BILL ANALYSIS �
AB 750
Page 1
ASSEMBLY THIRD READING
AB 750 (Hueso)
As Amended May 27, 2011
Majority vote
ECONOMIC DEVELOPMENT 4-2 BANKING & FINANCE 10-1
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|Ayes:|V. Manuel P�rez, Beall, |Ayes:|Eng, Achadjian, Charles |
| |Block, Hueso | |Calderon, Fong, Gatto, |
| | | |Roger Hern�ndez, Lara, |
| | | |Morrell, Perea, Torres |
|-----+--------------------------+-----+--------------------------|
|Nays:|Grove, Morrell | | |
| | | | |
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APPROPRIATIONS 12-5
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|Ayes:|Fuentes, Blumenfield, | | |
| |Bradford, Charles | | |
| |Calder�n, Campos, Davis, | | |
| |Gatto, Hall, Hill, Lara, | | |
| |Mitchell, Solorio | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Harkey, Donnelly, | | |
| |Nielsen, Norby, Wagner | | |
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SUMMARY : Establishes the Investment Trust Blue Ribbon Task Force
for the purpose of considering the viability of establishing the
California Investment Trust (Trust). Specifically, this bill :
1)Requires the Secretary of the Business, Transportation and
Housing Agency (BTH) to convene a 13-member Investment Trust
Blue Ribbon Task Force (Task Force) comprised of appointees of
the Governor, Senate Rules Committee, the Speaker of the
Assembly, as well as the State Controller, State Treasurer, and
Secretary of BTH. The first meeting is required to be convened
by February 1, 2012.
2)Provides that the purpose of the Trust is to consider the
AB 750
Page 2
viability of establishing the Trust, which would serve as, among
other things, a state bank receiving deposits of state funds,
and to report to the Legislature on its findings and
recommendations by December 2012.
3)Authorizes the Task Force to consult with stakeholders and
establish an advisory committee. Advisory committee members are
not entitled to expense reimbursement for their participation.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, there is no state fiscal impact. This bill requires
that funding be found for the Task Force from either nonprofit or
private sources.
COMMENTS : AB 750 (Hueso) proposes to convene a Task Force to
assess the viability of establishing a state bank that receives
deposits of state moneys for the purpose of, among other things,
spurring greater private economic activity and to reduce the cost
of managing the state's funds.
This measure is one of several similar measures introduced this
year in Legislatures across the nation. Modeled after the nearly
100-year old Bank of North Dakota (BND), legislators from states
such as Washington, Oregon, Hawaii, Maine and Maryland have
introduced bills to either establish state banks or study the
establishment of a state bank. Common themes among the reasons
stated for the establishment of the banks include the need to
support economic development, provide stability to the local
financial sectors, and to generate additional revenues for the
state General Fund. Particularly attractive about the state bank
model is its potential to help fill key access to capital gaps for
entities such as small business start-ups and microenterprises.
The two central challenges in establishing a state bank are the
source of its initial capitalization and the role of the state
bank within the context of other public and private financial
institutions. Below is a chart which illustrates the range of
models being proposed in other state legislatures in 2011.
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| Comparison of State Bank Models in 2011 Legislation |
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|--------------+-----------+----------+-------------+------------|
AB 750
Page 3
| | Hawaii | Maine | Oregon | Washington |
|--------------+-----------+----------+-------------+------------|
|Bank Board or |Director |5 |Governor |Governor, |
|Executive |of Finance |Governor |(chair), |Lt. |
|Committee |(chair), |appointees|Treasurer, |Governor |
| |10 | |Commissioner |and |
| |Governor | |of the |Treasurer |
| |appointees | |Bureau of | |
| | | |Labor and | |
| | | |Industries | |
|--------------+-----------+----------+-------------+------------|
|Source of |All State |State |All Public |Any Source, |
|Deposits |Moneys |Funds |Funds and |but all |
| |plus | |Any Source |State Funds |
| |Private | | |by June 30, |
| |Deposits | | |2015 |
|--------------+-----------+----------+-------------+------------|
|Loan Types |Based on |Loans to |Loans to |Loans in |
| |Adopted |Banks and |Banks and |the Public |
| |Rules |participat|Participation|Interest |
| | |ion loans | Loans |and subject |
| | | | |to |
| | | | |Commission |
| | | | |rules |
|--------------+-----------+----------+-------------+------------|
|Profits |Not Stated |Determined|Determined |Determined |
|Returned to | | by the |by the Board |by the |
|State | |Board |with advice |Commission |
| | | |from | |
| | | |Advisory | |
| | | |Board | |
|--------------+-----------+----------+-------------+------------|
|Audit |State |Quarterly |Quarterly |Quarterly |
| |Commissione|examinatio|audit by |Report and |
| |r of |n by |State |Annual |
| |Financial |State |Department |Report to |
| |Institution|Bureau of |of Consumer |State |
| |s |Financial |and Business |Commission |
| | |Institutio|Services and | |
| | |ns and |Secretary of | |
| | |audit |State Audit | |
| | |every 2 |every 2 | |
| | |years |years | |
|--------------+-----------+----------+-------------+------------|
AB 750
Page 4
|Backed by |Yes |Not |Yes |Yes |
|Full Faith | |Stated | | |
|and Credit of | | | | |
|the State | | | | |
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|Compiled from information provided on Web site of the Center |
|for State Innovation 4/19/11 |
| |
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Under the terms of the bill, the Task Force is directed to
undertake a general assessment of the state's current network of
public and private financial resources and consider the types of
financial products that are needed or could more efficiently be
provided. To the extent that the Task Force determines that a
state bank would provide benefits to the state's existing
financial networks, they will make recommendations on structure,
capitalization and financial products.
Analysis Prepared by : Toni Symonds / J., E.D. & E. / (916)
319-2090
FN: 0001131