Bill Text: CA AB639 | 2019-2020 | Regular Session | Introduced
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: California Workforce Development Board: port automation and climate change.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Passed) 2020-09-24 - Chaptered by Secretary of State - Chapter 116, Statutes of 2020. [AB639 Detail]
Download: California-2019-AB639-Introduced.html
Bill Title: California Workforce Development Board: port automation and climate change.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Passed) 2020-09-24 - Chaptered by Secretary of State - Chapter 116, Statutes of 2020. [AB639 Detail]
Download: California-2019-AB639-Introduced.html
CALIFORNIA LEGISLATURE—
2019–2020 REGULAR SESSION
| Assembly Bill | No. 639 |
| Introduced by Assembly Member Cervantes |
February 15, 2019 |
An act to amend Section 63025.1 of the Government Code, and to add Chapter 4 (commencing with Section 1719.1) to Part 1 of Division 6 of the Harbors and Navigation Code, relating to harbors and ports.
LEGISLATIVE COUNSEL'S DIGEST
AB 639, as introduced, Cervantes.
Financing Lower Carbon Emissions: seaports.
Existing law authorizes the formation of a seaport infrastructure financing district to finance port or harbor infrastructure projects. Existing law requires that a harbor agency, as defined, prepare an infrastructure financing plan as part of a proposal to form a seaport infrastructure financing district, and requires that the plan meet specified requirements. Existing law authorizes a seaport infrastructure financing district to fund infrastructure projects through tax increment financing, consistent with the infrastructure financing plan and with the agreement of the new seaport infrastructure financing district’s affected taxing entities.
Existing law, the Bergeson-Peace Infrastructure and Economic Development Bank Act, establishes the Infrastructure and Economic Development Bank within the Governor’s Office of Business and Economic
Development, and requires the bank to establish criteria, priorities, and guidelines for the selection of projects to receive financial assistance from the bank, including, but not limited to, any combination of grants, loans, and the proceeds of bonds issued by the bank.
This bill would require the bank, after consulting with appropriate state and local agencies, to establish criteria, priorities, and guidelines for the receipt and review of applications and determining the accuracy of estimates of the future financial value of proposed projects for the purchase and installation of equipment submitted by harbor agencies, as defined, for assistance from the bank to finance projects that will reduce carbon emissions at seaports, as specified. The bill would require the harbor agency to set forth specified information regarding the state fiscal and economic impacts that will result from the proposed infrastructure development or equipment purchase project. The bill
would require the bank to approve the infrastructure development and equipment purchase project if the bank finds that the project is more likely than not to result in the harbor agency’s estimated state fiscal and economic impacts. The bill would authorize the bank to require the harbor agency to meet a specified condition prior to providing the moneys appropriated by the Legislature for the infrastructure development and equipment purchase project.
Digest Key
Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NOBill Text
The people of the State of California do enact as follows:
SECTION 1.
The Legislature finds and declares all of the following:(a) The primary purpose of this act is to encourage California’s public agencies to update infrastructure and processes in a manner that will result in lower carbon emissions.
(b) It is in the statewide interest to continually invest in California’s infrastructure to provide financial assistance for public infrastructure and economic development facilities, including public seaports, to support the state’s economic growth and economy by directly or indirectly employing millions of Californians, contributing billions of dollars in economic activity, and generating significant local and state tax revenues as a result
of this activity.
(c) In addition to supporting economic growth, the upgrading and modernizing of California’s infrastructure offers an important opportunity to reduce carbon emissions from both stationary and nonstationary sources. In consideration of these environmental matters, the state has a paramount interest in creating market incentives and mechanisms that will precipitate ongoing investments in the newest generation of equipment and provide support for infrastructure. Due to the costs of those investments over and above the costs for the use of traditional equipment, legislation is needed to provide for infrastructure that cannot be funded by private investment alone. Therefore, the implementation of public financing mechanisms and the creation of public-private partnerships are needed to support new infrastructure investment in the state.
SEC. 2.
Section 63025.1 of the Government Code is amended to read:63025.1.
The bank board may do or delegate the following to the executive director:(a) Sue and be sued in its own name.
(b) As provided in Chapter 5 (commencing with Section 63070), issue bonds and authorize special purpose trusts to issue bonds, including, at the option of the board, bonds bearing interest that is taxable for the purpose of federal income taxation, or borrow money to pay all or any part of the cost of any project, or to otherwise carry out the purposes of this division.
(c) Engage the services of private consultants to render professional and technical assistance and advice in carrying out the purposes of
this division.
(d) Employ attorneys, financial consultants, and other advisers as may, in the bank’s judgment, be necessary in connection with the issuance and sale, or authorization of special purpose trusts for the issuance and sale, of any bonds, notwithstanding Section 11042 and 11043. Section 11042.
(e) Contract for engineering, architectural, accounting, or other services of appropriate state agencies as may, in its judgment, be necessary for the successful development of a project.
(f) Pay the reasonable costs of consulting engineers, architects, accountants, and construction, land use, recreation, and environmental
experts employed by any sponsor or participating party if, in the bank’s judgment, those services are necessary for the successful development of a project.
(g) Acquire, take title to, and sell by installment sale or otherwise, lands, structures, real or personal property, rights, rights-of-way, franchises, easements, and other interests in lands that are located within the state, or transition property as the bank may deem necessary or convenient for the financing of the project, upon terms and conditions that it considers to be reasonable.
(h) Receive and accept from any source including, but not limited to, the federal government, the state, or any agency thereof, loans, contributions, or grants, in money, property, labor, or other things of value, for, or in aid of, a project, or any portion thereof.
(i) Make
loans to any sponsor or participating party, either directly or by making a loan to a lending institution, in connection with the financing of a project in accordance with an agreement between the bank and the sponsor or a participating party, either as a sole lender or in participation with other lenders. However, no loan shall exceed the total cost of the project as determined by the sponsor or the participating party and approved by the bank.
(j) Make loans to any sponsor or participating party, either directly or by making a loan to a lending institution, in accordance with an agreement between the bank and the sponsor or participating party to refinance indebtedness incurred by the sponsor or participating party in connection with projects undertaken and completed prior to any agreement with the bank or expectation that the bank would provide financing, either as a sole lender or in participation with other lenders.
(k) Mortgage all or any portion of the bank’s interest in a project and the property on which any project is located, whether owned or thereafter acquired, including the granting of a security interest in any property, tangible or intangible.
(l) Assign or pledge all or any portion of the bank’s interests in transition property and the revenues therefrom, or assets, things of value, mortgages, deeds of trust, bonds, bond purchase agreements, loan agreements, indentures of mortgage or trust, or similar instruments, notes, and security interests in property, tangible or intangible and the revenues therefrom, of a sponsor or a participating party to which the bank has made loans, and the revenues therefrom, including payment or income from any interest owned or held by the bank, for the benefit of the holders of bonds.
(m) Make, receive, or serve as a conduit for the making of, or otherwise provide for, grants, contributions, guarantees, insurance, credit enhancements or liquidity facilities, or other financial enhancements to a sponsor or a participating party as financial assistance for a project.
(n) Lease the project being financed to a sponsor or a participating party, upon terms and conditions that the bank deems proper but shall not be leased at a loss; charge and collect rents therefor; terminate any lease upon the failure of the lessee to comply with any of the obligations thereof; include in any lease, if desired, provisions that the lessee shall have options to renew the lease for a period or periods, and at rents determined by the bank; purchase any or all of the project; or, upon payment of all the indebtedness incurred by the bank for the financing of the project, the bank may convey any or all of the project to the lessee or
lessees.
(o) Charge and equitably apportion among sponsors and participating parties the bank’s administrative costs and expenses incurred in the exercise of the powers and duties conferred by this division.
(p) Issue, obtain, or aid in obtaining, from any department or agency of the United States, from other agencies of the state, or from any private company, any insurance or guarantee to, or for, the payment or repayment of interest or principal, or both, or any part thereof, on any loan, lease, or obligation or any instrument evidencing or securing the same, made or entered into pursuant to this division.
(q) Notwithstanding any other provision of this division, enter into any agreement, contract, or any other instrument with respect to any insurance or guarantee; accept payment in the manner and form as provided
therein in the event of default by a sponsor or a participating party; and issue or assign any insurance or guarantee as security for the bank’s bonds.
(r) Enter into any agreement or contract, execute any instrument, and perform any act or thing necessary or convenient to, directly or indirectly, secure the bank’s bonds, the bonds issued by a special purpose trust, or a sponsor’s obligations to the bank or to a special purpose trust, including, but not limited to, bonds of a sponsor purchased by the bank or a special purpose trust for retention or sale, with funds or moneys that are legally available and that are due or payable to the sponsor by reason of any grant, allocation, apportionment apportionment, or appropriation of the state or agencies
thereof, to the extent that the Controller shall be the custodian at any time of these funds or moneys, or with funds or moneys that are or will be legally available to the sponsor, the bank, or the state or any agencies thereof by reason of any grant, allocation, apportionment, or appropriation of the federal government or agencies thereof; and in the event of written notice that the sponsor has not paid or is in default on its obligations to the bank or a special purpose trust, direct the Controller to withhold payment of those funds or moneys from the sponsor over which it is or will be custodian and to pay the same to the bank or special purpose trust or their assignee, or direct the state or any agencies thereof to which any grant, allocation, apportionment apportionment, or appropriation of the federal government
or agencies thereof is or will be legally available to pay the same upon receipt by the bank or special purpose trust or their assignee, until the default has been cured and the amounts then due and unpaid have been paid to the bank or special purpose trust or their assignee, or until arrangements satisfactory to the bank or special purpose trust have been made to cure the default.
(s) Enter into any agreement or contract, execute any instrument, and perform any act or thing necessary, convenient, or appropriate to carry out any power expressly given to the bank by this division, including, but not limited to, agreements for the sale of all or any part, including principal, interest, redemption rights rights, or any other rights or obligations, of bonds of
the bank or of a special purpose trust, liquidity agreements, contracts commonly known as interest rate swap agreements, forward payment conversion agreements, futures or contracts providing for payments based on levels of, or changes in, interest rates or currency exchange rates, or contracts to exchange cash-flows cashflows or a series of payments, or contracts, including options, puts or calls to hedge payments, rate, spread, currency exchange, or similar exposure, or any other financial instrument commonly known as a structured financial product.
(t) Purchase, with the proceeds of the bank’s bonds, transition property or bonds issued by, or for the benefit of, any sponsor in connection with a project, pursuant to a bond purchase agreement or otherwise.
Bonds or transition property purchased pursuant to this division may be held by the bank, pledged or assigned by the bank, or sold to public or private purchasers at public or negotiated sale, in whole or in part, separately or together with other bonds issued by the bank, and notwithstanding any other provision of law, may be bought by the bank at private sale.
(u) Enter into purchase and sale agreements with all entities, public and private, including state and local government pension funds, with respect to the sale or purchase of bonds or transition property.
(v) Invest any moneys held in reserve or sinking funds, or any moneys not required for immediate use or disbursement, in obligations that are authorized by law for the investment of trust funds in the custody of the Treasurer.
(w) Authorize a special purpose
trust or trusts to purchase or retain, with the proceeds of the bonds of a special purpose trust, transition property or bonds issued by, or for the benefit of, any sponsor in connection with a project or issued by the bank or a special purpose trust, pursuant to a bond purchase agreement or otherwise. Bonds or transition property purchased pursuant to this title may be held by a special purpose entity, pledged or assigned by a special purpose entity, or sold to public or private purchasers at public or negotiated sale, in whole or in part, with or without structuring, subordination subordination, or credit enhancement, separately or together with other bonds issued by a special purpose trust, and notwithstanding
any other provision of law, may be bought by the bank or by a special purpose trust at private sale.
(x) Approve the issuance of any bonds, notes, or other evidences of indebtedness by the Rural Economic Development Infrastructure Panel, established pursuant to Section 15373.7.
(y) Approve the issuance of rate reduction bonds by an entity other than the bank or a special purpose trust to acquire transition property upon approval of the transaction in 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.
(z) Apply for and accept subventions, grants, loans, advances, and contributions from any source of money, property, labor, or other things of value. The sources may include bond proceeds,
dedicated taxes, state appropriations, federal appropriations, federal grant and loan funds, public and private sector retirement system funds, and proceeds of loans from the Pooled Money Investment Account.
(aa) Do all things necessary and convenient to carry out its purposes and exercise its powers, provided, however, that nothing herein shall be construed to authorize the bank to engage directly in the business of a manufacturing, industrial, real estate development, or nongovernmental service enterprise. Further, the bank shall not be organized to accept deposits of money for time or demand deposits or to constitute a bank or trust company.
(ab) Do all things necessary and convenient to carry out the bank’s duties associated with Chapter 4 (commencing with Section 1719.1) of Part 1 of Division 6
of the Harbors and Navigation Code.
SEC. 3.
Chapter 4 (commencing with Section 1719.1) is added to Part 1 of Division 6 of the Harbors and Navigation Code, to read:CHAPTER 4. Financing Lower Carbon Emissions at Seaports
1719.1
It is the intent of the Legislature that seaport infrastructure financing be developed pursuant to this chapter in a manner that improves public port assets, infrastructure, and operations, and achieves the public goals of improving the state’s waterborne commerce, enhancing economic prosperity, and financing the costs of environmental mitigation and improvement.1719.2.
(a) For purposes of this chapter, the following terms have the following meanings:(1) “Bank” means the Infrastructure and Economic Development Bank, as established pursuant to Section 63021 of the Government Code.
(2) “Commission” means the State Lands Commission.
(3) “Department” means the Department of Finance.
(4) “Proposed project valuation” means the economic impact of the proposed infrastructure development or equipment purchase, as demonstrated through an economic impact report, as determined by the requirements of this chapter and the
criteria, priorities, and guidelines adopted by the bank.
(5) “Project” has the same meaning as defined in subdivision (p) of Section 63010 of the Government Code, and includes the purchase and installation of equipment.
(b) Unless the context otherwise requires, the definitions in this section shall govern the construction of this chapter. The definitions provided in this section shall apply to this chapter only and not to any other part or chapter of this division.
1719.3.
(a) After consulting with the appropriate state and local agencies, the bank shall establish criteria, priorities, and guidelines for receiving and reviewing applications and determining the accuracy of the economic impact report’s estimate of the future financial value of an applicant’s proposed project, including, but not limited to, the development of infrastructure or the purchase and installation of equipment that results in a reduction of carbon emissions at seaports.(b) When the bank establishes or makes changes to the criteria, priorities, and guidelines, the bank shall notify the Governor, the appropriate fiscal and policy committees of the Legislature that exercise oversight of the bank, and the appropriate state and local
agencies.
1719.4.
The bank may accept applications for a proposed project valuation consistent with the criteria, priorities, and guidelines adopted by the board pursuant to Section 1719.3. At a minimum, the application shall include all of the following information:(a) The proposed infrastructure development or equipment purchases that are the subject of the proposed project valuation.
(b) The state fiscal and economic impacts estimates required pursuant to Section 1719.5.
(c) (1) (A) If the harbor agency is acting on trust lands granted to the harbor agency, a finding by the harbor agency that the project to
be financed is consistent with the state tidelands and any terms and conditions set forth in the grant of trust lands to the harbor agency. The harbor agency shall forward a copy of this finding to the commission.
(B) Prior to making a finding pursuant to subparagraph (A), the harbor agency shall consult with the commission and reimburse the commission for all reasonable expenses resulting from that consultation.
(2) If the harbor agency was formed pursuant to this code, a finding by that harbor agency that the project to be financed is consistent with its charter and the statewide interests with regard to the operation of harbors and ports.
1719.5.
(a) A harbor agency shall set forth the state fiscal and economic impacts that will result from the proposed project, including, but not limited to, the following:(1) The total direct and indirect state tax revenues generated by the impact of the infrastructure development or equipment purchase.
(2) The total direct and indirect state General Fund and special fund expenditure savings generated by the impact of the infrastructure development or equipment purchase.
(3) The total local tax and user fee revenues generated by the infrastructure development or equipment purchase.
(4) The total jobs created by the infrastructure development or equipment purchase, including the specific impact of the financing on the employment of residents.
(5) The total direct and indirect public health savings generated by the infrastructure development or equipment purchase.
(b) (1) The estimates of the state fiscal and economic impacts shall be based on an economic impact report that, among other criteria that may be established by the bank, shall be completed by an economist not in the direct employment of the harbor agency and be based on a nationally recognized economic impact methodology.
(2) The economic impact report and the economic methodology required pursuant to paragraph (1) shall be peer reviewed and evaluated
by an independent party who is without any financial association with the economist who completed the economic impact report and developed the economic methodology. The peer review shall evaluate the adequacy of the economic impact report and make specific recommendations regarding the methodologies, which shall be either incorporated into the economic impact report or submitted as additional information in the application to the bank.
(c) Participation in the proposed project valuation program established in this chapter is voluntary on the part of the harbor agency and the submission of an application to the bank is a discretionary act.
1719.6.
(a) Upon the receipt of a proposed project valuation, the bank shall approve, require a modification of, or deny the proposed project valuation within 60 calendar days.(b) (1) The bank shall approve a proposed project valuation if, after conducting its own review of a harbor agency’s application, including the economic impact report and methodology, it can make the finding that the execution of the project is more likely than not to result in the outcomes projected by the harbor agency pursuant to Section 1719.5.
(2) Based on the approved project valuation, the bank shall adopt a resolution approving funding, subject to an appropriation, as required in
Section 1719.11, of 75 percent of the project valuation or 50 percent of the cost of the project, whichever is less.
(3) The bank shall not approve a proposed project valuation if the commission objects to a finding made by a harbor agency pursuant to paragraph (1) of subdivision (c) of Section 1719.4.
1719.10.
(a) The bank shall provide notice to the department within 30 days of approving a proposed project valuation and adoption of the resolution pursuant to paragraph (2) of subdivision (b) of Section 1719.6. The notice shall include, at a minimum, the dollar amount of the valuation, the amount of funding approved in the resolution, and any other information requested by the department.(b) The department shall either include an amount equal to the approved funding amount of the appropriation for the California Infrastructure and Economic Development Bank Fund, created pursuant to Section 63050 of the Government Code, in the Governor’s proposed annual budget or submit a budget change proposal, whichever puts the funding request before the
Legislature most expeditiously.
1719.11.
(a) The bank shall remit funding to the harbor agency only upon an appropriation by the Legislature of moneys for that purpose.(b) For the harbor agency to receive the remittance pursuant to subdivision (a), the bank may require the harbor agency to demonstrate it has sufficient resources to complete the infrastructure development project or install the equipment purchase.
(c) The bank shall prepare a report on its activities related to this chapter and post that report on its Internet Web site. That report may be included as part of the bank’s annual report.
1719.12.
The harbor agency shall reimburse the administrative expenses or direct operating expenses that are incurred by the bank as the direct result of the review and processing of the proposed financing of a project pursuant to this chapter.1719.14.
(a) All permanent fixtures and capital improvements to the real property of a harbor agency that administers public trust tidelands financed pursuant to this chapter shall be a trust asset of the state once completed. This does not apply to fixtures and improvements otherwise agreed as nonpermanent in a lease between the harbor agency and a private tenant.(b) Nothing in this chapter shall prohibit a harbor agency from submitting a proposed project valuation for a project on behalf of a tenant or for the purchase of equipment to be owned and operated by a tenant, if the assets are owned, maintained, and used exclusively in California and, upon the cessation of the lease, ownership and control of the assets shall revert to the harbor agency on
terms enforceable by contract between the harbor agency and the tenant.
