BILL ANALYSIS
AB 2642
Page 1
Date of Hearing: May 5, 2010
ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
Cameron Smyth, Chair
AB 2642 (Nestande) - As Amended: April 26, 2010
SUBJECT : Infrastructure financing: County of Riverside: medical
school facilities.
SUMMARY : Authorizes the City of Riverside (City) to form an
infrastructure financing district (IFD) for the purposes of
funding the construction of medical school facilities for
University of California, Riverside (UCR), as specified.
Specifically, this bill :
1)Authorizes the City to form an IFD on City property that is
adjacent to the campus of the UCR, for the purpose of funding
construction of facilities to establish a medical school at
the campus.
2)Requires the City, if it forms an IFD, to enter into an
agreement, which may be a joint exercise of powers agreement
(JPA), with the Regents of the University of California to
construct facilities on the Riverside campus for purposes of
establishing and conducting a medical school.
3)Provides that subject to the terms of the agreement, the
facilities would be jointly owned by the City and UCR, which
would each provide funding for the construction.
EXISTING LAW :
1)Authorizes cities and counties to create IFDs and issue bonds
to pay for community scale public works such as highways,
transit, water systems, sewer projects, flood control, child
care facilities, libraries, parks, and solid waste facilities.
2)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.
3)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.
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4)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.
5)Requires that every local agency who will contribute its
property tax increment revenue to the IFD approve the plan.
6)Requires a two-thirds voter approval of the formation of the
IFD and the issuance of bonds.
7)Requires majority voter approval for setting the IFD's
appropriations limits.
8)Specifies that public agencies that own land in a proposed IFD
may not vote on issues regarding the district.
9)Authorizes IFDs to issue a variety of debt instruments,
including bonds, certificates of participation, leases, and
loans.
FISCAL EFFECT : Unknown
COMMENTS :
1)The author's office states that it has been more than 40 years
since a medical school was built in California and that the
state will face a severe shortage of doctors if this
continues. The author points to a press release issued July
7, 2008 from UCR which states that "physician shortages are
forecast at the national, state and regional levels. Within
California, the Inland Empire faces a physician shortfall as
high as 53 percent by 2015. To minimize the impact of a
looming national shortage, the American Association of Medical
Colleges has called for a 30 percent expansion in medical
school enrollments nationally by 2015."
2)The UC Regents approved the establishment of a UCR School of
Medicine in 2008 and the planning process soon got underway
with the school expected to be fully built out by 2020 and
have a total of 400 students.
a) According to the author, the University of California
asked the Governor to include $10 million in his budget for
the UCR School of Medicine. This $10 million in start-up
AB 2642
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funds (matched by Kaiser) was to be used to develop
academic programs and support the salaries of initial
medical school staff and faculty. The specific start-up
activities include pursuing accreditation for the medical
school curriculum and residency programs, establishing
affiliations with community-based hospitals and clinics,
and pursing private philanthropy. The Governor, however,
failed to include it in his budget that was presented to
the Legislature in January.
b) Although there are hopes to get this money back into the
budget, the lack of anticipated funding may push back the
physical construction of the medical school. AB 2642
provides the City of Riverside, in conjunction with UCR and
the surrounding community, with the option to create an
infrastructure finance district for the construction of the
medical school buildings if they choose to pursue this
avenue of funding.
3)Support Arguments : Supporters may argue that authorizing the
use of an IFD for the purposes of constructing the medical
school will provide the Riverside community with another
funding tool in the tool box.
Opposition Arguments : Opposition may argue that IFD law is a
very cumbersome law to implement. Only one IFD, Legoland in
Carlsbad, has been created since the original law was enacted
in 1990.
4)This bill is double-referred to the Appropriations Committee.
REGISTERED SUPPORT / OPPOSITION :
Support
None on file
Opposition
None on file
AB 2642
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Analysis Prepared by : Katie Kolitsos / L. GOV. / (916)
319-3958