Amended in Senate June 6, 2016

Amended in Senate April 14, 2016

Amended in Senate July 13, 2015

Amended in Assembly May 28, 2015

Amended in Assembly April 6, 2015

California Legislature—2015–16 Regular Session

Assembly BillNo. 806


Introduced by Assembly Members Dodd and Frazier

February 26, 2015


An act to amend Sections 52200.2, 52200.6, 52201, and 52202 of, and to add Section 52204 to, the Government Code, relating to local government.

LEGISLATIVE COUNSEL’S DIGEST

AB 806, as amended, Dodd. Community development: economic opportunity.

Under existing law, before certain city, county, or city and county property is sold or leased for economic development purposes, approval of the sale or lease by the legislative body by resolution, after a public hearing, is required. Existing law requires that resolution to contain a finding that the sale or lease of the property will assist in the creation of economic opportunity, as defined.

begin deleteThis bill would repeal the existing requirement for approval of the sale or lease by the legislative body by resolution before certain city, county, or city and county property is sold or leased for economic development purposes. The end deletebegin insertThis end insertbill wouldbegin insert recast these provisions toend insert instead authorize a city, county, or city andbegin delete county to acquireend deletebegin insert county, with the approval of its legislative body by resolution after a public hearing, to acquire, sell, or leaseend insert property in furtherance of the creation of an economic opportunity, as defined.begin delete The bill would also authorize a city, county, or city and county to sell or lease property to create an economic opportunity. The bill would require the acquisition, sale, or lease to be approved by the legislative body by resolution after a public hearing.end delete The bill would require the resolution to contain a finding that the acquisition, sale, or lease of the property will assist in the creation of economic opportunity and would require the creation of an economic opportunity to be subject to specified public notice and hearing provisions.

begin insert

Existing law prohibits the use of eminent domain for economic development purposes.

end insert
begin insert

This bill would prohibit a city, county, or city and county from selling, leasing, or otherwise transferring, at a price that is less than the fair market value, for economic development purposes, any real property that was acquired through eminent domain, except as specified.

end insert

Existing law authorizes a city, county, or city and county to establish a program under which it loans funds to owners or tenants for the purpose of rehabilitating commercial buildings or structures.

This bill would revise that authorization by requiring the loan to be in the form of a written loan agreement that includes a payment schedule, the terms for interest calculation, the rights and remedies of the parties in case of default, and any other material terms of the loan. The bill would require, prior to entering into that loan agreement, the city, county, or city and county to find, after a public hearing, that the assistance is necessary for the economic feasibility of the development and that the assistance cannot be obtained on economically feasible terms in the private market.

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

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

P2    1

SECTION 1.  

Section 52200.2 of the Government Code is
2amended to read:

3

52200.2.  

As used in this part “economic opportunity” means
4any of the following:

P3    1(a) Development agreements, loan agreements, sale agreements,
2lease agreements, or other agreements that create, retain, or expand
3new jobs, in which the legislative body finds that the agreement
4will create or retain at least one full-time equivalent, permanent
5job for every thirty-five thousand dollars ($35,000) of city, county,
6or city and county investment in the project after full capacity and
7implementation.

8(b) Development agreements, loan agreements, sale agreements,
9lease agreements, or other agreements that increase property tax
10revenues to all property tax collecting entities, in which the
11legislative body finds that the agreement will result in an increase
12of at least 15 percent of total property tax resulting from the project
13at full implementation when compared to the year prior to the
14property being acquired by the government entity.

15(c) Creation of affordable housing, if a demonstrated affordable
16housing need exists in the community, as defined in the approved
17housing element or regional housing needs assessment.

18(d) Projects that meet the goals set forth in Chapter 728 of the
19Statutes of 2008 and have been included in an adopted sustainable
20communities strategy or alternative planning strategy or a project
21that specifically implements the goals of those adopted plans.

22(e) Transit priority projects, as defined in Section 21155 of the
23Public Resources Code.

begin delete

24(f) The acquisition of property in furtherance of the creation of
25an economic opportunity, as described in subdivisions (a) to (e),
26inclusive.

end delete
27

SEC. 2.  

Section 52200.6 of the Government Code is amended
28to read:

29

52200.6.  

(a) begin insert(1)end insertbegin insertend insertThis part shall not be interpreted to authorize
30the use of eminent domain for economic development purposes.

begin insert

31
(2) For the purposes of this part, a city, county, or city and
32county shall not sell, lease, or otherwise transfer, at a price that
33is less than the fair market value, any real property that was
34acquired through eminent domain. This prohibition shall not apply
35to any real property governed by a long-range property
36management plan pursuant to Section 34191.5 of the Health and
37Safety Code.

end insert

38(b) The creation of an economic opportunity pursuant to this
39part shall be subject to the provisions of Section 53083.

P4    1(c) The provisions of this part shall be an alternative to any
2authority of a city, county, or city and county to create an economic
3opportunity or to acquire, sell, or lease property for economic
4development, found in the Constitution, state law, local ordinance,
5or charter. This part does not limit, or in any way affect, the
6application of any other such laws.

7

SEC. 3.  

Section 52201 of the Government Code is amended
8to read:

9

52201.  

(a) (1) A city, county, or city and county may acquire
10property in furtherance of the creation of an economic opportunity.
11A city, county, or city and county may sell or lease property to
12create an economic opportunity. The acquisition, sale, or lease
13shall first be approved by the legislative body by resolution after
14a public hearing. Notice of the time and place of the hearing shall
15be published in a newspaper of general circulation in the
16community at least once per week for at least two successive
17weeks, as specified in Section 6066, prior to the hearing.

18(2) The city, county, or city and county shall make available,
19for public inspection and copying at a cost not to exceed the cost
20of duplication, a report no later than the time of publication of the
21first notice of the hearing mandated by this section. This report
22shall contain both of the following:

23(A) A copy of the proposed acquisition, sale, or lease.

24(B) A summary that describes and specifies all of the following:

25(i) The cost of the agreement to the city, county, or city and
26county, including land acquisition costs, clearance costs, relocation
27costs, the costs of any improvements to be provided by the city,
28county, or city and county, plus the expected interest on any loans
29or bonds to finance the agreements.

30(ii) For the sale or lease of property, the estimated value of the
31interest to be conveyed or leased, determined at the highest and
32best uses permitted under the general plan or zoning.

33(iii) For the sale or lease of property, the estimated value of the
34interest to be conveyed or leased, determined at the use and with
35the conditions, covenants, and development costs required by the
36sale or lease. The purchase price or present value of the lease
37payments which the lessor will be required to make during the
38term of the lease. If the sale price or total rental amount is less than
39the fair market value of the interest to be conveyed or leased,
40determined at the highest and best use, then the city, county, or
P5    1city and county shall provide as part of the summary an explanation
2of the reasons for the difference.

3(iv) An explanation of why the acquisition, sale, or lease of the
4property will assist in the creation of economic opportunity, with
5reference to all supporting facts and materials relied upon in
6making this explanation.

7(b) The resolution approving the acquisition, sale, or lease shall
8be adopted by a majority vote unless the legislative body has
9provided by ordinance for a two-thirds vote for that purpose and
10shall contain a finding that the acquisition, sale, or lease of the
11property will assist in the creation of economic opportunity. For
12the sale or lease of property, the resolution shall also contain one
13of the following findings:

14(1) The consideration is not less than the fair market value at
15its highest and best use.

16(2) The consideration is not less than the fair reuse value at the
17use and with the covenants and conditions and development costs
18authorized by the sale or lease.

19(c) The provisions of this section are an alternative to any other
20authority granted by law to cities to dispose of city-owned property.

21

SEC. 4.  

Section 52202 of the Government Code is amended
22to read:

23

52202.  

(a) A city, county, or city and county may loan funds
24to owners or tenants for the purpose of rehabilitating commercial
25buildings or structures. The loan shall be in the form of a written
26loan agreement that includes a payment schedule, the terms for
27interest calculation, the rights and remedies of the parties in case
28of default, and any other material terms of the loan.

29(b) Prior to entering into a loan agreement pursuant to this
30section, the city, county, or city and county shall find, after a public
31hearing, that the assistance is necessary for the economic feasibility
32of the development and that the assistance cannot be obtained on
33economically feasible terms in the private market.

34

SEC. 5.  

Section 52204 is added to the Government Code, to
35read:

36

52204.  

The determinations made by a legislative body pursuant
37to this part shall be final and conclusive.



O

    94