Enhanced Infrastructure Finance Districts, commonly known as EIFDs, were revamped by SB 628 in 2014 and AB 313 in 2015 and are being revamped again in 2019 through SB 128. EIFDs became legislatively popular as a “replacement” for redevelopment in the wake of dissolution, as they allow for multiple cities, counties, or agencies to form Joint Powers Agreements (JPAs) in which each cooperating entity pledges a portion of its share of tax increment to issue debt and fund infrastructure projects that will have widespread community benefit. Examples include West Sacramento’s Bridge District Specific Plan and the Los Angeles River Revitalization.
SB 128 is a useful piece of legislation because while EIFDs currently require no voter approval in formation, there is a 55% voter approval requirement to authorize bonds. Because Tax Increment Financing (TIF) is not approving a new tax, simply an alternate use of existing tax revenues (usually with direct benefits to taxpayers), voter approval becomes an extra burden when EIFDs attempt to issue debt. There is a public hearing process for EIFD formation that allows taxpayers to involve themselves early in the progression of the EIFD, which this legislation does not remove.
SB 128 is a simple change to existing law, but one that should create an easier more streamlined process that will hopefully increase the use of EIFDs to fund infrastructure projects and economic development throughout the state.