Port Infrastructure Financing in California

California’s Harbors and Navigation Code, in Division 6, Part 1, deals with port infrastructure financing. Chapter 1, Article 1 contains legislative fundings and declarations. Section 1690 contains nine findings and declarations.

These include that the state has a compelling interest in the success of its ports and harbors because they provide significant economic benefit to the state in terms of jobs, personal income, business revenue, and taxes. Ports and harbors are the vital interface between water and land transportation for trade with the Pacific Rim countries and other trade.

In addition to port access transportation projects, there is a need for new harbor facilities and infrastructure investments that will enhance California’s competitiveness for international cargoes, grow employment, yield significant economic development, increase state and local tax revenues, and reduce impacts to environmental quality from goods movement.

Also, a mechanism that can be used to finance port and harbor development projects is the enhanced infrastructure financing district. The Legislature empowers local legislative bodies with specific and exclusive delegated authority to manage the state’s ports and harbors by legislative grant and by establishment of special districts pursuant to this code.

Article 2 provides definitions. Section 1691 specifies that the definitions in this article govern the construction of this part.

Section 1692 defines the term “authority. Section 1693 defines the term “bonds.” Section 1694 defines the term “harbor agency.” Section 1695 defines the term “infrastructure fund.” Section 1696 defines the term “joint powers law.” Section 1697 defines the term “member.”

Section 1698 defines the term “port or harbor infrastructure” to include nine specified items.  Also, any port or harbor infrastructure may be privately operated. If a port or harbor infrastructure financed wholly or partly with public funds is privately owned and if the use for which the port or harbor infrastructure was originally constructed changes or is incompatible with the port authority’s master plan, the private owner is required to pay the public agency the percentage of the full appreciated value of the port or harbor infrastructure that was originally financed with public funds.

Section 1699 defines the term “seaport infrastructure financing district.”