On September 22, 2015, Governor Brown signed two redevelopment bills of interest to school districts. Senate Bill 107 (“SB 107”) provides comprehensive clean-up and clarification to portions of the redevelopment agency (“RDA”) dissolution or “wind-down” process. Assembly Bill 2 (“AB 2”) aims to revive limited redevelopment activities by allowing certain underprivileged communities to divert property tax revenue towards revitalization projects, although school district tax revenue is specifically excluded and will not be diverted. Certain provisions of SB 107 take effect immediately, with remaining provisions becoming effective throughout 2016 and 2017. AB 2 takes effect on January 1, 2016.
By way of background, as part of the 2011 Budget Act, the California Legislature approved the dissolution of the state’s RDAs. After a period of litigation, RDAs were officially dissolved as of February 1, 2012. To help facilitate the winding down process at the local level, successor agencies were established to manage redevelopment projects currently underway, make payments on enforceable obligations, and dispose of redevelopment assets and properties. Each successor agency has an oversight board that supervises its work. The oversight board is comprised of representatives of the local agencies that serve the redevelopment project area: the city, county, special districts, and K-14 educational agencies.
SB 107 amends various provisions of the Health and Safety Code relating to the RDA dissolution process. Among a number of significant changes, SB 107 does the following:
AB 2 allows for the creation of a community revitalization investment authority (“Authority”), a local public body with jurisdiction to carry out a community revitalization plan. Creation of an Authority is limited to those communities that continue to suffer from conditions of unemployment, high crime rates, deteriorated or inadequate infrastructure, and lack of affordable housing. The Authority is similar to an RDA in that it will allow a community to allocate property tax increment of consenting local entities towards affordable housing, crime prevention, waste clean-up, and job creation. The Authority will not be able to divert property tax shares from school districts, however, because school districts are specifically excluded under this statutory scheme. The Authorities are modeled on now-defunct RDAs, but with increased fiscal accountability and oversight, as well as a larger required contribution to low-income housing.
School districts in redevelopment areas—especially those still receiving pass-through payments under law or contract—should review their current arrangements with successor agencies and oversight boards given the changes under SB 107. If you have any questions regarding this matter, please call one of our six offices.
F3 NewsFlash prepared by Peter K. Fagen, Kathleen J. McKee, Kelley A. Owens and John W. Norlin.
Peter is a Partner in the F3 San Diego office.
Kathy is a Partner in the F3 San Diego office.
Kelley is a Senior Associate in the F3 San Diego office.
John is Special Counsel in the F3 San Diego office.
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