BILL ANALYSIS Ó
AB 2031
Page 1
ASSEMBLY THIRD READING
AB
2031 (Bonta and Atkins)
As Amended March 17, 2016
Majority vote
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|Committee |Votes|Ayes |Noes |
| | | | |
| | | | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Housing |5-2 |Chiu, Burke, Chau, |Steinorth, Beth |
| | |Lopez, Mullin |Gaines |
| | | | |
|----------------+-----+----------------------+--------------------|
|Local |7-1 |Eggman, Waldron, |Linder |
|Government | |Mullin, Bonilla, | |
| | |Chiu, Cooley, Gordon | |
| | | | |
| | | | |
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SUMMARY: Authorizes a city or county that formed a
redevelopment agency (RDA) that has received a finding of
completion from Department of Finance (DOF), to bond against the
property tax revenues it receives as a result of redevelopment
dissolution for affordable housing purposes, without voter
approval. Specifically, this bill:
AB 2031
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1)Defines "affordable housing" to mean a dwelling available for
purchase or lease by persons and families who qualify as low-,
very low-, extremely low- and moderate income.
2)Defines "distributions of property tax revenues" to mean all
additional property tax revenues a city or county is entitled
to receive as a result of the dissolution of RDAs.
3)Defines "beneficiary district" to mean an affordable housing
special beneficiary district that exists for a limited
duration as a distinct local government entity for the
purposes of receiving the rejected distribution of property
tax revenues of a city or county and providing financial
assistance to promote affordable housing within its
boundaries.
4)Authorizes a city or county that formed a RDA and is the
successor agency that received a finding of completion after
dissolving its RDA from DOF to adopt an ordinance or
resolution to reject its distribution of property tax revenues
as a result of redevelopment dissolution.
5)Provides that once a city or county rejects its distribution
of property taxes and it is redirected to a beneficiary
district it has no claim or control over it except for its
role in governing the beneficiary district.
6)Requires the county auditor-controller upon request to
transfer all of a city's or county's rejected property taxes
to the beneficiary district.
7)Provides that a beneficiary district can only promote the
development of affordable housing within its boundaries.
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8)Allows a beneficiary district to promote the development of
affordable housing by doing any of the following:
a) Issuing bonds to be repaid from the property tax
revenues directed to the beneficiary district;
b) Providing financial assistance for the development of
affordable housing, including but not limited to, providing
loans, grants, and other financial incentives and support;
c) Taking other actions the board determines will promote
the development of affordable housing within its
boundaries;
d) Prohibits a beneficiary district from undertaking any
obligation that requires an action after the date it ceases
to exist including issuing a bond that requires any
repayment of the bond obligation.
9)Requires a beneficiary district to comply with the Ralph M.
Brown Act.
10)Provides that when a beneficiary district ceases to exist,
its public record will be the property of the city or county
that rejected its distribution of property tax proceeds.
11)Provides that beginning when a successor entity receives a
finding of completion, there exists within the same
geographical boundaries of the jurisdiction of the successor
agency a beneficiary district.
12)Provides that a beneficiary district ceases to exist on the
90th calendar day after the date that the county
auditor-controller makes the final transfer of distributed
property tax revenues to the beneficiary district.
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13)Provides that on or after the date a beneficiary district
ceases to exist the beneficiary district will no longer have
authority to conduct any business include but not limited to
taking an action or making any payment, and any funds of the
beneficiary district will automatically transfer to the city
or county that rejected its distribution of property tax
revenues that had been redirected to the beneficiary district.
14)Provides that any legal right of the beneficiary district on
or after the date that it ceases to exist, including but not
limited to, the right to repayment of a loan made by the
beneficiary district is the right of the city or county that
created it.
15)Provides that a beneficiary district will be governed by a
Board composed of the following five members:
a) Three members of the city council, if the city council
formed the RDA and become the successor agency to the RDA;
or
b) Three members of the county board of supervisors, if the
county formed the RDA and become the successor agency to
the RDA; and
c) The treasurer of the city or county that formed the RDA
and become the successor agency to the RDA; and
d) One member of the public who lives within the boundaries
of beneficiary district who is appointed by the city or
county that formed the RDA and become the successor agency.
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16)Provides that the Board members will serve a term of four
years from the date of appointment and vacancies on the Board
will be filled by the appointing authority for a new four year
term.
17)Provides that the Board will select one of its members as
chairperson.
18)Provides that Board members will serve without compensation.
19)Provides that the terms of the Board members expire once the
beneficiary district ceases to exist.
FISCAL EFFECT: None
COMMENTS:
In 2011, facing a severe budget shortfall, the Governor proposed
eliminating RDAs in order to deliver more property taxes to
other local agencies. Statewide, redevelopment redirected 12%
of property taxes away from schools and other local taxing
entities and into community development and affordable housing.
Ultimately, the Legislature approved and the Governor signed two
measures, AB 26 X1(Blumenfield), Chapter 5 and AB 27 X1
(Blumenfield), Chapter 6 that together dissolved RDAs as they
existed at the time and created a voluntary redevelopment
program on a smaller scale. In response the California
Redevelopment Association (CRA) and the League of California
Cities, along with other parties, filed suit challenging the two
measures. The Supreme Court denied the petition for peremptory
writ of mandate with respect to ABX1 26. However, the Court did
grant CRA's petition with respect to AB 27 X1. As a result, all
RDAs were required to dissolve as of February 1, 2012.
AB 2031
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When RDAs were dissolved, successor agencies were established to
wind down their obligations and responsibilities. Generally,
the city or county that formed the RDA serves as the successor
agency. Successor agencies are required to receive a "finding
of completion" from DOF. In order to receive a finding of
completion, a successor agency has to undergo due diligence
reviews and make required payments to DOF. Once it receives a
finding of completion, a successor agency has additional
discretion regarding former agency real property assets, loan
repayments to the local government community that formed the
agency, and use of proceeds from bonds issued by the former RDA.
RDAs froze the property tax rate at the time they were created
and captured any increase in property taxes to pay for their
activities. Dissolution redirected those property taxes into a
Redevelopment Property Tax Trust Fund (RPTTP) which the
county-auditor controller distributes to the taxing entities
including cities, counties, and special districts. This bill
would allow a city or county that serves as the successor agency
to a RDA that has received a finding of completion from DOF, to
redirect the property taxes it receives as a result of
redevelopment dissolution, also known as "boomerang funds," to a
beneficiary district. The boomerang funds would be redirected
before they are deposited into the city's or county's general
fund. A beneficiary district could bond against the revenues
from the boomerang funds, provide loans and grants for an
affordable housing development, or take other actions that the
board of the beneficiary district determines support the
development of affordable housing within its boundaries.
Because the property taxes are deposited into the beneficiary
district and not into the city's or county's general fund no
voter approval is required to allow the affordable housing
beneficiary district to bond against the income stream from the
ongoing property tax distribution. The geographic boundaries of
the affordable housing beneficiary district are limited to the
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jurisdiction of the city or county that serves as the successor
agency. A five member Board made of up three representatives of
either the city or county, the treasurer of the city or county,
and one member of the public would oversee the activities of a
housing beneficiary district. Once the duties of the successor
agency are complete and all of the bonds and obligations of the
former RDA are paid then the beneficiary district would cease to
exist and any money held by the beneficiary district will
transfer to the city or county that created it.
Purpose of this bill: According to the author, "the proposal is
to give cities and counties the authority to approve issuance of
affordable housing bonds to be paid for with any portion of its
"net available revenue" without voter approval. The net
available revenue is referred to as "boomerang funds"
distributed by the county auditor-controller to cities from the
Redevelopment Property Tax Trust Fund (RPTTF). There is no
fiscal impact to the State's general fund and no property taxes
would be diverted from the other taxing entities."
Analysis Prepared by:
Lisa Engel / H. & C.D. / (916) 319-2085 FN:
0002936