BILL ANALYSIS
AB 338
Page 1
Date of Hearing: April 1, 2009
ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
Anna Marie Caballero, Chair
AB 338 (Ma) - As Introduced: February 18, 2009
SUBJECT : Transit village developments: infrastructure
financing.
SUMMARY : Allows local officials to divert property tax
increment revenues to pay for public facilities and amenities
within transit village development districts (TVDDs).
1)Defines "transit facility," for purposes of being an eligible
project within an infrastructure financing district (IFD) as
any publicly owned facility and amenity necessary to implement
a transit village plan.
2)Expands the parcels that shall be included in a TVDD to all
parcels located within one-half mile of the main entrance of
the transit station.
3)Specifies that an election is not required to form an IFD,
adopt an infrastructure financing plan, or issue bonds.
4)Requires, if a city, county, or city and county finances a
transit district using tax increment financing (TIF) collected
through an IFD, then the city, county, or city and county
shall do all of the following:
a) Use at least 20% of all revenues derived from the TIF to
increase, improve, and preserve the supply of lower- and
moderate-income housing available in the district at
affordable housing costs, and occupied by persons and
families of low- or moderate-income, lower- income
households, very low-income households, and extremely
low-income households;
b) Require that the housing units listed above remain
available at affordable housing cost to, and occupied by,
persons and families of low- or moderate-income and
very-low income and extremely-low income households for the
longest feasible time, but not for less than 55 years for
rental units and 45 years for owner-occupied units;
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c) Rehabilitate, develop, or construct, or cause to be
rehabilitated, developed, or constructed, for rental or
sale to persons and families of low- or moderate-income, an
equal number of replacement dwelling units that have an
equal or greater number of bedrooms as the destroyed or
removed units, at affordable housing costs within the
district, and within four years after the destruction or
removal, whenever dwelling units housing persons and
families of low- or moderate-income are destroyed or
removed from the low- and moderate-income housing market as
part of the development of a transit district that is
subject to a written agreement with the city, county, or
city and county, or when financial assistance has been
provided by the city, county, or city and county;
d) Require that the replacement dwelling units be available
at affordable housing cost to and occupied by, persons and
families in the same or a lower-income category as the
persons and families displaced from those destroyed or
removed units;
e) Include in the transit village plan, as one of the five
demonstrable public benefits, either an increased stock of
affordable housing or live-travel options for transit-needy
groups; and,
f) Include in the transit village plan provisions on how to
implement the affordable housing requirements added by this
measure.
EXISTING LAW :
1)Authorizes, under the Transit Village Development Planning Act
of 1994, a city or county to prepare a transit village plan
for a TVDD that addresses the following characteristics:
a) A neighborhood centered around a transit station that is
planned and designed so that residents, workers, shoppers,
and others find it convenient and attractive to patronize
transit;
b) Mix of housing types, including apartments, within not
more than a quarter mile of the exterior boundary of the
parcel on which the transit station is located;
c) Other land uses, including a retail district oriented to
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the transit station and civic uses, including day care
centers and libraries;
d) Pedestrian and bicycle access to the transit station,
with attractively designed and landscaped pathways;
e) A transit system that should encourage and facilitate
intermodal service, and access by modes other than single
occupant vehicles;
f) Demonstrable public benefits beyond the increase in
transit usage; and,
g) Sites where a density bonus of at least 25% may be
granted pursuant to specified performance standards.
2)Requires a transit village plan to include any five public
benefits from a list of 13 specified public benefits.
3)Authorizes cities and counties to create 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.
4)Allows an IFD to divert property tax increment revenues from
other local governments, excluding school districts, for up to
30 years, in order to pay back bonds issued by the IFD.
5)Requires that in order to form an IFD a city or county must
develop an infrastructure plan, send copies to every
landowner, consult with other local governments, and hold a
public hearing.
6)Requires that when forming an IFD, local officials must find
that its public facilities are of communitywide significance
and provide significant benefits to an area larger than the
IFD.
7)Requires that every local agency who will contribute its
property tax increment revenue to the IFD approve the plan.
8)Requires a two-thirds voter approval of the formation of the
IFD and the issuance of bonds.
9)Requires majority voter approval for setting the IFD's
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appropriations limits.
10)Specifies that public agencies that own land in a proposed
IFD may not vote on issues regarding the district.
11)Authorizes IFDs to issue a variety of debt instruments,
including bonds, certificates of participation, leases, and
loans.
FISCAL EFFECT : Unknown
COMMENTS :
1)Many local governments and transit agencies understand the
benefits of using transit-oriented development (TOD) as an
urban planning tool to help communities deal with the possible
negative impact of unrestricted growth and sprawl. Some of
these impacts include growing traffic gridlock and commuting
times, the loss of open space, and increased air and water
pollution. Working with local transit agencies, local
communities are creating strong centralized mixed-use
communities by developing TOD projects that are clustered
around train stations and bus centers. The environment and
local economies are enhanced by TOD, and the publicly
supported transit systems benefit from nearby residents and
businesses.
2)However, there are roadblocks to TOD development in the state,
including the long planning process and spiraling construction
costs. The Transit Village Development Planning Act of 1994
provides no funding mechanism to help deliver the improvements
outlined in the legislation. The reality is that TOD projects
must compete with other local priorities and a scarcity of
transportation funding.
3)According to the author, this bill helps resolve this dilemma
of transit village funding scarcity by making available a new
funding tool to communities and transit districts that choose
to pursue TOD. This bill allows local communities to use TIF
so they can finance current improvements that will create
future gains in property tax revenues. The author points out
that when a TOD project is completed there is an increase in
the value of the surrounding areas that often spurs new
investment. This increased site value and investment creates
additional taxable property that can increase incoming tax
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revenues to local communities. The increase in TIF would be
used to finance the debt issued to pay for the project. This
bill also requires that 20% of the collected TIF go towards
funding affordable housing in the transit district.
4)Previous legislation : AB 1221 (Ma) was an identical measure
passed by the Committee last year on concurrence 5-0.
However, the Governor vetoed the measure using the blanket
veto message regarding the delayed budget.
5)This bill is double-referred to the Committee on
Appropriations.
REGISTERED SUPPORT / OPPOSITION :
Support
San Francisco Bay Area Rapid Transit District [SPONSOR]
American Federation of State, County, and Municipal Employees
CA Rural Legal Assistance Foundation
Western Center on Law & Poverty
Opposition
Howard Jarvis Taxpayers Association
Analysis Prepared by : Katie Kolitsos / L. GOV. / (916)
319-3958