BILL ANALYSIS
AB 1009
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 1009 (V. Manuel Perez)
As Amended September 4, 2009
2/3 vote. Urgency
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|ASSEMBLY: | |(June 1, 2009) |SENATE: |30-6 |(October 14, |
| | | | | |2009) |
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(vote not relevant)
Original Committee Reference: J.,E.D. & E.
SUMMARY : Modifies statute related to the California Debt Limit
Allocation Committee (CDLAC) and California Industrial
Development Financing Advisory Commission (CIDFAC) to allow
these entities to allocate, issue, and collect data on the new
types of bonds authorized under the American Recovery and
Reinvestment Act of 2009 (ARRA).
The Senate amendments delete the prior contents of this bill,
and instead:
1)Exclude bonds authorized pursuant to ARRA from the state
ceiling on the aggregate amount of private activity bonds that
may be annually issued.
2)Authorize CDLAC to reallocate any unused ARRA related bond
authority.
3)Require CIDFAC review submissions from industrial development
authorities as to whether proposed projects comply with ARRA.
CIDFAC is also required to provide specified technical
assistance to state and local entities which issue bonds
pursuant to the Industrial Development Bond Act.
4)Authorize CIDFAC to establish reserve funds and to provide
financial assistance to businesses on behalf of issuers. The
reserves may be established and replenished from federal,
state, and nonprofits agencies, as specified.
5)Conform the eligible uses of industrial development bonds to
include those authorized under ARRA including, but not limited
to, commercial uses within a recovery zone; business
activities with the purpose of creating or producing
AB 1009
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intangible property; or certain airports docks, wharfs,
storage, training, or mass commuting facilities within a
recovery zone, enterprise community, enterprise zone, or
empowerment zone that is suitable for a commercial purpose, as
specified.
6)Expand the definition of an eligible project that can be
funded with private activity bonds from simply the acquisition
of facility to also include the construction, improvement,
rehabilitation, and reconstruction of a facility; the
acquisition or rehabilitation of machinery, equipment, and
furnishings; the acquisition of engineering and architectural
surveys, plans, and specifications; and all other necessary
and related capital expenditures.
7)Expand the criteria used by CIDFAC in determining whether a
public purpose exists and that the project is, therefore
eligible for financing from a private activity bond to include
an assessment of the economic benefits to the surrounding
community or state.
8)Authorize an industrial development authority to pay all or a
portion of the cost to issue industrial development bonds.
This will help to lower the cost of funds to business.
9)Make other technical and conforming changes
10)Add an urgency clause, allowing this bill to take effect
immediately upon enactment.
AS PASSED BY THE ASSEMBLY , this bill authorized the
establishment of a direct loan program for the purpose of
providing loans to qualified small businesses.
FISCAL EFFECT : According to the Senate Committee on
Appropriations, pursuant to Senate Rule 28.8, negligible fiscal
impact.
COMMENTS : AB 1009 is sponsored by the California State
Treasurer and is intended to update California law in order to
best leverage new federal bonding authority.
The federal stimulus legislation made 30 tax changes that were
intended to provide relief to the American taxpayer and spur job
growth. Among other economic recovery tools, ARRA established
AB 1009
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the Recovery Zone Bond and Qualified Energy Conservation Bond.
Authority for issuing these bonds sunsets on December 31, 2010.
Recovery Zone Bonds include both a public and private purpose
component: Economic Development Bonds, referred to as RZ-EDBs,
provide financing for economic development related public
infrastructure. Economic Development Facility Bonds, referred
to as RZ-FCs provide financing for business development costs
generally bore by the business. Together, the Recovery Zone
Bonds offer a lower-cost finance option for key components of
local economic activity, job training, and educational programs.
The Qualified Energy Conservation Bonds finance projects that
reduce energy consumption including automotive battery
technologies that reduce reliance on fossil fuel, renewable
energy resources and green community programs.
This new ARRA bond authority is limited to financing projects
that are "ready to go" in calendar years 2009 and 2010.
California has, by far, received the highest allocations of this
new bond authority. The nationwide volume cap for the RZ-EDBs
is $10 billion and RZ-FCs is $15 billion, with approximately
$806 million of RZ-EDB and $1.21 billion of RZ-FCs going to
California's cities and counties. California's allocation of
the Qualified Energy Conservation Bonds is $381 million of the
$3.2 billion nationwide volume cap.
Analysis Prepared by : Toni Symonds / J., E.D. & E. / (916)
319-2090
FN: 0003454