Amended in Senate March 23, 2015

Senate BillNo. 63


Introduced by Senator Hall

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(Coauthors: Assembly Members Bonta and O’Donnell)

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January 5, 2015


An actbegin delete relating to the Port of Los Angeles.end deletebegin insert to amend Sections 53398.52, 53398.62, 53398.69, 53398.80, and 53398.81 of, and to add Section 53398.80.5 to, the Government Code, and to amend Sections 1690 and 1698 of, to add Section 1699 to, and to add Chapter 3 (commencing with Section 1710) to Part 1 of Division 6 of, the Harbors and Navigation Code, relating to seaport infrastructure financing.end insert

LEGISLATIVE COUNSEL’S DIGEST

SB 63, as amended, Hall. begin deletePort of Los Angeles. end deletebegin insertSeaport infrastructure financing districts.end insert

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Existing law authorizes the legislative body of a city or county to establish an enhanced infrastructure financing district, adopt an infrastructure financing plan, and issue bonds, for which only the district is liable, upon approval by 55% of the voters and to finance public capital facilities or other specified projects of communitywide significance, including, but not limited to, among other things, environmental mitigation, military base reuse, low-income housing, and specified housing and transit projects. Existing law authorizes an enhanced infrastructure financing district to fund infrastructure projects through tax increment financing, pursuant to the infrastructure financing plan and the agreement of affected taxing entities.

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begin insert

This bill would additionally include port or harbor infrastructure, as defined, among the projects that may be financed by an enhanced infrastructure financing district. The bill would require a harbor agency to prepare an infrastructure financing plan for a seaport infrastructure financing district, defined as an enhanced infrastructure financing district that finances port or harbor infrastructure. The bill would increase the vote threshold for a seaport infrastructure financing district to issue bonds to 23 of the voters, and would provide that for purposes of these voters, a “landowner” means the entity paying possessory interest tax on state-owned land. The bill would prescribe additional procedures and requirements for the establishment of a seaport enhanced infrastructure financing district, including approval by the harbor agency and the State Lands Commission before the proposal is submitted to the voters for approval. The bill would specify that the commission shall retain absolute discretion over the determination of whether or not investment of local resources in port or harbor infrastructure, the actions of a harbor agency, or any other action taken by a seaport infrastructure financing district is consistent with the state’s interest in tidelands and submerged lands.

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Existing law regulates the operation of ports and harbors. Existing law authorizes the organization and formation of port districts.

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This bill would state the intent of the Legislature to enact legislation to increase and diversify economic development at the Port of Los Angeles.

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Vote: majority. Appropriation: no. Fiscal committee: begin deleteno end deletebegin insertyesend insert. State-mandated local program: no.

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

P2    1begin insert

begin insertSECTION 1.end insert  

end insert
begin insert

(a) The Legislature finds and declares all of the
2following:

end insert
begin insert

3(1) It is equitable and in the public interest to provide alternative
4procedures for financing public works and services needed to
5support new commercial, environmental, and industrial
6development in the state’s ports and harbors that would generate
7significant new employment opportunities and economic
8development, increase state and local tax revenues, enhance port
9competitiveness in the international trade community, reduce
10congestion and delay in the supply chain, and result in improved
11environmental quality.

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begin insert

12(2) Ports and harbors in California generally do not levy or
13expend any funds generated by local taxes, as most of their
14operations are funded directly through fees, tariffs, leases, and
P3    1other revenue the ports and harbors generate from their users and
2tenants, in addition to the occasional state or federal grant.

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3(3) There is significant opportunity for development in our
4state’s ports and harbors. However, the state lacks the public
5infrastructure funding and financing necessary to support all of
6the new development that is demanded.

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begin insert

7(4) Our state’s waterfront has infrastructure needs that cannot
8be met by private investment alone, and therefore public financing
9mechanisms are required to finance the remediating of
10deteriorating conditions. The absence of practical and equitable
11methods for financing both regional and local public works leads
12to a declining standard of port infrastructure, a failure to construct
13new public works needed to support new commercial and industrial
14development in our ports and harbors, and increased congestion
15and environmental degradation.

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begin insert

16(5) The ports and harbors of California are valuable assets of
17the state that provide special maritime, navigational, recreational,
18cultural, and historical benefits to the people of the state and the
19management and development of these ports and harbors are
20matters of statewide significance. Remediating any condition that
21will otherwise result in underinvestment in the state’s ports and
22harbors by providing a financing mechanism, through the use of
23incremental property tax revenues, is a matter of statewide
24importance that will further the purposes of the public trust. Public
25facilities along the state’s waterfront that are eligible for financing
26pursuant to the enhanced infrastructure financing district law will
27increase public access to, or use or enjoyment of, public trust lands
28and are, therefore, facilities of statewide significance.

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begin insert

29(b) The Legislature further finds and declares that in order to
30adapt the provisions of Chapter 2.99 (commencing with Section
3153398.50) of Part 1 of Division 2 of Title 5 of the Government
32Code, relating to enhanced infrastructure financing districts, to
33the unique circumstances that surround the state’s ports and
34harbors, this special act is necessary.

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begin insert

35(c) Due to the extraordinary capital needs of ports and harbors,
36it is the intent of the Legislature to provide local governments that
37may benefit from additional investment in the ports and harbors
38in their jurisdiction the authority to create and fund enhanced
39infrastructure financing districts in the manner that provides the
40optimal financing options to construct needed public facilities on
P4    1public trust waterfront lands in order to meet the stated goals of
2statewide significance.

end insert
3begin insert

begin insertSEC. 2.end insert  

end insert

begin insertSection 53398.52 of the end insertbegin insertGovernment Codeend insertbegin insert is amended
4to read:end insert

5

53398.52.  

(a) (1) A district may finance any of the following:

6(A) The purchase, construction, expansion, improvement,
7seismic retrofit, or rehabilitation of any real or other tangible
8property with an estimated useful life of 15 years or longer that
9satisfies the requirements of subdivision (b).

10(B) The planning and design work that is directly related to the
11purchase, construction, expansion, or rehabilitation of property.

12(C) The costs described in Sections 53398.56 and 53398.57.

13(2) The facilitiesbegin delete need notend deletebegin insert are not required toend insert be physically
14located within the boundaries of the district. However, any facilities
15financed outside of a districtbegin delete mustend deletebegin insert shallend insert have a tangible connection
16to the work of the district, as detailed in the infrastructure financing
17plan adopted pursuant to Section 53398.69.

18(3) A districtbegin delete mayend deletebegin insert shallend insert not finance routine maintenance, repair
19work, or the costs of an ongoing operation or providing services
20of any kind.

21(b) The district shall finance only public capital facilities or
22other specified projects of communitywide significance that
23provide significant benefits to the district or the surrounding
24community, including, but not limited to, all of the following:

25(1) Highways, interchanges, ramps and bridges, arterial streets,
26parking facilities, and transit facilities.

27(2) Sewage treatment and water reclamation plants and
28interceptor pipes.

29(3) Facilities for the collection and treatment of water for urban
30uses.

31(4) Flood control levees and dams, retention basins, and drainage
32channels.

33(5) Child care facilities.

34(6) Libraries.

35(7) Parks, recreational facilities, and open space.

36(8) Facilities for the transfer and disposal of solid waste,
37including transfer stations and vehicles.

38(9) Brownfield restoration and other environmental mitigation.

39(10) The development of projects on a former military base,
40provided that the projects are consistent with the military base
P5    1authority reuse plan and are approved by the military base reuse
2authority, if applicable.

3(11) The repayment of the transfer of funds to a military base
4reuse authority pursuant to Section 67851 that occurred on or after
5the creation of the district.

6(12) The acquisition, construction, or rehabilitation of housing
7for persons of low and moderate income, as defined in Section
850093 of the Health and Safety Code, for rent or purchase.

9(13) Acquisition, construction, or repair of industrial structures
10for private use.

11(14) Transit priority projects, as defined in Section 21155 of
12the Public Resources Code, that are located within a transit priority
13project area. For purposes of this paragraph, a transit priority
14project area may include a military base reuse plan that meets the
15definition of a transit priority project area and it may include a
16contaminated site within a transit priority project area.

17(15) Projects that implement a sustainable communities strategy,
18when the State Air Resources Board, pursuant to Chapter 2.5
19(commencing with Section 65080) of Divisionbegin delete 2end deletebegin insert 1end insert of Title 7, has
20accepted a metropolitan planning organization’s determination
21that the sustainable communities strategy or the alternative planning
22strategy would, if implemented, achieve the greenhouse gas
23emission reduction targets.

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24(16) Port or harbor infrastructure, as defined by Section 1698
25of the Harbors and Navigation Code.

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26(c) The district shall require, by recorded covenants or
27restrictions, that housing units built pursuant to this section shall
28remain available at affordable housing costs to, and occupied by,
29persons and families of low- or moderate-income households for
30the longest feasible time, but for not less than 55 years for rental
31units and 45 years for owner-occupied units.

32(d) The district may finance mixed-income housing
33developments, but may finance only those units in such a
34development that are restricted to occupancy by persons of low or
35moderate incomes as defined in Section 50093 of the Health and
36Safety Code, and those onsite facilities for child care, after-school
37care, and social services that are integrally linked to the tenants of
38the restricted units.

39(e) A district may utilize any powers under the Polanco
40Redevelopment Act (Article 12.5 (commencing with Section
P6    133459) of Chapter 4 of Part 1 of Division 24 of the Health and
2Safety Code), and finance any action necessary to implement that
3act.

4begin insert

begin insertSEC. 3.end insert  

end insert

begin insertSection 53398.62 of the end insertbegin insertGovernment Codeend insertbegin insert is amended
5to read:end insert

6

53398.62.  

begin deleteAfter end deletebegin insert(a)end insertbegin insertend insertbegin insert Except as provided in subdivision (b),
7afterend insert
adopting the resolution pursuant to Section 53398.59, the
8legislative body shall designate and direct the city or county
9engineer or other appropriate official to prepare an infrastructure
10begin insert financingend insert plan pursuant to Section 53398.63.

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11(b) In the case of a district proposed for port or harbor
12infrastructure, the legislative body shall designate and direct the
13harbor agency to prepare an infrastructure financing plan pursuant
14to Section 53398.63.

end insert
15begin insert

begin insertSEC. 4.end insert  

end insert

begin insertSection 53398.69 of the end insertbegin insertGovernment Codeend insertbegin insert is amended
16to read:end insert

17

53398.69.  

(a) At the conclusion of the hearing, the legislative
18body may adopt a resolution proposing adoption of the
19infrastructure financing plan, as modified, and formation of the
20enhanced infrastructure financing district in a manner consistent
21with Section 53398.68, or it may abandon the proceedings.

22(b) The infrastructure financing plan and the formation of the
23enhanced infrastructure financing district shall take effect upon
24the legislative body’s adoption of the resolution. The infrastructure
25financing plan shall specify if the district shall be funded solely
26through the district’s share of tax increment, governmental or
27private loans, grants, bonds, assessments, fees, or some
28combination thereof. However, the public financing authoritybegin delete mayend delete
29begin insert shallend insert not issue bonds or levy assessments or fees that may be
30included in the infrastructure financing planbegin delete prior toend deletebegin insert beforeend insert one or
31more of the following:

32(1) An affirmative vote, pursuant to subdivision (a) of Section
33begin delete 53398.81,end deletebegin insert 53398.81 and, if applicable, subdivision (c) of Section
3453398.80.5,end insert
to issue bonds to finance the infrastructure financing
35plan.

36(2) Without compliance with the procedures required in
37subdivision (f) of Section 53398.75, to levy assessments or fees
38to finance the infrastructure financing plan.

39(c) Inbegin delete additionend deletebegin insert addition,end insert the district may expend up to 10 percent
40of any accrued tax increment in the first two years of the effective
P7    1date of the enhanced infrastructure financing district on planning
2and dissemination of information to the residents within the
3district’s boundaries about the infrastructure financing plan and
4planned activities to be funded by the district.

5begin insert

begin insertSEC. 5.end insert  

end insert

begin insertSection 53398.80 of the end insertbegin insertGovernment Codeend insertbegin insert is amended
6to read:end insert

7

53398.80.  

(a) The public financing authority shall submit the
8proposal to issue the bonds to the voters who reside within the
9district. If the public financing authority adopts a resolution
10proposing initiation of proceedings to issue bonds pursuant to
11Section 53398.77, it shall then submit that proposal, together with
12the information specified in subdivisions (a) to (c), inclusive, of
13Section 53398.78, to the qualified electors of the district in the
14next general election or in a special election to be held,
15notwithstanding any other requirement, including any requirement
16that elections be held on specified dates, contained in the Elections
17Code, at least 90 days but not more than 180 days following the
18adoption of the resolution of bond issuance. The public financing
19authority shall provide the resolution of bond issuance, a certified
20map of sufficient scale and clarity to show the boundaries of the
21district, and a sufficient description to allow the election official
22to determine the boundaries of the district to the official conducting
23the election within three business days after the adoption of the
24resolution of bond issuance. The assessor’s parcel numbers for the
25land within the district shall be included if it is a landowner election
26or the district does not conform to an existing district’s boundaries
27and if requested by the official conducting the election. If the
28election is to be held less than 125 days following the adoption of
29the resolution of bond issuance, the concurrence of the election
30official conducting the election shall be required. However, any
31time limit specified by this section or requirement pertaining to
32the conduct of the election may be waived with the unanimous
33consent of the qualified electors of the proposed district and the
34concurrence of the election official conducting the election.

35(b) begin insert(1)end insertbegin insertend insert If at least 12 persons have been registered to vote within
36the territory of the district for each of the 90 days preceding the
37close of the hearing, the vote shall be by the registered voters of
38the district, who need not necessarily be the same persons, with
39each voter having one vote. Otherwise, the vote shall be by the
40landowners of the district and each landowner who is the owner
P8    1of record at the close of the protest hearing, or the authorized
2representative thereof, shall have one vote for each acre or portion
3of an acre of land that he or she owns within the district. The
4number of votes to be voted by a particular landowner shall be
5specified on the ballot provided to that landowner.

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6(2) For purposes of this subdivision, for an entity paying
7possessory interest tax on state-owned land, “landowner” means
8the entity that is paying the possessory interest tax.

end insert

9(c) Ballots for the special election authorized by subdivision (a)
10may be distributed to qualified electors by mail with return postage
11prepaid or by personal service by the election official. The official
12conducting the election may certify the proper mailing of ballots
13by an affidavit, which shall be exclusive proof of mailing in the
14absence of fraud. The voted ballots shall be returned to the election
15officer conducting the election not later than the hour specified in
16the resolution calling the election. However, if all the qualified
17voters have voted, the election shall be closed.

18begin insert

begin insertSEC. 6.end insert  

end insert

begin insertSection 53398.80.5 is added to the end insertbegin insertGovernment Codeend insertbegin insert,
19to read:end insert

begin insert
20

begin insert53398.80.5.end insert  

(a) If the public financing authority adopts a
21resolution proposing initiation of proceedings to issue bonds
22pursuant to Section 53398.77 for port or harbor infrastructure, it
23shall, before submitting the proposal to the voters pursuant to
24Section 53398.80, submit the proposal, together with the
25information specified in subdivisions (a) to (c), inclusive, and (e)
26and (f) of Section 53398.78, to the affected harbor agency pursuant
27to Section 1713 of the Harbors and Navigation Code for its
28preliminary approval.

29(b) If the harbor agency grants preliminary approval, the
30proposal shall be considered by the State Lands Commission for
31final approval pursuant to Section 1714 of the Harbors and
32Navigation Code.

33(c) If the State Lands Commission votes in favor of the issuance
34of the bonds as provided in Section 1714 of the Harbors and
35Navigation Code, the public financing authority shall proceed
36with the submission of the proposal to the voters.

end insert
37begin insert

begin insertSEC. 7.end insert  

end insert

begin insertSection 53398.81 of the end insertbegin insertGovernment Codeend insertbegin insert is amended
38to read:end insert

P9    1

53398.81.  

(a) begin deleteThe end deletebegin insert(1)end insertbegin insertend insertbegin insertExcept as specified in paragraph (2),
2the end insert
bonds may be issued if 55 percent of the voters voting on the
3proposition vote in favor of issuing the bonds.

begin insert

4(2) For a seaport infrastructure financing district, the bonds
5may be issued if two-thirds of the voters voting on the proposition
6vote in favor of issuing the bonds.

end insert

7(b) If the voters approve the issuance of the bonds as provided
8by subdivision (a), the public financing authority shall proceed
9with the issuance of the bonds by adopting a resolution that shall
10 provide for all of the following:

11(1) The issuance of the bonds in one or more series.

12(2) The principal amount of the bonds that shall be consistent
13with the amount specified in subdivision (b) of Section 53398.78.

14(3) The date the bonds will bear.

15(4) The date of maturity of the bonds.

16(5) The denomination of the bonds.

17(6) The form of the bonds.

18(7) The manner of execution of the bonds.

19(8) The medium of payment in which the bonds are payable.

20(9) The place or manner of payment and any requirements for
21registration of the bonds.

22(10) The terms of call or redemption, with or without premium.

23begin insert

begin insertSEC. 8.end insert  

end insert

begin insertSection 1690 of the end insertbegin insertHarbors and Navigation Codeend insertbegin insert is
24amended to read:end insert

25

1690.  

The Legislature finds and declares all of the following:

26(a) The state has a compelling interest in the success ofbegin delete herend deletebegin insert itsend insert
27 ports and harbors because they provide significant economic benefit
28to the state in terms of jobs, personal income, business revenue,
29and taxes.begin insert It is the policy of the state that, because of that
30compelling interest, legislation in this area is a matter of statewide
31concern and is necessary to develop the harbors and ports of this
32state for the benefit of the people.end insert

33(b) Ports and harbors are the vital interface between water and
34land transportation for trade with the Pacific Rim countries and
35other trade.begin insert In this respect, the specific management of the state’s
36ports and harbors by specific harbor and port districts established
37pursuant to Division 8 (commencing with Section 5800) are of
38equal statewide concern and importance as the management of
39granted lands held in trust for the state by a local port or harbor
40district.end insert

P10   1(c) Historically, California’s ports and harbors have been
2self-supporting.begin insert Most port and harbor districts do not levy or
3expend funds generated by local taxes, as most of their operations
4are funded directly through fees and other revenue the ports
5generate from their users or tenants, in addition to occasional
6state and federal grants.end insert

7(d) The report of the California Transportation Commission
8entitled “Improving Access to California’s Ports,” dated February
91990, found that $897 million is needed for port access
10transportation projects.begin insert By December 2014, the “California Freight
11Mobility Plan” report of the Department of Transportation
12identified a comprehensive list of freight projects in the state,
13including port access transportation projects, with an estimated
14total cost of one hundred thirty-eight billion dollars
15($138,000,000,000).end insert

16(e) In addition to port access transportation projects, there is a
17need for new harbor facilities andbegin insert infrastructure investments that
18will enhance California’s competitiveness for international
19cargoes, grow employment, yield significant economic
20development, increase state and local tax revenues, and reduce
21impactsend insert
tobegin delete restore facilities damaged in the Loma Prieta earthquake.end delete
22begin insert environmental quality from goods movement.end insert

23(f) Because ofbegin insert limited revenues from port operations,end insert shrinking
24federal and state funding and the increasing demand for those
25limited funds, ports and harbors are no longer able to finance
26projects of this magnitude withoutbegin delete aend delete new fundingbegin delete mechanism.end delete
27begin insert mechanisms. One such mechanism that can be used to finance port
28and harbor development projects is the enhanced infrastructure
29financing district.end insert

30(g) It is the intent of the Legislature to assist in the reduction of
31local borrowing costs, help accelerate the construction, repair, and
32maintenance of port capital improvements, and promote greater
33use of existing and new financial instruments and mechanisms.

begin insert

34(h) It is further the intent of the Legislature to assert the state’s
35plenary power over the financing of port and harbor infrastructure
36by harbor agencies as matters of statewide concern and to
37authorize the use of tax increment financing, as provided by in
38Chapter 2.99 (commencing with Section 53398.50) of Part 1 of
39Division 2 of Title 5 of the Government Code, to support investment
40of tax revenues in port and harbor infrastructure.

end insert
begin insert

P11   1(i) The Legislature empowers local legislative bodies with
2specific and exclusive delegated authority to manage the state’s
3ports and harbors by legislative grant and by establishment of
4special districts pursuant to this code. In addition, the Legislature
5delegates to public financing authorities the power to establish
6seaport infrastructure financing districts for the purpose of
7leveraging investment in support of the statewide interest in
8improving port and harbor infrastructure.

end insert
9begin insert

begin insertSEC. 9.end insert  

end insert

begin insertSection 1698 of the end insertbegin insertHarbors and Navigation Codeend insertbegin insert is
10amended to read:end insert

11

1698.  

(a) “Port or harbor infrastructure” means any of the
12following, if its primary or predominant use is of direct benefit to
13the port or harbor:

14(1) Streets, roads, highways, bridges, sidewalks, curbs, gutters,
15tunnels, subways, alleyways, viaducts, pipelines, rail lines, or other
16facilities for the transportation or movement of people, vehicles,
17equipment, or goods.

18(2) Piers, docks, wharves, slips, quays, platforms, decks, cranes,
19or other facilities for the mooring, docking, loading, or unloading
20of vessels.

21(3) Lands, tidelands, submerged lands, easements, port access
22routes, channel improvements, rights-of-way, dredge disposal sites,
23 safety zones, breakwaters, levees, bulkheads, or walls of rock or
24other material to protect property or traffic.

25(4) Parking, warehouse, or storage facilities.

26(5) Parks, recreation, or open space facilities.

27(6) begin deleteRemediation. end deletebegin insertRemediation or any capital improvement that
28improves environmental quality.end insert

29(7) Water, wastewater, drainage, electric, or telecommunication
30systems or facilities.

31(8) Buildings, structures, facilities, improvements, or equipment
32necessary or convenient to any of paragraphs (1) to (7), inclusive,
33or to the operation of a port or harbor.

34(9) Public improvements authorized pursuant to the
35Improvement Act of 1911 (Division 7 (commencing with Section
365000) of the Streets and Highways Code), the Improvement Bond
37Act of 1915 (Division 10 (commencing with Section 8500) of the
38Streets and Highways Code), and the Mello-Roos Community
39Facilities Act of 1982 (Chapter 2.5 (commencing with Section
4053311) of Part 1 of Division 2 of Title 5 of the Government Code).

P12   1(b) Any port or harbor infrastructure may be privately operated.
2Except for any port or harbor infrastructure financed or subsidized
3with public trust revenues, any privately owned port or harbor
4infrastructure may be eligible in whole or in part for financing or
5other support or subsidy from money deposited in the infrastructure
6fund pursuant to subdivision (a) of Section 1701.

7(c) If a port or harbor infrastructure financed wholly or partly
8with public funds is privately owned and if the use for which the
9port or harbor infrastructure was originally constructed changes
10or is incompatible with the port authority’s master plan, the private
11owner shall pay the public agency the percentage of the full
12appreciated value of the port or harbor infrastructure that was
13originally financed with public funds.

14(d) Any port or harbor infrastructure may be located within,
15partly within and partly outside, or outside the boundaries of any
16harbor agency.

17(e) Any port or harbor infrastructure that has been purchased,
18constructed, expanded, improved, or rehabilitated by the
19expenditure or use of public trust revenues shall be held as an asset
20of the trust in a share proportionate to the investment of public
21 trust revenues.

22begin insert

begin insertSEC. 10.end insert  

end insert

begin insertSection 1699 is added to the end insertbegin insertHarbors and Navigation
23Code
end insert
begin insert, to read:end insert

begin insert
24

begin insert1699.end insert  

“Seaport infrastructure financing district” means an
25enhanced infrastructure financing district that finances port or
26harbor infrastructure created in accordance with Chapter 3
27(commencing with Section 1710) of this part and Chapter 2.99
28(commencing with Section 53398.50) of Part 1 of Division 2 of
29Title 5 of the Government Code.

end insert
30begin insert

begin insertSEC. 11.end insert  

end insert

begin insertChapter 3 (commencing with Section 1710) is added
31to Part 1 of Division 6 of the end insert
begin insertHarbors and Navigation Codeend insertbegin insert, to
32read:end insert

begin insert

33 

34Chapter  begin insert3.end insert Seaport Infrastructure Financing Districts
35

 

36

begin insert1710.end insert  

The Legislature finds and declares all of the following:

37(a) In addition to the findings and declarations in Section
3853398.50 of the Government Code, the ability to capture property
39tax increment revenues to finance needed port and harbor
40infrastructure projects will provide direct benefits to the state.
P13   1When harbor agencies are better funded to further the objectives
2of the state, its ports and harbors, and the public trust and
3enjoyment of those trust lands by the people of the state, local
4economies and the local environment will also be improved.

5(b) A port or harbor or its operation frequently generates large
6local tax benefits directly as a result of the possessory interest
7taxes paid on the value of leased port and harbor real property.

8(c) The tax increment increases in possessory interest taxes that
9will result from the improvement of port and harbor infrastructure
10should be captured, whenever possible, and reinvested to support
11the state’s significant interest in the successful operation of its
12ports and harbors.

13(d) The unique nature of the state’s public seaports and harbors,
14including the nature of the statewide interest in their operations,
15requires special rules if these ports and harbors are to be allowed
16to participate in a seaport infrastructure financing district.

17(e) The seaport infrastructure financing district is specifically
18developed to include publicly owned property, to improve that
19public property, and to achieve the public goals of improving the
20state’s waterborne commerce, enhancing economic prosperity,
21and financing the costs of environmental mitigation and
22improvement.

23(f) This chapter is intended to maintain and enforce the state’s
24retained rights, statewide interests, obligations and sovereign
25duties in its ports, harbors, and tidelands, including protecting
26these same assets from local control or excise, while simultaneously
27creating an opportunity for public financing authorities to
28participate in facilitating investment in the state’s public seaport
29infrastructure and finance projects that will have the anticipated
30effect of not only providing statewide benefits, but also local
31benefits such as boosting local employment, local secondary
32economic development, local environmental improvement, and
33increased local tax revenues.

34

begin insert1711.end insert  

As used in this chapter, “public financing authority”
35has the same meaning as provided in Section 53398.51 of the
36Government Code.

37

begin insert1712.end insert  

When designated by the legislative body pursuant to
38Section 53398.62 of the Government Code, the harbor agency
39shall prepare a proposed infrastructure financing plan, as provided
40in Section 53398.63 of the Government Code, for a seaport
P14   1infrastructure financing district covering a port or harbor
2infrastructure.

3

begin insert1713.end insert  

(a) Upon receipt of a resolution from the public
4financing authority promulgated under subdivision (a) of Section
553398.80.5 of the Government Code, the harbor agency shall have
660 days to consider the proposal. During this time, the harbor
7agency’s governing body shall act at a duly noticed meeting to
8either vote to give preliminary approval of the proposal, subject
9to the provisions of this section, or disapprove the proposal and
10return it to the public financing authority.

11(b) A harbor agency may give preliminary approval under this
12section only if it makes all of the following affirmative findings:

13(1) The harbor agency has prepared an infrastructure financing
14plan pursuant to Section 1712.

15(2) The improvements to the harbor agency’s property to be
16financed through the proceeds of a seaport infrastructure financing
17district are solely for the support of port or harbor infrastructure.

18(3) All publicly owned property that is leased to private parties
19within the boundaries of the seaport infrastructure financing
20district has been reported by the harbor agency to the local county
21assessor to facilitate possessory interest taxation.

22(4) (A) If the harbor agency is acting on granted lands, all of
23the projects and uses proposed in the seaport infrastructure
24financing district are consistent with the state tidelands trust and
25the conditions of the harbor agency grant.

26(B) If the harbor agency was formed pursuant to this code, all
27of the projects and uses proposed in the seaport infrastructure
28financing district are consistent with its charter and the statewide
29interests in the operation of harbors and ports.

30(c) (1) The harbor agency shall not grant preliminary approval
31under this section unless both of the following apply:

32(A) The seaport infrastructure financing district will operate
33independently of any other prior or concurrent agreements between
34the harbor agency and the public financing authority, or the local
35governments that make up the public financing authority.

36(B) No transfers of funds or obligations, or future transfers of
37funds or obligations contingent on the approval of the seaport
38infrastructure financing district, its financing, or projects within
39the district, are created between the harbor agency and the public
P15   1financing authority, or the local governments that make up the
2public financing authority.

3(2) For purposes of this subdivision, “transfers of funds or
4obligations” includes any direct or indirect transfer of harbor
5agency resources to the public financing authority, or the local
6governments that make up the public financing authority, except
7for any of the following if agreed to between the harbor agency
8and the public financing authority in writing:

9(A) Harbor agency reimbursements of a public financing
10authority for its direct administrative costs of establishing the
11seaport infrastructure financing district.

12(B) Public financing authority expenses for underwriting the
13bond issuance for the identified projects in the seaport
14infrastructure financing district.

15(C) Any other administrative expenses or direct operating
16expenses that are incurred as the direct result of creating the
17seaport infrastructure financing district that are identified by both
18parties at the time of preliminary approval and in advance of the
19expense being incurred by the public financing authority.

20(d) If a harbor agency votes to give preliminary approval to the
21proposal, it shall immediately forward its preliminary approval
22to the State Lands Commission for its consideration.

23

begin insert1714.end insert  

(a) Upon receipt of a preliminary approval from a
24harbor agency granted pursuant to Section 1713, the State Lands
25Commission shall consider the proposal and either grant or deny
26final approval.

27(b) Prior to granting final approval the State Lands Commission
28shall do both of the following:

29(1) Review the infrastructure financing plan prepared by the
30harbor agency pursuant to Section 1712.

31(2) Review the findings of the harbor agency made in its
32preliminary approval.

33(c) The State Lands Commission shall grant final approval only
34if it makes all of the following findings:

35(1) The state’s interests in its tidelands and its ports and harbors
36are furthered by the funding of the seaport infrastructure financing
37district.

38(2) The principal purposes of the seaport infrastructure
39financing district are to further port and harbor infrastructure.

P16   1(3) The execution of the financing section of the infrastructure
2finance plan is more likely than not to result in the outcomes
3proposed.

4(4) No revenues shall be made available to local governments
5as a result of the approval of the seaport infrastructure financing
6district from state revenues, revenues derived from granted lands,
7or from ports or harbors created under this code, except as
8otherwise allowed under paragraph (2) of subdivision (c) of Section
91713.

10(5) The harbor agency and the public financing authority
11participating in the seaport infrastructure financing district have
12each completed all procedural requirements, financial due
13diligence, and made all findings required by this chapter and
14Chapter 2.99 (commencing with Section 53398.50) of Part 1 of
15Division 2 of Title 5 of the Government Code.

16(6) All of the projects and uses proposed in the seaport
17infrastructure financing district are consistent with the state
18tidelands trust and the conditions of any grants, if applicable, and
19the statewide interests in the operation of harbors and ports.

20(7) No agreements by the harbor agency that may control the
21discretion of the harbor agency to maintain its port or harbor
22operations or to cede any such control to the discretion of a third
23party were made as a condition of participation in the seaport
24infrastructure financing district.

25(d) If the State Lands Commission gives final approval to the
26proposal, it shall immediately forward its approval to the public
27financing authority for further action pursuant to subdivision (c)
28of Section 53398.80.5 of the Government Code.

29

begin insert1715.end insert  

(a) Except as provided in subdivision (b), Chapter 2.99
30(commencing with Section 53398.50) of Part 1 of Division 2 of
31Title 5 of the Government Code shall apply to this chapter.

32(b) To the extent that any provision of this chapter conflicts with
33any provision of Chapter 2.99 (commencing with Section 53398.50)
34of Part 1 of Division 2 of Title 5 of the Government Code with
35respect to a seaport infrastructure financing district, this chapter
36shall prevail.

37

begin insert1716.end insert  

All permanent fixtures and capital improvements to the
38real property of a harbor agency that administers public trust
39tidelands made pursuant to a seaport infrastructure district’s
40approved infrastructure financing plan shall be a trust asset once
P17   1completed. This provision does not apply to fixtures and
2improvements otherwise agreed as nonpermanent in a lease
3between the harbor agency and a private tenant.

4

begin insert1717.end insert  

If a harbor agency administering granted public trust
5property is a department of a local governmental body, any
6negotiations between the two entities with respect to any
7infrastructure financing, operations, or any other activity requiring
8action by the harbor agency shall be undertaken at arm’s length
9in recognition of the duties of the harbor agency to effectuate
10statewide interests.

11

begin insert1718.end insert  

(a) Pursuant to Section 6009 of the Public Resources
12Code, the State Lands Commission shall retain absolute discretion
13over the determination of whether or not investment of local
14resources in port or harbor infrastructure, the actions of a harbor
15agency, or any other action taken by a seaport infrastructure
16financing district is consistent with the state’s interests in its
17tidelands and submerged lands. Nothing in this chapter, including
18a finding made pursuant to Section 1714, or Chapter 2.99
19(commencing with Section 53398.50) of Part 1 of Division 2 of
20Title 5 of the Government Code, shall preclude the State Lands
21Commission from enforcing the state’s interests in its tidelands.

22(b) Pursuant to Section 6009.1 of the Public Resources Code,
23 a harbor agency that manages granted state tidelands retains its
24status as a trustee whether or not it is located within a seaport
25infrastructure financing district. Nothing in this chapter, including
26a finding made pursuant to Section 1714, or Chapter 2.99
27(commencing with Section 53398.50) of Part 1 of Division 2 of
28Title 5 of the Government Code, shall preclude the harbor agency
29from conducting its duties as a trustee of state tidelands.

30(c) Nothing in this chapter or in Chapter 2.99 (commencing
31with Section 53398.50) of Part 1 of Division 2 of Title 5 of the
32Government Code grants any authority to any public financing
33authority, or the local governments that compose the public finance
34authority, in any manner whatsoever to manage, direct, control,
35or exercise jurisdiction over a harbor agency and its management
36of port or harbor infrastructure.

end insert
begin delete
37

SECTION 1.  

It is the intent of the Legislature to enact
38legislation to increase and diversify economic development at the
39Port of Los Angeles.

end delete


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