BILL NUMBER: AB 1460 INTRODUCED
BILL TEXT
INTRODUCED BY Assembly Member Solorio
FEBRUARY 27, 2009
An act to add Section 13997.5 to, and to repeal and add Section
15570 of, the Government Code, relating to economic development.
LEGISLATIVE COUNSEL'S DIGEST
AB 1460, as introduced, Solorio. Economic development.
(1) Existing law requires the Secretary of Labor and Workforce
Development to convene a biennial economic strategy panel, known as
the California Economic Strategy Panel and consisting of specified
appointed members, for purposes of providing recommendations
regarding a California Economic Development Strategic Plan and to
review those recommendations made by the panel in its biennial
economic development strategic plan document, as specified. Existing
law requires the panel to address various specified matters of
concern, including the development of a system of accountability for
use in the annual state budget process and in the legislative process
to measure the performance of all state policies, programs, and tax
expenditures intended to stimulate the economy. Existing law also
requires the panel to submit a report of its findings and
recommendations to the Legislature no later than one year after its
first meeting after January 1, 2005.
This bill would, instead, require the California Economic Strategy
Panel to prepare and submit a preliminary version of the California
Economic Development Strategic Plan to the Governor and the
Legislature prior to January 1, 2011, and to prepare a final version
of the plan within 5 months of the conclusion of required hearings by
the Legislature on the preliminary version of the plan. The bill
would require the development of the plan to be funded from private
donations. The bill would require the Secretary of Labor and
Workforce Development to collaborate with the Secretaries of
Business, Transportation and Housing and Food and Agriculture in
leading the preparation of the California Economic Development
Strategic Plan and would require the panel to assess specified
matters in preparing the plan, to consult with other state entities,
and to review and include certain materials appropriate to completion
of the plan. The bill would require that particular components be
included in the plan and would delete a system of accountability for
use in the state budget process from required elements for the panel'
s consideration. The bill would require the panel to review the plan
5 years after its finalization and every 5 years thereafter and to
update the plan as the panel determines necessary. The bill would
modify the composition of the California Economic Strategy Panel by
adding the Secretary of Business, Transportation and Housing, the
Secretary of Food and Agriculture, the Director of the Office of
Small Business Advocate, and the Executive Director of the California
Council on Science and Technology, as members of the panel and
would, beginning October 1, 2011, require the panel to report
biennially to the Legislature on its activities.
(2) Existing law creates the California Economic Development Fund,
and provides for the deposit of government and private economic
development funds into it. Under existing law, these funds, upon
appropriation by the Legislature, may be expended by the Secretary of
Business, Transportation and Housing for economic development
purposes.
This bill would authorize the Secretary of Business,
Transportation and Housing to accept monetary gifts, which would be
deposited in the California Economic Development Fund, for the cost
of developing and updating economic and workforce development
studies, strategies, and policies. The bill would require the
secretary to record each gift and to file a copy of the record with
the Business, Transportation and Housing Agency.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. This act shall be known and may be cited as the
California Innovation, Technology, and Science Policy Act.
SEC. 2. The Legislature finds and declares all of the following:
(a) California is the eighth largest economy in the world, with a
gross state product of over one trillion seven billion dollars
($1,700,000,000,000). The state's significance in the global
marketplace results from a variety of factors, including the
following:
(1) Its strategic west coast location that provides direct access
to the growing markets and technology centers in Asia, Mexico, and
Latin America.
(2) Its diverse regional economies.
(3) Its large, young, and ethnically diverse population that
provides a ready workforce, a source of cultural intelligence for
pursuing international business, and a significant consumer base.
(4) Its access to a wide variety of venture and other private
capital.
(5) Its large number and broad base of small- and medium-sized
businesses.
(6) Its rich inventory of skilled participants in an innovation
economy, including not only technologists and scientists, but also
designers and entrepreneurs.
(7) Its history of pioneering innovation business models, with the
Hollywood entertainment industry, electronic commerce, venture
capital businesses, and the Lockheed skunk works representing some
well-known examples of this innovation.
(8) Its culture of innovation and entrepreneurship, particularly
in the area of high technology.
(b) In general, California is well-positioned to take advantage of
the new technologies and innovations. However, other states and
foreign countries are also vying for direct investment and for
leadership in current and emerging technology industries as well as
the sciences supporting and relating to those industries.
Connecticut, Massachusetts, Texas, New Mexico, New York, New Jersey,
Florida, and Pennsylvania all have proactive economic competitiveness
policies. Countries in Europe and Asia, such as Finland and
Singapore, are also successfully pursuing national innovation
strategies. Germany and Japan have already surpassed California's
once leading position in solar and wind energy through targeted
policies and initiatives.
(c) The bases for competition in an increasingly globalized
innovation economy are shifting. California can no longer compete
based on being the low-cost player. The increasing desirability of
countries, such as China, to companies seeking to outsource
manufacturing services and research and development is well known.
Dozens of countries around the world are pursuing national innovation
agendas at flank speed as the perception grows of a global value
chain with many different players and phases: scientific discovery,
research and development, business development, management and
logistics innovation, energy efficiency, increases in productivity,
and commercialization. These countries are working to carve out new
positions in this global value chain. Given this global context,
California must reexamine and reframe its role within the emerging
global innovation economy and develop skills of systems integration
and collaboration in a world in which competition is less about "I
win, you lose" dynamics and more about "co-opetition," with the value
chain spreading out around the world to serve regional and local
markets.
(d) California could lose its pivotal global role in the design
and manufacture of technologies by not implementing its own
proactive, aggressive, and comprehensive strategy for supporting
California's technology-based industries, including, but not limited
to, computers, commercial space, biotech, digital media, Web 2.0,
cleantech, energy generation, and nanotech.
(e) Supporting the state's technology economy will require the
state to increase its investment in the human and physical
infrastructure necessary to support this type of innovation. This
investment cannot simply fund "more of the same." Rather, the state
needs new kinds of fundable strategies that will lead it into new
streams of opportunities.
(f) California's innovation and technology policies should be
regularly updated to reflect emerging scientific developments,
business and financing trends, and the changing needs of California's
businesses and workers. It should seek to capitalize on best
practices in strategic and technology foresight and related time
dynamics that tie critical trends and actions together in order to
capture a sense of the emerging agendas and emerging large-scale
challenges that galvanize resources and the public's imagination.
(g) California's innovation and technology policies must pay
attention to the methods used by educational institutions to provide
critical advantages that leverage workforce training innovations in
this new global economy. The California institutes provide an example
of research innovation in this area. Other countries are now
innovating in their education enterprise, and a recent example of
this process is Finland's announcement of an "Innovation University."
(h) To be successful, the state's innovation and technology
policies must reflect a stewardship function that addresses
fundamental questions such as who will be responsible; what
authorities and resources will be provided to do the work; what
provisions will be made to assure sustainability of the effort; and
how will the state know that it is making the right decisions to
support future business competitive advantages?
SEC. 3. Section 13997.5 is added to the Government Code, to read:
13997.5. (a) The Secretary of Business, Transportation and
Housing may accept monetary gifts to pay for a part of, or the entire
cost of, developing and updating the California Economic Development
Strategic Plan pursuant to Section 15570. Any moneys received as a
gift pursuant to this section shall be deposited in the California
Economic Development Fund, established pursuant to Section 13997.6.
Records of donations received and expenditures made pursuant to this
section shall be subject to public disclosure.
(b) The secretary shall record each gift received pursuant to this
section, including all of the following information for each gift:
(1) The donor's name and the amount of the donation.
(2) A description of the manner in which the donation was
expended.
(c) The secretary shall, within 30 days of receipt of the
donation, provide a copy of the record to the Business,
Transportation and Housing Agency, and the agency shall maintain the
record with its statements of economic interests.
SEC. 4. Section 15570 of the Government Code is repealed.
15570. (a) The secretary shall lead the preparation of a biennial
California Economic Development Strategic Plan. In fulfilling this
duty, the secretary shall do the following:
(1) Review the recommendations made by the California Economic
Strategy Panel in their biennial economic development strategic plan
document. This document shall make recommendations regarding an
economic development strategic plan for the state, covering a
two-year time period and containing a statement of economic goals for
the state, a prioritized list identifying significant issues learned
from economic development strategic plan panel meetings, proposals
for legislation, regulations, and administrative reforms necessary to
improve the business climate and economy of the state, evaluation of
the effectiveness of the state's economic development programs, a
list of key industries in which the state shall focus its economic
development efforts, and strategies to foster job growth and economic
development covering all state agencies, offices, boards, and
commissions that have economic development responsibilities.
(2) Convene a biennial economic strategy panel to provide
recommendations regarding a California economic development strategic
plan. This panel shall conduct meetings in Sacramento, all cities of
the state with populations over 500,000, and in major cities of
other regions of California as designated by the secretary. The
secretary shall invite businesses, labor unions, organizations
representing the interests of diverse ethnic and gender groups, local
government leaders, academic economists and business professors,
chambers of commerce and other business organizations, government
agencies, and key industries to contribute to the preparation of the
recommended economic strategy. These meetings shall address at least
the following matters of concern:
(A) Strengths and weaknesses of the California economy and the
state's prospects for future economic prosperity.
(B) Emerging and declining industries in California and elsewhere.
(C) Effectiveness of California's economic development programs in
creating and retaining jobs and attracting industries.
(D) Adequacy of state and local physical and economic
infrastructure.
(E) Government impediments to economic development.
(F) The development of a system of accountability for use in the
annual state budget process and in the legislative process to measure
the performance of all state policies, programs, and tax
expenditures intended to stimulate the economy. In developing a
system of accountability, the panel shall, by using only existing
resources and without future budget augmentation made for this
purpose, do all of the following:
(i) Develop a standard definition of economic development.
(ii) Develop, for use in state law, standard measurements of real
per capita income, job growth, new business creation, private sector
investment, minority entrepreneurship, and income inequality.
(iii) Survey and evaluate efforts in other states to develop
accountability measures for public investments in economic
development.
(iv) Determine whether a return on investment calculation is
feasible for public investments in economic development.
(v) Conduct a comparative study of various methodologies for
preparing the economic development sections of a state budget,
including unified functional budget, zero-based budget, and
performance-based budget methodologies.
(vi) Study the feasibility of statutory disclosure requirements on
specified publicly funded subsidies to private sector businesses.
(vii) Submit a report of its findings and recommendations
regarding this subparagraph to the Legislature no later than one year
after its first meeting after January 1, 2005.
(b) The panel shall be composed of the following 15 members:
(1) The Secretary of Labor and Workforce Development, who shall
serve as chair of the panel.
(2) Eight persons appointed by the Governor.
(3) The Speaker of the Assembly or his or her designee.
(4) The President pro Tempore of the Senate or his or her
designee.
(5) The Minority Leader of the Assembly or his or her designee.
(6) The Minority Leader of the Senate or his or her designee.
(7) One person appointed by the Speaker of the Assembly.
(8) One person appointed by the Senate Committee on Rules.
(c) The panel shall be representative of state government,
business, labor, finance, and academic institutions, and shall be
broadly reflective of the state's population as to gender, ethnicity,
and geographic residence within California.
At least one-half of all the persons on the panel shall be from
the private sector and at least two appointments shall be from
private businesses with less than 50 employees. At least two
appointments shall be from rural areas of the state. Beginning
January 1, 2004, appointments to the panel shall be for four-year
terms, except that the Governor's appointments made pursuant to
paragraph (2) of subdivision (b) shall be made as follows:
(1) Four members shall be appointed on January 1, 2004, and every
four years thereafter.
(2) Four members shall be appointed on January 1, 2004, for a
two-year term.
(3) Upon the expiration of the initial appointments made pursuant
to paragraph (2), four members shall be appointed on January 1, 2006,
and every four years thereafter.
(d) The secretary shall deliver copies of the economic strategy
panel's recommended California economic development strategic plan to
every constitutional officer, legislator, member of the Governor's
cabinet, members of the economic development strategic plan panel,
and every state agency, office, board, and commission having economic
development responsibilities.
(e) In each succeeding two-year cycle, the secretary shall
undertake this process anew, so as to update the economic strategy on
or before October 31 of each succeeding second year.
SEC. 5. Section 15570 is added to the Government Code, to read:
15570. (a) The California Economic Strategy Panel within the
office of the Secretary of Labor and Workforce Development shall
research, facilitate outreach, and make policy and fiscal
recommendations to the Governor and the Legislature on issues related
to economic and workforce development.
(b) (1) The panel shall be composed of the following 19 members:
(A) The Secretary of Labor and Workforce Development, who shall
serve as the chairperson of the panel.
(B) The Secretary of Business, Transportation and Housing.
(C) The Secretary of Food and Agriculture.
(D) Eight persons appointed by the Governor, at least one of whom
shall have a background in economic development.
(E) The Speaker of the Assembly or his or her designee.
(F) The President pro Tempore of the Senate or his or her
designee.
(G) The Minority Leader of the Assembly or his or her designee.
(H) The Minority Leader of the Senate or his or her designee.
(I) One person appointed by the Speaker of the Assembly.
(J) One person appointed by the Senate Committee on Rules.
(K) The Director of the Office of Small Business Advocate.
(L) The Executive Director of the California Council on Science
and Technology.
(2) Members of the panel shall be representatives of state
government, business, economic developers, labor, finance, and
academic institutions, and shall be broadly reflective of the state's
population as to gender, ethnicity, and geographic residence within
California.
(3) At least one-half of all the persons on the panel shall be
from the private sector, and at least two appointments shall be from
private businesses with less than 50 employees. At least two
appointments shall be from rural areas of the state.
(4) Beginning January 1, 2010, appointments to the panel shall be
for four-year terms, except that the Governor's appointments made
pursuant to subparagraph (D) of paragraph (1) shall be made as
follows:
(A) Four members shall be appointed on January 1, 2010, and every
four years thereafter.
(B) Four members shall be appointed on January 1, 2010, for a
two-year term.
(C) Upon the expiration of the initial appointments made pursuant
to subparagraph (B), four members shall be appointed on January 1,
2012, and every four years thereafter.
(D) All members of the panel as of January 1, 2016, shall continue
to serve as members of the panel for the remaining duration of their
terms.
(c) In fulfilling the duties described in subdivision (a), the
secretary shall, working in collaboration with the Secretary of
Business, Transportation and Housing and the Secretary of Food and
Agriculture, satisfy all of the requirements of this section.
(d) Among other activities, the panel shall prepare the California
Economic Development Strategic Plan. The secretary, working in
collaboration with the Secretary of Business, Transportation and
Housing, and the Secretary of Food and Agriculture, shall lead the
preparation of the plan. The secretaries shall invite businesses,
labor unions, organizations representing the interests of diverse
ethnic and gender groups, local government leaders, academic
economists and business professors, national laboratories, the
University of California, the California State University, private
research universities, the California Community Colleges, chambers of
commerce, business organizations in biotech, nanotech, multimedia,
information technology, and similar fields, government agencies, and
key industries to provide advice on economic development issues and
to contribute to the preparation of the recommended economic
strategy.
(e) As part of its deliberations in preparing the California
Economic Development Strategic Plan, the panel shall, at a minimum,
include an assessment of the following factors:
(1) Strengths and weaknesses of the California economy within a
regional, national, and global context and the state's prospects for
future economic prosperity, identifying industries and businesses in
the state's nine regional economies that are significant in 2010, and
those that are likely to be significant in 2020.
(2) Current and emerging trends, industries, and services and
areas of the state, including electronic and surface or air
transportation logistical capabilities, with a comparative advantage
to other states and foreign countries. The assessment shall include a
discussion of the state of innovation in foreign countries and the
potential impact of the growing innovative capacity of foreign
countries on the state's ability to compete in the global economy,
including advantages that businesses, research institutions, and
financial sectors in the state could obtain by networking with
foreign countries in a smart and productive manner.
(3) Effectiveness of California's economic and workforce
development programs in creating and retaining jobs, improving
productivity, increasing innovation, providing 21st century workforce
skills, and attracting industries providing employment within the
state's core and emerging industry clusters. The assessment shall
also include the ways in which public resources, such as angel
capital networks, may be more effectively leveraged to attract
additional private investment within the state's communities and
small businesses.
(4) Adequacy of state and local physical, electronic, and human
infrastructure, including digitally related skills, to meet the state'
s current and future needs. The analysis shall also include a
discussion of the appropriate role for state government to improve
inadequacies identified in the state's physical and human
infrastructure.
(5) Government impediments to economic development.
(6) The role of innovation in keeping the state's regional vibrant
economies, including models and strategies that encourage
partnerships among public, academic, and private entities, located in
this state or other states, that support the state's core and
emerging industries.
(7) The unique opportunities and challenges in developing
businesses and attracting investment along the state's border areas
and in emerging domestic markets.
(8) A review of significant literature by the federal government,
state governments, foreign countries, and international associations
concerning competitive advantages.
(f) As part of its deliberations in preparing the California
Economic Development Strategic Plan, as well as other projects and
activities of the panel, the panel shall, at a minimum, consult with
other state entities, including, but not limited to, the Office of
Military and Aerospace Support, the California Commission on
Industrial Innovation, the California Transportation Commission, the
California Workforce Investment Board, the Employment Training Panel,
the California Small Business Board, the Small Business Council on
Procurement, the office of the Treasurer, the California Organized
Investment Network, the Department of Insurance, the California
Infrastructure and Economic Development Bank, and the State Energy
Resources Conservation and Development Commission.
(g) As part of its deliberations in preparing the California
Economic Development Strategic Plan, as well as other projects and
activities of the panel, the panel shall, at a minimum, review and
include, as appropriate, any of the following materials:
(1) The most recent version of the State Transportation Plan,
including those portions related to trade infrastructure and goods
movement.
(2) The significant findings and recommendations of the current
international trade and foreign investment strategies of the state
and of local governments.
(3) The findings and recommendations of the Environmental Goals
and Policy Report, of energy generation and generation-related
reports, and of global warming studies related to the state.
(4) The findings and recommendations of the five-year
infrastructure plan prepared pursuant to Article 2 (commencing with
Section 13100) of Chapter 2 of Part 3.
(5) The findings and recommendations of other key stakeholder
organizations related to workforce and economic development.
(h) Based on the assessment by the panel pursuant to subdivision
(e), the California Economic Development Strategic Plan shall
include, at a minimum, the following components:
(1) Policy goals, objectives, and recommendations required to
implement a comprehensive economic and workforce development
strategic plan for the state, identifying the priority for each
within the overall strategy.
(2) Measurable outcomes and timelines for implementing the goals,
objectives, and recommendations for the strategic plan showing the
way in which key policy development and implementation efforts are
coordinated with emerging issues.
(3) Identification of impediments to achieving the goals,
objectives, and recommendations described in paragraph (1) and the
way in which they will delay the state's ability to improve its
competitive position.
(4) Identification of key stakeholder partnerships to use in
implementing the California Economic Development Strategic Plan.
(5) Identification of options for funding the goals, objectives,
and recommendations described in paragraph (1).
(6) Identification of an organizational structure, including
global logistical and Internet-based networks, for the implementation
of the policies, programs, and services recommended in the
California Economic Development Strategic Plan, including a
communication plan for key constituencies that details the way in
which the plan interfaces with private, academic, and private
nonprofit corporations.
(i) (1) The panel shall prepare a preliminary California Economic
Development Strategic Plan and submit it to the Governor, the Chief
Clerk of the Assembly, and the Secretary of the Senate prior to
January 1, 2011. The Chief Clerk of the Assembly and the Secretary of
the Senate shall distribute the preliminary strategic plan to the
relevant policy and fiscal committees of the Legislature.
(2) Development of the plan pursuant to this subdivision shall be
funded from private donations.
(j) The relevant policy and fiscal committees of each house of the
Legislature shall review the preliminary strategic plan, holding
hearings within 90 days of the date it is submitted to the
Legislature. If the preliminary strategic plan is submitted to the
committees when the Legislature is in recess, the hearings shall
occur within 90 days of the date that the Members convene. The
committees may make recommendations to the panel on the preliminary
strategic plan, and the panel may modify the preliminary strategic
plan in accordance with those recommendations.
(k) Within five months of the final hearing held by the
Legislature on the preliminary strategic plan, the panel shall
prepare the final version of the California Economic Development
Strategic Plan. The panel, the Secretary of Labor and Workforce
Development, the Secretary of Business, Transportation and Housing,
and the Secretary of Food and Agriculture shall post the preliminary
and the final California Economic Development Strategic Plan on their
Internet Web sites.
(l) The panel shall review the California Economic Development
Strategic Plan within five years of the date it was prepared, and
every five years thereafter, and update the plan as the panel deems
appropriate. Nothing in this subdivision prohibits the panel from
reviewing or updating the plan more frequently.
(m) Beginning October 1, 2011, and biennially thereafter, the
panel shall report to the Chief Clerk of the Assembly and the
Secretary of the Senate on its activities during the preceding 24
months. The Chief Clerk of the Assembly and the Secretary of the
Senate shall transmit the report to the relevant fiscal and policy
committees of the Legislature.