BILL NUMBER: AB 893 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY APRIL 25, 2011
INTRODUCED BY Assembly Member V. Manuel Pérez
FEBRUARY 17, 2011
An act to amend Sections 63021.5, 63022, 63035, and 63040
of 16724, 63021.5, 63022, 63035, 63040, and 63050 of,
and to add Section 63037 to, the Government Code, relating to
state government , and making an appropriation therefor .
LEGISLATIVE COUNSEL'S DIGEST
AB 893, as amended, V. Manuel Pérez. State government:
California infrastructure and economic development bank.
(1) Existing law, the State General Obligation Bond Law, contains
procedures for use in authorizing the issuance and sale and providing
for the repayment of state general obligation bonds. The State
General Obligation Bond Law requires that a bond act include various
provisions.
This bill would incorporate a requirement into the State General
Obligation Bond Law that a bond act include a provision that includes
a plan on how the bond will be administered, including outreach and
oversight, to ensure that the objectives of the bond act will be
adhered to.
Existing
(2) Existing law establishes the
California Infrastructure and Economic Development Bank in the
Business, Transportation and Housing Agency. The board of directors
of the bank consists of, among others, the Secretary of State and
Consumer Services, or their designee. Existing law requires 3 members
of the board to constitute a quorum and to take action. Existing law
imposes certain duties and grants certain powers to the executive
director of the bank. Existing law establishes the Califor
nia Infrastructure and Economic Development Bank Fund in the
State Treasury, and requires that moneys in that fund are only used
for specified purposes.
This bill would alter the membership of the board of the directors
of the bank by removing and adding certain members. This bill would
also impose term limits on certain members of the board. This bill
would also require 4 members of the board to constitute a quorum and
to take action.
This bill would require the executive director of the bank to
oversee the annual outreach schedule of the bank, as specified.
This bill would require the bank to provide technical support to
small and rural communities in the state in obtaining financing for
local infrastructure projects. This bill would establish the
Technical Assistance Account in the California Infrastructure and
Development Bank Fund, and would continuously appropriate the moneys
in the account to the bank to be used to provide technical support to
small and rural communities. This bill would authorize the bank to
use moneys in the California Infrastructure and Economic Development
Bank Fund to support the Technical Assistance Account.
Existing
(3) Existing law requires the
California Infrastructure and Economic Development Bank to submit an
annual report to the Governor, and the Joint Legislative Budget
Committee, that contains specified requirements.
This bill would require the bank to also submit the report to
policy committees of the Legislature that oversee the bank, and would
alter the requirements of the report.
Existing
(4) Existing law
requires the bank to notify the Governor, the fiscal and policy
committees of the Legislature that exercise legislative oversight of
the bank, and appropriate state and local agencies, when the bank
establishes or makes changes to the criteria, priorities, and
guidelines for project selection.
This bill would require the bank to notify the Governor, the
fiscal and policy committees of the Legislature that exercise
legislative oversight of the bank, and appropriate state and local
agencies, 60 days prior to the adoption or modification of criteria,
priorities, and guidelines for project selection.
Vote: majority. Appropriation: no yes
. Fiscal committee: yes. State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 16724 of the
Government Code is amended to read:
16724. The bond act shall contain all of the following
provisions:
(a) A statement of the total amount of bonds authorized to be
issued and the purpose for which the proceeds from the sale of the
bonds may be used.
(b) The creation of a committee and fund, and the naming of the
board as these items are defined in Section 16722.
(c) A statement that the bonds are valid obligations of the state
and a pledge of the full faith and credit of the state for the
punctual payment of both principal and interest thereof.
(d) An appropriation from the General Fund in the State Treasury
of the sum annually as shall be necessary to pay the principal and
interest on the bonds as they become due and payable.
(e) A requirement that there be collected annually in the same
manner and at the same time as other state revenue is collected the
sum, in addition to the ordinary revenues of the state, as is
required to pay the principal and interest on the bonds; and a
provision making it the duty of all officers charged by law with any
duty in regard to the collections of the revenue to do and perform
each and every act which is necessary to collect that additional sum.
(f) If the bond act provides that the fund shall have any receipts
other than the proceeds of the sale of bonds, the proceeds of
interim financing, or the investment earnings on the proceeds of bond
sales or interim financing, then the bond act shall also specify
whether those receipts shall be transferred to the General Fund as a
reimbursement for debt service payments or be used for the same
purpose for which the proceeds of the sale of the bonds may be used.
(g) A provision incorporating the provisions of this chapter, and
a declaration that the provisions hereof are included in the act as
though set out in full therein.
(h) A statement that the bonds may be refunded in accordance with
Article 6 (commencing with Section 16780), and that approval of the
authorization of the bonds by the electors includes approval of any
bonds issued to refund the bonds originally issued.
(i) A statement that notwithstanding any other provision of the
bond act, or of the State General Obligation Bond Law (Chapter 4
(commencing with Section 16720) of Part 3 of Division 4 of Title 2 of
the Government Code), if the Treasurer sells bonds pursuant to this
bond act that include a bond counsel opinion to the effect that the
interest on the bonds is excluded from gross income for federal tax
purposes under designated conditions, the Treasurer may maintain
separate accounts for the bond proceeds invested and the investment
earnings on those proceeds, and may use or direct the use of those
proceeds or earnings to pay any rebate, penalty, or other payment
required under federal law, or take any other action with respect to
the investment and use of those bond proceeds, as may be required or
desirable under federal law in order to maintain the tax-exempt
status of those bonds and to obtain any other advantage under federal
law on behalf of the funds of this state.
(j) A statement that the board may request the Pooled Money
Investment Board to make a loan from the Pooled Money Investment
Account, in accordance with Section 16312, for the purposes of
carrying out the bond act. The amount of the request shall not exceed
the amount of the unsold bonds that the committee has by resolution
authorized to be sold for the purpose of carrying out the bond act.
The board shall execute any documents required by the Pooled Money
Investment Board to obtain and repay the loan. Any amounts loaned
shall be deposited in the fund to be allocated by the board in
accordance with the bond act.
(k) A provision that includes a plan on how the bond act will be
administered, including, but not limited to, outreach and oversight,
to ensure that the objectives of the bond act will be adhered to.
SECTION 1. SEC. 2. Section 63021.5
of the Government Code is amended to read:
63021.5. (a) The bank shall be governed and its corporate power
exercised by a board of directors that shall consist of the following
persons:
(1) The Director of Finance or his or her designee.
(2) The Treasurer or his or her designee.
(3) The Secretary of Business, Transportation and Housing or his
or her designee, who shall serve as chair of the board.
(4) An appointee of the Governor.
(5) (A) (i) A representative from the economic development
community appointed by the Speaker of the Assembly.
(ii) A representative from the business community appointed by the
chair of the Senate Committee on Rules.
(B) Appointments by the Speaker of the Assembly and the Senate
Committee on Rules shall be for two-year terms. Appointees may be
reappointed for no more than two terms.
(6) The chairpersons of the Senate and Assembly policy committees
that oversee infrastructure and economic development issues, as
determined by the Speaker of the Assembly and the Senate Committee on
Rules, shall serve as ex officio nonvoting members of the board.
(b) Any designated director shall serve at the pleasure of the
designating power.
(c) Four of the members shall constitute a quorum and the
affirmative vote of four board members shall be necessary for any
action to be taken by the board.
(d) A member of the board shall not participate in any bank action
or attempt to influence any decision or recommendation by any
employee of, or consultant to, the bank that involves a sponsor of
which he or she is a representative or in which the member or a
member of his or her immediate family has a personal financial
interest within the meaning of Section 87100. For purposes of this
section, "immediate family" means the spouse, children, and parents
of the member.
(e) Except as provided in this subdivision, the members of the
board shall serve without compensation, but shall be reimbursed for
actual and necessary expenses incurred in the performance of their
duties to the extent that reimbursement for these expenses is not
otherwise provided or payable by another public agency, and shall
receive one hundred dollars ($100) for each full day of attending
meetings of the authority.
SEC. 2. SEC. 3. Section 63022 of the
Government Code is amended to read:
63022. The executive director shall manage and conduct the
business and affairs of the bank, the infrastructure bank fund, and
guarantee trust fund, subject to the direction of the board.The
executive director shall oversee the annual outreach schedule of the
bank to ensure that outreach is coordinated with other similar
federal and state infrastructure development resources. Except as
otherwise provided in this section, the board may assign to the
executive director, by resolution, those duties generally necessary
or convenient to carry out its powers and purposes under this
chapter. Any action involving final approval of any bonds, notes, or
loans shall require the approval of a majority of the members of the
board. Subject to any conditions that the board may from time to time
prescribe, the executive director may exercise any power, function,
or duty conferred by law on the bank in connection with the
administration, management, and conduct of the business and affairs
of the bank, the infrastructure bank fund, and the guarantee trust
fund.
SEC. 3. SEC. 4. Section 63035 of the
Government Code is amended to read:
63035. The bank shall, not later than November 1 of each year,
submit to the Governor, the policy committees of the Legislature that
exercise legislative oversight of the bank, and the Joint
Legislative Budget Committee a report of its activities pursuant to
this division for the preceding fiscal year. The report shall include
all of the following:
(a) (1) A listing of applications accepted, including a
description of the expected employment impact of each project. The
expected employment impact shall detail the amount of jobs created,
retained, and indirectly impacted.
(2) A separate summary of applications for the Infrastructure
State Revolving Fund Program, including a summary of the number of
preliminary applications that did not receive funding and the reason
the applicant did not qualify.
(3) A list of public outreach activities engaged in during the
year, including outcomes.
(b) A specification of bonds sold and interest rates thereon.
(c) The amount of other public and private funds leveraged by the
assistance provided.
(d) A report of revenues and expenditures for the preceding fiscal
year, including all of the bank's costs. The information provided
pursuant to this subdivision shall include, but need not be limited
to, both of the following:
(1) The amount and source of total bank revenues. Revenues shall
be shown by main categories of revenues, including interest earnings,
fees collected, and bond proceeds, for each bank program.
(2) The amount and type of total bank expenditures. Expenditures
shall be shown by major categories of expenditures, including loans
provided, debt service payments, and program support costs, for each
bank program.
(e) A projection of the bank's needs and requirements for the
coming year.
(f) Recommendations for changes in state and federal law necessary
to meet the objectives of this division.
SEC. 5. Section 63037 is added to the
Government Code , to read:
63037. (a) The bank shall provide technical support to small and
rural communities in the state in obtaining financing for local
infrastructure projects.
(b) For purposes of this section, "technical support" means
assisting communities in developing strategic plans, writing grants,
applying for public and private loans and guarantees, issuing bonds,
and other activities directly related to obtaining funding for
infrastructure projects. Technical assistance in this regard shall
include extended interaction with a community throughout the
financing process, and shall be encouraged to maximize public-private
partnerships to the extent possible.
(c) The bank shall develop a competitive process for selecting
communities to be assisted under this section, based on
infrastructure need and community readiness to undertake the
infrastructure project. First priority shall be given to projects
that remediate severe health and safety problems. Second priority
shall be given to projects that promote economic development. Third
priority shall be given to projects that promote general health and
safety. The bank shall make every effort to widely advertise the
availability of the services provided by this section and encourage
applications from historically underserved communities.
(d) The bank shall provide for no fewer than three professional
positions and one staff position to implement this section.
(e) (1) Funds to support the services provided by this section
related to assisting communities in obtaining the proceeds of bonds
authorized pursuant to Section 1 of Article XVI of the California
Constitution, and transferred pursuant to subdivision (c) of Section
63050, shall be deposited in the Technical Assistance Account, which
is hereby created in the California Infrastructure and Economic
Development Bank Fund. Notwithstanding Section 13340, moneys in the
account are continuously appropriated to the bank in amounts
representing the pro rata share of each source of funds, and moneys
transferred pursuant to subdivision (c) of Section 63050 shall not be
used for any other purpose than the furtherance of the purpose of
the respective bond acts by this section.
(2) Other funds, excluding General Fund revenues, may be deposited
in the Technical Assistance Account and may be used to provide
technical assistance to communities for infrastructure projects
financed with funding sources other than those authorized pursuant to
Section 1 of Article XVI of the California Constitution.
(f) The bank shall individually track each funding source and its
use to ensure that all funding conditions are met and that only
eligible communities and eligible purposes are authorized.
(g) The bank may contract with other state agencies, local
agencies, or federal authorities for the purpose of providing
technical support to small and rural communities in the state
pursuant to this section.
SEC. 4. SEC. 6. Section 63040 of the
Government Code is amended to read:
63040. (a) Following consultation with appropriate state and
local agencies, the bank shall establish criteria, priorities, and
guidelines for the selection of projects to receive assistance from
the bank. Projects shall comply with the criteria, priorities, and
guidelines adopted by the bank.
(b) The criteria, priorities, and guidelines shall, at a minimum,
be based upon the following:
(1) The State Environmental Goals and Policy Report, or its
successor, approved pursuant to Article 5 (commencing with Section
65041) of Chapter 1.5 of Division 1 of Title 7. This requirement
shall not apply if the update to the report is more than two years
overdue.
(2) If the sponsor is a state agency, board, commission, or
department, the Capital and Infrastructure Project Planning Report,
prepared by the Director of Finance pursuant to Article 2 (commencing
with Section 13100) of Chapter 2 of Part 3 of Division 3 of Title 2.
(c) When the bank proposes to establish or modify changes to the
criteria, priorities, and guidelines, the bank shall notify the
Governor, the fiscal and policy committees of the Legislature that
exercise legislative oversight of the bank, and appropriate state and
local agencies 60 days prior to the adoption or modification.
(d) The resolution required in Section 63041 shall have been
adopted prior to the project's selection by the bank.
SEC. 7. Section 63050 of the Government
Code is amended to read:
63050. (a) There is hereby created in the State Treasury the
California Infrastructure and Economic Development Bank Fund for the
purpose of implementing the objectives and provisions of this
division. Within the fund there shall also be established a Sponsor
Revenue Bond Account, a Participating Party Revenue Bond Account, a
State Infrastructure Revolving Account, a technical Assistance
Account, and additional accounts and subaccounts that the bank
may establish from time to time.
(b) Notwithstanding Section 13340 and except as provided in
subdivision (c), all moneys in the infrastructure bank fund are
continuously appropriated without regard to fiscal years for the
support of the bank and shall be available for expenditure for the
purposes stated in this division.
(c) Moneys in the infrastructure bank fund shall be available for
expenditure for general administration only upon appropriation by the
Legislature. This subdivision shall not limit the authority of the
bank to expend funds directly related to the servicing of approved
debt. Moneys in the fund shall be available for the purpose of
general administration of the authority only upon appropriation by
the Legislature, but not more than 5 percent of any bond proceeds
administered by the authority may be expended to cover the costs of
issuance, as that terminology is defined under Section 147 (G) of the
Internal Revenue Code. Moneys in the fund shall be available
for the purpose of providing technical support to small and rural
communities in the state pursuant to Section 63037.
(d) Notwithstanding any other provision of this division, not more
than 15 percent of the financing annually approved by the executive
director that utilizes state funds from the infrastructure bank fund
may be expended upon educational facilities, environmental mitigation
measures, and parks and recreational facilities.
(e) The executive director may transfer funds between the
infrastructure bank fund and the guarantee trust fund when
appropriate to accomplish the financing objectives of this division.