BILL NUMBER: SB 863 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY OCTOBER 7, 2010
INTRODUCED BY Committee on Budget and Fiscal Review
JANUARY 11, 2010
An act relating to the Budget Act of 2010.
An act to amend Sections 16142, 16142.1, and 51244 of, to a
dd Section 16148 to, and to add and repeal Section 51244.3 of,
the Government Code, and to add Sections 33333.14 and 33691.5 to the
Health and Safety Code, relating to local government, making an
appropriation therefor, and declaring the urgency thereof, to take
effect immediately.
LEGISLATIVE COUNSEL'S DIGEST
SB 863, as amended, Committee on Budget and Fiscal Review.
Budget Act of 2010. Local government.
(1) Existing law, the Williamson Act, authorizes a city or county
to enter into 10-year contracts with owners of land devoted to
agricultural use, whereby the owners agree to continue using the
property for that purpose, and the city or county agrees to value the
land accordingly for purposes of property taxation. Existing law
sets forth procedures for reimbursing cities and counties for
property tax revenues not received as a result of these contracts.
This bill would, beginning January 1, 2011, and until January 1,
2015, authorize a county, in any fiscal year in which payments
authorized for reimbursement to a county for lost revenue are less
than 1/2 of the participating county's actual foregone general fund
property tax revenue, to revise the term for newly renewed and new
contracts and require the assessor to value the property, as
specified, based on the revised contract term. The bill would provide
that a landowner may choose to nonrenew and begin the cancellation
process. The bill would also provide that any increased revenues
generated by properties under a new contract shall be paid to the
county. this bill would appropriate $10,000,000 from the General Fund
to the Controller for the 2010-2011 fiscal year to make subvention
payments to counties, as specified.
The bill would provide, in the event that this bill is enacted,
that the provisions of Chapter 391 of the Statutes of 2010 not become
effective.
(2) The Community Redevelopment Law authorizes the establishment
of redevelopment agencies in communities to address the effects of
blight in those communities. Existing law requires each agency to
prepare, or cause to be prepared, and approve a redevelopment plan
for each project area. Existing law requires that a redevelopment
plan contain specified limitations, including, but not limited to, a
limitation on the number of dollars of taxes that may be divided and
allocated to a redevelopment agency.
This bill would, notwithstanding specified provisions, eliminate
the tax increment limit for the redevelopment plan for the Centre
City Redevelopment Project, including, but not limited to, the
original project area, the expanded project area, and the merged
project area.
(3) The Community Redevelopment Law also requires a redevelopment
agency to use at least 20% of tax increments generated from a project
area to increase and improve the community's supply of low- and
moderate-income housing, and those funds to be held in a separate Low
and Moderate Income Housing Fund until used. That law authorizes a
redevelopment agency, from July 1, 2009, to June 30, 2010, inclusive,
to suspend all or part of its required allocation to its Low and
Moderate Income Housing Fund, but requires the redevelopment agency
to repay the revenue diverted during the suspension within a
specified time period, ending as of June 30, 2015. That law requires
redevelopment agencies in this state to make a specified remittance
to county Supplemental Educational Revenue Augmentation Funds for the
2009-10 fiscal year, and another remittance to those funds for the
2010-11 fiscal year. That law subjects a redevelopment agency that
does not make either or both of the required remittances to specified
prohibitions and the requirement that it allocate an additional 5%
of all tax increments it receives for low- and moderate-income
housing for the remainder of the time it receives them.
This bill would exempt a redevelopment agency that fails to
allocate either or both of the required remittances, or to otherwise
arrange for their full payment, as specified, from those prohibitions
and the above-described requirement, if the county auditor certifies
to the Department of Finance that (1) the redevelopment agency
adopted a specified resolution, or specified resolutions, and failed
to make the associated remittance by May 10, 2010, or May 10, 2011,
as applicable, (2) the county reduced the tax increment revenue
payable to the redevelopment agency by at least 20% in the 2009-10
fiscal year, and (3) the redevelopment agency has entered into a
specified agreement with the Department of Finance with respect to
paying the required remittances.
(4)This bill would make legislative findings and declarations as
to the necessity of a special statute for the Centre City
Redevelopment Project of the City of San Diego.
(5) This bill would declare that it is to take effect immediately
as an urgency statute.
This bill would express the intent of the Legislature to enact
statutory changes relating to the Budget Act of 2010.
Vote: majority 2/3 . Appropriation:
no yes . Fiscal committee: no
yes . State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The Legislature hereby finds and
declares all of the following:
(a) A number of historical, educational, and cultural resources of
regional and statewide significance are located within and adjacent
to the Centre City Redevelopment Project of the City of San Diego.
(b) Significant portions of the project area of the Centre City
Redevelopment Project are owned by state, local, and nonprofit
entities and produce no property tax revenue for any taxing entity.
This act will provide a unique opportunity for revitalization and
investment in the area without adverse fiscal impact to the state.
(c) The preservation and feasible reuse of the historical,
educational, and cultural resources of regional and statewide
significance and the completion of a number of major public
infrastructure improvements are essential to eliminate blight and
improve the economic health of the neighborhoods which surround and
are located within the Centre City Redevelopment Project.
(d) It is the intent of the Legislature to permit the financing of
this preservation and reuse project and the construction of major
public infrastructure and of related private development improvements
to feasibly occur by providing necessary public financing that
utilizes tax increment revenues, thereby creating the means to
attract and induce the necessary private investment of capital.
(e) Every dollar of tax increment expended for the Centre City
Redevelopment Project has resulted in the investment of a significant
multiple of dollars by private enterprise and the creation of
thousands of construction and permanent new jobs.
(f) The completion of major public infrastructure improvements
made possible by the immediate increase in bonding capacity resulting
from this act will be accomplished in a coordinated manner as part
of the implementation of the Centre City Redevelopment Project and
will relieve other state and local governmental agencies from the
responsibility of providing or funding those infrastructure
improvements and allow them to focus their limited resources on other
urgent projects.
SEC. 2. Section 16142 of the Government
Code is amended to read:
16142. (a) The Secretary of the Natural Resources
Agency shall direct the Controller to pay annually out of the funds
appropriated by Section 16140, to each eligible county, city, or city
and county, the following amounts for each acre of land within its
regulatory jurisdiction that is assessed pursuant to Section 423,
423.3, 423.4, or 423.5, or 426 if it was previously assessed under
Section 423.4, of the Revenue and Taxation Code:
(1) Five dollars ($5) for prime agricultural land, as defined in
Section 51201.
(2) One dollar ($1) for all land, other than prime agricultural
land, which is devoted to open-space uses of statewide significance,
as defined in Section 16143.
(b) The amount per acre in paragraph (1) of subdivision (a) may be
increased by the Secretary of the Natural Resources
Agency to a figure which would offset any savings due to a more
restrictive determination by the secretary as to what land is devoted
to open-space use of statewide significance.
(c) The amount per acre in subdivision (a) shall only be paid for
10 years from the date that the land was first assessed pursuant to
Section 426 of the Revenue and Taxation Code, if it was previously
assessed under Section 423.4 of that code.
(d) Notwithstanding any other provision of law, for the 2008-09
fiscal year and each fiscal year thereafter, the Controller shall
reduce, by 10 percent, any payment made pursuant to this
subdivision section .
(e) (1) Effective January 1, 2011, if the payment pursuant to this
section for the previous fiscal year is less than one-half of the
participating county's actual foregone general fund property tax
revenue, the county may make a determination to implement subdivision
(b) of Section 51244 and Section 51244.3. The implementation of
these sections shall be suspended for any subsequent fiscal year in
which the payment for the previous fiscal year exceeds one-half of
the foregone general fund property tax revenue.
For purposes of this subdivision, a county's actual foregone
property tax revenue shall be based on the county's respective share
of the general property tax dollars as reflected in the most recent
annual report issued by the State Board of Equalization or 20
percent, whichever is higher.
(2) This subdivision shall remain operative only until January 1,
2015.
SEC. 3. Section 16142.1 of the
Government Code is amended to read:
16142.1. (a) In lieu of the payments made pursuant to Section
16142, in a county that has adopted farmland security zones pursuant
to Section 51296, the Secretary of the Natural Resources
Agency shall direct the Controller to pay annually out of the funds
appropriated by Section 16140, to each eligible county, city, or city
and county, the following amount for each acre of land within its
regulatory jurisdiction that is assessed pursuant to Section 423.4 or
426 of the Revenue and Taxation Code, if it was previously assessed
under Section 423.4 of that code:
Eight dollars ($8) for land that is within, or within three miles
of the boundaries of the sphere of influence of, each incorporated
city.
(b) The amount per acre in subdivision (a) shall only be paid for
10 years from the date that the land was first assessed pursuant to
Section 426 of the Revenue and Taxation Code, if it was previously
assessed under Section 423.4 of that code. The appropriation
authorized by this subdivision shall not exceed one hundred thousand
dollars ($100,000) per year until 2005.
(c) Notwithstanding any other provision of law, for the 2008-09
fiscal year and each fiscal year thereafter, the Controller shall
reduce, by 10 percent, any payments made pursuant to this
subdivision section .
(d) (1) Effective January 1, 2011, if the payment pursuant to this
section for the previous fiscal year is less than one-half of the
participating county's actual foregone general fund property tax
revenue, the county may make a determination to implement subdivision
(b) of Section 51244 and Section 51244.3. The implementation of
these sections shall be suspended for any subsequent fiscal year in
which the payment for the previous fiscal year exceeds one-half of
the foregone general fund property tax revenue.
For purposes of this subdivision, a county's actual foregone
property tax revenue shall be based on the county's respective share
of the general property tax dollars as reflected in the most recent
annual report issued by the State Board of Equalization or 20
percent, whichever is higher.
(2) This subdivision shall remain operative only until January 1,
2015.
SEC. 4. Section 16148 is added to the
Government Code , to read:
16148. Ten million dollars ($10,000,000) is appropriated for the
2010-2011 fiscal year from the General Fund to the Controller to make
subvention payments to counties pursuant to Section 16140 in
proportion to the losses incurred by those counties by reason of the
reduction of assessed property taxes.
SEC. 5. Section 51244 of the Government
Code is amended to read:
51244. (a) Each contract shall be for an
initial term of no less than 10 years. Each contract shall provide
that on the anniversary date of the contract or such other annual
date as specified by the contract a year shall be added automatically
to the initial term unless notice of nonrenewal is given as provided
in Section 51245.
(b) (1) If the county makes a determination pursuant to
subdivision (e) of Section 16142 or subdivision (d) of Section
16142.1, contracts shall be for a term of no less than nine years for
contracts currently 10 years in length or 18 years for contracts
currently 20 years in length, as the case may be. For new contracts
entered into during a year in which this subdivision is in effect,
the initial contract length shall be either nine or 18 years. Each
contract shall provide, except in the initial year of the
determination, that on the anniversary date of the contract or such
other annual date as specified by the contract, a year shall be added
automatically to the initial term unless notice of nonrenewal is
given as provided in Section 51245.
In any subsequent year during the reduced term of contract in
which increased revenue is not realized by the county pursuant to
Section 51244.3, two or three additional years shall be added to the
contract on the next anniversary date, as necessary, to restore the
contract to its full 10-year or 20-year contract length.
(2) In any year in which this subdivision is implemented, the
county shall record a notice that states the affected parcel number
or numbers and current owner's names, or, alternatively, the same
information for those parcels that are not affected.
(3) An addition to the assessed value shall be conveyed to the
auditor, consistent with the 10-percent reduction in the length of
the restriction, equal to 10 percent of the difference between the
valuation pursuant to Section 423, 423.3, or 423.5 of the Revenue and
Taxation Code, as applicable, and the valuation under subdivision
(b) of Section 51 or Section 110.1 of the Revenue and Taxation Code
whichever is lower. If the valuation under subdivision (b) of Section
51 or Section 110.1 of the Revenue and Taxation Code is lower, the
addition to the assessed value shall be zero. The increased amount of
tax revenue that results from the decrease in restriction shall be
separately displayed on the taxpayer's annual bill.
(4) A landowner may elect to serve notice of nonrenewal instead of
accepting a nine-year or 18-year contract, as the case may be. In
that case, the additional assessed value shall not be added to the
property as provided for in paragraph (3).
For purposes of this subdivision, a landowner may serve notice of
nonrenewal at any time. However, a landowner who withdraws that
notice prior to the effective date shall be subject to term
modification and additional assessed value. Once served and
effective, a landowner nonrenewal notice may not be withdrawn except
for cause and with the consent of the county. A county may adopt
amendments to its uniform rules to facilitate implementation of this
subdivision during the 2010-11 fiscal year, and thereafter as
necessary.
(5) In addition to any other notice requirements, a county shall
provide a landowner under contract with timely written notice of all
of the following:
(A) Any initial hearing by the county on a proposal to adopt or
rescind the implementation of this subdivision.
(B) Any final decision regarding the adoption or rescission of
implementation of this subdivision.
(C) The landowner's right to prevent the reduction in the term of
his or her contract pursuant to this subdivision by serving notice of
nonrenewal as specified by Section 51245. This nonrenewal notice may
be combined with the nonrenewal notice in subparagraph (B).
(6) A county shall not modify or revalue a landowner's contract
pursuant to this subdivision unless the landowner is given at least
90 days' notice of the opportunity to prevent the modification and
revaluation by serving notice of nonrenewal and the landowner fails
to serve notice of nonrenewal. The county may use the primary owner
of record from the assessment roll to identify landowners entitled to
receive notice under this subdivision. A landowner shall be advised
of the landowner's right to avoid continued imposition of this
subdivision in any future year and thereafter by serving a notice of
nonrenewal for that contract year. Failure of the landowner to serve
timely notice of nonrenewal in any year shall be considered implied
consent to the implementation of this subdivision for that year.
Until February 1, 2011, the 90-day notice requirement may be
reduced to 60 days if the county adopts a procedure to allow
landowners to serve a notice of nonrenewal.
(7) This subdivision shall not apply to any of the following:
(A) Contracts that have been nonrenewed.
(B) Contracts with cities.
(C) Open-space or agricultural easements.
(D) Scenic restrictions.
(E) Wildlife habitat contracts.
(F) Atypical term contracts, including, but not limited to,
20-year initial term contracts declining to 10 years, or
re-encumbrances pursuant to Section 51295, if the county's board of
supervisors determines the application of this subdivision to them
would be inequitable or administratively infeasible.
(8) This subdivision shall remain operative only until January 1,
2015.
SEC. 6. Section 51244.3 is added to the
Government Code , to read:
51244.3. (a) This section shall apply to properties under a
nine-year or 18-year contract, as the case may be, pursuant to
subdivision (b) of Section 51244. Notwithstanding any other provision
to the contrary, increased revenues generated by those properties
shall be allocated exclusively to the respective counties in which
those properties are located.
(b) This section shall only apply if the county makes a
determination pursuant to either Section 16142 or Section 16142.1.
(c) This section shall remain in effect only until January 1,
2015, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2015, deletes or extends
that date.
SEC. 7. Section 33333.14 is added to the
Health and Safety Code , to read:
33333.14. (a) The Legislature hereby finds and declares that the
Redevelopment Agency of the City of San Diego's Redevelopment Plan
for the Centre City Redevelopment Project, as approved and adopted on
May 11, 1992, by the City Council of the City of San Diego by
Ordinance No. 0-17767, as amended, contains an unrealistically low
dollar limit on the receipt of tax increment. The Legislature further
finds and declares that this limit severely restricts the ability of
the Redevelopment Agency of the City of San Diego to address
conditions of blight which remain within its Centre City
Redevelopment Project.
(b) Notwithstanding any other law to the contrary or any
redevelopment plan previously adopted by the City of San Diego,
commencing on the effective date of this section and in each fiscal
year thereafter until the expiration of the time limit on the receipt
of taxes and repayment of indebtedness set forth in the
redevelopment plan adopted by the City of San Diego for its Centre
City Redevelopment Project pursuant to subdivision (b) of Section
33333.6 and other applicable statutes, the dollar limit on the
receipt of tax increment for the Centre City Redevelopment Project is
eliminated, and the Redevelopment Agency of the City of San Diego
may receive tax increment revenue from the Centre City Redevelopment
Project without a dollar limit.
SEC. 8. Section 33691.5 is added to the
Health and Safety Code , to read:
33691.5. (a) A redevelopment agency that fails to allocate to the
county auditor either or both of the full remittances required
pursuant to subdivision (a) of Section 33690 or subdivision (a) of
Section 33690.5, respectively, or that fails to arrange for full
payment of either or both of those remittances pursuant to
subdivision (c) of Section 33688, subdivision (d) of Section 33691,
or Section 33692, shall be exempt from the prohibitions set forth in
subdivision (e) of Section 33691 and the requirement set forth in
paragraph (4) of subdivision (k) of Section 33334.2, if the county
auditor certifies to the Department of Finance that all of the
following conditions have been met:
(1) The agency adopted the resolution described in paragraph (1)
or paragraph (2) of subdivision (c) of Section 33691, and failed to
make the full remittance by May 10, 2010, or May 10, 2011, as
applicable, pursuant to Section 33692.
(2) The county reduced the tax increment revenue payable to the
agency by at least 20 percent in the 2009-10 fiscal year.
(3) The agency has entered into an agreement with the Department
of Finance, as described in subdivision (d) of Section 33691, with
respect to either or both of the full remittances, and that agreement
(A) commits the agency to paying the remaining amount due to satisfy
either or both of the full remittances over a time period of no more
than the earlier of 30 years or the life of the redevelopment agency
and (B) requires the first payment towards that obligation to be due
to the county on or before May 10, 2011, without regard to whether
that payment is for the full remittance for the 2009-10 fiscal year,
2010-11 fiscal year, or both.
(b) An agency that is making payments as described in paragraph
(3) of subdivision (a) may use all legally available funds to make
those payments, and may pay off the outstanding balance of either or
both of those full remittances at any time.
SEC. 9. (a) If this act is enacted by the
Legislature in the 2009-10 Regular Session, Chapter 391 of the
Statutes of 2010 shall not become effective.
(b) It is the Legislature's intent to make the options in Sections
2, 3, 5, and 6 of this act available, but not required, for use by
counties and landowners for the 2010-11 fiscal year, if feasible, and
no later than the 2011-12 fiscal year.
SEC. 10. The Legislature finds and declares that a
special law is necessary and that a general law cannot be made
applicable within the meaning of Section 16 of Article IV of the
California Constitution because of the unique circumstances facing
the Centre City Redevelopment Project of the City of San Diego.
SEC. 11. 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:
To support state and local governments during the current economic
crisis, it is necessary that this bill go into immediate effect.
SECTION 1. It is the intent of the Legislature
to enact statutory changes relating to the Budget Act of 2010.