Governor Newsom Releases
2019-20 State Budget
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We want these EIFDs, Enhanced Infrastructure Financing Districts to actually be utilized. There’s only 3 of them in state. Truckee, which all of you know well, San Diego and La Verne. Folks in La Verne, thank you!
It’s an increment strategy, a version of a successor agency to redevelopment. The problem is you have a 55% voter threshold if you want to capture debt. We want to eliminate that 55% voter threshold and we also want to pair it with the opportunity zones.
This is the big idea!
You got the federal opportunity zones which defer delay that capital gains. We want to conform that with the Federal Regs, but specifically for housing, low-moderate housing and green tech. Otherwise we are not interested in conforming it. So we want to lay those over our Enhanced Infrastructure Financing Districts.
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Governor Newsom
January 10, 201
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ECONOMIC DEVELOPMENT TOOLS MADE MORE ATTRACTIVE
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Various economic development tools have been introduced following the dissolution of Redevelopment Agencies (RDAs), including Enhanced Infrastructure Financing Districts (EIFDs). However, only three EIFDs have been formed since statute created them in 2014. EIFDs can be created by cities or counties without voter approval and expend tax increment revenues without voter approval. However, an EIFD must receive 55-percent voter ap
proval to issue debt.
The Budget encourages the formation of additional EIFDs through removal of the 55-percent voter approval requirement to issue debt. This change will allow EIFDs to support longer-term infrastructure commitments, similar to former RDAs.
The state will also make EIFDs a more attractive economic tool by pairing them with the federal Opportunity Zones program. To make Opportunity Zones more effective, the state will conform to federal law allowing for deferred and reduced taxes on capital gains in Opportunity Zones for investments in green technology or in affordable housing, and for exclusion of gains on such investments in Opportunity Zones held for 10 years or more. Additionally, the Governor’s Office of Business and Economic Development will help foster relationships between local EIFDs and investors to facilitate investments for disadvantaged communities or other targeted areas. The state will explore layering additional programs on Opportunity Zones and EIFDs to increase the production of affordable and moderate-income housing."
Source: 2019-20 Governor's Budget Webpage
January 10, 2019
