The California Legislature is currently considering AB 690 sponsored by Assembly woman Nora Campos. If AB 690 is adopted, it will restore municipalities’ ability to use tax incremental financing to construct public works projects and create jobs in areas of high unemployment.
TIF was widely used as a powerful redevelopment tool in California until 2011 when AB 1X26 eliminated all of California’s approximately 400 redevelopment agencies. Although a few lawsuits were subsequently filed to challenge the constitutionality of AB 1X26, the practice of TIF has stopped in California since then.
Under AB 690, municipalities are authorized to create Jobs and Infrastructure Financing Districts (JIDs) with 55% voter approval in high employment areas. Tax increment generated by JIDs can be used to provide necessary assistance for targeted industries to locate or expand in JIDs. In addition, AB 690 requires each JID to prepare specific job creation plans and prove that 10 prevailing wage jobs will be created for every $1,000,000 investment.
AB 690 was referred to the Local Government Committee and the Housing and Community Development Committee for review on March 11, 2013. To read it in its entirety, visit http://www.legislature.ca.gov/cgi-bin/port-postquery?bill_number=ab_690&sess=CUR&house=B&author=campos.