BILL ANALYSIS                                                                                                                                                                                                    



                                                             


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|SENATE RULES COMMITTEE            |                  AB 1473|
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                       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





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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  







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                                                       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  







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                                                       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 







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               SUPPORT/OPPOSITION:  SEE ABOVE

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