Amended in Senate June 18, 2015

California Legislature—2015–16 Regular Session

Assembly Bill No. 113

Introduced by Committee on Budget (Weber (Chair), Bloom, Bonta, Campos, Chiu, Cooper, Gordon, Jones-Sawyer, McCarty, Mullin, Nazarian, O’Donnell, Rodriguez, Thurmond, Ting, and Williams)

January 9, 2015

begin delete An act relating to the Budget Act of 2015. end delete begin insert An act to amend Sections 34171, 34173, 34176, 34176.1, 34177, 34177.3, 34177.5, 34178, 34179, 34179.7, 34180, 34181, 34183, 34186, 34187, 34189, 34191.3, 34191.4, and 34191.5 of, and to add Sections 34170.1, 34177.7, 34179.9, and 34191.6 to, the Health and Safety Code, and to amend Sections 96.11 and 98 of, and to add Section 96.24 to, the Revenue and Taxation Code, relating to local government, and making an appropriation therefor, to take effect immediately, bill related to the budget. end insert

LEGISLATIVE COUNSEL’S DIGEST

AB 113, as amended, Committee on Budget. begin delete Budget Act of 2015. end delete begin insert Local government. end insert

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(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.

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This bill would provide that any action by the Department of Finance, that occurred on or after June 28, 2011, carrying out the department’s obligations under the provisions described above constitute a department action for the preparation, development, or administration of the state budget and is exempt from the Administrative Procedures Act.

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(2) Existing law defines “administrative cost allowance” for the purposes of successor agencies’ duties in the winding down of the affairs of the dissolved redevelopment agencies to mean an amount that is payable from property tax revenues up to a certain percentage of the property tax allocated to the successor agency on the Recognized Obligation Payment Schedule covering a specified period, and up to a certain percentage of the property tax allocated to the Redevelopment Obligation Retirement Fund that is allocated to the successor agency for each fiscal year thereafter.

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This bill would restate the definition of “administrative cost allowance” as the maximum amount of administrative costs that may be paid by a successor agency from the Redevelopment Property Tax Trust Fund in a fiscal year. This bill would, commencing July 1, 2016, and for each fiscal year thereafter, limit the administrative cost allowance to an amount not to exceed 3% of the actual property tax distributed to the successor agency for payment of approved enforceable obligations, reduced by the successor agency’s administrative cost allowance and loan payments made to the city, county, or city and county that created the redevelopment agency, as specified, and would limit a successor agency’s annual administrative costs to an amount not to exceed 50% of the total Redevelopment Property Tax Trust Fund distributed to pay enforceable obligations.

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(3) Existing law excludes from the term “administrative cost allowance” any administrative costs that can be paid from bond proceeds or from sources other than property tax, any expenses related to assets or obligations, settlements and judgments, and the costs of maintaining assets prior to disposition.

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This bill would delete these exclusions and would further require the “administrative cost allowance” to be approved by the oversight board and to be the sole funding source for any legal expenses related to civil actions contesting the validity of laws and actions dissolving and winding down the redevelopment agencies, as specified.

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(4) Existing law specifies that the term “enforceable obligation” does not include any agreements, contracts, or arrangements between the city, county, or city and county that created the redevelopment agency and the former redevelopment agency, as specified. Notwithstanding this provision, existing law authorizes certain written agreements to be deemed enforceable obligations.

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This bill would additionally authorize written agreements entered into at the time of issuance, but in no event later than June 27, 2011, solely for the refunding or refinancing of other indebtedness obligations that existed prior to January 1, 2011, and solely for the purpose of securing or repaying the refunded or refinanced indebtedness obligations, to be deemed enforceable obligations. This bill would provide that an agreement entered into by the redevelopment agency prior to June 28, 2011, is an enforceable obligation if the agreement relates to state highway infrastructure improvements, as specified.

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(5) Existing law authorizes the city, county, or city and county that authorized the creation of a redevelopment agency to loan or grant funds to a successor agency for administrative costs, enforceable obligations, or project related expenses at the city’s discretion.

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This bill would limit the authorization to loan or grant funds to the payment of administrative costs or enforceable obligations excluding loans approved pursuant to specified provisions, and to the case in which the successor agency receives an insufficient distribution from the Redevelopment Property Tax Trust Fund, or other approved sources of funding are insufficient, to pay approved enforceable obligations, as specified. This bill would require these loans to be repaid from the source of funds originally approved for payment of the underlying enforceable obligation, as specified. This bill would require the interest on these loans to be calculated on a fixed annual simple basis, and would specify the manner in which these loans are required to be repaid.

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(6) Existing law provides for the transfer of housing assets and functions previously performed by the dissolved redevelopment agency to one of several specified public entities. Existing law authorizes the successor housing entity to designate the use of, and commit, proceeds from indebtedness that were issued for affordable housing purposes prior to January 1, 2011, and were backed by the Low and Moderate Income Housing Fund.

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This bill would instead authorize a successor housing entity to designate the use of, and commit, proceeds from indebtedness that were issued for affordable housing purposes prior to June 28, 2011.

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(7) Existing law authorizes the city, county, or city and county that created a redevelopment agency to elect to retain the housing assets and functions previously performed by the redevelopment agency. Existing law requires that any funds transferred to the housing successor, together with any funds generated from housing assets, be maintained in a separate Low and Moderate Income Housing Asset Fund to be used in accordance with applicable housing-related provisions of the Community Redevelopment Law, except as specified. Existing law requires the housing successor to provide an annual independent financial audit of the fund to its governing body, and to post on its Internet Web site specified information.

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This bill would require that posted information to also include specified amounts received by the city, county, or city and county.

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(8) Existing law requires a successor agency to, among other things, prepare a Recognized Obligation Payment Schedule for payments on enforceable obligations for each 6-month fiscal period.

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This bill would revise the timeline for the preparation of the required Recognized Obligation Payment Schedule to require the successor agency to prepare a schedule for a one year fiscal period, with the first of these periods beginning July 1, 2016, and would authorize the Recognized Obligation Payment Schedule to be amended by the oversight board once per Recognized Obligation Payment Schedule period, if the oversight board makes a finding that a revision is necessary for the payment of approved enforceable obligations, as specified.

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This bill would, beginning August 1, 2015, require successor agencies to submit a Last and Final Recognized Obligation Payment Schedule, which shall list the remaining enforceable obligations of the successor agency and the total outstanding obligation and a schedule of remaining payments for each enforceable obligation, for approval by the oversight board and the Department of Finance if specified conditions are met. This bill would require the department to review the Last and Final Recognized Obligation Payment Schedule, as specified, and would require, upon approval by the department, the Last and Final Recognized Obligation Payment Schedule to establish the maximum amount of Redevelopment Property Tax Trust Funds to be distributed to the successor agency, as specified. This bill would authorize the successor agencies to submit no more than two requests to the department to amend the approved Last and Final Recognized Obligation Payment Schedule, except as specified. This bill would also require the county auditor-controller to review the Last and Final Recognized Obligation Payment Schedule and to continue to allocate to allocate moneys in the Redevelopment Property Tax Trust Fund in a specified order of priority.

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(9) Existing law prohibits successor agencies from creating new enforceable obligations, except in compliance with an enforceable obligation that existed prior to June 28, 2011. Notwithstanding this provision, existing law authorizes successor agencies to create enforceable obligations to conduct the work of winding down the redevelopment agency, including hiring staff, acquiring necessary professional administrative services and legal counsel, and procuring insurance. Existing law finds and declares that these provisions, when enacted, were declaratory of existing law.

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This bill, except as required by an enforceable obligation, would exclude certain work from the authorization to create enforceable obligations, and would prohibit a successor agency that is the city, county, or city and county that formed the redevelopment agency from creating enforceable obligations to repay loans entered into between the redevelopment agency and the city, county, or city and county, except as otherwise provided. This bill would delete those findings and declarations, and would apply the provisions described above retroactively to any successor agency or redevelopment agency actions occurring after June 27, 2012.

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(10) Existing law authorizes a successor agency to petition the Department of Finance, if an enforceable obligation provides for an irrevocable commitment of property tax revenue and the allocation of those revenues is expected to occur over time, to provide written confirmation that its determination of this enforceable obligation as approved in a Recognized Obligation Payment Schedule is final and conclusive.

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This bill would require the successor agency to petition the department by electronic means and in a manner of the department’s choosing, and would require the successor agency to provide a copy of the petition to the county auditor-controller, as provided. This bill would require the department to provide written confirmation of approval or denial of the request within 100 days of the date of the request.

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(11) Existing law provides that agreements, contracts, or arrangements between the city or county, or city and county that created the redevelopment agency and the redevelopment agency are invalid and shall not be binding on the successor agency, except that a successor entity wishing to enter or reenter into agreements with the city, county, or city and county that formed the redevelopment agency may do so upon obtaining approval of its oversight board. Existing law prohibits a successor agency or an oversight board from exercising these powers to restore funding for an enforceable obligation that was deleted or reduced by the Department of Finance, as provided.

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This bill would delete that prohibition, and would provide that a duly authorized written agreement entered into at the time of issuance, but in no event later than June 27, 2011, of indebtedness obligations solely for the refunding or refinancing of indebtedness obligations that existed prior to January 1, 2011, and solely for the purpose of securing or repaying the refunded and refinanced indebtedness obligations, is valid and may bind the successor agency.

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This bill would prohibit an oversight board from approving any agreements between the successor agency and the city, county, or city and county that formed the redevelopment agency, except as otherwise provided, and would prohibit a successor agency from entering or reentering into any agreements with the city, county, or city and county that formed the redevelopment agency, except as otherwise provided. This bill would also prohibit a successor agency or an oversight board from exercising any powers to restore funding for any item that was denied or reduced by the Department of Finance. This bill would apply these provisions retroactively to all agreements entered or reentered on and after June 27, 2012.

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(12) Existing law authorizes the Department of Finance to review an oversight board action and requires written notice and information about all actions taken by an oversight board to be provided to the department by electronic means and in a manner of the department’s choosing.

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This bill would require the written notice and information described above to be provided to the department as an approved resolution. This bill would provide that oversight boards are not required to submit certain actions for department approval.

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(13) Existing law requires, on and after July 1, 2016, in each county where more than one oversight board was created, as provided, that there be only one oversight board.

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This bill, except as otherwise provided, commencing on and after July 1, 2017, if more than one oversight board exists within a county, would require the oversight board to be staffed by the county auditor-controller, by another county entity selected by the county auditor-controller, or by a city within the county selected by the county auditor-controller, as specified. This bill would authorize the county auditor-controller, if only one successor agency exists within the county, to designate the successor agency to staff the oversight board. This bill, commencing July 1, 2017, in each county where more than 40 oversight boards were created, would require 5 oversight boards, as specified.

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(14) Existing law requires an oversight board for a successor agency to cease to exist when all of the indebtedness of the dissolved redevelopment agency has been repaid.

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This bill would instead generally require an oversight board to cease to exist when the successor agency has been formally dissolved, as specified, and would require a county oversight board to cease to exist when all successor agencies subject to its oversight have been formally dissolved, as specified.

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(15) Existing law, upon full payment by a successor agency of specified amounts due, requires the Department of Finance to issue a finding of completion, as specified, within 5 days.

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This bill, if a successor agency fails by December 31, 2015, to pay, or to enter into a written installment plan with the Department of Finance for payment of specified amounts, would prohibit the successor agency from ever receiving a finding of completion. This bill, if a successor agency, city, county, or city and county pays, or enters into a written installment plan with the Department of Finance for the payment of specified amounts and the successor agency, city, county, or city and county subsequently receives a final judicial determination that reduces or eliminates the amounts determined, would require an enforceable obligation to be created for the reimbursement of the excess amounts paid and the obligation to make any payments in excess of the amount determined by a final determination to be canceled. This bill, if upon consultation with the county auditor-controller, the Department of Finance finds that a successor agency, city, county, or city and county has failed to fully make one or more payments agreed to in the written installment plan, would prohibit specified provisions from applying to the successor agency and would prohibit specified oversight board actions and any approved long-range property management plan from being effective.

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(16) Existing law transfers all assets, properties, contracts, leases, books and records, buildings, and equipment of former redevelopment agencies, as of February 1, 2012, to the control of the successor agency for administration, as specified.

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This bill would require the city, county, or city and county that created the former redevelopment agency to return to the successor agency certain assets, cash and cash equivalents that were not required by an enforceable obligation, as specified, and other money or assets that were not required or authorized pursuant to an effective oversight board action or Recognized Obligation Payment Schedule. This bill would authorize certain amounts required to be returned to the successor agency to be placed on a Recognized Obligation Payment Schedule by the successor agency for payment as an enforceable obligation subject to specified conditions.

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(17) Existing law requires a request by a successor agency to enter into an agreement with the city, county, or city and county that formed the redevelopment agency to first be approved by the oversight board. Existing law provides that 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.

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This bill would also require a request by the successor agency to reenter into an agreement as described above to first be approved by the oversight board. This bill would also provide that actions to establish any other authorized agreements, as specified, are invalid until they are included in an approved and valid Recognized Obligation Payment Schedule.

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(18) Existing law requires the oversight board to direct the successor agency to, among other things, dispose of all assets and properties of the former redevelopment agency, except that the oversight board is authorized to instead direct the successor agency to transfer ownership of those assets that were constructed and used for a governmental purpose, such as roads, school buildings, parks, police and fire stations, libraries, and local agency administrative buildings, to the appropriate public jurisdiction, as provided.

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This bill would expand that authorization to include parking facilities and lots dedicated solely to public parking that do not include properties that generate revenues in excess of reasonable maintenance costs of the properties. This bill would authorize a successor agency to amend its long-range property management plan once, solely to allow for retention of real properties that constitute public parking lots, as provided.

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(19) Existing law requires, from February 1, 2012, to July 1, 2012, inclusive, and for each fiscal year thereafter, the county auditor-controller, after deducting administrative costs, to allocate property tax revenues in each Redevelopment Property Tax Trust Fund first to each local agency and school entity, as provided.

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This bill would require certain revenues attributable to a property tax rate approved by the voters of a city, county, city and county, or special district to make payments in support of pension programs or in support of capital projects and programs related to the State Water Project and levied in addition to the general property tax rate, be allocated to, and when collected be paid into, the fund of that taxing entity, unless those amounts are pledged as security for the payment of any indebtedness obligation.

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(20) Existing law requires certain estimates and accounts reported in recognized obligation payment schedules and transferred to the Redevelopment Obligation Retirement Fund to be subject to audit by the county auditor-controller and the Controller.

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This bill would instead require the estimates and accounts described above to be reviewed by the county auditor-controller subject to the Department of Finance’s review and approval. This bill would require a successor agency, commencing October 1, 2018, and each October 1 thereafter, to submit the differences between actual payments and past estimated obligations on a Recognized Obligation Payment Schedule to the county auditor-controller for review, and would require the county-auditor controller to provide this information to the Department of Finance, as specified.

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(21) Existing law requires a successor agency, when all of the debt of a redevelopment agency has been retired or paid off, to dispose of all remaining assets and terminate its existence within one year of the final debt payment.

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This bill would instead require, when all of the enforceable obligations have been retired or paid off, all real property has been disposed of, and all outstanding litigation has been resolved, the successor agency to submit to the oversight board a request, with a copy of the request to the county auditor-controller, to formally dissolve the successor agency. This bill would also require, if a redevelopment agency was not previously allocated property tax revenue, as specified, the successor agency to submit to the oversight board a request to formally dissolve the successor agency. This bill would require the oversight board to approve these requests within 30 days and to submit the request to the Department of Finance for approval or denial, as specified. This bill would require the successor agency to take specified steps, including notifying the oversight board, when the department approves a request to formally dissolve a successor agency. This bill would require the oversight board, upon receipt of notification from the successor agency, to make certain verifications and adopt a final resolution of dissolution for the successor agency, as specified. This bill would, when a successor agency is finally dissolved, with respect to any existing community facilities district formed by a redevelopment agency, require the legislative body of the city or county that formed the redevelopment agency to become the legislative body of the community facilities district, and any existing obligations of the former redevelopment agency or its successor agency to become the obligations of the new legislative body of the community facilities district.

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(22) Existing law, with respect to any successor agency that has been issued a finding of completion by the Department of Finance, deems loan agreements entered into between the redevelopment agency and the city, county, or city and county that created the redevelopment agency to be an enforceable obligation, as provided. Existing law specifies the manner in which the interest on the loan should be calculated and how the loan should be repaid. Existing law requires repayments received by the city, county, or city and county that formed the redevelopment agency to be used to retire certain outstanding amounts borrowed and owed, including a distribution to the Low and Moderate Income Housing Asset Fund, as provided. Existing law requires bond proceeds derived from bonds issued on or before December 31, 2010, to be used for the purposes for which the bonds were sold.

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This bill would define “loan agreements” for the purposes described above. This bill would change the manner in which the interest on the loan is calculated, and would require moneys repaid to be applied first to the principal and second to the interest. This bill would require distributions to the Low and Moderate Income Housing Asset Fund to be subject to specified reporting requirements. This bill would require bond proceeds derived from bonds issued on or before December 31, 2010, in excess of the amounts needed to satisfy approved enforceable obligations, to be expended in a manner consistent with the original bond covenants. This bill would require bond proceeds derived from bonds issued on or after January 1, 2011, in excess of amounts needed to satisfy approved enforceable obligations, to be used in a manner consistent with the original bond covenants subject to specified conditions. This bill would apply these provisions, and the provisions relating to any successor agency that has been issued a finding of completion by the Department of Finance described above, retroactively to actions occurring on or after June 28, 2011. This bill would also provide that specified changes to existing law shall not result in the denial of specified loans previously approved by the Department of Finance and shall not impact judgments, writs of mandate, and orders entered by the Sacramento Superior Court in specified lawsuits.

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(23) Existing law requires a successor agency to prepare a long-range property management plan that addresses the disposition and use of the real properties of the former redevelopment agency.

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This bill would require, if the former redevelopment agency did not have real properties, the successor agency to prepare a long-range property management plan, as provided.

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(24) Existing law authorizes successor agencies to, among other things, issue bonds or incur indebtedness to refund the bonds or indebtedness of a former redevelopment agency or to finance debt service spikes, as specified. The issuance of bonds or incurrence of other indebtedness by a successor agency is subject to the approval of the oversight board of the successor agency.

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This bill would authorize the successor agency to the Redevelopment Agency of the City and County of San Francisco to have the authority, rights, and powers of the Redevelopment Agency to which it succeeded solely for the purpose of issuing bonds or incurring other indebtedness to finance the construction of affordable housing and infrastructure required by specified agreements, subject to the approval of the oversight board. The bill would provide that bonds or other indebtedness authorized by its provisions would be considered indebtedness incurred by the dissolved redevelopment agency, would be listed on the Recognized Obligation Payment Schedule, and would be secured by a pledge of moneys deposited into the Redevelopment Property Tax Trust Fund. The bill would also require the successor agency to make diligent efforts to obtain the lowest long-term cost financing and to make use of an independent financial advisor in developing financing proposals.

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This bill would make legislative findings and declarations as to the necessity of a special statute for the City and County of San Francisco.

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(25) Existing law requires the county auditor for a county for which a negative sum was calculated pursuant to a specified former statute, in reducing the amount of property tax revenue otherwise allocated to the county by an amount attributable to that negative sum, to apply a reduction amount equal to or based on the reduction amount determined for specified fiscal years.

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This bill, for the 2015-16 fiscal year and each fiscal year thereafter, would prohibit the county auditor from applying the reduction amount.

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(26) Existing property tax law requires the county auditor, in each fiscal year, to allocate property tax revenue to local jurisdictions in accordance with specified formulas and procedures, and generally requires that each jurisdiction be allocated an amount equal to the total of the amount of revenue allocated to that jurisdiction in the prior fiscal year, subject to certain modifications, and that jurisdiction’s portion of the annual tax increment, as defined. Existing law provides for the computation, on the basis of these allocations, of apportionment factors that are applied to actual property tax revenues in each county in order to determine actual amounts of property tax revenue received by each recipient jurisdiction.

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This bill would deem to be correct those property tax revenue apportionment factors that were applied in allocating property tax revenues in the County of San Benito for each fiscal year through the 2000-01 fiscal year. This bill would, notwithstanding specified audit requirements, require the county auditor to make the allocation adjustments identified in the State Controller’s audit of the County of San Benito for the 2001-02 fiscal year. The bill would additionally require property tax apportionment factors applied in allocating property tax revenue in the County of San Benito for the 2002-03 fiscal year and each fiscal year thereafter to be determined on the basis of apportionment factors for prior fiscal years that have been corrected or adjusted as would be required if those prior apportionment factors were not deemed correct by this bill.

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This bill would make legislative findings and declarations as to the necessity of a special statute for the County of San Benito.

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(27) Existing property tax law reduces the amounts of ad valorem property tax revenue that would otherwise be annually allocated to the county, cities, and special districts pursuant to general allocation requirements by requiring, for purposes of determining property tax revenue allocations in each county for the 1992-93 and 1993-94 fiscal years, that the amounts of property tax revenue deemed allocated in the prior fiscal year to the county, cities, and special districts be reduced in accordance with certain formulas. It requires that the revenues not allocated to the county, cities, and special districts as a result of these reductions be transferred to the Educational Revenue Augmentation Fund (ERAF) in that county for allocation to school districts, community college districts, and the county office of education.

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Existing property tax law requires the auditor of each county with qualifying cities, as defined, to make certain property tax revenue allocations to those cities in accordance with a specified Tax Equity Allocation (TEA) formula established in a specified statute and to make corresponding reductions in the amount of property tax revenue that is allocated to the county. Existing law requires the auditor of Santa Clara County, for the 2006-07 fiscal year and for each fiscal year thereafter, to reduce the amount of property tax revenue allocated to qualified cities in that county by the ERAF reimbursement amount, as defined, and to commensurately increase the amount of property tax revenue allocated to the county ERAF, as specified.

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This bill would, instead, for the 2015-16 fiscal year and for each fiscal year thereafter, require the auditor of Santa Clara County to reduce the amount of property tax revenues that are required to be allocated from the qualified cities in that county to the county ERAF by a specified percentage of the ERAF reimbursement amount. This bill would prohibit the auditor of Santa Clara County from reducing the amounts allocated to the county ERAF in any fiscal year in which the amount of moneys required to be applied by the state for the support of school districts and community college districts is determined pursuant to Test 1 of Proposition 98.

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This bill would make legislative findings and declarations as to the necessity of a special statute for the County of Santa Clara.

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(28) This bill would appropriate $23,750,000 from the General Fund to the Department of Forestry and Fire Protection contingent upon the County of Riverside agreeing to forgive amounts owed to it by certain cities.

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(29) By imposing new duties upon local government officials with respect to the wind down of the dissolved redevelopment agencies, and in the annual allocation of ad valorem property tax revenues, this bill would impose a state-mandated local program.

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The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

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This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to these statutory provisions.

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(30) This bill would declare that it is to take effect immediately as a bill providing for appropriations related to the Budget Bill.

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This bill would express the intent of the Legislature to enact statutory changes relating to the Budget Act of 2015.

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Vote: majority. Appropriation:  begin delete no end delete begin insert yes end insert . Fiscal committee:  begin delete no end delete begin insert yes end insert . State-mandated local program:  begin delete no end delete begin insert yes end insert .

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

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begin insert SECTION 1. end insert   

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begin insert Section 34170.1 is added to the end insert begin insert Health and Safety
Code end insert begin insert , to read: end insert

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begin insert 34170.1. end insert   

Any action by the department carrying out the
department’s obligations under this part and Part 1.8 (commencing
with Section 34161) constitutes a department action for the
preparation, development, or administration of the state budget
pursuant to Section 11357 of the Government Code, and is exempt
from Chapter 3.5 (commencing with Section 11340) of Part 1 of
Division 3 of Title 2 of the Government Code. This section applies
retroactively to any action by the department described in this
section that occurred on or after June 28, 2011.

end insert

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begin insert SEC. 2. end insert   

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begin insert Section 34171 of the end insert begin insert Health and Safety Code end insert begin insert is
amended to read: end insert

34171.  

The following terms shall have the following meanings:

(a) “Administrative budget” means the budget for administrative
costs of the successor agencies as provided in Section 34177.

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(b) (1) “Administrative cost allowance” means the maximum
amount of administrative costs that may be paid by a successor
agency from the Redevelopment Property Tax Trust Fund in a
fiscal year.

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(b) “Administrative cost allowance” means an amount that,
subject to the approval of the oversight board, is payable from
property tax revenues of up to

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begin insert (2) end insert begin insert   end insert begin insert The administrative cost allowance shall be end insert 5 percent of the
property tax allocated to the successor agency on the Recognized
Obligation Payment Schedule covering the period January 1, 2012,
through June 30, begin delete 2012, and end delete begin insert 2012. The administrative cost
allowance shall be end insert up to 3 percent of the property tax allocated to
the Redevelopment Obligation Retirement Fund begin delete money that is
allocated to the successor agency end delete for each fiscal year begin delete thereafter;
provided, however, that end delete begin delete the end delete begin delete amount end delete begin insert thereafter ending on June 30,
2016. However, the administrative cost allowance end insert shall not be less
than two hundred fifty thousand dollars begin delete ($250,000), end delete begin delete unless end delete
begin insert ($250,000) in any fiscal year, unless this amount is reduced by end insert the
oversight board begin delete reduces this amount, for any fiscal year end delete begin delete or end delete begin delete such
lesser amount as agreed to by end delete begin insert or by agreement with end insert the successor
agency. begin delete However, the allowance amount shall exclude, and shall
not apply to, any administrative costs that can be paid from bond
proceeds or from sources other than property tax. Administrative
cost allowances shall exclude any litigation expenses related to
assets or obligations, settlements and judgments, and the costs of
maintaining assets prior to disposition. Employee costs associated
with work on specific project implementation activities, including,
but not limited to, construction inspection, project management,
or actual construction, shall be considered project-specific costs
and shall not constitute administrative costs. end delete

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(3) Commencing July 1, 2016, and for each fiscal year
thereafter, the administrative cost allowance shall be up to 3
percent of the actual property tax distributed to the successor
agency by the county auditor-controller in the preceding fiscal
year for payment of approved enforceable obligations, reduced
by the successor agency’s administrative cost allowance and loan
repayments made to the city, county, or city and county that created
the redevelopment agency that it succeeded pursuant to subdivision
(b) of Section 34191.4 during the preceding fiscal year. However,
the administrative cost allowance shall not be less than two
hundred fifty thousand dollars ($250,000) in any fiscal year, unless
this amount is reduced by the oversight board or by agreement
between the successor agency and the department.

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(4) Notwithstanding paragraph (3), commencing July 1, 2016,
a successor agency’s annual administrative costs shall not exceed
50 percent of the total Redevelopment Property Tax Trust Fund
distributed to pay enforceable obligations in the preceding fiscal
year, which latter amount shall be reduced by the successor
agency’s administrative cost allowance and loan repayments made
to the city, county, or city and county that created the
redevelopment agency that it succeeded pursuant to subdivision
(b) of Section 34191.4 during the preceding fiscal year. This
limitation applies to administrative costs whether paid within the
administrative cost allowance or not, but does not apply to
administrative costs paid from bond proceeds or grant funds, or,
in the case of a successor agency that is a designated local
authority, from sources other than property tax.

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(5) The administrative cost allowance shall be approved by the
oversight board and shall be the sole funding source for any legal
expenses related to civil actions, including writ proceedings,
contesting the validity of Part 1.8 or Part 1.85 (commencing with
Section 34170) or challenging acts taken pursuant to these parts.
Employee costs associated with work on specific project
implementation activities, including, but not limited to, construction
inspection, project management, or actual construction, shall be
considered project-specific costs and shall not constitute
administrative costs.

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(c) “Designated local authority” shall mean a public entity
formed pursuant to subdivision (d) of Section 34173.

(d) (1) “Enforceable obligation” means any of the following:

(A) Bonds, as defined by Section 33602 and bonds issued
pursuant to Chapter 10.5 (commencing with Section 5850) of
Division 6 of Title 1 of the Government Code, including the
required debt service, reserve set-asides, and any other payments
required under the indenture or similar documents governing the
issuance of the outstanding bonds of the former redevelopment
agency. A reserve may be held when required by the bond
indenture or when the next property tax allocation will be
insufficient to pay all obligations due under the provisions of the
bond for the next payment due in the following half of the calendar
year.

(B) Loans of moneys borrowed by the redevelopment agency
for a lawful purpose, to the extent they are legally required to be
repaid pursuant to a required repayment schedule or other
mandatory loan terms.

(C) Payments required by the federal government, preexisting
obligations to the state or obligations imposed by state law, other
than passthrough payments that are made by the county
auditor-controller pursuant to Section 34183, or legally enforceable
payments required in connection with the agencies’ employees,
including, but not limited to, pension payments, pension obligation
debt service, unemployment payments, or other obligations
conferred through a collective bargaining agreement. Costs incurred
to fulfill collective bargaining agreements for layoffs or
terminations of city employees who performed work directly on
behalf of the former redevelopment agency shall be considered
enforceable obligations payable from property tax funds. The
obligations to employees specified in this subparagraph shall
remain enforceable obligations payable from property tax funds
for any employee to whom those obligations apply if that employee
is transferred to the entity assuming the housing functions of the
former redevelopment agency pursuant to Section 34176. The
successor agency or designated local authority shall enter into an
agreement with the housing entity to reimburse it for any costs of
the employee obligations.

(D) Judgments or settlements entered by a competent court of
law or binding arbitration decisions against the former
redevelopment agency, other than passthrough payments that are
made by the county auditor-controller pursuant to Section 34183.
Along with the successor agency, the oversight board shall have
the authority and standing to appeal any judgment or to set aside
any settlement or arbitration decision.

(E) Any legally binding and enforceable agreement or contract
that is not otherwise void as violating the debt limit or public
policy. However, nothing in this act shall prohibit either the
successor agency, with the approval or at the direction of the
oversight board, or the oversight board itself from terminating any
existing agreements or contracts and providing any necessary and
required compensation or remediation for such termination. Titles
of or headings used on or in a document shall not be relevant in
determining the existence of an enforceable obligation.

(F)  begin insert (i) end insert begin insert   end insert Contracts or agreements necessary for the administration
or operation of the successor agency, in accordance with this part,
including, but not limited to, agreements concerning litigation
expenses related to assets or obligations, settlements and
judgments, and the costs of maintaining assets prior to disposition,
and agreements to purchase or rent office space, equipment and
supplies, and pay-related expenses pursuant to Section 33127 and
for carrying insurance pursuant to Section 33134. begin insert Beginning
January 1, 2016, any legal expenses related to civil actions,
including writ proceedings, contesting the validity of this part or
Part 1.8 (commencing with Section 34161) or challenging acts
taken pursuant to these parts shall only be payable out of the
administrative cost allowance. end insert

begin insert

(ii) A sponsoring entity may provide funds to a successor agency
for payment of legal expenses related to civil actions initiated by
the successor agency, including writ proceedings, contesting the
validity of this part or Part 1.8 (commencing with Section 34161)
or challenging acts taken pursuant to these parts. If the successor
agency obtains a final judicial determination granting the relief
requested in the action, the funds provided by the sponsoring entity
for legal expenses related to successful causes of action pled by
the successor agency shall be deemed an enforceable obligation
for repayment under the terms set forth in subdivision (h) of Section
34173. If the successor agency does not receive a final judicial
determination granting the relief requested, the funds provided by
the sponsoring entity shall be considered a grant by the sponsoring
entity and shall not qualify for repayment as an enforceable
obligation.

end insert

(G) Amounts borrowed from, or payments owing to, the Low
and Moderate Income Housing Fund of a redevelopment agency,
which had been deferred as of the effective date of the act adding
this part; provided, however, that the repayment schedule is
approved by the oversight board. Repayments shall be transferred
to the Low and Moderate Income Housing Asset Fund established
pursuant to subdivision (d) of Section 34176 as a housing asset
and shall be used in a manner consistent with the affordable
housing requirements of the Community Redevelopment Law (Part
1 (commencing with Section 33000)).

(2) For purposes of this part, “enforceable obligation” does not
include any agreements, contracts, or arrangements between the
city, county, or city and county that created the redevelopment
agency and the former redevelopment agency. However, written
agreements entered into (A) at the time of issuance, but in no event
later than December 31, 2010, of indebtedness obligations, and
(B) solely for the purpose of securing or repaying those
indebtedness obligations may be deemed enforceable obligations
for purposes of this part. begin insert Additionally, written agreements entered
into (A) at the time of issuance, but in no event later than June 27,
2011, of indebtedness obligations solely for the refunding or
refinancing of other indebtedness obligations that existed prior to
January 1, 2011, and (B) solely for the purpose of securing or
repaying the refunded or refinanced indebtedness obligations may
be deemed enforceable obligations for purposes of this part. end insert
Notwithstanding this paragraph, loan agreements entered into
between the redevelopment agency and the city, county, or city
and county that created it, within two years of the date of creation
of the redevelopment agency, may be deemed to be enforceable
obligations. begin insert Notwithstanding this paragraph, an agreement entered
into by the redevelopment agency prior to June 28, 2011, is an
enforceable obligation if the agreement relates to state highway
infrastructure improvements to which the redevelopment agency
committed funds pursuant to Section 33445. end insert

(3) Contracts or agreements between the former redevelopment
agency and other public agencies, to perform services or provide
funding for governmental or private services or capital projects
outside of redevelopment project areas that do not provide benefit
to the redevelopment project and thus were not properly authorized
under Part 1 (commencing with Section 33000) shall be deemed
void on the effective date of this part; provided, however, that such
contracts or agreements for the provision of housing properly
authorized under Part 1 (commencing with Section 33000) shall
not be deemed void.

(e) “Indebtedness obligations” means bonds, notes, certificates
of participation, or other evidence of indebtedness, issued or
delivered by the redevelopment agency, or by a joint exercise of
powers authority created by the redevelopment agency, to
third-party investors or bondholders to finance or refinance
redevelopment projects undertaken by the redevelopment agency
in compliance with the Community Redevelopment Law (Part 1
(commencing with Section 33000)).

(f) “Oversight board” shall mean each entity established pursuant
to Section 34179.

(g) “Recognized obligation” means an obligation listed in the
Recognized Obligation Payment Schedule.

(h) “Recognized Obligation Payment Schedule” means the
document setting forth the minimum payment amounts and due
dates of payments required by enforceable obligations for each
six-month fiscal period begin insert until June 30, 2016, end insert as provided in
subdivision (m) of Section 34177. begin insert On and after July 1, 2016,
“Recognized Obligation Payment Schedule” means the document
setting forth the minimum payment amounts and due dates of
payments required by enforceable obligations for each fiscal year
as provided in subdivision (o) of Section 34177. end insert

(i) “School entity” means any entity defined as such in
subdivision (f) of Section 95 of the Revenue and Taxation Code.

(j) “Successor agency” means the successor entity to the former
redevelopment agency as described in Section 34173.

(k) “Taxing entities” means cities, counties, a city and county,
special districts, and school entities, as defined in subdivision (f)
of Section 95 of the Revenue and Taxation Code, that receive
passthrough payments and distributions of property taxes pursuant
to the provisions of this part.

(l) “Property taxes” include all property tax revenues, including
those from unitary and supplemental and roll corrections applicable
to tax increment.

(m) “Department” means the Department of Finance unless the
context clearly refers to another state agency.

(n) “Sponsoring entity” means the city, county, or city and
county, or other entity that authorized the creation of each
redevelopment agency.

(o) “Final judicial determination” means a final judicial
determination made by any state court that is not appealed, or by
a court of appellate jurisdiction that is not further appealed, in an
action by any party.

(p) From July 1, 2014, to July 1, 2018, inclusive, “housing entity
administrative cost allowance” means an amount of up to 1 percent
of the property tax allocated to the Redevelopment Obligation
Retirement Fund on behalf of the successor agency for each
applicable fiscal year, but not less than one hundred fifty thousand
dollars ($150,000) per fiscal year.

(1) If a local housing authority assumed the housing functions
of the former redevelopment agency pursuant to paragraph (2) or
(3) of subdivision (b) of Section 34176, then the housing entity
administrative cost allowance shall be listed by the successor
agency on the Recognized Obligation Payment Schedule. Upon
approval of the Recognized Obligation Payment Schedule by the
oversight board and the department, the housing entity
administrative cost allowance shall be remitted by the successor
agency on each January 2 and July 1 to the local housing authority
that assumed the housing functions of the former redevelopment
agency pursuant to paragraph (2) or (3) of subdivision (b) of
Section 34176.

(2) If there are insufficient moneys in the Redevelopment
Obligations Retirement Fund in a given fiscal year to make the
payment authorized by this subdivision, the unfunded amount may
be listed on each subsequent Recognized Obligation Payment
Schedule until it has been paid in full. In these cases the five-year
time limit on the payments shall not apply.

begin insert

begin insert SEC. 3. end insert   

end insert

begin insert Section 34173 of the end insert begin insert Health and Safety Code end insert begin insert is
amended to read: end insert

34173.  

(a) Successor agencies, as defined in this part, are
hereby designated as successor entities to the former redevelopment
agencies.

(b) Except for those provisions of the Community
Redevelopment Law that are repealed, restricted, or revised
pursuant to the act adding this part, all authority, rights, powers,
duties, and obligations previously vested with the former
redevelopment agencies, under the Community Redevelopment
Law, are hereby vested in the successor agencies.

(c) (1) If the redevelopment agency was in the form of a joint
powers authority, and if the joint powers agreement governing the
formation of the joint powers authority addresses the allocation of
assets and liabilities upon dissolution of the joint powers authority,
then each of the entities that created the former redevelopment
agency may be a successor agency within the meaning of this part
and each shall have a share of assets and liabilities based on the
provisions of the joint powers agreement.

(2) If the redevelopment agency was in the form of a joint
powers authority, and if the joint powers agreement governing the
formation of the joint powers authority does not address the
allocation of assets and liabilities upon dissolution of the joint
powers authority, then each of the entities that created the former
redevelopment agency may be a successor agency within the
meaning of this part, a proportionate share of the assets and
liabilities shall be based on the assessed value in the project areas
within each entity’s jurisdiction, as determined by the county
assessor, in its jurisdiction as compared to the assessed value of
land within the boundaries of the project areas of the former
redevelopment agency.

(d) (1) A city, county, city and county, or the entities forming
the joint powers authority that authorized the creation of each
redevelopment agency may elect not to serve as a successor agency
under this part. A city, county, city and county, or any member of
a joint powers authority that elects not to serve as a successor
agency under this part must file a copy of a duly authorized
resolution of its governing board to that effect with the county
auditor-controller no later than January 13, 2012.

(2) The determination of the first local agency that elects to
become the successor agency shall be made by the county
auditor-controller based on the earliest receipt by the county
auditor-controller of a copy of a duly adopted resolution of the
local agency’s governing board authorizing such an election. As
used in this section, “local agency” means any city, county, city
and county, or special district in the county of the former
redevelopment agency.

(3) (A) If no local agency elects to serve as a successor agency
for a dissolved redevelopment agency, a public body, referred to
herein as a “designated local authority” shall be immediately
formed, pursuant to this part, in the county and shall be vested
with all the powers and duties of a successor agency as described
in this part. The Governor shall appoint three residents of the
county to serve as the governing board of the authority. The
designated local authority shall serve as successor agency until a
local agency elects to become the successor agency in accordance
with this section.

(B) Designated local authority members are protected by the
immunities applicable to public entities and public employees
governed by Part 1 (commencing with Section 810) and Part 2
(commencing with Section 814) of Division 3.6 of Title 1 of the
Government Code.

(4) A city, county, or city and county, or the entities forming
the joint powers authority that authorized the creation of a
redevelopment agency and that elected not to serve as the successor
agency under this part, may subsequently reverse this decision and
agree to serve as the successor agency pursuant to this section.
Any reversal of this decision shall not become effective for 60
days after notice has been given to the current successor agency
and the oversight board and shall not invalidate any action of the
successor agency or oversight board taken prior to the effective
date of the transfer of responsibility.

(e) The liability of any successor agency, acting pursuant to the
powers granted under the act adding this part, shall be limited to
the extent of the total sum of property tax revenues it receives
pursuant to this part and the value of assets transferred to it as a
successor agency for a dissolved redevelopment agency.

(f) Any existing cleanup plans and liability limits authorized
under the Polanco Redevelopment Act (Article 12.5 (commencing
with Section 33459) of Chapter 4 of Part 1) shall be transferred to
the successor agency and may be transferred to the successor
housing entity at that entity’s request.

(g) A successor agency is a separate public entity from the public
agency that provides for its governance and the two entities shall
not merge. The liabilities of the former redevelopment agency
shall not be transferred to the sponsoring entity and the assets shall
not become assets of the sponsoring entity. A successor agency
has its own name, can be sued, and can sue. All litigation involving
a redevelopment agency shall automatically be transferred to the
successor agency. The separate former redevelopment agency
employees shall not automatically become sponsoring entity
employees of the sponsoring entity and the successor agency shall
retain its own collective bargaining status. As successor entities,
successor agencies succeed to the organizational status of the
former redevelopment agency, but without any legal authority to
participate in redevelopment activities, except to complete any
work related to an approved enforceable obligation. Each successor
agency shall be deemed to be a local entity for purposes of the
Ralph M. Brown Act (Chapter 9 (commencing with Section 54950)
of Part 1 of Division 2 of Title 5 of the Government Code).

(h)  begin insert (1) end insert begin insert   end insert The city, county, or city and county that authorized the
creation of a redevelopment agency may loan or grant funds to a
successor agency for begin insert the payment of end insert administrative begin delete costs, end delete begin insert costs or end insert
enforceable begin delete obligations, end delete begin delete or end delete begin insert obligations excluding loans approved
under this subdivision or pursuant to Section 34191.4, or end insert
project-related expenses begin delete at end delete begin delete the end delete begin delete city’s discretion, but end delete begin delete the end delete begin insert that qualify
as an enforceable obligation, and only to the extent that the
successor agency receives an insufficient distribution from the
Redevelopment Property Tax Trust Fund, or other approved
sources of funding are insufficient, to pay approved enforceable
obligations in the recognized obligation payment schedule period.
The end insert receipt and use of these funds shall be reflected on the
Recognized Obligation Payment Schedule or the administrative
budget and therefore are subject to the oversight and approval of
the oversight board. An enforceable obligation shall be deemed to
be created for the repayment of those loans. begin insert A loan made under
this subdivision shall be repaid from the source of funds originally
approved for payment of the underlying enforceable obligation in
the Recognized Obligation Payment Schedule once sufficient funds
become available from that source. The interest payable on any
loan created pursuant to this subdivision shall be calculated on a
fixed annual simple basis and applied to the outstanding principal
amount until fully paid, at a rate not to exceed the most recently
published interest rate earned by funds deposited into the Local
Agency Investment Fund during the previous fiscal quarter.
Repayment of loans created under this subdivision shall be applied
first to principal, and second to interest, and shall be subordinate
to other approved enforceable obligations. Loans created under
this subdivision shall be repaid to the extent property tax revenue
allocated to the successor agency is available after fulfilling other
enforceable obligations approved in the Recognized Obligation
Payment Schedule. end insert

begin insert

(2) This subdivision shall not apply where the successor
agency’s distribution from the Redevelopment Property Tax Trust
Fund has been reduced pursuant to Section 34179.6 or 34186.

end insert

(i) At the request of the city, county, or city and county,
notwithstanding Section 33205, all land use related plans and
functions of the former redevelopment agency are hereby
transferred to the city, county, or city and county that authorized
the creation of a redevelopment agency; provided, however, that
the city, county, or city and county shall not create a new project
area, add territory to, or expand or change the boundaries of a
project area, or take any action that would increase the amount of
obligated property tax (formerly tax increment) necessary to fulfill
any existing enforceable obligation beyond what was authorized
as of June 27, 2011.

begin insert

begin insert SEC. 4. end insert   

end insert

begin insert Section 34176 of the end insert begin insert Health and Safety Code end insert begin insert is
amended to read: end insert

34176.  

(a) (1) 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. If a city, county, or city and county
elects to retain the authority to perform housing functions
previously performed by a redevelopment agency, all rights,
powers, duties, obligations, and housing assets, as defined in
subdivision (e), excluding any amounts on deposit in the Low and
Moderate Income Housing Fund and enforceable obligations
retained by the successor agency, shall be transferred to the city,
county, or city and county.

(2) The housing successor shall submit to the Department of
Finance by August 1, 2012, a list of all housing assets that contains
an explanation of how the assets meet the criteria specified in
subdivision (e). The Department of Finance shall prescribe the
format for the submission of the list. The list shall include assets
transferred between February 1, 2012, and the date upon which
the list is created. The department shall have up to 30 days from
the date of receipt of the list to object to any of the assets or
transfers of assets identified on the list. If the Department of
Finance objects to assets on the list, the housing successor may
request a meet and confer process within five business days of
receiving the department objection. If the transferred asset is
deemed not to be a housing asset as defined in subdivision (e), it
shall be returned to the successor agency. If a housing asset has
been previously pledged to pay for bonded indebtedness, the
successor agency shall maintain control of the asset in order to
pay for the bond debt.

(3) For purposes of this section and Section 34176.1, “housing
successor” means the entity assuming the housing function of a
former redevelopment agency pursuant to this section.

(b) If a city, county, or city and county does not elect to retain
the responsibility for performing housing functions previously
performed by a redevelopment agency, all rights, powers, assets,
duties, and obligations associated with the housing activities of
the agency, excluding enforceable obligations retained by the
successor agency and any amounts in the Low and Moderate
Income Housing Fund, shall be transferred as follows:

(1) If there is no local housing authority in the territorial
jurisdiction of the former redevelopment agency, to the Department
of Housing and Community Development.

(2) If there is one local housing authority in the territorial
jurisdiction of the former redevelopment agency, to that local
housing authority.

(3) If there is more than one local housing authority in the
territorial jurisdiction of the former redevelopment agency, to the
local housing authority selected by the city, county, or city and
county that authorized the creation of the redevelopment agency.

(c) Commencing on the operative date of this part, the housing
successor may enforce affordability covenants and perform related
activities pursuant to applicable provisions of the Community
Redevelopment Law (Part 1 (commencing with Section 33000)),
including, but not limited to, Section 33418.

(d) Except as specifically provided in Section 34191.4, any
funds transferred to the housing successor, together with any funds
generated from housing assets, as defined in subdivision (e), shall
be maintained in a separate Low and Moderate Income Housing
Asset Fund which is hereby created in the accounts of the housing
successor.

(e) For purposes of this part, “housing asset” includes all of the
following:

(1) Any real property, interest in, or restriction on the use of
real property, whether improved or not, and any personal property
provided in residences, including furniture and appliances, all
housing-related files and loan documents, office supplies, software
licenses, and mapping programs, that were acquired for low- and
moderate-income housing purposes, either by purchase or through
a loan, in whole or in part, with any source of funds.

(2) Any funds that are encumbered by an enforceable obligation
to build or acquire low- and moderate-income housing, as defined
by the Community Redevelopment Law (Part 1 (commencing with
Section 33000)) unless required in the bond covenants to be used
for repayment purposes of the bond.

(3) Any loan or grant receivable, funded from the Low and
Moderate Income Housing Fund, from homebuyers, homeowners,
nonprofit or for-profit developers, and other parties that require
occupancy by persons of low or moderate income as defined by
the Community Redevelopment Law (Part 1 (commencing with
Section 33000)).

(4) Any funds derived from rents or operation of properties
acquired for low- and moderate-income housing purposes by other
parties that were financed with any source of funds, including
residual receipt payments from developers, conditional grant
repayments, cost savings and proceeds from refinancing, and
principal and interest payments from homebuyers subject to
enforceable income limits.

(5) A stream of rents or other payments from housing tenants
or operators of low- and moderate-income housing financed with
any source of funds that are used to maintain, operate, and enforce
the affordability of housing or for enforceable obligations
associated with low- and moderate-income housing.

(6) (A) Repayments of loans or deferrals owed to the Low and
Moderate Income Housing Fund pursuant to subparagraph (G) of
paragraph (1) of subdivision (d) of Section 34171, which shall be
used consistent with the affordable housing requirements in the
Community Redevelopment Law (Part 1 (commencing with
Section 33000)).

(B) Loan or deferral 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 paragraph and subdivision (b)
of Section 34191.4 combined shall be equal to one-half of the
increase between the amount distributed to 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 paragraph shall take priority over amounts
to be repaid pursuant to subdivision (b) of Section 34191.4.

(f) If a development includes both low- and moderate-income
housing that meets the definition of a housing asset under
subdivision (e) and other types of property use, including, but not
limited to, commercial use, governmental use, open space, and
parks, the oversight board shall consider the overall value to the
community as well as the benefit to taxing entities of keeping the
entire development intact or dividing the title and control over the
property between the housing successor and the successor agency
or other public or private agencies. The disposition of those assets
may be accomplished by a revenue-sharing arrangement as
approved by the oversight board on behalf of the affected taxing
entities.

(g) (1) (A) The housing successor may designate the use of
and commit indebtedness obligation proceeds that remain after the
satisfaction of enforceable obligations that have been approved in
a Recognized Obligation Payment Schedule and that are consistent
with the indebtedness obligation covenants. The proceeds shall be
derived from indebtedness obligations that were issued for the
purposes of affordable housing prior to begin delete January 1, end delete begin insert June 28, end insert 2011,
and were backed by the Low and Moderate Income Housing Fund.
Enforceable obligations may be satisfied by the creation of reserves
for the projects that are the subject of the enforceable obligation
that are consistent with the contractual obligations for those
projects, or by expending funds to complete the projects. begin insert It is the
intent of the Legislature to authorize housing successors to
designate the use of and commit 100 percent of indebtedness
obligation proceeds described in this subparagraph. end insert

(B) The housing successor shall provide notice to the successor
agency of any designations of use or commitments of funds
specified in subparagraph (A) that it wishes to make at least 20
days before the deadline for submission of the Recognized
Obligation Payment Schedule to the oversight board. Commitments
and designations shall not be valid and binding on any party until
they are included in an approved and valid Recognized Obligation
Payment Schedule. The review of these designations and
commitments by the successor agency, oversight board, and
Department of Finance shall be limited to a determination that the
designations and commitments are consistent with bond covenants
and that there are sufficient funds available.

(2) Funds shall be used and committed in a manner consistent
with the purposes of the Low and Moderate Income Housing Asset
Fund. Notwithstanding any other law, the successor agency shall
retain and expend the excess housing obligation proceeds at the
discretion of the housing successor, provided that the successor
agency ensures that the proceeds are expended in a manner
consistent with the indebtedness obligation covenants and with
any requirements relating to the tax status of those obligations.
The amount expended shall not exceed the amount of indebtedness
obligation proceeds available and such expenditure shall constitute
the creation of excess housing proceeds expenditures to be paid
from the excess proceeds. Excess housing proceeds expenditures
shall be listed separately on the Recognized Obligation Payment
Schedule submitted by the successor agency.

(h) This section shall not be construed to provide any stream of
tax increment financing.

begin insert

begin insert SEC. 5. end insert   

end insert

begin insert Section 34176.1 of the end insert begin insert Health and Safety Code end insert begin insert is
amended to read: end insert

34176.1.  

Funds in the Low and Moderate Income Housing
Asset Fund described in subdivision (d) of Section 34176 shall be
subject to the provisions of the Community Redevelopment Law
(Part 1 (commencing with Section 33000)) relating to the Low and
Moderate Income Housing Fund, except as follows:

(a) Subdivision (d) of Section 33334.3 and subdivision (a) of
Section 33334.4 shall not apply. Instead, funds received from the
successor agency for items listed on the Recognized Obligation
Payment Schedule shall be expended to meet the enforceable
obligations, and the housing successor shall expend all other funds
in the Low and Moderate Income Housing Asset Fund as follows:

(1) For the purpose of monitoring and preserving the long-term
affordability of units subject to affordability restrictions or
covenants entered into by the redevelopment agency or the housing
successor and for the purpose of administering the activities
described in paragraphs (2) and (3), a housing successor may
expend per fiscal year up to an amount equal to begin delete 2 end delete begin insert 5 end insert percent of the
statutory value of real property owned by the housing successor
and of loans and grants receivable, including real property and
loans and grants transferred to the housing successor pursuant to
Section 34176 and real property purchased and loans and grants
made by the housing successor. If this amount is less than two
hundred thousand dollars ($200,000) for any given fiscal year, the
housing successor may expend up to two hundred thousand dollars
($200,000) in that fiscal year for these purposes. The Department
of Housing and Community Development shall annually publish
on its Internet Web site an adjustment to this amount to reflect any
change in the Consumer Price Index for All Urban Consumers
published by the federal Department of Labor for the preceding
calendar year. For purposes of this paragraph, “statutory value of
real property” means the value of properties formerly held by the
former redevelopment agency as listed on the housing asset transfer
form approved by the begin delete Department of Finance end delete begin insert department end insert pursuant
to paragraph (2) of subdivision (a) of Section 34176, the value of
the properties transferred to the housing successor pursuant to
subdivision (f) of Section 34181, and the purchase price of
properties purchased by the housing successor.

(2) Notwithstanding Section 33334.2, if the housing successor
has fulfilled all obligations pursuant to Sections 33413 and 33418,
the housing successor may expend up to two hundred fifty thousand
dollars ($250,000) per fiscal year for homeless prevention and
rapid rehousing services for individuals and families who are
homeless or would be homeless but for this assistance, including
the provision of short-term or medium-term rental assistance,
housing relocation and stabilization services including housing
search, mediation, or outreach to property owners, credit repair,
security or utility deposits, utility payments, rental assistance for
a final month at a location, moving cost assistance, and case
management, or other appropriate activities for homelessness
prevention and rapid rehousing of persons who have become
homeless.

(3) (A) The housing successor shall expend all funds remaining
in the Low and Moderate Income Housing Asset Fund after the
expenditures allowed pursuant to paragraphs (1) and (2) for the
development of housing affordable to and occupied by households
earning 80 percent or less of the area median income, with at least
30 percent of these remaining funds expended for the development
of rental housing affordable to and occupied by households earning
30 percent or less of the area median income and no more than 20
percent of these remaining funds expended for the development
of housing affordable to and occupied by households earning
between 60 percent and 80 percent of the area median income. A
housing successor shall demonstrate in the annual report described
in subdivision (f), for 2019, and every five years thereafter, that
the housing successor’s expenditures from January 1, 2014, through
the end of the latest fiscal year covered in the report comply with
the requirements of this subparagraph.

(B) If the housing successor fails to comply with the extremely
low income requirement in any five-year report, then the housing
successor shall ensure that at least 50 percent of these remaining
funds expended in each fiscal year following the latest fiscal year
following the report are expended for the development of rental
housing affordable to, and occupied by, households earning 30
percent or less of the area median income until the housing
successor demonstrates compliance with the extremely low income
requirement in an annual report described in subdivision (f).

(C) If the housing successor exceeds the expenditure limit for
households earning between 60 percent and 80 percent of the area
median income in any five-year report, the housing successor shall
not expend any of the remaining funds for households earning
between 60 percent and 80 percent of the area median income until
the housing successor demonstrates compliance with this limit in
an annual report described in subdivision (f).

(D) For purposes of this subdivision, “development” means new
construction, acquisition and rehabilitation, substantial
rehabilitation as defined in Section 33413, the acquisition of
long-term affordability covenants on multifamily units as described
in Section 33413, or the preservation of an assisted housing
development that is eligible for prepayment or termination or for
which within the expiration of rental restrictions is scheduled to
occur within five years as those terms are defined in Section
65863.10 of the Government Code. Units described in this
subparagraph may be counted towards any outstanding obligations
pursuant to Section 33413, provided that the units meet the
requirements of that section and are counted as provided in that
section.

(b) Subdivision (b) of Section 33334.4 shall not apply. Instead,
if the aggregate number of units of deed-restricted rental housing
restricted to seniors and assisted individually or jointly by the
housing successor, its former redevelopment agency, and its host
jurisdiction within the previous 10 years exceeds 50 percent of the
aggregate number of units of deed-restricted rental housing assisted
individually or jointly by the housing successor, its former
redevelopment agency, and its host jurisdiction within the same
time period, then the housing successor shall not expend these
funds to assist additional senior housing units until the housing
successor or its host jurisdiction assists, and construction has
commenced, a number of units available to all persons, regardless
of age, that is equal to 50 percent of the aggregate number of units
of deed-restricted rental housing units assisted individually or
jointly by the housing successor, its former redevelopment agency,
and its host jurisdiction within the time period described above.

(c) (1) Program income a housing successor receives shall not
be associated with a project area and, notwithstanding subdivision
(g) of Section 33334.2, may be expended anywhere within the
jurisdiction of the housing successor or transferred pursuant to
paragraph (2) without a finding of benefit to a project area. For
purposes of this paragraph, “program income” means the sources
described in paragraphs (3), (4), and (5) of subdivision (e) of
Section 34176 and interest earned on deposits in the account.

(2) Two or more housing successors within a county, within a
single metropolitan statistical area, within 15 miles of each other,
or that are in contiguous jurisdictions may enter into an agreement
to transfer funds among their respective Low and Moderate Income
Housing Asset Funds for the sole purpose of developing transit
priority projects as defined in subdivisions (a) and (b) of Section
21155 of the Public Resources Code, permanent supportive housing
as defined in paragraph (2) of subdivision (b) of Section 50675.14,
housing for agricultural employees as defined in subdivision (g)
of Section 50517.5, or special needs housing as defined in federal
or state law or regulation if all of the following conditions are met:

(A) Each participating housing successor has made a finding
based on substantial evidence, after a public hearing, that the
agreement to transfer funds will not cause or exacerbate racial,
ethnic, or economic segregation.

(B) The development to be funded shall not be located in a
census tract where more than 50 percent of its population is very
low income, unless the development is within one-half mile of a
major transit stop or high-quality transit corridor as defined in
paragraph (3) of subdivision (b) of Section 21155 of the Public
Resources Code.

(C) The completed development shall not result in a reduction
in the number of housing units or a reduction in the affordability
of housing units on the site where the development is to be built.

(D) A transferring housing successor shall not have any
outstanding obligations pursuant to Section 33413.

(E) No housing successor may transfer more than one million
dollars ($1,000,000) per fiscal year.

(F) The jurisdictions of the transferring and receiving housing
successors each have an adopted housing element that the
Department of Housing and Community Development has found
pursuant to Section 65585 of the Government Code to be in
substantial compliance with the requirements of Article 10.6
(commencing with Section 65580) of Chapter 3 of Division 1 of
Title 7 of the Government Code and have submitted to the
Department of Housing and Community Development the annual
progress report required by Section 65400 of the Government Code
within the preceding 12 months.

(G) Transferred funds shall only assist rental units affordable
to, and occupied by, households earning 60 percent or less of the
area median income.

(H) Transferred funds not encumbered within two years shall
be transferred to the Department of Housing and Community
Development for expenditure pursuant to the Multifamily Housing
Program or the Joe Serna, Jr. Farmworker Housing Grant Program.

(d) Sections 33334.10 and 33334.12 shall not apply. Instead, if
a housing successor has an excess surplus, the housing successor
shall encumber the excess surplus for the purposes described in
paragraph (3) of subdivision (a) or transfer the funds pursuant to
paragraph (2) of subdivision (c) within three fiscal years. If the
housing successor fails to comply with this subdivision, the housing
successor, within 90 days of the end of the third fiscal year, shall
transfer any excess surplus to the Department of Housing and
Community Development for expenditure pursuant to the
Multifamily Housing Program or the Joe Serna, Jr. Farmworker
Housing Grant Program. For purposes of this subdivision, “excess
surplus” shall mean an unencumbered amount in the account that
exceeds the greater of one million dollars ($1,000,000) or the
aggregate amount deposited into the account during the housing
successor’s preceding four fiscal years, whichever is greater.

(e) Section 33334.16 shall not apply to interests in real property
acquired on or after February 1, 2012. With respect to interests in
real property acquired by the former redevelopment agency prior
to February 1, 2012, the time periods described in Section 33334.16
shall be deemed to have commenced on the date that the
begin delete Department of Finance end delete begin insert department end insert approved the property as a
housing asset.

(f) Section 33080.1 of this code and Section 12463.3 of the
Government Code shall not apply. Instead, the housing successor
shall conduct, and shall provide to its governing body, an
independent financial audit of the Low and Moderate Income
Housing Asset Fund within six months after the end of each fiscal
year, which may be included in the independent financial audit of
the host jurisdiction. If the housing successor is a city or county,
it shall also include in its report pursuant to Section 65400 of the
Government Code and post on its Internet Web site all of the
following information for the previous fiscal year. If the housing
successor is not a city or county, it shall also provide to its
governing body and post on its Internet Web site all of the
following information for the previous fiscal year:

begin insert

(1) The amount the city, county, or city and county received
pursuant to subparagraph (A) of paragraph (3) of subdivision (b)
of Section 34191.4.

end insert begin delete

(1)

end delete

begin insert (2) end insert  The amount deposited to the Low and Moderate Income
Housing Asset Fund, distinguishing begin delete any end delete begin insert between end insert amounts deposited
begin insert pursuant to subparagraphs (B) and (C) of paragraph (3) of
subdivision (b) of Section 34191.4, amounts deposited end insert for begin insert other end insert
items listed on the Recognized Obligation Payment begin delete Schedule from end delete
begin insert Schedule, and end insert other amounts deposited.

begin delete

(2)

end delete

begin insert (3) end insert  A statement of the balance in the fund as of the close of the
fiscal year, distinguishing any amounts held for items listed on the
Recognized Obligation Payment Schedule from other amounts.

begin delete

(3)

end delete

begin insert (4) end insert  A description of expenditures from the fund by category,
including, but not limited to, expenditures (A) for monitoring and
preserving the long-term affordability of units subject to
affordability restrictions or covenants entered into by the
redevelopment agency or the housing successor and administering
the activities described in paragraphs (2) and (3) of subdivision
(a), (B) for homeless prevention and rapid rehousing services for
the development of housing described in paragraph (2) of
subdivision (a), and (C) for the development of housing pursuant
to paragraph (3) of subdivision (a).

begin delete

(4)

end delete

begin insert (5) end insert  As described in paragraph (1) of subdivision (a), the statutory
value of real property owned by the housing successor, the value
of loans and grants receivable, and the sum of these two amounts.

begin delete

(5)

end delete

begin insert (6) end insert  A description of any transfers made pursuant to paragraph
(2) of subdivision (c) in the previous fiscal year and, if still
unencumbered, in earlier fiscal years and a description of and status
update on any project for which transferred funds have been or
will be expended if that project has not yet been placed in service.

begin delete

(6)

end delete

begin insert (7) end insert  A description of any project for which the housing successor
receives or holds property tax revenue pursuant to the Recognized
Obligation Payment Schedule and the status of that project.

begin delete

(7)

end delete

begin insert (8) end insert  For interests in real property acquired by the former
redevelopment agency prior to February 1, 2012, a status update
on compliance with Section 33334.16. For interests in real property
acquired on or after February 1, 2012, a status update on the
project.

begin delete

(8)

end delete

begin insert (9) end insert  A description of any outstanding obligations pursuant to
Section 33413 that remained to transfer to the housing successor
on February 1, 2012, of the housing successor’s progress in meeting
those obligations, and of the housing successor’s plans to meet
unmet obligations. In addition, the housing successor shall include
in the report posted on its Internet Web site the implementation
plans of the former redevelopment agency.

begin delete

(9)

end delete

begin insert (10) end insert  The information required by subparagraph (B) of paragraph
(3) of subdivision (a).

begin delete

(10)

end delete

begin insert (11) end insert  The percentage of units of deed-restricted rental housing
restricted to seniors and assisted individually or jointly by the
housing successor, its former redevelopment agency, and its host
jurisdiction within the previous 10 years in relation to the aggregate
number of units of deed-restricted rental housing assisted
individually or jointly by the housing successor, its former
redevelopment agency, and its host jurisdiction within the same
time period.

begin delete

(11)

end delete

begin insert (12) end insert  The amount of any excess surplus, the amount of time that
the successor agency has had excess surplus, and the housing
successor’s plan for eliminating the excess surplus.

begin delete

(12)

end delete

begin insert (13) end insert  An inventory of homeownership units assisted by the
former redevelopment agency or the housing successor that are
subject to covenants or restrictions or to an adopted program that
protects the former redevelopment agency’s investment of moneys
from the Low and Moderate Income Housing Fund pursuant to
subdivision (f) of Section 33334.3. This inventory shall include
all of the following information:

(A) The number of those units.

(B) In the first report pursuant to this subdivision, the number
of units lost to the portfolio after February 1, 2012, and the reason
or reasons for those losses. For all subsequent reports, the number
of the units lost to the portfolio in the last fiscal year and the reason
for those losses.

(C) Any funds returned to the housing successor as part of an
adopted program that protects the former redevelopment agency’s
investment of moneys from the Low and Moderate Income Housing
Fund.

(D) Whether the housing successor has contracted with any
outside entity for the management of the units and, if so, the
identity of the entity.

begin insert

begin insert SEC. 6. end insert   

end insert

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

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 begin delete Department
of Finance. end delete begin insert department. end insert The successor agency may utilize
reasonable estimates and projections to support payment amounts
for enforceable obligations if the successor agency submits
appropriate supporting documentation of the basis for the estimate
or projection to the Department of Finance and the
auditor-controller.

(2) The begin delete Department of Finance end delete begin insert department, the county
auditor-controller, end insert 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 begin delete Department of Finance end delete begin insert department end insert 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) 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.

(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 begin delete six-month end delete begin delete fiscal end delete begin delete period, end delete begin insert fiscal period set
forth in subdivision (m) or (o), as applicable, end insert 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 the provisions of 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 a 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 begin delete Department of Finance end delete begin insert department end insert 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, the
Controller’s office, and the Department of Finance, and is posted
on the successor agency’s Internet Web site.

(3) The Recognized Obligation Payment Schedule shall be
forward looking to the next six begin delete months. end delete begin insert months or one year
pursuant to subdivision (m) or (o), as applicable. end insert The first
Recognized Obligation Payment Schedule shall be submitted to
the Controller’s office and the begin delete Department of Finance end delete begin insert department end insert
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)  begin insert (1) end insert begin insert   end insert 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 begin delete Department of Finance end delete begin insert department end insert and to the
county auditor-controller no fewer than 90 days before the date of
property tax distribution. The begin delete Department of Finance end delete begin insert department end insert
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 begin delete items. end delete begin insert items, except for those items which
are the subject of litigation disputing the department’s previous
or related determination. end insert 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.

begin delete

(1)

end delete

begin insert (A) end insert  The successor agency shall submit a copy of the Recognized
Obligation Payment Schedule to the begin delete Department of Finance end delete
begin insert department end insert 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.

begin delete

(2)

end delete

begin insert (B) end insert  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 begin delete agency end delete begin insert agency, if it is acting as the successor
agency, end insert 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.

begin delete

(3)

end delete

begin insert (C) end insert  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.

begin delete

(4) (A) 

end delete

begin insert (D) end insert begin insert   end insert begin insert (i) end insert begin insert   end insert The Recognized Obligation Payment Schedule payments
required pursuant to this subdivision may be scheduled beyond
the existing Recognized Obligation Payment Schedule cycle upon
a showing that a lender requires cash on hand beyond the
Recognized Obligation Payment Schedule cycle.

begin delete

(B)

end delete

begin insert (ii) end insert  When a payment is shown to be due during the Recognized
Obligation Payment Schedule period, but an invoice or other billing
document has not yet been received, the successor agency may
utilize reasonable estimates and projections to support payment
amounts for enforceable obligations if the successor agency submits
appropriate supporting documentation of the basis for the estimate
or projection to the department and the auditor-controller.

begin delete

(C)

end delete

begin insert (iii) end insert  A Recognized Obligation Payment Schedule may also
include appropriation of moneys from bonds subject to passage
during the Recognized Obligation Payment Schedule cycle when
an enforceable obligation requires the agency to issue the bonds
and use the proceeds to pay for project expenditures.

begin insert

(2) The requirements of this subdivision shall apply until
December 31, 2015.

end insert

(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.

begin insert

(o) (1) Commencing with the Recognized Obligation Payment
Schedule covering the period from July 1, 2016, to June 30, 2017,
inclusive, and for each period from July 1 to June 30, inclusive,
thereafter, a successor agency shall submit an oversight
board-approved Recognized Obligation Payment Schedule to the
department and to the county auditor-controller no later than
February 1, 2016, and each February 1 thereafter. The department
shall make its determination of the enforceable obligations and
the amounts and funding sources of the enforceable obligations
no later than April 15, 2016, and each April 15 thereafter. 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, except for those
items which are the subject of litigation disputing the department’s
previous or related determination. 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-controller as to the
outcome of its review at least 15 days before the date of the first
property tax distribution for that period.

end insert begin insert

(A) The successor agency shall submit a copy of the Recognized
Obligation Payment Schedule to the department in the manner
provided for by the department.

end insert begin insert

(B) 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, if acting as the successor 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 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
for that period shall be reduced by 25 percent.

end insert begin insert

(C) 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 do not
have the authority to withhold any other amounts from the
allocations provided for under Section 34183 or 34188 except as
required by a court order.

end insert begin insert

(D) (i) The Recognized Obligation Payment Schedule payments
required pursuant to this subdivision may be scheduled beyond
the existing Recognized Obligation Payment Schedule cycle upon
a showing that a lender requires cash on hand beyond the
Recognized Obligation Payment Schedule cycle.

end insert begin insert

(ii) When a payment is shown to be due during the Recognized
Obligation Payment Schedule period, but an invoice or other
billing document has not yet been received, the successor agency
may utilize reasonable estimates and projections to support
payment amounts for enforceable obligations if the successor
agency submits appropriate supporting documentation of the basis
for the estimate or projection to the department and the county
auditor-controller.

end insert begin insert

(iii) A Recognized Obligation Payment Schedule may also
include a request to use proceeds from bonds expected to be issued
during the Recognized Obligation Payment Schedule cycle when
an enforceable obligation requires the agency to issue the bonds
and use the proceeds to pay for project expenditures.

end insert begin insert

(E) Once per Recognized Obligation Payment Schedule period,
and no later than October 1, a successor agency may submit one
amendment to the Recognized Obligation Payment Schedule
approved by the department pursuant to this subdivision, if the
oversight board makes a finding that a revision is necessary for
the payment of approved enforceable obligations during the second
one-half of the Recognized Obligation Payment Schedule period,
which shall be defined as January 1 to June 30, inclusive. A
successor agency may only amend the amount requested for
payment of approved enforceable obligations. The revised
Recognized Obligation Payment Schedule shall be approved by
the oversight board and submitted to the department by electronic
means in a manner of the department’s choosing. The department
shall notify the successor agency and the county auditor-controller
as to the outcome of the department’s review at least 15 days before
the date of the property tax distribution.

end insert begin insert

(2) The requirements of this subdivision shall apply on and after
January 1, 2016.

end insert

begin insert

begin insert SEC. 7. end insert   

end insert

begin insert Section 34177.3 of the end insert begin insert Health and Safety Code end insert begin insert is
amended to read: end insert

34177.3.  

(a) Successor agencies shall lack the authority to,
and shall not, create new enforceable obligations begin delete under the
authority of the Community Redevelopment Law (Part 1
(commencing with Section 33000)) end delete or begin begin delete new end delete redevelopment
work, except in compliance with an enforceable begin delete obligation end delete
begin insert obligation, as defined by subdivision (d) of Section 34171, end insert that
existed prior to June 28, 2011.

(b)  begin delete Successor end delete begin insert Notwithstanding subdivision (a), successor end insert
agencies may create enforceable obligations to conduct the work
of winding down the redevelopment agency, including hiring staff,
acquiring necessary professional administrative services and legal
counsel, and procuring insurance. begin insert Except as required by an
enforceable obligation, the work of winding down the
redevelopment agency does not include planning, design, redesign,
development, demolition, alteration, construction, construction
financing, site remediation, site development or improvement, land
clearance, seismic retrofits, and other similar work. Successor
agencies may not create enforceable obligations to repay loans
entered into between the redevelopment agency that it is succeeding
and the city, county, or city and county that formed the
redevelopment agency that it is succeeding, except as provided in
Chapter 9 (commencing with Section 34191.1). end insert

(c) Successor agencies shall lack the authority to, and shall not,
transfer any powers or revenues of the successor agency to any
other party, public or private, except pursuant to an enforceable
obligation on a Recognized Obligation Payment Schedule approved
by the department. Any such transfers of authority or revenues
that are not made pursuant to an enforceable obligation on a
Recognized Obligation Payment Schedule approved by the
begin delete Department of Finance end delete begin insert department end insert are hereby declared to be void,
and the successor agency shall take action to reverse any of those
transfers. The Controller may audit any transfer of authority or
revenues prohibited by this section and may order the prompt
return of any money or other things of value from the receiving
party.

(d) Redevelopment agencies that resolved to participate in the
Voluntary Alternative Redevelopment Program under Chapter 6
of the First Extraordinary Session of the Statutes of 2011 were and
are subject to the provisions of Part 1.8 (commencing with Section
34161). Any actions taken by redevelopment agencies to create
obligations after June 27, 2011, are ultra vires and do not create
enforceable obligations.

(e) The begin delete Legislature finds and declares that the end delete provisions of this
section begin delete are declaratory of existing law. end delete begin insert shall apply retroactively
to any successor agency or redevelopment agency actions
occurring on or after June 27, 2012. end insert

begin insert

begin insert SEC. 8. end insert   

end insert

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

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 begin delete Department of Finance end delete
begin insert department end insert 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
begin delete Department of Finance end delete begin insert department end insert 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 begin delete 29, end delete begin insert 28, end insert 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
begin delete Department of Finance end delete begin insert department end insert at its request.

(i) If an enforceable obligation provides for an irrevocable
commitment of begin delete property tax end delete revenue and where allocation of such
revenues is expected to occur over time, the successor agency may
petition the begin delete Department end delete begin insert department by electronic means and in a
manner end insert of begin delete Finance end delete begin insert the department’s choosing end insert 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.
begin insert The successor agency shall provide a copy of the petition to the
county auditor-controller at the same time it is submitted to the
department. The department shall have 100 days from the date of
the request for a final and conclusive determination to provide
written confirmation of approval or denial of the request. For any
pending final and conclusive determination requests submitted
prior to June 30, 2015, the department shall have until September
30, 2015, to provide written confirmation of approval or denial
of the request. end insert If the confirmation begin insert of approval end insert 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.

(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.

begin insert

begin insert SEC. 9. end insert   

end insert

begin insert Section 34177.7 is added to the end insert begin insert Health and Safety
Code end insert begin insert , to read: end insert

begin insert

begin insert 34177.7. end insert   

(a) (1) 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,
the successor agency to the Redevelopment Agency of the City and
County of San Francisco shall have the authority, rights, and
powers of the Redevelopment Agency to which it succeeded solely
for the purpose of issuing bonds or incurring other indebtedness
to finance:

(A) The affordable housing required by the Mission Bay North
Owner Participation Agreement, the Mission Bay South Owner
Participation Agreement, the Disposition and Development
Agreement for Hunters Point Shipyard Phase 1, the Candlestick
Point-Hunters Point Shipyard Phase 2 Disposition and
Development Agreement, and the Transbay Implementation
Agreement.

(B) The infrastructure required by the Transbay Implementation
Agreement.

(2) The successor agency to the Redevelopment Agency of the
City and County of San Francisco may pledge to the bonds or
other indebtedness the property tax revenues available in the
successor agency’s Redevelopment Property Tax Trust Fund that
are not otherwise obligated.

(b) Bonds issued pursuant to this section may be sold pursuant
to either a negotiated or a competitive sale. The bonds issued or
other indebtedness obligations incurred pursuant to this section
may be issued or incurred on a parity basis with outstanding bonds
or other indebtedness obligations of the successor agency to the
Redevelopment Agency of the City and County of San Francisco
and may pledge the revenues pledged to those outstanding bonds
or other indebtedness obligations to the issuance of bonds or other
obligations pursuant to this section. The pledge, when made in
connection with the issuance of bonds or other indebtedness
obligations under this section, shall have the same lien priority as
the pledge of outstanding bonds or other indebtedness obligations,
and shall be valid, binding, and enforceable in accordance with
its terms.

(c) (1) Prior to issuing any bonds or incurring other
indebtedness pursuant to this section, the successor agency to the
Redevelopment Agency of the City and County of San Francisco
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 agency requests an affected taxing entity to
subordinate the amount to be paid to it, the 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 to the Redevelopment Agency of the City and County of
San Francisco authorizing the bonds or other indebtedness
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
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 or
the incurrence of indebtedness by the successor agency to the
Redevelopment Agency of the City and County of San Francisco
shall be brought within 30 days after the date on which the
oversight board approves the resolution of the agency approving
the issuance of bonds or the incurrence of indebtedness 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, the oversight board may direct the successor agency
to the Redevelopment Agency of the City and County of San
Francisco to commence any of the transactions described in
subdivision (a) so long as the agency is able to recover its related
costs in connection with the transaction. After the agency, with
approval of the oversight board, issues any bonds or incurs any
indebtedness pursuant to subdivision (a), the oversight board shall
not unilaterally approve any amendments to or early termination
of the bonds or indebtedness. If, under the authority granted to it
by subdivision (h) of Section 34179, the department 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 or other indebtedness authorized by this section
shall be considered indebtedness incurred by the dissolved
redevelopment agency, with the same legal effect as if the bonds
or other indebtedness had been issued, incurred, or entered into
prior to June 28, 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 to the
Redevelopment Agency of the City and County of San Francisco’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 or other
indebtedness 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 to the Redevelopment Agency of the
City and County of San Francisco 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 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 at its request.

end insert

begin insert

begin insert SEC. 10. end insert   

end insert

begin insert Section 34178 of the end insert begin insert Health and Safety Code end insert begin insert is
amended to read: end insert

34178.  

(a) Commencing on the operative date of this part,
agreements, contracts, or arrangements between the city or county,
or city and county that created the redevelopment agency and the
redevelopment agency are invalid and shall not be binding on the
successor agency; provided, however, that a successor entity
wishing to enter or reenter into agreements with the city, county,
or city and county that formed the redevelopment agency that it
is succeeding may do so begin delete upon obtaining end delete begin delete the end delete begin delete approval of its
oversight board. A successor agency or an oversight board shall
not exercise the powers granted by this subdivision to restore
funding for an enforceable obligation that was deleted or reduced
by the Department of Finance pursuant to subdivision (h) of Section
34179 unless it reflects the decisions made during the meet and
confer process with the Department of Finance or pursuant to a
court order. end delete begin insert subject to the restrictions identified in subdivision (c),
and upon obtaining the approval of its oversight board. end insert

(b) Notwithstanding subdivision (a), any of the following
agreements are not invalid and may bind the successor agency:

(1) A duly authorized written agreement entered into at the time
of issuance, but in no event later than December 31, 2010, of
indebtedness obligations, and solely for the purpose of securing
or repaying those indebtedness obligations.

(2) A written agreement between a redevelopment agency and
the city, county, or city and county that created it that provided
loans or other startup funds for the redevelopment agency that
were entered into within two years of the formation of the
redevelopment agency.

(3) A joint exercise of powers agreement begin insert entered into no later
than December 31, 2010, end insert in which the redevelopment agency is a
member of the joint powers authority. However, upon assignment
to the successor agency by operation of the act adding this part,
the successor agency’s rights, duties, and performance obligations
under that joint exercise of powers agreement shall be limited by
the constraints imposed on successor agencies by the act adding
this part.

begin insert

(4) A duly authorized written agreement entered into at the time
of issuance, but in no event later than June 27, 2011, of
indebtedness obligations solely for the refunding or refinancing
of other indebtedness obligations that existed prior to January 1,
2011, and solely for the purpose of securing or repaying the
refunded and refinanced indebtedness obligations.

end insert begin insert

(c) An oversight board shall not approve any agreements
between the successor agency and the city, county, or city and
county that formed the redevelopment agency that it is succeeding,
except for agreements for the limited purposes set forth in
subdivision (b) of Section 34177.3. A successor agency shall not
enter or reenter into any agreements with the city, county, or city
and county that formed the redevelopment agency that it is
succeeding, except for agreements for the limited purposes set
forth in subdivision (b) of Section 34177.3. A successor agency or
an oversight board shall not exercise the powers granted by
subdivision (a) to restore funding for any item that was denied or
reduced by the department. This subdivision shall apply
retroactively to all agreements entered or reentered pursuant to
this section on and after June 27, 2012. Any agreement entered
or reentered pursuant to this section on and after June 27, 2012,
that does not comply with this subdivision is ultra vires and void,
and does not create an enforceable obligation. The Legislature
finds and declares that this subdivision is necessary to promote
the expeditious wind down of redevelopment agency affairs.

end insert

begin insert

begin insert SEC. 11. end insert   

end insert

begin insert Section 34179 of the end insert begin insert Health and Safety Code end insert begin insert is
amended to read: end insert

34179.  

(a) Each successor agency shall have an oversight
board composed of seven members. The members shall elect one
of their members as the chairperson and shall report the name of
the chairperson and other members to the Department of Finance
on or before May 1, 2012. Members shall be selected as follows:

(1) One member appointed by the county board of supervisors.

(2) One member appointed by the mayor for the city that formed
the redevelopment agency.

(3) (A) One member appointed by the largest special district,
by property tax share, with territory in the territorial jurisdiction
of the former redevelopment agency, which is of the type of special
district that is eligible to receive property tax revenues pursuant
to Section 34188.

(B)  On or after the effective date of this subparagraph, the
county auditor-controller may determine which is the largest special
district for purposes of this section.

(4) One member appointed by the county superintendent of
education to represent schools if the superintendent is elected. If
the county superintendent of education is appointed, then the
appointment made pursuant to this paragraph shall be made by the
county board of education.

(5) One member appointed by the Chancellor of the California
Community Colleges to represent community college districts in
the county.

(6) One member of the public appointed by the county board
of supervisors.

(7) One member representing the employees of the former
redevelopment agency appointed by the mayor or chair of the
board of supervisors, as the case may be, from the recognized
employee organization representing the largest number of former
redevelopment agency employees employed by the successor
agency at that time. In the case where city or county employees
performed administrative duties of the former redevelopment
agency, the appointment shall be made from the recognized
employee organization representing those employees. If a
recognized employee organization does not exist for either the
employees of the former redevelopment agency or the city or
county employees performing administrative duties of the former
redevelopment agency, the appointment shall be made from among
the employees of the successor agency. In voting to approve a
contract as an enforceable obligation, a member appointed pursuant
to this paragraph shall not be deemed to be interested in the contract
by virtue of being an employee of the successor agency or
community for purposes of Section 1090 of the Government Code.

(8) If the county or a joint powers agency formed the
redevelopment agency, then the largest city by acreage in the
territorial jurisdiction of the former redevelopment agency may
select one member. If there are no cities with territory in a project
area of the redevelopment agency, the county superintendent of
education may appoint an additional member to represent the
public.

(9) If there are no special districts of the type that are eligible
to receive property tax pursuant to Section 34188, within the
territorial jurisdiction of the former redevelopment agency, then
the county may appoint one member to represent the public.

(10) If a redevelopment agency was formed by an entity that is
both a charter city and a county, the oversight board shall be
composed of seven members selected as follows: three members
appointed by the mayor of the city, if that appointment is subject
to confirmation by the county board of supervisors, one member
appointed by the largest special district, by property tax share, with
territory in the territorial jurisdiction of the former redevelopment
agency, which is the type of special district that is eligible to
receive property tax revenues pursuant to Section 34188, one
member appointed by the county superintendent of education to
represent schools, one member appointed by the Chancellor of the
California Community Colleges to represent community college
districts, and one member representing employees of the former
redevelopment agency appointed by the mayor of the city if that
appointment is subject to confirmation by the county board of
supervisors, to represent the largest number of former
redevelopment agency employees employed by the successor
agency at that time.

begin insert

(11) Each appointing authority identified in this subdivision
may, but is not required to, appoint alternate representatives to
serve on the oversight board as may be necessary to attend any
meeting of the oversight board in the event that the appointing
authority’s primary representative is unable to attend any meeting
for any reason. If an alternate representative attends any meeting
in place of the primary representative, the alternative
representative shall have the same participatory and voting rights
as all other attending members of the oversight board.

end insert

(b) The Governor may appoint individuals to fill any oversight
board member position described in subdivision (a) that has not
been filled by May 15, 2012, or any member position that remains
vacant for more than 60 days.

(c) The oversight board may direct the staff of the successor
agency to perform work in furtherance of the oversight board’s
begin insert and the successor agency’s end insert duties and responsibilities under this
part. The successor agency shall pay for all of the costs of meetings
of the oversight board and may include such costs in its
administrative budget. Oversight board members shall serve
without compensation or reimbursement for expenses.

(d) Oversight board members are protected by the immunities
applicable to public entities and public employees governed by
Part 1 (commencing with Section 810) and Part 2 (commencing
with Section 814) of Division 3.6 of Title 1 of the Government
Code.

(e) A majority of the total membership of the oversight board
shall constitute a quorum for the transaction of business. A majority
vote of the total membership of the oversight board is required for
the oversight board to take action. The oversight board shall be
deemed to be a local entity for purposes of the Ralph M. Brown
Act, the California Public Records Act, and the Political Reform
Act of 1974. All actions taken by the oversight board shall be
adopted by resolution.

(f) All notices required by law for proposed oversight board
actions shall also be posted on the successor agency’s Internet
Web site or the oversight board’s Internet Web site.

(g) Each member of an oversight board shall serve at the
pleasure of the entity that appointed such member.

begin insert

(h) (1) The department may review an oversight board action
taken pursuant to this part. Written notice and information about
all actions taken by an oversight board shall be provided to the
department as an approved resolution by electronic means and in
a manner of the department’s choosing. Without abrogating the
department’s authority to review all matters related to the
Recognized Obligation Payment Schedule pursuant to Section
34177, oversight boards are not required to submit the following
oversight board actions for department approval:

end insert begin insert

(A) Meeting minutes and agendas.

end insert begin insert

(B) Administrative budgets.

end insert begin insert

(C) Changes in oversight board members, or the selection of
an oversight board chair or vice chair.

end insert begin insert

(D) Transfers of governmental property pursuant to an approved
Long Range Property Management Plan.

end insert begin insert

(E) Transfers of property to be retained by the sponsoring entity
for future development pursuant to an approved long-range
property management plan.

end insert begin delete

(h) The Department of Finance may review an

end delete

begin insert (2) end insert begin insert   end insert begin insert An end insert oversight board action begin delete taken pursuant to this part. Written
notice and information about all actions taken by an oversight
board shall be provided to the department by electronic means and end delete
begin insert submitted end insert in a manner begin delete of end delete begin delete the end delete begin delete department’s choosing. An action end delete
begin insert specified by the department end insert shall become effective five business
days after begin delete notice in the manner specified by the department is
provided end delete begin insert submission, end insert unless the department requests a begin delete review. end delete
begin insert review of the action. end insert Each oversight board shall designate an
official to whom the department may make those requests and who
shall provide the department with the telephone number and e-mail
contact information for the purpose of communicating with the
department pursuant to this subdivision. Except as otherwise
provided in this part, in the event that the department requests a
review of a given oversight board action, it shall have 40 days
from the date of its request to approve the oversight board action
or return it to the oversight board for reconsideration and the
oversight board action shall not be effective until approved by the
department. In the event that the department returns the oversight
board action to the oversight board for reconsideration, the
oversight board shall resubmit the modified action for department
approval and the modified oversight board action shall not become
effective until approved by the department. If the department
reviews a Recognized Obligation Payment Schedule, the
department may eliminate or modify any item on that schedule
prior to its approval. The county auditor-controller shall reflect
the actions of the department in determining the amount of property
tax revenues to allocate to the successor agency. The department
shall provide notice to the successor agency and the county
auditor-controller as to the reasons for its actions. To the extent
that an oversight board continues to dispute a determination with
the department, one or more future recognized obligation schedules
may reflect any resolution of that dispute. The department may
also agree to an amendment to a Recognized Obligation Payment
Schedule to reflect a resolution of a disputed item; however, this
shall not affect a past allocation of property tax or create a liability
for any affected taxing entity.

(i) Oversight boards shall have fiduciary responsibilities to
holders of enforceable obligations and the taxing entities that
benefit from distributions of property tax and other revenues
pursuant to Section 34188. Further, the provisions of Division 4
(commencing with Section 1000) of the Government Code shall
apply to oversight boards. Notwithstanding Section 1099 of the
Government Code, or any other law, any individual may
simultaneously be appointed to up to five oversight boards and
may hold an office in a city, county, city and county, special
district, school district, or community college district.

(j)  begin delete Commencing end delete begin insert Except as specified in subdivision (q),
commencing end insert on and after July 1, begin delete 2016, end delete begin insert 2017, end insert in each county where
more than one oversight board was created by operation of the act
adding this part, there shall be only one oversight begin insert board, which
shall be staffed by the county auditor-controller, by another county
entity selected by the county auditor-controller, or by a city within
the county that the county auditor-controller may select after
consulting with the department. Pursuant to Section 34183, the
county auditor-controller may recover directly from the
Redevelopment Property Tax Trust Fund, and distribute to the
appropriate city or county entity, reimbursement for all costs
incurred by it or by the city or county pursuant to this subdivision,
which shall include any associated start-up costs. However, if only
one successor agency exists within the county, the county
auditor-controller may designate the successor agency to staff the
oversight board. The oversight end insert board begin insert is end insert appointed as follows:

(1) One member may be appointed by the county board of
supervisors.

(2) One member may be appointed by the city selection
committee established pursuant to Section 50270 of the
Government Code. In a city and county, the mayor may appoint
one member.

(3) One member may be appointed by the independent special
district selection committee established pursuant to Section 56332
of the Government Code, for the types of special districts that are
eligible to receive property tax revenues pursuant to Section 34188.

(4) One member may be appointed by the county superintendent
of education to represent schools if the superintendent is elected.
If the county superintendent of education is appointed, then the
appointment made pursuant to this paragraph shall be made by the
county board of education.

(5) One member may be appointed by the Chancellor of the
California Community Colleges to represent community college
districts in the county.

(6) One member of the public may be appointed by the county
board of supervisors.

(7) One member may be appointed by the recognized employee
organization representing the largest number of successor agency
employees in the county.

(k) The Governor may appoint individuals to fill any oversight
board member position described in subdivision (j) that has not
been filled by July 15, 2016, or any member position that remains
vacant for more than 60 days.

(l) Commencing on and after July 1, 2016, in each county where
only one oversight board was created by operation of the act adding
this part, then there will be no change to the composition of that
oversight board as a result of the operation of subdivision (b).

(m) Any oversight board for a given successor begin insert agency, with the
exception of countywide oversight boards, shall cease to exist when
the successor end insert agency begin insert has been formally dissolved pursuant to
Section 34187. A county oversight board end insert shall cease to exist when
all begin delete of the indebtedness of the end delete begin delete dissolved end delete begin delete redevelopment agency has
been repaid. end delete begin insert successor agencies subject to its oversight have been
formally dissolved pursuant to Section 34187. end insert

(n) An oversight board may direct a successor agency to provide
additional legal or financial advice than what was given by agency
staff.

(o) An oversight board is authorized to contract with the county
or other public or private agencies for administrative support.

(p) On matters within the purview of the oversight board,
decisions made by the oversight board supersede those made by
the successor agency or the staff of the successor agency.

begin insert

(q) (1) Commencing on and after July 1, 2017, in each county
where more than 40 oversight boards were created by operation
of the act adding this part, there shall be five oversight boards,
which shall each be staffed in the same manner as specified in
subdivision (j). The membership of each oversight board shall be
as specified in paragraphs (1) through (7), inclusive, of subdivision
(j).

end insert begin insert

(2) The oversight boards shall be numbered one through five,
and their respective jurisdictions shall encompass the territory
located within the respective borders of the first through fifth
county board of supervisors districts, as those borders existed on
July 1, 2016. Except as specified in paragraph (3), each oversight
board shall have jurisdiction over each successor agency located
within its borders.

end insert begin insert

(3) If a successor agency has territory located within more than
one county board of supervisors’ district, the county board of
supervisors shall, no later than July 15, 2016, determine which
oversight board shall have jurisdiction over that successor agency.
The county board of supervisors or their designee shall report this
information to the successor agency and the department by the
aforementioned date.

end insert begin insert

(4) The successor agency to the former redevelopment agency
created by a county where more than 40 oversight boards were
created by operation of the act adding this part, shall be under
the jurisdiction of the oversight board with the fewest successor
agencies under its jurisdiction.

end insert

begin insert

begin insert SEC. 12. end insert   

end insert

begin insert Section 34179.7 of the end insert begin insert Health and Safety Code end insert begin insert is
amended to read: end insert

34179.7.  

Upon full payment of the amounts determined in
subdivision (d) or (e) of Section 34179.6 as reported by the county
auditor-controller pursuant to subdivision (g) of Section 34179.6
and of any amounts due as determined by Section 34183.5, or upon
a final judicial determination of the amounts due and confirmation
that those amounts have been paid by the county auditor-controller,
begin insert or upon entering into a written installment payment plan with end insert the
department begin insert for payment of the amounts due, the department end insert shall
issue, within five business days, a finding of completion of the
requirements of Section 34179.6 to the successor agency.

begin insert

(a) Notwithstanding any other of law, if a successor agency
fails by December 31, 2015, to pay, or to enter into a written
installment payment plan with the department for the payment of,
the amounts determined in subdivision (d) or (e) of Section
34179.6, or the amounts determined by Section 34183.5, the
successor agency shall never receive a finding of completion.

end insert begin insert

(b) If a successor agency, city, county, or city and county pays,
or enters into a written installment payment plan with the
department for the payment of the amounts determined in
subdivision (d) or (e) of Section 34179.6 or the amounts determined
by Section 34183.5, and the successor agency, city, county, or city
and county subsequently receives a final judicial determination
that reduces or eliminates the amounts determined, an enforceable
obligation for the reimbursement of the excess amounts paid shall
be created and the obligation to make any payments in excess of
the amount determined by a final judicial determination shall be
canceled and be of no further force or effect.

end insert begin insert

(c) If, upon consultation with the county auditor-controller, the
department finds that a successor agency, city, county, or city and
county has failed to fully make one or more payments agreed to
in the written installment payment plan, the following shall occur
unless the county auditor-controller reports within 10 business
days that the successor agency, city, county, or city and county
has made the entirety of the incomplete payment or payments:

end insert begin insert

(1) Section 34191.3, subdivision (b) of Section 34191.4, and
Section 34191.5 shall not apply to the successor agency.

end insert begin insert

(2) Oversight board actions taken under subdivision (b) of
Section 34191.4 shall no longer be effective. Any loan agreements
entered into between the redevelopment agency and the city,
county, or city and county that created the redevelopment agency
that were deemed enforceable obligations pursuant to such
oversight board actions shall no longer be enforceable obligations.

end insert begin insert

(3) If the department has approved a long-range property
management plan for the successor agency, that plan shall no
longer be effective. Any property that has not been disposed of
through the plan prior to the nonpayment discussed in paragraph
(3) shall be disposed of pursuant to Section 34181.

end insert begin insert

(4) If applicable, the successor agency’s Last and Final
Recognized Obligation Payment Schedule shall cease to be
effective. However, to ensure the flow of lawful payments to third
parties is not impeded, the Last and Final Recognized Obligation
Payment Schedule shall remain operative until the successor
agency’s next Recognized Obligation Payment Schedule is
approved and becomes operative pursuant to Section 34177.

end insert begin insert

(d) Subdivision (c) shall not be construed to prevent the
department from working with a successor agency, city, county,
or city and county to amend the terms of a written installment
payment plan if the department determines the amendments are
necessitated by the successor agency’s, city’s, county’s, or city
and county’s fiscal situation.

end insert

begin insert

begin insert SEC. 13. end insert   

end insert

begin insert Section 34179.9 is added to the end insert begin insert Health and Safety
Code end insert begin insert , to read: end insert

begin insert

begin insert 34179.9. end insert   

(a) The city, county, or city and county that created
the former redevelopment agency shall return to the successor
agency all assets transferred to the city, county, or city and county
ordered returned pursuant to Section 34167.5.

(b) (1) The city, county, or city and county that created the
former redevelopment agency shall return to the successor agency
all cash and cash equivalents transferred to the city, county, or
city and county that were not required by an enforceable obligation
as determined pursuant to Sections 34179.5 and 34179.6.

(2) Any amounts required to be returned to the successor agency
under Sections 34179.5 and 34179.6, and paragraph (1) of this
subdivision, that were transferred to the city, county, or city and
county that created the former redevelopment agency as repayment
for an advance of funds made by the city, county, or city and county
to the former redevelopment agency or successor agency that was
needed to pay the former redevelopment agency’s debt service or
passthrough payments may be placed on a Recognized Obligation
Payment Schedule by the successor agency for payment as an
enforceable obligation subject to the following conditions:

(A) The transfer to the city, county, or city and county by the
former redevelopment agency or successor agency as repayment
for the advance of funds occurred within 30 days of receipt of a
duly scheduled property tax distribution to the former
redevelopment agency by the county auditor-controller.

(B) The loan from the city, county, or city and county was
necessary because the former redevelopment agency or successor
agency had insufficient funds to pay for the former redevelopment
agency’s debt service or passthrough payments.

(3) Paragraph (2) shall not apply if:

(A) The former redevelopment agency had insufficient funds as
a result of an unauthorized transfer of cash or cash equivalents
to the city, county, or city and county that created the former
redevelopment agency.

(B) The successor agency has received a finding of completion
as of the effective date of the act that added this section.

(C) The successor agency, the city, county, or city and county
that created the former redevelopment agency, or the successor
agency’s oversight board, is currently or was previously a party
to outstanding litigation contesting the department’s determination
under subdivision (d) or (e) of Section 34179.6.

(c) The city, county, or city and county that created the former
redevelopment agency shall return to the successor agency any
money or assets transferred to the city, county, or city and county
by the successor agency that were not authorized pursuant to an
effective oversight board action or Recognized Obligation Payment
Schedule determination.

end insert

begin insert

begin insert SEC. 14. end insert   

end insert

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

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.

(g) Establishment of the Recognized Obligation Payment
Schedule.

(h) A request by the successor agency to enter begin insert or reenter end insert into
an agreement with the city, county, or city and county that formed
the redevelopment agency that it is begin delete succeeding. end delete begin insert succeeding
pursuant to Section 34178. end insert 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 begin insert establish or end insert
reestablish any other agreements that are begin delete in furtherance of
enforceable obligations, end delete begin insert authorized under this part, end insert 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.

begin insert

begin insert SEC. 15. end insert   

end insert

begin insert Section 34181 of the end insert begin insert Health and Safety Code end insert begin insert is
amended to read: end insert

34181.  

The oversight board shall direct the successor agency
to do all of the following:

(a)  begin insert (1) end insert begin insert   end insert Dispose of all assets and properties of the former
redevelopment agency; provided, however, that the oversight board
may instead direct the successor agency to transfer ownership of
those assets that were constructed and used for a governmental
purpose, such as roads, school buildings, parks, police and fire
stations, libraries, begin insert parking facilities end insert and begin insert lots dedicated solely to
public parking, and end insert local agency administrative buildings, to the
appropriate public jurisdiction pursuant to any existing agreements
relating to the construction or use of such an asset. Any
compensation to be provided to the successor agency for the
transfer of the asset shall be governed by the agreements relating
to the construction or use of that asset. Disposal shall be done
expeditiously and in a manner aimed at maximizing value. Asset
disposition may be accomplished by a distribution of income to
taxing entities proportionate to their property tax share from one
or more properties that may be transferred to a public or private
agency for management pursuant to the direction of the oversight
board.

begin insert

(2) “Parking facilities and lots dedicated solely to public
parking” do not include properties that generate revenues in excess
of reasonable maintenance costs of the properties.

end insert

(b) Cease performance in connection with and terminate all
existing agreements that do not qualify as enforceable obligations.

(c) Transfer housing assets pursuant to Section 34176.

(d) Terminate any agreement, between the dissolved
redevelopment agency and any public entity located in the same
county, obligating the redevelopment agency to provide funding
for any debt service obligations of the public entity or for the
construction, or operation of facilities owned or operated by such
public entity, in any instance where the oversight board has found
that early termination would be in the best interests of the taxing
entities.

(e) Determine whether any contracts, agreements, or other
arrangements between the dissolved redevelopment agency and
any private parties should be terminated or renegotiated to reduce
liabilities and increase net revenues to the taxing entities, and
present proposed termination or amendment agreements to the
oversight board for its approval. The board may approve any
amendments to or early termination of those agreements if it finds
that amendments or early termination would be in the best interests
of the taxing entities.

(f) All actions taken pursuant to subdivisions (a) and (c) shall
be approved by resolution of the oversight board at a public
meeting after at least 10 days’ notice to the public of the specific
proposed actions. The actions shall be subject to review by the
begin delete Department of Finance end delete begin insert department end insert pursuant to Section 34179
except that the department may extend its review period by up to
60 days. If the department does not object to an action subject to
this section, and if no action challenging an action is commenced
within 60 days of the approval of the action by the oversight board,
the action of the oversight board shall be considered final and can
be relied upon as conclusive by any person. If an action is brought
to challenge an action involving title to or an interest in real
property, a notice of pendency of action shall be recorded by the
claimant as provided in Title 4.5 (commencing with Section 405)
of Part 2 of the Code of Civil Procedure within a 60-day period.

begin insert

begin insert SEC. 16. end insert   

end insert

begin insert Section 34183 of the end insert begin insert Health and Safety Code end insert begin insert is
amended to read: end insert

34183.  

(a) Notwithstanding any other law, from February 1,
2012, to July 1, 2012, and for each fiscal year thereafter, the county
auditor-controller shall, after deducting administrative costs
allowed under Section 34182 and Section 95.3 of the Revenue and
Taxation Code, allocate moneys in each Redevelopment Property
Tax Trust Fund as follows:

(1)  begin insert (A) end insert begin insert   end insert Subject to any prior deductions required by subdivision
(b), first, the county auditor-controller shall remit from the
Redevelopment Property Tax Trust Fund to each local agency and
school entity an amount of property tax revenues in an amount
equal to that which would have been received under Section 33401,
33492.140, 33607, 33607.5, 33607.7, or 33676, as those sections
read on January 1, 2011, or pursuant to any passthrough agreement
between a redevelopment agency and a taxing entity that was
entered into prior to January 1, 1994, that would be in force during
that fiscal year, had the redevelopment agency existed at that time.
The amount of the payments made pursuant to this paragraph shall
be calculated solely on the basis of passthrough payment
obligations, existing prior to the effective date of this part and
continuing as obligations of successor entities, shall occur no later
than May 16, 2012, and no later than June 1, 2012, and each
January 2 and June 1 thereafter. Notwithstanding subdivision (e)
of Section 33670, that portion of the taxes in excess of the amount
identified in subdivision (a) of Section 33670, which are
attributable to a tax rate levied by a taxing entity for the purpose
of producing revenues in an amount sufficient to make annual
repayments of the principal of, and the interest on, any bonded
indebtedness for the acquisition or improvement of real property
shall be allocated to, and when collected shall be paid into, the
fund of that taxing entity. The amount of passthrough payments
computed pursuant to this section, including any passthrough
agreements, shall be computed as though the requirement to set
aside funds for the Low and Moderate Income Housing Fund was
still in effect.

begin insert

(B) Notwithstanding subdivision (b) of Section 33670, that
portion of the taxes in excess of the amount identified in subdivision
(a) of Section 33670, which are attributable to a property tax rate
approved by the voters of a city, county, city and county, or special
district to make payments in support of pension programs or in
support of capital projects and programs related to the State Water
Project, and levied in addition to the property tax rate limited by
subdivision (a) of Section 1 of Article XIII A of the California
Constitution, shall be allocated to, and when collected shall be
paid into, the fund of that taxing entity, unless the amounts in
question are pledged as security for the payment of any
indebtedness obligation, as defined in subdivision (e) of Section
34171, and needed for payment thereof. Notwithstanding any other
law, all allocations of revenues above one cent ($0.01) derived
from the imposition of a property tax rate, approved by the voters
of a city, county, city and county, or special district to make
payments in support of pension programs or in support of capital
projects and programs related to the State Water Project and
levied in addition to the property tax rate limited by subdivision
(a) of Section 1 of Article XIII A of the California Constitution,
made by any county auditor-controller prior to June 15, 2015, are
valid and shall not be affected by this section. A city, county, city
and county, county auditor-controller, successor agency,
department, or affected taxing entity shall not be subject to any
claim for money, damages, or reallocated revenues based on any
allocation of such revenues above one cent ($0.01) prior to June
15, 2015.

end insert

(2) Second, on June 1, 2012, and each January 2 and June 1
thereafter, to each successor agency for payments listed in its
Recognized Obligation Payment Schedule for the six-month fiscal
period beginning January 1, 2012, and July 1, 2012, and each
January 2 and June 1 thereafter, in the following order of priority:

(A) Debt service payments scheduled to be made for tax
allocation bonds.

(B) Payments scheduled to be made on revenue bonds, but only
to the extent the revenues pledged for them are insufficient to make
the payments and only if the agency’s tax increment revenues were
also pledged for the repayment of the bonds.

(C) Payments scheduled for other debts and obligations listed
in the Recognized Obligation Payment Schedule that are required
to be paid from former tax increment revenue.

(3) Third, on June 1, 2012, and each January 2 and June 1
thereafter, to each successor agency for the administrative cost
allowance, as defined in Section 34171, for administrative costs
set forth in an approved administrative budget for those payments
required to be paid from former tax increment revenues.

(4) Fourth, on June 1, 2012, and each January 2 and June 1
thereafter, any moneys remaining in the Redevelopment Property
Tax Trust Fund after the payments and transfers authorized by
paragraphs (1) to (3), inclusive, shall be distributed to local
agencies and school entities in accordance with Section 34188.
begin insert The only exception shall be for moneys remaining in the
Redevelopment Property Tax Trust Fund that are attributable to
a property tax rate approved by the voters of a city, county, city
and county, or special district to make payments in support of
pension programs or in support of capital projects and programs
related to the State Water Project, and levied in addition to the
property tax rate limited by subdivision (a) of Section I of Article
XIII end insert begin insert   end insert begin insert A of the California Constitution. The county auditor-controller
shall return these particular remaining moneys to the levying
taxing entity. end insert

(b) If the successor agency reports, no later than April 1, 2012,
and May 1, 2012, and each December 1 and May 1 thereafter, to
the county auditor-controller that the total amount available to the
successor agency from the Redevelopment Property Tax Trust
Fund allocation to that successor agency’s Redevelopment
Obligation Retirement Fund, from other funds transferred from
each redevelopment agency, and from funds that have or will
become available through asset sales and all redevelopment
operations, are insufficient to fund the payments required by
paragraphs (1) to (3), inclusive, of subdivision (a) in the next
six-month fiscal period, the county auditor-controller shall notify
the Controller and the Department of Finance no later than 10 days
from the date of that notification. The county auditor-controller
shall verify whether the successor agency will have sufficient funds
from which to service debts according to the Recognized
Obligation Payment Schedule and shall report the findings to the
Controller. If the Controller concurs that there are insufficient
funds to pay required debt service, the amount of the deficiency
shall be deducted first from the amount remaining to be distributed
to taxing entities pursuant to paragraph (4), and if that amount is
exhausted, from amounts available for distribution for
administrative costs in paragraph (3). If an agency, pursuant to the
provisions of Section 33492.15, 33492.72, 33607.5, 33671.5,
33681.15, or 33688 or as expressly provided in a passthrough
agreement entered into pursuant to Section 33401, made
passthrough payment obligations subordinate to debt service
payments required for enforceable obligations, funds for servicing
bond debt may be deducted from the amounts for passthrough
payments under paragraph (1), as provided in those sections, but
only to the extent that the amounts remaining to be distributed to
taxing entities pursuant to paragraph (4) and the amounts available
for distribution for administrative costs in paragraph (3) have all
been exhausted.

(c) The county treasurer may loan any funds from the county
treasury to the Redevelopment Property Tax Trust Fund of the
successor agency for the purpose of paying an item approved on
the Recognized Obligation Payment Schedule at the request of the
Department of Finance that are necessary to ensure prompt
payments of redevelopment agency debts. An enforceable
obligation is created for repayment of those loans.

(d) The Controller may recover the costs of audit and oversight
required under this part from the Redevelopment Property Tax
Trust Fund by presenting an invoice therefor to the county
auditor-controller who shall set aside sufficient funds for and
disburse the claimed amounts prior to making the next distributions
to the taxing entities pursuant to Section 34188. Subject to the
approval of the Director of Finance, the budget of the Controller
may be augmented to reflect the reimbursement, pursuant to
Section 28.00 of the Budget Act.

(e) Within 10 days of each distribution of property tax, the
county auditor-controller shall provide a report to the department
regarding the distribution for each successor agency that includes
information on the total available for allocation, the passthrough
amounts and how they were calculated, the amounts distributed
to successor agencies, and the amounts distributed to taxing entities
in a manner and form specified by the department. This reporting
requirement shall also apply to distributions required under
subdivision (b) of Section 34183.5.

begin insert

begin insert SEC. 17. end insert   

end insert

begin insert Section 34186 of the end insert begin insert Health and Safety Code end insert begin insert is
amended to read: end insert

34186.  

(a)  begin insert (1) end insert begin insert   end insert Differences between actual payments and past
estimated obligations on recognized obligation payment schedules
shall be reported in subsequent recognized obligation payment
schedules and shall adjust the amount to be transferred to the
Redevelopment Obligation Retirement Fund pursuant to this part.
These estimates and begin delete accounts end delete begin insert accounts, as well as cash balances, end insert
shall be subject to begin delete audit by county end delete begin delete auditor-controllers and end delete begin delete the end delete
begin delete Controller. end delete begin insert review by the county auditor-controller. The
county-auditor controller’s review shall be subject to the
department’s review and approval. end insert

begin insert

(2) Audits initiated by the Controller pursuant to this section
prior to July 1, 2015, shall be continued by the Controller and
completed no later than June 30, 2016. Nothing in this section
shall be construed in a manner which precludes, or in any way
restricts, the Controller from conducting audits of successor
agencies pursuant to Section 12410 of the Government Code.

end insert

(b) Differences between actual passthrough obligations and
property tax amounts and the amounts used by the county
auditor-controller in determining the amounts to be allocated under
Sections 34183 and 34188 for a prior six-month begin delete period end delete begin insert or annual
period, whichever is applicable, end insert shall be applied as adjustments
to the property tax and passthrough amounts in subsequent periods
as they become known. County auditor-controllers shall not delay
payments under this part to successor agencies or taxing entities
based on pending transactions, disputes, or for any other reason,
other than a court order, and shall use the Recognized Obligation
Payment Schedule approved by the begin delete Department of Finance end delete
begin insert department end insert and the most current data for passthroughs and property
tax available prior to the statutory distribution dates to make the
allocations required on the dates required.

begin insert

(c) Commencing on October 1, 2018, and each October 1
thereafter, the differences between actual payments and past
estimated obligations on a Recognized Obligation Payment
Schedule shall be submitted by the successor agency to the county
auditor-controller for review. The county auditor-controller shall
provide to the department in a manner of the department’s
choosing a review of the differences between actual payments and
past estimated obligations, including cash balances, no later than
February 1, 2019, and each February 1 thereafter.

end insert

begin insert

begin insert SEC. 18. end insert   

end insert

begin insert Section 34187 of the end insert begin insert Health and Safety Code end insert begin insert is
amended to read: end insert

34187.  

(a) (1) Commencing May 1, 2012, whenever a
recognized obligation that had been identified in the Recognized
Payment Obligation Schedule is paid off or retired, either through
early payment or payment at maturity, the county auditor-controller
shall distribute to the taxing entities, in accordance with the
provisions of the Revenue and Taxation Code, all property tax
revenues that were associated with the payment of the recognized
obligation.

(2) Notwithstanding paragraph (1), the begin delete Department of Finance end delete
begin insert department end insert may authorize a successor agency to retain property
tax that otherwise would be distributed to affected taxing entities
pursuant to this subdivision, to the extent the department
determines the successor agency requires those funds for the
payment of enforceable obligations. Upon making a determination,
the department shall provide the county auditor-controller with
information detailing the amounts that it has authorized the
successor agency to retain. Upon determining the successor agency
no longer requires additional funds pursuant to this subdivision,
the department shall notify the successor agency and the county
auditor-controller. The county auditor-controller shall then
distribute the funds in question to the affected taxing entities in
accordance with the provisions of the Revenue and Taxation Code.

begin insert

(b) When all of the enforceable obligations have been retired
or paid off, all real property has been disposed of pursuant to
Section 34181 or 34191.4, and all outstanding litigation has been
resolved, the successor agency shall, within 30 days of meeting
the aforementioned criteria, submit to the oversight board a
request, with a copy of the request to the county auditor-controller,
to formally dissolve the successor agency. The oversight board
shall approve the request within 30 days, and shall submit the
request to the department.

end insert begin insert

(c) If a redevelopment agency was not allocated property tax
revenue pursuant to either subdivision (b) of Section 16 of Article
XVI of the California Constitution or Section 33670 prior to
February 1, 2012, the successor agency shall, no later than
September 1, 2015, submit to the oversight board a request to
formally dissolve the successor agency. The oversight board shall
approve this request within 30 days, and shall submit the request
to the department.

end insert begin insert

(d) The department shall have 30 days to approve or deny a
request submitted pursuant to subdivisions (b) or (c).

end insert begin insert

(e) When the department has approved a request to formally
dissolve a successor agency, the successor agency shall take both
of the following steps within 100 days of the department’s
notification:

end insert begin insert

(1) Dispose of all remaining assets as directed by the oversight
board. Any proceeds from the disposition of assets shall be
transferred to the county auditor-controller for distribution to the
affected taxing entities pursuant to Section 34183.

end insert begin insert

(2) Notify the oversight board that it has complied with
paragraph (1).

end insert begin insert

(f) Upon receipt of the notification required in paragraph (2)
of subdivision (e), the oversight board shall verify all obligations
have been retired or paid off, all outstanding litigation has been
resolved, and all remaining assets have been disposed of with any
proceeds remitted to the county auditor-controller for distribution
to the affected taxing entities. Within 14 days of verification, the
oversight board shall adopt a final resolution of dissolution for
the successor agency, which shall be effective immediately. This
resolution shall be submitted to the sponsoring entity, the county
auditor-controller, the State Controller’s Office, and the
department by electronic means and in a manner of each entity’s
choosing.

end insert begin insert

(g) Subdivisions (b) to (f), inclusive, does not apply to those
entities specifically recognized as already dissolved by the
department by August 1, 2015.

end insert begin delete

(b) When all of the debt of a redevelopment agency has

end delete

begin insert (h) end insert begin insert   end insert begin insert When all enforceable obligations have end insert been retired or paid
begin delete off, the successor agency shall dispose of end delete begin delete all end delete begin delete remaining assets and
terminate its existence within one year of the final debt payment.
When the successor agency is terminated, all passthrough payment
obligations end delete begin insert off as specified in subdivision (b), all passthrough
payment obligations required pursuant to Sections 33401,
33492.140, 33607, 33607.5, 33607.7, and 33676, or any
passthrough agreement between a redevelopment agency and a
taxing entity that was entered into prior to January 1, 1994, end insert shall
begin delete cease end delete begin insert cease, end insert and no property tax shall be allocated to the
Redevelopment Property Tax Trust Fund for that agency. begin insert The
Legislature finds and declares that this subdivision is declaratory
of existing law. end insert

begin insert

(i) When a successor agency is finally dissolved under
subdivision (b), with respect to any existing community facilities
district formed by a redevelopment agency, the legislative body of
the city or county that formed the redevelopment agency shall
become the legislative body of the community facilities district,
and any existing obligations of the former redevelopment agency
or its successor agency, in its capacity as the legislative body of
the community facilities district, shall become the obligations of
the new legislative body of the community facilities district. This
subdivision shall not be construed to result in the continued
payment of any of the passthrough payment obligations identified
in subdivision (h).

end insert

begin insert

begin insert SEC. 19. end insert   

end insert

begin insert Section 34189 of the end insert begin insert Health and Safety Code end insert begin insert is
amended to read: end insert

34189.  

(a) Commencing on the effective date of this part, all
provisions of the Community Redevelopment Law that depend on
the allocation of tax increment to redevelopment agencies,
including, but not limited to, Sections 33445, 33640, 33641, begin insert and end insert
33645, and subdivision (b) of Section 33670, shall be begin delete inoperative,
except as those sections apply end delete begin insert inoperative. Solely for the purposes
of the payment of enforceable obligations defined by subparagraph
(A) end insert to begin insert (G), inclusive, of paragraph (1) of subdivision (d) of Section
34171 and subdivision (b) of Section 34191.4, and for no other
purpose whatsoever, end insert a begin delete redevelopment end delete begin insert successor end insert agency begin delete operating
pursuant end delete begin insert is not subject end insert to begin delete Part 1.9 (commencing with end delete begin insert the limitations
relating to time, number of tax dollars, or any other matters set
forth in Sections 33333.2, 33333.4, and 33333.6. Notwithstanding
any other provision in this section, this subdivision shall not result
in the restoration or continuation of funding for projects whose
contractual terms specified that project funding would cease once
the limitations specified in any of end insert Section begin delete 34192). end delete begin insert 33333.2,
33333.4, or 33333.6 were realized. end insert

(b) To the extent that a provision of Part 1 (commencing with
Section 33000), Part 1.5 (commencing with Section 34000), Part
1.6 (commencing with Section 34050), and Part 1.7 (commencing
with Section 34100) conflicts with this part, the provisions of this
part shall control. Further, if a provision of Part 1 (commencing
with Section 33000), Part 1.5 (commencing with Section 34000),
Part 1.6 (commencing with Section 34050), or Part 1.7
(commencing with Section 34100) provides an authority that the
act adding this part is restricting or eliminating, the restriction and
elimination provisions of the act adding this part shall control.

(c) It is intended that the provisions of this part shall be read in
a manner as to avoid duplication of payments.

begin insert

begin insert SEC. 20. end insert   

end insert

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

34191.3.  

begin insert (a) end insert begin insert   end insert 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. If the department has
not approved a plan by January 1, 2016, subdivision (e) of Section
34177 and subdivision (a) of Section 34181 shall be operative with
respect to that successor agency.

begin insert

(b) If the department has approved a successor agency’s
long-range property management plan prior to January 1, 2016,
the successor agency may amend its long-range property
management plan once, solely to allow for retention of real
properties that constitute “parking facilities and lots dedicated
solely to public parking” for governmental use pursuant to Section
34181. An amendment to a successor agency’s long-range property
management plan under this subdivision shall be submitted to its
oversight board for review and approval pursuant to Section
34179, and any such amendment shall be submitted to the
department prior to July 1, 2016.

end insert

begin insert

begin insert SEC. 21. end insert   

end insert

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

34191.4.  

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

(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 34191.5 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 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.

begin insert

(2) For purpose of this section, “loan agreements” shall mean
loans for money entered into between the former redevelopment
agency and the city, county, or city and county that created the
former redevelopment agency under which the city, county, or city
and county that created the former redevelopment agency
transferred money to the former redevelopment agency for use by
the former redevelopment agency for a lawful purpose, and where
the former redevelopment agency was obligated to repay the money
it received pursuant to a required repayment schedule.

end insert begin delete

(2)

end delete

begin insert (3) end insert  If the oversight board finds that the loan is an enforceable
obligation, begin delete the accumulated end delete begin insert any end insert interest on the remaining principal
amount of the loan begin insert that was previously unpaid after the original
effective date of the loan end insert shall be recalculated from begin delete origination end delete begin insert the
date of the oversight board’s finding on a quarterly basis, end insert at begin delete the end delete
begin insert a simple end insert interest rate begin delete earned by funds deposited into the Local
Agency Investment Fund. end delete begin insert of 3 percent. end insert The begin insert recalculated end insert loan shall
be repaid to the city, county, or city and county in accordance with
a defined schedule over a reasonable term of begin delete years at an interest
rate not end delete begin insert years. Moneys repaid shall be applied first end insert to begin delete exceed end delete the
begin delete interest rate earned by funds deposited into end delete begin insert principal, and second
to end insert the begin delete Local Agency Investment Fund. end delete begin insert interest. end insert The annual loan
repayments provided for in the recognized obligation 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, provided,
however, that calculation of the amount distributed to taxing
entities during the 2012-13 base year shall not include any amounts
distributed to taxing entities pursuant to the due diligence review
process established in Sections 34179.5 to 34179.8, inclusive.
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. begin insert Distributions to the Low and Moderate
Income Housing Asset Fund are subject to the reporting
requirements of subdivision (f) of Section 34176.1. end insert

(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. begin insert Transfers to the Low and
Moderate Income Housing Asset Fund are subject to the reporting
requirements of subdivision (f) of Section 34176.1. end insert

begin delete end delete begin delete

(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.

end delete begin delete end delete begin delete

(2)

end delete

begin insert (c) end insert   begin insert (1) end insert begin insert   end insert (A) Notwithstanding Section 34177.3 or any other
conflicting provision of law, bond proceeds begin insert derived from bonds
issued on or before December 31, 2010, end insert 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. begin insert The expenditure of bond
proceeds described in this subparagraph pursuant to an excess
bond proceeds obligation shall only require the approval by the
oversight board of the successor agency. end insert

(B) If remaining bond proceeds begin insert derived from bonds issued on
or before December 31, 2010, end insert cannot be spent in a manner
consistent with the bond covenants pursuant to subparagraph (A),
the proceeds shall be used begin insert at the earliest date permissible under
the applicable bond covenants end insert to defease the bonds or to purchase
those same outstanding bonds on the open market for cancellation.

begin insert

(2) Bond proceeds derived from bonds issued on or after
January 1, 2011, in excess of the amounts needed to satisfy
approved enforceable obligations, shall be used in a manner
consistent with the original bond covenants, subject to the following
provisions:

end insert begin insert

(A) No more than 15 percent of the proceeds derived from the
bonds may be expended, unless the successor agency meets the
criteria specified in subparagraph (B).

end insert begin insert

(B) If the successor agency has an approved Last and Final
Recognized Obligation Payment Schedule pursuant to Section
34191.6, the agency may expend no more than 30 percent of the
proceeds derived from the bonds, subject to the following
adjustments:

end insert begin insert

(i) If the bonds were issued during the period of January 1,
2011, to January 31, 2011, inclusive, the successor agency may
expend an additional 25 percent of the proceeds derived from the
bonds, for a total authorized expenditure of no more than 55
percent.

end insert begin insert

(ii) If the bonds were issued during the period of February 1,
2011, to February 28, 2011, inclusive, the successor agency may
expend an additional 20 percent of the proceeds derived from the
bonds, for a total authorized expenditure of no more than 50
percent.

end insert begin insert

(iii) If the bonds were issued during the period of March 1,
2011, to March 31, 2011, inclusive, the successor agency may
expend an additional 15 percent of the proceeds derived from the
bonds, for a total authorized expenditure of no more than 45
percent.

end insert begin insert

(iv) If the bonds were issued during the period of April 1, 2011,
to April 30, 2011, inclusive, the successor agency may expend an
additional 10 percent of the proceeds derived from the bonds, for
a total authorized expenditure of no more than 40 percent.

end insert begin insert

(v) If the bonds were issued during the period of May 1, 2011,
to May 31, 2011, inclusive, the successor agency may expend an
additional 5 percent of the proceeds derived from the bonds, for
a total authorized expenditure of no more than 35 percent.

end insert begin insert

(C) Remaining bond proceeds that cannot be spent pursuant to
subparagraphs (A) and (B) shall be used at the at the earliest date
permissible under the applicable bond covenants to defease the
bonds or to purchase those same outstanding bonds on the open
market for cancellation.

end insert begin insert

(D) The expenditure of bond proceeds described in this
paragraph shall only require the approval by the oversight board
of the successor agency.

end insert begin insert

(3) If a successor agency provides the oversight board and the
department with documentation that proves, to the satisfaction of
both entities, that bonds were approved by the former
redevelopment agency prior to January 31, 2011, but the issuance
of the bonds was delayed by the actions of a third-party
metropolitan regional transportation authority beyond January
31, 2011, the successor agency may expend the associated bond
proceeds in accordance with clause (i) of subparagraph (B) of
paragraph (2) of this section.

end insert begin insert

(4) Any proceeds derived from bonds issued by a former
redevelopment agency after December 31, 2010, that were issued,
in part, to refund or refinance tax-exempt bonds issued by the
former redevelopment agency on or before December 31, 2010,
and which are in excess of the amount needed to refund or
refinance the bonds issued on or before December 31, 2010, may
be expended by the successor agency in accordance with clause
(i) of subparagraph (B) of paragraph (2) of this section. The
authority provided in this paragraph is conditioned on the
successor agency providing to its oversight board and the
department the resolution by the former redevelopment agency
approving the issuance of the bonds issued after December 31,
2010.

end insert begin insert

(d) This section shall apply retroactively to actions occurring
on or after June 28, 2011. The amendment of this section by the
act adding this subdivision shall not result in the denial of a loan
under subdivision (b) that has been previously approved by the
department prior to the effective date of the act adding this
subdivision. Additionally, the amendment of this section by the act
adding this subdivision shall not impact the judgments, writs of
mandate, and orders entered by the Sacramento Superior Court
in the following lawsuits: (1) City of Watsonville v. California
Department of Finance, et al. (Sac. Superior Ct. Case No.
34-2014-80001910); (2) City of Glendale v. California Department
of Finance, et al. (Sac. Superior Ct. Case No. 34-2014-80001924).

end insert

begin insert

begin insert SEC. 22. end insert   

end insert

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

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. begin insert If the former
redevelopment agency did not have real properties, the successor
agency shall prepare a long-range property management plan
certifying that the successor agency does not have real properties
of the former redevelopment agency for disposition or use. end insert The
begin delete report end delete begin insert plan end insert 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) (i) 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.

(ii) For purposes of this subparagraph, the term “identified in
an approved redevelopment plan” includes properties listed in a
community plan or a five-year implementation plan.

begin insert

(iii) The department or an oversight board may require approval
of a compensation agreement or agreements, as described in
subdivision (f) of Section 34180, prior to any transfer of property
pursuant to this subparagraph, provided, however, that a
compensation agreement or agreements may be developed and
executed subsequent to the approval process of a long-range
property management plan.

end insert

(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 begin delete from the sale end delete 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 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

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

end insert begin insert

(f) Actions to implement the disposition of property pursuant
to an approved long-range property management plan shall not
require review by the department.

end insert

begin insert

begin insert SEC. 23. end insert   

end insert

begin insert Section 34191.6 is added to the end insert begin insert Health and Safety
Code end insert begin insert , to read: end insert

begin insert

begin insert 34191.6. end insert   

(a) Beginning August 1, 2015, successor agencies
may submit a Last and Final Recognized Obligation Payment
Schedule for approval by the oversight board and the department
if all of the following conditions are met:

(1) The remaining debt of a successor agency is limited to
administrative costs and payments pursuant to enforceable
obligations with defined payment schedules including, but not
limited to, debt service, loan agreements, and contracts.

(2) All remaining obligations have been previously listed on a
Recognized Obligation Payment Schedule and approved for
payment by the department pursuant to subdivision (m) or (o) of
Section 34177.

(3) The successor agency is not a party to outstanding or
unresolved litigation. Notwithstanding this provision, successor
agencies that are party to Los Angeles Unified School Dist. v.
County of Los Angeles (2010) 181 Cal.App.4th 414 or Los Angeles
Unified School District v. County of Los Angeles (2013) 217
Cal.App.4th 597, may submit a Last and Final Recognized
Obligation Payment Schedule.

(b) A successor agency that meets the conditions in subdivision
(a) may submit a Last and Final Recognized Obligation Payment
Schedule to its oversight board for approval at any time. The
successor agency may then submit the oversight board-approved
Last and Final Recognized Obligation Payment Schedule to the
department and only in a manner provided by the department. The
Last and Final Recognized Obligation Payment Schedule shall
not be effective until reviewed and approved by the department as
provided for in subdivision (c). The successor agency shall also
submit a copy of the oversight board-approved Last and Final
Recognized Obligation Payment Schedule to the county
administrative officer, the county auditor-controller, and post it
to the successor agency’s Internet Web site at the same time that
the successor agency submits the Last and Final Recognized
Obligation Payment Schedule to the department.

(1) The Last and Final Recognized Obligation Payment Schedule
shall list the remaining enforceable obligations of the successor
agency in the following order:

(A) Enforceable obligations to be funded from the
Redevelopment Property Tax Trust Fund.

(B) Enforceable obligations to be funded from bond proceeds
or enforceable obligations required to be funded from other legally
or contractually dedicated or restricted funding sources.

(C) Loans or deferrals authorized for repayment pursuant to
subparagraph (G) of paragraph (1) of subdivision (d) of Section
34171 or Section 34191.4.

(2) The Last and Final Recognized Obligation Payment Schedule
shall include the total outstanding obligation and a schedule of
remaining payments for each enforceable obligation listed pursuant
to subparagraphs (A) and (B) of paragraph (1), and the total
outstanding obligation and interest rate of 4 percent, for loans or
deferrals listed pursuant to subparagraph (C) of paragraph (1).

(c) The department shall have 100 days to review the Last and
Final Recognized Obligation Payment Schedule submitted pursuant
to subdivision (b). The department may make any amendments or
changes to the Last and Final Recognized Obligation Payment
Schedule, provided the amendments or changes are agreed to by
the successor agency in writing. If the successor agency and the
department cannot come to an agreement on the proposed
amendments or changes, the department shall issue a letter denying
the Last and Final Recognized Obligation Payment Schedule. All
Last and Final Recognized Obligation Payment Schedules
approved by the Department shall become effective on the first
day of the subsequent Redevelopment Property Tax Trust Fund
distribution period. If the Last and Final Recognized Obligation
Payment Schedule is approved less than 15 days before the date
of the property tax distribution, the Last and Final Recognized
Obligation Payment Schedule shall not be effective until the
subsequent Redevelopment Property Tax Trust Fund distribution
period.

(1) Upon approval by the department, the Last and Final
Recognized Obligation Payment Schedule shall establish the
maximum amount of Redevelopment Property Tax Trust Funds to
be distributed to the successor agency for each remaining fiscal
year until all obligations have been fully paid.

(2) (A) Successor agencies may submit no more than two
requests to the department to amend the approved Last and Final
Recognized Obligation Payment Schedule. Requests shall first be
approved by the oversight board and then submitted to the
department for review. A request shall not be effective until
reviewed and approved by the department. The request shall be
provided to the department by electronic means and in a manner
of the department’s choosing. The department shall have 100 days
from the date received to approve or deny the successor agency’s
request. All amended Last and Final Recognized Obligation
Payment Schedules approved by the department shall become
effective in the subsequent Redevelopment Property Tax Trust
Fund distribution period. If an amended Last and Final Recognized
Obligation Payment Schedule is approved less than 15 days before
the date of the property tax distribution, the Last and Final
Recognized Obligation Payment Schedule shall not be effective
until the subsequent Redevelopment Property Tax Trust Fund
distribution period.

(B) Notwithstanding paragraph (2), there shall be no limitation
on the number of Last and Final Recognized Obligation Payment
Schedule amendment requests that may be submitted to the
department by successor agencies that are party to either of the
cases specified in paragraph (3) of subdivision (a), provided those
additional amendments are submitted for the sole purpose of
complying with final judicial determinations in those cases.

(3) Any revenues, interest, and earnings of the successor agency
not authorized for use pursuant to the approved Last and Final
Recognized Obligation Payment Schedule shall be remitted to the
county auditor-controller for distribution to the affected taxing
entities. Notwithstanding Sections 34191.3 and 34191.5, proceeds
from the disposition of real property subsequent to the approval
of the Last and Final Recognized Obligation Payment Schedule
that are not necessary for the payment of an enforceable obligation
shall be remitted to the county auditor-controller for distribution
to the affected taxing entities.

(4) A successor agency shall not expend more than the amount
approved for each enforceable obligation listed and approved on
the Last and Final Recognized Obligation Payment Schedule.

(5) If a successor agency receives insufficient funds to pay for
the enforceable obligations approved in the Last and Final
Recognized Obligation Payment Schedule in any given period, the
city, county, or city and county that created the redevelopment
agency may loan or grant funds to a successor agency for that
period at the successor agency’s request for the sole purpose of
paying for approved items on the Last and Final Recognized
Obligation Payment Schedule that would otherwise go unpaid.
Any loans provided pursuant to this paragraph by the city, county,
or city and county that created the redevelopment agency shall
not include an interest component. Additionally, at the request of
the department, the county treasurer may loan any funds from the
county treasury to the Redevelopment Property Tax Trust Fund
of the successor agency for the purpose of paying an item approved
on the Last and Final Recognized Obligation Payment Schedule
in order to ensure prompt payments of successor agency debts.
Any loans provided pursuant to this paragraph by the county
treasurer shall not include an interest component. A loan made
under this section shall be repaid from the source of funds
approved for payment of the underlying enforceable obligation in
the Last and Final Recognized Obligation Payment Schedule once
sufficient funds become available from that source. Payment of
the loan shall not increase the total amount of Redevelopment
Property Tax Trust Fund received by the successor agency as
approved on the Last and Final Recognized Obligation Payment
Schedule.

(6) Notwithstanding paragraph (6) of subdivision (e) of Section
34176 and subparagraph (A) of paragraph (3) of subdivision (b)
of Section 34191.4, commencing on the date the Last and Final
Recognized Obligation Payment Schedule becomes effective:

(A) The maximum repayment amount of the total principal and
interest on loans and deferrals authorized for repayment pursuant
to subparagraph (G) of paragraph (1) of subdivision (d) of Section
34171 or Section 34191.4 and listed and approved in the Last and
Final Recognized Obligation Payment Schedule shall be 15 percent
of the moneys remaining in the Redevelopment Property Tax Trust
Fund after the allocation of moneys in each six-month period
pursuant to Section 34183 prior to the distributions under
paragraph (4) of subdivision (a) of Section 34183.

(B) If the calculation performed pursuant to subparagraph (A)
results in a lower repayment amount than would result from
application of the calculation specified in subparagraph (A) of
paragraph (3) of subdivision (b) of Section 34191.4, the successor
agency may calculate its Last and Final Recognized Obligation
Payment Schedule loan repayments using the latter calculation.

(7) Commencing on the effective date of the approved Last and
Final Recognized Obligation Payment Schedule, the successor
agency shall not prepare or transmit Recognized Obligation
Payment Schedules pursuant to Section 34177.

(8) Commencing on the effective date of the approved Last and
Final Recognized Obligation Payment Schedule, oversight board
resolutions shall not be submitted to the department pursuant to
subdivision (h) of Section 34179. This paragraph shall not apply
to oversight board resolutions necessary for refunding bonds
pursuant to Section 34177.5, long-range property management
plans pursuant to Section 34191.5, amendments to the Last and
Final Recognized Obligation Payment Schedule under paragraph
(2) of subdivision (c), and the final oversight board resolutions
pursuant to Section 34187.

(d) The county auditor-controller shall do the following:

(1) Review the Last and Final Recognized Obligation Payment
Schedule and provide any objection to the inclusion of any items
or amounts to the department.

(2) After the Last and Final Recognized Obligation Payment
Schedule is approved by the department, the county
auditor-controller shall continue to allocate moneys in the
Redevelopment Property Tax Trust Fund pursuant to Section
34183; however, the allocation from the Redevelopment Property
Tax Trust Funds in each fiscal period, after deducting
auditor-controller administrative costs, shall be according to the
following order of priority:

(A) Allocations pursuant to paragraph (1) of subdivision (a) of
Section 34183.

(B) Debt service payments scheduled to be made for tax
allocation bonds that are listed and approved in the Last and Final
Recognized Obligation Payment Schedule.

(C) Payments scheduled to be made on revenue bonds that are
listed and approved in the Last and Final Recognized Obligation
Payment Schedule, but only to the extent the revenues pledged for
them are insufficient to make the payments and only if the agency’s
tax increment revenues were also pledged for the repayment of
bonds.

(D) Payments scheduled for debts and obligations listed and
approved in the Last and Final Recognized Obligation Payment
Schedule to be paid from the Redevelopment Property Tax Trust
Fund pursuant to subparagraph (A) of paragraph (1) of subdivision
(b) and subdivision (c).

(E) Payments listed and approved pursuant to subparagraph
(A) of paragraph (1) of subdivision (b) and subdivision (c) that
were authorized but unfunded in prior periods.

(F) Repayment in the amount specified in paragraph (6) of
subdivision (c) of loans and deferrals listed and approved on the
Last and Final Recognized Obligation Payment Schedule pursuant
to subparagraph (C) of paragraph (1) of subdivision (b) and
subdivision (c).

(G) Any moneys remaining in the Redevelopment Property Tax
Trust Fund after the payments and transfers authorized by
subparagraphs (A) to (F), inclusive, shall be distributed to taxing
entities in accordance with paragraph (4) of subdivision (a) of
Section 34183.

(3) If the successor agency reports to the county
auditor-controller that the total available amounts in the
Redevelopment Property Tax Trust Fund will be insufficient to
fund their current or future fiscal year obligations, and if the county
auditor-controller concurs that there are insufficient funds to pay
the required obligations, the county auditor-controller may
distribute funds pursuant to subdivision (b) of Section 34183.

(4) The county auditor-controller shall no longer distribute
property tax to the Redevelopment Property Tax Trust Fund once
the aggregate amount of property tax allocated to the successor
agency equals the total outstanding obligation approved in the
Last and Final Recognized Obligation Payment Schedule.

(e) Successor agencies with a Last and Final Recognized
Payment Schedule approved by the department may amend or
modify existing contracts, agreements, or other arrangements
identified on the Last and Final Recognized Obligation Payment
Schedule which the department has already determined to be
enforceable obligations, provided:

(1) The outstanding payments owing from the successor agency
are not accelerated or increased in any way.

(2) Any amendment to extend terms shall not include an
extension beyond the last scheduled payment for the enforceable
obligations listed and approved on the Last and Final Recognized
Obligation Payment Schedule.

(3) This subdivision shall not be construed as authorizing
successor agencies to create new or additional enforceable
obligations or otherwise increase, directly or indirectly, the amount
of Redevelopment Property Tax Trust Funds allocated to the
successor agency by the county auditor-controller.

end insert

begin insert

begin insert SEC. 24. end insert   

end insert

begin insert Section 96.11 of the end insert begin insert Revenue and Taxation Code end insert begin insert is
amended to read: end insert

96.11.  

Notwithstanding any other provision of this article, for
purposes of property tax revenue allocations, the county auditor
of a county for which a negative sum was calculated pursuant to
subdivision (a) of former Section 97.75 as that section read on
September 19, 1983, shall, in reducing the amount of property tax
revenue that otherwise would be allocated to the county by an
amount attributable to that negative sum, do all of the following:

(a) For the 2011-12 fiscal year, apply a reduction amount that
is equal to the lesser of either of the following:

(1) The reduction amount that was determined for the 2010-11
fiscal year.

(2) The reduction amount that is determined for the 2011-12
fiscal year.

(b) For the 2012-13 fiscal year, apply a reduction amount that
is equal to the lesser of either of the following:

(1) The reduction amount that was determined in subdivision
(a) for the 2011-12 fiscal year.

(2) The reduction amount that is determined for the 2012-13
fiscal year.

(c) For the 2013-14 fiscal year and begin delete each end delete begin insert for the 2014-15 end insert fiscal
begin delete year thereafter, end delete begin insert year, end insert apply a reduction amount that is determined
on the basis of the reduction amount applied for the immediately
preceding fiscal year.

begin insert

(d) For the 2015-16 fiscal year and each fiscal year thereafter,
the county auditor shall not apply a reduction amount.

end insert

begin insert

begin insert SEC. 25. end insert   

end insert

begin insert Section 96.24 is added to the end insert begin insert Revenue and Taxation
Code end insert begin insert , to read: end insert

begin insert

begin insert 96.24. end insert   

Notwithstanding any other law, the property tax
apportionment factors applied in allocating property tax revenues
in the County of San Benito for each fiscal year through the
2000-01 fiscal year, inclusive, are deemed to be correct.
Notwithstanding the audit time limits specified in paragraph (3)
of subdivision (c) of Section 96.1, the county auditor shall make
the allocation adjustments identified in the State Controller’s audit
of the County of San Benito for the 2001-02 fiscal year pursuant
to the other provisions of paragraph (3) of subdivision (c) of
Section 96.1. For the 2002-03 fiscal year and each fiscal year
thereafter, property tax apportionment factors applied in allocating
property tax revenues in the County of San Benito shall be
determined on the basis of property tax apportionment factors for
prior fiscal years that have been fully corrected and adjusted,
pursuant to the review and recommendation of the Controller, as
would be required in the absence of the preceding sentences.

end insert

begin insert

begin insert SEC. 26. end insert   

end insert

begin insert Section 98 of the end insert begin insert Revenue and Taxation Code end insert begin insert is
amended to read: end insert

98.  

(a) In each county, other than the County of Ventura,
having within its boundaries a qualifying city, the computations
made pursuant to Section 96.1 or its predecessor section, for the
1989-90 fiscal year and each fiscal year thereafter, shall be
modified as follows:

With respect to tax rate areas within the boundaries of a
qualifying city, there shall be excluded from the aggregate amount
of “property tax revenue allocated pursuant to this chapter to local
agencies, other than for a qualifying city, in the prior fiscal year,”
an amount equal to the sum of the amounts calculated pursuant to
the TEA formula.

(b) (1) Except as otherwise provided in this section, each
qualifying city shall, for the 1989-90 fiscal year and each fiscal
year thereafter, be allocated by the auditor an amount determined
pursuant to the TEA formula.

(2) For each qualifying city, the auditor shall, for the 1989-90
fiscal year and each fiscal year thereafter, allocate the amount
determined pursuant to the TEA formula to all tax rate areas within
that city in proportion to each tax rate area’s share of the total
assessed value in the city for the applicable fiscal year, and the
amount so determined shall be subtracted from the county’s
proportionate share of property tax revenue for that fiscal year
within those tax rate areas.

(3) After making the allocations pursuant to paragraphs (1) and
(2), but before making the calculations pursuant to Section 96.5
or its predecessor section, the auditor shall, for all tax rate areas
in the qualifying city, calculate the proportionate share of property
tax revenue allocated pursuant to this section and Section 96.1, or
their predecessor sections, in the 1989-90 fiscal year and each
fiscal year thereafter to each jurisdiction in the tax rate area.

(4) In lieu of making the allocations of annual tax increment
pursuant to subdivision (e) of Section 96.5 or its predecessor
section, the auditor shall, for the 1989-90 fiscal year and each
fiscal year thereafter, allocate the amount of property tax revenue
determined pursuant to subdivision (d) of Section 96.5 or its
predecessor section to jurisdictions in the tax rate area using the
proportionate shares derived pursuant to paragraph (3).

(5) For purposes of the calculations made pursuant to Section
96.1 or its predecessor section, in the 1990-91 fiscal year and each
fiscal year thereafter, the amounts that would have been allocated
to qualifying cities pursuant to this subdivision shall be deemed
to be the “amount of property tax revenue allocated in the prior
fiscal year.”

(c) “TEA formula” means the Tax Equity Allocation formula,
and shall be calculated by the auditor for each qualifying city as
follows:

(1) For the 1988-89 fiscal year and each fiscal year thereafter,
the auditor shall determine the total amount of property tax revenue
to be allocated to all jurisdictions in all tax rate areas within the
qualifying city, before the allocation and payment of funds in that
fiscal year to a community redevelopment agency within the
qualifying city, as provided in subdivision (b) of Section 33670
of the Health and Safety Code.

(2) The auditor shall determine the total amount of funds
allocated in each fiscal year to a community redevelopment agency
in accordance with subdivision (b) of Section 33670 of the Health
and Safety Code.

(3) The auditor shall determine the total amount of funds paid
in each fiscal year by a community redevelopment agency within
the city to jurisdictions other than the city pursuant to subdivision
(b) of Section 33401 and Section 33676 of the Health and Safety
Code, and the cost to the redevelopment agency of any land or
facilities transferred and any amounts paid to jurisdictions other
than the city to assist in the construction or reconstruction of
facilities pursuant to an agreement entered into under Section
33401 or 33445.5 of the Health and Safety Code.

(4) The auditor shall subtract the amount determined in
paragraph (3) from the amount determined in paragraph (2).

(5) The auditor shall subtract the amount determined in
paragraph (4) from the amount determined in paragraph (1).

(6) The amount computed in paragraph (5) shall be multiplied
by the following percentages in order to determine the TEA
formula amount to be distributed to the qualifying city in each
fiscal year:

(A) For the first fiscal year in which the qualifying city receives
a distribution pursuant to this section, 1 percent of the amount
determined in paragraph (5).

(B) For the second fiscal year in which the qualifying city
receives a distribution pursuant to this section, 2 percent of the
amount determined in paragraph (5).

(C) For the third fiscal year in which the qualifying city receives
a distribution pursuant to this section, 3 percent of the amount
determined in paragraph (5).

(D) For the fourth fiscal year in which the qualifying city
receives a distribution pursuant to this section, 4 percent of the
amount determined in paragraph (5).

(E) For the fifth fiscal year in which the qualifying city receives
a distribution pursuant to this section, 5 percent of the amount
determined in paragraph (5).

(F) For the sixth fiscal year in which the qualifying city receives
a distribution pursuant to this section, 6 percent of the amount
determined in paragraph (5).

(G) For the seventh fiscal year and each fiscal year thereafter
in which the city receives a distribution pursuant to this section,
7 percent of the amount determined in paragraph (5).

(d) “Qualifying city” means any city, except a qualifying city
as defined in Section 98.1, that incorporated prior to June 5, 1987,
and had an amount of property tax revenue allocated to it pursuant
to subdivision (a) of Section 96.1 or its predecessor section in the
1988-89 fiscal year that is less than 7 percent of the amount of
property tax revenue computed as follows:

(1) The auditor shall determine the total amount of property tax
revenue allocated to the city in the 1988-89 fiscal year.

(2) The auditor shall subtract the amount in the 1988-89 fiscal
year determined in paragraph (3) of subdivision (c) from the
amount determined in paragraph (2) of subdivision (c).

(3) The auditor shall subtract the amount determined in
paragraph (2) from the amount of property tax revenue determined
in paragraph (1) of subdivision (c).

(4) The auditor shall divide the amount of property tax revenue
determined in paragraph (1) of this subdivision by the amount of
property tax revenue determined in paragraph (3) of this
subdivision.

(5) If the quotient determined in paragraph (4) of this subdivision
is less than 0.07, the city is a qualifying city. If the quotient
determined in that paragraph is equal to or greater than 0.07, the
city is not a qualifying city.

(e) The auditor may assess each qualifying city its proportional
share of the actual costs of making the calculations required by
this section, and may deduct that assessment from the amount
allocated pursuant to subdivision (b). For purposes of this
subdivision, a qualifying city’s proportional share of the auditor’s
actual costs shall not exceed the proportion it receives of the total
amounts excluded in the county pursuant to subdivision (a).

(f) Notwithstanding subdivision (b), in any fiscal year in which
a qualifying city is to receive a distribution pursuant to this section,
the auditor shall reduce the actual amount distributed to the
qualifying city by the sum of the following:

(1) The amount of property tax revenue that was exchanged
between the county and the qualifying city as a result of negotiation
pursuant to Section 99.03.

(2) (A) The amount of revenue not collected by the qualifying
city in the first fiscal year following the city’s reduction after
January 1, 1988, of the tax rate or tax base of any locally imposed
tax, except any tax that was imposed after January 1, 1988. In the
case of a tax that existed before January 1, 1988, this clause shall
apply only with respect to an amount attributable to a reduction
of the rate or base to a level lower than the rate or base applicable
on January 1, 1988. The amount so computed by the auditor shall
constitute a reduction in the amount of property tax revenue
distributed to the qualifying city pursuant to this section in each
succeeding fiscal year. That amount shall be aggregated with any
additional amount computed pursuant to this clause as the result
of the city’s reduction in any subsequent year of the tax rate or tax
base of the same or any other locally imposed general or special
tax.

(B) No reduction may be made pursuant to subparagraph (A)
in the case in which a local tax is reduced or eliminated as a result
of either a court decision or the approval or rejection of a ballot
measure by the voters.

(3) The amount of property tax revenue received pursuant to
this chapter in excess of the amount allocated for the 1986-87
fiscal year by all special districts that are governed by the city
council of the qualifying city or whose governing body is the same
as the city council of the qualifying city with respect to all tax rate
areas within the boundaries of the qualifying city.

Notwithstanding this paragraph:

(A) Commencing with the 1994-95 fiscal year, the auditor shall
not reduce the amount distributed to a qualifying city under this
section by reason of that city becoming the successor agency to a
special district, that is dissolved, merged with that city, or becomes
a subsidiary district of that city, on or after July 1, 1994.

(B) Commencing with the 1997-98 fiscal year, the auditor shall
not reduce the amount distributed to a qualifying city under this
section by reason of that city withdrawing from a county free
library system pursuant to Section 19116 of the Education Code.

(4) Any amount of property tax revenues that has been
exchanged pursuant to Section 56842 of the Government begin delete Code end delete
begin insert Code, as that section read on January 1, 1998, end insert between the City
of Rancho Mirage and a community services district, the formation
of which was initiated on or after March 6, 1997, pursuant to
Chapter 4 (commencing with Section 56800) of Part 3 of Division
3 of Title 5 of the Government Code.

(g) Notwithstanding any other provision of this section, in no
event may the auditor reduce the amount of ad valorem property
tax revenue otherwise allocated to a qualifying city pursuant to
this section on the basis of any additional ad valorem property tax
revenues received by that city pursuant to a services for revenue
agreement. For purposes of this subdivision, a “services for revenue
agreement” means any agreement between a qualifying city and
the county in which it is located, entered into by joint resolution
of that city and that county, under which additional service
responsibilities are exchanged in consideration for additional
property tax revenues.

(h) In any fiscal year in which a qualifying city is to receive a
distribution pursuant to this section, the auditor shall increase the
actual amount distributed to the qualifying city by the amount of
property tax revenue allocated to the qualifying city pursuant to
Section 19116 of the Education Code.

(i) If the auditor determines that the amount to be distributed to
a qualifying city pursuant to subdivision (b), as modified by
subdivisions (e), (f), and (g) would result in a qualifying city having
proceeds of taxes in excess of its appropriation limit, the auditor
shall reduce the amount, on a dollar-for-dollar basis, by the amount
that exceeds the city’s appropriations limit.

(j) The amount not distributed to the tax rate areas of a
qualifying city as a result of this section shall be distributed by the
auditor to the county.

(k) Notwithstanding any other provision of this section, no
qualifying city shall be distributed an amount pursuant to this
section that is less than the amount the city would have been
allocated without the application of the TEA formula.

(l) Notwithstanding any other provision of this section, the
auditor shall not distribute any amount determined pursuant to this
section to any qualifying city that has in the prior fiscal year used
any revenues or issued bonds for the construction, acquisition, or
development, of any facility which is defined in Section 103(b)(4),
103(b)(5), or 103(b)(6) of the Internal Revenue Code of 1954 prior
to the enactment of the Tax Reform Act of 1986 begin delete (P.L. end delete begin insert (Public Law end insert
99-514) and is no longer eligible for tax-exempt financing.

(m) (1) The amendments made to this section, and the repeal
of Section 98.04, by the act that added this subdivision shall apply
for the 2006-07 fiscal year and each fiscal year thereafter.

(2) For the 2006-07 fiscal year and for each fiscal year
thereafter, all of the following apply:

(A) The auditor of the County of Santa Clara shall do both of
the following:

(i) Reduce the total amount of ad valorem property tax revenue
otherwise required to be allocated to qualifying cities in that county
by the ERAF reimbursement amount. This reduction for each
qualifying city in the county for each fiscal year shall be the
percentage share, of the total reduction required by this clause for
all qualifying cities in the county for the 2006-07 fiscal year, that
is equal to the proportion that the total amount of additional ad
valorem property tax revenue that is required to be allocated to
the qualifying city as a result of the act that added this subdivision
bears to the total amount of additional ad valorem property tax
revenue that is required to be allocated to all qualifying cities in
the county as a result of the act that added this subdivision.

(ii) Increase the total amount of ad valorem property tax revenue
otherwise required to be allocated to the county Educational
Revenue Augmentation Fund by the ERAF reimbursement amount.

(B) For purposes of this subdivision, “ERAF reimbursement
amount” means an amount equal to the difference between the
following two amounts:

(i) The portion of the annual tax increment that would have been
allocated from the county to the county Educational Revenue
Augmentation Fund for the applicable fiscal year if the act that
added this subdivision had not been enacted.

(ii) The portion of the annual tax increment that is allocated
from the county to the county Educational Revenue Augmentation
Fund for the applicable fiscal year.

begin insert

(n) Notwithstanding subdivision (m) and except as provided in
paragraph (2), for the 2015-16 fiscal year and for each fiscal year
thereafter, all of the following shall apply:

end insert begin insert

(1) The auditor of the County of Santa Clara shall do both of
the following:

end insert begin insert

(A) (i) Reduce the total amount of ad valorem property tax
revenue otherwise required to be allocated to qualifying cities in
that county by the percentage specified in clause (ii) of the ERAF
reimbursement amount. This reduction for each qualifying city in
the county for each fiscal year shall be the percentage share, of
the total reduction required by this clause for all qualifying cities
in the county for the 2015-16 fiscal year, that is equal to the
proportion that the total amount of additional ad valorem property
tax revenue that is required to be allocated to the qualifying city
as a result of the act that added this subdivision bears to the total
amount of additional ad valorem property tax revenue that is
required to be allocated to all qualifying cities in the county as a
result of the act that added this subdivision.

end insert begin insert

(ii) (I) For the first fiscal year in which qualifying cities receive
an allocation pursuant to this subdivision, 80 percent.

end insert begin insert

(II) For the second fiscal year in which qualifying cities receive
an allocation pursuant to this subdivision, 60 percent.

end insert begin insert

(III) For the third fiscal year in which qualifying cities receive
an allocation pursuant to this subdivision, 40 percent.

end insert begin insert

(IV) For the fourth fiscal year in which qualifying cities receive
an allocation pursuant to this subdivision, 20 percent.

end insert begin insert

(V) For the fifth fiscal year in which qualifying cities receive
an allocation pursuant to this subdivision, and for each fiscal year
thereafter in which a qualifying city receives an allocation pursuant
to this subdivision, zero percent.

end insert begin insert

(B) Increase the total amount of ad valorem property tax revenue
otherwise required to be allocated to the county Educational
Revenue Augmentation Fund by the percentage specified in clause
(ii) of subparagraph (A) of the ERAF reimbursement amount.

end insert begin insert

(2) The auditor of the County of Santa Clara shall not adjust
the ERAF reimbursement amount by the percentages specified in
clause (ii) of subparagraph (A) of paragraph (1) in any fiscal year
in which the amount of moneys required to be applied by the state
for the support of school districts and community college districts
is determined pursuant to paragraph (1) of subdivision (b) of
Section 8 of Article XVI of the California Constitution.

end insert begin insert

(3) For purposes of this subdivision, “ERAF reimbursement
amount” has the same meaning as defined in subparagraph (B)
of paragraph (2) of subdivision (m).

end insert

begin insert

begin insert SEC. 27. end insert   

end insert begin insert

The Legislature hereby finds and declares all of the
following:

end insert begin insert

(a) The Department of Finance has provided written
confirmation to the successor agency to the Redevelopment Agency
of the City and County of San Francisco (successor agency) that
the following projects are finally and conclusively approved as
enforceable obligations:

end insert begin insert

(1) The Mission Bay North Owner Participation Agreement.

end insert begin insert

(2) The Mission Bay South Owner Participation Agreement.

end insert begin insert

(3) The Disposition and Development Agreement for Hunters
Point Shipyard Phase 1.

end insert begin insert

(4) The Candlestick Point-Hunters Point Shipyard Phase 2
Disposition and Development Agreement.

end insert begin insert

(5) The Transbay Implementation Agreement.

end insert begin insert

(b) The enforceable obligations described in subdivision (a)
require the successor agency to fund and develop affordable
housing, including 1,200 units in Transbay, 1,445 units in Mission
Bay North and Mission Bay South, and 1,358 units in Candlestick
Point-Hunters Point Shipyard Phases 1 and 2. In addition, the
successor agency is required to fund and develop public
infrastructure in the Transbay Redevelopment Project Area
pursuant to the Transbay Implementation Agreement, which is
necessary to improve the area surrounding the Transbay Transit
Center.

end insert begin insert

(c) Due to insufficient property tax revenues in the
Redevelopment Property Tax Trust Fund, of the total number of
affordable housing units that the successor agency is obligated to
fund and develop under the enforceable obligations described in
subdivision (a), the successor agency has been able to finance the
construction of only 642 units. Additionally, the successor agency
has not been able to fulfill its public infrastructure obligation
under the Transbay Implementation Agreement.

end insert begin insert

(d) The successor agency can more expeditiously construct the
3,361 additional units of required affordable housing and the
necessary infrastructure improvements if it is able to issue bonds
or incur other indebtedness secured by property tax revenues
available in the Redevelopment Property Tax Trust Fund to finance
these obligations.

end insert begin insert

(e) It is the intent of the Legislature to authorize the successor
agency to issue bonds or incur other indebtedness for the purpose
of financing the construction of affordable housing and
infrastructure required under the enforceable obligations described
in subdivision (a). These bonds or other indebtedness may be
secured by property tax revenues available in the successor
agency’s Redevelopment Property Tax Trust Fund from those
project areas that generated tax increment for the Redevelopment
Agency of the City and County of San Francisco upon its
dissolution, if the revenues are not otherwise obligated.

end insert begin insert

(f) Authorizing the successor agency to issue bonds or incur
other indebtedness to finance the enforceable obligations described
in subdivision (a) will financially benefit the affected taxing entities,
insofar as it will ensure that funds which would otherwise flow to
those entities as “residual” payments pursuant to paragraph (4)
of subdivision (a) of Section 34183 of the Health and Safety Code
will not be redirected to fund these enforceable obligations.
Instead, the enforceable obligations will be funded with the
proceeds of the bonds or debt issuances.

end insert begin insert

(g) The housing situation in the City and County of San
Francisco is unique, in that median rents and sales prices are
among the highest in the state. Because of this, the City and County
of San Francisco is currently facing an affordable housing crisis.

end insert

begin insert

begin insert SEC. 28. end insert   

end insert begin insert

(a) For the 2015-16 fiscal year, the sum of
twenty-three million seven hundred fifty thousand dollars
($23,750,000) is hereby appropriated from the General Fund to
the Department of Forestry and Fire Protection. Provision of these
funds to the department shall be contingent on the County of
Riverside agreeing to forgive amounts owed to it by the Cities of
Eastvale, Jurupa Valley, Menifee, and Wildomar for services
rendered to the cities between the respective dates of their
incorporation, and June 30, 2015. The county’s agreement to
forgive these funds shall be forwarded to the Chairperson of the
Joint Legislative Budget Committee and to the Director of Finance
no later than August 1, 2015. The county’s agreement shall be
accompanied by a summary of the actual amount owed to the
county by each of the cities for the period between the date of their
incorporation and June 30, 2015. The agreement reflects a valid
public purpose which benefits the cities, the county, and its citizens.

end insert begin insert

(b) Within 30 days of receiving notification from the county as
specified in subdivision (a), the Director of Finance shall do all
of the following:

end insert begin insert

(1) Verify the accuracy of the county’s summary of the amounts
owed to it by the three cities.

end insert begin insert

(2) Direct the Controller to transmit to the department, from
the appropriation provided in subdivision (a), an amount that
corresponds to the amount that the Director of Finance has verified
pursuant to paragraph (1).

end insert begin insert

(3) Initiate steps to reduce the amount of reimbursements
provided to the department in the Budget Act of 2015 by an amount
that corresponds to the amount provided to the department
pursuant to paragraph (2).

end insert

begin insert

begin insert SEC. 29. end insert   

end insert begin insert

(a) The Legislature finds and declares that the special
law contained in Section 9 of this measure is necessary and that
a general law cannot be made applicable within the meaning of
Section 16 of Article IV of the California Constitution because of
the unique circumstances relating to affordable housing in the
City and County of San Francisco in conjunction with the
affordable housing and infrastructure requirements of the
enforceable obligations specified in this act.

end insert begin insert

(b) The Legislature finds and declares that the special law
contained in Section 25 of this measure is necessary and that a
general law cannot be made applicable within the meaning of
Section 16 of Article IV of the California Constitution because of
the uniquely severe fiscal difficulties being suffered by the County
of San Benito.

end insert begin insert

(c) The Legislature finds and declares that the special law
contained in Section 26 of this measure is necessary and that a
general law cannot be made applicable within the meaning of
Section 16 of Article IV of the California Constitution because of
the unique fiscal pressures being experienced by qualifying cities,
as defined in Section 98 of the Revenue and Taxation Code, in the
County of Santa Clara.

end insert

begin insert

begin insert SEC. 30. end insert   

end insert begin insert

If the Commission on State Mandates determines that
this act contains costs mandated by the state, reimbursement to
local agencies and school districts for those costs shall be made
pursuant to Part 7 (commencing with Section 17500) of Division
4 of Title 2 of the Government Code.

end insert

begin insert

begin insert SEC. 31. end insert   

end insert begin insert

This act is a bill providing for appropriations related
to the Budget Bill within the meaning of subdivision (e) of Section
12 of Article IV of the California Constitution, has been identified
as related to the budget in the Budget Bill, and shall take effect
immediately.

end insert

begin delete

SECTION 1.  

It is the intent of the Legislature to enact statutory
changes relating to the Budget Act of 2015.

end delete