Infrastructure Financing Districts (IFDs) provide an opportunity for local governments to fund public infrastructure through the use of tax increment financing.

Headlines:


Key Points to Remember:

  • IFDs have been authorized in state statute since 1990, but overly complex and onerous barriers (such as the requirement of two-thirds voter approval for both the creation of the IFD and bonds associated with it) have prevented its full utilization.
  • Several efforts have been made to apply IFDs to specific local areas—such as San Francisco with AB 1199 (Ammiano) in 2010 and San Diego with SB 207 (Peace) in 1999—yet only a handful of projects have been delivered using this broader statutory authority in the past 20+ years.
  • With the formal elimination of redevelopment agencies in early 2012, California is one of only a few states without a substantial tax increment tool to attract private investment.
  • IFDs are NOT a tax increase–rather it uses the incremental change in a property tax base from improvements in the area to provide for additional investments in public infrastructure in a targeted area.
  • The state of California’s infrastructure deficit exceeds $765 billion–two of the largest areas contributing to that deficit include public transportation and local roads, which could be improved by IFDs.

Recent News:

  • Governor Brown Announces IFD reform as a priority in January budget.  Go here for the budget summary details.

Data & Analytics:

LAEDC Efforts:

What’s Next?:

Legislative Updates:

AB 243 Dickinson AB 294 lowers the voter threshold for establishing IFDs from 2/3 to 55% as well as expands items that can be included in IFDs. Currently in Assembly Inactive File
SB 33 Wolk SB 33 removes some of the most onerous barriers associated with the creation of and issuance of bonds tied to Infrastructure Financing Districts. Currently in Assembly Inactive File
 AB 294  Holden  AB 294 creates a pilot program for the use of Educational Revenue Augmentation Fund (ERAF) portion of tax increment generated within infrastructure financing districts (with approval from the state’s Infrastructure and Economic Development Bank) to increase the bonding capacity within those districts, allowing them to finance even more critical infrastructure development and realize even greater job gains.  Assembly Appropriations Committee

Page last updated on 1/24/2014