Formation and Powers of a Port Infrastructure Financing Authority

Division 6, Part 1, Chapter 2 of the California Harbors and Navigation Code deals with the formation and powers of a port infrastructure financing authority in this state.

Section 1700 provides that any two or more harbor agencies may, pursuant to the joint powers law, establish an authority, separate from the parties to the agreement, for the purpose of establishing an infrastructure fund and financing port or harbor infrastructure pursuant to this part. An authority may be formed as a nonprofit public benefit corporation subject to the nonprofit corporation law for the purpose of establishing an infrastructure fund and financing port or harbor infrastructure pursuant to this part.

Section 1701 requires an authority established to deposit into an infrastructure fund established by the authority all of the specified types of funds.

Section 1702 authorizes an authority to 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.

Section 1703 states that, subject to the terms and conditions determined by an authority that establishes an infrastructure fund, the funds in an infrastructure fund, or any subaccount, may be used for one or more of the four specified purposes.

Section 1704 provides that, 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 law in order to finance or refinance any port or harbor infrastructure or to make deposits into the infrastructure fund or any subaccount.

Section 1705 allows any harbor agency to borrow funds from, or otherwise secure financing through, an authority at the interest rate and other terms and conditions specified in bonds of the harbor agency or obtain a loan, loan purchase, installment purchase, lease, or other agreement between the authority and the harbor agency.

The harbor 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.

Section 1706 states that, before any public funds are allocated pursuant to this part for a privately owned port or harbor infrastructure, approval of the Treasurer is required. And, each authority is required to submit an annual report regarding receipts and expenditures from the infrastructure fund and all financing activities to the Controller and to the California Debt Advisory Commission.