BILL NUMBER: AB 2570 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MAY 26, 2006
AMENDED IN ASSEMBLY APRIL 24, 2006
AMENDED IN ASSEMBLY APRIL 6, 2006
INTRODUCED BY Assembly Member Arambula
( Principal coauthor: Assembly Member
Haynes )
FEBRUARY 23, 2006
An act to add Sections 7504.5, 13984.3, and 13984.5 to the
Government Code, to add Article 8 (commencing with Section
13900) to the Insurance Code, relating to economic
development.
LEGISLATIVE COUNSEL'S DIGEST
AB 2570, as amended, Arambula Community investment.
Existing law requires that each state and local retirement system
submit audited financial statements to the State Controller at the
earliest practicable opportunity within 6 months of the close of each
fiscal year.
This bill would require the public
retirement systems with assets over $4,000,000,000 to
include in financial statement statements
specified information regarding investments made
it holds in its portfolio in California and
emerging domestic markets within the state. This bill
would specify that investments be reported by asset class, fair
market value, and percentage of total portfolio.
This bill would state legislative declarations regarding
institutional investors, including public pension funds.
This bill would also state the Legislature's intent
that, consistent with their fiduciary obligations, the state
and local other retirement systems set
an investment goal of no less than 2% of their total investment
portfolios in emerging domestic markets within the state
with sufficiently diversified portfolios adopt emerging domestic
market investment policies that meet their own unique investment
objectives .
Existing law vests the Secretary of Business, Transportation and
Housing with various administrative duties and functions.
This bill would require the secretary to establish a statewide
cooperative partnership with business and industry sectors to develop
a strategy to attract new private investment into the state. This
bill would further require the secretary to establish an Advisory
Committee on Private Investments in California's Future, as
specified, to assist in the development and implementation of the
strategy and guide the partnership.
This bill would also require the secretary to submit the strategy
to the Legislature and the Governor by October 1, 2007, and to update
the strategy at least every 5 years.
Existing law provides that insurers may become eligible for tax
credits, as specified, for certain voluntary investments in low
income and rural communities. To become eligible for these tax
credits, the insurers must apply to the Department of Insurance and
be certified as "community development financial institutions" by the
department. Under existing law, these provisions will be repealed
in December 2007.
This bill would establish the California Rural Community Develop
Financial Institutions Act, which would require the department to
establish an outreach program to rural and underserved areas, as
defined, to certify community development financial institutions that
are eligible to participate in the tax credit program.
This bill would also require the department to report to the
Legislature by July 1, 2007, describing the required outreach
program. The report would be required to contain specified
information.
This bill would further require the department, beginning on
October 1, 2008, to annually provide information of the department's
Internet Web site. The required information would be the total number
of certified community development financial institutions and their
service area, and the total number of certified community development
financial institutions, and their service areas added since the last
published report.
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. Section 7504.5 is added to the Government Code, to
read:
7504.5. As part of its annual audited financial statement
submitted to the Controller pursuant to subdivision (c) of Section
7504, each state and local public retirement system with assets
over $4 billion shall report on the number, type, and
value of investments it has made during the
applicable fiscal year holds in its portfolio in
California and all assets in emerging domestic markets within the
state, as defined in subdivision (b) (c)
of Section 13984.5 and its success in meeting the goal set
forth in Section 13984.2 of the Government Code .
Investments by asset class shall be reported by fair market value and
percentage of the total portfolio .
SEC. 2. Section 13984.3 is added to the Government Code, to read:
13984.3. (a) The Secretary of Business, Transportation and
Housing shall establish a statewide cooperative partnership with the
business and industry sectors to develop a strategy to attract new
private investment to the state.
(b) (1) The In addition to any other group
or entity that the Secretary chooses to consult in preparation of
the private investment strategy developed pursuant to subdivision
(a), the secretary shall establish an Advisory Committee on
Private Investment in California's Future to assist in the
development and implementation of the strategy and guide the
partnership.
(2) The agency shall provide staffing for the committee.
(3) The committee shall consist of nine committee members
appointed as follows:
(A) The Governor shall appoint seven representatives as follows:
(i) One representative from the banking industry.
(ii) One representative from an out-of-state insurance company.
(iii) One representative from an out-of-state foundation.
(iv) One representative from a domestic corporate pension fund.
(v) One representative from a foreign corporate pension fund.
(vi) One representative from a domestic public pension fund.
(vii) One representative from a foreign public pension fund.
(B) The President pro Tempore of the Senate shall appoint one
representative from an in-state foundation.
(C) The Speaker of the Assembly shall appoint one representative
from an in-state insurance company.
(D) The members shall serve at the pleasure of the appointing
authority and shall not be compensated.
(E) Vacancies may
be filled at the pleasure of the appointing authority.
representatives from the banking and insurance industries,
foundations, corporate and public pension funds, venture capital
funds, community development financial institutions, and community
development corporations. Representatives should include foreign and
out-of-state, as well as California based entities.
(4) The agency shall use the California Economic Development
Strategic Plan prepared pursuant to Section 15570 to facilitate the
development of the implementation strategy.
(c) The implementation strategy shall do the following:
(1) Assess current trends and opportunities in global and domestic
investment practices.
(2) Assess who are the major asset managers by investment types.
(3) Assess how the state can be a greater recipient of foreign and
domestic investment including, but not limited to, key
California businesses and industries, and areas of the state with
capital needs that have been historically unmet, also known as
emerging domestic markets .
(4) Include a discussion on how the state could establish a
cooperative private investment marketing campaign.
(5) Make recommendations for changes, if any, in applicable
regulations and statutes.
(6) Make any other recommendations that the advisory committee
determines are relevant.
(d) The committee secretary may hold
business roundtables, conferences, and use other devices the agency
deems fit appropriate to engage leaders
in the business and industry sectors to develop the implementation
strategy.
(e) The secretary shall submit the implementation
private investment strategy developed
by the committee to the Legislature and the Governor by
October 1, 2007. The implementation private
investment strategy may be part of, or at least consistent
with, the California Economic Development Strategic Plan prepared
pursuant to Section 15570, and updated at least every five years.
SEC. 3. Section 13984.5 is added to the Government Code, to read:
13984.5. (a) The Legislature finds and declar es
that investments in emerging domestic markets can provide appropriate
risk-adjusted returns to institutional investors including public
pension funds. In 2000, the boards for administration for CalPERS and
CalSTRS each adopted a 2 percent goal for investments in emerging
domestic markets. These investments have, first, created value for
the members of their retirement system, and second, increased access
to financial capital in historically underserved markets.
(b) It is the intent of the Legislature
that, consistent with their fiduciary obligations, state and
local other retirement systems set an
investment goal of no less than 2 percent of their total portfolios
in emerging domestic markets within the state. with
sufficient diversified portfolios adopt emerging domestic market
investment policies that meet their own unique investment objectives.
(b)
(c) For the purposes of this section "emerging domestic
markets" means areas of the state that have been identified by the
California Economic Strategy Panel as having limited access to
capital markets. The Economic Strategy Panel shall prepare a
list of ZIP Codes identifying emerging domestic markets that shall
be used develop, in consultation with the public
pension funds with assets over $4 billion, a definition of emerging
domestic markets that these funds can use to track private
investments in California's financially underserved areas
emerging domestic markets . The list of
emerging domestic markets definition shall be
prepared by October 1, 2007, and updated every five years. The
list definition shall be made available
through the Economic Strategy Panel's Internet Web site.
SEC. 4. Article 8 (commencing with Section
13900) is added to Chapter 2 of Division 3 of the Insurance Code, to
read:
Article 8. The California Rural Community Development
Financial Institutions Act
13900. The California Department of Insurance shall establish an
outreach program to rural and underserved areas of California to
certify Community Development Financial Institutions that are
eligible to participate in the program referred to in Sections 12209,
17053.57 and 23657 of the Revenue and Taxation Code.
(a) For the purposes of this article "rural" means communities
with populations under 100,000 persons located outside metropolitan
statistical areas.
(b) For the purposes of this article "underserved area" means a
region of the state, based on an annual survey of
department-certified Community Development Financial Institutions,
that has less than five certified Community Development Financial
Institutions.
(c) For the purposes of this article, "region" means an economic
region as defined by the California Economic Strategy Panel
California regions are as follows:
(1) Central Sierra.
(A) Alpine.
(B) Amador.
(C) Calaveras.
(D) Inyo.
(E) Mariposa.
(F) Mono.
(G) Tuolumne.
(2) North Coast.
(A) Humboldt.
(B) Lake.
(C) Mendocino.
(3) Northern California.
(A) Del Norte.
(B) Lassen.
(C) Modoc.
(D) Nevada.
(E) Plumas.
(F) Sierra.
(G) Siskiyou.
(H) Trinity.
(4) San Joaquin Valley.
(A) Fresno.
(B) Kern.
(C) Kings.
(D) Madera.
(E) Merced.
(F) San Joaquin.
(G) Stanislaus.
(H) Tulare.
(5) Northern Sacramento Valley.
(A) Butte.
(B) Colusa.
(C) Glenn.
(D) Shasta.
(E) Tehama.
(6) Central Coast.
(A) Monterey.
(B) San Benito.
(C) San Luis Obispo.
(D) Santa Barbara.
(7) Greater Sacramento.
(A) El Dorado.
(B) Placer.
(C) Sacramento.
(D) Sutter.
(E) Yolo.
(F) Yuba.
(8) Southern California.
(A) Los Angeles.
(B) Orange.
(C) Riverside.
(D) San Bernardino.
(E) Ventura.
(9) Bay Area.
(A) Alameda.
(B) Contra Costa.
(C) Marin.
(D) Napa.
(E) San Francisco.
(F) San Mateo.
(G) Santa Clara.
(H) Santa Cruz.
(I) Solano.
(J) Sonoma.
(10) Southern Border Region.
(A) Imperial County.
(B) San Diego County.
13901. The department shall report to the Legislature by July 1,
2007, detailing the outreach program described in Section 13900, and
shall contain the following:
(a) The outreach strategy.
(b) The outreach implementation plan, including timeline,
benchmarks and measurable objectives.
(c) The stakeholders participating in the implementation of the
plan.
13902. Beginning on October 1, 2008, the department shall
annually provide the following information on the department's Web
site:
(a) The total number of certified Community Development Financial
Institutions and their service area.
(b) The number of certified Community Development Financial
Institutions and their service areas added since the last published
report.
(c) A summary of investments made by community development
financial institutions with funding received in conjunction with the
credits authorized by Sections 12209 and 17053.57 of the Revenue and
Taxation Code, presented as follows:
(1) Geographic area.
(2) Total moneys invested.
(3) The type of investments made, for example:
(A) Real property.
(B) Private equity other than real property.
(C) Venture capital.
(D) Startup financing.
(d) Number of jobs created.
(e) Units of lower income housing financed.
(f) Small businesses assisted.