BILL ANALYSIS Ó
AB 1533
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CONCURRENCE IN SENATE AMENDMENTS
AB
1533 (Committee on Jobs, Economic Development, and the Economy)
As Amended August 31, 2015
Majority vote
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|ASSEMBLY: |80-0 |(June 1, 2015) |SENATE: | 40-0 |(September 2, |
| | | | | |2015) |
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Original Committee Reference: J., E.D., & E.
SUMMARY: Updates definitions used by the California
Infrastructure and Economic Development Bank (I-Bank) when
authorizing financing of infrastructure projects and economic
development-related facilities. Further, the bill codifies the
transfer of federal funds and grantee status from the Governor's
Office of Business and Economic Development (GO-Biz) to the
Valley Economic Development Center, Inc, as specified.
The Senate amendments replace the intra-agency transfer of
federal funding provisions with provisions that codify the 2014
transfer of the same federal grant funding from the state to a
private nonprofit, as specified.
EXISTING LAW:
AB 1533
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1)Establishes the I-Bank within the 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)Designates GO-Biz as the administrator of specified Economic
Development Administration (EDA) grant moneys. The EDA moneys
were originally awarded to the state in the 1990s and since
that time have been overseen by the Technology, Trade and
Commerce Agency, the Business, Transportation and Housing
Agency, and GO-Biz.
FISCAL EFFECT: According to the Senate Appropriations
Committee, recent amendments remove all costs associated with
the bill.
COMMENTS: This is the I-Bank code maintenance bill annually
authored by the members of the Assembly Committee on Jobs,
Economic Development, and the Economy. This bill contains
technical changes to the statute governing the I-Bank and
GO-Biz.
Updating Infrastructure Development 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.
AB 1533
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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: In 1983,
California received the first of two grants from the federal
(EDA) totaling $1.6 million for the purpose of establishing a
small business revolving loan fund (RLF) program serving
severely distressed areas, (grant numbers 07-19-02709 and
07-19-2079.01).
Over the life of the program, 35 loans have been made ranging
between $100,000 and $500,000. Seven loans have been written
off and 25 have been paid in full, as of the most current
records of dating September 2012. The federal funds have been
overseen by four separate state agencies and twice the state
tried unsuccessfully to terminate the grant. For the four years
following the dissolution of the California Technology, Trade,
and Commerce Agency in 2003, the funds sat unused in a State
Controller holding account.
Most recently, state administration of the RLF passed from the
disbanded Business, Transportation and Housing Agency to GO-Biz,
pursuant to the 2013 Governor's Reorganization Plan 2. Given
the staffing and expertise required to manage the RLF, GO-Biz
decided and was successful in negotiating a compromise with the
EDA which provided for the final transfer of the funds and
program responsibility to the Valley Economic Development
Center, Inc, a nonprofit with experience in providing small
business financing statewide. The value of the RLF at the point
of transfer was approximately $3.7 million including federal
funds, loan repayments, and interest earned.
This bill codifies this final transfer, including reference to
the formal agreement to transfer grantee status signed by EDA,
GO-Biz, and the Valley Economic Development Centers. Given the
long and somewhat complicated state administration of these
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funds, the authors believe a clear statutory record should be
provided to ensure the state, as well as local economic
development organizations, are not negatively impacted in their
future attempts to receive federal moneys based on the incorrect
perception that the state still manages the EDA funds.
Analysis Prepared by:
Toni Symonds / J., E.D., & E. / (916) 319-2090
FN:
0001839