Downtown revitalization and economic recovery financing districts.

The bill text source changed from the official chaptered document format (with page headers, footers, and formal legislative markings) to a web-based display format that includes site navigation elements (skip to content, home, accessibility, FAQ, feedback, sitemap, login, search fields, and links to related bill pages). No substantive policy language was added or removed.

Removed all amendment history dates (July 3, July 17, September 5 Senate amendments; March 28, April 28 Assembly amendments) and replaced with passage dates: Passed the Assembly September 11, 2025 and Passed the Senate September 10, 2025.

Removed tracked line numbers (e.g., 'line 1', 'line 2') that were used in the amended version to show where changes occurred, producing a clean final text for the enrolled bill.

Changed the digest reference from 'AB 1445, as amended, Haney' to 'AB 1445, Haney', removing the 'as amended' designation now that the bill is in its final form.

Added standard enrolled bill elements: Governor receipt line with blank date/time fields, Chief Clerk of the Assembly and Secretary of the Senate signature blocks, and Private Secretary of the Governor block.

The bill header changed from the enrolled format (showing Assembly/Senate passage dates and a blank Governor signature block) to the chaptered format showing 'STATE OF CALIFORNIA AUTHENTICATED ELECTRONIC LEGAL MATERIAL,' the chapter number (642), and the approval date of October 11, 2025.

Page headers, footers, line wrapping, and column widths were reformatted to match the standard chaptered bill layout rather than the enrolled bill layout. All statutory text content remains identical.

Section 62456(h) now provides that if a city, county, or city and county does not issue certificates of occupancy, the first distribution of incremental tax revenue commences with the fiscal year after the project completes a final inspection. This makes the bill workable in localities that use different permitting processes.

The digest now describes that the bill requires the city council or board of supervisors of non-San Francisco local governments to adopt labor standards specific to commercial-to-residential conversion projects that opt in to receive incremental tax revenue, and subjects such projects to specified labor standards.

The term 'legislative body' is replaced throughout with 'legislative governing body,' and the definition in Section 62450(h) is changed from 'Legislative body' to 'Governing body.' This standardizes terminology across the bill.

Section 62451.5(b)(2) changes the vacancy rate requirement from 'located within an area where the commercial office building vacancy rate is 20 percent or greater' to 'located within a part of the city or county where the commercial office building vacancy rate is 20 percent or greater,' clarifying the geographic scope of the test.

The bill removes existing-law provisions requiring that a certain portion of ad valorem property tax revenue annually allocated to the local government be allocated to and apportioned to a special fund of the district for all lawful purposes, and that those revenues be returned to the local government when the district ceases to exist.

The fiscal committee designation changes from 'no' to 'yes,' indicating the bill now carries state-mandated fiscal impact requiring fiscal committee review.

Added an exemption stating that the affordability requirements (5 percent very low income for rent, 10 percent lower income for rent, or 10 percent moderate income for sale) shall not apply to the first 1,500,000 square feet of opted-in commercial-to-residential conversion projects within the City and County of San Francisco.

Added a new requirement that at least 30 percent of incremental tax revenues generated by a district outside of San Francisco must be used to finance the affordable housing units specified in the affordability requirements.

Removed provisions in Section 62457(d) that required ad valorem property tax revenue allocated to the local government to be apportioned to a special fund of the district, and that when the district ceases to exist those revenues would be apportioned back to the local government.

Changed the defined term from 'Legislative governing body' to 'Governing body' throughout the bill, simplifying the terminology used to refer to the city council or board of supervisors.

Changed the fiscal committee designation from 'no' to 'yes,' indicating the bill now has state-mandated fiscal implications requiring fiscal committee review.

The new Section 62451.5 now explicitly excludes the City and County of San Francisco from establishing a downtown revitalization and economic recovery financing district under this provision, since SF already has its own authority under Section 62451.

The bill no longer amends Section 65912.100 of the Government Code (the Affordable Housing and High Road Jobs Act of 2022 streamlined development process). The reference to 'affordable housing' was removed from the legislative digest.

Throughout the bill, San Francisco-specific language (references to the Board of Supervisors, 'San Francisco') was replaced with generic 'local government' and 'legislative body' language to make provisions applicable to all eligible local governments. The definition of 'Board of Supervisors' (which specifically meant SF's board) was removed.

A new requirement was added that districts may only finance commercial-to-residential conversion projects meeting all three criteria: (1) at least 75 percent of the site perimeter adjoins parcels with urban uses, (2) the project is in an area with a commercial office vacancy rate of 20 percent or greater, and (3) the project is located within a transit priority area.

A new definition for 'transit priority area' was added, incorporating the meaning from Section 21099 of the Public Resources Code.

Assembly Members Kalra and Lee were added as coauthors of the bill.

Any city, county, or city and county (not just San Francisco) may now establish a downtown revitalization and economic recovery financing district to finance commercial-to-residential conversion projects using incremental property tax revenues. New Section 62451.5 was added to provide this authority to all local governments.

All references to 'San Francisco' and 'Board of Supervisors' throughout the existing district provisions (Sections 62451-62462) were generalized to 'the local government' and 'legislative body' so the framework applies to any jurisdiction, not just San Francisco.

A full set of definitions was added in Section 62450, including terms like 'commercial-to-residential conversion project,' 'downtown revitalization and economic recovery financing district,' 'opted-in taxable property,' 'qualifying commercial building,' and income-based household categories.

Opted-in projects must meet affordability requirements: at least 5% of rental units affordable to very low income households, or 10% affordable to lower income households (rent), or 10% of sale units affordable to moderate income households. These requirements are waived for the first 1,500,000 square feet of opted-in projects.

Districts must hold annual public hearings, adopt annual reports by June 30, and conduct a 10-year review of whether requirements continue to be met. If a district fails to adopt its annual report, no additional properties may opt in until it does.

Incremental tax revenues generated by each conversion project are distributed back to that same project on a pay-go basis for up to 30 years or until the district ceases to exist. The district must cease to exist no more than 45 years after it first distributes funding.

Projects that opt in must comply with prevailing wage requirements and labor standards adopted by the local legislative body. If labor standards are not adopted, the project shall not receive incremental tax revenue or net available revenue.

A commercial-to-residential conversion project is not eligible to opt in after December 31, 2032. Projects must opt in before receiving their first building permit.