BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                     AB 806


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          Date of Hearing:  April 29, 2015


               ASSEMBLY COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT


                                   Ed Chau, Chair


          AB 806  
          (Dodd) - As Amended April 6, 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 by 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:  Unknown. 


          COMMENTS:


           Background:   In 2011, facing a severe budget shortfall, the  
          Governor proposed eliminating RDAs in order to deliver more  
          property taxes to other local agencies. Statewide, redevelopment  
          redirected 12% of property taxes away from schools and other  
          local taxing entities and into community development and  
          affordable housing. Ultimately, the Legislature approved and the  








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          Governor signed two measures, ABX1 26 (Blumenfield), Chapter 5  
          and 
          ABX1 27 (Blumenfield), Chapter 6 that together dissolved RDAs as  
          they existed at the time and created a voluntary redevelopment  
          program on a smaller scale. In response the California  
          Redevelopment Association (CRA) and the League of California  
          Cities, along with other parties, filed suit challenging the two  
          measures. The Supreme Court denied the petition for peremptory  
          writ of mandate with respect to ABX1 26. However, the Court did  
          grant CRA's petition with respect to ABX1 27. As a result, all  
          RDAs were required to dissolve as of February 1, 2012.    

          This bill makes a number of changes to provisions of law  
          governing former RDAs.
           
          Purpose of this bill:  According to the author, "Each year since  
          the dissolution of local RDAs, the Legislature identifies  
          relatively minor issues that require 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 RDAs 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 RDA 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  








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          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.

          "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."


           Related Legislation:   


           SB 1129 (Steinberg) of 2014:  Although similar to this bill, SB  
          1129 was much broader in scope and contained several other  
          sections that are not in this bill.  SB 1129 was vetoed by  
          Governor Brown.


           Double-referred:   This bill was double-referred to the Committee  
          on Local Government, where it passed 9-0 on April 15, 2015. 


          










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          REGISTERED SUPPORT / OPPOSITION:




          Support


          California Infill Builders Federation


          County of Santa Clara Board of Supervisors




          Opposition


          None on file




          Analysis Prepared by:Lisa Engel / H. & C.D. / (916) 319-2085