BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
AB 1533 (Committee on Jobs, Economic Development, and the
Economy) - Infrastructure financing.
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|Version: May 13, 2015 |Policy Vote: B., P. & E.D. 9 - |
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|Urgency: No |Mandate: No |
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|Hearing Date: August 17, 2015 |Consultant: Robert Ingenito |
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This bill meets the criteria for referral to the Suspense File.
Bill
Summary: AB 1533 would (1) revise the definition of economic
development facilities and port facilities for purposes of the
Bergeson-Peace Infrastructure and Economic Development Bank
(I-Bank) Act, and (2) authorize the I-Bank to administer and
expend certain federal funds.
Fiscal
Impact: This bill would likely result in increased annual
administrative costs to the I-Bank of up to $150,000 (General
Fund), to administer grant funds, as specified.
AB 1533 (Committee on Jobs, Economic Development, and the
Economy) Page 1 of
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Background: The I-Bank was established in 1994 to promote economic
revitalization, enable future development, and encourage a
healthy climate for jobs in California. Housed within GO-Biz,
it is governed by a five-member board, with its day-to-day
operations directed by an Executive Director who is an appointee
of the Governor and is subject to confirmation by the California
State Senate. Currently, the I-Bank has authority for 25 staff.
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 various public and private sector
financing activities. Budgetary data indicate that its programs
provide revenues sufficient to cover operating expenses.
The I-Bank administers three programs: (1) the Infrastructure
State Revolving Fund, which provides direct low-cost financing
to public agencies for a variety of public infrastructure
projects, (2) the Conduit Bond Program, which provides financing
for manufacturing companies, public benefit nonprofit
organizations, public agencies and other eligible entities, and
(3) the Small Business Finance Center, which helps small
businesses access private financing through loan guarantees,
direct loans, and performance bond guarantees. There is no
commitment of I-Bank or state funds for any of the conduit
revenue bonds. Even in the case of default, the state is not
liable.
Since its creation, the I-Bank has loaned, financed, or
participated in over $344 billion in infrastructure and economic
expansion projects, subsequently developing expertise in the
financing of public infrastructure. The I-Bank also serves as
the State's only general purpose financing authority with broad
statutory powers to issue revenue bonds, make loans, and provide
guarantees. Over $33 billion in conduit revenue bonds have been
issued by the I-Bank since 2000.
Proposed Law:
This bill would revise the definition of "economic development
AB 1533 (Committee on Jobs, Economic Development, and the
Economy) Page 2 of
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facilities" to include facilities that are used to provide goods
movement and "port facilities" to specifically reference
airports, landports, waterports, and railports, for purposes of
the I-Bank Act. Additionally, the bill would transfer authority
over the federal Economic Development Adjustment Assistance
(EDAA) Grant and the Sudden and Severe Economic Dislocation
Grant from the Governor's Office of Business and Economic
Development (GO-Biz) to the I-Bank.
Related
Legislation: AB 1537 (Assembly Committee on Jobs, Economic
Development and the Economy, Chapter 191, Statutes of 2015)
expanded the reporting requirements of the California Small
Business Finance Center to include the geographic location of
businesses assisted by its programs.
Staff
Comments: Over a decade ago, California received $2 million in
federal funding through the EDAA Grant, which funds
economically-distressed communities, and the Sudden and Severe
Economic Dislocation Grant Program, which provides capital to
businesses in economically-distressed areas.
The EDAA was administered by the Business, Transportation and
Housing (BTH) Agency through 2013. When BTH was eliminated in
2013, pursuant to the Governor's reorganization plan, the
California Small Business Expansion Fund (including the EDAA
grant) and the program authority to oversee the EDAA grant, were
transferred to GO-Biz. Other 2013 legislation, chaptered after
the reorganization bill, transferred the California Small
Business Expansion Fund to the I-Bank.
This bill would streamline the organization structure for the
federal funds by authorizing the I-Bank to oversee both the
money and program implementation responsibility.
AB 1533 (Committee on Jobs, Economic Development, and the
Economy) Page 3 of
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