Notwithstanding paragraph (1), the agency may permit sales
26of owner-occupied units prior to the expiration of the 45-year
27period, and mutual self-help housing units prior to the expiration
28of the 15-year period, established by the agency for a price in
29excess of that otherwise permitted under this subdivision pursuant
30to an adopted program that protects the agency’s investment of
31moneys from the Low and Moderate Income Housing Fund,
32including, but not limited to, an equity sharing program that
33establishes a schedule of equity sharing that permits retention by
34the seller of a portion of those excess proceeds, based on the length
35of occupancy. The remainder of the excess proceeds of the sale
36shall be allocated to the agency, and deposited into the Low and
37Moderate Income Housing Fund. The agency shall, within three
38years from the date of sale pursuant to this paragraph of each home
39ownership or mutual self-help housing unit subject to a 45-year
40deed restriction, and every third mutual self-help housing unit
P45   1subject to a 15-year deed restriction, expend funds to make
2affordable an equal number of units at the same or lowest income
3level as the unit or units sold pursuant to this paragraph, for a
4period not less than the duration of the original deed restrictions.
5Only the units originally assisted by the agency shall be counted
6towards the agency’s obligations under Section 33413.

7(3) The requirements of this section shall be made enforceable
8in the same manner as provided in paragraph (7) of subdivision
9(f) of Section 33334.3.

10(4) If land on which the dwelling units required by this section
11are located is deleted from the project area, the agency shall
12continue to require that those units remain affordable as specified
13in this subdivision.

14(5) For each unit counted towards the requirements of
15subdivision (a) or (b), the agency shall require the recording in the
16office of the county recorder of covenants or restrictions that ensure
17compliance with this subdivision. With respect to covenants or
18restrictions that are recorded on or after January 1, 2008, the agency
19shall comply with the requirements of paragraphs (3) and (4) of
20subdivision (f) of Section 33334.3.

21(d) (1) This section applies only to redevelopment projects for
22which a final redevelopment plan is adopted pursuant to Article 5
23(commencing with Section 33360) on or after January 1, 1976,
24and to areas that are added to a project area by amendment to a
25final redevelopment plan adopted on or after January 1, 1976. In
26addition, subdivision (a) shall apply to any other redevelopment
27project with respect to dwelling units destroyed or removed from
28the low- and moderate-income housing market on or after January
291, 1996, irrespective of the date of adoption of a final
30redevelopment plan or an amendment to a final redevelopment
31plan adding areas to a project area. Additionally, any agency may,
32by resolution, elect to make all or part of the requirements of this
33section applicable to any redevelopment project of the agency for
34which the final redevelopment plan was adopted prior to January
351, 1976. In addition, subdivision (b) shall apply to redevelopment
36plans adopted prior to January 1, 1976, for which an amendment
37is adopted pursuant to Section 33333.10, except that subdivision
38(b) shall apply to those redevelopment plans prospectively only
39so that the requirements of subdivision (b) shall apply only to new
40and substantially rehabilitated dwelling units for which the building
P46   1permits are issued on or after the date that the ordinance adopting
2the amendment pursuant to Section 33333.10 becomes effective.

3(2) An agency may, by resolution, elect to require that whenever
4dwelling units housing persons or families of low or moderate
5income are destroyed or removed from the low- and
6moderate-income housing market as part of a redevelopment
7project, the agency shall replace each dwelling unit with up to
8three replacement dwelling units pursuant to subdivision (a).

9(e) Except as otherwise authorized by law, this section does not
10authorize an agency to operate a rental housing development
11beyond the period reasonably necessary to sell or lease the housing
12development.

13(f) Notwithstanding subdivision (a), the agency may replace
14destroyed or removed dwelling units with a fewer number of
15replacement dwelling units if the replacement dwelling units meet
16both of the following criteria:

17(1) The total number of bedrooms in the replacement dwelling
18units equals or exceeds the number of bedrooms in the destroyed
19or removed units. Destroyed or removed units having one or no
20bedroom are deemed for this purpose to have one bedroom.

21(2) The replacement units are affordable to and occupied by the
22same income level of households as the destroyed or removed
23units.

24(g) “Longest feasible time,” as used in this section, includes,
25but is not limited to, unlimited duration.

26(h) If a court finds that an agency has failed to comply with the
27requirements of this section, the court, at a minimum, shall issue
28an order that prohibits the agency from issuing any debt for any
29project area, except debt from which all the proceeds will be
30deposited into the Low and Moderate Income Housing Fund or
31otherwise used to comply with the requirements of this section,
32until such time as the court finds that the agency has fully complied
33with the requirements of this section.

34

SEC. 15.  

Section 33413.5 of the Health and Safety Code is
35amended to read:

36

33413.5.  

Not less than 30 days prior to the execution of an
37agreement for acquisition of real property, the execution of an
38agreement for the disposition and development of property, the
39execution of an owner participation agreement, or other agreement
40or assistance that would lead to the destruction or removal of
P47   1dwelling units from the low- and moderate-income housing market,
2the agency shall adopt by resolution a replacement housing plan.
3For a reasonable time prior to adopting a replacement housing plan
4by resolution, the agency shall make available a draft of the
5proposed replacement housing plan for review and comment by
6the project area committee, other public agencies, and the general
7public.

8The replacement housing plan shall include (1) the general
9location of housing to be rehabilitated or constructed pursuant to
10Section 33413, (2) a description of the occupancy and affordability
11restrictions to be imposed on the replacement dwelling units, (3)
12substantial evidence supporting a finding that the replacement
13dwelling units will meet the needs of households in the income
14categories of the households displaced from the dwelling units that
15the replacement units are intended to replace, (4) a declaration of
16whether the agency intends to rehabilitate existing dwelling units
17pursuant to paragraph (5) of subdivision (a) of Section 33413, (5)
18an adequate means of financing such rehabilitation or construction,
19(6) a finding that the replacement housing does not require the
20approval of the voters pursuant to Article XXXIV of the California
21Constitution, or that such approval has been obtained, (7) the
22number of dwelling units housing persons and families of low or
23moderate income planned for construction or rehabilitation, and
24(8) the timetable for meeting the plan’s relocation, rehabilitation,
25and replacement housing objectives. A dwelling unit whose
26replacement is required by Section 33413 but for which no
27replacement housing plan has been prepared, shall not be destroyed
28or removed from the low- and moderate-income housing market
29until the agency has by resolution adopted a replacement housing
30plan.

31Nothing in this section shall prevent an agency from destroying
32or removing from the low- and moderate-income housing market
33a dwelling unit which the agency owns and which is an immediate
34danger to health and safety. The agency shall, as soon as
35practicable, adopt by resolution a replacement housing plan with
36respect to such dwelling unit.

37

SEC. 16.  

Section 33418 of the Health and Safety Code is
38amended to read:

39

33418.  

(a) An agency shall monitor, on an ongoing basis, any
40housing affordable to persons and families of low or moderate
P48   1income developed or otherwise made available pursuant to any
2provisions of this part. As part of this monitoring, an agency shall
3require owners or managers of the housing to submit an annual
4report to the agency. The annual reports shall include for each
5rental unit the rental rate and the income and family size of the
6occupants, and for each owner-occupied unit whether there was a
7change in ownership from the prior year and, if so, the income and
8family size of the new owners. The income information required
9by this section shall be supplied by the tenant in a certified
10statement on a form provided by the agency.

11(b) The data specified in subdivision (a) shall be obtained by
12the agency from owners and managers of the housing specified
13therein and current data shall be included in any reports required
14by law to be submitted to the Department of Housing and
15Community Development or the Controller. The information on
16income and family size that is required to be reported by the owner
17or manager shall be supplied by the tenant and shall be the only
18information on income or family size that the owner or manager
19shall be required to submit on his or her annual report to the
20agency.

21(c) (1) The agency shall compile and maintain a database of
22existing, new and substantially rehabilitated, housing units
23developed or otherwise assisted with moneys from the Low and
24Moderate Income Housing Fund, or otherwise counted towards
25the requirements of subdivision (a) or (b) of Section 33413. The
26database shall be made available to the public on the Internet and
27updated on an annual basis and shall include the date the database
28was last updated. The database shall require all of the following
29information for each owner-occupied unit or rental unit, or for
30each group of units, if more than one unit is subject to the same
31covenant:

32(A) The street address and assessor’s parcel number of the
33property.

34(B) The size of each unit, measured by the number of bedrooms.

35(C) The year in which the construction or substantial
36rehabilitation of the unit was completed.

37(D) The date of recordation and document number of the
38affordability covenants or restrictions required under subdivision
39(f) of Section 33334.3.

40(E) The date on which the covenants or restrictions expire.

P49   1(F) For owner-occupied units that have changed ownership
2during the reporting year, as described in subdivision (a), the date
3and document number of the new affordability covenants or other
4documents recorded to ensure that the affordability restriction is
5enforceable and continues to run with the land.

6(G) Whether occupancy in the unit or units is restricted to any
7special population, including senior citizens.

8(H) The affordability level of each unit.

9(I) Whether the unit is a rental or ownership unit.

10(J) Whether the unit is being counted towards a replacement
11obligation pursuant to subdivision (a) of Section 33413 or towards
12a production obligation pursuant to subdivision (b) of Section
13 33413.

14(K) The project type, including, but not limited to, new
15construction, substantial rehabilitation, preservation, or the
16purchase of long-term affordability covenants.

17(2) Notwithstanding subparagraphs (A) and (D) of paragraph
18(1), the database shall omit any property used to confidentially
19house victims of domestic violence.

20(3) Upon establishment of a database under this section, the
21agency shall provide reasonable notice to the community regarding
22the existence of the database.

23(d) The agency shall adequately fund its monitoring activities
24as needed to insure compliance of applicable laws and agreements
25in relation to affordable units. For purposes of defraying the cost
26of complying with the requirements of this section and the changes
27in reporting requirements of Section 33080.4 enacted by the act
28enacting this section, an agency may establish and impose fees
29upon owners of properties monitored pursuant to this section.

30(e) The agency shall continue to monitor and enforce the
31covenants covered by this section for the entire period of the
32covenant. In the event the agency ceases its activities prior to the
33entire period of the covenants, then its designated successor agency
34shall monitor and enforce the covenants for the remaining period
35of the covenant. If a successor agency is not designated at the time
36the agency ceases its activities, then the community shall monitor
37and enforce the covenants for the remaining period of the covenant.

38

SEC. 17.  

Article 13 (commencing with Section 33460) is added
39to Chapter 4 of Part 1 of Division 24 of the Health and Safety
40Code
, to read:

 

P50   1Article 13.  Accountability Audits
2

 

3

33460.  

(a) The Legislature hereby finds and declares both of
4the following:

5(1) Past department audits of redevelopment agencies have
6uncovered errors, omissions, and violations that have resulted in
7significant repayments tobegin insert theend insert agencies’ Low and Moderate Income
8Housing Fund, thereby providing additional resources for
9increasing, improving, and preserving the supply of low- and
10moderate-income housing available at affordable housing cost.

11(2) Providing funding for future department audits of
12redevelopment agencies will ensure that tax increment, interest,
13and debt proceeds are appropriately deposited into the Low and
14Moderate Income Housing Fund and that agencies make only legal
15expenditures from the fund, thereby providing additional resources
16for increasing, improving, and preserving the supply of low- and
17moderate-income housing available at affordable housing cost. As
18a result, the deposits required by this section are permissible
19pursuant to paragraph (7) of subdivision (a) of Section 25.5 of
20Article XIII of the California Constitution.

21(b) Immediately upon receipt, each agency shall annually deposit
22one-half of one-tenth (.0005) percent of any tax increment
23deposited into the Low and Moderate Income Housing Fund into
24the Redevelopment Agency Accountability Fund created pursuant
25to Section 50464.5 to be used solely for the purpose described in
26subdivision (b) of that section.

27

SEC. 18.  

Section 33487 of the Health and Safety Code is
28amended to read:

29

33487.  

(a)  Subject to subdivisions (a) and (b) of Section
3033486, not less than 20 percent of all taxes that are allocated to
31the redevelopment agency pursuant to Section 33670 for
32redevelopment projects merged pursuant to this article, irrespective
33of the date of adoption of the final redevelopment plans, shall be
34deposited by the agency in the Low and Moderate Income Housing
35Fund established pursuant to Section 33334.3, or which shall be
36established for purposes of this section. The agency shall use the
37moneys in this fund to assist in the construction or rehabilitation
38of housing units that will be available to, or occupied by, persons
39and families of low or moderate income, as defined in Section
4050093, and very low income households, as defined in Section
P51   150105, for the longest feasible time period but not less than 55
2years for rental units and 45 years for owner-occupied units. For
3the purposes of this subdivision, “construction and rehabilitation”
4shall include acquisition of land, improvements to land; the
5acquisition, rehabilitation, or construction of structures; or the
6provision of subsidies necessary to provide housing for persons
7and families of low or moderate income, as defined in Section
850093, and very low income households, as defined in Section
950105.

10(b)  The agency may use the funds set aside by subdivision (a)
11inside or outside the project area. However, the agency may only
12use these funds outside the project area upon a resolution of the
13agency and the legislative body that the use will be of benefit to
14the project. This determination by the agency and the legislative
15body shall be final and conclusive as to the issue of benefit to the
16project area. The Legislature finds and declares that the provision
17of replacement housing pursuant to Section 33413 is of benefit to
18a project.

19The Legislature finds and declares that expenditures or
20obligations incurred by the agency pursuant to this section shall
21constitute an indebtedness of the project.

22(c) If the agency deposits less than 20 percent of taxes allocated
23pursuant to Section 33670, due to the provisions of subdivisions
24(a) and (b) of Section 33486, in any fiscal year, a deficit shall be
25created in the Low and Moderate Income Housing Fund in an
26amount equal to the difference between 20 percent of the taxes
27allocated pursuant to Section 33670 and the amount deposited in
28that year. The deficit, if any, created pursuant to this section
29constitutes an indebtedness of the project. The agency shall
30eliminate the deficit by expending taxes allocated in years
31subsequent to creation of the deficit and, until the time when that
32deficit has been eliminated, an agency shall not incur new
33obligations for purposes other than those set forth in Section 33487,
34except to comply with the terms of any resolution or other
35agreement pledging taxes allocated pursuant to Section 33670 that
36existed on the date of merger pursuant to this article.

37(d) Notwithstanding subdivision (d) of Section 33413, any
38agency that merges its redevelopment project areas pursuant to
39this article shall be subject to subdivisions (a) and (c) of Section
4033413.

P52   1

SEC. 19.  

Section 33490 of the Health and Safety Code is
2amended to read:

3

33490.  

(a) (1) (A) On or before December 31, 1994, and each
4five years thereafter, each agency that has adopted a redevelopment
5plan prior to December 31, 1993, shall adopt, after a public hearing,
6an implementation plan that shall contain the specific goals and
7objectives of the agency for the project area, the specific programs,
8including potential projects, and estimated expenditures proposed
9to be made during the next five years, and an explanation of how
10the goals and objectives, programs, and expenditures will eliminate
11blight within the project area and implement the requirements of
12Section 33333.10, if applicable, and Sections 33334.2, 33334.4,
1333334.6, 33413, and 33487. After adoption of the first
14implementation plan, the parts of the implementation plan that
15address Section 33333.10, if applicable, and Sections 33334.2,
1633334.4, 33334.6, 33413, and 33487 shall be adopted every five
17years in conjunction with the implementation plan cycle and shall
18be made available to the public on the Internet. The agency may
19amend the implementation plan after conducting a public hearing
20on the proposed amendment. If an action attacking the adoption,
21approval, or validity of a redevelopment plan adopted prior to
22January 1, 1994, has been brought pursuant to Chapter 5
23(commencing with Section 33500), the first implementation plan
24required pursuant to this section shall be adopted within six months
25after a final judgment or order has been entered. Subsequent
26implementation plans required pursuant to this section shall be
27adopted pursuant to the terms of this section, and as if the first
28implementation plan had been adopted on or before December 31,
291994.

30(B) Adoption of an implementation plan shall not constitute an
31approval of any specific program, project, or expenditure and shall
32not change the need to obtain any required approval of a specific
33program, project, or expenditure from the agency or community.
34The adoption of an implementation plan shall not constitute a
35project within the meaning of Section 21000 of the Public
36Resources Code. However, the inclusion of a specific program,
37potential project, or expenditure in an implementation plan
38prepared pursuant to subdivision (c) of Section 33352 in
39conjunction with a redevelopment plan adoption shall not eliminate
40analysis of those programs, potential projects, and expenditures
P53   1in the environmental impact report prepared pursuant to subdivision
2(k) of Section 33352 to the extent that it would be otherwise
3required. In addition, the inclusion of programs, potential projects,
4and expenditures in an implementation plan shall not eliminate
5review pursuant to the California Environmental Quality Act
6(Division 13 (commencing with Section 21000) of the Public
7Resources Code), at the time of the approval of the program,
8project, or expenditure, to the extent that it would be otherwise
9required.

10(2) (A) A portion of the implementation plan shall address the
11agency housing responsibilities and shall contain a section
12addressing Section 33333.10, if applicable, and Sections 33334.2,
1333334.4, and 33334.6, the Low and Moderate Income Housing
14Fund, and, if subdivision (b) of Section 33413 applies, a section
15addressing agency developed and project area housing. The section
16addressing the Low and Moderate Income Housing Fund shall
17contain:

18(i) The amount available in the Low and Moderate Income
19Housing Fund and the estimated amounts which will be deposited
20in the Low and Moderate Income Housing Fund during each of
21the next five years.

22(ii) A housing program with estimates of the number of new,
23 rehabilitated, or price restricted units to be assisted during each of
24the five years and estimates of the expenditures of moneys from
25the Low and Moderate Income Housing Fund during each of the
26five years.

27(iii) A description of how the housing program will implement
28the requirement for expenditures of moneys in the Low and
29Moderate Income Housing Fund over a 10-year period or 5-year
30period, as applicable, for various groups as required by Section
3133334.4. For project areas to which subdivision (b) of Section
3233413 applies, the 10-year period within which subdivision (b) of
33Section 33413 is required to be implemented shall coincide with
34the 10-year period or within two 5-year periods, as applicable,
35within which Section 33334.4 is required to be implemented.
36Notwithstanding the first sentence of Section 33334.4 and the first
37sentence of this clause, in order to allow these two 10-year time
38periods to coincide for the first time period, the time to implement
39the requirements of Section 33334.4 shall be extended two years,
40and project areas in existence on December 31, 1993, shall
P54   1implement the requirements of Section 33334.4 on or before
2December 31, 2014, rather than December 31, 2012. For project
3areas to which subdivision (b) of Section 33413 does not apply,
4the requirements of Section 33334.4 shall be implemented on or
5before December 31, 2014.

6(iv) This requirement to include a description of how the housing
7program will implement Section 33334.4 in the implementation
8plan shall apply to implementation plans adopted pursuant to
9subdivision (a) on or after December 31, 2002.

10(B) For each project area to which subdivision (b) of Section
1133413 applies, the section addressing the agency developed and
12project area housing shall contain:

13(i) Estimates of the number of new, substantially rehabilitated
14or price restricted residential units to be developed or purchased
15within one or more project areas, both over the life of the plan and
16during the next 10 years.

17(ii) Estimates of the number of units of very low, low-, and
18moderate-income households required to be developed within one
19or more project areas in order to meet the requirements of
20paragraph (2) of subdivision (b) of Section 33413, both over the
21life of the plan and during the next 10 years.

22(iii) The statement of the number of units of very low, low-,
23and moderate-income households which have been developed over
24the life of the plan within one or more project areas which meet
25the requirements of subdivision (b) of Section 33413.

26(iv) Estimates of the number of agency developed residential
27units which will be developed during the next five years, if any,
28which will be governed by paragraph (1) of subdivision (b) of
29Section 33413.

30(v) Estimates of the number of agency developed units for very
31low, low-, and moderate-income households which will be
32developed by the agency during the next five years to meet the
33requirements of paragraph (1) of subdivision (b) of Section 33413.

34(C) The section addressing Section 33333.10, if applicable, and
35Section 33334.4 shall contain all of the following:

36(i) The proposed amount of expenditures from the Low and
37Moderate Income Housing Fund for the new construction,
38acquisition and substantial rehabilitation, or preservation of housing
39for persons of extremely low, very low, or low income during each
40year of the implementation plan period.

P55   1(ii) The total population of the community and the population
2under 65 years of age as reported in the most recent census of the
3United States Census Bureau.

4(iii) A housing program that provides a detailed schedule of
5actions the agency is undertaking or intends to undertake to ensure
6expenditure of the Low and Moderate Income Housing Fund in
7the proportions required by Section 33333.10, if applicable, and
8Section 33334.4.

9(iv) For the previous implementation plan period, the number,
10the location, and level of affordability of units newly constructed
11without agency assistance and that are required to be affordable
12to, and occupied by, persons of low, very low, or extremely low
13income for at least 55 years for rental housing or 45 years for home
14ownership housing, and the amount of Low and Moderate Income
15Housing Fund moneys utilized to assist housing units available to
16families with children, and the number, location, and level of
17affordability of those units.

18(v) A demonstration, based on substantial evidence in the plan,
19that as of the end of the immediately preceding 5-year
20implementation planning period, the agency’s aggregate
21expenditures from the Low and Moderate Income Housing Fund,
22exclusive of debt service payments, between the end of the last
2310-year implementation period referenced in paragraph (1) of
24subdivision (a) of Section 33334.4 and the end of the immediately
25preceding 5-year implementation planning period satisfy the
26proportionality requirements set forth in paragraph (2) of
27subdivision (a) of Section 33334.4.

28(3) If the implementation plan contains a project that will result
29in the destruction or removal of dwelling units that will have to
30be replaced pursuant to subdivision (a) of Section 33413, the
31implementation plan shall identify proposed locations suitable for
32those replacement dwelling units.

33If the implementation plan contains a project that has resulted
34in the destruction or removal of dwelling units that must be
35replaced pursuant to subdivision (a) of Section 33413, the
36implementation plan shall identify either of the following:

37(A) The replacement dwelling units that satisfy each replacement
38housing obligation.

P56   1(B) In the case where dwelling units have been destroyed or
2removed, but replacement units are not yet complete, the proposed
3location of the replacement dwelling units.

4(4) The implementation plan shall include a complete accounting
5for compliance with the agency’s affordable housing obligations
6over the life of the plan, including the total number of units the
7agency is obligated to replace pursuant to subdivision (a) of Section
833413, the number of units the agency is obligated to produce
9pursuant to subdivision (b) of Section 33413, and the number of
10dwelling units that satisfy these obligations.

11(A) For each owner-occupied unit or rental unit counted towards
12meeting the agency obligations under subdivision (a) or (b) of
13Section 33413 and required to be included in the database required
14pursuant to subdivision (c) of Section 33418, or for each group of
15such units, if more than one unit is subject to the same covenant,
16the implementation plan shall identify all of the following:

17(i) The street address and assessor’s parcel number of the
18property and, for properties where units are listed as a group, the
19number of units.

20(ii) The size of each unit, measured by the number of bedrooms.

21(iii) The affordability level of each unit, according to the
22categories required by Section 33413.

23(iv) The year in which the construction or substantial
24rehabilitation of the unit was completed.

25(v) The date of recordation and document number of the
26affordability covenants or restrictions required under subdivision
27(f) of Section 33334.3 or subdivision (c) of Section 33413.

28(vi) The date on which the covenants or restrictions expire.

29(vii) For the projects developed prior to January 1, 2002, a
30statement of the effective period of the land use controls established
31in the plan at the time each unit was developed, in order to
32demonstrate that the duration of the covenants or restrictions
33extends for a period not less than the applicable period of land use
34controls, in accordance with then applicable law.

35(viii) For owner-occupied units that have changed ownership
36during the previous implementation plan period, the date and
37document number of the new affordability covenants or other
38documents recorded to ensure that the affordability restriction is
39enforceable and continues to run with the land.

P57   1(ix) Whether the unit counts towards a replacement obligation
2pursuant to subdivision (a) of Section 33413 or towards a
3production obligation pursuant to subdivision (b) of Section 33413.
4Units counted towards a replacement obligation shall reference
5the destroyed units they are replacing.

6(B) For each owner-occupied unit or rental unit counted towards
7meeting the agency obligations under subdivision (a) or (b) of
8Section 33413 and not required to be included in the database
9required pursuant to subdivision (c) of Section 33418, or for each
10group of such units, if more than one unit is subject to the same
11covenant, the implementation plan shall identify all of the
12following:

13(i) The street address and, if available, assessor’s parcel number
14of the property.

15(ii) For properties where units are listed as a group, the number
16of units.

17(iii) The affordability level of each unit, according to the
18categories required by Section 33413.

19(iv) The year in which the construction or substantial
20rehabilitation of the unit was completed.

21(v) The date of recordation and document number of the
22affordability covenants or restrictions required under subdivision
23(f) of Section 33334.3 or subdivision (c) of Section 33413.

24(vi) The date on which the covenants or restrictions expired.

25(vii) Whether the unit counts towards a replacement obligation
26pursuant to subdivision (a) of Section 33413 or towards a
27production obligation pursuant to subdivision (b) of Section 33413.
28Units counted towards a replacement obligation shall reference
29the destroyed units they are replacing.

30(5) Notwithstanding subparagraphs (A) and (E) of paragraph
31(4), the implementation plan shall omit any property used to
32confidentially house victims of domestic violence.

33(6) For a project area that is within six years of the time limit
34on the effectiveness of the redevelopment plan established pursuant
35to Section 33333.2, 33333.6, 33333.7, or 33333.10, the portion of
36the implementation plan addressing the housing responsibilities
37shall specifically address the ability of the agency to comply, prior
38to the time limit on the effectiveness of the redevelopment plan,
39with subdivision (a) of Section 33333.8, subdivision (a) of Section
4033413 with respect to replacement dwelling units, subdivision (b)
P58   1of Section 33413 with respect to project area housing, and the
2disposition of the remaining moneys in the Low and Moderate
3Income Housing Fund.

4(7) The implementation plan shall identify the fiscal year that
5the agency expects each of the following time limits to expire:

6(A) The time limit for the commencement for eminent domain
7proceedings to acquire property within the project area.

8(B) The time limit for the establishment of loans, advances, and
9indebtedness to finance the redevelopment project.

10(C) The time limit for the effectiveness of the redevelopment
11plan.

12(D) The time limit to repay indebtedness with the proceeds of
13property taxes.

14(b) For a project area for which a redevelopment plan is adopted
15on or after January 1, 1994, the implementation plan prepared
16pursuant to subdivision (c) of Section 33352 shall constitute the
17initial implementation plan and thereafter the agency after a public
18hearing shall adopt an implementation plan every five years
19commencing with the fifth year after the plan has been adopted.
20Agencies may adopt implementation plans that include more than
21one project area.

22(c) Every agency, at least once within the five-year term of the
23plan, shall conduct a public hearing and hear testimony of all
24interested parties for the purpose of reviewing the redevelopment
25plan and the corresponding implementation plan for each
26 redevelopment project within the jurisdiction and evaluating the
27progress of the redevelopment project. The hearing required by
28this subdivision shall take place no earlier than two years and no
29later than three years after the adoption of the implementation plan.
30For a project area that is within three years of the time limit on the
31effectiveness of the redevelopment plan established pursuant to
32Section 33333.2, 33333.6, 33333.7, or 33333.10, the review shall
33specifically address those items in paragraph (4) of subdivision
34(a). An agency may hold one hearing for two or more project areas
35if those project areas are included within the same implementation
36plan.

37(d) Notice of public hearings conducted pursuant to this section
38shall be published pursuant to Section 6063 of the Government
39Code, mailed at least three weeks in advance to all persons and
40agencies that have requested notice, and posted in at least four
P59   1permanent places within the project area for a period of three
2weeks. Publication, mailing, and posting shall be completed not
3less than 10 days prior to the date set for hearing.

4

SEC. 20.  

Section 33506 is added to the Health and Safety Code,
5to read:

6

33506.  

(a) A failure to meet any of the following obligations
7shall be an ongoing violation until the agency has fully met the
8obligation:

9(1) The obligation to eliminate project deficits pursuant to
10Sections 33334.6, 33487, 33492.16, and other similar and related
11provisions of law.

12(2) The obligation to expend or encumber excess surplus funds
13pursuant to Section 33334.12 and other similar and related
14provisions of law.

15(3) The obligation to provide relocation assistance pursuant to
16Article 9 (commencing with Section 33410), Section 7260 of the
17Government Code, or other applicable relocation laws.

18(4) The obligation to provide replacement housing pursuant to
19subdivision (a) of Section 33413, Article 9 (commencing with
20Section 33410), and other similar and related provisions of law.

21(5) The obligation to provide housing pursuant to subdivision
22(b) of Section 33413 and other similar and related provisions of
23law.

24(6) The obligation to monitor and enforce affordability covenants
25required pursuant to Section 33418.

26(7) The obligation to continue the project past the effectiveness
27date of the redevelopment plan pursuant to Section 33333.8.

28(8) The obligation to expend funds proportionately to assist
29housing for persons of extremely low, very low, or low income or
30to assist housing available to all persons regardless of age pursuant
31to Section 33334.4.

32(9) The obligations to record covenants that run with the land
33pursuant to subdivision (f) of Section 33334.3 and subdivision (c)
34of Sectionbegin delete 33413(c)end deletebegin insert 33413end insert.

35(b) This section is declaratory of existing law.

36

SEC. 21.  

Section 50464.5 is added to the Health and Safety
37Code
, to read:

38

50464.5.  

(a) The Redevelopment Agency Accountability Fund
39is hereby created in the State Treasury and is available, upon
40appropriation, to the department for the purposes of subdivision
P60   1(b). Notwithstanding Section 16305.7 of the Government Code,
2any moneys received by the department pursuant to Section 33460,
3and any other sources, repayments, interest, or new appropriations,
4shall be deposited in the fund. Moneys in the fund shall not be
5subject to transfer to any other fund pursuant to any provision of
6Part 2 (commencing with Section 16300) of Division 4 of Title 2
7of the Government Code, except the Surplus Money Investment
8Fund. The department may require the transfer of moneys in the
9fund to the Surplus Money Investment Fund for investment
10pursuant to Article 4 (commencing with Section 16470) of Chapter
113 of Part 2 of Division 4 of Title 2 of the Government Code.
12Notwithstanding Section 16305.7 of the Government Code, all
13interest, dividends, and pecuniary gains from the investments shall
14accrue to the fund.

15(b) With funds made available pursuant to subdivision (a), the
16department shall conduct audits of redevelopment agencies to
17ensure compliance with the housing provisions of the Community
18Redevelopment Law. The department shall include in the audits
19a review of agency compliance with production and replacement
20housing obligations, recording and monitoring of affordability
21covenants, provision of relocation assistance, propriety of deposits
22to and expenditures from the Low and Moderate Income Housing
23Fund, compliance with the debt limit of the agency, adoption of a
24legally sufficient implementation plan, each of the major audit
25violations pursuant to subdivision (j) of Section 33080.8, and any
26other accounting practice or provision of the Community
27Redevelopment Law in the discretion of the department. The
28department shall require that each agency take action to correct
29the audit violations. If the department determines that an agency
30has not corrected the audit violations within 180 days of a final
31audit report, it shall forward all relevant documents to the Attorney
32General for action pursuant to Section 33080.9. The department
33shall make available on its Internet Web site the final audit reports,
34a statement of any resolution of audit reports, or if not resolved,
35the date audit reports were forwarded to the Attorney General.

begin delete
36

SEC. 22.  

This act shall become operative only if Senate Bill
37341 of the 2012-13 Regular Session is enacted and becomes
38operative.

end delete
begin insert
39

begin insertSEC. 22.end insert  

This act shall apply only to an agency or authority
40created on or after January 1, 2014, that is required to comply
P61   1with, or is defined as an agency pursuant to, the Community
2Redevelopment Law (Part 1 (commencing with Section 33000) of
3Division 24 of the Health and Safety Code), and shall not apply
4to an agency that has assumed the housing assets and functions
5of a former redevelopment agency pursuant to Section 34176 of
6the Health and Safety Code.

end insert


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