BILL ANALYSIS Ó AB 29 Page 1 CONCURRENCE IN SENATE AMENDMENTS AB 29 (John A. Pérez) As Amended September 2, 2011 Majority vote ----------------------------------------------------------------- |ASSEMBLY: |76-2 |(May 31, 2011) |SENATE: |31-3 |(September 7, | | | | | | |2011) | ----------------------------------------------------------------- Original Committee Reference: J., E.D. & E. SUMMARY : Establishes the Governor's Office of Business Development (GO-Biz) for the purpose of serving as the lead state entity for economic strategy and marketing of California on issues relating to business development, private sector investment and economic growth. Among other things, this bill reorganizes the Office of the Small Business Advocate (OSBA) and codifies the Office of Business Assistance within the new GO-Biz. The Senate amendments : 1)Change the name of the Office of Economic Development to GO-Biz. 2)Authorize rather than mandate the duties of GO-Biz. 3)Delete the requirement that the Director of Go-Biz be confirmed by the Senate. 4)Remove 2011-12 funding provisions. 5)Remove language related the California Economic Strategy Panel, which was eliminated through 2011-12 Budget actions. AS PASSED BY THE ASSEMBLY , this bill established the Office of Economic Development (OED) within the Office of the Governor. The Director of OED was required to be confirmed by the Senate. Funding for the OED in the 2011-12 fiscal year was directed to come from existing resources and staffed by personnel loaned from other state agencies and departments. The bill required each member of the Cabinet to identify a senior manager within his or her agency who would be responsible for coordinating business support activities with OED. Funding in subsequent AB 29 Page 2 years would be provided through the regular budgeting process, including the permanent transfer of associated positions. FISCAL EFFECT : According to the Senate Appropriations Committee, implementation of this bill creates ongoing costs of $2.3 million with a mix of General and Special Funds. COMMENTS : In February 2010, the Little Hoover Commission (LHC) undertook a review of the state's economic and workforce development programs. In its final report, Making up for Lost Ground: Creating a Governor's Office of Economic Development, it analyzed the status and effectiveness of current programs since the 2003 demise the Technology, Trade and Commerce Agency and recommended the creation of a new governmental entity to fill the void left by the dismantled agency. The report called for a single agency 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. In April 2010, Governor Schwarzenegger issued Executive Order S-05-10 (EO) as a means to operationalize the report recommendations including the creation of the Governor's Office of Economic Development (GOED). This bill substantially codifies and provides enhanced guidance to the framework detailed in EO S-05-10 by statutorily forming GO-Biz and assigning specific tasks and duties. Previous legislation: This bill is a re-introduction of AB 2734 (John A. Pérez) of 2010, which was vetoed by the Governor, based, according to his veto message, on the provision that the Director was subject to Senate confirmation, which he stated would "inappropriately infringe" upon the rights and powers of the Governor. Senate amendments remove this requirement from this bill. Governor's Office of Economic Development: GOED was created in April 2010 through Executive Order (S-05-10). Since its inception, GOED has served over 3,000 businesses, 95% of which are small. The most frequent types of assistance include help with permit streamlining, starting a businesses, relocation and expansion of businesses, and regulatory challenges. Under the auspices of GOED, a number of state programs and services are administered, including programs related to AB 29 Page 3 international trade, permit assistance, the California Business Investment Services Program (CalBIS), the OSBA, and innovation. There are 23 positions assigned to GOED, which is funded through existing state resources and staffed by personnel loaned from state agencies and departments. This bill states that this shall remain the funding and staffing structure for GOED during fiscal year 2011-12 and thereafter be subject to the regular state budget process. Among other programs, GOED administers the Innovation Hub (iHUB) program in partnership with the statewide network of Small Business Development Centers. There are currently 12 regional iHUBs located throughout the state. The iHUB program is designed to improve the state's national and global competitiveness by stimulating partnerships, economic development, and job creation around specific research clusters. Key assets and partners of the initiative include technology incubators, research parks, universities, federal laboratories, economic development organizations, business groups, and venture capitalists. Another key initiative of GOED are the "strike teams" which can be mobilized to help attract and/or retain specific businesses. Strike teams are especially well suited to engage with major employers and have been successfully activated to assist Bayer Healthcare, Jazz Semiconductor, and Baxter Pharmaceutical locate and/or expand in California. GOED is also sponsoring a permit streamlining pilot project, which will offer a One-Stop-Shop for state and local permits. The pilot, launched in partnership with the City and County of San Francisco, will allow a business owner to login to a single Web site (24x7) and apply for and pay all necessary city, county and state permits. AB 29 (John A. Pérez) substantially implements the current activities of GOED as outlined in the 2010 EO. Analysis Prepared by : Toni Symonds / J., E.D. & E. / (916) 319-2090 FN: 0002781 AB 29 Page 4