State funds: investment: California Infrastructure and Economic Development Bank loans.
AB 2480 mandates that by January 1, 2022, the California State Treasurer must target an investment of 1% of the average daily balance of the Pooled Money Investment Account into these newly eligible securities. This provision is expected to enhance the availability of funding for local entities undertaking infrastructure projects, thereby fueling economic development across California. The proposal builds on existing laws regarding how state surplus funds are invested, which previously focused primarily on government bonds and notes.
Assembly Bill 2480, introduced by Assembly Member Limn on February 19, 2020, intends to amend Section 16430 of the Government Code and add Section 16480.41. The bill seeks to expand the range of eligible securities for the investment of surplus state funds, particularly by including loans issued by the California Infrastructure and Economic Development Bank (I-Bank) aimed at financing infrastructure projects by local agencies. This move is positioned as a strategic initiative to bolster state-wide infrastructure projects by channeling public funds into critical developments.
While AB 2480 aims to support infrastructure projects through increased accessibility to state funds, the modifications in investment strategies may raise concerns among stakeholders regarding the risk profile of such investments. Critics may argue that expanding investment to include loans carries additional risks compared to traditional bonds, and could lead to fiscal challenges if the projects do not yield adequate returns. Supporters assert that prioritizing infrastructure development is essential for economic growth and modernization, which may present a much-needed boost to local economies.