BILL ANALYSIS Ó
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THIRD READING
Bill No: AB 53
Author: John A. Pérez (D), et al.
Amended: 9/3/13 in Senate
Vote: 21
SENATE BUSINESS, PROF. & ECON. DEVELOP. COMM. : 8-1, 7/1/13
AYES: Lieu, Block, Corbett, Galgiani, Hernandez, Hill, Padilla,
Yee
NOES: Wyland
NO VOTE RECORDED: Emmerson
SENATE APPROPRIATIONS COMMITTEE : 5-2, 8/30/13
AYES: De León, Hill, Lara, Padilla, Steinberg
NOES: Walters, Gaines
ASSEMBLY FLOOR : 55-21, 5/30/13 - See last page for vote
SUBJECT : Governors Office of Business and Economic
Development:
biennial California Economic Development Strategic
Plan
SOURCE : Author
DIGEST : This bill requires the Governors Office of Business
and Economic Development (GO-Biz) to lead the preparation of a
California Economic Development Strategic Plan. Also requires
the Economic Development Department (EDD) to post, on its
Internet Web site, a notice provided by an employer of a mass
layoff, relocation, or termination.
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ANALYSIS :
Existing law:
1.Establishes 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. GO-Biz also serves as the
administrative oversight for the California Business
Investment Service and the Office of the Small Business
Advocate.
2.Provides that an employer may not order a mass layoff,
relocation, or termination at a covered establishment unless,
60 days before the order takes effect, the employer gives
written notice of the order to the employees of the covered
establishment affected by the order, the Employment
Development Department (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.
3.Provides that an employer required to give notice of any mass
layoff, relocation, or termination under this chapter shall
include in its notice the elements required by the federal
Worker Adjustment and Retraining Notification (WARN) Act.
4.States that notwithstanding the above requirements, an
employer is not required to provide notice if a mass layoff,
relocation, or termination is necessitated by a physical
calamity or act of war.
This bill:
1.Requires GO-Biz to lead the preparation of a California
Economic Development Strategic Plan (Plan). Provides that in
fulfilling this duty, GO-Biz shall commission a study that
includes, but is not limited to:
A. Recommendations regarding an economic development
strategic plan for the state, covering a two-year period
for the first report and then a three-year time period for
subsequent reports and containing a statement of economic
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goals for the state.
B. 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.
C. An evaluation of the effectiveness of the state's
economic development programs.
D. A list of key industries in which the state shall focus
its economic development efforts as well as providing
strategies to foster job growth and economic development,
covering all state agencies, offices, boards, and
commissions that have economic development
responsibilities.
E. An evaluation of proposals, policies, and goals
developed at the regional level.
F. Strengths and weaknesses of California's economy and the
state's prospects for future economic prosperity.
G. Existing, emerging and declining industries in
California and elsewhere.
H. Effectiveness of California's economic development
programs in creating and retaining jobs and attracting
industries.
I. Adequacy of state and local physical and economic
infrastructure.
J. Governmental and nongovernmental impediments to economic
development.
AA. Opportunities to leverage federal resources for state
priorities.
BB. Tactics for attracting private capital to the state and
investment in state priority areas.
1.Provides that upon completion of the study, GO-Biz shall
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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, economic
development groups focusing on regional economics, government
agencies and key industries to assist with evaluating and
preparing the California Economic Development Strategic Plan.
2.Requires 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. Requires
GO-Biz to electronically deliver copies of the Plan to every
constitutional officer, legislator, member of the Governor's
cabinet, and every state agency, office, board and commission
having economic development responsibilities.
3.Specifies that the Plan may be funded in whole or in part by
nonstate funds, as follows:
A. Allows GO-Biz to accept nonstate moneys, including, but
not limited to, federal and private sector funds, for the
purposes of developing the Plan; specifies that a donor
donate not more than 25% of the Plan's funding; and
requires private sector moneys to be deposited in the
California Economic Development Fund (Fund).
B. Requires GO-Biz to post, for each donation received to
fund the Plan, a report on its Internet Web site within 30
days of receiving that donation. Requires the report to
contain the name and address of the donor, donation amount,
and the date the donation was made.
1.Specifies that notwithstanding Government Code Section 13340,
moneys in the Fund may be expended by GO-Biz, without regard
to fiscal year, to provide matching funds, as specified, and
for other economic development purposes.
2.Adds GO-Biz to the list of entities that an employer must
provide notice to of any mass layoff, relocation, or
termination.
3.Requires EDD to post, on its Internet Web site, a notice
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provided by an employer of a mass layoff, relocation, or
termination.
Background
Economic development strategy . 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. Until very
recently, existing 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 under the Labor and
Workforce Development Agency (LWDA) budget. 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,
Assembly Budget Committee, Chapter 31, Statutes of 2011). This
bill tasks GO-Biz with similar requirements of the former ESP.
GO-Biz . In February 2010, the Little Hoover Commission
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 of 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 entity that would promote greater
economic development, foster job creation, serve as a policy
advisor 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 as a means to operationalize the
report recommendations including the creation of the Governor's
Office of Economic Development (GOED).
In October 2011, AB 29 (John A. Perez, Chapter 475) which
effectively codified GOED and changed its name to GO-Biz,
effective January 1, 2012. Since its inception, the office 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
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businesses, and regulatory challenges.
In March 2012, the Governor initiated a reorganization process
to realign the state's administrative structure. Key changes
include dismantling of the Business, Transportation and Housing
Agency (BTH) and the shifting of a number of key programs and
services to GO-Biz including the Small Business Loan Guarantee
Program, the California Travel and Tourism Commission, the
California Film Commission, the Film California First Program
and the Infrastructure and Economic Development Bank (I-Bank).
In addition, the Governor called for the placement of the
California SBDC Program within GO-Biz.
Comments
The author's office notes that the Plan will provide an economic
development roadmap to guide public policy decisions and actions
to foster and promote California's economic growth and
competitiveness. According to the author's office, recognizing
the need to better assist businesses in California and to
attract new and emerging companies to California, the strategic
plan requirement in this bill seeks to develop recommended
actions that will assist in this effort and it will draw input
from labor unions, local government leaders, academics, Chambers
of Commerce, and other business organizations and government
agencies.
The author's office states that as part of the GO-Biz mission,
it has the ability to convene strike forces or teams to address
key business development situations, including, but not limited
to, attracting new businesses, the relocation of large
manufacturers, or the closure of a large business employer. The
author's office that as a result of this bill, GO-Biz will be
provided mandatory reporting status, pursuant to the WARN Act,
so that it can effectively respond to companies that may be
contemplating relocating, closing, or significantly scaling back
on their business operations within California.
FISCAL EFFECT : Appropriation: Yes Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee, GO-Biz
estimates that it will incur a cost of $500,000 (General Fund)
to implement the provisions of this bill. EDD will incur minor
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and absorbable costs. To the extent that (1) existing studies
could be used to satisfy the bill's reporting requirements, and
(2) non-General Fund funding sources are identified, costs could
be lower.
SUPPORT : (Verified 9/3/13)
California Forward Action Fund
California Retailers Association
ARGUMENTS IN SUPPORT : The California Forward Action Fund
(CFAF) states that the group is passionate about the economic
development of our state and believes that a strategy has the
potential to ensure the state's continued competitiveness and
will contribute to the prosperity of all Californians. CFAF
also notes that California needs an economic development
strategy that works for everyone and this bill will provide the
blueprint for continued economic vitality.
According to the California Retailers Association (CRA), in
today's fast paced global economy, an economic development
strategy is critically important to guide state and local public
policy decisions and actions that strengthen not only
California's economic growth but also our competitiveness
against other states who continuously seek to raid California's
businesses, future investment and jobs. CRA notes that approval
of this bill will not only allow for a comprehensive strategic
strategy to modernize our economic development efforts, but it
will also help to ensure that our state remains a leader in the
global economy.
ASSEMBLY FLOOR : 55-21, 5/30/13
AYES: Achadjian, Alejo, Ammiano, Atkins, Bloom, Blumenfield,
Bocanegra, Bonilla, Bonta, Bradford, Brown, Buchanan, Ian
Calderon, Campos, Chau, Chesbro, Cooley, Daly, Dickinson,
Eggman, Fong, Fox, Frazier, Garcia, Gatto, Gomez, Gonzalez,
Gordon, Gray, Hall, Roger Hernández, Jones-Sawyer, Levine,
Lowenthal, Medina, Mitchell, Mullin, Muratsuchi, Nazarian,
Pan, Perea, V. Manuel Pérez, Quirk, Quirk-Silva, Rendon,
Salas, Skinner, Stone, Ting, Waldron, Weber, Wieckowski,
Williams, Yamada, John A. Pérez
NOES: Allen, Bigelow, Chávez, Conway, Dahle, Donnelly, Beth
Gaines, Grove, Hagman, Harkey, Jones, Linder, Logue,
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Maienschein, Mansoor, Melendez, Morrell, Nestande, Patterson,
Wagner, Wilk
NO VOTE RECORDED: Gorell, Holden, Olsen, Vacancy
MW:nl 9/3/13 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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