BILL NUMBER: SB 1484	INTRODUCED
	BILL TEXT


INTRODUCED BY   Senator Pavley

                        FEBRUARY 24, 2012

   An act to amend Sections 63000 and 63010 of the Government Code,
relating to infrastructure finance.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 1484, as introduced, Pavley. California Infrastructure and
Economic Development Bank: clean energy technology.
   The Bergeson-Peace Infrastructure and Economic Development Bank
Act establishes the California Infrastructure and Economic
Development Bank Fund for the purpose of funding specified types of
infrastructure development projects. Existing law makes several
legislative findings and declarations relating to the need for
providing greater access to capital in specified industries and
defines terms for purposes of the act.
   This bill would modify one of the legislative findings and
declarations relating to the need for providing greater access to
capital in specified industries and define the term "clean energy
technology."
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 63000 of the Government Code is amended to
read:
   63000.  The Legislature finds and declares the following:
   (a) Economic revitalization, future development, and a healthy
climate for jobs in California will depend upon a well-conceived
system of public improvements that are essential to the economic
well-being of the citizens of the state and are necessary to
maintain, as well as create, employment within the state for
business.
   (b) It is necessary for public policy to support the efforts of
businesses attempting to expand, businesses seeking to locate in
California, and local economic development organizations, public
agencies, and new entrepreneurs by dedicating public fiscal resources
to confront obstacles and barriers that impede economic growth.
   (c) Existing mechanisms that coordinate federal, state, local, and
private financial resources are inadequate to attract and sustain
that level of private investment that is essential to a growth
economy.
   (d) In order to secure and enhance the economic well-being of
Californians, promote economic development in the state, and provide
a healthy climate for the creation of jobs, it is necessary for
public policy to support the efforts of expanding businesses,
businesses seeking to locate in California, local development
organizations, public bodies, and new entrepreneurs to gain access to
capital through current and potential operations of financial
markets.
   (e) The high cost and the lack of availability of industrial loans
for small- and medium-size businesses is making it difficult for
thousands of these enterprises to get established, to maintain their
present employment levels, or to expand employment.
   (f) The problem of access to capital is acute in the high
technology industry clusters because companies must often finance
large capital expenditures early in their development cycle, and
cannot obtain financing sufficient to cover the cost of those
expenditures. Consideration should be given to industry clusters that
may include the following:
   (1) Health care technology.
   (2) Multimedia.
   (3) Environmental technology.
   (4) Information technology. 
   (5) Clean energy technology. 
   (g) The high cost and limited availability of loans and capital
has led a number of states to take action to remedy these conditions
through concerted public and private investment programs that include
efforts to do the following:
   (1) Use the state's access to capital markets more effectively for
economic development.
   (2) Create financing pools to access national capital markets or
help government sponsors and public-private economic development
organizations obtain credit enhancement on their own.
   (3) Facilitate credit enhancement for selected specific projects.
   (4) Provide or arrange for loan insurance.
   (5) Create and support secondary markets for loan portfolios of
urban and rural economic development corporations and others.
   (6) Improve access to international capital markets.
   (7) Provide opportunities for public pension funds and other
institutional investors to play a larger role in state economic
development.
   (8) Arrange for or provide subordinated debt for selected
projects.
   (9) Increase support for local infrastructure development.
   (h) Local governments in California bear a primary responsibility
for the business of promoting job creation and economic development
efforts. California's continued reliance on autonomous local entities
often fails to adequately consider regional impacts of business
expansion. Projects of a regional nature need the benefit of a state
coordinating function to augment and enhance local economic
development and environmental efforts.
   (i) The State of California has not embarked on a major
infrastructure financing effort since the decade of the 1960's,
despite persistent unemployment and soaring population growth.
   (j) California's ability to compete in a global economy depends
upon its capacity to implement policies that take maximum advantage
of public and private resources at the local, regional, state, and
national levels. These policies should be coordinated with any future
legislative plan involving growth management strategies designed to
make economic growth compatible with environmental protections. It is
the intent of the Legislature in enacting this act to create a
mechanism to finance projects needed to implement economic
development and job creation and growth management strategies, and to
provide a secure and stable funding source for implementation of
this act in order to meet critical economic, social, and
environmental concerns.
   (k) The State of California needs a financing entity structured
with broad authority to issue bonds, provide guarantees, and leverage
state and federal funds using techniques that will target public
investment to facilitate economic development. The goal is to produce
more private sector jobs with less public sector investment.
   (  l  ) The mechanisms for financing public improvements
and private job creation strategies provided for in this act are in
the public interest, serve a public purpose, and will promote the
health, welfare, and safety of the citizens of the state.
   (m) The public policies and responsibilities of the state,
including all of the above purposes and functions, cannot be fully
obtained without the use of financing assistance and can be most
effectively furthered by the creation of the California
Infrastructure and Economic Development Bank.
  SEC. 2.  Section 63010 of the Government Code is amended to read:
   63010.  For purposes of this division, the following words and
terms shall have the following meanings unless the context clearly
indicates or requires another or different meaning or intent:
   (a) "Act" means the Bergeson-Peace Infrastructure and Economic
Development Bank Act.
   (b) "Bank" means the California Infrastructure and Economic
Development Bank.
   (c) "Board" or "bank board" means the Board of Directors of the
California Infrastructure and Economic Development Bank.
   (d) "Bond purchase agreement" means a contractual agreement
executed between the bank and a sponsor, or a special purpose trust
authorized by the bank or a sponsor, or both, whereby the bank or
special purpose trust authorized by the bank agrees to purchase bonds
of the sponsor for retention or sale.
   (e) "Bonds" means bonds, including structured, senior, and
subordinated bonds or other securities; loans; notes, including bond,
revenue, tax or grant anticipation notes; commercial paper; floating
rate and variable maturity securities; and any other evidences of
indebtedness or ownership, including certificates of participation or
beneficial interest, asset backed certificates, or lease-purchase or
installment purchase agreements, whether taxable or excludable from
gross income for federal income taxation purposes.
   (f) "Cost," as applied to a project or portion thereof financed
under this division, means all or any part of the cost of
construction, renovation, and acquisition of all lands, structures,
real or personal property, rights, rights-of-way, franchises,
licenses, easements, and interests acquired or used for a project;
the cost of demolishing or removing any buildings or structures on
land so acquired, including the cost of acquiring any lands to which
the buildings or structures may be moved; the cost of all machinery,
equipment, and financing charges; interest prior to, during, and for
a period after completion of construction, renovation, or
acquisition, as determined by the bank; provisions for working
capital; reserves for principal and interest and for extensions,
enlargements, additions, replacements, renovations, and improvements;
and the cost of architectural, engineering, financial and legal
services, plans, specifications, estimates, administrative expenses,
and other expenses necessary or incidental to determining the
feasibility of any project or incidental to the construction,
acquisition, or financing of any project, and transition costs in the
case of an electrical corporation.
   (g) "Economic development facilities" means real and personal
property, structures, buildings, equipment, and supporting components
thereof that are used to provide industrial, recreational, research,
commercial, utility, or service enterprise facilities, community,
educational, cultural, or social welfare facilities and any parts or
combinations thereof, and all facilities or infrastructure necessary
or desirable in connection therewith, including provision for working
capital, but shall not include any housing.
   (h) "Electrical corporation" has the meaning set forth in Section
218 of the Public Utilities Code.
   (i) "Executive director" means the Executive Director of the
California Infrastructure and Economic Development Bank appointed
pursuant to Section 63021.
   (j) "Financial assistance" in connection with a project, includes,
but is not limited to, any combination of grants, loans, the
proceeds of bonds issued by the bank or special purpose trust,
insurance, guarantees or other credit enhancements or liquidity
facilities, and contributions of money, property, labor, or other
things of value, as may be approved by resolution of the board or the
sponsor, or both; the purchase or retention of bank bonds, the bonds
of a sponsor for their retention or for sale by the bank, or the
issuance of bank bonds or the bonds of a special purpose trust used
to fund the cost of a project for which a sponsor is directly or
indirectly liable, including, but not limited to, bonds, the security
for which is provided in whole or in part pursuant to the powers
granted by Section 63025; bonds for which the bank has provided a
guarantee or enhancement, including, but not limited to, the purchase
of the subordinated bonds of the sponsor, the subordinated bonds of
a special purpose trust, or the retention of the subordinated bonds
of the bank pursuant to Chapter 4 (commencing with Section 63060); or
any other type of assistance deemed appropriate by the bank or the
sponsor, except that no direct loans shall be made to nonpublic
entities other than in connection with the issuance of rate reduction
bonds pursuant to a financing order or in connection with a
financing for an economic development facility.
   For purposes of this subdivision, "grant" does not include grants
made by the bank except when acting as an agent or intermediary for
the distribution or packaging of financing available from federal,
private, or other public sources.
   (k) "Financing order" has the meaning set forth in Section 840 of
the Public Utilities Code.
   (  l  ) "Guarantee trust fund" means the California
Infrastructure Guarantee Trust Fund.
   (m) "Infrastructure bank fund" means the California Infrastructure
and Economic Development Bank Fund.
   (n) "Loan agreement" means a contractual agreement executed
between the bank or a special purpose trust and a sponsor that
provides that the bank or special purpose trust will loan funds to
the sponsor and that the sponsor will repay the principal and pay the
interest and redemption premium, if any, on the loan.
   (o) "Participating party" means any person, company, corporation,
association, state or municipal governmental entity, partnership,
firm, or other entity or group of entities, whether organized for
profit or not for profit, engaged in business or operations within
the state and that applies for financing from the bank in conjunction
with a sponsor for the purpose of implementing a project. However,
in the case of a project relating to the financing of transition
costs or the acquisition of transition property, or both, on the
request of an electrical corporation, or in connection with a
financing for an economic development facility, or for the financing
of insurance claims, the participating party shall be deemed to be
the same entity as the sponsor for the financing.
   (p) "Project" means designing, acquiring, planning, permitting,
entitling, constructing, improving, extending, restoring, financing,
and generally developing public development facilities or economic
development facilities within the state or financing transition costs
or the acquisition of transition property, or both, upon approval of
a financing order by the Public Utilities Commission, as provided in
Article 5.5 (commencing with Section 840) of Chapter 4 of Part 1 of
Division 1 of the Public Utilities Code.
   (q) "Public development facilities" means real and personal
property, structures, conveyances, equipment, thoroughfares,
buildings, and supporting components thereof, excluding any housing,
that are directly related to providing the following:
   (1) "City streets" including any street, avenue, boulevard, road,
parkway, drive, or other way that is any of the following:
   (A) An existing municipal roadway.
   (B) Is shown upon a plat approved pursuant to law and includes the
land between the street lines, whether improved or unimproved, and
may comprise pavement, bridges, shoulders, gutters, curbs,
guardrails, sidewalks, parking areas, benches, fountains, plantings,
lighting systems, and other areas within the street lines, as well as
equipment and facilities used in the cleaning, grading, clearance,
maintenance, and upkeep thereof.
   (2) "County highways" including any county highway as defined in
Section 25 of the Streets and Highways Code, that includes the land
between the highway lines, whether improved or unimproved, and may
comprise pavement, bridges, shoulders, gutters, curbs, guardrails,
sidewalks, parking areas, benches, fountains, plantings, lighting
systems, and other areas within the street lines, as well as
equipment and facilities used in the cleaning, grading, clearance,
maintenance, and upkeep thereof.
   (3) "Drainage, water supply, and flood control" including, but not
limited to, ditches, canals, levees, pumps, dams, conduits, pipes,
storm sewers, and dikes necessary to keep or direct water away from
people, equipment, buildings, and other protected areas as may be
established by lawful authority, as well as the acquisition,
improvement, maintenance, and management of floodplain areas and all
equipment used in the maintenance and operation of the foregoing.
   (4) "Educational facilities" including libraries, child care
facilities, including, but not limited to, day care facilities, and
employment training facilities.
   (5) "Environmental mitigation measures" including required
construction or modification of public infrastructure and purchase
and installation of pollution control and noise abatement equipment.
   (6) "Parks and recreational facilities" including local parks,
recreational property and equipment, parkways and property.
   (7) "Port facilities" including docks, harbors, ports of entry,
piers, ships, small boat harbors and marinas, and any other
facilities, additions, or improvements in connection therewith.
   (8) "Power and communications" including facilities for the
transmission or distribution of electrical energy, natural gas, and
telephone and telecommunications service.
   (9) "Public transit" including air and rail transport of goods,
airports, guideways, vehicles, rights-of-way, passenger stations,
maintenance and storage yards, and related structures, including
public parking facilities, equipment used to provide or enhance
transportation by bus, rail, ferry, or other conveyance, either
publicly or privately owned, that provides to the public general or
special service on a regular and continuing basis.
   (10) "Sewage collection and treatment" including pipes, pumps, and
conduits that collect wastewater from residential, manufacturing,
and commercial establishments, the equipment, structures, and
facilities used in treating wastewater to reduce or eliminate
impurities or contaminants, and the facilities used in disposing of,
or transporting, remaining sludge, as well as all equipment used in
the maintenance and operation of the foregoing.
   (11) "Solid waste collection and disposal" including vehicles,
vehicle-compatible waste receptacles, transfer stations, recycling
centers, sanitary landfills, and waste conversion facilities
necessary to remove solid waste, except that which is hazardous as
defined by law, from its point of origin.
   (12) "Water treatment and distribution" including facilities in
which water is purified and otherwise treated to meet residential,
manufacturing, or commercial purposes and the conduits, pipes, and
pumps that transport it to places of use.
   (13) "Defense conversion" including, but not limited to,
facilities necessary for successfully converting military bases
consistent with an adopted base reuse plan.
   (14) "Public safety facilities" including, but not limited to,
police stations, fire stations, court buildings, jails, juvenile
halls, and juvenile detention facilities.
   (15) "State highways" including any state highway as described in
Chapter 2 (commencing with Section 230) of Division 1 of the Streets
and Highways Code, and the related components necessary for safe
operation of the highway.
   (16) (A) Military infrastructure, including, but not limited to,
facilities on or near a military installation, that enhance the
military operations and mission of one or more military installations
in this state. To be eligible for funding, the project shall be
endorsed by the Office of Military and Aerospace Support established
pursuant to Section 13998.2.
   (B) For purposes of this subdivision, "military installation"
means any facility under the jurisdiction of the Department of
Defense, as defined in paragraph (1) of subsection (e) of Section
2687 of Title 10 of the United States Code.
   (r) "Rate reduction bonds" has the meaning set forth in Section
840 of the Public Utilities Code.
   (s) "Revenues" means all receipts, purchase payments, loan
repayments, lease payments, and all other income or receipts derived
by the bank or a sponsor from the sale, lease, or other financing
arrangement undertaken by the bank, a sponsor or a participating
party, including, but not limited to, all receipts from a bond
purchase agreement, and any income or revenue derived from the
investment of any money in any fund or account of the bank or a
sponsor and any receipts derived from transition property. Revenues
shall not include moneys in the General Fund of the state.
   (t) "Special purpose trust" means a trust, partnership, limited
partnership, association, corporation, nonprofit corporation, or
other entity authorized under the laws of the state to serve as an
instrumentality of the state to accomplish public purposes and
authorized by the bank to acquire, by purchase or otherwise, for
retention or sale, the bonds of a sponsor or of the bank made or
entered into pursuant to this division and to issue special purpose
trust bonds or other obligations secured by these bonds or other
sources of public or private revenues. Special purpose trust also
means any entity authorized by the bank to acquire transition
property or to issue rate reduction bonds, or both, subject to the
approvals by the bank and powers of the bank as are provided by the
bank in its resolution authorizing the entity to issue rate reduction
bonds.
   (u) "Sponsor" means any subdivision of the state or local
government including departments, agencies, commissions, cities,
counties, nonprofit corporations formed on behalf of a sponsor,
special districts, assessment districts, and joint powers authorities
within the state or any combination of these subdivisions that makes
an application to the bank for financial assistance in connection
with a project in a manner prescribed by the bank. This definition
shall not be construed to require that an applicant have an ownership
interest in the project. In addition, an electrical corporation
shall be deemed to be the sponsor as well as the participating party
for any project relating to the financing of transition costs and the
acquisition of transition property on the request of the electrical
corporation and any person, company, corporation, partnership, firm,
or other entity or group engaged in business or operation within the
state that applies for financing of any economic development
facility, shall be deemed to be the sponsor as well as the
participating party for the project relating to the financing of that
economic development facility.
   (v) "State" means the State of California.
   (w) "Transition costs" has the meaning set forth in Section 840 of
the Public Utilities Code.
   (x) "Transition property" has the meaning set forth in Section 840
of the Public Utilities Code. 
   (y) "Clean energy technology" means technologies that reduce
substantially greenhouse gas emissions, including, but not limited
to, energy efficiency, renewable energy, alternative fuels, advanced
vehicles and related infrastructure, distributed generation, energy
storage, combined heat and power, and integrated demand-side
management, and the essential components of those technologies.