AMENDED IN ASSEMBLY APRIL 20, 2026

AMENDED IN ASSEMBLY MARCH 19, 2026

CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION

97

Introduced by Assembly Members Haney and Kalra

(Coauthors: Assembly Members Elhawary and Lee)

February 19, 2026

An act to amend Section 57607 of, and to add Title 6.6 (commencing with Section 62700) to, to the Government Code, relating to economic development.

Vote: majority   Appropriation: no   Fiscal committee: yes   Local program: no

LEGISLATIVE COUNSEL’S DIGEST

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. Existing law authorizes the Commissioner of Financial Protection and Innovation to license up to two public banks in the state per year, as prescribed, upon an application by a local agency. Existing law prohibits the commissioner from issuing a public bank license after the expiration of a period of 7 years from the date upon which the commissioner first promulgated certain regulations related to public banks.

This bill bill, the State Bank Act, would delete that public bank licensing prohibition and 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 2 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.

The people of the State of California do enact as follows:

SECTION 1.

SEC. 2.

Title 6.6 (commencing with Section 62700) is added to the Government Code, to read:

Title 6.6. State Bank

Chapter 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 50612 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.

Chapter 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 15 of the Public Resources Code and Article 11 (commencing with Section 660) of Chapter 3 of Part 1 of Division 1 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 39711 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.