BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 29
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          Date of Hearing:   May 18, 2011

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Felipe Fuentes, Chair

              AB 29 (John A. Perez) - As Introduced:  December 6, 2010 

          Policy Committee:                              Jobs Vote:6-0

          Urgency:     No                   State Mandated Local Program: 
          No     Reimbursable:              

           SUMMARY  

          This bill codifies the Governor's Office of Economic Development 
          (GOED) and establishes its powers and duties. Specifically, this 
          bill: 

          1)Codifies the Governor's Office of Economic Development (GOED) 
            with a director appointed by the governor and subject to 
            confirmation by the Senate.

          2)Transfers the existing Office of the Small Business Advocate 
            (OSBA) to GOED.

          3)Creates the California Business Investment Services Program 
            (CalBIS) within the office and states that CalBIS role is to 
            service employers, corporate executives, business owners and 
            site location consultants considering California as a site for 
            investment and expansion.

          4)Specifies the economic develop duties for GOED, including 
            making recommendations to the Governor and Legislature on new 
            and existing state policies, programs and actions for the 
            purpose of advancing statewide economic goals.

          5)Provides that funding for GOED in the 2011-12 fiscal year 
            shall be from existing resources and staffed by personnel 
            loaned from other state agencies and departments


           FISCAL EFFECT  

          1)Ongoing costs in the range of $500,000 per year to maintain 
            and update the website, to advertise the required phone 








                                                                  AB 29
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            number, and to provide staff to answer the dedicated telephone 
            line and assist callers.

          2)General Fund costs in the range of $400,000 for the Economic 
            Development Council to produce the required strategic plan.

          3)General Fund costs in excess of $200,000 for the director and 
            support staff.

          4)Despite the intent of the bill to redirect existing resources, 
            presumably such a redirection results in reduced production 
            from the redirected entities.



           COMMENTS  

           1)Purpose.   In February 2010, the Little Hoover Commission 
            released a report entitled  Making up for Lost Ground: Creating 
            a Governor's Office of Economic Development  .  The report 
            analyzed the status and effectiveness of the various pieces of 
            the defunct Technology, Trade and Commerce Agency that had 
            been reorganized into other entities.  The report recommended 
            the creation of a new governmental entity that would promote 
            greater economic development, foster job creation, and deliver 
            specific services (i.e. permitting, tax, regulatory, and other 
            information) directly to the California business community.  

            According to the author, AB 29 creates the Office of Economic 
            Development within the Governor's Office, and establishes 
            specific tasks and duties for the office, including 
            reorganizing such entities as the Small Business Advocate and 
            CalBIS into this new office.  Ultimately, this new office will 
            establish long-term economic goals and strategies as well as 
            specific and effective services to California's businesses 
            both large and small."

           2)Executive Order S-05-10  , issued on April 8, 2010, creates the 
            Governor's Office of Economic Development or GOED.  The 
            governor stated that its purpose is to promote California as a 
            place to do business, to support those interested in starting, 
            growing, financing, expanding or relocating a business in 
            California, and to help, to the extent possible, those 
            businesses facing challenges to operating in California. 









                                                                  AB 29
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           3)The Little Hoover Commission and renewed legislative 
            responses  :  While the commission heard substantial criticism 
            about the state's business climate, this report focused on how 
            the state could better organize and utilize its existing 
            business focused and broader economic and workforce 
            development programs and services.  The report noted that the 
            state's current economic development activities are spread out 
            over numerous agencies, boards, commissions and financing 
            authorities.  

           4)Related legislation.   AB 1233 (V. Manuel Pérez), authorizes 
            the creation of a joint economic and workforce development 
            strategic plan as well as making other updates to its content. 
             AB 1233 is a two-year bill. 

           5)Previous legislation.   AB 2734 (John Pérez) of 2010 was 
            similar to this bill.  AB 2734 was vetoed by Governor 
            Schwarzenegger, with the message that the director of GOED was 
            subject to Senate confirmation, which inappropriately 
            infringed on the rights and powers of the Governor.  
           
          6)There is no registered opposition to this bill. 



           Analysis Prepared by  :    Roger Dunstan / APPR. / (916) 319-2081