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AB-294 Local-State Joint Investment Partnership Pilot Program.(2013-2014)

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AB294:v96#DOCUMENT

Amended  IN  Assembly  May 06, 2013
Amended  IN  Assembly  April 23, 2013
Amended  IN  Assembly  April 08, 2013

CALIFORNIA LEGISLATURE— 2013–2014 REGULAR SESSION

Assembly Bill
No. 294


Introduced by Assembly Member Holden

February 11, 2013


An act to add and repeal Article 5.5 (commencing with Section 63047.55) of Chapter 2 of Division 1 of Title 6.7 of the Government Code, relating to local government.


LEGISLATIVE COUNSEL'S DIGEST


AB 294, as amended, Holden. Local-State Joint Investment Partnership Pilot Program.
The Bergeson-Peace Infrastructure and Economic Development Bank Act establishes the Infrastructure and Economic Development Bank within the Governor’s Office of Business and Economic Development. The bank is authorized to, among other things, issue bonds, approve the issuance of certain bonds, invest moneys, and make loans, as specified.
This bill would, until January 1, 2020, establish a pilot program whereby certain local government entities, upon the approval and oversight of the bank, are authorized to reallocate their annual payments of property tax revenue directed to the Educational Revenue Augmentation Fund to instead finance certain kinds of public works that further state policy, as specified. This bill would require each local government entity operating a project under the pilot program and the bank to submit annual reports, as specified, on the results of the pilot program.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 The Legislature finds and declares that the purpose of this act is to create a pilot program whereby certain local government entities, upon the approval and oversight of the Infrastructure and Economic Development Bank, are authorized to reallocate their payments of property tax revenue directed to the Educational Revenue Augmentation Fund to instead finance certain kinds of public works.

SEC. 2.

 Article 5.5 (commencing with Section 63047.55) is added to Chapter 2 of Division 1 of Title 6.7 of the Government Code, to read:
Article  5.5. Local-State Joint Investment Partnership Pilot Program

63047.55.
 There is in state government the Local-State Joint Investment Partnership Pilot Program.

63047.60.
 Only a local government entity, including, but not limited to, an infrastructure financing district established pursuant to Chapter 2.8 (commencing with Section 53395) of Part 1 of Division 2 of Title 5 or any special district, but excluding a city, county, or city and county, may file an application for financing a public works project with, and for approval by, the bank pursuant to the program.

63047.65.
 Only the following public works that further state policy objectives shall be financed under the program:
(a) “City streets,” “county highways,” and “state highways,” as those terms are used in paragraphs (1), (2), and (15), respectively, of subdivision (q) of Section 63010.
(b) “Sewage collection and treatment,” as that term is used in paragraph (10) of subdivision (q) of Section 63010.
(c) “Water treatment and distribution,” as that term is used in paragraph (12) of subdivision (q) of Section 63010.
(d) Facilities for the collection and treatment of water for urban uses.
(e) “Drainage, water supply, and flood control,” as that term is used in paragraph (3) of subdivision (q) of Section 63010.
(f) “Educational facilities,” as that term is used in paragraph (4) of subdivision (q) of Section 63010.
(g) “Parks and recreational facilities,” as that term is used in paragraph (6) of subdivision (q) of Section 63010.
(h) “Solid waste collection and disposal,” as that term is used in paragraph (11) of subdivision (q) of Section 63010.
(i) “Public transit,” as that term is used in paragraph (9) of subdivision (q) of Section 63010.
(j) “Power and communications,” as that term is used in paragraph (8) of subdivision (q) of Section 63010.
(k) (1) Brownfield cleanup that promotes infill housing development and other related infill development consistent with regional and local plans.
(2) For purposes of this subdivision, “brownfield” has the same meaning as in paragraph (2) of subdivision (a) of Section 25395.20 of the Health and Safety Code.
(l) “Economic development facilities” as that term is used in subdivision (g) of Section 63010.
(m) Development of affordable housing.

63047.70.
 (a) An application for financing approval filed with the bank pursuant to the program shall include all of the following information in a manner prescribed by the bank:
(1) An economic analysis of the project that includes a determination that the development to be financed would result in an amount of revenue to the General Fund with a net present value that is greater than the net present value of the amount of property tax increment revenues that would be diverted from the Educational Augmentation Revenue Revenue Augmentation Fund over a 35-year period, taking into consideration all pertinent data.
(2) A description of how the project will further local and statewide policy objectives.
(3) A description of all local resources available to invest in the project and an analysis of the reduced scope or feasibility of the project based on the investment of only those local resources.
(4) A statement of the availability of matching funds from the applicant local government entity. The application shall not request funding greater than required to complete the project.
(5) The annual amount of property taxes otherwise allocated to the Educational Augmentation Revenue Revenue Augmentation Fund, from the tax rate areas within the territorial jurisdiction of the applicant, that the applicant proposes to reallocate to finance the project, and whether the applicant proposes to issue debt to fund the project.
(6) A demonstration, to a reasonable probability, that the project would result in an amount of tax revenue to the state General Fund with a net present value that is greater than the net present value of the amount of property tax increment revenues that would be reallocated from the Educational Revenue Augmentation Fund over the term of the project, taking into consideration all pertinent data.
(b) The bank may circulate an application for financing to other state agencies, including, but not limited to, the Department of Finance, the Department of Housing and Community Development, and the Office of Planning and Research.
(c) The bank may establish a process for the public to comment on an application for financing.
(d) The legislative body of the applicant shall reimburse the bank for the reasonable cost of the bank’s review of its application for financing.
(e) For purposes of this article, “public works project” means the entire plan for developing the public works specified in Section 63047.65, within a specified geographical area, as set forth by the applicant.

63047.75.
 (a) On and after January 1, 2015, the bank may approve up to a maximum of 15 applications for financing pursuant to the program or a total of fifty million dollars ($50,000,000) in allocations for all approved projects, whichever comes first.
(b) The bank shall not approve an application for financing unless it determines that approving a public works project proposed in an application is necessary either to make the project financially feasible or to significantly enhance the scope and potential benefits of the project.
(c) In reviewing the economic analysis in an application for financing, the bank shall consider the increase in state General Fund tax revenues that would occur because of the proposed economic activity. The bank shall not approve an application unless the bank determines that the development to be financed would result in an amount of revenue to the General Fund with a net present value that is greater than the net present value of the amount of property tax increment revenues that would be diverted from the Educational Augmentation Revenue Revenue Augmentation Fund over a 35-year period, taking into consideration all pertinent data.
(d) In making its decision to approve an application for financing, the bank may give weight to any established state policy objective or benefit identified by a state agency reviewing the application.
(e) The bank shall only approve a level of financing that reallocates tax revenue that would otherwise be allocated to the Educational Revenue Augmentation Fund from the tax rate areas within the territorial jurisdiction of the applicant, for which the bank has received verification from the county auditor that the level of financing approved by the bank would not prevent the county auditor from making all distributions to cities, counties, and special districts from the Educational Revenue Augmentation Fund as required by law. The local government agency shall only receive its share of the Educational Augmentation Revenue Revenue Augmentation Fund funds for projects approved pursuant to the program.
(f) The bank may approve an amount less than the amount requested by the applicant. The bank shall not approve an application unless it finds that the local government will be able to provide matching funds in an amount equal to the approved funding.

63047.80.
 (a) To approve an application for financing under the program, the bank shall issue a written statement that establishes, but is not limited to, the total amount of tax revenue that would have been directed to the Educational Revenue Augmentation Fund that is reallocated to finance specific public works projects proposed in the application, the amount of each affected taxing agency’s entity’s payment to the Educational Revenue Augmentation Fund that is being reallocated, and the duration of those reallocations. The written statement shall include a statement that the maximum amount that may be diverted from the Educational Augmentation Revenue Revenue Augmentation Fund shall not exceed the total amount of the Educational Augmentation Revenue Revenue Augmentation Fund contributions by each local agency participating in an infrastructure financing district, or in the case of a special district, that special district’s the Educational Augmentation Revenue Revenue Augmentation Fund share. The statement shall additionally specify that the Educational Augmentation Revenue Revenue Augmentation Fund reallocations pursuant to the program shall only be used for projects of the applicant that are approved projects pursuant to this program. The bank shall transmit the statement to the county tax collector or the official responsible for the allocation of property tax revenues within the county.
(b) Upon receiving the bank’s written statement described in subdivision (a), the county tax collector or the official responsible for the allocation of tax revenues within the county shall direct the tax revenues as prescribed in the bank’s statement.

63047.83.
 Upon approval by the bank, the local government entity may issue bonds, including, but not limited to, general obligation bonds, against the Educational Augmentation Revenue Revenue Augmentation Fund funds, the proceeds of which shall only be used for a project approved pursuant to this program.

63047.85.
 (a) On or before December 31, 2016, and annually thereafter, each applicant that has received financing pursuant to the program for any fiscal year shall provide a report to the bank that includes all of the following information for that fiscal year:
(1) The amount of money that the county auditor reallocated from the Educational Revenue Augmentation Fund for financing under the program.
(2) The purposes for which that allocated money was used.
(3) The actions taken during the fiscal year to implement the applicant’s project.
(b) On or before March 1, 2017, and annually thereafter, the bank shall provide a report to the Joint Legislative Budget Committee that includes all of the following information for the preceding fiscal year:
(1) The name, location, and general description of each application for financing approved under the program.
(2) The total amount of money that county auditors reallocated from the Educational Revenue Augmentation Fund under the program.
(3) An evaluation of the extent to which the implementation of the approved financing has achieved the purposes and intent of the program. In preparing this evaluation, the bank may solicit advice and assistance from other state entities, including, but not limited to, the departments within the Transportation Agency, the Business, Consumer Services, and Housing Agency, and the Natural Resources Agency, the Department of Finance, and the Office of Planning and Research.

63047.90.
 This article shall remain in effect only until January 1, 2020, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2020, deletes or extends that date. However, the repeal of this article shall not affect the continuing annual reallocation of property taxes for financing approved by the bank prior to the repeal of this article.