BILL ANALYSIS Ó
SB 107
Page 1
(Without Reference to File)
SENATE THIRD READING
SB
107 (Committee on Budget and Fiscal Review)
As Amended September 10, 2015
Majority vote
SENATE VOTE: 23-13
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|Committee |Votes|Ayes |Noes |
| | | | |
| | | | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Budget |16-11|Weber, Bloom, Bonta, |Melendez, Travis |
| | |Campos, Chiu, Cooper, |Allen, Bigelow, |
| | |Gordon, |Chávez, Grove, |
| | | |Jones, Kim, Lackey, |
| | | |Obernolte, |
| | |Jones-Sawyer, |Patterson, Wilk |
| | |McCarty, Mullin, | |
| | |Nazarian, O'Donnell, | |
| | |Rodriguez, Thurmond, | |
| | |Ting, Williams | |
| | | | |
SB 107
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| | | | |
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SUMMARY: Includes a statutory provision related to
redevelopment and local government necessary to enact the 2015
Budget Act. Specifically, this bill:
1)Provides that the Department of Finance (department) is
exempted from the Administrative Procedures Act for the
purposes of implementing the Redevelopment Dissolution Act.
2)Defines "administrative cost allowance" to mean the maximum
amount of administrative costs that may be paid by a successor
agency (SA) from the Redevelopment Property Tax Trust Fund
(RTTPF) in a fiscal year.
3)Creates a new administrative cost calculation. If the
enforceable obligations (EO) are less than $250,000 per year,
then the administrative allowance shall equal only 50% of the
EOs, unless that cost is reduced by the oversight board or by
agreement between the SA and the department.
4)Requires the administrative cost allowance to be approved by
the oversight board.
5)States that prospectively, any legal costs challenging the
redevelopment agencies (RDA) law shall only be paid out of the
administrative cost allowance. Additionally, it states that
if the successor agency obtains a final judicial determination
granting the relief, then the funds provided by the sponsoring
entity to pay legal costs will be an EO. If relief is not
granted, then the funds will not be an EO.
6)Allows written agreements entered into at the time of
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issuance, but no later than June 27, 2011, for the purpose of
solely refunding or refinancing bonds, to be considered EOs.
7)Specifies that an agreement entered into by the RDA prior to
June 28, 2011, is an EO if the agreement relates to state
highway infrastructure improvements which the RDA committed
funds.
8)Specifies that an agreement between the city, county, or city
and county that created the former RDA and the former RDA
agency is an EO if that agreement requires the former RDA to
repay or fulfill an outstanding loan or development obligation
imposed by a federal agency, including the United States
Department of Housing and Urban Development.
9)Defines "Annual Recognized Obligation Payment Schedule
(ROPS)," beginning on or after July 1, 2016, to mean the
document setting forth the minimum payment amounts and due
dates of payments required by EOs.
10)Continues to only allow a city, county, or city and county
that authorized the RDA to loan or grant funds to a SA when
there is insufficient distribution of the RPTTF. States that
these loans are subject to the Local Agency Investment Fund
(LAIF) rate.
11)Extends the date from January 1, 2011, to June 28, 2011,
regarding the use of proceeds (including bond proceeds) that
can be derived from indebtedness obligations that were issued
for affordable housing and were backed by the Low and Moderate
Income Housing Fund. Includes intent language specifying that
the Legislature is authorizing housing successors to designate
the use of and commit 100% of indebtedness obligation
proceeds.
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12)Clarifies annual reporting requirements for the low and
moderate income housing asset fund.
13)States that items on a ROPS that the subject of litigation
may not be addressed during the meet and confer process.
14)Creates the process for an annual ROPS process beginning on
or after July 1, 2016.
15)Allows for ROPS payments to be scheduled beyond the ROPS
cycle if a lender requires cash on hand beyond the ROPS cycle.
16)States that the work of winding down the RDA does not
includes specified activities except as required by an EO.
17)Establishes a 100-day timeframe for the department to review
"final and conclusive" EO requests.
18)Allows the SA of the City and County of San Francisco to
issue bonds and incur other indebtedness to meet affordable
housing obligations.
19)Adds the following as valid agreement and binds the SA:
a) A written agreement entered into at the time of issuance
but in no later than June 27, 2011, of bonds for the
refunding or refinancing of bonds that existed prior to
January 1, 2011, and solely for the purpose of securing or
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repaying bonds.
20)Makes additional clarifications to re-entered agreements.
21)Sets up a process for alternate members to serve on oversight
boards.
22)Clarifies what oversight board actions do not need to be
submitted to the department for approval.
23)Moves the countywide oversight board transition date from
July 1, 2016, to July 1, 2018.
24)Clarifies that oversight board cease to exist when all the
SAs are dissolved.
25)Creates five oversight boards for the County of Los Angeles
aligned with the County Board of Supervisors districts to
serve as the county wide oversight boards beginning July 1,
2018.
26)Creates a flexible process for SA to get a Finding of
Completion (FOC) through a payment plan with the department
for any outstanding due diligence review (DDR) obligations.
Under existing law, if a SA fails to pay DDR obligations by
December 31, 2015, or fails to establish a payment plan, then
they will be ineligible for an FOC.
27)Adds in language regarding the legal obligation of sponsoring
entities to return RDA assets when ordered to do so, provided
that those assets were not transferred pursuant to an EO.
28)Expands the definition of governmental purpose to include
parking facilities and lots dedicated solely to public
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parking.
29)Allows payments in support of pension programs or in support
of capital programs and programs related to the State Water
Project to go back to the source, so long as these were not
pledged as a security for the payment of any indebtedness
obligation and needed for payment thereof.
30)Defines the process and timelines for the submission and
review of prior period adjustments during the Annual ROPS
process.
31)Defines the final SA dissolution process, and the actions
required to be performed by the various parties.
32)Removes the statutory time limits and caps on the amount of
tax increment collected by a SA for the purposes of paying
enforceable obligations, which includes paying loans approved
in the FOC section.
33)Allows a SA to amend only once it's Long Range Property
Management Plan (LRPMP) prior to January 1, 2016, to include
parking facilities and lots as defined.
a) Provides that parking facilities and lots dedicated
solely to public parking do not include properties that, as
of the date of the transfer pursuant to the LRPMP, generate
revenues in excess of reasonable maintenance costs of the
properties.
b) States that a city, county, city and county, or parking
district shall not be required to reimburse or pay a SA for
any funds spent on or before December 31, 2010, by a former
RDA to design or construct a parking facility.
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34)Defines "loan agreements" to mean all of the following:
a) Loans for money. Loans for money entered into between
the RDA and the city, county, or city and county that
created the RDA under which the city, county, or city and
county that created the RDA transferred money to the RDA
for use by the RDA for a lawful purpose, and where the RDA
was obligated to pay the money it received pursuant to a
required repayment schedule.
b) Transfer of Real Property. An agreement between the RDA
and the city, county, or city and county that created the
RDA under which the city, county, or city and county
transferred a real property interest to RDA for a lawful
purpose and the RDA was obligated to pay the city, county,
or city and county that created the RDA for the real
property interest.
c) Third Party Agreements for infrastructure. An agreement
between the RDA and the city, county, or city and county
that created the RDA under which the city, county, or city
and county that created the RDA contracted with a third
party on behalf of the RDA for the development of
infrastructure in connection with a RDA project as
identified in a redevelopment plan and the RDA was
obligated to reimburse the city, county, or city and county
the payments made to the third party. Adds a cap of $5
million per agency for third party infrastructure loan
repayments to a city, county, or city and county.
35)Provides that sponsoring entity loans may be repaid at 3%
interest rate calculated from the date of origination of the
loan as approved by the RDA on quarterly basis, instead of the
LAIF rate. Requires moneys to be repaid first to the
principal, and second to the interest.
36)Requires distributions to the Low and Moderate Income Housing
Asset Fund to be subject to annual reporting requirements.
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37)Creates a process to use some of the proceeds from the 2011
bonds as follows:
a) No more than 5% of the proceeds may be expended unless
the SA meets the following criteria:
i) If the SA has an approved Last and Final ROPS, the
agency may expend no more than 20% of the proceeds.
ii) Creates a process that the earlier that the bonds
were issued in 2011, the more the SA is able to expend,
ranging from 45% to 20%.
b) If a SA provides the oversight board and the department
with documentation that proves that the bonds were approved
by the former RDA prior to January 31, 2011, but the
issuance of the bonds were delayed by the action of a
third-party metropolitan regional transportation authority
beyond January 31, 2011, the SA may expend the associated
bond proceeds for a total of no more than 45%.
c) Any proceeds derived from bonds issued by former RDA
after December 31, 2010, that were issued to refund or
refinance tax-exempt bonds issued by former RDAs on or
before December 31, 2010, and are in excess of the amount
needed to refund or refinance may be expended by the SA for
a total of no more than 45%. The SA must provide the
oversight board and department the resolution by the former
RDA approved the bonds.
d) Applies this section retroactively to actions on or
after June 28, 2011.
e) Specifies that any changes to the section regarding the
definition of loans will not result in the denial of a loan
that has previously been approved by the department prior
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to the effective date of this bill.
38)Includes language that this subdivision does not impact
pending lawsuits including the City of Watsonville v.
California Department of Finance and the City of Glendale v.
California Department of Finance.
39)Requires a SA that does not have a RDA property to dispose of
to submit a LRPMP certifying that they do not have properties.
40)Allows compensation agreements to be arranged by the impacted
taxing entity subsequent to the approval of the LRPMP.
41)Requires the department to consider whether the LRPMPs make
good faith efforts to properly dispose of property.
42)Requires the department to approve LRPMPs as expeditiously as
possible.
43)States that oversight board action to dispose of property per
a previously approved LRPMP does not require the department's
approval.
44)Beginning January 1, 2016, SAs may submit a Last and Final
ROPS for approval by the oversight board and the department if
the following conditions are met:
a) The remaining debt of the SA is limited to
administrative costs and payments pursuant to EOs with
defined payment schedules
b) All remaining obligations have been previously listed on
a ROPS and approved for payment by the department
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c) The SA is not party to outstanding or unresolved
litigation. SAs that are party to the two cases involving
the Los Angeles Unified School District v County of Los
Angeles may submit a Last and Final ROPS.
45)Requires the Last and Final ROPS to list the following:
a) EOs to be funded from the Redevelopment Property Tax
Trust Fund
b) EOs to be funded from bond proceeds or EOs required to
be funded from other legally or contractually dedicated or
restricted funding sources
c) Loans or deferrals authorized for repayment pursuant to
Health and Safety Code Section 34171 (d), paragraph (1),
subparagraph (G) and Health and Safety Code Section
34191.4.
46)Increases the interest rate to 4% for any SA who enters into
a Last and Final ROPS and have outstanding loans or deferrals
pursuant to Health and Safety Code Section 34171 (d),
paragraph (1), subparagraph (G) and Health and Safety Code
Section 34191.4.
47)Requires the department to review the Last and Final ROPS
within 100 days. Allows for amendments to the Last and Final
ROPS only if the changes are agreed to by the successor agency
in writing. If no agreement, the department shall issue a
letter denying the Last and Final ROPS.
48)Allows SA to submit no more than two requests to the
department to amend the approved Last and Final ROPS.
Requests must first be approved by the oversight board and
then submitted to the department. Does not limit the number
of Last and Final amendments requests that comply with final
judicial determinations related to the LAUSD cases.
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49)Allows SA to amend or modify existing contracts or agreements
identified in the Last and Final so long as the changes do
not: accelerate or increase payments in any ways; extend the
timeline of the Last and Final, or increase the amount,
directly or indirectly, of RTTPF allocated to the SA.
50)Addresses on-going negative bailout issues for Stanislaus,
Plumas, Trinity, and Lassen Counties.
51)Addresses past property tax apportionment factors for San
Benito County.
52)Ends the requirement for four cities in Santa Clara County to
reimburse the County ERAF for the Tax Equity Allocations (TEA)
over a five-year period.
53)Appropriates $23,750,000 from the General Fund to the
Department of Forestry and Fire Protection in order to forgive
monies owed by the newly formed Cities of Jurupa Valley,
Menifee, and Wildomar for services rendered by the County of
Riverside.
FISCAL EFFECT: Statutory changes contained in this bill related
to state costs are consistent with the 2015-16 budget package.
COMMENTS:
The provisions related to the litigation costs paid out of the
administrative cost budget shall not in any way prohibit a
nonprofit from collecting payment for attorney fees, should the
nonprofit be successful in its lawsuits.
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The trailer bill language provides the necessary statutory
references to enact the 2015-16 Budget related to redevelopment
and local government.
Analysis Prepared by:
Genevieve Morelos / BUDGET /916-319-2099 FN:
0002418