AB417 - Local finance: enhanced infrastructure financing districts: community revitalization and investment authorities.

Assembly Bill No. 417 CHAPTER 260 An act to amend Sections 53398.52, 53398.66, 53398.68, 62001, and 62004 of, and to add Sections 62004.5 and 62004.6 to, the Government Code, relating to local government. [ Approved by Governor October 03, 2025. Filed with Secretary of State October 03, 2025. ] LEGISLATIVE COUNSEL'S DIGEST AB 417, Carrillo. Local finance: enhanced infrastructure financing districts: community revitalization and investment authorities. (1) Existing law authorizes the legislative body of a city or a county to designate a proposed enhanced infrastructure financing district to finance public capital facilities or other specified projects, including acquisition, construction, or repair of commercial structures by the small business occupant of such structures, if such acquisition, construction, or repair is for purposes of fostering economic recovery from the COVID-19 pandemic, as specified, with a governing body referred to as the public financing authority, by adopting a resolution of intention to establish the proposed district. This bill would revise these provisions to instead authorize the designation of a proposed enhanced infrastructure financing district to finance capital facilities or other specified projects for the acquisition, construction, or repair of commercial structures by the small business occupant of such structures, as described above, if such acquisition, construction, or repair is for purposes of fostering economic recovery of a community, as specified. Existing law requires the public financing authority of an enhanced infrastructure financing district to hold a meeting and 3 public hearings on a proposed infrastructure financing plan, as provided. Existing law requires the public financing authority to review the enhanced infrastructure financing plan at least annually and to make any amendments, as specified. Existing law authorizes amendments to an approved infrastructure financing plan, as described, subject to approval by a majority vote of the governing board at a public hearing held following the provision of a 30 day mailed notice, as described. Existing law requires amendments that propose the increase of the limit of the total number of dollars in local taxes allocation to the plan to be adopted in accordance with all notices and hearing requirements for the affected landowners and residents within the proposed additional territory applicable to an initial proposed enhanced infrastructure financing plan. This bill would instead authorize the amendments, as specified, or the addition of a participating taxing entity and its representatives as members of a public financing authority after the date of district formation, to be approved by a majority vote of the public financing authority at a public hearing held following the provision of a 30-day mailed notice, as described above. The bill would instead require amendments that propose the increase of the limit of the total number of dollars in local taxes allocation to the plan, except where the increase is the result of an affected taxing entity agreeing to participate in the existing district and the plan is amended, as specified, to be adopted in accordance with all notices and hearing requirements, as described above. Existing law requires a public financing authority to adopt an annual report on or before June 30 of each year after holding a public hearing. This bill would instead require a public financing authority to adopt an annual report within 7 months of the close of each fiscal year after holding a public hearing. If, after the date of district formation, an affected taxing entity adopts a resolution approving the plan and to participate in the division of taxes used to finance an enhanced infrastructure financing district, existing law requires the division of taxes to be based upon the last equalized assessment roll that is used for the district, as specified. This bill would additionally authorize an affected taxing entity to, at any time after the date of district formation, approve the plan and participate in the division of taxes used to finance the activities of a district, by adopting a resolution of the governing body. (2) Existing law authorizes the creation of community revitalization and investment authorities, as specified, to carry out a community revitalization plan within a community revitalization and investment area. Existing law requires not less than 70% of the land calculated by census tracts, census block groups, as defined, or any combination of both within the area to be characterized by specified conditions, including the annual median household income that is less than, at the option of the authority, 80% of the statewide, countrywide, or citywide annual median income and three of four conditions, including deteriorated commercial or residential structures. This bill would instead require not less than 60% of the land calculated by census tracts, census block groups, as defined, or any combination of both within the area to be characterized by either of the two specified conditions, including the annual median household income that is less than, at the option of the authority, 80% of the statewide, countrywide, or citywide annual median income or three of four conditions, including deteriorated commercial or residential structures. The bill would make related technical, nonsubstantive changes. Existing law requires a community revitalization authority to consider adoption of a community revitalization plan at 3 public hearings, as specified. Existing law requires a community revitalization authority to post a notice of each meeting or public hearing, as specified, in an easily identifiable and accessible location on the authority’s internet website and to mail a written notice of the meeting or public hearing to each owner of land and each resident at least 10 days prior to the meeting or public hearing. Existing law also requires notice of each public hearing to be published in a newspaper of general circulation, as specified. This bill would instead require a community revitalization authority to consider adoption of a community revitalization plan at 2 public hearings, as specified, and would make conforming changes. As an alternative to mailing separate mailed notices prior to the meeting or public hearing, the bill would authorize the authority to mail a notice to each landowner, resident, and affected taxing entity at least 40 days before the meeting, as specified. The bill would require the designated contact person, as described, to assemble and maintain an email contact list of all landowners, residents, and other interested parties who have expressed interest in receiving information and materials. Except for the newspaper notices, as described above, the bill would require a notice required by the above-described provisions to be provided in English and in all other languages spoken jointly by 20% or more of the population in the jurisdiction of the county of the proposed authority that speaks English less than “very well” and jointly speaks a language other than English, as specified. Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: NO Local Program: NO Bill Text The people of the State of California do enact as follows: SECTION 1. The Legislature finds and declares all of the following: (a) Among the purposes of this act is to consolidate and streamline the notice and hearing requirements associated with the formation of community revitalization and investment authorities. (b) The changes made to the formation process and the timing of the effective date of this act, however, shall not be interpreted in a manner so as to disrupt or delay the formation process for an authority that commenced prior to the effective date of this act. (c) Authorities that have initiated the formation process when this act takes effect, as evidenced by the adoption of the resolution or entering into a joint powers agreement pursuant to Section 62001 of the Government Code, may choose to complete the formation process in accordance with the requirements and timelines in effect on the date that the resolution of intention was adopted. SEC. 2. Section 53398.52 of the Government Code is amended to read: 53398.52. (a) (1) A district may finance any of the following: (A) The purchase, construction, expansion, improvement, seismic retrofit, or rehabilitation of any real or other tangible property with an estimated useful life of 15 years or longer that satisfies the requirements of subdivision (b). (B) The planning and design work that is directly related to the purchase, construction, expansion, or rehabilitation of property. (C) The costs described in Sections 53398.56 and 53398.57. (D) (i) The ongoing or capitalized costs to maintain public capital facilities financed in whole or in part by the district. (ii) Notwithstanding clause (i), a district shall not use the proceeds of bonds issued pursuant to the authority in Article 4 (commencing with Section 53398.77) to finance maintenance of any kind. (2) The facilities are not required to be physically located within the boundaries of the district. However, any facilities financed outside of a district shall have a tangible connection to the work of the district, as detailed in the infrastructure financing plan adopted pursuant to Section 53398.69. (3) A district shall not finance the costs of an ongoing operation or providing services of any kind. (b) The district shall finance only public capital facilities or other specified projects of communitywide significance that provide significant benefits to the district or the surrounding community, including, but not limited to, all of the following: (1) Highways, interchanges, ramps and bridges, arterial streets, parking facilities, and transit facilities. (2) Sewage treatment and water reclamation plants and interceptor pipes. (3) Facilities for the collection and treatment of water for urban uses. (4) Flood control levees and dams, retention basins, and drainage channels. (5) Childcare facilities. (6) Libraries. (7) Parks, recreational facilities, and open space. (8) Facilities for the transfer and disposal of solid waste, including transfer stations and vehicles. (9) Brownfield restoration and other environmental mitigation. (10) The development of projects on a former military base, provided that the projects are consistent with the military base authority reuse plan and are approved by the military base reuse authority, if applicable. (11) The repayment of the transfer of funds to a military base reuse authority pursuant to Section 67851 that occurred on or after the creation of the district. (12) The acquisition, construction, or rehabilitation of housing for persons of very low, low, and moderate income, as defined in Sections 50105 and 50093 of the Health and Safety Code, for rent or purchase. (13) Acquisition, construction, or repair of industrial structures for private use. (14) (A) Acquisition, construction, or repair of commercial structures by the small business occupant of such structures, if such acquisition, construction, or repair is for purposes of fostering economic recovery of a community and of ensuring the long-term economic sustainability of small businesses. (B) For purposes of this paragraph and subject to subparagraph (C), “small business” means an independently owned and operated business that is not dominant in its field of operation, the principal office of which is located in California, the officers of which are domiciled in California, and which, together with affiliates, has 100 or fewer employees, and average annual gross receipts of fifteen million dollars ($15,000,000) or less over the previous three years, or is a manufacturer, as defined in subdivision (c) of Section 14837, with 100 or fewer employees. An “independently owned and operated business” shall include a formula retail business that is an independently owned franchise. (C) A district may set a lower threshold for the average annual gross receipts over the previous three years and for the number of employees described in subparagraph (B). (15) Transit priority projects, as defined in Section 21155 of the Public Resources Code, that are located within a transit priority project area. For purposes of this paragraph, a transit priority project area may include a military base reuse plan that meets the definition of a transit priority project area and it may include a contaminated site within a transit priority project area. (16) Projects that implement a sustainable communities strategy, when the State Air Resources Board, pursuant to Chapter 2.5 (commencing with Section 65080) of Division 1 of Title 7, has accepted a metropolitan planning organization’s determination that the sustainable communities strategy or the alternative planning strategy would, if implemented, achieve the greenhouse gas emission reduction targets. (17) Projects that enable communities to adapt to the impacts of climate change, including, but not limited to, higher average temperatures, decreased air and water quality, the spread of infectious and vector-borne diseases, other public health impacts, extreme weather events, sea level rise, flooding, heat waves, wildfires, and drought. This paragraph includes projects intended to improve air quality. (18) Port or harbor infrastructure, as defined by Section 1698 of the Harbors and Navigation Code. (19) The acquisition, construction, or improvement of broadband Internet access service. For purposes of this section, “broadband Internet access services” has the same meaning as defined in Section 53167. A district that acquires, constructs, or improves broadband Internet access service may transfer the management and control of those facilities to a local agency that is authorized to provide broadband Internet access service, and that local agency when providing that service shall comply with the requirements of Article 12 (commencing with Section 53167) of Chapter 1 of Part 1 of Division 2 of Title 5. (20) Facilities in which nonprofit community organizations provide health, youth, homeless, and social services. (21) (A) For districts at least partially in high or very high fire hazard severity zones designated by the State Fire Marshal pursuant to Article 9 (commencing with Section 4201) of Chapter 1 of Part 2 of Division 4 of the Public Resources Code, the following: (i) Heavy equipment to be used for vegetation clearance and firebreaks. (ii) Undergrounding of local publicly owned electric utilities, as defined in Section 224.3 of the Public Utilities Code, against wildfires. (iii) Equipment used for fire watch, prevention, and fighting, including, but not limited to, helicopters, air tankers, and technological advancements to weather and wind science infrastructure, risk modeling, and prediction. (B) A district shall not use the proceeds of bonds issued pursuant to the [Text truncated for display. Full text available on Congress.gov.]