Local government: Second Neighborhood Infill Finance and Transit Improvements Act: Resilient Rebuilding Authority for the Los Angeles Wildfires.

Senator Allen's proposal to modify California's infrastructure financing framework introduces two distinct changes to local government authority. The legislation revises the Second Neighborhood Infill Finance and Transit Improvements Act (NIFTI-2) to authorize property tax revenue allocation for enhanced infrastructure financing districts, while discontinuing the current sales and use tax allocation provisions for resolutions adopted after January 1, 2026. The bill also removes the requirement that district boundaries align with city or county jurisdictional lines.

The legislation establishes specific requirements for infrastructure financing plans under NIFTI-2. Districts must allocate at least 40 percent of funds toward housing for households earning below 60 percent of area median income, with half supporting those earning between 30-60 percent and half serving households below 30 percent or permanent supportive housing. An additional 10 percent must fund parks, urban forestry, or active transportation projects. The plans must prioritize housing access for residents displaced from the district and those employed within two miles.

In response to the January 2025 wildfires, the bill authorizes Los Angeles County to create a Resilient Rebuilding Authority to coordinate recovery efforts across impacted jurisdictions. This authority may issue and manage recovery funds, coordinate public and private reconstruction activities, purchase properties for land banking with priority resale to displaced residents, facilitate workforce development, and enhance financing options for rebuilding. The authority's mandate includes promoting resilient construction standards and supporting the reconstruction of rental and affordable housing stock lost in the fires.