Amended in Senate July 9, 2015

Amended in Senate June 18, 2015

California Legislature—2015–16 Regular Session

Assembly BillNo. 113


Introduced by Committee on Budget (Weber (Chair), Bloom, Bonta, Campos, Chiu, Cooper, Gordon, Jones-Sawyer, McCarty, Mullin, Nazarian, O’Donnell, Rodriguez, Thurmond, Ting, and Williams)

January 9, 2015


An act to amend Sections 34171, 34173, 34176, 34176.1, 34177, 34177.3, 34177.5, 34178, 34179, 34179.7, 34180, 34181, 34183, 34186, 34187, 34189, 34191.3, 34191.4, and 34191.5 of, and to add Sections 34170.1, 34177.7, 34179.9, and 34191.6 to, the Health and Safety Code, and to amend Sections 96.11 and 98 of, and to add Section 96.24 to, the Revenue and Taxation Code, relating to local government, and making an appropriation therefor, to take effect immediately, bill related to the budget.

LEGISLATIVE COUNSEL’S DIGEST

AB 113, as amended, Committee on Budget. Local government.

(1) 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.

This bill would provide that any action by the Department of Finance, that occurred on or after June 28, 2011, carrying out the department’s obligations under the provisions described abovebegin delete constituteend deletebegin insert constitutesend insert a department action for the preparation, development, or administration of the state budget and is exempt from the Administrative Procedures Act.

(2) Existing law defines “administrative cost allowance” for the purposes of successor agencies’ duties in the winding down of the affairs of the dissolved redevelopment agencies to mean an amount that is payable from property tax revenues up to a certain percentage of the property tax allocated to the successor agency on the Recognized Obligation Payment Schedule covering a specified period, and up to a certain percentage of the property tax allocated to the Redevelopment Obligation Retirement Fund that is allocated to the successor agency for each fiscal year thereafter.

This bill would restate the definition of “administrative cost allowance” as the maximum amount of administrative costs that may be paid by a successor agency from the Redevelopment Property Tax Trust Fund in a fiscal year. This bill would, commencing July 1, 2016, and for each fiscal year thereafter, limit the administrative cost allowance to an amount not to exceed 3% of the actual property tax distributed to the successor agency for payment of approved enforceable obligations, reduced by the successor agency’s administrative cost allowance and loan payments made to the city, county, or city and county that created the redevelopment agency, as specified, and would limit a successor agency’s annual administrative costs to an amount not to exceed 50% of the total Redevelopment Property Tax Trust Fund distributed to pay enforceable obligations.

(3) Existing law excludes from the term “administrative cost allowance” any administrative costs that can be paid from bond proceeds or from sources other than property tax, any expenses related to assets or obligations, settlements and judgments, and the costs of maintaining assets prior to disposition.

This bill would delete these exclusions and would further require the “administrative cost allowance” to be approved by the oversight board and to be the sole funding source for any legal expenses related to civil actions contesting the validity of laws and actions dissolving and winding down the redevelopment agencies, as specified.

(4) Existing law specifies that the term “enforceable obligation” does not include any agreements, contracts, or arrangements between the city, county, or city and county that created the redevelopment agency and the former redevelopment agency, as specified. Notwithstanding this provision, existing law authorizes certain written agreements to be deemed enforceable obligations.

This bill would additionally authorize written agreements entered into at the time of issuance, but in no event later than June 27, 2011, solely for the refunding or refinancing of other indebtedness obligations that existed prior to January 1, 2011, and solely for the purpose of securing or repaying the refunded or refinanced indebtedness obligations, to be deemed enforceable obligations. This bill would provide that an agreement entered into by the redevelopment agency prior to June 28, 2011, is an enforceable obligation if the agreement relates to state highway infrastructure improvements, as specified.

(5) Existing law authorizes the city, county, or city and county that authorized the creation of a redevelopment agency to loan or grant funds to a successor agency for administrative costs, enforceable obligations, or project related expenses at the city’s discretion.

This bill would limit the authorization to loan or grant funds to the payment of administrative costs or enforceable obligations excluding loans approved pursuant to specified provisions, and to the case in which the successor agency receives an insufficient distribution from the Redevelopment Property Tax Trust Fund, or other approved sources of funding are insufficient, to pay approved enforceable obligations, as specified. This bill would require these loans to be repaid from the source of funds originally approved for payment of the underlying enforceable obligation, as specified. This bill would require the interest on these loans to be calculated on a fixed annual simple basis, and would specify the manner in which these loans are required to be repaid.

(6) 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 were issued for affordable housing purposes prior to January 1, 2011, and were 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 were issued for affordable housing purposes prior to June 28, 2011.

(7) Existing law authorizes the city, county, or city and county that created a redevelopment agency to elect to retain the housing assets and functions previously performed by the redevelopment agency. Existing law requires that any funds transferred to the housing successor, together with any funds generated from housing assets, be maintained in a separate Low and Moderate Income Housing Asset Fund to be used in accordance with applicable housing-related provisions of the Community Redevelopment Law, except as specified. Existing law requires the housing successor to provide an annual independent financial audit of the fund to its governing body, and to post on its Internet Web site specified information.

This bill would require that posted information to also include specified amounts received by the city, county, or city and county.

(8) Existing law requires a successor agency to, among other things, prepare a Recognized Obligation Payment Schedule for payments on enforceable obligations for each 6-month fiscal period.

This bill would revise the timeline for the preparation of the required Recognized Obligation Payment Schedule to require the successor agency to prepare a schedule for a one year fiscal period, with the first of these periods beginning July 1, 2016, and would authorize the Recognized Obligation Payment Schedule to be amended by the oversight board once per Recognized Obligation Payment Schedule period, if the oversight board makes a finding that a revision is necessary for the payment of approved enforceable obligations, as specified.

This bill would, beginning August 1, 2015,begin delete requireend deletebegin insert authorizeend insert successor agencies to submit a Last and Final Recognized Obligation Payment Schedule, which shall list the remaining enforceable obligations of the successor agency and the total outstanding obligation and a schedule of remaining payments for each enforceable obligation, for approval by the oversight board and the Department of Finance if specified conditions are met. This bill would require the department to review the Last and Final Recognized Obligation Payment Schedule, as specified, and would require, upon approval by the department, the Last and Final Recognized Obligation Payment Schedule to establish the maximum amount of Redevelopment Property Tax Trust Funds to be distributed to the successor agency, as specified. This bill would authorize the successor agencies to submit no more than two requests to the department to amend the approved Last and Final Recognized Obligation Payment Schedule, except as specified. This bill would also require the county auditor-controller to review the Last and Final Recognized Obligation Payment Schedule and to continue to allocatebegin delete to allocateend delete moneys in the Redevelopment Property Tax Trust Fund in a specified order of priority.

(9) Existing law prohibits successor agencies from creating new enforceable obligations, except in compliance with an enforceable obligation that existed prior to June 28, 2011. Notwithstanding this provision, existing law authorizes successor agencies to create enforceable obligations to conduct the work of winding down the redevelopment agency, including hiring staff, acquiring necessary professional administrative services and legal counsel, and procuring insurance. Existing law finds and declares that these provisions, when enacted, were declaratory of existing law.

This bill, except as required by an enforceable obligation, would exclude certain work from the authorization to create enforceable obligations, and would prohibit a successor agency that is the city, county, or city and county that formed the redevelopment agency from creating enforceable obligations to repay loans entered into between the redevelopment agency and the city, county, or city and county, except as otherwise provided. This bill would delete those findings and declarations, and would apply the provisions described above retroactively to any successor agency or redevelopment agency actions occurring after June 27, 2012.

(10) Existing law authorizes a successor agency to petition the Department of Finance, if an enforceable obligation provides for an irrevocable commitment of property tax revenue and the allocation of those revenues is expected to occur over time, to provide written confirmation that its determination of this enforceable obligation as approved in a Recognized Obligation Payment Schedule is final and conclusive.

This bill would require the successor agency to petition the department by electronic means and in a manner of the department’s choosing, and would require the successor agency to provide a copy of the petition to the county auditor-controller, as provided. This bill would require the department to provide written confirmation of approval or denial of the request within 100 days of the date of the request.

(11) Existing law provides that agreements, contracts, or arrangements between the city or county, or city and county that created the redevelopment agency and the redevelopment agency are invalid and shall not be binding on the successor agency, except that a successor entity wishing to enter or reenter into agreements with the city, county, or city and county that formed the redevelopment agency may do so upon obtaining approval of its oversight board. Existing law prohibits a successor agency or an oversight board from exercising these powers to restore funding for an enforceable obligation that was deleted or reduced by the Department of Finance, as provided.

This bill would delete that prohibition, and would provide that a duly authorized written agreement entered into at the time of issuance, but in no event later than June 27, 2011, of indebtedness obligations solely for the refunding or refinancing of indebtedness obligations that existed prior to January 1, 2011, and solely for the purpose of securing or repaying the refunded and refinanced indebtedness obligations, is valid and may bind the successor agency.

This bill would prohibit an oversight board from approving any agreements between the successor agency and the city, county, or city and county that formed the redevelopment agency, except as otherwise provided, and would prohibit a successor agency from entering or reentering into any agreements with the city, county, or city and county that formed the redevelopment agency, except as otherwise provided. This bill would also prohibit a successor agency or an oversight board from exercising any powers to restore funding for any item that was denied or reduced by the Department of Finance. This bill would apply these provisions retroactively to all agreements entered or reentered on and after June 27, 2012.

(12) Existing law authorizes the Department of Finance to review an oversight board action and requires written notice and information about all actions taken by an oversight board to be provided to the department by electronic means and in a manner of the department’s choosing.

This bill would require the written notice and information described above to be provided to the department as an approved resolution. This bill would provide that oversight boards are not required to submit certain actions for department approval.

(13) Existing law requires, on and after July 1, 2016, in each county where more than one oversight board was created, as provided, that there be only one oversight board.

This bill, except as otherwise provided, commencing on and after July 1, 2017, if more than one oversight board exists within a county, would require the oversight board to be staffed by the county auditor-controller, by another county entity selected by the county auditor-controller, or by a city within the county selected by the county auditor-controller, as specified. This bill would authorize the county auditor-controller, if only one successor agency exists within the county, to designate the successor agency to staff the oversight board. This bill, commencing July 1, 2017, in each county where more than 40 oversight boards were created, would require 5 oversight boards, as specified.

(14) Existing law requires an oversight board for a successor agency to cease to exist when all of the indebtedness of the dissolved redevelopment agency has been repaid.

This bill would instead generally require an oversight board to cease to exist when the successor agency has been formally dissolved, as specified, and would require a county oversight board to cease to exist when all successor agencies subject to its oversight have been formally dissolved, as specified.

(15) Existing law, upon full payment by a successor agency of specified amounts due, requires the Department of Finance to issue a finding of completion, as specified, within 5 days.

This bill, if a successor agency fails by December 31, 2015, to pay, or to enter into a written installment plan with the Department of Finance for payment of specified amounts, would prohibit the successor agency from ever receiving a finding of completion. This bill, if a successor agency, city, county, or city and county pays, or enters into a written installment plan with the Department of Finance for the payment of specified amounts and the successor agency, city, county, or city and county subsequently receives a final judicial determination that reduces or eliminates the amounts determined, would require an enforceable obligation to be created for the reimbursement of the excess amounts paid and the obligation to make any payments in excess of the amount determined by a final determination to be canceled. This bill, if upon consultation with the county auditor-controller, the Department of Finance finds that a successor agency, city, county, or city and county has failed to fully make one or more payments agreed to in the written installment plan, would prohibit specified provisions from applying to the successor agency and would prohibit specified oversight board actions and any approved long-range property management plan from being effective.

(16) Existing law transfers all assets, properties, contracts, leases, books and records, buildings, and equipment of former redevelopment agencies, as of February 1, 2012, to the control of the successor agency for administration, as specified.

This bill would require the city, county, or city and county that created the former redevelopment agency to return to the successor agency certain assets, cash and cash equivalents that were not required by an enforceable obligation, as specified, and other money or assets that were not required or authorized pursuant to an effective oversight board action or Recognized Obligation Payment Schedule. This bill would authorize certain amounts required to be returned to the successor agency to be placed on a Recognized Obligation Payment Schedule by the successor agency for payment as an enforceable obligation subject to specified conditions.

(17) Existing law requires a request by a successor agency to enter into an agreement with the city, county, or city and county that formed the redevelopment agency to first be approved by the oversight board. Existing law provides that actions to reestablish any other agreements that are in furtherance of enforceable obligations with the city, county, or city and county that formed the redevelopment agency are invalid until they are included in an approved and valid Recognized Obligation Payment Schedule.

This bill would also require a request by the successor agency to reenter into an agreement as described above to first be approved by the oversight board. This bill would also provide that actions to establish any other authorized agreements, as specified, are invalid until they are included in an approved and valid Recognized Obligation Payment Schedule.

(18) Existing law requires the oversight board to direct the successor agency to, among other things, dispose of all assets and properties of the former redevelopment agency, except that the oversight board is authorized to instead direct the successor agency to transfer ownership of those assets that were constructed and used for a governmental purpose, such as roads, school buildings, parks, police and fire stations, libraries, and local agency administrative buildings, to the appropriate public jurisdiction, as provided.

This bill would expand that authorization to include parking facilities and lots dedicated solely to public parking that do not include properties that generate revenues in excess of reasonable maintenance costs of the properties. This bill would authorize a successor agency to amend its long-range property management plan once, solely to allow for retention of real properties that constitute public parking lots, as provided.

(19) Existing law requires, from February 1, 2012, to July 1, 2012, inclusive, and for each fiscal year thereafter, the county auditor-controller, after deducting administrative costs, to allocate property tax revenues in each Redevelopment Property Tax Trust Fund first to each local agency and school entity, as provided.

This bill would require certain revenues attributable to a property tax rate approved by the voters of a city, county, city and county, or special district to make payments in support of pension programs or in support of capital projects and programs related to the State Water Project and levied in addition to the general property tax rate, be allocated to, and when collected be paid into, the fund of that taxing entity, unless those amounts are pledged as security for the payment of any indebtedness obligation.

(20) Existing law requires certain estimates and accounts reported in recognized obligation payment schedules and transferred to the Redevelopment Obligation Retirement Fund to be subject to audit by the county auditor-controller and the Controller.

This bill would instead require the estimates and accounts described above to be reviewed by the county auditor-controller subject to the Department of Finance’s review and approval. This bill would require a successor agency, commencing October 1, 2018, and each October 1 thereafter, to submit the differences between actual payments and past estimated obligations on a Recognized Obligation Payment Schedule to the county auditor-controller for review, and would require the county-auditor controller to provide this information to the Department of Finance, as specified.

(21) Existing law requires a successor agency, when all of the debt of a redevelopment agency has been retired or paid off, to dispose of all remaining assets and terminate its existence within one year of the final debt payment.

This bill would instead require, when all of the enforceable obligations have been retired or paid off, all real property has been disposed of, and all outstanding litigation has been resolved, the successor agency to submit to the oversight board a request, with a copy of the request to the county auditor-controller, to formally dissolve the successor agency. This bill would also require, if a redevelopment agency was not previously allocated property tax revenue, as specified, the successor agency to submit to the oversight board a request to formally dissolve the successor agency. This bill would require the oversight board to approve these requests within 30 days and to submit the request to the Department of Finance for approval or denial, as specified. This bill would require the successor agency to take specified steps, including notifying the oversight board, when the department approves a request to formally dissolve a successor agency. This bill would require the oversight board, upon receipt of notification from the successor agency, to make certain verifications and adopt a final resolution of dissolution for the successor agency, as specified. This bill would, when a successor agency is finally dissolved, with respect to any existing community facilities district formed by a redevelopment agency, require the legislative body of the city or county that formed the redevelopment agency to become the legislative body of the community facilities district, and any existing obligations of the former redevelopment agency or its successor agency to become the obligations of the new legislative body of the community facilities district.

(22) Existing law, with respect to any successor agency that has been issued a finding of completion by the Department of Finance, deems loan agreements entered into between the redevelopment agency and the city, county, or city and county that created the redevelopment agency to be an enforceable obligation, as provided. Existing law specifies the manner in which the interest on the loan should be calculated and how the loan should be repaid. Existing law requires repayments received by the city, county, or city and county that formed the redevelopment agency to be used to retire certain outstanding amounts borrowed and owed, including a distribution to the Low and Moderate Income Housing Asset Fund, as provided. Existing law requires bond proceeds derived from bonds issued on or before December 31, 2010, to be used for the purposes for which the bonds were sold.

This bill would define “loan agreements” for the purposes described above. This bill would change the manner in which the interest on the loan is calculated, and would require moneys repaid to be applied first to the principal and second to the interest. This bill would require distributions to the Low and Moderate Income Housing Asset Fund to be subject to specified reporting requirements. This bill would require bond proceeds derived from bonds issued on or before December 31, 2010, in excess of the amounts needed to satisfy approved enforceable obligations, to be expended in a manner consistent with the original bond covenants. This bill would require bond proceeds derived from bonds issued on or after January 1, 2011, in excess of amounts needed to satisfy approved enforceable obligations, to be used in a manner consistent with the original bond covenants subject to specified conditions. This bill would apply these provisions, and the provisions relating to any successor agency that has been issued a finding of completion by the Department of Finance described above, retroactively to actions occurring on or after June 28, 2011. This bill would also provide that specified changes to existing law shall not result in the denial of specified loans previously approved by the Department of Finance and shall not impact judgments, writs of mandate, and orders entered by the Sacramento Superior Court in specified lawsuits.

(23) Existing law requires a successor agency to prepare a long-range property management plan that addresses the disposition and use of the real properties of the former redevelopment agency.

This bill would require, if the former redevelopment agency did not have real properties, the successor agency to prepare a long-range property management plan, as provided.

(24) Existing law authorizes successor agencies to, among other things, issue bonds or incur indebtedness to refund the bonds or indebtedness of a former redevelopment agency or to finance debt service spikes, as specified. The issuance of bonds or incurrence of other indebtedness by a successor agency is subject to the approval of the oversight board of the successor agency.

This bill would authorize the successor agency to the Redevelopment Agency of the City and County of San Francisco to have the authority, rights, and powers of the Redevelopment Agency to which it succeeded solely for the purpose of issuing bonds or incurring other indebtedness to finance the construction of affordable housing and infrastructure required by specified agreements, subject to the approval of the oversight board. The bill would provide that bonds or other indebtedness authorized by its provisions would be considered indebtedness incurred by the dissolved redevelopment agency, would be listed on the Recognized Obligation Payment Schedule, and would be secured by a pledge of moneys deposited into the Redevelopment Property Tax Trust Fund. The bill would also require the successor agency to make diligent efforts to obtain the lowest long-term cost financing and to make use of an independent financial advisor in developing financing proposals.

This bill would make legislative findings and declarations as to the necessity of a special statute for the City and County of San Francisco.

(25) Existing law requires the county auditor for a county for which a negative sum was calculated pursuant to a specified former statute, in reducing the amount of property tax revenue otherwise allocated to the county by an amount attributable to that negative sum, to apply a reduction amount equal to or based on the reduction amount determined for specified fiscal years.

This bill, for the 2015-16 fiscal year and each fiscal year thereafter, would prohibit the county auditor from applying the reduction amount.

(26) Existing property tax law requires the county auditor, in each fiscal year, to allocate property tax revenue to local jurisdictions in accordance with specified formulas and procedures, and generally requires that each jurisdiction be allocated an amount equal to the total of the amount of revenue allocated to that jurisdiction in the prior fiscal year, subject to certain modifications, and that jurisdiction’s portion of the annual tax increment, as defined. Existing law provides for the computation, on the basis of these allocations, of apportionment factors that are applied to actual property tax revenues in each county in order to determine actual amounts of property tax revenue received by each recipient jurisdiction.

This bill would deem to be correct those property tax revenue apportionment factors that were applied in allocating property tax revenues in the County of San Benito for each fiscal year through the 2000-01 fiscal year. This bill would, notwithstanding specified audit requirements, require the county auditor to make the allocation adjustments identified in the State Controller’s audit of the County of San Benito for the 2001-02 fiscal year. The bill would additionally require property tax apportionment factors applied in allocating property tax revenue in the County of San Benito for the 2002-03 fiscal year and each fiscal year thereafter to be determined on the basis of apportionment factors for prior fiscal years that have been corrected or adjusted as would be required if those prior apportionment factors were not deemed correct by this bill.

This bill would make legislative findings and declarations as to the necessity of a special statute for the County of San Benito.

(27) Existing property tax law reduces the amounts of ad valorem property tax revenue that would otherwise be annually allocated to the county, cities, and special districts pursuant to general allocation requirements by requiring, for purposes of determining property tax revenue allocations in each county for the 1992-93 and 1993-94 fiscal years, that the amounts of property tax revenue deemed allocated in the prior fiscal year to the county, cities, and special districts be reduced in accordance with certain formulas. It requires that the revenues not allocated to the county, cities, and special districts as a result of these reductions be transferred to the Educational Revenue Augmentation Fund (ERAF) in that county for allocation to school districts, community college districts, and the county office of education.

Existing property tax law requires the auditor of each county with qualifying cities, as defined, to make certain property tax revenue allocations to those cities in accordance with a specified Tax Equity Allocation (TEA) formula established in a specified statute and to make corresponding reductions in the amount of property tax revenue that is allocated to the county. Existing law requires the auditor of Santa Clara County, for the 2006-07 fiscal year and for each fiscal year thereafter, to reduce the amount of property tax revenue allocated to qualified cities in that county by the ERAF reimbursement amount, as defined, and to commensurately increase the amount of property tax revenue allocated to the county ERAF, as specified.

This bill would, instead, for the 2015-16 fiscal year and for each fiscal year thereafter, require the auditor of Santa Clara County to reduce the amount of property tax revenues that are required to be allocated from the qualified cities in that county to the county ERAF by a specified percentage of the ERAF reimbursement amount. This bill would prohibit the auditor of Santa Clara County from reducing the amounts allocated to the county ERAF in any fiscal year in which the amount of moneys required to be applied by the state for the support of school districts and community college districts is determined pursuant to Test 1 of Proposition 98.

This bill would make legislative findings and declarations as to the necessity of a special statute for the County of Santa Clara.

(28) This bill would appropriate $23,750,000 from the General Fund to the Department of Forestry and Fire Protection contingent upon the County of Riverside agreeing to forgive amounts owed to it by certain cities.

(29) By imposing new duties upon local government officials with respect to the wind down of the dissolved redevelopment agencies, and in the annual allocation of ad valorem property tax revenues, this bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to these statutory provisions.

(30) This bill would declare that it is to take effect immediately as a bill providing for appropriations related to the Budget Bill.

Vote: majority. Appropriation: yes. Fiscal committee: yes. State-mandated local program: yes.

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

P14   1

SECTION 1.  

Section 34170.1 is added to the Health and Safety
2Code
, to read:

3

34170.1.  

Any action by the department carrying out the
4department’s obligations under this part and Part 1.8 (commencing
5with Section 34161) constitutes a department action for the
6preparation, development, or administration of the state budget
7pursuant to Section 11357 of the Government Code, and is exempt
8from Chapter 3.5 (commencing with Section 11340) of Part 1 of
9Division 3 of Title 2 of the Government Code. This section applies
10retroactively to any action by the department described in this
11section that occurred on or after June 28, 2011.

12

SEC. 2.  

Section 34171 of the Health and Safety Code is
13amended to read:

14

34171.  

The following terms shall have the following meanings:

15(a) “Administrative budget” means the budget for administrative
16costs of the successor agencies as provided in Section 34177.

17(b) (1) “Administrative cost allowance” means the maximum
18amount of administrative costs that may be paid by a successor
19agency from the Redevelopment Property Tax Trust Fund in a
20fiscal year.

21(2) The administrative cost allowance shall be 5 percent of the
22property tax allocated to the successor agency on the Recognized
23Obligation Payment Schedule covering the period January 1, 2012,
24through June 30, 2012. The administrative cost allowance shall be
25up to 3 percent of the property tax allocated to the Redevelopment
26Obligation Retirement Fund for each fiscal year thereafter ending
27on June 30, 2016. However, the administrative cost allowance
28shall not be less than two hundred fifty thousand dollars ($250,000)
29in any fiscal year, unless this amount is reduced by the oversight
30board or by agreement with the successor agency.

31(3) Commencing July 1, 2016, and for each fiscal year thereafter,
32the administrative cost allowance shall be up to 3 percent of the
33actual property tax distributed to the successor agency by the
34county auditor-controller in the preceding fiscal year for payment
35of approved enforceable obligations, reduced by the successor
36agency’s administrative cost allowance and loan repayments made
37to the city, county, or city and county that created the
38redevelopment agency that it succeeded pursuant to subdivision
P15   1(b) of Section 34191.4 during the preceding fiscal year. However,
2the administrative cost allowance shall not be less than two hundred
3fifty thousand dollars ($250,000) in any fiscal year, unless this
4amount is reduced by the oversight board or by agreement between
5the successor agency and the department.

6(4) Notwithstanding paragraph (3), commencing July 1, 2016,
7a successor agency’s annual administrative costs shall not exceed
850 percent of the total Redevelopment Property Tax Trust Fund
9distributed to pay enforceable obligations in the preceding fiscal
10year, which latter amount shall be reduced by the successor
11agency’s administrative cost allowance and loan repayments made
12to the city, county, or city and county that created the
13redevelopment agency that it succeeded pursuant to subdivision
14(b) of Section 34191.4 during the preceding fiscal year. This
15limitation applies to administrative costs whether paid within the
16administrative cost allowance or not, but does not apply to
17administrative costs paid from bond proceeds or grant funds, or,
18in the case of a successor agency that is a designated local
19authority, from sources other than property tax.

20(5) The administrative cost allowance shall be approved by the
21oversight board and shall be the sole funding source for any legal
22expenses related to civil actions, including writ proceedings,
23contesting the validity ofbegin insert this part orend insert Part 1.8begin delete or Part 1.85end delete
24 (commencing with Sectionbegin delete 34170)end deletebegin insert 34161)end insert or challenging acts
25taken pursuant to these parts. Employee costs associated with work
26on specific project implementation activities, including, but not
27limited to, construction inspection, project management, or actual
28construction, shall be considered project-specific costs and shall
29not constitute administrative costs.

30(c) “Designated local authority” shall mean a public entity
31formed pursuant to subdivision (d) of Section 34173.

32(d) (1) “Enforceable obligation” means any of the following:

33(A) Bonds, as defined by Section 33602 and bonds issued
34pursuant to Chapter 10.5 (commencing with Section 5850) of
35Division 6 of Title 1 of the Government Code, including the
36required debt service, reserve set-asides, and any other payments
37required under the indenture or similar documents governing the
38issuance of the outstanding bonds of the former redevelopment
39agency. A reserve may be held when required by the bond
40indenture or when the next property tax allocation will be
P16   1insufficient to pay all obligations due under the provisions of the
2bond for the next payment due in the following half of the calendar
3year.

4(B) Loans of moneys borrowed by the redevelopment agency
5for a lawful purpose, to the extent they are legally required to be
6repaid pursuant to a required repayment schedule or other
7mandatory loan terms.

8(C) Payments required by the federal government, preexisting
9obligations to the state or obligations imposed by state law, other
10than passthrough payments that are made by the county
11auditor-controller pursuant to Section 34183, or legally enforceable
12payments required in connection with the agencies’ employees,
13including, but not limited to, pension payments, pension obligation
14debt service, unemployment payments, or other obligations
15conferred through a collective bargaining agreement. Costs incurred
16to fulfill collective bargaining agreements for layoffs or
17terminations of city employees who performed work directly on
18behalf of the former redevelopment agency shall be considered
19enforceable obligations payable from property tax funds. The
20obligations to employees specified in this subparagraph shall
21remain enforceable obligations payable from property tax funds
22for any employee to whom those obligations apply if that employee
23is transferred to the entity assuming the housing functions of the
24former redevelopment agency pursuant to Section 34176. The
25successor agency or designated local authority shall enter into an
26agreement with the housing entity to reimburse it for any costs of
27the employee obligations.

28(D) Judgments or settlements entered by a competent court of
29law or binding arbitration decisions against the former
30redevelopment agency, other than passthrough payments that are
31made by the county auditor-controller pursuant to Section 34183.
32Along with the successor agency, the oversight board shall have
33the authority and standing to appeal any judgment or to set aside
34any settlement or arbitration decision.

35(E) Any legally binding and enforceable agreement or contract
36that is not otherwise void as violating the debt limit or public
37policy. However, nothing in this act shall prohibit either the
38successor agency, with the approval or at the direction of the
39oversight board, or the oversight board itself from terminating any
40existing agreements or contracts and providing any necessary and
P17   1required compensation or remediation for such termination. Titles
2of or headings used on or in a document shall not be relevant in
3determining the existence of an enforceable obligation.

4(F) (i) Contracts or agreements necessary for the administration
5or operation of the successor agency, in accordance with this part,
6including, but not limited to, agreements concerning litigation
7expenses related to assets or obligations, settlements and
8judgments, and the costs of maintaining assets prior to disposition,
9and agreements to purchase or rent office space, equipment and
10supplies, and pay-related expenses pursuant to Section 33127 and
11for carrying insurance pursuant to Section 33134. Beginning
12January 1, 2016, any legal expenses related to civil actions,
13including writ proceedings, contesting the validity of this part or
14Part 1.8 (commencing with Section 34161) or challenging acts
15taken pursuant to these parts shall only be payable out of the
16administrative cost allowance.

17(ii) A sponsoring entity may provide funds to a successor agency
18for payment of legal expenses related to civil actions initiated by
19the successor agency, including writ proceedings, contesting the
20validity of this part or Part 1.8 (commencing with Section 34161)
21or challenging acts taken pursuant to these parts. If the successor
22agency obtains a final judicial determination granting the relief
23requested in the action, the funds provided by the sponsoring entity
24for legal expenses related to successful causes of action pled by
25the successor agency shall be deemed an enforceable obligation
26for repayment under the terms set forth in subdivision (h) of
27Section 34173. If the successor agency does not receive a final
28judicial determination granting the relief requested, the funds
29provided by the sponsoring entity shall be considered a grant by
30the sponsoring entity and shall not qualify for repayment as an
31enforceable obligation.

32(G) Amounts borrowed from, or payments owing to, the Low
33and Moderate Income Housing Fund of a redevelopment agency,
34which had been deferred as of the effective date of the act adding
35this part; provided, however, that the repayment schedule is
36approved by the oversight board. Repayments shall be transferred
37to the Low and Moderate Income Housing Asset Fund established
38pursuant to subdivision (d) of Section 34176 as a housing asset
39and shall be used in a manner consistent with the affordable
P18   1housing requirements of the Community Redevelopment Law (Part
21 (commencing with Section 33000)).

3(2) For purposes of this part, “enforceable obligation” does not
4include any agreements, contracts, or arrangements between the
5city, county, or city and county that created the redevelopment
6agency and the former redevelopment agency. However, written
7agreements entered into (A) at the time of issuance, but in no event
8later than December 31, 2010, of indebtedness obligations, and
9(B) solely for the purpose of securing or repaying those
10indebtedness obligations may be deemed enforceable obligations
11for purposes of this part. Additionally, written agreements entered
12into (A) at the time of issuance, but in no event later than June 27,
132011, of indebtedness obligations solely for the refunding or
14refinancing of other indebtedness obligations that existed prior to
15January 1, 2011, and (B) solely for the purpose of securing or
16repaying the refunded or refinanced indebtedness obligations may
17be deemed enforceable obligations for purposes of this part.
18Notwithstanding this paragraph, loan agreements entered into
19between the redevelopment agency and the city, county, or city
20and county that created it, within two years of the date of creation
21of the redevelopment agency, may be deemed to be enforceable
22obligations. Notwithstanding this paragraph, an agreement entered
23into by the redevelopment agency prior to June 28, 2011, is an
24enforceable obligation if the agreement relates to state highway
25infrastructure improvements to which the redevelopment agency
26committed funds pursuant to Section 33445.

27(3) Contracts or agreements between the former redevelopment
28agency and other public agencies, to perform services or provide
29funding for governmental or private services or capital projects
30outside of redevelopment project areas that do not provide benefit
31to the redevelopment project and thus were not properly authorized
32under Part 1 (commencing with Section 33000) shall be deemed
33void on the effective date of this part; provided, however, that such
34contracts or agreements for the provision of housing properly
35authorized under Part 1 (commencing with Section 33000) shall
36not be deemed void.

37(e) “Indebtedness obligations” means bonds, notes, certificates
38of participation, or other evidence of indebtedness, issued or
39delivered by the redevelopment agency, or by a joint exercise of
40powers authority created by the redevelopment agency, to
P19   1third-party investors or bondholders to finance or refinance
2redevelopment projects undertaken by the redevelopment agency
3in compliance with the Community Redevelopment Law (Part 1
4(commencing with Section 33000)).

5(f) “Oversight board” shall mean each entity established pursuant
6to Section 34179.

7(g) “Recognized obligation” means an obligation listed in the
8Recognized Obligation Payment Schedule.

9(h) “Recognized Obligation Payment Schedule” means the
10document setting forth the minimum payment amounts and due
11dates of payments required by enforceable obligations for each
12six-month fiscal period until June 30, 2016, as provided in
13subdivision (m) of Section 34177. On and after July 1, 2016,
14“Recognized Obligation Payment Schedule” means the document
15setting forth the minimum payment amounts and due dates of
16payments required by enforceable obligations for each fiscal year
17as provided in subdivision (o) of Section 34177.

18(i) “School entity” means any entity defined as such in
19subdivision (f) of Section 95 of the Revenue and Taxation Code.

20(j) “Successor agency” means the successor entity to the former
21redevelopment agency as described in Section 34173.

22(k) “Taxing entities” means cities, counties, a city and county,
23special districts, and school entities, as defined in subdivision (f)
24of Section 95 of the Revenue and Taxation Code, that receive
25passthrough payments and distributions of property taxes pursuant
26to the provisions of this part.

27(l) “Property taxes” include all property tax revenues, including
28those from unitary and supplemental and roll corrections applicable
29to tax increment.

30(m) “Department” means the Department of Finance unless the
31context clearly refers to another state agency.

32(n) “Sponsoring entity” means the city, county, or city and
33county, or other entity that authorized the creation of each
34redevelopment agency.

35(o) “Final judicial determination” means a final judicial
36determination made by any state court that is not appealed, or by
37a court of appellate jurisdiction that is not further appealed, in an
38action by any party.

39(p) From July 1, 2014, to July 1, 2018, inclusive, “housing entity
40administrative cost allowance” means an amount of up to 1 percent
P20   1of the property tax allocated to the Redevelopment Obligation
2Retirement Fund on behalf of the successor agency for each
3applicable fiscal year, but not less than one hundred fifty thousand
4dollars ($150,000) per fiscal year.

5(1) If a local housing authority assumed the housing functions
6of the former redevelopment agency pursuant to paragraph (2) or
7(3) of subdivision (b) of Section 34176, then the housing entity
8administrative cost allowance shall be listed by the successor
9agency on the Recognized Obligation Payment Schedule. Upon
10approval of the Recognized Obligation Payment Schedule by the
11oversight board and the department, the housing entity
12administrative cost allowance shall be remitted by the successor
13agency on each January 2 and July 1 to the local housing authority
14that assumed the housing functions of the former redevelopment
15agency pursuant to paragraph (2) or (3) of subdivision (b) of
16Section 34176.

17(2) If there are insufficient moneys in the Redevelopment
18Obligations Retirement Fund in a given fiscal year to make the
19payment authorized by this subdivision, the unfunded amount may
20be listed on each subsequent Recognized Obligation Payment
21Schedule until it has been paid in full. In these cases the five-year
22time limit on the payments shall not apply.

23

SEC. 3.  

Section 34173 of the Health and Safety Code is
24amended to read:

25

34173.  

(a) Successor agencies, as defined in this part, are
26hereby designated as successor entities to the former redevelopment
27agencies.

28(b) Except for those provisions of the Community
29Redevelopment Law that are repealed, restricted, or revised
30pursuant to the act adding this part, all authority, rights, powers,
31duties, and obligations previously vested with the former
32redevelopment agencies, under the Community Redevelopment
33Law, are hereby vested in the successor agencies.

34(c) (1) If the redevelopment agency was in the form of a joint
35powers authority, and if the joint powers agreement governing the
36formation of the joint powers authority addresses the allocation of
37assets and liabilities upon dissolution of the joint powers authority,
38then each of the entities that created the former redevelopment
39agency may be a successor agency within the meaning of this part
P21   1and each shall have a share of assets and liabilities based on the
2provisions of the joint powers agreement.

3(2) If the redevelopment agency was in the form of a joint
4powers authority, and if the joint powers agreement governing the
5formation of the joint powers authority does not address the
6allocation of assets and liabilities upon dissolution of the joint
7powers authority, then each of the entities that created the former
8redevelopment agency may be a successor agency within the
9meaning of this part, a proportionate share of the assets and
10liabilities shall be based on the assessed value in the project areas
11within each entity’s jurisdiction, as determined by the county
12assessor, in its jurisdiction as compared to the assessed value of
13land within the boundaries of the project areas of the former
14redevelopment agency.

15(d) (1) A city, county, city and county, or the entities forming
16the joint powers authority that authorized the creation of each
17redevelopment agency may elect not to serve as a successor agency
18under this part. A city, county, city and county, or any member of
19a joint powers authority that elects not to serve as a successor
20agency under this part must file a copy of a duly authorized
21resolution of its governing board to that effect with the county
22auditor-controller no later than January 13, 2012.

23(2) The determination of the first local agency that elects to
24become the successor agency shall be made by the county
25auditor-controller based on the earliest receipt by the county
26auditor-controller of a copy of a duly adopted resolution of the
27local agency’s governing board authorizing such an election. As
28used in this section, “local agency” means any city, county, city
29and county, or special district in the county of the former
30redevelopment agency.

31(3) (A) If no local agency elects to serve as a successor agency
32for a dissolved redevelopment agency, a public body, referred to
33herein as a “designated local authority” shall be immediately
34formed, pursuant to this part, in the county and shall be vested
35with all the powers and duties of a successor agency as described
36in this part. The Governor shall appoint three residents of the
37county to serve as the governing board of the authority. The
38designated local authority shall serve as successor agency until a
39local agency elects to become the successor agency in accordance
40with this section.

P22   1(B) Designated local authority members are protected by the
2immunities applicable to public entities and public employees
3governed by Part 1 (commencing with Section 810) and Part 2
4(commencing with Section 814) of Division 3.6 of Title 1 of the
5Government Code.

6(4) A city, county, or city and county, or the entities forming
7the joint powers authority that authorized the creation of a
8redevelopment agency and that elected not to serve as the successor
9agency under this part, may subsequently reverse this decision and
10agree to serve as the successor agency pursuant to this section.
11Any reversal of this decision shall not become effective for 60
12days after notice has been given to the current successor agency
13and the oversight board and shall not invalidate any action of the
14successor agency or oversight board taken prior to the effective
15date of the transfer of responsibility.

16(e) The liability of any successor agency, acting pursuant to the
17powers granted under the act adding this part, shall be limited to
18the extent of the total sum of property tax revenues it receives
19pursuant to this part and the value of assets transferred to it as a
20successor agency for a dissolved redevelopment agency.

21(f) Any existing cleanup plans and liability limits authorized
22under the Polanco Redevelopment Act (Article 12.5 (commencing
23with Section 33459) of Chapter 4 of Part 1) shall be transferred to
24the successor agency and may be transferred to the successor
25housing entity at that entity’s request.

26(g) A successor agency is a separate public entity from the public
27agency that provides for its governance and the two entities shall
28not merge. The liabilities of the former redevelopment agency
29shall not be transferred to the sponsoring entity and the assets shall
30not become assets of the sponsoring entity. A successor agency
31has its own name, can be sued, and can sue. All litigation involving
32a redevelopment agency shall automatically be transferred to the
33successor agency. The separate former redevelopment agency
34employees shall not automatically become sponsoring entity
35employees of the sponsoring entity and the successor agency shall
36retain its own collective bargaining status. As successor entities,
37successor agencies succeed to the organizational status of the
38former redevelopment agency, but without any legal authority to
39participate in redevelopment activities, except to complete any
40work related to an approved enforceable obligation. Each successor
P23   1agency shall be deemed to be a local entity for purposes of the
2Ralph M. Brown Act (Chapter 9 (commencing with Section 54950)
3of Part 1 of Division 2 of Title 5 of the Government Code).

4(h) (1) The city, county, or city and county that authorized the
5creation of a redevelopment agency may loan or grant funds to a
6successor agency for the payment of administrative costs or
7enforceable obligations excluding loans approved under this
8subdivision or pursuant to Section 34191.4, or project-related
9expenses that qualify as an enforceable obligation, and only to the
10extent that the successor agency receives an insufficient distribution
11from the Redevelopment Property Tax Trust Fund, or other
12approved sources of funding are insufficient, to pay approved
13enforceable obligations in the recognized obligation payment
14schedule period. The receipt and use of these funds shall be
15reflected on the Recognized Obligation Payment Schedule or the
16administrative budget and therefore are subject to the oversight
17and approval of the oversight board. An enforceable obligation
18shall be deemed to be created for the repayment of those loans. A
19loan made under this subdivision shall be repaid from the source
20of funds originally approved for payment of the underlying
21enforceable obligation in the Recognized Obligation Payment
22Schedule once sufficient funds become available from that source.
23The interest payable on any loan created pursuant to this
24subdivision shall be calculated on a fixed annual simple basis and
25applied to the outstanding principal amount until fully paid, at a
26rate not to exceed the most recently published interest rate earned
27by funds deposited into the Local Agency Investment Fund during
28the previous fiscal quarter. Repayment of loans created under this
29subdivision shall be applied first to principal, and second to interest,
30and shall be subordinate to other approved enforceable obligations.
31Loans created under this subdivision shall be repaid to the extent
32property tax revenue allocated to the successor agency is available
33after fulfilling other enforceable obligations approved in the
34Recognized Obligation Payment Schedule.

35(2) This subdivision shall not apply where the successor
36agency’s distribution from the Redevelopment Property Tax Trust
37Fund has been reduced pursuant to Section 34179.6 or 34186.

38(i) At the request of the city, county, or city and county,
39notwithstanding Section 33205, all land use related plans and
40functions of the former redevelopment agency are hereby
P24   1transferred to the city, county, or city and county that authorized
2the creation of a redevelopment agency; provided, however, that
3the city, county, or city and county shall not create a new project
4area, add territory to, or expand or change the boundaries of a
5project area, or take any action that would increase the amount of
6obligated property tax (formerly tax increment) necessary to fulfill
7any existing enforceable obligation beyond what was authorized
8as of June 27, 2011.

9

SEC. 4.  

Section 34176 of the Health and Safety Code is
10amended to read:

11

34176.  

(a) (1) The city, county, or city and county that
12authorized the creation of a redevelopment agency may elect to
13retain the housing assets and functions previously performed by
14the redevelopment agency. If a city, county, or city and county
15elects to retain the authority to perform housing functions
16previously performed by a redevelopment agency, all rights,
17powers, duties, obligations, and housing assets, as defined in
18subdivision (e), excluding any amounts on deposit in the Low and
19Moderate Income Housing Fund and enforceable obligations
20retained by the successor agency, shall be transferred to the city,
21county, or city and county.

22(2) The housing successor shall submit to the Department of
23Finance by August 1, 2012, a list of all housing assets that contains
24an explanation of how the assets meet the criteria specified in
25subdivision (e). The Department of Finance shall prescribe the
26format for the submission of the list. The list shall include assets
27transferred between February 1, 2012, and the date upon which
28the list is created. The department shall have up to 30 days from
29the date of receipt of the list to object to any of the assets or
30transfers of assets identified on the list. If the Department of
31Finance objects to assets on the list, the housing successor may
32request a meet and confer process within five business days of
33receiving the department objection. If the transferred asset is
34deemed not to be a housing asset as defined in subdivision (e), it
35shall be returned to the successor agency. If a housing asset has
36been previously pledged to pay for bonded indebtedness, the
37successor agency shall maintain control of the asset in order to
38pay for the bond debt.

P25   1(3) For purposes of this section and Section 34176.1, “housing
2successor” means the entity assuming the housing function of a
3former redevelopment agency pursuant to this section.

4(b) If a city, county, or city and county does not elect to retain
5the responsibility for performing housing functions previously
6performed by a redevelopment agency, all rights, powers, assets,
7duties, and obligations associated with the housing activities of
8the agency, excluding enforceable obligations retained by the
9successor agency and any amounts in the Low and Moderate
10Income Housing Fund, shall be transferred as follows:

11(1) If there is no local housing authority in the territorial
12jurisdiction of the former redevelopment agency, to the Department
13of Housing and Community Development.

14(2) If there is one local housing authority in the territorial
15jurisdiction of the former redevelopment agency, to that local
16housing authority.

17(3) If there is more than one local housing authority in the
18territorial jurisdiction of the former redevelopment agency, to the
19local housing authority selected by the city, county, or city and
20county that authorized the creation of the redevelopment agency.

21(c) Commencing on the operative date of this part, the housing
22successor may enforce affordability covenants and perform related
23activities pursuant to applicable provisions of the Community
24Redevelopment Law (Part 1 (commencing with Section 33000)),
25including, but not limited to, Section 33418.

26(d) Except as specifically provided in Section 34191.4, any
27funds transferred to the housing successor, together with any funds
28generated from housing assets, as defined in subdivision (e), shall
29be maintained in a separate Low and Moderate Income Housing
30Asset Fund which is hereby created in the accounts of the housing
31successor.

32(e) For purposes of this part, “housing asset” includes all of the
33following:

34(1) Any real property, interest in, or restriction on the use of
35real property, whether improved or not, and any personal property
36provided in residences, including furniture and appliances, all
37housing-related files and loan documents, office supplies, software
38licenses, and mapping programs, that were acquired for low- and
39moderate-income housing purposes, either by purchase or through
40a loan, in whole or in part, with any source of funds.

P26   1(2) Any funds that are encumbered by an enforceable obligation
2to build or acquire low- and moderate-income housing, as defined
3by the Community Redevelopment Law (Part 1 (commencing with
4Section 33000)) unless required in the bond covenants to be used
5for repayment purposes of the bond.

6(3) Any loan or grant receivable, funded from the Low and
7Moderate Income Housing Fund, from homebuyers, homeowners,
8nonprofit or for-profit developers, and other parties that require
9occupancy by persons of low or moderate income as defined by
10the Community Redevelopment Law (Part 1 (commencing with
11Section 33000)).

12(4) Any funds derived from rents or operation of properties
13acquired for low- and moderate-income housing purposes by other
14parties that were financed with any source of funds, including
15residual receipt payments from developers, conditional grant
16repayments, cost savings and proceeds from refinancing, and
17principal and interest payments from homebuyers subject to
18enforceable income limits.

19(5) A stream of rents or other payments from housing tenants
20or operators of low- and moderate-income housing financed with
21any source of funds that are used to maintain, operate, and enforce
22the affordability of housing or for enforceable obligations
23associated with low- and moderate-income housing.

24(6) (A) Repayments of loans or deferrals owed to the Low and
25Moderate Income Housing Fund pursuant to subparagraph (G) of
26paragraph (1) of subdivision (d) of Section 34171, which shall be
27used consistent with the affordable housing requirements in the
28Community Redevelopment Law (Part 1 (commencing with
29Section 33000)).

30(B) Loan or deferral repayments shall not be made prior to the
312013-14 fiscal year. Beginning in the 2013-14 fiscal year, the
32maximum repayment amount authorized each fiscal year for
33 repayments made pursuant to this paragraph and subdivision (b)
34of Section 34191.4 combined shall be equal to one-half of the
35increase between the amount distributed to taxing entities pursuant
36 to paragraph (4) of subdivision (a) of Section 34183 in that fiscal
37year and the amount distributed to taxing entities pursuant to that
38paragraph in the 2012-13 base year. Loan or deferral repayments
39made pursuant to this paragraph shall take priority over amounts
40to be repaid pursuant to subdivision (b) of Section 34191.4.

P27   1(f) If a development includes both low- and moderate-income
2housing that meets the definition of a housing asset under
3subdivision (e) and other types of property use, including, but not
4limited to, commercial use, governmental use, open space, and
5parks, the oversight board shall consider the overall value to the
6community as well as the benefit to taxing entities of keeping the
7entire development intact or dividing the title and control over the
8property between the housing successor and the successor agency
9or other public or private agencies. The disposition of those assets
10may be accomplished by a revenue-sharing arrangement as
11approved by the oversight board on behalf of the affected taxing
12entities.

13(g) (1) (A) The housing successor may designate the use of
14and commit indebtedness obligation proceeds that remain after the
15satisfaction of enforceable obligations that have been approved in
16a Recognized Obligation Payment Schedule and that are consistent
17with the indebtedness obligation covenants. The proceeds shall be
18derived from indebtedness obligations that were issued for the
19purposes of affordable housing prior to June 28, 2011, and were
20backed by the Low and Moderate Income Housing Fund.
21Enforceable obligations may be satisfied by the creation of reserves
22for the projects that are the subject of the enforceable obligation
23that are consistent with the contractual obligations for those
24projects, or by expending funds to complete the projects. It is the
25intent of the Legislature to authorize housing successors to
26designate the use of and commit 100 percent of indebtedness
27obligation proceeds described in this subparagraph.

28(B) The housing successor shall provide notice to the successor
29agency of any designations of use or commitments of funds
30specified in subparagraph (A) that it wishes to make at least 20
31days before the deadline for submission of the Recognized
32Obligation Payment Schedule to the oversight board. Commitments
33and designations shall not be valid and binding on any party until
34they are included in an approved and valid Recognized Obligation
35Payment Schedule. The review of these designations and
36commitments by the successor agency, oversight board, and
37Department of Finance shall be limited to a determination that the
38designations and commitments are consistent with bond covenants
39and that there are sufficient funds available.

P28   1(2) Funds shall be used and committed in a manner consistent
2with the purposes of the Low and Moderate Income Housing Asset
3Fund. Notwithstanding any other law, the successor agency shall
4retain and expend the excess housing obligation proceeds at the
5discretion of the housing successor, provided that the successor
6agency ensures that the proceeds are expended in a manner
7consistent with the indebtedness obligation covenants and with
8any requirements relating to the tax status of those obligations.
9The amount expended shall not exceed the amount of indebtedness
10obligation proceeds available and such expenditure shall constitute
11the creation of excess housing proceeds expenditures to be paid
12from the excess proceeds. Excess housing proceeds expenditures
13shall be listed separately on the Recognized Obligation Payment
14Schedule submitted by the successor agency.

15(h) This section shall not be construed to provide any stream of
16tax increment financing.

17

SEC. 5.  

Section 34176.1 of the Health and Safety Code is
18amended to read:

19

34176.1.  

Funds in the Low and Moderate Income Housing
20Asset Fund described in subdivision (d) of Section 34176 shall be
21subject to the provisions of the Community Redevelopment Law
22(Part 1 (commencing with Section 33000)) relating to the Low and
23Moderate Income Housing Fund, except as follows:

24(a) Subdivision (d) of Section 33334.3 and subdivision (a) of
25Section 33334.4 shall not apply. Instead, funds received from the
26successor agency for items listed on the Recognized Obligation
27Payment Schedule shall be expended to meet the enforceable
28obligations, and the housing successor shall expend all other funds
29in the Low and Moderate Income Housing Asset Fund as follows:

30(1) For the purpose of monitoring and preserving the long-term
31 affordability of units subject to affordability restrictions or
32covenants entered into by the redevelopment agency or the housing
33successor and for the purpose of administering the activities
34described in paragraphs (2) and (3), a housing successor may
35expend per fiscal year up to an amount equal to 5 percent of the
36statutory value of real property owned by the housing successor
37and of loans and grants receivable, including real property and
38loans and grants transferred to the housing successor pursuant to
39Section 34176 and real property purchased and loans and grants
40made by the housing successor. If this amount is less than two
P29   1hundred thousand dollars ($200,000) for any given fiscal year, the
2housing successor may expend up to two hundred thousand dollars
3($200,000) in that fiscal year for these purposes. The Department
4of Housing and Community Development shall annually publish
5on its Internet Web site an adjustment to this amount to reflect any
6change in the Consumer Price Index for All Urban Consumers
7published by the federal Department of Labor for the preceding
8calendar year. For purposes of this paragraph, “statutory value of
9real property” means the value of properties formerly held by the
10former redevelopment agency as listed on the housing asset transfer
11form approved by the department pursuant to paragraph (2) of
12subdivision (a) of Section 34176, the value of the properties
13transferred to the housing successor pursuant to subdivision (f) of
14Section 34181, and the purchase price of properties purchased by
15the housing successor.

16(2) Notwithstanding Section 33334.2, if the housing successor
17has fulfilled all obligations pursuant to Sections 33413 and 33418,
18the housing successor may expend up to two hundred fifty thousand
19dollars ($250,000) per fiscal year for homeless prevention and
20rapid rehousing services for individuals and families who are
21homeless or would be homeless but for this assistance, including
22the provision of short-term or medium-term rental assistance,
23housing relocation and stabilization services including housing
24 search, mediation, or outreach to property owners, credit repair,
25security or utility deposits, utility payments, rental assistance for
26a final month at a location, moving cost assistance, and case
27management, or other appropriate activities for homelessness
28prevention and rapid rehousing of persons who have become
29homeless.

30(3) (A) The housing successor shall expend all funds remaining
31in the Low and Moderate Income Housing Asset Fund after the
32expenditures allowed pursuant to paragraphs (1) and (2) for the
33development of housing affordable to and occupied by households
34earning 80 percent or less of the area median income, with at least
3530 percent of these remaining funds expended for the development
36of rental housing affordable to and occupied by households earning
3730 percent or less of the area median income and no more than 20
38percent of these remaining funds expended for the development
39of housing affordable to and occupied by households earning
40between 60 percent and 80 percent of the area median income. A
P30   1housing successor shall demonstrate in the annual report described
2in subdivision (f), for 2019, and every five years thereafter, that
3the housing successor’s expenditures from January 1, 2014, through
4the end of the latest fiscal year covered in the report comply with
5the requirements of this subparagraph.

6(B) If the housing successor fails to comply with the extremely
7low income requirement in any five-year report, then the housing
8successor shall ensure that at least 50 percent of these remaining
9funds expended in each fiscal year following the latest fiscal year
10following the report are expended for the development of rental
11housing affordable to, and occupied by, households earning 30
12percent or less of the area median income until the housing
13successor demonstrates compliance with the extremely low income
14requirement in an annual report described in subdivision (f).

15(C) If the housing successor exceeds the expenditure limit for
16households earning between 60 percent and 80 percent of the area
17median income in any five-year report, the housing successor shall
18not expend any of the remaining funds for households earning
19between 60 percent and 80 percent of the area median income until
20the housing successor demonstrates compliance with this limit in
21an annual report described in subdivision (f).

22(D) For purposes of this subdivision, “development” means new
23construction, acquisition and rehabilitation, substantial
24rehabilitation as defined in Section 33413, the acquisition of
25long-term affordability covenants on multifamily units as described
26in Section 33413, or the preservation of an assisted housing
27development that is eligible for prepayment or termination or for
28which within the expiration of rental restrictions is scheduled to
29occur within five years as those terms are defined in Section
3065863.10 of the Government Code. Units described in this
31subparagraph may be counted towards any outstanding obligations
32pursuant to Section 33413, provided that the units meet the
33requirements of that section and are counted as provided in that
34section.

35(b) Subdivision (b) of Section 33334.4 shall not apply. Instead,
36if the aggregate number of units of deed-restricted rental housing
37restricted to seniors and assisted individually or jointly by the
38housing successor, its former redevelopment agency, and its host
39jurisdiction within the previous 10 years exceeds 50 percent of the
40aggregate number of units of deed-restricted rental housing assisted
P31   1individually or jointly by the housing successor, its former
2redevelopment agency, and its host jurisdiction within the same
3time period, then the housing successor shall not expend these
4funds to assist additional senior housing units until the housing
5successor or its host jurisdiction assists, and construction has
6commenced, a number of units available to all persons, regardless
7of age, that is equal to 50 percent of the aggregate number of units
8of deed-restricted rental housing units assisted individually or
9jointly by the housing successor, its former redevelopment agency,
10and its host jurisdiction within the time period described above.

11(c) (1) Program income a housing successor receives shall not
12be associated with a project area and, notwithstanding subdivision
13(g) of Section 33334.2, may be expended anywhere within the
14jurisdiction of the housing successor or transferred pursuant to
15paragraph (2) without a finding of benefit to a project area. For
16purposes of this paragraph, “program income” means the sources
17described in paragraphs (3), (4), and (5) of subdivision (e) of
18Section 34176 and interest earned on deposits in the account.

19(2) Two or more housing successors within a county, within a
20single metropolitan statistical area, within 15 miles of each other,
21or that are in contiguous jurisdictions may enter into an agreement
22to transfer funds among their respective Low and Moderate Income
23Housing Asset Funds for the sole purpose of developing transit
24priority projects as defined in subdivisions (a) and (b) of Section
2521155 of the Public Resources Code, permanent supportive housing
26as defined in paragraph (2) of subdivision (b) of Section 50675.14,
27housing for agricultural employees as defined in subdivision (g)
28of Section 50517.5, or special needs housing as defined in federal
29or state law or regulation if all of the following conditions are met:

30(A) Each participating housing successor has made a finding
31based on substantial evidence, after a public hearing, that the
32agreement to transfer funds will not cause or exacerbate racial,
33ethnic, or economic segregation.

34(B) The development to be funded shall not be located in a
35census tract where more than 50 percent of its population is very
36low income, unless the development is within one-half mile of a
37major transit stop or high-quality transit corridor as defined in
38paragraph (3) of subdivision (b) of Section 21155 of the Public
39Resources Code.

P32   1(C) The completed development shall not result in a reduction
2in the number of housing units or a reduction in the affordability
3of housing units on the site where the development is to be built.

4(D) A transferring housing successor shall not have any
5outstanding obligations pursuant to Section 33413.

6(E) No housing successor may transfer more than one million
7dollars ($1,000,000) per fiscal year.

8(F) The jurisdictions of the transferring and receiving housing
9successors each have an adopted housing element that the
10Department of Housing and Community Development has found
11pursuant to Section 65585 of the Government Code to be in
12substantial compliance with the requirements of Article 10.6
13(commencing with Section 65580) of Chapter 3 of Division 1 of
14Title 7 of the Government Code and have submitted to the
15Department of Housing and Community Development the annual
16progress report required by Section 65400 of the Government Code
17within the preceding 12 months.

18(G) Transferred funds shall only assist rental units affordable
19to, and occupied by, households earning 60 percent or less of the
20area median income.

21(H) Transferred funds not encumbered within two years shall
22 be transferred to the Department of Housing and Community
23Development for expenditure pursuant to the Multifamily Housing
24Program or the Joe Serna, Jr. Farmworker Housing Grant Program.

25(d) Sections 33334.10 and 33334.12 shall not apply. Instead, if
26a housing successor has an excess surplus, the housing successor
27shall encumber the excess surplus for the purposes described in
28paragraph (3) of subdivision (a) or transfer the funds pursuant to
29paragraph (2) of subdivision (c) within three fiscal years. If the
30housing successor fails to comply with this subdivision, the housing
31successor, within 90 days of the end of the third fiscal year, shall
32transfer any excess surplus to the Department of Housing and
33Community Development for expenditure pursuant to the
34Multifamily Housing Program or the Joe Serna, Jr. Farmworker
35Housing Grant Program. For purposes of this subdivision, “excess
36surplus” shall mean an unencumbered amount in the account that
37 exceeds the greater of one million dollars ($1,000,000) or the
38aggregate amount deposited into the account during the housing
39successor’s preceding four fiscal years, whichever is greater.

P33   1(e) Section 33334.16 shall not apply to interests in real property
2acquired on or after February 1, 2012. With respect to interests in
3real property acquired by the former redevelopment agency prior
4to February 1, 2012, the time periods described in Section 33334.16
5shall be deemed to have commenced on the date that the
6department approved the property as a housing asset.

7(f) Section 33080.1 of this code and Section 12463.3 of the
8Government Code shall not apply. Instead, the housing successor
9shall conduct, and shall provide to its governing body, an
10independent financial audit of the Low and Moderate Income
11Housing Asset Fund within six months after the end of each fiscal
12year, which may be included in the independent financial audit of
13the host jurisdiction. If the housing successor is a city or county,
14it shall also include in its report pursuant to Section 65400 of the
15Government Code and post on its Internet Web site all of the
16following information for the previous fiscal year. If the housing
17successor is not a city or county, it shall also provide to its
18governing body and post on its Internet Web site all of the
19following information for the previous fiscal year:

20(1) The amount the city, county, or city and county received
21pursuant to subparagraph (A) of paragraph (3) of subdivision (b)
22of Section 34191.4.

23(2) The amount deposited to the Low and Moderate Income
24Housing Asset Fund, distinguishing between amounts deposited
25pursuant to subparagraphs (B) and (C) of paragraph (3) of
26subdivision (b) of Section 34191.4, amounts deposited for other
27items listed on the Recognized Obligation Payment Schedule, and
28other amounts deposited.

29(3) A statement of the balance in the fund as of the close of the
30fiscal year, distinguishing any amounts held for items listed on the
31Recognized Obligation Payment Schedule from other amounts.

32(4) A description of expenditures from the fund by category,
33including, but not limited to, expenditures (A) for monitoring and
34preserving the long-term affordability of units subject to
35affordability restrictions or covenants entered into by the
36redevelopment agency or the housing successor and administering
37the activities described in paragraphs (2) and (3) of subdivision
38(a), (B) for homeless prevention and rapid rehousing services for
39the development of housing described in paragraph (2) of
P34   1subdivision (a), and (C) for the development of housing pursuant
2to paragraph (3) of subdivision (a).

3(5) As described in paragraph (1) of subdivision (a), the statutory
4value of real property owned by the housing successor, the value
5of loans and grants receivable, and the sum of these two amounts.

6(6) A description of any transfers made pursuant to paragraph
7(2) of subdivision (c) in the previous fiscal year and, if still
8unencumbered, in earlier fiscal years and a description of and status
9update on any project for which transferred funds have been or
10will be expended if that project has not yet been placed in service.

11(7) A description of any project for which the housing successor
12receives or holds property tax revenue pursuant to the Recognized
13Obligation Payment Schedule and the status of that project.

14(8) For interests in real property acquired by the former
15redevelopment agency prior to February 1, 2012, a status update
16on compliance with Section 33334.16. For interests in real property
17acquired on or after February 1, 2012, a status update on the
18project.

19(9) A description of any outstanding obligations pursuant to
20Section 33413 that remained to transfer to the housing successor
21on February 1, 2012, of the housing successor’s progress in meeting
22those obligations, and of the housing successor’s plans to meet
23unmet obligations. In addition, the housing successor shall include
24in the report posted on its Internet Web site the implementation
25plans of the former redevelopment agency.

26(10) The information required by subparagraph (B) of paragraph
27(3) of subdivision (a).

28(11) The percentage of units of deed-restricted rental housing
29restricted to seniors and assisted individually or jointly by the
30housing successor, its former redevelopment agency, and its host
31jurisdiction within the previous 10 years in relation to the aggregate
32number of units of deed-restricted rental housing assisted
33individually or jointly by the housing successor, its former
34redevelopment agency, and its host jurisdiction within the same
35time period.

36(12) The amount of any excess surplus, the amount of time that
37the successor agency has had excess surplus, and the housing
38successor’s plan for eliminating the excess surplus.

39(13) An inventory of homeownership units assisted by the
40former redevelopment agency or the housing successor that are
P35   1subject to covenants or restrictions or to an adopted program that
2protects the former redevelopment agency’s investment of moneys
3from the Low and Moderate Income Housing Fund pursuant to
4subdivision (f) of Section 33334.3. This inventory shall include
5all of the following information:

6(A) The number of those units.

7(B) In the first report pursuant to this subdivision, the number
8of units lost to the portfolio after February 1, 2012, and the reason
9or reasons for those losses. For all subsequent reports, the number
10of the units lost to the portfolio in the last fiscal year and the reason
11for those losses.

12(C) Any funds returned to the housing successor as part of an
13adopted program that protects the former redevelopment agency’s
14investment of moneys from the Low and Moderate Income Housing
15Fund.

16(D) Whether the housing successor has contracted with any
17outside entity for the management of the units and, if so, the
18identity of the entity.

19

SEC. 6.  

Section 34177 of the Health and Safety Code is
20amended to read:

21

34177.  

Successor agencies are required to do all of the
22following:

23(a) Continue to make payments due for enforceable obligations.

24(1) On and after February 1, 2012, and until a Recognized
25Obligation Payment Schedule becomes operative, only payments
26required pursuant to an enforceable obligations payment schedule
27shall be made. The initial enforceable obligation payment schedule
28shall be the last schedule adopted by the redevelopment agency
29under Section 34169. However, payments associated with
30obligations excluded from the definition of enforceable obligations
31by paragraph (2) of subdivision (d) of Section 34171 shall be
32excluded from the enforceable obligations payment schedule and
33be removed from the last schedule adopted by the redevelopment
34agency under Section 34169 prior to the successor agency adopting
35it as its enforceable obligations payment schedule pursuant to this
36subdivision. The enforceable obligation payment schedule may
37be amended by the successor agency at any public meeting and
38shall be subject to the approval of the oversight board as soon as
39the board has sufficient members to form a quorum. In recognition
40of the fact that the timing of the California Supreme Court’s ruling
P36   1in the case California Redevelopment Association v. Matosantos
2(2011) 53 Cal.4th 231 delayed the preparation by successor
3agencies and the approval by oversight boards of the January 1,
42012, through June 30, 2012, Recognized Obligation Payment
5Schedule, a successor agency may amend the Enforceable
6Obligation Payment Schedule to authorize the continued payment
7of enforceable obligations until the time that the January 1, 2012,
8through June 30, 2012, Recognized Obligation Payment Schedule
9has been approved by the oversight board and by the department.
10The successor agency may utilize reasonable estimates and
11projections to support payment amounts for enforceable obligations
12if the successor agency submits appropriate supporting
13documentation of the basis for the estimate or projection to the
14Department of Finance and the auditor-controller.

15(2) The department, the county auditor-controller, and the
16Controller shall each have the authority to require any documents
17associated with the enforceable obligations to be provided to them
18in a manner of their choosing. Any taxing entity, the department,
19and the Controller shall each have standing to file a judicial action
20to prevent a violation under this part and to obtain injunctive or
21other appropriate relief.

22(3) Commencing on the date the Recognized Obligation Payment
23Schedule is valid pursuant to subdivision (l), only those payments
24listed in the Recognized Obligation Payment Schedule may be
25made by the successor agency from the funds specified in the
26Recognized Obligation Payment Schedule. In addition, after it
27becomes valid, the Recognized Obligation Payment Schedule shall
28supersede the Statement of Indebtedness, which shall no longer
29be prepared nor have any effect under the Community
30Redevelopment Law (Part 1 (commencing with Section 33000)).

31(4) Nothing in the act adding this part is to be construed as
32preventing a successor agency, with the prior approval of the
33oversight board, as described in Section 34179, from making
34payments for enforceable obligations from sources other than those
35listed in the Recognized Obligation Payment Schedule.

36(5) From February 1, 2012, to July 1, 2012, a successor agency
37shall have no authority and is hereby prohibited from accelerating
38payment or making any lump-sum payments that are intended to
39prepay loans unless such accelerated repayments were required
40prior to the effective date of this part.

P37   1(b) Maintain reserves in the amount required by indentures,
2trust indentures, or similar documents governing the issuance of
3outstanding redevelopment agency bonds.

4(c) Perform obligations required pursuant to any enforceable
5obligation.

6(d) Remit unencumbered balances of redevelopment agency
7funds to the county auditor-controller for distribution to the taxing
8entities, including, but not limited to, the unencumbered balance
9of the Low and Moderate Income Housing Fund of a former
10redevelopment agency. In making the distribution, the county
11auditor-controller shall utilize the same methodology for allocation
12and distribution of property tax revenues provided in Section
1334188.

14(e) Dispose of assets and properties of the former redevelopment
15agency as directed by the oversight board; provided, however, that
16the oversight board may instead direct the successor agency to
17transfer ownership of certain assets pursuant to subdivision (a) of
18Section 34181. The disposal is to be done expeditiously and in a
19manner aimed at maximizing value. Proceeds from asset sales and
20related funds that are no longer needed for approved development
21projects or to otherwise wind down the affairs of the agency, each
22as determined by the oversight board, shall be transferred to the
23county auditor-controller for distribution as property tax proceeds
24under Section 34188. The requirements of this subdivision shall
25not apply to a successor agency that has been issued a finding of
26completion by the department pursuant to Section 34179.7.

27(f) Enforce all former redevelopment agency rights for the
28benefit of the taxing entities, including, but not limited to,
29continuing to collect loans, rents, and other revenues that were due
30to the redevelopment agency.

31(g) Effectuate transfer of housing functions and assets to the
32appropriate entity designated pursuant to Section 34176.

33(h) Expeditiously wind down the affairs of the redevelopment
34agency pursuant to the provisions of this part and in accordance
35with the direction of the oversight board.

36(i) Continue to oversee development of properties until the
37contracted work has been completed or the contractual obligations
38of the former redevelopment agency can be transferred to other
39parties. Bond proceeds shall be used for the purposes for which
P38   1bonds were sold unless the purposes can no longer be achieved,
2in which case, the proceeds may be used to defease the bonds.

3(j) Prepare a proposed administrative budget and submit it to
4the oversight board for its approval. The proposed administrative
5budget shall include all of the following:

6(1) Estimated amounts for successor agency administrative costs
7for the upcoming six-month fiscal period.

8(2) Proposed sources of payment for the costs identified in
9paragraph (1).

10(3) Proposals for arrangements for administrative and operations
11services provided by a city, county, city and county, or other entity.

12(k) Provide administrative cost estimates, from its approved
13administrative budget that are to be paid from property tax revenues
14deposited in the Redevelopment Property Tax Trust Fund, to the
15county auditor-controller for each six-month fiscal period.

16(l) (1) Before each fiscal period set forth in subdivision (m) or
17(o), as applicable, prepare a Recognized Obligation Payment
18Schedule in accordance with the requirements of this paragraph.
19For each recognized obligation, the Recognized Obligation
20Payment Schedule shall identify one or more of the following
21sources of payment:

22(A) Low and Moderate Income Housing Fund.

23(B) Bond proceeds.

24(C) Reserve balances.

25(D) Administrative cost allowance.

26(E) The Redevelopment Property Tax Trust Fund, but only to
27the extent no other funding source is available or when payment
28from property tax revenues is required by an enforceable obligation
29or by the provisions of this part.

30(F) Other revenue sources, including rents, concessions, asset
31sale proceeds, interest earnings, and any other revenues derived
32from the former redevelopment agency, as approved by the
33oversight board in accordance with this part.

34(2) A Recognized Obligation Payment Schedule shall not be
35deemed valid unless all of the following conditions have been met:

36(A) A Recognized Obligation Payment Schedule is prepared
37by the successor agency for the enforceable obligations of the
38former redevelopment agency. The initial schedule shall project
39the dates and amounts of scheduled payments for each enforceable
40obligation for the remainder of the time period during which the
P39   1redevelopment agency would have been authorized to obligate
2property tax increment had the a redevelopment agency not been
3dissolved.

4(B) The Recognized Obligation Payment Schedule is submitted
5to and duly approved by the oversight board. The successor agency
6shall submit a copy of the Recognized Obligation Payment
7Schedule to the county administrative officer, the county
8auditor-controller, and the department at the same time that the
9successor agency submits the Recognized Obligation Payment
10Schedule to the oversight board for approval.

11(C) A copy of the approved Recognized Obligation Payment
12Schedule is submitted to the county auditor-controller, the
13Controller’s office, and the Department of Finance, and is posted
14on the successor agency’s Internet Web site.

15(3) The Recognized Obligation Payment Schedule shall be
16forward looking to the next six months or one year pursuant to
17subdivision (m) or (o), as applicable. The first Recognized
18Obligation Payment Schedule shall be submitted to the Controller’s
19office and the department by April 15, 2012, for the period of
20January 1, 2012, to June 30, 2012, inclusive. This Recognized
21Obligation Payment Schedule shall include all payments made by
22the former redevelopment agency between January 1, 2012, through
23January 31, 2012, and shall include all payments proposed to be
24made by the successor agency from February 1, 2012, through
25June 30, 2012. Former redevelopment agency enforceable
26obligation payments due, and reasonable or necessary
27administrative costs due or incurred, prior to January 1, 2012, shall
28be made from property tax revenues received in the spring of 2011
29property tax distribution, and from other revenues and balances
30transferred to the successor agency.

31(m) (1) The Recognized Obligation Payment Schedule for the
32period of January 1, 2013, to June 30, 2013, shall be submitted by
33the successor agency, after approval by the oversight board, no
34later than September 1, 2012. Commencing with the Recognized
35Obligation Payment Schedule covering the period July 1, 2013,
36through December 31, 2013, successor agencies shall submit an
37oversight board-approved Recognized Obligation Payment
38Schedule to the department and to the county auditor-controller
39no fewer than 90 days before the date of property tax distribution.
40The department shall make its determination of the enforceable
P40   1obligations and the amounts and funding sources of the enforceable
2obligations no later than 45 days after the Recognized Obligation
3Payment Schedule is submitted. Within five business days of the
4department’s determination, a successor agency may request
5additional review by the department and an opportunity to meet
6and confer on disputed items, except for those items which are the
7subject of litigation disputing the department’s previous or related
8determination. The meet and confer period may vary; an untimely
9submittal of a Recognized Obligation Payment Schedule may result
10in a meet and confer period of less than 30 days. The department
11shall notify the successor agency and the county auditor-controllers
12as to the outcome of its review at least 15 days before the date of
13property tax distribution.

14(A) The successor agency shall submit a copy of the Recognized
15Obligation Payment Schedule to the department electronically,
16and the successor agency shall complete the Recognized Obligation
17Payment Schedule in the manner provided for by the department.
18A successor agency shall be in noncompliance with this paragraph
19if it only submits to the department an electronic message or a
20letter stating that the oversight board has approved a Recognized
21Obligation Payment Schedule.

22(B) If a successor agency does not submit a Recognized
23Obligation Payment Schedule by the deadlines provided in this
24subdivision, the city, county, or city and county that created the
25redevelopment agency, if it is acting as the successor agency, shall
26be subject to a civil penalty equal to ten thousand dollars ($10,000)
27per day for every day the schedule is not submitted to the
28department. The civil penalty shall be paid to the county
29 auditor-controller for allocation to the taxing entities under Section
3034183. If a successor agency fails to submit a Recognized
31Obligation Payment Schedule by the deadline, any creditor of the
32successor agency or the Department of Finance or any affected
33taxing entity shall have standing to and may request a writ of
34mandate to require the successor agency to immediately perform
35this duty. Those actions may be filed only in the County of
36Sacramento and shall have priority over other civil matters.
37Additionally, if an agency does not submit a Recognized Obligation
38Payment Schedule within 10 days of the deadline, the maximum
39administrative cost allowance for that period shall be reduced by
4025 percent.

P41   1(C) If a successor agency fails to submit to the department an
2oversight board-approved Recognized Obligation Payment
3Schedule that complies with all requirements of this subdivision
4within five business days of the date upon which the Recognized
5Obligation Payment Schedule is to be used to determine the amount
6of property tax allocations, the department may determine if any
7amount should be withheld by the county auditor-controller for
8payments for enforceable obligations from distribution to taxing
9entities, pending approval of a Recognized Obligation Payment
10Schedule. The county auditor-controller shall distribute the portion
11of any of the sums withheld pursuant to this paragraph to the
12affected taxing entities in accordance with paragraph (4) of
13subdivision (a) of Section 34183 upon notice by the department
14that a portion of the withheld balances are in excess of the amount
15of enforceable obligations. The county auditor-controller shall
16distribute withheld funds to the successor agency only in
17accordance with a Recognized Obligation Payment Schedule
18approved by the department. County auditor-controllers shall lack
19the authority to withhold any other amounts from the allocations
20provided for under Section 34183 or 34188 unless required by a
21court order.

22(D) (i) The Recognized Obligation Payment Schedule payments
23required pursuant to this subdivision may be scheduled beyond
24the existing Recognized Obligation Payment Schedule cycle upon
25a showing that a lender requires cash on hand beyond the
26Recognized Obligation Payment Schedule cycle.

27(ii) When a payment is shown to be due during the Recognized
28Obligation Payment Schedule period, but an invoice or other billing
29document has not yet been received, the successor agency may
30utilize reasonable estimates and projections to support payment
31amounts for enforceable obligations if the successor agency submits
32appropriate supporting documentation of the basis for the estimate
33or projection to the department and the auditor-controller.

34(iii) A Recognized Obligation Payment Schedule may also
35include appropriation of moneys from bonds subject to passage
36during the Recognized Obligation Payment Schedule cycle when
37an enforceable obligation requires the agency to issue the bonds
38and use the proceeds to pay for project expenditures.

39(2) The requirements of this subdivision shall apply until
40December 31, 2015.

P42   1(n) Cause a postaudit of the financial transactions and records
2of the successor agency to be made at least annually by a certified
3public accountant.

4(o) (1) Commencing with the Recognized Obligation Payment
5Schedule covering the period from July 1, 2016, to June 30, 2017,
6inclusive, and for each period from July 1 to June 30, inclusive,
7thereafter, a successor agency shall submit an oversight
8board-approved Recognized Obligation Payment Schedule to the
9department and to the county auditor-controller no later than
10February 1, 2016, and each February 1 thereafter. The department
11shall make its determination of the enforceable obligations and
12the amounts and funding sources of the enforceable obligations
13no later than April 15, 2016, and each April 15 thereafter. Within
14five business days of the department’s determination, a successor
15agency may request additional review by the department and an
16opportunity to meet and confer on disputed items, except for those
17items which are the subject of litigation disputing the department’s
18previous or related determination. An untimely submittal of a
19Recognized Obligation Payment Schedule may result in a meet
20and confer period of less than 30 days. The department shall notify
21the successor agency and the county auditor-controller as to the
22outcome of its review at least 15 days before the date of the first
23property tax distribution for that period.

24(A) The successor agency shall submit a copy of the Recognized
25Obligation Payment Schedule to the department in the manner
26provided for by the department.

27(B) If a successor agency does not submit a Recognized
28 Obligation Payment Schedule by the deadlines provided in this
29subdivision, the city, county, or city and county that created the
30redevelopment agency, if acting as the successor agency, shall be
31subject to a civil penalty equal to ten thousand dollars ($10,000)
32per day for every day the schedule is not submitted to the
33department. The civil penalty shall be paid to the county
34auditor-controller for allocation to the taxing entities under Section
3534183. If a successor agency fails to submit a Recognized
36Obligation Payment Schedule by the deadline, any creditor of the
37successor agency or the department or any affected taxing entity
38shall have standing to, and may request a writ of mandate to,
39require the successor agency to immediately perform this duty.
40Those actions may be filed only in the County of Sacramento and
P43   1shall have priority over other civil matters. Additionally, if an
2agency does not submit a Recognized Obligation Payment Schedule
3within 10 days of the deadline, the maximum administrative cost
4 for that period shall be reduced by 25 percent.

5(C) If a successor agency fails to submit to the department an
6oversight board-approved Recognized Obligation Payment
7Schedule that complies with all requirements of this subdivision
8within five business days of the date upon which the Recognized
9Obligation Payment Schedule is to be used to determine the amount
10of property tax allocations, the department may determine if any
11amount should be withheld by the county auditor-controller for
12payments for enforceable obligations from distribution to taxing
13entities, pending approval of a Recognized Obligation Payment
14Schedule. The county auditor-controller shall distribute the portion
15of any of the sums withheld pursuant to this paragraph to the
16affected taxing entities in accordance with paragraph (4) of
17subdivision (a) of Section 34183 upon notice by the department
18that a portion of the withheld balances are in excess of the amount
19of enforceable obligations. The county auditor-controller shall
20distribute withheld funds to the successor agency only in
21accordance with a Recognized Obligation Payment Schedule
22approved by the department. County auditor-controllers do not
23have the authority to withhold any other amounts from the
24allocations provided for under Section 34183 or 34188 except as
25required by a court order.

26(D) (i) The Recognized Obligation Payment Schedule payments
27required pursuant to this subdivision may be scheduled beyond
28the existing Recognized Obligation Payment Schedule cycle upon
29a showing that a lender requires cash on hand beyond the
30Recognized Obligation Payment Schedule cycle.

31(ii) When a payment is shown to be due during the Recognized
32Obligation Payment Schedule period, but an invoice or other billing
33document has not yet been received, the successor agency may
34utilize reasonable estimates and projections to support payment
35amounts for enforceable obligations if the successor agency submits
36appropriate supporting documentation of the basis for the estimate
37or projection to the department and the county auditor-controller.

38(iii) A Recognized Obligation Payment Schedule may also
39include a request to use proceeds from bonds expected to be issued
40during the Recognized Obligation Payment Schedule cycle when
P44   1an enforceable obligation requires the agency to issue the bonds
2and use the proceeds to pay for project expenditures.

3(E) Once per Recognized Obligation Payment Schedule period,
4and no later than October 1, a successor agency may submit one
5amendment to the Recognized Obligation Payment Schedule
6approved by the department pursuant to this subdivision, if the
7oversight board makes a finding that a revision is necessary for
8the payment of approved enforceable obligations during the second
9one-half of the Recognized Obligation Payment Schedule period,
10which shall be defined as January 1 to June 30, inclusive. A
11successor agency may only amend the amount requested for
12payment of approved enforceable obligations. The revised
13Recognized Obligation Payment Schedule shall be approved by
14the oversight board and submitted to the department by electronic
15means in a manner of the department’s choosing. The department
16shall notify the successor agency and the county auditor-controller
17as to the outcome of the department’s review at least 15 days before
18the date of the property tax distribution.

19(2) The requirements of this subdivision shall apply on and after
20January 1, 2016.

21

SEC. 7.  

Section 34177.3 of the Health and Safety Code is
22amended to read:

23

34177.3.  

(a) Successor agencies shall lack the authority to,
24and shall not, create new enforceable obligations or begin
25redevelopment work, except in compliance with an enforceable
26obligation, as defined by subdivision (d) of Section 34171, that
27existed prior to June 28, 2011.

28(b) Notwithstanding subdivision (a), successor agencies may
29create enforceable obligations to conduct the work of winding
30down the redevelopment agency, including hiring staff, acquiring
31necessary professional administrative services and legal counsel,
32and procuring insurance. Except as required by an enforceable
33obligation, the work of winding down the redevelopment agency
34does not include planning, design, redesign, development,
35demolition, alteration, construction, construction financing, site
36remediation, site development or improvement, land clearance,
37seismic retrofits, and other similar work. Successor agencies may
38not create enforceable obligations to repay loans entered into
39between the redevelopment agency that it is succeeding and the
40city, county, or city and county that formed the redevelopment
P45   1agency that it is succeeding, except as provided in Chapter 9
2(commencing with Section 34191.1).

3(c) Successor agencies shall lack the authority to, and shall not,
4transfer any powers or revenues of the successor agency to any
5other party, public or private, except pursuant to an enforceable
6obligation on a Recognized Obligation Payment Schedule approved
7by the department. Any such transfers of authority or revenues
8that are not made pursuant to an enforceable obligation on a
9Recognized Obligation Payment Schedule approved by the
10department are hereby declared to be void, and the successor
11agency shall take action to reverse any of those transfers. The
12Controller may audit any transfer of authority or revenues
13prohibited by this section and may order the prompt return of any
14money or other things of value from the receiving party.

15(d) Redevelopment agencies that resolved to participate in the
16Voluntary Alternative Redevelopment Program under Chapter 6
17of the First Extraordinary Session of the Statutes of 2011 were and
18are subject to the provisions of Part 1.8 (commencing with Section
1934161). Any actions taken by redevelopment agencies to create
20obligations after June 27, 2011, are ultra vires and do not create
21enforceable obligations.

22(e) The provisions of this section shall apply retroactively to
23any successor agency or redevelopment agency actions occurring
24on or after June 27, 2012.

25

SEC. 8.  

Section 34177.5 of the Health and Safety Code is
26amended to read:

27

34177.5.  

(a) In addition to the powers granted to each
28successor agency, and notwithstanding anything in the act adding
29this part, including, but not limited to, Sections 34162 and 34189,
30a successor agency shall have the authority, rights, and powers of
31the redevelopment agency to which it succeeded solely for the
32following purposes:

33(1) For the purpose of issuing bonds or incurring other
34indebtedness to refund the bonds or other indebtedness of its former
35redevelopment agency or of the successor agency to provide
36savings to the successor agency, provided that (A) the total interest
37cost to maturity on the refunding bonds or other indebtedness plus
38the principal amount of the refunding bonds or other indebtedness
39shall not exceed the total remaining interest cost to maturity on
40the bonds or other indebtedness to be refunded plus the remaining
P46   1principal of the bonds or other indebtedness to be refunded, and
2(B) the principal amount of the refunding bonds or other
3indebtedness shall not exceed the amount required to defease the
4refunded bonds or other indebtedness, to establish customary debt
5service reserves, and to pay related costs of issuance. If the
6foregoing conditions are satisfied, the initial principal amount of
7the refunding bonds or other indebtedness may be greater than the
8outstanding principal amount of the bonds or other indebtedness
9to be refunded. The successor agency may pledge to the refunding
10bonds or other indebtedness the revenues pledged to the bonds or
11other indebtedness being refunded, and that pledge, when made
12in connection with the issuance of such refunding bonds or other
13indebtedness, shall have the same lien priority as the pledge of the
14bonds or other obligations to be refunded, and shall be valid,
15binding, and enforceable in accordance with its terms.

16(2) For the purpose of issuing bonds or other indebtedness to
17finance debt service spikes, including balloon maturities, provided
18that (A) the existing indebtedness is not accelerated, except to the
19extent necessary to achieve substantially level debt service, and
20(B) the principal amount of the bonds or other indebtedness shall
21not exceed the amount required to finance the debt service spikes,
22including establishing customary debt service reserves and paying
23related costs of issuance.

24(3) For the purpose of amending an existing enforceable
25obligation under which the successor agency is obligated to
26reimburse a political subdivision of the state for the payment of
27debt service on a bond or other obligation of the political
28subdivision, or to pay all or a portion of the debt service on the
29bond or other obligation of the political subdivision to provide
30savings to the successor agency, provided that (A) the enforceable
31obligation is amended in connection with a refunding of the bonds
32or other obligations of the political subdivision so that the
33enforceable obligation will apply to the refunding bonds or other
34refunding indebtedness of the political subdivision, (B) the total
35interest cost to maturity on the refunding bonds or other
36indebtedness plus the principal amount of the refunding bonds or
37other indebtedness shall not exceed the total remaining interest
38cost to maturity on the bonds or other indebtedness to be refunded
39plus the remaining principal of the bonds or other indebtedness to
40be refunded, and (C) the principal amount of the refunding bonds
P47   1or other indebtedness shall not exceed the amount required to
2defease the refunded bonds or other indebtedness, to establish
3customary debt service reserves and to pay related costs of
4issuance. The pledge set forth in that amended enforceable
5obligation, when made in connection with the execution of the
6amendment of the enforceable obligation, shall have the same lien
7priority as the pledge in the enforceable obligation prior to its
8amendment and shall be valid, binding, and enforceable in
9accordance with its terms.

10(4) For the purpose of issuing bonds or incurring other
11indebtedness to make payments under enforceable obligations
12when the enforceable obligations include the irrevocable pledge
13of property tax increment, formerly tax increment revenues prior
14to the effective date of this part, or other funds and the obligation
15to issue bonds secured by that pledge. The successor agency may
16pledge to the bonds or other indebtedness the property tax revenues
17and other funds described in the enforceable obligation, and that
18pledge, when made in connection with the issuance of the bonds
19or the incurring of other indebtedness, shall be valid, binding, and
20enforceable in accordance with its terms. This paragraph shall not
21be deemed to authorize a successor agency to increase the amount
22of property tax revenues pledged under an enforceable obligation
23or to pledge any property tax revenue not already pledged pursuant
24to an enforceable obligation. This paragraph does not constitute a
25change in, but is declaratory of, the existing law.

26(b) The refunding bonds authorized under this section may be
27issued under the authority of Article 11 (commencing with Section
2853580) of Chapter 3 of Part 1 of Division 2 of Title 5 of the
29Government Code, and the refunding bonds may be sold at public
30or private sale, or to a joint powers authority pursuant to the
31Marks-Roos Local Bond Pooling Act (Article 4 (commencing with
32Section 6584) of Chapter 5 of Division 7 of Title 1 of the
33Government Code).

34(c) (1) Prior to incurring any bonds or other indebtedness
35pursuant to this section, the successor agency may subordinate to
36the bonds or other indebtedness the amount required to be paid to
37an affected taxing entity pursuant to paragraph (1) of subdivision
38(a) of Section 34183, provided that the affected taxing entity has
39approved the subordinations pursuant to this subdivision.

P48   1(2) At the time the successor agency requests an affected taxing
2entity to subordinate the amount to be paid to it, the successor
3agency shall provide the affected taxing entity with substantial
4evidence that sufficient funds will be available to pay both the debt
5service on the bonds or other indebtedness and the payments
6required by paragraph (1) of subdivision (a) of Section 34183,
7when due.

8(3) Within 45 days after receipt of the agency’s request, the
9affected taxing entity shall approve or disapprove the request for
10subordination. An affected taxing entity may disapprove a request
11for subordination only if it finds, based upon substantial evidence,
12that the successor agency will not be able to pay the debt service
13payments and the amount required to be paid to the affected taxing
14entity. If the affected taxing entity does not act within 45 days after
15receipt of the agency’s request, the request to subordinate shall be
16deemed approved and shall be final and conclusive.

17(d) An action may be brought pursuant to Chapter 9
18(commencing with Section 860) of Title 10 of Part 2 of the Code
19of Civil Procedure to determine the validity of bonds or other
20obligations authorized by this section, the pledge of revenues to
21those bonds or other obligations authorized by this section, the
22legality and validity of all proceedings theretofore taken and, as
23provided in the resolution of the legislative body of the successor
24agency authorizing the bonds or other obligations authorized by
25this section, proposed to be taken for the authorization, execution,
26issuance, sale, and delivery of the bonds or other obligations
27authorized by this section, and for the payment of debt service on
28the bonds or the payment of amounts under other obligations
29authorized by this section. Subdivision (c) of Section 33501 shall
30not apply to any such action. The department shall be notified of
31the filing of any action as an affected party.

32(e) Notwithstanding any other law, including, but not limited
33to, Section 33501, an action to challenge the issuance of bonds,
34the incurrence of indebtedness, the amendment of an enforceable
35obligation, or the execution of a financing agreement by a successor
36agency shall be brought within 30 days after the date on which the
37oversight board approves the resolution of the successor agency
38approving the issuance of bonds, the incurrence of indebtedness,
39the amendment of an enforceable obligation, or the execution of
40a financing agreement authorized under this section.

P49   1(f) The actions authorized in this section shall be subject to the
2approval of the oversight board, as provided in Section 34180.
3Additionally, an oversight board may direct the successor agency
4to commence any of the transactions described in subdivision (a)
5so long as the successor agency is able to recover its related costs
6in connection with the transaction. After a successor agency, with
7approval of the oversight board, issues any bonds, incurs any
8indebtedness, or executes an amended enforceable obligation
9pursuant to subdivision (a), the oversight board shall not
10unilaterally approve any amendments to or early termination of
11the bonds, indebtedness, or enforceable obligation. If, under the
12authority granted to it by subdivision (h) of Section 34179, the
13department either reviews and approves or fails to request review
14 within five business days of an oversight board approval of an
15action authorized by this section, the scheduled payments on the
16bonds or other indebtedness shall be listed in the Recognized
17Obligation Payment Schedule and shall not be subject to further
18review and approval by the department or the Controller. The
19department may extend its review time to 60 days for actions
20authorized in this section and may seek the assistance of the
21Treasurer in evaluating proposed actions under this section.

22(g) Any bonds, indebtedness, or amended enforceable obligation
23authorized by this section shall be considered indebtedness incurred
24by the dissolved redevelopment agency, with the same legal effect
25as if the bonds, indebtedness, financing agreement, or amended
26enforceable obligation had been issued, incurred, or entered into
27prior to June 28, 2011, in full conformity with the applicable
28provisions of the Community Redevelopment Law that existed
29prior to that date, shall be included in the successor agency’s
30Recognized Obligation Payment Schedule, and shall be secured
31by a pledge of, and lien on, and shall be repaid from moneys
32deposited from time to time in the Redevelopment Property Tax
33Trust Fund established pursuant to subdivision (c) of Section
3434172, as provided in paragraph (2) of subdivision (a) of Section
3534183. Property tax revenues pledged to any bonds, indebtedness,
36or amended enforceable obligations authorized by this section are
37taxes allocated to the successor agency pursuant to subdivision (b)
38of Section 33670 and Section 16 of Article XVI of the California
39Constitution.

P50   1(h) The successor agency shall make diligent efforts to ensure
2that the lowest long-term cost financing is obtained. The financing
3shall not provide for any bullets or spikes and shall not use variable
4rates. The successor agency shall make use of an independent
5financial advisor in developing financing proposals and shall make
6the work products of the financial advisor available to the
7department at its request.

8(i) If an enforceable obligation provides for an irrevocable
9commitment of revenue and where allocation of such revenues is
10expected to occur over time, the successor agency may petition
11the department by electronic means and in a manner of the
12department’s choosing to provide written confirmation that its
13determination of such enforceable obligation as approved in a
14Recognized Obligation Payment Schedule is final and conclusive,
15and reflects the department’s approval of subsequent payments
16made pursuant to the enforceable obligation. The successor agency
17shall provide a copy of the petition to the county auditor-controller
18at the same time it is submitted to the department. The department
19shall have 100 days from the date of the request for a final and
20conclusive determination to provide written confirmation of
21approval or denial of the request. For any pending final and
22conclusive determination requests submitted prior to June 30, 2015,
23the department shall have until September 30, 2015, to provide
24written confirmation of approval or denial of the request. If the
25confirmation of approval is granted, then the department’s review
26of such payments in future Recognized Obligation Payment
27Schedules shall be limited to confirming that they are required by
28the prior enforceable obligation.

29(j) The successor agency may request that the department
30provide a written determination to waive the two-year statute of
31limitations on an action to review the validity of the adoption or
32amendment of a redevelopment plan pursuant to subdivision (c)
33of Section 33500 or on any findings or determinations made by
34the agency pursuant to subdivision (d) of Section 33500. The
35department at its discretion may provide a waiver if it determines
36it is necessary for the agency to fulfill an enforceable obligation.

37

SEC. 9.  

Section 34177.7 is added to the Health and Safety
38Code
, to read:

39

34177.7.  

(a) (1) In addition to the powers granted to each
40successor agency, and notwithstanding anything in the act adding
P51   1this part, including, but not limited to, Sections 34162 and 34189,
2the successor agency to the Redevelopment Agency of the City
3and County of San Francisco shall have the authority, rights, and
4powers of the Redevelopment Agency to which it succeeded solely
5for the purpose of issuing bonds or incurring other indebtedness
6to finance:

7(A) The affordable housing required by the Mission Bay North
8Owner Participation Agreement, the Mission Bay South Owner
9Participation Agreement, the Disposition and Development
10Agreement for Hunters Point Shipyard Phase 1, the Candlestick
11Point-Hunters Point Shipyard Phase 2 Disposition and
12Development Agreement, and the Transbay Implementation
13Agreement.

14(B) The infrastructure required by the Transbay Implementation
15Agreement.

16(2) The successor agency to the Redevelopment Agency of the
17City and County of San Francisco may pledge to the bonds or other
18indebtedness the property tax revenues available in the successor
19agency’s Redevelopment Property Tax Trust Fund that are not
20otherwise obligated.

21(b) Bonds issued pursuant to this section may be sold pursuant
22to either a negotiated or a competitive sale. The bonds issued or
23other indebtedness obligations incurred pursuant to this section
24may be issued or incurred on a parity basis with outstanding bonds
25or other indebtedness obligations of the successor agency to the
26Redevelopment Agency of the City and County of San Francisco
27and may pledge the revenues pledged to those outstanding bonds
28or other indebtedness obligations to the issuance of bonds or other
29obligations pursuant to this section. The pledge, when made in
30connection with the issuance of bonds or other indebtedness
31obligations under this section, shall have the same lien priority as
32the pledge of outstanding bonds or other indebtedness obligations,
33and shall be valid, binding, and enforceable in accordance with its
34terms.

35(c) (1) Prior to issuing any bonds or incurring other
36indebtedness pursuant to this section, the successor agency to the
37Redevelopment Agency of the City and County of San Francisco
38may subordinate to the bonds or other indebtedness the amount
39required to be paid to an affected taxing entity pursuant to
40paragraph (1) of subdivision (a) of Section 34183, provided that
P52   1the affected taxing entity has approved the subordinations pursuant
2to this subdivision.

3(2) At the time the agency requests an affected taxing entity to
4subordinate the amount to be paid to it, the agency shall provide
5the affected taxing entity with substantial evidence that sufficient
6funds will be available to pay both the debt service on the bonds
7or other indebtedness and the payments required by paragraph (1)
8of subdivision (a) of Section 34183, when due.

9(3) Within 45 days after receipt of the agency’s request, the
10affected taxing entity shall approve or disapprove the request for
11subordination. An affected taxing entity may disapprove a request
12for subordination only if it finds, based upon substantial evidence,
13that the successor agency will not be able to pay the debt service
14payments and the amount required to be paid to the affected taxing
15entity. If the affected taxing entity does not act within 45 days after
16receipt of the agency’s request, the request to subordinate shall be
17deemed approved and shall be final and conclusive.

18(d) An action may be brought pursuant to Chapter 9
19(commencing with Section 860) of Title 10 of Part 2 of the Code
20of Civil Procedure to determine the validity of bonds or other
21obligations authorized by this section, the pledge of revenues to
22those bonds or other obligations authorized by this section, the
23legality and validity of all proceedings theretofore taken and, as
24provided in the resolution of the legislative body of the successor
25agency to the Redevelopment Agency of the City and County of
26San Francisco authorizing the bonds or other indebtedness
27obligations authorized by this section, proposed to be taken for
28the authorization, execution, issuance, sale, and delivery of the
29bonds or other obligations authorized by this section, and for the
30payment of debt service on the bonds or the payment of amounts
31under other obligations authorized by this section. Subdivision (c)
32of Section 33501 shall not apply to any such action. The department
33shall be notified of the filing of any action as an affected party.

34(e) Notwithstanding any other law, including, but not limited
35to, Section 33501, an action to challenge the issuance of bonds or
36the incurrence of indebtedness by the successor agency to the
37Redevelopment Agency of the City and County of San Francisco
38shall be brought within 30 days after the date on which the
39oversight board approves the resolution of the agency approving
P53   1the issuance of bonds or the incurrence of indebtedness under this
2section.

3(f) The actions authorized in this section shall be subject to the
4approval of the oversight board, as provided in Section 34180.
5Additionally, the oversight board may direct the successor agency
6to the Redevelopment Agency of the City and County of San
7Francisco to commence any of the transactions described in
8subdivision (a) so long as the agency is able to recover its related
9costs in connection with the transaction. After the agency, with
10approval of the oversight board, issues any bonds or incurs any
11indebtedness pursuant to subdivision (a), the oversight board shall
12not unilaterally approve any amendments to or early termination
13of the bonds or indebtedness. If, under the authority granted to it
14by subdivision (h) of Section 34179, the department either reviews
15and approves or fails to request review within five business days
16of an oversight board approval of an action authorized by this
17section, the scheduled payments on the bonds or other indebtedness
18shall be listed in the Recognized Obligation Payment Schedule
19and shall not be subject to further review and approval by the
20department or the Controller. The department may extend its review
21time to 60 days for actions authorized in this section and may seek
22the assistance of the Treasurer in evaluating proposed actions under
23this section.

24(g) Any bonds or other indebtedness authorized by this section
25shall be considered indebtedness incurred by the dissolved
26redevelopment agency, with the same legal effect as if the bonds
27or other indebtedness had been issued, incurred, or entered into
28prior to June 28, 2011, in full conformity with the applicable
29provisions of the Community Redevelopment Law that existed
30prior to that date, shall be included in the successor agency to the
31Redevelopment Agency of the City and County of San Francisco’s
32Recognized Obligation Payment Schedule, and shall be secured
33by a pledge of, and lien on, and shall be repaid from moneys
34deposited from time to time in the Redevelopment Property Tax
35Trust Fund established pursuant to subdivision (c) of Section
3634172, as provided in paragraph (2) of subdivision (a) of Section
3734183. Property tax revenues pledged to any bonds or other
38indebtedness obligations authorized by this section are taxes
39allocated to the successor agency pursuant to subdivision (b) of
P54   1Section 33670 and Section 16 of Article XVI of the California
2Constitution.

3(h) The successor agency to the Redevelopment Agency of the
4City and County of San Francisco shall make diligent efforts to
5ensure that the lowest long-term cost financing is obtained. The
6financing shall not provide for any bullets or spikes and shall not
7use variable rates. The agency shall make use of an independent
8financial advisor in developing financing proposals and shall make
9the work products of the financial advisor available to the
10department at its request.

11

SEC. 10.  

Section 34178 of the Health and Safety Code is
12amended to read:

13

34178.  

(a) Commencing on the operative date of this part,
14agreements, contracts, or arrangements between the city or county,
15or city and county that created the redevelopment agency and the
16redevelopment agency are invalid and shall not be binding on the
17successor agency; provided, however, that a successor entity
18wishing to enter or reenter into agreements with the city, county,
19or city and county that formed the redevelopment agency that it
20is succeeding may do so subject to the restrictions identified in
21subdivision (c), and upon obtaining the approval of its oversight
22board.

23(b) Notwithstanding subdivision (a), any of the following
24agreements are not invalid and may bind the successor agency:

25(1) A duly authorized written agreement entered into at the time
26of issuance, but in no event later than December 31, 2010, of
27indebtedness obligations, and solely for the purpose of securing
28or repaying those indebtedness obligations.

29(2) A written agreement between a redevelopment agency and
30the city, county, or city and county that created it that provided
31loans or other startup funds for the redevelopment agency that
32were entered into within two years of the formation of the
33redevelopment agency.

34(3) A joint exercise of powers agreementbegin delete entered into no later
35than December 31, 2010,end delete
in which the redevelopment agency is a
36member of the joint powers authority. However, upon assignment
37to the successor agency by operation of the act adding this part,
38the successor agency’s rights, duties, and performance obligations
39under that joint exercise of powers agreement shall be limited by
P55   1the constraints imposed on successor agencies by the act adding
2this part.

3(4) A duly authorized written agreement entered into at the time
4of issuance, but in no event later than June 27, 2011, of
5indebtedness obligations solely for the refunding or refinancing
6of other indebtedness obligations that existed prior to January 1,
72011, and solely for the purpose of securing or repaying the
8refunded and refinanced indebtedness obligations.

9(c) An oversight board shall not approve any agreements
10between the successor agency and the city, county, or city and
11county that formed the redevelopment agency that it is succeeding,
12except for agreements for the limited purposes set forth in
13subdivision (b) of Section 34177.3. A successor agency shall not
14enter or reenter into any agreements with the city, county, or city
15and county that formed the redevelopment agency that it is
16succeeding, except for agreements for the limited purposes set
17forth in subdivision (b) of Section 34177.3. A successor agency
18or an oversight board shall not exercise the powers granted by
19subdivision (a) to restore funding for any item that was denied or
20reduced by the department. This subdivision shall apply
21retroactively to all agreements entered or reentered pursuant to
22this section on and after June 27, 2012. Any agreement entered or
23reentered pursuant to this section on and after June 27, 2012, that
24does not comply with this subdivision is ultra vires and void, and
25does not create an enforceable obligation. The Legislature finds
26and declares that this subdivision is necessary to promote the
27expeditious wind down of redevelopment agency affairs.

28

SEC. 11.  

Section 34179 of the Health and Safety Code is
29amended to read:

30

34179.  

(a) Each successor agency shall have an oversight
31board composed of seven members. The members shall elect one
32of their members as the chairperson and shall report the name of
33the chairperson and other members to the Department of Finance
34on or before May 1, 2012. Members shall be selected as follows:

35(1) One member appointed by the county board of supervisors.

36(2) One member appointed by the mayor for the city that formed
37the redevelopment agency.

38(3) (A) One member appointed by the largest special district,
39by property tax share, with territory in the territorial jurisdiction
40of the former redevelopment agency, which is of the type of special
P56   1district that is eligible to receive property tax revenues pursuant
2to Section 34188.

3(B)  On or after the effective date of this subparagraph, the
4county auditor-controller may determine which is the largest special
5district for purposes of this section.

6(4) One member appointed by the county superintendent of
7education to represent schools if the superintendent is elected. If
8the county superintendent of education is appointed, then the
9appointment made pursuant to this paragraph shall be made by the
10county board of education.

11(5) One member appointed by the Chancellor of the California
12Community Colleges to represent community college districts in
13the county.

14(6) One member of the public appointed by the county board
15 of supervisors.

16(7) One member representing the employees of the former
17redevelopment agency appointed by the mayor or chair of the
18board of supervisors, as the case may be, from the recognized
19employee organization representing the largest number of former
20redevelopment agency employees employed by the successor
21agency at that time. In the case where city or county employees
22performed administrative duties of the former redevelopment
23agency, the appointment shall be made from the recognized
24employee organization representing those employees. If a
25recognized employee organization does not exist for either the
26employees of the former redevelopment agency or the city or
27county employees performing administrative duties of the former
28redevelopment agency, the appointment shall be made from among
29the employees of the successor agency. In voting to approve a
30contract as an enforceable obligation, a member appointed pursuant
31to this paragraph shall not be deemed to be interested in the contract
32by virtue of being an employee of the successor agency or
33community for purposes of Section 1090 of the Government Code.

34(8) If the county or a joint powers agency formed the
35redevelopment agency, then the largest city by acreage in the
36territorial jurisdiction of the former redevelopment agency may
37select one member. If there are no cities with territory in a project
38area of the redevelopment agency, the county superintendent of
39education may appoint an additional member to represent the
40public.

P57   1(9) If there are no special districts of the type that are eligible
2to receive property tax pursuant to Section 34188, within the
3territorial jurisdiction of the former redevelopment agency, then
4the county may appoint one member to represent the public.

5(10) If a redevelopment agency was formed by an entity that is
6both a charter city and a county, the oversight board shall be
7composed of seven members selected as follows: three members
8appointed by the mayor of the city, if that appointment is subject
9to confirmation by the county board of supervisors, one member
10appointed by the largest special district, by property tax share, with
11territory in the territorial jurisdiction of the former redevelopment
12agency, which is the type of special district that is eligible to
13receive property tax revenues pursuant to Section 34188, one
14member appointed by the county superintendent of education to
15represent schools, one member appointed by the Chancellor of the
16California Community Colleges to represent community college
17districts, and one member representing employees of the former
18redevelopment agency appointed by the mayor of the city if that
19appointment is subject to confirmation by the county board of
20supervisors, to represent the largest number of former
21redevelopment agency employees employed by the successor
22agency at that time.

23(11) Each appointing authority identified in this subdivision
24may, but is not required to, appoint alternate representatives to
25serve on the oversight board as may be necessary to attend any
26meeting of the oversight board in the event that the appointing
27authority’s primary representative is unable to attend any meeting
28for any reason. If an alternate representative attends any meeting
29in place of the primary representative, the alternative representative
30 shall have the same participatory and voting rights as all other
31attending members of the oversight board.

32(b) The Governor may appoint individuals to fill any oversight
33board member position described in subdivision (a) that has not
34been filled by May 15, 2012, or any member position that remains
35vacant for more than 60 days.

36(c) The oversight board may direct the staff of the successor
37agency to perform work in furtherance of the oversight board’s
38and the successor agency’s duties and responsibilities under this
39part. The successor agency shall pay for all of the costs of meetings
40of the oversight board and may include such costs in its
P58   1administrative budget. Oversight board members shall serve
2without compensation or reimbursement for expenses.

3(d) Oversight board members are protected by the immunities
4applicable to public entities and public employees governed by
5Part 1 (commencing with Section 810) and Part 2 (commencing
6with Section 814) of Division 3.6 of Title 1 of the Government
7Code.

8(e) A majority of the total membership of the oversight board
9shall constitute a quorum for the transaction of business. A majority
10vote of the total membership of the oversight board is required for
11the oversight board to take action. The oversight board shall be
12deemed to be a local entity for purposes of the Ralph M. Brown
13Act, the California Public Records Act, and the Political Reform
14Act of 1974. All actions taken by the oversight board shall be
15adopted by resolution.

16(f) All notices required by law for proposed oversight board
17actions shall also be posted on the successor agency’s Internet
18Web site or the oversight board’s Internet Web site.

19(g) Each member of an oversight board shall serve at the
20pleasure of the entity that appointed such member.

21(h) (1) The department may review an oversight board action
22taken pursuant to this part. Written notice and information about
23all actions taken by an oversight board shall be provided to the
24department as an approved resolution by electronic means and in
25a manner of the department’s choosing. Without abrogating the
26department’s authority to review all matters related to the
27Recognized Obligation Payment Schedule pursuant to Section
2834177, oversight boards are not required to submit the following
29oversight board actions for department approval:

30(A) Meeting minutes and agendas.

31(B) Administrative budgets.

32(C) Changes in oversight board members, or the selection of an
33oversight board chair or vice chair.

34(D) Transfers of governmental property pursuant to an approved
35Long Range Property Management Plan.

36(E) Transfers of property to be retained by the sponsoring entity
37for future development pursuant to an approved long-range
38property management plan.

39(2) An oversight board action submitted in a manner specified
40by the department shall become effective five business days after
P59   1submission, unless the department requests a review of the action.
2Each oversight board shall designate an official to whom the
3department may make those requests and who shall provide the
4department with the telephone number and e-mail contact
5information for the purpose of communicating with the department
6pursuant to this subdivision. Except as otherwise provided in this
7part, in the event that the department requests a review of a given
8oversight board action, it shall have 40 days from the date of its
9request to approve the oversight board action or return it to the
10oversight board for reconsideration and the oversight board action
11shall not be effective until approved by the department. In the
12event that the department returns the oversight board action to the
13oversight board for reconsideration, the oversight board shall
14resubmit the modified action for department approval and the
15modified oversight board action shall not become effective until
16approved by the department. If the department reviews a
17Recognized Obligation Payment Schedule, the department may
18eliminate or modify any item on that schedule prior to its approval.
19The county auditor-controller shall reflect the actions of the
20department in determining the amount of property tax revenues to
21allocate to the successor agency. The department shall provide
22notice to the successor agency and the county auditor-controller
23as to the reasons for its actions. To the extent that an oversight
24board continues to dispute a determination with the department,
25one or more future recognized obligation schedules may reflect
26any resolution of that dispute. The department may also agree to
27an amendment to a Recognized Obligation Payment Schedule to
28reflect a resolution of a disputed item; however, this shall not affect
29a past allocation of property tax or create a liability for any affected
30taxing entity.

31(i) Oversight boards shall have fiduciary responsibilities to
32holders of enforceable obligations and the taxing entities that
33benefit from distributions of property tax and other revenues
34pursuant to Section 34188. Further, the provisions of Division 4
35(commencing with Section 1000) of the Government Code shall
36apply to oversight boards. Notwithstanding Section 1099 of the
37Government Code, or any other law, any individual may
38simultaneously be appointed to up to five oversight boards and
39may hold an office in a city, county, city and county, special
40district, school district, or community college district.

P60   1(j) Except as specified in subdivision (q), commencing on and
2after July 1, 2017, in each county where more than one oversight
3board was created by operation of the act adding this part, there
4shall be only one oversight board, which shall be staffed by the
5county auditor-controller, by another county entity selected by the
6county auditor-controller, or by a city within the county that the
7county auditor-controller may select after consulting with the
8department. Pursuant to Section 34183, the county
9auditor-controller may recover directly from the Redevelopment
10Property Tax Trust Fund, and distribute to the appropriate city or
11county entity, reimbursement for all costs incurred by it or by the
12city or county pursuant to this subdivision, which shall include
13any associated start-up costs. However, if only one successor
14agency exists within the county, the county auditor-controller may
15designate the successor agency to staff the oversight board. The
16oversight board is appointed as follows:

17(1) One member may be appointed by the county board of
18supervisors.

19(2) One member may be appointed by the city selection
20committee established pursuant to Section 50270 of the
21Government Code. In a city and county, the mayor may appoint
22one member.

23(3) One member may be appointed by the independent special
24district selection committee established pursuant to Section 56332
25of the Government Code, for the types of special districts that are
26eligible to receive property tax revenues pursuant to Section 34188.

27(4) One member may be appointed by the county superintendent
28of education to represent schools if the superintendent is elected.
29 If the county superintendent of education is appointed, then the
30appointment made pursuant to this paragraph shall be made by the
31county board of education.

32(5) One member may be appointed by the Chancellor of the
33California Community Colleges to represent community college
34districts in the county.

35(6) One member of the public may be appointed by the county
36board of supervisors.

37(7) One member may be appointed by the recognized employee
38organization representing the largest number of successor agency
39employees in the county.

P61   1(k) The Governor may appoint individuals to fill any oversight
2board member position described in subdivision (j) that has not
3been filled by July 15, 2016, or any member position that remains
4vacant for more than 60 days.

5(l) Commencing on and after July 1, 2016, in each county where
6only one oversight board was created by operation of the act adding
7this part, then there will be no change to the composition of that
8oversight board as a result of the operation of subdivision (b).

9(m) Any oversight board for a given successor agency, with the
10exception of countywide oversight boards, shall cease to exist
11when the successor agency has been formally dissolved pursuant
12to Section 34187. A county oversight board shall cease to exist
13when all successor agencies subject to its oversight have been
14formally dissolved pursuant to Section 34187.

15(n) An oversight board may direct a successor agency to provide
16additional legal or financial advice than what was given by agency
17staff.

18(o) An oversight board is authorized to contract with the county
19or other public or private agencies for administrative support.

20(p) On matters within the purview of the oversight board,
21decisions made by the oversight board supersede those made by
22the successor agency or the staff of the successor agency.

23(q) (1) Commencing on and after July 1, 2017, in each county
24where more than 40 oversight boards were created by operation
25of the act adding this part, there shall be five oversight boards,
26which shall each be staffed in the same manner as specified in
27subdivision (j). The membership of each oversight board shall be
28as specified in paragraphs (1) through (7), inclusive, of subdivision
29(j).

30(2) The oversight boards shall be numbered one through five,
31and their respective jurisdictions shall encompass the territory
32located within the respective borders of the first through fifth
33county board of supervisors districts, as those borders existed on
34July 1, 2016. Except as specified in paragraph (3), each oversight
35board shall have jurisdiction over each successor agency located
36within its borders.

37(3) If a successor agency has territory located within more than
38one county board of supervisors’ district, the county board of
39supervisors shall, no later than July 15, 2016, determine which
40oversight board shall have jurisdiction over that successor agency.
P62   1The county board of supervisors or their designee shall report this
2information to the successor agency and the department by the
3aforementioned date.

4(4) The successor agency to the former redevelopment agency
5created by a county where more than 40 oversight boards were
6created by operation of the act adding this part, shall be under the
7jurisdiction of the oversight board with the fewest successor
8agencies under its jurisdiction.

9

SEC. 12.  

Section 34179.7 of the Health and Safety Code is
10amended to read:

11

34179.7.  

Upon full payment of the amounts determined in
12subdivision (d) or (e) of Section 34179.6 as reported by the county
13auditor-controller pursuant to subdivision (g) of Section 34179.6
14and of any amounts due as determined by Section 34183.5, or upon
15a final judicial determination of the amounts due and confirmation
16that those amounts have been paid by the county auditor-controller,
17or upon entering into a written installment payment plan with the
18department for payment of the amounts due, the department shall
19issue, within five business days, a finding of completion of the
20requirements of Section 34179.6 to the successor agency.

21(a) Notwithstanding any other of law, if a successor agency fails
22by December 31, 2015, to pay, or to enter into a written installment
23payment plan with the department for the payment of, the amounts
24determined in subdivision (d) or (e) of Section 34179.6, or the
25amounts determined by Section 34183.5, the successor agency
26shall never receive a finding of completion.

27(b) If a successor agency, city, county, or city and county pays,
28or enters into a written installment payment plan with the
29department for the payment of the amounts determined in
30subdivision (d) or (e) of Section 34179.6 or the amounts determined
31by Section 34183.5, and the successor agency, city, county, or city
32and county subsequently receives a final judicial determination
33that reduces or eliminates the amounts determined, an enforceable
34obligation for the reimbursement of the excess amounts paid shall
35be created and the obligation to make any payments in excess of
36the amount determined by a final judicial determination shall be
37canceled and be of no further force or effect.

38(c) If, upon consultation with the county auditor-controller, the
39department finds that a successor agency, city, county, or city and
40county has failed to fully make one or more payments agreed to
P63   1in the written installment payment plan, the following shall occur
2unless the county auditor-controller reports within 10 business
3days that the successor agency, city, county, or city and county
4has made the entirety of the incomplete payment or payments:

5(1) Section 34191.3, subdivision (b) of Section 34191.4, and
6Section 34191.5 shall not apply to the successor agency.

7(2) Oversight board actions taken under subdivision (b) of
8Section 34191.4 shall no longer be effective. Any loan agreements
9entered into between the redevelopment agency and the city,
10county, or city and county that created the redevelopment agency
11that were deemed enforceable obligations pursuant to such
12oversight board actions shall no longer be enforceable obligations.

13(3) If the department has approved a long-range property
14management plan for the successor agency, that plan shall no
15longer be effective. Any property that has not been disposed of
16through the plan prior to the nonpayment discussed in paragraph
17(3) shall be disposed of pursuant to Section 34181.

18(4) If applicable, the successor agency’s Last and Final
19Recognized Obligation Payment Schedule shall cease to be
20effective. However, to ensure the flow of lawful payments to third
21parties is not impeded, the Last and Final Recognized Obligation
22Payment Schedule shall remain operative until the successor
23agency’s next Recognized Obligation Payment Schedule is
24approved and becomes operative pursuant to Section 34177.

25(d) Subdivision (c) shall not be construed to prevent the
26department from working with a successor agency, city, county,
27or city and county to amend the terms of a written installment
28payment plan if the department determines the amendments are
29necessitated by the successor agency’s, city’s, county’s, or city
30and county’s fiscal situation.

31

SEC. 13.  

Section 34179.9 is added to the Health and Safety
32Code
, to read:

33

34179.9.  

(a) The city, county, or city and county that created
34the former redevelopment agency shall return to the successor
35agency all assets transferred to the city, county, or city and county
36ordered returned pursuant to Section 34167.5.

37(b) (1) The city, county, or city and county that created the
38former redevelopment agency shall return to the successor agency
39all cash and cash equivalents transferred to the city, county, or city
P64   1and county that were not required by an enforceable obligation as
2determined pursuant to Sections 34179.5 and 34179.6.

3(2) Any amounts required to be returned to the successor agency
4under Sections 34179.5 and 34179.6, and paragraph (1) of this
5subdivision, that were transferred to the city, county, or city and
6county that created the former redevelopment agency as repayment
7for an advance of funds made by the city, county, or city and
8county to the former redevelopment agency or successor agency
9that was needed to pay the former redevelopment agency’s debt
10service or passthrough payments may be placed on a Recognized
11Obligation Payment Schedule by the successor agency for payment
12as an enforceable obligation subject to the following conditions:

13(A) The transfer to the city, county, or city and county by the
14former redevelopment agency or successor agency as repayment
15for the advance of funds occurred within 30 days of receipt of a
16duly scheduled property tax distribution to the former
17redevelopment agency by the county auditor-controller.

18(B) The loan from the city, county, or city and county was
19necessary because the former redevelopment agency or successor
20agency had insufficient funds to pay for the former redevelopment
21agency’s debt service or passthrough payments.

22(3) Paragraph (2) shall not apply if:

23(A) The former redevelopment agency had insufficient funds
24as a result of an unauthorized transfer of cash or cash equivalents
25to the city, county, or city and county that created the former
26redevelopment agency.

27(B) The successor agency has received a finding of completion
28as of the effective date of the act that added this section.

29(C) The successor agency, the city, county, or city and county
30that created the former redevelopment agency, or the successor
31agency’s oversight board, is currently or was previously a party
32to outstanding litigation contesting the department’s determination
33under subdivision (d) or (e) of Section 34179.6.

34(c) The city, county, or city and county that created the former
35redevelopment agency shall return to the successor agency any
36money or assets transferred to the city, county, or city and county
37by the successor agency that were not authorized pursuant to an
38effective oversight board action or Recognized Obligation Payment
39Schedule determination.

P65   1

SEC. 14.  

Section 34180 of the Health and Safety Code is
2amended to read:

3

34180.  

All of the following successor agency actions shall first
4be approved by the oversight board:

5(a) The establishment of new repayment terms for outstanding
6loans where the terms have not been specified prior to the date of
7this part. An oversight board shall not have the authority to
8reestablish loan agreements between the successor agency and the
9city, county, or city and county that formed the redevelopment
10agency except as provided in Chapter 9 (commencing with Section
1134191.1).

12(b) The issuance of bonds or other indebtedness or the pledge
13or agreement for the pledge of property tax revenues (formerly tax
14increment prior to the effective date of this part) pursuant to
15subdivision (a) of Section 34177.5.

16(c) Setting aside of amounts in reserves as required by
17indentures, trust indentures, or similar documents governing the
18issuance of outstanding redevelopment agency bonds.

19(d) Merging of project areas.

20(e) Continuing the acceptance of federal or state grants, or other
21forms of financial assistance from either public or private sources,
22if that assistance is conditioned upon the provision of matching
23funds, by the successor entity as successor to the former
24redevelopment agency, in an amount greater than 5 percent.

25(f) (1) If a city, county, or city and county wishes to retain any
26properties or other assets for future redevelopment activities,
27funded from its own funds and under its own auspices, it must
28reach a compensation agreement with the other taxing entities to
29provide payments to them in proportion to their shares of the base
30property tax, as determined pursuant to Section 34188, for the
31value of the property retained.

32(2) If no other agreement is reached on valuation of the retained
33assets, the value will be the fair market value as of the 2011
34property tax lien date as determined by an independent appraiser
35approved by the oversight board.

36(g) Establishment of the Recognized Obligation Payment
37Schedule.

38(h) A request by the successor agency to enter or reenter into
39an agreement with the city, county, or city and county that formed
40the redevelopment agency that it is succeeding pursuant to Section
P66   134178. An oversight board shall not have the authority to
2reestablish loan agreements between the successor agency and the
3city, county, or city and county that formed the redevelopment
4agency except as provided in Chapter 9 (commencing with Section
534191.1). Any actions to establish or reestablish any other
6agreements that are authorized under this part, with the city, county,
7or city and county that formed the redevelopment agency are
8invalid until they are included in an approved and valid Recognized
9Obligation Payment Schedule.

10(i) A request by a successor agency or taxing entity to pledge,
11or to enter into an agreement for the pledge of, property tax
12revenues pursuant to subdivision (b) of Section 34178.

13(j) Any document submitted by a successor agency to an
14oversight board for approval by any provision of this part shall
15also be submitted to the county administrative officer, the county
16auditor-controller, and the Department of Finance at the same time
17that the successor agency submits the document to the oversight
18board.

19

SEC. 15.  

Section 34181 of the Health and Safety Code is
20amended to read:

21

34181.  

The oversight board shall direct the successor agency
22to do all of the following:

23(a) (1) Dispose of all assets and properties of the former
24redevelopment agency; provided, however, that the oversight board
25may instead direct the successor agency to transfer ownership of
26those assets that were constructed and used for a governmental
27purpose, such as roads, school buildings, parks, police and fire
28stations, libraries, parking facilities and lots dedicated solely to
29public parking, and local agency administrative buildings, to the
30appropriate public jurisdiction pursuant to any existing agreements
31relating to the construction or use of such an asset. Any
32compensation to be provided to the successor agency for the
33transfer of the asset shall be governed by the agreements relating
34to the construction or use of that asset. Disposal shall be done
35expeditiously and in a manner aimed at maximizing value. Asset
36disposition may be accomplished by a distribution of income to
37taxing entities proportionate to their property tax share from one
38or more properties that may be transferred to a public or private
39agency for management pursuant to the direction of the oversight
40board.

P67   1(2) “Parking facilities and lots dedicated solely to public
2parking” do not include properties that generate revenues in excess
3of reasonable maintenance costs of the properties.

4(b) Cease performance in connection with and terminate all
5existing agreements that do not qualify as enforceable obligations.

6(c) Transfer housing assets pursuant to Section 34176.

7(d) Terminate any agreement, between the dissolved
8redevelopment agency and any public entity located in the same
9county, obligating the redevelopment agency to provide funding
10for any debt service obligations of the public entity or for the
11construction, or operation of facilities owned or operated by such
12public entity, in any instance where the oversight board has found
13that early termination would be in the best interests of the taxing
14entities.

15(e) Determine whether any contracts, agreements, or other
16arrangements between the dissolved redevelopment agency and
17any private parties should be terminated or renegotiated to reduce
18liabilities and increase net revenues to the taxing entities, and
19present proposed termination or amendment agreements to the
20oversight board for its approval. The board may approve any
21amendments to or early termination of those agreements if it finds
22that amendments or early termination would be in the best interests
23of the taxing entities.

24(f) All actions taken pursuant to subdivisions (a) and (c) shall
25be approved by resolution of the oversight board at a public
26meeting after at least 10 days’ notice to the public of the specific
27proposed actions. The actions shall be subject to review by the
28department pursuant to Section 34179 except that the department
29may extend its review period by up to 60 days. If the department
30does not object to an action subject to this section, and if no action
31challenging an action is commenced within 60 days of the approval
32of the action by the oversight board, the action of the oversight
33board shall be considered final and can be relied upon as conclusive
34by any person. If an action is brought to challenge an action
35involving title to or an interest in real property, a notice of
36pendency of action shall be recorded by the claimant as provided
37in Title 4.5 (commencing with Section 405) of Part 2 of the Code
38of Civil Procedure within a 60-day period.

39

SEC. 16.  

Section 34183 of the Health and Safety Code is
40amended to read:

P68   1

34183.  

(a) Notwithstanding any other law, from February 1,
22012, to July 1, 2012, and for each fiscal year thereafter, the county
3auditor-controller shall, after deducting administrative costs
4allowed under Section 34182 and Section 95.3 of the Revenue and
5Taxation Code, allocate moneys in each Redevelopment Property
6Tax Trust Fund as follows:

7(1) (A) Subject to any prior deductions required by subdivision
8(b), first, the county auditor-controller shall remit from the
9Redevelopment Property Tax Trust Fund to each local agency and
10school entity an amount of property tax revenues in an amount
11equal to that which would have been received under Section 33401,
1233492.140, 33607, 33607.5, 33607.7, or 33676, as those sections
13read on January 1, 2011, or pursuant to any passthrough agreement
14between a redevelopment agency and a taxing entity that was
15entered into prior to January 1, 1994, that would be in force during
16that fiscal year, had the redevelopment agency existed at that time.
17The amount of the payments made pursuant to this paragraph shall
18be calculated solely on the basis of passthrough payment
19obligations, existing prior to the effective date of this part and
20continuing as obligations of successor entities, shall occur no later
21than May 16, 2012, and no later than June 1, 2012, and each
22January 2 and June 1 thereafter. Notwithstanding subdivision (e)
23of Section 33670, that portion of the taxes in excess of the amount
24identified in subdivision (a) of Section 33670, which are
25attributable to a tax rate levied by a taxing entity for the purpose
26of producing revenues in an amount sufficient to make annual
27repayments of the principal of, and the interest on, any bonded
28indebtedness for the acquisition or improvement of real property
29shall be allocated to, and when collected shall be paid into, the
30fund of that taxing entity. The amount of passthrough payments
31computed pursuant to this section, including any passthrough
32agreements, shall be computed as though the requirement to set
33aside funds for the Low and Moderate Income Housing Fund was
34still in effect.

35(B) Notwithstanding subdivision (b) of Section 33670, that
36portion of the taxes in excess of the amount identified in
37subdivision (a) of Section 33670, which are attributable to a
38property tax rate approved by the voters of a city, county, city and
39county, or special district to make payments in support of pension
40programs or in support of capital projects and programs related to
P69   1the State Water Project, and levied in addition to the property tax
2rate limited by subdivision (a) of Section 1 of Article XIII A of
3the California Constitution, shall be allocated to, and when
4collected shall be paid into, the fund of that taxing entity, unless
5the amounts in question are pledged as security for the payment
6of any indebtedness obligation, as defined in subdivision (e) of
7Section 34171, and needed for payment thereof. Notwithstanding
8any other law, all allocations of revenues above one cent ($0.01)
9derived from the imposition of a property tax rate, approved by
10the voters of a city, county, city and county, or special district to
11make payments in support of pension programs or in support of
12capital projects and programs related to the State Water Project
13and levied in addition to the property tax rate limited by subdivision
14(a) of Section 1 of Article XIII A of the California Constitution,
15made by any county auditor-controller prior to June 15, 2015, are
16valid and shall not be affected by this section. A city, county, city
17and county, county auditor-controller, successor agency,
18department, or affected taxing entity shall not be subject to any
19claim for money, damages, or reallocated revenues based on any
20allocation of such revenues above one cent ($0.01) prior to June
2115, 2015.

22(2) Second, on June 1, 2012, and each January 2 and June 1
23thereafter, to each successor agency for payments listed in its
24Recognized Obligation Payment Schedule for the six-month fiscal
25period beginning January 1, 2012, and July 1, 2012, and each
26January 2 and June 1 thereafter, in the following order of priority:

27(A) Debt service payments scheduled to be made for tax
28allocation bonds.

29(B) Payments scheduled to be made on revenue bonds, but only
30to the extent the revenues pledged for them are insufficient to make
31the payments and only if the agency’s tax increment revenues were
32also pledged for the repayment of the bonds.

33(C) Payments scheduled for other debts and obligations listed
34in the Recognized Obligation Payment Schedule that are required
35to be paid from former tax increment revenue.

36(3) Third, on June 1, 2012, and each January 2 and June 1
37thereafter, to each successor agency for the administrative cost
38allowance, as defined in Section 34171, for administrative costs
39set forth in an approved administrative budget for those payments
40required to be paid from former tax increment revenues.

P70   1(4) Fourth, on June 1, 2012, and each January 2 and June 1
2thereafter, any moneys remaining in the Redevelopment Property
3Tax Trust Fund after the payments and transfers authorized by
4paragraphs (1) to (3), inclusive, shall be distributed to local
5agencies and school entities in accordance with Section 34188.
6The only exception shall be for moneys remaining in the
7Redevelopment Property Tax Trust Fund that are attributable to a
8property tax rate approved by the voters of a city, county, city and
9county, or special district to make payments in support of pension
10programs or in support of capital projects and programs related to
11the State Water Project, and levied in addition to the property tax
12rate limited by subdivision (a) of Section I of Article XIII A of the
13California Constitution. The county auditor-controller shall return
14these particular remaining moneys to the levying taxing entity.

15(b) If the successor agency reports, no later than April 1, 2012,
16and May 1, 2012, and each December 1 and May 1 thereafter, to
17the county auditor-controller that the total amount available to the
18successor agency from the Redevelopment Property Tax Trust
19Fund allocation to that successor agency’s Redevelopment
20Obligation Retirement Fund, from other funds transferred from
21each redevelopment agency, and from funds that have or will
22become available through asset sales and all redevelopment
23operations, are insufficient to fund the payments required by
24paragraphs (1) to (3), inclusive, of subdivision (a) in the next
25six-month fiscal period, the county auditor-controller shall notify
26the Controller and the Department of Finance no later than 10 days
27from the date of that notification. The county auditor-controller
28shall verify whether the successor agency will have sufficient funds
29from which to service debts according to the Recognized
30Obligation Payment Schedule and shall report the findings to the
31Controller. If the Controller concurs that there are insufficient
32funds to pay required debt service, the amount of the deficiency
33shall be deducted first from the amount remaining to be distributed
34to taxing entities pursuant to paragraph (4), and if that amount is
35exhausted, from amounts available for distribution for
36administrative costs in paragraph (3). If an agency, pursuant to the
37provisions of Section 33492.15, 33492.72, 33607.5, 33671.5,
3833681.15, or 33688 or as expressly provided in a passthrough
39agreement entered into pursuant to Section 33401, made
40passthrough payment obligations subordinate to debt service
P71   1payments required for enforceable obligations, funds for servicing
2bond debt may be deducted from the amounts for passthrough
3payments under paragraph (1), as provided in those sections, but
4only to the extent that the amounts remaining to be distributed to
5taxing entities pursuant to paragraph (4) and the amounts available
6for distribution for administrative costs in paragraph (3) have all
7been exhausted.

8(c) The county treasurer may loan any funds from the county
9treasury to the Redevelopment Property Tax Trust Fund of the
10successor agency for the purpose of paying an item approved on
11the Recognized Obligation Payment Schedule at the request of the
12Department of Finance that are necessary to ensure prompt
13payments of redevelopment agency debts. An enforceable
14obligation is created for repayment of those loans.

15(d) The Controller may recover the costs of audit and oversight
16required under this part from the Redevelopment Property Tax
17Trust Fund by presenting an invoice therefor to the county
18auditor-controller who shall set aside sufficient funds for and
19disburse the claimed amounts prior to making the next distributions
20to the taxing entities pursuant to Section 34188. Subject to the
21approval of the Director of Finance, the budget of the Controller
22may be augmented to reflect the reimbursement, pursuant to
23Section 28.00 of the Budget Act.

24(e) Within 10 days of each distribution of property tax, the
25county auditor-controller shall provide a report to the department
26regarding the distribution for each successor agency that includes
27information on the total available for allocation, the passthrough
28amounts and how they were calculated, the amounts distributed
29to successor agencies, and the amounts distributed to taxing entities
30in a manner and form specified by the department. This reporting
31requirement shall also apply to distributions required under
32subdivision (b) of Section 34183.5.

33

SEC. 17.  

Section 34186 of the Health and Safety Code is
34amended to read:

35

34186.  

(a) (1) Differences between actual payments and past
36estimated obligations on recognized obligation payment schedules
37shall be reported in subsequent recognized obligation payment
38schedules and shall adjust the amount to be transferred to the
39Redevelopment Obligation Retirement Fund pursuant to this part.
40These estimates and accounts, as well as cash balances, shall be
P72   1subject to review by the county auditor-controller. The
2county-auditor controller’s review shall be subject to the
3department’s review and approval.

4(2) Audits initiated by the Controller pursuant to this section
5prior to July 1, 2015, shall be continued by the Controller and
6completed no later than June 30, 2016. Nothing in this section
7shall be construed in a manner which precludes, or in any way
8restricts, the Controller from conducting audits of successor
9agencies pursuant to Section 12410 of the Government Code.

10(b) Differences between actual passthrough obligations and
11property tax amounts and the amounts used by the county
12auditor-controller in determining the amounts to be allocated under
13Sections 34183 and 34188 for a prior six-month or annual period,
14whichever is applicable, shall be applied as adjustments to the
15property tax and passthrough amounts in subsequent periods as
16they become known. County auditor-controllers shall not delay
17payments under this part to successor agencies or taxing entities
18based on pending transactions, disputes, or for any other reason,
19other than a court order, and shall use the Recognized Obligation
20Payment Schedule approved by the department and the most
21current data for passthroughs and property tax available prior to
22the statutory distribution dates to make the allocations required on
23the dates required.

24(c) Commencing on October 1, 2018, and each October 1
25thereafter, the differences between actual payments and past
26estimated obligations on a Recognized Obligation Payment
27Schedule shall be submitted by the successor agency to the county
28auditor-controller for review. The county auditor-controller shall
29provide to the department in a manner of the department’s choosing
30a review of the differences between actual payments and past
31estimated obligations, including cash balances, no later than
32February 1, 2019, and each February 1 thereafter.

33

SEC. 18.  

Section 34187 of the Health and Safety Code is
34amended to read:

35

34187.  

(a) (1) Commencing May 1, 2012, whenever a
36recognized obligation that had been identified in the Recognized
37Payment Obligation Schedule is paid off or retired, either through
38early payment or payment at maturity, the county auditor-controller
39shall distribute to the taxing entities, in accordance with the
40provisions of the Revenue and Taxation Code, all property tax
P73   1revenues that were associated with the payment of the recognized
2obligation.

3(2) Notwithstanding paragraph (1), the department may authorize
4a successor agency to retain property tax that otherwise would be
5distributed to affected taxing entities pursuant to this subdivision,
6to the extent the department determines the successor agency
7requires those funds for the payment of enforceable obligations.
8Upon making a determination, the department shall provide the
9county auditor-controller with information detailing the amounts
10that it has authorized the successor agency to retain. Upon
11determining the successor agency no longer requires additional
12funds pursuant to this subdivision, the department shall notify the
13successor agency and the county auditor-controller. The county
14auditor-controller shall then distribute the funds in question to the
15affected taxing entities in accordance with the provisions of the
16Revenue and Taxation Code.

17(b) When all of the enforceable obligations have been retired
18or paid off, all real property has been disposed of pursuant to
19Section 34181 or 34191.4, and all outstanding litigation has been
20resolved, the successor agency shall, within 30 days of meeting
21the aforementioned criteria, submit to the oversight board a request,
22with a copy of the request to the county auditor-controller, to
23formally dissolve the successor agency. The oversight board shall
24approve the request within 30 days, and shall submit the request
25to the department.

26(c) If a redevelopment agency was not allocated property tax
27revenue pursuant to either subdivision (b) of Section 16 of Article
28XVI of the California Constitution or Section 33670 prior to
29February 1, 2012, the successor agency shall, no later than
30September 1, 2015, submit to the oversight board a request to
31formally dissolve the successor agency. The oversight board shall
32approve this request within 30 days, and shall submit the request
33to the department.

34(d) The department shall have 30 days to approve or deny a
35request submitted pursuant to subdivisions (b) or (c).

36(e) When the department has approved a request to formally
37dissolve a successor agency, the successor agency shall take both
38of the following steps within 100 days of the department’s
39notification:

P74   1(1) Dispose of all remaining assets as directed by the oversight
2board. Any proceeds from the disposition of assets shall be
3transferred to the county auditor-controller for distribution to the
4affected taxing entities pursuant to Section 34183.

5(2) Notify the oversight board that it has complied with
6paragraph (1).

7(f) Upon receipt of the notification required in paragraph (2) of
8subdivision (e), the oversight board shall verify all obligations
9have been retired or paid off, all outstanding litigation has been
10resolved, and all remaining assets have been disposed of with any
11proceeds remitted to the county auditor-controller for distribution
12to the affected taxing entities. Within 14 days of verification, the
13oversight board shall adopt a final resolution of dissolution for the
14successor agency, which shall be effective immediately. This
15resolution shall be submitted to the sponsoring entity, the county
16auditor-controller, the State Controller’s Office, and the department
17by electronic means and in a manner of each entity’s choosing.

18(g) Subdivisions (b) to (f), inclusive, does not apply to those
19entities specifically recognized as already dissolved by the
20department by August 1, 2015.

21(h) When all enforceable obligations have been retired or paidbegin insert end insert
22 off as specified in subdivision (b), all passthrough payment
23obligations required pursuant to Sections 33401, 33492.140, 33607,
2433607.5, 33607.7, and 33676, or any passthrough agreement
25between a redevelopment agency and a taxing entity that was
26entered into prior to January 1, 1994, shall cease, and no property
27tax shall be allocated to the Redevelopment Property Tax Trust
28Fund for that agency. The Legislature finds and declares that this
29subdivision is declaratory of existing law.

30(i) When a successor agency is finally dissolved under
31subdivision (b), with respect to any existing community facilities
32district formed by a redevelopment agency, the legislative body
33of the city or county that formed the redevelopment agency shall
34become the legislative body of the community facilities district,
35and any existing obligations of the former redevelopment agency
36or its successor agency, in its capacity as the legislative body of
37the community facilities district, shall become the obligations of
38the new legislative body of the community facilities district. This
39subdivision shall not be construed to result in the continued
P75   1payment of any of the passthrough payment obligations identified
2in subdivision (h).

3

SEC. 19.  

Section 34189 of the Health and Safety Code is
4amended to read:

5

34189.  

(a) Commencing on the effective date of this part, all
6provisions of the Community Redevelopment Law that depend on
7the allocation of tax increment to redevelopment agencies,
8including, but not limited to, Sections 33445, 33640, 33641, and
933645, and subdivision (b) of Section 33670, shall be inoperative.
10Solely for the purposes of the payment of enforceable obligations
11defined by subparagraph (A) to (G), inclusive, of paragraph (1) of
12subdivision (d) of Section 34171 and subdivision (b) of Section
1334191.4, and for no other purpose whatsoever, a successor agency
14is not subject to the limitations relating to time, number of tax
15dollars, or any other matters set forth in Sections 33333.2, 33333.4,
16and 33333.6. Notwithstanding any other provision in this section,
17this subdivision shall not result in the restoration or continuation
18of funding for projects whose contractual terms specified that
19project funding would cease once the limitations specified in any
20of Section 33333.2, 33333.4, or 33333.6 were realized.

21(b) To the extent that a provision of Part 1 (commencing with
22Section 33000), Part 1.5 (commencing with Section 34000), Part
231.6 (commencing with Section 34050), and Part 1.7 (commencing
24with Section 34100) conflicts with this part, the provisions of this
25part shall control. Further, if a provision of Part 1 (commencing
26with Section 33000), Part 1.5 (commencing with Section 34000),
27Part 1.6 (commencing with Section 34050), or Part 1.7
28(commencing with Section 34100) provides an authority that the
29act adding this part is restricting or eliminating, the restriction and
30elimination provisions of the act adding this part shall control.

31(c) It is intended that the provisions of this part shall be read in
32a manner as to avoid duplication of payments.

33

SEC. 20.  

Section 34191.3 of the Health and Safety Code is
34amended to read:

35

34191.3.  

(a) Notwithstanding Section 34191.1, the
36requirements specified in subdivision (e) of Section 34177 and
37subdivision (a) of Section 34181 shall be suspended, except as
38those provisions apply to the transfers for governmental use, until
39the Department of Finance has approved a long-range property
40management plan pursuant to subdivision (b) of Section 34191.5,
P76   1at which point the plan shall govern, and supersede all other
2provisions relating to, the disposition and use of the real property
3assets of the former redevelopment agency. If the department has
4not approved a plan by January 1, 2016, subdivision (e) of Section
534177 and subdivision (a) of Section 34181 shall be operative with
6respect to that successor agency.

7(b) If the department has approved a successor agency’s
8long-range property management plan prior to January 1, 2016,
9the successor agency may amend its long-range property
10management plan once, solely to allow for retention of real
11properties that constitute “parking facilities and lots dedicated
12solely to public parking” for governmental use pursuant to Section
1334181. An amendment to a successor agency’s long-range property
14management plan under this subdivision shall be submitted to its
15oversight board for review and approval pursuant to Section 34179,
16and any such amendment shall be submitted to the department
17prior to July 1, 2016.

18

SEC. 21.  

Section 34191.4 of the Health and Safety Code is
19amended to read:

20

34191.4.  

The following provisions shall apply to any successor
21agency that has been issued a finding of completion by the
22department:

23(a) All real property and interests in real property identified in
24subparagraph (C) of paragraph (5) of subdivision (c) of Section
2534179.5 shall be transferred to the Community Redevelopment
26Property Trust Fund of the successor agency upon approval by the
27Department of Finance of the long-range property management
28plan submitted by the successor agency pursuant to subdivision
29(b) of Section 34191.5 unless that property is subject to the
30requirements of any existing enforceable obligation.

31(b) (1) Notwithstanding subdivision (d) of Section 34171, upon
32application by the successor agency and approval by the oversight
33board, loan agreements entered into between the redevelopment
34agency and the city, county, or city and county that created the
35redevelopment agency shall be deemed to be enforceable
36obligations provided that the oversight board makes a finding that
37the loan was for legitimate redevelopment purposes.

38(2) For purpose of this section, “loan agreements” shall mean
39loans for money entered into between the former redevelopment
40agency and the city, county, or city and county that created the
P77   1former redevelopment agency under which the city, county, or city
2and county that created the former redevelopment agency
3transferred money to the former redevelopment agency for use by
4the former redevelopment agency for a lawful purpose, and where
5the former redevelopment agency was obligated to repay the money
6it received pursuant to a required repayment schedule.

7(3) If the oversight board finds that the loan is an enforceable
8obligation, any interest on the remaining principal amount of the
9loan that was previously unpaid after the original effective date of
10the loan shall be recalculated from the date of the oversight board’s
11finding on a quarterly basis, at a simple interest rate of 3 percent.
12The recalculated loan shall be repaid to the city, county, or city
13and county in accordance with a defined schedule over a reasonable
14term of years. Moneys repaid shall be applied first to the principal,
15and second to the interest. The annual loan repayments provided
16for in the recognized obligation payment schedules shall be subject
17to all of the following limitations:

18(A) Loan repayments shall not be made prior to the 2013-14
19fiscal year. Beginning in the 2013-14 fiscal year, the maximum
20repayment amount authorized each fiscal year for repayments
21made pursuant to this subdivision and paragraph (7) of subdivision
22(e) of Section 34176 combined shall be equal to one-half of the
23increase between the amount distributed to the taxing entities
24pursuant to paragraph (4) of subdivision (a) of Section 34183 in
25that fiscal year and the amount distributed to taxing entities
26pursuant to that paragraph in the 2012-13 base year, provided,
27however, that calculation of the amount distributed to taxing
28entities during the 2012-13 base year shall not include any amounts
29distributed to taxing entities pursuant to the due diligence review
30process established in Sections 34179.5 to 34179.8, inclusive.
31 Loan or deferral repayments made pursuant to this subdivision
32shall be second in priority to amounts to be repaid pursuant to
33paragraph (7) of subdivision (e) of Section 34176.

34(B) Repayments received by the city, county, or city and county
35that formed the redevelopment agency shall first be used to retire
36any outstanding amounts borrowed and owed to the Low and
37Moderate Income Housing Fund of the former redevelopment
38agency for purposes of the Supplemental Educational Revenue
39Augmentation Fund and shall be distributed to the Low and
40Moderate Income Housing Asset Fund established by subdivision
P78   1(d) of Section 34176. Distributions to the Low and Moderate
2Income Housing Asset Fund are subject to the reporting
3requirements of subdivision (f) of Section 34176.1.

4(C) Twenty percent of any loan repayment shall be deducted
5from the loan repayment amount and shall be transferred to the
6Low and Moderate Income Housing Asset Fund, after all
7outstanding loans from the Low and Moderate Income Housing
8Fund for purposes of the Supplemental Educational Revenue
9Augmentation Fund have been paid. Transfers to the Low and
10Moderate Income Housing Asset Fund are subject to the reporting
11requirements of subdivision (f) of Section 34176.1.

12(c) (1) (A) Notwithstanding Section 34177.3 or any other
13conflicting provision of law, bond proceeds derived from bonds
14issued on or before December 31, 2010, in excess of the amounts
15needed to satisfy approved enforceable obligations shall thereafter
16be expended in a manner consistent with the original bond
17covenants. Enforceable obligations may be satisfied by the creation
18of reserves for projects that are the subject of the enforceable
19 obligation and that are consistent with the contractual obligations
20for those projects, or by expending funds to complete the projects.
21An expenditure made pursuant to this paragraph shall constitute
22the creation of excess bond proceeds obligations to be paid from
23the excess proceeds. Excess bond proceeds obligations shall be
24listed separately on the Recognized Obligation Payment Schedule
25submitted by the successor agency. The expenditure of bond
26proceeds described in this subparagraph pursuant to an excess
27bond proceeds obligation shall only require the approval by the
28oversight board of the successor agency.

29(B) If remaining bond proceeds derived from bonds issued on
30or before December 31, 2010, cannot be spent in a manner
31consistent with the bond covenants pursuant to subparagraph (A),
32the proceeds shall be used at the earliest date permissible under
33the applicable bond covenants to defease the bonds or to purchase
34those same outstanding bonds on the open market for cancellation.

35(2) Bond proceeds derived from bonds issued on or after January
361, 2011, in excess of the amounts needed to satisfy approved
37enforceable obligations, shall be used in a manner consistent with
38the original bond covenants, subject to the following provisions:

P79   1(A) No more than 15 percent of the proceeds derived from the
2bonds may be expended, unless the successor agency meets the
3criteria specified in subparagraph (B).

4(B) If the successor agency has an approved Last and Final
5Recognized Obligation Payment Schedule pursuant to Section
634191.6, the agency may expend no more than 30 percent of the
7proceeds derived from the bonds, subject to the following
8adjustments:

9(i) If the bonds were issued during the period of January 1, 2011,
10to January 31, 2011, inclusive, the successor agency may expend
11an additional 25 percent of the proceeds derived from the bonds,
12for a total authorized expenditure of no more than 55 percent.

13(ii) If the bonds were issued during the period of February 1,
142011, to February 28, 2011, inclusive, the successor agency may
15expend an additional 20 percent of the proceeds derived from the
16bonds, for a total authorized expenditure of no more than 50
17percent.

18(iii) If the bonds were issued during the period of March 1,
192011, to March 31, 2011, inclusive, the successor agency may
20expend an additional 15 percent of the proceeds derived from the
21bonds, for a total authorized expenditure of no more than 45
22percent.

23(iv) If the bonds were issued during the period of April 1, 2011,
24to April 30, 2011, inclusive, the successor agency may expend an
25additional 10 percent of the proceeds derived from the bonds, for
26a total authorized expenditure of no more than 40 percent.

27(v) If the bonds were issued during the period of May 1, 2011,
28to May 31, 2011, inclusive, the successor agency may expend an
29additional 5 percent of the proceeds derived from the bonds, for a
30total authorized expenditure of no more than 35 percent.

31(C) Remaining bond proceeds that cannot be spent pursuant to
32subparagraphs (A) and (B) shall be used at the at the earliest date
33permissible under the applicable bond covenants to defease the
34bonds or to purchase those same outstanding bonds on the open
35market for cancellation.

36(D) The expenditure of bond proceeds described in this
37paragraph shall only require the approval by the oversight board
38of the successor agency.

39(3) If a successor agency provides the oversight board and the
40department with documentation that proves, to the satisfaction of
P80   1both entities, that bonds were approved by the former
2redevelopment agency prior to January 31, 2011, but the issuance
3of the bonds was delayed by the actions of a third-party
4metropolitan regional transportation authority beyond January 31,
52011, the successor agency may expend the associated bond
6proceeds in accordance with clause (i) of subparagraph (B) of
7paragraph (2) of this section.

8(4) Any proceeds derived from bonds issued by a former
9redevelopment agency after December 31, 2010, that were issued,
10in part, to refund or refinance tax-exempt bonds issued by the
11former redevelopment agency on or before December 31, 2010,
12and which are in excess of the amount needed to refund or
13refinance the bonds issued on or before December 31, 2010, may
14be expended by the successor agency in accordance with clause
15(i) of subparagraph (B) of paragraph (2) of this section. The
16authority provided in this paragraph is conditioned on the successor
17agency providing to its oversight board and the department the
18resolution by the former redevelopment agency approving the
19issuance of the bonds issued after December 31, 2010.

20(d) This section shall apply retroactively to actions occurring
21on or after June 28, 2011. The amendment of this section by the
22act adding this subdivision shall not result in the denial of a loan
23under subdivision (b) that has been previously approved by the
24department prior to the effective date of the act adding this
25subdivision. Additionally, the amendment of this section by the
26act adding this subdivision shall not impact the judgments, writs
27of mandate, and orders entered by the Sacramento Superior Court
28in the following lawsuits: (1) City of Watsonville v. California
29Department of Finance, et al. (Sac. Superior Ct. Case No.
3034-2014-80001910); (2) City of Glendale v. California Department
31of Finance, et al. (Sac. Superior Ct. Case No. 34-2014-80001924).

32

SEC. 22.  

Section 34191.5 of the Health and Safety Code is
33amended to read:

34

34191.5.  

(a) There is hereby established a Community
35Redevelopment Property Trust Fund, administered by the successor
36agency, to serve as the repository of the former redevelopment
37agency’s real properties identified in subparagraph (C) of paragraph
38(5) of subdivision (c) of Section 34179.5.

39(b) The successor agency shall prepare a long-range property
40management plan that addresses the disposition and use of the real
P81   1properties of the former redevelopment agency. If the former
2redevelopment agency did not have real properties, the successor
3agency shall prepare a long-range property management plan
4certifying that the successor agency does not have real properties
5of the former redevelopment agency for disposition or use. The
6plan shall be submitted to the oversight board and the Department
7of Finance for approval no later than six months following the
8issuance to the successor agency of the finding of completion.

9(c) The long-range property management plan shall do all of
10the following:

11(1) Include an inventory of all properties in the trust. The
12inventory shall consist of all of the following information:

13(A) The date of the acquisition of the property and the value of
14the property at that time, and an estimate of the current value of
15the property.

16(B) The purpose for which the property was acquired.

17(C) Parcel data, including address, lot size, and current zoning
18in the former agency redevelopment plan or specific, community,
19or general plan.

20(D) An estimate of the current value of the parcel including, if
21available, any appraisal information.

22(E) An estimate of any lease, rental, or any other revenues
23generated by the property, and a description of the contractual
24requirements for the disposition of those funds.

25(F) The history of environmental contamination, including
26designation as a brownfield site, any related environmental studies,
27and history of any remediation efforts.

28(G) A description of the property’s potential for transit-oriented
29development and the advancement of the planning objectives of
30the successor agency.

31(H) A brief history of previous development proposals and
32activity, including the rental or lease of property.

33(2) Address the use or disposition of all of the properties in the
34trust. Permissible uses include the retention of the property for
35governmental use pursuant to subdivision (a) of Section 34181,
36the retention of the property for future development, the sale of
37the property, or the use of the property to fulfill an enforceable
38obligation. The plan shall separately identify and list properties in
39the trust dedicated to governmental use purposes and properties
40retained for purposes of fulfilling an enforceable obligation. With
P82   1respect to the use or disposition of all other properties, all of the
2following shall apply:

3(A) (i) If the plan directs the use or liquidation of the property
4for a project identified in an approved redevelopment plan, the
5property shall transfer to the city, county, or city and county.

6(ii) For purposes of this subparagraph, the term “identified in
7an approved redevelopment plan” includes properties listed in a
8community plan or a five-year implementation plan.

9(iii) The department or an oversight board may require approval
10of a compensation agreement or agreements, as described in
11subdivision (f) of Section 34180, prior to any transfer of property
12pursuant to this subparagraph, provided, however, that a
13compensation agreement or agreements may be developed and
14executed subsequent to the approval process of a long-range
15property management plan.

16(B) If the plan directs the liquidation of the property or the use
17of revenues generated from the property, such as lease or parking
18revenues, for any purpose other than to fulfill an enforceable
19obligation or other than that specified in subparagraph (A), the
20proceeds shall be distributed as property tax to the taxing entities.

21(C) Property shall not be transferred to a successor agency, city,
22county, or city and county, unless the long-range property
23management plan has been approved by the oversight board and
24the Department of Finance.

25(d) The department shall only consider whether the long-range
26property management plan makes a good faith effort to address
27the requirements set forth in subdivision (c).

28(e) The department shall approve long-range property
29management plans as expeditiously as possible.

30(f) Actions to implement the disposition of property pursuant
31to an approved long-range property management plan shall not
32require review by the department.

33

SEC. 23.  

Section 34191.6 is added to the Health and Safety
34Code
, to read:

35

34191.6.  

(a) Beginning August 1, 2015, successor agencies
36may submit a Last and Final Recognized Obligation Payment
37Schedule for approval by the oversight board and the department
38if all of the following conditions are met:

39(1) The remaining debt of a successor agency is limited to
40administrative costs and payments pursuant to enforceable
P83   1obligations with defined payment schedules including, but not
2limited to, debt service, loan agreements, and contracts.

3(2) All remaining obligations have been previously listed on a
4Recognized Obligation Payment Schedule and approved for
5payment by the department pursuant to subdivision (m) or (o) of
6Section 34177.

7(3) The successor agency is not a party to outstanding or
8unresolved litigation. Notwithstanding this provision, successor
9agencies that are party to Los Angeles Unified School Dist. v.
10County of Los Angeles (2010) 181 Cal.App.4th 414 or Los Angeles
11Unified School District v. County of Los Angeles (2013) 217
12Cal.App.4th 597, may submit a Last and Final Recognized
13Obligation Payment Schedule.

14(b) A successor agency that meets the conditions in subdivision
15(a) may submit a Last and Final Recognized Obligation Payment
16Schedule to its oversight board for approval at any time. The
17successor agency may then submit the oversight board-approved
18Last and Final Recognized Obligation Payment Schedule to the
19department and only in a manner provided by the department. The
20Last and Final Recognized Obligation Payment Schedule shall not
21be effective until reviewed and approved by the department as
22 provided for in subdivision (c). The successor agency shall also
23submit a copy of the oversight board-approved Last and Final
24Recognized Obligation Payment Schedule to the county
25administrative officer, the county auditor-controller, and post it to
26the successor agency’s Internet Web site at the same time that the
27successor agency submits the Last and Final Recognized Obligation
28Payment Schedule to the department.

29(1) The Last and Final Recognized Obligation Payment Schedule
30shall list the remaining enforceable obligations of the successor
31agency in the following order:

32(A) Enforceable obligations to be funded from the
33Redevelopment Property Tax Trust Fund.

34(B) Enforceable obligations to be funded from bond proceeds
35or enforceable obligations required to be funded from other legally
36or contractually dedicated or restricted funding sources.

37(C) Loans or deferrals authorized for repayment pursuant to
38subparagraph (G) of paragraph (1) of subdivision (d) of Section
3934171 or Section 34191.4.

P84   1(2) The Last and Final Recognized Obligation Payment Schedule
2shall include the total outstanding obligation and a schedule of
3remaining payments for each enforceable obligation listed pursuant
4to subparagraphs (A) and (B) of paragraph (1), and the total
5outstanding obligation and interest rate of 4 percent, for loans or
6deferrals listed pursuant to subparagraph (C) of paragraph (1).

7(c) The department shall have 100 days to review the Last and
8Final Recognized Obligation Payment Schedule submitted pursuant
9to subdivision (b). The department may make any amendments or
10changes to the Last and Final Recognized Obligation Payment
11Schedule, provided the amendments or changes are agreed to by
12the successor agency in writing. If the successor agency and the
13department cannot come to an agreement on the proposed
14amendments or changes, the department shall issue a letter denying
15the Last and Final Recognized Obligation Payment Schedule. All
16Last and Final Recognized Obligation Payment Schedules approved
17by the Department shall become effective on the first day of the
18subsequent Redevelopment Property Tax Trust Fund distribution
19period. If the Last and Final Recognized Obligation Payment
20Schedule is approved less than 15 days before the date of the
21property tax distribution, the Last and Final Recognized Obligation
22Payment Schedule shall not be effective until the subsequent
23Redevelopment Property Tax Trust Fund distribution period.

24(1) Upon approval by the department, the Last and Final
25Recognized Obligation Payment Schedule shall establish the
26maximum amount of Redevelopment Property Tax Trust Funds
27to be distributed to the successor agency for each remaining fiscal
28year until all obligations have been fully paid.

29(2) (A) Successor agencies may submit no more than two
30requests to the department to amend the approved Last and Final
31Recognized Obligation Payment Schedule. Requests shall first be
32approved by the oversight board and then submitted to the
33department for review. A request shall not be effective until
34reviewed and approved by the department. The request shall be
35provided to the department by electronic means and in a manner
36of the department’s choosing. The department shall have 100 days
37from the date received to approve or deny the successor agency’s
38request. All amended Last and Final Recognized Obligation
39Payment Schedules approved by the department shall become
40effective in the subsequent Redevelopment Property Tax Trust
P85   1Fund distribution period. If an amended Last and Final Recognized
2Obligation Payment Schedule is approved less than 15 days before
3the date of the property tax distribution, the Last and Final
4Recognized Obligation Payment Schedule shall not be effective
5until the subsequent Redevelopment Property Tax Trust Fund
6distribution period.

7(B) Notwithstanding paragraph (2), there shall be no limitation
8on the number of Last and Final Recognized Obligation Payment
9Schedule amendment requests that may be submitted to the
10department by successor agencies that are party to either of the
11cases specified in paragraph (3) of subdivision (a), provided those
12additional amendments are submitted for the sole purpose of
13complying with final judicial determinations in those cases.

14(3) Any revenues, interest, and earnings of the successor agency
15not authorized for use pursuant to the approved Last and Final
16Recognized Obligation Payment Schedule shall be remitted to the
17county auditor-controller for distribution to the affected taxing
18entities. Notwithstanding Sections 34191.3 and 34191.5, proceeds
19from the disposition of real property subsequent to the approval
20of the Last and Final Recognized Obligation Payment Schedule
21that are not necessary for the payment of an enforceable obligation
22shall be remitted to the county auditor-controller for distribution
23to the affected taxing entities.

24(4) A successor agency shall not expend more than the amount
25approved for each enforceable obligation listed and approved on
26the Last and Final Recognized Obligation Payment Schedule.

27(5) If a successor agency receives insufficient funds to pay for
28the enforceable obligations approved in the Last and Final
29Recognized Obligation Payment Schedule in any given period,
30the city, county, or city and county that created the redevelopment
31agency may loan or grant funds to a successor agency for that
32period at the successor agency’s request for the sole purpose of
33paying for approved items on the Last and Final Recognized
34Obligation Payment Schedule that would otherwise go unpaid.
35Any loans provided pursuant to this paragraph by the city, county,
36or city and county that created the redevelopment agency shall not
37include an interest component. Additionally, at the request of the
38department, the county treasurer may loan any funds from the
39county treasury to the Redevelopment Property Tax Trust Fund
40of the successor agency for the purpose of paying an item approved
P86   1on the Last and Final Recognized Obligation Payment Schedule
2in order to ensure prompt payments of successor agency debts.
3Any loans provided pursuant to this paragraph by the county
4treasurer shall not include an interest component. A loan made
5under this section shall be repaid from the source of funds approved
6for payment of the underlying enforceable obligation in the Last
7and Final Recognized Obligation Payment Schedule once sufficient
8funds become available from that source. Payment of the loan shall
9not increase the total amount of Redevelopment Property Tax Trust
10Fund received by the successor agency as approved on the Last
11and Final Recognized Obligation Payment Schedule.

12(6) Notwithstanding paragraph (6) of subdivision (e) of Section
1334176 and subparagraph (A) of paragraph (3) of subdivision (b)
14of Section 34191.4, commencing on the date the Last and Final
15Recognized Obligation Payment Schedule becomes effective:

16(A) The maximum repayment amount of the total principal and
17interest on loans and deferrals authorized for repayment pursuant
18to subparagraph (G) of paragraph (1) of subdivision (d) of Section
1934171 or Section 34191.4 and listed and approved in the Last and
20Final Recognized Obligation Payment Schedule shall be 15 percent
21of the moneys remaining in the Redevelopment Property Tax Trust
22Fund after the allocation of moneys in each six-month period
23pursuant to Section 34183 prior to the distributions under paragraph
24(4) of subdivision (a) of Section 34183.

25(B) If the calculation performed pursuant to subparagraph (A)
26results in a lower repayment amount than would result from
27application of the calculation specified in subparagraph (A) of
28paragraph (3) of subdivision (b) of Section 34191.4, the successor
29agency may calculate its Last and Final Recognized Obligation
30Payment Schedule loan repayments using the latter calculation.

31(7) Commencing on the effective date of the approved Last and
32Final Recognized Obligation Payment Schedule, the successor
33agency shall not prepare or transmit Recognized Obligation
34Payment Schedules pursuant to Section 34177.

35(8) Commencing on the effective date of the approved Last and
36Final Recognized Obligation Payment Schedule, oversight board
37resolutions shall not be submitted to the department pursuant to
38subdivision (h) of Section 34179. This paragraph shall not apply
39to oversight board resolutions necessary for refunding bonds
40pursuant to Section 34177.5, long-range property management
P87   1plans pursuant to Section 34191.5, amendments to the Last and
2Final Recognized Obligation Payment Schedule under paragraph
3(2) of subdivision (c), and the final oversight board resolutions
4pursuant to Section 34187.

5(d) The county auditor-controller shall do the following:

6(1) Review the Last and Final Recognized Obligation Payment
7Schedule and provide any objection to the inclusion of any items
8or amounts to the department.

9(2) After the Last and Final Recognized Obligation Payment
10Schedule is approved by the department, the county
11auditor-controller shall continue to allocate moneys in the
12Redevelopment Property Tax Trust Fund pursuant to Section
1334183; however, the allocation from the Redevelopment Property
14Tax Trust Funds in each fiscal period, after deducting
15auditor-controller administrative costs, shall be according to the
16following order of priority:

17(A) Allocations pursuant to paragraph (1) of subdivision (a) of
18Section 34183.

19(B) Debt service payments scheduled to be made for tax
20allocation bonds that are listed and approved in the Last and Final
21Recognized Obligation Payment Schedule.

22(C) Payments scheduled to be made on revenue bonds that are
23listed and approved in the Last and Final Recognized Obligation
24Payment Schedule, but only to the extent the revenues pledged for
25them are insufficient to make the payments and only if the agency’s
26tax increment revenues were also pledged for the repayment of
27bonds.

28(D) Payments scheduled for debts and obligations listed and
29approved in the Last and Final Recognized Obligation Payment
30Schedule to be paid from the Redevelopment Property Tax Trust
31Fund pursuant to subparagraph (A) of paragraph (1) of subdivision
32(b) and subdivision (c).

33(E) Payments listed and approved pursuant to subparagraph (A)
34 of paragraph (1) of subdivision (b) and subdivision (c) that were
35authorized but unfunded in prior periods.

36(F) Repayment in the amount specified in paragraph (6) of
37subdivision (c) of loans and deferrals listed and approved on the
38Last and Final Recognized Obligation Payment Schedule pursuant
39to subparagraph (C) of paragraph (1) of subdivision (b) and
40subdivision (c).

P88   1(G) Any moneys remaining in the Redevelopment Property Tax
2Trust Fund after the payments and transfers authorized by
3subparagraphs (A) to (F), inclusive, shall be distributed to taxing
4entities in accordance with paragraph (4) of subdivision (a) of
5Section 34183.

6(3) If the successor agency reports to the county
7auditor-controller that the total available amounts in the
8Redevelopment Property Tax Trust Fund will be insufficient to
9fund their current or future fiscal year obligations, and if the county
10auditor-controller concurs that there are insufficient funds to pay
11the required obligations, the county auditor-controller may
12distribute funds pursuant to subdivision (b) of Section 34183.

13(4) The county auditor-controller shall no longer distribute
14property tax to the Redevelopment Property Tax Trust Fund once
15the aggregate amount of property tax allocated to the successor
16agency equals the total outstanding obligation approved in the Last
17and Final Recognized Obligation Payment Schedule.

18(e) Successor agencies with a Last and Final Recognized
19Payment Schedule approved by the department may amend or
20modify existing contracts, agreements, or other arrangements
21identified on the Last and Final Recognized Obligation Payment
22Schedule which the department has already determined to be
23enforceable obligations, provided:

24(1) The outstanding payments owing from the successor agency
25are not accelerated or increased in any way.

26(2) Any amendment to extend terms shall not include an
27extension beyond the last scheduled payment for the enforceable
28obligations listed and approved on the Last and Final Recognized
29Obligation Payment Schedule.

30(3) This subdivision shall not be construed as authorizing
31successor agencies to create new or additional enforceable
32obligations or otherwise increase, directly or indirectly, the amount
33of Redevelopment Property Tax Trust Funds allocated to the
34successor agency by the county auditor-controller.

35

SEC. 24.  

Section 96.11 of the Revenue and Taxation Code is
36amended to read:

37

96.11.  

Notwithstanding any other provision of this article, for
38purposes of property tax revenue allocations, the county auditor
39of a county for which a negative sum was calculated pursuant to
40subdivision (a) of former Section 97.75 as that section read on
P89   1September 19, 1983, shall, in reducing the amount of property tax
2revenue that otherwise would be allocated to the county by an
3amount attributable to that negative sum, do all of the following:

4(a) For the 2011-12 fiscal year, apply a reduction amount that
5is equal to the lesser of either of the following:

6(1) The reduction amount that was determined for the 2010-11
7fiscal year.

8(2) The reduction amount that is determined for the 2011-12
9fiscal year.

10(b) For the 2012-13 fiscal year, apply a reduction amount that
11is equal to the lesser of either of the following:

12(1) The reduction amount that was determined in subdivision
13(a) for the 2011-12 fiscal year.

14(2) The reduction amount that is determined for the 2012-13
15fiscal year.

16(c) For the 2013-14 fiscal year and for the 2014-15 fiscal year,
17apply a reduction amount that is determined on the basis of the
18reduction amount applied for the immediately preceding fiscal
19year.

20(d) For the 2015-16 fiscal year and each fiscal year thereafter,
21the county auditor shall not apply a reduction amount.

22

SEC. 25.  

Section 96.24 is added to the Revenue and Taxation
23Code
, to read:

24

96.24.  

Notwithstanding any other law, the property tax
25apportionment factors applied in allocating property tax revenues
26in the County of San Benito for each fiscal year through the
272000-01 fiscal year, inclusive, are deemed to be correct.
28Notwithstanding the audit time limits specified in paragraph (3)
29of subdivision (c) of Section 96.1, the county auditor shall make
30the allocation adjustments identified in the State Controller’s audit
31of the County of San Benito for the 2001-02 fiscal year pursuant
32to the other provisions of paragraph (3) of subdivision (c) of
33Section 96.1. For the 2002-03 fiscal year and each fiscal year
34thereafter, property tax apportionment factors applied in allocating
35property tax revenues in the County of San Benito shall be
36 determined on the basis of property tax apportionment factors for
37prior fiscal years that have been fully corrected and adjusted,
38pursuant to the review and recommendation of the Controller, as
39would be required in the absence of the preceding sentences.

P90   1

SEC. 26.  

Section 98 of the Revenue and Taxation Code is
2amended to read:

3

98.  

(a) In each county, other than the County of Ventura,
4having within its boundaries a qualifying city, the computations
5made pursuant to Section 96.1 or its predecessor section, for the
61989-90 fiscal year and each fiscal year thereafter, shall be
7modified as follows:

8With respect to tax rate areas within the boundaries of a
9qualifying city, there shall be excluded from the aggregate amount
10of “property tax revenue allocated pursuant to this chapter to local
11agencies, other than for a qualifying city, in the prior fiscal year,”
12an amount equal to the sum of the amounts calculated pursuant to
13the TEA formula.

14(b) (1) Except as otherwise provided in this section, each
15 qualifying city shall, for the 1989-90 fiscal year and each fiscal
16year thereafter, be allocated by the auditor an amount determined
17pursuant to the TEA formula.

18(2) For each qualifying city, the auditor shall, for the 1989-90
19fiscal year and each fiscal year thereafter, allocate the amount
20determined pursuant to the TEA formula to all tax rate areas within
21that city in proportion to each tax rate area’s share of the total
22assessed value in the city for the applicable fiscal year, and the
23amount so determined shall be subtracted from the county’s
24proportionate share of property tax revenue for that fiscal year
25within those tax rate areas.

26(3) After making the allocations pursuant to paragraphs (1) and
27(2), but before making the calculations pursuant to Section 96.5
28or its predecessor section, the auditor shall, for all tax rate areas
29in the qualifying city, calculate the proportionate share of property
30tax revenue allocated pursuant to this section and Section 96.1, or
31their predecessor sections, in the 1989-90 fiscal year and each
32fiscal year thereafter to each jurisdiction in the tax rate area.

33(4) In lieu of making the allocations of annual tax increment
34pursuant to subdivision (e) of Section 96.5 or its predecessor
35section, the auditor shall, for the 1989-90 fiscal year and each
36fiscal year thereafter, allocate the amount of property tax revenue
37determined pursuant to subdivision (d) of Section 96.5 or its
38predecessor section to jurisdictions in the tax rate area using the
39proportionate shares derived pursuant to paragraph (3).

P91   1(5) For purposes of the calculations made pursuant to Section
296.1 or its predecessor section, in the 1990-91 fiscal year and each
3fiscal year thereafter, the amounts that would have been allocated
4to qualifying cities pursuant to this subdivision shall be deemed
5to be the “amount of property tax revenue allocated in the prior
6fiscal year.”

7(c) “TEA formula” means the Tax Equity Allocation formula,
8and shall be calculated by the auditor for each qualifying city as
9follows:

10(1) For the 1988-89 fiscal year and each fiscal year thereafter,
11the auditor shall determine the total amount of property tax revenue
12to be allocated to all jurisdictions in all tax rate areas within the
13qualifying city, before the allocation and payment of funds in that
14fiscal year to a community redevelopment agency within the
15qualifying city, as provided in subdivision (b) of Section 33670
16of the Health and Safety Code.

17(2) The auditor shall determine the total amount of funds
18allocated in each fiscal year to a community redevelopment agency
19in accordance with subdivision (b) of Section 33670 of the Health
20and Safety Code.

21(3) The auditor shall determine the total amount of funds paid
22in each fiscal year by a community redevelopment agency within
23the city to jurisdictions other than the city pursuant to subdivision
24(b) of Section 33401 and Section 33676 of the Health and Safety
25Code, and the cost to the redevelopment agency of any land or
26facilities transferred and any amounts paid to jurisdictions other
27than the city to assist in the construction or reconstruction of
28facilities pursuant to an agreement entered into under Section
2933401 or 33445.5 of the Health and Safety Code.

30(4) The auditor shall subtract the amount determined in
31paragraph (3) from the amount determined in paragraph (2).

32(5) The auditor shall subtract the amount determined in
33paragraph (4) from the amount determined in paragraph (1).

34(6) The amount computed in paragraph (5) shall be multiplied
35by the following percentages in order to determine the TEA
36formula amount to be distributed to the qualifying city in each
37fiscal year:

38(A) For the first fiscal year in which the qualifying city receives
39a distribution pursuant to this section, 1 percent of the amount
40determined in paragraph (5).

P92   1(B) For the second fiscal year in which the qualifying city
2receives a distribution pursuant to this section, 2 percent of the
3amount determined in paragraph (5).

4(C) For the third fiscal year in which the qualifying city receives
5a distribution pursuant to this section, 3 percent of the amount
6determined in paragraph (5).

7(D) For the fourth fiscal year in which the qualifying city
8receives a distribution pursuant to this section, 4 percent of the
9amount determined in paragraph (5).

10(E) For the fifth fiscal year in which the qualifying city receives
11a distribution pursuant to this section, 5 percent of the amount
12determined in paragraph (5).

13(F) For the sixth fiscal year in which the qualifying city receives
14a distribution pursuant to this section, 6 percent of the amount
15determined in paragraph (5).

16(G) For the seventh fiscal year and each fiscal year thereafter
17in which the city receives a distribution pursuant to this section,
187 percent of the amount determined in paragraph (5).

19(d) “Qualifying city” means any city, except a qualifying city
20as defined in Section 98.1, that incorporated prior to June 5, 1987,
21and had an amount of property tax revenue allocated to it pursuant
22to subdivision (a) of Section 96.1 or its predecessor section in the
231988-89 fiscal year that is less than 7 percent of the amount of
24property tax revenue computed as follows:

25(1) The auditor shall determine the total amount of property tax
26revenue allocated to the city in the 1988-89 fiscal year.

27(2) The auditor shall subtract the amount in the 1988-89 fiscal
28year determined in paragraph (3) of subdivision (c) from the
29amount determined in paragraph (2) of subdivision (c).

30(3) The auditor shall subtract the amount determined in
31paragraph (2) from the amount of property tax revenue determined
32in paragraph (1) of subdivision (c).

33(4) The auditor shall divide the amount of property tax revenue
34determined in paragraph (1) of this subdivision by the amount of
35property tax revenue determined in paragraph (3) of this
36subdivision.

37(5) If the quotient determined in paragraph (4) of this subdivision
38is less than 0.07, the city is a qualifying city. If the quotient
39determined in that paragraph is equal to or greater than 0.07, the
40city is not a qualifying city.

P93   1(e) The auditor may assess each qualifying city its proportional
2share of the actual costs of making the calculations required by
3this section, and may deduct that assessment from the amount
4allocated pursuant to subdivision (b). For purposes of this
5subdivision, a qualifying city’s proportional share of the auditor’s
6actual costs shall not exceed the proportion it receives of the total
7amounts excluded in the county pursuant to subdivision (a).

8(f) Notwithstanding subdivision (b), in any fiscal year in which
9a qualifying city is to receive a distribution pursuant to this section,
10the auditor shall reduce the actual amount distributed to the
11qualifying city by the sum of the following:

12(1) The amount of property tax revenue that was exchanged
13between the county and the qualifying city as a result of negotiation
14pursuant to Section 99.03.

15(2) (A) The amount of revenue not collected by the qualifying
16city in the first fiscal year following the city’s reduction after
17January 1, 1988, of the tax rate or tax base of any locally imposed
18tax, except any tax that was imposed after January 1, 1988. In the
19case of a tax that existed before January 1, 1988, this clause shall
20apply only with respect to an amount attributable to a reduction
21of the rate or base to a level lower than the rate or base applicable
22on January 1, 1988. The amount so computed by the auditor shall
23constitute a reduction in the amount of property tax revenue
24distributed to the qualifying city pursuant to this section in each
25succeeding fiscal year. That amount shall be aggregated with any
26additional amount computed pursuant to this clause as the result
27of the city’s reduction in any subsequent year of the tax rate or tax
28base of the same or any other locally imposed general or special
29tax.

30(B) No reduction may be made pursuant to subparagraph (A)
31in the case in which a local tax is reduced or eliminated as a result
32of either a court decision or the approval or rejection of a ballot
33measure by the voters.

34(3) The amount of property tax revenue received pursuant to
35this chapter in excess of the amount allocated for the 1986-87
36fiscal year by all special districts that are governed by the city
37council of the qualifying city or whose governing body is the same
38as the city council of the qualifying city with respect to all tax rate
39areas within the boundaries of the qualifying city.

40Notwithstanding this paragraph:

P94   1(A) Commencing with the 1994-95 fiscal year, the auditor shall
2not reduce the amount distributed to a qualifying city under this
3section by reason of that city becoming the successor agency to a
4special district, that is dissolved, merged with that city, or becomes
5a subsidiary district of that city, on or after July 1, 1994.

6(B) Commencing with the 1997-98 fiscal year, the auditor shall
7not reduce the amount distributed to a qualifying city under this
8section by reason of that city withdrawing from a county free
9library system pursuant to Section 19116 of the Education Code.

10(4) Any amount of property tax revenues that has been
11exchanged pursuant to Section 56842 of the Government Code,
12as that section read on January 1, 1998, between the City of Rancho
13Mirage and a community services district, the formation of which
14was initiated on or after March 6, 1997, pursuant to Chapter 4
15(commencing with Section 56800) of Part 3 of Division 3 of Title
165 of the Government Code.

17(g) Notwithstanding any other provision of this section, in no
18event may the auditor reduce the amount of ad valorem property
19tax revenue otherwise allocated to a qualifying city pursuant to
20this section on the basis of any additional ad valorem property tax
21revenues received by that city pursuant to a services for revenue
22agreement. For purposes of this subdivision, a “services for revenue
23agreement” means any agreement between a qualifying city and
24the county in which it is located, entered into by joint resolution
25of that city and that county, under which additional service
26responsibilities are exchanged in consideration for additional
27property tax revenues.

28(h) In any fiscal year in which a qualifying city is to receive a
29distribution pursuant to this section, the auditor shall increase the
30actual amount distributed to the qualifying city by the amount of
31property tax revenue allocated to the qualifying city pursuant to
32Section 19116 of the Education Code.

33(i) If the auditor determines that the amount to be distributed to
34a qualifying city pursuant to subdivision (b), as modified by
35subdivisions (e), (f), and (g) would result in a qualifying city having
36proceeds of taxes in excess of its appropriation limit, the auditor
37shall reduce the amount, on a dollar-for-dollar basis, by the amount
38that exceeds the city’s appropriations limit.

P95   1(j) The amount not distributed to the tax rate areas of a
2qualifying city as a result of this section shall be distributed by the
3auditor to the county.

4(k) Notwithstanding any other provision of this section, no
5qualifying city shall be distributed an amount pursuant to this
6section that is less than the amount the city would have been
7allocated without the application of the TEA formula.

8(l) Notwithstanding any other provision of this section, the
9auditor shall not distribute any amount determined pursuant to this
10section to any qualifying city that has in the prior fiscal year used
11any revenues or issued bonds for the construction, acquisition, or
12development, of any facility which is defined in Section 103(b)(4),
13103(b)(5), or 103(b)(6) of the Internal Revenue Code of 1954 prior
14to the enactment of the Tax Reform Act of 1986 (Public Law
1599-514) and is no longer eligible for tax-exempt financing.

16(m) (1) The amendments made to this section, and the repeal
17of Section 98.04, by the act that added this subdivision shall apply
18for the 2006-07 fiscal year and each fiscal year thereafter.

19(2) For the 2006-07 fiscal year and for each fiscal year
20thereafter, all of the following apply:

21(A) The auditor of the County of Santa Clara shall do both of
22the following:

23(i) Reduce the total amount of ad valorem property tax revenue
24otherwise required to be allocated to qualifying cities in that county
25by the ERAF reimbursement amount. This reduction for each
26qualifying city in the county for each fiscal year shall be the
27percentage share, of the total reduction required by this clause for
28all qualifying cities in the county for the 2006-07 fiscal year, that
29is equal to the proportion that the total amount of additional ad
30valorem property tax revenue that is required to be allocated to
31the qualifying city as a result of the act that added this subdivision
32bears to the total amount of additional ad valorem property tax
33revenue that is required to be allocated to all qualifying cities in
34the county as a result of the act that added this subdivision.

35(ii) Increase the total amount of ad valorem property tax revenue
36otherwise required to be allocated to the county Educational
37Revenue Augmentation Fund by the ERAF reimbursement amount.

38(B) For purposes of this subdivision, “ERAF reimbursement
39amount” means an amount equal to the difference between the
40following two amounts:

P96   1(i) The portion of the annual tax increment that would have been
2allocated from the county to the county Educational Revenue
3Augmentation Fund for the applicable fiscal year if the act that
4added this subdivision had not been enacted.

5(ii) The portion of the annual tax increment that is allocated
6from the county to the county Educational Revenue Augmentation
7Fund for the applicable fiscal year.

8(n) Notwithstanding subdivision (m) and except as provided in
9paragraph (2), for the 2015-16 fiscal year and for each fiscal year
10thereafter, all of the following shall apply:

11(1) The auditor of the County of Santa Clara shall do both of
12the following:

13(A) (i) Reduce the total amount of ad valorem property tax
14revenue otherwise required to be allocated to qualifying cities in
15that county by the percentage specified in clause (ii) of the ERAF
16reimbursement amount. This reduction for each qualifying city in
17the county for each fiscal year shall be the percentage share, of
18the total reduction required by this clause for all qualifying cities
19in the county for the 2015-16 fiscal year, that is equal to the
20proportion that the total amount of additional ad valorem property
21tax revenue that is required to be allocated to the qualifying city
22as a result of the act that added this subdivision bears to the total
23amount of additional ad valorem property tax revenue that is
24required to be allocated to all qualifying cities in the county as a
25result of the act that added this subdivision.

26(ii) (I) For the first fiscal year in which qualifying cities receive
27an allocation pursuant to this subdivision, 80 percent.

28(II) For the second fiscal year in which qualifying cities receive
29an allocation pursuant to this subdivision, 60 percent.

30(III) For the third fiscal year in which qualifying cities receive
31an allocation pursuant to this subdivision, 40 percent.

32(IV) For the fourth fiscal year in which qualifying cities receive
33an allocation pursuant to this subdivision, 20 percent.

34(V) For the fifth fiscal year in which qualifying cities receive
35an allocation pursuant to this subdivision, and for each fiscal year
36thereafter in which a qualifying city receives an allocation pursuant
37to this subdivision, zero percent.

38(B) Increase the total amount of ad valorem property tax revenue
39otherwise required to be allocated to the county Educational
P97   1Revenue Augmentation Fund by the percentage specified in clause
2(ii) of subparagraph (A) of the ERAF reimbursement amount.

3(2) The auditor of the County of Santa Clara shall not adjust
4the ERAF reimbursement amount by the percentages specified in
5clause (ii) of subparagraph (A) of paragraph (1) in any fiscal year
6in which the amount of moneys required to be applied by the state
7for the support of school districts and community college districts
8is determined pursuant to paragraph (1) of subdivision (b) of
9Section 8 of Article XVI of the California Constitution.

10(3) For purposes of this subdivision, “ERAF reimbursement
11amount” has the same meaning as defined in subparagraph (B) of
12paragraph (2) of subdivision (m).

13

SEC. 27.  

The Legislature hereby finds and declares all of the
14following:

15(a) The Department of Finance has provided written
16confirmation to the successor agency to the Redevelopment Agency
17of the City and County of San Francisco (successor agency) that
18the following projects are finally and conclusively approved as
19enforceable obligations:

20(1) The Mission Bay North Owner Participation Agreement.

21(2) The Mission Bay South Owner Participation Agreement.

22(3) The Disposition and Development Agreement for Hunters
23Point Shipyard Phase 1.

24(4) The Candlestick Point-Hunters Point Shipyard Phase 2
25Disposition and Development Agreement.

26(5) The Transbay Implementation Agreement.

27(b) The enforceable obligations described in subdivision (a)
28require the successor agency to fund and develop affordable
29housing, including 1,200 units in Transbay, 1,445 units in Mission
30Bay North and Mission Bay South, and 1,358 units in Candlestick
31Point-Hunters Point Shipyard Phases 1 and 2. In addition, the
32successor agency is required to fund and develop public
33infrastructure in the Transbay Redevelopment Project Area
34pursuant to the Transbay Implementation Agreement, which is
35necessary to improve the area surrounding the Transbay Transit
36Center.

37(c) Due to insufficient property tax revenues in the
38Redevelopment Property Tax Trust Fund, of the total number of
39affordable housing units that the successor agency is obligated to
40fund and develop under the enforceable obligations described in
P98   1subdivision (a), the successor agency has been able to finance the
2construction of only 642 units. Additionally, the successor agency
3has not been able to fulfill its public infrastructure obligation under
4the Transbay Implementation Agreement.

5(d) The successor agency can more expeditiously construct the
63,361 additional units of required affordable housing and the
7necessary infrastructure improvements if it is able to issue bonds
8or incur other indebtedness secured by property tax revenues
9available in the Redevelopment Property Tax Trust Fund to finance
10these obligations.

11(e) It is the intent of the Legislature to authorize the successor
12agency to issue bonds or incur other indebtedness for the purpose
13of financing the construction of affordable housing and
14infrastructure required under the enforceable obligations described
15in subdivision (a). These bonds or other indebtedness may be
16secured by property tax revenues available in the successor
17agency’s Redevelopment Property Tax Trust Fund from those
18project areas that generated tax increment for the Redevelopment
19Agency of the City and County of San Francisco upon its
20dissolution, if the revenues are not otherwise obligated.

21(f) Authorizing the successor agency to issue bonds or incur
22other indebtedness to finance the enforceable obligations described
23in subdivision (a) will financially benefit the affected taxing
24entities, insofar as it will ensure that funds which would otherwise
25flow to those entities as “residual” payments pursuant to paragraph
26(4) of subdivision (a) of Section 34183 of the Health and Safety
27Code will not be redirected to fund these enforceable obligations.
28Instead, the enforceable obligations will be funded with the
29proceeds of the bonds or debt issuances.

30(g) The housing situation in the City and County of San
31Francisco is unique, in that median rents and sales prices are among
32the highest in the state. Because of this, the City and County of
33San Francisco is currently facing an affordable housing crisis.

34

SEC. 28.  

(a) For the 2015-16 fiscal year, the sum of
35twenty-three million seven hundred fifty thousand dollars
36($23,750,000) is hereby appropriated from the General Fund to
37the Department of Forestry and Fire Protection. Provision of these
38funds to the department shall be contingent on the County of
39Riverside agreeing to forgive amounts owed to it by the Cities of
40Eastvale, Jurupa Valley, Menifee, and Wildomar for services
P99   1rendered to the cities between the respective dates of their
2incorporation, and June 30, 2015. The county’s agreement to
3forgive these funds shall be forwarded to the Chairperson of the
4Joint Legislative Budget Committee and to the Director of Finance
5no later than August 1, 2015. The county’s agreement shall be
6accompanied by a summary of the actual amount owed to the
7county by each of the cities for the period between the date of their
8incorporation and June 30, 2015. The agreement reflects a valid
9public purpose which benefits the cities, the county, and its citizens.

10(b) Within 30 days of receiving notification from the county as
11specified in subdivision (a), the Director of Finance shall do all of
12the following:

13(1) Verify the accuracy of the county’s summary of the amounts
14owed to it by the three cities.

15(2) Direct the Controller to transmit to the department, from the
16appropriation provided in subdivision (a), an amount that
17corresponds to the amount that the Director of Finance has verified
18pursuant to paragraph (1).

19(3) Initiate steps to reduce the amount of reimbursements
20provided to the department in the Budget Act of 2015 by an amount
21that corresponds to the amount provided to the department pursuant
22to paragraph (2).

23

SEC. 29.  

(a) The Legislature finds and declares that the special
24law contained in Section 9 of this measure is necessary and that a
25general law cannot be made applicable within the meaning of
26Section 16 of Article IV of the California Constitution because of
27the unique circumstances relating to affordable housing in the City
28and County of San Francisco in conjunction with the affordable
29housing and infrastructure requirements of the enforceable
30obligations specified in this act.

31(b) The Legislature finds and declares that the special law
32 contained in Section 25 of this measure is necessary and that a
33general law cannot be made applicable within the meaning of
34Section 16 of Article IV of the California Constitution because of
35the uniquely severe fiscal difficulties being suffered by the County
36of San Benito.

37(c) The Legislature finds and declares that the special law
38contained in Section 26 of this measure is necessary and that a
39general law cannot be made applicable within the meaning of
40Section 16 of Article IV of the California Constitution because of
P100  1the unique fiscal pressures being experienced by qualifying cities,
2as defined in Section 98 of the Revenue and Taxation Code, in the
3County of Santa Clara.

4

SEC. 30.  

If the Commission on State Mandates determines
5that this act contains costs mandated by the state, reimbursement
6to local agencies and school districts for those costs shall be made
7pursuant to Part 7 (commencing with Section 17500) of Division
84 of Title 2 of the Government Code.

9

SEC. 31.  

This act is a bill providing for appropriations related
10to the Budget Bill within the meaning of subdivision (e) of Section
1112 of Article IV of the California Constitution, has been identified
12as related to the budget in the Budget Bill, and shall take effect
13immediately.



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