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Home My WebLink About1991/04/23 Item 31 April 18, 1991 31b. Sid Morris, Committee Deputy City Manage~ Analysis TO: FROM: Legislative SUBJECT: Legislative I. Requires Council Action SB 776 (Killea) - San Diego/Coronado Bridge: Tolls. This legislation would authorize the City of Coronado to use tolls from the bridge for congestion and pollution through subsidization of alternative forms of transportation. Staff Recommendation: Support II. Addressed bv LeQislative PrOQram thus Requires no Council Action. Transmitted for Your Information Only. SB 1155 (Bergeson) - Redevelopment: Special Supplemental Revenue. This legislation proposes to reduce supplemental revenue to redevelopment agencies. Staff Recommendation: Oppose AB 315 (Friedman) - Redevelopment: Low and Moderate Income Housing. This legislation proposes to increase the current 20% set aside for low and moderate income housing to 40% and 50%. Staff recommendation: Oppose AB 1865 (Houser) - Redevelopment: Sales and Used Tax. This legislation would require redevelopment agencies to share 30% of any increases in sales or used taxes generated from a project assisted by another agency. Staff recommendation: Oppose SCA 11 (Morgan) - General Obligation Bonds - This legislation would allow approval of local General Obligation Bonds by a simple majority of voters, rather than the 2/3rds extraordinary vote requirement. Staff recommendation: Support SB 82 (Kopp) - Property Tax: Revenue Increase to Cities by Closing Loophole for Business Properties that Change Ownership. This legislation would reform transfer of ownership statutes to provide for more frequent reassessment of corporate and partnership property so that these sales are treated more like sales of individuals residences. Staff recommendation: Support. SB 445 (Deddeh) - Cost Recovery for Removal of Asbestos in Public buildings. This legislation would authorize any public entity to bring a civil action against any manufacturer of asbestos containing products for damages based upon the cost of removing or treating materials containing asbestos in buildings or facilities owned by a public entity. Staff recommendation: Support. If you have any questions, please contact me or Iracsema Quilantan at 691-5031. cc: Chuck Cole, Advocation, Inc. 31 b -- J THIS PAGE BlANK ~I b ..J- CITY OF CHULA VISTA LEGISLATIVE ANALYSIS Legislative No. Author Title SB 776 K i 11 ea San Diego/Coronado Bridge: Tolls Sponsor League Position Re 1 ated Bill s As Introduced City of Coronado None N/A March 7, 1991 As Amended Status Pending Senate Transportation Committee: Heari ng - May 7, 1991 N/A Backqround This analysis is being transmitted to you in response to a written communication from the City of Coronado requesting Chula Vista's support of SB 776 which will be heard in the Senate Transportation Committee on May 7, 1991 at 1:30 p.m. Under existing law tolls authorized to be collected for crossing the San Diego/Coronado bridge and the proceeds of the tolls are to be used for bridge operation, maintenance, rehabilitation and improvement, as well as improving approaches to the bridge. SB 776 woul d: Authorize toll s from the bridge to be used, in conjunction to the purposes stated above, to relieve automobile related bridge congestion and pollution through subsidization of alternative forms of transportation incl uding ferry service and connecting mass transit systems. Delete an obsolete provision relating to a study to be completed by July 1, 1989. Impact Th is propos a 1 has no di rect impact on the Ci ty of Chul a Vi sta. It woul d improve the qual ity of 1 ife in Coronado and adjacent areas by authorizing tolls from the bridge to be used for relieving bridge congestion and pollution through subsidization of alternative forms of transportation. Recommendation That the City Council authorize staff to prepare a letter for Mayor's signature in support of SB 776 to the City of Coronado and the appropri ate legislative committees. SB 776 has been reviewed by the City of Chula Vista's Trans it Coordi nator who concurs wi th staff's recommendat ion. Thi s measure is not addressed by the legislative program, this requires Council action. Sec. Requires Action 4/23/91 Support Letter(s) Required Yes--.L No_ '90 Leg Program Date To Counc il Action WPC 3644A!0009Y 31 b. 3 TIllS PAGE BlANK 3Ib.'I ill Dwmfn) APR - 5 /99/ ~ CITV OF CORONADO C"CHYCOUNCll OFFICES ULA VISTA. CA OFFICE OF THE MAYOR 1825 STRAND WAY CORONADO, CA 92118 MARY HERRON MAYOR (619) 522-7322 April 3, 1991 Honorable Leonard Moore 276 Fourth Avenue Chula Vista, CA 92010 RE: SB 776 (KilIea) San Diel!o-Coronado Bridl!e: Tolls Dear Mayor Pro Tern Moore: The City Council of the City of Coronado has been diligently working to see legislation, which would authorize tolls from the bridge to be used for relieving bridge congestion and pollution through subsidization of alternative forms of transportation, introduced. This bill is a result of our own Unified Transportation Plan which stated speci ficall y to request legislation to enable the use of toll revenues for funding of the UTP Alternative Modes Program. Existing law authorizes tolls to be collected for crossing the San Diego-Coronado Bridge and the proceeds of the tolls to be used for bridge operation. maintenance, rehabilitation and improvement, and improving approaches to the bridge. In addition, this measure would authorized tolls from the bridge to relieve automobile- related bridge congestion and pollution through the subsidization of alternative forms of transportation, including, but not limited to, ferry service and connecting mass transit systems. We are extremely pleased in having the bill introduced and would like to have the support from the City of Chula Vista. SB 776 will be heard in the Senate Transportaion Committee on May 7, 1991 at 1:30 p.m.. Senator Bergeson and Senator Killea both represent San Diego on the Committee. The Chairman of the Committee is Senator Kopp. Please help with the passage of SB 776 by submitting letters of support to both the Chairman of the Committee and our own Representatives. 31 D- 5 Coronado will continue to work for the passage of SB 776. If you have any questions or comments, please do not hesitate to contact me. Thank you. Sincerely, IA1 ~~/~lJ~\ Mary Hen'on Mayor <: ,11 ~,;~~~ all, .c, PAGE 1 Display 1991-1992 Bill Text - INFORMATION BILL NUMBER: SB 776 BILL TEXT INTRODUCED BY Senators Killea, Bergeson, Craven, and Deddeh (Coauthors: Assembly Members Alpert, Chacon, Frazee, Gotch, and Hunter) MARCH 7, 1991 An act to amend Section 30796.7 of the Streets and Highways Code, relating to transportation. LEGISLATIVE COUNSEL'S DIGEST SB 776, as introduced, Killea. San Diego-Coronado Bridge: tolls. Existing law authorizes tolls to be collected for crossing the San Diego-Coronado Bridge and the proceeds of the tolls to be used for bridge operation, maintenance, rehabilitation and improvement, and improving approaches to the bridge. This bill would authorize tolls from the bridge to be used, in addition to the purposes stated above, to relieve automobile-related bridge congestion and pollution through subsidization of alternative forms of transportation, including ferry service and connecting mass transit systems. The bill would delete an obsolete provision regarding a study to be completed by July 1, 1986. Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 30796.7 of the Streets and Highways Code is amended to read: 30796.7. (a) Notwithstanding Section 30101 or 30102, except for the purposes of subdivisions (b) and (c), a toll may not be collected from any person crossing the San Diego-Coronado Bridge after the bonds issued to construct the bridge have been retired. (h) The commission may continue to collect tolls for the purposes of bridge operation, maintenance, rehabilitation, and improvement and improving the approaches to the bridge. 3J b..1 PAGE 2 Display 1991-1992 Bill Text - INFORMATION BILL NUMBER: 5B 776 BILL TEXT (0) In addition to the purposes for which tolls may be collected pursuant to subdivision (b), tolls may also be ee::ee~ed fer ~he p~rpeee ef f~ftdiftg a e~~dYT ~e he eefte~e~ed hy ~he depar~Meft~T ef ~rafteper~a~ieft im~revemeft~e afta pre~rame ~e ai%evia~e ~ridge-reia~ed ~rafteper~aeieft pre~ieMeT ~he ee~ay shei% he eempieeea afta e~~mieeed wi~h reeemmeftda~iefte ~e ~he eemmieeieft fte~ :a~er ~haft J~:y :T :986 used to relieve automobile related bridge conQestion and pollution through subsidization of alternative forms of transportation including, but not limited to, ferry service and connecting ~ transit systems . tdt ~he eemmieeieft eha:: eefte~e~ a p~h:ie heariftg fer ~he p~rpeee ef reeeiviftg iftp~~ frem ~he ei~y ef 8aft BiegeT ei~y ef eerOftadOT Saft Siege Aeeeeiaeioft of 6everftMefteST aftd eehere eft eke iee~e ef ~he :eve: ef ~he ~e::e ehargedT Ne~ :a~er ~haft Jaft~ary %T %98TT ~he eemmieeioft eha:: eefteieer ~he p~h:ie iftp~~ aftd ~he depar~mefte~e ee~dr reeemmefteaeiofts e~bmieeed p~re~afte eo subdivision tet aftd deeermifte whee her or nee eo make aay revision ehae may be fteeeeeary in eke bridge eoi% raeeST ~\~.r CITY OF CHULA VISTA LEGISLATIVE ANALYSIS Legislative No. Author Title SB 1155 Bergeson Redevelopment: Special supplemental Revenue Sponsor League Position Related Bills As Introduced Oppose AB 160, SB 2268 March 8, 1990 & SB 1780 (1990) Status As Amended Pending in Senate Local Government Committee BackQround As a part of the State's long-term local government fiscal package (SB 794 - 1984), the Administration and the legislature repealed the Business Inventory Tax and replaced it with the Supplemental Subventions in 1984. The acceptance of the repeal by local government was based on the pledge of the legislature to provide replacement revenue to redevelopment agencies via supplemental subvention payments. Notwithstanding this action, the Governor's administration and legislature have made several attempts to break their commitment and cutback, and possibly eliminate supplemental subvention payments to redevelopment agencies. The loss of this revenue would severely impact Chula Vista and limit its ability to meet debt service obligations. Last year Chula Vista was listed in the "top losers" category which represents 13 redevelopment agencies which would have lost more than $1 million each as a result of the State's budget deficit. Negotiations between the Governor and the legislative leadership resulted in a 25 percent reduction in supplemental subvention forcing the redevelopment agencies of Compton, Southgate and Chula Vista into technical default and credit watch. At our request, Senators Bergeson and Robbi ns immedi ate ly introduced correct i ve action (SB 2268 & SB 1780) addressing the serious problem affecting the credit rating of the red eve 1 opment agenci es for the cities of Chul a Vi sta, Compton and Southgate. As a result, Chul a Vi sta was exempted from the State budget cuts (AS 160, Chapter 449 statutes of 1990) and credit scrutiny lifted. '90 Leg Program Date To Council Action Letter(s) Required Yes-L No_ Sec. HAl8 4/23/91 Dooose WPC 3641A/0009Y 3Ib.~ LEGISLATIVE ANALYSIS CONT'D Legislative No. Title Redevelopment: Special supplemental Revenue SB 1155 Proposed Leqislation SB 1155 (Bergeson) has been introduced to repeal the special supplemental subvention program in its entirety. It appears that this Bill will be the vehicl e for the Governor's admi ni strati on to reduce the suppl emental subvention allocations to redevelopment agencies by 75 percent Statewide to $9.6 million. The specifics of the formula are not yet available, but it is the admini stration' s intent to amend them into SB 1155 once they have been formulated. As introduced, SB 1155 would: Repeal the provisions that provide for these special subventions. Advocation and staff have closely been monitoring this issue. Our strategy has been to ask for a continuance on the special exemption for cities with outstanding debt service obl igations as prescribed by SB 2268 (Bergeson) and SB 1780 (Robbins), which were enacted in 1990. On March 29, 1991, a letter was sent to Senator Bergeson requesting continued support of Supplemental Subvent i on Revenues to fund debt servi ce obl i gat ions for the City of Chul a Vista. A follow-up meeting with Senator Bergeson has been scheduled for Tuesday, March 23, 1991 in Sacramento. Chuck Cole, Legi sl at i ve Advocate and Sid Morris, Deputy City Manager, will meet with Senator Bergeson in an effort to reach some agreement with respect to this issue. Impact The Chula Vista Redevelopment Agency currently receives $1.2 million in supplemental subdivisions and a total debt service of $3,650,000 annually. A State deficit estimated at $12.6 billion has placed supplemental subvention revenues to redevelopment agencies in jeopardy. Specifically in Chula Vista's case, debt service obligations in danger are as follows: In May 1986, Chula Vista sold 38 million in tax allocation bonds to fi nance improvements in its Bayfront/Town Centre Redevelopment Project Areas. The bonds extend to the year 2011 and have an annual debt service of approximately 3.2 million. Chul a Vi sta currently pays $450,000 i n annual debt servi ce for 1982 Parking Facility Certificates, both of which are critical to the revitalization of Chula Vista's infrastructure and its revenue base. The Redevelopment Agency has pledged both its incremental tax revenue and i ts annual tax suppl ementa 1 subvention revenue as security for these bond issues. Even with the State Supplemental Subvention, the Redevelopment Agency is short $150,000 of meeting its debt service requirement. If the State eliminates the suppl ementa 1 subvention revenues as proposed, the Agency revenues woul d then a \ ~ ..10 LEGISLATIVE ANALYSIS CONT'O Legislative No. Title SB 1155 Redevelopment: Special supplemental Revenue fall far short of its legal debt service obligations by over $1.1 million. The Redevelopment Agency would then face financial hardship, potential default on its bond obligations and credit scrutiny. Recommendation That the Legi slat i ve Commi ttee authori ze staff to prepare a 1 etter for the Mayor's signature in opposition to SB 1155 (Bergeson) to be sent to the members of the appropri ate 1 egi slat i ve commi ttee. SB 1155 is addressed bv leqislative oroqram thus requires no Council action. SB 1155 has been revi ewed by the Community Oeve 1 opment Oi rector, Fi nance Oi rector, and City's legislative advocate which concur with staff's recommendation. WPC 3641A alb...ll PAGE 1 Display 1991-1992 Bill Text - INFORMATION BILL NUMBER: SB 1155 BILL TEXT INTRODUCED BY Senator Bergeson MARCH 8, 1991 An act to repeal Chapter 1.5 (commencing with Section 16110) of Part 1 of Division 4 of Title 2 of the Government Code, relating to local revenue. LEGISLATIVE COUNSEL'S DIGEST SB 1155, as introduced, Bergeson. Special supplemental revenue. Existing law provides special supplemental subventions to certain cities, multicounty special districts, and redevelopment agencies which, without these subventions, would have lost revenue because of the repeal of the former personal property tax subvention programs. This bill would repeal the provisions that provide for these special subventions. Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Chapter 1.5 (commencing with Section 16110) of Part 1 of Division 4 of Title 2 of the Government Code is repealed. ~\ b-l1. CITY OF CHULA VISTA LEGISLATIVE ANALYSIS Legislative No. Author Title AB 315 Friedman Redevelopment: Low and Moderate Income Housing Sponsor League Position Related Bills As Introduced Oppose January 24, 1991 As Amended Status Pending Assembly Housing and Community Development BackQround Under the existing community redevelopment law, at least 20 percent of all tax increment revenues must be used by the Agency for i ncreas i ng, improvi ng, and preserving the community's supply of low and moderate income housing. This is done to ensure affordable housing costs to persons and famil ies of specified income 1 evel s unl ess the agency makes one of the fo 11 owi ng fi ndi ngs annually be resolution: 1. That no need exists in the community to improve or increase the supply of low and moderate income housing in a manner which would benefit the project area and the finding is consistent with the housing element of the community's general plan. 2. That some stated percentage 1 ess than 20 percent is suffi ci ent to meet the housing needs of the community and that the finding is consistent with the housing element of the community's general plan. 3. That the existing including community is making a and projected low and its share of the regional substantial effort to meet its moderate income housing needs, housing needs. AB 315 would: Increase that amount of the tax increment revenues allocated for use of low and moderate income housing to 40 percent of the tax increment revenues. For those communities which have not met their share of the housing needs, the Bill would require 50 percent of the tax increment revenues to be used for those purposes until the fair share requirements are met. See. BICA) 4/23/91 Oppose Letter(s) Required Yes-L No_ '90 Leg Program Date To Council Action WPC 3638A/0009Y ~Ib ..13 LEGISLATIVE ANALYSIS CONT'D Legislative No. Title AB 315 Redevelopment: Low and Moderate Income Housing Delete the authority of an agency to certain findings which make these requirements inapplicable. Increase from 30 percent to 60 percent the amount of new or rehabilitated dwelling units developed by a redevelopment agency which are required to be available at affordable housing cost to persons and families of low and moderate income. Increase from 15 percent to 30 percent the amount of new or rehabilitated dwelling units developed by other than the agency which are requi red to be avail abl e at affordabl e hous i ng costs to persons and families of low and moderate income. Provide that, if after five years from the beginning of construction of the housing units, those percentage are not met, the Agency shall make a plan to meet those goals on an annual basis in addition to making up the deficit. Impose new dut i es on redevelopment agenci es re 1 at i ng to the allocation of tax increment revenues. Impose a State mandated local program. Provide that if the Commission on State Mandates determines that this Bill contains costs mandated by the State, reimbursements for those costs shall be made pursuant to those statutory procedures and if the Statewide cost does not exceed $I ,000,000, shall be made from the State's Mandates Claims Fund. Impact As proposed AB 315 will have serious impact on remove local control over important policy area. be opposed on the following basis: By increasing the set aside by 150 percent (from 20 percent to 50 percent), significantly less funding will be available for commercial redevelopment act i vi ty, whi ch produces the increased assessed val uat ion in the project area, whi ch in turn produces the growth in the 20 percent set as i de. Over the long term, we bel i eve that 50 percent of a smaller assessed value tax base will produce less money for housi ng than 20 percent of a rapidly growi ng assessed value tax base. red eve 1 opment agenc i es and Specifically AB 315 should The increase of 20 percent to 50 percent will impact all project areas immediately. No provision has been made to allow repayment of indebtedness and contractual obligations first, or to complete existing plans before any increase in the set aside amount. ~\b.l~ LEGISLATIVE ANALYSIS CONT'D Legislative No. Title AB 315 Redevelopment: Low and Moderate Income Housing AB 315 also repeals the current law statutory waiver which permits an agency to make a housing set aside of less than 20 percent when there is no demonstrated need, i.e. if the agency (city) has already met its share of the regi ona 1 need for low and moderate income hous i ng units. Why shouldn't agency divert funds away from commercial redevelopment to low income housing when there is no need for this type of housing within the city? AB 315 applies more severely to pre-lg]] project areas than to project areas adopted after than date. It does this by making a debt of the project (to be repaid by July 1, 1996) 40 percent or 50 percent of the tax increment which has been generated since the 1985-86 fiscal year. In effect, pre-1977 project areas will have to go back six years while post-1977 project areas would begin setting aside either 40 percent or 50 percent no sooner than January 1, 1992. The amount of money already set as i de for hous i ng can already exceed 40 percent of the actual dollars available to an agency after pass through of tax increments to other taxi ng ent it i es, since the 20 percent set aside is usually calculated on the "gross" tax increment prior to pass throughs. Recommendation That the Legislative Committee authorize staff to prepare a letter for the Mayor's signature in opposition to AB 315 to be sent to the appropriate legislative committee. AB 315 is addressed bv the leqislative oroqram and requires no Council action. The Community Development Director and Finance Director have reviewed AB 315 and concur with staff's recommendation. WPC 3638A ~\ b ./S PAGE 1 Display 1991-1992 Bill Text - INFORMATION BILL NUMBER: AB 315 BILL TEXT INTRODUCED BY Assembly Member Friedman JANUARY 24, 1991 An act to amend Sections 33334.2, 33334.6, and 33413 of the Health and Safety Code, relating to redevelopment. LEGISLATIVE COUNSEL'S DIGEST AB 315, as introduced, Friedman. Redevelopment: Low- and Moderate-Income Housing Fund. (1) Under the existing Community Redevelopment Law, not less than 20% of all tax increment revenues which are allocated to a redevelopment agency are required to be used by the agency for the purposes of increasing, improving, and preserving the community's supply of low- and moderate-income housing available at affordable housing cost to persons and families of specified income levels unless the agency makes certain annual findings. Existing law requires at least 30% of all new or rehabilitated dwelling units developed by an agency to be available at affordable housing cost to persons and families of low or moderate income, of which not less than 50% are required to be available to, and occupied by, very low income households. Existing law also requires at least 15% of all new or rehabilitated dwelling units developed within the project area by other than the agency to be available at affordable housing cost to persons and families of low or moderate income, of which not less than 40% are required to be available to, and occupied by, very low income households. This bill would increase that amount of the tax increment revenues allocated for use for 10w- and moderate income housing to 40% of the tax increment revenues. Additionally, for those communities which have not met their share of the housing needs, as specified, the bill would require 50% of the tax increment revenues to be used for those purposes until the fair share requirements are met. The bill would delete the authority of an agency to certain findings which make these requirements inapplicable. The bill would also increase from 30% to 60% the amount of new or rehabilitated dwelling units developed by a redevelopment agency which are required to be available at affordable housing cost to persons and families of ~\ '0 .Iip PAGE 2 Display 1991-1992 Bill Text - INFORMATION BILL NUMBER. AB 315 BILL TEXT low or moderate income and would increase from 15\ to 30\ the amount of new or rehabilitated dwelling units developed by other than the agency which are required to be available at affordable housing cost to persons and families of low or moderate income. The bill would also provide that, if after 5 years from the beginning of construction of the housing units, those percentages are not met, the agency shall promulgate a plan to meet these goals on an annual basis in addition to making up the deficit. Because this bill would impose new duties on redevelopment agencies relating to the allocation of tax increment revenues, the bill would impose a state-mandated local program. (2) 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, including the creation of a state Mandates Claims Fund to pay the costs of mandates which do not exceed $1,000,000 statewide and other procedures for claims whose statewide costs exceed $1,000,000. This bill would provide that, if the Commission on State Mandates determines that this bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to those statutory procedures and, if the statewide cost does not exceed $1,000,000, shall be made from the State Mandates Claims Fund. Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program. yes. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS. SECTION 1. Section 33334.2 of the Health and Safety Code is amended to read: 33334.2. (a) Not less than 29 40 percent of all taxes which are allocated to the agency pursuant to Section 33670 shall be used by the agency for the purposes of increasing, improving, and preserving the community's supply of low- and moderate-income housing available at affordable housing cost, as defined by Section 50052.5, to persons and families of low or moderate income, as defined in Section 50093, and very low income households, as defined in Section 50105 7 ~ft~ess efte ef ~he fe~~ewiftg fiftdiftgs is made ann~a~~y BY reee~~~ien~ tit ~ha~ fte ftees exis~s ift ~he eeMM~fti~y ~e impreve er ifterease ~he e~pp~y ef ~ew- and medera~e-ineeme heaein~ in a manner whieh we~~d Benefi~ ~he pre;ee~ area and ~ha~ ~hie findin~ ie eeneie~en~ wi~h ~he he~siftg e~emeft~ ef ~he eeMM~ftiey~e geftera~ p~aft req~ires BY Ar~ie~e i9T6 teemmenein~ wi~h Bee~ien 65589t ef ehap~er 3 ef Bivieien i ef ~i~~e T ef ~he 8everftMen~ eedeT t2t ~ha~ eeme e~a~ed pereen~a~e ~eee ~han 29 pereen~ ef ~he ~axee whieh are a~~eea~ed ~e ~he a~eney p~re~an~ ~e Bee~ien 336T9 ie e~ffieien~ ~e mee~ ~he he~ein~ neede ef ~he eemm~ni~y and ~ha~ ~hie findin~ ie eeneie~en~ wi~h ~he he~ein~ e~emen~ ef ~he eemm~ni~y~e ~enera~ p~an required BY Ar~ie~e i9T6 teemmenein~ wi~h 3,\'0..17 Display 1991-1992 Bill Text - INFORMATION BILL NUMBER: AB 315 BILL TEXT 8ee~ieft 65588t ef ehep~er a ef Bivieieft i ef ~i~ie ~ ef ~he 8everftMeft~ eeaeT tat ~he~ ~he eemm~fti~y ie mekift~ a e~be~aft~iai effer~ ~e mee~ i~e eKie~ift~ aftd pre;ee~ed he~eift~ fteedeT iftei~dift~ i~e ehare ef ~he re~ieftai he~eift~ fteedeT wi~h reepee~ ~e pereefte aftd famiiiee ef iow aaa Medera~e ifteemey par~ie~iariy very iow ifteome fte~eeheideT as ideft~ified ift ~he he~eift~ eiemeft~ ef ~he eemm~fti~y~e ~efterai piaft re~ired by Ar~ieie iST6 teemmefteift~ wi~h 8ee~ieft 65588t ef ehap~er a ef Bivieieft i ef ~i~ie ~ ef ~he 6everftMeft~ eedeT aftd ~ha~ ~hie effer~T eefteie~ift~ ef diree~ fiftafteiai eeft~rib~~iefte ef ieeai f~ftde ~eed ~e iftereaee aftd impreve ~he e~ppiy ef he~eift~ afferdabie ~e ~ersefte aftd families of lew or medera~e ifteeme aftd very lew ineeme he~eeheideT ie e~ivaieft~ ift impae~ ~e ~he f~ftde e~herwiee re~ired ~e be ee~ aeide p~re~aft~ ~e ~hie eee~ieftT fft addi~ieft ~e afty e~her lees! rUftdST ~heee diree~ fiftftfteiai eeft~ribd~iefte may ifteldde federai er e~a~e ~raft~e paid diree~iy ~e a eemm~fti~y aftd whieh ~he eemm~fti~y hae ~he dieere~ieft ef ~eift~ fer ~he p~rpeeee fer whieh mefteye ift ~he bew aftd Medera~e ffteeme He~eift~ P~ftd may be ~eedT ~he ie~ieia~ive bedy ehaii eefteider ~he fteed whieh eaft be reasonably fereeeeft beeadse ef diepiaeemefte of persons aftd families of lew or mederaee ineeme or very lew ifteeme hOdseholds from wiehiftT er as;aeene eoy ehe pre;eee aresy beeadse of iftereaeed empieymefte epperedftieiesy or beeSdse of any eeher direee or iftdireee ree~i~ ef impiemeft~a~ieft ef ~he redeveiepmeft~ piaftT He fiftdift~ ~ftder ~hie e~bdivieieft may be made ~ft~ii ~he eemm~fti~y hae previded or eftsdred ehe avaiiabiliey of replaeemefte dweiiift~ dftiee as defifted in Seeeieft 334~~T2 aftd ufteii ie hae eempiied wieh efte previsieas ef Ar~ieie 9 teemmefteift~ wi~h Bee~ieft aa4i8tT fft makift~ ~he de~ermifte~ieft ~ha~ e~her fiftafteiai eeft~rib~~iefte are e~ivaieft~ ift impae~ p~re~eft~ ~e ~hie e~bdivieieft. ~he a~eftey ehaii iftei~de eftiy ~heee fiftafteiai eeft~rib~~iefte whieh are diree~iy reia~ed ~e pre~rame er ae~ivi~iee a~~herized ~ftder e~bdivieieft tet ef ~hie 8ee~ieaT tbt Wi~hift is daye feiiewift~ ~he makift~ ef a fiftdift~ ~ftder 8~8eivisiea tat, ~he a~eftey sha%% eefte ~he Bepar~meft~ e~ He~8ift~ aftd eemm~fti~y Beveiepmeft~ a eepy ef ~he fiftdift~T iftei~dift~ ~he ~ae~~a% ift~erma~ieft e~pper~iftg ~he ~ifteift~T tet fft afty ii~i~a~ieft ~e ehaiieft~e er a~~aek e fiftdift~ made ~ftder para~raph titT t~tT er tat ef e~bdivieieft tat. ~he b~rdeft ehaii be ~peft ~he a~eftey ~e ee~abiieh ~ha~ ~he fiftdift~ ie e~pper~ed by e~be~aft~iai evideftee ift ii~h~ ef ~he eft~ire reee~d befere ~he a~efteYT tdt ~ If! community has not met its share of the housing need for low and very low income households, as defined in Section 65584 of the Government Code, notwithstanding the first sentence of this subdivision, 50 percent of all taxes shall be deposited into the Low and Moderate Income Housing Fund established pursuant to Section 33334.3 and used for the purposes of increasing, improving, and preserving the community's supply of low- and moderate-income housing available at affordable housing cost, as defined ~ Section ~\'o ..if PAGE 3 PAGE 4 Display 1991-1992 Bill Text - INFORMATION BILL NUMBER: AB 315 BILL TEXT 50052.5, to persons and families of low or moderate income, ~ defined Section 50052.5, to persons and families of low ~ moderate income, as defined until the fair share requirements ~ met. 1El Nothing in this section shall be construed as relieving any other public entity or entity with the power of eminent domain of any legal obligations for replacement or relocation housing arising out of its activities. tet 1Sl In carrying out the purpose of this section, the agency may exercise any or all of its powers, including the following: (1) Acquire real property or building sites subject to the provisions of Section 33334.16. (2) Improve real property or building sites with onsite or offsite improvements, but only if the improvements directly and specifically improve or increase the community's supply of low- or moderate-income housing. (3) Donate real property to private or public persons or entities. (4) Finance insurance premiums pursuant to Section 33136. (5) Construct buildings or structures. (6) Acquire buildings or structures. (7) Rehabilitate buildings or structures. (8) Provide subsidies to, or for the benefit of, very low income households, as defined by Section 50105, lower income households, as defined by section 50079.5, or persons and families of low or moderate income, as defined by Section 50093, to the extent those households cannot obtain housing at affordable costs on the open market. Housing units available on the open market are those units developed without direct government subsidies. (9) Develop plans, pay principal and interest on bonds, loans, advances, or other indebtedness, or pay financing or carrying charges. (10) Maintain the community's supply of mobilehomes. (11) Preserve the availability to lower income households of affordable public entities and which are threatened with imminent conversion to market public entities and which are threatened with imminent conversion to market rates. tft ~he a~eftey may ~ee ~heee f~ftde ~e mee~T ~ft wheie er ~ft par~T ~he repiaeemeae he~e*a~ prev*e*eae *a Seee*ea a34%3~ HeweverT aeeh*a~ *" ~hie repiaeeMe"~ heueiag previeieae *a 8ee~iea 334i3T HeweverT fte~hift~ ift ~hie eee~ieft ehaii 8e eefte~rued as iiMi~ift~ ift afty way ~he re~iremeft~e ef ~ha~ eee~ieftT t~t ~ The agency may use these funds inside or outside the project area. The agency may only use these funds outside the project area upon a of the agency and the legislative body that such use will be of benefit to the project. The determination by the agency and the legislative body shall be body shall be final and conclusive as to the issue of benefit to the project area. The Legislature finds and declares that the provision of replacement housing pursuant to Section 33413 is always of benefit to a project. Unless the legislative body finds before the redevelopment plan is adopted, that the provision of low- and moderate-income housing outside the project area will be of benefit to the project, the project area shall include property suitable for low- and moderate-income housing. ':l\b.. I~ PAGE 5 Display 1991-1992 Bill Text - INFORMATION BILL NUMBER: AB 315 BILL TEXT tht 1!l The Legislature finds and declares that expenditures or obligations incurred by the agency pursuant to this section shall constitute an indebtedness of the project. tit 1il The requirements of this section shall only apply to taxes allocated to a redevelopment agency for which a final redevelopment plan is adopted on or after January 1, 1977, or for any area which is added to a project by an amendment to a redevelopment plan, which amendment is adopted on or after ~he effee~iYe sa~e ef ~hie eee~ieft January lL 1977. An agency may, by resolution, elect to make all or part of the requirements of this section applicable to any redevelopment project for which a redevelopment plan was adopted prior to January 1, 1977, subject to any indebtedness incurred prior to the election. SEC. 2. Section 33334.6 of the Health and Safety Code is amended to read: 33334.6. (a) The Legislature finds and declares that the provision of housing is itself a fundamental purpose of the Community Redevelopment Law and that a generally inadequate statewide supply of decent, safe, and sanitary housing affordable to persons and families of low or moderate income, as defined by Section 50093, threatens the accomplishment of the primary purposes of the Community Redevelopment Law, including job creation, attracting new private investments, and creating physical, economic, social, and environmental conditions to remove and prevent the recurrence of blight. The Legislature further finds and declares that the provision and improvement of affordable housing, as provided by Section 33334.2, outside of redevelopment project areas can be of direct benefit to those projects in assisting the accomplishment of project objectives whether or not those redevelopment projects provide for housing within the project area. The Legislature finds and determines that the provision of affordable housing by redevelopment agencies and the use of taxes allocated to the agency pursuant to subdivision (b) of section 33670 is of statewide benefit and of particular benefit and assistance to all local governmental agencies in the areas where the housing is provided. (b) This section is applicable to all project areas, or portions of area, or portion of a project area, for which a resolution was adopted pursuant to subdivision tit ~ of Section 33334.2 is subject to this section. Project areas subject to this section which are merged prier ~eT er eft er af~erT Jaft~ary %, %986T are subject to the requirements of both this section and section 33487. The deposit of taxes into the Low and Moderate Income Housing Fund in compliance with either this section or Section 33487 shall satisfy the requirements of both sections in the year those taxes are deposited. (c) Except as otherwise permitted by subdivisions (d) and (e), not less than ~e 40 percent of the taxes allocated to the agency pursuant to Section 33670 from project areas specified in subdivision (b) for the 1985-86 fiscal year and each succeeding fiscal year shall be deposited into the Low and Moderate Income Housing Fund established pursuant to Section 33334.3 and used for the purposes set forth in Section 33334.2 T ~ft%eee ~he a~eftey, by reee%~~ieft, Makee efte ef ~he fiftsift~e seeeribes ift ~ara~ra~he t%t ~e t3tT ifte%~eiYeT ef e~bsiyieieft tat ef See~ieft 33334T~T a\~-ZO PAGE 6 Display 1991-1992 Bill Text - INFORMATION BILL NUMBER, AB 315 BILL TEXT S~Bd~v~e~ene tBt and tet ef See~~en 33334TE app~y ~f an ageney Makee any ef ~heee f~nd~ng. If ~ community has not met its share of the housing need for low and very low income households, as defined in Section 65584 of the Government Code, notwithstanding the first sentence of this subdivision, 50 percent of all taxes shall be deposited into the Low and Moderate Income Housing Fund established pursuant to section 33334.3 and used for the purposes of increasing, improving, and preserving the community's supply of low- and moderate-income housing available at affordable housing cost, !! defined ~ moderate-income housing available at affordable housing cost, as defined ~ Section 50052.5, to persons and families of low or moderate income, !! defined in Section 50093, and very low income households, as defined in section 50105, until the fair share requirements ~ met. (d) In any fiscal year, the agency may deposit less than the amount required by subdivision (c) into the Low and Moderate Income Housing Fund if the agency finds that the difference between the amount deposited and the amount required by subdivision (c) is necessary to make payments under existing obligations of amounts due or required to be committed, set aside, or reserved by the agency during that fiscal year and which are used by the agency for that purpose. For purposes of this section, "existing obligations" means the principal of, and interest on, loans, moneys advanced to, or indebtedness (whether funded, refunded, aSBumed, or otherwise) incurred by the agency to finance or refinance, in whole or in part, any redevelopment project existing on, and created prior to January 1, 1986, and contained on the statement of existing obligations adopted pursuant to subdivision (f). Obligations incurred on or after January 1, 1986, shall be deemed existing obligations for purposes of this section if the net proceeds are used to refinance existing obligations contained on the statement. (e) In each fiscal year prior to July 1, 1996, the agency may deposit less than the amount required by subdivisions (c) and (d) into the Low and Moderate Income Housing Fund if the agency finds that the deposit of less than the amount required by those subdivisions is necessary in order to provide for the orderly and timely completion of public and private projects, programs, or activities approved by the agency prior to January 1, 1986, which are contained on the statement of existing programs adopted pursuant to subdivision (f). Approval of these projects, programs, and activities means approval by the agency of written documents which demonstrate an intent to implement a specific project, program, or activity and is not limited to final approval of a specific project, program, or activity. (f) Any agency which deposits less than the amount required by subdivision (c) into the Low and Moderate Income Housing Fund pursuant to subdivision (d) or (e) shall adopt prior to September 1, 1986, by resolution, after a noticed public hearing, a statement of existing obligations or a statement of existing programs, or both. (1) The agency shall prepare and submit the proposed statement to the legislative body and to the Department of Housing and Community Development prior to giving notice of the public hearing. Notice of the time and place of the public hearing shall be transmitted to the Department of Housing and ~\ '0.. ~\ PAGE 7 Display 1991-1992 Bill Text - INFORMATION BILL NUMBER: AB 315 BILL TEXT Community Development at least 15 days prior to the public hearing and notice of the time and place of the public hearing shall be published in a newspaper of general circulation in the community once a week for at least two successive weeks prior to the public hearing. The legislative body shall maintain a record of the public hearing. (2) A copy of the resolution adopted by the agency, together with any amendments to the statement of the agency, shall be transmitted to the Department of Housing and Community Development within 10 days following adoption of the resolution by the agency. (3) A statement of existing obligations shall describe each existing obligation and, based upon the best available information, as determined by the agency, list the total amount of the existing obligation, the annual payments required to be made by the agency pursuant to the existing obligation, and the date the existing obligation will be discharged in full. (4) A statement of existing programs shall list the specific public and private projects, programs, or activities approved prior to January 1, 1986, which are necessary for the orderly completion of the redevelopment plan as it existed on January 1, 1986. No project, program, or activity shall be included on the statement of existing programs unless written evidence of the existence and approval of the project, program, or activity prior to January 1, 1986, is attached to the statement of existing programs. (g) If, pursuant to subdivision (d) or (e), the agency deposits less than %9 40 percent of the taxes allocated to the agency pursuant to Section 33670 in the 1985-86 fiscal year or any subsequent fiscal year in the Low and Moderate Income Housing Fund, the amount equal to the difference between %9 40 percent of the taxes allocated to the agency pursuant to Section 33670 for each affected project and the amount deposited that year shall constitute a deficit of the project. The agency shall adopt a plan to eliminate the deficit in subsequent years as determined by the agency. (h) The obligations imposed by this section, including deficits, if any, created under this section, are hereby declared to be an indebtedness of the redevelopment project to which they relate, payable from taxes allocated to the agency pursuant to Section 33670, and shall constitute an indebtedness of the agency with respect to the redevelopment project until paid in full. (i) In any litigation to challenge or attack a statement of existing obligations, the decision by the agency after the public hearing to include an existing obligation on the statement of existing obligations, or the decision by the agency after the public hearing to include a project, program, or activity on the statement of existing programs, the court shall uphold the action of the agency unless the court finds that the agency has abused its discretion. The Legislature finds and declares that this standard of review is necessary in order to protect against the possible impairment of existing obligations, programs, and activities because agencies with project areas adopted prior to January 1, 1977, have incurred existing obligations and have adopted projects, programs, and activities with the authority to receive and pledge the entire allocation of funds authorized by Section 33670. SEC. 3. Section 33413 of the Health and Safety Code is amended to read: 33413. (a) Whenever dwelling units housing persons and families of low or moderate income are destroyed or removed from the low- and moderate-income housing market as part of a redevelopment project which is subject to a ~\b ..11. PAGE 8 Display 1991-1992 Bill Text - INFORMATION BILL NUMBER: AB 315 BILL TEXT written agreement with the agency or where financial assistance has been provided by the agency, the agency shall, within four years of the destruction or removal, rehabilitate, develop, or construct, or cause to be rehabilitated, developed, or constructed, for rental or sale to persons and families of low or moderate income, an equal number of replacement dwelling units which have an equal or greater number of bedrooms as those destroyed or removed units at affordable housing costs within the territorial jurisdiction of the agency. When dwelling units are destroyed or removed after September 1, 1989, 75 percent of the replacement dwelling units shall replace dwelling units available at affordable housing cost in the same income level of very low income households, lower income households, and persons and families of low and moderate income, as the persons displaced from those destroyed or removed units. (b) (1) At least 39 60 percent of all new or rehabilitated dwelling units developed by an agency shall be available at affordable housing cost to persons and families of low or moderate income. Not less than 50 percent of the dwelling units required to be available at affordable housing cost to persons and families of low or moderate income shall be available at affordable housing cost to, and occupied by, very low income households. (2) At least ~5 30 percent of all new or rehabilitated dwelling units developed within the project area by public or private entities or persons other than the agency shall be available at affordable housing cost to persons and families of low or moderate income. Not less than 40 percent of the dwelling units required to be available at affordable housing cost to persons and families of low or moderate income shall be available at affordable housing cost to very low income households. (3) The requirements of this subdivision shall apply independently of the requirements of subdivision (a) and in the aggregate to housing made available pursuant to paragraphs (1) and (2), respectively, and not to each individual case of rehabilitation, development, or construction of dwelling units. However, if, after five years from the beginning of construction of the housing units, the percentages in paragraphs ill and ~ are not met, the agency shall promulgate! plan to meet these goals on an annual basis in addition to making ~ the deficit. (c) The agency shall require that the aggregate number of replacement dwelling units and other dwelling units rehabilitated, developed, or constructed pursuant to subdivision (a) or (b) remain available at affordable housing cost to persons and families of low income, moderate income, and very low income households, respectively, for the longest feasible time, as determined by the agency, but for not less than the period of the land use controls established in the redevelopment plan, except to the extent a longer period of time may be required by other provisions of law. If land on which those dwelling units are located is deleted from the project area, the agency shall continue to require that those units remain affordable as specified in the previous sentence. These requirements shall be made enforceable in the same manner as provided in subdivision (e) of Section 33334.3. (d) (1) This section applies only to redevelopment projects for which a final redevelopment plan is adopted pursuant to Article 5 (commencing with Section 33360) on or after January 1, 1976, and to areas which are added to a project area by amendment to a final redevelopment plan adopted on or after ~\ b · 2. ~ PAGE 9 Display 1991-1992 Bill Text - INFORMATION BILL NUMBER: AB 315 BILL TEXT January 1, 1976. In addition, subdivision (a) shall apply to any other redevelopment project with respect to dwelling units destroyed or removed from the low- and moderate-income housing market on or after January 1, 1996, irrespective of the date of adoption of a final redevelopment plan or an amendment to a final redevelopment plan adding areas to a project area. Additionally, any agency may, by resolution, elect to make all or part of the requirements of this section applicable to any redevelopment project of the agency for which the final redevelopment plan was adopted prior to January 1, 1976. (2) An agency may, by resolution, elect to require that whenever dwelling units housing persons or families of low or moderate income are destroyed or removed from the low- and moderate-income housing market as part of a redevelopment project, the agency shall replace each dwelling unit with up to two replacement dwelling units pursuant to subdivision (a). (e) Except as otherwise authorized by law, this section does not authorize an agency to operate a rental housing development beyond the period reasonably necessary to sell or lease the housing development. (f) Notwithstanding subdivision (a), the agency may replace destroyed or removed dwelling units with a fewer number of replacement dwelling units if the replacement dwelling units meet both of the following criteria: (1) The total number of bedrooms in the replacement dwelling units equal or exceed the number of bedrooms in the destroyed or removed units. Destroyed or removed units having one or no bedroom are deemed for this purpose to have one bedroom. (2) The replacement units are affordable to the same income level of households as the destroyed or removed units. (g) "Longest feasible time," as used in this section, includes, but is not limited to, unlimited duration. SEC. 4. Notwithstanding Section 17610 of the Government Code, if the by the state, reimbursement to local agencies and school districts for those by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code. If the statewide cost of the reimbursement shall be made from the State Mandates Claims Fund. Notwithstanding Section 17580 of the Government Code, unless otherwise specified in this act, the provisions of this act shall become operative on the specified in this act, the provisions of this act shall become operative on the same date that the act takes effect pursuant to the California Constitution. ~\~-~~ CITY OF CHULA VISTA LEGISLATIVE ANALYSIS Legislative No. Author Title AB 1865 Hauser Redevelopment: Sales and Use Tax Sponsor League Position Related Bills As Introduced Oppose March 8, 1991 As Amended Status Pending Assembly Housing and Community Development Backaround Under exi st i ng community redevelopment 1 aw, a redevelopment agency is authorized to conduct redevelopment activities within a project area to eliminate certain blighted conditions. AB 1865 would: Require redevelopment agencies to "share" an assisting publ ic agency (county, school, special district, etc.) 30 percent of any increases in sales or use taxes generated from a project "assisted" by an agency. Impact This Bill was introduced by the chairperson of the Assembly Housing and Community Development Committee. The Bill will require redevelopment agencies to share 30 percent of any increases in sales or use taxes generated from a project "ass i sted" by an agency. The word "ass i sted" is not cl early defi ned in the Bill. This Bill has serious flaws and mandates significant administrative effort to track sales tax collection by parcel, regardless of change of ownership or use. The Bill appears to be an attempt to stop the "pirating" of large sales tax producing businesses by one city at the expense of another. Presuming that it applies to the city sales tax, AB 1865 would require allocation in the following manner: 1) Sales taxes "historically" produced on the property or paid as done in the past. "Historically" is defined as "the average allocation of the three years previous to the redevelopment agency's activity." '90 Leg Program Date To Council Action Sec. BIlA) 4/23/91 Oppose Letter(s) Required Yes-L No_ WPC 3637A/0009Y 3Ib..Z5 LEGISLATIVE ANALYSIS CONT'D Legislative No. Title AB IB65 Redevelopment: Sales and Use Tax 2) Sales taxes above the historic base are allocated as follows: a) 70 percent to the taxing entity (presuming or the redevelopment agency) . b) 30 percent to be evenly distributed to the cities and the county in which the taxing entity is located and which have a per capita income level below the Statewide average. Recommendation That the Legislative Committee authorize staff to prepare a letter for the Mayor's signature in opposition to AB 1865 to be sent to members of the appropriate committee. AB 1865 is addressed by the leQislative DrOQram. thus. requires no Council action. Community Development and Finance have reviewed AB 1865 (Hauser) and concur with staff's recommendation. WPC 3637A ~\ b . lG. PAGE 1 Display 1991-1992 Bill Text - INFORMATION BILL NUMBER: AB 1865 BILL TEXT INTRODUCED BY Assembly Member Hauser MARCH 8, 1991 An act to add Section 33680 to Article 6 (commencing with Section 33670) of Chapter 6 of Part 1 of Division 24 of the Health and Safety Code, relating to redevelopment. LEGISLATIVE COUNSEL'S DIGEST AB 1865, as introduced, Hauser. Redevelopment: sales and use tax. Under the existing Community Redevelopment Law, a redevelopment agency is authorized to conduct redevelopment activities within a project area to eliminated certain blighted conditions. This bill would require, after any redevelopment agency provides assistance to a property on which a retailer makes a sale upon which a sales or use tax is generated or will be generated, the portion of taxes above the historical base level to be allocated to the respective taxing agencies and to cities and the county in which any taxing entity is contained according to a specified formula. The bill would define the phrase "historical base level" for these purposes. The bill would require each local government to provide written notice of its intent to receive a portion of those taxes and would require taxes received to be deposited in each locality's general fund. By imposing new duties upon the local agency required to collect and allocate these taxes, the bill would impose a state-mandated local program. 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, including the creation of a state Mandates Claims Fund to pay the costs of mandates which do not exceed $1,000,000 statewide and other procedures for claims whose statewide costs exceed $1,000,000. This bill would provide that, if the Commission on State Mandates determines that this bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to those statutory procedures and, if the statewide cost does not exceed $1,000,000, shall be made from the State Mandates Claims Fund. Vote: majority. Appropriation: no. Fiscal committee: yes. ~\ 'b .1.1 PAGE 2 Display 1991-1992 Bill Text - INFORMATION BILL NUMBER: AB 1865 BILL TEXT state-mandated local program: yes. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 33680 is added to Article 6 (commencing with Section 33670) of Chapter 6 of Part 1 of Division 24 of the Health and Safety Code, to read: 33680. (a) After any redevelopment agency provides assistance to a property on which a retailer makes a sale upon which a sales or use tax is generated or will be generated, the revenue received shall be allocated as follows: (1) That portion of taxes which had historically been produced on the property shall be allocated to and when collected shall be paid to the respective taxing agency or agencies. (2) That portion of taxes above the historical base level shall be allocated by the following formula: (A) Seventy percent shall go the respective taxing entity. (B) Thirty percent shall be evenly distributed to the cities and the county in which the taxing entity is contained and which have a per capita income level below the statewide average. (b) The historical base tax allocation means the average allocation of the three years previous to the redevelopment agency activity. The legislative body shall certify, at the time it approves the redevelopment agency expenditure, the historical base tax allocation. (0) For the purpose of receiving a share of taxes pursuant to this section, the local government shall provide written notice and verification to all localities within the county. City and county eligibility shall be evaluated as the income calculations are publicly made available a However, eligibility shall not be reevaluated more than once a year. (d) Taxes received pursuant to this section shall be deposited in each locality's general fund. (e) The city, county, city and county, or the redevelopment agency shall allocate the tax revenues as specified in this section. Allocation shall be made on a regular schedule consistent with the locality receiving its allocation of tax revenues from the state. SEC. 2. Notwithstanding Section 17610 of the Government Code, if the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code. If the statewide cost of the claim for reimbursement does not exceed one million dollars ($1,000,000), reimbursement shall be made from the State Mandates Claims Fund. Notwithstanding Section 17580 of the Government Code, unless otherwise specified in this act, the provisions of this act shall become operative on 3l~,1J Display 1991-1992 Bill Text - INFORMATION BILL NDMBER: AB 1865 BILL TEXT the same date that the act takes effect pursuant to the California Constitution. 3\b..~' PAGE 3 THIS PAGE BLANK ~ lb. !>o CITY OF CHULA VISTA LEGISLATIVE ANALYSIS Legislative No. Author Title SCA 11 Morgan General Obligation Bonds Sponsor League Position Related Bills As Introduced Support SCA 2 - 1990 Status As Amended Pending in the Senate Local Government Committee Backoround The California Constitution (Prop. 13) generally limits the maximum ad valorem tax on real property to one percent of the assessed value. A rate in excess of the one percent 1 imit is permitted only to pay the principle and interest charges on indebtedness approved by the voters pri or to Jul y 1, 1978, and bonded indebtedness incurred for acqui sit i on or improvement of real property approved by a two thirds vote of the electorate on or after July 1, 1978. Additionally, existing law (Article XVI, Section 18 of the California Constitution) generally prohibits cities, counties and school districts i ncurri ng any 1 i abil ity on indebtedness whi ch exceeds the annual income and revenues of the ent i ty without a two thi rds popul ar vote. Moreover exi st i ng law provides that special districts without property tax authority (generally transit and financing districts) may issue revenue bonds financed by sales tax with a majority vote. Special districts with property tax authority may issue revenue bonds financed by increased property tax only with a two thirds vote. SCA 11 woul d: Allow approval of local general obligation bonds by a simple majority of voters, rather than the current two thirds extraordinary vote requ i rement. Provide an exception from the property tax 1 imitation for property taxes to pay the interest and redemption charges for bonded indebtedness and provide authori ty for ci ties, counties, and speci a 1 districts to acquire real property or accompl ish a capital improvement project, including the furnishing and equipping of these facilities, with approval by a simple majority of voters beginning on July 1, 1992. 4/23/91 SUDDort Letter(s) Required Yes--L No_ '90 Leg Program Sec. B(l) Date To Counc il Action WPC 3642A/0009Y 3Ib..3\ LEGISLATIVE ANALYSIS CONT'D Legislative No. Title General Obligation Bonds SCA 11 Imoact Local agenci es are in desperate need of funds to repai r and expand 1 oca 1 infrastructure, i ncl udi ng school s, roads, 1 i brari es, parks, sewer and water faci 1 it i es. SCA 11 woul d allow 1 oca 1 agenci es to issue short term general obligation bonds without a two thirds vote requirement. This legislation is long overdue and necessary to provide publ ic services at the local level. Additionally, this measure would no more than give local agencies the same opportunity for approval of bond issues that the state currently enjoys. Re lated 1 egi sl at i on: SCA 2 (Leonard) - Local Government Bonds supported by Council on August 21, 1990. Recommendation Staff has prepared a letter for the Mayor's signature in support of SCA 11 to be sent to members of the appropriate legislative committee. SCA 11 is addressed by the legislative program thus requires no Council action. The Finance Director concurs with staff's recommendation. WPC 3642A 'a\ \> . '!1. PAGE 1 Display 1991-1992 Bill Text - INFORMATION BILL NUMBER, SCA 11 BILL TEXT AMENDED IN SENATE APRIL 1, 1991 INTRODUCED BY Senator Morgan (Principal coauthor: Senator Presley) FEBRUARY 19, 1991 Senate Constitutional Amendment No. 11 A resolution to propose to the people of the State of California an amendment to the Constitution of the State, by amending Section 1 of Article XIIIA thereof, and by amending Section 18 of, and adding Section 20 to, Article XVI thereof, relating to public finance. LEGISLATIVE COUNSEL'S DIGEST SCA 11, as amended, Morgan. Bonded indebtedness. (1) The California Constitution limits ad valorem property taxes to 1% of the full cash value of the property, except for property taxes to pay the interest and redemption charges either on indebtedness approved by the voters prior to July 1, 1978, or on bonded indebtedness for the acquisition and improvement of real property approved on or after July 1, 1978, by 2/3 of the voters voting on the proposition. This measure would also provide an exception from the property tax limitation for property taxes to pay the interest and redemption charges on bonded indebtedness incurred by cities, counties, and special districts L including school districts, for the acquisition of real property or accomplishing a capital improvement project, including the furnishing and equipping thereof, approved on or after July 1, 1992, by a majority of the voters voting on the proposition. The measure would specify that the tax would not be a special tax and would authorize the exemption from the tax of certain senior citizen residences and open-space land. (2) The California Constitution prohibits various local governmental entities from incurring any indebtedness or liability that exceeds in any year the income and revenue provided for that year without the assent of 2/3 of the qualified electors of that entity, voting at an election to be held for that purpose, except that the approval of only a majority of the voters is required for the approval of general obligation bonds to repair, reconstruct, or replace public school buildings determined to be structurally unsafe for school use. This measure would require, on or after July 1, 1992, with respect to cities, counties, or special districts, including school districts, the approval of only a majority of the voters of the district for the approval of ~\b-33 PAGE 2 Display 1991-1992 Bill Text - INFORMATION BILL NUMBER: SCA 11 BILL TEXT general obligation bonds for the acquisition of real property or accomplishing a capital improvement project, including the furnishing and equipping thereof. (3) The measure would make the changes described in (1) and (2) above inoperative on December 31, 2010. (4) Existing constitutional law generally prohibits the state from incurring indebtedness or liability until a majority of the electorate voting for the proposition approve the measure submitted. This measure would prohibit the state from incurring a bonded indebtedness resulting from an initiative measure without the assent of 2/3 of the electors voting on the proposition. Vote: 2/3. Appropriation: no. Fiscal committee: no. state-mandated local program: no. Resolved by the Senate, the Assembly concurring, That the Legislature of the State of California at its 1991-92 Regular Session, commencing on the third day of December 1990, two-thirds of the members elected to each of the two houses of the Legislature voting therefor, hereby proposes to the people of the State of California that the Constitution of the state be amended as follows: First That Section 1 of Article XIIIA thereof is amended to read: Section 1. (a) The maximum amount of any ad valorem tax on real property shall not exceed one percent (1%) of the full cash value of that property. The one percent (1%) tax shall be collected by the counties and apportioned according to law to the districts within the counties. (b) The limitation provided for in subdivision (a) shall not apply to ad valorem taxes or special assessments to pay the interest and redemption charges on any of the following: (1) Any indebtedness approved by the voters prior to July 1, 1978. (2) Any bonded indebtedness, not subject to paragraph (3), for the acquisition or improvement of real property approved on or after July 1, 1978, by two-thirds of the votes cast by the voters voting on the proposition. (3) Any bonded indebtedness incurred by a city, county, or special district L including ~ school district, for the acquisition of real property or accomplishing a capital improvement project, including the furnishing and a\~. ~"\ PAGE 3 Display 1991-1992 Bill Text - INFORMATION BILL NUMBER: SCA 11 BILL TEXT equipping thereof, approved on or after July 1, 1992, by a majority of the votes cast by the voters voting on the proposition. (A) Any ad valorem tax levied pursuant to this paragraph is not a special tax within the meaning of this article. (B) As provided by the Legislature, a city, county, or special district L includinq ~ school district, may provide in the proposition for the exemption from an ad valorem tax levied pursuant to this paragraph of one or both of the following: (i) Property that is both eligible for the homeowner's exemption under subdivision (k) of Section 3 of Article XIII and the principal residence of a person over the age of 55 years who is an owner of the property. (ii) Land defined as open-space land for the purposes of Section 8 of Article XIII. (C) An election on a proposition authorizing an ad valorem tax pursuant to this paragraph shall be held on a date that is concurrent with a statewide primary or general election. (D) This paragraph shall become inoperative on December 31, 2010. Second That Section 18 of Article XVI thereof is amended to read: SEC. 18. (a) No county, city, town, township, board of education, or school district shall incur any indebtedness or liability in any manner or for any purpose exceeding in any year the income and revenue provided for that year, without the assent of two-thirds of the qualified electors thereof, voting at an election to be held for that purpose, except that, with respect to any such public entity which is authorized to incur indebtedness for public school purposes, any proposition for the incurrence of indebtedness in the form of general obligation bonds for the purpose of repairing, reconstructing, or replacing public school buildings determined, in the manner prescribed by law, to be structurally unsafe for school use, shall be adopted upon the approval of a majority of the qualified electors of the public entity voting on the proposition at the election; nor unless, before or at the time of incurring the indebtedness, provision shall be made for the collection of an annual tax sufficient to pay the interest on the indebtedness as it falls due, and also provision to constitute a sinking fund for the payment of the principal thereof, on or before maturity, which shall not exceed forty years from the time of contracting the indebtedness; provided, however, anything to the contrary herein notwithstanding, when two or more propositions for incurring any indebtedness or liability are submitted at the same election, the votes cast for and against each proposition shall be counted separately, and when two-thirds or a majority of the qualified electors, as the case may be, voting on anyone of those propositions, vote in favor thereof, the proposition shall be deemed adopted. (b) Notwithstanding subdivision (a), on or after July 1, 1992, with respect to any city, county, or special district, including ~ school district, any proposition for the incurrence of indebtedness in the form of general obligation bonds for the acquisition of real property or accomplishing a capital improvement project, including the furnishing and equipping thereof, shall be adopted upon the approval of a majority of the qualified electors of the city, county, or special district L including ~ school district, voting on the proposition at an election held for that purpose. This subdivision shall become inoperative on December 31, 2010. ~\~.~S PAGE 4 Display 1991-1992 Bill Text - INFORMATION BILL NUMBER: SeA 11 BILL TEXT Third That Section 20 is added to Article XVI thereof, to read: Sec. 20. Notwithstanding Section 1 of this article, at an election to determine whether the state should incur a bonded indebtedness, and the proposed bonded indebtedness is the result of an initiative measure, the indebtedness may not be incurred without the assent of two-thirds of the qualified electors of the state voting on the proposition at the election. ~\ 'o..!(,p CITY OF CHULA VISTA LEGISLATIVE ANALYSIS Legislative No. Author Title SB 82 Kopp Property Tax: Revenue Increase to Cities by Closing Loop Hole for Business Properties that Change Ownership Sponsor League Pos it i on Rel ated Bi 11 s As Introduced Support December 7, 1991 Status As Amended Pending in the Senate Revenue and Taxation Committee March 13, 1991 BackQround Proposition 13 placed into the California Constitution/.( a requirement that property be reassessed to full market val ue whenever there is a "change in ownership." However, the statutory law implementing this provision has resulted in very di fferent treatment of busi ness property compared to how residential property is reassessed when sold. SB 82 would: Provide that where a transfer of shares or other ownership interests in a corporation, partnership or any other legal entity results in the transfer of ownership interests representing individually or cumulatively more than 50 percent of the ownership interests in that entity, the transfer of shares shall be a change in ownership of real property owned by the entity. Require the Franchise Tax Board to include a specified question with respect to change in ownership on tax revenue. Require filing of a change in ownership with the Franchise Tax Board. Apply provisions of the bill to transfers of shares or other ownership interests of a corporation, partnership, or legal entity occurring on or after March 1, 1975, for purpose of assessments to be made commencing with the 1992-93 assessment year. 4/23/91 Support Letter(s) Required Yes....L No_ '90 Leg Program Sec. B OJ a Date To Council Action WPC 3643A/0009Y ~\ b . '31 LEGISLATIVE ANALYSIS CONT'D Legislative No. SB 82 Title Property Tax: Revenue Increase to Cities by Closing Loop Hole for Business Properties that Change Ownership Imoact SB 82 would reform transfer of ownership statutes to provide for more frequent reassessment of corporate and partnership property so that these sales are treated more like sales of an individual's residence. As a result, it is estimated that at least 1.0 billion in new property tax revenue will be added for local government. The City's current share of property taxes Statewide is 13 percent; therefore, cities could expect new revenues from SB 82 of 132,390,000,000 million Statewide (individual cities share would depend on the amount of busi ness property turnover and thei r current AB 8 all ocat i on of property tax revenue). Recommendation That the Legi sl at i ve Commi ttee authori ze staff to prepare a 1 etter for the Mayor's signature in support SB 82 which would be sent to members of the appropri ate 1 egi sl at i ve committee. SB 82 has been revi ewed by the Fi nance Director which concurs with staff's recommendation. Additionally, SB 82 is consistent with the adopted legislative program, thus requires no Council action. ~\ '10. "3 ~ Display 1991-1992 Bill Text - INFORMATION BILL NUMBER: SB 82 BILL TEXT AMENDED IN SENATE MARCH 13, 1991 INTRODUCED BY Senator Kopp DECEMBER 7, 1990 Aft see eo amend Beeeioft 636% of ~he Reveft~e and ~axaeieft eOdeT re%a~~ft~ ~e ~aXa~~eft7 ~e ~ake effee~ immed~a~e%Y7 ~ax %evYT An act to amend Sections 64, 110, 480.1, and 480.2 of, and to add section 480.25 to, the Revenue and Taxation Code, relating to property taxation. LEGISLATIVE COUNSEL'S DIGEST SB 82, as amended, Kopp. Sa%ee aftd ~ee ~ax~ eehee%-e~efteered ye~~h ~re~~e Property taxation: exeZft~eiefte't' chanqe in ownership ~he ex~e~~ft~ ea%~ferft~a Sa%ee aftd eee ~ax =aw exeM~~e freM ~he eax im~eeed ey ease isw reed ~reduee8T noftaieeheiie bevera~e87 aftd e~her ~aft~~b%e ~ereefta% ~re~er~y wh~eh are ee%d eft aft ~rre~~%ar er ifteermieeefte basie by any fteft~refie erganizaeieftT 88 epeeified, er afty ye~~h ~re~~ e~efteered by er aff~%~a~ed w~~h a q~a%~f~ed eaueaeionsl ifteeieueieft ana whieh are made er predueed by members ef ~he er~aft~Za~~eftT f~ def~ftee a ~a%~f~ed ed~ea~~efta% ~fte~~~~~~eft ae aftY ~~b%~e eehee% er ee%%e~e7 ae e~ee~f~ed7 er afty ~r~va~e eaueaeieftsi ifteeieueioft providing eaueaeieft fer kiftdergareeft eo grade %ZT ifteiueiveT or eeiiege uftdergraduaee program, ease meeee ehe re~~reMeft~e ef ~he S~e~e Be~ar~Meft~ ef Bd~ea~~eft7 ae e~ee~f~ed7 aftd dees nee dieerimiftaee en ehe basis ef raeeT sex, ftseioftaiieYT er reiigiol"'.":" ~hi8 bili would previde ease, fer purposes of ease exeM~e~eaT aa eae~ey shaii aee be aeeMed ee d~8er~m~aaee ea ehe basis ef sex ia ~he eaee ef afty fteft~ref~~ ~r~ve~e eehee% wh~eh ~rad~~~efta%%y aftd eeft~~ft~a%%y freM ~~e ee~ab%~ehMeft~7 hae had a ~e%~ey ef adM~~~~ft~ eaiy se~deaes ef eae eeXT ee~aeiee aad e~eiee are a~eher~zed ~e ~mpeee ieeai eaiee aad ~ee eaxee ~a eeafermiey wieh e~aee eaiee aad ~se eaxesT BxeMpe~eas frem s~a~e eaiee aad ~ee eaxee eaae~ed by ~he ~e~ieia~~re are a~eemae~eaily ~aeerperaeed ~aee ehe leeal eaxeeT See~~eft ::38 ef ~he Reveft~e aftd ~axa~~eft eede ~rev~dee ~ha~ ~he e~aee wiii rei~~ree ee~fteiee afta ei~iee fer reveft~e ieeeee ea~eed !l\~. ~'l PAGE 1 Display 1991-1992 Bill Text - INFORMATION BILL NUMBER: SB 82 BILL TEXT ~y ~he eftaeemefte ei esiee aft~ ~ee eax exem~eiefteT ~ftia biii we~ia p~eyiae ~fte~ fte epp~ep~ie~ieft ia meae efta ~fte aeeee afteii ftee ~eimb~~ae ieeei egefteiea fe~ aeiea efta ~ae eex ~eyeft~ea iea~ by eftem p~~a~efte ee ~ftia biiiT ~ftia biii we~ia eeke effee~ immeaieeeiy ea a ~ex ievYT Existing provisions of the California Constitution, with certain exceptions, place! limitation ~ ad valorem property taxes on real property of 1% of the full cash value of that property. For purposes of this limitation, full cash value is defined as the assessor's valuation of real property as shown on the 1975-76 tax bill under "full cash value" or, thereafter, the appraised value of that real property when purchased, newly constructed, ~ ! chanqe in ownership has occurred after the 1975 assessment. Existing law provides, except for specified exceptions with respect to change in ownership upon control or transfer of ~ majority of ownership interests, that the purchase or transfer of ownership interests in ! legal entity, such as corporate stock or partnership interests, shall not be deemed to constitute ! transfer of the real property of the legal entity. It requires the Franchise Tax Board, for purposes of determining the applicability of those exceptions establishing change of ownership of ~ entity's real property, to include! specified question on tax returns for partnerships, banks, and corporations, other than tax-exempt organizations. It also requires the filing of ~ specified change in ownership statement with the state Board of Equalization where certain of the exceptions establishing chanqes in ownership apply. This bill would recast those changes in ownership provisions and would additionally provide that where ~ transfer of shares or other ownership interests of ! corporation, partnership, ~ any other legal entity results in the transfer of ownership interests representing individually or cumulatively ~ than 50% of the ownership interests in that entity, the transfer of shares ~ other ownership interests shall be ! change in ownership of real property owned ~ that entity. It would require the Franchise Tax Board to include! specified question with respect to chanqe in ownership ~ tax returns for partnerships, banks, and corporations, other than tax exempt organizations, for the purpose of determining the applicability of the ~ change in ownership provision. It would require the filing of ! specified change in ownership statement with the board where the new change in ownership provisions apply. It would ~ the provisions of the bill to transfers of shares or other ownership interests of ~ corporation, partnership, or other legal entity occurring on ~ after March h 1975, for purposes of assessments to be made commencing with the 1992-93 assessment year. Vote: majority. Appropriation: no. Fiscal committee: yes. state-mandated local program: yea no ~\b.qo PAGE 2 Display 1991-1992 Bill Text - INFORMATION BILL NUMBER: SB 82 BILL TEXT THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: ef ~he Reve"~e ana the Revenue and Taxation - - B8e~%eN iT Bee~~eft 636i SECTION ~ Section 64 of amended to read: 64. (a) ill Where ~ transfer of shares ~ other ownership interests of ~ corporation, partnership, or any leqal entity results in the transfer of ownership interests representing individually or cumulatively ~ than 50 percent of the ownership interests in that entity, that transfer of shares ~ other ownership interests shall be ~ chanqe in ownership of real property owned ~ that entity. ~ When ~ corporation, partnership, other leqal entity, or any other person obtains control, as defined in Section 25105, in any corporation, ~ obtains ! ma;ority ownership interest in any partnership ~ other legal entity through the purchase or transfer of corporate stock, partnership interest, ~ ownership interests in other legal entities, that purchase or transfer of stock or other interests shall be ~ change of ownership of property owned ~ the corporation, partnership, or other leqal entity in which the controlling interest is obtained. ill ill If property is transferred ~ ~ after March h 1975, to ~ legal entity in ~ transaction excluded from change in ownership ~ paragraph ~ of subdivision 1!l of Section 62, then the persons holdinq ownership interests in that leqal entity immediately after the transfer shall be considered the "oriqinal coowners." Whenever shares ~ other ownership interests representing cumulatively ~ than 50 percent of the total interests in the entity ~ transferred ~ any of the original coowners in one or more transactions, ! change in ownership of that real property owned ~ the legal entity shall have occurred, and the property that ~ previously excluded from change in ownership pursuant to paragraph ~ of subdivision 1!l of section 62 shall be reappraised. ~ The date of reappraisal pursuant to this paragraph shall be Code is -- -al b · l.t) PAGE 3 PAGE 4 Display 1991-1992 Bill Text - INFORMATION BILL NUMBER: SB 82 BILL TEXT the date of the individually ~ in the entity. ~ ~ transfer of shares or other ownership interests that results in ~ change in control of ~ corporation, partnership, or any other legal entity is subject to reappraisal !! provided in paragraph ~ in lieu of this paragraph. 1!l Except as provided in subdivision (h) of Section 61 and s~eaivisiefts tet afta tat e~ ~his see~ieft paragraphs ill to illL inclusive , the purchase or transfer of ownership interests in legal entities, such as corporate stock or partnership interests, shall not be deemed to constitute a transfer of the real property of the legal entity. (b) Any corporate reorganization, where all of the corporations involved are members of an affiliated group, and which qualifies as a reorganization under Section 368 of the United States Internal Revenue Code and which is accepted as a nontaxable event by similar California statutes, or any transfer of real property among members of an affiliated group, or any reorganization of farm credit institutions pursuant to the federal Farm Credit Act of 1971 (Public Law 92-181), as amended, shall not be a change of ownership. The taxpayer shall furnish proof, under penalty of perjury, to the assessor that the transfer meets the requirements of this subdivision. For purposes of this subdivision "affiliated group" means one or more chains of corporations connected through stock ownership with a common parent corporation if: (1) One hundred percent of the voting stock, exclusive of any share owned by directors, of each of the corporations, except the parent corporation, is owned by one or more of the other corporations t and ~ (2) The common parent corporation owns, directly, 100 percent of the voting stock, exclusive of any shares owned by directors, of at least one of the other corporations. (c) When a eerpera~*en, par~nerehip, e~her ~e~a~ en~i~y er any e~her pereen eb~aine een~re~, as defined in Bee~ien 25i85, in any eerpera~ienT er eb~ains a ma;eri~y ewfterehip ifteereee ift afty par~ftership er e~her ie~ai eft~i~y ~hre~~h ~he p~rehaee er ~rafts~er ef eerpera~e eeeek, par~ftership ifteereee, er ewfterehip ifteereeee ift e~her ie~ai eft~i~ieeT s~eh p~rehase er ~rafts~er e~ s~eh e~eek er e~her ift~eres~ shaii ee a ehaft~e e~ ewftership e~ preper~y ewftea ey ~he eerpera~ieftT par~ftershipT er e~her ie~ai eft~i~y ift whieh ~he eeftereiiiftg ifteereee ie ebeaiftedT tat ~~ preper~y is ~rafts~errea eft er a~~er Mareh iT i9T5, ~e a ie~ai eft~i~y ift a ~raftsae~ieft exei~aea ~reM ehaft~e ift ewftership ey para~raph t~t e~ e~eaivieieft tat e~ See~ieft 6~T ~heft ~he persefts heidift~ ewfterehip ifteere8~e ift s~eh ie~ai efteiey immediaeeiy afeer ehe eraftefer ehaii be eefteidered ~he ~eri~inai eeewnereT~ Wheftever ehares er eeher ewfterehip ifteereeee repreeefteift~ e~m~iaeiveiy mere ~haft 59 pereeft~ e~ ~he ~e~ai ift~eree~e ift ~he eft~i~y are erafteferred by afty ef ehe eri~iftai eeewftere ift efte er mere eraftsaeeiefteT a ehaft~e in ewfterehip ef ehae reai preperey ewfted by ~he ie~ai eft~i~y shaii have eee~rreaT afta ~he preper~y whieh wae previe~siy exei~aea ~reM ehaft~e ift ewfterehip ~ftaer ~he previeiefts e~ transfer of the ownership cumulatively ~ than 50 interest representing percent of the interests ~l C .. ~ 7.. PAGE 5 Display 1991-1992 Bill Text - INFORMATION BILL NUMBER: SB 82 BILL TEXT para~rapft t2t 8~ subdivisi8ft tat 8~ Seeei8ft 62 afta:: be reapprao:aedT !he da~e e~ reeppreiee~ ehe~~ be ~he de~e e~ ~he ~he ewfterehip O:ft~eree~ repreeeft~O:ft~ iftdo:vo:due~~y er ~haft 59 pe~eeft~ of ~fte ifteereeee in ehe efteieYT A eraftefer ef sharee or eeher ownership ifteereeee whieh ree~iee in a ehaft~e in eefterei ef a eerperaeieftT parefterehipT or any eeher ie~ai efteiey is e~8;eee eo reappraisal as previaea in e~bdivieieft tet reefter ~heft efto:e eubdo:vo:eo:eftT tet In order to assist in the determination of ownership has occurred under e~bdivieiefte tet aftd , the Franchise Tax Board shall include a question following form on returns for partnerships L banks (except tax-exempt organizations): If the corporation (or partnership) owns real property in California, has cumulatively more than 50 percent of the voting stock (or more than 50 percent of total interest in both partnership capital and partnership profits) (1) been transferred by the corporation (or partnership) since March 1, 1975, or (2) been acquired by another legal entity or person during the year? (See instructions. ) If the entity answers "yes" to (1) or (2) in the above question, then the Franchise Tax Board shall furnish the names and addresses of that entity and of the stock or partnership ownership interest transferees to the state Board of Equalization. SEC. ~ Section 110 of the Revenue and Taxation Code is amended to read: -- 110. (a) Except as is otherwise provided in Section 110.1, "full cash value" or "fair market value" means the amount of cash or its equivalent for which property would bring if exposed for sale in the open market under conditions in which neither buyer nor seller could take advantage of the exigencies of the other and both wo:eft kftewied~e the buyer and seller ~ aware of all of the uses and purposes to which the property is adapted and for which it is capable of being used adapted and of the enforceable restrictions upon those uses and purposes. (b) For purposes of determining the "full cash value" or "fair market value" of real property, other than possessory interests, being appraised upon a purchase, "full cash value" or "fair market value" shall be the purchase price paid in the transaction unless it is established by a preponderance of the evidence that the real property would not have transferred for that purchase price in an open market transaction. The purchase price shall, however, be rebuttably presumed to be the "full cash value" or "fair market value" if the terms of the transaction were negotiated at arms length between a knowledgeable transferor and transferee neither of which could take advantage of the exigencies of the other. "Purchase price," as used in this section, means the total consideration provided by the purchaser or on the purchaser's behalf, valued in money, whether paid in money or otherwise. If a single transaction results in a change in ownership of more than one parcel of real property, the purchase price shall be allocated among those parcels and other assets, if any, transferred based on the relative fair market value of each. ~rafte~er e~ eu",,,ie~o:veiy Mere whether a change of tdt subdivision 1!l in substantially the L and corporations ~\b-4~ PAGE 6 Display 1991-1992 Bill Text - INFORMATION BILL NUMBER: SB 82 BILL TEXT (0) For real property, other than possessory interests, the change of ownership statement required pursuant to Section 480, 480.1, er 480.2, or 480.25, or the preliminary change of ownership statement required pursuant to Section 480.4, shall give any information as the board shall prescribe relative to whether the terms of the transaction were negotiated at "arms length". In the event that the transaction includes property other than real property, the change in ownership statement shall give information as the board shall prescribe disclosing the portion of the purchase price which is allocable to all elements of the transaction. If the taxpayer fails to provide the prescribed information, the rebuttable presumption provided by subdivision (b) shall not apply. SEC. ~ Section 480.1 of the Revenue and Taxation Code is amended to read: -- 480.1. (a) Whenever there is a change in control of any corporation, partnership, or other legal entity, as defined in paragraph ~ of subdivision tet 1!l of section 64, a signed change in ownership statement as provided for in subdivision (b), shall be filed by the person or legal entity acquiring ownership control of such corporation, partnership, or other legal entity with the board at its office in Sacramento. The statement shall list all counties in which the corporation, partnership, or legal entity owns real property. (b) The change in ownership statement as required pursuant to subdivision (a), shall be declared to be true under penalty of perjury and shall give such information relative to the ownership control acquisition transaction as the board shall prescribe after consultation with the California Assessors' Association. The information shall include, but not be limited to, a description of the property owned by the corporation, partnership, or other legal entity, the parties to the transaction, and the date of the ownership control acquisition. The change in ownership statement shall not include any question which is not germane to the assessment function. The statement shall contain a notice that is printed, with the title at least l2-point boldface type and the body in at least 8-point boldface type, in the following form: "Important Notice" "The law requires any person or legal entity acquiring ownership control in any corporation, partnership, or other legal entity owning real property in California subject to local property taxation to complete and file a change in ownership statement with the State Board of Equalization at its office in Sacramento. The change in ownership statement must be filed within 45 days from the date of the change in control of a corporation, partnership, or other legal entity. The law further requires that a change in ownership statement be completed and filed whenever a written request is made therefor by the State Board of Equalization, regardless of whether a change in control of the legal entity has occurred. The failure to file a change in ownership statement within 45 days from the date of a written request by the State Board of Equalization results in a penalty of 10 percent of the taxes applicable to the new base year value reflecting the change in control of the real property owned by the corporation, partnership, or legal entity (or 10 percent of the current year's taxes on that property if no change in control occurred). This ~\b .f.I~ PAGE 7 Display 1991-1992 Bill Text - INFORMATION BILL NUMBER: SB 82 BILL TEXT penalty will be added to the assessment roll and shall be collected like any other delinquent property taxes, and be subject to the same penalties for nonpayment." (0) In the case of a corporation, the change in ownership statement shall be signed either by an officer of the corporation or an employee or agent who has been designated in writing by the board of directors to sign such statements on behalf of the corporation. In the case of a partnership or other legal entity, the statement shall be signed by an officer, partner, or an employee or agent who has been designated in writing by the partnership or legal entity. (d) No person or entity acting for or on behalf of the parties to a transfer of real property shall incur liability for the consequences of assistance rendered to the transferee in preparation of any change in ownership statement, and no action may be brought or maintained against any such person or entity as a result of such assistance. Nothing in this section shall create a duty, either directly or by implication, that such assistance be rendered by any person or entity acting for or on behalf of parties to a transfer of real property. (e) The board or assessors may inspect any and all records and documents of a corporation, partnership or legal entity to ascertain whether a change in control as defined in paragraph ~ of subdivision tet l!l of Section 64 has occurred. The corporation, partnership, or legal entity shall upon request, make such documents available to the board during normal business hours. SEC. 4. Section 480.2 of the Revenue and Taxation Code is amended to read: 480.2. (a) Whenever there is a change in ownership of any corporation, partnership, or other legal entity, as defined in paragraph 111 of subdivision tet l!l of Section 64, a signed change in ownership statement as provided in subdivision (b) shall be filed by such corporation, partnership, or other legal entity with the board at its office in Sacramento. The statement shall list all counties in which the corporation, partnership, or legal entity owns real property. (b) The change in ownership statement required pursuant to subdivision (a) shall be declared to be true and under penalty of perjury and shall give such information relative to the ownership interest acquisition transaction as the board shall prescribe after consultation with the California Assessors' Association. The information shall include, but not be limited to, a description of the property owned by the corporation, partnership, or other legal entity, the parties to the transaction, the date of the ownership interest acquisition, and a listing of the "original coowners" of the corporation, partnership, or other legal entity prior to the transaction. The change in ownership statement shall not include any question which is not germane to the assessment function. The statement shall contain a notice that is printed, with the title in at least 12-point boldface type and the body in at least 8-point boldface type, in the following form: "Important Notice" !l\ b ..'"\ S PAGE 8 Display 1991-1992 Bill Text - INFORMATION BILL NUMBER: SB 82 BILL TEXT "The law requires any corporation, partnership, or other legal entity owning real property in California subject to local property taxation and transferring shares or other ownership interest in such legal entity which constitute a change in ownership pursuant to subdivision (d) of section 64 of the Revenue and Taxation Code to complete and file a change in ownership statement with the State Board of Equalization at its office in Sacramento. The change in ownership statement must be filed within 45 days from the date that shares or other ownership interests representing cumulatively more than 50 percent of the total control or ownership interests in the entity are transferred by any of the original coowners in one or more transactions. The law further requires that a change in ownership statement be completed and filed whenever a written request is made therefor by the State Board of Equalization, regardless of whether a change in ownership of the legal entity has occurred. The failure to file a change in ownership statement within 4S days from the date of a written request by the Board of Equalization results in a penalty of 10 percent of the taxes applicable to the new base year value reflecting the change in ownership of the real property owned by the corporation, partnership, or legal entity (or 10 percent of the current year's taxes on that real property if no change in ownership occurred). This penalty will be added to the assessment roll and shall be collected like any other delinquent property taxes, and be subject to the same penalties for nonpayment... (c) In the case of a corporation, the change in ownership statement shall be signed either by an officer of the corporation or an employee or agent who has been designated in writing by the board of directors to sign such statements on behalf of the corporation. In the case of a partnership or other legal entity, the statement shall be signed by an officer, partner, or an employee or agent who has been designated in writing by the partnership or legal entity. (d) No person or entity acting for or on behalf of the parties to a transfer of real property shall incur liability for the consequences of assistance rendered to the transferee in preparation of any change in ownership statement, and no action may be brought or maintained against any such person or entity as a result of such assistance. Nothing in this section shall create a duty, either directly or by implication, that such assistance be rendered by any person or entity acting for or on behalf of parties to a transfer of real property. (e) The board or assessors may inspect any and all records and documents of a corporation, partnership or legal entity to ascertain whether a change in ownership as defined in subdivision (d) of Section 64 has occurred. The corporation, partnership, or legal entity shall upon request, make such documents available to the board during normal business hours. SEC. ~ Section 480.25 is added to the Revenue and Taxation Code, to read: 480.25. l!l Whenever there is ~ change in ownership of any corporation, partnership, or other legal entity, as defined in paragraph ill of subdivision l!l of Section 64, ~ siqned change in ownership statement as provided for in subdivision iE1L shall be 3\ \0..4 (p Display 1991-1992 Bill Text - INFORMATION BILL NUMBER: SB 82 BILL TEXT or other leqal entity with The statement shall list - -- partnership, or legal entity filed ~ the corporation, partnership, the board at its office in Sacramento. ---- - all counties in which the corporation, owns real property. ~ The change in ownership statement ~ required pursuant to subdivision i!lL shall be declared to be true under penalty of perjury and shall give that information relative to the ownership control acquisition transaction !! the board shall prescribe after consultation with the California Assessors' Association. The information shall include, but not be limited to, ~ description of the property owned ~ the corporation, partnership, or other legal entity, and the date upon which ~ than 50 percent of ownership interests ~ individually or cumulatively transferred. The change in ownership statement shall not include any question that is not germane to the assessment function. The statement shall contain a notice that is printed, with the title at least 12-point boldface ~ and the body in at least 8-point boldface ~ in the following form: "Important Notice" "The law requires any person ~ leqal entity acquirinq ownership control in any corporation, partnership, ~ other legal entity owning real property in California subject to local property taxation to complete and file ! change in ownership statement with the State Board of Egualization at its office in Sacramento. The chanqe in ownership statement must be filed within 45 days from the date of the change in ownership or control of ! corporation, partnership, ~ other legal entity. The law further reguires that ~ change in ownership statement be completed and filed whenever ~ written request is made therefor ~ the state Board of Equalization, reqardless of whether ! chanqe in ownership or control of the legal entity has occurred. The failure to file ~ change in ownership statement within 45 days from the date of ~ written request ~ the State Board of Equalization results in ~ penalty of 10 percent of the taxes applicable to the ~ base year value reflecting the chanqe in ownership or control of the real property owned ~ the corporation, partnership, or legal entity (or 10 percent of the current year's taxes on that property if no change in ownership or control occurred). This penalty will be added to the assessment roll and shall be collected like any other delinguent property taxes, and be subject to the same penalties for nonpayment." 1El In the ~ of ~ corporation, the change in ownership statement shall be signed either ~ ~ officer of the corporation ~ an employee ~ agent who has been designated in writing ~ the board of directors to sign those statements 2n behalf of the corporation. In the ~ of ~ partnership ~ other legal entity, the statement shall be signed ~ an officer, partner, or an ~\\, ..~1 PAGE 9 PAGE 10 Display 1991-1992 Bill Text - INFORMATION BILL NUMBER, SB 82 BILL TEXT employee ~ aqent who has been designated in writing ~ the partnership ~ legal entity. ~ No person or entity acting for or ~ behalf of the parties to ~ transfer of real property shall incur liability for the consequences of assistance rendered to the transferee in preparation of any change in ownership statement, and no action may be brought ~ maintained aqainst any such person ~ entity as ! result of that assistance. Nothing in this section shall create ~ duty, either directly or ~ implication, that such assistance be rendered ~ any person or entity acting for ~ on behalf of parties to ~ transfer of real property. 1!l The board ~ assessors may inspect any and all records and documents of ~ corporation, partnership, or legal entity to ascertain whether ~ change in ownership as defined in paragraph 1!l of subdivision ~ of Section 64 has occurred. The corporation, partnership, ~ legal entity shall upon request, make those documents available to the board during normal business hours. SEC. ~ The provisions of this act shall ~ to transfers of shares ~ other ownership interests of ! corporation, partnership, or ~ legal entity occurring on or after March h 1975, for purposes of assessments to be made commencing with the 1992-93 assessment year and thereafter. ~axa~ieft eede ~8 ameaded ~e read~ 636%T tat Afty er~aft~za~~eft i~e~ed er deeer~Bed ~ft e~Bd~v~e~eft tBt ~e a eefte~Mer aftd ehaii fte~ Be eefte~dered a re~a~ier w~~h~ft ~he prev~e~efte ef ~h~e par~T ef feed pred~e~eT fteftaieehei~e Bevera~eeT er e~her ~aft~~Bie pereeftai preper~y Made er pred~eed BY Members of ~he er~aft~za~ieft providedT howeverT ~ha~ ~he er~aftizaeieft~e eAiee are made eft aft irreg~%ar or ifteermieeefte essie, aftd ~ha~ ~he er~aft~za~~eft~e pref~~e freM ~heee eaiee are ~eed exei~e~veiy ~ft f~r~heraftee ef ~he p~rpeeee ef ~he er~aft~Za~~eftT t8t Per purposes ef ehie seeeiOftT AergaftizaeioftA ifte%udee any of ~he feiiew~ft~.. tit Afty fteftpref~~ er~aft~za~~eft wh~eh Mee~e aii ef ~he feiiew~ft~ eofte.ieiolUIi1" tAt ~he er~aft~za~~eft ~~ai~f~ee fer ~ax-exeMp~ e~a~~e ~ftder See~~eft S9%tet ef ~he %ft~erftai Reveft~e eedeT tBt ~he ergaftizaeieft~e primary purpose is eo provide a supervised pre~raM ef eeMpe~~~~ve eper~e fer ye~~hT er ~e preMe~e ~eed eieizeftship in yeUeftT tat ~he ergsftizaeioft does nee dieerimiftsee eft ehe basis of raeeT sex, ftaeiOft4iieYT or reiigioftT t2t tAt Afty ye~~h ~re~p epefteered BY er aff~i~a~ed w~~h a ~~ai~f~ed ed~ea~~eftai ~fte~~~~~~eftT ~ftei~d~ft~T B~~ fte~ i~M~~ed ~eT afty e~~deft~ ae~~v~~y ei~BT a~hie~~e ~re~PT er M~e~eai ~re~pT tBt Per p~rpeeee ef ~h~e eee~~eftT A~~ai~f~ed ed~ea~~eftai iftseieueioftA means any ef ehe fo%%owiftg1" t~t Afty p~Bi~e eieMeft~arYT eeeeftdarYT er veea~~eftai-~eehft~eai eeheei prev~d~ft~ ed~ea~~eft fer k~ftder~ar~eftT ~radee % ~e i2T ~\'e .4' PAGE 11 Display 1991-1992 Bill Text - INFORMATION BILL NUMBER: SB 82 BILL TEXT *fte~~eiVeT and ee%%e~e ~ftder~rad~a~e pre~raMeT or any par~ ~fteree~T epe~a~ed 8Y e~a~e e~ ieeai geve~ftmeft~T tiit Any fteftprefi~ priva~e ed~ea~ieftai ifte~i~~~ieft previdift~ ed~ea~ieft fer kiftde~gar~eftT gradee % ~e iZT ifte%~eiveT aftd ee%%ege ~ftder~rad~a~e pre~raMeT or any par~ ~hereefT ehse meee. efte requ~remeft~. of efte Sesee Beparemefte ef Ba~eaeieft fer a .ehee~T ap~iva~e ed~ea~ieftai ifte~i~~~ieftA Meafte afty eft~i~y ~~evidiftg edaea~ieft whieh .seier!.. efte requiremeftee ef sese. aftd ioeai i4W8 pereaiftiftg eo privaee ed~eaeiefta% ifteeie~eieft. in effeee eft oaft~ary %T %9997 aftd whieh dees nee dieerimiftaee eft efte easi. of raee7 sex, fta~ieftaii~YT e~ ~eiigieftT Pe~ ~~~~eeee ef ~he ~~eeediftg eeft~efteeT aft eft~i~y ehaii fte~ 8e deeMed ~e diee~iMifta~e eft ~he 8aeie ef eex ift ~he eaee ef afty fteft~~efi~ ~~iva~e eeheei whieh ~~adi~ieftaiiy aftd eeft~iftaaiiy f~eM i~e ee~a8iiehMeft~T hae had a ~eiiey ef adMi~~iftg eftiy e~~deft~e ef efte seXT tat bi~~%e beagaeT Be88Y SexT Bey Seea~eT ea8 Seea~sT 8i~i 8ee~e.T eampfireT %fteT7 ~e~ftg Meft~. ehrieeiaft A.eeeiaeieftT Ye~ftg Women.. ehrieeiaft A..eeiaeioftT P~e~re Parmer. of AmerieaT P~e~re Hememakers ef Ameriea, 4-H ei~beT Bi.erib~eive Bd~eaeieft ei~b. of AMe~ieaT Pa~a~e Baeifteee beade~e ef AMe~ieaT Veea~ieftai fftdae~~iai eia8e ef AMe~ieaT eeiiegia~e Yeaftg Pa~Me~eT Beye~ eia8eT 8i~ie~ ei~~eT 8peeiai eiympiesT ~fteTT AMerieaft Ye~~h Seeeer er~aftiza~ieftT eaiiferftia Ye~~h 8eeeer Aeseeia~ieftT Ner~h7 eaiiferftia Ye~~h 8eeeer Aeeeeia~ieftT Sea~hT aftd Pe~ Wa~fte~ fee~8aiiT tet Per purposes of ~his eee~ieft7 Airre~~iar er ift~ermi~~eft~A means aeeeeiaeed direeeiy wieh a pareie~iar eVefteT e~eh as fairsT ~aiae7 parades, eee~e-a-ram8e7 gameST and similar aeeivieiesT ~hae ~e~M ifteiadee ~ef~eehMeft~ e~aftde e~ bee~he ~ha~ a~e a~iiized a~ eehed~ied eveftes of organized ieag~eeT e~e dees nee iftei~de e~e~ef~eft~ e~ Me8iie ~e~aii ea~ie~e whieh e~difta~iiy ~e~i~e ieeai b~eiftees iieeftSeST aBeT iT Neewieheesftdiftg 8eeeioft ~i3e of ehe Reveft~e and ~axaeieft eede, no apprepriaeioft is made by ehie see aftd ehe eeaee shall ftee reimb~ree any lees! ageftey fer aay sales and ~ee eax reveft~ee lese by ie under ehie aeeT SBeT aT ~hie ae~ ~~ev~dee fe~ a ~ax ievy wi~hift ~he Meaftiftg ef A~~ieie fV ef ehe eefteeie~eieft and shall go iftee immediaee effeeeT ~\o..l\1 THIS PAGE BLANK ~ \\0.. So CITY OF CHULA VISTA LEGISLATIVE ANALYSIS Legislat,ve No. Author T,tle SB 445 Deddeh Cost Recovery for Removal of Asbestos in Public Buildings Sponsor League Position Related Bills As Introduced City of San Diego Support SB 2748 Status As Amended Pending in the Senate Judiciary Committee Hearing Date: Background Exi sti ng 1 aw provi des statutory 1 imi tati ons and sets forth the time for the commencement of any ci vil acti on for injury or illness based on exposure to asbestos. SB 445 would establish a parallel statute for property cases by allowing governmental entities three years from the time asbestos in their bui 1 di ngs becomes a s i gnifi cant health hazard to bri ng acti on agai nst the manufacturers for abatement. Impact SB 445 is i denti cal to SB 2748 introduced by Senator Deddeh, supported by Council and vetoed by the Governor last year. This year's Bill SB 445, would address the probl em of cost recovery of asbestos abatement in government buildings. Thousands of government buildings throughout California are filled with asbestos which was put into the buildings in the 1960's and 1970's. With the passage of time, asbestos is beginning to be released into the air, creating huge costs for surveys, monitoring and removal. Eventually, all the asbestos will have to be removed, permanently stored in toxic dumps, and the cost will be borne by California tax payers. SB 445 would allow public agencies to bring civil action to pay for cost of removal and storage against the manufacturers who sold the asbestos (i.e., within three years after it is di scovered to be a health hazard). Under exi sti n~ 1 aw manufacturers are protected by a three year property statute of limitat,on and that statute time limit begins to run when the asbestos was first put in. This measure applies to publ ic buildings only and is needed to assist local entities to recovery the cost incurred by asbestos removal. '90 Leg Program Date To Counc,l Act, on Letter's) Required Sec. N/A 4/23/91 Support Yes X No WPC 3640A/0009Y 'a.\b . t;1 LEGISLATIVE ANALYSIS CONT'D Legislative No. AB 445 Title Cost Recovery for Removal of Asbestos in Public Buildings Recommendation That the Legi sl ative Committee authori ze staff to prepare a 1 etter for the Mayor's signature in support of SB 445 to be sent to members of the appropriate legislative committee. SB 445 is identical to SB 2748 supported by the City Council last year thus requiring no Council action. The Building and Construction Superintendent has reviewed SB 445 and is in agreement with staff's recommendation. WPC 3640A ~\ b . t;2.., PAGE 1 Display 1991-1992 Bill Text - INFORMATION BILL NUMBER: SB 445 BILL TEXT INTRODUCED BY Senator Deddeh (Principal coauthor: Senator Bergeson) (Coauthors: Senators Craven and Killea (Coauthors: Assembly Members Alpert, Bentley, Chacon, Gotch, Hunter, and Peace) FEBRUARY 21, 1991 An act to add Section 340.7 to the Code of Civil Procedure,relating to statutes of limitation. LEGISLATIVE COUNSEL'S DIGEST SB 445, as introduced, Deddeh. Statutes of limitation: action by state. asbestos. Existing law provides that the statutory limitations on the time for bringing actions apply to actions brought in the name of the state or county or for the benefit of the state or county. Existing law sets forth the time for the commencement of any civil action for injury or illness based upon exposure to asbestos. Existing law also provides that the time for commencement of an action for relief not otherwise specified is within 4 years after the cause of action has accrued. This bill would authorize any public entity to bring a civil action against any manufacturer of asbestos-containing products for damages based upon the cost of removing or treating materials containing asbestos in buildings or facilities owned by the public entity, at any time, but in no event later than 3 years from the date the entity knew or reasonably should have known that the product posed a significant health hazard, as defined, for the occupants of a building. Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no. '3' b- li3 PAGE 2 Display 1991-1992 Bill Text - INFORMATION BILL NUMBER. SB 445 BILL TEXT THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS. SECTION 1. Section 340.7 is added to the Code of Civil Procedure, to read: 340.7. (a) A civil action brought by any public entity against any manufacturer of aSbestos-containing products for damages based upon the cost of removing or treating materials containing asbestos that are located within any building or facility owned by the public entity may be commenced at any time, but in no event later than three years from the date the entity knew or reasonably should have known that the asbestos material posed a significant health hazard for the occupants of the building. The trier of fact shall consider the effect of information provided by all sources in determining the state of the entity's knowledge. (b) "Significant health hazard" for purposes of this section means a threat to human health which is not remote in time and not insubstantial in degree. ~\\O..~4