BILL NUMBER: SB 1404 AMENDED
BILL TEXT
AMENDED IN SENATE APRIL 23, 2014
AMENDED IN SENATE APRIL 7, 2014
INTRODUCED BY Senator Leno
FEBRUARY 21, 2014
An act to amend Section Sections
33333.7 and 34180 of the Health and Safety Code, relating
to redevelopment.
LEGISLATIVE COUNSEL'S DIGEST
SB 1404, as amended, Leno. San Francisco redevelopment: successor
agencies: housing.
The Community Redevelopment Law authorizes the establishment of
redevelopment agencies in communities to address the effects of
blight, as defined. Existing law dissolved redevelopment agencies as
of February 1, 2012, and provides for the designation of successor
agencies that are required to wind down the affairs of the dissolved
redevelopment agencies and to, among other things, make payments due
for enforceable obligations. Existing law provides that the city,
county, or city and county that authorized the creation of a
redevelopment agency may elect to retain the housing assets and
functions previously performed by the redevelopment agency. Existing
law requires the entity assuming the housing functions of the former
redevelopment agency to perform various functions.
Existing law authorized the former Redevelopment Agency of the
City and County of San Francisco, subject to the approval of the
board of supervisors of that city and county, to incur indebtedness
exclusively for specified Low and Moderate Income Housing Fund
activities until January 1, 2014, or until the agency replaced all of
the housing units demolished prior to the enactment of the
replacement housing obligations, and to receive tax increment
revenues to repay indebtedness incurred for those activities until no
later than January 1, 2044, as specified.
This bill would state findings and declarations relating to the
obligation of the successor agency to the former Redevelopment Agency
of the City and County of San Francisco to replace specified
affordable housing units , and the necessity of a special
statute .
This bill would instead authorize the successor agency of the City
and County of San Francisco, subject to the approval of the
oversight board of the City and County of San Francisco, to continue
to receive property tax increment from specified redevelopment
project areas, and to incur indebtedness pursuant to specified
amended redevelopment plans, to fulfill the obligation to replace
specified affordable housing units.
Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The Legislature finds and declares all of the
following:
(a) Under the authority granted by the Legislature in Senate Bill
No. 2113 (Chapter 661 of the Statutes of 2000), the former
Redevelopment Agency of the City and County of San Francisco sought,
prior to its dissolution, to redress the demolition of a substantial
number of residential dwelling units affordable to very low, low-,
and moderate-income households during the agency's earlier urban
renewal efforts. In 2003, the California Department of Housing and
Community Development determined that the former Redevelopment Agency
must replace a net loss of 6,709 affordable units.
(b) Prior to its dissolution, the Redevelopment Agency of the City
and County of San Francisco sought and received state and local
authorization to assume the replacement housing obligations
acknowledged in Senate Bill No. 2113 (Chapter 661 of the Statutes of
2000). Between 2005 and 2009, the Board of Supervisors of the City
and County of San Francisco amended six redevelopment plans to extend
the time for the receipt and expenditure of tax increment for the
sole purpose of funding the replacement housing obligations. San
Francisco Ordinance No. 256-09 (December 18, 2009), amending Yerba
Buena Center Redevelopment Plan, San Francisco Ordinance No. 316-08
(December 19, 2008), amending Western Addition A-2 Redevelopment
Plan, San Francisco Ordinance No. 115-07 (May 18, 2007), amending
Rincon Point-South Beach Redevelopment Plan, and San Francisco
Ordinance No. 15-05 (January 21, 2005), amending the
Embarcadero-Lower Market (Golden Gateway) Redevelopment Plan, the
Hunters Point Redevelopment Plan, and the India Basin Redevelopment
Plan. Under these redevelopment plan amendments, the Redevelopment
Agency was able to finance the construction of 867 affordable units.
(c) It is the intent of the Legislature to confirm that the
replacement of the remaining 5842 units that the former Redevelopment
Agency of the City and County of San Francisco destroyed and did not
replace is a statutory obligation that agencies
remains under Assembly Bill No. 26 (Chapter 5 of the First
Extraordinary Session of the Statutes of 2011), as amended by
Assembly Bill No. 1484 (Chapter 26 of the Statutes of 2012).
Furthermore, the Legislature finds that the ability of the Successor
Agency to the Redevelopment Agency of the City and County of San
Francisco to fulfill this replacement housing obligation is dependent
on its ability to incur indebtedness for the purpose of financing
the remaining unbuilt units.
(d) Authorizing the Successor Agency to the Redevelopment Agency
of the City and County of San Francisco to continue to receive
property tax revenues under the formulas of Senate Bill No. 2113,
which ensure that school entities receive their full share of
property tax revenues as if the redevelopment plans had expired, will
not have a fiscal impact on the state.
(e) San Francisco's housing situation is unique, in that median
rents and sales prices are among the highest in the state even though
it exceeded the housing production goals of the Community
Redevelopment Law and used local funds beyond redevelopment funding
to assist affordable housing development. Nonetheless, San Francisco'
s early redevelopment activities, including the removal of previously
existing dwelling units serving a lower income population, have
compounded the effects of the private market that have led to the
city's current affordable housing crisis. Because of the unique
circumstances relating to the replacement of affordable housing
demolished by the former Redevelopment Agency of the City and County
of San Francisco, a special law is necessary and a general law
cannot be made applicable within the meaning of Section 16 of
Article IV of the California Constitution.
(f) After dissolution of the redevelopment agency, the oversight
board for the City and County of San Francisco acknowledged the
unfulfilled replacement housing obligations of the redevelopment
agency and approved the successor agency's expenditures of funds to
fulfill those obligations (see Oversight Board Resolution No. 5-2012
at pp. 5-6 (April 10, 2012)). Subsequently, the oversight board
approved expenditures for the replacement housing obligations on each
of the recognized obligation payment schedules required under
Redevelopment Dissolution Law and submitted to the Department of
Finance.
SEC. 2. Section 33333.7 of the Health and Safety Code is amended
to read:
33333.7. (a) The successor agency to the Redevelopment Agency of
the City and County of San Francisco may, subject to the approval of
the oversight board of the City and County of San Francisco, replace
all of the housing units demolished prior to the enactment of the
replacement housing obligations in Chapter 970 of the Statutes of
1975 and further described in Section 3333.7 of the Health and Safety
Code, as added by Chapter 661 of the Statutes of 2000. The successor
agency shall not use more than six redevelopment project areas under
redevelopment plans that were amended for this purpose prior to
enactment of the law dissolving redevelopment agencies, and that may
be merged, subject to approval by the oversight board pursuant to
subdivision (d) of Section 34180, to fulfill these replacement
housing obligations.
(b) In addition to the powers granted to each successor agency,
and notwithstanding anything in Part 1.8 (commencing with Section
34161) and Part 1.85 (commencing with Section 34170), including, but
not limited to, Sections 34162 and 34189, the successor agency to the
former redevelopment agency of the City and County of San Francisco
shall have the authority, rights, and powers of the Redevelopment
Agency of the City and County of San Francisco, subject to the
approval of the Oversight Board of the City and County of San
Francisco, and may incur indebtedness, backed by property tax
revenues from the six project areas referenced in subdivision (a)
exclusively for the purpose of fulfilling the replacement housing
obligations, provided, however, that the standards for issuance of
bonds specified in subdivisions (c) to (h), inclusive, of Section
34177.5, as that section read on December 31, 2014, shall apply to
the sale of those bonds and shall include review and approval by
the oversight board and the Department of Finance under subdivision
(b) of Section 34180 and subdivision (h) of Section 34179,
respectively . Bonds issued pursuant to this subdivision may be
sold pursuant to either a negotiated or competitive sale. Any time
limit on incurring debt or receiving property tax revenues to repay
that debt, pursuant to this subdivision, shall not apply until the
successor agency replaces all of the units demolished prior to the
enactment of the replacement housing obligations in Chapter 970 of
the Statutes of 1975. The successor agency may issue new bonds or
other obligations on a parity basis with outstanding bonds or other
obligations of the successor agency relating to the six project areas
referenced in subdivision (a), and may pledge the revenues pledged
to those outstanding bonds or other obligations to a new issuance of
bonds or other obligation, and that pledge, when made in connection
with the issuance of those bonds or other obligations shall have the
same lien priority as the pledge of outstanding bonds or other
obligations, and shall be valid, binding, and enforceable in
accordance with its terms.
(c) Annual revenues authorized under this section shall not exceed
the amount necessary to fund the activities of the successor agency
in fulfilling these replacement housing obligations. The agency shall
neither collect nor spend more than 10 percent for the planning and
administrative costs authorized pursuant to subdivision (e) of
Section 33334.3. Revenues received under this subdivision
shall not exceed the amount of tax increment received and allocated
to the agency pursuant to the amended redevelopment plans, less the
amount necessary to pay prior outstanding indebtedness, and less the
amount of the project area's property tax revenue that school
entities are entitled to receive pursuant to Chapter 3 (commencing
with Section 75) and Chapter 6 (commencing with Section 95) of Part
0.5 of Division 1 of the Revenue and Taxation Code if the plan had
not been amended. Additionally, revenues collected under this
paragraph are subject to the payments to affected taxing entities
pursuant to Section 33607. Property tax revenues
allocated to the successor agency pursuant to this section shall be
distributed from the funds that are available for distribution to
nonschool entities from the Redevelopment Property Tax
Trust Fund, created pursuant to Section 34170.5, after all
preexisting legal commitments and statutory obligations funded from
that revenue, excluding replacement housing obligations described in
this section, are made pursuant to Part 1.85 (commencing with Section
34170) of Division 24. Property tax revenues allocated to the
successor agency pursuant to this section shall not include any
moneys that, notwithstanding the replacement housing obligations
described in this section, are payable to a school district that
maintains kindergarten and grades 1 to 12, inclusive, community
college districts, or to the Educational Revenue Augmentation Fund,
pursuant to paragraph (4) of subdivision (a) of Section 34183.
(d) The activities conducted with revenues received under this
paragraph section shall be consistent
with the affordable housing requirements of this part and the
policies and objectives of the community's housing element, and shall
address the unmet housing needs of very low, low- and
moderate-income households. The activities shall also be consistent
with the community's most recently approved consolidated and annual
action plans submitted to the United States Department of Housing and
Urban Development. No less than 50 percent of the revenues received
shall be devoted to assisting in the development of housing that is
affordable to very low income households.
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
Section 33333.7 and 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.
(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.