BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 530|
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THIRD READING
Bill No: SB 530
Author: Dutton (R)
Amended: 4/28/09
Vote: 21
SENATE LOCAL GOVERNMENT COMMITTEE : 4-0, 5/6/09
AYES: Wiggins, Cox, Kehoe, Wolk
NO VOTE RECORDED: Aanestad
SUBJECT : Redevelopment: payments to taxing entities
SOURCE : California Redevelopment Association
DIGEST : This bill applies the redevelopment pass-through
reporting and repayment requirements enacted by last year's
State Budget to redevelopment project areas that were
formed before January 1, 1994 and amended after January 1,
1994, as specified.
ANALYSIS : State law lets redevelopment agencies divert
other local governments' property tax increment revenues so
that they can fight physical and economic blight. To
alleviate the financial burden and detriment that these
other taxing entities may incur as a result of the adoption
of a redevelopment plan, redevelopment officials must
return a portion of their tax revenues from redevelopment
projects adopted or amended after January 1, 1994 to other
local taxing entities in the form of mandatory
"pass-through" payments (AB 1290, Isenberg, Chapter 942,
Statutes of 1993).
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SB 530
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This bill applies the redevelopment pass-through reporting
and repayment requirements enacted by last year's State
Budget to redevelopment project areas that were formed
before January 1, 1994 and amended after January 1, 1994
to:
1.Increase the limitation on the number of dollars to be
allocated to the agency, or
2.Increase, or eliminate the time limit on the establishing
of loans, advances, and indebtedness, pursuant to
specified statutes, or
3.Lengthen the period during which the redevelopment plan
is effective if the redevelopment plan being amended
contains specified provisions.
Comments
There is consensus among redevelopment officials, county
officials, and the State Controller's Office staff that
pre-1994 project areas that have been amended since 1994
were inadvertently omitted from the redevelopment language
in AB 1389, last year's budget trailer bill. This bill
corrects that error. However, significant disagreements
over the implementation and interpretation of last year's
redevelopment pass-through reporting and repayment
requirements remain unresolved. Discussions continue on
how to reconcile redevelopment agencies' last five years of
pass-through payments.
After reviewing the practices employed by school districts,
community colleges, and redevelopment agencies related to
the distribution and reporting of these pass-through
revenues, the California State Controller's Office issued a
report in May 2008 which found that:
1.Many school districts and community colleges understated
the amount of pass-through payments they receive from
redevelopment agencies.
2.Some redevelopment agencies failed to make their
mandatory pass-through payments.
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3.Redevelopment agencies made numerous reporting errors
which resulted in an understatement of pass-through
payments made to schools.
The State Controller estimated that the cumulative effect
of these problems resulted in an excess State General Fund
obligation to schools of $33.8 million in 2005-06 and $29.4
million in 2006-07.
In response to the Controller's report, a State Budget
trailer bill enacted procedures to identify and recover
pass-through payments that redevelopment agencies failed to
make to K-14 education agencies for fiscal years 2003-04
through 2007-08 and ensure proper payments in 2008-09 (AB
1389, Assembly Budget Committee, Chapter 751, Statutes of
2008).
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 5/11/09)
California Redevelopment Association (source)
AGB:nl 5/11/09 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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