BILL NUMBER: AB 690AMENDED BILL TEXT AMENDED IN ASSEMBLY JANUARY 6, 2014 AMENDED IN ASSEMBLY SEPTEMBER 11, 2013 AMENDED IN ASSEMBLY APRIL 9, 2013 INTRODUCED BY AssemblyMemberCamposMembers Campos and Medina FEBRUARY 21, 2013An act to amend Sections 53395, 53395.1, 53395.3, 53395.4, 53395.10, 53395.13, 53395.14, 53395.19, and 53395.20 of, to add Sections 53395.3.6, 53395.3.7, 53395.3.8, 53395.3.9, 53395.3.10, 53395.3.11, and 53395.3.12 to, and to repeal Sections 53395.5, 53395.23, and 53395.24 of, the Government Code, and to amend Section 33459 of the Health and Safety Code, relating to jobs and education financing districts.An act to add the heading of Chapter 1 (commencing with Section 99500) to, to add Chapter 2 (commencing with Section 99520) and Chapter 3 (commencing with Section 99530) to, Title 20 of, and to repeal Chapter 8 (commencing with 8700) and Chapter 8.1 (commencing with 8710) of Division 1 of Title 2 of, the Government Code, relating to state government. LEGISLATIVE COUNSEL'S DIGEST AB 690, as amended, Campos.Jobs and education financing districts: voter approval.State government: international relations. Existing law requires the California-Mexico Border Relations Council to, among other things, coordinate activities of state agencies that are related to cross-border programs, initiatives, projects, and partnerships that exist within state government. Existing law also authorizes the Office of California-Mexico Affairs to develop better relations with Mexico by coordinating with state agencies to foster economic cooperation. This bill would repeal, and recast those provisions relating to the California-Mexico Border Relations Council. This bill would repeal, and recast those provisions relating to the Office of California-Mexico Affairs.Existing law authorizes a legislative body, as defined, to create an infrastructure financing district, adopt an infrastructure financing plan, and issue bonds, for which only the district is liable, to finance specified public facilities, upon approval by 2/3 of the voters. Existing law authorizes an infrastructure financing district to fund infrastructure projects through tax increment financing, pursuant to the infrastructure financing plan and agreement of affected taxing entities, as defined.Existing law, the Polanco Redevelopment Act, authorizes a redevelopment agency to take any action that the agency determines is necessary and consistent with state and federal laws to remedy or remove a release of hazardous substances on, under, or from property within a project area, whether the agency owns that property or not, subject to specified conditions.This bill would revise and recast the provisions governing infrastructure financing districts and instead provide for the creation of jobs and education financing districts (JEDs) without voter approval, and would make various conforming changes. The bill would authorize a public financing authority to enter into joint powers agreements with affected taxing entities with regard to nontaxing authority or powers only. The bill would authorize a district to implement hazardous cleanup pursuant to the Polanco Redevelopment Act, as specified.Vote: majority. Appropriation: no. Fiscal committee:yesno . State-mandated local program: no. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Chapter 8 (commencing with Section 8700) of Division 1 of Title 2 of the Government Code is repealed. SEC. 2. Chapter 8.1 (commencing with Section 8710) of Division 1 of Title 2 of the Government Code is repealed. SEC. 3. The heading of Chapter 1 (commencing with Section 99500) is added to Title 20 of the Government Code , to read: CHAPTER 1. GENERAL PROVISIONS SEC. 4. Chapter 2 (commencing with Section 99520) is added to Title 20 of the Government Code , to read: CHAPTER 2. OFFICE OF CALIFORNIA-MEXICO AFFAIRS 99520. The Legislature finds and declares the following: (a) The United States and Mexican economies have become increasingly integrated, particularly since the 1994 adoption of the North American Free Trade Agreement, or NAFTA. (b) This integration has brought both California and Mexico opportunities and challenges in the areas of economic development, labor relations, and environmental protection. (c) The California Office of the Southwest Border Regional Conference (formerly commission) was established as part of a joint American border states effort to further and develop favorable relations with the six Mexican border states. (d) The efforts of the California office of the conference continue to be an essential part of California's interaction with Mexico. (e) It is important for the state and for the nation that state agencies continue to address important United States-Mexico issues. (f) The Office of California-Mexico Affairs provides a focal point in state government to serve as a clearinghouse for information and assistance to other state agencies that are involved with Mexico. 99521. The following definitions shall govern the construction of this chapter: (a) "Conference" means the Southwest Border Regional Conference. (b) "Office" means the Office of California-Mexico Affairs. 99522. (a) There is in state government an Office of California-Mexico Affairs. Within this office the operations of the California Office of the Southwest Border Regional Conference shall be continued. (b) The office succeeds to and is vested with all the duties, powers, purposes, and responsibilities vested in the California office of the conference and previously vested in the Commission of the Californias. (c) The office shall have possession and control of all records, papers, offices, equipment, supplies, moneys, funds, appropriations, land, and other property, real or personal, held for the benefit or use of the California office of the conference, or previously held for the benefit or use of the commission, in the performance of the duties, powers, purposes, responsibilities, and jurisdiction of the California office of the conference or the commission. 99523. The members of the Southwest Border Regional Conference shall be the Governors of the four American border states. The California member of the conference is the Governor of California or his designee. 99524. The office shall further and develop favorable relations with the State of Baja California, the State of Baja California Sur, other Mexican states bordering on the United States, and the remaining states and territories of the Republic of Mexico necessary for the completion of the office's tasks. The office shall cooperate with similar organizations and agencies situated within California, the United States, or Mexico, to further economic development, improve working conditions and living standards, and foster the protection and improvement of the environment in Mexico and California. The office shall avail itself of the services of the San Diego State University, which is engaged in educational, cultural, and research activities with Mexico. The office shall be responsible for carrying out the ongoing responsibilities of the Southwest Border Regional Conference. 99525. The Governor shall appoint a director of the office. The director may appoint and employ any personnel that he or she deems necessary to carry out the functions of the office. The office may incur all necessary expenses to effectuate its purposes and may accept grants from federal and state agencies. The office may also accept funds from private organizations or individuals in order to assist the office in the accomplishment of its functions as set forth in this chapter. 99526. Members and employees of the office may travel outside of California and may hold hearings and conduct investigations within and outside of the state whenever necessary to carry out the duties set forth in this chapter. Members and employees may acquire any available information from any governmental agency within the United States or Mexico necessary for the completion of their tasks. 99527. The office shall be responsible for the establishment of committees in those topic areas deemed necessary by the director. Recommendations of the committees shall not be binding on the Governor or the Legislature but shall only be advisory in nature. SEC. 5. Chapter 3 (commencing with Section 99530) is added to Title 20 of the Government Code , to read: CHAPTER 3. CALIFORNIA-MEXICO BORDER RELATIONS COUNCIL 99530. The following definitions shall apply to this chapter: (a) "Border" means the line of demarcation between California and Mexico. (b) "Council" means the California-Mexico Border Relations Council. (c) "Public agency" means a city, county, city and county, district, or the state or any agency or department of the state. 99531. (a) The California-Mexico Border Relations Council is hereby established in state government. The council shall consist of the Director of the Governor's Office of Business and Economic Development, the Secretary of the Natural Resources Agency, the Secretary for Environmental Protection, the Secretary of California Health and Human Services, the Secretary of Transportation, the Secretary of Food and Agriculture, and the Director of Emergency Services. (b) The Director of the Governor's Office of Business and Economic Development shall chair the council. 99532. The council shall do all of the following: (a) Coordinate activities of state agencies that are related to cross-border programs, initiatives, projects, and partnerships that exist within state government, to improve the effectiveness of state and local efforts that are of concern between California and Mexico. (b) Establish policies to coordinate the collection and sharing of data related to cross-border issues between and among agencies. (c) Identify and recommend to the Legislature changes in law needed to achieve the goals of this section. 99533. Beginning January 1, 2008, the council shall submit a report to the Legislature on the council's activities annually.SECTION 1.It is the intent of the Legislature to do all of the following: (a) Establish a program that will enable local cities and counties to form tax exempt financing authorities known as Jobs and Education Financing Districts (JEDs). (b) To authorize JEDs to prepare comprehensive job creation plans (JCPs), the objective of which shall be to identify the targeted industries that would be provided assistance in the form of property tax increment financing to locate or expand within the JED.SEC. 2.Section 53395 of the Government Code is amended to read: 53395. The Legislature finds and declares all of the following: (a) Approximately 85 percent of the state's general fund budget is generated by income taxes and sales and use taxes, which are derived from, or are directly linked to, employment. Therefore, the state's structural budget deficit will not be resolved unless private sector investment is encouraged. (b) Tax increment financing is recognized as a compelling and flexible financing tool for inducing private sector investment that creates jobs and tax revenue for the state and for local communities. (c) Local prevailing wage job creating projects that use tax increment financing based on property tax have the potential to return new income tax and sales tax revenue to the state on an annual basis that would exceed the incremental property tax invested in these projects. Increased tax revenues provide a link between job creation and a balanced state budget, thus enabling the state to meet its financial commitments to education and long-term stable economic development.SEC. 3.Section 53395.1 of the Government Code is amended to read: 53395.1. Unless the context otherwise requires, the definitions contained in this article shall govern the construction of this chapter. (a) "Affected taxing entity" means any governmental taxing agency that levied or had levied on its behalf a property tax on all or a portion of the property located in the proposed district in the fiscal year prior to the designation of the district, but not including any county office of education, school district, or community college district, except as provided in paragraph (1) of subdivision (d) of Section 53395.14. (b) "City" means a city, a county, a city and county, or a joint powers authority that is acting as the military base reuse authority established pursuant to Title 7.86 (commencing with Section 67800). (c) "Debt" means any binding obligation to repay a sum of money, including obligations in the form of bonds, certificates of participation, long-term leases, loans from government agencies, or loans from banks, other financial institutions, private businesses, or individuals, reimbursement agreements, advances, or other forms of indebtedness or financial obligation, 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. (d) "Designated official" means the city engineer or other appropriate official designated pursuant to Section 53395.13. (e) (1) "District" means a jobs and education financing district. (2) A jobs and education financing district is a "district" within the meaning of Section 1 of Article XIII A of the California Constitution. (f) "Jobs and education financing district" means a legally constituted governmental entity established pursuant to this chapter for the sole purpose of financing public facilities, and real and tangible commercial property improvements as defined in subdivision (a) of Section 53395.3. (g) "Landowner" or "owner of land" means any person shown as the owner of land on the last equalized assessment roll or otherwise known to be the owner of the land by the legislative body. The legislative body has no obligation to obtain other information as to the ownership of land, and its determination of ownership shall be final and conclusive for the purposes of this chapter. A public agency is not a landowner or owner of land for purposes of this chapter, unless the public agency owns all of the land to be included within the proposed district. (h) "Legislative body" means the city council or board of supervisors, or joint powers authority that is acting as the military base reuse authority established pursuant to Title 7.86 (commencing with Section 67800).SEC. 4.Section 53395.3 of the Government Code is amended to read: 53395.3. (a) The district may finance the costs of real and tangible commercial property improvements, including the costs of acquisition, installation, construction, inducements to private parties, and costs of planning and design thereof, as well as the costs of educational or job training programs created, established, or continued in association therewith, in accordance with the procedures contained in Sections 53395.13 and 53395.14. (b) The district shall be a local agency within the meaning of subdivision (d) of Section 33459 of the Health and Safety Code and may finance any actions necessary to implement the Polanco Redevelopment Act (Article 12.5 (commencing with Section 33459) of Chapter 4 of Part 1 of Division 24 of the Health and Safety Code). (c) The district may engage in activities in which property tax increment is assumed, used, transferred, or otherwise encumbered by the district for activities authorized in this section and during the life of the district, as determined by paragraph (4) of subdivision (d) of Section 53395.14, until the unemployment rate of the district falls below the threshold stated in subdivision (c) of Section 53395.10.SEC. 5.Section 53395.3.6 is added to the Government Code, to read: 53395.3.6. (a) There is in each city a public, corporate instrumentality of the State of California, known as the jobs and education financing district of the city. Each city is authorized to utilize that district in the issuance of revenue bonds in the accomplishment of the public purposes as provided in Section 53395.3. The purposes provided in Section 53395.3 shall be deemed to constitute public purposes of the city, and the exercise by each district of the powers conferred by this title, including the power to issue revenue bonds, shall be deemed to be the performance of an essential governmental function of the city. However, that exercise of the powers conferred by this title in the achievement of the purposes provided in Section 53395.3 shall be subject to the provisions of, and exclusively as provided in, this article. (b) A district shall not transact any business or exercise any powers under this article unless, by ordinance, the city council declares that there is a need for the district and that the district shall function. The ordinance shall be subject to referendum in the manner prescribed by law for ordinances of the city. (c) A district shall conclusively be deemed to have been established and authorized to transact business and exercise its powers upon proof of the adoption of the ordinance. (d) Notwithstanding any other provision of this article, a city shall have the power to transact any business or exercise any powers of a district conferred by this title without having to establish a district. However, a city, at its option may, establish a district pursuant to this article to exercise any powers conferred by this article. In the event that a city acts as a jobs and infrastructure financing district, any reference to district and board contained in this title shall mean city and city council, respectively.SEC. 6.Section 53395.3.7 is added to the Government Code, to read: 53395.3.7. The sole purpose of a district is to undertake projects through the issuance of revenue bonds in accomplishment of the purposes provided in Section 53395.3, to carry out and complete those projects, and to perform and exercise derivative obligations and powers.SEC. 7.Section 53395.3.8 is added to the Government Code, to read: 53395.3.8. (a) All powers vested in districts shall be exercisable as their respective boards shall provide, solely to accomplish the purposes of districts. (b) The board shall consist of all of the members of the city council. (c) The directors shall serve without compensation, except that they may be reimbursed for their actual and necessary expenses incurred in the performance of their duties, or may receive a reasonable per diem payment and mileage charge as reimbursement for living and traveling expenses incurred in the performance of duties away from the principal office. In addition, they also may receive a reasonable mileage charge as reimbursement for traveling expenses to and from the principal office of the authority, or the place of meeting, if other than at the principal office.SEC. 8.Section 53395.3.9 is added to the Government Code, to read: 53395.3.9. (a) The principal office of a district shall be located at the principal office of the city. (b) Each district board shall have a chairperson, who shall be elected by the members of the board from among its membership. (c) Public officers of a district consist of the chairperson and members of the board, a secretary, a treasurer, and those assistants for the secretary and the treasurer as the board may appoint. The corresponding officers of the city may, by designation by resolution of the board, be the secretary, the treasurer, and the assistants of the district. The secretary, the treasurer, and the assistants may be compensated. (d) A district shall file with the clerk of the city a certificate of a majority of the authorized number of directors as to the secretary and any assistant secretaries of the district, and the certificate, until superseded by a later certificate, shall be conclusive with respect to the district of which the person is the secretary or assistant secretary, as the case may be, of the district. (e) A certificate of the clerk of the city as to the secretary or assistant secretary of the district, and of the secretary or assistant secretary so certified as to the incumbents of any offices, shall be conclusive with respect to the city and the district that those persons are the incumbents of those offices in any transactions of the district authorized by this title.SEC. 9.Section 53395.3.10 is added to the Government Code, to read: 53395.3.10. (a) A district may appoint any employees and agents, including, without limitation, financial advisers or consultants, accountants, architects, engineers, or other experts or advisers as it requires, and may determine their qualifications, duties, terms of employment or engagement, and compensation. Officers, agents, or employees of a city may also be agents or employees of a district. Officers, agents, or employees of a district shall not, by reason thereof, be deemed to be officers, agents, or employees of a city. A district shall adopt personnel rules and regulations applicable to its employees. (b) A district may contract for legal counsel as in its judgment is necessary or advisable to enable it to carry out its purposes, including bond counsel as it deems advisable in connection with any proceedings. (c) An attorney or firm of attorneys employed as counsel by a company may not serve at the same time as legal counsel, including bond counsel, and a person or firm employed as financial adviser by a company may not serve at the same time as financial adviser, to the district in connection with any project or proposed project for the company.SEC. 10.Section 53395.3.11 is added to the Government Code, to read: 53395.3.11. A member of the board or other officer of a district or a member of the city council who has any financial interest, other than an interest as defined by Section 1091 or 1091.5, in any project, project agreement, indenture, bond, or the sale thereof, shall fully disclose the nature of the interest to the board, or city council, and shall not cast a vote upon any matter concerning that project, project agreement, indenture, bond, or the sale thereof, in any manner whatsoever, except that the presence of the member may be considered in determining the existence of a quorum.SEC. 11.Section 53395.3.12 is added to the Government Code, to read: 53395.3.12. A district may do all of the following: (a) Sue and be sued in its own name. (b) Have an official seal. (c) Have perpetual succession. (d) Make and execute contracts and other instruments and documents. (e) Make, amend, and repeal bylaws governing procedures and meetings of the board and the duties of its officers, and make, amend, and repeal rules, regulations, and policies governing the transaction of its business and the exercise of its powers. (f) Use premises of, subject to the regulation thereof by, the city. (g) Administer its funds and deposit, invest, and reinvest funds in the types of securities or obligations permitted by the city in accordance with law. (h) Use discretion in the undertaking of projects, including the establishment of reasonable priorities and criteria among the types and locations of projects and regarding companies.SEC. 12.Section 53395.4 of the Government Code is amended to read: 53395.4. A district may include areas that are not contiguous.SEC. 13.Section 53395.5 of the Government Code is repealed.SEC. 14.Section 53395.10 of the Government Code is amended to read: 53395.10. A legislative body of a city may designate one or more proposed jobs and education financing districts pursuant to this chapter in a United States Census-defined area with high unemployment in excess of 7 percent, as determined by the most recent data available from the American Community Survey (ACS) of the federal Bureau of Labor Statistics (BLS) of the United States Department of Labor at the time the district is formed. The United States Census-defined area is comprised of census tracts that may define conterminous areas within a city, or conterminous areas that reside in more than one city. Proceedings for the establishment of a district shall be instituted by the adoption of a resolution of intention to establish the proposed district and shall do all of the following: (a) State that a job and infrastructure financing district is proposed to be established under the terms of this chapter and describe the boundaries of the proposed district, which may be accomplished by reference to a map on file in the office of the clerk of the city. (b) State the type of public facilities and development proposed to be financed or assisted by the district in accordance with Section 53395.3. (c) State the need for the district based upon the most recent month's unemployment rate as published by the Employment Development Department and the goals the district proposes to achieve. These goals shall include, but are not limited to, reduction of the district unemployment rate to the national average, as determined by the latest information from the United States Bureau of Labor Statistics, or 5 percent, whichever is lower. (d) State that incremental property tax revenue from the city and some or all affected taxing entities within the district may be used to implement the job creation plan adopted pursuant to Section 53395.14. (e) Fix a time and place for a public hearing on the proposal.SEC. 15.Section 53395.13 of the Government Code is amended to read: 53395.13. After adopting the resolution pursuant to Section 53395.10, the legislative body shall designate and direct the appropriate official to prepare a job creation plan (JCP) pursuant to Section 53395.14.SEC. 16.Section 53395.14 of the Government Code is amended to read: 53395.14. After receipt of a copy of the resolution of intention to establish a district, the official designated pursuant to Section 53395.13 shall prepare a proposed JCP. The JCP shall be consistent with the general plan of the city within which the district is located 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 legislative body in its resolution of intention. (b) A description of the public facilities required to serve the development proposed in the area of 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 improvements, facilities, real and tangible commercial property improvements, and education and job training programs to be financed with assistance from the proposed district, and those to be provided jointly. The description shall include the proposed location, timing, and costs of the public improvements, facilities, real and tangible commercial property improvements, and education and job training programs. (c) A finding that the public facilities and real and tangible commercial property improvements provide significant job creation benefits to the area within the district or to the city within which the district is located. (d) A financing section, which shall contain all of the following information: (1) A specification of the maximum portion of the incremental tax revenue of the city and of each affected taxing entity proposed to be committed to the district for each year during which the district will receive incremental tax revenue. The portion need not be the same for all affected taxing entities. The portion may change over time, however the district may acquire or use a maximum of 50 percent of the combined state, county office of education, school district, and community college district share of tax increment on an annual basis. (2) A projection of the amount of tax revenues expected to be received by the district in each year during which the district will receive tax revenues, including an estimate of the amount of tax revenues attributable to each affected taxing entity for each year. (3) A plan for financing the public improvements, facilities, real and tangible commercial property improvements, and education and job training programs to be assisted by the district, including a detailed description of any intention to incur debt. (4) A date on which the district will cease to exist, by which time all tax allocation to the district will end. The date shall not be more than 45 years from the date on which the ordinance forming the district is adopted pursuant to Section 53395.23. (5) An analysis of the costs to the city of providing facilities and services to the area of the district while the area is being developed and after the area is developed. The JCP shall also include an analysis of the tax, fee, charge, and other revenues expected to be received by the city as a result of expected development in the area of the district. (6) An analysis of the projected fiscal impact of the district and the associated development upon each affected taxing entity. (7) A list of targeted industries and workforce categories that have higher unemployment relative to other industries and workforce categories within the district. (e) A formula that illustrates the estimated number of jobs to be created pursuant to the JCP, with the requirement that for every one million dollars ($1,000,000) invested in tax increment or companion private funds, the JED shall create 10 full-time equivalent (FTE) jobs for qualifying employees within two years of the start of construction, which shall occur within six months of agreement approval. All construction jobs generated shall be prevailing wage jobs. (f) Construction and permanent FTE jobs may receive credit for indirect and induced jobs created pursuant to an accepted analysis that applies a nationally accepted economic impact model. (g) A description of any plan to encourage public-private partnerships with employers and developers for property acquisitions, building and tenant improvements, and equipment purchases, and implementing and achieving the objectives stated on the JCP.SEC. 17.Section 53395.19 of the Government Code is amended to read: 53395.19. (a) A public financing authority may enter into a joint powers agreement pursuant to Section 6500 with an affected taxing entity to carry out the purposes of this chapter with regard to nontaxing authority or powers only. (b) This section shall not be construed to prevent the legislative body from amending its JCP and adopting a resolution proposing formation of the jobs and education financing district without allocation of the tax revenues of any affected taxing entity that has not approved the JCP by resolution of the governing body of the affected taxing entity.SEC. 18.Section 53395.20 of the Government Code is amended to read: 53395.20. (a) At the conclusion of the hearing, the legislative body may adopt a resolution adopting the JCP, as modified, and formation of the jobs and education financing district in a manner consistent with Section 53395.19, or it may abandon the proceedings. (b) An election shall not be required to form the district. (c) A 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 district, may petition the legislative body for inclusion of the land in the district without an election.SEC. 19.Section 53395.23 of the Government Code is repealed.SEC. 20.Section 53395.24 of the Government Code is repealed.SEC. 21.Section 33459 of the Health and Safety Code is amended to read: 33459. For purposes of this article, the following terms shall have the following meanings: (a) "Department" means the Department of Toxic Substances Control. (b) "Director" means the Director of Toxic Substances Control. (c) "Hazardous substance" means any hazardous substance as defined in subdivision (h) of Section 25281, and any reference to hazardous substance in the definitions referenced in this section shall be deemed to refer to hazardous substance, as defined in this subdivision. (d) "Local agency" means a single local agency that is one of the following: (1) A local agency authorized pursuant to Section 25283 to implement Chapter 6.7 (commencing with Section 25280) of, and Chapter 6.75 (commencing with Section 25299.10) of, Division 20. (2) A local officer who is authorized pursuant to Section 101087 to supervise a remedial action. (3) A job and infrastructure district.