BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 313|
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THIRD READING
Bill No: AB 313
Author: Atkins (D)
Amended: 8/25/15 in Senate
Vote: 21
SENATE GOVERNANCE & FIN. COMMITTEE: 7-0, 7/8/15
AYES: Hertzberg, Nguyen, Beall, Hernandez, Lara, Moorlach,
Pavley
SENATE TRANS. & HOUSING COMMITTEE: 11-0, 7/14/15
AYES: Beall, Cannella, Allen, Bates, Gaines, Galgiani, Leyva,
McGuire, Mendoza, Roth, Wieckowski
ASSEMBLY FLOOR: 78-0, 5/14/15 (Consent) - See last page for
vote
SUBJECT: Enhanced infrastructure financing districts
SOURCE: Author
DIGEST: This bill makes several changes to the statutes
governing enhanced infrastructure financing districts (EIFDs).
Senate Floor Amendments of 8/25/15 clarify the conditions under
which an EIFD must comply with statutory requirements related to
replacing dwelling units that are removed or destroyed within
the EIFD's area and make technical changes to avoid potential
"chaptering-out" conflicts with SB 63 (Hall, 2015).
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ANALYSIS:
Existing law:
1) Allows 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
facilities, libraries, parks, and solid waste facilities.
(SB 308, Seymour, Chapter 1575, Statutes of 1990).
2) Allows IFDs to repay bonds by diverting property tax
increment revenues, which are revenues generated from
increases in property values within the IFD above property
values in the base-year when the IFD was formed. However,
IFDs can't divert property tax increment revenues from
schools.
3) Allows local officials to create EIFDs, which augment the
tax increment financing powers available to local government
under the IFD statutes (SB 628, Beall, Chapter 785, Statutes
of 2014). City or county officials can create an EIFD, which
is governed by a public finance authority, to finance public
capital facilities or other specified projects of
communitywide significance that provide significant benefits
to the district or the surrounding community.
4) Requires that if dwelling units are to be destroyed by
private development or public works construction within an
EIFD, the district's adopted infrastructure financing plan
must contain specified requirements for the replacement of
the dwelling units.
5) Requires that a plan must provide for relocation assistance,
and specified payments required by state law, to persons
displaced by public or private development within the EIFD.
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6) Requires that an EIFD's replacement affordable housing units
must remain available as affordable units for specified
minimum time periods.
7) Specifies the process by which a city or county must begin
the process of forming an EIFD.
8) Requires that a public financing authority's membership must
be comprised of a specified combination of public members and
members from the legislative body of a participating affected
taxing entity or entities.
9) Allows an EIFD to use the Polanco Redevelopment Act's (AB
3193, Polanco, Chapter 1113, Statutes of 1990) powers to
abate toxic hazards and obtain immunity from liability.
10)Specifies how a public financing authority can submit to
voters a proposition to establish or change an EIFD's
appropriations limit.
11)Specifies the manner in which a party may bring an action to
determine the validity of the division of taxes under the
EIFD statutes.
This bill:
1) Modifies several provisions of existing EIFD law that
require an infrastructure financing plans to address
specified policies relating to affordable housing.
Specifically, this bill:
a) Requires the infrastructure financing plan to contain
specified requirements for the replacement of all dwelling
units to be removed or destroyed that are or were
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inhabited by persons or families of very low-, low-, or
moderate-income, as defined, at any time within five years
prior to establishment of the EIFD. Also imposes
requirements for the replacement of at least 25% of
dwelling units to be removed or destroyed that were not
inhabited by persons or families of very low-, low-, or
moderate-income, as defined, at any time within five years
prior to establishment of the EIFD.
b) Requires that a plan must fully comply with all
requirements of specified statutes relating to relocation
assistance for persons displaced from dwelling units by
any public or private action occurring as the result of
the plan.
c) Requires that a plan must both:
i) Contain provisions relating to the manner in
which an EIFD must require that all dwelling units
constructed or rehabilitated must remain available at
affordable rent or housing cost to, and occupied by,
households in specified income categories for the
longest feasible time, but for not less than 55 years
for rental units and 45 years for owner-occupied units.
ii) Allow an EIFD to 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 EIFD's investment of moneys in the unit or units,
including an equity sharing program, not in conflict
with another public funding 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.
d) Applies the EIFD statutes' replacement housing
requirements to any dwelling units that are proposed to be
removed or destroyed in the course of public works
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construction within the EIFD's area or private development
within the EIFD's area that is subject to a written
agreement with the EIFD or that is financed in whole or in
part by the EIFD.
2) Requires that a city or county must establish a public
financing authority at the same time that it adopts a
resolution of intention to form an EIFD and amends state law
to clarify that the public financing authority, and not the
city council or board of supervisors that created it, is
responsible for performing specified actions as part of the
EIFD formation process, including:
a) Designating and directing an official to prepare an
infrastructure financing plan.
b) Conducting a publicly-noticed hearing on a proposed
infrastructure financing plan.
c) Adopting an infrastructure financing plan and forming
an EIFD.
3) Clarifies that a special district, as defined, can be
considered an affected taxing entity if it is providing any
portion of the funding included in an EIFD's adopted
infrastructure financing plan.
4) Clarifies, in several sections of EIFD law, that statutory
provisions relating to housing for low- or moderate-income
households also apply to very-low income households, as
defined.
5) Clarifies that an EIFD can use powers granted by a specified
statute that allows local governments to remedy or remove
releases of hazardous substances using tools that are
substantially the same as those available under the Polanco
Act.
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6) Replaces an existing statute governing an EIFD's
appropriations limit with language declaring that specified
property tax increment revenues allocated to an EIFD must not
be deemed "proceeds of taxes" and are not subject to the
appropriations limits in Article XIII B of the California
Constitution.
7) Repeals language that exempted a validation action relating
to the division of taxes under EIFD statutes from being
subject to a specified statute in the Code of Civil
Procedure.
8) Makes additional clarifying and conforming changes to the
statutes governing EIFDs.
Background
Last year, the Legislature enacted SB 628 (Beall) to allow local
officials to create EIFDs, which augment the tax increment
financing powers available to local government under the IFD
statutes. City or county officials can create an EIFD, which is
governed by a public finance authority, to finance public
capital facilities or other specified projects of communitywide
significance that provide significant benefits to the district
or the surrounding community.
Local officials and other stakeholders have identified changes
and clarifications to the statutes enacted by SB 628 that will
help local governments implement the EIFD law's provisions.
Specifically, as local officials begin to implement last year's
EIFD law, they are seeking some clarification of provisions
related to replacement housing, the public financing authority's
separate legal standing, and a few other related issues. The
changes that AB 313 makes to the state laws governing EIFDs 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 those of a similar type of units and available to
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residents of the same income levels as before. AB 313 also
clarifies the process for forming an EIFD through an independent
financing authority that is legally separate from the city or
county. Overall, this bill's provisions will help to facilitate
the use of EIFD financing in communities throughout California.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:NoLocal: No
SUPPORT: (Verified8/26/15)
California Association for Local Economic Development
California Economic Summit
California Equity Leaders Network
California Forward Action Fund
California Rural Legal Assistance Foundation
Housing California
League of California Cities
Los Angeles County Business Federation
San Diego Housing Federation
Western Center on Law and Poverty
OPPOSITION: (Verified8/26/15)
None received
ASSEMBLY FLOOR: 78-0, 5/14/15
AYES: Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom,
Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang,
Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle,
Daly, Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina
Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez,
Gordon, Gray, Grove, Hadley, Harper, Roger Hernández, Holden,
Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Lopez, Low,
AB 313
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Maienschein, Mathis, Mayes, McCarty, Melendez, Mullin,
Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Perea,
Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago,
Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber,
Wilk, Williams, Wood, Atkins
NO VOTE RECORDED: Linder, Medina
Prepared by:Brian Weinberger / GOV. & F. / (916) 651-4119
8/26/15 12:21:26
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