BILL ANALYSIS �
AB 485
Page 1
Date of Hearing: April 6, 2011
ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
Cameron Smyth, Chair
AB 485 (Ma) - As Introduced: February 15, 2011
SUBJECT : Local planning: transit village development
districts.
SUMMARY : Allows local officials to divert property tax
increment revenues to pay for public facilities and amenities
within transit village development districts (TVDDs).
Specifically, this bill :
1)Defines "transit facility," for purposes of being an eligible
project within an IFD as any publicly owned facility and
amenity necessary to implement a TVP.
2)Specifies that an election is not required to form an IFD,
adopt an infrastructure financing plan, or issue bonds.
3)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;
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
AB 485
Page 2
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) Included in the TVP, 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) Included in the TVP provisions on how to implement the
affordable housing requirements added by this measure.
4)Makes findings and declarations that it is the intent of the
Legislature that TVDDs be environmentally conscious and
sustainable, ant that related construction meet or exceed the
requirements of the California Green Building Standards Code.
EXISTING LAW :
1)Authorizes, under the Transit Village Development Planning Act
of 1994 (Act), a city or county to prepare a transit village
plan (TVP) 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 one-half mile of the exterior boundary of the
parcel on which the transit station is located;
AB 485
Page 3
c) Other land uses, including a retail district oriented to
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 TVP to include any five public benefits from a list
of 13 specified public benefits.
3)Authorizes cities and counties to create infrastructure
financing districts (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.
AB 485
Page 4
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
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 : None
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.
However, there are roadblocks to TOD development in the state,
including the long planning process and spiraling construction
costs. The Act 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.
2)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
AB 485
Page 5
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
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.
3)AB 338 (Ma) was an identical measure passed by the Legislature
last year; however, Governor Schwarzenegger vetoed the measure
stating that "This bill would eliminate voter approval
requirements for the creation of an IFD and the issuance of
tax allocation bonds by an IFD. In doing so, this measure
would undermine the rights of voters to approve or reject
proposals to redirect their tax dollars and incur public debt.
Unlike the creation of a redevelopment plan, the creation of
an IFD is not conditioned upon a finding of blight, or upon
any other statutory or constitutional restraints other than
strict voter approval requirements. As such, elections are
the sole basis of public input and fiscal discipline in the
creation of an IFD, and it is necessary to require voter
approval."
AB 1221 (Ma) was an identical measure passed by the
Legislature in 2008; however, Governor Schwarzenegger vetoed
the measure using the blanket veto message regarding the
delayed Budget.
4)Support arguments: TOD encourages local residents to live
near and use mass transit and helps communities deal with the
potential negative impacts of unrestricted growth and sprawl,
growing traffic gridlock and commuting times. Supporters
argue that allowing TVDDs to use TIF to pay for infrastructure
costs will provide a cost effective tool for pursuing
transit-oriented development projects.
Opposition arguments: Opposition could say that by removing
the voter approval requirements for the creation of an IFD and
the issuance of tax allocation bonds will remove any input or
direct voter oversight. Moreover, with the removal of the
voting requirement the measure is creating more of a
redevelopment type agency without the requirement of making a
AB 485
Page 6
finding of blight.
REGISTERED SUPPORT / OPPOSITION :
Support
San Francisco Bay Area Rapid Transit District (BART)
Opposition
CA Taxpayers Association (CalTax)
Analysis Prepared by : Katie Kolitsos / L. GOV. / (916)
319-3958