BILL ANALYSIS                                                                                                                                                                                                    Ó




                   Senate Appropriations Committee Fiscal Summary
                            Senator Kevin de León, Chair


          AB 53 (Perez) - Governor's Office of Business and Economic  
          Development: Biennial California Economic Development Strategic  
          Plan
          
          Amended: July 3, 2013           Policy Vote: BP&ED 8-1
          Urgency: No                     Mandate: No
          Hearing Date: August 12, 2013                           
          Consultant: Robert Ingenito     
          
          This bill meets the criteria for referral to the Suspense File.


          Bill Summary: AB 53 would require the Governor's Office of  
          Business and Economic Development (GO-Biz) to lead the  
          preparation of a biennial California Economic Development  
          Strategic Plan, as specified. Additionally, the Employment  
          Development Department (EDD) would be required to post a copy of  
          any notice provided by an employer of a mass layoff, relocation  
          or termination.  

          Fiscal Impact: GO-Biz estimates that it would incur a cost of  
          $500,000 (General Fund) to implement the provisions of the bill.  
          EDD would incur minor and absorbable costs.

          Background: In April 2010, the Governor's Office of Economic  
          Development was established to provide a One-Stop-Shop for  
          serving the needs of businesses and economic developers.  While  
          initially established through Executive Order S-01-10, the  
          office was later codified and renamed as the Governor's Office  
          of Business and Economic Development (GO-Biz), in AB 29, Chapter  
          475, Statues of 2010.  In 2012, GO-Biz directly assisted 5,308  
          companies, resulting in the creation and/or retention of 9,050  
          jobs and $1.45 billion in investments.   

          Among other programs, GO-Biz provides permit and other technical  
          assistance for new and expanding businesses, as well as  
          administering the California Innovation Hub Program in  
          partnership with the statewide network of 12 regional economic  
          development partnerships.  The Office of the Small Business  
          Advocate is located at GO-Biz and the state's international  
          trade and foreign investment activities are coordinated through  
          GO-Biz.








          AB 53 (Perez)
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          In 2012, a comprehensive reorganization of the state's  
          administrative structure was undertaken.  Key changes included  
          the dismantling of the Business, Transportation and Housing  
          Agency (BTH) and further consolidating of GO-Biz' position as  
          the state's lead in economic development.  Effective July 1,  
          2013, GO-Biz will have administrative authority for more  
          economic development related programs and services including the  
          Small Business Loan Guarantee Program and the Infrastructure and  
          Economic Development Bank.

          Proposed Law: This bill would require GO-Biz to commission a  
          study as part of the California Economic Development Strategic  
          Plan. The study shall include, but not be limited to, all of the  
          following:
          
                 Recommendations regarding an economic development  
               strategic plan for the state, covering a two-year period  
               for the first report and a three-year time period for  
               subsequent reports and containing a statement of economic  
               goals for the state.

                 Governmental and nongovernmental impediments to economic  
               development and a list of legislative, regulatory, and  
               administrative reforms necessary to ease those impediments  
               and improvements to the business climate and economy of the  
               state.

                 An 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.

                 An evaluation of policies and goals developed at the  
               regional level.

                 Strengths and weaknesses of the California economy and  
               the state's prospects for future economic prosperity.

                 Existing, emerging, and declining industries in  








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               California and elsewhere.

                 Effectiveness of California's economic development  
               programs in creating and retaining jobs and attracting  
               industries.

                 Adequacy of state and local physical and economic  
               infrastructure.

                 Opportunities to leverage federal resources for state  
               priorities.

                 Tactics for attracting private capital to the state and  
               investment in state priority areas.
          
          Additionally, the bill would do all of the following:

                 Provide that upon completion of the study, GO-Biz shall  
               convene a stakeholder advisory group consisting of  
               representatives from 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, economic development  
               organizations, government agencies and key industries to  
               assist with evaluating and preparing the California  
               Economic Development Strategy.

                 Require GO-Biz to submit a report of its findings and  
               recommendations to the Governor and Legislature no later  
               than October 1, 2016 and every three years thereafter.  

                 Add GO-Biz to the list of entities that an employer must  
               provide notice of any mass layoff, relocation, or  
               termination.
          
          
          Related Legislation: AB 1233 (V. Manuel Pérez) of 2012, would  
          have required the Director of GO-Biz to prepare a five-year  
          economic and workforce development strategy.  This bill was held  
          in the Assembly Appropriations Committee.

          AB 699 (Portantino and V. Manuel Pérez) of 2009, would have  
          updated the requirements for the development of a State Economic  








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          Development Strategy.  This bill was held in Assembly  
          Appropriations Committee.

          Staff Comments: Typically, a comprehensive economic development  
          strategy and coordinating strategic plan allows for the  
          identification of important issues and engaging appropriate  
          stakeholders for the purpose of prioritizing key state actions.   
          The last plan was prepared in 2002. Previously, current law  
          established the Economic Strategy Panel (ESP) which was tasked  
          with preparing a California Economic Development Strategic Plan.  
           The ESP was supported by the EDD and Department of Industrial  
          Relations. As part of a larger Administration proposal to reduce  
          state government and achieve savings, the ESP was eliminated in  
          the 2011-12 Budget (AB 119, Committee on Budget, Chapter 31,  
          Statutes of 2011).  This bill tasks GO-Biz with similar  
          requirements of the former ESP.

          GO-Biz estimates costs to be $500,000, to contract out for the  
          study. Go-Biz would use existing resources for convening the  
          advisory group, compiling the report's information, and  
          disseminating to the various recipients.