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AB-2729 Infrastructure financing.(2013-2014)

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Amended  IN  Assembly  April 09, 2014
Amended  IN  Assembly  March 28, 2014

CALIFORNIA LEGISLATURE— 2013–2014 REGULAR SESSION

Assembly Bill
No. 2729


Introduced by Assembly Member Medina

February 21, 2014


An act to add Part 5.5 (commencing with Section 14100) to Division 3 of Title 1 of the Corporations Code, to amend Section 63010 of, and to add Chapter 7 (commencing with Section 63090) to Division 1 of Title 6.7 of of, the Government Code, and to amend Sections 10295 and 10335 of the Public Contracts Code, relating to business. state government.


LEGISLATIVE COUNSEL'S DIGEST


AB 2729, as amended, Medina. California Economic Development Infrastructure Finance Act of 2014. Infrastructure financing.

Existing law authorizes various methods to finance public facilities that are necessary to meet the needs of the state. Existing law authorizes

The Bergeson-Peace Infrastructure and Economic Development Bank Act establishes the California Infrastructure and Economic Development Bank (I-Bank), located, within the Governor’s Office of Business and Economic Development, to, among other things, administer the California Small Business Financial Development Corporation Law and to oversee the Small Business Loan Guarantee Program. be governed by a specified board of directors. The act makes findings and declarations in this regard, provides definitions, and authorizes the board to take various actions in connection with the bank, including the issuance of bonds, as specified.
This bill, among other things, would revise the definition of economic development facilities to include facilities that are used to provide goods movement and would define goods movement-related infrastructure. The bill would revise the definition of port facilities to specifically reference airports, landports, waterports, and railports, and expand the definition of participating party to include an international governmental entity. The bill would make various technical changes.
This bill, bill would also enact the California Economic Development Infrastructure Finance Act of 2014, would 2014 to create the California Infrastructure Finance Center to administer the provisions of this act, as specified, under the oversight of the I-Bank. bank. This bill would authorize the creation of California infrastructure development corporations, as specified, and establish requirements for those corporations to secure participation rights, as part of forming public-private partnerships with the I-Bank bank in building infrastructure related to economic-related activities. Participation rights include a commitment by the state to use the California Infrastructure Development Corporation to deliver infrastructure projects. Participation rights also include the right of first refusal by the corporation to participate in public-private partnership projects (P3 projects) and if it should choose to participate, a preestablished minimum participation rate in financing each and all P3 projects. This bill would also provide an exemption from specified public contracting requirements for contracts entered into between the I-Bank bank and these corporations.
This bill would also establish conflict of interest provisions for persons implementing the act or participating in a California Infrastructure Development Corporation. This bill would make a violation of these provisions a felony, thereby creating a crime and a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: YES  

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


SECTION 1.

 Part 5.5 (commencing with Section 14100) is added to Division 3 of Title 1 of the Corporations Code, to read:

PART 5.5. Public-Private Infrastructure Corporations

CHAPTER  1. Participation Rights
Article  1. Introduction

14100.
 (a) The Legislature finds and declares that engaging the private sector in building infrastructure related to economic-related activities will further the opportunities of California businesses and workers.
(b) Without a modern infrastructure network comprised of roads, highways, railroads, and air, land, and seaports, California will be unable to remain sufficiently connected to the global economy.
(c) Finding appropriate means for partnering with private sector infrastructure developers must be undertaken in a thoughtful way that ensures workers, residents, and small businesses are not negatively impacted or result in an unreasonable ability to participate in the broader economy.

Article  2. Definitions

14101.
 Unless the context otherwise requires, the definitions in this section shall govern the construction of this chapter. The definitions in this chapter shall apply only to this chapter and not to any other chapter of this division.
(a) “Bank” means the California Infrastructure and Economic Development Bank.
(b) “Bank board” means the Board of Directors of the California Infrastructure and Economic Development Bank.
(c) “California Infrastructure Development Center” means the governmental unit within the bank, which is located within the Governor’s Office of Business and Economic Development, with the administrative responsibility for programs and activities authorized pursuant to this part.
(d) “Corporation” means any California infrastructure development corporation created pursuant to this part.
(e) “Directives and requirements” means a document adopted by the bank board setting forth policy direction as well as rules governing a particular subject area.
(f) “Executive director” means the Executive Director of the California Infrastructure and Economic Development Bank.
(g) “Participation rights” means a commitment by the state to use the California Infrastructure Development Corporation to deliver infrastructure projects. Participation rights include the right of first refusal to participate in each and all public-private partnership projects (P3 projects) and if it should choose to participate, a preestablished minimum participation rate in financing each and all P3 projects.
(h) “Program manager” means the manager of the California Infrastructure Development Center as appointed by the executive director of the bank.

Article  3. Program Manager

14103.
 The program manager shall do all of the following:
(a) Administer this chapter.
(b) Make recommendations to the executive director and the bank board on the approval or disapproval of the articles of incorporation. This determination shall be based upon the following:
(A) Review of the articles of incorporation and bylaws of the corporation to determine whether they contain the provisions required by this chapter and conform with the directives and requirements adopted by the bank board pursuant to this chapter.
(B) A determination as to whether the legislative intent expressed in Section 14100 shall be served by the proposed corporation.
(C) A determination as to whether the responsibility, character, and general fitness of the individuals who will manage the corporation command the confidence of the state, and warrant the belief that the business of the proposed corporation will be honestly and efficiently conducted in accordance with the intent and purpose of this chapter.
(D) A determination by the program manager that there is significant need for a new corporation.
(c) Examine, or cause to be examined, at any reasonable time, all books, records, and documents of every kind, and the physical properties of a corporation. The inspection shall include the right to make copies, extracts, and search records.

Article  4. Approval of the Corporation

14104.
 The bank board shall approve a new corporation recommended by the program manager, based on an examination of each of the following:
(a) Review of the articles of incorporation and bylaws of the corporation to determine whether they contain the provisions required by this chapter and conform with the directives and requirements adopted by the bank board pursuant to this chapter.
(b) Determination as to whether the legislative intent expressed in Section 14101 will be served by the proposed corporation.
(c) Determination as to whether the responsibility, character, and general fitness of the individuals who will manage the corporation command the confidence of the state and warrant the belief that the business of the proposed corporation will be honestly and efficiently conducted in accordance with the intent and purpose of this chapter.
(d) Determination of the program manager that there is significant need for a new corporation.

Article  5. New Corporations

14105.
 Upon approval by the bank board of an entity as a corporation, an entity shall adopt or amend its articles of incorporation to comply with the following:
(a) The name of the corporation shall include the words “a California Infrastructure Development Corporation.”
(b) The purposes for which the corporation is formed, which shall be those specified in Section 14101. This requirement shall not be deemed to preclude a statement of powers.
(c) A geographical description of the corporation’s primary service area. A primary service area may cover certain parts or the entire state.
(d) The name and addresses of seven or more persons who are to act in the capacity of directors until the selection of their successors.
(e) That the corporation is organized pursuant to this chapter.

14106.
 If the bank board concurs with the findings of the program manager pursuant to Section 14104, the bank board shall direct the program manager to approve the articles of incorporation and endorse the approval thereon and forward the same to the Secretary of State for his or her approval and filing. Likewise, the program manager shall review all amendments to the articles of incorporation to ensure consistency with the purposes of this chapter.

14107.
 (a) The corporation’s existence as a California Infrastructure Development Corporation begins upon the filing of the articles with the Secretary of State and continues perpetually unless otherwise expressly provided for by law.
(b) If a corporation is terminated from participation in all programs, in order to continue its existence as a corporation pursuant to Division 1 (commencing with Section 100) of the Corporations Code the corporation shall amend its articles of incorporation in accordance by removing the provisions required by Section 14105, including an amendment to remove the words “California Infrastructure Development Corporation,” from the corporate name, and shall no longer be registered with the Secretary of State as a California Infrastructure Development Corporation. A corporation shall not enjoy any of the benefits of a California Infrastructure Development Corporation following termination.

14108.
 For six months following the establishment of a corporation, commencing upon filing of the articles of incorporation with the Secretary of State, a corporation shall be on probation. While on probation, a corporation may be suspended if suspension is recommended by the program manager and affirmed by the executive director. This suspension is nonappealable and not subject to the procedures for suspension applicable to a corporation not on probation.

Article  6. Corporations

14113.
 The corporate powers of a corporation shall be exercised by its board of directors.

14115.
 Every corporation shall provide for, and maintain a central staff to perform, all administrative requirements of the corporation, including all those functions required of a corporation by the contract and this chapter.

14120.
 (a) A corporation shall report to the program manager, or his or her designated representative, all statistical and other reports required by this chapter and Chapter 6 (commencing with Section 63088) of Division 1 of Title 6.7 of the Government Code.
(b) A corporation shall make a report to the program manager, as required by Chapter 6 (commencing with Section 63088) of Division 1 of Title 6.7 of the Government Code.

Article  7. Conflict of Interest

14122.
 It shall be unlawful for a member of the bank board or for the executive director, program manager, or any person who is an officer, director, contractor, or employee of a corporation, or who is a member of a loan committee, or who is an employee of the California Infrastructure and Economic Development Bank to do any of the following:
(a) Ask for, consent, or agree to receive, any commission, emolument, gratuity, money, property, or thing of value for his or her own use, benefit, or personal advantage, for procuring or endeavoring to procure for any person, partnership, joint venture, association, or corporation, any loan, guarantee, financial, or other assistance from any corporation.
(b) Borrow money, property, or to benefit knowingly, directly or indirectly, from the use of the money, credit, or property of any corporation.
(c) Make, maintain, or attempt to make or maintain, a deposit of the funds of a corporation with any other corporation or association on condition, or with the understanding, expressed or implied, that the corporation or association receiving the deposit shall pay any money or make a loan or advance, directly or indirectly, to any person, partnership, joint venture, association, or corporation, other than to a corporation formed under this chapter.

14123.
 It shall be unlawful for a member of the bank board or for the executive director, program manager, or any person who is an officer or director of a corporation, or who is an employee of the California Infrastructure and Economic Development Bank to purchase or receive, or to be otherwise interested in the purchase or receipt, directly or indirectly, of any asset of a corporation, without paying to the corporation the fair market value of the asset at the time of the transaction.

14124.
 Violation of any provision of this article shall constitute a felony.

SEC. 2.

 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 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; 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, international, 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 a 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 parkways, and property.
(7) “Port facilities” including airports, 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. therewith that transport good or persons.
(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 of goods, 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, “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 Military and Aerospace Support established pursuant to Section 13998.2.
(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 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.SEC. 3.

 Chapter 7 (commencing with Section 63090) is added to Division 1 of Title 6.7 of the Government Code, to read:
CHAPTER  7. California Economic Development Infrastructure Finance Act of 2014
Article  1. Introduction

63090.
 (a) This chapter shall be known, and may be cited, as the California Economic Development Infrastructure Act of 2014.
(b) Notwithstanding any other provision of this division, this chapter shall not apply to any other activities, powers, and duties of the bank under any of the other chapters of this division.
(c) Infrastructure development, enhancement, and modernization is fundamental to the continued economic growth of the state. In order to be successful in the integrated global economy, California businesses and workers must have access to the necessary infrastructure. Some of this infrastructure will be financed with state moneys, while other infrastructure is more appropriately funded privately.
(d) It is necessary to authorize the bank to serve as a conduit financier, project advisor, and a project facilitator for infrastructure that supports private economic development activities that provide a meaningful benefit to the people of California.

Article  2. Definitions

63091.
 Unless the context otherwise requires, the definitions in this section govern the construction of this chapter. The definitions in this chapter shall apply only to this chapter and not to any other provision of this division.
(a) “Bank” means the California Infrastructure and Economic Development Bank.
(b) “Bank board” means the Board of Directors of the California Infrastructure and Economic Development Bank.
(c) “California Infrastructure Development Center” means the governmental unit within the bank with the administrative responsibility for programs and activities authorized pursuant to Chapter 1 (commencing with Section 14100) of Part 5.5 of Division 3 of Title 1 of the Corporations Code, and this chapter.
(d) “Corporation” means any California Infrastructure Development Corporation created pursuant to Chapter 1 (commencing with Section 14100) of Part 5.5 of Division 3 of Title 1 of the Corporations Code.
(e) “Directives and requirements” means a document adopted by the bank board setting forth policy direction as well as rules governing a particular subject area.
(f) “Executive director” means the Executive Director of the California Infrastructure and Economic Development Bank.
(g) “Participation rights” means a commitment by the state to use a corporation to deliver infrastructure projects. Participation rights include the right of first refusal to participate in a public/ private partnership project or projects (P3 projects) and if it should choose to participate, a preestablished minimum participation rate in financing the P3 project or projects.
(h) “Program manager” means the manager of the California Infrastructure Development Center as appointed by the executive director of the bank.

Article  3. Purpose

63092.
 The bank shall include the California Infrastructure Finance Center that administers the California Economic Development Infrastructure Act.

Article  4. Administrative Structure

63093.
 (a) (1) The board shall designate one or more private entities which meet the requirements of Article 4 (commencing with Section 14104) of Chapter 1 of Part 5.5 of Division 3 of Title 1 of the Corporations Code as a California Infrastructure Development Corporation.
(2) Upon the approval of the board, the bank may award the participation rights to a California Infrastructure Development Corporation, which meets the criteria in directives and requirements established pursuant to subdivision (f).
(b) (1) A corporation designated by the board may deliver infrastructure projects that have been determined by statute as appropriate for financing through a public-private partnership.
(2) Eligible infrastructure projects shall include goods movement, public transit, solid waste collection and disposal, water treatment and distribution, and defense conversion, as defined in Section 63010.

(2)

(3) The contract shall state the rights and conditions of the agreement. At a minimum, the agreement shall include the right of first refusal to participate in each and all P3 projects the state undertakes during the term of the contract relating to the specific type of infrastructure identified in the contract. The agreement may include, for projects the corporation agrees to participate, a preestablished minimum participation rate (PR) in financing each and all P3 projects.

(3)

(4) No agreement shall be for longer than five years.

(4)

(5) The bank may cancel a contract for fraudulent activity and poor performance as set forth in the directives and requirements adopted pursuant to subdivision (f).
(c) The award of the participation rights shall be reflected as an equity investment by the state in either an individual project or the California Infrastructure Cooperative.
(d) The bank may employ consultants and advisers as may be necessary in its judgment, in connection with the award of the participation rights. Payment for these services shall be reimbursed from fees received from an applicant for designation under this section.
(e) The bank may charge a fee related to the cost of designating and overseeing the act. Payment for consultants and advisors, among other things, shall be reimbursed from fees received from an applicant for designation under this section. Operation costs for the first two years may be borrowed from other resources of the bank and then repaid once corporations are designated and fees become available.

(e)

(f) Section 10295 of, and Article 4 (commencing with Section 10335) of Chapter 2 of Part 2 of Division 2 of, the Public Contract Code do not apply to agreements entered into by the bank in connection with the award of participation rights under this chapter.

(f)

(g) The bank board shall adopt directives and requirements concerning the implementation of this chapter and pursuant to Chapter 1 (commencing with Section 14100) of Part 5.5 of Division 3 of Title 1 of the Corporations Code. These directives and requirements shall include, a process for receiving and reviewing applications and entering into participation a rights agreements which meet the requirements of this section.

(g)

(h) The bank shall annually report on its activities related to the duties and authorities in this section as part of the bank’s annual report, as required in Section 63035.

63094.
 The program manager acting under the guidance of the executive director shall do all of the following:
(a) Administer this chapter.
(b) Require each corporation to submit an annual written plan of operation.
(c) Enter into a participation rights agreements between the bank and a corporation for services to be provided by the corporation to state under this chapter and Chapter 1 (commencing with Section 14100) of Part 5.5 of Division 3 of Title 1 of the Corporations Code.
(d) Act as liaison between corporations, other state and federal agencies, lenders, and the Legislature.

SEC. 3.SEC. 4.

 Section 10295 of the Public Contract Code is amended to read:

10295.
 (a) All contracts entered into by any state agency for (1) the acquisition of goods or elementary school textbooks, (2) services, whether or not the services involve the furnishing or use of goods or are performed by an independent contractor, (3) the construction, alteration, improvement, repair, or maintenance of property, real or personal, or (4) the performance of work or services by the state agency for or in cooperation with any person, or public body, are void unless and until approved by the department. Every contract shall be transmitted with all papers, estimates, and recommendations concerning it to the department and, if approved by the department, shall be effective from the date of the approval.
(b) This section applies to any state agency that by general or specific statute is expressly or impliedly authorized to enter into transactions referred to in this section.
(c) This section does not apply to the following:
(1) Any transaction entered into by the Trustees of the California State University, by the Board of Governors of the California Community Colleges, or by a department under the State Contract Act or the California State University Contract Law.
(2) Any contract of a type specifically mentioned and authorized to be entered into by the Department of Transportation under Section 14035 or 14035.5 of the Government Code, Sections 99316 to 99319, inclusive, of the Public Utilities Code, or the Streets and Highways Code.
(3) Any contract entered into by the Department of Transportation that is not funded by money derived by state tax sources but, rather, is funded by money derived from federal or local tax sources.
(4) Any contract entered into by the Department of Human Resources for state employee benefits, occupational health and safety, training services, or combination thereof.
(5) Any contract let by the Legislature.
(6) Any contract entered into under the authority of Chapter 4 (commencing with Section 11770) of Part 3 of Division 2 of the Insurance Code.
(7) Any contract entered into under the authority of Chapter 7 (commencing with Section 63090) of Division 1 of Title 6.7 of the Government Code. Code for participation rights of an infrastructure development finance corporation.

SEC. 4.SEC. 5.

 Section 10335 of the Public Contract Code is amended to read:

10335.
 (a) This article shall apply to all contracts, including amendments, entered into by any state agency for services to be rendered to the state, whether or not the services involve the furnishing or use of equipment, materials, or supplies or are performed by an independent contractor. Except as provided in Sections 10295.6 and 10351, and paragraphs (8) and (9) of subdivision (b) of Section 10340, all contracts subject to this article are of no effect unless and until approved by the department. Each contract shall be transmitted with all papers, estimates, and recommendations concerning it to the department and, if approved by the department, shall be effective from the date of approval. This article shall apply to any state agency that by general or specific statute is expressly or impliedly authorized to enter into the transactions referred to in this section. This article shall not apply to contracts for the construction, alteration, improvement, repair, or maintenance of real or personal property, contracts for services subject to Chapter 10 (commencing with Section 4525) of Division 5 of Title 1 of the Government Code, to contracts that are listed as exceptions in Section 10295, contracts of less than five thousand dollars ($5,000) in amount, contracts of less than five thousand dollars ($5,000) where only per diem or travel expenses, or a combination thereof, are to be paid, contracts between state agencies, or contracts between a state agency and local agency or federal agency.
(b) In exercising its authority under this article with respect to contracts for the services of legal counsel, other than the Attorney General, entered into by any state agency that is subject to Section 11042 or Section 11043 of the Government Code, the department, as a condition of approval of the contract, shall require the state agency to demonstrate that the consent of the Attorney General to the employment of the other counsel has been granted pursuant to Section 11040 of the Government Code. This consent shall not be construed in a manner that would authorize the Attorney General to establish a separate program for reviewing and approving contracts in the place of, or in addition to, the program administered by the department pursuant to this article.
(c) Until January 1, 2001, the department shall maintain a list of contracts approved pursuant to subdivision (b). This list shall be filed quarterly with the Senate Committee on Budget and Fiscal Review and the Assembly Committee on Budget. The list shall be limited to contracts with a consideration in excess of twenty thousand dollars ($20,000) during the life of the contract and shall include sufficient information to identify the provider of legal services, the length of each contract, applicable hourly rates, and the need for the services. The department shall add a contract that meets these conditions to the list within 10 days after approval. A copy of the list shall be made available to any requester. The department may charge a fee to cover the cost of supplying the list as provided in Section 6253 of the Government Code.
(d) Contracts subject to the approval of the department shall also have the department’s approval for a modification or amendment thereto, with the following exceptions:
(1) An amendment to a contract that only extends the original time for completion of performance for a period of one year or less is exempt. If the original contract was subject to approval by the department, one fully executed copy including transmittal document, explaining the reason for the extension, shall be sent to the legal office of the department. A contract may only be amended once under this exemption.
(2) Contracts let or awarded on the basis of a law requiring competitive bidding may be modified or amended only if the contract so provides or if authorized by the law requiring competitive bidding.
(3) If an amendment to a contract has the effect of giving the contract as amended an increase in monetary amount, or an agreement by the state to indemnify or save harmless any person, the amendment shall be approved by the department.
(4) Notwithstanding subdivision (a), this article shall not apply to a contract entered into pursuant under the authority of Chapter 7 (commencing with Section 63090) of Division 1 of Title 6.7 of the Government Code. Code for participation rights of an infrastructure development finance corporation.

SEC. 5.SEC. 6.

 No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.