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To: Memo to Successor Agency Clients From: Susan E. Bloch Re: AB 1484— Redevelopment Budget Trailer Bill Date: July 5, 2012 Page: 8 5. Penalties for Failure to Pay Amounts Determined by Due Diligence Review. If the Successor Agency fails to remit the amounts determined to be payable as a result of the Due Diligence Review by the specified deadlines, and is unable to recover funds that were transferred to other public agencies without an enforceable obligation, any public agency to which funds were transferred without an enforceable obligation may be subject to an offset of its sales and use or property tax allocations . 31 In addition, if the Sponsoring Jurisdiction is performing the duties of Successor Agency, the Sponsoring Jurisdiction may be subject to an offset of its sales and use or property tax allocations. Alternatively, DOF may direct the County auditor - controller to deduct unpaid amounts from future allocations of property tax to the Successor Agency . Furthermore, for funds transferred to private parties absent an enforceable obligation, the County auditor - controller and DOF may demand the return of funds, pursue collection actions, and charge a penalty and interest if the funds are not repaid within 60 days . 34 FINDING OF COMPLETION ( "SAFE HARBOR ") Issuance of Finding of Completion. After the Successor Agency pays (i) the housing fund balance as determined by Due Diligence Review, (ii) the non - housing fund balance as determined by Due Diligence Review, and (iii) the balance of any outstanding taxing entity passthrough obligations and residual payments, DOF will issue a Finding of Completion ( "FOC "). 2. Repayment of City Loans. Upon issuance of an FOC, loans made by the Sponsoring Jurisdiction to the former redevelopment agency may be repaid if the Oversight Board finds that the loan was for a legitimate redevelopment purpose . Repayment is subject to the following limitations: (i) interest is recalculated from the origination date at the Local Agency Investment Fund (LAIF) rate, (ii) payments may begin no earlier than the 2013 -14 fiscal year, (iii) 20% of the repayment must be deposited into 31 Section 34179.6(h)(1)(A). 32 Section 34179.6(h)(1(C). 33 Section 34179.6(h)(2). DOF may agree to an installment plan if it determines that payment of enforceable obligations would otherwise be jeopardized. 34 Section 34179.6(h)(1)(B). 35 Section 34179.7. 36 Section 34191.4(6)(1). A PROFESSIONAL LAW CORPORATION OAKLAND LOS ANGELES SACRAMENTO SAN FRANCISCO SANTA ROSA FRESNO