HomeMy WebLinkAbout02- Economic Development CITY OF SAN BERNARDINO ORIGINAL
ECONOMIC DEVELOPMENT AGENCY
FROM: Emil A.Marzullo SUBJECT: Discuss and take action to appoint Commission
Interim Executive Director members to the Board of Directors of the San
Bernardino Economic Development Corporation
and Granting of certain approvals under the
DATE: March 16,2011 Project Funding Agreement
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Synopsis of Previous Commission/Council/Committee Action(s):
At a Joint Special workshop of the Mayor and Common Council and the Community Development Commission on Agency
Redevelopment Projects and Housing Funds held on March 3,2011,Resolutions A through E were adopted.
On March 7,2011,the Mayor and Common Council and the Community Development Commission tabled the matter relating to
appointing the Board of Directors of the San Bernardino Economic Development Corporation, Inc.,pursuant to Resolution No.
CDC/2011-8 as approved on March 3,2011.
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Recommended Motion(s):
(Community Development Commission)
Motion A: That the Mayor as Chair of the Commission hereby recommends the appointment of Councilmember Johnson,
Councilmember Brinker, and Mayor Morris to the SBEDC Board of Directors and that the names of said
Commission members shall be inserted into Commission Resolution No. CDC/2011-8 as approved on March 3,
2011.
Motion B: That the Community Development Commission of the San Bernardino ("Commission") hereby consents to and
approves the appointments of Councilmember Johnson, Councilmember Brinker, and Mayor Morris to the
SBEDC Board of Directors and authorizes the insertion of such names into Commission Resolution No. CDC
2011-8.
(Mayor and Common Council and Community Development Commission)
Motion C: That the Mayor and Common Council and Community Development Commission of the City of San Bernardino
approve the transfer of real property assets to the San Bernardino Economic Development Corporation pursuant
to Section 2.01(C)of the Project Funding Agreement(CDC 2011-9)
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Contact Person(s): Emil A.Marzullo Phone: (909)663-1044
Project Area(s): Citywide Ward(s): All
Supporting Data Attached: El Staff Report❑Resolution(s)❑Agreement(s)/Contract(s)❑Map(s)❑Letter(s)
See
FUNDING REQUIREMENTS: Amount: $ attached Source: See attached
Budget Authority: See attached
Signature: Fiscal Review:
Emil A.Marzul o, im Exe tive Director Lori Pan ' o- a nter' of Financial Officer
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Commission/Council Notes: ----------------------------------------
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PAAgendas\CommDe Commission\CDC 2011\03-17-11 SBEDC-Appointment ofCo—mionMembmSRdoc COMMISSION MEETING AGENDA
Meeting Date: 03/17/2011
Agenda Item Number:
i
ECONOMIC DEVELOPMENT AGENCY
STAFF REPORT
DISCUSS AND TAKE ACTION TO APPOINT COMMISSION MEMBERS TO THE BOARD
OF DIRECTORS OF THE SAN BERNARDINO ECONOMIC DEVELOPMENT
CORPORATION AND GRANTING OF CERTAIN APPROVALS UNDER THE PROJECT
FUNDING AGREEMENT
BACKGROUND:
On Thursday, March 3, 2011, the Mayor and Common Council and the Community Development
Commission of the City of San Bernardino ("Commission") held a Joint Special workshop at the City
of San Bernardino Economic Development Agency ("EDA") Board Room to consider several actions
including the approval of numerous City and EDA projects and to establish contractual relationships
with the San Bernardino Economic Development Corporation ("SBEDC"), and Affordable Housing
Solutions, Inc. (AHS), as a means to assure the continued use of tax increment revenues in furtherance
of City and EDA projects. The issue of appointments of members of the Commission to the SBEDC
Board of Directors was also presented to the Commission at the Joint Special workshop. However, no
appointments were made at that time.
On March 7, 2011, a supplemental agenda item to make the appointments was prepared for the
Commission, at which time the City Attorney opined that the City Charter Section 51 required the
Mayor as Chair of the Commission to make appointments subject to the consent and approval by the
Commission. Due to the fact that the Mayor was out of town on March 7, 2011, such appointments
could not be made at the March 7 Commission meeting and as a result the matter was tabled. This
item is being presented to the Commission to allow the Mayor as Chair of the Commission to make the
appointments as required by the Charter subject to consent and approval of the Commission.
ENVIRONMENTAL IMPACT:
Neither action meets the definition of a"project" under Section 15378 of the California Environmental
Quality Act (CEQA), which states that a"Project" means the whole of an action, which has a potential
for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect
physical change in the environment.
RECOMMENDATION:
That the Community Development Commission approve Motions A and B and the Mayor and
Common Council and the Community Development Commission approve Motion C.
Emil A. Marzullo,Interim Executive Director
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P:\Agendas\CommDe Commission\CDC 2011\03-17-11 SBEDC-Appointment of CommissionMemb—SR.d- COMMISSION MEETING AGENDA
Meeting Date: 03/17/2011
Agenda Item Number: _C1
AMENDED IN ASSEMBLY MARCH 15, 2011
SENATE BILL No. 77
Introduced by Committee on Budget and Fiscal Review
January 10, 2011
An act to amend Sections
33500, 33501, 33607.5, and 33607.7 of, to add Part 1.8 (commencing
with Section 34161) and Part 1.85 (commencing with Section 34170)
to Division 24 of, and to repeal Section 33604 of, the Health and Safety
Code, and to add Sections 97.401 and 98.2 to, and to add Chapter 7
(commencing with Section 100.96) to Part 0.5 of Division 1 of, the
Revenue and Taxation Code, relating to redevelopment, and making
an appropriation therefor, to take effect immediately, bill related to the
budget.
LEGISLATIVE COUNSEL'S DIGEST
SB 77,as amended,Committee on Budget and Fiscal Review.Budget
"et of 201!..Community redevelopment.
(1) The Community Redevelopment Law authorizes the establishment
of redevelopment agencies in communities to address the effects of
blight, as defined.Existing law provides that an action may be brought
to review the validity of the adoption or amendment of a redevelopment
plan by an agency, to review the validity of agency findings or
determinations, and other agency actions.
This bill would revise the provisions of law authorizing an action to
be brought against the agency to determine or review the validity of
specified agency actions.
(2) Existing law also requires that if an agency ceases to function,
any surplus funds existing after payment of all obligations and
indebtedness vest in the community.
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Entered Into Rec. at MCC/CDC Mtg; t7 1
Agenda Item No;
by; 4? Cl��81
City CI CDC Secretary
City of San Bernardino
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SB 77 —2—
The bill would repeal this provision. The bill would suspend various
agency activities and prohibit agencies from incurring indebtedness
commencing on the effective date of this act. Effective July 1, 2011, the
bill would dissolve all redevelopment agencies and community
development agencies in existence and designate successor agencies,
as defined, as successor entities. The bill would impose various
requirements on the successor agencies and subject successor agency
actions to the review of oversight boards, which the bill would establish.
The bill would require county auditor-controllers to conduct an
agreed-upon procedures audit of each former redevelopment agency
by October 1, 2011. The bill would require the county auditor-controller
to determine the amount of property taxes that would have been
allocated to each redevelopment agency if the agencies had not been
dissolved and deposit this amount in a Redevelopment Property Tax
Trust Fund in the county.Revenues in the trust fund would be allocated
to various taxing entities in the county and to cover specified expenses.
of the former agency. The sum of$1,700,000,000 of these moneys would
be allocated to the various counties for deposit in a Public Health and
Safety Fund, which would be used to reimburse the state for health and
trial court services in the county. The bill would authorize the county
to elect not to administer thisfund, in which case the Director of Finance
would be required to designate a different entity to administer this fund.
Under the bill, if the county elects not to administer the fund, it would
not receive moneys remaining in the Redevelopment Property Tax Trust
Fund, which would otherwise be distributed to taxing entities in the
county. The bill would also require,for the 2012-13 fiscal year and
each subsequent fiscal year in which funds are available, each county
auditor-controller to allocate to various educational entities a specified
amount. By imposing additional duties upon local public officials, the
bill would create a state-mandated local program.
(3) Under the California Constitution, the Legislature is prohibited,
except by a 2/j vote,from changing the pro rata shares in which ad
valorem property tax revenues are allocated among local agencies in
a county.
Because this measure would provide property tax revenues that would
otherwise be received by enterprise special districts from former
redevelopment tax increment allotments instead be received by the
respective county, and may result in property tax moneys in the
Redevelopment Property Tax Trust Fund not being allocated to the
county if it declines to administer the Public Health and Safety Fund,
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the bill would constitute a change in the pro rata share of property tax
allocations in that county and require the passage of the bill by a 2/
vote.
(4) The bill would appropriate $500,000 to the Department of
Finance from the General Fund for administrative costs associated
with the bill.
(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)This bill would declare that it is to take effect immediately as a
bill providing for appropriations related to the Budget Bill.
ehanges relating to the Budget Aet of 2044-.
Vote: rnajority-2/3. Appropriation: eyes. Fiscal committee: no
yes. State-mandated local program: eyes.
The people of the State of California do enact as follows:
1 SECTION 1. The Legislature finds and declares all of the
2 following:
3 (a) The economy and the residents of this state are slowly
4 recovering from the worst recession since the Great Depression.
5 (b) State and local governments are still facing incredibly
6 significant declines in revenues and increased need for core
7 governmental services.
8 (c) Local governments across this state continue to confront
9 difficult choices and have had to reduce fire and police protection
10 among other services.
11 (d) Schools have faced reductions in funding that have caused
12 school districts to increase class size and layoff teachers, as well
13 as make other hurtful cuts.
14 (e) Redevelopment agencies have expanded over the years in
15 this state. The expansion of redevelopment agencies has
16 increasingly shifted property taxes away from services provided
17 to schools, counties, special districts, and cities.
18 f Redevelopment agencies take in approximately 12 percent
19 of all of the property taxes collected across this state.
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1 (1) If an agreement exists that requires payments to the taxing
2 entity, the amount required to be paid by an agreement between
3 the agency and an affected taxing entity entered into prior to
4 January 1, 1994.
5 (2) If an agreement does not exist,the amounts required pursuant
6 to subdivisions (b), (c), (d), and (e) of Section 33607.5, until
7 termination of the redevelopment plan, calculated against the
8 amount of assessed value by which the current year assessed value
9 exceeds an adjusted base year assessed value. The amounts shall
10 be allocated between property taxes and educational facilities,
11 including, in the case of amounts paid during the 2011-12 fiscal
12 year through the 2015-1 6 fiscal year, inclusive, land acquisition,
13 facility construction, reconstruction, remodeling, maintenance, or
14 deferred maintenance, according to the appropriate formula in
15 paragraph(3)of subdivision(a)of Section 33607.5.In determining
16 the applicable amount under Section 33607.5,the first fiscal year
17 shall be the first fiscal year following the fiscal year in which the
18 adjusted base year value is determined.
19 (c) The adjusted base year assessed value shall be the assessed
20 value of the project area in the year in which the limitation being
21 amended would have taken effect without the amendment or, if
22 more than one limitation is being amended,the first year in which
23 one or more of the limitations would have taken effect without the
24 amendment.The agency shall commence making these payments
25 pursuant to the terms of the agreement, if applicable, or, if an
26 agreement does not exist,in the first fiscal year following the fiscal
27 year in which the adjusted base year value is determined.
28 SEC. 8. Part 1.8 (commencing with Section 34161) is added
29 to Division 24 of the Health and Safety Code, to read:
30
31 PART 1.8. RESTRICTIONS ON REDEVELOPMENT AGENCY
32 OPERATIONS
33
34 CHAPTER 1. SUSPENSION OF,4GENCY,4=VITIE5 AND
35 PROHIBITION ON CREATION OF NEW DEBTS
36
37 34161. Notwithstanding Part 1 (commencing with Section
38 33000), Part 1.5 (commencing with Section 34000), Part 1.6
39 (commencing with Section 34050), and Part 1.7(commencing with
40 Section 34100), or any other law, commencing on the effective
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1 date of this part, no agency shall incur new or expand existing
2 monetary or legal obligations except as provided in this part. All
3 of the provisions of this part shall take effect and be operative on
4 the effective date of the act adding this part.
5 34162. (a) Notwithstanding Part I (commencing with Section
6 33000), Part 1.5 (commencing with Section 34000), Part 1.6
7 (commencing with Section 34050), and Part 1.7(commencing with
8 Section 34100), or any other law, commencing on the effective
9 date of this act,an agency shall be unauthorized and shall not take
10 any action to incur indebtedness, including, but not limited to, any
11 of the following:
12 (1) Issue or sell bonds,for any purpose, regardless of the source
13 of repayment of the bonds. As used in this section, the term
14 "bonds," includes, but is not limited to, any bonds, notes, bond
15 anticipation notes, interim certificates, debentures, certificates of
16 participation, refunding bonds, or other obligations issued by an
17 agency pursuant to Part I (commencing with Section 33000), and
18 Section 53583 of the Government Code,pursuant to any charter
19 city authority or any revenue bond law.
20 (2) Incur indebtedness payable from prohibited sources of
21 repayment, which include, but are not limited to, income and
22 revenues of an agency's redevelopment projects, taxes allocated
23 to the agency, taxes imposed by the agency pursuant to Section
24 7280.5 of the Revenue and Taxation Code, assessments imposed
25 by the agency, loan repayments made to the agency pursuant to
26 Section 33746, fees or charges imposed by the agency, other
27 revenues of the agency, and any contributions or other financial
28 assistance from the state or federal government.
29 (3) Refund, restructure, or refinance indebtedness or obligations
30 that existed as of January 1, 2011, including but, not limited to,
31 any of the following:
32 (A) Refund bonds previously issued by the agency or by another
33 political subdivision of the state, including, but not limited to, those
34 issued by a city, a housing authority, or a nonprofit corporation
35 acting on behalf of a city or a housing authority.
36 (B) Exercise the right of optional redemption of any of its
37 outstanding bonds or elect to purchase any of its own outstanding
38 bonds.
39 (C) Modify or amend the terms and conditions, payment
40 schedules, amortization or maturity dates of any of the agency's
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SB 77 —16—
1 bonds or other obligations that are outstanding or exist as of
2 January 1, 2011.
3 (4) Takeout or accept loans or advances,for any purpose,from
4 the state or the federal government, any other public agency, or
5 any private lending institution, or from any other source. For
6 purposes of this section, the term "loans" include, but are not
7 limited to, agreements with the community or any other entity for
8 the purpose of refinancing a redevelopment project and moneys
9 advanced to the agency by the community or any other entity for
10 the expenses ofredevelopmentplanning, expensesfor dissemination
11 of redevelopment information, other administrative expenses, and
12 overhead of the agency.
13 (5) Execute trust deeds or mortgages on any real or personal
14 property owned or acquired by it.
15 (6) Pledge or encumber,for any purpose, any of its revenues
16 or assets.As used in this part, an agency's "revenues and assets"
17 include, but are not limited to, agency tax revenues, redevelopment
18 project revenues, other agency revenues, deeds of trust and
19 mortgages held by the agency, rents, fees, charges, moneys,
20 accounts receivable, contracts rights, and other rights to payment
21 of whatever kind or other real or personal property. As used in
22 this part, to `pledge or encumber"means to make a commitment
23 of, by the grant of a lien on and a security interest in, an agency's
24 revenues or assets, whether by resolution, indenture, trust
25 agreement, loan agreement, lease, installment sale agreement,
26 reimbursement agreement, mortgage, deed of trust, pledge
27 agreement, or similar agreement in which the pledge is provided
28 for or created.
29 (b) Any actions taken that conflict with this section are void
30 from the outset and shall have no force or effect.
31 (c) Notwithstanding subdivision (a), a redevelopment agency
32 may issue refunding bonds, which are referred to in this part as
33 Emergency Refunding Bonds, only where all of the following
34 conditions are met:
35 (1) The issuance of Emergency Refunding Bonds is the only
36 means available to the agency to avoid a default on outstanding
37 agency bonds.
38 (2) Both the county treasurer and the Treasurer have approved
39 the issuance of Emergency Refunding Bonds.
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1 (3) Emergency Refunding Bonds are issued only to provide
2 funds for any single debt service payment that is due prior to
3 September 1, 2011, and that is more than 20 percent larger than
4 a level debt service payment would be for that bond.
5 (4) The principal amount of outstanding agency bonds is not
6 increased.
7 34163. Notwithstanding Part 1 (commencing with Section
8 33000), Part 1.5 (commencing with Section 34000), Part 1.6
9 (commencing with Section 34050),and Part 1.7(commencing with
10 Section 34100), or any other law, commencing on the effective
11 date of this part, an agency shall not have the authority to, and
12 shall not, do any of the following:
13 (a) Make loans or advances or grant or enter into agreements
14 to provide funds or provide financial assistance of any sort to any
15 entity or person for any purpose, including, but not limited to, all
16 of the following:
17 (1) Loans of moneys or any other thing of value or commitments
18 to provide financing to nonprofit organizations to provide those
19 organizations with financing for the acquisition, construction,
20 rehabilitation, refinancing, or development of multifamily rental
21 housing or the acquisition of commercial property for lease, each
22 pursuant to Chapter 7.5(commencing with Section 33 741)of Part
23 1.
24 (2) Loans of moneys or any other thing of value for residential
25 construction, improvement, or rehabilitation pursuant to Chapter
26 8 (commencing with Section 33750) of Part 1. These include, but
27 are not limited to, construction loans to purchasers of residential
28 housing,mortgage loans to purchasers of residential housing,and
29 loans to mortgage lenders, or any other entity, to aid in financing
30 pursuant to Chapter 8(commencing with Section 33750).
31 (3) The purchase, by an agency, of mortgage or construction
32 loans from mortgage lenders or from any other entities.
33 (b) Enter into contracts with, incur obligations, or make
34 commitments to, any entity, whether governmental, tribal, or
35 private, or any individual or groups of individuals for any purpose,
36 including, but not limited to, loan agreements, passthrough
37 agreements, regulatory agreements, services contracts, leases,
38 disposition and development agreements,joint exercise ofpowers
39 agreements, contracts for the purchase of capital equipment,
40 agreements for redevelopment activities, including, but not limited
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SB 77 —18—
1 to, agreements for planning, design, redesign, development,
2 demolition,alteration, construction, reconstruction, rehabilitation,
3 site remediation, site development or improvement, removal of
4 graffiti, land clearance, and seismic retrofits.
5 (c) Amend or modem existing agreements, obligations, or
6 commitments with any entity,for any purpose, including, but not
7 limited to, any of the following:
8 (1) Renewing or extending term of leases or other agreements,
9 except that the agency may extend lease space for its own use to
10 a date not to exceed six months after the effective date of the act
11 adding this part and for a rate no more than 5 percent above the
12 rate the agency currently pays on a monthly basis.
13 (2) Modifying terms and conditions of existing agreements,
14 obligations, or commitments.
15 (3) Forgiving all or any part of the balance owed to the agency
16 on existing loans or extend the term or change the terms and
17 conditions of existing loans.
18 (4) Increasing its deposits to the Low and Moderate Income
19 Housing Fund created pursuant to Section 33334.3 beyond the
20 minimum level that applied to it as of January 1, 2011.
21 (5) Transferring funds out of the Low and Moderate Income
22 Housing Fund, except to meet the minimum housing-related
23 obligations that existed as of January 1, 2011, to make required
24 payments under Sections 33690 and 33690.5, and to borrow funds
25 pursuant to Section 34168.5.
26 (d) Dispose of assets by sale, long-term lease, gift, grant,
27 exchange, transfer, assignment, or otherwise, for any purpose,
28 including, but not limited to, any of the following:
29 (1) Assets, including, but not limited to, real property, deeds of
30 trust, and mortgages held by the agency, moneys, accounts
31 receivable, contract rights, proceeds of insurance claims, grant
32 proceeds, settlement payments, rights to receive rents, and any
33 other rights to payment of whatever kind.
34 (2) Real property, including, but not limited to, land, land under
35 water and waterfront property, buildings, structures,fixtures, and
36 improvements on the land, any property appurtenant to, or used
37 in connection with, the land, every estate, interest, privilege,
38 easement,franchise, and right in land, including rights-of-way,
39 terms for years, and liens, charges, or encumbrances by way of
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1 judgment, mortgage, or otherwise, and the indebtedness secured
2 by the liens.
3 (e) Acquire real property by any means for any purpose,
4 including, but not limited to, the purchase, lease, or exercising of
5 an option to purchase or lease, exchange, subdivide, transfer,
6 assume, obtain option upon, acquire by gift,grant, bequest, devise,
7 or otherwise acquire any real property, any interest in real
8 property, and any improvements on it, including the repurchase
9 of developed property previously owned by the agency and the
10 acquisition of real property by eminent domain;provided, however,
11 that nothing in this subdivision is intended to prohibit the
12 acceptance or transfer of title for real property acquired prior to
13 the effective date of this part.
14 69 Transfer, assign, vest, or delegate any of its assets,funds,
15 rights,powers, ownership interests, or obligations for any purpose
16 to any entity, including, but not limited to, the community, the
17 legislative body, another member of a joint powers authority, a
18 trustee, a receiver, a partner entity, another agency, a nonprofit
19 corporation, a contractual counterparty, a public body, a
20 limited-equity housing cooperative, the state,apolitical subdivision
21 of the state, the federal government, any private entity, or an
22 individual or group of individuals.
23 (g) Accept financial or other assistance from the state or federal
24 government or any public or private source if the acceptance
25 necessitates or is conditioned upon the agency incurring
26 indebtedness as that term is described in this part.
27 34164. Notwithstanding Part 1 (commencing with Section
28 33000), Part 1.5 (commencing with Section 34000), Part 1.6
29 (commencing with Section 34050), and Part 1.7(commencing with
30 Section 34100), or any other law, commencing on the effective
31 date of this part, an agency shall lack the authority to, and shall
32 not, engage in any of the following redevelopment activities:
33 (a) Prepare, approve, adopt, amend, or merge a redevelopment
34 plan, including, but not limited to, modifying, extending, or
35 otherwise changing the time limits on the effectiveness of a
36 redevelopment plan.
37 (b) Create, designate, merge, expand, or otherwise change the
38 boundaries of a project area.
39 (c) Designate a new survey area or modify, extend, or otherwise
40 change the boundaries of an existing survey area.
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1 (d) Approve or direct or cause the approval of any program,
2 project, or expenditure where approval is not required by law.
3 (e) Prepare, formulate, amend, or otherwise modify a
4 preliminary plan or cause the preparation, formulation,
5 modification, or amendment of a preliminary plan.
6 (0 Prepare, formulate, amend, or otherwise modify an
7 implementation plan or cause the preparation, formulation,
8 modification, or amendment of an implementation plan.
9 (g) Prepare,formulate, amend, or otherwise mods a relocation
10 plan or cause the preparation, formulation, modification, or
11 amendment of a relocation plan where approval is not required
12 by law.
13 (h) Prepare, formulate, amend, or otherwise modem a
14 redevelopment housing plan or cause the preparation,formulation,
15 modification, or amendment of a redevelopment housing plan.
16 (i) Direct or cause the development, rehabilitation, or
17 construction of housing units within the community,unless required
18 to do so by an enforceable obligation.
19 (j) Make or modem a declaration or finding of blight, blighted
20 areas, or slum and blighted residential areas.
21 (k) Make any new findings or declarations that any areas of
22 blight cannot be remedied or redeveloped by private enterprise
23 alone.
24 (l) Provide or commit to provide relocation assistance, except
25 where the provision of relocation assistance is required by law.
26 (m) Provide or commit to provide financial assistance.
27 34165. Notwithstanding Part 1 (commencing with Section
28 33000), Part 1.5 (commencing with Section 34000), Part 1.6
29 (commencing with Section 34050), and Part 1.7(commencing with
30 Section 34100), or any other law, commencing on the effective
31 date of this part, an agency shall lack the authority to, and shall
32 not, do any of the following:
33 (a) Enter into new partnerships, become a member in a joint
34 powers authority, form a joint powers authority, create new
35 entities, or become a member of any entity of which it is not
36 currently a member, nor take on nor agree to any new duties or
37 obligations as a member or otherwise of any entity to which the
38 agency belongs or with which it is in any way associated.
39 (b) Impose new assessments pursuant to Section 7280.5 of the
40 Revenue and Taxation Code.
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1 (c) Increase the pay, benefits, or contributions of any sort for
2 any officer, employee, consultant, contractor, or any other goods
3 or service provider that had not previously been contracted.
4 (d) Provide optional or discretionary bonuses to any officers,
5 employees, consultants, contractors, or any other service or goods
6 providers.
7 (e) Increase numbers of staff employed by the agency beyond
8 the number employed as of.Ianuary 1, 2011.
9 69 Bring an action pursuant to Chapter 9 (commencing with
10 Section 860) of Title 10 of Part 2 of the Code of Civil Procedure
11 to determine the validity of any issuance or proposed issuance of
12 revenue bonds under this chapter and the legality and validity of
13 all proceedings previously taken or proposed in a resolution of an
14 agency to be taken for the authorization, issuance, sale, and
15 delivery of the revenue bonds and for the payment of the principal
16 thereof and interest thereon.
17 (g) Begin any condemnation proceeding or begin the process
18 to acquire real property by eminent domain.
19 (h) Prepare or have prepared a draft environmental impact
20 report. This subdivision shall not alter or eliminate any
21 requirements of the California Environmental Quality Act(Division
22 13 (commencing with Section 21000) of the Public Resources
23 Code).
24 34166. No legislative body or local governmental entity shall
25 have any statutory authority to create or otherwise establish a new
26 redevelopment agency or community development commission.
27 No chartered city or chartered county shall exercise the powers
28 granted in Part I (commencing with Section 33000) to create or
29 otherwise establish a redevelopment agency.
30 34167. (a) This part is intended to preserve, to the maximum
31 extent possible, the revenues and assets of redevelopment agencies
32 so that those assets and revenues that are not needed to pay for
33 enforceable obligations may be used by local governments to fund
34 core governmental services including police and fire protection
35 services and schools. It is the intent of the Legislature that
36 redevelopment agencies take no actions that would further deplete
37 the corpus of the agencies'funds regardless of their original
38 source. All provisions of this part shall be construed as broadly
39 as possible to support this intent and to restrict the expenditure of
40 funds to the fullest extent possible.
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1 prevent a violation under this part and to obtain injunctive or other
2 appropriate relief.
3 6) For purposes of this part, "auditor-controller" means the
4 officer designated in subdivision (e) of Section 24000 of the
5 Government Code.
6 34167.5. Commencing on the effective date of the act adding
7 this part, the Controller shall review the activities of redevelopment
8 agencies in the state to determine whether an asset transfer has
9 occurred after January 1, 2011, between the city or county, or city
10 and county that created a redevelopment agency or any other
11 public agency, and the redevelopment agency. If such an asset
12 transfer did occur during that period and the government agency
13 that received the assets is not contractually committed to a third
14 party for the expenditure or encumbrance of those assets, to the
15 extent not prohibited by state and federal law, the Controller shall
16 order the available assets to be returned to the redevelopment
17 agency or, on or after July 1, 2011, to the successor agency. Upon
18 receiving such an order from the Controller, an affected local
19 agency shall, as soon as practicable, reverse the transfer and
20 return the applicable assets to the redevelopment agency or, on
21 or after July 1, 2011, to the successor agency. The Legislature
22 hereby finds that a transfer of assets by a redevelopment agency
23 during the period covered in this section is deemed not to be in
24 the furtherance of the Community Redevelopment Law and is
25 thereby unauthorized.
26 34168. (a) Notwithstanding any other law, any action
27 contesting the validity of this part or Part 1.85(commencing with
28 Section 34170) or challenging acts taken pursuant to these parts
29 shall be brought in the Superior Court of the County of
30 Sacramento.
31 (b) If any provision of this part or the application thereof to any
32 person or circumstance is held invalid, the invalidity does not
33 affect other provisions or applications of this part which can be
34 given effect without the invalid provision or application, and to
35 this end, the provisions of this part are severable.
98
-35— SB 77
1 housing assets and functions previously performed by the
2 redevelopment agency. If a city, county, or city and county elects
3 to retain the responsibility for performing housing functions
4 previously performed by a redevelopment agency, all rights,
5 powers,duties, and obligations,along with any amounts on deposit
6 in the Low and Moderate Income Housing Fund, shall be
7 transferred to the city, county, or city and county.
8 (b) If a city, county, or city and county does not elect to retain
9 the responsibility for performing housing functions previously
10 performed by a redevelopment agency, all rights,powers, assets,
11 liabilities, duties, and obligations associated with the housing
12 activities of the agency, along with any amounts in the Low and
13 Moderate Income Housing Fund, shall be transferred as follows:
14 (1) Where there is no local housing authority in the territorial
15 jurisdiction of theformer redevelopment agency, to the Department
16 of Housing and Community Development.
17 (2) Where there is one local housing authority in the territorial
18 jurisdiction of the former redevelopment agency, to that local
19 housing authority.
20 (3) Where there is more than one local housing authority in the
21 territorial jurisdiction of the former redevelopment agency, to the
22 local housing authority selected by the city, county, or city and
23 county that authorized the creation of the redevelopment agency.
24 (c) Commencing on the effective date of this part, the entity
25 assuming the housing functions formerly performed by the
26 redevelopment agency may enforce affordability covenants and
27 perform related activities pursuant to applicable provisions of the
28 Community Redevelopment Law(Part 1 (commencing with Section
29 33000), including, but not limited to, Section 33418.
30
31 CHAPTER 3. SUCCEssoR AGENCIEs
32
33 34177. Successor agencies are required to do all of the
34 following:
35 (a) Continue to make payments due for enforceable obligations.
36 (1) On and after July],2011, and until a Recognizes Obligation
37 Payment Schedule becomes operative, only payments required
38 pursuant to an enforceable obligations payment schedule shall be
39 made. The initial enforceable obligation payment schedule shall
40 be the last schedule adopted by the redevelopment agency under
98
SB 77 —36—
1 Section 34169. The enforceable obligation payment schedule may
2 be amended by the successor agency at any public meeting and
3 shall be subject to the approval of the oversight board as soon as
4 the board has sufficient members to form a quorum.
5 (2) The Department of Finance and the Controller shall each
6 have the authority to require any documents associated with the
7 enforceable obligations to be provided to them in a manner of
8 their choosing. Any taxing entity, the department, and the
9 Controller shall each have standing to file a judicial action to
10 prevent a violation under this part and to obtain injunctive or other
11 appropriate relief.
12 (3) Commencing on January 1,2012, only those payments listed
13 in the Recognized Obligation Payment Schedule may be made by
14 the successor agency from the funds specified in the Recognized
15 Obligation Payment Schedule. In addition, commencing January
16 1, 2012, the Recognized Obligation Payment Schedule shall
17 supersede the Statement of Indebtedness, which shall no longer
18 be prepared nor have any effect under the Community
19 Redevelopment Law.
20 (4) Nothing in the act adding this part is to be construed as
21 preventing a successor agency, with the prior approval of the
22 oversight board, as described in Section 34179, from making
23 payments for enforceable obligations from sources other than
24 those listed in the Recognized Obligation Payment Schedule.
25 (5) From July 1,2011, to July 1, 2012, a successor agency shall
26 have no authority and is hereby prohibited from accelerating
27 payment or making any lump sum payments that are intended to
28 prepay loans unless such accelerated repayments were required
29 prior to the effective date of this part.
30 (b) Maintain reserves in the amount required by indentures,
31 trust indentures, or similar documents governing the issuance of
32 outstanding redevelopment agency bonds.
33 (c) Perform obligations required pursuant to any enforceable
34 obligation.
35 (d) Remit unencumbered balances of redevelopment agency
36 funds to the county auditor-controllerfor distribution to the taxing
37 entities. In making the distribution, the county auditor-controller
38 shall utilize the same methodology for allocation and distribution
39 of property tax revenues provided in Section 34188.
98
-37— SB 77
1 (e) Dispose of assets and properties of theformer redevelopment
2 agency as directed by the oversight board; provided, however,
3 that the oversight board may instead direct the successor agency
4 to transfer ownership of certain assets pursuant to subdivision(a)
5 of Section 34181. The disposal is to be done expeditiously and in
6 a manner aimed at maximizing value. Proceeds from asset sales
7 and related funds that are no longer needed for approved
8 development projects or to otherwise wind down the affairs of the
9 agency, each as determined by the oversight board, shall be
10 transferred to the county auditor-controller for distribution as
11 property tax proceeds under Section 34188.
12 (fi Negotiate compensation agreements with other taxing entities
13 for any retained development projects.
14 (g) Enforce all former redevelopment agency rights for the
15 benefit of the taxing entities, including, but not limited to,
16 continuing to collect loans, rents, and other revenues that were
17 due to the redevelopment agency.
18 (h) Effectuate transfer of housing functions and funds to the
19 appropriate entity designated pursuant to Section 34176
20 (i) Expeditiously wind down the affairs of the redevelopment
21 agency pursuant to the provisions of this part and in accordance
22 with the direction of oversight board.
23 0) Continue to oversee development activities for approved
24 developmentprojects, including continuing to oversee development
25 of properties until the contracted work has been completed or the
26 contractual obligations of the former redevelopment agency can
27 be transferred to other parties. Bond proceeds shall be used for
28 the purposes for which bonds were sold unless the purposes can
29 no longer be achieved, in which case, the proceeds may be used
30 to defease the bonds.
31 (k) Prepare a proposed administrative budget and submit it to
32 the oversight board for its approval. The proposed administrative
33 budget shall include all of the following:
34 (1) Estimated amounts for successor agency administrative
35 costs for the upcoming six-month fiscal period.
36 (2) Proposed sources of payment for the costs identified in
37 paragraph (1).
38 (3) (A) Proposals for arrangements for administrative and
39 operations services provided by a city, county, city and county, or
40 other entity.
98
Entered Int Rec, at MCC/CDC Mfg: 3 /7
by: L
Agend Item No: Z,
BILL ANALYSIS by, ✓ /J _
AB 101 City ClerVCDC Secretary
City of San Bernardino
SENATE RULES COMMITTEE
Office of Senate Floor Analyses
1020 N Street, Suite 524
Phone: (916) 651-1520 Fax: (916) 327-4478
THIRD READING
Bill No: AB 101
Author: Assembly Budget Committee
Amended: 3/15/11 in Senate
Vote: 27 - Urgency
PRIOR VOTES NOT RELEVANT
SUBJECT : Budget Act of 2011: Redevelopment agencies
SOURCE : Author
DIGEST : This bill eliminates redevelopment agencies (RDAs) and specifies a process for
the orderly wind-down of RDA activities, including completion of some mid-
phase projects. This bill directs the property tax otherwise available to the RDAs
to instead: continue "pass-through payments" to schools and other local
governments; to provide $1.7 billion in grant funds to the state for Trial Court and
Medi-Cal costs (in 2011-12 only); to fund outstanding RDA-related debt, costs for
enforceable obligations, and successor agency administration costs; and to
provide new education and public safety funding to support core local services
(about $200 million in 2011-12 and about $1.9 billion annually thereafter).
Senate Floor Amendments of 3/15/11 delete the prior version of the bill which expressed the
intent of the Legislature to enact statutory changes relating to the 2011 Budget Act and inserts
language concerning redevelopment agencies.
AB 101
ANALYSIS : Specifics of the bill:
Current Redevelopment Agencies
1. Eliminates redevelopment agencies as of July 1, 2011. As part of the process of
reducing RDAs activity prior to their elimination, effective the date of adoption of this
legislation, the bill, among other restrictions, prohibits RDAs from:
a. issuing of new or expanded debt of any type (except under certain conditions, emergency
refunding bonds);
b. making loans or advances or grants or entering into agreements to provide funds or
financial assistance;
c. executing new or additional contracts, obligations, or commitments;
d. amending existing agreements or commitments;
e. selling or otherwise disposing of existing assets;
f. acquiring real property for any purpose by any means;
g. transferring or assigning any assets, rights, or powers to any entity;
h. accepting financial assistance from any public or private source that is conditioned on the
issuance of debt;
AB 101
i. adopting or amending redevelopment plans or making new finding with respect to blight;
j. entering into new partnerships, imposing new assessments, or increasing staff or
compensation;
a.a other actions that would result in ongoing commitments.
2. Requires RDAs to continue to make all scheduled payments for enforceable obligations,
perform obligations established pursuant to enforceable obligations, set aside required
reserves, preserve assets, cooperate with Successor Agencies, and to take all measures to
avoid triggering a default under an enforceable obligation. Also requires the RDAs to
prepare a preliminary inventory of enforceable obligation payments and provide this to the
county auditor-controller within 60 days of the effective date of this bill, which inventory
would be reviewed by the State Controller's Office and the Department of Finance. The bill
would require that unencumbered RDA funds be conveyed to the county auditor-controller
for distribution to the taxing entities in the county, including cities, counties, a city and a
county, school districts and special districts.
3. Extends the time period allowed for challenges to the validity of RDAs' bonds or other
obligations or to agency and legislative body determinations and findings issued or adopted
after January 1, 2011. These challenges could be brought two years following approval of
the action, as opposed to the current 60-day and 90-day review periods.
4. Requires the county auditor-controller to complete a financial audit of each RDA in the
county by November 1, 2011, in order to establish each agency's assets, liabilities, pass-
through payment obligations to other taxing entities, the amount and terms of indebtedness,
and to certify the initial Recognized Obligation Payment Schedule (defined below). The
audits are to be submitted to the State Controller by November 15, 2011.
Successor Agencies
5. Establishes Successor Agencies to the RDAs effective July 1, 2011, that would be, except in
certain situations, such as those involving an RDA based on a joint powers authority, the
entity that created the redevelopment agency. If no local agency elects to be the Successor
Agency, a designated local authority would be formed, whose three members would be
appointed by the Governor.
6. Requires Successor Agencies to make payments on legally enforceable obligations using
property tax revenues when no other funding source is available or when payment from
property tax revenues is required by an enforceable obligation. Pursuant to this requirement,
Successor Agencies would be responsible for preparing on a semi-annual basis a Recognized
Obligation Payment Schedule that would set forth a schedule of obligated payments
including the date, amount, and source of funds for each payment.
7. Requires the Recognized Obligation Payment Schedule to be certified by an external auditor
approved by the county auditor-controller, and approved by the Oversight Board (as
described below), the State Controller's Office and the Department of Finance. The first
Recognized Obligation Payment Schedule would be submitted by December 15, 2011. The
Recognized Obligation Payment Schedule would be established pursuant to the identification
of enforceable obligations, which are obligations entered into by the RDA and are legally
enforceable. These enforceable obligations would include:
a. bonds, including debt Service, reserves, or other required payments;
b. loans borrowed by the agency for a lawful purpose;
c. payments required by the federal government;
d. pre-existing obligations to the state;
e. obligations imposed by state law;
f. legally enforceable payments to RDA employees, including pension obligations;
g. judgments and Settlements entered into by a court or arbitration, retaining appeal rights;
h. legally binding contracts that do not violate the debt limit or public policy;
i. contracts necessary for administration of the RDA, such as for office space, equipment
and supplies, to the extent permitted. Enforceable obligation would not include any
agreements, contracts, or arrangements between the city, county, or city and county that
created the RDA and the former RDA.
8. Provides that all assets, properties, contracts, books and records, buildings and equipment of
the former RDA be conveyed to the Successor Agencies on July 1, 2011. The Successor
Agencies would dispose of RDA assets as directed by the Oversight Board with the proceeds
transferred to the county auditor-controller for distribution to taxing Agencies. The bill
would require the Successor Agencies to compensate the taxing Agencies for the value of
property and assets retained by the Successor Agencies in an amount proportional to the
taxing agencies' share of the property tax. The value of any assets retained by the Successor
Agencies would be at market value as determined by the county assessor for the 2011
property tax lien date, unless some other agreement is reached between the parties.
Governmental facilities, such as roads, school buildings, parks, and fire stations may be
transferred to the appropriate public jurisdiction.
9. Provides that the Successor Agency could:
a. Complete approved development projects, constituting projects where construction, site
remediation, environmental assessment, or property acquisition is required pursuant to an
enforceable obligation between the RDA and parties other than the entity that created the
RDA and either (i) substantial performance under the agreement has taken place prior to
July 1, 2011 or (ii) the Oversight Board, and two of the three following state officials -
the Director of Finance, the State Treasurer and the State Controller, determine that it
would be beneficial for the taxing agencies or the communities to continue the project
even if there had not been substantial performance, based on benefits to the taxing
agencies, special or unique circumstances, or for the completion of multi-phase projects.
b. Continue retained development projects, constituting other projects not involving or
related to an enforceable obligation. These would consist of projects planned by the
former RDA prior to dissolution that the city, county, or city and county, as applicable,
wishes to continue by using its own funds. Such projects would in general be projects
that the Oversight Board would otherwise direct the Successor Agency to terminate
because the project does not qualify as an approved development project.
1. Allows the Successor Agency, to the extent necessary, to fulfill an enforceable
obligation of a former RDA to provide financing for an approved development
project, to pledge all or part of its property tax revenue or enter into an agreement
with other taxing Agencies in the RDA territory for the repayment of financing
provided by a state conduit issuer. These actions would be subject to prior written
approval by the Oversight Board and two of the three following state officials - the
Director of Finance,the State Treasurer, and the State Controller.
2. Authorizes the Successor Agency to prepare for the Oversight Board a proposed
includes estimated administrative expenses, proposed sources of payment and
proposals for services to be provided, but does not include funding for the retained
development projects, which must be funded from the Successor Agency's own
budget. The administrative budget for the Successor Agency would be funded from
a continued tax increment equal to the greater of $250,000 or 5 percent of the
property tax allocated to the Successor Agency for the 2011-12 fiscal year. This
would decline to 3 percent for each fiscal year thereafter. The Successor Agency
can employ staff and officers of the RDA provided the total compensation does not
exceed the amount paid in 2010 unless approved by the Oversight Board.
Oversight Boards
3. Establishes a Seven-member Oversight Board for each Successor Agency that
would generally consist of the following representatives: (i) one member appointed
by the County Board of Supervisors; (ii) one member appointed by the mayor of the
city that formed the RDA; (iii) one member appointed by the largest special
district; (iv) one member appointed by the county superintendent of schools; (v)
one member appointed by the Chancellor of the California Community Colleges;
(vi) one member appointed by the county board of supervisors to represent the
public; (vii) one member appointed by the mayor or the chair of the board of
supervisors from the largest representative employee organization of the former
RDA. Special appointment rules would apply if a county, county and city, or joint
powers authority formed the RDA. Beginning July 1, 2016, one Oversight Board
will be formed in each county.
4. Requires the Oversight Board to approve the following actions of the Successor
Agency:
a. establishment of new repayment terms for outstanding loans where such terms
have not been established prior to July 1, 2011;
b. issuance of refunding bonds;
c. set aside of reserves as required by bond indentures;
d. merger of project areas,
e. acceptance of federal or state grants that are conditioned upon the provision of
matching funds in an amount greater than 5 percent;
f. approval to have projects deemed to be retained development projects;
g. establishment of the Recognized Obligation Payment Schedule.
h. a request to hold portions of moneys in the housing fund in order to pay
recognized obligations related to housing;
i. a request to pledge or enter into an agreement for the pledge of property tax
revenues to provide financing for an approved development project.
5. Requires that the Oversight Board direct the Successor Agencies to:
a. dispose of all assets and properties except those deemed to be part of approved
development plan expeditiously and in a manner aimed at maximizing value;
b. cease performance in connection with and terminate all existing agreements that
do not qualify as enforceable obligations;
c. transfer housing obligations and low and moderate set-aside funds to the
applicable entity;
d. negotiate compensation agreements with 10taxing agencies for retained
development projects;
e. terminate any agreement between the RDA and any public entity in the county
which obligates the RDA to provide funding for debt service or other payments
if in the best interest of the taxing entities;
£ determine whether any contract, payments, or agreements between the RDA
and private parties should be dissolved or renegotiated based on taxing entities'
best interests;
g. submit repayment schedules for repayment of amounts borrowed from the
housing fund.
f
1. Establishes that all Oversight Board actions are subject to review by the Department
of Finance. The Department of Finance will notify the Oversight Board within 72
hours of the action that it wishes to review the decision. In the event the
Department of Finance decides to review the action, it will have 10 days to either
approve the action or return it to the Oversight Board for reconsideration.
Property Tax Revenues
2 Creates the Public Health and Safety Fund, the Redevelopment Property Tax
Retirement Fund, and the Redevelopment Property Tax Trust Fund. Property tax
revenues associated with each former RDA in each county would be deposited in
the Redevelopment Property Tax Trust Fund which will be administered by the
county auditor-controller. Estimates of the amounts to be allocated and distributed
from this account will be provided to the Department of Finance semi-annually.
3. Requires the county auditor-controller to determine the amount of property tax
increment that would have been allocated to each RDA and to deposit that amount
in a Redevelopment Property Tax Trust Fund. The county auditor-controller is
charged with administering this fund for the benefit of holders of agency debt, the
taxing Agencies that receive pass-through payments, and the beneficiaries of the
Public Health and Safety Fund.
4. Requires the county auditor-controller to allocate funds from the Redevelopment
Property Tax Fund in the following order:
a. Local agencies, school districts, and community college districts in the
amount that would have been received by such Agencies as their share of the
property tax base and that would have been paid pursuant to statutory and
contractual pass-through agreements;
b. During Fiscal Year 2011-12 only, to the Public Health and Safety Fund an
amount not to exceed $1.7 billion dollars on an aggregate basis statewide. A
proportional funding amount is required for each Successor Agency into the
Public Health and Safety Fund in order to receive approval for new debt
financing or continuation of an Approved Development Project, where there
is not substantial performance;
C. Successor Agency for payments listed in the Recognized Obligation Payment
Schedule;
d. Successor Agency approved administrative costs required to be paid from
former tax increment revenue, with any balance payable to cities, the county,
schools, community college districts, and non-enterprise special districts. The
State Director of Finance would determine the amount to be allocated to the
Public Health and Safety Fund by each agency after needs for enforceable
obligations are taken into account.
Other Matters
1. Allows for the continuation of housing activities by the Successor Agency, which
would be permitted to assume responsibility for housing obligations and to use the
existing balance in the low and moderate income housing fund Set-aside for these
purposes. If the Successor Agency chooses not to assume the housing activity
responsibilities, the funds would be transferred to the local housing authority or to the
Department of Housing and Community Development.
2. Authorizes a city or a county, or a city and a county, that formerly had an RDA, to
borrow available funds up to 2 percent of the total tax increment received by the former
RDA, in order to avert bankruptcy, mitigate the impacts of potential reduction in core
services, or to meet an urgent need to fund a current project. Such borrowing may
occur upon application to the county auditor-controller and subject to terms mutually
agreed upon.
3. Expresses the intent of the Legislature to provide local governments with the means
and tools to further economic development and employment opportunities in
economically distressed areas. In particular, efforts would focus on areas with
significant constraints on development, such as brownfields and former military bases,
and endeavor to foster green technology, alternative technology, and low and moderate
income housing.
4. Provides that that the terms of existing memoranda of understanding with employee
organizations representing former RDA employee would remain in force unless a new
agreement is reached prior to that date. The Successor
Agency will become the employer of all employees of the RDA upon its dissolution
and will assume all obligations under any memoranda of understanding.
5. Specifies that beginning for fiscal years 2012-13, the amounts of additional
property tax received by school districts, county offices of education, charter schools
and community college districts, as a result of the elimination of RDAs, would be in
addition to the Prop 98 minimum funding guarantee. These amounts (as well as
amounts going to other taxing agencies) would increase over time as enforceable
obligations are paid down.
FISCAL EFFECT: Appropriation: Yes Fiscal Com: Yes Local: Yes
DLW:nI 3/15/11 Senate Floor Analyses
SUPPORT/OPPOSITION: NONE RECEIVED
END