BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 2642
                                                                  Page  1

          Date of Hearing:   May 19, 2010

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Felipe Fuentes, Chair

                   AB 2642 (Nestande) - As Amended:  May 12, 2010 

          Policy Committee:                              Local  
          GovernmentVote:9-0

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:              

           SUMMARY  

          This bill authorizes the City of Riverside to form an  
          infrastructure financing district (IFD) for the purposes of  
          funding the construction of medical school facilities for  
          University of California, Riverside.  Specifically, the bill: 

          1)Requires that, if the IFD is formed, the city shall enter into  
            a joint powers agreement with the Regents of the University of  
            California and County of Riverside to construct medical school  
            facilities.

          2)Provides that, subject to the terms of the agreement, the  
            facilities will be jointly owned by the city, the county, and  
            UC Riverside, each of which would provide funding for the  
            construction.

           FISCAL EFFECT
           
          1)No direct state fiscal effect, as the bill merely authorizes  
            the formation of an IFD as an option for local financing of UC  
            Riverside medical school construction.

          2)Potential diversion of property tax increment from the City of  
            Riverside and County of Riverside, pursuant to an agreement  
            among the affected local entities. School districts and county  
            offices of education would not be affected. 

           COMMENTS

          1)Background  . Existing law authorizes cities and counties to  
            create IFDs and issue bonds to pay for community public works.  








                                                                  AB 2642
                                                                  Page  2

             IFDs are authorized to divert property tax increment revenues  
            (that is, the growth in property taxes occurring after the  
            effective date of the district) from other local governments,  
            excluding school districts, for up to 30 years to finance  
            repayment of the bonds.  Cities or counties forming IFDs must  
            develop an infrastructure plan, send copies to every  
            landowner, consult with other local governments, hold a public  
            hearing, and receive voter approval for bond issuances.

            The UC Regents approved the establishment of a UC Riverside  
            School of Medicine in 2008. When fully built-out 2020, the  
            school is planned to accommodate 400 students. 

           2)Rationale  . This bill is intended to provide an option for  
            financing the construction of a new medical school adjacent to  
            the UC Riverside campus. Given budget-related uncertainties,  
            the author indicates that it is important that the community  
            have this local-funding option available should they choose to  
            pursue it.

           Analysis Prepared by  :    Brad Williams / APPR. / (916) 319-2081