BILL ANALYSIS Ó
SENATE GOVERNANCE & FINANCE COMMITTEE
Senator Lois Wolk, Chair
BILL NO: AB 893 HEARING: 6/22/11
AUTHOR: V. Manuel Pérez FISCAL: Yes
VERSION: 5/31/11 TAX LEVY: No
CONSULTANT: Ewing
INFRASTRUCTURE BANK'S PROGRAM
Requires Infrastructure Bank to offer technical support to
small and rural communities
Background and Existing Law
The California Infrastructure and Economic Development Bank
(I-Bank) supports economic development and public and
private infrastructure investments through its authority to
issue bonds, make loans and provide credit enhancements.
The I-Bank manages the following programs:
The Infrastructure State Revolving Fund Program
(ISRF) provides low-cost loan financing to local
agencies for public infrastructure projects.
The Industrial Development Revenue Bond Program
(IDB) provides tax-exempt revenue bond financing for
eligible manufacturing companies.
The 501(c)(3) Revenue Bond Program offers
tax-exempt revenue bond financing for certain
nonprofit, public benefit corporations.
The State School Fund Apportionment Lease Revenue
Bond Program offers tax-exempt revenue bond financing
for school districts needing emergency apportionment
loans.
The Public Agency Revenue Bond Program provides
tax-exempt revenue bond financing for governmental
entities.
The Infrastructure Guarantee Program guarantees
bonds issued by other governmental entities.
Housed within the Business Transportation and Housing
Agency (BTH), the I-Bank has a five-member board of
directors that approves projects. The board includes the
BTH Secretary, who serves as the chair, State Treasurer,
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director of the Department of Finance, Secretary of the
State and Consumer Services Agency and an appointee of the
Governor. The I-Bank's Executive Director is appointed by
the Governor and confirmed by the Senate.
The I-Bank does not receive direct state funding. Funding
comes from fees, interest income, and revenues tied to
financing activities.
The I-Bank must give the Legislature an annual report
detailing its activities.
Proposed Law
Assembly Bill 893 requires the I-Bank to provide technical
support to small and rural communities, and authorizes
service contracts with other state agencies, local, or
federal agencies. AB 893 also requires the I-Bank to
report its outreach activities through its annual report
and expand the distribution of that report to policy and
fiscal committees.
State Revenue Impact
No estimate.
Comments
1. Purpose of the bill . AB 893 enhances the I-Bank's
outreach to small and rural communities, which often are
ill-equipped to pursue infrastructure and economic
development investments. Improved outreach will ensure
that communities that often most need economic development
assistance get the support they need. AB 893 also enhances
the reporting requirements of the I-Bank, supporting
improved accountability.
2. Missed opportunities . Small and rural agencies often
are not able to pursue investment opportunities through the
Infrastructure Bank. Improved outreach, however, will not
address those challenges. Small and rural communities
often lack the revenue base to support those investments.
If the Legislature wants to improve economic development
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and infrastructure investments in small and rural
communities, it should consider more far-reaching
strategies, such as improvements in higher education
opportunities, business development, and state funded
infrastructure investments.
3. Related Legislation . AB 893 is not the only bill that
would affect the I-Bank:
AB 696 (Hueso) directs the I-Bank to establish a
methodology for determining the economic benefits of
projects under consideration and, as of January 1,
2013, restricts the I-Bank to approve only those
projects that provide economic benefits and meet land
use criteria.
AB 700 (Blumenfield) requires the I-Bank to adopt
two-year goals and measurable objectives, consistent
with state infrastructure, economic development and
environmental plans and authorizes the I-Bank to
pursue streamlined administrative functions.
AB 1094 (John A. Pérez) establishes the I-Bank as the
primary state agency to secure funding through any
federal infrastructure financing authority, and
expands the I-Bank's board from five to seven members.
Assembly Actions
Assembly Jobs, Economic Development & the Economy:4-1
Assembly Appropriations: 12-0
Assembly Floor: 52-24
Support and Opposition (6/16/11)
Support : California Association for Local Economic
Development; California Chamber of Commerce; CDC Small
Business Finance; Inland Empire Economic Partnership;
Jennifer Micheli; Northern California Small Business
Development Center Program; University of California,
Merced Small Business Development Center Regional Network;
Yuba-Sutter Economic Development Corporation.
Opposition : Unknown.
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