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Italicized text includes proposed additions to law or the previous version of the bill.
Struck text includes proposed deletions to law or the previous version of the bill.

(pdf version)
AMENDED IN ASSEMBLY MAY 5, 2011
AMENDED IN ASSEMBLY APRIL 25, 2011
AMENDED IN ASSEMBLY MARCH 31, 2011

INTRODUCED BY Assembly Member Hueso
( Coauthors: Assembly Members
Gatto, Roger Hernández, Lara,
and Perea
)

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


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
state funds. The task force would be required to consider how the
investment trust could strengthen economic and community development,
provide financial stability to individuals and businesses, reduce
the cost paid by state government for banking services, and provide
for excess earnings of the trust to be used to supplement General
Fund purposes. The bill would establish the membership of the task
force, which would include the Secretary of Business, Transportation
and Housing , or his or her designee, and specified
individuals with a background in finance appointed by the
Legislature, and the Governor, Controller, and Treasurer, or their
designees, and would require the 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 specified issues relative to the
California Investment Trust, including, among other things, its
recommendations relating to the viability of establishing the trust,
as specified. The bill's provisions would become inoperative,
and would be repealed, on January 1, 2017.

Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

SECTION 1. 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.
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


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 or
his or her designee
.
(2) The Senate Committee on Rules shall appoint 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 Speaker of the Assembly shall appoint 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.
(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.
(5) The Controller, Treasurer, and Governor, or their designees
, 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 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 state funds, and to
report to the Legislature pursuant to Section 64161.
(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.

(D) Generate earnings beyond those necessary for continued
operation of the trust, which could be used to supplement the General
Fund.
(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.
(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
the 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.
(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 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 on 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.