Property Taxes

AB 741 (Brown) – Oppose
As Introduced on February 21, 2013

AB 741, by Assembly Member Cheryl Brown, would reallocate property taxes from counties to cities.

The bill attempts to alleviate financial difficulties some cities with relatively low property tax shares are experiencing, in particular those cities that relied on redevelopment funds to support city operations.

The author’s office estimates that the bill would affect about 200 cities, or about 40 percent of all cities in California. If true, this bill would represent a monumental shift of property taxes from counties to cities.

CSAC will continue to talk with the author’s office, the bill’s proponents, and counties to analyze the specific effects of the bill.

In the meantime, we encourage all counties to examine AB 741 closely. Please contact us to let us know what AB 741 would mean for your county, and share any concerns with the author and your own legislative delegation.

Redevelopment

AB 564 (Mullin) – Watch
As Introduced on February 20, 2013

AB 564, by Assembly Member Kevin Mullin, would explicitly prohibit the Department of Finance from modifying or reversing any enforceable obligation after the effective date of the oversight board’s approval. It would also prohibit the Department from modifying or reversing any transfer or liquidation of property that is consistent with an approved long-range asset plan.

AB 981 (Bloom) – Request for Comment
As Introduced on February 25, 2013

AB 981, by Assembly Member Richard Bloom, would allow successor agencies and successor housing entities to use the proceeds of bonds issued prior to June 28, 2011. Current law sets that deadline at January 1, 2011.

After Governor Brown made his proposal to dissolve redevelopment agencies as part of his budget proposal in January of 2011, some redevelopment agencies quickly went to market, in some cases with extraordinarily large bond sales. The final version of the dissolution legislation disallowed the use of the proceeds from those sales.

AB 1080 (Alejo) – Request for Comment
As Introduced on February 22, 2013

AB 1080, by Assembly Member Luis Alejo, would essentially revive redevelopment. The bill would make some changes to the prior system, such as making changes to the definition of blight and making a minority of the governing board members public members.

Importantly, AB 1080 would require a resolution from taxing entities before their property tax increment is used for the redevelopment purposes. However, it does not include all the safeguards counties have requested from previous proposals.

AB 1320 (Bloom) – Request for Comment
As Introduced on February 22, 2013

AB 1320, by Assembly Member Richard Bloom, would require that passthrough agreements continue to be paid past the time that a successor agency pays off its debt and would otherwise be required to dissolve.

While many taxing entities received some level of passthroughs according to statute, some jurisdictions negotiated passthroughs according to specific terms and at specific rates. The dissolution of redevelopment agencies has put these negotiated passthroughs in an uncertain position. AB 1320 would clarify their effectiveness.

Infrastructure Financing Districts

AB 229 (Speaker Pérez) – Request for Comment
As Introduced on February 15, 2013

AB 229, by Assembly Speaker John Pérez, would expand the authorized uses of infrastructure financing districts significantly to include, among other things, the acquisition, construction, or repair of housing or commercial or industrial structures. It also authorizes the use of district funds to implement sustainable communities strategy pursuant to SB 375.

Infrastructure financing districts have long been authorized by law, but rarely used. They rely on tax increment financing, but unlike redevelopment project areas, require the consent of all taxing entities whose property taxes it diverts.

Recent years have seen several attempts to revise infrastructure financing districts, especially since the demise of redevelopment. AB 229 is a reintroduction of last year’s AB 2144, also by the Speaker. The Governor vetoed it, calling it premature and expressing concern that cities would focus their efforts on the new tools the bill would provide, diverting attention from winding down redevelopment.

AB 662 (Atkins) – Watch
As Introduced on February 22, 2013

AB 662, by Assembly Member Toni Atkins, would allow infrastructure financing districts to include portions of redevelopment project areas. Before the dissolution of redevelopment agencies, this prohibition was in place to prohibit the overlap of multiple districts that rely on tax increment financing.

AB 690 (Campos) – Request for Comment
As Introduced on February 21, 2013

AB 690, by Assembly Member Nora Campos, would recast infrastructure financing districts to include some aspects of job creation and retention, allowing districts to be created only in areas of high unemployment. It would reduce the vote threshold for creating a district to 55% (from its current 2/3). In the course of financing the infrastructure projects districts may already finance, it would require the districts to create at least ten prevailing wage jobs per $1 million invested.