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Redevelopment Cleanup Bill Introduced in Assembly

Josh Stephens on
Feb 9, 2012

As redevelopment agencies shut down last week, criticism shifted from the decision to dissolve them in the first place to the method by which they were dissolved. Assembly Bill X1 26 has been roundly decried as sloppy legislation that was, according to some potential scenarios, never intended to be implemented. Critics say that its provisions may hinder successor agencies' ability to make bond payments and that it includes ambiguous language that could leave projects in limbo. 

To correct some of these alleged errors, last week, Assembly Speaker John Pérez (D-Los Angeles), along with six coauthors (all Democrats) introduced AB 1585. The bill would clean up certain provisions of AB X1 26. The bill makes various technical fixes to AB 1x 26 in an attempt to clarify the functions of successor agencies and oversight boards. The bill also seeks to protect affordable housing funds.

Like SB 654, which seeks to protect over $1 billion in affordable housing funds, AB 1585 includes an urgency clause and will require a two-thirds vote. 

Provisions of AB 1585 include:

  • Changes to the "administrative cost allowance" to include temporary increases in order to carry out enforceable obligations. Temporary increases would be subject to oversight board approval. AB 1585 also specifies that employee costs associated with specific project duties are not included as administrative costs, but rather "project costs."
  • Expansion of the definition of "enforceable obligation" to include any loans specific to a project area or other specified obligations including those between a city and redevelopment agency prior to Dec. 31, 2010. Any such obligations would be subject to oversight board approval prior to payment.
  • Allowance of cities to retain responsibility for housing functions previously performed by the redevelopment agency, including low and moderate income housing. Housing funds must be kept in a separate account and at least 80 percent of the funds must be encumbered within three years.

The League of California Cities, a which has led the opposition to the dissolution of redevelopment, calls AB 1585 "a step in the right direction towards addressing some of the concerns raised by cities."

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