BILL ANALYSIS Ó AB 53 Page 1 ASSEMBLY THIRD READING AB 53 (John A. Pérez) As Amended May 24, 2013 Majority vote ECONOMIC DEVELOPMENT 6-3 APPROPRIATIONS 12-5 ----------------------------------------------------------------- |Ayes:|Medina, Daly, Fong, Fox, |Ayes:|Gatto, Bocanegra, | | |V. Manuel Pérez, Weber | |Bradford, | | | | |Ian Calderon, Campos, | | | | |Eggman, Gomez, Hall, | | | | |Ammiano, Pan, Quirk, | | | | |Weber | | | | | | |-----+--------------------------+-----+--------------------------| |Nays:|Mansoor, Linder, Melendez |Nays:|Harkey, Bigelow, | | | | |Donnelly, Linder, Wagner | ----------------------------------------------------------------- SUMMARY : Requires the Governor's Office of Business and Economic Development (GO-Biz) to lead the preparation of the California Economic Development Strategic Plan (ED Strategy), as specified. In addition, the bill requires a copy of the Worker Adjustment and Retraining Notification Act (WARN) notice be provided to GO-Biz and that it be posted on the Employment Development Department (EDD) Web site. EXISTING LAW : 1)Establishes GO-BIZ within the Governor's Office 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. 2)Requires a copy of the federal WARN notice be provided by a covered employer to specified state and local government entities 60 days prior to initiating a mass layoff, termination, or relocation. a) Covered employers include those that have employed more than 75 individuals during the prior 12-months. AB 53 Page 2 b) State and local government entities include the EDD, the local workforce investment board (WIB) and the chief elected official of each city and county government within which the termination, relocation or mass layoff occurs. c) A mass layoff is defined as any 30-day period in which 50 or more employees at a covered establishment are separated from the business for a lack of funds or a lack of work. d) Relocation is defined as the removal of all or substantially all of the industrial or commercial operations in a covered establishment to a different location 100 miles or more away. e) Termination is defined as the cessation or substantial cessation of industrial or commercial operations in a covered establishment. FISCAL EFFECT : According to the Assembly Appropriations Committee, implementation of this measure will result in significant costs to GO-Biz in the hundreds of thousands of dollars for the development of a statewide economic strategic plan. COMMENTS : This measure proposes the development of a strategy to guide the state's economic development activities. Just like a business strategy, a state strategy provides the big picture that shows how all the individual activities are coordinated to achieve a desired end result. As the ninth largest economy in the world, California's lack of a strategic plan impedes the state's ability to communicate clear priorities on key issues such as infrastructure development, workforce preparation, and support for emerging and dominant industry sectors with the state's nine regional economies. The policy committee analysis includes additional information on the advantages of a strategy, the interrelationships between state planning and funding, and the role of GO-Biz. What a strategy could accomplish: There are eight key drivers of the California economy: capital, infrastructure, labor, business, education, consumers, nonprofits, and government actions. Each of these drivers has its own unique AB 53 Page 3 characteristics, as well as qualities that they share in common. In addition, each of the drivers is inextricably linked within the overall economy. A weakness within any one of the drivers affects the others. As an example, California's aging infrastructure limits the state's ability to move products from farm to factories and on to foreign and domestic markets. These delays in moving goods and the higher costs of transportation impacts businesses all along the supply chain resulting in less job growth, lower discretionary income, and ultimately less tax revenues. While the impacts of poor quality infrastructure are known, addressing this challenge requires a coordinated and comprehensive approach by both public and private stakeholders. The ED Strategy would serve as a single document for identifying important economic issues, engaging appropriate stakeholders in the development of solutions, and the prioritizing of key state actions. Up until August 2011, existing law required the state to have a two-year state Economic Development Strategic Plan, substantially similar to the ED Strategy proposed in this bill. This bill re-establishes the mandate for a comprehensive strategy to guide state actions related to job creation, business development and attraction of private sector investment. Analysis Prepared by : Toni Symonds / J., E.D. & E. / (916) 319-2090 FN: 0000949