BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 2492|
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THIRD READING
Bill No: AB 2492
Author: Alejo (D) and Eduardo Garcia (D)
Amended: 6/30/16 in Senate
Vote: 21
SENATE GOVERNANCE & FIN. COMMITTEE: 5-2, 6/15/16
AYES: Hertzberg, Beall, Hernandez, Lara, Pavley
NOES: Nguyen, Moorlach
SENATE TRANS. & HOUSING COMMITTEE: 9-2, 6/28/16
AYES: Beall, Cannella, Allen, Galgiani, Leyva, McGuire,
Mendoza, Roth, Wieckowski
NOES: Bates, Gaines
ASSEMBLY FLOOR: 51-29, 5/31/16 - See last page for vote
SUBJECT: Community revitalization
SOURCE: Author
DIGEST: This bill makes several changes to the statutes that
allow a local government to form and administer a Community
Revitalization and Reinvestment Authority (CRIA) to finance
local economic development.
ANALYSIS:
Existing law:
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1)Allows a CRIA to carry out a community revitalization plan
within a community revitalization and investment area within
which at least 80% of the land calculated by census tracts or
census block groups must be characterized by specified
conditions, including:
a) 80% of the area in a community revitalization and
investment area is characterized by an annual median
household income that is less than 80% of the annual median
income.
b) Nonseasonal unemployment in a community revitalization
and investment area that is at least 3% higher than
statewide median unemployment, as defined by a specified
report on labor market information.
c) Crime rates in a community revitalization and
investment area that are 5% higher than the statewide
median crime rate, as defined by a specified annual report
on criminal justice statistics.
2)Requires the California Environmental Protection Agency to
identify disadvantaged communities for specified purposes.
These communities must be identified based on geographic,
socioeconomic, public health, and environmental hazard
criteria, and may include either of the following:
a) Areas disproportionately affected by environmental
pollution and other hazards that can lead to negative
public health effects, exposure, or environmental
degradation.
b) Areas with concentrations of people that are of low
income, high unemployment, low levels of homeownership,
high rent burden, sensitive populations, or low levels of
educational attainment.
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3)Allows an enhanced infrastructure financing district (EIFD) to
receive, in addition to tax increment revenues, other sources
of revenues that can be used to finance economic development,
including:
a) A specified share of property tax revenues, defined in
state law as "net available revenue," that a city, county,
or special district receives pursuant to the statutes
governing the dissolution of redevelopment agencies (RDAs);
b) Property taxes received by a city or county in lieu of
former vehicle license fee funds; or
c) Revenues that local governments receive pursuant to
specified statutes authorizing local governments to impose
assessments, parcel taxes, and other charges for specified
purposes.
This bill:
1)Allows the use of a combination of census tracts and census
block groups to calculate whether 80% of the area within a
revitalization and investment area is characterized by
specified conditions.
2)Specifies that CRIA officials can make the annual median
household income calculation using statewide, countywide, or
citywide annual median income.
3)Specifies that the unemployment condition for forming a
revitalization and investment area requires an unemployment
rate that is at least three percentage points higher than the
statewide average annual unemployment rate.
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4)Allows a CRIA to use unemployment data from the periodic
American Community Survey published by the United States
Census Bureau in determining the unemployment rate within the
community revitalization and investment area.
5)Specifies that the crime rate condition for forming a
revitalization and investment area requires crime rates, as
documented by records maintained by the law enforcement agency
that has jurisdiction in the proposed plan area for violent or
property crime offenses, that are at least 5% higher than the
statewide average crime rate for violent or property crime
offenses.
6)Specifies the manner in which the crime rate must be
calculated and allows a community revitalization and
investment area to meet this condition if the local crime rate
for the proposed plan area exceeds the statewide average rate
for either violent or property crime, or any offense within
these categories, by more than 5%.
7)Allows a community revitalization and investment area to be
formed if the census tracts or census block groups, as defined
by the United States Census Bureau, within the area are
situated within a disadvantaged community as described in
state law.
8)Gives CRIAs the same authority that state law grants to EIFDs
to use specified additional revenue sources.
9)Makes several other clarifying and conforming changes to state
law.
Background
From the early 1950s until they were dissolved in 2011,
California RDAs used property tax revenues generated by growth
in the assessed value of properties in a project area - commonly
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known as tax increment revenues - to finance their redevelopment
activities. RDAs' dissolution deprived many local governments
of the primary tool they used to eliminate physical and economic
blight, finance new construction, improve public infrastructure,
rehabilitate existing buildings, and increase the supply of
affordable housing.
In response to RDAs' dissolution, the Legislature authorized
local governments to form new types of tax increment financing
districts to finance local economic development activities:
State law allows local government officials to create an EIFD,
which is governed by a public finance authority, and use
property tax increment revenues to finance public capital
facilities or other specified projects of communitywide
significance that provide significant benefits to the district
or the surrounding community (SB 628, Beall, Chapter 785,
Statutes of 2014).
State law allows local government officials to establish a
CRIA and use property tax increment revenues to finance the
implementation of a community revitalization plan within a
community revitalization and investment area (AB 2, Alejo,
Chapter 319, Statutes of 2015).
Local officials who are beginning to implement the statutes
governing CRIAs want the Legislature to clarify some provisions
in those statutes and allow CRIAs to use some additional
financing powers that state law already grants to EIFDs.
Comments
Purpose of the bill. This bill will help local officials'
efforts to implement the provisions of law enacted by last
year's AB 2 (Alejo). As communities begin to form CRIAs, they
are seeking some clarifications of ambiguous language in last
year's bill. In particular, AB 2 left some unanswered questions
about the data sources that can be used to determine some
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criteria that must be fulfilled to form a community
revitalization and investment area. Clarifying these statutory
provisions will benefit California residents by helping local
officials use CRIAs to build more affordable housing, eliminate
blight, foster business activity, clean up contaminated
brownfields, and create jobs.
Eminent domain. One tool that state law grants to CRIAs that is
not available through an EIFD is the power to take private
property through the power of eminent domain and to pay for it
using tax increment revenues. Some property owners object to
the way in which former RDAs used their eminent domain
authority, arguing that RDAs' use of eminent domain hurt
businesses and depressed property values in some communities.
They oppose this bill due to concern that the bill will expand
the types of communities and neighborhoods in which local
governments can exercise the power of eminent domain for
economic development purposes by forming a CRIA.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:NoLocal: No
SUPPORT: (Verified7/6/16)
California Association for Local Economic Development
California Business Properties Association
City of Cudahy
City of Fountain Valley
City of Hollister
City of San Diego
City of Thousand Oaks
Hollister Downtown Association
League of California Cities
OPPOSITION: (Verified7/6/16)
California Alliance to Protect Property Rights
Fieldstead and Company
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Howard Jarvis Taxpayers Association
ARGUMENTS IN SUPPORT: Supporters argue that this bill will help
local officials use CRIAs to build more affordable housing,
eliminate blight, foster business activity, clean up
contaminated brownfields, and create jobs.
ARGUMENTS IN OPPOSITION: Opponents argue that this bill will
expand the types of communities and neighborhoods in which local
governments can exercise the power of eminent domain for
economic development purposes by forming a CRIA.
ASSEMBLY FLOOR: 51-29, 5/31/16
AYES: Alejo, Arambula, Atkins, Bloom, Bonilla, Bonta, Brown,
Burke, Calderon, Campos, Chau, Chiu, Chu, Cooley, Cooper,
Dababneh, Daly, Dodd, Eggman, Frazier, Cristina Garcia,
Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Roger
Hernández, Holden, Irwin, Jones-Sawyer, Levine, Lopez, Low,
McCarty, Medina, Mullin, Nazarian, O'Donnell, Quirk,
Ridley-Thomas, Rodriguez, Salas, Santiago, Mark Stone,
Thurmond, Ting, Weber, Williams, Wood, Rendon
NOES: Achadjian, Travis Allen, Baker, Bigelow, Brough, Chang,
Chávez, Dahle, Beth Gaines, Gallagher, Gray, Grove, Hadley,
Harper, Jones, Kim, Lackey, Linder, Maienschein, Mathis,
Mayes, Melendez, Obernolte, Olsen, Patterson, Steinorth,
Wagner, Waldron, Wilk
Prepared by:Brian Weinberger / GOV. & F. / (916) 651-4119
7/29/16 10:43:31
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