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SB 33 Senate Bill-Bill Analysis Page 6 of 7 property tax increment revenue to the IFD approve the plan. 6)Requires a two-thirds voter approval of the formation of the IFD and the issuance of bonds. 7)Requires majority voter approval for setting the IFD's appropriations limits. 8)Specifies that public agencies that own land in a proposed IFD may not vote on issues regarding the district. 9)Authorizes IFDS to issue a variety of debt instruments, including bonds, certificates of participation, leases, and SB 33 Page 8 loans. FISCAL EFFECT . According to the Assembly Appropriations Committee, there is negligible fiscal impact. COMMENTS According to the author "SB 33 makes it easier for local agencies to use IFDs to pay for public projects, without impacting school district's share of property tax or the state's general fund. In a fiscally distressed economic climate, local officials need a flexible financing tool that is rigorous and responsible. "Forming an IFD is cumbersome: IFDS require three different vote thresholds. To form an IFD, the city or county must develop an infrastructure plan, send copies to every landowner, consult with other local governments, and hold a public hearing. Every local agency that will contribute its property tax increment to the IFD must approve the plan. Because an IFD is legally separate from the city or county and IFDS do not raise taxes, the current 2/3 voter approval requirement is not a Constitutional requirement." This bill is author-sponsored. Cities and counties can create IFDs and issue bonds to pay for community scale public works: highways, transit, water systems, sewer projects, flood control, child care facilities, libraries, parks, and solid waste facilities. To repay the bonds, IFDs divert property tax increment revenues from other local governments for 30 years. However, IFDS are prohibited from diverting property tax increment revenues from schools. This bill removes key impediments to create IFDS, such as the voting requirements to form and bond the IFD. In addition, the bill extends the term of the IFD bonds from 30 to 40 years, allowing for a longer debt repayment period thus lowering monthly payments. Also, to increase transparency, this bill includes measures of programmatic and fiscal accountability, requiring IFDS to annually report its progress and expenditures to its affected taxing entities and landowners. This bill allows the creation of an IFD to fund public works projects in disadvantaged communities and communities seeking to implement sustainable communities strategies, like transit priority projects. The bill also allows non-traditional flood and watershed management projects - using nature to conserve and restore at-risk watershed lands - to be available for IFD http://www.leginfo.ca.gov/pub/13-14/bil I/sen/sb_0001-0050/sb_33_cfa_20130829_170827_asm_tloor.html 7/3/2014