Prohousing enhanced infrastructure financing districts.

The department must now adopt emergency regulations to implement the program directly, rather than first adopting separate program guidelines and then emergency regulations. This removes a two-step process and consolidates it into one.

The explicit exemption of program guidelines from the Administrative Procedure Act was removed. In its place, the bill now states that emergency regulations adopted under this section remain in effect until nonemergency regulations to implement the chapter become effective.

A 30-day public comment period requirement and the obligation for the department to provide written responses to substantive comments were removed entirely from Section 50899.19(c).

Removed the extensive list of additional activities that prohousing enhanced infrastructure financing districts could undertake beyond standard EIFD powers, including equitable quality of life improvements, nondeed restricted housing with displacement strategies, climate-friendly housing development support, transportation and mobility improvements, climate resilience improvements, public realm and neighborhood infrastructure, and site preparation/enabling infrastructure. These are now only accessible through the Infrastructure Partnership Financing Program.

Removed boundary flexibility provisions that allowed district boundaries to be coterminous with, smaller than, or extending beyond the establishing city or county's boundaries.

Restructured Section 53398.92 from a complex multi-condition eligibility framework into a simpler 'doing all of the following' format with three requirements: adopting a resolution under Section 53398.59, finding compliance with Section 8899.50, and adopting an infrastructure financing plan with a 10-year review cycle and affordable housing thresholds (20% low/moderate income plus 6% very low income, or 30% of project area affordable within 20 years).

Simplified the chapter exceptions in Section 53398.93 from a list of seven specific statutory exclusions to a single prohibition: the district shall not finance highways or interchanges.

Changed Section 50899.19 so that the department must adopt emergency regulations (exempt from the Administrative Procedure Act under Section 11346.1) to implement the Infrastructure Partnership Financing Program, rather than simply adopting guidelines. The emergency regulations remain in effect until nonemergency regulations are adopted, adding a time-limited implementation structure.

Changed the penalty for losing prohousing designation (Section 53398.96) from prohibiting the district from engaging in any activity described in the removed additional activities list to specifically prohibiting the district from applying for or receiving funding from the Infrastructure Partnership Financing Program until prohousing status is restored.

Fixed typo 'A city our or county' to 'A city or county' in Sections 53398.95 and 53398.96, and updated cross-references from subdivision (d) to subdivision (c) of Section 53398.92 to reflect the renumbering.

Establishes a new Infrastructure Partnership Financing Program (Chapter 20, Health and Safety Code, Section 50899.15 et seq.) administered by the Department of Housing and Community Development. Upon appropriation, the department would provide loans or grants to prohousing enhanced infrastructure financing districts for qualifying housing developments. The department must adopt operational guidelines, which are exempt from Administrative Procedure Act rulemaking requirements.

The fiscal committee designation changed from 'no' to 'yes,' indicating the bill now carries state fiscal implications due to the new Infrastructure Partnership Financing Program's loan and grant authority.

Prohousing enhanced infrastructure financing districts may now apply for funding from the Infrastructure Partnership Financing Program as an additional authorized activity under Section 53398.93(c).

Section 53398.92 was restructured. The old version listed four separate requirements (a through d) in a flat structure. The new version consolidates them into: (a) adopting a resolution under Section 53398.59, (b) finding compliance with Section 8899.50, and (c) adopting an infrastructure financing plan that both requires a 10-year compliance review AND requires either the 20 percent/6 percent affordability threshold or the 30 percent/20-year threshold.

The consequence of a jurisdiction losing its prohousing designation while having an established district was narrowed. Previously, the district could not engage in any activity described in subdivision (d) of Section 53398.93 (all additional activities like climate infrastructure, transportation improvements, etc.). Now, the district is only barred from applying for or receiving funding from the Infrastructure Partnership Financing Program until prohousing status is restored.

The amendment to Section 65940.1 of the Government Code (a technical change to website information posting requirements for cities, counties, and special districts) was removed from the bill entirely.

Added a new Article 5 (Sections 53398.89-53398.96) to the Government Code creating the Prohousing Enhanced Infrastructure Financing Act, which authorizes prohousing jurisdictions to establish special enhanced infrastructure financing districts with expanded funding and activity authorities.

Expanded the activities a prohousing EIFD may undertake beyond standard EIFD powers to include: equitable quality of life improvements, non-deed restricted housing paired with displacement strategies, climate-friendly infrastructure for higher density infill development, transportation and mobility improvements (transit access, pedestrian/bicycle infrastructure, first/last-mile connectivity), climate resilience improvements (green infrastructure, stormwater capture, heat mitigation, electrification support), public realm and neighborhood infrastructure (utilities, broadband, parks), and site preparation (remediation, demolition) to unlock housing production in infill areas.

Established requirements for a prohousing EIFD: the jurisdiction must be designated prohousing under Section 65589.9, the infrastructure financing plan must require either (a) at least 20% of new units affordable to low/moderate income plus 6% to very low income, or (b) at least 30% of total project area affordable to lower income households within 20 years; the jurisdiction must find compliance with fair housing law (Section 8899.50); and a compliance review is required every 10 years.

Added special provisions for small rural jurisdictions (cities under 25,000 population or counties under 200,000): the department shall evaluate their housing element submissions for evidence of prohousing policies to minimize supplementary documentation needs, and shall not require them to renew prohousing designations for at least four years.

Affordable housing units financed through these districts must remain available at required affordable costs for at least 55 years for rental units and 45 years for owner-occupied units, enforced through recorded covenants or restrictions.

Added a cap limiting additional points or preferences for safe parking, safe camping, and expedited approval policies so they do not exceed the minimum value awarded for policies that directly relate to planning, approval, or construction of housing.

A city or county cannot terminate a prohousing EIFD if the district has not complied with its affordable housing obligations. If a jurisdiction's prohousing designation is revoked, it must make a diligent effort to remedy within 120 days; if it fails, the district loses its expanded activity authorities until re-designated.

Expanded the definition of 'prohousing local policies' in Section 65589.9 to include: safe parking programs (with bathroom, security, and enrollment requirements), safe camping programs for unsheltered homeless individuals, expedited approval mechanisms for low-barrier navigation centers, emergency shelters, and supportive housing beyond existing statutory minimums, and establishment of a prohousing EIFD.

Jurisdictions that establish a prohousing EIFD and eligible projects located within one receive enhanced points or preference beyond the baseline already provided to other prohousing jurisdictions in competitive program scoring (AHSC, Transformative Climate Communities, Infill Incentive Grant, Infill Infrastructure Grant, and other programs). Funding awarded may be used for infrastructure that directly supports the district.

The original Section 65940.1 website transparency amendment was retained with only a minor technical correction (changing 'changes' to 'change'). The fiscal committee designation changed from 'no' to 'yes,' indicating the bill now has a state fiscal impact.