BILL ANALYSIS �
SB 33
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Date of Hearing: July 3, 2013
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
SB 33 (Wolk) - As Amended: March 6, 2013
Policy Committee: Local
GovernmentVote:5-2
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill eliminates the voter approval requirement for a city
or county to create an infrastructure financing district (IFD)
and expands the types of projects that may be financed by a
district. Specifically, this bill:
1)Repeals the voter approval requirements to form an
Infrastructure Financing District (IFD), issue bonds and set
the appropriations limit.
2)Allows an IFD to contribute to the cost of maintaining
facilities and expands the type of facilities an IFD can
finance.
3)Authorizes an IFD to finance the cleanup and development of
brownfield properties contaminated by hazardous waste under
the provisions of the Polanco Redevelopment Act.
4)Makes other clarifying and technical changes to the IFD law.
FISCAL EFFECT
Negligible fiscal impact.
COMMENTS
1)Purpose . According to the author, SB 33 makes it easier for
local agencies to use IFDs to pay for public projects, without
impacting school districts' share of property tax or the
state's general fund. The author notes in a fiscally
distressed economic climate, local officials need a flexible
SB 33
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financing tool that is rigorous and responsible. According to
the author, forming an IFD is cumbersome; IFDs are subject to
a vote at three different points. To form an IFD, the city or
county must develop and approve an infrastructure plan, send
copies to every landowner, consult with other local
governments, and hold a public hearing. Every local agency
that will contribute its property tax increment to the IFD
must approve the plan.
2)Support . Supporters, including a number of local chambers of
commerce and business development groups, argue local
governments are in critical need of additional tools to help
finance and deliver much-needed infrastructure throughout the
state. They see this bill as critical to strengthening the
economy and providing local governments with needed tools to
support California communities after redevelopment's demise.
3)Opposition arguments . CalTax argues that eliminating voter
approval for infrastructure financing removes the people from
the process of deciding what their communities will look like,
how bonds are issued and how property tax revenues are spent.
CalTax notes this bill is inconsistent with Governor Brown's
efforts to eliminate tax-increment financing through
redevelopment agencies. They also note this bill paves the
way for property tax increases, particularly at a time when
homeowners are still recovering from the recession.
4)Background . Cities and counties can create IFDs and issue
bonds to pay for community scale public works, including
highways, transit, water systems, sewer projects, flood
control, child care facilities, libraries, parks and solid
waste facilities. To repay the bonds, IFDs divert property
tax increment revenues from other local governments for a
period of 30 years. IFDs, however, are prohibited from
diverting property tax increment revenues from schools.
For several years, local officials were reluctant to form IFDs
because they worried about the constitutionality of using tax
increment revenue from property that was not within the
redevelopment project area. When a 1998 Attorney General
opinion allayed those concerns, the City of Carlsbad formed an
IFD in 1999 to fund the public works for a new hotel located
adjacent to the Legoland theme park, the only example of local
officials' use of the existing IFD law.
IFDs have been tailored to meet specific local circumstances.
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SB 1085 (Migden), Chapter 213, Statutes of 2005, amended IFD
law to enable the City and County of San Francisco to finance
needed public infrastructure improvements to specified
waterfront properties. This authority was expanded even
further for San Francisco in AB 1199 (Ammiano), Chapter 664,
Statutes of 2010 and AB 644 (Ammiano), Chapter 314, Statutes
of 2011.
5)Related legislation .
a) AB 229 (John A. P�rez) - Allows military base reuse
authorities to create Infrastructure and Revitalization
Financing Districts to finance environmental mitigation and
hazardous cleanup. This bill is on the Senate floor.
b) AB 243 (Dickinson) - Creates Infrastructure and
Revitalization Financing Districts and reduces the
two-thirds voter threshold to form a District and issue
bonds to 55%. This bill is in the Senate Appropriations
Committee.
c) AB 662 (Atkins) - Allows IFDs to include a former
redevelopment area. This bill is in the Senate
Appropriations Committee.
1)Previous legislation . This bill is substantially similar to
SB 214 (Wolk) of 2012, which was vetoed by Governor Brown,
noting the bill is premature and local governments should be
focusing on winding down redevelopment.
Analysis Prepared by : Roger Dunstan / APPR. / (916) 319-2081