BILL ANALYSIS Ó
AB 893
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Date of Hearing: May 27, 3011
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 893 (V Manuel Perez) - As Amended: May 10, 2011
Policy Committee: JEDE Vote:4-1
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill requires the California Infrastructure and Economic
Development Bank (I-Bank) to provide technical assistance to
small and rural communities in obtaining financing for
infrastructure projects. Specifically, this bill:
1)Expands the allowable uses for bond proceeds to include an
administering state agency's costs for outreach and technical
assistance directly related to the construction or acquisition
of capital assets.
2)Revises the membership of the I-Bank board, by removing the
Secretary of the Consumer Services Agency and adding a
representative from the economic development community, to be
appointed by the Speaker of the Assembly, and a representative
from the business community, to be appointed by the Senate
Rules Committee. Also adds three gubernatorial appointees and
adds, as ex officio nonvoting members, the chairpersons of the
Senate and Assembly policy committees that oversee
infrastructure and economic development issues.
3)Requires the I-Bank to provide technical support to small and
rural communities in the state in obtaining financing for
local infrastructure projects.
4)Requires the executive director to oversee and to ensure that
outreach is coordinated with other similar federal and state
infrastructure development resources.
5)Modifies the annual reporting requirements of the I-Bank.
6)Excludes moneys from the General Fund from being deposited in
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the Technical Assistance Account.
FISCAL EFFECT
On-going bond costs between $400,000 and $500,000 for the I-Bank
to hire the staff required to carry out this legislation.
Unknown, potentially significant travel costs for program staff
to travel to rural areas of the state to provide the required
technical assistance.
COMMENTS
1)Author's purpose : According to the author, "AB 893 modernizes
the operations of the I-Bank, by including the economic
development community on the board, mandating outreach to
communities, and adding new reporting requirements detailing
the number of jobs created and retained and industries served.
This bill will assist communities that have been
traditionally underserved by state programs in obtaining funds
for critically needed local infrastructure projects. The
communities this bill seeks to assist are typically small and
rural incorporated and/or unincorporated areas that have
difficulty affording additional staff or consultants.
Generally, these communities are competing against larger
communities for infrastructure funds."
2)California Infrastructure and Economic Development Bank . The
I-Bank was established in 1994 to promote economic
revitalization, facilitate future development, and encourage a
healthy climate for job creation and retention. The I-Bank is
organized within BTH and is managed by a five-member board of
directors comprised of the BTH Secretary (chair), State
Treasurer, Department of Finance Director, State and Consumer
Services Agency Secretary, and a governor's appointee.
The I-Bank operates several programs, including: the
Infrastructure State Revolving Fund (ISRF) Program, the
Industrial Development Revenue Bond Program, the
Infrastructure & Community 501(c)(3) Revenue Bond Program, and
the Exempt Facility Revenue Bond Program.
The I-Bank is financed through the California Infrastructure
and Economic Development Bank Fund, which receives fees,
interest income and other revenues from program income. The
I-Bank operates on a revolving fund basis and thereby
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generates continuous funding for new project investments.
Since its creation approximately a decade ago, the I-Bank has
issued over $300 million to local agencies in infrastructure
related revenue bonds, and has developed a level of expertise
in the implementation of successful local infrastructure
programs.
3) This bill may raise constitutional issues unless the language
of the various bond measures, as approved by the voters,
allowed for subsequent legislation authorizing bond
expenditures in the manner proposed.
4)Relevant Legislation. AB 1094 (John A. Pérez), expands the
membership of the board of directors of the I-Bank from five
to seven members. This bill and AB 893 have conflicting
provisions related to the membership of the board. AB 1094 is
set for hearing in this committee today.
AB 700 (Blumenfield), which establishes an independently
administered I-Bank, is also set for hearing in this committee
today.
5)Prior Legislation . AB 1047 (V. Manuel Pérez) of 2009,
established a local assistance program, within the I-Bank, to
assist small and rural communities obtain bond financing for
infrastructure projects. This bill was held on this
committee's suspense file.
In 2007, AB 1272 (Arambula), was similar to AB 893 and was
held on this committee's suspense file.
Analysis Prepared by : Roger Dunstan / APPR. / (916) 319-2081