1400 K Street, Suite 400 Sacramento, California 95814 Phone: 916.658.8200 Fax: 916.658.8240 www.cacities.

.org June 27, 2012 To: All Senators and Assembly Members

From: Dan Carrigg, Legislative Director Re: AB 1484/SB 1024: Redevelopment Trailer Bill

REQUEST FOR A NO VOTE ON AB 1484/SB 1024, UNLESS LEAGUE AMENDMENTS ARE INSERTED After the Budget Committee hearing on AB 1484, the League prepared a set of reasonable amendments designed to address the most significant concerns for our cities. These amendments were drafted in a surgical manner that does not impair the states ability to collect revenues. Below is a summary of the amendments that would address the major concerns addressed by cities. We ask that concerned legislators NOT vote on these trailer bills unless the League amendments are inserted into the trailer bills. 1. Changes to July Cash Process: Successor agencies will still be required to make payments identified by county auditor. Timeframes are adjusted slightly from July 12th to July 16th to give agencies more time to make the payment. Agencies will also be allowed to pay under protest any contested amount that can be recovered as an enforceable obligation if the amount is later determined to be inaccurate. A successor agency can also make a partial payment if it makes findings as to why the remaining funds are unavailable, these findings can later be reviewed by the independent accountant, and penalties will be applied if the agency made unsubstantiated findings. The sales tax offset provision is removed. 2. Ensuring a True Safe Harbor: Clarifies that the Department of Finance cannot reject a loan repayment or the expenditure of bond proceeds approved by an oversight board for agencies that have received a finding of completion from DOF. Exempts loan repayment 20% set-aside for affordable housing if city makes finding that funds are needed to (1) maintain fiscal stability of general fund; (2) for essential services such as police or fire; or (3) repay restricted source of funding that doesnt allow use for affordable housing. 3. Removes Sales and Property Tax Clawback and DOF Second Guessing from Audit Provisions: The changes ensure that DOF cannot second guess the final outcome of the independent audit process and must respect the work of the independent auditor. Deletes the ability of DOF and county auditors to divert sales tax or property tax from cities. Provides an expedited process to get disputes into Court and authorizes penalties for agencies found by a Court to have violated the law. 4. Removes $10,000 Fines on ROPS Submittals: Language removes the ability of DOF to fine agencies for every day a ROPS submittal is late. This is completely unnecessary. Successor agencies are already highly motivated to submit approved ROPS (They dont get ANY funding without doing so). 5. Flexibility on Asset Management Plan: Language allows successor agencies to use the AB 26 asset disposal provisions rather than complete the plans authorized in the bill that may not be completed until January 2015. Some agencies do not have significant amounts of property; others are already in the process of selling properties that would result in an earlier financial benefit to all taxing entities.