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September 25, 2012

NFRASTRUCTURE. INANCING. September 25, 2012. ISTRICTS. Legal Authority. Created in 1990- Apparently in response to criticism of perceived abuses of the Community Redevelopment Law The Legislature enacted the Infrastructure Financing District law (Government Code Section 53395 et seq.)

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September 25, 2012

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  1. NFRASTRUCTURE INANCING September 25, 2012 ISTRICTS

  2. Legal Authority • Created in 1990- Apparently in response to criticism of perceived abuses of the Community Redevelopment Law • The Legislature enacted the Infrastructure Financing District law (Government Code Section 53395 et seq.) • Affected Taxing Entity (ATE) definition excludes any county office of education, school district, or community college district

  3. Legal Authority • IFD law includes provisions similar to the Mello-Roos Community Finance District law, but it also includes provisions for tax increment financing • Pursuant to IFD law, cities and counties may finance certain capital facilities and improvements with property tax increment from an IFD formed outside of redevelopment project areas

  4. Use of IFD Tax Increment • Limited to capital facilities that are: • required to serve the development proposed in the IFD area • of community-wide significance • provide significant benefits to an area larger than the district • Capital facilities do not have to be located within the district

  5. Facilities Eligible for IFD Funding • Examples include: • Highways, interchanges, ramps and bridges, arterial streets, parking and transit facilities • Sewage treatment and water reclamation plants and interceptor plants • Facilities for collection and treatment of water for urban uses • Flood control levees and dams, retention basins, and drainage channels

  6. Eligible Facilities continued • Examples include: • Child care facilities • Libraries • Parks, recreational facilities, and open space • Facilities for the transfer and disposal of solid waste, including transfer stations and vehicles

  7. How are IFDs Established?

  8. Financing Plan The plan must include: • Map & legal description of proposed IFD • Description of public facilities required to serve the IFD • Facilities location, timing, and cost • Finding that facilities have community-wide significance and benefit area larger than IFD • Financing Section

  9. Plan’s Financing Section • Proposed maximum portion of TI from each ATE committed to IFD each year • Projection of revenues anticipated by IFD each year, including each ATEs share • Plan for financing facilities, including intention to incur debt • Limit of total dollars that maybe allocated to the IFD

  10. Plan’s Financing Section continued • District’s termination date (30 yr maximum) • Analysis of cost to city of services to IFD area while it is being developed and after development is complete • Analysis of tax, fee, charges, and other revenues anticipated as result of development • Projected fiscal impact of IFD and associated development upon each ATE • Plan for replacement of low-mod units destroyed or removed and relocation of tenants

  11. IFD v. CRL Law

  12. IFDs

  13. IFD Related Proposed Legislation AB2144 (Perez): • Authorizes creation of infrastructure and revitalization financing district • Reduces voter approval to issue debt to from 2/3 to 55% • Establishes the life of a district at 40 years (and debt with 30 year maturity) • Authorizes financing of projects in RDA project areas, former RDAs, and former military bases • May allow a city to dedicate a portion of its RPTTF funds to the district

  14. IFD Related Proposed Legislation AB2144 continued… • District formation not subject to voter approval if it is within a publicly owned former military base • Expands type of projects eligible for funding, including purchase of land and property for development purposes

  15. IFD Related Proposed Legislation AB2551 (Hueso): • Authorizes creation of an IFD in a “renewable energy zone” area (area with proposed development project(s) that would generate more than 50 megawatts of electricity using a renewable energy source. • Exempts formation of the district from voter approval

  16. IFD Related Proposed Legislation SB214 (Wolk): • Repeals voter approval requirement for the creation of an IFD • Extends the life of the district from 30 years to 40 years

  17. IFD Related Proposed Legislation • SB1156 (Steinberg): • Authorizes the formation of a “Sustainable Communities Investment Authority” to carry out community redevelopment law in a specified manner • Authorizes the Authority to receive tax increment funds if certain requirements are met • Requires independent financial and performance audits every 5 years

  18. IFD v. CRL Law

  19. Questions? Presented by: Juan R Perez County of San Diego Juan.perez@sdcounty.ca.gov (858) 694-2290

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