BILL NUMBER: AB 690 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY SEPTEMBER 11, 2013
AMENDED IN ASSEMBLY APRIL 9, 2013
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
infrastructure education financing districts.
LEGISLATIVE COUNSEL'S DIGEST
AB 690, as amended, Campos. Jobs and infrastructure
education 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 education
financing districts (JIDs) (JEDs)
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 Job and
Infrastructure Jobs and Education Financing
Districts (JIDs). (JEDs).
(b) To authorize JIDs JEDs to
prepare comprehensive job creation plans (JCP),
(JCPs), 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. JED.
SEC. 2. Section 53395 of the Government Code is amended to read:
53395. The Legislature finds and declares all of the following:
(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.
(e)
(a) Approximately 85 percent of the state's general
fund budget is generated by income tax taxes
and sales tax and use taxes ,
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.
(f)
(b) 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.
(g)
(c) 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 district. district, except
as provided in paragraph (1) of subdivision (d) of Section
53395.14.
(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 individuals. 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.
(d) "Designated official" means the city engineer or other
appropriate official designated pursuant to Section 53395.13.
(e) (1) "District" means a job jobs
and infrastructure education financing
district.
(2) A jobs and infrastructure education
financing district is a "district" within the meaning of
Section 1 of Article XIII A of the California Constitution.
(f) "Jobs and infrastructure education
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 improvements. improvements as
defined in subdivision (a) of Section 53395.3.
(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. supervisors, or joint powers authority
that is acting as the military base reuse authority established
pursuant to Title 7.86 (commencing with Section 67800).
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 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)
53395.3. (a) 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.
(d)
(b) 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).
(e)
(c) 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
infrastructure education 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, bonds,
bond, 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, bonds, bond, 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. (a) 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 job and infrastructure jobs and
education 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 improvements and facilities
improvements, facilities, real and tangible commercial property
improvements, and education and job training programs 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. improvements, facilities, real and tangible
commercial property improvements, and education and job training
programs.
(c) A finding that the public facilities are of
communitywide significance and and real and tangible
commercial property improvements provide significant job
creation benefits to an area larger than the area of
the district. the area within the district or to the
city within which the district is located.
(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. 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.
(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
improvements, facilities, real and tangible commercial property
improvements, and education and job training programs 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.
(7) A list of targeted industries and workforce categories that
have higher unemployment relative to other industries and workforce
categories within the district.
(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 JID JED 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.
(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.
(f)
(g) 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 infrastructure financing plan
JCP and adopting a resolution proposing
formation of the infrastructure jobs and
education financing district without allocation of the tax
revenues of any affected taxing entity that has not approved the
infrastructure financing plan JCP 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 infrastructure
financing plan JCP , as modified, and formation
of the infrastructure jobs and education
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.