Amended in Assembly March 21, 2013

California Legislature—2013–14 Regular Session

Assembly Bill No. 495

Introduced by Assembly Member Campos

February 20, 2013

An act begin insert to add Article 6 (commencing with Section 12099.1) to Chapter 1.6 of Part 2 of Division 3 of Title 2 to end insert begin insert the Government Code, end insert relating to begin delete the California Fund end delete begin insert Community investment end insert .

LEGISLATIVE COUNSEL’S DIGEST

AB 495, as amended, Campos. begin delete The California Fund. end delete begin insert Community investment. end insert

Existing law authorizes the Governor’s Office of Business and Economic Development to, among other things, advance statewide economic goals.

begin insert This bill would establish the California Community Investment Initiative within the Governor’s Office of Business and Economic development. The initiative would be governed by a 13 member oversight board comprised of 6 citizens appointed by the Governor, 4 members of the Legislature, the Treasurer, the Controller, and the Secretary of the Business, Consumer Services, and Housing Agency, as specified. end insert

begin insert

The initiative would be required to create an inventory of low-income neighborhoods, public interments, state and local programs, and sources of public-sector finance, coordinate public-sector financial investment and public programs to assist low-income communities to become business, development, and investment ready, develop criteria for determining the type of economically, socially, and environmentally responsible businesses and real estate developments to assist in starting-up, locating, and growing in low-income neighborhoods, establish a broad array of incentives to encourage responsible businesses and real estate developments to grow in low income neighborhoods and to encourage investment in low income neighborhoods, assist with formulating Community Development Strategies with associated Zoning and Area Plans, report annually to the Legislature and the Governor on whether the initiative has met the criteria established for measuring the economic, social, and environmental returns, and establish the California Community Investment Network, as specified.

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This bill would also make legislative findings and declarations.

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This bill would state the intent of the Legislature to establish the California Fund, a socially responsible investment fund sponsored by the state, to encourage investment in historically underserved communities and, via these investments, to further encourage additional development activities of scale within these communities.

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Vote: majority. Appropriation: no. Fiscal committee:  begin delete no end delete begin insert yes end insert . State-mandated local program: no.

The people of the State of California do enact as follows:

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begin insert SECTION 1. end insert   

end insert

begin insert This act shall be known and may be cited as the end insert
begin insert California Community Investment Initiative end insert begin insert . end insert

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begin insert SEC. end insert begin insert 2 end insert begin insert . end insert   

end insert

begin insert The Legislature finds and declares all of the following: end insert

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(a) Despite having the largest state economy in the United
States, California has the highest poverty rate of any state, with
nearly a quarter of its residents living in poverty.

end insert begin insert

(b) In this era of public budget constraints, public-sector dollars
are insufficient to solve the problems of low-income neighborhoods.
Therefore, private-sector market forces need to be engaged to
make substantial investments that produce a risk adjusted market
rate of return.

end insert begin insert

(c) Low-income neighborhoods constitute domestic emerging
markets with significant purchasing power and location
efficiencies, but suffer from social, public safety, broadband, and
physical infrastructure problems that contribute to market
prejudices that lead to disinvestment.

end insert begin insert

(d) To overcome these problems and market prejudices,
low-income neighborhoods need to become business, development,
and investment-ready through a partnership of government,
private-sector, community, and the environmental leaders focused
on generating coordinated, focused, effective human services,
public safety, broadband, workforce, education, and physical
infrastructure.

end insert begin insert

(e) A new class of business and real estate developments are
emerging that are actively pursuing economically, socially, and
environmentally responsible outcomes.

end insert begin insert

(f) Businesses and real estate developments of this type that are
helping to reduce poverty and improve the social and
environmental dynamics of low-income neighborhoods can benefit
from coordinated state assistance.

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(g) Many of these neighborhoods are at transit hubs or have
the transit and mixed-use characteristics in place to make
development in them more climate friendly than development
elsewhere.

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(h) The State of California should encourage responsible
businesses and real estate developments to locate and do business
in business and development-ready low-income neighborhoods in
ways that solve economic, social, and environmental problems
rather than causing them.

end insert begin insert

(i) To accomplish this, California needs a California Community
Investment Initiative and regional Community Development
Strategies to assist low-income neighborhoods and the cities,
counties, and regions where they are located to become business,
development, and investment-ready.

end insert

begin insert

begin insert SEC. 3. end insert   

end insert

begin insert Article 6 (commencing with Section 12099.1) is added
to Chapter 1.6 of Part 2 of Division 3 of Title 2 of the end insert begin insert Government
Code end insert begin insert , to read: end insert

begin insert

 

Article begin insert 6. end insert   California Community Investment Initiative

 

begin insert 12099.1. end insert   

(a) The California Community Investment Initiative
is hereby created within the Governor’s Office of Business and
Economic Development. The California Community Investment
Initiative shall be staffed by the Governor’s Office of Business and
Economic Development using existing resources.

(b) The California Community Investment Initiative shall be
governed by a 13 member oversight board made up of:

(1) Six persons appointed by the Governor, comprised of three
citizens with private-sector business or investment expertise and
three citizens with community development expertise.

(2) Four members of the Legislature, two from the Senate
appointed by the President pro Tempore of the Senate, one from
each of the two political parties with the most representatives in
the Senate, and two from the Assembly appointed by the Speaker
of the Assembly, one from each of the two political parties with
the most representatives in the Assembly. The members shall have
relevant program expertise to contribute to the initiative. The
members shall be nonvoting members of the oversight board and
shall participate in the activities of the board only to the extent
that their participation is compatible with their respective positions
as Members of the Legislature.

(3) The Treasurer.

(4) The Controller.

(5) The Secretary of the Business, Consumer Services, and
Housing Agency.

begin insert 12099.2. end insert   

The California Community Investment Initiative shall
do all of the following:

(a) Create an inventory of low-income neighborhoods, public
interments, state and local programs, and sources of public-sector
finance, including descriptions of asset size, underwriting criteria,
decisionmaking process, and other characteristics. The inventory
shall examine all of the following:

(1) California Department of Insurance Organized Investment.

(2) Federal and State Low-Income Housing Tax Credit Program.

(3) California Alternative Energy and Advanced Transportation
Financing Authority.

(4) California Pollution Control Financing Authority.

(5) California Transportation Financing Authority.

(6) Industrial Development Finance Authority.

(7) The California Infrastructure and Economic Development
Bank.

(8) Transportation funding through the Metropolitan Planning
Agencies.

(b) Coordinate public-sector financial investment and public
programs to assist low-income communities to become business,
development, and investment ready. These programs shall include:

(1) ______.

(2) ______.

(c) Develop criteria for determining the type of economically,
socially, and environmentally responsible businesses and real
estate developments to assist in starting-up, locating, and growing
in low-income neighborhoods. These criteria shall include:

(1) ______.

(2) ______.

(3) ______.

(d) Establish a broad array of incentives to encourage
responsible businesses and real estate developments to grow in
low-income neighborhoods and to encourage investment in
low-income neighborhoods. These incentives shall include:

(1) Environmental and entitlement regulatory incentives.

(2) Integrated public agency assistance incentives.

(e) Assist with formulating Community Development Strategies
with associated Zoning and Area Plans that will help low income
neighborhoods and the cities, counties, and regions where they
are located to become business, development, and investment
ready.

(f) Report annually to the Legislature and the Governor on
whether the initiative has met the criteria established for measuring
the economic, social, and environmental returns on the investments
made pursuant to this article.

begin insert 12099.3. end insert   

The California Community Investment Initiative shall
establish the California Community Investment Network. This
network shall do all of the following:

(a) Establish the California Family of Funds. The California
Family of Funds shall consist of venture funds and real estate
funds.

(b) Invite top quartile investment fund managers to become the
managing partners of the venture and real estate funds and to
affiliate with a not-for-profit organization as a special limited
partner.

(c) Provide assistance to the managing partners and the special
limited partner in raising five hundred million dollars
($500,000,000) in assets for the venture funds and five hundred
million dollars ($500,000,000) in assets for the real estate funds
from private sector investors, institutional investors, and
foundations.

(d) Fund managers, with assistance from the special limited
partner, in turn, shall:

(1) Identify investment funds with a substantial positive,
economic, social, and environmental impact on low income
individuals and communities and a financial return at or above
market rate.

(2) Make investments in funds that meet the criteria set forth in
subparagraph (1).

(3) Work with funds the initiative has invested in to assist them
in accomplishing the stated objectives.

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SECTION 1.  

(a) It is the intent of the Legislature to establish
the California Fund, a socially responsible investment fund
sponsored by the state to encourage investment in historically
underserved communities and, via these investments, to further
encourage additional development activities of scale within these
communities. The goal of the California Fund will be the
improvement of the economic conditions and the quality of life
for residents of historically underserved communities by providing
opportunities for professional success that may otherwise be out
of their reach due to their current socioeconomic conditions.

(b) It is the intent of the Legislature that the California Fund be
modeled after successful regional funds throughout the state.

end delete