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Post-Redevelopment Legislation Update

Joint Task Force to be Formed

April 19, 2012

Obtaining necessary changes to the redevelopment dissolution process and working on new economic development tools for local agencies are top priorities for the League.


 Last week the League provided a listing of major bills which address post-redevelopment issues. This week some of those bills were heard in the Senate Governance and Finance Committee, while others were amended, or referred to other committees.

SB 986, SB 1151 and SB 1156

On Wednesday, the Senate Governance and Finance Committee heard SB 986 (Dutton), SB 1151 (Steinberg) and SB 1156 (Steinberg).

The League testified in support of SB 986 (Dutton), which would provide much needed clarity on the handling of unexpended bond proceeds. Amendments made on April 11 narrowed the bill significantly. Under the revised bill, oversight boards may approve the expenditure of bond proceeds, provided that: (1) the bonds were issued before Dec. 31, 2010, and (2) the obligation is required to meet a federal or state matching fund requirement, meet the expenditure requirements of a local, or is required to complete "critical public infrastructure."

The bill contains a listing of types of projects not considered to be "critical public infrastructure." Technical amendments were taken to the bill and it was passed out of committee. The bill is now headed to the Senate Appropriations Committee.

Also during the committee, Senate Pro Tem Darrell Steinberg (D-Sacramento) presented his SB 1151 and SB 1156. Both measures are works in progress. An initial summary of these measure prepared by the League is available on the League's website.

SB 1151 would establish a trust fund for cities and counties that adopt a joint powers agreement (JPA) so that the JPA would retain former redevelopment agency assets and funds. The JPA must complete a long term asset management plan that must be approved by the Department of Finance by Dec. 31. The plan must include a strategy for maximizing the long term assets for the purpose of creating high wage, high skill jobs and affordable housing.

SB 1156 would authorize cities and counties to create a Community Development and Housing JPA to carry out the provisions of Community Development Law. The JPA could adopt a 30-year redevelopment plan without making a determination of blight, although project areas would be limited. Tax increment could be used so long as entity with land use authority (the city) mitigates the losses to schools and public safety services with other revenue. A 20 percent inclusionary housing element and a strict sustainable parking ordinance would also be required in project areas.

The League expressed its appreciation of Sen. Steinberg attempting to address the uncertainty left in the wake of redevelopment dissolution, and committed to working with the author to attempt to make the concepts more workable. Both bills passed out of committee. SB 1151 was referred to the Senate Rules Committee and SB 1156 was referred to Senate Transportation and Housing.

Joint Task Force to be Formed

During the Senate Governance and Finance Committee meeting, Chair Sen. Lois Wolk (D-Davis) announced the formation of joint task force with Senate and Assembly representatives to discuss the various post-redevelopment bills and attempt to achieve consensus on what should be moved forward. Details on how the task force will be assembled, who will participate, and which bills will be discussed have not yet been revealed. Sen. Wolk indicated the task force could start meeting as early as Monday next week.

SB 1335

SB 1335 (Pavley) was amended in the Senate Environmental Quality Committee on Monday, April 16 and re-referred to the Senate Governance and Finance Committee. This bill would authorize successor agencies to retain brownfield sites. The League has been working with the author on an additional set of amendments aimed at ensuring that successor agencies that opt to retain these properties have access to sufficient resources to ensure the parcels are cleaned up. These amendments are not expected to appear in print until after the Senate Governance and Finance Committee meeting next week.

AB 2144

AB 2144 (Pérez) was amended on Monday and proposes to make numerous changes to infrastructure financing districts, with the intent to make this tool more workable. The bill was referred to the Assembly Local Government Committee. AB 2144 is currently scheduled to be heard Wednesday, April 25. However, hearing times are subject to change. The League is currently evaluating the amendments.

AB 1585

On Wednesday, the Senate Rules Committee referred AB 1585 (Pérez) to the Senate Governance and Finance and the Senate Transportation and Housing committees. AB 1585 is the most developed clean-up bill to AB 1x 26 pending in the Legislature. The bill contains appropriate policy and technical clarifications to reduce confusion and provide greater direction to successor agencies, oversight boards and successor housing entities. Importantly, the bill requires repayment of former loans by cities to former redevelopment agencies, preserves remaining affordable housing funding, preserves asset value, and makes important changes to improve the functioning of successor agencies and avoid bond defaults.

AB 1585 is a League "hot bill." City officials are encouraged to submit support letters to the legislation as soon as possible. Cities should highlight the importance of the loan repayment component as applicable to their city. A sample support letter can be found on the League's website by typing "AB 1585" into the search box.

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