Local reconstruction agencies.

A deadline of January 1, 2029 is added for the Office of Land Use and Climate Innovation to complete its assessment of recovery needs and develop model ordinance language, and for the Office of Emergency Services to prepare guidance on disaster recovery plans.

Both state agencies are explicitly given discretion to periodically update or revise the model ordinance language and guidance after initial delivery.

Eminent domain is removed from the list of methods by which a local reconstruction agency may acquire property within the local reconstruction area. The agency can still accept property that a city or county has already taken by eminent domain.

The power of a local reconstruction agency to issue or sell bonds under Article 4 (commencing with Section 53398.77) of Chapter 2.99 of Part 1 of Division 2 of Title 5 is removed from the list of authorized activities.

The provision allowing a local reconstruction agency to state that incremental property tax revenue from the city or county and all affected taxing entities within the local reconstruction area may be used to finance its activities (if approved by resolution under Section 53398.68) is removed, along with the related provision about accepting taxes levied upon taxable property within the area to be divided under Section 53398.75.

In Section 8877.9, the term 'local recovery agency' is corrected to 'local reconstruction agency' for consistency with the rest of the bill.

Assembly Member Ransom and Senators Grayson and Stern are added as coauthors of the bill.

The bill was reformatted from a printed legislative document style (with page headers, line numbers, and two-column layout) to a plain web-based text format. No policy language was added, removed, or altered.

Section 8877.7 now requires that a city or county must first prepare and adopt a disaster recovery plan under Section 8877.5, and include the authority and proposed organization for a local reconstruction agency in that plan, before it may adopt an ordinance establishing the agency. Previously, a jurisdiction could adopt the ordinance independently without this prerequisite.

Section 8877.5(d) changes the general plan consistency requirement. The old version required a city or county to ensure its general plan is consistent with and references any disaster recovery plan. The new version only requires amendment if the city or county determines that its general plan should be amended, making it conditional rather than mandatory.

Section 8877.7(g) now requires bond issuance to follow the specific procedures in Article 4 (commencing with Section 53398.77) of Chapter 2.99 of Part 1 of Division 2 of Title 5, rather than simply authorizing the power to issue or sell bonds without reference to a specific statutory framework.

Section 8877.7(c) and (h) now require that contracts and debt restructuring be conducted pursuant to the same requirements that apply to the city, county, or city and county that establishes the local reconstruction agency, adding constraints not present in the prior version.

The tax revenue mechanism in Section 8877.7(k) is substantially restructured. The old provision allowed agencies to accept incremental sales and use tax or transactions and use tax revenues through a dedication by the taxing entity, with procedures for calculation and decision-making. The new provision replaces this with (1) a requirement that the ordinance state incremental property tax revenue may be used if approved by resolution under Section 53398.68, and (2) acceptance of taxes levied on property within the reconstruction area divided as described in Section 53398.75.

A new definition of 'Affected taxing entity' is added to Section 8877.4(a), defined as any city, county, or city and county that adopts a resolution agreeing to participate in a local reconstruction agency created pursuant to Section 8877.7.

Section 8877.7(s) adds a requirement that travel expenses be paid pursuant to the same requirements that apply to the establishing city, county, or city and county.

New Section 8877.4 adds definitions for 'disaster,' 'local reconstruction area,' 'recovery,' and 'reconstruction.' The local reconstruction area definition caps adjacent areas at no more than 20 percent of the total area and allows noncontiguous areas.

Section 8877.5 changed from requiring a city or county that 'adopts' a disaster recovery plan to one that 'prepares' a plan, lowering the threshold for triggering the general plan consistency requirement. A new subdivision (d) requires the general plan to be consistent with and reference any adopted disaster recovery plan.

New subdivision (k) in Section 8877.7 authorizes reconstruction agencies to accept incremental ad valorem property tax revenues levied on taxable property within the local reconstruction area each year, similar to Mello-Roos tax increment financing. Revenues above a baseline are allocated to a special fund of the agency until assessed values return to or exceed the pre-disaster level.

New subdivision (n) in Section 8877.7 authorizes reconstruction agencies to make loans or provide funds or financial assistance to residents and businesses, expanding the agency's direct lending capacity beyond what was previously authorized.

New Section 8877.8 establishes board composition rules based on the number of participating taxing entities, requires at least one public member who is a resident or business owner in the reconstruction area, subjects the board to the Brown Act, Public Records Act, and Political Reform Act, and defines 'affected taxing entity.'

Section 8877.7 now requires (rather than merely permits) the ordinance to include procedures for determining the boundaries of a local reconstruction area, making boundary determination a mandatory element of any reconstruction agency ordinance.

New Section 8877.9 requires a mandatory sunset date for the local reconstruction agency, capped at no more than 45 years from the date a bond is issued or a loan is approved.

The contingency plan of action and organization now covers short-term, intermediate, and long-term recovery (previously only short-term and long-term), adding a middle phase to the recovery timeline.

The bill changes from requiring a disaster recovery plan to authorizing one. The language shifts from 'required pursuant to subdivision (a)' to 'authorized pursuant to subdivision (a),' making the plan optional rather than mandatory for cities and counties.

Cooperative arrangements for developing plans may now be made with other local entities, specifically including climate resilience districts and enhanced infrastructure financing districts that operate within the jurisdiction.

Seven specific elements are now listed as items that may be included in the contingency plan: operational structure, roles and responsibilities for leadership and coordination, recovery priorities, mitigation strategies, identification of programs/resources/funding mechanisms, procedures for postdisaster decisionmaking and resource allocation, and strategies to coordinate with state and local government entities, nonprofits, private sector partners, and recovery-related programs.

A new paragraph (4) authorizes the plan to include procedures for integration with state and federal recovery frameworks.

The Office of Emergency Services is now required, in consultation with the Office of Land Use and Climate Innovation, to prepare guidance on disaster recovery plans. This adds a second state agency with a formal guidance role.

The reference to the local reconstruction entity is simplified from 'reconstruction authority with powers parallel to those of a community redevelopment agency, except that the reconstruction authority would be authorized to operate beyond the confines of designated redevelopment areas and would have financing sources other than tax increment sources' to simply 'reconstruction agency, as provided in Section 8877.7,' deferring all details to the new section.

The factors that make guidance adaptable are now determined by either the Office of Land Use and Climate Innovation or the Office of Emergency Services (previously only the former).