Bill Text: CA AB345 | 2011-2012 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

---

Bill Title: Redevelopment.

Spectrum: Partisan Bill (Democrat 3-0)

Status: (Vetoed) 2012-09-29 - Consideration of Governor's veto pending. [AB345 Detail]

Download: California-2011-AB345-Amended.html

---

BILL NUMBER: AB 345	AMENDED
	BILL TEXT

	AMENDED IN SENATE  AUGUST 21, 2012
	AMENDED IN SENATE  JUNE 29, 2011
	AMENDED IN SENATE  JUNE 20, 2011
	AMENDED IN ASSEMBLY  APRIL 4, 2011

INTRODUCED BY   Assembly Member  Atkins   Torres

    (   Principal coauthor:   Assembly Member
  Atkins   ) 
    (   Principal coauthor:   Senator 
 Lowenthal   ) 
    (  Coauthors:  
Assembly Members   Gatto  
  and Ma   ) 

                        FEBRUARY 10, 2011

    An act to amend Section 21400 of the Vehicle Code,
relating to vehicles.   An act to amend Sections 33080,
33080.1, 33080.2, 33080.8, 33334.2, 33334.3, 33334.4, 33334.12,
33413, 33413.5, 33418, 33487, and 33490 of, to add Sections 33080.9,
33080.11, 33080.12, 33506, and 50464.5 to, to add Article 13
(commencing with Section 33460) to Chapter 4 of Part 1 of Division 24
of, and to repeal and add Section 33334.16 of, the Health and Safety
Code, relating to redevelopment. 



	LEGISLATIVE COUNSEL'S DIGEST


   AB 345, as amended,  Atkins   Torres  .
 Vehicles: traffic control device uniform standards: advisory
committee.   Redevelopment.  
   (1) The Community Redevelopment Law requires that each
redevelopment agency submit the final report of any audit undertaken
by any other local, state, or federal government entity to its
legislative body and to additionally present an annual report to the
legislative body containing specified information.  
   This bill would require the agency to include additional
information relating to any major audit violations, as defined, any
corrections to those violations, and planning and general
administrative expenses of the Low and Moderate Income Housing Fund.
The bill would authorize the Controller to conduct quality control
reviews of independent financial audit reports and require the
Controller to publish the results of his or her reviews. The bill
would require the Controller to comply with certain notification and
referral provisions in the event that the audit was conducted in a
manner that may constitute unprofessional conduct.  
   The bill would require the Department of Housing and Community
Development to conduct audits of redevelopment agencies to ensure
compliance with the housing provisions of the Community Redevelopment
Law. The bill would require each agency to annually deposit 0.05% of
any tax increment deposited into the Low and Moderate Income Housing
Fund into the Redevelopment Agency Accountability Fund, which the
bill would create, to fund the department audits.  
   (2) Existing law requires that funds used for purposes of
increasing, improving, and preserving a community's supply of low-
and moderate-income housing be held in a separate Low and Moderate
Income Housing Fund until used. Existing law limits the planning and
general administrative costs which may be paid with moneys from the
Low and Moderate Income Housing Fund.  
   The bill would revise the costs and expenses which may be
considered planning and general administrative costs for the purposes
of being paid from the Low and Moderate Income Housing Fund. Except
as provided, the bill would prohibit an agency from expending more
than 15% of the tax increment deposited in the fund for planning and
general administrative costs. The bill would impose other reporting
and accountability measures on agencies with respect to the use of
moneys in the fund for planning and administrative purposes. The bill
would revise various provisions governing an action to compel agency
compliance with specified provisions.  
   (3) Existing law requires, except as specified, each agency to
expend over each 10-year period of the implementation plan, the
moneys in the Low and Moderate Income Housing Fund to assist housing
for persons of moderate, low, and very low income according to
specified calculations.  
   The bill would instead require that at least 75% of the agency's
expenditures from the fund directly assist the new construction,
acquisition and substantial rehabilitation, or preservation of
housing for persons of extremely low, very low, low, or moderate
income, with at least 25% of the expenditures required to be directed
towards housing for persons of extremely low income and at least 50%
of the expenditures required to be directed towards housing for
persons of very low income.  
   (4) Existing law authorizes a redevelopment agency to merge
project areas under its jurisdiction, and requires that at least 20%
of specified taxes allocated to the redevelopment agency be deposited
into the Low and Moderate Income Housing Fund to assist in the
construction or rehabilitation of housing units for very low, and
low- and moderate-income households, as specified. Existing law
requires that if those funds have not been committed for that purpose
within 6 years, the agency shall offer the funds to the housing
authority that operates within the jurisdiction of the agency, as
specified.  
   This bill would delete the requirement that the funds be offered
to the housing authority.  
   (5) Existing law requires an agency that has failed to expend or
encumber excess surplus in the Low and Moderate Income Housing Fund
within one year to disburse the surplus voluntarily to the
appropriate county housing authority or another public agency or to
expend or encumber the surplus within 2 additional years.  
   The bill would delete these provisions. The bill would modify the
definition of the term "excess surplus."  
   (6) Existing law provides that whenever low- or moderate-income
housing dwelling units are destroyed or removed from the low- and
moderate-income housing market as part of a redevelopment that is
subject to a written agreement with the agency, or where financial
assistance has been provided by the agency, the agency is required to
provide replacement housing within 4 years of the destruction or
removal.  
   The bill would modify the agency's obligation to provide
replacement housing to low- or moderate-income persons and families
and would impose new requirements on the agency with respect to the
replacement housing plan and housing specifications. If a court has
found that an agency has failed to comply with these provisions, the
bill would require the court, at a minimum, to issue an order
temporarily prohibiting the agency from issuing any debt for any
project area, except as specified.  
   (7) This bill would make its provisions operative on January 1,
2018.  
   Existing law requires the Department of Transportation to consult
with local agencies before adopting rules and regulations prescribing
uniform standards and specifications for official traffic control
devices.  
   This bill would additionally require the department to establish,
after consulting with groups representing users of streets, roads,
and highways, a specified committee to advise the department, and to
hold public hearings regarding all of the above. The bill would
require the committee to include various representatives, including
representatives from organizations representing the interests of
nonmotorized users of the highway. 
   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.    Section 33080 of the   Health
and Safety Code   is amended to read: 
   33080.  (a) Every redevelopment agency shall file with the
Controller within six months of the end of the agency's fiscal year a
copy of the report required by Section 33080.1. In addition, each
redevelopment agency shall file with the department a copy of the
audit report required by subdivision (a) of Section 33080.1. The
reports shall be made in the time, format, and manner prescribed by
the Controller after consultation with the department.
   (b) The redevelopment agency shall provide a copy of the report
required by Section 33080.1, upon the written request of any person
or any taxing agency. If the report does not include detailed
information regarding administrative costs, professional services, or
other expenditures  required under Section 33080.1  , the
person or taxing agency may request, and the redevelopment agency
shall provide, that information  . The person or taxing
agency shall reimburse the redevelopment agency for all actual and
reasonable costs incurred in connection with the provision of the
requested information   , upon payment of fees covering
the direct costs of duplication  .
   SEC. 2.    Section 33080.1 of the   Health
and Safety Code   is amended to read: 
   33080.1.  Every redevelopment agency shall submit the final report
of any audit undertaken by any other local, state, or federal
government entity to its legislative body within 30 days of receipt
of that audit report. In addition, every redevelopment agency shall
present an annual report to its legislative body  at a public
hearing and make the report available on its Internet Web site, or if
the agency does not have an Internet Web site, on the community's
Internet Web site,  within six months of the end of the agency's
fiscal year. The annual report shall contain all of the following:
   (a) (1) An independent financial audit report for the previous
fiscal year. "Audit report" means an examination of, and opinion on,
the financial statements of the agency which present the results of
the operations and financial position of the agency, including all
financial activities with moneys required to be held in a separate
Low and Moderate Income Housing Fund pursuant to Section 33334.3.
This audit shall be conducted by a certified public accountant or
public accountant, licensed by the State of California, in accordance
with Government Auditing Standards adopted by the Comptroller
General of the United States. The audit report shall meet, at a
minimum, the audit guidelines prescribed by the Controller's office
pursuant to Section 33080.3 and also include a report on the agency's
compliance with laws, regulations, and administrative requirements
governing activities of the agency, and a calculation of the excess
surplus in the Low and Moderate Income Housing Fund as defined in
subdivision (g) of Section 33334.12.  The audit report shall
include a statement from the auditor as to whether or not the agency
has any major audit violations, as defined in subdivision (j) of
Section 33080.8.  
   (2) A statement describing each corrective measure taken in that
fiscal year to correct major audit violations identified during or
prior to that fiscal year by the agency, its auditor, or the
Department of Housing and Community Development.  
    (2) 
    (3)  However, the legislative body may elect to omit
from inclusion in the audit report any distinct activity of the
agency that is funded exclusively by the federal government and that
is subject to audit by the federal government.
   (b) A fiscal statement for the previous fiscal year that contains
the information required pursuant to Section 33080.5.
   (c) A description of the agency's activities in the previous
fiscal year affecting housing and displacement that contains the
information required by Sections 33080.4 and 33080.7.
   (d) A description of the agency's progress, including specific
actions and expenditures, in alleviating blight in the previous
fiscal year.
   (e) A list of, and status report on, all loans made by the
redevelopment agency that are fifty thousand dollars ($50,000) or
more, that in the previous fiscal year were in default, or not in
compliance with the terms of the loan approved by the redevelopment
agency.
   (f) A description of the total number and nature of the properties
that the agency owns and those properties the agency has acquired in
the previous fiscal year.
   (g) A list of the fiscal years that the agency expects each of the
following time limits to expire:
   (1) The time limit for the commencement for eminent domain
proceedings to acquire property within the project area.
   (2) The time limit for the establishment of loans, advances, and
indebtedness to finance the redevelopment project.
   (3) The time limit for the effectiveness of the redevelopment
plan.
   (4) The time limit to repay indebtedness with the proceeds of
property taxes. 
   (h) All of the following relating to the agency's planning and
general administrative expenses for the most recently completed
fiscal year paid from the Low and Moderate Income Housing Fund: 

   (1) The amount and percentage of funds deposited into the Low and
Moderate Income Housing Fund, exclusive of debt proceeds, expended
for planning and general administrative costs described in
subparagraphs (A), (C), (D), and (E) of paragraph (1) of subdivision
(d) of Section 33334.3.  
   (2) The amount and percentage of funds deposited into the Low and
Moderate Income Housing Fund, exclusive of debt proceeds, expended
for planning and general administrative costs described in
subparagraph (B) of paragraph (1) of subdivision (d) of Section
33334.3.  
   (3) Consistent with the categories described in paragraph (1) of
subdivision (d) of Section 33334.3, an itemization of each category
of planning and general administration expenditures from the Low and
Moderate Income Housing Fund and an explicit description of how the
expenditures are necessary for the production, improvement, or
preservation of low- and moderate-income housing.  
   (4) A list of the title of any agency, city, or county employees
for whom any portion of his or her salary, wages, benefits, or
nonpersonnel costs is paid from the Low and Moderate Income Housing
Fund, the nature of the employee's activities eligible to be paid
from the Low and Moderate Income Housing Fund, the percentage of time
the employee spends on activities eligible to be paid from the Low
and Moderate Income Housing Fund, the percentage of time the employee
spends on activities that are directly and necessarily associated
with a specific eligible housing development project or to the direct
administration of programs, and the percentage of the employee's
salary, wages, benefits, and nonpersonnel costs paid from the Low and
Moderate Income Housing Fund.  
   (5) A list of any overhead costs that are paid directly or
indirectly from the Low and Moderate Income Housing Fund, an
identification by title and department of any other employees with
whom the overhead costs are shared, and a description of the total
cost of the shared overhead costs.  
   (i) A statement of the amount and percentage of funds deposited
into the Low and Moderate Income Housing Fund, exclusive of debt
proceeds, expended for planning and general administration in each of
the preceding five fiscal years that begin after December 31, 2011,
broken down by the categories described in paragraph (1) of
subdivision (d) of Section 33334.3.  
   (j) A list of all real properties owned by the agency and
purchased with funds from the Low and Moderate Income Housing Fund,
the date of acquisition for each property, the agency's intended
purpose for each property, a statement of the amount, if any, of
moneys from the Low and Moderate Income Housing Fund used to acquire
the property, and a statement of the amount, if any, of moneys from
the Low and Moderate Income Housing Fund used to maintain the
property.  
   (k) A list of the redevelopment projects that have caused a
replacement obligation pursuant to subdivision (a) of Section 33413,
the respective number of units the agency is obligated to replace as
a result of each project, and the location and status of the
replacement units. This list shall cover each fiscal year from the
agency's last adopted implementation plan.  
   (l) A separate list of the development projects that have caused a
production obligation pursuant to subdivision (b) of Section 33413,
the respective number of units the agency is obligated to produce as
a result of each project, and the location and status of the
production units. This list shall cover each fiscal year from the
agency's last adopted implementation plan.  
   (m) For each housing project for which the agency has designated
funds, encumbered funds, or amended an existing designation or
encumbrance of funds during the fiscal year, and where the agency's
financing constitutes more than 50 percent of the total cost of the
low- and moderate-income housing units in the project, the project
name, location, number of affordable units, affordability level,
amount of agency financing, and the total cost of the low- and
moderate-income units.  
   (n) An agency that has deposited less than one hundred thousand
dollars ($100,000) into its Low and Moderate Income Housing Fund
during the fiscal year is not required to provide in its annual
report the information described in subdivisions (h) to (m),
inclusive.  
    (h) 
    (o)  Any other information that the agency believes
useful to explain its programs, including, but not limited to, the
number of jobs created and lost in the previous fiscal year as a
result of its activities.
   SEC. 3.    Section 33080.2 of the   Health
and Safety Code   is amended to read: 
   33080.2.  (a) When the agency presents the annual report to the
legislative body pursuant to Section 33080.1, the agency shall inform
the legislative body of any major audit violations of this part
based on the independent financial audit report  or an audit
investigation conducted by the department  . The agency shall
inform the legislative body that the failure to correct a major audit
violation of this part may result in the filing of an action by the
Attorney General pursuant to Section 33080.8  in a form that
indicates whether a referral to the Attorney General has been made
 . 
   (b) At the time the agency presents the annual report to the
legislative body pursuant to Section 33080.1, the legislative body
shall adopt a separate written resolution making a finding, based on
substantial evidence in the record, that the actual planning and
general administrative expenses for the most recently completed
fiscal year paid from the Low and Moderate Income Housing Fund did
not exceed the limits established in subparagraphs (A) and (B) of
paragraph (2) of subdivision (d) of Section 33334.3 or that the
exception in subparagraph (C) of paragraph (2) of subdivision (d) of
Section 33334.3 applies.  
    (b) 
    (c)  The legislative body shall review any report
submitted pursuant to Section 33080.1 and take any action it deems
appropriate on that report no later than the first meeting of the
legislative body occurring more than 21 days from the receipt of the
report.
   SEC. 4.    Section 33080.8 of the   Health
and Safety Code   is amended to read: 
   33080.8.  (a) On or before April 1 of each year, the Controller
shall compile a list of agencies that appear to have major audit
violations as defined in this section, based on the independent
financial audit reports filed with the Controller pursuant to Section
33080  , and make the list available on the Controller's
Internet Web site  .
   (b) On or before June 1 of each year, for each major audit
violation of each agency identified pursuant to subdivision (a), the
Controller shall determine if the agency has corrected the major
audit violation. Before making this determination, the Controller
shall consult with each affected agency  and may consult with
affected local community groups  . In making this determination,
the Controller may request and shall receive the prompt assistance
of public officials and public agencies, including, but not limited
to, the affected agencies, counties, and cities. If the Controller
determines that an agency has not corrected the major audit
violation, the Controller shall send a list of those agencies, their
major violations, all relevant documents, and the affidavits required
pursuant to subdivision (d) to the Attorney General for action
pursuant to this section.
   (c) For each agency that the Controller refers to the Attorney
General pursuant to subdivision (b), the Controller shall notify the
agency and the legislative body that the agency was on the list sent
to the Attorney General. The Controller's notice shall inform the
agency and the legislative body of the duties imposed by Section
33080.2.
   (d) Within 45 days of receiving the referral from the Controller
pursuant to subdivision (b), the Attorney General shall determine
whether to file an action to compel the agency's compliance with this
part. Any action filed pursuant to this section shall be commenced
in the  County   superior court  of
 Sacramento.   any county in which the Attorney
General has an office.  The time limit for the Attorney General
to make this determination is directory and not mandatory. Any action
shall be accompanied by an affidavit or affidavits, to be provided
by the Controller with the referral, setting forth facts that
demonstrate a likelihood of success on the merits of the claim that
the agency has a major audit violation. The affidavit shall also
certify that the agency and the legislative body were informed not
less than 10 days prior to the date on which the action was filed.
The agency shall file a response to any action filed by the Attorney
General pursuant to this section within 15 days of service.
   (e) (1) On the earliest day that the business of the court will
permit, but not later than 45 days after the filing of an action
pursuant to this section, the court shall conduct a hearing to
determine if good cause exists for believing that the agency has a
major audit violation and has not corrected that violation.
   (2) If the court determines that no good cause exists or that the
agency had a major audit violation but corrected the major audit
violation, the court shall dismiss the action.
   (3) If the court determines that there is good cause for believing
that the agency has a major audit violation and has not corrected
that major audit violation, the court shall immediately issue an
order that prohibits the agency from doing any of the following:
   (A) Encumbering any funds or expending any money derived from any
source except to pay the obligations designated in subparagraphs (A)
to  (G),   (F),  inclusive, of paragraph
(1) of subdivision (e) of Section 33334.12  , or to pay amounts
for the operation and administration of the agency in accordance with
the agency's most recently adopted budget  .
   (B) Adopting a redevelopment plan.
   (C) Amending a redevelopment plan except to correct the major
audit violation that is the subject of the action.
   (D) Issuing, selling, offering for sale, or delivering any bonds
or any other evidence of indebtedness  , except to  
increase, improve, preserve, or assist in the construction or
rehabilitation of, housing units that will be occupied by and
affordable to persons or families of extremely low, very low, low, or
moderate income, in accordance with this part  .
   (E) Incurring any indebtedness  , except to increase, improve,
preserve, or assist in the construction or rehabilitation of,
housing units that will be occupied by and affordable to persons or
families of extremely low, very low, low, or moderate income, in
accordance with this part  . 
   (F) Exercising the power of eminent domain. 
   (f) In a case that is subject to paragraph (3) of subdivision (e),
the court shall also set a hearing on the matter within 60 days 
after issuance of the order  .
   (g) If, on the basis of that subsequent hearing, the court
determines that the agency has a major audit violation and has not
corrected that violation, the court shall order the agency to comply
with this part within 30 days, and order the agency to forfeit to the
state  no more than:   a monetary  
sanction commensurate with the violation. The sanction shall not be
paid from the agency's Low and Moderate Income Housing Fund or any
other city, county, or agency special fund related to housing. 

   (1) Two thousand dollars ($2,000) in the case of a community
redevelopment agency with a total revenue, in the prior year, of less
than one hundred thousand dollars ($100,000) as reported in the
Controller's annual financial reports.  
   (2) Five thousand dollars ($5,000) in the case of a community
redevelopment agency with a total revenue, in the prior year, of at
least one hundred thousand dollars ($100,000) but less than two
hundred fifty thousand dollars ($250,000) as reported in the
Controller's annual financial reports.  
   (3) Ten thousand dollars ($10,000) in the case of a community
redevelopment agency with a total revenue, in the prior year, of at
least two hundred fifty thousand dollars ($250,000) as reported in
the Controller's annual financial reports. 
   (h) The order issued by the court pursuant to paragraph (3) of
subdivision (e) shall continue in effect until the court determines
that the agency has corrected the major audit violation. If the court
determines that the agency has corrected the major audit violation,
the court may dissolve its order issued pursuant to paragraph (3) of
subdivision (e) at any time.
   (i) An action filed pursuant to this section to compel an agency
to comply with this part is in addition to any other remedy, and is
not an exclusive means to compel compliance.  This section shall
not be construed to preclude an action to compel compliance with this
article by any other interested party or resident of the
jurisdiction. 
   (j) As used in this section, "major audit violation" means that,
for the fiscal year in question, an agency did not:
   (1) File an independent financial audit report that substantially
conforms with the requirements of subdivision (a) of Section 33080.1.

   (2) File a fiscal statement that includes substantially all of the
information required by Section 33080.5.
   (3) Establish time limits, as required by Section 33333.6.
   (4) Deposit all required tax increment revenues  and all other
funds required to be deposited into the fund  directly into the
Low and Moderate Income Housing Fund upon receipt, as required by
Section 33334.3, 33334.6, 33487, or 33492.16.
   (5) Establish a Low and Moderate Income Housing Fund, as required
by subdivision (a) of Section 33334.3  or Section 33487  .
   (6) Accrue interest earned by the Low and Moderate Income Housing
Fund to that fund, as required by subdivision (b) of Section 33334.3.

   (7)   Determine that the   Comply with
subdivisions (d) and (e) of Section 33334.3, governing eligible
expenditures for  planning and  administrative costs
charged to   general administration from  the Low
and Moderate Income Housing  Fund are necessary for the
production, improvement, or preservation of low-  Fund,
 and  moderate-income housing, as   adopt
the resolution  required by subdivision  (d) 
 (b)  of Section 33334.3  33080.2  .
   (8) Initiate development of housing on real property acquired
using moneys from the Low and Moderate Income Housing Fund or sell
the property, as required by Section 33334.16.
   (9) Adopt an implementation plan, as required by Section 33490.
   SEC. 5.    Section 33080.9 is added to the  
Health and Safety Code   , to read:  
   33080.9.  (a) (1) The department shall forward to the Attorney
General and the Controller a copy of any audit or investigation of a
redevelopment agency conducted pursuant to Section 50464.5.
   (2) On or before April 1 of each year, the department shall
determine for all audits and investigations conducted the previous
year, including those audits and investigations conducted pursuant to
Section 50464.5, whether an audit or investigation contains major
audit violations, as defined in subdivision (j) of Section 33080.8.
The department shall make the information available on its Internet
Web site.
   (b) On or before June 1 of each year, the department shall
determine for each major audit violation identified pursuant to
subdivision (a) if the agency has corrected the major audit
violation. Before making this determination, the department shall
consult with each affected agency and may consult with affected local
community groups. In making this determination, the department may
request and shall receive the prompt assistance of public officials
and public agencies, including, but not limited to, the affected
agencies, counties, and cities. If the department determines an
agency has not corrected the major audit violation, the department
shall send a list of those agencies, their major audit violations,
all relevant documentation, and the affidavits required pursuant to
subdivision (e) to the Attorney General for any action pursuant to
this section.
   (c) For each agency the department refers to the Attorney General
pursuant to subdivision (b), the department shall notify the agency
and its legislative body that the agency was on the list sent to the
Attorney General. The notice shall inform the agency and its
legislative body of the duties imposed pursuant to Section 33080.2.
   (d) For each agency the department refers to the Attorney General
pursuant to subdivision (b), the provisions of subdivisions (d) to
(i), inclusive, of Section 33080.8 shall apply, except that
references to the Controller in those subdivisions shall be deemed to
refer to the department.
   (e) Nothing in this section shall be construed to permit the
department to initiate or settle litigation, or to resolve any
departmental audit or investigation in a manner contrary to law.

   SEC. 6.    Section 33080.11 is added to the 
 Health and Safety Code   , to read:  
   33080.11.  (a) The Controller may conduct quality control reviews
of independent financial and compliance audit reports required by
Section 33080.1 to the extent it is feasible to do so within existing
budgetary resources. The Controller shall communicate the results of
his or her reviews to the independent auditor and the agency for
which the audit was conducted, and shall review his or her findings
with the independent auditor.
   (b) If the quality control review specified in subdivision (a)
indicates the audit was conducted in a manner that may constitute
unprofessional conduct, as defined in Section 5100 of the Business
and Professions Code, including, but not limited to, gross negligence
resulting in a material misstatement in the audit or failure to
disclose noncompliant acts, the Controller shall refer the case to
the California Board of Accountancy. If the board determines that the
independent auditor conducted an audit in an unprofessional manner,
the independent auditor is prohibited from performing any
redevelopment agency audit for a period of three years, in addition
to any other penalties the board may impose. 
   SEC. 7.    Section 33080.12 is added to the 
 Health and Safety Code   , to read:  
   33080.12.  (a) (1) Whenever the Controller determines through two
consecutive quality control reviews, pursuant to Section 33080.11,
that audits performed by an independent auditor pursuant to Section
33080.1 were not performed in substantial conformity with provisions
of the audit and report guidelines adopted pursuant to Section
33080.3, the Controller shall notify in writing the independent
auditor and the California Board of Accountancy.
   (2) If the independent auditor does not file an appeal in writing
to the board within 30 calendar days after receipt of the Controller'
s notification, the Controller's determination under this section
shall be final.
   (3) If an appeal is filed with the California Board of
Accountancy, the board shall complete an investigation of the appeal.
On the basis of the investigation, the board may do either of the
following:
   (A) Find the Controller's determination should not be upheld and
has no effect.
   (B) Schedule the appeal for a hearing.
   (b) If the Controller's determination pursuant to subdivision (a)
becomes final, the independent auditor shall be ineligible to conduct
audits pursuant to Section 33080.1 for a period of three years, or,
in the event of an appeal, for any period and
                        subject to conditions that may be ordered by
the California Board of Accountancy. No later than March 1 following
the date on which the Controller's determination becomes final, the
Controller shall notify each agency of those independent auditors
determined to be ineligible under this section or Section 33080.11.
Agencies shall not use the audit services of an independent auditor
ineligible under this section.
   (c) For the purposes of this section, "independent auditor" shall
mean any person or firm entering into a contract to conduct an audit
under Section 33080.1.
   (d) This section shall not preclude the California Board of
Accountancy from taking any disciplinary action it deems appropriate
under any other provisions of law. 
   SEC. 8.    Section 33334.2 of the   Health
and Safety Code   is amended to read: 
   33334.2.  (a) Except as provided in subdivision (k), not less than
20 percent of all taxes that 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, lower income
households, as defined by Section 50079.5, very low income
households, as defined in Section 50105, and extremely low income
households, as defined by Section 50106, that is occupied by these
persons and families, unless one of the following findings is made
annually by resolution:
   (1) (A) That no need exists in the community to improve, increase,
or preserve the supply of low- and moderate-income housing,
including housing for very low income households in a manner that
would benefit the project area and that this finding is consistent
with the housing element of the community's general plan required by
Article 10.6 (commencing with Section 65580) of Chapter 3 of Division
1 of Title 7 of the Government Code, including its share of the
regional housing needs of very low income households and persons and
families of low or moderate income.
   (B) This finding shall only be made if the housing element of the
community's general plan demonstrates that the community does not
have a need to improve, increase, or preserve the supply of low- and
moderate-income housing available at affordable housing cost to
persons and families of low or moderate income and to very low income
households. This finding shall only be made if it is consistent with
the planning agency's annual report to the legislative body on
implementation of the housing element required by subdivision (b) of
Section 65400 of the Government Code. No agency of a charter city
shall make this finding unless the planning agency submits the report
pursuant to subdivision (b) of Section 65400 of the Government Code.
This finding shall not take effect until the agency has complied
with subdivision (b) of this section.
   (2) (A) That some stated percentage less than 20 percent of the
taxes that are allocated to the agency pursuant to Section 33670 is
sufficient to meet the housing needs of the community, including its
share of the regional housing needs of persons and families of low-
or moderate-income and very low income households, and that this
finding is consistent with the housing element of the community's
general plan required by Article 10.6 (commencing with Section 65580)
of Chapter 3 of Division 1 of Title 7 of the Government Code.
   (B) This finding shall only be made if the housing element of the
community's general plan demonstrates that a percentage of less than
20 percent will be sufficient to meet the community's need to
improve, increase, or preserve the supply of low- and moderate-income
housing available at affordable housing cost to persons and families
of low or moderate income and to very low income households. This
finding shall only be made if it is consistent with the planning
agency's annual report to the legislative body on implementation of
the housing element required by subdivision (b) of Section 65400 of
the Government Code. No agency of a charter city shall make this
finding unless the planning agency submits the report pursuant to
subdivision (b) of Section 65400 of the Government Code. This finding
shall not take effect until the agency has complied with subdivision
(b) of this section.
   (C) For purposes of making the findings specified in this
paragraph and paragraph (1), the housing element of the general plan
of a city, county, or city and county shall be current, and shall
have been determined by the department pursuant to Section 65585 to
be in substantial compliance with Article 10.6 (commencing with
Section 65580) of Chapter 3 of Division 1 of Title 7 of the
Government Code.
   (3) (A) That the community is making a substantial effort to meet
its existing and projected housing needs, including its share of the
regional housing needs, with respect to persons and families of low
and moderate income, particularly very low income households, as
identified in the housing element of the community's general plan
required by Article 10.6 (commencing with Section 65580) of Chapter 3
of Division 1 of Title 7 of the Government Code, and that this
effort, consisting of direct financial contributions of local funds
used to increase and improve the supply of housing affordable to, and
occupied by, persons and families of low or moderate income and very
low income households is equivalent in impact to the funds otherwise
required to be set aside pursuant to this section. In addition to
any other local funds, these direct financial contributions may
include federal or state grants paid directly to a community and that
the community has the discretion of using for the purposes for which
moneys in the Low and Moderate Income Housing Fund may be used. The
legislative body shall consider the need that can be reasonably
foreseen because of displacement of persons and families of low or
moderate income or very low income households from within, or
adjacent to, the project area, because of increased employment
opportunities, or because of any other direct or indirect result of
implementation of the redevelopment plan. No finding under this
subdivision may be made until the community has provided or ensured
the availability of replacement dwelling units as defined in Section
33411.2 and until it has complied with Article 9 (commencing with
Section 33410).
   (B) In making the determination that other financial contributions
are equivalent in impact pursuant to this subdivision, the agency
shall include only those financial contributions that are directly
related to programs or activities authorized under subdivision (e).
   (C) The authority for making the finding specified in this
paragraph shall expire on June 30, 1993, except that the expiration
shall not be deemed to impair contractual obligations to bondholders
or private entities incurred prior to May 1, 1991, and made in
reliance on the provisions of this paragraph. Agencies that make this
finding after June 30, 1993, shall show evidence that the agency
entered into the specific contractual obligation with the specific
intention of making a finding under this paragraph in order to
provide sufficient revenues to pay off the indebtedness.
   (b) Within 10 days following the making of a finding under either
paragraph (1) or (2) of subdivision (a), the agency shall send the
Department of Housing and Community Development a copy of the
finding, including the factual information supporting the finding and
other factual information in the housing element that demonstrates
that either (1) the community does not need to increase, improve, or
preserve the supply of housing for low- and moderate-income
households, including very low income households, or (2) a percentage
less than 20 percent will be sufficient to meet the community's need
to improve, increase, and preserve the supply of housing for low-
and moderate-income households, including very low income households.
Within 10 days following the making of a finding under paragraph (3)
of subdivision (a), the agency shall send the Department of Housing
and Community Development a copy of the finding, including the
factual information supporting the finding that the community is
making a substantial effort to meet its existing and projected
housing needs. Agencies that make this finding after June 30, 1993,
shall also submit evidence to the department of its contractual
obligations with bondholders or private entities incurred prior to
May 1, 1991, and made in reliance on this finding.
   (c) In any litigation to challenge or attack a finding made under
paragraph (1), (2), or (3) of subdivision (a), the burden shall be
upon the agency to establish that the finding is supported by
substantial evidence in light of the entire record before the agency.
If an agency is determined by a court to have knowingly
misrepresented any material facts regarding the community's share of
its regional housing need for low- and moderate-income housing,
including very low income households, or the community's production
record in meeting its share of the regional housing need pursuant to
the report required by subdivision (b) of Section 65400 of the
Government Code, the agency shall be liable for all court costs and
plaintiff's attorney's fees, and shall be required to allocate not
less than 25 percent of the agency's tax increment revenues to its
Low and Moderate Income Housing Fund in each year thereafter.
   (d) 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.
   (e) In carrying out the purposes of this section, the agency may
exercise any or all of its powers for the construction,
rehabilitation, or preservation of affordable housing for extremely
low, very low, low-  ,  and moderate-income persons or
families, including the following:
   (1) Acquire real property or building sites subject to Section
33334.16.
   (2) (A) Improve real property or building sites with onsite or
offsite improvements, but only if both (i) the improvements are part
of the new construction or rehabilitation of affordable housing units
for low- or moderate-income persons that are directly benefited by
the improvements, and are a reasonable and fundamental component of
the housing units, and (ii) the agency requires that the units remain
available at affordable housing cost to, and occupied by, persons
and families of extremely low, very low, low, or moderate income for
the same time period and in the same manner as provided in
subdivision (c) and paragraph (2) of subdivision (f) of Section
33334.3.
   (B) If the newly constructed or rehabilitated housing units are
part of a larger project and the agency improves or pays for onsite
or offsite improvements pursuant to the authority in this
subdivision, the agency shall pay only a portion of the total cost of
the onsite or offsite improvement. The maximum percentage of the
total cost of the improvement paid for by the agency shall be
determined by dividing the number of housing units that are
affordable to low- or moderate-income persons by the total number of
housing units, if the project is a housing project, or by dividing
the cost of the affordable housing units by the total cost of the
project, if the project is not a housing project.
   (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, extremely low
income households, as defined by Section 50106, 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 housing units in housing developments that are assisted or
subsidized by public entities and that are threatened with imminent
conversion to market rates.
   (f) The agency may use these funds to meet, in whole or in part,
the replacement housing provisions in Section 33413. However, nothing
in this section shall be construed as limiting in any way the
requirements of that section.
   (g) (1) 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 resolution of the agency and the legislative body that
the use will be of benefit to the project. The determination by the
agency and the legislative 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.

   (2) (A) The Contra Costa County Redevelopment Agency may use these
funds anywhere within the unincorporated territory, or within the
incorporated limits of the City of Walnut Creek on sites contiguous
to the Pleasant Hill BART Station Area Redevelopment Project area.
The agency may only use these funds outside the project area upon a
resolution of the agency and board of supervisors determining that
the use will be of benefit to the project area. In addition, the
agency may use these funds within the incorporated limits of the City
of Walnut Creek only if the agency and the board of supervisors find
all of the following:
   (i) Both the County of Contra Costa and the City of Walnut Creek
have adopted and are implementing complete and current housing
elements of their general plans that the Department of Housing and
Community Development has determined to be in compliance with the
requirements of Article 10.6 (commencing with Section 65580) of
Chapter 3 of Division 1 of Title 7 of the Government Code.
   (ii) The development to be funded shall not result in any
residential displacement from the site where the development is to be
built.
   (iii) The development to be funded shall not be constructed in an
area that currently has more than 50 percent of its population
comprised of racial minorities or low-income families.
   (iv) The development to be funded shall allow construction of
affordable housing closer to a rapid transit station than could be
constructed in the unincorporated territory outside the Pleasant Hill
BART Station Area Redevelopment Project.
   (B) If the agency uses these funds within the incorporated limits
of the City of Walnut Creek, all of the following requirements shall
apply:
   (i) The funds shall be used only for the acquisition of land for,
and the design and construction of, the development of housing
containing units affordable to, and occupied by, low- and
moderate-income persons.
   (ii) If less than all the units in the development are affordable
to, and occupied by, low- or moderate-income persons, any agency
assistance shall not exceed the amount needed to make the housing
affordable to, and occupied by, low- or moderate-income persons.
   (iii) The units in the development that are affordable to, and
occupied by, low- or moderate-income persons shall remain affordable
for a period of at least 55 years.
   (iv) The agency and the City of Walnut Creek shall determine, if
applicable, whether Article XXXIV of the California Constitution
permits the development.
   (h) The Legislature finds and declares that expenditures or
obligations incurred by the agency pursuant to this section shall
constitute an indebtedness of the project.
   (i) 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 that is added to a
project by an amendment to a redevelopment plan, which amendment is
adopted on or after the effective date of this section. 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.
   (j) (1) (A) An action to compel compliance with the requirement of
Section 33334.3 to deposit not less than 20 percent of all taxes
that are allocated to the agency pursuant to Section 33670  or
other revenue  in the Low and Moderate Income Housing Fund shall
be commenced within 10 years of the alleged violation. A cause of
action for a violation accrues on the last day of the fiscal year in
which the funds were required to be deposited in the Low and Moderate
Income Housing Fund.
   (B) An action to compel compliance with the requirement of this
section or Section 33334.6 that money deposited in the Low and
Moderate Income Housing Fund be used by the agency for purposes of
increasing, improving, and preserving the community's supply of low-
and moderate-income housing available at affordable housing cost
shall be commenced within 10 years of the alleged violation. A cause
of action for a violation accrues on the date of the actual
expenditure of the funds.
   (C) An agency found to have deposited less into the Low and
Moderate Income Housing Fund than mandated by Section 33334.3 or to
have spent money from the Low and Moderate Income Housing Fund for
purposes other than increasing, improving, and preserving the
community's supply of low- and moderate-income housing, as mandated,
by this section or Section  33334.3 or  33334.6 shall repay
the funds with interest  , plus an additional 50 percent of that
amount and interest,  in one lump sum pursuant to Section 970.4
or 970.5 of the Government Code or may do either of the following:
   (i) Petition the court under Section 970.6 for repayment in
installments.
   (ii) Repay the portion of the judgment due to the Low and Moderate
Income Housing Fund in equal installments over a period of five
years following the judgment. 
   (D) An action to compel compliance with the requirements of
Section 33487 shall be commenced within 10 years of the alleged
violation. A cause of action accrues on the last day of the fiscal
year in which the funds were required to be deposited in the Low and
Moderate Income Housing Fund or the date of the actual expenditure of
the funds, as applicable. In the event the deposits to the Low and
Moderate Income Housing Fund are less than the amounts required
pursuant to Section 33487, or the expenditures from the Low and
Moderate Income Housing Fund are not consistent with Section 33487,
the repayment required by subparagraph (C) is applicable. This
subparagraph applies to actions filed on or after January 1, 2012.

   (2) Repayment shall not be made from the funds required to be set
aside or used for low- and moderate-income housing pursuant to this
 section.   part, or any other funds designated
for affordable housing. 
   (3) Notwithstanding clauses (i) and (ii) of subparagraph (C) 
or subparagraph (D)  of paragraph (1), all costs, including
reasonable attorney's fees if included in the judgment, are due and
shall be paid upon entry of judgment or order.
   (4) Except as otherwise provided in this subdivision, Chapter 2
(commencing with Section 970) of Part 5 of Division 3.6 of Title 1 of
the Government Code for the enforcement of a judgment against a
local public entity applies to a judgment against a local public
entity that violates this section.
   (5)  This   Except as provided in
subparagraph (D) of paragraph (1), this  subdivision applies to
actions filed on and after January 1, 2006.
   (6) The limitations period specified in subparagraphs (A)  ,
(B),  and  (B)   (D)  of paragraph (1)
does not apply to a cause of action brought pursuant to Chapter 9
(commencing with Section 860) of Title 10 of Part 2 of the Code of
Civil Procedure.
   (k) (1) From July 1, 2009, to June 30, 2010, inclusive, an agency
may suspend all or part of its required allocation to the Low and
Moderate Income Housing Fund from taxes that are allocated to that
agency pursuant to Section 33670.
   (2) An agency that suspends revenue pursuant to paragraph (1)
shall pay back to its low- and moderate-income housing fund the
amount of revenue that was suspended in the 2009-10 fiscal year
pursuant to this subdivision from July 1, 2010, to June 30, 2015,
inclusive.
   (3) An agency that suspends revenue pursuant to paragraph (1) and
fails to repay or have repaid on its behalf the amount of revenue
suspended pursuant to paragraph (2) shall, commencing July 1, 2015,
be required to allocate an additional 5 percent of all taxes that are
allocated to that agency pursuant to Section 33670 for low- and
moderate-income housing for the remainder of the time that the agency
receives allocations of tax revenue pursuant to Section 33670.
   (4) An agency that fails to pay or have paid on its behalf the
full amount calculated pursuant to subparagraph (J) of paragraph (2)
of subdivision (a) of Section 33690, or subparagraph (J) of paragraph
(2) of subdivision (a) of Section 33690.5, as the case may be,
shall, commencing July 1, 2010, or July 1, 2011, as applicable, be
required to allocate an additional 5 percent of all taxes that are
allocated to that agency pursuant to Section 33670 for low- and
moderate-income housing for the remainder of the time that the agency
receives allocations of tax revenue pursuant to Section 33670.
   SEC. 9.    Section 33334.3 of the   Health
and Safety Code   is amended to read: 
   33334.3.  (a) The funds that are required by Section 33334.2 or
33334.6 to be used for the purposes of increasing, improving, and
preserving the community's supply of low- and moderate-income housing
shall be held in a separate Low and Moderate Income Housing Fund
until used.
   (b) Any interest earned by the Low and Moderate Income Housing
Fund and any repayments or other income to the agency for loans,
advances, or grants, of any kind from the Low and Moderate Income
Housing Fund, shall accrue to and be deposited in, the fund and may
only be used in the manner prescribed for the Low and Moderate Income
Housing Fund.
   (c) The moneys in the Low and Moderate Income Housing Fund shall
be used to increase, improve, and preserve the supply of low- and
moderate-income housing within the territorial jurisdiction of the
agency. 
   (d) It is the intent of the Legislature that the Low and Moderate
Income Housing Fund be used to the maximum extent possible to defray
the costs of production, improvement, and preservation of low- and
moderate-income housing and that the amount of money spent for
planning and general administrative activities associated with the
development, improvement, and preservation of that housing not be
disproportionate to the amount actually spent for the costs of
production, improvement, or preservation of that housing. The agency
shall determine annually that the planning and administrative
expenses are necessary for the production, improvement, or
preservation of low- and moderate-income housing.  
   (e) (1)  Planning and general administrative costs which may be
paid with moneys from the Low and Moderate Income Housing Fund are
those expenses incurred by the agency which are directly related to
the programs and activities authorized under subdivision (e) of
Section 33334.2 and are limited to the following:  
   (A) Costs incurred for salaries, wages, and related costs of the
agency's staff or for services provided through interagency
agreements, and agreements with contractors, including usual indirect
costs related thereto.  
   (B) Costs incurred by a nonprofit corporation which are not
directly attributable to a specific project.  
   (2) Legal, architectural, and engineering costs and other
salaries, wages, and costs directly related to the planning and
execution of a specific project that are authorized under subdivision
(e) of Section 33334.2 and that are incurred by a nonprofit housing
sponsor are not planning and administrative costs for the purposes of
this section, but are instead project costs.  
   (d) (1) It is the intent of the Legislature that the Low and
Moderate Income Housing Fund be used to the maximum extent possible
to defray the actual cost of producing, improving, or preserving low-
and moderate-income housing and to restrict the use of Low and
Moderate Income Housing Fund moneys for planning and general
administrative costs to those which are necessary for and directly
related to lawful use of the Low and Moderate Income Housing Fund.
All of the following categories of costs paid from the Low and
Moderate Income Housing Fund shall be considered planning and general
administrative costs that are subject to the restrictions set forth
in paragraph (2):  
   (A) Employee compensation costs, including salaries, wages, and
benefits, and related nonpersonnel costs, including, but not limited
to, travel, training, publications, and conferences, paid to or on
behalf of any agency, city, or county employee whose duties include
activities authorized under subdivision (e) of Section 33334.2,
except for those activities that are necessary for and directly
related to the development of a specific eligible housing development
project or the deliverance of eligible programs
                        serving low- and moderate-income households.
If the employee spends any time on matters other than those
authorized under subdivision (e) of Section 33334.2, Low and Moderate
Income Housing Fund moneys may only be used to pay for employee
compensation and related nonpersonnel costs in proportion to the
actual time that the employee spends on activities authorized under
subdivision (e) of Section 33334.2.  
   (B) Employee compensation costs, including salaries, wages, and
benefits, and related nonpersonnel costs, including, but not limited
to, travel, training, publications, and conferences, paid to or on
behalf of any agency, city, or county employee for activities
authorized under subdivision (e) of Section 33334.2 that are
necessary for and directly related to the development of a specific
eligible housing development project or the deliverance of eligible
programs that serve low- and moderate-income households. Those
activities shall include negotiation and project management of
disposition and development agreements, land leases, loan agreements,
and similar affordable housing agreements; redevelopment agency work
on entitlements for eligible affordable housing developments; loan
processing and servicing; inspection of new and rehabilitated units;
construction monitoring of an eligible housing development; and
monitoring of affordable housing units. If the employee spends any
time on matters other than those authorized under subdivision (e) of
Section 33334.2, Low and Moderate Income Housing Fund moneys may only
be used to pay for employee compensation and related nonpersonnel
costs in proportion to the actual time that the employee spends on
activities authorized under subdivision (e) of Section 33334.2. 

   (C) Employee compensation costs, including salaries, wages, and
benefits, paid to or on behalf of any agency, city, or county
employee who supervises or manages the work of an employee or
employees specified in subparagraph (A) or (B) or who provides
general administrative services, including, but not limited to,
finance, legal, human resources, information technology, and other
administrative services, that indirectly support activities
authorized under subdivision (e) of Section 33334.2 and nonpersonnel
costs, including, but not limited to, travel, training, publications,
and conferences, for those employees that are directly related to
those activities. Employee compensation costs shall (i) be justified
by an independent cost allocation study no more than six years old,
and (ii) not represent a greater proportion of the employee's total
compensation than the proportion of employees working directly and
exclusively on activities authorized under subdivision (e) of Section
33334.2 in comparison to the total number of employees supervised,
managed, or indirectly supported by that employee.  
   (D) Overhead costs, including, but not limited to, rent or
mortgage payments, equipment, and office supplies. If the overhead
costs are shared with departments or employees whose duties include
activities other than those authorized under subdivision (e) of
Section 33334.2, the proportion of the overhead costs paid from the
Low and Moderate Income Housing Fund shall not exceed the proportion
of employees working directly and exclusively on activities
authorized under subdivision (e) of Section 33334.2 represented in
comparison to the total number of employees sharing the space,
equipment, or office supplies.  
   (E) The total value of any contracts for agency planning or
administrative services that are related to activities authorized
under subdivision (e) of Section 33334.2.  
   (F) Any other costs for planning and general administrative
activities that are related to activities authorized under
subdivision (e) of Section 33334.2.  
   (2) (A) Except as provided in subparagraph (C), an agency in any
fiscal year shall not expend more than 10 percent of the money
deposited into the Low and Moderate Income Housing Fund, exclusive of
debt proceeds, for planning and general administrative costs
described in subparagraphs (A), (C), (D), (E), and (F) of paragraph
(1).  
   (B) Except as provided in subparagraph (C), an agency in any
fiscal year shall not expend more than 10 percent of the money
deposited into the Low and Moderate Income Housing Fund, exclusive of
debt proceeds, for planning and general administrative costs
described in subparagraph (B) of paragraph (1), except that an agency
may additionally expend for these purposes any difference between
the cap described in subparagraph (A) and actual expenditures for
those planning and general administrative costs.  
   (C) Subparagraphs (A) and (B) shall not apply to a project
area-specific Low and Moderate Income Housing Fund during the first
five fiscal years after adoption of that specific project area.
Subparagraphs (A) and (B) shall apply to a new or amended project
area if tax increment for that new or amended project area is
deposited into an aggregate Low and Moderate Income Housing Fund
covering more than one project area.  
   (3) In a challenge related to the proportionality of costs, as
required by subparagraphs (A), (B), (C), and (D) of paragraph (1),
the agency shall bear the burden of proof to demonstrate that the
costs are proportionate. In a challenge related to compliance with
the requirements of paragraph (2), the agency shall bear the burden
of proof to demonstrate that costs are appropriately allocated to
subparagraph (B) of paragraph (1).  
   (e) (1) Notwithstanding paragraph (1) of subdivision (d), the
agency shall not expend moneys from the Low and Moderate Income
Housing Fund for any of the following purposes:  
   (A) Land use planning or related activities of a planning
department, including development or revision of the general plan
housing element, except for the payment of normal project-related
planning fees applicable to all similar development projects. This
limitation shall not preclude an agency from expending moneys from
the Low and Moderate Income Housing Fund toward the cost of agency
staff participation in the development of the general plan housing
element provided that those costs are counted towards the cap
described in subparagraph (A) of paragraph (2) of subdivision (d).
 
   (B) Lobbying. The Legislature finds and declares that this
subparagraph is declaratory of existing law. 
   (C) Administration of nonredevelopment activities unrelated to
activities allowed pursuant to this section, and Sections 33334.2,
33334.6, and 33487.  
   (2) An agency may expend up to 2 percent of the moneys deposited
into the Low and Moderate Income Housing Fund, exclusive of debt
proceeds, for code enforcement activities within a project area that
improve the housing opportunities of low- or moderate-income
households. However, if code enforcement activities result, directly
or indirectly, in the displacement of tenants or the removal from the
market of units affordable to or occupied by low- or moderate-income
households, the agency shall be subject to the relocation and
replacement obligations imposed by this part and the requirements of
Chapter 16 (commencing with Section 7260) of Division 7 of Title 1 of
the Government Code, except that Section 7265.3 of the Government
Code shall not apply. 
   (f) (1) The requirements of this subdivision apply to all new or
substantially rehabilitated housing units developed or otherwise
assisted with moneys from the Low and Moderate Income Housing Fund,
pursuant to an agreement approved by an agency on or after January 1,
1988. Except to the extent that a longer period of time may be
required by other provisions of law, the agency shall require that
housing units subject to this subdivision shall remain available at
affordable housing cost to, and occupied by, persons and families of
low or moderate income and very low income and extremely low income
households for the longest feasible time, but for not less than the
following periods of time:
   (A) Fifty-five years for rental units. However, the agency may
replace rental units with equally affordable and comparable rental
units in another location within the community if (i) the replacement
units are available for occupancy prior to the displacement of any
persons and families of low or moderate income residing in the units
to be replaced and (ii) the comparable replacement units are not
developed with moneys from the Low and Moderate Income Housing Fund.
   (B) Forty-five years for owner-occupied units. However, the agency
may permit sales of owner-occupied units prior to the expiration of
the 45-year period for a price in excess of that otherwise permitted
under this subdivision pursuant to an adopted program which protects
the agency's investment of moneys from the Low and Moderate Income
Housing Fund, including, but not limited to, an equity sharing
program which establishes a schedule of equity sharing that permits
retention by the seller of a portion of those excess proceeds based
on the length of occupancy. The remainder of the excess proceeds of
the sale shall be allocated to the agency and deposited in the Low
and Moderate Income Housing Fund. Only the units originally assisted
by the agency shall be counted towards the agency's obligations under
Section 33413.
   (C) Fifteen years for mutual self-help housing units that are
occupied by and affordable to very low and low-income households.
However, the agency may permit sales of mutual self-help housing
units prior to expiration of the 15-year period for a price in excess
of that otherwise permitted under this subdivision pursuant to an
adopted program that (i) protects the agency's investment of moneys
from the Low and Moderate Income Housing Fund, including, but not
limited to, an equity sharing program that establishes a schedule of
equity sharing that permits retention by the seller of a portion of
those excess proceeds based on the length of occupancy; and (ii)
ensures through a recorded regulatory agreement, deed of trust, or
similar recorded instrument that if a mutual self-help housing unit
is sold at any time after expiration of the 15-year period and prior
to 45 years after the date of recording of the covenants or
restrictions required pursuant to paragraph (2), the agency recovers,
at a minimum, its original principal from the Low and Moderate
Income Housing Fund from the proceeds of the sale and deposits those
funds into the Low and Moderate Income Housing Fund. The remainder of
the excess proceeds of the sale not retained by the seller shall be
allocated to the agency and deposited in the Low and Moderate Income
Housing Fund. For the purposes of this subparagraph, "mutual
self-help housing unit" means an owner-occupied housing unit for
which persons and families of very low and low income contribute no
fewer than 500 hours of their own labor in individual or group
efforts to provide a decent, safe, and sanitary ownership housing
unit for themselves, their families, and others authorized to occupy
that unit. Nothing in this subparagraph precludes the agency and the
developer of the mutual self-help housing units from agreeing to
45-year deed restrictions.
   (2) 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 this subdivision.
   (3) The agency shall require the recording in the office of the
county recorder of the following documents:
   (A) The covenants or restrictions implementing this subdivision
for each parcel or unit of real property subject to this subdivision.
The agency shall obtain and maintain a copy of the recorded
covenants or restrictions for not less than the life of the covenant
or restriction.
   (B) For all new or substantially rehabilitated units developed or
otherwise assisted with moneys from the Low and Moderate Income
Housing Fund on or after January 1, 2008, a separate document called
"Notice of Affordability Restrictions on Transfer of Property," set
forth in 14-point type or larger. This document shall contain all of
the following information:
   (i) A recitation of the affordability covenants or restrictions.
If the document recorded under this subparagraph is recorded
concurrently with the covenants or restrictions recorded under
subparagraph (A), the recitation of the affordability covenants or
restrictions shall also reference the concurrently recorded document.
If the document recorded under this subparagraph is not recorded
concurrently with the covenants or restrictions recorded under
subparagraph (A), the recitation of the affordability covenants or
restrictions shall also reference the recorder's identification
number of the document recorded under subparagraph (A).
   (ii) The date the covenants or restrictions expire.
   (iii) The street address of the property, including, if
applicable, the unit number, unless the property is used to
confidentially house victims of domestic violence.
   (iv) The assessor's parcel number for the property.
   (v) The legal description of the property.
   (4) The agency shall require the recording of the document
required under subparagraph (B) of paragraph (3) not more than 30
days after the date of recordation of the covenants or restrictions
required under subparagraph (A) of paragraph (3).
   (5) The county recorder shall index the documents required to be
recorded under paragraph (3) by the agency and current owner.
   (6) Notwithstanding Section 27383 of the Government Code, a county
recorder may charge all authorized recording fees to any party,
including a public agency, for recording the document specified in
subparagraph (B) of paragraph (3).
   (7) Notwithstanding any other provision of law, the covenants or
restrictions implementing this subdivision shall run with the land
and shall be enforceable against any owner who violates a covenant or
restriction and each successor in interest who continues the
violation, by any of the following:
   (A) The agency.
   (B) The community, as defined in Section 33002.
   (C) A resident of a unit subject to this subdivision.
   (D) A residents' association with members who reside in units
subject to this subdivision.
   (E) A former resident of a unit subject to this subdivision who
last resided in that unit.
   (F) An applicant seeking to enforce the covenants or restrictions
for a particular unit that is subject to this subdivision, if the
applicant conforms to all of the following:
   (i) Is of low or moderate income, as defined in Section 50093.
   (ii) Is able and willing to occupy that particular unit.
   (iii) Was denied occupancy of that particular unit due to an
alleged breach of a covenant or restriction implementing this
subdivision.
   (G) A person on an affordable housing waiting list who is of low
or moderate income, as defined in Section 50093, and who is able and
willing to occupy a unit subject to this subdivision.
   (8) A dwelling unit shall not be counted as satisfying the
affordable housing requirements of this part, unless covenants for
that dwelling unit are recorded in compliance with subparagraph (A)
of paragraph (3).
   (9) Failure to comply with the requirements of subparagraph (B) of
paragraph (3) shall not invalidate any covenants or restrictions
recorded pursuant to subparagraph (A) of paragraph (3).
   (g) "Housing," as used in this section, includes residential
hotels, as defined in subdivision (k) of Section 37912. The
definitions of "lower income households," "very low income
households," and "extremely low income households" in Sections
50079.5, 50105, and 50106 shall apply to this section. "Longest
feasible time," as used in this section, includes, but is not limited
to, unlimited duration.
   (h) "Increasing, improving, and preserving the community's supply
of low- and moderate-income housing," as used in this section and in
Section 33334.2, includes the preservation of rental housing units
assisted by federal, state, or local government on the condition that
units remain affordable to, and occupied by, low- and
moderate-income households, including extremely low and very low
income households, for the longest feasible time, but not less than
55 years, beyond the date the subsidies and use restrictions could be
terminated and the assisted housing units converted to market rate
rentals. In preserving these units the agency shall require that the
units remain affordable to, and occupied by, persons and families of
low- and moderate-income and extremely low and very low income
households for the longest feasible time but not less than 55 years.
However, the agency may replace rental units with equally affordable
and comparable rental units in another location within the community
if (1) the replacement units in another location are available for
occupancy prior to the displacement of any persons and families of
low or moderate income residing in the units to be replaced and (2)
the comparable replacement units are not developed with moneys from
the Low and Moderate Income Housing Fund.
   (i) Agencies that have more than one project area may satisfy the
requirements of Sections 33334.2 and 33334.6 and of this section by
allocating, in any fiscal year, less than 20 percent in one project
area, if the difference between the amount allocated and the 20
percent required is instead allocated, in that same fiscal year, to
the Low and Moderate Income Housing Fund from tax increment revenues
from other project areas. Prior to allocating funds pursuant to this
subdivision, the agency shall make the finding required by
subdivision (g) of Section 33334.2.
   (j) Funds from the Low and Moderate Income Housing Fund shall not
be used to the extent that other reasonable means of  public,
 private  ,  or commercial financing  of
  for  the new  construction, acquisition,
 or  substantially rehabilitated  
substantial rehabilitation of  units at the same level of
affordability and quantity are reasonably available to the agency or
to the owner of the units. Prior to the expenditure of funds from the
Low and Moderate Income Housing Fund for  the  new 
construction, acquisition,  or  substantially
rehabilitated   substantial rehabilitation of 
housing units, where those funds will exceed 50 percent of the cost
of producing the units, the agency shall find, based on substantial
evidence, that the use of the funds is necessary because the agency
or owner of the units has made a good faith attempt but been unable
to obtain  commercial   other public, private,
 or  private means   commercial financing
 of  financing  the units at the same level of
affordability and quantity.
   SEC. 10.    Section 33334.4 of the   Health
and Safety Code   is amended to read: 
   33334.4.  (a)  Except as specified in subdivision (d),
  (1)     Over  each
agency shall expend over each  10-year  period of
the  implementation plan,   planning
period,  as specified in clause (iii) of subparagraph (A) of
paragraph (2) of subdivision (a) of Section 33490,  that begins
before January 1, 2010, each agency shall expend  the moneys in
the Low and Moderate Income Housing Fund to assist housing for
persons of low income and housing for persons of very low income in
at least the same proportion as the total number of housing units
needed for each of those income groups bears to the total number of
units needed for persons of moderate, low, and very low income within
the community, as those needs have been determined for the community
pursuant to Section 65584 of the Government Code.  In
determining compliance with this obligation, the agency may adjust
the proportion by subtracting from the need identified for each
income category, the number of units for persons of that income
category that are newly constructed over the duration of the
implementation plan with other locally controlled government
assistance and without agency assistance and that are required to be
affordable to, and occupied by, persons of the income category for at
least 55 years for rental housing and 45 years for ownership
housing, except that in making an adjustment the agency may not
subtract units developed pursuant to a replacement housing obligation
under state or federal law.  
   (2) Following the last 10-year implementation planning period
referenced in paragraph (1), all of the following shall apply: 

   (A) At least 75 percent of each agency's expenditures from the Low
and Moderate Income Housing Fund exclusive of debt service payments
shall directly assist the new construction, acquisition and
substantial rehabilitation, or preservation of housing for persons of
extremely low, very low, or low income.  
   (B) At least 50 percent of each agency's expenditures from the Low
and Moderate Income Housing Fund exclusive of debt service payments
shall directly assist the new construction, acquisition and
substantial rehabilitation, or preservation of housing for persons of
extremely low or very low income. 
   (C) At least 25 percent of each agency's expenditures from the Low
and Moderate Income Housing Fund exclusive of debt service payments
shall directly assist the new construction, acquisition and
substantial rehabilitation, or preservation of housing for persons of
extremely low income.  
   (3) The expenditures for extremely low income housing, pursuant to
subparagraph (C) of paragraph (2), shall count towards the
requirements of subparagraphs (A) and (B) of paragraph (2), and the
expenditures for very low and extremely low-income housing pursuant
to subparagraphs (B) and (C) of paragraph (2) shall count towards the
requirements of subparagraph (A) of paragraph (2).  
   (4) An agency shall satisfy the requirements of paragraph (2) by
demonstrating in each implementation plan that as of the end of the
immediately preceding 5-year implementation planning period, the
agency's aggregate expenditures from the Low and Moderate Income
Housing Fund, exclusive of debt service payments, between the end of
the last 10-year implementation period referenced in paragraph (1)
and the end of the immediately preceding 5-year implementation
planning period satisfy the proportionality requirements set forth in
paragraph (2).  
   (5) (A) For purposes of this subdivision, "preservation" means
preserving the affordability of an assisted housing development that
is eligible for prepayment or termination or for which within the
expiration of rental restrictions is scheduled to occur within five
years, as those terms are defined in Section 65863.10 of the
Government Code.  
   (B) For purposes of this section, "housing for persons of
extremely low income" shall mean housing that is available at an
affordable rent or affordable housing cost to, and occupied by,
households earning 30 percent of the area median income or 30 percent
of the statewide median income, whichever is greater. 
   (b) Each agency shall expend over the duration of each
redevelopment implementation plan, the moneys in the Low and Moderate
Income Housing Fund to assist housing that is available to all
persons regardless of age in at least the same proportion as the
number of low-income households with a member under age 65 years
bears to the total number of low-income households of the community
as reported in the most recent census of the United States Census
Bureau. 
   (c) (1) An agency that has deposited an aggregate amount that is
less than two million dollars ($2,000,000) in the Low and Moderate
Income Housing Fund over the first five-year implementation planning
period following the last 10-year implementation planning period
referenced in paragraph (1) of subdivision (a) shall have 10 years
following the last 10-year implementation planning period referenced
in paragraph (1) of subdivision (a) to meet the requirements of
paragraph (2) of subdivision (a).  
    (c) 
    (2)  An agency that has deposited in the Low and
Moderate Income Housing Fund over the first five years of the period
of an implementation plan an aggregate  amount  that is less
than two million dollars ($2,000,000) shall have an extra five years
to meet the requirements of  this section.  
subdivision (b).  
   (d) For the purposes of this section, "locally controlled" means
government assistance where the community or other local government
entity has the discretion and the authority to determine the
recipient and the amount of the assistance, whether or not the source
of the funds or other assistance is from the state or federal
government. Examples of locally controlled government assistance
include, but are not limited to, Community Development Block Grant
Program (42 U.S.C. Sec. 5301 and following) funds allocated to a city
or county, Home Investment Partnership Program (42 U.S.C. Sec. 12721
and following) funds allocated to a city or county, fees or funds
received by a city or county pursuant to a city or county authorized
program, and the waiver or deferral of city or other charges.
 

(d) For the purposes of this section only, funds may be deemed
expended if the agency has contractually obligated the funds to an
entity that is independent of the agency or its community for the
development of a specific eligible housing development, provided that
if the contract is terminated prior to expenditure of the funds, the
funds shall be discounted from the calculations required in
subdivisions (a) and (b) and the provisions of subdivision (e) shall
apply.  
   (e) (1) If an agency fails to comply with subdivision (a) within
the required time period, it shall not expend any moneys from the Low
and Moderate Income Housing Fund to assist households whose incomes
exceed 50 percent of the area median income until the agency has
expended the funds that it should have expended for extremely low,
very low, and low-income housing, respectively, in previous
implementation plan periods.  
   (2) If an agency fails to comply with subdivision (b) within the
required time period, it shall not expend any moneys from the Low and
Moderate Income Housing Fund to assist senior households until the
agency has expended the funds that it should have expended for
housing available to all persons regardless of age in previous
implementation plan periods.  
   (f) Agencies are encouraged to expend moneys in the Low and
Moderate Income Housing Fund to assist special housing needs
identified in the community's housing element pursuant to paragraph
(7) of subdivision (a) of Section 65583 of the Government Code. 

   SEC. 11.    Section 33334.12 of the   Health
and Safety Code   is amended to read:  
   33334.12.  (a) (1) Upon failure of the agency to expend or
encumber excess surplus in the Low and Moderate Income Housing Fund
within one year from the date the moneys become excess surplus, as
defined in paragraph (1) of subdivision (g), the agency shall do
either of the following:
   (A) Disburse voluntarily its excess surplus to the county housing
authority or to another public agency exercising housing development
powers within the territorial jurisdiction of the agency in
accordance with subdivision (b).
   (B) Expend or encumber its excess surplus within two additional
years.
   (2) 
    33334.12.    (a)     Agencies
  shall expend moneys from the Low and Moderate Income
Housing Fund in a manner that does not accrue an excess surplus, as
defined in paragraph (1) of subdivision (c).  If an agency,
after three years has elapsed from the date that the moneys become
excess surplus, has not expended or encumbered its excess surplus,
the agency shall be subject to sanctions pursuant to subdivision (e),
until the agency has expended or encumbered its excess surplus plus
an additional amount, equal to 50 percent of the amount of the excess
surplus that remains at the end of the three-year period. The
additional expenditure shall not be from the agency's Low and
Moderate Income Housing Fund,  or any other city, county, or
agency special fund related to housing,  but shall be used in a
manner that meets all requirements for expenditures from that fund.
   (b)  The   For disbursements or expenditures
of excess surplus made prior to January 1,   2012, the 
housing authority or other public agency to which the money is
transferred shall utilize the moneys for the purposes of, and subject
to the same restrictions that are applicable to, the redevelopment
agency under this part, and for that purpose may exercise all of the
powers of a housing authority under Part 2 (commencing with Section
34200) to an extent not inconsistent with these limitations.
   (c)  Notwithstanding   For disbursements or
expenditures of excess surplus made prior to January 1, 2012,
notwithstanding  Section 34209 or any other  provision
of  law, for the purpose of accepting a transfer of, and
using, moneys pursuant to this section, the housing authority of a
county or other public agency may exercise its powers within the
territorial jurisdiction of a city redevelopment agency located in
that county.
   (d)  The   For disbursements or expenditures
of excess surplus made prior to January 1, 2012, the  amount of
excess surplus that shall be transferred to the housing authority or
other public agency because of a failure of the redevelopment agency
to expend or encumber excess surplus within one year shall be the
amount of the excess surplus that is not so expended or encumbered.
The housing authority or other public agency to which the moneys are
transferred shall expend or encumber these moneys for authorized
purposes not later than three years after the date these moneys were
transferred from the Low and Moderate Income Housing Fund.
   (e) (1) Until a time when the agency has expended or encumbered
excess surplus moneys pursuant to subdivision (a), the agency shall
be prohibited from encumbering any funds or expending any moneys
derived from any source, except that the agency may encumber funds
and expend moneys to pay the following obligations, if any, that were
incurred by the agency prior to three years from the date the moneys
became excess surplus:
   (A) Bonds, notes, interim certificates, debentures, or other
obligations issued by an agency, whether funded, refunded, assumed,
or otherwise, pursuant to Article 5 (commencing with Section 33640).
   (B) Loans or moneys advanced to the agency, including, but not
limited to, loans from federal, state, or local agencies, or a
private entity.
   (C) Contractual obligations which, if breached, could subject the
agency to damages or other liabilities or remedies.
   (D) Obligations incurred pursuant to Section 33445.
   (E) Indebtedness incurred pursuant to Section 33334.2 or 33334.6.
   (F) Obligations incurred pursuant to Section 33401.
   (G) An amount, to be expended for the operation and administration
of the agency, that may not exceed 75 percent of the amount spent
for those purposes in the preceding fiscal year.
   (2) This subdivision shall not be construed to prohibit the
expenditure of excess surplus funds or other funds to meet the
requirement in  paragraph (2) of  subdivision (a)
that the agency spend or encumber excess surplus funds, plus an
amount equal to 50 percent of excess surplus, prior to spending or
encumbering funds for any other purpose. 
   (f) Nothing in this section shall be construed to limit any
authority a redevelopment agency may have under other provisions of
this part to contract with a housing authority for increasing or
improving the community's supply of low- and moderate-income housing.
 
    (g) 
    (f)  For purposes of this section:
   (1) "Excess surplus" means any unexpended and unencumbered amount
in an agency's Low and Moderate Income Housing Fund that exceeds the
greater of one million dollars ($1,000,000) or the aggregate amount
deposited into the Low and Moderate Income Housing Fund pursuant to
Sections 33334.2 and 33334.6 during the agency's preceding four
fiscal years. The first fiscal year to be included in this
computation is the 1989-90 fiscal year, and the first date on which
an excess surplus may exist is July 1, 1994.
   (2) Moneys shall be deemed encumbered if committed pursuant to a
legally enforceable contract or agreement for expenditure for
purposes specified in Section 33334.2 or 33334.3.
   (3) (A) For purposes of determining whether an excess surplus
exists, it is the intent of the Legislature to give credit to
agencies which convey land for less than fair market value, on which
low- and moderate-income housing is built or is to be built if at
least 49 percent of the units developed on the land are available at
affordable housing cost to lower income households for at least the
time specified in subdivision (e) of Section 33334.3, and otherwise
comply with all of the provisions of this division applicable to
expenditures of moneys from a low- and moderate-income housing fund
established pursuant to Section 33334.3. Therefore, for the sole
purpose of determining the amount, if any, of an excess surplus, an
agency may make the following calculation: if an agency sells,
leases, or grants land acquired with moneys from the Low and Moderate
Income Housing Fund, established pursuant to Section 33334.3, for an
amount which is below fair market value, and if at least 49 percent
of the units constructed or rehabilitated on the land are affordable
to lower income households, as defined in Section 50079.5, the
difference between the fair market value of the land and the amount
the agency receives may be subtracted from the amount of moneys in an
agency's Low and Moderate Income Housing Fund.
   (B) If taxes that are deposited in the Low and Moderate Income
Housing Fund are used as security for bonds or other indebtedness,
the proceeds of the bonds or other indebtedness, and income and
expenditures related to those proceeds, shall not be counted in
determining whether an excess surplus exists. The unspent portion of
the proceeds of bonds or other indebtedness, and income related
thereto, shall be excluded from the calculation of the unexpended and
unencumbered amount in the Low and Moderate Income Housing Fund when
determining whether an excess surplus exists.
   (C) Nothing in this subdivision shall be construed to restrict the
authority of an agency provided in any other provision of this part
to expend funds from the Low and Moderate Income Housing Fund.
   (D) The department shall develop and periodically revise the
methodology to be used in the calculation of excess surplus as
required by this section. The director shall appoint an advisory
committee to advise in the development of this methodology. The
advisory committee shall include department staff, affordable housing
advocates, and representatives of the California Redevelopment
Association, the California Society of Certified Public Accountants,
the Controller, and any other authorities or persons interested in
the field that the director deems necessary and appropriate. 

    (h) 
    (g)  Communities in which an agency has disbursed excess
surplus funds pursuant to this section shall not disapprove a low-
or moderate-income housing project funded in whole or in part by the
excess surplus funds if the project is consistent with applicable
building codes and the land use designation specified in any element
of the general plan as it existed on the date the application was
deemed complete. A local agency may require compliance with local
development standards and policies appropriate to and consistent with
meeting the quantified objectives relative to the development of
housing, as required in housing elements of the community pursuant to
subdivision (b) of Section 65583 of the Government Code. 
    (i) 
    (h)  Notwithstanding subdivision (a), any agency that
has funds that become excess surplus on July 1, 1994, shall have,
pursuant to subdivision (a), until January 1, 1995, to decide to
transfer the funds to a housing authority or other public agency, or
until January 1, 1997, to expend or encumber those funds, or face
sanctions pursuant to subdivision (e).
   SEC. 12.    Section 33334.16 of the   Health
and Safety Code   is repealed.  
   33334.16.  For each interest in real property acquired using
moneys from the Low and Moderate Income Housing Fund, the agency
shall, within five years from the date it first acquires the property
interest for the development of housing affordable to persons and
families of low and moderate income, initiate activities consistent
with the development of the property for that purpose. These
activities may include, but are not limited to, zoning changes or
agreements entered into for the development and disposition of the
property. If these activities have not been initiated within this
period, the legislative body may, by resolution, extend the period
during which the agency may retain the property for one additional
period not to exceed five years. The resolution of extension shall
affirm the intention of the legislative body that the property be
used for the development of housing affordable to persons and
families of low and moderate income. In the event that physical
development of the property for this purpose has not begun by the end
of the extended period, or if the agency does not comply with this
requirement, the property shall be sold and the moneys from the sale,
less reimbursement to the agency for the cost of the sale, shall be
deposited in the agency's Low and Moderate Income Housing Fund.

   SEC. 13.    Section 33334.16 is added to the 
 Health and Safety Code   , to read:  
   33334.16.  (a) (1) For each interest in real property acquired
using moneys from the Low and Moderate Income Housing Fund, the
agency shall, within five years from the date of acquisition,
complete at least one of the following activities:
   (A) Enter into a disposition and development agreement or a land
lease with a third party for the development of housing affordable to
persons and families of low and moderate income.
   (B) Obtain final land use entitlements and secure full financing
for agency development of housing affordable to persons and families
of low and moderate income.
   (C) Submit a remedial action plan for the real property to the
appropriate oversight agency, including, but not limited to, the
Department of Toxic Substances Control, a California regional water
quality control board, or the Office of Human Health Risk Assessment,
for the cleanup of contamination.
   (2) On or after January 1, 2013, if none of the activities
described in paragraph (1) has been completed within five years, or
if less than 10 percent of the dwelling units or floor area of a
project is developed within 10 years from the date the agency
originally acquired the property, the agency shall reimburse the Low
and Moderate Income Housing Fund 150 percent of the amount expended
to acquire and maintain the property or of the current fair market
value of the property, whichever amount is greater.
   (3) If the agency owns two or more adjacent parcels of real
property that comprise a single redevelopment project for which the
parcels are described in the implementation plan, the date of
acquisition for all such parcels shall be the date of acquisition of
the last acquired parcel, provided that this date shall not be later
than 5 years after the acquisition of the first parcel.
   (4) An agency may adopt a resolution to petition the department
for, and the department may grant, a single extension for up to five
years of the deadlines established in paragraphs (1) and (2) if the
department makes a finding that the failure to complete the required
activities is due to circumstances beyond the agency's or community's
control and that the agency has a feasible plan for the development
of housing affordable to persons and families of low and moderate
income on the real property within the period of the extension. The
agency shall provide information supporting the need for the
extension and a plan for development of the property. The department
shall solicit comments from known or expected parties interested in
the petition and consider comments from these and any other parties.
The department shall establish a schedule of fees to cover but not
exceed its costs under this subparagraph, and at the time the
petition is submitted the agency shall pay the fees with funds other
than those required to be set aside or used for low- and
moderate-income housing pursuant to this part or otherwise designated
for affordable housing.
   (b) At any time, in addition to proceeds from the sale or
transfer, the agency shall deposit into the Low and Moderate Income
Housing Fund from agency revenues other than those required to be
deposited in the Low and Moderate Income Housing Fund an amount equal
to 50 percent of the fair market value of the property at the time
it is sold or transferred or, if the property is not sold or
transferred, of the fair market value of the land at the time a
building permit is issued for the property. This subdivision shall
apply only under either of the following conditions:
   (1) A real property acquired using moneys from the Low and
Moderate Income Housing Fund is sold or transferred for a purpose
other than housing affordable to persons and families of low and
moderate income.
   (2) A real property acquired using moneys from the Low and
Moderate Income Housing Fund is developed such that less than 50
percent of the floor area, or a percentage of the floor area equal to
the proportion that moneys from the Low and Moderate Income Housing
Fund represent to the total acquisition cost, whichever is less, is
housing affordable to persons and families of low and moderate
income. 
   SEC. 14.    Section 33413 of the   Health
and Safety Code   is amended to read: 
   33413.  (a) Whenever dwelling units  housing 
 affordable to or occupied by  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
that is subject to a 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 that 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 or a lower 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. When dwelling units are destroyed or removed on or after
January 1, 2002, 100 percent of the replacement dwelling units shall
be available at affordable housing cost to persons in the same or a
lower income category (low, very low, or moderate), as the persons
displaced from those destroyed or removed units   ,
  provided that if the units are provided outside the
project area the agency shall provide two units for each unit the
agency is obligated to replace. The replacement obligation shall
apply to all units affordable to low- or moderate-income persons or
families at the time of initiation of negotiations of a written
agreement with or financial assistance from the agency. For purposes
of this section, the inclusion of residential units in the
rehabilitation of an existing nonresidential structure shall
constitute construction  . 
   (1) When dwelling units are destroyed or removed after September
1, 1989, 75 percent of the replacement dwelling units shall be
available at affordable housing cost to, and occupied by, persons and
families in the same or a lower income level of very low income
households, lower income households, and persons and families of low
and moderate income, as the persons and families displaced from those
destroyed or removed units.  
   (2) When dwelling units are destroyed or removed on or after
January 1, 2002, 100 percent of the replacement dwelling units shall
be available at affordable housing cost to, and occupied by, persons
and families in the same or a lower income category (extremely low,
very low, low, or moderate), as the persons and families displaced
from those destroyed or removed units. This paragraph is declaratory
of existing law.  
   (3) On or after January 1, 2012, in the case where the agency is
obligated to replace vacant units, those replacement units shall be
available at affordable housing costs to, and occupied by, persons
and families in the same or lower income category (extremely low,
very low, low, or moderate) in the same proportion as the units
occupied or last occupied by low- and moderate-income households in
the property.  
   (4) Up to 25 percent of the replacement obligation incurred during
a five-year implementation plan may be satisfied in either of the
following ways:  
   (A) With units that have been rehabilitated such that
after-rehabilitation value is increased by 50 percent or more of the
pre-rehabilitation value, as evidenced by pre and post rehabilitation
appraisals and, the rehabilitated units were, at the time the
dwelling units to be replaced were destroyed or removed were either
of the following:  
   (i) At risk of demolition or closure due to substandard conditions
and occupied by extremely low or very low income households. 

   (ii) Vacant due to substandard conditions as defined in Section
1941.1 of the Civil Code.  
   (B) With substantially rehabilitated multifamily rental dwelling
units, as defined in paragraph (2) of subdivision (b) and evidenced
by pre and post rehabilitation appraisals, provided that the agency
shall substantially rehabilitate within the project area, two units
for each unit the agency is obligated to replace, or outside of the
project area, three units for each unit the agency is obligated to
replace.  
   (5) For each project containing rehabilitated replacement units,
the agency shall adopt a separate written resolution, after public
hearing and based on substantial evidence, that the rehabilitation of
the replacement dwelling units complies with this subdivision. 

   (b) (1) Prior to the time limit on the effectiveness of the
redevelopment plan established pursuant to Sections 33333.2, 33333.6,
and 33333.10 at least 30 percent of all new and substantially
rehabilitated dwelling units developed by an agency shall be
available at affordable housing cost to, and occupied by, 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, and occupied by, persons and families of low or moderate income
shall be available at affordable housing cost to, and occupied by,
very low income households.
   (2) (A) (i) Prior to the time limit on the effectiveness of the
redevelopment plan established pursuant to Sections 33333.2, 33333.6,
and 33333.10 at least 15 percent of all new and substantially
rehabilitated dwelling units developed within a project area under
the jurisdiction of an agency by public or private entities or
persons other than the agency shall be available at affordable
housing cost to, and occupied by, 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, and occupied
by, persons and families of low or moderate income shall be available
at affordable housing cost to, and occupied by, very low income
households.
   (ii) To satisfy this paragraph, in whole or in part, the agency
may cause, by regulation or agreement, to be available, at affordable
housing cost, to, and occupied by, persons and families of low or
moderate income or to very low income households, as applicable, two
units outside a project area for each unit that otherwise would have
been required to be available inside a project area.
   (iii) On or after January 1, 2002, as used in this paragraph and
in paragraph (1), "substantially rehabilitated dwelling units" means
all units substantially rehabilitated, with agency assistance. Prior
to January 1, 2002, "substantially rehabilitated dwelling units"
shall mean substantially rehabilitated multifamily rented dwelling
units with three or more units regardless of whether there is agency
assistance, or substantially rehabilitated, with agency assistance,
single-family dwelling units with one or two units.
   (iv) As used in this paragraph and in paragraph (1), "substantial
rehabilitation" means rehabilitation, the value of which constitutes
25 percent of the  after rehabilitation  
after-rehabilitation  value of the dwelling, inclusive of the
land value.
   (v) To satisfy this paragraph, the agency may aggregate new or
substantially rehabilitated dwelling units in one or more project
areas, if the agency finds, based on substantial evidence, after a
public hearing, that the aggregation will not cause or exacerbate
racial, ethnic, or economic segregation.
   (B) To satisfy the requirements of paragraph (1) and subparagraph
(A), the agency may purchase, or otherwise acquire or cause by
regulation or agreement the purchase or other acquisition of,
long-term affordability covenants on multifamily units that restrict
the cost of renting or purchasing those units that either: (i) are
not presently available at affordable housing cost to persons and
families of low or very low income households, as applicable; or (ii)
are units that are presently
      available at affordable housing cost to this same group of
persons or families, but are units that the agency finds, based upon
substantial evidence, after a public hearing, cannot reasonably be
expected to remain affordable to this same group of persons or
families.
   (C) To satisfy the requirements of paragraph (1) and subparagraph
(A), the long-term affordability covenants purchased or otherwise
acquired pursuant to subparagraph (B) shall be required to be
maintained on dwelling units at affordable housing cost to, and
occupied by, persons and families of low or very low income, for the
longest feasible time but not less than 55 years for rental units and
45 years for owner-occupied units. Not more than 50 percent of the
units made available pursuant to paragraph (1) and subparagraph (A)
may be assisted through the purchase or acquisition of long-term
affordability covenants pursuant to subparagraph (B). Not less than
50 percent of the units made available through the purchase or
acquisition of long-term affordability covenants pursuant to
subparagraph (B) shall be available at affordable housing cost to,
and occupied by, very low income households.
   (D) To satisfy the requirements of paragraph (1) and subparagraph
(A), each mutual self-help housing unit, as defined in subparagraph
(C) of paragraph (1) of subdivision (f) of Section 33334.3, that is
subject to a 15-year deed restriction shall count as one-third of a
unit.
   (3) The requirements of this subdivision shall apply independently
of the requirements of subdivision (a). The requirements of this
subdivision shall apply, 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, unless an agency determines otherwise.
   (4) Each redevelopment agency, as part of the implementation plan
required by Section 33490, shall adopt a plan to comply with the
requirements of this subdivision for each project area. The plan
shall be consistent with, and may be included within, the community's
housing element. The plan shall be reviewed and, if necessary,
amended at least every five years in conjunction with  either
 the  housing element cycle or the  plan
implementation cycle. The plan shall ensure that the requirements of
this subdivision are met every 10 years. If the requirements of this
subdivision are not met by the end of each 10-year period, the agency
shall meet these goals on an annual basis until the requirements for
the 10-year period are met. If the agency has exceeded the
requirements within the 10-year period, the agency may count the
units that exceed the requirement in order to meet the requirements
during the next 10-year period. The plan shall contain the contents
required by paragraphs (2), (3), and (4) of subdivision (a) of
Section 33490.
   (c) (1) The agency shall require that the aggregate number of
replacement dwelling units and other dwelling units rehabilitated,
developed, constructed, or price restricted pursuant to subdivision
(a) or (b) remain available at affordable housing cost to, and
occupied by, persons and families of  low-income,
moderate-income, and   extremely low income,  very
low income  households,   , low income, and
moderate income,  respectively, for the longest feasible time,
but for not less than 55 years for rental units, 45 years for home
ownership units, and 15 years for mutual self-help housing units, as
defined in subparagraph (C) of paragraph (1) of subdivision (f) of
Section 33334.3, except as set forth in paragraph (2). Nothing in
this paragraph precludes the agency and the developer of the mutual
self-help housing units from agreeing to 45-year deed restrictions.
   (2) Notwithstanding paragraph (1), the agency may permit sales of
owner-occupied units prior to the expiration of the 45-year period,
and mutual self-help housing units prior to the expiration of the
15-year period, established by the agency for a price in excess of
that otherwise permitted under this subdivision pursuant to an
adopted program that protects the agency's investment of moneys from
the Low and Moderate Income Housing Fund, including, but not limited
to, an equity sharing program that establishes a schedule of equity
sharing that permits retention by the seller of a portion of those
excess proceeds, based on the length of occupancy. The remainder of
the excess proceeds of the sale shall be allocated to the agency, and
deposited into the Low and Moderate Income Housing Fund. The agency
shall, within three years from the date of sale pursuant to this
paragraph of each home ownership or mutual self-help housing unit
subject to a 45-year deed restriction, and every third mutual
self-help housing unit subject to a 15-year deed restriction, expend
funds to make affordable an equal number of units at the same or
lowest income level as the unit or units sold pursuant to this
paragraph, for a period not less than the duration of the original
deed restrictions. Only the units originally assisted by the agency
shall be counted towards the agency's obligations under Section
33413.
   (3) The requirements of this section shall be made enforceable in
the same manner as provided in paragraph (7) of subdivision (f) of
Section 33334.3.
   (4) If land on which the dwelling units required by this section
are located is deleted from the project area, the agency shall
continue to require that those units remain affordable as specified
in this subdivision.
   (5) For each unit counted towards the requirements of 
subdivisions   subdivision  (a)  and
  or  (b), the agency shall require the recording
in the office of the county recorder of covenants or restrictions
that ensure compliance with this subdivision. With respect to
covenants or restrictions that are recorded on or after January 1,
2008, the agency shall comply with the requirements of paragraphs (3)
and (4) of subdivision (f) 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 that are added to a project area by amendment to a final
redevelopment plan adopted on or after 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. In addition, subdivision
(b) shall apply to redevelopment plans adopted prior to January 1,
1976, for which an amendment is adopted pursuant to Section 33333.10,
except that subdivision (b) shall apply to those redevelopment plans
prospectively only so that the requirements of subdivision (b) shall
apply only to new and substantially rehabilitated dwelling units for
which the building permits are issued on or after the date that the
ordinance adopting the amendment pursuant to Section 33333.10 becomes
effective.
   (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 three 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
equals or exceeds 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 and occupied by 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. 
   (h) If a court finds that an agency has failed to comply with the
requirements of this section, the court, at a minimum, shall issue an
order that prohibits the agency from issuing any debt for any
project area, except debt from which all the proceeds will be
deposited into the Low and Moderate Income Housing Fund or otherwise
used to comply with the requirements of this section, until such time
as the court finds that the agency has fully complied with the
requirements of this section. 
   SEC. 15.    Section 33413.5 of the   Health
and Safety Code   is amended to read: 
   33413.5.  Not less than 30 days prior to the execution of an
agreement for acquisition of real property,  or  the
execution of an agreement for the disposition and development of
property,  or  the execution of an owner
participation agreement,  which   or other 
agreement  or assistance that  would lead to the
destruction or removal of dwelling units from the low- and
moderate-income housing market, the agency shall adopt by resolution
a replacement housing plan. For a reasonable time prior to adopting a
replacement housing plan by resolution, the agency shall make
available a draft of the proposed replacement housing plan for review
and comment by the  tenants to be displaced, the  project
area committee, other public agencies, and the general public.
   The replacement housing plan shall include (1) the general
location of housing to be  rehabilitated, developed,
  rehabilitated  or constructed pursuant to Section
33413, (2)  a description of the occupancy and affordability
restrictions to be imposed on the replacement dwelling units, (3)
substantial evidence supporting a finding that the replacement
dwelling units will meet the needs of households in the income
categories of the households displaced from the dwelling units that
the replacement units are intended to replace, (4) a declaration of
whether the agency intends to rehabilitate existing dwelling units
pursuant to paragraph (5) of subdivision (a) of Section 33413, (5)
 an adequate means of financing such rehabilitation  ,
development,  or construction,  (3)  
(6)  a finding that the replacement housing does not require the
approval of the voters pursuant to Article XXXIV of the California
Constitution, or that such approval has been obtained,  (4)
  (7)  the number of dwelling units housing persons
and families of low or moderate income planned for construction or
rehabilitation, and  (5)   (8)  the
timetable for meeting the plan's relocation, rehabilitation, and
replacement housing objectives. A dwelling unit whose replacement is
required by Section 33413 but for which no replacement housing plan
has been prepared, shall not be destroyed or removed from the low-
and moderate-income housing market until the agency has by resolution
adopted a replacement housing plan.
   Nothing in this section shall prevent an agency from destroying or
removing from the low- and moderate-income housing market a dwelling
unit which the agency owns and which is an immediate danger to
health and safety. The agency shall, as soon as practicable, adopt by
resolution a replacement housing plan with respect to such dwelling
unit.
   SEC. 16.    Section 33418 of the   Health
and Safety Code   is amended to read: 
   33418.  (a) An agency shall monitor, on an ongoing basis, any
housing affordable to persons and families of low or moderate income
developed or otherwise made available pursuant to any provisions of
this part. As part of this monitoring, an agency shall require owners
or managers of the housing to submit an annual report to the agency.
The annual reports shall include for each rental unit the rental
rate and the income and family size of the occupants, and for each
owner-occupied unit whether there was a change in ownership from the
prior year and, if so, the income and family size of the new owners.
The income information required by this section shall be supplied by
the tenant in a certified statement on a form provided by the agency.

   (b) The data specified in subdivision (a) shall be obtained by the
agency from owners and managers of the housing specified therein and
current data shall be included in any reports required by law to be
submitted to the Department of Housing and Community Development or
the Controller. The information on income and family size that is
required to be reported by the owner or manager shall be supplied by
the tenant and shall be the only information on income or family size
that the owner or manager shall be required to submit on his or her
annual report to the agency.
   (c) (1) The agency shall compile and maintain a database of
existing, new and substantially rehabilitated, housing units
developed or otherwise assisted with moneys from the Low and Moderate
Income Housing Fund, or otherwise counted towards the requirements
of subdivision (a) or (b) of Section 33413. The database shall be
made available to the public on the Internet and updated on an annual
basis and shall include the date the database was last updated. The
database shall require all of the following information for each
owner-occupied unit or rental unit, or for each group of units, if
more than one unit is subject to the same covenant:
   (A) The street address and assessor's parcel number of the
property.
   (B) The size of each unit, measured by the number of bedrooms.
   (C) The year in which the construction or substantial
rehabilitation of the unit was completed.
   (D) The date of recordation and document number of the
affordability covenants or restrictions required under subdivision
(f) of Section 33334.3.
   (E) The date on which the covenants or restrictions expire.
   (F) For owner-occupied units that have changed ownership during
the reporting year, as described in subdivision (a), the date and
document number of the new affordability covenants or other documents
recorded to  assure   ensure  that the
affordability restriction is enforceable and continues to run with
the land.
   (G) Whether occupancy in the unit or units is restricted to any
special population, including senior citizens. 
   (H) The affordability level of each unit.  
   (I) Whether the unit is a rental or ownership unit.  
   (J) Whether the unit is being counted towards a replacement
obligation pursuant to subdivision (a) of Section 33413 or towards a
production obligation pursuant to subdivision (b) of Section 33413.
 
   (K) The project type, including, but not limited to, new
construction, substantial rehabilitation, preservation, or the
purchase of long-term affordability covenants. 
   (2) Notwithstanding subparagraphs (A) and (D) of paragraph (1),
the database shall omit any property used to confidentially house
victims of domestic violence.
   (3) Upon establishment of a database under this section, the
agency shall provide reasonable notice to the community regarding the
existence of the database.
   (d) The agency shall adequately fund its monitoring activities as
needed to insure compliance of applicable laws and agreements in
relation to affordable units. For purposes of defraying the cost of
complying with the requirements of this section and the changes in
reporting requirements of Section 33080.4 enacted by the act enacting
this section, an agency may establish and impose fees upon owners of
properties monitored pursuant to this section. 
   (e) The agency shall continue to monitor and enforce the covenants
covered by this section for the entire period of the covenant. In
the event the agency ceases its activities prior to the entire period
of the covenants, then its designated successor agency shall monitor
and enforce the covenants for the remaining period of the covenant.
If a successor agency is not designated at the time the agency ceases
its activities, then the community shall monitor and enforce the
covenants for the remaining period of the covenant. 
   SEC. 17.    Article 13 (commencing with Section
33460) is added to Chapter 4 of Part 1 of Division 24 of the 
 Health and Safety Code   , to read:  

      Article 13.  Accountability Audits


   33460.  (a) The Legislature hereby finds and declares both of the
following:
   (1) Past department audits of redevelopment agencies have
uncovered errors, omissions, and violations that have resulted in
significant repayments to agencies' Low and Moderate Income Housing
Fund, thereby providing additional resources for increasing,
improving, and preserving the supply of low- and moderate-income
housing available at affordable housing cost.
   (2) Providing funding for future department audits of
redevelopment agencies will ensure that tax increment, interest, and
debt proceeds are appropriately deposited into the Low and Moderate
Income Housing Fund and that agencies make only legal expenditures
from the fund, thereby providing additional resources for increasing,
improving, and preserving the supply of low- and moderate-income
housing available at affordable housing cost. As a result, the
deposits required by this section are permissible pursuant to
paragraph (7) of subdivision (a) of Section 25.5 of Article XIII of
the California Constitution.
   (b) Immediately upon receipt, each agency shall annually deposit
one-half of one-tenth (.0005) percent of any tax increment deposited
into the Low and Moderate Income Housing Fund into the Redevelopment
Agency Accountability Fund created pursuant to Section 50464.5 to be
used solely for the purpose described in subdivision (b) of that
section. 
   SEC. 18.    Section 33487 of the   Health
and Safety Code   is amended to read: 
   33487.  (a) Subject to subdivisions (a) and (b) of Section 33486,
not less than 20 percent of all taxes that are allocated to the
redevelopment agency pursuant to Section 33670 for redevelopment
projects merged pursuant to this article, irrespective of the date of
adoption of the final redevelopment plans, shall be deposited by the
agency in the Low and Moderate Income Housing Fund established
pursuant to Section 33334.3, or which shall be established for
purposes of this section. The agency shall use the moneys in this
fund to assist in the construction or rehabilitation of housing units
that will be available to, or occupied by, persons and families of
low or moderate income, as defined in Section 50093, and very low
income households, as defined in Section 50105,  at an affordable
housing cost  for the longest feasible time period but not less
than 55 years for rental units and 45 years for owner-occupied
units. For the purposes of this subdivision, "construction and
rehabilitation" shall include acquisition of land, improvements to
land; the acquisition, rehabilitation, or construction of structures;
or the provision of subsidies necessary to provide housing for
persons and families of low or moderate income, as defined in Section
50093, and very low income households, as defined in Section 50105.
   (b) The agency may use the funds set aside by subdivision (a)
inside or outside the project area. However, the agency may only use
these funds outside the project area upon a resolution of the agency
and the legislative body that the use will be of benefit to the
project. This determination by the agency and the legislative 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 of benefit to a
project.
   The Legislature finds and declares that expenditures or
obligations incurred by the agency pursuant to this section shall
constitute an indebtedness of the project. 
   (c) If moneys deposited in the Low and Moderate Income Housing
Fund pursuant to this section have not been committed for the
purposes specified in subdivisions (a) and (b) for a period of six
years following deposit in that fund, the agency shall offer these
moneys to the housing authority that operates within the jurisdiction
of the agency, if activated pursuant to Section 34240, for the
purpose of constructing or rehabilitating housing as provided in
subdivisions (a) and (b). However, if no housing authority operates
within the jurisdiction of the agency, the agency may retain these
moneys for use pursuant to this section.  
    (d) 
    (c)  If the agency deposits less than 20 percent of
taxes allocated pursuant to Section 33670, due to the provisions of
subdivisions (a) and (b) of Section 33486, in any fiscal year, a
deficit shall be created in the Low and Moderate Income Housing Fund
in an amount equal to the difference between 20 percent of the taxes
allocated pursuant to Section 33670 and the amount deposited in that
year. The deficit, if any, created pursuant to this section
constitutes an indebtedness of the project. The agency shall
eliminate the deficit by expending taxes allocated in years
subsequent to creation of the deficit and, until the time when that
deficit has been eliminated, an agency shall not incur new
obligations for purposes other than those set forth in Section 33487,
except to comply with the terms of any resolution or other agreement
pledging taxes allocated pursuant to Section 33670 that existed on
the date of merger pursuant to this article. 
    (e) 
    (d) Notwithstanding subdivision (d) of Section 33413,
any agency that merges its redevelopment project areas pursuant to
this article shall be subject to subdivisions (a) and (c) of Section
33413.
   SEC. 19.    Section 33490 of the   Health
and Safety Code   is amended to read: 
   33490.  (a) (1) (A) On or before December 31, 1994, and each five
years thereafter, each agency that has adopted a redevelopment plan
prior to December 31, 1993, shall adopt, after a public hearing, an
implementation plan that shall contain the specific goals and
objectives of the agency for the project area, the specific programs,
including potential projects, and estimated expenditures proposed to
be made during the next five years, and an explanation of how the
goals and objectives, programs, and expenditures will eliminate
blight within the project area and implement the requirements of
Section 33333.10, if applicable, and Sections 33334.2, 33334.4,
33334.6,  33413,  and  33413   33487
 . After adoption of the first implementation plan, the parts of
the implementation plan that address Section 33333.10, if
applicable, and Sections 33334.2, 33334.4, 33334.6,  33413, 
and  33413   33487  shall be adopted every
five years  either  in conjunction with the
 housing element cycle or the  implementation plan
cycle and shall be made available to the public on the Internet. The
agency may amend the implementation plan after conducting a public
hearing on the proposed amendment. If an action attacking the
adoption, approval, or validity of a redevelopment plan adopted prior
to January 1, 1994, has been brought pursuant to Chapter 5
(commencing with Section 33500), the first implementation plan
required pursuant to this section shall be adopted within six months
after a final judgment or order has been entered. Subsequent
implementation plans required pursuant to this section shall be
adopted pursuant to the terms of this section, and as if the first
implementation plan had been adopted on or before December 31, 1994.
   (B) Adoption of an implementation plan shall not constitute an
approval of any specific program, project, or expenditure and shall
not change the need to obtain any required approval of a specific
program, project, or expenditure from the agency or community. The
adoption of an implementation plan shall not constitute a project
within the meaning of Section 21000 of the Public Resources Code.
However, the inclusion of a specific program, potential project, or
expenditure in an implementation plan prepared pursuant to
subdivision (c) of Section 33352 in conjunction with a redevelopment
plan adoption shall not eliminate analysis of those programs,
potential projects, and expenditures in the environmental impact
report prepared pursuant to subdivision (k) of Section 33352 to the
extent that it would be otherwise required. In addition, the
inclusion of programs, potential projects, and expenditures in an
implementation plan shall not eliminate review pursuant to the
California Environmental Quality Act (Division 13 (commencing with
Section 21000) of the Public Resources Code), at the time of the
approval of the program, project, or expenditure, to the extent that
it would be otherwise required.
   (2) (A) A portion of the implementation plan shall address the
agency housing responsibilities and shall contain a section
addressing Section 33333.10, if applicable, and Sections 33334.2,
33334.4,  33334.6,  and  33334.6  
33487  , the Low and Moderate Income Housing Fund, and, if
subdivision (b) of Section 33413 applies, a section addressing agency
developed and project area housing. The section addressing the Low
and Moderate Income Housing Fund shall contain:
   (i) The amount available in the Low and Moderate Income Housing
Fund and the estimated amounts which will be deposited in the Low and
Moderate Income Housing Fund during each of the next five years.
   (ii) A housing program with estimates of the number of new,
rehabilitated, or price restricted units to be assisted during each
of the five years and estimates of the expenditures of moneys from
the Low and Moderate Income Housing Fund during each of
                                the five years.
   (iii) A description of how the housing program will implement the
requirement for expenditures of moneys in the Low and Moderate Income
Housing Fund over a 10-year period  or 5-year period, as
applicable,  for various groups as required by Section 33334.4.
For project areas to which subdivision (b) of Section 33413 applies,
the 10-year period within which  subdivision (b) of  Section
 33334.4   33413  is required to be
implemented shall  be   coincide with  the
 same  10-year period  or with two 5-year
periods, as applicable,  within which  subdivision (b)
of  Section  33413   33334.4  is
required to be implemented. Notwithstanding the first sentence of
Section 33334.4 and the first sentence of this clause, in order to
allow these two 10-year time periods to coincide for the first time
period, the time to implement the requirements of Section 33334.4
shall be extended two years, and project areas in existence on
December 31, 1993, shall implement the requirements of Section
33334.4 on or before December 31, 2014,  and each 10 years
thereafter  rather than December 31, 2012. For project areas
to which subdivision (b) of Section 33413 does not apply, the
requirements of Section 33334.4 shall be implemented on or before
December 31, 2014  , and each 10 years thereafter  .

   (iv) This requirement to include a description of how the housing
program will implement Section 33334.4 in the implementation plan
shall apply to implementation plans adopted pursuant to subdivision
(a) on or after December 31, 2002.
   (B) For each project area to which subdivision (b) of Section
33413 applies, the section addressing the agency developed and
project area housing shall contain:
   (i) Estimates of the number of new, substantially rehabilitated or
price restricted residential units to be developed or purchased
within one or more project areas, both over the life of the plan and
during the next 10 years.
   (ii) Estimates of the number of units of very low, low-, and
moderate-income households required to be developed within one or
more project areas in order to meet the requirements of paragraph (2)
of subdivision (b) of Section 33413, both over the life of the plan
and during the next 10 years.
   (iii) The  statement of the  number of units of very low,
low-, and moderate-income households which have been developed 
over the life of the plan  within one or more project areas
which meet the requirements of  paragraph (2) of 
subdivision (b) of Section 33413.
   (iv) Estimates of the number of agency developed residential units
which will be developed during the next five years, if any, which
will be governed by paragraph (1) of subdivision (b) of Section
33413.
   (v) Estimates of the number of agency developed units for very
low, low-, and moderate-income households which will be developed by
the agency during the next five years to meet the requirements of
paragraph (1) of subdivision (b) of Section 33413.
   (C) The section addressing Section 33333.10, if applicable, and
Section 33334.4 shall contain all of the following:
   (i) The  number of housing units needed for very low
income persons, low-income persons, and moderate-income persons as
each of those needs have been identified in the most recent
determination pursuant to Section 65584 of the Government Code, and
the proposed amount of expenditures from the Low and Moderate Income
Housing Fund for each   proposed amount of expenditures
from the Low and Moderate Income Housing Fund for the new
construction, acquisition and substantial rehabilitation, or pres
  ervation of housing for persons of extremely low, very
low, or low  income  group  during each year of
the implementation plan period.
   (ii) The total population of the community and the population
under 65 years of age as reported in the most recent census of the
United States Census Bureau.
   (iii) A housing program that provides a detailed schedule of
actions the agency is undertaking or intends to undertake to ensure
expenditure of the Low and Moderate Income Housing Fund in the
proportions required by Section 33333.10, if applicable, and Section
33334.4.
   (iv) For the previous implementation plan period, the 
amounts of Low and Moderate Income Housing Fund moneys utilized to
assist units affordable to, and occupied by, extremely low income
households, very low income households, and low-income households;
the  number, the location, and level of affordability of
units newly constructed  with other locally controlled
government assistance and  without agency assistance and
that are required to be affordable to, and occupied by, persons of
low, very low, or extremely low income for at least 55 years for
rental housing or 45 years for  homeownership  
home ownership  housing, and the amount of Low and Moderate
Income Housing Fund moneys utilized to assist housing units available
to families with children, and the number, location, and level of
affordability of those units. 
   (v) A demonstration, based on substantial evidence in the plan,
that as of the end of the immediately preceding 5-year implementation
planning period, the agency's aggregate expenditures from the Low
and Moderate Income Housing Fund, exclusive of debt service payments,
between the end of the last 10-year implementation period referenced
in paragraph (1) of subdivision (a) of Section 33334.4 and the end
of the immediately preceding 5-year implementation planning period
satisfy the proportionality requirements set forth in paragraph (2)
of subdivision (a) of Section 33334.4. 
   (3) If the implementation plan contains a project that will result
in the destruction or removal of dwelling units that will have to be
replaced pursuant to subdivision (a) of Section 33413, the
implementation plan shall identify proposed locations suitable for
those replacement dwelling units.  If the implementation plan
contains a project that has resulted in the destruction or removal of
dwelling units that must be replaced pursuant to subdivision (a) of
Section 33413, the implementation plan shall identify either of the
following:  
   (A) The replacement dwelling units that satisfy each replacement
housing obligation.  
   (B) In the case where dwelling units have been destroyed or
removed, but replacement units are not yet complete, the proposed
location of the replacement dwelling units.  
   (4) The implementation plan shall include a complete accounting
for compliance with the agency's affordable housing obligations over
the life of the plan, including the total number of units the agency
is obligated to replace pursuant to subdivision (a) of Section 33413,
the number of units the agency is obligated to produce pursuant to
subdivision (b) of Section 33413, and the number of dwelling units
that satisfy these obligations.  
   (A) For each owner-occupied unit or rental unit counted towards
meeting the agency obligations under subdivision (a) or (b) of
Section 33413 and required to be included in the database required
pursuant to subdivision (c) of Section 33418, or for each group of
such units, if more than one unit is subject to the same covenant,
the implementation plan shall identify all of the following: 

   (i) The street address and assessor's parcel number of the
property and, for properties where units are listed as a group, the
number of units.  
   (ii) The size of each unit, measured by the number of bedrooms.
 
   (iii) The affordability level of each unit, according to the
categories required by Section 33413.  
   (iv) The year in which the construction or substantial
rehabilitation of the unit was completed.  
   (v) The date of recordation and document number of the
affordability covenants or restrictions required under subdivision
(f) of Section 33334.3 or subdivision (c) of Section 33413. 

   (vi) The date on which the covenants or restrictions expire. 

   (vii) For the projects developed prior to January 1, 2002, a
statement of the effective period of the land use controls
established in the plan at the time each unit was developed, in order
to demonstrate that the duration of the covenants or restrictions
extends for a period not less than the applicable period of land use
controls, in accordance with then applicable law.  
   (viii) For owner-occupied units that have changed ownership during
the previous implementation plan period, the date and document
number of the new affordability covenants or other documents recorded
to ensure that the affordability restriction is enforceable and
continues to run with the land.  
   (ix) Whether the unit counts towards a replacement obligation
pursuant to subdivision (a) of Section 33413 or towards a production
obligation pursuant to subdivision (b) of Section 33413. Units
counted towards a replacement obligation shall reference the
destroyed units they are replacing.  
   (B) For each owner-occupied unit or rental unit counted towards
meeting the agency obligations under subdivision (a) or (b) of
Section 33413 and not required to be included in the database
required pursuant to subdivision (c) of Section 33418, or for each
group of such units, if more than one unit is subject to the same
covenant, the implementation plan shall identify all of the
following:  
   (i) The street address and, if available, assessor's parcel number
of the property.  
   (ii) For properties where units are listed as a group, the number
of units.  
   (iii) The affordability level of each unit, according to the
categories required by Section 33413.  
   (iv) The year in which the construction or substantial
rehabilitation of the unit was completed.  
   (v) The date of recordation and document number of the
affordability covenants or restrictions required under subdivision
(f) of Section 33334.3 or subdivision (c) of Section 33413. 

   (vi) The date on which the covenants or restrictions expired.
 
   (vii) Whether the unit counts towards a replacement obligation
pursuant to subdivision (a) of Section 33413 or towards a production
obligation pursuant to subdivision (b) of Section 33413. Units
counted towards a replacement obligation shall reference the
destroyed units they are replacing.  
   (5) Notwithstanding subparagraphs (A) and (E) of paragraph (4),
the implementation plan shall omit any property used to
confidentially house victims of domestic violence.  
    (4) 
    (6)  For a project area that is within six years of the
time limit on the effectiveness of the redevelopment plan established
pursuant to Section 33333.2, 33333.6, 33333.7, or 33333.10, the
portion of the implementation plan addressing the housing
responsibilities shall specifically address the ability of the agency
to comply, prior to the time limit on the effectiveness of the
redevelopment plan, with subdivision (a) of Section 33333.8,
subdivision (a) of Section 33413 with respect to replacement dwelling
units, subdivision (b) of Section 33413 with respect to project area
housing, and the disposition of the remaining moneys in the Low and
Moderate Income Housing Fund. 
    (5) 
    (7)  The implementation plan shall identify the fiscal
year that the agency expects each of the following time limits to
expire:
   (A) The time limit for the commencement for eminent domain
proceedings to acquire property within the project area.
   (B) The time limit for the establishment of loans, advances, and
indebtedness to finance the redevelopment project.
   (C) The time limit for the effectiveness of the redevelopment
plan.
   (D) The time limit to repay indebtedness with the proceeds of
property taxes.
   (b) For a project area for which a redevelopment plan is adopted
on or after January 1, 1994, the implementation plan prepared
pursuant to subdivision (c) of Section 33352 shall constitute the
initial implementation plan and thereafter the agency after a public
hearing shall adopt an implementation plan every five years
commencing with the fifth year after the plan has been adopted.
Agencies may adopt implementation plans that include more than one
project area.
   (c) Every agency, at least once within the five-year term of the
plan, shall conduct a public hearing and hear testimony of all
interested parties for the purpose of reviewing the redevelopment
plan and the corresponding implementation plan for each redevelopment
project within the jurisdiction and evaluating the progress of the
redevelopment project. The hearing required by this subdivision shall
take place no earlier than two years and no later than three years
after the adoption of the implementation plan. For a project area
that is within three years of the time limit on the effectiveness of
the redevelopment plan established pursuant to Section 33333.2,
33333.6, 33333.7, or 33333.10, the review shall specifically address
those items in paragraph (4) of subdivision (a). An agency may hold
one hearing for two or more project areas if those project areas are
included within the same implementation plan.
   (d) Notice of public hearings conducted pursuant to this section
shall be published pursuant to Section 6063 of the Government Code,
mailed at least three weeks in advance to all persons and agencies
that have requested notice, and posted in at least four permanent
places within the project area for a period of three weeks  and
concurrently posted on the Internet  . Publication, mailing, and
posting shall be completed not less than 10 days prior to the date
set for hearing.
   SEC. 20.    Section 33506 is added to the  
Health and Safety Code   , to read:  
   33506.  (a) A failure to meet any of the following obligations
shall be an ongoing violation until the agency has fully met the
obligation:
   (1) The obligation to eliminate project deficits pursuant to
Sections 33334.6, 33487, 33492.16, and other similar and related
provisions of law.
   (2) The obligation to expend or encumber excess surplus funds
pursuant to Section 33334.12 and other similar and related provisions
of law.
   (3) The obligation to provide relocation assistance pursuant to
Article 9 (commencing with Section 33410), Section 7260 of the
Government Code, or other applicable relocation laws.
   (4) The obligation to provide replacement housing pursuant to
subdivision (a) of Section 33413, Article 9 (commencing with Section
33410), and other similar and related provisions of law.
   (5) The obligation to provide housing pursuant to subdivision (b)
of Section 33413 and other similar and related provisions of law.
   (6) The obligation to monitor and enforce affordability covenants
required pursuant to Section 33418.
   (7) The obligation to continue the project past the effectiveness
date of the redevelopment plan pursuant to Section 33333.8.
   (8) The obligation to expend funds proportionately to assist
housing for persons of extremely low, very low, or low income or to
assist housing available to all persons regardless of age pursuant to
Section 33334.4.
   (9) The obligations to record covenants that run with the land
pursuant to subdivision (f) of Section 33334.3 and subdivision (c) of
Section 33413(c).
   (b) This section is declaratory of existing law. 
   SEC. 21.    Section 50464.5 is added to the 
 Health and Safety Code   , to read:  
   50464.5.  (a) The Redevelopment Agency Accountability Fund is
hereby created in the State Treasury and is available, upon
appropriation, to the department for the purposes of subdivision (b).
Notwithstanding Section 16305.7 of the Government Code, any moneys
received by the department pursuant to Section 33460, and any other
sources, repayments, interest, or new appropriations, shall be
deposited in the fund. Moneys in the fund shall not be subject to
transfer to any other fund pursuant to any provision of Part 2
(commencing with Section 16300) of Division 4 of Title 2 of the
Government Code, except the Surplus Money Investment Fund. The
department may require the transfer of moneys in the fund to the
Surplus Money Investment Fund for investment pursuant to Article 4
(commencing with Section 16470) of Chapter 3 of Part 2 of Division 4
of Title 2 of the Government Code. Notwithstanding Section 16305.7 of
the Government Code, all interest, dividends, and pecuniary gains
from the investments shall accrue to the fund.
   (b) With funds made available pursuant to subdivision (a), the
department shall conduct audits of redevelopment agencies to ensure
compliance with the housing provisions of the Community Redevelopment
Law. The department shall include in the audits a review of agency
compliance with production and replacement housing obligations,
recording and monitoring of affordability covenants, provision of
relocation assistance, propriety of deposits to and expenditures from
the Low and Moderate Income Housing Fund, compliance with the debt
limit of the agency, adoption of a legally sufficient implementation
plan, each of the major audit violations pursuant to subdivision (j)
of Section 33080.8, and any other accounting practice or provision of
the Community Redevelopment Law in the discretion of the department.
The department shall require that each agency take action to correct
the audit violations. If the department determines that an agency
has not corrected the audit violations within 180 days of a final
audit report, it shall forward all relevant documents to the Attorney
General for action pursuant to Section 33080.9. The department shall
make available on its Internet Web site the final audit reports, a
statement of any resolution of audit reports, or if not resolved, the
date audit reports were forwarded to the Attorney General. 
   SEC. 22.    This act shall become operative on
January 1, 2018.  
  SECTION 1.    The Legislature finds and declares
all of the following:
   (a) The California Department of Transportation has fulfilled the
obligations set forth in Section 21400 of the Vehicle Code through
the creation, staffing, and operation of the California Traffic
Control Devices Committee (CTCDC). The CTCDC meets regularly to make
recommendations to the director for the completion of the Manual on
Uniform Traffic Control Devices (MUTCD).
   (b) The committee membership, which has not changed since the
department created it in 1968, currently represents the interests of
the department, law enforcement, local government, and motorized
users.
   (c) In 2008, the department adopted Deputy Directive Number
DD-64R-1, which directs the department to include all users of the
road in all activities the department engages in.
   (d) In 2008, the California Complete Streets Act of 2008 (Chapter
657 of the Statutes of 2008) was signed into law, mandating that all
general plans' circulation elements consider the needs of all users
of the road.
   (e) The department has established and regularly pulls together a
committee of interest groups, department heads and staff, other state
departments, and the public to discuss implementation of the
California Complete Streets Act of 2008. The committee is called the
Active Transportation and Livable Communities Committee.
   (f) The Active Transportation and Livable Communities Committee is
widely accepted as the most comprehensive complete streets venue in
the state and should make the recommendation to the department for
the placement of two members from the nonmotorized interests to the
CTCDC.  
  SEC. 2.    Section 21400 of the Vehicle Code is
amended to read:
   21400.  (a) (1) The Department of Transportation shall, after
consulting with local agencies and groups representing users of
streets, roads, and highways, establishing a committee to advise the
department, and holding public hearings regarding rules and
regulations, adopt rules and regulations prescribing uniform
standards and specifications for all official traffic control devices
placed pursuant to this code, including, but not limited to, stop
signs, yield right-of-way signs, speed restriction signs, railroad
warning approach signs, street name signs, lines and markings on the
roadway, and stock crossing signs placed pursuant to Section 21364.
   (2) The committee shall be composed of the following members:
   (A) One representative selected by the director of the department.

   (B) One representative recommended by the Commissioner of the
Department of the California Highway Patrol.
   (C) Two representatives recommended by the League of California
Cities.
   (D) Two representatives recommended by the California State
Association of Counties.
   (E) Two representatives from motorized users of the highway. One
shall be recommended by the Automobile Club of Southern California
and one shall be recommended by AAA Northern California, Nevada and
Utah.
   (F) Two representatives, approved by the director, from
nonmotorized users of the highway recommended by the Active
Transportation and Livable Communities Committee created within the
department.
   (b) For purposes of this section, "users of the highway" means
bicyclists, children, persons with disabilities, motorists, movers of
commercial goods, pedestrians, users of public transportation, and
seniors.
   (c) The Department of Transportation shall, after notice and
public hearing, determine and publicize the specifications for
uniform types of warning signs, lights, and devices to be placed upon
a highway by any person engaged in performing work which interferes
with or endangers the safe movement of traffic upon that highway.
   (d) Only those signs, lights, and devices as are provided for in
this section shall be placed upon a highway to warn traffic of work
that is being performed on the highway.
   (e) Any control devices or markings installed upon traffic
barriers on or after January 1, 1984, shall conform to the uniform
standards and specifications required by this section.