BILL ANALYSIS ------------------------------------------------------------ |SENATE RULES COMMITTEE | AB 1473| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 445-6614 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ THIRD READING Bill No: AB 1473 Author: Hertzberg (D), et al Amended: 9/3/99 in Senate Vote: 21 SENATE GOVERNMENTAL ORG. COMMITTEE : 11-0, 6/29/99 (May not be relevant) AYES: Baca, Burton, Chesbro, Dunn, Hughes, Johannessen, Karnette, Knight, Lewis, O'Connell, Perata NOT VOTING: Johnson SENATE APPROPRIATIONS COMMITTEE : 13-0, 9/1/99 AYES: Johnston, Alpert, Bowen, Burton, Escutia, Johnson, Karnette, Kelley, Leslie, McPherson, Mountjoy, Perata, Vasconcellos ASSEMBLY FLOOR : 79-0, 6/3/99 - See last page for vote (May not be relevant) SUBJECT : Capital outlay: state planning and funding SOURCE : California Business Roundtable DIGEST : This bill requires the Governor, beginning on or after January 1, 2002, to submit annually a five-year proposed capital improvement plan to the Legislature that includes proposed capital improvement projects and their proposed funding sources. CONTINUED AB 1473 Page 2 ANALYSIS : Existing law requires the director of the State Department of Finance to prepare a report by February 1 of each year projecting the State's infrastructure needs for the period 1991-2000, inclusive. This bill requires, beginning in 2002, that the Governor annually submit a five-year infrastructure plan to the Legislature. The plan must contain: 1.Identification of infrastructure requested by agencies. 2.Aggregate funding for transportation. 3.Infrastructure needs for K-12. 4.Instructional facility needs for UC, CSU, and the Community Colleges. 5.The cost of providing the infrastructure, sources of funding, and impact on the State's debt position. The bill states that the plan does not need to specify projects for funding but may recommend "the type and quantity of infrastructure to be funded." Senate Appropriations Committee staff note that such a general reporting requirement may not provide the Legislature with more information than it receives from the current infrastructure report. This plan is intended to be considered by the Legislature in conjunction with the Budget Bill. Comments According to the sponsor of the measure, the California Business Roundtable, a coalition of the CEOs of California's largest businesses, this bill will "require state policymakers to undertake a comprehensive review of California's capital facilities needs, establish a clear set of priorities, and adopt an annual plan to serve as a budget blueprint for financing those priorities over the next decade." Numerous organizations have attempted to estimate the State's 10-year infrastructure needs. These are summarized in the chart below. STATE INFRASTRUCTURE TEN-YEAR NEED ESTIMATES ($ IN AB 1473 Page 3 MILLIONS) CATEGORY FINANCE 1999 CAPITAL OUTLAYBUSINESS ROUNDTABLE 1998 AND INFRASTRUCTURE REPORT INFRASTRUCTURE REPORT Transportation & Housing 28,628 29,500 K - 12 Education 14,000 28,400 Higher Education 17,300 13,600 Corrections 9,485 9,200 Natural Resources 9,129 7,500 Other 3,705 2,300 TOTAL NEEDS 82,247 90,500 A December 1998 report by the Legislative Analyst's Office entitled Overhauling the State's Infrastructure Planning and Financing Process detailed many of the problems surrounding California's infrastructure problems. The problems identified were: 1.Infrastructure investment has not been treated as a problem in and of itself; 2.Current agency and Finance capital outlay plans are inadequate; 3.Programmatic goals for capital outlay are often lacking; 4.There are no criteria for setting statewide priorities; 5.No stable funding source for infrastructure exists, but for highway construction/renovation; 6.State and local funding responsibilities are not fully articulated; and, 7.Local infrastructure plans are even worse than the State's. The report then detailed a series of recommended actions the State should take to improve our infrastructure planning and financing process. Given the magnitude of the infrastructure problem facing California, this bill is a AB 1473 Page 4 bit short on specifics. For example, the problem of a lack of prioritization highlighted in the LAO report is not addressed directly in the bill. Additionally, there is no detail in the bill as to what should specifically be in the Governor's capital expenditure plan. FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes Local: No Fiscal Impact (in thousands) Major Provisions 1999-2000 2000-01 2001-02 Fund Various departments Annual costs in the $1 million range General beginning in 2001-02 SUPPORT : (Unable to verify at time of writing) California Business Roundtable (source) California Business Properties Association California Chamber of Commerce California Taxpayers' Association Planning and Conservation League ASSEMBLY FLOOR : 79-0, 6/3/99 AYES: Aanestad, Ackerman, Alquist, Aroner, Ashburn, Baldwin, Bates, Battin, Bock, Brewer, Briggs, Calderon, Campbell, Cardenas, Cardoza, Cedillo, Corbett, Correa, Cox, Cunneen, Davis, Dickerson, Ducheny, Dutra, Firebaugh, Florez, Floyd, Frusetta, Gallegos, Granlund, Havice, Hertzberg, Honda, House, Jackson, Kaloogian, Keeley, Knox, Kuehl, Leach, Lempert, Leonard, Longville, Lowenthal, Machado, Maddox, Maldonado, Margett, Mazzoni, McClintock, Migden, Nakano, Olberg, Oller, Robert Pacheco, Rod Pacheco, Papan, Pescetti, Reyes, Romero, Runner, Scott, Shelley, Soto, Steinberg, Strickland, Strom-Martin, Thompson, Thomson, Torlakson, Vincent, Washington, Wayne, Wesson, Wiggins, Wildman, Wright, Zettel, Villaraigosa NOT VOTING: Baugh TSM:kb 9/4/99 Senate Floor Analyses AB 1473 Page 5 SUPPORT/OPPOSITION: SEE ABOVE **** END ****