Bill Text: CA AB495 | 2013-2014 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Community investment.

Spectrum: Partisan Bill (Democrat 2-0)

Status: (Engrossed - Dead) 2014-08-14 - In committee: Held under submission. [AB495 Detail]

Download: California-2013-AB495-Amended.html

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BILL NUMBER: AB 495	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  SEPTEMBER 3, 2013
	AMENDED IN ASSEMBLY  MARCH 21, 2013

INTRODUCED BY   Assembly Member Campos

                        FEBRUARY 20, 2013

   An act to add Article 6 (commencing with Section 12099.1) to
Chapter 1.6 of Part 2 of Division 3 of Title 2 to the Government
Code, relating to  Community   community 
investment.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 495, as amended, Campos. Community investment.
   Existing law authorizes the Governor's Office of Business and
Economic Development to, among other things, advance statewide
economic goals.
   This bill would establish the California Community Investment
Initiative within the Governor's Office of Business and Economic
development. The initiative would be governed by a 13 member 
oversight board     Coordination and Oversight
Council  comprised of 6 citizens appointed by the Governor, 4
members of the Legislature, the Treasurer, the Controller, and the
Secretary of the Business, Consumer Services, and Housing Agency, as
specified.
   The initiative would be required to create  an inventory
  a database  of low-income neighborhoods, 
public interments, state and local programs, and sources of
public-sector finance,   compile and maintain an
inventory of California public sector funding resources and financing
mechanisms,  coordinate  public-sector  
public sector  financial investment and public programs to
assist low-income communities to become business, development, and
investment ready, develop criteria for  determining the type
of economically, socially, and environmentally responsible businesses
and real estate developments to assist in starting-up, locating, and
growing in low-income neighborhoods, establish a broad array of
incentives to encourage responsible businesses and real estate
developments to grow in low income neighborhoods and to encourage
investment in low income neighborhoods, assist with formulating
Community Development Strategies with associated Zoning and Area
Plans, report annually to the Legislature and the Governor on whether
the initiative has met the criteria established for measuring the
economic, social, and environmental returns, and establish the
California Community Investment Network, as specified  
triple bottom-line   equity funds, establish overall triple
bottom-line goals and standardized metrics for economic, social, and
environmental outcomes to be accepted by eligible equity funds,
survey counties and cities to identify and inventory local
governments that want to partner with triple bottom-line equity funds
to invest in low-income neighborhoods, establish and convene regular
meetings of the California Community Investment Network comprised of
organizations and institutions with expertise and resources to
advise the Coordination and Oversight Council and eligible equity
fund managers, and report annually to the Legislature and the
Governor on the status and progress of the California Community
Investment Initiative and performance on goals and triple bottom-line
outcomes, as specified  .
   This bill would also make legislative findings and declarations.
   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.  This act shall be known and may be cited as the
California Community Investment Initiative.
  SEC. 2.  The Legislature finds and declares all of the following:
   (a) Despite having the largest state economy in the United States,
California has the highest poverty rate of any state, with nearly a
quarter of its residents living in poverty.
   (b) In this era of public budget constraints, 
public-sector   public sector  dollars are
insufficient to solve the problems of low-income neighborhoods.
Therefore,  private-sector   private sector
 market forces need to be engaged to make substantial
investments that produce a risk adjusted market rate of return.
   (c) Low-income neighborhoods constitute domestic emerging markets
with significant purchasing power and location efficiencies, but
suffer from social, public safety, broadband, and physical
infrastructure problems that contribute to market prejudices that
lead to disinvestment.
   (d) To overcome these problems and market prejudices, low-income
neighborhoods need to become business, development, and
investment-ready through a partnership of government, 
private-sector   private sector  , community, and
the environmental leaders focused on generating coordinated, focused,
effective human services, public safety, broadband, workforce,
education, and physical infrastructure.
   (e) A new class of  business and  real estate
 and business  developments  are   is
 emerging that  are  actively  pursuing
  pursues  economically, socially, and
environmentally responsible outcomes.  These real estate and
business developments often are the result of investments from
private   sector equity funds that generate market-rate
returns to investors, but are   also legally committed to
improving social and environmental conditions and characteristics for
the existing residents in these neighborhoods. These private 
 sector investment mechanisms often are refereed to as "triple
bottom-line" equity funds. 
   (f) Businesses and real estate developments of this type
that   Triple bottom-line equity funds and the real
estate and business developments resulting from them  are
helping to reduce poverty and improve the social and environmental
dynamics of low-income  neighborhoods can benefit from
coordinated state assistance.   neighborhoods. Triple
bottom-line equity investments can be encouraged and the benefits
from them can be enhanced and accelerated by coordinated assistance
from existing State of California programs and funding resources.

   (g) Many of these neighborhoods are at transit hubs or have the
transit and mixed-use characteristics in place to make development in
them more climate friendly than development elsewhere.
   (h) The State of California should encourage responsible
businesses and real estate developments to locate and do business in
business and development-ready low-income neighborhoods in ways that
solve economic, social, and environmental problems rather than
 causing   cause  them.
   (i) To accomplish this,  the State of  California
 needs a   intends to establish the 
California Community Investment Initiative  and regional
Community Development Strategies to assist low-income neighborhoods
and the cities, counties, and regions where they are located to
become business, development, and investment-ready.   to
assist low-income neighborhoods by encouraging private  
sector investment consistent with the economic development and
community improvement strategies of the cities, counties, and regions
where they are located. It is the intent of the State of California
that such private   sector investment is accomplished
without permanent displacement of existing residents in low-income
neighborhoods. 
  SEC. 3.  Article 6 (commencing with Section 12099.1) is added to
Chapter 1.6 of Part 2 of Division 3 of Title 2 of the Government
Code, to read:

      Article 6.  California Community Investment Initiative


   12099.1.  (a) The California Community Investment Initiative is
hereby  created   established  within the
Governor's Office of Business and Economic Development  to
encourage private   sector investment in low-income
neighborhoods to improve the economic, environmental, and social
conditions for the existing residents, thereby helping improve the
overall economic, environmental, and social well-being for California
 . The California Community Investment Initiative shall be 
supported and  staffed by the Governor's Office of Business and
Economic Development using existing resources.
   (b) The California Community Investment Initiative shall be
governed by a 13 member  oversight board made up of:
  Coordination and Oversight Council comprised of 
 : 
   (1) Six persons appointed by the Governor, comprised of three
citizens with  private-sector   private sector
 business or investment expertise and three citizens with
community development expertise.
   (2) Four members of the Legislature, two from the Senate appointed
by the President pro Tempore of the Senate, one from each of the two
political parties with the most representatives in the Senate, and
two from the Assembly appointed by the Speaker of the Assembly, one
from each of the two political parties with the most representatives
in the Assembly. The members shall have relevant program expertise to
contribute to the initiative. The members shall be nonvoting members
of the  oversight board   Coordination and
Oversight Council  and shall participate in the activities of
the  board   council  only to the extent
that their participation is compatible with their respective
positions as Members of the Legislature.
   (3) The Treasurer.
   (4) The Controller.
   (5) The Secretary of the Business, Consumer Services, and Housing
Agency.
   12099.2.  The California Community Investment Initiative shall do
all of the following:
   (a)  Create an inventory   Develop and
annually update a database  of low-income 
neighborhoods, public interments, state and local programs, and
sources of public-sector finance, including descriptions of asset
size, underwriting criteria, decisionmaking process, and other
characteristics. The   neighborhoods in California by
county and city with relevant information about each neighborhood,
including socio-economic demographic data, descriptions of pertinent
characteristics to inform private sector invests, such as local land
use plans and zoning or other development designations, and
commitments from local governments to support private sector
investments. The Coordination and Oversight Council shall adopt
criteria for an eligible low-income neighborhood. 
    (b)     Compile and maintain a current
inventory of   California public sector funding resources
and financing mechanisms that may be allocated to or utilized in
low-income   neighborhoods with a description of the amount
of available funding, criteria for allocation, and application and
decision   making criteria. The  inventory shall
 examine all of the following:   assess the role
and impact of all of the following entities and programs on
low-income neighborhoods   : 
   (1) California Department of Insurance Organized Investment.
   (2) Federal and State Low-Income Housing Tax Credit Program.
   (3) California Alternative Energy and Advanced Transportation
Financing Authority.
   (4) California Pollution Control Financing Authority.
   (5) California Transportation Financing Authority.
   (6) Industrial Development Finance Authority.
   (7) The California Infrastructure and Economic Development Bank.

   (8) Health and Human Services Agency.  
   (9) State Department of Education.  
   (10) Natural Resources Agency.  
   (11) Energy Commission.  
   (12) Public Utilities Commission. 
   (8) 
    (13)   Local transportation authorities and the
 Transportation  funding through the Metropolitan
Planning Agencies.   Agency, including all
transportation funding proposed by the Department of Transportation
  or allocated by the California Transportation Commission
for expenditure by   state   or  
metropolitan   planning   organizations  
.  
   (b) 
    (c)  Coordinate  public-sector  
public sector  financial investment and public programs to
assist low-income communities to become business, development, and
investment ready  or   complement private  
sector triple bottom-line equity fund investments  . These
programs shall include  at least the following purposes  :
   (1)  ______   Economic development, including
research and development, manufacturing, and real estate development
that generates in jobs  .
   (2)  ______   Housing rehabilitation and
construction  . 
   (3) School construction, education, and academic performance
improvement.  
   (4) Workforce preparation and training.  
   (5) Public safety, community policing, crime prevention,
rehabilitation, and probation.  
   (6) Public health, social services, and other human services.
 
   (7) Mental health services.  
   (8) Alcohol and other drug abuse prevention and treatment. 

   (9) Recreation and community arts and music programs.  
   (10) Transportation and other mobility infrastructure, including
public transit, walkways, and bicycle paths.  
   (11) Other infrastructure, including water, sewer, solid waste,
recycling, and lighting.  
   (12) Broadband deployment for high-speed Internet access, other
information technology infrastructure, and smart grid.  
   (13) Energy efficiency, weatherization, and renewable energy
resources.  
   (14) Environmental quality, resource recycling, community gardens,
and local food sourcing services.  
   (15) Homeless facilities and services.  
   (c) 
    (d)  Develop  and adopt  criteria for 
determining the type of economically, socially, and environmentally
responsible businesses and real estate developments to assist in
starting-up, locating, and growing in low-income neighborhoods.
  eligible triple bottom-line equity funds that invest
in enterprises and employers that generate permanent jobs, including
investments to assist in starting-up, locating, and expanding
employers in low-income neighborhoods.  These criteria shall
include  the   spirit and intent of the preponderance of
the following criteria as refined and adopted by the Coordination
and Oversight Council  :
   (1)  ______   Commitment to locate
investments in a low-income neighborhood  .
   (2)  ______   Generation of living wage jobs
with benefits for low-income residents  .
   (3)  ______   Projected multiplier effect for
generation of additional employment  . 
   (4) Provision of employment benefits, such as health care,
retirement plans, profit sharing, and employee stock ownership. 

   (5) Commitment to local hiring and job training.  
   (6) Engagement of local, women, and minority business enterprises
as suppliers and contractors.  
   (7) Development and sponsorship of employee training programs,
including job training and financial education.  
   (8) Provision of on site or nearby child care for children of
employees.  
   (9) Use of green building design, construction, renovation, or
operations.  
   (10) Implementation of energy and other resource efficiency,
recycling, or pollution prevention programs.  
   (11) Deployment of broadband high-speed Internet access and other
information technologies to support and increase productivity and
reduce impacts on the environment.  
   (12) Implementation of workplace safety or effective ergonomic
programs.  
   (13) Engagement with the local community through volunteer
organizations, local school support programs, and other community
initiatives.  
   (14) Production of economically, socially, or environmentally
beneficial products and services.  
   (15) Receipt of green business certification.  
   (16) Production of Corporate Social Responsibility (CSR),
Corporate Sustainability, and Creating Shared Value (CSV) reporting.
 
   (d) Establish a broad array of incentives to encourage responsible
businesses and real estate developments to grow in low-income
neighborhoods and to encourage investment in low-income
neighborhoods. These incentives shall include:  
   (1) Environmental and entitlement regulatory incentives. 

   (2) Integrated public agency assistance incentives. 

   (e) Assist with formulating Community Development Strategies with
associated Zoning and Area Plans that will help low income
neighborhoods and the cities, counties, and regions where they are
located to become business, development, and investment ready.
 
   (f) Report annually to the Legislature and the Governor on whether
the initiative has met the criteria established for measuring the
economic, social, and environmental returns on the investments made
pursuant to this article.  
   (e) Develop and adopt criteria for eligible triple bottom-line
equity funds that invest in real estate developments to assist in
constructing, expanding, renovating, and rehabilitating buildings in
low-income neighborhoods that accommodate all allowed land use
approved and permitted by the local government land use regulations.
The criteria shall include the spirit and intent of the following, as
refined and adopted by the Coordination and Oversight Council: 

   (1) Commitment to locate investments in a low-income neighborhood.
 
   (2) Consistency of development with local government land use
plans and alignment with local government priorities.  
   (3) Generation of construction jobs with living wages and
benefits.  
   (4) Establishment of job training and apprentice programs for
local residents.  
   (5) Ownership or equity participation by a local, woman, or
minority developer or use of local, women, or minority business
enterprises as contractors or subcontractors.  
   (6) Construction of affordable housing, especially as part of a
larger mixed-income, mixed-use project to optimize synergies among
land uses.  
   (7) Generation of permanent living wage jobs.  
   (8) Retention or generation of permanent living wage jobs. 

   (9) Use of green construction materials and practices.  
   (10) Incorporation of energy efficiencies, waste reduction, and
renewable energy resources.  
   (11) Implementation of smart development practices deploying
broadband for high-speed Internet access for smart infrastructure and
smart buildings, optimizing the utility of a smart grid.  
   (12) Incorporation of a multimodal transportation system that
optimizes walking, bicycling, public transit, and other strategies to
reduce single-occupant vehicle trips.  
   (13) Design of development consistent with the concept and
principles for livable communities.  
   (14) Accommodation of green and clean technology employers. 

   (15) Implementation of low-impact development practices
incorporating native vegetation, soil preservation, water use
conservation, recycling and other efficiencies, and pervious
pavement.  
   (16) Incorporation of parks, recreational areas, open spaces, and
other environmental amenities.  
   (17) Accommodation of locations for small and local businesses.
 
   (18) Establishment of space for neighborhood organizations,
community centers, child care centers, and other nonprofit
community-based organizations.  
   (19) Use of bio-regional development practices connecting local
and regional sustainable food production with urban consumption.
 
   (20) Acquisition of LEED certification for buildings and
neighborhoods.  
    (f) Establish overall triple bottom-line goals and standardized
metrics for economic, social, and environmental outcomes that shall
be accepted by all eligible equity funds.  
   (g) Gather evidence and conduct public forums to identify a broad
array of incentives that will encourage triple bottom-line equity
fund investments in low-income neighborhoods and take the following
actions:  
   (1) Prepare a report to the Legislature and Governor.  
   (2) Establish incentives for which there is existing legal and
regulatory authority.  
   (3) Recommend appropriate amendments to existing laws and
regulations and work with the Legislature and the Governor to secure
adoption.  
   (h) Survey counties and cities to identify and inventory local
governments that want to partner with triple bottom-line equity funds
to invest in low-income neighborhoods. This survey shall determine
if the local government has done any of the following:  
   (1) Approved within the last 10 years a general plan, specific
plan, or other land use plan or zoning regulation on which an
investor can rely to govern and control development.  
   (2) Identified local public funding or other resources that have
been or will be committed to the low-income neighborhood to
complement a triple bottom-line equity fund investment.  
   (3) Designated a person to coordinate alignment of public
resources and implementation of development plans with a fund
manager.  
   (4) Established county and city school integrated human services
teams to serve the low-income neighborhood with goals and
accountability to increase employment, improve education, reduce
poverty, reduce crime, and improve health status.  
   (5) Committed to cooperate in and assist with monitoring and
tracking performance outcomes in the low-income neighborhoods. 

   (i) Establish and convene regular meetings of the California
Community Investment Network comprised of organizations and
institutions with expertise and resources to advise the Coordination
and Oversight Council and eligible equity fund managers.  
   (j) Report annually to the Legislature and the Governor on the
status and progress of the California Community Investment Initiative
and performance on goals and triple bottom-line outcomes pursuant to
subdivision (f). 
   12099.3.   (a)    The California Community
Investment Initiative shall  establish the California
Community Investment Network. This network shall do all of the
following:   encourage significant private sector
commitment, cooperation, and collaboration to invest private capital
in low-income neighborhoods through eligible triple bottom-line
equity funds. The California Community Investment Initiative shall
give priority   consideration for award of state assistance
from public resources, herein identified, to low-income neighborhoods
into which investments are being made by each fund that is
capitalized with at least one billion dollars ($1,000,000,  
000) in investment funds. The Coordination and Oversight Council
shall adopt criteria and a process for prioritizing assistance to
low-income neighborhoods into which investments are being made by
triple bottom-line equity funds that are capitalized with less than
one billion  dollars ($1,000,000,000) in investment funds.
 
   (a) Establish the California Family of Funds. The California
Family of Funds shall consist of venture funds and real estate funds.
 
   (b) Invite top quartile investment fund managers to become the
managing partners of the venture and real estate funds and to
affiliate with a not-for-profit organization as a special limited
partner.  
   (c) Provide assistance to the managing partners and the special
limited partner in raising five hundred million dollars
($500,000,000) in assets for the venture funds and five hundred
million dollars ($500,000,000) in assets for the real estate funds
from private sector investors, institutional investors, and
foundations.  
   (d) Fund managers, with assistance from the special limited
partner, in turn, shall:  
   (1) Identify investment funds with a substantial positive,
economic, social, and environmental impact on low income individuals
and communities and a financial return at or above market rate.
 
   (2) Make investments in funds that meet the criteria set forth in
subparagraph (1).  
   (3) Work with funds the initiative has invested in to assist them
in accomplishing the stated objectives.  
   (b) The Coordination and Oversight Council shall adopt criteria
for an eligible triple bottom-line equity fund that shall include at
least the following:  
   (1) The fund shall be legally structured to comply with both the
spirit and intent of the preponderance of the relevant criteria
delineated in subdivisions (d) and (e) of Section 12099.2, as refined
and adopted by the Coordination and Oversight Council, including
triple bottom-line goals and outcomes with explicit metrics. 

   (2) The fund shall be managed by a reputable fund manager with a
track record of experience and performance with triple bottom-line
funds.  
   (3) The fund shall be prepared by experienced personnel to lead
and manage implementation of coordinated state and local government
public funding or other resources. This shall be accomplished either
by the fund manager or through a contractual relationship between the
fund manager and an appropriate nonprofit organization.  
   (4) The fund shall be committed to working with relevant local
government jurisdictions to optimize the alignment of state public
funding and resources and local government funding and resources.
 
   (5) The fund shall be organized to track performance and report
metrics for triple bottom-line goals and outcomes.  
   (c) If requested by a local jurisdiction, the California Community
Investment Initiative shall provide technical assistance to review,
refine, and advise on local land use plans and zoning to increase
attraction of private investment by triple bottom-line equity funds.