Code Section Group

Harbors and Navigation Code - HNC

DIVISION 6. HARBORS AND PORTS [1690 - 3980]

  ( Division 6 enacted by Stats. 1937, Ch. 368. )

PART 1. PORT INFRASTRUCTURE FINANCING [1690 - 1719]

  ( Part 1 added by Stats. 1992, Ch. 1235, Sec. 3. )

CHAPTER 3. Seaport Infrastructure Financing Districts [1710 - 1719]
  ( Chapter 3 added by Stats. 2015, Ch. 793, Sec. 11. )

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 state’s significant interest in the successful operation of its seaports and harbors.

(d) The unique nature of the state’s 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 state’s waterborne commerce, enhancing economic prosperity, and financing the costs of environmental mitigation and improvement.

(f) This chapter is intended to maintain and enforce the state’s 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 state’s 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.

(Added by Stats. 2015, Ch. 793, Sec. 11. (SB 63) Effective January 1, 2016.)

1711.
  

As used in this chapter, “public financing authority” has the same meaning as provided in Section 53398.51 of the Government Code.

(Added by Stats. 2015, Ch. 793, Sec. 11. (SB 63) Effective January 1, 2016.)

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.

(Added by Stats. 2015, Ch. 793, Sec. 11. (SB 63) Effective January 1, 2016.)

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 agency’s 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 agency’s 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.

(Added by Stats. 2015, Ch. 793, Sec. 11. (SB 63) Effective January 1, 2016.)

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 state’s 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.

(Added by Stats. 2015, Ch. 793, Sec. 11. (SB 63) Effective January 1, 2016.)

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.

(Added by Stats. 2015, Ch. 793, Sec. 11. (SB 63) Effective January 1, 2016.)

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 district’s 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.

(Added by Stats. 2015, Ch. 793, Sec. 11. (SB 63) Effective January 1, 2016.)

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 arm’s length in recognition of the duties of the harbor agency to effectuate statewide interests.

(Added by Stats. 2015, Ch. 793, Sec. 11. (SB 63) Effective January 1, 2016.)

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 state’s 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 state’s 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.

(Added by Stats. 2015, Ch. 793, Sec. 11. (SB 63) Effective January 1, 2016.)

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.

(Added by Stats. 2015, Ch. 793, Sec. 11. (SB 63) Effective January 1, 2016.)

HNCHarbors and Navigation Code - HNC