BILL ANALYSIS Ó AB 184 Page 1 Date of Hearing: May 13, 2015 ASSEMBLY COMMITTEE ON APPROPRIATIONS Jimmy Gomez, Chair AB 184 (Eduardo Garcia) - As Amended May 4, 2015 ----------------------------------------------------------------- |Policy |Jobs, Economic Development, |Vote:|9 - 0 | |Committee: |and the Economy | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | ----------------------------------------------------------------- Urgency: No State Mandated Local Program: NoReimbursable: No SUMMARY: This bill enacts the Small Business Technical Assistance Act of 2015, within the I-Bank under the direction of the Governor's Office of Business and Economic Development (GO-Biz) to, among other things, serve as the lead state entity for overseeing the AB 184 Page 2 state's participation with the federal California Small Business Development Center (SBDC) Program, the Women's Business Center program, the Veteran Business Outreach Center program, the Service Corps of Retired Executives (SCORE), and the Procurement Technical Assistance Cooperative Agreement program. Specifically, this bill: 1)Authorizes GO-Biz to use funding in the California Economic Development Fund, without regard to fiscal year, to provide funds for loans and matching funds. 2)Authorizes GO-Biz or any other state entity to contract with a federal small business technical assistance center. 3)Requires annual reporting on any activities that are the result of state funds being contributed to one or more of the small business technical assistance centers, including, the number of businesses assisted, number of jobs created and retained as a result of assistance, estimated amount of tax dollars generated, increase in sales reported as a result of the assistance, the amount of capital infusion obtained by the assistance, and the amount of total federal funds allocated to each region. For general tracking purposes, these reports are also required to provide information on the businesses assisted including industry sector and size of the business based on employment. Sunsets the reporting requirements on January 1, 2020. FISCAL EFFECT: Ongoing administrative costs to Go-Biz of approximately $219,000 for two positions to oversee the state's participation with the California SBDC Program. COMMENTS: AB 184 Page 3 1)Purpose. According to the author, this bill recognizes SBDCs and their role in promoting small businesses and designates GO-Biz as the lead state entity for facilitating the state's engagement with these centers. The bill also recognizes the federal requirement that SBDCs must provide a financial match in order to draw down federal funds and sets reporting requirements for the use of any state moneys. According to the author, while prior legislation proposed to codify the federal SBDC program in state statute, this bill instead establishes a state liaison for collaborating with the federal program and establishes rules for state collaborative actions. 2)Background. The SBDC program is administered by the federal Small Business Association (SBA). The SBDCs assist small businesses with financing, government contracting, business planning and management, marketing, international trade, energy efficiency and sustainability, disaster preparedness, and other business issues. Funding for the program is provided through a federal SBA population-based grant. The federal government sets aside approximately $12 million for California SBDCs annually, which represents slightly more than 11% of the national program. A dollar-for-dollar match is required to receive federal funds. The 2013-14 Budget Act included a one-time General Fund appropriation of $2 million to support SBDCs with the federal match requirement. 3)Prior legislation. AB 2670 (Medina) of 2014 was substantially similar to this bill and was held on the Suspense file in this committee. Analysis Prepared by:Misty Feusahrens / APPR. / (916) 319-2081 AB 184 Page 4