This group is based off an existing one that works in California. The current name for the group is the Bureau of Investigation (BI). CBI was its former name that is used by the show. This is not the only group of its kind, I know my home state of North Carolina has a similar group (State Bureau of Investigation) whose purpose is similar to that of the FBI but on the State level.
Like the US government system the police system breaks out into many levels to ensure co-operation between states or local government. I believe the current police structure is: Local PD, County Sheriff, State Investigators (SBI, BI, etc), Federal Investigators (FBI).
I received my facts about the CBI from the article below.
http://en.wikipedia.org/wiki/California_Bureau_of_Investigation
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