BILL ANALYSIS �
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|SENATE RULES COMMITTEE | AB 2292|
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THIRD READING
Bill No: AB 2292
Author: Bonta (D)
Amended: 6/11/14 in Senate
Vote: 21
SENATE GOVERNANCE & FINANCE COMMITTEE : 7-0, 6/18/14
AYES: Wolk, Knight, Beall, DeSaulnier, Hernandez, Liu, Walters
ASSEMBLY FLOOR : Not relevant
SUBJECT : Infrastructure financing districts: broadband
SOURCE : Author
DIGEST : This bill adds public capital facilities or projects
that include broadband to the types of facilities that an
infrastructure financing district (IFD) can finance.
ANALYSIS : Cities and counties can create IFDs and issue bonds
to pay for community-scale public works. To re-pay the bonds,
an IFD diverts property tax increment revenues from other local
governments for 30 years. However, an IFD cannot divert
property tax increment revenues from schools. Every other local
agency that will contribute its property tax increment revenue
to the IFD must approve the plan. Unlike former redevelopment
project areas, the property in an IFD does not have to be
blighted, but an IFD cannot overlap a redevelopment project
area. Existing law declares, but does not require, that an IFD
should include substantially undeveloped areas.
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Existing law allows cities to establish, purchase and operate
works to furnish inhabitants with light, water, power, heat,
transportation, or means of communication (California
Constitution, Article XVI, Section 9). Existing law also allows
some special districts, including municipal utility districts
and public utility districts to provide works for supplying
inhabitants with communications services. In 2008, the
Legislature implemented one of the California Broadband Task
Force's recommendations by allowing community services districts
to provide broadband facilities and services in an area where a
private provider is either unable or unwilling to provide those
facilities and services (SB 1191, Alquist, Chapter 70, Statutes
of 2008).
This bill directs that any IFD may finance public capital
facilities or projects that include broadband. This bill
defines "broadband" as communications network facilities that
enable high-speed Internet access.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No Local:
No
SUPPORT : (Verified 7/23/14)
City of San Leandro (source)
California Library Association
California State Association Counties
Central Coast Broadband Consortium
Cities of Brisbane, Dublin, Oakland, and Sacramento
San Leandro Chamber of Commerce
OPPOSITION : (Verified 7/23/14)
California Taxpayers Association
ARGUMENTS IN SUPPORT : According to the author, "AB 2292 would
provide cities and counties with new tools to expand broadband
projects that would bring high-speed communications, jobs, and
new businesses to local communities.
"Many cities in the Bay Area have lost manufacturing companies
in recent years, resulting in the loss of jobs for local
residents and economic stagnation. The dissolution of
redevelopment agencies throughout the state has only compounded
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economic problems for local governments by eliminating one of
the tools used to generate funding for projects.
"Infrastructure financing districts have the potential to
provide an alternative for local governments to stimulate
economic development. However, existing law only permits a
limited number of project types to be financed, such as
transportation-related projects, water treatment facilities,
parks, and solid waste stations. Although these projects are
important for basic infrastructure within cities, they do not
inevitably bring in new businesses for future economic growth
within cities and counties.
"Studies by the federal government and international
organizations have demonstrated that broadband is a key driver
of economic growth and national competitiveness, in addition to
being able to contribute to social and cultural developments.
By increasing local access to broadband services, cities and
counties can incentivize high-tech companies and businesses to
move into their communities, and increase access to
telecommunications services for schools and residents."
ARGUMENTS IN OPPOSITION : According to the California
Taxpayers Association, "Tax-increment financing, the mechanism
used to achieve the goals of AB 2292, are misguided and flawed.
Such financing leaves cities, counties, and special districts
underfunded to provide essential government services.
"When a region is redeveloped, or new development occurs, more
government services are needed. For example, when a vacant city
block is transformed into urban housing or a commercial hub, the
newly transformed block now requires police services and fire
protection. Residents living on the new block need a hospital,
ambulance coverage, parks, and libraries. Because of the way
that tax-increment financing works, all these newly needed
services are unfunded. Before, transformation of a mom-and-pop
shop into a high-density, multi-use sustainable community would
result in cities, counties and special districts receiving
millions more in higher property taxes due to added growth.
Now, under this bill, all this money would be earmarked to the
infrastructure financing district to fund projects that enable
high-speed internet access."
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AB:e 7/28/14 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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