Amended in Assembly September 11, 2013

Amended in Assembly April 9, 2013

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, 53395.10, 53395.13, 53395.14, 53395.19, and 53395.20 of, to add Sections 53395.3.6, 53395.3.7, 53395.3.8, 53395.3.9, 53395.3.10, 53395.3.11, and 53395.3.12 to, and to repeal Sections 53395.5, 53395.23, and 53395.24 of, the Government Code, and to amend Section 33459 of the Health and Safety Code, relating to jobs and begin delete infrastructure end delete begin insert education end insert financing districts.

LEGISLATIVE COUNSEL’S DIGEST

AB 690, as amended, Campos. Jobs and begin delete infrastructure end delete begin insert education end insert 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 begin delete infrastructure end delete begin insert education end insert financing districts begin delete (JIDs) end delete begin insert (JEDs) end insert without voter approval, and would make various conforming changes. 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 begin delete Job and
Infrastructure end delete begin insert Jobs and Education Financing end insert Districts begin delete (JIDs). end delete
begin insert (JEDs). end insert

(b) To authorize begin delete JIDs end delete begin insert JEDs end insert to prepare comprehensive job
creation plans begin delete (JCP), end delete begin insert (JCPs), end insert 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 begin delete JID. end delete begin insert JED. end insert

SEC. 2.  

Section 53395 of the Government Code is amended
to read:

53395.  

The Legislature finds and declares all of the following:

begin delete

(a) The 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 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 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) It 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.

end delete begin delete

(e)

end delete

begin insert (a) end insert  Approximately 85 percent of the state’s general fund budget
is generated by income begin delete tax end delete begin insert taxes end insert and sales begin delete tax end delete begin insert and use taxes end insert , 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.

begin delete

(f)

end delete

begin insert (b) end insert  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.

begin delete

(g)

end delete

begin insert (c) end insert  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 the incremental property tax
invested in these projects. Increased tax revenues provide a link
between job creation and a balanced state budget, thus enabling
the state to meet its financial commitments to education and
long-term stable economic development.

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 that 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 begin delete district. end delete begin insert district, except as provided in paragraph (1) of
subdivision (d) of Section 53395.14. end insert

(b) “City” means a city, a county, a city and county, or a joint
powers authority that is acting as the military base reuse authority
established pursuant to Title 7.86 (commencing with Section
67800).

(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 begin delete individuals. end delete begin insert individuals, reimbursement agreements, advances,
or other forms of indebtedness or financial obligation, including,
but not limited to, commercial paper, variable rate demand notes,
all moneys payable in relation to the debt, and all debt service
coverage requirements in any debt instrument. end insert

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

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

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

(f) “Jobs and begin delete infrastructure end delete begin insert education end insert financing district” means
a legally constituted governmental entity established pursuant to
this chapter for the sole purpose of financing public facilities, and
real and tangible commercial property begin delete improvements. end delete
begin insert improvements as defined in subdivision (a) of Section 53395.3. end insert

(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
begin delete supervisors. end delete begin insert supervisors, or joint powers authority that is acting
as the military base reuse authority established pursuant to Title
7.86 (commencing with Section 67800). end insert

SEC. 4.  

Section 53395.3 of the Government Code is amended
to read:

begin delete

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 that satisfies the
requirements of subdivision (b), (2) may finance planning and
design work that is directly related to the purchase, construction,
expansion, or rehabilitation of that property, and (3) the costs
described in Sections 53395.5 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 shall 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.

(9) Remediation of hazardous materials in, on, under, or around
any real or tangible property.

(10) Seismic and life-safety improvements to existing buildings.

(11) Rehabilitation, restoration, and preservation of structures,
buildings, or other facilities having special historical, architectural,
or aesthetic interest or value and that are listed on the National
Register of Historic Places, are eligible for listing on the National
Register of Historic Places individually or because of their location
within an eligible registered historic district, or are listed on a state
or local register of historic landmarks.

(12) Structural repairs and improvements to piers, seawalls, and
wharves.

(13) Removal of bay fill.

(14) Stormwater management facilities, other utility
infrastructure, or public open-space improvements.

(15) Shoreline restoration.

(16) Other repairs and improvements to maritime, transportation,
utility or other infrastructure facilities.

(17) Planning and design work that is directly related to any
public facilities authorized to be financed by a district.

(18) The repayment of the transfer of funds to a military base
reuse authority pursuant to Section 67851.

(c)

end delete

begin insert

begin insert 53395.3. end insert   

end insert

begin insert (a) end insert  The district may finance the costs of real and
tangible commercial property improvements, including the costs
of acquisition, installation, construction, inducements to private
parties, and costs of planning and design thereof, as well as the
costs of educational or job training programs created, established,
or continued in association therewith, in accordance with the
procedures contained in Sections 53395.13 and 53395.14.

begin delete

(d)

end delete

begin insert (b) end insert  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).

begin delete

(e)

end delete

begin insert (c) end insert  The district may engage in activities in which property tax
increment is assumed, used, transferred, or otherwise encumbered
by the district for activities authorized in this section and during
the life of the district, as determined by paragraph (4) of
subdivision (d) of Section 53395.14, until the unemployment rate
of the district falls below the threshold stated in subdivision (c) of
Section 53395.10.

SEC. 5.  

Section 53395.3.6 is added to the Government Code,
to read:

53395.3.6.  

(a) There is in each city a public, corporate
instrumentality of the State of California, known as the jobs and
begin delete infrastructure end delete begin insert education end insert financing district of the city. Each city is
authorized to utilize that district in the issuance of revenue bonds
in the accomplishment of the public purposes as provided in
Section 53395.3. The purposes provided in Section 53395.3 shall
be deemed to constitute public purposes of the city, and the exercise
by each district of the powers conferred by this title, including the
power to issue revenue bonds, shall be deemed to be the
performance of an essential governmental function of the city.
However, that exercise of the powers conferred by this title in the
achievement of the purposes provided in Section 53395.3 shall be
subject to the provisions of, and exclusively as provided in, this
article.

(b) A district shall not transact any business or exercise any
powers under this article unless, by ordinance, the city council
declares that there is a need for the district and that the district
shall function. The ordinance shall be subject to referendum in the
manner prescribed by law for ordinances of the city.

(c) A district shall conclusively be deemed to have been
established and authorized to transact business and exercise its
powers upon proof of the adoption of the ordinance.

(d) Notwithstanding any other provision of this article, a city
shall have the power to transact any business or exercise any
powers of a district conferred by this title without having to
establish a district. However, a city, at its option may, establish a
district pursuant to this article to exercise any powers conferred
by this article. In the event that a city acts as a jobs and
infrastructure financing district, any reference to district and board
contained in this title shall mean city and city council, respectively.

SEC. 6.  

Section 53395.3.7 is added to the Government Code,
to read:

53395.3.7.  

The sole purpose of a district is to undertake projects
through the issuance of revenue bonds in accomplishment of the
purposes provided in Section 53395.3, to carry out and complete
those projects, and to perform and exercise derivative obligations
and powers.

SEC. 7.  

Section 53395.3.8 is added to the Government Code,
to read:

53395.3.8.  

(a) All powers vested in districts shall be
exercisable as their respective boards shall provide, solely to
accomplish the purposes of districts.

(b) The board shall consist of all of the members of the city
council.

(c) The directors shall serve without compensation, except that
they may be reimbursed for their actual and necessary expenses
incurred in the performance of their duties, or may receive a
reasonable per diem payment and mileage charge as reimbursement
for living and traveling expenses incurred in the performance of
duties away from the principal office. In addition, they also may
receive a reasonable mileage charge as reimbursement for traveling
expenses to and from the principal office of the authority, or the
place of meeting, if other than at the principal office.

SEC. 8.  

Section 53395.3.9 is added to the Government Code,
to read:

53395.3.9.  

(a) The principal office of a district shall be located
at the principal office of the city.

(b) Each district board shall have a chairperson, who shall be
elected by the members of the board from among its membership.

(c) Public officers of a district consist of the chairperson and
members of the board, a secretary, a treasurer, and those assistants
for the secretary and the treasurer as the board may appoint. The
corresponding officers of the city may, by designation by resolution
of the board, be the secretary, the treasurer, and the assistants of
the district. The secretary, the treasurer, and the assistants may be
compensated.

(d) A district shall file with the clerk of the city a certificate of
a majority of the authorized number of directors as to the secretary
and any assistant secretaries of the district, and the certificate, until
superseded by a later certificate, shall be conclusive with respect
to the district of which the person is the secretary or assistant
secretary, as the case may be, of the district.

(e) A certificate of the clerk of the city as to the secretary or
assistant secretary of the district, and of the secretary or assistant
secretary so certified as to the incumbents of any offices, shall be
conclusive with respect to the city and the district that those persons
are the incumbents of those offices in any transactions of the
district authorized by this title.

SEC. 9.  

Section 53395.3.10 is added to the Government Code,
to read:

53395.3.10.  

(a) A district may appoint any employees and
agents, including, without limitation, financial advisers or
consultants, accountants, architects, engineers, or other experts or
advisers as it requires, and may determine their qualifications,
duties, terms of employment or engagement, and compensation.
Officers, agents, or employees of a city may also be agents or
employees of a district. Officers, agents, or employees of a district
shall not, by reason thereof, be deemed to be officers, agents, or
employees of a city. A district shall adopt personnel rules and
regulations applicable to its employees.

(b) A district may contract for legal counsel as in its judgment
is necessary or advisable to enable it to carry out its purposes,
including bond counsel as it deems advisable in connection with
any proceedings.

(c) An attorney or firm of attorneys employed as counsel by a
company may not serve at the same time as legal counsel, including
bond counsel, and a person or firm employed as financial adviser
by a company may not serve at the same time as financial adviser,
to the district in connection with any project or proposed project
for the company.

SEC. 10.  

Section 53395.3.11 is added to the Government Code,
to read:

53395.3.11.  

A member of the board or other officer of a district
or a member of the city council who has any financial interest,
other than an interest as defined by Section 1091 or 1091.5, in any
project, project agreement, indenture, begin delete bonds, end delete begin insert bond, end insert or the sale
thereof, shall fully disclose the nature of the interest to the board,
or city council, and shall not cast a vote upon any matter
concerning that project, project agreement, indenture, begin delete bonds, end delete begin insert bond, end insert
or the sale thereof, in any manner whatsoever, except that the
presence of the member may be considered in determining the
existence of a quorum.

SEC. 11.  

Section 53395.3.12 is added to the Government Code,
to read:

53395.3.12.  

A district may do all of the following:

(a) Sue and be sued in its own name.

(b) Have an official seal.

(c) Have perpetual succession.

(d) Make and execute contracts and other instruments and
documents.

(e) Make, amend, and repeal bylaws governing procedures and
meetings of the board and the duties of its officers, and make,
amend, and repeal rules, regulations, and policies governing the
transaction of its business and the exercise of its powers.

(f) Use premises of, subject to the regulation thereof by, the
city.

(g) Administer its funds and deposit, invest, and reinvest funds
in the types of securities or obligations permitted by the city in
accordance with law.

(h) Use discretion in the undertaking of projects, including the
establishment of reasonable priorities and criteria among the types
and locations of projects and regarding companies.

SEC. 12.  

Section 53395.4 of the Government Code is amended
to read:

53395.4.  

begin delete (a) end delete begin delete   end delete A district may include areas that are not
contiguous.

SEC. 13.  

Section 53395.5 of the Government Code is repealed.

SEC. 14.  

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 delete job and infrastructure end delete begin insert jobs and education end insert financing
districts pursuant to this chapter in a United States Census-defined
area with high unemployment in excess of 7 percent, as determined
by the most recent data available from the American Community
Survey (ACS) of the federal Bureau of Labor Statistics (BLS) of
the United States Department of Labor at the time the district is
formed. The United States Census-defined area is comprised of
census tracts that may define conterminous areas within a city, or
conterminous areas that reside in more than one city. 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 a job and 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 and development proposed
to be financed or assisted by the district in accordance with Section
53395.3.

(c) State the need for the district based upon the most recent
month’s unemployment rate as published by the Employment
Development Department and the goals the district proposes to
achieve. These goals shall include, but are not limited to, reduction
of the district unemployment rate to the national average, as
determined by the latest information from the United States Bureau
of Labor Statistics, or 5 percent, whichever is lower.

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

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

SEC. 15.  

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
appropriate official to prepare a job creation plan (JCP) pursuant
to Section 53395.14.

SEC. 16.  

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 JCP. The JCP 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 begin delete improvements and facilities end delete begin insert improvements, facilities, real
and tangible commercial property improvements, and education
and job training programs end insert 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
begin delete improvements and facilities. end delete begin insert improvements, facilities, real and
tangible commercial property improvements, and education and
job training programs. end insert

(c) A finding that the public facilities begin delete are of communitywide
significance and end delete begin insert and real and tangible commercial property
improvements end insert provide significant begin insert job creation end insert benefits to begin delete an area
larger than the area of the district. end delete begin insert the area within the district or
to the city within which the district is located. end insert

(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 begin delete time. end delete begin insert time, however the district may acquire or use a
maximum of 50 percent of the combined state, county office of
education, school district, and community college district share
of tax increment on an annual basis. end insert

(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 begin delete facilities end delete begin insert improvements,
facilities, real and tangible commercial property improvements,
and education and job training programs end insert to be assisted by the
district, including a detailed description of any intention to incur
debt.

(4) 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 45 years from the date on which the ordinance
forming the district is adopted pursuant to Section 53395.23.

(5) 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 JCP 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.

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

begin insert

(7) A list of targeted industries and workforce categories that
have higher unemployment relative to other industries and
workforce categories within the district.

end insert

(e) A formula that illustrates the estimated number of jobs to
be created pursuant to the JCP, with the requirement that for every
one million dollars ($1,000,000) invested in tax increment or
companion private funds, the begin delete JID end delete begin insert JED end insert shall create 10 full-time
equivalent (FTE) jobs for qualifying employees within two years
of the start of construction, which shall occur within six months
of agreement approval. All construction jobs generated shall be
prevailing wage jobs.

begin insert

(f) Construction and permanent FTE jobs may receive credit
for indirect and induced jobs created pursuant to an accepted
analysis that applies a nationally accepted economic impact model.

end insert begin delete

(f)

end delete

begin insert (g) end insert  A description of any plan to encourage public-private
partnerships with employers and developers for property
acquisitions, building and tenant improvements, and equipment
purchases, and implementing and achieving the objectives stated
on the JCP.

SEC. 17.  

Section 53395.19 of the Government Code is amended
to read:

53395.19.  

(a) 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.

(b) This section shall not be construed to prevent the legislative
body from amending its begin delete infrastructure financing plan end delete begin insert JCP end insert and
adopting a resolution proposing formation of the begin delete infrastructure end delete
begin insert jobs and education end insert financing district without allocation of the tax
revenues of any affected taxing entity that has not approved the
begin delete infrastructure financing plan end delete begin insert JCP end insert by resolution of the governing
body of the affected taxing entity.

SEC. 18.  

Section 53395.20 of the Government Code is amended
to read:

53395.20.  

(a) At the conclusion of the hearing, the legislative
body may adopt a resolution adopting the begin delete infrastructure financing
plan end delete begin insert JCP end insert , as modified, and formation of the begin delete infrastructure end delete begin insert jobs
and education end insert financing district in a manner consistent with Section
53395.19, or it may abandon the proceedings.

(b) An election shall not be required to form the district.

(c) A public or private owner of land that is not within an
existing district, but that has any boundary line contiguous to a
boundary of the district, may petition the legislative body for
inclusion of the land in the district without an election.

SEC. 19.  

Section 53395.23 of the Government Code is
repealed.

SEC. 20.  

Section 53395.24 of the Government Code is
repealed.

SEC. 21.  

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.

(3) A job and infrastructure district.