BILL ANALYSIS Ó
SENATE GOVERNANCE & FINANCE COMMITTEE
Senator Lois Wolk, Chair
BILL NO: AB 2290 HEARING: 6/25/14
AUTHOR: John A. Pérez FISCAL: Yes
VERSION: 2/21/14 TAX LEVY: No
CONSULTANT: Ewing
INFRASTRUCTURE AND ECONOMIC DEVELOPMENT BANK'S BOARD
Adds two non-voting legislative members to the
Infrastructure Bank's board of directors.
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 several programs, including:
The Infrastructure State Revolving Fund Program
(ISRF) provides low-cost financing to local agencies
for public infrastructure projects.
The Industrial Development Bond Program (IDB)
provides tax-exempt revenue bond financing for
eligible manufacturing and processing companies.
The 501(c)(3) Revenue Bond Program offers
tax-exempt revenue bond financing for certain
nonprofit, public benefit corporations.
The Exempt Facility Bond Program provides
tax-exempt financing for projects that are
government-owned or consist of private improvements
within publicly-owned facilities, such as private
airline improvements at publicly owned airports.
The Public Agency Revenue Bond Program provides
tax-exempt and taxable bond financing to specified
programs for state and local governmental agencies.
Formerly housed within the Business, Transportation and
Housing Agency, Governor's Reorganization Plan 2 of 2012
moved the I-Bank into the Governor's Office of Business and
Economic Development. The I-Bank has a five-member board
of directors, including the Director of the Governor's
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Office of Business and Economic Development, who serves as
chair, the Treasurer, or his designee, the Director of the
Department of Finance, or his designee, the Secretary of
the Transportation Agency, or his designee, 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 generally does not receive direct state funding.
Funding comes from fees, interest income, and other
revenues tied to financing activities.
Proposed Law
Assembly Bill 2290 allows the Assembly Speaker and the
Senate Rules Committee to each appoint a non-voting
legislative member to the California Infrastructure and
Economic Development Bank's board of directors. The bill
specifies that legislative members can advise the board to
the extent that their advisory participation is not
incompatible with their duties as members of the
Legislature. AB 2290 also designates the I-Bank as the
primary state agency for developing an application to any
federal infrastructure bank or financing authority.
State Revenue Impact
No estimate.
Comments
1.Purpose of the bill . AB 2290 adds two non-voting
legislative members to the five-member board of the
Infrastructure Bank. Expanding the board of directors with
legislative members will create opportunities for
legislative input, improve the Legislature's awareness of
economic development opportunities, and enhance the
Legislature's ability to perform its oversight role.
2. Improving oversight . It is unclear how adding
legislative members to the I-Bank's board can improve
oversight. The Legislature has significant tools to pursue
oversight of the I-Bank. Each year the I-Bank must justify
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its costs as part of the budget process, where legislators
assess how well it delivers legislatively enacted programs
when allocating operational and programmatic funding.
Additionally, policy committees can hold oversight hearings
at any time on the I-Bank and its programs. The
Legislature can ask the State Auditor, the Little Hoover
Commission or the Legislative Analyst's Office to examine
the I-Bank and its operations and propose ways to improve
its effectiveness. The Committee may wish to consider the
marginal value of adding legislative appointees to the
I-Bank's board.
3. Let's be clear . AB 2290 designates the I-Bank as the
"primary" agency for the purposes of applying for funding
to any "federal infrastructure bank or financing
authority." The word primary is ambiguous. It is not
clear whether other state agencies are expected to share
information with the I-Bank or work through the I-Bank
before applying for federal funds. As far back as 2008,
Congress considered proposals to establish a national
infrastructure bank. Additional proposals are currently
being considered. It is further not clear if the intent of
AB 2290 is to establish the I-Bank as the primary agency
for applications only to a federal infrastructure bank or
to all federal financing authorities.
4. Related legislation . AB 2290 is not the only bill that
would affect the I-Bank:
AB 311 (V. Manuel Perez, 2013) expands the role of
the California Infrastructure and Economic Development
Bank (I-Bank) to include facilitating infrastructure
and economic development financing activities within
the California and Mexico border region. AB 311 was
held in Assembly Appropriations.
AB 1272 (Medina, 2013) expands the authority of the
I-Bank to participate in regional, national and
international organizations related to infrastructure
financing and support projects involving goods
movement. AB 1272 was held in Assembly
Appropriations.
AB 1094 (John A. Pérez, 2011), adds two non-voting
legislative members of the Infrastructure Bank's board
of directors. AB 1094 passed Senate Governance and
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Finance 5-3, and was amended to address school
recycling. AB 1094 died in the Senate Rules
Committee.
AB 696 (Hueso, 2011) 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 696 was vetoed by Governor
Brown.
AB 700 (Blumenfield, 2011) 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 700 was vetoed by Governor Brown.
AB 893 (V. Manuel Pérez, 2011) directs the I-Bank
to enhance outreach and technical assistance to small
and rural communities to obtain financing for
infrastructure projects. AB 893 died in Senate
Appropriations.
Assembly Actions
Assembly Floor: 57-20
Assembly Appropriations: 12-5
Assembly Committee on Jobs, Economic
Development and the Economy: 6-1
Support and Opposition (6/19/14)
Support : Unknown.
Opposition : Unknown.