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
AB 701
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