BILL ANALYSIS Ó
AB 471
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 471 (Atkins, et al.)
As Amended January 29, 2014
2/3 vote
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|ASSEMBLY: | |(May 9, 2013) |SENATE: |35-0 |(February 6, |
| | | | | |2014) |
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(vote not relevant)
Original Committee Reference: HEALTH
SUMMARY : Allows infrastructure financing districts (IFDs) to
include portions of former redevelopment project areas and
amends several statutes governing the dissolution of
redevelopment agencies (RDAs).
The Senate amendments delete the Assembly version of this bill,
and instead:
1)Make clarifying amendments to the provision of the bill that
authorizes an IFD to finance a project or portion of a project
that is located in, or overlaps with, a redevelopment project
area or former redevelopment project area.
2)Require a successor agency to the former redevelopment agency
to receive a finding of completion, as defined, prior to the
district financing any project or portion of a project in a
former redevelopment project area.
3)Provide that any debt or obligation of an IFD shall be
subordinate to an enforceable obligation of a former
redevelopment agency, and provide that the division of taxes
allocated to the IFD shall not include any taxes required to
be deposited by the county auditor-controller into the
Redevelopment Property Tax Trust fund, as specified.
4)Allow the legislative body of the city forming the IFD to
choose to dedicate any portion of its net available revenue to
the IFD through the financing plan, as specified.
5)Define "net available revenue" to mean periodic distributions
to the city from the Redevelopment Property Tax Trust Fund
that are available to the city after all preexisting legal
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commitments and statutory obligations funded from that revenue
are made, as specified, and prohibit "net available revenue"
from including any funds deposited by the county
auditor-controller in the Redevelopment Property Tax Trust
Fund or funds remaining in the Redevelopment Property Tax
Trust Fund prior to distribution and from including any moneys
payable to a school district that maintains kindergarten and
grades 1 to 12, inclusive, community college districts, or to
the Educational Revenue Augmentation Fund.
6)Define, from July 1, 2014, to July 1, 2018, inclusive,
"housing entity administrative cost allowance" to mean an
amount of up to 1 % of the property tax allocated to the
redevelopment Obligation Retirement Fund on behalf of the
successor agency for each applicable fiscal year, but not less
than $150,000 per fiscal year.
7)Require the housing entity administrative cost allowance to be
listed by the successor agency on the Recognized Obligation
Payment Schedule (ROPS), and provide, upon approval of the
ROPS by the oversight board and the Department of Finance,
that the housing entity administrative cost allowance shall be
remitted by the county auditor-controller on each January 2
and July 1 to the local housing authority that assumed the
housing functions of the former redevelopment agency.
8)Provide, if there are insufficient moneys in the Redevelopment
Obligations Retirement Fund in any given fiscal year to make
the authorized payment, that the unfunded amount may be listed
on each subsequent ROPS until it has been paid in full.
9)Allow a successor agency to utilize reasonable estimates and
projections to support payment amounts for enforceable
obligations if the successor agency submits appropriate
supporting documentation of the basis for the estimate or
projection to the Department of Finance and the
auditor-controller.
10)Allow specified ROPS payments to be scheduled beyond the
existing ROPS cycle upon a showing that a lender requires cash
on hand beyond the ROPS cycle.
11)Allow a successor agency to utilize reasonable estimates and
projections to support payment amounts for enforceable
obligations, when a payment is shown to be due during the ROPS
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period, but an invoice or other billing document has not yet
been received, if the successor agency submits appropriate
supporting documentation of the basis for the estimate or
projection to the Department of Finance and the
auditor-controller.
12)Allow a ROPS to also include appropriation of moneys from
bonds subject to passage during the ROPS cycle when an
enforceable obligation requires the agency to issue the bonds
and use the proceeds to pay for project expenditures.
13)Provide that the term "identified in an approved
redevelopment plan" includes properties listed in a community
plan or a five-year implementation plan.
14)Specify that no reimbursement is required by this act because
this act provides for offsetting savings to local agencies or
school districts that result in no net costs.
15)Contain an urgency clause.
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.
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6)Requires a two-thirds 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
available at an affordable housing cost to persons and
families of low- and moderate-income.
AS PASSED BY THE ASSEMBLY , this bill deleted the current
limitation for the Department of Health Care Services to enter
into up to 15 contracts for implementation of the Program of
All-Inclusive Care for the Elderly), and in so doing, would have
authorized an unlimited number of contracts.
FISCAL EFFECT : According to the Senate Appropriations
Committee, this bill contains unknown General Fund impact,
likely in the range of $750,000 annually for five years. This
figure is based on the assumption that approximately 10
successor housing agencies would be eligible for at least
$150,000 annually in allocations from the Redevelopment Property
Tax Trust Fund through 2018, prior to distribution of residual
revenues to local agencies and school entities. As such, the
bill would reduce the amount of residual property tax revenues
subject to general distribution by at least $1.5 million
annually through 2018, about half of which would accrue to K-14
schools. In general, any property tax proceeds diverted from
schools results in an equivalent General Fund cost, pursuant to
Proposition 98's minimum funding guarantees.
COMMENTS : This bill would delete the prohibition on
infrastructure financing district including any portion of a
redevelopment project area. This bill also makes various changes
to the redevelopment dissolution policies in order to allow
dissolution to occur in a more orderly fashion while still
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allowing needed economic development.
Existing law prohibits an infrastructure financing district
(IFD) from including any portion of a redevelopment project area
for the purposes of collecting tax increment. Given that
redevelopment agencies were dissolved effective February 1,
2012, and are no longer collecting additional tax increment to
create new activities to promote economic development and
infrastructure, the restriction on the overlap with IFDs seems
to be unnecessary.
This bill would delete the prohibition on infrastructure
financing district including any portion of redevelopment
project area. Furthermore, as redevelopment project areas get
wrapped up through the work of successor agencies many projects
still remain in flux. This bill provides clarity to the law on
how projects that were already in the pipeline prior to
dissolution can still be completed.
This bill is similar to AB 662 (Atkins) of 2013 which was vetoed
with the following message:
This measure would provide flexibility to cities and
successor agencies around the state currently winding
down their redevelopment affairs. More importantly,
this bill would authorize cities to create
Infrastructure Financing Districts within the
boundaries of former redevelopment project areas, as
well as provide additional property taxes for
administrative costs to the local housing authorities
currently managing stranded housing assets.
Unfortunately, as currently written, the language to
authorize new or amended contracts for existing
enforceable obligations could result in unintended
costs to the General Fund.
I applaud the author for her efforts to improve the
dissolution process. Therefore, I am directing my
administration to work with the author's office to
make changes to the bill's language in a manner that
avoids those costs. When the changes are made, I look
forward to seeing the measure return to my desk for
signature.
Support arguments: This bill makes a number of changes to the
redevelopment dissolution process in order to ensure a more
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orderly dissolution and deletes an unnecessary prohibition on
IFDs including any portion of a redevelopment project area.
Opposition arguments: None on file.
Analysis Prepared by : Debbie Michel / L. GOV. / (916)
319-3958
FN: 0003038