Regarding port authorities, including by allowing port authorities to enter into certain loan agreements and lease contracts

This bill relates to the powers and duties of port authorities. Under Code chapter 28J, the bill modifies the defined terms “authorized purposes”, “city”, “cost”, “facility” or “port authority facility”, “governmental agency”, “political subdivision”, “political subdivisions comprising the port authority”, “port authority revenue bonds” or “revenue bonds”, and “revenues”. The bill creates and defines the terms “net revenues” and “public works project”. The bill allows for the creation of a port authority by one or more political subdivisions, rather than by two or more political subdivisions. The bill provides for the creation of a port authority anywhere in this state regardless of proximity to a body of water. The bill also provides that a port authority is an entity separate from the political subdivisions comprising the port authority. The powers granted to the port authority may be exercised whether or not the political subdivisions comprising the port authority may exercise those same powers. The bill provides that the political subdivisions comprising the port authority may make contributions to the port authority, in addition to appropriating or expending public funds as set forth in current law, to finance or subsidize the operation and authorized purposes of the port authority, and pay the costs and expenses incurred by the port authority in carrying out any operations or authorized purposes of the port authority. Under the bill, political subdivisions comprising the port authority are allowed to enter into agreements with each other or the port authority providing for the contributions to the port authority to be made by each of the political subdivisions and providing for the obligations of each of the political subdivisions to pay, finance, or subsidize the costs and expenses incurred by the port authority.5 relating to the membership of the board of directors of a port authority created by one political subdivision. The bill further provides that any political subdivisions comprising the port authority may appoint a successor for the remaining term of a removed director. The bill modifies the powers of a port authority as it relates to its property regardless of whatever the property is within or outside the territory of the political subdivisions comprising the port authority if in furtherance of any authorized purpose. The bill further allows a port authority to enter into loan agreements and lease contracts, as provided for in the bill, and to exercise the same powers granted to cities under Code chapters 28F (joint financing of public works and facilities) and 384 (city finance). The bill allows a port authority to use its revenues for principal on borrowed money and payments under lease contracts. The bill further provides that a contract regarding rentals or charges for use of services of a port authority may provide for acquisition of the port authority facility subject to the provisions of any resolution authorizing the issuance of port authority revenue bonds, loan agreements, lease contracts, or any trust agreement securing such bonds, loan agreements, or lease contracts. The bill allows a governmental agency to cooperate with the port authority in the operation of a port authority facility. The bill provides that real property that is purchased by a port authority is not subject to certain property taxes. Under the provisions of the bill, a port authority may enter into certain loan agreements and lease contracts. A port authority may enter into loan agreements to borrow money to pay the costs of any facility, or parts thereof, or to refund other obligations which are payable from the net revenues of the port authority at lower, the same, or higher rates of interests. A port authority may enter into lease contracts for real or personal property comprising a port authority facility, but can only lease property for a term that does not exceed the economic life of the property. The bill details certain provisions similar to those in loan agreements and lease contracts between private parties that a loan agreement or lease contract entered into by a port authority may contain. The bill provides certain conditions for when a loan agreement or lease contract stipulates that a portion of the payments be applied as interest. The board of a port authority can authorize a loan agreement or lease contract, along with prescribing additional terms and provisions, by resolution and such resolution becomes part of the loan agreement or lease contract. A loan agreement or lease contract in which a port authority is a party is an obligation of political subdivisions comprising the port authority. A contract for construction by a private party of property to be leased by a port authority is not a contract for public improvement, except under certain conditions. The bill authorizes loan agreements or lease contracts to be secured by a trust agreement between the port authority and a corporate trustee, and further provides how the trust agreement functions. The bill provides that loan agreements and lease contracts authorized by the bill do not constitute a debt, indebtedness, or a pledge of faith and credit of the port authority or of the state or any political subdivisions of the state nor do any such agreements give rise to pecuniary liability as to these entities or act as a charge against the general credit or taxing power of the port authority. The bill provides that any political subdivisions comprising the port authority, the state, or any political subdivisions of the state, and the holders or owners of obligations owed under a loan agreement or lease contract cannot have taxes levied by the state or by a taxing authority of a governmental agency of the state for the payment of the principal of or interest owed on such obligations. Under the bill, the sole remedy for a breach or default of any port authority loan agreement or lease contract authorized by the bill is a proceeding in law or in equity to enforce and compel performance of required duties and the terms of the resolution authorizing the loan agreement or lease contract, or to obtain the appointment of a receiver to take possession and operate the port authority to perform the required duties and terms. An action cannot be brought after days from the time the loan agreement or lease contract is authorized by the port authority if the action regards the legality of the loan agreement or lease contract, the power of the port authority to authorize the loan agreement or lease contract, or the effectiveness of any proceeding relating to the authorization of the loan agreement or lease contract.26.