In a move that should make successor agencies to redevelopment agencies happy, a new law was passed and approved by the Governor on February 18, 2014 (AB 471) that, among other things, amends Section 53395.4 of the California Government Code to allow infrastructure financing districts to finance a project or portion of a project located within a redevelopment project area or former redevelopment project area.
Infrastructure financing district law now provides a mechanism to finance projects that would have otherwise been financed by redevelopment agencies but for their elimination. Cities or counties (which generally act as the successor agency, in charge of implementing the dissolution of redevelopment agencies), can now form a infrastructure financing district over a redevelopment project area to finance redevelopment projects that were not yet completed prior to the dissolution of redevelopment agencies.
Section 53395.4(c) states: “A district may finance a project or portion of a project that is located in, or overlaps with, a redevelopment project area. The successor agency to the former redevelopment agency shall receive a finding of completion, as defined in Section 34179.7 of the Health and Safety Code, prior to the district financing any project or portion of a project under this subdivision.” The debt or obligation created under Section 53395.4(c) will be subordinate to an enforceable obligation of the former redevelopment agency.
AB 471 did not amend the formation or bond issuance process for infrastructure financing districts. The formation of the infrastructure financing district and the issuance of bonds must be approved by the two-thirds vote of qualified electors (unless the vote is a landowners vote, if there are fewer than 12 registered voters). The newly formed infrastructure financing district can issue bonds to pay for real or other intangible property with an estimated useful life of 15 years or longer and certain public capital facilities of communitywide significance and such bonds will be secured by any increase in property tax revenue (assuming taxing entity consent) over the assessed value of the property within the infrastructure financing district.
AB 471 is effective immediately.