BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 701
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          Date of Hearing:   April 17, 2013

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                  Mike Gatto, Chair

             AB 701 (John A. Pérez) - As Introduced:  February 21, 2013 

          Policy Committee:                              JEDE Vote:6-2

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:              

           SUMMARY  

          This bill authorizes the California Infrastructure and Economic  
          Development Bank (I-Bank) to serve as the primary state agency  
          for applying to any federal infrastructure bank or financing  
          authority and expands the membership of the board of directors  
          from five to seven members by adding two nonvoting members  
          appointed by the Legislature.  The bill also establishes that  
          the I-Bank will be the state agency for applying for funds to  
          any federal infrastructure financing entity.

           FISCAL EFFECT  

          Minor and absorbable costs to the I-Bank. 

           COMMENTS  

           1)Author's Purpose  :  According to the author, this bill is  
            intended to allow the Legislature to participate in critical  
            decisions affecting the I-Bank.  The author contends, given  
            the I-Bank's integral role in issuing tax-exempt and taxable  
            revenue bonds, providing financing to public agencies and  
            leveraging State and Federal funds, it is important that the  
            Legislature have input on how those decisions are made.  The  
            author notes that there is continuing interest in a national  
            bank model and that federal funds may be a new source for  
            California infrastructure and the I-Bank is the logical agency  
            for assuming the lead role.

           2)Background on I-Bank  :  The I-Bank was established in 1994 to  
            promote economic revitalization, enable future development and  
            encourage a healthy climate for jobs in California.  Currently  
            housed within BTH, the I-Bank is governed by a five-member  








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            board comprised of the BTH Secretary (chair), State Treasurer,  
            Director Department of Finance, Secretary of the State and  
            Consumer Services Agency, and a Governor's appointee.  

            The I-Bank does not receive any ongoing General Fund support,  
            rather it is financed through fees, interest income and other  
            revenues derived from its public and private sector financing  
            activities.  

           3)Reorganization  :  In March 2012, the Governor initiated a  
            reorganization to dismantle the Business, Transportation and  
            Housing Agency (BTH) and the shifting of a number of key  
            programs and services to the Governor's Office of Business and  
            Economic Development (GO-Biz), including the I-Bank.  In  
            addition, the Secretary of BTH is replaced by the Director of  
            GO-Biz as Chair of I-Bank and the newly established Secretary  
            of Transportation replaces the Secretary of State and Consumer  
            Services on the I-Bank board.  Programmatic approval of the  
            reorganization was granted in July 2012 and will become  
            effective July 2013

           4)Related legislation  .

             a)   AB 311 (V. Manuel Perez) expands the role of the I-Bank  
               to include facilitating infrastructure and economic  
               development financing activities within the California and  
               Mexico border region.  This bill is pending in this  
               committee.

             b)   AB 1272 (Medina) authorizes the I-Bank to formally  
               participate in regional, national and international  
               organizations related to infrastructure financing.  This  
               bill is pending in this committee.  

          5)Previous legislation  .  AB 1094 (John A. Pérez) would have  
            added a member of the Assembly and a member of the Senate as  
            advisory members to the board of administration of the  
            California Infrastructure and Economic Development Bank.  AB  
            1094 passed the Assembly and was amended in the Senate to deal  
            with an unrelated subject.

           6)There is no registered opposition to this bill.  


           Analysis Prepared by  :    Roger Dunstan / APPR. / (916) 319-2081 








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