BILL ANALYSIS                                                                                                                                                                                                    Ó




                   Senate Appropriations Committee Fiscal Summary
                            Senator Kevin de León, Chair


          AB 495 (Campos) - Community Investment
          
          Amended: June 30, 2014          Policy Vote: BP&ED 7-1
          Urgency: No                     Mandate: No
          Hearing Date: August 4, 2014                            
          Consultant: Robert Ingenito     
          
          This bill meets the criteria for referral to the Suspense File.


          Bill Summary: AB 495 would create the California Community  
          Investment Program within the Governor's Office of Business and  
          Economic Development (GO-Biz).

          Fiscal Impact: GO-Biz indicates that it would incur annual costs  
          of $750,000 (General Fund) and would require five additional  
          positions for program administration and information technology  
          projects resulting from the bill's database requirement. 

          Background: In February 2010, the Little Hoover Commission  
          reviewed the State's economic and workforce development  
          programs. Specifically, it analyzed the effectiveness of all  
          current programs since the elimination of the California  
          Technology, Trade and Commerce Agency (TTCA) in 2003, and  
          recommended the creation of a new governmental entity to replace  
          TTCA, to promote greater economic development, foster job  
          creation, serve as a policy advisor and deliver specific  
          services (e.g. permitting, regulatory and other information)  
          directly to the State's business community. In 2012, the  
          Legislature created GO-Biz for these purposes.

          Under current law, GO-Biz is authorized to promote statewide  
          economic objectives. It provides a single point of contact for  
          economic development, business assistance, and job creation  
          efforts, and works with companies nationwide to market the  
          advantages of locating in California, retain businesses, and  
          support private sector job growth. 

          The phrase "the triple bottom line" (TBL) was coined in the  
          1990s by John Elkington, the founder of a British consulting  
          firm. His argument was that companies should be preparing three  
          different (and quite separate) bottom lines. One is the  








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          traditional measure of corporate profit-the "bottom line" of the  
          profit and loss account. The second is the bottom line of a  
          company's "people account"-a measure in some shape or form of  
          how socially responsible an organization has been throughout its  
          operations. The third is the bottom line of the company's  
          "planet" account-a measure of how environmentally responsible it  
          has been. The triple bottom line (TBL) therefore comprises three  
          Ps: profit, people and planet. It aims to measure the financial,  
          social and environmental performance of the corporation over a  
          period of time. Only a company that produces a TBL is taking  
          account of the full cost involved in doing business.









































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          Proposed Law: The bill would require GO-Biz to do the following:

          1.   Establish and implement a process for establishing public  
               education programs and providing technical assistance to  
               private sector investors.

          2.   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 investments, such  
               as local land use plans and zoning or other development  
               designations, and commitments from local governments to  
               support private sector investments. 

          3.   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.

          4.   Develop and adopt criteria for identifying eligible triple  
               bottom-line investments funds that will serve as partners  
               and invest in enterprises and employers that generate  
               permanent jobs, including investments to assist in  
               starting-up, locating, and expanding employers in  
               low-income neighborhoods. 

          5.   Develop and adopt criteria for eligible triple bottom-line  
               investment 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.

          6.   Establish overall TBL goals and standardized metrics for  
               economic, social, and environmental outcomes that shall be  
               accepted by all eligible investment funds.

          7.   Gather evidence and conduct public forums to identify a  
               broad array of incentives that will encourage triple  
               bottom-line fund investments in low-income neighborhoods.

          8.   Establish and convene regular meetings with organizations  
               and institutions with expertise and resources to advise the  








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               California Community Investment Council and eligible  
               investment fund managers.

          9.   Report biannually to the Legislature and the Governor on  
               the status and progress of the program. 

          Related Legislation: SB 431 (Price) of 2013 would have  
          established the California Socioeconomic Development Pods  
          Program within the GO-Biz to encourage the use of social  
          innovative financing, as defined, within blighted areas in the  
          state and would have also created the Pod Accelerator Fund, a  
          continuously appropriated fund, within the State Treasury, to  
          receive moneys collected and received by GO-Biz for the Program  
          from gifts, bequests, or donations. The bill was held in the  
          Senate Committee on Appropriations.)