BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                     AB 806


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          Date of Hearing:  May 13, 2015


                        ASSEMBLY COMMITTEE ON APPROPRIATIONS


                                 Jimmy Gomez, Chair


          AB  
          806 (Dodd) - As Amended April 6, 2015


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          |Policy       |Local Government               |Vote:|9 - 0        |
          |Committee:   |                               |     |             |
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          |-------------+-------------------------------+-----+-------------|
          |             |Housing and Community          |     |6 - 0        |
          |             |Development                    |     |             |
          |             |                               |     |             |
          |             |                               |     |             |
          |-------------+-------------------------------+-----+-------------|
          |             |                               |     |             |
          |             |                               |     |             |
          |             |                               |     |             |
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          Urgency:  No  State Mandated Local Program:  NoReimbursable:  No


          SUMMARY:


          This bill specifies that agreements entered into by a former  
          redevelopment agency (RDA) prior to June 30, 2011, to fund state  
          highway infrastructure improvements are enforceable obligations.  








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          The bill also makes various technical changes to redevelopment  
          dissolution law regarding appointments to local oversight  
          boards, modifications to existing contracts, and compensation  
          agreements as part of the approval of long-range property  
          management plans.


          FISCAL EFFECT:


          Unknown, General Fund losses, perhaps in the hundreds of  
          thousands of dollars, from specifying that RDA agreements  
          entered into prior to June 30, 2011, that include highway  
          improvements are enforceable obligations.  Absent this bill,  
          these revenues would be distributed to local taxing entities,  
          including schools.  Under Proposition 98, the General Fund would  
          be required to backfill the resulting property tax losses to  
          schools. The number of projects affected is unknown, but likely  
          small.


          COMMENTS:


          1)Purpose.  This bill continues a multi-year process to clean up  
            lingering issues and resolve disputes regarding the  
            redevelopment dissolution process. 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."


          2)Background.  In 2011, the Legislature approved and governor  
            signed two measures, ABX1 26 and ABX1 27 that together  
            dissolved redevelopment agencies as they existed and created a  
            voluntary redevelopment program on a smaller scale.  In  
            response, the California Redevelopment Association, the League  
            of California Cities and other partied, filed suit challenging  








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            the two measures.  The Supreme Court denied the petition for  
            peremptory writ of mandate with respect to ABX1 26 and granted  
            the petition with respect to ABX1 27.  As a result of the  
            court's decision, all redevelopment agencies were required to  
            dissolve as of February 1. 2012 and there was no authority for  
            any new redevelopment program.


            In 2012, AB 1484 (Blumenfield), Chapter 26, made the statutory  
            changes needed to achieve budget savings related to the  
            dissolution of redevelopment agencies.  AB 1484 clarified the  
            process for dissolving all redevelopment agencies, made  
            various statutory changes associated with the dissolution of  
            redevelopment agencies, and addressed a number of substantive  
            issues related to administrative processes, affordable housing  
            activities, repayment of loans from communities, use of  
            existing bond proceeds, and the disposition or retention of  
            former redevelopment agency assets.  AB 1484 specified all  
            proceeds from bonds issued in 2011 must be defeased, the  
            exception being if the redevelopment agency has enforceable  
            obligations with third parties to spend the proceeds.


          3)Addressing the Governor's Veto.   This bill is similar to SB  
            1129 (Steinberg) of 2014, which was vetoed by Governor Brown.   
            Some of the provisions the Governor objected to have been  
            removed from this bill. Others have been modified to address  
            his concerns, including allowing the modification of existing  
            contracts with the approval of the oversight board, and not  
            eliminating compensation agreements altogether, but rather  
            allowing them to be developed and executed after the approval  
            of a long-range management plan. 


            However, a provision to allow the spending of 2011 bond  
            proceeds remains in this bill. In his veto message the  
            Governor stated, in part, "This bill allows Successor Agencies  
            to expend revenues from bonds issues after December  
            2010,...Furthermore, I have already vetoed AB 2493, and this  








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            bill contains a similar provision to allow 2011 bond proceeds  
            to be spent." 


          4)Related Current Legislation. There are four additional bills  
            regarding redevelopment pending in this Committee:


             a)   AB 654 (Brown) would prohibit revenues derived from a  
               property tax rate approved by voters in a city, county, or  
               special district to pay for the State Water Project to be  
               allocated to the Redevelopment Property Tax Trust Fund. 

             b)   AB 974 (Bloom) would allow redevelopment successor  
               agencies, and entities performing the housing functions of  
               former redevelopment agencies (RDAs), to spend bond  
               proceeds from bonds issued by former RDAs in 2011.

             c)   AB 1009 (Garcia) would allow revenues from a  
               voter-approved pension property tax to be allocated to the  
               city or county whose voters approved the tax.  

             d)   AB 1412 (Perea) would allow for an expedited loan  
               repayment schedule between a former RDA and a city or  
               county, under specified conditions.

          1)Related Prior Legislation. There have been numerous bills  
            seeking to amend the statutes governing redevelopment  
            dissolution.  Among the most recent:


             a)   AB 1963 (Atkins) Chapter 146, Statutes of 2014, extends  
               the date by which DOF must approve a redevelopment  
               successor agency's long-range management plan until January  
               1, 2016.


          









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          Analysis Prepared by:Jennifer Swenson / APPR. / (916)  
          319-2081