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SB-563 Second Neighborhood Infill Finance and Transit Improvements Act: housing developments: homelessness prevention programs: enhanced infrastructure financing plan adoption process.(2021-2022)

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Date Published: 02/19/2021 04:00 AM
SB563:v99#DOCUMENT


CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Senate Bill
No. 563


Introduced by Senator Allen

February 18, 2021


An act to amend Sections 53398.66, 53398.69, and 53398.75.7 of the Government Code, relating to local government.


LEGISLATIVE COUNSEL'S DIGEST


SB 563, as introduced, Allen. Second Neighborhood Infill Finance and Transit Improvements Act: housing developments: homelessness prevention programs: enhanced infrastructure financing plan adoption process.
Existing law authorizes the legislative body of a city or county to propose the establishment of an enhanced infrastructure financing district, with a governing body referred to as a public financing authority, to finance public capital facilities or other specified projects of communitywide significance. Existing law requires the proceedings for the establishment of the district to be instituted by the adoption of a specified resolution and requires an infrastructure financing plan to be prepared, as specified. Existing law requires a copy of the resolution and the plan to be sent to each landowner within the district. Existing law requires the public financing authority to consider the adoption of the plan at 3 public hearings and, at the 3rd hearing, terminate the proceedings, adopt the plan, or call an election depending on the percentage of the combined number of landowners and residents in the area who are at least 18 years of age who file a protest. If an election is called, existing law makes adoption of the plan dependent on the vote of that population.
This bill, instead, would make the above-described plan adoption process dependent on the percentage of the combined number of registered voters in the area and landowners who file a protest and on the vote of that population.
Existing law, the Second Neighborhood Infill Finance and Transit Improvements Act, or NIFTI-2, authorizes a city or county to adopt a resolution to allocate its tax revenues to an enhanced infrastructure financing district, including revenues derived from local sales and use taxes imposed pursuant to the Bradley-Burns Uniform Local Sales and Use Tax Law or transactions and use taxes imposed in accordance with the Transactions and Use Tax Law, if certain conditions are or will be met. Among those conditions, existing law includes requirements that the area financed with those funds is within 1/2 mile of a major transit stop, as specified, and that the boundaries of the enhanced infrastructure financing district are coterminous with the city or county that established the district. Existing law also requires the infrastructure financing plan to require specified minimum percentages of the funds to be used to develop affordable housing, as specified, and to give first priority to income-qualified households displaced from the district, as specified, and secondary priority to households with a member or members employed within 2 miles of the district. Existing law authorizes the remaining funds to be used for certain affordable housing, mixed-use, transit, or greenhouse gas emission reduction related projects or programs.
This bill would revise NIFTI-2 to, among other things, remove the requirements that the area financed be within 1/2 mile of a major transit stop and that the boundaries of the district be coterminous with the city or county. The bill would require specified minimum percentages of the funds be used for homelessness prevention programs or development of affordable housing that is within 1/2 mile of a major transit stop, as specified. The bill would require first priority for the housing be given to households who were displaced from the district within the past 10 years, and secondary priority for households with a member or members who are employed within 2 miles of the housing or who live within the district and are children, elderly, or disabled. The bill would require first priority for the homelessness prevention programs to be given to households living within the district with a member or members who are employed within the district or who are children, elderly, or disabled, and secondary priority for households not living within the district with a member or members who are employed within the district or who are children, elderly, or disabled. The bill would authorize the remaining funds to be used for certain transit related projects in specified areas within a 1/2 mile of a major transit stop. The bill would also authorize the remaining funds to be used for certain homelessness prevention, affordable housing, enhanced transit ridership, or greenhouse gas emission reduction projects or programs throughout the district.
This bill would prohibit a city or county that allocates tax revenues to a district pursuant to NIFTI-2 from approving a development project within the district that will require the demolition of housing to comply with specified requirements, including the provision of relocation assistance and a right of first refusal in the new housing to displaced occupants, as provided. The bill would provide that these provisions do not supersede any provision of a locally adopted ordinance that places greater restrictions on the demolition of residential dwelling units or the subdivision of residential rental units or that requires greater relocation assistance to displaced households.
This bill would authorize a district to receive funds, real property, or other in-kind resources from private persons, the state, or the federal government. The bill would also authorize a district to receive real property or other in-kind resources from the city or county.
Existing law establishes in state government the Strategic Growth Council and requires the council to, among other duties, manage and award grants and loans to support the planning and development of sustainable communities.
This bill would require the council, upon appropriation, to contribute an unspecified amount of matching funds to a district formed by a city and county or jointly formed by a city and a county each year based on the funds and other resources contributed by those local governments, as specified. The bill would require the Governor to select an additional voting member to be added to the public financing authority if the district receives the full amount of state matching contribution. If the state subsequently fails to maintain the full amount of the matching contribution, the bill would require the voting rights of that member to be suspended until the full amount of the matching contribution is restored.
Existing law exempts the adoption of an enhanced infrastructure financing plan that allocates tax revenues pursuant to NIFTI-2 from certain provisions generally applicable to enhanced infrastructure financing districts, and instead requires the district to follow specific notice, protest, and election proceedings for the adoption, review, and amendment of the enhanced infrastructure financing plan.
This bill would remove that exemption and make conforming changes.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

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


SECTION 1.

 Section 53398.66 of the Government Code is amended to read:

53398.66.
 (a) (1) The public financing authority shall consider adoption of the enhanced infrastructure financing plan at three public hearings that shall take place at least 30 days apart. In addition to the notice given to landowners and affected taxing entities pursuant to Sections 53398.60 and 53398.61, the public financing authority shall give notice of each public hearing in accordance with subdivision (i).
(2) At the first public hearing, the public financing authority shall hear all written and oral comments, but take no action.
(3) At the second public hearing, the public financing authority shall consider any additional written and oral comments and take action to modify or reject the enhanced infrastructure financing plan. If the enhanced infrastructure financing plan is not rejected at the second public hearing, then the public financing authority shall conduct a protest proceeding at the third public hearing to consider whether the landowners and residents within the enhanced infrastructure financing plan area wish to present oral or written protests against the adoption of the enhanced infrastructure financing plan.
(b) The draft-enhanced infrastructure financing plan shall be made available to the public and to each landowner within the area at a meeting held at least 30 days before the notice given for the first public hearing. The purposes of the meeting shall be to allow the staff of the public financing authority to present the draft-enhanced infrastructure financing plan, answer questions about the enhanced infrastructure financing plan, and consider comments about the enhanced infrastructure financing plan.
(c) (1) The public financing authority shall give notice of the meeting required by subdivision (b) and the public hearings required by subdivision (a) in accordance with subdivision (i). The notice shall do all of the following, as applicable:
(A) Describe specifically the boundaries of the proposed area.
(B) Describe the purpose of the enhanced infrastructure financing plan.
(C) State the day, hour, and place when and where any and all persons having any comments on the proposed enhanced infrastructure financing plan may appear to provide written or oral comments to the enhanced infrastructure financing district.
(D) Notice of the second public hearing shall include a summary of the changes made to the enhanced infrastructure financing plan as a result of the oral and written testimony received at or before the public hearing and shall identify a location accessible to the public where the enhanced infrastructure financing plan proposed to be presented at the second public hearing can be reviewed.
(E) Notice of the third public hearing to consider any written or oral protests shall contain a copy of the enhanced infrastructure financing plan, and shall inform the landowner and resident of their right to submit an oral or written protest before the close of the public hearing. The protest may state that the landowner or resident objects to the public financing authority taking action to implement the enhanced infrastructure financing plan.
(2) At the third public hearing, the public financing authority shall consider all written and oral protests received before the close of the public hearing along with the recommendations, if any, of affected taxing entities, and shall terminate the proceedings or adopt the enhanced infrastructure financing plan subject to confirmation by the voters at an election called for that purpose. The public financing authority shall terminate the proceedings if there is a majority protest. A majority protest exists if protests have been filed representing over 50 percent of the combined number of registered voters in the area and landowners and residents in the area who are at least 18 years of age. not registered voters. An election shall be called if between 25 percent and 50 percent of the combined number of registered voters in the area and landowners and residents in the area who are at least 18 years of age not registered voters file a protest.
(d) An election required pursuant to paragraph (2) of subdivision (c) shall be held within 90 days of the public hearing and may be held by mail-in ballot. The public financing authority shall adopt, at a duly noticed public hearing, procedures for this election.
(e) If a majority of the combined number of registered voters in the area and landowners and residents who are not registered voters in the area vote against the enhanced infrastructure financing plan, then the public financing authority shall not take any further action to implement the proposed enhanced infrastructure financing plan. The public financing authority shall not propose a new or revised enhanced infrastructure financing plan to the affected landowners and residents for at least one year following the date of an election in which the enhanced infrastructure financing plan was rejected.
(f) At the hour set in the notices required by subdivision (a), the public financing authority shall consider all written and oral comments.
(g) If less than 25 percent of the combined number of registered voters in the area and landowners and residents in the area who are at least 18 years of age not registered voters in the area file a protest, the public financing authority may adopt the enhanced infrastructure financing plan at the conclusion of the third public hearing by ordinance. The ordinance adopting the enhanced infrastructure financing plan shall be subject to referendum as prescribed by law.
(h) The public financing authority shall consider and adopt an amendment or amendments to an enhanced infrastructure financing plan in accordance with the provisions of this section.
(i) The public financing authority shall post notice of each meeting or public hearing required by this section in an easily identifiable and accessible location on the enhanced infrastructure financing district’s internet website and shall mail a written notice of the meeting or public hearing to each landowner, each resident, and each taxing entity at least 10 days before the meeting or public hearing.
(1) Notice of the first public hearing shall also be published not less than once a week for four successive weeks before the first public hearing in a newspaper of general circulation published in the county in which the area lies. The notice shall state that the district will be used to finance public facilities or development, briefly describe the public facilities or development, briefly describe the proposed financial arrangements, including the proposed commitment of incremental tax revenue, describe the boundaries of the proposed district, and state the day, hour, and place when and where any persons having any objections to the proposed infrastructure financing plan, or the regularity of any of the prior proceedings, may appear before the public financing authority and object to the adoption of the proposed plan by the public financing authority.
(2) Notice of the second public hearing shall also be published not less than 10 days before the second public hearing in a newspaper of general circulation in the county in which the area lies. The notice shall state that the district will be used to finance public facilities or development, briefly describe the public facilities or development, briefly describe the proposed financial arrangements, describe the boundaries of the proposed district, and state the day, hour, and place when and where any persons having any objections to the proposed infrastructure financing plan, or the regularity of any of the prior proceedings, may appear before the public financing authority and object to the adoption of the proposed plan by the public financing authority.
(3) Notice of the third public hearing shall also be published not less than 10 days prior to the third public hearing in a newspaper of general circulation in the county in which the area lies. The notice shall state that the district will be used to finance public facilities or development, briefly describe the public facilities or development, briefly describe the proposed financial arrangements, describe the boundaries of the proposed district, and state the day, hour, and place when and where any persons having any objections to the proposed infrastructure financing plan, or the regularity of any of the prior proceedings, may appear before the public financing authority and object to the adoption of the proposed plan by the public financing authority.
(j) (1) The public financing authority shall review the enhanced infrastructure financing plan at least annually and make any amendments that are necessary and appropriate and shall require the preparation of an annual independent financial audit paid for from revenues of the enhanced infrastructure financing district.
(2) A public financing authority shall adopt an annual report on or before June 30 of each year after holding a public hearing. Written copies of the draft report shall be made available to the public 30 days before the public hearing. The public financing authority shall cause the draft report to be posted in an easily identifiable and accessible location on the enhanced infrastructure financing district’s internet website and shall mail a written notice of the availability of the draft report on the internet website to each owner of land and each resident within the area covered by the enhanced infrastructure financing plan and to each taxing entity that has adopted a resolution pursuant to Section 53398.68. The notice shall be mailed by first-class mail, but may be addressed to “occupant.”
(3) The annual report shall contain all of the following:
(A) A description of the projects undertaken in the fiscal year, including any rehabilitation of structures, and a comparison of the progress expected to be made on those projects compared to the actual progress.
(B) A chart comparing the actual revenues and expenses, including administrative costs, of the public financing authority to the budgeted revenues and expenses.
(C) The amount of tax increment revenues received.
(D) An assessment of the status regarding completion of the enhanced infrastructure financing district’s projects.
(E) The amount of revenues expended to assist private businesses.
(4) If the public financing authority fails to provide the annual report required by paragraph (3), the public financing authority shall not spend any funds received pursuant to a resolution adopted pursuant to this chapter until the public financing authority has provided the report.

SEC. 2.

 Section 53398.69 of the Government Code is amended to read:

53398.69.
 (a) (1)At the conclusion of the hearings pursuant to Section 53398.66, the public financing authority may adopt a resolution proposing adoption of the infrastructure financing plan, as modified, and formation of the enhanced infrastructure financing district in a manner consistent with Section 53398.68, or it may adopt a resolution abandoning the proceedings. If the proceedings are abandoned, then the public financing authority shall cease to exist by operation of this section with no further action required of the legislative body and the legislative body may 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.

(2)In the case of an infrastructure financing plan adopted pursuant to Section 53398.75.7, the proceedings set forth in subdivision (e) of that section shall govern the adoption of the infrastructure financing plan.

(b) The infrastructure financing plan shall take effect upon the adoption of the resolution. The infrastructure financing plan shall specify if the district shall be funded solely through the district’s share of tax increment, governmental or private loans, grants, bonds, assessments, fees, other resources authorized by law with respect to particular districts, or some combination thereof. However, the public financing authority shall not issue bonds or levy assessments or fees that may be included in the infrastructure financing plan before one or more of the following:
(1) The adoption of a resolution meeting the requirements of Section 53398.77, and, if applicable, subdivision (c) of Section 53398.78, to issue bonds to finance the infrastructure financing plan.
(2) Compliance with the procedures required in subdivision (f) of Section 53398.75, to levy assessments or fees to finance the infrastructure financing plan.
(c) In addition, the district may expend up to 10 percent of any accrued tax increment in the first two years of the effective date of the enhanced infrastructure financing district on planning and dissemination of information to the residents within the district’s boundaries about the infrastructure financing plan and planned activities to be funded by the district.

SEC. 3.

 Section 53398.75.7 of the Government Code is amended to read:

53398.75.7.
 (a) This section shall be known and may be cited as the Second Neighborhood Infill Finance and Transit Improvements Act, or NIFTI-2.
(b) For purposes of this section, the following definitions shall apply:
(1) “District” means a district allocated tax revenue pursuant to this section.
(2) “Homelessness prevention programs” include, but are not limited to, rent subsidy programs, eviction defense programs, and code enforcement programs for households with incomes below 60 percent of area median income.
(3) “Development of housing” includes predevelopment or land acquisition for, and acquisition, construction, or rehabilitation of housing, including a multifamily affordable housing project or mixed-use projects with only affordable multifamily housing and ground floor commercial, artistic, cultural or community uses that support infill and compact development.
(4) “Major transit stop” has the same meaning as that term is defined in Section 21064.3 of the Public Resources Code.
(5) “Predevelopment costs” include, but are not limited to, site control, engineering studies, architectural plans, application fees, legal services, permits, bonding, and site preparation.

(b)

(c) (1)At any time before or after the adoption of the infrastructure financing plan, a city, county, or city and county may adopt a resolution to allocate tax revenues of that entity to the district, including tax increment pursuant to sections 53398.63 and 53398.75, property tax revenues, revenues derived from local sales and use taxes imposed pursuant to the Bradley-Burns Uniform Local Sales and Use Tax Law (Part 1.5 (commencing with Section 7200) of Division 2 of the Revenue and Taxation Code), or transactions and use taxes imposed in accordance with the Transactions and Use Tax Law (Part 1.6 (commencing with Section 7251) of Division 2 of the Revenue and Taxation Code), if all of the following apply:

(A)The area to be financed with funds received pursuant to this section is within one-half mile of a major transit stop, as defined in Section 21064.3 of the Public Resources Code.

(B)The

(1) (A) Except as provided in subdivision (k), the infrastructure financing plan requires that at least 40 15 percent of the total funds received by the district pursuant to this section be used for the acquisition, construction, or rehabilitation of housing, including the costs of predevelopment and land acquisition, for households with incomes below 60 percent of area median income for rent or purchase. Predevelopment costs include, but are not limited to, site control, engineering studies, architectural plans, application fees, legal services, permits, bonding, and site preparation.
(C)The infrastructure financing plan requires that 50 percent of the housing funds are used to develop homelessness prevention programs for, or development of housing that is within one-half mile of a major transit stop and affordable to and occupied by by, households with incomes below 60 percent and greater than 30 percent of area median income, and 50 that at least 15 percent of the housing total funds are used for either received by the district pursuant to this section be used for homelessness prevention programs for, or development of housing that is within one-half mile of a major transit stop and affordable to and occupied by by, households with incomes below 30 percent of area median income income, or permanent supportive housing to help homeless persons get off the street.
(B) The infrastructure financing plan shall require that the city, county, or city and county ensure that the requirements of this paragraph are met within every five years.

(D)

(2) The infrastructure financing plan gives first priority for occupancy of housing funded through this plan to income-qualified households displaced from the district through no fault of their own, and secondary as follows:
(A) First priority for households who were displaced from the district through no fault of their own within the past 10 years.
(B) secondary Secondary priority for occupancy of housing funded through this program is given to households with a member or members employed who are either of the following:
(i) Employed within two miles of the district. housing.
(ii) Live within the district and are children, elderly, or disabled.
(3) The infrastructure plan gives priority for homelessness prevention programs to income-qualified households as follows:
(A) First priority for households living within the district with a member or members who are either of the following:
(i) Employed within the district.
(ii) Are children, elderly, or disabled.
(B) secondary priority for households not living within the district with a member or members who are either of the following:
(i) Employed within the district.
(ii) Are children, elderly, or disabled.

(E)

(4) The infrastructure financing plan requires that at least 10 percent of the total funds received by the district pursuant to this section be used for investments in the capital costs of parks, urban forestry, or permanent greening improvements along boulevards, streets, or other public areas within a district, or active transportation capital projects that qualify under the Active Transportation Program (Chapter 8 (commencing with Section 2380) of Division 3 of the Streets and Highways Code), including pedestrian or bicycle facilities or supportive infrastructure, including connectivity to transit stations.

(F)The boundaries of the enhanced infrastructure financing district are coterminous with the city or county that established the district.

(G)

(5) The use of the revenues derived from the local sales and use taxes imposed under the Bradley-Burns Uniform Local Sales and Use Tax Law (Part 1.5 (commencing with Section 7200) of Division 2 of the Revenue and Taxation Code) or transactions and use taxes imposed in accordance with the Transactions and Use Tax Law (Part 1.6 (commencing with Section 7251) of Division 2 of the Revenue and Taxation Code) pursuant to the infrastructure financing plan is consistent with the purposes for which that tax is imposed.

(H)

(6) If the infrastructure financing plan proposes to allocate tax revenues of that entity to the district that are derived from the local sales and use taxes imposed pursuant to the Bradley-Burns Uniform Local Sales and Use Tax Law (Part 1.5 (commencing with Section 7200) of Division 2 of the Revenue and Taxation Code), the city, county, or city and county has received the consent of any impacted transportation agency that receives tax revenues derived from that any tax adopted pursuant to that law, and has ensured that existing or planned transportation operations and capital projects will not be negatively impacted.

(2)

(d) This section does not authorize a city, county, or city and county to allocate all, or a portion of any sales and use taxes imposed pursuant to the Bradley-Burns Uniform Local Sales and Use Tax Law (Part 1.5 (commencing with Section 7200) of Division 2 of the Revenue and Taxation Code) or transactions and use taxes imposed in accordance with the Transactions and Use Tax Law (Part 1.6 (commencing with Section 7251) of Division 2 of the Revenue and Taxation Code), that was approved by the voters for a special purpose not related to the purposes in paragraph (1). subdivision (c).

(c)

(e) The remaining funds received pursuant to this section that are not allocated pursuant to subdivision (c) may be used for any of the following:

(1)Multifamily affordable housing projects or mixed-use projects with affordable multifamily housing and ground floor commercial uses that support infill and compact development.

(1) In parcels that are within one-half mile of a major transit stop, located along boulevards or in downtown areas, and are zoned for commercial or industrial uses, and in the adjacent sidewalks, boulevards, and downtown streets adjacent to those parcels, any of the following:

(2)

(A) Transit capital projects, including transit stations and programs supporting transit ridership, including waterborne transit.

(3)

(B) Transit-oriented development projects, including affordable housing and infrastructure at or near transit stations or connecting those developments to transit stations. If the transit-oriented development project includes housing, it must include ground floor commercial, artistic, cultural, or community uses that support infill and compact development and a minimum of 20 percent of the units must be for households with incomes below 60 percent of area median income for rent or purchase.

(4)

(C) Capital projects that implement local complete streets programs.

(5)

(D) Parking, including detached and decoupled parking structures that provide parking for residents, businesses, or visitors in lieu of onsite parking for proposed developments. These parking structures should provide no more than one space for each residential unit. The ground floors in these parking structures should provide space for pedestrian-oriented commercial or public uses. Revenues from parking may be used to maintain these parking structures and to implement transportation demand management programs to reduce automobile trips to and from the district.
(2) In any location in the district, any of the following:
(A) Homelessness prevention programs.
(B) Development of housing affordable to and occupied by households with incomes below 60 percent of area median income.
(C) Programs that support enhanced transit ridership, including, but not limited to, transit pass programs that provide low-cost transit service for students, seniors, and persons with disabilities.

(6)

(D) Other projects or programs Programs designed to reduce greenhouse gas emissions and other criteria air pollutants by reducing automobile trips and vehicle miles traveled within a community.

(d)The infrastructure financing plan shall ensure that the requirements of this section are met every 10 years.

(e)(1)Sections 53398.66 and 53398.67 shall not apply to the adoption of an enhanced infrastructure financing plan that includes the allocation of tax revenues pursuant to this section.

(2)(A)The public financing authority shall consider adoption of the enhanced infrastructure financing plan at three public hearings that shall take place at least 30 days apart.

(B)At the first public hearing, the public financing authority shall hear all written and oral comments, but take no action.

(C)At the second public hearing, the public financing authority shall consider any additional written and oral comments and take action to modify or reject the enhanced infrastructure financing plan. If the enhanced infrastructure financing plan is not rejected at the second public hearing, then the public financing authority shall conduct a protest proceeding at the third public hearing to consider whether the landowners and residents within the enhanced infrastructure financing plan area wish to present oral or written protests against the adoption of the enhanced infrastructure financing plan.

(3)The draft enhanced infrastructure financing plan shall be made available to the public and to each landowner within the area at a meeting held at least 30 days prior to the notice given for the first public hearing. The purposes of the meeting shall be to allow the staff of the public financing authority to present the draft enhanced infrastructure financing plan, answer questions about the enhanced infrastructure financing plan, and consider comments about the enhanced infrastructure financing plan.

(4)(A)Notice of the meeting required by paragraph (3) and the public hearings required by this paragraph shall be given in accordance with paragraph (11). The notice shall do all of the following, as applicable:

(i)Describe specifically the boundaries of the proposed area.

(ii)Describe the purpose of the enhanced infrastructure financing plan.

(iii)State the day, hour, and place when and where any and all persons having any comments on the proposed enhanced infrastructure financing plan may appear to provide written or oral comments to the enhanced infrastructure financing district.

(iv)Notice of the second public hearing shall include a summary of the changes made to the enhanced infrastructure financing plan as a result of the oral and written testimony received at or before the public hearing and shall identify a location accessible to the public where the enhanced infrastructure financing plan proposed to be presented and adopted at the second public hearing can be reviewed.

(v)Notice of the third public hearing to consider any written or oral protests shall contain a copy of the enhanced infrastructure financing plan adopted pursuant to paragraph (2), and shall inform the landowner and resident of his or her right to submit an oral or written protest before the close of the public hearing. The protest may state that the landowner or resident objects to the public financing authority taking action to implement the enhanced infrastructure financing plan.

(B)At the third public hearing, the public financing authority shall consider all written and oral protests received prior to the close of the public hearing and shall terminate the proceedings or adopt the enhanced infrastructure financing plan subject to confirmation by the voters at an election called for that purpose. The public financing authority shall terminate the proceedings if there is a majority protest. A majority protest exists if protests have been filed representing over 50 percent of the combined number of landowners and residents in the area who are at least 18 years of age. An election shall be called if between 25 percent and 50 percent of the combined number of landowners and residents in the area who are at least 18 years of age file a protest.

(5)An election required pursuant to subparagraph (B) of paragraph (4) shall be held within 90 days of the public hearing and may be held by mail-in ballot. The public financing authority shall adopt, at a duly noticed public hearing, procedures for this election.

(6)If a majority of the landowners and residents vote against the enhanced infrastructure financing plan, then the public financing authority shall not take any further action to implement the proposed enhanced infrastructure financing plan. The public financing authority shall not propose a new or revised enhanced infrastructure financing plan to the affected landowners and residents for at least one year following the date of an election in which the enhanced infrastructure financing plan was rejected.

(7)At the hour set in the notice required by paragraph (2), the public financing authority shall consider all written and oral comments.

(8)If less than 25 percent of the combined number of landowners and residents in the area who are at least 18 years of age file a protest, the public financing authority may adopt the enhanced infrastructure financing plan at the conclusion of the third public hearing by ordinance. The ordinance adopting the enhanced infrastructure financing plan shall be subject to referendum as prescribed by law.

(9)For the purposes of this chapter, the enhanced infrastructure financing plan shall be the enhanced infrastructure financing plan adopted pursuant to this section.

(10)The public financing authority shall consider and adopt an amendment or amendments to an enhanced infrastructure financing plan in accordance with the provisions of this section.

(11)The public financing authority shall post notice of each meeting or public hearing required by this section in an easily identifiable and accessible location on the enhanced infrastructure financing district’s Internet Web site and shall mail a written notice of the meeting or public hearing to each landowner, each resident, and each taxing entity at least 10 days prior to the meeting or public hearing.

(A)Notice of the first public hearing shall also be published not less than once a week for four successive weeks prior to the first public hearing in a newspaper of general circulation published in the county in which the area lies. The notice shall state that the district will be used to finance public facilities or development, briefly describe the public facilities or development, briefly describe the proposed financial arrangements, including the proposed commitment of incremental tax revenue, including revenues derived from local sales and use taxes imposed pursuant to the Bradley-Burns Uniform Local Sales and Use Tax Law (Part 1.5 (commencing with Section 7200) of Division 2 of the Revenue and Taxation Code), or transactions and use taxes imposed in accordance with the Transactions and Use Tax Law (Part 1.6 (commencing with Section 7251) of Division 2 of the Revenue and Taxation Code), describe the boundaries of the proposed district, and state the day, hour, and place when and where any persons having any objections to the proposed infrastructure financing plan, or the regularity of any of the prior proceedings, may appear before the public financing authority and object to the adoption of the proposed plan by the public financing authority.

(B)Notice of the second public hearing shall also be published not less than 10 days prior to the second public hearing in a newspaper of general circulation in the county in which the area lies. The notice shall state that the district will be used to finance public facilities or development, briefly describe the public facilities or development, briefly describe the proposed financial arrangements, including the proposed commitment of incremental tax revenue, including revenues derived from local sales and use taxes imposed pursuant to the Bradley-Burns Uniform Local Sales and Use Tax Law (Part 1.5 (commencing with Section 7200) of Division 2 of the Revenue and Taxation Code), or transactions and use taxes imposed in accordance with the Transactions and Use Tax Law (Part 1.6 (commencing with Section 7251) of Division 2 of the Revenue and Taxation Code), describe the boundaries of the proposed district, and state the day, hour, and place when and where any persons having any objections to the proposed infrastructure financing plan, or the regularity of any of the prior proceedings, may appear before the public financing authority and object to the adoption of the proposed plan by the public financing authority.

(C)Notice of the third public hearing shall also be published not less than 10 days prior to the third public hearing in a newspaper of general circulation in the county in which the area lies. The notice shall state that the district will be used to finance public facilities or development, briefly describe the public facilities or development, briefly describe the proposed financial arrangements, including the proposed commitment of incremental tax revenue, including revenues derived from local sales and use taxes imposed pursuant to the Bradley-Burns Uniform Local Sales and Use Tax Law (Part 1.5 (commencing with Section 7200) of Division 2 of the Revenue and Taxation Code), or transactions and use taxes imposed in accordance with the Transactions and Use Tax Law (Part 1.6 (commencing with Section 7251) of Division 2 of the Revenue and Taxation Code), describe the boundaries of the proposed district, and state the day, hour, and place when and where any persons having any objections to the proposed infrastructure financing plan, or the regularity of any of the prior proceedings, may appear before the public financing authority and object to the adoption of the proposed plan by the public financing authority.

(f)(1)The public financing authority shall review the enhanced infrastructure financing plan at least annually and make any amendments that are necessary and appropriate in accordance with the procedures set forth in paragraph (5) and shall require the preparation of an annual independent financial audit paid for from revenues of the enhanced infrastructure financing district.

(2)A public financing authority shall adopt an annual report on or before June 30 of each year after holding a public hearing. Written copies of the draft report shall be made available to the public 30 days prior to the public hearing. The public financing authority shall cause the draft report to be posted in an easily identifiable and accessible location on the enhanced infrastructure financing district’s Internet Web site and shall mail a written notice of the availability of the draft report on the Internet Web site to each owner of land and each resident within the area covered by the enhanced infrastructure financing plan and to each taxing entity that has adopted a resolution pursuant to Section 53398.68. The notice shall be mailed by first-class mail, but may be addressed to “occupant.”

(3)The annual report shall contain all of the following:

(A)A description of the projects undertaken in the fiscal year, including any rehabilitation of structures, and a comparison of the progress expected to be made on those projects compared to the actual progress.

(B)A chart comparing the actual revenues and expenses, including administrative costs, of the public financing authority to the budgeted revenues and expenses.

(C)The amount of tax increment revenues received.

(D)The amount of revenues expended for housing meeting the requirements of this section.

(E)An assessment of the status regarding completion of the enhanced infrastructure financing district’s projects.

(F)The amount of revenues expended to assist private businesses.

(4)If the public financing authority fails to provide the annual report required by paragraph (1), the public financing authority shall not spend any funds received pursuant to a resolution adopted pursuant to this section until the public financing authority has provided the report.

(5)Every 10 years, at the public hearing held pursuant to paragraph (2), the public financing authority shall conduct a protest proceeding to consider whether the landowners and residents within the enhanced infrastructure financing district wish to present oral or written protests against the enhanced infrastructure financing district. Notice of this protest proceeding shall be included in the written notice of the hearing on the annual report and shall inform the landowner and resident of his or her right to submit an oral or written protest before the close of the public hearing. The protest may state that the landowner or resident objects to the public financing authority taking action to implement the enhanced infrastructure financing plan on and after the date of the election described in paragraph (6). The public financing authority shall consider all written and oral protests received prior to the close of the public hearing.

(6)If there is a majority protest, the public financing authority shall not take any further action to implement the enhanced infrastructure financing plan on and after the date the existence of a majority protest is determined. If between 25 percent and 50 percent of the landowners and residents file protests, then the public financing authority shall call an election of the landowners and residents in the area covered by the enhanced infrastructure financing plan, and shall not initiate or authorize any new projects until the election is held. A majority protest exists if protests have been filed representing over 50 percent of the combined number of landowners and residents at least 18 years of age or older in the area.

(7)An election required pursuant to paragraph (6) shall be held within 90 days of the public hearing and may be held by mail-in ballot. The public financing authority shall adopt, at a duly noticed public hearing, procedures for holding this election.

(8)If a majority of the landowners and residents vote against the enhanced infrastructure financing plan, then the public financing authority shall not take any further action to implement the enhanced infrastructure financing plan on and after the date of the election held pursuant to paragraph (5). This subdivision shall not prevent the public financing authority from taking any and all actions and appropriating and expending funds, including, but not limited to, any and all payments on bonded or contractual indebtedness, to carry out and complete projects for which expenditures of any kind had been made prior to the date of the election.

(g)

(f) Notwithstanding Section 53398.52, revenues collected and allocated for the purposes of this section shall not be used for highway or highway interchange improvements.

(h)

(g) The district shall require, by recorded covenants or restrictions, that affordable housing units financed pursuant to this section remain permanently available at affordable housing costs to, and occupied by, very low income households, persons and families of low income, or persons and families of low or moderate income for the longest feasible time, but for not less than 55 years for rental units and 45 years for owner-occupied units.

(i)

(h) A legislative body shall not adopt an ordinance terminating an enhanced infrastructure financing district created pursuant to this section if the district has not complied with its affordable housing obligations.

(j)Notwithstanding Article 4 (commencing with Section 53398.77), bonds issued by a district pursuant to this section may be issued without voter approval.

(k)

(i) Paragraph (1) of subdivision (c) of Section 1720 of the Labor Code shall not apply to projects financed by the enhanced infrastructure financing district.
(j) (1) Notwithstanding Section 53398.56, a city or county allocating tax revenues to the district pursuant to this section shall not approve a development project within the district that will require the demolition of residential dwelling units unless the project will create at least as many residential dwelling units as will be demolished.
(2) Notwithstanding Section 53398.56, a city or county allocating tax revenues to the district pursuant to this section shall not approve a development project within the district that will require the demolition of occupied or vacant protected units, unless all of the following apply:
(A) (i) The project will replace all existing or demolished protected units.
(ii) Any protected units replaced pursuant to this subparagraph shall be considered in determining whether the housing development project satisfies the requirements of Section 65915 or a locally adopted requirement that requires, as a condition of the development of residential rental units, that the project provide a certain percentage of residential rental units affordable to, and occupied by, households with incomes that do not exceed the limits for moderate-income, lower income, very low income, or extremely low income households, as specified in Sections 50079.5, 50093, 50105, and 50106 of the Health and Safety Code.
(iii) Notwithstanding clause (i), in the case of a protected unit that is or was, within the seven-year period preceding the application, subject to a form of rent or price control through a local government’s valid exercise of its police power, and that is or was occupied by persons or families above lower income, the city or county may do either of the following:
(I) Require that the replacement units be made available at affordable rent or affordable housing cost to, and occupied by, low-income persons or families. If the replacement units will be rental dwelling units, these units shall be subject to a recorded affordability restriction for as long as possible, but at least 55 years.
(II) Require that the units be replaced in compliance with the jurisdiction’s rent or price control ordinance, provided that each unit is replaced, with the initial rent for the replacement unit equal to the last rent for the demolished unit plus permitted annual rent increases to the time the replacement unit is occupied. Unless otherwise required by the city or county’s rent or price control ordinance, these units shall not be subject to a recorded affordability restriction.
(B) The housing development project will include at least as many residential dwelling units as the greatest number of residential dwelling units that existed on the project site within the last seven years.
(C) Any existing residents will be allowed to occupy their units until six months before the start of construction activities with proper notice, subject to Chapter 16 (commencing with Section 7260) of Division 7 of Title 1.
(D) The developer agrees to provide both of the following to the occupants of any protected units:
(i) Relocation benefits to the occupants of those affordable residential rental units, subject to Chapter 16 (commencing with Section 7260) of Division 7 of Title 1.
(ii) A right of first refusal for a comparable unit available in the new housing development affordable to the household at an affordable rent, as defined in Section 50053 of the Health and Safety Code, or an affordable housing cost, as defined in 50052.5 of this code.
(E) For purposes of this paragraph:
(i) “Equivalent size” means that the replacement units contain at least the same total number of bedrooms as the units being replaced.
(ii) “Protected units” means any of the following:
(I) Residential dwelling units that are or were subject to a recorded covenant, ordinance, or law that restricts rents to levels affordable to persons and families of moderate, lower or very low income within the past seven years.
(II) Residential dwelling units that are or were subject to any form of rent or price control through a public entity’s valid exercise of its police power within the past seven years.
(III) Residential dwelling units that are or were occupied by moderate, lower or very low income households within the past seven years.
(IV) Residential dwelling units that were withdrawn from rent or lease pursuant to Chapter 12.75 (commencing with Section 7060) of Division 7 of Title 1 within the past 15 years.
(iii) Subject to clauses (iv) and (v), “replace” means either of the following:
(I) If a protected unit is occupied on the date of application, the proposed development shall provide at least the same number of units of equivalent size to be made available at affordable rent or affordable housing cost to, and occupied by, persons and families in the same or lower income category as those households in occupancy. If the income category of the household in occupancy is not known, it shall be rebuttably presumed that moderate and lower income renter households occupied these units in the same proportion of moderate and lower income renter households to all renter households within the jurisdiction, as determined by the most recently available data from the United States Department of Housing and Urban Development’s Comprehensive Housing Affordability Strategy database. For unoccupied protected dwelling units in a development with occupied units, the proposed housing development shall provide units of equivalent size to be made available at affordable rent or affordable housing cost to, and occupied by, persons and families in the same or lower income category as the last household in occupancy. If the income category of the last household in occupancy is not known, it shall be rebuttably presumed that moderate and lower income renter households occupied these units in the same proportion of moderate and lower income renter households to all renter households within the jurisdiction, as determined by the most recently available data from the United States Department of Housing and Urban Development’s Comprehensive Housing Affordability Strategy database. All replacement calculations resulting in fractional units shall be rounded up to the next whole number. If the replacement units will be rental dwelling units, these units shall be subject to a recorded affordability restriction for at least 55 years.
(II) If all protected dwelling units have been vacated or demolished within the five-year period preceding the application, the proposed housing development shall provide at least the same number of units of equivalent size as existed at the highpoint of those units in the five-year period preceding the application to be made available at affordable rent or affordable housing cost to, and occupied by, persons and families in the same or lower income category as those persons and families in occupancy at that time, if known. If the incomes of the persons and families in occupancy at the highpoint is not known, it shall be rebuttably presumed that moderate, low-income, and very low income renter households occupied these units in the same proportion of moderate, low-income, and very low income renter households to all renter households within the jurisdiction, as determined by the most recently available data from the United States Department of Housing and Urban Development’s Comprehensive Housing Affordability Strategy database. All replacement calculations resulting in fractional units shall be rounded up to the next whole number. If the replacement units will be rental dwelling units, these units shall be subject to a recorded affordability restriction for at least 55 years.
(iv) If the proposed development is for-sale units, the applicant shall agree to, and the city, county, or city and county shall ensure that, the initial occupant of all for-sale units that replace protected units are persons and families of very low, low, or moderate income, as required, and that the units are offered at an affordable housing cost, as that cost is defined in Section 50052.5 of the Health and Safety Code. The local government shall enforce an equity sharing agreement, unless it is in conflict with the requirements of another public funding source or law. Subparagraphs (A), (B), and (C) of paragraph (2) of subdivision (c) of Section 65915 apply to the equity sharing agreement.
(v) For a project within the coastal zone as defined and delineated in Division 20 (commencing with Section 30000) of the Public Resources Code, replacement dwelling units shall be located within the same city or county as the dwelling units proposed to be converted or demolished. The replacement dwelling units shall be located on the site of the converted or demolished structure or elsewhere within the coastal zone if feasible, or, if location on the site or elsewhere within the coastal zone is not feasible, they shall be located within three miles of the coastal zone.
(3) This subdivision does not supersede any objective provision of a locally adopted ordinance that places restrictions on the demolition of residential dwelling units or the subdivision of residential rental units that are or do any of the following:
(A) More protective of moderate or lower income households or more protective of units subject to a form of rent or price control through a local government’s valid exercise of its police power.
(B) Requires the provision of a greater number of units affordable to moderate or lower income households.
(C) Requires greater relocation assistance to displaced households.
(k) In addition to any tax revenues allocated by the city, county, or city and county, a district also may elect to receive the following for use in carrying out the infrastructure plan:
(1) Funds, real property, or other in-kind resources from private persons, the state, or the federal government. These funds and resources shall not be considered in the determination of the amount of funds received by the district or the percentage of funds used for purposes of paragraphs (1) and (4) of subdivision (c).
(2) Real property or other in-kind resources from the city, county, or city and county forming the district. The fair market value of these resources as determined by an independent appraisal shall be considered when determining either the amount of funds received by the district or the percentage of funds used for purposes of paragraphs (1) and (4) of subdivision (c).
(l) If a city and county forms a district or a city and a county jointly form a district, the Strategic Growth Council, upon appropriation, shall contribute matching funds to the district each year, subject to the following:
(1) The aggregate state matching contribution to all districts pursuant to this subdivision shall not exceed $________ annually, or such greater amount as hereafter is appropriated for this purpose. State funds to which the city and county or the city and the county are entitled or are otherwise awarded without requiring formation of a district shall not count toward the state matching contribution pursuant to this subdivision. Receipt of state matching funds pursuant to this subdivision shall not be considered when evaluating any application by the city, county, city and county, or other applicant for a project residing therein for additional funds from any state program.
(2) The state matching contribution to a district shall equal one-half of the total amount of tax revenues, real property, or other in-kind resources contributed by the city and the county or the city and county that meet all of the following requirements:
(A) The tax revenues, real property, or other in-kind resources contributed by the city and the county or the city and county shall only be used for homelessness prevention programs or the development of housing affordable to and occupied by, households with incomes below 60 percent of area median income.
(B) Unless the local jurisdiction is a city and county, the value of the total amount of tax revenues, real property, or other in-kind resources allocated to the district by the county for these purposes is equal to, or more than, that allocated by the city.
(C) Unless the local jurisdiction is a city and county, the tax revenues, real property, or other in-kind resources allocated to the district by the city for these purposes have not been contributed to the city by the county, state, or federal government.
(D) The tax revenues, real property, or other in-kind resources allocated to the district by the county or the city and county for these purposes have not been contributed to the county by the state or federal government.
(E) The value of the real property or other in-kind resources allocated by the city, county, or city and county for these purposes shall be determined by an independent appraisal for purposes of this paragraph.
(3) If a district receives the full amount of state matching contribution pursuant to paragraph (2), the Governor shall select an additional voting member to be added to the public financing authority. If the state subsequently fails to maintain the full amount of the matching contribution required by paragraph (2) for a district, the voting rights of the member appointed by the Governor shall be suspended until the full amount of the matching contribution is restored.