BILL ANALYSIS Ó
AB 2290
Page 1
ASSEMBLY THIRD READING
AB 2290 (John A. Pérez)
As Introduced February 21, 2014
Majority vote
ECONOMIC DEVELOPMENT 6-1
APPROPRIATIONS 12-5
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|Ayes:|Medina, Campos, Daly, |Ayes:|Gatto, Bocanegra, |
| |Fong, Fox, V. Manuel | |Bradford, |
| |Pérez | |Ian Calderon, Campos, |
| | | |Eggman, Gomez, Holden, |
| | | |Pan, Quirk, |
| | | |Ridley-Thomas, Weber |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Mansoor |Nays:|Bigelow, Donnelly, Jones, |
| | | |Linder, Wagner |
| | | | |
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SUMMARY : Authorizes the California Infrastructure and Economic
Development Bank (I-Bank) to serve as the primary state agency
for applying to any federal infrastructure bank or financing
authority. Further, the bill expands the membership of the
board of directors from five to seven members and specifies that
legislative members will be nonvoting members and may appoint a
designee to serve in his or her place.
EXISTING LAW :
1)Establishes the I-Bank within the Governor's Office of
Business and Economic Development (GO-Biz) and authorizes it
to undertake a variety of infrastructure related financial
activities including, but not limited to, the administration
of a revolving loan fund and the issuance of tax-exempt and
taxable revenue bonds.
2)Specifies that the I-Bank board of directors shall consist of
the following:
a) The Director of GO-Biz or a designee (chair);
b) The Director of Finance or a designee;
AB 2290
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c) The Treasurer or a designee;
d) The Secretary of Transportation or a designee; and
e) A Governor's appointee.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, implementation of this measure will result in minor
and absorbable costs to the I-Bank.
COMMENTS : This bill designates the I-Bank as the state's
primary liaison with the federal government on issues related to
a national infrastructure bank and adds legislative members to
the board of directors in order to more closely link its
activities to the state's broader economic and infrastructure
development initiatives.
In advocating for the heightened participation of the state in
federal legislative and congressional activities, the author
notes the importance of finding new sources of capital for
upgrading California's infrastructure and the continuing
interest in a national infrastructure bank model.
Background on Modern Infrastructure Network Links Economies
World class infrastructure plays a key role in business
attraction, as multinational companies consistently rank the
quality of infrastructure among their top four criteria in
making investment decisions. Research shows that as the United
States (U.S.) infrastructure has been in decline while
infrastructure in other countries is rapidly increasing. The
2012-13 Global Competitiveness Report by the World Economic
Forum places U.S. infrastructure 25th in the world, down from
23rd in 2010 and 7th in 2000.
California only received a "C" overall on its 2013
Infrastructure Report Card by the American Society for Civil
Engineers (ASCE). The ASCE also estimates that California's
annual unfunded infrastructure investment is $65 billion. The
impact of this lack of investment is compounded by the
substantial new infrastructure investments made in other states
and nations, including the expansion of the Panama Canal.
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Further impacting California's competitiveness, are the changes
brought by the increasingly integrated national economies. This
current globalization phase is changing the economic paradigm by
making the electronic and physical linkages between regional
economies more relevant and driving the need for high quality,
modern infrastructure networks.
At the same time, however, state and federal infrastructure
spending is on a decline. One federal response has been a
renewed call for a national infrastructure bank that can spur
the necessary investment to support manufacturing, goods
movement, energy production, and broadband deployment, among
other economic and community development purposes.
A National Infrastructure Reinvestment Bank was first proposed
by U.S. Senators Christopher Dodd and Chuck Hagel in 2007.
President Barack Obama supported the legislation in 2008 and
again in 2010. More recently, in his 2013 State of the Union,
President Obama emphasized the importance of fixing the nation's
infrastructure as part of his "Plan for a Strong Middle Class
and A Strong America" and proposed both a $50 billion "Fix it
First" program from peace dividends and a "Partnership to
Rebuild America" initiative, which would use public policies to
attract private investment in upgrading America's
infrastructure. Various members of the U.S. Congress are also
pursuing a national infrastructure bank model. U.S.
Representative Rosa DeLauro (D-CT-3), as an example, introduced
HR 2553 in 2013, which has 95 co-authors including 16 from
California.
Models for a national infrastructure bank have varied and the
state I-Bank has been asked to Washington D.C. several times to
discuss differing models. In one instance, the federal
government would use $60 billion in seed money over 10 years
with an expected return of $500 billion in private investment.
Given the significance of quality infrastructure within every
state's global competitiveness, it would seem that engaging in
the development of the national program would be within the
state's interest. This bill would specifically designate the
state I-Bank as the primary state agency for applying to the
federal infrastructure bank.
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Additional information on the role of infrastructure within the
California economy, including the significant defects and
funding gaps are discussed in greater detail in the policy
analysis.
Analysis Prepared by : Toni Symonds / J., E.D. & E. / (916)
319-2090
FN: 0003353