Bill Text: CA AB750 | 2011-2012 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Finance: investment trust blue ribbon task force.

Status: (Vetoed) 2011-09-26 - Vetoed by Governor. [AB750 Detail]

Download: California-2011-AB750-Amended.html
BILL NUMBER: AB 750	AMENDED
	BILL TEXT

	AMENDED IN SENATE  AUGUST 15, 2011
	AMENDED IN SENATE  JULY 12, 2011
	AMENDED IN ASSEMBLY  MAY 27, 2011
	AMENDED IN ASSEMBLY  MAY 5, 2011
	AMENDED IN ASSEMBLY  APRIL 25, 2011
	AMENDED IN ASSEMBLY  MARCH 31, 2011

INTRODUCED BY   Assembly Member Hueso
   (Coauthors: Assembly Members Gatto, Roger Hernández, Lara, and
Perea)
   (Coauthors: Senators Evans, Hancock, and Pavley)

                        FEBRUARY 17, 2011

   An act to add and repeal Division 5 (commencing with Section
64160) of Title 6.7 of the Government Code, relating to finance.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 750, as amended, Hueso. Finance: investment trust blue ribbon
task force.
   The California Constitution provides for the election by the
people of the Treasurer and the Controller. Existing law requires the
Treasurer to receive and keep in the vaults of the treasury or to
deposit in banks or credit unions all moneys belonging to the state,
as specified. Existing law requires the Controller to superintend the
fiscal concerns of the state. Existing law requires the Controller
to audit all claims against the state, and authorizes the Controller
to audit the disbursement of any state money, for correctness,
legality, and for sufficient provisions of law for payment.
   This bill would establish the investment trust blue ribbon task
force to consider the viability of establishing the California
Investment Trust, which would be a state bank receiving deposits of
state funds. The task force would be required to consider how the
investment trust could strengthen economic and community development,
provide financial stability to businesses, reduce the cost paid by
state government for banking services, and provide for excess
earnings of the trust to be used to supplement General Fund purposes.
The bill would establish the membership of the task force, which
would include the Secretary of Business, Transportation and Housing,
or his or her designee, and specified individuals with a background
in finance appointed by the Legislature, and the Governor,
Controller, and Treasurer, or their designees, and would require the
task force to be staffed by an organization selected by the task
force that is a nonprofit corporation, or other private corporation
that has specified expertise, including expertise in public finance
and public institutions models. The bill would require the task force
to report to the Legislature by December 1, 2012, on specified
issues relative to the California Investment Trust, including, among
other things, its recommendations relating to the viability of
establishing the trust  and its impact on state government
services  , as specified. The bill's provisions would become
inoperative, and would be repealed, on January 1, 2017.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


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

  SECTION 1.  The Legislature finds and declares all of the
following:
   (a) California communities have suffered greatly since the
financial crisis of 2007. During the last several years, monthly
unemployment levels have remained above 10 percent leaving millions
of Californians out of work. Bankruptcies among small businesses are
up, capital markets are tight, and local communities have limited
resources to address their economic and community development
challenges.
   (b) While Californians have been especially hard hit in this
recession, residents of other states have also suffered. In
responding to the sluggish capital markets, several states  ,
including Maine, Oregon, Rhode Island, and Washington,  are
examining the appropriateness of creating a state bank.
   (c) The creation of the California Investment Trust could serve to
more effectively meet the financial needs of the state, including,
but not limited to, the following:
   (1) Supporting the economic development of California by
increasing access to capital for businesses in the state.
   (2) Providing financing for housing development, public works
infrastructure, educational infrastructure, student loans, and
community quality of life projects.
   (3) Providing stability to the local financial sector.
   (4) Reducing the cost paid by state government for banking
services.
   (5) Lending capital to banks, credit unions, and nonprofit
community development financial institutions to assist in meeting
their goals of increasing access to capital and providing banking
services.
  SEC. 2.  Division 5 (commencing with Section 64160) is added to
Title 6.7 of the Government Code, to read:

      DIVISION 5.  Investment Trust Blue Ribbon Task Force


   64160.  (a) There is hereby established the investment trust blue
ribbon task force. The task force shall be convened by the Secretary
of Business, Transportation and Housing.
   (b) The task force shall be composed of the following members:
   (1) The Secretary of Business, Transportation and Housing or his
or her designee.
   (2) The Senate Committee on Rules shall appoint one individual
representing and having a background in one or more areas of finance,
including, but not limited to, working in for-profit and nonprofit
financial and academic institutions,  or working in 
 local government finances, or  economic development.
   (3) The Speaker of the Assembly shall appoint one individual
representing and having a background in one or more areas of finance,
including, but not limited to, working in for-profit and nonprofit
financial and academic institutions,  or working in 
 local government finances, or  economic development.
   (4) The Governor shall appoint three members representing and
having a background in one or more areas of finance, including, but
not limited to, individuals working in for-profit and nonprofit
financial and academic institutions,  and  
local government finances, or  economic development 
practitioners  .
   (5) The Controller, Treasurer, and Governor, or their designees,
shall be members of the task force.
   (c) (1) The task force shall choose its chair from among its
membership. The Secretary of Business, Transportation and Housing and
the members of the task force shall convene the initial meeting of
the task force on or before February 1, 2012.
   (2) A quorum shall constitute a majority plus one of the members
serving on and appointed to the task force at the time the meeting is
convened.
   (3) A quorum is not necessary for conducting meetings except for
meetings where the draft report and final report are to be voted
upon.
   (d) The purpose of the task force shall be to consider the
viability of establishing the California Investment Trust, which
would be a state bank receiving deposits of state funds, and to
report to the Legislature pursuant to Section 64161.
   (e) In undertaking its work, the task force shall consider one or
more models for structuring the California Investment Trust. Among
other things, the task force shall do the following:
   (1) Undertake a general assessment of the state's current network
of public and private financial resources  and assess the 
 impact on government services, including public and private
banking services,  for the purpose of identifying potential
areas of state trust focus. Among other resource issues, the task
force shall consider, at a minimum, how a state trust could be
designed to do the following:
   (A) Strengthen the economic and community development needs of
California.
   (B) Provide greater financial stability to businesses through its
investments in other financial institutions.
   (C) Reduce the cost paid by state government for banking services.

   (D) Generate earnings beyond those necessary for continued
operation of the trust, which could be used to supplement the General
Fund.
   (2) Support a strong private sector financial community that will
provide capital for businesses in California.
   (3) Examine various administrative and operational structures for
organizing a trust, including, but not limited to, boards of
directors, sources of deposits, oversight and audit of financial
activities, and guarantees of financial products.
   (4) Consider options for integrating a state trust model into the
existing state financial resource network, including, but not limited
to, ideas such as lending capital to banks, credit unions, and
nonprofit community development financial institutions.
   (f) (1) The task force shall be staffed by an organization
selected by the task force that shall be a nonprofit corporation or
other private organization that has specific expertise in public
finance and public institutions models and other expertise as
necessary to provide the management, information, analysis, review,
and reporting required to meet the goals of the task force. The
selection of an organization to staff the task force shall be agreed
to by at least two-thirds of the membership of the task force.
   (2) Appointed task force members shall be reimbursed solely for
the actual travel costs for attending meetings. Costs associated with
state government officials attending meetings shall be paid by the
respective government entities.
   (g) The task force may consult with individuals from the public
and private sector and establish an advisory committee to assist the
task force in creating the report required under Section 64161. If
the task force establishes an advisory committee, the members of the
committee shall not be entitled to any expense reimbursement.
   64161.  (a) The task force shall, pursuant to Section 9795, report
to the Legislature by December 1, 2012. The report shall represent
the views of a majority of the task force members.
   (b) The report shall address, at a minimum, all of the following:
   (1) A recommendation on the viability of establishing the
California Investment Trust  and its impact on state government
services, including public and private banking services  .
   (2) A list of issues and, to the extent determined, findings
relative to the considerations identified in subdivision (e) of
Section 64160.
   (c) To the extent that the task force recommendation is supportive
of the establishment of the California Investment Trust, the task
force shall also provide information on the next steps for
establishing the trust, including, but not limited to,
recommendations on the following:
   (1) The administrative structure of the trust.
   (2) The capital requirements for the trust's initial
capitalization and for ongoing operations.
   (3) How the initial capitalization can be achieved and how
operating costs could be paid.
   (4) Whether the California Investment Trust should be created as a
separate entity or by  modifying   involving,
using, modifying,  or expanding the California Infrastructure
and Economic Development Bank  , the Pooled Money Investment
Account, the State Treasury system, or the functions of any other
state agency  .
   (5) The manner in which the trust should be regulated to protect
the safety and soundness of the institution and its depositors, and
to avoid conflicts of interest that could arise from state  or
federal  regulation of the trust.
   (6) The extent to which the trust should be allowed to compete
with retail banking establishments operating in California.
   (7) The oversight of the trust to protect the interests of the
state and the rights of individuals and entities that may access the
products or services, or both, of the trust.
   (8) An outline of transition actions necessary for establishing
the trust.
   (9) A draft of statutory and constitutional changes that may be
necessary to establish the trust.
   (d) The report may include findings from the organization selected
to staff the task force pursuant to subdivision (f) of Section 64160
relative to the information specified in subdivisions (b) and (c),
but shall represent the conclusions and recommendations of the
majority of the task force membership.
   64162.  This division shall become inoperative and is repealed on
January 1, 2017, pursuant to Section 10231.5. 
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