REDEVELOPMENT
Legislative Updates
on Governor's Redevelopment
June 29, 2011
Today, June 29, 2011, the Governor signed AB X1 26 and AB X1 27. Both bills take effect immediately upon the Governor’s signature.
Under AB X1 26, redevelopment agencies are now prohibited from taking a number of actions, including incurring indebtedness, making loans, entering into or modifying contracts, and adopting or amending redevelopment plans. In addition, agencies are now subject to a number of responsibilities, including preserving all assets, minimizing all liabilities, and preserving all records.
Redevelopment agencies that do not comply with the provisions of AB X1 27 will be dissolved as of October 1, 2011. Except for those provisions of the Redevelopment Law that are repealed, restricted, or revised by AB X1 26, all authority, power, and obligations previously vested with agencies pursuant to the Redevelopment Law will vest in successor agencies upon such dissolution.
Under AB X1 27, a redevelopment agency may resume its activities (i.e., be exempted from the provisions of AB X1 26 and thus continue to exist) upon the city’s adoption of an ordinance stating its participation in the Alternative Voluntary Redevelopment Program, which requires the city to make certain specified annual payments to the county auditor for distribution to schools, fire protection agencies, and transit agencies beginning in fiscal year 2011-2012. The city must adopt this ordinance on or before November 1, 2011.
If you have any questions about this update, please contact Robin D. Harris at 213.626.8484 or rharris@rwglaw.com, or Katrina C. Gonzales at 213.626.8484 or kgonzales@rwglaw.com, or Trisha Ortiz at 415.421.8484 or tortiz@rwglaw.com.
June 28, 2011
Tonight, the State Senate and the State Assembly passed SB 87, the successor bill to SB 69 and AB 98, the budget bills that were vetoed by the Governor on June 16, 2011.
Although SB 87 makes numerous changes to appropriations and expenditures in the previous budget bills, it maintains the $1.7 billion appropriation from redevelopment agencies. AB X1 26 and AB X1 27, the budget trailer bills passed by the State Legislature on June 15, 2011, contain the statutory provisions implementing this appropriation.
AB X1 26 and AB X1 27 have not yet been sent to the Governor at this time. We anticipate that they will accompany SB 87 once this new budget bill is presented to the Governor.
We will continue to closely monitor the Governor’s and the Legislature’s activities regarding the State Budget. If you have any questions about this update, please contact Robin D. Harris at 213.626.8484 or rharris@rwglaw.com, or Katrina C. Gonzales at 213.626.8484 or kgonzales@rwglaw.com, or Trisha Ortiz at 415.421.8484 or tortiz@rwglaw.com.
June 22, 2011
Our office has prepared a summary of AB X1 26 and AB X1 27, the two budget trailer bills that were passed by the State Legislature on June 15, 2011. We have attached the summary for your information and review.
AB X1 26 accomplishes the elimination of redevelopment agencies, while AB X1 27 establishes a voluntary program under which a redevelopment agency may remain in existence if the city makes specified monetary contributions to the county auditor for distribution to schools, fire protection agencies, and transit agencies beginning in fiscal year 2011-2012.
The bills are not effective until signed by the Governor. As of this writing, the bills have not yet been presented to the Governor for his signature.
If you have any questions about the summary, please do not hesitate to contact Robin D. Harris at 213.626.8484 or rharris@rwglaw.com, or Trisha Ortiz at 415.421.8484 or tortiz@rwglaw.com.
June 16, 2011
Today, June 16, 2011, Governor Brown vetoed AB 98, the 2011-2012 Budget Bill that was passed by the State Legislature yesterday.
In a letter to members of the Legislature, the Governor stated that the package does not present a balanced solution and “continues big deficits for years to come and adds billions of dollars of new debt.” Further, the package contains “legally questionable maneuvers, costly borrowing, and unrealistic savings.” The letter is available at http://gov.ca.gov/docs/SB_69_and_AB_98_Veto_Message_6-16-11.pdf.
ABX 1 X and ABX 1 27 have not yet been sent to the Governor at this time. However, Senate President Pro Tem Steinberg stated in a press conference this morning that he expects the budget trailer bills, including ABX 1 26 and ABX 1 27, to also be vetoed if they are sent to the Governor.
The link we provided to ABX 1 27 has been updated since yesterday. The bill, as passed by the State Assembly and the State Senate, may now be viewed at http://leginfo.ca.gov/pub/11-12/bill/asm/ab_0001-0050/abx1_27_bill_20110615_amended_sen_v97.pdf
We will continue to closely monitor the Governor’s and the Legislature’s activities regarding the State Budget. If you have any questions about this update, please contact Robin D. Harris at 213.626.8484 or rharris@rwglaw.com, or Katrina C. Gonzales at 213.626.8484 or kgonzales@rwglaw.com, or Trisha Ortiz at 415.421.8484 or tortiz@rwglaw.com.
June 15, 2011
Today, June 15, 2011, the State Senate and State Assembly passed AB 26X and AB 27X. AB 26X accomplishes the Governor’s proposal for eliminating redevelopment agencies, while AB 27X establishes a voluntary program under which a redevelopment agency may remain in existence if it makes certain specified annual payments to the county auditor for distribution to schools, fire protection agencies, and transit agencies beginning in fiscal year 2011-2012. These bills, if signed by the Governor, will take effect immediately as they make appropriations related to AB 98, the 2011-2012 Budget Bill that was also passed by both houses today.
Upon the Governor’s signature, redevelopment agencies will immediately be prohibited from taking a number of actions, including incurring indebtedness, making loans, entering into or modifying contracts, and adopting or amending redevelopment plans. In addition, agencies will immediately be subject to a number of responsibilities, including preserving all assets, minimizing all liabilities, and preserving all records.
AB 26X is available at http://leginfo.ca.gov/pub/11-12/bill/asm/ab_0001-0050/abx1_26_bill_20110614_amended_sen_v98.pdf.
AB 27X is available at http://leginfo.ca.gov/pub/11-12/bill/asm/ab_0001-0050/abx1_27_bill_20110614_amended_sen_v98.pdf.
We are in the process of reviewing these bills and will provide a summary analyzing their major provisions shortly.
If you have any questions about this update, please contact Robin D. Harris at 213.626.8484 or rharris@rwglaw.com, or Katrina C. Gonzales at 213.626.8484 or kgonzales@rwglaw.com, or Trisha Ortiz at 415.421.8484 or tortiz@rwglaw.com.
May 16, 2011
At a press conference this morning, May 16, 2011, the Governor released his revised 2011-2012 Budget (the “May Revision”). The May Revision includes updated revenue and spending forecasts, which reflect economic data for the early months of 2011, as well as adjustments to proposed tax extensions and borrowing levels.
The May Revision keeps the framework of the Governor’s previous budget proposals intact, including his proposal to eliminate redevelopment agencies.
The full summary of the May Revision is available at: http://www.ebudget.ca.gov/pdf/Revised/BudgetSummary/FullBudgetSummary.pdf
We will continue to closely monitor the Legislature’s activities regarding the Governor’s redevelopment proposal and alternative proposals aimed at reformation of redevelopment in lieu of its elimination.
If you have any questions about this update, please contact Robin D. Harris at 213.626.8484 or rharris@rwglaw.com, or Katrina C. Gonzales at 213.626.8484 or kgonzales@rwglaw.com, or Trisha Ortiz at 415.421.8484 or tortiz@rwglaw.com.
April 1, 2011
On behalf of Richards, Watson & Gershon, Trisha Ortiz and Katrina C. Gonzales monitored today’s, April 1, 2011, legislative activities with respect to the Governor’s proposed 2011-2012 Budget.
Neither the State Assembly nor the State Senate convened today. Members of both houses remain on call through the weekend. Both houses are scheduled to convene on Monday, April 4, 2011, with the Assembly meeting at noon and the Senate at 1:00 p.m.
Although we will continue to closely monitor the Legislature’s activities regarding the Governor’s redevelopment proposal, we will no longer be sending our daily updates. Instead, we will provide you with an update only when that day’s legislative activities warrant reporting.
If you have any questions about this update, please contact Robin D. Harris at 213.626.8484 or rharris@rwglaw.com, or Trisha Ortiz at 415.421.8484 or tortiz@rwglaw.com, or Katrina C. Gonzales at 213.626.8484 or kgonzales@rwglaw.com.
March 31, 2011
On behalf of Richards, Watson & Gershon, Trisha Ortiz and Katrina C. Gonzales monitored today’s, March 31, 2011, legislative activities with respect to the Governor’s proposed 2011-2012 Budget.
Neither the State Assembly nor the State Senate took up AB 101 or SB 77 in their respective floor sessions. Both houses are scheduled to convene on Monday, April 4, 2011, with the Assembly meeting at noon and the Senate at 1:00 p.m.
We will continue to closely monitor the Legislature’s activities regarding the Governor’s redevelopment proposal.
If you have any questions about this update, please contact Robin D. Harris at 213.626.8484 or rharris@rwglaw.com, or Trisha Ortiz at 415.421.8484 or tortiz@rwglaw.com, or Katrina C. Gonzales at 213.626.8484 or kgonzales@rwglaw.com.
March 30, 2011
On behalf of Richards, Watson & Gershon, Trisha Ortiz and Katrina C. Gonzales monitored today’s, March 30, 2011, legislative activities with respect to the Governor’s proposed 2011-2012 Budget.
Neither the State Assembly nor the State Senate convened today. Both houses are scheduled to convene tomorrow, March 31, 2011, at 9:00 a.m.
We will continue to closely monitor the Legislature’s activities regarding the Governor’s redevelopment proposal.
If you have any questions about this update, please contact Robin D. Harris at 213.626.8484 or rharris@rwglaw.com, or Trisha Ortiz at 415.421.8484 or tortiz@rwglaw.com, or Katrina C. Gonzales at 213.626.8484 or kgonzales@rwglaw.com.
March 29, 2011 - p.m.
On behalf of Richards, Watson & Gershon, Trisha Ortiz and Katrina C. Gonzales monitored today’s, March 29, 2011, legislative activities with respect to the Governor’s proposed 2011-2012 Budget.
Neither the State Assembly nor the State Senate took up AB 101 or SB 77 in their respective floor sessions. Both houses are scheduled to convene on Thursday, March 31, 2011, at 9:00 a.m.
We will continue to closely monitor the Legislature’s activities regarding the Governor’s redevelopment proposal.
If you have any questions about this update, please contact Robin D. Harris at 213.626.8484 or rharris@rwglaw.com, or Trisha Ortiz at 415.421.8484 or tortiz@rwglaw.com, or Katrina C. Gonzales at 213.626.8484 or kgonzales@rwglaw.com.
March 29, 2011 - a.m.
Assembly Bill 101 (AB 101) and Senate Bill 77 (SB 77), introduced as placeholder bills on January 10, 2011, were amended on March 15, 2011 to reflect legislation implementing the Governor’s redevelopment proposal (the “Proposed Legislation”). The Proposed Legislation supersedes the draft legislation circulated by the Department of Finance (the “DOF”) on February 23, 2011.
The Proposed Legislation differs from the DOF’s draft legislation. Our office has prepared a summary of the notable differences between the Proposed Legislation and DOF’s draft legislation. Our summary reflects the Proposed Legislation as amended on March 15, 2011. We have attached our summary for your information and review.
The Senate and Assembly are scheduled to convene floor sessions today, March 29, 2011, and may consider the Proposed Legislation. We will continue to closely monitor the Legislature’s activities regarding the Proposed Legislation and other legislative developments related to the Governor’s redevelopment proposal.
If you have any questions about this update, please contact Robin D. Harris at 213.626.8484 or rharris@rwglaw.com, or Trisha Ortiz at 415.421.8484 or tortiz@rwglaw.com, or Katrina C. Gonzales at 213.626.8484 or kgonzales@rwglaw.com.
March 28, 2011
On behalf of Richards, Watson & Gershon, Trisha Ortiz and Katrina C. Gonzales monitored today’s, March 28, 2011, legislative activities with respect to the Governor’s proposed 2011-2012 Budget.
Neither the State Assembly nor the State Senate convened today. Both houses are scheduled to convene tomorrow, March 29, 2011, with the Assembly meeting at noon and the Senate at 2:00 p.m.
We will continue to closely monitor the Legislature’s activities regarding the Governor’s redevelopment proposal.
If you have any questions about this update, please contact Robin D. Harris at 213.626.8484 or rharris@rwglaw.com, or Trisha Ortiz at 415.421.8484 or tortiz@rwglaw.com, or Katrina C. Gonzales at 213.626.8484 or kgonzales@rwglaw.com.
March 25, 2011
On behalf of Richards, Watson & Gershon, Trisha Ortiz and Katrina C. Gonzales monitored today’s, March 25, 2011, legislative activities with respect to the Governor’s proposed 2011-2012 Budget.
Although the State Assembly and the State Senate convened today, neither house took up AB 101 or SB 77. Members of both houses remain on call through the weekend. The Assembly and the Senate are scheduled to convene on Tuesday, March 29, 2011, at noon and 2:00 p.m., respectively.
We will continue to closely monitor the Legislature’s activities regarding the Governor’s redevelopment proposal.
If you have any questions about this update, please contact Robin D. Harris at 213.626.8484 or rharris@rwglaw.com, or Trisha Ortiz at 415.421.8484 or tortiz@rwglaw.com, or Katrina C. Gonzales at 213.626.8484 or kgonzales@rwglaw.com.
March 24, 2011
On behalf of Richards, Watson & Gershon, Trisha Ortiz and Katrina C. Gonzales monitored today’s, March 24, 2011, legislative activities with respect to the Governor’s proposed 2011-2012 Budget.
Although the State Senate convened today, it did not take up AB 101. The Senate is scheduled to convene again tomorrow, March 25, 2011, at 9:00 a.m.
The State Assembly did not convene today. The Assembly is also scheduled to convene tomorrow at 9:00 a.m., with members remaining on call through the weekend as budget negotiations are expected to continue.
At a press conference this afternoon, the Governor signed into law 13 other trailer bills unrelated to redevelopment that are necessary to implement his proposed Budget. These bills address at least $8 billion of the State’s $26.6 billion deficit.
We will continue to closely monitor the Legislature’s activities regarding the Governor’s redevelopment proposal.
If you have any questions about this update, please contact Robin D. Harris at 213.626.8484 or rharris@rwglaw.com, or Trisha Ortiz at 415.421.8484 or tortiz@rwglaw.com, or Katrina C. Gonzales at 213.626.8484 or kgonzales@rwglaw.com.
March 23, 2011
On behalf of Richards, Watson & Gershon, Trisha Ortiz and Katrina C. Gonzales monitored today’s, March 23, 2011, legislative activities with respect to the Governor’s proposed 2011-2012 Budget.
Neither the State Assembly nor the State Senate convened today. Members of both houses remain on call through the rest of the week as budget negotiations are expected to continue.
We will continue to closely monitor the Legislature’s activities regarding the Governor’s redevelopment proposal.
If you have any questions about this update, please contact Robin D. Harris at 213.626.8484 or rharris@rwglaw.com, or Trisha Ortiz at 415.421.8484 or tortiz@rwglaw.com, or Katrina C. Gonzales at 213.626.8484 or kgonzales@rwglaw.com.
March 22, 2011
On behalf of Richards, Watson & Gershon, Trisha Ortiz and Katrina C. Gonzales monitored today’s, March 22, 2011, legislative activities with respect to the Governor’s proposed 2011-2012 Budget.
Neither the State Assembly nor the State Senate convened today. Members of both houses remain on call through the rest of the week as budget negotiations are expected to continue.
We will continue to closely monitor the Legislature’s activities regarding the Governor’s redevelopment proposal.
If you have any questions about this update, please contact Robin D. Harris at 213.626.8484 or rharris@rwglaw.com, or Trisha Ortiz at 415.421.8484 or tortiz@rwglaw.com, or Katrina C. Gonzales at 213.626.8484 or kgonzales@rwglaw.com.
March 21, 2011
On behalf of Richards, Watson & Gershon, Trisha Ortiz and Katrina C. Gonzales monitored today’s, March 21, 2011, legislative activities with respect to the Governor’s proposed 2011-2012 Budget.
Neither the State Assembly nor the State Senate took up AB 101 or SB 77 in their respective floor sessions.
We will continue to closely monitor the Legislature’s activities regarding the Governor’s redevelopment proposal.
If you have any questions about this update, please contact Robin D. Harris at 213.626.8484 or rharris@rwglaw.com, or Trisha Ortiz at 415.421.8484 or tortiz@rwglaw.com, or Katrina C. Gonzales at 213.626.8484 or kgonzales@rwglaw.com.
March 18, 2011
On behalf of Richards, Watson & Gershon, Trisha Ortiz and Katrina C. Gonzales monitored today’s, March 18, 2011, legislative activities with respect to the Governor’s proposed 2011-2012 Budget.
Neither the State Assembly nor the State Senate convened today. Members of both houses remain on call through the weekend as budget negotiations are expected to continue.
We will continue to closely monitor the Legislature’s activities regarding the Governor’s redevelopment proposal.
If you have any questions about this update, please contact Robin D. Harris at 213.626.8484 or rharris@rwglaw.com, or Trisha Ortiz at 415.421.8484 or tortiz@rwglaw.com, or Katrina C. Gonzales at 213.626.8484 or kgonzales@rwglaw.com.
March 17, 2011
On behalf of Richards, Watson & Gershon, Trisha Ortiz and Katrina C. Gonzales monitored today's, March 17, 2011, legislative activities with respect to the Governor's proposed 2011-2012 Budget.
At their respective floor sessions, the State Senate and the State Assembly debated and adopted SB 69, the Budget Act of 2011. However, neither house considered trailer bills AB 101 and SB 77.
The Assembly has adjourned until Monday, March 21, 2011, at 11:30 a.m., or upon the Call of the Speaker. The Senate remains on call tomorrow, March 18th, and through the weekend, and is scheduled to reconvene on Monday at noon.
We will continue to closely monitor the Legislature's activities regarding the Governor's redevelopment proposal.
If you have any questions about this update, please contact Robin D. Harris at 213.626.8484 or rharris@rwglaw.com, or Trisha Ortiz at 415.421.8484 or tortiz@rwglaw.com, or Katrina C. Gonzales at 213.626.8484 or kgonzales@rwglaw.com.
March 16, 2011
The State Assembly and the State Senate convened today, Wednesday, March 16, 2011 to debate and vote on the Budget and the trailer bills required to implement the Budget, including AB 101 and SB 77, the Senate version of the legislation implementing the Governor's proposal to eliminate redevelopment agencies.
The Assembly took four separate votes on SB 77 but never gathered more than 53 votes, which is one vote short of the 2/3 approval required for the proposal, despite various reports of individual lobbying by the Governor. As a result, SB 77 failed but will likely be reconsidered.
The Senate referred AB 101 to the Budget and Fiscal Review Committee. At the Committee hearing, the Committee passed the measure on a 9 - 7 vote after the Department of Finance provided a summary of the merits of the legislation. The Committee sent AB 101 back to the Senate Floor for further consideration and debate, with a recommendation that the full Senate vote for its passage. However, the Senate declined to vote on AB 101 today.
Both houses are scheduled to reconvene tomorrow, March 17, 2011, at 11:00 a.m., to continue their work on the Budget and the Budget trailer bills.
We will continue to closely monitor the Legislature's activities regarding the Governor's redevelopment proposal.
If you have any questions about this update, please contact Robin D. Harris at 213.626.8484 or rharris@rwglaw.com, or Trisha Ortiz at 415.421.8484 or tortiz@rwglaw.com, or Katrina C. Gonzales at 213.626.8484 or kgonzales@rwglaw.com.
March 15, 2011
On behalf of Richards, Watson & Gershon, Katrina C. Gonzales monitored today's, March 15, 2011, legislative activities with respect to the Governor's proposed 2011-2012 Budget.
Neither the State Assembly nor the State Senate convened today. Both houses are scheduled to convene tomorrow, March 16, 2011, at 1:00 p.m. to vote on the Budget, including the Governor's proposal to eliminate redevelopment agencies.
Assembly Bill 101 (AB 101), which was introduced as a placeholder bill on January 10, 2011, has been amended to reflect legislation implementing this proposal. There are differences between AB 101's language and the draft legislation circulated by the Department of Finance on February 23, 2011. AB 101 can be viewed at http://leginfo.ca.gov/pub/11-12/bill/asm/ab_0101-0150/ab_101_bill_20110315_amended_sen_v98.html.
We are in the process of reviewing AB 101. We will continue to closely monitor the Legislature's activities regarding the Governor's redevelopment proposal.
If you have any questions about this update, please contact Robin D. Harris at 213.626.8484 or rharris@rwglaw.com, or Katrina C. Gonzales at 213.626.8484 or kgonzales@rwglaw.com.
March 14, 2011
On behalf of Richards, Watson & Gershon, Katrina C. Gonzales monitored today's, March 14, 2011, legislative activities with respect to the Governor's proposed 2011-2012 Budget.
Neither the State Assembly nor the State Senate took up the Budget in their respective floor sessions. Both houses have adjourned upon the call of their Speakers.
We will continue to closely monitor the Legislature's activities regarding the Governor's redevelopment proposal.
If you have any questions about this update, please contact Robin D. Harris at 213.626.8484 or rharris@rwglaw.com, or Katrina C. Gonzales at 213.626.8484 or kgonzales@rwglaw.com.
March 11, 2011
On behalf of Richards, Watson & Gershon, Katrina C. Gonzales monitored today's, March 11, 2011, legislative activities with respect to the Governor's proposed 2011-2012 Budget.
Neither the State Assembly nor the State Senate convened today. Members of both houses remain on call through the weekend as budget negotiations are expected to continue.
We will continue to closely monitor the Legislature's activities regarding the Governor's redevelopment proposal.
If you have any questions about this update, please contact Robin D. Harris at 213.626.8484 or rharris@rwglaw.com, or Katrina C. Gonzales at 213.626.8484 or kgonzales@rwglaw.com.
March 10, 2011
On behalf of Richards, Watson & Gershon, Katrina C. Gonzales monitored today's, March 10, 2011, legislative activities with respect to the Governor's proposed 2011-2012 Budget.
Although the State Assembly and the State Senate convened today, both houses have yet to take up the Budget or any of the budget trailer bills required to implement the Governor's proposals. The Speaker Pro Tempore of the Assembly, Representative Ma (D - San Francisco), told Assembly members to be ready to meet tomorrow, March 11th, and through the weekend upon the call of the Speaker for budget deliberations. The President Pro Tempore of the Senate, Senator Steinberg (D - Sacramento), likewise informed Senate members that they should remain on call tomorrow and through the weekend. Both houses are scheduled to convene again on Monday, March 14, 2011, with the Assembly scheduled to convene at noon and the Senate scheduled to convene at 11:00 a.m.
Several news articles published today have quoted Senator Steinberg as saying that budget negotiations between Republicans and the Governor will continue through the weekend and that floor votes are likely to happen next week. http://blogs.sacbee.com/capitolalertlatest/2011/03/steinberg-expects-budget-vote.html
We will continue to closely monitor the Legislature's activities regarding the Governor's redevelopment proposal.
If you have any questions about this update, please contact Robin D. Harris at 213.626.8484 or rharris@rwglaw.com, or Katrina C. Gonzales at 213.626.8484 or kgonzales@rwglaw.com.
March 9, 2011
On behalf of Richards, Watson & Gershon, Katrina C. Gonzales monitored today's, March 9, 2011, legislative activities with respect to the Governor's proposed 2011-2012 Budget.
Neither the State Assembly nor the State Senate convened today. The Assembly is adjourned until tomorrow, March 10, 2011, at 9:00 a.m. The Senate is not scheduled to reconvene until Monday, March 14, 2011, at 2:00 p.m., but will also be available tomorrow, March 10th, upon the call of the Speaker Pro Tempore.
We will continue to closely monitor the Legislature's activities regarding the Governor's redevelopment proposal.
If you have any questions about this update, please contact Robin D. Harris at 213.626.8484 or rharris@rwglaw.com, or Katrina C. Gonzales at 213.626.8484 or kgonzales@rwglaw.com.
March 8, 2011
On behalf of Richards, Watson & Gershon, Katrina C. Gonzales monitored today's, March 8, 2011, legislative activities with respect to the Governor's proposed 2011-2012 Budget.
Neither the State Assembly nor the State Senate convened today. The Assembly has adjourned until Thursday, March 10, 2011, at 9:00 a.m. The Senate is not scheduled to reconvene until Monday, March 14, 2011, at 2:00 p.m., but will be available tomorrow (March 9th) and on Thursday (March 10th) upon the call of the Speaker Pro Tempore.
We will continue to closely monitor the Legislature's activities regarding the Governor's redevelopment proposal.
If you have any questions about this update, please contact Robin D. Harris at 213.626.8484 or rharris@rwglaw.com, or Katrina C. Gonzales at 213.626.8484 or kgonzales@rwglaw.com.
March 7, 2011
On behalf of Richards, Watson & Gershon, Katrina C. Gonzales monitored today's, March 7, 2011, legislative activities with respect to the Governor's proposed 2011-2012 Budget.
Neither the State Assembly nor the State Senate took up the Budget in their respective floor sessions.
This morning, after speaking to the California Community Colleges Board of Governors in Sacramento, the Governor acknowledged to reporters that it is not likely a budget deal would be reached by Thursday, March 10th, his self-imposed 60-day deadline. Several news articles further quoted the Governor as saying he does not have enough Republican votes to pass his plan to address California's $26.6 billion budget deficit.
In a letter to the Governor also dated today, Senators Berryhill (R - Modesto), Blakeslee (R - San Luis Obispo), Cannella (R - Ceres), Emmerson (R - Hemet) and Harman (R - Huntington Beach) claimed they have reached an “impasse” in their discussions with the Governor about how to move the State forward. They expressed disappointment that their substantive reform proposals, which include saving but reforming redevelopment agencies in lieu of elimination, “were either rejected or so watered down as to have no real effect on future spending or the economy.” The letter can be viewed at http://cssrc.us/pubs/110307_letter.pdf.
We will continue to closely monitor the Legislature's activities regarding the Governor's redevelopment proposal.
If you have any questions about this update, please contact Robin D. Harris at 213.626.8484 or rharris@rwglaw.com, or Katrina C. Gonzales at 213.626.8484 or kgonzales@rwglaw.com.
March 7, 2011
We have attached a copy of the Preliminary Budget Conference Committee Report for your convenience.
If you have any questions about the report, please do not hesitate to contact Robin D. Harris at 213.626.8484 or rharris@rwglaw.com, or Trisha Ortiz at 415.421.8484 or tortiz@rwglaw.com.
March 4, 2011
Our office has prepared a summary of the draft legislation implementing the Governor's redevelopment proposal, which proposal was voted upon and adopted by the Budget Conference Committee late yesterday afternoon, Thursday, March 3, 2011. We have attached this summary for your information and review.
If you have any questions about the summary, please do not hesitate to contact Robin D. Harris at 213.626.8484 or rharris@rwglaw.com, or Trisha Ortiz at 415.421.8484 or tortiz@rwglaw.com.
March 3, 2011
On behalf of Richards, Watson & Gershon, Katrina C. Gonzales monitored today's, March 3, 2011, hearing of the Budget Conference Committee regarding the Governor's proposed 2011-2012 Budget.
With Democratic members voting for and Republican members voting against on a 6-4 straight party line vote, the Committee passed a motion to adopt the Governor's proposal to eliminate redevelopment agencies.
After taking action on each of the remaining issues on the Committee's agenda, the Committee Chair, Representative Blumenfield (D - San Fernando Valley), also moved to adopt the Conference Report, which reflects all of the actions taken by the Committee during the hearings. As with the vote on the Governor's redevelopment proposal, this motion passed on a 6-4 party line vote. Representative Blumenfield also adjourned the Committee, thus moving the Governor's proposed 2011-2012 Budget and the legislative proposals required to implement the Budget to the Senate Floor and the Assembly Floor for further discussion and negotiation in order to obtain the 2/3 vote required in each house.
Note that the draft legislation implementing the Governor's redevelopment proposal which was circulated by the Department of Finance last February 23, 2011, has not yet been formally introduced as a bill. We anticipate that it will be introduced in both houses next week.
We will continue to closely monitor the Legislature's activities on the Governor's redevelopment proposal.
If you have any questions regarding this update, please contact Robin D. Harris at 213.626.8484 or rharris@rwglaw.com, or Katrina C. Gonzales at 213.626.8484 or kgonzales@rwglaw.com.
March 2, 2011
On behalf of Richards, Watson & Gershon, Katrina C. Gonzales monitored today's, March 2, 2011, legislative activities with respect to the Governor's proposed 2011-2012 Budget.
The Budget Conference Committee did not convene for the hearing scheduled for today. We anticipate that it will resume the hearings tomorrow.
We will continue to closely monitor the Budget Conference Committee's hearings on the Governor's redevelopment proposal, including the hearing scheduled for tomorrow, March 3, 2011, at a time still to be determined, in Room 4203.
If you have any questions about this update, please do not hesitate to contact Robin D. Harris at 213.626.8484 or rharris@rwglaw.com, or Katrina C. Gonzales at 213.626.8484 or kgonzales@rwglaw.com.
March 1, 2011
On behalf of Richards, Watson & Gershon, Katrina C. Gonzales monitored today's, March 1, 2011, legislative activities with respect to the Governor's proposed 2011-2012 Budget.
The Budget Conference Committee did not convene for the hearing scheduled for today. We anticipate that it will resume the hearings tomorrow.
We will continue to closely monitor the Budget Conference Committee's hearings on the Governor's redevelopment proposal, including the hearing scheduled for tomorrow, March 2, 2011, at a time still to be determined, in Room 4203.
If you have any questions about this update, please do not hesitate to contact Robin D. Harris at 213.626.8484 or rharris@rwglaw.com, or Katrina C. Gonzales at 213.626.8484 or kgonzales@rwglaw.com.
February 28, 2011
On behalf of Richards, Watson & Gershon, Katrina C. Gonzales monitored today's, February 28, 2011, hearing of the Budget Conference Committee regarding the Governor's proposed 2011-2012 Budget.
The Committee did not discuss redevelopment in today's hearing, instead choosing to address issues relating to public safety realignment.
We will continue to closely monitor the Budget Conference Committee's hearings on the Governor's redevelopment proposal, including the hearing scheduled for tomorrow, March 1, 2011, at a time still to be determined, in Room 4203.
If you have any questions about this update, please do not hesitate to contact Robin D. Harris at 213.626.8484 or rharris@rwglaw.com, or Katrina C. Gonzales at 213.626.8484 or kgonzales@rwglaw.com.
February 25, 2011
On behalf of Richards, Watson & Gershon, Katrina C. Gonzales monitored today's, February 25, 2011, hearing of the Budget Conference Committee regarding the Governor's proposed 2011-2012 Budget.
Although the Department of Finance (DOF) released its draft legislation implementing the Governor's proposal to eliminate redevelopment agencies last Wednesday, February 23, 2011, the legislation was not discussed in detail at the hearing.
The "Large Cities" Counterproposal
The Committee Chair, Representative Blumenfield (D - San Fernando Valley), opened the discussion on redevelopment by inviting the DOF and the Legislative Analyst's Office (LAO) to discuss the "large cities" counterproposal.
The DOF indicated that although it still has not received a formal counterproposal, it has seen various drafts and can speak to the counterproposal's general provisions. The DOF expressed doubt that the counterproposal, which largely relies on the State's issuance of bonds, would be given serious consideration by the Administration in its current form; the Administration has stated that it is not interested in proposals that include "securitization and borrowing for a one-time budget fix." Given that additional pass through payments to schools and counties under the counterproposal would not begin until fiscal year 2018-2019, the DOF voiced concern that schools and counties would have to wait "a very long time" before they receive the benefits of those payments. Further, the DOF estimates that under the counterproposal, $700 million would flow to schools as opposed to $1.9 billion under the Governor's proposal.
The LAO noted that the $200 million per year of tax increment funds that redevelopment agencies would pledge under the counterproposal would be insufficient to cover the additional cost of backfilling schools for another ten years (redevelopment agencies would be given ten-year "life" extensions under the counterproposal), especially since a large portion of those funds would be used to pay debt service on State-issued bonds.
Finally, the LAO stated that in order to be considered a viable alternative by the Administration, the counterproposal would have to address issues related to Proposition 22 and Proposition 58, which prohibits the State from balancing its budget through borrowing.
The Governor's Proposal to Eliminate Redevelopment Agencies
Following the presentations of the DOF and the LAO, Committee members asked questions about the specifics of the Governor's proposal. Representative Lowenthal (D - Long Beach) asked the DOF and the LAO to discuss the pros and cons of treating the additional payments to schools under the Governor's proposal as supplemental revenues versus revenues which reduce the State's backfill obligation. Representative Fuentes (D - Sylmar) asked the DOF to describe the proposal for distributing "the infrastructure of redevelopment agencies" once they are eliminated.
Representative Fuentes also asked whether the DOF and the LAO could provide some analysis as to the legality of the Governor's proposal, especially with respect to Proposition 22. The DOF indicated that although there are legal risks, it felt "very comfortable" saying that in the event of litigation challenging the proposal, the State would be on the winning side. The DOF further stated that based on its review of relevant constitutional provisions, it is clear that redevelopment agencies are mere creatures of statute, and, accordingly, may be eliminated by the Legislature. It noted that "cities and counties have no constitutional right to have a redevelopment agency." The LAO concurred with the DOF but qualified its position by stating that although the Governor's proposal "seems to be legal" and "appears to work," it is beyond the LAO's expertise to provide the Committee with an in-depth analysis of constitutional issues.
Representative Fuentes directed the Office of Legislative Counsel (OLC) to provide an opinion as to the legality of the Governor's proposal. The OLC stated that it was not in a position to opine on the spot and would get back to the Committee with an analysis of the relevant constitutional issues.
Redevelopment Reform
Several Committee members voiced their concern over the fact that the elimination of redevelopment agencies essentially would halt local economic activity and commented that reform, in lieu of elimination, seemed to be a viable alternative. Representative Lowenthal reminded the Committee that blight elimination is a state policy and that redevelopment has accomplished this goal. Representative Fuentes concurred, suggesting that an alternative to outright elimination would be to impose "additional filters" on existing redevelopment agencies to ensure that redevelopment funds are used for legitimate purposes. Representative Harkey (R - Dana Point) floated the idea of establishing a structure whereby the State would borrows funds from redevelopment agencies instead of taking them outright.
Representative Huff (R - Diamond Bar) advanced a proposal that would allow redevelopment agencies to opt into a voluntary program under which each participating agency would pledge to the State a percentage of tax increment funds for forty years. Although the details of the proposal have yet to be worked out, Representative Huff indicated that potential revenues under his proposal would be greater than the anticipated savings under the Governor's proposal. Committee members asked Representative Huff to provide his proposal to the DOF and the LAO so they could prepare an analysis for the Committee to consider.
Following this discussion, Representative Blumenfield steered the Committee towards other issues on the Committee's agenda and reassured the Committee that it would revisit discussions on redevelopment next week.
We will continue to closely monitor the Budget Conference Committee's hearings on the Governor's redevelopment proposal, including the hearing scheduled for Monday, February 29, 2011, at a time still to be determined, in Room 4203.
If you have any questions about this update, please do not hesitate to contact Robin D. Harris at 213.626.8484 or rharris@rwglaw.com, or Katrina C. Gonzales at 213.626.8484 or kgonzales@rwglaw.com.
February 24, 2011
On behalf of Richards, Watson & Gershon, Robin D. Harris and Katrina C. Gonzales monitored today's, February 24, 2011, hearing of the Budget Conference Committee regarding the Governor's proposed 2011-2012 Budget.
The Governor was present during the first hour of the hearing and was invited to provide some remarks on his budget proposal. The Governor stated his belief that his proposal is a balanced plan, being one that includes necessary tax extensions and "serious and painful" cuts. He also emphasized the need for members of the Legislature to consult the electorate about the difficult budget decisions facing the State in order to restore the legitimacy of the budget process, noting that an "honest" budget can only be adopted if Californians approve the proposed cuts and tax extensions.
Following the Governor's remarks, the Committee Chair, Representative Blumenfield (D - San Fernando Valley), invited the Committee members to provide comments and ask the Governor and his staff some questions. All ten members spoke, commending the Governor for his commitment to the budget process and his unprecedented attendance at the hearing. Several members voiced their support for the Governor's over-all proposal, while others expressed their concerns regarding the Governor's proposals relating to redevelopment and the realignment of services.
Representative Fuentes (D - Sylmar) asked the Governor whether he would be open to the "large cities" counterproposal and other proposals aimed at reforming redevelopment in lieu of eliminating redevelopment agencies. The "large cities" counterproposal contemplates the State's issuance of bonds, with the bonds to be repaid over 25 years by redevelopment tax increment funds. Further, under this counterproposal, existing redevelopment agencies would receive ten-year "life" extensions and additional pass through payments would be made to schools and counties in future years. Although the Governor indicated he was open to proposals for reform, he stressed that the proposals currently circulating are inadequate. He reiterated that everyone needed to make hard choices, and that although "redevelopment is good, other goods also have to be preserved."
The Committee did not discuss the Governor's redevelopment proposal in today's hearing, instead choosing to focus on environmental and Proposition 98 issues in the budget. However, Representative Blumenfield indicated that at tomorrow's (February 25, 2011) hearing, the Department of Finance and the Legislative Analyst's Office will provide more information regarding the "large cities" counterproposal as well as other proposals for redevelopment reform.
We will continue to closely monitor the Budget Conference Committee's hearings on the Governor's redevelopment proposal, including the hearing tomorrow, Friday, February 25, 2011, at 10:00 a.m., in Room 4202.
If you have any questions about this update, please do not hesitate to contact Robin D. Harris at 213.626.8484 or rharris@rwglaw.com, or Katrina C. Gonzales at 213.626.8484 or kgonzales@rwglaw.com.
February 23, 2011 - p.m.
On behalf of Richards, Watson & Gershon, Robin D. Harris and Katrina C. Gonzales monitored today's, February 23, 2011, hearing of the Budget Conference Committee regarding the Governor's proposed 2011-2012 Budget.
Today's hearing is the first of five scheduled hearings aimed at reconciling the Assembly's and Senate's versions of the Governor's proposal and working through the details of the trailer bill language required to implement the 2011-2012 Budget.
After Committee members provided opening comments, the Committee Chair, Representative Blumenfield (D - San Fernando Valley), invited the Department of Finance (DOF) and the Legislative Analyst's Office (LAO) to provide an overview of key issues in the Governor's proposed budget, as outlined in the Committee's Major Conference Issues report that we circulated earlier today.
In our email from earlier today, we described a "large cities" counterproposal to the Governor's proposal to eliminate redevelopment agencies. The counterproposal contemplates the State's issuance of bonds, with the bonds to be repaid over 25 years by redevelopment tax increment funds. Under this proposal, existing redevelopment agencies would receive ten-year "life" extensions and additional pass through payments would be made to schools and counties in future years. The DOF clarified that no formal counterproposals have been received by the Administration. Further, the DOF expressed concerns that such a counterproposal may violate Proposition 58's prohibition against balancing the State budget through borrowing, and that extending the life of redevelopment agencies would extend the State General Fund's subsidy of redevelopment in the amount of approximately $2 billion a year.
The DOF opined that the elimination of redevelopment agencies would not run afoul of Proposition 22; given that the Legislature established redevelopment agencies by statute, the DOF maintained that the Legislature also has the power to eliminate them by statute.
The LAO concurred with the DOF's views, noting the great cost of redevelopment and the lack of reliable evidence that redevelopment results in increased statewide economic activity. In discussing the $1.7 billion in estimated savings for the 2011-2012 fiscal year, the LAO indicated that although it could not independently corroborate this estimate, the figure did not take into account various sources of revenues other than tax increment that could be used to pay debt service on redevelopment agency obligations, including reserves, land sale proceeds, and interest earnings.
The LAO also noted that the Community Redevelopment Law dwarfs other states' redevelopment programs in that it provides very large financial incentives for cities to include vast tracts of land in redevelopment areas and does not impose the type of limits required by other states. As an example, it cited the model followed by South Dakota, which limits redevelopment funding to ten percent of total assessed value of property, imposes a 15-year limit on redevelopment project areas, and prohibits schools from redirecting their share of tax revenues to redevelopment agencies.
Representative Skinner (D - Berkeley) asked whether it makes sense to eliminate redevelopment agencies at this time instead of simply restructuring the Community Redevelopment Law to more closely follow the redevelopment model of other states. The LAO responded that is not aware of any barriers under Proposition 22 to the restructuring of the redevelopment model on a going forward basis.
Representative Huff (R - Diamond Bar) expressed frustration that the State was trying to balance its budget on the backs of local governments. Representative Harkey (R - Dana Point) also voiced her concern that looking to local governments to backfill the State would create problems for local economies and leave them worse off than they are now. She stated such an outcome would reduce local economic activity and flies in the face of what voters decided when they passed Proposition 22. Following these comments, Representative Blumenfield adjourned the hearing.
We will continue to closely monitor the Budget Conference Committee's hearings on the Governor's redevelopment proposal, including the hearing tomorrow, Thursday, February 24, 2011, at 11:00 a.m., in Room 4202.
This afternoon, we circulated the DOF's just-released trailer bill language implementing the Governor's redevelopment proposal. We have attached a copy of the draft legislation for your convenience.
We are in the process of reviewing this draft legislation.
In the meantime, please do not hesitate to contact Robin D. Harris at 213.626.8484 or rharris@rwglaw.com, or Katrina C. Gonzales at 213.626.8484 or kgonzales@rwglaw.com.
Moments ago, the Department of Finance released the trailer bill language implementing the Governor's redevelopment proposal. We have attached the draft legislation for your review:
If you have any questions regarding this update, please contact Robin D. Harris at 213.626.8484 or rharris@rwglaw.com, or Katrina C. Gonzales at 213.626.8484 or kgonzales@rwglaw.com.
February 23, 2011 - a.m.
Late yesterday afternoon, February 22, 2011, the first hearing of the Joint Budget Conference Committee was scheduled for 10:00 a.m. today, February 23, 2011. We are monitoring this hearing and will provide you with an update later this afternoon.
Yesterday afternoon, the Committee released its report entitled: "Major Conference Issues, 2011-12 Budget (PDF)."
The report states that the Senate and Assembly both accepted the $1.7 billion savings number set forth in the Governor's budget proposal, but acknowledged that the detail remained to be worked out and that other alternatives would be considered.
The report comments on Proposition 22, stating that since the Governor's proposal would eliminate redevelopment agencies, the Administration believes the proposal is not in conflict with Proposition 22 or other constitutional provisions.
The report also describes a counterproposal that has been put forth by "large cities" that could result in $1.7 billion for the State without eliminating redevelopment agencies, noting, however, that such counterproposal may require voter approval of a constitutional amendment. The report describes the counterproposal as follows: The State would sell bonds to generate $1.7 billion in revenues, with the bonds to be repaid over twenty-five years with approximately $200 million of tax increment annually. Existing redevelopment agencies would receive ten-year "life" extensions and additional pass through payments would be made to schools and counties beginning in 2018-19.
If you have any questions regarding this update, please contact Robin D. Harris at 213.626.8484 or rharris@rwglaw.com, or Katrina C. Gonzales at 213.626.8484 or kgonzales@rwglaw.com.
Feburary 18, 2011
On behalf of Richards, Watson & Gershon, Katrina C. Gonzales attended and Robin D. Harris monitored today's, February 18, 2011, hearings of the Assembly Budget Committee and the Senate Committee on Budget and Fiscal Review regarding the Governor's proposed budget.
Unlike previous informational hearings, the purpose of today's hearings was to take a vote on the Governor's proposed budget in order to move budget negotiations forward.
Assembly Budget Committee
Following a discussion of each budget subcommittee's recommendations as set forth in the Assembly Budget Subcommittee Reports for the 2011-2012 Budget, the Committee adopted much of the Governor's proposed budget (the "Assembly Version") by a majority vote. We have attached a copy of the Subcommittee Reports for your convenience.
The Committee Chair, Representative Blumenfield (D - San Fernando Valley), provided an overview of the Subcommittee Reports and reaffirmed the Committee's overall agreement with the Governor's budget priorities. He also indicated that the reality of the State's financial crisis required the Committee to be complicit with the "deep and painful" cuts proposed by the Governor.
Each of the five Subcommittee Chairs presented his/her subcommittee's recommendations as detailed in the Subcommittee Reports. The Committee did not take any public testimony, instead reserving the remainder of the hearing to take questions and comments from Committee members.
An example of a common sentiment expressed by several Committee members is a comment made by Representative Cedillo (D - Los Angeles). He commended the Committee for its hard work and the public for its commitment to and involvement with the budget process. He indicated support for the Assembly Version and implored his colleagues to act prudently by voting to move budget negotiations forward, reassuring them that there will be sufficient time during the conference committee hearings to iron out details of the budget package. This sentiment was echoed by several other Committee members, including Representatives Swanson (D - Alameda), Chesbro (D - North Coast), Allen (D - Santa Rosa) and Monning (D - Carmel).
A few Committee members expressed great concern regarding the lack of specificity in the budget proposal. Representative Berryhill (R - Stockton) noted too many questions are still unanswered, including the absence of trailer bill language regarding the Governor's proposal to eliminate redevelopment agencies as well as the lack of analysis from the Department of Finance (DOF) and the Legislative Analyst's Office (LAO) regarding the legality of such a proposal. Representatives Wagner (R - Irvine) and Logue (R - Yuba County) noted this same concern and indicated they would not be able to support the Assembly Version without specific trailer bill language regarding redevelopment.
The DOF stated it is diligently working on legislation to implement the redevelopment proposal and is cognizant of the need to have language that would withstand potential legal challenges. Given the complex nature of the proposal and the various legal issues that still need to be analyzed, the DOF indicated that it hopes to have the legislation available next week.
After hearing the above comments, the Committee voted; with a majority of members voting yes, it adopted the Assembly Version of the 2011-2012 Budget. The Committee did not take a position regarding the elimination of redevelopment agencies. Instead, it left the question open, noting that the final budget to be crafted by the Budget Conference Committee may achieve the anticipated State General Fund savings through reform in lieu of elimination.
Although no future Committee actions were scheduled, we anticipate the Committee's report on the Assembly Version of the 2011-2012 Budget to be taken to the Assembly Floor in the coming weeks.
Senate Committee on Budget and Fiscal Review
In the Senate Committee on Budget and Fiscal Review hearing, Senator Wolk (D - Davis) framed the issue as not being a question of whether redevelopment has done good or bad things, but rather as a matter of funding in that redevelopment causes a diversion of property taxes from schools and necessitates the backfilling of schools by the State.
The Senators had a number of questions for the LAO and the DOF. The accuracy of the $1.7 billion estimated savings to the State General Fund in 2011-2012 in the event redevelopment is eliminated was questioned. The LAO responded that it could not verify the figure but the approach used to arrive at this number was reasonable. There were also questions regarding whether there would be any savings to the State General Fund in subsequent years. The LAO indicated that under the current proposal, moneys returned to schools will be supplemental revenues that will not offset the State's backfill funding obligation. The DOF concurred but responded that there would be a benefit from stopping the creation of additional project areas that would divert property taxes from schools.
The DOF indicated that existing contracts in which there had been "substantial performance," including contracts between agencies and cities, would survive. However, the DOF did not specifically address contracts that may have been entered into after the Governor's budget proposal was released.
The DOF indicated that the Governor's proposal to amend the Constitution to provide for 55 percent voter approval for limited tax increases and bonding against local revenues for development projects will not be addressed in the budget legislation.
There was discussion regarding the future of redevelopment in light of the Governor's proposal. Senator Emmerson (R - Riverside) stated that cities could form new agencies under the Redevelopment Law and exercise powers under the Redevelopment Law, without tax increment financing. Senator Rubio (D - Bakersfield) stated that the topic of jobs had not been brought up and that the Legislature is committed to coming up with alternatives for providing for redevelopment at the local level. Senator Leno (D - San Francisco) stated that this is not the end of conversation, but rather the beginning of conversation, and indicated that the Legislature could create alternatives in the future in that the Governor is not suggesting that there is no need for redevelopment.
Senator Wolk and the LAO discussed the creation of integrated financing districts. Under existing law, a city, county, or city and county can create an infrastructure financing district (IFD), adopt an infrastructure financing plan, and issue bonds to finance specified public improvements. The formation of the IFD and the issuance of bonds must be approved by a two-thirds vote of the registered voters of the IFD (for undeveloped districts, the vote is by landowners). The bonds are repayable from incremental property tax revenues generated in the IFD after its formation from those affected taxing entities, excluding County offices of education, school districts, and community college districts, which consent to the IFD.
Senator Wolk indicated that she has introduced a bill, SB 214, which would change some of the requirements so that an IFD would be comparable to a redevelopment agency. SB 214 would eliminate the two-thirds vote requirement for formation of the IFD and the issuance of bonds.
We have reviewed SB 214 and have a number of concerns. SB 214 does not change provisions of existing law which (i) require the consent of each affected taxing entity from which tax revenues will be allocated to the IFD; or (ii) provide that an IFD can only finance public capital facilities of communitywide significance, which provide significant benefits to an area larger than the area of the IFD. In addition, further research is required to determine whether the elimination of the vote requirement would cause the IFD bonds to violate the debt limitation provisions of the State Constitution.
Senator Rubio made a motion to move on staff's recommendation to approve the Governor's proposal to eliminate redevelopment agencies. According to the Committee Chair, Senator Leno, the motion passed along party lines, with Democratic support.
We will continue to closely monitor the Legislature's activities on the Governor's budget proposal.
If you have any questions regarding this update, please contact Robin D. Harris at 213.626.8484 or rharris@rwglaw.com, or Katrina C. Gonzales at 213.626.8484 or kgonzales@rwglaw.com.
February 15, 2011
On behalf of Richards, Watson and Gershon, Trisha Ortiz monitored today's, February 15, 2011, joint oversight hearing of the Senate Transportation and Housing Committee and the Assembly Housing and Community Development Committee. The following are highlights of today's events:
As with previous hearings, the hearing was informational only and the Committee took no action. The purpose of the hearing was to gather information about affordable housing finance and the role of redevelopment funds.
The Committee heard testimony from a panel of speakers consisting of William Pavao, Executive Director for the California Tax Credit Allocation Committee; La Shelle Dozier, Executive Director for the Sacramento Housing and Redevelopment Agency; Greg Sparks, Vice President of Mercy Housing; Eric Thronson, Fiscal and Policy Analyst for the Legislative Analyst's Office; Julie Snyder, Policy Director for Housing California; Glen Campora, Assistant Deputy Director for the Department of Housing and Community Development; Jeff Brownfield, Chief of the Division of Audits for the State Controller's Office; Nancy Vogel, Principal Consultant for the Senate Office of Oversight and Outcomes; Christine Minnehan, Director of Legislative Advocacy for the Western Center on Law and Poverty and John Shirey, Executive Director of the California Redevelopment Association.
Following the panel presentations, the Committee took public testimony from many different stakeholders in redevelopment and affordable housing.
The Committee members' comments and questions largely criticized how redevelopment agencies use housing funds as well as how the State monitors redevelopment agencies' use of housing funds. A September 2010 report by the Senate Office of Oversight and Outcomes provided a basis for many of the Committee members' comments.
The Committee also took testimony about possible reforms for redevelopment agencies' affordable housing activities, in the event that the Legislature does not eliminate redevelopment agencies. Such proposals included stricter limits on planning and administration expenses paid from housing funds, improved auditing and monitoring of redevelopment expenditures, and stricter penalties for failure to spend housing funds.
As of today, February 15, 2011, the Department of Finance still has not provided the legislation to enact the Governor's redevelopment proposal. We continue to closely monitor its status.
For more information on the Governor's 2011-12 Budget Proposals, please contact Robin D. Harris at 213.626.8484 or rharris@rwglaw.com or Trisha Ortiz at 415.421.8484 or tortiz@rwglaw.com.
February 9, 2011
On behalf of Richards, Watson and Gershon, Trisha Ortiz attended today's, February 9, 2011, hearing of the Senate Committee on Governance and Finance regarding the Governor's budget proposal on redevelopment. The following are highlights of today's events:
As with previous hearings, the hearing was informational only and the Committee took no action.
The Committee received presentations by the State Treasurer, Bill Lockyer, the Legislative Analyst's Office staff, and Department of Finance staff.
Mr. Lockyer expressed his support for the proposal and stated that the Legislature should "blow up" redevelopment and start over because of abuses.
DOF stated that it is still working on legislation to implement the proposal and provided a few details about what can be expected in the legislation. Notably, the successor agencies, to which the proposal would vest the former redevelopment agencies' responsibilities to retire their debt, would likely be the government entity that formed the redevelopment agency. An oversight committee comprised of the local taxing agencies affected by the redevelopment agency would oversee the successor entity's activities. Further, as to what constitutes debt that will continue to be payable from tax increment revenues, it is DOF's position that a contract between a redevelopment agency and a city would not suffice. Finally, DOF staff stated they are still working on legislation and their goal is to make that draft available next week.
LAO gave an overview of the report entitled "The 2011-12 Budget: Should California End Redevelopment Agencies?" which we circulated last night and can be found on the LAO's website.
The Committee heard testimony from a panel of speakers that included John Shirey, Executive Director of the California Redevelopment Association; Bill Bogaard, Vice President of the League of California Cities and Mayor of the City of Pasadena; La Shelle Dozier, Member of the Board of Directors of the California Association of Housing Authorities; Jean Ross, Executive Director of the California Budget Project; Jo MacKenzie, President of the California Special Districts Association; and Jean Hurst, Legislative Representative of the California State Association of Counties.
The Committee also took public testimony from representatives of redevelopment agencies.
The Committee Chair, Senator Wolk (D-Fresno), summed up the common sentiment of the Committee's members. They generally agree with local governments that redevelopment has done great things but there is just no more money. Senator Wolk said that the Legislature needs to look at new ways to target and finance redevelopment activities.
There will be another legislative committee hearing next week. A joint committee hearing of the Senate Transportation and Housing Committee and the Assembly Housing and Community Development Committee is scheduled for February 15, 2011 at 1:30 p.m. in Rm. 4203. The topic of the hearing will be "redevelopment and affordable housing finance." According to Senator Wolk, the hearing will focus on the affordable housing aspects of redevelopment.
We will continue to monitor the Legislature's activities on the Governor's redevelopment proposal, including the joint committee hearing next Tuesday, February 15, 2011, at 1:30 p.m., in Rm. 4203.
For more information on the Governor's 2011-12 Budget Proposals, please contact Robin D. Harris at 213.626.8484 or rharris@rwglaw.com or Trisha Ortiz at 415.421.8484 or tortiz@rwglaw.com.
February 7, 2011
On behalf of Richards, Watson & Gershon, Trisha Ortiz attended today's, February 7, 2011, joint committee hearing of the Assembly Budget Subcommittee No. 4 on State Administration and Revenue and Taxation and the Assembly Committee on Revenue and Taxation regarding the Governor's budget proposal on redevelopment. The following are highlights of today's events:
The joint committee received presentations by the Legislative Analyst's Office and Department of Finance similar to the presentations given last week at the Senate subcommittee hearing. The presentations did not provide new information about the Governor's proposal and as with last week, the LAO and DOF staff presentations were not based on legislation since none has been introduced yet.
The joint committee heard testimony from a panel of speakers that included La Shelle Dozier, Executive Director of the Sacramento Housing and Redevelopment Authority; Jean Ross, Executive Director of the California Budget Project; and Jean Hurst, Legislative Representative of the California State Association of Counties. Also, the joint committee took public testimony from a large number of representatives from redevelopment agencies.
An exmple of a common comment expressed by the joint committee members was made by Representative Dickinson (D- Sacramento). He stated that due to the State's budget crisis, the redevelopment stakeholders are not in a place where they can just say no to the Governor's proposal. He commented that there is a need to revise how property tax revenues are distributed. This comment was echoed by the joint committee Co-Chairs, Representative Buchanan (D- Alamo) and Representative Perea (D- Fresno), at the conclusion of the hearing.
The joint committee took no action and no one provided any information about when we could expect legislation on the Governor's proposal.
We will attend the Senate's next hearing on the Governor's proposal in the Senate Governance and Finance Committee, scheduled for Wednesday, February 9, 2011, at 9:30 a.m., in Rm. 112.
We will continue to monitor the budget proposals affecting redevelopment and we will analyze the legal issues raised by such proposals.
For more information on the Governor's 2011-12 Budget Proposals, please contact Robin D. Harris at 213.626.8484 or rharris@rwglaw.com or Trisha Ortiz at 415.421.8484 or tortiz@rwglaw.com.
February 3, 2011
On behalf of Richards, Watson & Gershon, Trisha Ortiz, attended today's Senate Subcommittee hearing regarding the Governor's proposal to eliminate redevelopment agencies. The following are highlights of today's events:
The hearing began with an assessment of the proposal from the Legislative Analyst's Office. The bullet point assessment acknowledged that many of the details of the proposal need to be resolved. The LAO identified the following three major issues that have not been addressed in the proposal: (1) Does the state have the authority to redirect tax increment revenues to pay for state program costs? (2) What entities will serve as the successor agencies and will they have the capacity and proper fiscal incentives for managing redevelopment's remaining obligations? (3) What happens to redevelopment agencies' physical assets?
A representative from the Department of Finance provided an additional assessment, including its opinion that Proposition 22 protections are void if redevelopment agencies are eliminated.
Subcommittee Member Senator Evans (D - Santa Rosa) agreed that redevelopment projects benefit the communities in which they are located but also expressed concern about the loss of property tax revenues to fund schools and public safety.
Subcommittee Member Senator La Malfa (R - Richvale) asked that local governments provide their ideas on redevelopment "to avoid an all or nothing budget solution."
During the Subcommittee hearing, which lasted more than four and a half hours, representatives from more than 30 redevelopment agencies described how redevelopment is an essential part of providing for the welfare of their local communities.
The next step in the Senate proceedings on the proposal is a hearing in the Senate Committee on Governance and Finance, which is scheduled for Wednesday, February 9, 2010.
We will attend the Assembly's proceedings as well, beginning with the Assembly Budget Subcommittee hearing on Monday, February 7, 2011. We will continue to monitor the budget proposals affecting redevelopment. We will also be monitoring any legislation proposed to implement the proposals, and we will analyze the legal issues raised by such legislation.
For more information on the Governor's 2011-12 Budget Proposals, please contact Robin D. Harris at 213.626.8484 or rharris@rwglaw.com or Trisha Ortiz at 415.421.8484 or tortiz@rwglaw.com.
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