BILL ANALYSIS �
AB 750
Page 1
GOVERNOR'S VETO
AB 750 (Hueso)
As Amended August 15, 2011
2/3 vote
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|ASSEMBLY: |50-24|(June 1, 2011) |SENATE: |23-15|(September 8, |
| | | | | |2011) |
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|ASSEMBLY: |54-25|(September 9, | | | |
| | |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
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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 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
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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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| Comparison of State Bank Models in 2011 Legislation |
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|-------------+-----------+----------+-------------+------------|
| | Hawaii | Maine | Oregon | Washington |
|-------------+-----------+----------+-------------+------------|
|Bank Board |Director |5 |Governor |Governor, |
|or Executive |of Finance |Governor |(chair), |Lt. |
|Committee |(chair) & |appointees|Treasurer, |Governor |
| |10 | |Commissioner |and |
| |appointees | |Labor |Treasurer |
|-------------+-----------+----------+-------------+------------|
|Source of |State |State |Public funds |Any Source. |
|Deposits |Moneys + |Funds |& any Source |Only State |
| |Private | | |funds by |
| |Deposits | | |2015 |
|-------------+-----------+----------+-------------+------------|
|Loan Types |Based on |Loans to |Loans to |Loans in |
| |Adopted |Banks & |Banks & |the Public |
| |Rules |Participat|Participation|Interest |
| | |ion Loans | Loans |and Subject |
| | | | |to |
| | | | |Commission |
| | | | |rules |
|-------------+-----------+----------+-------------+------------|
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|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 |
| |Agency |Examinatio|audit by |Report and |
| | |n by |state |Annual |
| | |state |department |Report to |
| | |agency |and 2-year |State |
| | |and |audit by |Commission |
| | |2-year |Secretary of | |
| | |audit |State | |
|-------------+-----------+----------+-------------+------------|
|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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GOVERNOR'S VETO MESSAGE :
"This bill would mandate yet another "blue ribbon" task force:
in this case to examine whether California should establish a
state bank.
"This is a matter well within the jurisdiction and competence of
the Assembly and Senate Banking Committees.
"Rather than creating a new entity, let's use the resources we
have."
Analysis Prepared by : Toni Symonds / J., E.D. & E. / (916)
AB 750
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319-2090
FN: 0002940