California Legislature—2013–14 Regular Session

Assembly Bill No. 690

Introduced by Assembly Member Campos

February 21, 2013

An act to amend Sections 53395, 53395.1, 53395.3, 53395.4, 53395.5, 53395.10, 53395.13, 53395.14, 53395.19, 53395.23, and 53395.24 of the Government Code, and to amend Section 33459 of the Health and Safety Code, relating to jobs and infrastructure financing districts.

LEGISLATIVE COUNSEL’S DIGEST

AB 690, as introduced, Campos. Jobs and infrastructure financing districts: voter approval.

Existing law authorizes a legislative body, as defined, to create an infrastructure financing district, adopt an infrastructure financing plan, and issue bonds, for which only the district is liable, to finance specified public facilities, upon approval by 2⁄3 of the voters. Existing law authorizes an infrastructure financing district to fund infrastructure projects through tax increment financing, pursuant to the infrastructure financing plan and agreement of affected taxing entities, as defined.

Existing law, the Polanco Redevelopment Act, authorizes a redevelopment agency to take any action that the agency determines is necessary and consistent with state and federal laws to remedy or remove a release of hazardous substances on, under, or from property within a project area, whether the agency owns that property or not, subject to specified conditions.

This bill would revise and recast the provisions governing infrastructure financing districts and instead provide for the creation of jobs and infrastructure financing districts (JIDs) with 55% voter approval. The bill would authorize a public financing authority to enter into joint powers agreements with affected taxing entities with regard to nontaxing authority or powers only. The bill would authorize a district to implement hazardous cleanup pursuant to the Polanco Redevelopment Act, as specified.

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.  

It is the intent of the Legislature to do all of the
following:

(a) Establish a program that will enable local cities and counties
to form tax exempt financing authorities known as Job and
Infrastructure Districts (JIDs).

(b) To authorize JIDs to prepare comprehensive job creation
plans (JCP), the objective of which shall be to identify the targeted
industries that would be provided assistance in the form of property
tax increment financing to locate or expand within the JID.

SEC. 2.  

Section 53395 of the Government Code is amended
to read:

53395.  

begin delete (a) end delete begin delete   end delete begin delete The Legislature finds and declares that the end delete begin insert The
Legislature finds and declares all of the following: end insert

begin insert (a) end insert begin insert   end insert begin insert The end insert state and federal governments have withdrawn in whole
or in part from their former role in financing major, regional, or
communitywide infrastructure, including highways and
interchanges, sewage treatment and water reclamation works, water
supply and treatment works, flood control and drainage works,
schools, libraries, parks, parking facilities, open space, and seismic
retrofit and rehabilitation of public facilities.

(b) The begin delete Legislature further finds and declares that the end delete methods
available to local agencies to finance public works often place an
undue and unfair burden on buyers of new homes, especially for
public works that benefit the broader community.

(c) The begin delete Legislature further finds and declares that the end delete absence
of practical and equitable methods for financing both regional and
local public works leads to a declining standard of public works,
a reduced quality of life and decreased safety for affected citizens,
increased objection to otherwise desirable development, and
excessive costs for homebuyers.

(d)  begin delete The Legislature further finds and declares that it end delete begin insert It end insert is
equitable and in the public interest to provide alternative procedures
for financing public works and services needed to meet the needs
of new housing and other development projects.

begin insert

(e) Approximately 85 percent of the state’s general fund budget
is generated by income tax and sales tax, which are derived from,
or are directly linked to, employment. Therefore, the state’s
structural budget deficit will not be resolved unless private sector
investment is encouraged.

end insert begin insert

(f) Tax increment financing is recognized as a compelling and
flexible financing tool for inducing private sector investment that
creates jobs and tax revenue for the state and for local
communities.

end insert begin insert

(g) Local prevailing wage job creating projects that use tax
increment financing based on property tax have the potential to
return new income tax and sales tax revenue to the state on an
annual basis that would exceed to the incremental property tax
invested in the projects.

end insert

SEC. 3.  

Section 53395.1 of the Government Code is amended
to read:

53395.1.  

Unless the context otherwise requires, the definitions
contained in this article shall govern the construction of this
chapter.

(a) “Affected taxing entity” means any governmental taxing
agency begin delete which end delete begin insert that end insert levied or had levied on its behalf a property tax
on all or a portion of the property located in the proposed district
in the fiscal year prior to the designation of the district, but not
including any county office of education, school district, or
community college district.

(b) “City” means a city, a county, or a city and county.

(c) “Debt” means any binding obligation to repay a sum of
money, including obligations in the form of bonds, certificates of
participation, long-term leases, loans from government agencies,
or loans from banks, other financial institutions, private businesses,
or individuals.

(d) “Designated official” means the city engineer or other
appropriate official designated pursuant to Section 53395.13.

(e) (1) “District” means begin delete an end delete begin insert a job and end insert infrastructure financing
district.

(2)  begin delete An end delete begin insert A jobs and end insert infrastructure financing district is a “district”
within the meaning of Section 1 of Article XIII A of the California
Constitution.

(f)  begin delete “Infrastructure end delete begin insert “Jobs and infrastructure end insert financing district”
means a legally constituted governmental entity established
pursuant to this chapter for the sole purpose of financing public
facilities.

(g) “Landowner” or “owner of land” means any person shown
as the owner of land on the last equalized assessment roll or
otherwise known to be the owner of the land by the legislative
body. The legislative body has no obligation to obtain other
information as to the ownership of land, and its determination of
ownership shall be final and conclusive for the purposes of this
chapter. A public agency is not a landowner or owner of land for
purposes of this chapter, unless the public agency owns all of the
land to be included within the proposed district.

(h) “Legislative body” means the city council or board of
supervisors.

SEC. 4.  

Section 53395.3 of the Government Code is amended
to read:

53395.3.  

(a) A district may finance (1) the purchase,
construction, expansion, improvement, seismic retrofit, or
rehabilitation of any real or other tangible property with an
estimated useful life of 15 years or longer begin delete which end delete begin insert that end insert satisfies the
requirements of subdivision (b), (2) may finance planning and
design work begin delete which end delete begin insert that end insert is directly related to the purchase,
construction, expansion, or rehabilitation of that property begin insert , end insert and (3)
the costs described in Sections begin delete 53395.5, end delete begin insert 53395.5 end insert and 53396.5. A
district may only finance the purchase of facilities for which
construction has been completed, as determined by the legislative
body. The facilities need not be physically located within the
boundaries of the district. A district begin delete may end delete begin insert shall end insert not finance routine
maintenance, repair work, or the costs of ongoing operation or
providing services of any kind.

(b) The district shall finance only public capital facilities of
communitywide significance, which provide significant benefits
to an area larger than the area of the district, including, but not
limited to, all of the following:

(1) Highways, interchanges, ramps and bridges, arterial streets,
parking facilities, and transit facilities.

(2) Sewage treatment and water reclamation plants and
interceptor pipes.

(3) Facilities for the collection and treatment of water for urban
uses.

(4) Flood control levees and dams, retention basins, and drainage
channels.

(5) Child care facilities.

(6) Libraries.

(7) Parks, recreational facilities, and open space.

(8) Facilities for the transfer and disposal of solid waste,
including transfer stations and vehicles.

begin insert

(c) The district shall be a local agency within the meaning of
subdivision (d) of Section 33459 of the Health and Safety Code
and may finance any actions necessary to implement the Polanco
Redevelopment Act (Article 12.5 (commencing with Section 33459)
of Chapter 4 of Part 1 of Division 24 of the Health and Safety
Code).

end insert begin delete

(c)

end delete

begin insert (d) end insert  Any district begin delete which end delete begin insert that end insert constructs dwelling units shall set
aside not less than 20 percent of those units to increase and improve
the community’s supply of low- and moderate-income housing
available at an affordable housing cost, as defined by Section
50052.5 of the Health and Safety Code, to persons and families of
low- and moderate-income, as defined in Section 50093 of the
Health and Safety Code.

SEC. 5.  

Section 53395.4 of the Government Code is amended
to read:

53395.4.  

begin delete

(a) A district may not include any portion of a
redevelopment project area which is or has been previously created
pursuant to Part 1 (commencing with Section 33000) of Division
24 of the Health and Safety Code, whether the creation is or was
proper or improper. A redevelopment project area may not include
any portion of a district created pursuant to this chapter.

end delete begin delete

(b)

end delete

begin insert (a) end insert  A district may finance only the facilities or services
authorized in this chapter to the extent that the facilities or services
are in addition to those provided in the territory of the district
before the district was created. The additional facilities or services
may not supplant facilities or services already available within that
territory when the district was created but may supplement those
facilities and services as needed to serve new developments.

begin delete

(c)

end delete

begin insert (b) end insert  A district may include areas begin delete which end delete begin insert that end insert are not contiguous.

SEC. 6.  

Section 53395.5 of the Government Code is amended
to read:

53395.5.  

It is the intent of the Legislature that the begin delete area of the
districts created be substantially undeveloped, and the end delete
establishment of a district should not ordinarily lead to the removal
of existing dwelling units. If, however, any dwelling units are
proposed to be removed or destroyed in the course of private
development or public works construction within the area of the
district, the legislative body shall do all of the following:

(a) Within four years of the removal or destruction, cause or
require the construction or rehabilitation, for rental or sale to
persons or families of low or moderate income, of an equal number
of replacement dwelling units at affordable housing cost, as defined
in Section 50052.5 of the Health and Safety Code, within the
territory of the district if the dwelling units removed were inhabited
by persons or families of low or moderate income, as defined in
Section 50093 of the Health and Safety Code.

(b) Within four years of the removal or destruction, cause or
require the construction or rehabilitation, for rental or sale to
persons of low or moderate income, a number of dwelling units
which is at least one unit but not less than 20 percent of the total
dwelling units removed at affordable housing cost, as defined in
Section 50052.5 of the Health and Safety Code, within the territory
of the district if the dwelling units removed or destroyed were not
inhabited by persons of low or moderate income, as defined in
Section 50093 of the Health and Safety Code.

(c) Provide relocation assistance and make all the payments
required by Chapter 16 (commencing with Section 7260) of
Division 7 of Title 1, to persons displaced by any public or private
development occurring within the territory of the district. This
displacement shall be deemed to be the result of public action.

(d) Ensure that removal or destruction of any dwelling units
occupied by persons or families of low or moderate income not
take place unless and until there are suitable housing units, at
comparable cost to the units from which the persons or families
were displaced, available and ready for occupancy by the residents
of the units at the time of their displacement. The housing units
shall be suitable to the needs of these displaced persons or families
and shall be decent, safe, sanitary, and otherwise standard
dwellings.

SEC. 7.  

Section 53395.10 of the Government Code is amended
to read:

53395.10.  

A legislative body of a city may designate one or
more proposed begin insert job and end insert infrastructure financing districts pursuant
to this chapter begin insert in an area of high unemployment end insert . Proceedings for
the establishment of a district shall be instituted by the adoption
of a resolution of intention to establish the proposed district and
shall do all of the following:

(a) State that begin delete an end delete begin insert a job and end insert infrastructure financing district is
proposed to be established under the terms of this chapter and
describe the boundaries of the proposed district, which may be
accomplished by reference to a map on file in the office of the
clerk of the city.

(b) State the type of public facilities begin insert and development end insert proposed
to be financed begin insert or assisted end insert by the begin delete district. The district may only
finance public facilities authorized by end delete begin insert district in accordance with end insert
Section 53395.3.

begin insert

(c) State the need for the district based upon the area
unemployment rate and the goals the district proposes to achieve.

end insert begin delete

(c)

end delete

begin insert (d) end insert  State that incremental property tax revenue from the city
and some or all affected taxing entities within the district may be
used to begin delete finance these public facilities end delete begin insert implement the job creation
plan adopted pursuant to Section 53395.14 end insert .

begin delete

(d)

end delete

begin insert (e) end insert  Fix a time and place for a public hearing on the proposal.

SEC. 8.  

Section 53395.13 of the Government Code is amended
to read:

53395.13.  

After adopting the resolution pursuant to Section
53395.10, the legislative body shall designate and direct the begin delete city
engineer or other end delete appropriate official to prepare begin delete an infrastructure end delete
begin insert a job creation end insert plan begin insert (JCP) end insert pursuant to Section 53395.14.

SEC. 9.  

Section 53395.14 of the Government Code is amended
to read:

53395.14.  

After receipt of a copy of the resolution of intention
to establish a district, the official designated pursuant to Section
53395.13 shall prepare a proposed begin delete infrastructure financing plan end delete
begin insert JCP end insert . The begin delete infrastructure financing plan end delete begin insert JCP end insert shall be consistent
with the general plan of the city within which the district is located
and shall include all of the following:

(a) A map and legal description of the proposed district, which
may include all or a portion of the district designated by the
legislative body in its resolution of intention.

(b) A description of the public facilities required to serve the
development proposed in the area of the district including those
to be provided by the private sector, those to be provided by
governmental entities without assistance under this chapter, those
public improvements and facilities to be financed with assistance
from the proposed district, and those to be provided jointly. The
description shall include the proposed location, timing, and costs
of the public improvements and facilities.

(c) A finding that the public facilities are of communitywide
significance and provide significant benefits to an area larger than
the area of the district.

(d) A financing section, which shall contain all of the following
information:

(1) A specification of the maximum portion of the incremental
tax revenue of the city and of each affected taxing entity proposed
to be committed to the district for each year during which the
district will receive incremental tax revenue. The portion need not
be the same for all affected taxing entities. The portion may change
over time.

(2) A projection of the amount of tax revenues expected to be
received by the district in each year during which the district will
receive tax revenues, including an estimate of the amount of tax
revenues attributable to each affected taxing entity for each year.

(3) A plan for financing the public facilities to be assisted by
the district, including a detailed description of any intention to
incur debt.

(4) A limit on the total number of dollars of taxes begin delete which end delete begin insert that end insert
may be allocated to the district pursuant to the begin delete plan end delete begin insert JCP end insert .

(5) A date on which the district will cease to exist, by which
time all tax allocation to the district will end. The date shall not
be more than 30 years from the date on which the ordinance
forming the district is adopted pursuant to Section 53395.23.

(6) An analysis of the costs to the city of providing facilities
and services to the area of the district while the area is being
developed and after the area is developed. The begin delete plan end delete begin insert JCP end insert shall also
include an analysis of the tax, fee, charge, and other revenues
expected to be received by the city as a result of expected
development in the area of the district.

(7) An analysis of the projected fiscal impact of the district and
the associated development upon each affected taxing entity.

(8) A plan for financing any potential costs that may be incurred
by reimbursing a developer of a project that is both located entirely
within the boundaries of that district and qualifies for the Transit
Priority Project Program, pursuant to Section 65470, including
any permit and affordable housing expenses related to the project.

(e) If any dwelling units occupied by persons or families of low
or moderate income are proposed to be removed or destroyed in
the course of private development or public works construction
within the area of the district, a plan providing for replacement of
those units and relocation of those persons or families consistent
with the requirements of Section 53395.5.

begin insert

(f) A formula that dictates that for every one million dollars
($1,000,000) invested, the JID shall create 10 prevailing wage
jobs.

end insert begin insert

(g) A plan to encourage public-private partnerships with
employers and developers for property acquisitions, building and
tenant improvements, and equipment purchases.

end insert

SEC. 10.  

Section 53395.19 of the Government Code is amended
to read:

53395.19.  

(a) The legislative body shall not enact a resolution
proposing formation of a district and providing for the division of
taxes of any affected taxing entity pursuant to Article 3
(commencing with Section 53396) unless a resolution approving
the plan has been adopted by the governing body of each affected
taxing entity which is proposed to be subject to division of taxes
pursuant to Article 3 (commencing with Section 53396) has been
filed with the legislative body at or prior to the time of the hearing.

(b) Nothing in this section shall be construed to prevent the
legislative body from amending its infrastructure financing plan
and adopting a resolution proposing formation of the infrastructure
financing district without allocation of the tax revenues of any
affected taxing entity which has not approved the infrastructure
financing plan by resolution of the governing body of the affected
taxing entity.

begin insert

(c) A public financing authority may enter into a joint powers
agreement pursuant to Section 6500 with an affected taxing entity
to carry out the purposes of this chapter with regard to nontaxing
authority or powers only.

end insert

SEC. 11.  

Section 53395.23 of the Government Code is amended
to read:

53395.23.  

After the canvass of returns of any election pursuant
to Section 53395.20, the legislative body may, by ordinance, adopt
the begin delete infrastructure financing plan end delete begin insert JCP end insert and create the district with
full force and effect of law, if begin delete two-thirds end delete begin insert 55 percent end insert of the votes
upon the question of creating the district are in favor of creating
the district.

SEC. 12.  

Section 53395.24 of the Government Code is amended
to read:

53395.24.  

After the canvass of returns of any election
conducted pursuant to Section 53395.20, the legislative body shall
take no further action with respect to the proposed infrastructure
financing district for one year from the date of the election if the
question of creating the district fails to receive approval by
begin delete two-thirds end delete begin insert 55 percent end insert of the votes cast upon the question.

SEC. 13.  

Section 33459 of the Health and Safety Code is
amended to read:

33459.  

For purposes of this article, the following terms shall
have the following meanings:

(a)  “Department” means the Department of Toxic Substances
Control.

(b)  “Director” means the Director of Toxic Substances Control.

(c)  “Hazardous substance” means any hazardous substance as
defined in subdivision (h) of Section 25281, and any reference to
hazardous substance in the definitions referenced in this section
shall be deemed to refer to hazardous substance, as defined in this
subdivision.

(d)  “Local agency” means a single local agency that is one of
the following:

(1)  A local agency authorized pursuant to Section 25283 to
implement Chapter 6.7 (commencing with Section 25280) of, and
Chapter 6.75 (commencing with Section 25299.10) of, Division
20.

(2)  A local officer who is authorized pursuant to Section 101087
to supervise a remedial action.

begin insert

(3) A job and infrastructure district.

end insert

(e)  “Qualified independent contractor” means an independent
contractor who is any of the following:

(1)  An engineering geologist who is certified pursuant to
Section 7842 of the Business and Professions Code.

(2)  A geologist who is registered pursuant to Section 7850 of
the Business and Professions Code.

(3)  A civil engineer who is registered pursuant to Section 6762
of the Business and Professions Code.

(f)  “Release” means any release, as defined in Section 25320.

(g)  “Remedy” or “remove” means any action to assess, evaluate,
investigate, monitor, remove, correct, clean up, or abate a release
of a hazardous substance or to develop plans for those actions.
“Remedy” includes any action set forth in Section 25322 and
“remove” includes any action set forth in Section 25323.

(h)  “Responsible party” means any person described in
subdivision (a) of Section 25323.5 of this code or subdivision (a)
of Section 13304 of the Water Code.