BILL ANALYSIS �
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|SENATE RULES COMMITTEE | SB 628|
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THIRD READING
Bill No: SB 628
Author: Beall (D)
Amended: 5/14/13
Vote: 21
SENATE GOVERNANCE & FINANCE COMMITTEE : 5-2, 4/17/13
AYES: Wolk, Beall, DeSaulnier, Hernandez, Liu
NOES: Knight, Emmerson
SENATE TRANSPORTATION & HOUSING COMMITTEE : 7-3, 5/7/13
AYES: DeSaulnier, Beall, Galgiani, Hueso, Lara, Pavley, Roth
NOES: Gaines, Cannella, Wyland
NO VOTE RECORDED: Liu
SUBJECT : Infrastructure financing: transit priority projects
SOURCE : San Francisco Bay Area Rapid Transit District
DIGEST : This bill allows a city or county to create an
infrastructure financing district to implement a transit
priority project without having to hold an election and requires
the local entity to use 25% of the resulting revenues for
affordable housing.
ANALYSIS : Existing law authorizes a city or county to create
an infrastructure financing district (IFD) and through the IFD
issue bonds to pay for community-scale public works, including
transit facilities, highways, water systems, sewer projects,
flood control, child care facilities, libraries, parks, and
solid waste facilities. The city or county repays the bonds by
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capturing a portion of the increase in property taxes that is
generated within the IFD. This is referred to as the "tax
increment" revenue.
Under an IFD, tax increment is diverted for 30 years from the
host city or county and other local governments, excluding
schools, but only if the other local governments agree to the
diversion. Each IFD must have a detailed infrastructure
financing plan, and the voters of the jurisdiction must approve
with a two-thirds vote the formation of the district and the
issuance of bonds and with a majority vote set a limit as to the
funds it will appropriate.
Existing law requires that:
1. If the IFD removes or destroys any housing units occupied
by low- or moderate-income persons, then the IFD must
within four years ensure the construction or rehabilitation
of an equal number of replacement units in the district's
territory for persons of low- or moderate-income.
2. If an IFD removes or destroys any affordable housing units
that are not occupied by persons of low or moderate
incomes, then the IFD must within four years ensure the
construction or rehabilitation of replacement units equal
to 20% of the number it destroyed.
The IFD must also provide relocation assistance and ensure
that there are suitable housing units at comparable costs
for persons or families of low or moderate income before
removing or destroying those units.
SB 375 (Steinberg, Chapter 728, Statutes of 2008), required the
Air Resources Board (ARB), by September 30, 2010, to provide
each region that has a metropolitan planning organization (MPO)
with a greenhouse gas emission reduction target for the
automobile and light truck sector for 2020 and 2035,
respectively. Each MPO, in turn, must include within its
regional transportation plan a sustainable communities strategy
(SCS) designed to achieve the ARB targets for greenhouse gas
emission reduction. Each MPO must submit its SCS to ARB for
review. ARB must accept or reject the MPO's determination that
the SCS submitted would, if implemented, achieve the greenhouse
gas emission reduction targets.
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SB 375 also created and defines a "transit priority project" as
one that:
1. Is located within one-half mile of an existing or planned
major transit stop or high-quality transit corridor included
in the RTP.
2. Is consistent with the general plan land use designation,
density, building intensity, and applicable policies
specified for the project area in its SCS, for which ARB has
accepted an MPO's determination that the SCS would, if
implemented, achieve the greenhouse gas emission reduction
targets.
3. Contains at least 50% residential use, based on total
building square footage and, if the project contains between
26% and 50% nonresidential uses, a floor area ratio of not
less than 0.75.
4. Provides a minimum net density of at least 20 dwelling units
per acre.
This bill:
1. Allows an IFD formed to finance any project that implements a
transit priority project, a regional transportation plan, or
any other project consistent with an ARB-approved SCS to
form, issue bonds, and set an appropriation limit without
holding any public votes.
2. Requires that any IFD formed pursuant to the bill use 25% of
its tax increment revenues to increase, improve, and preserve
the supply of low- and moderate-income housing available in
the district and occupied by income qualified persons.
3. Provides that a local government with land use authority that
participates in or approves an authority must enact an
ordinance that:
A. Prohibits the number of housing units occupied by
extremely low-, very low-, and low-income households,
including the number of bedrooms in those units, from
being reduced within the area during the effective
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period of the plan.
B. Requires the replacement of dwelling units that house
extremely low-, very low-, or low-income households when
removed from an area within two years, rather than the
four years under existing provisions of the Community
Redevelopment Law.
4. Requires that the MPO certify that the project the IFD will
implement is consistent with that region's SCS.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No Local:
No
SUPPORT : (Verified 5/14/13)
San Francisco Bay Area Rapid Transit District (source)
California Transit Association
Valley Transportation Authority
Western Center on Law and Poverty
OPPOSITION : (Verified 5/14/13)
California Taxpayers Association
Howard Jarvis Taxpayers Association
ARGUMENTS IN SUPPORT : According to the author's office,
increasingly transit-oriented projects are helping communities
deal with the negative impacts of growth and sprawl, such as
growing traffic gridlock, increased commute times and pollution.
These projects have been shown to be one of the most
cost-effective ways to reduce the emission of greenhouse gases.
The author's office notes that in essentially every
transit-oriented project there are critical components that have
very little or no source of funds, such as place making features
(pedestrian plazas, pocket parks, community facilities, etc.),
access improvements (additional bus access services, bicycle
facilities, parking, etc.) and affordable housing. The sponsor,
BART, has completed a number of transit-oriented projects around
its stations in the San Francisco Bay Area.
Proponents assert that this bill could be an important tool for
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local jurisdictions as they develop sustainable communities'
strategies pursuant to SB 375, and related transit priority
projects. The bill will assist in critical place-making
development around fixed rail stations, bus centers, and
high-speed rail stations, improving the livability of local
communities.
ARGUMENTS IN OPPOSITION : The California Taxpayers Association
opposes this bill because it repeals the vote of the people to
establish an IFD and for that IFD to issue bonds. CalTax points
out that the California Constitution requires two-thirds voter
approval before a city or county can issue long-term debt backed
by general purpose revenues. Proposition 13 added this
requirement to the constitution to protect property owners and
to ensure that local spending is carefully prioritized. CalTax
further asserts that this bill creates a funding gap for
critical government services and drives the demand for
increasing local taxes. Rather than utilizing tax increment
financing, local government should use existing tools to provide
economic development in our communities.
AB:d 5/14/13 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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