California Assembly Bill AB423 Amended / Bill

 BILL NUMBER: AB 423AMENDED BILL TEXT AMENDED IN SENATE AUGUST 13, 2013 AMENDED IN ASSEMBLY MAY 13, 2013 AMENDED IN ASSEMBLY APRIL 9, 2013 INTRODUCED BY Assembly Member Torres FEBRUARY 15, 2013  An act to add Section 5035 to the Penal Code, relating to corrections.   An act to amend Section 34171 of, and to add Section 34176.6 to, the Health and Safety Code, relating to housing.  LEGISLATIVE COUNSEL'S DIGEST AB 423, as amended, Torres.  Department of Corrections and Rehabilitation: restitution data.   Multiphase affordable housing projects: enforceable obligations.   The Community Redevelopment Law authorizes the establishment of redevelopment agencies in communities to address the effects of blight, as defined. Existing law dissolved redevelopment agencies and community development agencies as of February 1, 2012, and provides for the designation of successor agencies. Existing law imposes various requirements on successor agencies and subjects successor agency actions to the review of oversight boards. Existing law requires each oversight board to direct the successor agency to, among other things, cease performance in connection with and terminate all existing agreements that do not qualify as enforceable obligations, as defined.   This bill would authorize a successor agency of a former redevelopment agency that commenced and completed construction of portions of a multiphase affordable housing project in a county with a population over 1.7 million or in a city with a population over 160,000 to enter into a new enforceable obligation to complete the design and construction of a qualifying future phase, as specified, of a project. The bill would require that any moneys from the former redevelopment agency's Low and Moderate Income Housing Fund that have not been remitted to the county auditor-controller, as specified, to first be allocated to the implementing entity of the new enforceable obligation to pay for the costs associated with specified agreements. The bill would require, if the remaining balance of the Low and Moderate Income Housing Fund is insufficient to pay for the costs associated with the specified agreements, any remaining costs to be included on Recognized Obligation Payment Schedules as enforceable obligations and be funded with Redevelopment Property Tax Trust Funds.   Existing law provides for the administration of the state correctional system by the Department of Corrections and Rehabilitation. Existing law requires the department to study the programmatic and fiscal feasability of providing for rehabilitation information and tracking functionality within the Strategic Offender Management System, as specified.   This bill would require the department to include in the Strategic Offender Management System, or any successor system maintained by the department, information regarding restitution fines or orders for inmates within its jurisdiction, as specified. The bill would also require the department to utilize that system, or a combination of that system and the Trust Restitution Accounting Canteen System or any successor system, to ensure that the California Victim Compensation and Government Claims Board is provided with accurate and up-to-date information regarding unfulfilled restitution fines and orders.  Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:  SECTION 1.   Section 34171 of the   Health and Safety Code   is amended to read:  34171. The following terms shall have the following meanings: (a) "Administrative budget" means the budget for administrative costs of the successor agencies as provided in Section 34177. (b) "Administrative cost allowance" means an amount that, subject to the approval of the oversight board, is payable from property tax revenues of up to 5 percent of the property tax allocated to the successor agency on the Recognized Obligation Payment Schedule covering the period January 1, 2012, through June 30, 2012, and up to 3 percent of the property tax allocated to the Redevelopment Obligation Retirement Fund money that is allocated to the successor agency for each fiscal year thereafter; provided, however, that the amount shall not be less than two hundred fifty thousand dollars ($250,000), unless the oversight board reduces this amount, for any fiscal year or such lesser amount as agreed to by the successor agency. However, the allowance amount shall exclude, and shall not apply to, any administrative costs that can be paid from bond proceeds or from sources other than property tax. Administrative cost allowances shall exclude any litigation expenses related to assets or obligations, settlements and judgments, and the costs of maintaining assets prior to disposition. Employee costs associated with work on specific project implementation activities, including, but not limited to, construction inspection, project management, or actual construction, shall be considered project-specific costs and shall not constitute administrative costs. (c) "Designated local authority" shall mean a public entity formed pursuant to subdivision (d) of Section 34173. (d) (1) "Enforceable obligation" means any of the following: (A) Bonds, as defined by Section 33602 and bonds issued pursuant to Chapter 10.5 (commencing with Section 5850) of Division 6 of Title 1 of the Government Code, including the required debt service, reserve set-asides, and any other payments required under the indenture or similar documents governing the issuance of the outstanding bonds of the former redevelopment agency. A reserve may be held when required by the bond indenture or when the next property tax allocation will be insufficient to pay all obligations due under the provisions of the bond for the next payment due in the following half of the calendar year. (B) Loans of moneys borrowed by the redevelopment agency for a lawful purpose, to the extent they are legally required to be repaid pursuant to a required repayment schedule or other mandatory loan terms. (C) Payments required by the federal government, preexisting obligations to the state or obligations imposed by state law, other than passthrough payments that are made by the county auditor-controller pursuant to Section 34183, or legally enforceable payments required in connection with the agencies' employees, including, but not limited to, pension payments, pension obligation debt service, unemployment payments, or other obligations conferred through a collective bargaining agreement. Costs incurred to fulfill collective bargaining agreements for layoffs or terminations of city employees who performed work directly on behalf of the former redevelopment agency shall be considered enforceable obligations payable from property tax funds. The obligations to employees specified in this subparagraph shall remain enforceable obligations payable from property tax funds for any employee to whom those obligations apply if that employee is transferred to the entity assuming the housing functions of the former redevelopment agency pursuant to Section 34176. The successor agency or designated local authority shall enter into an agreement with the housing entity to reimburse it for any costs of the employee obligations. (D) Judgments or settlements entered by a competent court of law or binding arbitration decisions against the former redevelopment agency, other than passthrough payments that are made by the county auditor-controller pursuant to Section 34183. Along with the successor agency, the oversight board shall have the authority and standing to appeal any judgment or to set aside any settlement or arbitration decision. (E) Any legally binding and enforceable agreement or contract that is not otherwise void as violating the debt limit or public policy. However, nothing in this act shall prohibit either the successor agency, with the approval or at the direction of the oversight board, or the oversight board itself from terminating any existing agreements or contracts and providing any necessary and required compensation or remediation for such termination. Titles of or headings used on or in a document shall not be relevant in determining the existence of an enforceable obligation. (F) Contracts or agreements necessary for the administration or operation of the successor agency, in accordance with this part, including, but not limited to, agreements concerning litigation expenses related to assets or obligations, settlements and judgements, and the costs of maintaining assets prior to disposition, and agreements to purchase or rent office space, equipment and supplies, and pay-related expenses pursuant to Section 33127 and for carrying insurance pursuant to Section 33134. (G) Amounts borrowed from, or payments owing to, the Low and Moderate Income Housing Fund of a redevelopment agency, which had been deferred as of the effective date of the act adding this part; provided, however, that the repayment schedule is approved by the oversight board. Repayments shall be transferred to the Low and Moderate Income Housing Asset Fund established pursuant to subdivision (d) of Section 34176 as a housing asset and shall be used in a manner consistent with the affordable housing requirements of the Community Redevelopment Law (Part 1 (commencing with Section 33000)).  (H) Any agreement necessary to complete the design and construction of a qualifying future phase of a project pursuant to subdivision (b) of Section 34176.6.  (2) For purposes of this part, "enforceable obligation" does not include any agreements, contracts, or arrangements between the city, county, or city and county that created the redevelopment agency and the former redevelopment agency. However, written agreements entered into (A) at the time of issuance, but in no event later than December 31, 2010, of indebtedness obligations, and (B) solely for the purpose of securing or repaying those indebtedness obligations may be deemed enforceable obligations for purposes of this part. Notwithstanding this paragraph, loan agreements entered into between the redevelopment agency and the city, county, or city and county that created it, within two years of the date of creation of the redevelopment agency, may be deemed to be enforceable obligations. (3) Contracts or agreements between the former redevelopment agency and other public agencies, to perform services or provide funding for governmental or private services or capital projects outside of redevelopment project areas that do not provide benefit to the redevelopment project and thus were not properly authorized under Part 1 (commencing with Section 33000) shall be deemed void on the effective date of this part; provided, however, that such contracts or agreements for the provision of housing properly authorized under Part 1 (commencing with Section 33000) shall not be deemed void. (e) "Indebtedness obligations" means bonds, notes, certificates of participation, or other evidence of indebtedness, issued or delivered by the redevelopment agency, or by a joint exercise of powers authority created by the redevelopment agency, to third-party investors or bondholders to finance or refinance redevelopment projects undertaken by the redevelopment agency in compliance with the Community Redevelopment Law (Part 1 (commencing with Section 33000)). (f) "Oversight board" shall mean each entity established pursuant to Section 34179. (g) "Recognized obligation" means an obligation listed in the Recognized Obligation Payment Schedule. (h) "Recognized Obligation Payment Schedule" means the document setting forth the minimum payment amounts and due dates of payments required by enforceable obligations for each six-month fiscal period as provided in subdivision (m) of Section 34177. (i) "School entity" means any entity defined as such in subdivision (f) of Section 95 of the Revenue and Taxation Code. (j) "Successor agency" means the successor entity to the former redevelopment agency as described in Section 34173. (k) "Taxing entities" means cities, counties, a city and county, special districts, and school entities, as defined in subdivision (f) of Section 95 of the Revenue and Taxation Code, that receive passthrough payments and distributions of property taxes pursuant to the provisions of this part. (l) "Property taxes" include all property tax revenues, including those from unitary and supplemental and roll corrections applicable to tax increment. (m) "Department" means the Department of Finance unless the context clearly refers to another state agency. (n) "Sponsoring entity" means the city, county, or city and county, or other entity that authorized the creation of each redevelopment agency. (o) "Final judicial determination" means a final judicial determination made by any state court that is not appealed, or by a court of appellate jurisdiction that is not further appealed, in an action by any party.  SEC. 2.   Section 34176.6 is added to the   Health and Safety Code   , to read:   34176.6. (a) The Legislature finds and declares all of the following: (1) Former redevelopment agencies provided a crucial supply of affordable housing to the residents of California since the inception of redevelopment and tax increment financing. Many of these affordable housing projects were multiphase developments spanning over decades of land assembly, planning, implementation, and construction, and provide vital housing for thousands of persons and families of low or moderate income. Failure to complete the multiphase affordable housing projects because of the dissolution of redevelopment agencies would result in a deterioration of properties and land use, and undue disruption to the health, safety, and well-being of the residents of completed phases of these projects. Failure to complete these affordable housing projects would exacerbate the shortage of affordable housing for persons and families of low or moderate income residing and working throughout California. (2) Many of these multiphase projects were underway at the time the dissolution of redevelopment agencies was under consideration by the Governor, Legislature, and the courts. Multiphase affordable housing projects that were substantially completed but awaiting approval of the final phase have been stymied by the dissolution of redevelopment agencies. This is particularly true in larger communities where land assembly and construction had been severely impacted by the recent economic down turn and delayed the final implementation of these projects. (3) To avoid serious blight to the multiphase projects and to ensure an adequate supply of housing for persons and families of low or moderate income, it is necessary to enact this section. This section shall apply only to counties with a population over 1.7 million and cities with a population over 160,000. In enacting this section, it is the policy of the Legislature to assist these larger communities who were negatively impacted by the recent economic crisis and were unable to complete the final phase of large scale, multiphase, planned, and partially implemented affordable housing projects as a result of the dissolution of redevelopment agencies. (b) Notwithstanding Section 34177.3, or any other law, a successor agency of a former redevelopment agency that commenced and completed construction of portions of a multiphase affordable housing project in a county with a population over 1.7 million or in a city with a population over 160,000 may enter into a new enforceable obligation, as defined in paragraph (1) of subdivision (d) of Section 34171, to complete the design and construction of a qualifying future phase of a project. (c) Notwithstanding any other law, any moneys from the former redevelopment agency's Low and Moderate Income Housing Fund that have not been remitted to the county auditor-controller pursuant to the due diligence review process in Sections 34179.5 and 34179.6 shall first be allocated to the implementing entity of the new enforceable obligation to pay for the costs associated with any agreement permitted by subdivision (b). The implementing entity may be either the successor agency or the housing successor entity, as designated pursuant to Section 34176. In the event that the remaining balance of the Low and Moderate Income Housing Fund is insufficient to pay for the costs associated with any agreements permitted by subdivision (b), any remaining costs shall be included on Recognized Obligation Payment Schedules as enforceable obligations and shall be funded with the Redevelopment Property Tax Trust Fund. (d) Any agreement permitted by subdivision (b) shall first be approved by the oversight board pursuant to Section 34180. (e) (1) "Qualifying future phase" shall mean a phase of a planned and partially implemented project where the previously planned phases have received a certificate of occupancy before February 1, 2012, but construction contracts had not been entered into for the final phase of the project before February 1, 2012. (2) "Qualifying future phase" shall meet all of the following criteria: (A) The project is for the creation of affordable housing for "persons and families of low or moderate income," as defined in Section 50093. The project may include first floor commercial or retail space. (B) Upon completion of the residential units, the residential units shall be subject to a declaration of covenants and restrictions restricting the residential units to housing for a period in compliance with the Community Redevelopment Law (Part 1 (commencing with Section 33000)) and the maximum income and purchase price or rent that may be charged. The declaration of covenants and restrictions shall be recorded against the property. (C) All public infrastructure including sewers, water lines, curb cuts, streets, and other customary infrastructure is currently in place for the future phase. (D) At least one phase of the project had been identified as a Catalyst Project for California Sustainable Strategies Pilot Program and embodies the goals of the Sustainable Communities and Climate Protection Act of 2008 (Chapter 728 of the Statutes of 2008).   SECTION 1.   Section 5035 is added to the Penal Code, immediately following Section 5032, to read: 5035. The Department of Corrections and Rehabilitation shall include in the Strategic Offender Management System, or any successor system maintained by the department, information regarding restitution fines or orders for inmates within its jurisdiction, including the amount necessary to fulfill a fine or order, the amounts that have been collected from the offender, if any, and the status of efforts to collect any remaining balance. The department shall utilize that system, or a combination of that system and the Trust Restitution Accounting Canteen System or any successor system, to ensure that the California Victim Compensation and Government Claims Board is provided with accurate and up-to-date information regarding unfulfilled restitution fines and orders.