Cities and counties can create Infrastructure Financing Districts (IFDs) to pay for regional scale public works. IFDs can divert property tax increment revenues for 30 years to finance highways, transit, water systems, sewer projects, flood control, child care facilities, libraries, parks, and solid waste facilities. IFDs canít pay for maintenance, repairs, operating costs, and services.
Unlike redevelopment, the property in an IFD doesnít have to be blighted. IFDs and redevelopment agenciesí project areas canít overlap.
Forming an IFD is cumbersome. The city or county must develop an infrastructure plan, send copies to every landowner, consult with other local governments, and hold a public hearing. Every local agency that will contribute its property tax increment revenue to the IFD must approve the plan. Schools cannot shift their property tax increment revenues to the IFD. Once the other local officials approve, the city or county must still get the votersí approval to:
The statute authorizing IFDs is the Infrastructure Financing District Act (Government Code §53395, et seq.). The Legislature adopted this Act in 1990 (Senate Bill 308, Seymour, 1990).
The Attorney Generalís 1998 opinion interpreting the IFD Act is 81 Ops.Cal.Atty.Gen. 45 (Opinion 97-906; January 16, 1998).
For information about Carlsbadís IFD, contact Jim Elliott (760/602-2409) or Erin Letsch (760/602-2471) with the City of Carlsbad.
A short description of IFDs appears in "Chapter One: Introduction," by Peter M. Detwiler in Exactions and Impact Fees in California: A comprehensive guide to policy, practice, and the law, by William W. Abbott, et al., Solano Press Books: Point Arena, California, 2001.
In 1999, the Legislature adapted the IFD Act for projects along the
California-Mexico border. See Government Code §53398, et seq., added
by SB 207 (Peace, 1999).
Senate Local Government Committee
November 30, 2001