Amended in Assembly March 28, 2014

California Legislature—2013–14 Regular Session

Assembly Bill No. 2493

Introduced by Assembly Member Bloom

February 21, 2014

An act to amend begin delete Section 120110 end delete begin insert Sections 34176 and 34191.4 end insert of the Health and Safety Code, relating to begin delete public health end delete begin insert community redevelopment end insert .

LEGISLATIVE COUNSEL’S DIGEST

AB 2493, as amended, Bloom. begin delete Communicable disease prevention and control end delete begin insert Redevelopment dissolution end insert begin insert : housing projects: bond proceeds. end insert

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Existing law dissolved redevelopment agencies and community development agencies, as of February 1, 2012, and provides for the designation of successor agencies to wind down the affairs of the dissolved redevelopment agencies and to, among other things, make payments due for enforceable obligations and to perform obligations required pursuant to any enforceable obligation. Existing law provides for the transfer of housing assets and functions previously performed by the dissolved redevelopment agency to one of several specified public entities. Existing law authorizes the successor housing entity to designate the use of, and commit, proceeds from indebtedness that was issued for affordable housing purposes prior to January 1, 2011, and was backed by the Low and Moderate Income Housing Fund.

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This bill would instead authorize a successor housing entity to designate the use of, and commit, proceeds from indebtedness that was issued for affordable housing purposes prior to June 28, 2011, and would require the proceeds from bonds issued between January 1, 2011, and June 28, 2011, be used for projects meeting certain criteria established in this bill for projects, to be funded by successor agencies generally, from proceeds of bonds issued during the same period.

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Existing law authorizes the Department of Finance to issue a finding of completion to a successor agency that completes a due diligence review and meets other requirements. Upon receiving a finding of completion, a successor agency is authorized to expend excess bond proceeds derived from bonds issued on or before December 31, 2010, in a manner consistent with the original bond covenants.

end insert begin insert

The bill would expand this authorization to include the expenditure of excess bond proceeds derived from bonds issued on or before June 28, 2011, and would require proceeds derived from bonds issued between January 1, 2011, and June 28, 2011, to be used by successor agencies only for projects meeting certain criteria.

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Existing law establishes the State Department of Public Health and sets forth its powers and duties, including, but not limited to, the licensing and regulation of health facilities, and the prevention and control of communicable diseases, including tuberculosis.

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This bill would make technical, nonsubstantive changes to those provisions.

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Vote: majority. Appropriation: no. Fiscal committee:  begin delete no end delete begin insert yes end insert . State-mandated local program: no.

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

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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 entity assuming the housing functions of the former
redevelopment agency 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 entity assuming the housing
functions of the former redevelopment agency 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 and the provision of Section 34178.8 may
apply. 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.

(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 entity
that assumes the housing functions formerly performed by the
redevelopment agency and receives the transferred housing assets
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 city, county, or city and county or
designated entity pursuant to this section, 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 entity
assuming the housing functions pursuant to this section. Funds in
this account shall be used in accordance with applicable
housing-related provisions of the Community Redevelopment Law
(Part 1 (commencing with Section 33000)).

(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 entity assuming the housing functions pursuant
to this section 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 begin delete January 1, 2011, and were backed by
the Low and Moderate Income Housing Fund end delete begin insert June 28, 2011. Bond
proceeds derived from bonds issued between January 1, 2011, and
June 28, 2011, shall only be used for projects that meet the criteria
set forth in subparagraph (A) or (B) of paragraph (1) of subdivision
(c) of Section 34191.4 end insert . 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 entity assuming the housing functions pursuant to this
section 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 succeeding housing entity, 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) Subdivisions (d) and (e) of Section 33334.3 and any other
applicable sections of the Community Redevelopment Law shall
apply for purposes of funding administrative and planning costs
associated with the implementation of this section. For this purpose,
the term “Low and Moderate Income Housing Fund” shall mean
the “Low and Moderate Income Housing Asset Fund.” This section
shall not be construed to provide any stream of tax increment
financing.

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begin insert SEC. 2. end insert   

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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 34191.7 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 entered into between the redevelopment
agency and the city, county, or city and county that created by the
redevelopment agency shall be deemed to be 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 is an enforceable
obligation, the accumulated interest on the remaining principal
amount of the loan shall be recalculated from origination at the
interest rate earned by funds deposited into the Local Agency
Investment Fund. The 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 interest
rate earned by funds deposited into the Local Agency Investment
Fund. The annual loan repayments provided for in the recognized
obligations 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. 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.

begin insert

(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 sustainable
communities strategy adopted by the appropriate metropolitan
planning organization.

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(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:

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(I) An action approved by the governing body of the city, 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 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 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.

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 that funded an eligible project, meeting the criteria
listed in clauses (i) to (iii), inclusive, of subparagraph (A) with
funds other than redevelopment funds, within the two years prior
to 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

(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.

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SECTION 1.  

Section 120110 of the Health and Safety Code
is amended to read:

120110.  

As used in the Communicable Disease Prevention and
Control Act (Section 27), a person has “active tuberculosis disease”
when either one of the following occur:

(a) A smear or culture taken from any source in the person’s
body has tested positive for tuberculosis, and the person has not
completed the appropriate prescribed course of medication for
active tuberculosis disease.

(b) There is radiographic, current clinical, or laboratory evidence
sufficient to support a medical diagnosis of tuberculosis for which
treatment is indicated.

end delete