AB 654: Redevelopment: revenues from property tax override rates.
- Session Year: 2015-2016
- House: Assembly
- Latest Version Date: 2015-04-22
(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. Existing law requires revenues equivalent to those that would have been allocated to each redevelopment agency, had the agency not been dissolved, to be allocated to the Redevelopment Property Tax Trust Fund of each successor agency for, among other things, making payments on the principal of, and interest on, loans and moneys advanced to, or indebtedness incurred by, the dissolved redevelopment agencies and making payments due for enforceable obligations. Existing law also requires successor agencies to perform obligations required pursuant to any enforceable obligation. agencies. 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 in a specified manner.
This bill would provide that any action by the Department of Finance that occurred on or after June 28, 2011, carrying out the departments obligations under the provisions described above, constitutes a department action for the preparation, development, or administration of the state budget and is exempt from the rulemaking provisions of 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 agencys 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 agencys 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 the exclusions described above 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 defines the term enforceable obligation to include specified amounts owed by a former redevelopment agency. The California Constitution generally limits ad valorem taxes on real property to 1% of the full cash value of that property. The California Constitution authorizes a local entity to, with voter approval, levy an additional property tax rate for specified bonded indebtedness.
This bill would provide that enforceable obligation includes amounts derived from an additional property tax rate approved by the voters of a city, county, city and county, or special district to make payments in support of capital projects and programs related to the State Water Project, consistent with the use approved by the voters of the city, county, city and county, or special district.
(5)Existing law specifies that the term enforceable obligation includes amounts borrowed from, or payments owing to, the Low and Moderate Income Housing Fund of a redevelopment agency that had been deferred as of a certain date.
This bill would provide that the enforceable obligation described above includes only amounts borrowed from, or payments owing to, the Low and Moderate Income Housing Fund of a redevelopment agency pursuant to specified provisions that had been deferred as of a certain date. This bill would provide that this definition applies retroactively to all enforceable obligations recognized above on or after June 28, 2011.
(6)Existing law also 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, for the financing or refinancing of indebtedness obligations that existed prior to January 1, 2011, and solely for the purpose of securing or repaying those indebtedness obligations, to be deemed enforceable obligations.
(7)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, require 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 2 requests to the department to amend the approved Last and Final Recognized Obligation Payment Schedule, 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 allocate moneys in the Redevelopment Property Tax Trust Fund in a specified order of priority.
This bill would authorize a city, county, city and county, or special district that levies a property tax rate, approved by the voters of a city, county, city and county, or special district to make payments in support of the State Water Project and levied in addition to the general property tax rate, to make a request to an oversight board to prohibit revenues derived from that property tax rate from being deposited into a Redevelopment Property Tax Fund. This bill would authorize an oversight board to deny this request based on substantial evidence that a former redevelopment agency made a pledge of revenues that specifically included revenues derived from the imposition of that property tax rate. This bill, for the 201516 fiscal year and each fiscal year thereafter, except to the extent an oversight board denies a request, would prohibit any revenues derived from the imposition of that property tax rate from being allocated to a Redevelopment Property Tax Trust Fund and would, instead, require these revenues to be allocated to, and when collected to be paid into, the fund of the city, county, city and county, or special district whose voters approved the tax. The bill would require all allocations of revenues derived from the imposition of that property tax rate made by any county auditor-controller prior to July 1, ____, to be deemed correct, and would prohibit any city, county, county auditor-controller, successor agency, or affected taxing entity from being subject to any claim, as specified. This bill would require, to the extent that revenues derived from the imposition of a property tax rate, approved by the voters of a city or county or special district to make payments in support of the State Water Project and levied in addition to the general property tax rate, are deposited into a Redevelopment Property Tax Trust Fund, the county auditor-controller to allocate moneys from each Redevelopment Property Tax Trust Fund to a city or county or special district that levies a property tax as so described after certain other allocations have been made.
(8)
(2)By adding to the duties of local government officials with respect to the wind down of the dissolved redevelopment agencies, 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.
Existing
(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. Existing law requires revenues equivalent to those that would have been allocated to each redevelopment agency, had the agency not been dissolved, to be allocated to the Redevelopment Property Tax Trust Fund of each successor agency for, among other things, making payments on the principal of, and interest on, loans and moneys advanced to, or indebtedness incurred by, the dissolved redevelopment agencies and making payments due for enforceable obligations. Existing law requires the county auditor-controller, after deducting administrative costs, to allocate property tax revenues in each Redevelopment Property Tax Trust Fund in a specified manner. Existing law also requires successor agencies 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 departments obligations under the provisions described above, constitutes a department action for the preparation, development, or administration of the state budget and is exempt from the rulemaking provisions of 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 agencys 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 agencys 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 the exclusions described above 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 defines the term enforceable obligation to include specified amounts owed by a former redevelopment agency. The California Constitution generally limits ad valorem taxes on real property to 1% of the full cash value of that property. The California Constitution authorizes a local entity to, with voter approval, levy an additional property tax rate for specified bonded indebtedness.
This bill would provide that enforceable obligation includes amounts derived from an additional property tax rate approved by the voters of a city, county, city and county, or special district to make payments in support of capital projects and programs related to the State Water Project, consistent with the use approved by the voters of the city, county, city and county, or special district.
(5)Existing law specifies that the term enforceable obligation includes amounts borrowed from, or payments owing to, the Low and Moderate Income Housing Fund of a redevelopment agency that had been deferred as of a certain date.
This bill would provide that the enforceable obligation described above includes only amounts borrowed from, or payments owing to, the Low and Moderate Income Housing Fund of a redevelopment agency pursuant to specified provisions that had been deferred as of a certain date. This bill would provide that this definition applies retroactively to all enforceable obligations recognized above on or after June 28, 2011.
(6)Existing law also 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, for the financing or refinancing of indebtedness obligations that existed prior to January 1, 2011, and solely for the purpose of securing or repaying those indebtedness obligations, to be deemed enforceable obligations.
(7)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, require 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 2 requests to the department to amend the approved Last and Final Recognized Obligation Payment Schedule, 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 allocate moneys in the Redevelopment Property Tax Trust Fund in a specified order of priority.
(8)By adding to the duties of local government officials with respect to the wind down of the dissolved redevelopment agencies, 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.
This bill would state the intent of the Legislature that the use of residual revenues, derived from an additional property tax rate approved by the voters of a city, county, city and county, or special district to make payments in support of capital projects and programs related to the State Water Project, be consistent with the use of those revenues approved by the voters of the relevant jurisdiction.
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. Existing law requires revenues equivalent to those that would have been allocated to each redevelopment agency, had the agency not been dissolved, to be allocated to the Redevelopment Property Tax Trust Fund of each successor agency for, among other things, making payments on the principal of, and interest on, loans and moneys advanced to, or indebtedness incurred by, the dissolved redevelopment agencies. Existing law requires the county auditor-controller, after deducting administrative costs, to allocate property tax revenues in each Redevelopment Property Tax Trust Fund in a specified manner.
This bill would state the intent of the Legislature that the use of residual revenues, derived from an additional property tax rate approved by the voters of a city, county, city and county, or special district to make payments in support of capital projects and programs related to the State Water Project, be consistent with the use of those revenues approved by the voters of the relevant jurisdiction.
(a)The Legislature finds and declares all of the following:
(1)The California Constitution limits property-based tax levies, with exceptions to these limits only when a local jurisdiction obtains the approval of its voting electorate to use additional property-based tax levies for specific purposes approved by the voting electorate, in accordance with applicable constitutional and statutory provisions.
(2)With the enactment of Chapter 5 of the 201112 First Extraordinary Session (Assembly Bill 26), the Legislature intended that, upon dissolution of redevelopment agencies in the State of California, property taxes that would have been allocated to redevelopment agencies are no longer deemed tax increment.
(3)It is the intent of the Legislature in enacting this act to do all of the following:
(A)If a redevelopment agency had previously pledged revenues derived from the imposition of a property tax rate, approved by the voters of a city, county, or city and county, or special district to make payments in support of the State Water Project and levied in addition to the property tax rate limited by subdivision (a) of Section 1 of Article XIII A of the California Constitution, to pay a portion of the debt service due on indebtedness incurred by the former redevelopment agency on an approved recognized obligation payment schedule, then the successor agency shall continue to pledge those revenues, in a commensurate rate going forward. For example, if revenues derived from a water project property tax rate approved by the voters of a city, county, city and county, or special district were pledged to pay up to 25 percent of the annual debt service for the indebtedness approved in a recognized obligation payment schedule, the successor agency shall continue to pay up to 25 percent of the annual debt service on the indebtedness until maturity. Any and all excess pledged revenues derived from the water project property tax rate that are not necessary to pay the debt service on the indebtedness shall be allocated and paid to the city, county, city and county, or special district whose voters approved the State Water Project-related property tax rate.
(B)Ensure that the use of revenues derived from the imposition of a property tax rate approved by the voters of a city, county, city and county, or special district to make payments in support of the State Water Project and levied in addition to the property tax rate limited by subdivision (a) of Section 1 of Article XIII A of the California Constitution, is consistent with the use approved by the voters of a city, county, city and county, or special district once revenues from such property tax rates are not needed to pay approved indebtedness of a former redevelopment agency.
(C)Implement the allocation and distribution of voter-approved, property-based tax revenues for the State Water Project under the redevelopment dissolution process in a manner that would have been consistent with the allocation and distribution of those revenues had redevelopment agencies not been dissolved, in accordance with applicable constitutional provisions.
(4)Further, it is the intent of the Legislature that this act not affect any property tax allocations that occurred prior to July 1, ____.
SEC. 2.Section 34183 of the Health and Safety Code is amended to read:34183.(a)Notwithstanding any other law, from February 1, 2012, to July 1, 2012, and for each fiscal year thereafter, the county auditor-controller shall, after deducting administrative costs allowed under Section 34182 and Section 95.3 of the Revenue and Taxation Code, allocate moneys in each Redevelopment Property Tax Trust Fund as follows:
(1)Subject to any prior deductions required by subdivision (b), first, the county auditor-controller shall remit from the Redevelopment Property Tax Trust Fund to each local agency and school entity an amount of property tax revenues in an amount equal to that which would have been received under Section 33401, 33492.140, 33607, 33607.5, 33607.7, or 33676, as those sections read on January 1, 2011, or pursuant to any passthrough agreement between a redevelopment agency and a taxing entity that was entered into prior to January 1, 1994, that would be in force during that fiscal year, had the redevelopment agency existed at that time. The amount of the payments made pursuant to this paragraph shall be calculated solely on the basis of passthrough payment obligations, existing prior to the effective date of this part and continuing as obligations of successor entities, shall occur no later than May 16, 2012, and no later than June 1, 2012, and each January 2 and June 1 thereafter. Notwithstanding subdivision (e) of Section 33670, that portion of the taxes in excess of the amount identified in subdivision (a) of Section 33670, which are attributable to a tax rate levied by a taxing entity for the purpose of producing revenues in an amount sufficient to make annual repayments of the principal of, and the interest on, any bonded indebtedness for the acquisition or improvement of real property shall be allocated to, and when collected shall be paid into, the fund of that taxing entity. The amount of passthrough payments computed pursuant to this section, including any passthrough agreements, shall be computed as though the requirement to set aside funds for the Low and Moderate Income Housing Fund was still in effect.
(2)Second, on June 1, 2012, and each January 2 and June 1 thereafter, to each successor agency for payments listed in its Recognized Obligation Payment Schedule for the six-month fiscal period beginning January 1, 2012, and July 1, 2012, and each January 2 and June 1 thereafter, in the following order of priority:
(A)Debt service payments scheduled to be made for tax allocation bonds.
(B)Payments scheduled to be made on revenue bonds, but only to the extent the revenues pledged for them are insufficient to make the payments and only if the agencys tax increment revenues were also pledged for the repayment of the bonds.
(C)Payments scheduled for other debts and obligations listed in the Recognized Obligation Payment Schedule that are required to be paid from former tax increment revenue.
(3)Third, on June 1, 2012, and each January 2 and June 1 thereafter, to each successor agency for the administrative cost allowance, as defined in Section 34171, for administrative costs set forth in an approved administrative budget for those payments required to be paid from former tax increment revenues.
(4)(A)Fourth, on January 2, 2016, and each January 2 and June 1 thereafter, to a city or county or special district that levies a property tax rate, approved by the voters of a city or county or special district to make payments in support of the State Water Project and levied in addition to the property tax rate limited by subdivision (a) of Section 1 of Article XIIIA of the California Constitution, an amount of property tax revenues equal to the amount of revenues derived from the imposition of that tax rate that were allocated to the Redevelopment Property Tax Trust Fund for that fiscal period.
(B)This paragraph shall not apply to the extent that revenues derived from the imposition of a property tax rate described in subparagraph (A) are not deposited into a Redevelopment Property Tax Trust Fund as provided by subdivision (f).
(4)Fourth,
(5)Fifth, on June 1, 2012, and each January 2 and June 1 thereafter, any moneys remaining in the Redevelopment Property Tax Trust Fund after the payments and transfers authorized by paragraphs (1) to (3) (4), inclusive, shall be distributed to local agencies and school entities in accordance with Section 34188.
(b)If the successor agency reports, no later than April 1, 2012, and May 1, 2012, and each December 1 and May 1 thereafter, to the county auditor-controller that the total amount available to the successor agency from the Redevelopment Property Tax Trust Fund allocation to that successor agencys Redevelopment Obligation Retirement Fund, from other funds transferred from each redevelopment agency, and from funds that have or will become available through asset sales and all redevelopment operations, are insufficient to fund the payments required by paragraphs (1) to (3), inclusive, of subdivision (a) in the next six-month fiscal period, the county auditor-controller shall notify the Controller and the Department of Finance no later than 10 days from the date of that notification. The county auditor-controller shall verify whether the successor agency will have sufficient funds from which to service debts according to the Recognized Obligation Payment Schedule and shall report the findings to the Controller. If the Controller concurs that there are insufficient funds to pay required debt service, the amount of the deficiency shall be deducted first from the amount remaining to be distributed to taxing entities pursuant to paragraph paragraphs (4) and (5) of subdivision (a), and if that amount is exhausted, from amounts available for distribution for administrative costs in paragraph (3) of subdivision (a). If an agency, pursuant to the provisions of Section 33492.15, 33492.72, 33607.5, 33671.5, 33681.15, or 33688 or as expressly provided in a passthrough agreement entered into pursuant to Section 33401, made passthrough payment obligations subordinate to debt service payments required for enforceable obligations, funds for servicing bond debt may be deducted from the amounts for passthrough payments under paragraph (1) of subdivision (a), as provided in those sections, but only to the extent that the amounts remaining to be distributed to taxing entities pursuant to paragraph paragraphs (4) and (5) of subdivision (a) and the amounts available for distribution for administrative costs in paragraph (3) of subdivision (a) have all been exhausted.
(c)The county treasurer may loan any funds from the county treasury to the Redevelopment Property Tax Trust Fund of the successor agency for the purpose of paying an item approved on the Recognized Obligation Payment Schedule at the request of the Department of Finance that are necessary to ensure prompt payments of redevelopment agency debts. An enforceable obligation is created for repayment of those loans.
(d)The Controller may recover the costs of audit and oversight required under this part from the Redevelopment Property Tax Trust Fund by presenting an invoice therefor to the county auditor-controller who shall set aside sufficient funds for and disburse the claimed amounts prior to making the next distributions to the taxing entities pursuant to Section 34188. Subject to the approval of the Director of Finance, the budget of the Controller may be augmented to reflect the reimbursement, pursuant to Section 28.00 of the Budget Act.
(e)Within 10 days of each distribution of property tax, the county auditor-controller shall provide a report to the department regarding the distribution for each successor agency that includes information on the total available for allocation, the passthrough amounts and how they were calculated, the amounts distributed to successor agencies, and the amounts distributed to taxing entities in a manner and form specified by the department. This reporting requirement shall also apply to distributions required under subdivision (b) of Section 34183.5.
(f)(1)A city or county that levies a property tax rate, approved by the voters of a city or county or special district to make payments in support of the State Water Project and levied in addition to the property tax rate limited by subdivision (a) of Section 1 of Article XIIIA of the California Constitution, may make a request to an oversight board to prohibit revenues derived from the imposition of that property tax rate from being deposited into a Redevelopment Property Tax Trust Fund.
(2)Based on substantial evidence that a former redevelopment agency made a pledge of revenues that specifically included revenues derived from the imposition of a property tax rate, approved by the voters of a city or county or special district to make payments in support of the State Water Project and levied in addition to the property tax rate limited by subdivision (a) of Section 1 of Article XIIIA of the California Constitution, an oversight board may deny a request made pursuant to paragraph (1) in an amount not to exceed the amount of revenues pledged by the former redevelopment agency.
(3)Notwithstanding any other law, for the 201516 fiscal year and each fiscal year thereafter, except to the extent an oversight board denies a request as provided by paragraph (2), any revenues derived from the imposition of a property tax rate, approved by the voters of a city or county or special district to make payments in support of the State Water Project and levied in addition to the property tax rate limited by subdivision (a) of Section 1 of Article XIIIA of the California Constitution, shall not be allocated to a Redevelopment Property Tax Trust Fund and shall instead be allocated to, and when collected shall be paid into, the fund of the city or county or special district whose voters approved the tax.
(4)Notwithstanding any other law, all allocations of revenues derived from the imposition of a property tax rate, approved by the voters of a city or county or special district to make payments in support of the State Water Project and levied in addition to the property tax rate limited by subdivision (a) of Section 1 of Article XIIIA of the California Constitution, made by any county auditor-controller prior to July 1, ____, shall be deemed correct and shall not be affected by this act. A city, county, county auditor-controller, successor agency, or affected taxing entity shall not be subject to any claim for money, damages, or reallocated revenues based on any allocation of such revenues prior to July 1, 2014.
SEC. 3.If the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code.
SECTION 1.Section 34170.1 is added to the Health and Safety Code, to read:34170.1.Any action by the department carrying out the departments obligations under this part and Part 1.8 (commencing with Section 34161) constitutes a department action for the preparation, development, or administration of the state budget pursuant to Section 11357 of the Government Code, and is exempt from Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code. This section applies retroactively to any action by the department described in this section that occurred on or after June 28, 2011.
SEC. 2.Section 34171 of the Health and Safety Code is amended to read:34171.The following terms shall have the following meanings:
(a)Administrative budget means the budget for administrative costs of the successor agencies as provided in Section 34177.
(b)(1)Administrative cost allowance means 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.
(2)The administrative cost allowance shall be 5 percent of the property tax allocated to the successor agency on the Recognized Obligation Payment Schedule covering the period January 1, 2012, through June 30, 2012. The administrative cost allowance shall be up to 3 percent of the property tax allocated to the Redevelopment Obligation Retirement Fund for each fiscal year thereafter ending on June 30, 2016. However, the administrative cost allowance shall not be less than two hundred fifty thousand dollars ($250,000) in any fiscal year, unless this amount is reduced by the oversight board or by agreement with the successor agency.
(3)Commencing July 1, 2016, and for each fiscal year thereafter, the administrative cost allowance shall be up to 3 percent of the actual property tax distributed to the successor agency by the county auditor-controller in the preceding fiscal year for payment of approved enforceable obligations, reduced by the successor agencys administrative cost allowance and loan repayments made to the city, county, or city and county that created the redevelopment agency that it succeeded pursuant to subdivision (b) of Section 34191.4 during the preceding fiscal year. However, the administrative cost allowance shall not be less than two hundred fifty thousand dollars ($250,000) in any fiscal year, unless this amount is reduced by the oversight board or by agreement between the successor agency and the department.
(4)Notwithstanding paragraph (3), commencing July 1, 2016, a successor agencys annual administrative costs shall not exceed 50 percent of the total Redevelopment Property Tax Trust Fund distributed to pay enforceable obligations in the preceding fiscal year. This limitation applies to administrative costs whether paid within the administrative cost allowance or not, but does not apply to administrative costs paid from bond proceeds or grant funds.
(5)The administrative cost allowance shall be approved by the oversight board and shall be the sole funding source for any legal expenses related to civil actions, including writ proceedings, contesting the validity of Part 1.8 or Part 1.85 (commencing with Section 34170) or challenging acts taken pursuant to these parts. Employee costs associated with work on specific project implementation activities, including, but not limited to, construction inspection, project management, or actual construction, shall be considered project-specific costs and shall not constitute administrative costs.
(c)Designated local authority shall mean a public entity formed pursuant to subdivision (d) of Section 34173.
(d)(1)Enforceable obligation means any of the following:
(A)Bonds, as defined by Section 33602 and bonds issued pursuant to Chapter 10.5 (commencing with Section 5850) of Division 6 of Title 1 of the Government Code, including the required debt service, reserve set-asides, and any other payments required under the indenture or similar documents governing the issuance of the outstanding bonds of the former redevelopment agency. A reserve may be held when required by the bond indenture or when the next property tax allocation will be insufficient to pay all obligations due under the provisions of the bond for the next payment due in the following half of the calendar year.
(B)Loans of moneys borrowed by the redevelopment agency for a lawful purpose, to the extent they are legally required to be repaid pursuant to a required repayment schedule or other mandatory loan terms.
(C)Payments required by the federal government, preexisting obligations to the state or obligations imposed by state law, other than passthrough payments that are made by the county auditor-controller pursuant to Section 34183, or legally enforceable payments required in connection with the agencies employees, including, but not limited to, pension payments, pension obligation debt service, unemployment payments, or other obligations conferred through a collective bargaining agreement. Costs incurred to fulfill collective bargaining agreements for layoffs or terminations of city employees who performed work directly on behalf of the former redevelopment agency shall be considered enforceable obligations payable from property tax funds. The obligations to employees specified in this subparagraph shall remain enforceable obligations payable from property tax funds for any employee to whom those obligations apply if that employee is transferred to the entity assuming the housing functions of the former redevelopment agency pursuant to Section 34176. The successor agency or designated local authority shall enter into an agreement with the housing entity to reimburse it for any costs of the employee obligations.
(D)Judgments or settlements entered by a competent court of law or binding arbitration decisions against the former redevelopment agency, other than passthrough payments that are made by the county auditor-controller pursuant to Section 34183. Along with the successor agency, the oversight board shall have the authority and standing to appeal any judgment or to set aside any settlement or arbitration decision.
(E)Any legally binding and enforceable agreement or contract that is not otherwise void as violating the debt limit or public policy. However, nothing in this act shall prohibit either the successor agency, with the approval or at the direction of the oversight board, or the oversight board itself from terminating any existing agreements or contracts and providing any necessary and required compensation or remediation for such termination. Titles of or headings used on or in a document shall not be relevant in determining the existence of an enforceable obligation.
(F)Contracts or agreements necessary for the administration or operation of the successor agency, in accordance with this part, including, but not limited to, agreements concerning litigation expenses related to assets or obligations, settlements and judgments, and the costs of maintaining assets prior to disposition, and agreements to purchase or rent office space, equipment and supplies, and pay-related expenses pursuant to Section 33127 and for carrying insurance pursuant to Section 33134. Any legal expenses related to civil actions, including writ proceedings, contesting the validity of Part 1.8 (commencing with Section 34161) or Part 1.85 (commencing with Section 34170) or challenging acts taken pursuant to these parts shall only be payable out of the administrative cost allowance.
(G)Amounts borrowed from, or payments owing to, the Low and Moderate Income Housing Fund of a redevelopment agency, which had been deferred as of the effective date of the act adding this part; provided, however, that the repayment schedule is approved by the oversight board. Repayments shall be transferred to the Low and Moderate Income Housing Asset Fund established pursuant to subdivision (d) of Section 34176 as a housing asset and shall be used in a manner consistent with the affordable housing requirements of the Community Redevelopment Law (Part 1 (commencing with Section 33000)). Enforceable obligations pursuant to this subparagraph include only amounts borrowed from, or payments owing to, the Low and Moderate Income Housing Fund of a redevelopment agency pursuant to subdivision (k) of Section 33334.2, subdivision (g) of Section 33334.6, subdivision (b) of Section 33681.7, subdivision (b) of Section 33681.9, subdivision (b) of Section 33681.12, subdivision (b) of Section 33685, subdivision (c) of Section 33690, or subdivision (c) of Section 33690.5, which had been deferred as of the effective date of the act adding this part and were approved by the department pursuant to paragraph (2) of subdivision (a) of section 34176. This definition applies retroactively to all enforceable obligations recognized under this subparagraph on or after June 28, 2011.
(H)Amounts derived from a property tax rate approved by the voters of a city, county, city and county, or special district to make payments in support of capital projects and programs related to the State Water Project, and levied in addition to the property tax rate limited by subdivision (a) of Section 1 of Article XIIIA of the California Constitution, consistent with the use approved by the voters of a city, county, city and county, or special district.
(2)For purposes of this part, 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. However, written agreements entered into (A) at the time of issuance, but in no event later than December 31, 2010, of indebtedness obligations, and (B) solely for the purpose of securing or repaying those indebtedness obligations may be deemed enforceable obligations for purposes of this part. Additionally, written agreements entered into (A) at the time of issuance, but in no event later than June 27, 2011, of indebtedness obligations for the refunding or refinancing of indebtedness obligations that existed prior to January 1, 2011, and (B) solely for the purpose of securing or repaying those indebtedness obligations may be deemed enforceable obligations for purposes of this part. Notwithstanding this paragraph, loan agreements entered into between the redevelopment agency and the city, county, or city and county that created it, within two years of the date of creation of the redevelopment agency, may be deemed to be enforceable obligations.
(3)Contracts or agreements between the former redevelopment agency and other public agencies, to perform services or provide funding for governmental or private services or capital projects outside of redevelopment project areas that do not provide benefit to the redevelopment project and thus were not properly authorized under Part 1 (commencing with Section 33000) shall be deemed void on the effective date of this part; provided, however, that such contracts or agreements for the provision of housing properly authorized under Part 1 (commencing with Section 33000) shall not be deemed void.
(e)Indebtedness obligations means bonds, notes, certificates of participation, or other evidence of indebtedness, issued or delivered by the redevelopment agency, or by a joint exercise of powers authority created by the redevelopment agency, to third-party investors or bondholders to finance or refinance redevelopment projects undertaken by the redevelopment agency in compliance with the Community Redevelopment Law (Part 1 (commencing with Section 33000)).
(f)Oversight board shall mean each entity established pursuant to Section 34179.
(g)Recognized obligation means an obligation listed in the Recognized Obligation Payment Schedule.
(h)Recognized Obligation Payment Schedule means the document setting forth the minimum payment amounts and due dates of payments required by enforceable obligations for each six-month fiscal period until June 30, 2016, as provided in subdivision (m) of Section 34177. On and after July 1, 2016, Recognized Obligation Payment Schedule means the document setting forth the minimum payment amounts and due dates of payments required by enforceable obligations for each fiscal year as provided in subdivision (o) of Section 34177.
(i)School entity means any entity defined as such in subdivision (f) of Section 95 of the Revenue and Taxation Code.
(j)Successor agency means the successor entity to the former redevelopment agency as described in Section 34173.
(k)Taxing entities means cities, counties, a city and county, special districts, and school entities, as defined in subdivision (f) of Section 95 of the Revenue and Taxation Code, that receive passthrough payments and distributions of property taxes pursuant to the provisions of this part.
(l)Property taxes include all property tax revenues, including those from unitary and supplemental and roll corrections applicable to tax increment.
(m)Department means the Department of Finance unless the context clearly refers to another state agency.
(n)Sponsoring entity means the city, county, or city and county, or other entity that authorized the creation of each redevelopment agency.
(o)Final judicial determination means a final judicial determination made by any state court that is not appealed, or by a court of appellate jurisdiction that is not further appealed, in an action by any party.
(p)From July 1, 2014, to July 1, 2018, inclusive, housing entity administrative cost allowance means an amount of up to 1 percent of the property tax allocated to the Redevelopment Obligation Retirement Fund on behalf of the successor agency for each applicable fiscal year, but not less than one hundred fifty thousand dollars ($150,000) per fiscal year.
(1)If a local housing authority assumed the housing functions of the former redevelopment agency pursuant to paragraph (2) or (3) of subdivision (b) of Section 34176, then the housing entity administrative cost allowance shall be listed by the successor agency on the Recognized Obligation Payment Schedule. Upon approval of the Recognized Obligation Payment Schedule by the oversight board and the department, the housing entity administrative cost allowance shall be remitted by the successor agency on each January 2 and July 1 to the local housing authority that assumed the housing functions of the former redevelopment agency pursuant to paragraph (2) or (3) of subdivision (b) of Section 34176.
(2)If there are insufficient moneys in the Redevelopment Obligations Retirement Fund in a given fiscal year to make the payment authorized by this subdivision, the unfunded amount may be listed on each subsequent Recognized Obligation Payment Schedule until it has been paid in full. In these cases the five-year time limit on the payments shall not apply.
SEC. 3.Section 34177 of the Health and Safety Code is amended to read:34177.Successor agencies are required to do all of the following:
(a)Continue to make payments due for enforceable obligations.
(1)On and after February 1, 2012, and until a Recognized Obligation Payment Schedule becomes operative, only payments required pursuant to an enforceable obligations payment schedule shall be made. The initial enforceable obligation payment schedule shall be the last schedule adopted by the redevelopment agency under Section 34169. However, payments associated with obligations excluded from the definition of enforceable obligations by paragraph (2) of subdivision (d) of Section 34171 shall be excluded from the enforceable obligations payment schedule and be removed from the last schedule adopted by the redevelopment agency under Section 34169 prior to the successor agency adopting it as its enforceable obligations payment schedule pursuant to this subdivision. The enforceable obligation payment schedule may be amended by the successor agency at any public meeting and shall be subject to the approval of the oversight board as soon as the board has sufficient members to form a quorum. In recognition of the fact that the timing of the California Supreme Courts ruling in the case California Redevelopment Association v. Matosantos (2011) 53 Cal.4th 231 delayed the preparation by successor agencies and the approval by oversight boards of the January 1, 2012, through June 30, 2012, Recognized Obligation Payment Schedule, a successor agency may amend the Enforceable Obligation Payment Schedule to authorize the continued payment of enforceable obligations until the time that the January 1, 2012, through June 30, 2012, Recognized Obligation Payment Schedule has been approved by the oversight board and by the department. The successor agency may utilize reasonable estimates and projections to support payment amounts for enforceable obligations if the successor agency submits appropriate supporting documentation of the basis for the estimate or projection to the Department of Finance and the auditor-controller.
(2)The department, the county auditor-controller, and the Controller shall each have the authority to require any documents associated with the enforceable obligations to be provided to them in a manner of their choosing. Any taxing entity, the department, and the Controller shall each have standing to file a judicial action to prevent a violation under this part and to obtain injunctive or other appropriate relief.
(3)Commencing on the date the Recognized Obligation Payment Schedule is valid pursuant to subdivision (l), only those payments listed in the Recognized Obligation Payment Schedule may be made by the successor agency from the funds specified in the Recognized Obligation Payment Schedule. In addition, after it becomes valid, the Recognized Obligation Payment Schedule shall supersede the Statement of Indebtedness, which shall no longer be prepared nor have any effect under the Community Redevelopment Law (Part 1 (commencing with Section 33000)).
(4)Nothing in the act adding this part is to be construed as preventing a successor agency, with the prior approval of the oversight board, as described in Section 34179, from making payments for enforceable obligations from sources other than those listed in the Recognized Obligation Payment Schedule.
(5)From February 1, 2012, to July 1, 2012, a successor agency shall have no authority and is hereby prohibited from accelerating payment or making any lump-sum payments that are intended to prepay loans unless such accelerated repayments were required prior to the effective date of this part.
(b)Maintain reserves in the amount required by indentures, trust indentures, or similar documents governing the issuance of outstanding redevelopment agency bonds.
(c)Perform obligations required pursuant to any enforceable obligation.
(d)Remit unencumbered balances of redevelopment agency funds to the county auditor-controller for distribution to the taxing entities, including, but not limited to, the unencumbered balance of the Low and Moderate Income Housing Fund of a former redevelopment agency. In making the distribution, the county auditor-controller shall utilize the same methodology for allocation and distribution of property tax revenues provided in Section 34188.
(e)Dispose of assets and properties of the former redevelopment agency as directed by the oversight board; provided, however, that the oversight board may instead direct the successor agency to transfer ownership of certain assets pursuant to subdivision (a) of Section 34181. The disposal is to be done expeditiously and in a manner aimed at maximizing value. Proceeds from asset sales and related funds that are no longer needed for approved development projects or to otherwise wind down the affairs of the agency, each as determined by the oversight board, shall be transferred to the county auditor-controller for distribution as property tax proceeds under Section 34188. The requirements of this subdivision shall not apply to a successor agency that has been issued a finding of completion by the department pursuant to Section 34179.7.
(f)Enforce all former redevelopment agency rights for the benefit of the taxing entities, including, but not limited to, continuing to collect loans, rents, and other revenues that were due to the redevelopment agency.
(g)Effectuate transfer of housing functions and assets to the appropriate entity designated pursuant to Section 34176.
(h)Expeditiously wind down the affairs of the redevelopment agency pursuant to the provisions of this part and in accordance with the direction of the oversight board.
(i)Continue to oversee development of properties until the contracted work has been completed or the contractual obligations of the former redevelopment agency can be transferred to other parties. Bond proceeds shall be used for the purposes for which bonds were sold unless the purposes can no longer be achieved, in which case, the proceeds may be used to defease the bonds.
(j)Prepare a proposed administrative budget and submit it to the oversight board for its approval. The proposed administrative budget shall include all of the following:
(1)Estimated amounts for successor agency administrative costs for the upcoming six-month fiscal period.
(2)Proposed sources of payment for the costs identified in paragraph (1).
(3)Proposals for arrangements for administrative and operations services provided by a city, county, city and county, or other entity.
(k)Provide administrative cost estimates, from its approved administrative budget that are to be paid from property tax revenues deposited in the Redevelopment Property Tax Trust Fund, to the county auditor-controller for each six-month fiscal period.
(l)(1)Before each fiscal period set forth in subdivision (m) or (o), as applicable, prepare a Recognized Obligation Payment Schedule in accordance with the requirements of this paragraph. For each recognized obligation, the Recognized Obligation Payment Schedule shall identify one or more of the following sources of payment:
(A)Low and Moderate Income Housing Fund.
(B)Bond proceeds.
(C)Reserve balances.
(D)Administrative cost allowance.
(E)The Redevelopment Property Tax Trust Fund, but only to the extent no other funding source is available or when payment from property tax revenues is required by an enforceable obligation or by the provisions of this part.
(F)Other revenue sources, including rents, concessions, asset sale proceeds, interest earnings, and any other revenues derived from the former redevelopment agency, as approved by the oversight board in accordance with this part.
(2)A Recognized Obligation Payment Schedule shall not be deemed valid unless all of the following conditions have been met:
(A)A Recognized Obligation Payment Schedule is prepared by the successor agency for the enforceable obligations of the former redevelopment agency. The initial schedule shall project the dates and amounts of scheduled payments for each enforceable obligation for the remainder of the time period during which the redevelopment agency would have been authorized to obligate property tax increment had the a redevelopment agency not been dissolved.
(B)The Recognized Obligation Payment Schedule is submitted to and duly approved by the oversight board. The successor agency shall submit a copy of the Recognized Obligation Payment Schedule to the county administrative officer, the county auditor-controller, and the department at the same time that the successor agency submits the Recognized Obligation Payment Schedule to the oversight board for approval.
(C)A copy of the approved Recognized Obligation Payment Schedule is submitted to the county auditor-controller, the Controllers office, and the Department of Finance, and is posted on the successor agencys Internet Web site.
(3)The Recognized Obligation Payment Schedule shall be forward looking to the next six months or one year pursuant to subdivision (m) or (o), as applicable. The first Recognized Obligation Payment Schedule shall be submitted to the Controllers office and the department by April 15, 2012, for the period of January 1, 2012, to June 30, 2012, inclusive. This Recognized Obligation Payment Schedule shall include all payments made by the former redevelopment agency between January 1, 2012, through January 31, 2012, and shall include all payments proposed to be made by the successor agency from February 1, 2012, through June 30, 2012. Former redevelopment agency enforceable obligation payments due, and reasonable or necessary administrative costs due or incurred, prior to January 1, 2012, shall be made from property tax revenues received in the spring of 2011 property tax distribution, and from other revenues and balances transferred to the successor agency.
(m)Until December 31, 2015, the Recognized Obligation Payment Schedule for the period of January 1, 2013, to June 30, 2013, shall be submitted by the successor agency, after approval by the oversight board, no later than September 1, 2012. Commencing with the Recognized Obligation Payment Schedule covering the period July 1, 2013, through December 31, 2013, successor agencies shall submit an oversight board-approved Recognized Obligation Payment Schedule to the department and to the county auditor-controller no fewer than 90 days before the date of property tax distribution. The department shall make its determination of the enforceable obligations and the amounts and funding sources of the enforceable obligations no later than 45 days after the Recognized Obligation Payment Schedule is submitted. Within five business days of the departments determination, a successor agency may request additional review by the department and an opportunity to meet and confer on disputed items, except for those items which are the subject of litigation disputing the departments previous or related determination. The meet and confer period may vary; an untimely submittal of a Recognized Obligation Payment Schedule may result in a meet and confer period of less than 30 days. The department shall notify the successor agency and the county auditor-controllers as to the outcome of its review at least 15 days before the date of property tax distribution.
(1)The successor agency shall submit a copy of the Recognized Obligation Payment Schedule to the department electronically, and the successor agency shall complete the Recognized Obligation Payment Schedule in the manner provided for by the department. A successor agency shall be in noncompliance with this paragraph if it only submits to the department an electronic message or a letter stating that the oversight board has approved a Recognized Obligation Payment Schedule.
(2)If a successor agency does not submit a Recognized Obligation Payment Schedule by the deadlines provided in this subdivision, the city, county, or city and county that created the redevelopment agency, if it is acting as the successor agency, shall be subject to a civil penalty equal to ten thousand dollars ($10,000) per day for every day the schedule is not submitted to the department. The civil penalty shall be paid to the county auditor-controller for allocation to the taxing entities under Section 34183. If a successor agency fails to submit a Recognized Obligation Payment Schedule by the deadline, any creditor of the successor agency or the Department of Finance or any affected taxing entity shall have standing to and may request a writ of mandate to require the successor agency to immediately perform this duty. Those actions may be filed only in the County of Sacramento and shall have priority over other civil matters. Additionally, if an agency does not submit a Recognized Obligation Payment Schedule within 10 days of the deadline, the maximum administrative cost allowance for that period shall be reduced by 25 percent.
(3)If a successor agency fails to submit to the department an oversight board-approved Recognized Obligation Payment Schedule that complies with all requirements of this subdivision within five business days of the date upon which the Recognized Obligation Payment Schedule is to be used to determine the amount of property tax allocations, the department may determine if any amount should be withheld by the county auditor-controller for payments for enforceable obligations from distribution to taxing entities, pending approval of a Recognized Obligation Payment Schedule. The county auditor-controller shall distribute the portion of any of the sums withheld pursuant to this paragraph to the affected taxing entities in accordance with paragraph (4) of subdivision (a) of Section 34183 upon notice by the department that a portion of the withheld balances are in excess of the amount of enforceable obligations. The county auditor-controller shall distribute withheld funds to the successor agency only in accordance with a Recognized Obligation Payment Schedule approved by the department. County auditor-controllers shall lack the authority to withhold any other amounts from the allocations provided for under Section 34183 or 34188 unless required by a court order.
(4)(A)The Recognized Obligation Payment Schedule payments required pursuant to this subdivision may be scheduled beyond the existing Recognized Obligation Payment Schedule cycle upon a showing that a lender requires cash on hand beyond the Recognized Obligation Payment Schedule cycle.
(B)When a payment is shown to be due during the Recognized Obligation Payment Schedule period, but an invoice or other billing document has not yet been received, the successor agency may utilize reasonable estimates and projections to support payment amounts for enforceable obligations if the successor agency submits appropriate supporting documentation of the basis for the estimate or projection to the department and the auditor-controller.
(C)A Recognized Obligation Payment Schedule may also include appropriation of moneys from bonds subject to passage during the Recognized Obligation Payment Schedule cycle when an enforceable obligation requires the agency to issue the bonds and use the proceeds to pay for project expenditures.
(n)Cause a postaudit of the financial transactions and records of the successor agency to be made at least annually by a certified public accountant.
(o)On and after January 1, 2016, commencing with the Recognized Obligation Payment Schedule covering the period from July 1, 2016, to June 30, 2017, inclusive, and for each July 1 to June 30, inclusive, thereafter, a successor agency shall submit an oversight board-approved Recognized Obligation Payment Schedule to the department and to the county auditor-controller no later than February 1, 2016, and each February 1 thereafter. The department shall make its determination of the enforceable obligations and the amounts and funding sources of the enforceable obligations no later than April 15, 2016, and each April 15 thereafter. Within five business days of the departments determination, a successor agency may request additional review by the department and an opportunity to meet and confer on disputed items, except for those items which are the subject of litigation disputing the departments previous or related determination. An untimely submittal of a Recognized Obligation Payment Schedule may result in a meet and confer period of less than 30 days. The department shall notify the successor agency and the county auditor-controller as to the outcome of its review at least 15 days before the date of the first property tax distribution for that period.
(1)The successor agency shall submit a copy of the Recognized Obligation Payment Schedule to the department in the manner provided for by the department.
(2)If a successor agency does not submit a Recognized Obligation Payment Schedule by the deadlines provided in this subdivision, the city, county, or city and county that created the redevelopment agency, if acting as the successor agency, shall be subject to a civil penalty equal to ten thousand dollars ($10,000) per day for every day the schedule is not submitted to the department. The civil penalty shall be paid to the county auditor-controller for allocation to the taxing entities under Section 34183. If a successor agency fails to submit a Recognized Obligation Payment Schedule by the deadline, any creditor of the successor agency or the department or any affected taxing entity shall have standing to, and may request a writ of mandate to, require the successor agency to immediately perform this duty. Those actions may be filed only in the County of Sacramento and shall have priority over other civil matters. Additionally, if an agency does not submit a Recognized Obligation Payment Schedule within 10 days of the deadline, the maximum administrative cost for that period shall be reduced by 25 percent.
(3)If a successor agency fails to submit to the department an oversight board-approved Recognized Obligation Payment Schedule that complies with all requirements of this subdivision within five business days of the date upon which the Recognized Obligation Payment Schedule is to be used to determine the amount of property tax allocations, the department may determine if any amount should be withheld by the county auditor-controller for payments for enforceable obligations from distribution to taxing entities, pending approval of a Recognized Obligation Payment Schedule. The county auditor-controller shall distribute the portion of any of the sums withheld pursuant to this paragraph to the affected taxing entities in accordance with paragraph (4) of subdivision (a) of Section 34183 upon notice by the department that a portion of the withheld balances are in excess of the amount of enforceable obligations. The county auditor-controller shall distribute withheld funds to the successor agency only in accordance with a Recognized Obligation Payment Schedule approved by the department. County auditor-controllers do not have the authority to withhold any other amounts from the allocations provided for under Section 34183 or 34188 except as required by a court order.
(4)(A) The Recognized Obligation Payment Schedule payments required pursuant to this subdivision may be scheduled beyond the existing Recognized Obligation Payment Schedule cycle upon a showing that a lender requires cash on hand beyond the Recognized Obligation Payment Schedule cycle.
(B)When a payment is shown to be due during the Recognized Obligation Payment Schedule period, but an invoice or other billing document has not yet been received, the successor agency may utilize reasonable estimates and projections to support payment amounts for enforceable obligations if the successor agency submits appropriate supporting documentation of the basis for the estimate or projection to the department and the county auditor-controller.
(C)A Recognized Obligation Payment Schedule may also include a request to use proceeds from bonds expected to be issued during the Recognized Obligation Payment Schedule cycle when an enforceable obligation requires the agency to issue the bonds and use the proceeds to pay for project expenditures.
(5)Once per Recognized Obligation Payment Schedule period, and no later than October 1, a successor agency may submit one amendment to the Recognized Obligation Payment Schedule approved by the department pursuant to this subdivision, if the oversight board makes a finding that a revision is necessary for the payment of approved enforceable obligations during the second one-half of the Recognized Obligation Payment Schedule period, which shall be defined as January 1 to June 30, inclusive. A successor agency may only amend the amount requested for payment of approved enforceable obligations. The revised Recognized Obligation Payment Schedule shall be approved by the oversight board and submitted to the department by electronic means in a manner of the departments choosing. The department shall notify the successor agency and the county auditor-controller as to the outcome of the departments review at least 15 days before the date of the property tax distribution.
SEC. 4.Section 34191.6 is added to the Health and Safety Code, to read:34191.6.(a)Beginning August 1, 2015, successor agencies may submit a Last and Final Recognized Obligation Payment Schedule for approval by the oversight board and the department if all of the following conditions are met:
(1)The remaining debt of a successor agency is limited to administrative costs and payments pursuant to enforceable obligations with defined payment schedules including, but not limited to, debt service, loan agreements, and contracts.
(2)All remaining obligations have been previously listed on a Recognized Obligation Payment Schedule and approved for payment by the department pursuant to subdivision (m) or (o) of Section 34177.
(3)The successor agency is not a party to outstanding or unresolved litigation.
(b)A successor agency that meets the conditions in subdivision (a) may submit a Last and Final Recognized Obligation Payment Schedule to its oversight board for approval at any time. The successor agency may then submit the oversight board-approved Last and Final Recognized Obligation Payment Schedule to the department and only in a manner provided by the department. The Last and Final Recognized Obligation Payment Schedule shall not be effective until reviewed and approved by the department as provided for in subdivision (c). The successor agency shall also submit a copy of the oversight board-approved Last and Final Recognized Obligation Payment Schedule to the county administrative officer, the county auditor-controller, and post it to the successor agencys Internet Web site at the same time that the successor agency submits the Last and Final Recognized Obligation Payment Schedule to the department.
(1)The Last and Final Recognized Obligation Payment Schedule shall list the remaining enforceable obligations of the successor agency in the following order:
(A)Enforceable obligations to be funded from the Redevelopment Property Tax Trust Fund.
(B)Enforceable obligations to be funded from bond proceeds or enforceable obligations required to be funded from other legally or contractually dedicated or restricted funding sources.
(C)Loans or deferrals authorized for repayment pursuant to subparagraph (G) of paragraph (1) of subdivision (d) of Section 34171 or Section 34191.4.
(2)The Last and Final Recognized Obligation Payment Schedule shall include the total outstanding obligation and a schedule of remaining payments for each enforceable obligation listed pursuant to subparagraphs (A) and (B) of paragraph (1), and the total outstanding obligation and interest rate, not to exceed 2 percent, for loans or deferrals listed pursuant to subparagraph (C) of paragraph (1).
(c)The department shall have 100 days to review the Last and Final Recognized Obligation Payment Schedule submitted pursuant to subdivision (b). The department may make any amendments or changes to the Last and Final Recognized Obligation Payment Schedule, provided the amendments or changes are agreed to by the successor agency in writing. If the successor agency and the department cannot come to an agreement on the proposed amendments or changes, the department shall issue a letter denying the Last and Final Recognized Obligation Payment Schedule. All Last and Final Recognized Obligation Payment Schedules approved by the Department shall become effective on the first day of the subsequent Redevelopment Property Tax Trust Fund distribution period.
(1)Upon approval by the department, the Last and Final Recognized Obligation Payment Schedule shall establish the maximum amount of Redevelopment Property Tax Trust Funds to be distributed to the successor agency for each remaining fiscal year until all obligations have been fully paid.
(2)Successor agencies may submit no more than two requests to the department to amend the approved Last and Final Recognized Obligation Payment Schedule. Requests shall first be approved by the oversight board and then submitted to the department for review. A request shall not be effective until reviewed and approved by the department. The request shall be provided to the department by electronic means and in a manner of the departments choosing. The department shall have 100 days from the date received to approve or deny the successor agencys request.
(3)Any revenues, interest, and earnings of the successor agency not authorized for use pursuant to the approved Last and Final Recognized Obligation Payment Schedule shall be remitted to the county auditor-controller for distribution to the affected taxing entities. Notwithstanding Sections 34191.3 and 34191.5, proceeds from the disposition of real property subsequent to the approval of the Last and Final Recognized Obligation Payment Schedule that are not necessary for the payment of an enforceable obligation shall be remitted to the county auditor-controller for distribution to the affected taxing entities.
(4)A successor agency shall not expend more than the amount approved for each enforceable obligation listed and approved on the Last and Final Recognized Obligation Payment Schedule.
(5)If a successor agency receives insufficient funds to pay for the enforceable obligations approved in the Last and Final Recognized Obligation Payment Schedule in any given period, the city, county, or city and county that created the redevelopment agency may loan or grant funds to a successor agency for that period at the successor agencys request for the sole purpose of paying for approved items on the Last and Final Recognized Obligation Payment Schedule that would otherwise go unpaid. Additionally, at the request of the department, the county treasurer may loan any funds from the county treasury to the Redevelopment Property Tax Trust Fund of the successor agency for the purpose of paying an item approved on the Last and Final Recognized Obligation Payment Schedule in order to ensure prompt payments of successor agency debts. A loan made under this section shall be repaid from the source of funds approved for payment of the underlying enforceable obligation in the Last and Final Recognized Obligation Payment Schedule once sufficient funds become available from that source.
(6)Notwithstanding paragraph (6) of subdivision (e) of Section 34176 and subparagraph (A) of paragraph (2) of subdivision (b) of Section 34191.4, commencing on the date the Last and Final Recognized Obligation Payment Schedule becomes effective:
(A)Loan or deferrals authorized for repayment pursuant to subparagraph (G) of paragraph (1) of subdivision (d) of Section 34171 or Section 34191.4 and listed and approved on the Last and Final Recognized Obligation Payment Schedule, shall be recalculated to accrue annual simple interest not to exceed 2 percent.
(B)The maximum repayment amount of the total principal and interest on loans and deferrals authorized for repayment pursuant to subparagraph (G) of paragraph (1) of subdivision (d) of Section 34171 or Section 34191.4 and listed and approved in the Last and Final Recognized Obligation Payment Schedule shall be 15 percent of the moneys remaining in the Redevelopment Property Tax Trust Fund after the allocation of moneys in each six-month period pursuant to Section 34183 prior to the distributions under paragraph (4) of subdivision (a) of Section 34183.
(7)Commencing on the effective date of the approved Last and Final Recognized Obligation Payment Schedule, the successor agency shall not prepare or transmit Recognized Obligation Payment Schedules pursuant to Section 34177.
(8)Commencing on the effective date of the approved Last and Final Recognized Obligation Payment Schedule, oversight board resolutions shall not be submitted to the department pursuant to subdivision (h) of Section 34179. This paragraph shall not apply to oversight board resolutions necessary for refunding bonds pursuant to Section 34177.5, long-range property management plans pursuant to Section 34191.5, amendments to the Last and Final Recognized Obligation Payment Schedule under paragraph (2) of subdivision (c), and the final oversight board resolutions pursuant to Section 34187.
(d)The county auditor-controller shall do the following:
(1)Review the Last and Final Recognized Obligation Payment Schedule and provide any objection to the inclusion of any items or amounts to the department.
(2)After the Last and Final Recognized Obligation Payment Schedule is approved by the department, the county auditor-controller shall continue to allocate moneys in the Redevelopment Property Tax Trust Fund pursuant to Section 34183. However, the allocation from the Redevelopment Property Tax Trust Fund in each fiscal period, after deducting auditor-controller administrative costs, shall be according to the following order of priority:
(A)Allocations pursuant to paragraph (1) of subdivision (a) of Section 34183.
(B)Debt service payments scheduled to be made for tax allocation bonds that are listed and approved in the Last and Final Recognized Obligation Payment Schedule.
(C)Payments scheduled to be made on revenue bonds that are listed and approved in the Last and Final Recognized Obligation Payment Schedule, but only to the extent the revenues pledged for them are insufficient to make the payments and only if the agencys tax increment revenues were also pledged for the repayment of bonds.
(D)Payments scheduled for debts and obligations listed and approved in the Last and Final Recognized Obligation Payment Schedule to be paid from the Redevelopment Property Tax Trust Fund pursuant to subparagraph (A) of paragraph (1) of subdivision (b) and subdivision (c).
(E)Payments listed and approved pursuant to subparagraph (A) of paragraph (1) of subdivision (b) and subdivision (c) that were authorized but unfunded in prior periods.
(F)Repayment in the amount specified in paragraph (6) of subdivision (c) of loans and deferrals listed and approved on the Last and Final Recognized Obligation Payment Schedule pursuant to subparagraph (C) of paragraph (1) of subdivision (b) and subdivision (c).
(G)Any moneys remaining in the Redevelopment Property Tax Trust Fund after the payments and transfers authorized by subparagraphs (A) to (F), inclusive, shall be distributed to taxing entities in accordance with Section 34188.
(3)If the successor agency reports to the county auditor-controller that the total available amounts in the Redevelopment Property Tax Trust Fund will be insufficient to fund their current or future fiscal year obligations, and if the county auditor-controller concurs that there are insufficient funds to pay the required obligations, the county auditor-controller may distribute funds pursuant to subdivision (b) of Section 34183.
(4)The county auditor-controller shall no longer distribute property tax to the Redevelopment Property Tax Trust Fund once the aggregate amount of property tax allocated to the successor agency equals the total outstanding obligation approved in the Last and Final Recognized Obligation Payment Schedule.
(e)Successor agencies with a Last and Final Recognized Payment Schedule approved by the Department of Finance may amend or modify existing contracts, agreements, or other arrangements identified on the Last and Final Recognized Obligation Payment Schedule which the Department of Finance has already determined to be enforceable obligations, provided:
(1)The outstanding payments owing from the successor agency are not accelerated or increased in any way.
(2)Any amendment to extend terms shall not include an extension beyond the last scheduled payment for the enforceable obligations listed and approved on the Last and Final Recognized Obligation Payment Schedule.
(3)This subdivision shall not be construed as authorizing successor agencies to create new or additional enforceable obligations or otherwise increase, directly or indirectly, the amount of Redevelopment Property Tax Trust Funds allocated to the successor agency by the county auditor-controller.
SEC. 5.If the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code.
Any action by the department carrying out the departments obligations under this part and Part 1.8 (commencing with Section 34161) constitutes a department action for the preparation, development, or administration of the state budget pursuant to Section 11357 of the Government Code, and is exempt from Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code. This section applies retroactively to any action by the department described in this section that occurred on or after June 28, 2011.
SEC. 2.Section 34171 of the Health and Safety Code is amended to read:34171.The following terms shall have the following meanings:
(a)Administrative budget means the budget for administrative costs of the successor agencies as provided in Section 34177.
(b)(1)Administrative cost allowance means an amount that, subject to the approval of the oversight board, is payable from property tax revenues of up to 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.
(2)The administrative cost allowance shall be 5 percent of the property tax allocated to the successor agency on the Recognized Obligation Payment Schedule covering the period January 1, 2012, through June 30, 2012, and 2012. The administrative cost allowance shall be up to 3 percent of the property tax allocated to the Redevelopment Obligation Retirement Fund money that is allocated to the successor agency for each fiscal year thereafter; provided, however, that the amount thereafter ending on June 30, 2016. However, the administrative cost allowance shall not be less than two hundred fifty thousand dollars ($250,000), ($250,000) in any fiscal year, unless this amount is reduced by the oversight board reduces this amount, for any fiscal year or such lesser amount as agreed to by or by agreement with the successor agency. However, the allowance amount shall exclude, and shall not apply to, any administrative costs that can be paid from bond proceeds or from sources other than property tax. Administrative cost allowances shall exclude any litigation expenses related to assets or obligations, settlements and judgments, and the costs of maintaining assets prior to disposition. Employee
(3)Commencing July 1, 2016, and for each fiscal year thereafter, the administrative cost allowance shall be up to 3 percent of the actual property tax distributed to the successor agency by the county auditor-controller in the preceding fiscal year for payment of approved enforceable obligations, reduced by the successor agencys administrative cost allowance and loan repayments made to the city, county, or city and county that created the redevelopment agency that it succeeded pursuant to subdivision (b) of Section 34191.4 during the preceding fiscal year. However, the administrative cost allowance shall not be less than two hundred fifty thousand dollars ($250,000) in any fiscal year, unless this amount is reduced by the oversight board or by agreement between the successor agency and the department.
(4)Notwithstanding paragraph (3), commencing July 1, 2016, a successor agencys annual administrative costs shall not exceed 50 percent of the total Redevelopment Property Tax Trust Fund distributed to pay enforceable obligations in the preceding fiscal year. This limitation applies to administrative costs whether paid within the administrative cost allowance or not, but does not apply to administrative costs paid from bond proceeds or grant funds.
(5)The administrative cost allowance shall be approved by the oversight board and shall be the sole funding source for any legal expenses related to civil actions, including writ proceedings, contesting the validity of Part 1.8 or Part 1.85 (commencing with Section 34170) or challenging acts taken pursuant to these parts. Employee costs associated with work on specific project implementation activities, including, but not limited to, construction inspection, project management, or actual construction, shall be considered project-specific costs and shall not constitute administrative costs.
(c)Designated local authority shall mean a public entity formed pursuant to subdivision (d) of Section 34173.
(d)(1)Enforceable obligation means any of the following:
(A)Bonds, as defined by Section 33602 and bonds issued pursuant to Chapter 10.5 (commencing with Section 5850) of Division 6 of Title 1 of the Government Code, including the required debt service, reserve set-asides, and any other payments required under the indenture or similar documents governing the issuance of the outstanding bonds of the former redevelopment agency. A reserve may be held when required by the bond indenture or when the next property tax allocation will be insufficient to pay all obligations due under the provisions of the bond for the next payment due in the following half of the calendar year.
(B)Loans of moneys borrowed by the redevelopment agency for a lawful purpose, to the extent they are legally required to be repaid pursuant to a required repayment schedule or other mandatory loan terms.
(C)Payments required by the federal government, preexisting obligations to the state or obligations imposed by state law, other than passthrough payments that are made by the county auditor-controller pursuant to Section 34183, or legally enforceable payments required in connection with the agencies employees, including, but not limited to, pension payments, pension obligation debt service, unemployment payments, or other obligations conferred through a collective bargaining agreement. Costs incurred to fulfill collective bargaining agreements for layoffs or terminations of city employees who performed work directly on behalf of the former redevelopment agency shall be considered enforceable obligations payable from property tax funds. The obligations to employees specified in this subparagraph shall remain enforceable obligations payable from property tax funds for any employee to whom those obligations apply if that employee is transferred to the entity assuming the housing functions of the former redevelopment agency pursuant to Section 34176. The successor agency or designated local authority shall enter into an agreement with the housing entity to reimburse it for any costs of the employee obligations.
(D)Judgments or settlements entered by a competent court of law or binding arbitration decisions against the former redevelopment agency, other than passthrough payments that are made by the county auditor-controller pursuant to Section 34183. Along with the successor agency, the oversight board shall have the authority and standing to appeal any judgment or to set aside any settlement or arbitration decision.
(E)Any legally binding and enforceable agreement or contract that is not otherwise void as violating the debt limit or public policy. However, nothing in this act shall prohibit either the successor agency, with the approval or at the direction of the oversight board, or the oversight board itself from terminating any existing agreements or contracts and providing any necessary and required compensation or remediation for such termination. Titles of or headings used on or in a document shall not be relevant in determining the existence of an enforceable obligation.
(F)Contracts or agreements necessary for the administration or operation of the successor agency, in accordance with this part, including, but not limited to, agreements concerning litigation expenses related to assets or obligations, settlements and judgments, and the costs of maintaining assets prior to disposition, and agreements to purchase or rent office space, equipment and supplies, and pay-related expenses pursuant to Section 33127 and for carrying insurance pursuant to Section 33134. Any legal expenses related to civil actions, including writ proceedings, contesting the validity of Part 1.8 (commencing with Section 34161) or Part 1.85 (commencing with Section 34170) or challenging acts taken pursuant to these parts shall only be payable out of the administrative cost allowance.
(G)Amounts borrowed from, or payments owing to, the Low and Moderate Income Housing Fund of a redevelopment agency, which had been deferred as of the effective date of the act adding this part; provided, however, that the repayment schedule is approved by the oversight board. Repayments shall be transferred to the Low and Moderate Income Housing Asset Fund established pursuant to subdivision (d) of Section 34176 as a housing asset and shall be used in a manner consistent with the affordable housing requirements of the Community Redevelopment Law (Part 1 (commencing with Section 33000)). Enforceable obligations pursuant to this subparagraph include only amounts borrowed from, or payments owing to, the Low and Moderate Income Housing Fund of a redevelopment agency pursuant to subdivision (k) of Section 33334.2, subdivision (g) of Section 33334.6, subdivision (b) of Section 33681.7, subdivision (b) of Section 33681.9, subdivision (b) of Section 33681.12, subdivision (b) of Section 33685, subdivision (c) of Section 33690, or subdivision (c) of Section 33690.5, which had been deferred as of the effective date of the act adding this part and were approved by the department pursuant to paragraph (2) of subdivision (a) of section 34176. This definition applies retroactively to all enforceable obligations recognized under this subparagraph on or after June 28, 2011.
(H)Amounts derived from a property tax rate approved by the voters of a city, county, city and county, or special district to make payments in support of capital projects and programs related to the State Water Project, and levied in addition to the property tax rate limited by subdivision (a) of Section 1 of Article XIIIA of the California Constitution, consistent with the use approved by the voters of a city, county, city and county, or special district.
(2)For purposes of this part, 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. However, written agreements entered into (A) at the time of issuance, but in no event later than December 31, 2010, of indebtedness obligations, and (B) solely for the purpose of securing or repaying those indebtedness obligations may be deemed enforceable obligations for purposes of this part. Additionally, written agreements entered into (A) at the time of issuance, but in no event later than June 27, 2011, of indebtedness obligations for the refunding or refinancing of indebtedness obligations that existed prior to January 1, 2011, and (B) solely for the purpose of securing or repaying those indebtedness obligations may be deemed enforceable obligations for purposes of this part. Notwithstanding this paragraph, loan agreements entered into between the redevelopment agency and the city, county, or city and county that created it, within two years of the date of creation of the redevelopment agency, may be deemed to be enforceable obligations.
(3)Contracts or agreements between the former redevelopment agency and other public agencies, to perform services or provide funding for governmental or private services or capital projects outside of redevelopment project areas that do not provide benefit to the redevelopment project and thus were not properly authorized under Part 1 (commencing with Section 33000) shall be deemed void on the effective date of this part; provided, however, that such contracts or agreements for the provision of housing properly authorized under Part 1 (commencing with Section 33000) shall not be deemed void.
(e)Indebtedness obligations means bonds, notes, certificates of participation, or other evidence of indebtedness, issued or delivered by the redevelopment agency, or by a joint exercise of powers authority created by the redevelopment agency, to third-party investors or bondholders to finance or refinance redevelopment projects undertaken by the redevelopment agency in compliance with the Community Redevelopment Law (Part 1 (commencing with Section 33000)).
(f)Oversight board shall mean each entity established pursuant to Section 34179.
(g)Recognized obligation means an obligation listed in the Recognized Obligation Payment Schedule.
(h)Recognized Obligation Payment Schedule means the document setting forth the minimum payment amounts and due dates of payments required by enforceable obligations for each six-month fiscal period until June 30, 2016, as provided in subdivision (m) of Section 34177. On and after July 1, 2016, Recognized Obligation Payment Schedule means the document setting forth the minimum payment amounts and due dates of payments required by enforceable obligations for each fiscal year as provided in subdivision (o) of Section 34177.
(i)School entity means any entity defined as such in subdivision (f) of Section 95 of the Revenue and Taxation Code.
(j)Successor agency means the successor entity to the former redevelopment agency as described in Section 34173.
(k)Taxing entities means cities, counties, a city and county, special districts, and school entities, as defined in subdivision (f) of Section 95 of the Revenue and Taxation Code, that receive passthrough payments and distributions of property taxes pursuant to the provisions of this part.
(l)Property taxes include all property tax revenues, including those from unitary and supplemental and roll corrections applicable to tax increment.
(m)Department means the Department of Finance unless the context clearly refers to another state agency.
(n)Sponsoring entity means the city, county, or city and county, or other entity that authorized the creation of each redevelopment agency.
(o)Final judicial determination means a final judicial determination made by any state court that is not appealed, or by a court of appellate jurisdiction that is not further appealed, in an action by any party.
(p)From July 1, 2014, to July 1, 2018, inclusive, housing entity administrative cost allowance means an amount of up to 1 percent of the property tax allocated to the Redevelopment Obligation Retirement Fund on behalf of the successor agency for each applicable fiscal year, but not less than one hundred fifty thousand dollars ($150,000) per fiscal year.
(1)If a local housing authority assumed the housing functions of the former redevelopment agency pursuant to paragraph (2) or (3) of subdivision (b) of Section 34176, then the housing entity administrative cost allowance shall be listed by the successor agency on the Recognized Obligation Payment Schedule. Upon approval of the Recognized Obligation Payment Schedule by the oversight board and the department, the housing entity administrative cost allowance shall be remitted by the successor agency on each January 2 and July 1 to the local housing authority that assumed the housing functions of the former redevelopment agency pursuant to paragraph (2) or (3) of subdivision (b) of Section 34176.
(2)If there are insufficient moneys in the Redevelopment Obligations Retirement Fund in a given fiscal year to make the payment authorized by this subdivision, the unfunded amount may be listed on each subsequent Recognized Obligation Payment Schedule until it has been paid in full. In these cases the five-year time limit on the payments shall not apply.
SEC. 3.Section 34177 of the Health and Safety Code is amended to read:34177.Successor agencies are required to do all of the following:
(a)Continue to make payments due for enforceable obligations.
(1)On and after February 1, 2012, and until a Recognized Obligation Payment Schedule becomes operative, only payments required pursuant to an enforceable obligations payment schedule shall be made. The initial enforceable obligation payment schedule shall be the last schedule adopted by the redevelopment agency under Section 34169. However, payments associated with obligations excluded from the definition of enforceable obligations by paragraph (2) of subdivision (d) of Section 34171 shall be excluded from the enforceable obligations payment schedule and be removed from the last schedule adopted by the redevelopment agency under Section 34169 prior to the successor agency adopting it as its enforceable obligations payment schedule pursuant to this subdivision. The enforceable obligation payment schedule may be amended by the successor agency at any public meeting and shall be subject to the approval of the oversight board as soon as the board has sufficient members to form a quorum. In recognition of the fact that the timing of the California Supreme Courts ruling in the case California Redevelopment Association v. Matosantos (2011) 53 Cal.4th 231 delayed the preparation by successor agencies and the approval by oversight boards of the January 1, 2012, through June 30, 2012, Recognized Obligation Payment Schedule, a successor agency may amend the Enforceable Obligation Payment Schedule to authorize the continued payment of enforceable obligations until the time that the January 1, 2012, through June 30, 2012, Recognized Obligation Payment Schedule has been approved by the oversight board and by the Department of Finance. department. The successor agency may utilize reasonable estimates and projections to support payment amounts for enforceable obligations if the successor agency submits appropriate supporting documentation of the basis for the estimate or projection to the Department of Finance and the auditor-controller.
(2)The Department of Finance department, the county auditor-controller, and the Controller shall each have the authority to require any documents associated with the enforceable obligations to be provided to them in a manner of their choosing. Any taxing entity, the department, and the Controller shall each have standing to file a judicial action to prevent a violation under this part and to obtain injunctive or other appropriate relief.
(3)Commencing on the date the Recognized Obligation Payment Schedule is valid pursuant to subdivision (l), only those payments listed in the Recognized Obligation Payment Schedule may be made by the successor agency from the funds specified in the Recognized Obligation Payment Schedule. In addition, after it becomes valid, the Recognized Obligation Payment Schedule shall supersede the Statement of Indebtedness, which shall no longer be prepared nor have any effect under the Community Redevelopment Law (Part 1 (commencing with Section 33000)).
(4)Nothing in the act adding this part is to be construed as preventing a successor agency, with the prior approval of the oversight board, as described in Section 34179, from making payments for enforceable obligations from sources other than those listed in the Recognized Obligation Payment Schedule.
(5)From February 1, 2012, to July 1, 2012, a successor agency shall have no authority and is hereby prohibited from accelerating payment or making any lump-sum payments that are intended to prepay loans unless such accelerated repayments were required prior to the effective date of this part.
(b)Maintain reserves in the amount required by indentures, trust indentures, or similar documents governing the issuance of outstanding redevelopment agency bonds.
(c)Perform obligations required pursuant to any enforceable obligation.
(d)Remit unencumbered balances of redevelopment agency funds to the county auditor-controller for distribution to the taxing entities, including, but not limited to, the unencumbered balance of the Low and Moderate Income Housing Fund of a former redevelopment agency. In making the distribution, the county auditor-controller shall utilize the same methodology for allocation and distribution of property tax revenues provided in Section 34188.
(e)Dispose of assets and properties of the former redevelopment agency as directed by the oversight board; provided, however, that the oversight board may instead direct the successor agency to transfer ownership of certain assets pursuant to subdivision (a) of Section 34181. The disposal is to be done expeditiously and in a manner aimed at maximizing value. Proceeds from asset sales and related funds that are no longer needed for approved development projects or to otherwise wind down the affairs of the agency, each as determined by the oversight board, shall be transferred to the county auditor-controller for distribution as property tax proceeds under Section 34188. The requirements of this subdivision shall not apply to a successor agency that has been issued a finding of completion by the Department of Finance department pursuant to Section 34179.7.
(f)Enforce all former redevelopment agency rights for the benefit of the taxing entities, including, but not limited to, continuing to collect loans, rents, and other revenues that were due to the redevelopment agency.
(g)Effectuate transfer of housing functions and assets to the appropriate entity designated pursuant to Section 34176.
(h)Expeditiously wind down the affairs of the redevelopment agency pursuant to the provisions of this part and in accordance with the direction of the oversight board.
(i)Continue to oversee development of properties until the contracted work has been completed or the contractual obligations of the former redevelopment agency can be transferred to other parties. Bond proceeds shall be used for the purposes for which bonds were sold unless the purposes can no longer be achieved, in which case, the proceeds may be used to defease the bonds.
(j)Prepare a proposed administrative budget and submit it to the oversight board for its approval. The proposed administrative budget shall include all of the following:
(1)Estimated amounts for successor agency administrative costs for the upcoming six-month fiscal period.
(2)Proposed sources of payment for the costs identified in paragraph (1).
(3)Proposals for arrangements for administrative and operations services provided by a city, county, city and county, or other entity.
(k)Provide administrative cost estimates, from its approved administrative budget that are to be paid from property tax revenues deposited in the Redevelopment Property Tax Trust Fund, to the county auditor-controller for each six-month fiscal period.
(l)(1)Before each six-month fiscal period, period set forth in subdivision (m) or (o), as applicable, prepare a Recognized Obligation Payment Schedule in accordance with the requirements of this paragraph. For each recognized obligation, the Recognized Obligation Payment Schedule shall identify one or more of the following sources of payment:
(A)Low and Moderate Income Housing Fund.
(B)Bond proceeds.
(C)Reserve balances.
(D)Administrative cost allowance.
(E)The Redevelopment Property Tax Trust Fund, but only to the extent no other funding source is available or when payment from property tax revenues is required by an enforceable obligation or by the provisions of this part.
(F)Other revenue sources, including rents, concessions, asset sale proceeds, interest earnings, and any other revenues derived from the former redevelopment agency, as approved by the oversight board in accordance with this part.
(2)A Recognized Obligation Payment Schedule shall not be deemed valid unless all of the following conditions have been met:
(A)A Recognized Obligation Payment Schedule is prepared by the successor agency for the enforceable obligations of the former redevelopment agency. The initial schedule shall project the dates and amounts of scheduled payments for each enforceable obligation for the remainder of the time period during which the redevelopment agency would have been authorized to obligate property tax increment had the a redevelopment agency not been dissolved.
(B)The Recognized Obligation Payment Schedule is submitted to and duly approved by the oversight board. The successor agency shall submit a copy of the Recognized Obligation Payment Schedule to the county administrative officer, the county auditor-controller, and the Department of Finance department at the same time that the successor agency submits the Recognized Obligation Payment Schedule to the oversight board for approval.
(C)A copy of the approved Recognized Obligation Payment Schedule is submitted to the county auditor-controller, the Controllers office, and the Department of Finance, and is posted on the successor agencys Internet Web site.
(3)The Recognized Obligation Payment Schedule shall be forward looking to the next six months. months or one year pursuant to subdivision (m) or (o), as applicable. The first Recognized Obligation Payment Schedule shall be submitted to the Controllers office and the Department of Finance department by April 15, 2012, for the period of January 1, 2012, to June 30, 2012, inclusive. This Recognized Obligation Payment Schedule shall include all payments made by the former redevelopment agency between January 1, 2012, through January 31, 2012, and shall include all payments proposed to be made by the successor agency from February 1, 2012, through June 30, 2012. Former redevelopment agency enforceable obligation payments due, and reasonable or necessary administrative costs due or incurred, prior to January 1, 2012, shall be made from property tax revenues received in the spring of 2011 property tax distribution, and from other revenues and balances transferred to the successor agency.
(m)The Until December 31, 2015, the Recognized Obligation Payment Schedule for the period of January 1, 2013, to June 30, 2013, shall be submitted by the successor agency, after approval by the oversight board, no later than September 1, 2012. Commencing with the Recognized Obligation Payment Schedule covering the period July 1, 2013, through December 31, 2013, successor agencies shall submit an oversight board-approved Recognized Obligation Payment Schedule to the Department of Finance department and to the county auditor-controller no fewer than 90 days before the date of property tax distribution. The Department of Finance department shall make its determination of the enforceable obligations and the amounts and funding sources of the enforceable obligations no later than 45 days after the Recognized Obligation Payment Schedule is submitted. Within five business days of the departments determination, a successor agency may request additional review by the department and an opportunity to meet and confer on disputed items. items, except for those items which are the subject of litigation disputing the departments previous or related determination. The meet and confer period may vary; an untimely submittal of a Recognized Obligation Payment Schedule may result in a meet and confer period of less than 30 days. The department shall notify the successor agency and the county auditor-controllers as to the outcome of its review at least 15 days before the date of property tax distribution.
(1)The successor agency shall submit a copy of the Recognized Obligation Payment Schedule to the Department of Finance department electronically, and the successor agency shall complete the Recognized Obligation Payment Schedule in the manner provided for by the department. A successor agency shall be in noncompliance with this paragraph if it only submits to the department an electronic message or a letter stating that the oversight board has approved a Recognized Obligation Payment Schedule.
(2)If a successor agency does not submit a Recognized Obligation Payment Schedule by the deadlines provided in this subdivision, the city, county, or city and county that created the redevelopment agency agency, if it is acting as the successor agency, shall be subject to a civil penalty equal to ten thousand dollars ($10,000) per day for every day the schedule is not submitted to the department. The civil penalty shall be paid to the county auditor-controller for allocation to the taxing entities under Section 34183. If a successor agency fails to submit a Recognized Obligation Payment Schedule by the deadline, any creditor of the successor agency or the Department of Finance or any affected taxing entity shall have standing to and may request a writ of mandate to require the successor agency to immediately perform this duty. Those actions may be filed only in the County of Sacramento and shall have priority over other civil matters. Additionally, if an agency does not submit a Recognized Obligation Payment Schedule within 10 days of the deadline, the maximum administrative cost allowance for that period shall be reduced by 25 percent.
(3)If a successor agency fails to submit to the department an oversight board-approved Recognized Obligation Payment Schedule that complies with all requirements of this subdivision within five business days of the date upon which the Recognized Obligation Payment Schedule is to be used to determine the amount of property tax allocations, the department may determine if any amount should be withheld by the county auditor-controller for payments for enforceable obligations from distribution to taxing entities, pending approval of a Recognized Obligation Payment Schedule. The county auditor-controller shall distribute the portion of any of the sums withheld pursuant to this paragraph to the affected taxing entities in accordance with paragraph (4) of subdivision (a) of Section 34183 upon notice by the department that a portion of the withheld balances are in excess of the amount of enforceable obligations. The county auditor-controller shall distribute withheld funds to the successor agency only in accordance with a Recognized Obligation Payment Schedule approved by the department. County auditor-controllers shall lack the authority to withhold any other amounts from the allocations provided for under Section 34183 or 34188 unless required by a court order.
(4)(A)The Recognized Obligation Payment Schedule payments required pursuant to this subdivision may be scheduled beyond the existing Recognized Obligation Payment Schedule cycle upon a showing that a lender requires cash on hand beyond the Recognized Obligation Payment Schedule cycle.
(B)When a payment is shown to be due during the Recognized Obligation Payment Schedule period, but an invoice or other billing document has not yet been received, the successor agency may utilize reasonable estimates and projections to support payment amounts for enforceable obligations if the successor agency submits appropriate supporting documentation of the basis for the estimate or projection to the department and the auditor-controller.
(C)A Recognized Obligation Payment Schedule may also include appropriation of moneys from bonds subject to passage during the Recognized Obligation Payment Schedule cycle when an enforceable obligation requires the agency to issue the bonds and use the proceeds to pay for project expenditures.
(n)Cause a postaudit of the financial transactions and records of the successor agency to be made at least annually by a certified public accountant.
(o)On and after January 1, 2016, commencing with the Recognized Obligation Payment Schedule covering the period from July 1, 2016, to June 30, 2017, inclusive, and for each July 1 to June 30, inclusive, thereafter, a successor agency shall submit an oversight board-approved Recognized Obligation Payment Schedule to the department and to the county auditor-controller no later than February 1, 2016, and each February 1 thereafter. The department shall make its determination of the enforceable obligations and the amounts and funding sources of the enforceable obligations no later than April 15, 2016, and each April 15 thereafter. Within five business days of the departments determination, a successor agency may request additional review by the department and an opportunity to meet and confer on disputed items, except for those items which are the subject of litigation disputing the departments previous or related determination. An untimely submittal of a Recognized Obligation Payment Schedule may result in a meet and confer period of less than 30 days. The department shall notify the successor agency and the county auditor-controller as to the outcome of its review at least 15 days before the date of the first property tax distribution for that period.
(1)The successor agency shall submit a copy of the Recognized Obligation Payment Schedule to the department in the manner provided for by the department.
(2)If a successor agency does not submit a Recognized Obligation Payment Schedule by the deadlines provided in this subdivision, the city, county, or city and county that created the redevelopment agency, if acting as the successor agency, shall be subject to a civil penalty equal to ten thousand dollars ($10,000) per day for every day the schedule is not submitted to the department. The civil penalty shall be paid to the county auditor-controller for allocation to the taxing entities under Section 34183. If a successor agency fails to submit a Recognized Obligation Payment Schedule by the deadline, any creditor of the successor agency or the department or any affected taxing entity shall have standing to, and may request a writ of mandate to, require the successor agency to immediately perform this duty. Those actions may be filed only in the County of Sacramento and shall have priority over other civil matters. Additionally, if an agency does not submit a Recognized Obligation Payment Schedule within 10 days of the deadline, the maximum administrative cost for that period shall be reduced by 25 percent.
(3)If a successor agency fails to submit to the department an oversight board-approved Recognized Obligation Payment Schedule that complies with all requirements of this subdivision within five business days of the date upon which the Recognized Obligation Payment Schedule is to be used to determine the amount of property tax allocations, the department may determine if any amount should be withheld by the county auditor-controller for payments for enforceable obligations from distribution to taxing entities, pending approval of a Recognized Obligation Payment Schedule. The county auditor-controller shall distribute the portion of any of the sums withheld pursuant to this paragraph to the affected taxing entities in accordance with paragraph (4) of subdivision (a) of Section 34183 upon notice by the department that a portion of the withheld balances are in excess of the amount of enforceable obligations. The county auditor-controller shall distribute withheld funds to the successor agency only in accordance with a Recognized Obligation Payment Schedule approved by the department. County auditor-controllers do not have the authority to withhold any other amounts from the allocations provided for under Section 34183 or 34188 except as required by a court order.
(4)(A) The Recognized Obligation Payment Schedule payments required pursuant to this subdivision may be scheduled beyond the existing Recognized Obligation Payment Schedule cycle upon a showing that a lender requires cash on hand beyond the Recognized Obligation Payment Schedule cycle.
(B)When a payment is shown to be due during the Recognized Obligation Payment Schedule period, but an invoice or other billing document has not yet been received, the successor agency may utilize reasonable estimates and projections to support payment amounts for enforceable obligations if the successor agency submits appropriate supporting documentation of the basis for the estimate or projection to the department and the county auditor-controller.
(C)A Recognized Obligation Payment Schedule may also include a request to use proceeds from bonds expected to be issued during the Recognized Obligation Payment Schedule cycle when an enforceable obligation requires the agency to issue the bonds and use the proceeds to pay for project expenditures.
(5)Once per Recognized Obligation Payment Schedule period, and no later than October 1, a successor agency may submit one amendment to the Recognized Obligation Payment Schedule approved by the department pursuant to this subdivision, if the oversight board makes a finding that a revision is necessary for the payment of approved enforceable obligations during the second one-half of the Recognized Obligation Payment Schedule period, which shall be defined as January 1 to June 30, inclusive. A successor agency may only amend the amount requested for payment of approved enforceable obligations. The revised Recognized Obligation Payment Schedule shall be approved by the oversight board and submitted to the department by electronic means in a manner of the departments choosing. The department shall notify the successor agency and the county auditor-controller as to the outcome of the departments review at least 15 days before the date of the property tax distribution.
SEC. 4.Section 34191.6 is added to the Health and Safety Code, to read:34191.6.(a)Beginning August 1, 2015, successor agencies may submit a Last and Final Recognized Obligation Payment Schedule for approval by the oversight board and the department if all of the following conditions are met:
(1)The remaining debt of a successor agency is limited to administrative costs and payments pursuant to enforceable obligations with defined payment schedules including, but not limited to, debt service, loan agreements, and contracts.
(2)All remaining obligations have been previously listed on a Recognized Obligation Payment Schedule and approved for payment by the department pursuant to subdivision (m) or (o) of Section 34177.
(3)The successor agency is not a party to outstanding or unresolved litigation.
(b)A successor agency that meets the conditions in subdivision (a) may submit a Last and Final Recognized Obligation Payment Schedule to its oversight board for approval at any time. The successor agency may then submit the oversight board-approved Last and Final Recognized Obligation Payment Schedule to the department and only in a manner provided by the department. The Last and Final Recognized Obligation Payment Schedule shall not be effective until reviewed and approved by the department as provided for in subdivision (c). The successor agency shall also submit a copy of the oversight board-approved Last and Final Recognized Obligation Payment Schedule to the county administrative officer, the county auditor-controller, and post it to the successor agencys Internet Web site at the same time that the successor agency submits the Last and Final Recognized Obligation Payment Schedule to the department.
(1)The Last and Final Recognized Obligation Payment Schedule shall list the remaining enforceable obligations of the successor agency in the following order:
(A)Enforceable obligations to be funded from the Redevelopment Property Tax Trust Fund.
(B)Enforceable obligations to be funded from bond proceeds or enforceable obligations required to be funded from other legally or contractually dedicated or restricted funding sources.
(C)Loans or deferrals authorized for repayment pursuant to subparagraph (G) of paragraph (1) of subdivision (d) of Section 34171 or Section 34191.4.
(2)The Last and Final Recognized Obligation Payment Schedule shall include the total outstanding obligation and a schedule of remaining payments for each enforceable obligation listed pursuant to subparagraphs (A) and (B) of paragraph (1), and the total outstanding obligation and interest rate, not to exceed 2 percent, for loans or deferrals listed pursuant to subparagraph (C) of paragraph (1).
(c)The department shall have 100 days to review the Last and Final Recognized Obligation Payment Schedule submitted pursuant to subdivision (b). The department may make any amendments or changes to the Last and Final Recognized Obligation Payment Schedule, provided the amendments or changes are agreed to by the successor agency in writing. If the successor agency and the department cannot come to an agreement on the proposed amendments or changes, the department shall issue a letter denying the Last and Final Recognized Obligation Payment Schedule. All Last and Final Recognized Obligation Payment Schedules approved by the Department shall become effective on the first day of the subsequent Redevelopment Property Tax Trust Fund distribution period.
(1)Upon approval by the department, the Last and Final Recognized Obligation Payment Schedule shall establish the maximum amount of Redevelopment Property Tax Trust Funds to be distributed to the successor agency for each remaining fiscal year until all obligations have been fully paid.
(2)Successor agencies may submit no more than two requests to the department to amend the approved Last and Final Recognized Obligation Payment Schedule. Requests shall first be approved by the oversight board and then submitted to the department for review. A request shall not be effective until reviewed and approved by the department. The request shall be provided to the department by electronic means and in a manner of the departments choosing. The department shall have 100 days from the date received to approve or deny the successor agencys request.
(3)Any revenues, interest, and earnings of the successor agency not authorized for use pursuant to the approved Last and Final Recognized Obligation Payment Schedule shall be remitted to the county auditor-controller for distribution to the affected taxing entities. Notwithstanding Sections 34191.3 and 34191.5, proceeds from the disposition of real property subsequent to the approval of the Last and Final Recognized Obligation Payment Schedule that are not necessary for the payment of an enforceable obligation shall be remitted to the county auditor-controller for distribution to the affected taxing entities.
(4)A successor agency shall not expend more than the amount approved for each enforceable obligation listed and approved on the Last and Final Recognized Obligation Payment Schedule.
(5)If a successor agency receives insufficient funds to pay for the enforceable obligations approved in the Last and Final Recognized Obligation Payment Schedule in any given period, the city, county, or city and county that created the redevelopment agency may loan or grant funds to a successor agency for that period at the successor agencys request for the sole purpose of paying for approved items on the Last and Final Recognized Obligation Payment Schedule that would otherwise go unpaid. Additionally, at the request of the department, the county treasurer may loan any funds from the county treasury to the Redevelopment Property Tax Trust Fund of the successor agency for the purpose of paying an item approved on the Last and Final Recognized Obligation Payment Schedule in order to ensure prompt payments of successor agency debts. A loan made under this section shall be repaid from the source of funds approved for payment of the underlying enforceable obligation in the Last and Final Recognized Obligation Payment Schedule once sufficient funds become available from that source.
(6)Notwithstanding paragraph (6) of subdivision (e) of Section 34176 and subparagraph (A) of paragraph (2) of subdivision (b) of Section 34191.4, commencing on the date the Last and Final Recognized Obligation Payment Schedule becomes effective:
(A)Loan or deferrals authorized for repayment pursuant to subparagraph (G) of paragraph (1) of subdivision (d) of Section 34171 or Section 34191.4 and listed and approved on the Last and Final Recognized Obligation Payment Schedule, shall be recalculated to accrue annual simple interest not to exceed 2 percent.
(B)The maximum repayment amount of the total principal and interest on loans and deferrals authorized for repayment pursuant to subparagraph (G) of paragraph (1) of subdivision (d) of Section 34171 or Section 34191.4 and listed and approved in the Last and Final Recognized Obligation Payment Schedule shall be 15 percent of the moneys remaining in the Redevelopment Property Tax Trust Fund after the allocation of moneys in each six-month period pursuant to Section 34183 prior to the distributions under paragraph (4) of subdivision (a) of Section 34183.
(7)Commencing on the effective date of the approved Last and Final Recognized Obligation Payment Schedule, the successor agency shall not prepare or transmit Recognized Obligation Payment Schedules pursuant to Section 34177.
(8)Commencing on the effective date of the approved Last and Final Recognized Obligation Payment Schedule, oversight board resolutions shall not be submitted to the department pursuant to subdivision (h) of Section 34179. This paragraph shall not apply to oversight board resolutions necessary for refunding bonds pursuant to Section 34177.5, long-range property management plans pursuant to Section 34191.5, amendments to the Last and Final Recognized Obligation Payment Schedule under paragraph (2) of subdivision (c), and the final oversight board resolutions pursuant to Section 34187.
(d)The county auditor-controller shall do the following:
(1)Review the Last and Final Recognized Obligation Payment Schedule and provide any objection to the inclusion of any items or amounts to the department.
(2)After the Last and Final Recognized Obligation Payment Schedule is approved by the department, the county auditor-controller shall continue to allocate moneys in the Redevelopment Property Tax Trust Fund pursuant to Section 34183. However, the allocation from the Redevelopment Property Tax Trust Fund in each fiscal period, after deducting auditor-controller administrative costs, shall be according to the following order of priority:
(A)Allocations pursuant to paragraph (1) of subdivision (a) of Section 34183.
(B)Debt service payments scheduled to be made for tax allocation bonds that are listed and approved in the Last and Final Recognized Obligation Payment Schedule.
(C)Payments scheduled to be made on revenue bonds that are listed and approved in the Last and Final Recognized Obligation Payment Schedule, but only to the extent the revenues pledged for them are insufficient to make the payments and only if the agencys tax increment revenues were also pledged for the repayment of bonds.
(D)Payments scheduled for debts and obligations listed and approved in the Last and Final Recognized Obligation Payment Schedule to be paid from the Redevelopment Property Tax Trust Fund pursuant to subparagraph (A) of paragraph (1) of subdivision (b) and subdivision (c).
(E)Payments listed and approved pursuant to subparagraph (A) of paragraph (1) of subdivision (b) and subdivision (c) that were authorized but unfunded in prior periods.
(F)Repayment in the amount specified in paragraph (6) of subdivision (c) of loans and deferrals listed and approved on the Last and Final Recognized Obligation Payment Schedule pursuant to subparagraph (C) of paragraph (1) of subdivision (b) and subdivision (c).
(G)Any moneys remaining in the Redevelopment Property Tax Trust Fund after the payments and transfers authorized by subparagraphs (A) to (F), inclusive, shall be distributed to taxing entities in accordance with Section 34188.
(3)If the successor agency reports to the county auditor-controller that the total available amounts in the Redevelopment Property Tax Trust Fund will be insufficient to fund their current or future fiscal year obligations, and if the county auditor-controller concurs that there are insufficient funds to pay the required obligations, the county auditor-controller may distribute funds pursuant to subdivision (b) of Section 34183.
(4)The county auditor-controller shall no longer distribute property tax to the Redevelopment Property Tax Trust Fund once the aggregate amount of property tax allocated to the successor agency equals the total outstanding obligation approved in the Last and Final Recognized Obligation Payment Schedule.
(e)Successor agencies with a Last and Final Recognized Payment Schedule approved by the Department of Finance may amend or modify existing contracts, agreements, or other arrangements identified on the Last and Final Recognized Obligation Payment Schedule which the Department of Finance has already determined to be enforceable obligations, provided:
(1)The outstanding payments owing from the successor agency are not accelerated or increased in any way.
(2)Any amendment to extend terms shall not include an extension beyond the last scheduled payment for the enforceable obligations listed and approved on the Last and Final Recognized Obligation Payment Schedule.
(3)This subdivision shall not be construed as authorizing successor agencies to create new or additional enforceable obligations or otherwise increase, directly or indirectly, the amount of Redevelopment Property Tax Trust Funds allocated to the successor agency by the county auditor-controller.
SEC. 5.If the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code.
SECTION 1.The Legislature finds and declares all of the following:
(a)The California Constitution limits property-based tax levies, with exceptions to these limits only when a local jurisdiction obtains the approval of its voting electorate to use additional property-based tax levies for specific purposes, in accordance with applicable constitutional and statutory provisions.
(b)With the enactment of Chapter 5 of the 201112 First Extraordinary Session (Assembly Bill 26), the Legislature intended that, upon dissolution of redevelopment agencies in the State of California, property taxes that would have been allocated to redevelopment agencies are no longer deemed tax increment.
(c)It is important to minimize the potential erosion of property tax residuals being returned to the local taxing entities, both in the short and long term, while transitioning the state from detailed review of enforceable obligations to a streamlined process.
(d)It is appropriate to clarify and refine various provisions in the relevant statutes to eliminate ambiguity and make the statutes operate more successfully for all parties without rewarding previously questionable behavior.
(e)It is essential to maintain the expeditious wind-down of former redevelopment agency activities while adding new incentives for substantial compliance with the law.
(f)It is the intent of the Legislature, in enacting this act, that as the redevelopment agency dissolution process winds down the use of residual revenues derived from the imposition of a property tax rate, approved by the voters of a city, county, city and county, or special district to make payments in support of capital projects and programs related to the State Water Project, and levied in addition to the property tax rate limited by subdivision (a) of Section 1 of Article XIIIA of the California Constitution, is consistent with the use approved by the voters of a city, county, city and county, or special district.
The Legislature finds and declares all of the following:
(a)The California Constitution limits property-based tax levies, with exceptions to these limits only when a local jurisdiction obtains the approval of its voting electorate to use additional property-based tax levies for specific purposes, in accordance with applicable constitutional and statutory provisions.
(b)With the enactment of Chapter 5 of the 201112 First Extraordinary Session (Assembly Bill 26), the Legislature intended that, upon dissolution of redevelopment agencies in the State of California, property taxes that would have been allocated to redevelopment agencies are no longer deemed tax increment.
(c)It is important to minimize the potential erosion of property tax residuals being returned to the local taxing entities, both in the short and long term, while transitioning the state from detailed review of enforceable obligations to a streamlined process.
(d)It is appropriate to clarify and refine various provisions in the relevant statutes to eliminate ambiguity and make the statutes operate more successfully for all parties without rewarding previously questionable behavior.
(e)It is essential to maintain the expeditious wind-down of former redevelopment agency activities while adding new incentives for substantial compliance with the law.
(f)It is the intent of the Legislature, in enacting this act, that as the redevelopment agency dissolution process winds down the use of residual revenues derived from the imposition of a property tax rate, approved by the voters of a city, county, city and county, or special district to make payments in support of capital projects and programs related to the State Water Project, and levied in addition to the property tax rate limited by subdivision (a) of Section 1 of Article XIIIA of the California Constitution, is consistent with the use approved by the voters of a city, county, city and county, or special district.
|
Date
|
Status
|
|---|---|
| Apr 23, 2015 | Assembly Rule 56 suspended. |
| Feb 1, 2016 | From committee: Filed with the Chief Clerk pursuant to Joint Rule 56. |
| Jan 31, 2016 | Died pursuant to Article IV, Sec. 10(c) of the Constitution. |
| May 28, 2015 | In committee: Held under submission. |
| May 13, 2015 | In committee: Set, first hearing. Referred to APPR. suspense file. |
| Apr 30, 2015 | From committee: Do pass and re-refer to Com. on APPR. (Ayes 9. Noes 0.) (April 29). Re-referred to Com. on APPR. |
| Apr 29, 2015 | From committee: Do pass and re-refer to Com. on L. GOV. (Ayes 6. Noes 0.) (April 29). Re-referred to Com. on L. GOV. |
| Apr 23, 2015 | Re-referred to Com. on H. & C.D. |
| Apr 23, 2015 | Assembly Rule 56 suspended. (Page 1089.) |
| Feb 24, 2015 | Read first time. To print. |
| Apr 23, 2015 | (pending re-refer to Com. on L. GOV.) |
| Apr 22, 2015 | From committee chair, with author's amendments: Amend, and re-refer to Com. on H. & C.D. Read second time and amended. |
| Apr 6, 2015 | Re-referred to Com. on H. & C.D. |
| Apr 6, 2015 | In committee: Set, first hearing. Hearing canceled at the request of author. |
| Mar 26, 2015 | Referred to Coms. on H. & C.D. and L. GOV. |
| Mar 26, 2015 | From committee chair, with author's amendments: Amend, and re-refer to Com. on H. & C.D. Read second time and amended. |
| Feb 25, 2015 | From printer. May be heard in committee March 27. |
|
Date
|
Description
|
Location
|
Votes
|
|
|---|---|---|---|---|
| Apr 29, 2015 | Do pass and be re-referred to the Committee on [Appropriations] | Assembly Standing Committee on Local Government |
Passed |
|
| Apr 29, 2015 | Do pass and be re-referred to the Committee on [Local Government] | Assembly Standing Committee on Housing and Community Development |
Passed |
This list shows positions taken on this bill by organizations on the date displayed, which is linked to the original source.
Positions by individuals are not included.
|
Organization
|
Position
|
Date
|
|---|---|---|
| East Valley Water District | * Support | Apr 29, 2015 |
| East Valley Water District | * Indeterminate | Apr 29, 2015 |
| San Bernardino Valley Municipal Water District | ** Support | Apr 29, 2015 |
| San Bernardino Valley Municipal Water District [SPONSOR] | ** Support | Apr 29, 2015 |
AB 654
Page 2
Date of Hearing: May 13, 2015
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Jimmy Gomez, Chair
AB 654
(Brown) – As Amended April 22, 2015
Policy Committee: |
Housing and Community Development |
Vote: |
6 - 0 |
|
Local Government |
|
9 - 0 |
|
|
|
|
Urgency: No State Mandated Local Program: Yes Reimbursable: Yes
SUMMARY:
This bill prohibits a county auditor from allocating to the Redevelopment Property Tax Trust Fund (RPTTF), except as specified, revenues derived from a property tax rate approved by voters in a city, county, or special district, to pay for the State Water Project.
FISCAL EFFECT:
Significant General Fund costs, likely in excess of $5 million annually, beginning in 2016-17, due to the diversion of revenues from State Water Project tax rates from the RPTTF to the city, county, or special district that imposed the tax rate. Any amount of property tax revenue diverted away from schools would typically result in corresponding General Fund expenditures to meet the minimum funding guarantees of Proposition 98. On average, schools receive 50% of property tax revenues in each county.
COMMENTS:
Purpose. According to the author, "The measure would remedy the situation in which the revenues derived from voter-approved property tax overrides are being misallocated in the course of the RDA dissolution process in the County of San Bernardino. Currently the San Bernardino County Auditor- Controller is allocating the residual balances from each former RDA's Redevelopment Property Tax Trust Fund to taxing entities based on each agency's share of the 1% County General Tax levy without taking into account any specific debt service override tax. This results in Valley District's Debt Service Tax Override proceeds that are not needed for the payment of approved former RDA expenses to be allocated out to all taxing entities ignoring that a certain portion of that residual balance was derived directly from Valley District's tax override rate."
Background. In the 1960s, the voters of San Bernardino County approved a tax increase to fund State Water Projects in the county. After the creation of redevelopment, the Valley Municipal Water District (Valley District) entered into pass through agreements with the RDAs to receive some or all of the property taxes they would have received pre-redevelopment.
According to Valley District, they had 23 negotiated agreements with ten RDAs for project areas throughout its service area. Although Valley District is receiving a portion of the payment, Valley District indicates that it is not receiving its entire pass through payment and is entitled to an additional $10 million which is being distributed by the San Bernardino county-auditor to other taxing entities out of the residual balance remaining after all the obligations of the RDA are paid.
Local water agencies can levy ad valorem rates above the 1% rate to pay their annual obligations for water deliveries from the State Water Project. State courts have concluded that such costs were voter-approved debt because voters approved the construction, operation, and maintenance of the State Water Project in 1960. As a result, most water agencies that have contracts with the State Water Project levy a voter-approved debt rate. It is not clear how many, in addition to Valley District, have pass through agreements with former RDAs and could qualify for additional tax revenues under this bill.
Amendment. The bill needs an amendment to fill in the blank date by which a county auditor-controller must deem as correct the allocation of revenues derived from the imposition of the State Water Project property tax rate. The author has indicated plans to add the date July 1, "2015."
Related Legislation. AB 1009 (Garcia), pending in this Committee, authorizes a city or county that levies a property tax rate, approved by the voters, to make payments in support of pension programs and levied in addition to the general property tax rate, to make a request to an oversight board to prohibit revenues derived from that property tax rate from being deposited into a Redevelopment Property Tax Fund.
This bill takes the same approach as AB 1009, but instead, deals with property tax override rates approved by voters in support of the State Water Project.
Analysis Prepared by: Jennifer Swenson / APPR. / (916) 319-2081
AB 654
Page 6
Date of Hearing: April 29, 2015
ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
Brian Maienschein, Chair
AB 654
(Brown) – As Amended April 22, 2015
SUBJECT: Redevelopment: revenues from property tax override rates.
SUMMARY: Prohibits a county auditor from allocating revenues derived from a property tax rate approved by voters in a city, county, or special district, to pay for the State Water Project to the Redevelopment Property Tax Trust Fund, except as specified. Specifically, this bill:
Finds and declares all of the following:
The California Constitution limits property-based tax levies, with exceptions to these limits only when a local jurisdiction obtains the approval of its voting electorate to use additional property-based tax levies for specific purposes approved by the voting electorate, in accordance with applicable constitutional and statutory provisions;
With the enactment of Chapter 5 of the 2011-12 First Extraordinary Session (Assembly Bill 26), the Legislature intended that, upon dissolution of redevelopment agencies in the State of California, property taxes that would have been allocated to redevelopment agencies are no longer deemed tax increment;
It is the intent of the Legislature in enacting this act to do all of the following:
If a redevelopment agency had previously pledged revenues derived from the imposition of a property tax rate, approved by the voters of a city, county, or city and county, or special district to make payments in support of the State Water Project and levied in addition to the property tax rate limited by subdivision (a) of Section 1 of Article XIII A of the California Constitution, to pay a portion of the debt service due on indebtedness incurred by the former redevelopment agency on an approved recognized obligation payment schedule (ROPS), then the successor agency shall continue to pledge those revenues, in a commensurate rate going forward. For example, if revenues derived from a water project property tax rate approved by the voters of a city, county, city and county, or special district were pledged to pay up to 25% of the annual debt service for the indebtedness approved in a ROPS, the successor agency shall continue to pay up to 25% of the annual debt service on the indebtedness until maturity. Any and all excess pledged revenues derived from the water project property tax rate that are not necessary to pay the debt service on the indebtedness shall be allocated and paid to the city, county, city and county, or special district whose voters approved the State Water Project-related property tax rate;
Ensure that the use of revenues derived from the imposition of a property tax rate approved by the voters of a city, county, city and county, or special district to make payments in support of the State Water Project and levied in addition to the property tax rate limited by subdivision (a) of Section 1 of Article XIII A of the California Constitution, is consistent with the use approved by the voters of a city, county, city and county, or special district once revenues from such property tax rates are not needed to pay approved indebtedness of a former redevelopment agency; and,
Implement the allocation and distribution of voter-approved, property-based tax revenues for the State Water Project under the redevelopment dissolution process in a manner that would have been consistent with the allocation and distribution of those revenues had redevelopment agencies not been dissolved, in accordance with applicable constitutional provisions.
Declares the intent of the Legislature that this act not affect any property tax allocations that occurred prior to July 1 of an unspecified year.
Requires the county auditor-controller, prior to allocating moneys in each Redevelopment Property Tax Trust Fund (RPTTF), pursuant to the specified formula in existing law, to additionally deduct the revenues allocated as follows:
On January 2, 2016, and each January 2 and June 1 thereafter, to a city, county, or special district that levies a property tax rate, approved by the voters of a city, county, or special district to make payments in support of the State Water Project and levied in addition to the property tax rate limited by the California Constitution, an amount of property tax revenues equal to the amount of revenues derived from the imposition of that tax rate that were allocated to the RPTTF for that fiscal period. Provides that this paragraph shall not apply to the extent that revenues derived from the imposition of a property tax rate are not deposited into an RPTTF as provided by 3) through 6) below.
Allows a city, county, or special district that levies a property tax rate, approved by the voters of a city, county, or special district to make payments in support of the State Water Project and levied in addition to the property tax rate limited by the California Constitution, to make a request to an oversight board to prohibit revenues derived from the imposition of that property tax rate from being deposited into an RPTTF.
Provides, based on substantial evidence that a former RDA made a pledge of revenues that specifically included revenues derived from the imposition of a property tax rate, approved by the voters of a city, county, or special district to make payments in support of the State Water Project and levied in addition to the property tax rate limited by the California Constitution, that an oversight board may deny a request pursuant to 3), above, in an amount not to exceed the amount of revenues pledged by the former RDA.
Provides, notwithstanding any other law, for the 2015-16 fiscal year and each fiscal year thereafter, except to the extent an oversight board denies a request as provided in 4), above, that any revenues derived from the imposition of a property tax rate, approved by the voters of a city, county, or special district to make payments in support of the State Water Project and levied in addition to the property tax rate limited by the California Constitution, shall not be allocated to an RPTTF, and shall instead, be allocated to, and when collected shall be paid into, the fund of the city, county, or special district whose voters approved the tax.
Provides, notwithstanding any other law, all allocations of revenues derived from the imposition of a property tax rate, approved by the voters of a city, county, or special district to make payments in support of the State Water Project and levied in addition to the property tax rate limited by the California Constitution, made by any county auditor-controller prior to July 1, of an unspecified year, shall be deemed correct and shall not be affected by this bill. Provides that a city, county, county auditor-controller, successor agency, or affected taxing entity shall not be subject to any claim for money, damages, or reallocated revenues based on any allocation of such revenues prior to July 1, 2014.
Provides that reimbursement to local agencies and school districts shall be made, if the Commission on State Mandates determines that this act contains costs mandated by the state.
EXISTING LAW:
Dissolves RDAs and institutes a process for winding down their activities.
Defines "enforceable obligations."
Requires successor agencies make payments due to enforceable obligations, as specified.
Requires successor agencies to prepare a ROPS, before each six-month fiscal period, in accordance with specified requirements, and requires the schedule to identify one or more
of the following sources of payment:
Low- and Moderate-Income Housing Fund;
Bond proceeds;
Reserve balances;
Administrative cost allowance;
The RPTTF, as specified; and,
Other revenue sources, including rents, concessions, asset sale proceeds, interest earnings, and any other revenues derived from the former redevelopment agency, as approved by the oversight board.
Requires each successor agency to have an oversight board of seven members to approve certain actions of the successor agency.
Requires the Department of Finance (DOF) to review the actions of an oversight board.
Requires DOF to issue a finding of completion to the successor agency, within five business days, once the following conditions have been met and verified:
The successor agency has paid the full amount, as determined during the due diligence reviews and the county auditor-controller has reported those payments to DOF;
The successor agency has paid the full amount as determined during the July True-up process; or,
The successor agency has paid the full amount upon a final judicial determination of the amounts due and confirmation that those amounts have been paid by the county auditor-controller.
Allows the successor agency, upon receiving the finding of completion, to:
Retain dissolved redevelopment agency assets;
Place loan agreements between the former redevelopment agency and sponsoring entity on the ROPS, as an enforceable obligation, provided the oversight board makes a finding that the loan was for legitimate redevelopment purposes; and,
Utilize proceeds derived from bonds issued prior to January 1, 2011, in a manner consistent with the original bond covenants.
Requires, after DOF issues a finding of completion, the 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, and requires the report to be submitted to the oversight board and DOF for approval no later than six months following the issuance to the successor agency of the finding of completion.
Limits property tax to 1%, except for specific bonded debt, pursuant to the California Constitution.
Allows a governing body, pursuant to Section 11652 of the Water Code entitled "Contracts with State Agencies" to, whenever necessary, levy upon all property in the state agency not exempt from taxation, a tax or assessment sufficient to provide for all payments under the contract then due or to become due within the then current fiscal year or within the following fiscal year before the time when money will be available from the next general tax levy.
FISCAL EFFECT: This bill is keyed fiscal and contains a state-mandated local program.
COMMENTS:
Bill Summary. This bill would authorize a city, county, or special district that levies a property tax override rate approved by the voters of that city, county, or special district to make payments in support of the State Water Project and levied in addition to the general property tax rate, to make a request to an oversight board to prohibit revenues derived from that property tax rate from being deposited into the RPPTF. The bill also authorizes an oversight board to deny the request, in certain circumstances, and would prohibit any revenues, except if the oversight board denies the request, derived from the imposition of that property tax rate from being allocated to the RPPTF, and would instead, require these revenues to be allocated to the fund of the city, county or special district whose voters approved the tax.
This bill is sponsored by the San Bernardino Valley Municipal Water District (known as Valley District).
State Water Project and Burns-Porter Act of 1960. According to the Department of Water Resources (DWR), the California State Water Project is a water storage and delivery system of reservoirs, aqueducts, powerplants and pumping plants. Its main purpose is to store water and distribute it to 29 urban and agricultural water suppliers in Northern California, the San Francisco Bay Area, the San Joaquin Valley, the Central Coast, and Southern California. Of the contracted water supply, 70% goes to urban users and 30% goes to agricultural users. The project is maintained and operated by DWR, makes deliveries to two-thirds of California's population, and is also operated to improve water quality in the Delta, control Feather River flood waters, provide recreation and enhance fish and wildlife.
The Project includes 34 storage facilities, reservoirs and lakes, 20
pumping plants,
four pumping-generating plants, five
hydroelectric power plants, and about 7,000 miles of open canals and
pipelines.
Local water agencies can levy ad valorem rates above the 1% rate to pay their annual obligations for water deliveries from the State Water Project. State courts have concluded that such costs were voter-approved debt because voters approved the construction, operation, and maintenance of the State Water Project in 1960. As a result, most water agencies that have contracts with the State Water Project levy a voter-approved debt rate.
Author's Statement. According to the author, "The measure would remedy the situation in which the revenues derived from voter-approved property tax overrides are being misallocated in the course of the RDA dissolution process in the County of San Bernardino. Currently the San Bernardino County Auditor- Controller is allocating the residual balances from each former RDA's Redevelopment Property Tax Trust Fund to taxing entities based on each agency's share of the 1% County General Tax levy without taking into account any specific debt service override tax. This results in Valley District's Debt Service Tax Override proceeds that are not needed for the payment of approved former RDA expenses to be allocated out to all taxing entities ignoring that a certain portion of that residual balance was derived directly from Valley District's tax override rate."
Related Legislation. AB 1009 (Garcia), pending in the Assembly Appropriations Committee, authorizes a city or county that levies a property tax rate, approved by the voters of a city or county to make payments in support of pension programs and levied in addition to the general property tax rate, to make a request to an oversight board to prohibit revenues derived from that property tax rate from being deposited into a Redevelopment Property Tax Fund.
This bill takes the same approach as AB 1009, but instead, deals with property tax override rates approved by voters in support of the State Water Project.
Arguments in Support. According to the sponsor, "Prior to dissolution, $19.5 million (25%) of Valley District's property taxes derived from the State Water Project tax rate set by the Valley District board and Valley District's portion of the 1% General Tax levy was being diverted to RDAs. After almost 3 years of the RDA dissolution wind down process, Valley District is now receiving all but $10 million of the property taxes derived from its Debt Service Override Tax rate and its portion of the 1% General Tax levy. Valley District management recently determined that some of this remaining $10 million in annual property tax revenue is being allocated to other taxing entities. Further, if this error is not corrected the effect on Valley District's tax proceeds will increase significantly as the wind down process matures."
Arguments in Opposition. None on file.
Double-Referral. This bill is scheduled to be heard in the Housing and Community Development Committee on April 29, 2015, and will be heard by this Committee pending referral.
REGISTERED SUPPORT / OPPOSITION:
Support
San Bernardino Valley Municipal Water District [SPONSOR]
East Valley Water District
Opposition
None on file
Analysis Prepared by: Debbie Michel / L. GOV. / (916) 319-3958
AB 654
Page 6
Date of Hearing: April 29, 2015
ASSEMBLY COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT
Ed Chau, Chair
AB 654
(Brown) – As Amended April 22, 2015
SUBJECT: Redevelopment: revenues from property tax override rates
SUMMARY: Enacts provisions that would allow revenues from a voter-approved property tax in support of a State Water Project to be allocated to the city or county whose voters approved the tax, in specified conditions. Specifically, this bill:
Finds and declares all of the following:
The California Constitution limits property-based tax levies, with exceptions to these limits only when a local jurisdiction obtains the approval of its voting electorate to use additional property-based tax levies for specific purposes approved by the voting electorate, in accordance with applicable constitutional and statutory provisions.
With the enactment of AB 26 X1 (Blumenfield), Chapter 5, Statutes of 2011-12 First Extraordinary Session, the Legislature intended that, upon dissolution of redevelopment agency (RDAs) in the State of California, property taxes that would have been allocated to RDAs are no longer deemed tax increment.
It is the intent of the Legislature in enacting this act to do all of the following:
If an RDA had previously pledged revenues derived from the imposition of a property tax rate, approved by the voters of a city, county, or city and county to make payments in support of a State Water Project and levied in addition to the property tax rate limited by the California Constitution, to pay a portion of the debt service due on indebtedness incurred by the former RDA on an approved Recognized Obligation Payment Schedule (ROPS), then the successor agency shall continue to pledge those revenues, in a commensurate rate going forward. For example, if revenues derived from a State Water Project approved by the voters of a city, county, or city and county were pledged to pay up to 25% of the annual debt service for the indebtedness approved in a ROPS, the successor agency shall continue to pay up to 25% of the annual debt service on the indebtedness until maturity. Any and all excess pledged revenues derived from the State Water Project that are not necessary to pay the debt service on the indebtedness shall be allocated and paid to the city, county, or city and county whose voters approved the State Water Project property tax rate;
Ensure that the use of revenues derived from the imposition of a property tax rate approved by the voters of a city, county, or city and county, to make payments in support of State Water Projects and levied in addition to the property tax rate limited by the California Constitution, is consistent with the use approved by the voters of a city, county, or city and county, once revenues from such property tax rates are not needed to pay approved indebtedness of a former RDA;
Implement the allocation and distribution of voter-approved, property-based tax revenues for State Water Projects under the RDA dissolution process in a manner that would have been consistent with the allocation and distribution of those revenues had RDAs not been dissolved, in accordance with applicable constitutional provisions; and,
It is the intent of the Legislature that this act not affect any property tax allocations that occurred prior to an unspecified date.
Requires the county auditor-controller, prior to allocating moneys in each Redevelopment Property Tax Trust Fund (RPTTF) pursuant to the specified formula in existing law, to additionally deduct the revenues allocated as follows:
On January 2, 2016, and each January 2 and June 1 thereafter, to a city or county that levies a property tax rate, approved by the voters of a city or county to make payments in support of a State Water Project and levied in addition to the property tax rate limited by the California Constitution, an amount of property tax revenues equal to the amount of revenues derived from the imposition of that tax rate that were allocated to the RPTTF for that fiscal period. Provides that this paragraph shall not apply to the extent that revenues derived from the imposition of a property tax rate are not deposited into a RPTTF as provided by 3) through 6) below.
Allows a city or county that levies a property tax rate, approved by the voters of a city or county to make payments in support of a State Water Project and levied in addition to the property tax rate limited by the California Constitution, to make a request to an oversight board to prohibit revenues derived from the imposition of that property tax rate from being deposited into an RPTTF.
Provides, based on substantial evidence that a former RDA made a pledge of revenues that specifically included revenues derived from the imposition of a property tax rate, approved by the voters of a city or county to make payments in support of a State Water Project and levied in addition to the property tax rate limited by the California Constitution, that an oversight board may deny a request pursuant to 3), above, in an amount not to exceed the amount of revenues pledged by the former RDA.
Provides, notwithstanding any other law, for the 2015-16 fiscal year and each fiscal year thereafter, except to the extent an oversight board denies a request as provided in 4), above, that any revenues derived from the imposition of a property tax rate, approved by the voters of a city or county to make payments in support of a State Water Project and levied in addition to the property tax rate limited by the California Constitution, shall not be allocated to an RPTTF, and shall instead, be allocated to, and when collected shall be paid into, the fund of the city or county whose voters approved the tax.
Provides, notwithstanding any other law, all allocations of revenues derived from the imposition of a property tax rate, approved by the voters of a city or county to make payments in support of a State Water Project and levied in addition to the property tax rate limited by the California Constitution, made by any county auditor-controller prior to July 1, 2015, shall be deemed correct and shall not be affected by this bill. Provides that a city, county, county auditor-controller, successor agency, or affected taxing entity shall not be subject to any claim for money, damages, or reallocated revenues based on any allocation of such revenues prior to an unspecified date.
Provides that reimbursement to local agencies and school districts shall be made, if the Commission on State Mandates determines that this act contains costs mandated by the state.
EXISTING LAW:
Dissolves RDAs and institutes a process for winding down their activities.
Defines "enforceable obligations."
Requires successor agencies to make payments due on enforceable obligations, as specified.
Requires successor agencies to prepare a ROPS, before each six-month fiscal period, in accordance with specified requirements, and requires the schedule to identify one or more
of the following sources of payment:
Low- and Moderate-Income Housing Fund;
Bond proceeds;
Reserve balances;
Administrative cost allowance;
The RPTTF, as specified; and,
Other revenue sources, including rents, concessions, asset sale proceeds, interest earnings, and any other revenues derived from the former redevelopment agency, as approved by the oversight board.
Requires each successor agency to have an oversight board of seven members to approve certain actions of the successor agency.
Requires the Department of Finance (DOF) to review the actions of an oversight board.
Requires DOF to issue a finding of completion to the successor agency, within five business days, once the following conditions have been met and verified:
The successor agency has paid the full amount as determined during the due diligence reviews and the county auditor-controller has reported those payments to DOF;
The successor agency has paid the full amount as determined during the July True-up process; or,
The successor agency has paid the full amount upon a final judicial determination of the amounts due and confirmation that those amounts have been paid by the county auditor-controller.
Allows the successor agency, upon receiving the finding of completion, to:
Retain dissolved RDA assets;
Place loan agreements between the former RDA and sponsoring entity on the ROPS, as an enforceable obligation, provided the oversight board makes a finding that the loan was for legitimate redevelopment purposes; and,
Utilize proceeds derived from bonds issued prior to January 1, 2011, in a manner consistent with the original bond covenants.
Requires, after DOF issues a finding of completion, the 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, and requires the report to be submitted to the oversight board and DOF for approval no later than six months following the issuance to the successor agency of the finding of completion.
Limits property tax to 1% except for specific bonded debt, pursuant to the California Constitution.
FISCAL EFFECT: Unknown.
COMMENTS:
Background: Under redevelopment law, RDAs created project areas that captured incremental property tax growth within the project areas. RDAs collected the increase in property tax that would otherwise have gone to cities, counties, special districts, and schools. To alleviate the fiscal burden of redevelopment, RDAs entered into pass through payments with other local taxing entities out of tax increment it collected. Under RDA dissolution, RDAs no longer pass on the tax increment growth to pay pass through agreements. This is because property tax increment is no longer allocated to RDAs. Instead, a county auditor-controller deposits former RDA property tax increment, including tax increment into a trust fund. After deducting a share of the tax increment for its administrative cost, the auditor-controller uses the revenues deposited into the trust fund to pay the following 1) pass through payments, 2) enforceable obligations of the RDA, and 3) successor agencies administrative costs. Remaining revenues are then distributed to the other local governments whose jurisdiction overlaps with the former RDA based on each local government's share of the 1% property tax.
In the 1960s, the voters of San Bernardino County approved a tax increase to fund State Water Projects in the county. After the creation of redevelopment, the Valley Municipal Water District (Valley District) entered into pass through agreements with the RDAs to receive in some cases a portion and in other cases all the property taxes they would have received pre-redevelopment.
According to the sponsor, Valley District had 23 negotiated agreements with ten RDAs for project areas throughout its service area. Although Valley District is receiving a portion of the payment, Valley District indicates that it is not receiving its entire pass through payment and is entitled to an additional $10 million which is being distributed by the San Bernardino county-auditor to other taxing entities out of the residual balance remaining after all the obligations of the RDA are paid.
This bill would authorize a city or county that levies a property tax rate, approved by the voters of a city or county to make payments in support of a State Water Project and levied in addition to the general property tax rate, to make a request to an oversight board to prohibit revenues derived from that property tax rate from being deposited into a Redevelopment Property Tax Fund. This bill would authorize an oversight board to deny this request based on substantial evidence that a former RDA made a pledge of revenues that specifically included revenues derived from the imposition of that property tax rate. This bill, for the 2015-16 fiscal year and each fiscal year thereafter, except to the extent an oversight board denies a request, would prohibit any revenues derived from the imposition of that property tax rate from being allocated to an RPTTF, and would, instead, require these revenues to be allocated to, and when collected to be paid into, the fund of the city or county whose voters approved the tax.
This
bill would require all allocations of revenues derived from the
imposition of that property tax rate made by any county
auditor-controller prior to an unspecified date to be deemed correct,
and would prohibit any city, county, county auditor-controller,
successor agency, or affected taxing entity from being subject
to any claim, as specified. This bill would require, to
the extent that revenues derived from
the imposition of a property tax rate, approved by the voters of a
city or county to make payments in support of State Water Projects
and levied in addition to the general property tax rate,
are
deposited into an RPTTF, the county-auditor controller to allocate
moneys from each RPTTF to a city or county that levies a property tax
as so described after certain other allocations have been made.
Purpose of this bill: According to the author, "AB 654 would remedy the situation in which the revenues derived from the voter-approved property tax overrides are being misallocated in the course of the RDA dissolution process in the County of San Bernardino. Currently, the San Bernardino County auditor-controller is allocating the residual balances from each former RPTTF to taxing agencies based on each agency's share of the 1% county general tax levy without taking into account any specific debt service override tax including Valley District. This results in Valley District debt service tax override proceeds that are not needed for payment of approved former RDA expenses to be allocated out to all taxing entities ignoring that a certain portion of that residual balance was derived directly from Valley District's tax override rate.
Staff comments: Committee staff is not clear how many State Water Projects there are in the state that have pass through agreements with former RDAs and could qualify for additional tax revenues under this bill. The sponsor has indicated that the pass through agreements it had with RDAs in San Bernardino County are unique. The committee also may wish to consider that by prioritizing Valley District and potentially other unknown State Water Projects to receive more property taxes from a RPTTF than is specified by their pass through agreements, other taxing entities will not be receiving as much in residual receipts. Those property taxes could go toward the city and county to pay for services and in some cases cities have set up "boomerang funds" to direct property taxes toward affordable housing activities.
Future amendments: The author needs to add a date by which a county auditor-controller must deem as correct the allocation of revenues derived from the imposition of the State Water Project property tax rate. The author is aware this needs to be addressed and plans to amend the bill to add the date July 1, 2015 in the next committee.
Double-referred: This bill was double referred to the Committee on Local Government, where it will be heard should it pass out of this committee.
REGISTERED SUPPORT / OPPOSITION:
Support
San Bernardino Valley Municipal Water District (sponsor)
East Valley Water District
Opposition
None on file.
Analysis Prepared by: Lisa Engel / H. & C.D. / (916) 319-2085
Discussed in Hearing
6MIN
Assembly Standing Committee on Housing and Community Development
Bill Author
Bill Co-Author(s):
