February 8, 2008
Government Finance and Operations
For more information, contact Jean Hurst at 916/327-7500, ext. 515, or jhurst@counties.org, or Geoffrey Neill at 916/327-7500, ext. 567, or gneill@counties.org.
Board of Equalization Defers “Community Benefit” Expansion Decision
On February 1, the Board of Equalization deferred until their next meeting a vote to significantly expand the “community benefit” property tax exemption. Currently, the exemption is only available to charitable organizations that primarily benefit Californians; the expanded exemption would include any charitable organization, regardless of where the charitable benefit is realized. The board deferred their decision so that BOE staff could estimate the fiscal impact of the change.
You can read the two letters CSAC sent on this issue here (November 1, to BOE staff) and here (January 30, to board members).
Bonds
AB 1836 (Feuer) – Request for Comment
Assembly Member Mike Feuer recently introduced AB 1836, which would remove voter approval requirements for infrastructure financing districts. Infrastructure financing districts can generally be used by counties and cities to fund purchase, construction, improvement, expansion, seismic retrofit, or rehabilitation, including planning and design, of tangible property with an estimated life of at least 15 years that have communitywide (larger than the district) significance. Such a district cannot include any portion of a redevelopment project area.
These districts are funded with tax-increment financing, which can be in any proportion that the agency creating the district desires (i.e. a district created by a county can take a larger portion of a city's increment than of the overlapping special districts'), and requires supporting resolutions from all affected taxing entities.
The creation of these districts, and the approval of any bonds issued by these districts, requires a 2/3 vote of the landowners within its bounds. The proposed bill would delete the requirement for voter approval. It would also delete the intent (though not requirement) that the districts be substantially undeveloped.
Do counties or cities use these districts very often? Would they become more common if the voter approval requirements were deleted? Ought there be voter approval for the formation of these districts? After all, if all financially affected jurisdictions agree to jointly use their property tax increment to fund infrastructure projects, why should it also require 2/3-voter approval? What about for approval of bonds backed by these districts' revenues?
Please submit your comments about this bill to Jean Hurst or Geoffrey Neill at jhurst@counties.org or gneill@counties.org, or call them at 916/327-7500 ext. 515 or 567.
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