SB 63: Seaport infrastructure financing districts.
- Session Year: 2015-2016
- House: Senate
- Latest Version Date: 2015-10-11
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 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 states interest in tidelands and submerged lands. The bill would exclude from its provisions the Stockton Port District and river port districts.
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.
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 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 states interest in tidelands and submerged lands. The bill would exclude from its provisions the Stockton Port District and river port districts.
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.
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 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 states interest in tidelands and submerged lands. The bill would exclude from its provisions the Stockton Port District and river port districts.
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.
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 means the 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 enhanced infrastructure financing district, including approval by the harbor agency and the State Lands Commission before the proposal is submitted to the voters for approval. The bill would 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 states interest in tidelands and submerged lands. The bill would exclude from its provisions the Stockton Port District and river port 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 means the entity paying possessory interest tax on state-owned land. The bill would prescribe additional procedures and requirements for the establishment of a seaport enhanced infrastructure financing district, including approval by the harbor agency and the State Lands Commission before the proposal is submitted to the voters for approval. The bill would specify that the commission shall retain absolute discretion over the determination of whether or not investment of local resources in port or harbor infrastructure, the actions of a harbor agency, or any other action taken by a seaport infrastructure financing district is consistent with the states interest in tidelands and submerged lands.
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 means the entity paying possessory interest tax on state-owned land. The bill would prescribe additional procedures and requirements for the establishment of a seaport enhanced infrastructure financing district, including approval by the harbor agency and the State Lands Commission before the proposal is submitted to the voters for approval. The bill would specify that the commission shall retain absolute discretion over the determination of whether or not investment of local resources in port or harbor infrastructure, the actions of a harbor agency, or any other action taken by a seaport infrastructure financing district is consistent with the states interest in tidelands and submerged lands.
Existing law regulates the operation of ports and harbors. Existing law authorizes the organization and formation of port districts.
This bill would state the intent of the Legislature to enact legislation to increase and diversify economic development at the Port of Los Angeles.
Existing law regulates the operation of ports and harbors. Existing law authorizes the organization and formation of port districts.
This bill would state the intent of the Legislature to enact legislation to increase and diversify economic development at the Port of Los Angeles.
(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 states seaports and harbors that would generate significant new employment opportunities and economic development, increase state and local tax revenues, enhance seaport competitiveness in the international trade community, reduce congestion and delay in the supply chain, and result in improved environmental quality.
(2)Seaports 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 seaports 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 states seaports 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 states 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 seaport infrastructure, a failure to construct new public works needed to support new commercial and industrial development in our seaports and harbors, and increased congestion and environmental degradation.
(5)The seaports 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 seaports and harbors are matters of statewide significance. Remediating any condition that will otherwise result in underinvestment in the states seaports 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 states 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 states seaports and harbors, this special act is necessary.
(c)Due to the extraordinary capital needs of seaports and harbors, it is the intent of the Legislature to provide local governments that may benefit from additional investment in the seaports 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 organizations 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. 2.5.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 very low, low, and moderate income, as defined in Sections 50105 and 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 organizations 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 very low, 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 very low, low, or moderate incomes as defined in Sections 50105 and 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 either 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) or Chapter 6.10 (commencing with Section 25403) of Division 20 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 agency, except as provided in Section 1719 of the Harbors and Navigation Code, to prepare an infrastructure financing plan pursuant to Section 53398.63.
SEC. 3.5.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 send a copy of the resolution to the public financing authority. The public financing authority 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 agency, except as provided in Section 1719 of the Harbors and Navigation Code, 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 bodys adoption of the resolution. The infrastructure financing plan shall specify if the district shall be funded solely through the districts 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 districts boundaries about the infrastructure financing plan and planned activities to be funded by the district.
SEC. 4.5.Section 53398.69 of the Government Code is amended to read:53398.69.(a)At the conclusion of the hearing, the public financing authority 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 adopt a resolution abandoning the proceedings. If the proceedings are abandoned, then the public financing authority shall cease to exist by operation of this section with no further action required of the legislative body and the legislative body may not enact a resolution of intention to establish a district that includes the same geographic area within one year of the date of the resolution abandoning the proceedings.
(b)The infrastructure financing plan shall take effect upon the adoption of the resolution. The infrastructure financing plan shall specify if the district shall be funded solely through the districts 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)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 districts 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 assessors 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 districts 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 states 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, Californias 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 Californias 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 Californias 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 states 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 states 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 authoritys 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: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 seaport 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 seaports 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 seaport 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 seaport and harbor infrastructure should be captured, whenever possible, and reinvested to support the states significant interest in the successful operation of its seaports and harbors.
(d)The unique nature of the states 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 states waterborne commerce, enhancing economic prosperity, and financing the costs of environmental mitigation and improvement.
(f)This chapter is intended to maintain and enforce the states retained rights, statewide interests, obligations and sovereign duties in its seaports, 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 states 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 agencys 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 agencys 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 states 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.
(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.
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 districts 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 arms 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 states 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 states 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.
1719.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.
SEC. 12.(a)Section 2.5 of this bill incorporates amendments to Section 53398.52 of the Government Code proposed by both this bill and Assembly Bill 313. It shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2016, (2) each bill amends Section 53398.52 of the Government Code, and (3) this bill is enacted after Assembly Bill 313, in which case Section 2 of this bill shall not become operative.
(b)Section 3.5 of this bill incorporates amendments to Section 53398.62 of the Government Code proposed by both this bill and Assembly Bill 313. It shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2016, (2) each bill amends Section 53398.62 of the Government Code, and (3) this bill is enacted after Assembly Bill 313, in which case Section 3 of this bill shall not become operative.
(c)Section 4.5 of this bill incorporates amendments to Section 53398.69 of the Government Code proposed by both this bill and Assembly Bill 313. It shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2016, (2) each bill amends Section 53398.69 of the Government Code, and (3) this bill is enacted after Assembly Bill 313, in which case Section 4 of this bill shall not become operative.
(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 states seaports and harbors that would generate significant new employment opportunities and economic development, increase state and local tax revenues, enhance seaport competitiveness in the international trade community, reduce congestion and delay in the supply chain, and result in improved environmental quality.
(2)Seaports 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 seaports 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 states seaports 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 states 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 seaport infrastructure, a failure to construct new public works needed to support new commercial and industrial development in our seaports and harbors, and increased congestion and environmental degradation.
(5)The seaports 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 seaports and harbors are matters of statewide significance. Remediating any condition that will otherwise result in underinvestment in the states seaports 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 states 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 states seaports and harbors, this special act is necessary.
(c)Due to the extraordinary capital needs of seaports and harbors, it is the intent of the Legislature to provide local governments that may benefit from additional investment in the seaports 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 organizations 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. 2.5.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 very low, low, and moderate income, as defined in Sections 50105 and 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 organizations 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 very low, 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 very low, low, or moderate incomes as defined in Sections 50105 and 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 either 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) or Chapter 6.10 (commencing with Section 25403) of Division 20 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 agency, except as provided in Section 1719 of the Harbors and Navigation Code, to prepare an infrastructure financing plan pursuant to Section 53398.63.
SEC. 3.5.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 send a copy of the resolution to the public financing authority. The public financing authority 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 agency, except as provided in Section 1719 of the Harbors and Navigation Code, 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 bodys adoption of the resolution. The infrastructure financing plan shall specify if the district shall be funded solely through the districts 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 districts boundaries about the infrastructure financing plan and planned activities to be funded by the district.
SEC. 4.5.Section 53398.69 of the Government Code is amended to read:53398.69.(a)At the conclusion of the hearing, the public financing authority 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 adopt a resolution abandoning the proceedings. If the proceedings are abandoned, then the public financing authority shall cease to exist by operation of this section with no further action required of the legislative body and the legislative body may not enact a resolution of intention to establish a district that includes the same geographic area within one year of the date of the resolution abandoning the proceedings.
(b)The infrastructure financing plan shall take effect upon the adoption of the resolution. The infrastructure financing plan shall specify if the district shall be funded solely through the districts 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)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 districts 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 assessors 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 districts 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 states 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, Californias 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 Californias 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 Californias 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 states 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 states 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 authoritys 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: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 seaport 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 seaports 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 seaport 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 seaport and harbor infrastructure should be captured, whenever possible, and reinvested to support the states significant interest in the successful operation of its seaports and harbors.
(d)The unique nature of the states 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 states waterborne commerce, enhancing economic prosperity, and financing the costs of environmental mitigation and improvement.
(f)This chapter is intended to maintain and enforce the states retained rights, statewide interests, obligations and sovereign duties in its seaports, 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 states 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 agencys 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 agencys 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 states 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.
(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.
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 districts 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 arms 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 states 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 states 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.
1719.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.
SEC. 12.(a)Section 2.5 of this bill incorporates amendments to Section 53398.52 of the Government Code proposed by both this bill and Assembly Bill 313. It shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2016, (2) each bill amends Section 53398.52 of the Government Code, and (3) this bill is enacted after Assembly Bill 313, in which case Section 2 of this bill shall not become operative.
(b)Section 3.5 of this bill incorporates amendments to Section 53398.62 of the Government Code proposed by both this bill and Assembly Bill 313. It shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2016, (2) each bill amends Section 53398.62 of the Government Code, and (3) this bill is enacted after Assembly Bill 313, in which case Section 3 of this bill shall not become operative.
(c)Section 4.5 of this bill incorporates amendments to Section 53398.69 of the Government Code proposed by both this bill and Assembly Bill 313. It shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2016, (2) each bill amends Section 53398.69 of the Government Code, and (3) this bill is enacted after Assembly Bill 313, in which case Section 4 of this bill shall not become operative.
(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 states seaports and harbors that would generate significant new employment opportunities and economic development, increase state and local tax revenues, enhance seaport competitiveness in the international trade community, reduce congestion and delay in the supply chain, and result in improved environmental quality.
(2)Seaports 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 seaports 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 states seaports 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 states 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 seaport infrastructure, a failure to construct new public works needed to support new commercial and industrial development in our seaports and harbors, and increased congestion and environmental degradation.
(5)The seaports 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 seaports and harbors are matters of statewide significance. Remediating any condition that will otherwise result in underinvestment in the states seaports 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 states 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 states seaports and harbors, this special act is necessary.
(c)Due to the extraordinary capital needs of seaports and harbors, it is the intent of the Legislature to provide local governments that may benefit from additional investment in the seaports 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 organizations 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. 2.5.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 need are not required to be physically located within the boundaries of the district. However, any facilities financed outside of a district must 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 may 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 very low, low, and moderate income, as defined in Section Sections 50105 and 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 2 1 of Title 7, has accepted a metropolitan planning organizations 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- very low, 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 very low, low, or moderate incomes as defined in Section Sections 50105 and 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 either 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), Code) or Chapter 6.10 (commencing with Section 25403) of Division 20 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 agency, except as provided in Section 1719 of the Harbors and Navigation Code, to prepare an infrastructure financing plan pursuant to Section 53398.63.
SEC. 3.5.Section 53398.62 of the Government Code is amended to read:53398.62.After (a)Except as provided in subdivision (b), after adopting the resolution pursuant to Section 53398.59, the legislative body shall send a copy of the resolution to the public financing authority. The public financing authority 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 agency, except as provided in Section 1719 of the Harbors and Navigation Code, 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 bodys adoption of the resolution. The infrastructure financing plan shall specify if the district shall be funded solely through the districts 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 districts boundaries about the infrastructure financing plan and planned activities to be funded by the district.
SEC. 4.5.Section 53398.69 of the Government Code is amended to read:53398.69.(a)At the conclusion of the hearing, the legislative body public financing authority 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. adopt a resolution abandoning the proceedings. If the proceedings are abandoned, then the public financing authority shall cease to exist by operation of this section with no further action required of the legislative body and the legislative body may not enact a resolution of intention to establish a district that includes the same geographic area within one year of the date of the resolution abandoning the proceedings.
(b)The infrastructure financing plan and the formation of the enhanced infrastructure financing district shall take effect upon the legislative bodys adoption of the resolution. The infrastructure financing plan shall specify if the district shall be funded solely through the districts share of tax increment, governmental or private loans, grants, bonds, assessments, fees, or some combination thereof. However, the public financing authority may shall not issue bonds or levy assessments or fees that may be included in the infrastructure financing plan prior to before one or more of the following:
(1)An affirmative vote, pursuant to subdivision (a) of Section 53398.81, 53398.81 and, if applicable, subdivision (c) of Section 53398.80.5, to issue bonds to finance the infrastructure financing plan.
(2)Without compliance 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 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 districts 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 assessors 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 districts 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 states 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, Californias 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 Californias 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 Californias 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 states 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 states 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 authoritys 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: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 seaport 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 seaports 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 seaport 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 seaport and harbor infrastructure should be captured, whenever possible, and reinvested to support the states significant interest in the successful operation of its seaports and harbors.
(d)The unique nature of the states 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 states waterborne commerce, enhancing economic prosperity, and financing the costs of environmental mitigation and improvement.
(f)This chapter is intended to maintain and enforce the states retained rights, statewide interests, obligations and sovereign duties in its seaports, 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 states 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 agencys 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 agencys 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 states 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.
(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.
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 districts 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 arms 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 states 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 states 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.
1719.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.
SEC. 12.(a)Section 2.5 of this bill incorporates amendments to Section 53398.52 of the Government Code proposed by both this bill and Assembly Bill 313. It shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2016, (2) each bill amends Section 53398.52 of the Government Code, and (3) this bill is enacted after Assembly Bill 313, in which case Section 2 of this bill shall not become operative.
(b)Section 3.5 of this bill incorporates amendments to Section 53398.62 of the Government Code proposed by both this bill and Assembly Bill 313. It shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2016, (2) each bill amends Section 53398.62 of the Government Code, and (3) this bill is enacted after Assembly Bill 313, in which case Section 3 of this bill shall not become operative.
(c)Section 4.5 of this bill incorporates amendments to Section 53398.69 of the Government Code proposed by both this bill and Assembly Bill 313. It shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2016, (2) each bill amends Section 53398.69 of the Government Code, and (3) this bill is enacted after Assembly Bill 313, in which case Section 4 of this bill shall not become operative.
(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 states ports seaports and harbors that would generate significant new employment opportunities and economic development, increase state and local tax revenues, enhance port seaport competitiveness in the international trade community, reduce congestion and delay in the supply chain, and result in improved environmental quality.
(2)Ports Seaports 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 ports seaports 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 states ports seaports 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 states 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 port seaport infrastructure, a failure to construct new public works needed to support new commercial and industrial development in our ports seaports and harbors, and increased congestion and environmental degradation.
(5)The ports seaports 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 ports seaports and harbors are matters of statewide significance. Remediating any condition that will otherwise result in underinvestment in the states ports seaports 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 states 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 states ports seaports and harbors, this special act is necessary.
(c)Due to the extraordinary capital needs of ports seaports and harbors, it is the intent of the Legislature to provide local governments that may benefit from additional investment in the ports seaports 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 organizations 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 agency agency, except as provided in Section 1719 of the Harbors and Navigation Code, 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 bodys adoption of the resolution. The infrastructure financing plan shall specify if the district shall be funded solely through the districts 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 districts 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 assessors 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 districts 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 states 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, Californias 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 Californias 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 Californias 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 states 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 states 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 authoritys 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: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 port seaport 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 ports seaports 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 port seaport 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 port seaport and harbor infrastructure should be captured, whenever possible, and reinvested to support the states significant interest in the successful operation of its ports seaports and harbors.
(d)The unique nature of the states 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 states waterborne commerce, enhancing economic prosperity, and financing the costs of environmental mitigation and improvement.
(f)This chapter is intended to maintain and enforce the states retained rights, statewide interests, obligations and sovereign duties in its ports, seaports, 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 states 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 agencys 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 agencys 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 states 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.
(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.
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 districts 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 arms 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 states 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 states 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.
1719.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.
(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 states ports and harbors that would generate significant new employment opportunities and economic development, increase state and local tax revenues, enhance port competitiveness in the international trade community, reduce congestion and delay in the supply chain, and result in improved environmental quality.
(2)Ports 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 ports 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 states ports 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 states 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 port infrastructure, a failure to construct new public works needed to support new commercial and industrial development in our ports and harbors, and increased congestion and environmental degradation.
(5)The ports 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 ports and harbors are matters of statewide significance. Remediating any condition that will otherwise result in underinvestment in the states ports 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 states 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 states ports and harbors, this special act is necessary.
(c)Due to the extraordinary capital needs of ports and harbors, it is the intent of the Legislature to provide local governments that may benefit from additional investment in the ports 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 organizations 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 agency 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 bodys adoption of the resolution. The infrastructure financing plan shall specify if the district shall be funded solely through the districts 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 districts 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 assessors 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 districts 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 states 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, Californias 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 Californias Ports, dated February 1990, found that $897 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 Californias 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 states 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 by 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 states 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 authoritys 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: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 port 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 ports 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 port 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 port and harbor infrastructure should be captured, whenever possible, and reinvested to support the states significant interest in the successful operation of its ports and harbors.
(d)The unique nature of the states 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 states waterborne commerce, enhancing economic prosperity, and financing the costs of environmental mitigation and improvement.
(f)This chapter is intended to maintain and enforce the states retained rights, statewide interests, obligations and sovereign duties in its ports, 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 states 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 agencys 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 agencys 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 states 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.
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 districts 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 arms 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 states 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 states 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.
(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 states ports and harbors that would generate significant new employment opportunities and economic development, increase state and local tax revenues, enhance port competitiveness in the international trade community, reduce congestion and delay in the supply chain, and result in improved environmental quality.
(2)Ports 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 ports 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 states ports 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 states 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 port infrastructure, a failure to construct new public works needed to support new commercial and industrial development in our ports and harbors, and increased congestion and environmental degradation.
(5)The ports 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 ports and harbors are matters of statewide significance. Remediating any condition that will otherwise result in underinvestment in the states ports 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 states 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 states ports and harbors, this special act is necessary.
(c)Due to the extraordinary capital needs of ports and harbors, it is the intent of the Legislature to provide local governments that may benefit from additional investment in the ports 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 need not are not required to be physically located within the boundaries of the district. However, any facilities financed outside of a district must 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 may 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 2 1 of Title 7, has accepted a metropolitan planning organizations 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.After (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 agency 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 bodys adoption of the resolution. The infrastructure financing plan shall specify if the district shall be funded solely through the districts share of tax increment, governmental or private loans, grants, bonds, assessments, fees, or some combination thereof. However, the public financing authority may shall not issue bonds or levy assessments or fees that may be included in the infrastructure financing plan prior to before one or more of the following:
(1)An affirmative vote, pursuant to subdivision (a) of Section 53398.81, 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 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 districts 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 assessors 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 districts 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)The (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 her 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 states 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, Californias 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 Californias Ports, dated February 1990, found that $897 million 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 Californias competitiveness for international cargoes, grow employment, yield significant economic development, increase state and local tax revenues, and reduce impacts to restore facilities damaged in the Loma Prieta earthquake. 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 a new funding mechanism. 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 states 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 by 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 states 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. 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 authoritys 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: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 port 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 ports 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 port 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 port and harbor infrastructure should be captured, whenever possible, and reinvested to support the states significant interest in the successful operation of its ports and harbors.
(d)The unique nature of the states 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 states waterborne commerce, enhancing economic prosperity, and financing the costs of environmental mitigation and improvement.
(f)This chapter is intended to maintain and enforce the states retained rights, statewide interests, obligations and sovereign duties in its ports, 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 states 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 agencys 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 agencys 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 states 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.
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 districts 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 arms 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 states 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 states 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.
SECTION 1.It is the intent of the Legislature to enact legislation to increase and diversify economic development at the Port of Los Angeles.
It is the intent of the Legislature to enact legislation to increase and diversify economic development at the Port of Los Angeles.
|
Date
|
Status
|
|---|---|
| Jun 2, 2015 | Read third time. Passed. (Ayes 36. Noes 2.) Ordered to the Assembly. |
| Oct 11, 2015 | Chaptered by Secretary of State. Chapter 793, Statutes of 2015. |
| Oct 11, 2015 | Approved by the Governor. |
| Sep 11, 2015 | Enrolled and presented to the Governor at 5 p.m. |
| Sep 11, 2015 | (Corrected September 10). |
| Sep 8, 2015 | Assembly amendments concurred in. (Ayes 34. Noes 1.) Ordered to engrossing and enrolling. |
| Sep 8, 2015 | Assembly amendments concurred in. (Ayes 34. Noes 1. Page 2555.) Ordered to engrossing and enrolling. |
| Sep 3, 2015 | Read third time. Passed. (Ayes 63. Noes 2. Page 2843.) Ordered to the Senate. |
| Sep 3, 2015 | Read third time. Passed. Ordered to the Senate. |
| Sep 3, 2015 | In Senate. Concurrence in Assembly amendments pending. |
| Sep 1, 2015 | Read third time and amended. |
| Sep 1, 2015 | Ordered to third reading. |
| Aug 20, 2015 | Read second time. Ordered to third reading. |
| Aug 19, 2015 | From committee: Do pass. (Ayes 17. Noes 0.) (August 19). |
| Jul 16, 2015 | From committee: Do pass and re-refer to Com. on APPR. (Ayes 9. Noes 0.) (July 15). Re-referred to Com. on APPR. |
| Jun 15, 2015 | Referred to Com. on L. GOV. |
| Jan 5, 2015 | Introduced. Read first time. To Com. on RLS. for assignment. To print. |
| Jun 2, 2015 | Read third time. Passed. (Ayes 36. Noes 2. Page 1250.) Ordered to the Assembly. |
| Jun 2, 2015 | In Assembly. Read first time. Held at Desk. |
| Jun 1, 2015 | Read second time and amended. Ordered to third reading. |
| May 28, 2015 | From committee: Do pass as amended. (Ayes 5. Noes 2.) (May 28). |
| May 28, 2015 | From committee: Do pass as amended. (Ayes 5. Noes 2. Page 1147.) (May 28). |
| May 23, 2015 | Set for hearing May 28. |
| Apr 27, 2015 | April 27 hearing: Placed on APPR. suspense file. |
| Apr 17, 2015 | Set for hearing April 27. |
| Apr 15, 2015 | From committee: Do pass and re-refer to Com. on APPR. (Ayes 6. Noes 1. Page 618.) (April 15). Re-referred to Com. on APPR. |
| Apr 7, 2015 | From committee with author's amendments. Read second time and amended. Re-referred to Com. on GOV. & F. |
| Mar 27, 2015 | Set for hearing April 15. |
| Mar 25, 2015 | Re-referred to Com. on GOV. & F. |
| Mar 23, 2015 | From committee with author's amendments. Read second time and amended. Re-referred to Com. on RLS. |
| Jan 15, 2015 | Referred to Com. on RLS. |
| Jan 6, 2015 | From printer. May be acted upon on or after February 5. |
|
Date
|
Description
|
Location
|
Votes
|
|
|---|---|---|---|---|
| Sep 8, 2015 | Unfinished Business SB63 Hall Concurrence | Senate Floor |
Passed |
|
| Sep 3, 2015 | SB 63 Hall Senate Third Reading By O'DONNELL | Assembly Floor |
Passed |
|
| Aug 19, 2015 | Do pass. | Assembly Standing Committee on Appropriations |
Passed |
|
| Jul 15, 2015 | Do pass and be re-referred to the Committee on [Appropriations] | Assembly Standing Committee on Local Government |
Passed |
|
| Jun 2, 2015 | Senate 3rd Reading SB63 Hall | Senate Floor |
Passed |
|
| May 28, 2015 | Do pass as amended | Senate Standing Committee on Appropriations |
Passed |
|
| Apr 27, 2015 | Placed on suspense file | Senate Standing Committee on Appropriations |
Passed |
|
| Apr 15, 2015 | Do pass, but first be re-referred to the Committee on [Appropriations] | Senate Standing Committee on Governance and Finance |
Passed |
This list shows positions taken on this bill by organizations on the date displayed, which is linked to the original source.
Positions by individuals are not included.
|
Organization
|
Position
|
Date
|
|---|---|---|
| Associated General Contractors | ** Support | Sep 8, 2015 |
| Los Angeles, City Of | ** Support | Sep 8, 2015 |
| Pacific Merchant Shipping Association | ** Support | Sep 8, 2015 |
| Unified Port of San Diego | ** Support | Sep 8, 2015 |
SB 63
Page 6
|
Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 |
UNFINISHED BUSINESS
Bill No: SB 63
Amended: 9/1/15
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
DIGEST: This bill authorizes cities and counties to establish Seaport Infrastructure Financing Districts.
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.
Existing law:
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).
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:
Allows city and county officials to establish Seaport Infrastructure Financing District (SIFDs).
Defines a SIFD as an EIFD that finances port or harbor infrastructure pursuant to specified statutes.
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.
Adds “port or harbor infrastructure” to the existing statutory list of public capital facilities that an EIFD can finance.
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.
Directs that a city or county must direct a harbor agency to prepare an infrastructure financing plan for a SIFD.
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.
Requires a harbor agency to reimburse the SLC for its direct administrative costs of considering a SIFD proposal.
Prohibits a SIFD’s public finance authority from proceeding with a bond issuance unless the SLC votes in favor of the authority’s proposal to issue bonds.
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.
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.
Contains several provisions to ensure that SIFDs’ financing activities comply with the Public Trust Doctrine. Specifically, this bill:
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.
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.
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.
Declares that its provisions do not preclude the SLC from enforcing the state’s interests in its tidelands.
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.
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.
Contains extensive findings and declarations relating to the necessity and benefits of increased public investment in port and harbor infrastructure projects.
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. 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.: Yes Local: 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.
Associated General Contractors
City of Los Angeles
Pacific Merchant Shipping Association
Unified Port of San Diego
None received
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
9/4/15 8:26:20
SB 63
Page 5
|
Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 |
UNFINISHED BUSINESS
Bill No: SB 63
Amended: 9/1/15
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
DIGEST: This bill authorizes cities and counties to establish Seaport Infrastructure Financing Districts.
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.
Existing law:
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).
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:
Allows city and county officials to establish Seaport Infrastructure Financing District (SIFDs).
Defines a SIFD as an EIFD that finances port or harbor infrastructure pursuant to specified statutes.
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.
Adds “port or harbor infrastructure” to the existing statutory list of public capital facilities that an EIFD can finance.
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.
Directs that a city or county must direct a harbor agency to prepare an infrastructure financing plan for a SIFD.
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.
Requires a harbor agency to reimburse the SLC for its direct administrative costs of considering a SIFD proposal.
Prohibits a SIFD’s public finance authority from proceeding with a bond issuance unless the SLC votes in favor of the authority’s proposal to issue bonds.
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.
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.
Contains several provisions to ensure that SIFDs’ financing activities comply with the Public Trust Doctrine. Specifically, this bill:
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.
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.
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.
Declares that its provisions do not preclude the SLC from enforcing the state’s interests in its tidelands.
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.
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.
Contains extensive findings and declarations relating to the necessity and benefits of increased public investment in port and harbor infrastructure projects.
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. 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.: Yes Local: 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.
None received
None received
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
**** END ****
SB 63
Page 7
SENATE THIRD READING
SB 63
(Hall)
As Amended September 1, 2015
Majority vote
SENATE VOTE: 36-2
Committee |
Votes |
Ayes |
Noes |
Local Government |
9-0 |
Maienschein, Gonzalez, Alejo, Chiu, Cooley, Linder, Low, Mullin, Waldron |
|
Appropriations |
17-0 |
Gomez, Bigelow, Bloom, Bonta, Calderon, Chang, Daly, Eggman, Gallagher, Eduardo Garcia, Holden, Jones, Quirk, Rendon, Wagner, Weber, Wood |
|
SUMMARY: Allows cities and counties to create Seaport Infrastructure Financing Districts (SIFDs), and allows SIFDs to finance port or harbor infrastructure, under specified conditions. Specifically, this bill:
Defines an SIFD to mean an Enhanced Infrastructure Financing District (EIFD) that finances port or harbor infrastructure.
Amends EIFD law, as follows:
Allows an EIFD to finance port or harbor infrastructure (SIFD);
Specifies that in the case of an SIFD, the legislative body shall designate and direct the harbor agency, except as provided, to prepare the infrastructure financing plan required in EIFD law;
Specifies that State Lands Commission (SLC) approval is needed to issue bonds to finance the infrastructure financing plan for an SIFD;
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;
Requires, if the public financing authority (PFA) adopts a resolution proposing initiation of proceedings to issue bonds for port or harbor infrastructure, the PFA, before submitting the proposal to the voters, to submit the proposal, with specified information, to the affected harbor agency;
Requires the proposal to be considered by the SLC, if the harbor agency grants preliminary approval;
Requires, if the SLC votes in favor of the issuance of the bonds, the PFA to proceed with the submission of the proposal to the voters; and,
Requires a two-thirds vote of the voters voting on the proposition in favor of issuing the bonds, for an SIFD.
Expands the definition of "port or harbor infrastructure" in existing law contained in the Harbors and Navigation Code to include any capital improvement that improves environmental quality.
Adds, to the Harbors and Navigation Code, the following requirements for an SIFD:
Specifies, upon receipt of a resolution from the PFA, that the harbor agency shall have 60 days to consider the proposal. Requires, during this time, that the harbor agency's governing body to act at a duly noticed meeting to either vote to give preliminary approval of the proposal, or disapprove the proposal and return it to the PFA;
Allows a harbor agency to give preliminary approval only if it makes all of the following affirmative findings:
The harbor agency has prepared an infrastructure financing plan;
The improvements to the harbor agency's property to be financed through the proceeds of an SIFD are solely for the support of port or harbor infrastructure;
All publicly owned property that is leased to private parties within the boundaries of the SIFD has been reported by the harbor agency to the local county assessor to facilitate possessory interest taxation;
If the harbor agency is acting on granted lands, all of the projects and uses proposed in the SIFD are consistent with the state tidelands trust and the conditions of the harbor agency grant; and,
If the harbor agency was formed pursuant to this bill's provisions, all of the projects and uses proposed in the SIFD are consistent with its charter and the statewide interests in the operation of harbors and ports.
Prohibits the harbor agency from granting preliminary approval, unless both of the following apply:
The SIFD will operate independently of any other prior or concurrent agreements between the harbor agency and the PFA, or the local governments that make up the PFA; and,
No transfers of funds or obligations, or future transfers of funds or obligations contingent on the approval of the SIFD, its financing, or projects within the SIFD, are created between the harbor agency and the PFA, or the local governments that make up the PFA.
Defines "transfers of funds or obligations" to include any direct or indirect transfer of harbor agency resources to the PFA, or the local governments that make up the PFA, except for any of the following, if agreed to between the harbor agency and the PFA in writing:
Harbor agency reimbursements of a PFA for its direct administrative costs of establishing an SIFD;
PFA expenses for underwriting the bond issuance for the identified projects in the SIFD; and,
Any other administrative expenses or direct operating expenses that are incurred as the direct result of creating the SIFD that are identified by both parties at the time of preliminary approval and in advance of the expense being incurred by the PFA.
Requires, if the harbor agency votes to give preliminary approval to the proposal, the harbor agency to immediately forward its preliminary approval to the SLC for its consideration. Requires the SLC to consider the proposal and either grant or deny final approval.
Requires the SLC, prior to granting final approval, to do both of the following:
Review the infrastructure financing plan prepared by the harbor agency; and,
Review the findings of the harbor agency made in its preliminary approval.
Requires the SLC to make all of the following findings prior to granting final approval:
The state's interests in its tidelands and its ports and harbors are furthered by the funding of the SIFD;
The principal purposes of the SIFD are to further port and harbor infrastructure;
The execution of the financing section of the infrastructure finance plan is more likely than not to result in the outcomes proposed;
No revenues shall be made available to local governments as a result of the approval of the SIFD from state revenues, revenues derived from granted lands, or from ports or harbors created, as specified;
The harbor agency and the PFA participating in the SIFD have each completed all procedural requirements, financial due diligence, and made all findings required, as specified;
All of the projects and uses proposed in the SIFD are consistent with the state tidelands trusts and the conditions of any grants, if applicable, and the statewide interests in the operation of harbors and ports; and,
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 SIFD.
Requires the SLC to be reimbursed by the harbor agency for its direct administrative costs of considering an SIFD proposal from the proceeds of the bonds issued, if any, for the identified projects in the SIFD.
Provides that all permanent fixtures and capital improvements to the real property of a harbor agency that administers public trust tidelands made pursuant to an SIFD's approved infrastructure financing plan shall be a trust asset once completed, and specifies that this provision does not apply to fixtures and improvements otherwise agreed as nonpermanent in a lease between the harbor agency and a private tenant.
Requires, 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 to be undertaken at arm's length in recognition of the duties of the harbor agency to effectuate statewide interests.
States that the SLC 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 an SIFD is consistent with the state's interests in its tidelands and submerged lands.
States that a harbor agency that manages granted state tidelands retains its status as a trustee whether or not it is located within an SIFD.
States that nothing grants any authority to any PFA, or the local governments that compose the PFA, in any manner whatsoever to manage, direct, control, or exercise jurisdiction over a harbor agency and its management of port or harbor infrastructure.
Specifies that the provisions of the bill do not apply to the Stockton Port District or to a river port district.
Makes a number of findings and declarations, including the intent of the Legislature to assert the state's plenary power over the financing of port or harbor infrastructure by harbor agencies as matters of statewide concern and to authorize the use of tax increment financing, to support investment of tax revenues in port and harbor infrastructure.
Contains chaptering out amendments to address conflicts with AB 313 (Atkins) of the current legislative session.
EXISTING LAW:
Defines "port or harbor infrastructure" to mean any of the following, if its primary or predominant use is of direct benefit to the port or harbor:
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;
Piers, docks, wharves, slips, quays, platforms, decks, cranes, or other facilities for the mooring, docking, loading, or unloading of vessels;
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;
Parking, warehouse, or storage facilities;
Parks, recreation, or open space facilities;
Remediation;
Water, wastewater, drainage, electric, or telecommunication systems or facilities;
Buildings, structures, facilities, improvements, or equipment necessary or convenient to any of paragraphs (a) to (g), inclusive, or to the operation of a port or harbor; and,
Public improvements authorized, pursuant to the Improvement Act of 1911, the Improvement Bond Act of 1915, and the Mello-Roos Community Facilities Act of 1982.
Allows cities and counties to create 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 are not authorized to divert property tax increment revenues from schools.
Allows local officials to create 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.
FISCAL EFFECT: 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 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.
COMMENTS:
Background on IFDs and EIFDs. Existing law allows cities and counties to create 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 are not authorized to divert property tax increment revenues from schools (SB 308 (Seymour), Chapter 1575, Statutes of 1990).
Local officials can also create 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).
Bill Summary. This bill allows cities and counties to create SIFDs in order to finance port or harbor infrastructure. The bill requires the PFA to submit the proposal to the affected harbor agency for its preliminary approval and requires the harbor agency to make a number of findings, and once approved by the harbor agency, requires the proposal to be considered by the SLC. The SLC is required to review the infrastructure financing plan prepared by the harbor agency, and review the findings of the harbor agency made in its preliminary approval, and prior to the SLC granting final approval, the bill requires the SLC to make various findings, including that the state's interests in its tidelands and its ports and harbors are furthered by the funding of the SIFD, and that all of the projects and uses proposed in the SIFD are consistent with the state tidelands trust and conditions of any grants. Once the SLC gives its final approval, SLC will forward the approval to the PFA for further action.
The bill specifies that, for purposes of the vote necessary within the territory of the SIFD to approve the issuance of bonds, that an entity paying possessory interest tax on state-owned land, that the term "landowner" means that entity that is paying the possessory interest tax. SB 63 specifies that a two-thirds vote is necessary for an SIFD to issue bonds, and then makes a number of findings and declarations. This bill is sponsored by the Pacific Merchant Shipping Association.
Possessory Interest. According to the "Assessment of Taxable Possessory Interests" manual contained in the Assessors' Handbook, published by the Board of Equalization in December 2002 (and reprinted in January 2015), "The most common example of a possessory interest is the interest created by a lease. The tenant's (or lessee's) right to possession of the property is called the leasehold interest. The landlord's (or lessor's) right to receive rents during the term of the lease and to regain possession of the property when the lease terminates is called the leased fee interest. In the case of privately owned real property, both the tenant's and the landlord's interest are taxable, and typically both interests are valued and assessed in the aggregate to the landlord or the fee owner. It is not necessary, or administratively feasible, for the assessor to separately assess the value of the leasehold (i.e. possessory) interest and the value of the leased fee (i.e. nonpossessory interest); instead, the assessor typically makes a single assessment of the entire taxable interest in the real property."
"A 'taxable possessory interest' is a possessory interest that is separately taxable to the possessor. For introductory purposes, a taxable possessory interest can be defined as the taxable interest held by a private possessor in publicly owner real property. The public owner may be the United States of America and its administrative instrumentalities; the state of California; or one of California's local jurisdictions, which include counties, cities, and special districts. With a taxable possessory interest, since the underlying fee simple interest held by the public owner is almost always tax exempt, it is necessary to separately value the possessory interest held by the private possessor.
"The legal basis for the taxation of taxable possessory interests is found in the general mandate of the California Constitution, Article XIII, Section 1, that all property is taxable unless otherwise proved by the California Constitution or federal law. 'Property' as defined in sections 103 and 104 of the Revenue and Taxation Code, includes 'all matters and things, real, personal and mixed, capable of private ownership,' and 'real estate,' or 'real property,' includes 'the possession of, claim to, ownership of, or right to possession of land and improvements.' There is also statutory, regulatory, and judicial authority for the assessment, under specified conditions, of the private, beneficial right to the possession of publicly owned real property."
Port and harbor facilities operate pursuant to long-term leases on state lands that are exempt from property taxes. Private use of public property may be taxed if those uses constitute possessory interest, so harbor and port tenants pay a possessory interest tax in lieu of a property tax. This bill allows local agencies to finance port and harbor improvements by capturing possessory interest tax increment revenues that are generated as a result of the financed improvements.
Author's Statement. According to the author, "California's ports and harbors are major contributors to the state's economy, employing tens of thousands of workers, investing billions in local and state businesses and creating hundreds of millions in state and local tax revenues. Currently, our ports are losing market share to competitors outside of the state partially because other jurisdictions are subsidizing their infrastructure improvements.
"Most of California's ports operate under a landlord-tenant model where the public agency leases a marine terminal to a private company to conduct business. As a result, port infrastructure is generally financed entirely through revenue bonds backed by private user fees and other lease revenues and there is local taxpayer participation. Port tenants do however pay possessory interest taxes on the value of their leases on public property.
"Last year the state of California revamped its public financing tools to provide for EIFDs, in the wake of the elimination of redevelopment agencies. EIFDs can provide reinvestment financing to projects which span a wide range of public infrastructure and private development projects, including highways and transit infrastructure. EIFDs are formed by local governments and their bond underwriting approvals are subject to local voter approvals. SB 63 adds seaports to the list of EIFD-approved projects and allows for access to new and vital seaport infrastructure financing. This will enable California seaports to compete with competitors outside of the state, allowing them to continue to provide to California's economy."
Arguments in Support. Supporters argue that this bill will allow an important change to EIFDs that will allow ports to have access to new forms of financing to support critical infrastructure improvements.
Arguments in Opposition. None on file.
Analysis Prepared by: Debbie Michel / L. GOV. / (916) 319-3958 FN: 0001750
SB 63
Page 8
SENATE THIRD READING
SB 63
(Hall)
As Amended June 1, 2015
Majority vote
SENATE VOTE: 36-2
Committee |
Votes |
Ayes |
Noes |
Local Government |
9-0 |
Maienschein, Gonzalez, Alejo, Chiu, Cooley, Linder, Low, Mullin, Waldron |
|
Appropriations |
17-0 |
Gomez, Bigelow, Bloom, Bonta, Calderon, Chang, Daly, Eggman, Gallagher, Eduardo Garcia, Holden, Jones, Quirk, Rendon, Wagner, Weber, Wood |
|
SUMMARY: Allows cities and counties to create Seaport Infrastructure Financing Districts (SIFDs), and allows SIFDs to finance port or harbor infrastructure, under specified conditions. Specifically, this bill:
Defines an SIFD to mean an Enhanced Infrastructure Financing District (EIFD) that finances port or harbor infrastructure.
Amends EIFD law, as follows:
Allows an EIFD to finance port or harbor infrastructure (SIFD);
Specifies that in the case of an SIFD, the legislative body shall designate and direct the harbor agency, except as provided, to prepare the infrastructure financing plan required in EIFD law;
Specifies that State Lands Commission (SLC) approval is needed to issue bonds to finance the infrastructure financing plan for an SIFD;
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;
Requires, if the public financing authority (PFA) adopts a resolution proposing initiation of proceedings to issue bonds for port or harbor infrastructure, the PFA, before submitting the proposal to the voters, to submit the proposal, with specified information, to the affected harbor agency;
Requires the proposal to be considered by the SLC, if the harbor agency grants preliminary approval;
Requires, if the SLC votes in favor of the issuance of the bonds, the PFA to proceed with the submission of the proposal to the voters; and,
Requires a two-thirds vote of the voters voting on the proposition in favor of issuing the bonds, for an SIFD.
Expands the definition of "port or harbor infrastructure" in existing law contained in the Harbors and Navigation Code to include any capital improvement that improves environmental quality.
Adds, to the Harbors and Navigation Code, the following requirements for an SIFD:
Specifies, upon receipt of a resolution from the PFA, that the harbor agency shall have 60 days to consider the proposal. Requires, during this time, that the harbor agency's governing body to act at a duly noticed meeting to either vote to give preliminary approval of the proposal, or disapprove the proposal and return it to the PFA;
Allows a harbor agency to give preliminary approval only if it makes all of the following affirmative findings:
The harbor agency has prepared an infrastructure financing plan;
The improvements to the harbor agency's property to be financed through the proceeds of an SIFD are solely for the support of port or harbor infrastructure;
All publicly owned property that is leased to private parties within the boundaries of the SIFD has been reported by the harbor agency to the local county assessor to facilitate possessory interest taxation;
If the harbor agency is acting on granted lands, all of the projects and uses proposed in the SIFD are consistent with the state tidelands trust and the conditions of the harbor agency grant; and,
If the harbor agency was formed pursuant to this bill's provisions, all of the projects and uses proposed in the SIFD are consistent with its charter and the statewide interests in the operation of harbors and ports.
Prohibits the harbor agency from granting preliminary approval, unless both of the following apply:
The SIFD will operate independently of any other prior or concurrent agreements between the harbor agency and the PFA, or the local governments that make up the PFA; and,
No transfers of funds or obligations, or future transfers of funds or obligations contingent on the approval of the SIFD, its financing, or projects within the SIFD, are created between the harbor agency and the PFA, or the local governments that make up the PFA.
Defines "transfers of funds or obligations" to include any direct or indirect transfer of harbor agency resources to the PFA, or the local governments that make up the PFA, except for any of the following, if agreed to between the harbor agency and the PFA in writing:
Harbor agency reimbursements of a PFA for its direct administrative costs of establishing an SIFD;
PFA expenses for underwriting the bond issuance for the identified projects in the SIFD; and,
Any other administrative expenses or direct operating expenses that are incurred as the direct result of creating the SIFD that are identified by both parties at the time of preliminary approval and in advance of the expense being incurred by the PFA.
Requires, if the harbor agency votes to give preliminary approval to the proposal, the harbor agency to immediately forward its preliminary approval to the SLC for its consideration. Requires the SLC to consider the proposal and either grant or deny final approval.
Requires the SLC, prior to granting final approval, to do both of the following:
Review the infrastructure financing plan prepared by the harbor agency; and,
Review the findings of the harbor agency made in its preliminary approval.
Requires the SLC to make all of the following findings prior to granting final approval:
The state's interests in its tidelands and its ports and harbors are furthered by the funding of the SIFD;
The principal purposes of the SIFD are to further port and harbor infrastructure;
The execution of the financing section of the infrastructure finance plan is more likely than not to result in the outcomes proposed;
No revenues shall be made available to local governments as a result of the approval of the SIFD from state revenues, revenues derived from granted lands, or from ports or harbors created, as specified;
The harbor agency and the PFA participating in the SIFD have each completed all procedural requirements, financial due diligence, and made all findings required, as specified;
All of the projects and uses proposed in the SIFD are consistent with the state tidelands trusts and the conditions of any grants, if applicable, and the statewide interests in the operation of harbors and ports; and,
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 SIFD.
Requires the SLC to be reimbursed by the harbor agency for its direct administrative costs of considering an SIFD proposal from the proceeds of the bonds issued, if any, for the identified projects in the SIFD.
Provides that all permanent fixtures and capital improvements to the real property of a harbor agency that administers public trust tidelands made pursuant to an SIFD's approved infrastructure financing plan shall be a trust asset once completed, and specifies that this provision does not apply to fixtures and improvements otherwise agreed as nonpermanent in a lease between the harbor agency and a private tenant.
Requires, 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 to be undertaken at arm's length in recognition of the duties of the harbor agency to effectuate statewide interests.
States that the SLC 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 an SIFD is consistent with the state's interests in its tidelands and submerged lands.
States that a harbor agency that manages granted state tidelands retains its status as a trustee whether or not it is located within an SIFD.
States that nothing grants any authority to any PFA, or the local governments that compose the PFA, in any manner whatsoever to manage, direct, control, or exercise jurisdiction over a harbor agency and its management of port or harbor infrastructure.
Specifies that the provisions of the bill do not apply to the Stockton Port District or to a river port district.
Makes a number of findings and declarations, including the intent of the Legislature to assert the state's plenary power over the financing of port or harbor infrastructure by harbor agencies as matters of statewide concern and to authorize the use of tax increment financing, to support investment of tax revenues in port and harbor infrastructure.
EXISTING LAW:
Defines "port or harbor infrastructure" to mean any of the following, if its primary or predominant use is of direct benefit to the port or harbor:
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;
Piers, docks, wharves, slips, quays, platforms, decks, cranes, or other facilities for the mooring, docking, loading, or unloading of vessels;
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;
Parking, warehouse, or storage facilities;
Parks, recreation, or open space facilities;
Remediation;
Water, wastewater, drainage, electric, or telecommunication systems or facilities;
Buildings, structures, facilities, improvements, or equipment necessary or convenient to any of paragraphs (a) to (g), inclusive, or to the operation of a port or harbor; and,
Public improvements authorized, pursuant to the Improvement Act of 1911, the Improvement Bond Act of 1915, and the Mello-Roos Community Facilities Act of 1982.
Allows cities and counties to create 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 are not authorized to divert property tax increment revenues from schools.
Allows local officials to create 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.
FISCAL EFFECT: 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 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.
COMMENTS:
Background on IFDs and EIFDs. Existing law allows cities and counties to create 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 are not authorized to divert property tax increment revenues from schools (SB 308 (Seymour), Chapter 1575, Statutes of 1990).
Local officials can also create 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).
Bill Summary. This bill allows cities and counties to create SIFDs in order to finance port or harbor infrastructure. The bill requires the PFA to submit the proposal to the affected harbor agency for its preliminary approval and requires the harbor agency to make a number of findings, and once approved by the harbor agency, requires the proposal to be considered by the SLC. The SLC is required to review the infrastructure financing plan prepared by the harbor agency, and review the findings of the harbor agency made in its preliminary approval, and prior to the SLC granting final approval, the bill requires the SLC to make various findings, including that the state's interests in its tidelands and its ports and harbors are furthered by the funding of the SIFD, and that all of the projects and uses proposed in the SIFD are consistent with the state tidelands trust and conditions of any grants. Once the SLC gives its final approval, SLC will forward the approval to the PFA for further action.
The bill specifies that, for purposes of the vote necessary within the territory of the SIFD to approve the issuance of bonds, that an entity paying possessory interest tax on state-owned land, that the term "landowner" means that entity that is paying the possessory interest tax. SB 63 specifies that a two-thirds vote is necessary for an SIFD to issue bonds, and then makes a number of findings and declarations.
This bill is sponsored by the Pacific Merchant Shipping Association.
Possessory Interest. According to the "Assessment of Taxable Possessory Interests" manual contained in the Assessors' Handbook, published by the Board of Equalization in December 2002 (and reprinted in January 2015), "The most common example of a possessory interest is the interest created by a lease. The tenant's (or lessee's) right to possession of the property is called the leasehold interest. The landlord's (or lessor's) right to receive rents during the term of the lease and to regain possession of the property when the lease terminates is called the leased fee interest. In the case of privately owned real property, both the tenant's and the landlord's interest are taxable, and typically both interests are valued and assessed in the aggregate to the landlord or the fee owner. It is not necessary, or administratively feasible, for the assessor to separately assess the value of the leasehold (i.e. possessory) interest and the value of the leased fee (i.e. nonpossessory interest); instead, the assessor typically makes a single assessment of the entire taxable interest in the real property."
"A 'taxable possessory interest' is a possessory interest that is separately taxable to the possessor. For introductory purposes, a taxable possessory interest can be defined as the taxable interest held by a private possessor in publicly owner real property. The public owner may be the United States of America and its administrative instrumentalities; the state of California; or one of California's local jurisdictions, which include counties, cities, and special districts. With a taxable possessory interest, since the underlying fee simple interest held by the public owner is almost always tax exempt, it is necessary to separately value the possessory interest held by the private possessor.
"The legal basis for the taxation of taxable possessory interests is found in the general mandate of the California Constitution, Article XIII, Section 1, that all property is taxable unless otherwise proved by the California Constitution or federal law. 'Property' as defined in sections 103 and 104 of the Revenue and Taxation Code, includes 'all matters and things, real, personal and mixed, capable of private ownership,' and 'real estate,' or 'real property,' includes 'the possession of, claim to, ownership of, or right to possession of land and improvements.' There is also statutory, regulatory, and judicial authority for the assessment, under specified conditions, of the private, beneficial right to the possession of publicly owned real property."
Port and harbor facilities operate pursuant to long-term leases on state lands that are exempt from property taxes. Private use of public property may be taxed if those uses constitute possessory interest, so harbor and port tenants pay a possessory interest tax in lieu of a property tax. This bill allows local agencies to finance port and harbor improvements by capturing possessory interest tax increment revenues that are generated as a result of the financed improvements.
Author's Statement. According to the author, "California's ports and harbors are major contributors to the state's economy, employing tens of thousands of workers, investing billions in local and state businesses and creating hundreds of millions in state and local tax revenues. Currently, our ports are losing market share to competitors outside of the state partially because other jurisdictions are subsidizing their infrastructure improvements.
"Most of California's ports operate under a landlord-tenant model where the public agency leases a marine terminal to a private company to conduct business. As a result, port infrastructure is generally financed entirely through revenue bonds backed by private user fees and other lease revenues and there is local taxpayer participation. Port tenants do however pay possessory interest taxes on the value of their leases on public property.
"Last year the state of California revamped its public financing tools to provide for EIFDs, in the wake of the elimination of redevelopment agencies. EIFDs can provide reinvestment financing to projects which span a wide range of public infrastructure and private development projects, including highways and transit infrastructure. EIFDs are formed by local governments and their bond underwriting approvals are subject to local voter approvals. Unfortunately, seaports are not included in the listed categories of approved infrastructure for EIFD financing. SB 63 adds seaports to the list of EIFD-approved projects and allows for access to new and vital seaport infrastructure financing. This will enable California seaports to compete with competitors outside of the state, allowing them to continue to provide to California's economy."
Arguments in Support. Supporters argue that this bill will allow an important change to EIFDs that will allow ports to have access to new forms of financing to support critical infrastructure improvements.
Arguments in Opposition. None on file.
Conflicting Legislation. This bill conflicts with provisions in AB 313 (Atkins) of the current legislative session. Amendments may be needed to resolve the conflict.
Analysis Prepared by: Debbie Michel / L. GOV. / (916) 319-3958 FN: 0001397
Date of Hearing: August 19, 2015
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Jimmy Gomez, Chair
SB 63
(Hall) – As Amended June 1, 2015
Policy Committee: |
Local Government |
Vote: |
9 - 0 |
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Urgency: No State Mandated Local Program: No Reimbursable: No
SUMMARY: This bill would authorize cities and counties to establish Seaport Infrastructure Financing Districts (SIFDs) to finance seaport or harbor infrastructure projects. Specifically, this bill:
Defines an SIFD as an Enhanced Infrastructure Financing District (EIFD) that finances seaport or harbor infrastructure created in accordance with the EIFD law.
Adds seaport or harbor infrastructure to the list of projects that may be financed using EIFD law, and expands the definition of seaport or harbor infrastructure to include any capital improvement that improves environmental quality.
Requires the city or county that initiates the formation of an SIFD to designate and direct the harbor agency, rather than the city engineer, to prepare an infrastructure financing plan.
Requires and SIFD public finance authority to submit any proposals for issuing bonds for seaport or harbor infrastructure to the affected harbor agency and the State Lands Commission (SLC) for review and approval pursuant to a prescribed process.
Requires the harbor agency to reimburse the SLC, for its administrative costs of considering the proposal, from bond proceeds, if any.
Requires an SIFD public finance authority, upon receipt of final approval from the SLC, to submit the proposal for issuing bonds to the voters. The SIFD bonds may be issued if two-thirds of the voters approve the proposition.
Specifies that an entity paying possessory interest taxes on state-owned land is deemed a “landowner” for purposes of voting on an SIFD bond proposal, if there are fewer than 12 registered voters within the SIFD, as specified.
Ensures that an SIFD’s financing activities comply with the Public Trust Doctrine.
Specifies that this bill does not apply to the Stockton Port District or to a river port district.
FISCAL EFFECT:
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.
COMMENTS:
Purpose. According to the author, "California's ports and harbors are major contributors to the state's economy, employing tens of thousands of workers, investing billions in local and state businesses and creating hundreds of millions in state and local tax revenues. Currently, our ports are losing market share to competitors outside of the state partially because other jurisdictions are subsidizing their infrastructure improvements."
Last year the state of California revamped its public financing tools to provide for EIFDs, in the wake of the elimination of redevelopment agencies. EIFDs can provide reinvestment financing to projects which span a wide range of public infrastructure and private development projects, including highways and transit infrastructure. SB 63 adds seaports to the list of EIFD-approved projects.
Background. Existing law authorizes cities and counties to form Infrastructure Financing Districts (IFDs) and divert property tax increment revenues from participating local agencies to finance public capital facilities of communitywide significance. IFDs retain property tax increment revenues from participating local taxing agencies to directly finance projects or to pay debt service on bonds issued to finance projects. School district property tax revenues may not be diverted for IFD purposes, and each local agency in the IFD must agree to divert property tax increment to the IFD. Formation of a district and issuance of IFD bonds required approval by 2/3 of affected voters in an election.
Until 2011, the Community Redevelopment Law allowed local officials to set up redevelopment agencies (RDAs), prepare and adopt redevelopment plans, and use property tax increment revenues to finance redevelopment activities. After state law dissolved RDAs in 2011, local officials sought other ways to use tax increment financing to raise the capital they need to invest in public works projects. Last year, legislators enacted SB 628 (Beall, 2014) to allow local officials to create EIFDs, which augment the tax increment financing powers that are available to local government under the IFD statutes. SB 628 removed the voter-approval requirement that was required to form an IFD, authorized an EIFD public finance authority to issue bonds upon the approval of 55 percent of the voters, and expanded the types of projects that could be financed. EIFDs can finance public capital facilities or other specified projects of communitywide significance that provide significant benefits to the district or the surrounding community.
Existing law also authorizes the formation of Port Infrastructure and Financing Authorities, which allows two or more local agencies that operate ports or harbors (harbor agencies) to form a joint powers authority to finance specified port and harbor infrastructure projects. These authorities are intended to improve access to ports by allowing for the financing of roads and rail lines, piers, docks, channel improvements, breakwaters, warehouses and storage facilities, parks and recreation facilities, remediation, drainage, wastewater and electric facilities, and other projects. Port or harbor infrastructure projects may be privately operated, but all projects must have a primary or predominant use that is of direct benefit to the port or harbor.
Public Trust Doctrine. The Public Trust Doctrine is common law doctrine that protects the public's right to use California's waterways and waterfronts for commerce, navigation, fishing, boating, natural habitat protection, and other water-oriented activities. In general, the public trust doctrine provides that public trust lands (filled and unfilled tide and submerged lands and the beds of lakes, streams, and other navigable waterways) are to be held in trust by the state for the benefit of the people of California. The SLC administers public trust lands not granted to local agencies and oversees the activities of local grantees, such as harbor agencies.
California has 11 public ports and one private port, and the SLC administers the activities of seven harbor district grantees. Port and harbor facilities operate pursuant to long-term leases on state lands that are exempt from property taxes. Private use of public property may be taxed if those uses constitute a possessory interest, so harbor and port tenants pay a possessory interest tax in lieu of a property tax.
Prior Legislation:
SB 628 (Beall), Chapter 785, Statutes of 2014, authorizes the formation of EIFDs governed by a public finance authority to finance public capital facilities or other specified projects of communitywide significance using property tax increment revenues from local agencies that volunteer to participate in the district.
Analysis Prepared by: Jennifer Swenson / APPR. / (916) 319-2081
SB 63
Page 8
Date of Hearing: July 15, 2015
ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
Brian Maienschein, Chair
SB 63
(Hall) – As Amended June 1, 2015
SENATE VOTE: 36-2
SUBJECT: Seaport infrastructure financing districts.
SUMMARY: Allows cities and counties to create Seaport Infrastructure Financing Districts (SIFDs), and allows SIFDs to finance port or harbor infrastructure, under specified conditions. Specifically, this bill:
Defines a "Seaport Infrastructure Financing District" (SIFD) to mean an Enhanced Infrastructure Financing District (EIFD) that finances port or harbor infrastructure.
Amends EIFD law, as follows:
Allows an EIFD to finance port or harbor infrastructure (SIFD);
Specifies that in the case of an SIFD, the legislative body shall designate and direct the harbor agency, except as provided, to prepare the infrastructure financing plan required in EIFD law;
Specifies that State Lands Commission (SLC) approval is needed to issue bonds to finance the infrastructure financing plan for an SIFD;
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;
Requires, if the public financing authority (PFA) adopts a resolution proposing initiation of proceedings to issue bonds for port or harbor infrastructure, the PFA, before submitting the proposal to the voters, to submit the proposal, with specified information, to the affected harbor agency;
Requires the proposal to be considered by the SLC, if the harbor agency grants preliminary approval;
Requires, if the SLC votes in favor of the issuance of the bonds, the PFA to proceed with the submission of the proposal to the voters; and,
Requires a two-thirds vote of the voters voting on the proposition in favor of issuing the bonds, for an SIFD.
Expands the definition of "port or harbor infrastructure" in existing law contained in the Harbors and Navigation Code to include any capital improvement that improves environmental quality.
Adds, to the Harbors and Navigation Code, the following requirements for an SIFD:
Specifies, upon receipt of a resolution from the PFA, that the harbor agency shall have
60 days to consider the proposal. Requires, during this time, that the harbor agency's governing body to act at a duly noticed meeting to either vote to give preliminary approval of the proposal, or disapprove the proposal and return it to the PFA;Allows a harbor agency to give preliminary approval only if it makes all of the following affirmative findings:
The harbor agency has prepared an infrastructure financing plan;
The improvements to the harbor agency's property to be financed through the proceeds of an SIFD are solely for the support of port or harbor infrastructure;
All publicly owned property that is leased to private parties within the boundaries
of the SIFD has been reported by the harbor agency to the local county assessor to facilitate possessory interest taxation;If the harbor agency is acting on granted lands, all of the projects and uses proposed in the SIFD are consistent with the state tidelands trust and the conditions of the harbor agency grant; and,
If the harbor agency was formed pursuant to the bill's provisions, all of the projects and uses proposed in the SIFD are consistent with its charter and the statewide interests in the operation of harbors and ports.
Prohibits the harbor agency from granting preliminary approval, unless both of the following apply:
The SIFD will operate independently of any other prior or concurrent agreements between the harbor agency and the PFA, or the local governments that make up the PFA; and,
No transfers of funds or obligations, or future transfers of funds or obligations contingent on the approval of the SIFD, its financing, or projects within the SIFD, are created between the harbor agency and the PFA, or the local governments that make up the PFA.
Defines "transfers of funds or obligations" to include any direct or indirect transfer
of harbor agency resources to the PFA, or the local governments that make up the PFA, except for any of the following, if agreed to between the harbor agency and the PFA in writing:Harbor agency reimbursements of a PFA for its direct administrative costs of establishing an SIFD;
PFA expenses for underwriting the bond issuance for the identified projects in the SIFD; and,
Any other administrative expenses or direct operating expenses that are incurred as the direct result of creating the SIFD that are identified by both parties at the time of preliminary approval and in advance of the expense being incurred by the PFA.
Requires, if the harbor agency votes to give preliminary approval to the proposal, the harbor agency to immediately forward its preliminary approval to the SLC for its consideration. Requires the SLC to consider the proposal and either grant or deny final approval.
Requires the SLC, prior to granting final approval, to do both of the following:
Review the infrastructure financing plan prepared by the harbor agency; and,
Review the findings of the harbor agency made in its preliminary approval.
Requires the SLC to make all of the following findings prior to granting final approval:
The state's interests in its tidelands and its ports and harbors are furthered by the funding of the SIFD;
The principal purposes of the SIFD are to further port and harbor infrastructure;
The execution of the financing section of the infrastructure finance plan is more likely than not to result in the outcomes proposed;
No revenues shall be made available to local governments as a result of the approval of the SIFD from state revenues, revenues derived from granted lands, or from ports or harbors created, as specified;
The harbor agency and the PFA participating in the SIFD have each completed all procedural requirements, financial due diligence, and made all findings required, as specified;
All of the projects and uses proposed in the SIFD are consistent with the state tidelands trusts and the conditions of any grants, if applicable, and the statewide interests in the operation of harbors and ports; and,
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 SIFD.
Requires the SLC to be reimbursed by the harbor agency for its direct administrative costs of considering an SIFD proposal from the proceeds of the bonds issued, if any, for the identified projects in the SIFD.
Provides that all permanent fixtures and capital improvements to the real property of a harbor agency that administers public trust tidelands made pursuant to an SIFD's approved infrastructure financing plan shall be a trust asset once completed, and specifies that this provision does not apply to fixtures and improvements otherwise agreed as nonpermanent in a lease between the harbor agency and a private tenant.
Requires, 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 to be undertaken at arm's length in recognition of the duties of the harbor agency to effectuate statewide interests.
States that the SLC 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 an SIFD is consistent with the state's interests in its tidelands and submerged lands.
States that a harbor agency that manages granted state tidelands retains its status as a trustee whether or not it is located within an SIFD.
States that nothing grants any authority to any PFA, or the local governments that compose the PFA, in any manner whatsoever to manage, direct, control, or exercise jurisdiction over a harbor agency and its management of port or harbor infrastructure.
Specifies that the provisions of the bill do not apply to the Stockton Port District or to a river port district.
Makes a number of findings and declarations, including the intent of the Legislature to assert the state's plenary power over the financing of port or harbor infrastructure by harbor agencies as matters of statewide concern and to authorize the use of tax increment financing, to support investment of tax revenues in port and harbor infrastructure.
EXISTING LAW:
Defines "port or harbor infrastructure" to mean any of the following, if its primary or predominant use is of direct benefit to the port or harbor:
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;
Piers, docks, wharves, slips, quays, platforms, decks, cranes, or other facilities for the mooring, docking, loading, or unloading of vessels;
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;
Parking, warehouse, or storage facilities;
Parks, recreation, or open space facilities;
Remediation;
Water, wastewater, drainage, electric, or telecommunication systems or facilities;
Buildings, structures, facilities, improvements, or equipment necessary or convenient to any of paragraphs (a) to (g), inclusive, or to the operation of a port or harbor; and,
Public improvements authorized, pursuant to the Improvement Act of 1911, the Improvement Bond Act of 1915, and the Mello-Roos Community Facilities Act of 1982.
Allows cities and counties to create 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 are not authorized to divert property tax increment revenues from schools.
Allows local officials to create 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.
FISCAL EFFECT: According to the Senate Appropriations Committee, this bill contains:
Unknown administrative costs to the SLC. Costs for review and approval of SIFD bond issuance proposals could be absorbable but potentially up to $150,000 in a given year depending on the number and complexity of the proposals submitted for consideration. These costs would be fully reimbursed by harbor agencies from the proceeds of bonds issued for SIFD proposals.
There would be no 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 enhanced infrastructure financing district projects. As such, there would be no backfill of property tax revenues from the General Fund.
COMMENTS:
Background on IFDs and EIFDs. Existing law allows cities and counties to create 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 are not authorized to divert property tax increment revenues from schools [SB 308 (Seymour), Chapter 1575, Statutes of 1990].
Local officials can also create 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].
Bill Summary. This bill allows cities and counties to create SIFDs in order to finance port or harbor infrastructure. The bill requires the PFA to submit the proposal to the affected harbor agency for its preliminary approval and requires the harbor agency to make a number of findings, and once approved by the harbor agency, requires the proposal to be considered by the SLC. The SLC is required to review the infrastructure financing plan prepared by the harbor agency, and review the findings of the harbor agency made in its preliminary approval, and prior to the SLC granting final approval, the bill requires the SLC to make various findings, including that the state's interests in its tidelands and its ports and harbors are furthered by the funding of the SIFD, and that all of the projects and uses proposed in the SIFD are consistent with the state tidelands trust and conditions of any grants. Once the SLC gives its final approval, SLC will forward the approval to the PFA for further action.
The bill specifies that, for purposes of the vote necessary within the territory of the SIFD to approve the issuance of bonds, that an entity paying possessory interest tax on state-owned land, that the term "landowner" means that entity that is paying the possessory interest tax. SB 63 specifies that a two-thirds vote is necessary for an SIFD to issue bonds, and then makes a number of findings and declarations.
This bill is sponsored by the Pacific Merchant Shipping Association.
Possessory Interest. According to the "Assessment of Taxable Possessory Interests" manual contained in the Assessors' Handbook, published by the Board of Equalization in December 2002 (and reprinted in January 2015), "The most common example of a possessory interest is the interest created by a lease. The tenant's (or lessee's) right to possession of the property is called the leasehold interest. The landlord's (or lessor's) right to receive rents during the term of the lease and to regain possession of the property when the lease terminates is called the leased fee interest. In the case of privately owned real property, both the tenant's and the landlord's interest are taxable, and typically both interests are valued and assessed in the aggregate to the landlord or the fee owner. It is not necessary, or administratively feasible, for the assessor to separately assess the value of the leasehold (i.e. possessory) interest and the value of the leased fee (i.e. nonpossessory interest); instead, the assessor typically makes a single assessment of the entire taxable interest in the real property."
"A 'taxable possessory interest' is a possessory interest that is separately taxable to the possessor. For introductory purposes, a taxable possessory interest can be defined as the taxable interest held by a private possessor in publicly owner real property. The public owner may be the United States of America and its administrative instrumentalities; the state of California; or one of California's local jurisdictions, which include counties, cities, and special districts. With a taxable possessory interest, since the underlying fee simple interest held by the public owner is almost always tax exempt, it is necessary to separately value the possessory interest held by the private possessor.
"The legal basis for the taxation of taxable possessory interests is found in the general mandate of the California Constitution, article XIII, section 1, that all property is taxable unless otherwise proved by the California Constitution or federal law. 'Property' as defined in sections 103 and 104 of the Revenue and Taxation Code, includes 'all matters and things, real, personal and mixed, capable of private ownership,' and 'real estate,' or 'real property,' includes 'the possession of, claim to, ownership of, or right to possession of land and improvements.' There is also statutory, regulatory, and judicial authority for the assessment, under specified conditions, of the private, beneficial right to the possession of publicly owned real property."
Port and harbor facilities operate pursuant to long-term
leases on state lands that are exempt from property taxes. Private
use of public property may be taxed if those uses constitute
possessory interest, so harbor and port tenants pay a possessory
interest tax in lieu of a property tax. This bill allows local
agencies to finance port and harbor improvements by capturing
possessory interest tax increment revenues that are generated as a
result of the financed improvements.
Author's Statement. According to the author, "California's ports and harbors are major contributors to the state's economy, employing tens of thousands of workers, investing billions in local and state businesses and creating hundreds of millions in state and local tax revenues. Currently, our ports are losing market share to competitors outside of the state partially because other jurisdictions are subsidizing their infrastructure improvements.
"Most of California's ports operate under a landlord-tenant model where the public agency leases a marine terminal to a private company to conduct business. As a result, port infrastructure is generally financed entirely through revenue bonds backed by private user fees and other lease revenues and there is local taxpayer participation. Port tenants do however pay possessory interest taxes on the value of their leases on public property.
"Last year the state of California revamped its public financing tools to provide for EIFDs, in the wake of the elimination of redevelopment agencies. EIFDs can provide reinvestment financing to projects which span a wide range of public infrastructure and private development projects, including highways and transit infrastructure. EIFDs are formed by local governments and their bond underwriting approvals are subject to local voter approvals. Unfortunately, seaports are not included in the listed categories of approved infrastructure for EIFD financing. SB 63 adds seaports to the list of EIFD-approved projects and allows for access to new and vital seaport infrastructure financing. This will enable California seaports to compete with competitors outside of the state, allowing them to continue to provide to California's economy."
Arguments in Support. Supporters argue that this bill will allow an important change to EIFDs that will allow ports to have access to new forms of financing to support critical infrastructure improvements.
Arguments in Opposition. None on file.
Conflicting Legislation. This bill conflicts with provisions in AB 313 (Atkins). Amendments may be needed to resolve the conflict.
REGISTERED SUPPORT / OPPOSITION:
Support
Pacific Merchant Shipping Association [SPONSOR]
Associated General Contractors
City of Los Angeles
Unified Port of San Diego
Opposition
None on file
Analysis Prepared by: Debbie Michel / L. GOV. / (916) 319-3958
SB 63
Page 5
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Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 |
THIRD READING
Bill No: SB 63
Amended: 6/1/15
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
SUBJECT: Seaport infrastructure financing districts
DIGEST: This bill authorizes cities and counties to establish Seaport Infrastructure Financing Districts.
Existing law:
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).
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:
Allows city and county officials to establish Seaport Infrastructure Financing District (SIFDs).
Defines a SIFD as an EIFD that finances port or harbor infrastructure pursuant to specified statutes.
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.
Adds “port or harbor infrastructure” to the existing statutory list of public capital facilities that an EIFD can finance.
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.
Directs that a city or county must direct a harbor agency to prepare an infrastructure financing plan for a SIFD.
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 the following process:
A harbor agency, after receiving a public financing authority’s resolution proposing to issue bonds for a SIFD, must consider the proposal within 60 days. During that time, the harbor agency’s governing body must act at public meeting to either vote to give preliminary approval of the proposal, or disapprove the proposal and return it to the public financing authority. A harbor agency may give preliminary approval only if it makes four specified findings. The agency is prohibited from granting preliminary approval unless:
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.
No transfers of funds or obligations, as defined, or future transfers of funds or obligations contingent on the approval of the SIFD, 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.
If a harbor agency votes to give preliminary approval to a proposal to issue bonds, it must immediately forward its preliminary approval to the SLC for its consideration.
The SLC, after receiving a harbor agency’s preliminary approval of a proposal to issue bonds for a SIFD, must consider the proposal and either grant or deny final approval. Before granting final approval, the SLC must review the infrastructure financing plan prepared by the harbor agency and the findings that the harbor agency made in its preliminary approval. The SLC cannot grant final approval unless it makes seven specified findings.
If the SLC grants final approval, it must immediately forward its approval to the public financing authority for further action.
Requires a harbor agency to reimburse the SLC for its direct administrative costs of considering a SIFD proposal.
Prohibits a SIFD’s public finance authority from proceeding with a bond issuance unless the SLC votes in favor of the authority’s proposal to issue bonds.
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.
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.
Contains several provisions to ensure that SIFDs’ financing activities comply with the Public Trust Doctrine. Specifically, this bill:
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.
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.
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.
Declares that its provisions do not preclude the SLC from enforcing the state’s interests in its tidelands.
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.
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.
Contains extensive findings and declarations relating to the necessity and benefits of increased public investment in port and harbor infrastructure projects.
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. 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.: Yes Local: No
According to the Senate Appropriations Committee, this bill would result in unknown administrative costs to the SLC. Costs for review and approval of SIFD bond issuance proposals could be absorbable but potentially up to $150,000 in a given year depending on the number and complexity of the proposals submitted for consideration. These costs would be fully reimbursed by harbor agencies from the proceeds of bonds issued for SIFD proposals.
Pacific Merchant Shipping Association
Port of San Diego
OPPOSITION: (Verified 5/29/15)
None received
Prepared by: Brian Weinberger / GOV. & F. / (916) 651-4119
6/1/15 15:51:17
**** END ****
SB 63 (Hall) Page 4 of 4
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
SB 63 (Hall) - Seaport infrastructure financing districts
|
|
Version: April 7, 2015 |
Policy Vote: GOV. & F. 6 - 1 |
Urgency: No |
Mandate: No |
Hearing Date: May 28, 2015 |
Consultant: Mark McKenzie |
SUSPENSE FILE. AS AMENDED.
Bill Summary:
SB 63 would authorize cities and counties to establish seaport infrastructure financing districts (SIFDs) and divert property tax increment revenues from participating local agencies to finance port or harbor infrastructure, as specified.
Fiscal Impact (as approved on May 28, 2015):
Unknown administrative costs to the State Lands Commission (SLC). Costs for review and approval of SIFD bond issuance proposals could be absorbable but potentially up to $150,000 in a given year depending on the number and complexity of the proposals submitted for consideration. These costs would be fully reimbursed by harbor agencies from the proceeds of bonds issued for SIFD proposals.
There would be no 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 enhanced infrastructure financing district projects. As such, there would be no backfill of property tax revenues from the General Fund.
Background:
Historically, the Community Redevelopment Law has allowed a local government to establish redevelopment agencies (RDAs) and capture all of the increase in property taxes that is generated within the project area beyond the base year value (referred to as “tax increment”) over a period of decades. Prior to their dissolution pursuant to ABx1 26 (Blumenfield) Chap 5/2011, RDAs used tax increment financing (including the school share), oftentimes issuing long-term debt in the form of tax allocation bonds, to address issues of blight, construct affordable housing, rehabilitate existing buildings, and finance development and infrastructure projects.
Existing law authorizes cities and counties to form Infrastructure Financing Districts (IFDs) and divert property tax increment revenues from participating local agencies to finance public capital facilities of communitywide significance. IFDs retain property tax increment revenues from participating local taxing agencies to directly finance projects or to pay debt service on bonds issued to finance projects. School district property tax revenues may not be diverted for IFD purposes, and each local agency in the IFD must agree to divert property tax increment to the IFD. Formation of a district and issuance of IFD bonds required approval by 2/3 of affected voters in an election.
In the wake of the dissolution of RDAs, SB 628 (Beall), Chap 785/2014, was enacted, allowing local officials to create Enhanced Infrastructure Financing Districts (EIFDs). SB 628 removed the voter-approval requirement that was required to form an IFD, authorized an EIFD public finance authority to issue bonds upon the approval of 55 percent of the voters, and expanded the types of projects that could be financed. EIFDs can finance public capital facilities or other specified projects of communitywide significance that provide significant benefits to the district or the surrounding community.
Existing law also authorizes the formation of Port Infrastructure and Financing Authorities, which allows two or more local agencies that operate ports or harbors (harbor agencies) to form a joint powers authority to finance specified port and harbor infrastructure projects (SB 1988 (Marks), Chap 1235/1992). These authorities are intended to improve access to ports by allowing for the financing of roads and rail lines, piers, docks, channel improvements, breakwaters, warehouses and storage facilities, parks and recreation facilities, remediation, drainage, wastewater and electric facilities, and other projects. Port or harbor infrastructure projects may be privately operated, but all projects must have a primary or predominant use that is of direct benefit to the port or harbor.
The Public Trust Doctrine is common law doctrine that protects the public's right to use California's waterways and waterfronts for commerce, navigation, fishing, boating, natural habitat protection, and other water-oriented activities. In general, the public trust doctrine provides that filled and unfilled tide and submerged lands and the beds of lakes, streams, and other navigable waterways (i.e. public trust lands) are to be held in trust by the state for the benefit of the people of California. The State Lands Commission (SLC) administers public trust lands not granted to local agencies and oversees the activities of local grantees, such as harbor agencies.
California has 11 public ports and one private port, and the SLC administers the activities of seven harbor district grantees. Port and harbor facilities operate pursuant to long-term leases on state lands that are exempt from property taxes. Private use of public property may be taxed if those uses constitute a possessory interest, so harbor and port tenants pay a possessory interest tax in lieu of a property tax.
Proposed Law:
SB 63 would authorize cities and counties to form Seaport Infrastructure Financing Districts (SIFDs), using the structure of EIFD law to finance port and harbor infrastructure projects. Specifically, this bill would:
Define an SIFD as an EIFD that finances port or harbor infrastructure created in accordance with the EIFD law.
Add port or harbor infrastructure to the list of projects that may be financed using EIFD law, and expand the definition of port or harbor infrastructure to include any capital improvement that improves environmental quality.
Require the city or county that initiates the formation of an SIFD to designate and direct the harbor agency, rather than the city engineer, to prepare an infrastructure financing plan.
Require and SIFD public finance authority to submit any proposals for issuing bonds for port or harbor infrastructure to the affected harbor agency and the SLC for review and approval pursuant to a prescribed process that includes the following:
The harbor agency must consider the public finance authority’s bond proposal within 60 days, during which the agency must act in a public meeting to either vote for preliminary approval of the proposal or disapprove the proposal and return it to the public finance authority.
The harbor agency may only grant approval only if it makes four specified affirmative findings, and ensures that the SIFD will operate independently and that no transfers of funds or obligations are created between the harbor agency and the public finance authority or any of its constituent local agencies.
If the harbor agency grants preliminary approval, the proposal must be immediately forwarded to the SLC for consideration.
Upon receipt of the harbor agency’s preliminary approval, the SLC must consider the bond issuance proposal and grant or deny final approval.
Before granting final approval, the SLC must review the infrastructure financing plan prepared by the harbor agency, review the harbor agency’s findings made in its preliminary approval of the bond issuance proposal, and make seven affirmative findings, as specified.
If the SLC grants final approval of the bond issuance proposal, it must immediately forward its approval to the public finance authority.
Require an SIFD public finance authority, upon receipt of final approval from the SLC, to submit the proposal for issuing bonds to the voters. The SIFD bonds may be issued if two-thirds of the voters approve the proposition.
Specify that an entity paying possessory interest taxes on state-owned land is deemed a “landowner” for purposes of voting on an SIFD bond proposal, if there are fewer than 12 registered voters within the SIFD, as specified.
Add several statutes to ensure that an SIFD’s financing activities comply with the Public Trust Doctrine, as specified.
Related Legislation:
SB 628 (Beall), Chap 785/2014, authorizes the formation of EIFDs governed by a public finance authority to finance public capital facilities or other specified projects of communitywide significance using property tax increment revenues from local agencies that volunteer to participate in the district. (see above)
Staff Comments:
SB 63 would require the State Lands Commission to review an SIFD infrastructure financing plan and any findings made by the harbor agency regarding bond issuance proposals, and to make seven specified findings when considering proposals by SIFD public finance authorities for issuing bonds to pay for port or harbor infrastructure. Specifically, the SLC must make all of the following findings in order to grant approval to a bond issuance proposal:
The funding of the SIFD furthers the state’s interest in its tidelands, ports, and harbors.
The SIFD’s principal purposes are to further port and harbor infrastructure.
The execution of the financing section of the infrastructure finance plan is more likely than not to result in the outcomes proposed.
No revenues shall be made available to local governments as a result of SIFD approval from state revenues, revenues derived from granted lands, or from ports or harbors, except for specified written agreements between the harbor agency and public finance authority.
The harbor agency and public finance authority participating in the SIFD have each completed all procedural requirements, financial due diligence, and made all findings required by the bill and EIFD law.
All projects and uses in the proposed SIFD are consistent with the state tidelands trust and the conditions of any grants, and the statewide interests in the operations of ports and harbors.
No agreements by the harbor agency that may control the discretion of the 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 SIFD.
SLC costs related to these duties are unknown, and would likely depend upon the number of proposals presented to the Commission for review, and the scope and complexity of the proposals. Submission of proposals for consideration is likely to be intermittent, and many of the required activities noted above are well within the SLC’s purview of experience and could be accomplished within existing resources. Other duties, such as those noted in points 4 and 5 above, would require outside expertise or specialized training of SLC staff. Staff estimates that SLC costs could be in the range of $150,000 in a given year.
Author amendments (as adopted on May 28, 2015): Author’s amendments would do the following:
Require the SLC to be reimbursed by harbor agencies from bond proceeds for its administrative costs related to considering an SIFD proposal.
Specify that the authority provided in the bill does not apply to the Port of Stockton or river port districts.
Make technical changes and add co-authors.
-- END --
SB 63 (Hall) Page 4 of 4
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
SB 63 (Hall) - Seaport infrastructure financing districts
|
|
Version: April 7, 2015 |
Policy Vote: GOV. & F. 6 - 1 |
Urgency: No |
Mandate: No |
Hearing Date: April 27, 2015 |
Consultant: Mark McKenzie |
This bill meets the criteria for referral to the Suspense File.
Bill Summary:
SB 63 would authorize cities and counties to establish seaport infrastructure financing districts (SIFDs) and divert property tax increment revenues from participating local agencies to finance port or harbor infrastructure, as specified.
Fiscal Impact:
Unknown administrative costs to the State Lands Commission (SLC). Costs for review and approval of SIFD bond issuance proposals could be absorbable but potentially up to $150,000 (General Fund) in a given year depending on the number and complexity of the proposals submitted for consideration.
There would be no 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 enhanced infrastructure financing district projects. As such, there would be no backfill of property tax revenues from the General Fund.
Background:
Historically, the Community Redevelopment Law has allowed a local government to establish redevelopment agencies (RDAs) and capture all of the increase in property taxes that is generated within the project area beyond the base year value (referred to as “tax increment”) over a period of decades. Prior to their dissolution pursuant to ABx1 26 (Blumenfield) Chap 5/2011, RDAs used tax increment financing (including the school share), oftentimes issuing long-term debt in the form of tax allocation bonds, to address issues of blight, construct affordable housing, rehabilitate existing buildings, and finance development and infrastructure projects.
Existing law authorizes cities and counties to form Infrastructure Financing Districts (IFDs) and divert property tax increment revenues from participating local agencies to finance public capital facilities of communitywide significance. IFDs retain property tax increment revenues from participating local taxing agencies to directly finance projects or to pay debt service on bonds issued to finance projects. School district property tax revenues may not be diverted for IFD purposes, and each local agency in the IFD must agree to divert property tax increment to the IFD. Formation of a district and issuance of IFD bonds required approval by 2/3 of affected voters in an election.
In the wake of the dissolution of RDAs, SB 628 (Beall), Chap 785/2014, was enacted, allowing local officials to create Enhanced Infrastructure Financing Districts (EIFDs). SB 628 removed the voter-approval requirement that was required to form an IFD, authorized an EIFD public finance authority to issue bonds upon the approval of 55 percent of the voters, and expanded the types of projects that could be financed. EIFDs can finance public capital facilities or other specified projects of communitywide significance that provide significant benefits to the district or the surrounding community.
Existing law also authorizes the formation of Port Infrastructure and Financing Authorities, which allows two or more local agencies that operate ports or harbors (harbor agencies) to form a joint powers authority to finance specified port and harbor infrastructure projects (SB 1988 (Marks), Chap 1235/1992). These authorities are intended to improve access to ports by allowing for the financing of roads and rail lines, piers, docks, channel improvements, breakwaters, warehouses and storage facilities, parks and recreation facilities, remediation, drainage, wastewater and electric facilities, and other projects. Port or harbor infrastructure projects may be privately operated, but all projects must have a primary or predominant use that is of direct benefit to the port or harbor.
The Public Trust Doctrine is common law doctrine that protects the public's right to use California's waterways and waterfronts for commerce, navigation, fishing, boating, natural habitat protection, and other water-oriented activities. In general, the public trust doctrine provides that filled and unfilled tide and submerged lands and the beds of lakes, streams, and other navigable waterways (i.e. public trust lands) are to be held in trust by the state for the benefit of the people of California. The State Lands Commission (SLC) administers public trust lands not granted to local agencies and oversees the activities of local grantees, such as harbor agencies.
California has 11 public ports and one private port, and the SLC administers the activities of seven harbor district grantees. Port and harbor facilities operate pursuant to long-term leases on state lands that are exempt from property taxes. Private use of public property may be taxed if those uses constitute a possessory interest, so harbor and port tenants pay a possessory interest tax in lieu of a property tax.
Proposed Law:
SB 63 would authorize cities and counties to form Seaport Infrastructure Financing Districts (SIFDs), using the structure of EIFD law to finance port and harbor infrastructure projects. Specifically, this bill would:
Define an SIFD as an EIFD that finances port or harbor infrastructure created in accordance with the EIFD law.
Add port or harbor infrastructure to the list of projects that may be financed using EIFD law, and expand the definition of port or harbor infrastructure to include any capital improvement that improves environmental quality.
Require the city or county that initiates the formation of an SIFD to designate and direct the harbor agency, rather than the city engineer, to prepare an infrastructure financing plan.
Require and SIFD public finance authority to submit any proposals for issuing bonds for port or harbor infrastructure to the affected harbor agency and the SLC for review and approval pursuant to a prescribed process that includes the following:
The harbor agency must consider the public finance authority’s bond proposal within 60 days, during which the agency must act in a public meeting to either vote for preliminary approval of the proposal or disapprove the proposal and return it to the public finance authority.
The harbor agency may only grant approval only if it makes four specified affirmative findings, and ensures that the SIFD will operate independently and that no transfers of funds or obligations are created between the harbor agency and the public finance authority or any of its constituent local agencies.
If the harbor agency grants preliminary approval, the proposal must be immediately forwarded to the SLC for consideration.
Upon receipt of the harbor agency’s preliminary approval, the SLC must consider the bond issuance proposal and grant or deny final approval.
Before granting final approval, the SLC must review the infrastructure financing plan prepared by the harbor agency, review the harbor agency’s findings made in its preliminary approval of the bond issuance proposal, and make seven affirmative findings, as specified.
If the SLC grants final approval of the bond issuance proposal, it must immediately forward its approval to the public finance authority.
Require an SIFD public finance authority, upon receipt of final approval from the SLC, to submit the proposal for issuing bonds to the voters. The SIFD bonds may be issued if two-thirds of the voters approve the proposition.
Specify that an entity paying possessory interest taxes on state-owned land is deemed a “landowner” for purposes of voting on an SIFD bond proposal, if there are fewer than 12 registered voters within the SIFD, as specified.
Add several statutes to ensure that an SIFD’s financing activities comply with the Public Trust Doctrine, as specified.
Related Legislation:
SB 628 (Beall), Chap 785/2014, authorizes the formation of EIFDs governed by a public finance authority to finance public capital facilities or other specified projects of communitywide significance using property tax increment revenues from local agencies that volunteer to participate in the district. (see above)
Staff Comments:
SB 63 would require the State Lands Commission to review an SIFD infrastructure financing plan and any findings made by the harbor agency regarding bond issuance proposals, and to make seven specified findings when considering proposals by SIFD public finance authorities for issuing bonds to pay for port or harbor infrastructure. Specifically, the SLC must make all of the following findings in order to grant approval to a bond issuance proposal:
The funding of the SIFD furthers the state’s interest in its tidelands, ports, and harbors.
The SIFD’s principal purposes are to further port and harbor infrastructure.
The execution of the financing section of the infrastructure finance plan is more likely than not to result in the outcomes proposed.
No revenues shall be made available to local governments as a result of SIFD approval from state revenues, revenues derived from granted lands, or from ports or harbors, except for specified written agreements between the harbor agency and public finance authority.
The harbor agency and public finance authority participating in the SIFD have each completed all procedural requirements, financial due diligence, and made all findings required by the bill and EIFD law.
All projects and uses in the proposed SIFD are consistent with the state tidelands trust and the conditions of any grants, and the statewide interests in the operations of ports and harbors.
No agreements by the harbor agency that may control the discretion of the 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 SIFD.
SLC costs related to these duties are unknown, and would likely depend upon the number of proposals presented to the Commission for review, and the scope and complexity of the proposals. Submission of proposals for consideration is likely to be intermittent, and many of the required activities noted above are well within the SLC’s purview of experience and could be accomplished within existing resources. Other duties, such as those noted in points 4 and 5 above, would require outside expertise or specialized training of SLC staff. Staff estimates that SLC costs could be in the range of $150,000 in a given year.
-- END --
SB 63 (Hall) 4/7/15 Page 4 of 4
SENATE COMMITTEE ON GOVERNANCE AND FINANCE
Senator Robert M. Hertzberg, Chair
2015 - 2016 Regular
Bill No: |
SB 63 |
Hearing Date: |
4/15/15 |
Author: |
Hall |
Tax Levy: |
No |
Version: |
4/7/15 |
Fiscal: |
Yes |
Consultant: |
Weinberger |
||
SEAPORT INFRASTRUCTURE FINANCING DISTRICTS
Authorizes cities and counties to establish Seaport Infrastructure Financing Districts.
Background
Cities and counties can 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, 1990).
Until 2011, the Community Redevelopment Law allowed local officials to set up redevelopment agencies (RDAs), prepare and adopt redevelopment plans, and use property tax increment revenues to finance redevelopment activities. After state law dissolved RDAs in 2011, local officials sought other ways to use tax increment financing to raise the capital they need to invest in public works projects. Last year, legislators enacted SB 628 (Beall, 2014) to allow 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.
Some local officials want legislators to modify the EIFD statutes and enact additional statutory provisions to allow EIFDs to finance port and harbor infrastructure projects.
Proposed Law
Senate Bill 63 allows city and county officials to establish Seaport Infrastructure Financing District (SIFDs). The bill:
Defines a SIFD as an enhanced infrastructure financing district (EIFD) that finances port or harbor infrastructure pursuant to specified statutes; and,
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.
State law enumerates 15 categories of public capital projects that fall within the definition of the types of projects that an EIFD can finance. Senate Bill 63:
Adds “port or harbor infrastructure” to the list of public capital facilities that an EIFD can finance.
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.
State law requires a city or county to begin the process of forming an EIFD by adopting a resolution of intention to establish an EIFD. After adopting the resolution of intention, the city or county must provide public notice, as specified, and direct an official to prepare an infrastructure financing plan. Senate Bill 63 directs that a city or county must direct a harbor agency to prepare an infrastructure financing plan for a SIFD.
State law allows an EIFD’s public finance authority to initiate proceedings to issue bonds by adopting a resolution of intention that contains specified information about the proposed bond issuance. The public finance authority must seek voter approval of a proposal to issue bonds. Senate Bill 63 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, pursuant to the following process:
A harbor agency, after receiving a public financing authority’s resolution proposing to issue bonds for a SIFD, must consider the proposal within 60 days. During that time, the harbor agency’s governing body must act at public meeting to either vote to give preliminary approval of the proposal, or disapprove the proposal and return it to the public financing authority. A harbor agency may give preliminary approval only if it makes four specified findings. The agency is prohibited from granting preliminary approval unless:
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.
No transfers of funds or obligations, as defined, or future transfers of funds or obligations contingent on the approval of the SIFD, 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.
If a harbor agency votes to give preliminary approval to a proposal to issue bonds, it must immediately forward its preliminary approval to the State Lands Commission for its consideration
The State Lands Commission, after receiving a harbor agency’s preliminary approval of a proposal to issue bonds for a SIFD, must consider the proposal and either grant or deny final approval. Before granting final approval, the Commission must review the infrastructure financing plan prepared by the harbor agency and the findings that the harbor agency made in its preliminary approval. The Commission cannot grant final approval unless it makes seven specified findings.
If the Commission grants final approval, it must immediately forward its approval to the public financing authority for further action.
Senate Bill 63 prohibits a SIFD’s public finance authority from proceeding with a bond issuance unless the State Lands Commission votes in favor of the authority’s proposal to issue bonds.
State law requires a public finance authority to seek voter approval of a proposal to issue bonds. If there are fewer than 12 registered voters within the EIFD, the vote on the proposed bond issuance must be by the landowners in the EIFD. Senate Bill 63 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.
State law allows an EIFD’s public finance authority to issue bonds if more than 55% of the voters voting on the proposition vote in favor of issuing the bonds. Senate Bill 63 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.
The Public Trust Doctrine is common law doctrine that protects the public's right to use California's waterways and waterfronts for commerce, navigation, fishing, boating, natural habitat protection, and other water-oriented activities. In general, the public trust doctrine provides that filled and unfilled tide and submerged lands and the beds of lakes, streams, and other navigable waterways (i.e. public trust lands) are to be held in trust by the state for the benefit of the people of California. The State Lands Commission administers public trust lands not granted to local agencies and oversees the activities of local grantees, such as harbor agencies. Senate Bill 63 contains several provisions to ensure that SIFDs’ financing activities comply with the Public Trust Doctrine. Specifically, the bill:
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.
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.
Requires that the State Lands Commission 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.
Declares that its provisions do not preclude the State Lands Commission from enforcing the state’s interests in its tidelands.
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.
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.
Senate Bill 63 contains extensive findings and declarations relating to the necessity and benefits of increased public investment in port and harbor infrastructure projects.
State Revenue Impact
No estimate.
Comments
1. 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. SB 63 will provide ports with access to vital public financing tools, through the formation of Seaport Infrastructure Financing Districts SIFDs, which will augment their current reliance on revenue bonds backed by fees or lease revenues. Using the financing tools enacted by last year’s Enhanced Infrastructure Financing District (EIFD) legislation, SB 63 will facilitate investments in California seaports that will save money, improve economic competitiveness, and create jobs while also protecting the environment.
2. Possessory interest tax increment. Port and harbor facilities operate pursuant to long-term leases on state lands that are exempt from property taxes. Private use of public property may be taxed if those uses constitute possessory interest, so harbor and port tenants pay a possessory interest tax in lieu of a property tax. One of SB 63’s purposes is to allow local agencies to finance port and harbor improvements by capturing possessory interest tax increment revenues that are generated as a result of the financed improvements. However, the bill relies on EIFDs’ existing statutory language in Government Code §53398.75 to define what tax increment revenues can be captured. It is unclear whether this language is broad enough to include possessory interest tax revenues. The Committee may wish to consider amending SB 63 to clarify SIFDs’ statutory authority to divert possessory interest tax revenues.
3. What about special districts? State law allows EIFDs to be formed only by a city or a county. Special districts may participate in EIFD financing as members of a joint powers authority. Some smaller ports fall under the jurisdiction of special districts. If these districts want to capture increment revenues from port improvements, SB 63 appears to require that they must partner with a city or county. The Committee may wish to consider amending SB 63 to allow a special district to form an SIFD independently to finance improvement using possessory interest tax revenues that would be allocated to that special district.
Support and Opposition
(4/9/15)
Support: Pacific Merchant Shipping Association.
Opposition: Unknown.
-- END --
Bill Author
