BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                     AB 806


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          Date of Hearing:  August 25, 2016


                       ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT


                           Susan Talamantes Eggman, Chair


          AB 806  
          (Dodd) - As Amended August 8, 2016


          SUBJECT:  Community development:  economic opportunity


          SUMMARY:  Allows 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  
            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:










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             a)   Governed by a long-range property management plan  
               pursuant to redevelopment law; and,


             b)   A housing asset of a former redevelopment agency that is  
               transferred to a city, county, or city and county, 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 shall be  
            subject to 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  
            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.








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          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:


             a)   A county board of supervisors must, by a two-thirds  
               vote, adopt a resolution in a regular open meeting  








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               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 or 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 or  
            county acquired from the successor agency to the redevelopment  
            agency under the long range property management plan.


            This bill is sponsored by the City of Fairfield and the League  








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            of California Cities.


          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 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  








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            cities and counties. 





          3)Support Arguments.  Supporters argue that this bill offers  
            communities additional tools that can be used to rehabilitate  
            deteriorated areas, attract and retain jobs, and improve local  
            quality of life.


          4)Opposition Arguments.  None on file.


          REGISTERED SUPPORT / OPPOSITION:




          Support


          City of Fairfield [SPONSOR]


          League of California Cities [SPONSOR]


          California Association for Local Economic Development


          Cities of:


            Azusa, Camarillo, Commerce, Fountain Valley, Industry, Los  
            Alamitos, Napa, Norwalk, Redding, and Vacaville










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          Fairfield-Suisun Chamber of Commerce


          Lystek International, Ltd.




          Opposition


          None on file




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