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AB-27 Redevelopment: Educational Revenue Augmentation Fund: transfer payments.(2009-2010)

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Amended  IN  Senate  July 23, 2009

CALIFORNIA LEGISLATURE— 2009–2010 4th Ext.

Assembly Bill
No. 27


Introduced  by Committee on Budget Assembly Member Evans

July 02, 2009


An act relating to the Budget Act of 2009. An act to add Article 6.8 (commencing with Section 63048.100) to Chapter 2 of Division 1 of Title 6.7 of the Government Code, and to amend Sections 33020, 33333.2, 33333.4, 33333.6, 33333.7, 33333.10, 33492.13, 33492.85, and 33683 of, to add Sections 33681.16 and 33681.17 to, and to repeal and add Section 33334.1 of, the Health and Safety Code, relating to redevelopment, making an appropriation therefor, and declaring the urgency thereof, to take effect immediately.


LEGISLATIVE COUNSEL'S DIGEST


AB 27, as amended, Committee on Budget Evans. Budget Act of 2009. Redevelopment: Educational Revenue Augmentation Fund: transfer payments.
(1) Existing law establishes the California Infrastructure and Economic Development Bank with specified authority, including the authority to make loans to sponsors in connection with the financing of a project and the authority to engage the services of private consultants to render professional and technical assistance. Existing property tax law requires the county auditor, in each fiscal year, to allocate property tax revenue to local jurisdictions in accordance with specified formulas and procedures. Existing property tax law also makes specified reductions to the amounts of ad valorem property tax revenue that would otherwise be annually allocated. Existing law generally requires that the revenues not allocated to counties, cities, and special districts as a result of these reductions be transferred to the Educational Revenue Augmentation Fund in that county for allocation to school districts, community college districts, and the county office of education.
This bill would establish within the California Infrastructure and Economic Development Bank an Educational Revenue Augmentation Fund account (ERAF account) for the purpose of receiving and holding deposits of redevelopment agency transfer payments, as defined, and any interest accruing thereon. The bill would authorize the bank to sell for, and on behalf of, the state all or any portion of ERAF account assets or residual interest to a special purpose trust, which the bill would establish. The net proceeds from the sale of ERAF assets to the special purpose trust would be deposited in the State ERAF Account.
The bill would, commencing with the 2009–10 fiscal year, and for each fiscal year thereafter during the time a specified redevelopment agency receives tax revenue from an applicable redevelopment project, require the county auditor to determine the agency transfer payment, as defined, for the agency to be deposited into the county’s Educational Revenue Augmentation Fund. By imposing additional duties on local officials, the bill would impose a state-mandated local program. The bill would require, on or before March 15 of each fiscal year, the county auditor to transfer the agency transfer payment from the county’s Educational Revenue Augmentation Fund to the ERAF account of the California Infrastructure and Economic Development Bank. The bill would also permit an authorized issuer, as defined, to issue bonds, notes, or other evidence of indebtedness to provide net proceeds to make one or more loans to one or more redevelopment agencies to fund that agency’s obligations in the event of a shortfall caused by the obligation to fund the agency transfer payment.
The bill would also require the bank, by December 1, 2009, to certify whether proceeds in the amount of at least $7,400,000,000 will be deposited on or before December 31, 2010, in the State ERAF Account. If the bank does not certify that the amount of the proceeds that will be deposited in the State ERAF Account on or before June 30, 2010, will be at least $7,400,000,000, the changes made by the bill would become inoperative on December 1, 2009, or on the date of the certification if the certification is made before December 1, 2009. The bill would authorize the bank to impose a fee upon a redevelopment agency in an amount to offset the reasonably anticipated and ongoing administrative costs of implementing these provisions. The bill would require the fees to be continuously appropriated to the bank for expenditure to implement these provisions.
(2) The Community Redevelopment Law authorizes the establishment of redevelopment agencies in communities to address the effects of blight in those communities. Existing law requires each agency to prepare or cause to be prepared, and approve, a redevelopment plan for each project area. Existing law requires that a redevelopment plan contain specified limitations, including, but not limited to, a time limit on the establishing of loans, advances, and indebtedness to be paid to finance a redevelopment project, a time line on the effectiveness of a redevelopment plan, and a time line to repay indebtedness.
The bill would modify and extend several time limit requirements as they are applied to specific redevelopment plans or plan amendments and, in these instances, require the legislative body to adopt an ordinance conforming the applicable redevelopment plan or amendment to these provisions.
(3) The bill would provide its provisions shall become inoperative or will not become operative, as applicable, unless, on or before December 1, 2009, a validation proceeding has been filed by the bank or the special purpose trust and in response to this filing the superior court holds, or upon review the Supreme Court holds, that those provisions are constitutional and that there is no legal bar to the securitization of the payments by redevelopment agencies to the state. The bill would also make the operation of other provisions of law, regarding a fuel tax subvention, and the suspension of Section 25.5 of Article XIII of the California Constitution contingent upon the operation of these specified provisions. The bill would also provide that if the sections amended or added by the act remain operative and in effect after December 1, 2009, the additions and changes to state law proposed by Assembly Bill 26 of the 2009-10 Fourth Extraordinary Session of the Legislature and Senate Bill 26 of the 2009-10 Fourth Extraordinary Session of the Legislature would become inoperative on January 1, 2010. The bill would provide, except as specified, that it become operative on January 1, 2010.
(4) The bill would declare that its provisions are interdependent on each other and are therefore not severable.
(5) The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
(6) The California Constitution authorizes the Governor to declare a fiscal emergency and to call the Legislature into special session for that purpose. The Governor issued a proclamation declaring a fiscal emergency, and calling a special session for this purpose, on July 1, 2009.
This bill would state that it addresses the fiscal emergency declared by the Governor by proclamation issued on July 1, 2009, pursuant to the California Constitution.
(7) This bill would declare that it is to take effect immediately as an urgency statute.
This bill would express the intent of the Legislature to enact statutory changes relating to the Budget Act of 2009.

The California Constitution authorizes the Governor to declare a fiscal emergency and to call the Legislature into special session for that purpose. The Governor issued a proclamation declaring a fiscal emergency, and calling a special session for this purpose, on July 1, 2009.

This bill would state that it addresses the fiscal emergency declared by the Governor by proclamation issued on July 1, 2009, pursuant to the California Constitution.

Vote: MAJORITY2/3   Appropriation: NOYES   Fiscal Committee: NOYES   Local Program: NOYES  

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


SECTION 1.

 Article 6.8 (commencing with Section 63048.100) is added to Chapter 2 of Division 1 of Title 6.7 of the Government Code, to read:
Article  6.8. Educational Revenue Augmentation Fund Securitization

63048.100.
 The Legislature finds and declares all of the following:
(a) The proceeds from the sale of Educational Revenue Augmentation Fund (ERAF) assets authorized by this article are not proceeds of taxes as that term is used in Article XIII B of the California Constitution; thus, the disbursement of these proceeds is not subject to the limitations imposed by that article.
(b) ERAF assets shall not be deemed to be General Fund proceeds of taxes appropriated pursuant to Article XIII B or General Fund revenues within the meaning of Section 8 of Article XVI of the California Constitution, Section 41202 of the Education Code, or any other law.

63048.101.
 The following definitions, in addition to the definitions contained in Section 63010, shall govern the construction of this article, unless the context requires otherwise:
(a) “Agency transfer payment” shall have the meaning ascribed in paragraph (3) of subdivision (a) of Section 33681.16 of the Health and Safety Code.
(b) “Bank” means the California Infrastructure and Economic Development Bank.
(c) “ERAF” means the Educational Revenue Augmentation Fund created pursuant to Article 3 (commencing with Section 97.2) of Chapter 6 of Part 0.5 of Division 1 of the Revenue and Taxation Code.
(d) “ERAF account” means an account established by the bank pursuant to this article in which the agency transfer payment is deposited.
(e) “ERAF assets” means the agency transfer payments required to be deposited to the ERAF account pursuant to paragraph (4) of subdivision (c) of Section 33681.16 of the Health and Safety Code, and interest thereon, and all rights to receive those payments and interest.
(f) “Operating expenses” means the reasonable operating expenses of the special purpose trust and the bank, including, but not limited to, the costs of preparation of accounting and other reports, maintenance of the ratings on the bonds, credit enhancements, insurance premiums, or other required activities of the special purpose trust, and fees and expenses incurred for professional consultants, advisers, fiduciaries, and legal counsel.
(g) “State ERAF Account” means a fund established by the state that qualifies as an Educational Revenue Augmentation Fund under Article 3 (commencing with Section 97) of Chapter 6 of Part 0.5 of Division 1 of the Revenue and Taxation Code, such that allocations from the State ERAF Account are treated in the same manner as allocations from the Educational Revenue Augmentation Fund.

63048.102.
 There is hereby established by and within the bank an ERAF account for the purpose of receiving and holding the deposits of agency transfer payments and any interest accruing thereon.

63048.103.
 (a) The bank may sell for, and on behalf of, the state, solely as its agent, all or any portion of the ERAF assets or any residual interest therein to a special purpose trust which is hereby established as a not-for-profit corporation solely for that purpose and for the purposes necessarily incidental thereto. The bank may enter into one or more sales agreements with the special purpose trust on terms it deems appropriate, which may include covenants of, and binding on, the state necessary to establish and maintain the security of the bonds and exemption of interest on the bonds from federal income taxation. ERAF assets, or any residual interest therein may be sold at one time or from time to time, as determined by the Director of Finance.
(b) (1) The special purpose trust may do all of the following:
(A) Issue bonds, including, but not limited to, refunding bonds, on the terms it shall determine. The special purpose trust shall not issue bonds until after January 1, 2010.
(B) Do all things contemplated by, and authorized by, this division with respect to the bank, and enjoy all rights, privileges, and immunities the bank enjoys pursuant to this division, or as authorized by Section 5140 of the Corporations Code with respect to public benefit nonprofit corporations, or as necessary or appropriate in connection with the issuance of bonds.
(C) Enter into agreements with any public or private entity and pledge the ERAF assets, or any residual interest therein, as collateral and security for its bonds.
(2) The pledge of any of the ERAF assets or any residual interests therein, and of any revenues, reserves, and earnings pledged in connection therewith shall be valid and binding in accordance with its terms and have priority in accordance with its terms from the time the pledge is made, and property so pledged shall immediately be subject to the lien of the pledge without the need for physical delivery, recordation, filing, or other further act. This pledge shall not be subject to Division 9 (commencing with Section 9101) of the Commercial Code or Sections 954.5 and 955.1 of the Civil Code.
(3) The special purpose trust, and its assets and income, and bonds issued by the special purpose trust, and their transfer and the income therefrom, shall be exempt from all taxation by the state and by its political subdivisions.
(c) All moneys in, or to be transferred into, the ERAF account that represent ERAF assets sold to a special purpose trust shall be transferred as agreed upon in the agreement of sale between the bank and the special purpose trust.
(d) (1) The principal office of the special purpose trust shall be located in the County of Sacramento. The articles of incorporation of the special purpose trust shall be prepared and filed, on behalf of the state, with the Secretary of State by the bank. The members of the board of directors of the bank shall each serve ex officio as directors of the special purpose trust. Any of these directors may name a designee to act on his or her behalf as a director of the special purpose trust. The Director of Finance or his or her designee shall serve as chair of the special purpose trust. Directors of the special purpose trust shall not be subject to personal liability for carrying out the powers and duties conferred by this article.
(2) The Legislature hereby finds and declares that the duties and responsibilities of the directors of the special purpose trust and the duties and responsibilities of the Director of Finance established under this article are within the scope of the primary duties of those persons in their official capacities.
(3) The special purpose trust shall be treated as a separate legal entity with its separate corporate purpose as described in this article, and the assets, liabilities, and funds of the special purpose trust shall be neither consolidated nor commingled with those of the bank.
(e) The Treasurer shall be the agent for sale of any bonds or other evidences of indebtedness issued by the special purpose trust, and shall exercise those duties pursuant to Sections 5702 and 5703.
(f) Based on the terms of the sale agreements and bonds as established by the special purpose trust, the ERAF assets, and any residual interest therein, may be sold pursuant to this article, whether at one time or from time to time. The net proceeds of the sale of ERAF assets shall be deposited in the State ERAF Account, which is hereby established in the General Fund. The use and application of the proceeds of any sale of any ERAF assets or bonds shall not in any way affect the legality or validity of that sale or those bonds.

63048.104.
 Notwithstanding any other provision of this division, Article 3 (commencing with Section 63041) and Article 5 (commencing with Section 63043) do not apply to any bonds issued by the special purpose trust established by this article. All matters authorized in this article are in addition to powers granted to the bank in this division.

63048.105.
 Any sale of some or all of the ERAF assets, or any residual interest therein, under this article shall be treated as a true sale and absolute transfer of the property so transferred to the special purpose trust and not as a pledge or grant of a security interest by the state, the bank board, or the bank for any borrowing. The characterization of the sale of any of those assets as an absolute transfer by the participants shall not be negated or adversely affected by the fact that only a portion of the ERAF assets is transferred, by the state’s acquisition of an ownership interest in any residual interest or subordinate interest in the ERAF assets, by any characterization of the special purpose trust or its bonds for purposes of accounting, taxation, or securities regulation, or by any other factor whatsoever.

63048.106.
 (a) (1) On and after the effective date of each sale of ERAF assets, the state shall have no right, title, or interest in or to the ERAF assets sold. The ERAF assets sold shall be property of the special purpose trust and not of the state, the bank board, or the bank, and shall be owned, received, held, and disbursed by the special purpose trust or the trustee for the financing. None of the ERAF assets sold by the state pursuant to this article shall be subject to garnishment, levy, execution, attachment, or other process, writ, including, but not limited to, a writ of mandate, or remedy in connection with the assertion or enforcement of any debt, claim, settlement, or judgment against the state, the bank board, or the bank.
(2) The state pledges to, and agrees with, the holders of any bonds issued by the special purpose trust that, until those bonds, together with the interest thereon and costs and expenses in connection with any action or proceeding on behalf of the bondholders, are fully paid and discharged or otherwise provided for pursuant to the terms of the indenture or trust agreement pursuant to which those bonds are issued, the state will do the following:
(A) Enforce its rights to collect the ERAF assets sold to the special purpose trust pursuant to this article and to collect the agency transfer payments due from county auditors pursuant to paragraph (4) of subdivision (c) of Section 33681.16 of the Health and Safety Code.
(B) Not take any action that would in any way materially diminish, limit, or impair the rights to receive ERAF assets sold to the special purpose trust pursuant to this article.
(C) Not in any way materially impair the rights and remedies of bondholders or the security for their bonds.
(3) The special purpose trust may include the pledges set forth in subparagraphs (A), (B), and (C) of paragraph (2) in some or all of its bond documents, including, but not limited to, the indenture, trust agreement, and official statement.
(b) Bonds issued pursuant to this article shall not be deemed to constitute a debt of the state or a pledge of the faith or credit of the state, and all bonds shall contain on the face of the bond a statement to the effect that neither the faith and credit nor the taxing power nor any other assets or revenues of the state or of any political subdivision of the state, other than the special purpose trust, is or shall be pledged to the payment of the principal of or the interest on the bonds.
(c) Whether or not the bonds are of a form and character as to be negotiable instruments under the terms of the Uniform Commercial Code, the bonds are hereby made negotiable instruments for all purposes, subject only to the provisions of the bonds for registration.
(d) The special purpose trust and the bank shall be treated as public agencies for purposes of Chapter 9 (commencing with Section 860) of Title 10 of Part 2 of the Code of Civil Procedure, and any action or proceeding challenging the validity of any matter authorized by this article shall be brought in accordance with, and within the time specified in, that chapter.
(e) Notwithstanding any other law, the exclusive means to obtain review of a superior court judgment entered in an action brought 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 bonds to be issued, the transfer of any agency transfer payments to the bank, the deposit by the bank of the agency transfer payments to the ERAF account, the sale of ERAF assets to the special purpose trust, the pledge of ERAF assets to secure bonds, the deposit of the proceeds of bonds secured by ERAF assets to the State ERAF Account, or any other contracts to be entered into, or any other matters authorized by this article, shall be by petition to the Supreme Court for writ of review. Any petition shall be filed within 15 days following the notice of entry of the superior court judgment, and no extension of that period may be allowed. If no petition is filed within the time allowed therefor, or the petition is denied, with or without opinion, the decision of the superior court shall be final and enforceable as provided in subdivision (a) of Section 870 of the Code of Civil Procedure. In any case in which a petition has been filed within the time allowed therefor, the Supreme Court shall make any orders, as it may deem proper in the circumstances. If no answering party appeared in the superior court action, the only issues that may be raised in the petition are those related to the jurisdiction of the superior court.

63048.107.
 The Legislature, in enacting this article, finds and declares that this article and the acts authorized herein directly or indirectly assist in the financing or refinancing, in whole or in part, of the community’s redevelopment project pursuant to Section 16 of Article XVI of the California Constitution.

63048.108.
 This article and all powers granted hereby shall be liberally construed to effectuate its intent and their purposes.

63048.109.
 The bank may impose a fee upon an applicable agency, as defined in Section 33681.16 of the Health and Safety Code, that shall be set at an amount to offset the reasonably anticipated and ongoing administrative costs of implementing the act adding this article. Notwithstanding Section 13340, these funds are continuously appropriated to the bank for expenditure to implement the act adding this article.

63048.110.
 (a) On or before December 1, 2009, the board of directors of the bank shall certify whether, in its opinion, proceeds in the amount of at least seven billion four hundred million dollars ($7,400,000,000) that are received from the bonds or other evidences of indebtedness issued pursuant to this article will be deposited, on or before June 30, 2010, in the State ERAF Account.
(b) If the board of directors of the bank does not certify, pursuant to subdivision (a), that the amount of proceeds that will be deposited in the State ERAF Account on or before June 30, 2010, will be at least seven billion four hundred million dollars ($7,400,000,000), the act adding this article shall become inoperative on December 1, 2009, or on the date of the certification if the certification is made before December 1, 2009.
(c) The bank may request a local agency to provide any information relevant to the implementation of this article, and the local agency shall provide this information to the bank, in a timely manner, as prescribed by the bank.

SEC. 2.

 Section 33020 of the Health and Safety Code is amended to read:

33020.
 “Redevelopment” means the planning, development, replanning, redesign, clearance, reconstruction, or rehabilitation, or any combination of these, of all or part of a survey area, and the provision of those residential, commercial, industrial, public, or other structures or spaces as may be appropriate or necessary in the interest of the general welfare, including recreational and other facilities incidental or appurtenant to them and, payments to school and community college districts in the fiscal years specified in Sections 33681, 33681.5, 33681.7, 33681.9, and 33681.12, and the payments and transfers pursuant to Section 33681.16.

SEC. 3.

 Section 33333.2 of the Health and Safety Code is amended to read:

33333.2.
 (a) A redevelopment plan containing the provisions set forth in Section 33670 shall contain all of the following limitations. A redevelopment plan that does not contain the provisions set forth in Section 33670 shall contain the limitations in paragraph (4):
(1) (A) A time limit on the establishing of loans, advances, and indebtedness to be paid with the proceeds of property taxes received pursuant to Section 33670 to finance in whole or in part the redevelopment project, which may not exceed 20 years from the adoption of the redevelopment plan, except by amendment of the redevelopment plan as authorized by subparagraph (B). This limit, however, shall not prevent agencies from incurring debt to be paid from the Low and Moderate Income Housing Fund or establishing more debt in order to fulfill the agency’s housing obligations under subdivision (a) of Section 33333.8. The loans, advances, or indebtedness may be repaid over a period of time longer than this time limit as provided in this section. No loans, advances, or indebtedness to be repaid from the allocation of taxes shall be established or incurred by the agency beyond this time limitation. This limit shall not prevent agencies from refinancing, refunding, or restructuring indebtedness after the time limit if the indebtedness is not increased and the time during which the indebtedness is to be repaid is not extended beyond the time limit to repay indebtedness required by this section.
(B) The time limitation established by subparagraph (A) may be extended only by amendment of the redevelopment plan after the agency finds, based on substantial evidence, that (i) significant blight remains within the project area; and (ii) this blight cannot be eliminated without the establishment of additional debt. However, this amended time limitation may not exceed 30 years from the effective date of the ordinance adopting the redevelopment plan, except as necessary to comply with subdivision (a) of Section 33333.8.
(2) A time limit, not to exceed 30 years from the adoption of the redevelopment plan, on the effectiveness of the redevelopment plan. After the time limit on the effectiveness of the redevelopment plan, the agency shall have no authority to act pursuant to the redevelopment plan except to pay previously incurred indebtedness and to enforce existing covenants or contracts, unless the agency has not completed its housing obligations pursuant to subdivision (a) of Section 33333.8, in which case the agency shall retain its authority to implement requirements under subdivision (a) of Section 33333.8, including its ability to incur and pay indebtedness for this purpose, and shall use this authority to complete these housing obligations as soon as is reasonably possible.
(3) A time limit, not to exceed 45 years from the adoption of the redevelopment plan, to repay indebtedness with the proceeds of property taxes received pursuant to Section 33670. After the time limit established pursuant to this paragraph, an agency may not receive property taxes pursuant to Section 33670, except as necessary to comply with subdivision (a) of Section 33333.8.
(4) A time limit, not to exceed 12 years from the adoption of the redevelopment plan, for commencement of eminent domain proceedings to acquire property within the project area. This time limitation may be extended only by amendment of the redevelopment plan after the agency finds, based on substantial evidence, both of the following:
(A) That significant blight remains within the project area.
(B) That this blight cannot be eliminated without the use of eminent domain.
(b) If a redevelopment plan is amended to add territory, the amendment shall contain the time limits required by this section.
(c) When an agency is required to make a payment pursuant to Section 33681.9, the legislative body may amend the redevelopment plan to extend the time limits required pursuant to paragraphs (2) and (3) of subdivision (a) by one year by adoption of an ordinance. In adopting this ordinance, neither the legislative body nor the agency is required to comply with Section 33354.6, Article 12 (commencing with Section 33450), or any other provision of this part relating to the amendment of redevelopment plans.
(d) When an agency is required pursuant to Section 33681.12 to make a payment to the county auditor for deposit in the county’s Educational Revenue Augmentation Fund created pursuant to Article 3 (commencing with Section 97) of Chapter 6 of Part 0.5 of Division 1 of the Revenue and Taxation Code, the legislative body may amend the redevelopment plan to extend the time limits required pursuant to paragraphs (2) and (3) of subdivision (a) by the following:
(1) One year for each year in which a payment is made, if the time limit for the effectiveness of the redevelopment plan established pursuant to paragraph (2) of subdivision (a) is 10 years or less from the last day of the fiscal year in which that payment is made.
(2) One year for each year in which a payment is made, if both of the following apply:
(A) The time limit for the effectiveness of the redevelopment plan established pursuant to paragraph (2) of subdivision (a) is more than 10 years but less than 20 years from the last day of the fiscal year in which a payment is made.
(B) The legislative body determines in the ordinance adopting the amendment that, with respect to the project, all of the following apply:
(i) The agency is in compliance with the requirements of Section 33334.2 or 33334.6, as applicable.
(ii) The agency has adopted an implementation plan in accordance with the requirements of Section 33490.
(iii) The agency is in compliance with subdivisions (a) and (b) of Section 33413, to the extent applicable.
(iv) The agency is not subject to sanctions pursuant to subdivision (e) of Section 33334.12 for failure to expend, encumber, or disburse an excess surplus.
(3) This subdivision shall not apply to any redevelopment plan if the time limits for the effectiveness of the redevelopment plan established pursuant to paragraph (2) of subdivision (a) is more than 20 years after the last day of the fiscal year in which a payment is made.
(4) The legislative body by ordinance may adopt the amendments provided for under this subdivision following a public hearing. Notice of the public hearing shall be mailed to the governing body of each of the affected taxing entities at least 30 days prior to the hearing. Notice shall also be published in a newspaper of general circulation in the community at least once, not less than 10 days prior to the date of the public hearing. The ordinance shall contain a finding of the legislative body that funds used to make a payment to the county’s Educational Revenue Augmentation Fund pursuant to Section 33681.12 would otherwise have been used to pay the costs of projects and activities necessary to carry out the goals and objectives of the redevelopment plan. In adopting an ordinance pursuant to this subdivision, neither the legislative body nor the agency is required to comply with Section 33354.6, Article 12 (commencing with Section 33450), or any other provision of this part.
(e) This section shall apply only to redevelopment projects for which a final redevelopment plan is adopted pursuant to Article 5 (commencing with Section 33360) on or after January 1, 1994, and to amendments that add territory and that are adopted on or after January 1, 1994.
(f) (1) Notwithstanding subdivision (a), and provided the agency has not timely adopted the resolution described in paragraph (1) of subdivision (b) of Section 33681.16, on and after January 1, 2010, all of the following provisions shall apply to a redevelopment project for which a final plan was adopted on or after January 1, 1994, but prior to January 1, 2010, provided that the time limit on the effectiveness of the redevelopment plan was not reached prior to January 1, 2010, and an amendment to a redevelopment plan that added territory and was adopted on or after January 1, 1994, but prior to January 1, 2010, provided that the time limit on the effectiveness of the amendment was not reached prior to January 1, 2010:
(A) The time limit required under paragraph (1) of subdivision (a) shall not apply.
(B) The time limit required under paragraph (2) of subdivision (a), as it may have been extended by the legislative body pursuant to subdivisions (c) and (d), is extended for an additional 40 years, unless the agency has adopted the resolution described in subparagraph (A) of paragraph (2) of subdivision (b) of Section 33681.16 in which case the additional 40-year period shall be reduced in accordance with subparagraph (B) of paragraph (2) of subdivision (b) of Section 33681.16.
(C) The time limit required under paragraph (3) of subdivision (a) shall be 10 years after the termination of the effectiveness of the redevelopment plan, as extended pursuant to subparagraph (B). After the expiration of this time limit, the agency shall not receive property taxes pursuant to Section 33670, except as otherwise necessary to comply with subdivision (a) of Section 33333.8.
(D) Any limitation on the number of dollars of taxes that may be divided and allocated to the redevelopment agency set forth in or otherwise applicable to the redevelopment plan, including any amendment to the plan, is eliminated.
(2) Paragraph (1) shall apply notwithstanding any term, provision, or condition set forth in any agreement between the agency and an affected taxing agency, as defined in Section 33353.2, that sets or purports to set (A) more restrictive time limits on the redevelopment project than the limits set forth in paragraph (1); (B) any limit on the amount of property tax increment an agency may be allocated or may receive; or (C) any limit on the amount of bonded indebtedness of the agency that may be outstanding at any one time or in total.
(3) The legislative body shall adopt an ordinance conforming the applicable redevelopment plan or amendment that added territory to the requirements of this subdivision. In adopting this ordinance, neither the legislative body nor the agency is required to comply with Section 33354.6, Article 12 (commencing with Section 33450), or any other provision of this part relating to the amendment of redevelopment plans. This subdivision shall be effective as to the applicable redevelopment plan or amendment that added territory, notwithstanding the failure of the legislative body to adopt the ordinance described in this paragraph.

SEC. 4.

 Section 33333.4 of the Health and Safety Code is amended to read:

33333.4.
 (a) Every legislative body that adopted a final redevelopment plan prior to October 1, 1976, that contains the provisions set forth in Section 33670 but does not contain all of the limitations required by Section 33333.2, shall adopt an ordinance on or before December 31, 1986, that contains all of the following:
(1) A limitation on the number of dollars of taxes that may be divided and allocated to the redevelopment agency pursuant to the plan, including any amendments to the plan. Taxes shall not be divided and shall not be allocated to the redevelopment agency beyond that limitation, except as necessary to comply with subdivision (a) of Section 33333.8.
(2) A time limit on the establishing of loans, advances, and indebtedness to finance in whole, or in part, the redevelopment project. No loans, advances, or indebtedness to be repaid from the allocation of taxes shall be established or incurred by the agency beyond the time limitation, except as necessary to comply with subdivision (a) of Section 33333.8.
(3) A time limit, not to exceed 12 years, for commencement of eminent domain proceedings to acquire property within the project area. This time limitation may be extended only by amendment of the redevelopment plan after the agency finds, based on substantial evidence, both of the following:
(A) That significant blight remains within the project area.
(B) That this blight cannot be eliminated without the use of eminent domain.
(b) The limitations established in the ordinance adopted pursuant to this section shall apply to the redevelopment plan as if the redevelopment plan had been amended to include those limitations. However, in adopting the ordinance, neither the legislative body nor the agency is required to comply with Article 12 (commencing with Section 33450) or any other provision of this part relating to the amendment of redevelopment plans.
(c) The limitations established in the ordinance adopted pursuant to this section shall not be applied to limit allocation of taxes to an agency to the extent required to eliminate project deficits created under subdivision (g) of Section 33334.6 in accordance with the plan adopted pursuant thereto for the purpose of eliminating the deficit or to comply with subdivision (a) of Section 33333.8. In the event of a conflict between these limitations and the obligations under Section 33334.6 or subdivision (a) of Section 33333.8, the legislative body shall amend the ordinance adopted pursuant to this section to modify the limitations to the extent necessary to permit compliance with the plan adopted pursuant to subdivision (g) of Section 33334.6, to permit compliance with subdivision (a) of Section 33333.8, and to allow full expenditure of moneys in the agency’s Low and Moderate Income Housing Fund in accordance with Section 33334.3. The procedure for amending the ordinance pursuant to this subdivision shall be the same as for adopting the ordinance under subdivision (b).
(d) This section shall not be construed to allow the impairment of any obligation or indebtedness incurred by the legislative body or the agency pursuant to this part.
(e) In any litigation to challenge or attack any ordinance adopted pursuant to this section, the court shall sustain the actions of the legislative body and the agency unless the court finds those actions were arbitrary or capricious. The Legislature finds and declares that this is necessary because redevelopment agencies with project areas established prior to October 1, 1976, have incurred existing obligations and indebtedness and have adopted projects, programs, and activities with the authority to receive and pledge the entire allocation of taxes authorized by Section 33670 and that it is necessary to protect against the possible impairment of existing obligations and indebtedness and to allow the completion of adopted projects and programs.
(f) The ordinance adopted by the legislative body in compliance with this section does not relieve any agency of its obligations under Section 33333.8, 33334.2, 33334.3, Article 9 (commencing with Section 33410), or any other requirement contained in this part.
(g) A redevelopment plan adopted on or after October 1, 1976, and prior to January 1, 1994, containing the provisions set forth in Section 33670, shall also contain:

(1)A limitation on the number of dollars of taxes that may be divided and allocated to the agency pursuant to the plan, including any amendments to the plan. Taxes shall not be divided and shall not be allocated to the agency beyond this limitation, except pursuant to amendment of the redevelopment plan, or as necessary to comply with subdivision (a) of Section 33333.8.

(2)A contain a time limit, not to exceed 12 years, for commencement of eminent domain proceedings to acquire property within the project area. This time limitation may be extended only by amendment of the redevelopment plan after the agency finds, based on substantial evidence, both of the following:

(A)

(1) That significant blight remains within the project area.

(B)

(2) That this blight cannot be eliminated without the use of eminent domain.
(h) (1) Notwithstanding subdivision (a), on and after January 1, 2010, and provided the agency has not timely adopted the resolution described in paragraph (1) of subdivision (b) of Section 33681.16, the limitations required under paragraphs (1) and (2) of subdivision (a) shall not apply to a redevelopment project for which a final redevelopment plan was adopted on or before October 1, 1976.
(2) Paragraph (1) shall apply notwithstanding any term, provision, or condition set forth in any agreement between the agency and an affected taxing agency, as defined in Section 33353.2, including, but not limited to, agreements entered into pursuant to Section 33401 or 33676, as those sections existed prior to January 1, 1994, that sets or purports to set (A) a limitation on the number of dollars of taxes that may be divided and allocated to the redevelopment agency pursuant to the plan, including any amendments to the plan; (B) a time limit on the establishing of loans, advances, and indebtedness to finance in whole, or in part, the redevelopment project; or (C) any limit on the amount of bonded indebtedness of the agency that may be outstanding at any one time or in total.
(3) The legislative body shall adopt an ordinance conforming the applicable redevelopment plan or amendment that added territory to the requirements of this subdivision, and to also eliminate from the plan and any amendment any limitation on the amount of taxes that may be divided and allocated to the agency pursuant to, or otherwise applicable to, the plan or amendment. In adopting this ordinance, neither the legislative body nor the agency is required to comply with Section 33354.6, Article 12 (commencing with Section 33450), or any other provision of this part relating to the amendment of redevelopment plans. This subdivision shall be effective as to the applicable redevelopment plan or amendment that added territory, notwithstanding the failure of the legislative body to adopt the ordinance described in this paragraph.

SEC. 5.

 Section 33333.6 of the Health and Safety Code is amended to read:

33333.6.
 The limitations of this section shall apply to every redevelopment plan adopted on or before December 31, 1993.
(a) The Except as provided in subdivision (k), the effectiveness of every redevelopment plan to which this section applies shall terminate at a date that shall not exceed 40 years from the adoption of the redevelopment plan or January 1, 2009, whichever is later. After the time limit on the effectiveness of the redevelopment plan, the agency shall have no authority to act pursuant to the redevelopment plan except to pay previously incurred indebtedness, to comply with Section 33333.8 and to enforce existing covenants, contracts, or other obligations.
(b) Except as provided in subdivisions (f) and (g), a redevelopment agency may not pay indebtedness or receive property taxes pursuant to Section 33670 after 10 years from the termination of the effectiveness of the redevelopment plan pursuant to subdivision (a) or from the date for the termination of the effectiveness of the redevelopment plan as extended pursuant to subdivision (k).
(c) (1) If plans that had different dates of adoption were merged on or before December 31, 1993, the time limitations required by this section shall be counted individually for each merged plan from the date of the adoption of each plan. If an amendment to a redevelopment plan added territory to the project area on or before December 31, 1993, the time limitations required by this section shall commence, with respect to the redevelopment plan, from the date of the adoption of the redevelopment plan, and, with respect to the added territory, from the date of the adoption of the amendment.
(2) If plans that had different dates of adoption are merged on or after January 1, 1994, the time limitations required by this section shall be counted individually for each merged plan from the date of the adoption of each plan.
(d) (1) Unless a redevelopment plan adopted prior to January 1, 1994, contains all of the limitations required by this section and each of these limitations does not exceed the applicable time limits established by this section, the legislative body, acting by ordinance on or before December 31, 1994, shall amend every redevelopment plan adopted prior to January 1, 1994, either to amend an existing time limit that exceeds the applicable time limit established by this section or to establish time limits that do not exceed the provisions of subdivision (b) or (c).
(2) The limitations established in the ordinance adopted pursuant to this section shall apply to the redevelopment plan as if the redevelopment plan had been amended to include those limitations. However, in adopting the ordinance required by this section, neither the legislative body nor the agency is required to comply with Article 12 (commencing with Section 33450) or any other provision of this part relating to the amendment of redevelopment plans.
(e) (1) If a redevelopment plan adopted prior to January 1, 1994, contains one or more limitations required by this section, and the limitation does not exceed the applicable time limit required by this section, this section shall not be construed to require an amendment of this limitation.
(2) (A) A redevelopment plan adopted prior to January 1, 1994, that has a limitation shorter than the terms provided in this section may be amended by a legislative body by adoption of an ordinance on or after January 1, 1999, but on or before December 31, 1999, to extend the limitation, provided that the plan as so amended does not exceed the terms provided in this section. In adopting an ordinance pursuant to this subparagraph, neither the legislative body nor the agency is required to comply with Section 33354.6, Article 12 (commencing with Section 33450), or any other provision of this part relating to the amendment of redevelopment plans.
(B) On or after January 1, 2002, a redevelopment plan may be amended by a legislative body by adoption of an ordinance to eliminate the time limit on the establishment of loans, advances, and indebtedness required by this section prior to January 1, 2002. In adopting an ordinance pursuant to this subparagraph, neither the legislative body nor the agency is required to comply with Section 33354.6, Article 12 (commencing with Section 33450), or any other provision of this part relating to the amendment of redevelopment plans, except that the agency shall make the payment to affected taxing entities required by Section 33607.7.
(C) When an agency is required to make a payment pursuant to Section 33681.9, the legislative body may amend the redevelopment plan to extend the time limits required pursuant to subdivisions (a) and (b) by one year by adoption of an ordinance. In adopting an ordinance pursuant to this subparagraph, neither the legislative body nor the agency is required to comply with Section 33354.6, Article 12 (commencing with Section 33450), or any other provision of this part relating to the amendment of redevelopment plans, including, but not limited to, the requirement to make the payment to affected taxing entities required by Section 33607.7.
(D) When an agency is required pursuant to Section 33681.12 to make a payment to the county auditor for deposit in the county’s Educational Revenue Augmentation Fund created pursuant to Article 3 (commencing with Section 97) of Chapter 6 of Part 0.5 of Division 1 of the Revenue and Taxation Code, the legislative body may amend the redevelopment plan to extend the time limits required pursuant to subdivisions (a) and (b) by the following:
(i) One year for each year in which a payment is made, if the time limit for the effectiveness of the redevelopment plan established pursuant to subdivision (a) is 10 years or less from the last day of the fiscal year in which a payment is made.
(ii) One year for each year in which a payment is made, if both of the following apply:
(I) The time limit for the effectiveness of the redevelopment plan established pursuant to subdivision (a) is more than 10 years but less than 20 years from the last day of the fiscal year in which a payment is made.
(II) The legislative body determines in the ordinance adopting the amendment that, with respect to the project, the agency is in compliance with Section 33334.2 or 33334.6, as applicable, has adopted an implementation plan in accordance with the requirements of Section 33490, is in compliance with subdivisions (a) and (b) of Section 33413, to the extent applicable, and is not subject to sanctions pursuant to subdivision (e) of Section 33334.12 for failure to expend, encumber, or disburse an excess surplus.
(iii) This subparagraph shall not apply to any redevelopment plan if the time limit for the effectiveness of the redevelopment plan established pursuant to subdivision (a) is more than 20 years after the last day of the fiscal year in which a payment is made.
(3) (A) The legislative body by ordinance may adopt the amendments provided for under this paragraph following a public hearing. Notice of the public hearing shall be mailed to the governing body of each affected taxing entity at least 30 days prior to the public hearing and published in a newspaper of general circulation in the community at least once, not less than 10 days prior to the date of the public hearing. The ordinance shall contain a finding of the legislative body that funds used to make a payment to the county’s Educational Revenue Augmentation Fund pursuant to Section 33681.12 would otherwise have been used to pay the costs of projects and activities necessary to carry out the goals and objectives of the redevelopment plan. In adopting an ordinance pursuant to this paragraph, neither the legislative body nor the agency is required to comply with Section 33354.6, Article 12 (commencing with Section 33450), or any other provision of this part relating to the amendment of redevelopment plans.
(B) The time limit on the establishment of loans, advances, and indebtedness shall be deemed suspended and of no force or effect but only for the purpose of issuing bonds or other indebtedness the proceeds of which are used to make the payments required by Section 33681.12 if the following apply:
(i) The time limit on the establishment of loans, advances, and indebtedness required by this section prior to January 1, 2002, has expired and has not been eliminated pursuant to subparagraph (B).
(ii) The agency is required to make a payment pursuant to Section 33681.12.
(iii) The agency determines that in order to make the payment required by Section 33681.12, it is necessary to issue bonds or incur other indebtedness.
(iv) The proceeds of the bonds issued or indebtedness incurred are used solely for the purpose of making the payments required by Section 33681.12 and related costs.
The suspension of the time limit on the establishment of loans, advances, and indebtedness pursuant to this subparagraph shall not require the agency to make the payment to affected taxing entities required by Section 33607.7.
(4) (A) A time limit on the establishing of loans, advances, and indebtedness to be paid with the proceeds of property taxes received pursuant to Section 33670 to finance in whole or in part the redevelopment project shall not prevent an agency from incurring debt to be paid from the agency’s Low and Moderate Income Housing Fund or establishing more debt in order to fulfill the agency’s affordable housing obligations, as defined in paragraph (1) of subdivision (a) of Section 33333.8.
(B) A redevelopment plan may be amended by a legislative body to provide that there shall be no time limit on the establishment of loans, advances, and indebtedness paid from the agency’s Low and Moderate Income Housing Fund or establishing more debt in order to fulfill the agency’s affordable housing obligations, as defined in paragraph (1) of subdivision (a) of Section 33333.8. In adopting an ordinance pursuant to this subparagraph, neither the legislative body nor the agency is required to comply with Section 33345.6, Article 12 (commencing with Section 33450), or any other provision of this part relating to the amendment of redevelopment plans, and the agency shall not make the payment to affected taxing entities required by Section 33607.7.
(f) The limitations established in the ordinance adopted pursuant to this section shall not be applied to limit the allocation of taxes to an agency to the extent required to comply with Section 33333.8. In the event of a conflict between these limitations and the obligations under Section 33333.8, the limitations established in the ordinance shall be suspended pursuant to Section 33333.8.
(g) (1) This section does not effect the validity of any bond, indebtedness, or other obligation, including any mitigation agreement entered into pursuant to Section 33401, authorized by the legislative body, or the agency pursuant to this part, prior to January 1, 1994.
(2) This section does not affect the right of an agency to receive property taxes, pursuant to Section 33670, to pay the bond, indebtedness, or other obligation.
(3) This section does not affect the right of an agency to receive property taxes pursuant to Section 33670 to pay refunding bonds issued to refinance, refund, or restructure indebtedness authorized prior to January 1, 1994, if the last maturity date of these refunding bonds is not later than the last maturity date of the refunded indebtedness and the sum of the total net interest cost to maturity on the refunding bonds plus the principal amount of the refunding bonds is less than the sum of the total net interest cost to maturity on the refunded indebtedness plus the principal amount of the refunded indebtedness.
(h) A redevelopment agency shall not pay indebtedness or receive property taxes pursuant to Section 33670, with respect to a redevelopment plan adopted prior to January 1, 1994, after the date identified in subdivision (b) or the date identified in the redevelopment plan, whichever is earlier, except as provided in paragraph (2) of subdivision (e), in subdivision (g), or in Section 33333.8.
(i) The Legislature finds and declares that the amendments made to this section by Chapter 942 of the Statutes of 1993 are intended to add limitations to the law on and after January 1, 1994, and are not intended to change or express legislative intent with respect to the law prior to that date. It is not the intent of the Legislature to affect the merits of any litigation regarding the ability of a redevelopment agency to sell bonds for a term that exceeds the limit of a redevelopment plan pursuant to law that existed prior to January 1, 1994.
(j) If a redevelopment plan is amended to add territory, the amendment shall contain the time limits required by Section 33333.2.
(k) (1) Notwithstanding subdivisions (a) and (b), and provided the agency has not timely adopted the resolution described in paragraph (1) of subdivision (b) of Section 33681.16, all of the following provisions shall apply to a redevelopment project for which a final plan was adopted on or before December 31, 1993, provided that the time limit on the effectiveness of the redevelopment plan was not reached prior to January 1, 2010, and to an amendment to a redevelopment plan that added territory and was adopted on or before December 31, 1993, provided that the time limit on the effectiveness of the amendment was not reached prior to January 1, 2010:
(A) The time limit required under subdivision (a), as it may have been extended by the legislative body pursuant to subparagraphs (C) and (D) of paragraph (2) of subdivision (e), is extended for an additional 40 years, unless the agency has adopted the resolution described in subparagraph (A) of paragraph (2) of subdivision (b) of Section 33681.16 in which case the additional 40-year period shall be reduced in accordance with subparagraph (B) of paragraph (2) of subdivision (b) of Section 33681.16.
(B) The time limit required under subdivision (b) shall be 10 years after the termination of the effectiveness of the redevelopment plan, as extended pursuant to subparagraph (A). After the expiration of this time limit, the agency shall not receive property taxes pursuant to Section 33670, except as otherwise necessary to comply with subdivision (a) of Section 33333.8.
(C) Any time limit on the establishing of loans, advances, and indebtedness to be paid with the proceeds of property taxes received pursuant to Section 33670 to finance in whole or in part the redevelopment project set forth in or otherwise applicable to the redevelopment plan, including any amendment to the plan, is eliminated.
(D) Any limitation on the number of dollars of taxes that may be divided and allocated to the redevelopment agency set forth in or otherwise applicable to the redevelopment plan, including any amendment to the plan, is eliminated.
(2) Paragraph (1) shall apply notwithstanding any term, provision, or condition set forth in any agreement between the agency and an affected taxing agency, as defined in Section 33353.2, including, but not limited to, agreements entered into pursuant to Section 33401 or 33676, as those sections existed prior to January 1, 1994, that set or purport to set (A) more restrictive time limits on the redevelopment project than the limits set forth in paragraph (1); (B) any limit on the amount of property tax increment an agency may be allocated or may receive; or (C) any limit on the amount of bonded indebtedness of the agency that may be outstanding at any one time or in total.
(3) The legislative body shall adopt an ordinance conforming the applicable redevelopment plan or amendment that added territory to the requirements of this subdivision. In adopting this ordinance, neither the legislative body nor the agency is required to comply with Section 33354.6, Article 12 (commencing with Section 33450), or any other provision of this part relating to the amendment of redevelopment plans. This subdivision shall be effective as to the applicable redevelopment plan or amendment that added territory, notwithstanding the failure of the legislative body to adopt the ordinance described in this paragraph.

SEC. 6.

 Section 33333.7 of the Health and Safety Code is amended to read:

33333.7.
 (a) Notwithstanding the time limits in paragraph (1) of subdivision (a) of Section 33333.6, as that paragraph (1) read on December 31, 2001, the Redevelopment Agency of the City and County of San Francisco may, subject to the approval of the Board of Supervisors of the City and County of San Francisco, retain its ability to incur indebtedness exclusively for Low and Moderate Income Housing Fund activities eligible under Sections 33334.2 and 33334.3 until January 1, 2014, or until the agency replaces all of the housing units demolished prior to the enactment of the replacement housing obligations in Chapter 970 of the Statutes of 1975, whichever occurs earlier. The ability of the agency to receive tax increment revenues to repay indebtedness incurred for these Low and Moderate Income Housing Fund activities may be extended until no later than January 1, 2044. Nothing in this paragraph shall be construed to extend a plan’s effectiveness, except to incur additional indebtedness for Low and Moderate Income Housing Fund activities, to pay previously incurred indebtedness, and to enforce existing covenants, contracts, or other obligations.
(b) Annual revenues shall not exceed the amount necessary to fund the Low and Moderate Income Housing Fund activities of the agency. The agency shall neither collect nor spend more than 10 percent for the planning and administrative costs authorized pursuant to subdivision (e) of Section 33334.3. Revenues received under this paragraph shall not exceed the amount of tax increment received and allocated to the agency pursuant to the plan, as it has been amended, less the amount necessary to pay prior outstanding indebtedness, and less the amount of the project area’s property tax revenue that school entities are entitled to receive pursuant to Chapter 3 (commencing with Section 75) and Chapter 6 (commencing with Section 95) of Part 0.5 of Division 1 of the Revenue and Taxation Code if the plan had not been amended. Additionally, revenues collected under this paragraph are subject to the payments to affected taxing entities pursuant to Section 33607.
(c) The activities conducted with revenues received under this paragraph shall be consistent with the policies and objectives of the community’s housing element, as reviewed and approved by the department, and shall address the unmet housing needs of very low, low- and moderate-income households. The activities shall also be consistent with the community’s most recently approved consolidated and annual action plans submitted to the United States Department of Housing and Urban Development, and if the director deems it necessary, the annual action plans shall be submitted to the department on an annual basis. No less than 50 percent of the revenues received shall be devoted to assisting in the development of housing that is affordable to very low income households.
(d) The agency shall not incur any indebtedness pursuant to this paragraph until the director certifies, after consulting with the agency, the net difference between the number of housing units affordable to persons and families of low and moderate income that the agency destroyed or removed prior to January 1, 1976, and the number of housing units affordable to persons and families of low and moderate income that the agency rehabilitated, developed, or constructed, or caused to be rehabilitated, developed, or constructed within the project areas adopted prior to January 1, 1976.
(e) The agency shall not incur any indebtedness pursuant to this paragraph unless the director of the department certifies annually, prior to the creation of indebtedness, all of the following:
(1) The community has a current housing element that substantially complies with the requirements of Article 10.6 (commencing with Section 65580) of Chapter 3 of Division 1 of Title 7 of the Government Code.
(2) The community’s housing element indicates an unmet need for Low and Moderate Income Housing Fund activities.
(3) The agency’s most recent independent financial audit report prepared pursuant to Section 33080.1 reports acceptable findings and no major violations of this part.
(4) The agency has complied with subdivision (a) of Section 33334.2.
(5) The agency has met the requirements of this part with respect to the provision of dwelling units for persons and families of low or moderate income, including, but not limited to, the requirements of Section 33413.
(f) Nothing in this section shall preclude the Redevelopment Agency of the City and County of San Francisco and the Board of Supervisors of the City and County of San Francisco from utilizing the provisions of Sections 33333.2, 33333.4, and 33333.6, as amended under the act that added this subdivision.

SEC. 7.

 Section 33333.10 of the Health and Safety Code is amended to read:

33333.10.
 (a) (1) Notwithstanding the time limits in subdivisions (a) and (b) of Section 33333.6 and the extension under subdivision (k) of Section 33333.6, an agency that adopted a redevelopment plan on or before December 31, 1993, may, pursuant to this section, amend that plan to extend the time limit on effectiveness of the plan for up to 10 additional years beyond the limit allowed by subdivision (a) of Section 33333.6, and as that limit is extended pursuant to subdivision (k) of Section 33333.6.
(2) In addition, the agency may, pursuant to this section, amend that plan to extend the time limit on the payment of indebtedness and receipt of property taxes to be not more than 10 years from the termination of the effectiveness of the redevelopment plan as that time limit has been amended pursuant to paragraph (1).
(b) A redevelopment plan may be amended pursuant to subdivision (a) only after the agency finds, based on substantial evidence, that both of the following conditions exist:
(1) Significant blight remains within the project area.
(2) This blight cannot be eliminated without extending the effectiveness of the plan and the receipt of property taxes.
(c) As used in this section:
(1) “Blight” has the same meaning as that term is given in Section 33030.
(2) “Significant” means important and of a magnitude to warrant agency assistance.
(3) “Necessary and essential parcels” means parcels that are not blighted but are so necessary and essential to the elimination of the blight that these parcels should be included within the portion of the project area in which tax increment funds may be spent. “Necessary and essential parcels” are (A) parcels that are adjacent to one or more blighted parcels that are to be assembled in order to create a parcel of adequate size given present standards and market conditions, and (B) parcels that are adjacent or near parcels that are blighted on which it is necessary to construct a public improvement to eliminate the blight.
(d) For purposes of this section, significant blight can exist in a project area even though blight is not prevalent in a project area. The report submitted to the legislative body pursuant to Section 33352 shall identify on a map the portion of the project area in which significant blight remains.
(e) After the limit on the payment of indebtedness and receipt of property taxes that would have taken effect but for the amendment pursuant to this section, except for funds deposited in the Low and Moderate Income Housing Fund pursuant to Section 33334.2 or 33334.6, the agency shall spend tax increment funds only within the portion of the project area that has been identified in the report adopted pursuant to Section 33352 as the area containing blighted parcels and necessary and essential parcels. Except as otherwise limited by subdivisions (f) and (g), agencies may continue to spend funds deposited in the Low and Moderate Income Housing Fund in accordance with this division.
(f) (1) Except as otherwise provided in this subdivision, after the limit on the payment of indebtedness and receipt of property taxes that would have taken effect, but for the amendment pursuant to this section, agencies shall only spend moneys from the Low and Moderate Income Housing Fund for the purpose of increasing, improving, and preserving the community’s supply of housing at affordable housing cost to persons and families of low, very low, or extremely low income, as defined in Sections 50079.5, 50093, 50105, and 50106. During this period, an agency that has adopted an amendment pursuant to subdivision (a) may use moneys from the Low and Moderate Income Housing Fund for the purpose of increasing, improving, and preserving housing at affordable housing cost to persons and families of moderate income as defined in Section 50093. However, this amount shall not exceed, in a five-year period, the amount of moneys from the Low and Moderate Income Housing Fund that are used to increase, improve, and preserve housing at affordable housing cost to persons and families of extremely low income, as defined in Section 50106. In no case shall the amount expended for housing for persons and families of moderate income exceed 15 percent of the annual amount deposited in the Low and Moderate Income Housing Fund during a five-year period and the number of housing units affordable to moderate-income persons shall not exceed the number of housing units affordable to extremely low income persons.
(2) Commencing with the first fiscal year that commences after the date of the adoption of an amendment pursuant to subdivision (a) and until the limit on the payment of indebtedness and receipt of property taxes that would have taken effect but for the amendment pursuant to this section, an agency that has adopted an amendment pursuant to subdivision (a) may use moneys from the Low and Moderate Income Housing Fund for the purpose of increasing, improving, and preserving housing at affordable housing cost to persons and families of moderate income as defined in Section 50093. However, this amount shall not exceed, in a five-year period, 15 percent of the amount of moneys deposited in the Low and Moderate Income Housing Fund during that five-year period and shall only be used to assist housing projects in which no less than 49 percent of the units are affordable to and occupied by persons and families of low, very low, or extremely low income. An agency may spend an additional amount of moneys in the same or other housing projects to assist housing units affordable to and occupied by moderate-income persons. However, this amount shall not exceed the lesser of: the amount of moneys spent to increase, improve, and preserve housing at affordable housing cost to persons and families of extremely low income as defined in Section 50106, or 5 percent of the moneys deposited in the Low and Moderate Income Housing Fund during that five-year period.
(g) (1) Except as provided in paragraph (2) or (3), commencing with the first fiscal year that commences after the date of adoption of an amendment pursuant to subdivision (a), not less than 30 percent of all taxes that are allocated to the agency pursuant to Section 33670 from the redevelopment project area so amended shall be deposited into that project’s Low and Moderate Income Housing Fund for the purposes specified in subdivision (f).
(2) In any fiscal year, the agency may deposit less than the amount required by paragraph (1), but not less than the amount required by Section 33334.2 or 33334.6, into the Low and Moderate Income Housing Fund if the agency finds that the difference between the amount deposited and the amount required by paragraph (1) is necessary to make principal and interest payments during that fiscal year on bonds sold by the agency to finance or refinance the redevelopment project prior to six months before the date of adoption of the amendment pursuant to subdivision (a). Bonds sold by the agency prior to six months before the date of the adoption of the amendment pursuant to subdivision (a) may only be refinanced, refunded, or restructured after the date of the amendment pursuant to subdivision (a). However, for purposes of this section, bonds refinanced, refunded, or restructured after the date of the amendment pursuant to subdivision (a) may only be treated as if sold on the date the original bonds were sold if (A) the net proceeds were used to refinance the original bonds, (B) there is no increase in the amount of principal at the time of refinancing, restructuring, or refunding, and (C) the time during which the refinanced indebtedness is to be repaid does not exceed the date on which the existing indebtedness would have been repaid.
(3) No later than 120 days prior to depositing less than the amount required by paragraph (1) into the Low and Moderate Income Housing Fund, the agency shall adopt, by resolution after a noticed public hearing, a finding that the difference between the amount allocated and the amount required by paragraph (1) is necessary to make payments on bonds sold by the agency to finance or refinance the redevelopment project and identified in the preliminary report adopted pursuant to paragraph (9) of subdivision (e) of Section 33333.11, and specifying the amount of principal remaining on the bonds, the amount of annual payments, and the date on which the indebtedness will be repaid. Notice of the time and place of the public hearing shall be published in a newspaper of general circulation once a week for at least two successive weeks prior to the public hearing. The agency shall make available to the public the proposed resolution no later than the time of the publication of the first notice of the public hearing. A copy of the resolution shall be transmitted to the Department of Housing and Community Development within 10 days after adoption.
(4) Notwithstanding paragraph (1), an agency that sells bonds on or after the date of adoption of an amendment pursuant to subdivision (a), the repayment of which is to be made from taxes allocated to the agency pursuant to Section 33670 from the project so amended, may elect to subordinate up to 16 2/3 percent of its annual 30-percent Low and Moderate Income Housing Fund deposit obligation to the payment of debt service on the bonds. If the agency makes that election and in any year the agency has insufficient tax-increment revenue available to pay debt service on the bonds to which the funds from the Low and Moderate Income Housing Fund are subordinated, the agency may deposit less than the full 100 percent of its annual 30-percent Low and Moderate Income Housing Fund obligation but only to the extent necessary to pay that debt service and in no event shall less than 83 1/3 percent of that obligation be deposited into the Low and Moderate Income Housing Fund for that year. The difference between the amount that is actually deposited in the Low and Moderate Income Housing Fund and the full 100 percent of the agency’s 30-percent Low and Moderate Income Housing Fund deposit obligation shall constitute a deficit in the Low and Moderate Income Housing Fund subject to repayment pursuant to paragraph (5).
(5) If, pursuant to paragraph (2) or (4), the agency deposits less than 30 percent of the taxes allocated to the agency pursuant to Section 33670 in any fiscal year in the Low and Moderate Income Housing Fund, the amount equal to the difference between 30 percent of the taxes allocated to the agency pursuant to Section 33670 for each affected redevelopment project area and the amount actually deposited in the Low and Moderate Income Housing Fund for that fiscal year shall be established as a deficit in the Low and Moderate Income Housing Fund. Any new tax increment funds not encumbered pursuant to paragraph (2) or (4) shall be utilized to reduce or eliminate the deficit prior to entering into any new contracts, commitments, or indebtedness. The obligations imposed by this section are hereby declared to be an indebtedness of the redevelopment project to which they relate, payable from taxes allocated to the agency pursuant to Section 33670 and, notwithstanding any other provision of law, shall constitute an indebtedness of the agency with respect to the redevelopment project, and the agency shall continue to receive allocations of taxes pursuant to Section 33670 until the deficit is paid in full.
(h) An agency may not amend its redevelopment plan pursuant to this section unless the agency first adopts a resolution that finds, based on substantial evidence, all of the following:
(1) The community has adopted a housing element that the department has determined pursuant to Section 65585 of the Government Code to be in substantial compliance with the requirements of Article 10.6 (commencing with Section 65580) of Chapter 3 of Division 1 of Title 7 of the Government Code, or if applicable, an eligible city or county within the jurisdiction of the San Diego Association of Governments has adopted a self-certification of compliance with its adopted housing element pursuant to Section 65585.1 of the Government Code.
(2) During the three fiscal years prior to the year in which the amendment is adopted, the agency has not been included in the report sent by the Controller to the Attorney General pursuant to subdivision (b) of Section 33080.8 as an agency that has a “major violation” pursuant to Section 33080.8.
(3) After a written request by the agency and provision of the information requested by the department, the department has issued a letter to the agency, confirming that the agency has not accumulated an excess surplus in its Low and Moderate Income Housing Fund. As used in this section, “excess surplus” has the same meaning as that term is defined in Section 33334.12. The department shall develop a methodology to collect information required by this section. Information requested by the department shall include a certification by the agency’s independent auditor on the status of excess surplus and submittal of data for the department to verify the status of excess surplus. The independent auditor shall make the required certification based on the Controller’s office guidelines which shall include the methodology prescribed by the department pursuant to subparagraph (D) of paragraph (3) of subdivision (g) of Section 33334.12. If the department does not respond to the written request of the agency for this determination within 90 days after receipt of the written request, compliance with this requirement shall be deemed confirmed.
(i) Each redevelopment plan that has been adopted prior to January 1, 1976, that is amended pursuant to subdivision (a) shall also be amended at the same time to make subdivision (b) of Section 33413 applicable to the redevelopment plan in accordance with paragraph (1) of subdivision (d) of Section 33413.
(j) The amendment to the redevelopment plan authorized pursuant to this section shall be made by ordinance pursuant to Article 12 (commencing with Section 33450). The ordinance shall be subject to referendum as prescribed by law for ordinances of the legislative body.
(k) This section shall not apply to a project area that retains its eligibility to incur indebtedness and receive tax increment revenues pursuant to Section 33333.7.
(l) The limitations established in the ordinance adopted pursuant to this section shall not be applied to limit allocation of taxes to an agency to the extent required to comply with Section 33333.8. In the event of a conflict between these limitations and the obligations under Section 33333.8, the limitation established in the ordinance shall be suspended pursuant to Section 33333.8.

SEC. 8.

 Section 33334.1 of the Health and Safety Code is repealed.
33334.1.

If the plan authorizes the issuance of bonds to be repaid in whole or in part from the allocation of taxes pursuant to Section 33670, the plan shall establish a limit on the amount of bonded indebtedness which can be outstanding at one time without an amendment of the plan. This section shall apply only to redevelopment plans adopted on or after October 1, 1976.

SEC. 9.

 Section 33334.1 is added to the Health and Safety Code, to read:

33334.1.
 (a) A redevelopment plan that states a limit on the amount of bonded indebtedness that can be outstanding at any one time, or a limit on the total amount of bonded indebtedness that may be incurred, may be amended to eliminate one or both of those limits by adoption of an ordinance by the legislative body. In adopting this ordinance, neither the legislative body nor the agency is required to comply with Section 33354.6, Article 12 (commencing with Section 33450), or any other provision of this part relating to the amendment of redevelopment plans. If an ordinance is adopted to eliminate the limit on the amount of bonded indebtedness that can be outstanding at any one time, the elimination of the limit shall apply irrespective of the agency previously exceeding the established limit on the amount of bonded indebtedness that can be outstanding at any one time.
(b) The adoption of an ordinance eliminating the limit on the amount of bonded indebtedness that can be outstanding at any one time shall act to nullify any prior judicial determination that the agency improperly exceeded the amount of bonded indebtedness that can be outstanding at any one time. If the ordinance is adopted, the limits eliminated by the ordinance shall also act to eliminate the limits set forth in any agreement between the agency and an affected taxing agency, as defined in Section 33353.2, including, but not limited to, agreements entered into pursuant to Section 33401 or 33676, as those sections existed prior to January 1, 1994, that set or purport to set a limit on the amount of bonded indebtedness that can be outstanding at any one time or in total.

SEC. 10.

 Section 33492.13 of the Health and Safety Code is amended to read:

33492.13.
 (a) A redevelopment plan, adopted pursuant to this chapter and containing the provisions set forth in Section 33670, shall contain all of the following limitations:
(1) A limitation on the number of dollars of taxes which may be divided and allocated to the redevelopment agency pursuant thereto. Taxes shall not be divided and shall not be allocated to the redevelopment agency beyond this limitation, except by amendment of the redevelopment plan pursuant to Section 33354.6, or as necessary to comply with subdivision (a) of Section 33333.8.
(2) (A) The time limit on the establishing of loans, advances, and indebtedness to be paid with the proceeds of property taxes received pursuant to Section 33670 to finance in whole or in part the redevelopment project, which may not exceed 20 years from the date the county auditor certifies pursuant to Section 33492.9, except by amendment of the redevelopment plan as authorized by subparagraph (B). The loans, advances, or indebtedness may be repaid over a period of time longer than the time limit as provided in this section. No loans, advances, or indebtedness to be repaid from the allocation of taxes shall be established or incurred by the agency beyond this time limitation, except as necessary to comply with subdivision (a) of Section 33333.8.
(B) The time limitation established by subparagraph (A) may be extended only by amendment of the redevelopment plan after the agency finds, based on substantial evidence, that (i) substantial blight remains within the project area; (ii) this blight cannot be eliminated without the establishment of additional debt; and (iii) the elimination of blight cannot reasonably be accomplished by private enterprise acting alone or by the legislative body’s use of financing alternatives other than tax increment financing. However, this amended time limitation may not exceed 30 years from the date the county auditor certifies pursuant to Section 33492.9, except as necessary to comply with subdivision (a) of Section 33333.8.
(3) A time limit, not to exceed 30 years from the date the county auditor certifies pursuant to Section 33492.9, on the effectiveness of the redevelopment plan. After the time limit on the effectiveness of the redevelopment plan, the agency shall have no authority to act pursuant to the redevelopment plan except to pay previously incurred indebtedness, comply with subdivision (a) of Section 33333.8, and enforce existing covenants or contracts.
(4) A time limit, not to exceed 45 years from the date the county auditor certifies pursuant to Section 33492.9, to repay indebtedness with the proceeds of property taxes received pursuant to Section 33670. After the time limit established pursuant to this paragraph, an agency may not receive property taxes pursuant to Section 33670, except as necessary to comply with subdivision (a) of Section 33333.8.
(5) The limitations contained in a redevelopment plan adopted pursuant to this section shall not be applied to limit allocation of taxes to an agency to the extent required to comply with Section 33333.8. In the event of a conflict between these limitations and the obligations under Section 33333.8 the limitation established in the ordinance shall be suspended pursuant to Section 33333.8.
(b) (1) A redevelopment plan, adopted pursuant to this chapter, that does not contain the provisions set forth in Section 33670 shall contain the limitations in paragraph (2).
(2) A time limit, not to exceed 12 years from the date the county auditor certifies pursuant to Section 33492.9, for commencement of eminent domain proceedings to acquire property within the project area. This time limitation may be extended only by amendment of the redevelopment plan.
(c) (1) Notwithstanding subdivision (a), and provided the agency has not timely adopted the resolution described in paragraph (1) of subdivision (b) of Section 33681.16, all of the following provisions shall apply to a redevelopment project for which a final plan was adopted under this chapter but prior to January 1, 2010, provided that the time limit on the effectiveness of the redevelopment plan was not reached prior to January 1, 2010, and an amendment to a redevelopment plan that added territory and was adopted prior to January 1, 2010, provided that the time limit on the effectiveness of the amendment was not reached prior to January 1, 2010:
(A) The limitation set forth in paragraph (1) of subdivision (a) shall not apply.
(B) The time limit required under paragraph (2) of subdivision (a) shall not apply.
(C) The time limit required under paragraph (3) of subdivision (a) is extended for an additional 40 years, unless the agency has adopted the resolution described in subparagraph (A) of paragraph (2) of subdivision (b) of Section 33681.16 in which case the additional 40-year period shall be reduced in accordance with subparagraph (B) of paragraph (2) of subdivision (b) of Section 33681.16.
(D) The time limit required under paragraph (4) of subdivision (a) shall be 10 years after the termination of the effectiveness of the redevelopment plan, as extended pursuant to subparagraph (C). After the expiration of this time limit, the agency shall not receive property taxes pursuant to Section 33670, except as otherwise necessary to comply with subdivision (a) of Section 33333.8.
(2) Paragraph (1) shall apply notwithstanding any term, provision, or condition set forth in any agreement between the agency and an affected taxing agency, as defined in Section 33353.2, that sets or purports to set (A) more restrictive time limits on the redevelopment project than the limits set forth in paragraph (1); (B) any limit on the amount of property tax increment an agency may be allocated or may receive; or (C) any limit on the amount of bonded indebtedness of the agency that may be outstanding at any one time or in total.
(3) The legislative body shall adopt an ordinance conforming the applicable redevelopment plan to the requirements of this subdivision. In adopting this ordinance, neither the legislative body nor the agency is required to comply with Section 33354.6, Article 12 (commencing with Section 33450), or any other provision of this part relating to the amendment of redevelopment plans. This subdivision shall be effective as to the applicable redevelopment plan or amendment that added territory, notwithstanding the failure of the legislative body to adopt the ordinance described in this paragraph.

SEC. 11.

 Section 33492.85 of the Health and Safety Code is amended to read:

33492.85.
 (a) A redevelopment plan for March Air Force Base, adopted pursuant to this chapter and containing the provisions set forth in Section 33670, shall contain all of the following limitations:
(1) (A) A time limit on the establishing of loans, advances, and indebtedness to be paid with the proceeds of property taxes received pursuant to Section 33670 to finance in whole or in part the redevelopment project, which may not exceed 20 years from the date the county auditor certifies pursuant to Section 33492.9, except by amendment of the redevelopment plan as authorized by subparagraph (B). The loans, advances, or indebtedness may be repaid over a period of time longer than the time limit as provided in this section. No loans, advances, or indebtedness to be repaid from the allocation of taxes shall be established or incurred by the agency beyond this time limitation.
(B) The time limitation established by subparagraph (A) may be extended only by amendment of the redevelopment plan after the agency finds, based on substantial evidence, that (i) substantial blight remains within the project area; (ii) this blight cannot be eliminated without the establishment of additional debt; and (iii) the elimination of blight cannot reasonably be accomplished by private enterprise acting alone or by the legislative body’s use of financing alternatives other than tax increment financing. However, this amended time limitation may not exceed 30 years from the date the county auditor certifies pursuant to Section 33492.9.
(2) A time limit, not to exceed 30 years from the date the county auditor certifies pursuant to Section 33492.9, on the effectiveness of the redevelopment plan. After the time limit on the effectiveness of the redevelopment plan, the agency shall have no authority to act pursuant to the redevelopment plan except to pay previously incurred indebtedness and enforce existing covenants or contracts.
(3) A time limit, not to exceed 45 years from the date the county auditor certifies pursuant to Section 33492.9, to repay indebtedness with the proceeds of property taxes received pursuant to Section 33670. After the time limit established pursuant to this paragraph, an agency may not receive property taxes pursuant to Section 33670.
(b) (1) A redevelopment plan, adopted pursuant to this chapter, that does not contain the provisions set forth in Section 33670 shall contain the limitations in paragraph (2).
(2) A time limit, not to exceed 12 years from the date the county auditor certifies pursuant to Section 33492.9, for commencement of eminent domain proceedings to acquire property within the project area. This time limitation may be extended only by amendment of the redevelopment plan.
(c) (1) Notwithstanding subdivision (a), if, as of January 1, 2010, and provided the agency has not timely adopted the resolution described in paragraph (1) of subdivision (b) of Section 33681.16, a redevelopment plan for March Air Force Base has been adopted pursuant to this chapter, all of the following provisions shall apply to the redevelopment plan:
(A) The time limit required under paragraph (1) of subdivision (a) shall not apply.
(B) The time limit required under paragraph (2) of subdivision (a) is extended for an additional 40 years, unless the agency has adopted the resolution described in subparagraph (A) of paragraph (2) of subdivision (b) of Section 33681.16 in which case the additional 40-year period shall be reduced in accordance with subparagraph (B) of paragraph (2) of subdivision (b) of Section 33681.16.
(C) The time limit required under paragraph (3) of subdivision (a) shall be 10 years after the termination of the effectiveness of the redevelopment plan, as extended pursuant to subparagraph (B). After the expiration of this time limit, the agency shall not receive property taxes pursuant to Section 33670.
(2) Paragraph (1) shall apply notwithstanding any term, provision, or condition set forth in any agreement between the agency and an affected taxing agency, as defined in Section 33353.2, including, but not limited to, any agreement under subdivision (c) of Section 33492.86, that sets or purports to set (A) more restrictive time limits on the redevelopment project than the limits set forth in paragraph (1); (B) any limit on the amount of property tax increment an agency may be allocated or may receive; or (C) any limit on the amount of bonded indebtedness of the agency that may be outstanding at any one time or in total.
(3) The legislative body shall adopt an ordinance conforming the applicable redevelopment plan to the requirements of this subdivision. In adopting this ordinance, neither the legislative body nor the agency is required to comply with Section 33354.6, Article 12 (commencing with Section 33450), or any other provision of this part relating to the amendment of redevelopment plans. This subdivision shall be effective as to the applicable redevelopment plan, notwithstanding the failure of the legislative body to adopt the ordinance described in this paragraph.

SEC. 12.

 Section 33681.16 is added to the Health and Safety Code, to read:

33681.16.
 (a) For purposes of this section, the following terms have the following meanings:
(1) “Applicable agency” means a redevelopment agency that receives property tax increment revenue derived from an “applicable redevelopment project” as that term is defined in paragraph (2), provided the applicable agency has not timely adopted the resolution specified in paragraph (1) of subdivision (b).
(2) “Applicable redevelopment project” means a redevelopment project described in paragraph (1) of subdivision (f) of Section 33333.2, paragraph (1) of subdivision (h) of Section 33333.4, paragraph (1) of subdivision (k) of Section 33333.6, paragraph (1) of subdivision (c) of Section 33492.13, or paragraph (1) of subdivision (c) of Section 33492.85.
(3) “Agency transfer payment” means an amount equal to 10 percent of the tax increment revenue after the amount required to be deposited in the Low and Moderate Income Housing Fund has been deducted, that is allocated to the applicable agency for the fiscal year that is derived from the applicable redevelopment project.
(4) “County auditor” means the county auditor or other officer responsible for the allocation of tax revenues pursuant to Sections 33607.5, 33607.7, and 33670.
(b) (1) This section shall not apply to an applicable redevelopment project if the applicable agency, by adoption of a resolution within 45 days following the effective date of the act that added this section, declines the provisions of paragraph (1) of subdivision (f) of Section 33333.2, paragraph (1) of subdivision (h) of Section 33333.4, paragraph (1) of subdivision (k) of Section 33333.6, paragraph (1) of subdivision (c) of Section 33492.13, or paragraph (1) of subdivision (c) of Section 33492.85 with respect to the applicable redevelopment project. If the applicable agency timely adopts the resolution it shall forward a certified copy of the resolution to the county auditor within 30 days following its adoption.
(2) (A) The applicable agency may elect to postpone the commencement of the agency transfer payment described in subdivision (c) for an applicable redevelopment project for up to five fiscal years by adoption of a resolution within 45 days following the effective date of the act that added this section, provided that the resolution sets the fiscal year, not later than the 2014–15 fiscal year, in which the agency shall commence the agency transfer payment. If the applicable agency timely adopts the resolution it shall forward a certified copy of the resolution to the county auditor within 30 days following its adoption.
(B) If the agency adopts the resolution described in subparagraph (A), the extension on the effectiveness of the applicable redevelopment project set forth in subparagraph (B) of paragraph (1) or subdivision (f) of Section 33333.2, subparagraph (A) of paragraph (1) of subdivision (k) of Section 33333.6, subparagraph (C) of paragraph (1) of subdivision (c) of Section 33492.13, or subparagraph (B) of paragraph (1) of subdivision (c) of Section 33492.85, shall be reduced by three years for each fiscal year the agency has elected to postpone commencement of the agency transfer payment.
(c) (1) For the 2009–10 fiscal year, and for each fiscal year thereafter during the time the applicable agency receives tax increment revenue from the applicable redevelopment project, the county auditor shall determine the agency transfer payment for the fiscal year for the agency.
(2) On or before December 15 of each fiscal year, the county auditor shall notify the agency in writing of the agency transfer payment and shall retain that amount in trust to fulfill the agency’s obligation for the agency transfer payment for the fiscal year. The agency may dispute the amount calculated by the county auditor and shall be entitled to pursue all available remedies if that dispute is not resolved.
(3) On or before March 1 of each fiscal year, the county auditor shall deposit the agency transfer payment determined pursuant to paragraph (2) into the county’s Educational Revenue Augmentation Fund created pursuant to Article 3 (commencing with Section 97) of Chapter 6 of Part 0.5 of Division 1 of the Revenue and Taxation Code.
(4) On or before March 15 of each fiscal year, the county auditor shall transfer the agency transfer payment from the county’s Educational Revenue Augmentation Fund to the ERAF account of the California Infrastructure and Economic Development Bank established pursuant to Article 6.8 (commencing with Section 63048.100) of Chapter 2 of Division 1 of Title 6.7 of the Government Code.
(d) (1) The agency transfer payments shall be subordinate to the lien of any pledge of collateral securing the payment of the principal or interest on any bonds, loans, notes, or other indebtedness of the applicable agency, including, but not limited to, bonds, loans, notes, or other indebtedness of that agency secured by the pledge of taxes allocated to the agency from the applicable redevelopment project pursuant to Section 33670, issued, entered into, or otherwise incurred at any time.
(2) Notwithstanding paragraph (1), an applicable agency, during any period it is delinquent in making any agency transfer payment, shall not be entitled to issue, enter into, or otherwise incur bonds, loans, notes, or other indebtedness, including, but not limited to, bonds, loans, notes, or other indebtedness secured by a pledge of taxes allocated to that agency from the applicable redevelopment project pursuant to Section 33670.
(3) No bonds shall be issued by the applicable agency on a parity basis with the bonds issued prior to the effective date of the act that added this section unless the coverage ratio of such parity bonds is equal to or greater than (A) 115 percent or (B) the coverage ratio required by such bonds issued prior to the effective date of the act that added this section. As used herein, the term “coverage ratio” means the ratio of the average annual tax increment revenue received by the applicable agency for the preceding three-year period to the sum of the maximum annual debt service on the bonds issued prior to the effective date of the act that added this section, plus the maximum annual debt service on the parity bonds.
(e) The payment obligations imposed by this section, including amounts owed, if any, created under this section, are hereby declared to be an indebtedness of the redevelopment project to which they relate, payable from taxes allocated to the agency pursuant to Section 33670, and shall constitute an indebtedness of the agency with respect to the redevelopment project until paid in full.
(f) The Legislature, in enacting this section, finds and declares that the agency transfer payment directly or indirectly assists in the financing or refinancing, in whole or in part, of the community’s redevelopment project pursuant to Section 16 of Article XVI of the California Constitution.
(g) (1) If the agency determines it will be unable to meet its financial obligations for the fiscal year because of the agency transfer payment, the agency, notwithstanding Sections 33334.2, 33334.3, and 33334.6, and any other law, may borrow up to 50 percent of the amount allocated to the Low and Moderate Income Housing Fund pursuant to Sections 33334.2, 33334.3, and 33334.6 during that fiscal year in order to meet the agency’s financial obligations, unless an executed contract exists that would be impaired if the agency reduced the amount allocated to the Low and Moderate Income Housing Fund pursuant to the authority of this subdivision.
(2) As a condition of borrowing pursuant to this subdivision, an agency shall make a finding that there are insufficient other moneys to meet the agency’s financial obligations. Funds borrowed from the Low and Moderate Income Housing Fund pursuant to this subdivision shall be repaid by the agency in full within 10 years following the date on which the county auditor deposits the agency transfer payment in the county’s Educational Revenue Augmentation Fund pursuant to subdivision (c).
(h) (1) As an alternative to, or in addition to, an agency’s authority to borrow from the Low and Moderate Income Housing Fund, as set forth in subdivision (g), if the agency is unable to meet its financial obligations for the fiscal year because of the agency transfer payment, the agency may, subject to paragraph (3), enter into an agreement with the legislative body by February 15 of the applicable fiscal year, to fund those amounts necessary for the agency to meet its financial obligations for the fiscal year.
(2) The moneys advanced to the agency pursuant to paragraph (1) shall be an indebtedness incurred by the agency to finance a portion of a redevelopment project within the meaning of Section 16 of Article XVI of the California Constitution. This indebtedness shall be payable from tax revenues allocated to the agency pursuant to Section 33670, and any other funds received by the agency. The obligations imposed by paragraph (1) shall remain an indebtedness of the agency to the legislative body until paid in full, or until the agency and the legislative body otherwise agree.
(3) The agreement described in paragraph (1) shall be subject to those terms and conditions specified in a written agreement between the legislative body and the agency.
(i) The county auditor is authorized to charge the agency for all actual, documented, and reasonable costs incurred in calculating the agency transfer payment and affecting the transfer to the Educational Revenue Augmentation Fund in accordance with Section 95.3 of the Revenue and Taxation Code, and other expenses of the county auditor related to implementing the act adding this section.

SEC. 13.

 Section 33681.17 is added to the Health and Safety Code, to read:

33681.17.
 (a) For the purposes of this section, an “authorized issuer” is limited to a joint powers entity created pursuant to Article 1 (commencing with Section 6500) of Chapter 5 of Division 7 of Title 1 of the Government Code that consists of no less than 100 local agencies issuing bonds pursuant to the Marks-Roos Local Bond Pooling Act of 1985 (Article 4 (commencing with Section 6584) of Chapter 5 of Division 7 of Title 1 of the Government Code).
(b) An authorized issuer may issue bonds, notes, or other evidence of indebtedness to provide net proceeds to make one or more loans to one or more redevelopment agencies to be used by the agency to fund its obligations in the event of a shortfall caused by the obligation of the agency to fund the agency transfer payment to the Educational Revenue Augmentation Fund, as required under Section 33681.16.
(c) With the prior approval of the legislative body by adoption of a resolution by a majority of that body, reciting that a first lien on the property tax revenues allocated to the legislative body will be created in accordance with subdivision (e), an agency may enter into an agreement with an authorized issuer issuing bonds pursuant to subdivision (b) to repay a loan used to meet the agency’s obligations, notwithstanding the expiration of the time limit on repayment of indebtedness. Any agency funds used to repay a loan entered into pursuant to this section shall be deducted from the amount of property tax revenue deemed to have been received by the agency.
(d) A loan made pursuant to this section shall be repayable by the agency from any available funds of the agency not otherwise obligated for other uses, including, but not limited to, the agency transfer payment as defined in Section 33681.16, and shall be repayable by the agency on a basis subordinate to all existing and future obligations of the agency.
(e) To secure repayment of a loan to an agency made pursuant to this section, the trustee for the bonds issued to provide the funds to make the loan shall have a lien on the property tax revenues allocated to the legislative body pursuant to Chapter 6 (commencing with Section 95) of Part 0.5 of Division 1 of the Revenue and Taxation Code. This lien shall arise by operation of this section automatically upon the making of the loan without the need for any action on the part of any person. This lien shall be valid, binding, perfected, and enforceable against the legislative body, its successors, creditors, purchasers, and all others asserting rights in those property tax revenues, irrespective of whether those persons have notice of the lien, irrespective of the fact that the property tax revenues subject to the lien may be commingled with other property, and without the need for physical delivery, recordation, public notice, or any other act. This lien shall be a first priority lien on these property tax revenues. This lien shall not apply to any portion of the property taxes allocated to the agency, including, but not limited to, an allocation pursuant to Section 33670.

SEC. 14.

 Section 33683 of the Health and Safety Code is amended to read:

33683.
 For the purpose of calculating the amount that has been divided and allocated to the redevelopment agency to determine whether the limitation adopted pursuant to Section 33333.2 or 33333.4 or pursuant to agreement or court order has been reached, any payments made pursuant to subdivision (a) of Sections 33681, 33681.5, 33681.7, 33681.9, and 33681.12 or subdivision (d) of Sections 33681.8, 33681.10, 33682, and 33682.5 with property tax revenues shall be deducted from the amount of property tax dollars deemed to have been received by the agency. For the purpose of calculating the amount of taxes that has been divided and allocated to a redevelopment agency that makes the “agency transfer payment” pursuant to Section 33681.16, the amount of the agency transfer payment made by that agency shall be deducted from the amount of property tax dollars deemed to have been received by that agency.

SEC. 15.

 The Legislature finds and declares that Section 6, which is applicable only to the Redevelopment Agency of the City and County of San Francisco, and Section 11, which is applicable only to March Air Force Base, of this act are necessary and that a general law cannot be made applicable within the meaning of Section 16 of Article IV of the California Constitution because of the unique circumstances faced by the Redevelopment Agency of the City and County of San Francisco and the March Air Force Base.

SEC. 16.

 (a) (1) (A) The sections amended or added by this act, providing for the payment of redevelopment agency funds to the state and the extension of time for various actions of redevelopment agencies, shall become inoperative or will not become operative, as applicable, unless, on or before December 1, 2009, all of the following occur:
(i) A validation proceeding has been filed by the California Infrastructure and Economic Development Bank or the special purpose trust, as provided for in subdivision (d) of Section 63048.106 of the Government Code, to determine the validity of any of the issues included in subdivision (e) of Section 63048.106 of the Government Code, or any other matters affecting redevelopment agency requirements, processes, or procedures that are authorized by this act.
(ii) In response to the filing specified in clause (i), the superior court holds, or if the lower court ruling is appealed and upon review the Supreme Court holds, that Article 6.8 (commencing with Section 63048.100) of Chapter 2 of Division 1 of Title 6.7 of the Government Code and the other sections in this act are constitutional and that there is no legal bar to the securitization of the payments by redevelopment agencies to the state that are authorized in that article.
(B) The validation action is hereby authorized by this section and the venue shall be in the Sacramento Superior Court.
(2) In addition to paragraph (1), if the board of directors of the California Infrastructure and Economic Development Bank does not certify pursuant to subdivision (a) of Section 63048.110 that the State ERAF Account will receive the amount specified in that section, and Article 6.8 (commencing with Section 63048.100) of Chapter 2 of Division 1 of Title 6.7 of the Government Code thereupon becomes inoperative, this act shall become inoperative.
(b) If the sections amended or added by this act remain operative and in effect after December 1, 2009, a statute suspending subparagraph (A) of paragraph (1) of subdivision (a) of Section 25.5 of Article XIII of the California Constitution that was enacted by a statute enacted in a 2009–10 session of the Legislature shall become inoperative.
(c) If the sections amended or added by this act remain operative and in effect after December 1, 2009, the reduction of fuel tax subventions to local agencies pursuant to the 2009–10 Budget Act and statutes implementing that act shall cease, and subventions to local agencies that would have been made under the law as it existed on July 1, 2009, shall be repaid. The Director of Finance shall calculate the amount of the reduction that occurred prior to December 1, 2009, and the Controller shall transfer that amount from the Transportation Debt Service Fund to the Highway Users Tax Account. The amount transferred to the Highway Users Tax Account shall be transferred to cities, counties, and cities and counties, as that funding would have otherwise been allocated under the law as it existed on July 1, 2009.
(d) For purposes of preventing a duplicative transfer of tax increment revenues, if the sections amended or added by this act remain operative and in effect after December 1, 2009, the additions and changes to state law proposed by Assembly Bill 26 of the 2009-10 Fourth Extraordinary Session of the Legislature and Senate Bill 26 of the 2009-10 Fourth Extraordinary Session of the Legislature shall become inoperative on January 1, 2010.
(e) If the sections amended or added by this act remain operative and in effect after December 1, 2009, the Controller shall transfer from the State ERAF Account to the General Fund, by June 30, 2010, the amount determined by the Director of Finance to equal the amount the state will not receive pursuant to subdivisions (b), (c), and (d).

SEC. 17.

 This act shall not affect any transfer of property tax increment funds otherwise required to be made from a redevelopment agency to an Education Revenue Augmentation Fund pursuant to Chapter 6 (commencing with Section 33600) of Division 26 of the Health and Safety Code.

SEC. 18.

 (a) Except as provided in subdivision (b), the Legislature hereby finds and declares that the provisions of this act are interdependent on each other, and are therefore not severable. If any provisions of this act or its application is held invalid, that invalidity shall affect all other provisions or applications of this act and no other provision or application of this act shall be given effect.
(b) If this act becomes inoperative or invalid, the county auditor shall make adjustments by transferring or refunding the funds otherwise subject to the provision declared inoperative or invalid.

SEC. 19.

 The provisions of this act, except for Sections 1, 12, 16, 17, 18, 19, 20, 21, and 22 shall become operative on January 1, 2010.

SEC. 20.

 No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because a local agency or school district has the authority to levy service charges, fees, or assessments sufficient to pay for the program or level of service mandated by this act, within the meaning of Section 17556 of the Government Code.

SEC. 21.

 This act addresses the fiscal emergency declared by the Governor by proclamation on July 1, 2009, pursuant to subdivision (f) of Section 10 of Article IV of the California Constitution.

SEC. 22.

 This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the Constitution and shall go into immediate effect. The facts constituting the necessity are:
In order to meet the current and near-term financial requirements of the state, it is necessary that this act take effect immediately.
SECTION 1.

It is the intent of the Legislature to enact statutory changes relating to the Budget Act of 2009.

SEC. 2.

This act addresses the fiscal emergency declared by the Governor by proclamation on July 1, 2009, pursuant to subdivision (f) of Section 10 of Article IV of the California Constitution.