Proposed Legislation To Address Void Left By Redevelopment Agencies

As of February 1, 2012, redevelopment agencies, those agencies that help local governments revitalize their community, were forced to wind up and sell their assets. So, now, the question remains: what should happen with the void left by redevelopment agencies?

Some elected officials think they know. Three bills - SB 654, SB 986 and AB 1585 - have been introduced in an effort to address the elimination of redevelopment agencies.

SB 654

President pro Tempore of the California State Senate, Darrell Steinberg (D-Sacramento) introduced SB 654. This senate bill allows the host city (where the redevelopment agency once was) to retain certain funds in the former redevelopment agency's housing fund to ensure that communities still have the ability to improve and revitalize low and moderate income housing. Senate Bill 654 has been approved by the Senate and was transferred to the State Assembly on February 1, 2012. It is currently under consideration with Committee on Housing & Community Development and the Committee on Local Government.

SB 986

Senate Bill 986, introduced by Senator Bob Dutton (R-Rancho Cucamonga), seeks to ensure that bond proceeds are expended on the projects for which they were issued. In other words, under this bill, all bond proceeds initiated by the former redevelopment agencies would be considered encumbered and would have to be used for the purposes for which the bonds were sold, not transferred to the county auditor-controller. Under SB 986, all bond proceeds would need to be used by the successor agency (the agency taking over the role of the former redevelopment agency) by December 14, 2014. SB 986 has been assigned to the Senate Committee on Government and Finance and, on May 29, 2012, it was ordered to a third reading on the Senate floor.

AB 1585

Speaker John A. Pérez (D-Los Angeles) and Assembly member Toni Atkins (D-San Diego) introduced AB 1585, which clarifies that low and moderate income housing funds that once belonged to redevelopment agencies must be transferred to the successor agency to provide affordable housing. The housing funds are to be maintained in a separate account and at least 80 percent of the funds must be encumbered within four years.

The California State Assembly approved AB 1585 on March 26, 2012. The assembly bill is now with the Senate and, if successful there, it will be sent to Governor Brown for his consideration.

We will continue to monitor these bills and update the Land Use Lab as these bills are considered by our legislature.