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Governor Signs Legislation Addressing Redevelopment Dissolution Issues

March 3, 2014
On Feb. 18, Gov. Jerry Brown signed legislation authored by Assembly Speaker-Elect Toni Atkins (D-San Diego) clarifying current law governing the dissolution of local redevelopment agencies (RDA).
The bill, AB 471 (Atkins), represents a second attempt by the Speaker-Elect to address RDA dissolution issues after the Governor vetoed her previous bill, AB 662, last year. AB 471, which passed unanimously in its final form, makes several helpful changes affecting the dissolution process and clarifies that infrastructure finance districts (IFD) can be established on territory within a former RDA project area. The League appreciates the continued work and efforts of the Speaker-Elect to develop solutions that address issues affecting redevelopment dissolution.  

In brief, AB 471 makes the following changes to the state law governing the redevelopment dissolution process:
  • New Housing Entity Cost Allowance   
    • Defines, for the period between July 1, 2014 to July 1, 2018, a “housing entity administrative cost allowance” as an amount of up to 1 percent of the property tax, but not less than $150,000, allocated to the Redevelopment Agency Retirement Fund on behalf of the successor agency for each applicable fiscal year. 
    • Provides that if a local housing authority assumed the housing functions of a former RDA then the housing entity administrative cost allowance shall be listed on the successor agency’s Recognized Obligation Payment Schedule (ROPS).   
    • Provides that if there are insufficient moneys in the Redevelopment Agency Retirement Fund to make the payment authorized by this subdivision (sub. (p) of Sec. 34171) then the unfunded amount may be listed on each subsequent ROPS until paid in full.
  • Long Range Property Management Plan – “Redevelopment Plan” 
    • Broadens the term “redevelopment plan” to include projects listed in a community plan or five-year implementation plan to clarify parcels that may be transferred from a successor agency to a city or county pursuant to a Long Range Property Management Plan
  • Loan Repayments – Accounting Clarification 
    • Makes a technical change to the law to ensure that payments made to taxing entities from the due diligence review (DDR) process are not double-counted in the calculation of the amount of the annual repayments for loans that were previously issued by a city or county to an RDA.
  • Infrastructure Finance Districts (IFD) -- Former Redevelopment Areas
    • Removes the existing restriction in IFD law which prohibits an IFD from being located on territory included within a RDA project area. This change provides additional flexibility to the future use of IFDs.

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