BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 863|
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UNFINISHED BUSINESS
Bill No: SB 863
Author: Senate Budget and Fiscal Review Committee
Amended: 10/7/10
Vote: 27 - Urgency
PRIOR VOTES NOT RELEVANT
ASSEMBLY FLOOR : Not available
SUBJECT : Williamson Act revisions: redevelopment
agencies
SOURCE : Author
DIGEST : Assembly Amendments delete the Senate version of
the bill expressing the intent of the Legislature to enact
statutory changes relating to the Budget Act of 2010.
This bill now makes various changes to state laws governing
local government contracts entered into pursuant to the
Williamson Act and state laws governing community
redevelopment agencies.
ANALYSIS :
This bill:
1. Makes changes to existing laws governing the revision of
Williamson Act contracts with landowners. Recently
adopted law authorizes a county to revise the term of
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Williamson Act contracts with landowners and allow for a
reassessment of the property in any fiscal year in which
payments from the state to the county as reimbursement
for reduced property tax revenue are less than half of
the actual amount of reduced property tax revenue. This
bill reenacts that law and adds an urgency clause. In
addition, this bill adds clarifications and
administrative direction to counties. This bill
provides a county's determination regarding forgone
revenues shall be based on the higher of the county's
share of the general property tax or 20 percent. This
bill also:
A. Allows the contract term to be extended up to
three years as necessary to restore the contract to
its full length if increased revenue is not realized
by the county.
B. Establishes that the additional assessed value due
to the revised contract is 10 percent of the
difference between the restricted value under the
original contract and the adjusted base year value.
C. Provides that landowners may choose not renew
their contract at any time, but a landowner who
withdraws prior to the effective date shall be
subject to term modification and additional assessed
value.
2. Provides relief from penalties for redevelopment
agencies that experienced a substantial reduction in
their tax increment in the 2009-10 fiscal year which
prevented them from paying their share of last year's
contribution to the Educational Revenue Augmentation
Fund (ERAF). The penalties would include a prohibition
on issuing new debt to finance new projects. In order
to qualify for such relief, the redevelopment agency
must have adopted a resolution revealing specified
financial data to show they could not pay; the county
reduced the tax increment in the 2009-10 fiscal year by
20 percent or more; the agency agrees to remit the owed
amount over a period of 30-years or less; and the agency
recognizes they may use any legally available funds to
make the payments over time and may pay off the debt
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early. Given that this is a limited relief that would
pertain to a limited universe of redevelopment agencies
who are unable to pay, there would be no budget year
fiscal impact.
3. Removes the debt cap on the San Diego Centre City
Redevelopment area. The debt cap imposes a limit on the
amount of property tax increment revenues that go to the
redevelopment agency over the life of the project. By
removing the cap, the redevelopment agency would be able
to continue to receive property tax revenue increments
and issue additional debt. Officials indicate that the
redevelopment agency would not hit its existing debt cap
of $3 billion for another 10 years. Thus, there would
be no near term impact. Removing the cap could
eventually curtail the property tax revenues that would
otherwise flow to local governments, depending upon
future development in the project area. Consequently, to
the extent that local education agencies do not receive
additional property tax revenues in the future, there
could be additional General Fund costs.
FISCAL EFFECT : Appropriation: Yes Fiscal Com.: Yes
Local: No
According to the Assembly Third Reading analysis, changes
to the Williamson Act would not result in any fiscal effect
on the state. The relief granted certain redevelopment
agencies would not result in any direct state costs in the
near term.
DLW:mw 10/8/10 Senate Floor Analyses
SUPPORT/OPPOSITION: NONE RECEIVED
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