BILL ANALYSIS �
------------------------------------------------------------
|SENATE RULES COMMITTEE | SB 1484|
|Office of Senate Floor Analyses | |
|1020 N Street, Suite 524 | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
------------------------------------------------------------
THIRD READING
Bill No: SB 1484
Author: Pavley (D)
Amended: 4/9/12
Vote: 21
SENATE GOVERNMENTAL ORGANIZATION COMM : 12-1, 04/24/12
AYES: Wright, Berryhill, Calderon, Cannella, Corbett, De
Le�n, Evans, Hernandez, Padilla, Walters, Wyland, Yee
NOES: Anderson
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
SUBJECT : California Infrastructure and Economic
Development Bank
SOURCE : Author
DIGEST : This bill transfers the California
Infrastructure and Economic Development Bank from the
Business, Transportation & Housing Agency to the Governors
Office of Business and Economic Development.
ANALYSIS : The Bergeson-Peace Infrastructure and Economic
Development Bank Act created the California Infrastructure
and Economic Development Bank Fund within the Business,
Transportation and Housing Agency. Among other things, the
Infrastructure Bank Board is empowered to do the following:
1.Acquire and sell land, structures, real or personal
property, rights-of-way, franchises, easements, and other
CONTINUED
SB 1484
Page
2
interests in lands that are located within the state, or
transition property as the bank may deem necessary or
convenient for the financing of an infrastructure
development project, upon terms and conditions that it
considers to be reasonable.
2.Receive and accept loans or contributions from any source
for an infrastructure development project.
3.Make loans to any sponsor or participating party, either
directly or by making a loan to a lending institution, in
connection with the financing of a project, either as a
sole lender or in participation with other lenders.
4.Make loans to any sponsor or participating party, either
directly or by making a loan to a lending institution, to
refinance indebtedness incurred by the sponsor or
participating party in connection with projects
undertaken and completed prior to any agreement with the
bank, or expectation that the bank would provide
financing.
5.Mortgage all or any portion of the bank's interest in a
project and the property on which any project is located,
whether owned or thereafter acquired, including the
granting of a security interest in any property, tangible
or intangible.
6.Make, receive, or serve as a conduit for the making of,
grants, contributions, guarantees, insurance, credit
enhancements or liquidity facilities, or other financial
enhancements to a sponsor or a participating party as
financial assistance for a project.
7.Lease a project being financed to a sponsor or a
participating party, upon terms and conditions that the
bank deems proper but shall not be leased at a loss;
charge and collect rents; terminate any lease upon the
failure of the lessee to comply with any of the
obligations thereof, etc.
8.Enter into any agreement or contract for insurance or any
guarantee.
CONTINUED
SB 1484
Page
3
9.Enter into purchase and sale agreements with all
entities, public and private, including state and local
government pension funds, with respect to the sale or
purchase of bonds or transition property.
Background
The California Infrastructure and Economic Development Bank
(I-Bank) supports economic development through its
authority to issue bonds, make loans and provide credit
enhancements. The I-Bank generally supports two types of
projects, public development facilities, which are
municipal in nature, such as sewers, roadways and ports,
etc., and economic development facilities, which are not
municipal in nature, such as industrial or commercial
facilities. These two types of projects supported by the
I-Bank reflect the consolidation of the California Economic
Development and Financing Authority (CEDFA) into the
Infrastructure and Economic Development Bank.
Prior to consolidation, the I-Bank was established to
support public infrastructure development, and the CEDFA
was established to support private infrastructure in the
interest of promoting economic development. Consolidation
was intended to result in a "one-stop shop" for
infrastructure investments. Despite the consolidation,
state law establishes different criteria for public versus
private infrastructure projects.
Author's statement : Under current law, before issuing
loans or otherwise assisting in infrastructure development
for the State, the Infrastructure Bank must go through
multiple layers of regulatory approval, not only within the
Infrastructure Bank itself, but also through the Business,
Transportation and Housing Agency. This bill would
streamline the regulatory process by moving the
Infrastructure Bank under the Governor's Office of Business
and Economic Development (GO Biz). Last year, the
Legislature created GO Biz to coordinate and promote
business development and to encourage private-sector
investment and job growth. This bill would take full
advantage of this new office's capacity to bring
infrastructure jobs to the State. Consolidating the
Infrastructure Bank under GO Biz will give the state a
CONTINUED
SB 1484
Page
4
stronger and more unified ability to promote and improve
the State's economy.
Moreover, while the Governor has submitted a plan to the
Little Hoover Commission that includes the provisions of
this bill, there is no guarantee that the Little Hoover
Commission will recommend this plan to the Legislature.
This bill ensures that this critical component of the
reorganization plan is codified into law.
Governor's Reorganization Plan : On March 30, 2012,
Governor Brown transmitted a Governor's Reorganization Plan
(GRP) to the Little Hoover Commission. According to the
proposal:
Before Go Biz was created, programs to bring jobs to
the State, enhance exports, and market California
goods were dispersed in various areas of the
government such as the Office of Economic Development,
the Commission on Economic Development, the former
Trade and Commerce Agency, and other entities.
This GRP strengthens and expands Go Biz by
incorporating into it other growth-promoting programs.
These include the Infrastructure Bank, the Film
Commission, the Tourism Commission, the Small Business
Centers, and the Small Business Guarantee Loan
Program. Consolidating these programs will strengthen
GO Biz and give the state a stronger and more unified
ability to promote and improve the State's economy.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
DLW:nl 5/8/12 Senate Floor Analyses
SUPPORT/OPPOSITION: NONE RECEIVED
**** END ****
CONTINUED
SB 1484
Page
5
CONTINUED