BILL ANALYSIS                                                                                                                                                                                                    



                                                                            



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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

                                   ****  END  ****







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