Amended in Senate August 22, 2014

Amended in Senate June 17, 2014

Amended in Senate June 2, 2014

Amended in Assembly April 22, 2014

Amended in Assembly April 3, 2014

California Legislature—2013–14 Regular Session

Assembly Bill No. 1582

Introduced by Assembly Member Mullin

February 3, 2014

An act to begin delete amend, repeal, and add Section 34177 end delete begin insert amend Section 34191.4 end insert of the Health and Safety Code, relating to redevelopment.

LEGISLATIVE COUNSEL’S DIGEST

AB 1582, as amended, Mullin. Redevelopment: successor agencies: begin delete Recognized Obligation Payment Schedule. end delete begin insert postcompliance provisions: loans. end insert

The Community Redevelopment Law authorized the establishment of redevelopment agencies in communities to address the effects of blight, as defined. Existing law dissolved redevelopment agencies as of February 1, 2012, and provides for the designation of successor agencies, as defined. Existing law requires successor agencies to wind down the affairs of the dissolved redevelopment agencies. Existing law requires a successor agency to, among other things, prepare a Recognized Obligation Payment Schedule for payments on enforceable obligations for each 6-month fiscal period.

begin delete

This bill would, commencing January 1, 2016, revise the timeline for the preparation of the required Recognized Obligation Payment Schedule to provide that the successor agency prepare a schedule for a 12-month fiscal period, with the first of these periods beginning July 1, 2016, and would authorize the Recognized Obligation Payment Schedule to be amended by the oversight board during a 12-month fiscal period if the amendment is approved at least 90 days before the date of the next property tax distribution.

end delete begin insert

Under existing law, the Department of Finance is authorized to issue a finding of completion to a successor agency that completes specified requirements. Upon receiving a finding of completion, the successor agency is authorized to participate in a loan repayment program and limited property management activities. Under existing law, after the successor agency receives a finding of completion, upon application by the successor agency and approval by the oversight board, loan agreements entered into between the redevelopment agency and the city, county, or city and county that created the redevelopment agency are deemed to be enforceable obligations, provided that the oversight board makes a finding that the loan was for legitimate redevelopment purposes.

end insert begin insert

This bill would require the interest rate on the amount of principal calculated from the loan origination date, and any increase thereto that remains unpaid as of the date of oversight board approval of the loan as an enforceable obligation, to be subject to an adjusted interest rate, as prescribed.

end insert begin insert

This bill would incorporate additional changes to Section 34191.4 of the Health and Safety Code proposed by AB 2493 and SB 1129 that would become operative if this bill and either AB 2493 and SB 1129, or both, are enacted and this bill is enacted last.

end insert

Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.

The people of the State of California do enact as follows:

begin insert

begin insert SECTION 1. end insert   

end insert

begin insert Section 34191.4 of the end insert begin insert Health and Safety Code end insert
begin insert is amended to read: end insert

34191.4.  

The following provisions shall apply to any successor
agency that has been issued a finding of completion by the
Department of Finance:

(a) All real property and interests in real property identified in
subparagraph (C) of paragraph (5) of subdivision (c) of Section
34179.5 shall be transferred to the Community Redevelopment
Property Trust Fund of the successor agency upon approval by the
Department of Finance of the long-range property management
plan submitted by the successor agency pursuant to subdivision
(b) of Section 34191.5 unless that property is subject to the
requirements of any existing enforceable obligation.

(b) (1) Notwithstanding subdivision (d) of Section 34171, upon
application by the successor agency and approval by the oversight
board, loan agreements begin insert , contracts, or arrangements end insert entered into
between the redevelopment agency and the city, county, or city
and county that created the redevelopment agency shall be deemed
to be begin insert existing end insert enforceable obligations provided that the oversight
board makes a finding that the loan was for legitimate
redevelopment purposes.

(2) If the oversight board finds that the loan begin insert agreement, contract,
or arrangement entered into between the redevelopment agency
and the city, county, or city and county that created the
redevelopment agency end insert is an begin insert existing end insert enforceable obligation, the
accumulated interest on the remaining principal amount of the loan
shall be recalculated from begin insert the loan end insert origination at the begin insert historic end insert
interest rate earned by funds deposited into the Local Agency
Investment begin delete Fund. The end delete begin insert Fund at the time of the loan origination and
adjusted quarterly over time. For purposes of this paragraph, the
term “remaining principal amount” means the amount of principal
calculated from the loan origination date and any increase thereto
that remains unpaid as of the date of oversight board approval.
After the interest on the remaining principal amount has been
calculated, the end insert loan shall be repaid to the city, county, or city and
county in accordance with a defined schedule over a reasonable
term of years at an interest rate not to exceed the begin insert quarterly adjusted end insert
interest rate earned by funds deposited into the Local Agency
Investment Fund. The annual loan repayments provided for in the
recognized obligation payment schedules shall be subject to all of
the following limitations:

(A) Loan repayments shall not be made prior to the 2013-14
fiscal year. Beginning in the 2013-14 fiscal year, the maximum
repayment amount authorized each fiscal year for repayments
made pursuant to this subdivision and paragraph (7) of subdivision
(e) of Section 34176 combined shall be equal to one-half of the
increase between the amount distributed to the taxing entities
pursuant to paragraph (4) of subdivision (a) of Section 34183 in
that fiscal year and the amount distributed to taxing entities
pursuant to that paragraph in the 2012-13 base year, provided,
however, that calculation of the amount distributed to taxing
entities during the 2012-13 base year shall not include any amounts
distributed to taxing entities pursuant to the due diligence review
process established in Sections 34179.5 to 34179.8, inclusive.
Loan or deferral repayments made pursuant to this subdivision
shall be second in priority to amounts to be repaid pursuant to
paragraph (7) of subdivision (e) of Section 34176.

(B) Repayments received by the city, county, or city and county
that formed the redevelopment agency shall first be used to retire
any outstanding amounts borrowed and owed to the Low and
Moderate Income Housing Fund of the former redevelopment
agency for purposes of the Supplemental Educational Revenue
Augmentation Fund and shall be distributed to the Low and
Moderate Income Housing Asset Fund established by subdivision
(d) of Section 34176.

(C) Twenty percent of any loan repayment shall be deducted
from the loan repayment amount and shall be transferred to the
Low and Moderate Income Housing Asset Fund, after all
outstanding loans from the Low and Moderate Income Housing
Fund for purposes of the Supplemental Educational Revenue
Augmentation Fund have been paid.

(c) (1) Bond proceeds derived from bonds issued on or before
December 31, 2010, shall be used for the purposes for which the
bonds were sold.

(2) (A) Notwithstanding Section 34177.3 or any other
conflicting provision of law, bond proceeds in excess of the
amounts needed to satisfy approved enforceable obligations shall
thereafter be expended in a manner consistent with the original
bond covenants. Enforceable obligations may be satisfied by the
creation of reserves for projects that are the subject of the
enforceable obligation and that are consistent with the contractual
obligations for those projects, or by expending funds to complete
the projects. An expenditure made pursuant to this paragraph shall
constitute the creation of excess bond proceeds obligations to be
paid from the excess proceeds. Excess bond proceeds obligations
shall be listed separately on the Recognized Obligation Payment
Schedule submitted by the successor agency.

(B) If remaining bond proceeds cannot be spent in a manner
consistent with the bond covenants pursuant to subparagraph (A),
the proceeds shall be used to defease the bonds or to purchase
those same outstanding bonds on the open market for cancellation.

begin insert

begin insert SEC. 1.5. end insert   

end insert

begin insert Section 34191.4 of the end insert begin insert Health and Safety Code end insert begin insert is
amended to read: end insert

34191.4.  

The following provisions shall apply to any successor
agency that has been issued a finding of completion by the
Department of Finance:

(a) All real property and interests in real property identified in
subparagraph (C) of paragraph (5) of subdivision (c) of Section
34179.5 shall be transferred to the Community Redevelopment
Property Trust Fund of the successor agency upon approval by the
Department of Finance of the long-range property management
plan submitted by the successor agency pursuant to subdivision
(b) of Section 34191.5 unless that property is subject to the
requirements of any existing enforceable obligation.

(b) (1) Notwithstanding subdivision (d) of Section 34171, upon
application by the successor agency and approval by the oversight
board, loan agreements begin insert , contracts, or arrangements end insert entered into
between the redevelopment agency and the city, county, or city
and county that created the redevelopment agency shall be deemed
to be begin insert existing end insert enforceable obligations provided that the oversight
board makes a finding that the loan was for legitimate
redevelopment purposes.

(2) If the oversight board finds that the loan begin insert agreement, contract,
or arrangement entered into between the redevelopment agency
and the city, county, or city and county that created the
redevelopment agency end insert is an begin insert existing end insert enforceable obligation, the
accumulated interest on the remaining principal amount of the loan
shall be recalculated from begin insert the loan end insert origination at the begin insert historic end insert
interest rate earned by funds deposited into the Local Agency
Investment begin delete Fund. The end delete begin insert Fund at the time of the loan origination and
adjusted quarterly over time. For purposes of this paragraph, the
term “remaining principal amount” means the amount of principal
calculated from the loan origination date and any increase thereto
that remains unpaid as of the date of oversight board approval.
After the interest on the remaining principal amount has been
calculated, the end insert loan shall be repaid to the city, county, or city and
county in accordance with a defined schedule over a reasonable
term of years at an interest rate not to exceed the begin insert quarterly adjusted end insert
interest rate earned by funds deposited into the Local Agency
Investment Fund. The annual loan repayments provided for in the
recognized obligation payment schedules shall be subject to all of
the following limitations:

(A) Loan repayments shall not be made prior to the 2013-14
fiscal year. Beginning in the 2013-14 fiscal year, the maximum
repayment amount authorized each fiscal year for repayments
made pursuant to this subdivision and paragraph (7) of subdivision
(e) of Section 34176 combined shall be equal to one-half of the
increase between the amount distributed to the taxing entities
pursuant to paragraph (4) of subdivision (a) of Section 34183 in
that fiscal year and the amount distributed to taxing entities
pursuant to that paragraph in the 2012-13 base year, provided,
however, that calculation of the amount distributed to taxing
entities during the 2012-13 base year shall not include any amounts
distributed to taxing entities pursuant to the due diligence review
process established in Sections 34179.5 to 34179.8, inclusive.
Loan or deferral repayments made pursuant to this subdivision
shall be second in priority to amounts to be repaid pursuant to
paragraph (7) of subdivision (e) of Section 34176.

(B) Repayments received by the city, county, or city and county
that formed the redevelopment agency shall first be used to retire
any outstanding amounts borrowed and owed to the Low and
Moderate Income Housing Fund of the former redevelopment
agency for purposes of the Supplemental Educational Revenue
Augmentation Fund and shall be distributed to the Low and
Moderate Income Housing Asset Fund established by subdivision
(d) of Section 34176.

(C) Twenty percent of any loan repayment shall be deducted
from the loan repayment amount and shall be transferred to the
Low and Moderate Income Housing Asset Fund, after all
outstanding loans from the Low and Moderate Income Housing
Fund for purposes of the Supplemental Educational Revenue
Augmentation Fund have been paid.

(c) (1) Bond proceeds derived from bonds issued on or before
begin delete December 31, 2010, end delete begin insert June 28, 2011, end insert shall be used for the purposes
for which the bonds were sold.

(2)  begin delete (A) end delete begin delete   end delete Notwithstanding Section 34177.3 or any other
conflicting provision of law, bond proceeds begin insert derived from bonds
issued on or before December 31, 2010, end insert in excess of the amounts
needed to satisfy approved enforceable obligations shall thereafter
be expended in a manner consistent with the original bond
covenants. Enforceable obligations may be satisfied by the creation
of reserves for projects that are the subject of the enforceable
obligation and that are consistent with the contractual obligations
for those projects, or by expending funds to complete the projects.
An expenditure made pursuant to this paragraph shall constitute
the creation of excess bond proceeds obligations to be paid from
the excess proceeds. Excess bond proceeds obligations shall be
listed separately on the Recognized Obligation Payment Schedule
submitted by the successor agency.

begin insert

(3) (A) Bond proceeds derived from bonds issued between
January 1, 2011, and June 28, 2011, shall only be used for projects
which meet the following criteria, as determined by a resolution
issued by the oversight board:

end insert begin insert

(i) The project shall be consistent with the applicable regional
sustainable communities strategy or alternative planning strategy
adopted pursuant to Section 65080 of the Government Code that
the State Air Resources Board has determined would, if
implemented, achieve the greenhouse gas emission reduction
targets established by the board or, if a sustainable communities
strategy is not required for a region by law, a regional
transportation plan that includes programs and policies to reduce
greenhouse gas emissions.

end insert begin insert

(ii) Two or more significant planning or implementation actions
shall have occurred on or before December 31, 2010. The term
“significant planning and implementation actions” means any of
the following:

end insert begin insert

(I) An action approved by the governing body of the city, county,
city and county, the board of the former redevelopment agency,
or the planning commission directly related to the planning or
implementation of the project.

end insert begin insert

(II) The project is included within an approved city, county, city
and county, or redevelopment agency planning document,
including, but not limited to, a redevelopment agency five-year
implementation plan, capital improvement plan, master plan, or
other planning document.

end insert begin insert

(III) The expenditure by the city, county, city and county, or
project sponsor, of more than twenty-five thousand dollars
($25,000) on planning-related activities for the project within one
fiscal year, or fifty thousand dollars ($50,000) in total, over
multiple fiscal years.

end insert begin insert

(iii) Documentation dated on or before December 31, 2010,
shall be provided indicating the intention to finance all or a portion
of the project with the future issuance of long-term debt, or
documentation showing that the issuance of long-term
redevelopment agency debt was being planned on or before
December 31, 2010.

end insert begin insert

(iv) Each construction contract over one hundred thousand
dollars ($100,000) shall include a provision that prevailing wage
will be paid by the contractor and all of that contractor’s
subcontractors.

end insert begin insert

(v) For each construction contract over two hundred fifty
thousand dollars ($250,000), the successor agency shall require
prospective contractors to submit a standardized questionnaire
and financial statements as part of their bid package, to establish
the contractor’s financial ability and experience in performing
large construction projects.

end insert begin insert

(B) Any city, county, or city and county that funded an eligible
project, meeting the criteria listed in clauses (i) to (iii), inclusive,
of subparagraph (A) with funds other than redevelopment funds,
between June 28, 2011, and the effective date of the act adding
this paragraph, shall be eligible to be reimbursed utilizing 2011
bond proceeds, if the project meets the purpose for which the bonds
were issued.

end insert begin insert

(C) Any successor agency requesting the use of bond proceeds
derived from bonds issued between January 1, 2011, and June 28,
2011, in accordance with subparagraphs (A) and (B), shall place
that request on its Recognized Obligation Payment Schedule. The
successor agency shall place each project on a separate
Recognized Obligation Payment Schedule line item. The successor
agency shall detail in the resolution adopting the Recognized
Obligation Payment Schedule how each project will meet the
requirements in subparagraphs (A) and (B), and all documentation
showing how the project meets those criteria shall be attached to
the resolution. The resolution adopting the Recognized Obligation
Payment Schedule, including the supporting documentation, shall
be forwarded to the Department of Finance for review and
approval or denial. Pursuant to subdivision (h) of Section 34179,
the Department of Finance may review and deny any action by
the oversight board.

end insert begin delete

(B)

end delete

begin insert (4) end insert  If remaining bond proceeds begin insert derived from bonds issued on
or before December 31, 2010, end insert cannot be spent in a manner
consistent with the bond covenants pursuant to begin delete subparagraph (A), end delete
begin insert paragraph (2), or if bond proceeds derived from bonds issued
between January 1, 2011, and June 28, 2011, cannot be used for
projects that met the requirements in subparagraphs (A) and (B)
of paragraph (3), end insert the proceeds shall be used to defease begin insert all or a
portion of end insert the bonds or to purchase begin insert all or a portion of end insert those same
outstanding bonds on the open market for cancellation. begin insert If only a
portion of the bonds proceeds will be used, the successor agency
shall defease or purchase bonds for cancellation in a manner that
maximizes fiscal savings. end insert

begin insert

begin insert SEC. end insert begin insert 2. end insert   

end insert begin insert

(a) Section 1 of this bill shall become operative only
if (1) this bill is enacted and becomes effective on or before January
1, 2015, (2) this bill amends Section 34191.4 of the Health and
Safety Code, and (3) both Assembly Bill 2493 and Senate Bill 1129
are not enacted, or as enacted do not amend that section, in which
case Section 1.5 of this bill shall not become operative.

end insert begin insert

(b) Section 1.5 of this bill incorporates amendments to Section
34191.4 of the Health and Safety Code proposed by both this bill
and Assembly Bill 2493. It shall only become operative if (1) both
bills are enacted and become effective on or before January 1,
2015, (2) each bill amends Section 34191.4 of the Health and
Safety Code, and (3) Senate Bill 1129 is not enacted or as enacted
does not amend that section, and (4) this bill is enacted after
Assembly Bill 2493, in which case Section 1 of this bill shall not
become operative.

end insert

begin delete

SECTION 1.  

Section 34177 of the Health and Safety Code is
amended to read:

34177.  

Successor agencies are required to do all of the
following:

(a) Continue to make payments due for enforceable obligations.

(1) On and after February 1, 2012, and until a Recognized
Obligation Payment Schedule becomes operative, only payments
required pursuant to an enforceable obligations payment schedule
shall be made. The initial enforceable obligation payment schedule
shall be the last schedule adopted by the redevelopment agency
under Section 34169. However, payments associated with
obligations excluded from the definition of enforceable obligations
by paragraph (2) of subdivision (d) of Section 34171 shall be
excluded from the enforceable obligations payment schedule and
be removed from the last schedule adopted by the redevelopment
agency under Section 34169 prior to the successor agency adopting
it as its enforceable obligations payment schedule pursuant to this
subdivision. The enforceable obligation payment schedule may
be amended by the successor agency at any public meeting and
shall be subject to the approval of the oversight board as soon as
the board has sufficient members to form a quorum. In recognition
of the fact that the timing of the California Supreme Court’s ruling
in the case California Redevelopment Association v. Matosantos
(2011) 53 Cal.4th 231 delayed the preparation by successor
agencies and the approval by oversight boards of the January 1,
2012, through June 30, 2012, Recognized Obligation Payment
Schedule, a successor agency may amend the Enforceable
Obligation Payment Schedule to authorize the continued payment
of enforceable obligations until the time that the January 1, 2012,
through June 30, 2012, Recognized Obligation Payment Schedule
has been approved by the oversight board and by the Department
of Finance. The successor agency may utilize reasonable estimates
and projections to support payment amounts for enforceable
obligations if the successor agency submits appropriate supporting
documentation of the basis for the estimate or projection to the
Department of Finance and the auditor-controller.

(2) The Department of Finance and the Controller shall each
have the authority to require any documents associated with the
enforceable obligations to be provided to them in a manner of their
choosing. Any taxing entity, the department, and the Controller
shall each have standing to file a judicial action to prevent a
violation under this part and to obtain injunctive or other
appropriate relief.

(3) Commencing on the date the Recognized Obligation Payment
Schedule is valid pursuant to subdivision (l), only those payments
listed in the Recognized Obligation Payment Schedule may be
made by the successor agency from the funds specified in the
Recognized Obligation Payment Schedule. In addition, after it
becomes valid, the Recognized Obligation Payment Schedule shall
supersede the Statement of Indebtedness, which shall no longer
be prepared nor have any effect under the Community
Redevelopment Law (Part 1 (commencing with Section 33000)).

(4) Nothing in the act adding this part is to be construed as
preventing a successor agency, with the prior approval of the
oversight board, as described in Section 34179, from making
payments for enforceable obligations from sources other than those
listed in the Recognized Obligation Payment Schedule.

(5) From February 1, 2012, to July 1, 2012, a successor agency
shall have no authority and is hereby prohibited from accelerating
payment or making any lump-sum payments that are intended to
prepay loans unless such accelerated repayments were required
prior to the effective date of this part.

(b) Maintain reserves in the amount required by indentures,
trust indentures, or similar documents governing the issuance of
outstanding redevelopment agency bonds.

(c) Perform obligations required pursuant to any enforceable
obligation.

(d) Remit unencumbered balances of redevelopment agency
funds to the county auditor-controller for distribution to the taxing
entities, including, but not limited to, the unencumbered balance
of the Low and Moderate Income Housing Fund of a former
redevelopment agency. In making the distribution, the county
auditor-controller shall utilize the same methodology for allocation
and distribution of property tax revenues provided in Section
34188.

(e) Dispose of assets and properties of the former redevelopment
agency as directed by the oversight board; provided, however, that
the oversight board may instead direct the successor agency to
transfer ownership of certain assets pursuant to subdivision (a) of
Section 34181. The disposal is to be done expeditiously and in a
manner aimed at maximizing value. Proceeds from asset sales and
related funds that are no longer needed for approved development
projects or to otherwise wind down the affairs of the agency, each
as determined by the oversight board, shall be transferred to the
county auditor-controller for distribution as property tax proceeds
under Section 34188. The requirements of this subdivision shall
not apply to a successor agency that has been issued a finding of
completion by the Department of Finance pursuant to Section
34179.7.

(f) Enforce all former redevelopment agency rights for the
benefit of the taxing entities, including, but not limited to,
continuing to collect loans, rents, and other revenues that were due
to the redevelopment agency.

(g) Effectuate transfer of housing functions and assets to the
appropriate entity designated pursuant to Section 34176.

(h) Expeditiously wind down the affairs of the redevelopment
agency pursuant to the provisions of this part and in accordance
with the direction of the oversight board.

(i) Continue to oversee development of properties until the
contracted work has been completed or the contractual obligations
of the former redevelopment agency can be transferred to other
parties. Bond proceeds shall be used for the purposes for which
bonds were sold unless the purposes can no longer be achieved,
in which case, the proceeds may be used to defease the bonds.

(j) Prepare a proposed administrative budget and submit it to
the oversight board for its approval. The proposed administrative
budget shall include all of the following:

(1) Estimated amounts for successor agency administrative costs
for the upcoming six-month fiscal period.

(2) Proposed sources of payment for the costs identified in
paragraph (1).

(3) Proposals for arrangements for administrative and operations
services provided by a city, county, city and county, or other entity.

(k) Provide administrative cost estimates, from its approved
administrative budget that are to be paid from property tax revenues
deposited in the Redevelopment Property Tax Trust Fund, to the
county auditor-controller for each six-month fiscal period.

(l) (1) Before each six-month fiscal period, prepare a
Recognized Obligation Payment Schedule in accordance with the
requirements of this paragraph. For each recognized obligation,
the Recognized Obligation Payment Schedule shall identify one
or more of the following sources of payment:

(A) Low and Moderate Income Housing Fund.

(B) Bond proceeds.

(C) Reserve balances.

(D) Administrative cost allowance.

(E) The Redevelopment Property Tax Trust Fund, but only to
the extent no other funding source is available or when payment
from property tax revenues is required by an enforceable obligation
or by the provisions of this part.

(F) Other revenue sources, including rents, concessions, asset
sale proceeds, interest earnings, and any other revenues derived
from the former redevelopment agency, as approved by the
oversight board in accordance with this part.

(2) A Recognized Obligation Payment Schedule shall not be
deemed valid unless all of the following conditions have been met:

(A) A Recognized Obligation Payment Schedule is prepared
by the successor agency for the enforceable obligations of the
former redevelopment agency. The initial schedule shall project
the dates and amounts of scheduled payments for each enforceable
obligation for the remainder of the time period during which the
redevelopment agency would have been authorized to obligate
property tax increment had the a redevelopment agency not been
dissolved.

(B) The Recognized Obligation Payment Schedule is submitted
to and duly approved by the oversight board. The successor agency
shall submit a copy of the Recognized Obligation Payment
Schedule to the county administrative officer, the county
auditor-controller, and the Department of Finance at the same time
that the successor agency submits the Recognized Obligation
Payment Schedule to the oversight board for approval.

(C) A copy of the approved Recognized Obligation Payment
Schedule is submitted to the county auditor-controller, the
Controller’s office, and the Department of Finance, and is posted
on the successor agency’s Internet Web site.

(3) The Recognized Obligation Payment Schedule shall be
forward looking to the next six months. The first Recognized
Obligation Payment Schedule shall be submitted to the Controller’s
office and the Department of Finance by April 15, 2012, for the
period of January 1, 2012, to June 30, 2012, inclusive. This
Recognized Obligation Payment Schedule shall include all
payments made by the former redevelopment agency between
January 1, 2012, through January 31, 2012, and shall include all
payments proposed to be made by the successor agency from
February 1, 2012, through June 30, 2012. Former redevelopment
agency enforceable obligation payments due, and reasonable or
necessary administrative costs due or incurred, prior to January 1,
2012, shall be made from property tax revenues received in the
spring of 2011 property tax distribution, and from other revenues
and balances transferred to the successor agency.

(m) The Recognized Obligation Payment Schedule for the period
of January 1, 2013, to June 30, 2013, shall be submitted by the
successor agency, after approval by the oversight board, no later
than September 1, 2012. Commencing with the Recognized
Obligation Payment Schedule covering the period July 1, 2013,
through December 31, 2013, successor agencies shall submit an
oversight board-approved Recognized Obligation Payment
Schedule to the Department of Finance and to the county
auditor-controller no fewer than 90 days before the date of property
tax distribution. The Department of Finance shall make its
determination of the enforceable obligations and the amounts and
funding sources of the enforceable obligations no later than 45
days after the Recognized Obligation Payment Schedule is
submitted. Within five business days of the department’s
determination, a successor agency may request additional review
by the department and an opportunity to meet and confer on
disputed items. The meet and confer period may vary; an untimely
submittal of a Recognized Obligation Payment Schedule may result
in a meet and confer period of less than 30 days. The department
shall notify the successor agency and the county auditor-controllers
as to the outcome of its review at least 15 days before the date of
property tax distribution.

(1) The successor agency shall submit a copy of the Recognized
Obligation Payment Schedule to the Department of Finance
electronically, and the successor agency shall complete the
Recognized Obligation Payment Schedule in the manner provided
for by the department. A successor agency shall be in
noncompliance with this paragraph if it only submits to the
department an electronic message or a letter stating that the
oversight board has approved a Recognized Obligation Payment
Schedule.

(2) If a successor agency does not submit a Recognized
Obligation Payment Schedule by the deadlines provided in this
subdivision, the city, county, or city and county that created the
redevelopment agency shall be subject to a civil penalty equal to
ten thousand dollars ($10,000) per day for every day the schedule
is not submitted to the department. The civil penalty shall be paid
to the county auditor-controller for allocation to the taxing entities
under Section 34183. If a successor agency fails to submit a
Recognized Obligation Payment Schedule by the deadline, any
creditor of the successor agency or the Department of Finance or
any affected taxing entity shall have standing to and may request
a writ of mandate to require the successor agency to immediately
perform this duty. Those actions may be filed only in the County
of Sacramento and shall have priority over other civil matters.
Additionally, if an agency does not submit a Recognized Obligation
Payment Schedule within 10 days of the deadline, the maximum
administrative cost allowance for that period shall be reduced by
25 percent.

(3) If a successor agency fails to submit to the department an
oversight board-approved Recognized Obligation Payment
Schedule that complies with all requirements of this subdivision
within five business days of the date upon which the Recognized
Obligation Payment Schedule is to be used to determine the amount
of property tax allocations, the department may determine if any
amount should be withheld by the county auditor-controller for
payments for enforceable obligations from distribution to taxing
entities, pending approval of a Recognized Obligation Payment
Schedule. The county auditor-controller shall distribute the portion
of any of the sums withheld pursuant to this paragraph to the
affected taxing entities in accordance with paragraph (4) of
subdivision (a) of Section 34183 upon notice by the department
that a portion of the withheld balances are in excess of the amount
of enforceable obligations. The county auditor-controller shall
distribute withheld funds to the successor agency only in
accordance with a Recognized Obligation Payment Schedule
approved by the department. County auditor-controllers shall lack
the authority to withhold any other amounts from the allocations
provided for under Section 34183 or 34188 unless required by a
court order.

(4) (A) The Recognized Obligation Payment Schedule payments
required pursuant to this subdivision may be scheduled beyond
the existing Recognized Obligation Payment Schedule cycle upon
a showing that a lender requires cash on hand beyond the
Recognized Obligation Payment Schedule cycle.

(B) When a payment is shown to be due during the Recognized
Obligation Payment Schedule period, but an invoice or other billing
document has not yet been received, the successor agency may
utilize reasonable estimates and projections to support payment
amounts for enforceable obligations if the successor agency submits
appropriate supporting documentation of the basis for the estimate
or projection to the department and the auditor-controller.

(C) A Recognized Obligation Payment Schedule may also
include appropriation of moneys from bonds subject to passage
during the Recognized Obligation Payment Schedule cycle when
an enforceable obligation requires the agency to issue the bonds
and use the proceeds to pay for project expenditures.

(n) Cause a postaudit of the financial transactions and records
of the successor agency to be made at least annually by a certified
public accountant.

(o) This section shall remain in effect only until July 1, 2016,
and as of that date is repealed.

SEC. 2.  

Section 34177 is added to the Health and Safety Code,
to read:

34177.  

Successor agencies are required to do all of the
following:

(a) Continue to make payments due for enforceable obligations.

(1) On and after February 1, 2012, and until a Recognized
Obligation Payment Schedule becomes operative, only payments
required pursuant to an enforceable obligations payment schedule
shall be made. The initial enforceable obligation payment schedule
shall be the last schedule adopted by the redevelopment agency
under Section 34169. However, payments associated with
obligations excluded from the definition of enforceable obligations
by paragraph (2) of subdivision (d) of Section 34171 shall be
excluded from the enforceable obligations payment schedule and
be removed from the last schedule adopted by the redevelopment
agency under Section 34169 prior to the successor agency adopting
it as its enforceable obligations payment schedule pursuant to this
subdivision. The enforceable obligation payment schedule may
be amended by the successor agency at any public meeting and
shall be subject to the approval of the oversight board as soon as
the board has sufficient members to form a quorum. In recognition
of the fact that the timing of the California Supreme Court’s ruling
in the case California Redevelopment Association v. Matosantos
(2011) 53 Cal.4th 231 delayed the preparation by successor
agencies and the approval by oversight boards of the January 1,
2012, through June 30, 2012, Recognized Obligation Payment
Schedule, a successor agency may amend the Enforceable
Obligation Payment Schedule to authorize the continued payment
of enforceable obligations until the time that the January 1, 2012,
through June 30, 2012, Recognized Obligation Payment Schedule
has been approved by the oversight board and by the Department
of Finance. The successor agency may utilize reasonable estimates
and projections to support payment amounts for enforceable
obligations if the successor agency submits appropriate supporting
documentation of the basis for the estimate or projection to the
Department of Finance and the auditor-controller.

(2) The Department of Finance and the Controller shall each
have the authority to require any documents associated with the
enforceable obligations to be provided to them in a manner of their
choosing. Any taxing entity, the department, and the Controller
shall each have standing to file a judicial action to prevent a
violation under this part and to obtain injunctive or other
appropriate relief.

(3) Commencing on the date the Recognized Obligation Payment
Schedule is valid pursuant to subdivision (l), only those payments
listed in the Recognized Obligation Payment Schedule may be
made by the successor agency from the funds specified in the
Recognized Obligation Payment Schedule. In addition, after it
becomes valid, the Recognized Obligation Payment Schedule shall
supersede the Statement of Indebtedness, which shall no longer
be prepared nor have any effect under the Community
Redevelopment Law (Part 1 (commencing with Section 33000)).

(4) Nothing in the act adding this part is to be construed as
preventing a successor agency, with the prior approval of the
oversight board, as described in Section 34179, from making
payments for enforceable obligations from sources other than those
listed in the Recognized Obligation Payment Schedule.

(5) From February 1, 2012, to July 1, 2012, a successor agency
shall have no authority and is hereby prohibited from accelerating
payment or making any lump-sum payments that are intended to
prepay loans unless the accelerated repayments were required prior
to the effective date of this part.

(b) Maintain reserves in the amount required by indentures,
trust indentures, or similar documents governing the issuance of
outstanding redevelopment agency bonds.

(c) Perform obligations required pursuant to any enforceable
obligation.

(d) Remit unencumbered balances of redevelopment agency
funds to the county auditor-controller for distribution to the taxing
entities, including, but not limited to, the unencumbered balance
of the Low and Moderate Income Housing Fund of a former
redevelopment agency. In making the distribution, the county
auditor-controller shall utilize the same methodology for allocation
and distribution of property tax revenues provided in Section
34188.

(e) Dispose of assets and properties of the former redevelopment
agency as directed by the oversight board; provided, however, that
the oversight board may instead direct the successor agency to
transfer ownership of certain assets pursuant to subdivision (a) of
Section 34181. The disposal is to be done expeditiously and in a
manner aimed at maximizing value. Proceeds from asset sales and
related funds that are no longer needed for approved development
projects or to otherwise wind down the affairs of the agency, each
as determined by the oversight board, shall be transferred to the
county auditor-controller for distribution as property tax proceeds
under Section 34188. The requirements of this subdivision shall
not apply to a successor agency that has been issued a finding of
completion by the Department of Finance pursuant to Section
34179.7.

(f) Enforce all former redevelopment agency rights for the
benefit of the taxing entities, including, but not limited to,
continuing to collect loans, rents, and other revenues that were due
to the redevelopment agency.

(g) Effectuate transfer of housing functions and assets to the
appropriate entity designated pursuant to Section 34176.

(h) Expeditiously wind down the affairs of the redevelopment
agency pursuant to the provisions of this part and in accordance
with the direction of the oversight board.

(i) Continue to oversee development of properties until the
contracted work has been completed or the contractual obligations
of the former redevelopment agency can be transferred to other
parties. Bond proceeds shall be used for the purposes for which
bonds were sold unless the purposes can no longer be achieved,
in which case, the proceeds may be used to defease the bonds.

(j) Prepare a proposed administrative budget and submit it to
the oversight board for its approval. The proposed administrative
budget shall include all of the following:

(1) Estimated amounts for successor agency administrative costs
for the upcoming 12-month fiscal period.

(2) Proposed sources of payment for the costs identified in
paragraph (1).

(3) Proposals for arrangements for administrative and operations
services provided by a city, county, city and county, or other entity.

(k) Provide administrative cost estimates, from its approved
administrative budget that are to be paid from property tax revenues
deposited in the Redevelopment Property Tax Trust Fund, to the
county auditor-controller for each 12-month fiscal period.

(l) (1) Before each 12-month fiscal period, prepare a
Recognized Obligation Payment Schedule in accordance with the
requirements of this paragraph. For each recognized obligation,
the Recognized Obligation Payment Schedule shall identify one
or more of the following sources of payment:

(A) Low and Moderate Income Housing Fund.

(B) Bond proceeds.

(C) Reserve balances.

(D) Administrative cost allowance.

(E) The Redevelopment Property Tax Trust Fund, but only to
the extent no other funding source is available or when payment
from property tax revenues is required by an enforceable obligation
or by the provisions of this part.

(F) Other revenue sources, including rents, concessions, asset
sale proceeds, interest earnings, and any other revenues derived
from the former redevelopment agency, as approved by the
oversight board in accordance with this part.

(2) A Recognized Obligation Payment Schedule shall not be
deemed valid unless all of the following conditions have been met:

(A) A Recognized Obligation Payment Schedule is prepared
by the successor agency for the enforceable obligations of the
former redevelopment agency. The initial schedule shall project
the dates and amounts of scheduled payments for each enforceable
obligation for the remainder of the time period during which the
redevelopment agency would have been authorized to obligate
property tax increment had the redevelopment agency not been
dissolved.

(B) The Recognized Obligation Payment Schedule is submitted
to and duly approved by the oversight board. The successor agency
shall submit a copy of the Recognized Obligation Payment
Schedule to the county administrative officer, the county
auditor-controller, and the Department of Finance at the same time
that the successor agency submits the Recognized Obligation
Payment Schedule to the oversight board for approval.

(C) A copy of the approved Recognized Obligation Payment
Schedule is submitted to the county auditor-controller, the
Controller’s office, and the Department of Finance, and is posted
on the successor agency’s Internet Web site.

(3) The Recognized Obligation Payment Schedule shall be
forward looking to the next 12-month fiscal period, for the first
12-month fiscal period commencing after January 1, 2016. The
first Recognized Obligation Payment Schedule shall be submitted
to the Controller’s office and the Department of Finance by April
15, 2012, for the period of January 1, 2012, to June 30, 2012,
inclusive. This Recognized Obligation Payment Schedule shall
include all payments made by the former redevelopment agency
between January 1, 2012, through January 31, 2012, and shall
include all payments proposed to be made by the successor agency
from February 1, 2012, through June 30, 2012. Former
redevelopment agency enforceable obligation payments due, and
reasonable or necessary administrative costs due or incurred, prior
to January 1, 2012, shall be made from property tax revenues
received in the spring of 2011 property tax distribution, and from
other revenues and balances transferred to the successor agency.

(4) The Recognized Obligation Payment Schedule may be
amended by the oversight board during a 12-month fiscal period
as long as the amendment is approved at least 90 days before the
date of the next property tax distribution.

(m) The Recognized Obligation Payment Schedule for the period
of January 1, 2013, to June 30, 2013, shall be submitted by the
successor agency, after approval by the oversight board, no later
than September 1, 2012. Commencing with the Recognized
Obligation Payment Schedule covering the period of July 1, 2013,
through December 31, 2013, successor agencies shall submit an
oversight board-approved Recognized Obligation Payment
Schedule to the Department of Finance and to the county
auditor-controller no fewer than 90 days before the date of property
tax distribution. The Department of Finance shall make its
determination of the enforceable obligations and the amounts and
funding sources of the enforceable obligations no later than 45
days after the Recognized Obligation Payment Schedule is
submitted. Within five business days of the department’s
determination, a successor agency may request additional review
by the department and an opportunity to meet and confer on
disputed items. The meet and confer period may vary; an untimely
submittal of a Recognized Obligation Payment Schedule may result
in a meet and confer period of less than 30 days. The department
shall notify the successor agency and the county auditor-controllers
as to the outcome of its review at least 15 days before the date of
property tax distribution.

(1) The successor agency shall submit a copy of the Recognized
Obligation Payment Schedule to the Department of Finance
electronically, and the successor agency shall complete the
Recognized Obligation Payment Schedule in the manner provided
for by the department. A successor agency shall be in
noncompliance with this paragraph if it only submits to the
department an electronic message or a letter stating that the
oversight board has approved a Recognized Obligation Payment
Schedule.

(2) If a successor agency does not submit a Recognized
Obligation Payment Schedule by the deadlines provided in this
subdivision, the city, county, or city and county that created the
redevelopment agency shall be subject to a civil penalty equal to
ten thousand dollars ($10,000) per day for every day the schedule
is not submitted to the department. The civil penalty shall be paid
to the county auditor-controller for allocation to the taxing entities
under Section 34183. If a successor agency fails to submit a
Recognized Obligation Payment Schedule by the deadline, any
creditor of the successor agency or the Department of Finance or
any affected taxing entity shall have standing to and may request
a writ of mandate to require the successor agency to immediately
perform this duty. Those actions may be filed only in the County
of Sacramento and shall have priority over other civil matters.
Additionally, if an agency does not submit a Recognized Obligation
Payment Schedule within 10 days of the deadline, the maximum
administrative cost allowance for that period shall be reduced by
25 percent.

(3) If a successor agency fails to submit to the department an
oversight board-approved Recognized Obligation Payment
Schedule that complies with all requirements of this subdivision
within five business days of the date upon which the Recognized
Obligation Payment Schedule is to be used to determine the amount
of property tax allocations, the department may determine if any
amount should be withheld by the county auditor-controller for
payments for enforceable obligations from distribution to taxing
entities, pending approval of a Recognized Obligation Payment
Schedule. The county auditor-controller shall distribute the portion
of any of the sums withheld pursuant to this paragraph to the
affected taxing entities in accordance with paragraph (4) of
subdivision (a) of Section 34183 upon notice by the department
that a portion of the withheld balances are in excess of the amount
of enforceable obligations. The county auditor-controller shall
distribute withheld funds to the successor agency only in
accordance with a Recognized Obligation Payment Schedule
approved by the department. County auditor-controllers shall lack
the authority to withhold any other amounts from the allocations
provided for under Section 34183 or 34188 unless required by a
court order.

(4) (A) The Recognized Obligation Payment Schedule payments
required pursuant to this subdivision may be scheduled beyond
the existing Recognized Obligation Payment Schedule cycle upon
a showing that a lender requires cash on hand beyond the
Recognized Obligation Payment Schedule cycle.

(B) When a payment is shown to be due during the Recognized
Obligation Payment Schedule period, but an invoice or other billing
document has not yet been received, the successor agency may
utilize reasonable estimates and projections to support payment
amounts for enforceable obligations if the successor agency submits
appropriate supporting documentation of the basis for the estimate
or projection to the department and the auditor-controller.

(C) A Recognized Obligation Payment Schedule may also
include appropriation of moneys from bonds subject to passage
during the Recognized Obligation Payment Schedule cycle when
an enforceable obligation requires the agency to issue the bonds
and use the proceeds to pay for project expenditures.

(n) Cause a postaudit of the financial transactions and records
of the successor agency to be made at least annually by a certified
public accountant.

(o) The 12-month fiscal period specified in subdivisions (j), (k),
and (l) shall correspond to the period from July 1 through June 30,
inclusive, unless an oversight board and the Department of Finance
approve a successor agency’s request for the 12-month fiscal period
to correspond with a different fiscal year used by the city, county,
or city and county that created the former redevelopment agency.

(p) This section shall not be construed to alter the semiannual
distribution of Redevelopment Property Tax Trust Fund payments
made in accordance with the projected payment schedule of the
approved Recognized Obligation Payment Schedule.

(q) This section shall become operative on January 1, 2016.

end delete