An Express Article from the California Land Title Association
Bulletin 11/12-126 - June 29, 2012
An urgency bill to address numerous issues related to the dissolution of redevelopment agencies (RDAs) was signed by the Governor on June 27th. Assembly Bill 1484 (Chapter 26) addresses some of the issues raised by the CLTA with the Department of Finance. The CLTA is currently reviewing the legislation and may ask the Department of Finance for guidance in certain areas.
AB 1484 clarifies several issues associated with the dissolution of RDAs. Successor agencies (SAs) to the RDAs can obtain a "finding of completion" (FOC) from the Department of Finance (DOF) regarding former RDA real property. The FOC acts as a finding that all amounts determined to be due from the former RDA or the SA have been paid. Once a FOC is obtained, the SA can retain non-governmental physical assets in a separate trust until the DOF approves a long-range property management plan. The plan must be submitted to the oversight board (OB) and the DOF no more than six months after the FOC has been issued and must address the use or disposition of all the properties in the trust.
The law also requires a listing of housing assets to be submitted to DOF by August 1, 2012, including those transferred between February 1, 2012 and the submission date. The DOF will then review the list and has 30 days to object to any asset or transfer, with any objections subject to a meet and confer resolution process. Transfers for which there are no objections are not subject to further review. Also, housing assets have been defined to include real and personal property acquired for low and moderate income housing regardless of funding source. A clearer definition of housing assets is something that had been requested by the CLTA.
Under the new law the two-year time limit to challenge actions related to actions of a former RDA is tolled until the DOF issues a FOC to the successor agency. The two-year limit does not apply once the FOC has been issued by DOF. The oversight board is required to direct the successor agency to dispose of all non-governmental purpose assets. Asset disposals must be approved by a resolution of the oversight board and are subject to review by the DOF. If the DOF does not object and no action challenging the transfer is commenced within 60 days of the approval then the action of the oversight board is considered final and can be relied upon by any person. Any action to challenge the action requires the recording of a lis pendens.
The legislation is complex, containing over 70 pages. The CLTA task force continues to evaluate the legislation and determine what further steps need to be taken.