BILL NUMBER: AB 1080	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Obernolte

                        FEBRUARY 27, 2015

   An act to amend Section 34171 of the Health and Safety Code,
relating to redevelopment.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1080, as introduced, Obernolte. Redevelopment: enforceable
obligations: military base reuse.
   Existing law dissolved redevelopment agencies and community
development agencies as of February 1, 2012, and provides for the
designation of successor agencies to wind down the affairs of the
dissolved redevelopment agencies, subject to review by oversight
boards, and to, among other things, make payments due for enforceable
obligations and to perform obligations required pursuant to any
enforceable obligation. Existing law defines "enforceable obligation"
for these purposes to generally exclude any agreements, contracts,
or arrangements between the city, county, or city and county that
created the redevelopment agency and the former redevelopment agency.

   The Military Base Reuse Authority Act authorizes the creation of a
military base reuse authority to plan, finance, and manage the
transition of a military base from military to civilian use, as
specified.
   This bill would authorize the Department of Finance to find that
an agreement between a former redevelopment agency and a joint powers
authority that was created to exercise the powers provided by the
Military Base Reuse Authority Act is an enforceable obligation.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 34171 of the Health and Safety Code is amended
to read:
   34171.  The following terms shall have the following meanings:
   (a) "Administrative budget" means the budget for administrative
costs of the successor agencies as provided in Section 34177.
   (b) "Administrative cost allowance" means an amount that, subject
to the approval of the oversight board, is payable from property tax
revenues of up to 5 percent of the property tax allocated to the
successor agency on the Recognized Obligation Payment Schedule
covering the period January 1, 2012, through June 30, 2012, and up to
3 percent of the property tax allocated to the Redevelopment
Obligation Retirement Fund money that is allocated to the successor
agency for each fiscal year thereafter; provided, however, that the
amount shall not be less than two hundred fifty thousand dollars
($250,000), unless the oversight board reduces this amount, for any
fiscal year or such lesser amount as agreed to by the successor
agency. However, the allowance amount shall exclude, and shall not
apply to, any administrative costs that can be paid from bond
proceeds or from sources other than property tax. Administrative cost
allowances shall exclude any litigation expenses related to assets
or obligations, settlements and judgments, and the costs of
maintaining assets prior to disposition. Employee costs associated
with work on specific project implementation activities, including,
but not limited to, construction inspection, project management, or
actual construction, shall be considered project-specific costs and
shall not constitute administrative costs.
   (c) "Designated local authority" shall mean a public entity formed
pursuant to subdivision (d) of Section 34173.
   (d) (1) "Enforceable obligation" means any of the following:
   (A) Bonds, as defined by Section 33602 and bonds issued pursuant
to Chapter 10.5 (commencing with Section 5850) of Division 6 of Title
1 of the Government Code, including the required debt service,
reserve set-asides, and any other payments required under the
indenture or similar documents governing the issuance of the
outstanding bonds of the former redevelopment agency. A reserve may
be held when required by the bond indenture or when the next property
tax allocation will be insufficient to pay all obligations due under
the provisions of the bond for the next payment due in the following
half of the calendar year.
   (B) Loans of moneys borrowed by the redevelopment agency for a
lawful purpose, to the extent they are legally required to be repaid
pursuant to a required repayment schedule or other mandatory loan
terms.
   (C) Payments required by the federal government, preexisting
obligations to the state or obligations imposed by state law, other
than passthrough payments that are made by the county
auditor-controller pursuant to Section 34183, or legally enforceable
payments required in connection with the agencies' employees,
including, but not limited to, pension payments, pension obligation
debt service, unemployment payments, or other obligations conferred
through a collective bargaining agreement. Costs incurred to fulfill
collective bargaining agreements for layoffs or terminations of city
employees who performed work directly on behalf of the former
redevelopment agency shall be considered enforceable obligations
payable from property tax funds. The obligations to employees
specified in this subparagraph shall remain enforceable obligations
payable from property tax funds for any employee to whom those
obligations apply if that employee is transferred to the entity
assuming the housing functions of the former redevelopment agency
pursuant to Section 34176. The successor agency or designated local
authority shall enter into an agreement with the housing entity to
reimburse it for any costs of the employee obligations.
   (D) Judgments or settlements entered by a competent court of law
or binding arbitration decisions against the former redevelopment
agency, other than passthrough payments that are made by the county
auditor-controller pursuant to Section 34183. Along with the
successor agency, the oversight board shall have the authority and
standing to appeal any judgment or to set aside any settlement or
arbitration decision.
   (E) Any legally binding and enforceable agreement or contract that
is not otherwise void as violating the debt limit or public policy.
However, nothing in this act shall prohibit either the successor
agency, with the approval or at the direction of the oversight board,
or the oversight board itself from terminating any existing
agreements or contracts and providing any necessary and required
compensation or remediation for such termination. Titles of or
headings used on or in a document shall not be relevant in
determining the existence of an enforceable obligation.
   (F) Contracts or agreements necessary for the administration or
operation of the successor agency, in accordance with this part,
including, but not limited to, agreements concerning litigation
expenses related to assets or obligations, settlements and judgments,
and the costs of maintaining assets prior to disposition, and
agreements to purchase or rent office space, equipment and supplies,
and pay-related expenses pursuant to Section 33127 and for carrying
insurance pursuant to Section 33134.
   (G) Amounts borrowed from, or payments owing to, the Low and
Moderate Income Housing Fund of a redevelopment agency, which had
been deferred as of the effective date of the act adding this part;
provided, however, that the repayment schedule is approved by the
oversight board. Repayments shall be transferred to the Low and
Moderate Income Housing Asset Fund established pursuant to
subdivision (d) of Section 34176 as a housing asset and shall be used
in a manner consistent with the affordable housing requirements of
the Community Redevelopment Law (Part 1 (commencing with Section
33000)).
   (2) For purposes of this part, "enforceable obligation" does not
include any agreements, contracts, or arrangements between the city,
county, or city and county that created the redevelopment agency and
the former redevelopment agency. However, written agreements entered
into (A) at the time of issuance, but in no event later than December
31, 2010, of indebtedness obligations, and (B) solely for the
purpose of securing or repaying those indebtedness obligations may be
deemed enforceable obligations for purposes of this part.
Notwithstanding this paragraph, loan agreements entered into between
the redevelopment agency and the city, county, or city and county
that created it, within two years of the date of creation of the
redevelopment agency, may be deemed to be enforceable obligations.
   (3) Contracts or agreements between the former redevelopment
agency and other public agencies, to perform services or provide
funding for governmental or private services or capital projects
outside of redevelopment project areas that do not provide benefit to
the redevelopment project and thus were not properly authorized
under Part 1 (commencing with Section 33000) shall be deemed void on
the effective date of this part; provided, however, that such
contracts or agreements for the provision of housing properly
authorized under Part 1 (commencing with Section 33000) shall not be
deemed void. 
   (4) The department may determine that an agreement between a
former redevelopment agency and a joint powers authority that was
created to exercise the powers provided by the Military Base Reuse
Authority Act (Title 7.86 (commencing with Section 67800) of the
Government Code) is an enforceable obligation. 
   (e) "Indebtedness obligations" means bonds, notes, certificates of
participation, or other evidence of indebtedness, issued or
delivered by the redevelopment agency, or by a joint exercise of
powers authority created by the redevelopment agency, to third-party
investors or bondholders to finance or refinance redevelopment
projects undertaken by the redevelopment agency in compliance with
the Community Redevelopment Law (Part 1 (commencing with Section
33000)).
   (f) "Oversight board" shall mean each entity established pursuant
to Section 34179.
   (g) "Recognized obligation" means an obligation listed in the
Recognized Obligation Payment Schedule.
   (h) "Recognized Obligation Payment Schedule" means the document
setting forth the minimum payment amounts and due dates of payments
required by enforceable obligations for each six-month fiscal period
as provided in subdivision (m) of Section 34177.
   (i) "School entity" means any entity defined as such in
subdivision (f) of Section 95 of the Revenue and Taxation Code.
   (j) "Successor agency" means the successor entity to the former
redevelopment agency as described in Section 34173.
   (k) "Taxing entities" means cities, counties, a city and county,
special districts, and school entities, as defined in subdivision (f)
of Section 95 of the Revenue and Taxation Code, that receive
passthrough payments and distributions of property taxes pursuant to
the provisions of this part.
   (l) "Property taxes" include all property tax revenues, including
those from unitary and supplemental and roll corrections applicable
to tax increment.
   (m) "Department" means the Department of Finance unless the
context clearly refers to another state agency.
   (n) "Sponsoring entity" means the city, county, or city and
county, or other entity that authorized the creation of each
redevelopment agency.
   (o) "Final judicial determination" means a final judicial
determination made by any state court that is not appealed, or by a
court of appellate jurisdiction that is not further appealed, in an
action by any party.
   (p) From July 1, 2014, to July 1, 2018, inclusive, "housing entity
administrative cost allowance" means an amount of up to 1 percent of
the property tax allocated to the Redevelopment Obligation
Retirement Fund on behalf of the successor agency for each applicable
fiscal year, but not less than one hundred fifty thousand dollars
($150,000) per fiscal year.
   (1) If a local housing authority assumed the housing functions of
the former redevelopment agency pursuant to paragraph (2) or (3) of
subdivision (b) of Section 34176, then the housing entity
administrative cost allowance shall be listed by the successor agency
on the Recognized Obligation Payment Schedule. Upon approval of the
Recognized Obligation Payment Schedule by the oversight board and the
department, the housing entity administrative cost allowance shall
be remitted by the successor agency on each January 2 and July 1 to
the local housing authority that assumed the housing functions of the
former redevelopment agency pursuant to paragraph (2) or (3) of
subdivision (b) of Section 34176.
   (2) If there are insufficient moneys in the Redevelopment
Obligations Retirement Fund in a given fiscal year to make the
payment authorized by this subdivision, the unfunded amount may be
listed on each subsequent Recognized Obligation Payment Schedule
until it has been paid in full. In these cases the five-year time
limit on the payments shall not apply.