Amended in Senate June 4, 2014

Amended in Assembly April 21, 2014

California Legislature—2013–14 Regular Session

Assembly Bill No. 1963

Introduced by Assembly Members Atkins and Dickinson

February 19, 2014

An act to amend begin delete Section end delete begin insert Sections 34176 and end insert 34191.3 of begin insert , and to repeal Section 34178.8 of, end insert the Health and Safety Code, relating to redevelopment, and declaring the urgency thereof, to take effect immediately.

LEGISLATIVE COUNSEL’S DIGEST

AB 1963, as amended, Atkins. Redevelopment.

begin delete

The

end delete

begin insert (1) end insert begin insert   end insert begin insert The end insert 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, subject to review by oversight boards. The oversight board is required to direct a successor agency to, and a successor agency is required to, among other things, dispose of assets and properties of the former redevelopment agency as directed by the oversight board. Existing law suspends this requirement, except as it applies to the transfer or assets and properties for governmental use, until the Department of Finance has approved a long-range property management plan, as specified. Upon approval of a long-range property management plan, the plan governs and supersedes, all other provisions relating to the disposition and use of the real property assets of the former redevelopment agency. If the department has not approved a long-range property management plan by January 1, 2015, existing law requires the property of a former redevelopment agency to be disposed of according to law.

This bill would instead require the property of a former redevelopment agency to be disposed of according to law if the department has not approved a long-range property management plan by January 1, 2016.

begin insert

(2) Existing law requires the Controller to review the activities of successor agencies in the state to determine if an asset transfer has occurred after January 31, 2012, between the successor agency and the city, county, or city and county that created a redevelopment agency, or any other public agency, that was not made pursuant to an enforceable obligation on an approved and valid Recognized Obligation Payment Schedule, and if so, to order the return of the asset, except as specified. Existing law further requires an affected local agency, upon receiving such an order from the Controller, to reverse the transfer and return the applicable assets to the successor agency.

end insert begin insert

This bill would repeal those requirements and make a conforming change.

end insert begin delete

This

end delete

begin insert (3 end insert begin insert ) end insert begin insert   end insert begin insert This end insert bill would declare that it is to take effect immediately as an urgency statute.

Vote: ²⁄₃. Appropriation: no. Fiscal committee: yes. 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 34176 of the end insert begin insert Health and Safety Code end insert begin insert is
amended to read: end insert

34176.  

(a) (1) The city, county, or city and county that
authorized the creation of a redevelopment agency may elect to
retain the housing assets and functions previously performed by
the redevelopment agency. If a city, county, or city and county
elects to retain the authority to perform housing functions
previously performed by a redevelopment agency, all rights,
powers, duties, obligations, and housing assets, as defined in
subdivision (e), excluding any amounts on deposit in the Low and
Moderate Income Housing Fund and enforceable obligations
retained by the successor agency, shall be transferred to the city,
county, or city and county.

(2) The housing successor shall submit to the Department of
Finance by August 1, 2012, a list of all housing assets that contains
an explanation of how the assets meet the criteria specified in
subdivision (e). The Department of Finance shall prescribe the
format for the submission of the list. The list shall include assets
transferred between February 1, 2012, and the date upon which
the list is created. The department shall have up to 30 days from
the date of receipt of the list to object to any of the assets or
transfers of assets identified on the list. If the Department of
Finance objects to assets on the list, the housing successor may
request a meet and confer process within five business days of
receiving the department objection. If the transferred asset is
deemed not to be a housing asset as defined in subdivision (e), it
shall be returned to the successor agency begin delete and the provision of
Section 34178.8 may apply end delete . If a housing asset has been previously
pledged to pay for bonded indebtedness, the successor agency shall
maintain control of the asset in order to pay for the bond debt.

(3) For purposes of this section and Section 34176.1, “housing
successor” means the entity assuming the housing function of a
former redevelopment agency pursuant to this section.

(b) If a city, county, or city and county does not elect to retain
the responsibility for performing housing functions previously
performed by a redevelopment agency, all rights, powers, assets,
duties, and obligations associated with the housing activities of
the agency, excluding enforceable obligations retained by the
successor agency and any amounts in the Low and Moderate
Income Housing Fund, shall be transferred as follows:

(1) If there is no local housing authority in the territorial
jurisdiction of the former redevelopment agency, to the Department
of Housing and Community Development.

(2) If there is one local housing authority in the territorial
jurisdiction of the former redevelopment agency, to that local
housing authority.

(3) If there is more than one local housing authority in the
territorial jurisdiction of the former redevelopment agency, to the
local housing authority selected by the city, county, or city and
county that authorized the creation of the redevelopment agency.

(c) Commencing on the operative date of this part, the housing
successor may enforce affordability covenants and perform related
activities pursuant to applicable provisions of the Community
Redevelopment Law (Part 1 (commencing with Section 33000)),
including, but not limited to, Section 33418.

(d) Except as specifically provided in Section 34191.4, any
funds transferred to the housing successor, together with any funds
generated from housing assets, as defined in subdivision (e), shall
be maintained in a separate Low and Moderate Income Housing
Asset Fund which is hereby created in the accounts of the housing
successor.

(e) For purposes of this part, “housing asset” includes all of the
following:

(1) Any real property, interest in, or restriction on the use of
real property, whether improved or not, and any personal property
provided in residences, including furniture and appliances, all
housing-related files and loan documents, office supplies, software
licenses, and mapping programs, that were acquired for low- and
moderate-income housing purposes, either by purchase or through
a loan, in whole or in part, with any source of funds.

(2) Any funds that are encumbered by an enforceable obligation
to build or acquire low- and moderate-income housing, as defined
by the Community Redevelopment Law (Part 1 (commencing with
Section 33000)) unless required in the bond covenants to be used
for repayment purposes of the bond.

(3) Any loan or grant receivable, funded from the Low and
Moderate Income Housing Fund, from homebuyers, homeowners,
nonprofit or for-profit developers, and other parties that require
occupancy by persons of low or moderate income as defined by
the Community Redevelopment Law (Part 1 (commencing with
Section 33000)).

(4) Any funds derived from rents or operation of properties
acquired for low- and moderate-income housing purposes by other
parties that were financed with any source of funds, including
residual receipt payments from developers, conditional grant
repayments, cost savings and proceeds from refinancing, and
principal and interest payments from homebuyers subject to
enforceable income limits.

(5) A stream of rents or other payments from housing tenants
or operators of low- and moderate-income housing financed with
any source of funds that are used to maintain, operate, and enforce
the affordability of housing or for enforceable obligations
associated with low- and moderate-income housing.

(6) (A) Repayments of loans or deferrals owed to the Low and
Moderate Income Housing Fund pursuant to subparagraph (G) of
paragraph (1) of subdivision (d) of Section 34171, which shall be
used consistent with the affordable housing requirements in the
Community Redevelopment Law (Part 1 (commencing with
Section 33000)).

(B) Loan or deferral 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 paragraph and subdivision (b)
of Section 34191.4 combined shall be equal to one-half of the
increase between the amount distributed to 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. Loan or deferral repayments
made pursuant to this paragraph shall take priority over amounts
to be repaid pursuant to subdivision (b) of Section 34191.4.

(f) If a development includes both low- and moderate-income
housing that meets the definition of a housing asset under
subdivision (e) and other types of property use, including, but not
limited to, commercial use, governmental use, open space, and
parks, the oversight board shall consider the overall value to the
community as well as the benefit to taxing entities of keeping the
entire development intact or dividing the title and control over the
property between the housing successor and the successor agency
or other public or private agencies. The disposition of those assets
may be accomplished by a revenue-sharing arrangement as
approved by the oversight board on behalf of the affected taxing
entities.

(g) (1) (A) The housing successor may designate the use of
and commit indebtedness obligation proceeds that remain after the
satisfaction of enforceable obligations that have been approved in
a Recognized Obligation Payment Schedule and that are consistent
with the indebtedness obligation covenants. The proceeds shall be
derived from indebtedness obligations that were issued for the
purposes of affordable housing prior to January 1, 2011, and were
backed by the Low and Moderate Income Housing Fund.
Enforceable obligations may be satisfied by the creation of reserves
for the projects that are the subject of the enforceable obligation
that are consistent with the contractual obligations for those
projects, or by expending funds to complete the projects.

(B) The housing successor shall provide notice to the successor
agency of any designations of use or commitments of funds
specified in subparagraph (A) that it wishes to make at least 20
days before the deadline for submission of the Recognized
Obligation Payment Schedule to the oversight board. Commitments
and designations shall not be valid and binding on any party until
they are included in an approved and valid Recognized Obligation
Payment Schedule. The review of these designations and
commitments by the successor agency, oversight board, and
Department of Finance shall be limited to a determination that the
designations and commitments are consistent with bond covenants
and that there are sufficient funds available.

(2) Funds shall be used and committed in a manner consistent
with the purposes of the Low and Moderate Income Housing Asset
Fund. Notwithstanding any other law, the successor agency shall
retain and expend the excess housing obligation proceeds at the
discretion of the housing successor, provided that the successor
agency ensures that the proceeds are expended in a manner
consistent with the indebtedness obligation covenants and with
any requirements relating to the tax status of those obligations.
The amount expended shall not exceed the amount of indebtedness
obligation proceeds available and such expenditure shall constitute
the creation of excess housing proceeds expenditures to be paid
from the excess proceeds. Excess housing proceeds expenditures
shall be listed separately on the Recognized Obligation Payment
Schedule submitted by the successor agency.

(h) This section shall not be construed to provide any stream of
tax increment financing.

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 34178.8 of the end insert begin insert Health and Safety Code end insert begin insert is
repealed. end insert

begin delete

34178.8.  

Commencing on the effective date of the act adding
this section, the Controller shall review the activities of successor
agencies in the state to determine if an asset transfer has occurred
after January 31, 2012, between the successor agency and the city,
county, or city and county that created a redevelopment agency,
or any other public agency, that was not made pursuant to an
enforceable obligation on an approved and valid Recognized
Obligation Payment Schedule. If such an asset transfer did occur,
to the extent not prohibited by state and federal law, the Controller
shall order the available assets to be returned to the successor
agency. Upon receiving that order from the Controller, an affected
local agency shall, as soon as practicable, reverse the transfer and
return the applicable assets to the successor agency. This section
shall not apply to housing assets as defined in subdivision (e) of
Section 34176.

end delete

begin delete SECTION 1. end delete
begin insert SEC. 3. end insert   

Section 34191.3 of the Health and Safety Code is
amended to read:

34191.3.  

Notwithstanding Section 34191.1, the requirements
specified in subdivision (e) of Section 34177 and subdivision (a)
of Section 34181 shall be suspended, except as those provisions
apply to the transfers for governmental use, until the Department
of Finance has approved a long-range property management plan
pursuant to subdivision (b) of Section 34191.5, at which point the
plan shall govern, and supersede all other provisions relating to,
the disposition and use of the real property assets of the former
redevelopment agency. If the department has not approved a plan
by January 1, 2016, subdivision (e) of Section 34177 and
subdivision (a) of Section 34181 shall be operative with respect
to that successor agency.

begin delete SEC. 2. end delete
begin insert SEC. 4. end insert   

This act is an urgency statute necessary for the
immediate preservation of the public peace, health, or safety within
the meaning of Article IV of the Constitution and shall go into
immediate effect. The facts constituting the necessity are:

Because the Legislature’s intent in passing Assembly Bill 1484
(Chapter 26 of the Statutes of 2012) was to prevent the “fire sale”
of property through the approval of long-range property
management plans, it is crucial that each successor agency that
receives a finding of completion is also able to receive an approval
for that successor agency’s long-range property management plan
as quickly as possible.