Bill Text: CA SB528 | 2019-2020 | Regular Session | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: California Infrastructure and Economic Development Bank.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Failed) 2020-02-03 - Returned to Secretary of Senate pursuant to Joint Rule 56. [SB528 Detail]

Download: California-2019-SB528-Introduced.html


CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Senate Bill No. 528


Introduced by Senator Hueso

February 21, 2019


An act to amend Sections 16500, 16500.5, 53630.5, 63010, 63021, 63025.1, 63035, 63050, and 63089.98 of, to add Sections 63021.1, 63021.2, 63021.3, and 63025.10 to, and to repeal Section 63021.5 of, the Government Code, relating to the California Infrastructure and Economic Development Bank, and making an appropriation therefor.


LEGISLATIVE COUNSEL'S DIGEST


SB 528, as introduced, Hueso. California Infrastructure and Economic Development Bank.
(1) The Bergeson-Peace Infrastructure and Economic Development Bank Act establishes the California Infrastructure and Economic Development Bank (I-Bank) in the Governor’s Office of Business and Economic Development under the direction of an executive director appointed by the Governor, subject to confirmation by the Senate, and governed by a board of directors composed of specified persons. Existing law, among other things, authorizes the I-Bank to make loans, issue bonds, and provide financial assistance for various types of projects that qualify as economic development or public development facilities. The act prohibits the bank from being chartered as a depository institution. The act establishes the California Infrastructure and Economic Development Bank Fund (I-Bank fund), a continuously appropriated fund, for support of the I-Bank.
This bill would establish the Infrastructure and Economic Development Bank Commission and place the I-Bank under the supervision of the commission. The bill would require that the commission be comprised of the Governor, the Treasurer, the Attorney General, and the person who served as Governor immediately preceding the current Governor. The bill would require the commission to oversee the activities of the board of directors and the executive director, and to appoint the members of the board of directors and the executive director subject to confirmation by both houses of the Legislature.
The bill would require the executive director, by January 1, 2020, to prepare, or cause to be prepared, a proposed projected 5-year budget detailing the costs expected to be incurred during that period due to the transfer of the bank, as described above, and the operation of the bank as a depository institution, as described below. The bill would require the executive director to submit the proposed projected budget to the board for approval and the final projected budget to the Legislature, as provided, and to take specified actions in order to facilitate the transfer of the bank and the operation of the bank as a depository institution. The bill, until January 1, 2020, would require the executive director to employ as necessary professional staff or consultants with expertise in the regulatory and other policy practices of the Federal Reserve System to assist in those activities. The bill would transfer $500,000 from the General Fund to the I-Bank fund to be used for the employment of professional staff or consultants for these purposes. By transferring money to a continuously appropriated fund, this bill would make an appropriation.
(2) Existing law requires the Treasurer, if possible, to deposit all money in the State Treasury or under the control of the Treasurer into an eligible bank. Existing law requires a state officer or employee, other than the Treasurer, to deposit all money in the custody of the state or under the control of that officer or employee in a state or national bank, as defined. Existing law requires a local agency, as defined, to deposit all money belonging to, or in the custody of that local agency, into specified state or national banks, as defined.
This bill would require that the I-Bank be chartered as a depository institution and authorize the Treasurer, a state officer or employee having control over money belonging to or in the custody of the state, a local agency, as defined, or, upon approval by the board of directors, a quasi-public nonprofit entity to establish a deposit account with the bank. The bill would require that the bank, among other things, become a member of the Federal Reserve System and the Federal Home Loan Bank System and prohibit the bank from engaging in prohibited high-risk activities, as defined. The bill would provide that moneys in the I-Bank fund for purposes of these provisions are subject to appropriation by the Legislature.
(3) Existing law requires the I-Bank, by November 1 of each year, to submit to the Governor and the Legislature a report for the preceding fiscal year containing specified information relating to the I-Bank fund and programs, including information on the impact of the activities funded by moneys in the fund such as the number of jobs created and retained. Existing law also requires the manager of the California Small Business Finance Center, by January 1 of each year, to prepare and submit to the Governor and the Legislature a report for the preceding fiscal year relating to the activities of the California Small Business Expansion Fund and moneys within that fund held in trust by a financial institution or financial company that includes specified information.
This bill would additionally require the I-Bank and the program manager to submit these reports to the Infrastructure and Economic Development Bank Commission and the bank’s board of directors. The bill would also expand the report required to be submitted by the I-Bank to include the number of jobs projected to be created and retained as an impact of the activities funded from the I-Bank fund and programs and information about deposit accounts established as described above.
Vote: 2/3   Appropriation: YES   Fiscal Committee: YES   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 municipalities, counties, and regional public entities, including pension funds and joint powers authorities (JPAs), routinely have funds from taxes, pension contributions, tolls, and other revenue sources deposited in commercial private banks. These banks have exposure to risks inherent in the commercial banking system, including financial products that are not subject to regulatory oversight. Thus, financial crises could adversely affect the security of public funds in commercial banks. Recent banking regulations, put into effect by the Third Basel Accord, known as the Basel III agreement, eliminate the security of deposits and expose the depositors’ funds to risk by making them subject to forfeiture to pay the debt of a private bank, a so-called “bail-in.”
(b) California public entities receive a low interest rate, between 0.5 and 0.8 percent, on their deposits and also pay relatively high management and transaction fees that are between 5 and 10 basis points (bps). Public entities have sought to mitigate these factors by placing some of their funds in the Local Agency Investment Fund (LAIF) under the State Treasurer’s Office (STO). The STO has a Centralized Treasury and Securities Management Division (CTSMD) for handling the annual flow of about $2 trillion. The LAIF funds, which totaled about $20.7 billion in 2017, are placed in low-risk investments along with state funds, totaling about $54.4 billion, under the state’s Pooled Money Investment Account (PMIA). The yield has been about 1% in 2017.
(c) California public entities routinely issue municipal bonds in order to finance infrastructure and related projects. The California Debt and Investment Advisory Commission (CDIAC) reported that there was $78.4 billion of public bonds issued in 2016, with an average interest rate of 3 to 4 percent, depending on the term of the bond and its rating. About one-third of the approximately 3,700 bonds issued in 2016 were from JPAs. California accounted for about 18 percent of all municipal bonds issued in the United States in 2016. This was higher than California’s 13 percent contribution to the United States economy in part due to underreporting in other states.
(d) According to CDIAC, about one-third of California municipal bonds are issued for education, one-half of which are for K-12 and one-half for colleges and universities. Another one-third of the bonds are for public works and about 10 percent are for hospitals and healthcare facilities. The remaining 20 percent are for a variety of purposes, including housing. The state issues about 25 percent of the reported bonds and a miscellany accounts for another 25 percent. Cities and counties issue about 15 to 20 percent of the bonds, while K-12 school districts and JPAs issue about 15 percent.
(e) California municipalities invest some of their funds and issue some bonds as affiliates. The League of California Cities (LCC), which was established almost 120 years ago, has developed a funding pool called CalTRUST with an approved nongovernmental investment manager. This allows cities to invest in fixed-income securities yet permits short-term liquidity. The current holdings are approximately $2.8 billion. The LCC acts together with the California Statewide Communities Development Authority (CSCDA), which was created in 1988, to issue bonds to finance local infrastructure, including housing, economic development, healthcare and education, totaling about $2 billion in 2016. These issuances are reported to the CDIAC.
(f) The California Infrastructure and Economic Development Bank (I-Bank) is a revolving fund established in 1994 with state funds. It operates under the Governor and the Governor’s Office of Business and Economic Development (GO-Biz). The I-Bank has grown over the past two decades, and is currently providing infrastructure financings using funds from tax-exempt revenue bonds and the profits from its financings. Financings by the I-Bank are done at an average of 3 percent; this equals its own cost of borrowing and is below the interest paid by public entities for their own financings in the public market. The origination and issuance fees of the I-Bank are lower than those of commercial banks, at 2 to 3 bps versus 6 to 10 bps.
(g) The I-Bank also issues conduit bonds on behalf of state agencies (approximately $500 million in 2016), which permits those bonds to be tax-free. The I-Bank receives fees for handling this conduit service.
(h) The I-Bank includes the California Small Business Finance Center (SBFC) that provides loan guarantees for small businesses with difficulties obtaining loans from private banks. This center operates under the Small Business Financial Assistance Act of 2013 (Chapter 6 (commencing with Section 63088) of Division 1 of Title 6.7 of the Government Code), which defines details of the loan guarantee program. The SBFC contracts with a dozen or so nonprofit agencies that provide the loans. In 2016 SBFC had $112 million on deposit with which it guaranteed 1,044 loans totaling $254 million, a leverage ratio of 2.3 to 1. There has been a very low rate of defaults, about 0.02 percent. SBFC also makes a small number of loans to farms that are guaranteed by funding from the United States Department of Agriculture. The SBFC makes an annual report to the Governor and Legislature that is separate from the report of the I-Bank. The SBFC report detail the distribution of its loan guarantees and the jobs produced by them.
(i) As of 2016, the I-Bank had assets of over $725 million, including about $410 million in cash and equivalents and about $310 million of loans receivable. Liabilities, mostly revenue bonds payable, were about $446 million.
(j) In 2016 the I-Bank provided financing for infrastructure and environmental programs under its Infrastructure State Revolving Fund (ISRF) and California Lending for Energy and Environmental Needs (CLEEN) programs of about $94 million, or 0.12 percent of the total California municipal infrastructure loans. These I-Bank financings typically range from $5 to $25 million. Each $1 million of these financings is estimated to produce 15 jobs. The three major rating agencies give 90 percent of these bonds ratings of “AAA” or better, and view the obligors as reliable.
(k) The I-Bank has provided $38 billion of financing for infrastructure and economic development over the past two decades, of which $36 billion was conduit bonds on behalf of public agencies and nonprofits. The I-Bank estimates that its programs created or retained 350,000 jobs. About 85 percent of these jobs were through its SBFC in the form of loans and loan guarantees, and 15 percent through its ISRF and CLEEN programs and the conduit bonds.

SEC. 2.

 Section 16500 of the Government Code is amended to read:

16500.
 (a) As used in this chapter, “eligible bank” means a state or national bank located in this state, selected by the Treasurer for the safekeeping of money belonging to or in the custody of the state, that has received an overall rating of not less than “satisfactory” in its most recent evaluation by the appropriate federal financial supervisory agency of the bank’s record of meeting the credit needs of the state’s communities, including low- and moderate-income neighborhoods, pursuant to Section 2906 of Title 12 of the United States Code. An eligible bank is eligible to receive deposits only to the extent that it furnishes the security required by this chapter.
(b) For purposes of this chapter, an “eligible bank” shall also mean the California Infrastructure and Economic Development Bank.

SEC. 3.

 Section 16500.5 of the Government Code is amended to read:

16500.5.
 (a) The definitions in Section 1670 of, and Chapter 1 (commencing with Section 99) of Division 1 of, the Financial Code apply to this section.
(b) In this chapter, for purposes of being an eligible bank for the safekeeping of moneys belonging to, or in the custody of, the state, the phrases “state or national bank located in this state,” “state or national bank,” “state or national bank in this state,” and “state or national banks in the state” shall include, without limitation, any of the following:
(1) Any California branch office of a foreign (other state) state bank that the bank is authorized to maintain under the law of its domicile and federal law.
(2) Any California branch office of a foreign (other state) national bank that the bank is authorized to maintain under federal law.
(3) Any California branch office of a foreign (other nation) bank that the bank is licensed to maintain under Article 3 (commencing with Section 1800) of Chapter 20 of Division 1 1.1 of the Financial Code.
(4) Any California federal branch of a foreign (other nation) bank that the bank is authorized to maintain under federal law.
(5) The California Infrastructure and Economic Development Bank.

SEC. 4.

 Section 53630.5 of the Government Code is amended to read:

53630.5.
 (a) The definitions in Section 1670 of, and Chapter 1 (commencing with Section 99) of Division 1 of, the Financial Code apply to this section.
(b) In this article, for purposes of being a depository of moneys belonging to or being in the custody of a local agency, the phrases “state or national bank located in this state,” “state or national bank,” “state or national bank in this state,” and “state or national banks in the state” include, without limitation, any of the following:
(1) A California branch office of a foreign (other state) state bank that the bank is authorized to maintain under the law of its domicile and federal law.
(2) A California branch office of a foreign (other state) national bank that the bank is authorized to maintain under federal law.
(3) A California branch office of a foreign (other nation) bank that the bank is licensed to maintain under Article 3 (commencing with Section 1800) of Chapter 20 of Division 1.1 of the Financial Code.
(4) A California federal branch of a foreign (other nation) bank that the bank is authorized to maintain under federal law.
(5) The California Infrastructure and Economic Development Bank.

SEC. 5.

 Section 63010 of the Government Code is amended to read:

63010.
 For purposes of this division, the following words and terms shall have the following meanings unless the context clearly indicates or requires another or different meaning or intent:
(a) “Act” means the Bergeson-Peace Infrastructure and Economic Development Bank Act.
(b) “Bank” means the California Infrastructure and Economic Development Bank.
(c) “Board” or “bank board” means the Board of Directors of the California Infrastructure and Economic Development Bank.
(d) “Bond purchase agreement” means a contractual agreement executed between the bank and a sponsor, or a special purpose trust authorized by the bank or a sponsor, or both, whereby the bank or special purpose trust authorized by the bank agrees to purchase bonds of the sponsor for retention or sale.
(e) “Bonds” means bonds, including structured, senior, and subordinated bonds or other securities; loans; notes, including bond, revenue, tax, or grant anticipation notes; commercial paper; floating rate and variable maturity securities; and any other evidences of indebtedness or ownership, including certificates of participation or beneficial interest, asset backed certificates, or lease-purchase or installment purchase agreements, whether taxable or excludable from gross income for federal income taxation purposes.
(f) “Commission” means the Infrastructure and Economic Development Bank Commission.

(f)

(g) “Cost,” as applied to a project or portion thereof financed under this division, means all or any part of the cost of construction, renovation, and acquisition of all lands, structures, real or personal property, rights, rights-of-way, franchises, licenses, easements, and interests acquired or used for a project; the cost of demolishing or removing any buildings or structures on land so acquired, including the cost of acquiring any lands to which the buildings or structures may be moved; the cost of all machinery, equipment, and financing charges; interest prior to, during, and for a period after completion of construction, renovation, or acquisition, as determined by the bank; provisions for working capital; reserves for principal and interest and for extensions, enlargements, additions, replacements, renovations, and improvements; and the cost of architectural, engineering, financial and legal services, plans, specifications, estimates, administrative expenses, and other expenses necessary or incidental to determining the feasibility of any project or incidental to the construction, acquisition, or financing of any project, and transition costs in the case of an electrical corporation.

(g)

(h) “Economic development facilities” means real and personal property, structures, buildings, equipment, and supporting components thereof that are used to provide industrial, recreational, research, commercial, utility, goods movement, or service enterprise facilities, community, educational, cultural, or social welfare facilities and any parts or combinations thereof, and all facilities or infrastructure necessary or desirable in connection therewith, including provision for working capital, but shall not include any housing.

(h)

(i) “Electrical corporation” has the meaning set forth in Section 218 of the Public Utilities Code.

(i)

(j) “Executive director” means the Executive Director of the California Infrastructure and Economic Development Bank appointed pursuant to Section 63021.

(j)

(k) “Financial assistance” in connection with a project, includes, but is not limited to, any combination of grants, loans, the proceeds of bonds issued by the bank or special purpose trust, insurance, guarantees or other credit enhancements or liquidity facilities, and contributions of money, property, labor, or other things of value, as may be approved by resolution of the board or the sponsor, or both; the purchase or retention of bank bonds, the bonds of a sponsor for their retention or for sale by the bank, or the issuance of bank bonds or the bonds of a special purpose trust used to fund the cost of a project for which a sponsor is directly or indirectly liable, including, but not limited to, bonds, the security for which is provided in whole or in part pursuant to the powers granted by Section 63025.1; bonds for which the bank has provided a guarantee or enhancement, including, but not limited to, the purchase of the subordinated bonds of the sponsor, the subordinated bonds of a special purpose trust, or the retention of the subordinated bonds of the bank pursuant to Chapter 4 (commencing with Section 63060); or any other type of assistance deemed appropriate by the bank or the sponsor, except that no direct loans shall be made to nonpublic entities other than in connection with the issuance of rate reduction bonds pursuant to a financing order or in connection with a financing for an economic development facility.
For purposes of this subdivision, “grant” does not include grants made by the bank except when acting as an agent or intermediary for the distribution or packaging of financing available from federal, private, or other public sources.

(k)

(l) “Financing order” has the meaning set forth in Section 840 of the Public Utilities Code.

(l)

(m) “Guarantee trust fund” means the California Infrastructure Guarantee Trust Fund.

(m)

(n) “Infrastructure bank fund” means the California Infrastructure and Economic Development Bank Fund.

(n)

(o) “Loan agreement” means a contractual agreement executed between the bank or a special purpose trust and a sponsor that provides that the bank or special purpose trust will loan funds to the sponsor and that the sponsor will repay the principal and pay the interest and redemption premium, if any, on the loan.

(o)

(p) “Participating party” means any person, company, corporation, association, state, or municipal governmental entity, partnership, firm, or other entity or group of entities, whether organized for profit or not for profit, engaged in business or operations within the state and that applies for financing from the bank in conjunction with a sponsor for the purpose of implementing a project. However, in the case of a project relating to the financing of transition costs or the acquisition of transition property, or both, on the request of an electrical corporation, or in connection with financing for an economic development facility, or for the financing of insurance claims, the participating party shall be deemed to be the same entity as the sponsor for the financing.

(p)

(q) “Project” means designing, acquiring, planning, permitting, entitling, constructing, improving, extending, restoring, financing, and generally developing public development facilities or economic development facilities within the state or financing transition costs or the acquisition of transition property, or both, upon approval of a financing order by the Public Utilities Commission, as provided in Article 5.5 (commencing with Section 840) of Chapter 4 of Part 1 of Division 1 of the Public Utilities Code.

(q)

(r) “Public development facilities” means real and personal property, structures, conveyances, equipment, thoroughfares, buildings, and supporting components thereof, excluding any housing, that are directly related to providing the following:
(1) “City streets” including any street, avenue, boulevard, road, parkway, drive, or other way that is any of the following:
(A) An existing municipal roadway.
(B) Is shown upon a plat approved pursuant to law and includes the land between the street lines, whether improved or unimproved, and may comprise pavement, bridges, shoulders, gutters, curbs, guardrails, sidewalks, parking areas, benches, fountains, plantings, lighting systems, and other areas within the street lines, as well as equipment and facilities used in the cleaning, grading, clearance, maintenance, and upkeep thereof.
(2) “County highways” including any county highway as defined in Section 25 of the Streets and Highways Code, that includes the land between the highway lines, whether improved or unimproved, and may comprise pavement, bridges, shoulders, gutters, curbs, guardrails, sidewalks, parking areas, benches, fountains, plantings, lighting systems, and other areas within the street lines, as well as equipment and facilities used in the cleaning, grading, clearance, maintenance, and upkeep thereof.
(3) “Drainage, water supply, and flood control” including, but not limited to, ditches, canals, levees, pumps, dams, conduits, pipes, storm sewers, and dikes necessary to keep or direct water away from people, equipment, buildings, and other protected areas as may be established by lawful authority, as well as the acquisition, improvement, maintenance, and management of floodplain areas and all equipment used in the maintenance and operation of the foregoing.
(4) “Educational facilities” including libraries, child care childcare facilities, including, but not limited to, day care daycare facilities, and employment training facilities.
(5) “Environmental mitigation measures” including required construction or modification of public infrastructure and purchase and installation of pollution control and noise abatement equipment.
(6) “Parks and recreational facilities” including local parks, recreational property and equipment, parkways, and property.
(7) “Port facilities” including airports, inland ports, landports, waterports, railports, docks, harbors, ports of entry, piers, ships, small boat harbors and marinas, and any other facilities, additions, or improvements in connection therewith, that transport goods or persons.
(8) “Power and communications” including facilities for the transmission or distribution of electrical energy, natural gas, and telephone and telecommunications service.
(9) “Public transit” including air and rail transport, airports, guideways, vehicles, rights-of-way, passenger stations, maintenance and storage yards, and related structures, including public parking facilities, and equipment used to provide or enhance transportation by bus, rail, ferry, or other conveyance, either publicly or privately owned, that provides to the public general or special service on a regular and continuing basis.
(10) “Sewage collection and treatment” including pipes, pumps, and conduits that collect wastewater from residential, manufacturing, and commercial establishments, the equipment, structures, and facilities used in treating wastewater to reduce or eliminate impurities or contaminants, and the facilities used in disposing of, or transporting, remaining sludge, as well as all equipment used in the maintenance and operation of the foregoing.
(11) “Solid waste collection and disposal” including vehicles, vehicle-compatible waste receptacles, transfer stations, recycling centers, sanitary landfills, and waste conversion facilities necessary to remove solid waste, except that which is hazardous as defined by law, from its point of origin.
(12) “Water treatment and distribution” including facilities in which water is purified and otherwise treated to meet residential, manufacturing, or commercial purposes and the conduits, pipes, and pumps that transport it to places of use.
(13) “Defense conversion” including, but not limited to, facilities necessary for successfully converting military bases consistent with an adopted base reuse plan.
(14) “Public safety facilities” including, but not limited to, police stations, fire stations, court buildings, jails, juvenile halls, and juvenile detention facilities.
(15) “State highways” including any state highway as described in Chapter 2 (commencing with Section 230) of Division 1 of the Streets and Highways Code, and the related components necessary for safe operation of the highway.
(16) (A) “Military infrastructure,” including, but not limited to, facilities on or near a military installation, that enhance the military operations and mission of one or more military installations in this state. To be eligible for funding, the project shall be endorsed by the Office of Planning and Research.
(B) For purposes of this subdivision, “military installation” means any facility under the jurisdiction of the Department of Defense, as defined in paragraph (1) of subsection (e) of Section 2687 of Title 10 of the United States Code.
(17) “Goods movement-related infrastructure” including port facilities, roads, rail, and other facilities and projects that move goods, energy, and information.
(18) “Housing-related infrastructure” including city streets; drainage, water supply, and flood control; environmental mitigation measures; power and communications; public transit improvement that directly supports transit-oriented housing; sewage collection and treatment; and water treatment and distribution.

(r)

(s) “Rate reduction bonds” has the meaning set forth in Section 840 of the Public Utilities Code.

(s)

(t) “Revenues” means all receipts, purchase payments, loan repayments, lease payments, and all other income or receipts derived by the bank or a sponsor from the sale, lease, or other financing arrangement undertaken by the bank, a sponsor, or a participating party, including, but not limited to, all receipts from a bond purchase agreement, and any income or revenue derived from the investment of any money in any fund or account of the bank or a sponsor and any receipts derived from transition property. Revenues shall not include moneys in the General Fund of the state.

(t)

(u) “Special purpose trust” means a trust, partnership, limited partnership, association, corporation, nonprofit corporation, or other entity authorized under the laws of the state to serve as an instrumentality of the state to accomplish public purposes and authorized by the bank to acquire, by purchase or otherwise, for retention or sale, the bonds of a sponsor or of the bank made or entered into pursuant to this division and to issue special purpose trust bonds or other obligations secured by these bonds or other sources of public or private revenues. Special purpose trust also means any entity authorized by the bank to acquire transition property or to issue rate reduction bonds, or both, subject to the approvals by the bank and powers of the bank as are provided by the bank in its resolution authorizing the entity to issue rate reduction bonds.

(u)

(v) “Sponsor” means any subdivision of the state or local government including departments, agencies, commissions, cities, counties, nonprofit corporations formed on behalf of a sponsor, special districts, assessment districts, and joint powers authorities within the state or any combination of these subdivisions that makes an application to the bank for financial assistance in connection with a project in a manner prescribed by the bank. This definition shall not be construed to require that an applicant have an ownership interest in the project. In addition, an electrical corporation shall be deemed to be the sponsor as well as the participating party for any project relating to the financing of transition costs and the acquisition of transition property on the request of the electrical corporation and any person, company, corporation, partnership, firm, or other entity or group engaged in business or operation within the state that applies for financing of any economic development facility, shall be deemed to be the sponsor as well as the participating party for the project relating to the financing of that economic development facility.

(v)

(w) “State” means the State of California.

(w)

(x) “Transition costs” has the meaning set forth in Section 840 of the Public Utilities Code.

(x)

(y) “Transition property” has the meaning set forth in Section 840 of the Public Utilities Code.

SEC. 6.

 Section 63021 of the Government Code is amended to read:

63021.
 (a) There is within the Governor’s Office of Business and Economic Development state government the Infrastructure and Economic Development Bank which that shall be responsible for administering this division. The bank shall be under the supervision of the Infrastructure and Economic Development Bank Commission established pursuant to Section 63021.1.
(b) The bank shall be under the direction of an executive director appointed by the Governor, Infrastructure and Economic Development Bank Commission and who shall serve at the pleasure of the Governor. commission. The appointment shall be subject to confirmation by the Senate. Senate and the Assembly.
(c) (1) (A) The bank shall be governed and its corporate power exercised by a board of directors, the members of which shall be appointed by the Infrastructure and Economic Development Bank Commission and serve at the pleasure of the commission. Each appointment shall be subject to confirmation by the Senate and the Assembly.
(B) The board shall consist of five members. Three members shall constitute a quorum and the affirmative vote of three members shall be necessary for the board to take any action.
(2) A member of the board shall not participate in any bank action or attempt to influence any decision or recommendation by any employee of, or consultant to, the bank that involves a sponsor of which the member is a representative or in which the member or the immediate family of the member has a personal financial interest within the meaning of Section 87100. For purposes of this section, “immediate family” means the spouse, children, and parents of the member.
(3) Except as provided in this paragraph, the members of the board shall serve without compensation, but shall be reimbursed for actual and necessary expenses incurred in the performance of their duties to the extent that reimbursement for these expenses is not otherwise provided or payable by another public agency, and shall receive one hundred dollars ($100) for each full day of attending meetings of the board.

SEC. 7.

 Section 63021.1 is added to the Government Code, to read:

63021.1.
 (a) (1) There is hereby established the Infrastructure and Economic Development Bank Commission, which shall consist of the following members:
(A) The Governor.
(B) The Treasurer.
(C) The Attorney General.
(D) The person who served as Governor immediately preceding the current Governor.
(2) If any person designated to serve on the commission pursuant to this subdivision is incapable of serving due to death or incapacity or by law, the Governor shall appoint a person to fill the vacancy, subject to confirmation by both houses of the Legislature.
(b) The commission shall do both of the following:
(1) Oversee the activities of the bank board and the executive director.
(2) Appoint members of the bank board and the executive director, subject to confirmation by both houses of the Legislature.
(c) Three members of the commission shall constitute a quorum for the transaction of business.

SEC. 8.

 Section 63021.2 is added to the Government Code, to read:

63021.2.
 (a) The bank is hereby transferred from the Governor’s Office of Business and Economic Development to the Infrastructure and Economic Development Bank Commission.
(b) The executive director and the members of the board under the Governor’s Office of Business and Economic Development that were serving as of the operative date of the act adding this section shall remain in those positions, and shall serve under the Infrastructure and Economic Development Bank Commission.
(c) The duties, powers, purposes, responsibilities, and jurisdiction of the bank under the Governor’s Office of Business and Economic Development that were in existence as of the operative date of the act adding this section shall remain with the bank under the Infrastructure and Economic Development Bank Commission.
(d) For the performance of the duties and the exercise of the powers vested in the bank under this division, the bank shall have possession and control of all records, papers, offices, equipment, supplies, or other property, real or personal, that were, as of the operative date of the act adding this section, held for the benefit or use by the bank when the bank was formerly within the Governor’s Office of Business and Economic Development.
  (e) All employees serving in state civil service, including temporary employees, who are engaged in the performance of functions transferred to the Infrastructure and Economic Development Bank Commission by the act adding this section are transferred to the Infrastructure and Economic Development Bank Commission. The status, positions, and rights of those persons shall not be affected by their transfer and shall continue to be retained by them pursuant to the State Civil Service Act (Part 2 (commencing with Section 18500) of Division 5), except as to positions the duties of which are vested in a position exempt from civil service. The personnel records of all transferred employees shall be transferred to the commission.
(f) The Infrastructure and Economic Development Bank Commission shall succeed to all of the rights and property of the Governor’s Office of Business and Economic Development conferred by this division. The property of any office, agency, or other entity of state government related to functions transferred to the Infrastructure and Economic Development Bank Commission is transferred by the act adding this section to the Infrastructure and Economic Development Bank Commission. If any doubt arises as to whether that property is transferred, the Department of General Services shall determine whether the property is transferred.
(g) All unencumbered balances of appropriations and other funds that were previously available for use in connection with any function or the administration of this division by the Governor’s Office of Business and Economic Development shall be transferred to the Infrastructure and Economic Development Bank Commission for the use and for the purpose for which the appropriation was originally made or the funds were originally available. If there is any doubt as to whether any funds are required to be transferred pursuant to this subdivision, the Department of Finance shall determine whether the transfer is required.
(h) The Infrastructure and Economic Development Bank Commission is subject to all the debts and liabilities of the Governor’s Office of Business and Economic Development pursuant to this division as if the Infrastructure and Economic Development Bank Commission had incurred them.
(i) Any reference to the Governor’s Office of Business and Economic Development in this division, other than in this section, shall be deemed to instead refer to the Infrastructure and Economic Development Bank Commission.

SEC. 9.

 Section 63021.3 is added to the Government Code, to read:

63021.3.
 (a) (1) No later than January 1, 2020, the executive director shall prepare, or cause to be prepared, a proposed projected five-year budget detailing the costs expected to be incurred during that period due to the transfer of the bank from the Governor’s Office of Business and Economic Development to the Infrastructure and Economic Development Bank Commission, pursuant to Section 63021.2, and the operation of the bank as a depository institution, pursuant to Section 63025.10.
(2) Upon completion of the proposed projected five-year budget pursuant to subdivision (a), the executive director shall submit the proposed projected five-year budget to the board, which shall review and may amend the proposed projected five-year budget, for approval. Upon approval by the board, the executive director shall submit the final projected five-year budget to the Legislature and provide a copy to the fiscal committees of each house of the Legislature.
(b) (1) No later than January 1, 2020, and in order to facilitate the transition of the bank from the Governor’s Office of Business and Economic Development to the Infrastructure and Economic Development Bank Commission, pursuant to Section 63021.2, and the operation of the bank as a depository institution, pursuant to Section 63025.10, the executive director shall do all of the following:
(A) Develop the proposed projected five-year budget required by subdivision (a).
(B) Develop a standard form to be used to apply for a deposit account pursuant to subdivision (b) of Section 63025.10.
(C) Seek to have the bank become a state member bank of the Federal Reserve System pursuant to paragraph (1) of subdivision (c) of Section 63025.10.
(D) Develop a handbook for internal use by bank staff regarding the responsibilities and requirements applicable to the bank, including any applicable regulations and fiduciary rules, in its capacity as a state member bank of the Federal Reserve System.
(2) In carrying out the duties under this section, the executive director shall, until January 1, 2020, employ as necessary professional staff or consultants with expertise in the regulatory and other policy practices of the Federal Reserve System to assist in those activities described in paragraph (1).

SEC. 10.

 Section 63021.5 of the Government Code is repealed.
63021.5.

(a)The bank shall be governed and its corporate power exercised by a board of directors that shall consist of the following persons:

(1)The Director of Finance or his or her designee.

(2)The Treasurer or his or her designee.

(3)The Director of the Governor’s Office of Business and Economic Development or his or her designee, who shall serve as chair of the board.

(4)An appointee of the Governor.

(5)The Secretary of Transportation or his or her designee.

(b)Any designated director shall serve at the pleasure of the designating power.

(c)Three of the members shall constitute a quorum and the affirmative vote of three board members shall be necessary for any action to be taken by the board.

(d)A member of the board shall not participate in any bank action or attempt to influence any decision or recommendation by any employee of, or consultant to, the bank that involves a sponsor of which he or she is a representative or in which the member or a member of his or her immediate family has a personal financial interest within the meaning of Section 87100. For purposes of this section, “immediate family” means the spouse, children, and parents of the member.

(e)Except as provided in this subdivision, the members of the board shall serve without compensation, but shall be reimbursed for actual and necessary expenses incurred in the performance of their duties to the extent that reimbursement for these expenses is not otherwise provided or payable by another public agency, and shall receive one hundred dollars ($100) for each full day of attending meetings of the authority.

SEC. 11.

 Section 63025.1 of the Government Code is amended to read:

63025.1.
 The bank board may do or delegate the following to the executive director:
(a) Sue and be sued in its own name.
(b) As provided in Chapter 5 (commencing with Section 63070), issue bonds and authorize special purpose trusts to issue bonds, including, at the option of the board, bonds bearing interest that is taxable for the purpose of federal income taxation, or borrow money to pay all or any part of the cost of any project, or to otherwise carry out the purposes of this division.
(c) Engage the services of private consultants to render professional and technical assistance and advice in carrying out the purposes of this division.
(d) Employ attorneys, financial consultants, and other advisers as may, in the bank’s judgment, be necessary in connection with the issuance and sale, or authorization of special purpose trusts for the issuance and sale, of any bonds, notwithstanding Sections 11042 and 11043.
(e) Contract for engineering, architectural, accounting, or other services of appropriate state agencies as may, in its judgment, be necessary for the successful development of a project.
(f) Pay the reasonable costs of consulting engineers, architects, accountants, and construction, land use, recreation, and environmental experts employed by any sponsor or participating party if, in the bank’s judgment, those services are necessary for the successful development of a project.
(g) Acquire, take title to, and sell by installment sale or otherwise, lands, structures, real or personal property, rights, rights-of-way, franchises, easements, and other interests in lands that are located within the state, or transition property as the bank may deem necessary or convenient for the financing of the project, upon terms and conditions that it considers to be reasonable.
(h) Receive and accept from any source including, but not limited to, the federal government, the state, or any agency thereof, loans, contributions, or grants, in money, property, labor, or other things of value, for, or in aid of, a project, or any portion thereof.
(i) Make loans to any sponsor or participating party, either directly or by making a loan to a lending institution, in connection with the financing of a project in accordance with an agreement between the bank and the sponsor or a participating party, either as a sole lender or in participation with other lenders. However, no loan shall exceed the total cost of the project as determined by the sponsor or the participating party and approved by the bank.
(j) Make loans to any sponsor or participating party, either directly or by making a loan to a lending institution, in accordance with an agreement between the bank and the sponsor or participating party to refinance indebtedness incurred by the sponsor or participating party in connection with projects undertaken and completed prior to any agreement with the bank or expectation that the bank would provide financing, either as a sole lender or in participation with other lenders.
(k) Mortgage all or any portion of the bank’s interest in a project and the property on which any project is located, whether owned or thereafter acquired, including the granting of a security interest in any property, tangible or intangible.
(l) Assign or pledge all or any portion of the bank’s interests in transition property and the revenues therefrom, or assets, things of value, mortgages, deeds of trust, bonds, bond purchase agreements, loan agreements, indentures of mortgage or trust, or similar instruments, notes, and security interests in property, tangible or intangible and the revenues therefrom, of a sponsor or a participating party to which the bank has made loans, and the revenues therefrom, including payment or income from any interest owned or held by the bank, for the benefit of the holders of bonds.
(m) Make, receive, or serve as a conduit for the making of, or otherwise provide for, grants, contributions, guarantees, insurance, credit enhancements or liquidity facilities, or other financial enhancements to a sponsor or a participating party as financial assistance for a project.
(n) Lease the project being financed to a sponsor or a participating party, upon terms and conditions that the bank deems proper but shall not be leased at a loss; charge and collect rents therefor; terminate any lease upon the failure of the lessee to comply with any of the obligations thereof; include in any lease, if desired, provisions that the lessee shall have options to renew the lease for a period or periods, and at rents determined by the bank; purchase any or all of the project; or, upon payment of all the indebtedness incurred by the bank for the financing of the project, the bank may convey any or all of the project to the lessee or lessees.
(o) Charge and equitably apportion among sponsors and participating parties the bank’s administrative costs and expenses incurred in the exercise of the powers and duties conferred by this division.
(p) Issue, obtain, or aid in obtaining, from any department or agency of the United States, from other agencies of the state, or from any private company, any insurance or guarantee to, or for, the payment or repayment of interest or principal, or both, or any part thereof, on any loan, lease, or obligation or any instrument evidencing or securing the same, made or entered into pursuant to this division.
(q) Notwithstanding any other provision of this division, enter into any agreement, contract, or any other instrument with respect to any insurance or guarantee; accept payment in the manner and form as provided therein in the event of default by a sponsor or a participating party; and issue or assign any insurance or guarantee as security for the bank’s bonds.
(r) Enter into any agreement or contract, execute any instrument, and perform any act or thing necessary or convenient to, directly or indirectly, secure the bank’s bonds, the bonds issued by a special purpose trust, or a sponsor’s obligations to the bank or to a special purpose trust, including, but not limited to, bonds of a sponsor purchased by the bank or a special purpose trust for retention or sale, with funds or moneys that are legally available and that are due or payable to the sponsor by reason of any grant, allocation, apportionment or appropriation of the state or agencies thereof, to the extent that the Controller shall be the custodian at any time of these funds or moneys, or with funds or moneys that are or will be legally available to the sponsor, the bank, or the state or any agencies thereof by reason of any grant, allocation, apportionment, or appropriation of the federal government or agencies thereof; and in the event of written notice that the sponsor has not paid or is in default on its obligations to the bank or a special purpose trust, direct the Controller to withhold payment of those funds or moneys from the sponsor over which it is or will be custodian and to pay the same to the bank or special purpose trust or their assignee, or direct the state or any agencies thereof to which any grant, allocation, apportionment or appropriation of the federal government or agencies thereof is or will be legally available to pay the same upon receipt by the bank or special purpose trust or their assignee, until the default has been cured and the amounts then due and unpaid have been paid to the bank or special purpose trust or their assignee, or until arrangements satisfactory to the bank or special purpose trust have been made to cure the default.
(s) Enter into any agreement or contract, execute any instrument, and perform any act or thing necessary, convenient, or appropriate to carry out any power expressly given to the bank by this division, including, but not limited to, agreements for the sale of all or any part, including principal, interest, redemption rights or any other rights or obligations, of bonds of the bank or of a special purpose trust, liquidity agreements, contracts commonly known as interest rate swap agreements, forward payment conversion agreements, futures or contracts providing for payments based on levels of, or changes in, interest rates or currency exchange rates, or contracts to exchange cash-flows or a series of payments, or contracts, including options, puts or calls to hedge payments, rate, spread, currency exchange, or similar exposure, or any other financial instrument commonly known as a structured financial product.
(t) Purchase, with the proceeds of the bank’s bonds, transition property or bonds issued by, or for the benefit of, any sponsor in connection with a project, pursuant to a bond purchase agreement or otherwise. Bonds or transition property purchased pursuant to this division may be held by the bank, pledged or assigned by the bank, or sold to public or private purchasers at public or negotiated sale, in whole or in part, separately or together with other bonds issued by the bank, and notwithstanding any other provision of law, may be bought by the bank at private sale.
(u) Enter into purchase and sale agreements with all entities, public and private, including state and local government pension funds, with respect to the sale or purchase of bonds or transition property.
(v) Invest any moneys held in reserve or sinking funds, or any moneys not required for immediate use or disbursement, in obligations that are authorized by law for the investment of trust funds in the custody of the Treasurer.
(w) Authorize a special purpose trust or trusts to purchase or retain, with the proceeds of the bonds of a special purpose trust, transition property or bonds issued by, or for the benefit of, any sponsor in connection with a project or issued by the bank or a special purpose trust, pursuant to a bond purchase agreement or otherwise. Bonds or transition property purchased pursuant to this title may be held by a special purpose entity, pledged or assigned by a special purpose entity, or sold to public or private purchasers at public or negotiated sale, in whole or in part, with or without structuring, subordination or credit enhancement, separately or together with other bonds issued by a special purpose trust, and notwithstanding any other provision of law, may be bought by the bank or by a special purpose trust at private sale.
(x) Approve the issuance of any bonds, notes, or other evidences of indebtedness by the Rural Economic Development Infrastructure Panel, established pursuant to Section 15373.7.
(y) Approve the issuance of rate reduction bonds by an entity other than the bank or a special purpose trust to acquire transition property upon approval of the transaction in a financing order by the Public Utilities Commission, as provided in Article 5.5 (commencing with Section 840) of Chapter 4 of Part 1 of Division 1 of the Public Utilities Code.
(z) Apply for and accept subventions, grants, loans, advances, and contributions from any source of money, property, labor, or other things of value. The sources may include bond proceeds, dedicated taxes, state appropriations, federal appropriations, federal grant and loan funds, public and private sector retirement system funds, and proceeds of loans from the Pooled Money Investment Account.
(aa) Do all things necessary and convenient to carry out its purposes and exercise its powers, provided, however, that nothing herein shall be construed to authorize the bank to engage directly in the business of a manufacturing, industrial, real estate development, or nongovernmental service enterprise. Further, except as provided in Section 63025.10, the bank shall not be organized to accept deposits of money for time or demand deposits or to constitute a bank or trust company.

SEC. 12.

 Section 63025.10 is added to the Government Code, to read:

63025.10.
 (a) (1) Notwithstanding subdivision (aa) of Section 63025.1, the bank shall be chartered as a depository bank for the purpose of accepting deposits of public funds from any of the following:
(A) The Treasurer.
(B) A state officer or employee having control over money belonging to or in the custody of the state.
(C) A local agency.
(D) A quasi-public nonprofit entity, upon the approval of the board pursuant to paragraph (1) of subdivision (b).
(2) The Department of Business Oversight, consistent with its existing authority, shall adopt or amend any rule or regulation necessary to facilitate the organization of the bank as a depository bank for purposes of this section.
(b) (1) The Treasurer, a state officer or employee having control over money belonging to or in the custody of the state, including those moneys in the Pooled Money Investment Account or the Local Agency Investment Fund, or a local agency may establish a deposit account with the bank, under the terms and conditions established by the bank. A quasi-public nonprofit entity may establish a deposit account pursuant to this subdivision, but only upon approval by the board consistent with the purposes of this section.
(2) Moneys deposited in a deposit account established pursuant to this subdivision shall not be subject to either of the following:
(A) Transfer or loan pursuant to Section 16310, 16312, or 16313.
(B) Impoundment or seizure by any state official or state agency.
(3) The Centralized Treasury and Securities Management Division of the Treasurer’s office shall supervise moneys deposited in a deposit account established pursuant to this subdivision.
(c) In carrying out its powers and duties under this section, the bank shall do all of the following:
(1) Seek to become a state member bank of the Federal Reserve System, as provided in Part 208 of Title 12 of the Code of Federal Regulations, and to open a master account with a Federal Reserve Bank.
(2) Seek to become a member of the Federal Home Loan Bank System, as provided in Part 1263 of Title 12 of the Code of Federal Regulations, and to open a master account with a Federal Home Loan Bank. Any account opened with a Federal Home Loan Bank pursuant to this paragraph shall be used primarily for short-term loan transactions to balance the accounts of the bank consistent with the fiduciary duty of the bank acting as a depository bank pursuant to this section and the requirements of subdivision (d).
(3) Employ experienced staff sufficient, in the bank’s judgment, to carry out the fiduciary duties of a depository bank, including daily balancing of deposit accounts established pursuant to subdivision (b) and obtaining short-term loans from the Federal Reserve, and for the purpose of evaluating and generating financing activity.
(4) Utilize fractional reserve baking with a high level of Tier 1 reserves met in part by the advance collection of origination and issuance fees.
(5) Pay interest on deposits at rates higher than those provided for comparable deposits in a private commercial bank.
(d) The bank shall not engage in prohibited high-risk activities and shall make all reasonable efforts to insulate moneys in deposit accounts established pursuant to subdivision (b) from those prohibited high-risk activities by segregating those accounts from any collateralized pools.
(e) Any profits realized from the activities of the bank pursuant to this section shall be used for the following purposes, in order of priority:
(1) Payment of interest on deposits in all deposit accounts established pursuant to subdivision (b).
(2) Retention for use as capital reserves to expand the financing activities of the bank.
(3) Reversion to the General Fund.
(f) The bank may charge transaction fees, including origination and issuance fees, for services provided pursuant to this section, subject to the following:
(1) (A) Except as provided in subparagraph (B), the amount of the fee shall not exceed the reasonable cost to the bank of performing the service rendered.
(B) In the case of origination fees, the amount of fee shall be equal to three basis points, unless the executive director, with the approval of the board, determines that a different amount is necessary to cover the reasonable cost to the bank for performing the service rendered.
(2) The bank shall ensure that the amount of fees charged pursuant to this section are less than comparable fees charged by a private commercial bank.
(3) Any advance collection of fees pursuant to paragraph (4) of subdivision (c) shall be deducted from the principal of a loan issued consistent with this section.
(g) For purposes of this section:
(1) “Deposit account” means an account with the bank on which the accountholder is permitted to make withdrawals from time to time in person by negotiable or transferable instrument, payment orders of withdrawal, telephone transfers, or other similar items for the purpose of making payments or transfers to third persons or others. The term includes both demand and time deposits.
(2) “Local agency” means a county, city, including a city and county, district, joint powers authority formed pursuant to the Joint Exercise of Powers Act (Chapter 5 (commencing with Section 6500) of Division 7 of Title 1), and any other subdivision of the state. “Local agency” specifically includes, but is not limited to, the joint powers authority known as “the Investment Trust of California” or “CalTRUST” and any retirement system established by a local agency.
(3) “Prohibited high-risk activities” means any activities, products, or financial instruments involved in facilitating the creation of credit across the global financial system but whose members or intermediaries are not subject to regulatory oversight. “Prohibited high-risk activities” includes any such bank-like products, as well as actions by regulated institutions engaged in unregulated activities, and contracts between two or more parties the value of which is based on an agreed-upon underlying financial asset, index, or security, such as commodities contracts, financial futures, derivatives, forward contracts, and options, but does not include bonds, currency-hedging, or credit-default swaps necessary to insure against interest rate issues concomitant to the provision of credit to public entities pursuant to this section.

SEC. 13.

 Section 63035 of the Government Code is amended to read:

63035.
 The bank shall, not later than November 1 of each year, submit to the Governor Governor, the Infrastructure and Economic Development Bank Commission, and the Legislature, pursuant to Section 9795, a report for the preceding fiscal year ending on June 30 containing information on the bank’s activities relating to the infrastructure bank fund and programs. The report shall include all of the following:
(a) (1) Information on the infrastructure bank fund, including, but not limited to, its present balance, moneys encumbered, moneys allocated, repayments, and other sources of revenues received during the fiscal year.
(2) Information on the impact of the activities funded by the infrastructure bank fund moneys, including, but not limited to, the number of jobs created and retained, retained and projected to be created and retained, the environmental impact that resulted, and economic value provided to the state.
(b) A specification of conduit and revenue bonds sold and interest rates thereon, including, but not limited to, the use of the bond proceeds.
(c) The amount of other public and private funds leveraged by the assistance provided.
(d) A report of revenues and expenditures for the preceding fiscal year, including all of the bank’s costs. The information provided pursuant to this subdivision shall include, but need not be limited to, both of the following:
(1) The amount and source of total bank revenues. Revenues shall be shown by main categories of revenues, including the General Fund, special funds, federal funds, interest earnings, fees collected, and bond proceeds, for each bank program.
(2) The amount and type of total bank expenditures. Expenditures shall be shown by major categories of expenditures, including loans provided, debt service payments, and program support costs, for each bank program.
(e) Information concerning deposit accounts pursuant to Section 63025.10, including the number of deposit accounts, the types of entities with deposit accounts, interest paid on deposit accounts, and the use and performance of the moneys in those deposit accounts.

(e)

(f) A projection of the bank’s needs and requirements for the coming year.

(f)

(g) Recommendations for changes in state and federal law necessary to meet the objectives of this division.

(g)

(h) The executive director shall post the report on the bank’s Internet Web site. internet website.

SEC. 14.

 Section 63050 of the Government Code is amended to read:

63050.
 (a) There is hereby created in the State Treasury the California Infrastructure and Economic Development Bank Fund for the purpose of implementing the objectives and provisions of this division. Within the fund there shall also be established a Sponsor Revenue Bond Account, a Participating Party Revenue Bond Account, a State Infrastructure Revolving Account, and additional accounts and subaccounts that the bank may establish from time to time.
(b) Notwithstanding Section 13340 and except as provided in subdivision (c), all moneys in the infrastructure bank fund are continuously appropriated without regard to fiscal years for the support of the bank and shall be available for expenditure for the purposes stated in this division.
(c) (1) Moneys in the infrastructure bank fund shall be available for expenditure for general administration only upon appropriation by the Legislature. This subdivision shall not limit the authority of the bank to expend funds directly related to the servicing of approved debt. Moneys in the fund shall be available for the purpose of general administration of the authority only upon appropriation by the Legislature, but not more than 5 percent of any bond proceeds administered by the authority may be expended to cover the costs of issuance, as that terminology is defined under Section 147 (G) of the Internal Revenue Code.
(2) Moneys in the infrastructure bank fund to be used for purposes of Section 63025.10, including any profits realized from the activities authorized by that section, shall be available for expenditure only upon appropriation by the Legislature.
(d) Notwithstanding any other provision of this division, not more than 15 percent of the financing annually approved by the executive director that utilizes state funds from the infrastructure bank fund may be expended upon educational facilities, environmental mitigation measures, and parks and recreational facilities.
(e) The executive director may transfer funds between the infrastructure bank fund and the guarantee trust fund when appropriate to accomplish the financing objectives of this division.

SEC. 15.

 Section 63089.98 of the Government Code is amended to read:

63089.98.
 (a) Annually, not later than January 1 of each year commencing January 1, 2014, and notwithstanding Section 10231.5, the program manager shall prepare and submit to the Governor Governor, the Infrastructure and Economic Development Bank Commission, the board, and the Legislature, pursuant to Section 9795, a report for the preceding fiscal year ending June 30, containing the expansion fund and trust fund financial product activity of each corporation, including all of the following:
(1) Direct loans, guarantees, and other financial products awarded and outstanding balances.
(2) Default and loss statistics.
(3) Employment data.
(4) Ethnicity and gender data of participating contractors and other entities, and experience of surety insurer participants in the bond guarantee program.
(5) Geographic distribution by city and county of the direct loans, guarantees, and other financial products awarded and outstanding at the close of the fiscal year.
(6) Significant events.
(b) The program manager shall post the report on the bank’s Internet Web site. internet website.

SEC. 16.

 The sum of five hundred thousand dollars ($500,000) is hereby transferred from the General Fund to the California Infrastructure and Economic Development Bank Fund to be used for the employment of professional staff or consultants as required by paragraph (2) of subdivision (b) of Section 63021.3 of the Government Code.
feedback