Transcript BBK Redevelopment Legislation

Redevelopment Legislation
Infrastructure Financing Districts
California State Association of County Auditors
Property Tax Managers’ Sub-committee
Thursday, February 5, 2015 Ontario, CA
PRESENTED BY
Elizabeth W. Hull
Partner
©2014 Best Best & Krieger LLP
Background
• January 2011 – Governor announced plan to
dissolve redevelopment agencies.
• Assembly Bill 1X 26 and Assembly Bill 1X 27
become law on June 20, 2011
• AB 1X 26 – froze redevelopment activities,
eliminated redevelopment agencies, created
successor agencies and oversight boards to
facilitate wind down of redevelopment
agencies
• AB 1X 27 – allowed redevelopment agencies to
continue provided a remittance payment was
made
• CRA challenged AB 1X 26 and AB 1X 27
• Supreme Court upheld AB 1X 26 and
invalidated AB 1X 27 in December 2011
• RDAs dissolved effective February 1, 2012
• AB 1484 became law June 2012 and attempted
to clarify dissolution process
Where are we today?
• City economic development authority based in
police power
• Minimal economic development accomplished
by cities during the wind down process
• Successor agencies LRPMP are being approved
and land is becoming available for
development
• Little ability to fund economic development
2014 Legislation
• AB 628 (Beall) – Enhanced Infrastructure
Financing Districts
• AB 229 (Perez) – Infrastructure and
Revitalization Financing Districts
• AB 2292 (Bonta) – Infrastructure Financing
Districts - Broadband
AB 628
EIFDs
• Streamlined process and fund broader array of
projects
• Before creating an EIFD, the City must have
received a finding of completion
• City takes lead in forming EIFD
• City can partner with any affected taxing entity
(except school related agencies)
• Partner agencies may allocate tax increment to
infrastructure financing plan
EIFDs v. IFDs
• Voter approval
 IFD: 2/3rds approval for formation and bond
issuance
 EIFD: formed without voter approval; issue bonds
with 55% voter approval
• Financing Period
 IFD: 30 years from date of formation
 EIFD: 45 years from date of bonds are authorized
• Significantly increase tax revenue available
EIFDs v. IFDs
• Reimbursement Agreements
 Both EIFD and IFD can enter into reimbursement
agreements with developers as alternative to
conventional or bond financing
• Types of Projects
 IFD: limited infrastructure projects
 EIFD: broader list of eligible projects
• Projects of communitywide significance (EIFD and
surrounding area), brownfield restoration, housing,
industrial structures for private use
EIFDs v. IFDs
• Polanco Act
 IFDs lacked Polanco authority
 EIFDs may utilize Polanco authority
• Previously reserved to RDAs
• Cross Boundary Cooperation
 Cities may form multiple EIFDs and partner with
other cities to form EIFDs across city and county
lines
AB 229
• Traditional IFD
• Finance projects on former military bases
• Dedicate any portion of its funds from the
Redevelopment Agency Property Tax Trust
Fund to the district
• Finance projects in former RDA areas.
AB 2292
• Expands the definition of public capital facilities to
specifically include broadband and any
communications network facilities that enable
high-speed Internet access
• Effectively authorizes cities to create IFDs that can
issue bonds to pay for public capital facilities or
projects for broadband
• Before AB 2292, city-wide fiber optic networks
could qualify for IFD financing in some cases, even
though it was not specifically included in the
definition of eligible projects for communitywide
infrastructure.
AB 2280
Vetoed by Governor
• Authorized formation of Community
Revitalization and Investment Authorities
• Utilized tax increment revenue to:
 Relieve unemployment
 Reduce high crime rates
 Repair deteriorated/inadequate infrastructure
 Promote affordable housing
 Improve conditions leading to increased
employment opportunities
AB 2280
• Authority cannot be formed until:
 Finding of completion received
 No former RDA assets can be used until
outstanding litigation with DOF resolved
 SCO orders re return of properties has been
complied with
• Vetoed by Governor
 “unnecessarily vests this new program in
redevelopment law”
2015 Legislation
• Governor’s budget proposal
• AB 204 – Oversight Boards in LA County
AB 204
• Existing Law:
 July 1, 2016 all OB’s in each county consolidated
into one OB.
• Concerns:
 Currently 71 OB’s operating in LA County
 One OB in LA County will be overburdened
 One OB in LA County will slow dissolution process
 One OB in LA County will be impediment to
disposition of property
AB 204
• All OB’s in LA County continue after July 1,
2016
• All OB’s in LA County continue to operate
independently until its successor agency
adopts a resolution dissolving the OB
Thank you for attending.
Elizabeth W. Hull
Partner
Best Best & Krieger LLP
Phone: 949-263-2608
Email: [email protected]
www.bbklaw.com