BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                     AB 313


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          CONCURRENCE IN SENATE AMENDMENTS


          AB  
          313 (Atkins)


          As Amended  August 25, 2015


          Majority vote


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          Original Committee Reference:  L. GOV.


          SUMMARY:  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.  


          The Senate amendments:


          1)Clarify that an "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, and  
            define, for purposes of the bill, the term "special district"  
            to mean 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.









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          2)Clarify that the legislative body shall ensure that the public  
            financing authority is established at the same time that it  
            adopts a resolution of intention, as specified.


          3)Clarify that if dwelling units are proposed to be removed or  
            destroyed in the course of public works construction within  
            the area of the EIFD or private development within the area of  
            the EIFD that is subject to a written agreement with the EIFD  
            or that is financed in whole or in part of the EIFD, then the  
            infrastructure financing plan shall contain specified  
            provisions pursuant to the bill's provisions.


          4)Contain chaptering out amendments to resolve conflicts with SB  
            63 (Hall) of the current legislative session.


          5)Make other minor, technical corrections.


          FISCAL EFFECT:  None


          COMMENTS:  


          1)Bill Summary.  This bill adds provisions to EIFD law to  
            clarify the procedures for replacing dwelling units that are  
            removed or destroyed within an EIFD, and makes a number of  
            other technical and clarifying changes to update EIFD law.


            This bill is author-sponsored.


          2)Background on EIFDs.  SB 628 (Beall), Chapter, 785, Statutes  
            of 2014, allowed a city or county to create an EIFD, in order  
            to finance specified facilities and infrastructure projects,  
            using tax increment.  SB 628 expanded, as compared to existing  
            IFD law, the public capital facilities or other projects of  








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            communitywide significance that could be financed by an EIFD,  
            to include 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.  Once formed, the governing board of the EIFD  
            (referred to as the public financing authority), would be  
            subject to provisions of the Ralph M. Brown Act, the  
            California Public Records Act, the Political Reform Act of  
            1974, and the members of the public financing authority would  
            be subject to ethics training.
            In order to create the EIFD, pursuant to SB 628, the  
            legislative body of the city or county must adopt a resolution  
            of intention to establish the proposed district, and mail a  
            copy of that resolution to each owner of land within the EIFD,  
            and fix a time and a place for a public hearing on the  
            proposal.  After adopting the resolution of intention to  
            establish the EIFD, the city or county engineer or other  
            appropriate official must develop an infrastructure financing  
            plan to describe the public facilities, funding, an analysis  
            of costs of the facilities, and the goals the EIFD hopes to  
            achieve, among other requirements.  A designated official is  
            required to consult with each affected taxing entity, and any  
            affected taxing entity may suggest revisions to the  
            infrastructure financing plan. 


            SB 628 required that this infrastructure financing plan be  
            sent to each owner of land and to each affected taxing entity  
            in the boundaries of the proposed EIFD.  The legislative body  
            is required to conduct a public hearing prior to adopting the  
            proposed infrastructure financing plan, after giving notice of  
            the hearing.  SB 628 prohibited the legislative body from  
            enacting a resolution proposing the formation of the 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.


            SB 628 allowed for the formation of the EIFD upon the  
            legislative body's adoption of the resolution, at which point  








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            the infrastructure financing plan would take effect.  If the  
            EIFD wishes to incur bonded indebtedness, the bill specifies  
            that a 55% vote of the voters in the EIFD is necessary, and  
            prescribes the contents of the resolution that must be adopted  
            by the public financing authority once voters approve the bond  
            debt.  An EIFD must contract for an independent financial and  
            performance audit every two years after the issuance of debt,  
            and must be provided to the Controller, the Department of  
            Finance (DOF), and to the Joint Legislative Budget Committee.   
            SB 628 provided that an EIFD will cease to exist not 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.


            The provisions of SB 628 prohibited a city or county that  
            created a redevelopment agency (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 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, 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; 


            c) The office of the 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, as specified in  
            3) above.










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          3)Author's Statement.  According to the author, "Existing law,  
            created by SB 628 (Beall), Chapter 785, Statutes of 2014,  
            allows local agencies to create enhanced infrastructure  
            financing districts (EIFDs) to fund specified infrastructure  
            projects and facilities.  SB 628, among other things:  a)  
            Created a "public financing authority" to govern the EIFD; b)  
            Specified that housing paid for by the EIFD must be for low  
            and moderate income housing; and, c) Required that housing  
            that is replacing units torn down during the course of work  
            done by an EIFD must be done within two years after demolition  
            and if none of the units removed were for affordable housing  
            then replacement work must increase the number of replacement  
            units with at least 25% affordable.


            "However, after further review of the language, it was found  
            that some clarification of the provisions related to  
            replacement housing and a few other related issues were  
            necessary.  Also, ensuring that the EIFD public financing  
            authority has its own separate legal standing and spending  
            capacity requires more clarity as well.


            "AB 313 provides the clarity needed in both of these issue  
            areas and ensures that when this tool is used by local  
            governments, the implementation requirements are clear.   
            Moreover, AB 313 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 residents of the same  
            income levels as before."


          4)Arguments in Support.  Supporters argue that this bill will  
            ensure that, should any housing be affected by the activities  
            of an EIFD, relocation and replacement housing obligations  
            would apply to protect lower-income households from  
            displacement.


          5)Arguments in Opposition.  None on file.









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          Analysis Prepared by:                                             
                          Debbie Michel / L. GOV. / (916) 319-3958  FN:  
          0001585