Amended in Senate August 1, 2016

Amended in Senate June 21, 2016

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 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.

This bill would recast these provisions to instead authorize a city, county, or city and county, with the approval of its legislative body by resolution after a public hearing, to acquire, sell, or lease property in furtherance of the creation of an economic opportunity, as defined. 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.

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

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.

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 thisbegin delete partend deletebegin insert part,end insert “economic opportunity”
4means any of the following:

5(a) Development agreements, loan agreements, sale agreements,
6lease agreements, or other agreements that create, retain, or expand
7new jobs, in which the legislative body finds that the agreement
8will create or retain at least one full-time equivalent, permanent
9job for every thirty-five thousand dollars ($35,000) of city, county,
10or city and county investment in the project after full capacity and
11implementation.

P3    1(b) Development agreements, loan agreements, sale agreements,
2lease agreements, or other agreements that increase property tax
3revenues to all property tax collecting entities, in which the
4legislative body finds that the agreement will result in an increase
5of at least 15 percent of total property tax resulting from the project
6at full implementation when compared to the year prior to the
7property being acquired by the government entity.

8(c) Creation of affordable housing, if a demonstrated affordable
9housing need exists in the community, as defined in the approved
10housing element or regional housing needs assessment.

11(d) Projects that meet the goals set forth in Chapter 728 of the
12Statutes of 2008 and have been included in an adopted sustainable
13communities strategy or alternative planning strategy or a project
14that specifically implements the goals of those adopted plans.

15(e) Transit priority projects, as defined in Section 21155 of the
16Public Resources Code.

17

SEC. 2.  

Section 52200.6 of the Government Code is amended
18to read:

19

52200.6.  

(a) (1) This part shall not be interpreted to authorize
20the use of eminent domain for economic development purposes.

21(2) For the purposes of this part, a city, county, or city and
22county shall not sell, lease, or otherwise transfer, at a price that is
23less than the fair market value, any real property that was acquired
24through eminent domain. This prohibition shall not apply tobegin delete anyend delete
25
begin insert either of the following:end insert

26begin insert(A)end insertbegin insertend insertbegin insertAnyend insert real property governed by a long-range property
27management plan pursuant to Section 34191.5 of the Health and
28Safety Code.

begin insert

29
(B) Any housing asset transferred to a city and county pursuant
30to paragraph (1) of subdivision (a) of Section 34176 of the Health
31and Safety Code or subdivision (c) of Section 34181 of the Health
32and Safety Code, provided that the successor agency or the
33designated local authority in the affected jurisdiction has received
34a finding of completion from the Department of Finance pursuant
35to Section 34179.7 of the Health and Safety Code.

end insert

36(b) The creation of an economic opportunity pursuant to this
37part shall be subject to the provisions of Section 53083.

38(c) The provisions of this part shall be an alternative to any
39authority of a city, county, or city and county to create an economic
40opportunity or to acquire, sell, or lease property for economic
P4    1development, found in the Constitution, state law, local ordinance,
2or charter. This part does not limit, or in any way affect, the
3application of any other such laws.

4

SEC. 3.  

Section 52201 of the Government Code is amended
5to read:

6

52201.  

(a) (1) A city, county, or city and county may acquire
7property in furtherance of the creation of an economic opportunity.
8A city, county, or city and county may sell or lease property to
9create an economic opportunity. The acquisition, sale, or lease
10shall first be approved by the legislative body by resolution after
11a public hearing. Notice of the time and place of the hearing shall
12be published in a newspaper of general circulation in the
13community at least once per week for at least two successive
14weeks, as specified in Section 6066, prior to the hearing.

15(2) The city, county, or city and county shall make available,
16for public inspection and copying at a cost not to exceed the cost
17of duplication, a report no later than the time of publication of the
18first notice of the hearing mandated by this section. This report
19shall contain both of the following:

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

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

22(i) The cost of the agreement to the city, county, or city and
23county, including land acquisition costs, clearance costs, relocation
24costs, the costs of any improvements to be provided by the city,
25county, or city and county, plus the expected interest on any loans
26or bonds to finance the agreements.

27(ii) For the sale or lease of property, the estimated value of the
28interest to be conveyed or leased, determined at the highest and
29best uses permitted under the general plan or zoning.

30(iii) For the sale or lease of property, the estimated value of the
31interest to be conveyed or leased, determined at the use and with
32the conditions, covenants, and development costs required by the
33sale or lease. The purchase price or present value of the lease
34payments which the lessor will be required to make during the
35term of the lease. If the sale price or total rental amount is less than
36the fair market value of the interest to be conveyed or leased,
37determined at the highest and best use, then the city, county, or
38city and county shall provide as part of the summary an explanation
39of the reasons for the difference.

P5    1(iv) An explanation of why the acquisition, sale, or lease of the
2property will assist in the creation of economic opportunity, with
3reference to all supporting facts and materials relied upon in
4making this explanation.

5(b) The resolution approving the acquisition, sale, or lease shall
6be adopted by a majority vote unless the legislative body has
7provided by ordinance for a two-thirds vote for that purpose and
8shall contain a finding that the acquisition, sale, or lease of the
9property will assist in the creation of economic opportunity. For
10the sale or lease of property, the resolution shall also contain one
11of the following findings:

12(1) The consideration is not less than the fair market value at
13its highest and best use.

14(2) The consideration is not less than the fair reuse value at the
15use and with the covenants and conditions and development costs
16authorized by the sale or lease.

17(c) The provisions of this section are an alternative to any other
18authority granted by law to cities to dispose of city-owned property.

19

SEC. 4.  

Section 52202 of the Government Code is amended
20to read:

21

52202.  

(a) A city, county, or city and county may loan funds
22to owners or tenants for the purpose of rehabilitating commercial
23buildings or structures. The loan shall be in the form of a written
24loan agreement that includes a payment schedule, the terms for
25interest calculation, the rights and remedies of the parties in case
26of default, and any other material terms of the loan.

27(b) Prior to entering into a loan agreement pursuant to this
28section, the city, county, or city and county shall find, after a public
29hearing, that the assistance is necessary for the economic feasibility
30of the development and that the assistance cannot be obtained on
31economically feasible terms in the private market.



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