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 and prohibits 15 percent of the financing annually approved by the executive director that utilizes state funds from the infrastructure bank fund from being expended upon educational facilities, environmental mitigation measures, and parks and recreational facilities. This bill would, among other things, 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 Controller, or their designees. The bill would require the commission to appoint members of the bank board, as specified. The bill would eliminate the I-Bank Fund spending limit with respect to educational facilities, environmental mitigation measures, and parks and recreational facilities. The bill would require the executive director, by January 1, 2021, 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 I-Bank, as described above, and the operation of the I-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 I-Bank and the operation of the I-Bank as a depository institution. The bill, until January 1, 2022, 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 authorize the I-Bank to engage in certain financial transactions related to local agencies and tribal governments, including by authorizing the I-Bank to purchase bond anticipation notes of local agencies and tribal governments. Existing law, the Small Business Financial Assistance Act of 2013, requires the I-Bank to administer the California Small Business Finance Center that administers programs to assist businesses seeking new capital resources. This bill would, among other things, require the I-Bank to continue or expand the Small Business Finance Center as specified, including by guaranteeing loans to small businesses with a focus on specified borrowers. (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. Existing law regulates the investment of public funds by local agencies. Existing law requires the Treasurer to invest, or deposit in banks and savings and loan associations, specified state moneys designated as surplus and determined to be available for that purpose by the Pooled Money Investment Board. Existing law prescribes eligible securities for the investment of surplus moneys under these provisions, including bonds, notes, and warrants of this state and bonds or warrants of any county, city, or specified types of districts of this state. This bill would require the Department of Business Oversight to charter the I-Bank as a depository institution and would 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 I-Bank. The bill would require the I-Bank to, among other things, become a member of the Federal Reserve System and the Federal Home Loan Bank System and would prohibit the bank from engaging in prohibited high-risk activities, as defined. The bill would expand the scope of securities eligible for investment under these provisions to include equity, loans, debt securities, bond anticipation notes, or other obligations issued by the I-Bank. The bill would require the Treasurer to target an investment of 10% of the average daily balance of the Pooled Money Investment Account into those obligations. The bill would require, within one year of the date on which the I-Bank is chartered as a depository institution, the Treasurer to deposit at least 20 percent of the deposits in the State Treasury into the Treasurer's account at the I-Bank and would require, within 5 years of the date on which the I-Bank is chartered as a depository institution, the Treasurer to deposit 100 percent of the deposits in the State Treasury into the Treasurer's account at the I-Bank. (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, including 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 I-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.