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Legislation to allow local governments in California to keep using redevelopment funds earmarked for affordable housing projects cleared the state Senate today on a majority vote, after a failed attempt to win the votes needed for the measure to take effect immediately.

Senate Bill 654, by Senate President Pro Tem Darrell Steinberg, would allow cities and counties to retain tax dollars contained in the low- and moderate-income housing funds of the soon-to-be shuttered redevelopment agencies. Such funds contain about $1.36 billion that will otherwise be redirected to schools and other local government functions when the redevelopment agencies are dissolved on Wednesday.

The fate of that money is uncertain. Even if the measure is passed by the Assembly and signed by Gov. Jerry Brown, its provisions would not take effect until next year without a two-thirds vote for an urgency clause.

An attempt to win two-thirds passage of the measure failed without GOP support, 24-1, after majority Democrats rejected amendments proposed by Senate GOP leader Bob Huff.

"I appreciate the pro tem's desire to address affordable housing, but we must go further," the Diamond Bar Republican said, raising questions about outstanding bonds and redevelopment projects already under way.

The bill cleared the upper house easily on the second try, with 10 Republicans who had abstained from the first vote voting yes. That margin would have been enough for the now majority-vote bill to pass as an urgency measure.

Amid the procedural maneuvering, Steinberg told colleagues on the floor that he would be willing later to put the language into a new budget bill so that it could be take effect immediately with majority-vote approval. Steinberg's office said that local agencies overseeing the transition could also opt not to decide what to do about the funds until the issue is resolved.

The agencies, axed as part of last year's budget package, are slated to be disbanded Wednesday. Legislation to delay that date until April 15 has failed to gain traction.

Steinberg: Extending redevelopment agencies 'not going to happen'


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