LOS ANGELES -- Gov. Pete Wilson of California has vetoed a bill for a new economic development financing authority, saying it should be considered next year as part of a comprehensive effort to establish an infrastructure bank.

Senate Bill 820, sponsored by state Sen. Art Torres, D-East Los Angeles, would have created the California Economic Development Financing Authority.

The authority "would be empowered to issue revenue and general obligation bond approved by the voters in order to foster economic development in the state," Wilson said in his veto message.

But he said S.B. 820 "should be reconsidered next year as part of my comprehensive effort to establish an infrastructure bank for California."

The authority's purpose, according to a legislative analysis of the bill, would have been to "promote commerce and industry and generally to promote economic development." Municipalities with the highest unemployment rates would have had first priority for project funds, the analysis said.

S.B. 820 called for the authority to issue bonds to finance economic development projects, small-and medium-sized businesses, and the revolving loan funds of economic development organizations.

Provisions in S.B. 820 would have made the financing authority part of a larger umbrella organization if separate legislation, Assembly Bill 1495, had moved forward.

But A.B. 1495, which would form a state infrastructure bank, has stalled in the state Senate until at least January, when legislators are scheduled to return from a recess. Proponents of A.B. 1495 said they did not have enough time to fully explain the measure before the recess started a month ago.

As a result, the financing authority proposed by S.B. 820 went before the governor as an independent entity.

Both bills are in line with numerous pending measures designed to foster and manage California's growth. Ways to spur economic and infrastructure expansion, while controlling growth, have been a hot item of debate in Sacramento over the last couple of years.

"Interest in creating an infrastructure bank will remain high in 1994, but success will be complicated by disagreement on how to link its operations to state and local growth management policies," Sen. Marian Bergeson, chairwoman of the Senate Committee on Local Government, said in a recent legislative overview.

Wilson is pushing his own plan, known as the California Growth Management Strategy Act. Other groups also have sponsored growth management bills that propose infrastructure and environmental improvements.

"After five years of debating statewide growth management, the issues are well defined," Bergeson said. "But passing a successful bill in 1994 will require intense negotiations and strong political leadership."

Bergeson said "political gridlock continues" over such growth policies and the role of state government.

For example, opponents of A.B. 1495 have complained that the bill lacks planning policies that would guide choices of infrastructure projects.

"It's like giving money with no strings attached," said V. John White, legislative advocate for the Sierra Club, in a recent interview.

But supporters of A.B. 1495 contend that the bill spells out the types of projects that would qualify for funds from the infrastructure bank. For example, projects would be required to meet standards already set in a state environmental goals and policies report, according to Rex Hime, chief executive officer of the California Business Properties Association.

The bill "has adequate policy for the bank and projects developed by the bank and the types of bonds to be issued for the bank," said Richard Lyon, an A.B. 1495 supporter and lobbyist for the California Building Industry Association. "Some people are trying to tie infrastructure development to the planning process. They are two completely separate issues."

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