BILL ANALYSIS Ó
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
AB 893 (V.M. Perez)
Hearing Date: 08/15/2011 Amended: 05/31/2011
Consultant: Mark McKenzie Policy Vote: G&F 7-0; GO 13-0
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BILL SUMMARY: AB 893 would require the California Infrastructure
and Development Bank (I-Bank) to provide technical support to
small and rural communities in obtaining financing for local
infrastructure projects, and include information on public
outreach activities in the I-Bank's annual report.
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Fiscal Impact (in thousands)
Major Provisions 2011-12 2012-13 2013-14 Fund
Enhanced outreach/support $100-$200 $300-$400
$300-$400 Special*
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* California Infrastructure and Economic Development Bank Fund
(I-Bank Fund)
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STAFF COMMENTS: This bill meets the criteria for referral to the
Suspense File.
Existing law creates the I-Bank within the Business,
Transportation and Housing Agency, to promote economic
revitalization, enable future development, and encourage a
health climate for jobs in California. The I-Bank administers
the Infrastructure State Revolving Fund Program, which provides
direct low-cost loan financing for public infrastructure
projects, and several programs that provide tax-exempt revenue
bond financing for manufacturing companies, nonprofit
organizations, and specified public agencies.
The Rural Development Assistance Program (RDAP) was a program
operated by the Department of Housing and Community Development
(HCD) in the 1970s and 1980s. RDAP, jointly funded by several
federal agencies, provided a team of HCD staff experts for field
assignments in rural communities that wished to develop
infrastructure projects intended to stimulate economic growth.
AB 893 (V.M. Perez)
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These staff professionals helped identify available funding
sources for the projects, coordinated investment strategies, and
assisted with grant applications.
AB 893 would require the I-Bank to provide enhanced technical
assistance to small and rural 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. This level of support would include extended
interaction with a community throughout the financing process,
and a maximization of public-private partnerships. This bill is
modeled on the former RDAP.
Staff notes that several bills in recent years have included
provisions to require the I-Bank to provide technical assistance
to small and rural communities. Both AB 1047 (V.M Perez, 2009)
and AB 1272 (Arambula, 2007) were held on the Assembly
Appropriations Committee suspense file, while AB 237 (Arambula,
2006) was held on this committee's suspense file. AB 237
included a minimum staffing requirement of three professional
and one staff position for the technical assistance component
which is nearly identical to the requirements of this bill.
The I-Bank indicates that while actual costs related to this
bill are unknown, they could be significant. Staff assumes that
the I-Bank would require similar staffing levels that were
previously envisioned for AB 237 to administer a technical
assistance program, at a cost of $300,000 to $400,000 annually.
Furthermore, costs to administer a technical assistance program
would detract from other bond infrastructure financing programs.
For example, funds in the I-Bank Fund are used to leverage
tax-exempt revenue bonds that support the Infrastructure State
Revolving Fund loan program on a 3:1 ratio. In other words, for
every dollar spent on technical assistance, there would be a
corresponding loss of $3 in available funds to loan to local
agencies for public infrastructure projects.
AB 893 would also require the I-Bank to submit its annual report
to the appropriate fiscal and policy committees of the
Legislature and to include a list of public outreach activities
in that report. Staff estimates that costs to add details on
outreach and to submit the report to legislative committees
would be minor.
AB 893 (V.M. Perez)
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