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AB-1561 Inland Port Development and Management Act.(2017-2018)

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Date Published: 09/11/2017 09:36 PM
AB1561:v97#DOCUMENT

Amended  IN  Assembly  September 11, 2017
Amended  IN  Assembly  March 20, 2017

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Assembly Bill No. 1561


Introduced by Assembly Member Quirk-Silva

February 17, 2017


An act to amend Section 63010 of, and to add Title 6.9 (commencing with Section 64200) to, the Government Code, relating to infrastructure financing.


LEGISLATIVE COUNSEL'S DIGEST


AB 1561, as amended, Quirk-Silva. Inland Port Infrastructure Financing Development and Management Act.
(1) Existing law authorizes 2 or more harbor agencies to establish an authority under the joint powers law, with various powers and duties, for the purpose of establishing an infrastructure fund and financing port or harbor infrastructure, as specified.
This bill would authorize 2 or more local agencies to establish an authority under the joint powers law for the purpose of establishing an infrastructure fund and financing inland port infrastructure.
(2) Existing law, the Bergeson-Peace Infrastructure and Economic Development Bank Act, authorizes the California Infrastructure and Economic Development Bank, governed by a board of directors, to, among other things, make loans, issue bonds, and provide other financial assistance for various types of projects that qualify as public development or economic development facilities. The act defines the term “public development facilities” for these purposes as real and personal property, structures, conveyances, equipment, thoroughfares, buildings, and supporting components thereof that are directly related to providing, among other things, port facilities.
This bill would revise the description of port facilities to specifically include inland ports, as defined.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 Section 63010 of the Government Code is amended to read:

63010.
 For purposes of this division, the following words and terms shall have the following meanings unless the context clearly indicates or requires another or different meaning or intent:
(a) “Act” means the Bergeson-Peace Infrastructure and Economic Development Bank Act.
(b) “Bank” means the California Infrastructure and Economic Development Bank.
(c) “Board” or “bank board” means the Board of Directors of the California Infrastructure and Economic Development Bank.
(d) “Bond purchase agreement” means a contractual agreement executed between the bank and a sponsor, or a special purpose trust authorized by the bank or a sponsor, or both, whereby the bank or special purpose trust authorized by the bank agrees to purchase bonds of the sponsor for retention or sale.
(e) “Bonds” means bonds, including structured, senior, and subordinated bonds or other securities; loans; notes, including bond, revenue, tax, or grant anticipation notes; commercial paper; floating rate and variable maturity securities; and any other evidences of indebtedness or ownership, including certificates of participation or beneficial interest, asset backed certificates, or lease-purchase or installment purchase agreements, whether taxable or excludable from gross income for federal income taxation purposes.
(f) “Cost,” as applied to a project or portion thereof financed under this division, means all or any part of the cost of construction, renovation, and acquisition of all lands, structures, real or personal property, rights, rights-of-way, franchises, licenses, easements, and interests acquired or used for a project; the cost of demolishing or removing any buildings or structures on land so acquired, including the cost of acquiring any lands to which the buildings or structures may be moved; the cost of all machinery, equipment, and financing charges; interest prior to, during, and for a period after completion of construction, renovation, or acquisition, as determined by the bank; provisions for working capital; reserves for principal and interest and for extensions, enlargements, additions, replacements, renovations, and improvements; and the cost of architectural, engineering, financial and legal services, plans, specifications, estimates, administrative expenses, and other expenses necessary or incidental to determining the feasibility of any project or incidental to the construction, acquisition, or financing of any project, and transition costs in the case of an electrical corporation.
(g) “Economic development facilities” means real and personal property, structures, buildings, equipment, and supporting components thereof that are used to provide industrial, recreational, research, commercial, utility, goods movement, or service enterprise facilities, community, educational, cultural, or social welfare facilities and any parts or combinations thereof, and all facilities or infrastructure necessary or desirable in connection therewith, including provision for working capital, but shall not include any housing.
(h) “Electrical corporation” has the meaning set forth in Section 218 of the Public Utilities Code.
(i) “Executive director” means the Executive Director of the California Infrastructure and Economic Development Bank appointed pursuant to Section 63021.
(j) “Financial assistance” in connection with a project, includes, but is not limited to, any combination of grants, loans, the proceeds of bonds issued by the bank or special purpose trust, insurance, guarantees or other credit enhancements or liquidity facilities, and contributions of money, property, labor, or other things of value, as may be approved by resolution of the board or the sponsor, or both; the purchase or retention of bank bonds, the bonds of a sponsor for their retention or for sale by the bank, or the issuance of bank bonds or the bonds of a special purpose trust used to fund the cost of a project for which a sponsor is directly or indirectly liable, including, but not limited to, bonds, the security for which is provided in whole or in part pursuant to the powers granted by Section 63025.1; bonds for which the bank has provided a guarantee or enhancement, including, but not limited to, the purchase of the subordinated bonds of the sponsor, the subordinated bonds of a special purpose trust, or the retention of the subordinated bonds of the bank pursuant to Chapter 4 (commencing with Section 63060); or any other type of assistance deemed appropriate by the bank or the sponsor, except that no direct loans shall be made to nonpublic entities other than in connection with the issuance of rate reduction bonds pursuant to a financing order or in connection with a financing for an economic development facility.
For purposes of this subdivision, “grant” does not include grants made by the bank except when acting as an agent or intermediary for the distribution or packaging of financing available from federal, private, or other public sources.
(k) “Financing order” has the meaning set forth in Section 840 of the Public Utilities Code.
(l) “Guarantee trust fund” means the California Infrastructure Guarantee Trust Fund.
(m) “Infrastructure bank fund” means the California Infrastructure and Economic Development Bank Fund.
(n) “Loan agreement” means a contractual agreement executed between the bank or a special purpose trust and a sponsor that provides that the bank or special purpose trust will loan funds to the sponsor and that the sponsor will repay the principal and pay the interest and redemption premium, if any, on the loan.
(o) “Participating party” means any person, company, corporation, association, state, or municipal governmental entity, partnership, firm, or other entity or group of entities, whether organized for profit or not for profit, engaged in business or operations within the state and that applies for financing from the bank in conjunction with a sponsor for the purpose of implementing a project. However, in the case of a project relating to the financing of transition costs or the acquisition of transition property, or both, on the request of an electrical corporation, or in connection with financing for an economic development facility, or for the financing of insurance claims, the participating party shall be deemed to be the same entity as the sponsor for the financing.
(p) “Project” means designing, acquiring, planning, permitting, entitling, constructing, improving, extending, restoring, financing, and generally developing public development facilities or economic development facilities within the state or financing transition costs or the acquisition of transition property, or both, upon approval of a financing order by the Public Utilities Commission, as provided in Article 5.5 (commencing with Section 840) of Chapter 4 of Part 1 of Division 1 of the Public Utilities Code.
(q) “Public development facilities” means real and personal property, structures, conveyances, equipment, thoroughfares, buildings, and supporting components thereof, excluding any housing, that are directly related to providing the following:
(1) “City streets” including any street, avenue, boulevard, road, parkway, drive, or other way that is any of the following:
(A) An existing municipal roadway.
(B) Is shown upon a plat approved pursuant to law and includes the land between the street lines, whether improved or unimproved, and may comprise pavement, bridges, shoulders, gutters, curbs, guardrails, sidewalks, parking areas, benches, fountains, plantings, lighting systems, and other areas within the street lines, as well as equipment and facilities used in the cleaning, grading, clearance, maintenance, and upkeep thereof.
(2) “County highways” including any county highway as defined in Section 25 of the Streets and Highways Code, that includes the land between the highway lines, whether improved or unimproved, and may comprise pavement, bridges, shoulders, gutters, curbs, guardrails, sidewalks, parking areas, benches, fountains, plantings, lighting systems, and other areas within the street lines, as well as equipment and facilities used in the cleaning, grading, clearance, maintenance, and upkeep thereof.
(3) “Drainage, water supply, and flood control” including, but not limited to, ditches, canals, levees, pumps, dams, conduits, pipes, storm sewers, and dikes necessary to keep or direct water away from people, equipment, buildings, and other protected areas as may be established by lawful authority, as well as the acquisition, improvement, maintenance, and management of floodplain areas and all equipment used in the maintenance and operation of the foregoing.
(4) “Educational facilities” including libraries, child care facilities, including, but not limited to, day care facilities, and employment training facilities.
(5) “Environmental mitigation measures” including required construction or modification of public infrastructure and purchase and installation of pollution control and noise abatement equipment.
(6) “Parks and recreational facilities” including local parks, recreational property and equipment, parkways, and property.
(7) (A) “Port facilities” including airports, inland ports, landports, waterports, railports, docks, harbors, ports of entry, piers, ships, small boat harbors and marinas, and any other facilities, additions, or improvements in connection therewith, that transport goods or persons.
(B) For purposes of this paragraph, an “inland port” means a logistical hub that is located on a site separate from land, air, and coastal ports of entry and that is designed to facilitate and process international and domestic trade, including, but not limited to, multimodal transportation assets and goods movement value added facilities and services.
(8) “Power and communications” including facilities for the transmission or distribution of electrical energy, natural gas, and telephone and telecommunications service.
(9) “Public transit” including air and rail transport, airports, guideways, vehicles, rights-of-way, passenger stations, maintenance and storage yards, and related structures, including public parking facilities, and equipment used to provide or enhance transportation by bus, rail, ferry, or other conveyance, either publicly or privately owned, that provides to the public general or special service on a regular and continuing basis.
(10) “Sewage collection and treatment” including pipes, pumps, and conduits that collect wastewater from residential, manufacturing, and commercial establishments, the equipment, structures, and facilities used in treating wastewater to reduce or eliminate impurities or contaminants, and the facilities used in disposing of, or transporting, remaining sludge, as well as all equipment used in the maintenance and operation of the foregoing.
(11) “Solid waste collection and disposal” including vehicles, vehicle-compatible waste receptacles, transfer stations, recycling centers, sanitary landfills, and waste conversion facilities necessary to remove solid waste, except that which is hazardous as defined by law, from its point of origin.
(12) “Water treatment and distribution” including facilities in which water is purified and otherwise treated to meet residential, manufacturing, or commercial purposes and the conduits, pipes, and pumps that transport it to places of use.
(13) “Defense conversion” including, but not limited to, facilities necessary for successfully converting military bases consistent with an adopted base reuse plan.
(14) “Public safety facilities” including, but not limited to, police stations, fire stations, court buildings, jails, juvenile halls, and juvenile detention facilities.
(15) “State highways” including any state highway as described in Chapter 2 (commencing with Section 230) of Division 1 of the Streets and Highways Code, and the related components necessary for safe operation of the highway.
(16) (A) “Military infrastructure,” including, but not limited to, facilities on or near a military installation, that enhance the military operations and mission of one or more military installations in this state. To be eligible for funding, the project shall be endorsed by the Office of Planning and Research.
(B) For purposes of this subdivision, “military installation” means any facility under the jurisdiction of the Department of Defense, as defined in paragraph (1) of subsection (e) of Section 2687 of Title 10 of the United States Code.
(17) “Goods movement-related infrastructure” including port facilities, roads, rail, and other facilities and projects that move goods, energy, and information.
(r) “Rate reduction bonds” has the meaning set forth in Section 840 of the Public Utilities Code.
(s) “Revenues” means all receipts, purchase payments, loan repayments, lease payments, and all other income or receipts derived by the bank or a sponsor from the sale, lease, or other financing arrangement undertaken by the bank, a sponsor, or a participating party, including, but not limited to, all receipts from a bond purchase agreement, and any income or revenue derived from the investment of any money in any fund or account of the bank or a sponsor and any receipts derived from transition property. Revenues shall not include moneys in the General Fund of the state.
(t) “Special purpose trust” means a trust, partnership, limited partnership, association, corporation, nonprofit corporation, or other entity authorized under the laws of the state to serve as an instrumentality of the state to accomplish public purposes and authorized by the bank to acquire, by purchase or otherwise, for retention or sale, the bonds of a sponsor or of the bank made or entered into pursuant to this division and to issue special purpose trust bonds or other obligations secured by these bonds or other sources of public or private revenues. Special purpose trust also means any entity authorized by the bank to acquire transition property or to issue rate reduction bonds, or both, subject to the approvals by the bank and powers of the bank as are provided by the bank in its resolution authorizing the entity to issue rate reduction bonds.
(u) “Sponsor” means any subdivision of the state or local government including departments, agencies, commissions, cities, counties, nonprofit corporations formed on behalf of a sponsor, special districts, assessment districts, and joint powers authorities within the state or any combination of these subdivisions that makes an application to the bank for financial assistance in connection with a project in a manner prescribed by the bank. This definition shall not be construed to require that an applicant have an ownership interest in the project. In addition, an electrical corporation shall be deemed to be the sponsor as well as the participating party for any project relating to the financing of transition costs and the acquisition of transition property on the request of the electrical corporation and any person, company, corporation, partnership, firm, or other entity or group engaged in business or operation within the state that applies for financing of any economic development facility, shall be deemed to be the sponsor as well as the participating party for the project relating to the financing of that economic development facility.
(v) “State” means the State of California.
(w) “Transition costs” has the meaning set forth in Section 840 of the Public Utilities Code.
(x) “Transition property” has the meaning set forth in Section 840 of the Public Utilities Code.

SEC. 2.

 Title 6.9 (commencing with Section 64200) is added to the Government Code, to read:

TITLE 6.9. INLAND PORT INFRASTRUCTUREFINANCING DEVELOPMENT AND MANAGEMENT ACT

CHAPTER  1. Findings and Definitions
Article  1. Legislative Findings

64200.
 This act shall be known as, and may be cited as, the Inland Port Infrastructure Financing Development and Management Act.

64201.
 The Legislature finds and declares all of the following:
(a) The state has a compelling interest in the success of its inland ports because, as in the case of sea ports and harbors, 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 inland ports of this state for the benefit of the people.
(b) Inland ports, and sea ports and harbors, are the vital interface between California and the United States and the state’s important trade partners in North and South America, the Pacific Rim countries, and other regions of the world.
(c) In addition to inland port access transportation projects, there is a need for new facilities and infrastructure investments that will enhance California’s competitiveness for international and domestic cargoes, grow employment, yield significant economic development, increase state and local tax revenues, and reduce impacts to environmental quality from goods movement.
(d) California’s long-term success is dependent on the ability to reimage a state freight movement system that connects, offers economical options, and is adapting to changing needs. Using an expanded inland port concept incorporates the idea that some facilities at traditional maritime ports could be duplicated or complemented at inland locations. In this way, inland ports can promote and disburse economic development and provide for higher levels of logistical integration while reducing the demands on limited capacity at air and sea ports.
(e) A further benefit of inland ports is to relieve congestion at land and sea ports. Once goods are received at the inland port, further inspection can occur or the goods can be transferred to a different transportation mode, stored for future distribution, or assembled into other products. This consolidation of services provides value-adding activities, allowing for less congestion and fewer delays at border points of entry. Consolidated services offer inland ports unique and high-value opportunities attractive to quality shippers and logistical managers.
(f) It is the intent of the Legislature to assist in the reduction of local borrowing costs, help accelerate the construction, repair, and maintenance of inland port capital improvements, and promote greater use of existing and new financial instruments and mechanisms. development of a statewide inland port system that supports, leverages, enhances, and links resources, manufacturing, warehousing, distribution centers, and airports, seaports, and land ports of entry. In achieving this interconnected and more efficient economic development network, California’s public and private sectors will benefit from a reduction of borrowing costs and accelerated timeframes for adopting innovative and lower carbon-emitting technologies and processes.

Article  2. Definitions

64203.
 The definitions in this article govern the construction of this title:
(a) “Authority” means a joint powers entity or nonprofit public benefit corporation created in accordance with Section 64210.
(b) “Bonds” means bonds, notes, bond anticipation notes, commercial paper, or other evidences of indebtedness or lease, installment sale, or other agreements or certificates of participation therein.
(c) “Infrastructure fund” means a port infrastructure fund established by an authority pursuant to Section 64211.
(d) “Inland port” means a logistical hub that is located on a site separate from land, air, and coastal ports of entry and that is designed to facilitate and process international and domestic trade, including, but not limited to, multimodal transportation assets and goods movement value added facilities and services.
(e) “Inland port infrastructure” means any of the following, if its primary or predominant use is of direct benefit to the port:
(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, platforms, decks, cranes, or other facilities for loading or unloading of cargo or passengers.
(3) Lands, easements, port access routes, rights-of-way, dredge disposal sites, safety zones, levees, 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.
(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).
(f) “Joint powers law” means Chapter 5 (commencing with Section 6500) of Division 7 of Title 1.
(g) “Member” means any agency that is party to an agreement establishing an authority pursuant to Section 64210.
(h) “Public financing authority” has the same meaning as provided in Section 53398.51.

CHAPTER  2. Formation and Powers of an Authority

64210.
 (a) Any two or more local agencies may, pursuant to the joint powers law, establish an authority, separate from the parties to the agreement, for the purpose, in addition to any other purpose permitted under the joint powers law, of establishing an infrastructure fund and financing port infrastructure pursuant to this title.
(b) An authority may be formed as a nonprofit public benefit corporation subject to the Nonprofit Corporation Law (Division 2 (commencing with Section 5000) of Title 1 of the Corporations Code), for the purpose of establishing an infrastructure fund and financing port or infrastructure pursuant to this title.
(c) An authority may include land that has been designated as part of a foreign trade zone as authorized by Section 6304. In this case, the governing body of the foreign trade zone may, to the extent not otherwise prohibited, partner with the authority on issues of mutual interest.

64211.
 An authority established pursuant to Section 64210 shall deposit into an infrastructure fund to be established by the authority both of the following:
(a) Any federal, state, or private grants received by the authority directly or by assignment or other transfer from the state, any member, or any other public body.
(b) Any other money of, or received by, the authority, which the authority determines to deposit in the infrastructure fund.

64212.
 An authority may establish one or more subaccounts within the infrastructure fund, and may treat each subaccount as separate and distinct. Money in the infrastructure fund may be invested in any instrument permitted by Section 53601. However, any money in any subaccount which is separately pledged to secure or pay bonds may be invested in, or may be limited to investments in, any instrument permitted by the resolution or indenture providing for the issuance of the bonds. Any investment income earned on the investment of money in an infrastructure fund shall be credited to the infrastructure fund unless, and to the extent that, federal or state law or agreement, pursuant to which moneys were deposited into the fund, requires otherwise. Any income earned on the investment of money in any subaccount shall be credited to the subaccount unless, and to the extent that, the authority establishing the fund determines otherwise.

64213.
 Subject to the terms and conditions determined by an authority that establishes an infrastructure fund, including, but not limited to, any terms and conditions related to interest rates, payment, prepayment, pledges, security, or remedy for defaults, the funds in an infrastructure fund, or any subaccount therein, may be used for one or more of the following purposes:
(a) To make loans to, or to enter into an installment sale or other agreement with, any member or other port authority for the purpose of financing or refinancing port infrastructure.
(b) To purchase, refinance, or restructure bonds issued by any member or other port authority in whole or in part to finance or refinance port infrastructure.
(c) To secure or guarantee, or to purchase, pay for, or reimburse any guaranty, insurance, or other credit enhancement of, any bonds issued by the authority, any member, or other port authority, if the bonds were issued in whole or in part to finance or refinance port infrastructure.
(d) To pay the costs of administering the infrastructure fund or the authority, including any costs of issuance of bonds issued by the authority to finance or refinance port infrastructure.

64214.
 In addition to any purpose authorized under the joint powers law for which bonds may be issued, an authority may issue bonds in the manner set forth in Article 4 (commencing with Section 6584) of Chapter 5 of Division 7 of Title 1, to finance or refinance port infrastructure or to make deposits into the infrastructure fund or any subaccount thereof, except that a nonprofit public benefit corporation may issue bonds only to the extent authorized by a joint powers agreement.

64215.
 Exclusively for purposes of securing the financing of port infrastructure, any local agency may borrow funds from, or otherwise secure financing through, an authority at the interest rate or rates, with the maturity date or dates, payment, pledge, security, default, remedy, and other terms and conditions specified in bonds of the local agency or obtain a loan, loan purchase, installment purchase, lease, or other agreement between the authority and the local agency. The local agency also may enter into any agreement for liquidity or credit enhancement that may be necessary or appropriate, as determined by the authority and consistent with other provisions of law, in connection with the borrowing or loan. This section provides a complete, additional, and alternative method for performing the acts authorized by this section.

64216.
 (a) Subject to subdivision (a) of Section 64217, port infrastructure may be privately operated. Privately owned port 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 64211.
(b) If port infrastructure financed wholly or partly with public funds is privately owned and if the use of the port infrastructure changes so as to be incompatible with the purposes for which the funds were provided, the private owner shall pay the public agency the percentage of the full appreciated value of the port infrastructure that was originally financed with public funds.
(c) Port infrastructure may be located within, partly within and partly outside, or outside the boundaries of a port authority. Port infrastructure may include infrastructure located in a foreign trade zone within 60 miles of the port.

64217.
 (a) Before public funds are allocated pursuant to this title for privately owned port infrastructure, as specified in Section 64216, approval of the Treasurer is required.
(b) Each authority shall submit an annual report regarding receipts and expenditures from the infrastructure fund and all financing activities to the Controller.