BILL ANALYSIS Ó
AB 1533
Page 1
ASSEMBLY THIRD READING
AB
1533 (Committee on Jobs, Economic Development, and the Economy)
As Amended May 13, 2015
Majority vote
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|Committee |Votes |Ayes |Noes |
| | | | |
| | | | |
|----------------+------+--------------------+----------------------|
|Jobs |8-0 |Eduardo Garcia, | |
| | |Kim, Brough, Brown, | |
| | |Chu, Gipson, Irwin, | |
| | |Mathis | |
| | | | |
|----------------+------+--------------------+----------------------|
|Appropriations |17-0 |Gomez, Bigelow, | |
| | |Bonta, Calderon, | |
| | |Chang, Daly, | |
| | |Eggman, Gallagher, | |
| | | | |
| | | | |
| | |Eduardo Garcia, | |
| | |Gordon, Holden, | |
| | |Jones, Quirk, | |
| | |Rendon, Wagner, | |
| | |Weber, Wood | |
| | | | |
| | | | |
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AB 1533
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SUMMARY: Makes a number of technical changes to the definition
section of the code relating to the Infrastructure and Economic
Development Bank (I-Bank). In addition, this bill makes
conforming changes to the operations of the Small Business Finance
Center, administered through the I-Bank, consistent with the
Governor's Reorganization Plan 2 (GRP 2) and other legislation
from 2013.
EXISTING LAW:
1)Establishes the I-Bank within the Governor's Office of Business
and Economic Development (GO-Biz) and authorizes it to undertake
a variety of infrastructure related financial activities
including, but not limited to, the administration of a revolving
loan fund, oversight of the Small Business Finance Center, and
the issuance of tax-exempt and taxable revenue bonds.
2)Establishes the Small Business Finance Center within the I-Bank
for the purpose of assisting businesses seeking capital
resources not otherwise available in the private markets
including:
a) Loan guarantees and other credit enhancements;
b) Direct loans and other debt instruments;
c) Disaster loan guarantees; and
d) Surety bond guarantees.
FISCAL EFFECT: According to the Assembly Appropriations
Committee, implementation of this measure will result in
administrative costs to GO-Biz of an amount that is unlikely to
exceed $150,000.
AB 1533
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COMMENTS: This is the I-Bank code maintenance bill from the
Assembly Committee on Jobs, Economic Development, and the Economy.
This bill contains technical and conforming changes to prior
legislative actions.
Updating Definitions: Existing law includes an extended list of
definitions for the operation of the I-Bank including definitions
related to the types of:
1)Financial actions the I-Bank is authorized to undertake
including bond purchase agreements, financial assistance, and
loan agreements; and
2)Projects the I-Bank is authorized to finance including economic
development facilities, education facilities and public
development facilities.
This bill reorganizes the placement of certain definitions,
clarifies some definitions, and updates cross references within
the I-Bank's definition code sections.
Transferring program authority of federal funds: Over a decade
ago, California received $2 million in grants from the federal
Economic Development Agency. The funds were provided through the
Economic Adjustment Assistance Grant Program, which funds
economically-distressed communities, and the Sudden and Severe
Economic Dislocation Grant Program, which provides capital to
businesses in economically-distressed areas.
Until the agency was dissolved in 2003, the funds were under the
control of the Technology, Trade, and Commerce Agency. Between
2003 and 2008, the funds were held by the State Controller
awaiting statutory direction as to the administrative
AB 1533
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responsibility for the use of the funds. In 2008, the federal
funds were transferred to the Small Business Expansion Fund and
the Business, Transportation, and Housing Agency (BTH) was given
program responsibility.
Pursuant to the Governor's Reorganization Plan 2, BTH was
eliminated in 2013. Legislation to make the statutory changes to
implement the reorganization transferred the California Small
Business Expansion Fund (including the federal funds) and program
authority to GO-Biz. During the same year, the Legislature
approved and the Governor signed AB 1247 (Medina), Chapter 537,
Statues of 2013, which transferred the Small Business Expansion
Fund to the newly created Small Business Finance Center under the
direct authority of the I-Bank. This resulted in the funding and
the program authority being only indirectly aligned.
This bill proposes a more streamlined organization structure for
the federal funds by authorizing the I-Bank to oversee both the
money and program implementation responsibility. According to the
author, this shift is recommended because the I-Bank already:
1)Operates under the purview of GO-Biz, meaning GO-Biz will still
have oversight;
2)Has authority to provide direct loans and guarantees to
businesses seeking capital, meaning they are well equipped to
appropriately expend the funds; and
3)Has primary responsibility for the funds in the California Small
Business Expansion Fund.
AB 1533
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Analysis Prepared by:
Toni Symonds / J., E.D., & E. / (916) 319-2090
FN: 0000535