BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 229|
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THIRD READING
Bill No: AB 229
Author: John A. Pérez (D), et al.
Amended: 8/12/13 in Senate
Vote: 21
SENATE GOVERNANCE & FINANCE COMMITTEE : 6-1, 6/5/13
AYES: Wolk, Beall, DeSaulnier, Emmerson, Hernandez, Liu
NOES: Knight
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 71-3, 5/9/13 - See last page for vote
SUBJECT : Local government: infrastructure and revitalization
financing
SOURCE : Author
DIGEST : This bill creates infrastructure and revitalization
financing districts (IRFDs) modeled after infrastructure
financing districts (IFDs) in existing law. Authorizes a
military base reuse authority to form a district, and allows
these districts to finance a broader range of projects and
facilities to clean-up and develop former military bases.
Senate Floor Amendments of 8/12/13 prohibit an IRFD from
financing any portion of a project in an area that overlaps with
a former redevelopment project area, until the successor agency
of the former redevelopment agency receives a finding of
completion. Also, add chaptering out amendments and coauthors.
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ANALYSIS :
Existing law:
1. Authorizes cities and counties to create IFDs and issue
bonds to pay for community scale public works: highways,
transit, water systems, sewer projects, flood control, child
care facilities, libraries, parks, and solid waste
facilities.
2. Allows an IFD to divert property tax increment revenues from
other local governments, excluding school districts, for up
to 30 years, in order to pay back bonds issued by the IFD.
3. Requires that in order to form an IFD a city or county must
develop an infrastructure plan, send copies to every
landowner, consult with other local governments, and hold a
public hearing.
4. Requires that when forming an IFD, local officials must find
that its public facilities are of communitywide significance
and provide significant benefits to an area larger than the
IFD.
5. Requires that every local agency, who will contribute its
property tax increment revenue to the IFD, approve the plan.
6. Requires a 2/3-voter approval of the formation of the IFD
and the issuance of bonds.
7. Requires majority voter approval for setting the IFD's
appropriations limits.
8. Specifies that public agencies that own land in a proposed
IFD may not vote on issues regarding the district.
9. Authorizes IFDs to issue a variety of debt instruments,
including bonds, certificates of participation, leases, and
loans.
10.Requires any IFD that constructs dwelling units to set aside
not less than 20% of those units to increase and improve the
community's supply of low- and moderate-income housing
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available at an affordable housing cost to persons and
families of low- and moderate-income.
This bill:
1. Creates IRFDs, separate and apart from existing law that
establishes IFDs.
2. Defines, for purposes of creating an IRFD a "city" to mean a
"city, county, city and county, or joint powers authority,
where that entity is acting as the military base reuse
authority."
3. Builds upon existing IFD law to grant new powers and
authority for IRFDs, as follows:
A. Allows IRFDs to be created and exist for 40 years
(IFDs are 30 years);
B. Allows an IRFD to utilize any powers under the Polanco
Redevelopment Act (Act), and finance any action necessary
to implement that Act;
C. Authorizes an IRFD to remedy or remove hazardous
substances under the Act.
D. Allows an IRFD to finance any project that implements
a sustainable communities strategy, as specified;
E. Expands the types of facilities that an IRFD can
finance, including capital facilities or projects of
communitywide significance including:
(1) Watershed lands;
(2) Flood management and bypasses;
(3) Habitat restoration;
(4) Brownfields restoration and other environment
mitigation;
(5) Purchase of land and property for development
purposes and related site improvements;
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(6) Acquisition, construction or repair of housing
for rental or purchase, including multipurpose
facilities;
(7) Acquisition, construction, or repair of
commercial or industrial structures for private use;
and,
(8) The repayment of the transfer of funds to a
military base reuse authority pursuant to provisions in
the Military Base Reuse Authority Act, that occurred on
or after the creation of the district.
A. Allows a city to form an IRFD to finance a project or
projects on a former military base, as specified, only if
the project is consistent with the authority reuse plan
and is approved by the military base reuse authority, if
applicable; and,
B. Allows an IRFD to finance any project or portion of a
project that is located in, or overlaps with, any
redevelopment project area or former redevelopment project
area or former military base. Prohibits an IRFD from
financing any portion of a project in an area that
overlaps with a former redevelopment project area until
the successor agency of the former redevelopment agency
receives a finding of completion.
1. Allows an IRFD to be divided into project areas, each of
which may be subject to distinct limitations, and allows the
legislative body to, at any time, add territory to an IRFD or
amend the infrastructure financing plan for the IRFD by
conducting the same procedures for the formation of a
district or approval of bonds, as specified.
2. Allows bond issuances of an IRFD to be sold at a negotiated
sale and prohibits any negotiated sale of bonds to bond
issuances that do not exceed $5 million.
3. States that any debt or obligation of an IRFD shall be
subordinate to an enforceable obligation of a former
redevelopment agency, as specified.
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4. Allows, in the case of dwelling units located on a former
military base that are destroyed or removed in connection
with a base reuse plan, replacement units to be located
anywhere within the territory of the former military base
consistent with the base reuse plan, local general plan, and
infrastructure financing plan, as applicable.
5. States, in the case of an affected taxing entity that is a
special district that provides fire protection services and
where the county board of supervisors is the governing
authority or has appointed itself as the governing board of
the district, that the IRFD plan shall be adopted by a
separate resolution approved by the district's governing
authority or governing board.
6. Requires the legislative body, no later than June 30 of each
year after the adoption of an infrastructure financing plan,
to post an annual report in an easily identifiable and
accessible location on the legislative body's Internet Web
site, and requires the annual report to contain a summary of
the IRFD's expenditures, a description of the progress made
toward the district's adopted goals, and an assessment of the
status regarding completion of the IRFDs projects.
7. Provides for the following definitions:
A. "City" means a city, county, city and county, or joint
powers authority, where the entity is acting as the
military base reuse authority, as specified;
B. "Legislative body" means the city council, board of
supervisors, or joint powers authority that is acting as
the military base reuse authority, as specified;
C. "Project area" means a defined area within a district
in which the activities of the district share a common
purpose of goal and an overall financing plan; and,
D. "Net available revenue" means period distributions to
the city from the Redevelopment Property Tax Trust Fund
(Trust Fund), that are available to the city after all
preexisting legal commitments and statutory obligations
funded from that revenue, as specified. It does not
include any funds deposited by the county
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auditor-controller into the Trust Fund or funds remaining
in the Trust Fund, prior to distribution. Net available
revenues shall not include any moneys payable to a school
district that maintains kindergarten or grades 1 to 12,
inclusive, or a community college district, or the
Educational Revenue Augmentation Fund.
1. States the intent of the Legislature to establish a
long-term permanent program that provides local governments
with tools and resources for specified purposes, including,
but not limited to, public infrastructure, affordable
housing, economic development and job creation, and
environmental protection and remediation, in a manner that
encourages local cooperation and includes appropriate
protections for state and local taxpayers.
2. Double-joints with SB 470 (Wright).
Related Legislation
SB 33 (Wolk) waives the voter-approval requirements to create an
IFD, extends an IFD's life term, requires annual, independent
audits, and authorizes an IFD's use for projects in
disadvantaged communities, hazardous cleanup, environmental
mitigation, and flood protection.
SB 339 (Cannella) authorizes a county, by a 4/5-vote of the
board of supervisors, to sell, or enter into a lease,
concession, or managerial contract involving county property
acquired from the closure of a military base.
SB 628 (Beall) removes the 2/3-vote requirement to form an IFD,
the 2/3-vote requirement to issue bonds, and the majority vote
to set the appropriations limit, if an IFD proposes to implement
a transit priority project, regional transportation plan, or any
other project consistent with a sustainable communities strategy
or alternative planning strategy.
AB 121 (Dickinson) authorizes Sacramento County Board of
Supervisors, by 4/5-vote of the board, to sell, or to enter into
a lease, concession, or managerial contract for property from
the closure of Mather and McClellan Air Force Bases.
AB 243 (Dickinson) creates IRFDs and reduces the 2/3-voter
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thresholds to 55% to form an IRFD and issue bonds.
AB 662 (Atkins) allows IFDs to include portions of former
redevelopment project areas and modifies the statutes governing
redevelopment agencies' dissolution.
AB 690 (Campos) establishes jobs and IFDs in every city and
authorizes the issuance of revenue bonds to finance specified
projects. The bill eliminates existing IFD law's replacement
housing provisions. It also requires a job creation plan that
ensures that for every $1 million invested, 10 prevailing wage
jobs are created.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 8/13/13)
California Special Districts Association
Cities of Alameda, Concord, Coronado, Goleta, Lynwood, Oakland,
Salinas, Tustin, and West Sacramento
City and County of San Francisco
Construction Employers' Association
East Bay Housing Organizations
Fort Ord Reuse Authority
League of California Cities
Mayor of San Francisco, Ed Lee
Non-Profit Housing Association of Northern California
The Arch and United Cerebral Palsy California Collaborative
OPPOSITION : (Verified 8/13/13)
California Alliance to Protect Private Property Rights
California Taxpayers Association
ARGUMENTS IN SUPPORT : According to the author:
Military base closure and realignment creates significant
adverse economic hardships on many California communities.
The Legislature has adopted a number of statutes to assist
local agencies in addressing issues related to the adverse
economic impacts of military base closure and realignment.
Closure of military bases can pose significant economic,
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environmental, and land-use problems such as toxic waste
clean-up, loss of business, and reduction in tax revenues.
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. 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.
ARGUMENTS IN OPPOSITION : California Taxpayers Association
(CalTax) writes:
CalTax is opposed to AB 229, which allows for the creation of
"infrastructure financing and revitalization" districts with
much of the authority of the recently abolished redevelopment
districts, including authority to utilize property
tax-increment financing to fund specified projects.
Restoring our communities from the ailments of poverty and
depression are honorable goals. A job created as a byproduct
of regional development brings a person hope - these are the
end-goals of AB 229. However, the mechanism used to achieve
these goals is misguided and flawed. Tax increment financing
leaves cities, counties, and special districts underfunded to
provide essential government services.
ASSEMBLY FLOOR : 71-3, 5/9/13
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Bigelow, Bloom,
Blumenfield, Bocanegra, Bonilla, Bonta, Bradford, Brown,
Buchanan, Ian Calderon, Campos, Chau, Chávez, Chesbro, Cooley,
Dahle, Daly, Dickinson, Eggman, Fong, Fox, Frazier, Garcia,
Gatto, Gomez, Gordon, Gorell, Gray, Hagman, Hall, Harkey,
Roger Hernández, Jones-Sawyer, Levine, Linder, Lowenthal,
Maienschein, Mansoor, Medina, Melendez, Mitchell, Morrell,
Mullin, Muratsuchi, Nazarian, Nestande, Olsen, Pan, Patterson,
Perea, V. Manuel Pérez, Quirk, Quirk-Silva, Rendon, Salas,
Skinner, Stone, Ting, Torres, Wagner, Weber, Wieckowski, Wilk,
Williams, Yamada, John A. Pérez
NOES: Donnelly, Beth Gaines, Grove
NO VOTE RECORDED: Conway, Holden, Jones, Logue, Waldron,
Vacancy
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AB:k 8/13/13 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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