BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 250|
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THIRD READING
Bill No: AB 250
Author: Holden (D) and V. Manuel Perez (D), et al.
Amended: 6/26/13 in Senate
Vote: 21
SENATE BUSINESS, PROF. & ECON. DEV.COMMITTEE : 9-0, 6/24/13
AYES: Lieu, Block, Corbett, Galgiani, Hernandez, Hill, Padilla,
Wyland, Yee
NO VOTE RECORDED: Emmerson
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 73-5, 5/30/13 - See last page for vote
SUBJECT : California Innovation Initiatives
SOURCE : Author
DIGEST : This bill codifies and expands the California
Innovation Hub (iHub) Program at GO-Biz for the purpose of
stimulating economic development and job creation through the
coordination of federal, state, and local innovation-supporting
resources.
ANALYSIS :
Existing law:
1. Establishes GO-Biz for the purpose of serving as the lead
state entity for economic strategy and marketing of
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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. Establishes the California Economic Development Fund in the
State Treasury for the purpose of receiving federal, state,
local, and private economic development funds, and receiving
repayment of loans or grant proceeds and interest on those
loans or grants. Provides that upon appropriation by the
Legislature, moneys in the Fund may be expended by GO-Biz to
provide matching funds for loans or grants to public
agencies, nonprofit organizations, and private entities, and
for other economic development purposes, consistent with the
purposes for which the moneys were received.
This bill:
1. Makes the following legislative findings and declarations:
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. iHubs are operated in California through a cooperative
agreement between 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
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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 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
GO-Biz 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.
1. Creates the iHub Program within GO-Biz. Requires GO-Biz to
designate iHubs 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. Provides that the assets may include,
but are not limited to, research parks, technology
incubators, universities, and federal laboratories. Requires
GO-Biz to oversee, coordinate, and provide assistance to each
iHub.
2. Defines the following terms:
A. "Applicant" as one or more entities that submit an
application to GO-Biz. States that eligible applicants
must either be a fully accredited institution of higher
education or a private nonprofit corporation engaged in
economic development activities or a county or
municipality in this state that has a preexisting economic
development department or program or both or a public
economic development institution such as a workforce
investment board or an economic development corporation.
B. "Innovation Hub" or "iHub" as a network of
interrelated firms, local governments, economic
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development organizations, educational entities, and
industries that collectively drive economic growth within
a defined geographic area.
C. "iHub coordinator" as the individual or entity agreed
to by the partnership that is responsible for implementing
the objectives of the iHub, serving as the primary agent
responsible for coordinating services and resources and
maintaining the partnership and serving as the primary
liaison to the state and the office.
1. Requires GO-Biz to issue a request for proposals for the
iHub Program. Requires an applicant's proposal to include,
but not be limited to the following, and states that GO-Biz
may also waive any of the following:
A. A statement of purpose.
B. A signed statement of cooperation and a description of
the roles and relationships of each entity involved in the
partnership.
C. A designated iHub coordinator.
D. A clear explanation and map conveying the iHub's
physical boundary.
E. A clearly stated designee to coordinate iHub
activities.
F. A clearly identified central location, clearly
identified benchmarks or milestones with approximate dates
as to when they will be achieved.
G. A complete budget including a description of secured
funds with proof, pending funds, and potential future
funding sources, a list and brief description of local and
regional incentives and support programs.
H. A clearly articulated commercial market focus and
plan, 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
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achieving the proposed objectives.
I. A list of iHub assets and resources.
J. A clearly articulated focus area of the iHub including
industry sectors or other targeted areas for development
and growth.
AA. A list of specific resources available to support and
guide startup companies.
BB. A clearly articulated list of goals to be achieved
with the certification of the iHub.
CC. Expectations for job development and business
creation.
DD. Defined performance standards agreed upon by the
partners involved in the development of the iHub.
EE. Evaluation procedures that will be used to measure the
level of achievement for each stated goal.
FF. A plan for sustainability.
GG. Organizational experience including capabilities,
related experience, facilities, techniques, unusual
resources, or unique combinations of these that are
integral factors for achieving the proposed objectives.
HH. Demonstrated experience with innovation programs such
as involvement with technology commercialization.
II. Demonstrated experience with technology transfer or
licensing.
JJ. Demonstrated experience with intellectual property
management.
AAA. Evidence of community engagement and support.
1. Authorizes GO-Biz to designate an iHub for a term of not
more than five years and authorizes an iHub to reapply for a
designation without limitation on the number of times.
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Allows for more than one iHub to be designated in an area, to
the extent that there is a clear distinction between the
focus area of each iHub. Requires GO-Biz to set guidelines
for approval, designation, operation, reporting,
redesignation, and dedesignation of iHubs.
2. Provides that the iHub designation shall not be official
until a memorandum of understanding (MOU) is entered into by
the applicant and GO-Biz. Requires the MOU to include the
goals and performance standards identified in the application
and other related requirements as determined by the office.
For an iHub designated by GO-Biz before January 1, 2014,
authorizes the iHub partnership to have until September 1,
2014 to enter into a MOU with GO-Biz.
3. Requires an annual report from an iHub to GO-Biz on its
progress in meeting the goals and performance standards as
described in the application and MOU it has with GO-Biz.
Requires GO-Biz to post the information from these reports on
the GO-Biz Web site and provide notice to the Governor and
relevant policy committees of the Legislature that the
information is available on the Web site.
4. Provides that a designated iHub must include at least one
major university or research center or institute, one
economic development organization, and consist of at least
four of the following:
A. A business support organization including a workforce
development or training organization, incubator or
business accelerator, business technical assistance
providers, chamber of commerce, and networking
organization that supports innovation.
B. An educational consortium including technology
transfer representatives.
C. A venture capital network including angel investors.
D. A business foundation, innovation foundation, science
foundation, laboratory research institution, federal
laboratory, or research and development facility.
E. A municipal economic development division or
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department.
F. A federal government partner such as a national
laboratory.
1. Requires an iHub applicant, before receiving official
designation from GO-Biz, to self-certify that the iHub will
comply with the state's nondiscrimination policy and 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.
2. Authorizes an iHub to:
A. 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.
B. Provide expert advice to entrepreneurs on starting a
business, including legal requirements for starting a
business and access to financing opportunities.
C. 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, small business
development centers, microenterprise development
organizations, small business service agencies, economic
development organizations, and chambers of commerce.
D. Facilitate partnerships between innovative startup
businesses, research institutions, and venture capitalists
or financial institutions.
1. Requires the iHubs, to the extent feasible, to:
A. Work in close collaboration with the activities of the
office as its primary statewide partner.
B. Coordinate activities with the Employment Training
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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.
1. Establishes The Innovation Accelerator Account within the
California Economic Development Fund in the State Treasury.
Provides that subject to the approval of the Department of
Finance, all moneys collected and received by GO-Biz for
California Innovation Initiatives from gifts, bequests, or
donations shall be deposited in the iHub Accelerator Fund.
Continuously appropriates these funds.
Background
Among other programs, GO-Biz administers the iHub Program in
partnership with the statewide network of small business
development centers (SBDCs). SBDCs serve over 50,000 small
business owners and entrepreneurs each year through services
include consulting, mentoring and training related to business
management and planning, financing business growth and accessing
capital, international trade, government procurement and
technology commercialization.
According to GO-Biz, in 2010, the state launched its new,
forward-thinking iHub Program in an effort to harness and
enhance California's Innovative spirit. The iHubs improve the
state's national and global competitiveness by stimulating
partnerships, economic development, and job creation around
specific research clusters through state-designated iHubs. The
iHubs leverage assets such as research parks, technology
incubators, universities, and federal laboratories to provide an
innovation platform for startup companies, economic development
organizations, business groups, and venture capitalists.
There are currently 12 regional iHubs located throughout the
state: (1) i-GATE iHub in Livermore; (2) Sacramento
iHub/Sacramento Regional Technology Alliance in Sacramento; (3)
San Diego iHub/CONNECT in La Jolla; (4) OCTANE iHub in Orange
County; (5) East Bay Green Corridor iHub in the East Bay; (6)
Clean Tech LA iHub in Los Angeles; (7) SJ/SV Emerging Technology
iHub in San Jose and Silicon Valley; (8) North Bay iHub in Santa
Rosa; (9) Greater Mission Bay iHub in San Francisco; (10) North
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State iHub in Chico; (11) Coachella Valley iHub in Palm Springs;
and (12) CalValleyTech iHub in the Central San Joaquin Valley.
FISCAL EFFECT : Appropriation: Yes Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 8/9/13)
BIOCOM
California Healthcare Institute
Clean Tech San Diego
CONNECT
Los Angeles County Economic Development Corporation
San Diego Regional Economic Corporation
San Gabriel Valley Economic Partnership
ARGUMENTS IN SUPPORT : According to the author, "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." The author states
that this bill "will serve as a catalyst to creating a network
of intellectual and business development assets that can
facilitate technology commercialization by establishing the
Innovation Hub program into law and authorizing access to
private sector capital for its operations."
The Los Angeles County Economic Development Corporation call
this bill a boost to a low-cost program that is essential to
spurring innovation, prompting collaboration and improving the
state's overall economic competitiveness.
According to the California Healthcare Institute, this bill
provides an excellent model to bring the forces of innovation,
competition and education together and help ensure that
California remains the preeminent location for innovation in the
biomedical field.
The San Gabriel Valley Economic Partnership states that by
leveraging local research parks, technology incubators, colleges
and universities and federal laboratories, the iHub Program has
successfully fostered greater collaboration between innovators
and venture capital investment opportunities within the state.
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ASSEMBLY FLOOR : 73-5, 5/30/13
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Bigelow, Bloom,
Blumenfield, Bocanegra, Bonilla, Bonta, Bradford, Brown,
Buchanan, Ian Calderon, Campos, Chau, Chesbro, Conway, Cooley,
Daly, Dickinson, Eggman, Fong, Fox, Frazier, Beth Gaines,
Garcia, Gatto, Gomez, Gonzalez, Gordon, Gorell, Gray, Hagman,
Hall, Harkey, Roger Hernández, Jones, Jones-Sawyer, Levine,
Linder, Logue, Lowenthal, Maienschein, Mansoor, Medina,
Mitchell, Morrell, Mullin, Muratsuchi, Nazarian, Nestande,
Olsen, Pan, Patterson, Perea, V. Manuel Pérez, Quirk,
Quirk-Silva, Rendon, Salas, Skinner, Stone, Ting, Wagner,
Waldron, Weber, Wieckowski, Wilk, Williams, Yamada, John A.
Pérez
NOES: Chávez, Dahle, Donnelly, Grove, Melendez
NO VOTE RECORDED: Holden, Vacancy
MW:k 8/12/13 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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