Enhanced infrastructure financing districts: California Capital City Downtown Revitalization Act.

Senator Ashby presents a targeted financing framework for Sacramento’s downtown by authoring the California Capital City Downtown Revitalization Act, which would authorize an enhanced infrastructure financing district within the downtown Sacramento area and invite affected taxing entities to opt in. The district would be permitted to finance public capital facilities or other projects of communitywide significance in the downtown area, with the financing plan subject to standard process requirements, including adoption by the public financing authority following a public hearing and protest procedure. The plan would specify how tax revenues within the district are divided among participating entities and the district itself, and it would authorize bonds to be issued in connection with the district’s activities.

The bill creates specific revenue allocations under the enhanced district framework: the portion of taxes produced by the district that equals the baseline level for each affected entity would be allocated to those entities as taxes on all other property are paid. Any levied taxes above that baseline, as specified in the adopted financing plan and agreed to by participating entities, would be allocated to a special fund of the district for its purposes. If the district’s total assessed value remains at or below the baseline, all district taxes would continue to be paid to the affected entities; upon dissolution, funds would be paid to those entities as taxes on all other property are paid. The bill also contemplates that debt or obligations of a district overlapping former redevelopment project areas be subordinate to those obligations, and it defines “net available revenue” as distributions from the Redevelopment Property Tax Trust Fund available after preexisting commitments, excluding funds deposited into the trust fund or funds payable to certain educational entities. In addition, the district may utilize other specified revenue sources with voter approval and an approved plan, and it may receive state funds when explicitly allowed.

A new codified provision designates the area to be financed as the downtown Sacramento geographic area, bounded by the Sacramento River, the American River, Broadway, and Alhambra Boulevard, and allows an affected taxing entity located wholly or partly in Sacramento County to opt in to the district. The act states that, upon creation, the district may accept state funds and remains subject to the broader enhanced infrastructure financing district framework. The bill includes a legislative finding that a special statute is necessary to address the unique needs of the downtown Sacramento area, and it contemplates integrating amendments proposed by another measure so that those amendments become operative only if both bills are enacted and this bill becomes law after that measure.

Implementation of the more expansive provisions depends on a conditional timing framework: certain amendments to the underlying revenue provisions would become operative only if both this bill and the companion measure are enacted and effective by a specified date, with this bill taking effect after the companion measure. In practice, this means the enhanced district framework for downtown Sacramento would align with the standard process for establishing an EIFD, including plan adoption and voter-approved funding, while accommodating a pathway to accept state funds and enabling opt-in participation by local taxing entities.