Bill Text: CA AB1199 | 2009-2010 | Regular Session | Chaptered
Bill Title: Infrastructure financing districts: City and County of
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Passed) 2010-09-30 - Chaptered by Secretary of State - Chapter 664, Statutes of 2010. [AB1199 Detail]
Download: California-2009-AB1199-Chaptered.html
BILL NUMBER: AB 1199 CHAPTERED
BILL TEXT
CHAPTER 664
FILED WITH SECRETARY OF STATE SEPTEMBER 30, 2010
APPROVED BY GOVERNOR SEPTEMBER 30, 2010
PASSED THE SENATE AUGUST 25, 2010
PASSED THE ASSEMBLY JANUARY 27, 2010
AMENDED IN ASSEMBLY JANUARY 4, 2010
AMENDED IN ASSEMBLY APRIL 13, 2009
INTRODUCED BY Assembly Member Ammiano
FEBRUARY 27, 2009
An act to repeal and add Section 53395.8 of the Government Code,
and to amend Section 96.1 of the Revenue and Taxation Code, relating
to infrastructure financing districts.
LEGISLATIVE COUNSEL'S DIGEST
AB 1199, Ammiano. Infrastructure financing districts: City and
County of San Francisco.
Existing law specifically authorizes the City and County of San
Francisco to create infrastructure financing districts, adopt
infrastructure financing plans for those districts, and issue bonds
financed by projected increases in ad valorem property taxes to fund
certain public facilities, pursuant to a specified procedure.
Existing property tax law establishes various procedures and
requirements with respect to the annual apportionment and allocation
of ad valorem property tax revenues, including increased revenues
from infrastructure financing districts.
This bill would recast these provisions authorizing the City and
County of San Francisco to create infrastructure financing districts
that include specified waterfront property. This bill would also
modify the procedures for San Francisco to adopt an infrastructure
financing plan, and allocate projected increases in ad valorem
property taxes to specified annual apportionments.
This bill would make legislative findings and declarations as to
the necessity of a special statute for City and County of San
Francisco.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The Legislature finds and declares all of the
following:
(a) Areas of San Francisco, including portions of the San
Francisco waterfront, are characterized by deteriorating conditions
that cannot be remedied by private investment alone, and require the
use of public financing mechanisms to finance the rectification of
deteriorating conditions.
(b) (1) The San Francisco waterfront, generally extending 7.5
miles from Fisherman's Wharf to Candlestick Point, is a valuable
public trust asset of the state and provides special maritime,
navigational, recreational, cultural, and historical benefits to the
people of the region and the state. The San Francisco waterfront
includes a 65-acre site known as Pier 70, which is the oldest
continuously operating shipyard on the West Coast. For over 150
years, some portion of this site has been in use for shipbuilding and
repair, steel production, and supporting heavy industrial uses.
Until 1967, the United States Department of Defense occupied and
controlled significant portions of Pier 70. In 2001, the Office of
Historic Preservation determined that Pier 70's approximately 40
historic buildings, structures, and features are eligible
collectively for listing on the National Register of Historic Places
as contributors to a Pier 70 historic district. Under the Burton Act
(Ch. 1333, Stats. 1968, as amended) and the Burton Act transfer
agreement, in 1969, the state conveyed the San Francisco waterfront
to the City and County of San Francisco, through its port, in trust
for the public and Burton Act trust purposes, subject to the
obligation on the part of the City and County of San Francisco to
assume fifty-five million dollars ($55,000,000) in state debt
obligations then existing relating to the waterfront properties.
Under the San Francisco Charter, the people of San Francisco charged
the Port of San Francisco with administration of the San Francisco
waterfront and the responsibility for discharging the preexisting
debt obligations. Since 1969, these preexisting debt obligations have
limited the port's ability to finance substantial investment in
public trust facilities within its jurisdiction, resulting in
deteriorating conditions along the San Francisco waterfront,
including, but not limited to, all of the following:
(A) Since 2002, the port's chief harbor engineer, who is
responsible for assessing threats to life safety due to the condition
of facilities within port jurisdiction, has conducted structural
assessments of the port's historic structures at Pier 70, that have
resulted in the condemnation of 11 buildings and load and use
restrictions in 14 other buildings at the site.
(B) The port's Pier 70 structures were built before the adoption
of seismic construction standards in the 1955 edition of the Uniform
Building Code, and are constructed on bay fill or bay mud in
locations designated by the United States Geological Survey as
seismic hazard areas. Many older port facilities may be unsafe during
a large seismic event due to the lack of seismic standards governing
their construction and the liquefaction risk associated with port
property.
(C) Pier 70 has been used for heavy industrial uses for more than
150 years and is adjacent to the Potrero powerplant. Pier 70 and
surrounding property are industrial brownfields known to be
contaminated by heavy metals, hydrocarbons, and other pollutants. The
historic buildings at Pier 70 will require significant investment to
abate hazardous materials prior to demolition or rehabilitation.
(D) The port's Pier 70 waterfront contains numerous deteriorating
piles that are the remnants of former pile-supported structures and
no longer serve a useful purpose.
(2) Beginning in the early 1990s, in response to economic and land
use needs of the port and as directed by the San Francisco
electorate, the port undertook a public planning process related to
the improvement and development of the San Francisco waterfront. This
process resulted in the port's adoption of a waterfront land use
plan in 1997, which identified Pier 70 as the most significant
mixed-use development opportunity in the port's southern waterfront.
(3) In 2006, pursuant to the San Francisco Administrative Code,
the port developed a capital plan identifying public facilities
necessary and convenient to the improvement, operation, and conduct
of the San Francisco waterfront. Among these public facilities are:
(A) seismic and life-safety improvements to existing buildings, (B)
rehabilitation, restoration, and preservation of certain historic
piers and other historic structures, (C) shoreline restoration and
structural repairs and improvements to piers, seawalls, wharves, and
other maritime facilities, (D) remediation of hazardous materials,
(E) removal of bay fill, (F) stormwater management facilities and
other utility infrastructure improvements, and (G) public open space
improvements, including those required by the San Francisco Bay
Conservation and Development Commission's San Francisco Waterfront
Special Area Plan. In 2008, the estimated cost to implement the port'
s capital plan was approximately one billion nine hundred million
dollars ($1,900,000,000), an amount far in excess of the revenues
projected to be available to the port for these purposes.
(4) From 2006 to 2008, inclusive, the port conducted a community
master planning process for the Pier 70 district. The master plan
calls for continued ship repair on approximately 15 acres of the
site, the nomination of the Pier 70 National Register Historic
District to the National Register of Historic Places, up to 3 million
square feet of compatible infill development, up to 20 acres of
waterfront open space, including a major new section of the San
Francisco Bay Trail, and a development phasing schedule and financing
plan that will allow the area to reunite with the surrounding
central waterfront. The port projects that the costs to rehabilitate
Pier 70, excluding costs associated with new development at the site,
will exceed $1 billion in 2008 dollars and will require significant
federal, state, and local funding.
(c) In November 2008, San Francisco voters approved an amendment
to the San Francisco Charter to provide revenues equal to up to 75
percent of projected new hotel and payroll tax revenues from
development in the Pier 70 area to fund historic preservation and
infrastructure costs of rehabilitating the Pier 70 area. The port
estimates that rehabilitation costs for the Pier 70 area will far
exceed the additional revenues provided by the charter measure.
(d) The Pier 70 area of the San Francisco waterfront is a valuable
public trust asset of the state that provides special maritime,
navigational, recreational, cultural, and historical benefits to the
people of the region and the state. Realizing the goals of the port
waterfront land use plan, the San Francisco Bay Conservation and
Development Commission special area plan, and the port capital plan
at Pier 70 is a matter of statewide significance, and rectifying the
deteriorating conditions along the San Francisco waterfront caused by
deferred maintenance since 1969 by providing a financing mechanism,
through the use of incremental property tax revenues, is a matter of
statewide importance that will further the purposes of both the
public trust and the Burton Act trust. Public facilities along the
San Francisco waterfront to be financed pursuant to the
infrastructure financing district law will increase public access to,
or use or enjoyment of, public trust lands and are, therefore,
facilities of statewide and communitywide significance.
(e) The City and County of San Francisco wants to establish one or
more infrastructure financing districts to finance public facilities
along the San Francisco waterfront through its port, including a
district in the Pier 70 area. Due to the extraordinary capital needs
of the port, it is the intent of the Legislature to provide the City
and County of San Francisco and its port the widest latitude, within
the framework of the infrastructure financing district law, to create
and operate infrastructure financing districts in the manner that
provides the optimal financing options to construct needed public
facilities on public trust waterfront lands in order to meet the
stated goals of statewide significance. In order to adapt the
provisions of Chapter 2.8 (commencing with Section 53395) of Part 1
of Division 2 of Title 5 of the Government Code, relating to
infrastructure financing districts, to these unique circumstances,
this special act is necessary.
SEC. 2. Section 53395.8 of the Government Code is repealed.
SEC. 3. Section 53395.8 is added to the Government Code, to read:
53395.8. (a) This section applies only to the City and County of
San Francisco, and to any waterfront district.
(b) In addition to the findings and declarations in Section 53395,
the Legislature further finds and declares that consolidating in a
single public agency the responsibility to administer waterfront
lands in San Francisco that are subject to the public trust and the
ability to capture property tax increment revenues to finance needed
public facilities in those areas will further the objectives of the
public trust and enjoyment of those trust lands by the people of the
state.
(c) For purposes of this section, the following terms have the
following meanings except as otherwise provided:
(1) "Affected taxing entity" means any governmental taxing agency,
except San Francisco and its local educational agencies, that levied
or had levied on its behalf a property tax on all or a portion of
the land located in the proposed district in the fiscal year prior to
the designation of the district, all or a portion of which the
district proposes to collect in the future under its infrastructure
financing plan.
(2) "Base year" means the fiscal year during which any
infrastructure financing plan adopted under this chapter becomes
effective.
(3) "Board" means the Board of Supervisors of the City and County
of San Francisco, which shall be the legislative body for any
district formed under this section.
(4) "Debt" means loans, advances, or other forms of indebtedness
and financial obligations, including, but not limited to, commercial
paper, variable rate demand notes, all moneys payable in relation to
the debt, and all debt service coverage requirements in any debt
instrument, in addition to the obligations specified in the
definition of "debt" in Section 53395.1.
(5) "District" means any district created under this chapter,
including any project area within a district.
(6) "ERAF" means the Educational Revenue Augmentation Fund.
(7) "ERAF-secured debt" means debt incurred to finance a Pier 70
district subject to a Pier 70 enhanced financing plan that is secured
by and will be repaid from the ERAF share.
(8) "ERAF share" means the county ERAF portion of incremental tax
revenue committed to a Pier 70 district under a Pier 70 enhanced
financing plan.
(9) "Local educational agencies" means, collectively, the San
Francisco Unified School District, the San Francisco Community
College District, and the San Francisco County Office of Education.
(10) "Mirant site" means the San Francisco waterfront land owned
by Mirant Corporation, on which it or its affiliate formerly operated
a coal gasification powerplant.
(11) "Pier 70 district" means a waterfront district that includes
65 acres of waterfront land in the area near Pier 70.
(12) "Pier 70 enhanced financing plan" means an infrastructure
district financing plan for a Pier 70 district that contains a
provision authorized under subparagraph (D) of paragraph (3) of
subdivision (g).
(13) "Port" means the Port of San Francisco.
(14) "Project area" means a defined area designated for
development within a waterfront district formed under this chapter in
accordance with subdivision (g).
(15) "Public facilities" means facilities and, where the context
requires, related services, authorized to be financed in any part by
a district formed under this chapter in accordance with subdivision
(g).
(16) "San Francisco" means the City and County of San Francisco.
For purposes of applying this chapter, San Francisco is a city.
(17) "Waterfront district" means a district formed under this
chapter on land under port jurisdiction along the San Francisco
waterfront.
(18) "Waterfront set aside" means the restricted funds required to
be set aside under clause (ii) of subparagraph (C) of paragraph (3)
of subdivision (g).
(d) In addition to the facilities and services authorized by
Section 53395.3, a waterfront district may finance any of the
following:
(1) Remediation of hazardous materials in, on, under, or around
any real or tangible property.
(2) Seismic and life-safety improvements to existing buildings.
(3) Rehabilitation, restoration, and preservation of structures,
buildings, or other facilities having special historical,
architectural, or aesthetic interest or value and that are listed on
the National Register of Historic Places, are eligible for listing on
the National Register of Historic Places individually or because of
their location within an eligible registered historic district, or
are listed on a state or local register of historic landmarks.
(4) Structural repairs and improvements to piers, seawalls, and
wharves.
(5) Removal of bay fill.
(6) Stormwater management facilities, other utility
infrastructure, or public open-space improvements.
(7) Shoreline restoration.
(8) Other repairs and improvements to maritime facilities.
(9) Planning and design work that is directly related to any
public facilities authorized to be financed by a waterfront district.
(e) A waterfront district may include, and finance public
facilities on, tidelands and submerged lands, including filled or
unfilled lands, subject to the public trust for commerce, navigation,
and fisheries, and the applicable statutory trust grant or grants.
Public facilities located on tidelands and submerged lands shall
serve and promote uses and purposes consistent with the public trust
and applicable statutory trust grants. Public facilities that
increase access to, or the use or enjoyment of, public trust lands
will be deemed to be facilities of communitywide significance that
provide significant benefits to an area larger than the area of the
district.
(f) Public facilities financed by a waterfront district shall be
public trust assets subject to the administration and control of the
port, except for the following:
(1) Utility infrastructure and public transportation facilities,
except maritime transportation facilities that are administered and
controlled by another entity under an agreement with the port.
(2) Public facilities on land located in a previously formed
waterfront district that the port subsequently leases, sells, or
otherwise transfers to any person free of the public trust, the
Burton Act trust, and any additional restrictions on use or
alienability created by the Burton Act transfer agreement, provided
that the State Lands Commission has concurred in the lifting of trust
restrictions on the transferred land and that the transferred land
will remain in and subject to the district.
(g) For a waterfront district, the requirements of this
subdivision supplant and replace the provisions of Sections 53395.10
to 53395.25, inclusive. The board may adopt or amend one or more
infrastructure financing plans for districts along the San Francisco
waterfront according to the procedures in this section. A district
may be divided into project areas, each of which may be subject to
distinct time limitations established under this subdivision.
(1) The board shall initiate proceedings for the establishment of
a district by adopting a resolution of intention to establish the
proposed district that does all of the following:
(A) States an infrastructure financing district is proposed to be
established and describes the boundaries of the proposed district.
The boundaries may be described by reference to a map on file in the
office of the clerk of the board.
(B) States the type of public facilities proposed to be financed
by the district.
(C) States that incremental property tax revenue from San
Francisco and some or all affected taxing entities within the
district, but none of the local educational agencies, may be used to
finance these public facilities.
(D) Directs the executive director of the port, or an appropriate
official designated by the executive director, to prepare a proposed
infrastructure financing plan.
(2) The board shall direct the city clerk to mail a copy of the
resolution of intention to any affected taxing entities.
(3) The proposed infrastructure financing plan shall be consistent
with the general plan of San Francisco, as amended from time to
time, and shall include all of the following:
(A) A map and legal description of the proposed district, which
may include all or a portion of the district designated by the board
in its resolution of intention.
(B) A description of the public improvements and facilities
required to serve the development proposed in the district, including
those to be provided by the private sector, those to be provided by
governmental entities without assistance under this chapter, those
public facilities to be financed with assistance from the proposed
district, and those to be provided jointly. The description shall
include the proposed location, timing, and projected costs of the
public improvements and facilities.
(C) A financing section that shall contain all of the following:
(i) A provision that specifies the maximum portion of the
incremental tax revenue of San Francisco and of any affected taxing
entity proposed to be committed to the district, and affirms that the
plan will not allocate any portion of the incremental tax revenue of
the local educational agencies to the district.
(ii) Limitations on the use of levied taxes allocated to and
collected by the district that provide that incremental tax revenues
allocated to a district must be used within the district for purposes
authorized under this section, and that not less than 20 percent of
the amount allocated to a district shall be set aside to be expended
solely on shoreline restoration, removal of bay fill, or waterfront
public access to or environmental remediation of the San Francisco
waterfront.
(iii) A projection of the amount of incremental tax revenues
expected to be received by the district, assuming a period of 45
years from the base year of the infrastructure financing plan.
(iv) Projected sources of financing for the public facilities to
be assisted by the district, including debt to be repaid with
incremental tax revenues, projected revenues from future leases,
sales, or other transfers of any interest in land within the
district, and any other legally available sources of funds.
(v) A limitation on the number of dollars of levied taxes that may
be divided and allocated to the district. Taxes shall not be divided
or be allocated to the district beyond this limitation, except by
amendment of the infrastructure financing plan pursuant to the
procedures in this subdivision.
(vi) A date on which the effectiveness of the infrastructure
financing plan and all tax allocations to the district will end and a
time limit on the district's authority to repay indebtedness with
incremental tax revenues received under this chapter, not to exceed
45 years from the date of the board's resolution of intent to issue
bonds to be repaid with incremental tax revenues under this chapter.
After the time limits established under this subparagraph, a district
shall not receive incremental tax revenues under this chapter.
(vii) An analysis of the costs to San Francisco for providing
facilities and services to the district while the district is being
developed and after the district is developed, and of the taxes,
fees, charges, and other revenues expected to be received by San
Francisco as a result of expected development in the district.
(viii) An analysis of the projected fiscal impact of the district
and the associated development upon any affected taxing entity. If no
affected taxing entities exist within the district because the plan
does not provide for collection by the district of any portion of
property tax revenues allocated to any taxing entity other than San
Francisco, the district has no obligation to any other taxing entity
under this subdivision.
(ix) A statement that the district will maintain accounting
procedures in accordance, and otherwise comply, with Section 6306 of
the Public Resources Code for the term of the plan.
(D) For a Pier 70 district only, the Pier 70 enhanced financing
plan may contain a provision meeting the requirements of Section
53396 that allocates a portion of the incremental tax revenue of San
Francisco and of other designated affected taxing entities to the
Pier 70 district.
The portion of incremental tax revenue of San Francisco to be
allocated to the Pier 70 district must be equal to the portion of the
incremental tax revenue of the county ERAF proposed to be committed
to the Pier 70 district. In addition to all other requirements under
this section, a Pier 70 district shall also be subject to the
following additional limitations:
(i) A Pier 70 district subject to a Pier 70 enhanced financing
plan shall not be formed and become effective for at least three full
fiscal years following the effective date of this section.
(ii) Any Pier 70 enhanced financing plan shall contain all of the
following:
(I) A time limit on new ERAF-secured debt to finance the district,
which may not exceed 20 fiscal years from the fiscal year in which
any Pier 70 district subject to a Pier 70 enhanced financing plan
first issues debt. The ERAF-secured debt may be repaid over the
period of time ending on the time limit established under clause (vi)
of subparagraph (C). This time limit on new ERAF-secured debt shall
not prevent a Pier 70 district from subsequently refinancing,
refunding, or restructuring ERAF-secured debt if the debt is not
increased and the time during which the debt is to be repaid is not
extended beyond the time limit established under clause (vi) of
subparagraph (C).
(II) A statement that the Pier 70 district shall be subject to a
limitation on the number of dollars of the ERAF share that may be
divided and allocated to the Pier 70 district pursuant to the Pier 70
enhanced financing plan, including any amendments to the plan, which
shall be established in consultation with the county auditor. This
limitation and a schedule specifying the amount of the ERAF share
that must be divided and allocated to the district in each succeeding
fiscal year until all ERAF-secured debt has been paid shall be
included in the statement of indebtedness that the Pier 70 district
files for the 19th fiscal year after the fiscal year in which any
ERAF-secured debt is first issued. The ERAF share shall not be
divided and shall not be allocated to the Pier 70 district beyond
that limitation.
(III) The limitations established by subclauses (I) and (II) may
be amended only by amendment of this section. When the ERAF-secured
debt, if any, has been paid, all moneys thereafter allocated to the
ERAF share shall be paid into ERAF as taxes on all other property are
paid. In addition, beginning in the 21st fiscal year after the
fiscal year in which ERAF-secured debt is first issued, any portion
of the ERAF share in excess of the amount required to meet the Pier
70 district's ERAF-secured debt service obligations shall be paid
into ERAF.
(4) The proposed infrastructure financing plan shall be mailed to
each affected taxing entity for review, together with any report
required by the California Environmental Quality Act (Division 13
(commencing with Section 21000) of the Public Resources Code) that
pertains to the proposed public facilities and any proposed
development project for which the public facilities are needed, and
shall be made available for public inspection. The report also shall
be sent to the San Francisco Planning Department and the board.
(5) Except as provided in subdivision (i), the board shall not
enact a resolution proposing formation of a district and providing
for the division of taxes of any affected taxing entities for use in
the Pier 70 district as set forth in the proposed infrastructure
financing plan unless a resolution approving the plan has been
adopted by the governing body of each affected taxing entity that is
proposed to be subject to division of taxes as set forth in the
proposed infrastructure financing plan, and that resolution has been
filed with the board at or prior to the time of the hearing. A
resolution approving the plan adopted by the governing body of an
affected taxing entity shall be deemed the affected taxing entity's
agreement to participate in the plan for the purposes of Section
53395.19.
(6) If the governing body of an affected taxing entity has not
approved the infrastructure financing plan before the board considers
the plan, the board may amend the infrastructure financing plan to
remove the allocation of the tax revenues of the nonconsenting
affected taxing entity. If a plan is so amended, the plan also shall
be amended to provide that San Francisco will allocate to the Pier 70
district funds equal on a dollar-for-dollar basis to the tax
revenues that the Pier 70 district would have received from the
allocation of tax revenues of the affected taxing entity that is
removed from the plan.
(7) The board shall hold a public hearing regarding the
infrastructure financing plan that shall be scheduled on a date no
earlier than 60 days after the plan has been sent to each affected
taxing entity, or in the absence of any affected taxing entities, no
earlier than 30 days after the plan has been lodged with the clerk of
the board. Notice of the public hearing must be published not less
than once a week for four successive weeks in a newspaper designated
by the board for the publication of official notices in San
Francisco, or if the board no longer designates a newspaper for the
publication of official notices, a newspaper of general circulation
serving primarily San Francisco residents. The notice shall state
that the district will be established to finance public facilities,
briefly describe the public facilities and 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 previous proceedings, may appear before the board and object to
the adoption of the proposed infrastructure financing plan by the
board.
(8) At the hour set in the required notices, the board shall
proceed to hear and pass upon all written and oral objections. The
hearing may be continued from time to time. The board shall consider
any recommendations of affected taxing entities, and all evidence and
testimony for and against the adoption of the infrastructure
financing plan.
(9) No election will be required to form the district, and at the
conclusion of the hearing, the board may adopt an ordinance adopting
the infrastructure financing plan, as drafted or as modified by the
board, or it may abandon the proceedings.
(10) Any public or private owner of land that is not within an
existing district, but that has any boundary line contiguous to a
boundary of the waterfront district, may petition the board for
inclusion of the land in the waterfront district without an election.
As a condition to inclusion of its land in the waterfront district,
the petitioning landowner shall acknowledge and agree that any
portion of the land within 100 feet of the San Francisco Bay
Conservation and Development Commission shoreline (shoreline band)
will include contiguous public access along the length of the
shoreline band, improved and maintained to standards equal to
adjacent waterfront public access ways on public land, as certified
by the San Francisco Bay Conservation and Development Commission.
Nothing in this section is intended to affect or limit the authority
of the San Francisco Bay Conservation and Development Commission
pursuant to Chapter 1 (commencing with Section 66600) of Title 7.2,
or any other law. This procedure will apply to any petition to
include the Mirant site in the Pier 70 district, but the board may
amend the Pier 70 financing plan to include the Mirant site in the
Pier 70 district only after the Director of Finance's approval.
(11) The ordinance creating a district and adopting or amending an
infrastructure financing plan shall establish the base year for the
district. The board may amend an infrastructure financing plan by
ordinance to divide an established district into one or more project
areas, to reduce the district area, or, to expand a waterfront
district to include the petitioning landowner's land in the district
in accordance with the board's established procedures. Any ordinance
adopting or amending an infrastructure financing plan will be deemed
an ordinance adopted for the purposes of Section 53395.23.
(h) (1) All the amounts calculated under this subdivision shall be
calculated after deducting the waterfront set-aside from the total
amount of tax increment funds allocated to a district in the
applicable fiscal year. The payments made under this subdivision to
the affected taxing entities shall be allocated among the affected
taxing entities in proportion to the percentage share of property
taxes each affected taxing entity receives during the fiscal year the
funds are allocated. The percentage share shall be determined
without regard to any amounts allocated to a city, county, or city
and county under Sections 97.68 and 97.70 of the Revenue and Taxation
Code.
(2) (A) Prior to incurring any debt, except loans or advances from
San Francisco, a district may subordinate to the debt the amount
required to be paid to an affected taxing entity under this
subdivision, if any, provided the affected taxing entity has approved
these subordinations as provided in this paragraph.
(B) At the time the district requests an affected taxing entity to
subordinate the amount to be paid to it, the district shall provide
the affected taxing entity with substantial evidence that sufficient
funds will be available to pay when due both the debt service on the
debt and the payments to the affected taxing entity required under
this subdivision.
(C) Within 45 days after receipt of the district's request, the
affected taxing entity shall approve or disapprove the request for
subordination. An affected taxing entity may disapprove a request for
subordination only if it finds, based upon substantial evidence,
that the district will not be able to pay when due the debt payments
and the amount required to be paid to the affected taxing entity. If
the affected taxing entity does not act within 45 days after receipt
of the district's request, the request to subordinate shall be deemed
approved and its deemed approval shall be final and conclusive.
(3) The Legislature finds and declares all of the following:
(A) The payments to be made under this subdivision are necessary
in order to alleviate the financial burden and detriment that
affected taxing entities may incur as a result of the adoption of an
infrastructure financing plan, and payments made under this
subdivision will benefit the district.
(B) The payments to be made under this subdivision are the
exclusive payments that are required to be made by a district to
affected taxing entities during the term of an infrastructure
financing plan.
(4) Nothing in this section requires a district, either directly
or indirectly, as a measure to mitigate a significant environmental
effect or as part of any settlement agreement or judgment brought in
any action to contest the validity of a district under Section
53395.6, to make any other payments to affected taxing entities, or
to pay for public facilities that will be owned or leased to an
affected taxing entity.
(i) The portion of taxes required to be allocated to the Pier 70
district under a duly adopted infrastructure financing plan shall be
allocated and paid to the district by the county auditor or officer
responsible for the payment of taxes into the funds of the respective
taxing entities under the procedure contained in this subdivision.
If the approved plan allocates to the Pier 70 district 100 percent of
the incremental tax revenue of San Francisco, then the district
shall not make a payment to ERAF, but if the plan allocates less than
100 percent of the incremental tax revenue of San Francisco to the
Pier 70 district, then the district shall pay a proportionate share
of incremental tax revenue into ERAF.
(1) No later than October 1 of each year, for each district for
which the infrastructure financing plan provides for the division of
taxes, the district shall file with the county auditor or officer a
statement of indebtedness and a reconciliation statement for the
previous fiscal year certified by the chief financial officer of the
district.
(2) Each statement of indebtedness shall contain all of the
following:
(A) For each debt the district has incurred or entered into, all
of the following:
(i) The date the district incurred or entered into the debt.
(ii) The principal amount, term, purpose, interest rate, and total
interest payable over the term of the debt.
(iii) The principal amount and interest due in the fiscal year in
which the statement is filed.
(iv) The total amount of principal and interest remaining to be
paid over the term of the debt.
(B) The sum of the principal and interest due on all debts in the
fiscal year in which the statement is filed.
(C) The sum of principal and interest remaining to be paid on all
debts.
(D) The available revenues as of the end of the previous fiscal
year.
(3) The district may estimate the amount of principal or interest,
the interest rate, or term of any debt if the nature of the debt is
such that the amount of principal or interest, the interest rate or
term cannot be precisely determined. The district may list on a
statement of indebtedness any debt incurred or entered into on or
before the date the statement is filed.
(4) Each reconciliation statement shall include all of the
following:
(A) A list of all debts listed on the previous year's statement of
indebtedness, if any.
(B) A list of all debts not listed on the previous year's
statement of indebtedness, but incurred or entered into in the
previous year and paid in whole or in part from incremental tax
revenue received by the district. This listing may aggregate into a
single item debts incurred or entered into in the previous year for a
particular purpose, such as relocation expenses, administrative
expenses, consultant expenses, or remediation of hazardous materials.
(C) For each debt described in subparagraph (A) or (B), all of the
following shall be included:
(i) The total amount of principal and interest remaining to be
paid as of the later of the beginning of the previous year or the
date the debt was incurred or entered into.
(ii) Any increases or additions to the debt occurring during the
previous year.
(iii) The amount paid on the debt in the previous year from
incremental tax revenue received by the district.
(iv) The amount paid on the debt in the previous year from revenue
other than incremental tax revenue received by the district.
(v) The total amount of principal and interest remaining to be
paid as of the end of the previous fiscal year.
(D) The available revenues of the district as of the beginning of
the previous fiscal year.
(E) The amount of incremental tax revenue received by the district
in the previous fiscal year.
(F) The amount of available revenue received by the district in
the previous fiscal year other than incremental tax revenue.
(G) The sum of the amounts paid on all debts from sources other
than incremental tax revenue, to the extent that the amounts are not
included as available revenues under subparagraph (F).
(H) The sum of the amounts specified in subparagraphs (D) to (G),
inclusive.
(I) The sum of the amounts specified in clauses (iii) and (iv) of
subparagraph (C) of paragraph (4).
(J) The amount determined by subtracting the amount determined
under subparagraph (I) from the amount determined under subparagraph
(H). The amount determined under this paragraph shall be the
available revenues as of the end of the previous fiscal year to be
reported in the statement of indebtedness.
(5) For the purposes of this paragraph, available revenues shall
include all cash or cash equivalents held by the district that were
received by the district under subparagraph (D) of paragraph (3) of
subdivision (g) and all cash or cash equivalents held by the district
that are irrevocably pledged or restricted to payment of a debt that
the district has listed on a statement of indebtedness. In no event
shall available revenues include funds allocated to the waterfront
set aside.
(6) For the purposes of this subdivision: (A) the amount a
district is required to deposit into the waterfront set aside shall
constitute an indebtedness of the district, (B) no debt that a
district intends to pay from the waterfront set aside shall be listed
on a statement of indebtedness or reconciliation statement as a debt
of the district, and (C) any statutorily authorized deficit in or
borrowing from funds in the waterfront set aside shall constitute an
indebtedness of the district.
(7) The county auditor or officer shall allocate and pay, at the
same time or times as the payment of taxes into the funds of the
respective taxing agencies of the county, the portion of incremental
tax revenues allocated to each district under the infrastructure
financing plan. The amount allocated and paid shall not exceed the
amount of the district's remaining debt obligations, as determined
under subparagraph (C) of paragraph (2), minus the amount of
available revenues as of the end of the previous fiscal year, as
determined under subparagraph (D) of paragraph (2).
(8) The statement of indebtedness constitutes prima facie evidence
of the debts of the district.
(A) If the county auditor or other officer disputes the amount of
the district's debts as shown on the statement of indebtedness, the
county auditor or other officer, within 30 days after receipt of the
statement, shall give written notice to the district thereof.
(B) The district, within 30 days after receipt of notice under
subparagraph (A), shall submit any further information it deems
appropriate to substantiate the amount of any debt that has been
disputed. If the county auditor or other officer still disputes the
amount of debt, final written notice of that dispute shall be given
to the district, and the amount disputed may be withheld from
allocation and payment to the district as otherwise required by
paragraph (7). In that event, the auditor or other officer shall
bring an action in the superior court for declaratory relief to
determine the matter no later than 90 days after the date of the
final notice.
(C) In any court action brought under this paragraph, the issue
shall involve only the amount of debt, and not the validity of any
contract or debt instrument or any expenditures pursuant thereto.
Payments to a trustee under a bond resolution or indenture of any
kind or payments to a public agency in connection with payments by
that public agency under a lease or bond issue shall not be disputed
in any action under this paragraph. The matter shall be set for trial
at the earliest possible date and shall take precedence over all
other cases except older matters of the same character. Unless an
action is brought within the time provided for herein, the auditor or
other officer shall allocate and pay the amount shown on the
statement of indebtedness as provided in paragraph (7).
(D) Nothing in this subdivision shall be construed to permit a
challenge to or attack on matters precluded from challenge or attack
by reason of Sections 53395.6 and 53395.7. However, nothing in this
subdivision shall be construed to deny a remedy against the district
otherwise provided by law.
(E) The Controller shall prescribe uniform forms consistent with
this subdivision for a district's statement of indebtedness and
reconciliation statement. In preparing these forms, the Controller
shall obtain the input of the San Francisco City Controller, the San
Francisco Tax Collector, and the port.
(F) For the purposes of this subdivision, a fiscal year shall be a
year that begins on July 1 and ends the following June 30.
(j) (1) Prior to the adoption by the board of an infrastructure
financing plan providing for tax increment financing under
subparagraph (D) of paragraph (3) of subdivision (g), any affected
taxing entity may elect to be allocated, and every local educational
agency shall be allocated, all or any portion of the tax revenues
allocated to the district under subparagraph (D) of paragraph (3) of
subdivision (g) attributable to increases in the rate of tax imposed
for the benefit of the taxing entity which levy occurs after the tax
year in which the ordinance adopting the infrastructure financing
plan becomes effective.
(2) The governing body of any affected taxing entity electing to
receive allocation of taxes under this subdivision shall adopt a
resolution to that effect and transmit the same, prior to the
adoption of the infrastructure financing plan, to (A) the board, (B)
the district, and (C) the official or officials performing the
functions of levying and collecting taxes for the affected taxing
entity. Upon receipt by the official or officials of the resolution,
allocation of taxes under this section to the affected taxing entity
shall be made at the time or times allocations are made under
subdivision (a) of Section 33670 of the Health and Safety Code.
(3) An affected taxing entity, at any time after the adoption of
the resolution, may elect not to receive all or any portion of the
additional allocation of taxes under this section by rescinding the
resolution or by amending the same, as the case may be, and giving
notice thereof to the board, the district, and the official or
officials performing the functions of levying and collecting taxes
for the affected taxing entity. After receipt of a notice by the
official or officials that an affected taxing entity has elected not
to receive all or a portion of the additional allocation of taxes by
rescission or amendment of the resolution, any allocation of taxes to
the affected taxing entity required to be made under this section
shall not thereafter be made but shall be allocated to the district.
After receipt of a notice by the official or officials that an
affected taxing entity has elected to receive additional tax revenues
attributable to only a portion of the increases in the rate of tax,
only that portion of the tax revenues shall thereafter be allocated
to the affected taxing entity, and the remaining portion thereof
shall be allocated to the district.
(k) This section implements and fulfills the intent of Article 2
(commencing with Section 53395.10) and of Article XIII B and Section
16 of Article XVI of the California Constitution. The allocation and
payment to a district of the portion of taxes specified in
subparagraph (D) of paragraph (3) of subdivision (g) for the purpose
of paying principal of, or interest on, loans, advances, or
indebtedness incurred for facilities under this section shall not be
deemed the receipt by a district of proceeds of taxes levied by or on
behalf of the district within the meaning or for the purposes of
Article XIII B of the California Constitution, nor shall such portion
of taxes be deemed receipt of proceeds of taxes by, or an
appropriation subject to limitation of, any other public body within
the meaning or for purposes of Article XIII B of the California
Constitution or any statutory provision enacted in implementation of
Article XIII B. The allocation and payment to a district of this
portion of taxes shall not be deemed the appropriation by a district
of proceeds of taxes levied by or on behalf of a district within the
meaning or for purposes of Article XIII B of the California
Constitution.
SEC. 4. Section 96.1 of the Revenue and Taxation Code is amended
to read:
96.1. (a) Except as otherwise provided in Article 3 (commencing
with Section 97), and in Article 4 (commencing with Section 98), for
the 1980-81 fiscal year and each fiscal year thereafter, property tax
revenues shall be apportioned to each jurisdiction pursuant to this
section and Section 96.2 by the county auditor, subject to allocation
and payment of funds as provided for in subdivision (b) of Section
33670 of the Health and Safety Code and subparagraph (D) of paragraph
(3) of subdivision (g) of Section 53395.8 of the Government Code, to
each jurisdiction in the following manner:
(1) For each tax rate area, each jurisdiction shall be allocated
an amount of property tax revenue equal to the amount of property tax
revenue allocated pursuant to this chapter to each jurisdiction in
the prior fiscal year, modified by any adjustments required by
Section 99 or 99.02.
(2) The difference between the total amount of property tax
revenue and the amounts allocated pursuant to paragraph (1) shall be
allocated pursuant to Section 96.5, and shall be known as the "annual
tax increment."
(3) For purposes of this section, the amount of property tax
revenue referred to in paragraph (1) shall not include amounts
generated by the increased assessments under Chapter 3.5 (commencing
with Section 75).
(b) Any allocation of property tax revenue that was subjected to
a prior completed audit by the Controller, pursuant to the
requirements of Section 12468 of the Government Code, where all
findings have been resolved, shall be deemed correct.
(c) (1) Guidelines for legislation implementation issued and
determined necessary by the State Association of County Auditors, and
when adopted as regulations by either the Controller or the
Department of Finance pursuant to Chapter 3.5 (commencing with
Section 11340) of Part 1 of Division 3 of Title 2 of the Government
Code, shall be considered an authoritative source deemed correct
until some future clarification by legislation or court decision.
(2) If a county auditor knowingly does not follow the guidelines
referred to in paragraph (1), that county auditor shall inform the
Controller of the reason or reasons for not following the guidelines.
If the Controller disagrees with the stated reason or reasons for
not following the guidelines, the provisions of paragraph (3) do not
apply.
(3) If, by audit begun on or after July 1, 2001, or discovery by
an entity on or after July 1, 2001, it is determined that an
allocation method is required to be adjusted and a reallocation is
required for previous fiscal years, the cumulative reallocation or
adjustment may not exceed 1 percent of the total amount levied at a
1-percent rate of the current year's original secured tax roll. The
reallocation shall be completed in equal increments within the
following three fiscal years, or as negotiated with the Controller in
the case of reallocation to the Educational Revenue Augmentation
Fund or school entities.
(4) If it is determined that an allocation method is required to
be adjusted as provided in paragraph (3), the county auditor shall,
in the fiscal year following the fiscal year in which this
determination is made, correct the allocation method in accordance
with statute.
SEC. 5. The Legislature finds and declares that a special law is
necessary and that a general law cannot be made applicable within the
meaning of Section 16 of Article IV of the California Constitution
because of the unique circumstances of the City and County of San
Francisco. The facts constituting the special circumstances are:
areas of San Francisco, including certain portions of the San
Francisco waterfront, are characterized by deteriorating conditions
that cannot be remedied by private investment alone, and require the
use of public financing mechanisms to finance the rectification of
deteriorating conditions.
