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Mr. Jeff Kay <br />June 23, 2015 <br />Page 3 <br />county's sales and use tax allocation, as well as its property tax allocation. If funds identified for <br />transmission are in the possession of another taxing entity, the successor agency is required to <br />take diligent efforts to recover such funds. A failure to recover and remit those funds may result <br />in offsets to the other taxing entity's sales and use tax allocation or to its property tax allocation. <br />If funds identified for transmission are in the possession of a private entity, HSC 34179.6 (h) (1) <br />(B) states that any remittance related to unallowable transfers to a private party may also be <br />subject to a 10 percent penalty if not remitted within 60 days. <br />Failure to transmit the identified funds will also prevent the Agency from being able to receive a <br />finding of completion from Finance. Without a finding of completion, the Agency will be unable <br />to take advantage of the provisions detailed in HSC section 34191.4. Specifically, these <br />provisions allow certain loan agreements between the former redevelopment agency (RDA) and <br />the city, county, or city and county that created the RDA to be considered enforceable <br />obligations. These provisions also allow certain bond proceeds to be used for the purposes in <br />which they were sold and allows for the transfer of real property and interests into the <br />Community Redevelopment Property Trust Fund once Finance approves the Agency's long- <br />range property management plan. <br />In addition to the consequences above, willful failure to return assets that were deemed an <br />unallowable transfer or failure to remit the funds identified above could expose certain <br />individuals to criminal penalties under existing law. <br />Pursuant to HSC sections 34167.5 and 34178.8, the California State Controller's Office <br />(Controller) has the authority to claw back assets that were inappropriately transferred to the <br />city, county, or any other public agency. Determinations outlined in this letter do not in any way <br />eliminate the Controller's authority. <br />Please direct inquiries to Evelyn Suess, Supervisor, Dispute Resolution Supervisor, or Danielle <br />Brandon, Analyst at (916) 445-3274. <br />Sincerely, <br />JUSTYN HOWARD <br />Program Budget Manager <br />cc: Mr. David Baum, Finance Director, City of San Leandro <br />Ms. Carol S. Orth, Tax Analysis Division Chief, Alameda County <br />California State Controller's Office <br />