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