BILL NUMBER: AB 294 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY APRIL 23, 2013
AMENDED IN ASSEMBLY APRIL 8, 2013
INTRODUCED BY Assembly Member Holden
FEBRUARY 11, 2013
An act to add and repeal Article 5.5 (commencing with Section
63047.55) of Chapter 2 of Division 1 of Title 6.7 of the Government
Code, relating to local government.
LEGISLATIVE COUNSEL'S DIGEST
AB 294, as amended, Holden. Local-State Joint Investment
Partnership Pilot Program.
The Bergeson-Peace Infrastructure and Economic Development Bank
Act establishes the Infrastructure and Economic Development Bank
within the Governor's Office of Business and Economic Development.
The bank is authorized to, among other things, issue bonds, approve
the issuance of certain bonds, invest moneys, and make loans, as
specified.
This bill would, until January 1, 2025
2020 , establish a pilot program whereby certain local
governmental government entities, upon the
approval and oversight of the bank, are authorized to reallocate
their annual payments of property tax revenue
directed to the Educational Revenue Augmentation Fund to instead
finance certain kinds of public works that further state policy, as
specified. This bill would require each local governmental
government entity operating a project under the
pilot program and the bank to submit annual reports, as specified, on
the results of the pilot program.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The Legislature finds and declares that the purpose of
this act is to create a pilot program whereby certain local
governmental government entities, upon the
approval and oversight of the Infrastructure and Economic Development
Bank, are authorized to reallocate their payments of property
tax revenue directed to the Educational Revenue Augmentation
Fund to instead finance certain kinds of public works.
SEC. 2. Article 5.5 (commencing with Section 63047.55) is added to
Chapter 2 of Division 1 of Title 6.7 of the Government Code, to
read:
Article 5.5. Local-State Joint Investment Partnership Pilot
Program
63047.55. There is in state government the Local-State Joint
Investment Partnership Pilot Program.
63047.60. Only a local governmental
government entity, including, but not limited to, an
infrastructure financing district established pursuant to Chapter 2.8
(commencing with Section 53395) of Part 1 of Division 2 of Title 5
or any special district , but excluding a city, county, or
city and county, may file an application for financing a public
works project with, and for approval by, the bank pursuant to the
program.
63047.65. Only the following public works that further state
policy objectives shall be financed under the program:
(a) "City streets," "county highways," and "state highways," as
those terms are used in paragraphs (1), (2), and (15), respectively,
of subdivision (q) of Section 63010.
(b) "Sewage collection and treatment," as that term is used in
paragraph (10) of subdivision (q) of Section 63010.
(c) "Water treatment and distribution," as that term is used in
paragraph (12) of subdivision (q) of Section 63010.
(d) Facilities for the collection and treatment of water for urban
uses.
(e) "Drainage, water supply, and flood control," as that term is
used in paragraph (3) of subdivision (q) of Section 63010.
(f) "Educational facilities," as that term is used in paragraph
(4) of subdivision (q) of Section 63010.
(g) "Parks and recreational facilities," as that term is used in
paragraph (6) of subdivision (q) of Section 63010.
(h) "Solid waste collection and disposal," as that term is used in
paragraph (11) of subdivision (q) of Section 63010.
(i) "Public transit," as that term is used in paragraph (9) of
subdivision (q) of Section 63010.
(j) "Power and communications," as that term is used in paragraph
(8) of subdivision (q) of Section 63010.
(k) (1) Brownfield cleanup that promotes infill housing
development and other related infill development consistent with
regional and local plans.
(2) For purposes of this subdivision, "brownfield" has the same
meaning as in paragraph (2) of subdivision (a) of Section 25395.20 of
the Health and Safety Code.
(l) "Economic development facilities" as that term is used in
subdivision (g) of Section 63010.
(m) Development of affordable housing.
63047.70. (a) An application for financing approval filed with
the bank pursuant to the program shall include all of the following
information in a manner prescribed by the bank:
(1) An economic analysis of the project that includes a
determination that the development to be financed would result in an
amount of revenue to the General Fund with a net present value that
is greater than the net present value of the amount of property tax
increment revenues that would be diverted from the Educational
Augmentation Revenue Fund over a 35 -year
period, taking into consideration all pertinent data .
(2) A description of how the project will further local and
statewide policy objectives.
(3) A description of all local resources available to invest in
the project and an analysis of the reduced scope or feasibility of
the project based on the investment of only those local resources.
(4) A statement of the availability of matching funds from the
applicant local government entity. The application shall not request
funding greater than required to complete the project.
(4)
(5) The annual amount of property taxes otherwise
allocated to the Educational Augmentation Revenue Fund, from the tax
rate areas within the territorial jurisdiction of the applicant, that
the applicant proposes to reallocate to finance the project, and
whether the applicant proposes to issue debt to fund the project.
(5)
(6) A demonstration, to a reasonable probability, that
the project would result in an amount of tax revenue to the state
General Fund with a net present value that is greater than the net
present value of the amount of property tax increment revenues that
would be reallocated from the Educational Revenue Augmentation Fund
over the term of the project, taking into consideration all pertinent
data.
(b) The bank may circulate an application for financing to other
state agencies, including, but not limited to, the Department of
Finance, the Department of Housing and Community Development, and the
Office of Planning and Research.
(c) The bank may establish a process for the public to comment on
an application for financing.
(d) The legislative body of the applicant shall reimburse the bank
for the reasonable cost of the bank's review of its application for
financing.
(e) For purposes of this article, "public works project" means the
entire plan for developing the public works specified in Section
63047.65, within a specified geographical area, as set forth by the
applicant.
63047.75. (a) On and after January 1, 2015, the bank may approve
up to a maximum of 25 15 applications
for financing pursuant to the program or a total of fifty
million dollars ($50,000,000) in allocations for all approved
projects, whichever comes first .
(b) The bank shall not approve an application for financing unless
it determines that approving a public works project proposed in an
application is necessary either to make the project financially
feasible or to significantly enhance the scope and potential benefits
of the project.
(c) In reviewing the economic analysis in an application for
financing, the bank shall consider the increase in state General Fund
tax revenues that would occur because of the proposed economic
activity. The bank shall not approve an application unless the
bank determines that the development to be financed would result in
an amount of revenue to the General Fund with a net present value
that is greater than the net present value of the amount of property
tax increment revenues that would be diverted from the Educational
Augmentation Revenue Fund over a 35 -year
period, taking into consideration all pertinent data.
(d) In making its decision to approve an application for
financing, the bank may give weight to any established state policy
objective or benefit identified by a state agency reviewing the
application.
(e) The bank shall only approve a level of financing
that reallocates tax revenue that would otherwise be allocated to the
Educational Revenue Augmentation Fund from each affected
taxing entity making the application, and the reallocation shall be
made in proportion to the percentage share of property taxes that
each affected taxing entity would otherwise contribute to the
Educational Revenue Augmentation Fund the tax rate
areas within the territorial jurisdiction of the applicant, for which
the bank has received verification from the county auditor that the
level of financing approved by the bank would not prevent the county
auditor from making all distributions to cities, counties, and
special districts from the Educational Revenue Augmentation Fund as
required by law. The local government agency shall only receive its
share of the Educational Augmentation Revenue Fund funds
for projects approved pursuant to the program .
(f) The bank may approve an amount less than the amount requested
by the applicant. The bank shall not approve an application unless it
finds that the local government will be able to provide matching
funds in an amount equal to the approved funding.
63047.80. (a) To approve an application for financing under the
program, the bank shall issue a written statement that establishes,
but is not limited to, the total amount of tax revenue that would
have been directed to the Educational Revenue Augmentation Fund that
is reallocated to finance specific public works projects proposed in
the application, the amount of each affected taxing agency's payment
to the Educational Revenue Augmentation Fund that is being
reallocated, and the duration of those reallocations. The
written statement shall include a statement that the maximum amount
that may be diverted from the Educational Augmentation Revenue Fund
shall not exceed the total amount of the Educational
Augmentation Revenue Fund contributions by each local agency
participating in an infrastructure financing district, or in the case
of a special district, that special district's the Educational
Augmentation Revenue Fund share. The statement shall additionally
specify that the Educational Augmentation Revenue Fund reallocations
pursuant to the program shall only be used for projects of the
applicant that are approved projects pursuant to this program.
The bank shall transmit the statement to the county tax collector or
the official responsible for the allocation of property tax revenues
within the county.
(b) Upon receiving the bank's written statement described in
subdivision (a), the county tax collector or the official responsible
for the allocation of tax revenues within the county shall direct
the tax revenues as prescribed in the bank's statement.
63047.83. Upon approval by the bank, the local government entity
may issue bonds, including, but not limited to, general obligation
bonds, against the Educational Augmentation Revenue Fund funds, the
proceeds of which shall only be used for a project approved pursuant
to this program.
63047.85. (a) On or before December 31, 2016, and annually
thereafter, each applicant that has received financing pursuant to
the program for any fiscal year shall provide a report to the bank
that includes all of the following information for that fiscal year:
(1) The amount of money that the county auditor reallocated from
the Educational Revenue Augmentation Fund for financing under the
program.
(2) The purposes for which that allocated money was used.
(3) The actions taken during the fiscal year to implement the
applicant's project.
(b) On or before March 1, 2017, and annually thereafter, the bank
shall provide a report to the Joint Legislative Budget Committee that
includes all of the following information for the preceding fiscal
year:
(1) The name, location, and general description of each
application for financing approved under the program.
(2) The total amount of money that county auditors reallocated
from the Educational Revenue Augmentation Fund under the program.
(3) An evaluation of the extent to which the implementation of the
approved financing has achieved the purposes and intent of the
program. In preparing this evaluation, the bank may solicit advice
and assistance from other state entities, including, but not limited
to, the departments within the Transportation Agency, the Business,
Consumer Services, and Housing Agency, and the Natural Resources
Agency, the Department of Finance, and the Office of Planning and
Research.
63047.90. This article shall remain in effect only until January
1, 2025 2020 , and as of that date is
repealed, unless a later enacted statute, that is enacted before
January 1, 2025 2020 , deletes or
extends that date. However, the repeal of this article shall not
affect the continuing annual reallocation of property taxes for
financing approved by the bank prior to the repeal of this article.