Enhanced infrastructure financing districts and community revitalization and investment areas: allocation of taxes: agricultural land exclusion.

Senator Cabaldon’s measure weaves agricultural land protections into California’s local financing framework by excluding parcels enrolled in Williamson Act contracts and farmland security zones from tax allocations within enhanced infrastructure financing districts and community revitalization and investment areas, and by linking the exclusions to a broader set of changes to how tax revenues are distributed to districts and authorities.

Within enhanced infrastructure financing districts, the bill preserves a two-tier approach to tax allocation: a base portion tied to the district’s target tax rate is allocated to the affected taxing entities, while any excess specified in the district’s plan is directed into a district special fund for approved purposes. The legislation also provides that, until the district’s total assessed value surpasses its baseline, all taxes are paid to the respective taxing entities, and upon dissolution, funds revert to those entities. A key modification adds that parcels under Williamson Act contracts or farmland security zone contracts (including those canceled or nonrenewed, with an interim exclusion until the next equalized assessment roll or rezoning) are not included in the tax allocations to the district or authority.

The bill also adjusts the community revitalization and investment plan framework. It defines how taxes may be allocated among consenting local agencies and school entities, with any in-plan excess directed to the authority’s special fund to finance planned improvements, and allows agencies to advance funds to the authority for repayment from tax revenue. It specifies that the authority’s receipt of tax increment funds becomes effective in the tax year following plan adoption, and provides that allocations may be modified by a governing body, subject to ensuring a portion of tax increment supports affordable housing. The proposal requires memoranda of understanding for administrative and overhead use and preserves subordinate treatment of tax increment to preexisting enforceable obligations in overlapping redevelopment areas.

Implementation of the agricultural land exclusions carries an operative condition: the adjustments to the tax-allocation provisions are contingent on both this measure and a companion bill being enacted, with this measure taking effect only if it is enacted after the companion bill. The exclusions are codified to apply to parcels enrolled in Williamson Act or farmland security zone contracts, and to contracts that have been canceled or nonrenewed until the next applicable assessment event or rezoning, aligning parcel-specific treatment with the plan’s timing and governance. This framework sits within the broader landscape of local infrastructure financing and community revitalization tools, clarifying how agricultural lands participate in or are withheld from tax-increment mechanisms.