AB 901: Affordable housing financing districts.
- Session Year: 2023-2024
- House: Assembly
- Latest Version Date: 2023-05-01
Current Status:
Failed
(2024-02-01: From committee: Filed with the Chief Clerk pursuant to Joint Rule 56.)
Introduced
In Committee
First Chamber
In Committee
Second Chamber
Enacted
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.
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.
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.
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.
This bill would authorize an affordable housing finance district to enter into a contract with ____ 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 ____ and that ____ 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 ____ . The bill would require ____ 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 ____ 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 ____ 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 ____ 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.
Under existing law, all money in the possession of or collected by any state agency or department is state money, as defined, and is subject to provisions governing its deposit and handling in trust accounts. Existing law creates the State Treasury System to deposit state moneys held by state agencies prior to expenditure. Existing law, except as otherwise authorized by statute, makes it a misdemeanor, punishable by up to one year in a county jail or a $2,500 fine, or both, for any state employee to knowingly transfer, expend, or use state money outside of the State Treasury System.This bill would instead make the knowing transfer by a state employee, as described above, punishable by up to one year in a county jail or a $3,000 fine, or both.Under existing law, all money in the possession of or collected by any state agency or department is state money, as defined, and is subject to provisions governing its deposit and handling in trust accounts. Existing law creates the State Treasury System to deposit state moneys held by state agencies prior to expenditure. Existing law, except as otherwise authorized by statute, makes it a misdemeanor, punishable by up to one year in a county jail or a $2,500 fine, or both, for any state employee to knowingly transfer, expend, or use state money outside of the State Treasury System.
This bill would instead make the knowing transfer by a state employee, as described above, punishable by up to one year in a county jail or a $3,000 fine, or both.
(a)All money in the possession of or collected by any state agency or department, except for money in the Local Agency Investment Fund or the Affordable Housing Tax Increment Pooling Trust Fund, is subject to Sections 16305.3 to 16305.7, inclusive, and is hereafter referred to as state money.
(b)Except as otherwise provided by this chapter or authorized by statute, any transfer, expenditure, or other use of state money knowingly committed by a state employee, outside of the State Treasury System is a misdemeanor, punishable by up to one year in a county jail, or a two-thousand-five-hundred-dollar ($2,500) fine, or both.
SEC. 2.Section 16305.10 is added to the Government Code, to read:16305.10.(a)All money in the Affordable Housing Tax Increment Pooling Trust Fund shall be held in trust in the custody of the Treasurer.
(b)All money in the Affordable Housing Tax Increment Pooling Trust Fund is nonstate money. That money shall be held in a trust account or accounts. The Controller shall be responsible for maintaining those accounts to record the Treasurers accountability, and shall maintain a separate account for each trust deposit in the Affordable Housing Tax Increment Pooling Trust Fund.
(c)Moneys in the Affordable Housing Tax Increment Pooling Trust Fund subject to this section shall be subject to audit by the Department of Finance and to cash count as provided for in Sections 13297, 13298, and 13299. It may be withdrawn only upon the order of the depositing entity or its disbursing officers. The system that the Director of Finance has established for the handling, receiving, holding, and disbursing of state agency money shall also be used for the money in the Affordable Housing Tax Increment Pooling Trust Fund.
SEC. 3.Section 53993 of the Government Code is amended to read:53993.(a)Notwithstanding any other law, except as provided in subdivision (b), for the purpose of any law authorizing the division of taxes levied upon taxable property, including, but not limited to, Sections 53369.30, 53396, 53398.30, 53398.75, and 62005, no revenues derived from the imposition of a property tax rate approved by the voters pursuant to subdivision (b) of Section 1 of Article XIIIA of the California Constitution and levied in addition to the property tax rate limited by subdivision (a) of Section 1 of Article XIIIA of the California Constitution shall be divided.
(b)Subdivision (a) shall not apply to either of the following:
(1)The allocation of property taxes pursuant to Part 1.85 (commencing with Section 34170) of Division 24 of the Health and Safety Code.
(2)The division of taxes authorized by Section 53394.30.
SEC. 4.Chapter 2.75 (commencing with Section 53394.01) is added to Part 1 of Division 2 of Title 5 of the Government Code, to read:2.75.Affordable Housing Financing Districts1.General Provisions53394.01.For purposes of this chapter:
(a)Affected taxing entity means any governmental taxing agency that levied or had levied on its behalf a property tax on all or a portion of the property located in the proposed district in the fiscal year before to the designation of the district. An affected taxing entity does not include a special district unless the special district adopts a resolution approving the affordable housing financing plan pursuant to subdivision (c) of Section 53394.16. Affected taxing entity does not include a school district of every class or kind, including, but not limited to, a unified or nonunified school district, that maintains kindergarten and grades 1 to 12, inclusive, community college districts, or county office of education.
(b)Affected taxing entity equity amount means the amount of ad valorem property tax revenue that the affected taxing entity would have received from property located within the redevelopment project area in the absence of the affordable housing financing district, calculated pursuant to subdivision (e) of Section 53394.31.
(c)Affordable housing means owner-occupied either of the following:
(1)Owner-occupied housing with an affordable housing cost or rental cost, as provided in Section 50052.5 of the Health and Safety Code, to persons and families whose income does not exceed 120 percent of the area median income, as determined pursuant to Section 50093 of the Health and Safety Code.
(2)Rental housing with an affordable rent, as provided in Sections 50052.5 and 50053, respectively, Section 50053 of the Health and Safety Code, to persons and families whose income does not exceed 60 80 percent of the area median income, as determined pursuant to Section 50093 of the Health and Safety Code.
(d)Affordable housing financing district means a legally constituted governmental entity separate and distinct from the city or county that established it pursuant to this chapter for the sole purpose of financing affordable housing and related infrastructure as authorized by this chapter. An affordable housing financing district shall be a local agency for purposes of the Ralph M. Brown Act (Chapter 9 (commencing with Section 54950)).
(e)Affordable housing-related infrastructure includes, but is not limited to, all of the following:
(1)Below ground utilities.
(2)Items included in a circulation element adopted pursuant to subdivision (b) of Section 65302, including streets, sidewalks, bike lanes, and lighting.
(3)Curbs and gutters.
(4)Parks.
(e)(f)Agency means the California Housing Finance Agency.
(f)(g)Debt means any binding obligation to repay a sum of money, including obligations in the form of bonds, certificates of participation, long-term leases, loans from government agencies, or loans from banks, other financial institutions, private businesses, or individuals.
(g)(h)Designated official means the city or county engineer or other appropriate official designated pursuant to Section 53394.14.
(h)(i)District means an affordable housing financing district.
(i)(j)Fiscal year means a year beginning on July 1 and ending the following June 30.
(j)(k)Governing board means the legislative body of the city or county that establishes a district pursuant to this chapter acting as the governing board of that district.
(k)(l)Landowner or owner of land means any person shown as the owner of land on the last equalized assessment roll or otherwise known to be the owner of the land by the legislative body. The legislative body has no obligation to obtain other information as to the ownership of land, and its determination of ownership shall be final and conclusive for the purposes of this chapter. A public agency is not a landowner or owner of land for purposes of this chapter, unless the public agency owns all of the land to be included within the proposed district.
(l)(m)Legislative body means the city council of the city or board of supervisors of the county.
(m)(n)Project means any undertaking of a district pursuant to this chapter.
(n)(o)Special district means an agency of the state formed for the performance of governmental or proprietary functions within limited geographic boundaries.
2.District Formation and Affordable Housing Financing Plan53394.10.(a)Subject to Section 53394.11, a legislative body of a city or county may propose the establishment of a district pursuant to this chapter. The legislative body of the city or county may institute proceedings for the establishment of a district by adopting a resolution of intention to establish the proposed district. The legislative body shall include all of the following in the resolution of intention:
(1)State that the legislative body proposes the establishment of an affordable housing financing district under the terms of this chapter and describe the boundaries of the proposed district. The requirements of this paragraph may be accomplished by reference to a map on file in the office of the clerk of the city or in the office of the recorder of the county, as applicable.
(2)State the type of affordable housing projects and related infrastructure proposed to be financed or assisted by the district in accordance with Section 53394.21.
(3)State the need for the district and the goals the district proposes to achieve.
(4)State that incremental property tax revenue from the city or county and all affected taxing entities within the district, if approved by resolution pursuant to Section 53394.16, may be used to finance these activities.
(5)Fix a time and place for a public hearing on the proposal.
(b)Upon adoption of a resolution of intention pursuant to this section, the legislative body shall act as the governing board of the district.
53394.11.A city or county that created a redevelopment agency, as defined in Section 33003 of the Health and Safety Code, shall neither initiate the creation of a district, nor participate in the governance or financing of a district, until each of the following has occurred:
(a)The successor agency for the former redevelopment agency created by the city or county has received a finding of completion, as specified in Section 34179.7 of the Health and Safety Code.
(b)The city or county certifies to the Department of Finance and to the governing board that no former redevelopment agency assets that are the subject of litigation involving the state, where the city or county, the successor agency, or the designated local authority are a named plaintiff, have been or will be used to benefit any efforts of an affordable housing financing district formed under this chapter, unless the litigation and all possible appeals have been resolved in a court of law. The city or county shall provide this certification to the Department of Finance within 10 days of its legislative bodys action to participate in an affordable housing financing district, or of a governing boards action to form an affordable housing financing district, pursuant to subdivision (d) of Section 53394.16.
(c)The office of the Controller has completed its review as specified in Section 34167.5 of the Health and Safety Code.
(d)The successor agency and the entity that created the former redevelopment agency have complied with all of the office of the Controllers findings and orders stemming from the reviews as specified in subdivision (c).
53394.12.(a)(1)A city or county may establish more than one district within its jurisdictional boundaries, but the city or county shall not merge existing districts or establish a new district that includes any area within the boundaries of another district. However, a city or county may establish districts with adjoining boundaries.
(2)A district may include any portion of a former redevelopment project area that was previously created pursuant to Part 1 (commencing with Section 33000) of Division 24 of the Health and Safety Code, provided that the city or county that created the former redevelopment agency has met the requirements of Section 53394.11.
(b)A district may finance only the facilities authorized in this chapter to the extent that the facilities are in addition to those provided in the territory of the district before the district was created. The district shall not finance additional facilities that supplant facilities already available within that territory when the district was created, but may supplement, rehabilitate, upgrade, or make more sustainable those facilities.
(c)A district may include areas that are not contiguous.
53394.13.(a)(1)The legislative body shall direct the city official or county official, as applicable, selected by the legislative body, to mail a copy of the resolution of intention to create the district to each owner of land within the district.
(2)As an alternative to mailing a copy of the resolution of intention pursuant to paragraph (1), the legislative body may direct the city official or county official, as applicable, selected by the legislative body, to mail a single-page notice of intention to create the district to each owner of land within the district. For purposes of this section, the notice of intention shall indicate the physical location or internet website where documents related to the district, including the resolution of intention, will be made available for public viewing or inspection. The notice of intention shall also state the date of the public hearing on the proposal and include a brief description of the types of public facilities to be financed by the district.
(b)The legislative body shall direct the city official or county official, as applicable, selected by the legislative body, to mail a copy of the resolution to each affected taxing entity.
53394.14.Upon adoption of the resolution of intention to establish the district by the legislative body pursuant to Section 53394.10, the governing board shall designate and direct the city or county engineer or other appropriate official to prepare an affordable housing financing plan pursuant to subdivision (a) of Section 53394.15.
53394.15.(a)After receipt of a copy of the resolution of intention to establish a district, the designated official shall prepare a proposed affordable housing financing plan. The proposed affordable housing financing plan shall be consistent with the general plan of the city or county within which the district is located and shall include all of the following:
(1)A map and legal description of the proposed district, which may include all or a portion of the district designated by the legislative body in its resolution of intention.
(2)A description of the affordable housing and related infrastructure, as described in Section 53394.21, that is proposed in the area of the district.
(3)If funding from affected taxing entities is incorporated into the financing plan, a finding that the development and financial assistance are of communitywide significance and provide significant benefits to an area larger than the area of the district.
(4)A financing section, which shall contain all of the following information:
(A)A specification of the amount of the incremental tax revenue of the city or county and of each affected taxing entity proposed to be committed to the district for each year during which the district will receive incremental tax revenue.
(B)A projection of the amount of tax revenues expected to be received by the district in each year during which the district will receive tax revenues, including an estimate of the amount of tax revenues attributable to each affected taxing entity for each year.
(C)A plan for financing the affordable housing and related infrastructure to be assisted by the district, including a detailed description of any intention to incur debt.
(D)A statement on the total number of dollars of taxes that may be allocated to the district pursuant to the plan.
(E)A date on which the district will cease to exist, by which time all tax allocation to the district will end. The date shall not be more than 45 years from the effective date of an initial contract with the agency pursuant to Section 53394.40.
(b)The affordable housing financing plan, prepared in accordance with subdivision (a), shall be sent to each owner of land within the proposed district and to each affected taxing entity together with any report required by the California Environmental Quality Act (Division 13 (commencing with Section 21000) of the Public Resources Code) that pertains to the proposed affordable housing and related infrastructure projects, and shall be made available for public inspection. The report shall also be sent to the governing board, the planning commission, and the legislative body.
(c)The designated official shall consult with each affected taxing entity, and, at the request of any affected taxing entity, shall meet with representatives of an affected taxing entity. Any affected taxing entity may suggest revisions to the plan.
53394.16.(a)The governing board shall conduct a public hearing before adopting the proposed affordable housing financing plan. The governing board shall call the public hearing no sooner than 60 days after the plan has been sent to each affected taxing entity. In addition to the notice given to landowners and affected taxing entities pursuant to Section 53394.13, the governing board shall give notice of the public hearing by publication not less than once a week for four successive weeks in a newspaper of general circulation published in the city or county in which the proposed district is located. The notice shall state all of the following:
(1)That the district will be used to finance public facilities or development.
(2)Briefly describe the public facilities or development.
(3)Briefly describe the proposed financial arrangements, including the proposed commitment of incremental tax revenue.
(4)Describe the boundaries of the proposed district.
(5)State the day, hour, and place when and where any persons having any objections to the proposed affordable housing financing plan, or the regularity of any of the prior proceedings, may appear before the governing board and object to the adoption of the proposed plan by the governing board.
(b)At the hour set in the required notices, the governing board shall proceed to hear and pass upon all written and oral objections. The governing board may continue the hearing from time to time. The governing board shall consider the recommendations, if any, of affected taxing entities, and all evidence and testimony for and against the adoption of the plan. The governing board may modify the plan.
(c)(1)The governing body shall not adopt a resolution adopting the affordable housing financing plan providing for the division of taxes of any affected taxing entity pursuant to Article 4 (commencing with Section 53394.30) unless a resolution approving the plan has been adopted by the governing body of each affected taxing entity that is proposed to be subject to the division of taxes pursuant to Article 4 (commencing with Section 53394.30) has been filed with the governing body at or prior to the time of the hearing.
(2)Nothing in this subdivision shall be construed to prevent the governing body from amending the affordable housing financing plan without allocation of the tax revenues of any affected taxing entity that has not approved the affordable housing financing plan by resolution of the governing body of the affected taxing entity.
(d)At the conclusion of the hearing, the governing board may adopt a resolution adopting the affordable housing financing plan, as modified, and formation of the affordable housing financing district, or it may adopt a resolution abandoning the proceedings. If the proceedings are abandoned, then the governing board shall cease to exist by operation of this section with no further action required of the legislative body and the legislative body shall not enact a resolution of intention to establish a district that includes the same geographic area within one year of the date of the resolution abandoning the proceedings.
53394.17.The affordable housing financing plan shall take effect upon the adoption of the resolution adopting the plan pursuant to Section 53394.16. The affordable housing financing plan shall specify if the district shall be funded solely through the districts share of tax increment, governmental or private loans, grants, bonds, assessments, fees, or some combination thereof. However, the governing board shall not levy assessments or fees that may be included in the affordable housing financing plan unless the governing board complies with the procedures specified in subdivision (f) of Section 53394.30 for the levying of assessments or fees to finance the affordable housing financing plan.
53394.18.Any action or proceeding to attack, review, set aside, void, or annul the creation of a district, adoption of an affordable housing financing plan, including a division of taxes thereunder, shall be commenced within 30 days after the enactment of the resolution creating the district pursuant to Section 53394.16. Consistent with the time limitations of this section, an action or proceeding with respect to a division of taxes under this chapter may be brought pursuant to Chapter 9 (commencing with Section 860) of Title 10 of Part 2 of the Code of Civil Procedure.
3.Governing Board and District Powers53394.20.(a)The legislative body of the county or city that established the district shall serve as the governing board of the district.
(b)Members of the governing board established pursuant to this chapter shall not receive compensation but may receive reimbursement for actual and necessary expenses incurred in the performance of official duties pursuant to Article 2.3 (commencing with Section 53232) of Chapter 2.
(c)Members of the governing are subject to Article 2.4 (commencing with Section 53234) of Chapter 2.
(d)The governing board created pursuant to this chapter shall be a local public agency subject to the Ralph M. Brown Act (Chapter 9 (commencing with Section 54950)), the California Public Records Act (Chapter 1 (commencing with Section 7920.000) of Part 1 of Division 10 of Title 1), and the Political Reform Act of 1974 (Title 9 (commencing with Section 81000)).
53394.21.(a)(1)The activities of a district established pursuant to this chapter shall be limited to financing the development of affordable housing and housing-related infrastructure, as described in this section, within its territorial boundaries. In connection with the development of affordable housing and related infrastructure, the district may finance any of the following:
(A)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.
(B)The planning and design work that is directly related to the purchase, construction, expansion, or rehabilitation of affordable housing.
(C)Water, sewer, or other public infrastructure affordable housing-related infrastructure necessary to support the development of affordable housing pursuant to this chapter.
(D)The costs described in Sections 53394.16, 53394.22, 53394.23, and 53394.32.
(E)The ongoing or capitalized costs to maintain public capital facilities financed in whole or in part by the district.
(2)A district may not do either of the following in connection with the development of affordable housing and related infrastructure:
(A)Finance services of any kind.
(B)Use the proceeds of bonds issued to finance the costs of maintenance or ongoing operations of any kind.
(3)The affordable housing and housing-related infrastructure financed by the district are not required to be physically located within the boundaries of the district. However, any affordable housing and housing-related infrastructure financed outside of a district shall have a tangible connection to the work of the district, as detailed in the affordable housing financing plan adopted pursuant to Section 53394.16.
(b)For district funds derived from incremental tax revenues, both of the following shall apply:
(1)At least 80 percent of the funds shall be spent on the construction, acquisition, and preservation of affordable housing.
(2)No more than 20 percent of the funds shall be spent on affordable housing-related infrastructure necessary to support the development of affordable housing.
(b)(c)The district shall require, by recorded covenants or restrictions, that housing units built pursuant to this section shall remain affordable housing for the longest feasible time, but for not less than 55 years for rental units and 45 years for owner-occupied units.
(c)(d)The district may finance mixed-income housing developments, but may finance only those units in such a development that constitute affordable housing for purposes of this chapter, and those onsite facilities for childcare, after school care, and social services that are integrally linked to the tenants of those affordable housing units.
(d)(e)A district may utilize any powers under either the Polanco Redevelopment Act (Article 12.5 (commencing with Section 33459) of Chapter 4 of Part 1 of Division 24 of the Health and Safety Code) or Chapter 6.10 (commencing with Section 25403) of Division 20 of the Health and Safety Code, and finance any action necessary to implement that act.
(e)(f)A district shall not incur debt in the form of bonds secured by revenues allocated to it pursuant to Section 53394.30.
53394.22.A district may reimburse a developer of a project that is located entirely within the boundaries of that district for any permit expenses incurred and to offset additional expenses incurred by the developer in constructing affordable housing units pursuant to the Transit Priority Project Program established in Section 65470.
53394.23.It is the intent of the Legislature that the creation of the districts should not ordinarily lead to the removal of existing dwelling units. If, however, any dwelling units are proposed to be removed or destroyed in the course of public works construction within the area of the district or private development within the area of the district that is subject to a written agreement with the district or that is financed in whole or in part by the district then the affordable housing financing plan adopted pursuant to subdivision (d) of Section 53394.16 shall contain provisions to do all of the following:
(a)If the dwelling units to be removed or destroyed are or were inhabited by persons or families of very low, low, or moderate income, as defined in Sections 50105 and 50093 of the Health and Safety Code, at any time within five years prior to establishment of the district, cause or require the construction or rehabilitation of an equal number of replacement dwelling units, within one-half mile of the location of the units to be removed or destroyed, that have an equal or greater number of bedrooms as those removed or destroyed units, within two years of the removal or destruction of the dwelling units. The replacement dwelling units shall be available for rent or sale to persons or families of very low, low, or moderate income, at affordable rent, as defined in Section 50053 of the Health and Safety Code, or at affordable housing cost, as defined in Section 50052.5 of the Health and Safety Code, to persons in the same or a lower income category (extremely low, very low, low, or moderate), as the persons displaced from, or who last occupied, the removed or destroyed dwelling units.
(b)If the dwelling units to be removed or destroyed were not inhabited by persons of low or moderate income within the period of time specified in subdivision (a), cause or require the construction or rehabilitation within one-half mile of the location of the units to be removed or destroyed of at least one unit but not less than 25 percent of the total dwelling units removed or destroyed, within two years of the removal or destruction of the dwelling units. The units constructed or rehabilitated pursuant to this subdivision shall be of equivalent size and type to the units to be removed or destroyed. An equal percentage of the replacement dwelling units constructed or rehabilitated pursuant to this subdivision shall be available for rent or sale at affordable rent, as defined in Section 50053 of the Health and Safety Code, or affordable housing cost, as defined in Section 50052.5 of the Health and Safety Code, to extremely low and very low income persons or families, as defined in Sections 50106 and 50105 of the Health and Safety Code.
(c)Comply with all relocation assistance requirements of Chapter 16 (commencing with Section 7260) of Division 7 of Title 1, for persons displaced from dwelling units by any public works construction within the area of the district or private development within the area of the district that is subject to a written agreement with the district or that is financed in whole or in part by the district as a result of the affordable housing financing plan adopted pursuant to subdivision (d) of Section 53394.16. The displacement of any persons from a dwelling unit as a result of the plan shall be deemed to be the result of public action.
(d)Ensure that removal or destruction of any dwelling units occupied by persons or families of low or moderate income not take place unless and until there has been full compliance with the relocation assistance requirements of this section, Section 53394.15, and Chapter 16 (commencing with Section 7260) of Division 7 of Title 1.
(e)(1)Except as otherwise provided in paragraph (2), the district shall require, by recorded covenants or restrictions, that all dwelling units constructed or rehabilitated pursuant to this section shall remain available at affordable rent or housing cost to, and occupied by, persons and families of the same income categories as required by subdivision (a) or (b), as applicable, for the longest feasible time, but for not less than 55 years for rental units and 45 years for owner-occupied units.
(2)The district may permit sales of owner-occupied units before the expiration of the 45-year period for a price in excess of that otherwise permitted under this subdivision pursuant to an adopted program that protects the districts investment of moneys in the unit or units, including, but not limited to, an equity sharing program that is not in conflict with another public funding source or law, and that establishes a schedule of equity sharing that permits retention by the seller of a portion of those excess proceeds based on the length of occupancy. For purposes of this paragraph, the terms of the equity sharing program shall be consistent with the provisions of paragraph (2) of subdivision (c) of Section 65915, provided, however, that the program shall require any amounts recaptured by the district to be used within five years for any of the affordable housing purposes described in paragraph (3) of subdivision (a) of Section 34176.1 of the Health and Safety Code.
53394.24.(a)No more than six months after the end of the districts fiscal year, the district shall file a report with the governing board and the Department of Housing and Community Development containing the following information, regardless of whether each activity is funded exclusively by the state or federal government:
(1)The total number of nonelderly and elderly households, including separate subtotals of the numbers of very low income households, other lower income households, and persons and families of moderate income, that were displaced or moved from their dwelling units as part of an affordable housing or housing-related infrastructure project of the district during the previous fiscal year.
(2)The total number of nonelderly and elderly households, including separate subtotals of the numbers of very low income households, other lower income households, and persons and families of moderate income, that the district estimates will be displaced or will move from their dwellings as part of an affordable housing or housing-related infrastructure project of the district during the present fiscal year and the date of adoption of a replacement housing portion of the affordable housing financing plan required by Section 53394.23.
(3)The total number of dwelling units housing very low income households, other lower income households, and persons and families of moderate income, respectively, which have been destroyed or removed from the low- or moderate-income housing market during the previous fiscal year as part of an affordable housing or housing-related infrastructure project of the district, specifying the number of those units that are not subject to the replacement requirements of Section 53394.23.
(4)The total numbers of district-assisted dwelling units that were constructed, rehabilitated, acquired, or subsidized during the previous fiscal year for occupancy at an affordable housing cost by elderly persons and families, but only if the units are restricted by agreement or ordinance for occupancy by the elderly, and by very low income households, other lower income households, and persons and families of moderate income, respectively, specifying those units that are not currently so occupied, those units that have replaced units destroyed or removed pursuant to Section 53394.23, and the length of time any agency-assisted units are required to remain available at affordable costs.
(5)The total numbers of new or rehabilitated units subject to Section 53394.23, including separate subtotals of the number originally affordable to and currently occupied by, elderly persons and families, but only if the units are restricted by agreement or ordinance for occupancy by the elderly, and by very low income households, other lower income households, and persons and families of moderate income, respectively, and the length of time these units are required to remain available at affordable costs.
(6)The total amount of funds expended for planning and general administrative costs.
(7)Any other information that the agency believes useful to explain its housing programs.
(8)The total number of affordable housing units to be constructed under the terms of an executed agreement or contract and the name and execution date of the agreement or contract. These units may only be reported for a period of two years from the execution date of the agreement or contract.
(b)As used in this section:
(1)Elderly, has the same meaning as specified in Section 50067 of the Health and Safety Code.
(2)Persons and families of moderate income, has the same meaning as specified in subdivision (b) of Section 50093 of the Health and Safety Code.
(3)Other lower income households, has the same meaning as lower income households as specified in Section 50079.5 of the Health and Safety Code, exclusive of very low income households.
(4)Persons and families of low or moderate income, has the same meaning as specified in Section 50093 of the Health and Safety Code.
(5)Very low income households, has the same meaning as specified in Section 50105 of the Health and Safety Code.
4.Division of Taxes53394.30.(a)An affordable housing financing plan may contain a provision that taxes, if any, levied upon taxable property in the area included within the district each year by or for the benefit of the State of California, or any affected taxing entity after the effective date of the resolution adopted pursuant to subdivision (d) of Section 53394.16 to create the district, shall be divided as follows:
(1)That portion of the taxes that would be produced by the rate upon which the tax is levied each year by or for each of the affected taxing entities upon the total sum of the assessed value of the taxable property in the district as shown upon the assessment roll used in connection with the taxation of the property by the affected taxing entity, last equalized before the effective date of the resolution adopted pursuant to subdivision (d) of Section 53394.16 to create the district, shall be allocated to, and when collected shall be paid to, the respective affected taxing entities as taxes by or for the affected taxing entities on all other property are paid.
(2)That portion of the levied taxes each year in excess of the amount specified in paragraph (1) shall be allocated to, and when collected shall be paid into a special fund of, the district for all lawful purposes of the district. Unless and until the total assessed valuation of the taxable property in a district exceeds the total assessed value of the taxable property in the district as shown by the last equalized assessment roll referred to in paragraph (1), all of the taxes levied and collected upon the taxable property in the district shall be paid to the respective affected taxing entities. When the district ceases to exist pursuant to the adopted affordable housing financing plan, all moneys thereafter received from taxes upon the taxable property in the district shall be paid to the respective affected taxing entities as taxes on all other property are paid.
(b)Notwithstanding subdivision (a), where any district boundaries overlap with the boundaries of any former redevelopment project area, any debt or obligation of a district shall be subordinate to any and all enforceable obligations of the former redevelopment agency, as approved by the Oversight Board and the Department of Finance. For the purposes of this chapter, the division of taxes allocated to the district pursuant to subdivision (a) shall not include any taxes required to be deposited by the county auditor-controller into the Redevelopment Property Tax Trust Fund created pursuant to subdivision (b) of Section 34170.5 of the Health and Safety Code.
(c)The legislative body of the city or county forming the district may choose to dedicate any portion of its net available revenue to the district through the financing plan described in Section 53394.15.
(d)For the purposes of this section, net available revenue means periodic distributions to the city or county from the Redevelopment Property Tax Trust Fund, created pursuant to Section 34170.5 of the Health and Safety Code, that are available to the city or county after all preexisting legal commitments and statutory obligations funded from that revenue are made pursuant to Part 1.85 (commencing with Section 34170) of Division 24 of the Health and Safety Code. For purposes of this section, net available revenue shall not include any funds deposited by the county auditor-controller into the Redevelopment Property Tax Trust Fund or funds remaining in the Redevelopment Property Tax Trust Fund prior to distribution. Net available revenues shall not include any moneys payable to a school district that maintains kindergarten and grades 1 to 12, inclusive, community college districts, county office of education, or to the Educational Revenue Augmentation Fund, pursuant to paragraph (4) of subdivision (a) of Section 34183 of the Health and Safety Code.
(e)(1)That portion of any ad valorem property tax revenue annually allocated to a city or county pursuant to Section 97.70 of the Revenue and Taxation Code that is specified in the adopted affordable housing financing plan for the city or county that corresponds to the increase in the assessed valuation of taxable property shall be allocated to, and, when collected, shall be apportioned to, a special fund of the district for all lawful purposes of the district.
(2)When the district ceases to exist pursuant to the adopted affordable housing financing plan, the revenues described in this subdivision shall be allocated to, and, when collected, shall be apportioned to, the respective city or county.
(f)A district may utilize revenues from any of the following sources to support its activities provided that the applicable voter approval has been obtained, and the affordable housing financing plan has been approved pursuant to subdivision (d) of Section 53394.16:
(1)The Improvement Act of 1911 (Division 7 (commencing with Section 5000) of the Streets and Highways Code).
(2)The Municipal Improvement Act of 1913 (Division 12 (commencing with Section 10000) of the Streets and Highways Code).
(3)The Improvement Bond Act of 1915 (Division 10 (commencing with Section 8500) of the Streets and Highways Code).
(4)The Landscaping and Lighting Act of 1972 (Part 2 (commencing with Section 22500) of Division 15 of the Streets and Highways Code).
(5)The Vehicle Parking District Law of 1943 (Part 1 (commencing with Section 31500) of Division 18 of the Streets and Highways Code).
(6)The Parking District Law of 1951 (Part 4 (commencing with Section 35100) of Division 18 of the Streets and Highways Code).
(7)The Park and Playground Act of 1909 (Chapter 7 (commencing with Section 38000) of Part 2 of Division 3 of Title 4 of this code).
(8)The Mello-Roos Community Facilities Act of 1982 (Chapter 2.5 (commencing with Section 53311) of Part 1 of Division 2 of this title).
(9)The Benefit Assessment Act of 1982 (Chapter 6.4 (commencing with Section 54703) of Part 1 of Division 2 of this title).
(10)The so-called facilities benefit assessment levied by the charter city of San Diego or any substantially similar assessment levied for the same purpose by any other charter city pursuant to any ordinance or charter provision.
53394.31.(a)The portion of taxes required to be allocated pursuant to paragraph (2) of subdivision (a) of Section 53394.30 shall be allocated and paid into a special fund held in trust for the district by the county auditor or officer responsible for the payment of taxes into the funds of the affected taxing entities pursuant to the procedure contained in this section.
(b)Not later than October 1 of each year, for each affordable housing or housing-related infrastructure project for which the affordable housing financing plan provides for the division of taxes pursuant to Section 53394.30, the district shall file, with the county auditor or officer described in subdivision (a), a use of tax increment statement consistent with subdivision (c) and a reconciliation statement consistent with subdivision (d). All statements required to be filed by this subdivision shall be certified by the chief financial officer of the district.
(c)(1)For each affordable housing or housing-related infrastructure project for which a use of tax increment statement is required to be filed, the use of tax increment statement shall contain all of the following:
(A)For each loan, advance, or indebtedness incurred or entered into, all of the following information:
(i)The date the loan, advance, or indebtedness was incurred or entered into.
(ii)The principal amount, term, purpose, interest rate, and total interest of each loan, advance, or indebtedness.
(iii)The principal amount and interest due in the fiscal year in which the use of tax increment statement is filed for each loan, advance, or indebtedness.
(iv)The total amount of principal and interest remaining to be paid for each loan, advance, or indebtedness.
(B)The sum of the amounts determined under clause (iii) of subparagraph (A).
(C)The sum of the amounts determined under clause (iv) of subparagraph (A).
(D)The available revenues as of the end of the previous year, as determined pursuant to paragraph (10) of subdivision (d).
(2)The district may estimate the amount of principal or interest, the interest rate, or term of any loan, advance, or indebtedness if the nature of the loan, advance, or indebtedness is such that the amount of principal or interest, the interest rate or term cannot be precisely determined. The district may list on a use of tax increment statement any loan, advance, or indebtedness incurred or entered into on or before the date the statement is filed.
(d)For each affordable housing or housing-related infrastructure project for which a reconciliation statement is required to be filed, the reconciliation statement shall contain all of the following:
(1)A list of all loans, advances, and indebtedness listed on the previous years use of tax increment statement.
(2)A list of all loans, advances, and indebtedness, not listed on the previous years use of tax increment statement, but incurred or entered into in the previous year and paid in whole or in part from revenue received by the district pursuant to Section 53394.30. This listing may aggregate loans, advances, and indebtedness incurred or entered into in the previous year for a particular purpose, including relocation expenses, administrative expenses, consultant expenses, or property management expenses, into a single item in the listing.
(3)For each loan, advance, or indebtedness described in paragraph (1) or (2), all of the following information:
(A)The total amount of principal and interest remaining to be paid as of the later of the beginning of the previous year or the date the loan, advance, or indebtedness was incurred or entered into.
(B)Any increases or additions to the loan, advance, or indebtedness occurring during the previous year.
(C)The amount paid on the loan, advance, or indebtedness in the previous year from revenue received by the district pursuant to Section 53394.30.
(D)The amount paid on the loan, advance, or indebtedness in the previous year from revenue other than revenue received by the district pursuant to Section 53394.30.
(E)The total amount of principal and interest remaining to be paid as of the end of the previous fiscal year.
(4)The available revenues of the district as of the beginning of the previous fiscal year.
(5)The amount of revenue received by the district in the previous fiscal year pursuant to Section 53394.30.
(6)The amount of available revenue received by the district in the previous fiscal year from any source other than pursuant to Section 53394.30.
(7)The sum of the amounts specified in subparagraph (D) of paragraph (3), to the extent that the amounts are not included as available revenues pursuant to paragraph (6).
(8)The sum of the amounts specified in paragraphs (4), (5), (6), and (7).
(9)The sum of the amounts specified in subparagraphs (C) and (D) of paragraph (3).
(10)The amount determined by subtracting the amount determined under paragraph (9) from the amount determined under paragraph (8). The amount determined pursuant to this paragraph shall be the available revenues as of the end of the previous fiscal year.
53394.32.The district shall pay all costs incurred by a county in connection with the division of taxes pursuant to Section 53394.30 for a district.
5.Tax Increment Pooling with the California Housing Finance Agency53394.40.A district may enter into a contract with the California Housing Finance Agency that shall include, at minimum, the following provisions:
(a)No later than December 31 of each year for which the contract is in effect, the district will remit the entirety of the amount allocated to it pursuant to Section 53394.30 to the agency. The contract may provide for either a one-time lump sum or a periodic remission of funds.
(b)Upon receipt of moneys remitted pursuant to subdivision (a), the agency shall transfer the full amount to the custody of the Treasurer for deposit in the Affordable Housing Tax Increment Pooling Trust Fund, established pursuant to Section 51560 of the Health and Safety Code.
(c)The contract is subject to annual renewal, as follows:
(1)If the governing body adopts a resolution to terminate the contract, the agency shall make a final allocation to the district from the Affordable Housing Tax Increment Pooling Trust Fund, as provided in Section 51560 of the Health and Safety Code, after which the district shall have no claim to any moneys in the Affordable Housing Tax Increment Pooling Trust Fund.
(2)If the governing body does not take any action by December 31 of any year for which a contract is entered into or renewed under this section, the contract shall be deemed to be renewed for the following year.
(d)The agency shall issue revenue bonds secured by moneys remitted to the Affordable Housing Tax Increment Pooling Trust Fund pursuant to the contract in accordance with Article 2 (commencing with Section 51560) of Chapter 12 of Part 3 of Division 31 of the Health and Safety Code.
(e)No later than January 31 of each year following any year in which the contract is in effect, the agency shall allocate an amount from the Affordable Housing Tax Increment Pooling Trust Fund to the district in proportion to the amount of moneys the district remitted for that year, as provided in Section 51560 of the Health and Safety Code.
(f)Moneys remitted to the agency and deposited in the Affordable Housing Tax Increment Pooling Trust Fund, as required by this section and the contract, are property of the district that remitted the moneys and are not state moneys.
(g)Any other provision consistent with the requirements of this section that the district and the agency agree to in order to fulfill the purposes of this chapter.
53394.41.The district shall expend moneys allocated to it under a contract entered into with the agency and in accordance with Section 51560 of the Health and Safety Code solely for those purposes enumerated in the affordable housing financing plan adopted pursuant to subdivision (d) of Section 53394.16.
SEC. 5.Chapter 14 (commencing with Section 51550) is added to Part 3 of Division 31 of the Health and Safety Code, to read:14.Affordable Housing Financing Districts1.General Provisions51550.For purposes of this chapter:
(a)District contract means a contract entered into between the agency and a district pursuant to Section 53394.40 of the Government Code.
(b)District means an affordable housing financing district established pursuant to Chapter 2.75 (commencing with Section 53394.01) of Part 1 of Division 2 of Title 5 of the Government Code.
(c)Fund means the Affordable Housing Financing Fund established pursuant to Section 51551.
(d)Loss reserve account means the Tax Increment Pooling Loss Reserve Account established within the fund pursuant to Section 51580.
(e)Trust fund means the Affordable Housing Tax Increment Pooling Trust Fund established pursuant to Section 51560.
51551.There is hereby established in the State Treasury the Affordable Housing Financing Fund. Upon appropriation by the Legislature, moneys in the fund shall be available to the agency for purposes of Article 4 (commencing with Section 51580).
2.Affordable Housing Tax Increment Revenue Bonds51560.(a)(1)There is hereby established in the State Treasury the Affordable Housing Tax Increment Pooling Trust Fund. Notwithstanding Section 13340 of the Government Code, moneys in the trust fund are hereby continuously appropriated to the agency for allocation to districts in accordance with this chapter.
(2)The agency shall transfer all moneys it receives under a district contract to the custody of the Treasurer for deposit into the trust fund. No later than January 31 of each year, the agency shall allocate moneys from the trust fund in the following order of priority:
(A)First, to the loss reserve account an amount equal to the amount transferred pursuant to Article 4 (commencing with Section 51580), if any, for purposes of paying debt service on revenue bonds for the immediately preceding fiscal year.
(B)Second, to each district that has a district contract an amount proportionate to the amount of money in the trust fund that the district contributed to the trust fund pursuant to that district contract during the immediately preceding calendar year. The agency shall develop a methodology to determine the proportionate amount owed to each district. In no event shall a district receive an amount in excess of the amount that the district contributed to the trust fund.
(b)The Legislature hereby finds and declares that moneys in the trust fund are the property of the districts that have a district contract with the agency and are not state moneys within the meaning of Section 16305.2 of the Government Code, but are instead the property of, and held in trust on behalf of, those districts. The state and the agency shall not have any right, title, or interest in those moneys, except as is necessary for the issuance of revenue bonds pursuant to this chapter.
51561.(a)The agency shall issue revenue bonds secured by moneys in the trust fund. Notwithstanding any other law, bonds issued pursuant to this chapter shall not be subject to Chapter 7 (commencing with Section 51350), unless explicitly provided otherwise in this chapter.
(b)(1)The treasurer shall coordinate the sale of the bonds of the agency. To obtain a date for the sale of bonds, the agency shall inform the Treasurer of the amount of the proposed issue. Upon that notification, the Treasurer shall provide three 10-day periods, within the 90 days next following, when the bonds can be sold. The agency may choose any date during the suggested periods or any other date to which the agency and the Treasurer have mutually agreed. The Treasurer shall sell the bonds on the date chosen according to terms approved by the agency.
(2)The agency shall exercise its powers with due regard for the right of the holders of bonds of the agency at any time outstanding, and nothing in, or done pursuant to, this section shall in any way limit, restrict, or alter the obligation or powers of the agency or any member, officer, or representative of the agency or the Treasurer to carry out and perform in every detail each and every covenant, agreement, or contract at any time made or entered into on behalf of the agency with respect to its bonds or its benefits, or the security of the holders of the bonds.
(c)The bonds authorized by resolution of the agency pursuant to this chapter shall be in the form, bear those date or dates, and mature at the time or times as the resolution or resolutions may provide, except that a bond shall not mature more than 50 years from the date of its issue. The bonds may be issued as serial bonds or as term bonds, or as a combination thereof, and, notwithstanding any other law, the amount of principal of, or interest on, bonds maturing at each date of maturity need not be equal. The bonds shall bear interest at the rate or rates, be in those denominations, be in the form, either coupon or registered, carry those registration privileges, be executed in that manner, be payable in the medium of payment at the place or places within or without the state, be subject to the terms of redemption and contain those terms and conditions as the resolution or resolutions may provide. The bonds of the agency pursuant to this chapter shall be sold at public or private sale by the Treasurer at, above, or below the par value, on the terms and conditions and for consideration in the medium of payment as the agency shall determine by resolution before the sale.
(d)Any resolution or resolutions authorizing any bonds or issue therefor may contain the following provisions, which shall be a part of the contract or contracts with the holders of those bonds, as to:
(1)Pledging all or any part of the moneys in the trust fund to secure payment of the bonds or any issue of those bonds, subject to any agreement with the bondholders as may then exist.
(2)Limitations on the issuance of additional bonds, the terms upon which additional notes or bonds may be issued and secured, and the refunding of outstanding bonds.
(3)The procedure, if any, by which the terms of any contract with bondholders may be amended or abrogated, the amount of bonds the holders of which must consent thereto, and the manner in which that consent may be given.
(4)Vesting in a trustee or trustees any property, rights, powers, and duties in trust as the agency may determine, and providing for or limiting or abrogating the right of the bondholders to appoint a trustee or limiting the rights, powers, and duties of that trustee.
(5)Defining the acts or omissions to act that shall constitute a default in the obligations and duties of the agency to the holders of the bonds and providing for the rights and remedies of the holders of the bonds in the event of default. However, these rights and remedies shall not be inconsistent with the general laws of the state and the other provisions of this chapter.
(6)Any other matters of like or different character, which in any way affect the security, protection, or investment return of the holders of the bonds.
51562.(a)Bonds issued under this chapter shall not be deemed to constitute a debt or liability of the state or of any political subdivision thereof, other than the agency, or a pledge of the faith and credit of the state or of any such political subdivision, other than the agency, but shall be payable solely from funds provided pursuant to a district contract under this chapter. All those bonds and any prospectus or other printed representation of the agency concerning those bonds shall contain on the face thereof a statement to the following effect: Neither the faith and credit nor the taxing power of the State of California is pledged to the payment of the principal of or interest on this bond.
(b)The issuance of bonds under this chapter shall not directly or indirectly or contingently obligate the state or any political subdivision thereof to levy or to pledge any form of taxation whatever therefor or to make any appropriation for their payment. Nothing contained in this section shall prevent or be construed to prevent the agency from pledging its full faith and credit to the payment of bonds or issue of bonds authorized pursuant to this chapter.
(c)The agency shall select bond underwriters and consultants.
(d)The members of the board, the executive director of the agency, or any other person executing those notes or bonds shall not be subject to any personal liability or accountability by reason of the issuance thereof.
(e)In the event any of the board members or officers of the agency whose signatures appear on any bonds or coupons shall cease to be board members or officers of the agency before the delivery of those bonds, the signatures of those board members or officers shall, nevertheless, be valid and sufficient for all purposes, the same as if those board members or officers had remained in office until the delivery of the bonds.
51563.(a)(1)The Treasurer shall act as trustee for the agency and the holders of its bonds, provided the Treasurer elects to serve as trustee with respect to a particular issuance of bonds by notifying the agency of this election in writing at or before the board meeting at which the board approves a resolution authorizing the issuance and sale of the bonds.
(2)Any bonds issued under this chapter may be secured by a trust agreement, indenture, or resolution, by and between the agency and a trustee or trustees, which may be the Treasurer or any trust company or bank having the powers of a trust company within or without the state. Notwithstanding other provisions in this division, references to the Treasurer as trustee shall be deemed to refer to either the Treasurer or the duly empowered bank or trust company trustee, as the case may be. The trust agreement, indenture, or the resolution providing for the issuance of the bonds may pledge or assign revenues to be received or proceeds of any contract or contracts pledged. Any resolution authorizing any bonds or issue thereof shall prescribe the duties of the Treasurer with respect to the issuance, authentication, sale, and delivery of the bonds, the payment of principal and interest thereof, and the redemption of the bonds. Notwithstanding any other law, the Treasurer shall not be deemed to have a conflict of interest by reason of acting as trustee pursuant to this chapter.
(3)The trustee shall act on behalf of the holders of the agency bonds, or any stated percentage thereof, for the purpose of exercising and prosecuting on behalf of the holders in the manner and under conditions provided in the resolution authorizing the bonds.
(b)The Treasurer or other trustee acting on behalf of bondholders shall have and possess all the powers necessary or convenient for the exercise of any functions specifically set forth in this chapter or incident to the general representation of bondholders in the enforcement and protection of their rights.
51564.(a)The agency may provide for the issuance of refunding bonds for the purpose of refunding any bonds then outstanding that have been issued under the provisions of this chapter, including the payment of any redemption premium thereon and any interest accrued or to accrue to the date of redemption of those bonds, and for any purpose of the agency. The issuance of those obligations, the maturities and other details thereof, the rights of the holders thereof, and the rights, duties, and obligations of the agency in respect of the same shall be governed by the provisions of this chapter that relate to the issuance of bonds, insofar as those provisions may be appropriate therefor.
(b)Refunding bonds issued as provided in this section may be sold, or exchanged for outstanding bonds issued under this chapter and, if sold, the proceeds thereof may be applied, in addition to any other authorized purposes, to the purchase, redemption, or payment of those outstanding bonds. Pending the application of the proceeds of any such refunding bonds, with any other available moneys, (1) to the payment of the principal, accrued interest, and any redemption premium on the bonds being refunded, (2) to the payment of any interest on such refunding bonds, or (3) to any expenses incurred in connection with such refunding, such proceeds may be invested in those obligations as are permitted under the bond resolution authorizing the issuance of refunding bonds.
51565.The state hereby pledges to and agrees with the holders of any bonds issued under this chapter that the state will not limit or alter the rights hereby vested in the agency to fulfill the terms of any agreements made with the holders thereof or in any way impair the rights and remedies of those holders until those bonds, together with the interest thereon, with interest on any unpaid installments of interest, and all costs and expenses in connection with any action or proceeding by or on behalf of those holders, are fully met and discharged. The agency is authorized to include this pledge and agreement of the state in any agreement with the holders of those notes or bonds.
51566.Any action or proceeding challenging the validity of revenue bonds or refunding bonds issued under this chapter shall be brought in accordance with, and within the time specified in, Chapter 9 (commencing with Section 860) of Title 10 of Part 2 of the Code of Civil Procedure. The Superior Court of the County of Sacramento shall have jurisdiction of, and the County of Sacramento shall be the appropriate venue for any suit, action, or proceedings by the trustee on behalf of bondholders.
3.Tax Increment Pool Loss Reserve Account51580.(a)There is hereby established in the fund the Tax Increment Pool Loss Reserve Account. The agency shall, pursuant to subparagraph (A) of paragraph (2) of subdivision (a) of Section 51560, allocate money from the trust fund to the loss reserve account.
(b)(1)The agency shall notify the Joint Legislative Budget Committee if, in any fiscal year, the agency determines that there are insufficient moneys in the trust fund to pay the debt service on revenue bonds issued pursuant to Article 2 (commencing with Section 51560) for that fiscal year.
(2)Upon appropriation in the annual Budget Act, the Controller shall transfer moneys from the loss reserve account to the trust fund for the sole purpose of paying debt service on revenue bonds issued pursuant to Article 2 (commencing with Section 51560) for any fiscal year for which the agency notifies the Joint Legislative Budget Committee pursuant to paragraph (1), in an amount necessary to pay that debt service for that fiscal year.
SEC. 6.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because a local agency or school district has the authority to levy service charges, fees, or assessments sufficient to pay for the program or level of service mandated by this act, within the meaning of Section 17556 of the Government Code.
(a)All money in the possession of or collected by any state agency or department, except for money in the Local Agency Investment Fund or the Affordable Housing Tax Increment Pooling Trust Fund, is subject to Sections 16305.3 to 16305.7, inclusive, and is hereafter referred to as state money.
(b)Except as otherwise provided by this chapter or authorized by statute, any transfer, expenditure, or other use of state money knowingly committed by a state employee, outside of the State Treasury System is a misdemeanor, punishable by up to one year in a county jail, or a two-thousand-five-hundred-dollar ($2,500) fine, or both.
SEC. 2.Section 16305.10 is added to the Government Code, to read:16305.10.(a)All money in the Affordable Housing Tax Increment Pooling Trust Fund shall be held in trust in the custody of the Treasurer.
(b)All money in the Affordable Housing Tax Increment Pooling Trust Fund is nonstate money. That money shall be held in a trust account or accounts. The Controller shall be responsible for maintaining those accounts to record the Treasurers accountability, and shall maintain a separate account for each trust deposit in the Affordable Housing Tax Increment Pooling Trust Fund.
(c)Moneys in the Affordable Housing Tax Increment Pooling Trust Fund subject to this section shall be subject to audit by the Department of Finance and to cash count as provided for in Sections 13297, 13298, and 13299. It may be withdrawn only upon the order of the depositing entity or its disbursing officers. The system that the Director of Finance has established for the handling, receiving, holding, and disbursing of state agency money shall also be used for the money in the Affordable Housing Tax Increment Pooling Trust Fund.
SEC. 3.Section 53993 of the Government Code is amended to read:53993.(a)Notwithstanding any other law, except as provided in subdivision (b), for the purpose of any law authorizing the division of taxes levied upon taxable property, including, but not limited to, Sections 53369.30, 53396, 53398.30, 53398.75, and 62005, no revenues derived from the imposition of a property tax rate approved by the voters pursuant to subdivision (b) of Section 1 of Article XIIIA of the California Constitution and levied in addition to the property tax rate limited by subdivision (a) of Section 1 of Article XIIIA of the California Constitution shall be divided.
(b)Subdivision (a) shall not apply to either of the following:
(1)The allocation of property taxes pursuant to Part 1.85 (commencing with Section 34170) of Division 24 of the Health and Safety Code.
(2)The division of taxes authorized by Section 53394.30.
SEC. 4.Chapter 2.75 (commencing with Section 53394.01) is added to Part 1 of Division 2 of Title 5 of the Government Code, to read:2.75.Affordable Housing Financing Districts1.General Provisions53394.01.For purposes of this chapter:
(a)Affected taxing entity means any governmental taxing agency which that levied or had levied on its behalf a property tax on all or a portion of the property located in the proposed district in the fiscal year before to the designation of the district. An affected taxing entity does not include a special district unless the special district adopts a resolution approving the affordable housing financing plan pursuant to subdivision (c) of Section 53394.16. Affected taxing entity does not include a school district of every class or kind, including, but not limited to, a unified or nonunified school district, that maintains kindergarten and grades 1 to 12, inclusive, community college districts, or county office of education.
(b)Affected taxing entity equity amount means the amount of ad valorem property tax revenue that the affected taxing entity would have received from property located within the redevelopment project area in the absence of the affordable housing financing district, calculated pursuant to subdivision (e) of Section 53394.31.
(c)Affordable housing means owner-occupied housing with an affordable housing cost or rental housing with an affordable rent, as provided in Sections 50052.5 and 50053, respectively, of the Health and Safety Code, to persons and families whose income does not exceed 60 percent of the area median income, as determined pursuant to Section 50093 of the Health and Safety Code.
(d)Affordable housing financing district means a legally constituted governmental entity separate and distinct from the city or county that established it pursuant to this chapter for the sole purpose of financing affordable housing and related infrastructure as authorized by this chapter. An affordable housing financing district shall be a local agency for purposes of the Ralph M. Brown Act (Chapter 9 (commencing with Section 54950)).
(e)Agency means the California Housing Finance Agency.
(e)(f)Debt means any binding obligation to repay a sum of money, including obligations in the form of bonds, certificates of participation, long-term leases, loans from government agencies, or loans from banks, other financial institutions, private businesses, or individuals.
(f)(g)Designated official means the city or county engineer or other appropriate official designated pursuant to Section 53394.14.
(g)(h)District means an affordable housing financing district.
(h)(i)Fiscal year means a year beginning on July 1 and ending the following June 30.
(i)(j)Governing board means the legislative body of the city or county that establishes a district pursuant to this chapter acting as the governing board of that district.
(j)(k)Landowner or owner of land means any person shown as the owner of land on the last equalized assessment roll or otherwise known to be the owner of the land by the legislative body. The legislative body has no obligation to obtain other information as to the ownership of land, and its determination of ownership shall be final and conclusive for the purposes of this chapter. A public agency is not a landowner or owner of land for purposes of this chapter, unless the public agency owns all of the land to be included within the proposed district.
(k)(l)Legislative body means the city council of the city or board of supervisors of the county.
(l)(m)Project means any undertaking of a district pursuant to this chapter.
(m)(n)Special district means an agency of the state formed for the performance of governmental or proprietary functions within limited geographic boundaries.
2.District Formation and Affordable Housing Financing Plan53394.10.(a)Subject to Section 53394.11, a legislative body of a city or county may propose the establishment of a district pursuant to this chapter. The legislative body of the city or county may institute proceedings for the establishment of a district by adopting a resolution of intention to establish the proposed district. The legislative body shall include all of the following in the resolution of intention:
(1)State that the legislative body proposes the establishment of an affordable housing financing district under the terms of this chapter and describe the boundaries of the proposed district. The requirements of this paragraph may be accomplished by reference to a map on file in the office of the clerk of the city or in the office of the recorder of the county, as applicable.
(2)State the type of affordable housing projects and related infrastructure proposed to be financed or assisted by the district in accordance with Section 53394.21.
(3)State the need for the district and the goals the district proposes to achieve.
(4)State that incremental property tax revenue from the city or county and all affected taxing entities within the district district, if approved by resolution pursuant to Section 53394.16, may be used to finance these activities.
(5)Fix a time and place for a public hearing on the proposal.
(b)Upon adoption of a resolution of intention pursuant to this section, the legislative body shall act as the governing board of the district.
53394.11.A city or county that created a redevelopment agency, as defined in Section 33003 of the Health and Safety Code, shall neither initiate the creation of a district, nor participate in the governance or financing of a district, until each of the following has occurred:
(a)The successor agency for the former redevelopment agency created by the city or county has received a finding of completion, as specified in Section 34179.7 of the Health and Safety Code.
(b)The city or county certifies to the Department of Finance and to the governing board that no former redevelopment agency assets that are the subject of litigation involving the state, where the city or county, the successor agency, or the designated local authority are a named plaintiff, have been or will be used to benefit any efforts of an affordable housing financing district formed under this chapter, unless the litigation and all possible appeals have been resolved in a court of law. The city or county shall provide this certification to the Department of Finance within 10 days of its legislative bodys action to participate in an affordable housing financing district, or of a governing boards action to form an affordable housing financing district, pursuant to subdivision (d) of Section 53394.16.
(c)The office of the Controller has completed its review as specified in Section 34167.5 of the Health and Safety Code.
(d)The successor agency and the entity that created the former redevelopment agency have complied with all of the office of the Controllers findings and orders stemming from the reviews as specified in subdivision (c).
53394.12.(a)(1)A city or county may establish more than one district within its jurisdictional boundaries, but the city or county shall not merge existing districts or establish a new district that includes any area within the boundaries of another district. However, a city or county may establish districts with adjoining boundaries.
(2)A district may include any portion of a former redevelopment project area that was previously created pursuant to Part 1 (commencing with Section 33000) of Division 24 of the Health and Safety Code, provided that the city or county that created the former redevelopment agency has met the requirements of Section 53394.11.
(b)A district may finance only the facilities authorized in this chapter to the extent that the facilities are in addition to those provided in the territory of the district before the district was created. The district shall not finance additional facilities that supplant facilities already available within that territory when the district was created, but may supplement, rehabilitate, upgrade, or make more sustainable those facilities.
(c)A district may include areas which that are not contiguous.
53394.13.(a)(1)The legislative body shall direct the city official or county official, as applicable, selected by the legislative body, to mail a copy of the resolution of intention to create the district to each owner of land within the district.
(2)As an alternative to mailing a copy of the resolution of intention pursuant to paragraph (1), the legislative body may direct the city official or county official, as applicable, selected by the legislative body, to mail a single-page notice of intention to create the district to each owner of land within the district. For purposes of this section, the notice of intention shall indicate the physical location or internet website where documents related to the district, including the resolution of intention, will be made available for public viewing or inspection. The notice of intention shall also state the date of the public hearing on the proposal and include a brief description of the types of public facilities to be financed by the district.
(b)The legislative body shall direct the city official or county official, as applicable, selected by the legislative body, to mail a copy of the resolution to each affected taxing entity.
53394.14.Upon adoption of the resolution of intention to establish the district by the legislative body pursuant to Section 53394.10, the governing board shall designate and direct the city or county engineer or other appropriate official to prepare an affordable housing financing plan pursuant to subdivision (a) of Section 53394.15.
53394.15.(a)After receipt of a copy of the resolution of intention to establish a district, the designated official shall prepare a proposed affordable housing financing plan. The proposed affordable housing financing plan shall be consistent with the general plan of the city or county within which the district is located and shall include all of the following:
(1)A map and legal description of the proposed district, which may include all or a portion of the district designated by the legislative body in its resolution of intention.
(2)A description of the affordable housing and related infrastructure, as described in Section 53394.21, that is proposed in the area of the district.
(3)If funding from affected taxing entities is incorporated into the financing plan, a finding that the development and financial assistance are of communitywide significance and provide significant benefits to an area larger than the area of the district.
(4)A financing section, which shall contain all of the following information:
(A)A specification of the amount of the incremental tax revenue of the city or county and of each affected taxing entity proposed to be committed to the district for each year during which the district will receive incremental tax revenue.
(B)A projection of the amount of tax revenues expected to be received by the district in each year during which the district will receive tax revenues, including an estimate of the amount of tax revenues attributable to each affected taxing entity for each year.
(C)A plan for financing the affordable housing and related infrastructure to be assisted by the district, including a detailed description of any intention to incur debt.
(D)A statement on the total number of dollars of taxes that may be allocated to the district pursuant to the plan.
(E)A date on which the district will cease to exist, by which time all tax allocation to the district will end. The date shall not be more than 45 years from the effective date of an initial contract with the ____ agency pursuant to Section 53394.40.
(F)A passthrough provision that provides that the district will, except as otherwise provided in this subparagraph, pay to each affected taxing entity an amount equivalent to the affected taxing entity equity amount, as calculated pursuant to subdivision (e) of Section 53394.31. A passthrough provision shall not provide payment to the city or county that proposes to form the agency, or to any school entity, as defined pursuant to subdivision (f) of Section 95 of the Revenue and Taxation Code.(G)An override passthrough provision that provides that the district will pay to each affected taxing entity that imposed an override property tax on property located within the proposed district an amount that is equivalent to the amount the affected taxing entity would have received from the override property tax imposed on that property in the absence of the district, as calculated pursuant to subdivision (f) of Section 53394.31. For purposes of this subparagraph, imposed an override property tax means that an ad valorem property tax was imposed on property by, on or behalf of, the affected taxing entity within the meaning of subdivision (b) of Section 1 of Article XIIIA of the California Constitution and levied in addition to the property tax rate limited by subdivision (a) of Section 1 of Article XIIIA of the California Constitution. An override passthrough provision shall not provide payment to the city or county that proposes to form the agency, or to any school entity, as defined pursuant to subdivision (f) of Section 95 of the Revenue and Taxation Code.(b)The affordable housing financing plan, prepared in accordance with subdivision (a), shall be sent to each owner of land within the proposed district and to each affected taxing entity together with any report required by the California Environmental Quality Act (Division 13 (commencing with Section 21000) of the Public Resources Code) that pertains to the proposed affordable housing and related infrastructure projects, and shall be made available for public inspection. The report shall also be sent to the governing board, the planning commission, and the legislative body.
(c)(1)The designated official shall consult with each affected taxing entity, and, at the request of any affected taxing entity, shall meet with representatives of an affected taxing entity. Any affected taxing entity may suggest revisions to the plan.
(2)Any affected taxing entity entitled to receive a passthrough may submit a written election to not receive an amount that the entity otherwise would have received under a passthrough provision described in subparagraphs (F) or (G) of paragraph (4) of subdivision (a). The affected taxing entity shall include in that written election a statement that the affected taxing entity consents to not receive any amount that would have been received under a passthrough provision, and that the entity is aware that statement is irrevocable unless and until the agency ceases to exist pursuant to the affordable housing financing plan. 53394.16.(a)The governing board shall conduct a public hearing before adopting the proposed affordable housing financing plan. The governing board shall call the public hearing no sooner than 60 days after the plan has been sent to each affected taxing entity. In addition to the notice given to landowners and affected taxing entities pursuant to Section 53394.13, the governing board shall give notice of the public hearing by publication not less than once a week for four successive weeks in a newspaper of general circulation published in the city or county in which the proposed district is located. The notice shall state all of the following:
(1)That the district will be used to finance public facilities or development.
(2)Briefly describe the public facilities or development.
(3)Briefly describe the proposed financial arrangements, including the proposed commitment of incremental tax revenue.
(4)Describe the boundaries of the proposed district.
(5)State the day, hour, and place when and where any persons having any objections to the proposed affordable housing financing plan, or the regularity of any of the prior proceedings, may appear before the governing board and object to the adoption of the proposed plan by the governing board.
(b)At the hour set in the required notices, the governing board shall proceed to hear and pass upon all written and oral objections. The governing board may continue the hearing from time to time. The governing board shall consider the recommendations, if any, of affected taxing entities, and all evidence and testimony for and against the adoption of the plan. The governing board may modify the plan.
(c)(1)The governing body shall not adopt a resolution adopting the affordable housing financing plan providing for the division of taxes of any affected taxing entity pursuant to Article 4 (commencing with Section 53394.30) unless the a resolution approving the plan has been adopted by the governing body of each affected taxing entity that is proposed to be subject to the division of taxes pursuant to Article 4 (commencing with Section 53394.30) has been filed with the governing body at or prior to the time of the hearing.
(2)Nothing in this subdivision shall be construed to prevent the governing body from amending the affordable housing financing plan without allocation of the tax revenues of any affected taxing entity which that has not approved the affordable housing financing plan by resolution of the governing body of the affected taxing entity.
(d)At the conclusion of the hearing, the governing board may adopt a resolution adopting the affordable housing financing plan, as modified, and formation of the affordable housing financing district, or it may adopt a resolution abandoning the proceedings. If the proceedings are abandoned, then the governing board shall cease to exist by operation of this section with no further action required of the legislative body and the legislative body shall not enact a resolution of intention to establish a district that includes the same geographic area within one year of the date of the resolution abandoning the proceedings.
53394.17.The affordable housing financing plan shall take effect upon the adoption of the resolution adopting the plan pursuant to Section 53394.16. The affordable housing financing plan shall specify if the district shall be funded solely through the districts share of tax increment, governmental or private loans, grants, bonds, assessments, fees, or some combination thereof. However, the governing board shall not levy assessments or fees that may be included in the affordable housing financing plan unless the governing board complies with the procedures specified in subdivision (f) of Section 53394.30 for the levying of assessments or fees to finance the affordable housing financing plan.
53394.18.Any action or proceeding to attack, review, set aside, void, or annul the creation of a district, adoption of an affordable housing financing plan, including a division of taxes thereunder, shall be commenced within 30 days after the enactment of the resolution creating the district pursuant to Section 53394.16. Consistent with the time limitations of this section, an action or proceeding with respect to a division of taxes under this chapter may be brought pursuant to Chapter 9 (commencing with Section 860) of Title 10 of Part 2 of the Code of Civil Procedure.
3.Governing Board and District Powers53394.20.(a)The legislative body of the county or city that established the district shall serve as the governing board of the district.
(b)Members of the governing board established pursuant to this chapter shall not receive compensation but may receive reimbursement for actual and necessary expenses incurred in the performance of official duties pursuant to Article 2.3 (commencing with Section 53232) of Chapter 2.
(c)Members of the governing are subject to Article 2.4 (commencing with Section 53234) of Chapter 2.
(d)The governing board created pursuant to this chapter shall be a local public agency subject to the Ralph M. Brown Act (Chapter 9 (commencing with Section 54950)), the California Public Records Act (Chapter 1 (commencing with Section 7920.000) of Part 1 of Division 10 of Title 1), and the Political Reform Act of 1974 (Title 9 (commencing with Section 81000)).
53394.21.(a)(1)The activities of a district established pursuant to this chapter shall be limited to financing the development of affordable housing and housing-related infrastructure, as described in this section, within its territorial boundaries. In connection with the development of affordable housing and related infrastructure, the district may finance any of the following:
(A)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.
(B)The planning and design work that is directly related to the purchase, construction, expansion, or rehabilitation of property. affordable housing.
(C)Water, sewer, or other public infrastructure necessary to support the development of affordable housing pursuant to this chapter.
(D)The costs described in Sections 53394.16, 53394.22, 53394.23, and 53394.32.
(E)The ongoing or capitalized costs to maintain public capital facilities financed in whole or in part by the district.(2)A district may not do either of the following in connection with the development of affordable housing and related infrastructure:
(A)Finance services of any kind.
(B)Use the proceeds of bonds issued to finance the costs of maintenance or ongoing operations of any kind.
(2)(3)The affordable housing and housing-related infrastructure financed by the district are not required to be physically located within the boundaries of the district. However, any affordable housing and housing-related infrastructure financed outside of a district shall have a tangible connection to the work of the district, as detailed in the affordable housing financing plan adopted pursuant to Section 53394.16.
(b)The district shall require, by recorded covenants or restrictions, that housing units built pursuant to this section shall remain affordable housing for the longest feasible time, but for not less than 55 years for rental units and 45 years for owner-occupied units.
(c)The district may finance mixed-income housing developments, but may finance only those units in such a development that constitute affordable housing for purposes of this chapter, and those onsite facilities for childcare, after school care, and social services that are integrally linked to the tenants of those affordable housing units.
(d)A district may utilize any powers under either the Polanco Redevelopment Act (Article 12.5 (commencing with Section 33459) of Chapter 4 of Part 1 of Division 24 of the Health and Safety Code) or Chapter 6.10 (commencing with Section 25403) of Division 20 of the Health and Safety Code, and finance any action necessary to implement that act.
(e)A district shall not incur debt in the form of bonds secured by revenues allocated to it pursuant to Section 53394.30.
53394.22.A district may reimburse a developer of a project that is located entirely within the boundaries of that district for any permit expenses incurred and to offset additional expenses incurred by the developer in constructing affordable housing units pursuant to the Transit Priority Project Program established in Section 65470.
53394.23.It is the intent of the Legislature that the creation of the districts should not ordinarily lead to the removal of existing dwelling units. If, however, any dwelling units are proposed to be removed or destroyed in the course of public works construction within the area of the district or private development within the area of the district that is subject to a written agreement with the district or that is financed in whole or in part by the district then the affordable housing financing plan adopted pursuant to subdivision (d) of Section 53394.16 shall contain provisions to do all of the following:
(a)If the dwelling units to be removed or destroyed are or were inhabited by persons or families of very low, low, or moderate income, as defined in Sections 50105 and 50093 of the Health and Safety Code, at any time within five years prior to establishment of the district, cause or require the construction or rehabilitation of an equal number of replacement dwelling units, within one-half mile of the location of the units to be removed or destroyed, that have an equal or greater number of bedrooms as those removed or destroyed units, within two years of the removal or destruction of the dwelling units. The replacement dwelling units shall be available for rent or sale to persons or families of very low, low, or moderate income, at affordable rent, as defined in Section 50053 of the Health and Safety Code, or at affordable housing cost, as defined in Section 50052.5 of the Health and Safety Code, to persons in the same or a lower income category (extremely low, very low, low, or moderate), as the persons displaced from, or who last occupied, the removed or destroyed dwelling units.
(b)If the dwelling units to be removed or destroyed were not inhabited by persons of low or moderate income within the period of time specified in subdivision (a), cause or require the construction or rehabilitation within one-half mile of the location of the units to be removed or destroyed of at least one unit but not less than 25 percent of the total dwelling units removed or destroyed, within two years of the removal or destruction of the dwelling units. The units constructed or rehabilitated pursuant to this subdivision shall be of equivalent size and type to the units to be removed or destroyed. An equal percentage of the replacement dwelling units constructed or rehabilitated pursuant to this subdivision shall be available for rent or sale at affordable rent, as defined in Section 50053 of the Health and Safety Code, or affordable housing cost, as defined in Section 50052.5 of the Health and Safety Code, to extremely low and very low income persons or families, as defined in Sections 50106 and 50105 of the Health and Safety Code.
(c)Comply with all relocation assistance requirements of Chapter 16 (commencing with Section 7260) of Division 7 of Title 1, for persons displaced from dwelling units by any public works construction within the area of the district or private development within the area of the district that is subject to a written agreement with the district or that is financed in whole or in part by the district as a result of the affordable housing financing plan adopted pursuant to subdivision (d) of Section 53394.16. The displacement of any persons from a dwelling unit as a result of the plan shall be deemed to be the result of public action.
(d)Ensure that removal or destruction of any dwelling units occupied by persons or families of low or moderate income not take place unless and until there has been full compliance with the relocation assistance requirements of this section, Section 53394.15, and Chapter 16 (commencing with Section 7260) of Division 7 of Title 1.
(e)(1)Except as otherwise provided in paragraph (2), the district shall require, by recorded covenants or restrictions, that all dwelling units constructed or rehabilitated pursuant to this section shall remain available at affordable rent or housing cost to, and occupied by, persons and families of the same income categories as required by subdivision (a) or (b), as applicable, for the longest feasible time, but for not less than 55 years for rental units and 45 years for owner-occupied units.
(2)The district may permit sales of owner-occupied units before the expiration of the 45-year period for a price in excess of that otherwise permitted under this subdivision pursuant to an adopted program which that protects the districts investment of moneys in the unit or units, including, but not limited to, an equity sharing program that is not in conflict with another public funding source or law, and that establishes a schedule of equity sharing that permits retention by the seller of a portion of those excess proceeds based on the length of occupancy. For purposes of this paragraph, the terms of the equity sharing program shall be consistent with the provisions of paragraph (2) of subdivision (c) of Section 65915, provided, however, that the program shall require any amounts recaptured by the district to be used within five years for any of the affordable housing purposes described in paragraph (3) of subdivision (a) of Section 34176.1 of the Health and Safety Code.
53394.24.(a)No more than six months after the end of the districts fiscal year, the district shall file a report with the governing board and the Department of Housing and Community Development containing the following information, regardless of whether each activity is funded exclusively by the state or federal government:
(1)The total number of nonelderly and elderly households, including separate subtotals of the numbers of very low income households, other lower income households, and persons and families of moderate income, that were displaced or moved from their dwelling units as part of an affordable housing or housing-related infrastructure project of the district during the previous fiscal year.
(2)The total number of nonelderly and elderly households, including separate subtotals of the numbers of very low income households, other lower income households, and persons and families of moderate income, that the district estimates will be displaced or will move from their dwellings as part of an affordable housing or housing-related infrastructure project of the district during the present fiscal year and the date of adoption of a replacement housing portion of the affordable housing financing plan required by Section 53394.23.
(3)The total number of dwelling units housing very low income households, other lower income households, and persons and families of moderate income, respectively, which have been destroyed or removed from the low- or moderate-income housing market during the previous fiscal year as part of an affordable housing or housing-related infrastructure project of the district, specifying the number of those units that are not subject to the replacement requirements of Section 53394.23.
(4)The total numbers of district-assisted dwelling units which that were constructed, rehabilitated, acquired, or subsidized during the previous fiscal year for occupancy at an affordable housing cost by elderly persons and families, but only if the units are restricted by agreement or ordinance for occupancy by the elderly, and by very low income households, other lower income households, and persons and families of moderate income, respectively, specifying those units that are not currently so occupied, those units which that have replaced units destroyed or removed pursuant to Section 53394.23, and the length of time any agency-assisted units are required to remain available at affordable costs.
(5)The total numbers of new or rehabilitated units subject to Section 53394.23, including separate subtotals of the number originally affordable to and currently occupied by, elderly persons and families, but only if the units are restricted by agreement or ordinance for occupancy by the elderly, and by very low income households, other lower income households, and persons and families of moderate income, respectively, and the length of time these units are required to remain available at affordable costs.
(6)The total amount of funds expended for planning and general administrative costs.
(7)Any other information which that the agency believes useful to explain its housing programs.
(8)The total number of affordable housing units to be constructed under the terms of an executed agreement or contract and the name and execution date of the agreement or contract. These units may only be reported for a period of two years from the execution date of the agreement or contract.
(b)As used in this section:
(1)Elderly, has the same meaning as specified in Section 50067 of the Health and Safety Code.
(2)Persons and families of moderate income, has the same meaning as specified in subdivision (b) of Section 50093 of the Health and Safety Code.
(3)Other lower income households, has the same meaning as lower income households as specified in Section 50079.5 of the Health and Safety Code, exclusive of very low income households.
(4)Persons and families of low or moderate income, has the same meaning as specified in Section 50093 of the Health and Safety Code.
(5)Very low income households, has the same meaning as specified in Section 50105 of the Health and Safety Code.
4.Division of Taxes53394.30.(a)An affordable housing financing plan may contain a provision that taxes, if any, levied upon taxable property in the area included within the district each year by or for the benefit of the State of California, or any affected taxing entity after the effective date of the resolution adopted pursuant to subdivision (d) of Section 53394.16 to create the district, shall be divided as follows:
(1)That portion of the taxes that would be produced by the rate upon which the tax is levied each year by or for each of the affected taxing entities upon the total sum of the assessed value of the taxable property in the district as shown upon the assessment roll used in connection with the taxation of the property by the affected taxing entity, last equalized before the effective date of the resolution adopted pursuant to subdivision (d) of Section 53394.16 to create the district, shall be allocated to, and when collected shall be paid to, the respective affected taxing entities as taxes by or for the affected taxing entities on all other property are paid.
(2)That portion of the levied taxes each year in excess of the amount specified in paragraph (1) shall be allocated to, and when collected shall be paid into a special fund of, the district for all lawful purposes of the district. Unless and until the total assessed valuation of the taxable property in a district exceeds the total assessed value of the taxable property in the district as shown by the last equalized assessment roll referred to in paragraph (1), all of the taxes levied and collected upon the taxable property in the district shall be paid to the respective affected taxing entities. When the district ceases to exist pursuant to the adopted affordable housing financing plan, all moneys thereafter received from taxes upon the taxable property in the district shall be paid to the respective affected taxing entities as taxes on all other property are paid.
(b)Notwithstanding subdivision (a), where any district boundaries overlap with the boundaries of any former redevelopment project area, any debt or obligation of a district shall be subordinate to any and all enforceable obligations of the former redevelopment agency, as approved by the Oversight Board and the Department of Finance. For the purposes of this chapter, the division of taxes allocated to the district pursuant to subdivision (a) shall not include any taxes required to be deposited by the county auditor-controller into the Redevelopment Property Tax Trust Fund created pursuant to subdivision (b) of Section 34170.5 of the Health and Safety Code.
(c)The legislative body of the city or county forming the district may choose to dedicate any portion of its net available revenue to the district through the financing plan described in Section 53394.15.
(d)For the purposes of this section, net available revenue means periodic distributions to the city or county from the Redevelopment Property Tax Trust Fund, created pursuant to Section 34170.5 of the Health and Safety Code, that are available to the city or county after all preexisting legal commitments and statutory obligations funded from that revenue are made pursuant to Part 1.85 (commencing with Section 34170) of Division 24 of the Health and Safety Code. For purposes of this section, net available revenue shall not include any funds deposited by the county auditor-controller into the Redevelopment Property Tax Trust Fund or funds remaining in the Redevelopment Property Tax Trust Fund prior to distribution. Net available revenues shall not include any moneys payable to a school district that maintains kindergarten and grades 1 to 12, inclusive, community college districts, county office of education, or to the Educational Revenue Augmentation Fund, pursuant to paragraph (4) of subdivision (a) of Section 34183 of the Health and Safety Code.
(e)(1)That portion of any ad valorem property tax revenue annually allocated to a city or county pursuant to Section 97.70 of the Revenue and Taxation Code that is specified in the adopted affordable housing financing plan for the city or county that corresponds to the increase in the assessed valuation of taxable property shall be allocated to, and, when collected, shall be apportioned to, a special fund of the district for all lawful purposes of the district.
(2)When the district ceases to exist pursuant to the adopted affordable housing financing plan, the revenues described in this subdivision shall be allocated to, and, when collected, shall be apportioned to, the respective city or county.
(f)A district may utilize revenues from any of the following sources to support its activities provided that the applicable voter approval has been obtained, and the affordable housing financing plan has been approved pursuant to subdivision (d) of Section 53394.16:
(1)The Improvement Act of 1911 (Division 7 (commencing with Section 5000) of the Streets and Highways Code).
(2)The Municipal Improvement Act of 1913 (Division 12 (commencing with Section 10000) of the Streets and Highways Code).
(3)The Improvement Bond Act of 1915 (Division 10 (commencing with Section 8500) of the Streets and Highways Code).
(4)The Landscaping and Lighting Act of 1972 (Part 2 (commencing with Section 22500) of Division 15 of the Streets and Highways Code).
(5)The Vehicle Parking District Law of 1943 (Part 1 (commencing with Section 31500) of Division 18 of the Streets and Highways Code).
(6)The Parking District Law of 1951 (Part 4 (commencing with Section 35100) of Division 18 of the Streets and Highways Code).
(7)The Park and Playground Act of 1909 (Chapter 7 (commencing with Section 38000) of Part 2 of Division 3 of Title 4 of this code).
(8)The Mello-Roos Community Facilities Act of 1982 (Chapter 2.5 (commencing with Section 53311) of Part 1 of Division 2 of this title).
(9)The Benefit Assessment Act of 1982 (Chapter 6.4 (commencing with Section 54703) of Part 1 of Division 2 of this title).
(10)The so-called facilities benefit assessment levied by the charter city of San Diego or any substantially similar assessment levied for the same purpose by any other charter city pursuant to any ordinance or charter provision.
53394.31.(a)The portion of taxes required to be allocated pursuant to paragraph (2) of subdivision (a) of Section 53394.30 shall be allocated and paid into a special fund held in trust for the district by the county auditor or officer responsible for the payment of taxes into the funds of the affected taxing entities pursuant to the procedure contained in this section.
(b)Not later than October 1 of each year, for each affordable housing or housing-related infrastructure project for which the affordable housing financing plan provides for the division of taxes pursuant to Section 53394.30, the district shall file, with the county auditor or officer described in subdivision (a), a use of tax increment statement consistent with subdivision (c), (c) and a reconciliation statement consistent with subdivision (d), a passthrough statement consistent with subdivision (e), and an override passthrough statement consistent with subdivision (f). (d). All statements required to be filed by this subdivision shall be certified by the chief financial officer of the district.
(c)(1)For each affordable housing or housing-related infrastructure project for which a use of tax increment statement is required to be filed, the use of tax increment statement shall contain all of the following:
(A)For each loan, advance, or indebtedness incurred or entered into, all of the following information:
(i)The date the loan, advance, or indebtedness was incurred or entered into.
(ii)The principal amount, term, purpose, interest rate, and total interest of each loan, advance, or indebtedness.
(iii)The principal amount and interest due in the fiscal year in which the statement of indebtedness use of tax increment statement is filed for each loan, advance, or indebtedness.
(iv)The total amount of principal and interest remaining to be paid for each loan, advance, or indebtedness.
(B)The sum of the amounts determined under clause (iii) of subparagraph (A).
(C)The sum of the amounts determined under clause (iv) of subparagraph (A).
(D)The available revenues as of the end of the previous year, as determined pursuant to paragraph (10) of subdivision (d).
(2)The district may estimate the amount of principal or interest, the interest rate, or term of any loan, advance, or indebtedness if the nature of the loan, advance, or indebtedness is such that the amount of principal or interest, the interest rate or term cannot be precisely determined. The district may list on a statement of indebtedness use of tax increment statement any loan, advance, or indebtedness incurred or entered into on or before the date the statement is filed.
(d)For each affordable housing or housing-related infrastructure project for which a reconciliation statement is required to be filed, the reconciliation statement shall contain all of the following:
(1)A list of all loans, advances, and indebtedness listed on the previous years statement of indebtedness. use of tax increment statement.
(2)A list of all loans, advances, and indebtedness, not listed on the previous years statement of indebtedness, use of tax increment statement, but incurred or entered into in the previous year and paid in whole or in part from revenue received by the district pursuant to Section 53394.30. This listing may aggregate loans, advances, and indebtedness incurred or entered into in the previous year for a particular purpose, including relocation expenses, administrative expenses, consultant expenses, or property management expenses, into a single item in the listing.
(3)For each loan, advance, or indebtedness described in paragraph (1) or (2), all of the following information:
(A)The total amount of principal and interest remaining to be paid as of the later of the beginning of the previous year or the date the loan, advance, or indebtedness was incurred or entered into.
(B)Any increases or additions to the loan, advance, or indebtedness occurring during the previous year.
(C)The amount paid on the loan, advance, or indebtedness in the previous year from revenue received by the district pursuant to Section 53394.30.
(D)The amount paid on the loan, advance, or indebtedness in the previous year from revenue other than revenue received by the district pursuant to Section 53394.30.
(E)The total amount of principal and interest remaining to be paid as of the end of the previous fiscal year.
(4)The available revenues of the district as of the beginning of the previous fiscal year.
(5)The amount of revenue received by the district in the previous fiscal year pursuant to Section 53394.30.
(6)The amount of available revenue received by the district in the previous fiscal year from any source other than pursuant to Section 53394.30.
(7)The sum of the amounts specified in subparagraph (D) of paragraph (3), to the extent that the amounts are not included as available revenues pursuant to paragraph (6).
(8)The sum of the amounts specified in paragraphs (4), (5), (6), and (7).
(9)The sum of the amounts specified in subparagraphs (C) and (D) of paragraph (3).
(10)The amount determined by subtracting the amount determined under paragraph (9) from the amount determined under paragraph (8). The amount determined pursuant to this paragraph shall be the available revenues as of the end of the previous fiscal year.
(e)A district shall prepare a passthrough statement that includes all of the following information:(1)The projected amount of revenue that the district expects to be allocated as provided in paragraph (2) of subdivision (a) of Section 53394.30.(2)For each affected taxing entity that is entitled to a passthrough, the district shall subtract from the amount described in paragraph (1) the amount calculated by the county auditor as provided in this paragraph. The county auditor shall calculate the proportional amount that the affected taxing entity would have received from property located within the boundaries of the district during the relevant fiscal year, inclusive of amounts the affected taxing entity would receive, if any, pursuant to Section 97.70 of, clause (i) of subparagraph (B) of paragraph (4) of subdivision (d) of Section 97.2 of, clause (i) of subparagraph (B) of paragraph (4) of subdivision (d) of Section 97.3 of, or Article 4 (commencing with Section 98) of Chapter 6 of Part 0.5 of Division 1 of the Revenue and Taxation Code. However, in no instance shall the amount calculated under this paragraph result in the affected taxing entity receiving an amount of ad valorem property tax revenue that is greater or lesser than the amount of ad valorem tax revenue received by the district that is attributable to that affected taxing entity, inclusive of the amounts the affected taxing entity would receive from any of the sources described in the preceding sentence.(3)A statement of the total amount of passthrough payments that the district is required to make as calculated pursuant to paragraph (2).(f)For each agency that has an override passthrough provision in the financing section of its resolution of intention, in accordance with subparagraph (I) of paragraph (4) of subdivision (a) of Section 53394.15, at the time of creation of that district, the district shall prepare an override passthrough statement that includes all of the following information:(1)The projected amount of revenue that the district expects to be allocated as provided in paragraph (2) of subdivision (a) of Section 53394.30.(2)For each affected taxing entity that imposed an override property tax with respect to property located with the boundaries of the district, the agency shall subtract from the amount described in paragraph (1) the amount calculated by the county auditor that is equivalent to the amount the affected taxing entity would have received from the override property tax imposed on that property in the absence of the district during the relevant fiscal year. The district shall include in the override passthrough statement the following information, to be provided to the county auditor:(A)A description of the applicable override property tax that was imposed.(B)The purpose it was imposed for.(C)The entity that is entitled to receive revenue under that override property tax.(3)A statement of the total amount of passthrough payments that the agency is required to make as calculated pursuant to paragraph (2).53394.32.The district shall pay all costs incurred by a county in connection with the division of taxes pursuant to Section 53394.30 for a district.
5.Tax Increment Pooling with the ____ California Housing Finance Agency53394.40.A district may enter into a contract with the ____ California Housing Finance Agency that shall include, at minimum, the following provisions:
(a)No later than December 31 of each year for which the contract is in effect, the district will remit the entirety of the amount allocated to it pursuant to Section 53394.30 to the ____. agency. The contract may provide for either a one-time lump sum or a periodic remission of funds.
(b)Upon receipt of moneys remitted pursuant to subdivision (a), the ____ agency shall transfer the full amount to the custody of the Treasurer for deposit in the Affordable Housing Tax Increment Pooling Trust Fund, established pursuant to Section 51560 of the Health and Safety Code.
(c)The contract is subject to annual renewal, as follows:
(1)If the governing body adopts a resolution to terminate the contract, the ____ agency shall make a final allocation to the district from the Affordable Housing Tax Increment Pooling Trust Fund, as provided in Section 51560 of the Health and Safety Code, after which the district shall have no claim to any moneys in the Affordable Housing Tax Increment Pooling Trust Fund.
(2)If the governing body does not take any action by December 31 of any year for which a contract is entered into or renewed under this section, the contract shall be deemed to be renewed for the following year.
(d)The ____ agency shall issue revenue bonds secured by moneys remitted to the Affordable Housing Tax Increment Pooling Trust Fund pursuant to the contract in accordance with Article 2 (commencing with Section 51560) of Chapter 12 of Part 3 of Division 31 of the Health and Safety Code.
(e)No later than January 31 of each year following any year in which the contract is in effect, the ____ agency shall allocate an amount from the Affordable Housing Tax Increment Pooling Trust Fund to the district in proportion to the amount of moneys the district remitted for that year, as provided in Section 51560 of the Health and Safety Code.
(f)Moneys remitted to the ____ agency and deposited in the Affordable Housing Tax Increment Pooling Trust Fund, as required by this section and the contract, are property of the district that remitted the moneys and are not state moneys.
(g)Any other provision consistent with the requirements of this section that the district and the ____ agency agree to in order to fulfill the purposes of this chapter.
53394.41.The district shall expend moneys allocated to it under a contract entered into with the ____ agency and in accordance with Section 51560 of the Health and Safety Code solely for those purposes enumerated in the affordable housing financing plan adopted pursuant to subdivision (d) of Section 53394.16.
SEC. 5.Chapter 14 (commencing with Section 51550) is added to Part 3 of Division 31 of the Health and Safety Code, to read:14.Affordable Housing Financing Districts1.General Provisions51550.For purposes of this chapter:
(a)District contract means a contract entered into between the ____ agency and a district pursuant to Section 53394.40 of the Government Code.
(b)District means an affordable housing financing district established pursuant to Chapter 2.75 (commencing with Section 53394.01) of Part 1 of Division 2 of Title 5 of the Government Code.
(c)Fund means the Affordable Housing Financing Fund established pursuant to Section 51551.
(d)Loss reserve account means the Tax Increment Pooling Loss Reserve Account established within the fund pursuant to Section 51580.
(e)Trust fund means the Affordable Housing Tax Increment Pooling Trust Fund established pursuant to Section 51560.
51551.There is hereby established in the State Treasury the Affordable Housing Financing Fund. Upon appropriation by the Legislature, moneys in the fund shall be available to the ____ agency for purposes of Article 4 (commencing with Section 51580).
2.Affordable Housing Tax Increment Revenue Bonds51560.(a)(1)There is hereby established in the State Treasury the Affordable Housing Tax Increment Pooling Trust Fund. Notwithstanding Section 13340 of the Government Code, moneys in the trust fund are hereby continuously appropriated to the ____ agency for allocation to districts in accordance with this chapter.
(2)The ____ agency shall transfer all moneys it receives under a district contract to the custody of the Treasurer for deposit into the trust fund. No later than January 31 of each year, the ____ agency shall allocate moneys from the trust fund in the following order of priority:
(A)First, to the loss reserve account an amount equal to the amount transferred pursuant to Article 4 (commencing with Section 51580), if any, for purposes of paying debt service on revenue bonds for the immediately preceding fiscal year.
(B)Second, to each district that has a district contract an amount proportionate to the amount of money in the trust fund that the district contributed to the trust fund pursuant to that district contract during the immediately preceding calendar year. The ____ agency shall develop a methodology to determine the proportionate amount owed to each district. In no event shall a district receive an amount in excess of the amount that the district contributed to the trust fund.
(b)The Legislature hereby finds and declares that moneys in the trust fund are the property of the districts that have a district contract with the ____ agency and are not state moneys within the meaning of Section 16305.2 of the Government Code, but are instead the property of, and held in trust on behalf of, those districts. The state and the ____ agency shall not have any right, title, or interest in those moneys, except as is necessary for the issuance of revenue bonds pursuant to this chapter.
51561.(a)The ____ agency shall issue revenue bonds secured by moneys in the trust fund. Notwithstanding any other law, bonds issued pursuant to this chapter shall not be subject to Chapter 7 (commencing with Section 51350), unless explicitly provided otherwise in this chapter.
(b)(1)The treasurer shall coordinate the sale of the bonds of the ____. agency. To obtain a date for the sale of bonds, the ____ agency shall inform the Treasurer of the amount of the proposed issue. Upon that notification, the Treasurer shall provide three 10-day periods, within the 90 days next following, when the bonds can be sold. The ____ agency may choose any date during the suggested periods or any other date to which the ____ agency and the Treasurer have mutually agreed. The Treasurer shall sell the bonds on the date chosen according to terms approved by the ____. agency.
(2)The ____ agency shall exercise its powers with due regard for the right of the holders of bonds of the ____ agency at any time outstanding, and nothing in, or done pursuant to, this section shall in any way limit, restrict, or alter the obligation or powers of the ____ agency or any member, officer, or representative of the ____ agency or the Treasurer to carry out and perform in every detail each and every covenant, agreement, or contract at any time made or entered into on behalf of the ____ agency with respect to its bonds or its benefits, or the security of the holders of the bonds.
(c)The bonds authorized by resolution of the ____ agency pursuant to this chapter shall be in the form, bear those date or dates, and mature at the time or times as the resolution or resolutions may provide, except that a bond shall not mature more than 50 years from the date of its issue. The bonds may be issued as serial bonds or as term bonds, or as a combination thereof, and, notwithstanding any other law, the amount of principal of, or interest on, bonds maturing at each date of maturity need not be equal. The bonds shall bear interest at the rate or rates, be in those denominations, be in the form, either coupon or registered, carry those registration privileges, be executed in that manner, be payable in the medium of payment at the place or places within or without the state, be subject to the terms of redemption and contain those terms and conditions as the resolution or resolutions may provide. The bonds of the ____ agency pursuant to this chapter shall be sold at public or private sale by the Treasurer at, above, or below the par value, on the terms and conditions and for consideration in the medium of payment as the ____ agency shall determine by resolution before the sale.
(d)Any resolution or resolutions authorizing any bonds or issue therefor may contain the following provisions, which shall be a part of the contract or contracts with the holders of those bonds, as to:
(1)Pledging all or any part of the moneys in the trust fund to secure payment of the bonds or any issue of those bonds, subject to any agreement with the bondholders as may then exist.
(2)Limitations on the issuance of additional bonds, the terms upon which additional notes or bonds may be issued and secured, and the refunding of outstanding bonds.
(3)The procedure, if any, by which the terms of any contract with bondholders may be amended or abrogated, the amount of bonds the holders of which must consent thereto, and the manner in which that consent may be given.
(4)Vesting in a trustee or trustees any property, rights, powers, and duties in trust as the ____ agency may determine, and providing for or limiting or abrogating the right of the bondholders to appoint a trustee or limiting the rights, powers, and duties of that trustee.
(5)Defining the acts or omissions to act that shall constitute a default in the obligations and duties of the ____ agency to the holders of the bonds and providing for the rights and remedies of the holders of the bonds in the event of default. However, these rights and remedies shall not be inconsistent with the general laws of the state and the other provisions of this chapter.
(6)Any other matters of like or different character, which in any way affect the security, protection, or investment return of the holders of the bonds.
51562.(a)Bonds issued under this chapter shall not be deemed to constitute a debt or liability of the state or of any political subdivision thereof, other than the ____, agency, or a pledge of the faith and credit of the state or of any such political subdivision, other than the ____, agency, but shall be payable solely from funds provided pursuant to a district contract under this chapter. All those bonds and any prospectus or other printed representation of the ____ agency concerning those bonds shall contain on the face thereof a statement to the following effect: Neither the faith and credit nor the taxing power of the State of California is pledged to the payment of the principal of or interest on this bond.
(b)The issuance of bonds under this chapter shall not directly or indirectly or contingently obligate the state or any political subdivision thereof to levy or to pledge any form of taxation whatever therefor or to make any appropriation for their payment. Nothing contained in this section shall prevent or be construed to prevent the ____ agency from pledging its full faith and credit to the payment of bonds or issue of bonds authorized pursuant to this chapter.
(c)The ____ agency shall select bond underwriters and consultants.
(d)The members of the board, the executive director of the ____ , agency, or any other person executing those notes or bonds shall not be subject to any personal liability or accountability by reason of the issuance thereof.
(e)In the event any of the board members or officers of the ____ agency whose signatures appear on any bonds or coupons shall cease to be board members or officers of the ____ agency before the delivery of those bonds, the signatures of those board members or officers shall, nevertheless, be valid and sufficient for all purposes, the same as if those board members or officers had remained in office until the delivery of the bonds.
51563.(a)(1)The Treasurer shall act as trustee for the ____ agency and the holders of its bonds, provided the Treasurer elects to serve as trustee with respect to a particular issuance of bonds by notifying the ____ agency of this election in writing at or before the board meeting at which the board approves a resolution authorizing the issuance and sale of the bonds.
(2)Any bonds issued under this chapter may be secured by a trust agreement, indenture, or resolution, by and between the ____ agency and a trustee or trustees, which may be the Treasurer or any trust company or bank having the powers of a trust company within or without the state. Notwithstanding other provisions in this division, references to the Treasurer as trustee shall be deemed to refer to either the Treasurer or the duly empowered bank or trust company trustee, as the case may be. The trust agreement, indenture, or the resolution providing for the issuance of the bonds may pledge or assign revenues to be received or proceeds of any contract or contracts pledged. Any resolution authorizing any bonds or issue thereof shall prescribe the duties of the Treasurer with respect to the issuance, authentication, sale, and delivery of the bonds, the payment of principal and interest thereof, and the redemption of the bonds. Notwithstanding any other law, the Treasurer shall not be deemed to have a conflict of interest by reason of acting as trustee pursuant to this chapter.
(3)The trustee shall act on behalf of the holders of the ____ agency bonds, or any stated percentage thereof, for the purpose of exercising and prosecuting on behalf of the holders in the manner and under conditions provided in the resolution authorizing the bonds.
(b)The Treasurer or other trustee acting on behalf of bondholders shall have and possess all the powers necessary or convenient for the exercise of any functions specifically set forth in this chapter or incident to the general representation of bondholders in the enforcement and protection of their rights.
51564.(a)The ____ agency may provide for the issuance of refunding bonds for the purpose of refunding any bonds then outstanding which that have been issued under the provisions of this chapter, including the payment of any redemption premium thereon and any interest accrued or to accrue to the date of redemption of those bonds, and for any purpose of ____. the agency. The issuance of those obligations, the maturities and other details thereof, the rights of the holders thereof, and the rights, duties, and obligations of the ____ agency in respect of the same shall be governed by the provisions of this chapter that relate to the issuance of bonds, insofar as those provisions may be appropriate therefor.
(b)Refunding bonds issued as provided in this section may be sold, or exchanged for outstanding bonds issued under this chapter and, if sold, the proceeds thereof may be applied, in addition to any other authorized purposes, to the purchase, redemption, or payment of those outstanding bonds. Pending the application of the proceeds of any such refunding bonds, with any other available moneys, (1) to the payment of the principal, accrued interest, and any redemption premium on the bonds being refunded, (2) to the payment of any interest on such refunding bonds, or (3) to any expenses incurred in connection with such refunding, such proceeds may be invested in those obligations as are permitted under the bond resolution authorizing the issuance of refunding bonds.
51565.The state hereby pledges to and agrees with the holders of any bonds issued under this chapter that the state will not limit or alter the rights hereby vested in the ____ agency to fulfill the terms of any agreements made with the holders thereof or in any way impair the rights and remedies of those holders until those bonds, together with the interest thereon, with interest on any unpaid installments of interest, and all costs and expenses in connection with any action or proceeding by or on behalf of those holders, are fully met and discharged. The ____ agency is authorized to include this pledge and agreement of the state in any agreement with the holders of those notes or bonds.
51566.Any action or proceeding challenging the validity of revenue bonds or refunding bonds issued under this chapter shall be brought in accordance with, and within the time specified in, Chapter 9 (commencing with Section 860) of Title 10 of Part 2 of the Code of Civil Procedure. The Superior Court of the County of Sacramento shall have jurisdiction of, and the County of Sacramento shall be the appropriate venue for any suit, action, or proceedings by the trustee on behalf of bondholders.
3.Tax Increment Pool Loss Reserve Account51580.(a)There is hereby established in the fund the Tax Increment Pool Loss Reserve Account. The ____ agency shall, pursuant to subparagraph (A) of paragraph (2) of subdivision (a) of Section 51560, allocate money from the trust fund to the loss reserve account.
(b)(1)The ____ agency shall notify the Joint Legislative Budget Committee if, in any fiscal year, the ____ agency determines that there are insufficient moneys in the trust fund to pay the debt service on revenue bonds issued pursuant to Article 2 (commencing with Section 51560) for that fiscal year.
(2)Upon appropriation in the annual Budget Act, the Controller shall transfer moneys from the loss reserve account to the trust fund for the sole purpose of paying debt service on revenue bonds issued pursuant to Article 2 (commencing with Section 51560) for any fiscal year for which the ____ agency notifies the Joint Legislative Budget Committee pursuant to paragraph (1), in an amount necessary to pay that debt service for that fiscal year.
SEC. 6.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because a local agency or school district has the authority to levy service charges, fees, or assessments sufficient to pay for the program or level of service mandated by this act, within the meaning of Section 17556 of the Government Code.
(a)All money in the possession of or collected by any state agency or department, except for money in the Local Agency Investment Fund, Fund or the Affordable Housing Tax Increment Pooling Trust Fund, is subject to Sections 16305.3 to 16305.7, inclusive, and is hereafter referred to as state money.
(b)Except as otherwise provided by this chapter or authorized by statute, any transfer, expenditure, or other use of state money knowingly committed by a state employee, outside of the State Treasury System is a misdemeanor, punishable by up to one year in a county jail, or a two-thousand-five-hundred-dollar ($2,500) fine, or both.
SEC. 2.Section 16305.10 is added to the Government Code, to read:16305.10.(a)All money in the Affordable Housing Tax Increment Pooling Trust Fund shall be held in trust in the custody of the Treasurer.
(b)All money in the Affordable Housing Tax Increment Pooling Trust Fund is nonstate money. That money shall be held in a trust account or accounts. The Controller shall be responsible for maintaining those accounts to record the Treasurers accountability, and shall maintain a separate account for each trust deposit in the Affordable Housing Tax Increment Pooling Trust Fund.
(c)Moneys in the Affordable Housing Tax Increment Pooling Trust Fund subject to this section shall be subject to audit by the Department of Finance and to cash count as provided for in Sections 13297, 13298, and 13299. It may be withdrawn only upon the order of the depositing entity or its disbursing officers. The system that the Director of Finance has established for the handling, receiving, holding, and disbursing of state agency money shall also be used for the money in the Affordable Housing Tax Increment Pooling Trust Fund.
SEC. 3.Section 53993 of the Government Code is amended to read:53993.(a)Notwithstanding any other law, except as provided in subdivision (b), for the purpose of any law authorizing the division of taxes levied upon taxable property, including, but not limited to, Sections 53369.30, 53396, 53398.30, 53398.75, and 62005, no revenues derived from the imposition of a property tax rate approved by the voters pursuant to subdivision (b) of Section 1 of Article XIIIA of the California Constitution and levied in addition to the property tax rate limited by subdivision (a) of Section 1 of Article XIIIA of the California Constitution shall be divided.
(b)Subdivision (a) shall not apply to the either of the following:
(1)The allocation of property taxes pursuant to Part 1.85 (commencing with Section 34170) of Division 24 of the Health and Safety Code.
(2)The division of taxes authorized by Section 53394.30.
SEC. 4.Chapter 2.75 (commencing with Section 53394.01) is added to Part 1 of Division 2 of Title 5 of the Government Code, to read:2.75.Affordable Housing Financing Districts1.General Provisions53394.01.For purposes of this chapter:
(a)Affected taxing entity means any governmental taxing agency which levied or had levied on its behalf a property tax on all or a portion of the property located in the proposed district in the fiscal year before to the designation of the district. Affected taxing entity does not include a school district of every class or kind, including, but not limited to, a unified or nonunified school district, that maintains kindergarten and grades 1 to 12, inclusive, community college districts, or county office of education.
(b)Affected taxing entity equity amount means the amount of ad valorem property tax revenue that the affected taxing entity would have received from property located within the redevelopment project area in the absence of the affordable housing financing district, calculated pursuant to subdivision (e) of Section 53394.31.
(c)Affordable housing means owner-occupied housing with an affordable housing cost or rental housing with an affordable rent, as provided in Sections 50052.5 and 50053, respectively, of the Health and Safety Code, to persons and families whose income does not exceed 60 percent of the area median income, as determined pursuant to Section 50093 of the Health and Safety Code.
(d)Affordable housing financing district means a legally constituted governmental entity separate and distinct from the city or county that established it pursuant to this chapter for the sole purpose of financing affordable housing and related infrastructure as authorized by this chapter. An affordable housing financing district shall be a local agency for purposes of the Ralph M. Brown Act (Chapter 9 (commencing with Section 54950)).
(e)Debt means any binding obligation to repay a sum of money, including obligations in the form of bonds, certificates of participation, long-term leases, loans from government agencies, or loans from banks, other financial institutions, private businesses, or individuals.
(f)Designated official means the city or county engineer or other appropriate official designated pursuant to Section 53394.14.
(g)District means an affordable housing financing district.
(h)Fiscal year means a year beginning on July 1 and ending the following June 30.
(i)Governing board means the legislative body of the city or county that establishes a district pursuant to this chapter acting as the governing board of that district.
(j)Landowner or owner of land means any person shown as the owner of land on the last equalized assessment roll or otherwise known to be the owner of the land by the legislative body. The legislative body has no obligation to obtain other information as to the ownership of land, and its determination of ownership shall be final and conclusive for the purposes of this chapter. A public agency is not a landowner or owner of land for purposes of this chapter, unless the public agency owns all of the land to be included within the proposed district.
(k)Legislative body means the city council of the city or board of supervisors of the county.
(l)Project means any undertaking of a district pursuant to this chapter.
(m)Special district means an agency of the state formed for the performance of governmental or proprietary functions within limited geographic boundaries.
2.District Formation and Affordable Housing Financing Plan53394.10.(a)Subject to Section 53394.11, a legislative body of a city or county may propose the establishment of a district pursuant to this chapter. The legislative body of the city or county may institute proceedings for the establishment of a district by adopting a resolution of intention to establish the proposed district. The legislative body shall include all of the following in the resolution of intention:
(1)State that the legislative body proposes the establishment of an affordable housing financing district under the terms of this chapter and describe the boundaries of the proposed district. The requirements of this paragraph may be accomplished by reference to a map on file in the office of the clerk of the city or in the office of the recorder of the county, as applicable.
(2)State the type of affordable housing projects and related infrastructure proposed to be financed or assisted by the district in accordance with Section 53394.21.
(3)State the need for the district and the goals the district proposes to achieve.
(4)State that incremental property tax revenue from the city or county and all affected taxing entities within the district may be used to finance these activities.
(5)Fix a time and place for a public hearing on the proposal.
(b)Upon adoption of a resolution of intention pursuant to this section, the legislative body shall act as the governing board of the district.
53394.11.A city or county that created a redevelopment agency, as defined in Section 33003 of the Health and Safety Code, shall neither initiate the creation of a district, nor participate in the governance or financing of a district, until each of the following has occurred:
(a)The successor agency for the former redevelopment agency created by the city or county has received a finding of completion, as specified in Section 34179.7 of the Health and Safety Code.
(b)The city or county certifies to the Department of Finance and to the governing board that no former redevelopment agency assets that are the subject of litigation involving the state, where the city or county, the successor agency, or the designated local authority are a named plaintiff, have been or will be used to benefit any efforts of an affordable housing financing district formed under this chapter, unless the litigation and all possible appeals have been resolved in a court of law. The city or county shall provide this certification to the Department of Finance within 10 days of its legislative bodys action to participate in an affordable housing financing district, or of a governing boards action to form an affordable housing financing district, pursuant to subdivision (d) of Section 53394.16.
(c)The office of the Controller has completed its review as specified in Section 34167.5 of the Health and Safety Code.
(d)The successor agency and the entity that created the former redevelopment agency have complied with all of the office of the Controllers findings and orders stemming from the reviews as specified in subdivision (c).
53394.12.(a)(1)A city or county may establish more than one district within its jurisdictional boundaries, but the city or county shall not merge existing districts or establish a new district that includes any area within the boundaries of another district. However, a city or county may establish districts with adjoining boundaries.
(2)A district may include any portion of a former redevelopment project area that was previously created pursuant to Part 1 (commencing with Section 33000) of Division 24 of the Health and Safety Code, provided that the city or county that created the former redevelopment agency has met the requirements of Section 53394.11.
(b)A district may finance only the facilities authorized in this chapter to the extent that the facilities are in addition to those provided in the territory of the district before the district was created. The district shall not finance additional facilities that supplant facilities already available within that territory when the district was created, but may supplement, rehabilitate, upgrade, or make more sustainable those facilities.
(c)A district may include areas which are not contiguous.
53394.13.(a)(1)The legislative body shall direct the city official or county official, as applicable, selected by the legislative body, to mail a copy of the resolution of intention to create the district to each owner of land within the district.
(2)As an alternative to mailing a copy of the resolution of intention pursuant to paragraph (1), the legislative body may direct the city official or county official, as applicable, selected by the legislative body, to mail a single-page notice of intention to create the district to each owner of land within the district. For purposes of this section, the notice of intention shall indicate the physical location or internet website where documents related to the district, including the resolution of intention, will be made available for public viewing or inspection. The notice of intention shall also state the date of the public hearing on the proposal and include a brief description of the types of public facilities to be financed by the district.
(b)The legislative body shall direct the city official or county official, as applicable, selected by the legislative body, to mail a copy of the resolution to each affected taxing entity.
53394.14.Upon adoption of the resolution of intention to establish the district by the legislative body pursuant to Section 53394.10, the governing board shall designate and direct the city or county engineer or other appropriate official to prepare an affordable housing financing plan pursuant to subdivision (a) of Section 53394.15.
53394.15.(a)After receipt of a copy of the resolution of intention to establish a district, the designated official shall prepare a proposed affordable housing financing plan. The proposed affordable housing financing plan shall be consistent with the general plan of the city or county within which the district is located and shall include all of the following:
(1)A map and legal description of the proposed district, which may include all or a portion of the district designated by the legislative body in its resolution of intention.
(2)A description of the affordable housing and related infrastructure, as described in Section 53394.21, that is proposed in the area of the district.
(3)If funding from affected taxing entities is incorporated into the financing plan, a finding that the development and financial assistance are of communitywide significance and provide significant benefits to an area larger than the area of the district.
(4)A financing section, which shall contain all of the following information:
(A)A specification of the amount of the incremental tax revenue of the city or county and of each affected taxing entity proposed to be committed to the district for each year during which the district will receive incremental tax revenue.
(B)A projection of the amount of tax revenues expected to be received by the district in each year during which the district will receive tax revenues, including an estimate of the amount of tax revenues attributable to each affected taxing entity for each year.
(C)A plan for financing the affordable housing and related infrastructure to be assisted by the district, including a detailed description of any intention to incur debt.
(D)A statement on the total number of dollars of taxes that may be allocated to the district pursuant to the plan.
(E)A date on which the district will cease to exist, by which time all tax allocation to the district will end. The date shall not be more than 45 years from the effective date of an initial contract with the ____ pursuant to Section 53394.40.
(F)A passthrough provision that provides that the district will, except as otherwise provided in this subparagraph, pay to each affected taxing entity an amount equivalent to the affected taxing entity equity amount, as calculated pursuant to subdivision (e) of Section 53394.31. A passthrough provision shall not provide payment to the city or county that proposes to form the agency, or to any school entity, as defined pursuant to subdivision (f) of Section 95 of the Revenue and Taxation Code.
(G)An override passthrough provision that provides that the district will pay to each affected taxing entity that imposed an override property tax on property located within the proposed district an amount that is equivalent to the amount the affected taxing entity would have received from the override property tax imposed on that property in the absence of the district, as calculated pursuant to subdivision (f) of Section 53394.31. For purposes of this subparagraph, imposed an override property tax means that an ad valorem property tax was imposed on property by, on or behalf of, the affected taxing entity within the meaning of subdivision (b) of Section 1 of Article XIIIA of the California Constitution and levied in addition to the property tax rate limited by subdivision (a) of Section 1 of Article XIIIA of the California Constitution. An override passthrough provision shall not provide payment to the city or county that proposes to form the agency, or to any school entity, as defined pursuant to subdivision (f) of Section 95 of the Revenue and Taxation Code.
(b)The affordable housing financing plan, prepared in accordance with subdivision (a), shall be sent to each owner of land within the proposed district and to each affected taxing entity together with any report required by the California Environmental Quality Act (Division 13 (commencing with Section 21000) of the Public Resources Code) that pertains to the proposed affordable housing and related infrastructure projects, and shall be made available for public inspection. The report shall also be sent to the governing board, the planning commission, and the legislative body.
(c)(1)The designated official shall consult with each affected taxing entity, and, at the request of any affected taxing entity, shall meet with representatives of an affected taxing entity. Any affected taxing entity may suggest revisions to the plan.
(2)Any affected taxing entity entitled to receive a passthrough may submit a written election to not receive an amount that the entity otherwise would have received under a passthrough provision described in subparagraphs (F) or (G) of paragraph (4) of subdivision (a). The affected taxing entity shall include in that written election a statement that the affected taxing entity consents to not receive any amount that would have been received under a passthrough provision, and that the entity is aware that statement is irrevocable unless and until the agency ceases to exist pursuant to the affordable housing financing plan.
53394.16.(a)The governing board shall conduct a public hearing before adopting the proposed affordable housing financing plan. The governing board shall call the public hearing no sooner than 60 days after the plan has been sent to each affected taxing entity. In addition to the notice given to landowners and affected taxing entities pursuant to Section 53394.13, the governing board shall give notice of the public hearing by publication not less than once a week for four successive weeks in a newspaper of general circulation published in the city or county in which the proposed district is located. The notice shall state all of the following:
(1)That the district will be used to finance public facilities or development.
(2)Briefly describe the public facilities or development.
(3)Briefly describe the proposed financial arrangements, including the proposed commitment of incremental tax revenue.
(4)Describe the boundaries of the proposed district.
(5)State the day, hour, and place when and where any persons having any objections to the proposed affordable housing financing plan, or the regularity of any of the prior proceedings, may appear before the governing board and object to the adoption of the proposed plan by the governing board.
(b)At the hour set in the required notices, the governing board shall proceed to hear and pass upon all written and oral objections. The governing board may continue the hearing from time to time. The governing board shall consider the recommendations, if any, of affected taxing entities, and all evidence and testimony for and against the adoption of the plan. The governing board may modify the plan.
(c)(1)The governing body shall not adopt a resolution adopting the affordable housing financing plan providing for the division of taxes of any affected taxing entity pursuant to Article 4 (commencing with Section 53394.30) unless the resolution approving the plan has been adopted by the governing body of each affected taxing entity that is proposed to be subject to the division of taxes pursuant to Article 4 (commencing with Section 53394.30) has been filed with the governing body at or prior to the time of the hearing.
(2)Nothing in this subdivision shall be construed to prevent the governing body from amending the affordable housing financing plan without allocation of the tax revenues of any affected taxing entity which has not approved the affordable housing financing plan by resolution of the governing body of the affected taxing entity.
(d)At the conclusion of the hearing, the governing board may adopt a resolution adopting the affordable housing financing plan, as modified, and formation of the affordable housing financing district, or it may adopt a resolution abandoning the proceedings. If the proceedings are abandoned, then the governing board shall cease to exist by operation of this section with no further action required of the legislative body and the legislative body shall not enact a resolution of intention to establish a district that includes the same geographic area within one year of the date of the resolution abandoning the proceedings.
53394.17.The affordable housing financing plan shall take effect upon the adoption of the resolution adopting the plan pursuant to Section 53394.16. The affordable housing financing plan shall specify if the district shall be funded solely through the districts share of tax increment, governmental or private loans, grants, bonds, assessments, fees, or some combination thereof. However, the governing board shall not levy assessments or fees that may be included in the affordable housing financing plan unless the governing board complies with the procedures specified in subdivision (f) of Section 53394.30 for the levying of assessments or fees to finance the affordable housing financing plan.
53394.18.Any action or proceeding to attack, review, set aside, void, or annul the creation of a district, adoption of an affordable housing financing plan, including a division of taxes thereunder, shall be commenced within 30 days after the enactment of the resolution creating the district pursuant to Section 53394.16. Consistent with the time limitations of this section, an action or proceeding with respect to a division of taxes under this chapter may be brought pursuant to Chapter 9 (commencing with Section 860) of Title 10 of Part 2 of the Code of Civil Procedure.
3.Governing Board and District Powers53394.20.(a)The legislative body of the county or city that established the district shall serve as the governing board of the district.
(b)Members of the governing board established pursuant to this chapter shall not receive compensation but may receive reimbursement for actual and necessary expenses incurred in the performance of official duties pursuant to Article 2.3 (commencing with Section 53232) of Chapter 2.
(c)Members of the governing are subject to Article 2.4 (commencing with Section 53234) of Chapter 2.
(d)The governing board created pursuant to this chapter shall be a local public agency subject to the Ralph M. Brown Act (Chapter 9 (commencing with Section 54950)), the California Public Records Act (Chapter 1 (commencing with Section 7920.000) of Part 1 of Division 10 of Title 1), and the Political Reform Act of 1974 (Title 9 (commencing with Section 81000)).
53394.21.(a)(1)The activities of a district established pursuant to this chapter shall be limited to financing the development of affordable housing and housing-related infrastructure, as described in this section, within its territorial boundaries. In connection with the development of affordable housing and related infrastructure, the district may finance any of the following:
(A)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.
(B)The planning and design work that is directly related to the purchase, construction, expansion, or rehabilitation of property.
(C)Water, sewer, or other public infrastructure necessary to support the development of affordable housing pursuant to this chapter.
(D)The costs described in Sections 53394.16, 53394.22, 53394.23, and 53394.32.
(E)The ongoing or capitalized costs to maintain public capital facilities financed in whole or in part by the district.
(2)The affordable housing and housing-related infrastructure financed by the district are not required to be physically located within the boundaries of the district. However, any affordable housing and housing-related infrastructure financed outside of a district shall have a tangible connection to the work of the district, as detailed in the affordable housing financing plan adopted pursuant to Section 53394.16.
(b)The district shall require, by recorded covenants or restrictions, that housing units built pursuant to this section shall remain affordable housing for the longest feasible time, but for not less than 55 years for rental units and 45 years for owner-occupied units.
(c)The district may finance mixed-income housing developments, but may finance only those units in such a development that constitute affordable housing for purposes of this chapter, and those onsite facilities for childcare, after school care, and social services that are integrally linked to the tenants of those affordable housing units.
(d)A district may utilize any powers under either the Polanco Redevelopment Act (Article 12.5 (commencing with Section 33459) of Chapter 4 of Part 1 of Division 24 of the Health and Safety Code) or Chapter 6.10 (commencing with Section 25403) of Division 20 of the Health and Safety Code, and finance any action necessary to implement that act.
(e)A district shall not incur debt in the form of bonds secured by revenues allocated to it pursuant to Section 53394.30.
53394.22.A district may reimburse a developer of a project that is located entirely within the boundaries of that district for any permit expenses incurred and to offset additional expenses incurred by the developer in constructing affordable housing units pursuant to the Transit Priority Project Program established in Section 65470.
53394.23.It is the intent of the Legislature that the creation of the districts should not ordinarily lead to the removal of existing dwelling units. If, however, any dwelling units are proposed to be removed or destroyed in the course of public works construction within the area of the district or private development within the area of the district that is subject to a written agreement with the district or that is financed in whole or in part by the district then the affordable housing financing plan adopted pursuant to subdivision (d) of Section 53394.16 shall contain provisions to do all of the following:
(a)If the dwelling units to be removed or destroyed are or were inhabited by persons or families of very low, low, or moderate income, as defined in Sections 50105 and 50093 of the Health and Safety Code, at any time within five years prior to establishment of the district, cause or require the construction or rehabilitation of an equal number of replacement dwelling units, within one-half mile of the location of the units to be removed or destroyed, that have an equal or greater number of bedrooms as those removed or destroyed units, within two years of the removal or destruction of the dwelling units. The replacement dwelling units shall be available for rent or sale to persons or families of very low, low, or moderate income, at affordable rent, as defined in Section 50053 of the Health and Safety Code, or at affordable housing cost, as defined in Section 50052.5 of the Health and Safety Code, to persons in the same or a lower income category (extremely low, very low, low, or moderate), as the persons displaced from, or who last occupied, the removed or destroyed dwelling units.
(b)If the dwelling units to be removed or destroyed were not inhabited by persons of low or moderate income within the period of time specified in subdivision (a), cause or require the construction or rehabilitation within one-half mile of the location of the units to be removed or destroyed of at least one unit but not less than 25 percent of the total dwelling units removed or destroyed, within two years of the removal or destruction of the dwelling units. The units constructed or rehabilitated pursuant to this subdivision shall be of equivalent size and type to the units to be removed or destroyed. An equal percentage of the replacement dwelling units constructed or rehabilitated pursuant to this subdivision shall be available for rent or sale at affordable rent, as defined in Section 50053 of the Health and Safety Code, or affordable housing cost, as defined in Section 50052.5 of the Health and Safety Code, to extremely low and very low income persons or families, as defined in Sections 50106 and 50105 of the Health and Safety Code.
(c)Comply with all relocation assistance requirements of Chapter 16 (commencing with Section 7260) of Division 7 of Title 1, for persons displaced from dwelling units by any public works construction within the area of the district or private development within the area of the district that is subject to a written agreement with the district or that is financed in whole or in part by the district as a result of the affordable housing financing plan adopted pursuant to subdivision (d) of Section 53394.16. The displacement of any persons from a dwelling unit as a result of the plan shall be deemed to be the result of public action.
(d)Ensure that removal or destruction of any dwelling units occupied by persons or families of low or moderate income not take place unless and until there has been full compliance with the relocation assistance requirements of this section, Section 53394.15, and Chapter 16 (commencing with Section 7260) of Division 7 of Title 1.
(e)(1)Except as otherwise provided in paragraph (2), the district shall require, by recorded covenants or restrictions, that all dwelling units constructed or rehabilitated pursuant to this section shall remain available at affordable rent or housing cost to, and occupied by, persons and families of the same income categories as required by subdivision (a) or (b), as applicable, for the longest feasible time, but for not less than 55 years for rental units and 45 years for owner-occupied units.
(2)The district may permit sales of owner-occupied units before the expiration of the 45-year period for a price in excess of that otherwise permitted under this subdivision pursuant to an adopted program which protects the districts investment of moneys in the unit or units, including, but not limited to, an equity sharing program that is not in conflict with another public funding source or law, and that establishes a schedule of equity sharing that permits retention by the seller of a portion of those excess proceeds based on the length of occupancy. For purposes of this paragraph, the terms of the equity sharing program shall be consistent with the provisions of paragraph (2) of subdivision (c) of Section 65915, provided, however, that the program shall require any amounts recaptured by the district to be used within five years for any of the affordable housing purposes described in paragraph (3) of subdivision (a) of Section 34176.1 of the Health and Safety Code.
53394.24.(a)No more than six months after the end of the districts fiscal year, the district shall file a report with the governing board and the Department of Housing and Community Development containing the following information, regardless of whether each activity is funded exclusively by the state or federal government:
(1)The total number of nonelderly and elderly households, including separate subtotals of the numbers of very low income households, other lower income households, and persons and families of moderate income, that were displaced or moved from their dwelling units as part of an affordable housing or housing-related infrastructure project of the district during the previous fiscal year.
(2)The total number of nonelderly and elderly households, including separate subtotals of the numbers of very low income households, other lower income households, and persons and families of moderate income, that the district estimates will be displaced or will move from their dwellings as part of an affordable housing or housing-related infrastructure project of the district during the present fiscal year and the date of adoption of a replacement housing portion of the affordable housing financing plan required by Section 53394.23.
(3)The total number of dwelling units housing very low income households, other lower income households, and persons and families of moderate income, respectively, which have been destroyed or removed from the low- or moderate-income housing market during the previous fiscal year as part of an affordable housing or housing-related infrastructure project of the district, specifying the number of those units that are not subject to the replacement requirements of Section 53394.23.
(4)The total numbers of district-assisted dwelling units which were constructed, rehabilitated, acquired, or subsidized during the previous fiscal year for occupancy at an affordable housing cost by elderly persons and families, but only if the units are restricted by agreement or ordinance for occupancy by the elderly, and by very low income households, other lower income households, and persons and families of moderate income, respectively, specifying those units that are not currently so occupied, those units which have replaced units destroyed or removed pursuant to Section 53394.23, and the length of time any agency-assisted units are required to remain available at affordable costs.
(5)The total numbers of new or rehabilitated units subject to Section 53394.23, including separate subtotals of the number originally affordable to and currently occupied by, elderly persons and families, but only if the units are restricted by agreement or ordinance for occupancy by the elderly, and by very low income households, other lower income households, and persons and families of moderate income, respectively, and the length of time these units are required to remain available at affordable costs.
(6)The total amount of funds expended for planning and general administrative costs.
(7)Any other information which the agency believes useful to explain its housing programs.
(8)The total number of affordable housing units to be constructed under the terms of an executed agreement or contract and the name and execution date of the agreement or contract. These units may only be reported for a period of two years from the execution date of the agreement or contract.
(b)As used in this section:
(1)Elderly, has the same meaning as specified in Section 50067 of the Health and Safety Code.
(2)Persons and families of moderate income, has the same meaning as specified in subdivision (b) of Section 50093 of the Health and Safety Code.
(3)Other lower income households, has the same meaning as lower income households as specified in Section 50079.5 of the Health and Safety Code, exclusive of very low income households.
(4)Persons and families of low or moderate income, has the same meaning as specified in Section 50093 of the Health and Safety Code.
(5)Very low income households, has the same meaning as specified in Section 50105 of the Health and Safety Code.
4.Division of Taxes53394.30.(a)An affordable housing financing plan may contain a provision that taxes, if any, levied upon taxable property in the area included within the district each year by or for the benefit of the State of California, or any affected taxing entity after the effective date of the resolution adopted pursuant to subdivision (d) of Section 53394.16 to create the district, shall be divided as follows:
(1)That portion of the taxes that would be produced by the rate upon which the tax is levied each year by or for each of the affected taxing entities upon the total sum of the assessed value of the taxable property in the district as shown upon the assessment roll used in connection with the taxation of the property by the affected taxing entity, last equalized before the effective date of the resolution adopted pursuant to subdivision (d) of Section 53394.16 to create the district, shall be allocated to, and when collected shall be paid to, the respective affected taxing entities as taxes by or for the affected taxing entities on all other property are paid.
(2)That portion of the levied taxes each year in excess of the amount specified in paragraph (1) shall be allocated to, and when collected shall be paid into a special fund of, the district for all lawful purposes of the district. Unless and until the total assessed valuation of the taxable property in a district exceeds the total assessed value of the taxable property in the district as shown by the last equalized assessment roll referred to in paragraph (1), all of the taxes levied and collected upon the taxable property in the district shall be paid to the respective affected taxing entities. When the district ceases to exist pursuant to the adopted affordable housing financing plan, all moneys thereafter received from taxes upon the taxable property in the district shall be paid to the respective affected taxing entities as taxes on all other property are paid.
(b)Notwithstanding subdivision (a), where any district boundaries overlap with the boundaries of any former redevelopment project area, any debt or obligation of a district shall be subordinate to any and all enforceable obligations of the former redevelopment agency, as approved by the Oversight Board and the Department of Finance. For the purposes of this chapter, the division of taxes allocated to the district pursuant to subdivision (a) shall not include any taxes required to be deposited by the county auditor-controller into the Redevelopment Property Tax Trust Fund created pursuant to subdivision (b) of Section 34170.5 of the Health and Safety Code.
(c)The legislative body of the city or county forming the district may choose to dedicate any portion of its net available revenue to the district through the financing plan described in Section 53394.15.
(d)For the purposes of this section, net available revenue means periodic distributions to the city or county from the Redevelopment Property Tax Trust Fund, created pursuant to Section 34170.5 of the Health and Safety Code, that are available to the city or county after all preexisting legal commitments and statutory obligations funded from that revenue are made pursuant to Part 1.85 (commencing with Section 34170) of Division 24 of the Health and Safety Code. For purposes of this section, net available revenue shall not include any funds deposited by the county auditor-controller into the Redevelopment Property Tax Trust Fund or funds remaining in the Redevelopment Property Tax Trust Fund prior to distribution. Net available revenues shall not include any moneys payable to a school district that maintains kindergarten and grades 1 to 12, inclusive, community college districts, county office of education, or to the Educational Revenue Augmentation Fund, pursuant to paragraph (4) of subdivision (a) of Section 34183 of the Health and Safety Code.
(e)(1)That portion of any ad valorem property tax revenue annually allocated to a city or county pursuant to Section 97.70 of the Revenue and Taxation Code that is specified in the adopted affordable housing financing plan for the city or county that corresponds to the increase in the assessed valuation of taxable property shall be allocated to, and, when collected, shall be apportioned to, a special fund of the district for all lawful purposes of the district.
(2)When the district ceases to exist pursuant to the adopted affordable housing financing plan, the revenues described in this subdivision shall be allocated to, and, when collected, shall be apportioned to, the respective city or county.
(f)A district may utilize revenues from any of the following sources to support its activities provided that the applicable voter approval has been obtained, and the affordable housing financing plan has been approved pursuant to subdivision (d) of Section 53394.16:
(1)The Improvement Act of 1911 (Division 7 (commencing with Section 5000) of the Streets and Highways Code).
(2)The Municipal Improvement Act of 1913 (Division 12 (commencing with Section 10000) of the Streets and Highways Code).
(3)The Improvement Bond Act of 1915 (Division 10 (commencing with Section 8500) of the Streets and Highways Code).
(4)The Landscaping and Lighting Act of 1972 (Part 2 (commencing with Section 22500) of Division 15 of the Streets and Highways Code).
(5)The Vehicle Parking District Law of 1943 (Part 1 (commencing with Section 31500) of Division 18 of the Streets and Highways Code).
(6)The Parking District Law of 1951 (Part 4 (commencing with Section 35100) of Division 18 of the Streets and Highways Code).
(7)The Park and Playground Act of 1909 (Chapter 7 (commencing with Section 38000) of Part 2 of Division 3 of Title 4 of this code).
(8)The Mello-Roos Community Facilities Act of 1982 (Chapter 2.5 (commencing with Section 53311) of Part 1 of Division 2 of this title).
(9)The Benefit Assessment Act of 1982 (Chapter 6.4 (commencing with Section 54703) of Part 1 of Division 2 of this title).
(10)The so-called facilities benefit assessment levied by the charter city of San Diego or any substantially similar assessment levied for the same purpose by any other charter city pursuant to any ordinance or charter provision.
53394.31.(a)The portion of taxes required to be allocated pursuant to paragraph (2) of subdivision (a) of Section 53394.30 shall be allocated and paid into a special fund held in trust for the district by the county auditor or officer responsible for the payment of taxes into the funds of the affected taxing entities pursuant to the procedure contained in this section.
(b)Not later than October 1 of each year, for each affordable housing or housing-related infrastructure project for which the affordable housing financing plan provides for the division of taxes pursuant to Section 53394.30, the district shall file, with the county auditor or officer described in subdivision (a), a use of increment statement consistent with subdivision (c), a reconciliation statement consistent with subdivision (d), a passthrough statement consistent with subdivision (e), and an override passthrough statement consistent with subdivision (f). All statements required to be filed by this subdivision shall be certified by the chief financial officer of the district.
(c)(1)For each affordable housing or housing-related infrastructure project for which a use of increment statement is required to be filed, the use of increment statement shall contain all of the following:
(A)For each loan, advance, or indebtedness incurred or entered into, all of the following information:
(i)The date the loan, advance, or indebtedness was incurred or entered into.
(ii)The principal amount, term, purpose, interest rate, and total interest of each loan, advance, or indebtedness.
(iii)The principal amount and interest due in the fiscal year in which the statement of indebtedness is filed for each loan, advance, or indebtedness.
(iv)The total amount of principal and interest remaining to be paid for each loan, advance, or indebtedness.
(B)The sum of the amounts determined under clause (iii) of subparagraph (A).
(C)The sum of the amounts determined under clause (iv) of subparagraph (A).
(D)The available revenues as of the end of the previous year, as determined pursuant to paragraph (10) of subdivision (d).
(2)The district may estimate the amount of principal or interest, the interest rate, or term of any loan, advance, or indebtedness if the nature of the loan, advance, or indebtedness is such that the amount of principal or interest, the interest rate or term cannot be precisely determined. The district may list on a statement of indebtedness any loan, advance, or indebtedness incurred or entered into on or before the date the statement is filed.
(d)For each affordable housing or housing-related infrastructure project for which a reconciliation statement is required to be filed, the reconciliation statement shall contain all of the following:
(1)A list of all loans, advances, and indebtedness listed on the previous years statement of indebtedness.
(2)A list of all loans, advances, and indebtedness, not listed on the previous years statement of indebtedness, but incurred or entered into in the previous year and paid in whole or in part from revenue received by the district pursuant to Section 53394.30. This listing may aggregate loans, advances, and indebtedness incurred or entered into in the previous year for a particular purpose, including relocation expenses, administrative expenses, consultant expenses, or property management expenses, into a single item in the listing.
(3)For each loan, advance, or indebtedness described in paragraph (1) or (2), all of the following information:
(A)The total amount of principal and interest remaining to be paid as of the later of the beginning of the previous year or the date the loan, advance, or indebtedness was incurred or entered into.
(B)Any increases or additions to the loan, advance, or indebtedness occurring during the previous year.
(C)The amount paid on the loan, advance, or indebtedness in the previous year from revenue received by the district pursuant to Section 53394.30.
(D)The amount paid on the loan, advance, or indebtedness in the previous year from revenue other than revenue received by the district pursuant to Section 53394.30.
(E)The total amount of principal and interest remaining to be paid as of the end of the previous fiscal year.
(4)The available revenues of the district as of the beginning of the previous fiscal year.
(5)The amount of revenue received by the district in the previous fiscal year pursuant to Section 53394.30.
(6)The amount of available revenue received by the district in the previous fiscal year from any source other than pursuant to Section 53394.30.
(7)The sum of the amounts specified in subparagraph (D) of paragraph (3), to the extent that the amounts are not included as available revenues pursuant to paragraph (6).
(8)The sum of the amounts specified in paragraphs (4), (5), (6), and (7).
(9)The sum of the amounts specified in subparagraphs (C) and (D) of paragraph (3).
(10)The amount determined by subtracting the amount determined under paragraph (9) from the amount determined under paragraph (8). The amount determined pursuant to this paragraph shall be the available revenues as of the end of the previous fiscal year.
(e)A district shall prepare a passthrough statement that includes all of the following information:
(1)The projected amount of revenue that the district expects to be allocated as provided in paragraph (2) of subdivision (a) of Section 53394.30.
(2)For each affected taxing entity that is entitled to a passthrough, the district shall subtract from the amount described in paragraph (1) the amount calculated by the county auditor as provided in this paragraph. The county auditor shall calculate the proportional amount that the affected taxing entity would have received from property located within the boundaries of the district during the relevant fiscal year, inclusive of amounts the affected taxing entity would receive, if any, pursuant to Section 97.70 of, clause (i) of subparagraph (B) of paragraph (4) of subdivision (d) of Section 97.2 of, clause (i) of subparagraph (B) of paragraph (4) of subdivision (d) of Section 97.3 of, or Article 4 (commencing with Section 98) of Chapter 6 of Part 0.5 of Division 1 of the Revenue and Taxation Code. However, in no instance shall the amount calculated under this paragraph result in the affected taxing entity receiving an amount of ad valorem property tax revenue that is greater or lesser than the amount of ad valorem tax revenue received by the district that is attributable to that affected taxing entity, inclusive of the amounts the affected taxing entity would receive from any of the sources described in the preceding sentence.
(3)A statement of the total amount of passthrough payments that the district is required to make as calculated pursuant to paragraph (2).
(f)For each agency that has an override passthrough provision in the financing section of its resolution of intention, in accordance with subparagraph (I) of paragraph (4) of subdivision (a) of Section 53394.15, at the time of creation of that district, the district shall prepare an override passthrough statement that includes all of the following information:
(1)The projected amount of revenue that the district expects to be allocated as provided in paragraph (2) of subdivision (a) of Section 53394.30.
(2)For each affected taxing entity that imposed an override property tax with respect to property located with the boundaries of the district, the agency shall subtract from the amount described in paragraph (1) the amount calculated by the county auditor that is equivalent to the amount the affected taxing entity would have received from the override property tax imposed on that property in the absence of the district during the relevant fiscal year. The district shall include in the override passthrough statement the following information, to be provided to the county auditor:
(A)A description of the applicable override property tax that was imposed.
(B)The purpose it was imposed for.
(C)The entity that is entitled to receive revenue under that override property tax.
(3)A statement of the total amount of passthrough payments that the agency is required to make as calculated pursuant to paragraph (2).
53394.32.The district shall pay all costs incurred by a county in connection with the division of taxes pursuant to Section 53394.30 for a district.
5.Tax Increment Pooling with the ____53394.40.A district may enter into a contract with the ____ that shall include, at minimum, the following provisions:
(a)No later than December 31 of each year for which the contract is in effect, the district will remit the entirety of the amount allocated to it pursuant to Section 53394.30 to the ____. The contract may provide for either a one-time lump sum or a periodic remission of funds.
(b)Upon receipt of moneys remitted pursuant to subdivision (a), the ____ shall transfer the full amount to the custody of the Treasurer for deposit in the Affordable Housing Tax Increment Pooling Trust Fund, established pursuant to Section 51560 of the Health and Safety Code.
(c)The contract is subject to annual renewal, as follows:
(1)If the governing body adopts a resolution to terminate the contract, the ____ shall make a final allocation to the district from the Affordable Housing Tax Increment Pooling Trust Fund, as provided in Section 51560 of the Health and Safety Code, after which the district shall have no claim to any moneys in the Affordable Housing Tax Increment Pooling Trust Fund.
(2)If the governing body does not take any action by December 31 of any year for which a contract is entered into or renewed under this section, the contract shall be deemed to be renewed for the following year.
(d)The ____ shall issue revenue bonds secured by moneys remitted to the Affordable Housing Tax Increment Pooling Trust Fund pursuant to the contract in accordance with Article 2 (commencing with Section 51560) of Chapter 12 of Part 3 of Division 31 of the Health and Safety Code.
(e)No later than January 31 of each year following any year in which the contract is in effect, the ____ shall allocate an amount from the Affordable Housing Tax Increment Pooling Trust Fund to the district in proportion to the amount of moneys the district remitted for that year, as provided in Section 51560 of the Health and Safety Code.
(f)Moneys remitted to the ____ and deposited in the Affordable Housing Tax Increment Pooling Trust Fund, as required by this section and the contract, are property of the district that remitted the moneys and are not state moneys.
(g)Any other provision consistent with the requirements of this section that the district and the ____ agree to in order to fulfill the purposes of this chapter.
53394.41.The district shall expend moneys allocated to it under a contract entered into with the ____ and in accordance with Section 51560 of the Health and Safety Code solely for those purposes enumerated in the affordable housing financing plan adopted pursuant to subdivision (d) of Section 53394.16.
SEC. 5.Chapter 14 (commencing with Section 51550) is added to Part 3 of Division 31 of the Health and Safety Code, to read:14.Affordable Housing Financing Districts1.General Provisions51550.For purposes of this chapter:
(a)District contract means a contract entered into between the ____ and a district pursuant to Section 53394.40 of the Government Code.
(b)District means an affordable housing financing district established pursuant to Chapter 2.75 (commencing with Section 53394.01) of Part 1 of Division 2 of Title 5 of the Government Code.
(c)Fund means the Affordable Housing Financing Fund established pursuant to Section 51551.
(d)Loss reserve account means the Tax Increment Pooling Loss Reserve Account established within the fund pursuant to Section 51580.
(e)Trust fund means the Affordable Housing Tax Increment Pooling Trust Fund established pursuant to Section 51560.
51551.There is hereby established in the State Treasury the Affordable Housing Financing Fund. Upon appropriation by the Legislature, moneys in the fund shall be available to the ____ for purposes of Article 4 (commencing with Section 51580).
2.Affordable Housing Tax Increment Revenue Bonds51560.(a)(1)There is hereby established in the State Treasury the Affordable Housing Tax Increment Pooling Trust Fund. Notwithstanding Section 13340 of the Government Code, moneys in the trust fund are hereby continuously appropriated to the ____ for allocation to districts in accordance with this chapter.
(2)The ____ shall transfer all moneys it receives under a district contract to the custody of the Treasurer for deposit into the trust fund. No later than January 31 of each year, the ____ shall allocate moneys from the trust fund in the following order of priority:
(A)First, to the loss reserve account an amount equal to the amount transferred pursuant to Article 4 (commencing with Section 51580), if any, for purposes of paying debt service on revenue bonds for the immediately preceding fiscal year.
(B)Second, to each district that has a district contract an amount proportionate to the amount of money in the trust fund that the district contributed to the trust fund pursuant to that district contract during the immediately preceding calendar year. The ____ shall develop a methodology to determine the proportionate amount owed to each district.
(b)The Legislature hereby finds and declares that moneys in the trust fund are the property of the districts that have a district contract with the ____ and are not state moneys within the meaning of Section 16305.2 of the Government Code, but are instead the property of, and held in trust on behalf of, those districts. The state and the ____ shall not have any right, title, or interest in those moneys, except as is necessary for the issuance of revenue bonds pursuant to this chapter.
51561.(a)The ____ shall issue revenue bonds secured by moneys in the trust fund. Notwithstanding any other law, bonds issued pursuant to this chapter shall not be subject to Chapter 7 (commencing with Section 51350), unless explicitly provided otherwise in this chapter.
(b)(1)The treasurer shall coordinate the sale of the bonds of the ____. To obtain a date for the sale of bonds, the ____ shall inform the Treasurer of the amount of the proposed issue. Upon that notification, the Treasurer shall provide three 10-day periods, within the 90 days next following, when the bonds can be sold. The ____ may choose any date during the suggested periods or any other date to which the ____ and the Treasurer have mutually agreed. The Treasurer shall sell the bonds on the date chosen according to terms approved by the ____.
(2)The ____ shall exercise its powers with due regard for the right of the holders of bonds of the ____ at any time outstanding, and nothing in, or done pursuant to, this section shall in any way limit, restrict, or alter the obligation or powers of the ____ or any member, officer, or representative of the ____ or the Treasurer to carry out and perform in every detail each and every covenant, agreement, or contract at any time made or entered into on behalf of the ____ with respect to its bonds or its benefits, or the security of the holders of the bonds.
(c)The bonds authorized by resolution of the ____ pursuant to this chapter shall be in the form, bear those date or dates, and mature at the time or times as the resolution or resolutions may provide, except that a bond shall not mature more than 50 years from the date of its issue. The bonds may be issued as serial bonds or as term bonds, or as a combination thereof, and, notwithstanding any other law, the amount of principal of, or interest on, bonds maturing at each date of maturity need not be equal. The bonds shall bear interest at the rate or rates, be in those denominations, be in the form, either coupon or registered, carry those registration privileges, be executed in that manner, be payable in the medium of payment at the place or places within or without the state, be subject to the terms of redemption and contain those terms and conditions as the resolution or resolutions may provide. The bonds of the ____ pursuant to this chapter shall be sold at public or private sale by the Treasurer at, above, or below the par value, on the terms and conditions and for consideration in the medium of payment as the ____ shall determine by resolution before the sale.
(d)Any resolution or resolutions authorizing any bonds or issue therefor may contain the following provisions, which shall be a part of the contract or contracts with the holders of those bonds, as to:
(1)Pledging all or any part of the moneys in the trust fund to secure payment of the bonds or any issue of those bonds, subject to any agreement with the bondholders as may then exist.
(2)Limitations on the issuance of additional bonds, the terms upon which additional notes or bonds may be issued and secured, and the refunding of outstanding bonds.
(3)The procedure, if any, by which the terms of any contract with bondholders may be amended or abrogated, the amount of bonds the holders of which must consent thereto, and the manner in which that consent may be given.
(4)Vesting in a trustee or trustees any property, rights, powers, and duties in trust as the ____ may determine, and providing for or limiting or abrogating the right of the bondholders to appoint a trustee or limiting the rights, powers, and duties of that trustee.
(5)Defining the acts or omissions to act that shall constitute a default in the obligations and duties of the ____ to the holders of the bonds and providing for the rights and remedies of the holders of the bonds in the event of default. However, these rights and remedies shall not be inconsistent with the general laws of the state and the other provisions of this chapter.
(6)Any other matters of like or different character, which in any way affect the security, protection, or investment return of the holders of the bonds.
51562.(a)Bonds issued under this chapter shall not be deemed to constitute a debt or liability of the state or of any political subdivision thereof, other than the ____, or a pledge of the faith and credit of the state or of any such political subdivision, other than the ____, but shall be payable solely from funds provided pursuant to a district contract under this chapter. All those bonds and any prospectus or other printed representation of the ____ concerning those bonds shall contain on the face thereof a statement to the following effect: Neither the faith and credit nor the taxing power of the State of California is pledged to the payment of the principal of or interest on this bond.
(b)The issuance of bonds under this chapter shall not directly or indirectly or contingently obligate the state or any political subdivision thereof to levy or to pledge any form of taxation whatever therefor or to make any appropriation for their payment. Nothing contained in this section shall prevent or be construed to prevent the ____ from pledging its full faith and credit to the payment of bonds or issue of bonds authorized pursuant to this chapter.
(c)The ____ shall select bond underwriters and consultants.
(d)The members of the board, the executive director of the ____ , or any other person executing those notes or bonds shall not be subject to any personal liability or accountability by reason of the issuance thereof.
(e)In the event any of the board members or officers of the ____ whose signatures appear on any bonds or coupons shall cease to be board members or officers of the ____ before the delivery of those bonds, the signatures of those board members or officers shall, nevertheless, be valid and sufficient for all purposes, the same as if those board members or officers had remained in office until the delivery of the bonds.
51563.(a)(1)The Treasurer shall act as trustee for the ____ and the holders of its bonds, provided the Treasurer elects to serve as trustee with respect to a particular issuance of bonds by notifying the ____ of this election in writing at or before the board meeting at which the board approves a resolution authorizing the issuance and sale of the bonds.
(2)Any bonds issued under this chapter may be secured by a trust agreement, indenture, or resolution, by and between the ____ and a trustee or trustees, which may be the Treasurer or any trust company or bank having the powers of a trust company within or without the state. Notwithstanding other provisions in this division, references to the Treasurer as trustee shall be deemed to refer to either the Treasurer or the duly empowered bank or trust company trustee, as the case may be. The trust agreement, indenture, or the resolution providing for the issuance of the bonds may pledge or assign revenues to be received or proceeds of any contract or contracts pledged. Any resolution authorizing any bonds or issue thereof shall prescribe the duties of the Treasurer with respect to the issuance, authentication, sale, and delivery of the bonds, the payment of principal and interest thereof, and the redemption of the bonds. Notwithstanding any other law, the Treasurer shall not be deemed to have a conflict of interest by reason of acting as trustee pursuant to this chapter.
(3)The trustee shall act on behalf of the holders of the ____ bonds, or any stated percentage thereof, for the purpose of exercising and prosecuting on behalf of the holders in the manner and under conditions provided in the resolution authorizing the bonds.
(b)The Treasurer or other trustee acting on behalf of bondholders shall have and possess all the powers necessary or convenient for the exercise of any functions specifically set forth in this chapter or incident to the general representation of bondholders in the enforcement and protection of their rights.
51564.(a)The ____ may provide for the issuance of refunding bonds for the purpose of refunding any bonds then outstanding which have been issued under the provisions of this chapter, including the payment of any redemption premium thereon and any interest accrued or to accrue to the date of redemption of those bonds, and for any purpose of ____. The issuance of those obligations, the maturities and other details thereof, the rights of the holders thereof, and the rights, duties, and obligations of the ____ in respect of the same shall be governed by the provisions of this chapter that relate to the issuance of bonds, insofar as those provisions may be appropriate therefor.
(b)Refunding bonds issued as provided in this section may be sold, or exchanged for outstanding bonds issued under this chapter and, if sold, the proceeds thereof may be applied, in addition to any other authorized purposes, to the purchase, redemption, or payment of those outstanding bonds. Pending the application of the proceeds of any such refunding bonds, with any other available moneys, (1) to the payment of the principal, accrued interest, and any redemption premium on the bonds being refunded, (2) to the payment of any interest on such refunding bonds, or (3) to any expenses incurred in connection with such refunding, such proceeds may be invested in those obligations as are permitted under the bond resolution authorizing the issuance of refunding bonds.
51565.The state hereby pledges to and agrees with the holders of any bonds issued under this chapter that the state will not limit or alter the rights hereby vested in the ____ to fulfill the terms of any agreements made with the holders thereof or in any way impair the rights and remedies of those holders until those bonds, together with the interest thereon, with interest on any unpaid installments of interest, and all costs and expenses in connection with any action or proceeding by or on behalf of those holders, are fully met and discharged. The ____ is authorized to include this pledge and agreement of the state in any agreement with the holders of those notes or bonds.
51566.Any action or proceeding challenging the validity of revenue bonds or refunding bonds issued under this chapter shall be brought in accordance with, and within the time specified in, Chapter 9 (commencing with Section 860) of Title 10 of Part 2 of the Code of Civil Procedure. The Superior Court of the County of Sacramento shall have jurisdiction of, and the County of Sacramento shall be the appropriate venue for any suit, action, or proceedings by the trustee on behalf of bondholders.
3.Tax Increment Pool Loss Reserve Account51580.(a)There is hereby established in the fund the Tax Increment Pool Loss Reserve Account. The ____ shall, pursuant to subparagraph (A) of paragraph (2) of subdivision (a) of Section 51560, allocate money from the trust fund to the loss reserve account.
(b)(1)The ____ shall notify the Joint Legislative Budget Committee if, in any fiscal year, the ____ determines that there are insufficient moneys in the trust fund to pay the debt service on revenue bonds issued pursuant to Article 2 (commencing with Section 51560) for that fiscal year.
(2)Upon appropriation in the annual Budget Act, the Controller shall transfer moneys from the loss reserve account to the trust fund for the sole purpose of paying debt service on revenue bonds issued pursuant to Article 2 (commencing with Section 51560) for any fiscal year for which the ____ notifies the Joint Legislative Budget Committee pursuant to paragraph (1), in an amount necessary to pay that debt service for that fiscal year.
SEC. 6.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because a local agency or school district has the authority to levy service charges, fees, or assessments sufficient to pay for the program or level of service mandated by this act, within the meaning of Section 17556 of the Government Code.
SECTION 1.Section 16305.2 of the Government Code is amended to read:16305.2.(a)All money in the possession of or collected by any state agency or department, except for money in the Local Agency Investment Fund, is subject to Sections 16305.3 to 16305.7, inclusive, and is hereafter referred to as state money.(b)Except as otherwise provided by this chapter or authorized by statute, any transfer, expenditure, or other use of state money knowingly committed by a state employee, outside of the State Treasury System is a misdemeanor, punishable by up to one year in a county jail, or a three-thousand-dollar ($3,000) fine, or both.(a)All money in the possession of or collected by any state agency or department, except for money in the Local Agency Investment Fund, is subject to Sections 16305.3 to 16305.7, inclusive, and is hereafter referred to as state money.
(b)Except as otherwise provided by this chapter or authorized by statute, any transfer, expenditure, or other use of state money knowingly committed by a state employee, outside of the State Treasury System is a misdemeanor, punishable by up to one year in a county jail, or a two-thousand-five-hundred-dollar ($2,500) three-thousand-dollar ($3,000) fine, or both.
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Date
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Status
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|---|---|
| Feb 1, 2024 | From committee: Filed with the Chief Clerk pursuant to Joint Rule 56. |
| Jan 31, 2024 | Died pursuant to Art. IV, Sec. 10(c) of the Constitution. |
| Jan 18, 2024 | In committee: Held under submission. |
| Jan 18, 2024 | In committee: Set, first hearing. Referred to APPR. suspense file. |
| May 2, 2023 | Re-referred to Com. on APPR. |
| May 1, 2023 | Read second time and amended. |
| Apr 27, 2023 | From committee: Amend, and do pass as amended and re-refer to Com. on APPR. (Ayes 6. Noes 2.) (April 26). |
| Apr 20, 2023 | From committee: Do pass and re-refer to Com. on H. & C.D. (Ayes 6. Noes 1.) (April 19). Re-referred to Com. on H. & C.D. |
| Apr 12, 2023 | Re-referred to Com. on L. GOV. |
| Apr 11, 2023 | From committee chair, with author's amendments: Amend, and re-refer to Com. on L. GOV. Read second time and amended. |
| Mar 27, 2023 | Re-referred to Com. on L. GOV. |
| Mar 23, 2023 | From committee chair, with author's amendments: Amend, and re-refer to Com. on L. GOV. Read second time and amended. |
| Mar 23, 2023 | Referred to Coms. on L. GOV. and H. & C.D. |
| Feb 15, 2023 | From printer. May be heard in committee March 17. |
| Feb 14, 2023 | Read first time. To print. |
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Date
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Description
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Location
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Votes
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|---|---|---|---|---|
| Apr 26, 2023 | Do pass as amended and be re-referred to the Committee on [Appropriations] | Assembly Standing Committee on Housing and Community Development |
Passed |
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| Apr 19, 2023 | Do pass and be re-referred to the Committee on [Housing and Community Development] | Assembly Standing Committee on Local Government |
Passed |
This list shows positions taken on this bill by organizations on the date displayed, which is linked to the original source.
Positions by individuals are not included.
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Organization
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Position
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Date
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|---|---|---|
| California Association Local Housing Finance Agency | * Support | Apr 26, 2023 |
| CivicWill | * Support | Apr 19, 2023 |
| Howard Jarvis Taxpayers Association | ** Against | |
| San Francisco Bay Area Planning and Urban Research Association | ** Support |
Date of Hearing: January 18, 2024
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Chris Holden, Chair
ABPCA Bill Id:AB 901
Author:(Ting) – As Amended Ver:May 1, 2023
Policy Committee: | Local Government | Vote: | 5 - 1 |
Housing and Community Development | 6 - 2 | ||
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Urgency: No State Mandated Local Program: Yes Reimbursable: No
SUMMARY:
This bill authorizes a city or county to establish an affordable housing financing district (district) to finance the development of affordable housing and housing–related infrastructure. The bill allows a district to use tax increment financing and to remit its tax increment revenues to the California Housing Finance Authority (CalHFA) for purposes of issuing revenue bonds to support the activities of the district.
Among its provisions, this bill:
- Authorizes a city or county to establish a district by adopting a resolution that meets specified content and process requirements. Upon the adoption of the resolution, the legislative body of the city or county must act as the governing board of the district.
- Requires the governing board to direct the preparation of an affordable housing financing plan, consistent with the underlying city or county’s general plan, and specifies the process for adopting the financing plan.
- Limits the activities of the district to financing the development of affordable housing and housing-related infrastructure within the territory of the district, as specified.
- Authorizes a district to include a tax increment financing mechanism in its affordable housing financing plan, among other financing options.
- Requires a district to spend at least 80% of funds derived from tax increment revenues on affordable housing and no more than 20% on affordable housing-related infrastructure necessary to support the development of affordable housing.
- Authorizes a district to contract with CalHFA for the purpose of remitting its tax increment allocation to CalHFA for deposit into the Affordable Housing Tax Increment Pooling Trust Fund (trust fund), created by this bill.
- Requires CalHFA to use the collective trust fund moneys to secure the issuance of revenue bonds. CalHFA must allocate the bond proceeds to each contracted district in an amount proportionate to the district’s contribution to the trust fund and requires the district to spend those revenues solely for the purposes enumerated in the district’s housing financing plan.
- Creates the Tax Increment Pool Loss Reserve Account (loss reserve account) within the trust fund and, requires the State Controller, upon appropriation in the annual budget act, to transfer moneys from the loss reserve account to the trust fund to pay debt service on the revenue bonds in any fiscal year in which there are insufficient moneys in the trust fund to pay the debt service.
- Requires each district, no more than six months after the end of its fiscal year, to file a report with its governing board and the Department of Housing and Community Development (HCD) regarding the district’s housing activities.
FISCAL EFFECT:
- CalHFA estimates total General Fund (GF) costs of approximately $26 million, which includes approximately $14 million in ongoing expenses for staffing, bond underwriting and counsel, audits, compliance and monitoring, financial consulting and tax compliance, as well as $12 million in one-time costs for IT software development expenses.
CalHFA indicates it would need to create a completely new structure to administer this statewide program, including financing, underwriting and oversight and compliance components in an area in which CalHFA has no existing institutional knowledge or background. CalHFA is not aware of an economic analysis detailing the feasibility of project sponsor fees sustaining these costs, and therefore assumes the GF may have to cover a substantial portion of these expenses.
- HCD estimates minor and absorbable costs to facilitate the receipt of the district reports.
- Costs to county auditors of an unknown amount to reallocate property tax revenues pursuant to this bill. These costs are not likely reimbursable by the state, subject to a determination by the Commission on State Mandates, because counties may levy fees, service charges, or assessments to cover the cost of these services. Further, this bill requires a district formed pursuant to this bill to pay all costs incurred by a county for this task. County auditor costs will be offset to the extent payment by a district occurs.
COMMENTS:
- Purpose. The author of this bill seeks to create a continuous funding stream for affordable housing construction and related infrastructure by authorizing a funding partnership between the state and local agencies. According to the author, “the bill encourages local governments to create affordable housing financing districts, collect the tax increment from these districts, and pool the funds collected at the state level to acquire bonds. By pooling these dollars, districts receive greater returns on their investment at much faster rates.”
- Background. After the dissolution of redevelopment agencies (RDAs) in 2012, per the Supreme Court’s 2011 Matasantos decision, the Legislature created and subsequently modified new tax increment financing tools to pay for local economic development, including housing. These tools include Enhanced Infrastructure Financing Districts (EIFDs), Community Revitalization and Investment Authorities (CRIAs), affordable housing authorities (AHAs), and climate resilience districts (CRDs). These tools have been seldom used, some not at all. According to a 2021 report by the Governor’s Office of Planning and Research (OPR), key limitations of these new tools (compared to RDAs) include their lack of access to the schools’ share of property tax increment and their reliance on voluntary participation of other taxing entities. Both of these features limit the revenue potential of these tools, thereby limiting their usefulness.
This bill authorizes a city or county to establish an affordable housing financing district with tax increment authority similar to the above entities. However, in an attempt to improve district viability, districts formed under this bill would be required to remit their portion of tax increment to CalHFA who would pool the funds from participating districts to secure the issuance of revenue bonds. The idea is the pooled funds would receive a greater return on investment, grow at a faster rate, and be available to districts for projects sooner compared to funds held by an individual district. Whether this approach will be more successful than existing approaches is unclear because it will still depend on the number of participating districts and the amount of tax increment revenue generated.
- Related Legislation. AB 930 (Freidman) authorizes local agencies to establish Reinvestment in Infrastructure for a Sustainable and Equitable California (RISE) districts. AB 930 is pending hearing in this committee.
AB 1476 (Alvarez) enacts the Community Redevelopment Law of 2023. AB 1476 was referred to, but never heard in, this committee.
Analysis Prepared by: Jennifer Swenson / APPR. / (916) 319-2081
Date of Hearing: April 26, 2023
ASSEMBLY COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT
Buffy Wicks, Chair
ABPCA Bill Id:AB 901 (
Author:Ting) – As Amended Ver:April 11, 2023
SUBJECT: Affordable housing financing districts
SUMMARY: Authorizes the creation of affordable housing financing districts (districts). Specifically, this bill:
- Defines the following terms:
- “Affected taxing entity” to mean any governmental taxing agency which levied or had levied on its behalf a property tax on all or a portion of the property located in the proposed district in the fiscal year or before the designation of the district. An “affected taxing entity” does not include a special district unless the special district adopts a resolution approving the affordable housing financing plan, as specified. “Affected taxing entity” does not include a school district of every class or kind, including, but not limited to, a unified or nonunified school district, that maintains kindergarten and grades 1 to 12, inclusive, community college districts, or county office of education.
- “Affected taxing entity equity amount” to mean the amount of ad valorem property tax revenue that the affected taxing entity would have received from property located within the redevelopment project area in the absence of the district, calculated as specified.
- “Affordable housing” to mean owner-occupied housing with an affordable housing cost or rental housing with an affordable rent, as defined, to persons or families whose income does not exceed 60% of the area median income, as specified.
- “Affordable housing financing district” to mean a legally constituted governmental entity separate and distinct from the city or county that established it for the purpose of financing affordable housing and related infrastructure. A district is subject to the Ralph M. Brown Act’s open meeting laws.
- “Agency” to mean the California Housing Finance Agency (CalHFA).
- “Debt” to mean any binding obligation to repay a sum of money, including obligations in the form of bonds, certificates of participation, long-term leases, loans from government agencies, or loans from banks, other financial institutions, private businesses, or individuals.
- “Designated official” to mean the city or county engineer or other appropriate official.
- “Fiscal year” to mean a year beginning on July 1 and ending the following June 30.
- “Governing board” to mean the legislative body of a city or county that establishes a district.
- “Landowner” or “owner of land” to mean any person shown as the owner of land on the last equalized assessment roll or otherwise known to be the owner of the land by the legislative body. The legislative body has no obligation to obtain information as to the ownership of land, and its determination of ownership shall be final and conclusive for the purposes of this bill. A public agency is not a landowner or owner of land for the purposes of this chapter, unless the public agency owns all of the land to be included in the proposed district.
- “Legislative body” to mean the city council of the city or board of supervisors of the county.
- “Project” to mean any undertaking of a district pursuant to this bill.
- “Special district” to mean an agency of the state formed for the performance of governmental or proprietary functions with limited geographical boundaries.
- Authorizes a legislative body of a city or county to propose the establishment of a district. The legislative body of the city or county may institute proceedings for the establishment of a district by adopting a resolution of intention to establish the proposed district. The legislative body shall include all of the following in the resolution of intention:
- State that the legislative body proposes the establishment of a district under the terms of this bill and describe the boundaries of the proposed district, as specified.
- State the type of affordable housing projects and related infrastructure proposed to be financed or assisted by the district.
- State the need for the district and the goals the district proposes to achieve.
- State that incremental property tax revenue from the city or county and all affected taxing entities within the district, if approved by specified resolution, may be used to finance these activities.
- Fix a time and place for a public hearing on the proposal.
- Specifies that upon adoption of a resolution of intention, the legislative body shall act as the governing board of the district.
- Provides that a city or county that created a redevelopment agency (RDA) shall neither initiate the creation of the district, nor participate in the governance or financing of a district, until specified conditions are met.
- Authorizes a city or county to establish more than one district within its jurisdictional boundaries, but the city or county shall not merge existing districts or establish a new district that includes any area within boundaries of another district. However, a city or county may establish districts with adjoining boundaries.
- Allows a district to include any portion of a former redevelopment project area that was previously created, provided that the city or county that created the former RDA has met specified requirements.
- Provides that a district may finance only specified facilities to the extent that the facilities are in addition to those provided in the territory of the district before the district was created. The district shall not finance additional facilities that supplant facilities already available within that territory when the district was created.
- Allows a district to include areas which are not contiguous.
- Requires the legislative body to direct the city or county official, as applicable, selected by the legislative body, to mail a copy of the resolution of intention to create the district to each owner of land within the district.
- Provides that as an alternative to mailing a copy of the resolution of intention pursuant to 9) above, the legislative body may direct the city official or county official, as applicable, selected by the legislative body, to mail a single-page notice of intention to create the district to each owner of land within the district. For purposes of this section, the notice of intention shall indicate the physical location or internet website where documents related to the district, including the resolution of intention, will be made available for public viewing or inspection. The notice of intention shall also state the date of the public hearing on the proposal and include a brief description of the types of public facilities to be financed by the district.
- Requires the legislative body to direct the city official, as applicable, selected by the legislative body, to mail a copy of the resolution to each affected taxing entity.
- Specifies that upon adoption of the resolution of intention to establish the district by the legislative body, the governing board shall designate and direct the city or county engineer or other appropriate official to prepare an affordable housing financing plan.
- Provides that after receipt of a copy of the resolution of intention to establish a district, the designated official shall prepare a proposed affordable housing financing plan. The proposed affordable housing financing plan shall be consistent with the general plan of the city or county within which the district is located and shall include specified information, including a financing section.
- Requires the affordable housing financing plan to be sent to each owner of land within the proposed district and to each affected taxing entity together with any report required by the California Environmental Quality Act (CEQA) that pertains to the proposed affordable housing and related infrastructure projects, and to be made available for public inspection. The report shall also be sent to the governing board, the planning commission, and the legislative body.
- Requires the designated official to consult with each affected taxing entity, and, at the request of any affected taxing entity, shall meet with the representatives of an affected taxing entity. Any affected taxing entity may suggest revisions to the plan.
- Requires the governing board to conduct a public hearing before adopting the proposed affordable housing financing plan. The governing board shall call the public hearing no sooner than 60 days after the plan has been sent to each affected taxing entity. In addition to the notice given to landowners and affected taxing entities, the governing board shall give notice of the public hearing by publication not less than once a week for four successive weeks in a newspaper of general circulation published in the city or county in which the proposed district is located. The notice shall state specified information.
- Provides that at the hour set in the required notices, the governing board shall proceed to hear and pass upon all written and oral objections. The governing board may continue the hearing from time to time. The governing board shall consider recommendations, if any, of affected taxing entities, and all evidence and testimony for and against the adoption of the plan. The governing board may modify the plan.
- Prohibits the governing body from adopting a resolution adopting the affordable housing financing plan providing for the division of taxes of any affected taxing entity unless a resolution approving the plan has been adopted by the governing body of each affected taxing entity that is proposed to be subject to the division of taxes, as specified, has been filed with the governing body at or prior to the time of the hearing.
- Specifies that nothing in 18) above shall be construed to prevent the governing body from amending the affordable housing financing plan without allocation of the tax revenues of any affected taxing entity which has not approved the affordable housing financing plan by resolution of the governing body of the affected taxing entity.
- Provides that at the conclusion of the hearing, the governing board may adopt a resolution adopting the affordable housing financing plan, as modified, and formation of the affordable housing financing district, or it may adopt a resolution abandoning the proceedings. If the proceedings are abandoned, then the governing board shall cease to exist with no further action required of the legislative body and the legislative body shall not enact a resolution of intention to establish a district that includes the same geographic area within one year of the date of the resolution abandoning the proceedings.
- Specifies that the plan shall take effect upon adopting the plan. The plan shall specify how the plan will be funded, as specified.
- Provides that any action or proceeding to attack, review, set aside, void, or annul the creation of a district, adoption of an affordable housing financing plan, including a division of taxes thereunder, shall be commenced within 30 days after the enactment of the resolution creating the district. An action or proceeding with respect to a division of taxes may be brought pursuant to existing validation laws.
- Requires the legislative body of the county or city that establishes the district to serve as the governing board of the district.
- Provides that the board shall not receive compensation, but may receive reimbursement for actual and necessary expenses incurred in the performance of official duties, members of the governing board are subject to ethics training requirements, and the board shall be a local public agency subject to the Ralph M. Brown Act, California Public Records Act and the Political Reform Act of 1974.
- Limits the activities of a district to financing the development of affordable housing and housing-related infrastructure within its territorial boundaries. In connection with the development of affordable housing and related infrastructure, the district may finance the following:
- The purchase, construction, expansion, improvement, seismic retrofit, or rehabilitation of any real or other tangible property with an estimated life of 15 years or longer.
- The planning and design work that is directly related to the purchase, construction, expansion, or rehabilitation of affordable housing.
- Water, sewer, or other public infrastructure necessary to support the development of affordable housing, and other costs as specified.
- The ongoing or capitalized costs to maintain public capital facilities in whole or in part by the district.
- Provides that a district may not do either of the following in connection with the development of affordable housing and related infrastructure:
- Finance services of any kind.
- Use the proceeds of bonds issued to finance the costs of maintenance or ongoing operations of any kind.
- Specifies that the affordable housing and housing-related infrastructure financed by the district are not required to be physically located within the boundaries of the district. However, any affordable housing and housing-related infrastructure financed outside of a district shall have a tangible connection to the work of the district, as detailed in the plan.
- Provides that the district shall require, by recorded covenants or restrictions, that housing units built, as specified, shall remain affordable housing for the longest feasible time, but not less than 55 years for rental units and 45 years for owner-occupied units.
- Specifies that the district may finance mixed-income housing developments, but may finance only those units in such a development that constitute affordable housing, as specified, and those onsite facilities for childcare, after school care, and social services that are integrally linked to the tenants of those affordable housing units.
- Authorizes a district to use powers under specified acts related to hazardous waste mitigation and finance any action necessary to implement those acts, as specified.
- Prohibits a district from incurring debt in the form of bonds secured by specified revenues.
- Authorizes a district to reimburse a developer of a project that is located entirely within the boundaries of that district for any permit expenses incurred and to offset additional expenses incurred by the developer in constructing affordable housing units pursuant to the Transit Priority Project Program, as specified.
- Contains provisions related to the removal or destruction of dwelling units, the requirements the district must follow when dwelling units are removed or destroyed, and the requirements the district must follow related to relocation assistance, as specified.
- Requires the district, no more than six months after the end of the district’s fiscal year, to file a report with the governing board and the Department of Housing and Community Development (HCD) containing specified information.
- Provides that a plan may contain a provision that taxes, if any, levied upon taxable property in the area included within the district each year by or for the benefit of the State of California, or any affected taxing entity after the effective date of the adoption of the resolution to create the district shall be divided as follows:
- That portion of the taxes that would be produced by the rate upon which the tax is levied each year by or for each of the affected taxing entities upon the total sum of the assessed value of the taxable property in the district as shown upon the assessment roll used in connection with the taxation of the property by the affected taxing entity, last equalized before the effective date of the resolution to create the district, shall be allocated to, and when collected shall be paid to, the respective affected taxing entities as taxes by or for the affected taxing entities on all other property are paid.
- That portion of the levied taxes each year in excess of the amount specified in a) above, shall be allocated to, and when collected shall be paid into a special fund of, the district for all lawful purposes of the district. Unless and until the total assessed valuation of the taxable property in a district exceeds the total assessed value of the taxable property in the district as shown by the last equalized assessment roll referred to in a) above, all of the taxes levied and collected upon the taxable property in the district shall be paid to the respective affected taxing entities. When the district ceases to exist pursuant to the adopted affordable housing financing plan, all moneys thereafter received from taxes upon the taxable property in the district shall be paid to the respective affected taxing entities as taxes on all other property are paid.
- That portion of the taxes that would be produced by the rate upon which the tax is levied each year by or for each of the affected taxing entities upon the total sum of the assessed value of the taxable property in the district as shown upon the assessment roll used in connection with the taxation of the property by the affected taxing entity, last equalized before the effective date of the resolution to create the district, shall be allocated to, and when collected shall be paid to, the respective affected taxing entities as taxes by or for the affected taxing entities on all other property are paid.
- Notwithstanding subdivision 35) above, where any district boundaries overlap with the boundaries of any former redevelopment project area, any debt or obligation of a district shall be subordinate to any and all enforceable obligations of the former RDA, as approved by the Oversight Board and the Department of Finance (DOF). The division of taxes allocated to the district pursuant to 35) above, shall not include any taxes required to be deposited by the county auditor-controller into the Redevelopment Property Tax Trust Fund (RPTTF), as specified.
- Allows the legislative body of the city or county forming the district to choose to dedicate any portion of its net available revenue to the district through the plan, and defines “net available revenue” for its purposes.
- Requires that portion of any ad valorem property tax revenue annually allocated to a city or county pursuant to existing law related to the Educational Revenue Augmentation Fund (ERAF) that is specified in the adopted plan for the city or county that corresponds to the increase in the assessed valuation of taxable property, to be allocated to, and when collected to be apportioned to, a special fund of the district for all lawful purposes of the district. When the district ceases to exist, these specified revenues shall be allocated to, and when collected, shall be apportioned to, the respective city or county.
- Authorizes a district to utilize revenues from any of the following sources to support its activities provided that the applicable voter approval has been obtained, and the plan has been approved: the Improvement Act of 1911; the Municipal Improvement Act of 1913; the Improvement Bond Act of 1915; the Landscaping and Lighting Act of 1972; the Vehicle Parking District Law of 1943; the Parking District Law of 1951; the Park and Playground Act of 1909; the Mello-Roos Community Facilities Act of 1982; the Benefit Assessment Act of 1982; and, the so-called facilities benefit assessment levied by the charter city of San Diego or any substantially similar assessment levied for the same purpose by any other charter city pursuant to any ordinance or charter provision.
- Requires the portion of specified taxes to be allocated and paid into a special fund held in trust for the district by the county auditor or officer responsible for the payment of taxes into the funds of the affected taxing entities, as specified.
- Requires, not later than October 1 of each year, for each affordable housing or housing-related infrastructure project for which the plan provides for the division of taxes, the district to file, with the county auditor or other specified officer, a use of tax increment statement and a reconciliation statement. Specifies the information that must be included in each statement. All statements required to be filed shall be certified by the chief financial officer of the district.
- Requires the district to pay all costs incurred by a county in connection with the division of taxes, as specified.
- Authorizes a district to enter into a contract with CalHFA that shall include, at a minimum, the following provisions:
- No later than December 31 of each year for which the contract is in effect, the district will remit the entirety of the amount of specified taxes allocated to it to CalHFA. The contract may provide for either a one-time lump sum or a periodic remission of funds.
- Upon receipt of moneys remitted pursuant to a) above, CalHFA shall transfer the full amount to the custody of the treasurer for deposit in the Affordable Housing Tax Increment Pooling Trust Fund (Trust Fund), as specified.
- The contract is subject to annual renewal, as follows:
- If the governing body adopts a resolution to terminate the contract, CalHFA shall make a final allocation to the district from the Trust Fund, as specified, after which the district shall have no claim to any moneys in the Trust Fund.
- If the governing body does not take any action by December 31 of any year for which the contract is entered into or renewed, as specified, the contract shall be deemed to be renewed for the following year.
- CalHFA shall issue revenue bonds secured by moneys remitted to the Trust Fund, as specified.
- No later than January 31 of each year following any year in which the contract is in effect, CalHFA shall allocate an amount from the Trust Fund to the district in proportion to the amount of moneys the district remitted that year, as specified.
- Moneys remitted to CalHFA and deposited in the Trust Fund are property of the district that remitted the moneys and are not state moneys.
- Any other provisions consistent with the agreement made between the district and CalHFA.
- Requires the district to expend the moneys allocated to it under a contract entered into with CalHFA, as specified.
- Establishes, in the State Treasury, the Affordable Housing Financing Fund (fund).
- Establishes, in the State Treasury, the Trust Fund. Moneys in the Trust Fund are hereby continuously appropriated to CalHFA for allocation to districts, as specified. Provides the requirements for the allocation of moneys, the issuance and sale of revenue bonds by CalHFA, and other specified requirements on CalHFA and the Treasurer.
- Provides that any action or proceeding challenging the validity of revenue bonds or refunding bonds issued shall be brought in accordance with, and within the time specified in, validating procedures in existing law.
- Establishes, in the fund, the Tax Increment Pool Loss Reserve Account. CalHFA shall allocate money from the Trust Fund to the loss reserve account, as specified.
- Requires CalHFA to notify the Joint Legislative Budget Committee if, in any fiscal year, CalHFA determines that there are insufficient moneys in the Trust Fund to pay debt service on issued revenue bonds for that fiscal year.
- Specifies that upon appropriation in the annual Budget Act, the Controller shall transfer moneys from the loss reserve account to the Trust Fund for the sole purpose of paying debt service on revenue bonds issued for any fiscal year for which CalHFA notifies the Joint Legislative Audit Committee, as specified, in an amount necessary to pay debt service for that fiscal year.
- Provides that all money in the Trust Fund shall be held in trust in the custody of the Treasurer.
- Specifies that all money in the Trust Fund is nonstate money. That money shall be held in a trust account or accounts. The Controller shall be responsible for maintaining those accounts to record the Treasurer’s accountability, and shall maintain a separate account for each trust deposit in the Trust Fund.
- Provides that moneys in the Trust Fund shall be subject to audit by DOF and to cash count, as specified. It may be withdrawn only upon order of the depositing entity or its disbursing officers. The system that the Director of Finance has established for the handling, receiving, holding, and disbursing of state agency money shall also be used for the money in the Trust Fund.
- Makes numerous technical and conforming changes.
- States that no reimbursement is required by this act because a local agency or school district has the authority to levy service charges, fees, or assessments sufficient to pay for the program level of service mandated by this act.
EXISTING LAW:
- Defines “major transit stop” to mean a site containing an existing rail transit station, a ferry terminal served by either a bus or rail transit service, or the intersection of two or more major bus routes with a frequency of service interval of 15 minutes or less during the morning and afternoon peak commute periods.
- Defines “high quality transit corridor” to mean a corridor with fixed bus route service with service intervals no longer than 15 minutes during peak commute hours.
- Allows a legislative body of a city or county to designate one or more proposed enhanced infrastructure financing districts (EIFDs) pursuant to EIFD law, and requires the establishment of a district to be instituted by the adoption of a resolution of intention to establish the proposed district, and include the following:
- State that an EIFD is proposed and describe the boundaries of the proposed district, as specified;
- State the type of public facilities and development proposed to be financed or assisted by the EIFD in accordance with existing EIFD law;
- State the need for the EIFD and the goals the district proposes to achieve;
- State the incremental property tax revenue from the city or county and some or all affected taxing entities within the EIFD, if approved by resolution of the affected agencies, may be used to finance these activities; and,
- Fix a time and place for a public hearing on the proposal.
- Requires, after the resolution of intention to establish a district, the designated official to prepare a proposed infrastructure financing plan, which shall be consistent with the general plan of the city or county within which the district is located. Requires the plan to include a financing section, containing the following information:
- A specification of the maximum portion of the incremental tax revenue of the city or county and of each affected taxing entity proposed to be committed to the district for each year during which the district will receive incremental tax revenue, as specified;
- A projection of the amount of tax revenues expected to be received by the district for each year during which the district will receive incremental tax revenues, including an estimate of the amount of tax revenues attributable to each affected taxing entity for each year;
- A plan for financing the public facilities to be assisted by the district, including a detailed description of any intention to incur debt;
- A limit on the total number of tax dollars that may be allocated in the district pursuant to the plan; and,
- A date on which the district will cease to exist, by which time all tax allocation to the district will end. Requires the date to not be more than 45 years from the date on which the issuance of bonds is approved or the issuance of a loan is approved by the governing board of a local agency.
- Requires the plan to be sent to each owner of land within the proposed district and to each affected taxing entity together with any report required by CEQA.
- Allows the legislative body of the city or county forming the district to choose to dedicate any portion of its net available revenue to the district through the financing plan.
- Allows an EIFD to finance only public capital facilities or other specified projects of communitywide significance that provide significant benefits to the EIFD or the surrounding community, including, but not limited to, all of the following:
- Highways, interchanges, ramps and bridges, arterial streets, parking facilities, and transit facilities;
- Sewage treatment and water reclamation plants and interceptor pipes;
- Facilities for the collection and treatment of water for urban uses;
- Flood control levees and dams, retention basins, and drainage channels;
- Child care facilities;
- Libraries;
- Parks, recreation facilities, and open space;
- Facilities for the transfer and disposal of solid waste, including transfer stations and vehicles;
- Brownfield restoration and other environmental mitigation;
- 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;
- 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 RHIA;
- The acquisition, construction, or repair of industrial structures for private use;
- Transit priority projects, as defined in existing law, that are located with a transit priority project area. For purposes of the bill, a transit priority project area may include a military base reuse plan that meets the definition of a transit priority project area and it may include a contaminated site within a transit priority project area; and,
- Projects that implement a sustainable community’s strategy, when the State Air Resources Board has accepted a metropolitan planning organization's determination that the sustainable community’s strategy or the alternative planning strategy would, if implemented, achieve the greenhouse gas emission reduction targets.
FISCAL EFFECT: Unknown.
COMMENTS:
Author’s Statement: According to the author, “California has an affordable housing crisis and over the last several years, the State has made historic investments to address homelessness and promote affordable housing creation. However, California needs a continuous funding stream for affordable housing. AB 901 creates a partnership between local agencies and the State to fund affordable housing construction. The bill encourages local governments to create affordable housing financing districts, collect the tax increment from these districts, and pool the funds collected at the state level to acquire bonds. By pooling these dollars, districts receive greater returns on their investment at much faster rates. AB 901 creates a powerful tool for local agencies to fund affordable housing construction.”
Redevelopment: Article XVI, Section 16 of the California Constitution authorizes the Legislature to provide for the formation of RDAs to eliminate blight in an area by means of a self-financing schedule that pays for the redevelopment project with tax increment derived from any increase in the assessed value of property within the redevelopment project area (or tax increment). Generally, property tax increment financing involves a local government forming a tax increment financing district to issue bonds and use the bond proceeds to pay project costs within the boundaries of a specified project area. To repay the bonds, the district captures increased property tax revenues that are generated when projects financed by the bonds increase assessed property values within the project area.
To calculate the increased property tax revenues captured by the district, the amount of property tax revenues received by any local government participating in the district is “frozen” at the amount it received from property within a project area prior to the project area’s formation. In future years, as the project area's assessed valuation grows above the frozen base, the resulting additional property tax revenues — the so-called property tax “increment” revenues — flow to the tax increment financing district instead of other local governments. After the bonds have been fully repaid using the incremental property tax revenues, the district is dissolved, ending the diversion of tax increment revenues from participating local governments.
Prior to Proposition 13, very few RDAs existed; however, after its passage, RDAs became a source of funding for a variety of local infrastructure activities. Eventually, RDAs were required to set-aside 20% of funding generated in a project area to increase the supply of low- and moderate-income housing in the project areas. At the time RDAs were dissolved, the Controller estimated that statewide, RDAs were obligated to spend $1 billion on affordable housing. At the time of dissolution, over 400 RDAs statewide were diverting 12% of property taxes, over $5.6 billion yearly.
In 2011, facing a severe budget shortfall, the Governor proposed eliminating RDAs in order to deliver more property taxes to other local agencies. Ultimately, the Legislature approved and the Governor signed two measures, ABX1 26 (Blumenfield), Chapter 5, and ABX1 27 (Blumenfield), Chapter 6, that together dissolved RDAs as they existed at the time and created a voluntary redevelopment program on a smaller scale. In response, the California Redevelopment Association (CRA) and the League of California Cities, along with other parties, filed suit challenging the two measures. The Supreme Court denied the petition for peremptory writ of mandate with respect to ABX1 26. However, the Court did grant CRA's petition with respect to ABX1 27. As a result, all RDAs were required to dissolve as of February 1, 2012.
Attempts to Replace RDAs: After the Supreme Court’s 2011 Matosantos decision dissolved all RDAs, legislators enacted several measures creating new tax increment financing tools to pay for local economic development. The Legislature authorized the creation of Enhanced Infrastructure Financing Districts (EIFDs) (SB 628 (Beall), Chapter 785, Statutes of 2014) quickly followed by Community Revitalization and Investment Authorities (CRIAs) (AB 2 (Alejo), Chapter 319, Statutes of 2015). Similar to EIFDs, CRIAs use tax increment financing to fund infrastructure projects. CRIAs may currently only be formed in economically depressed areas.
The Legislature has also authorized the formation of affordable housing authorities (AHAs), which may use tax increment financing exclusively for rehabilitating and constructing affordable housing and also do not require voter approval to issue bonds (AB 1598 (Mullin), Chapter 764, Statutes of 2017). SB 961 (Allen), Chapter 559, Statutes of 2018, removed the vote requirement for a subset of EIFDs to issue bonds and required these EIFDs to instead solicit public input, and AB 116 (Ting), Chapter 656, Statutes of 2019, removed the voter requirement for any EIFD to issues bonds in favor of a formal protest process. SB 852 (Dodd), Chapter 266, Statutes of 2022, created climate resilience districts (CRDs), which can also utilize tax-increment financing. CRDs were also given the authority to issue general obligation bonds and impose special taxes. While these entities share fundamental similarities with RDAs in terms of using various forms of tax-increment financing, they differ in two significant aspects: 1) not having access to the school’s share of property tax increment, and 2) not automatically including the tax increment of other taxing entities.
Governor’s Office of Planning and Research (OPR) Report: SB 961 (Allen), Chapter 559, Statutes of 2018, required OPR to complete a study by January 1, 2021 and make recommendations on (1) the effectiveness of tax increment financing tools, (2) the relative advantages and disadvantages of different types of tax increment financing tools, and (3) the impacts of extending the Second Neighborhood Infill Finance and Transit Improvement Act (NIFTI-2s) to areas around bus stops, including segregated bus lanes. The first report identified several key limitations current tax increment financing districts share:
- They have limited revenue potential to make district formation worthwhile.
- Unlike redevelopment where taxing entity participation was mandatory, current tax increment financing districts rely on volunteer participation.
- They have limited powers compared to RDAs.
- Some technical challenges interfere with their development.
Affordable Housing Finance Districts: This bill authorizes a city or county to establish an affordable housing financing district by adopting a resolution and enumerates the activities of a district, which include the financing of the development of affordable housing, as defined, and infrastructure to support that housing. This bill establishes the process for the formation of a district, requires the preparation of an affordable housing financing plan, dictates the information that must be included in the plan, establishes the process for adopting the plan, and designates the governing board of a district. This bill allows for the division of property taxes that must be placed in a special fund, and requires a district to file, with the county auditor, a use of tax increment statement and a reconciliation statement that contains specified information. This bill contains provisions for the replacement of dwelling units that are removed or destroyed and requires a district to comply with relocation assistance requirements. This bill allows a district to enter into a contract with CalHFA to remit the property taxes allocated to it and requires CalHFA to transfer the funds to the Trust Fund. This bill requires CalHFA to issue revenue bonds secured by moneys in the Trust Fund and allocate those bond proceeds for use by the district, as specified. This bill is sponsored by the author.
CalHFA: Established in 1975, CalHFA was chartered as the state's affordable housing lender. CalHFA’s Multifamily Lending Division finances affordable rental housing through collaborations with developers, local, state and federal government partners and more. Its Single Family Division partners with a preferred lender network to provide first-time homebuyers with down payment and closing cost assistance and access to first mortgage loans. CalHFA is a self-supported state agency that does not rely on taxpayers dollars for its operational costs but regularly administers various state and federal resources on behalf of the state.
CalHFA has an A+ credit rating and issues bonds to fund its lending programs. This bill would require CalHFA to issue bonds that would be repaid by the tax increment pooled from affordable housing finance districts around the state. Theoretically, the bond market may be more willing to buy these bonds from CalHFA than a local government, because of CalHFA’s excellent credit rating and credibility as the state’s affordable housing lender. Under redevelopment, redevelopment agencies would establish project areas and then wait decades for the property tax base to rise and generate enough taxes to bond against. Property tax is a secure and reliable source of funding to bond against because it is highly consistent.
A New Model: The report conducted by OPR identified several key limitations current tax increment financing districts share, including the limited revenue potential to make district formation worthwhile. In addition, unlike RDAs, where taxing entity participation was mandatory, current tax increment financing districts rely on volunteer participation, and they have limited powers compared to RDAs. The reports found that, despite the multitude of tax increment financing tools available for local agencies to choose from, only five EIFDs had been created by the end of 2020.
Despite the authority to finance infrastructure with tax increment financing, these financing mechanisms have been used infrequently in part because they do not have access to the school share of property tax increment like RDAs did. However, AB 901 would establish a different approach to financing the development of affordable housing and infrastructure related to that affordable housing. Instead of a district issuing its own tax increment financing bonds, this bill would require a district to remit its portion of tax increment to the state to pool funds from more than one district. The stated intent is for these pooled funds to receive a greater return on their investment at a faster rate because the interest gained would be on an amount much greater than an individual district.
The ultimate success of this bill could depend upon the number of districts that are established and the amount of tax increment revenue that is pooled in the state Trust Fund. Tax increment revenue can be slow to grow because it is dependent upon the growth in property tax over a period of time and is limited to the city or county that created the district and other volunteer agencies. Given these inherent limitations of tax increment financing, the Committee may wish to consider if this bill will be more effective than existing tax increment financing tools.
Arguments in Support: According to the San Francisco Bay Area Planning and Urban Research Association (SPUR), “The bill would create the Affordable Housing Tax Increment Pooling Trust in the State Treasurer’s office and allow revenues to be made available more quickly to fund affordable housing by pooling local tax increment financing to service bonds. AB 901 will allow local EIFDs to leverage the state’s credit rating and professional expertise and harness the collective investment of EIFDs from across the state to generate more revenue sooner and have it distributed in proportion to the contribution.”
Arguments in Opposition: Howard Jarvis Taxpayers Association is opposed to this bill because it does not require the voters to approve debt issued by the affordable housing finance district.
Committee Amendments: Redevelopment agencies required 20 percent of tax increment generated by a redevelopment agency to be used to create, rehabilitate, and preserve affordable housing. The intent of this bill is to use any tax increment generated in the district to fund affordable housing and related infrastructure necessary to construct the affordable housing. The committee may wish to consider the following amendments to accomplish that goal:
- Require that 80 percent of the tax increment generated go directly to the construction, acquisition, and preservation of affordable housing and up to 20 percent for infrastructure related to affordable housing.
- Revise the definition of affordable housing to allow the district to use tax increment to finance affordable housing available to households up to 80 percent of AMI for multi-family rental housing and 120 percent of AMI for for-sale housing.
- Define “infrastructure” to include but not be limited to local circulation elements: streets, sidewalks, bike lanes, lighting, curbs and gutters, below ground utilities, and parks.
Related Legislation:
AB 1476 (Alvarez) of the current legislative session would enact the Community Redevelopment Law of 2023. This bill recently passed out of the Assembly Committee on Local Government on a vote of 7-1 and is currently pending before this committee.
AB 1717 (Friedman) of 2019 would have created the Transit-Oriented Affordable Housing Funding Program Act to use tax increment to fund multifamily housing near transit using a similar pooling mechanism as AB 901. AB 1717 was held in the Assembly Appropriations Committee.
Double Referred: This bill is double referred. It was recently heard in the Assembly Committee on Local Government and passed on a vote of 6-1.
REGISTERED SUPPORT / OPPOSITION:
Support
San Francisco Bay Area Planning and Urban Research Association
Opposition
Howard Jarvis Taxpayers Association
Analysis Prepared by: Lisa Engel / H. & C.D. / (916) 319-2085
Date of Hearing: April 19, 2023
ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
Cecilia Aguiar-Curry, Chair
ABPCA Bill Id:AB 901 (
Author:Ting) – As Amended Ver:April 11, 2023
SUBJECT: Affordable housing financing districts.
SUMMARY: Authorizes the creation of affordable housing financing districts (districts). Specifically, this bill:
- Defines the following terms:
- “Affected taxing entity” to mean any governmental taxing agency which levied or had levied on its behalf a property tax on all or a portion of the property located in the proposed district in the fiscal year or before the designation of the district. An “affected taxing entity” does not include a special district unless the special district adopts a resolution approving the affordable housing financing plan, as specified. “Affected taxing entity” does not include a school district of every class or kind, including, but not limited to, a unified or nonunified school district, that maintains kindergarten and grades 1 to 12, inclusive, community college districts, or county office of education.
- “Affected taxing entity equity amount” to mean the amount of ad valorem property tax revenue that the affected taxing entity would have received from property located within the redevelopment project area in the absence of the district, calculated as specified.
- “Affordable housing” to mean owner-occupied housing with an affordable housing cost or rental housing with an affordable rent, as defined, to persons or families whose income does not exceed 60% of the area median income, as specified.
- “Affordable housing financing district” to mean a legally constituted governmental entity separate and distinct from the city or county that established it for the purpose of financing affordable housing and related infrastructure. A district is subject to the Ralph M. Brown Act’s open meeting laws.
- “Agency” to mean the California Housing Finance Agency (CalHFA).
- “Debt” to mean any binding obligation to repay a sum of money, including obligations in the form of bonds, certificates of participation, long-term leases, loans from government agencies, or loans from banks, other financial institutions, private businesses, or individuals.
- “Designated official” to mean the city or county engineer or other appropriate official.
- “Fiscal year” to mean a year beginning on July 1 and ending the following June 30.
- “Governing board” to mean the legislative body of a city or county that establishes a district.
- “Landowner” or “owner of land” to mean any person shown as the owner of land on the last equalized assessment roll or otherwise known to be the owner of the land by the legislative body. The legislative body has no obligation to obtain information as to the ownership of land, and its determination of ownership shall be final and conclusive for the purposes of this bill. A public agency is not a landowner or owner of land for the purposes of this chapter, unless the public agency owns all of the land to be included in the proposed district.
- “Legislative body” to mean the city council of the city or board of supervisors of the county.
- “Project” to mean any undertaking of a district pursuant to this bill.
- “Special district” to mean an agency of the state formed for the performance of governmental or proprietary functions with limited geographical boundaries.
- Authorizes a legislative body of a city or county to propose the establishment of a district. The legislative body of the city or county may institute proceedings for the establishment of a district by adopting a resolution of intention to establish the proposed district. The legislative body shall include all of the following in the resolution of intention:
- State that the legislative body proposes the establishment of a district under the terms of this bill and describe the boundaries of the proposed district, as specified.
- State the type of affordable housing projects and related infrastructure proposed to be financed or assisted by the district.
- State the need for the district and the goals the district proposes to achieve.
- State that incremental property tax revenue from the city or county and all affected taxing entities within the district, if approved by specified resolution, may be used to finance these activities.
- Fix a time and place for a public hearing on the proposal.
- Specifies that upon adoption of a resolution of intention, the legislative body shall act as the governing board of the district.
- Provides that a city or county that created a redevelopment agency (RDA) shall neither initiate the creation of the district, nor participate in the governance or financing of a district, until specified conditions are met.
- Authorizes a city or county to establish more than one district within its jurisdictional boundaries, but the city or county shall not merge existing districts or establish a new district that includes any area within boundaries of another district. However, a city or county may establish districts with adjoining boundaries.
- Allows a district to include any portion of a former redevelopment project area that was previously created, provided that the city or county that created the former RDA has met specified requirements.
- Provides that a district may finance only specified facilities to the extent that the facilities are in addition to those provided in the territory of the district before the district was created. The district shall not finance additional facilities that supplant facilities already available within that territory when the district was created.
- Allows a district to include areas which are not contiguous.
- Requires the legislative body to direct the city or county official, as applicable, selected by the legislative body, to mail a copy of the resolution of intention to create the district to each owner of land within the district.
- Provides that as an alternative to mailing a copy of the resolution of intention pursuant to 9) above, the legislative body may direct the city official or county official, as applicable, selected by the legislative body, to mail a single-page notice of intention to create the district to each owner of land within the district. For purposes of this section, the notice of intention shall indicate the physical location or internet website where documents related to the district, including the resolution of intention, will be made available for public viewing or inspection. The notice of intention shall also state the date of the public hearing on the proposal and include a brief description of the types of public facilities to be financed by the district.
- Requires the legislative body to direct the city official, as applicable, selected by the legislative body, to mail a copy of the resolution to each affected taxing entity.
- Specifies that upon adoption of the resolution of intention to establish the district by the legislative body, the governing board shall designate and direct the city or county engineer or other appropriate official to prepare an affordable housing financing plan.
- Provides that after receipt of a copy of the resolution of intention to establish a district, the designated official shall prepare a proposed affordable housing financing plan. The proposed affordable housing financing plan shall be consistent with the general plan of the city or county within which the district is located and shall include specified information, including a financing section.
- Requires the affordable housing financing plan to be sent to each owner of land within the proposed district and to each affected taxing entity together with any report required by the California Environmental Quality Act (CEQA) that pertains to the proposed affordable housing and related infrastructure projects, and to be made available for public inspection. The report shall also be sent to the governing board, the planning commission, and the legislative body.
- Requires the designated official to consult with each affected taxing entity, and, at the request of any affected taxing entity, shall meet with the representatives of an affected taxing entity. Any affected taxing entity may suggest revisions to the plan.
- Requires the governing board to conduct a public hearing before adopting the proposed affordable housing financing plan. The governing board shall call the public hearing no sooner than 60 days after the plan has been sent to each affected taxing entity. In addition to the notice given to landowners and affected taxing entities, the governing board shall give notice of the public hearing by publication not less than once a week for four successive weeks in a newspaper of general circulation published in the city or county in which the proposed district is located. The notice shall state specified information.
- Provides that at the hour set in the required notices, the governing board shall proceed to hear and pass upon all written and oral objections. The governing board may continue the hearing from time to time. The governing board shall consider recommendations, if any, of affected taxing entities, and all evidence and testimony for and against the adoption of the plan. The governing board may modify the plan.
- Prohibits the governing body from adopting a resolution adopting the affordable housing financing plan providing for the division of taxes of any affected taxing entity unless a resolution approving the plan has been adopted by the governing body of each affected taxing entity that is proposed to be subject to the division of taxes, as specified, has been filed with the governing body at or prior to the time of the hearing.
- Specifies that nothing in 18) above shall be construed to prevent the governing body from amending the affordable housing financing plan without allocation of the tax revenues of any affected taxing entity which has not approved the affordable housing financing plan by resolution of the governing body of the affected taxing entity.
- Provides that at the conclusion of the hearing, the governing board may adopt a resolution adopting the affordable housing financing plan, as modified, and formation of the affordable housing financing district, or it may adopt a resolution abandoning the proceedings. If the proceedings are abandoned, then the governing board shall cease to exist with no further action required of the legislative body and the legislative body shall not enact a resolution of intention to establish a district that includes the same geographic area within one year of the date of the resolution abandoning the proceedings.
- Specifies that the plan shall take effect upon adopting the plan. The plan shall specify how the plan will be funded, as specified.
- Provides that any action or proceeding to attack, review, set aside, void, or annul the creation of a district, adoption of an affordable housing financing plan, including a division of taxes thereunder, shall be commenced within 30 days after the enactment of the resolution creating the district. An action or proceeding with respect to a division of taxes may be brought pursuant to existing validation laws.
- Requires the legislative body of the county or city that establishes the district to serve as the governing board of the district.
- Provides that the board shall not receive compensation, but may receive reimbursement for actual and necessary expenses incurred in the performance of official duties, members of the governing board are subject to ethics training requirements, and the board shall be a local public agency subject to the Ralph M. Brown Act, California Public Records Act and the Political Reform Act of 1974.
- Limits the activities of a district to financing the development of affordable housing and housing-related infrastructure within its territorial boundaries. In connection with the development of affordable housing and related infrastructure, the district may finance the following:
- The purchase, construction, expansion, improvement, seismic retrofit, or rehabilitation of any real or other tangible property with an estimated life of 15 years or longer.
- The planning and design work that is directly related to the purchase, construction, expansion, or rehabilitation of affordable housing.
- Water, sewer, or other public infrastructure necessary to support the development of affordable housing, and other costs as specified.
- The ongoing or capitalized costs to maintain public capital facilities in whole or in part by the district.
- Provides that a district may not do either of the following in connection with the development of affordable housing and related infrastructure:
- Finance services of any kind.
- Use the proceeds of bonds issued to finance the costs of maintenance or ongoing operations of any kind.
- Specifies that the affordable housing and housing-related infrastructure financed by the district are not required to be physically located within the boundaries of the district. However, any affordable housing and housing-related infrastructure financed outside of a district shall have a tangible connection to the work of the district, as detailed in the plan.
- Provides that the district shall require, by recorded covenants or restrictions, that housing units built, as specified, shall remain affordable housing for the longest feasible time, but not less than 55 years for rental units and 45 years for owner-occupied units.
- Specifies that the district may finance mixed-income housing developments, but may finance only those units in such a development that constitute affordable housing, as specified, and those onsite facilities for childcare, after school care, and social services that are integrally linked to the tenants of those affordable housing units.
- Authorizes a district to use powers under specified acts related to hazardous waste mitigation and finance any action necessary to implement those acts, as specified.
- Prohibits a district from incurring debt in the form of bonds secured by specified revenues.
- Authorizes a district to reimburse a developer of a project that is located entirely within the boundaries of that district for any permit expenses incurred and to offset additional expenses incurred by the developer in constructing affordable housing units pursuant to the Transit Priority Project Program, as specified.
- Contains provisions related to the removal or destruction of dwelling units, the requirements the district must follow when dwelling units are removed or destroyed, and the requirements the district must follow related to relocation assistance, as specified.
- Requires the district, no more than six months after the end of the district’s fiscal year, to file a report with the governing board and the Department of Housing and Community Development (HCD) containing specified information.
- Provides that a plan may contain a provision that taxes, if any, levied upon taxable property in the area included within the district each year by or for the benefit of the State of California, or any affected taxing entity after the effective date of the adoption of the resolution to create the district shall be divided as follows:
- That portion of the taxes that would be produced by the rate upon which the tax is levied each year by or for each of the affected taxing entities upon the total sum of the assessed value of the taxable property in the district as shown upon the assessment roll used in connection with the taxation of the property by the affected taxing entity, last equalized before the effective date of the resolution to create the district, shall be allocated to, and when collected shall be paid to, the respective affected taxing entities as taxes by or for the affected taxing entities on all other property are paid.
- That portion of the levied taxes each year in excess of the amount specified in a) above, shall be allocated to, and when collected shall be paid into a special fund of, the district for all lawful purposes of the district. Unless and until the total assessed valuation of the taxable property in a district exceeds the total assessed value of the taxable property in the district as shown by the last equalized assessment roll referred to in a) above, all of the taxes levied and collected upon the taxable property in the district shall be paid to the respective affected taxing entities. When the district ceases to exist pursuant to the adopted affordable housing financing plan, all moneys thereafter received from taxes upon the taxable property in the district shall be paid to the respective affected taxing entities as taxes on all other property are paid.
- That portion of the taxes that would be produced by the rate upon which the tax is levied each year by or for each of the affected taxing entities upon the total sum of the assessed value of the taxable property in the district as shown upon the assessment roll used in connection with the taxation of the property by the affected taxing entity, last equalized before the effective date of the resolution to create the district, shall be allocated to, and when collected shall be paid to, the respective affected taxing entities as taxes by or for the affected taxing entities on all other property are paid.
- Notwithstanding subdivision 35) above, where any district boundaries overlap with the boundaries of any former redevelopment project area, any debt or obligation of a district shall be subordinate to any and all enforceable obligations of the former RDA, as approved by the Oversight Board and the Department of Finance (DOF). The division of taxes allocated to the district pursuant to 35) above, shall not include any taxes required to be deposited by the county auditor-controller into the Redevelopment Property Tax Trust Fund (RPTTF), as specified.
- Allows the legislative body of the city or county forming the district to choose to dedicate any portion of its net available revenue to the district through the plan, and defines “net available revenue” for its purposes.
- Requires that portion of any ad valorem property tax revenue annually allocated to a city or county pursuant to existing law related to the Educational Revenue Augmentation Fund (ERAF) that is specified in the adopted plan for the city or county that corresponds to the increase in the assessed valuation of taxable property, to be allocated to, and when collected to be apportioned to, a special fund of the district for all lawful purposes of the district. When the district ceases to exist, these specified revenues shall be allocated to, and when collected, shall be apportioned to, the respective city or county.
- Authorizes a district to utilize revenues from any of the following sources to support its activities provided that the applicable voter approval has been obtained, and the plan has been approved: the Improvement Act of 1911; the Municipal Improvement Act of 1913; the Improvement Bond Act of 1915; the Landscaping and Lighting Act of 1972; the Vehicle Parking District Law of 1943; the Parking District Law of 1951; the Park and Playground Act of 1909; the Mello-Roos Community Facilities Act of 1982; the Benefit Assessment Act of 1982; and, the so-called facilities benefit assessment levied by the charter city of San Diego or any substantially similar assessment levied for the same purpose by any other charter city pursuant to any ordinance or charter provision.
- Requires the portion of specified taxes to be allocated and paid into a special fund held in trust for the district by the county auditor or officer responsible for the payment of taxes into the funds of the affected taxing entities, as specified.
- Requires, not later than October 1 of each year, for each affordable housing or housing-related infrastructure project for which the plan provides for the division of taxes, the district to file, with the county auditor or other specified officer, a use of tax increment statement and a reconciliation statement. Specifies the information that must be included in each statement. All statements required to be filed shall be certified by the chief financial officer of the district.
- Requires the district to pay all costs incurred by a county in connection with the division of taxes, as specified.
- Authorizes a district to enter into a contract with CalHFA that shall include, at a minimum, the following provisions:
- No later than December 31 of each year for which the contract is in effect, the district will remit the entirety of the amount of specified taxes allocated to it to CalHFA. The contract may provide for either a one-time lump sum or a periodic remission of funds.
- Upon receipt of moneys remitted pursuant to a) above, CalHFA shall transfer the full amount to the custody of the treasurer for deposit in the Affordable Housing Tax Increment Pooling Trust Fund (Trust Fund), as specified.
- The contract is subject to annual renewal, as follows:
- If the governing body adopts a resolution to terminate the contract, CalHFA shall make a final allocation to the district from the Trust Fund, as specified, after which the district shall have no claim to any moneys in the Trust Fund.
- If the governing body does not take any action by December 31 of any year for which the contract is entered into or renewed, as specified, the contract shall be deemed to be renewed for the following year.
- CalHFA shall issue revenue bonds secured by moneys remitted to the Trust Fund, as specified.
- No later than January 31 of each year following any year in which the contract is in effect, CalHFA shall allocate an amount from the Trust Fund to the district in proportion to the amount of moneys the district remitted that year, as specified.
- Moneys remitted to CalHFA and deposited in the Trust Fund are property of the district that remitted the moneys and are not state moneys.
- Any other provisions consistent with the agreement made between the district and CalHFA.
- Requires the district to expend the moneys allocated to it under a contract entered into with CalHFA, as specified.
- Establishes, in the State Treasury, the Affordable Housing Financing Fund (fund).
- Establishes, in the State Treasury, the Trust Fund. Moneys in the Trust Fund are hereby continuously appropriated to CalHFA for allocation to districts, as specified. Provides the requirements for the allocation of moneys, the issuance and sale of revenue bonds by CalHFA, and other specified requirements on CalHFA and the Treasurer.
- Provides that any action or proceeding challenging the validity of revenue bonds or refunding bonds issued shall be brought in accordance with, and within the time specified in, validating procedures in existing law.
- Establishes, in the fund, the Tax Increment Pool Loss Reserve Account. CalHFA shall allocate money from the Trust Fund to the loss reserve account, as specified.
- Requires CalHFA to notify the Joint Legislative Budget Committee if, in any fiscal year, CalHFA determines that there are insufficient moneys in the Trust Fund to pay debt service on issued revenue bonds for that fiscal year.
- Specifies that upon appropriation in the annual Budget Act, the Controller shall transfer moneys from the loss reserve account to the Trust Fund for the sole purpose of paying debt service on revenue bonds issued for any fiscal year for which CalHFA notifies the Joint Legislative Audit Committee, as specified, in an amount necessary to pay debt service for that fiscal year.
- Provides that all money in the Trust Fund shall be held in trust in the custody of the Treasurer.
- Specifies that all money in the Trust Fund is nonstate money. That money shall be held in a trust account or accounts. The Controller shall be responsible for maintaining those accounts to record the Treasurer’s accountability, and shall maintain a separate account for each trust deposit in the Trust Fund.
- Provides that moneys in the Trust Fund shall be subject to audit by DOF and to cash count, as specified. It may be withdrawn only upon order of the depositing entity or its disbursing officers. The system that the Director of Finance has established for the handling, receiving, holding, and disbursing of state agency money shall also be used for the money in the Trust Fund.
- Makes numerous technical and conforming changes.
- States that no reimbursement is required by this act because a local agency or school district has the authority to levy service charges, fees, or assessments sufficient to pay for the program level of service mandated by this act.
FISCAL EFFECT: This bill is keyed fiscal and contains a state-mandated local program.
COMMENTS:
- Bill Summary. This bill authorizes a city or county to establish an affordable housing financing district by adopting a resolution and enumerates the activities of a district, which include the financing of the development of affordable housing, as defined, and infrastructure to support that housing. This bill establishes the process for the formation of a district, requires the preparation of an affordable housing financing plan, dictates the information that must be included in the plan, establishes the process for adopting the plan, and designates the governing board of a district. This bill allows for the division of property taxes that must be placed in a special fund, and requires a district to file, with the county auditor, a use of tax increment statement and a reconciliation statement that contains specified information. This bill contains provisions for the replacement of dwelling units that are removed or destroyed and requires a district to comply with relocation assistance requirements. This bill allows a district to enter into a contract with CalHFA to remit the property taxes allocated to it and requires CalHFA to transfer he funds to the Trust Fund. This bill requires CalHFA to issue revenue bonds secured by moneys in the Trust Fund and allocate those bond proceeds for use by the district, as specified. This bill is sponsored by the author.
- Author’s Statement. According to the author, “California has an affordable housing crisis and over the last several years, the State has made historic investments to address homelessness and promote affordable housing creation. However, California needs a continuous funding stream for affordable housing. AB 901 creates a partnership between local agencies and the State to fund affordable housing construction. The bill encourages local governments to create affordable housing financing districts, collect the tax increment from these districts, and pool the funds collected at the state level to acquire bonds. By pooling these dollars, districts receive greater returns on their investment at much faster rates. AB 901 creates a powerful tool for local agencies to fund affordable housing construction.”
- Redevelopment. Article XVI, Section 16 of the California Constitution authorizes the Legislature to provide for the formation of RDAs to eliminate blight in an area by means of a self-financing schedule that pays for the redevelopment project with tax increment derived from any increase in the assessed value of property within the redevelopment project area (or tax increment). Generally, property tax increment financing involves a local government forming a tax increment financing district to issue bonds and use the bond proceeds to pay project costs within the boundaries of a specified project area. To repay the bonds, the district captures increased property tax revenues that are generated when projects financed by the bonds increase assessed property values within the project area.
To calculate the increased property tax revenues captured by the district, the amount of property tax revenues received by any local government participating in the district is “frozen” at the amount it received from property within a project area prior to the project area’s formation. In future years, as the project area's assessed valuation grows above the frozen base, the resulting additional property tax revenues — the so-called property tax “increment” revenues — flow to the tax increment financing district instead of other local governments. After the bonds have been fully repaid using the incremental property tax revenues, the district is dissolved, ending the diversion of tax increment revenues from participating local governments.
Prior to Proposition 13, very few RDAs existed; however, after its passage, RDAs became a source of funding for a variety of local infrastructure activities. Eventually, RDAs were required to set-aside 20% of funding generated in a project area to increase the supply of low and moderate income housing in the project areas. At the time RDAs were dissolved, the Controller estimated that statewide, RDAs were obligated to spend $1 billion on affordable housing. At the time of dissolution, over 400 RDAs statewide were diverting 12% of property taxes, over $5.6 billion yearly.
In 2011, facing a severe budget shortfall, the Governor proposed eliminating RDAs in order to deliver more property taxes to other local agencies. Ultimately, the Legislature approved and the Governor signed two measures, ABX1 26 (Blumenfield), Chapter 5 and ABX1 27 (Blumenfield), Chapter 6 that together dissolved RDAs as they existed at the time and created a voluntary redevelopment program on a smaller scale. In response, the California Redevelopment Association (CRA) and the League of California Cities, along with other parties, filed suit challenging the two measures. The Supreme Court denied the petition for peremptory writ of mandate with respect to ABX1 26. However, the Court did grant CRA's petition with respect to ABX1 27. As a result, all RDAs were required to dissolve as of February 1, 2012.
- Attempts to Replace RDAs. After the Supreme Court’s 2011 Matosantos decision dissolved all RDAs, legislators enacted several measures creating new tax increment financing tools to pay for local economic development. The Legislature authorized the creation of Enhanced Infrastructure Financing Districts (EIFDs) [SB 628 (Beall), Chapter 785, Statutes of 2014] quickly followed by Community Revitalization and Investment Authorities (CRIAs) [AB 2 (Alejo), Chapter 319, Statutes of 2015]. Similar to EIFDs, CRIAs use tax increment financing to fund infrastructure projects. CRIAs may currently only be formed in economically depressed areas.
The Legislature has also authorized the formation of affordable housing authorities (AHAs), which may use tax increment financing exclusively for rehabilitating and constructing affordable housing and also do not require voter approval to issue bonds [AB 1598 (Mullin), Chapter 764, Statutes of 2017]. SB 961 (Allen), Chapter 559, Statutes of 2018, removed the vote requirement for a subset of EIFDs to issue bonds and required these EIFDs to instead solicit public input, and AB 116 (Ting), Chapter 656, Statutes of 2019, removed the voter requirement for any EIFD to issues bonds in favor of a formal protest process. SB 852 (Dodd), Chapter 266, Statutes of 2022, created climate resilience districts (CRDs), which can also utilize tax-increment financing. CRDs were also given the authority to issue general obligation bonds and impose special taxes. While these entities share fundamental similarities with RDAs in terms of using various forms of tax-increment financing, they differ in two significant aspects, 1) not having access to the school’s share of property tax increment, and 2) not automatically including the tax increment of other taxing entities.
- Governor’s Office of Planning and Research (OPR) Report. SB 961 (Allen), Chapter 559, Statutes of 2018, required OPR to, on or before January 1, 2021, complete a study and make recommendations on (1) the effectiveness of tax increment financing tools, (2) the relative advantages and disadvantages of different types of tax increment financing tools, and (3) the impacts of extending the Second Neighborhood Infill Finance and Transit Improvement Act (NIFTI-2s) to areas around bus stops, including segregated bus lanes. The first report identified several key limitations current tax increment financing districts share:
- They have limited revenue potential to make district formation worthwhile.
- Unlike redevelopment where taxing entity participation was mandatory, current tax increment financing districts rely on volunteer participation.
- They have limited powers compared to RDAs.
- Some technical challenges interfere with their development.
- California Housing Financing Agency. According to CalHFA, it has supported the needs of low- and moderate-income renters and homebuyers by providing financing and programs with a focus on equity for more than 45 years. Established in 1975, CalHFA was chartered as the state's affordable housing lender. CalHFA’s Multifamily Lending Division finances affordable rental housing through collaborations with developers, local, state and federal government partners and more. Its Single Family Division partners with a preferred lender network to provide first-time homebuyers with down payment and closing cost assistance and access to first mortgage loans. CalHFA is a self-supported state agency that does not rely on taxpayers dollars for its operational costs but regularly administers various state and federal resources on behalf of the state.
- Policy Consideration. The report conducted by OPR identified several key limitations current tax increment financing districts share, including the limited revenue potential to make district formation worthwhile. In addition, unlike RDAs, where taxing entity participation was mandatory, current tax increment financing districts rely on volunteer participation, and they have limited powers compared to RDAs. The reports found that, despite the multitude of tax increment financing tools available for local agencies to choose from, only five EIFDs had been created by the end of 2020.
Despite the authority to finance infrastructure with tax increment financing, these financing mechanisms have been used infrequently in part because they do not have access to the school share of property tax increment like RDAs did. However, AB 901 would establish a different approach to financing the development of affordable housing and infrastructure related to that affordable housing. Instead of a district issuing its own tax increment financing bonds, this bill would require a district to remit its portion of tax increment to the state to pool funds from more than one district. The stated intent is for these pooled funds to receive a greater return on their investment at a faster rate because the interest gained would be on an amount much greater than an individual district.
The ultimate success of this bill could depend upon the number of districts that are established and the amount of tax increment revenue that is pooled in the state Trust Fund. Tax increment revenue can be slow to grow because it is dependent upon the growth in property tax over a period of time and is limited to the city or county that created the district and other volunteer agencies. Given these inherent limitations of tax increment financing, the Committee may wish to consider if this bill will be more effective than existing tax increment financing tools.
- Previous Legislation. AB 1717 (Friedman) of 2019 would have created the Transit-Oriented Affordable Housing Funding Program Act to use tax increment to fund multifamily housing near transit using a similar pooling mechanism as AB 901. AB 1717 was held in the Assembly Appropriations Committee.
- Arguments in Support. According to the San Francisco Bay Area Planning and Urban Research Association (SPUR), “Having worked on several Enhanced Infrastructure Financing District (EIFD) tools in the years following the dissolution of redevelopment agencies in 2011, I concur that this approach could be a more cost effective and efficient way to issue bonds and finance affordable housing according to a locally adopted plan.
“The bill would create the Affordable Housing Tax Increment Pooling Trust in the State Treasurer’s office and allow revenues to be made available more quickly to fund affordable housing by pooling local tax increment financing to service bonds. AB 901 will allow local EIFDs to leverage the state’s credit rating and professional expertise and harness the collective investment of EIFDs from across the state to generate more revenue sooner and have it distributed in proportion to the contribution.”
- Arguments in Opposition. None on file.
- Double-Referral. This bill is double-referred to the Assembly Committee on Housing and Community Development.
REGISTERED SUPPORT / OPPOSITION:
Support
SPUR
Opposition
None on file
Analysis Prepared by: Jimmy MacDonald / L. GOV. / (916) 319-3958
Discussed in Hearing
2MIN
Assembly Standing Committee on Housing and Community Development
10MIN
Assembly Standing Committee on Local Government
Bill Author
Bill Co-Author(s):