Amended in Assembly January 23, 2014

Amended in Assembly January 13, 2014

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 BillNo. 495


Introduced by Assembly Member Campos

(Coauthor: Assembly Member Dickinson)

February 20, 2013


An act to add Articlebegin delete 6end deletebegin insert 6.5end insert (commencing with Sectionbegin delete 12099end deletebegin insert 12099.20end 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 Program within the Governor’s Office of Business and Economic development. The program would be governed by a 14 member California Community Investment Council comprised of 6 citizens appointed by the Governor, 4 members of the Legislature, the Treasurer, the Controller, the Secretary of the Business, Consumer Services, and Housing Agency, and the Director of the Governor’s Office of Business and Economic Development, as specified.

The program 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-linebegin delete equityend deletebegin insert investmentend insert funds, establish overall triple bottom-line goals and standardized metrics for economic, social, and environmental outcomes to be accepted by eligible investment funds, establish and convene regular meetings of the California Community Investment Network comprised of organizations and institutions with expertise and resources to advise the California Community Investment Council and eligible investment fund managers, and report biannually to the Legislature and the Governor on the status and progress of the California Community Investment Program and performance on goals and triple bottom-line outcomes, as specified.

begin insert

The bill would require the program to encourage significant private sector commitment, cooperation, and collaboration to invest private capital in low-income neighborhoods through eligible triple bottom-line investment funds with the goal of obtaining, by January 1, 2019, at least $1,000,000,000 of new investment by triple bottom-line investment funds in triple bottom-line real estate developments and businesses located in low-income California neighborhoods.

end insert

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:

P2    1

SECTION 1.  

This act shall be known and may be cited as the
2California Community Investment Program.

3

SEC. 2.  

The Legislature finds and declares all of the following:

4(a) Despite having the largest state economy in the United States,
5California has the highest poverty rate of any state, according to
6the United States Census Bureau’s new definition of poverty that
7takes cost of living into consideration, with nearly a quarter of its
8residents living in poverty.

9(b) In this era of public budget constraints, public sector dollars
10are insufficient to solve the problems of low-income
P3    1neighborhoods. Therefore, private sector market forces need to be
2engaged to make substantial investments that produce a risk
3adjusted market rate of return.

4(c) Low-income neighborhoods constitute domestic emerging
5markets with significant purchasing power and location
6efficiencies, but suffer from social, public safety, broadband, and
7physical infrastructure problems that contribute to market
8prejudices that lead to disinvestment.

9(d) To overcome these problems and market prejudices,
10low-income neighborhoods need to become business, development,
11and investment-ready through a partnership of government, private
12sector, community, and environmental leaders focused on
13generating coordinated, focused, effective human services, public
14safety, broadband, workforce, education, and physical
15infrastructure.

16(e) A new class of real estate and business developments is
17emerging that actively pursues economically, socially, and
18environmentally responsible outcomes. These real estate and
19business developments often are the result of investments from
20private sector investment funds that generate market-rate returns
21to investors, but are also committed to improving economic, social,
22and environmental conditions and characteristics for the existing
23residents in these neighborhoods. These private sector investment
24mechanisms often are referred to as “triple bottom-line” investment
25funds.

26(f) Triple bottom-line investment funds and the real estate and
27business developments resulting from them are helping to reduce
28poverty and improve the social and environmental dynamics of
29low-income neighborhoods. Triple bottom-line investments can
30be encouraged and the benefits from them can be enhanced and
31accelerated by coordinated assistance from existing State of
32California programs and funding resources.

33(g) Many low-income neighborhoods are at transit hubs or have
34the transit and mixed-use characteristics in place to make
35development in them more climate friendly than development
36elsewhere.

37(h) The State of California should encourage responsible
38businesses and real estate developments to locate and do business
39in business and development-ready low-income neighborhoods in
P4    1ways that solve economic, social, and environmental problems
2rather than cause them.

3(i) To accomplish this, the State of California intends to establish
4the California Community Investment Program to assist
5low-income neighborhoods by encouraging private sector
6investment consistent with the economic development and
7community improvement strategies of the cities, counties, and
8regions where they are located. It is the intent of the State of
9California that such private sector investment is accomplished
10without permanent displacement of existing residents in
11low-income neighborhoods.

12(j) It is the intent of the Legislature that state agencies cooperate
13with the California Community Investment Program to align their
14resources to transform low-income neighborhoods and to attract
15private investments into these neighborhoods.

16

SEC. 3.  

Article begin delete6end deletebegin insert6.5end insert (commencing with Section
17begin delete12099)end deletebegin insert12099.20)end insert is added to Chapter 1.6 of Part 2 of Division 3
18of Title 2 of the Government Code, to read:

19 

20Article begin delete6.end deletebegin insert6.5.end insert  California Community Investment Program
21

 

22

begin delete12099.end delete
23begin insert12099.20.end insert  

For the purposes of this article, the following
24definitions shall apply:

25(a) “Poverty” means the supplemental poverty measure,
26established by the United States Census Bureau in 2013 to
27incorporate cost of living in the established rate of poverty.

28(b) “Triple bottom-line investment funds” include, but are not
29limited to, equity and debt investment vehicles that pursue market
30and above market rates of financial return while at the same time
31producingbegin delete goodend deletebegin insert living wageend insert jobs, affordable housing, and other
32economic, social, and environmental benefits for the residents of
33the communities where the investments are madebegin delete.end delete

begin insert

34(c) “Low-income” means households whose income does not
35exceed 80 percent of area median income.

end insert
36

begin delete12099.1.end delete
37begin insert12099.22.end insert  

(a) The California Community Investment Program
38is hereby established within the Governor’s Office of Business
39and Economic Development.

P5    1(b) The program shall be under the direct authority of the
2director.

3(c) The purpose of the program is to:

4(1) Encourage private sector investment in low-income
5neighborhoods to improve the economic, environmental, and social
6conditions for the existing residents, thereby helping improve the
7overall economic, environmental, and social well-being for
8California.

9(2) Serve investors, employers, corporate executives, business
10owners, and site location consultants who are considering
11low-income neighborhoods for business investment and expansion.

12(3) Coordinate state programs and funding resources that can
13be used to address poverty reduction in California and to assist
14low-income neighborhoods to become business, development, and
15investment ready.

16(d) The California Community Investment Program shall be
17supported and staffed by the Governor’s Office of Business and
18Economic Development using existing resources.

19(e) In implementing the program, the director shall establish
20and implement a process for establishing public education programs
21and providing technical assistance to private sector investors.

22(f) The California Community Investment Program shall be
23governed by a 14 member California Community Investment
24Council comprised of:

25(1) Six persons appointed by the Governor, comprised of three
26members with private sector business or investment expertise, two
27members with community development expertise, and one
28representative of organized labor.

29(2) Four members of the Legislature, two from the Senate
30appointed by the Senate Committee on Rules, one from each of
31the two political parties with the most representatives in the Senate,
32and two from the Assembly appointed by the Speaker of the
33Assembly, one from each of the two political parties with the most
34 representatives in the Assembly. The members shall be nonvoting
35members of the California Community Investment Council and
36shall participate in the activities of the council only to the extent
37that their participation is compatible with their respective positions
38as Members of the Legislature.

39(3) The Treasurer.

40(4) The Controller.

P6    1(5) The Secretary of the Business, Consumer Services, and
2Housing Agency.

3(6) The Director of the Governor’s Office of Business and
4Economic Development, shall serve as chair of the council.

5

begin delete12099.2.end delete
6begin insert12099.24.end insert  

The California Community Investment Program
7shall do all of the following:

8(a) Develop and annually update a database of low-income
9neighborhoods in California by county and city with relevant
10information about each neighborhood, including socioeconomic
11demographic data, descriptions of pertinent characteristics to
12inform private sector investments, such as local land use plans and
13zoning or other development designations, and commitments from
14local governments to support private sector investments. These
15neighborhoods shall be known as California Community
16Investment Neighborhoods. The California Community Investment
17Council shall adopt criteria whereby an eligible low-income
18neighborhood can become a California Community Investment
19Neighborhood.

20(b) Compile and maintain a current inventory of California
21public sector funding resources and financing mechanisms that
22may be allocated to or utilized in low-income neighborhoods.

23(c) Coordinate public sector financial investment and public
24programs to assist low-income communities that are eligible
25California Community Investment Neighborhoods to become
26business, development, and investment ready and to attract private
27sector triple bottom-line fund investments.

28(d) Develop and adopt criteria for identifying eligible triple
29bottom-linebegin delete investmentsend deletebegin insert investmentend insert funds that will serve as partners
30and invest in enterprises and employers that generate permanent
31begin insert living wageend insert jobs, including investments to assist in starting-up,
32locating, and expanding employers in low-income neighborhoods.

33(e) Develop and adopt criteria for eligible triple bottom-line
34investment funds that invest in real estate developments to assist
35in constructing, expanding, renovating, and rehabilitating buildings
36in low-income neighborhoods that accommodate all allowed land
37use approved and permitted by the local government land use
38regulations.

P7    1 (f) Establish overall triple bottom-line goals and standardized
2metrics for economic, social, and environmental outcomes that
3 shall be accepted by all eligible investment funds.

4(g) Gather evidence and conduct public forums to identify a
5broad array of incentives that will encourage triple bottom-line
6fund investments in low-income neighborhoods.

7(h) Establish and convene regular meetings of the California
8Community Investment Network comprised of organizations and
9 institutions with expertise and resources to advise the California
10Community Investment Council and eligible investment fund
11managers.

12(i) Report biannually to the Legislature and the Governor on
13the status and progress of the California Community Investment
14Program and performance on goals and triple bottom-line outcomes
15pursuant to subdivision (f).

16

begin delete12099.3.end delete
17begin insert12099.26end insert  

The California Community Investment Program shall
18encourage significant private sector commitment, cooperation, and
19collaboration to invest private capital in low-income neighborhoods
20through eligible triple bottom-linebegin delete equityend deletebegin insert investmentend insert funds with
21the goal of obtainingbegin insert, by January 1, 2019,end insert at least one billion
22dollars ($1,000,000,000) of new investment by triple bottom-line
23investment funds in triple bottom-line real estate developments
24and businesses located in low-income California neighborhoods.



O

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