BILL ANALYSIS �
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|SENATE RULES COMMITTEE | AB 837|
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THIRD READING
Bill No: AB 837
Author: Campos (D), et al.
Amended: 5/1/13 in Assembly
Vote: 21
SENATE BUSINESS, PROF. & ECON. DEV. COMM. : 10-0, 6/17/13
AYES: Lieu, Emmerson, Block, Corbett, Galgiani, Hernandez,
Hill, Padilla, Wyland, Yee
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 74-0, 5/23/13 (Consent) - See last page for
vote
SUBJECT : Economic development programs: reporting
SOURCE : Author
DIGEST : This bill requires annual reporting to the Governor's
Office of Business and Economic Development (GO-Biz) by the
California Small Business Development Center Leadership Council
(Council) on its activities in any year that the state
contributes funds to the program and also specifies the contents
of the report; and makes legislative findings and declarations.
ANALYSIS :
Existing law:
1.Establishes GO-Biz for the purpose of serving as the lead
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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 (OSBA).
2.Authorizes GO-Biz as the lead entity for economic strategy and
the marketing of California on issues relating to business
development, private sector investment and economic growth;
authorizes GO-Biz, in this capacity, to coordinate the
development of policies and criteria to ensure that federal
grants administered or directly expended by state government
advance statewide economic goals and objectives; authorizes
GO-Biz to market the business and investment opportunities
available in California by working in partnership with local,
regional, federal, and other state public and private
institutions to encourage business development and investment
in the state; and authorizes GO-Biz to support small
businesses by providing information about accessing capital,
complying with regulations, and supporting state initiatives
that support small business.
3.Finds and declares that it is in the public interest to aid,
counsel, assist, and protect the interests of small business
concerns in order to preserve free competitive enterprise and
maintain a healthy state economy; and establishes OSBA within
GO-Biz in order to advocate the causes of small business and
to provide small businesses with the information they need to
survive in the marketplace.
4.Requires OSBA to prepare and submit a written annual report to
the Governor and to the Legislature that describes the
activities and recommendations of OSBA, including an
evaluation of the efforts of state agencies and, where
appropriate, specific departments, that significantly regulate
small businesses to assist minority and other small business
enterprises, and making recommendations that may be
appropriate to assist the development and strengthening of
minority and other small business enterprises.
5.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
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repayment of loans or grant proceeds and interest on those
loans or grants; and provides that upon appropriation by the
Legislature, monies 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 monies were received.
This bill:
1.Makes the following legislative findings and declarations:
A. The California Small Business Development Center (SBDC)
Program, as part of the federal SBDC Program, plays a
primary role in providing technical assistance to the
state's small businesses and provides verified positive
outcomes to the state's economy.
B. Within the state, the SBDC Program is administered
through six Regional SBDC Networks, which are managed by an
Administrative Lead Center (Lead Center), designated by the
federal Small Business Administration (SBA) through a
cooperative agreement, and affiliated with one public
institution of higher education. The SBDCs are responsible
for securing required one-to-one matching funds to draw
down federal appropriations, according to a
population-based formula determined by the United States
Census, and the Regional Networks are held accountable for
their productivity and required to submit regular
performance reports to the Office of Small Business
Development Centers, within the federal SBA.
C. Throughout the six Regional Networks there are more than
30 full-time SBDCs, with multiple additional outreach
locations serving small businesses in this state. These
SBDCs provide assistance to existing businesses in the
areas of financing, government contracting, business
planning and management, marketing, international trade,
energy efficiency and sustainability, and disaster
preparedness. The SBDCs also provide expert advice to
technology companies in the areas of business and financial
plan preparation, angel and venture capital presentation
preparation, funding strategies, product positioning,
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market launch strategies, applications for federal grants,
technology transfers with research universities,
intellectual property issues, and strategic partnerships.
D. The Council is comprised of the directors of the six
Lead Centers that coordinate the Regional Networks of
SBDCs. The Council is the statewide entity tasked with
negotiating partnerships on behalf of the California SBDC
Program, leveraging operational and technical assistance
for best practices across the six regions, and working with
the state government to maximize the economic impact of the
federal SBDC Program within the state.
1.Provides that on or before August 30, following any year that
state funds are appropriated to a Lead Center for the support
of the SBDC Program, the State Chair of the Council shall
provide a written report to GO-Biz.
2.Provides that as a condition for receiving state funds, each
Lead Center accepts the reporting requirement; provides that
as a further condition for receiving state funds, the State
Chair of the Council shall arrange to provide GO-Biz with
access to similar information, in both a similar timeframe and
format, that a Lead Center may provide to the federal SBA with
regards to client services and the economic impact of the SBDC
Program; and provides that information provided to the GO-Biz
shall meet applicable privacy standards and shall not disclose
the name of an individual business.
3.Requires the report submitted to GO-Biz to include, but not be
limited to, (a)
the number of businesses assisted; (b) the number of employees
employed by those businesses at the time those businesses were
assisted; (c) the number of jobs created and retained; (d) the
estimated amount of state tax dollars generated from those
businesses; (e) industry sectors of the businesses assisted,
as reported by the assisted businesses; (f) the increase in
sales reported by businesses assisted as a result of the
Program; (g) the amount of capitol infusion, in both debt and
equity, obtained by assisted businesses; and (h) the total
amount of federal funds allocated to the region during the
reporting period.
4.Requires the Director of GO-Biz to submit a copy of the report
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to the Legislature and post the report on the GO-Biz Internet
Web site no later than 30 days after GO-Biz receives the
report.
Background
SBDC Program . According to information provided by the author's
office, California's SBDCs serve over 50,000 small business
owners and entrepreneurs each year. SBDC 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.
The SBDC program is sponsored by the federal SBA and functions
as a cooperative effort of the private sector, the educational
community and federal, state and local governments. In
California, SBDCs are administered through a partnership between
the California State University (CSU) Chico, CSU Humboldt, CSU
Fullerton, University of California (UC) Merced and Long Beach
Community College and Southwestern Community College.
Funding for California SBDCs is provided by the federal SBA
through a population-based grant and requires a
dollar-for-dollar match in non-federal funds. State matching
funds for the program were previously appropriated from the
Technology, Trade and Commerce Agency (TTCA), however, the TTCA
was repealed in 2003 and since that time the state has only
received the full amount of eligible federal funds one time.
SBDCs have relied on municipalities, individual educational
institutions and foundations to provide the matching funds
required to receive federal monies.
In 2010, the Budget (AB 1632, Blumenfield, Chapter 731)
appropriated $6 million, allowing for a matching $6 million in
federal funds and creating the opportunity for SBDCs to
contribute another $6 million in in-kind contributions,
resulting in another $6 million in federal matching funds. The
state appropriation provided the potential of generating 50,000
counseling and training cases and generating 5,500 jobs.
Governor's Office of Business and Economic Development (GO-Biz).
In February 2010, the Little Hoover Commission undertook a
review of the state's economic and workforce development
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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 TTCA 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, the Governor signed 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 businesses, and regulatory challenges.
According to GO-Biz, the OSBA advocates the causes of small
business and provides small business owners with the information
needed to succeed in the California marketplace. OSBA staff
provides assistance to the state's small business community on
issues ranging from regulations to procurement. Depending on
the issue, staff can refer small businesses to appropriate
contacts in state government, business, and service
organizations. OSBA staff also serves on various state
interagency working groups and task forces to represent small
business interests in state legislation, policy, and procedures.
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 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. In addition, the
Governor called for the placement of the California SBDC Program
within GO-Biz.
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FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 7/2/13)
101MFG
Advanced Beauty College
Alameda County Small Business Development Center
Allen Kornenstein Law Office
Alliance Small Business Development Center (Modesto/Merced)
Ambryx Biotechnology
American Pacific Mortgage Optimum Zendejas Home Loans
Arcata Economic Development Corporation
Associated Builders and Contractors
Bay Area Development Company
Blueray Concepts
Bouchard Business Services
Brand Source Pacific Rim
Cabrillo College
Cal Poly San Luis Obispo Center for Innovation &
Entrepreneurship
Cal Poly San Luis Obispo Small Business Development Center
California Asian Pacific Chamber of Commerce
California Associate of Competitive Telecommunications Companies
California Association for Microenterprise Opportunity
California Chapter of American Fence Association
California Hispanic Chamber of Commerce
California Metals Association Coalition
California State University, Fresno Office of Community and
Economic Development
California State University, Humboldt
California State University, Los Angeles College of Engineering,
Computer Science and Technology
California State University, Los Angeles Small Business
Development Center
California State University, Monterey Bay Small Business
Development Center
Camino Brewing Company
Central Coast Small Business Development Center
Central Valley Business Incubator Small Business Development
Center
City College of San Francisco School of Business
Cities of Huron and Pasadena
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Coalition of Small and Disabled Veteran Businesses
Contra Costa Small Business Development Center
DonationPay
East Bay Green Corridor
Economic Development Collaborative, Ventura County
El Camino College Small Business Development Center
El Camino Community College District
Flasher Barricade
Fresno Regional Workforce Investment Board
Fresno State Foundation
Golden Gate Restaurant Association
Greater Sacramento/Sierra Small Business Development Center
Henry Buder's Landscape Restoration
Inland Empire Small Business Development Center
Inland Valley Business Alliance
J Style at Home
Jamber
King Knish
Long Beach Community College District
Los Angeles Chamber of Commerce
Los Angeles Regional Small Business Development Center
Los Rios Community College District
Main Street Chamber Rancho Cucamonga
Main Street Chamber Upland
Marysville Van & Storage
Masako's Music Studio
Mendocino Small Business Development Center
Mira Costa College District
Monterey Business Council
Napa Valley College
National Association of Women Business Owners
National Federation of Independent Businesses
Newport Home Care
North Coast Small Business Development Center
North San Diego County Small Business Development Center
Northeastern California Small Business Development Center
Northern California Region Small Business Development Center
Oakland Metropolitan Chamber of Commerce
OCTANe
Orange County Small Business Development Center
Orange County/Inland Empire Network Small Business Development
Center Launchpad
Pacific Coast Regional Small Business Development Center
Rancho Santiago Community College District
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Real Property Management
Redwood Region Economic Development Commission
Saafara West African Herbal Teas
San Francisco Chamber of Commerce
San Francisco Council of District Merchants Associations
San Francisco Locally Owned Merchants Alliance
San Francisco Small Business Development Center
San Joaquin Delta College
Santa Monica Community College District
Santa Monica Small Business Development Center
Shorter's Rib Pit & Catering
Small Business California
Small Business Majority
Small Manufacturers Association of California
SoberLink
Solano Community College
Solano County Small Business Development Center
Stanislaus Economic Development and Workforce Alliance-Alliance
Small Business Development Center
The CPR Lady
The Headwaters Fund (County of Humboldt)
Tim Wright Transportation
Times Delta Media Group
TMC Development Working Solutions
University of California Merced Small Business Development
Center
Vivas Banners & Signs
West Company Business Assistance
ARGUMENTS IN SUPPORT : According to the author's office, the
SBDC Program is not recognized in statute and this bill is
necessary to help ensure that when state dollars are invested in
the SBDC Program, the state can understand how those public
funds are being used. The author's office states that this bill
introduces accountability standards and reporting requirements
if state matching funds are provided to California SBDCs.
According to the author's office, California is one of only five
states that do not provide monies to allow SBDCs to obtain full
federal matching funds.
Supporters of this bill, including businesses, business
organizations educational institutions and the state's SBDCs,
among others, note that the California SBDC Program is the
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state's premier technical assistance provider for small
businesses and state that SBDCs have a proven record in
supporting the growth of new enterprises, jobs and capital for
California's business community. Supporters cite the SBDCs as
an excellent resource for small businesses that provide free or
low-cost valuable services to some 60,000 businesses owners in
2012, and assisted in creating and saving over 10,000 jobs.
ASSEMBLY FLOOR : 74-0, 5/23/13
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Bigelow, Bloom,
Blumenfield, Bocanegra, Bonilla, Bonta, Bradford, Brown,
Buchanan, Ian Calderon, Campos, Chau, Ch�vez, Chesbro, Conway,
Cooley, Dahle, Daly, Dickinson, Donnelly, Eggman, Fong, Fox,
Frazier, Beth Gaines, Garcia, Gatto, Gomez, Gordon, Gorell,
Gray, Hagman, Hall, Harkey, Roger Hern�ndez, Jones-Sawyer,
Levine, Linder, Logue, Lowenthal, Maienschein, Mansoor,
Medina, Melendez, Mitchell, Morrell, Mullin, Muratsuchi,
Nazarian, Nestande, Olsen, Pan, Patterson, Perea, V. Manuel
P�rez, Quirk, Quirk-Silva, Rendon, Salas, Skinner, Stone,
Ting, Wagner, Weber, Wieckowski, Wilk, Williams, Yamada, John
A. P�rez
NO VOTE RECORDED: Grove, Holden, Jones, Waldron, Vacancy,
Vacancy
MW:ej 7/2/13 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
**** END ****
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