Amended in Senate April 7, 2015

Amended in Senate March 23, 2015

Senate BillNo. 63

Introduced by Senator Hall

(Coauthors: Assembly Members Bonta and O’Donnell)

January 5, 2015

An act 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.


SB 63, as amended, Hall. Seaport infrastructure financing districts.

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.

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.

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

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

P2    1


(a) The Legislature finds and declares all of the

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.

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
15other revenue the ports and harbors generate from their users and
16tenants, in addition to the occasional state or federal grant.

17(3) There is significant opportunity for development in our
18state’s ports and harbors. However, the state lacks the public
P3    1infrastructure funding and financing necessary to support all of
2the new development that is demanded.

3(4) Our state’s waterfront has infrastructure needs that cannot
4be met by private investment alone, and therefore public financing
5mechanisms are required to finance the remediating of deteriorating
6conditions. The absence of practical and equitable methods for
7financing both regional and local public works leads to a declining
8standard of port infrastructure, a failure to construct new public
9works needed to support new commercial and industrial
10development in our ports and harbors, and increased congestion
11and environmental degradation.

12(5) The ports and harbors of California are valuable assets of
13the state that provide special maritime, navigational, recreational,
14cultural, and historical benefits to the people of the state and the
15management and development of these ports and harbors are
16matters of statewide significance. Remediating any condition that
17will otherwise result in underinvestment in the state’s ports and
18harbors by providing a financing mechanism, through the use of
19incremental property tax revenues, is a matter of statewide
20importance that will further the purposes of the public trust. Public
21facilities along the state’s waterfront that are eligible for financing
22pursuant to the enhanced infrastructure financing district law will
23increase public access to, or use or enjoyment of, public trust lands
24and are, therefore, facilities of statewide significance.

25(b) The Legislature further finds and declares that in order to
26adapt the provisions of Chapter 2.99 (commencing with Section
2753398.50) of Part 1 of Division 2 of Title 5 of the Government
28Code, relating to enhanced infrastructure financing districts, to the
29unique circumstances that surround the state’s ports and harbors,
30this special act is necessary.

31(c) Due to the extraordinary capital needs of ports and harbors,
32it is the intent of the Legislature to provide local governments that
33may benefit from additional investment in the ports and harbors
34in their jurisdiction the authority to create and fund enhanced
35infrastructure financing districts in the manner that provides the
36optimal financing options to construct needed public facilities on
37public trust waterfront lands in order to meet the stated goals of
38statewide significance.


SEC. 2.  

Section 53398.52 of the Government Code is amended
40to read:

P4    1


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

2(A) The purchase, construction, expansion, improvement,
3seismic retrofit, or rehabilitation of any real or other tangible
4property with an estimated useful life of 15 years or longer that
5satisfies the requirements of subdivision (b).

6(B) The planning and design work that is directly related to the
7purchase, construction, expansion, or rehabilitation of property.

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

9(2) The facilities are not required to be physically located within
10the boundaries of the district. However, any facilities financed
11outside of a district shall have a tangible connection to the work
12of the district, as detailed in the infrastructure financing plan
13adopted pursuant to Section 53398.69.

14(3) A district shall not finance routine maintenance, repair work,
15or the costs of an ongoing operation or providing services of any

17(b) The district shall finance only public capital facilities or
18other specified projects of communitywide significance that
19provide significant benefits to the district or the surrounding
20community, including, but not limited to, all of the following:

21(1) Highways, interchanges, ramps and bridges, arterial streets,
22parking facilities, and transit facilities.

23(2) Sewage treatment and water reclamation plants and
24interceptor pipes.

25(3) Facilities for the collection and treatment of water for urban

27(4) Flood control levees and dams, retention basins, and drainage

29(5) Child care facilities.

30(6) Libraries.

31(7) Parks, recreational facilities, and open space.

32(8) Facilities for the transfer and disposal of solid waste,
33including transfer stations and vehicles.

34(9) Brownfield restoration and other environmental mitigation.

35(10) The development of projects on a former military base,
36provided that the projects are consistent with the military base
37authority reuse plan and are approved by the military base reuse
38authority, if applicable.

P5    1(11) The repayment of the transfer of funds to a military base
2reuse authority pursuant to Section 67851 that occurred on or after
3the creation of the district.

4(12) The acquisition, construction, or rehabilitation of housing
5for persons of low and moderate income, as defined in Section
650093 of the Health and Safety Code, for rent or purchase.

7(13) Acquisition, construction, or repair of industrial structures
8for private use.

9(14) Transit priority projects, as defined in Section 21155 of
10the Public Resources Code, that are located within a transit priority
11project area. For purposes of this paragraph, a transit priority
12project area may include a military base reuse plan that meets the
13definition of a transit priority project area and it may include a
14contaminated site within a transit priority project area.

15(15) Projects that implement a sustainable communities strategy,
16when the State Air Resources Board, pursuant to Chapter 2.5
17(commencing with Section 65080) of Division 1 of Title 7, has
18accepted a metropolitan planning organization’s determination
19that the sustainable communities strategy or the alternative planning
20strategy would, if implemented, achieve the greenhouse gas
21emission reduction targets.

22(16) Port or harbor infrastructure, as defined by Section 1698
23of the Harbors and Navigation Code.

24(c) The district shall require, by recorded covenants or
25restrictions, that housing units built pursuant to this section shall
26remain available at affordable housing costs to, and occupied by,
27persons and families of low- or moderate-income households for
28the longest feasible time, but for not less than 55 years for rental
29units and 45 years for owner-occupied units.

30(d) The district may finance mixed-income housing
31developments, but may finance only those units in such a
32development that are restricted to occupancy by persons of low or
33moderate incomes as defined in Section 50093 of the Health and
34Safety Code, and those onsite facilities for child care, after-school
35care, and social services that are integrally linked to the tenants of
36the restricted units.

37(e) A district may utilize any powers under the Polanco
38Redevelopment Act (Article 12.5 (commencing with Section
3933459) of Chapter 4 of Part 1 of Division 24 of the Health and
P6    1Safety Code), and finance any action necessary to implement that


SEC. 3.  

Section 53398.62 of the Government Code is amended
4to read:



(a)  Except as provided in subdivision (b), after
6adopting the resolution pursuant to Section 53398.59, the legislative
7body shall designate and direct the city or county engineer or other
8appropriate official to prepare an infrastructure financing plan
9pursuant to Section 53398.63.

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


SEC. 4.  

Section 53398.69 of the Government Code is amended
15to read:



(a) At the conclusion of the hearing, the legislative
17body may adopt a resolution proposing adoption of the
18infrastructure financing plan, as modified, and formation of the
19enhanced infrastructure financing district in a manner consistent
20with Section 53398.68, or it may abandon the proceedings.

21(b) The infrastructure financing plan and the formation of the
22enhanced infrastructure financing district shall take effect upon
23the legislative body’s adoption of the resolution. The infrastructure
24financing plan shall specify if the district shall be funded solely
25through the district’s share of tax increment, governmental or
26private loans, grants, bonds, assessments, fees, or some
27combination thereof. However, the public financing authority shall
28not issue bonds or levy assessments or fees that may be included
29in the infrastructure financing plan before one or more of the

31(1) An affirmative vote, pursuant to subdivision (a) of Section
3253398.81 and, if applicable, subdivision (c) of Section 53398.80.5,
33to issue bonds to finance the infrastructure financing plan.

34(2) Without compliance with the procedures required in
35subdivision (f) of Section 53398.75, to levy assessments or fees
36to finance the infrastructure financing plan.

37(c) In addition, the district may expend up to 10 percent of any
38accrued tax increment in the first two years of the effective date
39of the enhanced infrastructure financing district on planning and
40 dissemination of information to the residents within the district’s
P7    1boundaries about the infrastructure financing plan and planned
2activities to be funded by the district.


SEC. 5.  

Section 53398.80 of the Government Code is amended
4to read:



(a) The public financing authority shall submit the
6proposal to issue the bonds to the voters who reside within the
7district. If the public financing authority adopts a resolution
8proposing initiation of proceedings to issue bonds pursuant to
9Section 53398.77, it shall then submit that proposal, together with
10the information specified in subdivisions (a) to (c), inclusive, of
11Section 53398.78, to the qualified electors of the district in the
12next general election or in a special election to be held,
13notwithstanding any other requirement, including any requirement
14that elections be held on specified dates, contained in the Elections
15Code, at least 90 days but not more than 180 days following the
16adoption of the resolution of bond issuance. The public financing
17authority shall provide the resolution of bond issuance, a certified
18map of sufficient scale and clarity to show the boundaries of the
19district, and a sufficient description to allow the election official
20to determine the boundaries of the district to the official conducting
21the election within three business days after the adoption of the
22resolution of bond issuance. The assessor’s parcel numbers for the
23land within the district shall be included if it is a landowner election
24or the district does not conform to an existing district’s boundaries
25and if requested by the official conducting the election. If the
26election is to be held less than 125 days following the adoption of
27the resolution of bond issuance, the concurrence of the election
28official conducting the election shall be required. However, any
29time limit specified by this section or requirement pertaining to
30the conduct of the election may be waived with the unanimous
31consent of the qualified electors of the proposed district and the
32concurrence of the election official conducting the election.

33(b) (1) If at least 12 persons have been registered to vote within
34the territory of the district for each of the 90 days preceding the
35close of the hearing, the vote shall be by the registered voters of
36the district, who need not necessarily be the same persons, with
37each voter having one vote. Otherwise, the vote shall be by the
38landowners of the district and each landowner who is the owner
39of record at the close of the protest hearing, or the authorized
40representative thereof, shall have one vote for each acre or portion
P8    1of an acre of land that he or she owns within the district. The
2number of votes to be voted by a particular landowner shall be
3specified on the ballot provided to that landowner.

4(2) For purposes of this subdivision, for an entity paying
5possessory interest tax on state-owned land, “landowner” means
6 the entity that is paying the possessory interest tax.

7(c) Ballots for the special election authorized by subdivision (a)
8may be distributed to qualified electors by mail with return postage
9prepaid or by personal service by the election official. The official
10conducting the election may certify the proper mailing of ballots
11by an affidavit, which shall be exclusive proof of mailing in the
12absence of fraud. The voted ballots shall be returned to the election
13officer conducting the election not later than the hour specified in
14the resolution calling the election. However, if all the qualified
15voters have voted, the election shall be closed.


SEC. 6.  

Section 53398.80.5 is added to the Government Code,
17to read:



(a) If the public financing authority adopts a
19resolution proposing initiation of proceedings to issue bonds
20pursuant to Section 53398.77 for port or harbor infrastructure, it
21shall, before submitting the proposal to the voters pursuant to
22Section 53398.80, submit the proposal, together with the
23 information specified in subdivisions (a) to (c), inclusive, and (e)
24and (f) of Section 53398.78, to the affected harbor agency pursuant
25to Section 1713 of the Harbors and Navigation Code for its
26preliminary approval.

27(b) If the harbor agency grants preliminary approval, the
28proposal shall be considered by the State Lands Commission for
29final approval pursuant to Section 1714 of the Harbors and
30Navigation Code.

31(c) If the State Lands Commission votes in favor of the issuance
32of the bonds as provided in Section 1714 of the Harbors and
33Navigation Code, the public financing authority shall proceed with
34the submission of the proposal to the voters.


SEC. 7.  

Section 53398.81 of the Government Code is amended
36to read:



(a) (1) Except as specified in paragraph (2), the
38bonds may be issued if 55 percent of the voters voting on the
39proposition vote in favor of issuing the bonds.

P9    1(2) For a seaport infrastructure financing district, the bonds may
2be issued if two-thirds of the voters voting on the proposition vote
3in favor of issuing the bonds.

4(b) If the voters approve the issuance of the bonds as provided
5by subdivision (a), the public financing authority shall proceed
6with the issuance of the bonds by adopting a resolution that shall
7provide for all of the following:

8(1) The issuance of the bonds in one or more series.

9(2) The principal amount of the bonds that shall be consistent
10with the amount specified in subdivision (b) of Section 53398.78.

11(3) The date the bonds will bear.

12(4) The date of maturity of the bonds.

13(5) The denomination of the bonds.

14(6) The form of the bonds.

15(7) The manner of execution of the bonds.

16(8) The medium of payment in which the bonds are payable.

17(9) The place or manner of payment and any requirements for
18registration of the bonds.

19(10) The terms of call or redemption, with or without premium.


SEC. 8.  

Section 1690 of the Harbors and Navigation Code is
21amended to read:



The Legislature finds and declares all of the following:

23(a) The state has a compelling interest in the success of its ports
24and harbors because they provide significant economic benefit to
25the state in terms of jobs, personal income, business revenue, and
26taxes. It is the policy of the state that, because of that compelling
27interest, legislation in this area is a matter of statewide concern
28and is necessary to develop the harbors and ports of this state for
29the benefit of the people.

30(b) Ports and harbors are the vital interface between water and
31land transportation for trade with the Pacific Rim countries and
32other trade. In this respect, the specific management of the state’s
33ports and harbors by specific harbor and port districts established
34pursuant to Division 8 (commencing with Section 5800) are of
35equal statewide concern and importance as the management of
36granted lands held in trust for the state by a local port or harbor

38(c) Historically, California’s ports and harbors have been
39self-supporting. Most port and harbor districts do not levy or
40expend funds generated by local taxes, as most of their operations
P10   1are funded directly through fees and other revenue the ports
2generate from their users or tenants, in addition to occasional state
3and federal grants.

4(d) The report of the California Transportation Commission
5entitled “Improving Access to California’s Ports,” dated February
61990, found thatbegin delete $897end deletebegin insert eight hundred ninety-sevenend insert millionbegin insert dollars
7($897,000,000)end insert
is needed for port access transportation projects.
8By December 2014, the “California Freight Mobility Plan” report
9of the Department of Transportation identified a comprehensive
10list of freight projects in the state, including port access
11transportation projects, with an estimated total cost of one hundred
12thirty-eight billion dollars ($138,000,000,000).

13(e) In addition to port access transportation projects, there is a
14need for new harbor facilities and infrastructure investments that
15will enhance California’s competitiveness for international cargoes,
16grow employment, yield significant economic development,
17increase state and local tax revenues, and reduce impacts to
18environmental quality from goods movement.

19(f) Because of limited revenues from port operations, shrinking
20federal and state funding and the increasing demand for those
21limited funds, ports and harbors are no longer able to finance
22projects of this magnitude without new funding mechanisms. One
23such mechanism that can be used to finance port and harbor
24development projects is the enhanced infrastructure financing

26(g) It is the intent of the Legislature to assist in the reduction of
27local borrowing costs, help accelerate the construction, repair, and
28maintenance of port capital improvements, and promote greater
29use of existing and new financial instruments and mechanisms.

30(h) It is further the intent of the Legislature to assert the state’s
31plenary power over the financing of port and harbor infrastructure
32by harbor agencies as matters of statewide concern and to authorize
33the use of tax increment financing, as providedbegin delete byend delete in Chapter 2.99
34(commencing with Section 53398.50) of Part 1 of Division 2 of
35Title 5 of the Government Code, to support investment of tax
36revenues in port and harbor infrastructure.

37(i) The Legislature empowers local legislative bodies with
38specific and exclusive delegated authority to manage the state’s
39ports and harbors by legislative grant and by establishment of
40special districts pursuant to this code. In addition, the Legislature
P11   1delegates to public financing authorities the power to establish
2seaport infrastructure financing districts for the purpose of
3leveraging investment in support of the statewide interest in
4improving port and harbor infrastructure.


SEC. 9.  

Section 1698 of the Harbors and Navigation Code is
6amended to read:



(a) “Port or harbor infrastructure” means any of the
8following, if its primary or predominant use is of direct benefit to
9the port or harbor:

10(1) Streets, roads, highways, bridges, sidewalks, curbs, gutters,
11tunnels, subways, alleyways, viaducts, pipelines, rail lines, or other
12facilities for the transportation or movement of people, vehicles,
13equipment, or goods.

14(2) Piers, docks, wharves, slips, quays, platforms, decks, cranes,
15or other facilities for the mooring, docking, loading, or unloading
16of vessels.

17(3) Lands, tidelands, submerged lands, easements, port access
18routes, channel improvements, rights-of-way, dredge disposal sites,
19 safety zones, breakwaters, levees, bulkheads, or walls of rock or
20other material to protect property or traffic.

21(4) Parking, warehouse, or storage facilities.

22(5) Parks, recreation, or open space facilities.

23(6) Remediation or any capital improvement that improves
24environmental quality.

25(7) Water, wastewater, drainage, electric, or telecommunication
26systems or facilities.

27(8) Buildings, structures, facilities, improvements, or equipment
28necessary or convenient to any of paragraphs (1) to (7), inclusive,
29or to the operation of a port or harbor.

30(9) Public improvements authorized pursuant to the
31Improvement Act of 1911 (Division 7 (commencing with Section
325000) of the Streets and Highways Code), the Improvement Bond
33Act of 1915 (Division 10 (commencing with Section 8500) of the
34Streets and Highways Code), and the Mello-Roos Community
35Facilities Act of 1982 (Chapter 2.5 (commencing with Section
3653311) of Part 1 of Division 2 of Title 5 of the Government Code).

37(b) Any port or harbor infrastructure may be privately operated.
38Except for any port or harbor infrastructure financed or subsidized
39with public trust revenues, any privately owned port or harbor
40infrastructure may be eligible in whole or in part for financing or
P12   1other support or subsidy from money deposited in the infrastructure
2fund pursuant to subdivision (a) of Section 1701.

3(c) If a port or harbor infrastructure financed wholly or partly
4with public funds is privately owned and if the use for which the
5port or harbor infrastructure was originally constructed changes
6or is incompatible with the port authority’s master plan, the private
7owner shall pay the public agency the percentage of the full
8appreciated value of the port or harbor infrastructure that was
9originally financed with public funds.

10(d) Any port or harbor infrastructure may be located within,
11partly within and partly outside, or outside the boundaries of any
12harbor agency.

13(e) Any port or harbor infrastructure that has been purchased,
14constructed, expanded, improved, or rehabilitated by the
15expenditure or use of public trust revenues shall be held as an asset
16of the trust in a share proportionate to the investment of public
17 trust revenues.


SEC. 10.  

Section 1699 is added to the Harbors and Navigation
, to read:



“Seaport infrastructure financing district” means an
21enhanced infrastructure financing district that finances port or
22harbor infrastructure created in accordance with Chapter 3
23(commencing with Section 1710) of this part and Chapter 2.99
24(commencing with Section 53398.50) of Part 1 of Division 2 of
25Title 5 of the Government Code.


SEC. 11.  

Chapter 3 (commencing with Section 1710) is added
27to Part 1 of Division 6 of the Harbors and Navigation Code, to


30Chapter  3. Seaport Infrastructure Financing Districts




The Legislature finds and declares all of the following:

33(a) In addition to the findings and declarations in Section
3453398.50 of the Government Code, the ability to capture property
35tax increment revenues to finance needed port and harbor
36infrastructure projects will provide direct benefits to the state.
37When harbor agencies are better funded to further the objectives
38of the state, its ports and harbors, and the public trust and
39enjoyment of those trust lands by the people of the state, local
40economies and the local environment will also be improved.

P13   1(b) A port or harbor or its operation frequently generates large
2local tax benefits directly as a result of the possessory interest taxes
3paid on the value of leased port and harbor real property.

4(c) The tax increment increases in possessory interest taxes that
5will result from the improvement of port and harbor infrastructure
6should be captured, whenever possible, and reinvested to support
7the state’s significant interest in the successful operation of its
8ports and harbors.

9(d) The unique nature of the state’s public seaports and harbors,
10including the nature of the statewide interest in their operations,
11requires special rules if these ports and harbors are to be allowed
12to participate in a seaport infrastructure financing district.

13(e) The seaport infrastructure financing district is specifically
14developed to include publicly owned property, to improve that
15public property, and to achieve the public goals of improving the
16state’s waterborne commerce, enhancing economic prosperity, and
17financing the costs of environmental mitigation and improvement.

18(f) This chapter is intended to maintain and enforce the state’s
19retained rights, statewide interests, obligations and sovereign duties
20in its ports, harbors, and tidelands, including protecting these same
21assets from local control or excise, while simultaneously creating
22an opportunity for public financing authorities to participate in
23facilitating investment in the state’s public seaport infrastructure
24and finance projects that will have the anticipated effect of not
25only providing statewide benefits, but also local benefits such as
26boosting local employment, local secondary economic
27 development, local environmental improvement, and increased
28local tax revenues.



As used in this chapter, “public financing authority” has
30the same meaning as provided in Section 53398.51 of the
31Government Code.



When designated by the legislative body pursuant to
33Section 53398.62 of the Government Code, the harbor agency
34shall prepare a proposed infrastructure financing plan, as provided
35in Section 53398.63 of the Government Code, for a seaport
36infrastructure financing district covering a port or harbor



(a) Upon receipt of a resolution from the public financing
39authority promulgated under subdivision (a) of Section 53398.80.5
40of the Government Code, the harbor agency shall have 60 days to
P14   1consider the proposal. During this time, the harbor agency’s
2governing body shall act at a duly noticed meeting to either vote
3to give preliminary approval of the proposal, subject to the
4provisions of this section, or disapprove the proposal and return
5it to the public financing authority.

6(b) A harbor agency may give preliminary approval under this
7section only if it makes all of the following affirmative findings:

8(1) The harbor agency has prepared an infrastructure financing
9plan pursuant to Section 1712.

10(2) The improvements to the harbor agency’s property to be
11financed through the proceeds of a seaport infrastructure financing
12district are solely for the support of port or harbor infrastructure.

13(3) All publicly owned property that is leased to private parties
14within the boundaries of the seaport infrastructure financing district
15has been reported by the harbor agency to the local county assessor
16to facilitate possessory interest taxation.

17(4) (A) If the harbor agency is acting on granted lands, all of
18the projects and uses proposed in the seaport infrastructure
19financing district are consistent with the state tidelands trust and
20the conditions of the harbor agency grant.

21(B) If the harbor agency was formed pursuant to this code, all
22of the projects and uses proposed in the seaport infrastructure
23financing district are consistent with its charter and the statewide
24interests in the operation of harbors and ports.

25(c) (1) The harbor agency shall not grant preliminary approval
26under this section unless both of the following apply:

27(A) The seaport infrastructure financing district will operate
28independently of any other prior or concurrent agreements between
29the harbor agency and the public financing authority, or the local
30governments that make up the public financing authority.

31(B) No transfers of funds or obligations, or future transfers of
32funds or obligations contingent on the approval of the seaport
33infrastructure financing district, its financing, or projects within
34the district, are created between the harbor agency and the public
35financing authority, or the local governments that make up the
36public financing authority.

37(2) For purposes of this subdivision, “transfers of funds or
38obligations” includes any direct or indirect transfer of harbor
39agency resources to the public financing authority, or the local
40governments that make up the public financing authority, except
P15   1for any of the following if agreed to between the harbor agency
2and the public financing authority in writing:

3(A) Harbor agency reimbursements of a public financing
4authority for its direct administrative costs of establishing the
5seaport infrastructure financing district.

6(B) Public financing authority expenses for underwriting the
7bond issuance for the identified projects in the seaport
8infrastructure financing district.

9(C) Any other administrative expenses or direct operating
10expenses that are incurred as the direct result of creating the seaport
11infrastructure financing district that are identified by both parties
12at the time of preliminary approval and in advance of the expense
13being incurred by the public financing authority.

14(d) If a harbor agency votes to give preliminary approval to the
15proposal, it shall immediately forward its preliminary approval to
16the State Lands Commission for its consideration.



(a) Upon receipt of a preliminary approval from a harbor
18agency granted pursuant to Section 1713, the State Lands
19Commission shall consider the proposal and either grant or deny
20final approval.

21(b) Prior to granting final approval the State Lands Commission
22shall do both of the following:

23(1) Review the infrastructure financing plan prepared by the
24harbor agency pursuant to Section 1712.

25(2) Review the findings of the harbor agency made in its
26preliminary approval.

27(c) The State Lands Commission shall grant final approval only
28if it makes all of the following findings:

29(1) The state’s interests in its tidelands and its ports and harbors
30are furthered by the funding of the seaport infrastructure financing

32(2) The principal purposes of the seaport infrastructure financing
33district are to further port and harbor infrastructure.

34(3) The execution of the financing section of the infrastructure
35finance plan is more likely than not to result in the outcomes

37(4) No revenues shall be made available to local governments
38as a result of the approval of the seaport infrastructure financing
39district from state revenues, revenues derived from granted lands,
40or from ports or harbors created under this code, except as
P16   1otherwise allowed under paragraph (2) of subdivision (c) of Section

3(5) The harbor agency and the public financing authority
4participating in the seaport infrastructure financing district have
5each completed all procedural requirements, financial due
6diligence, and made all findings required by this chapter and
7Chapter 2.99 (commencing with Section 53398.50) of Part 1 of
8Division 2 of Title 5 of the Government Code.

9(6) All of the projects and uses proposed in the seaport
10infrastructure financing district are consistent with the state
11tidelands trust and the conditions of any grants, if applicable, and
12the statewide interests in the operation of harbors and ports.

13(7) No agreements by the harbor agency that may control the
14discretion of the harbor agency to maintain its port or harbor
15operations or to cede any such control to the discretion of a third
16party were made as a condition of participation in the seaport
17infrastructure financing district.

18(d) If the State Lands Commission gives final approval to the
19proposal, it shall immediately forward its approval to the public
20financing authority for further action pursuant to subdivision (c)
21of Section 53398.80.5 of the Government Code.



(a) Except as provided in subdivision (b), Chapter 2.99
23(commencing with Section 53398.50) of Part 1 of Division 2 of
24Title 5 of the Government Code shall apply to this chapter.

25(b) To the extent that any provision of this chapter conflicts
26with any provision of Chapter 2.99 (commencing with Section
2753398.50) of Part 1 of Division 2 of Title 5 of the Government
28Code with respect to a seaport infrastructure financing district, this
29chapter shall prevail.



All permanent fixtures and capital improvements to the
31real property of a harbor agency that administers public trust
32tidelands made pursuant to a seaport infrastructure district’s
33approved infrastructure financing plan shall be a trust asset once
34completed. This provision does not apply to fixtures and
35improvements otherwise agreed as nonpermanent in a lease
36between the harbor agency and a private tenant.



If a harbor agency administering granted public trust
38property is a department of a local governmental body, any
39negotiations between the two entities with respect to any
40infrastructure financing, operations, or any other activity requiring
P17   1action by the harbor agency shall be undertaken at arm’s length
2in recognition of the duties of the harbor agency to effectuate
3statewide interests.



(a) Pursuant to Section 6009 of the Public Resources
5Code, the State Lands Commission shall retain absolute discretion
6over the determination of whether or not investment of local
7resources in port or harbor infrastructure, the actions of a harbor
8agency, or any other action taken by a seaport infrastructure
9financing district is consistent with the state’s interests in its
10tidelands and submerged lands. Nothing in this chapter, including
11a finding made pursuant to Section 1714, or Chapter 2.99
12(commencing with Section 53398.50) of Part 1 of Division 2 of
13Title 5 of the Government Code, shall preclude the State Lands
14Commission from enforcing the state’s interests in its tidelands.

15(b) Pursuant to Section 6009.1 of the Public Resources Code,
16 a harbor agency that manages granted state tidelands retains its
17status as a trustee whether or not it is located within a seaport
18infrastructure financing district. Nothing in this chapter, including
19a finding made pursuant to Section 1714, or Chapter 2.99
20(commencing with Section 53398.50) of Part 1 of Division 2 of
21Title 5 of the Government Code, shall preclude the harbor agency
22from conducting its duties as a trustee of state tidelands.

23(c) Nothing in this chapter or in Chapter 2.99 (commencing
24with Section 53398.50) of Part 1 of Division 2 of Title 5 of the
25Government Code grants any authority to any public financing
26authority, or the local governments that compose the public finance
27authority, in any manner whatsoever to manage, direct, control,
28or exercise jurisdiction over a harbor agency and its management
29of port or harbor infrastructure.