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Governor Signs AB 26X and AB 27X



(Bill information from Housing California) Governor Brown, Jr. announced today that he has signed budget trailer bills ABx1 26 by Assemblymember Bob Blumenfield (D-San Fernando Valley) which eliminates redevelopment agencies and directs the resolution of their activities and ABx1 27 by Assemblymember Bob Blumenfield (D-San Fernando Valley) which creates an alternative voluntary redevelopment program.

The two redevelopment bills passed both houses as part of the budget package. Because Governor Brown had earlier vetoed the first main budget bills, housers and redevelopment agencies had waiting to see whether legislative leadership will pull AB 26x and 27x back to the floor of the Senate. However, the Governor and Democratic leaders in the legislature finally agreed to a new budget compromise - and the bills were eventually enrolled and sent to the Governor for his signature.

According to Housing California, both Senate President pro Tempore Darrell Steinberg and Assembly Speaker John Pérez provided commitments to modify the bills' provisions: Tighten the circumstances under which a redevelopment agency could suspend its 2011-12 housing set-aside; Require repayment of any suspended 2011-12 set-aside within 5 years; Lower the required payments to local schools for redevelopment agencies that lack sufficient revenue to make the payments; Additionally, AB 26x appears to contain contradictory directives regarding the disposition of unencumbered Low and Moderate Income Housing Funds (see Sections 34177(d) and 34181(c)). These provisions will need to be reconciled in a clean-up bill if AB 26x becomes law.

AB 26x eliminates the redevelopment agency of any city/county that doesn't make the above payments to schools/special districts. The bill establishes successor agencies charged with winding down these redevelopment agencies' operations, paying its debts, etc. For those redevelopment agencies' that are eliminated, housing obligations and duties would transfer to the city or county, housing authority, or the state Department of Housing and Community Development.

AB 27x requires cities and counties with redevelopment agencies to make $1.7 billion in payments to local schools in fiscal year 2011-12. The funds can come from any city/county source, including redevelopment. If necessary, each redevelopment agency can suspend all or a portion of its 2011-12 redevelopment funds designated for housing in order to repay the city or county.

For fiscal year 2012-13 and beyond, cities/counties must make $400 million in payments to schools and special districts. The money can come from any city/county source, including redevelopment; however, it cannot come from the portion of redevelopment funds designated for housing.

Senator Mark DeSaulnier (D-Concord) and Assemblymembers Toni Atkins (D-San Diego) and Roger Dickinson (D-Sacramento) doggedly pursued amendments to protect redevelopment's housing funds, amendments that were sought by Housing California, California Rural Legal Assistance Foundation, and Western Center on Law and Poverty. Their dedication secured the commitments outlined from legislative leadership.