BILL ANALYSIS
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|SENATE RULES COMMITTEE | AB 338|
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THIRD READING
Bill No: AB 338
Author: Ma (D)
Amended: 6/25/09 in Senate
Vote: 21
SENATE LOCAL GOVERNMENT COMMITTEE : 3-2, 7/8/09
AYES: Wiggins, Kehoe, Wolk
NOES: Cox, Aanestad
ASSEMBLY FLOOR : 48-31, 6/1/09 - See last page for vote
SUBJECT : Transit village developments: infrastructure
financing
SOURCE : San Francisco Bay Area Rapid Transit District
(BART)
DIGEST : This bill allows local officials to divert
property tax increment revenues to pay for public
facilities and amenities within transit village development
districts.
ANALYSIS :
I. Infrastructure Financing Districts and Transit
Facilities . A city or county can create an
Infrastructure Financing District (IFD) and issue bonds
to pay for community scale public works: highways,
transit facilities, water systems, sewer projects, flood
control, child care facilities, libraries, parks, and
CONTINUED
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solid waste facilities. To repay the bonds, the IFD can
divert property tax increment revenues from other local
governments (but not schools, community colleges, or
county offices of education) for 30 years, but only if
the other local governments agree to the diversion.
Each IFD must have a detailed infrastructure financing
plan. State law requires two-thirds voter approval
before local officials can form an IFD and two-thirds
voter approval before local officials can issue IFD
bonds [SB 308 (Seymour), Chapter 1575, Statutes of
1990].
With respect to an IFD proposed to finance a transit
facility, this bill permits a city or county to adopt
the infrastructure financing plan, form the IFD, and
issue IFD bonds without elections.
This bill defines "transit facility" as a publicly-owned
facility and amenity needed to implement a transit
village plan adopted under the Transit Village
Development Planning Act.
II. Transit Village Plans . The Transit Village Development
Planning Act allows cities and counties to plan for more
intense development around transit stations: rail or
light-rail stations, ferry terminals, bus hubs, or bus
transfer stations. Specifically, cities and counties
can adopt transit village plans that identify areas
where local officials want to encourage transit-oriented
development and grant density bonuses, among other
characteristics [AB 3152 (Bates), Chapter 780, Statutes
of 1994]. To qualify, a transit village plan must
demonstrate five public benefits, selected from a
statutory list of 13 public benefits, including an
increased stock of affordable housing and live-travel
options for transit-needy groups [AB 1320 (Dutra),
Chapter 42, Statutes of 2004].
If a city or county finances a transit facility with an
IFD, this bill requires the transit village plan to
include, as one of its five demonstrable public
benefits, either an increased stock of affordable
housing or live-travel options for transit-needy groups.
This bill also requires the city or county to dedicate
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at least 20 percent of its property tax increment
revenue to increase, improve, and preserve housing that
is affordable to persons and families of low and
moderate incomes. Additionally, this bill requires the
city or county, within four years, to replace any
dwelling unit, on a one-to-one bedroom basis, that has
been removed or destroyed for the purpose of developing
the transit village district.
This bill also adds three new declarations to the
Transit Village Development Planning Act.
III. Transit Village Development Districts . The maximum
size of a transit village development district is the
total area within one-quarter mile from the exterior
boundary of the parcel on which the transit station is
located [AB 3152 (Bates), Chapter 780, Statutes of
1994]. A 2007 survey of rail transit riders at transit
stations in the San Francisco Bay Area and Portland,
Oregon reported that people are willing to walk one-half
mile to a rail transit station.
This bill expands the maximum size of a transit village
development district from the total area within
one-quarter mile of the exterior boundary of the parcel
on which a transit station is located to the total area
within one-half mile of the main entrance of a transit
station.
Comments
Some communities have created "transit villages" by
planning for denser residential and commercial development
within walking distance of transit stations. However,
local agencies are often hard-pressed to subsidize public
works, such as parks, lighting, and landscaping, which are
necessary to attract private investors and new businesses
and residents. The San Francisco Bay Area Rapid Transit
District (BART) wants to encourage more intense development
around its stations by linking transit village development
with property tax increment financing.
Redevelopment agencies and IFDs are legally separate
entities from the cities or counties that create them.
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Redevelopment agencies can borrow money without voter
approval by issuing tax allocation bonds that are backed by
diverting other local governments' property tax increment
revenues. IFDs' tax increment bonds are backed by
diverting property tax increment revenues from other local
governments (but not schools) that are willing to let IFDs
divert their revenues. IFDs' tax increment bonds are not
like local agencies' limited obligation bonds or local
general obligation bonds for which the California
Constitution requires two-thirds voter approval. IFDs'
bonds are more like redevelopment agencies' tax allocation
bonds. The statutory requirements for two-thirds voter
approval of IFDs and their tax increment bonds are the
result of legislative politics and compromises, not
constitutional limitations.
This bill is double-jointed with AB 1158 (Hayashi).
Related legislation . This bill is nearly identical to AB
1221 (Ma), 2007-08 Session, which passed the Assembly and
the Senate, but was vetoed by the Governor because it was
not a high priority. SB 465 (Soto), 2003-04 Session,
failed in the Senate Appropriations Committee, would have
expanded the definition of "blight" so that redevelopment
agencies could spend property tax increment revenues on
transit villages. AB 1836 (Feuer), 2007-08 Session, would
have eliminated the statutory requirement for voter
approval for creating an IFD, adopting an infrastructure
financing plan, and issuing IFD bonds. The 2008 Feuer bill
would have applied to all future IFDs, while the Ma bill
applies only to future IFDs that finance transit
facilities. The Feuer bill failed in the Senate Local
Government Committee.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 7/9/09)
San Francisco Bay Area Rapid Transit District (BART)
(source)
American Federation of State, County and Municipal
Employees, AFL-CIO
California Rural Legal Assistance Foundation
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California Transit Association
Greenbelt Alliance
Housing California
Metropolitan Transportation Commission
Non-Profit Housing Association of Northern California
Peninsula Corridor Joint Powers Board (Caltrain)
San Mateo County Transit District (SamTrans)
Santa Clara Valley Transportation Authority
Western Center on Law and Poverty
OPPOSITION : (Verified 7/9/09)
Governor's Office of Planning and Research
Howard Jarvis Taxpayers Association
ASSEMBLY FLOOR :
AYES: Ammiano, Arambula, Beall, Blumenfield, Brownley,
Buchanan, Caballero, Charles Calderon, Carter, Chesbro,
Coto, Davis, De La Torre, De Leon, Eng, Evans, Feuer,
Fong, Fuentes, Furutani, Hall, Hayashi, Hernandez, Hill,
Huffman, Jones, Krekorian, Lieu, Bonnie Lowenthal, Ma,
Mendoza, Monning, Nava, John A. Perez, V. Manuel Perez,
Portantino, Price, Ruskin, Salas, Saldana, Skinner,
Solorio, Swanson, Torlakson, Torres, Torrico, Yamada,
Bass
NOES: Adams, Anderson, Bill Berryhill, Tom Berryhill,
Blakeslee, Conway, Cook, DeVore, Duvall, Emmerson,
Fletcher, Fuller, Gaines, Galgiani, Garrick, Gilmore,
Hagman, Harkey, Huber, Jeffries, Knight, Logue, Miller,
Nestande, Niello, Nielsen, Silva, Smyth, Audra
Strickland, Tran, Villines
NO VOTE RECORDED: Block
AGB:mw 7/9/09 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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