BILL ANALYSIS �
AB 750
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 750 (Hueso)
As Amended August 15, 2011
Majority vote
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|ASSEMBLY: |50-24|(June 1, 2011) |SENATE: |23-15|(September 8, |
| | | | | |2011) |
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Original Committee Reference: J., E.D. & E.
SUMMARY : Establishes a 13-member Investment Trust Blue Ribbon
Task Force (Task Force) for the purpose of considering and issuing
its recommendation of the viability of establishing the California
Investment Trust (Trust) by December 2012.
The Senate amendments :
1)Reduce the number of appointments the Senate Rules Committee and
the Speaker of the Assembly make to the Task Force from two to
one. In addition, the bill reduces the number of appointments
made by the Governor to the Task Force from five to three.
2)Add flexibility to Task Force appointment process.
3)Require that the selection of Task Force staff to be made by at
least a two-thirds vote of the membership.
4)Specify that the report shall represent the views of a majority
of the Task Force members, although the private entity selected
to staff the Task Force may include their own findings in the
report.
5)Expand and change the required elements of the report including,
but not limited to, considering whether the Trust should be
created as a new entity or as a modification to an existing
state entity.
AS PASSED BY THE ASSEMBLY , this bill:
1)Required the Secretary of the Business, Transportation and
Housing Agency (BTH) to convene a Task Force comprised of
appointees of the Governor, Senate Rules Committee, the Speaker
of the Assembly, as well as the State Controller, State
AB 750
Page 2
Treasurer, and Secretary of the Business, Transportation and
Housing.
2)Provided that the purpose of the Task Force is to consider the
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)Authorized 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 Senate Appropriations Committee,
implementation of this bill will result in unknown costs which
could be as high as several hundred thousand dollars.
COMMENTS : This bill 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 that have been considered by other states in 2011 and which
would be part of the larger discussion by the Task Force.
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AB 750
Page 3
| Comparison of State Bank Models in 2011 Legislation |
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|--------------+-----------+----------+-------------+------------|
| | 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 | |
AB 750
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| | |years |years | |
|--------------+-----------+----------+-------------+------------|
|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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Analysis Prepared by : Toni Symonds / J., E.D. & E. / (916)
319-2090
FN: 0002860