Gov. Brown Signs California IFD Law

LOS ANGELES - California Gov. Jerry Brown signed a bill Feb. 18 that allows infrastructure financing districts to be created in former redevelopment project areas.

Brown signed Assembly Bill 471, which was introduced by Assembly Majority Leader Toni Atkins, D-San Diego and approved by the Legislature earlier this month.

The bill replaces a law that prohibited an IFD from including any portion of a redevelopment project area. The law was meant to avoid overlap between the two types of districts, but the state's 400 plus RDAs were eliminated by the Legislature in 2012, making the provision irrelevant.

Sponsored by the Assembly Redevelopment Working Group, which Atkins chairs, the bill's provisions address issues brought to the attention of legislators by successor agencies—local entities charged with implementing the dissolution of redevelopment agencies.

"AB 471 removes impractical and unrealistic barriers to the completion of valuable and appropriate projects that were in the pipeline when redevelopment was eliminated," Atkins said in a statement.

AB 471 allows an IFD to include a former RDA that has completed the dissolution process. It also allows reimbursement of administration costs for housing authorities that have taken over the housing duties of former RDAs, the use of proceeds from bonds tied to an approval project, and retention of cash on hand by successor agencies when required by a development agreement.

The bill is substantially the same as AB 662, which was pushed by Atkins in 2013, but vetoed by Brown because it permitted certain amendments to project contracts. That provision was removed from the new bill.

Brown has previously vetoed other bills relating to redevelopment in California, saying it would be "premature" to return to economic development financing before finishing the job of unwinding redevelopment.

However, earlier this year he gave a sign that he may be ready to start looking to revive local development financing. In his proposed budget for fiscal 2015 Brown includes a plan to revise the existing IFD law to make it more usable for local governments, largely by lowering the existing two-thirds voter approval requirement to create such a district to 55%.

Brown is scheduled to release a revised budget proposal in May.