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AB-495 Community investment.(2013-2014)

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Amended  IN  Senate  June 30, 2014
Amended  IN  Assembly  January 23, 2014
Amended  IN  Assembly  January 13, 2014
Amended  IN  Assembly  January 06, 2014
Amended  IN  Assembly  September 03, 2013
Amended  IN  Assembly  March 21, 2013

CALIFORNIA LEGISLATURE— 2013–2014 REGULAR SESSION

Assembly Bill
No. 495


Introduced by Assembly Member Campos
(Coauthor: Assembly Member Dickinson)

February 20, 2013


An act to add Article 6.5 (commencing with Section 12099.20) to Chapter 1.6 of Part 2 of Division 3 of Title 2 to the Government Code, relating to 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 Program within the Governor’s Office of Business and Economic development Development. The program would be governed by a 14 10 member California Community Investment Council comprised of 6 citizens appointed by the Governor, 4 members of the Legislature, the Treasurer, the Controller, the Secretary of the Business, Consumer Services, and Housing Agency, and the Director of the Governor’s Office of Business and Economic Development, as specified. The bill would also establish an advisory committee to advise the California Community Investment Council composed solely of four members of the Legislature, as specified.
The program would be required to create a database of low-income neighborhoods, compile and maintain an inventory of California public sector funding resources and financing mechanisms, coordinate public sector financial investment and public programs to assist low-income communities to become business, development, and investment ready, develop criteria for triple bottom-line investment funds, establish overall triple bottom-line goals and standardized metrics for economic, social, and environmental outcomes to be accepted by eligible investment funds, establish and convene regular meetings of the California Community Investment Network comprised of organizations and institutions with expertise and resources to advise the California Community Investment Council and eligible investment fund managers, and report biannually to the Legislature and the Governor on the status and progress of the California Community Investment Program and performance on goals and triple bottom-line outcomes, as specified.
The bill would require the program to encourage significant private sector commitment, cooperation, and collaboration to invest private capital in low-income neighborhoods through eligible triple bottom-line investment funds with the goal of obtaining, by January 1, 2019, at least $1,000,000,000 of new investment by triple bottom-line investment funds in triple bottom-line real estate developments and businesses located in low-income California neighborhoods.

This

The bill would also make legislative findings and declarations in this regard.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   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 Program.

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, according to the United States Census Bureau’s new definition of poverty that takes cost of living into consideration, with nearly a quarter of its residents living in poverty.
(b) In this era of public budget constraints, public sector dollars are insufficient to solve the problems of low-income neighborhoods. Therefore, 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, community, and environmental leaders focused on generating coordinated, focused, effective human services, public safety, broadband, workforce, education, and physical infrastructure.
(e) A new class of real estate and business developments is emerging that actively pursues economically, socially, and environmentally responsible outcomes. These real estate and business developments often are the result of investments from private sector investment funds that generate market-rate returns to investors, but are also committed to improving economic, social, and environmental conditions and characteristics for the existing residents in these neighborhoods. These private sector investment mechanisms often are referred to as “triple bottom-line” investment funds.
(f) Triple bottom-line investment 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. Triple bottom-line 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 low-income 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 cause them.
(i) To accomplish this, the State of California intends to establish the California Community Investment Program 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.
(j) It is the intent of the Legislature that state agencies cooperate with the California Community Investment Program to align their resources to transform low-income neighborhoods and to attract private investments into these neighborhoods.

SEC. 3.

 Article 6.5 (commencing with Section 12099.20) is added to Chapter 1.6 of Part 2 of Division 3 of Title 2 of the Government Code, to read:
Article  6.5. California Community Investment Program

12099.20.
 For the purposes of this article, the following definitions shall apply:
(a) “Poverty” means the supplemental poverty measure, established by the United States Census Bureau in 2013 to incorporate cost of living in the established rate of poverty.
(b) “Triple bottom-line investment funds” include, but are not limited to, equity and debt investment vehicles that pursue market and above market rates of financial return while at the same time producing living wage jobs, affordable housing, and other economic, social, and environmental benefits for the residents of the communities where the investments are made.
(c) “Low-income” means households whose income does not exceed 80 percent of area median income.

12099.22.
 (a) The California Community Investment Program is hereby established within the Governor’s Office of Business and Economic Development.
(b) The program shall be under the direct authority of the director.
(c) The purpose of the program is to:
(1) 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.
(2) Serve investors, employers, corporate executives, business owners, and site location consultants who are considering low-income neighborhoods for business investment and expansion.
(3) Coordinate state programs and funding resources that can be used to address poverty reduction in California and to assist low-income neighborhoods to become business, development, and investment ready.
(d) The California Community Investment Program shall be supported and staffed by the Governor’s Office of Business and Economic Development using existing resources.
(e) In implementing the program, the director shall establish and implement a process for establishing public education programs and providing technical assistance to private sector investors.
(f) The California Community Investment Program shall be governed by a 14 10 member California Community Investment Council comprised of:
(1) Six persons appointed by the Governor, comprised of three members with private sector business or investment expertise, two members with community development expertise, and one representative of organized labor.

(2)Four members of the Legislature, two from the Senate appointed by the Senate Committee on Rules, 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 be nonvoting members of the California Community Investment Council and shall participate in the activities of the council only to the extent that their participation is compatible with their respective positions as Members of the Legislature.

(3)

(2) The Treasurer.

(4)

(3) The Controller.

(5)

(4) The Secretary of the Business, Consumer Services, and Housing Agency.

(6)

(5) The Director of the Governor’s Office of Business and Economic Development, shall serve as chair of the council.
(g) There shall be an advisory committee to advise the California Community Investment Council composed solely of four members of the Legislature as follows:
(1) Two from the Senate appointed by the Senate Committee on Rules with one from each of the two political parties with the most representatives in the Senate.
(2) Two from the Assembly appointed by the Speaker of the Assembly with one from each of the two political parties with the most representatives in the Assembly.

12099.24.
 The California Community Investment Program shall do all of the following:
(a) Develop and annually update a database of low-income neighborhoods in California by county and city with relevant information about each neighborhood, including socioeconomic demographic data, descriptions of pertinent characteristics to inform private sector investments, such as local land use plans and zoning or other development designations, and commitments from local governments to support private sector investments. These neighborhoods shall be known as California Community Investment Neighborhoods. The California Community Investment Council shall adopt criteria whereby an eligible low-income neighborhood can become a California Community Investment 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.
(c) Coordinate public sector financial investment and public programs to assist low-income communities that are eligible California Community Investment Neighborhoods to become business, development, and investment ready and to attract private sector triple bottom-line fund investments.
(d) Develop and adopt criteria for identifying eligible triple bottom-line investment funds that will serve as partners and invest in enterprises and employers that generate permanent living wage jobs, including investments to assist in starting-up, starting up, locating, and expanding employers in low-income neighborhoods.
(e) Develop and adopt criteria for eligible triple bottom-line investment 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.
(f) Establish overall triple bottom-line goals and standardized metrics for economic, social, and environmental outcomes that shall be accepted by all eligible investment funds.
(g) Gather evidence and conduct public forums to identify a broad array of incentives that will encourage triple bottom-line fund investments in low-income neighborhoods.
(h) Establish and convene regular meetings of the California Community Investment Network comprised of organizations and institutions with expertise and resources to advise the California Community Investment Council and eligible investment fund managers.
(i) Report biannually to the Legislature and the Governor on the status and progress of the California Community Investment Program and performance on goals and triple bottom-line outcomes pursuant to subdivision (f).

12099.2612099.26.
 The California Community Investment Program shall encourage significant private sector commitment, cooperation, and collaboration to invest private capital in low-income neighborhoods through eligible triple bottom-line investment funds with the goal of obtaining, by January 1, 2019, at least one billion dollars ($1,000,000,000) of new investment by triple bottom-line investment funds in triple bottom-line real estate developments and businesses located in low-income California neighborhoods.