BILL ANALYSIS �
AB 936
Page 1
Date of Hearing: May 18, 2011
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 936 (Hueso) - As Amended: May 2, 2011
Policy Committee: Local Government
Vote: 8-0
Urgency: No State Mandated Local Program:
Yes Reimbursable: Yes
SUMMARY
This bill establishes requirements for a local legislative body
that is considering forgiving a loan made to a redevelopment
agency. Specifically, this bill:
1)Requires, if a local legislative body considers any matter on
a meeting agenda to forgive a loan, advance or indebtedness of
a redevelopment agency, the matter to be considered in a
public meeting at least two weeks prior to of any action.
2)Requires the local agencies' chief financial officer to be
present at the public meeting to provide information as to the
status of the potential impact of forgiveness of that loan,
advance, or indebtedness on the financial health of the local
agency.
3)Prohibits the adoption of any redevelopment agency debt
forgiveness proposal from being placed on a consent calendar.
FISCAL EFFECT
There will be minor reimbursement of state mandated costs,
approximately $25,000, from local agencies complying with this
requirement.
COMMENTS
1)Purpose . According to the author this measure is needed "to
ensure that the public has the opportunity to understand the
financial implications of the debt forgiveness. This bill
does not hinder the ability, of a city to forgive a loan to a
AB 936
Page 2
redevelopment agency. The two week notice will ensure that the
public has the opportunity to evaluate these important
financial decisions."
Supporters argue that AB 936 brings transparency to the
activities of redevelopment agencies. Redevelopment agencies
have recently been under fire for lack of accountability in
some cases and this measure will help ensure that
redevelopment agencies fulfill their obligations.
2)Background . When establishing a redevelopment agency, cities
and counties may provide some capital to the agency in the
form of a loan. The loan is used to allow the redevelopment
agency to show debt on their statement of indebtedness so that
the agency has something to bond against. In some
communities, the loan is made with a high interest rate,
creating more debt to bond against and generate tax increment
to fund redevelopment projects. Loans have also been issued
recently to help redevelopment agencies make their payment to
the Supplemental Educational Revenue Augmentation Fund (SERAF)
pursuant to 2009 Budget actions �AB 26 4X (Committee on
Budget), Chapter 21, Statues of 2009.
3)There is no registered opposition to this bill.
Analysis Prepared by : Roger Dunstan / APPR. / (916) 319-2081