Amended in Assembly April 22, 2015

Amended in Assembly March 26, 2015

California Legislature—2015–16 Regular Session

Assembly Bill No. 654

Introduced by Assembly Member Brown

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(Coauthor: Senator Morrell)

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February 24, 2015

An act to amend begin delete Sections 34171 and 34177 of, and to add Sections 34170.1 and 34191.6 to, end delete begin insert Section 34183 of end insert the Health and Safety Code, relating to begin delete redevelopment. end delete begin insert redevelopment. end insert

LEGISLATIVE COUNSEL’S DIGEST

AB 654, as amended, Brown. begin delete Community redevelopment. end delete begin insert Redevelopment: revenues from property tax override rates. end insert

(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. Existing law requires revenues equivalent to those that would have been allocated to each redevelopment agency, had the agency not been dissolved, to be allocated to the Redevelopment Property Tax Trust Fund of each successor agency for, among other things, making payments on the principal of, and interest on, loans and moneys advanced to, or indebtedness incurred by, the dissolved redevelopment begin delete agencies and making payments due for enforceable obligations. Existing law also requires successor agencies to perform obligations required pursuant to any enforceable obligation. end delete begin insert agencies. 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 in a specified manner. end insert

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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, constitutes a department action for the preparation, development, or administration of the state budget and is exempt from the rulemaking provisions of 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 the exclusions described above 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 defines the term “enforceable obligation” to include specified amounts owed by a former redevelopment agency. The California Constitution generally limits ad valorem taxes on real property to 1% of the full cash value of that property. The California Constitution authorizes a local entity to, with voter approval, levy an additional property tax rate for specified bonded indebtedness.

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This bill would provide that “enforceable obligation” includes amounts derived from an additional property tax rate approved by the voters of a city, county, city and county, or special district to make payments in support of capital projects and programs related to the State Water Project, consistent with the use approved by the voters of the city, county, city and county, or special district.

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(5) Existing law specifies that the term “enforceable obligation” includes amounts borrowed from, or payments owing to, the Low and Moderate Income Housing Fund of a redevelopment agency that had been deferred as of a certain date.

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This bill would provide that the enforceable obligation described above includes only amounts borrowed from, or payments owing to, the Low and Moderate Income Housing Fund of a redevelopment agency pursuant to specified provisions that had been deferred as of a certain date. This bill would provide that this definition applies retroactively to all enforceable obligations recognized above on or after June 28, 2011.

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(6) Existing law also 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, for the financing or refinancing of indebtedness obligations that existed prior to January 1, 2011, and solely for the purpose of securing or repaying those indebtedness obligations, to be deemed enforceable obligations.

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(7) 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 2 requests to the department to amend the approved Last and Final Recognized Obligation Payment Schedule, 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 moneys in the Redevelopment Property Tax Trust Fund in a specified order of priority.

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This bill would authorize a city, county, city and county, or special district that levies a property tax rate, approved by the voters of a city, county, city and county, or special district to make payments in support of the State Water Project and levied in addition to the general property tax rate, to make a request to an oversight board to prohibit revenues derived from that property tax rate from being deposited into a Redevelopment Property Tax Fund. This bill would authorize an oversight board to deny this request based on substantial evidence that a former redevelopment agency made a pledge of revenues that specifically included revenues derived from the imposition of that property tax rate. This bill, for the 2015-16 fiscal year and each fiscal year thereafter, except to the extent an oversight board denies a request, would prohibit any revenues derived from the imposition of that property tax rate from being allocated to a Redevelopment Property Tax Trust Fund and would, instead, require these revenues to be allocated to, and when collected to be paid into, the fund of the city, county, city and county, or special district whose voters approved the tax. The bill would require all allocations of revenues derived from the imposition of that property tax rate made by any county auditor-controller prior to July 1, ____, to be deemed correct, and would prohibit any city, county, county auditor-controller, successor agency, or affected taxing entity from being subject to any claim, as specified. This bill would require, to the extent that revenues derived from the imposition of a property tax rate, approved by the voters of a city or county or special district to make payments in support of the State Water Project and levied in addition to the general property tax rate, are deposited into a Redevelopment Property Tax Trust Fund, the county auditor-controller to allocate moneys from each Redevelopment Property Tax Trust Fund to a city or county or special district that levies a property tax as so described after certain other allocations have been made.

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(8)

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begin insert (2) end insert  By adding to the duties of local government officials with respect to the wind down of the dissolved redevelopment agencies, this bill would impose a state-mandated local program.

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.

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.

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

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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(a) The Legislature finds and declares all of the
following:

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(1) The California Constitution limits property-based tax levies,
with exceptions to these limits only when a local jurisdiction
obtains the approval of its voting electorate to use additional
property-based tax levies for specific purposes approved by the
voting electorate, in accordance with applicable constitutional
and statutory provisions.

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(2) With the enactment of Chapter 5 of the 2011-12 First
Extraordinary Session (Assembly Bill 26), the Legislature intended
that, upon dissolution of redevelopment agencies in the State of
California, property taxes that would have been allocated to
redevelopment agencies are no longer deemed tax increment.

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(3) It is the intent of the Legislature in enacting this act to do
all of the following:

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(A) If a redevelopment agency had previously pledged revenues
derived from the imposition of a property tax rate, approved by
the voters of a city, county, or city and county, or special district
to make payments in support of 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, to pay
a portion of the debt service due on indebtedness incurred by the
former redevelopment agency on an approved recognized
obligation payment schedule, then the successor agency shall
continue to pledge those revenues, in a commensurate rate going
forward. For example, if revenues derived from a water project
property tax rate approved by the voters of a city, county, city and
county, or special district were pledged to pay up to 25 percent of
the annual debt service for the indebtedness approved in a
recognized obligation payment schedule, the successor agency
shall continue to pay up to 25 percent of the annual debt service
on the indebtedness until maturity. Any and all excess pledged
revenues derived from the water project property tax rate that are
not necessary to pay the debt service on the indebtedness shall be
allocated and paid to the city, county, city and county, or special
district whose voters approved the State Water Project-related
property tax rate.

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(B) Ensure that the use of revenues 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 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, is consistent with the use approved by the
voters of a city, county, city and county, or special district once
revenues from such property tax rates are not needed to pay
approved indebtedness of a former redevelopment agency.

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(C) Implement the allocation and distribution of voter-approved,
property-based tax revenues for the State Water Project under the
redevelopment dissolution process in a manner that would have
been consistent with the allocation and distribution of those
revenues had redevelopment agencies not been dissolved, in
accordance with applicable constitutional provisions.

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(4) Further, it is the intent of the Legislature that this act not
affect any property tax allocations that occurred prior to July 1,
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begin insert SEC. 2. end insert   

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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) 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.

(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.

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(4) (A) Fourth, on January 2, 2016, and each January 2 and
June 1 thereafter, to a city or county or special district that levies
a property tax rate, approved by the voters of a city or county or
special district to make payments in support of 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, an amount of property tax revenues equal to the
amount of revenues derived from the imposition of that tax rate
that were allocated to the Redevelopment Property Tax Trust Fund
for that fiscal period.

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(B) This paragraph shall not apply to the extent that revenues
derived from the imposition of a property tax rate described in
subparagraph (A) are not deposited into a Redevelopment Property
Tax Trust Fund as provided by subdivision (f).

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(4) Fourth,

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begin insert (5) end insert begin insert   end insert begin insert Fifth, end insert 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 begin delete (3) end delete begin insert (4) end insert , inclusive, shall be distributed to local
agencies and school entities in accordance with Section 34188.

(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 begin delete paragraph end delete begin insert paragraphs end insert (4) begin insert and (5) of
subdivision (a) end insert , and if that amount is exhausted, from amounts
available for distribution for administrative costs in paragraph (3)
begin insert of subdivision (a) end insert . 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) begin insert of
subdivision (a) end insert , as provided in those sections, but only to the extent
that the amounts remaining to be distributed to taxing entities
pursuant to begin delete paragraph end delete begin insert paragraphs end insert (4) begin insert and (5) of subdivision (a) end insert
and the amounts available for distribution for administrative costs
in paragraph (3) begin insert of subdivision (a) end insert 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.

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(f) (1) A city or county that levies a property tax rate, approved
by the voters of a city or county or special district to make
payments in support of 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, may make
a request to an oversight board to prohibit revenues derived from
the imposition of that property tax rate from being deposited into
a Redevelopment Property Tax Trust Fund.

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(2) Based on substantial evidence that a former redevelopment
agency made a pledge of revenues that specifically included
revenues derived from the imposition of a property tax rate,
approved by the voters of a city or county or special district to
make payments in support of 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, an
oversight board may deny a request made pursuant to paragraph
(1) in an amount not to exceed the amount of revenues pledged by
the former redevelopment agency.

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(3) Notwithstanding any other law, for the 2015-16 fiscal year
and each fiscal year thereafter, except to the extent an oversight
board denies a request as provided by paragraph (2), any revenues
derived from the imposition of a property tax rate, approved by
the voters of a city or county or special district to make payments
in support of 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 not be allocated to a
Redevelopment Property Tax Trust Fund and shall instead be
allocated to, and when collected shall be paid into, the fund of the
city or county or special district whose voters approved the tax.

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(4) Notwithstanding any other law, all allocations of revenues
derived from the imposition of a property tax rate, approved by
the voters of a city or county or special district to make payments
in support of 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 July 1, ____, shall be deemed correct
and shall not be affected by this act. A city, county, county
auditor-controller, successor agency, or affected taxing entity shall
not be subject to any claim for money, damages, or reallocated
revenues based on any allocation of such revenues prior to July
1, 2014.

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begin insert SEC. 3. end insert   

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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.

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SECTION 1.  

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

34170.1.  

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.

SEC. 2.  

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

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.

(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.

(2) The administrative cost allowance shall be 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, 2012. The administrative cost allowance shall be
up to 3 percent of the property tax allocated to the Redevelopment
Obligation Retirement Fund for each fiscal year thereafter ending
on June 30, 2016. 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 with the successor agency.

(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.

(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. 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.

(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.

(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) 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. Any legal
expenses related to civil actions, including writ proceedings,
contesting the validity of Part 1.8 (commencing with Section
34161) or Part 1.85 (commencing with Section 34170) or
challenging acts taken pursuant to these parts shall only be payable
out of the administrative cost allowance.

(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)). Enforceable obligations
pursuant to this subparagraph include only amounts borrowed
from, or payments owing to, the Low and Moderate Income
Housing Fund of a redevelopment agency pursuant to subdivision
(k) of Section 33334.2, subdivision (g) of Section 33334.6,
subdivision (b) of Section 33681.7, subdivision (b) of Section
33681.9, subdivision (b) of Section 33681.12, subdivision (b) of
Section 33685, subdivision (c) of Section 33690, or subdivision
(c) of Section 33690.5, which had been deferred as of the effective
date of the act adding this part and were approved by the
department pursuant to paragraph (2) of subdivision (a) of section
34176. This definition applies retroactively to all enforceable
obligations recognized under this subparagraph on or after June
28, 2011.

(H) Amounts derived from a property tax rate approved by the
voters of a city, county, city and county, or special district to make
payments 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, consistent with the use approved by
the voters of a city, county, city and county, or special district.

(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. Additionally, written agreements entered
into (A) at the time of issuance, but in no event later than June 27,
2011, of indebtedness obligations for the refunding or refinancing
of indebtedness obligations that existed prior to January 1, 2011,
and (B) solely for the purpose of securing or repaying those
indebtedness obligations may be deemed enforceable obligations
for purposes of this part. 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.

(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 until June 30, 2016, as provided in
subdivision (m) of Section 34177. 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.

(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.

SEC. 3.  

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

34177.  

Successor agencies are required to do all of the
following:

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

(1) On and after February 1, 2012, and until a Recognized
Obligation Payment Schedule becomes operative, only payments
required pursuant to an enforceable obligations payment schedule
shall be made. The initial enforceable obligation payment schedule
shall be the last schedule adopted by the redevelopment agency
under Section 34169. However, payments associated with
obligations excluded from the definition of enforceable obligations
by paragraph (2) of subdivision (d) of Section 34171 shall be
excluded from the enforceable obligations payment schedule and
be removed from the last schedule adopted by the redevelopment
agency under Section 34169 prior to the successor agency adopting
it as its enforceable obligations payment schedule pursuant to this
subdivision. The enforceable obligation payment schedule may
be amended by the successor agency at any public meeting and
shall be subject to the approval of the oversight board as soon as
the board has sufficient members to form a quorum. In recognition
of the fact that the timing of the California Supreme Court’s ruling
in the case California Redevelopment Association v. Matosantos
(2011) 53 Cal.4th 231 delayed the preparation by successor
agencies and the approval by oversight boards of the January 1,
2012, through June 30, 2012, Recognized Obligation Payment
Schedule, a successor agency may amend the Enforceable
Obligation Payment Schedule to authorize the continued payment
of enforceable obligations until the time that the January 1, 2012,
through June 30, 2012, Recognized Obligation Payment Schedule
has been approved by the oversight board and by the department.
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 department, the county auditor-controller, and the
Controller shall each have the authority to require any documents
associated with the enforceable obligations to be provided to them
in a manner of their choosing. Any taxing entity, the department,
and the Controller shall each have standing to file a judicial action
to prevent a violation under this part and to obtain injunctive or
other appropriate relief.

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

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

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

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

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

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

(e) Dispose of assets and properties of the former redevelopment
agency as directed by the oversight board; provided, however, that
the oversight board may instead direct the successor agency to
transfer ownership of certain assets pursuant to subdivision (a) of
Section 34181. The disposal is to be done expeditiously and in a
manner aimed at maximizing value. Proceeds from asset sales and
related funds that are no longer needed for approved development
projects or to otherwise wind down the affairs of the agency, each
as determined by the oversight board, shall be transferred to the
county auditor-controller for distribution as property tax proceeds
under Section 34188. The requirements of this subdivision shall
not apply to a successor agency that has been issued a finding of
completion by the department 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 fiscal period set forth in subdivision (m) or
(o), as applicable, 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 department 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 months or one year pursuant to
subdivision (m) or (o), as applicable. The first Recognized
Obligation Payment Schedule shall be submitted to the Controller’s
office and the department 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) Until December 31, 2015, the Recognized Obligation
Payment Schedule for the period of January 1, 2013, to June 30,
2013, shall be submitted by the successor agency, after approval
by the oversight board, no later than September 1, 2012.
Commencing with the Recognized Obligation Payment Schedule
covering the period July 1, 2013, through December 31, 2013,
successor agencies shall submit an oversight board-approved
Recognized Obligation Payment Schedule to the department and
to the county auditor-controller no fewer than 90 days before the
date of property tax distribution. The department shall make its
determination of the enforceable obligations and the amounts and
funding sources of the enforceable obligations no later than 45
days after the Recognized Obligation Payment Schedule is
submitted. Within five business days of the department’s
determination, a successor agency may request additional review
by the department and an opportunity to meet and confer on
disputed items, except for those items which are the subject of
litigation disputing the department’s previous or related
determination. The meet and confer period may vary; an untimely
submittal of a Recognized Obligation Payment Schedule may result
in a meet and confer period of less than 30 days. The department
shall notify the successor agency and the county auditor-controllers
as to the outcome of its review at least 15 days before the date of
property tax distribution.

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

(2) If a successor agency does not submit a Recognized
Obligation Payment Schedule by the deadlines provided in this
subdivision, the city, county, or city and county that created the
redevelopment agency, if it is 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 of Finance or any affected
taxing entity shall have standing to and may request a writ of
mandate to require the successor agency to immediately perform
this duty. Those actions may be filed only in the County of
Sacramento and shall have priority over other civil matters.
Additionally, if an agency does not submit a Recognized Obligation
Payment Schedule within 10 days of the deadline, the maximum
administrative cost allowance for that period shall be reduced by
25 percent.

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

(4) (A) 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.

(B) 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.

(C) 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.

(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.

(o) On and after January 1, 2016, commencing with the
Recognized Obligation Payment Schedule covering the period
from July 1, 2016, to June 30, 2017, inclusive, and for each 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.

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

(2) If a successor agency does not submit a Recognized
Obligation Payment Schedule by the deadlines provided in this
subdivision, the city, county, or city and county that created the
redevelopment agency, 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.

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

(4) (A) 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.

(B) 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.

(C) 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.

(5) 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.

SEC. 4.  

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

34191.6.  

(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.

(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, not to exceed 2 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.

(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) 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.

(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.
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. 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.

(6) Notwithstanding paragraph (6) of subdivision (e) of Section
34176 and subparagraph (A) of paragraph (2) of subdivision (b)
of Section 34191.4, commencing on the date the Last and Final
Recognized Obligation Payment Schedule becomes effective:

(A) Loan or 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 on the Last and
Final Recognized Obligation Payment Schedule, shall be
recalculated to accrue annual simple interest not to exceed 2
percent.

(B) 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.

(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 Fund 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 Section 34188.

(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 of Finance may
amend or modify existing contracts, agreements, or other
arrangements identified on the Last and Final Recognized
Obligation Payment Schedule which the Department of Finance
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.

SEC. 5.  

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.

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