BILL NUMBER: AB 164	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Wieckowski

                        JANUARY 23, 2013

   An act to amend Section 5956.6 of the Government Code, relating to
infrastructure financing.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 164, as introduced, Wieckowski. Infrastructure financing.
   Existing law permits a governmental agency to solicit proposals
and enter into agreements with private entities for the design,
construction, or reconstruction by, and may lease to, private
entities, for specified types of fee-producing infrastructure
projects. Existing law requires certain provisions to be included in
the lease agreement between a governmental agency undertaking an
infrastructure project and a private entity, as specified.
   This bill would require a lease agreement between a governmental
agency undertaking an infrastructure project and a private entity to
include performance bonds as security to ensure the completion of the
construction of the facility and payment bonds to secure the payment
of claims of laborers, mechanics, and materialmen employed on the
work under contract.
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 5956.6 of the Government Code is amended to
read:
   5956.6.  (a) For purposes of facilitating projects, the agreements
specified in Section 5956.4 may include provisions for the lease of
rights-of-way in, and airspace over, property owned by a governmental
agency, for the granting of necessary easements, and for the
issuance of permits or other authorizations to enable the private
entity to construct infrastructure facilities supplemental to
existing government-owned facilities. Infrastructure constructed by a
private entity pursuant to this chapter shall, at all times, be
owned by a governmental agency, unless the governmental agency, in
its discretion, elects to provide for ownership of the facility by
the private entity during the term of the agreement. The agreement
shall provide for the lease of those facilities to, or ownership by,
the private entity for up to 35 years. In consideration therefor, the
agreement shall provide for complete reversion of the privately
constructed facility to the governmental agency at the expiration of
the lease at no charge to the governmental agency. Subsequent to the
expiration of the lease or ownership period, the governmental agency
may continue to charge fees for use of the infrastructure facility.
If, after the expiration of the lease or ownership period, the
governmental agency continues to lease airspace rights to the private
entity, it shall do so at fair market value.
   (b) The agreement between the governmental agency and the private
entity shall include, but need not be limited to, provisions to
ensure the following:
   (1) Compliance with the California Environmental Quality Act
(Division 13 (commencing with Section 21000) of the Public Resources
Code). Neither the act of selecting a proposed project or a private
entity, nor the execution of an agreement with a private entity,
shall require prior compliance with the act. However, appropriate
compliance with the act shall thereafter occur before project
development commences.
   (2)  Security for the construction of the facility
  Performance bonds as security    to
ensure  its  completion  ,   of
the construction of the facility  and contractual provisions
that are necessary to protect the revenue streams of the project.
   (3) Adequate financial resources of the private entity to design,
build, and operate the facility, after the date of the agreement.
   (4) Authority for the governmental agency to impose user fees for
use of the facility in an amount sufficient to protect the revenue
streams necessary for projects or facilities undertaken pursuant to
this chapter. User fee revenues shall be dedicated exclusively to
payment of the private entity's direct and indirect capital outlay
costs for the project, direct and indirect costs associated with
operations, direct and indirect user fee collection costs, direct and
indirect costs of administration of the facility, reimbursement for
the direct and indirect costs of maintenance, and a negotiated
reasonable return on investment to the private entity.
   (5) As a precondition to the imposition or increase of a user fee,
the governmental agency shall conduct at least one public hearing at
which public testimony will be received regarding a proposed user
fee revenue or increase in user fee revenues. The public hearing
shall precede the action by the governmental agency to actually
impose a user fee or to increase an existing user fee. The
governmental agency shall consider the public testimony prior to
imposing a new or increased user fee. The governmental agency shall
provide the following notices and utilize the following procedures:
   (A) Notice of the date, time, and place of the meeting, including
a general explanation of the matter to be considered, shall be mailed
at least 14 days prior to the meeting to any interested party who
files a written request with the governmental agency for mailed
notice of the meeting on new or increased fees or service charges.
Any written request for mailed notices shall be valid for one year
from the date on which it is filed unless a renewal request is filed
prior to the expiration of the one-year period for which the written
request was filed. The legislative body may establish a reasonable
annual charge for sending notices based on the estimated cost of
providing the service.
   (B) At least 10 days prior to the meeting, the governmental agency
shall make available to the public data that supports the amount of
the fee or the increase in the fee.
   (C) (i) At least 10 days prior to the meeting, the governmental
agency shall publish a notice in a newspaper of general circulation
in that agency's jurisdiction stating the date, time, and place of
the meeting, including a general explanation of the matter to be
considered.
   (ii) Any costs incurred by the governmental agency in conducting
the meeting or meetings required by this section may be recovered
from fees charged for the services that are the subject of the fee.
   (iii) For transportation projects specifically authorized by this
chapter, at least 10 days prior to the meeting, the governmental
agency shall publish for four consecutive times, a notice in the
newspaper of general circulation in the affected area stating in no
smaller that 10-point type a notice specifying the subject of the
hearing, the date, time, and place of the meeting, and in at least
8-point type a general explanation of the matter to be considered.
   (D) No local agency shall levy a new fee or service charge or
increase an existing fee or service charge to an amount that exceeds
the estimated amount required to provide the service for which the
fee or service charge is levied and a reasonable rate of return on
investment, pursuant to paragraph (4). Any action by a local agency
to levy a new fee or service charge or to approve an increase in an
existing fee or service charge pursuant to this chapter shall be
taken only by ordinance or resolution. The legislative body of a
local agency shall not delegate the authority to adopt a new fee or
service charge, or to increase a fee or service charge.
   (6) Require that if the legislative body of the governmental
agency determines that fees or service charges create revenues in
excess of the actual cost for which the user fee revenues are
dedicated and a reasonable rate of return on investment, pursuant to
paragraph (4), those revenues shall either be applied to any
indebtedness incurred by the private entity with respect to the
project, be paid into a reserve account in order to offset future
operation costs, be paid into the appropriate government account, be
used to reduce the user fee or service charge creating the excess, or
a combination of these sources.
   (7) Require the private entity to maintain the facility in good
operating condition at all times, including the time the facility
reverts to the governmental agency.
   (8) Preparation by the private entity of an annual audited report
accounting for the income received and expenses to operate the
facility. The private entity shall make that report available to any
member of the public for a cost not to exceed the cost of
reproduction of the report.
   (9) Provision for a buyout of the private entity by the
governmental entity in the event of termination or default before the
end of the lease term.
   (10) Provision for appropriate indemnity promises between the
governmental agency and the private entity.
   (11) Provision requiring the private entity to maintain insurance
with those coverages and in those amounts that the governmental
agency deems appropriate.
   (12) In the event of a dispute between the governmental agency and
the private entity, both parties shall be entitled to all available
legal or equitable remedies. 
   (13) Payment bonds to secure the payment of claims of laborers,
mechanics, and materialmen employed on the work under the contract.
Payment bonds required under this subdivision shall conform to the
requirements of Sections 3247 to 3252, inclusive, of the Civil Code.