BILL ANALYSIS Ó
SENATE COMMITTEE ON TRANSPORTATION AND HOUSING
Senator Jim Beall, Chair
2015 - 2016 Regular
Bill No: AB 313 Hearing Date: 7/14/2015
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|Author: |Atkins |
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|Version: |6/30/2015 |
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|Urgency: |No |Fiscal: |No |
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|Consultant|Alison Dinmore |
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SUBJECT: Enhanced infrastructure financing districts
DIGEST: This bill clarifies procedures for replacing dwelling
units that are removed or destroyed within an Enhanced
Infrastructure Financing District (EIFD) and makes other
technical changes to EIFD law.
ANALYSIS:
Existing law:
1)Allows cities or county officials to create EIFDs, which are
governed by a public finance authority, to finance public
capital facilities or other specified projects of
community-wide significance that provide significant benefits
to the district or the surrounding community.
2)Specifies the requirements of the EIFD authority membership
and requires an EIFD authority to be formed prior to adopting
a infrastructure financing plan.
3)Specifies the components of an infrastructure financing plan
and the public hearing process for adopting the plan.
Existing law also permits an infrastructure financing plan to
contain a provision requiring that property tax increment
revenues from specified taxes levied by the city or county
that formed the EIFD, and any other affected taxing entity
that has agreed to participate, must be divided in a specified
manner and allocated to an EIFD.
AB 313 (Atkins) Page 2 of ?
4)Permits the EIFD authority to initiate proceedings to issue
bonds by adopting a resolution stating its intent to issue the
bonds. Bonds may be issued only if 55% of the voters who
reside within the district vote in favor of issuing the bonds.
5)Specifies that an EIFD may finance: the purchase,
construction, expansion, improvement, seismic retrofit, or
rehabilitation of any real or tangible property with an
estimated useful life of 15 years or longer; planning and
design work; and the costs associated with the replacement of
existing dwelling units for persons of low- and
moderate-income, as well as relocation assistance for persons
displaced by development of dwelling units in the district.
6)Specifies that the EIFD shall finance only public capital
facilities or other specified projects of community-wide
significance that provide significant benefits to the district
or the surrounding community, including but not limited to:
highways, interchanges, ramps and bridges, and transit
facilities; sewage treatment and water reclamation plans;
flood control levees and dams; child-care facilities;
libraries; parks; brownfield restoration and other
environmental mitigation; and projects that implement a
sustainable communities strategy.
7)Authorizes the EIFD to finance mixed-income housing
developments, but may finance only those units that are
restricted to occupancy by persons of low or moderate incomes
and those onsite facilities for child care, after-school care,
and social services that are integrally linked to the tenants
of the restricted units.
8)States the intent of the legislature to be that the creation
of EIFDs should not lead to the removal of existing units, but
that if units are proposed to be removed or destroyed in the
course of development or public works construction in the
EIFD, the infrastructure financing plan shall contain the
following provisions:
a) Within two years of the removal or destruction, cause or
require the construction or rehabilitation, for rent or
sale to persons or families of low or moderate income, of
an equal number of replacement dwelling units at
AB 313 (Atkins) Page 3 of ?
affordable-housing costs within the territory of the EIFD
if the dwelling units removed were inhabited by persons of
low or moderate income.
b) Within two years of the removal or destruction, cause or
require the construction or rehabilitation, for rent or
sale to persons of low or moderate income, a number of
dwelling units that is at least one unit but not less than
25% of the total dwelling units removed at
affordable-housing costs within the EIFD, if the dwelling
units removed or destroyed were not inhabited by persons of
low or moderate income.
c) Provide relocation assistance and make payments to
persons displaced by any public or private development
occurring within the territory of the EIFD. This
displacement shall be deemed to be the result of public
action.
d) Ensure that removal or destruction of any dwelling unit
occupied by persons or families of low or moderate income
not take place unless and until there are suitable housing
units at comparable costs to the units from which the
persons or families were displaced, available and ready for
occupancy by the residents of the units at the time of
their displacement.
e) Requires the EIFD, by recorded covenants or
restrictions, to require housing units built pursuant to
this section to remain at affordable-housing costs to, and
occupied by, persons and families of low- or
moderate-income households for the longest feasible time,
but not less than 55 years for rental units and 45 for
owner-occupied units.
This bill:
1)Makes changes to EIFD law relating to the removal of existing
dwelling units, and requires the infrastructure financing plan
to contain provisions to do all of the following:
a) If dwelling units to be removed or destroyed are or were
inhabited by persons of very low, low, or moderate income
at any time within five years prior to the establishment of
the EIFD, the infrastructure financing plan shall require
AB 313 (Atkins) Page 4 of ?
the construction or rehabilitation of an equal number of
replacement dwelling units, within one-half mile of the
location of the units to be removed or destroyed, that have
an equal or greater number of bedrooms as those removed or
destroyed units, within two years of the removal or
destruction of the dwelling units. The replacement units
shall be available for rent or sale to persons or families
of very low, low, or moderate income at affordable rent, or
at affordable-housing costs to persons in the same or a
lower income category as the persons displaced from, or who
last occupied, the removed or destroyed dwelling units.
b) If the dwelling units to be removed or destroyed were
not inhabited by persons of low or moderate income at any
time within five years prior to the establishment of the
EIFD, the infrastructure financing plan shall require the
construction or rehabilitation, within one-half mile of the
location of the units to be removed or destroyed, of at
least one unit but not less than 25% of the total dwelling
units removed or destroyed within two years of the removal
or destruction of the dwelling units. The units
constructed or rehabilitated shall be of equivalent size
and type to the units to be removed or destroyed. An equal
percentage of the replacement dwelling units constructed or
rehabilitated shall be available for rent or sale at
affordable rent to extremely low- and very low-income
persons or families.
c) Comply with all relocation assistance requirements for
persons displaced from dwelling units by any public or
private action occurring as a result of the infrastructure
financing plan. The displacement of any persons from a
dwelling unit as a result of the plan shall be deemed to be
the result of public action.
d) Ensure that removal or destruction of any dwelling units
occupied by persons or families of low or moderate income
not take place unless and until there has been full
compliance with the relocation assistance requirements.
e) The EIFD shall require, by recorded covenants or
restrictions, all dwelling units constructed or
rehabilitated to remain available at affordable rent or
housing costs to, and occupied by, persons and families of
applicable income categories, for the longest feasible
time, but not less than 55 years for rental units, and 45
AB 313 (Atkins) Page 5 of ?
years for owner-occupied units.
f) The EIFD may permit sales of owner-occupied units prior
to the expiration of the 45-year period for a price in
excess of that otherwise permitted pursuant to an adopted
program, which protects the EIFDs investment of money in
the unit or units, including, but not limited to, an
equity-sharing program, not in conflict with another public
financing source or law, which establishes a schedule of
equity sharing that permits retention by the seller of a
portion of those excess proceeds based on the length of
occupancy.
1)Specifies that after adopting a resolution establishing an
EIFD, the legislative body shall send a copy of the resolution
to the public financing authority. The public financing
authority shall designate and direct the city or county
engineer or other appropriate official to prepare an
infrastructure plan.
2)Specifies that at the end of a public hearing reviewing the
infrastructure plan, the public authority may adopt a
resolution proposing adoption of the infrastructure financing
plan, as modified, and the formation of the EIFD, or it may
adopt a resolution abandoning the proceedings. If the
proceedings are abandoned, the public financing authority
shall cease to exist operation, with no further action
required of the legislative body. The legislative body may
not enact a resolution of intention to establish a district
that includes the same geographic area within one year of the
date of the resolution abandoning the proceedings.
3)Repeals a section in EIFD law that allows the public financing
authority to submit a proposition to establish or change the
appropriations limit of an EIFD, and adds a new section that
specifies that the allocation and payment to an EIFD of the
portion of taxes, as specified, for the purpose of paying
principal of, or interest on, loans, advances, or indebtedness
incurred by the EIFD pursuant to EIFD law, shall not be deemed
the receipt by an EIFD of proceeds of taxes levied by or on
behalf of the EIFD within the meaning of the purposes of
Article XIII B of the California Constitution, nor shall that
portion of taxes be deemed receipts of proceeds of taxes by,
or an appropriation subject to limitation of, any other public
body within the meaning or for purposes of Article XIII B of
AB 313 (Atkins) Page 6 of ?
the California Constitution or any statutory provision enacted
in implementation of Article XIII B of the California
Constitution.
4)Clarifies that "affected taxing entity" may include a special
district if the special district is providing any portion of
the funding included in the infrastructure financing plan.
"Special district" means an agency of the state formed for the
performance of governmental or proprietary functions within
limited geographic boundaries, and shall not include a school
district or community college district.
5)Clarifies, in several sections of EIFD law, that provisions
relating to persons of low- or moderate-income households also
apply to very-low-income households.
6)Clarifies in several sections of EIFD law that it is the
public financing authority, instead of the legislative body,
that must take specified actions to ensure that a public
financing authority is separate and apart from the legislative
body that created the EIFD.
7)Makes other technical and conforming changes.
COMMENTS:
1)Purpose of the bill. According to the author, SB 628 (Beall,
Chapter 785, Statutes of 2014) required some clarification to
the provisions related to housing and a few other related
issues. This bill provides the clarity needed relating to
replacement housing, provides that the EIFD is a separate
legal structure, and ensures that when local governments
utilize EIFDs, the administrative and implementation
requirements are clear. Moreover, this bill will ensure that
any residents that are displaced by work done in an EIFD will
receive adequate support and that any units lost will be
replaced by a similar type of unit and available to residents
of the same income levels. This bill will also allow special
districts to be considered affected taxing entities and
participate in the EIFD process if they contribute other
financial resources towards a project, if they do not have the
ability to contribute property.
2)Background on EIFDs. SB 628 allowed a city or county to
create an EIFD to finance specified facilities and
AB 313 (Atkins) Page 7 of ?
infrastructure projects using tax increment. SB 628 expanded
upon existing infrastructure financing district (IFD) law and
the types of public capital facilities or other projects of
communitywide significance that could be financed by an EIFD.
This expansion includes: brownfield restoration and other
environmental mitigation; the development of projects on a
former military base; transit priority projects; and projects
that implement a sustainable communities strategy, among other
infrastructure projects.
SB 628 sets forth the procedures for the creation of an EIFD
through a city or county resolution and procedures and process
for public participation in the creation of the infrastructure
financing plan. If the EIFD seeks to incur bond indebtedness,
SB 628 specifies that 55% approval of the voters in the EIFD
is required and sets forth the procedures for conducting the
election.
3)Housing Provisions. SB 628 allows EIFDs to finance housing
for low- and moderate-income households and requires EIFDs to
replace low- and moderate-income housing that is removed or
destroyed. This bill clarifies that if any units proposed to
be removed or destroyed in the course of development in the
EIFD, the infrastructure financing plan must contain
provisions to assist low-income families to relocate and
ensure that no destruction or removal shall occur until there
is a plan in place to provide replacement housing and
relocation of displaced families.
More specifically, if the removed units are inhabited by very
low-, low-, or moderate-income persons, an equal number of
replacement units and equal number of bedrooms must be
constructed or rehabilitated within one-half mile of the units
that were destroyed or removed, and must occur within two
years. If the units were not inhabited by low- or
moderate-income persons, at least one unit but not less than
25% of the total units removed must be constructed or
rehabilitated within one-half mile of the location of the
units that were destroyed or removed and must occur within two
years. The units constructed must be of an equivalent size
and type as those destroyed and an equal percentage of
replacement units must be available for rent or sale at
affordable rent to extremely low- and very low-income persons.
Additionally, all units constructed or rehabilitated must
remain affordable for the longest time feasible, but not less
AB 313 (Atkins) Page 8 of ?
than 55 years for rental units and 45 years for owner-occupied
units. This bill further clarifies that these provisions
apply to very low-, low-, and moderate-income families. These
clarifications ensure that no persons or families are
displaced or unable to find housing as a result of the
destruction or removal of a dwelling unit in an EIFD. Those
that lose their housing will be assured replacement housing
for up to two years and will receive support in the moving
process.
4)Double-referred. This bill was heard by the Governance and
Finance Committee on July 8, 2015 and approved 7-0.
Assembly Votes:
Floor: 78-0
LGov: 9-0
Related Legislation:
AB 2 (Alejo, 2015) - allows local governments to form Community
Revitalization and Investment Authorities to administer economic
development and affordable housing programs. This bill is also
being heard today by this committee.
SB 628 (Beall, Chapter 785, Statutes of 2014) - allows local
agencies to create EIFDs to fund specified infrastructure
projects and facilities.
FISCAL EFFECT: Appropriation: No Fiscal Com.: No Local:
No
POSITIONS: (Communicated to the committee before noon on
Wednesday,
July 8, 2015.)
SUPPORT:
California Association for Local Economic Development
California Equity Leaders Network
California Forward Action Fund
California Rural Legal Assistance Foundation
Housing California
League of California Cities
Western Center on Law and Poverty
AB 313 (Atkins) Page 9 of ?
OPPOSITION:
None received -- END --