BILL ANALYSIS �
AB 1827
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Date of Hearing: April 25, 2012
ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
Cameron Smyth, Chair
AB 1827 (Bonilla) - As Amended: April 16, 2012
SUBJECT : Infrastructure financing districts.
SUMMARY : Authorizes a military base reuse authority to form an
infrastructure financing district (IFD), as specified, and
allows an IFD to finance homeless accommodations. Specifically,
this bill :
1)Includes, in the definition of "city," for purposes of IFD
law, a military base reuse authority formed pursuant to
specified sections of law that establish both the Fort Ord
Reuse Authority and the Military Base Reuse Authority Act.
2)Includes in the definition of "legislative body" for purposes
of IFD law, a military base reuse authority formed pursuant to
specified sections of law that establish both the Fort Ord
Reuse Authority and the Military Base Reuse Authority Act.
3)Allows an IFD to finance homeless accommodations pursuant to
the Federal Defense Base Closure and Realignment Act of 1990,
as amended.
EXISTING LAW :
1)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.
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.
4)Requires that when forming an IFD, local officials must find
that its public facilities are of communitywide significance
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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.
10)Requires any IFD that constructs dwelling units to set aside
not less than 20% of those units to increase and improve the
community's supply of low- and moderate-income housing
available at an affordable housing cost to persons and
families of low- and moderate-income.
11)Enacts the Military Base Reuse Authority Act and provides
that the purpose of a Military Base Reuse Authority is to plan
for, finance, and manage the transition of the military base
from military to civilian use.
FISCAL EFFECT : None
COMMENTS :
1)This bill expands the definition for what type of entity can
create an IFD to include a military base reuse authority.
Additionally the bill expands the scope of what an IFD can pay
for to include homeless accommodations as required by the
Department of Defense. This bill is author-sponsored.
2)Since the creation of IFD law there have been multiple bills
that have tailored IFD law to specific local circumstances.
In 1999 the Legislature created a parallel law for IFDs to
stimulate development and international trade in the "border
development zone," about 400 square miles next to the Mexico
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border �SB 207 (Peace), Chapter 773, Statutes of 1999].
However, San Diego officials have yet to use this authority.
In 2005, the Legislature passed SB 1085 (Migden), Chapter 213,
Statutes of 2005, which provided for changes and additions to
the IFD law to enable the City and County of San Francisco to
finance needed public infrastructure improvements to specified
waterfront properties. This authority was expanded even
further for San Francisco in AB 1199 (Ammiano), Chapter 664,
Statutes of 2010.
3)Cities and counties, through existing law, can create IFDs to
pay for regional scale public works �SB 308 (Seymour), Chapter
1575, Statutes of 1990]. IFDs can divert the non-school
shares of property tax increment revenues to finance highways,
transit, water systems, sewer projects, flood control, child
care facilities, libraries, parks, and solid waste facilities.
IFDs can't pay for maintenance, repairs, operating costs, and
services. Unlike redevelopment project areas, the property in
an IFD doesn't have to be blighted. Existing law specifies
that IFDs and redevelopment agencies' project areas must not
overlap.
Forming an IFD is cumbersome. The city or county must develop
an infrastructure plan, send copies to every landowner,
consult with other local governments, and hold a public
hearing. Every local agency that will contribute its property
tax increment revenue to the IFD must approve the plan.
Schools cannot shift their property tax increment revenues to
the IFD. Once the other local agencies approve, the city or
county must still get the voters' approval to form the IFD
(two-thirds voter approval), issue bonds (two-thirds voter
approval), and vet the IFD's appropriations limit
(majority-voter approval).
Until the Attorney General's 1998 opinion, local officials
were reluctant to form IFDs because they worried about the
constitutionality of using tax increment revenue from property
that was not within a redevelopment project area.
Because an IFD is legally separate from the city or county, it
is somewhat similar to a community redevelopment agency. The
requirement for two-thirds voter approval is not based on any
constitutional requirement, but instead, represents the
political comprise that legislators struck in 1990.
4)The author notes that "with the elimination of redevelopment
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agencies, many communities throughout the state were left with
scarce economic development tools. In particular, some
communities that are most impacted involve areas with former
military bases."
5)The author believes that "in a post-redevelopment world, it is
important to provide economic development tools for the
state's military bases for revitalization efforts. While
there are several economic development tools available such as
local taxes, general obligation bonds, community facilities
districts, this bill focuses on IFDs."
6)The federal Defense Base Closure Act requires that plans to
convert closed bases from military to non-military use take
into account the needs of homeless persons. Furthermore, it
establishes a specific process for homeless service providers
to receive base property. Since military bases often contain
a significant number of housing units, warehouses, office
space, and other buildings that can be excellent locations for
homeless services and housing, base closures can be a great
resource for providers.
7)Support arguments : This bill will create an additional tool
for the revitalization of military bases.
Opposition arguments : The Committee may wish to discuss
whether IFD law needs to be adjusted to meet the needs for
revitalizing military bases.
REGISTERED SUPPORT / OPPOSITION :
Support
Cities of Alameda and Concord
Opposition
None on file
Analysis Prepared by : Debbie Michel / L. GOV. / (916)
319-3958
AB 1827
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