20250AB__224397AMD INTRODUCED 2026-02-19 AMENDED_ASSEMBLY 2026-03-19 AMENDED_ASSEMBLY 2026-04-20 2025 AB AMD Introduced by Assembly Members Haney and Kalra (Coauthors: Assembly Members Elhawary and Lee) LEAD_AUTHOR ASSEMBLY Haney LEAD_AUTHOR ASSEMBLY Kalra COAUTHOR ASSEMBLY Elhawary COAUTHOR ASSEMBLY Lee

An act to add Title 6.6 (commencing with

Section 62700) to the Government Code, relating to economic development. economic development State Bank Act. The Bergeson-Peace Infrastructure and Economic Development Bank Act creates within the Governor’s Office of Business and Economic Development the Infrastructure and Economic Development Bank and requires it to administer the act, which, among other things, provides for the financing of certain economic development projects. This bill, the State Bank Act, would create in state government the State Bank Commission and provide for its membership, as prescribed.

This bill would require, on or before June 1, 2028, the commission to develop a state bank plan that addresses various items with respect to creating a state bank, including a state guarantee of public deposits, including those held by public banks. The bill would require, on or before January 1, 2028, the commission to hold at least public hearings to solicit input on the state bank plan from members of the public and, by July 1, 2028, vote whether to adopt the state bank plan.

The bill would require, if the commission adopts by a majority vote the state bank plan, the commission to publish the state bank plan and the fact of its adoption on its internet website.

MAJORITY NO YES NO NO NO NO NO NO NO NO The people of the State of California do enact as follows: <caml:Num>SECTION 1.</caml:Num><caml:ActionLine action="IS_AMENDED" xlink:href="urn:caml:codes:GOV:caml#xpointer(%2Fcaml%3ALawDoc%2Fcaml%3ACode%2Fcaml%3ALawHeading%5B%40type%3D'TITLE'%20and%20caml%3ANum%3D'5.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'DIVISION'%20and%20caml%3ANum%3D'5.'%5D%2Fcaml%3ALawSection%5Bcaml%3ANum%3D'57607.'%5D)" xlink:label="fractionType: LAW_SECTION" xlink:type="locator">Section of the <caml:DocName>Government Code</caml:DocName> is amended to read:</caml:ActionLine><caml:Fragment><caml:LawSection id="id_8DF97761-1C78-49AA-8D5A-2D6BA1330706"><caml:Num>57607.</caml:Num><caml:LawSectionVersion id="id_296EEBB0-0A97-48F0-A1B9-C797A844EAAD"><caml:Content><xhtml:p>(a)<xhtml:span class="EnSpace"/>The Commissioner of Financial Protection and Innovation shall not issue more than two public bank licenses in a calendar year.</xhtml:p><xhtml:p>(b)<xhtml:span class="EnSpace"/>The Commissioner of Financial Protection and Innovation shall not issue a public bank license if issuing that public bank license would cause there to be more than public banks authorized to transact business pursuant to Division 1.1 (commencing with

Section 1000) of the Financial Code.</xhtml:p><xhtml:p>(c)<xhtml:span class="EnSpace"/>The Commissioner of Financial Protection and Innovation shall conduct a study of public banking in California within two years after the date upon which the commissioner issues the 10th public bank license.</xhtml:p></caml:Content></caml:LawSectionVersion></caml:LawSection></caml:Fragment></caml:BillSection>"?>

SECTION 1. This act shall be known as the State Bank Act.

SEC. 2. Title 6.6 (commencing with

Section 62700) is added to the Government Code , to read: 6.6. State Bank 1. General Provisions 62700. As used in this title: (a) “IBank” means the Infrastructure and Economic Development Bank created pursuant to

Section 63021. (b) “Commission” means the State Bank Commission. (c) “Local agency” means a county, city, or city and county. (d) “Local financial institution” has the meaning defined in

Section 57600. (e) “Public bank” has the meaning defined in

Section 57600. (f) “Public development facilities” has the meaning defined in

Section 63010. (g) “Public purpose financing” means the provision of financial assistance, including, but not limited to, direct loans, loan guarantees, credit enhancements, and bond purchases, for public development facilities, and other projects, programs, or activities that provide a demonstrable public benefit, including, but not limited to, the promotion of affordable housing, public infrastructure, environmental resilience, economic development, and social equity within the state. (h) “Social housing” has the meaning defined in

Section of the Health and Safety Code. (i) “State bank plan” means a plan to create a state-owned depository bank that does all of the following:

(1) Holds the state’s general fund moneys.

(2) Conducts public-purpose financing.

(3) Centralizes other state financial programs. 2. State Bank Commission 62705. (

a) There is hereby created in state government the State Bank Commission. (

b) The commission shall consist of all of the following members or their designees:

(1) The Governor.

(2) The Treasurer.

(3) The Controller.

(4) One member appointed by the Speaker of the Assembly with expertise in affordable housing finance.

(5) One member appointed by the Speaker of the Assembly with expertise in community lending, community development finance institutions, or credit unions.

(6) One member appointed by the Senate Committee on Rules with expertise in public finance or public banking.

(7) One member appointed by the Senate Committee on Rules with expertise in climate or infrastructure finance.

(8) One member appointed by the Governor with expertise in small business lending or economic development finance.

(9) One member appointed by the Governor with expertise in banking operations. 62706. (

a) On or before July 1, 2027, the commission shall contract with one or more independent entities with appropriate expertise in public banking, public finance, and depository institutions to create a state bank plan. (

b) On or before June 1, 2028, the commission shall develop a state bank plan, which shall address all of the following:

(1) Capitalization options.

(2) State guarantee of public deposits, including those held by public banks.

(3) Backstop mechanisms for loans, including the feasibility and proposed design of a multistate pooled backstop fund that includes public banks.

(4) A five-year business plan that, depending on available capital and in partnership with local financial institutions and public banks, provides financial products or services prioritizing public-purpose financing needs not adequately served by private capital markets related to climate, housing, small business, and local government that evaluates the creation of all of the following financing programs or activities: (

A) Building decarbonization or neighborhood-based decarbonization activities, including those described in

Article 5 (commencing with

Section 25665) of

Chapter 7.6 of Division of the Public Resources Code and

Article 11 (commencing with

Section 660) of

Chapter of Part of Division of the Public Utilities Code. (

B) Home hardening and other measures to address nature-related catastrophe risks that prioritize multifamily properties. (

C) Social housing, community land trusts, or facilitating community or tenant opportunities to purchase affordable housing. (

D) Small businesses located in underbanked, rural, tribal, or disadvantaged communities, as identified pursuant to

Section of the Health and Safety Code. (

E) Technical assistance and financial services for public banks or for local agencies in the process of organizing or establishing a public bank.

(5) Centralization of, and coordination with, the state’s other financing activities, including, but not limited to, those conducted by the IBank, State Air Resources Board, the Energy Commission, the Treasurer, and the California Housing Finance Agency.

(6) Application of appropriate investment screens to exclude investments that are incompatible with the bank’s environmental, social, and governance standards adopted by the bank’s board.

(7) Holding the deposits or other money belonging to, or in the control or custody of, any state property insurance program and other roles the state bank may serve in holistically reducing wildfire and other nature-related catastrophe risks and aiding in the financial recovery from those risks.

(8) Alternatives to existing security requirements for public deposits held in a state-owned depository.

(9) Evaluation of whether a state-owned depository bank should be established via conversion of an existing state entity or creation of a new entity.

(10) Proposed governance structure for the state-owned depository bank that ensures democratic accountability to the public, including consideration of an appropriate balance of interests within the governing body, mechanisms for meaningful public participation, legislative oversight, appropriate transparency and disclosure provisions, and protections against conflicts of interest. (

c) On or before January 1, 2028, the commission shall hold at least two public hearings to solicit input on the state bank plan from members of the public. (

d) On or before July 1, 2028, the commission shall vote whether to adopt the state bank plan. (e)

(1) If the commission adopts by a majority vote the state bank plan, the commission shall publish the state bank plan and the fact of its adoption on its internet website.

(2) A plan adopted pursuant to this subdivision shall not have any effect other than through the enactment of subsequent, implementing legislation.