BILL ANALYSIS                                                                                                                                                                                                    �



                                                                  AB 2647
                                                                  Page  1

          Date of Hearing:   May 7, 2014

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                  Mike Gatto, Chair

                   AB 2647 (Wagner) - As Amended:  April 10, 2014 

          Policy Committee:                              Local  
          GovernmentVote:8 - 0

          Urgency:     No                   State Mandated Local Program:  
          Yes    Reimbursable:              Yes

           SUMMARY  

          This bill clarifies property tax revenues attributable to the El  
          Toro Project Area for the former Lake Forest Redevelopment  
          Agency in light of the dissolution of redevelopment.  
          Specifically, this bill:

          Requires the Orange County Auditor Controller to establish a  
          separate Redevelopment Property Tax Trust Fund (Fund) for the  
          former Lake Forest Redevelopment Agency (RDA), and allocate  
          property tax revenues attributable to the El Toro Project Area  
          between the Fund established for the former Orange County  
          Development Agency and the Fund established for the former Lake  
          Forest RDA, according to formula. 

           FISCAL EFFECT  

          1)One-time minor administrative costs to Orange County,  
            reimbursable if the Commission on State Mandates determines  
            this bill contains a reimbursable cost.

          2)Negligible fiscal impact to taxing entities. This bill does  
            not change the dollar amounts flowing to local jurisdictions,  
            it only changes their path.   Clarifying the payment process  
            could result in the underlying taxing jurisdictions, including  
            schools, being paid more promptly and transparently than under  
            the current process.

           COMMENTS  

           1)Purpose  .  This bill seeks to address the unique and confusing  
            process used to transfer funds to the Lake Forest Successor  








                                                                  AB 2647
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            Agency by clarifying the Recognized Obligations Payment  
            Schedule (ROPS) process and making it consistent with the  
            process that all other successor agencies follow regarding  
            property tax payments required under the redevelopment  
            dissolution process. 

           2)Background.  Prior to the incorporation of the City of Lake  
            Forest, the El Toro Redevelopment Project Area was under  
            jurisdictional control of Orange County. When the City of Lake  
            Forest established the Lake Forest RDA and control over the  
            Project Area was subsequently transferred to Lake Forest, the  
            city, county and agency entered into a transfer agreement. The  
            purpose of the transfer agreement was to allow the transfer of  
            tax increment from the project area to the Lake Forest RDA and  
            ensure the protection of the County's pre-existing bond  
            obligations.  
            While the transfer agreement served the county and agency well  
            prior to dissolution, the dissolution legislation did not  
            contemplate this type of transfer structure. As a result, the  
            revenue stream of the El Toro Redevelopment Project Area is  
            now governed by two successor agencies.  This has led to the  
            unique and confusing situation where one agency is being paid  
            from the other agency's ROPS.  According to the author, this  
            has caused significant confusion for the Department of  
            Finance, which has necessitated the expenditure of public  
            resources to clarify its unique circumstance through the meet  
            and confer process. 

           3)There is no opposition to the bill  .


           Analysis Prepared by  :    Jennifer Swenson / APPR. / (916)  
          319-2081