Senate Bill No. 1129

Introduced by Senator Steinberg

February 19, 2014

An act to amend Sections 34177, 34177.5, 34180, 34191.3, 34191.4, and 34191.5 of the Health and Safety Code, relating to redevelopment.

LEGISLATIVE COUNSEL’S DIGEST

SB 1129, as introduced, Steinberg. Redevelopment: successor agencies to redevelopment agencies.

(1) Existing law dissolved redevelopment agencies and community development agencies as of February 1, 2012, and provides for the designation of successor agencies to wind down the affairs of the dissolved redevelopment agencies and to, among other things, make payments due for enforceable obligations and to perform obligations required pursuant to any enforceable obligation. Existing law requires the Department of Finance to issue a finding of completion to a successor agency upon confirmation by the county auditor-controller that specified payments have been fully made by the successor agency, as specified. Existing law prohibits a successor agency from entering into contracts with, incur obligations, or make commitments to, any entity, as specified, or to amend or modify existing agreements, obligations, or commitments with any entity, for any purpose.

This bill would authorize a successor agency, if the successor agency has received a finding of completion, to enter into, or amend existing, contracts and agreements, or otherwise administer projects in connection with enforceable obligations, if the contract, agreement, or project will not commit new property tax funds or otherwise adversely affect the flow of specified tax revenues or payments to the taxing agencies, as specified.

(2) Existing law authorizes a successor agency to oversee the development of properties until the contracted work has been completed or the contractual obligation of the former redevelopment agency can be transferred to other parties, and requires bond proceeds to be used for the purposes for which bonds were sold, except as specified.

This bill would authorize a successor agency to utilize the proceeds of bonds issued during the 2011 calendar year, upon the approval of the oversight board, if the oversight board, in consultation with the relevant metropolitan planning organization determines that the use of the bond proceeds is consistent with the sustainable communities strategy adopted by the metropolitan planning organization.

(3) Existing law authorizes a successor agency to petition the Department of Finance to provide written confirmation that its determination relating to an enforceable obligation that provides for an irrevocable commitment of property tax revenue, as specified, is final and conclusive, and reflects the department’s approval of subsequent payments made pursuant to the enforceable obligation.

This bill would require the removal of an enforceable obligation from a recognized obligation payment schedule that has received a finding of completion from the department to be submitted to the oversight board for review and approval.

(4) Existing law requires a city, county, or city and county that wishes to retain any properties or other assets for future redevelopment activities, funded from its own funds and under its own auspices, to reach a compensation agreement with the other taxing entities to provide payments to them in proportion to their shares of the base property tax for the value of the property retained, as specified.

This bill would specify that these provisions do not apply to the disposition of properties pursuant to a long-range property management plan.

(5) Existing law requires the disposition of assets and properties of the former redevelopment agency as directed by the oversight board, as specified, and suspends these requirements until the Department of Finance has approved a long-range property management plan, as specified. Upon approval of a long-range property management plan, the plan governs and supersedes, all other provisions relating to the disposition and use of the real property assets of the former redevelopment agency. Existing law requires the property of a former redevelopment agency to be disposed of according to law if the department has not approved a long-range property management plan by January 1, 2015.

This bill would prohibit the department from requiring compensation agreements as part of the approval of a long-range property management plan and would specify the criteria the department may consider in approving a long-range property management plan. The bill would additionally delete the requirement that the department approve a plan by January 1, 2015, and instead require the department to approve long-range property management plans as expeditiously as possible.

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

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

SECTION 1.  

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

34177.  

Successor agencies are required to do all of the
following:

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

(1) On and after February 1, 2012, and until a Recognized
Obligation Payment Schedule becomes operative, only payments
required pursuant to an enforceable obligations payment schedule
shall be made. The initial enforceable obligation payment schedule
shall be the last schedule adopted by the redevelopment agency
under Section 34169. However, payments associated with
obligations excluded from the definition of enforceable obligations
by paragraph (2) of subdivision (d) of Section 34171 shall be
excluded from the enforceable obligations payment schedule and
be removed from the last schedule adopted by the redevelopment
agency under Section 34169 prior to the successor agency adopting
it as its enforceable obligations payment schedule pursuant to this
subdivision. The enforceable obligation payment schedule may
be amended by the successor agency at any public meeting and
shall be subject to the approval of the oversight board as soon as
the board has sufficient members to form a quorum. In recognition
of the fact that the timing of the California Supreme Court’s ruling
in the case California Redevelopment Association v. Matosantos
(2011) 53 Cal.4th 231 delayed the preparation by successor
agencies and the approval by oversight boards of the January 1,
2012, through June 30, 2012, Recognized Obligation Payment
Schedule, a successor agency may amend the Enforceable
Obligation Payment Schedule to authorize the continued payment
of enforceable obligations until the time that the January 1, 2012,
through June 30, 2012, Recognized Obligation Payment Schedule
has been approved by the oversight board and by the Department
of Finance.

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

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

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

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

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

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

(d) Remit unencumbered balances of redevelopment agency
funds to the county auditor-controller for distribution to the taxing
entities, including, but not limited to, the unencumbered balance
of the Low and Moderate Income Housing Fund of a former
redevelopment agency. In making the distribution, the county
auditor-controller shall utilize the same methodology for allocation
and distribution of property tax revenues provided in Section
34188.

(e) Dispose of assets and properties of the former redevelopment
agency as directed by the oversight board; provided, however, that
the oversight board may instead direct the successor agency to
transfer ownership of certain assets pursuant to subdivision (a) of
Section 34181. The disposal is to be done expeditiously and in a
manner aimed at maximizing value. Proceeds from asset sales and
related funds that are no longer needed for approved development
projects or to otherwise wind down the affairs of the agency, each
as determined by the oversight board, shall be transferred to the
county auditor-controller for distribution as property tax proceeds
under Section 34188. The requirements of this subdivision shall
not apply to a successor agency that has been issued a finding of
completion by the Department of Finance pursuant to Section
34179.7.

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

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

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

(i)  begin insert (1) end insert begin insert   end insert Continue to oversee development of properties until the
contracted work has been completed or the contractual obligations
of the former redevelopment agency can be transferred to other
parties. Bond proceeds shall be used for the purposes for which
bonds were sold unless the purposes can no longer be achieved,
in which case, the proceeds may be used to defease the bonds.

begin insert

(2) Utilize, in accordance with paragraph (1) the proceeds of
bonds issued during the year 2011, upon approval of the oversight
board, if the oversight board, in consultation with the appropriate
metropolitan planning organization, determines that the use of the
bond proceeds is consistent with the sustainable communities
strategy adopted by the metropolitan planning organization.

end insert

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

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

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

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

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

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

(A) Low and Moderate Income Housing Fund.

(B) Bond proceeds.

(C) Reserve balances.

(D) Administrative cost allowance.

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

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

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

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

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

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

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

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

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

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

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

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

SEC. 2.  

Section 34177.5 of the Health and Safety Code is
amended to read:

34177.5.  

(a) In addition to the powers granted to each
successor agency, and notwithstanding anything in the act adding
this part, including, but not limited to, Sections 34162 and 34189,
a successor agency shall have the authority, rights, and powers of
the redevelopment agency to which it succeeded solely for the
following purposes:

(1) For the purpose of issuing bonds or incurring other
indebtedness to refund the bonds or other indebtedness of its former
redevelopment agency or of the successor agency to provide
savings to the successor agency, provided that (A) the total interest
cost to maturity on the refunding bonds or other indebtedness plus
the principal amount of the refunding bonds or other indebtedness
shall not exceed the total remaining interest cost to maturity on
the bonds or other indebtedness to be refunded plus the remaining
principal of the bonds or other indebtedness to be refunded, and
(B) the principal amount of the refunding bonds or other
indebtedness shall not exceed the amount required to defease the
refunded bonds or other indebtedness, to establish customary debt
service reserves, and to pay related costs of issuance. If the
foregoing conditions are satisfied, the initial principal amount of
the refunding bonds or other indebtedness may be greater than the
outstanding principal amount of the bonds or other indebtedness
to be refunded. The successor agency may pledge to the refunding
bonds or other indebtedness the revenues pledged to the bonds or
other indebtedness being refunded, and that pledge, when made
in connection with the issuance of such refunding bonds or other
indebtedness, shall have the same lien priority as the pledge of the
bonds or other obligations to be refunded, and shall be valid,
binding, and enforceable in accordance with its terms.

(2) For the purpose of issuing bonds or other indebtedness to
finance debt service spikes, including balloon maturities, provided
that (A) the existing indebtedness is not accelerated, except to the
extent necessary to achieve substantially level debt service, and
(B) the principal amount of the bonds or other indebtedness shall
not exceed the amount required to finance the debt service spikes,
including establishing customary debt service reserves and paying
related costs of issuance.

(3) For the purpose of amending an existing enforceable
obligation under which the successor agency is obligated to
reimburse a political subdivision of the state for the payment of
debt service on a bond or other obligation of the political
subdivision, or to pay all or a portion of the debt service on the
bond or other obligation of the political subdivision to provide
savings to the successor agency, provided that (A) the enforceable
obligation is amended in connection with a refunding of the bonds
or other obligations of the political subdivision so that the
enforceable obligation will apply to the refunding bonds or other
refunding indebtedness of the political subdivision, (B) the total
interest cost to maturity on the refunding bonds or other
indebtedness plus the principal amount of the refunding bonds or
other indebtedness shall not exceed the total remaining interest
cost to maturity on the bonds or other indebtedness to be refunded
plus the remaining principal of the bonds or other indebtedness to
be refunded, and (C) the principal amount of the refunding bonds
or other indebtedness shall not exceed the amount required to
defease the refunded bonds or other indebtedness, to establish
customary debt service reserves and to pay related costs of
issuance. The pledge set forth in that amended enforceable
obligation, when made in connection with the execution of the
amendment of the enforceable obligation, shall have the same lien
priority as the pledge in the enforceable obligation prior to its
amendment and shall be valid, binding, and enforceable in
accordance with its terms.

(4) For the purpose of issuing bonds or incurring other
indebtedness to make payments under enforceable obligations
when the enforceable obligations include the irrevocable pledge
of property tax increment, formerly tax increment revenues prior
to the effective date of this part, or other funds and the obligation
to issue bonds secured by that pledge. The successor agency may
pledge to the bonds or other indebtedness the property tax revenues
and other funds described in the enforceable obligation, and that
pledge, when made in connection with the issuance of the bonds
or the incurring of other indebtedness, shall be valid, binding, and
enforceable in accordance with its terms. This paragraph shall not
be deemed to authorize a successor agency to increase the amount
of property tax revenues pledged under an enforceable obligation
or to pledge any property tax revenue not already pledged pursuant
to an enforceable obligation. This paragraph does not constitute a
change in, but is declaratory of, the existing law.

(b) The refunding bonds authorized under this section may be
issued under the authority of Article 11 (commencing with Section
53580) of Chapter 3 of Part 1 of Division 2 of Title 5 of the
Government Code, and the refunding bonds may be sold at public
or private sale, or to a joint powers authority pursuant to the
Marks-Roos Local Bond Pooling Act (Article 4 (commencing with
Section 6584) of Chapter 5 of Division 7 of Title 1 of the
Government Code).

(c) (1) Prior to incurring any bonds or other indebtedness
pursuant to this section, the successor agency may subordinate to
the bonds or other indebtedness the amount required to be paid to
an affected taxing entity pursuant to paragraph (1) of subdivision
(a) of Section 34183, provided that the affected taxing entity has
approved the subordinations pursuant to this subdivision.

(2) At the time the successor agency requests an affected taxing
entity to subordinate the amount to be paid to it, the successor
agency shall provide the affected taxing entity with substantial
evidence that sufficient funds will be available to pay both the debt
service on the bonds or other indebtedness and the payments
required by paragraph (1) of subdivision (a) of Section 34183,
when due.

(3) Within 45 days after receipt of the agency’s request, the
affected taxing entity shall approve or disapprove the request for
subordination. An affected taxing entity may disapprove a request
for subordination only if it finds, based upon substantial evidence,
that the successor agency will not be able to pay the debt service
payments and the amount required to be paid to the affected taxing
entity. If the affected taxing entity does not act within 45 days after
receipt of the agency’s request, the request to subordinate shall be
deemed approved and shall be final and conclusive.

(d) An action may be brought pursuant to Chapter 9
(commencing with Section 860) of Title 10 of Part 2 of the Code
of Civil Procedure to determine the validity of bonds or other
obligations authorized by this section, the pledge of revenues to
those bonds or other obligations authorized by this section, the
legality and validity of all proceedings theretofore taken and, as
provided in the resolution of the legislative body of the successor
agency authorizing the bonds or other obligations authorized by
this section, proposed to be taken for the authorization, execution,
issuance, sale, and delivery of the bonds or other obligations
authorized by this section, and for the payment of debt service on
the bonds or the payment of amounts under other obligations
authorized by this section. Subdivision (c) of Section 33501 shall
not apply to any such action. The Department of Finance shall be
notified of the filing of any action as an affected party.

(e) Notwithstanding any other law, including, but not limited
to, Section 33501, an action to challenge the issuance of bonds,
the incurrence of indebtedness, the amendment of an enforceable
obligation, or the execution of a financing agreement by a successor
agency shall be brought within 30 days after the date on which the
oversight board approves the resolution of the successor agency
approving the issuance of bonds, the incurrence of indebtedness,
the amendment of an enforceable obligation, or the execution of
a financing agreement authorized under this section.

(f) The actions authorized in this section shall be subject to the
approval of the oversight board, as provided in Section 34180.
Additionally, an oversight board may direct the successor agency
to commence any of the transactions described in subdivision (a)
so long as the successor agency is able to recover its related costs
in connection with the transaction. After a successor agency, with
approval of the oversight board, issues any bonds, incurs any
indebtedness, or executes an amended enforceable obligation
pursuant to subdivision (a), the oversight board shall not
unilaterally approve any amendments to or early termination of
the bonds, indebtedness, or enforceable obligation. If, under the
authority granted to it by subdivision (h) of Section 34179, the
Department of Finance either reviews and approves or fails to
request review within five business days of an oversight board
approval of an action authorized by this section, the scheduled
payments on the bonds or other indebtedness shall be listed in the
Recognized Obligation Payment Schedule and shall not be subject
to further review and approval by the department or the Controller.
The department may extend its review time to 60 days for actions
authorized in this section and may seek the assistance of the
Treasurer in evaluating proposed actions under this section.

(g) Any bonds, indebtedness, or amended enforceable obligation
authorized by this section shall be considered indebtedness incurred
by the dissolved redevelopment agency, with the same legal effect
as if the bonds, indebtedness, financing agreement, or amended
enforceable obligation had been issued, incurred, or entered into
prior to June 29, 2011, in full conformity with the applicable
provisions of the Community Redevelopment Law that existed
prior to that date, shall be included in the successor agency’s
Recognized Obligation Payment Schedule, and shall be secured
by a pledge of, and lien on, and shall be repaid from moneys
deposited from time to time in the Redevelopment Property Tax
Trust Fund established pursuant to subdivision (c) of Section
34172, as provided in paragraph (2) of subdivision (a) of Section
34183. Property tax revenues pledged to any bonds, indebtedness,
or amended enforceable obligations authorized by this section are
taxes allocated to the successor agency pursuant to subdivision (b)
of Section 33670 and Section 16 of Article XVI of the California
Constitution.

(h) The successor agency shall make diligent efforts to ensure
that the lowest long-term cost financing is obtained. The financing
shall not provide for any bullets or spikes and shall not use variable
rates. The successor agency shall make use of an independent
financial advisor in developing financing proposals and shall make
the work products of the financial advisor available to the
Department of Finance at its request.

(i)  begin insert (1) end insert begin insert   end insert If an enforceable obligation provides for an irrevocable
commitment of property tax revenue and where allocation of such
revenues is expected to occur over time, the successor agency may
petition the Department of Finance to provide written confirmation
that its determination of such enforceable obligation as approved
in a Recognized Obligation Payment Schedule is final and
conclusive, and reflects the department’s approval of subsequent
payments made pursuant to the enforceable obligation. If the
confirmation is granted, then the department’s review of such
payments in future Recognized Obligation Payment Schedules
shall be limited to confirming that they are required by the prior
enforceable obligation.

begin insert

(2) Prior to removal of an enforceable obligation from a
recognized obligation payment schedule for a successor agency
that has received a finding of completion from the Department of
Finance under Section 34179.7, the action shall be submitted to
the oversight board for review and approval.

end insert

(j) The successor agency may request that the department
provide a written determination to waive the two-year statute of
limitations on an action to review the validity of the adoption or
amendment of a redevelopment plan pursuant to subdivision (c)
of Section 33500 or on any findings or determinations made by
the agency pursuant to subdivision (d) of Section 33500. The
department at its discretion may provide a waiver if it determines
it is necessary for the agency to fulfill an enforceable obligation.

SEC. 3.  

Section 34180 of the Health and Safety Code is
amended to read:

34180.  

All of the following successor agency actions shall first
be approved by the oversight board:

(a) The establishment of new repayment terms for outstanding
loans where the terms have not been specified prior to the date of
this part. An oversight board shall not have the authority to
reestablish loan agreements between the successor agency and the
city, county, or city and county that formed the redevelopment
agency except as provided in Chapter 9 (commencing with Section
34191.1).

(b) The issuance of bonds or other indebtedness or the pledge
or agreement for the pledge of property tax revenues (formerly tax
increment prior to the effective date of this part) pursuant to
subdivision (a) of Section 34177.5.

(c) Setting aside of amounts in reserves as required by
indentures, trust indentures, or similar documents governing the
issuance of outstanding redevelopment agency bonds.

(d) Merging of project areas.

(e) Continuing the acceptance of federal or state grants, or other
forms of financial assistance from either public or private sources,
if that assistance is conditioned upon the provision of matching
funds, by the successor entity as successor to the former
redevelopment agency, in an amount greater than 5 percent.

(f) (1) If a city, county, or city and county wishes to retain any
properties or other assets for future redevelopment activities,
funded from its own funds and under its own auspices, it must
reach a compensation agreement with the other taxing entities to
provide payments to them in proportion to their shares of the base
property tax, as determined pursuant to Section 34188, for the
value of the property retained.

(2) If no other agreement is reached on valuation of the retained
assets, the value will be the fair market value as of the 2011
property tax lien date as determined by an independent appraiser
approved by the oversight board.

begin insert

(3) This subdivision does not apply to the disposition of
properties pursuant to a long-range property management plan.

end insert

(g) Establishment of the Recognized Obligation Payment
Schedule.

(h) A request by the successor agency to enter into an agreement
with the city, county, or city and county that formed the
redevelopment agency that it is succeeding. An oversight board
shall not have the authority to reestablish loan agreements between
the successor agency and the city, county, or city and county that
formed the redevelopment agency except as provided in Chapter
9 (commencing with Section 34191.1). Any actions to reestablish
any other agreements that are in furtherance of enforceable
obligations, with the city, county, or city and county that formed
the redevelopment agency are invalid until they are included in an
approved and valid Recognized Obligation Payment Schedule.

(i) A request by a successor agency or taxing entity to pledge,
or to enter into an agreement for the pledge of, property tax
revenues pursuant to subdivision (b) of Section 34178.

(j) Any document submitted by a successor agency to an
oversight board for approval by any provision of this part shall
also be submitted to the county administrative officer, the county
auditor-controller, and the Department of Finance at the same time
that the successor agency submits the document to the oversight
board.

SEC. 4.  

Section 34191.3 of the Health and Safety Code is
amended to read:

34191.3.  

Notwithstanding Section 34191.1, the requirements
specified in subdivision (e) of Section 34177 and subdivision (a)
of Section 34181 shall be suspended, except as those provisions
apply to the transfers for governmental use, until the Department
of Finance has approved a long-range property management plan
pursuant to subdivision (b) of Section 34191.5, at which point the
plan shall govern, and supersede all other provisions relating to,
the disposition and use of the real property assets of the former
redevelopment agency begin insert , including, but not limited to, subdivision
(f) of Section 34180 end insert . begin delete If the department has not approved a plan by
January 1, 2015, subdivision (e) of Section 34177 and subdivision
(a) of Section 34181 shall be operative with respect to that
successor agency. end delete

SEC. 5.  

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

34191.4.  

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

(a) All real property and interests in real property identified in
subparagraph (C) of paragraph (5) of subdivision (c) of Section
34179.5 shall be transferred to the Community Redevelopment
Property Trust Fund of the successor agency upon approval by the
Department of Finance of the long-range property management
plan submitted by the successor agency pursuant to subdivision
(b) of Section 34191.7 unless that property is subject to the
requirements of any existing enforceable obligation.

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

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

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

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

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

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

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

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

begin insert

(d) Notwithstanding subdivision (b) of Section 34163, if a
successor agency has received a finding of completion, the
successor agency may enter into, or amend existing, contracts and
agreements, or otherwise administer projects in connection with
enforceable obligations approved pursuant to subdivision (m) of
Section 34177, including the substitution of private developer
capitol in a disposition and development agreement that has been
deemed an enforceable obligation, if the contract, agreement, or
project will not commit new property tax funds, and will not
otherwise reduce property tax revenues or payments made pursuant
to paragraph (4) of subdivision (a) of Section 34183 to the taxing
agencies.

end insert

SEC. 6.  

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

34191.5.  

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

begin insert

(d) The department shall not require a compensation agreement
or agreements as part of the approval of a long-range property
management plan.

end insert begin insert

(e) The department shall only consider whether the long-range
property management plan makes a good faith effort to address
the requirements set forth in subdivision (c).

end insert begin insert

(f) The department shall approve long-range property
management plans as expeditiously as possible.

end insert

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CORRECTIONS:

Text--Page 20.

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