Amended in Assembly September 1, 2015

Amended in Senate June 1, 2015

Amended in Senate April 7, 2015

Amended in Senate March 23, 2015

Senate BillNo. 63


Introduced by Senator Hall

(Coauthor: Senator Lara)

(Coauthors: Assembly Members Bonta, Gipson, 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 23 of the voters, and would provide that for purposes of these voters, a “landowner” includes an entity paying possessory interest tax on state-owned land. The bill would prescribe additional procedures and requirements for the establishment of a seaport 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 require the harbor agency to reimburse the commission, for its administrative costs of considering the proposal, from bond proceeds, if any. 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. The bill would exclude from its provisions the Stockton Port District and river port districts.

begin insert

This bill would incorporate additional changes in Sections 53398.52, 53398.62, and 53398.69 of the Government Code proposed by AB 313 that would become operative only if AB 313 and this bill are both chaptered and become effective on or before January 1, 2016, and this bill is chaptered last.

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:

P2    1

SECTION 1.  

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

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 seaports and harbors that would generate
P3    1significant new employment opportunities and economic
2development, increase state and local tax revenues, enhance seaport
3competitiveness in the international trade community, reduce
4congestion and delay in the supply chain, and result in improved
5environmental quality.

6(2) Seaports and harbors in California generally do not levy or
7expend any funds generated by local taxes, as most of their
8operations are funded directly through fees, tariffs, leases, and
9other revenue the seaports and harbors generate from their users
10and tenants, in addition to the occasional state or federal grant.

11(3) There is significant opportunity for development in our
12state’s seaports and harbors. However, the state lacks the public
13infrastructure funding and financing necessary to support all of
14the new development that is demanded.

15(4) Our state’s waterfront has infrastructure needs that cannot
16be met by private investment alone, and therefore public financing
17mechanisms are required to finance the remediating of deteriorating
18conditions. The absence of practical and equitable methods for
19financing both regional and local public works leads to a declining
20standard of seaport infrastructure, a failure to construct new public
21works needed to support new commercial and industrial
22development in our seaports and harbors, and increased congestion
23and environmental degradation.

24(5) The seaports and harbors of California are valuable assets
25of the state that provide special maritime, navigational, recreational,
26cultural, and historical benefits to the people of the state and the
27management and development of these seaports and harbors are
28matters of statewide significance. Remediating any condition that
29will otherwise result in underinvestment in the state’s seaports and
30harbors by providing a financing mechanism, through the use of
31incremental property tax revenues, is a matter of statewide
32importance that will further the purposes of the public trust. Public
33facilities along the state’s waterfront that are eligible for financing
34pursuant to the enhanced infrastructure financing district law will
35increase public access to, or use or enjoyment of, public trust lands
36and are, therefore, facilities of statewide significance.

37(b) The Legislature further finds and declares that in order to
38adapt the provisions of Chapter 2.99 (commencing with Section
3953398.50) of Part 1 of Division 2 of Title 5 of the Government
40Code, relating to enhanced infrastructure financing districts, to the
P4    1unique circumstances that surround the state’s seaports and harbors,
2this special act is necessary.

3(c) Due to the extraordinary capital needs of seaports and
4harbors, it is the intent of the Legislature to provide local
5governments that may benefit from additional investment in the
6seaports and harbors in their jurisdiction the authority to create
7and fund enhanced infrastructure financing districts in the manner
8that provides the optimal financing options to construct needed
9public facilities on public trust waterfront lands in order to meet
10the stated goals of statewide significance.

11

SEC. 2.  

Section 53398.52 of the Government Code is amended
12to read:

13

53398.52.  

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

14(A) The purchase, construction, expansion, improvement,
15seismic retrofit, or rehabilitation of any real or other tangible
16property with an estimated useful life of 15 years or longer that
17satisfies the requirements of subdivision (b).

18(B) The planning and design work that is directly related to the
19purchase, construction, expansion, or rehabilitation of property.

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

21(2) The facilities are not required to be physically located within
22the boundaries of the district. However, any facilities financed
23outside of a district shall have a tangible connection to the work
24of the district, as detailed in the infrastructure financing plan
25adopted pursuant to Section 53398.69.

26(3) A district shall not finance routine maintenance, repair work,
27or the costs of an ongoing operation or providing services of any
28kind.

29(b) The district shall finance only public capital facilities or
30other specified projects of communitywide significance that
31provide significant benefits to the district or the surrounding
32community, including, but not limited to, all of the following:

33(1) Highways, interchanges, ramps and bridges, arterial streets,
34parking facilities, and transit facilities.

35(2) Sewage treatment and water reclamation plants and
36interceptor pipes.

37(3) Facilities for the collection and treatment of water for urban
38uses.

39(4) Flood control levees and dams, retention basins, and drainage
40channels.

P5    1(5) Child care facilities.

2(6) Libraries.

3(7) Parks, recreational facilities, and open space.

4(8) Facilities for the transfer and disposal of solid waste,
5including transfer stations and vehicles.

6(9) Brownfield restoration and other environmental mitigation.

7(10) The development of projects on a former military base,
8provided that the projects are consistent with the military base
9authority reuse plan and are approved by the military base reuse
10authority, if applicable.

11(11) The repayment of the transfer of funds to a military base
12reuse authority pursuant to Section 67851 that occurred on or after
13the creation of the district.

14(12) The acquisition, construction, or rehabilitation of housing
15for persons of low and moderate income, as defined in Section
1650093 of the Health and Safety Code, for rent or purchase.

17(13) Acquisition, construction, or repair of industrial structures
18for private use.

19(14) Transit priority projects, as defined in Section 21155 of
20the Public Resources Code, that are located within a transit priority
21project area. For purposes of this paragraph, a transit priority
22project area may include a military base reuse plan that meets the
23definition of a transit priority project area and it may include a
24contaminated site within a transit priority project area.

25(15) Projects that implement a sustainable communities strategy,
26when the State Air Resources Board, pursuant to Chapter 2.5
27(commencing with Section 65080) of Division 1 of Title 7, has
28accepted a metropolitan planning organization’s determination
29that the sustainable communities strategy or the alternative planning
30strategy would, if implemented, achieve the greenhouse gas
31emission reduction targets.

32(16) Port or harbor infrastructure, as defined by Section 1698
33of the Harbors and Navigation Code.

34(c) The district shall require, by recorded covenants or
35restrictions, that housing units built pursuant to this section shall
36remain available at affordable housing costs to, and occupied by,
37persons and families of low- or moderate-income households for
38the longest feasible time, but for not less than 55 years for rental
39units and 45 years for owner-occupied units.

P6    1(d) The district may finance mixed-income housing
2developments, but may finance only those units in such a
3development that are restricted to occupancy by persons of low or
4moderate incomes as defined in Section 50093 of the Health and
5Safety Code, and those onsite facilities for child care, after-school
6care, and social services that are integrally linked to the tenants of
7the restricted units.

8(e) A district may utilize any powers under the Polanco
9Redevelopment Act (Article 12.5 (commencing with Section
1033459) of Chapter 4 of Part 1 of Division 24 of the Health and
11Safety Code), and finance any action necessary to implement that
12act.

13begin insert

begin insertSEC. 2.5.end insert  

end insert

begin insertSection 53398.52 of the end insertbegin insertGovernment Codeend insertbegin insert is
14amended to read:end insert

15

53398.52.  

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

16(A) The purchase, construction, expansion, improvement,
17seismic retrofit, or rehabilitation of any real or other tangible
18property with an estimated useful life of 15 years or longer that
19satisfies the requirements of subdivision (b).

20(B) The planning and design work that is directly related to the
21purchase, construction, expansion, or rehabilitation of property.

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

23(2) The facilitiesbegin delete needend deletebegin insert areend insert notbegin insert required toend insert be physically located
24within the boundaries of the district. However, any facilities
25financed outside of a districtbegin delete mustend deletebegin insert shallend insert have a tangible connection
26to the work of the district, as detailed in the infrastructure financing
27plan adopted pursuant to Section 53398.69.

28(3) A districtbegin delete mayend deletebegin insert shallend insert not finance routine maintenance, repair
29work, or the costs of an ongoing operation or providing services
30of any kind.

31(b) The district shall finance only public capital facilities or
32other specified projects of communitywide significance that
33provide significant benefits to the district or the surrounding
34community, including, but not limited to, all of the following:

35(1) Highways, interchanges, ramps and bridges, arterial streets,
36parking facilities, and transit facilities.

37(2) Sewage treatment and water reclamation plants and
38interceptor pipes.

39(3) Facilities for the collection and treatment of water for urban
40uses.

P7    1(4) Flood control levees and dams, retention basins, and drainage
2channels.

3(5) Child care facilities.

4(6) Libraries.

5(7) Parks, recreational facilities, and open space.

6(8) Facilities for the transfer and disposal of solid waste,
7including transfer stations and vehicles.

8(9) Brownfield restoration and other environmental mitigation.

9(10) The development of projects on a former military base,
10provided that the projects are consistent with the military base
11authority reuse plan and are approved by the military base reuse
12authority, if applicable.

13(11) The repayment of the transfer of funds to a military base
14reuse authority pursuant to Section 67851 that occurred on or after
15the creation of the district.

16(12) The acquisition, construction, or rehabilitation of housing
17for persons ofbegin delete lowend deletebegin insert very low, low,end insert and moderate income, as defined
18inbegin delete Sectionend deletebegin insert Sections 50105 andend insert 50093 of the Health and Safety
19Code, for rent or purchase.

20(13) Acquisition, construction, or repair of industrial structures
21for private use.

22(14) Transit priority projects, as defined in Section 21155 of
23the Public Resources Code, that are located within a transit priority
24project area. For purposes of this paragraph, a transit priority
25project area may include a military base reuse plan that meets the
26definition of a transit priority project area and it may include a
27contaminated site within a transit priority project area.

28(15) Projects that implement a sustainable communities strategy,
29when the State Air Resources Board, pursuant to Chapter 2.5
30(commencing with Section 65080) of Divisionbegin delete 2end deletebegin insert 1end insert of Title 7, has
31accepted a metropolitan planning organization’s determination
32that the sustainable communities strategy or the alternative planning
33strategy would, if implemented, achieve the greenhouse gas
34emission reduction targets.

begin insert

35(16) Port or harbor infrastructure, as defined by Section 1698
36of the Harbors and Navigation Code.

end insert

37(c) The district shall require, by recorded covenants or
38restrictions, that housing units built pursuant to this section shall
39remain available at affordable housing costs to, and occupied by,
40persons and families ofbegin delete low-end deletebegin insert very low, low,end insert or moderate-income
P8    1households for the longest feasible time, but for not less than 55
2years for rental units and 45 years for owner-occupied units.

3(d) The district may finance mixed-income housing
4developments, but may finance only those units in such a
5development that are restricted to occupancy by persons ofbegin delete lowend delete
6begin insert very low, low,end insert or moderate incomes as defined inbegin delete Sectionend deletebegin insert Sections
750105 andend insert
50093 of the Health and Safety Code, and those onsite
8facilities for child care, after-school care, and social services that
9are integrally linked to the tenants of the restricted units.

10(e) A district may utilize any powers underbegin insert eitherend insert the Polanco
11Redevelopment Act (Article 12.5 (commencing with Section
1233459) of Chapter 4 of Part 1 of Division 24 of the Health and
13Safetybegin delete Code),end deletebegin insert Code) or Chapter 6.10 (commencing with Section
1425403) of Division 20 of the Health and Safety Code,end insert
and finance
15any action necessary to implement that act.

16

SEC. 3.  

Section 53398.62 of the Government Code is amended
17to read:

18

53398.62.  

(a)  Except as provided in subdivision (b), after
19adopting the resolution pursuant to Section 53398.59, the legislative
20body shall designate and direct the city or county engineer or other
21appropriate official to prepare an infrastructure financing plan
22pursuant to Section 53398.63.

23(b) In the case of a district proposed for port or harbor
24infrastructure, the legislative body shall designate and direct the
25harbor agency, except as provided in Section 1719 of the Harbors
26and Navigation Code, to prepare an infrastructure financing plan
27pursuant to Section 53398.63.

28begin insert

begin insertSEC. 3.5.end insert  

end insert

begin insertSection 53398.62 of the end insertbegin insertGovernment Codeend insertbegin insert is
29amended to read:end insert

30

53398.62.  

begin deleteAfter end deletebegin insert(a)end insertbegin insertend insertbegin insertExcept as provided in subdivision (b),
31after end insert
adopting the resolution pursuant to Section 53398.59, the
32legislative body shallbegin insert send a copy of the resolution to the public
33financing authority. The public financing authority shallend insert
designate
34and direct the city or county engineer or other appropriate official
35to prepare an infrastructurebegin insert financingend insert plan pursuant to Section
3653398.63.

begin insert

37(b) In the case of a district proposed for port or harbor
38infrastructure, the legislative body shall designate and direct the
39harbor agency, except as provided in Section 1719 of the Harbors
P9    1and Navigation Code, to prepare an infrastructure financing plan
2pursuant to Section 53398.63.

end insert
3

SEC. 4.  

Section 53398.69 of the Government Code is amended
4to read:

5

53398.69.  

(a) At the conclusion of the hearing, the legislative
6body may adopt a resolution proposing adoption of the
7infrastructure financing plan, as modified, and formation of the
8enhanced infrastructure financing district in a manner consistent
9with Section 53398.68, or it may abandon the proceedings.

10(b) The infrastructure financing plan and the formation of the
11enhanced infrastructure financing district shall take effect upon
12the legislative body’s adoption of the resolution. The infrastructure
13financing plan shall specify if the district shall be funded solely
14through the district’s share of tax increment, governmental or
15private loans, grants, bonds, assessments, fees, or some
16combination thereof. However, the public financing authority shall
17not issue bonds or levy assessments or fees that may be included
18in the infrastructure financing plan before one or more of the
19following:

20(1) An affirmative vote, pursuant to subdivision (a) of Section
2153398.81 and, if applicable, subdivision (c) of Section 53398.80.5,
22to issue bonds to finance the infrastructure financing plan.

23(2) Without compliance with the procedures required in
24subdivision (f) of Section 53398.75, to levy assessments or fees
25to finance the infrastructure financing plan.

26(c) In addition, the district may expend up to 10 percent of any
27accrued tax increment in the first two years of the effective date
28of the enhanced infrastructure financing district on planning and
29 dissemination of information to the residents within the district’s
30boundaries about the infrastructure financing plan and planned
31activities to be funded by the district.

32begin insert

begin insertSEC. 4.5.end insert  

end insert

begin insertSection 53398.69 of the end insertbegin insertGovernment Codeend insertbegin insert is
33amended to read:end insert

34

53398.69.  

(a) At the conclusion of the hearing, thebegin delete legislative
35bodyend delete
begin insert public financing authorityend insert may adopt a resolution proposing
36adoption of the infrastructure financing plan, as modified, and
37formation of the enhanced infrastructure financing district in a
38manner consistent with Section 53398.68, or it maybegin delete abandon the
39proceedings.end delete
begin insert end insertbegin insertadopt a resolution abandoning the proceedings. If
40the proceedings are abandoned, then the public financing authority
P10   1shall cease to exist by operation of this section with no further
2action required of the legislative body and the legislative body
3may not enact a resolution of intention to establish a district that
4includes the same geographic area within one year of the date of
5the resolution abandoning the proceedings.end insert

6(b) The infrastructure financing planbegin delete and the formation of the
7enhanced infrastructure financing districtend delete
shall take effect upon
8thebegin delete legislative body’send delete adoption of the resolution. The infrastructure
9financing plan shall specify if the district shall be funded solely
10through the district’s share of tax increment, governmental or
11private loans, grants, bonds, assessments, fees, or some
12combination thereof. However, the public financing authoritybegin delete mayend delete
13begin insert shallend insert not issue bonds or levy assessments or fees that may be
14included in the infrastructure financing planbegin delete prior toend deletebegin insert beforeend insert one or
15more of the following:

16(1) An affirmative vote, pursuant to subdivision (a) of Section
17begin delete 53398.81,end deletebegin insert 53398.81 and, if applicable, subdivision (c) of Section
1853398.80.5,end insert
to issue bonds to finance the infrastructure financing
19plan.

20(2) begin deleteWithout compliance end deletebegin insertCompliance end insertwith the procedures
21required in subdivision (f) of Section 53398.75, to levy assessments
22or fees to finance the infrastructure financing plan.

23(c) Inbegin delete additionend deletebegin insert addition,end insert the district may expend up to 10 percent
24of any accrued tax increment in the first two years of the effective
25date of the enhanced infrastructure financing district on planning
26and dissemination of information to the residents within the
27district’s boundaries about the infrastructure financing plan and
28planned activities to be funded by the district.

29

SEC. 5.  

Section 53398.80 of the Government Code is amended
30to read:

31

53398.80.  

(a) The public financing authority shall submit the
32proposal to issue the bonds to the voters who reside within the
33district. If the public financing authority adopts a resolution
34proposing initiation of proceedings to issue bonds pursuant to
35Section 53398.77, it shall then submit that proposal, together with
36the information specified in subdivisions (a) to (c), inclusive, of
37Section 53398.78, to the qualified electors of the district in the
38next general election or in a special election to be held,
39notwithstanding any other requirement, including any requirement
40that elections be held on specified dates, contained in the Elections
P11   1Code, at least 90 days but not more than 180 days following the
2adoption of the resolution of bond issuance. The public financing
3authority shall provide the resolution of bond issuance, a certified
4map of sufficient scale and clarity to show the boundaries of the
5district, and a sufficient description to allow the election official
6to determine the boundaries of the district to the official conducting
7the election within three business days after the adoption of the
8resolution of bond issuance. The assessor’s parcel numbers for the
9land within the district shall be included if it is a landowner election
10or the district does not conform to an existing district’s boundaries
11and if requested by the official conducting the election. If the
12election is to be held less than 125 days following the adoption of
13the resolution of bond issuance, the concurrence of the election
14official conducting the election shall be required. However, any
15time limit specified by this section or requirement pertaining to
16the conduct of the election may be waived with the unanimous
17consent of the qualified electors of the proposed district and the
18concurrence of the election official conducting the election.

19(b) (1) If at least 12 persons have been registered to vote within
20the territory of the district for each of the 90 days preceding the
21close of the hearing, the vote shall be by the registered voters of
22the district, who need not necessarily be the same persons, with
23each voter having one vote. Otherwise, the vote shall be by the
24landowners of the district and each landowner who is the owner
25of record at the close of the protest hearing, or the authorized
26representative thereof, shall have one vote for each acre or portion
27of an acre of land that he or she owns within the district. The
28number of votes to be voted by a particular landowner shall be
29specified on the ballot provided to that landowner.

30(2) For purposes of this subdivision, for an entity paying
31possessory interest tax on state-owned land, “landowner” means
32the entity that is paying the possessory interest tax.

33(c) Ballots for the special election authorized by subdivision (a)
34may be distributed to qualified electors by mail with return postage
35prepaid or by personal service by the election official. The official
36conducting the election may certify the proper mailing of ballots
37by an affidavit, which shall be exclusive proof of mailing in the
38absence of fraud. The voted ballots shall be returned to the election
39officer conducting the election not later than the hour specified in
P12   1the resolution calling the election. However, if all the qualified
2voters have voted, the election shall be closed.

3

SEC. 6.  

Section 53398.80.5 is added to the Government Code,
4to read:

5

53398.80.5.  

(a) If the public financing authority adopts a
6resolution proposing initiation of proceedings to issue bonds
7pursuant to Section 53398.77 for port or harbor infrastructure, it
8shall, before submitting the proposal to the voters pursuant to
9Section 53398.80, submit the proposal, together with the
10information specified in subdivisions (a) to (c), inclusive, and (e)
11and (f) of Section 53398.78, to the affected harbor agency pursuant
12to Section 1713 of the Harbors and Navigation Code for its
13preliminary approval.

14(b) If the harbor agency grants preliminary approval, the
15proposal shall be considered by the State Lands Commission for
16final approval pursuant to Section 1714 of the Harbors and
17Navigation Code.

18(c) If the State Lands Commission votes in favor of the issuance
19of the bonds as provided in Section 1714 of the Harbors and
20Navigation Code, the public financing authority shall proceed with
21the submission of the proposal to the voters.

22

SEC. 7.  

Section 53398.81 of the Government Code is amended
23to read:

24

53398.81.  

(a) (1) Except as specified in paragraph (2), the
25bonds may be issued if 55 percent of the voters voting on the
26proposition vote in favor of issuing the bonds.

27(2) For a seaport infrastructure financing district, the bonds may
28be issued if two-thirds of the voters voting on the proposition vote
29in favor of issuing the bonds.

30(b) If the voters approve the issuance of the bonds as provided
31by subdivision (a), the public financing authority shall proceed
32with the issuance of the bonds by adopting a resolution that shall
33provide for all of the following:

34(1) The issuance of the bonds in one or more series.

35(2) The principal amount of the bonds that shall be consistent
36with the amount specified in subdivision (b) of Section 53398.78.

37(3) The date the bonds will bear.

38(4) The date of maturity of the bonds.

39(5) The denomination of the bonds.

40(6) The form of the bonds.

P13   1(7) The manner of execution of the bonds.

2(8) The medium of payment in which the bonds are payable.

3(9) The place or manner of payment and any requirements for
4registration of the bonds.

5(10) The terms of call or redemption, with or without premium.

6

SEC. 8.  

Section 1690 of the Harbors and Navigation Code is
7amended to read:

8

1690.  

The Legislature finds and declares all of the following:

9(a) The state has a compelling interest in the success of its ports
10and harbors because they provide significant economic benefit to
11the state in terms of jobs, personal income, business revenue, and
12taxes. It is the policy of the state that, because of that compelling
13interest, legislation in this area is a matter of statewide concern
14and is necessary to develop the harbors and ports of this state for
15the benefit of the people.

16(b) Ports and harbors are the vital interface between water and
17land transportation for trade with the Pacific Rim countries and
18other trade. In this respect, the specific management of the state’s
19ports and harbors by specific harbor and port districts established
20pursuant to Division 8 (commencing with Section 5800) are of
21equal statewide concern and importance as the management of
22granted lands held in trust for the state by a local port or harbor
23district.

24(c) Historically, California’s ports and harbors have been
25self-supporting. Most port and harbor districts do not levy or
26expend funds generated by local taxes, as most of their operations
27are funded directly through fees and other revenue the ports
28generate from their users or tenants, in addition to occasional state
29and federal grants.

30(d) The report of the California Transportation Commission
31entitled “Improving Access to California’s Ports,” dated February
321990, found that eight hundred ninety-seven million dollars
33($897,000,000) is needed for port access transportation projects.
34By December 2014, the “California Freight Mobility Plan” report
35of the Department of Transportation identified a comprehensive
36list of freight projects in the state, including port access
37transportation projects, with an estimated total cost of one hundred
38thirty-eight billion dollars ($138,000,000,000).

39(e) In addition to port access transportation projects, there is a
40need for new harbor facilities and infrastructure investments that
P14   1will enhance California’s competitiveness for international cargoes,
2grow employment, yield significant economic development,
3increase state and local tax revenues, and reduce impacts to
4environmental quality from goods movement.

5(f) Because of limited revenues from port operations, shrinking
6federal and state funding and the increasing demand for those
7limited funds, ports and harbors are no longer able to finance
8projects of this magnitude without new funding mechanisms. One
9such mechanism that can be used to finance port and harbor
10development projects is the enhanced infrastructure financing
11district.

12(g) It is the intent of the Legislature to assist in the reduction of
13local borrowing costs, help accelerate the construction, repair, and
14maintenance of port capital improvements, and promote greater
15use of existing and new financial instruments and mechanisms.

16(h) It is further the intent of the Legislature to assert the state’s
17plenary power over the financing of port and harbor infrastructure
18by harbor agencies as matters of statewide concern and to authorize
19the use of tax increment financing, as provided in Chapter 2.99
20(commencing with Section 53398.50) of Part 1 of Division 2 of
21Title 5 of the Government Code, to support investment of tax
22revenues in port and harbor infrastructure.

23(i) The Legislature empowers local legislative bodies with
24specific and exclusive delegated authority to manage the state’s
25ports and harbors by legislative grant and by establishment of
26special districts pursuant to this code. In addition, the Legislature
27delegates to public financing authorities the power to establish
28seaport infrastructure financing districts for the purpose of
29leveraging investment in support of the statewide interest in
30improving port and harbor infrastructure.

31

SEC. 9.  

Section 1698 of the Harbors and Navigation Code is
32amended to read:

33

1698.  

(a) “Port or harbor infrastructure” means any of the
34following, if its primary or predominant use is of direct benefit to
35the port or harbor:

36(1) Streets, roads, highways, bridges, sidewalks, curbs, gutters,
37tunnels, subways, alleyways, viaducts, pipelines, rail lines, or other
38facilities for the transportation or movement of people, vehicles,
39equipment, or goods.

P15   1(2) Piers, docks, wharves, slips, quays, platforms, decks, cranes,
2or other facilities for the mooring, docking, loading, or unloading
3of vessels.

4(3) Lands, tidelands, submerged lands, easements, port access
5routes, channel improvements, rights-of-way, dredge disposal sites,
6 safety zones, breakwaters, levees, bulkheads, or walls of rock or
7other material to protect property or traffic.

8(4) Parking, warehouse, or storage facilities.

9(5) Parks, recreation, or open space facilities.

10(6) Remediation or any capital improvement that improves
11environmental quality.

12(7) Water, wastewater, drainage, electric, or telecommunication
13systems or facilities.

14(8) Buildings, structures, facilities, improvements, or equipment
15necessary or convenient to any of paragraphs (1) to (7), inclusive,
16or to the operation of a port or harbor.

17(9) Public improvements authorized pursuant to the
18Improvement Act of 1911 (Division 7 (commencing with Section
195000) of the Streets and Highways Code), the Improvement Bond
20Act of 1915 (Division 10 (commencing with Section 8500) of the
21Streets and Highways Code), and the Mello-Roos Community
22Facilities Act of 1982 (Chapter 2.5 (commencing with Section
2353311) of Part 1 of Division 2 of Title 5 of the Government Code).

24(b) Any port or harbor infrastructure may be privately operated.
25Except for any port or harbor infrastructure financed or subsidized
26with public trust revenues, any privately owned port or harbor
27infrastructure may be eligible in whole or in part for financing or
28other support or subsidy from money deposited in the infrastructure
29fund pursuant to subdivision (a) of Section 1701.

30(c) If a port or harbor infrastructure financed wholly or partly
31with public funds is privately owned and if the use for which the
32port or harbor infrastructure was originally constructed changes
33or is incompatible with the port authority’s master plan, the private
34owner shall pay the public agency the percentage of the full
35appreciated value of the port or harbor infrastructure that was
36originally financed with public funds.

37(d) Any port or harbor infrastructure may be located within,
38partly within and partly outside, or outside the boundaries of any
39harbor agency.

P16   1(e) Any port or harbor infrastructure that has been purchased,
2constructed, expanded, improved, or rehabilitated by the
3expenditure or use of public trust revenues shall be held as an asset
4of the trust in a share proportionate to the investment of public
5 trust revenues.

6

SEC. 10.  

Section 1699 is added to the Harbors and Navigation
7Code
, to read:

8

1699.  

“Seaport infrastructure financing district” means an
9enhanced infrastructure financing district that finances port or
10harbor infrastructure created in accordance with Chapter 3
11(commencing with Section 1710) of this part and Chapter 2.99
12(commencing with Section 53398.50) of Part 1 of Division 2 of
13Title 5 of the Government Code.

14

SEC. 11.  

Chapter 3 (commencing with Section 1710) is added
15to Part 1 of Division 6 of the Harbors and Navigation Code, to
16read:

17 

18Chapter  3. Seaport Infrastructure Financing Districts
19

 

20

1710.  

The Legislature finds and declares all of the following:

21(a) In addition to the findings and declarations in Section
2253398.50 of the Government Code, the ability to capture property
23tax increment revenues to finance needed seaport and harbor
24infrastructure projects will provide direct benefits to the state.
25When harbor agencies are better funded to further the objectives
26of the state, its seaports and harbors, and the public trust and
27enjoyment of those trust lands by the people of the state, local
28economies and the local environment will also be improved.

29(b) A seaport or harbor or its operation frequently generates
30large local tax benefits directly as a result of the possessory interest
31taxes paid on the value of leased port and harbor real property.

32(c) The tax increment increases in possessory interest taxes that
33will result from the improvement of seaport and harbor
34infrastructure should be captured, whenever possible, and
35reinvested to support the state’s significant interest in the successful
36operation of its seaports and harbors.

37(d) The unique nature of the state’s public seaports and harbors,
38including the nature of the statewide interest in their operations,
39requires special rules if these ports and harbors are to be allowed
40to participate in a seaport infrastructure financing district.

P17   1(e) The seaport infrastructure financing district is specifically
2developed to include publicly owned property, to improve that
3public property, and to achieve the public goals of improving the
4state’s waterborne commerce, enhancing economic prosperity, and
5financing the costs of environmental mitigation and improvement.

6(f) This chapter is intended to maintain and enforce the state’s
7retained rights, statewide interests, obligations and sovereign duties
8in its seaports, harbors, and tidelands, including protecting these
9same assets from local control or excise, while simultaneously
10creating an opportunity for public financing authorities to
11participate in facilitating investment in the state’s public seaport
12infrastructure and finance projects that will have the anticipated
13effect of not only providing statewide benefits, but also local
14benefits such as boosting local employment, local secondary
15economic development, local environmental improvement, and
16increased local tax revenues.

17

1711.  

As used in this chapter, “public financing authority” has
18the same meaning as provided in Section 53398.51 of the
19Government Code.

20

1712.  

When designated by the legislative body pursuant to
21Section 53398.62 of the Government Code, the harbor agency
22shall prepare a proposed infrastructure financing plan, as provided
23in Section 53398.63 of the Government Code, for a seaport
24infrastructure financing district covering a port or harbor
25infrastructure.

26

1713.  

(a) Upon receipt of a resolution from the public financing
27authority promulgated under subdivision (a) of Section 53398.80.5
28of the Government Code, the harbor agency shall have 60 days to
29consider the proposal. During this time, the harbor agency’s
30governing body shall act at a duly noticed meeting to either vote
31to give preliminary approval of the proposal, subject to the
32provisions of this section, or disapprove the proposal and return
33it to the public financing authority.

34(b) A harbor agency may give preliminary approval under this
35section only if it makes all of the following affirmative findings:

36(1) The harbor agency has prepared an infrastructure financing
37plan pursuant to Section 1712.

38(2) The improvements to the harbor agency’s property to be
39financed through the proceeds of a seaport infrastructure financing
40district are solely for the support of port or harbor infrastructure.

P18   1(3) All publicly owned property that is leased to private parties
2within the boundaries of the seaport infrastructure financing district
3has been reported by the harbor agency to the local county assessor
4to facilitate possessory interest taxation.

5(4) (A) If the harbor agency is acting on granted lands, all of
6the projects and uses proposed in the seaport infrastructure
7financing district are consistent with the state tidelands trust and
8the conditions of the harbor agency grant.

9(B) If the harbor agency was formed pursuant to this code, all
10of the projects and uses proposed in the seaport infrastructure
11financing district are consistent with its charter and the statewide
12interests in the operation of harbors and ports.

13(c) (1) The harbor agency shall not grant preliminary approval
14under this section unless both of the following apply:

15(A) The seaport infrastructure financing district will operate
16independently of any other prior or concurrent agreements between
17the harbor agency and the public financing authority, or the local
18governments that make up the public financing authority.

19(B) No transfers of funds or obligations, or future transfers of
20funds or obligations contingent on the approval of the seaport
21infrastructure financing district, its financing, or projects within
22the district, are created between the harbor agency and the public
23financing authority, or the local governments that make up the
24public financing authority.

25(2) For purposes of this subdivision, “transfers of funds or
26obligations” includes any direct or indirect transfer of harbor
27agency resources to the public financing authority, or the local
28governments that make up the public financing authority, except
29for any of the following if agreed to between the harbor agency
30and the public financing authority in writing:

31(A) Harbor agency reimbursements of a public financing
32authority for its direct administrative costs of establishing the
33seaport infrastructure financing district.

34(B) Public financing authority expenses for underwriting the
35bond issuance for the identified projects in the seaport
36infrastructure financing district.

37(C) Any other administrative expenses or direct operating
38expenses that are incurred as the direct result of creating the seaport
39infrastructure financing district that are identified by both parties
P19   1at the time of preliminary approval and in advance of the expense
2being incurred by the public financing authority.

3(d) If a harbor agency votes to give preliminary approval to the
4proposal, it shall immediately forward its preliminary approval to
5the State Lands Commission for its consideration.

6

1714.  

(a) Upon receipt of a preliminary approval from a harbor
7agency granted pursuant to Section 1713, the State Lands
8Commission shall consider the proposal and either grant or deny
9final approval.

10(b) Prior to granting final approval the State Lands Commission
11shall do both of the following:

12(1) Review the infrastructure financing plan prepared by the
13harbor agency pursuant to Section 1712.

14(2) Review the findings of the harbor agency made in its
15preliminary approval.

16(c) The State Lands Commission shall grant final approval only
17if it makes all of the following findings:

18(1) The state’s interests in its tidelands and its ports and harbors
19are furthered by the funding of the seaport infrastructure financing
20district.

21(2) The principal purposes of the seaport infrastructure financing
22district are to further port and harbor infrastructure.

23(3) The execution of the financing section of the infrastructure
24finance plan is more likely than not to result in the outcomes
25proposed.

26(4) No revenues shall be made available to local governments
27as a result of the approval of the seaport infrastructure financing
28district from state revenues, revenues derived from granted lands,
29or from ports or harbors created under this code, except as
30otherwise allowed under paragraph (2) of subdivision (c) of Section
311713.

32(5) The harbor agency and the public financing authority
33participating in the seaport infrastructure financing district have
34each completed all procedural requirements, financial due
35diligence, and made all findings required by this chapter and
36Chapter 2.99 (commencing with Section 53398.50) of Part 1 of
37Division 2 of Title 5 of the Government Code.

38(6) All of the projects and uses proposed in the seaport
39infrastructure financing district are consistent with the state
P20   1tidelands trust and the conditions of any grants, if applicable, and
2the statewide interests in the operation of harbors and ports.

3(7) No agreements by the harbor agency that may control the
4discretion of the harbor agency to maintain its port or harbor
5operations or to cede any such control to the discretion of a third
6party were made as a condition of participation in the seaport
7infrastructure financing district.

8(d) If the State Lands Commission gives final approval to the
9proposal, it shall immediately forward its approval to the public
10financing authority for further action pursuant to subdivision (c)
11of Section 53398.80.5 of the Government Code.

12(e) The State Lands Commission shall be reimbursed by the
13harbor agency for its direct administrative costs of considering a
14seaport infrastructure financing district proposal under this section
15from the proceeds of the bonds issued, if any, for the identified
16projects in the seaport infrastructure financing district.

17

1715.  

(a) Except as provided in subdivision (b), Chapter 2.99
18(commencing with Section 53398.50) of Part 1 of Division 2 of
19Title 5 of the Government Code shall apply to this chapter.

20(b) To the extent that any provision of this chapter conflicts
21with any provision of Chapter 2.99 (commencing with Section
2253398.50) of Part 1 of Division 2 of Title 5 of the Government
23Code with respect to a seaport infrastructure financing district, this
24chapter shall prevail.

25

1716.  

All permanent fixtures and capital improvements to the
26real property of a harbor agency that administers public trust
27tidelands made pursuant to a seaport infrastructure district’s
28approved infrastructure financing plan shall be a trust asset once
29completed. This provision does not apply to fixtures and
30improvements otherwise agreed as nonpermanent in a lease
31between the harbor agency and a private tenant.

32

1717.  

If a harbor agency administering granted public trust
33property is a department of a local governmental body, any
34negotiations between the two entities with respect to any
35infrastructure financing, operations, or any other activity requiring
36action by the harbor agency shall be undertaken at arm’s length
37in recognition of the duties of the harbor agency to effectuate
38statewide interests.

39

1718.  

(a) Pursuant to Section 6009 of the Public Resources
40Code, the State Lands Commission shall retain absolute discretion
P21   1over the determination of whether or not investment of local
2resources in port or harbor infrastructure, the actions of a harbor
3agency, or any other action taken by a seaport infrastructure
4financing district is consistent with the state’s interests in its
5tidelands and submerged lands. Nothing in this chapter, including
6a finding made pursuant to Section 1714, or Chapter 2.99
7(commencing with Section 53398.50) of Part 1 of Division 2 of
8Title 5 of the Government Code, shall preclude the State Lands
9Commission from enforcing the state’s interests in its tidelands.

10(b) Pursuant to Section 6009.1 of the Public Resources Code,
11 a harbor agency that manages granted state tidelands retains its
12status as a trustee whether or not it is located within a seaport
13infrastructure financing district. Nothing in this chapter, including
14a finding made pursuant to Section 1714, or Chapter 2.99
15(commencing with Section 53398.50) of Part 1 of Division 2 of
16Title 5 of the Government Code, shall preclude the harbor agency
17from conducting its duties as a trustee of state tidelands.

18(c) Nothing in this chapter or in Chapter 2.99 (commencing
19with Section 53398.50) of Part 1 of Division 2 of Title 5 of the
20Government Code grants any authority to any public financing
21authority, or the local governments that compose the public finance
22authority, in any manner whatsoever to manage, direct, control,
23or exercise jurisdiction over a harbor agency and its management
24of port or harbor infrastructure.

25

1719.  

This chapter shall not apply to the Stockton Port District,
26as established pursuant to Part 4 (commencing with Section 6200)
27of Division 8, or to a river port district established pursuant to Part
286 (commencing with Section 6800) of Division 8.

29begin insert

begin insertSEC. 12.end insert  

end insert
begin insert

(a) Section 2.5 of this bill incorporates amendments
30to Section 53398.52 of the Government Code proposed by both
31this bill and Assembly Bill 313. It shall only become operative if
32(1) both bills are enacted and become effective on or before
33January 1, 2016, (2) each bill amends Section 53398.52 of the
34Government Code, and (3) this bill is enacted after Assembly Bill
35313, in which case Section 2 of this bill shall not become operative.

end insert
begin insert

36(b) Section 3.5 of this bill incorporates amendments to Section
3753398.62 of the Government Code proposed by both this bill and
38Assembly Bill 313. It shall only become operative if (1) both bills
39are enacted and become effective on or before January 1, 2016,
40(2) each bill amends Section 53398.62 of the Government Code,
P22   1and (3) this bill is enacted after Assembly Bill 313, in which case
2Section 3 of this bill shall not become operative.

end insert
begin insert

3(c) Section 4.5 of this bill incorporates amendments to Section
453398.69 of the Government Code proposed by both this bill and
5Assembly Bill 313. It shall only become operative if (1) both bills
6are enacted and become effective on or before January 1, 2016,
7(2) each bill amends Section 53398.69 of the Government Code,
8and (3) this bill is enacted after Assembly Bill 313, in which case
9Section 4 of this bill shall not become operative.

end insert


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