BILL ANALYSIS �
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|Hearing Date:June 24, 2013 |Bill No:AB |
| |1399 |
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SENATE COMMITTEE ON BUSINESS, PROFESSIONS
AND ECONOMIC DEVELOPMENT
Senator Curren D. Price, Jr., Chair
Bill No: AB 1399 Author: Committee on Jobs,
Economic Development and the
Economy
As Introduced: March 11, 2013Fiscal: Yes
SUBJECT: Economic development.
SUMMARY: Makes technical changes to the Government Code relating to
the transfer of economic related programs from the Business,
Transportation and Housing Agency (BTH) to the Governor's Office of
Business and Economic Development (GO-Biz).
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. GO-Biz also serves as the
administrative oversight for the California Business Investment
Service and the Office of the Small Business Advocate. (Government
Code (GC) �� 12096 - 12098.5)
2)Requires BTH to administer the Economic Adjustment Assistance Grant,
funded through the United States Economic Development Administration
under Title IX of the Public Works and Economic Development Act of
1965 (Grant No. 07-19-02709 and 07-19-2709.1). Provides that all
federal moneys held in the Sudden and Severe Economic Dislocation
Grant Account within the Special Deposit Fund are transferred to the
Small Business Expansion Fund created pursuant to Section 14030 of
the Corporations Code for expenditure by BTH.
(GC � 13997.7)
This bill:
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1) Transfers administration of the Economic Adjustment Assistance
Grant and the Sudden and Severe Economic Dislocation Grant Program
from BTH to GO-Biz.
2) Renumbers within statute the following definitions (no changes have
been made to the definitions):
a) Local Economic Development Organization
b) Financial Intermediary
c) Local Economic Development Organization
d) California Council on Science and Technology
e) Regional Economic Development Organization
f) Regional Economic Development Corporation
g) Small Businesses
h) Economic Development Corporation
i) Community Development
j) Triple Bottom Line
aa) Financial Institution Capital
bb) Economic Development
cc) Community Development Intermediary
dd) Local Economic Development
ee) Microbusiness Lender
ff) Emerging Domestic Market
FISCAL EFFECT: This bill is keyed "fiscal" by Legislative Counsel.
According to the Assembly Committee on Appropriations dated May 8,
2013, this bill will result in negligible fiscal impact.
COMMENTS:
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1. Purpose. The Author is the sponsor of this measure. According to
the Author, current law places the definitions for specified
economic development terms within the code sections related to the
activities of BTH. On July 1, 2013, BTH will cease to exist and
its programs and authorities will either be eliminated or
transferred to other existing and new state government entities.
According to the Author, this bill transfers, without substantive
changes, key economic development definitions, as well as the
authority to administer the Economic Adjustment Assistance Grant
and the Severe Economic Dislocation Grant from BTH to GO-Biz.
2. 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 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
Technology, Trade and Commerce Agency 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 (cited and described
below), 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.
One key initiative of GO-Biz is the "strike teams" which can be
mobilized to help attract and/or retain specific businesses.
Strike teams are especially well suited to engage with major
employers and have been successfully activated to assist Bayer
Healthcare, Jazz Semiconductor, and Baxter Pharmaceutical to locate
and/or expand in California.
In March 2012, the Governor initiated a reorganization process to
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realign the state's administrative structure in Governor's
Reorganization Plan 2 (GRP 2). Among other changes, the GRP 2
reduced the number of state agencies by eliminating give agencies
and merging their responsibilities into three new agencies:
Government Operations; Buisness, Consumer Services and Housing; and
Transportation. Key changes include dismantling of BTH 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 (I-Bank).
3. Economic Adjustment Assistance Grant. The federal Economic
Adjustment Assistance Grant program was initially designated to be
administered through the Technology, Trade, and Commerce Agency
(TTCA), which was eliminated in 2003. Although the State
Controller retained the money for uses consistent with the federal
program, no state entity had authority to actually use the money.
In 2008, BTH was designed to administer the program and the moneys
were transferred to the California Expansion Fund to be used under
contract through the small business financial development
corporations (FDCs). BTH is now going to be eliminated and a new
administering entity needs to be provided for these programs. GRP
2 consolidates several economic development programs at GO-Biz
including contracting authority for FDCs.
4. Prior Related Legislation. AB 29 (John A. P�rez, Chapter 475,
Statutes of 2011) established GO-Biz within the Governor's Office
for the purpose of serving as the lead entity for economic strategy
and marketing of California on issues relating to business
development, private sector investment and economic growth.
SB 1259 (DeSaulnier) of 2010, would have created the Economic
Development and Job Creation Agency and require the appointed
Secretary of the Agency to develop a reorganization plan, propose a
structure for the agency, and perform specified duties relating to
economic development and job creation. ( Status: This bill was
held in the Senate Committee on Appropriations.)
AB 2287 (Bass) of 2010, would have established the Office of
Economic Development, which includes the California Business
Investment Services Program, within the then-Governor's Economic
Development Office. ( Status: This bill was held in the Assembly
Committee on Jobs, Economic Development and the Economy.)
AB 2734 (John A. Perez) of 2010 would have created the Office of
Economic Development, which includes the California Business
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Investment Services Program, within the Governor's Office.
Required the Office to serve the Governor as the lead entity for
economic strategy and marketing of California and make
recommendations to the Governor and Legislature regarding polices,
programs, and actions to advance statewide economic goals.
( Status : This measure was vetoed by the Governor in 2010. In his
veto message, the Governor indicated that he was "disappointed at
the insistence of the State Senate to make the director of this
office subject to confirmation, which inappropriately infringes on
the rights and powers of my office.")
AB 1558 (V. Manuel Perez) of 2009, would have reorganized the
state's economic development efforts by eliminating the duties of
the Secretary of Business, Transportation and Housing and transfer
modified duties to a Director and Executive Director of a renamed
Economic and Employment Development Department, which would succeed
to some of the duties of the existing Employment Development
Department. ( Status : The bill was held by the Senate Committee on
Appropriations.)
SUPPORT AND OPPOSITION:
Support:
None on file as of June 18, 2013.
Opposition:
None on file as of June 18, 2013.
Consultant:Sarah Mason