BILL ANALYSIS �
AB 1582
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Date of Hearing: April 9, 2014
ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
K.H. "Katcho" Achadjian, Chair
AB 1582 (Mullin) - As Amended: April 3, 2014
SUBJECT : Redevelopment: successor agencies: Recognized
Obligation Payment Schedule.
SUMMARY : Revises the timeline for the preparation of the
required Recognized Obligation Payment Schedule (ROPS).
Specifically, this bill :
1)Revises the timeline for the preparation of the required ROPS
to provide that the successor agency prepare a schedule for an
annual fiscal period, to correspond with the former agency's
fiscal year, instead of each six-month fiscal period.
2)Specifies that the ROPS shall be forward looking to the next
fiscal year, for fiscal years commencing on or after January
1, 2015.
EXISTING LAW :
1)Dissolves redevelopment agencies and provides for the
designation of successor agencies.
2)Requires successor agencies to wind down the affairs of the
dissolved redevelopment agencies.
3)Defines "enforceable obligations."
4)Requires successor agencies make payments due to enforceable
obligations, as specified.
5)Requires successor agencies to prepare a ROPS, before each
six-month fiscal period, in accordance with specified
requirements, and requires the schedule to identify one or
more of the following sources of payment:
a) Low- and Moderate-Income Housing Fund;
b) Bond proceeds;
c) Reserve balances;
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d) Administrative cost allowance;
e) The Redevelopment Property Tax Trust Fund, as specified;
and,
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.
6)Requires each successor agency to have an oversight board of
seven members to approve certain actions of the successor
agency.
7)Requires Department of Finance (DOF) to review the actions of
an oversight board.
8)Requires DOF to issue a finding of completion to the successor
agency, within five business days, once the following
conditions have been met and verified:
a) The successor agency has paid the full amount as
determined during the due diligence reviews and the county
auditor-controller has reported those payments to DOF;
b) The successor agency has paid the full amount as
determined during the July True-up process; or,
c) The successor agency has paid the full amount upon a
final judicial determination of the amounts due and
confirmation that those amounts have been paid by the
county auditor-controller.
9)Allows the successor agency, upon receiving the finding of
completion, to:
a) Retain dissolved redevelopment agency assets;
b) Place loan agreements between the former redevelopment
agency and sponsoring entity on the ROPS, as an enforceable
obligation, provided the oversight board makes a finding
that the loan was for legitimate redevelopment purposes;
and,
c) Utilize proceeds derived from bonds issued prior to
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January 1, 2011, in a manner consistent with the original
bond covenants.
10)Requires, after DOF issues a finding of completion, the
successor agency to prepare a long-range property management
plan that addresses the disposition and use of the real
properties of the former redevelopment agency, and requires
the report to be submitted to the oversight board and DOF for
approval no later than six months following the issuance to
the successor agency of the finding of completion.
FISCAL EFFECT : The bill is not keyed fiscal, however, it is
double-referred to the Assembly Appropriations Committee.
COMMENTS :
1)Purpose of this bill . This bill revises the timeline for
preparation of a ROPS from every six months, to annually,
prior to the annual fiscal period, and specifies that the ROPS
shall be forward looking to the next fiscal year, for fiscal
years beginning on or after January 1, 2015. This bill is
author-sponsored.
2)Redevelopment Agency (RDA) Dissolution . As part of the winding
down of redevelopment agencies, AB 1484 (Blumenfield), Chapter
26, Statutes of 2012, made various statutory changes
associated with the dissolution of redevelopment agencies and
addressed a number of substantive issues related to
administrative processes, affordable housing activities,
repayment of loans from communities, use of existing bond
proceeds and the disposition or retention of former
redevelopment agency assets.
As part of this process, each successor agency is responsible
for drafting a ROPS delineating the enforceable obligations of
the former RDA and their source of payment every six months.
ROPS are subject to the approval of the local oversight board.
3)Author's statement . According to the author, "In many
instances, the 6-month ROPS period has had a detrimental
impact on the relationship with project area developers in
terms of ensuring that they are 'made whole' in regards to the
contractual obligations between them and the former agency,
and now the successor agency. Moreover, the administrative
burden being placed upon successor agency staff in preparing
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6-month ROPS and projects that may not fulfill the obligations
with developers is problematic and unnecessary if the
Dissolution Act were amended to be compliant with what former
agencies and successor agency staff have been accustomed to
all along - an annual, fiscal year budget process."
The author also notes that "Administrative efficiencies would
be gained by the successor agency, county auditor-controller,
State Controller, and especially the State Department of
Finance by moving towards an annual ROPS submittal."
Additionally, "the closer that a successor agency can come to
knowing what its projected tax increment and enforceable
obligations might be for the coming year, the more accurate
those projections might be."
4)Arguments in support . Supporters argue that the bill gives
successor agencies additional funding flexibility, and that
the current ROPS cycle causes difficulty for long-term funding
calculations.
5)Arguments in opposition . None on file.
6)Referral to Appropriations . The bill is not keyed fiscal,
however, it was referred to the Assembly Appropriations
Committee. Should it pass this Committee, it will then be
heard in Appropriations.
REGISTERED SUPPORT / OPPOSITION :
Support
Association of California Cities - Orange County
California Infill Builders Federation
League of California Cities
Opposition
None on file
Analysis Prepared by : Debbie Michel / L. GOV. / (916)
319-3958
AB 1582
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