BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 628|
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UNFINISHED BUSINESS
Bill No: SB 628
Author: Beall (D) and Wolk (D), et al.
Amended: 8/26/14
Vote: 21
PRIOR VOTES NOT RELEVANT
ASSEMBLY FLOOR : Not available
SUBJECT : Enhanced infrastructure financing districts
SOURCE : Author
DIGEST : This bill allows local agencies to create enhanced
infrastructure financing districts (EIFDs) to finance specified
infrastructure projects and facilities.
Assembly Amendments remove the contents of the previous version
of the bill related to medical surveys, add joint and coauthors
and insert language related to enhanced infrastructure financing
districts.
ANALYSIS :
Existing law:
1. Authorizes cities and counties to create infrastructure
financing districts (IFDs) and issue bonds to pay for
community scale public works: highways, transit, water
systems, sewer projects, flood control, child care
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facilities, libraries, parks, and solid waste facilities.
2. Allows an IFD to divert property tax increment revenues from
other local governments, excluding school districts, for up
to 30 years, in order to pay back bonds issued by the IFD.
3. Requires that in order to form an IFD a city or county must
develop an infrastructure plan, send copies to every
landowner, consult with other local governments, and hold a
public hearing.
4. Requires that when forming an IFD, local officials must find
that its public facilities are of communitywide significance
and provide significant benefits to an area larger than the
IFD.
5. Requires that every local agency who will contribute its
property tax increment revenue to the IFD approve the plan.
6. Requires a two-thirds voter approval of the formation of the
IFD and the issuance of bonds.
7. Requires majority voter approval for setting the IFD's
appropriations limits.
8. Specifies that public agencies that own land in a proposed
IFD may not vote on issues regarding the district.
9. Authorizes IFDs to issue a variety of debt instruments,
including bonds, certificates of participation, leases, and
loans.
10.Requires any IFD that constructs dwelling units to set aside
not less than 20% of those units to increase and improve the
community's supply of low- and moderate-income housing
available at an affordable housing cost to persons and
families of low- and moderate-income.
This bill:
1. Finds and declares that with the dissolution of redevelopment
agencies (RDAs), public benefits will accrue if local
agencies, excluding schools, are provided a means to finance
the reuse and revitalization of former military bases, fund
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the creation of transit priority projects and the
implementation of sustainable communities plans, construct
and rehabilitate affordable housing units, and construct
facilities to house providers of consumer goods and services
in the communities served by these efforts.
2. Requires the public financing authority (sitting as the
governing board of the EIFD) to have a membership consisting
of one of the following, as appropriate:
A. If an EIFD has only one participating affected taxing
entity, the public financing authority's membership
shall consist of three members of the legislative body
of the participating entity, and two members of the
public chosen by the legislative body. The appointment
of public members shall be subject to the provisions of
existing law related to posting requirements for a local
agency for an unscheduled vacancy; or,
B. If an EIFD has two or more participating affected
taxing entities, the public financing authority's
membership shall consist of a majority of members from
the legislative bodies of the participating entities,
and a minimum of two members of the public chosen by the
legislative bodies of the participating entities. The
appointment of public members shall be subject to the
provisions of existing law related to posting
requirements for a local agency for an unscheduled
vacancy.
3. Requires the legislative body to ensure that the public
financing authority is established prior to adopting a
resolution pursuant to this bill's provisions to adopt an
infrastructure financing plan and to form an EIFD. Specifies
that members of the public financing authority shall not
receive compensation but may receive reimbursement for actual
and necessary expenses incurred in the performance of
official duties, as specified. Requires members of the
public financing authority to be subject to provisions of law
requiring ethics training. States that a public financing
authority created pursuant to the bill's provisions shall be
a local public agency subject to the Ralph M. Brown Act, the
California Public Records Act, and the Political Reform Act
of 1974. States that an EIFD is a district within the
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meaning of California Constitution Article XIII A, Section 1.
4. Allows an EIFD to finance specified costs.
5. Specifies that for #4) above, that the facilities need not be
physically located within the boundaries of the EIFD;
however, any facilities financed outside of an EIFD must have
a tangible connection to the work of the EIFD, as detailed in
the infrastructure financing plan adopted pursuant to the
bill's provisions.
6. Prohibits an EIFD from financing routine maintenance, repair
work, or the costs of an ongoing operation of providing
services of any kind.
7. Allows an EIFD to finance only public capital facilities or
other specified projects of communitywide significance that
provide significant benefits to the EIFD or the surrounding
community, including, but not limited to, all of the
following:
A. Highways, interchanges, ramps and bridges, arterial
streets, parking facilities, and transit facilities;
B. Sewage treatment and water reclamation plants and
interceptor pipes;
C. Facilities for the collection and treatment of water
for urban uses;
D. Flood control levees and dams, retention basins, and
drainage channels;
E. Child care facilities;
F. Libraries;
G. Parks, recreation facilities, and open space;
H. Facilities for the transfer and disposal of solid
waste, including transfer stations and vehicles;
I. Brownfield restoration and other environmental
mitigation;
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J. The development of projects on a former military
base, provided that the projects are consistent with the
military base authority reuse plan and are approved by
the military base reuse authority, if applicable;
K. The repayment of the transfer of funds to a military
base reuse authority pursuant to existing law that
occurred on or after the creation of the EIFD;
L. The acquisition, construction, or repair of
industrial structures for private use;
M. Transit priority projects, as defined in existing
law, that are located with a transit priority project
area. For purposes of this bill, a transit priority
project area may include a military base reuse plan that
meets the definition of transit priority project area
and it may include a contaminated site within a transit
priority project area; and,
N. Projects that implement a sustainable communities
strategy, when the State Air Resources Board has
accepted a metropolitan planning organization's
determination that the sustainable communities strategy
or the alternative planning strategy would, if
implemented, achieve the greenhouse gas emission
reduction targets.
8. Provides that the EIFD shall require, by recorded covenants
or restrictions, that housing units built pursuant to the
bill's provisions shall remain available at affordable
housing costs to, and occupied by, persons and families of
low- or moderate-income households for the longest feasible
time, but not for less than 55 years for rental units and 45
years for owner-occupied units.
9. Allows the EIFD to finance mixed-income housing development,
but may finance only those units in such a development that
are restricted to occupancy by persons of low or moderate
incomes, as specified, and those on-site facilities for child
care, after-school care, and social services that are
integrally linked to the tenants of the restricted units.
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10.Allows an EIFD to utilize any powers under the Polanco
Redevelopment Act, and finance an action necessary to
implement that act.
11.Allows an EIFD to reimburse a developer of a project that is
located entirely within the boundaries of that EIFD for any
permit expenses incurred and to offset additional expenses
incurred by the developer on constructing affordable housing
units pursuant to the Transit Priority Project Program, as
specified.
12.Prohibits a city or county that created an RDA from
initiating the creation of an EIFD or participating in the
governance or financing of an EIFD, until each of the
following has occurred:
A. The successor agency for the former RDA created by
the city or county has received a finding of completion;
B. The city or county certifies to the Department of
Finance (DOF) and to the public financing authority that
no former RDA assets that are the subject of litigation
involving the state, where the city or county, the
successor agency, or the designated local authority are
a named plaintiff, have been or will be used to benefit
any efforts of an EIFD formed pursuant to this bill's
provisions, unless the litigation and all possible
appeals have been resolved in a court of law. The city
or county shall provide this certification to DOF within
10 days of its legislative body's action to participate
in an EIFD, as specified, or of its legislative body's
action to form an EIFD, as specified;
C. The office of the State Controller (Controller) has
completed its review of RDA asset transfers pursuant to
existing law; and,
D. The successor agency and the entity that created the
former RDA have complied with all of the office of the
Controller's findings and orders stemming from the
reviews specified in c) above.
13.Allows an EIFD to include any portion of a former RDA project
area, provided that the city or county that created the
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former RDA has met the requirements of 12) above.
14.Allows a district to finance only the facilities authorized
in this bill's provisions to the extent that the facilities
are in addition to those provided in the territory of the
EIFD before the EIFD was created. The additional facilities
may not supplant facilities already available within that
territory when the EIFD was created but may supplement,
rehabilitate, upgrade, or make more sustainable those
facilities.
15.Allows an EIFD to include areas which are not contiguous.
16.States the intent of the Legislature that the creation of
EIFDs should not ordinarily lead to the removal of existing
dwelling units. Provides, 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 EIFD, the adopted infrastructure financing plan
shall contain specified provisions
17.Requires that any action or proceeding to attack, review, set
aside, void, or annul the creation of an EIFD, adoption of an
infrastructure financing plan, including a division of taxes
thereunder, or an election pursuant to this bill's provisions
to be commenced within 30 days after the enactment of the
resolution creating the EIFD. Consistent with the time
limitations, such an action or proceeding with respect to a
division of taxes may be brought pursuant to Chapter 9 of
Title 10 of Part 2 of the Code of Civil Procedure (CCP),
except that CCP Section 869 shall not apply. Requires an
action to determine the validity of the issuance of bonds
pursuant to the bill's provisions to be brought pursuant to
Chapter 9 of Title 10 of Part 2 of the CCP. However,
notwithstanding the time limits specified in CCP Section 860,
the action shall be commenced within 30 days after adoption
of the resolution pursuant to the bill's provisions providing
for issuance of the bonds if the action is brought by an
interested person pursuant to CCP Section 863. Any appeal
from a judgment in that action or proceeding shall be
commenced within 30 days after entry of judgment.
18.Allows a legislative body of a city or county to designate
one or more proposed EIFDs. Requires proceedings for the
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establishment of an EIFD to be instituted by the adoption of
a resolution of intention to establish the proposed EIFD and
to do all of the following:
A. State that an EIFD is proposed to be established
under the terms of this bill's provisions and describe
the boundaries of the proposed EIFD, which may be
accomplished by reference to a map on file in the office
of the clerk of the city or in the office of the
recorder of the county, as applicable;
B. State the type of public facilities and development
proposed to be financed or assisted by the EIFD, as
specified;
C. State the need for the EIFD and the goals the EIFD
proposed to achieve;
D. State that incremental property tax revenue from the
city or county and some or all affected taxing entities
within the EIFD, if approved by resolution, may be used
to finance these activities; and,
E. Fix a time and place for a public hearing on the
proposal.
19.Requires the legislative body to direct the city clerk or
county recorder, as applicable, to mail a copy of the
resolution of intention to create the EIFD to each owner of
land within the EIFD. Requires the legislative body to
direct the city clerk or county recorder, as applicable, to
mail a copy of the resolution to each affected taxing entity.
Requires, after adopting the resolution of intention, the
legislative body to designate and direct the city or county
engineer or other appropriate official to prepare an
infrastructure financing plan, as specified. Requires, after
receipt of a copy of the resolution of intention to establish
an EIFD, the official to prepare a proposed infrastructure
financing plan. Requires the plan to be consistent with the
general plan of the city or county within which the EIFD is
located and to include all of the following:
A. A map and legal description of the proposed EIFD,
which may include all or a portion of the EIFD
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designated by the legislative body in its resolution of
intention;
B. A description of the public facilities and other
forms of development or financial assistance that is
proposed in the area of the EIFD, including those to be
provided by the private sector, those to be provided by
governmental entities without assistance, as specified,
those public improvements and facilities to be financed
with assistance from the proposed EIFD, and those to be
provided jointly. The description shall include the
proposed location, timing, and costs of the development
and financial assistance;
C. If funding from affected taxing entities is
incorporated in the financing plan, a finding that the
development and financial assistance are of
communitywide significance and provide significant
benefits to an area larger than the area of the EIFD;
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 or county
and of each affected taxing entity proposed to be
committed to the EIFD for each year during which
the EIFD 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 EIFD in each year
during which the EIFD 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 EIFD, including a detailed
description of any intention to incur debt;
(4) A limit on the total number of dollars of
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taxes that may be allocated to the EIFD pursuant
to the plan;
(5) A date on which the EIFD will cease to
exist, by which time all tax allocation to the
EIFD will end. The date shall not be more than 45
years from the date on which the issuance of bonds
is approved, or the issuance of a loan is approved
by the governing board of a local agency, as
specified;
(6) An analysis of the costs to the city or
county of providing facilities and services to the
area of the EIFD while the area is being developed
and after the area is developed. The plan shall
also include an analysis of the tax, fee, charge,
and other revenues expected to be received by the
city or county as a result of expected development
in the area of the EIFD;
(7) An analysis of the projected fiscal impact
of the EIFD and the associated development upon
each affected taxing entity; and,
(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 EIFD and qualifies for the
Transit Priority Project Program, including any
permit and affordable housing expenses related to
the project.
E. If any dwelling units occupied by persons or families
are proposed to be removed or destroyed in the course of
private development or public works construction within
the area of the EIFD, a plan providing for replacement
of those units and relocation of those persons or
families consistent with this bill's provisions; and,
F. The goals the EIFD proposed to achieve for each
project financed pursuant to this bill's provisions.
20.Requires the infrastructure financing plan to be sent to each
owner of land within the proposed EIFD and to each affected
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taxing entity together with any report required by the
California Environmental Quality Act that pertains to the
proposed public facilities or the proposed development
project for which the public facilities are needed, and shall
be made available for public inspection. This report shall
also be sent to the planning commission and the legislative
body.
21.Requires the designated official to consult with each
affected taxing entity, and, at the request of any affected
taxing entity, to meet with representatives of an affected
taxing entity. Allows any affected taxing entity to suggest
revisions to the plan.
22.Requires the legislative body to conduct a public hearing
prior to adopting the proposed infrastructure financing plan.
Requires the public hearing to be called no sooner than 60
days after the plan has been sent to each affected taxing
entity. Requires, in addition to the notice given to
landowners and affected taxing entities pursuant to the
bill's provisions, that notice of the public hearing shall be
given by publication not less than once a week for four
successive weeks in a newspaper of general circulation
published in the city or county in which the proposed EIFD is
located. Requires the notice to state that the EIFD will be
used to finance public facilities or development, briefly
describe the public facilities or development, briefly
describe the proposed financial arrangements, including the
proposed commitment of incremental tax revenue, describe the
boundaries of the EIFD, and state the day, hour, and place
when and where any persons having any objections to the
proposed infrastructure financing plan, or the regularity of
any of the prior proceedings, may appear before the
legislative body and object to the adoption of the proposed
plan by the legislative body.
23.Requires, at the hour set in the required notices, the
legislative body to proceed to hear and pass upon all written
and oral objections, and allows the hearing to be continued
from time to time. Requires the legislative body to consider
the recommendations, if any, of affected taxing entities, and
all evidence and testimony for and against the adoption of
the plan. Allows the legislative body to modify the plan by
eliminating or reducing the size and cost of proposed
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facilities or development, by reducing the amount of proposed
debt, or be reducing the portion, amount, or duration of
incremental tax revenues to be committed to the EIFD.
24.Prohibits the legislative body from enacting a resolution
proposing the formation of an EIFD and providing for the
division of taxes of any affected taxing entity 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, as specified,
and has been filed with the legislative body at or prior to
the time of the hearing.
25.States that nothing in this bill's provisions shall be
construed to prevent the legislative body from amending its
infrastructure financing plan and adopting a resolution
proposing formation of the EIFD without allocation of the tax
revenues of any affected taxing entity that has not approved
the infrastructure financing plan by resolution of the
governing body of the affected taxing entity.
26.Allows, at the conclusion of the hearing, the legislative
body to adopt a resolution proposing adoption of the
infrastructure financing plan, as modified, and formation of
the EIFD in a manner consistent with the bill's provisions,
or it may abandon the proceedings.
27.Provides that the infrastructure financing plan and the
formation of the EIFD shall take effect upon the legislative
body's adoption of the resolution. Requires the
infrastructure financing plan to specify if the EIFD shall be
funded solely through the EIFD's share of tax increment,
governmental or private loans, grants, bonds, assessments,
fees, or some combination thereof.
28.Provides that the public financing authority may not issue
bonds or levy assessment or fees that may be included in the
plan prior to one or more of the following:
A. An affirmative vote to issue bonds to finance the
infrastructure financing plan [see 42) below];
B. Without compliance with the procedures required in
the bill related to division of taxes [see 37) below],
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to levy assessments or fees to finance the
infrastructure financing plan.
29.Allows the EIFD to expend up to 10% of any accrued tax
increment in the first two years of the effective date of the
EIFD on planning and dissemination of information to the
residents with the EIFD's boundaries about the infrastructure
financing plan and planned activities to be funded by the
EIFD.
30.Specifies, except as otherwise provided in this bill, that
that the provisions of law regulating elections of the local
agency that calls an election pursuant to this bill's
provisions, insofar as they may be applicable, shall govern
all elections conducted pursuant to this bill's provisions.
Requires there to be prepared and included in the ballot
material provided to each voter, an impartial analysis, as
specified. Allows, if the vote is to be by the landowners of
the proposed EIFD, the analysis and arguments to be waived
with the unanimous consent of all the landowners and to be so
stated in the order for the election. Provides, if an
election is to be conducted by mail ballot, that the election
official conducting the election shall provide ballots and
election materials, as specified, together with all supplies
and instructions necessary for the use and return of the
ballot. Requires specified information to be contained on
the identification envelope for return of mail ballots.
31.Allows the public financing authority to submit a proposition
to establish or change the appropriations limit, as
specified, of an EIFD to the qualified electors of a proposed
or established EIFD. Requires the proposition establishing
or changing the appropriations limit to become effective if
approved by the qualified electors voting on the proposition
and to be adjusted for changes in the costs of living and
changes in populations, as defined, except that the change in
population may be estimated by the legislative body in the
absence of an estimate by DOF. Specifies for purposes of
adjusting for changes in population, that the population of
an EIFD shall be deemed to be at least one person during each
calendar year. Specifies that any election heard pursuant to
this section may be combined with any election held pursuant
to the provisions in the bill that require voter approval for
the EIFD to issue bonds, in any convenient manner.
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32.Allows any infrastructure financing plan to contain a
provision that taxes, if any, levied upon taxable property in
the area included within the EIFD each year by or for the
benefit of the State of California, or any affected taxing
entity after the effective date of the ordinance adopted
pursuant to this bill's provisions to create the EIFD, shall
be divided as follows:
A. That portion of the taxes that would be produced by
the rate upon which the tax is levied each year by or
for each of the affected taxing entities upon the total
sum of the assessed value of the taxable property in the
EIFD as shown upon the assessment roll used in
connection with the taxation of the property by the
affected taxing entity, last equalized prior to the
effective date of the ordinance adopted to create the
EIFD, to be allocated to, and when collected shall be
paid to, the respective affected taxing entities as
taxes by or for the affected taxing entities on all
other property are paid; and,
B. That portion of the levied taxes each year specified
in the adopted infrastructure financing plan for the
city or county and each affected taxing entity that has
agreed to participate in excess of the amount, as
specified, shall be allocated to, and when collected
shall be paid into a special fund of, the EIFD for all
lawful purposes of the EIFD. Unless and until the total
assessed valuation of the taxable property in an EIFD
exceeds the total assessed value of the taxable property
in the EIFD as shown by the last equalized assessment
roll referred to in a) above, all of the taxes levied
and collected upon the taxable property in the EIFD
shall be paid to the respective affected taxing
entities. When the EIFD ceases to exist, all moneys
thereafter received from taxes upon the taxable property
in the EIFD shall be paid to the respective affected
taxing entities as taxes on all other properties are
paid.
33.Specifies, where any EIFD boundaries overlap with the
boundaries of any former RDA project area, any debt or
obligation of an EIFD shall be subordinate to any and all
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enforceable obligations of the former RDA, as approved by the
Oversight Board and DOF, as specified. Specifies that the
division of taxes allocated to the EIFD, as specified, shall
not include any taxes required to be deposited by the county
auditor-controller into the Redevelopment Property Tax Trust
Fund.
34.Allows the legislative body of the city or county forming the
EIFD to choose to dedicate any portion of its net available
revenue to the EIFD through the infrastructure financing
plan.
35.Requires, that portion of any ad valorem property tax revenue
annually allocated to a city or county pursuant to existing
law related to the Educational Revenue Augmentation Fund
(ERAF) that is specified in the adopted infrastructure
financing plan for the city or county that has agreed to
participate in the division of taxes, and that corresponds in
the assessed valuation of taxable property, to be allocated
to, and when collected to be apportioned to a special fund of
the EIFD for all lawful purposes of the EIFD.
36.Provides that when the EIFD ceases to exist pursuant to the
adopted infrastructure financing plan, the revenues described
in the division of taxes section of the bill shall be
allocated to, and when collected, shall be apportioned to the
respective city or county.
37.Provides that the bill's provisions shall not be construed to
prevent an EIFD from utilizing revenues from any of the
following sources to support its activities provided that the
applicable voter approval has been obtained, and the
infrastructure financing plan has been approved: the
Improvement Act of 1911; the Municipal Improvement Act of
1913; the Improvement Bond Act of 1915; the Landscaping and
Lighting Act of 1972; the Vehicle Parking District Law of
1943; the Parking District Law of 1951; the Park and
Playground Act of 1909; the Mello-Roos Community Facilities
Act of 1982; the Benefit Assessment Act of 1982; and, the
so-called facilities benefit assessment levied by the charter
city of San Diego or any substantially similar assessment
levied for the same purpose by any other charter city
pursuant to any ordinance or charter provision.
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38.Provides that all costs incurred by a county in connection
with the division of taxes for an EIFD shall be paid by that
EIFD.
39.Allows the public financing authority to, by majority vote,
initiate proceedings to issue bonds by adopting a resolution
stating its intent to issue the bonds, and provides that the
resolution shall contain all of the following information:
A. A description of the facilities or developments to be
financed with the proceeds of the proposed bond issue;
B. The estimated costs of the facilities or
developments, the estimated cost of preparing and
issuing the bonds, and the principal amount of the
proposed bond issuance;
C. The maximum interest rate and discount on the
proposed bond issuance;
D. The date of the election on the proposed bond
issuance and the manner of holding the election;
E. A determination of the amount of tax revenue
available or estimated to be available, for the payment
of the principal of, and interest on, the bonds; and,
F. A finding that the amount necessary to pay the
principal of, and interest on, the proposed bond
issuance will be less than, or equal to, the amount
determined pursuant to E) above.
40.Requires the clerk of the public financing authority to
publish the resolution once a day for at least seven
successive days in a newspaper published in the city or
county at least six days a week, or at least once a week for
two successive weeks in a newspaper published in the city or
county less than six days a week. Requires, if there are no
newspapers meeting these criteria, the resolution to be
posted in three public places within the territory of the
EIFD for two succeeding weeks.
41.Requires the public financing authority to submit the
proposal to issue the bonds to the voters who reside within
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the EIFD, as specified, and provides for procedures for the
election.
42.Allows bonds to be issued if 55% of the voters voting on the
proposition vote in favor of issuing the bonds.
43.Requires the public financing authority to proceed with the
issuance of bonds, if the voters approve the issuance of
bonds, by adopting a resolution that provides specified
information.
44.Prohibits, if any proposition submitted to the voters to
issue bonds is defeated by the voters, the public financing
authority from submitting, or cause to be submitted, a
similar proposition to the voters for at least one year after
the first election.
45.Allows the public financing authority to, by majority vote,
provide for the refunding of bonds, as specified.
46.Prohibits the public financing authority or any person
executing the bonds from being personally liable on the bonds
by reason of their issuance, and provides that the bonds and
other obligations of an EIFD are not a debt of the city,
county, or state or any of its political subdivisions, other
than the EIFD, and none of those entities, other than the
EIFD, shall be liable on the bonds. Requires the bond
obligations to be payable exclusively from funds or
properties of the EIFD. Requires the bonds to contain a
statement to this effect on their face. States that the
bonds do not constitute an indebtedness within the meaning of
any constitutional or statutory debt limitation.
47.Allows the bonds to be sold at a discount not to exceed 5% of
par at public sale. Requires, at least five days prior to
the sale, notice to be published, as specified, in a
newspaper of general circulation and in a financial newspaper
published in the City and County of San Francisco and in the
City of Los Angeles. Prohibits bonds from being sold at not
less than par to the federal government at a private sale
without any public advertisement.
48.Provides that if any member of the public financing authority
whose signature appears on bonds ceases to be a member of the
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public financing authority before delivery of the bonds, his
or her signature is as effective as if he or she had remained
in office. Provides that bonds issued pursuant to this
bill's provisions are fully negotiable.
49.Allows, upon the approval of its governing board, a city,
county, or special district that contains territory within
the boundaries of an EIFD, to loan moneys to the EIFD to fund
those activities described in the approved and adopted
infrastructure financing plan. Requires moneys loaned to be
repaid at an interest rate that does not exceed the Local
Agency Investment Fund (LAIF) rate that is in effect on the
date that the loan is approved by the governing board.
Declares the intent of the Legislature that any loan issued
to a public financing authority by a governmental entity
shall be repaid fully unless agreed to otherwise between the
authority and the governmental entity.
50.Requires, every two years after the issuance of debt pursuant
to the bill's provisions, that the EIFD contract for an
independent financial and performance audit, and requires the
audit to be conducted according to guidelines established by
the Controller. Requires a copy of the audit to be provided
to the Controller, the DOF, and to the Joint Legislative
Budget Committee.
51.Allows, upon request of the Governor or the Legislature, the
Bureau of State Audits to be authorized to conduct financial
and performance audits of EIFDs, and requires the results of
the audits to be provided to the EIFD, the Controller, the
DOF, and the Joint Legislative Budget Committee.
52.Defines the following terms:
A. "Affected taxing entity" to mean any governmental
taxing agency which levied or had levied on its behalf a
property tax on all or portion of the property located
in the proposed EIFD in the fiscal year prior to the
designation of the EIFD, but not including any county
office of education, school district, or community
college district."
B. "County" to mean a county or a city and county.
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C. "Debt" to mean 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" to mean the city or county
engineer or other appropriate official, as specified.
E. "District" to mean an EIFD.
F. "EIFD" to mean a legally constituted governmental
entity separate and distinct from the city or county
that established it [pursuant to the bill's provisions]
for the sole purpose of financing public facilities or
other projects as authorized. Provides that an EIFD
shall be a local agency for purposes of the Ralph M.
Brown Act.
G. "Landowner" or "owner of land" to mean 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 the land, and its determination of
ownership shall be final and conclusive for the purposes
of this bill. A public agency is not a landowner or
owner of land for purposes of this bill, unless the
public agency owns all of the land to be included within
the proposed EIFD.
H. "Legislative body" to mean the city council or board
of supervisors.
I. "Net available revenue" to mean periodic
distributions to the city or county from the
Redevelopment Property Tax Trust Fund, as created
pursuant to existing law, that are available to the city
or county after all preexisting legal commitments and
statutory obligations from that revenue are made, as
specified. Provides that "net available revenue" shall
not include any funds deposited by the county
auditor-controller in the Redevelopment Property Tax
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Trust Fund or funds remaining in the Fund prior to
distribution. Provides that net available revenues
shall not include any moneys payable to a school
district that maintains kindergarten and grades 1 to 12,
inclusive, community college districts, county office of
education, or to ERAF.
J. "Public financing authority" to mean the governing
board of the EIFD, as established pursuant to the bill's
provisions.
53.Provides that no reimbursement is required by this bill
because the only costs that may be incurred by a local agency
or school district will be incurred because this act creates
a new crime or infraction, eliminates a crime or infraction,
or changes the penalty for a crime or infraction, as
specified.
Background
Currently, 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. That small project is the
only example of local officials' use of the 1990 IFD law.
Public officials continue to search for ways to raise the
capital they need to invest in public work projects, like public
transit facilities, infill development, or clean water. One
concept recognizes that expanded public structures can boost the
value of nearby property. Higher property values produce higher
property tax revenues. Property tax increment financing
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captures those property tax increment revenues. When
redevelopment officials used property tax increment financing to
eradicate blight, state law did not require voter approval.
When local officials use IFDs to capture tax increment revenues,
state law requires a two-thirds approval.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
SUPPORT : (Verified 8/29/14)
California Economic Summit
California Infill Builders Federation
California Park and Recreation Society
California Special Districts Association
California State Association of Counties
Majestic Realty
League of Cities
OPPOSITION : (Verified 8/29/14)
California Association of Realtors
California Rural Legal Assistance Foundation
CalTax
Community Legal Services in East Palo Alto
Council of Community Housing Organizations, San Francisco
East Bay Housing Organizations
Housing Leadership Council of San Mateo County
Move LA
Public Advocates Inc.
Western Center on Law and Poverty
AB:AL:d 8/29/14 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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