SECTIONS 91500-91504 - California Statutes

GOVERNMENT CODE

SECTION 91500-91504

91500. This title may be cited as the California Industrial
Development Financing Act.

91501. The Legislature hereby finds that it is necessary and
essential that the state, in cooperation with the federal government,
use all practical means and measures to promote and enhance economic
development and increase opportunities for useful employment. The
Legislature further finds the alternative method of financing
provided in this title will benefit economically distressed
communities with concentrated unemployment by employing a labor force
from those communities and areas where persons are displaced due to
industrial failures. The Legislature further finds that the
alternative method of financing provided in this title will benefit
economically distressed areas of the state and localities that are
making diligent efforts to maintain and provide services to existing
companies and to prevent the loss of existing jobs. The Legislature
further finds that the alternative method of financing provided in
this title will benefit those projects that would employ persons
living within an economically distressed area, or projects that are
partially funded by the federal government, including, but not
limited to, the United States Department of Labor, the United States
Department of Housing and Urban Development, or the Economic
Development Administration of the United States Department of
Commerce. The Legislature further finds and determines that
businesses within this state that create, produce, or manufacture
tangible goods and require new methods to finance the capital outlays
required to acquire, construct, or rehabilitate facilities,
equipment, and furnishings that will result in an increase in
employment opportunities, the retention of existing jobs, or
otherwise contribute to economic development, and the alternate
method of financing provided in this division is in the public
interest and serves a public purpose and will promote the health,
welfare, and safety of the citizens of the State of California.
The Legislature further finds that regional research and
development facilities are beneficial to the state and the regions
where they are located by providing jobs, contributing to economic
development in the state and the surrounding community, and being a
source of intellectual capital and intangible assets that ultimately
aid California businesses in entering, expanding, and competing in,
world markets.
Therefore, the Legislature finds that research and development
facilities should be designated "permitted activities" under the
state's industrial development bond program.

91502. It is the purpose of this title to carry out and make
effective the findings of the Legislature, and to that end, to
provide business with an alternative method of financing in
acquiring, constructing, or rehabilitating facilities, including, but
not limited to, equipment and furnishings, in accordance with the
criteria set forth in Section 91502.1, all to the mutual benefit of
the people of the state and to protect their health, welfare, and
safety.

91502.1. (a) The Legislature declares that it is the policy of this
state, consistent with environmental, resource conservation, and
other policies, to facilitate for and on behalf of private enterprise
the acquisition of property, either suitable for or evidencing an
obligation respecting any one or more of the activities or uses set
forth in Section 91503, through the issuance of revenue bonds by
authorities in accordance with the criteria set forth in subdivision
(b), and that this additional method of financing when made available
in accordance with that policy serves a public purpose and will
promote the prosperity, health, safety, and welfare of the citizens
of the State of California.
(b) The Legislature declares that the criteria to be utilized to
determine whether this method of financing may be made available
shall include the following:
(1) Whether employment benefits arising out of the use of the
facilities may ensue by securing or increasing (A) the number of
employees of the company and any other direct users of the facilities
or (B) compensation for that employment, the value of which may be
expressed in terms of aggregate direct employment earnings.
(2) Whether energy, mineral or natural or cultivated resource
conservation benefits arising out of the use of the facilities may
ensue by the reduction of waste, improvement of recovery or
intensification of utilization of resources that otherwise would be
less intensively utilized, or wasted, or not recovered, the value of
which may be expressed in terms of the price and amount of the
energy, minerals, or other resources saved or recovered, or the price
and amount of equivalent energy, minerals, or other resources that
would be utilized were the resources not utilized as intensively.
(3) Whether consumer benefits arising out of the use of the
facilities may ensue by any of the following:
(A) Improvement of the quantity or quality or reduction in the
price of products, energy, or related services or facilities, the
value of which may be expressed in terms of quantity and price
differentials.
(B) Production of new or improved products, or related services or
facilities, the value of which may be expressed in terms of quantity
and price.
(C) The transfer of ownership of a business or place of work that
has closed or is in danger of closing, to its employees for the
purpose of formation of an employee-owned corporation, as defined by
subdivision (c).
(4) Whether economic benefits to the surrounding community or
state may ensue.
(c) For purposes of this section, "employee-owned corporation"
means a corporation that is under employee ownership. "Employee
ownership" means the majority ownership of a business in this state
by a majority of its employees under either of the following methods:
(1) Establishment of an Employee Stock Ownership Plan (ESOP)
pursuant to the federal Employee Retirement Income and Security Act
(ERISA). All stock initially issued at the time of formation of the
employee-owned corporation shall be allocated to the employees and
become fully vested within five years of the date the employee-owned
corporation begins operation. Voting rights of the employees are
established in accordance with Section 409A(e) of the Internal
Revenue Code as effective on January 1, 1983.
(2) Establishment of a worker-owned cooperative.

91503. The property acquired pursuant to this article shall be
suitable for, or shall evidence an obligation respecting, certain
activities or uses. The activities or uses shall include one or more
of the activities or uses described in subdivision (a) and, unless
incidental to those activities or uses, shall not include any of the
activities described in, and not excepted from, subdivision (b).
(a) (1) Industrial uses including, without limitation, assembling,
fabricating, manufacturing, processing, or warehousing activities
with respect to any products of agriculture, forestry, mining, or
manufacture, if these activities have demonstrated job creation or
retention potential.
(2) Energy development, production, collection, or conversion from
one form of energy to another.
(3) Research and development activities relating to commerce or
industry, including, without limitation, professional,
administrative, and scientific office and laboratory activities or
uses.
(4) Commercial uses located within an enterprise zone designated
pursuant to Chapter 12.8 (commencing with Section 7070) of Division 7
of Title 1, commercial activities within an empowerment zone and
enterprise community designated pursuant to Section 1391 of the
Internal Revenue Code of 1986, in effect on January 1, 1998,
commercial uses located within a recovery zone designated pursuant to
Section 1401 of the American Recovery and Reinvestment Act of 2009
(Public Law 111-5), or any amendments thereto, or other commercial
needs.
(5) Processing or manufacturing recycled or reused products and
materials by manufacturing facilities.
(6) Business activities with the purpose of creating or producing
intangible property.
(b) (1) Residential real property for family unit or other housing
activities.
(2) Airport, dock, wharf, or mass commuting activities, or storage
or training activities related to any of those activities, unless
the property acquired is suitable for one or more of the activities
described in paragraph (4) of subdivision (a).
(3) Sewage or solid waste disposal activities or electric energy
or gas furnishing activities, unless the property acquired is
suitable for one or more of the activities described in paragraph (2)
or (4) of subdivision (a).
(4) Water furnishing activities, unless the property acquired is
suitable for one or more of the activities described in paragraph (4)
of subdivision (a).
(5) Any activities of persons qualifying as exempt persons under
Section 501 of the Internal Revenue Code of 1986, as amended,
undertaken by those persons, other than activities constituting an
unrelated trade or business as described in Section 513 of that code.

91504. Unless the context otherwise requires, the definitions in
this article shall govern the construction of this title, as follows:
(a) "Acquire" and its variants means acquire, construct, improve,
furnish, equip, repair, reconstruct, or rehabilitate.
(b) "Administration expenses" means the reasonable and necessary
expenses incurred by an authority in the administration of this
title, including, without limitation, fees and costs of paying
agents, trustees, attorneys, consultants, and others.
(c) "Authority" means any industrial development authority
established pursuant to this title.
(d) "Board" means the board of directors of an authority.
(e) "Bonds" means the revenue obligations, inclusive of principal
(premium, if any) and interest authorized to be issued by any
authority pursuant to this title, including a single bond, a
promissory note or notes, including bond anticipation notes, or other
instruments evidencing an indebtedness or obligation.
(f) "Bond proceeds" means all amounts received by an authority
upon sale or other disposition of any bonds.
(g) "Commission" means the California Industrial Development
Financing Advisory Commission established pursuant to Article 3
(commencing with Section 91550).
(h) "Company" means a person, partnership, corporation, whether
for profit or not, limited liability company, trust, or other private
enterprise of whatever legal form, for which a project is undertaken
or proposed to be undertaken pursuant to this title or which is in
possession of property owned by an authority, and may include more
than a single enterprise.
(i) "Cost" as applied to any project, may embrace:
(1) The cost of construction, improvement, repair, rehabilitation,
and reconstruction.
(2) The cost of acquisition, including rights in land and other
property, both real and personal and improved and unimproved, and
franchises, and disposal rights.
(3) The cost of demolishing, removing, or relocating any building
or structures on lands so acquired, including the cost of acquiring
any lands to which the buildings or structures may be moved or
relocated.
(4) The cost of machinery, equipment and furnishings, of
engineering and architectural surveys, plans, and specifications, and
of transportation and storage until the facility is operational.
(5) The cost of agents or consultants, including, without
limitation, legal, financial, engineering, accounting, and auditing,
necessary or incident to a project and of the determination as to the
feasibility or practicability of undertaking the project.
(6) The cost of issuance of any bonds and of financing, interest
prior to, during, and for a reasonable period after completion of a
project, and reserves for principal and interest and for extensions,
enlargements, additions, repairs, replacements, renovations,
rehabilitations, and improvements.
(7) The cost of acquiring or refinancing existing obligations
incident to the undertaking and carrying out, including the
financing, of a project, and the reimbursement to any governmental
entity or agency, or any company, of expenditures made by or on
behalf of the entity, agency, or company that are costs of the
project hereunder, without regard to whether or not the expenditures
may have been made before or after the adoption of a resolution of
intention with respect to that project by an authority.
(8) The cost of making relocation assistance payments as provided
by Chapter 16 (commencing with Section 7260) of Division 7 of Title
1.
(9) In the case only of taxable bonds, the cost of refunding or
refinancing any outstanding debt or obligations with respect to any
facilities, or the cost of any other working capital.
(10) Except as provided in paragraph (9), "cost" does not
otherwise include working capital.
(j) "Facilities" mean property suitable for any one or more of the
activities or uses described in Section 91503 and includes
incidental facilities.
(k) "Governing body" means the board of supervisors, city council,
or board of directors of a redevelopment agency, as the case may be.
(l) "Indenture" means any mortgage, deed of trust, trust
indenture, security agreement, or other instrument relating to
establishing a lien or security interest in, or on, property, any
pledge or other instrument relating to the possession of property,
and any assignment or other instrument relating to establishing any
right, title, or interest in, or related to, property, including the
revenues therefrom, given by an authority to a corporate trustee,
which may be any trust company or bank having the powers of a trust
company within or without the state, or bondholder or agent, for the
security of its bonds and the benefit of the bondholders.
(m) "Proceedings" means the actions taken by an authority in
undertaking, carrying out, and completing a project, including,
without limitation, the project agreements, indenture, bonds, and
resolutions.
(n) "Project" means the acquisition, construction, improvement,
repair, rehabilitation, and reconstruction of facilities and the
acquisition and rehabilitation of machinery, equipment, and
furnishings, and the acquisition of engineering and architectural
surveys, plans, and specifications, and all other necessary and
related capital expenditures by the issuance of bonds upon the
application of and to be repaid by payments from a company for the
purposes of this title.
(o) "Project agreements" means the agreements between an authority
and a company respecting a project, and may include, without
limitation, leases, subleases, options, and installment or other
contracts of purchase or sale, loan, or guaranty agreements, notes,
mortgages, deeds of trust, and security agreements.
(p) "Property" means any land, air rights, water rights, disposal
rights, improvements, buildings or other structures, and any personal
property, tangible or intangible, and includes, but is not limited
to, machinery and equipment, whether or not in existence or under
construction, and interests in any of the foregoing, or promissory
notes or other obligations of any kind respecting such interests.
(q) "Public agency" means any county, city and county, city, or
redevelopment agency.
(r) "Revenues" means all rents, purchase payments, and other
income derived by an authority from, or with respect to, the sale,
lease, or other voluntary or involuntary disposition of, or repayment
of loans with respect to, property, bond proceeds, and any receipts
derived from the deposit or investment of any such income or proceeds
in any fund or account of an authority, but does not include
receipts designated to cover administration expenses.
(s) "Tax-exempt" means, with respect to any bonds, that the
interest on the bonds is excluded from gross income of the holders
thereof for federal income tax purposes.
(t) "Taxable" means, with respect to any bonds, that the bonds are
not tax-exempt.