BILL ANALYSIS Ó
AB 2492
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CONCURRENCE IN SENATE AMENDMENTS
AB
2492 (Alejo and Eduardo Garcia)
As Amended June 30, 2016
Majority vote
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|ASSEMBLY: | | (May 31, |SENATE: | |(August 15, |
| |51-29 |2016) | |28-10 |2016) |
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Original Committee Reference: H. & C.D.
SUMMARY: Makes changes to allow greater flexibility for the
creation community revitalization and investment authorities
(CRIA) and allows a CRIA to receive funding from the same
sources as an enhanced infrastructure financing district (EIFD).
The Senate amendments allow a CRIA to be established within a
"disadvantaged community" as described in Health and Safety Code
Section 39711.
FISCAL EFFECT: None
COMMENTS: Last year, AB 2 (Alejo), Chapter 319, Statues of
2015, authorized cities and counties to created CRIAs to use tax
increment revenue to improve the infrastructure, assist
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businesses, and support affordable housing in disadvantaged
communities. A CRIA can freeze the property taxes at the time
the plan for revitalizing the area is approved, collect all the
tax increment or the increase in property taxes that is
generated after that point and use it on specified activities.
Unlike redevelopment agencies, the taxing entities in the area
including the county, city, special districts, or a military
base must agree to divert tax increment to the CRIA. Local
government entities that initially participate can opt out by
giving the auditor-controller 60 days' notice; however, the
auditor controller will continue to collect the local government
entities' portions of tax increment until any debts issued up
until then have been repaid. No portion of the local schools'
share of tax increment may go to the authority. CRIA's must
set-aside 25% of revenues for affordable housing and must
replace any existing affordable housing units that are removed
as a result of their activities.
A CRIA may only be created in areas which are predominately
low-income and have a high unemployment and crime rate. At
least 80% of a CRIA project area, based on United States (U.S.)
Census data must have an annual median household income that is
less than 80% of the statewide annual median income. In
addition, a CRIA must meet three of the four following
conditions:
1) The nonseasonal unemployment must be at least 3% higher
than the statewide median, as defined by a specified labor
market report;
2) The crime rate must be 5% higher than the statewide
median crime rate, as defined by a specified Department of
Justice report;
3) There must be deteriorated or inadequate infrastructure
such as streets, sidewalks, water supply, sewer treatment
or processing, and parks; and
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4) There must be deteriorated commercial or residential
structures.
According to the sponsor, the League of California Cities, this
bill is intended to clarify where CRIAs can be formed. The
sponsor worked with the Employment Development Department (EDD)
to update the mechanism for determining the unemployment rate
and the Department of Justice (DOJ) to revise the means of
determining the crime rate necessary to meet the standard to
qualify an area as a CRIA.
To establish a CRIA a city or county must determine that at
least 80% of the project area has an annual median income that
is less than 80% of the statewide average as determined by the
U.S. Census. This bill would give a city or county the option
of using the statewide average or the citywide or countywide
average. This change provides a more precise standard and could
have the effect of expanding the area that could be included in
a CRIA. To establish a CRIA a city or county must also
establish that 80% of the project area meets three of four
conditions: high unemployment, high crime rate, deteriorated
infrastructure, or deteriorated commercial or residential
structures.
In calculating the unemployment rate, in addition to using the
EDD's annual update, the city or county can rely upon the U.S.
Census Data's American Community Survey. The American Community
Survey is a survey conducted by the U.S. Census Bureau. Unlike
the every-10-year census, this survey continues all year, every
year. The Survey is conducted by randomly sampling addresses in
every state, the District of Columbia, and Puerto Rico. Answers
are collected to form up-to-date statistics used by many
federal, state, tribal, and local leaders. To determine the
crime rate for a CRIA project area, existing law require a city
or county to use the statewide median crime rate as determined
by the Criminal Justice Statistics Center within DOJ, when data
is available on the California Attorney General's Internet Web
site. This bill would require a city or county to compare the
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local data for violent or property crime offenses and compare
that against the statewide average.
Access to additional resources: 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 EIFD law, the public capital facilities or other
projects of 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.
The city or county that creates an EIFD can choose to transfer
its portion of increased property tax revenues as a result of
redevelopment dissolution, property taxes received by the city
or county in lieu of former vehicle license fee funds, and funds
from various assessments that a special district imposes. This
bill allows a CRIA to also receive funds from these sources if a
city, county, or special district chooses to transfer them.
Prior Legislation:
AB 2 (Alejo) Chapter 319, Statues of 2015, authorized local
governments to create CRIA to use tax increment revenue to
improve the infrastructure, assist businesses, and support
affordable housing in disadvantaged communities.
SB 628 (Beall), Chapter 785, Statutes of 2014, allowed local
agencies to create EIFDs to finance specified infrastructure
projects and facilities.
Analysis Prepared by:
Lisa Engel / H. & C.D. / (961) 319-2085 FN:
0003660
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