BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                     AB 806


                                                                    Page  1


          CONCURRENCE IN SENATE AMENDMENTS


          AB  
          806 (Dodd)


          As Amended  August 8, 2016


          Majority vote


           -------------------------------------------------------------------- 
          |ASSEMBLY:  |      |(June 3, 2015) |SENATE: | 38-0 |(August 15,      |
          |           |      |               |        |      |2016)            |
          |           |      |               |        |      |                 |
          |           |      |               |        |      |                 |
           -------------------------------------------------------------------- 
                 (vote not relevant)




          Original Committee Reference:  L. GOV.


          SUMMARY:  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.


          The Senate amendments strike the existing contents of the bill,  
          and instead:


          1)Specify that loan agreements, sale agreements, and lease  
            agreements that meet specified criteria are included in the  
            statutory definition of "economic opportunity."


          2)Prohibit, for the purposes of specified statutes authorizing  








                                                                     AB 806


                                                                    Page  2


            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 fair market value, any real property that  
            was acquired through eminent domain.  Exempt from this  
            prohibition any property that is:




             a)   Governed by a long-range property management plan  
               pursuant to a specified statute; and,


             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.


          1)Require 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.


          2)Specify that the provisions of the bill shall be 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, as  
            specified.


          3)Allow a city, county, or city and county to acquire property  
            in furtherance of the creation of an economic opportunity, and  
            may sell or lease property to create an economic opportunity.


          4)Delete statutory language that limits the authority to sell or  








                                                                     AB 806


                                                                    Page  3


            lease city-owned or county-owned property for economic  
            development purposes to property that is governed by a  
            long-range property management plan, thereby allowing 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.


          5)Require 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)Require 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.


          7)Make findings and declarations and additional clarifying and  
            conforming changes to state law.


          EXISTING LAW:  


          1)Prohibits counties and general law cities from making a gift  
            of public funds.


          2)Allows, generally, a city to dispose of real property in any  
            way it chooses if doing so is for the common benefit.  Allows  
            a city to 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, as specified:








                                                                     AB 806


                                                                    Page  4




             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; and,


             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.


          AS PASSED BY THE ASSEMBLY, this bill made various changes to  
          provisions of law governing former redevelopment agencies  
          (RDAs).


          FISCAL EFFECT:  None


          COMMENTS:  


          1)Bill Summary.  This bill clarifies that a city, county or city  
            and county may acquire, sell and lease property in furtherance  
            of the creation of an economic opportunity, and that such  
            authority extends to any property and not just property that  
            the city, county or city and county acquired from the  
            successor agency to the redevelopment agency under the long  
            range property management plan.










                                                                     AB 806


                                                                    Page  5


            This bill is sponsored by the City of Fairfield.


          2)Author's Statement.  According to the author, "In 2011 the  
            Governor and Legislature eliminated redevelopment agencies in  
            order to provide more property tax revenues to local taxing  
            agencies.  All redevelopment agencies in the State were  
            dissolved as of February 1, 2012. 


            "In 2013, the Legislature adopted SB 470 [(Wright), Chapter  
            659] to promote economic development on a local level, to give  
            local governments tools, at no cost to the state, that allow  
            local governments to use their funds in a manner that promotes  
            economic opportunity, and to provide cities, counties, and  
            cities and counties certain powers previously afforded to  
            redevelopment agencies that were critical to economic  
            development.


            "SB 470 declared that it is the policy of the State of  
            California to protect and promote the sound development of  
            economic opportunity in cities and counties.  That whenever  
            the creation of economic opportunity in cities and counties  
            cannot be accomplished by private enterprise alone, without  
            public participation and assistance in the acquisition of  
            land, in planning and in the financing of land assembly, in  
            the work of clearance, and in the making of improvements  
            necessary therefor, it is in the public interest to advance or  
            expend public funds for these purposes.  That the creation of  
            economic opportunity and the provisions for appropriate  
            continuing land use and construction policies with respect to  
            property acquired, in whole or in part, for economic  
            opportunity constitute public uses and purposes for which  
            public money may be advanced or expended and private property  
            acquired, and are governmental functions of state concern in  
            the interest of health, safety, and welfare of the people of  
            the state and cities and counties." 


          3)Support Arguments.  Supporters argue that this bill offers  
            communities additional tools that can be used to rehabilitate  








                                                                     AB 806


                                                                    Page  6


            deteriorated areas, attract and retain jobs, and improve local  
            quality of life.


          4)Opposition Arguments.  None on file.


          5)Gut-and-Amend.  The Assembly version of this bill was deleted  
            in the Senate, and consequently, the subject matter has not  
            been heard by an Assembly policy committee this legislative  
            session.


          Analysis Prepared by:                                             
                          Debbie Michel / L. GOV. / (916) 319-3958  FN:   
          0003809