LOS ANGELES — A California Assembly committee approved a bill that creates an opportunity for the state's two big public employee pension funds to work with the Department of Finance to fund infrastructure projects.
Assembly Bill 2348, authored by Marc Levin, D-Marin County, creates a system for the California Public Employees' Retirement System and the California State Teachers' Retirement System to work with DOF to identify investment opportunities and fund California infrastructure projects.
It was approved unanimously Wednesday by the Assembly Committee on Public Employees, Retirement and Social Security.
The bill allows the Department of Finance to identify the specific projects that need investment for which they can guarantee the rate of return to CalPERS and CalSTRS.
According to the legislation, it would establish a Reinvesting in California Special Fund in the State Treasury to be used to pay the rate of return guaranteed by DOF. It specifies that the guaranteed rate of return is subject to the availability of money in the fund. It prohibits general fund money from being deposited in the fund. The legislature would identify special fund money, including trust fund money that could be used.
"California's public pension funds have a tremendous capacity to invest in California's infrastructure needs, but they invest only minimally in California infrastructure," Levine said.
The bill would give the state an additional avenue to invest in critical infrastructure, such as in the state's publicly owned but privately operated seaports, said Mike Jacob of the Pacific Merchant Shipping Association, an Oakland-based maritime trading group.
The State Building and Construction Trades Council and the Pacific Merchant Shipping Association supported the bill, which now advances to the Assembly Committee on Appropriations.
California Forward, a think tank, estimates that the state will need to spend $835 billion over the next decade to meet California's water, transportation and K-12 infrastructure needs.
