AB 901: Affordable housing financing districts.

Existing law authorizes the legislative body of a city or a county to propose the establishment of an enhanced infrastructure financing district, in accordance with specified procedures, to finance public capital facilities or other specified projects of communitywide significance, including, but not limited to, the acquisition, construction, or rehabilitation of housing for persons of low and moderate income for rent or purchase.

This bill would authorize the legislative body of a city or county to propose the establishment of an affordable housing financing authority by adopting a resolution of intention to form a district that complies with specified requirements. The bill would limit the activities of a district established pursuant to these provisions to financing the development of affordable housing, as defined, within its territorial boundaries, infrastructure to support that housing, and specified related costs. The bill would require the legislative body of the city or county proposing the establishment of a district to serve as the governing board of the district. The bill would require the city or county engineer, or other appropriate official designated by the governing board of the district, to prepare an affordable housing financing plan, as provided. The bill would authorize the affordable housing financing plan to include a provision for the division of taxes, except as provided. The bill would require a district to spend at least 80% of its funding derived from the division of taxes on affordable housing and would prohibit the district from spending more than 20% of those funds on affordable housing-related infrastructure.

This bill would authorize an affordable housing finance district to enter into a contract with the California Housing Finance Agency (CalHFA) that includes specified provisions, including a provision requiring the district to remit the entirety of the amount allocated to it by a division of taxes to CalHFA and that CalHFA will transfer that amount to the custody of the Treasurer for deposit in the Affordable Housing Tax Increment Pooling Trust Fund (trust fund), which this bill would create and continuously appropriate to CalHFA. The bill would require CalHFA to issue revenue bonds, in accordance with specified procedures, secured by moneys in the trust fund and allocate the proceeds of those bonds to districts with which it has a contract in proportion to the amount remitted by each district. The bill would specify that moneys in the trust fund are nonstate moneys and are instead the property of, and held in trust on behalf of, the districts that contract with CalHFA under these provisions. The bill would require that a district use the proceeds of revenue bonds allocated to it pursuant to these provisions for those purposes enumerated in the affordable housing financing plan.

This bill would also establish the Affordable Housing Financing Fund and make the moneys in that fund available to CalHFA upon appropriation by the Legislature. The bill would also create the Tax Increment Pooling Loss Reserve Account (loss reserve account). The bill, upon appropriation in the annual Budget Act, would require the Controller to transfer moneys from the loss reserve account to the trust fund in any fiscal year in which CalHFA notifies the Joint Legislative Budget Committee that there are insufficient moneys in the trust fund to pay the debt service on the revenue bonds, as described above.

The bill would make various conforming changes to other laws relating to state moneys and the division of taxes by local agencies to issue revenue bonds.

By adding to the duties of county auditors with respect to the allocation of property tax revenues, this bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.