Amended in Assembly April 18, 2013

Amended in Assembly March 4, 2013

California Legislature—2013–14 Regular Session

Assembly Bill No. 250

Introduced by Assembly begin delete Member end delete begin insert Members end insert Holden begin insert and V. Manuel Pérez end insert

begin insert

(Coauthors: Assembly Members Brown and Fox)

end insert

February 6, 2013

An act to add Article 6 (commencing with Section 12099) to Chapter 1.6 of Part 2 of Division 3 of Title 2 of the Government Code, relating to state government, and making an appropriation therefor.

LEGISLATIVE COUNSEL’S DIGEST

AB 250, as amended, Holden. California Innovation begin delete Hub Program. end delete begin insert Initiatives. end insert

The Governor’s Office of Business and Economic Development serves as the Governor’s lead entity for economic strategy and the marketing of California on issues relating to business development, private sector investment, and economic growth. The office, among others, makes recommendations to the Governor and the Legislature regarding policies, programs, and actions to advance statewide economic goals.

This bill would create the California Innovation Hub Program within the Governor’s Office of Business and Economic Development. The bill would require the office to designate Innovation Hubs, as specified. The bill would authorize the office, with the consent of the Director of the Department of General Services, to use vacant or underused state-owned or leased property, or both, that is controlled by the Department of General Services, as specified. The bill would authorize specified state property, when authorized by law, to be used as matching funds to meet federal funding requirements. The bill would require the office to issue a request for proposals for the California Innovation Hub Program, and would require the proposals to include specified information except as provided. The bill would require each begin delete certified end delete begin insert designated end insert iHub partnership to include, among other things, at least one major university or research center or institute. The bill would establish the begin delete iHub end delete begin insert Innovation end insert Accelerator begin delete Fund, end delete begin insert Account within the California Economic Development Fund end insert and would make a continuous appropriation from that begin delete fund end delete begin insert account end insert to the office to be used for begin delete the end delete California Innovation begin delete Hub Program, end delete begin insert Initiatives, end insert as specified. begin insert The bill would require an iHub to annually post the information from these reports on its Internet Web site and notify the Governor and specified legislative committees that such information is available on its Internet Web site. end insert

Vote: majority. Appropriation: yes. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Article 6 (commencing with Section 12099) is
added to Chapter 1.6 of Part 2 of Division 3 of Title 2 of the Government Code, to read:

 

Article 6.  California Innovation begin delete Hub Program end delete begin insert Initiatives end insert

 

12099.  

The Legislature finds and declares all of the following:

(a) Job creation through rapid technology commercialization is
a vital part of the state’s economic well-being, as identified in a
January 2012 symposium held by the Brookings Institute.

(b) Innovation and tech-driven entrepreneurial activity coupled
with venture investment creates small business startups and
expansions at an accelerated rate, which leads to significant
employment opportunities that contribute to the state’s financial
health and economic competitiveness.

(c) In order to maintain a healthy state economy and to aid
communities, entrepreneurship and technology-based small
businesses must be stimulated and supported.

(d) The Innovation Hubs (iHubs) are operated in California
through a cooperative agreement between the Governor’s Office
of Business and Economic Development (GO-Biz) and 12
geographically distinct regions, all of which are partnered with
public universities, community college districts, local governments,
research institutions, industry, angel and venture capital networks,
and traditional financial institutions. The iHubs are California’s
premier resource for facilitating the success of entrepreneurial and
small technology startups that can grow California’s economy by
assisting business owners in creating and retaining jobs, increasing
sales and profits, securing business financing, and creating a
successful new business climate in the state.

(e) The iHubs’ economic impact in fostering entrepreneurial
business activity leads to job creation and an innovation in the
economy by establishing a formal partnership between the office
and the iHub program.

(f) It is necessary to establish a fund that would enable the office
to obtain funding from private sources, for appropriation to state
designated iHubs, iHub partner organizations, and within state
iHub-designated regions for the purpose of establishing, promoting,
and enhancing California’s innovation and entrepreneurship
ecosystem.

12099.1.  

(a) The California Innovation Hub Program is hereby
created within the office.

(b) The office shall designate Innovation Hubs within the state
to stimulate partnerships, economic development, and job creation
by leveraging assets to provide an innovation platform for startup
businesses, economic development organizations, business groups,
and venture capitalists. The assets may include, but are not limited
to, research parks, technology incubators, universities, and federal
laboratories.

(c) The office shall oversee, coordinate, and provide assistance
to each iHub.

12099.2.  

For purposes of this article, the following terms shall
be defined as follows:

(a) “Applicant” means begin delete a fully accredited institution of higher
education, a private nonprofit corporation engaged in economic
development activities, a county or municipality in this state that
has a preexisting economic development department or program
or both, and a public economic development institution such as a
workforce investment board, or an economic development
corporation end delete begin insert one or more entities that submit an application to
GO-Biz end insert . begin insert Eligible applicants shall be one or more of the following: end insert

begin insert

(1) A fully accredited institution of higher education.

end insert begin insert

(2) A private nonprofit corporation engaged in economic
development activities.

end insert begin insert

(3) A county or municipality in this state that has a preexisting
economic development department or program or both.

end insert begin insert

(4) A public economic development institution such as a
workforce investment board or an economic development
corporation.

end insert

(b) “Demonstration site” means begin delete state owned end delete begin insert state-owned end insert or
leased property that can be used by begin delete an innovative end delete begin insert a end insert business or
nonprofit organization to demonstrate its technologies pursuant to
a demonstration agreement.

(c) “Innovation Hub” or “iHub” means a network of interrelated
begin delete firms end delete begin insert firms, local governments, economic development
organizations, educational entities, end insert and industries that collectively
drive economic growth within a defined geographic area.

(d) “iHub coordinator” means the individual or entity agreed to
by the partnership that is responsible for all of the following:

(1) Implementing the objectives of the iHub.

(2) Serving as the primary agent responsible for coordinating
services and resources and maintaining the partnership.

(3) Serving as the primary liaison to the state and the office.

12099.3.  

(a) The office shall issue a request for proposals for
the California Innovation Hub Program.

(b) An applicant’s proposal shall include, but shall not be limited
to, all of the following information:

(1) A statement of purpose.

(2) A signed statement of cooperation and a description of the
roles and relationships of each entity involved in the partnership.

(3) A designated iHub coordinator.

(4) A clear explanation and map conveying the iHub’s physical
boundary.

(5) A clearly stated designee to coordinate iHub activities.

(6) A clearly identified central location.

(7) Clearly identified benchmarks or milestones with
approximate dates as to when they will be achieved.

(8) A complete budget including a description of secured funds
with proof, pending funds, and potential future funding sources.

(9) A list and brief description of local and regional incentives
and support programs.

(10) A clearly articulated commercial market focus and plan.

(11) A clearly articulated iHub management structure and plan
that may include a description of the capabilities, qualifications,
and experience of the proposed management team, team leaders,
or key personnel who are critical to achieving the proposed
objectives.

(12) A list of iHub assets and resources.

(13) A clearly articulated focus area of the iHub including
industry sectors or other targeted areas for development and
growth.

(14) A list of specific resources available to support and guide
startup companies.

(15) A clearly articulated list of goals to be achieved with the
certification of the iHub.

(16) Expectations for job development and business creation.

(17) Defined performance standards agreed upon by the partners
involved in the development of the iHub.

(18) Evaluation procedures that will be used to measure the
level of achievement for each stated goal.

(19) A plan for sustainability.

(20) Organizational experience including capabilities, related
experience, facilities, techniques, unusual resources, or unique
combinations of these that are integral factors for achieving the
proposed objectives.

(21) Demonstrated experience with innovation programs such
as involvement with technology commercialization.

(22) Demonstrated experience with technology transfer or
licensing.

(23) Demonstrated experience with intellectual property
management.

(24) Evidence of community engagement and support.

(c) The office may waive any of the requirements listed in
subdivision (b).

begin insert

(d) The office may designate an iHub for a term of not more
than five years. An iHub may reapply for a designation without
limitation on the number of times.

end insert begin insert

(e) (1) The iHub designation shall not be official until a
memorandum of understanding is entered into by the applicant
and the office. The memorandum of understanding shall include
the goals and performance standards identified in the application
and other related requirements as determined by the office.

end insert begin insert

(2) For an iHub designated by the office before January 1, 2014,
the iHub partnership shall have until September 1, 2014, to enter
into a memorandum of understanding with the office that meets
the requirements of this article.

end insert begin insert

(f) More than one iHub may be designated in an area to the
extent that there is a clear distinction between the focus area of
each iHub.

end insert begin insert

(g) The office shall set guidelines for approval, designation,
operation, reporting, and dedesignation of iHubs.

end insert begin insert

(h) An iHub shall annually report to the office on its progress
in meeting the goals and performance standards as described in
the iHUB application and implementing memorandum of
understanding with the office. The office shall annually post the
information from these reports on the office Internet Web site and
provide notice to the Governor and relevant policy committees of
the Legislature that the information is available on the Internet
Web site.

end insert

12099.4.  

(a) A designated iHub shall include at least one major
university or research center or institute, one economic
development organization, and consist of at least four of the
following:

(1) A business support organization including a workforce
development or training organization, incubator or business
accelerator, begin insert business technical assistance providers, end insert chamber of
commerce, and networking organization that supports innovation.

(2) An educational consortium including technology transfer
representatives.

(3) A venture capital network including angel investors.

(4) A business foundation, innovation foundation, science
foundation, laboratory research institution, federal laboratory, or
research and development facility.

(5) A municipal economic development division or department.

(6) A federal government partner such as a national laboratory.

12099.5.  

(a) Before an official designation as an iHub, the
applicant shall self-certify both of the following:

(1) That the iHub will comply with the state’s nondiscrimination
policy.

(2) That the iHub and its principals are current in payment of
all state and local taxes owed unless they have entered into an
agreement that was deemed satisfactory by the respective taxing
authority and are in full compliance with the agreement.

12099.6.  

(a) An iHub may do all of, but shall not be limited
to, the following:

(1) Provide counseling and technical assistance, either by direct
or indirect services, in the areas of entrepreneurial business
planning and management, financing, and marketing for small
businesses.

(2) Provide expert advice to entrepreneurs on starting a business,
including legal requirements for starting a business and access to
financing opportunities.

(3) Conduct business workshops, seminars, and conferences
with local partners including, but not limited to, state universities,
state community colleges, local governments, state and federal
service providers, private industry, workforce investment boards
and agencies, begin insert small business development centers, microenterprise
development organizations, end insert small business service agencies,
economic development organizations, and chambers of commerce.

(4) Facilitate partnerships between innovative startup businesses,
research institutions, and venture capitalists or financial institutions.

(b) The iHubs shall, to the extent feasible, do all of the
following:

(1) Work in close collaboration with the activities of the office
as its primary statewide partner.

(2) Coordinate activities with the Employment Training Panel,
the California Workforce Investment Board, the Office of the
Chancellor of the California Community Colleges, the University
of California, the California State University, and other state
economic and workforce development programs.

12099.7.  

(a) Notwithstanding any other law, the office may,
with the consent of the Director of the Department of General
Services, use vacant or underused state owned or leased property,
or both, that is controlled by the Department of General Services
for purposes including, but not limited to, assisting iHubs begin insert and
other organizations, businesses, and collaboratives end insert establish proof
of concept centers, incubators, and demonstration sites.

(b) State property under this section, when authorized by law,
may be used as matching funds to meet federal funding
requirements.

12099.8.  

(a) The office may authorize a business or nonprofit
organization to use a state-owned or leased property, or both,
pursuant to Section 12099.7.

(b) The office shall enter into a demonstration agreement with
the business or nonprofit organization before a demonstration of
an emerging technology may occur on state-owned or leased
property.

(c) A demonstration agreement shall include all of the following:

(1) A provision that the business or nonprofit organization agrees
to indemnify the state against any liability or damages that may
result from the demonstration.

(2) A provision that authorizes the Department of General
Services and the office to stop the demonstration if the begin delete innovative end delete
business begin insert or nonprofit organization end insert has falsified or withheld
information that should have been disclosed about the
demonstration.

(3) A provision that the business begin insert or nonprofit organization end insert
agrees to purchase insurance coverage necessary, as determined
by the state, to cover the costs to the state for any risks.

(4) A certification by the begin delete innovative end delete business begin insert or nonprofit
organization end insert that the demonstration project meets all current
begin delete applicable industry standards, laws, end delete begin insert laws end insert and applicable regulations
begin delete and end delete begin insert in order to establish that the project end insert can safely be
demonstrated. The office may require proof of such.

(5) Other provisions determined by the office to be relevant for
the successful and safe undertaking of the demonstration.

(d) State-owned or leased property under this section shall be
used only in furtherance of this chapter.

12099.9.  

The begin delete iHub end delete begin insert Innovation end insert Accelerator begin delete Fund end delete begin insert Account end insert is
hereby created within begin insert the California Economic Development Fund
in end insert the State Treasury. Subject to the approval of the Department
of Finance, all moneys collected and received by the Governor’s
Office of Business and Economic Development for begin delete the end delete California
Innovation begin delete Hub Program end delete begin insert Initiatives end insert from gifts, bequests, or
donations shall be deposited in the iHub Accelerator Fund.
Notwithstanding Section 13340, the moneys in the begin delete fund end delete begin insert account end insert
are continuously appropriated to the office to be used for begin delete the end delete
California Innovation begin delete Hub Program end delete begin insert Initiatives end insert pursuant to the
terms of the gift, bequest, or donation.