BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 63|
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UNFINISHED BUSINESS
Bill No: SB 63
Author: Hall (D), et al
Amended: 9/1/15
Vote: 21
SENATE GOVERNANCE & FIN. COMMITTEE: 6-1, 4/15/15
AYES: Hertzberg, Nguyen, Beall, Hernandez, Lara, Pavley
NOES: Bates
SENATE APPROPRIATIONS COMMITTEE: 5-2, 5/28/15
AYES: Lara, Beall, Hill, Leyva, Mendoza
NOES: Bates, Nielsen
SENATE FLOOR: 36-2, 6/2/15
AYES: Allen, Anderson, Bates, Beall, Berryhill, Block,
Cannella, De León, Galgiani, Glazer, Hall, Hancock, Hernandez,
Hertzberg, Hill, Hueso, Huff, Jackson, Lara, Leno, Leyva, Liu,
McGuire, Mendoza, Mitchell, Monning, Moorlach, Morrell,
Nguyen, Pan, Pavley, Roth, Stone, Vidak, Wieckowski, Wolk
NOES: Gaines, Nielsen
NO VOTE RECORDED: Fuller, Runner
ASSEMBLY FLOOR: 76-2, 9/03/15 - See last page for vote
SUBJECT: Seaport infrastructure financing districts
SOURCE: Author
DIGEST: This bill authorizes cities and counties to establish
Seaport Infrastructure Financing Districts.
SB 63
Page 2
Assembly Amendments add double-jointing language to avoid
chaptering out conflicts in the event that both this bill and AB
313 (Atkins), which also amends Sections 53398.52, 53398.62, and
53398.69 of the Government Code, are enacted into law.
ANALYSIS:
Existing law:
1) Allows cities and counties to create infrastructure
financing districts (IFDs) and issue bonds to pay for
community scale public works: highways, transit, water
systems, sewer projects, flood control, child care
facilities, libraries, parks, and solid waste facilities. To
repay the bonds, IFDs can divert property tax increment
revenues, which are revenues generated from increases in
property values within the IFD above property values in the
base-year when the IFD was formed. However, IFDs can't divert
property tax increment revenues from schools (SB 308,
Seymour, Chapter 1575, Statutes of 1990).
2) Allows local officials to create Enhanced Infrastructure
Financing Districts (EIFDs), which augment the tax increment
financing powers that are available to local government under
the IFD statutes. City or county officials can create an
EIFD, which is governed by a public finance authority, to
finance public capital facilities or other specified projects
of communitywide significance that provide significant
benefits to the district or the surrounding community (SB
628, Beall, Chapter 785, Statutes of 2014).
This bill:
1) Allows city and county officials to establish Seaport
Infrastructure Financing District (SIFDs).
SB 63
Page 3
2) Defines a SIFD as an EIFD that finances port or harbor
infrastructure pursuant to specified statutes.
3) Declares that the statutes governing EIFDs also apply to
SIFDs, except that statutes enacted by the bill with respect
to SIFDs prevail if they conflict with any provision of the
EIFD statutes.
4) Adds "port or harbor infrastructure" to the existing
statutory list of public capital facilities that an EIFD can
finance.
5) Expands the statutory definition of "port or harbor
infrastructure" to include any capital improvement that
improves environmental quality, if the improvement's primary
or predominant use directly benefits a port or harbor.
6) Directs that a city or county must direct a harbor agency to
prepare an infrastructure financing plan for a SIFD.
7) Requires that if the public finance authority governing an
SIFD proposes to initiate proceedings to issue bonds for port
or harbor infrastructure, it must submit the proposal for
review and approval by the affected harbor agency and the
State Lands Commission (SLC), pursuant to a process that must
comply with specified requirements related to timelines,
public meetings, findings, and other prerequisites.
8) Requires a harbor agency to reimburse the SLC for its direct
administrative costs of considering a SIFD proposal.
9) Prohibits a SIFD's public finance authority from proceeding
with a bond issuance unless the SLC votes in favor of the
SB 63
Page 4
authority's proposal to issue bonds.
10)Expands the definition of "landowner," for the purpose of a
vote to approve bonds for an SIFD, to include an entity that
is paying possessory interest tax on state-owned land.
11)Allows a SIFD's public finance authority to issue bonds only
if two-thirds of the voters voting on the proposition vote in
favor of issuing the bonds.
12)Contains several provisions to ensure that SIFDs' financing
activities comply with the Public Trust Doctrine.
Specifically, this bill:
a) Declares that all permanent fixtures and capital
improvements to the real property of a harbor agency that
administers public trust tidelands made pursuant to a
SIFD's approved infrastructure financing plan must be a
trust asset once completed, with specified exceptions.
b) Requires that, if a harbor agency administering
granted public trust property is a department of a local
governmental body, any negotiations between the harbor
agency and the local government body with respect to any
infrastructure financing, operations, or any other
activity requiring action by the harbor agency must be
undertaken at arm's length in recognition of the duties of
the harbor agency to effectuate statewide interests.
c) Requires that the SLC must 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
SIFD is consistent with the state's interests in its
tidelands and submerged lands.
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d) Declares that its provisions do not preclude the SLC
from enforcing the state's interests in its tidelands.
e) Directs that a harbor agency that manages granted
state tidelands retains its status as a trustee whether or
not it is located within a SIFD and clarifies that its
provisions do not preclude the harbor agency from
conducting its duties as a trustee of state tidelands.
f) States that its provisions do not grant any authority
to any public financing authority, or the local
governments that compose the public finance authority, to
manage, direct, control, or exercise jurisdiction over a
harbor agency and its management of port or harbor
infrastructure.
13)Contains extensive findings and declarations relating to the
necessity and benefits of increased public investment in port
and harbor infrastructure projects.
14)Specifies that this bill's provisions do not apply to the
Stockton Port District or to a river port district
established pursuant to specified statutes.
Comments
Purpose of the bill. California's ports and harbors make major
contributions to the state's economy, creating jobs, investing
in businesses, and generating tax revenues. However, California
ports are losing market share to competitors outside of the
state partially because of subsidies that other jurisdictions
provide for port infrastructure improvements. This bill will
provide ports with access to vital public financing tools,
through the formation of SIFDs, which will augment their current
reliance on revenue bonds backed by fees or lease revenues.
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Using the financing tools enacted by last year's EIFD
legislation, this bill will facilitate investments in California
seaports that will save money, improve economic competitiveness,
and create jobs while also protecting the environment.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: No
According to the Assembly Appropriations Committee:
Ongoing intermittent costs, unknown, but potentially in the
range of $100,000 to $150,000 in any given year, to the State
Lands Commission (SLC). These costs would be fully reimbursed
by harbor agencies from the proceeds of bonds issued for SIFD
proposals. Staff notes that costs for review and approval of
SIFD bond issuance proposals would likely depend on the number
of proposals presented to SLC for review, and the scope and
complexity of the proposals. Submission of proposals is
likely to be intermittent, and many of activities required by
this bill are within SLC's purview and could be absorbable
within existing resources. Other activities would require
outside expertise or specialized training of SLC staff.
Negligible state costs related to the diversion of property
tax increment for SIFD purposes because the school share of
tax increment cannot be redirected to fund EIFD projects. As
such, there would be no backfill of property tax revenues from
the General Fund.
SUPPORT: (Verified9/3/15)
None received
OPPOSITION: (Verified9/3/15)
None received
SB 63
Page 7
ASSEMBLY FLOOR: 76-2, 9/03/15
AYES: Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom,
Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang,
Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle,
Daly, Dodd, Eggman, Frazier, Gallagher, Cristina Garcia,
Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray,
Hadley, Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer,
Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis,
Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte,
O'Donnell, Olsen, Perea, Quirk, Rendon, Ridley-Thomas,
Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond,
Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood, Atkins
NOES: Beth Gaines, Grove
NO VOTE RECORDED: Harper, Patterson
Prepared by:Brian Weinberger / GOV. & F. / (916) 651-4119
9/3/15 15:44:13
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