Amended in Senate June 30, 2014

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 Article 6.5 (commencing with Section 12099.20) 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 Economicbegin delete developmentend deletebegin insert Developmentend insert. The program would be governed by abegin delete 14end deletebegin insert 10end insert member California Community Investment Council comprised of 6 citizens appointed by the Governor,begin delete 4 members of the Legislature,end delete the Treasurer, the Controller, the Secretary ofbegin delete theend delete Business, Consumer Services, and Housingbegin delete Agencyend delete, and the Director of the Governor’s Office of Business and Economic Development, as specified.begin insert The bill would also establish an advisory committee to advise the California Community Investment Council composed solely of four members of the Legislature, as specified.end insert

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-line investment 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.

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.

begin delete

This

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begin insertTheend insert bill would also make legislative findings and declarationsbegin insert in this regardend insert.

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
P3    1the United States Census Bureau’s new definition of poverty that
2takes cost of living into consideration, with nearly a quarter of its
3residents living in poverty.

4(b) In this era of public budget constraints, public sector dollars
5are insufficient to solve the problems of low-income
6neighborhoods. Therefore, private sector market forces need to be
7engaged to make substantial investments that produce a risk
8adjusted market rate of return.

9(c) Low-income neighborhoods constitute domestic emerging
10markets with significant purchasing power and location
11efficiencies, but suffer from social, public safety, broadband, and
12physical infrastructure problems that contribute to market
13prejudices that lead to disinvestment.

14(d) To overcome these problems and market prejudices,
15low-income neighborhoods need to become business, development,
16and investment-ready through a partnership of government, private
17sector, community, and environmental leaders focused on
18generating coordinated, focused, effective human services, public
19safety, broadband, workforce, education, and physical
20infrastructure.

21(e) A new class of real estate and business developments is
22emerging that actively pursues economically, socially, and
23environmentally responsible outcomes. These real estate and
24 business developments often are the result of investments from
25private sector investment funds that generate market-rate returns
26to investors, but are also committed to improving economic, social,
27and environmental conditions and characteristics for the existing
28residents in these neighborhoods. These private sector investment
29mechanisms often are referred to as “triple bottom-line” investment
30funds.

31(f) Triple bottom-line investment funds and the real estate and
32business developments resulting from them are helping to reduce
33poverty and improve the social and environmental dynamics of
34low-income neighborhoods. Triple bottom-line investments can
35be encouraged and the benefits from them can be enhanced and
36accelerated by coordinated assistance from existing State of
37California programs and funding resources.

38(g) Many low-income neighborhoods are at transit hubs or have
39the transit and mixed-use characteristics in place to make
P4    1development in them more climate friendly than development
2elsewhere.

3(h) The State of California should encourage responsible
4businesses and real estate developments to locate and do business
5in business and development-ready low-income neighborhoods in
6ways that solve economic, social, and environmental problems
7rather than cause them.

8(i) To accomplish this, the State of California intends to establish
9the California Community Investment Program to assist
10low-income neighborhoods by encouraging private sector
11investment consistent with the economic development and
12community improvement strategies of the cities, counties, and
13regions where they are located. It is the intent of the State of
14California that such private sector investment is accomplished
15without permanent displacement of existing residents in
16low-income neighborhoods.

17(j) It is the intent of the Legislature that state agencies cooperate
18with the California Community Investment Program to align their
19resources to transform low-income neighborhoods and to attract
20private investments into these neighborhoods.

21

SEC. 3.  

Article 6.5 (commencing with Section 12099.20) is
22added to Chapter 1.6 of Part 2 of Division 3 of Title 2 of the 23Government Code, to read:

24 

25Article 6.5.  California Community Investment Program
26

 

27

12099.20.  

For the purposes of this article, the following
28definitions shall apply:

29(a) “Poverty” means the supplemental poverty measure,
30established by the United States Census Bureau in 2013 to
31incorporate cost of living in the established rate of poverty.

32(b) “Triple bottom-line investment funds” include, but are not
33limited to, equity and debt investment vehicles that pursue market
34and above market rates of financial return while at the same time
35producing living wage jobs, affordable housing, and other
36economic, social, and environmental benefits for the residents of
37the communities where the investments are made.

38(c) “Low-income” means households whose income does not
39exceed 80 percent of area median income.

P5    1

12099.22.  

(a) The California Community Investment Program
2is hereby established within the Governor’s Office of Business
3and Economic Development.

4(b) The program shall be under the direct authority of the
5director.

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

7(1) Encourage private sector investment in low-income
8neighborhoods to improve the economic, environmental, and social
9conditions for the existing residents, thereby helping improve the
10overall economic, environmental, and social well-being for
11California.

12(2) Serve investors, employers, corporate executives, business
13owners, and site location consultants who are considering
14low-income neighborhoods for business investment and expansion.

15(3) Coordinate state programs and funding resources that can
16be used to address poverty reduction in California and to assist
17low-income neighborhoods to become business, development, and
18investment ready.

19(d) The California Community Investment Program shall be
20supported and staffed by the Governor’s Office of Business and
21Economic Development using existing resources.

22(e) In implementing the program, the director shall establish
23and implement a process for establishing public education programs
24and providing technical assistance to private sector investors.

25(f) The California Community Investment Program shall be
26governed by abegin delete 14end deletebegin insert 10end insert member California Community Investment
27Council comprised of:

28(1) Six persons appointed by the Governor, comprised of three
29members with private sector business or investment expertise, two
30members with community development expertise, and one
31representative of organized labor.

begin delete

32(2) Four members of the Legislature, two from the Senate
33appointed by the Senate Committee on Rules, one from each of
34the two political parties with the most representatives in the Senate,
35and two from the Assembly appointed by the Speaker of the
36Assembly, one from each of the two political parties with the most
37 representatives in the Assembly. The members shall be nonvoting
38members of the California Community Investment Council and
39shall participate in the activities of the council only to the extent
P6    1that their participation is compatible with their respective positions
2as Members of the Legislature.

3(3)

end delete

4begin insert(2)end insert The Treasurer.

begin delete

5(4)

end delete

6begin insert(3)end insert The Controller.

begin delete

7(5)

end delete

8begin insert(4)end insert The Secretary ofbegin delete theend delete Business, Consumer Services, and
9Housingbegin delete Agencyend delete.

begin delete

10(6)

end delete

11begin insert(5)end insert The Director of the Governor’s Office of Business and
12Economic Development, shall serve as chair of the council.

begin insert

13(g) There shall be an advisory committee to advise the California
14Community Investment Council composed solely of four members
15of the Legislature as follows:

end insert
begin insert

16 (1) Two from the Senate appointed by the Senate Committee
17on Rules with one from each of the two political parties with the
18most representatives in the Senate.

end insert
begin insert

19(2) Two from the Assembly appointed by the Speaker of the
20Assembly with one from each of the two political parties with the
21most representatives in the Assembly.

end insert
22

12099.24.  

The California Community Investment Program
23shall do all of the following:

24(a) Develop and annually update a database of low-income
25neighborhoods in California by county and city with relevant
26information about each neighborhood, including socioeconomic
27demographic data, descriptions of pertinent characteristics to
28inform private sector investments, such as local land use plans and
29zoning or other development designations, and commitments from
30local governments to support private sector investments. These
31neighborhoods shall be known as California Community
32Investment Neighborhoods. The California Community Investment
33Council shall adopt criteria whereby an eligible low-income
34neighborhood can become a California Community Investment
35Neighborhood.

36(b) Compile and maintain a current inventory of California
37public sector funding resources and financing mechanisms that
38may be allocated to or utilized in low-income neighborhoods.

39(c) Coordinate public sector financial investment and public
40programs to assist low-income communities that are eligible
P7    1California Community Investment Neighborhoods to become
2business, development, and investment ready and to attract private
3sector triple bottom-line fund investments.

4(d) Develop and adopt criteria for identifying eligible triple
5bottom-line investment funds that will serve as partners and invest
6in enterprises and employers that generate permanent living wage
7jobs, including investments to assist inbegin delete starting-up,end deletebegin insert starting up,end insert
8 locating, and expanding employers in low-income neighborhoods.

9(e) Develop and adopt criteria for eligible triple bottom-line
10investment funds that invest in real estate developments to assist
11in constructing, expanding, renovating, and rehabilitating buildings
12in low-income neighborhoods that accommodate all allowed land
13use approved and permitted by the local government land use
14regulations.

15 (f) Establish overall triple bottom-line goals and standardized
16metrics for economic, social, and environmental outcomes that
17shall be accepted by all eligible investment funds.

18(g) Gather evidence and conduct public forums to identify a
19broad array of incentives that will encourage triple bottom-line
20fund investments in low-income neighborhoods.

21(h) Establish and convene regular meetings of the California
22Community Investment Network comprised of organizations and
23institutions with expertise and resources to advise the California
24Community Investment Council and eligible investment fund
25managers.

26(i) Report biannually to the Legislature and the Governor on
27the status and progress of the California Community Investment
28Program and performance on goals and triple bottom-line outcomes
29pursuant to subdivision (f).

30

begin delete12099.26end delete
31begin insert12099.26.end insert  

The California Community Investment Program
32shall encourage significant private sector commitment, cooperation,
33and collaboration to invest private capital in low-income
34neighborhoods through eligible triple bottom-line investment funds
35with the goal of obtaining, by January 1, 2019, at least one billion
36dollars ($1,000,000,000) of new investment by triple bottom-line
37investment funds in triple bottom-line real estate developments
38and businesses located in low-income California neighborhoods.



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