BILL ANALYSIS Ó AB 53 Page 1 GOVERNOR'S VETO AB 53 (John A. Pérez) As Amended September 3, 2013 2/3 vote -------------------------------------------------------------------- |ASSEMBLY: |55-21|(May 30, 2013) |SENATE: |28-11|(September 9, | | | | | | |2013) | -------------------------------------------------------------------- -------------------------------------------------------------------- |ASSEMBLY: |57-19|(September 10, | | | | | | |2013) | | | | -------------------------------------------------------------------- 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 AB 53 Page 2 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 AB 53 Page 3 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 AB 53 Page 4 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 FN: 0002899