BILL ANALYSIS
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|SENATE RULES COMMITTEE | AB 269|
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THIRD READING
Bill No: AB 269
Author: Mullin (D)
Amended: 6/29/04 in Senate
Vote: 21
SENATE HOUSING & COMM. DEV. COMMITTEE : 7-1, 6/21/04
AYES: Ducheny, Ackerman, Alarcon, Cedillo, Dunn, Florez,
Torlakson
NOES: Hollingsworth
ASSEMBLY FLOOR : 78-0, 1/29/04 - See last page for vote
SUBJECT : Redevelopment: San Mateo County
SOURCE : Author
DIGEST : This bill allows any redevelopment agency within
San Mateo County to participate in a joint powers authority
for the purpose of pooling their low- and moderate-income
housing fund for affordable housing.
ANALYSIS : Under the Community Redevelopment Law (CRL),
redevelopment agencies must set aside 20 percent of their
annual property tax increment revenues in a Low and
Moderate Income Housing Fund (L&M Fund) to increase,
improve, and preserve affordable housing. L&M Funds can be
used to buy land, build structures, buy buildings,
rehabilitate buildings, subsidize housing, pay bonds or
other indebtedness, maintain mobilehomes, preserve
subsidized units, replace destroyed housing units, and
other related uses.
CONTINUED
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Article XVI, Section 16 of the California Constitution
provides that tax increment which accrues to a
redevelopment agency must be used to pay indebtedness to
finance the "redevelopment project." As a general rule,
this is interpreted to mean that the use of tax increment
must benefit the project area. However, state law
specifically allows for L&M funds to be spent inside or
outside a project area, but within the territorial
jurisdiction of the agency, upon a finding that the use
will be of benefit to the project. This finding is
considered final and conclusive.
Current law also contains a number of exceptions to the
rule that L&M funds must be spent within the jurisdiction.
1.There is a general statute that, until January 1, 2008,
allows contiguous redevelopment agencies located within
adjoining cities within a single Metropolitan Statistical
Area to participate in a joint powers authority (JPA) for
the purpose of pooling their L&M funds for affordable
housing uses.
2.The Contra Costa County Redevelopment Agency may use its
L&M funds within the incorporated limits of the City of
Walnut Creek on sites contiguous to the Pleasant Hill
BART Station Area Redevelopment Project area.
3.The Orange County Development Agency may use its L&M
funds within the incorporated limits of any city within
the County of Orange.
4.The County of Solano and the Cities of Fairfield, Suisun
City and Vacaville may create a joint powers agency for
the purpose of pooling L&M funds in order to provide
housing for the retention of Travis Air Force Base.
Each of these exceptions is subject to a number of
conditions that ensure the efficient and beneficial use of
the funds and that the expenditure outside the jurisdiction
will not result in racial or economic segregation. Among
the conditions common to two or more of the exceptions are:
1.The community has an up-to-date housing element that has
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been approved by the State Department of Housing and
Community Development (HCD).
2.The agency has met at least 50 percent of its share of
the regional housing need for very low and low-income
households.
3.The agency has met its replacement housing need or
encumbered and contractually committed sufficient funds
to meet these requirements.
4.Funds may only be used to pay for the direct costs of
constructing, substantially rehabilitating, or preserving
the affordability of housing units and not for planning
and administration or offsite improvements.
5.The funds may only be used to finance housing that is
affordable to very low and low-income households.
6.The funds may not be spent in an area that has more than
50 percent minority or low-income.
7.The development to be funded shall not result in any
residential displacement from the site where the
development is to be built.
8.If less than all the units in the development are
affordable to, and occupied by, low- or moderate-income
persons, any agency assistance may not exceed the amount
needed to make the housing affordable to, and occupied
by, low- or moderate-income persons.
9.HCD shall review each use of funds for compliance.
With respect to individual exceptions, the following
conditions also apply, among others:
1.The agency does not have an indebtedness to its L&M fund.
2.The agency is not subject to sanctions for failure to
expand or encumber housing fund excess surplus.
3.The city in which the development will occur has approved
the agency's use of funds.
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4.The aggregate number of units assisted shall include at
least 10 percent that are affordable to extremely low
income households and 40 percent that are affordable to
very low income households.
5.The agency must make a finding that no other reasonable
means of financing the housing is available in sufficient
amount.
6.The agency shall transfer more than 50 percent of its L&M
funds.
This bill allows any redevelopment agency within San Mateo
County to participate in a joint powers authority for the
purpose of pooling L&M funds subject to the following
conditions:
Eligibility to Participate
1.The host jurisdiction of the agency must have a housing
element that is current and that has been certified by
HCD.
2.The host jurisdiction has met 40 percent of its regional
housing need for low and very low income households in
the current or previous housing element cycle.
3.The agency must not owe money to its L&M fund.
4.The agency must have met its replacement housing
obligation or contractually committed funds to meet those
obligations.
Transfer of Funds
1.No more than 25 percent of the agency's L&M funds may be
transferred to the JPA.
2.Each participating agency must hold a public hearing at
least 45 days prior to the transfer of L&M funds to the
JPA.
Expenditure of Funds by the JPA
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1.Funds must be used within the territorial jurisdiction of
a participating agency in San Mateo County on property
provided by the San Mateo County Transit Authority and
located within one-third mile of the Peninsula Corridor
Joint Powers Authority right-of-way.
2.Funds may only be used for the direct costs constructing,
substantially rehabilitating, or preserving the
affordability of low and very low income housing.
3.Funds may not be used for planning and administrative
costs, offsite improvements, or fees or exactions levied
solely on funded project.
4.Funds may not be used to construct a development in a
census tract that has more than 50 percent of its
population comprised of racial minorities or low-income
families.
5.HCD must verify each proposed use of funds to ensure
compliance with the provisions of this bill.
6.The JPA must expend or encumber and transferred within
two years. If not, the funds are returned to the donor
agency and deemed excess surplus.
7.The JPA must submit an annual report to HCD documenting
funds received and funds allocated or expended.
8.The JPA is subject to the replacement housing
requirements, relocation requirements, and all other
provisions that would otherwise apply to the use of L&M
funds by the agency directly.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
ASSEMBLY FLOOR :
AYES: Aghazarian, Bates, Benoit, Berg, Bermudez, Bogh,
Calderon, Campbell, Canciamilla, Chan, Chavez, Chu,
Cogdill, Cohn, Corbett, Correa, Cox, Daucher, Diaz,
Dutra, Dutton, Dymally, Firebaugh, Frommer, Garcia,
Goldberg, Hancock, Harman, Jerome Horton, Shirley Horton,
Houston, Jackson, Keene, Kehoe, Koretz, La Malfa, La
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Suer, Laird, Leno, Leslie, Levine, Lieber, Liu,
Longville, Lowenthal, Maddox, Maldonado, Matthews, Maze,
McCarthy, Montanez, Mountjoy, Mullin, Nakanishi, Nakano,
Nation, Negrete McLeod, Nunez, Oropeza, Pacheco, Parra,
Pavley, Plescia, Reyes, Richman, Ridley-Thomas, Runner,
Salinas, Samuelian, Simitian, Spitzer, Steinberg,
Strickland, Vargas, Wiggins, Wolk, Wyland, Yee
NO VOTE RECORDED: Haynes, Wesson
NC:cm 6/29/04 Senate Floor Analyses
SUPPORT/OPPOSITION: NONE RECEIVED
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