Amended in Assembly May 13, 2015

California Legislature—2015–16 Regular Session

Assembly Bill No. 1533

Introduced by Committee on Jobs, Economic Development, and the Economy (Assembly Members Eduardo Garcia (Chair), Kim (Vice Chair), Chau, Chu, Gipson, and Irwin)

March 24, 2015

An act to amend Section 63010 of, and to amend and renumber Section 12098.7 of, the Government Code, relating to state government.

LEGISLATIVE COUNSEL’S DIGEST

AB 1533, as amended, Committee on Jobs, Economic Development, and the Economy. Infrastructure financing.

(1) The Bergeson-Peace Infrastructure and Economic Development Bank Act establishes the California Infrastructure and Economic Development Bank, within the Governor’s Office of Business and Economic Development, to be governed by a specified board of directors. The act makes findings and declarations, provides definitions, and authorizes the board to take various actions in connection with the bank, including the issuance of bonds, as specified.

This bill, among other things, would revise the definition of economic development facilities to include facilities that are used to provide goods movement and would define goods movement-related infrastructure. The bill would revise the definition of port facilities to specifically reference airports, landports, waterports, and begin delete railports, and would expand the definition of a participating party to include an international governmental entity. end delete begin insert railports. end insert

(2) Existing law authorizes the Governor’s Office of Business and Economic Development and its director to expend specified funds.

This bill would renumber this provisions, and would instead authorize the California Infrastructure and Economic Development Bank and its executive director to expend these funds, as specified.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Section 63010 of the Government Code is
amended to read:

63010.  

For purposes of this division, the following words and
terms shall have the following meanings unless the context clearly
indicates or requires another or different meaning or intent:

(a) “Act” means the Bergeson-Peace Infrastructure and
Economic Development Bank Act.

(b) “Bank” means the California Infrastructure and Economic
Development Bank.

(c) “Board” or “bank board” means the Board of Directors of
the California Infrastructure and Economic Development Bank.

(d) “Bond purchase agreement” means a contractual agreement
executed between the bank and a sponsor, or a special purpose
trust authorized by the bank or a sponsor, or both, whereby the
bank or special purpose trust authorized by the bank agrees to
purchase bonds of the sponsor for retention or sale.

(e) “Bonds” means bonds, including structured, senior, and
subordinated bonds or other securities; loans; notes, including
bond, revenue, tax, or grant anticipation notes; commercial paper;
floating rate and variable maturity securities; and any other
evidences of indebtedness or ownership, including certificates of
participation or beneficial interest, asset backed certificates, or
lease-purchase or installment purchase agreements, whether taxable
or excludable from gross income for federal income taxation
purposes.

(f) “Cost,” as applied to a project or portion thereof financed
under this division, means all or any part of the cost of construction,
renovation, and acquisition of all lands, structures, real or personal
property, rights, rights-of-way, franchises, licenses, easements,
and interests acquired or used for a project; the cost of demolishing
or removing any buildings or structures on land so acquired,
including the cost of acquiring any lands to which the buildings
or structures may be moved; the cost of all machinery, equipment,
and financing charges; interest prior to, during, and for a period
after completion of construction, renovation, or acquisition, as
determined by the bank; provisions for working capital; reserves
for principal and interest and for extensions, enlargements,
additions, replacements, renovations, and improvements; and the
cost of architectural, engineering, financial and legal services,
plans, specifications, estimates, administrative expenses, and other
expenses necessary or incidental to determining the feasibility of
any project or incidental to the construction, acquisition, or
financing of any project, and transition costs in the case of an
electrical corporation.

(g) “Economic development facilities” means real and personal
property, structures, buildings, equipment, and supporting
components thereof that are used to provide industrial, recreational,
research, commercial, utility, goods movement, or service
enterprise facilities, community, educational, cultural, or social
welfare facilities and any parts or combinations thereof, and all
facilities or infrastructure necessary or desirable in connection
therewith, including provision for working capital, but shall not
include any housing.

(h) “Electrical corporation” has the meaning set forth in Section
218 of the Public Utilities Code.

(i) “Executive director” means the Executive Director of the
California Infrastructure and Economic Development Bank
appointed pursuant to Section 63021.

(j) “Financial assistance” in connection with a project, includes,
but is not limited to, any combination of grants, loans, the proceeds
of bonds issued by the bank or special purpose trust, insurance,
guarantees or other credit enhancements or liquidity facilities, and
contributions of money, property, labor, or other things of value,
as may be approved by resolution of the board or the sponsor, or
both; the purchase or retention of bank bonds, the bonds of a
sponsor for their retention or for sale by the bank, or the issuance
of bank bonds or the bonds of a special purpose trust used to fund
the cost of a project for which a sponsor is directly or indirectly
liable, including, but not limited to, bonds, the security for which
is provided in whole or in part pursuant to the powers granted by
Section 63025.1; bonds for which the bank has provided a
guarantee or enhancement, including, but not limited to, the
purchase of the subordinated bonds of the sponsor, the subordinated
bonds of a special purpose trust, or the retention of the subordinated
bonds of the bank pursuant to Chapter 4 (commencing with Section
63060); or any other type of assistance deemed appropriate by the
bank or the sponsor, except that no direct loans shall be made to
nonpublic entities other than in connection with the issuance of
rate reduction bonds pursuant to a financing order or in connection
with a financing for an economic development facility.

For purposes of this subdivision, “grant” does not include grants
made by the bank except when acting as an agent or intermediary
for the distribution or packaging of financing available from
federal, private, or other public sources.

(k) “Financing order” has the meaning set forth in Section 840
of the Public Utilities Code.

(l) “Guarantee trust fund” means the California Infrastructure
Guarantee Trust Fund.

(m) “Infrastructure bank fund” means the California
Infrastructure and Economic Development Bank Fund.

(n) “Loan agreement” means a contractual agreement executed
between the bank or a special purpose trust and a sponsor that
provides that the bank or special purpose trust will loan funds to
the sponsor and that the sponsor will repay the principal and pay
the interest and redemption premium, if any, on the loan.

(o) “Participating party” means any person, company,
corporation, association, state, begin delete international, end delete begin insert or end insert municipal
governmental entity, partnership, firm, or other entity or group of
entities, whether organized for profit or not for profit, engaged in
business or operations within the state and that applies for financing
from the bank in conjunction with a sponsor for the purpose of
implementing a project. However, in the case of a project relating
to the financing of transition costs or the acquisition of transition
property, or both, on the request of an electrical corporation, or in
connection with financing for an economic development facility,
or for the financing of insurance claims, the participating party
shall be deemed to be the same entity as the sponsor for the
financing.

(p) “Project” means designing, acquiring, planning, permitting,
entitling, constructing, improving, extending, restoring, financing,
and generally developing public development facilities or economic
development facilities within the state or financing transition costs
or the acquisition of transition property, or both, upon approval of
a financing order by the Public Utilities Commission, as provided
in Article 5.5 (commencing with Section 840) of Chapter 4 of Part
1 of Division 1 of the Public Utilities Code.

(q) “Public development facilities” means real and personal
property, structures, conveyances, equipment, thoroughfares,
buildings, and supporting components thereof, excluding any
housing, that are directly related to providing the following:

(1) “City streets” including any street, avenue, boulevard, road,
parkway, drive, or other way that is any of the following:

(A) An existing municipal roadway.

(B) Is shown upon a plat approved pursuant to law and includes
the land between the street lines, whether improved or unimproved,
and may comprise pavement, bridges, shoulders, gutters, curbs,
guardrails, sidewalks, parking areas, benches, fountains, plantings,
lighting systems, and other areas within the street lines, as well as
equipment and facilities used in the cleaning, grading, clearance,
maintenance, and upkeep thereof.

(2) “County highways” including any county highway as defined
in Section 25 of the Streets and Highways Code, that includes the
land between the highway lines, whether improved or unimproved,
and may comprise pavement, bridges, shoulders, gutters, curbs,
guardrails, sidewalks, parking areas, benches, fountains, plantings,
lighting systems, and other areas within the street lines, as well as
equipment and facilities used in the cleaning, grading, clearance,
maintenance, and upkeep thereof.

(3) “Drainage, water supply, and flood control” including, but
not limited to, ditches, canals, levees, pumps, dams, conduits,
pipes, storm sewers, and dikes necessary to keep or direct water
away from people, equipment, buildings, and other protected areas
as may be established by lawful authority, as well as the
acquisition, improvement, maintenance, and management of
floodplain areas and all equipment used in the maintenance and
operation of the foregoing.

(4) “Educational facilities” including libraries, child care
facilities, including, but not limited to, day care facilities, and
employment training facilities.

(5) “Environmental mitigation measures” including required
construction or modification of public infrastructure and purchase
and installation of pollution control and noise abatement
equipment.

(6) “Parks and recreational facilities” including local parks,
recreational property and equipment, parkways, and property.

(7) “Port facilities” including airports, landports, waterports,
railports, docks, harbors, ports of entry, piers, ships, small boat
harbors and marinas, and any other facilities, additions, or
improvements in connection therewith, that transport goods or
persons.

(8) “Power and communications” including facilities for the
transmission or distribution of electrical energy, natural gas, and
telephone and telecommunications service.

(9) “Public transit” including air and rail transport, airports,
guideways, vehicles, rights-of-way, passenger stations,
maintenance and storage yards, and related structures, including
public parking facilities, and equipment used to provide or enhance
transportation by bus, rail, ferry, or other conveyance, either
publicly or privately owned, that provides to the public general or
special service on a regular and continuing basis.

(10) “Sewage collection and treatment” including pipes, pumps,
and conduits that collect wastewater from residential,
manufacturing, and commercial establishments, the equipment,
structures, and facilities used in treating wastewater to reduce or
eliminate impurities or contaminants, and the facilities used in
disposing of, or transporting, remaining sludge, as well as all
equipment used in the maintenance and operation of the foregoing.

(11) “Solid waste collection and disposal” including vehicles,
vehicle-compatible waste receptacles, transfer stations, recycling
centers, sanitary landfills, and waste conversion facilities necessary
to remove solid waste, except that which is hazardous as defined
by law, from its point of origin.

(12) “Water treatment and distribution” including facilities in
which water is purified and otherwise treated to meet residential,
manufacturing, or commercial purposes and the conduits, pipes,
and pumps that transport it to places of use.

(13) “Defense conversion” including, but not limited to, facilities
necessary for successfully converting military bases consistent
with an adopted base reuse plan.

(14) “Public safety facilities” including, but not limited to, police
stations, fire stations, court buildings, jails, juvenile halls, and
juvenile detention facilities.

(15) “State highways” including any state highway as described
in Chapter 2 (commencing with Section 230) of Division 1 of the
Streets and Highways Code, and the related components necessary
for safe operation of the highway.

(16) (A) “Military infrastructure,” including, but not limited
to, facilities on or near a military installation, that enhance the
military operations and mission of one or more military
installations in this state. To be eligible for funding, the project
shall be endorsed by the Office of Planning and Research.

(B) For purposes of this subdivision, “military installation”
means any facility under the jurisdiction of the Department of
Defense, as defined in paragraph (1) of subsection (e) of Section
2687 of Title 10 of the United States Code.

(17) “Goods movement-related infrastructure” including port
facilities, roads, rail, and other facilities and projects that move
goods, energy, and information.

(r) “Rate reduction bonds” has the meaning set forth in Section
840 of the Public Utilities Code.

(s) “Revenues” means all receipts, purchase payments, loan
repayments, lease payments, and all other income or receipts
derived by the bank or a sponsor from the sale, lease, or other
financing arrangement undertaken by the bank, a sponsor, or a
participating party, including, but not limited to, all receipts from
a bond purchase agreement, and any income or revenue derived
from the investment of any money in any fund or account of the
bank or a sponsor and any receipts derived from transition property.
Revenues shall not include moneys in the General Fund of the
state.

(t) “Special purpose trust” means a trust, partnership, limited
partnership, association, corporation, nonprofit corporation, or
other entity authorized under the laws of the state to serve as an
instrumentality of the state to accomplish public purposes and
authorized by the bank to acquire, by purchase or otherwise, for
retention or sale, the bonds of a sponsor or of the bank made or
entered into pursuant to this division and to issue special purpose
trust bonds or other obligations secured by these bonds or other
sources of public or private revenues. Special purpose trust also
means any entity authorized by the bank to acquire transition
property or to issue rate reduction bonds, or both, subject to the
approvals by the bank and powers of the bank as are provided by
the bank in its resolution authorizing the entity to issue rate
reduction bonds.

(u) “Sponsor” means any subdivision of the state or local
government including departments, agencies, commissions, cities,
counties, nonprofit corporations formed on behalf of a sponsor,
special districts, assessment districts, and joint powers authorities
within the state or any combination of these subdivisions that
makes an application to the bank for financial assistance in
connection with a project in a manner prescribed by the bank. This
definition shall not be construed to require that an applicant have
an ownership interest in the project. In addition, an electrical
corporation shall be deemed to be the sponsor as well as the
participating party for any project relating to the financing of
transition costs and the acquisition of transition property on the
request of the electrical corporation and any person, company,
corporation, partnership, firm, or other entity or group engaged in
business or operation within the state that applies for financing of
any economic development facility, shall be deemed to be the
sponsor as well as the participating party for the project relating
to the financing of that economic development facility.

(v) “State” means the State of California.

(w) “Transition costs” has the meaning set forth in Section 840
of the Public Utilities Code.

(x) “Transition property” has the meaning set forth in Section
840 of the Public Utilities Code.

SEC. 2.  

Section 12098.7 of the Government Code is amended
and renumbered to read:

63089.63.  

(a) Notwithstanding any other law, effective January
1, 2008, the Economic Adjustment Assistance Grant funded
through the United States Economic Development Administration
under Title IX of the Public Works and Economic Development
Act of 1965 (Grant No. 07-19-02709 and 07-19-2709.1) shall be
administered by the director, and, for the purpose of state
administration of this grant, the executive director shall be deemed
to be the successor to the Director of the Governor’s Office of
Business and Economic Development and the former Secretary
of Business, Transportation and Housing and the former Secretary
of Technology, Trade and Commerce. The executive director may
assign and contract administration of the grant to a public agency
created pursuant to Chapter 5 (commencing with Section 6500)
of Division 7 of Title 1.

(b) On January 1, 2008, all federal moneys held in the Sudden
and Severe Economic Dislocation Grant Account within the Special
Deposit Fund are hereby transferred to the Small Business
Expansion Fund created pursuant to Section 63089.5 of the
Government Code for expenditure by the office pursuant to Chapter
6 (commencing with Section 63088) of the Government Code for
purposes of the Sudden and Severe Economic Dislocation Grant
program, or other purposes permitted by the cognizant federal
agency.

(c) All loan repayments received on or after January 1, 2008,
for the Sudden and Severe Economic Dislocation Grant program
loans issued pursuant to former Section 15327 (repealed by Section
1.8 of Chapter 229 of the Statutes of 2003 (AB 1757)) and this
section, shall be deposited into the Small Business Expansion Fund
and shall be available to the office for expenditure pursuant to the
provisions of Chapter 6 (commencing with Section 63088) of the
Government Code for the Sudden and Severe Economic
Dislocation Grant program, or other purposes permitted by the
cognizant federal agency.