BILL ANALYSIS Ó
AB 806
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Date of Hearing: April 15, 2015
ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
Brian Maienschein, Chair
AB 806
(Dodd) - As Introduced February 26, 2015
SUBJECT: Redevelopment: successor agencies to redevelopment
agencies.
SUMMARY: Makes various changes to provisions of law governing
former redevelopment agencies (RDAs). Specifically, this bill:
1)Allows an agreement entered into between an RDA prior to June
30, 2011, to be an enforceable obligation, if the agreement
relates to state highway infrastructure improvements to which
the RDA committed funds pursuant to provisions in the
Community Redevelopment Law (CRL) related to property
disposition, rehabilitation and development.
2)Allows, for oversight boards, each appointing authority
identified in existing law to appoint alternate
representatives to serve on the oversight board as may be
necessary to attend any meeting of the oversight board in the
event that the appointing authority's primary representative
is unable to attend any meeting for any reason.
3)Provides, if the alternate representative attends any meeting
in place of the primary representative, that the alternative
representative shall have the same participatory and voting
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rights as all other attending members of the oversight board.
4)Requires the successor agency to promptly notify the
Department of Finance (DOF) regarding the appointment of any
alternate representative to the oversight board.
5)Allows, if the successor agency has received a finding of
completion, with the approval
of the successor agency's oversight board, the successor agency
to amend or modify existing, contracts and agreements, or
otherwise administer projects in connection with enforceable
obligations approved pursuant to existing law related to the
Recognized Obligation Payment Schedule (ROPS) approval
process, including the substitution of private developer
capital in a disposition and development agreement that has
been deemed an enforceable obligation,
if the contract, agreement, or project will not commit new
property tax funds, and will not otherwise directly or
indirectly reduce property tax revenues or payments made to
the taxing agencies, as specified.
6)Allows DOF or an oversight board to require approval of a
compensation agreement or agreements, as specified, prior to
any transfer of property, provided, however, that a
compensation agreement or agreements may be developed and
executed subsequent to the approval process of a long-range
property management plan.
7)Specifies that DOF shall only consider whether the long-range
property management plan makes a good faith effort to address
the requirements set forth in the existing law that specifies
what the long-range property management plan shall do.
8)Requires DOF to approve long-range property management plans
as expeditiously as possible.
9)Provides that actions relating to the disposition of property
after approval of a long-range property management plan shall
not require review by DOF.
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EXISTING LAW:
1)Dissolves RDAs and institutes a process for winding down their
activities.
2)Allows a city or county that authorized the creation of an RDA
to elect to retain the housing assets and functions previously
performed by the RDA.
3)Required the entity assuming the housing functions of the
former RDA to submit to DOF by August 1, 2012, a list of all
housing assets, as specified.
4)Allows the entity that assumed the housing functions to
designate the use of and commit indebtedness obligation
proceeds that remain after the satisfaction of enforceable
obligations that have been approved in a ROPS and that are
consistent with the indebtedness obligation covenants.
5)Requires the proceeds to be derived from indebtedness
obligations that were issued for the purposes of affordable
housing prior to January 1, 2011, and were backed by the Low-
and Moderate-Income Housing Fund.
6)Requires DOF to issue a finding of completion to the successor
agency, within five business days, once the following
conditions have been met and verified:
a) The successor agency has paid the full amount as
determined during the due diligence reviews and the county
auditor-controller has reported those payments to DOF; and,
b) The successor agency has paid the full amount as
determined during the July True-up process; or,
c) The successor agency has paid the full amount upon a
final judicial determination of the amounts due and
confirmation that those amounts have been paid by the
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county auditor-controller.
7)Allows the successor agency, upon receiving the finding of
completion, to:
a) Retain dissolved RDA assets;
b) Place loan agreements between the former RDA and
sponsoring entity on the ROPS, as an enforceable
obligation, provided the oversight board makes a finding
that the loan was for legitimate redevelopment purposes;
and,
c) Utilize proceeds derived from bonds issued prior to
January 1, 2011, in a manner consistent with the original
bond covenants.
8)Requires, after DOF issues a finding of completion, the
successor agency to prepare a long-range property management
plan that addresses the disposition and use of the real
properties of the former RDA, and requires the report to be
submitted to the oversight board and DOF for approval no later
than six months following the issuance to the successor agency
of the finding of completion.
FISCAL EFFECT: This bill is keyed fiscal.
COMMENTS:
1)Bill Summary. This bill makes a number of changes to
provisions of law governing former RDAs, and is an
author-sponsored bill.
2)Author's Statement. According to the author, "Each year since
the dissolution of local redevelopment agencies, the
Legislature identifies relatively minor issues that require
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some adjustment in the dissolution statute that allows the
dissolution process and its aftermath to work better, but do
not change the policies established when the Legislature
eliminated redevelopment agencies in the first place.
"Cleanup issues have been identified in the following areas:
1) Agreements constituting an enforceable obligation for
highway infrastructure projects; 2) appointments to local
dissolution oversight boards; 3) minor modifications or
amendments to existing agreements or contracts in connection
with enforceable obligations; and, 4) approval of long-range
property management plans.
"AB 806 specifies that an enforceable obligation shall include
a highway infrastructure project if a former redevelopment
agency entered into an agreement for that project before a
specified date. This provision resolves a dispute between the
state and certain local jurisdictions.
"This bill allows existing oversight board members to appoint
alternates to the board, and allows those alternates to
participate in the same manner as the primary appointee. This
provision will help oversight boards to avoid unnecessary
delays in their activities.
"AB 806 also permits amendments and changes to existing
agreements and contracts after a finding of completion has
been issued provided that such changes and amendments do not
commit the expenditure of additional property tax revenues or
reduce the distribution of such revenues to the taxing
entities. This provision will permit change orders to
projects currently underway without impacting the availability
and distribution of property tax revenue to taxing
jurisdictions.
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"Finally, the bill will allow DOF to approve long-range
property management plans without the consummation of
compensation agreements provided that the plan addresses
specified requirements relative to compiling data about the
property and estimating its value. This provision will allow
successor agencies to move forward with the disposition of
property assets that have otherwise been held in limbo to the
detriment of the taxing entities."
3)Previous Legislation. This bill is similar to SB 1129
(Steinberg) of 2014; however, that
bill was much broader in scope and contained several other
sections that are not in this bill. SB 1129 was vetoed by
Governor Brown.
4)Arguments in Support. According to the County of Santa Clara,
this bill makes clarifications to the Dissolution Law in a
manner that will avoid ambiguity and support the interests of
all parties, including the state, local governments, and
successor agencies.
5)Arguments in Opposition. None on file.
6)Double-Referral. This bill is double-referred to the Housing
and Community Development Committee.
REGISTERED SUPPORT / OPPOSITION:
Support
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California Infill Builders Federation
County of Santa Clara
Opposition
None on file
Analysis Prepared by:Debbie Michel / L. GOV. / (916) 319-3958