BILL ANALYSIS �
AB 495
Page 1
Date of Hearing: January 23, 2014
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
AB 495 (Campos) - As Amended: January 13, 2014
Policy Committee: Banking and
Finance Vote: 9-0
Housing and Community Development 6-1
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill establishes the California Community Investment
Program (CCIP) within the Governor's Office of Business and
Economic Development (GO-Biz). Specifically, this bill:
1)Requires the CCIP to be governed by a 14 member council, as
specified.
2)Requires the CCIP to encourage significant private sector
commitment, cooperation, and collaboration to invest private
capital in low-income neighborhoods through eligible triple
bottom-line (TBL) equity funds with a goal of obtaining at
least $1 billion in new investment by TBL investment funds in
real estate developments and business located in low-income
neighborhoods.
3)Requires the Director of GO-Biz to establish and implement a
process for establishing a public education program and
providing technical assistance to private sector investors.
4)Defines TBL to include, but not be limited to, equity and debt
investment vehicles that pursue market and above market rates
of financial return while at the same time producing good
jobs, affordable housing, and other economic, social and
environmental benefits for the residents of the communities
where the investments are made.
FISCAL EFFECT
Estimated administrative costs of approximately $500,000 for
AB 495
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(GF) GO-Biz.
COMMENTS
1)Purpose. According to the author, AB 459 bill is necessary
because poverty is increasing in California, and the state
lacks a coordinated economic development strategy to bring
social equity private investment to low-income neighborhoods.
The author notes, according to the supplemental poverty
measure, established by the U.S. Census Bureau in 2013 to
incorporate cost of living in the establishment of the rate of
poverty, the rate of poverty in California is 23.5%, which
means that nearly nine million people are poor. The author
argues one way to address poverty is to increase public and
private investment in resource poor neighborhoods through TPL
investing. The author contends TBL investing promotes a
market or above market rate of economic return, environmental
protection, and social equity. According to the author,
private investment won't flow into low-income neighborhoods
unless the state can help underwrite the risk of crime,
poverty, low job skills and poor infrastructure.
2)Support. Supporters, including the Personal Insurance
Federation of California, state AB 495 provides a positive
economic incentive to encourage community investment. They
argue by attracting resources to the most disadvantaged
neighborhoods in California, CCIP will help support
living-wage jobs, affordable housing, a healthier environment
and improved community services.
3)TBL is an accounting framework that incorporates three
dimensions of performance: social, environmental, and
financial. The difference from traditional reporting
frameworks is that TBL includes environmental and social
measures. One of the challenges of this type of accounting is
defining an appropriate measure of environmental and social
benefit. There is no universal standard method for
calculating TBL, nor is there a universal standard for the
measures that compromise the three TBL categories.
There are several regional investment funds, Bay Area Family
of Funds and Genesis LA that have invested in economic
development and affordable housing projects using a TBL
investment strategy. Several states, including Massachusetts,
Florida, and Michigan have created statewide offices to assist
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in triple bottom-line investing.
4)There is no registered opposition to this bill .
Analysis Prepared by : Roger Dunstan / APPR. / (916) 319-2081