BILL ANALYSIS Ó
SENATE GOVERNANCE & FINANCE COMMITTEE
Senator Lois Wolk, Chair
BILL NO: SB 907 HEARING: 4/27/11
AUTHOR: Evans FISCAL: Yes
VERSION: 4/25/11 TAX LEVY: No
CONSULTANT: Detwiler
MASTER PLAN FOR INFRASTRUCTURE FINANCING
AND DEVELOPMENT COMMISSION
Creates a temporary state commission to study
infrastructure needs.
Background and Existing Law
Nearly a decade ago, the Legislature adopted three state
planning priorities:
Promote infill development and equity.
Protect environmental and agricultural resources.
Encourage efficient development patterns.
These statutory priorities guide the state government's
actions relating to land use planning and infrastructure
spending (AB 857, Wiggins, 2002).
Every four years, the Governor must prepare a State
Environmental Goals and Policy Report which looks at state
growth and development over the next 20 to 30 years and
includes approved environmental goals and policies. The
Governor's Office of Planning and Research (OPR) prepares
the report, the Governor sends it to the Legislature for
review, the Legislature can study the report, and the
Governor must consider the Legislature's advice before
approving it (AB 2070, Assembly Select Committee on
Environmental Quality, 1970). Starting in 2004, revisions
to the Environmental Goals and Policy Report must be
consistent with the state planning priorities adopted in
2002. The last Environmental Goals and Policy Report that
a Governor approved was An Urban Strategy for California
(1978).
State law intends the Governor's Environmental Goals and
Policy Report to be a "clear framework" for statewide
functional plans and capital spending. A 1992 OPR study,
Statewide Plan Coordination in California, identified over
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two dozen state functional plans that affect growth
management, including plans for coastal resources
(California Coastal Commission), energy supplies
(California Energy Commission), housing (Department of
Housing and Community Development), transportation
(Department of Transportation), and water resources
(Department of Water Resources), among others.
As part of the annual state budget proposal, the Governor
must submit a five-year infrastructure plan to the
Legislature. This annual, five-year plan must identify:
Infrastructure projects requested by state
agencies.
Transportation projects identified in the State
Transportation Improvement Program.
K-12 school infrastructure needs.
Higher education facility needs.
The plan must estimate the costs of those infrastructure
projects. The plan must also identify the criteria and
priorities for funding infrastructure, funding sources, the
effect on the state government's debt position, and
recommend specific projects for funding and capital outlay
appropriations (AB 1473, Hertzberg, 1999). The criteria
for selecting state agencies' infrastructure projects must
be consistent with the state planning priorities adopted in
2002. The State Department of Finance issued the
California Five-Year Infrastructure Plan in 2002, 2003,
2006, 2007, and 2008. The Department intends to issue a
new five-year plan in January 2012.
Governor Schwarzenegger issued the California Strategic
Growth Plan in 2007 and 2008, laying out the state's
infrastructure requirements for the next two decades. The
2008 edition proposed $48.1 billion in general obligation
bonds and $2.3 billion in lease-revenue bonds to cover
projects through 2016.
The U.S. Census counted 37.3 million Californians in April
2010. According to a projection prepared by the State
Department of Finance in 2007, the state may reach almost
60 million residents by 2050. Not only will California's
population grow, it will also see demographic changes
involving aging, immigration, race, and ethnicity.
Settlement patterns may also change as established
communities become denser. By any measure, Californians
will need more housing and the public works that serve
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them.
Proposed Law
Senate Bill 907 creates the 11-member Master Plan for
Infrastructure Financing and Development Commission. By
December 1, 2013, the Commission must submit a final report
to the Governor and the Legislature which contains a
long-term plan and strategy for the state's infrastructure
needs and a prioritized plan to meet those needs. The
Commission must also submit periodic progress reports.
The Commission dissolves 30 days after it issues its final
report. Further, the bill's provisions automatically
terminate when the Commission dissolves, unless legislators
extend the date.
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The Commission's plan must:
Project population, social, and economic trends
through 2050.
Identify the type and distribution of
infrastructure needed through 2050.
Incorporate the findings of existing state
infrastructure plans and reports.
Assess the state's capital needs for infrastructure
projects through 2050, including private capital and
public financing.
Assess the availability of private and public funds
for joint projects through 2050.
Recommend a financing plan for capital needs
through 2050, by five-year intervals, along with
feasible financing methods.
The Commission must recommend a method to track the state's
infrastructure progress and periodically reassess the
master plan.
The Commission's final report must contain a plan that
identifies the types, distribution, and priority for
developing infrastructure projects through 2050, and a
measureable process to implement this plan. The plan must
also include a process to periodically adjust these
projects to meet changing circumstances.
When developing its recommendations, the Commission must
use existing state and local reports on infrastructure
needs. SB 907 specifically lists:
The Governor's annual, five-year infrastructure
plan.
The State Environmental Goals and Policy Report.
The California Transportation Plan.
The sustainable communities strategies.
Greenhouse gas emissions reduction planning.
The California Water Plan.
The Commission consists of:
The State Treasurer or a designee with a public
finance background.
Six members appointed by the Governor:
o A representative from organized labor.
o A representative from a statewide
business organization.
o A public member.
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o A state agency or department director.
o A member with large-scale public works
financing expertise.
o An economist accomplished in interpreting
the state's economy.
Two members appointed by the Assembly Speaker:
o A member with transportation expertise.
o A member with natural resources and
conservation expertise.
Two members appointed by the Senate Rules
Committee:
o A member with education infrastructure
financing expertise.
o A member with housing, urban planning, or
financing expertise.
The Governor appoints the Commission's chair who serves
full-time at an unspecified salary. The Commission's vice
chair is the State Treasurer (or designee). The other
Commissioner members may receive a per diem of $50, not to
exceed $300 a month, plus travel and other expenses.
The Commission's chair appoints the executive director who
receives an unspecified salary. The executive officer must
examine ways to borrow staff from state and local
governments and private nonprofit organizations, subject to
the Commission's approval and direction. The Commission
can ask experts for help. The Commission may delegate
contracting authority to its staff, subject to relevant
state law.
SB 907 requires the Commission's products to incorporate
opportunity for public comment and participation. The
Commission's chair must appoint at least five task force
committees to assess, inventory, and report on long-term
needs and financing alternatives:
Planning and financing.
Transportation.
Housing.
Natural resources and conservation.
Education.
A Commission member may chair each task force committee
which must also include topical experts and representatives
of industry and trade groups. The chair of each task force
committee must develop a work plan with deadlines, and
convene meetings. Each task force committee's chair must
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present its findings to the Commission.
SB 907 becomes operative only if the Legislature
appropriates funds through the Budget Act to support the
Commission. The bill declares that the Legislature will
appropriate funds for the Commission's operating costs.
The bill indicates that funds will be appropriated from the
existing California Debt and Investment Advisory Commission
fund.
The bill contains five legislative findings and
declarations regarding California's population growth and
the need to plan for infrastructure.
State Revenue Impact
No estimate.
Comments
1. Purpose of the bill . The early 20th Century architect
and urban planner Daniel Burnham admonished his colleagues,
Make no little plans. They have no magic to stir men's
blood and probably will not themselves be realized. Grand
societies need grand plans to stimulate public support,
gather financial resources, and motivate political
commitment. The Commission created by SB 907 will focus on
the demographic changes that Californians must embrace by
2050, translating long-range infrastructure needs into
feasible implementation programs over five-year intervals.
By blending executive branch participants with four
legislative appointees -- along with public participation
and vigorous efforts by broadly based task forces -- the
bill brings the affected parties together in ways that the
previous infrastructure planning exercises have not. A
century after Californians endorsed Governor Hiram
Johnson's Progressive principles, it's time again to
challenge the experts to help state government get ready
for the future.
2. Just do it ! State planning priorities guide state
officials' land use and infrastructure planning. The State
Environmental Goals and Policy Report is the Governor's
quadrennial duty to look ahead 20 to 30 years. Scores of
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state agencies and departments have their own long-term
statewide functional plans. The Strategic Growth Plan lays
out the state's public works funding scheme until 2016.
The Governor's California Five-Year Infrastructure Plans
annually links public works funding to State Budget
spending. If California doesn't lack from statewide
planning for public works, what's the need for another
state commission and another statewide infrastructure plan?
What the state government needs is long-term leadership
that's committed to turning these existing plans into
political and fiscal realities. Constitutional officers
like the Governor and State Treasurer have the resources
and powers to accomplish that goal without a bill. One
quick executive order can galvanize state departments into
action.
3. Long horizon, short deadline . SB 907 charges the new
Commission to look forward, in five-year intervals, to the
state's needs in 2050, reporting by December 1, 2013. The
Commission must reach for that 37-year time horizon in just
23 months. Between the bill's effective date of January 1,
2012 and the Commission's dissolution by December 31, 2013,
that's a lot of work for a part-time Commission and its
multiple task force committees. If the commissioners want
their task force committees to generate new demographic,
fiscal, and infrastructure research, and then engage the
wider public, they may not have enough time. However, if
the Commission's executive director and borrowed staff rely
on current studies, reports, and recommendations, they can
probably help the task force committees sort through the
existing information and still meet the statutory deadline.
The Committee may wish to consider whether SB 907 gives
the new Commission enough time to fulfill the bill's
ambitious goals.
4. Fill in the blanks . The new Commission's stars are its
full-time chair and full-time executive director. The
other commissioners, task force committees, and borrowed
staff play supporting roles. SB 907 provides modest per
diem payments and expenses for the other commissioners.
The Commission's chair and executive director will receive
salaries, although the bill does not say how much. The
Committee may wish to consider amendments that either fill
in those blanks or remove them, leaving the salary
decisions up to the Commission itself. The Legislature
retains budgetary control because it appropriates the
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operating funds.
5. Legislative history . SB 907 is similar to AB 2579
(Evans, 2010) which died in the Assembly Appropriations
Committee.
Support and Opposition (4/21/11)
Support : State Treasurer Bill Lockyer; American Council of
Engineering Companies; American Society of Civil
Engineers-Region 9; Associated General Contractors of
California Chapters; California Alliance for Jobs;
California's Coalition for Adequate School Housing;
California Tax Reform Association; Engineering & Utility
Contractors Association; Transportation California;
Self-Help Counties Coalition.
Opposition : Unknown.