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Various Redevelopment Dissolution Clean-Up Bills Introduced

March 7, 2014
Several legislative “clean-up” measures have been introduced this session to address problems with the complicated and frustrating redevelopment dissolution process.
The state’s efforts overseeing the dismantling of more than 385 redevelopment agencies (RDA) have been severely flawed. While there have been prior efforts to improve the process, most have stalled or been rejected by an Administration focused on more rigid interpretations benefiting the state’s financial bottom line. This dynamic has left little recourse for local agencies but to seek resolution in the courts.

It is unclear if things may be changing. With the state budget now stabilized, the Administration has signaled a willingness to explore the creation of new economic development tools. The Infrastructure Finance District (IFD) proposal floated in Gov. Jerry Brown’s FY 2014–15 budget proposal has many limitations, but may represent the beginning of a discussion. It remains to be seen if there is a similar willingness to improve the redevelopment dissolution process.
The following is a listing of several RDA dissolution clean-up proposals introduced by some prominent members of the Legislature in the 2014 legislative session:
SB 1129 (Steinberg): Successor Agencies and Oversight Board Approval  
Authored by Senate President Pro Tem Darrell Steinberg (D-Sacramento), SB 1129 makes the following changes to existing law relating to successor agencies:
  • 2011 Bonds: Allows a successor agency to use proceeds of bonds issued during 2011 under the following conditions: (a) bond proceeds are used for the purposes for which they were sold; (b) the successor agency’s oversight board approves the bond proceeds’ usage; and (c) the oversight board makes a finding, in consultation with the appropriate metropolitan planning organization (MPO) that the use of the bonds is consistent with the sustainable communities strategy adopted by the MPO. 
  • Long Range Property Management Plans (LRPMP): Currently, successor agencies must submit a LRPMP for approval by the oversight board and the Department of Finance (DOF) within six months after DOF issues a Finding of Completion. This bill: (a) removes the existing statutory deadline of Jan. 1, 2015 for DOF to approve these plans, thereby avoiding the default of having the original provisions of RDA dissolution legislation ABx1 26 (Blumenfield, 2011) govern the disposal of real property; (b) provides that a compensation agreement with the taxing entities is not required when property is transferred to the city/county for a project identified in the redevelopment plan; specifies that DOF review of the plan is limited to whether the plan makes a good faith effort to include the contents required by existing law; and (d) requires DOF to approve LRPMPs as expeditiously as possible. 
  • New Benefits for Agencies with Finding of Completion: Adds the following new benefits for successor agencies receiving a finding of completion: (a) requires DOF to receive oversight board approval prior to DOF’s removal of an enforceable obligation from a Recognized Obligation Payment Schedules (ROPS); and (b) authorizes a successor agency to  enter into or amend existing contracts and agreements, and administer projects in connection with an approved enforceable obligation, if the contract, agreement, or project will not commit new property tax funds, and will not otherwise reduce property tax payments to taxing entities. 
AB 1963 (Atkins): Redevelopment and Long-Range Property Managements Plans 

This bill removes the existing statutory deadline of Jan. 1, 2015 for DOF to approve LRPMPs, thereby avoiding the default of having the original provisions of ABx1 26 govern the disposal of real property. 
The elements of AB 1963 could potentially expand in the future to include other clean-up provisions. The author, incoming Assembly Speaker-Elect Toni Atkins (D-San Diego), has been one of the most engaged legislators in the Capitol concerned about impacts of the RDA dissolution process on local governments. She currently serves on the internal Assembly Redevelopment Working Group and recently authored and was successful in obtaining the Governor’s signature on helpful RDA dissolution clean-up bill AB 471.
AB 1582 (Mullin): Recognized Obligation Payment Schedules (ROPS) Annual Fiscal Period
This measure extends the existing ROPS process to require it to occur once per year instead of once every six months. 
Assembly Member Kevin Mullin (D-South San Francisco) has been active in his efforts to address RDA dissolution issues in the past. Last year he carried League-sponsored AB 564, which would have prevented the DOF from reversing previous approvals affecting benefits available to local agencies receiving a finding of completion. Gov. Jerry Brown ultimately  vetoed the bill  despite the fact that it  received overwhelming bipartisan support from the Legislature where it passed without a single “No” vote.
AB 2671 (Bloom): Vehicle for 2011 RDA Bond Proceeds
In its current form, AB 2671, authored by Assembly Member Richard Bloom (D-Santa Monica) is a legislative vehicle for his continued efforts to allow local agencies access bond proceeds issued by redevelopment agencies in 2011. Assembly Member Bloom last year carried League-supported AB 981 on this topic but the measure stalled in the Assembly Appropriations Committee.
What’s Next?
The above proposals would be helpful to local agencies, and some may be developed further, yet their ultimate prospects depend upon the engagement of the Administration and the determination of legislators to make such clean-up a priority in their negotiations with the Governor over the budget and other issues. The League will continue to work with legislators and the Administration in efforts to secure improvements to redevelopment dissolution laws.

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