BILL ANALYSIS �
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|SENATE RULES COMMITTEE | AB 2749|
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CONSENT
Bill No: AB 2749
Author: Assembly Jobs, Economic Development, and the Economy
Committee
Amended: 4/10/14 in Assembly
Vote: 21
SENATE BUSINESS, PROF. & ECON. DEVELOP. COMM. : 9-0, 6/16/14
AYES: Lieu, Wyland, Berryhill, Block, Corbett, Galgiani,
Hernandez, Hill, Torres
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 78-0, 5/15/14 (Consent) - See last page for
vote
SUBJECT : Economic development
SOURCE : Author
DIGEST : This bill makes technical changes relating to the
transfer of economic development related programs from the
Business, Transportation and Housing Agency (BTH) to the
Governor's Office of Business and Economic Development (GO-Biz).
ANALYSIS :
Existing law:
1.Places the definitions for specified terms relating to
economic development within Part 4.7 of Division 3 of Title 2
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of the California Government Code, concerning Business and
Tourism. This is reflective of BTH's previous role as
administrator of economic development programs within the
executive branch of California government.
2.Establishes GO-Biz for the purpose of serving as the lead
state entity for economic strategy and marketing of California
on issues relating to business development, private sector
investment and economic growth. GO-Biz also serves as the
administrative oversight for the California Business
Investment Service and the Office of the Small Business
Advocate.
3.Designates the Director of GO-Biz as the official state
administrator of the Economic Adjustment Assistance Grant and
the Small Business Expansion Fund.
4.Establishes the California Small Business Finance Center
within the California Infrastructure and Investment Bank
(I-Bank) for the purpose of overseeing programs locally
delivered through a network of small business financial
development corporations (FDCs).
This bill:
1.Makes technical corrections to the transfer of the
administration of the Economic Adjustment Assistance Grant and
the Sudden and Severe Economic Dislocation Grant Program from
the BTH to GO-Biz.
2.Renumbers within statute the following definitions (no changes
have been made to the definitions):
Local economic development organization
Financial intermediary
Regional economic development organization
Regional economic development corporation
Small businesses
Economic development corporation
Community development
Triple bottom line
Financial institution capital
Economic development
Community development intermediary
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Local economic development
Microbusiness lender
Emerging domestic market
California Council on Science and Technology
1.Modifies the annual reporting requirements of the I-Bank
including consolidating requirements; making submittal of the
report to the Legislature rather than the Joint Legislative
Audit Committee; requiring that aggregate-level reporting be
provided on revolving loan fund activities rather than the
current requirement to report, in detail, on every application
received during the reporting period; and requiring the annual
report be posted on its Web site.
2.Removes the requirement for the Small Business Advocate to
consult with the Department of Transportation on the Small and
Emerging Manager Contractor Technical Assistance Program, a
program that sunsetted on January 1, 2013.
3.Makes other technical and conforming changes to the Government
Code.
Background
Economic Adjustment Assistance Grant . The federal Economic
Adjustment Assistance Grant program was initially designated to
be administered through the Technology, Trade, and Commerce
Agency, which was eliminated in 2003. Although the State
Controller retained the federal money, no state entity had the
legal authority to actually use the money.
In 2008, BTH was designated as the state administrator of the
funds and the moneys were transferred to the California
Expansion Fund where they could be used under contract through
the state's network of FDCs. Code clean-up to the Governor's
GRP 2 transferred the authority to use the federal funds and the
responsibility to oversee the FDC contracts from BTH to GO-Biz.
However, AB 1247 (Medina, Chapter 537, Statutes of 2013)
transferred the FDC programs to the I-Bank, a unit within
GO-Biz. This bill gives the executive director of the I-Bank
the authority to administer the federal funds through the FDCs.
I-Bank . The I-Bank was established in 1994 to promote economic
revitalization, enable future development, and encourage a
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healthy climate for jobs in California. Housed within GO-Biz,
it is governed by a five-member board of directors comprised of
the Director of GO-Biz (Chair), State Treasurer, Director of the
Department of Finance, Secretary of the Department of
Transportation Agency, and a Governor's appointee. The
day-to-day operations of the I-Bank are directed by the
Executive Director who is an appointee of the Governor and is
subject to confirmation by the California State Senate.
Currently, the I-Bank has authority for 25 staff members.
The I-Bank does not receive any ongoing General Fund support,
rather it is financed through fees, interest income, and other
revenues derived from its public and private sector financing
activities. According to its Comprehensive Annual Financial
Report for the fiscal year ended June 2013, its programs
continued to provide revenues sufficient to cover operating
expenses.
The I-Bank administers three programs: (1) the Infrastructure
State Revolving Fund which provides direct low-cost financing to
public agencies for a variety of public infrastructure projects;
(2) the Conduit Bond Program which provides financing for
manufacturing companies, public benefit nonprofit organizations,
public agencies and other eligible entities; and (3) the Small
Business Finance Center which helps small businesses access
private financing through loan guarantees, direct loans, and
performance bond guarantees. There is no commitment of I-Bank
or state funds for any of the conduit revenue bonds. Even in
the case of default, the state is not liable.
Since its creation in 1994, the I-Bank has loaned, financed, or
participated in over $344 billion in infrastructure and economic
expansion projects. This includes over $400 million to local
and state agencies; developing a high-level of expertise in the
financing of public infrastructure. The I-Bank also serves as
the state's only general purpose financing authority with broad
statutory powers to issue revenue bonds, make loans, and provide
guarantees. Over $33 billion in conduit revenue bonds have been
issued by the I-Bank since 2000.
Comments
According to the author's office, this bill makes a number of
technical changes to conform existing law with the previously
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enacted legislation.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
ASSEMBLY FLOOR : 78-0, 5/15/14
AYES: Achadjian, Alejo, Allen, Ammiano, Bigelow, Bloom,
Bocanegra, Bonilla, Bonta, Bradford, Brown, Buchanan, Ian
Calderon, Campos, Chau, Ch�vez, Chesbro, Conway, Cooley,
Dababneh, Dahle, Daly, Dickinson, Donnelly, Eggman, Fong, Fox,
Frazier, Beth Gaines, Garcia, Gatto, Gomez, Gonzalez, Gordon,
Gorell, Gray, Grove, Hagman, Hall, Harkey, Roger Hern�ndez,
Holden, Jones, Jones-Sawyer, Levine, Linder, Logue, Lowenthal,
Maienschein, Medina, Melendez, Mullin, Muratsuchi, Nazarian,
Nestande, Olsen, Pan, Patterson, Perea, John A. P�rez, V.
Manuel P�rez, Quirk, Quirk-Silva, Rendon, Ridley-Thomas,
Rodriguez, Salas, Skinner, Stone, Ting, Wagner, Waldron,
Weber, Wieckowski, Wilk, Williams, Yamada, Atkins
NO VOTE RECORDED: Mansoor, Vacancy
MW:nl 7/2/14 Senate Floor Analyses
SUPPORT/OPPOSITION: NONE RECEIVED
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