Existing law authorizes the legislative body of a city or a county to establish an enhanced infrastructure financing district to finance public capital facilities or other specified projects of communitywide significance, and makes related findings and declarations.

This bill would additionally authorize the financing of projects that enable communities to adapt to the impacts of climate change, including, but not limited to, specified impacts described in the bill, and would make conforming changes to the Legislatures findings and declarations.

Existing law authorizes the legislative body of a city or a county to establish an enhanced infrastructure financing district to finance public capital facilities or other specified projects of communitywide significance, and makes related findings and declarations.

This bill would additionally authorize the financing of projects that enable communities to adapt to the impacts of climate change, including, but not limited to, specified impacts described in the bill, and would make conforming changes to the Legislatures findings and declarations.

Existing law authorizes the legislative body of a city or a county to establish an enhanced infrastructure financing district to finance public capital facilities or other specified projects of communitywide significance, and makes related findings and declarations.

This bill would additionally authorize the financing of projects that enable communities to adapt to the impacts of climate change, including, but not limited to, extreme weather events, sea level rise, flooding, heat waves, wildfire, and drought, specified impacts described in the bill, and would make conforming changes to the Legislatures findings and declarations.

Existing law authorizes the legislative body of a city or a county to establish an enhanced infrastructure financing district to finance public capital facilities or other specified projects of communitywide significance, and makes related findings and declarations.

This bill would additionally authorize the financing of projects that incentivize adapting enable communities to adapt to the impacts of climate change, including, but not limited to, extreme weather events, sea level rise, flooding, heat waves, wildfire, and drought, and would make conforming changes to the Legislatures findings and declarations.

Existing law authorizes the legislative body of a city or a county to establish an enhanced infrastructure financing district to finance public capital facilities or other specified projects of communitywide significance, and makes related findings and declarations.

This bill would additionally authorize the financing of projects that incentivize adapting to the impacts of climate change, including, but not limited to, extreme weather events, sea level rise, flooding, heat waves, wildfire, and drought, and would make conforming changes to the Legislatures findings and declarations.

CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 733

Author:(Berman)

As Amended Ver:June 26, 2017

Majority vote

Original Committee Reference: L. GOV.

SUMMARY: Adds climate change projects to the list of projects that may be financed by an Enhanced Infrastructure Financing District (EIFD).

The Senate amendments add five more specific examples of projects that enable communities to adapt to the impacts of climate change, including higher average temperatures, decreased air and water quality, the spread of infectious and vector-borne diseases, and other public health impacts.

FISCAL EFFECT: None

COMMENTS:

1. Bill Summary. This bill adds climate change projects to the existing list of projects that may be financed by cities or counties through an EIFD. This includes, but is not limited to, higher average temperatures, decreased air and water quality, the spread of infectious and vector-borne diseases, other public health impacts, extreme weather events, sea level rise, flooding, heat waves, wildfires, and drought. This bill is author-sponsored.
2. Author's Statement. According to the author, "As the impacts of climate change continue to be felt in California, such as drought, flooding, warmer temperatures, increased wildfires, and the threat of sea level rise along approximately 1,100 miles of California coastline, investments in infrastructure need to take climate change into account.

"Local governments are at the forefront of addressing the impacts of climate change. However, resources and funding are some of the largest barriers to taking action. EIFDs are a newer financing tool available to local governments that can fill this need and be used to incentivize action to adapt to the changing climate.

"AB 733 would expand the types of projects that can be funded with EIFDs to specifically include projects that enable communities to adapt to the impacts of climate change. These impacts could include, but are not limited to extreme weather events, sea level rise, flooding, heat waves, wildfires, and drought. Explicitly stating that EIFDs can fund these types of projects will create awareness for local governments and will hopefully spur more local governments to adapt to the impacts of climate change."

1. Background on EIFDs. With the dissolution of Redevelopment Agencies in 2011, cities and counties sought alternate ways to finance local infrastructure projects. In response to this, the Legislature passed SB 628 (Beall), Chapter 785, Statutes of 2014, expanding on existing infrastructure financing districts and authorizing cities and counties to establish EIFDs. These EIFDs allow cities and counties to fund local infrastructure projects.

Whereas Redevelopment Agencies had specific, narrow projects they could finance, EIFDs have a broader range of projects that they may finance, in addition to many of the same powers of Redevelopment Agencies. For example, EIFDs are not required to focus on "blighted areas" like Redevelopment Agencies, and may invest in a number of different projects, such as transportation and water.

To create an EIFD, the legislative body of a city or county must adopt a resolution of intention to establish the financing district, notify those who will be within the district, produce a proposal for the project and its cost, and hear public comment on the proposal. Once approved, an EIFD can be financed through two revenue streams. Similar to Redevelopment Agencies, EIFDs can utilize a portion of the local property tax revenue growth if the local governments approve it. They may also use revenue that the infrastructure project generates, such as money generated from user fees, public-private partnerships, loans, and grants.

EIFDs cannot finance routine maintenance projects, repair work, or the costs of ongoing operations or services. EIFDs may only finance public infrastructure projects. These projects currently include funding the reuse and revitalization of former military bases, the creation of transit priority projects and the implementation of 'sustainable communities' plans, construction and rehabilitation of affordable housing units, and construction of facilities to house providers of consumer goods and services in the communities served by their efforts.

1. Prior Legislation. Though infrastructure financing districts have been in existence since the 1980s, EIFDs, which have broader financing powers for a broader range of projects, are a relatively new tool. Previous legislation includes:
   1. SB 628 (Beall), Chapter 785, Statutes of 2014, allowed a city or county to create an EIFD to finance specific local infrastructure projects and community public works.
   2. AB 313 (Atkins), Chapter 320, Statutes of 2015, clarified the process for replacing dwelling units and residents displaced by EIFD projects, and makes technical changes that clarifies that the public financing authority of an EIFD must remain separate from the legislative body that created the EIFD.
2. Arguments in Support. Supporters argue that adapting to climate change is a necessary tool for local governments. The Nature Conservancy, in support, writes that "by expanding the types of projects that EIFDs can fund to explicitly include environmental projects that address climate adaptation, AB 733 will promote awareness for local governments about the opportunity for funding through EIFDs."
3. Arguments in Opposition. None on file.

Analysis Prepared by: Kim Kollwitz / L. GOV. / (916) 319-3958 FN: 0001051

 THIRD READING  

Bill No: AB 733

Author: , et al.

Amended: 6/26/17 in Senate

Vote:

SENATE GOVERNANCE & FIN. COMMITTEE: 5-2, 6/7/17

AYES: McGuire, Beall, Hernandez, Hertzberg, Lara

NOES: Nguyen, Moorlach

SENATE ENVIRONMENTAL QUALITY COMMITTEE: 5-1, 6/21/17

AYES: Wieckowski, Hill, Lara, Skinner, Stern

NOES: Stone

NO VOTE RECORDED: Gaines

ASSEMBLY FLOOR: 56-17, 5/4/17 - See last page for vote

SUBJECT:

SOURCE: Author

DIGEST:

This bill adds climate change projects to the list of projects that can be financed by an enhanced infrastructure financing district (EIFD).

ANALYSIS:

Existing law:

1. Allows cities and counties to create EIFDs.
2. Requires the legislative body of a city or county to adopt a resolution of intention to establish the EIFD.
3. Requires the legislative body of a city or county to notify those who will be within the district of the proposed EIFD and hear public comment on the proposal.
4. Requires the legislative body of a city or county to produce a proposal for the project which details the goal of the project, the cost, and other relevant information.
5. Requires an approval of 55% of the voters within an EIFD if a project is financed through a loan and will accrue debt.
6. Requires EIFDs that incur debt to perform an independent financial and performance audit every two years.
7. Authorizes cities and counties to create EIFDs to finance local infrastructure projects and community public works, including:
   1. Highways, interchanges, ramps and bridges, arterial streets, parking facilities, and transit facilities;
   2. Sewage treatment and water reclamation plants and interceptor pipes;
   3. Facilities for the collection and treatment of water for urban uses;
   4. Flood control levees and dams, retention basins, and drainage channels;
   5. Child care facilities;
   6. Libraries;
   7. Parks, recreation facilities, and open space;
   8. Facilities for the transfer and disposal of solid waste, including transfer stations and vehicles;
   9. Brownfield restoration and other environmental mitigation;
   10. The development of projects on a former military base, provided that the projects are consistent with the military base authority reuse plan and are approved by the military base reuse authority, if applicable;
   11. The repayment of the transfer of funds to a military base reuse authority, pursuant to existing law that occurred on or after the creation of the EIFD;
   12. The acquisition, construction, or rehabilitation of housing for persons of very low, low, and moderate-income, as defined, for rent or purchase;
   13. The acquisition, construction, or repair of industrial structures for private use;
   14. Transit priority projects, as defined in existing law, that are located within a transit priority project area. As defined in existing law, a transit priority project area may include a military base reuse plan that meets the definition of transit priority project area and it may include a contaminated site within a transit priority project area;
   15. Projects that implement a sustainable communities strategy, when the State Air Resources Board has accepted a metropolitan planning organization's determination that the sustainable communities strategy or the alternative planning strategy would, if implemented, achieve the greenhouse gas emission reduction targets; and,
   16. Port or harbor infrastructure.

This bill adds projects that enable communities to adapt to impacts of climate change, including higher average temperatures, decreased air and water quality, the spread of infectious and vector-borne diseases, other public health impacts, extreme weather events, sea level rise, flooding, heat waves, wildfires, and drought to the list of projects that can be financed by an EIFD.

Background

Cities and counties can create infrastructure financing districts (IFDs) to 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 (SB 308, Seymour, 1990). To repay the bonds, IFDs can divert property tax increment revenues, which are revenues generated from increases in property values within the IFD above property values in the base-year when the IFD was formed. However, IFDs can’t divert property tax increment revenues from schools.

Until 2011, the Community Redevelopment Law allowed local officials to set up redevelopment agencies (RDAs), prepare and adopt redevelopment plans, and finance redevelopment activities. 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 X1 26 (Blumenfield, Chapter 5, Statutes of 2011 First Extraordinary Session) dissolved all RDAs. The California Supreme Court's 2011 ruling in California Redevelopment Association v. Matosantos upheld AB X1 26, but invalidated AB X1 27 (Blumenfield, Chapter 6, Statutes of 2011 First Extraordinary Session), which would have allowed most RDAs to avoid dissolution.

After RDAs were dissolved in 2011, local officials sought other ways to use tax increment financing to raise the capital they need to invest in public works projects. In response, the Legislature enacted SB 628 (Beall, Chapter 785, Statutes of 2014) to allow local officials to create EIFDs, which augment the tax increment financing powers available to local government under the IFD statutes. City or county officials can create an EIFD, which is governed by a public finance authority, to finance public capital facilities or other specified projects of communitywide significance that provide significant benefits to the district or the surrounding community.

To create an EIFD, the legislative body of a city or county must adopt a resolution of intention to establish the financing district and its purpose, notify those who will be within the district, produce a proposal for the project and its cost, and hear public comment on the proposal. Once approved, an EIFD can be financed through two revenue streams. Similar to Redevelopment Agencies, EIFDs can utilize a portion of the local property tax revenue growth if the local governments approve it. They may also use revenue that the infrastructure project generates, such as money generated from user fees, public-private partnerships, loans, and grants.

EIFDs cannot finance routine maintenance projects, repair work, or the costs of ongoing operations or services. EIFDs may only finance public infrastructure projects. These projects currently include, but are not limited to, streets and roads, wastewater, libraries, child care facilities, park and recreation, solid waste, among others. To ensure that funding collected by EIFDs can be spent on climate change infrastructure development, the author would like to add projects specific to adapting to changing climate to the enumerated list of authorized infrastructure projects.

Comments

Purpose of the bill. According to the author, “As the impacts of climate change continue to be felt in California, such as drought, flooding, warmer temperatures, increased wildfires, and the threat of sea level rise along approximately 1,100 miles of California coastline, investments in infrastructure need to take climate change into account. Local governments are at the forefront of addressing the impacts of climate change. However, resources and funding are some of the largest barriers to taking action. EIFDs are a newer financing tool available to local governments that can fill this need and be used to incentivize action to adapt to the changing climate. AB 733 would expand the types of projects that can be funded with EIFDs to specifically include projects that enable communities to adapt to the impacts of climate change. These impacts could include, but are not limited to extreme weather events, sea level rise, flooding, heat waves, wildfires, and drought. Explicitly stating that EIFDs can fund these types of projects will create awareness for local governments and will hopefully spur more local governments to adapt to the impacts of climate change.”

Let’s be clear. EIFDs can currently finance the development of a wide range of projects as long as the projects are of communitywide significance and provide significant benefits to the area covered by the EIFD or the surrounding community. In addition to the list of specifically authorized projects, EIFD law does not limit the type of projects that can be financed if a communitywide benefit can be established. However, local agencies must state the proposed facilities to be financed when adopting a resolution of intention to create an EIFD. By clearly stating climate change adaptation projects are authorized to be financed by EIFDs, AB 733 helps make clear and avoid any potential confusion as to the eligibility of such a project when adopting a resolution of intention.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

SUPPORT: (Verified 6/27/17)

California Special Districts Association

California State Association of Counties

City of Santa Monica

East Bay Regional Park District

San Francisco Bay Conservation and Development Commission

The Nature Conservancy

U.S. Green Building Council

OPPOSITION: (Verified 6/27/17)

None received

ASSEMBLY FLOOR: 56-17, 5/4/17

AYES: Aguiar-Curry, Arambula, Baker, Berman, Bloom, Bocanegra, Bonta, Burke, Caballero, Calderon, Chau, Chávez, Chiu, Chu, Cooley, Cooper, Cunningham, Dababneh, Daly, Eggman, Frazier, Friedman, Eduardo Garcia, Gipson, Gloria, Gomez, Gonzalez Fletcher, Gray, Grayson, Holden, Irwin, Jones-Sawyer, Kalra, Lackey, Levine, Limón, Low, Maienschein, McCarty, Medina, Mullin, Muratsuchi, Nazarian, O'Donnell, Quirk, Reyes, Rodriguez, Rubio, Salas, Santiago, Mark Stone, Thurmond, Ting, Weber, Wood, Rendon

NOES: Acosta, Brough, Choi, Dahle, Flora, Fong, Gallagher, Harper, Kiley, Mathis, Mayes, Melendez, Obernolte, Quirk-Silva, Steinorth, Voepel, Waldron

NO VOTE RECORDED: Travis Allen, Bigelow, Cervantes, Chen, Cristina Garcia, Patterson, Ridley-Thomas

Prepared by:

6/28/17 15:36:45

**** END ****

SENATE COMMITTEE ON ENVIRONMENTAL QUALITY

Senator Wieckowski, Chair

2017 - 2018 Regular

Bill No: AB 733

SUBJECT: Enhanced infrastructure financing districts: projects: climate change.

ANALYSIS:

Existing law:

1. Authorizes cities and counties to create an Enhanced Infrastructure Financing District (EIFD) in order to finance the following projects after adopting a resolution of intent to establish an EIFD, notifying those who will be within the district of the proposed EIFD, and hearing public comment on the details of the proposed project:
   
   1. The purchase, construction, expansion, improvement, seismic retrofit, or rehabilitation of any real or other tangible property with an estimated useful life of 15 years or longer.
      
   2. The planning and design work that is directly related to the purchase, construction, expansion, or rehabilitation of property.
      
   3. Certain specified costs associated with dwelling units and actions relating to the creation of an EIFD, adoption of an infrastructure financing plan, or an election relating to the EIFD. (Government Code (GOV) §53398.50 et seq.)
      
2. Requires that facilities not physically located within the boundaries of the EIFD have a tangible connection to the district. (GOV §53398.52)
   
3. Prohibits an EIFD from financing routine maintenance, repair work, or the costs of an ongoing operation or providing services of any kind. (GOV §53398.52)
   
4. Requires an approval of 55% of the voters within an EIFD if a project is to be bond financed unless the project is for a seaport infrastructure financing district, which requires approval by a two-vote margin. (GOV §53398.81)
   
5. Allows local governments to finance an EIFD by providing a loan or grant. (GOV §53398.87)
   
6. Requires that only public capital facilities or other specified projects of communitywide significance that provide significant benefits to the district or the surrounding community may be financed by an EIFD. (GOV §53398.52)
   

This bill:

Clarifies that projects which enable communities to adapt to the impacts of climate change—including, but not limited to, extreme weather events, sea level rise, flooding, heat waves, wildfires, and drought— are of communitywide significance that provide significant benefits to the district or the surrounding community and may be financed by an EIFD.

Background

1. Redevelopment Agencies (RDAs). In 1945, the California Legislature enacted the Community Redevelopment Act to assist local governments in eliminating blight through development, reconstruction, and rehabilitation of residential, commercial, industrial, and retail districts. The Act gave cities and counties the authority to establish RDAs.
   
   In 1951, the Legislature superseded the Community Redevelopment Act with the California Community Redevelopment Law (CRL). Codified in California Constitution, Article XVI, Section 16, and the Health and Safety Code, beginning with Section 33000, the CRL provided funding from local property taxes to promote the redevelopment of blighted areas.
   
   The CRL also established the authority for tax increment financing (TIF), which is a public financing method to subsidize redevelopment, infrastructure, and other community-improvement projects. TIF used future increases in property taxes to subsidize current improvements, which are projected to create the conditions for the increases.
   
   In 1976, the California Legislature required that at least 20% of the tax increment revenue from redevelopment project areas be used to increase, improve, and preserve the supply of housing for very low, low, and moderate income households.
   
   AB 3193 (Polanco, Chapter 1113, Statutes of 1990), part of the Community Redevelopment Act, was enacted to assist redevelopment agencies in responding to brownfield properties in their redevelopment areas. It prescribes processes for redevelopment agencies to follow when cleaning up a hazardous substance release in a redevelopment project area. It also provides specified immunity from liability for sites cleaned up under a cleanup plan approved by the Department of Toxic Substances Control (DTSC) or a Regional Board.
   
   AB 1290 (Isenberg, Chapter 942, Statutes of 1993) known as the “Community Redevelopment Law Reform Act of 1993,” revised the CRL to address alleged abuses, and added restrictions on redevelopment activities, including limiting them predominately to urban areas.
   
   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.
   
   On June 28, 2011, the Governor approved two bills, AB1X 26 (Blumenfield, Chapter 5, Statutes of 2011) and AB1X 27(Blumenfield, Chapter 5, Statutes of 2011), which amended the CRL. AB1X 26 was the “dissolution” bill, which set November 1, 2012 as the date to dissolve all RDAs. The companion legislation AB1X 27, the “reinstatement” bill, allowed cities to keep their agencies in place by committing to substantial “community remittances” to be paid to the state.
   
   In July, 2011, a lawsuit was filed challenging the constitutionality of both AB1X 26 and AB1X 27. The California Supreme Court accepted the case and issued a “stay” under which agencies remained in place, but in the suspended state pending a decision by the court.
   
   On December 29, 2011, the California Supreme Court issued its decision: it upheld AB1X 26, which eliminated redevelopment agencies, but struck down AB1X 27, which would have allowed cities to agree to community remittance payments to keep their agencies in place.
   
2. EIFDs. With the dissolution of Redevelopment Agencies in 2011, cities and counties sought alternate ways to finance local infrastructure projects. In response to this, the Legislature passed SB 628 (Beall, Wolk, Chapter 785, Statutes of 2014), expanding on existing infrastructure financing districts and authorizing cities and counties to establish EIFDs. These EIFDs allow cities and counties to fund local infrastructure projects.
   
   Whereas Redevelopment Agencies had specific, narrow projects they could finance, EIFDs have a broader range of projects that they may finance, in addition to many of the same powers of RDAs. For example, EIFDs are not required to focus on “blighted areas” like RDAs, and may invest in a number of different projects, such as transportation and water.
   
   To create an EIFD, the legislative body of a city or county must adopt a resolution of intention to establish the financing district, notify those who will be within the district, produce a proposal for the project and its cost, and hear public comment on the proposal.
   
   Once approved, an EIFD can be financed through two revenue streams. Similar to the RDAs, EIFDs can utilize a portion of the local property tax revenue growth if the local governments approve it. They may also use revenue that the infrastructure project generates, such as money generated from user fees, public-private partnerships, loans, and grants.
   
   EIFDs cannot finance routine maintenance projects, repair work, or the costs of ongoing operations or services. EIFDs may only finance “public capital facilities or other specified projects of communitywide significance that provide significant benefits to the district or the surrounding community.”
   
3. Climate mitigation vs. climate adaptation. There are many state and local policies designed to reduce greenhouse gas (GHG) emissions because deep and severe cuts in global GHG emissions are needed to avoid the most severe consequences of a changing climate. While these efforts are crucial, they will not be enough to stave off climate change entirely. Even if all GHG emissions ceased today, many impacts of climate change would still be unavoidable because the climate system changes slowly. Not only has climate change already occurred, it will continue to happen for generations to come, even under the best of circumstances.
   
   Adapting to the irreversibly changing climate is crucial for public health, environmental quality, natural resources protection, food stability, infrastructure maintenance, and withstanding severe weather events like heavier rains, heat waves, and drought.
   
4. Executive Orders Relating to State Agencies and Adaptation. In 2005, Governor Schwarzenegger issued Executive Order S-3-05, which established GHG emission reduction targets, created the Climate Action Team (CAT), and directed the Secretary of California Environmental Protection Agency (CalEPA) to coordinate efforts to meet the targets with the heads of other state agencies. The Order required the Secretary to report back to the Governor and Legislature biannually on progress toward meeting the GHG targets, GHG impacts to California, as well as mitigation and adaptation plans.
   
   In 2008, Governor Schwarzenegger issued Executive Order S-13-08, which directed state agencies to plan for climate impacts specifically from sea level rise. It further directed the California Natural Resources Agency (CNRA), through the CAT, to coordinate the California Climate Adaptation Strategy by June 2009, noting “California must begin now to adapt and build our resiliency to coming climate changes through a thoughtful and sensible approach with local, regional, state and federal government using the best available science.”
   
   In 2015, Governor Brown issued Executive Order B-30-15, which, in addition to setting GHG-related goals, directed the CNRA to update the Plan every three years and include vulnerabilities to climate change by sector and region, as specified, outline primary risks and priority actions regarding climate change impacts, and identification of lead agencies for each sector, which then report back to the CNRA on their actions taken. The Order further directed state agencies to take climate change into account in planning and investment decisions, guided by specified principles, and directs the Office of Planning and Research (OPR) to establish a technical, advisory group to help state agencies in their efforts.
   
5. California’s adaptation documents. The 2009 California Climate Adaptation Strategy is a statewide strategy that includes a summary of impacts from climate change, provides recommendations for adaptation strategies in seven sectors, and provides guidance for establishing adaptation and resiliency actions for the state.
   
   The 2014 Safeguarding California Plan is an update that augments adaptation strategies based on new climate science and risk management options.
   
   The 2012 California Adaptation Planning Guide (APG), prepared and promoted by OPR, the CNRA, and the Office of Emergency Services (OES), was designed to provide guidance and support for local governments and regional collaborations in addressing the impacts of climate change. The guide consists of an overview document and three companion documents for use in defining local and regional impacts, understanding regional characteristics, and identifying adaptation strategies. The guide is meant to allow for flexibility in time, money, and effort available for adaptation across communities.
   
6. Legislative hearings on climate adaptation. In 2015, the Senate Environmental Quality Committee conducted four informational and oversight hearings on climate adaptation in California. The first hearing was focused mainly on state efforts to adapt to climate change impacts. Subsequent hearings focused on regional climate adaptation efforts, with hearings being held in the bay area, central valley, and southern California.
   
   Testimony also underscored the current and worsening impacts from climate change and the need for coordinating knowledge, tools, and funding so that adaptation is approached efficiently and holistically across government levels and regions.
   
   Taken together, these hearings highlighted the broad, cross-sector nature of climate change, which has been called a “threat multiplier,” exacerbating existing public health and environmental quality concerns, particularly for already socially and economically disadvantaged communities. Prior to this, policy conversations about climate adaptation were largely limited to natural resources and infrastructure issues rather than environmental quality or public health issues.
   
7. Environmental quality and public health impacts of a changing climate.
   
   1. Higher temperatures and air quality. Climate change is already causing higher temperatures state-wide, and more frequent and hotter days will lead to worse air quality through increased amounts of ground-level pollutants such as ozone. An analysis of power plants in California showed a 3% increase in NOx emissions per degree Fahrenheit increase in daily temperature (Drechsler et al., 2006). This is due to a variety of factors, including increased energy use to run indoor air conditioning systems.
      
      Higher temperatures and heat waves also increase heat-related illness and death, including 650 deaths in California during heat wave in 2006. Heat waves also directly lead to immediate public health concerns, particularly for those people without either access to air conditioning or enough money to pay for running an air conditioner even if they have access to one.
      
      Extreme events, such as wildfires, can affect air quality by leading to increased concentrations of Particulate Matter (PM), which has been linked to premature death in people with heart and lung disease, as well as aggravating asthma and respiratory symptoms. Scientific modeling has predicted 12-53% increase in large California wildfires by 2100 (Westerling and Bryant, 2006).
      
   2. Water quality. In many regions, hydrological systems are being altered by changes in precipitation and snow pack. Reductions in the Sierra Nevada snowpack are expected from higher temperatures, leading to diminished water reserves. Because of these dwindling water reserves, groundwater pumping may continue to increase and result in an increased concentration of pollutants in drinking water.
      
      For example, nitrate contamination of drinking water, already an acute problem in many areas in the Central Valley, may be further exacerbated, resulting in a much higher fraction of residents who are not able to drink water safely from their tap.
      
      Though overall rain amounts will be reduced, rainfall events are expected to be more extreme, which can overwhelm sewage and water treatment facilities, resulting in decreased water quality.
      
      In coastal areas, rising sea levels can lead to increased salinity in coastal aquifers. Higher salinity of water has reduced usability for both drinking water and agricultural purposes, and desalination procedures are energy-intensive and costly.
      
   3. Infectious and vector-borne diseases and public health impacts. Climate change can further lead to public health impacts by facilitating disease spread and exacerbating chronic health conditions. Already, California has seen an increase in the length of the growing season and pollen production amounts of ragweed, a common cause of severe seasonal allergies.
      
      Increased temperatures can promote bacterial contamination in foods and lead to increases in harmful algal blooms that have been tied to skin, gastrointestinal, respiratory, and neurological signs and symptoms.
      
      Reductions in the number and sizes of recreational bodies of water due to decreased rainfall can further lead to increased concentration of pollutants and bacterial contaminants from more users in fewer and smaller areas.
      
      There is concern about the spread of vector-borne diseases, as the distribution of vectors (e.g. ticks, mosquitoes) carrying pathogens spread into new habitats as regional climates change. Droughts, which will increase with climate change, can also favor mosquito breeding because streams that would normally be flowing become a series of stagnant pools in which mosquitoes breed. For example, previous research has shown that human outbreaks of the mosquito-transmitted Saint Louis encephalitis are correlated with periods of several days when the temperature exceeds 30°C (95°F), as has been the case in previous California epidemics (Githeko et al. 2000).
      
      In addition to expanding habitats, hot temperatures also facilitate the spread of West Nile Virus (WNV) by speeding up both the replication of the virus and the development of the mosquito that carries it. Mosquitoes digest blood meals more rapidly at higher temperatures, leading them to feed more often.
      
   4. Impacts on agriculture. In addition to the effects of drought and severe weather events, climate change can further threaten food production and quality by facilitating diseases spreading to crops from vectors and pests. Combating these threats to food security will likely require increased use of pesticides and fertilizers, which leads to increased GHG emissions and concerns about human health and water quality from runoff and drift. In times of food insecurity and rising prices, people turn to nutrient-poor, calorie-rich foods with health impacts including malnutrition and obesity.
      
8. Adapting to the environmental quality and public health impacts of a changing climate. In order to address the environmental quality and public health impacts and challenges of climate change, Senator Wieckowski authored SB 246 (Wieckowski, Chapter 606, Statutes of 2015). This legislation established a framework for adaptation coordination among state agencies by creating a program within the state’s Office of Planning and Research to bring together state, regional, and local entities. The bill also created a central hub, or clearinghouse, of information and tools to help stakeholders efficiently address adaptation.
   
   The bill also formed an advisory council to provide scientific and technical expertise, and regional and local perspectives, to assist state agencies. The advisory council was just established and consists of 17 non state-affiliated and five agency-affiliated scientific and technical experts. The first meeting of the advisory council took place on March 27, 2017.
   

Comments

1. Purpose of Bill. According to the author, “as the impacts of climate change continue to be felt in California, such as drought, flooding, warmer temperatures, increased wildfires, and the threat of sea level rise along approximately 1,100 miles of California coastline, investments in infrastructure need to take climate change into account.
   
   “Local governments are at the forefront of addressing the impacts of climate change. However, resources and funding are some of the largest barriers to taking action. Enhanced Infrastructure Financing Districts (EIFDs) are a newer financing tool available to local governments that can fill this need and be used to incentivize action to adapt to the changing climate.
   
   “AB 733 would expand the types of projects that can be funded with EIFDs to specifically include projects that enable communities to adapt to the impacts of climate change. These impacts could include, but are not limited to extreme weather events, sea level rise, flooding, heat waves, wildfires, and drought. Explicitly stating that EIFDs can fund these types of projects will create awareness for local governments and will hopefully spur more local governments to adapt to the impacts of climate change.”
   
2. Including, but not limited to. Subdivision (b) of Government Code Section 53398.52 reads as follows (“district” means an EIFD):
   

(b) The district shall finance only public capital facilities or other specified projects of communitywide significance that provide significant benefits to the district or the surrounding community, including, but not limited to, all of the following:

1. Subdivision (b) then contains an impressive16 paragraphs of example projects that are eligible for financing. AB 733 proposes to add a 17^th paragraph to statute clarifying that climate adaptation projects are of communitywide significance that provide significant benefits to the district or the surrounding community and are therefore, eligible to be financed by EIFDs.
   
   Climate adaptation is an important and significant issue that this committee has addressed through legislation and oversight hearings. Although the meaning of “communitywide significance” and “significant benefits” is vague, projects relating to climate adaptation are inarguably both of those things. As such, it must be noted that the “including, but not limited to,” language in GOV §53398.52(b) means such projects are already currently eligible for EIFD financing. The changes made by AB 733 are, therefore, only declaratory of existing law.
   
   As noted in the background, this Committee has held numerous hearing on climate adaptation. Those hearings highlighted the need for greater attention to environmental quality and public health issues in climate adaptation.
   
   It would be appropriate to amend the bill to incorporate the following environmental quality language
   

Projects that enable communities to adapt to the impacts of climate change including, but not limited to, higher average temperatures, decreased air and water quality, the spread of infectious and vector-borne diseases or other public health impacts, extreme weather events, sea level rise, flooding, heat waves, wildfires, and drought.

Related/Prior Legislation

SB 246 (Wieckowski, Chapter 606, Statutes of 2015) established the Climate Advisory Council, with a range of experience, to support OPR by providing scientific and technical support and to facilitate coordination among state, regional, and local agency efforts to adapt to the impacts of climate change.

AB 1482 (Gordon, Chapter 603, Statutes of 2015) requires the CNRA to regularly update the Safeguarding California Plan, requires state agencies to maximize specified objectives across sector vulnerabilities, and requires the Strategic Growth Council (SGC) review activities and funding to meet the priorities of the Plan.

SB 379 (Jackson, Chapter 608, Statutes of 2015) requires local jurisdictions to include climate vulnerability and adaptation considerations in their general plan updates.

AB 313 (Atkins, Chapter 320, Statutes of 2015) clarifies the process for replacing dwelling units and residents displaced by EIFD projects, and makes technical changes to clarify that the public financing authority of an EIFD must remain separate from the legislative body that created the EIFD.

SB 628 (Beall, Wolk, Chapter 785, Statutes of 2014) allows a city or county to create an EIFD to finance specific local infrastructure projects and community public works.

SB 1217 (Leno, Pavley, 2014) would have required the CNRA and SGC to prepare a climate risk assessment and strategy evaluating California’s vulnerability and risk for climate change impacts and to identify and prioritize climate resiliency projects. SB 1217 died in the Assembly Appropriations Committee.

AB 2329 (Ruskin, Chesbro, 2010) would have enacted the CAT Act of 2010 to coordinate oversight of state agency efforts to meet GHG reduction targets, including development and implementation of mitigation and adaptation plans. AB 2329 failed on the Senate Floor.

SB 721 (Steinberg, 2009) was a reintroduction of SB 1760 (Perata, 2008), which was vetoed. SB 721 would also have required the CAT to biennially prepare and adopt a climate change impact mitigation and adaptation plan including specified information. SB 721 died in the Senate Appropriations Committee.

DOUBLE REFERRAL:

This measure was heard in Senate Governance and Finance Committee on June 7, 2017, and passed out of committee with a vote of 5-2.

SOURCE:

Author

SUPPORT:

California Special Districts Association

California State Association of Counties

City of Santa Monica

East Bay Regional Park District

San Francisco Bay Conservation and Development Commission

The Nature Conservancy

U.S. Green Building Council

OPPOSITION:

None received

-- END --

SENATE COMMITTEE ON GOVERNANCE AND FINANCE

Senator Mike McGuire, Chair

2017 - 2018 Regular

Enhanced infrastructure financing districts: projects: climate change

Adds climate change projects to the list of projects that can be financed by an Enhanced Infrastructure Financing District.

Background

Cities and counties can create infrastructure financing districts (IFDs) to 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 (SB 308, Seymour, 1990). To repay the bonds, IFDs can divert property tax increment revenues, which are revenues generated from increases in property values within the IFD above property values in the base-year when the IFD was formed. However, IFDs can’t divert property tax increment revenues from schools.

Until 2011, the Community Redevelopment Law allowed local officials to set up redevelopment agencies (RDAs), prepare and adopt redevelopment plans, and finance redevelopment activities. 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 X1 26 (Blumenfield, 2011) dissolved all RDAs. The California Supreme Court's 2011 ruling in California Redevelopment Association v. Matosantos upheld AB X1 26, but invalidated AB X1 27 (Blumenfield, 2011), which would have allowed most RDAs to avoid dissolution.

After RDAs were dissolved in 2011, local officials sought other ways to use tax increment financing to raise the capital they need to invest in public works projects. In response, the Legislature enacted SB 628 (Beall, 2014) to allow local officials to create Enhanced Infrastructure Financing Districts (EIFDs), which augment the tax increment financing powers available to local government under the IFD statutes. City or county officials can create an EIFD, which is governed by a public finance authority, to finance public capital facilities or other specified projects of communitywide significance that provide significant benefits to the district or the surrounding community.

To create an EIFD, the legislative body of a city or county must adopt a resolution of intention to establish the financing district and its purpose, notify those who will be within the district, produce a proposal for the project and its cost, and hear public comment on the proposal. Once approved, an EIFD can be financed through two revenue streams. Similar to Redevelopment Agencies, EIFDs can utilize a portion of the local property tax revenue growth if the local governments approve it. They may also use revenue that the infrastructure project generates, such as money generated from user fees, public-private partnerships, loans, and grants.

EIFDs cannot finance routine maintenance projects, repair work, or the costs of ongoing operations or services. EIFDs may only finance public infrastructure projects. These projects currently include, but are not limited to, streets and roads, wastewater, libraries, child care facilities, park and recreation, solid waste, among others. To ensure that funding collected by EIFDs can be spent on climate change infrastructure development, the author would like to add projects specific to adapting to changing climate to the enumerated list of authorized infrastructure projects.

Proposed Law

Assembly Bill 733 authorizes EIFDs to finance projects that enable communities to adapt to the impacts of climate change including, but not limited to, extreme weather events, sea level rise, flooding, heat waves, wildfires, and drought.

State Revenue Impact

No estimate.

Comments

1. Purpose of the bill. According to the author, “As the impacts of climate change continue to be felt in California, such as drought, flooding, warmer temperatures, increased wildfires, and the threat of sea level rise along approximately 1,100 miles of California coastline, investments in infrastructure need to take climate change into account. Local governments are at the forefront of addressing the impacts of climate change. However, resources and funding are some of the largest barriers to taking action. EIFDs are a newer financing tool available to local governments that can fill this need and be used to incentivize action to adapt to the changing climate. AB 733 would expand the types of projects that can be funded with EIFDs to specifically include projects that enable communities to adapt to the impacts of climate change. These impacts could include, but are not limited to extreme weather events, sea level rise, flooding, heat waves, wildfires, and drought. Explicitly stating that EIFDs can fund these types of projects will create awareness for local governments and will hopefully spur more local governments to adapt to the impacts of climate change.”
   
2. Let’s be clear. EIFDs can currently finance the development of a wide range of projects as long as the projects are of communitywide significance and provide significant benefits to the area covered by the EIFD or the surrounding community. In addition to the list of specifically authorized projects, EIFD law does not limit the type of projects that can be financed if a communitywide benefit can be established. However, local agencies must state the proposed facilities to be financed when adopting a resolution of intention to create an EIFD. By clearly stating climate change adaptation projects are authorized to be financed by EIFDs, AB 733 helps make clear and avoid any potential confusion as to the eligibility of such a project when adopting a resolution of intention.

Assembly Actions

Assembly Local Government 5-3
Assembly Floor 56-17

Support and Opposition

(6/1/17)

Support: California Special Districts Association; California State Association of Counties; City of Santa Monica; San Francisco Bay Conservation and Development Commission; The Nature Conservancy; U.S. Green Building Council.

Opposition: Unknown.

-- END --

ASSEMBLY THIRD READING

ATR Bill Id:AB 733

Author:(Berman)

As Amended Ver:

Majority vote

SUMMARY: Adds climate change projects to the list of projects that may be financed by an Enhanced Infrastructure Financing District (EIFD). Specifically, this bill:

1. Allows a city or county to create an EIFD to authorize the financing of projects that enable communities to adapt to the impacts of climate change including, but not limited to, extreme weather events, sea level rise, flooding, heat waves, wildfires, and drought.
2. Adds specific language to the findings and declarations contained in EIFD law about funding projects that enable communities to adapt to the impacts of climate change.

EXISTING LAW:

1. Allows cities and counties to create EIFDs.
2. Requires the legislative body of a city or county to adopt a resolution of intention to establish the EIFD.
3. Requires the legislative body of a city or county to notify those who will be within the district of the proposed EIFD and hear public comment on the proposal.
4. Requires the legislative body of a city or county to produce a proposal for the project which details the goal of the project, the cost, and other relevant information.
5. Requires an approval of 55% of the voters within an EIFD if a project is financed through a loan and will accrue debt.
6. Requires EIFDs that incur debt to perform an independent financial and performance audit every two years.
7. Authorizes cities and counties to create EIFDs to finance local infrastructure projects and community public works, including:
   1. Highways, interchanges, ramps and bridges, arterial streets, parking facilities, and transit facilities;
   2. Sewage treatment and water reclamation plants and interceptor pipes;
   3. Facilities for the collection and treatment of water for urban uses;
   4. Flood control levees and dams, retention basins, and drainage channels;
   5. Child care facilities;
   6. Libraries;
   7. Parks, recreation facilities, and open space;
   8. Facilities for the transfer and disposal of solid waste, including transfer stations and vehicles;
   9. Brownfield restoration and other environmental mitigation;
   10. The development of projects on a former military base, provided that the projects are consistent with the military base authority reuse plan and are approved by the military base reuse authority, if applicable;
   11. The repayment of the transfer of funds to a military base reuse authority, pursuant to existing law that occurred on or after the creation of the EIFD;
   12. The acquisition, construction, or rehabilitation of housing for persons of very low, low, and moderate-income, as defined, for rent or purchase;
   13. The acquisition, construction, or repair of industrial structures for private use;
   14. Transit priority projects, as defined in existing law, that are located within a transit priority project area. As defined in existing law, a transit priority project area may include a military base reuse plan that meets the definition of transit priority project area and it may include a contaminated site within a transit priority project area;
   15. Projects that implement a sustainable communities strategy, when the State Air Resources Board has accepted a metropolitan planning organization's determination that the sustainable communities strategy or the alternative planning strategy would, if implemented, achieve the greenhouse gas emission reduction targets; and,
   16. Port or harbor infrastructure, as defined in existing law.

FISCAL EFFECT: None

COMMENTS:

1. Bill Summary. This bill adds climate change projects to the existing list of projects that may be financed by cities or counties through an EIFD. This includes, but is not limited to, projects that enable communities to adapt to extreme weather events, sea level rise, flooding, heat waves, wildfires, and drought. This bill is author-sponsored.
2. Author's Statement. According to the author, "As the impacts of climate change continue to be felt in California, such as drought, flooding, warmer temperatures, increased wildfires, and the threat of sea level rise along approximately 1,100 miles of California coastline, investments in infrastructure need to take climate change into account.

"Local governments are at the forefront of addressing the impacts of climate change. However, resources and funding are some of the largest barriers to taking action. EIFDs are a newer financing tool available to local governments that can fill this need and be used to incentivize action to adapt to the changing climate.

"AB 733 would expand the types of projects that can be funded with EIFDs to specifically include projects that enable communities to adapt to the impacts of climate change. These impacts could include, but are not limited to extreme weather events, sea level rise, flooding, heat waves, wildfires, and drought. Explicitly stating that EIFDs can fund these types of projects will create awareness for local governments and will hopefully spur more local governments to adapt to the impacts of climate change."

1. Background on EIFDs. With the dissolution of Redevelopment Agencies in 2011, cities and counties sought alternate ways to finance local infrastructure projects. In response to this, the Legislature passed SB 628 (Beall), Chapter 785, Statutes of 2014, expanding on existing infrastructure financing districts and authorizing cities and counties to establish EIFDs. These EIFDs allow cities and counties to fund local infrastructure projects.

Whereas Redevelopment Agencies had specific, narrow projects they could finance, EIFDs have a broader range of projects that they may finance, in addition to many of the same powers of Redevelopment Agencies. For example, EIFDs are not required to focus on "blighted areas" like Redevelopment Agencies, and may invest in a number of different projects, such as transportation and water.

To create an EIFD, the legislative body of a city or county must adopt a resolution of intention to establish the financing district, notify those who will be within the district, produce a proposal for the project and its cost, and hear public comment on the proposal. Once approved, an EIFD can be financed through two revenue streams. Similar to Redevelopment Agencies, EIFDs can utilize a portion of the local property tax revenue growth if the local governments approve it. They may also use revenue that the infrastructure project generates, such as money generated from user fees, public-private partnerships, loans, and grants.

EIFDs cannot finance routine maintenance projects, repair work, or the costs of ongoing operations or services. EIFDs may only finance public infrastructure projects. These projects currently include funding the reuse and revitalization of former military bases, the creation of transit priority projects and the implementation of 'sustainable communities' plans, construction and rehabilitation of affordable housing units, and construction of facilities to house providers of consumer goods and services in the communities served by their efforts.

1. Prior Legislation. Though infrastructure financing districts have been in existence since the 1980s, EIFDs, which have broader financing powers for a broader range of projects, are a relatively new tool. Previous legislation includes:
   1. SB 628 (Beall), Chapter 785, Statutes of 2014, allowed a city or county to create an EIFD to finance specific local infrastructure projects and community public works.
   2. AB 313 (Atkins), Chapter 320, Statutes of 2015, clarified the process for replacing dwelling units and residents displaced by EIFD projects, and makes technical changes that clarifies that the public financing authority of an EIFD must remain separate from the legislative body that created the EIFD.
2. Arguments in Support. Supporters argue that adapting to climate change is a necessary tool for local governments. The Nature Conservancy, in support, writes that "by expanding the types of projects that EIFDs can fund to explicitly include environmental projects that address climate adaptation, AB 733 will promote awareness for local governments about the opportunity for funding through EIFDs."
3. Arguments in Opposition. None on file.

Analysis Prepared by: Kim Kollwitz / L. GOV. / (916) 319-3958 FN: 0000118

Date of Hearing: April 5, 2017

ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT

Cecilia Aguiar-Curry, Chair

ABPCA Bill Id:AB 733 (

Author:Berman) – As Amended Ver:March 23, 2017

SUBJECT: Enhanced infrastructure financing districts: projects: climate change.

SUMMARY: Adds climate change projects to the list of projects that may be financed by an Enhanced Infrastructure Financing District (EIFD). Specifically, this bill:

1. Allows a city or county to create an EIFD to authorize the financing of projects that enable communities to adapt to the impacts of climate change including, but not limited to, extreme weather events, sea level rise, flooding, heat waves, wildfires, and drought.
2. Adds specific language to the findings and declarations contained in EIFD law about funding projects that enable communities to adapt to the impacts of climate change.

EXISTING LAW:

1. Allows cities and counties to create EIFDs.
2. Requires the legislative body of a city or county to adopt a resolution of intention to establish the EIFD.
3. Requires the legislative body of a city or county to notify those who will be within the district of the proposed EIFD and hear public comment on the proposal.
4. Requires the legislative body of a city or county to produce a proposal for the project which details the goal of the project, the cost, and other relevant information.
5. Requires an approval of 55% of the voters within an EIFD if a project is financed through a loan and will accrue debt.
6. Requires EIFDs that incur debt to perform an independent financial and performance audit every two years.
7. Authorizes cities and counties to create EIFDs to finance local infrastructure projects and community public works, including:
   1. Highways, interchanges, ramps and bridges, arterial streets, parking facilities, and transit facilities;
   2. Sewage treatment and water reclamation plants and interceptor pipes;
   3. Facilities for the collection and treatment of water for urban uses;
   4. Flood control levees and dams, retention basins, and drainage channels;
   5. Child care facilities;
   6. Libraries;
   7. Parks, recreation facilities, and open space;
   8. Facilities for the transfer and disposal of solid waste, including transfer stations and vehicles;
   9. Brownfield restoration and other environmental mitigation;
   10. The development of projects on a former military base, provided that the projects are consistent with the military base authority reuse plan and are approved by the military base reuse authority, if applicable;
   11. The repayment of the transfer of funds to a military base reuse authority, pursuant to existing law that occurred on or after the creation of the EIFD;
   12. The acquisition, construction, or rehabilitation of housing for persons of very low, low, and moderate-income, as defined, for rent or purchase;
   13. The acquisition, construction, or repair of industrial structures for private use;
   14. Transit priority projects, as defined in existing law, that are located within a transit priority project area. As defined in existing law, a transit priority project area may include a military base reuse plan that meets the definition of transit priority project area and it may include a contaminated site within a transit priority project area;
   15. Projects that implement a sustainable communities strategy, when the State Air Resources Board has accepted a metropolitan planning organization's determination that the sustainable communities strategy or the alternative planning strategy would, if implemented, achieve the greenhouse gas emission reduction targets; and,
   16. Port or harbor infrastructure, as defined in existing law.

FISCAL EFFECT: None

COMMENTS:

1. Bill Summary. This bill adds climate change projects to the existing list of projects that may be financed by cities or counties through an EIFD. This includes, but is not limited to, projects that enable communities to adapt to extreme weather events, sea level rise, flooding, heat waves, wildfires, and drought. This bill is author-sponsored.
2. Author’s Statement. According to the author, “As the impacts of climate change continue to be felt in California, such as drought, flooding, warmer temperatures, increased wildfires, and the threat of sea level rise along approximately 1,100 miles of California coastline, investments in infrastructure need to take climate change into account.
   
   “Local governments are at the forefront of addressing the impacts of climate change.   However, resources and funding are some of the largest barriers to taking action.  EIFDs are a newer financing tool available to local governments that can fill this need and be used to incentivize action to adapt to the changing climate.
   
   “AB 733 would expand the types of projects that can be funded with EIFDs to specifically include projects that enable communities to adapt to the impacts of climate change. These impacts could include, but are not limited to extreme weather events, sea level rise, flooding, heat waves, wildfires, and drought. Explicitly stating that EIFDs can fund these types of projects will create awareness for local governments and will hopefully spur more local governments to adapt to the impacts of climate change.”
3. Background on EIFDs. With the dissolution of Redevelopment Agencies in 2011, cities and counties sought alternate ways to finance local infrastructure projects. In response to this, the Legislature passed SB 628 (Beall), Chapter 785, Statutes of 2014, expanding on existing infrastructure financing districts and authorizing cities and counties to establish EIFDs. These EIFDs allow cities and counties to fund local infrastructure projects.
   
   Whereas Redevelopment Agencies had specific, narrow projects they could finance, EIFDs have a broader range of projects that they may finance, in addition to many of the same powers of Redevelopment Agencies. For example, EIFDs are not required to focus on “blighted areas” like Redevelopment Agencies, and may invest in a number of different projects, such as transportation and water.
   
   To create an EIFD, the legislative body of a city or county must adopt a resolution of intention to establish the financing district, notify those who will be within the district, produce a proposal for the project and its cost, and hear public comment on the proposal. Once approved, an EIFD can be financed through two revenue streams. Similar to Redevelopment Agencies, EIFDs can utilize a portion of the local property tax revenue growth if the local governments approve it. They may also use revenue that the infrastructure project generates, such as money generated from user fees, public-private partnerships, loans, and grants.
   
   EIFDs cannot finance routine maintenance projects, repair work, or the costs of ongoing operations or services. EIFDs may only finance public infrastructure projects. These projects currently include funding the reuse and revitalization of former military bases, the creation of transit priority projects and the implementation of ‘sustainable communities’ plans, construction and rehabilitation of affordable housing units, and construction of facilities to house providers of consumer goods and services in the communities served by their efforts.
4. Prior Legislation. Though infrastructure financing districts have been in existence since the 1980s, EIFDs, which have broader financing powers for a broader range of projects, are a relatively new tool. Previous legislation includes:
   1. SB 628 (Beall), Chapter 785, Statutes of 2014, allowed a city or county to create an EIFD to finance specific local infrastructure projects and community public works.
   2. AB 313 (Atkins, 2015), Chapter 320, Statutes of 2015, clarified the process for replacing dwelling units and residents displaced by EIFD projects, and makes technical changes that clarifies that the public financing authority of an EIFD must remain separate from the legislative body that created the EIFD.
5. Arguments in Support. Supporters argue that adapting to climate change is a necessary tool for local governments. The Nature Conservancy, in support, writes that “by expanding the types of projects that EIFDs can fund to explicitly include environmental projects that address climate adaptation, AB 733 will promote awareness for local governments about the opportunity for funding through EIFDs.”
6. Arguments in Opposition. None on file.

REGISTERED SUPPORT / OPPOSITION:

Support

California State Association of Counties (CSAC)

The Nature Conservancy

Opposition

None on file

Analysis Prepared by: Kim Kollwitz / L. GOV. / (916) 319-3958