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

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

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Bill Title: Finance: investment trust blue ribbon task force.

Spectrum: Partisan Bill (Democrat 8-0)

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

Download: California-2011-AB750-Amended.html

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BILL NUMBER: AB 750	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  APRIL 25, 2011
	AMENDED IN ASSEMBLY  MARCH 31, 2011

INTRODUCED BY   Assembly Member Hueso

                        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

F   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
 all  state funds. The  trust would support
  task force would be required to consider how the
investment trust could strengthen  economic  and community
 development, provide  financing for housing
development, public works and educational infrastructure, provide
  financial  stability to the financial
sector, provide   individuals and businesses, reduce the
cost paid by  state government  for  banking services,
 lend capital to specified financial institutions, 
and provide for excess earnings of the trust to be used  for
state   to supplement  General Fund purposes. The
bill would establish the membership of the task force, which would
include  designated Members of   the Secretary
of Business, Transportation and Housing and specified individuals
with a background in finance appointed by  the Legislature 
,  and  designees of  the Governor,
Controller, and Treasurer,  or their designees,  and would
require the  expenses of the task force to be paid by the
Senate and Assembly   task force to be staffed from
existing resources of the Business, Transportation and Housing Agency
 . The bill would require the task force to report to the
Legislature by December 1, 2012, on  its finding and
  specified issues relative to the California Investment
Trust, i   ncluding, among other things, its 
recommendations relating to the viability of establishing the
 California Investment Trust   trust  , as
specified.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
F   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 and
individuals 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. 
   SECTION 1.   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

F   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. 

   (1) 
    (2)  The Senate Committee on Rules shall appoint
 one member from each of the two largest caucuses of the
Senate.   two individuals 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 economic development practitioners.
 
   (2) 
    (3)  The Speaker of the Assembly shall appoint 
one member from each of the two largest caucuses of the Assembly.
  two individuals 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 economic development practitioners. 

   (3) The Senate Committee on Rules and the Speaker of the Assembly,
jointly, shall appoint members representing a small sized
state-chartered bank, a medium sized state-chartered bank, a
federally chartered bank, local governments, and four citizens with a
Fbackground in financial issues.     (4) The Governor shall appoint five 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 economic development
practitioners.  
   (4) 
    (5)  The Controller, Treasurer, and Governor 
shall each appoint   , or their  designees 
Fwho  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  legislative members of the
task force shall convene the initial meeting of the task force on or
before February 1, 2012. 
   (2) At the first meeting, 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. Thereafter, a quorum shall
constitute a majority of the members plus one who are eligible to
serve on the task force.  
   (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  all 
state funds, and to report to the Legislature pursuant to Section
64161.  The California Investment Trust would do all of the
following:  
   (1) Support the economic development of California by increasing
access to capital for businesses and farms in the state. 

   (2) Provide financing for housing development, public works
infrastructure, educational infrastructure, student loans, and
community quality of life projects.  
   (3) Provide stability to the local financial sector. 

   (4) Reduce the cost paid by state government for banking services.
F    (5) Lend 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.
 
   (6) Provide for any earnings of the trust, beyond those necessary
for continued operation of the trust, to be used for General Fund
purposes.  
   (e) The task force may employ staff support. All expenses of the
task force shall be paid by the Senate and Assembly, jointly, and
expenditures of the task force shall be subject to approval of the
Senate Committee on Rules and the Assembly Committee on Rules.
 
   (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 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 individuals and
businesses.  
   (C) Reduce the cost paid by state government for banking services.
F    (D) Generate earnings beyond those necessary for continued
operation of the trust, which could be used to supplement the General
FFund.     (2) Consider the types of financial products that could be offered
to address currently unmet financial needs and more efficiently
deliver existing financial resources and products. The task force
shall take a broad view in assessing individual-, business-, and
community-level financial needs including, but not limited to,
products that improve access to capital for businesses, farmers,
homeowners, students, the unbanked, and local governments.  
F   (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 from existing resources of
Fthe Business, Transportation and Housing Agency.     (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.  
   (f) 
    (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 on its findings
and recommendations relating to the viability of establishing the
California Investment Trust. The report shall be submitted by
December 1, 2012, and shall review and make recommendations on all of
Fthe following:     (a) A strategic plan that would implement the purposes of the
trust, as set forth in subdivision (c) of Section 64160. 

   (b) Capital requirements of the trust.  
   (c) Sound underwriting practices for the trust.  
F   (d) Standards to ensure that loans from the trust result in the
outcomes described in the approved loan applications. 

   (e) Recommended quarterly reports by the trust.  
   (f) Transition of state financing functions to the trust.
 
   (g) A timeline for depositing state moneys into the trust.
 
   (h) Cash management and banking needs of the state. 

   (i) Transparency requirements for trust operations. 

   (j) Ethics and conflict-of-interest requirements for management of
Fthe trust.     (k) Any additional legislation that is recommended or necessary.

    (l)     Initial
capitalization options for the trust.   to the
Legislature by December 1, 2012.  
   (b) The report shall address, at a minimum, all of the following:
 
   (1) A recommendation on the viability of establishing the
California Investment Trust.  
   (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
Fon 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) 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.  
   (5) An outline of transition actions necessary for establishing
the trust.  
   (6) A draft of statutory and constitutional changes that may be
necessary to establish the trust. 
   64162.  This division shall become inoperative and is repealed on
January 1, 2017, pursuant to Section 10231.5.