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AB-2035 Affordable housing authorities.(2017-2018)

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Date Published: 05/16/2018 09:00 PM
AB2035:v96#DOCUMENT

Amended  IN  Assembly  May 16, 2018
Amended  IN  Assembly  April 16, 2018
Amended  IN  Assembly  March 20, 2018

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Assembly Bill No. 2035


Introduced by Assembly Member Mullin

February 06, 2018


An act to amend Sections 62250, 62251, 62252, 62253, 62254, and 62255 of, and to add Section 62261.1 to, the Government Code, relating to local government.


LEGISLATIVE COUNSEL'S DIGEST


AB 2035, as amended, Mullin. Affordable housing authorities.
Existing law authorizes a city, county, or city and county to adopt a resolution creating an affordable housing authority with powers limited to providing low- and moderate-income housing and affordable workforce housing, as provided, by means of tax increment financing. Existing law defines various terms for these purposes.
This bill would additionally define the terms “authorizing resolution” and “property tax increment” for these purposes. The bill would additionally revise these provisions to limit the authority to providing low- and moderate-income housing and affordable housing, as specified.
Existing law sets forth the composition of the governing board of an authority created pursuant to these provisions and requires the governing board to be an odd number with at least 5 or 7 members, at least 3 of which are required to be appointed by the legislative body of the city or county, as specified.
This bill would, in the case of an authority created by a city and county, require the governing board to include appointments made by the mayor in the same amount as are appointed by the legislative body of the city and county, as specified.
Existing law authorizes specified local entities to adopt a resolution to provide property tax increment revenues to the authority.
This bill would require the resolution provision for receipt of property tax increment to become effective in the property tax year that begins after the December 1 immediately following the adoption of a resolution to provide property tax revenues to the authority. The bill would additionally authorize the repeal of the resolution by giving the county auditor-controller at least 90 days’ notice prior to the end of the current fiscal year, as specified. The bill would also require the county auditor-controller to deduct any costs incurred by the county in administering these provisions, prior to distributing property tax increment to the authority.
Existing law additionally authorizes specified local entities to adopt a resolution allocating other tax revenues to the authority, subject to certain requirements.
This bill would authorize the repeal of this resolution, as specified.
Existing law authorizes an authority to issue bonds in conformity with provisions governing the issuance of general obligation bonds.
This bill would additionally authorize an authority to issue bonds in conformity with the Housing Authorities Law.
Existing law requires the authority to contract for an independent audit every 5 years beginning in the calendar year in which the authority has allocated a cumulative total of more than $1,000,000 in property tax revenues or other revenues, including any proceeds of a debt issuance, as specified.
This bill would instead require an authority to contract for an independent audit commencing in the fiscal year in which the authority has been allocated a cumulative total of more than $1,000,000 in revenues, including any proceeds of a debt issuance, and annually thereafter.
The bill would additionally require any proceeding to attack, review, se set aside, void, or annul the creation of an authority, the adoption of an affordable housing plan, the allocation of tax revenues to an authority, or the issuance of bonds by an authority to be commenced within 30 days of the enaction enactment of the resolution authorizing the action.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: NO   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 Section 62250 of the Government Code is amended to read:

62250.
 For purposes of this division, the following terms have the following meanings:
(a) “Affordable workforce housing” means housing with an affordable housing cost, as defined in Section 50093 of the Health and Safety Code. 50052.5 of the Health and Safety Code, or affordable rent, as defined in Section 50053 of the Health and Safety Code, for households whose gross income does not exceed 120 percent of the area median income.
(b) “Authority” means an affordable housing authority created pursuant to this division.
(c) “Authorizing resolution” means a resolution adopted pursuant to subdivision (a) of Section 62251 creating an authority.
(d) “Consenting local agency” means a local agency that has adopted a resolution of its governing body consenting to the affordable housing investment plan.
(e) “Plan” means an affordable housing investment plan adopted pursuant to Section 62252. The plan shall be deemed to be the plan described in Section 16 of Article XVI of the California Constitution.
(f) “Property tax increment” means that portion of the ad valorem taxes, as defined under subdivision (a) of Section 1 of Article XIII A of the California Constitution, levied each year in excess of the amount levied by or for a taxing agency upon the total sum of the assessed value of the taxable property in the boundaries of an authority as defined in the resolution first establishing the authority, as shown upon the assessment roll used in connection with the taxation of that property by the taxing agency as of the last equalized roll prior to either the effective date of the authorizing resolution or, if specified in the authorizing resolution, another fiscal year no more than five years prior to the effective date of the authorizing resolution. Property tax increment shall not include taxable properties located within the boundaries of a former redevelopment agency dissolved pursuant to Section 34172 of the Health and Safety Code unless and until all obligations of the former redevelopment agency have been retired and the successor agency to the former redevelopment agency has fully dissolved. Following dissolution, for purposes of calculating property tax increment for those taxable properties located within the boundaries of a former redevelopment agency, the fiscal year following final dissolution shall serve as the last equalized roll.
(g) “Real property” means any of the following:
(1) Land, including land under water and waterfront property.
(2) Buildings, structures, fixtures, and improvements on the land.
(3) Any property appurtenant to, or used in connection with, the land.
(4) 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 those liens.

SEC. 2.

 Section 62251 of the Government Code is amended to read:

62251.
 (a) A city, county, or city and county may adopt a resolution creating an affordable housing authority that shall be limited to providing low- and moderate-income housing and affordable workforce housing pursuant to this division. An authority created pursuant to this division is a public body, corporate and politic. An authority shall be deemed to be an “agency” described in subdivision (b) of Section 16 of Article XVI of the California Constitution only for purposes of receiving property tax increment revenues.
(b) (1) A school entity, as defined in subdivision (f) of Section 95 of the Revenue and Taxation Code, may not participate in an authority created pursuant to this section.
(2) A successor agency, as defined in subdivision (j) of Section 34171 of the Health and Safety Code, may not participate in an authority created pursuant to this part, and an entity created pursuant to this part shall not receive any portion of the property tax revenues or other moneys distributed pursuant to Section 34188 of the Health and Safety Code.
(3) An authority formed by a city or county that created a redevelopment agency that was dissolved pursuant to Part 1.85 (commencing with Section 34170) of Division 24 of the Health and Safety Code shall not become effective until the successor agency or designated local authority for the former redevelopment agency has adopted findings of fact stating all of the following:
(A) The agency has received a finding of completion from the Department of Finance pursuant to Section 34179.7 of the Health and Safety Code.
(B) Former redevelopment agency assets that are the subject of litigation against the state, where the city or county or its successor agency or designated local authority are a named plaintiff, have not been or will not be used to benefit any efforts of an authority formed under this part unless the litigation has been resolved by entry of a final judgment by any court of competent jurisdiction and any appeals have been exhausted.
(C) The agency has complied with all orders of the Controller pursuant to Section 34167.5 of the Health and Safety Code.
(c) The governing board of an authority created pursuant to this division shall be an odd number of members with at least five or seven members in total, as follows:
(1) (A) In the case of an authority formed by a city, at least three members of the city council appointed by the city council.
(B) In the case of an authority formed by a county, at least three members of the board of supervisors appointed by the board of supervisors.
(C) In the case of an authority created jointly by a city and a county, at least three members of the city council and three members of the board of supervisors.
(D) In the case of an authority created by a city and county, the mayor shall appoint the same number of members as are appointed by the legislative body of the city and county. Appointments made pursuant to this subparagraph shall not be subject to review by the legislative body of the city and county.
(2) At least one member of the public who lives or works within the boundaries of the city or county that created the authority.
(d) The boundaries of an authority created pursuant to this division may be identical to the boundaries of the city or county that created the authority.

SEC. 3.

 Section 62252 of the Government Code is amended to read:

62252.
 (a) An authority created pursuant to this division shall, by resolution, create a Low and Moderate Income Housing Fund and adopt an affordable housing investment plan that may include either or both of the following:
(1) A provision for the receipt of property tax increment generated within the area.
(2) A provision for the receipt of any tax revenues allocated to the authority pursuant to subdivision (b) of Section 62253.
(b) The plan shall include each of the following elements:
(1) A statement of the principal goals and objectives of the plan.
(2) An affordable housing program that describes how the authority will fulfill its objective and if duties and activities will be assigned to a city or county housing department or public housing authority.
(3) The estimated amount that will be deposited in the Low and Moderate Income Housing Fund during each of the next five years.
(4) Estimates of the number of new, rehabilitated, or price restricted residential units to be assisted during each of the five years and estimates of the expenditures of moneys from the Low and Moderate Income Housing Fund during each of the five years.
(5) A description of how the program will implement the requirements for expenditures of funds in the Low and Moderate Income Housing Fund over a 10-year period at various income levels.
(6) Estimates of the number of units, if any, to be developed by the authority for very low, low-, and moderate-income households during the next five years.
(7) A fiscal analysis setting forth the projected receipt of revenue and projected expenses over a five-year planning horizon, including the potential issuance of bonds backed by property tax increment revenues pursuant to subdivision (a) of Section 62253 during the term of the plan.
(8) Time limits as follows:
(A) Forty-five years for the establishing of loans, advances, and indebtedness.
(B) Forty-five years for repayment of all of the authority’s debts and obligations, and fulfilling all of the authority’s housing obligations. The plan shall specify that an authority shall dissolve as a legal entity in no more than 45 years, and that no further taxes shall be allocated to the authority thereafter. Nothing in this subparagraph shall be interpreted to prohibit an authority from refinancing outstanding debt solely to reduce interest costs.
(9) A feasible method or plan for relocation of families and persons to be temporarily or permanently displaced from housing facilities in the plan area. The method or plan shall be consistent with the requirements of Section 62256.
(c) The authority shall hold a public hearing before adopting an affordable housing investment plan. The authority shall provide notice of that hearing in accordance with Section 6062. The authority shall consider any comments made on the plan at that hearing before adopting the plan.

SEC. 4.

 Section 62253 of the Government Code is amended to read:

62253.
 (a) (1) At any time before or after adoption of the plan, any city, county, or special district, other than a school entity as defined in subdivision (n) of Section 95 of the Revenue and Taxation Code or a successor agency as defined in subdivision (j) of Section 34171, that receives ad valorem property taxes from property located within an area may adopt a resolution directing the county auditor-controller to allocate its share of property tax increment within the area covered by the plan to the authority. The resolution adopted pursuant to this subdivision may direct the county auditor-controller to allocate less than the full amount of the property tax increment, and to establish a maximum amount of time in years that the allocation takes place. These amounts shall be allocated to the authority and when collected, shall be held in a separate fund by the authority. Before adopting a resolution pursuant to this subdivision, a city, county, or special district shall approve a memorandum of understanding with the authority governing the authority’s use of property tax increment funds for administrative and overhead expenses.
(2) The provision for the receipt of property tax increment shall become effective in the property tax year that begins after the December 1 immediately following the adoption of a resolution pursuant paragraph (1). A resolution adopted pursuant to paragraph (1) shall be provided to the county auditor-controller no later than the December 1 immediately following its adoption.
(3) A resolution adopted pursuant to this subdivision may be repealed and be of no further effect beginning in the fiscal year following the adoption of any repeal, by giving the county auditor-controller at least 90 days’ notice prior to the end of the current fiscal year, provided, however, that the county auditor-controller shall continue to allocate the taxing entity’s share of ad valorem property taxes that have been pledged to the repayment of debt issued by the authority to the authority until that debt has been fully repaid, including by means of a refinancing or refunding, unless otherwise agreed upon by the authority and the taxing entity. For purposes of determining the annual amount of a taxing entity’s share of ad valorem property taxes that shall continue to be allocated to an authority following a repeal, the annual amount allocated for all years until the debt has been fully repaid shall be the maximum amount required to service the debt for any single annual period as provided in the authority’s debt service schedule.
(4) When the loans, advances, and indebtedness of an authority, if any, and interest thereon, have been paid, or the maximum amount of time in years has passed in accordance with a resolution adopted pursuant to this subdivision, all funds thereafter received from taxes upon the taxable property in the authority’s boundaries shall be paid into the funds of the respective taxing agencies as taxes on all other property are paid.
(5) All of the taxes levied and collected upon the taxable property in the boundaries of the authority shall be paid into the funds of the respective taxing agencies as though the authority had not been created unless the total assessed valuation of the taxable property in the boundaries of an authority exceeds the total assessed value of the taxable property in the boundaries as shown by the last equalized assessment roll.
(b) (1) At any time before or after the adoption of the plan, a city, county, or special district, other than a school entity as defined in subdivision (n) of Section 95 of the Revenue and Taxation Code or a successor agency as defined in subdivision (j) of Section 34171, may adopt a resolution to allocate tax revenues of that entity to the authority, including revenues derived from local sales and use taxes imposed pursuant to the Bradley-Burns Uniform Local Sales and Use Tax Law (Part 1.5 (commencing with Section 7200) of Division 2 of the Revenue and Taxation Code) or transactions and use taxes imposed pursuant to the Transactions and Use Tax Law (Part 1.6 (commencing with Section 7251) of the Revenue and Taxation Code), provided that both of the following apply:
(A) The use of those revenues by the authority for purposes of this division is consistent with the purposes for which that tax was imposed.
(B) The boundaries of the authority are coterminous with the city or county that established the authority.
(2) A resolution adopted pursuant to this subdivision may be repealed and be of no further effect, provided, however, that the tax revenues allocated to the authority that have been pledged to the repayment of debt issued by the authority shall continue to be so allocated until that debt has been fully repaid, including by means of a refinancing or refunding, unless otherwise agreed upon by the authority and the taxing entity.
(c) A minimum of 95 percent of the allocated property tax increment revenues pursuant to subdivision (a), and allocated tax revenues pursuant to subdivision (b), shall be used to increase, improve, and preserve the community’s supply of housing for low, very low, and moderate-income households. Not more than 5 percent of allocated revenues may be used for administration.
(d) Housing funds expended by an authority shall be spent in proportion to the share of the regional housing need allocated to the city, county, or city and county for each income category pursuant to Section 65584 for low, very low, and moderate-income housing.
(e) Prior to distributing property tax increment to the authority, the county auditor-controller shall deduct any costs incurred by the county in administering the provisions of this division.
(f) This section shall not be construed to do any of the following:
(1) Reduce any allocations of excess, additional, or remaining funds that would otherwise have been allocated to county superintendents of schools, cities, counties, and cities and counties pursuant to clause (i) of subparagraph (B) of paragraph (4) of subdivision (d) of Section 97.2, clause (i) of subparagraph (B) of paragraph (4) of subdivision (d) of Sections 97.3, or Article 4 (commencing with Section 98) of Chapter 6 of Part 0.5 of Division 1, of the Revenue and Taxation Code had this section not been enacted.
(2) Alter in any way the manner in which ad valorem property tax revenue is allocated among taxing entities in a county that have not passed a resolution pursuant to subdivision (a).
(3) Alter in any way the manner in which ad valorem property tax revenue growth from fiscal year to fiscal year is otherwise determined or allocated in a county.
(4) Alter in any way the ad valorem property tax revenue allocations required under Article 4 (commencing with Section 98) of Chapter 6 of Part 0.5 of Division 1 of the Revenue and Taxation Code.
(5) Alter in any way the calculations performed pursuant to Section 95.3 of the Revenue and Taxation Code.
(6) Alter in any way the manner in which ad valorem property tax revenue is allocated pursuant to Section 75.70 of the Revenue and Taxation Code.
(7) Alter in any way the manner in which calculations are performed pursuant to Section 97.70 of the Revenue and Taxation Code.

SEC. 5.

 Section 62254 of the Government Code is amended to read:

62254.
 An authority may do any of the following:
(a) Provide for low- and moderate-income housing and affordable workforce housing in accordance with this division.
(b) Remedy or remove a release of hazardous substances pursuant to the Polanco Redevelopment Act (Article 12.5 (commencing with Section 33459) of Chapter 4 of Part 1 of Division 24 of the Health and Safety Code) or Chapter 6.10 (commencing with Section 25403) of Division 20 of the Health and Safety Code.
(c) Provide for seismic retrofits of existing buildings in accordance with all applicable laws and regulations.
(d) Acquire and transfer real property in accordance with Section 62260. The authority shall retain controls and establish restrictions or covenants running with the land sold or leased for private use for the periods of time and under the conditions as provided in the plan. The establishment of these controls is a public purpose under this division.
(e) Issue bonds in conformity with Article 4.5 (commencing with Section 53506) and Article 5 (commencing with Section 53510) of Chapter 3 of Part 1 of Division 2 of Title 5, or Article 5 (commencing with Section 34350) of Chapter 1 of Part 2 of Division 24 of the Health and Safety Code, provided that if any provision thereof conflicts with this division, this division shall control.
(f) (1) Borrow money, receive grants, or accept financial or other assistance or investment from the state or the federal government or any other public agency or private lending institution for any project within its area of operation, and comply with any conditions of a loan or grant. An authority may qualify for funding as a disadvantaged community pursuant to Section 79505.5 of the Water Code or as defined by Section 56033.5. An authority may also enter into an agreement with a qualified community development entity, as defined by Section 45D(c) of the Internal Revenue Code, to coordinate investments of funds derived from the New Markets Tax Credit with those of the authority in instances where coordination offers opportunities for greater efficiency of investments to improve conditions described in subdivisions (c) and (d) within the territorial jurisdiction of the authority.
(2) Receive funds allocated to it pursuant to a resolution adopted by a city, county, or special district to transfer these funds from a source described in subdivision (d), (e), or (f) of Section 53398.75, subject to any requirements upon, or imposed by, the city, county, or special district as to the use of these funds.
(g) Adopt an affordable housing plan pursuant to Section 62252.
(h) Make loans or grants for owners or tenants to improve, rehabilitate, or retrofit buildings or structures within the plan area.
(i) Construct foundations, platforms, and other like structural forms necessary for the provision or utilization of air rights sites for buildings to be used for purposes of providing affordable housing pursuant to this division.

SEC. 6.

 Section 62255 of the Government Code is amended to read:

62255.
 Commencing in the calendar year in which the authority has allocated a cumulative total of more than one million dollars ($1,000,000) in property tax increment revenues pursuant to subdivision (a) of Section 62253 or other revenues pursuant to subdivision (b) of Section 62253, including any proceeds of a debt issuance, and each year thereafter, the authority shall contract for an independent audit conducted in accordance with generally accepted governmental auditing standards.

SEC. 7.

 Section 62261.1 is added to the Government Code, to read:

62261.1.
 Any action or proceeding to attack, review, set aside, void, or annul the creation of an authority, the adoption of an affordable housing plan pursuant to Section 62252, the allocation of tax revenues to an authority pursuant to Section 62253, or the issuance of bonds by an authority shall be commenced within 30 days after the enactment of the resolution authorizing the action. Consistent with the time limitations of this section, an action or proceeding with respect to an allocation of tax revenues to, or the issuance of bonds by, an authority shall be brought pursuant to Chapter 9 (commencing with Section 860) of Title 10 of Part 2 of the Code of Civil procedure. An authority that receives an allocation of tax revenues pursuant to 62253 or that issues bonds, warrants, contracts, obligations, or other evidences of indebtedness may bring an action in the superior court of the county in which the authority is located to determine the validity of the bonds, warrants, contracts, obligations, or evidences of indebtedness pursuant to Chapter 9 (commencing with Section 860) of Title 10 of Part 2 of the Code of Civil Procedure.