BILL ANALYSIS Ó
SENATE GOVERNANCE & FINANCE COMMITTEE
Senator Lois Wolk, Chair
BILL NO: AB 701 HEARING: 6/12/13
AUTHOR: John A. Pérez FISCAL: Yes
VERSION: 6/3/13 TAX LEVY: No
CONSULTANT: Ewing
INFRASTRUCTURE AND ECONOMIC DEVELOPMENT BANK'S BOARD
Adds two non-voting legislative members to the
Infrastructure Bank's board of directors.
Background and Existing Law
The California Infrastructure and Economic Development Bank
(I-Bank) supports economic development and public and
private infrastructure investments through its authority to
issue bonds, make loans and, provide credit enhancements.
The I-Bank manages several programs, including:
The Infrastructure State Revolving Fund Program
(ISRF) provides low-cost financing to local agencies
for public infrastructure projects.
The Industrial Development Bond Program (IDB)
provides tax-exempt revenue bond financing for
eligible manufacturing and processing companies.
The 501(c)(3) Revenue Bond Program offers
tax-exempt revenue bond financing for certain
nonprofit, public benefit corporations.
The Exempt Facility Bond Program provides
tax-exempt financing for projects that are
government-owned or consist of private improvements
within publicly-owned facilities, such as private
airline improvements at publicly owned airports.
Public Agency Revenue Bond Program provides
tax-exempt and taxable bond financing to specified
programs for state and local governmental agencies.
Formerly housed within the Business, Transportation and
Housing Agency, Governor's Reorganization Plan 2 of 2012
moved the I-Bank into the Governor's Office of Business and
Economic Development. The I-Bank has a five-member board
of directors, including the Director of the Governor's
AB 701 - 6/3/13 -- Page 2
Office of Business and Economic Development, who serves as
chair, the Treasurer, or his designee, the Department of
Finance, or her designee, the Secretary of Transportation,
or his designee, and an appointee of the Governor.
The I-Bank's Executive Director is appointed by the
Governor and confirmed by the Senate.
The I-Bank generally does not receive direct state funding.
Funding comes from fees, interest income, and revenues
tied to financing activities.
Proposed Law
Assembly Bill 701 allows the Assembly Speaker and the
Senate Rules Committee to each appoint a non-voting
legislative member to the California Infrastructure and
Economic Development Bank's board of directors. The bill
specifies that legislative members can advise the board to
the extent that their advisory participation is not
incompatible with their duties as Members of the
Legislature. AB 701 also designates the I-Bank as the
primary state agency for developing an application to any
federal infrastructure bank or financing authority.
State Revenue Impact
No estimate.
Comments
1.Purpose of the bill . AB 701 adds two non-voting
legislative members to the five-member board of the
Infrastructure Bank. Expanding the board of directors with
legislative members will create opportunities for
legislative input, improve the Legislature's awareness of
economic development opportunities, and enhance the board's
ability to perform its oversight role.
2.Let's be clear . AB 701 designates the I-Bank as the
"primary" agency for the purposes of applying for funding
to any "federal infrastructure bank or financing
authority." The word primary is ambiguous. For example,
it is not clear whether other state agencies are expected
AB 701 - 6/3/13 -- Page 3
to share information with the I-Bank or work through the
I-Bank before applying for federal funds. As far back as
2008, Congress has considered proposals to establish a
national infrastructure bank. Additional proposals are
currently being considered. It is further not clear if the
intent of AB 701 is to establish the I-Bank as the primary
agency for applications only to a federal infrastructure
bank, should one be established, or to all federal
financing authorities.
3.Triple-jointing . AB 701 amends Government Code 63021.5,
which also would be amended by AB 1317 (Frazier) and SB 820
(Senate Governmental Organization Committee), bills which
statutorily implement Governor's Reorganization Proposal 2
(2102). If these bills pass out of their respective policy
committees, staff should be prepared to address the
potential chaptering problem with appropriate amendments.
4.Related legislation . AB 701 is not the only bill that
would affect the I-Bank:
AB 311 (V. Manuel Perez) expands the role of the
California Infrastructure and Economic Development
Bank (I-Bank) to include facilitating infrastructure
and economic development financing activities within
the California and Mexico border region. AB 311 is in
Assembly Appropriations.
AB 1272 (Medina) expands the authority of the
I-Bank to participate in regional, national and
international organizations related to infrastructure
financing and support projects involving goods
movement. AB 1272 is in Assembly Appropriations.
AB 1095 (John A. Pérez, 2011). Adds two non-voting
legislative members of the Infrastructure Bank's board
of directors. Passed Senate Governance and Finance
5-3, amended to address school recycling. Died in
Senate.
AB 696 (Hueso) directs the I-Bank to establish a
methodology for determining the economic benefits of
projects under consideration and, as of January 1,
2013, restricts the I-Bank to approve only those
projects that provide economic benefits and meet land
use criteria. AB 696 was vetoed by Governor Brown.
AB 701 - 6/3/13 -- Page 4
AB 700 (Blumenfield) requires the I-Bank to adopt
two-year goals and measurable objectives, consistent
with state infrastructure, economic development and
environmental plans and authorizes the I-Bank to
pursue streamlined administrative functions. AB 700
was vetoed by Governor Brown.
AB 893 (V. Manuel Pérez) directs the I-Bank to
enhance outreach and technical assistance to small and
rural communities to obtain financing for
infrastructure projects. AB 893 died in Senate
Appropriations.
Assembly Actions
Assembly Floor: 54-24
Assembly Appropriations: 12-5
Assembly Committee on Jobs, Economic
Development and the Economy: 6-2
Support and Opposition (6/6/13)
Support : American Federation of State, County and
Municipal Employees, AFL-CIO.
Opposition : Unknown.