BILL ANALYSIS                                                                                                                                                                                                    Ó




                     SENATE GOVERNANCE & FINANCE COMMITTEE
                            Senator Lois Wolk, Chair
          

          BILL NO:  AB 1338                     HEARING:  6/22/11
          AUTHOR:  Roger Hernández              FISCAL:  No
          VERSION:  6/15/11                     TAX LEVY:  No
          CONSULTANT:  Detwiler                 

                  REDEVELOPMENT AGENCIES' PROPERTY ACQUISITION
          

            Requires redevelopment agencies to get appraisals before 
                            acquiring real property.


                           Background and Existing Law  

          When condemning property, public entities must follow the 
          Eminent Domain Law and the state laws on relocation 
          assistance.  The relocation assistance statutes require 
          public entities to appraise real property before beginning 
          negotiations and the property owner must be able to 
          accompany the appraiser who inspects the property.  These 
          statutes protect the private property owner's interests 
          against public officials' condemnation powers.

          Redevelopment agencies' extraordinary powers include the 
          power to acquire property for economic development, public 
          works projects, and affordable housing.  Redevelopment 
          officials can also acquire property by negotiating 
          acquisitions.  When real estate prices fall, redevelopment 
          agencies may pay too much when they buy commercial 
          property, houses, or even bare land.


                                   Proposed Law  

          Before a redevelopment agency acquires or purchases real 
          property, Assembly Bill 1338 requires a redevelopment 
          agency to obtain an appraisal from a qualified independent 
          appraiser to determine the property's fair market value.


                               State Revenue Impact
           
          No estimate.





          AB 1338 -- 6/15/11 -- Page 2




                                     Comment  

           Purpose of the bill  .  Real estate appraisals are essential 
          when public officials condemn private property for public 
          use, but they're also valuable to both parties in 
          negotiated purchases.  Having an independent appraiser 
          determine a property's fair market value protects 
          redevelopment agencies from overpaying when negotiating a 
          sales price.  Redevelopment officials should exercise due 
          diligence, especially when buying property in volatile real 
          estate markets.  Why waste scarce public dollars?


                                 Assembly Actions  

          Assembly Local Government Committee:  9-0
          Assembly Floor:                    76-0


                         Support and Opposition  (6/16/11)

           Support  :  California Building Industry Association; 
          California Redevelopment Association; Housing California; 
          Howard Jarvis Taxpayers Association; Western Center on Law 
          & Poverty.

           Opposition  :  Unknown.