Key public finance bills stall in California legislature

One California bill that would have created an infrastructure bank and another to bolster housing finance were among those placed on hold before the state legislature adjourned for the year.

The state Senate and Assembly's appropriations committees parked hundreds of bills with new spending attached in a "suspense file" as the session neared its conclusion Sept. 13.

Among them were Senate Bill 750, introduced by Sen. Dave Cortese, D-San Jose, to create a financing tool to back loans and bonds for affordable housing projects using the state's credit.

The California Housing Finance and Credit Act passed the Senate on a 38-2 vote, but was placed in the suspense file by the Assembly appropriations committee and has been turned into a two-year bill, allowing it to be considered when lawmakers return in 2026.

SB 750 is part of a two-bill package ? the second piece is a 2026 constitutional amendment requiring voter approval ? that would allow California to apply "its full faith and credit" to loans and municipal bonds used to build multifamily housing.

The concept is to provide low-cost financing to speed up the production of housing projects in the state.

The California Housing Partnership estimates the state has a need for 1.3 million additional affordable housing units.

"SB 750 represents a much needed constitutional fix to California's housing crisis, and I remain fully committed to advancing it," Cortese said.

"I will be pursuing it vigorously when the Legislature reconvenes in January, along with an accompanying constitutional amendment to place before voters," Cortese said. "With over 500,000 affordable housing units stalled in the pipeline, we cannot afford to let this financing bottleneck continue."

SB 769, the Golden State Infrastructure Corporation Act, introduced by Sen. Anna Caballero, D-Merced, would establish the Golden State Infrastructure Corp. within the State Treasurer's Office as a not-for-profit corporation and create a board of directors to oversee it.

The bill passed the Senate on a 35-2 vote in May, but was placed in the inactive file on Sept. 2 by the Assembly Appropriations Committee.

The bill, also backed by State Treasurer Fiona Ma, would have been modelled on the California Infrastructure and Economic Development Bank, but the structure would have more flexibility and a different regulatory framework, according to the legislation.

Its purpose was to finance in-state infrastructure projects through both debt and equity financing. The bill also would have created a revolving fund to support the efforts, though no state appropriation amount to seed such a fund was included in the legislation.

Caballero could not be reached for comment on whether she plans to revive the bill in January.