BILL ANALYSIS �
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|SENATE RULES COMMITTEE | SB 1156|
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THIRD READING
Bill No: SB 1156
Author: Steinberg (D)
Amended: 5/29/12
Vote: 21
SENATE GOVERNANCE & FINANCE COMMITTEE : 6-3, 4/18/12
AYES: Wolk, DeSaulnier, Hancock, Hernandez, Kehoe, Liu
NOES: Dutton, Fuller, La Malfa
SENATE TRANSPORTATION & HOUSING COMM. : 5-3, 4/24/12
AYES: DeSaulnier, Kehoe, Lowenthal, Pavley, Simitian
NOES: Gaines, Harman, Wyland
NO VOTE RECORDED: Rubio
SENATE APPROPRIATIONS COMMITTEE : 5-2, 5/24/12
AYES: Kehoe, Alquist, Lieu, Price, Steinberg
NOES: Walters, Dutton
SUBJECT : Sustainable Communities Investment Authority
SOURCE : Author
DIGEST : This bill authorizes a city and county that
included the territory of a redevelopment agency to form a
Sustainable Communities Investment Authority to carry out
Community Redevelopment Law, using the assets of a former
redevelopment agency as well as new revenues that the bill
authorizes.
Senate Floor Amendments of 5/29/12 delete the authority for
CONTINUED
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a city council to form a Sustainable Communities Investment
Authority that receives only the city's share of tax
increment revenue.
ANALYSIS : Until 2011, the Community Redevelopment Law
allowed local officials to set up redevelopment agencies
(RDAs), prepare and adopt redevelopment plans, and finance
redevelopment activities.
A redevelopment agency kept the property tax increment
revenues generated from increases in property values within
a redevelopment project area. As a redevelopment project
area's assessed valuation grew above its base-year value,
the resulting property tax revenues, the property tax
increment, went to the RDA instead of going to the
underlying local governments. When a redevelopment agency
diverted property tax revenues from a school district, the
State General Fund paid the difference.
Citing a significant State General Fund deficit, Governor
Brown's 2011-12 budget proposed eliminating RDAs and
returning billions of dollars of property tax revenues to
schools, cities, and counties to fund core services. Among
the statutory changes that the Legislature adopted to
implement the 2011-12 Budget, AB 26X1 (Blumenfield),
Chapter 5, Statutes of 2011-12 First Extraordinary Session,
dissolved all RDAs.
This bill authorizes a city and county that includes
territory of a former RDA to form a Sustainable Communities
Investment Authority (Authority) to carry out the Community
Redevelopment Law, as specified. Specifically, this bill:
1. Authorizes the Authority to enter into financial and
other agreements with community colleges, K-12 school
districts, and private businesses to "facilitate the
development and operation of articulated career
technical education pathways."
2. Authorizes the Authority to adopt a redevelopment
plan for a project area that would expire within 30
years of the first issuance of bonded indebtedness.
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3. Places the specified limits on project area
designations: (1) for regions within a metropolitan
planning organization (MPO) with an adopted sustainable
communities strategy (SCS) that has been accepted by
the Air Resources Board, possible project areas may
include transit priority areas identified in an SCS and
for each jurisdiction, one small walkable community, as
specified; or (2) sites that have land use approvals or
other controls restricting the site to clean energy
manufacturing and sites consistent with the SCS, if
those sites are within the geographic boundaries of an
MPO.
4. Authorizes a state or local public pension fund to
invest in public infrastructure projects and private
commercial and residential development undertaken by an
Authority.
5. Authorizes an Authority to implement a local
transactions and use tax, above the state's base 7.25
percent sales and use tax, provided that the resolution
authorizing the tax designates the use of the proceeds
of the tax.
6. Authorizes an Authority to issue bonds paid for with
authority proceeds in order to carry out the provisions
of this bill.
7. Authorizes an Authority to exercise the powers of an
infrastructure financing district to divert property
tax increment revenues and issue bonds to pay for
public works.
8. Authorizes an Authority to finance infrastructure by
issuing bonds and lending the proceeds for public
works, working capital, and insurance programs as
provided in the Marks-Roos Local Bond Pooling Act.
9. Statutorily redefines the term "district" as used in
Article XVI, Section 16 of the California Constitution
for purposes of calculating redevelopment tax
increment, to exclude school districts and special
districts.
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10. Provides additional governance structures that allow
cities to capture the full increment subject to county
approval, or to capture only the city share of the
increment.
11. Requires the adoption of a jobs plan, prevailing wage
provisions, and developer prequalification provisions
in connection with the establishment of a Sustainable
Communities Investment Area.
Comments
Eliminating redevelopment agencies did not eliminate the
need for communities throughout California to build more
affordable housing, eliminate blight, foster business
activity, clean up contaminated brownfields, and create
jobs. This bill establishes a new approach to local
economic development and housing policy that is focused on
building sustainable communities and creating high skill,
high wage jobs. This bill's Authority model fosters
collaboration between cities and counties on local economic
development efforts and mitigates the zero-sum competition
for scare property tax revenues among cities, counties, and
school districts. The bill offers local governments
flexibility by allowing an authority to use a variety of
tools, including tax increment financing, Community
Redevelopment Law powers, local sales taxes, infrastructure
financing districts, and the ability to leverage public
pension fund investments.
Related Legislation
SB 986 (Dutton) which allows successor agencies to keep
former RDAs' bond proceeds and enter into new enforceable
obligations funded by bond proceeds.
SB 1056 (Hancock) expands the definition of "enforceable
obligation" to include financial obligations related to a
project funded with both tax increment and federal school
construction bonds.
SB 1151 (Steinberg) creates an alternative process by which
communities can use their former redevelopment agencies'
assets for economic development and housing purposes.
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Other bills that amend the statutes governing the
disposition and use of former RDAs' assets include:
SB 1337 (Pavley) allows a successor agency to retain former
RDA land that is a brownfield site for the purpose of
hazardous substance remediation or removal.
AB 1585 (Perez) makes numerous amendments to the statutes
governing the redevelopment dissolution process.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee,
significant diversion of future property tax increment to
joint powers authorities to cover staffing and
administrative costs associated with new redevelopment
activity authorized by the bill. This could be a
particularly difficult and costly administrative task for a
county that forms an Authority with numerous cities within
its boundaries.
SUPPORT : (Verified 5/29/12)
American Federation of State, County and Municipal
Employees
BRIDGE Housing
California Infill Builders Association
California State Association of Counties
DMB Pacific Ventures
Los Angeles Alliance for a New Economy
Mission Bay Development Group
AGB:nl 5/30/12 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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