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 AB 495 (Campos) Page 1 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. AB 495 (Campos) Page 2 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 AB 495 (Campos) Page 3 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.)