Amended in Assembly January 6, 2014

Amended in Assembly September 3, 2013

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 to add Article 6 (commencing with Section begin delete 12099.1) end delete begin insert 12099) end insert to Chapter 1.6 of Part 2 of Division 3 of Title 2 to the Government Code, relating to community investment.

LEGISLATIVE COUNSEL’S DIGEST

AB 495, as amended, Campos. Community investment.

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

This bill would establish the California Community Investment begin delete Initiative end delete begin insert Program end insert within the Governor’s Office of Business and Economic development. The begin delete initiative end delete begin insert program end insert would be governed by a begin delete 13 member Coordination and Oversight end delete begin insert 14 member California Community Investment end insert Council comprised of 6 citizens appointed by the Governor, 4 members of the Legislature, the Treasurer, the Controller, begin delete and end delete the Secretary of the Business, Consumer Services, and Housing Agency, begin insert and the Director of the Governor’s Office of Business and Economic Development, end insert as specified.

The begin delete initiative end delete begin insert program end insert would be required to create a database of low-income neighborhoods, compile and maintain an inventory of California public sector funding resources and financing mechanisms, coordinate public sector financial investment and public programs to assist low-income communities to become business, development, and investment ready, develop criteria for triple bottom-line equity funds, establish overall triple bottom-line goals and standardized metrics for economic, social, and environmental outcomes to be accepted by eligible begin delete equity end delete begin insert investment end insert funds, survey counties and cities to identify and inventory local governments that want to partner with triple bottom-line begin delete equity end delete begin insert investment end insert funds to invest in low-income neighborhoods, establish and convene regular meetings of the California Community Investment Network comprised of organizations and institutions with expertise and resources to advise the begin delete Coordination and Oversight end delete begin insert California Community Investment end insert Council and eligible begin delete equity end delete begin insert investment end insert fund managers, and report begin delete annually end delete begin insert biannually end insert to the Legislature and the Governor on the status and progress of the California Community Investment Initiative and performance on goals and triple bottom-line outcomes, as specified.

This bill would also make legislative findings and declarations.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

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

SECTION 1.  

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

SEC. 2.  

The Legislature finds and declares all of the following:

(a) Despite having the largest state economy in the United States,
California has the highest poverty rate of any state, begin insert according to
the United States Census Bureau’s new definition of poverty that
takes cost of living into consideration, end insert with nearly a quarter of its
residents living in poverty.

(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.

(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.

(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 begin delete the end delete environmental leaders focused on
generating coordinated, focused, effective human services, public
safety, broadband, workforce, education, and physical
infrastructure.

(e) A new class of real estate and business developments is
emerging that actively pursues economically, socially, and
environmentally responsible outcomes. These real estate and
business developments often are the result of investments from
private sector begin delete equity end delete begin insert investment end insert funds that generate market-rate
returns to investors, but are also begin delete legally end delete committed to improving
begin insert economic, end insert social begin insert , end insert and environmental conditions and characteristics
for the existing residents in these neighborhoods. These private
sector investment mechanisms often are begin delete refereed end delete begin insert referred end insert to as
“triple bottom-line” begin delete equity end delete begin insert investment end insert funds.

(f) Triple bottom-line begin delete equity end delete begin insert investment end insert funds and the real estate
and business developments resulting from them are helping to
reduce poverty and improve the social and environmental dynamics
of low-income neighborhoods. Triple bottom-line begin delete equity end delete
investments can be encouraged and the benefits from them can be
enhanced and accelerated by coordinated assistance from existing
State of California programs and funding resources.

(g) Many begin delete of these end delete begin insert low-income end insert 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.

(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 cause them.

(i) To accomplish this, the State of California intends to establish
the California Community Investment Initiative to assist
low-income neighborhoods by encouraging private sector
investment consistent with the economic development and
community improvement strategies of the cities, counties, and
regions where they are located. It is the intent of the State of
California that such private sector investment is accomplished
without permanent displacement of existing residents in
low-income neighborhoods.

SEC. 3.  

Article 6 (commencing with Section begin delete 12099.1) end delete begin insert 12099) end insert
is added to Chapter 1.6 of Part 2 of Division 3 of Title 2 of the Government Code, to read:

 

Article 6.  California Community Investment Initiative

 

begin insert

begin insert 12099. end insert   

For the purposes of this article, the following definitions
shall apply:

(a) “Poverty” means the supplemental poverty measure,
established by the United States Census Bureau in 2013 to
incorporate cost of living in the established rate of poverty.

(b) “Triple bottom-line investment funds” include, but are not
limited to, equity and debt investment vehicles that pursue market
and above market rates of financial return while at the same time
producing good jobs, affordable housing, and other economic,
social, and environmental benefits for the residents of the
communities where the investments are made.

end insert

12099.1.  

(a) The California Community Investment begin delete Initiative end delete
begin insert Program end insert is hereby established within the Governor’s Office of
Business and Economic begin delete Development to encourage end delete begin insert Development. end insert

begin insert

(b) The program shall be under the direct authority of the
director.

end insert begin insert

(c) The purpose of the program is to:

end insert

begin insert (1) end insert begin insert   end insert begin insert Encourage end insert private sector investment in low-income
neighborhoods to improve the economic, environmental, and social
conditions for the existing residents, thereby helping improve the
overall economic, environmental, and social well-being for
California. begin delete The end delete

begin insert

(2) Serve investors, employers, corporate executives, business
owners, and site location consultants who are considering
low-income neighborhoods for business investment and expansion.

end insert begin insert

(3) Coordinate state programs and funding resources that can
be used to address poverty reduction in California and to assist
low-income neighborhoods to become business, development, and
investment ready.

end insert

begin insert (d) end insert begin insert   end insert begin insert The end insert California Community Investment begin delete Initiative end delete begin insert Program end insert
shall be supported and staffed by the Governor’s Office of Business
and Economic Development using existing resources.

begin insert

(e) In implementing the program, the director shall establish
and implement a process for establishing public education
programs and providing technical assistance to private sector
investors.

end insert begin delete

(b)

end delete

begin insert (f) end insert  The California Community Investment begin delete Initiative end delete begin insert Program end insert
shall be governed by a begin delete 13 end delete begin insert 14 end insert member begin delete Coordination and Oversight end delete
begin insert California Community Investment end insert Council comprised of:

(1) Six persons appointed by the Governor, comprised of three
begin delete citizens end delete begin insert members end insert with private sector business or investment
expertise begin delete and three citizens end delete begin insert , two members end insert with community
development expertise begin insert , and one representative of organized labor end insert .

(2) Four members of the Legislature, two from the Senate
appointed by the begin delete President pro Tempore of the end delete Senate begin insert Committee
on Rules end insert , 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. begin delete The
members shall have relevant program expertise to contribute to
the initiative. end delete The members shall be nonvoting members of the
begin delete Coordination and Oversight end delete begin insert California Community Investment end insert
Council and shall participate in the activities of the council 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

(6) The Director of the Governor’s Office of Business and
Economic Development, shall serve as chair of the council.

end insert

12099.2.  

The California Community Investment begin delete Initiative end delete
begin insert Program end insert shall do all of the following:

(a) Develop and annually update a database of low-income
neighborhoods in California by county and city with relevant
information about each neighborhood, including socioeconomic
demographic data, descriptions of pertinent characteristics to
inform private sector begin delete invests, end delete begin insert investments end insert begin insert , end insert such as local land use
plans and zoning or other development designations, and
commitments from local governments to support private sector
investments. begin insert These neighborhoods shall be known as California
Community Investment Neighborhoods. end insert The begin delete Coordination and
Oversight end delete begin insert California Community Investment end insert Council shall adopt
criteria begin delete for end delete begin insert whereby end insert an eligible low-income neighborhood begin insert can
become a California Community Investment Neighborhood end insert .

(b) Compile and maintain a current inventory of California
public sector funding resources and financing mechanisms that
may be allocated to or utilized in low-income neighborhoods with
a description of the amount of available funding, criteria for
allocation, and application and decisionmaking criteria. begin insert In doing
this, the California Community Investment Council shall use the
inventory of business incentives, public sector funding resources,
and financing mechanisms maintained by the Governor’s Office
of Business and Economic Development and included in the State
of California Business Investment Guide. end insert The inventory shall begin delete assess end delete
begin insert include, but not be limited to, an assessment of end insert the role and impact
of all of the following entities and programs on low-income
neighborhoods:

(1) California Department of begin delete Insurance Organized Investment end delete
begin insert Insurance’s California Organized Investment Network end insert .

(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) Health and Human Services Agency.

(9) State Department of Education.

(10) Natural Resources Agency.

(11) Energy Commission.

(12) Public Utilities Commission.

(13) Local transportation authorities and the Transportation
Agency, including all transportation funding proposed by the
Department of Transportation or allocated by the California
Transportation Commission for expenditure by state or
metropolitan planning organizations.

begin insert

(14) Greenhouse Gas Reduction Fund administered by the
California Environmental Protection Agency.

end insert begin insert

(15) California Pollution Control Financing Authority.

end insert begin insert

(16) Recycling Market Development Zone administered by
CalRecycle.

end insert

(c) Coordinate public sector financial investment and public
programs to assist low-income communities begin insert that are eligible
California Community Investment Neighborhoods end insert to become
business, development, and investment ready begin delete or complement end delete begin insert and
to attract end insert private sector triple bottom-line begin delete equity end delete fund investments.
These programs shall include begin delete at least end delete begin insert , but not be limited to, end insert the
following purposes:

(1) Economic development, including research and development,
manufacturing, begin insert small business, and entrepreneurship growth end insert and
real estate development that generates in jobs.

(2) Housing rehabilitation and construction.

(3) School construction, education, and academic performance
improvement.

(4) Workforce preparation and training.

(5) Public safety, community policing, crime prevention,
rehabilitation, and probation.

(6) Public health, social services, and other human services.

(7) Mental health services.

(8) Alcohol and other drug abuse prevention and treatment.

(9) Recreation and community arts and music programs.

(10) Transportation and other mobility infrastructure, including
public transit, walkways, and bicycle paths.

(11) Other infrastructure, including water, sewer, solid waste,
recycling, and lighting.

(12) Broadband deployment for high-speed Internet access,
other information technology infrastructure, and smart grid.

(13) Energy efficiency, weatherization, and renewable energy
resources.

(14) Environmental quality, resource recycling, community
gardens, and local food sourcing services.

(15) Homeless facilities and services.

(d) Develop and adopt criteria for begin insert identifying end insert eligible triple
bottom-line begin delete equity end delete begin insert investments end insert funds that begin insert will serve as partners
and end insert invest in enterprises and employers that generate permanent
jobs, including investments to assist in starting-up, locating, and
expanding employers in low-income neighborhoods. These criteria
shall include the spirit and intent of the preponderance of the
following criteria as refined and adopted by the begin delete Coordination and
Oversight end delete begin insert California Community Investment end insert Council:

(1) Commitment to locate investments in a low-income
neighborhood.

(2) Generation of living wage jobs with benefits for low-income
residents.

(3) Projected multiplier effect for generation of additional
employment.

(4) Provision of employment benefits, such as health care,
retirement plans, profit sharing, and employee stock ownership.

(5) Commitment to local hiring and job training.

(6) Engagement of local, women, and minority business
enterprises as suppliers and contractors.

(7) Development and sponsorship of employee training
programs, including job training and financial education.

(8) Provision of onsite or nearby child care for children of
employees.

(9) Use of green building design, construction, renovation, or
operations.

(10) Implementation of energy and other resource efficiency,
recycling, or pollution prevention programs.

(11) Deployment of broadband high-speed Internet access and
other information technologies to support and increase productivity
and reduce impacts on the environment.

(12) Implementation of workplace safety or effective ergonomic
programs.

(13) Engagement with the local community through volunteer
organizations, local school support programs, and other community
initiatives.

(14) Production of economically, socially, or environmentally
beneficial products and services.

(15) Receipt of green business certification.

(16) Production of Corporate Social Responsibility (CSR),
Corporate Sustainability, and Creating Shared Value (CSV)
reporting.

(e) Develop and adopt criteria for eligible triple bottom-line
begin delete equity end delete begin insert investment end insert funds that invest in real estate developments to
assist in constructing, expanding, renovating, and rehabilitating
buildings in low-income neighborhoods that accommodate all
allowed land use approved and permitted by the local government
land use regulations. The criteria shall include the spirit and intent
begin insert of the preponderance end insert of the following, as refined and adopted by
the begin delete Coordination and Oversight end delete begin insert California Community Investment end insert
Council:

(1) Commitment to locate investments in a low-income
neighborhood begin insert that benefit low-income residents end insert .

(2) Consistency of development with local government land
use plans and alignment with local government priorities.

(3) Generation of construction jobs with living wages and
benefits.

(4) Establishment of job training and apprentice programs for
local residents.

(5) Ownership or equity participation by a local, woman, or
minority developer or use of local, women, or minority business
enterprises as contractors or subcontractors.

(6) Construction of affordable housing, especially as part of a
larger mixed-income, mixed-use project to optimize synergies
among land uses.

(7) Generation of permanent living wage jobs.

(8) Retention or generation of permanent living wage jobs.

(9) Use of green construction materials and practices.

(10) Incorporation of energy efficiencies, waste reduction, and
renewable energy resources.

(11) Implementation of smart development practices deploying
broadband for high-speed Internet access for smart infrastructure
and smart buildings, optimizing the utility of a smart grid.

(12) Incorporation of a multimodal transportation system that
optimizes walking, bicycling, public transit, and other strategies
to reduce single-occupant vehicle trips.

(13) Design of development consistent with the concept and
principles for livable communities.

(14) Accommodation of green and clean technology employers.

(15) Implementation of low-impact development practices
incorporating native vegetation, soil preservation, water use
conservation, recycling and other efficiencies, and pervious
pavement.

(16) Incorporation of parks, recreational areas, open spaces, and
other environmental amenities.

(17) Accommodation of locations for small and local businesses.

(18) Establishment of space for neighborhood organizations,
community centers, child care centers, and other nonprofit
community-based organizations.

(19) Use of bioregional development practices connecting local
and regional sustainable food production with urban consumption.

(20) Acquisition of LEED certification for buildings and
neighborhoods.

(f) Establish overall triple bottom-line goals and standardized
metrics for economic, social, and environmental outcomes that
shall be accepted by all eligible begin delete equity end delete begin insert investment end insert funds.

(g) Gather evidence and conduct public forums to identify a
broad array of incentives that will encourage triple bottom-line
begin delete equity end delete fund investments in low-income neighborhoods and take
the following actions:

(1) Prepare a report to the Legislature and Governor.

(2) Establish incentives for which there is existing legal and
regulatory authority.

(3) Recommend appropriate amendments to existing laws and
regulations and work with the Legislature and the Governor to
secure adoption.

(h) Survey counties and cities to identify and inventory local
governments that want to partner with triple bottom-line begin delete equity end delete
begin insert investment end insert funds to invest in low-income neighborhoods. This
survey shall determine if the local government has done any of
the following:

(1) Approved within the last 10 years a general plan, specific
plan, or other land use plan or zoning regulation on which an
investor can rely to govern and control development.

(2) Identified local public funding or other resources that have
been or will be committed to the low-income neighborhood to
complement a triple bottom-line begin delete equity end delete fund investment.

(3) Designated a person to coordinate alignment of public
resources and implementation of development plans with a fund
manager.

(4) Established county and city school integrated human services
teams to serve the low-income neighborhood with goals and
accountability to increase employment, improve education, reduce
poverty, reduce crime, and improve health status.

(5) Committed to cooperate in and assist with monitoring and
tracking performance outcomes in the low-income neighborhoods.

(i) Establish and convene regular meetings of the California
Community Investment Network comprised of organizations and
institutions with expertise and resources to advise the begin delete Coordination
and Oversight end delete begin insert California Community Investment end insert Council and
eligible begin delete equity end delete begin insert investment end insert fund managers.

(j) Report begin delete annually end delete begin insert biannually end insert to the Legislature and the
Governor on the status and progress of the California Community
Investment Initiative and performance on goals and triple
bottom-line outcomes pursuant to subdivision (f).

12099.3.  

(a) The California Community Investment begin delete Initiative end delete
begin insert Program end insert shall encourage significant private sector commitment,
cooperation, and collaboration to invest private capital in
low-income neighborhoods through eligible triple bottom-line
equity funds begin insert with the goal of obtaining at least one billion dollars
($1,000,000,000) of new investment by triple bottom-line
investment funds in triple bottom- end insert begin insert line real estate developments
and businesses located in low-income California neighborhoods end insert .
The California Community Investment begin delete Initiative end delete begin insert Program end insert shall
give priority consideration for award of state assistance from public
resources begin insert and programs end insert , herein identified, to low-income
neighborhoods begin delete into which investments are being made by each
fund that is capitalized with at least one billion dollars
($1,000,000,000) in investment funds. The Coordination and
Oversight Council shall adopt criteria and a process for prioritizing
assistance to low-income neighborhoods into which investments
are being made by triple bottom-line equity funds that are
capitalized with less than one billion dollars ($1,000,000,000) in
investment funds. end delete begin insert that adopt and implement strategies to become
business, development, and investment ready and collaborate with
the California Community Investment Program to attract
investment by triple bottom- end insert begin insert line funds. end insert

(b) The begin delete Coordination and Oversight end delete begin insert California Community
Investment end insert Council shall adopt criteria for an eligible triple
bottom-line equity fund that shall include at least the following:

(1) The fund shall be legally structured to comply with both the
spirit and intent of the preponderance of the relevant criteria
delineated in subdivisions (d) and (e) of Section 12099.2, as refined
and adopted by the begin delete Coordination and Oversight end delete begin insert California
Community Investment end insert Council, including triple bottom-line goals
and outcomes with explicit metrics.

(2) The fund shall be managed by a reputable fund manager
with a track record of experience and performance with triple
bottom-line funds.

begin delete

(3) The fund shall be prepared by experienced personnel to lead
and manage implementation of coordinated state and local
government public funding or other resources. This shall be
accomplished either by the fund manager or through a contractual
relationship between the fund manager and an appropriate nonprofit
organization.

end delete begin insert

(3) The fund shall attain a scale of at least one hundred million
dollars ($100,000,000) in capital.

end insert

(4) The fund shall be committed to working with relevant local
government jurisdictions to optimize the alignment of state public
funding and resources and local government funding and resources.

begin insert

(5) The fund shall include experienced personnel to manage
coordination with appropriate state and local government public
funding or other resources. This shall be accomplished either by
the fund manager or through a contractual relationship between
the fund manager and an appropriate nonprofit organization.

end insert begin delete

(5)

end delete

begin insert (6) end insert  The fund shall be organized to track performance and report
metrics for triple bottom-line goals and outcomes.

begin delete

(c) If requested by a local jurisdiction, the California Community
Investment Initiative shall provide technical assistance to review,
refine, and advise on local land use plans and zoning to increase
attraction of private investment by triple bottom-line equity funds.

end delete begin insert

(c) The California Community Investment Program shall give
priority consideration to working with triple bottom-line funds
that meet the criteria established by the California Community
Investment Council, with first attention to those funds with the
largest amount of capital. The California Community Investment
Program in the Governor’s Office of Business and Economic
Development shall assist funds meeting these criteria to identify
and make appropriate investments in investment ready low-income
communities and shall work with these funds to coordinate all of
the appropriate state and local financial and programmatic
resources to assist these investments to succeed.

end insert