BILL ANALYSIS                                                                                                                                                                                                    Ó





                                                                AB 53

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        GOVERNOR'S VETO
        AB 53 (John A. Pérez)
        As Amended  September 3, 2013
        2/3 vote

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        |ASSEMBLY:  |55-21|(May 30, 2013)  |SENATE: |28-11|(September 9,     |
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        |ASSEMBLY:  |57-19|(September 10,  |        |     |                  |
        |           |     |2013)           |        |     |                  |
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         Original Committee Reference:    J., E.D. & E.
         
         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.  

         The Senate amendments:

         1)Modify the update schedule to be two years following the first  
          report period.

        2)Remove the specific requirement to convene one or more stakeholder  
          meetings to help develop recommendations for the strategy and,  
          instead, require a stakeholder advisory meeting following the  
          completion of the strategy.

        3)Specify that GO-Biz may utilize portions of previous studies in  
          developing the strategy.

        4)Provide that the ED Strategy may be funded in whole or in part by  
          nonstate funds, the sources of which are to be reported, as  










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          specified.

        5)Make other clarifying and technical changes.

         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.

         FISCAL EFFECT  :  According to the Senate Appropriations Committee,  
        GO-Biz estimates that it would incur a cost of $500,000 (General  
        Fund) and EDD estimates it incur minor 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.

         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 within 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  










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        these drivers has its own unique 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 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.  
         
        GOVERNOR'S VETO MESSAGE  :

             This bill requires the Governor's Office of Business and  
             Economic Development (GO Biz) to prepare the California  
             Economic Development Strategic Plan and a triennial  
             report to the Legislature. 

             GO Biz is now implementing the state's new economic  
             development initiative that Speaker Pérez helped make  
             possible earlier this year. In addition, thanks to  
             legislation authored by Speaker Pérez, GO Biz is  
             expanding direct foreign investment, promoting export of  
             California products, removing unnecessary government  
             barriers for businesses, and helping large and small  
             businesses innovate, grow, and prosper in California. For  










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             all these reasons, I don't think a study and report will  
             bring any additional focus to our efforts.




         Analysis Prepared by:     Toni Symonds / J., E.D. & E. / (916)  
        319-2090 


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