BILL ANALYSIS �
AB 243
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Date of Hearing: May 1, 2013
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
AB 243 (Dickinson) - As Introduced: February 6, 2013
Policy Committee: Local
GovernmentVote:6-3
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill authorizes creation of infrastructure and refinancing
districts (IFRD). Specifically, this bill:
1)Specifies the types of public capital facilities or projects
of communitywide significance an IRFD can finance.
2)Authorizes an IRFD to utilize the powers under the Polanco
Redevelopment Act in order to finance environmental
remediation and brownfield restoration.
3)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.
4)Removes the voter threshold for the issuance of debt by an
IRFD if the project to be financed is on land of a former
military base that is publicly owned.
5)Reduces the vote threshold for creating an IRFD and issuing
bonds from two-thirds voter approval to 55% voter approval.
FISCAL EFFECT
Negligible state fiscal impact as IRFDs will only divert
property tax increment revenues from other local governments,
excluding school districts.
COMMENTS
AB 243
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1)Purpose. According to the author, the elimination of
redevelopment agencies has removed a major tool used by local
governments to remedy blight, provide affordable housing and
spur local economic development. The author notes this
elimination has increased the efforts of local officials to
search for alternative ways to raise the capital they need to
invest in public works. The author argues IFDs are one way to
do this, but current law governing IFDs makes their formation
difficult, particularly because a two-thirds vote of local
voters is necessary to form the district.
2)Support . Supporters, including the City of Oakland and the
City of West Sacramento, argue this bill will create positive
impacts for local jurisdictions and the state by authorizing a
financing mechanism to help spur investments and fund
critically needed infrastructure and public works projects.
3)Opposition. The Howard Jarvis Taxpayers Association argues
any long term financial obligation, including bond debt, that
will be passed on to other generations over 30 years should be
subject to a two-thirds vote of local residents.
4)Background . 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
AB 243
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law to enable the City and County of San Francisco to finance
needed public infrastructure improvements to specified
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.
5)Relevant legislation . AB 229 (John A. P�rez) creates
infrastructure and revitalization financing districts (IRFD)
that can be created by local governments to finance projects
and facilities to clean-up and develop former military bases.
AB 229 is pending in this committee.
6)Previous legislation . AB 2144 (J. P�rez) of 2012, was similar
to AB 243. 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