BILL ANALYSIS
AB 1009
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 1009 (V. Manuel Perez)
As Amended September 4, 2009
2/3 vote. Urgency
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|ASSEMBLY: | |(June 1, 2009) |SENATE: |30-6 |(October 14, |
| | | | | |2009) |
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(vote not relevant)
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|COMMITTEE VOTE: |(6-0)|(September 26, |RECOMMENDATION: |Concur |
| | |2009) | | |
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Original Committee Reference: J.,E.D. & E.
SUMMARY : Modifies statute related to the California Debt Limit
Allocation Committee (CDLAC) and California Industrial Development
Financing Advisory Commission (CIDFAC) to allow these entities to
allocate, issue, and collect data on the new types of bonds
authorized under the American Recovery and Reinvestment Act of 2009
(ARRA).
The Senate amendments delete the prior contents of this bill, and
instead:
1)Exclude bonds authorized pursuant to ARRA from the state ceiling
on the aggregate amount of private activity bonds that may be
annually issued.
2)Authorize CDLAC to reallocate any unused ARRA related bond
authority.
3)Require CIDFAC review submissions from industrial development
authorities as to whether proposed projects comply with ARRA.
CIDFAC is also required to provide specified technical assistance
to state and local entities which issue bonds pursuant to the
Industrial Development Bond Act.
4)Authorize CIDFAC to establish reserve funds and to provide
financial assistance to businesses on behalf of issuers. The
reserves may be established and replenished from federal, state,
and nonprofits agencies, as specified.
AB 1009
Page 2
5)Conform the eligible uses of industrial development bonds to
include those authorized under ARRA including, but not limited
to, commercial uses within a recovery zone; business activities
with the purpose of creating or producing intangible property; or
certain airports docks, wharfs, storage, training, or mass
commuting facilities within a recovery zone, enterprise
community, enterprise zone, or empowerment zone that is suitable
for a commercial purpose, as specified.
6)Expand the definition of an eligible project that can be funded
with private activity bonds from simply the acquisition of
facility to also include the construction, improvement,
rehabilitation, and reconstruction of a facility; the acquisition
or rehabilitation of machinery, equipment, and furnishings; the
acquisition of engineering and architectural surveys, plans, and
specifications; and all other necessary and related capital
expenditures.
7)Expand the criteria used by CIDFAC in determining whether a
public purpose exists and that the project is, therefore eligible
for financing from a private activity bond to include an
assessment of the economic benefits to the surrounding community
or state.
8)Authorize an industrial development authority to pay all or a
portion of the cost to issue industrial development bonds. This
will help to lower the cost of funds to business.
9)Make other technical and conforming changes
10)Add an urgency clause, allowing this bill to take effect
immediately upon enactment.
AS PASSED BY THE ASSEMBLY , this bill authorized the establishment
of a direct loan program for the purpose of providing loans to
qualified small businesses.
FISCAL EFFECT : According to the Senate Committee on
Appropriations, pursuant to Senate Rule 28.8, negligible fiscal
impact.
COMMENTS : AB 1009 is sponsored by the California State Treasurer
and is intended to update California law in order to best leverage
new federal bonding authority.
AB 1009
Page 3
The federal stimulus legislation made 30 tax changes that were
intended to provide relief to the American taxpayer and spur job
growth. Among other economic recovery tools, ARRA established the
Recovery Zone Bond and Qualified Energy Conservation Bond.
Authority for issuing these bonds sunsets on December 31, 2010.
Recovery Zone Bonds include both a public and private purpose
component: Economic Development Bonds, referred to as RZ-EDBs,
provide financing for economic development related public
infrastructure. Economic Development Facility Bonds, referred to
as RZ-FCs provide financing for business development costs
generally bore by the business. Together, the Recovery Zone Bonds
offer a lower-cost finance option for key components of local
economic activity, job training, and educational programs. The
Qualified Energy Conservation Bonds finance projects that reduce
energy consumption including automotive battery technologies that
reduce reliance on fossil fuel, renewable energy resources and
green community programs.
This new ARRA bond authority is limited to financing projects that
are "ready to go" in calendar years 2009 and 2010. California has,
by far, received the highest allocations of this new bond
authority. The nationwide volume cap for the RZ-EDBs is $10
billion and RZ-FCs is $15 billion, with approximately $806 million
of RZ-EDB and $1.21 billion of RZ-FCs going to California's cities
and counties. California's allocation of the Qualified Energy
Conservation Bonds is $381 million of the $3.2 billion nationwide
volume cap.
Analysis Prepared by : Toni Symonds / J., E.D. & E. / (916)
319-2090
FN: 0003464