BILL ANALYSIS
AB 2684
Page 1
Date of Hearing: April 21, 2010
ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
Cameron Smyth, Chair
AB 2684 (Emmerson) - As Amended: April 8, 2010
SUBJECT : Infrastructure financing.
SUMMARY : Makes clarifying changes to the statutory
authorization for local governmental agencies to utilize private
sector financing or contributions, public financing, and any
combination thereof, to study, plan, design, construct, develop,
finance, maintain, rebuild, improve, repair, or operate, or any
combination thereof, fee-producing infrastructure facilities.
Specifically, this bill makes a potential private sector
partner's demonstrated competence and qualifications to perform
the services required under the agreement, including prior
experience in performing similar services, one of the primary
selection criteria to be applied by a governmental agency in
making a selection.
EXISTING LAW :
1)Permits a governmental agency to solicit proposals and enter
into agreements with private entities for the design,
construction or reconstruction by private entities for
specific types
of fee-producing infrastructure projects.
2)Permits these agreements to provide for private entities to
lease or operate these fee-producing infrastructure facilities
that are owned by a governmental entity constructed by a
private entity, for a period of up to 35 years.
FISCAL EFFECT : Unknown
COMMENTS :
1)The Legislature passed AB 2660 (Aguiar), Chapter 1040,
Statutes of 1996, which permitted a governmental agency to
solicit proposals and enter into agreements with private
entities for the design, construction, or reconstruction by
private entities for specific types of fee-producing
infrastructure projects that could provide for private
AB 2684
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entities to lease or operate these fee-producing
infrastructure facilities for a period of up to 35 years.
These provisions have been essentially unchanged since their
enactment.
2)A local government must use a private sector contractor's
"demonstrated competence and qualifications" as the primary
selection criteria when selecting a private-sector contractor
with which to enter into an agreement for the study, planning,
design, developing, financing, construction, maintenance,
rebuilding, improvement, repair, or operation of fee-producing
infrastructure. AB 2684 eliminates the designation of a
primary selection criteria, making a contractor's
"demonstrated competence and qualifications" one among many
criteria that a local government may use in selecting a
private-sector partner.
3)According to the author, AB 2684 is intended to make the
existing authority for public-private partnerships more
useable by giving the public agency more flexibility in
choosing a private sector partner. In so doing, this avoids
any inadvertent constraint on deployment of new financing
arrangements that will help local governments meet their
infrastructure needs.
The author also says that enabling local governments to partner
with private entities to facilitate much-needed infrastructure
improvements will create new jobs for California, too. The
author cites statistics from the U.S. Conference of Mayors and
Associated General Contractors of America, who have estimated
that, for every $1 million invested in water infrastructure,
8.7 jobs are created and 28,500 additional jobs ripple down
per $1 billion.
4)This bill is similar to AB 1261 (Caballero, 2007), which was
heard and passed by this Committee on a 7-0 vote.
5)Support Arguments : Supporters, Veolia Water North America,
say AB 2684 is a necessary first step to facilitate local
governments' use of the existing framework for public-private
partnerships by providing more flexibility in choosing a
private sector partner. AB 2684 will fine-tune a tool local
governments can use to more efficiently fund, build, and
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operate water and wastewater systems.
Opposition Arguments : Opposition, Professional Engineers in
California Government, says AB 2684's change in the primary
selection criteria to make contractors demonstrate confidence
in qualifications is insufficient for choosing a contractor.
REGISTERED SUPPORT / OPPOSITION :
Support
Veolia Water North America [SPONSOR]
Opposition
Professional Engineers in CA Government
Analysis Prepared by : Jennifer R. Klein / L. GOV. / (916)
319-3958