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AB-310 Public banks.(2021-2022)

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Date Published: 01/25/2021 09:00 PM
AB310:v99#DOCUMENT


CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Assembly Bill
No. 310

Introduced by Assembly Members Santiago, Carrillo, and Gipson
(Coauthors: Assembly Members Lee and Ting)
(Coauthor: Senator Wiener)

January 25, 2021

An act relating to public financing.


LEGISLATIVE COUNSEL'S DIGEST


AB 310, as introduced, Santiago. Public banks.
Existing law, 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. Existing law prohibits the bank from being chartered as a depository institution.
This bill would state the intent of the Legislature to subsequently amend this bill to include provisions that would expand I-Bank’s mandate and take steps to explore an eventual conversion to a state public bank, as specified.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: NO   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 (a) The Legislature finds and declares all of the following:
(1) The pandemic has laid bare the failure of the federal government to justly deal with the economic fallout wrought by a disaster.
(2) The majority of small businesses that have shuttered will not reopen, and hundreds of thousands of households in the state are at risk of eviction in the coming weeks.
(3) Federal and state recovery efforts have fallen far short of the need.
(4) The Paycheck Protection Program has largely left out the smallest businesses and businesses run by persons of color have been disproportionately affected.
(5) The California Infrastructure and Economic Development Bank (I-Bank), created by the Legislature in 1994 to fund local governments and small businesses, offers the foundation needed for enhanced lending to small businesses and localities, especially in an emergency.
(b) It is the intent of the Legislature to subsequently amend this measure to include provisions that would expand I-Bank’s mandate and take steps to explore an eventual conversion to a state public bank to support a speedier recovery for small businesses and invest more widely in local community development.
(c) It is the intent of the Legislature that the subsequent provisions accomplish all of the following:
(1) Create a wider equity mandate for the I-Bank without requiring an infusion of capital.
(2) Increase the capacity for recovery lending through credit support for up to 200,000 additional small business loans, via community development financial institutions and mission- and community-based lenders, and increase government lending for community development infrastructure.
(3) Increase access to credit for microbusinesses in underserved areas.
(4) Expand lending activities designed to supplement, rather than compete with, existing commercial financing.
(5) Build a foundation for a more sustainable, equitable, and responsive financial infrastructure in the state by using the state’s existing institutions and by providing support for local governments to establish similar public banks.