BILL ANALYSIS Ó
AB 700
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Date of Hearing: May 27, 2011
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 700 (Blumenfield) - As Amended: May 10, 2011
Policy Committee: JEDE Vote:5-0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill recasts the California Infrastructure and Economic
Development Bank (I-Bank) as an independently administered
entity. Specifically, this bill:
1)Establishes the I-Bank in state government and removes the
Secretary of the Business, Transportation and Housing Agency
(BTH) as board chair and names the Director of Finance, or
designee, as the chair.
2)Requires the I-Bank to adopt a set of two-year goals and
measurable objects, as specified.
3)Authorizes the I-Bank to coordinate state infrastructure
financing and underwrite project financing.
FISCAL EFFECT
The I-Bank will incur additional administrative costs of
approximately $100,000 to meet the requirements of AB 700.
COMMENTS
1)Purpose . According to the author's statement: "AB 700 will
improve the organizational structure of the Infrastructure and
Economic Development Bank of California (I-Bank) in order to
enhance its efficiency and bring the Bank in line with
California's top infrastructure priorities. By establishing
the I-Bank as an independent agency, the I-Bank will work more
directly with the Governor, develop its annual budget and
submit it to the I-Bank board, the Governor's Office and then
to the Legislature, thus ensuring maximum efficiency and
AB 700
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expertise. By making these organizational changes the I-Bank
will be better able to assist the state in advancing
infrastructure projects of state and regional significance.
2)Support. Supporters argue that AB 700 will strengthen the
I-Bank program. They assert that moving it out of the agency
structure will allow it to respond more swiftly and use its
resources more effectively.
3)Background . BTH is the state agency responsible for the
oversight and coordination of the activities of various
departments, offices, and economic development programs, with
responsibility for maintaining the strength and efficiency of
California's infrastructure and financial markets. These
programs provide financial and programmatic regulation
important to the economic marketplace, community development
and the safe and efficient flow of commerce. Among the key
economic development programs overseen by BTH are:
a) The Small Business Direct Loan and Guarantee Programs
b) The I-Bank
c) Technology-related programs
d) California International Trade Promotion Activities
e) Community Development Block Grant Program.
1)The I-Bank. I-Bank activities are governed by a five-member
board of directors comprised of the BTH Secretary (chair),
State Treasurer, Director Department of Finance, Secretary of
the State and Consumer Services Agency and a governor's
appointee. The day-to-day operations of the I-Bank are
directed by the Executive Director who is an appointee of the
governor and is subject to confirmation by the California
State Senate. Currently, the I-Bank has authority for 24
staff members.
The I-Bank is financed through the California Infrastructure
and Economic Development Bank Fund (CIEDB Fund) and the
California Infrastructure Guarantee Trust Fund, into which
fees, interest income and other revenues are deposited and
from which I-Bank expenses are paid. The cost of
administering the programs of the I-Bank is off-set by these
types of program income. Monies in these Funds are held
within the California State Treasury or by the bond trustee
for The Infrastructure State Revolving Fund (ISRF) bonds.
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2)There is no registered opposition to this bill.
Analysis Prepared by : Roger Dunstan / APPR. / (916) 319-2081