Amended in Senate June 1, 2015

Amended in Senate April 7, 2015

Amended in Senate March 23, 2015

Senate Bill No. 63

Introduced by Senator Hall

begin insert

(Coauthor: Senator Lara)

end insert

(Coauthors: Assembly Members begin delete Bonta end delete begin insert Bonta, Gipson, end insert 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.

LEGISLATIVE COUNSEL’S DIGEST

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 2⁄3 of the voters, and would provide that for purposes of these voters, a “landowner” begin delete means the end delete begin insert includes an end insert entity paying possessory interest tax on state-owned land. The bill would prescribe additional procedures and requirements for the establishment of a seaport begin delete enhanced end delete infrastructure financing district, including approval by the harbor agency and the State Lands Commission before the proposal is submitted to the voters for approval. begin insert The bill would require the harbor agency to reimburse the commission, for its administrative costs of considering the proposal, from bond proceeds, if any. end insert 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. begin insert The bill would exclude from its provisions the Stockton Port District and river port districts. end insert

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.  

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

(1) It is equitable and in the public interest to provide alternative
procedures for financing public works and services needed to
support new commercial, environmental, and industrial
development in the state’s begin delete ports end delete begin insert seaports end insert and harbors that would
generate significant new employment opportunities and economic
development, increase state and local tax revenues, enhance begin delete port end delete
begin insert seaport end insert competitiveness in the international trade community,
reduce congestion and delay in the supply chain, and result in
improved environmental quality.

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

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

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

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

(b) The Legislature further finds and declares that in order to
adapt the provisions of Chapter 2.99 (commencing with Section
53398.50) of Part 1 of Division 2 of Title 5 of the Government
Code, relating to enhanced infrastructure financing districts, to the
unique circumstances that surround the state’s begin delete ports end delete begin insert seaports end insert and
harbors, this special act is necessary.

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

SEC. 2.  

Section 53398.52 of the Government Code is amended
to read:

53398.52.  

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

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

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

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

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

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

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

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

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

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

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

(5) Child care facilities.

(6) Libraries.

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

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

(9) Brownfield restoration and other environmental mitigation.

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

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

(12) The acquisition, construction, or rehabilitation of housing
for persons of low and moderate income, as defined in Section
50093 of the Health and Safety Code, for rent or purchase.

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

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

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

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

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

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

(e) A district may utilize any powers under the Polanco
Redevelopment Act (Article 12.5 (commencing with Section
33459) of Chapter 4 of Part 1 of Division 24 of the Health and
Safety Code), and finance any action necessary to implement that
act.

SEC. 3.  

Section 53398.62 of the Government Code is amended
to read:

53398.62.  

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

(b) In the case of a district proposed for port or harbor
infrastructure, the legislative body shall designate and direct the
harbor begin delete agency end delete begin insert agency, except as provided in Section 1719 of the
Harbors and Navigation Code, end insert to prepare an infrastructure
financing plan pursuant to Section 53398.63.

SEC. 4.  

Section 53398.69 of the Government Code is amended
to read:

53398.69.  

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

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

(1) An affirmative vote, pursuant to subdivision (a) of Section
53398.81 and, if applicable, subdivision (c) of Section 53398.80.5,
to issue bonds to finance the infrastructure financing plan.

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

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

SEC. 5.  

Section 53398.80 of the Government Code is amended
to read:

53398.80.  

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

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

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

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

SEC. 6.  

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

53398.80.5.  

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

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

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

SEC. 7.  

Section 53398.81 of the Government Code is amended
to read:

53398.81.  

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

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

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

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

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

(3) The date the bonds will bear.

(4) The date of maturity of the bonds.

(5) The denomination of the bonds.

(6) The form of the bonds.

(7) The manner of execution of the bonds.

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

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

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

SEC. 8.  

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

1690.  

The Legislature finds and declares all of the following:

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

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

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

(d) The report of the California Transportation Commission
entitled “Improving Access to California’s Ports,” dated February
1990, found that eight hundred ninety-seven million dollars
($897,000,000) is needed for port access transportation projects.
By December 2014, the “California Freight Mobility Plan” report
of the Department of Transportation identified a comprehensive
list of freight projects in the state, including port access
transportation projects, with an estimated total cost of one hundred
thirty-eight billion dollars ($138,000,000,000).

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

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

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

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

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

SEC. 9.  

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

1698.  

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

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

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

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

(4) Parking, warehouse, or storage facilities.

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

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

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

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

(9) Public improvements authorized pursuant to the
Improvement Act of 1911 (Division 7 (commencing with Section
5000) of the Streets and Highways Code), the Improvement Bond
Act of 1915 (Division 10 (commencing with Section 8500) of the
Streets and Highways Code), and the Mello-Roos Community
Facilities Act of 1982 (Chapter 2.5 (commencing with Section
53311) of Part 1 of Division 2 of Title 5 of the Government Code).

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

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

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

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

SEC. 10.  

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

1699.  

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

SEC. 11.  

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

 

Chapter  3. Seaport Infrastructure Financing Districts

 

1710.  

The Legislature finds and declares all of the following:

(a) In addition to the findings and declarations in Section
53398.50 of the Government Code, the ability to capture property
tax increment revenues to finance needed begin delete port end delete begin insert seaport end insert and harbor
infrastructure projects will provide direct benefits to the state.
When harbor agencies are better funded to further the objectives
of the state, its begin delete ports end delete begin insert seaports end insert and harbors, and the public trust and
enjoyment of those trust lands by the people of the state, local
economies and the local environment will also be improved.

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

(c) The tax increment increases in possessory interest taxes that
will result from the improvement of begin delete port end delete begin insert seaport end insert and harbor
infrastructure should be captured, whenever possible, and
reinvested to support the state’s significant interest in the successful
operation of its begin delete ports end delete begin insert seaports end insert and harbors.

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

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

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

1711.  

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

1712.  

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

1713.  

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

1714.  

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

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

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

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

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

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

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

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

(4) No revenues shall be made available to local governments
as a result of the approval of the seaport infrastructure financing
district from state revenues, revenues derived from granted lands,
or from ports or harbors created under this code, except as
otherwise allowed under paragraph (2) of subdivision (c) of Section
1713.

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

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

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

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

begin insert

(e) The State Lands Commission shall be reimbursed by the
harbor agency for its direct administrative costs of considering a
seaport infrastructure financing district proposal under this section
from the proceeds of the bonds issued, if any, for the identified
projects in the seaport infrastructure financing district.

end insert

1715.  

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

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

1716.  

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

1717.  

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

1718.  

(a) Pursuant to Section 6009 of the Public Resources
Code, the State Lands 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 interests in its
tidelands and submerged lands. Nothing in this chapter, including
a finding made pursuant to Section 1714, or Chapter 2.99
(commencing with Section 53398.50) of Part 1 of Division 2 of
Title 5 of the Government Code, shall preclude the State Lands
Commission from enforcing the state’s interests in its tidelands.

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

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

begin insert

begin insert 1719. end insert   

This chapter shall not apply to the Stockton Port District,
as established pursuant to Part 4 (commencing with Section 6200)
of Division 8, or to a river port district established pursuant to
Part 6 (commencing with Section 6800) of Division 8.

end insert