from Kevin Pedrotti, Legislative Advocate, Golden State Builders Exchanges
RDA’s CLOSED
All of the state’s 400 redevelopment agencies closed their doors on February 1. This followed the state Supreme Court’s decision in December to uphold a 2011 law to abolish the economic-development program.
This week, the legislature passed SB 654 (Steinberg) to allow cities and counties to build affordable housing using $1.36 billion held for that purpose by agencies that are closing. The bill was sent to the Assembly, but not before Republican’s refusal to pass as an urgency measure, meaning the bill, if signed will not take effect until January 1, 2013. Republicans sought several amendments that would have allowed redevelopment agencies to make it easier to phase out their operations without financial difficulties. Steinberg indicated he may insert language into a trailer bill on the budget so it can still take effect immediately.
About a fifth of redevelopment money goes to low- and moderate-income housing, popular projects for majority Democrats. Under last year’s law dissolving redevelopment, new successor agencies and oversight boards will soon start the process of reallocating money that used to go to redevelopment agencies. Last year’s bill shutting down the agencies allows an agency’s projects to go forward only if they are under contract. Otherwise, the money is eligible to be distributed to schools and other local governments.
Several other redevelopment-related measures will be considered. State Sen. Bob Dutton has authored legislation (SB 986) that would allow redevelopment agencies to continue to spend money on projects for which they sold tax-allocation bonds.
Road Money Protected
As part of the state’s cash management, the legislature took action on SB 95, which provides the Director of Finance more latitude to utilize cash balances in a variety of highway oriented fund accounts to assist the state in its day-to-day cash management. The state Controller declared this week that the state is running into a cash shortage, possibly as soon as March. Included in the bill is the relief for HUTA (Highway User Tax Account) revenues from being tied up in the event of a late budget (similar to AB 1308 – Miller, which died in the Assembly last year). Under this provision, when there is a late state budget, HUTA will be able to flow to local city and county road programs and state highway contracts will also be able to receive ongoing payments, unlike in years past where local agencies and some contactors provided funding to keep projects going.
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