SAN FRANCISCO — California Gov. Jerry Brown has signed legislation that will give local governments a new and improved financing tool to help them replace the state's defunct redevelopment agencies.
If the legislation works as intended, it could spur new bond financing that could fill the issuance void left by the end of redevelopment.
The bill signings follow years of discussion among lawmakers, local officials and the Brown administration about seeking ways to raise capital for infrastructure investments after redevelopment agencies were dissolved in early 2012.
On Monday the governor signed into law Senate Bill 628, introduced by Senator Jim Beall, D-Campbell, which will amend the state's current Infrastructure Finance District law.
The law has required a two-thirds public vote both to form a district and issue debt-a threshold that has been criticized for being too strict, making it difficult for local governments to create IFDs.
SB 628 will remove any voter approval requirement to form a new IFD, but still includes a 55% voter approval requirement to authorize bonds.
In addition, the bill expands the purpose of IFDs and renames them Enhanced Infrastructure Financing Districts.
"The bill establishes EIFDs to provide a flexible tool for local governments to address needed economic development, affordable housing, sustainable development, environmental mitigation, and other needs in a fiscally responsible manner," said Assemblyman Roger Dickinson, D-Sacramento, a principal co-author of the bill.
The bill is in part a replacement for the authority local governments could once exercise through redevelopment.
Under the IFD law, cities and counties can create districts to divert incremental property tax growth in a district to finance projects such as highways, transit, and water and sewer systems.
Incremental property tax growth can be used to back bond debt, as tax allocation bonds were used by the now-dissolved redevelopment agencies.
SB 628 closely mirrors Brown's own Enhanced Infrastructure Financing District proposal, which was introduced in his 2015 state budget proposal in January.
In addition to SB 628, Brown also signed a few other redevelopment bills, including Assembly Bill 229, AB 2292, and SB 614.
AB 229, introduced by former Assembly Speaker John Perez, D-Los Angeles, authorizes a city or county to form an IFD to finance projects on a former military base and dedicate any portion of its funds from the RDA Property Tax Trust Fund to the district.
AB 2292, by Assemblymember Rob Bonta, D-Oakland, allows local communities to use IFDs to create communitywide broadband projects. SB 614, by Sen. Lois Wolk, D-Davis, allows a local agency, until Jan. 1 2025, to use tax increment financing in a new or reorganized district to fund infrastructure improvements in disadvantaged unincorporated communities.
