BILL ANALYSIS Ó
AB 806
Page 1
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