BILL ANALYSIS
SB 93
Page 1
SENATE THIRD READING
SB 93 (Kehoe)
As Amended July 14, 2009
Majority vote
SENATE VOTE :34-0
LOCAL GOVERNMENT 7-0
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|Ayes:|Caballero, Knight, | | |
| |Arambula, Davis, Duvall, | | |
| |De La Torre, Skinner | | |
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SUMMARY : Distinguishes between the public works projects that a
redevelopment agency (agency) can finance inside and contiguous
to redevelopment project areas and the public works projects
that an agency can finance outside project areas. Specifically,
this bill :
1)Provides that an agency may, with the consent of the
legislative body, pay all or a part of the value of the land
for and the cost of the installation and construction of any
building, facility, structure, or other improvement that is
publicly owned and is located inside or contiguous to the
project area, if the legislative body determines all of the
following:
a) The acquisition of land or the installation or
construction of the buildings, facilities, structures, or
other improvements that are publicly owned are of benefit
to the project area by helping to eliminate blight within
the project area or providing housing for low- or
moderate-income persons;
b) No other reasonable means of financing the acquisition
of the land or installation or construction of the
buildings, facilities, structures, or other improvements
that are publicly owned, are available to the community;
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and,
c) The payment of funds for the acquisition of land or the
cost of buildings, facilities, structures, or other
improvements that are publicly owned is consistent with the
agency's adopted implementation plan.
2)Defines "contiguous" as the parcel on which the building,
facility, structure, or other improvement that is publicly
owned is located shares a boundary with the project area or is
separated from the project area only by a public street or
highway, flood control channel, waterway, railroad
right-of-way, or similar feature.
3)Authorizes an agency, with the consent of the legislative
body, to pay all or a part of the value of the land for and
the cost of the installation and construction of any building,
facility, structure, or other improvement that is publicly
owned and is located outside and not contiguous to the project
area, but is located within the community, if the legislative
body finds, based on substantial evidence in the record, all
of the following:
a) The acquisition of the land or the installation or
construction of the buildings, facilities, structures, or
other improvements that are publicly owned are of primary
benefit to the project area;
b) The acquisition of the land or the installation or
construction of the buildings, facilities, structures, or
other improvements that are publicly owned benefits the
project area by helping to eliminate blight within the
project area, or will directly assist in the provision of
housing for low- or moderate-income persons;
c) No other reasonable means of financing the acquisition
of the land or the installation or construction of the
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buildings, facilities, structures, or other improvements
that are publicly owned, are available to the community,
including, but not limited to, general obligation bonds,
revenue bonds, special assessment bonds, or bonds issued
pursuant to the Mello-Roos Community Facilities Act of
1982.
In determining whether other means of financing are
feasible, the legislative body may take into account any
relevant factors, including, but not limited to:
i) Legal factors, such as the eligibility of the
improvements for funding under the governing statutes;
ii) Economic factors, such as prevailing interest rates
and market conditions; and,
iii) Political factors, such as the priority of
commitments of other public funding sources, the ability
or willingness of property owners or taxpayers to bear
the cost of any special assessments, taxes, or other
charges, and the likelihood of obtaining voter approval,
if required.
d) The payment of funds for the acquisition of land or the
cost of buildings, facilities, structures, or other
improvements that are publicly owned is consistent with the
agency's adopted implementation plan; and,
e) The acquisition of land and the installation of each
building, facility, structure, or improvement that is
publicly owned is provided for in the redevelopment plan.
4)Specifies that an action to challenge the above findings
section shall be filed and served within 60 days after the
date of the resolution containing the findings.
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5)Prohibits the agency and legislative body from authorizing or
approving the settlement of any judicial action that contests
the validity of the adoption or amendment of a redevelopment
plan if the settlement requires the expenditure of funds
outside the project area unless the agency and the legislative
body have first held a public hearing on the proposed
settlement.
6)Establishes noticing requirements for the settlement hearing.
7)Prohibits an agency from paying for the normal maintenance or
operations of buildings, facilities, structures, or other
improvements that are publicly owned.
8)Repeals the requirement that an agency, with respect to the
financing, acquisition, or construction of a transportation,
collection, and distribution system and related peripheral
parking facilities, in a county with a population of four
million persons or more, enter into an agreement with the
rapid transit district that includes the county, or a portion
thereof, under which the rapid transit district is required to
be given specified responsibilities.
EXISTING LAW :
1)Authorizes an agency, with the consent of the legislative
body, to pay all or a part of the value of the land for, and
the cost of the installation and construction of, any
building, facility, structure, or other improvement that is
publicly owned either within or without the project area if
the legislative body determines that:
a) The public works benefit the project area or the
immediate neighborhood;
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b) No other reasonable means of financing are available;
and,
c) Paying for the public works helps eliminate blight
inside the project area or provides affordable housing and
is consistent with the agency's implementation plan.
2)States that the determinations made by the agency and the
local legislative body are final and conclusive.
3)Requires the agency, with respect to the financing,
acquisition, or construction of a transportation, collection,
and distribution system and related peripheral parking
facilities, in a county with a population of four million
persons or more, to enter into an agreement with the rapid
transit district that includes the county, or a portion
thereof, under which the rapid transit district is required to
be given specified responsibilities.
FISCAL EFFECT : None
COMMENTS : In May 2005, the San Diego City (City) Council
adopted a redevelopment plan for the 990-acre Grantville
Redevelopment Project Area. In July 2005, San Diego County
(County) sued, alleging that the area did not meet the statutory
tests for physical blight and economic blight; that the area was
not predominantly urbanized; and, that officials failed to show
that redevelopment was essential to eliminate any blight.
In June 2008, the County and City agreed to settle the lawsuit
challenging the Grantville Project Area. The San Diego
Redevelopment Agency will pay nearly $31.4 million from the
Grantville Project Area to the City for downtown transit line
improvements. The Centre City Development Corporation (the
quasi-government entity that manages redevelopment in downtown
San Diego) will pay the County nearly $31.4 million for the
North Embarcadero Project Improvements on County-owned property.
The Centre City Development Corporation reported that the
payments to the County will be 80% of the property tax revenues
that the County would have received from the Grantville Project
Area. The July 2008 formal settlement agreement noted that
state law allows redevelopment officials to pay for public works
outside the project area if local officials make determinations.
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At Senator Kehoe's request, the Attorney General reviewed the
settlement agreement and raised two issues. First, the Attorney
General questioned whether Grantville funds should pay for the
downtown trolley projects. Second, the Attorney General noted
that the settlement agreement "might also be construed as an
effort to bypass legal restrictions on the use of redevelopment
funds to settle litigation." In September 2008, a local
citizens group sued the City over the settlement agreement. The
case is pending and there is no trial date.
According to the author's office, this bill tightens up the
state's redevelopment law to make sure that projects paid for by
redevelopment agencies directly benefit the residents whose
property tax dollars are being used to support the agency's
work. The author believes that this bill will make
redevelopment agencies more accountable to California's
taxpayers and adhere to legislative intent.
Analysis Prepared by : Katie Kolitsos / L. GOV. / (916)
319-3958
FN: 0001901
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