Community redevelopment: Supplemental Educational Revenue Augmentation Fund.

(1) The Community Redevelopment Law authorizes the establishment of redevelopment agencies in communities to address the effects of blight, as defined, in blighted areas in those communities known as project areas. Section 16 of Article XVI of the California Constitution authorizes a redevelopment agency to receive funding through tax increments attributable to increases in assessed property tax valuation of property in a project area due to the redevelopment. Not less than 20% of tax increments generated from a project area are required to be used by a redevelopment agency to increase and improve the community's supply of low- and moderate-income housing. Redevelopment agencies also are required in specified years to remit to the county auditor an amount of revenue, determined in accordance with specified calculations made by the Director of Finance and based on a specified report of the Controller, for deposit in the Educational Revenue Augmentation Fund in each county for allocation to school entities. For each redevelopment project for which the redevelopment plan provides for the division of taxes, the redevelopment agency is required to file with the county auditor or officer, as specified, a statement of indebtedness. This bill would require redevelopment agencies, the county auditor, and the Controller to submit specified reports or make specified calculations by specified dates regarding the revenue payments deposited by redevelopment agencies in the county Supplemental Educational Revenue Augmentation Fund to be established in each county treasury for allocation to school entities. By adding to the duties of county auditors, this bill would impose a state-mandated local program. (2) Existing property tax law requires the county auditor, for each fiscal year, to allocate property tax revenue to local jurisdictions in accordance with specified formulas and procedures, and generally requires that each jurisdiction be allocated an amount equal to the total of the amount of revenue allocated to that jurisdiction in the prior fiscal year, subject to certain modifications, and that jurisdiction's portion of the annual tax increment, as defined. Existing law also requires a redevelopment agency, during the 2005–06 fiscal year, to remit to the county auditor an amount of revenue, determined in accordance with specified calculations made by the Director of Finance and based on a specified report of the Controller, for deposit in the Educational Revenue Augmentation Fund (ERAF) in each county for allocation to school entities. This bill would require redevelopment agencies to make a remittance in the total amount of $1,700,000,000 to county Supplemental Educational Revenue Augmentation Funds for the 2009–10 fiscal year and $350,000,000 for the 2010–11 fiscal year. The bill would authorize a redevelopment agency, from July 1, 2009, to June 30, 2010, inclusive, to suspend all or part of its required allocation to the Low and Moderate Income Housing Fund from property tax increment revenues that are allocated to the agency with provisions to repay the fund by June 30, 2015. A redevelopment agency would be authorized to defer the payment of a portion of this remittance if that agency finds that it is unable, for either of certain reasons, to pay the full allocation, and if the agency adopts a specified resolution. A legislative body would be authorized to remit, in lieu of making that payment prior to a specified date, a designated amount to the county auditor for deposit in the county Supplemental Educational Revenue Augmentation Fund. If an agency does not remit the full designated amount or fails to arrange for full payment, as specified, then the agency would be prohibited from adding new project areas or expanding existing project areas; from issuing new bonds, notes, interim certificates, debentures, or other obligations, as specified; and from encumbering any funds or expending any moneys derived from any source except as specified. By imposing new duties upon local tax officials in the annual allocation of these revenues, this bill would impose a state-mandated local program. The bill would require the county auditor-controller to distribute funds that are remitted to the county Supplemental Educational Revenue Augmentation Fund by a redevelopment agency only to a K-12 school district or a county office of education that is located partially or entirely within the project area of the redevelopment agency. The bill would also require, for the 2009–10 fiscal year and the 2010–11 fiscal year, the amount apportioned to each district pursuant to a specified provision of existing law and, for purposes of making the computations required by Section 8 of Article XVI of the California Constitution, specified General Fund revenues appropriated for districts, to be reduced by the total amount of Supplemental Educational Revenue Augmentation moneys a district receives, regardless of the actual date the funds are received from each redevelopment agency. By imposing new duties upon local tax officials and school districts with regard to the annual allocation of these revenues, this bill would impose a state-mandated local program. (3) The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to these statutory provisions. (4) The California Constitution authorizes the Governor to declare a fiscal emergency and to call the Legislature into special session for that purpose. The Governor issued a proclamation declaring a fiscal emergency, and calling a special session for this purpose, on July 1, 2009. This bill would state that it addresses the fiscal emergency declared by the Governor by proclamation issued on July 1, 2009, pursuant to the California Constitution.