BILL ANALYSIS
AB 2531
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CONCURRENCE IN SENATE AMENDMENTS
AB 2531 (Fuentes)
As Amended August 3, 2010
Majority vote
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|ASSEMBLY: |49-25|(June 2, 2010) |SENATE: |22-13|(August 12, |
| | | | | |2010) |
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Original Committee Reference: H. & C.D.
SUMMARY : Gives redevelopment agencies additional authority to
provide loans, loan guarantees and other financial assistance to
businesses, assist nonprofits and public agencies to establish
small business incubators, and clarifies the City of Los
Angeles' authority to apply for and administer federal funding
for economic development. Specifically, this bill :
The Senate amendments :
1)Extend the sunset date on the provisions of the bill by two
years, from January 1, 2016 to January 1, 2018.
2)Requires a redevelopment agency to adopt a resolution on or
before July 1 of each fiscal year if they plan to engage in
activities authorized by this bill. For the 2010-2011 fiscal
year, redevelopment agency must adopt the resolution on or
before February 1, 2011.
3)Requires the resolution to include the following findings:
a) The community has a housing element that is in
substantial compliance as determined by the Department of
Housing & Community Development (HCD).
b) During the three fiscal years prior to the resolution,
the redevelopment agency has not been included in the list
of agencies that have failed to correct major audit
violations as determined by the Office of State Controller.
c) The redevelopment agency has not accumulated an excess
surplus in their Low- and Moderate- Income Housing Fund
(L&M Fund).
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4)Adds legislative findings that the purpose of this bill is to
clarify existing law and to provide redevelopment agencies
with additional, temporary authority to assist business in
order to encourage the retention of exiting employment
opportunities and attract new employment opportunities.
5)Require a redevelopment agency to impose covenants or
restrictions on machinery, equipment or personal property that
is purchased through redevelopment funds, to ensure that it
remain in the project area.
6)Requires the Legislative Analyst, on or before January 1,
2010, to design a study to measure and evaluate the
effectiveness of this Act.
7)Requires a redevelopment agency that carries out activities
and programs authorized by this Act, to submit to the
Legislative Analyst Office (LAO), on or before December 1,
2016, information describing their efforts within each project
area, for each fiscal year after January 1, 2012 and before
January 1, 2016.
8)Requires the LAO to submit a report to the Legislature on how
agencies used the authority provided by this Act by January 1,
2017.
9)Make technical and clarifying changes.
AS PASSED BY THE ASSEMBLY , this bill was substantially similar
to the version passed by the Senate.
FISCAL EFFECT : No immediate state effects, since the bill does
not authorize new redevelopment, extend the life of existing
redevelopment, or revise criteria for establishing a
redevelopment agency. Potential long term effects on property
tax revenue growth to the extent that non-traditional uses of
tax increment funds (i.e., job training) result in less brick
and mortar investment, and hence less property tax growth in
redevelopment project areas over time. Such impacts could
affect other local agencies (i.e., counties and schools) once
redevelopment areas expire and the increment property taxes are
allocated back to the underlying local jurisdictions.
COMMENTS : Legislative findings declare that the fundamental
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purpose of redevelopment is to "expand the supply of low- and
moderate-income housing, employment opportunities and provide an
environment for social, economic and psychological growth and
well-being for all citizens."
Under existing law, redevelopment agencies can use tax increment
to rehabilitate commercial buildings or structures with in the
project area and to assist businesses in the financing of
capital equipment provided that the development or
rehabilitation of the property will be used for an industrial or
manufacturing use. Redevelopment agencies can also make loans to
businesses to rehabilitate commercial buildings or structures in
a project area.
This bill would expand redevelopment agencies authority to
provide loans, loan guarantees and other financial assistance to
businesses in redevelopment project areas for industrial and
manufacturing uses if the assistance is intend to retain or
expand the number persons employed. The financial assistance
could be used by businesses to purchase or replace machinery or
equipment in their facility if it achieves any of the following:
a) Reduce emissions of greenhouse gases;
b) Increase the use of clean, renewable, or alternative
energy;
c) Increase energy efficiency;
d) Increase the use of recycled and locally sourced
materials;
e) Increase the efficiency in water, wastewater and
storm water systems;
f) Increase the efficiency of construction methods;
g) Reduce demolition and construction-induced pollution
and waste material generation;
h) Improve indoor air quality;
i) Reduce building operation costs through increased
operation and maintenance efficiency; or,
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j) Reduce public infrastructure costs related to
development.
Job training and placement: Under existing law, redevelopment
is to be used for the "bricks and mortar" necessary to improve a
project area and eliminate blight. This bill would expand
redevelopment agencies authority to expend tax increment on job
training and apprenticeship programs. The bill also gives
redevelopment agencies the authority to construct buildings for
industrial or manufacturing uses that will allow for job
training and job placement.
Business incubators: Up until 1999, redevelopment agencies in
Long Beach, Healdsburg, Los Angeles, Oakland, and Signal Hill
were allowed to assist non-profits and public agencies in
establishing small business incubators, including provided loan
guarantees for small business in the project area. This bill
reestablishes this authority for all redevelopment agencies in
the state.
Federal funding for economic development: This bill also gives
the City of Los Angeles clear authority to apply for and accept
federal funding for economic development and to spend the funds
either inside or outside the project area. According to the
sponsor, the staff with expertise to apply for federal economic
grants and to implement the programs associated with the funds
is redevelopment agency staff. The bill is intended to clarify
that redevelopment staff can be used for this purpose.
The purpose of this bill: According to the sponsor, the City of
Los Angeles, this bill is an effort to expand the ability of
redevelopment agencies to create jobs in the emerging green
sector and create green sustainable communities. Under existing
law, redevelopment agencies have authority to provide financial
assistance to business and property owner to promote job
retention or expansion in connection with sustainable
manufacturing and industrial uses. The sponsor states that this
bill is in intended to "clarify and expand the authority of a
redevelopment agency to provide financial assistance to property
owners and business tenants to retrofit and rehabilitate
buildings in a redevelopment project area to retain or expand
manufacturing and industrial."
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Analysis Prepared by : Lisa Engel / H. & C.D. / (916) 319-2085
FN: 0005616