Yesterday the Senate Budget Subcommittee 4 heard testimony from cities and other supporters of redevelopment in opposition to a bill that could limit the number of former redevelopment projects that receive funding under Assembly Bill 1X 26.
Released last week, the bill would make changes to the redevelopment dissolution statutes that would reduce the discretion of local oversight boards and expand the power of the Department of Finance, including granting it the ability to divert local sales and property taxes when it determines successor agencies have "improperly" transferred funds to other agencies or private parties.
"It's designed to provide additional clarification in terms of some of the actions associated with the dissolution of redevelopment agencies," said DOF spokesperson H.D. Palmer.
The DOF's proposal would direct all remaining affordable housing and other funds to benefit the state and empower DOF and county auditor-controllers with authority to resolve all matters of dispute involving Recognized Obligation Payment Schedules and enforceable obligations in favor of the state without regard to priorities set by local oversight boards.
Though many have expressed concerns about AB 1X 26, the League of California Cities is leading the opposition against this new bill, which, League officials say, makes the dissolution process even harder on cities.
Palmer said, though, that the bill includes provisions that could benefit successor agencies. Many successor agencies have been concerned about obligations that might not get funded by the deadline of June 1 but that are still under investigation by DOF. The bill would ensure that monies would be available even if deliberations extend beyond June 1.
"There's an opportunity to catch up or recoup this amount if after June 1 we review additional evidence that the successor agency has provided...and that additional information that it was in fact an enforceable obligation," said Palmer.
The bill may complicate the progress of other bills intended to supplement AB 1X 26 and provide cities with new tools for promoting economic development and affordable housing. Those bills include AB 1585 (Pérez), SB 986 (Dutton), SB 1335 (Pavley), SB 1151 (Steinberg) and SB 1156 (Steinberg).
The bill is part of the larger budget package, which is scheduled to be approved on or around the deadline of June 15.
To read the current bill language, please click here (pdf).
DOF is in the process of posting all of its letters concerning successor agencies' ROPS's; they can be found on the DOF website here.
This post will be updated as this issue develops.
