BILL ANALYSIS Ó
AB 229
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Date of Hearing: May 1, 2013
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
AB 229 (John A. Pérez) - As Amended: April 8, 2013
Policy Committee: Local
GovernmentVote:8-1
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill authorizes infrastructure and revitalization financing
districts (IRFD) that can be created by local governments, and
allows these districts to finance projects and facilities to
clean-up and develop former military bases. Specifically, this
bill:
1)Specifies that a local government may form an IRFD to finance
a project or projects on a former military base as long as the
project is consistent with the authority reuse plan and is
approved by the military base reuse authority.
2)Describes the types of public capital facilities or projects
of communitywide significance an IRFD can finance.
3)Authorizes an IRFD to utilize the powers under the Polanco
Redevelopment Act in order to finance environmental
remediation and brownfield restoration.
4)Requires a two-thirds voter approval of the formation of the
IRFD.
5)Requires that every local agency, who will contribute its
property tax increment revenue to the IFD, approve the plan.
FISCAL EFFECT
Negligible state fiscal impact as IRFDs will only divert
property tax increment revenues from other local governments,
excluding school districts.
AB 229
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COMMENTS
1)Purpose . According to the author, military base closure and
realignment creates significant economic problems for many
California communities. Specifically, the author notes that
closure of military bases can pose significant economic,
environmental and land-use problems such as toxic waste
clean-up, loss of business and reduction in tax revenues. The
author argues base closure can also present opportunities for
business relocation, economic development and land reuse that
cannot be addressed by either the state's governmental taxing
agencies or private investment alone. The author concludes
that unlike cities and counties, military base reuse
authorities do not have the financing tools necessary to
respond to the infrastructure and economic development
requirements of a post-redevelopment world. According to the
author, the purpose of IRFDs is to assist local agencies in
addressing some of these issues related to military base
closure and realignment.
2)Background . The IFRDs are modeled after the existing
infrastructure financing districts (IFDs). Cities and
counties can create IFDs and issue bonds to pay for community
scale public works, including highways, transit, water
systems, sewer projects, flood control, child care facilities,
libraries, parks and solid waste facilities. To repay the
bonds, IFDs divert property tax increment revenues from other
local governments for a period of 30 years. IFDs, however,
are prohibited from diverting property tax increment revenues
from schools.
For several years, local officials were reluctant to form IFDs
because they worried about the constitutionality of using tax
increment revenue from property that was not within the
redevelopment project area. When a 1998 Attorney General
opinion allayed those concerns, the City of Carlsbad formed an
IFD in 1999 to fund the public works for a new hotel located
adjacent to the Legoland theme park. That small project is
the only example of local officials' use of the existing IFD
law.
IFDs have been tailored to meet specific local circumstances.
SB 1085 (Migden), Chapter 213, Statutes of 2005, amended IFD
law to enable the City and County of San Francisco to finance
needed public infrastructure improvements to specified
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waterfront properties. This authority was expanded even
further for San Francisco in AB 1199 (Ammiano), Chapter 664,
Statutes of 2010 and AB 644 (Ammiano), Chapter 314, Statutes
of 2011.
3)Opposition . CalTax argues the Legislature should continue
winding down redevelopment agencies and once this is done, a
more thoughtful approach should be considered that maintains
budget savings associated with the elimination of these
agencies.
4)Relevant legislation . AB 243 (Dickinson) expands the powers
of IFDs and renames them IFRDs. AB 243 is pending in this
committee.
5)Previous legislation . AB 2144 (J. Pérez) of 2012, would have
expanded the powers of an IFD and renamed them IFRDs. This
bill was vetoed by Governor Brown, who said it was premature
and would hinder the winding down of redevelopment agencies.
Analysis Prepared by : Roger Dunstan / APPR. / (916) 319-2081