Chapter 1. Suspension Of Agency Activities And Prohibition On Creation Of New Debts of California Health And Safety Code >> Division 24. >> Part 1.8. >> Chapter 1.
Notwithstanding Part 1 (commencing with Section 33000), Part
1.5 (commencing with Section 34000), Part 1.6 (commencing with
Section 34050), and Part 1.7 (commencing with Section 34100), or any
other law, commencing on the effective date of this part, no agency
shall incur new or expand existing monetary or legal obligations
except as provided in this part. All of the provisions of this part
shall take effect and be operative on the effective date of the act
adding this part.
(a) Notwithstanding Part 1 (commencing with Section 33000),
Part 1.5 (commencing with Section 34000), Part 1.6 (commencing with
Section 34050), and Part 1.7 (commencing with Section 34100), or any
other law, commencing on the effective date of this act, an agency
shall be unauthorized and shall not take any action to incur
indebtedness, including, but not limited to, any of the following:
(1) Issue or sell bonds, for any purpose, regardless of the source
of repayment of the bonds. As used in this section, the term "bonds,"
includes, but is not limited to, any bonds, notes, bond anticipation
notes, interim certificates, debentures, certificates of
participation, refunding bonds, or other obligations issued by an
agency pursuant to Part 1 (commencing with Section 33000), and
Section 53583 of the Government Code, pursuant to any charter city
authority or any revenue bond law.
(2) Incur indebtedness payable from prohibited sources of
repayment, which include, but are not limited to, income and revenues
of an agency's redevelopment projects, taxes allocated to the
agency, taxes imposed by the agency pursuant to Section 7280.5 of the
Revenue and Taxation Code, assessments imposed by the agency, loan
repayments made to the agency pursuant to Section 33746, fees or
charges imposed by the agency, other revenues of the agency, and any
contributions or other financial assistance from the state or federal
government.
(3) Refund, restructure, or refinance indebtedness or obligations
that existed as of January 1, 2011, including, but not limited to,
any of the following:
(A) Refund bonds previously issued by the agency or by another
political subdivision of the state, including, but not limited to,
those issued by a city, a housing authority, or a nonprofit
corporation acting on behalf of a city or a housing authority.
(B) Exercise the right of optional redemption of any of its
outstanding bonds or elect to purchase any of its own outstanding
bonds.
(C) Modify or amend the terms and conditions, payment schedules,
amortization or maturity dates of any of the agency's bonds or other
obligations that are outstanding or exist as of January 1, 2011.
(4) Take out or accept loans or advances, for any purpose, from
the state or the federal government, any other public agency, or any
private lending institution, or from any other source. For purposes
of this section, the term "loans" include, but are not limited to,
agreements with the community or any other entity for the purpose of
refinancing a redevelopment project and moneys advanced to the agency
by the community or any other entity for the expenses of
redevelopment planning, expenses for dissemination of redevelopment
information, other administrative expenses, and overhead of the
agency.
(5) Execute trust deeds or mortgages on any real or personal
property owned or acquired by it.
(6) Pledge or encumber, for any purpose, any of its revenues or
assets. As used in this part, an agency's "revenues and assets"
include, but are not limited to, agency tax revenues, redevelopment
project revenues, other agency revenues, deeds of trust and mortgages
held by the agency, rents, fees, charges, moneys, accounts
receivable, contracts rights, and other rights to payment of whatever
kind or other real or personal property. As used in this part, to
"pledge or encumber" means to make a commitment of, by the grant of a
lien on and a security interest in, an agency's revenues or assets,
whether by resolution, indenture, trust agreement, loan agreement,
lease, installment sale agreement, reimbursement agreement, mortgage,
deed of trust, pledge agreement, or similar agreement in which the
pledge is provided for or created.
(b) Any actions taken that conflict with this section are void
from the outset and shall have no force or effect.
(c) Notwithstanding subdivision (a), a redevelopment agency may
issue refunding bonds, which are referred to in this part as
Emergency Refunding Bonds, only where all of the following conditions
are met:
(1) The issuance of Emergency Refunding Bonds is the only means
available to the agency to avoid a default on outstanding agency
bonds.
(2) Both the county treasurer and the Treasurer have approved the
issuance of Emergency Refunding Bonds.
(3) Emergency Refunding Bonds are issued only to provide funds for
any single debt service payment that is due prior to October 1,
2011, and that is more than 20 percent larger than a level debt
service payment would be for that bond.
(4) The principal amount of outstanding agency bonds is not
increased.
Notwithstanding Part 1 (commencing with Section 33000), Part
1.5 (commencing with Section 34000), Part 1.6 (commencing with
Section 34050), and Part 1.7 (commencing with Section 34100), or any
other law, commencing on the effective date of this part, an agency
shall not have the authority to, and shall not, do any of the
following:
(a) Make loans or advances or grant or enter into agreements to
provide funds or provide financial assistance of any sort to any
entity or person for any purpose, including, but not limited to, all
of the following:
(1) Loans of moneys or any other thing of value or commitments to
provide financing to nonprofit organizations to provide those
organizations with financing for the acquisition, construction,
rehabilitation, refinancing, or development of multifamily rental
housing or the acquisition of commercial property for lease, each
pursuant to Chapter 7.5 (commencing with Section 33741) of Part 1.
(2) Loans of moneys or any other thing of value for residential
construction, improvement, or rehabilitation pursuant to Chapter 8
(commencing with Section 33750) of Part 1. These include, but are not
limited to, construction loans to purchasers of residential housing,
mortgage loans to purchasers of residential housing, and loans to
mortgage lenders, or any other entity, to aid in financing pursuant
to Chapter 8 (commencing with Section 33750).
(3) The purchase, by an agency, of mortgage or construction loans
from mortgage lenders or from any other entities.
(b) Enter into contracts with, incur obligations, or make
commitments to, any entity, whether governmental, tribal, or private,
or any individual or groups of individuals for any purpose,
including, but not limited to, loan agreements, passthrough
agreements, regulatory agreements, services contracts, leases,
disposition and development agreements, joint exercise of powers
agreements, contracts for the purchase of capital equipment,
agreements for redevelopment activities, including, but not limited
to, agreements for planning, design, redesign, development,
demolition, alteration, construction, reconstruction, rehabilitation,
site remediation, site development or improvement, removal of
graffiti, land clearance, and seismic retrofits.
(c) Amend or modify existing agreements, obligations, or
commitments with any entity, for any purpose, including, but not
limited to, any of the following:
(1) Renewing or extending term of leases or other agreements,
except that the agency may extend lease space for its own use to a
date not to exceed six months after the effective date of the act
adding this part and for a rate no more than 5 percent above the rate
the agency currently pays on a monthly basis.
(2) Modifying terms and conditions of existing agreements,
obligations, or commitments.
(3) Forgiving all or any part of the balance owed to the agency on
existing loans or extend the term or change the terms and conditions
of existing loans.
(4) Making any future deposits to the Low and Moderate Income
Housing Fund created pursuant to Section 33334.3.
(5) Transferring funds out of the Low and Moderate Income Housing
Fund, except to meet the minimum housing-related obligations that
existed as of January 1, 2011, to make required payments under
Sections 33690 and 33690.5, and to borrow funds pursuant to Section
34168.5.
(d) Dispose of assets by sale, long-term lease, gift, grant,
exchange, transfer, assignment, or otherwise, for any purpose,
including, but not limited to, any of the following:
(1) Assets, including, but not limited to, real property, deeds of
trust, and mortgages held by the agency, moneys, accounts
receivable, contract rights, proceeds of insurance claims, grant
proceeds, settlement payments, rights to receive rents, and any other
rights to payment of whatever kind.
(2) Real property, including, but not limited to, land, land under
water and waterfront property, buildings, structures, fixtures, and
improvements on the land, any property appurtenant to, or used in
connection with, the land, every estate, interest, privilege,
easement, franchise, and right in land, including rights-of-way,
terms for years, and liens, charges, or encumbrances by way of
judgment, mortgage, or otherwise, and the indebtedness secured by the
liens.
(e) Acquire real property by any means for any purpose, including,
but not limited to, the purchase, lease, or exercising of an option
to purchase or lease, exchange, subdivide, transfer, assume, obtain
option upon, acquire by gift, grant, bequest, devise, or otherwise
acquire any real property, any interest in real property, and any
improvements on it, including the repurchase of developed property
previously owned by the agency and the acquisition of real property
by eminent domain; provided, however, that nothing in this
subdivision is intended to prohibit the acceptance or transfer of
title for real property acquired prior to the effective date of this
part.
(f) Transfer, assign, vest, or delegate any of its assets, funds,
rights, powers, ownership interests, or obligations for any purpose
to any entity, including, but not limited to, the community, the
legislative body, another member of a joint powers authority, a
trustee, a receiver, a partner entity, another agency, a nonprofit
corporation, a contractual counterparty, a public body, a
limited-equity housing cooperative, the state, a political
subdivision of the state, the federal government, any private entity,
or an individual or group of individuals.
(g) Accept financial or other assistance from the state or federal
government or any public or private source if the acceptance
necessitates or is conditioned upon the agency incurring indebtedness
as that term is described in this part.
Notwithstanding Part 1 (commencing with Section 33000), Part
1.5 (commencing with Section 34000), Part 1.6 (commencing with
Section 34050), and Part 1.7 (commencing with Section 34100), or any
other law, commencing on the effective date of this part, an agency
shall lack the authority to, and shall not, engage in any of the
following redevelopment activities:
(a) Prepare, approve, adopt, amend, or merge a redevelopment plan,
including, but not limited to, modifying, extending, or otherwise
changing the time limits on the effectiveness of a redevelopment
plan.
(b) Create, designate, merge, expand, or otherwise change the
boundaries of a project area.
(c) Designate a new survey area or modify, extend, or otherwise
change the boundaries of an existing survey area.
(d) Approve or direct or cause the approval of any program,
project, or expenditure where approval is not required by law.
(e) Prepare, formulate, amend, or otherwise modify a preliminary
plan or cause the preparation, formulation, modification, or
amendment of a preliminary plan.
(f) Prepare, formulate, amend, or otherwise modify an
implementation plan or cause the preparation, formulation,
modification, or amendment of an implementation plan.
(g) Prepare, formulate, amend, or otherwise modify a relocation
plan or cause the preparation, formulation, modification, or
amendment of a relocation plan where approval is not required by law.
(h) Prepare, formulate, amend, or otherwise modify a redevelopment
housing plan or cause the preparation, formulation, modification, or
amendment of a redevelopment housing plan.
(i) Direct or cause the development, rehabilitation, or
construction of housing units within the community, unless required
to do so by an enforceable obligation.
(j) Make or modify a declaration or finding of blight, blighted
areas, or slum and blighted residential areas.
(k) Make any new findings or declarations that any areas of blight
cannot be remedied or redeveloped by private enterprise alone.
(l) Provide or commit to provide relocation assistance, except
where the provision of relocation assistance is required by law.
(m) Provide or commit to provide financial assistance.
Notwithstanding Part 1 (commencing with Section 33000), Part
1.5 (commencing with Section 34000), Part 1.6 (commencing with
Section 34050), and Part 1.7 (commencing with Section 34100), or any
other law, commencing on the effective date of this part, an agency
shall lack the authority to, and shall not, do any of the following:
(a) Enter into new partnerships, become a member in a joint powers
authority, form a joint powers authority, create new entities, or
become a member of any entity of which it is not currently a member,
nor take on nor agree to any new duties or obligations as a member or
otherwise of any entity to which the agency belongs or with which it
is in any way associated.
(b) Impose new assessments pursuant to Section 7280.5 of the
Revenue and Taxation Code.
(c) Increase the pay, benefits, or contributions of any sort for
any officer, employee, consultant, contractor, or any other goods or
service provider that had not previously been contracted.
(d) Provide optional or discretionary bonuses to any officers,
employees, consultants, contractors, or any other service or goods
providers.
(e) Increase numbers of staff employed by the agency beyond the
number employed as of January 1, 2011.
(f) Bring an action pursuant to Chapter 9 (commencing with Section
860) of Title 10 of Part 2 of the Code of Civil Procedure to
determine the validity of any issuance or proposed issuance of
revenue bonds under this chapter and the legality and validity of all
proceedings previously taken or proposed in a resolution of an
agency to be taken for the authorization, issuance, sale, and
delivery of the revenue bonds and for the payment of the principal
thereof and interest thereon.
(g) Begin any condemnation proceeding or begin the process to
acquire real property by eminent domain.
(h) Prepare or have prepared a draft environmental impact report.
This subdivision shall not alter or eliminate any requirements of the
California Environmental Quality Act (Division 13 (commencing with
Section 21000) of the Public Resources Code).
No legislative body or local governmental entity shall have
any statutory authority to create or otherwise establish a new
redevelopment agency or community development commission. No
chartered city or chartered county shall exercise the powers granted
in Part 1 (commencing with Section 33000) to create or otherwise
establish a redevelopment agency.
(a) This part is intended to preserve, to the maximum extent
possible, the revenues and assets of redevelopment agencies so that
those assets and revenues that are not needed to pay for enforceable
obligations may be used by local governments to fund core
governmental services including police and fire protection services
and schools. It is the intent of the Legislature that redevelopment
agencies take no actions that would further deplete the corpus of the
agencies' funds regardless of their original source. All provisions
of this part shall be construed as broadly as possible to support
this intent and to restrict the expenditure of funds to the fullest
extent possible.
(b) For purposes of this part, "agency" or "redevelopment agency"
means a redevelopment agency created or formed pursuant to Part 1
(commencing with Section 33000) or its predecessor or a community
development commission created or formed pursuant to Part 1.7
(commencing with Section 34100) or its predecessor.
(c) Nothing in this part in any way impairs the authority of a
community development commission, other than in its authority to act
as a redevelopment agency, to take any actions in its capacity as a
housing authority or for any other community development purpose of
the jurisdiction in which it operates.
(d) For purposes of this part, "enforceable obligation" means any
of the following:
(1) Bonds, as defined by Section 33602 and bonds issued pursuant
to Section 5850 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 redevelopment agency.
(2) Loans of moneys borrowed by the redevelopment agency for a
lawful purpose, including, but not limited to, moneys borrowed from
the Low and Moderate Income Housing Fund, to the extent they are
legally required to be repaid pursuant to a required repayment
schedule or other mandatory loan terms.
(3) 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, and unemployment payments.
(4) 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.
(5) Any legally binding and enforceable agreement or contract that
is not otherwise void as violating the debt limit or public policy.
(6) Contracts or agreements necessary for the continued
administration or operation of the redevelopment agency to the extent
permitted by this part, including, but not limited to, 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.
(e) To the extent that any provision of Part 1 (commencing with
Section 33000), Part 1.5 (commencing with Section 34000), Part 1.6
(commencing with Section 34050), or Part 1.7 (commencing with Section
34100) conflicts with this part, the provisions of this part shall
control. Further, if any provision in Part 1 (commencing with Section
33000), Part 1.5 (commencing with Section 34000), Part 1.6
(commencing with Section 34050), or Part 1.7 (commencing with Section
34100) provides an authority that this part is restricting or
eliminating, the restriction and elimination provisions of this part
shall control.
(f) Nothing in this part shall be construed to interfere with a
redevelopment agency's authority, pursuant to enforceable obligations
as defined in this chapter, to (1) make payments due, (2) enforce
existing covenants and obligations, or (3) perform its obligations.
(g) The existing terms of any memorandum of understanding with an
employee organization representing employees of a redevelopment
agency adopted pursuant to the Meyers-Milias-Brown Act that is in
force on the effective date of this part shall continue in force
until September 30, 2011, unless a new agreement is reached with a
recognized employee organization prior to that date.
(h) After the enforceable obligation payment schedule is adopted
pursuant to Section 34169, or after 60 days from the effective date
of this part, whichever is sooner, the agency shall not make a
payment unless it is listed in an adopted enforceable obligation
payment schedule, other than payments required to meet obligations
with respect to bonded indebtedness.
(i) The Department of Finance and the Controller shall each have
the authority to require any documents associated with the
enforceable obligations to be provided to them in a manner of their
choosing. Any taxing entity, the department, and the Controller shall
each have standing to file a judicial action to prevent a violation
under this part and to obtain injunctive or other appropriate relief.
(j) For purposes of this part, "auditor-controller" means the
officer designated in subdivision (e) of Section 24000 of the
Government Code.
Commencing on the effective date of the act adding this
part, the Controller shall review the activities of redevelopment
agencies in the state to determine whether an asset transfer has
occurred after January 1, 2011, between the city or county, or city
and county that created a redevelopment agency or any other public
agency, and the redevelopment agency. If such an asset transfer did
occur during that period and the government agency that received the
assets is not contractually committed to a third party for the
expenditure or encumbrance of those assets, to the extent not
prohibited by state and federal law, the Controller shall order the
available assets to be returned to the redevelopment agency or, on or
after October 1, 2011, to the successor agency, if a successor
agency is established pursuant to Part 1.85 (commencing with Section
34170). Upon receiving that order from the Controller, an affected
local agency shall, as soon as practicable, reverse the transfer and
return the applicable assets to the redevelopment agency or, on or
after October 1, 2011, to the successor agency, if a successor agency
is established pursuant to Part 1.85 (commencing with Section
34170). The Legislature hereby finds that a transfer of assets by a
redevelopment agency during the period covered in this section is
deemed not to be in the furtherance of the Community Redevelopment
Law and is thereby unauthorized.
(a) Notwithstanding any other law, for purposes of this
part and Part 1.85 (commencing with Section 34170), the definition of
a city, county, or city and county includes, but is not limited to,
the following entities:
(1) Any reporting entity of the city, county, or city and county
for purposes of its comprehensive annual financial report or similar
report.
(2) Any component unit of the city, county, or city and county.
(3) Any entity which is controlled by the city, county, or city
and county, or for which the city, county, or city and county is
financially responsible or accountable.
(b) The following factors shall be considered in determining that
an entity is controlled by the city, county, or city and county, and
are therefore included in the definition of a city, county, or city
and county for purposes of this part and Part 1.85 (commencing with
Section 34170):
(1) The city, county, or city and county exercises substantial
municipal control over the entity's operations, revenues, or
expenditures.
(2) The city, county, or city and county has ownership or control
over the entity's property or facilities.
(3) The city, county, or city and county and the entity share
common or overlapping governing boards, or coterminous boundaries.
(4) The city, county, or city and county was involved in the
creation or formation of the entity.
(5) The entity performs functions customarily or historically
performed by municipalities and financed thorough levies of property
taxes.
(6) The city, county, or city and county provides administrative
and related business support for the entity, or assumes the expenses
incurred in the normal daily operations of the entity.
(c) For purposes of this section, it shall not be relevant that
the entity is formed as a separate legal entity, nonprofit
corporation, or otherwise, or is not subject to the constitution debt
limitation otherwise applicable to a city, county, or city and
county. The provisions in this section are declarative of existing
law as the entities described herein are and were intended to be
included within the requirements of this part and Part 1.85
(commencing with Section 34170) and any attempt to determine
otherwise would thwart the intent of these two parts.
(a) Notwithstanding any other law, any action contesting the
validity of this part or Part 1.85 (commencing with Section 34170)
or challenging acts taken pursuant to these parts shall be brought in
the Superior Court of the County of Sacramento.
(b) If any provision of this part or the application thereof to
any person or circumstance is held invalid, the invalidity does not
affect other provisions or applications of this part which can be
given effect without the invalid provision or application, and to
this end, the provisions of this part are severable.