BILL ANALYSIS
SB 1039
Page 1
Date of Hearing: June 30, 2010
ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
Cameron Smyth, Chair
SB 1039 (Ducheny) - As Amended: June 22, 2010
SENATE VOTE : 31-0
SUBJECT : Harbors and ports: San Diego Unified Port District.
SUMMARY : Requires the San Diego Unified Port District Board
(Board), as part of implementing its master plan, to include
funding for cooperative infrastructure and capital projects on
and off tidelands and submerged lands, consistent with the
public trust doctrine, that directly address maritime industrial
impacts by the port in cities that host maritime terminals.
Specifically, this bill :
1)States that in order to protect and enhance the economic
benefits of import and export activities for the San Diego
region and the state, it is necessary to provide incentives to
communities that experience the adverse environmental,
economic, quality of life, and other impacts that result from
hosting a working waterfront.
2)Defines "maritime industrial impacts" generally as a decrease
in recreation opportunities, the loss of municipal revenue
opportunities, increased noise and traffic, and negative
effects upon air quality.
3)Requires the Board, as part of implementing its master plan,
to include funding for cooperative infrastructure and capital
projects on and off tidelands and submerged lands, consistent
with the public trust doctrine, that directly address maritime
industrial impacts by the port in cities that host maritime
terminals.
4)Establishes the following criteria for cities to be eligible
to receive maritime industrial impacts funding from the Board
for cooperative infrastructure and capital projects:
a) The city must host at least one maritime terminal;
b) The city must have census tracts near maritime
terminals that exceed state standards for average annual
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particulate matter exposure and have been designated as an
environmental justice community, as determined by the San
Diego County Air Pollution Control District;
c) The city must have census tracts near maritime terminals
that are less than or equal to
80% of regional median income; and,
d) The city must have a planning area near the maritime
terminal, with residential zones that have restricted
public access to the tidelands and submerged lands and
waterfront that are within close proximity to the planning
area.
5)Requires the Board to make a good faith effort to fund, on an
annual basis, projects that address maritime industrial
impacts that are proposed by eligible cities.
6)Requires the Board to dedicate revenues, on an annual basis,
for those projects that meet the established criteria .
7)Provides that for purposes of this measure, there is a
presumption of good faith if a Board decision to approve a
project is made within 180 days from a request for funding.
8)Requires the State Lands Commission (Commission) to be the
final arbiter of any disputes with regard to eligibility and
approval of projects, consistent with the Commission's
authority over projects on and off tidelands and submerged
lands.
9)Requires the Commission, to the extent feasible, to rely on
both of the following:
a) Existing local, state, and federal agency studies; and,
b) Port studies conducted on port impacts.
10)States that the provisions of this measure may be subject to
reimbursement from the Commission on State Mandates.
EXISTING LAW :
1)Requires the Board to draft a master plan for harbor and port
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improvement and for the use
of all of the tidelands and submerged lands which shall be
conveyed to the Port pursuant to the provisions of its Act.
2)Requires a two-thirds vote of the Board to adopt or modify the
master plan.
3)Authorizes the San Diego Unified Port District (Port) to do
the following activities on non-trust lands if: 1) the
activities are adjacent to trust lands, 2) the Board finds
that adequate areas for these activities do not presently
exist within the trust lands, and 3) the activities are
necessary or incidental to carrying out Port purposes as
prescribed:
a) Acquire, purchase, develop, construct, maintain, repair,
operate, and regulate highways, streets, roadways, bridges,
railroads, trolleys, buses, and similar transportation
facilities, parking facilities, power, communication
facilities, water and gas pipelines, and all other
transportation and utility facilities or betterments
incidental, necessary, or convenient to the development and
operation of air terminal and rail facilities, and the
other purposes for which the Port was established.
FISCAL EFFECT : Unknown
COMMENTS :
1)The Port of San Diego was created by the state Legislature to
manage San Diego Bay and surrounding waterfront land on
December 18, 1962. According to the Port, it has operated
without tax dollars since 1970 and has been responsible for
$1.5 billion in public improvements on waterfront properties
of its five-member cities: Imperial Beach, National City,
Chula Vista, San Diego and Coronado.
a) The Port oversees two maritime cargo terminals, a cruise
ship terminal, 17 public parks, various wildlife reserves
and environmental initiatives, a Harbor Police department
and the leases of more than 600 tenant and sub-tenant
businesses around San Diego Bay.
b) The Port is governed by a seven-member Board of Port
Commissioners (Board); one commissioner each is appointed
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by the city councils of Chula Vista, Coronado, Imperial
Beach and National City, and three commissioners are
appointed by the San Diego City Council.
c) In June 1995, the Board approved a Memorandum of
Understanding for each of the Port's South Bay cities of
Coronado, Chula Vista, National City, and Imperial Beach
(collectively the "South Bay MOU"). The South Bay MOU
provides that the Port shall annually set aside as
restricted reserves $9.0 million for each of the seven
years beginning July 1, 1994, to be expended for certain
District projects, as shown in the Tidelands Capital
Development Program (the "CDP") adopted by the Board on
April 26, 1994. The total unawarded contract cost is
periodically adjusted for inflation using the Building Cost
Index (BCI). As of June 30, 2009, the District had set
aside, expended, or committed to expend a total amount of
$95.7 million under the MOU. This includes the initial set
aside of $63.3 million, BCI escalation of $13.3 million and
$19.1 million of additional funding from the CDP. As of
June 30, 2009, $9.7 million remains unexpended.
2)According to the Author's office, as the Port has developed,
the maritime activities have been concentrated in two of the
member cities, National City and San Diego, specifically the
community of Barrio Logan. The impacts resulting from the
concentration of these maritime activities include increased
traffic and infrastructure impacts to local streets and roads
associated with goods movement, negative air impacts from
industrial activities, and the loss of recreational and public
access to the bayfront. As a result, inequities between
cities and their infrastructure needs have developed at the
Port, and their planning process, to date, has been
insufficient to deal with these impacts. The author states
that SB 1039 looks to address these inequities by directing
the Port to consider cooperative infrastructure and capital
projects that address these maritime activities.
3)SB 1039 requires the Board, as part of implementing its master
plan, to include funding for cooperative infrastructure and
capital projects on and off tidelands and submerged lands,
consistent with the public trust doctrine, that directly
address maritime industrial impacts by the port in cities that
host maritime terminals. SB 1039 also establishes criteria
for cities to meet in order to be eligible to receive maritime
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industrial impacts funding from the Board for these
cooperative infrastructure and capital projects. The
Committee may wish to consider asking the author to clarify
that the maritime industrial impacts in this case are only
those caused by Port activities and not those that may be
caused by other maritime users, such as the Navy or Coast
Guard. Moreover, the Committee may wish to consider
specifying that the funding paid to the City of San Diego
under the provisions of this measure are only spent within the
neighborhood boundaries of Barrio Logan; since Barrio Logan is
the only community within the City of San Diego that would
meet the criteria threshold established under this measure.
4)Public Trust Doctrine : Lands under the ocean and under
navigable streams are owned by the public and held in trust
for the people by government. These are referred to as public
trust lands, and include filled lands formerly under water.
Public trust lands cannot be bought and sold like other
state-owned lands. Only in rare cases may the public trust be
terminated, and only where consistent with the purposes and
needs of the trust.
a) Uses of trust lands, whether granted to a local agency
or administered by the state directly, are generally
limited to those that are water dependent or related, and
include commerce, fisheries, and navigation, environmental
preservation and recreation. Public trust uses include,
among others, ports, marinas, docks and wharves, buoys,
hunting, commercial and sport fishing, bathing, swimming,
and boating. Public trust lands may also be kept in their
natural state for habitat, wildlife refuges, scientific
study, or open space. Ancillary or incidental uses, that
is, uses that directly promote trust uses, are directly
supportive and necessary for trust uses, or that
accommodate the public's enjoyment of trust lands, are also
permitted. Examples include facilities to serve visitors,
such as hotels and restaurants, shops, parking lots, and
restrooms. Other examples are commercial facilities that
must be located on or directly adjacent to the water, such
as warehouses, container cargo storage, and facilities for
the development and production
of oil and gas. Uses that are generally not permitted on
public trust lands are those that are not trust use
related, do not serve a public purpose, and can be located
on non-waterfront property, such as residential and
non-maritime related commercial and office uses.
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b) While trust lands cannot generally be alienated from
public ownership, uses of trust lands can be carried out by
public or private entities by lease from the State Lands
Commission or a local agency grantee. In some cases, such
as some industrial leases, the public may be excluded from
public trust lands in order to accomplish a proper trust
use. Because public trust lands are held in trust for all
citizens of California, they must be used to serve
statewide, as opposed to purely local, public purposes.
5)In the long-held 1955 Mallon v. City of Long Beach 44 Cal. 2d
199 case, the California Supreme Court found that the City of
Long Beach's interest in the tidelands was acquired not as a
"municipal affair," but subject to a public trust to develop
its harbor and navigation facilities for the benefit of the
entire state and was therefore subject to the control of the
legislature. The Court concluded that the expenditures by the
City of Long Beach for storm drains, a city incinerator, a
public library, public hospitals, public parks, a fire alarm
system, and many other items were purely "municipal affairs"
within the meaning of California Constitution Article XI, 6.
Moreover, they were normal expenditures for a municipal
corporation to make. Thus, the City of Long Beach was unable
to use public monies for general municipal purposes because
the monies were to be used to benefit the entire state and
would therefore violate the prohibition against using public
monies as a gift.
SB 1039 would specifically require the Port to provide
financial incentives to the Cities
of National City and San Diego to help address maritime
industrial impacts, including the loss of municipal revenue
opportunities. Given the decision in Mallon and many others
since, the Committee may wish to consider whether the
provisions of SB 1039 are in violation of the Public Trust
Doctrine and the gift of public funds provisions in the
California Constitution, which forbids the making of gifts of
public monies to municipal corporations [Article IV. 31].
6)Support Arguments : National City states that "SB 1039
provides a "no tax" solution, which offers a simple
clarification of the Port's authority. In order to protect
the communities surrounding the Port, the clarification will
permit the Port to include new capital projects in
off-tidelands areas to offset the impacts of maritime
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activities, which will be consistent with the San Diego Port
Act and the common law Public Trust Doctrine. In turn, the
communities will be able to assist maritime-related businesses
to prosper and create jobs."
The City of San Diego states that "the goals of SB 1039 are to
protect the 10th Avenue Marine Terminal by providing an
incentive to the City to support a maritime bayfront, and to
provide resources to the City to support and enhance the
Terminal and maritime uses; to maintain consistency with the
Port's strategic objectives to promote maritime industries to
stimulate regional economic vitality".
Opposition Arguments : Opposition, including the Harbor Tug &
Barge, argues that this measure weakens the Port's ability to
manage its own affairs and could cause significant unintended
consequences for members of the Working Waterfront Group,
including adjustment in lease rates and other costs of doing
business that threaten existing jobs. Beyond these direct
effects, funds would be pulled away from other job-creating
projects and priorities of the Port that benefit the entire
region.
In opposition, the Port states that SB 1039 would "have
long-term financial impacts on the Port's ability to fund
infrastructure projects along State tidelands, it would
compartmentalize the Port's funding streams which would make
it more difficult to address ongoing budget deficits, and the
measure would be in conflict with State law/State Constitution
as it relates to the use and purpose of revenues derived from
State tidelands."
REGISTERED SUPPORT / OPPOSITION :
Support
Cities of National City and San Diego
Opposition
CA Teamsters
Cities of Coronado and Imperial Beach
Fisherman's Landing Corporation
General Dynamics NASSCO
H& M Landing
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Harbor Tug & Barge
Hornblower Cruises & Events
Pacific Merchant Shipping Association
Port of San Diego Ship Repair Association
R.E. Staite Engineering, Inc.
San Diego Unified Port District (unless amended)
Individual letter (1)
Analysis Prepared by : Katie Kolitsos / L. GOV. / (916)
319-3958