Assembly BillChaptered/SignedGovernment
AB 2397: Local government: community facilities districts: financing.
What AB 2397 does, verified October 2, 2026
This bill would prohibit a local agency from denying or conditionally denying an application for financing through a community facilities district if it's related to a housing development project that includes affordable units for lower-income households or moderate-income households. The local agency must make written findings based on a preponderance of the evidence to support the decision. The bill aims to ensure that the decision is fair and not based on arbitrary or discriminatory reasons. The bill's provisions would be construed consistently with the Housing Accountability Act, which prohibits similar discriminatory practices in housing development projects. The changes proposed by this bill would address a matter of statewide concern and apply to all cities, including charter cities.
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Last action: Chaptered by Secretary of State - Chapter 938, Statutes of 2026. (2026-09-30)Alert me
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| Sep. 30, 2026 | Chaptered by Secretary of State - Chapter 938, Statutes of 2026. |
| Sep. 30, 2026 | Approved by the Governor. |
| Sep. 15, 2026 | Enrolled and presented to the Governor at 3 p.m. |
| Aug. 31, 2026 | Senate amendments concurred in. To Engrossing and Enrolling. (Ayes 76. Noes 0. Page 7048.). |
| Aug. 19, 2026 | In Assembly. Concurrence in Senate amendments pending. |
Latest bill textChaptered version, September 30, 2026 · 831 words
Assembly Bill No. 2397
CHAPTER 938
An act to add Section 53316.8 to the Government Code, relating to local government.
[ Approved by Governor September 30, 2026. Filed with Secretary of State September 30, 2026. ]
LEGISLATIVE COUNSEL'S DIGEST
AB 2397, Ta. Local government: community facilities districts: financing.
Existing law, the Mello-Roos Community Facilities Act of 1982, authorizes a local agency, as defined, to initiate proceedings to establish a community facilities district as an alternative method of financing certain public capital facilities and services, especially in developing areas undergoing rehabilitation, only if it has first considered and adopted local goals and policies, as prescribed. Existing law authorizes a local agency to take any actions or make any determinations which it determines are necessary or convenient to carry out the purposes of the act and which are not otherwise prohibited by law.
This bill would prohibit the legislative body of a local agency from taking certain actions with respect to a critical housing infrastructure district, as defined, including abandoning the proposed establishment of the district, as specified, unless prior to taking the action it makes certain findings based upon substantial evidence, including that establishment of the district, levying the special taxes, or incurring bonded indebtedness, as applicable, would have a specific adverse impact upon the public interest. The bill would specify that these provisions do not require or prohibit the legislative body from taking any other action authorized by the act with respect to a critical housing infrastructure district, as specified.
The bill would include findings that changes proposed by this bill address a matter of statewide concern rather than a municipal affair and, therefore, apply to all cities, including charter cities.
The people of the State of California do enact as follows:
SECTION 1.
Section 53316.8 is added to the Government Code, to read:53316.8.
(a) For purposes of this section, all of the following definitions apply:(1) “Critical housing infrastructure district” means a community facilities district that meets all of the following criteria:
(A) The district has been established, or is proposed to be established, solely to finance facilities described in subdivisions (e) and (f) of Section 53313.5 that serve a housing development project that includes housing for very low, low-, or moderate-income households.
(B) Proceedings for establishment of the district were instituted by petition under subdivision (c) of Section 53318 signed by owners of 100 percent of the area of land proposed to be included within the district.
(C) Any special taxes proposed to be levied by the district are eligible to be approved by the landowners of the proposed district in accordance with subdivision (b) of Section 53326.
(2) “Housing for very low, low-, or moderate-income households” has the same meaning as defined in paragraph (3) of subdivision (h) of Section 65589.5.
(b) The legislative body shall not take any of the following actions with respect to a critical housing infrastructure district unless it makes any of the findings set forth in subdivision (c):
(1) Abandon the proposed establishment of the district pursuant to Section 53325.
(2) Refuse to adopt an ordinance levying special taxes pursuant to Section 53340.
(3) Refuse to adopt a resolution necessary to incur bonded indebtedness pursuant to Sections 53345, 53351, or 53356.
(c) Prior to taking any action described in subdivision (b), the legislative body shall make at least one of the following findings based upon substantial evidence:
(1) Establishment of the district, levying the special taxes, or incurring bonded indebtedness, as applicable, would have a specific adverse impact upon the public interest.
(2) Establishment of the district, levying the special taxes, or incurring bonded indebtedness, as applicable, would result in housing costs for the housing for very low, low-, or moderate-income households that no longer meet the definition of affordable housing costs pursuant to Section 50052.5 of the Health and Safety Code.
(3) If the site has been identified in the housing element pursuant to Sections 65583 and 65583.2 as a site to accommodate any portion of the jurisdiction’s regional housing need for low-income or very low income households, establishment of the district, levying the special taxes, or incurring bonded indebtedness, as applicable, is not necessary for development of the site at the densities specified in subparagraph (B) of paragraph (3) of subdivision (c) of Section 65583.2.
(d) This section shall not require or prohibit the legislative body from taking any other action authorized by this chapter with respect to a critical housing infrastructure district, including, without limitation, modifying the resolution of intention pursuant to Section 53325.
SEC. 2.
The Legislature finds and declares that increasing housing production is a matter of statewide concern and is not a municipal affair as that term is used in Section 5 of Article XI of the California Constitution, and one of the impediments to housing production is the inability to secure infrastructure financing. Therefore, Section 1 of this act adding Section 53316.8 to the Government Code applies to all cities, including charter cities.Text of AB 2397 as chaptered, from the official record. Connect Plus keeps every version and highlights what changed.Compare versions