BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 806|
|Office of Senate Floor Analyses | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
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THIRD READING
Bill No: AB 806
Author: Dodd (D) and Frazier (D)
Amended: 8/8/16 in Senate
Vote: 21
SENATE GOVERNANCE & FIN. COMMITTEE: 7-0, 6/15/16
AYES: Hertzberg, Nguyen, Beall, Hernandez, Lara, Moorlach,
Pavley
ASSEMBLY FLOOR: 79-0, 6/3/15 - See last page for vote
SUBJECT: Community development: economic opportunity
SOURCE: Author
DIGEST: This bill allows all counties and cities to acquire,
sell, or lease county-owned or city-owned real property to
promote economic development, subject to specified requirements.
Senate Floor Amendments of 8/8/16 clarify that an exemption in
the bill applies to former redevelopment agency housing assets
that are transferred to any city or any county, not just to "a
city and county."
Senate Floor Amendments of 8/1/16 exempt specified former
redevelopment agency housing assets from this bill's prohibition
against selling, leasing, or otherwise transferring, at a price
that is less than fair market value, any real property that was
acquired through eminent domain.
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ANALYSIS:
Existing law:
1)Prohibits counties and general law cities from making a gift
of public funds. Courts have determined that charter cities
are not subject to that prohibition.
2)Allows, generally, a city to dispose of real property in any
way it chooses if doing so is for the common benefit. A city
may sell or lease real property for less than fair market
value, without violating the constitutional prohibition
against making a gift of public funds, if the sale or lease
serves a public purpose.
3)Requires a county to sell or lease property using a
competitive sealed-bid process, pursuant to specified
requirements:
a) A county board of supervisors must, by a two-thirds
vote, adopt a resolution in a regular open meeting
declaring its intention to sell or lease the property.
b) The resolution must describe the property and the terms
upon which it will be sold or leased.
c) At least three weeks after adopting the resolution, the
board must hold a public meeting at which sealed proposals
to purchase or lease the property must be considered.
4)Exempts a county from these requirements, and allows it to
sell real property at less than fair market value, to provide
housing that is affordable to low and moderate income
residents.
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This bill:
1)Deletes statutory language that limits the authority to sell
or lease city-owned or county-owned property for economic
development purposes to property that is governed by a
long-range property management plan. As a result, this bill
allows a city, county, or city and county to sell or lease any
county-owned or city-owned property to create an economic
opportunity, as defined in state law.
2)Allows a city, county, or city and county to acquire property
in furtherance of the creation of an economic opportunity.
3)Requires that the creation of an economic opportunity must be
subject to a specified statute that requires public agencies
to disclose specified information, hold hearings, and produce
reports relating to economic development subsidies.
4)Prohibits, for the purposes of specified statutes authorizing
the sale, lease, or transfer of property for the creation of
an economic opportunity, a city, county, or city and county
from selling, leasing, or otherwise transferring, at a price
that is less than the fair market value, any real property
that was acquired through eminent domain. This bill exempts
from this prohibition any property that is:
a) Governed by a long-range property management plan
pursuant to a specified statute.
b) A housing asset of a former redevelopment agency that is
transferred to a city, county, or city and county pursuant
to specified statutes, provided that the successor agency
or designated local authority in the affected jurisdiction
has received a finding of completion from the Department of
Finance.
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5)Requires that a loan provided by a city or county to owners or
tenants for the purpose of rehabilitating commercial buildings
or structures must be in the form of a written loan agreement
that includes specified elements.
6)Specifies that loan agreements, sale agreements, and lease
agreements that meet specified criteria are included in the
statutory definition of "economic opportunity."
7)Requires that, before entering into a loan agreement, a city,
county, or city and county, must find, after a public hearing,
that the assistance is necessary for the economic feasibility
of the development and that the assistance cannot be obtained
on economically feasible terms in the private market.
8)Declares that:
a) Specified statutes amended by this bill are an
alternative to any authority of a city, county, or city and
county to create an economic opportunity or to acquire,
sell, or lease property for economic development, found in
the Constitution, state law, local ordinance, or charter.
b) Specified statutes amended by this bill do not limit or
in any way affect, the application of any other such laws.
9) Makes additional clarifying and conforming changes to state
law.
Background
Until 2011, the Community Redevelopment Law allowed local
officials to set up redevelopment agencies (RDAs), prepare and
adopt redevelopment plans, and finance redevelopment activities.
The Law authorized RDAs to sell or lease property without
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public bidding as long as the RDA provided public notice and
held a public hearing. Citing a significant State General Fund
deficit, Governor Brown's 2011-12 Budget proposed eliminating
RDAs and returning billions of dollars of property tax revenues
to schools, cities, and counties to fund core services. Among
the statutory changes that the Legislature adopted to implement
the 2011-12 Budget, ABX1 26 (Blumenfield, Chapter 5, Statutes of
2011 First Extraordinary Session) dissolved all RDAs. The
Community Redevelopment Law specified the manner in which former
RDAs could sell or lease real property. Those provisions now
apply to successor agencies to redevelopment agencies. State
law requires successor agencies to prepare a long-range property
management plan and dispose of property under that plan.
If a successor agency has transferred property to a city or
county as part of a long-range property management plan, state
law allows the city or county to use alternative procedures to
dispose of the property for economic development purposes (SB
470, Wright, Chapter 659, Statutes of 2013). The 2013 Wright
bill also allowed a city or county to establish a program under
which it loans funds to owners or tenants for the purpose of
rehabilitating commercial buildings or structures.
Some local officials want the Legislature to expand counties'
and general law cities statutory authority to acquire, sell, or
lease public property for economic development by allowing the
alternative procedures enacted by the 2013 Wright bill to be
used for any city- or county-owned property.
Comments
Purpose of the bill. This bill provides cities and counties
with additional flexibility to use city- or county-owned real
property to fulfill economic development goals. In the wake of
RDAs' dissolution, local officials have lost many of the tools
that they previously used to promote economic development within
their communities. This bill restores some significant powers
that cities and counties previously exercised over the
acquisition and disposition of public property pursuant to
provisions of the Community Redevelopment Law. This bill builds
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upon the provisions of SB 470 (Wright, Chapter 659, Statutes of
2013) by granting local officials authority to sell or lease any
publicly owned real property at less than fair market value to
create an economic opportunity. This bill will benefit
communities throughout California by helping local officials get
their economic development efforts back on track.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:NoLocal: No
SUPPORT: (Verified8/9/16)
California Association for Local Economic Development
City of American Canyon
City of Azusa
City of Camarillo
City of Commerce
City of Fairfield
City of Fountain Valley
City of Industry
City of Napa
City of Norwalk
City of Redding
Fairfield Suisun Chamber of Commerce
League of California Cities
Lystek International, Ltd.
OPPOSITION: (Verified8/9/16)
None received
ASSEMBLY FLOOR: 79-0, 6/3/15
AYES: Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom,
Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang,
Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle,
Daly, Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina
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Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez,
Gordon, Gray, Grove, Hadley, Roger Hernández, Holden, Irwin,
Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low,
Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin,
Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Perea,
Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago,
Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber,
Wilk, Williams, Wood, Atkins
NO VOTE RECORDED: Harper
Prepared by:Brian Weinberger / GOV. & F. / (916) 651-4119
8/10/16 15:45:22
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