AB 2493, as amended, Bloom. Redevelopment dissolution: housing projects: bond proceeds.
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.
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.
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.
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.
Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.
The people of the State of California do enact as follows:
Section 34176 of the Health and Safety Code is
2amended to read:
(a) (1) The city, county, or city and county that
4authorized the creation of a redevelopment agency may elect to
5retain the housing assets and functions previously performed by
6the redevelopment agency. If a city, county, or city and county
7elects to retain the authority to perform housing functions
8previously performed by a redevelopment agency, all rights,
9powers, duties, obligations, and housing assets, as defined in
10subdivision (e), excluding any amounts on deposit in the Low and
11Moderate Income Housing Fund and enforceable obligations
12retained by the successor agency, shall be transferred to the city,
13county, or city and county.
14(2) The entity assuming the
housing functions of the former
15redevelopment agency shall submit to the Department of Finance
16by August 1, 2012, a list of all housing assets that contains an
17explanation of how the assets meet the criteria specified in
P3 1subdivision (e). The Department of Finance shall prescribe the
2format for the submission of the list. The list shall include assets
3transferred between February 1, 2012, and the date upon which
4the list is created. The department shall have up to 30 days from
5the date of receipt of the list to object to any of the assets or
6transfers of assets identified on the list. If the Department of
7Finance objects to assets on the list, the entity assuming the housing
8functions of the former redevelopment agency may request a meet
9and confer process within five business days of receiving the
10department objection. If the transferred asset is deemed not to be
11a housing asset as defined in
subdivision (e), it shall be returned
12to the successor agency and the provision of Section 34178.8 may
13apply. If a housing asset has been previously pledged to pay for
14bonded indebtedness, the successor agency shall maintain control
15of the asset in order to pay for the bond debt.
16(b) If a city, county, or city and county does not elect to retain
17the responsibility for performing housing functions previously
18performed by a redevelopment agency, all rights, powers, assets,
19duties, and obligations associated with the housing activities of
20the agency, excluding enforceable obligations retained by the
21successor agency and any amounts in the Low and Moderate
22Income Housing Fund, shall be transferred as follows:
23(1) If there is no local housing authority in the territorial
24jurisdiction
of the former redevelopment agency, to the Department
25of Housing and Community Development.
26(2) If there is one local housing authority in the territorial
27jurisdiction of the former redevelopment agency, to that local
28housing authority.
29(3) If there is more than one local housing authority in the
30territorial jurisdiction of the former redevelopment agency, to the
31local housing authority selected by the city, county, or city and
32county that authorized the creation of the redevelopment agency.
33(c) Commencing on the operative date of this part, the entity
34that assumes the housing functions formerly performed by the
35redevelopment agency and receives the transferred housing assets
36may enforce affordability covenants and perform
related activities
37pursuant to applicable provisions of the Community
38Redevelopment Law (Part 1 (commencing with Section 33000)),
39including, but not limited to, Section 33418.
P4 1(d) Except as specifically provided in Section 34191.4, any
2funds transferred to the city, county, or city and county or
3designated entity pursuant to this section, together with any funds
4generated from housing assets, as defined in subdivision (e), shall
5be maintained in a separate Low and Moderate Income Housing
6Asset Fund which is hereby created in the accounts of the entity
7assuming the housing functions pursuant to this section. Funds in
8this account shall be used in accordance with applicable
9housing-related provisions of the Community Redevelopment Law
10(Part 1 (commencing with Section 33000)).
11(e) For purposes of this part, “housing asset” includes all of the
12following:
13(1) Any real property, interest in, or restriction on the use of
14real property, whether improved or not, and any personal property
15provided in residences, including furniture and appliances, all
16housing-related files and loan documents, office supplies, software
17licenses, and mapping programs, that were acquired for low- and
18moderate-income housing purposes, either by purchase or through
19a loan, in whole or in part, with any source of funds.
20(2) Any funds that are encumbered by an enforceable obligation
21to build or acquire low- and moderate-income housing, as defined
22by the Community Redevelopment Law (Part 1 (commencing with
23Section 33000)) unless required in the bond covenants to be used
24for
repayment purposes of the bond.
25(3) Any loan or grant receivable, funded from the Low and
26Moderate Income Housing Fund, from homebuyers, homeowners,
27nonprofit or for-profit developers, and other parties that require
28occupancy by persons of low or moderate income as defined by
29the Community Redevelopment Law (Part 1 (commencing with
30Section 33000)).
31(4) Any funds derived from rents or operation of properties
32acquired for low- and moderate-income housing purposes by other
33parties that were financed with any source of funds, including
34residual receipt payments from developers, conditional grant
35repayments, cost savings and proceeds from refinancing, and
36principal and interest payments from homebuyers subject to
37enforceable income limits.
38(5) A stream of rents or other payments from housing tenants
39or operators of low- and moderate-income housing financed with
40any source of funds that are used to maintain, operate, and enforce
P5 1the affordability of housing or for enforceable obligations
2associated with low- and moderate-income housing.
3(6) (A) Repayments of loans or deferrals owed to the Low and
4Moderate Income Housing Fund pursuant to subparagraph (G) of
5paragraph (1) of subdivision (d) of Section 34171, which shall be
6used consistent with the affordable housing requirements in the
7Community Redevelopment Law (Part 1 (commencing with
8Section 33000)).
9(B) Loan or deferral repayments shall not be made prior to the
102013-14 fiscal year. Beginning in the 2013-14 fiscal year, the
11maximum
repayment amount authorized each fiscal year for
12repayments made pursuant to this paragraph and subdivision (b)
13of Section 34191.4 combined shall be equal to one-half of the
14increase between the amount distributed to taxing entities pursuant
15to paragraph (4) of subdivision (a) of Section 34183 in that fiscal
16year and the amount distributed to taxing entities pursuant to that
17paragraph in the 2012-13 base year. Loan or deferral repayments
18made pursuant to this paragraph shall take priority over amounts
19to be repaid pursuant to subdivision (b) of Section 34191.4.
20(f) If a development includes both low- and moderate-income
21housing that meets the definition of a housing asset under
22subdivision (e) and other types of property use, including, but not
23limited to, commercial use, governmental use, open space, and
24parks, the oversight board shall
consider the overall value to the
25community as well as the benefit to taxing entities of keeping the
26entire development intact or dividing the title and control over the
27property between the housing successor and the successor agency
28or other public or private agencies. The disposition of those assets
29may be accomplished by a revenue-sharing arrangement as
30approved by the oversight board on behalf of the affected taxing
31entities.
32(g) (1) (A) The entity assuming the housing functions pursuant
33to this section may designate the use of and commit indebtedness
34obligation proceeds that remain after the satisfaction of enforceable
35obligations that have been approved in a Recognized Obligation
36Payment Schedule and that are consistent with the indebtedness
37obligation covenants. The proceeds shall be derived
from
38indebtedness obligations that were issued for the purposes of
39affordable housing prior to June 28, 2011. Bond proceeds derived
40from bonds issued between January 1, 2011, and June 28, 2011,
P6 1shall only be used for projects that meet the criteria set forth in
2subparagraph (A) or (B) of paragraph (1) of subdivision (c) of
3Section 34191.4. Enforceable obligations may be satisfied by the
4creation of reserves for the projects that are the subject of the
5enforceable obligation that are consistent with the contractual
6obligations for those projects, or by expending funds to complete
7the projects.
8(B) The entity assuming the housing functions pursuant to this
9
section shall provide notice to the successor agency of any
10designations of use or commitments of funds specified in
11subparagraph (A) that it wishes to make at least 20 days before
12the deadline for submission of the Recognized Obligation Payment
13Schedule to the oversight board. Commitments and designations
14shall not be valid and binding on any party until they are included
15in an approved and valid Recognized Obligation Payment
16Schedule. The review of these designations and commitments by
17the successor agency, oversight board, and Department of Finance
18shall be limited to a determination that the designations and
19commitments are consistent with bond covenants and that there
20are sufficient funds available.
21(2) Funds shall be used and committed in a manner consistent
22with the purposes of the Low and Moderate Income Housing
Asset
23Fund. Notwithstanding any other law, the successor agency shall
24retain and expend the excess housing obligation proceeds at the
25discretion of the succeeding housing entity, provided that the
26successor agency ensures that the proceeds are expended in a
27manner consistent with the indebtedness obligation covenants and
28with any requirements relating to the tax status of those obligations.
29The amount expended shall not exceed the amount of indebtedness
30obligation proceeds available and such expenditure shall constitute
31the creation of excess housing proceeds expenditures to be paid
32from the excess proceeds. Excess housing proceeds expenditures
33shall be listed separately on the Recognized Obligation Payment
34Schedule submitted by the successor agency.
35(h) Subdivisions (d) and (e) of Section 33334.3 and any other
36applicable sections of
the Community Redevelopment Law shall
37apply for purposes of funding administrative and planning costs
38associated with the implementation of this section. For this purpose,
39the term “Low and Moderate Income Housing Fund” shall mean
40the “Low and Moderate Income Housing Asset Fund.” This section
P7 1shall not be construed to provide any stream of tax increment
2financing.
begin insertSection 34176 of the end insertbegin insertHealth and Safety Codeend insertbegin insert is
4amended to read:end insert
(a) (1) The city, county, or city and county that
6authorized the creation of a redevelopment agency may elect to
7retain the housing assets and functions previously performed by
8the redevelopment agency. If a city, county, or city and county
9elects to retain the authority to perform housing functions
10previously performed by a redevelopment agency, all rights,
11powers, duties, obligations, and housing assets, as defined in
12subdivision (e), excluding any amounts on deposit in the Low and
13Moderate Income Housing Fund and enforceable obligations
14retained by the successor agency, shall be transferred to the city,
15county, or city and county.
16(2) The housing successor shall submit to the Department of
17Finance by August 1, 2012, a list of all housing
assets that contains
18an explanation of how the assets meet the criteria specified in
19subdivision (e). The Department of Finance shall prescribe the
20format for the submission of the list. The list shall include assets
21transferred between February 1, 2012, and the date upon which
22the list is created. The department shall have up to 30 days from
23the date of receipt of the list to object to any of the assets or
24transfers of assets identified on the list. If the Department of
25Finance objects to assets on the list, the housing successor may
26request a meet and confer process within five business days of
27receiving the department objection. If the transferred asset is
28deemed not to be a housing asset as defined in subdivision (e), it
29shall be returned to the successor agency and the provision of
30Section 34178.8 may apply. If a housing asset has been previously
31pledged to pay for bonded indebtedness, the successor agency shall
32maintain control of the asset in order to pay for the bond debt.
33(3) For purposes of this section and Section 34176.1, “housing
34successor” means the entity assuming the housing function of a
35former redevelopment agency pursuant to this section.
36(b) If a city, county, or city and county does not elect to retain
37the responsibility for performing housing functions previously
38performed by a redevelopment agency, all rights, powers, assets,
39duties, and obligations associated with the housing activities of
40the agency, excluding enforceable obligations retained by the
P8 1successor agency and any amounts in the Low and Moderate
2Income Housing Fund, shall be transferred as follows:
3(1) If there is no local housing authority in the territorial
4jurisdiction of the former redevelopment agency, to the Department
5of Housing and Community Development.
6(2) If there is one local housing authority in the territorial
7jurisdiction of the former redevelopment agency, to that local
8housing authority.
9(3) If there is more than one local housing authority in the
10territorial jurisdiction of the former redevelopment agency, to the
11local housing authority selected by the city, county, or city and
12county that authorized the creation of the redevelopment agency.
13(c) Commencing on the operative date of this part, the housing
14successor may enforce affordability covenants and perform related
15activities pursuant to applicable provisions of the Community
16Redevelopment Law (Part 1 (commencing with Section 33000)),
17including, but not limited to, Section 33418.
18(d) Except as specifically provided in Section 34191.4, any
19funds
transferred to the housing successor, together with any funds
20generated from housing assets, as defined in subdivision (e), shall
21be maintained in a separate Low and Moderate Income Housing
22Asset Fund which is hereby created in the accounts of the housing
23successor.
24(e) For purposes of this part, “housing asset” includes all of the
25following:
26(1) Any real property, interest in, or restriction on the use of
27real property, whether improved or not, and any personal property
28provided in residences, including furniture and appliances, all
29housing-related files and loan documents, office supplies, software
30licenses, and mapping programs, that were acquired for low- and
31moderate-income housing purposes, either by purchase or through
32a loan, in whole or in part, with any source of funds.
33(2) Any funds that are encumbered by
an enforceable obligation
34to build or acquire low- and moderate-income housing, as defined
35by the Community Redevelopment Law (Part 1 (commencing with
36Section 33000)) unless required in the bond covenants to be used
37for repayment purposes of the bond.
38(3) Any loan or grant receivable, funded from the Low and
39Moderate Income Housing Fund, from homebuyers, homeowners,
40nonprofit or for-profit developers, and other parties that require
P9 1occupancy by persons of low or moderate income as defined by
2the Community Redevelopment Law (Part 1 (commencing with
3Section 33000)).
4(4) Any funds derived from rents or operation of properties
5acquired for low- and moderate-income housing purposes by other
6parties that were financed with any source of funds, including
7residual receipt payments from developers, conditional grant
8repayments, cost savings and proceeds from refinancing, and
9principal and
interest payments from homebuyers subject to
10enforceable income limits.
11(5) A stream of rents or other payments from housing tenants
12or operators of low- and moderate-income housing financed with
13any source of funds that are used to maintain, operate, and enforce
14the affordability of housing or for enforceable obligations
15associated with low- and moderate-income housing.
16(6) (A) Repayments of loans or deferrals owed to the Low and
17Moderate Income Housing Fund pursuant to subparagraph (G) of
18paragraph (1) of subdivision (d) of Section 34171, which shall be
19used consistent with the affordable housing requirements in the
20Community Redevelopment Law (Part 1 (commencing with
21Section 33000)).
22(B) Loan or deferral repayments shall not be made prior to the
232013-14 fiscal year. Beginning in the 2013-14
fiscal year, the
24maximum repayment amount authorized each fiscal year for
25repayments made pursuant to this paragraph and subdivision (b)
26of Section 34191.4 combined shall be equal to one-half of the
27increase between the amount distributed to taxing entities pursuant
28to paragraph (4) of subdivision (a) of Section 34183 in that fiscal
29year and the amount distributed to taxing entities pursuant to that
30paragraph in the 2012-13 base year. Loan or deferral repayments
31made pursuant to this paragraph shall take priority over amounts
32to be repaid pursuant to subdivision (b) of Section 34191.4.
33(f) If a development includes both low- and moderate-income
34housing that meets the definition of a housing asset under
35subdivision (e) and other types of property use, including, but not
36limited to, commercial use, governmental use, open space, and
37parks, the oversight board shall consider the overall value to the
38community as well as the benefit to taxing
entities of keeping the
39entire development intact or dividing the title and control over the
40property between the housing successor and the successor agency
P10 1or other public or private agencies. The disposition of those assets
2may be accomplished by a revenue-sharing arrangement as
3approved by the oversight board on behalf of the affected taxing
4entities.
5(g) (1) (A) The housing successor may designate the use of
6and commit indebtedness obligation proceeds that remain after the
7satisfaction of enforceable obligations that have been approved in
8a Recognized Obligation Payment Schedule and that are consistent
9with the indebtedness obligation covenants. The proceeds shall be
10derived from indebtedness obligations that were issued for the
11purposes of affordable housing prior tobegin insert June 28, 2011. Bond
12proceeds derived from bonds
issued betweenend insert January 1, 2011, and
13begin delete were backed by the Low and Moderate Income Housing Fund.end delete
14begin insert June 28, 2011, shall only be used for projects that meet the criteria
15set forth in subparagraph (A) or (B) of paragraph (1) of subdivision
16(c) of Section 34191.4.end insert Enforceable obligations may be satisfied
17by the creation of reserves for the projects that are the subject of
18the enforceable obligation that are consistent with the contractual
19obligations for those projects, or by expending funds to complete
20the projects.
21(B) The housing successor shall provide notice to the successor
22agency of any designations of use or commitments of funds
23specified in subparagraph (A) that it wishes to make at least 20
24days before the deadline for submission
of the Recognized
25Obligation Payment Schedule to the oversight board. Commitments
26and designations shall not be valid and binding on any party until
27they are included in an approved and valid Recognized Obligation
28Payment Schedule. The review of these designations and
29commitments by the successor agency, oversight board, and
30Department of Finance shall be limited to a determination that the
31designations and commitments are consistent with bond covenants
32and that there are sufficient funds available.
33(2) Funds shall be used and committed in a manner consistent
34with the purposes of the Low and Moderate Income Housing Asset
35Fund. Notwithstanding any other law, the successor agency shall
36retain and expend the excess housing obligation proceeds at the
37discretion of the housing successor, provided that the successor
38agency ensures that the proceeds are expended in a manner
39consistent with the indebtedness obligation covenants and with
40any
requirements relating to the tax status of those obligations.
P11 1The amount expended shall not exceed the amount of indebtedness
2obligation proceeds available and such expenditure shall constitute
3the creation of excess housing proceeds expenditures to be paid
4from the excess proceeds. Excess housing proceeds expenditures
5shall be listed separately on the Recognized Obligation Payment
6Schedule submitted by the successor agency.
7(h) This section shall not be construed to provide any stream of
8tax increment financing.
Section 34191.4 of the Health and Safety Code is
10amended to read:
The following provisions shall apply to any successor
12agency that has been issued a finding of completion by the
13Department of Finance:
14(a) All real property and interests in real property identified in
15subparagraph (C) of paragraph (5) of subdivision (c) of Section
1634179.5 shall be transferred to the Community Redevelopment
17Property Trust Fund of the successor agency upon approval by the
18Department of Finance of the long-range property management
19plan submitted by the successor agency pursuant to subdivision
20(b) of Section 34191.7 unless that property is subject to the
21requirements of any existing enforceable obligation.
22(b) (1) Notwithstanding subdivision (d) of Section 34171, upon
23application by the successor agency and approval by the oversight
24board, loan agreements entered into between the redevelopment
25agency and the city, county, or city and county that created by the
26redevelopment agency shall be deemed to be enforceable
27obligations provided that the oversight board makes a finding that
28the loan was for legitimate redevelopment purposes.
29(2) If the oversight board finds that the loan is an enforceable
30obligation, the accumulated interest on the remaining principal
31amount of the loan shall be recalculated from origination at the
32interest rate earned by funds deposited into the Local Agency
33Investment Fund. The loan shall be repaid to the city, county, or
34city and county in accordance with a defined schedule over a
35reasonable term of years at
an interest rate not to exceed the interest
36rate earned by funds deposited into the Local Agency Investment
37Fund. The annual loan repayments provided for in the recognized
38obligations payment schedules shall be subject to all of the
39following limitations:
P12 1(A) Loan repayments shall not be made prior to the 2013-14
2fiscal year. Beginning in the 2013-14 fiscal year, the maximum
3repayment amount authorized each fiscal year for repayments
4made pursuant to this subdivision and paragraph (7) of subdivision
5(e) of Section 34176 combined shall be equal to one-half of the
6increase between the amount distributed to the taxing entities
7pursuant to paragraph (4) of subdivision (a) of Section 34183 in
8that fiscal year and the amount distributed to taxing entities
9pursuant to that paragraph in the 2012-13 base year. Loan or
10deferral repayments made
pursuant to this subdivision shall be
11second in priority to amounts to be repaid pursuant to paragraph
12(7) of subdivision (e) of Section 34176.
13(B) Repayments received by the city, county or city and county
14that formed the redevelopment agency shall first be used to retire
15any outstanding amounts borrowed and owed to the Low and
16Moderate Income Housing Fund of the former redevelopment
17agency for purposes of the Supplemental Educational Revenue
18Augmentation Fund and shall be distributed to the Low and
19Moderate Income Housing Asset Fund established by subdivision
20(d) of Section 34176.
21(C) Twenty percent of any loan repayment shall be deducted
22from the loan repayment amount and shall be transferred to the
23Low and Moderate Income Housing Asset Fund, after all
24outstanding loans
from the Low and Moderate Income Housing
25Fund for purposes of the Supplemental Educational Revenue
26Augmentation Fund have been paid.
27(c) (1) Bond proceeds derived from bonds issued on or before
28
June 28, 2011, shall be used for the purposes for which the bonds
29were sold.
30(A) Bond proceeds derived from bonds issued between January
311, 2011, and June 28, 2011, shall only be used for projects which
32meet the following criteria, as determined by a resolution issued
33by the oversight board:
34(i) The project shall be consistent with thebegin insert applicable regionalend insert
35 sustainable communities strategybegin delete adopted by the appropriate begin insert or alternative planning
36metropolitan planning organization.end delete
37strategy adopted pursuant to Section 65080 of the
Government
38Code that the State Air Resources Board has determined would,
39if implemented, achieve the greenhouse gas emission reduction
40targets established by the board or, if a sustainable communities
P13 1strategy is not required for a region by law, a regional
2transportation plan that includes programs and policies to reduce
3greenhouse gas emissions.end insert
4(ii) Two or more significant planning or implementation actions
5shall have occurred on or before December 31, 2010. The term
6“significant planning and implementation actions” means any of
7the following:
8(I) An action approved by the governing body of the city,begin insert county,
9city and county,end insert the board of the former redevelopment agency,
10or the planning commission
directly related to the planning or
11implementation of the project.
12(II) The project is included within an approved citybegin insert, county, city
13and county,end insert or redevelopment agency planning document,
14including, but not limited to, a redevelopment agency five-year
15implementation plan, capital improvement plan, master plan, or
16other planning document.
17(III) The expenditurebegin insert by the city, county, city and county, or
18project sponsor,end insert of more than twenty-five thousand dollars
19($25,000) on planning related activities for the project within one
20fiscal year, or fifty thousand dollars ($50,000) in total, over
21multiple
fiscal years.
22(iii) Documentation dated on or before December 31, 2010,
23shall be provided indicating the intention to finance all or a portion
24of the project with the future issuance of long-term debt, or
25documentation showing that the issuance of long-term
26redevelopment agency debt was being planned on or before
27December 31, 2010.
28(iv) Each construction contract over one hundred thousand
29dollars ($100,000) shall include a provision that prevailing wage
30will be paid by the contractor and all of that contractor’s
31subcontractors.
32(v) For each construction contract over two hundred fifty
33thousand dollars ($250,000), the successor agency shall require
34prospective contractors to submit a standardized questionnaire and
35financial
statements as part of their bid package, to establish the
36contractor’s financial ability and experience in performing large
37construction projects.
38(B) Any citybegin insert, county, or city and countyend insert that funded an eligible
39project, meeting the criteria listed in clauses (i) to (iii), inclusive,
40of subparagraph (A) with funds other than redevelopment funds,
P14 1between June 28, 2011 and the effective date of the act adding this
2paragraph, shall be eligible to be reimbursed utilizing 2011 bond
3proceeds, if the project meets the purpose for which the bonds
4were issued.
5(2) (A) Notwithstanding Section 34177.3 or any other
6conflicting provision of law, bond proceeds in excess of the
7amounts
needed to satisfy approved enforceable obligations shall
8thereafter be expended in a manner consistent with the original
9bond covenants. Enforceable obligations may be satisfied by the
10creation of reserves for projects that are the subject of the
11enforceable obligation and that are consistent with the contractual
12obligations for those projects, or by expending funds to complete
13the projects. An expenditure made pursuant to this paragraph shall
14constitute the creation of excess bond proceeds obligations to be
15paid from the excess proceeds. Excess bond proceeds obligations
16shall be listed separately on the Recognized Obligation Payment
17Schedule submitted by the successor agency.
18(B) If remaining bond proceeds cannot be spent in a manner
19consistent with the bond covenants pursuant to subparagraph (A),
20the proceeds shall be used to defease
the bonds or to purchase
21those same outstanding bonds on the open market for cancellation.
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