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AB 2110

Workforce Housing Enhanced Infrastructure Financing Act.

2025-2026 Regular Session Introduced by Natasha Johnson

Creates Tax Increment Financing Districts to fund workforce housing for public safety/education/health care/manufacturing personnel using incremental property taxes.

From committee: Do pass and re-refer to Com. on APPR. with recommendation: To Consent Calendar. (Ayes 9. Noes 0.) (June 30). Re-referred to Com. on APPR.
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Bill Summary · AB 2110

Summary of AB 2110 (2025-2026) — Local financing: workforce housing: tax increment financing district

Note: This summary covers the bill as amended and moving through the California Legislature in 2025-2026. It is intended to explain purpose, key provisions, who is affected, and timeline/process implications.

1) Purpose and intent

  • AB 2110 would authorize a new type of locally governed financing mechanism: Tax Increment Financing Districts (TIFDs) dedicated to funding workforce housing.
  • Specifically, the districts would finance construction, rehabilitation, and upgrades of housing for designated workforce populations (public safety, education, health care, or manufacturing personnel) and related planning/design activities.
  • The bill aims to leverage incremental property tax revenue to fund housing projects meeting occupancy and affordability criteria, expanding the tools available to local governments for affordable/workforce housing.

2) Key provisions and changes

  • Authorizes creation of Tax Increment Financing Districts under Chapter 2.8.5 of the Government Code (new) to fund workforce housing.
  • District governance and participation
    • Governing board composition varies by number of participating taxing entities. Generally, it includes a majority of representatives from participating taxing entities’ legislative bodies and at least two public members who are public safety, education, health care, or manufacturing personnel.
    • Members serve on the board with no compensation but may be reimbursed for actual expenses.
    • The district must adopt a financing plan and can be established only after required resolutions of intention and plan adoption.
  • Eligible financing and projects
    • Financing plan may authorize:
    • Construction of residential housing that meets occupancy and affordability criteria.
    • Rehabilitation, repair, and upgrades to such housing.
    • Planning and design work related to the housing activities.
    • Housing projects must meet the following conditions:
    • At least 80% of units reserved for workforce personnel (public safety, education, health care, or manufacturing).
    • All units deed-restricted such that at least 70% serve lower-income households and the remaining 30% serve moderate-income households.
    • Projects may be single-family or multifamily and may be mixed-use if at least 80% of project square footage is residential.
    • Replacement housing required for any units removed or destroyed during development.
  • Limitations on districts and redevelopment linkage
    • If a city/county created a redevelopment agency (or successor), certain governance/financing participation provisions apply, including potential additional certifications and oversight.
    • The district cannot exercise eminent domain.
    • District outcomes may be constrained by existing Redevelopment Law components (e.g., Redevelopment Property Tax Trust Fund considerations and Oversight Board/Department of Finance findings when overlapping former redevelopment areas exist).
  • Tax division and funding
    • The financing plan can designate how incremental taxes are allocated:
    • A baseline portion (based on last equalized assessment) goes to affected taxing entities.
    • Any incremental tax revenue beyond that baseline can be allocated to the district’s special fund to finance permitted activities, subject to plan terms and approvals.
    • The plan may also allocate other revenue sources (loans, grants, bonds, etc.) to finance district activities.
    • The district’s life is capped (typically up to 45 years for tax allocations, with project-area-specific limits), after which tax allocations end.
  • Public hearings, protests, and elections
    • District formation requires public hearings and a protest process.
    • If protests from landowners and residents reach certain thresholds (between 25% and 50% of those 18+ in the district area), an election by mail ballot may be triggered to approve the financing plan.
    • A majority vote (landowner/resident election) is required to adopt the financing plan; if a majority protests, the district proceedings terminate.
    • If the plan is not rejected at the first hearing, a second protest hearing can trigger an election; otherwise, the plan may be adopted by resolution subject to referendum.
  • Bond issuance
    • The governing board may initiate bond issuance by a two-thirds vote of voters within the district.
    • Bonds would be issued in one or more series, with standard bond terms and protections; debt is limited to the district (not a general obligation of the city/county/state).
  • Accountability and audits
    • Independent audits required:
    • Controller audits every five years after the district allocates $1 million in tax increment revenues.
    • Independent financial and performance audits every two years (or as requested by the Governor/Legislature) with reports to the Controller, Director of Finance, and Joint Legislative Budget Committee.
  • Public access and transparency
    • Financing plans and related documents must be publicly accessible (via website and public meetings).
    • Notices and hearings require published notices in newspapers or equivalent public postings, with translations where a significant non-English-speaking population exists.

3) Who/what would be affected

  • Local governments (cities, counties, or joint powers authorities) could establish TIFDs to fund workforce housing.
  • Affected taxing entities (including cities/counties and other local government entities that participate in tax-sharing) would be involved in approving the financing plan and potential tax allocations.
  • Landowners and district residents would have public notice and protest rights, including potential mail-ballot elections if protests meet thresholds.
  • Public safety, education, health care, and manufacturing personnel would be the targeted beneficiary population for occupancy and workforce housing units.
  • The District would have its own governance, financing mechanisms, and annual reporting/audits, distinct from general city/county operations.

4) Procedural/timeline aspects

  • Formation process:
    • Resolution of intention to establish district and describe boundaries, proposed projects, and potential tax divisions.
    • Public hearings with a two-step process; possible protest and election if thresholds are met.
  • Financing plan approvals:
    • The financing plan must be adopted in accordance with the protest/election outcomes, with public notice and environmental review as applicable.
  • Tax division and timeline:
    • Tax increment allocation governed by plan; district ends after specified 45-year horizon or project-area-specific term limits.
  • Debt and bonds:
    • Bond elections require two-thirds voter approval within the district; bond issuance would follow standard municipal finance processes.
  • Accountability:
    • Regular independent audits (every two years) and periodic Controller audits (every five years after reaching $1M in tax increment revenue).

Bottom-line

AB 2110 creates a new tool for California cities/counties to finance workforce housing through tax increment financing districts. The model emphasizes housing for public safety, education, health care, and manufacturing personnel with strong affordability targets, governance diversity, public participation, and robust auditing/transparency requirements. It also places careful oversight on districts overlapping former redevelopment areas and ties district formation to approvals by affected taxing entities.

Compiled from official sources — confirm details with the bill’s official record.

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