AB 1598: Affordable housing authorities.
- Session Year: 2017-2018
- House: Assembly
- Latest Version Date: 2017-10-13
Existing law authorizes certain local agencies to form a community revitalization authority (authority) within a community revitalization and investment area, as defined, to carry out provisions of the Community Redevelopment Law in that area for purposes related to, among other things, infrastructure, affordable housing, and economic revitalization. Existing law provides for the financing of these activities by, among other things, the issuance of bonds serviced by property tax increment revenues, and requires the authority to adopt a community revitalization and investment plan for the community revitalization and investment area that includes elements describing and governing revitalization activities. Existing law requires a community revitalization and investment plan to include a 30-year limit for establishing loans, advances, and indebtedness by the authority.
This bill would authorize a city, county, or city and county to adopt a resolution creating an affordable housing authority with power limited to providing low- and moderate-income housing and affordable workforce housing, as defined, funded through a low- and moderate-income housing fund, as specified. The bill would prohibit certain local government entities from participating in the authority. The bill would authorize an authority created pursuant to those provisions to have boundaries that are identical to the boundaries of the city, county, or city and county that created the authority. The bill would require the authority to adopt, after holding a noticed public hearing, an affordable housing investment plan that includes, among other things, an affordable housing program. The bill would require an authority created pursuant to these provisions to include a 45-year limit for establishing loans, advances, and indebtedness by the authority. The bill would authorize specified local entities to adopt a resolution to provide property tax increment revenues to the authority. The bill would also authorize specified local entities to adopt a resolution allocating other tax revenues to the authority, subject to certain requirements. The bill would provide for the financing of the activities of the authority by, among other things, the issuance of bonds serviced by funds received pursuant to those property tax increment revenues or other tax revenues allocated to the authority.
Existing law authorizes certain local agencies to form a community revitalization authority (authority) within a community revitalization and investment area, as defined, to carry out provisions of the Community Redevelopment Law in that area for purposes related to, among other things, infrastructure, affordable housing, and economic revitalization. Existing law provides for the financing of these activities by, among other things, the issuance of bonds serviced by property tax increment revenues, and requires the authority to adopt a community revitalization and investment plan for the community revitalization and investment area that includes elements describing and governing revitalization activities. Existing law requires a community revitalization and investment plan to include a 30-year limit for establishing loans, advances, and indebtedness by the authority.
This bill would authorize a city, county, or city and county to adopt a resolution creating an affordable housing authority with power limited to providing low- and moderate-income housing and affordable workforce housing, as defined, funded through a low- and moderate-income housing fund, as specified. The bill would prohibit certain local government entities from participating in the authority. The bill would authorize an authority created pursuant to those provisions to have boundaries that are identical to the boundaries of the city, county, or city and county that created the authority. The bill would require the authority to adopt, after holding a noticed public hearing, an affordable housing investment plan that includes, among other things, an affordable housing program. The bill would require an authority created pursuant to these provisions to include a 45-year limit for establishing loans, advances, and indebtedness by the authority. The bill would authorize specified local entities to adopt a resolution to provide property tax increment revenues to the authority. The bill would also authorize specified local entities to adopt a resolution allocating other tax revenues to the authority, subject to certain requirements. The bill would provide for the financing of the activities of the authority by, among other things, the issuance of bonds serviced by funds received pursuant to those property tax increment revenues or other tax revenues allocated to the authority.
Existing law authorizes certain local agencies to form a community revitalization authority (authority) within a community revitalization and investment area, as defined, to carry out provisions of the Community Redevelopment Law in that area for purposes related to, among other things, infrastructure, affordable housing, and economic revitalization. Existing law provides for the financing of these activities by, among other things, the issuance of bonds serviced by property tax increment revenues, and requires the authority to adopt a community revitalization and investment plan for the community revitalization and investment area that includes elements describing and governing revitalization activities. Existing law requires a community revitalization and investment plan to include a 30-year limit for establishing loans, advances, and indebtedness by the authority.
This bill would authorize a city, county, or city and county to adopt a resolution creating an affordable housing authority with power limited to providing low- and moderate-income housing and affordable workforce housing, as defined, funded through a low- and moderate-income housing fund, as specified. The bill would prohibit certain local government entities form from participating in the authority. The bill would authorize an authority created pursuant to those provisions to have boundaries that are identical to the boundaries of the city, county, or city and county that created the authority. The bill would require the authority to adopt, after holding a noticed public hearing, an affordable housing investment plan that includes, among other things, an affordable housing program. The bill would require an authority created pursuant to these provisions to include a 45-year limit for establishing loans, advances, and indebtedness by the authority. The bill would authorize specified local entities to adopt a resolution to provide property tax increment revenues to the authority. The bill would also authorize specified local entities to adopt a resolution allocating other tax revenues to the authority, subject to certain requirements. The bill would provide for the financing of the activities of the authority by, among other things, the issuance of bonds serviced by funds received pursuant to those property tax increment revenues or other tax revenues allocated to the authority.
Existing law authorizes certain local agencies to form a community revitalization authority (authority) within a community revitalization and investment area, as defined, to carry out provisions of the Community Redevelopment Law in that area for purposes related to, among other things, infrastructure, affordable housing, and economic revitalization. Existing law provides for the financing of these activities by, among other things, the issuance of bonds serviced by property tax increment revenues, and requires the authority to adopt a community revitalization and investment plan for the community revitalization and investment area that includes elements describing and governing revitalization activities. Existing law requires a community revitalization and investment plan to include a 30-year limit for establishing loans, advances, and indebtedness by the authority.
This bill would authorize a city, county, or city and county to adopt a resolution creating an affordable housing authority with power limited to providing low- and moderate-income housing and affordable workforce housing, as defined, funded through a low- and moderate-income housing fund, as specified. The bill would prohibit certain local government entities form participating in the authority. The bill would authorize an authority created pursuant to those provisions to have boundaries that are identical to the boundaries of the city, county, or city and county that created the authority. The bill would require the authority to adopt, after holding a noticed public hearing, an affordable housing investment plan that includes, among other things, an affordable housing program. The bill would require an authority created pursuant to these provisions to include a 45-year limit for establishing loans, advances, and indebtedness by the authority. The bill would authorize specified local entities to adopt a resolution to provide property tax increment revenues to the authority. The bill would also authorize specified local entities to adopt a resolution allocating other tax revenues to the authority, subject to certain requirements. The bill would provide for the financing of the activities of the authority by, among other things, the issuance of bonds serviced by funds received pursuant to those property tax increment revenues or other tax revenues allocated to the authority.
Existing law authorizes certain local agencies to form a community revitalization authority (authority) within a community revitalization and investment area, as defined, to carry out provisions of the Community Redevelopment Law in that area for purposes related to, among other things, infrastructure, affordable housing, and economic revitalization. Existing law provides for the financing of these activities by, among other things, the issuance of bonds serviced by property tax increment revenues, and requires the authority to adopt a community revitalization and investment plan for the community revitalization and investment area that includes elements describing and governing revitalization activities. Existing law requires a community revitalization and investment plan to include a 30-year limit for establishing loans, advances, and indebtedness by the authority.
This bill would authorize a city, county, or city and county to adopt a resolution creating an affordable housing authority with power limited to providing low- and moderate-income housing and affordable workforce housing, as defined, funded through a low- and moderate-income housing fund, as specified. The bill would prohibit certain local government entities form participating in the authority. The bill would authorize an authority created pursuant to those provisions to have boundaries that are identical to the boundaries of the city, county, or city and county that created the authority. The bill would require the authority to adopt, after holding a noticed public hearing, an affordable housing investment plan that includes, among other things, an affordable housing program. The bill would require an authority created pursuant to these provisions to include a 45-year limit for establishing loans, advances, and indebtedness by the authority. The bill would authorize specified local entities to adopt a resolution to provide property tax increment revenues to the authority. The bill would also authorize specified local entities to adopt a resolution allocating other tax revenues to the authority, subject to certain requirements. The bill would provide for the financing of the activities of the authority by, among other things, the issuance of bonds serviced by funds received pursuant to those property tax increment revenues or other tax revenues allocated to the authority.
Existing law authorizes certain local agencies to form a community revitalization authority (authority) within a community revitalization and investment area, as defined, to carry out provisions of the Community Redevelopment Law in that area for purposes related to, among other things, infrastructure, affordable housing, and economic revitalization. Existing law provides for the financing of these activities by, among other things, the issuance of bonds serviced by property tax increment revenues, and requires the authority to adopt a community revitalization and investment plan for the community revitalization and investment area that includes elements describing and governing revitalization activities. Existing law requires a community revitalization and investment plan to include a 30-year limit for establishing loans, advances, and indebtedness by the authority.
This bill would authorize a city, county, or city and county to adopt a resolution creating an affordable housing authority with power limited to providing low- and moderate-income housing and affordable workforce housing, as defined, funded through a low- and moderate-income housing fund, as specified. The bill would prohibit certain local government entities form participating in the authority. The bill would authorize an authority created pursuant to those provisions to have boundaries that are identical to the boundaries of the city, county, or city and county that created the authority. The bill would require the authority to adopt, after holding a noticed public hearing, an affordable housing investment plan that includes, among other things, an affordable housing program. The bill would require an authority created pursuant to these provisions to include a 45-year limit for establishing loans, advances, and indebtedness by the authority. The bill would authorize specified local entities to adopt a resolution to provide tax increment revenues to the authority. The bill would also authorize specified local entities to adopt a resolution allocating other tax revenues to the authority, subject to certain requirements. The bill would provide for the financing of the activities of the authority by, among other things, the issuance of bonds serviced by funds received pursuant to those tax increment revenues or other tax revenues allocated to the authority.
Existing law authorizes certain local agencies to form a community revitalization authority (authority) within a community revitalization and investment area, as defined, to carry out provisions of the Community Redevelopment Law in that area for purposes related to, among other things, infrastructure, affordable housing, and economic revitalization. Existing law provides for the financing of these activities by, among other things, the issuance of bonds serviced by property tax increment revenues, and requires the authority to adopt a community revitalization and investment plan for the community revitalization and investment area that includes elements describing and governing revitalization activities. Existing law requires a community revitalization and investment plan to include a 30-year limit for establishing loans, advances, and indebtedness by the authority.
This bill would authorize a city, county, or city and county to adopt a resolution creating an affordable housing authority with power limited to providing low- and moderate-income housing funded through a low- and moderate-income housing fund, as specified. The bill would prohibit certain local government entities form participating in the authority. The bill would authorize an authority created pursuant to those provisions to have boundaries that are identical to the boundaries of the city, county, or city and county that created the authority. The bill would require the authority to adopt, after holding a noticed public hearing, an affordable housing investment plan that includes, among other things, an affordable housing program. The bill would require an authority created pursuant to these provisions to include a 45-year limit for establishing loans, advances, and indebtedness by the authority. The bill would authorize specified local entities to adopt a resolution to provide tax increment revenues to the authority. The bill would also authorize specified local entities to adopt a resolution allocating other tax revenues to the authority, subject to certain requirements. The bill would provide for the financing of the activities of the authority by, among other things, the issuance of bonds serviced by funds received pursuant to those tax increment revenues or other tax revenues allocated to the authority.
Existing law authorizes certain local agencies to form a community revitalization authority (authority) within a community revitalization and investment area, as defined, to carry out provisions of the Community Redevelopment Law in that area for purposes related to, among other things, infrastructure, affordable housing, and economic revitalization. Existing law provides for the financing of these activities by, among other things, the issuance of bonds serviced by property tax increment revenues, and requires the authority to adopt a community revitalization and investment plan for the community revitalization and investment area that includes elements describing and governing revitalization activities. Existing law requires a community revitalization and investment plan to include a 30-year limit for establishing loans, advances, and indebtedness by the authority.
This bill would authorize a city, county, or city and county to adopt a resolution creating an affordable housing authority with power limited to providing low- and moderate-income housing funded through a low- and moderate-income housing fund, as specified. The bill would prohibit certain local government entities form participating in the authority. The bill would authorize an authority created pursuant to those provisions to have boundaries that are identical to the boundaries of the city, county, or city and county that created the authority. The bill would require the authority to adopt adopt, after holding a noticed public hearing, an affordable housing investment plan that includes, among other things, an affordable housing program. The bill would require an authority created pursuant to these provisions to include a 45-year limit for establishing loans, advances, and indebtedness by the authority. The bill would authorize an authority created pursuant to these provisions to provide for the receipt and use of any increase of the total receipts of local sales and use tax or transactions and use tax from one year to the next collected by a consenting local agency and attributable to the territory of the authority, and specified local entities to adopt a resolution to provide tax increment revenues to the authority. The bill would also authorize specified local entities to adopt a resolution allocating other tax revenues to the authority, subject to certain requirements. The bill would provide for the financing of the activities of the authority by, among other things, the issuance of bonds serviced by funds received pursuant to those sale tax revenues and property tax increment revenues. revenues or other tax revenues allocated to the authority.
Existing law authorizes certain local agencies to form a community revitalization authority (authority) within a community revitalization and investment area, as defined, to carry out provisions of the Community Redevelopment Law in that area for purposes related to, among other things, infrastructure, affordable housing, and economic revitalization. Existing law provides for the financing of these activities by, among other things, the issuance of bonds serviced by property tax increment revenues, and requires the authority to adopt a community revitalization and investment plan for the community revitalization and investment area that includes elements describing and governing revitalization activities. Existing law requires a community revitalization and investment plan to include a 30-year limit for establishing loans, advances, and indebtedness by the authority.
This bill would authorize a city, county, or city and county to adopt a resolution creating an affordable housing authority with power limited to providing low- and moderate-income housing and with funded through a low- and moderate-income housing fund, as specified. The bill would authorize an authority created pursuant to those provisions to have boundaries that are identical to the boundaries of the city, county, or city and county that created the authority. The bill would require the community revitalization and authority to adopt an affordable housing investment plan for an authority created pursuant to these provisions to include that includes, among other things, an affordable housing program. The bill would require an authority created pursuant to these provisions to include a 45-year limit for establishing loans, advances, and indebtedness by the authority. The bill would authorize an authority created pursuant to these provisions to provide for the receipt and use of any increase of the total receipts of local sales and use tax or transactions and use tax from one year to the next collected by a consenting local agency and attributable to the territory of the authority. authority, and would provide for the financing of the activities of the authority by, among other things, the issuance of bonds serviced by funds received pursuant to those sale tax revenues and property tax increment revenues.
Existing law authorizes certain local agencies to form a community revitalization authority (authority) within a community revitalization and investment area, as defined, to carry out provisions of the Community Redevelopment Law in that area for purposes related to, among other things, infrastructure, affordable housing, and economic revitalization. Existing law provides for the financing of these activities by, among other things, the issuance of bonds serviced by property tax increment revenues, and requires the authority to adopt a community revitalization and investment plan for the community revitalization and investment area that includes elements describing and governing revitalization activities. Existing law requires a community revitalization and investment plan to include a 30-year limit for establishing loans, advances, and indebtedness by the authority.
This bill would authorize a city, county, or city and county to adopt a resolution creating an authority with power limited to providing low- and moderate-income housing and with boundaries that are identical to the boundaries of the city, county, or city and county that created the authority. The bill would require the community revitalization and investment plan for an authority created pursuant to these provisions to include a 45-year limit for establishing loans, advances, and indebtedness by the authority. The bill would authorize an authority created pursuant to these provisions to provide for the receipt and use of any increase of the total receipts of local sales and use tax or transactions and use tax from one year to the next collected by a consenting local agency and attributable to the territory of the authority.
For purposes of this division, the following terms have the following meanings:
(a)Affordable workforce housing means housing with an affordable housing cost, as defined in Section 50052.5 of the Health and Safety Code, or affordable rent, as defined in Section 50053 of the Health and Safety Code, for households whose gross income does not exceed 120 percent of the area median income.
(b)Authority means an affordable housing authority created pursuant to this division.
(c)Consenting local agency means a local agency that has adopted a resolution of its governing body consenting to the affordable housing investment plan.
(d)Plan means an affordable housing investment plan adopted pursuant to Section 62252. The plan shall be deemed to be the plan described in Section 16 of Article XVI of the California Constitution.
(e)Real property means any of the following:
(1)Land, including land under water and waterfront property.
(2)Buildings, structures, fixtures, and improvements on the land.
(3)Any property appurtenant to or used in connection with the land.
(4)Every estate, interest, privilege, easement, franchise, and right in land, including rights-of-way, terms for years, and liens, charges, or encumbrances by way of judgment, mortgage, or otherwise and the indebtedness secured by those liens.
62251.(a)A city, county, or city and county may adopt a resolution creating an affordable housing authority that shall be limited to providing low- and moderate-income housing and affordable workforce housing pursuant to this division. An authority created pursuant to this division is a public body, corporate and politic. The authority shall be deemed to be the agency described in subdivision (b) of Section 16 of Article XVI of the California Constitution for purposes of receiving property tax increment revenues.
(b)(1)A school entity, as defined in subdivision (f) of Section 95 of the Revenue and Taxation Code, may not participate in an authority created pursuant to this section.
(2)A successor agency, as defined in subdivision (j) of Section 34171 of the Health and Safety Code, may not participate in an authority created pursuant to this part, and an entity created pursuant to this part shall not receive any portion of the property tax revenues or other moneys distributed pursuant to Section 34188 of the Health and Safety Code.
(3)An authority formed by a city or county that created a redevelopment agency that was dissolved pursuant to Part 1.85 (commencing with Section 34170) of Division 24 of the Health and Safety Code shall not become effective until the successor agency or designated local authority for the former redevelopment agency has adopted findings of fact stating all of the following:
(A)The agency has received a finding of completion from the Department of Finance pursuant to Section 34179.7 of the Health and Safety Code.
(B)Former redevelopment agency assets that are the subject of litigation against the state, where the city or county or its successor agency or designated local authority are a named plaintiff, have not been or will not be used to benefit any efforts of an authority formed under this part unless the litigation has been resolved by entry of a final judgment by any court of competent jurisdiction and any appeals have been exhausted.
(C)The agency has complied with all orders of the Controller pursuant to Section 34167.5 of the Health and Safety Code.
(c)The governing board of an authority created pursuant to this division shall be an odd number of members with at least five or seven members in total, as follows:
(1)(A)At least three members of the city council or the board of supervisors appointed by the city council or the board of supervisors.
(B)In the case of an authority created by a city and county authority jointly, at least three members of the city council and three members of the board of supervisors.
(2)At least one member of the public who lives or works within the boundaries of the city or county that created the authority.
(d)The boundaries of an authority created pursuant to this division may be identical to the boundaries of the city or county that created the authority.
62252.(a)An authority created pursuant to this division shall, by resolution, create a Low and Moderate Income Housing Fund and adopt an affordable housing investment plan that may include either or both of the following:
(1)A provision for the receipt of property tax increment funds generated within the area.
(2)A provision for the receipt of any tax revenues allocated to the authority pursuant to subdivision (b) of Section 62253.
(b)The plan shall include each of the following elements:
(1)A statement of the principal goals and objectives of the plan.
(2)An affordable housing program that describes how the authority will fulfill its objective and if duties and activities will be assigned to a city or county housing department or public housing authority.
(3)The estimated amount that will be deposited in the Low and Moderate Income Housing Fund during each of the next five years.
(4)Estimates of the number of new, rehabilitated, or price restricted residential units to be assisted during each of the five years and estimates of the expenditures of moneys from the Low and Moderate Income Housing Fund during each of the five years.
(5)A description of how the program will implement the requirements for expenditures of funds in the Low and Moderate Income Housing Fund over a 10-year period at various income levels.
(6)Estimates of the number of units, if any, to be developed by the authority for very low, low-, and moderate-income households during the next five years.
(7)A fiscal analysis setting forth the projected receipt of revenue and projected expenses over a five-year planning horizon, including the potential issuance of bonds backed by property tax increment revenues pursuant to subdivision (a) of Section 62253 during the term of the plan. Bonds shall be issued in conformity with Article 4.5 (commencing with Section 53506) and Article 5 (commencing with Section 53510) of Chapter 3 of Part 1 of Division 2 of Title 5.
(8)Time limits as follows:
(A)Forty-five years for the establishing of loans, advances, and indebtedness.
(B)Forty-five years for repayment of all of the authoritys debts and obligations, and fulfilling all of the authoritys housing obligations. The plan shall specify that an authority shall dissolve as a legal entity in no more than 45 years, and that no further taxes shall be allocated to the authority thereafter. Nothing in this subparagraph shall be interpreted to prohibit an authority from refinancing outstanding debt solely to reduce interest costs.
(9)A feasible method or plan for relocation of families and persons to be temporarily or permanently displaced from housing facilities in the plan area. The method or plan shall be consistent with the requirements of Section 62256.
(c)The authority shall hold a public hearing before adopting an affordable housing investment plan. The authority shall provide notice of that hearing in accordance with Section 6062. The authority shall consider any comments made on the plan at that hearing before adopting the plan.
62253.(a)At any time before or after adoption of the plan, any city, county, or special district, other than a school entity as defined in subdivision (n) of Section 95 of the Revenue and Taxation Code or a successor agency as defined in subdivision (j) of Section 34171, that receives ad valorem property taxes from property located within an area may adopt a resolution directing the county auditor-controller to allocate its share of property tax increment funds within the area covered by the plan to the authority. The resolution adopted pursuant to this subdivision may direct the county auditor-controller to allocate less than the full amount of the property tax increment, and to establish a maximum amount of time in years that the allocation takes place. A resolution adopted pursuant to this section for an affordable housing authority may be repealed and be of no further effect by giving the county auditor-controller 90 days notice; provided, however, that the county auditor-controller shall continue to allocate to the authority the taxing entitys share of ad valorem property taxes that have been pledged to the repayment of debt issued by the authority until the debt has been fully repaid. Before adopting a resolution pursuant to this subdivision, a city, county, or special district shall approve a memorandum of understanding with the authority governing the authoritys use of property tax increment funds for administrative and overhead expenses.
(b)At any time before or after the adoption of the plan, a city, county, or special district, other than a school entity as defined in subdivision (n) of Section 95 of the Revenue and Taxation Code or a successor agency as defined in subdivision (j) of Section 34171, may adopt a resolution to allocate tax revenues of that entity to the authority, including revenues derived from local sales and use taxes imposed pursuant to the Bradley-Burns Uniform Local Sales and Use Tax Law (Part 1.5 (commencing with Section 7200) of Division 2 of the Revenue and Taxation Code) or transactions and use taxes imposed pursuant to the Transactions and Use Tax Law (Part 1.6 (commencing with Section 7251) of the Revenue and Taxation Code), provided that both of the following apply:
(1)The use of those revenues by the authority for purposes of this division is consistent with the purposes for which that tax was imposed.
(2)The boundaries of the authority are coterminous with the city or county that established the authority.
(c)A minimum of 95 percent of the allocated property tax increment revenues pursuant to subdivision (a), and allocated tax revenues pursuant to subdivision (b), shall be used to increase, improve, and preserve the communitys supply of housing for low, very low, and moderate-income households. Not more than 5 percent of allocated revenues may be used for administration.
(d)Housing funds expended by an authority shall be spent in proportion to the share of the regional housing need allocated to the city, county, or city and county for each income category pursuant to Section 65584 for low, very low, and moderate-income housing.
62254.An authority may do all of the following:
(a)Provide for low- and moderate-income housing and affordable workforce housing in accordance with this division.
(b)Remedy or remove a release of hazardous substances pursuant to the Polanco Redevelopment Act (Article 12.5 (commencing with Section 33459) of Chapter 4 of Part 1 of Division 24 of the Health and Safety Code) or Chapter 6.10 (commencing with Section 25403) of Division 20 of the Health and Safety Code.
(c)Provide for seismic retrofits of existing buildings in accordance with all applicable laws and regulations.
(d)Acquire and transfer real property in accordance with Section 62260. The authority shall retain controls and establish restrictions or covenants running with the land sold or leased for private use for the periods of time and under the conditions as provided in the plan. The establishment of these controls is a public purpose under this division.
(e)Issue bonds in conformity with Article 4.5 (commencing with Section 53506) and Article 5 (commencing with Section 53510) of Chapter 3 of Part 1 of Division 2 of Title 5.
(f)(1)Borrow money, receive grants, or accept financial or other assistance or investment from the state or the federal government or any other public agency or private lending institution for any project within its area of operation, and comply with any conditions of a loan or grant. An authority may qualify for funding as a disadvantaged community pursuant to Section 79505.5 of the Water Code or as defined by Section 56033.5. An authority may also enter into an agreement with a qualified community development entity, as defined by Section 45D(c) of the Internal Revenue Code, to coordinate investments of funds derived from the New Markets Tax Credit with those of the authority in instances where coordination offers opportunities for greater efficiency of investments to improve conditions described in subdivisions (c) and (d) within the territorial jurisdiction of the authority.
(2)Receive funds allocated to it pursuant to a resolution adopted by a city, county, or special district to transfer these funds from a source described in subdivision (d), (e), or (f) of Section 53398.75, subject to any requirements upon, or imposed by, the city, county, or special district as to the use of these funds.
(g)Adopt an affordable housing plan pursuant to Section 62252.
(h)Make loans or grants for owners or tenants to improve, rehabilitate, or retrofit buildings or structures within the plan area.
(i)Construct foundations, platforms, and other like structural forms necessary for the provision or utilization of air rights sites for buildings to be used for purposes of providing affordable housing pursuant to this division.
62255.Every five years, beginning in the calendar year in which the authority has allocated a cumulative total of more than one million dollars ($1,000,000) in property tax increment revenues pursuant to subdivision (a) of Section 62253 or other revenues pursuant to subdivision (b) of Section 62253, including any proceeds of a debt issuance, the authority shall contract for an independent audit conducted in accordance with generally accepted governmental auditing standards.
62256.(a)An authority shall prepare a feasible method or plan for relocation of any families and persons to be temporarily or permanently displaced from housing facilities in the area affected by the affordable housing investment plan. The method or plan adopted pursuant to this section shall be incorporated into the affordable housing investment plan pursuant to subdivision (b) of Section 62252.
(b)The city, county, or city and county that created the authority shall ensure that the method or plan of the authority for the relocation of families or single persons to be displaced by a rehabilitation or retrofitting project within the affordable housing investment plan area shall provide that no persons or families of low and moderate income shall be displaced unless and until there is a suitable housing unit available and ready for occupancy by the displaced person or family at rents comparable to those at the time of their displacement and that all other requirements of Chapter 16 (commencing with Section 7260) of Division 7 of Title 1 of the Government Code are met. The housing units shall be suitable to the needs of those displaced persons or families and must be decent, safe, sanitary, and otherwise standard dwellings. The authority shall not displace the person or family until the housing units are available and ready for occupancy.
(c)The authority shall require in the recorded covenants for those units that the housing be made available to the persons and families of low or moderate income displaced by a rehabilitation or retrofitting project. Those persons and families shall be given priority in renting or buying those units in advance of marketing the units to the general public. Failure to give that priority shall not affect the validity of title to real property; however, a unit may not be counted as a replacement or production unit in the event of noncompliance with this provision. The authority shall keep a list of persons and families of low and moderate income displaced by the rehabilitation or retrofitting project who are to be given priority, and may establish reasonable rules for determining the order or priority on the list. The list shall be provided to the owner of those properties at or before any certificate of occupancy is issued.
(d)If insufficient suitable housing units are available in the affordable housing investment plan area for low- and moderate-income persons and families to be displaced from a rehabilitation or retrofitting project, the city council or board of supervisors that created the authority shall assure that sufficient land be made available within its territorial jurisdiction for suitable housing for rental or purchase by low- and moderate-income persons and families. If insufficient suitable housing units are available in the community for use by persons and families of low and moderate income displaced by the rehabilitation or retrofitting project, the authority may, to the extent of that deficiency, direct or cause the development, rehabilitation, or construction of housing units within the community, both inside and outside of the affordable housing investment plan area.
(e)Permanent housing facilities shall be made available within two years from the time occupants are displaced and pending the development of those facilities there will be available to those displaced occupants adequate temporary housing facilities at rents comparable to the units from which the displaced occupants were displaced.
(f)(1)Whenever dwelling units housing persons and families of low or moderate income are destroyed or removed from the low- and moderate-income housing market as part of a rehabilitation or retrofitting project that is subject to a written agreement with the authority or where financial assistance has been provided by the authority, the authority shall, within two years of the destruction or removal, rehabilitate, develop, or construct, or cause to be rehabilitated, developed, or constructed, for rental or sale to persons and families of low or moderate income, an equal number of replacement dwelling units that have an equal or greater number of bedrooms as those destroyed or removed units at affordable housing costs within the territorial jurisdiction of the authority. One hundred percent of the replacement dwelling units shall be available at an affordable housing cost to persons in the same or a lower income category (extremely low, low, very low, or moderate), as the persons displaced from those destroyed or removed units.
(2)The authority shall require all replacement dwelling units and other dwelling units rehabilitated, retrofitted, developed, constructed, or price restricted to remain available at affordable housing cost to, and occupied by, persons and families of extremely low income, low-income, moderate-income, and very low income households, respectively, for not less than 55 years for rental units or 45 years for owner-occupied units.
(3)Notwithstanding subdivision (a), the authority may replace, destroy, or remove dwelling units with a fewer number of replacement dwelling units if the replacement dwelling units meet both of the following criteria:
(A)The total number of bedrooms in the replacement dwelling units equals or exceeds the number of bedrooms in the destroyed or removed units. Destroyed or removed units having one or no bedroom are deemed for this purpose to have one bedroom.
(B)The replacement units are affordable to, and occupied by, the same income level of households as the destroyed or removed units.
(g)(1)An authority shall provide relocation assistance and shall make all of the payments required by Chapter 16 (commencing with Section 7260) of Division 7 of Title 1, including the making of those payments financed by the federal government.
(2)This subdivision shall not be construed to limit any other authority which an authority may have to make other relocation assistance payments, or to make any relocation assistance payment in an amount which exceeds the maximum amount for that payment authorized by Chapter 16 (commencing with Section 7260) of Division 7 of Title 1.
62257.An authority shall receive a priority for assistance in housing programs administered by the Department of Housing and Community Development, and other state agencies and departments.
62258.An authority may transfer its housing responsibilities to a housing authority or city or county housing department if it determines that combining funding streams will reduce administrative costs or expedites the construction of affordable housing.
62259.(a)All housing assisted by an authority created pursuant to this division shall remain affordable for at least 55 years for rental units and 45 years for owner-occupied units.
(b)The authority shall execute an enforceable and verifiable agreement with a public agency, a recorded deed restriction, or other legal document that restricts the projects usage and that provides that the units designated for use by lower income households are continuously available to or occupied by lower income households at rents that do not exceed those prescribed by Section 50053 of the Health and Safety Code, or, to the extent that the terms of federal, state, or local financing or financial assistance conflicts with Section 50053 of the Health and Safety Code, rents that do not exceed those prescribed by the terms of the financing or financial assistance.
62260.Within the area of the authority, an authority may:
(a)Purchase, lease, obtain an option upon, acquire by gift, grant, bequest, devise, or otherwise, any real or personal property, any interest in property, and any improvements on it, including repurchase of developed property previously owned by the authority. The authority shall obtain an appraisal from a qualified independent appraiser to determine the fair market value of property before the authority acquires or purchases real property.
(b)Accept, at the request of the legislative body of the community, a conveyance of real property, located either within or outside the plan area, owned by a public entity and declared surplus by the public entity, or owned by a private entity. The authority may dispose of that property to private persons or to public or private entities, by sale or long-term lease for development. All or any part of the funds derived from the sale or lease of that property may, at the discretion of the legislative body of the community, be paid to the community, or to the public entity from which any of that property was acquired.
(c)Sell, lease, grant, or donate real property owned or acquired by the authority in a plan area to a housing authority or to any public agency for public housing projects.
(d)Offer for resale property acquired by an authority for rehabilitation and resale within one year after completion of rehabilitation. Properties held by the authority in excess of a one-year period shall be listed in the authoritys annual report with information conveying the reasons that property remains unsold and indicating plans for its disposition.
62261.(a)The authority shall retain controls and establish restrictions or covenants running with land sold or leased for private use for those periods of time and under those conditions as are provided in the plan. The establishment of those controls is a public purpose under this division.
(b)An authority shall obligate lessees or purchasers of property acquired in an affordable housing project to:
(1)Use the property for the purpose designated in the affordable housing plan.
(2)Begin the project within a period of time which the authority fixes as reasonable.
(3)Comply with the covenants, conditions, or restrictions that the authority deems necessary to prevent speculation or excess profittaking in undeveloped land, including right of reverter to the authority. Covenants, conditions, and restrictions imposed by an authority may provide for the reasonable protection of lenders.
(4)Comply with other conditions that the authority deems necessary to carry out the purposes of this division.
62262.An authority created pursuant to this division shall be a local public agency subject to the Ralph M. Brown Act (Chapter 9 (commencing with Section 54950) of Part 1 of Division 2 of Title 5), the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1), and the Political Reform Act of 1974 (Title 9 (commencing with Section 81000)).
SEC. 2.The Legislature finds and declares that the allocation of revenues derived from a sales and use tax or a transactions and use tax to an affordable housing authority pursuant to Division 5 (commencing with Section 62250) of Title 6 of the Government Code, as added by this act, is not subject to Section 29 of Article XIII of the California Constitution because an authority is not a city, county, or city and county within the meaning of that provision, but is rather a separate political entity as described in subdivision (a) of Section 62251 of the Government Code, as added by this act.
For purposes of this division, the following terms have the following meanings:
(a)Affordable workforce housing means housing with an affordable housing cost, as defined in Section 50052.5 of the Health and Safety Code, or affordable rent, as defined in Section 50053 of the Health and Safety Code, for households whose gross income does not exceed 120 percent of the area median income.
(b)Authority means an affordable housing authority created pursuant to this division.
(c)Consenting local agency means a local agency that has adopted a resolution of its governing body consenting to the affordable housing investment plan.
(d)Plan means an affordable housing investment plan adopted pursuant to Section 62252. The plan shall be deemed to be the plan described in Section 16 of Article XVI of the California Constitution.
(e)Real property means any of the following:
(1)Land, including land under water and waterfront property.
(2)Buildings, structures, fixtures, and improvements on the land.
(3)Any property appurtenant to or used in connection with the land.
(4)Every estate, interest, privilege, easement, franchise, and right in land, including rights-of-way, terms for years, and liens, charges, or encumbrances by way of judgment, mortgage, or otherwise and the indebtedness secured by those liens.
62251.(a)A city, county, or city and county may adopt a resolution creating an affordable housing authority that shall be limited to providing low- and moderate-income housing and affordable workforce housing pursuant to this division. An authority created pursuant to this division is a public body, corporate and politic. The authority shall be deemed to be the agency described in subdivision (b) of Section 16 of Article XVI of the California Constitution for purposes of receiving property tax increment revenues.
(b)(1)A school entity, as defined in subdivision (f) of Section 95 of the Revenue and Taxation Code, may not participate in an authority created pursuant to this section.
(2)A successor agency, as defined in subdivision (j) of Section 34171 of the Health and Safety Code, may not participate in an authority created pursuant to this part, and an entity created pursuant to this part shall not receive any portion of the property tax revenues or other moneys distributed pursuant to Section 34188 of the Health and Safety Code.
(3)An authority formed by a city or county that created a redevelopment agency that was dissolved pursuant to Part 1.85 (commencing with Section 34170) of Division 24 of the Health and Safety Code shall not become effective until the successor agency or designated local authority for the former redevelopment agency has adopted findings of fact stating all of the following:
(A)The agency has received a finding of completion from the Department of Finance pursuant to Section 34179.7 of the Health and Safety Code.
(B)Former redevelopment agency assets that are the subject of litigation against the state, where the city or county or its successor agency or designated local authority are a named plaintiff, have not been or will not be used to benefit any efforts of an authority formed under this part unless the litigation has been resolved by entry of a final judgment by any court of competent jurisdiction and any appeals have been exhausted.
(C)The agency has complied with all orders of the Controller pursuant to Section 34167.5 of the Health and Safety Code.
(c)The governing board of an authority created pursuant to this division shall be an odd number of members with at least five or seven members in total, as follows:
(1)(A)At least three members of the city council or the board of supervisors appointed by the city council or the board of supervisors.
(B)In the case of an authority created by a city and county authority jointly, at least three members of the city council and three members of the board of supervisors.
(2)At least one member of the public who lives or works within the boundaries of the city or county that created the authority.
(d)The boundaries of an authority created pursuant to this division may be identical to the boundaries of the city or county that created the authority.
62252.(a)An authority created pursuant to this division shall, by resolution, create a Low and Moderate Income Housing Fund and adopt an affordable housing investment plan that may include either or both of the following:
(1)A provision for the receipt of property tax increment funds generated within the area.
(2)A provision for the receipt of any tax revenues allocated to the authority pursuant to subdivision (b) of Section 62253.
(b)The plan shall include each of the following elements:
(1)A statement of the principal goals and objectives of the plan.
(2)An affordable housing program that describes how the authority will fulfill its objective and if duties and activities will be assigned to a city or county housing department or public housing authority.
(3)The estimated amount that will be deposited in the Low and Moderate Income Housing Fund during each of the next five years.
(4)Estimates of the number of new, rehabilitated, or price restricted residential units to be assisted during each of the five years and estimates of the expenditures of moneys from the Low and Moderate Income Housing Fund during each of the five years.
(5)A description of how the program will implement the requirements for expenditures of funds in the Low and Moderate Income Housing Fund over a 10-year period at various income levels.
(6)Estimates of the number of units, if any, to be developed by the authority for very low, low-, and moderate-income households during the next five years.
(7)A fiscal analysis setting forth the projected receipt of revenue and projected expenses over a five-year planning horizon, including the potential issuance of bonds backed by property tax increment revenues pursuant to subdivision (a) of Section 62253 during the term of the plan. Bonds shall be issued in conformity with Article 4.5 (commencing with Section 53506) and Article 5 (commencing with Section 53510) of Chapter 3 of Part 1 of Division 2 of Title 5.
(8)Time limits as follows:
(A)Forty-five years for the establishing of loans, advances, and indebtedness.
(B)Forty-five years for repayment of all of the authoritys debts and obligations, and fulfilling all of the authoritys housing obligations. The plan shall specify that an authority shall dissolve as a legal entity in no more than 45 years, and that no further taxes shall be allocated to the authority thereafter. Nothing in this subparagraph shall be interpreted to prohibit an authority from refinancing outstanding debt solely to reduce interest costs.
(9)A feasible method or plan for relocation of families and persons to be temporarily or permanently displaced from housing facilities in the plan area. The method or plan shall be consistent with the requirements of Section 62256.
(c)The authority shall hold a public hearing before adopting an affordable housing investment plan. The authority shall provide notice of that hearing in accordance with Section 6062. The authority shall consider any comments made on the plan at that hearing before adopting the plan.
62253.(a)At any time before or after adoption of the plan, any city, county, or special district, other than a school entity as defined in subdivision (n) of Section 95 of the Revenue and Taxation Code or a successor agency as defined in subdivision (j) of Section 34171, that receives ad valorem property taxes from property located within an area may adopt a resolution directing the county auditor-controller to allocate its share of property tax increment funds within the area covered by the plan to the authority. The resolution adopted pursuant to this subdivision may direct the county auditor-controller to allocate less than the full amount of the property tax increment, and to establish a maximum amount of time in years that the allocation takes place. A resolution adopted pursuant to this section for an affordable housing authority may be repealed and be of no further effect by giving the county auditor-controller 90 days notice; provided, however, that the county auditor-controller shall continue to allocate to the authority the taxing entitys share of ad valorem property taxes that have been pledged to the repayment of debt issued by the authority until the debt has been fully repaid. Before adopting a resolution pursuant to this subdivision, a city, county, or special district shall approve a memorandum of understanding with the authority governing the authoritys use of property tax increment funds for administrative and overhead expenses.
(b)At any time before or after the adoption of the plan, a city, county, or special district, other than a school entity as defined in subdivision (n) of Section 95 of the Revenue and Taxation Code or a successor agency as defined in subdivision (j) of Section 34171, may adopt a resolution to allocate tax revenues of that entity to the authority, including revenues derived from local sales and use taxes imposed pursuant to the Bradley-Burns Uniform Local Sales and Use Tax Law (Part 1.5 (commencing with Section 7200) of Division 2 of the Revenue and Taxation Code) or transactions and use taxes imposed pursuant to the Transactions and Use Tax Law (Part 1.6 (commencing with Section 7251) of the Revenue and Taxation Code), provided that both of the following apply:
(1)The use of those revenues by the authority for purposes of this division is consistent with the purposes for which that tax was imposed.
(2)The boundaries of the authority are coterminous with the city or county that established the authority.
(c)A minimum of 95 percent of the allocated property tax increment revenues pursuant to subdivision (a), and allocated tax revenues pursuant to subdivision (b), shall be used to increase, improve, and preserve the communitys supply of housing for low, very low, and moderate-income households. Not more than 5 percent of allocated revenues may be used for administration.
(d)Housing funds expended by an authority shall be spent in proportion to the share of the regional housing need allocated to the city, county, or city and county for each income category pursuant to Section 65584 for low, very low, and moderate-income housing.
62254.An authority may do all of the following:
(a)Provide for low- and moderate-income housing and affordable workforce housing in accordance with this division.
(b)Remedy or remove a release of hazardous substances pursuant to the Polanco Redevelopment Act (Article 12.5 (commencing with Section 33459) of Chapter 4 of Part 1 of Division 24 of the Health and Safety Code) or Chapter 6.10 (commencing with Section 25403) of Division 20 of the Health and Safety Code.
(c)Provide for seismic retrofits of existing buildings in accordance with all applicable laws and regulations.
(d)Acquire and transfer real property in accordance with Section 62260. The authority shall retain controls and establish restrictions or covenants running with the land sold or leased for private use for the periods of time and under the conditions as provided in the plan. The establishment of these controls is a public purpose under this division.
(e)Issue bonds in conformity with Article 4.5 (commencing with Section 53506) and Article 5 (commencing with Section 53510) of Chapter 3 of Part 1 of Division 2 of Title 5.
(f)(1)Borrow money, receive grants, or accept financial or other assistance or investment from the state or the federal government or any other public agency or private lending institution for any project within its area of operation, and comply with any conditions of a loan or grant. An authority may qualify for funding as a disadvantaged community pursuant to Section 79505.5 of the Water Code or as defined by Section 56033.5. An authority may also enter into an agreement with a qualified community development entity, as defined by Section 45D(c) of the Internal Revenue Code, to coordinate investments of funds derived from the New Markets Tax Credit with those of the authority in instances where coordination offers opportunities for greater efficiency of investments to improve conditions described in subdivisions (c) and (d) within the territorial jurisdiction of the authority.
(2)Receive funds allocated to it pursuant to a resolution adopted by a city, county, or special district to transfer these funds from a source described in subdivision (d), (e), or (f) of Section 53398.75, subject to any requirements upon, or imposed by, the city, county, or special district as to the use of these funds.
(g)Adopt an affordable housing plan pursuant to Section 62252.
(h)Make loans or grants for owners or tenants to improve, rehabilitate, or retrofit buildings or structures within the plan area.
(i)Construct foundations, platforms, and other like structural forms necessary for the provision or utilization of air rights sites for buildings to be used for purposes of providing affordable housing pursuant to this division.
62255.Every five years, beginning in the calendar year in which the authority has allocated a cumulative total of more than one million dollars ($1,000,000) in property tax increment revenues pursuant to subdivision (a) of Section 62253 or other revenues pursuant to subdivision (b) of Section 62253, including any proceeds of a debt issuance, the authority shall contract for an independent audit conducted in accordance with generally accepted governmental auditing standards.
62256.(a)An authority shall prepare a feasible method or plan for relocation of any families and persons to be temporarily or permanently displaced from housing facilities in the area affected by the affordable housing investment plan. The method or plan adopted pursuant to this section shall be incorporated into the affordable housing investment plan pursuant to subdivision (b) of Section 62252.
(b)The city, county, or city and county that created the authority shall ensure that the method or plan of the authority for the relocation of families or single persons to be displaced by a rehabilitation or retrofitting project within the affordable housing investment plan area shall provide that no persons or families of low and moderate income shall be displaced unless and until there is a suitable housing unit available and ready for occupancy by the displaced person or family at rents comparable to those at the time of their displacement and that all other requirements of Chapter 16 (commencing with Section 7260) of Division 7 of Title 1 of the Government Code are met. The housing units shall be suitable to the needs of those displaced persons or families and must be decent, safe, sanitary, and otherwise standard dwellings. The authority shall not displace the person or family until the housing units are available and ready for occupancy.
(c)The authority shall require in the recorded covenants for those units that the housing be made available to the persons and families of low or moderate income displaced by a rehabilitation or retrofitting project. Those persons and families shall be given priority in renting or buying those units in advance of marketing the units to the general public. Failure to give that priority shall not affect the validity of title to real property; however, a unit may not be counted as a replacement or production unit in the event of noncompliance with this provision. The authority shall keep a list of persons and families of low and moderate income displaced by the rehabilitation or retrofitting project who are to be given priority, and may establish reasonable rules for determining the order or priority on the list. The list shall be provided to the owner of those properties at or before any certificate of occupancy is issued.
(d)If insufficient suitable housing units are available in the affordable housing investment plan area for low- and moderate-income persons and families to be displaced from a rehabilitation or retrofitting project, the city council or board of supervisors that created the authority shall assure that sufficient land be made available within its territorial jurisdiction for suitable housing for rental or purchase by low- and moderate-income persons and families. If insufficient suitable housing units are available in the community for use by persons and families of low and moderate income displaced by the rehabilitation or retrofitting project, the authority may, to the extent of that deficiency, direct or cause the development, rehabilitation, or construction of housing units within the community, both inside and outside of the affordable housing investment plan area.
(e)Permanent housing facilities shall be made available within two years from the time occupants are displaced and pending the development of those facilities there will be available to those displaced occupants adequate temporary housing facilities at rents comparable to the units from which the displaced occupants were displaced.
(f)(1)Whenever dwelling units housing persons and families of low or moderate income are destroyed or removed from the low- and moderate-income housing market as part of a rehabilitation or retrofitting project that is subject to a written agreement with the authority or where financial assistance has been provided by the authority, the authority shall, within two years of the destruction or removal, rehabilitate, develop, or construct, or cause to be rehabilitated, developed, or constructed, for rental or sale to persons and families of low or moderate income, an equal number of replacement dwelling units that have an equal or greater number of bedrooms as those destroyed or removed units at affordable housing costs within the territorial jurisdiction of the authority. One hundred percent of the replacement dwelling units shall be available at an affordable housing cost to persons in the same or a lower income category (extremely low, low, very low, or moderate), as the persons displaced from those destroyed or removed units.
(2)The authority shall require all replacement dwelling units and other dwelling units rehabilitated, retrofitted, developed, constructed, or price restricted to remain available at affordable housing cost to, and occupied by, persons and families of extremely low income, low-income, moderate-income, and very low income households, respectively, for not less than 55 years for rental units or 45 years for owner-occupied units.
(3)Notwithstanding subdivision (a), the authority may replace, destroy, or remove dwelling units with a fewer number of replacement dwelling units if the replacement dwelling units meet both of the following criteria:
(A)The total number of bedrooms in the replacement dwelling units equals or exceeds the number of bedrooms in the destroyed or removed units. Destroyed or removed units having one or no bedroom are deemed for this purpose to have one bedroom.
(B)The replacement units are affordable to, and occupied by, the same income level of households as the destroyed or removed units.
(g)(1)An authority shall provide relocation assistance and shall make all of the payments required by Chapter 16 (commencing with Section 7260) of Division 7 of Title 1, including the making of those payments financed by the federal government.
(2)This subdivision shall not be construed to limit any other authority which an authority may have to make other relocation assistance payments, or to make any relocation assistance payment in an amount which exceeds the maximum amount for that payment authorized by Chapter 16 (commencing with Section 7260) of Division 7 of Title 1.
62257.An authority shall receive a priority for assistance in housing programs administered by the Department of Housing and Community Development, and other state agencies and departments.
62258.An authority may transfer its housing responsibilities to a housing authority or city or county housing department if it determines that combining funding streams will reduce administrative costs or expedites the construction of affordable housing.
62259.(a)All housing assisted by an authority created pursuant to this division shall remain affordable for at least 55 years for rental units and 45 years for owner-occupied units.
(b)The authority shall execute an enforceable and verifiable agreement with a public agency, a recorded deed restriction, or other legal document that restricts the projects usage and that provides that the units designated for use by lower income households are continuously available to or occupied by lower income households at rents that do not exceed those prescribed by Section 50053 of the Health and Safety Code, or, to the extent that the terms of federal, state, or local financing or financial assistance conflicts with Section 50053 of the Health and Safety Code, rents that do not exceed those prescribed by the terms of the financing or financial assistance.
62260.Within the area of the authority, an authority may:
(a)Purchase, lease, obtain an option upon, acquire by gift, grant, bequest, devise, or otherwise, any real or personal property, any interest in property, and any improvements on it, including repurchase of developed property previously owned by the authority. The authority shall obtain an appraisal from a qualified independent appraiser to determine the fair market value of property before the authority acquires or purchases real property.
(b)Accept, at the request of the legislative body of the community, a conveyance of real property, located either within or outside the plan area, owned by a public entity and declared surplus by the public entity, or owned by a private entity. The authority may dispose of that property to private persons or to public or private entities, by sale or long-term lease for development. All or any part of the funds derived from the sale or lease of that property may, at the discretion of the legislative body of the community, be paid to the community, or to the public entity from which any of that property was acquired.
(c)Sell, lease, grant, or donate real property owned or acquired by the authority in a plan area to a housing authority or to any public agency for public housing projects.
(d)Offer for resale property acquired by an authority for rehabilitation and resale within one year after completion of rehabilitation. Properties held by the authority in excess of a one-year period shall be listed in the authoritys annual report with information conveying the reasons that property remains unsold and indicating plans for its disposition.
62261.(a)The authority shall retain controls and establish restrictions or covenants running with land sold or leased for private use for those periods of time and under those conditions as are provided in the plan. The establishment of those controls is a public purpose under this division.
(b)An authority shall obligate lessees or purchasers of property acquired in an affordable housing project to:
(1)Use the property for the purpose designated in the affordable housing plan.
(2)Begin the project within a period of time which the authority fixes as reasonable.
(3)Comply with the covenants, conditions, or restrictions that the authority deems necessary to prevent speculation or excess profittaking in undeveloped land, including right of reverter to the authority. Covenants, conditions, and restrictions imposed by an authority may provide for the reasonable protection of lenders.
(4)Comply with other conditions that the authority deems necessary to carry out the purposes of this division.
62262.An authority created pursuant to this division shall be a local public agency subject to the Ralph M. Brown Act (Chapter 9 (commencing with Section 54950) of Part 1 of Division 2 of Title 5), the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1), and the Political Reform Act of 1974 (Title 9 (commencing with Section 81000)).
SEC. 2.The Legislature finds and declares that the allocation of revenues derived from a sales and use tax or a transactions and use tax to an affordable housing authority pursuant to Division 5 (commencing with Section 62250) of Title 6 of the Government Code, as added by this act, is not subject to Section 29 of Article XIII of the California Constitution because an authority is not a city, county, or city and county within the meaning of that provision, but is rather a separate political entity as described in subdivision (a) of Section 62251 of the Government Code, as added by this act.
For purposes of this division, the following terms have the following meanings:
(a)Affordable workforce housing means housing with an affordable housing cost, as defined in Section 50052.5 of the Health and Safety Code, or affordable rent, as defined in Section 50053 of the Health and Safety Code, for households whose gross income does not exceed 120 percent of the area median income.
(b)Authority means an affordable housing authority created pursuant to this division.
(c)Consenting local agency means a local agency that has adopted a resolution of its governing body consenting to the affordable housing investment plan.
(d)Plan means an affordable housing investment plan adopted pursuant to Section 62252. The plan shall be deemed to be the plan described in Section 16 of Article XVI of the California Constitution.
(e)Real property means any of the following:
(1)Land, including land under water and waterfront property.
(2)Buildings, structures, fixtures, and improvements on the land.
(3)Any property appurtenant to or used in connection with the land.
(4)Every estate, interest, privilege, easement, franchise, and right in land, including rights-of-way, terms for years, and liens, charges, or encumbrances by way of judgment, mortgage, or otherwise and the indebtedness secured by those liens.
62251.(a)A city, county, or city and county may adopt a resolution creating an affordable housing authority that shall be limited to providing low- and moderate-income housing and affordable workforce housing pursuant to this division. An authority created pursuant to this division is a public body, corporate and politic. The authority shall be deemed to be the agency described in subdivision (b) of Section 16 of Article XVI of the California Constitution for purposes of receiving property tax increment revenues.
(b)(1)A school entity, as defined in subdivision (f) of Section 95 of the Revenue and Taxation Code, may not participate in an authority created pursuant to this section.
(2)A successor agency, as defined in subdivision (j) of Section 34171 of the Health and Safety Code, may not participate in an authority created pursuant to this part, and an entity created pursuant to this part shall not receive any portion of the property tax revenues or other moneys distributed pursuant to Section 34188 of the Health and Safety Code.
(3)An authority formed by a city or county that created a redevelopment agency that was dissolved pursuant to Part 1.85 (commencing with Section 34170) of Division 24 of the Health and Safety Code shall not become effective until the successor agency or designated local authority for the former redevelopment agency has adopted findings of fact stating all of the following:
(A)The agency has received a finding of completion from the Department of Finance pursuant to Section 34179.7 of the Health and Safety Code.
(B)Former redevelopment agency assets that are the subject of litigation against the state, where the city or county or its successor agency or designated local authority are a named plaintiff, have not been or will not be used to benefit any efforts of an authority formed under this part unless the litigation has been resolved by entry of a final judgment by any court of competent jurisdiction and any appeals have been exhausted.
(C)The agency has complied with all orders of the Controller pursuant to Section 34167.5 of the Health and Safety Code.
(c)The governing board of an authority created pursuant to this division shall be an odd number of members with at least five or seven members in total, as follows:
(1)(A)At least three members of the city council or the board of supervisors appointed by the city council or the board of supervisors.
(B)In the case of an authority created by a city and county authority jointly, at least three members of the city council and three members of the board of supervisors.
(2)At least one member of the public who lives or works within the boundaries of the city or county that created the authority.
(d)The boundaries of an authority created pursuant to this division may be identical to the boundaries of the city or county that created the authority.
62252.(a)An authority created pursuant to this division shall, by resolution, create a Low and Moderate Income Housing Fund and adopt an affordable housing investment plan that may include either or both of the following:
(1)A provision for the receipt of property tax increment funds generated within the area.
(2)A provision for the receipt of any tax revenues allocated to the authority pursuant to subdivision (b) of Section 62253.
(b)The plan shall include each of the following elements:
(1)A statement of the principal goals and objectives of the plan.
(2)An affordable housing program that describes how the authority will fulfill its objective and if duties and activities will be assigned to a city or county housing department or public housing authority.
(3)The estimated amount that will be deposited in the Low and Moderate Income Housing Fund during each of the next five years.
(4)Estimates of the number of new, rehabilitated, or price restricted residential units to be assisted during each of the five years and estimates of the expenditures of moneys from the Low and Moderate Income Housing Fund during each of the five years.
(5)A description of how the program will implement the requirements for expenditures of funds in the Low and Moderate Income Housing Fund over a 10-year period at various income levels.
(6)Estimates of the number of units, if any, to be developed by the authority for very low, low-, and moderate-income households during the next five years.
(7)A fiscal analysis setting forth the projected receipt of revenue and projected expenses over a five-year planning horizon, including the potential issuance of bonds backed by property tax increment revenues pursuant to subdivision (a) of Section 62253 during the term of the plan. Bonds shall be issued in conformity with Article 4.5 (commencing with Section 53506) and Article 5 (commencing with Section 53510) of Chapter 3 of Part 1 of Division 2 of Title 5.
(8)Time limits as follows:
(A)Forty-five years for the establishing of loans, advances, and indebtedness.
(B)Forty-five years for repayment of all of the authoritys debts and obligations, and fulfilling all of the authoritys housing obligations. The plan shall specify that an authority shall dissolve as a legal entity in no more than 45 years, and that no further taxes shall be allocated to the authority thereafter. Nothing in this subparagraph shall be interpreted to prohibit an authority from refinancing outstanding debt solely to reduce interest costs.
(9)A feasible method or plan for relocation of families and persons to be temporarily or permanently displaced from housing facilities in the plan area. The method or plan shall be consistent with the requirements of Section 62256.
(c)The authority shall hold a public hearing before adopting an affordable housing investment plan. The authority shall provide notice of that hearing in accordance with Section 6062. The authority shall consider any comments made on the plan at that hearing before adopting the plan.
62253.(a)At any time before or after adoption of the plan, any city, county, or special district, other than a school entity as defined in subdivision (n) of Section 95 of the Revenue and Taxation Code or a successor agency as defined in subdivision (j) of Section 34171, that receives ad valorem property taxes from property located within an area may adopt a resolution directing the county auditor-controller to allocate its share of property tax increment funds within the area covered by the plan to the authority. The resolution adopted pursuant to this subdivision may direct the county auditor-controller to allocate less than the full amount of the property tax increment, and to establish a maximum amount of time in years that the allocation takes place. A resolution adopted pursuant to this section for an affordable housing authority may be repealed and be of no further effect by giving the county auditor-controller 90 days notice; provided, however, that the county auditor-controller shall continue to allocate to the authority the taxing entitys share of ad valorem property taxes that have been pledged to the repayment of debt issued by the authority until the debt has been fully repaid. Before adopting a resolution pursuant to this subdivision, a city, county, or special district shall approve a memorandum of understanding with the authority governing the authoritys use of property tax increment funds for administrative and overhead expenses.
(b)At any time before or after the adoption of the plan, a city, county, or special district, other than a school entity as defined in subdivision (n) of Section 95 of the Revenue and Taxation Code or a successor agency as defined in subdivision (j) of Section 34171, may adopt a resolution to allocate tax revenues of that entity to the authority, including revenues derived from local sales and use taxes imposed pursuant to the Bradley-Burns Uniform Local Sales and Use Tax Law (Part 1.5 (commencing with Section 7200) of Division 2 of the Revenue and Taxation Code) or transactions and use taxes imposed pursuant to the Transactions and Use Tax Law (Part 1.6 (commencing with Section 7251) of the Revenue and Taxation Code), provided that both of the following apply:
(1)The use of those revenues by the authority for purposes of this division is consistent with the purposes for which that tax was imposed.
(2)The boundaries of the authority are coterminous with the city or county that established the authority.
(c)A minimum of 95 percent of the allocated property tax increment revenues pursuant to subdivision (a), and allocated tax revenues pursuant to subdivision (b), shall be used to increase, improve, and preserve the communitys supply of housing for low- low, very low, and moderate-income families. households. Not more than 5 percent of allocated revenues may be used for administration.
(d)Housing funds expended by an authority shall be spent in proportion to the share of the regional housing need allocated to the city, county, or city and county for each income category pursuant to Section 65584 for low, very low, and moderate-income housing.
62254.An authority may do all of the following:
(a)Provide for low- and moderate-income housing and affordable workforce housing in accordance with this division.
(b)Remedy or remove a release of hazardous substances pursuant to the Polanco Redevelopment Act (Article 12.5 (commencing with Section 33459) of Chapter 4 of Part 1 of Division 24 of the Health and Safety Code) or Chapter 6.10 (commencing with Section 25403) of Division 20 of the Health and Safety Code.
(c)Provide for seismic retrofits of existing buildings in accordance with all applicable laws and regulations.
(d)Acquire and transfer real property in accordance with Section 62260. The authority shall retain controls and establish restrictions or covenants running with the land sold or leased for private use for the periods of time and under the conditions as provided in the plan. The establishment of these controls is a public purpose under this division.
(e)Issue bonds in conformity with Article 4.5 (commencing with Section 53506) and Article 5 (commencing with Section 53510) of Chapter 3 of Part 1 of Division 2 of Title 5.
(f)(1)Borrow money, receive grants, or accept financial or other assistance or investment from the state or the federal government or any other public agency or private lending institution for any project within its area of operation, and comply with any conditions of a loan or grant. An authority may qualify for funding as a disadvantaged community pursuant to Section 79505.5 of the Water Code or as defined by Section 56033.5. An authority may also enter into an agreement with a qualified community development entity, as defined by Section 45D(c) of the Internal Revenue Code, to coordinate investments of funds derived from the New Markets Tax Credit with those of the authority in instances where coordination offers opportunities for greater efficiency of investments to improve conditions described in subdivisions (c) and (d) within the territorial jurisdiction of the authority.
(2)Receive funds allocated to it pursuant to a resolution adopted by a city, county, or special district to transfer these funds from a source described in subdivision (d), (e), or (f) of Section 53398.75, subject to any requirements upon, or imposed by, the city, county, or special district as to the use of these funds.
(g)Adopt an affordable housing plan pursuant to Section 62252.
(h)Make loans or grants for owners or tenants to improve, rehabilitate, or retrofit buildings or structures within the plan area.
(i)Construct foundations, platforms, and other like structural forms necessary for the provision or utilization of air rights sites for buildings to be used for purposes of providing affordable housing pursuant to this division.
62255.Every five years, beginning in the calendar year in which the authority has allocated a cumulative total of more than one million dollars ($1,000,000) in property tax increment revenues pursuant to subdivision (a) of Section 62253 or other revenues pursuant to subdivision (b) of Section 62253, including any proceeds of a debt issuance, the authority shall contract for an independent audit conducted in accordance with generally accepted governmental auditing standards.
62256.(a)An authority shall prepare a feasible method or plan for relocation of any families and persons to be temporarily or permanently displaced from housing facilities in the area affected by the affordable housing investment plan. The method or plan adopted pursuant to this section shall be incorporated into the affordable housing investment plan pursuant to subdivision (b) of Section 62252.
(b)The city, county, or city and county that created the authority shall insure ensure that the method or plan of the authority for the relocation of families or single persons to be displaced by a rehabilitation or retrofitting project within the affordable housing investment plan area shall provide that no persons or families of low and moderate income shall be displaced unless and until there is a suitable housing unit available and ready for occupancy by the displaced person or family at rents comparable to those at the time of their displacement and that all other requirements of Chapter 16 (commencing with Section 7260) of Division 7 of Title 1 of the Government Code are met. The housing units shall be suitable to the needs of those displaced persons or families and must be decent, safe, sanitary, and otherwise standard dwellings. The authority shall not displace the person or family until the housing units are available and ready for occupancy.
(c)The authority shall require in the recorded covenants for those units that the housing be made available to the persons and families of low or moderate income displaced by a rehabilitation or retrofitting project. Those persons and families shall be given priority in renting or buying those units in advance of marketing the units to the general public. Failure to give that priority shall not affect the validity of title to real property; however, a unit may not be counted as a replacement or production unit in the event of noncompliance with this provision. The authority shall keep a list of persons and families of low and moderate income displaced by the rehabilitation or retrofitting project who are to be given priority, and may establish reasonable rules for determining the order or priority on the list. The list shall be provided to the owner of those properties at or before any certificate of occupancy is issued.
(d)If insufficient suitable housing units are available in the affordable housing investment plan area for low- and moderate-income persons and families to be displaced from a rehabilitation or retrofitting project, the city council or board of supervisors that created the authority shall assure that sufficient land be made available within its territorial jurisdiction for suitable housing for rental or purchase by low- and moderate-income persons and families. If insufficient suitable housing units are available in the community for use by persons and families of low and moderate income displaced by the rehabilitation or retrofitting project, the authority may, to the extent of that deficiency, direct or cause the development, rehabilitation, or construction of housing units within the community, both inside and outside of the affordable housing investment plan area.
(e)Permanent housing facilities shall be made available within two years from the time occupants are displaced and pending the development of those facilities there will be available to those displaced occupants adequate temporary housing facilities at rents comparable to the units from which the displaced occupants were displaced.
(f)(1)Whenever dwelling units housing persons and families of low or moderate income are destroyed or removed from the low- and moderate-income housing market as part of a rehabilitation or retrofitting project that is subject to a written agreement with the authority or where financial assistance has been provided by the authority, the authority shall, within two years of the destruction or removal, rehabilitate, develop, or construct, or cause to be rehabilitated, developed, or constructed, for rental or sale to persons and families of low or moderate income, an equal number of replacement dwelling units that have an equal or greater number of bedrooms as those destroyed or removed units at affordable housing costs within the territorial jurisdiction of the authority. One hundred percent of the replacement dwelling units shall be available at an affordable housing cost to persons in the same or a lower income category (extremely low, low, very low, or moderate), as the persons displaced from those destroyed or removed units.
(2)The authority shall require all replacement dwelling units and other dwelling units rehabilitated, retrofitted, developed, constructed, or price restricted to remain available at affordable housing cost to, and occupied by, persons and families of extremely low income, low-income, moderate-income, and very low income households, respectively, for not less than 55 years for rental units or 45 years for owner-occupied units.
(3)Notwithstanding subdivision (a), the authority may replace destroy replace, destroy, or remove dwelling units with a fewer number of replacement dwelling units if the replacement dwelling units meet both of the following criteria:
(A)The total number of bedrooms in the replacement dwelling units equals or exceeds the number of bedrooms in the destroyed or removed units. Destroyed or removed units having one or no bedroom are deemed for this purpose to have one bedroom.
(B)The replacement units are affordable to, and occupied by, the same income level of households as the destroyed or removed units.
(g)(1)An authority shall provide relocation assistance and shall make all of the payments required by Chapter 16 (commencing with Section 7260) of Division 7 of Title 1, including the making of those payments financed by the federal government.
(2)This subdivision shall not be construed to limit any other authority which an authority may have to make other relocation assistance payments, or to make any relocation assistance payment in an amount which exceeds the maximum amount for that payment authorized by Chapter 16 (commencing with Section 7260) of Division 7 of Title 1.
62257.An authority shall receive a priority for assistance in housing programs administered by the Department of Housing and Community Development, and other state agencies and departments.
62258.An authority may transfer its housing responsibilities to a housing authority or city or county housing department if it determines that combining funding streams will reduce administrative costs or expedites the construction of affordable housing.
62259.(a)All housing assisted by an authority created pursuant to this division shall remain affordable for at least 55 years for rental units and 45 years for owner-occupied units.
(b)The authority shall execute an enforceable and verifiable agreement with a public agency, a recorded deed restriction, or other legal document that restricts the projects usage and that provides that the units designated for use by lower income households are continuously available to or occupied by lower income households at rents that do not exceed those prescribed by Section 50053 of the Health and Safety Code, or, to the extent that the terms of federal, state, or local financing or financial assistance conflicts with Section 50053 of the Health and Safety Code, rents that do not exceed those prescribed by the terms of the financing or financial assistance.
62260.Within the area of the authority, an authority may:
(a)Purchase, lease, obtain an option upon, acquire by gift, grant, bequest, devise, or otherwise, any real or personal property, any interest in property, and any improvements on it, including repurchase of developed property previously owned by the authority. The authority shall obtain an appraisal from a qualified independent appraiser to determine the fair market value of property before the authority acquires or purchases real property.
(b)Accept, at the request of the legislative body of the community, a conveyance of real property, located either within or outside the plan area, owned by a public entity and declared surplus by the public entity, or owned by a private entity. The authority may dispose of that property to private persons or to public or private entities, by sale or long-term lease for development. All or any part of the funds derived from the sale or lease of that property may, at the discretion of the legislative body of the community, be paid to the community, or to the public entity from which any of that property was acquired.
(c)Sell, lease, grant, or donate real property owned or acquired by the authority in a plan area to a housing authority or to any public agency for public housing projects.
(d)Offer for resale property acquired by an authority for rehabilitation and resale within one year after completion of rehabilitation. Properties held by the authority in excess of a one-year period shall be listed in the authoritys annual report with information conveying the reasons that property remains unsold and indicating plans for its disposition.
62261.(a)The authority shall retain controls and establish restrictions or covenants running with land sold or leased for private use for those periods of time and under those conditions as are provided in the plan. The establishment of those controls is a public purpose under this division.
(b)An authority shall obligate lessees or purchasers of property acquired in an affordable housing project to:
(1)Use the property for the purpose designated in the affordable housing plan.
(2)Begin the project within a period of time which the authority fixes as reasonable.
(3)Comply with the covenants, conditions, or restrictions that the authority deems necessary to prevent speculation or excess profittaking in undeveloped land, including right of reverter to the authority. Covenants, conditions, and restrictions imposed by an authority may provide for the reasonable protection of lenders.
(4)Comply with other conditions that the authority deems necessary to carry out the purposes of this division.
62262.An authority created pursuant to this division shall be a local public agency subject to the Ralph M. Brown Act (Chapter 9 (commencing with Section 54950) of Part 1 of Division 2 of Title 5), the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1), and the Political Reform Act of 1974 (Title 9 (commencing with Section 81000)).
SEC. 2.The Legislature finds and declares that the allocation of revenues derived from a sales and use tax or a transactions and use tax to an affordable housing authority pursuant to Division 5 (commencing with Section 62250) of Title 6 of the Government Code, as added by this act, is not subject to Section 29 of Article XIII of the California Constitution because an authority is not a city, county, or city and county within the meaning of that provision, but is rather a separate political entity as described in subdivision (a) of Section 62251 of the Government Code, as added by this act.
For purposes of this division, the following terms have the following meanings:
(a)Affordable workforce housing means housing with an affordable housing cost, as defined in Section 50052.5 of the Health and Safety Code, or affordable rent, as defined in Section 50053 of the Health and Safety Code, for households whose gross income does not exceed 120 percent of the area median income.
(b)Authority means an affordable housing authority created pursuant to this division.
(c)Consenting local agency means a local agency that has adopted a resolution of its governing body consenting to the affordable housing investment plan.
(d)Plan means an affordable housing investment plan adopted pursuant to Section 62252. The plan shall be deemed to be the plan described in Section 16 of Article XVI of the California Constitution.
(e)Real property means any of the following:
(1)Land, including land under water and waterfront property.
(2)Buildings, structures, fixtures, and improvements on the land.
(3)Any property appurtenant to or used in connection with the land.
(4)Every estate, interest, privilege, easement, franchise, and right in land, including rights-of-way, terms for years, and liens, charges, or encumbrances by way of judgment, mortgage, or otherwise and the indebtedness secured by those liens.
62251.(a)A city, county, or city and county may adopt a resolution creating an affordable housing authority that shall be limited to providing low- and moderate-income housing and affordable workforce housing pursuant to this division. An authority created pursuant to this division is a public body, corporate and politic. The authority shall be deemed to be the agency described in subdivision (b) of Section 16 of Article XVI of the California Constitution for purposes of receiving property tax increment revenues.
(b)(1)A school entity, as defined in subdivision (f) of Section 95 of the Revenue and Taxation Code, may not participate in an authority created pursuant to this section.
(2)A successor agency, as defined in subdivision (j) of Section 34171 of the Health and Safety Code, may not participate in an authority created pursuant to this part, and an entity created pursuant to this part shall not receive any portion of the property tax revenues or other moneys distributed pursuant to Section 34188 of the Health and Safety Code.
(3)An authority formed by a city or county that created a redevelopment agency that was dissolved pursuant to Part 1.85 (commencing with Section 34170) of Division 24 of the Health and Safety Code shall not become effective until the successor agency or designated local authority for the former redevelopment agency has adopted findings of fact stating all of the following:
(A)The agency has received a finding of completion from the Department of Finance pursuant to Section 34179.7 of the Health and Safety Code.
(B)Former redevelopment agency assets that are the subject of litigation against the state, where the city or county or its successor agency or designated local authority are a named plaintiff, have not been or will not be used to benefit any efforts of an authority formed under this part unless the litigation has been resolved by entry of a final judgment by any court of competent jurisdiction and any appeals have been exhausted.
(C)The agency has complied with all orders of the Controller pursuant to Section 34167.5 of the Health and Safety Code.
(c)The governing board of an authority created pursuant to this division shall be as follows:
(1)(A)At least three members of the city council or the board of supervisors appointed by the city council or the board of supervisors.
(B)In the case of an authority created by a city and county authority jointly, at least three members of the city council and three members of the board of supervisors.
(2)At least one member of the public who lives or works within the boundaries of the city or county that created the authority.
(d)The boundaries of an authority created pursuant to this division may be identical to the boundaries of the city or county that created the authority.
62252.(a)An authority created pursuant to this division shall, by resolution, create a Low and Moderate Income Housing Fund and adopt an affordable housing investment plan that may include either or both of the following:
(1)A provision for the receipt of property tax increment funds generated within the area.
(2)A provision for the receipt of any tax revenues allocated to the authority pursuant to subdivision (b) of Section 62253.
(b)The plan shall include each of the following elements:
(1)A statement of the principal goals and objectives of the plan.
(2)An affordable housing program that describes how the authority will fulfill its objective and if duties and activities will be assigned to a city or county housing department or public housing authority.
(3)The estimated amount that will be deposited in the Low and Moderate Income Housing Fund during each of the next five years.
(4)Estimates of the number of new, rehabilitated, or price restricted residential units to be assisted during each of the five years and estimates of the expenditures of moneys from the Low and Moderate Income Housing Fund during each of the five years.
(5)A description of how the program will implement the requirements for expenditures of funds in the Low and Moderate Income Housing Fund over a 10-year period at various income levels.
(6)Estimates of the number of units, if any, to be developed by the authority for very low, low-, and moderate-income households during the next five years.
(7)A fiscal analysis setting forth the projected receipt of revenue and projected expenses over a five-year planning horizon, including the potential issuance of bonds backed by property tax increment revenues revenues pursuant to subdivision (a) of Section 62253 during the term of the plan. Bonds shall be issued in conformity with Article 4.5 (commencing with Section 53506) and Article 5 (commencing with Section 53510) of Chapter 3 of Part 1 of Division 2 of Title 5.
(8)Time limits as follows:
(A)Forty-five years for the establishing of loans, advances, and indebtedness.
(B)Forty-five years for repayment of all of the authoritys debts and obligations, and fulfilling all of the authoritys housing obligations. The plan shall specify that an authority shall dissolve as a legal entity in no more than 45 years, and that no further taxes shall be allocated to the authority thereafter. Nothing in this subparagraph shall be interpreted to prohibit an authority from refinancing outstanding debt solely to reduce interest costs.
(9)A feasible method or plan for relocation of families and persons to be temporarily or permanently displaced from housing facilities in the plan area. The method or plan shall be consistent with the requirements of Section 62256.
(c)The authority shall hold a public hearing before adopting an affordable housing investment plan. The authority shall provide notice of that hearing in accordance with Section 6062. The authority shall consider any comments made on the plan at that hearing before adopting the plan.
62253.(a)At any time before or after adoption of the plan, any city, county, or special district, other than a school entity as defined in subdivision (n) of Section 95 of the Revenue and Taxation Code or a successor agency as defined in subdivision (j) of Section 34171, that receives ad valorem property taxes from property located within an area may adopt a resolution directing the county auditor-controller to allocate its share of property tax increment funds within the area covered by the plan to the authority. The resolution adopted pursuant to this subdivision may direct the county auditor-controller to allocate less than the full amount of the property tax increment, and to establish a maximum amount of time in years that the allocation takes place. A resolution adopted pursuant to this section for an affordable housing authority may be repealed and be of no further effect by giving the county auditor-controller 90 days notice; provided, however, that the county auditor-controller shall continue to allocate to the authority the taxing entitys share of ad valorem property taxes that have been pledged to the repayment of debt issued by the authority until the debt has been fully repaid. Before adopting a resolution pursuant to this subdivision, a city, county, or special district shall approve a memorandum of understanding with the authority governing the authoritys use of property tax increment funds for administrative and overhead expenses.
(b)At any time before or after the adoption of the plan, a city, county, or special district, other than a school entity as defined in subdivision (n) of Section 95 of the Revenue and Taxation Code or a successor agency as defined in subdivision (j) of Section 34171, may adopt a resolution to allocate tax revenues of that entity to the authority, including revenues derived from local sales and use taxes imposed pursuant to the Bradley-Burns Uniform Local Sales and Use Tax Law (Part 1.5 (commencing with Section 7200) of Division 2 of the Revenue and Taxation Code) or transactions and use taxes imposed pursuant to the Transactions and Use Tax Law (Part 1.6 (commencing with Section 7251) of the Revenue and Taxation Code), provided that both of the following apply:
(1)The use of those revenues by the authority for purposes of this division is consistent with the purposes for which that tax was imposed.
(2)The boundaries of the authority are coterminous with the city or county that established the authority.
(c)A minimum of 95 percent of the allocated property tax increment revenues pursuant to subdivision (a), and allocated tax revenues pursuant to subdivision (b), shall be used to increase, improve, and preserve the communitys supply of housing for low- and moderate-income families. Not more than 5 percent of allocated revenues may be used for administration.
(d)Housing funds expended by an authority shall be spent in proportion to the share of the regional housing need allocated to the city, county, or city and county for each income category pursuant to Section 65584 for low, very low, and moderate-income housing.
62254.An authority may do all of the following:
(a)Provide for low- and moderate-income housing and affordable workforce housing in accordance with this division.
(b)Remedy or remove a release of hazardous substances pursuant to the Polanco Redevelopment Act (Article 12.5 (commencing with Section 33459) of Chapter 4 of Part 1 of Division 24 of the Health and Safety Code) or Chapter 6.10 (commencing with Section 25403) of Division 20 of the Health and Safety Code.
(c)Provide for seismic retrofits of existing buildings in accordance with all applicable laws and regulations.
(d)Acquire and transfer real property in accordance with Section 62260. The authority shall retain controls and establish restrictions or covenants running with the land sold or leased for private use for the periods of time and under the conditions as provided in the plan. The establishment of these controls is a public purpose under this division.
(e)Issue bonds in conformity with Article 4.5 (commencing with Section 53506) and Article 5 (commencing with Section 53510) of Chapter 3 of Part 1 of Division 2 of Title 5.
(f)(1)Borrow money, receive grants, or accept financial or other assistance or investment from the state or the federal government or any other public agency or private lending institution for any project within its area of operation, and comply with any conditions of a loan or grant. An authority may qualify for funding as a disadvantaged community pursuant to Section 79505.5 of the Water Code or as defined by Section 56033.5. An authority may also enter into an agreement with a qualified community development entity, as defined by Section 45D(c) of the Internal Revenue Code, to coordinate investments of funds derived from the New Markets Tax Credit with those of the authority in instances where coordination offers opportunities for greater efficiency of investments to improve conditions described in subdivisions (c) and (d) within the territorial jurisdiction of the authority.
(2)Receive funds allocated to it pursuant to a resolution adopted by a city, county, or special district to transfer these funds from a source described in subdivision (d), (e), or (f) of Section 53398.75, subject to any requirements upon, or imposed by, the city, county, or special district as to the use of these funds.
(g)Adopt an affordable housing plan pursuant to Section 62252.
(h)Make loans or grants for owners or tenants to improve, rehabilitate, or retrofit buildings or structures within the plan area.
(i)Construct foundations, platforms, and other like structural forms necessary for the provision or utilization of air rights sites for buildings to be used for purposes of providing affordable housing pursuant to this division.
62255.Every five years, beginning in the calendar year in which the authority has allocated a cumulative total of more than one million dollars ($1,000,000) in property tax increment revenues pursuant to subdivision (a) of Section 62253 or other revenues pursuant to subdivision (b) of Section 62253, including any proceeds of a debt issuance, the authority shall contract for an independent audit conducted in accordance with generally accepted governmental auditing standards.
62256.(a)An authority shall prepare a feasible method or plan for relocation of all of any families and persons to be temporarily or permanently displaced from housing facilities as a result of actions by the authority. in the area affected by the affordable housing investment plan. The method or plan adopted pursuant to this section shall be incorporated into the affordable housing investment plan pursuant to subdivision (b) of Section 62252.
(b)The city, county, or city and county that created the authority shall insure that the method or plan of the authority for the relocation of families or single persons to be displaced by a rehabilitation or retrofitting project within the affordable housing investment plan area shall provide that no persons or families of low and moderate income shall be displaced unless and until there is a suitable housing unit available and ready for occupancy by the displaced person or family at rents comparable to those at the time of their displacement and that all other requirements of Chapter 16 (commencing with Section 7260) of Division 7 of Title 1 of the Government Code are met. The housing units shall be suitable to the needs of those displaced persons or families and must be decent, safe, sanitary, and otherwise standard dwellings. The authority shall not displace the person or family until the housing units are available and ready for occupancy.
(c)The authority shall require in the recorded covenants for those units that the housing be made available to the persons and families of low or moderate income displaced by a rehabilitation or retrofitting project. Those persons and families shall be given priority in renting or buying those units in advance of marketing the units to the general public. Failure to give that priority shall not affect the validity of title to real property; however, a unit may not be counted as a replacement or production unit in the event of noncompliance with this provision. The authority shall keep a list of persons and families of low and moderate income displaced by the rehabilitation or retrofitting project who are to be given priority, and may establish reasonable rules for determining the order or priority on the list. The list shall be provided to the owner of those properties at or before any certificate of occupancy is issued.
(d)If insufficient suitable housing units are available in the affordable housing investment plan area for low- and moderate-income persons and families to be displaced from a rehabilitation or retrofitting project, the city council or board of supervisors that created the authority shall assure that sufficient land be made available within its territorial jurisdiction for suitable housing for rental or purchase by low- and moderate-income persons and families. If insufficient suitable housing units are available in the community for use by persons and families of low and moderate income displaced by the rehabilitation or retrofitting project, the authority may, to the extent of that deficiency, direct or cause the development, rehabilitation, or construction of housing units within the community, both inside and outside of the affordable housing investment plan area.
(e)Permanent housing facilities shall be made available within two years from the time occupants are displaced and pending the development of those facilities there will be available to those displaced occupants adequate temporary housing facilities at rents comparable to the units from which the displaced occupants were displaced.
(f)(1)Whenever dwelling units housing persons and families of low or moderate income are destroyed or removed from the low- and moderate-income housing market as part of a rehabilitation or retrofitting project that is subject to a written agreement with the authority or where financial assistance has been provided by the authority, the authority shall, within two years of the destruction or removal, rehabilitate, develop, or construct, or cause to be rehabilitated, developed, or constructed, for rental or sale to persons and families of low or moderate income, an equal number of replacement dwelling units that have an equal or greater number of bedrooms as those destroyed or removed units at affordable housing costs within the territorial jurisdiction of the authority. One hundred percent of the replacement dwelling units shall be available at an affordable housing cost to persons in the same or a lower income category (extremely low, low, very low, or moderate), as the persons displaced from those destroyed or removed units.
(2)The authority shall require all replacement dwelling units and other dwelling units rehabilitated, retrofitted, developed, constructed, or price restricted to remain available at affordable housing cost to, and occupied by, persons and families of extremely low income, low-income, moderate-income, and very low income households, respectively, for not less than 55 years for rental units or 45 years for owner-occupied units.
(3)Notwithstanding subdivision (a), the authority may replace destroy or remove dwelling units with a fewer number of replacement dwelling units if the replacement dwelling units meet both of the following criteria:
(A)The total number of bedrooms in the replacement dwelling units equals or exceeds the number of bedrooms in the destroyed or removed units. Destroyed or removed units having one or no bedroom are deemed for this purpose to have one bedroom.
(B)The replacement units are affordable to, and occupied by, the same income level of households as the destroyed or removed units.
(g)(1)An authority shall provide relocation assistance and shall make all of the payments required by Chapter 16 (commencing with Section 7260) of Division 7 of Title 1, including the making of those payments financed by the federal government.
(2)This subdivision shall not be construed to limit any other authority which an authority may have to make other relocation assistance payments, or to make any relocation assistance payment in an amount which exceeds the maximum amount for that payment authorized by Chapter 16 (commencing with Section 7260) of Division 7 of Title 1.
62257.An authority shall receive a priority for assistance in housing programs administered by the Department of Housing and Community Development, and other state agencies and departments.
62258.An authority may transfer its housing responsibilities to a housing authority or city or county housing department if it determines that combining funding streams will reduce administrative costs or expedites the construction of affordable housing.
62259.(a)All housing assisted by an authority created pursuant to this division shall remain affordable for at least 55 years for rental units and 45 years for owner-occupied units.
(b)The authority shall execute an enforceable and verifiable agreement with a public agency, a recorded deed restriction, or other legal document that restricts the projects usage and that provides that the units designated for use by lower income households are continuously available to or occupied by lower income households at rents that do not exceed those prescribed by Section 50053 of the Health and Safety Code, or, to the extent that the terms of federal, state, or local financing or financial assistance conflicts with Section 50053 of the Health and Safety Code, rents that do not exceed those prescribed by the terms of the financing or financial assistance.
62260.Within the area of the authority, an authority may:
(a)Purchase, lease, obtain an option upon, acquire by gift, grant, bequest, devise, or otherwise, any real or personal property, any interest in property, and any improvements on it, including repurchase of developed property previously owned by the authority. The authority shall obtain an appraisal from a qualified independent appraiser to determine the fair market value of property before the authority acquires or purchases real property.
(b)Accept, at the request of the legislative body of the community, a conveyance of real property, located either within or outside the plan area, owned by a public entity and declared surplus by the public entity, or owned by a private entity. The authority may dispose of that property to private persons or to public or private entities, by sale or long-term lease for development. All or any part of the funds derived from the sale or lease of that property may, at the discretion of the legislative body of the community, be paid to the community, or to the public entity from which any of that property was acquired.
(c)Sell, lease, grant, or donate real property owned or acquired by the authority in a plan area to a housing authority or to any public agency for public housing projects.
(d)Offer for resale property acquired by an authority for rehabilitation and resale within one year after completion of rehabilitation. Properties held by the authority in excess of a one-year period shall be listed in the authoritys annual report with information conveying the reasons that property remains unsold and indicating plans for its disposition.
62261.(a)The authority shall retain controls and establish restrictions or covenants running with land sold or leased for private use for those periods of time and under those conditions as are provided in the plan. The establishment of those controls is a public purpose under this division.
(b)An authority shall obligate lessees or purchasers of property acquired in an affordable housing project to:
(1)Use the property for the purpose designated in the affordable housing plan.
(2)Begin the project within a period of time which the authority fixes as reasonable.
(3)Comply with the covenants, conditions, or restrictions that the authority deems necessary to prevent speculation or excess profittaking in undeveloped land, including right of reverter to the authority. Covenants, conditions, and restrictions imposed by an authority may provide for the reasonable protection of lenders.
(4)Comply with other conditions that the authority deems necessary to carry out the purposes of this division.
62262.An authority created pursuant to this division shall be a local public agency subject to the Ralph M. Brown Act (Chapter 9 (commencing with Section 54950) of Part 1 of Division 2 of Title 5), the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1), and the Political Reform Act of 1974 (Title 9 (commencing with Section 81000)).
SEC. 2.The Legislature finds and declares that the allocation of revenues derived from a sales and use tax or a transactions and use tax to an affordable housing authority pursuant to Division 5 (commencing with Section 62250) of Title 6 of the Government Code, as added by this act, is not subject to Section 29 of Article XIII of the California Constitution because an authority is not a city, county, or city and county within the meaning of that provision, but is rather a separate political entity as described in subdivision (a) of Section 62251 of the Government Code, as added by this act.
For purposes of this division, the following terms have the following meanings:
(a)Affordable workforce housing means housing with an affordable housing cost, as defined in Section 50052.5 of the Health and Safety Code, or affordable rent, as defined in Section 50053 of the Health and Safety Code, for households whose gross income does not exceed 120 percent of the area median income.
(b)Authority means an affordable housing authority created pursuant to this division.
(c)Consenting local agency means a local agency that has adopted a resolution of its governing body consenting to the affordable housing investment plan.
(d)Plan means an affordable housing investment plan adopted pursuant to Section 62252. The plan shall be deemed to be the plan described in Section 16 of Article XVI of the California Constitution.
(e)Real property means any of the following:
(1)Land, including land under water and waterfront property.
(2)Buildings, structures, fixtures, and improvements on the land.
(3)Any property appurtenant to or used in connection with the land.
(4)Every estate, interest, privilege, easement, franchise, and right in land, including rights-of-way, terms for years, and liens, charges, or encumbrances by way of judgment, mortgage, or otherwise and the indebtedness secured by those liens.
62251.(a)A city, county, or city and county may adopt a resolution creating an affordable housing authority that shall be limited to providing low- and moderate-income housing and affordable workforce housing pursuant to this division. An authority created pursuant to this division is a public body, corporate and politic. The authority shall be deemed to be the agency described in subdivision (b) of Section 16 of Article XVI of the California Constitution for purposes of receiving property tax increment revenues.
(b)(1)A school entity, as defined in subdivision (f) of Section 95 of the Revenue and Taxation Code, may not participate in an authority created pursuant to this section.
(2)A successor agency, as defined in subdivision (j) of Section 34171 of the Health and Safety Code, may not participate in an authority created pursuant to this part, and an entity created pursuant to this part shall not receive any portion of the property tax revenues or other moneys distributed pursuant to Section 34188 of the Health and Safety Code.
(3)An authority formed by a city or county that created a redevelopment agency that was dissolved pursuant to Part 1.85 (commencing with Section 34170) of Division 24 of the Health and Safety Code shall not become effective until the successor agency or designated local authority for the former redevelopment agency has adopted findings of fact stating all of the following:
(A)The agency has received a finding of completion from the Department of Finance pursuant to Section 34179.7 of the Health and Safety Code.
(B)Former redevelopment agency assets that are the subject of litigation against the state, where the city or county or its successor agency or designated local authority are a named plaintiff, have not been or will not be used to benefit any efforts of an authority formed under this part unless the litigation has been resolved by entry of a final judgment by any court of competent jurisdiction and any appeals have been exhausted.
(C)The agency has complied with all orders of the Controller pursuant to Section 34167.5 of the Health and Safety Code.
(c)The governing board of an authority created pursuant to this division shall be as follows:
(1)(A)At least three members of the city council or the board of supervisors appointed by the city council or the board of supervisors.
(B)In the case of an authority created by a city and county authority jointly, at least three members of the city council and three members of the board of supervisors.
(2)At least one member of the public who lives or works within the boundaries of the city or county that created the authority.
(d)The boundaries of an authority created pursuant to this division may be identical to the boundaries of the city or county that created the authority.
62252.(a)An authority created pursuant to this division shall, by resolution, create a Low and Moderate Income Housing Fund and adopt an affordable housing investment plan that may include either or both of the following:
(1)A provision for the receipt of property tax increment funds generated within the area.
(2)A provision for the receipt of any tax revenues allocated to the authority pursuant to subdivision (b) of Section 62253.
(b)The plan shall include each of the following elements:
(1)A statement of the principal goals and objectives of the plan.
(2)An affordable housing program that describes how the authority will fulfill its objective and if duties and activities will be assigned to a city or county housing department or public housing authority.
(3)The estimated amount that will be deposited in the Low and Moderate Income Housing Fund during each of the next five years.
(4)Estimates of the number of new, rehabilitated, or price restricted residential units to be assisted during each of the five years and estimates of the expenditures of moneys from the Low and Moderate Income Housing Fund during each of the five years.
(5)A description of how the program will implement the requirements for expenditures of funds in the Low and Moderate Income Housing Fund over a 10-year period at various income levels.
(6)Estimates of the number of units, if any, to be developed by the authority for very low, low-, and moderate-income households during the next five years.
(7)A fiscal analysis setting forth the projected receipt of revenue and projected expenses over a five-year planning horizon, including the potential issuance of bonds backed by property tax increment revenues revenues pursuant to subdivision (a) of Section 62253 or other revenues pursuant to subdivision (b) of Section 62253 during the term of the plan. Bonds shall be issued in conformity with Article 4.5 (commencing with Section 53506) and Article 5 (commencing with Section 53510) of Chapter 3 of Part 1 of Division 2 of Title 5.
(8)Time limits as follows:
(A)Forty-five years for the establishing of loans, advances, and indebtedness.
(B)Forty-five years for repayment of all of the authoritys debts and obligations, and fulfilling all of the authoritys housing obligations. The plan shall specify that an authority shall dissolve as a legal entity in no more than 45 years, and that no further taxes shall be allocated to the authority thereafter. Nothing in this subparagraph shall be interpreted to prohibit an authority from refinancing outstanding debt solely to reduce interest costs.
(c)The authority shall hold a public hearing before adopting an affordable housing investment plan. The authority shall provide notice of that hearing in accordance with Section 6062. The authority shall consider any comments made on the plan at that hearing before adopting the plan.
62253.(a)At any time before or after adoption of the plan, any city, county, or special district, other than a school entity as defined in subdivision (n) of Section 95 of the Revenue and Taxation Code or a successor agency as defined in subdivision (j) of Section 34171, that receives ad valorem property taxes from property located within an area may adopt a resolution directing the county auditor-controller to allocate its share of property tax increment funds within the area covered by the plan to the authority. The resolution adopted pursuant to this subdivision may direct the county auditor-controller to allocate less than the full amount of the property tax increment, and to establish a maximum amount of time in years that the allocation takes place. A resolution adopted pursuant to this section for an affordable housing authority may be repealed and be of no further effect by giving the county auditor-controller 90 days notice; provided, however, that the county auditor-controller shall continue to allocate to the authority the taxing entitys share of ad valorem property taxes that have been pledged to the repayment of debt issued by the authority until the debt has been fully repaid. Before adopting a resolution pursuant to this subdivision, a city, county, or special district shall approve a memorandum of understanding with the authority governing the authoritys use of property tax increment funds for administrative and overhead expenses.
(b)At any time before or after the adoption of the plan, a city, county, or special district, other than a school entity as defined in subdivision (n) of Section 95 of the Revenue and Taxation Code or a successor agency as defined in subdivision (j) of Section 34171, may adopt a resolution to allocate tax revenues of that entity to the authority, including revenues derived from local sales and use taxes imposed pursuant to the Bradley-Burns Uniform Local Sales and Use Tax Law (Part 1.5 (commencing with Section 7200) of Division 2 of the Revenue and Taxation Code) or transactions and use taxes imposed pursuant to the Transactions and Use Tax Law (Part 1.6 (commencing with Section 7251) of the Revenue and Taxation Code), provided that the both of the following apply:
(1)The use of those revenues by the authority for purposes of this division is consistent with the purposes for which that tax was imposed.
(2)The boundaries of the authority are coterminous with the city or county that established the authority.
(c)A minimum of 95 percent of the allocated property tax increment revenues pursuant to subdivision (a), and allocated tax revenues pursuant to subdivision (b), shall be used to increase, improve, and preserve the communitys supply of housing for low- and moderate-income families. Not more than 5 percent of allocated revenues may be used for administration.
(d)Housing funds expended by an authority shall be spent in proportion to the share of the regional housing need allocated to the city, county, or city and county for each income category pursuant to Section 65584 for low, very low, and moderate-income housing.
62254.An authority may do all of the following:
(a)Provide for low- and moderate-income housing and affordable workforce housing in accordance with this division.
(b)Remedy or remove a release of hazardous substances pursuant to the Polanco Redevelopment Act (Article 12.5 (commencing with Section 33459) of Chapter 4 of Part 1 of Division 24 of the Health and Safety Code) or Chapter 6.10 (commencing with Section 25403) of Division 20 of the Health and Safety Code.
(c)Provide for seismic retrofits of existing buildings in accordance with all applicable laws and regulations.
(d)Acquire and transfer real property in accordance with Section 62260. The authority shall retain controls and establish restrictions or covenants running with the land sold or leased for private use for the periods of time and under the conditions as provided in the plan. The establishment of these controls is a public purpose under this division.
(e)Issue bonds in conformity with Article 4.5 (commencing with Section 53506) and Article 5 (commencing with Section 53510) of Chapter 3 of Part 1 of Division 2 of Title 5.
(f)(1)Borrow money, receive grants, or accept financial or other assistance or investment from the state or the federal government or any other public agency or private lending institution for any project within its area of operation, and comply with any conditions of a loan or grant. An authority may qualify for funding as a disadvantaged community pursuant to Section 79505.5 of the Water Code or as defined by Section 56033.5. An authority may also enter into an agreement with a qualified community development entity, as defined by Section 45D(c) of the Internal Revenue Code, to coordinate investments of funds derived from the New Markets Tax Credit with those of the authority in instances where coordination offers opportunities for greater efficiency of investments to improve conditions described in subdivisions (c) and (d) within the territorial jurisdiction of the authority.
(2)Receive funds allocated to it pursuant to a resolution adopted by a city, county, or special district to transfer these funds from a source described in subdivision (d), (e), or (f) of Section 53398.75, subject to any requirements upon, or imposed by, the city, county, or special district as to the use of these funds.
(g)Adopt an affordable housing plan pursuant to Section 62252.
(h)Make loans or grants for owners or tenants to improve, rehabilitate, or retrofit buildings or structures within the plan area.
(i)Construct foundations, platforms, and other like structural forms necessary for the provision or utilization of air rights sites for buildings to be used for purposes of providing affordable housing pursuant to this division.
62255.Every five years, beginning in the calendar year in which the authority has allocated a cumulative total of more than one million dollars ($1,000,000) in property tax increment revenues pursuant to subdivision (a) of Section 62253 or other revenues pursuant to subdivision (b) of Section 62253, including any proceeds of a debt issuance, the authority shall contract for an independent audit conducted in accordance with generally accepted governmental auditing standards.
62256.An authority shall prepare a feasible method or plan for relocation of all of any families and persons to be temporarily or permanently displaced from housing facilities as a result of actions by the authority.
62257.An authority shall receive a priority for assistance in housing programs administered by the Department of Housing and Community Development, and other state agencies and departments.
62258.An authority may transfer its housing responsibilities to a housing authority or city or county housing department if it determines that combining funding streams will reduce administrative costs or expedites the construction of affordable housing.
62259.(a)All housing assisted by an authority created pursuant to this division shall remain affordable for at least 55 years for rental units and 45 years for owner-occupied units.
(b)The authority shall execute an enforceable and verifiable agreement with a public agency, a recorded deed restriction, or other legal document that restricts the projects usage and that provides that the units designated for use by lower income households are continuously available to or occupied by lower income households at rents that do not exceed those prescribed by Section 50053 of the Health and Safety Code, or, to the extent that the terms of federal, state, or local financing or financial assistance conflicts with Section 50053 of the Health and Safety Code, rents that do not exceed those prescribed by the terms of the financing or financial assistance.
62260.Within the area of the authority, an authority may:
(a)Purchase, lease, obtain an option upon, acquire by gift, grant, bequest, devise, or otherwise, any real or personal property, any interest in property, and any improvements on it, including repurchase of developed property previously owned by the authority. The authority shall obtain an appraisal from a qualified independent appraiser to determine the fair market value of property before the authority acquires or purchases real property.
(b)Accept, at the request of the legislative body of the community, a conveyance of real property, located either within or outside the plan area, owned by a public entity and declared surplus by the public entity, or owned by a private entity. The authority may dispose of that property to private persons or to public or private entities, by sale or long-term lease for development. All or any part of the funds derived from the sale or lease of that property may, at the discretion of the legislative body of the community, be paid to the community, or to the public entity from which any of that property was acquired.
(c)Sell, lease, grant, or donate real property owned or acquired by the authority in a plan area to a housing authority or to any public agency for public housing projects.
(d)Offer for resale property acquired by an authority for rehabilitation and resale within one year after completion of rehabilitation. Properties held by the authority in excess of a one-year period shall be listed in the authoritys annual report with information conveying the reasons that property remains unsold and indicating plans for its disposition.
62261.(a)The authority shall retain controls and establish restrictions or covenants running with land sold or leased for private use for those periods of time and under those conditions as are provided in the plan. The establishment of those controls is a public purpose under this division.
(b)An authority shall obligate lessees or purchasers of property acquired in an affordable housing project to:
(1)Use the property for the purpose designated in the affordable housing plan.
(2)Begin the project within a period of time which the authority fixes as reasonable.
(3)Comply with the covenants, conditions, or restrictions that the authority deems necessary to prevent speculation or excess profittaking in undeveloped land, including right of reverter to the authority. Covenants, conditions, and restrictions imposed by an authority may provide for the reasonable protection of lenders.
(4)Comply with other conditions that the authority deems necessary to carry out the purposes of this division.
62262.An authority created pursuant to this division shall be a local public agency subject to the Ralph M. Brown Act (Chapter 9 (commencing with Section 54950) of Part 1 of Division 2 of Title 5), the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1), and the Political Reform Act of 1974 (Title 9 (commencing with Section 81000)).
SEC. 2.The Legislature finds and declares that the allocation of revenues derived from a sales and use tax or a transactions and use tax to an affordable housing authority pursuant to Division 5 (commencing with Section 62250) of Title 6 of the Government Code, as added by this act, is not subject to Section 29 of Article XIII of the California Constitution because an authority is not a city, county, or city and county within the meaning of that provision, but is rather a separate political entity as described in subdivision (a) of Section 62251 of the Government Code, as added by this act.
For purposes of this division, the following terms have the following meanings:
(a)Affordable workforce housing means housing with an affordable housing cost, as defined in Section 50052.5 of the Health and Safety Code, or affordable rent, as defined in Section 50053 of the Health and Safety Code, for households whose gross income does not exceed 120 percent of the area median income.
(a)(b)Authority means an affordable housing authority created pursuant to this division.
(b)(c)Consenting local agency means a local agency that has adopted a resolution of its governing body consenting to the affordable housing investment plan.
(c)(d)Plan means an affordable housing investment plan adopted pursuant to Section 62252. The plan shall be deemed to be the plan described in Section 16 of Article XVI of the California Constitution.
(d)(e)Real property means any of the following:
(1)Land, including land under water and waterfront property.
(2)Buildings, structures, fixtures, and improvements on the land.
(3)Any property appurtenant to or used in connection with the land.
(4)Every estate, interest, privilege, easement, franchise, and right in land, including rights-of-way, terms for years, and liens, charges, or encumbrances by way of judgment, mortgage, or otherwise and the indebtedness secured by those liens.
62251.(a)A city, county, or city and county may adopt a resolution creating an affordable housing authority and a Low and Moderate Income Housing Fund that shall be limited to providing low- and moderate-income housing and affordable workforce housing pursuant to this division. An authority created pursuant to this division is a public body, corporate and politic. The authority shall be deemed to be the agency described in subdivision (b) of Section 16 of Article XVI of the California Constitution for purposes of receiving tax increment revenues.
(b)(1)A school entity, as defined in subdivision (f) of Section 95 of the Revenue and Taxation Code, may not participate in an authority created pursuant to this section.
(2)A successor agency, as defined in subdivision (j) of Section 34171 of the Health and Safety Code, may not participate in an authority created pursuant to this part, and an entity created pursuant to this part shall not receive any portion of the property tax revenues or other moneys distributed pursuant to Section 34188 of the Health and Safety Code.
(3)An authority formed by a city or county that created a redevelopment agency that was dissolved pursuant to Part 1.85 (commencing with Section 34170) of Division 24 of the Health and Safety Code shall not become effective until the successor agency or designated local authority for the former redevelopment agency has adopted findings of fact stating all of the following:
(A)The agency has received a finding of completion from the Department of Finance pursuant to Section 34179.7 of the Health and Safety Code.
(B)Former redevelopment agency assets that are the subject of litigation against the state, where the city or county or its successor agency or designated local authority are a named plaintiff, have not been or will not be used to benefit any efforts of an authority formed under this part unless the litigation has been resolved by entry of a final judgment by any court of competent jurisdiction and any appeals have been exhausted.
(C)The agency has complied with all orders of the Controller pursuant to Section 34167.5 of the Health and Safety Code.
(c)The governing board of an authority created pursuant to this division shall be as follows:
(1)(A)At least three members of the city council or the board of supervisors appointed by the city council or the board of supervisors.
(B)In the case of an authority created by a city and county authority jointly, at least three members of the city council and three members of the board of supervisors.
(2)At least one member of the public who lives or works within the boundaries of the city or county that created the authority.
(d)The boundaries of an authority created pursuant to this division may be identical to the boundaries of the city or county that created the authority.
62252.(a)(1)An authority created pursuant to this division shall, by resolution, create a Low and Moderate Income Housing Fund and adopt an affordable housing investment plan that may include either or both of the following:
(A)(1)A provision for the receipt of tax increment funds generated within the area.
(B)(2)A provision for the receipt of any tax revenues allocated to the authority pursuant to subdivision (b) of Section 62253.
(b)The plan shall include each of the following elements:
(1)A statement of the principal goals and objectives of the plan.
(2)An affordable housing program that describes how the authority will fulfill its objective and if duties and activities will be assigned to a city or county housing department or public housing authority.
(3)The estimated amount available that will be deposited in the Low and Moderate Income Housing Fund and the estimated amounts that will be deposited in the fund during each of the next five years.
(c)(4)Estimates of the number of new, rehabilitated, or price restricted residential units to be assisted during each of the five years and estimates of the expenditures of moneys from the Low and Moderate Income Housing Fund during each of the five years.
(4)(5)A description of how the program will implement the requirements for expenditures of funds in the Low and Moderate Income Housing Fund over a 10-year period at various income levels.
(5)(6)Estimates of the number of units, if any, to be developed by the authority for very low, low-, and moderate-income households during the next five years.
(6)(7)A fiscal analysis setting forth the projected receipt of revenue and projected expenses over a five-year planning horizon, including the potential issuance of bonds backed by tax increment revenues revenues pursuant to subdivision (a) of Section 62253 or other revenues pursuant to subdivision (b) of Section 62253 during the term of the plan. Bonds shall be issued in conformity with Article 4.5 (commencing with Section 53506) and Article 5 (commencing with Section 53510) of Chapter 3 of Part 1 of Division 2 of Title 5.
(7)(8)Time limits as follows:
(A)Forty-five years for the establishing of loans, advances, and indebtedness.
(B)Forty-five years for repayment of all of the authoritys debts and obligations, and fulfilling all of the authoritys housing obligations. The plan shall specify that an authority shall dissolve as a legal entity in no more than 45 years, and that no further taxes shall be allocated to the authority thereafter. Nothing in this subparagraph shall be interpreted to prohibit an authority from refinancing outstanding debt solely to reduce interest costs.
(d)(c)The authority shall hold a public hearing before adopting an affordable housing investment plan. The authority shall provide notice of that hearing in accordance with the Ralph M. Brown Act (Chapter 9 (commencing with Section 54950) of Part 1 of Division 2 of Title 5). Section 6062. The authority shall consider any comments made on the plan at that hearing before adopting the plan.
62253.(a)At any time before or after adoption of the plan, any city, county, or special district, other than a school entity as defined in subdivision (n) of Section 95 of the Revenue and Taxation Code or a successor agency as defined in subdivision (j) of Section 34171, that receives ad valorem property taxes from property located within an area may adopt a resolution directing the county auditor-controller to allocate its share of tax increment funds within the area covered by the plan to the authority. The resolution adopted pursuant to this subdivision may direct the county auditor-controller to allocate less than the full amount of the tax increment, and to establish a maximum amount of time in years that the allocation takes place. A resolution adopted pursuant to this section for an affordable housing authority may be repealed and be of no further effect by giving the county auditor-controller 90 days notice; provided, however, that the county auditor-controller shall continue to allocate to the authority the taxing entitys share of ad valorem property taxes that have been pledged to the repayment of debt issued by the authority until the debt has been fully repaid. Before adopting a resolution pursuant to this subdivision, a city, county, or special district shall approve a memorandum of understanding with the authority governing the authoritys use of tax increment funds for administrative and overhead expenses.
(b)At any time before or after the adoption of the plan, a city, county, or special district, other than a school entity as defined in subdivision (n) of Section 95 of the Revenue and Taxation Code or a successor agency as defined in subdivision (j) of Section 34171, may adopt a resolution to allocate tax revenues of that entity to the authority, including revenues from local sales and use taxes or transactions and use taxes provided that the use of those revenues by the authority for purposes of this division is consistent with the purposes for which that tax was imposed.
(c)A minimum of 95 percent of the allocated tax increment revenues pursuant to subdivision (a), and allocated tax revenues pursuant to subdivision (b), shall be used to increase, improve, and preserve the communitys supply of housing for low- and moderate-income families. Not more than 5 percent of allocated revenues may be used for administration.
(d)Housing funds expended by an authority shall be spent proportionally on in proportion to the share of the regional housing need allocated to the city, county, or city and county for each income category pursuant to Section 65584 for low, very low, and moderate-income housing.
62254.An authority may do all of the following:
(a)Provide for low- and moderate-income housing and affordable workforce housing in accordance with this division.
(b)Remedy or remove a release of hazardous substances pursuant to the Polanco Redevelopment Act (Article 12.5 (commencing with Section 33459) of Chapter 4 of Part 1 of Division 24) 24 of the Health and Safety Code) or Chapter 6.10 (commencing with Section 25403) of Division 20 of the Health and Safety Code.
(c)Provide for seismic retrofits of existing buildings in accordance with all applicable laws and regulations.
(d)Acquire and transfer real property in accordance with Section 62260. The authority shall retain controls and establish restrictions or covenants running with the land sold or leased for private use for the periods of time and under the conditions as provided in the plan. The establishment of these controls is a public purpose under this division.
(e)Issue bonds in conformity with Article 4.5 (commencing with Section 53506) and Article 5 (commencing with Section 53510) of Chapter 3 of Part 1 of Division 2 of Title 5.
(f)(1)Borrow money, receive grants, or accept financial or other assistance or investment from the state or the federal government or any other public agency or private lending institution for any project within its area of operation, and comply with any conditions of a loan or grant. An authority may qualify for funding as a disadvantaged community pursuant to Section 79505.5 of the Water Code or as defined by Section 56033.5. An authority may also enter into an agreement with a qualified community development entity, as defined by Section 45D(c) of the Internal Revenue Code, to coordinate investments of funds derived from the New Markets Tax Credit with those of the authority in instances where coordination offers opportunities for greater efficiency of investments to improve conditions described in subdivisions (c) and (d) within the territorial jurisdiction of the authority.
(2)Receive funds allocated to it pursuant to a resolution adopted by a city, county, or special district to transfer these funds from a source described in subdivision (d), (e), or (f) of Section 53398.75, subject to any requirements upon, or imposed by, the city, county, or special district as to the use of these funds.
(g)Adopt an affordable housing plan pursuant to Section 62252.
(h)Make loans or grants for owners or tenants to improve, rehabilitate, or retrofit buildings or structures within the plan area.
(i)Construct foundations, platforms, and other like structural forms necessary for the provision or utilization of air rights sites for buildings to be used for purposes of providing affordable housing pursuant to this division.
62255.Every five years, beginning in the calendar year in which the authority has allocated a cumulative total of more than one million dollars ($1,000,000) in tax increment revenues pursuant to subdivision (a) of Section 62253 or other revenues pursuant to subdivision (b) of Section 62253, including any proceeds of a debt issuance, the authority shall contract for an independent audit conducted in accordance with generally accepted governmental auditing standards.
62256.An authority shall prepare a feasible method or plan for relocation of all of any families and persons to be temporarily or permanently displaced from housing facilities as a result of actions by the authority.
62257.An authority shall receive a priority for assistance in housing programs administered by the Department of Housing and Community Development, and other state agencies and departments.
62258.An authority may transfer its housing responsibilities to a housing authority or city or county housing department if it determines that combining funding streams will reduce administrative costs or expedites the construction of affordable housing.
62259.All housing assisted by an authority created pursuant to this division shall remain affordable for at least 55 years for rental units and 45 years for owner-occupied units.
62260.Within the area of the authority, an authority may:
(a)Purchase, lease, obtain an option upon, acquire by gift, grant, bequest, devise, or otherwise, any real or personal property, any interest in property, and any improvements on it, including repurchase of developed property previously owned by the authority. The authority shall obtain an appraisal from a qualified independent appraiser to determine the fair market value of property before the authority acquires or purchases real property.
(b)Accept, at the request of the legislative body of the community, a conveyance of real property, located either within or outside the plan area, owned by a public entity and declared surplus by the public entity, or owned by a private entity. The authority may dispose of that property to private persons or to public or private entities, by sale or long-term lease for development. All or any part of the funds derived from the sale or lease of that property may, at the discretion of the legislative body of the community, be paid to the community, or to the public entity from which any of that property was acquired.
(c)Sell, lease, grant, or donate real property owned or acquired by the authority in a plan area to a housing authority or to any public agency for public housing projects.
(d)Offer for resale property acquired by an authority for rehabilitation and resale within one year after completion of rehabilitation. Properties held by the authority in excess of a one-year period shall be listed in the authoritys annual report with information conveying the reasons that property remains unsold and indicating plans for its disposition.
62261.(a)The authority shall retain controls and establish restrictions or covenants running with land sold or leased for private use for those periods of time and under those conditions as are provided in the plan. The establishment of those controls is a public purpose under this division.
(b)An authority shall obligate lessees or purchasers of property acquired in an affordable housing project to:
(1)Use the property for the purpose designated in the affordable housing plan.
(2)Begin the project within a period of time which the authority fixes as reasonable.
(3)Comply with the covenants, conditions, or restrictions that the authority deems necessary to prevent speculation or excess profittaking in undeveloped land, including right of reverter to the agency. authority. Covenants, conditions, and restrictions imposed by an authority may provide for the reasonable protection of lenders.
(4)Comply with other conditions that the authority deems necessary to carry out the purposes of this division.
62262.An authority created pursuant to this division shall be a local public agency subject to the Ralph M. Brown Act (Chapter 9 (commencing with Section 54950) of Part 1 of Division 2 of Title 5), the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1), and the Political Reform Act of 1974 (Title 9 (commencing with Section 81000)).
SEC. 2.The Legislature finds and declares that the allocation of revenues derived from a sales and use tax or a transactions and use tax to an affordable housing authority pursuant to Division 5 (commencing with Section 62250) of Title 6 of the Government Code, as added by this act, is not subject to Section 29 of Article XIII of the California Constitution because an authority is not a city, county, or city and county within the meaning of that provision, but is rather a separate political entity as described in subdivision (a) of Section 62251 of the Government Code, as added by this act.
For purposes of this division, the following terms have the following meanings:
(a)Authority means an affordable housing authority created pursuant to this division.
(b)Consenting local agency means a local agency that has adopted a resolution of its governing body consenting to the affordable housing investment plan.
(c)Plan means an affordable housing investment plan adopted pursuant to Section 62252.
(d)Real property means any of the following:
(1)Land, including land under water and waterfront property.
(2)Buildings, structures, fixtures, and improvements on the land.
(3)Any property appurtenant to or used in connection with the land.
(4)Every estate, interest, privilege, easement, franchise, and right in land, including rights-of-way, terms for years, and liens, charges, or encumbrances by way of judgment, mortgage, or otherwise and the indebtedness secured by those liens.
62251.(a)A city, county, or city and county may adopt a resolution creating an affordable housing authority and a Low and Moderate Income Housing Fund that shall be limited to providing low- and moderate-income housing pursuant to this division. An authority created pursuant to this division is a public body, corporate and politic.
(b)(1)A school entity, as defined in subdivision (f) of Section 95 of the Revenue and Taxation Code, may not participate in an authority created pursuant to this section.
(2)A successor agency, as defined in subdivision (j) of Section 34171 of the Health and Safety Code, may not participate in an authority created pursuant to this part, and an entity created pursuant to this part shall not receive any portion of the property tax revenues or other moneys distributed pursuant to Section 34188 of the Health and Safety Code.
(3)An authority formed by a city or county that created a redevelopment agency that was dissolved pursuant to Part 1.85 (commencing with Section 34170) of Division 24 of the Health and Safety Code shall not become effective until the successor agency or designated local authority for the former redevelopment agency has adopted findings of fact stating all of the following:
(A)The agency has received a finding of completion from the Department of Finance pursuant to Section 34179.7 of the Health and Safety Code.
(B)Former redevelopment agency assets that are the subject of litigation against the state, where the city or county or its successor agency or designated local authority are a named plaintiff, have not been or will not be used to benefit any efforts of an authority formed under this part unless the litigation has been resolved by entry of a final judgment by any court of competent jurisdiction and any appeals have been exhausted.
(C)The agency has complied with all orders of the Controller pursuant to Section 34167.5 of the Health and Safety Code.
(c)The governing board of an authority created pursuant to this division shall be as follows:
(1)(A)At least three members of the city council or the board of supervisors appointed by the city council or the board of supervisors.
(B)In the case of an authority created by a city and county authority jointly, at least three members of the city council and three members of the board of supervisors.
(2)At least one member of the public who lives or works within the boundaries of the city or county that created the authority.
(d)The boundaries of an authority created pursuant to this division may be identical to the boundaries of the city or county that created the authority.
62252.(a)(1)An authority created pursuant to this division shall, by resolution, adopt an affordable housing investment plan that may include either of the following:
(A)A provision for the receipt of tax increment funds generated within the area.
(B)A provision for the receipt of any tax revenues allocated to the authority pursuant to subdivision (b) of Section 62253.
(b)The plan shall include each of the following elements:
(1)A statement of the principal goals and objectives of the plan.
(2)An affordable housing program that describes how the authority will fulfill its objective and if duties and activities will be assigned to a city or county housing department or public housing authority.
(3)The amount available in the Low and Moderate Income Housing Fund and the estimated amounts that will be deposited in the fund during each of the next five years.
(c)Estimates of the number of new, rehabilitated, or price restricted residential units to be assisted during each of the five years and estimates of the expenditures of moneys from the Low and Moderate Income Housing Fund during each of the five years.
(4)A description of how the program will implement the requirements for expenditures of funds in the Low and Moderate Income Housing Fund over a 10-year period at various income levels.
(5)Estimates of the number of units, if any, to be developed by the authority for very low, low-, and moderate-income households during the next five years.
(6)A fiscal analysis setting forth the projected receipt of revenue and projected expenses over a five-year planning horizon, including the potential issuance of bonds backed by tax increment revenues revenues pursuant to subdivision (a) of Section 62253 or other revenues pursuant to subdivision (b) of Section 62253 during the term of the plan. Bonds shall be issued in conformity with Article 4.5 (commencing with Section 53506) and Article 5 (commencing with Section 53510) of Chapter 3 of Part 1 of Division 2 of Title 5.
(7)Time limits as follows:
(A)Forty-five years for the establishing of loans, advances, and indebtedness.
(B)Forty-five years for repayment of all of the authoritys debts and obligations, and fulfilling all of the authoritys housing obligations. The plan shall specify that an authority shall dissolve as a legal entity in no more than 45 years, and that no further taxes shall be allocated to the authority thereafter. Nothing in this subparagraph shall be interpreted to prohibit an authority from refinancing outstanding debt solely to reduce interest costs.
(d)The authority shall hold a public hearing before adopting an affordable housing investment plan. The authority shall provide notice of that hearing in accordance with the Ralph M. Brown Act (Chapter 9 (commencing with Section 54950) of Part 1 of Division 2 of Title 5). The authority shall consider any comments made on the plan at that hearing before adopting the plan.
62253.(a)At any time before or after adoption of the plan, any city, county, or special district, other than a school entity as defined in subdivision (n) of Section 95 of the Revenue and Taxation Code or a successor agency as defined in subdivision (j) of Section 34171, that receives ad valorem property taxes from property located within an area may adopt a resolution directing the county auditor-controller to allocate its share of tax increment funds within the area covered by the plan to the authority. The resolution adopted pursuant to this subdivision may direct the county auditor-controller to allocate less than the full amount of the tax increment, and to establish a maximum amount of time in years that the allocation takes place. A resolution adopted pursuant to this section for an affordable housing authority may be repealed and be of no further effect by giving the county auditor-controller 90 days notice; provided, however, that the county auditor-controller shall continue to allocate to the authority the taxing entitys share of ad valorem property taxes that have been pledged to the repayment of debt issued by the authority until the debt has been fully repaid. Before adopting a resolution pursuant to this subdivision, a city, county, or special district shall approve a memorandum of understanding with the authority governing the authoritys use of tax increment funds for administrative and overhead expenses.
(b)At any time before or after the adoption of the plan, a city, county, or special district, other than a school entity as defined in subdivision (n) of Section 95 of the Revenue and Taxation Code or a successor agency as defined in subdivision (j) of Section 34171, may adopt a resolution to allocate tax revenues of that entity to the authority, including revenues from local sales and use taxes or transactions and use taxes provided that the use of those revenues by the authority for purposes of this division is consistent with the purposes for which that tax was imposed.
(c)A minimum of 95 percent of the allocated tax increment revenues pursuant to subdivision (a), and allocated tax revenues pursuant to subdivision (b), shall be used to increase, improve, and preserve the communitys supply of housing for low- and moderate-income families. Not more than 5 percent of allocated revenues may be used for administration.
(d)Housing funds expended by an authority shall be spent proportionally on low, very low, and moderate-income housing.
62254.An authority may do all of the following:
(a)Provide for low- and moderate-income housing in accordance with this division.
(b)Remedy or remove a release of hazardous substances pursuant to the Polanco Redevelopment Act (Article 12.5 (commencing with Section 33459) of Chapter 4 of Part 1 of Division 24) or Chapter 6.10 (commencing with Section 25403) of Division 20 of the Health and Safety Code.
(c)Provide for seismic retrofits of existing buildings in accordance with all applicable laws and regulations.
(d)Acquire and transfer real property in accordance with Section 62260. The authority shall retain controls and establish restrictions or covenants running with the land sold or leased for private use for the periods of time and under the conditions as provided in the plan. The establishment of these controls is a public purpose under this division.
(e)Issue bonds in conformity with Article 4.5 (commencing with Section 53506) and Article 5 (commencing with Section 53510) of Chapter 3 of Part 1 of Division 2 of Title 5.
(f)(1)Borrow money, receive grants, or accept financial or other assistance or investment from the state or the federal government or any other public agency or private lending institution for any project within its area of operation, and comply with any conditions of a loan or grant. An authority may qualify for funding as a disadvantaged community pursuant to Section 79505.5 of the Water Code or as defined by Section 56033.5. An authority may also enter into an agreement with a qualified community development entity, as defined by Section 45D(c) of the Internal Revenue Code, to coordinate investments of funds derived from the New Markets Tax Credit with those of the authority in instances where coordination offers opportunities for greater efficiency of investments to improve conditions described in subdivisions (c) and (d) within the territorial jurisdiction of the authority.
(2)Receive funds allocated to it pursuant to a resolution adopted by a city, county, or special district to transfer these funds from a source described in subdivision (d), (e), or (f) of Section 53398.75, subject to any requirements upon, or imposed by, the city, county, or special district as to the use of these funds.
(g)Adopt an affordable housing plan pursuant to Section 62252.
(h)Make loans or grants for owners or tenants to improve, rehabilitate, or retrofit buildings or structures within the plan area.
(i)Construct foundations, platforms, and other like structural forms necessary for the provision or utilization of air rights sites for buildings to be used for purposes of providing affordable housing pursuant to this division.
62255.Every five years, beginning in the calendar year in which the authority has allocated a cumulative total of more than one million dollars ($1,000,000) in tax increment revenues pursuant to subdivision (a) of Section 62253 or other revenues pursuant to subdivision (b) of Section 62253, including any proceeds of a debt issuance, the authority shall contract for an independent audit conducted in accordance with generally accepted governmental auditing standards.
62256.An authority shall prepare a feasible method or plan for relocation of all of any families and persons to be temporarily or permanently displaced from housing facilities as a result of actions by the authority.
62257.An authority shall receive a priority for assistance in housing programs administered by the California Housing Finance Agency, the Department of Housing and Community Development, and other state agencies and departments.
62258.An authority may transfer its housing responsibilities to a housing authority or city or county housing department if it determines that combining funding streams will reduce administrative costs or expedites the construction of affordable housing.
62259.All housing assisted by an authority created pursuant to this division shall remain affordable for at least 55 years for rental units and 45 years for owner-occupied units.
62260.Within the area of the authority, an authority may:
(a)Purchase, lease, obtain an option upon, acquire by gift, grant, bequest, devise, or otherwise, any real or personal property, any interest in property, and any improvements on it, including repurchase of developed property previously owned by the authority. The authority shall obtain an appraisal from a qualified independent appraiser to determine the fair market value of property before the authority acquires or purchases real property.
(b)Accept, at the request of the legislative body of the community, a conveyance of real property, located either within or outside the plan area, owned by a public entity and declared surplus by the public entity, or owned by a private entity. The authority may dispose of that property to private persons or to public or private entities, by sale or long-term lease for development. All or any part of the funds derived from the sale or lease of that property may, at the discretion of the legislative body of the community, be paid to the community, or to the public entity from which any of that property was acquired.
(c)Sell, lease, grant, or donate real property owned or acquired by the authority in a plan area to a housing authority or to any public agency for public housing projects.
(d)Offer for resale property acquired by an authority for rehabilitation and resale within one year after completion of rehabilitation. Properties held by the authority in excess of a one-year period shall be listed in the authoritys annual report with information conveying the reasons that property remains unsold and indicating plans for its disposition.
62261.(a)The authority shall retain controls and establish restrictions or covenants running with land sold or leased for private use for those periods of time and under those conditions as are provided in the plan. The establishment of those controls is a public purpose under this division.
(b)An authority shall obligate lessees or purchasers of property acquired in an affordable housing project to:
(1)Use the property for the purpose designated in the affordable housing plan.
(2)Begin the project within a period of time which the authority fixes as reasonable.
(3)Comply with the covenants, conditions, or restrictions that the authority deems necessary to prevent speculation or excess profittaking in undeveloped land, including right of reverter to the agency. Covenants, conditions, and restrictions imposed by an authority may provide for the reasonable protection of lenders.
(4)Comply with other conditions that the authority deems necessary to carry out the purposes of this division.
62262.An authority created pursuant to this division shall be a local public agency subject to the Ralph M. Brown Act (Chapter 9 (commencing with Section 54950) of Part 1 of Division 2 of Title 5), the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1), and the Political Reform Act of 1974 (Title 9 (commencing with Section 81000)).
For purposes of this division, the following terms have the following meanings:
(a)Authority means an affordable housing authority created pursuant to this division.
(b)Consenting local agency means a local agency that has adopted a resolution of its governing body consenting to the affordable housing investment plan.
(c)Plan means an affordable housing investment plan adopted pursuant to Section 62252.
(d)Real property means any of the following:
(1)Land, including land under water and waterfront property.
(2)Buildings, structures, fixtures, and improvements on the land.
(3)Any property appurtenant to or used in connection with the land.
(4)Every estate, interest, privilege, easement, franchise, and right in land, including rights-of-way, terms for years, and liens, charges, or encumbrances by way of judgment, mortgage, or otherwise and the indebtedness secured by those liens.
62251.(a)A city, county, or city and county may adopt a resolution creating an affordable housing authority and a Low and Moderate Income Housing Fund which that shall be limited to providing low- and moderate-income housing pursuant to this division. An authority created pursuant to this division is a public body, corporate and politic.
(b)(1)A school entity, as defined in subdivision (f) of Section 95 of the Revenue and Taxation Code, may not participate in an authority created pursuant to this section.
(2)A successor agency, as defined in subdivision (j) of Section 34171 of the Health and Safety Code, may not participate in an authority created pursuant to this part, and an entity created pursuant to this part shall not receive any portion of the property tax revenues or other moneys distributed pursuant to Section 34188 of the Health and Safety Code.
(3)An authority formed by a city or county that created a redevelopment agency that was dissolved pursuant to Part 1.85 (commencing with Section 34170) of Division 24 of the Health and Safety Code shall not become effective until the successor agency or designated local authority for the former redevelopment agency has adopted findings of fact stating all of the following:
(A)The agency has received a finding of completion from the Department of Finance pursuant to Section 34179.7 of the Health and Safety Code.
(B)Former redevelopment agency assets that are the subject of litigation against the state, where the city or county or its successor agency or designated local authority are a named plaintiff, have not been or will not be used to benefit any efforts of an authority formed under this part unless the litigation has been resolved by entry of a final judgment by any court of competent jurisdiction and any appeals have been exhausted.
(C)The agency has complied with all orders of the Controller pursuant to Section 34167.5 of the Health and Safety Code.
(c)The governing board of an authority created pursuant to this division shall be as follows:
(1)(A)At least three members of the city council or the board of supervisors appointed by the city council or the board of supervisors.
(B)In the case of an authority created by a city and county authority jointly, at least three members of the city council and three members of the board of supervisors.
(2)At least one member of the public who lives or works within the boundaries of the city or county that created the authority.
(d)The boundaries of an authority created pursuant to this division may be identical to the boundaries of the city or county that created the authority.
62252.(a)(1)An authority created pursuant to this division shall, by resolution, adopt an affordable housing investment plan that may include either of the following:
(A)A provision for the receipt of tax increment funds generated within the area.
(B)If the boundaries of the authority are identical to the boundaries of the city or county that created the authority, a provision for the receipt of any increase of the total receipts of local sales and use tax or transactions and use tax from one year to the next collected by a consenting local agency and attributable to the area of the authority. For purposes of this division, sales and use tax and transactions and use tax revenues may be allocated and used in the same manner as tax increment.(B)A provision for the receipt of any tax revenues allocated to the authority pursuant to subdivision (b) of Section 62253.
(b)The plan shall include each of the following elements:
(1)A statement of the principal goals and objectives of the plan.
(2)An affordable housing program that describes how the authority will fulfill its objective and if duties and activities will be assigned to a city or county housing department or public housing authority.
(3)The amount available in the Low and Moderate Income Housing Fund and the estimated amounts that will be deposited in the fund during each of the next five years.
(c)Estimates of the number of new, rehabilitated, or price restricted residential units to be assisted during each of the five years and estimates of the expenditures of moneys from the Low and Moderate Income Housing Fund during each of the five years.
(4)A description of how the program will implement the requirements for expenditures of funds in the Low and Moderate Income Housing Fund over a 10-year period at various income levels.
(5)Estimates of the number of units, if any, to be developed by the authority for very low, low-, and moderate-income households during the next five years.
(6)A fiscal analysis setting forth the projected receipt of revenue and projected expenses over a five-year planning horizon, including the potential issuance of bonds backed by tax increment and increased local sales and use and transactions and use tax revenues revenues pursuant to subdivision (a) of Section 62253 or other revenues pursuant to subdivision (b) of Section 62253 during the term of the plan. Bonds shall be issued in conformity with Article 4.5 (commencing with Section 53506) and Article 5 (commencing with Section 53510) of Chapter 3 of Part 1 of Division 2 of Title 5.
(7)Time limits as follows:
(A)Forty-five years for the establishing of loans, advances, and indebtedness.
(B)Forty-five years for repayment of all of the authoritys debts and obligations, and fulfilling all of the authoritys housing obligations. The plan shall specify that an authority shall dissolve as a legal entity in no more than 45 years, and that no further taxes shall be allocated to the authority thereafter. Nothing in this subparagraph shall be interpreted to prohibit an authority from refinancing outstanding debt solely to reduce interest costs.
(d)The authority shall hold a public hearing before adopting an affordable housing investment plan. The authority shall provide notice of that hearing in accordance with the Ralph M. Brown Act (Chapter 9 (commencing with Section 54950) of Part 1 of Division 2 of Title 5). The authority shall consider any comments made on the plan at that hearing before adopting the plan.
62253.(a)At any time prior to before or after adoption of the plan, any city, county, or special district, other than a school entity as defined in subdivision (n) of Section 95 of the Revenue and Taxation Code or a successor agency as defined in subdivision (j) of Section 34171, that receives ad valorem property taxes from property located within an area, or local sales and use taxes or transactions and use taxes, area may adopt a resolution directing the county auditor-controller to allocate its share of tax increment funds within the area covered by the plan, or its increased local sales and use taxes or transactions and use taxes attributable to the area, plan to the authority. The resolution adopted pursuant to this subdivision may direct the county auditor-controller to allocate less than the full amount of the tax increment, or increased attributable tax revenues, and to establish a maximum amount of time in years that the allocation takes place. A resolution adopted pursuant to this section for an affordable housing authority may be repealed and be of no further effect by giving the county auditor-controller 90 days notice; provided, however, that the county auditor-controller shall continue to allocate to the authority the taxing entitys share of ad valorem property taxes, or local sales and use or transactions and use taxes that have been pledged to the repayment of debt issued by the authority until the debt has been fully repaid. Prior to Before adopting a resolution pursuant to this subdivision, a city, county, or special district shall approve a memorandum of understanding with the authority governing the authoritys use of tax increment funds and local sales and use and transactions and use tax revenues for administrative and overhead expenses.
(b)At any time before or after the adoption of the plan, a city, county, or special district, other than a school entity as defined in subdivision (n) of Section 95 of the Revenue and Taxation Code or a successor agency as defined in subdivision (j) of Section 34171, may adopt a resolution to allocate tax revenues of that entity to the authority, including revenues from local sales and use taxes or transactions and use taxes provided that the use of those revenues by the authority for purposes of this division is consistent with the purposes for which that tax was imposed.
(b)(c)A minimum of 95 percent of the allocated tax increment revenues pursuant to subdivision (a), and allocated local sales and use or transactions and use tax revenues pursuant to subdivision (b), shall be used to increase, improve, and preserve the communitys supply of housing for low- and moderate-income families. Not more than 5 percent of allocated revenues may be used for administration.
(c)(d)Housing funds expended by an authority shall be spent proportionally on low, very low, and moderate-income housing.
62254.An authority may do all of the following:
(a)Provide for low- and moderate-income housing in accordance with this division.
(b)Remedy or remove a release of hazardous substances pursuant to the Polanco Redevelopment Act (Article 12.5 (commencing with Section 33459) of Chapter 4 of Part 1 of Division 24) or Chapter 6.10 (commencing with Section 25403) of Division 20 of the Health and Safety Code.
(c)Provide for seismic retrofits of existing buildings in accordance with all applicable laws and regulations.
(d)Acquire and transfer real property in accordance with Section 62260. The authority shall retain controls and establish restrictions or covenants running with the land sold or leased for private use for the periods of time and under the conditions as provided in the plan. The establishment of these controls is a public purpose under this division.
(e)Issue bonds in conformity with Article 4.5 (commencing with Section 53506) and Article 5 (commencing with Section 53510) of Chapter 3 of Part 1 of Division 2 of Title 5.
(f)(1)Borrow money, receive grants, or accept financial or other assistance or investment from the state or the federal government or any other public agency or private lending institution for any project within its area of operation, and comply with any conditions of a loan or grant. An authority may qualify for funding as a disadvantaged community pursuant to Section 79505.5 of the Water Code or as defined by Section 56033.5. An authority may also enter into an agreement with a qualified community development entity, as defined by Section 45D(c) of the Internal Revenue Code, to coordinate investments of funds derived from the New Markets Tax Credit with those of the authority in instances where coordination offers opportunities for greater efficiency of investments to improve conditions described in subdivisions (c) and (d) within the territorial jurisdiction of the authority.
(2)Receive funds allocated to it pursuant to a resolution adopted by a city, county, or special district to transfer these funds from a source described in subdivision (d), (e), or (f) of Section 53398.75, subject to any requirements upon, or imposed by, the city, county, or special district as to the use of these funds.
(g)Adopt an affordable housing plan pursuant to Section 62252.
(h)Make loans or grants for owners or tenants to improve, rehabilitate, or retrofit buildings or structures within the plan area.
(i)Construct foundations, platforms, and other like structural forms necessary for the provision or utilization of air rights sites for buildings to be used for purposes of providing affordable housing pursuant to this division.
62255.Every five years, beginning in the calendar year in which the authority has allocated a cumulative total of more than one million dollars ($1,000,000) in tax increment or local sales and use or transactions and use tax revenues, revenues pursuant to subdivision (a) of Section 62253 or other revenues pursuant to subdivision (b) of Section 62253, including any proceeds of a debt issuance, the authority shall contract for an independent audit conducted in accordance with generally accepted governmental auditing standards.
62256.An authority shall prepare a feasible method or plan for relocation of all of any families and persons to be temporarily or permanently displaced from housing facilities as a result of actions by the authority.
62257.An authority shall receive a priority for assistance in housing programs administered by the California Housing Finance Agency, the Department of Housing and Community Development, and other state agencies and departments.
62258.An authority may transfer its housing responsibilities to a housing authority or city or county housing department if it determines that combining funding streams will reduce administrative costs or expedites the construction of affordable housing.
62259.All housing assisted by an authority created pursuant to this division shall remain affordable for at least 55 years for rental units and 45 years for owner-occupied units.
62260.Within the area of the authority, an authority may:
(a)Purchase, lease, obtain an option upon, acquire by gift, grant, bequest, devise, or otherwise, any real or personal property, any interest in property, and any improvements on it, including repurchase of developed property previously owned by the authority. The authority shall obtain an appraisal from a qualified independent appraiser to determine the fair market value of property before the authority acquires or purchases real property.
(b)Accept, at the request of the legislative body of the community, a conveyance of real property, located either within or outside the plan area, owned by a public entity and declared surplus by the public entity, or owned by a private entity. The authority may dispose of that property to private persons or to public or private entities, by sale or long-term lease for development. All or any part of the funds derived from the sale or lease of that property may, at the discretion of the legislative body of the community, be paid to the community, or to the public entity from which any of that property was acquired.
(c)Sell, lease, grant, or donate real property owned or acquired by the authority in a plan area to a housing authority or to any public agency for public housing projects.
(d)Offer for resale property acquired by an authority for rehabilitation and resale within one year after completion of rehabilitation. Properties held by the authority in excess of a one-year period shall be listed in the authoritys annual report with information conveying the reasons that property remains unsold and indicating plans for its disposition.
62261.(a)The authority shall retain controls and establish restrictions or covenants running with land sold or leased for private use for those periods of time and under those conditions as are provided in the plan. The establishment of those controls is a public purpose under this division.
(b)An authority shall obligate lessees or purchasers of property acquired in an affordable housing project to:
(1)Use the property for the purpose designated in the affordable housing plan.
(2)Begin the project within a period of time which the authority fixes as reasonable.
(3)Comply with the covenants, conditions, or restrictions that the authority deems necessary to prevent speculation or excess profittaking in undeveloped land, including right of reverter to the agency. Covenants, conditions, and restrictions imposed by an authority may provide for the reasonable protection of lenders.
(4)Comply with other conditions that the authority deems necessary to carry out the purposes of this division.
62262.An authority created pursuant to this division shall be a local public agency subject to the Ralph M. Brown Act (Chapter 9 (commencing with Section 54950) of Part 1 of Division 2 of Title 5), the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1), and the Political Reform Act of 1974 (Title 9 (commencing with Section 81000)).
CORRECTIONS: HeadingLine 2.For purposes of this division, the following terms have the following meanings:
(a)Authority means an affordable housing authority created pursuant to this division.
(b)Consenting local agency means a local agency that has adopted a resolution of its governing body consenting to the affordable housing investment plan.
(c)Plan means an affordable housing investment plan adopted pursuant to Section 62252.
(d)Real property means any of the following:
(1)Land, including land under water and waterfront property.
(2)Buildings, structures, fixtures, and improvements on the land.
(3)Any property appurtenant to or used in connection with the land.
(4)Every estate, interest, privilege, easement, franchise, and right in land, including rights-of-way, terms for years, and liens, charges, or encumbrances by way of judgment, mortgage, or otherwise and the indebtedness secured by those liens.
62251.(a)A city, county, or city and county may adopt a resolution creating an affordable housing authority and a Low and Moderate Income Housing Fund which shall be limited to providing low- and moderate-income housing pursuant to this division. An authority created pursuant to this division is a public body, corporate and politic.
(b)A school entity, as defined in subdivision (f) of Section 95 of the Revenue and Taxation Code, may not participate in an authority created pursuant to this section.
(c)The governing board of an authority created pursuant to this division shall be as follows:
(1)(A)At least three members of the city council or the board of supervisors appointed by the city council or the board of supervisors.
(B)In the case of an authority created by a city and county authority jointly, at least three members of the city council and three members of the board of supervisors.
(2)At least one member of the public who lives or works within the boundaries of the city or county that created the authority.
(d)The boundaries of an authority created pursuant to this division may be identical to the boundaries of the city or county that created the authority.
62252.(a)(1)An authority created pursuant to this division shall, by resolution, adopt an affordable housing investment plan that may include either of the following:
(A)A provision for the receipt of tax increment funds generated within the area.
(B)If the boundaries of the authority are identical to the boundaries of the city or county that created the authority, a provision for the receipt of any increase of the total receipts of local sales and use tax or transactions and use tax from one year to the next collected by a consenting local agency and attributable to the area of the authority. For purposes of this division, sales and use tax and transactions and use tax revenues may be allocated and used in the same manner as tax increment.
(b)The plan shall include each of the following elements:
(1)A statement of the principal goals and objectives of the plan.
(2)An affordable housing program that describes how the authority will fulfill its objective and if duties and activities will be assigned to a city or county housing department or public housing authority.
(3)The amount available in the Low and Moderate Income Housing Fund and the estimated amounts that will be deposited in the fund during each of the next five years.
(c)Estimates of the number of new, rehabilitated, or price restricted residential units to be assisted during each of the five years and estimates of the expenditures of moneys from the Low and Moderate Income Housing Fund during each of the five years.
(4)A description of how the program will implement the requirements for expenditures of funds in the Low and Moderate Income Housing Fund over a 10-year period at various income levels.
(5)Estimates of the number of units, if any, to be developed by the authority for very low, low-, and moderate-income households during the next five years.
(6)A fiscal analysis setting forth the projected receipt of revenue and projected expenses over a five-year planning horizon, including the potential issuance of bonds backed by tax increment and increased local sales and use and transactions and use tax revenues during the term of the plan. Bonds shall be issued in conformity with Article 4.5 (commencing with Section 53506) and Article 5 (commencing with Section 53510) of Chapter 3 of Part 1 of Division 2 of Title 5.
(7)Time limits as follows:
(A)Forty-five years for the establishing of loans, advances, and indebtedness.
(B)Forty-five years for repayment of all of the authoritys debts and obligations, and fulfilling all of the authoritys housing obligations. The plan shall specify that an authority shall dissolve as a legal entity in no more than 45 years, and that no further taxes shall be allocated to the authority thereafter. Nothing in this subparagraph shall be interpreted to prohibit an authority from refinancing outstanding debt solely to reduce interest costs.
62253.(a)At any time prior to or after adoption of the plan, any city, county, or special district, other than a school entity as defined in subdivision (n) of Section 95 of the Revenue and Taxation Code or a successor agency as defined in subdivision (j) of Section 34171, that receives ad valorem property taxes from property located within an area, or local sales and use taxes or transactions and use taxes, may adopt a resolution directing the county auditor-controller to allocate its share of tax increment funds within the area covered by the plan, or its increased local sales and use taxes or transactions and use taxes attributable to the area, to the authority. The resolution adopted pursuant to this subdivision may direct the county auditor-controller to allocate less than the full amount of the tax increment, or increased attributable tax revenues, and establish a maximum amount of time in years that the allocation takes place. A resolution adopted pursuant to this section for an affordable housing authority may be repealed and be of no further effect by giving the county auditor-controller 90 days notice; provided, however, that the county auditor-controller shall continue to allocate to the authority the taxing entitys share of ad valorem property taxes, or local sales and use or transactions and use taxes that have been pledged to the repayment of debt issued by the authority until the debt has been fully repaid. Prior to adopting a resolution pursuant to this subdivision, a city, county, or special district shall approve a memorandum of understanding with the authority governing the authoritys use of tax increment funds and local sales and use and transactions and use tax revenues for administrative and overhead expenses.
(b)A minimum of 95 percent of the allocated tax increment revenues and allocated local sales and use or transactions and use tax revenues shall be used to increase, improve, and preserve the communitys supply of housing for low- and moderate-income families. Not more than 5 percent of allocated revenues may be used for administration.
(c)Housing funds expended by an authority shall be spent proportionally on low, very low, and moderate-income housing.
62254.An authority may do all of the following:
(a)Provide for low- and moderate-income housing in accordance with this division.
(b)Remedy or remove a release of hazardous substances pursuant to the Polanco Redevelopment Act (Article 12.5 (commencing with Section 33459) of Chapter 4 of Part 1 of Division 24) or Chapter 6.10 (commencing with Section 25403) of Division 20 of the Health and Safety Code.
(c)Provide for seismic retrofits of existing buildings in accordance with all applicable laws and regulations.
(d)Acquire and transfer real property in accordance with Section 62260. The authority shall retain controls and establish restrictions or covenants running with the land sold or leased for private use for the periods of time and under the conditions as provided in the plan. The establishment of these controls is a public purpose under this division.
(e)Issue bonds in conformity with Article 4.5 (commencing with Section 53506) and Article 5 (commencing with Section 53510) of Chapter 3 of Part 1 of Division 2 of Title 5.
(f)(1)Borrow money, receive grants, or accept financial or other assistance or investment from the state or the federal government or any other public agency or private lending institution for any project within its area of operation, and comply with any conditions of a loan or grant. An authority may qualify for funding as a disadvantaged community pursuant to Section 79505.5 of the Water Code or as defined by Section 56033.5. An authority may also enter into an agreement with a qualified community development entity, as defined by Section 45D(c) of the Internal Revenue Code, to coordinate investments of funds derived from the New Markets Tax Credit with those of the authority in instances where coordination offers opportunities for greater efficiency of investments to improve conditions described in subdivisions (c) and (d) within the territorial jurisdiction of the authority.
(2)Receive funds allocated to it pursuant to a resolution adopted by a city, county, or special district to transfer these funds from a source described in subdivision (d), (e), or (f) of Section 53398.75, subject to any requirements upon, or imposed by, the city, county, or special district as to the use of these funds.
(g)Adopt an affordable housing plan pursuant to Section 62252.
(h)Make loans or grants for owners or tenants to improve, rehabilitate, or retrofit buildings or structures within the plan area.
(i)Construct foundations, platforms, and other like structural forms necessary for the provision or utilization of air rights sites for buildings to be used for purposes of providing affordable housing pursuant to this division.
62255.Every five years, beginning in the calendar year in which the authority has allocated a cumulative total of more than one million dollars ($1,000,000) in tax increment or local sales and use or transactions and use tax revenues, including any proceeds of a debt issuance, the authority shall contract for an independent audit conducted in accordance with generally accepted governmental auditing standards.
62256.An authority shall prepare a feasible method or plan for relocation of all of any families and persons to be temporarily or permanently displaced from housing facilities as a result of actions by the authority.
62257.An authority shall receive a priority for assistance in housing programs administered by the California Housing Finance Agency, the Department of Housing and Community Development, and other state agencies and departments.
62258.An authority may transfer its housing responsibilities to a housing authority or city or county housing department if it determines that combining funding streams will reduce administrative costs or expedites the construction of affordable housing.
62259.All housing assisted by an authority created pursuant to this division shall remain affordable for at least 55 years for rental units and 45 years for owner-occupied units.
62260.Within the area of the authority, an authority may:
(a)Purchase, lease, obtain an option upon, acquire by gift, grant, bequest, devise, or otherwise, any real or personal property, any interest in property, and any improvements on it, including repurchase of developed property previously owned by the authority. The authority shall obtain an appraisal from a qualified independent appraiser to determine the fair market value of property before the authority acquires or purchases real property.
(b)Accept, at the request of the legislative body of the community, a conveyance of real property, located either within or outside the plan area, owned by a public entity and declared surplus by the public entity, or owned by a private entity. The authority may dispose of that property to private persons or to public or private entities, by sale or long-term lease for development. All or any part of the funds derived from the sale or lease of that property may, at the discretion of the legislative body of the community, be paid to the community, or to the public entity from which any of that property was acquired.
(c)Sell, lease, grant, or donate real property owned or acquired by the authority in a plan area to a housing authority or to any public agency for public housing projects.
(d)Offer for resale property acquired by an authority for rehabilitation and resale within one year after completion of rehabilitation. Properties held by the authority in excess of a one-year period shall be listed in the authoritys annual report with information conveying the reasons that property remains unsold and indicating plans for its disposition.
62261.(a)The authority shall retain controls and establish restrictions or covenants running with land sold or leased for private use for those periods of time and under those conditions as are provided in the plan. The establishment of those controls is a public purpose under this division.
(b)An authority shall obligate lessees or purchasers of property acquired in an affordable housing project to:
(1)Use the property for the purpose designated in the affordable housing plan.
(2)Begin the project within a period of time which the authority fixes as reasonable.
(3)Comply with the covenants, conditions, or restrictions that the authority deems necessary to prevent speculation or excess profittaking in undeveloped land, including right of reverter to the agency. Covenants, conditions, and restrictions imposed by an authority may provide for the reasonable protection of lenders.
(4)Comply with other conditions that the authority deems necessary to carry out the purposes of this division.
SECTION 1.Section 62001 of the Government Code is amended to read:62001.(a)A community revitalization and investment authority is a public body, corporate and politic, with jurisdiction to carry out a community revitalization plan within a community revitalization and investment area. The authority shall be deemed to be the agency described in subdivision (b) of Section 16 of Article XVI of the California Constitution for purposes of receiving tax increment revenues. The authority shall have only those powers and duties specifically set forth in Section 62002.(b)(1)An authority may be created in any one of the following ways:(A)A city, county, or city and county may adopt a resolution creating an authority. The composition of the governing board shall be comprised as set forth in subdivision (c).(B)A city, county, city and county, and special district, as special district is defined in subdivision (m) of Section 95 of the Revenue and Taxation Code, or any combination thereof, may create an authority by entering into a joint powers agreement pursuant to Chapter 5 (commencing with Section 6500) of Division 7 of Title 1.(C)A city, county, or city and county may adopt a resolution creating an authority limited to providing low- and moderate-income housing in accordance with Part 2 (commencing with Section 62100).(2)(A)A school entity, as defined in subdivision (f) of Section 95 of the Revenue and Taxation Code, may not participate in an authority created pursuant to this part.(B)A successor agency, as defined in subdivision (j) of Section 34171 of the Health and Safety Code, may not participate in an authority created pursuant to this part, and an entity created pursuant to this part shall not receive any portion of the property tax revenues or other moneys distributed pursuant to Section 34188 of the Health and Safety Code.(3)An authority formed by a city or county that created a redevelopment agency that was dissolved pursuant to Part 1.85 (commencing with Section 34170) of Division 24 of the Health and Safety Code shall not become effective until the successor agency or designated local authority for the former redevelopment agency has adopted findings of fact stating all of the following:(A)The agency has received a finding of completion from the Department of Finance pursuant to Section 34179.7 of the Health and Safety Code.(B)Former redevelopment agency assets which are the subject of litigation against the state, where the city or county or its successor agency or designated local authority are a named plaintiff, have not been or will not be used to benefit any efforts of an authority formed under this part unless the litigation has been resolved by entry of a final judgment by any court of competent jurisdiction and any appeals have been exhausted.(C)The agency has complied with all orders of the Controller pursuant to Section 34167.5 of the Health and Safety Code.(c)(1)The governing board of an authority created pursuant to subparagraph (A) of paragraph (1) of subdivision (b) shall be appointed by the legislative body of the city, county, or city and county that created the authority and shall include three members of the legislative body of the city, county, or city and county that created the authority and two public members. The appointment of the two public members shall be subject to Section 54974. The two public members shall live or work within the community revitalization and investment area.(2)The governing body of the authority created pursuant to subparagraph (B) of paragraph (1) of subdivision (b) shall be comprised of a majority of members from the legislative bodies of the public agencies that created the authority and a minimum of two public members who live or work within the community revitalization and investment area. The majority of the board shall appoint the public members to the governing body. The appointment of the public members shall be subject to Section 54974.(3)The governing board of an authority created pursuant to subparagraph (C) of paragraph (1) of subdivision (b) shall be composed as follows:(A)Three members of the city council or the board of supervisors appointed by the city council or the board of supervisors.(B)The treasurer of the city or county that created the authority.(C)One member of the public who lives within the boundaries of the authority appointed by the city council or board of supervisors.(d)An authority may carry out a community revitalization plan within a community revitalization and investment area. Not less than 80 percent of the land calculated by census tracts, census block groups, as defined by the United States Census Bureau, or any combination of both within the area shall be characterized by both of the following conditions:(1)An annual median household income that is less than, at the option of the authority, 80 percent of the statewide, countywide, or citywide annual median income.(2)Three of the following four conditions:(A)An unemployment rate that is at least 3 percentage points higher than the statewide average annual unemployment rate, as defined by the report on labor market information published by the Employment Development Department in March of the year in which the community revitalization plan is prepared. In determining the unemployment rate within the community revitalization and investment area, an authority may use unemployment data from the periodic American Community Survey published by the United States Census Bureau.(B)Crime rates, as documented by records maintained by the law enforcement agency that has jurisdiction in the proposed plan area for violent or property crime offenses, that are at least 5 percent higher than the statewide average crime rate for violent or property crime offenses, as defined by the most recent annual report of the Criminal Justice Statistics Center within the Department of Justice, when data is available on the Attorney Generals Internet Web site. The crime rate shall be calculated by taking the local crime incidents for violent or property crimes, or any offense within those categories, for the most recent calendar year for which the Department of Justice maintains data, divided by the total population of the proposed plan area, multiplied by 100,000. If the local crime rate for the proposed plan area exceeds the statewide average rate for either violent or property crime, or any offense within these categories, by more than 5 percent, then the condition described in this subparagraph shall be met.(C)Deteriorated or inadequate infrastructure, including streets, sidewalks, water supply, sewer treatment or processing, and parks.(D)Deteriorated commercial or residential structures.(e)As an alternative to subdivision (d), an authority may also carry out a community revitalization plan within a community revitalization and investment area if it meets either of the following conditions:(1)The area is established within a former military base that is principally characterized by deteriorated or inadequate infrastructure and structures. Notwithstanding subdivision (c), the governing board of an authority established within a former military base shall include a member of the military base closure commission as a public member.(2)The census tracts or census block groups, as defined by the United States Census Bureau, within the area are situated within a disadvantaged community as described in Section 39711 of the Health and Safety Code.(f)An authority created pursuant to this part shall be a local public agency subject to the Ralph M. Brown Act (Chapter 9 (commencing with Section 54950) of Part 1 of Division 2 of Title 5), the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1), and the Political Reform Act of 1974 (Title 9 (commencing with Section 81000)).(g)(1)At any time after the authority is authorized to transact business and exercise its powers, the legislative body or bodies of the local government or governments that created the authority may appropriate the amounts the legislative body or bodies deem necessary for the administrative expenses and overhead of the authority.(2)The money appropriated may be paid to the authority as a grant to defray the expenses and overhead, or as a loan to be repaid upon the terms and conditions as the legislative body may provide. If appropriated as a loan, the property owners and residents within the plan area shall be made third-party beneficiaries of the repayment of the loan. In addition to the common understanding and usual interpretation of the term, administrative expense includes, but is not limited to, expenses of planning and dissemination of information.SEC. 2.Section 62003 of the Government Code is amended to read:62003.An authority shall adopt a community revitalization and investment plan that may include a provision for the receipt of tax increment funds generated within the area according to Section 62005, or includes the receipt of the increase in total receipts of a local sales and use tax or transactions and use tax according to Section 62003.5, or both, provided the plan includes each of the following elements:(a)A statement of the principal goals and objectives of the plan including territory to be covered by the plan.(b)A description of the deteriorated or inadequate infrastructure within the area and a program for construction of adequate infrastructure or repair or upgrading of existing infrastructure.(c)A housing program that describes how the authority will comply with Part 2 (commencing with Section 62100). The program shall include the following information:(1)The amount available in the Low and Moderate Income Housing Fund and the estimated amounts that will be deposited in the fund during each of the next five years.(2)Estimates of the number of new, rehabilitated, or price restricted residential units to be assisted during each of the five years and estimates of the expenditures of moneys from the Low and Moderate Income Housing Fund during each of the five years.(3)A description of how the program will implement the requirements for expenditures of funds in the Low and Moderate Income Housing Fund over a 10-year period for various groups as required by Chapter 2 (commencing with Section 62115) of Part 2.(4)Estimates of the number of units, if any, developed by the authority for very low, low-, and moderate-income households during the next five years.(d)A program to remedy or remove a release of hazardous substances, if applicable.(e)A program to provide funding for or otherwise facilitate the economic revitalization of the area.(f)A fiscal analysis setting forth the projected receipt of revenue and projected expenses over a five-year planning horizon, including the potential issuance of bonds backed by tax increment during the term of the plan. Bonds shall be issued in conformity with Article 4.5 (commencing with Section 53506) and Article 5 (commencing with Section 53510) of Chapter 3 of Part 1 of Division 2 of Title 5. An authority shall not spend revenue for any purpose that is not identified as part of a program described in subdivisions (b), (c), (d), and (e).(g)Time limits that may not exceed the following:(1)(A)For an authority created pursuant to subparagraph (A) or (B) of paragraph (1) of subdivision (b) of Section 62001, 30 years for establishing loans, advances, and indebtedness.(B)For an authority created pursuant to subparagraph (C) of paragraph (1) of subdivision (b) of Section 62001, 45 years for establishing loans, advances, and indebtedness.(2)Forty-five years for the repayment of all of the authoritys debts and obligations, and fulfilling all of the authoritys housing obligations. The plan shall specify that an authority shall dissolve as a legal entity in no more than 45 years, and no further taxes shall be allocated to the authority pursuant to Section 62005. Nothing in this paragraph shall be interpreted to prohibit an authority from refinancing outstanding debt solely to reduce interest costs.(h)A determination that the community revitalization investment area complies with the conditions described in subdivision (d) or (e) of Section 62001.SEC. 3.Section 62003.5 is added to the Government Code, to read:62003.5.(a)In addition to the provision for the receipt of tax increment funds generated within the area of the authority pursuant to Section 62005, an authority created pursuant to subparagraph (C) of paragraph (1) of subdivision (b) of Section 62001 may include a provision for the receipt of any increase of the total receipts of local sales and use tax or transactions and use tax from one year to the next collected by a consenting local agency and attributable to the area of the authority. The authority shall comply with Section 62003 in adopting a community revitalization and investment plan that includes these provisions.(b)For purposes of this division, sales and use tax and transactions and use tax revenues described in subdivision (a) may be allocated and used in the same manner as tax increment.(c)For purposes of this section, the term consenting local agency has the same meaning as used in used in subdivision (b) of Section of 62005.SEC. 4.Section 62004 of the Government Code is amended to read:62004.(a)The authority shall consider adoption of the plan at three public hearings that shall take place at least 30 days apart. At the first public hearing, the authority shall hear all written and oral comments but take no action. At the second public hearing, the authority shall consider any additional written and oral comments and take action to modify or reject the plan. If the plan is not rejected at the second public hearing, then the authority shall conduct a protest proceeding at the third public hearing to consider whether the property owners and residents within the plan area wish to present oral or written protests against the adoption of the plan.(b)The draft plan shall be made available to the public and to each property owner within the area at a meeting held at least 30 days prior to the notice given for the first public hearing. The purposes of the meeting shall be to allow the staff of the authority to present the draft plan, answer questions about the plan, and consider comments about the plan.(c)(1)Notice of the meeting required by subdivision (b) and the public hearings required by this subdivision shall be given in accordance with subdivision (j). The notice shall do all of the following, as applicable:(A)Describe specifically the boundaries of the proposed area. The boundaries of an authority created pursuant to subparagraph (C) of paragraph (1) of subdivision (b) of Section 62001 may be identical to the boundaries of the city or county that created the authority.(B)Describe the purpose of the plan.(C)State the day, hour, and place when and where any and all persons having any comments on the proposed plan may appear to provide written or oral comments to the authority.(D)Notice of second public hearing shall include a summary of the changes made to the plan as a result of the oral and written testimony received at or before the public hearing and shall identify a location accessible to the public where the plan proposed to be presented and adopted at the second public hearing can be reviewed.(E)Notice of the third public hearing to consider any written or oral protests shall contain a copy of the final plan adopted pursuant to subdivision (a), and shall inform the property owner and resident of his or her right to submit an oral or written protest before the close of the public hearing. The protest may state that the property owner or resident objects to the authority taking action to implement the plan.(2)At the third public hearing, the authority shall consider all written and oral protests received prior to the close of the public hearing and shall terminate the proceedings or adopt the plan subject to confirmation by the voters at an election called for that purpose. The authority shall terminate the proceedings if there is a majority protest. A majority protest exists if protests have been filed representing over 50 percent of the combined number of property owners and residents in the area who are at least 18 years of age. An election shall be called if between 25 percent and 50 percent of the combined number of property owners and residents in the area who are at least 18 years of age file a protest.(d)An election required pursuant to paragraph (2) of subdivision (c) shall be held within 90 days of the public hearing and may be held by mail-in ballot. The authority shall adopt, at a duly noticed public hearing, procedures for this election.(e)If a majority of the property owners and residents vote against the plan, then the authority shall not take any further action to implement the proposed plan. The authority shall not propose a new or revised plan to the affected property owners and residents for at least one year following the date of an election in which the plan was rejected.(f)At the hour set in the notice required by subdivision (a), the authority shall consider all written and oral comments.(g)If less than 25 percent of the combined number of property owners and residents in the area who are at least 18 years of age file a protest, the authority may adopt the plan at the conclusion of the third public hearing by ordinance. The ordinance adopting the plan shall be subject to referendum as prescribed by law.(h)For the purposes of Section 62005, the plan shall be the plan adopted pursuant to this section.(i)The authority shall consider and adopt an amendment or amendments to a plan in accordance with the provisions of this section.(j)The authority shall post notice of each meeting or public hearing required by this section in an easily identifiable and accessible location on the authoritys Internet Web site and shall mail a written notice of the meeting or public hearing to each owner of land and each resident at least 10 days prior to the meeting or public hearing.(1)Notice of the first public hearing shall also be published not less than once a week for four successive weeks prior to the first public hearing in a newspaper of general circulation published in the county in which the area lies.(2)Notice of the second public hearing shall also be published not less than 10 days prior to the second public hearing in a newspaper of general circulation in the county in which the area lies.(3)Notice of the third public hearing shall also be published not less than 10 days prior to the third public hearing in a newspaper of general circulation in the county in which the area lies.(a)A community revitalization and investment authority is a public body, corporate and politic, with jurisdiction to carry out a community revitalization plan within a community revitalization and investment area. The authority shall be deemed to be the agency described in subdivision (b) of Section 16 of Article XVI of the California Constitution for purposes of receiving tax increment revenues. The authority shall have only those powers and duties specifically set forth in Section 62002.
(b)(1)An authority may be created in any one of the following ways:
(A)A city, county, or city and county may adopt a resolution creating an authority. The composition of the governing board shall be comprised as set forth in subdivision (c).
(B)A city, county, city and county, and special district, as special district is defined in subdivision (m) of Section 95 of the Revenue and Taxation Code, or any combination thereof, may create an authority by entering into a joint powers agreement pursuant to Chapter 5 (commencing with Section 6500) of Division 7 of Title 1.
(C)A city, county, or city and county may adopt a resolution creating an authority limited to providing low- and moderate-income housing in accordance with Part 2 (commencing with Section 62100).
(2)(A)A school entity, as defined in subdivision (f) of Section 95 of the Revenue and Taxation Code, may not participate in an authority created pursuant to this part.
(B)A successor agency, as defined in subdivision (j) of Section 34171 of the Health and Safety Code, may not participate in an authority created pursuant to this part, and an entity created pursuant to this part shall not receive any portion of the property tax revenues or other moneys distributed pursuant to Section 34188 of the Health and Safety Code.
(3)An authority formed by a city or county that created a redevelopment agency that was dissolved pursuant to Part 1.85 (commencing with Section 34170) of Division 24 of the Health and Safety Code shall not become effective until the successor agency or designated local authority for the former redevelopment agency has adopted findings of fact stating all of the following:
(A)The agency has received a finding of completion from the Department of Finance pursuant to Section 34179.7 of the Health and Safety Code.
(B)Former redevelopment agency assets which are the subject of litigation against the state, where the city or county or its successor agency or designated local authority are a named plaintiff, have not been or will not be used to benefit any efforts of an authority formed under this part unless the litigation has been resolved by entry of a final judgment by any court of competent jurisdiction and any appeals have been exhausted.
(C)The agency has complied with all orders of the Controller pursuant to Section 34167.5 of the Health and Safety Code.
(c)(1)The governing board of an authority created pursuant to subparagraph (A) of paragraph (1) of subdivision (b) shall be appointed by the legislative body of the city, county, or city and county that created the authority and shall include three members of the legislative body of the city, county, or city and county that created the authority and two public members. The appointment of the two public members shall be subject to Section 54974. The two public members shall live or work within the community revitalization and investment area.
(2)The governing body of the authority created pursuant to subparagraph (B) of paragraph (1) of subdivision (b) shall be comprised of a majority of members from the legislative bodies of the public agencies that created the authority and a minimum of two public members who live or work within the community revitalization and investment area. The majority of the board shall appoint the public members to the governing body. The appointment of the public members shall be subject to Section 54974.
(3)The governing board of an authority created pursuant to subparagraph (C) of paragraph (1) of subdivision (b) shall be composed as follows:
(A)Three members of the city council or the board of supervisors appointed by the city council or the board of supervisors.
(B)The treasurer of the city or county that created the authority.
(C)One member of the public who lives within the boundaries of the authority appointed by the city council or board of supervisors.
(d)An authority may carry out a community revitalization plan within a community revitalization and investment area. Not less than 80 percent of the land calculated by census tracts, census block groups, as defined by the United States Census Bureau, or any combination of both within the area shall be characterized by both of the following conditions:
(1)An annual median household income that is less than, at the option of the authority, 80 percent of the statewide, countywide, or citywide annual median income.
(2)Three of the following four conditions:
(A)An unemployment rate that is at least 3 percentage points higher than the statewide average annual unemployment rate, as defined by the report on labor market information published by the Employment Development Department in March of the year in which the community revitalization plan is prepared. In determining the unemployment rate within the community revitalization and investment area, an authority may use unemployment data from the periodic American Community Survey published by the United States Census Bureau.
(B)Crime rates, as documented by records maintained by the law enforcement agency that has jurisdiction in the proposed plan area for violent or property crime offenses, that are at least 5 percent higher than the statewide average crime rate for violent or property crime offenses, as defined by the most recent annual report of the Criminal Justice Statistics Center within the Department of Justice, when data is available on the Attorney Generals Internet Web site. The crime rate shall be calculated by taking the local crime incidents for violent or property crimes, or any offense within those categories, for the most recent calendar year for which the Department of Justice maintains data, divided by the total population of the proposed plan area, multiplied by 100,000. If the local crime rate for the proposed plan area exceeds the statewide average rate for either violent or property crime, or any offense within these categories, by more than 5 percent, then the condition described in this subparagraph shall be met.
(C)Deteriorated or inadequate infrastructure, including streets, sidewalks, water supply, sewer treatment or processing, and parks.
(D)Deteriorated commercial or residential structures.
(e)As an alternative to subdivision (d), an authority may also carry out a community revitalization plan within a community revitalization and investment area if it meets either of the following conditions:
(1)The area is established within a former military base that is principally characterized by deteriorated or inadequate infrastructure and structures. Notwithstanding subdivision (c), the governing board of an authority established within a former military base shall include a member of the military base closure commission as a public member.
(2)The census tracts or census block groups, as defined by the United States Census Bureau, within the area are situated within a disadvantaged community as described in Section 39711 of the Health and Safety Code.
(f)An authority created pursuant to this part shall be a local public agency subject to the Ralph M. Brown Act (Chapter 9 (commencing with Section 54950) of Part 1 of Division 2 of Title 5), the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1), and the Political Reform Act of 1974 (Title 9 (commencing with Section 81000)).
(g)(1)At any time after the authority is authorized to transact business and exercise its powers, the legislative body or bodies of the local government or governments that created the authority may appropriate the amounts the legislative body or bodies deem necessary for the administrative expenses and overhead of the authority.
(2)The money appropriated may be paid to the authority as a grant to defray the expenses and overhead, or as a loan to be repaid upon the terms and conditions as the legislative body may provide. If appropriated as a loan, the property owners and residents within the plan area shall be made third-party beneficiaries of the repayment of the loan. In addition to the common understanding and usual interpretation of the term, administrative expense includes, but is not limited to, expenses of planning and dissemination of information.
SEC. 2.Section 62003 of the Government Code is amended to read:62003.An authority shall adopt a community revitalization and investment plan that may include a provision for the receipt of tax increment funds generated within the area according to Section 62005, or includes the receipt of the increase in total receipts of a local sales and use tax or transactions and use tax according to Section 62003.5, or both, provided the plan includes each of the following elements:
(a)A statement of the principal goals and objectives of the plan including territory to be covered by the plan.
(b)A description of the deteriorated or inadequate infrastructure within the area and a program for construction of adequate infrastructure or repair or upgrading of existing infrastructure.
(c)A housing program that describes how the authority will comply with Part 2 (commencing with Section 62100). The program shall include the following information:
(1)The amount available in the Low and Moderate Income Housing Fund and the estimated amounts that will be deposited in the fund during each of the next five years.
(2)Estimates of the number of new, rehabilitated, or price restricted residential units to be assisted during each of the five years and estimates of the expenditures of moneys from the Low and Moderate Income Housing Fund during each of the five years.
(3)A description of how the program will implement the requirements for expenditures of funds in the Low and Moderate Income Housing Fund over a 10-year period for various groups as required by Chapter 2 (commencing with Section 62115) of Part 2.
(4)Estimates of the number of units, if any, developed by the authority for very low, low-, and moderate-income households during the next five years.
(d)A program to remedy or remove a release of hazardous substances, if applicable.
(e)A program to provide funding for or otherwise facilitate the economic revitalization of the area.
(f)A fiscal analysis setting forth the projected receipt of revenue and projected expenses over a five-year planning horizon, including the potential issuance of bonds backed by tax increment during the term of the plan. Bonds shall be issued in conformity with Article 4.5 (commencing with Section 53506) and Article 5 (commencing with Section 53510) of Chapter 3 of Part 1 of Division 2 of Title 5. An authority shall not spend revenue for any purpose that is not identified as part of a program described in subdivisions (b), (c), (d), and (e).
(g)Time limits that may not exceed the following:
(1)Thirty(A)For an authority created pursuant to subparagraph (A) or (B) of paragraph (1) of subdivision (b) of Section 62001, 30 years for establishing loans, advances advances, and indebtedness.
(B)For an authority created pursuant to subparagraph (C) of paragraph (1) of subdivision (b) of Section 62001, 45 years for establishing loans, advances, and indebtedness.
(2)Forty-five years for the repayment of all of the authoritys debts and obligations, and fulfilling all of the authoritys housing obligations. The plan shall specify that an authority shall dissolve as a legal entity in no more than 45 years, and no further taxes shall be allocated to the authority pursuant to Section 62005. Nothing in this paragraph shall be interpreted to prohibit an authority from refinancing outstanding debt solely to reduce interest costs.
(h)A determination that the community revitalization investment area complies with the conditions described in subdivision (d) or (e) of Section 62001.
SEC. 3.Section 62003.5 is added to the Government Code, to read:62003.5.(a)In addition to the provision for the receipt of tax increment funds generated within the area of the authority pursuant to Section 62005, an authority created pursuant to subparagraph (C) of paragraph (1) of subdivision (b) of Section 62001 may include a provision for the receipt of any increase of the total receipts of local sales and use tax or transactions and use tax from one year to the next collected by a consenting local agency and attributable to the area of the authority. The authority shall comply with Section 62003 in adopting a community revitalization and investment plan that includes these provisions.
(b)For purposes of this division, sales and use tax and transactions and use tax revenues described in subdivision (a) may be allocated and used in the same manner as tax increment.
(c)For purposes of this section, the term consenting local agency has the same meaning as used in used in subdivision (b) of Section of 62005.
SEC. 4.Section 62004 of the Government Code is amended to read:62004.(a)The authority shall consider adoption of the plan at three public hearings that shall take place at least 30 days apart. At the first public hearing, the authority shall hear all written and oral comments but take no action. At the second public hearing, the authority shall consider any additional written and oral comments and take action to modify or reject the plan. If the plan is not rejected at the second public hearing, then the authority shall conduct a protest proceeding at the third public hearing to consider whether the property owners and residents within the plan area wish to present oral or written protests against the adoption of the plan.
(b)The draft plan shall be made available to the public and to each property owner within the area at a meeting held at least 30 days prior to the notice given for the first public hearing. The purposes of the meeting shall be to allow the staff of the authority to present the draft plan, answer questions about the plan, and consider comments about the plan.
(c)(1)Notice of the meeting required by subdivision (b) and the public hearings required by this subdivision shall be given in accordance with subdivision (j). The notice shall do all of the following, as applicable:
(A)Describe specifically the boundaries of the proposed area. The boundaries of an authority created pursuant to subparagraph (C) of paragraph (1) of subdivision (b) of Section 62001 may be identical to the boundaries of the city or county that created the authority.
(B)Describe the purpose of the plan.
(C)State the day, hour, and place when and where any and all persons having any comments on the proposed plan may appear to provide written or oral comments to the authority.
(D)Notice of second public hearing shall include a summary of the changes made to the plan as a result of the oral and written testimony received at or before the public hearing and shall identify a location accessible to the public where the plan proposed to be presented and adopted at the second public hearing can be reviewed.
(E)Notice of the third public hearing to consider any written or oral protests shall contain a copy of the final plan adopted pursuant to subdivision (a), and shall inform the property owner and resident of his or her right to submit an oral or written protest before the close of the public hearing. The protest may state that the property owner or resident objects to the authority taking action to implement the plan.
(2)At the third public hearing, the authority shall consider all written and oral protests received prior to the close of the public hearing and shall terminate the proceedings or adopt the plan subject to confirmation by the voters at an election called for that purpose. The authority shall terminate the proceedings if there is a majority protest. A majority protest exists if protests have been filed representing over 50 percent of the combined number of property owners and residents in the area who are at least 18 years of age. An election shall be called if between 25 percent and 50 percent of the combined number of property owners and residents in the area who are at least 18 years of age file a protest.
(d)An election required pursuant to paragraph (2) of subdivision (c) shall be held within 90 days of the public hearing and may be held by mail-in ballot. The authority shall adopt, at a duly noticed public hearing, procedures for this election.
(e)If a majority of the property owners and residents vote against the plan, then the authority shall not take any further action to implement the proposed plan. The authority shall not propose a new or revised plan to the affected property owners and residents for at least one year following the date of an election in which the plan was rejected.
(f)At the hour set in the notice required by subdivision (a), the authority shall consider all written and oral comments.
(g)If less than 25 percent of the combined number of property owners and residents in the area who are at least 18 years of age file a protest, the authority may adopt the plan at the conclusion of the third public hearing by ordinance. The ordinance adopting the plan shall be subject to referendum as prescribed by law.
(h)For the purposes of Section 62005, the plan shall be the plan adopted pursuant to this section.
(i)The authority shall consider and adopt an amendment or amendments to a plan in accordance with the provisions of this section.
(j)The authority shall post notice of each meeting or public hearing required by this section in an easily identifiable and accessible location on the authoritys Internet Web site and shall mail a written notice of the meeting or public hearing to each owner of land and each resident at least 10 days prior to the meeting or public hearing.
(1)Notice of the first public hearing shall also be published not less than once a week for four successive weeks prior to the first public hearing in a newspaper of general circulation published in the county in which the area lies.
(2)Notice of the second public hearing shall also be published not less than 10 days prior to the second public hearing in a newspaper of general circulation in the county in which the area lies.
(3)Notice of the third public hearing shall also be published not less than 10 days prior to the third public hearing in a newspaper of general circulation in the county in which the area lies.
|
Date
|
Status
|
|---|---|
| Oct 13, 2017 | Chaptered by Secretary of State - Chapter 764, Statutes of 2017. |
| Oct 13, 2017 | Approved by the Governor. |
| Sep 21, 2017 | Enrolled and presented to the Governor at 3:30 p.m. |
| Sep 13, 2017 | Assembly Rule 77(a) suspended. |
| Sep 12, 2017 | In Assembly. Concurrence in Senate amendments pending. May be considered on or after September 14 pursuant to Assembly Rule 77. |
| Sep 11, 2017 | Read third time. Passed. Ordered to the Assembly. |
| Aug 29, 2017 | Read second time. Ordered to third reading. |
| Aug 28, 2017 | From committee: Be ordered to second reading pursuant to Senate Rule 28.8. |
| Aug 21, 2017 | In committee: Hearing postponed by committee. |
| Aug 21, 2017 | From committee chair, with author's amendments: Amend, and re-refer to committee. Read second time, amended, and re-referred to Com. on APPR. |
| Jul 18, 2017 | Read second time and amended. Re-referred to Com. on APPR. |
| Jul 17, 2017 | From committee: Amend, and do pass as amended and re-refer to Com. on APPR. (Ayes 10. Noes 2.) (July 11). |
| Jul 5, 2017 | Read second time and amended. Re-referred to Com. on T. & H. |
| Jul 3, 2017 | From committee: Amend, and do pass as amended and re-refer to Com. on T. & H. (Ayes 4. Noes 1.) (June 28). |
| Jun 21, 2017 | From committee chair, with author's amendments: Amend, and re-refer to committee. Read second time, amended, and re-referred to Com. on GOV. & F. |
| Jun 14, 2017 | Referred to Coms. on GOV. & F. and T. & H. |
| Jun 1, 2017 | In Senate. Read first time. To Com. on RLS. for assignment. |
| May 31, 2017 | Read third time. Passed. Ordered to the Senate. (Ayes 52. Noes 23. Page 1968.) |
| May 25, 2017 | Read second time. Ordered to third reading. |
| May 24, 2017 | From committee: Do pass. (Ayes 12. Noes 5.) (May 24). |
| May 2, 2017 | Re-referred to Com. on APPR. |
| May 1, 2017 | Read second time and amended. |
| Apr 27, 2017 | From committee: Amend, and do pass as amended and re-refer to Com. on APPR. (Ayes 5. Noes 2.) (April 26). |
| Apr 24, 2017 | Re-referred to Com. on H. & C.D. |
| Apr 21, 2017 | Measure version as amended on April 20 corrected. |
| Apr 20, 2017 | From committee: Do pass and re-refer to Com. on H. & C.D. (Ayes 7. Noes 2.) (April 19). Re-referred to Com. on H. & C.D. |
| Apr 17, 2017 | Re-referred to Com. on L. GOV. |
| Apr 6, 2017 | From committee chair, with author's amendments: Amend, and re-refer to Com. on L. GOV. Read second time and amended. |
| Mar 23, 2017 | In committee: Hearing postponed by committee. |
| Mar 16, 2017 | Referred to Coms. on L. GOV. and H. & C.D. |
| Feb 19, 2017 | From printer. May be heard in committee March 21. |
| Feb 17, 2017 | Read first time. To print. |
|
Date
|
Description
|
Location
|
Votes
|
|
|---|---|---|---|---|
| Sep 13, 2017 | AB 1598 MULLIN Concurrence in Senate Amendments | Assembly Floor |
Passed |
|
| Sep 11, 2017 | Assembly 3rd Reading AB1598 Mullin et al. By Dodd | Senate Floor |
Passed |
|
| Jul 11, 2017 | Do pass as amended, but first amend, and re-refer to the Committee on [Appropriations] | Senate Standing Committee on Transportation and Housing |
Passed |
|
| Jun 28, 2017 | Do pass as amended, but first amend, and re-refer to the Committee on [Transportation and Housing] | Senate Standing Committee on Governance and Finance |
Passed |
|
| May 31, 2017 | AB 1598 MULLIN Assembly Third Reading | Assembly Floor |
Passed |
|
| May 24, 2017 | Do pass. | Assembly Standing Committee on Appropriations |
Passed |
|
| Apr 26, 2017 | Do pass as amended and be re-referred to the Committee on [Appropriations] | Assembly Standing Committee on Housing and Community Development |
Passed |
|
| Apr 19, 2017 | Do pass and be re-referred to the Committee on [Housing and Community Development] | Assembly Standing Committee on Local Government |
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
|
|---|---|---|
| Alameda County Board of Supervisors | ** Support | Aug 30, 2017 |
| Assembly Floor: 52-23, 5 | ** Against | Aug 30, 2017 |
| BRIDGE Housing | ** Support | Aug 30, 2017 |
| California Apartment Association | ** Support | Aug 30, 2017 |
| California Association Of Realtors | ** Support | Aug 30, 2017 |
| California Housing Partnership Corporation | ** Support | Aug 30, 2017 |
| City of Union City | ** Support | Aug 30, 2017 |
| EAH Housing | ** Support | Aug 30, 2017 |
| hcl architecture | ** Support | Aug 30, 2017 |
| Herman Coliver Locus Architecture | ** Support | Apr 18, 2017 |
| Herman Coliver Locus Architecture | ** Support | Apr 18, 2017 |
| Howard Jarvis Taxpayer Association | ** Against | Aug 30, 2017 |
| John Stewart Company | ** Support | Aug 30, 2017 |
| Non Profit Housing Association of Northern California | * Support | Apr 26, 2017 |
| Non-Profit Housing Association of Northern CA | ** Support | Aug 30, 2017 |
| Resources for Community Development | ** Support | Aug 30, 2017 |
| Robert Herman of Herman Coliver Locus Architecture | ** Support | Apr 24, 2017 |
CONCURRENCE IN SENATE AMENDMENTS
CSA1 Bill Id:AB 1598
Author:(Mullin)
As Amended Ver:August 21, 2017
Majority vote
ASSEMBLY: | 52-23 | (May 31, 2017) | SENATE: | 28-11 | (September 11, 2017) |
Original Committee Reference: L. GOV.
SUMMARY: Allows a city or county to create an affordable housing authority (authority) to fund affordable housing and affordable workforce housing, similar to a Community Revitalization and Investment Authority (CRIA).
The Senate amendments:
- Define "affordable workforce housing" to mean housing with an affordable housing cost, as defined in Health and Safety Code Section 50052.5, or affordable rent, as defined in Health and Safety Code Section 50053, for households whose gross income does not exceed 120% of the area median income.
- Clarify that an authority may also provide affordable workforce housing, in addition to affordable housing, and deems the authority to be the "agency" described in California Constitution Article XVI Section 16(b) of for the purposes of receiving property tax increment revenues.
- Specify that the governing board of an authority shall be an odd number of members with at least five or seven members in total.
- Clarify that an authority shall create a Low and Moderate Income Housing Fund.
- Require an authority to include in the plan a feasible method or plan for relocation of families and persons to be temporarily or permanently displaced from housing facilities in the plan area, and specify those requirements in the bill.
- Allow a city, county, or special district, to adopt a resolution to allocate tax revenues of that entity to the authority, including revenues derived from sales and use taxes imposed pursuant to the Bradley-Burns Uniform Local Sales and Use Tax Law or transactions and use taxes imposed pursuant to the Transactions and Use Tax Law, provided that both of the following apply:
- The use of those revenues by the authority for purposes of the bill is consistent with the purposes for which that tax was imposed; and,
- The boundaries of the authority are coterminous with the city or county that established the authority.
- Require housing funds expended by an authority to be spent in proportion to the share of the regional housing need allocated to the city, county, or city and county for each income category for low, very low, and moderate-income housing.
- Add in language requiring replacement dwelling units, as specified.
- Require an authority to execute an enforceable and verifiable agreement with a public agency, a recorded deed restriction, or other legal document that restricts the project’s usage and that provides that the units designated for use by lower income households are continuously available to or occupied by lower income households at rents that do not exceed specified limits, or, to the extent that the terms of federal, state, or local financing or financial assistance conflicts, as provided, rents that do not exceed those prescribed by the terms of the financing or financial assistance.
- State that the Legislature finds and declares that the allocation of revenues derived from a sales and use tax or a transactions and use tax to an affordable housing authority pursuant to Division 5 (commencing with Section 62250) of Title 6 of the Government Code, as added by this act, is not subject to the California Constitution, Article XIII, Section 29 because an authority is not a city, county, or city and county within the meaning of that provision, but is rather a separate political entity as described in Government Code Section 62251(a), as added by this act.
FISCAL EFFECT: According to the Senate Appropriations Committee, pursuant to Senate Rule 28.8, negligible state costs.
COMMENTS:
- Bill Summary. This bill authorizes a city or county to create an affordable housing authority, modelled after CRIA law, to fund activities related to the promotion and development of affordable housing. The bill's provisions specify that the authority can capture property tax increment, or revenues from a local sales and use tax or transactions and use tax, provided that the use of those revenues by the authority is consistent with the purposes for which that tax was imposed. The bill also contains the process for forming the authority, the governance structure of the authority, and requires the authority to adopt an affordable housing investment plan and what that plan must contain, as well as a requirement for the authority to comply with the Ralph M. Brown Act, Public Records Act, and the Political Reform Act.
The bill is sponsored by the author.
- Author's Statement. According to the author, "Over the past six years, cities and counties in California have lost nearly 70% of all state and federal funding formerly available for affordable housing, and even deeper cuts to the US Department of Housing and Urban Development (HUD) are anticipated. According to the California Housing Partnership, there is a shortfall of over 1.54 million homes affordable to lower-income families and not one county in the state has a sufficient number of affordable rental homes.
"This bill expands AB 2 (Alejo) [Chapter 319, Statutes of 2015]) which created Community Revitalization and Investment Authorities (CRIAs). For many communities, the "blight" findings and indices of crime and unemployment required under AB 2 are not applicable metrics. Many cities in the Bay Area, for example, are not lacking in private investment in commercial and office development, but are, instead, seeing a wide and ever-growing job-housing gap that far outpaces the production of new affordable homes.
"Therefore, localities need a tool to capture the growth in tax increment produced by new commercial development and invest those revenues in the production of homes affordable to the local workforce."
- Background on CRIAs. Over the last 60 years, redevelopment agencies used tax increment to finance affordable housing, community development, and economic development projects. The dissolution of redevelopment agencies created a void and as such, an effort to create new tools that would support community and economic development activities was undertaken. AB 2 allowed local government entities, excluding schools, to form a CRIA to collect property tax increment and issue debt. The CRIA could use its powers to invest in disadvantaged communities with a high crime rate, high unemployment, and deteriorated and inadequate infrastructure, commercial, and residential buildings. Three of these four conditions would constitute blight. The area where the CRIA could invest would also be required to have an annual median household income that is less than 80% of the statewide annual median income. This is different from redevelopment agencies that were required to conduct a study and make a finding that blight existed in a project area before they could use their extraordinary powers, like eminent domain, to eradicate blight.
Like redevelopment agencies, AB 2 allowed CRIAs to freeze the property taxes at the time the plan for revitalizing the area is approved. The CRIA collects all the tax increment or the increase in property taxes that is generated after that point and use it on specified activities. Unlike redevelopment agencies, AB 2 specified that the taxing entities in the area, including the county, city, special districts, or a military base must agree to divert tax increment to the CRIA. Local government entities that initially participate can opt out by giving the auditor-controller sixty days' notice; however, the auditor controller will continue to collect the local government entities' portions of tax increment until any debts issued up until then have been repaid. No portion of the local schools' share of tax increment may go to the CRIA.
- Arguments in Support. Supporters argue that the bill will provide local governments with a critical tool to address the housing affordability crisis without raising taxes, and invest the tax increment revenues in the production of homes affordable to their workers.
- Arguments in Opposition. The Howard Jarvis Taxpayers Association notes the concern with the apparent lack of a requirement in the bill that any bonds issued by the authority be voter-approved, and writes that these bonds could remain on the books for up to 40 years after they are sold, surpassing the probable tenure of most authority members.
Analysis Prepared by: Debbie Michel / L. GOV. / (916) 319-3958 FN: 0001566
Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 | AB 1598 |
THIRD READING
Bill No: AB 1598
Amended: 8/21/17 in Senate
SENATE GOVERNANCE & FIN. COMMITTEE: 4-1, 6/28/17
AYES: McGuire, Hernandez, Hertzberg, Lara
NOES: Nguyen
NO VOTE RECORDED: Beall, Moorlach
SENATE TRANS. & HOUSING COMMITTEE: 10-2, 7/11/17
AYES: Beall, Cannella, Allen, Atkins, McGuire, Mendoza, Roth, Skinner, Wieckowski, Wiener
NOES: Morrell, Vidak
NO VOTE RECORDED: Gaines
SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8
ASSEMBLY FLOOR: 52-23, 5/31/17 - See last page for vote
SUBJECT: Affordable housing authorities
DIGEST:
This bill authorizes a city or county to create an affordable housing authority to fund affordable housing similar to a Community Revitalization and Investment Authority (CRIA).
Existing law:
- Establishes CRIAs, which allowed local government entities, excluding schools, to form a CRIA to collect property tax increment and issue debt. The CRIA could use its powers to invest in disadvantaged communities with a high crime rate, high unemployment, and deteriorated and inadequate infrastructure, commercial, and residential buildings.
- Defines “low-income” as persons and families whose income does not exceed 80% area median income (AMI).
- Defines “moderate-income” as persons and families whose income does not exceed 120% of AMI.
This bill:
- Permits a locality to adopt a resolution to create an affordable housing authority (AHA) that is limited to providing low- and moderate income housing and affordable workforce housing. “Affordable Workforce Housing” means housing with an affordable costs or affordable rent for households whose gross income does not exceed 120% AMI. Permits the boundaries of the AHA to be identical to the boundaries of the locality that created it.
- Prohibits a school entity from participating in the AHA. Prohibits a successor agency from participating in, or receiving funding from, any AHA established under this bill.
- Requires the governing board to have an odd number of members with at least five or seven members in total and contain at least three members of the city council or board of supervisors, appointed by the city council or board of supervisors. In the case of an AHA created by a city and county authority jointly, at least three members of the city council and three members of the board of supervisors. The governing board must also contain at least one member of the public who lives or works within the boundaries of the city or county that created the AHA.
- Requires the AHA by resolution to create a Low and Moderate Income Housing Fund (L&M Fund) and to adopt an affordable housing investment plan (Plan) that may include either or both of the following: (a) provision for the receipt of property tax increment funds generated within the area, (b) provision for the receipt of any tax revenues allocated to the AHA, including revenues from local sales and use taxes or transaction and use taxes provided that the use of those revenues by the AHA for purposes of this division is consistent with the purposes for which that tax was imposed.
- Requires the Plan to include the following:
- A statement of the principal goals and objectives of the Plan.
- An affordable housing program that describes how the AHA will fulfill its objective and if duties and activities will be assigned to a city or county housing department or public housing authority.
- The estimated amount that will be deposited in the L&M Fund during each of the next five years.
- Estimates of the number of new, rehabilitated, or price restricted residential units to be assisted during each of the five years and estimates of moneys from the L&M Fund during each of the five years.
- A description of how the program will implement the requirements for expenditures of fund in the L&M Fund over a 10-year period at various income levels.
- Estimates of the number of units to be developed by the AHA for very low-, low-, and moderate-income households during the next five years.
- A feasible method or plan for relocation of families and persons to be temporarily or permanently displaced from housing facilities in the area.
- Permits at any time before or after the adoption of the Plan, a locality that receives ad valorem property taxes from property located within an area may adopt a resolution directing the county auditor-controller to allocate its share of the property tax increment funds within the area covered by the Plan to the AHA.
- Permits, at any time before the adoption of the Plan, for a locality to adopt a resolution to allocate tax revenues to the AHA, including revenues from local sales and use taxes or transactions and use taxes provided that the use of those revenues by the AHA is consistent with the purpose for which that tax was imposed and the boundaries of the authority are coterminous with the locality that established the AHA
- Permits an AHA to do the following:
- Provide for low- and moderate-income housing and affordable workforce housing.
- Remedy or remove a release of hazardous substances.
- Provide for seismic retrofits of existing buildings.
- Acquire and transfer real property.
- Issue bonds.
- Borrow money, receive grants, or accept financial or other assistance or investment from the state or federal government or any other public agency or private lending institution for any project within its area of operation and comply with any conditions of a loan or grant.
- Receive funds allocated to it pursuant to a resolution adopted by a locality.
- Adopt an affordable housing Plan.
- Make loans or grants for owners or tenants to improve, rehabilitate, or retrofit buildings or structures within the Plan area.
- Construct foundations, platforms or other like structural forms necessary for the provision or utilization of air rights sites for buildings to be used for purposes of providing affordable housing.
- Requires an AHA to prepare a feasible method or Plan for relocation of all of any families and persons to be temporarily or permanently displaced from housing facilities as a result of actions by the AHA, among other requirements to insure that no families are displaced unless there is suitable housing available.
- Permits an AHA to:
a) Purchase, lease, obtain an option upon, acquire by gift, grant, bequest, devise, or otherwise, any real or personal property, any interest in property, and any improvements on it, including repurchase of developed property previously owned by the AHA.
b) Accept, at the request of the legislative body of the community, a conveyance of real property, located either within or outside the Plan area, owned by a public entity and declared surplus by the public entity, or owned by a private entity.
c) Sell, lease, grant, or donate real property owned or acquired by the AHA in a Plan area to a housing authority or to any public agency for public housing projects.
d) Offer for resale property acquired by an AHA for rehabilitation and resale within one year after completion of rehabilitation.
Background
RDAs. Until 2011, the Community Redevelopment Law allowed local officials to set up redevelopment agencies (RDAs), prepare and adopt redevelopment plans, and finance redevelopment activities. Citing a significant State General Fund deficit, Governor Brown’s 2011-12 budget proposed eliminating RDAs and returning billions of dollars of property tax revenues to schools, cities, and counties to fund core services. Among the statutory changes that the Legislature adopted to implement the 2011-12 budget, AB X1 26 (Blumenfield, Chapter 5, Statutes of 2011, First Extraordinary Session) dissolved all RDAs. The California Supreme Court's 2011 ruling in California Redevelopment Association v. Matosantos upheld AB X1 26, but invalidated AB X1 27 (Blumenfield, Chapter 6, Statutes of 2011, First Extraordinary Session), which would have allowed most RDAs to avoid dissolution.
RDAs used property tax revenues generated by growth in the assessed value of properties in a project area – commonly known as tax increment revenues – to finance their redevelopment activities. RDAs’ dissolution deprived many local governments of the primary tool they used to eliminate physical and economic blight, finance new construction, improve public infrastructure, rehabilitate existing buildings, and increase the supply of affordable housing.
IFDs. Cities and counties can create infrastructure financing districts (IFDs) and issue bonds to pay for community scale public works: highways, transit, water systems, sewer projects, flood control, child care facilities, libraries, parks, and solid waste facilities. To repay the bonds, IFDs can divert property tax increment revenues. However, IFDs can’t divert property tax increment revenues from schools (SB 308, Seymour, 1990). Last year, in response to RDAs’ dissolution, legislators enacted SB 628 (Beall, Chapter 785, Statutes of 2014) to allow local officials to create Enhanced Infrastructure Financing Districts (EIFDs), which augment the tax increment financing powers that are available to local government under the IFD statutes. City or county officials can create an EIFD, which is governed by a public finance authority, to finance public capital facilities or other specified projects of communitywide significance that provide significant benefits to the district or the surrounding community.
CRIAs. Over the last 60 years, redevelopment agencies used tax increment to finance affordable housing, community development, and economic development projects. The dissolution of redevelopment agencies created a void in community and economic development. In an effort to create new tools, the Legislature allowed local government entities, excluding schools, to form a CRIA to collect property tax increment and issue debt (AB 2, Alejo, Chapter 319, Statutes of 2015). The CRIA could use its powers to invest in disadvantaged communities with a high crime rate, high unemployment, and deteriorated and inadequate infrastructure, commercial, and residential buildings. Three of these four conditions would constitute “blight.” The area where the CRIA could invest would also be required to have an annual median household income that is less than 80% of the statewide annual median income. This is different from redevelopment agencies that were required to conduct a study and make a finding that blight existed in a project area before they could use their extraordinary powers, like eminent domain, to eradicate blight.
Like redevelopment agencies, AB 2 allowed CRIAs to freeze the property taxes at the time the plan for revitalizing the area is approved. The CRIA collects all the tax increment or the increase in property taxes that is generated after that point and use it on specified activities. Unlike redevelopment agencies, AB 2 specified that the taxing entities in the area, including the county, city, special districts must agree to divert tax increment to the CRIA. Local government entities that initially participate can opt out by giving the auditor-controller sixty days' notice; however, the auditor controller will continue to collect the local government entities' portions of tax increment until any debts issued up until then have been repaid. No portion of the local schools' share of tax increment may go to the CRIA.
Local Sales/Transactions and Use Tax. State law authorizes counties, under the Bradley-Burns law, to impose a local sales and use tax of up to 1 percent on tangible personal property sold at retail in the county, or purchased outside the county for use in the county. All cities and counties within California have adopted ordinances under the terms of the Bradley-Burns Law and levy the 1 percent local tax. Cities can impose a sales and use tax rate of up to 1 percent, credited against the county rate so that the combined rate does not exceed 1 percent. The State Board of Equalization (BOE) administers these taxes. Of the 1 percent tax, 0.75 percent is used to support general operations and the remaining 0.25 percent is designated by statute for county transportation purposes.
In addition to the Bradley-Burns 1% sales tax, cities and counties may increase the sales and use tax, also known as district or transactions and use taxes (TUTs), rates up to 2% for either specific or general purposes pursuant to the California Constitution, which states that taxes levied by local governments are either general taxes, subject to majority approval of its voters, or special taxes, subject to 2/3 vote (Article XIII C). Proposition 13 (1978) required a 2/3 vote of each house of the Legislature for state tax increases, and 2/3 vote of local voters for local special taxes. Proposition 62 (1986) prohibited local agencies from imposing general taxes without majority approval of local voters, and a 2/3 vote for special taxes. Proposition 218 (1996) extended those vote thresholds to charter cities and limited local agencies’ powers to levy new assessments, fees, and taxes. Local agencies generally propose to increase taxes by adopting an ordinance or a resolution at a public hearing. On average, the local sales tax provides around 30% of city general purpose revenues; however, this source of revenue is among the most volatile from year to year depending on the nature of the sales tax base in the city or county. The BOE administers California’s sales and use taxes – the BOE collects the revenue, enforces compliance, and allocates revenue among local jurisdictions and the state. BOE charges for these services.
According to the BOE, as of April 1, 2017, 257 local agencies impose their own TUTs: 6 of 54 county-imposed taxes are general purpose taxes while 48 are special taxes, with 35 dedicated for transportation purposes. Of the 203 city-imposed taxes, 163 are general and 40 are special purpose. Generally, TUT may be imposed in 0.125% increments, up to a total of 2% within the county.
A lack of affordable housing is a challenge in many communities, including those which are not covered under CRIA Law. In order to provide local governments with an additional tool to combat affordable housing shortages in communities which do not qualify to establish a CRIA, the author wants to authorize the creation of affordable housing authorities to promote and develop affordable housing opportunities.
Comments
Purpose of the bill. According to the author, "Over the past six years, cities and counties in California have lost nearly 70% of all state and federal funding formerly available for affordable housing, and even deeper cuts to the US Department of Housing and Urban Development (HUD) are anticipated. According to the California Housing Partnership, there is a shortfall of over 1.54 million homes affordable to lower-income families and not one county in the state has a sufficient number of affordable rental homes. This bill expands AB 2 (Alejo, 2015) which created Community Revitalization and Investment Authorities (CRIAs). For many communities, the ‘blight’ findings and indices of crime and unemployment required under AB 2 are not applicable metrics. Many cities in the Bay Area, for example, are not lacking in private investment in commercial and office development, but are, instead, seeing a wide and ever-growing job-housing gap that far outpaces the production of new affordable homes. Therefore, localities need a tool to capture the growth in tax increment produced by new commercial development and invest those revenues in the production of homes affordable to the local workforce."
Options. AB 1598 creates a new tool for local agencies dedicated to funding the development of affordable housing in areas that currently do not qualify under CRIA Law. However, a number of options currently exist for local agencies to accomplish the same goal. These options include, but are not limited to, IFDs, EFIDs, joint powers authorities and Mark-Roos Act bonds, and the use of an agency’s general fund revenues.
Sales tax versus property tax. AB 1598 authorizes these affordable housing authorities to capture sales and use or transaction and use tax revenue to be used for its purposes as long as it is consistent with the purposes in which the tax was proposed. However, the fundamental premise behind property tax increment (used previously to fund RDA activities) is that investment in a blighted area will increase property values, and thus the “increment” of that increase would go to the RDA while other jurisdictions continue to get the same property tax amount (or “base”), over the life of the RDA. In this manner there was, with RDAs, and with the new CRIA tool, a nexus between the use of property tax increment for the RDA or the CRIA’s purposes. Moreover, as sales tax revenue naturally fluctuates, allowing agencies to dedicate sales tax revenue from their general fund could significantly affect an agency’s ability to budget. Additionally, the collection and distribution of sales tax differs greatly from that of property taxes.
Voter approval. The Howard Jarvis Taxpayers Association states that any bonds issued by the authority must be voter-approved, and these bonds could be issued for up to 40 years, surpassing the probable tenure of most authority members. Additionally, there is no requirement or timeline in which the tax or bond revenue collected by an authority actually be spent on projects.
FISCAL EFFECT: Appropriation: Fiscal Com.: Local:
Alameda County Board of Supervisors
BRIDGE Housing
California Apartment Association
California Association of Realtors
California Housing Partnership Corporation
City of Union City
EAH Housing
HCL Architecture
John Stewart Company
Non-Profit Housing Association of Northern CA
Resources for Community Development
OPPOSITION: (Verified 8/29/17)
Howard Jarvis Taxpayer Association
ASSEMBLY FLOOR: 52-23, 5/31/17
AYES: Aguiar-Curry, Arambula, Berman, Bloom, Bocanegra, Bonta, Burke, Caballero, Calderon, Cervantes, Chau, Chiu, Chu, Cooley, Cooper, Dababneh, Daly, Frazier, Friedman, Cristina Garcia, Eduardo Garcia, Gipson, Gloria, Gomez, Gonzalez Fletcher, Gray, Grayson, Holden, Irwin, Jones-Sawyer, Kalra, Levine, Limón, Low, McCarty, Medina, Mullin, Muratsuchi, Nazarian, O'Donnell, Quirk, Reyes, Ridley-Thomas, Rodriguez, Rubio, Santiago, Mark Stone, Thurmond, Ting, Weber, Wood, Rendon
NOES: Acosta, Travis Allen, Baker, Bigelow, Brough, Chávez, Cunningham, Dahle, Flora, Fong, Gallagher, Harper, Kiley, Lackey, Maienschein, Mathis, Mayes, Obernolte, Patterson, Salas, Steinorth, Voepel, Waldron
NO VOTE RECORDED: Chen, Choi, Eggman, Melendez, Quirk-Silva
Prepared by: Jimmy McDonald / GOV & F. / (916) 651-4119
8/30/17 17:20:52
**** END ****
SENATE COMMITTEE ON TRANSPORTATION AND HOUSING
Senator Jim Beall, Chair
2017 - 2018 Regular
Bill No: AB 1598 Hearing Date: 7/11/17
Author: | Mullin | ||
Version: | 7/5/2017 Amended | ||
Urgency: | No | Fiscal: | Yes |
Consultant: | Alison Hughes | ||
SUBJECT: Affordable housing authorities
DIGEST: This bill permits a locality to establish an affordable housing authority (AHA) to fund affordable housing.
ANALYSIS:
Existing law:
- Establishes community revitalization investment authorities (CRIA), which allowed local government entities, excluding schools, to form a CRIA to collect property tax increment and issue debt. The CRIA could use its powers to invest in disadvantaged communities with a high crime rate, high unemployment, and deteriorated and inadequate infrastructure, commercial, and residential buildings.
- Defines “low-income” as persons and families whose income does not exceed 80% AMI.
- Defines “moderate-income” as persons and families whose income does not exceed 120% of AMI.
This bill:
- Permits a locality to adopt a resolution to create an affordable housing authority (AHA) that is limited to providing low- and moderate income housing and affordable workforce housing. “Affordable Workforce Housing” means housing with an affordable costs or affordable rent for households whose gross income does not exceed 120% AMI. Permits the boundaries of the AHA to be identical to the boundaries of the locality that created it.
- Prohibits a school entity from participating in the AHA. Prohibits a successor agency from participating in, or receiving funding from, any AHA established under this bill.
- Requires the governing board to contain at least three members of the city council or board of supervisors, appointed by the city council or board of supervisors. In the case of an AHA created by a city and county authority jointly, at least three members of the city council and three members of the board of supervisors. The governing board must also contain at least one member of the public who lives or works within the boundaries of the city or county that created the AHA.
- Requires the AHA by resolution to create a Low and Moderate Income Housing Fund (L&M Fund) and to adopt an affordable housing investment plan (Plan) that may include either or both of the following: (a) provision for the receipt of property tax increment funds generated within the area, (b) provision for the receipt of any tax revenues allocated to the AHA, including revenues from local sales and use taxes or transaction and use taxes provided that the use of those revenues by the AHA for purposes of this division is consistent with the purposes for which that tax was imposed.
- Requires the Plan to include the following:
- A statement of the principal goals and objectives of the Plan.
- An affordable housing program that describes how the AHA will fulfill its objective and if duties and activities will be assigned to a city or county housing department or public housing authority.
- The estimated amount that will be deposited in the L&M Fund during each of the next five years.
- Estimates of the number of new, rehabilitated, or price restricted residential units to be assisted during each of the five years and estimates of moneys from the L&M Fund during each of the five years.
- A description of how the program will implement the requirements for expenditures of fund in the L&M Fund over a 10-year period at various income levels.
- Estimates of the number of units to be developed by the AHA for very low-, low-, and moderate-income households during the next five years.
- Permits at any time before or after the adoption of the Plan, a locality that receives ad valorem property taxes from property located within an area may adopt a resolution directing the county auditor-controller to allocate its share of the property tax increment funds within the area covered by the Plan to the AHA.
- Permits, at any time before the adoption of the Plan, for a locality to adopt a resolution to allocate tax revenues to the AHA, including revenues from local sales and use taxes or transactions and use taxes provided that the use of those revenues by the AHA is consistent with the purpose for which that tax was imposed and the boundaries of the authority are coterminous with the locality that established the AHA
- Permits an AHA to do the following:
- Provide for low- and moderate-income housing and affordable workforce housing.
- Remedy or remove a release of hazardous substances.
- Provide for seismic retrofits of existing buildings.
- Acquire and transfer real property.
- Issue bonds.
- Borrow money, receive grants, or accept financial or other assistance or investment from the state or federal government or any other public agency or private lending institution for any project within its area of operation and comply with any conditions of a loan or grant.
- Receive funds allocated to it pursuant to a resolution adopted by a locality.
- Adopt an affordable housing Plan.
- Make loans or grants for owners or tenants to improve, rehabilitate, or retrofit buildings or structures within the Plan area.
- Construct foundations, platforms or other like structural forms necessary for the provision or utilization of air rights sites for buildings to be used for purposes of providing affordable housing.
- Requires an AHA to prepare a feasible method or Plan for relocation of all of any families and persons to be temporarily or permanently displaced from housing facilities as a result of actions by the AHA.
- Permits an AHA to:
a) Purchase, lease, obtain an option upon, acquire by gift, grant, bequest, devise, or otherwise, any real or personal property, any interest in property, and any improvements on it, including repurchase of developed property previously owned by the AHA.
b) Accept, at the request of the legislative body of the community, a conveyance of real property, located either within or outside the Plan area, owned by a public entity and declared surplus by the public entity, or owned by a private entity.
c) Sell, lease, grant, or donate real property owned or acquired by the AHA in a Plan area to a housing authority or to any public agency for public housing projects.
d) Offer for resale property acquired by an AHA for rehabilitation and resale within one year after completion of rehabilitation.
COMMENTS:
- Purpose of the bill. According to the author, “Over the past six years, cities and counties in California have lost nearly 70% of all state and federal funding formerly available for affordable housing, and even deeper cuts to the US Department of Housing and Urban Development (HUD) are anticipated. According to the California Housing Partnership, there is a shortfall of over 1.54 million homes affordable to lower-income families and not one county in the state has a sufficient number of affordable rental homes. This bill builds on AB 2 (Alejo, 2015), which created CRIAs. For many communities, the ‘blight’ findings and indices of crime and unemployment required under AB 2 are not applicable metrics. Many cities in the Bay Area, for example, are not lacking in private investment in commercial and office development, but are, instead, seeing a wide and ever-growing job-housing gap that far outpaces the production of new affordable homes. Therefore, localities need a tool to capture the growth in tax increment produced by new commercial development and invest those revenues in the production of homes affordable to the local workforce. AB 1598 provides local governments with a critical tool needed to address the housing affordability crisis across our state without raising taxes.”
- Background of Community Redevelopment Law (CRL). Historically, the CRL allowed a local government to establish a redevelopment area and capture all of the increase in property taxes generated within the area (referred to as “tax increment”) over a period of decades. The law required redevelopment agencies to deposit 20% of tax increment into a Low and Moderate Income Housing Fund (L&M fund) to be used to increase, improve, and preserve the community’s supply of low- and moderate-income housing available at an affordable-housing cost.
In 2011, the Legislature enacted two bills, AB 26X (Blumenfield) and AB 27X (Blumenfield), Chapters 5 and 6, respectively, of the First Extraordinary Session. AB 26X eliminated redevelopment agencies (RDAs) and established procedures for winding down the agencies, paying off enforceable obligations, and disposing of agency assets. AB 26X established successor agencies, typically the city that established the agency, to take control of all RDA assets, properties, and other items of value. Successor agencies are to dispose of an agency’s assets as directed by an oversight board, made up of representatives of local taxing entities, with the proceeds transferred to the county auditor-controller for distribution to taxing agencies within each county.
AB 26X also included provisions allowing the host city or county of a dissolving RDA to retain the housing assets and functions previously performed by the agency, except for funds on deposit in the agency’s L&M fund, and thus become a housing successor. If the host city or county chooses not to become the housing successor, a local housing authority or the state’s HCD takes on that responsibility.
AB 27X allowed RDAs to avoid elimination if they made payments to schools in the current budget year and in future years. In December 2011, the California Supreme Court in California Redevelopment Association v. Matosantos upheld AB 26X and overturned AB 27X. As a result, all of the state’s roughly 400 redevelopment agencies dissolved on February 1, 2012, and local jurisdictions began implementing AB 26X’s provisions to distribute former redevelopment assets and pay the remaining obligations.
- Infrastructure Financing Districts (IFDs). Cities and counties can create IFDs and issue bonds to pay for community scale public works: highways, transit, water systems, sewer projects, flood control, child care facilities, libraries, parks, and solid waste facilities. To repay the bonds, IFDs can divert property tax increment revenues. However, IFDs can’t divert property tax increment revenues from schools (SB 308, Seymour, 1990). In 2014, in response to RDAs’ dissolution, legislators enacted SB 628 (Beall) to allow local officials to create Enhanced Infrastructure Financing Districts (EIFDs), which augment the tax increment financing powers that are available to local government under the IFD statutes. City or county officials can create an EIFD, which is governed by a public finance authority, to finance public capital facilities or other specified projects of communitywide significance that provide significant benefits to the district or the surrounding community.
- Community Revitalization Investment Authorities (CRIAs). Over the last 60 years, redevelopment agencies used tax increment to finance affordable housing, community development, and economic development projects. The dissolution of redevelopment agencies created a void in community and economic development. In an effort to create new tools, the Legislature allowed local government entities, excluding schools, to form a CRIA to collect property tax increment and issue debt (AB 2, Alejo, 2015). The CRIA could use its powers to invest in disadvantaged communities with a high crime rate, high unemployment, and deteriorated and inadequate infrastructure, commercial, and residential buildings. Three of these four conditions would constitute “blight.” The area where the CRIA could invest would also be required to have an annual median household income that is less than 80% of the statewide annual median income. This is different from redevelopment agencies that were required to conduct a study and make a finding that blight existed in a project area before they could use their extraordinary powers, like eminent domain, to eradicate blight.
Like redevelopment agencies, AB 2 allowed CRIAs to freeze the property taxes at the time the plan for revitalizing the area is approved. The CRIA collects all the property tax increment or the increase in property taxes that is generated after that point and uses it on specified activities. Unlike redevelopment agencies, AB 2 specified that the taxing entities in the area, including the county, city, special districts must agree to divert property tax increment to the CRIA. Local government entities that initially participate can opt out by giving the auditor-controller sixty days' notice; however, the auditor controller will continue to collect the local government entities' portions of property tax increment until any debts issued up until then have been repaid. No portion of the local schools' share of tax increment may go to the CRIA.
- Housing provisions and planning. Prior to their dissolution, RDAs generated up to $1 billion per year for affordable housing in the state. CRIA added to the affordable housing provisions of existing community redevelopment law in three ways. First, it increased from 20 to 25% the amount of tax increment revenue that an CRIA must deposit into its L&M fund. Because tax increment accruing to a CRIA is less (e.g., it does not contain the schools’ share), this is 25% of a smaller number. Second, a community revitalization and investment plan adopted by a CRIA must ensure that housing affordable to and occupied by extremely low-, very low-, and low-income households within an area does not decrease during the life of the area plan. Third, CRIA must provide replacement housing in two rather than four years. CRIA are allowed to transfer the funds collected for affordable housing to a housing authority within the project area or to the successor agency to a former redevelopment agency. CRIA have to make a finding that transferring the funds and combining them with other funding for housing would reduce administrative costs or expedite the construction of affordable housing.
Under the provisions of this bill, the AHA’s authority is limited to providing low- and moderate-income housing and affordable workforce housing up to 120% AMI; CRIA on the other hand, restricts investments to households that earn less than 80% AMI, consistent with other state and federally funded housing programs. The AHA must adopt an affordable housing investment plan that includes an affordable housing program that describes how the AHA will fulfill its objectives, the estimated amount that will be deposited in the L&M fund during each of the next five years, estimates of the number of units to be assisted and estimates of the expenditures from the L&M Fund during each of the next five years, a description of how the program will implement the requirements of expenditures of funds in the L&M Fund over a 10-year period at various income levels, and estimates of the number of units to be developed by the AHA for very low-, low-, and moderate-income households. AHA’s must allocate at least 95% of the tax revenues generated to increase, improve, and preserve the community’s supply of housing, and up to 5% may be utilized for administrative purposes.
- Antidisplacement and replacement housing. CRIAs and EIFDs are subject to specific provisions to prevent displacement. Specifically, CRIA must prepare a feasible method or plan for the relocation of families or persons to be temporarily or permanently displaced from housing facilities in the plan area. The CRIA cannot displace families unless and until there is suitable housing units ready and available for occupancy at rents comparable to those at the time of their displacement. Families and persons displaced shall receive priority in newly constructed units financed by the CRIA. If insufficient suitable housing units are available for those to be displaced, the CRIA shall assure sufficient land is made available, and permanent housing shall be made available within two years from displacement.
Similar provisions are required for the destruction of housing units available to persons and families of low- or moderate-income, as part of a revitalization project. The CRIA must, within two years of the destruction or removal, rehabilitation, development or construction, an equal number of replacement units that have equal or greater number of bedrooms as those destroyed or removed shall be available. An authority shall provide relocation assistance. All replacement units must be subject to affordability covenants. The authority may replace, destroy, or remove units with a fewer number of replacement dwelling units if the replacement units meet the following criteria:
- The total number of bedrooms in the replacement dwelling units equals or exceeds the number of bedrooms in the destroyed or removed units. Destroyed or removed units having one or no bedroom are deemed for this purpose to have one bedroom.
- The replacement units are affordable to and occupied by, the same income level of households as the destroyed or removed units.
The author has agreed to accept amendments that require AHA to contain similar displacement and replacement unit protections.
- Oversight, covenants, and auditing. This bill requires the AHA to contract for an independent audit every five years, beginning in the calendar year in which the authority has allocated a cumulative total of $1 million or more in property tax increment or other revenues. An AHA must prepare a feasible method or plan for the relocation of all of any families and persons to be temporarily or permanently displaced from housing facilities as a result of actions by the authority. This bill allows an AHA to transfer its housing responsibilities to a housing authority or city or county housing department if it determines that combining funding streams will reduce administrative costs or expedites the construction of affordable housing, and its requires all housing assisted by an authority to remain affordable for at least 55 years for rental units and 45 years for owner-occupied units. Further, this bill requires the AHA to retain controls and establish restrictions or covenants running with land sold or leased for private use and under the Plan.
This bill requires an authority to obligate lessees or purchasers of property acquired in an affordable housing project to:
- Use the property for the purpose designated in the Plan.
- Begin the project within the period of time in which the authority sets as reasonable.
- Comply with the covenants, conditions, or restrictions that the authority deems necessary to prevent speculation or excess profit taking in undeveloped land, including right of reverter to the authority. The covenants, conditions, and restrictions imposed by an authority may provide for the reasonable protection of lenders.
- Comply with other conditions that the authority deems necessary to carry out the purposes of the bill's provisions.
- Voter thresholds and eminent domain. CRIA permit local governments the power to take private property through eminent domain and pay for it using tax increments. CRIA may also issue bonds. CRIA may adopt a resolution, after holding three hearings, to adopt a plan by ordinance if no more than 25% but less than 50% of property owners and residents file protests. EIFDs do not give districts the power of eminent domain and require a 55% voter approval for EIFD bonds. This bill does not include a voter threshold requirement for bond approvals but bonds issued must be backed by tax increment revenues. AHA additionally do not have the power of eminent domain.
- Use of existing tools. According to the League of California Cities, 13 jurisdictions are currently contemplating using EIFDs/CRIAs in California. This would be an additional tool for locals to use to finance housing.
- Opposition. The Howard Jarvis Taxpayers Association (HJTA) writes this bill would permit a locality to issue bonds without any voter approval. According to HJTA, given that these bonds could subject voters to 40 years of debt service, surpassing the tenure of most members of the AHA, meaningful public debate should be required prior to bond sales.
- Incoming! This bill was heard in the Senate Governance and Finance Committee and received a vote of 4-1.
Related Legislation:
AB 2493 (Alejo, Chapter 524, Statutes of 2016) — Made changes to allow greater flexibility for the creation of CRIA and allowed a CRIA to receive funding from the same sources as an EIFD.
AB 2 (Alejo, Chapter 319, Statutes of 2015) — Allowed CRIA to use tax increment revenue to improve the infrastructure, assist businesses, and support affordable housing in disadvantaged communities.
SB 628 (Beall, Chapter 785, Statutes of 2014) — Allowed local agencies to create EIFDs to finance specified infrastructure projects and facilities.
Assembly Votes
Floor: 52-23
Appr: 12-5
H&CD: 5-2
L.Gov: 7-2
FISCAL EFFECT: Appropriation: Fiscal Com.: Local:
POSITIONS: (Communicated to the committee before noon on Wednesday,
July 5, 2017.)
SUPPORT:
Alameda County Board of Supervisors
BRIDGE Housing
California Apartment Association
California Association of Realtors
California Housing Partnership Corporation
City of Union City
EAH Housing
HCL Architecture
John Stewart Company
Non-Profit Housing Association of Northern CA
Resources for Community Development
OPPOSITION:
Howard Jarvis Taxpayer Association
-- END --
SENATE COMMITTEE ON GOVERNANCE AND FINANCE
Senator Mike McGuire, Chair
2017 - 2018 Regular
Bill No: | AB 1598 | Hearing Date: | 6/28/17 |
Author: | Mullin | Tax Levy: | No |
Version: | 6/21/17 | Fiscal: | Yes |
Consultant: | MacDonald | ||
Affordable housing authorities
Authorizes a city or county to create an affordable housing authority to fund affordable housing similar to a Community Revitalization and Investment Authority (CRIA).
Background
RDAs. Until 2011, the Community Redevelopment Law allowed local officials to set up redevelopment agencies (RDAs), prepare and adopt redevelopment plans, and finance redevelopment activities. Citing a significant State General Fund deficit, Governor Brown’s 2011-12 budget proposed eliminating RDAs and returning billions of dollars of property tax revenues to schools, cities, and counties to fund core services. Among the statutory changes that the Legislature adopted to implement the 2011-12 budget, AB X1 26 (Blumenfield, 2011) dissolved all RDAs. The California Supreme Court's 2011 ruling in California Redevelopment Association v. Matosantos upheld AB X1 26, but invalidated AB X1 27 (Blumenfield, 2011), which would have allowed most RDAs to avoid dissolution.
RDAs used property tax revenues generated by growth in the assessed value of properties in a project area – commonly known as tax increment revenues – to finance their redevelopment activities. RDAs’ dissolution deprived many local governments of the primary tool they used to eliminate physical and economic blight, finance new construction, improve public infrastructure, rehabilitate existing buildings, and increase the supply of affordable housing.
IFDs. Cities and counties can create infrastructure financing districts (IFDs) and issue bonds to pay for community scale public works: highways, transit, water systems, sewer projects, flood control, child care facilities, libraries, parks, and solid waste facilities. To repay the bonds, IFDs can divert property tax increment revenues. However, IFDs can’t divert property tax increment revenues from schools (SB 308, Seymour, 1990). Last year, in response to RDAs’ dissolution, legislators enacted SB 628 (Beall, 2014) to allow local officials to create Enhanced Infrastructure Financing Districts (EIFDs), which augment the tax increment financing powers that are available to local government under the IFD statutes. City or county officials can create an EIFD, which is governed by a public finance authority, to finance public capital facilities or other specified projects of communitywide significance that provide significant benefits to the district or the surrounding community.
CRIAs. Over the last 60 years, redevelopment agencies used tax increment to finance affordable housing, community development, and economic development projects. The dissolution of redevelopment agencies created a void in community and economic development. In an effort to create new tools, the Legislature allowed local government entities, excluding schools, to form a CRIA to collect property tax increment and issue debt (AB 2, Alejo, 2015). The CRIA could use its powers to invest in disadvantaged communities with a high crime rate, high unemployment, and deteriorated and inadequate infrastructure, commercial, and residential buildings. Three of these four conditions would constitute “blight.” The area where the CRIA could invest would also be required to have an annual median household income that is less than 80% of the statewide annual median income. This is different from redevelopment agencies that were required to conduct a study and make a finding that blight existed in a project area before they could use their extraordinary powers, like eminent domain, to eradicate blight.
Like redevelopment agencies, AB 2 allowed CRIAs to freeze the property taxes at the time the plan for revitalizing the area is approved. The CRIA collects all the tax increment or the increase in property taxes that is generated after that point and use it on specified activities. Unlike redevelopment agencies, AB 2 specified that the taxing entities in the area, including the county, city, special districts must agree to divert tax increment to the CRIA. Local government entities that initially participate can opt out by giving the auditor-controller sixty days' notice; however, the auditor controller will continue to collect the local government entities' portions of tax increment until any debts issued up until then have been repaid. No portion of the local schools' share of tax increment may go to the CRIA.
Local Sales/Transactions and Use Tax. State law authorizes counties, under the Bradley-Burns law, to impose a local sales and use tax of up to 1 percent on tangible personal property sold at retail in the county, or purchased outside the county for use in the county. All cities and counties within California have adopted ordinances under the terms of the Bradley-Burns Law and levy the 1 percent local tax. Cities can impose a sales and use tax rate of up to 1 percent, credited against the county rate so that the combined rate does not exceed 1 percent. The State Board of Equalization (BOE) administers these taxes. Of the 1 percent tax, 0.75 percent is used to support general operations and the remaining 0.25 percent is designated by statute for county transportation purposes.
In addition to the Bradley-Burns 1% sales tax, cities and counties may increase the sales and use tax, also known as district or transactions and use taxes (TUTs), rates up to 2% for either specific or general purposes pursuant to the California Constitution, which states that taxes levied by local governments are either general taxes, subject to majority approval of its voters, or special taxes, subject to 2/3 vote (Article XIII C). Proposition 13 (1978) required a 2/3 vote of each house of the Legislature for state tax increases, and 2/3 vote of local voters for local special taxes. Proposition 62 (1986) prohibited local agencies from imposing general taxes without majority approval of local voters, and a 2/3 vote for special taxes. Proposition 218 (1996) extended those vote thresholds to charter cities and limited local agencies’ powers to levy new assessments, fees, and taxes. Local agencies generally propose to increase taxes by adopting an ordinance or a resolution at a public hearing. On average, the local sales tax provides around 30% of city general purpose revenues; however, this source of revenue is among the most volatile from year to year depending on the nature of the sales tax base in the city or county. The BOE administers California’s sales and use taxes – the BOE collects the revenue, enforces compliance, and allocates revenue among local jurisdictions and the state. BOE charges for these services.
According to the BOE, as of April 1, 2017, 257 local agencies impose their own transactions and use taxes: 6 of 54 county-imposed taxes are general purpose taxes while 48 are special taxes, with 35 dedicated for transportation purposes. Of the 203 city-imposed taxes, 163 are general and 40 are special purpose. Generally, TUT may be imposed in 0.125% increments, up to a total of 2% within the county.
A lack of affordable housing is a challenge in many communities, including those which are not covered under CRIA Law. In order to provide local governments with an additional tool to combat affordable housing shortages in communities which do not qualify to establish a CRIA, the author wants to authorize the creation of affordable housing authorities to promote and develop affordable housing opportunities.
Proposed Law
Overview. AB 1598 creates a new tool for local agencies dedicated to funding the development of affordable housing in areas that currently do not qualify under CRIA Law.
Governance. The board membership of an authority must have:
- At least three members of the city council or the board of supervisors appointed by the city council or the board of supervisors, or; in the case of an authority created by a city and county jointly, at least three members of the city council and three members of the board of supervisors.
- At least one member of the public who lives or works within the boundaries of the city or county that created the authority.
AB 1598 allows the boundaries of an authority to be identical to the boundaries of the city or county that created the authority.
Who’s out. AB 1598 provides that the following entities cannot participate in an authority:
- A school entity may not participate in an authority.
- A RDA successor agency.
- A city or county that created a redevelopment agency that has not adopted findings of fact stating all of the following:
- The agency has received a finding of completion from the Department of Finance.
- Former redevelopment agency assets that are the subject of litigation against the state.
- The agency has complied with all orders of the State Controller.
Investment Plan. This bill requires an authority, by resolution, to create a Low and Moderate Income Housing Fund and adopt an affordable housing investment plan that can include either or both of the following:
- A provision of the receipt of tax increment funds generated within the area.
- A provision for the receipt of any tax revenues allocated to the authority.
AB 1598 requires the plan to include each of the following elements:
- A statement of the principal goals and objectives of the plan.
- An affordable housing program that describes how the authority will fulfill its objective.
- The estimated amount that will be deposited in the Low and Moderate Income Housing Fund during each of the next five years.
- Estimates of the number of new, rehabilitated, or price restricted residential units to be assisted and the expenditures of moneys from the Low and Moderate Income Housing Fund during each of the five years.
- A description of how the program will implement the requirements for expenditures over a 10-year period.
- Estimates of the number of units, if any, to be developed by the authority for very low-, low-, and moderate-income households during the next five years, among other information.
The authority must hold a public hearing before adopting an affordable housing investment plan, and requires the authority to publish a notice of that hearing for at least 10 days.
Tax allocation. This bill allows establishing agency to choose the length of time and amount of tax increment to be diverted to the authority, and allows the agency to repeal an authority by giving 90 days’ notice. Debt obligations must continue to be funded until fully repaid.
AB 1598 allows a participating agency to opt-in by adopting a resolution to allocate tax revenues of that entity to the authority, including revenues from its local sales tax. This bill requires 95% of the allocated tax increment revenues to be used on housing for low- and moderate-income families and prohibits more than 5% of allocated revenues to be used for administration, and requires housing funds to be spent in proportion to the share of the regional housing need allocated to the city, county, or city and county for each income category for low-, very low-, and moderate-income housing.
Powers. This bill allows an authority to do all of the following:
- Provide for low- and moderate-income housing and affordable workforce housing.
- Remedy or remove a release of hazardous substances pursuant to the Polanco Redevelopment Act.
- Provide for seismic retrofits of existing buildings in accordance with all applicable laws and regulations.
- Acquire and transfer real property.
- Issue bonds.
- Borrow money, receive grants, or accept financial or other assistance or investment from the state or the federal government or any other public agency or private lending institution for any project within its area of operation.
- Receive funds allocated to an EIFD law.
- Make loans of grants for owners or tenants to improve, rehabilitate, or retrofit buildings or structures.
This bill allows an authority to:
- Acquire or purchase real property. The authority must obtain an appraisal from a qualified independent appraiser to determine the fair market value of property before the authority acquires or purchases real property.
- Accept real property, located either within or outside the plan area, owned by a public entity and declared surplus by the public entity, or owned by a private entity.
- Sell, lease, grant, or donate real property owned or acquired by the authority in a plan area to a housing authority or to any public agency for public housing projects.
- Offer for resale property acquired by an authority for rehabilitation and resale within one year after completion of rehabilitation. Properties held by an authority in excess of a one-year period must be listed in the authority's annual report.
Oversight and other provisions. AB 1598 requires the authority to contract for an independent audit every five years, beginning in the calendar year in which the authority has allocated a cumulative total of $1 million or more in tax increment or other revenues. An authority must prepare a feasible method or plan for the relocation of all of any families and persons to be temporarily or permanently displaced from housing facilities as a result of actions by the authority. This bill allows an authority to transfer its housing responsibilities to a housing authority or city or county housing department if it determines that combining funding streams will reduce administrative costs or expedites the construction of affordable housing, and its requires all housing assisted by an authority to remain affordable for at least 55 years for rental units and 45 years for owner-occupied units. AB 1598 requires the authority to retain controls and establish restrictions or covenants running with land sold or leased for private use and under the plan.
This bill requires an authority to obligate lessees or purchasers of property acquired in an affordable housing project to:
- Use the property for the purpose designated in the affordable housing plan.
- Begin the project within the period of time in which the authority sets as reasonable.
- Comply with the covenants, conditions, or restrictions that the authority deems necessary to prevent speculation or excess profit taking in undeveloped land, including right of reverter to the authority. The covenants, conditions, and restrictions imposed by an authority may provide for the reasonable protection of lenders.
- Comply with other conditions that the authority deems necessary to carry out the purposes of the bill's provisions.
AB 1598 specifies that an authority created pursuant to the bill's provisions shall be a local public agency subject to the Ralph M. Brown Act, the California Public Records Act, and the Political Reform Act.
Assembly Bill 1598 defines the following terms, for purposes of the bill's provisions:
- Affordable workforce housing.
- Authority.
- Consenting local agency.
- Plan.
- Real property.
This bill contains declarations and findings to support its purposes.
State Revenue Impact
No estimate.
Comments
- Purpose of the bill. According to the author, "Over the past six years, cities and counties in California have lost nearly 70% of all state and federal funding formerly available for affordable housing, and even deeper cuts to the US Department of Housing and Urban Development (HUD) are anticipated. According to the California Housing Partnership, there is a shortfall of over 1.54 million homes affordable to lower-income families and not one county in the state has a sufficient number of affordable rental homes. This bill expands AB 2 (Alejo, 2015) which created Community Revitalization and Investment Authorities (CRIAs). For many communities, the ‘blight’ findings and indices of crime and unemployment required under AB 2 are not applicable metrics. Many cities in the Bay Area, for example, are not lacking in private investment in commercial and office development, but are, instead, seeing a wide and ever-growing job-housing gap that far outpaces the production of new affordable homes. Therefore, localities need a tool to capture the growth in tax increment produced by new commercial development and invest those revenues in the production of homes affordable to the local workforce."
- Options. AB 1598 creates a new tool for local agencies dedicated to funding the development of affordable housing in areas that currently do not qualify under CRIA Law. However, a number of options currently exist for local agencies to accomplish the same goal. These options include, but are not limited to, IFDs, EFIDs, joint powers authorities and Mark-Roos Act bonds, and the use of an agency’s general fund revenues. While affordable housing is certainly a challenge for many of California’s local agencies, the Committee may wish to consider if an additional financing option is needed. Additionally, there is potential for overlap of these financing entities. The Committee may wish to consider what will happen if a jurisdiction wants to create both an authority and a CRIA or an EIFD. Which entity would receive the property tax increment in this situation?
3. Sales tax versus property tax. AB 1598 authorizes these affordable housing authorities to capture sales and use or transaction and use tax revenue to be used for its purposes as long as it is consistent with the purposes in which the tax was proposed. However, the fundamental premise behind property tax increment (used previously to fund RDA activities) is that investment in a blighted area will increase property values, and thus the “increment” of that increase would go to the RDA while other jurisdictions continue to get the same property tax amount (or “base”), over the life of the RDA. In this manner there was, with RDAs, and with the new CRIA tool, a nexus between the use of property tax increment for the RDA or the CRIA’s purposes. Moreover, as sales tax revenue naturally fluctuates, allowing agencies to dedicate sales tax revenue from their general fund could significantly affect an agency’s ability to budget. The Committee may wish to consider whether using sales tax increment to fund an authority’s activities meets this same nexus as property taxes and is appropriate due to its potential relative volatility from year to year. Additionally, the collection and distribution of sales tax differs greatly from that of property taxes. Authorizing these affordable housing authorities to capture and use of sales tax proceeds raises a number of technical questions, including:
- First, it is unclear if the bill directs the county auditor-controller to allocate sales tax; however, under existing law, sales and use taxes, as well as transactions and use taxes are collected and remitted to BOE, who in turn allocate revenues to a city or county by the BOE.
- The bill is unclear about what part of the sales tax it is capturing – is it the Bradley-Burns and transaction and use tax rates that are the local share?
- Can an agency collect local sales or use tax revenue from a rate imposed by another agency, such as a transit district?
- How would the issuance of debt work if the debt is backed by sales tax rather than property tax?
- The current process to calculate property tax increment is contained in the Revenue and Taxation Code; however, no such method exists for calculating sales and use or transactions and use tax increment which would be “attributable to the area of the authority.”
In light of these issues, the Committee may wish to consider the following amendments:
- Remove the authority to secure bonds with sales tax revenue.
- Specify that the use of sales tax is limited to those imposed under the Bradley-Burns Uniform Local Sales and Use Tax Law [Part 1.5 (commencing with section 7200) of Division 2 of the Revenue and Taxation Code] and Transaction and Use Tax Law [Part 1.6 (commencing with section 7251) of Division 2 of the Revenue and Taxation Code].
- Remove references to the collection of sales tax increment.
4. Voter approval. The Howard Jarvis Taxpayers Association states that any bonds issued by the authority must be voter-approved, and these bonds could be issued for up to 40 years, surpassing the probable tenure of most authority members. Additionally, there is no requirement or timeline in which the tax or bond revenue collected by an authority actually be spent on projects. The Committee may wish to consider if these authorities should be required to gain voter approval before issuing bonds, and if accountability measures to ensure minimum levels of housing units are actually built should be added.
5. Deed restriction. AB 1598 requires all housing assisted by an authority to remain affordable for at least 55 years for rental units and 45 years for owner-occupied units. An affordability deed restriction is often placed on the property to preserve it as a low- and moderate-income housing unit. This means it can only be sold to a buyer whose household meets certain income requirements and at a price that is affordable to that household. However, this bill does not contain a requirement that a deed restriction be placed on the property to ensure the housing actually stays affordable for low and moderate income families. The Committee may wish to consider if a deed restriction requirement should be added to the bill.
6. Related Legislation. AB 1568 (Bloom), which will be heard in Senate Governance and Finance Committee on July 5th, expands the authority of EIFDs to collect and use the Bradley-Burns local sales tax to fund infrastructure development.
7. Double-referred. The Senate Rules Committee referred AB 1598 to both the Committees on Governance and Finance, which considers bills affecting local government finance, and Transportation and Housing.
Assembly Actions
Assembly Local Government 7-2
Assembly Housing and Community Development 5-2
Assembly Appropriations 12-5
Assembly Floor 52-23
Support and Opposition
(6/23/17)
Support: Alameda County; BRIDGE Housing; California Apartment Association; California Association of Realtors; California Housing Partnership; City of Union City; EAH Housing; Herman Coliver Locus Architecture; John Stewart Company; Non-Profit Housing Association of Northern California; Resources for Community Development.
Opposition: Howard Jarvis Taxpayers Association.
-- END --
ASSEMBLY THIRD READING
ATR Bill Id:AB 1598
Author:(Mullin)
As Amended Ver:
Majority vote
Committee | Votes | Ayes | Noes |
Local Government | 7-2 | Aguiar-Curry, Waldron, Bloom, Caballero, Gonzalez Fletcher, Grayson, Ridley-Thomas | Lackey, Voepel |
Housing | 5-2 | Chiu, Bocanegra, Chau, Kalra, Limón | Steinorth, Choi |
Appropriations | 12-5 | Gonzalez Fletcher, Bloom, Bocanegra, Bonta, Gloria, Chau, Quirk, Friedman, Eduardo Garcia, Jones-Sawyer, Muratsuchi, Reyes | Bigelow, Brough, Fong, Gallagher, Obernolte |
SUMMARY: Allows a city or county to create an affordable housing authority to fund affordable housing, similar to a Community Revitalization and Investment Authority (CRIA). Specifically, this bill:
- Defines the following terms, for purposes of the bill's provisions:
- "Authority" to mean an affordable housing authority;
- "Consenting local agency" to mean a local agency that has adopted a resolution of its governing body consenting to the affordable housing investment plan;
- "Plan" to mean an affordable housing investment plan adopted pursuant to 6), below;
- "Real property" to mean any of the following:
- Land, including land under water and waterfront property;
- Buildings, structures, fixtures, and improvements on the land;
- Any property appurtenant to or used in connection with the land; and,
- Every estate, interest, privilege, easement, franchise, and right in land, including rights-of-way, terms for years, and liens, charges, or encumbrances by way of judgment, mortgage, or otherwise and the indebtedness secured by those liens.
- Allows a city, county, or city and county (hereafter referred to as "city and county") to adopt a resolution creating an affordable housing authority (authority) and a Low and Moderate Income Housing Fund that shall be limited to providing low- and moderate-income housing. States that an authority is a public body, corporate and politic.
- Provides that a school entity, as specified, may not participate in an authority.
- Provides that a successor agency, as defined, may not participate in an authority, and an entity created pursuant to the bill's provisions shall not receive any portion of the property tax revenues or other moneys distributed pursuant to specified provisions of redevelopment agency dissolution.
- Provides that an authority formed by a city or county that created a redevelopment agency that was subsequently dissolved, as specified, shall not become effective until the successor agency or designated local authority for the former redevelopment agency has adopted findings of fact stating all of the following:
- The agency has received a finding of completion from the Department of Finance, as specified;
- Former redevelopment agency assets that are the subject of litigation against the state, where the city or county or its successor agency or designated local authority are a named plaintiff, have not been or will not be used to benefit any efforts of an authority formed under this part unless the litigation has been resolved by entry of a final judgment by any court of competent jurisdiction and any appeals have been exhausted; and,
- The agency has complied with all order of the Controller, as specified.
- Specifies the membership of the governing board of an authority, as follows:
- At least three members of the city council or the board of supervisors appointed by the city council or the board of supervisors, or; in the case of an authority created by a city and county jointly, at least three members of the city council and three members of the board of supervisors; and,
- At least one member of the public who lives or works within the boundaries of the city or county that created the authority;
- Allows the boundaries of an authority to be identical to the boundaries of the city or county that created the authority.
- Requires an authority, by resolution, to adopt an affordable housing investment plan (plan) that may include either of the following:
- A provision of the receipt of tax increment funds generated within the area; or,
- A provision for the receipt of any tax revenues allocated to the authority pursuant to 12) below.
- Requires the plan to include each of the following elements:
- A statement of the principal goals and objectives of the plan;
- An affordable housing program that describes how the authority will fulfill its objective and if duties and activities will be assigned to a city or county housing department or public housing authority;
- The amount available in the Low and Moderate Income Housing Fund and the estimated amounts that will be deposited in the fund during each of the next five years;
- Estimates of the number of new, rehabilitated, or price restricted residential units to be assisted during each of the five years and estimates of the expenditures of moneys from the Low and Moderate Income Housing Fund during each of the five years;
- A description of how the program will implement the requirements for expenditures of funds in the Low and Moderate Income Housing Fund over a 10-year period at various income levels;
- Estimates of the number of units, if any, to be developed by the authority for very low-, low-, and moderate-income households during the next five years;
- A fiscal analysis setting forth the projected receipt of revenue and projected expenses over a five-year planning horizon, including the potential issuance of bonds backed by tax increment revenues pursuant to 8a) or 8b), above, during the term of the plan. Requires bonds to be issued in conformity with existing law; and,
- Time limits as follows:
- Forty-five years for the establishing of loans, advances, and indebtedness; or,
- Forty-five years for repayment of all of the authority's debts and obligations and fulfilling all of the authority's housing obligations. Requires the plan to specify that an authority shall dissolve as a legal entity in no more than 45 years, and that no further taxes shall be allocated to the authority thereafter. Specifies that this shall not be interpreted to prohibit an authority from refinancing outstanding debt solely to reduce interest costs.
- Requires the authority to hold a public hearing before adopting an affordable housing investment plan, and requires the authority to provide notice of that hearing in accordance with the Ralph M. Brown Act. Requires the authority to consider any comments made on the plan at the hearing before adopting the plan.
- Allows, at any time before or after adoption of the plan, any city, county, or special district (other than a school entity or successor agency) that receives ad valorem property taxes from property located within an area to adopt a resolution directing the county auditor-controller to allocate its share of tax increment funds within the area covered by the plan to the authority. Allows the resolution to direct the county auditor-controller to allocate less than the full amount of the tax increment, and to establish a maximum amount of time in years that the allocation takes place. Allows a resolution for an authority to be repealed and be of no further effect by giving the county auditor-controller 90 days' notice, with the county auditor-controller continuing to allocate to the authority the taxing entity's share of ad valorem property taxes that have been pledged to the repayment of debt issued by the authority until the debt has been fully repaid. Requires the city, county, or special district to approve a memorandum of understanding with the authority governing the authority's use of tax increment funds for administrative and overhead expenses.
- Allows, at any time before or after the adoption of the plan, the city, county, or special district, other than a school entity or successor agency, to adopt a resolution to allocate tax revenues of that entity to the authority, including revenues from local sales and use taxes or transactions and use taxes provided that the use of those revenues by the authority for purposes of this bill is consistent with the purposes for which that tax is imposed.
- Requires a minimum of 95% of the allocated tax increment revenues pursuant to 11) above, and allocated tax revenues pursuant to 12), above, to be used to increase, improve, and preserve the community's supply of housing for low- and moderate-income families. Prohibits more than 5% of allocated revenues to be used for administration.
- Requires housing funds expended by an authority to be spent proportionally on low-, very low-, and moderate-income housing.
- Allows an authority to do all of the following:
- Provide for low- and moderate-income housing;
- Remedy or remove a release of hazardous substances pursuant to the Polanco Redevelopment Act;
- Provide for seismic retrofits of existing buildings in accordance with all applicable laws and regulations;
- Acquire and transfer real property, as specified below. Requires the authority to retain controls and establish restrictions or covenants running with the land sold or leased for private use for the periods of time and under the conditions as provided in the plan. States that the establishment of these controls is a public purpose;
- Issue bonds in conformity with existing law;
- Borrow money, receive grants, or accept financial or other assistance or investment from the state or the federal government or any other public agency or private lending institution for any project within its area of operation, and comply with any conditions of a loan or grant. Allows an authority to qualify for funding as a disadvantaged community, pursuant to the Water Security, Clean Drinking Water, Coastal and Beach Protection Act of 2002, or as defined in Local Agency Formation Commission law that defines "disadvantaged unincorporated community." Allows an authority to enter into an agreement with a qualified community development entity, as defined, to coordinate investments of funds derived from the New Markets Tax Credit with those of the authority in instances where coordination offers opportunities for greater efficiency of investments to improve conditions described in c) and d), above, within the territorial jurisdiction of the authority;
- Receive funds allocated to it pursuant to a resolution adopted by a city, county, or special district to transfer these funds from a source described in existing Enhanced Infrastructure Financing District law related to net available revenues, property tax increment, and utilize other applicable revenues, as specified;
- Adopt an affordable housing plan, as specified above;
- Make loans of grants for owners or tenants to improve, rehabilitate, or retrofit buildings or structures within the plan area; and,
- Construct foundations, platforms, and other like structural forms necessary for the provision or utilization of air rights sites for buildings to be used for purposes of providing affordable housing.
- Requires the authority to contract for an independent audit conducted in accordance with generally accepted governmental auditing standards every five years, beginning in the calendar year in which the authority has allocated a cumulative total of not more than $1 million in tax increment revenues pursuant to 11), above, or other revenues pursuant to 12), above, including any proceeds of a debt issuance.
- Requires an authority to prepare a feasible method or plan for relocation of all of any families and persons to be temporarily or permanently displaced from housing facilities as a result of actions by the authority.
- Requires the authority to receive a priority for assistance in housing programs administered by the Department of Housing and Community Development, and other state agencies and departments.
- Allows an authority to transfer its housing responsibilities to a housing authority or city or county housing department if it determines that combining funding streams will reduce administrative costs or expedites the construction of affordable housing.
- Requires all housing assisted by an authority to remain affordable for at least 55 years for rental units and 45 years for owner-occupied units.
- Allows an authority, within the area of that authority, to:
- Purchase, lease, obtain an option upon, acquire by gift, grant, bequest, devise, or otherwise, any real or personal property, any interest in property, and any improvements on it, including repurchase of developed property previously owned by the authority. Requires the authority to obtain an appraisal from a qualified independent appraiser to determine the fair market value of property before the authority acquires or purchases real property;
- Accept, at the request of the legislative body of the community, a conveyance of real property, located either within or outside the plan area, owned by a public entity and declared surplus by the public entity, or owned by a private entity. Allows the authority to dispose of that property to private persons or to public or private entities, by sale or long-term lease for development. Allows all or any part of the funds derived from the sale or lease of that property to, at the discretion of the legislative body of the community, be paid to the community, or to the public entity from which any of that property was acquired;
- Sell, lease, grant, or donate real property owned or acquired by the authority in a plan area to a housing authority or to any public agency for public housing projects; and,
- Offer for resale property acquired by an authority for rehabilitation and resale within one year after completion of rehabilitation. Requires properties held by an authority in excess of a one-year period to be listed in the authority's annual report with information conveying the reasons that property remains unsold and indicating plans for its disposition.
- Requires the authority to retain controls and establish restrictions or covenants running with land sold or leased for private use for those periods of time and under those conditions as are provided in the plan. States that the establishment of those controls is a public purpose.
- Requires an authority to obligate lessees or purchasers of property acquired in an affordable housing project to:
- Use the property for the purpose designated in the affordable housing plan;
- Begin the project within a period of time which the authority fixes as reasonable;
- Comply with the covenants, conditions, or restrictions that the authority deems necessary to prevent speculation or excess profittaking in undeveloped land, including right of reverter to the agency. States that covenants, conditions, and restrictions imposed by an authority may provide for the reasonable protection of lenders; and,
- Comply with other conditions that the authority deems necessary to carry out the purposes of the bill's provisions.
- Specifies that an authority created pursuant to the bill's provisions shall be a local public agency subject to the Ralph M. Brown Act, the California Public Records Act, and the Political Reform Act.
EXISTING LAW:
- Specifies that a CRIA is a public body, corporate and politic, with jurisdiction to carry out a community revitalization plan (plan) within a community revitalization and investment area (area).
- Allows a CRIA to be created in any one of the following ways:
- A city, county, or city and county may adopt a resolution creating a CRIA; or,
- A city, county, city and county, and special district, or any combination thereof, may create a CRIA by entering into a joint powers agreement.
- Specifies the makeup of the governing body of the CRIA.
- Allows a CRIA to carry out a plan within an area, and requires that not less than 80% of the land calculated by census tracts, census block groups, as defined by the United States Census Bureau, of any combination of both within the area shall be characterized by both of the following conditions:
- An annual median household income that is less than, at the option of the CRIA, 80% of the statewide, countywide, or citywide annual median income; and,
- Three of the following four conditions:
- An unemployment rate that is at least 3% points higher than the statewide average annual unemployment rate, as specified;
- Crime rates, as documented by records maintained by the law enforcement agency that has jurisdiction in the plan area for violent or property crime offenses, that are at least 5% higher than the statewide average crime rate for violent or property crime offenses, as specified;
- Deteriorated or inadequate infrastructure, including streets, sidewalks, water supply, sewer treatment or processing, and parks; and,
- Deteriorated commercial or residential structures.
- Allows, as an alternative to 4), above, a CRIA to carry out a plan with an area if it meets either of the following conditions:
- The area is established within a former military base that is principally characterized by deteriorated or inadequate infrastructure and structures; or,
- The census tracts or census block groups within the area are situated within a disadvantaged community, as specified.
- Specifies that the Ralph M. Brown Act (Brown Act), Public Records Act, and the Political Reform Act apply to a CRIA.
- Allows a CRIA to adopt a plant that may include a provision for the receipt of tax increment funds generated within the area, as specified, provided the plan includes specified elements.
- Specifies the time limits for a CRIA, as follows:
- Thirty years for establishing loans, advances, and indebtedness; and,
- Forty-five years for the repayment of all the CRIA's debts and obligations, and fulfilling all of the CRIA's housing obligations, as specified.
- Requires a CRIA to consider adoption of the plan at three public hearings that shall take place at least 30 days apart, and requires specified actions at those three hearings.
FISCAL EFFECT: According to the Assembly Appropriations Committee, this bill contains negligible state General Fund impact from property tax revenue redirection because schools are prohibited from participating and potentially substantial fiscal impacts to participating local governments, but all affected local governments volunteer to participate.
COMMENTS:
- Bill Summary. This bill authorizes a city or county to create an affordable housing authority, modelled after CRIA law, to fund activities related to the promotion and development of affordable housing. The bill's provisions specify that the authority can capture property tax increment, or revenues from a local sales and use tax or transactions and use tax, provided that the use of those revenues by the authority is consistent with the purposes for which that tax was imposed. The bill also contains the process for forming the authority, the governance structure of the authority, and requires the authority to adopt an affordable housing investment plan and what that plan must contain, as well as a requirement for the authority to comply with the Ralph M. Brown Act, Public Records Act, and the Political Reform Act.
The bill is sponsored by the author.
- Author's Statement. According to the author, "Over the past six years, cities and counties in California have lost nearly 70% of all state and federal funding formerly available for affordable housing, and even deeper cuts to the US Department of Housing and Urban Development (HUD) are anticipated. According to the California Housing Partnership, there is a shortfall of over 1.54 million homes affordable to lower-income families and not one county in the state has a sufficient number of affordable rental homes.
"This bill expands AB 2 (Alejo, 2015) which created Community Revitalization and Investment Authorities (CRIAs). For many communities, the "blight" findings and indices of crime and unemployment required under AB 2 are not applicable metrics. Many cities in the Bay Area, for example, are not lacking in private investment in commercial and office development, but are, instead, seeing a wide and ever-growing job-housing gap that far outpaces the production of new affordable homes.
"Therefore, localities need a tool to capture the growth in tax increment produced by new commercial development and invest those revenues in the production of homes affordable to the local workforce."
- Background on CRIAs. Over the last 60 years, redevelopment agencies used tax increment to finance affordable housing, community development, and economic development projects. The dissolution of redevelopment agencies created a void and as such, an effort to create new tools that would support community and economic development activities was undertaken. AB 2 (Alejo), Chapter 319, Statutes of 2015, allows local government entities, excluding schools, to form a CRIA to collect property tax increment and issue debt. The CRIA could use its powers to invest in disadvantaged communities with a high crime rate, high unemployment, and deteriorated and inadequate infrastructure, commercial, and residential buildings. Three of these four conditions would constitute blight. The area where the CRIA could invest would also be required to have an annual median household income that is less than 80% of the statewide annual median income. This is different from redevelopment agencies that were required to conduct a study and make a finding that blight existed in a project area before they could use their extraordinary powers, like eminent domain, to eradicate blight.
Like redevelopment agencies, AB 2 allowed CRIAs to freeze the property taxes at the time the plan for revitalizing the area is approved. The CRIA collects all the tax increment or the increase in property taxes that is generated after that point and use it on specified activities. Unlike redevelopment agencies, AB 2 specified that the taxing entities in the area, including the county, city, special districts, or a military base must agree to divert tax increment to the CRIA. Local government entities that initially participate can opt out by giving the auditor-controller sixty days' notice; however, the auditor controller will continue to collect the local government entities' portions of tax increment until any debts issued up until then have been repaid. No portion of the local schools' share of tax increment may go to the CRIA.
- Arguments in Support. Supporters argue that the bill will provide local governments with a critical tool to address the housing affordability crisis without raising taxes, and invest the tax increment revenues in the production of homes affordable to their workers.
- Arguments in Opposition. The Howard Jarvis Taxpayers Association notes the concern with the apparent lack of a requirement in the bill that any bonds issued by the authority be voter-approved, and writes that these bonds could remain on the books for up to 40 years after they are sold, surpassing the probable tenure of most authority members.
Analysis Prepared by: Debbie Michel / L. GOV. / (916) 319-3958 FN: 0000488
Date of Hearing: May 24, 2017
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez Fletcher, Chair
ABPCA Bill Id:AB 1598
Author:(Mullin) – As Amended Ver:May 1, 2017
Policy Committee: | Local Government | Vote: | 7 - 2 |
Housing and Community Development | 5 - 2 | ||
|
|
Urgency: No State Mandated Local Program: No Reimbursable: No
SUMMARY:
This bill authorizes a city or county to create an affordable housing authority (authority), modelled after Community Revitalization and Investment Authority (CRIA) law and is required to use 95% of funding it generates to increase, improve, and preserve the community's supply of housing for low-and moderate income families. An authority can capture property tax increment as well as use local sales and use taxes, approved for the purpose of funding affordable housing for low- and moderate-income households for this purpose.
FISCAL EFFECT:
- Negligible state General Fund impact from property tax revenue redirection because schools are prohibited from participating.
- Potentially substantial fiscal impacts to participating local governments, but all affected local governments volunteer to participate.
COMMENTS:
- Purpose. According to the author, “Over the past six years, cities and counties in California have lost nearly 70% of all state and federal funding formerly available for affordable housing, and even deeper cuts to the US Department of Housing and Urban Development (HUD) are anticipated. According to the California Housing Partnership, there is a shortfall of over 1.54 million homes affordable to lower-income families and not one county in the state has a sufficient number of affordable rental homes.
“This bill expands AB 2 (Alejo, 2015) which created Community Revitalization and Investment Authorities (CRIAs). For many communities, the “blight” findings and indices of crime and unemployment required under AB 2 are not applicable metrics. Many cities in the Bay Area, for example, are not lacking in private investment in commercial and office development, but are, instead, seeing a wide and ever-growing job-housing gap that far outpaces the production of new affordable homes.
“Therefore, localities need a tool to capture the growth in tax increment produced by new commercial development and invest those revenues in the production of homes affordable to the local workforce.”
- Background. Over the last 60 years, redevelopment agencies used tax increment to finance affordable housing, community development, and economic development projects. The dissolution of redevelopment agencies created a void and resulted in efforts to create new tools that would support community and economic development activities. AB 2 (Alejo and E. Garcia), Chapter 319, Statutes of 2015, allows local government entities, excluding schools, to form a CRIA to collect property tax increment and issue debt. The CRIA could use its powers to invest in disadvantaged communities with a high crime rate, high unemployment, and deteriorated and inadequate infrastructure, commercial, and residential buildings. Three of these four conditions would constitute blight. The area where the CRIA could invest would also be required to have an annual median household income that is less than 80% of the statewide annual median income. This is different from redevelopment agencies that were required to conduct a study and make a finding that blight existed in a project area before they could use their extraordinary powers, like eminent domain, to eradicate blight.
Like redevelopment agencies, AB 2 allows CRIAs to freeze the property taxes at the time the plan for revitalizing the area is approved. The CRIA collects all the tax increment or the increases in property taxes that is generated after that point and uses it on specified activities. Unlike redevelopment agencies, AB 2 specifies that the taxing entities in the area, including the county, city, special districts, or a military base must agree to divert tax increment to the CRIA. Local government entities that initially participate can opt out by giving the auditor-controller sixty days' notice; however, the auditor controller will continue to collect the local government entities' portions of tax increment until any debts issued up until that point have been repaid. No portion of the local schools' share of tax increment may go to the CRIA.
Analysis Prepared by: Jennifer Swenson / APPR. / (916) 319-2081
Date of Hearing: April 26, 2017
ASSEMBLY COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT
David Chiu, Chair
ABPCA Bill Id:AB 1598 (
Author:Mullin) – As Amended Ver:April 6, 2017
SUBJECT: Affordable housing authorities
SUMMARY: Allows a city or county to create an affordable housing authority to fund affordable housing, similar to a Community Revitalization and Investment Authority (CRIA). Specifically, this bill:
- Defines the following terms, for purposes of the bill’s provisions:
- “Authority” to mean an affordable housing authority;
- “Consenting local agency” to mean a local agency that has adopted a resolution of its governing body consenting to the affordable housing investment plan;
- “Plan” to mean an affordable housing investment plan adopted pursuant to 6), below;
- “Real property” to mean any of the following:
- Land, including land under water and waterfront property;
- Buildings, structures, fixtures, and improvements on the land;
- Any property appurtenant to or used in connection with the land; and,
- Every estate, interest, privilege, easement, franchise, and right in land, including rights-of-way, terms for years, and liens, charges, or encumbrances by way of judgment, mortgage, or otherwise and the indebtedness secured by those liens.
- Allows a city, county, or city and county (hereafter referred to as “city and county”) to adopt a resolution creating an affordable housing authority (authority) and a Low and Moderate Income Housing Fund which shall be limited to providing low- and moderate-income housing. States that an authority is a public body, corporate and politic.
- Provides that a school entity, as specified, may not participate in an authority.
- Prohibits a successor agency to a redevelopment agency (RDA) from participating in an authority and an authority cannot receive any property taxes resulting from the dissolution of RDAs.
- Provides that a city and county cannot form an authority until successor agency for the former RDA has received a finding of completion from DOF or if the former RDA's assets are the subject of active litigation.
- Prohibits a city and county from forming an authority until it has complied with any orders from the Controller regarding an asset transfer from the former RDA to the city and county in which it was created.
- Specifies the membership of the governing board of an authority, as follows:
- At least three members of the city council or the board of supervisors appointed by the city council or the board of supervisors, or; in the case of an authority created by a city and county jointly, at least three members of the city council and three members of the board of supervisors; and,
- At least one member of the public who lives or works within the boundaries of the city or county that created the authority;
- Allows the boundaries of an authority to be identical to the boundaries of the city or county that created the authority.
- Requires an authority, by resolution, to adopt an affordable housing investment plan (plan) that may include either of the following:
- A provision of the receipt of tax increment funds generated within the area; and
- A provision for the receipt of any tax revenues that a tax entity, excluding a school entity receives as a result of the dissolution of an RDA.
- Requires the plan to include each of the following elements:
- A statement of the principal goals and objectives of the plan;
- An affordable housing program that describes how the authority will fulfill its objective and if duties and activities will be assigned to a city or county housing department or public housing authority;
- The amount available in the Low and Moderate Income Housing Fund and the estimated amounts that will be deposited in the fund during each of the next five years;
- Estimates of the number of new, rehabilitated, or price restricted residential units to be assisted during each of the five years and estimates of the expenditures of moneys from the Low and Moderate Income Housing Fund during each of the five years;
- A description of how the program will implement the requirements for expenditures of funds in the Low and Moderate Income Housing Fund over a 10-year period at various income levels;
- Estimates of the number of units, if any, to be developed by the authority for very low-, low-, and moderate-income households during the next five years;
- A fiscal analysis setting forth the projected receipt of revenue and projected expenses over a five-year planning horizon, including the potential issuance of bonds backed by tax increment, tax increment that a taxing entity as a result of the dissolution of an RDA, or any local sales and use for which the approved use is consistent with the purposes of the authority during the term of the plan. Requires bonds to be issued in conformity with existing law; and,
- Time limits as follows:
- 45 years for the establishing of loans, advances, and indebtedness; or,
- 45 years for repayment of all of the authority’s debts and obligations and fulfilling all of the authority’s housing obligations. Requires the plan to specify that an authority shall dissolve as a legal entity in no more than 45 years, and that no further taxes shall be allocated to the authority thereafter. Specifies that this shall not be interpreted to prohibit an authority from refinancing outstanding debt solely to reduce interest costs.
- Requires housing funds expended by an authority to be spent proportionally on low-, very low-, and moderate-income housing.
- Allows an authority to do all of the following:
- Provide for low- and moderate-income housing;
- Remedy or remove a release of hazardous substances pursuant to the Polanco Redevelopment Act;
- Provide for seismic retrofits of existing buildings in accordance with all applicable laws and regulations;
- Acquire and transfer real property, as specified below. Requires the authority to retain controls and establish restrictions or covenants running with the land sold or leased for private use for the periods of time and under the conditions as provided in the plan. States that the establishment of these controls is a public purpose;
- Issue bonds in conformity with existing law;
- Borrow money, receive grants, or accept financial or other assistance or investment from the state or the federal government or any other public agency or private lending institution for any project within its area of operation, and comply with any conditions of a loan or grant. Allows an authority to qualify for funding as a disadvantaged community, pursuant to the Water Security, Clean Drinking Water, Coastal and Beach Protection Act of 2002, or as defined in Local Agency Formation Commission law that defines “disadvantaged unincorporated community.” Allows an authority to enter into an agreement with a qualified community development entity, as defined, to coordinate investments of funds derived from the New Markets Tax Credit with those of the authority in instances where coordination offers opportunities for greater efficiency of investments to improve conditions described in c) and d), above, within the territorial jurisdiction of the authority;
- Receive funds allocated to it pursuant to a resolution adopted by a city, county, or special district to transfer these funds from a source described in existing Enhanced Infrastructure Financing District law related to net available revenues, property tax increment, and utilize other applicable revenues, as specified;
- Adopt an affordable housing plan, as specified above;
- Make loans of grants for owners or tenants to improve, rehabilitate, or retrofit buildings or structures within the plan area; and,
- Construct foundations, platforms, and other like structural forms necessary for the provision or utilization of air rights sites for buildings to be used for purposes of providing affordable housing.
- Requires the authority to contract for an independent audit conducted in accordance with generally accepted governmental auditing standards every five years, beginning in the calendar year in which the authority has allocated a cumulative total of not more than $1 million in tax increment or local sales and use or transactions and use tax revenues, including any proceeds of a debt issuance.
- Requires an authority to prepare a feasible method or plan for relocation of all of any families and persons to be temporarily or permanently displaced from housing facilities as a result of actions by the authority.
- Requires the authority to receive a priority for assistance in housing programs administered by the California Housing Finance Agency, the Department of Housing and Community Development, and other state agencies and departments.
- Allows an authority to transfer its housing responsibilities to a housing authority or city or county housing department if it determines that combining funding streams will reduce administrative costs or expedites the construction of affordable housing.
- Requires all housing assisted by an authority to remain affordable for at least 55 years for rental units and 45 years for owner-occupied units.
- Allows an authority, within the area of that authority, to:
- Purchase, lease, obtain an option upon, acquire by gift, grant, bequest, devise, or otherwise, any real or personal property, any interest in property, and any improvements on it, including repurchase of developed property previously owned by the authority. Requires the authority to obtain an appraisal from a qualified independent appraiser to determine the fair market value of property before the authority acquires or purchases real property;
- Accept, at the request of the legislative body of the community, a conveyance of real property, located either within or outside the plan area, owned by a public entity and declared surplus by the public entity, or owned by a private entity. Allows the authority to dispose of that property to private persons or to public or private entities, by sale or long-term lease for development. Allows all or any part of the funds derived from the sale or lease of that property to, at the discretion of the legislative body of the community, be paid to the community, or to the public entity from which any of that property was acquired;
- Sell, lease, grant, or donate real property owned or acquired by the authority in a plan area to a housing authority or to any public agency for public housing projects; and,
- Offer for resale property acquired by an authority for rehabilitation and resale within one year after completion of rehabilitation. Requires properties held by an authority in excess of a one-year period to be listed in the authority’s annual report with information conveying the reasons that property remains unsold and indicating plans for its disposition.
- Requires the authority to retain controls and establish restrictions or covenants running with land sold or leased for private use for those periods of time and under those conditions as are provided in the plan. States that the establishment of those controls is a public purpose.
- Requires an authority to obligate lessees or purchasers of property acquired in an affordable housing project to:
- Use the property for the purpose designated in the affordable housing plan;
- Begin the project within a period of time which the authority fixes as reasonable;
- Comply with the covenants, conditions, or restrictions that the authority deems necessary to prevent speculation or excess profittaking in undeveloped land, including right of reverter to the agency. States that covenants, conditions, and restrictions imposed by an authority may provide for the reasonable protection of lenders; and,
- Comply with other conditions that the authority deems necessary to carry out the purposes of the bill’s provisions.
- Limits provisions of the bill dealing with sales and use tax increment or transactions and use tax increment specifically to those measures approved by voters that are consistent with the intent of funding the creation of affordable housing.
- Requires an authority to consider adoption of the plan at a public hearing.
- Ensures that the authority is subject to provisions of the Brown Act, Public Records Act, and the Political Reform Act.
- Limit successor agencies from participating in an authority and prohibit a city or county that created an RDA that was dissolved, from participating in an authority until the agency has a finding of completion from the DOF, and complies with the orders of the Controller, as specified.
EXISTING LAW:
- Specifies that a CRIA is a public body, corporate and politic, with jurisdiction to carry out a community revitalization plan (plan) within a community revitalization and investment area (area).
- Allows a CRIA to be created in any one of the following ways:
- A city, county, or city and county may adopt a resolution creating a CRIA; or,
- A city, county, city and county, and special district, or any combination thereof, may create a CRIA by entering into a joint powers agreement.
- Specifies the makeup of the governing body of the CRIA.
- Allows a CRIA to carry out a plan within an area, and requires that not less than 80% of the land calculated by census tracts, census block groups, as defined by the United States Census Bureau, of any combination of both within the area shall be characterized by both of the following conditions:
- An annual median household income that is less than, at the option of the CRIA, 80% of the statewide, countywide, or citywide annual median income; and,
- Three of the following four conditions:
- An unemployment rate that is at least 3% points higher than the statewide average annual unemployment rate, as specified;
- Crime rates, as documented by records maintained by the law enforcement agency that has jurisdiction in the plan area for violent or property crime offenses, that are at least 5% higher than the statewide average crime rate for violent or property crime offenses, as specified;
- Deteriorated or inadequate infrastructure, including streets, sidewalks, water supply, sewer treatment or processing, and parks; and,
- Deteriorated commercial or residential structures.
- Allows, as an alternative to 4), above, a CRIA to carry out a plan with an area if it meets either of the following conditions:
- The area is established within a former military base that is principally characterized by deteriorated or inadequate infrastructure and structures; or,
- The census tracts or census block groups within the area are situated within a disadvantaged community, as specified.
- Specifies that the Ralph M. Brown Act (Brown Act), Public Records Act, and the Political Reform Act apply to a CRIA.
- Allows a CRIA to adopt a plant that may include a provision for the receipt of tax increment funds generated within the area, as specified, provided the plan includes specified elements.
- Specifies the time limits for a CRIA, as follows:
- 30 years for establishing loans, advances, and indebtedness; and,
- 45 years for the repayment of all the CRIA’s debts and obligations, and fulfilling all of the CRIA’s housing obligations, as specified.
- Requires a CRIA to consider adoption of the plan at three public hearings that shall take place at least 30 days apart, and requires specified actions at those three hearings.
FISCAL EFFECT: This bill is keyed fiscal.
COMMENTS:
Purpose of this bill: According to the author, “Over the past six years, cities and counties in California have lost nearly 70% of all state and federal funding formerly available for affordable housing, and even deeper cuts to the US Department of Housing and Urban Development (HUD) are anticipated. According to the California Housing Partnership, there is a shortfall of over 1.54 million homes affordable to lower-income families and not one county in the state has a sufficient number of affordable rental homes.
“This bill expands AB 2 (Alejo, 2015) which created Community Revitalization and Investment Authorities (CRIAs). For many communities, the “blight” findings and indices of crime and unemployment required under AB 2 are not applicable metrics. Many cities in the Bay Area, for example, are not lacking in private investment in commercial and office development, but are, instead, seeing a wide and ever-growing job-housing gap that far outpaces the production of new affordable homes.
“Therefore, localities need a tool to capture the growth in tax increment produced by new commercial development and invest those revenues in the production of homes affordable to the local workforce.”
Background on CRIAs: Over the last 60 years, redevelopment agencies used tax increment to finance affordable housing, community development, and economic development projects. The dissolution of redevelopment agencies created a void and resulted in efforts to create new tools that would support community and economic development activities. AB 2 (Alejo and E. Garcia), Chapter 319, Statutes of 2015, allows local government entities, excluding schools, to form a CRIA to collect property tax increment and issue debt. The CRIA could use its powers to invest in disadvantaged communities with a high crime rate, high unemployment, and deteriorated and inadequate infrastructure, commercial, and residential buildings. Three of these four conditions would constitute blight. The area where the CRIA could invest would also be required to have an annual median household income that is less than 80% of the statewide annual median income. This is different from redevelopment agencies that were required to conduct a study and make a finding that blight existed in a project area before they could use their extraordinary powers, like eminent domain, to eradicate blight.
Like redevelopment agencies, AB 2 allowed CRIAs to freeze the property taxes at the time the plan for revitalizing the area is approved. The CRIA collects all the tax increment or the increases in property taxes that is generated after that point and uses it on specified activities. Unlike redevelopment agencies, AB 2 specified that the taxing entities in the area, including the county, city, special districts, or a military base must agree to divert tax increment to the CRIA. Local government entities that initially participate can opt out by giving the auditor-controller sixty days' notice; however, the auditor controller will continue to collect the local government entities' portions of tax increment until any debts issued up until then have been repaid. No portion of the local schools' share of tax increment may go to the CRIA.
Affordable housing authority: This bill authorizes a city or county to create an affordable housing authority (authority), modelled after CRIA law and is required to use 95% of funding it generates to increase, improve, and preserve the community's supply of housing for low-and moderate income families. An authority can capture property tax increment as well as use local sales and use taxes, approved for the purpose of funding affordable housing for low- and moderate-income households for this purpose.
Technical amendment:
An authority shall receive a priority for assistance in housing programs administered by the California Housing Finance Agency, the Department of Housing and Community Development, and other state agencies and departments.”
Double referred: This bill is double referred. It was heard in the Assembly Committee on Local Government and passed out on a vote of 7-2 on April 19, 2017.
REGISTERED SUPPORT / OPPOSITION:
Support
California Apartment Association
California Housing Partnership
EAH Housing
Robert Herman of Herman Coliver Locus Architecture
Non-Profit Housing Association of Northern California
Opposition
Howard Jarvis Taxpayers Association
Analysis Prepared by: Lisa Engel / H. & C.D. / (916) 319-2085
Date of Hearing: April 19, 2017
ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
Cecilia Aguiar-Curry, Chair
ABPCA Bill Id:AB 1598 (
Author:Mullin) – As Amended Ver:April 6, 2017
SUBJECT: Affordable housing authorities.
SUMMARY: Allows a city or county to create an affordable housing authority to fund affordable housing, similar to a Community Revitalization and Investment Authority (CRIA). Specifically, this bill:
- Defines the following terms, for purposes of the bill’s provisions:
- “Authority” to mean an affordable housing authority;
- “Consenting local agency” to mean a local agency that has adopted a resolution of its governing body consenting to the affordable housing investment plan;
- “Plan” to mean an affordable housing investment plan adopted pursuant to 6), below;
- “Real property” to mean any of the following:
- Land, including land under water and waterfront property;
- Buildings, structures, fixtures, and improvements on the land;
- Any property appurtenant to or used in connection with the land; and,
- Every estate, interest, privilege, easement, franchise, and right in land, including rights-of-way, terms for years, and liens, charges, or encumbrances by way of judgment, mortgage, or otherwise and the indebtedness secured by those liens.
- Allows a city, county, or city and county (hereafter referred to as “city and county”) to adopt a resolution creating an affordable housing authority (authority) and a Low and Moderate Income Housing Fund which shall be limited to providing low- and moderate-income housing. States that an authority is a public body, corporate and politic.
- Provides that a school entity, as specified, may not participate in an authority.
- Specifies the membership of the governing board of an authority, as follows:
- At least three members of the city council or the board of supervisors appointed by the city council or the board of supervisors, or; in the case of an authority created by a city and county jointly, at least three members of the city council and three members of the board of supervisors; and,
- At least one member of the public who lives or works within the boundaries of the city or county that created the authority;
- Allows the boundaries of an authority to be identical to the boundaries of the city or county that created the authority.
- Requires an authority, by resolution, to adopt an affordable housing investment plan (plan) that may include either of the following:
- A provision of the receipt of tax increment funds generated within the area;
- If the boundaries of the authority are identical to the boundaries of the city or county that created the authority, a provision for the receipt of any increase of the total receipts of local sales and use tax or transactions and use tax from one year to the next collected by a consenting local agency and attributable to the area of the authority. Specifies that sales and use tax and transactions and use tax revenues may be allocated and used in the same manner as tax increment.
- Requires the plan to include each of the following elements:
- A statement of the principal goals and objectives of the plan;
- An affordable housing program that describes how the authority will fulfill its objective and if duties and activities will be assigned to a city or county housing department or public housing authority;
- The amount available in the Low and Moderate Income Housing Fund and the estimated amounts that will be deposited in the fund during each of the next five years;
- Estimates of the number of new, rehabilitated, or price restricted residential units to be assisted during each of the five years and estimates of the expenditures of moneys from the Low and Moderate Income Housing Fund during each of the five years;
- A description of how the program will implement the requirements for expenditures of funds in the Low and Moderate Income Housing Fund over a 10-year period at various income levels;
- Estimates of the number of units, if any, to be developed by the authority for very low-, low-, and moderate-income households during the next five years;
- A fiscal analysis setting forth the projected receipt of revenue and projected expenses over a five-year planning horizon, including the potential issuance of bonds backed by tax increment and increased local sales and use and transactions and use tax revenues during the term of the plan. Requires bonds to be issued in conformity with existing law; and,
- Time limits as follows:
- 45 years for the establishing of loans, advances, and indebtedness; or,
- 45 years for repayment of all of the authority’s debts and obligations and fulfilling all of the authority’s housing obligations. Requires the plan to specify that an authority shall dissolve as a legal entity in no more than 45 years, and that no further taxes shall be allocated to the authority thereafter. Specifies that this shall not be interpreted to prohibit an authority from refinancing outstanding debt solely to reduce interest costs.
- Allows, at any time prior to or after adoption of the plan, any city, county, or special district (other than a school entity or successor agency) that receives ad valorem property taxes from property located within an area, or local sales and use taxes or transactions and use taxes, to adopt a resolution directing the county auditor-controller to allocate its share of tax increment funds within the area covered by the plan, or its increased local sales and use taxes or transactions and use taxes attributable to the area, to the authority. Allows the resolution to direct the county auditor-controller to allocate less than the full amount of the tax increment, or increased attributable tax revenues, and establish a maximum amount of time in years that the allocation takes place. Allows a resolution for an authority to be repealed and be of no further effect by giving the county auditor-controller 90 days’ notice, with the county auditor-controller continuing to allocate to the authority the taxing entity’s share of ad valorem property taxes, or local sales and use or transactions and use taxes that have been pledged to the repayment of debt issued by the authority until the debt has been fully repaid. Requires the city, county, or special district to approve a memorandum of understanding with the authority governing the authority’s use of tax increment funds and local sales and use and transactions and use tax revenues for administrative and overhead expenses.
- Requires a minimum of 95% of the allocated tax increment revenues and allocated local sales and use or transactions and use tax revenues to be used to increase, improve, and preserve the community’s supply of housing for low- and moderate-income families. Prohibits more than 5% of allocated revenues to be used for administration.
- Requires housing funds expended by an authority to be spent proportionally on low-, very low-, and moderate-income housing.
- Allows an authority to do all of the following:
- Provide for low- and moderate-income housing;
- Remedy or remove a release of hazardous substances pursuant to the Polanco Redevelopment Act;
- Provide for seismic retrofits of existing buildings in accordance with all applicable laws and regulations;
- Acquire and transfer real property, as specified below. Requires the authority to retain controls and establish restrictions or covenants running with the land sold or leased for private use for the periods of time and under the conditions as provided in the plan. States that the establishment of these controls is a public purpose;
- Issue bonds in conformity with existing law;
- Borrow money, receive grants, or accept financial or other assistance or investment from the state or the federal government or any other public agency or private lending institution for any project within its area of operation, and comply with any conditions of a loan or grant. Allows an authority to qualify for funding as a disadvantaged community, pursuant to the Water Security, Clean Drinking Water, Coastal and Beach Protection Act of 2002, or as defined in Local Agency Formation Commission law that defines “disadvantaged unincorporated community.” Allows an authority to enter into an agreement with a qualified community development entity, as defined, to coordinate investments of funds derived from the New Markets Tax Credit with those of the authority in instances where coordination offers opportunities for greater efficiency of investments to improve conditions described in c) and d), above, within the territorial jurisdiction of the authority;
- Receive funds allocated to it pursuant to a resolution adopted by a city, county, or special district to transfer these funds from a source described in existing Enhanced Infrastructure Financing District law related to net available revenues, property tax increment, and utilize other applicable revenues, as specified;
- Adopt an affordable housing plan, as specified above;
- Make loans of grants for owners or tenants to improve, rehabilitate, or retrofit buildings or structures within the plan area; and,
- Construct foundations, platforms, and other like structural forms necessary for the provision or utilization of air rights sites for buildings to be used for purposes of providing affordable housing.
- Requires the authority to contract for an independent audit conducted in accordance with generally accepted governmental auditing standards every five years, beginning in the calendar year in which the authority has allocated a cumulative total of not more than $1 million in tax increment or local sales and use or transactions and use tax revenues, including any proceeds of a debt issuance.
- Requires an authority to prepare a feasible method or plan for relocation of all of any families and persons to be temporarily or permanently displaced from housing facilities as a result of actions by the authority.
- Requires the authority to receive a priority for assistance in housing programs administered by the California Housing Finance Agency, the Department of Housing and Community Development, and other state agencies and departments.
- Allows an authority to transfer its housing responsibilities to a housing authority or city or county housing department if it determines that combining funding streams will reduce administrative costs or expedites the construction of affordable housing.
- Requires all housing assisted by an authority to remain affordable for at least 55 years for rental units and 45 years for owner-occupied units.
- Allows an authority, within the area of that authority, to:
- Purchase, lease, obtain an option upon, acquire by gift, grant, bequest, devise, or otherwise, any real or personal property, any interest in property, and any improvements on it, including repurchase of developed property previously owned by the authority. Requires the authority to obtain an appraisal from a qualified independent appraiser to determine the fair market value of property before the authority acquires or purchases real property;
- Accept, at the request of the legislative body of the community, a conveyance of real property, located either within or outside the plan area, owned by a public entity and declared surplus by the public entity, or owned by a private entity. Allows the authority to dispose of that property to private persons or to public or private entities, by sale or long-term lease for development. Allows all or any part of the funds derived from the sale or lease of that property to, at the discretion of the legislative body of the community, be paid to the community, or to the public entity from which any of that property was acquired;
- Sell, lease, grant, or donate real property owned or acquired by the authority in a plan area to a housing authority or to any public agency for public housing projects; and,
- Offer for resale property acquired by an authority for rehabilitation and resale within one year after completion of rehabilitation. Requires properties held by an authority in excess of a one-year period to be listed in the authority’s annual report with information conveying the reasons that property remains unsold and indicating plans for its disposition.
- Requires the authority to retain controls and establish restrictions or covenants running with land sold or leased for private use for those periods of time and under those conditions as are provided in the plan. States that the establishment of those controls is a public purpose.
- Requires an authority to obligate lessees or purchasers of property acquired in an affordable housing project to:
- Use the property for the purpose designated in the affordable housing plan;
- Begin the project within a period of time which the authority fixes as reasonable;
- Comply with the covenants, conditions, or restrictions that the authority deems necessary to prevent speculation or excess profittaking in undeveloped land, including right of reverter to the agency. States that covenants, conditions, and restrictions imposed by an authority may provide for the reasonable protection of lenders; and,
- Comply with other conditions that the authority deems necessary to carry out the purposes of the bill’s provisions.
EXISTING LAW:
- Specifies that a CRIA is a public body, corporate and politic, with jurisdiction to carry out a community revitalization plan (plan) within a community revitalization and investment area (area).
- Allows a CRIA to be created in any one of the following ways:
- A city, county, or city and county may adopt a resolution creating a CRIA; or,
- A city, county, city and county, and special district, or any combination thereof, may create a CRIA by entering into a joint powers agreement.
- Specifies the makeup of the governing body of the CRIA.
- Allows a CRIA to carry out a plan within an area, and requires that not less than 80% of the land calculated by census tracts, census block groups, as defined by the United States Census Bureau, of any combination of both within the area shall be characterized by both of the following conditions:
- An annual median household income that is less than, at the option of the CRIA, 80% of the statewide, countywide, or citywide annual median income; and,
- Three of the following four conditions:
- An unemployment rate that is at least 3% points higher than the statewide average annual unemployment rate, as specified;
- Crime rates, as documented by records maintained by the law enforcement agency that has jurisdiction in the plan area for violent or property crime offenses, that are at least 5% higher than the statewide average crime rate for violent or property crime offenses, as specified;
- Deteriorated or inadequate infrastructure, including streets, sidewalks, water supply, sewer treatment or processing, and parks; and,
- Deteriorated commercial or residential structures.
- Allows, as an alternative to 4), above, a CRIA to carry out a plan with an area if it meets either of the following conditions:
- The area is established within a former military base that is principally characterized by deteriorated or inadequate infrastructure and structures; or,
- The census tracts or census block groups within the area are situated within a disadvantaged community, as specified.
- Specifies that the Ralph M. Brown Act (Brown Act), Public Records Act, and the Political Reform Act apply to a CRIA.
- Allows a CRIA to adopt a plant that may include a provision for the receipt of tax increment funds generated within the area, as specified, provided the plan includes specified elements.
- Specifies the time limits for a CRIA, as follows:
- 30 years for establishing loans, advances, and indebtedness; and,
- 45 years for the repayment of all the CRIA’s debts and obligations, and fulfilling all of the CRIA’s housing obligations, as specified.
- Requires a CRIA to consider adoption of the plan at three public hearings that shall take place at least 30 days apart, and requires specified actions at those three hearings.
FISCAL EFFECT: This bill is keyed fiscal.
COMMENTS:
- Bill Summary. This bill authorizes a city or county to create an affordable housing authority, modelled after CRIA law, to fund activities related to the promotion and development of affordable housing. The bill’s provisions specify that the authority could capture property tax increment, and sales and use tax increment and transactions and use tax increment, assuming that the entity consents. The bill also contains the process for forming the authority, the governance structure of the authority, and requires the authority to adopt an affordable housing investment plan and what that plan must contain.
The bill is sponsored by the author.
- Author’s Statement. According to the author, “Over the past six years, cities and counties in California have lost nearly 70% of all state and federal funding formerly available for affordable housing, and even deeper cuts to the US Department of Housing and Urban Development (HUD) are anticipated. According to the California Housing Partnership, there is a shortfall of over 1.54 million homes affordable to lower-income families and not one county in the state has a sufficient number of affordable rental homes.
“This bill expands AB 2 (Alejo, 2015) which created Community Revitalization and Investment Authorities (CRIAs). For many communities, the “blight” findings and indices of crime and unemployment required under AB 2 are not applicable metrics. Many cities in the Bay Area, for example, are not lacking in private investment in commercial and office development, but are, instead, seeing a wide and ever-growing job-housing gap that far outpaces the production of new affordable homes.
“Therefore, localities need a tool to capture the growth in tax increment produced by new commercial development and invest those revenues in the production of homes affordable to the local workforce.”
- Background on CRIAs. Over the last 60 years, redevelopment agencies used tax increment to finance affordable housing, community development, and economic development projects. The dissolution of redevelopment agencies created a void and as such, an effort to create new tools that would support community and economic development activities was undertaken. AB 2 (Alejo and E. Garcia), Chapter 319, Statutes of 2015, allows local government entities, excluding schools, to form a CRIA to collect property tax increment and issue debt. The CRIA could use its powers to invest in disadvantaged communities with a high crime rate, high unemployment, and deteriorated and inadequate infrastructure, commercial, and residential buildings. Three of these four conditions would constitute blight. The area where the CRIA could invest would also be required to have an annual median household income that is less than 80% of the statewide annual median income. This is different from redevelopment agencies that were required to conduct a study and make a finding that blight existed in a project area before they could use their extraordinary powers, like eminent domain, to eradicate blight.
Like redevelopment agencies, AB 2 allowed CRIAs to freeze the property taxes at the time the plan for revitalizing the area is approved. The CRIA collects all the tax increment or the increase in property taxes that is generated after that point and use it on specified activities. Unlike redevelopment agencies, AB 2 specified that the taxing entities in the area, including the county, city, special districts, or a military base must agree to divert tax increment to the CRIA. Local government entities that initially participate can opt out by giving the auditor-controller sixty days' notice; however, the auditor controller will continue to collect the local government entities' portions of tax increment until any debts issued up until then have been repaid. No portion of the local schools' share of tax increment may go to the CRIA.
- Policy Considerations. The Committee may wish to consider the following:
- Differences between an authority and existing CRIA law. While the creation of an authority pursuant to the bill’s provisions is similar to and modelled after CRIA law, there are several distinct differences:
- CRIA requirements. A CRIA operates within a defined area characterized by social and economic deterioration. This bill has no such limitations.
- What can be financed? A CRIA can finance a wide-range of public and private projects, including the acquisition, construction or rehabilitation of affordable housing and is required to spend 25% on affordable housing. This bill is specifically limited to providing low- and moderate-income housing and provides that 95% of the revenues shall be used to increase, improve, and preserve affordable housing.
- Infrastructure plan and protest requirements. A CRIA plan is subject to written and oral protest and proceedings to form the CRIA must stop if there is majority protest. An election is required in certain instances based on percentage of protest received. This bill, however, does not contain any opportunity for protest.
- Property tax increment vs. sales and use/transactions and use tax increment. A CRIA is funded through property tax increment. This bill, in addition to property tax increment, introduces the idea of giving sales and use tax increment and transactions and use tax increment from a consenting local agency to the authority.
- Replacement dwellings. CRIA law contains replacement dwelling language. This bill does not contain replacement dwelling language, but does require the preparation of a feasible method of plan for relocation of all of any families and persons to be temporarily or permanently displaced from facilities and a result of actions by the authority.
- Sales and Use Tax Increment and Transactions and Use Tax Increment. The Committee may wish to consider the following issues, with respect to creating the opportunity for a consenting local agency to share its sales and use taxes or transactions and use taxes with an authority:
- Redevelopment reform in 1993. According to a publication entitled “The 2012-13 Budget: Unwinding Redevelopment” by the Legislative Analyst’s Office (LAO) published in February of 2012, AB 1290 (Isenberg), Chapter 942, Statutes of 1993, sought to address long-standing concerns about the misuse of redevelopment and to refocus the program on eradicating urban blight. [AB 1290]: (1) Defined a “blighted area” as one that is predominately urbanized and where certain problems are so substantial that they constitute a serious physical and economic burden to a community that cannot be reversed by private or government actions, absent redevelopment; (2) Replaced the process whereby local agencies and RDAs negotiated the amount of pass-through revenues on a case-by-case-basis with a statutory formula for sharing tax increment revenues; and, (3) Limited RDA ability to provide subsidies and assistance to auto dealerships, large volume retailers, and other sales tax generators.
- Differences between an authority and existing CRIA law. While the creation of an authority pursuant to the bill’s provisions is similar to and modelled after CRIA law, there are several distinct differences:
These reforms moved RDAs away from the potential to choose sales-tax generating projects as did other bills in the 1990s and beyond.
- Appropriateness of using sales tax increment. The fundamental premise behind property tax increment (used previously to fund RDA activities) is that investment in a blighted area will increase property values, and thus the “increment” of that increase would go to the RDA while other jurisdictions continue to get the same property tax amount (or “base”), over the life of the RDA. In this manner there was, with RDAs, and with the new CRIA tool, a nexus between the use of property tax increment for the RDA or the CRIA’s purposes. The Committee may wish to consider whether using sales tax increment to fund an authority’s activities meets this same nexus and whether there may be implications for the fiscalization of land use (aka, jurisdictions preferring to site big box-type sales tax generating stores over other projects like affordable housing).
- Could undermine the will of the voters. Some sales and use taxes and transactions and use taxes are adopted by voters for a dedicated purpose with a two-thirds voter approval requirement under the Constitution, and can only be spent for the purpose in which the voters approved (like a countywide transactions and use tax that is specifically earmarked for transportation purposes). This bill does not differentiate between general taxes and sales and use and transactions and use taxes that are dedicated for a certain purpose.
- Implementation and technical issues. There are numerous technical issues with the sales and use tax and transactions and use tax increment provisions in the bill, as follows:
- First, the bill directs the county auditor-controller to allocate sales tax; however, under existing law, sales and use taxes, as well as transactions and use taxes are administered and allocated to a city or county by the Board of Equalization.
- The bill is unclear about what part of the sales tax it is capturing – is it the Bradley-Burns rate that is the local share?
- What if there are local tax-sharing agreements in place between the involved jurisdictions?
- Can an agency collect local sales or use tax revenue from a rate imposed by another agency?
- How would the issuance of debt work if the debt is backed by sales and use/transactions and use tax increment, rather than property tax?
- The current process to calculate property tax increment is contained in the Revenue and Taxation Code; however, no such method exists for calculating sales and use or transactions and use tax increment which would be “attributable to the area of the authority.”
- Finding of Completion. Existing law for both Enhanced Infrastructure Financing Districts (EIFDs) and CRIAs requires that creation of each of these tools requires a finding of completion from the Department of Finance (DOF) and compliance with State Controller’s orders regarding RDA dissolution. This bill, however, does not contain such language.
- Potential for overlap. The Committee may wish to consider what will happen if a jurisdiction wants to create both an authority and a CRIA or an EIFD, or if there is overlap by a city and a county wishing to each create one of these authorities, as there is a potential for overlap. Who would get the property tax increment in this situation?
- Committee Amendments.* The Committee may wish to consider the following amendments:
- Limit provisions of the bill dealing with sales and use tax increment or transactions and use tax increment specifically to those measures approved by voters that are consistent with the intent of funding the creation of affordable housing. For instance, the voters in the County of Los Angeles recently approved Measure H – authorizing a 0.25 percent county sales tax for 10 years in order to fund homeless services and prevention, with 69% of the vote. This revenue stream is specifically earmarked for those purposes.
- Require an authority to consider adoption of the plan at a public hearing. CRIA law requires three hearings.
- Ensure that the authority is subject to provisions of the Brown Act, Public Records Act, and the Political Reform Act, similar to CRIA law.
- Limit successor agencies from participating in an authority. Require a city or county that created a created an RDA that was dissolved, from participating in an authority until the agency has a finding of completion from the DOF, and compliance with the orders of the Controller, as specified. All of these limitations are contained in CRIA law.
*Due to timing constraints, these amendments will be adopted by the Housing and Community Development Committee.
- Arguments in Support. Supporters argue that the bill will provide local governments with a critical tool to address the housing affordability crisis without raising taxes, and invest the tax increment revenues in the production of homes affordable to their workers.
- Arguments in Opposition. According to Howard Jarvis Taxpayers Association, notes the concern with the apparent lack of a requirement in the bill that any bonds issued by the authority be voter-approved, and writes that these bonds could remain on the books for up to 40 years after they are sold, surpassing the probably tenure of most authority members.
- Double-Referral. This bill is double-referred to the Housing and Community Development Committee, where it will be heard next, should the bill pass out of this Committee.
REGISTERED SUPPORT / OPPOSITION:
Support
California Housing Partnership
City of Union City
EAH Housing
Herman Coliver Locus Architecture
Non-Profit Housing Association of Northern California
Opposition
Howard Jarvis Taxpayers Association
Analysis Prepared by: Debbie Michel / L. GOV. / (916) 319-3958
Discussed in Hearing
1MIN
Assembly Floor
2MIN
Senate Floor
4MIN
Senate Standing Committee on Transportation and Housing
1MIN
Assembly Floor
1MIN
Assembly Standing Committee on Appropriations
4MIN
Assembly Standing Committee on Housing and Community Development
5MIN
Assembly Standing Committee on Local Government
Bill Author
Bill Co-Author(s):
