In 1980, the California State Legislature passed the California Industrial Development Financing Act ("the 1980 Act"), which enabled every city and county in the state to create a local issuing entity. The Act authorizes each local government issuing entity to issue tax-exempt industrial development bonds (IDBs) to finance eligible capital facilities for manufacturing businesses. These funded projects must generate substantial public benefits in return for the implicit public subsidy of tax exemption.
To this end, the Act also created the California Industrial Development Financing Advisory Commission (CIDFAC or the Commission) to advise local governments and independently review IDB applications for the provision of public benefits, and approve the sale of IDBs by the local authority. Statutes governing the Authority's functions are included in Title 10 of the California Government Code. Regulations governing certain operations and the Authority's fee structure are included in the California Industrial Development Financing Act Regulations, Article 1, General Provisions.
The primary objective of CIDFAC is to provide manufacturers in California with an alternative, low-cost source of funds to finance capital expenditures, which will increase employment or otherwise contribute to economic development. To this end, CIDFAC carefully reviews the public benefits generated by a project, particularly job creation, and determines whether these benefits will significantly outweigh any detrimental public effects from the project. In addition, CIDFAC maintains a statewide perspective to ensure that one entity of the state is not adversely affected by the issuance of IDBs by another jurisdiction.
CIDFAC holds monthly meetings in Sacramento to consider IDB financing applications and handle other administrative matters. CIDFAC staff is located in Sacramento.