BILL ANALYSIS Ó AB 189 Page 1 Date of Hearing: April 15, 2015 ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT Brian Maienschein, Chair AB 189 (Bloom) - As Introduced January 27, 2015 SUBJECT: Arts Council: cultural districts. SUMMARY: Requires the California Arts Council to establish criteria and guidelines for state-designated cultural districts, and defines state-designated cultural districts. Specifically, this bill: 1)Requires the California Arts Council (Arts Council) to establish criteria and guidelines for state-designated cultural districts. 2)Defines a "state-designated cultural district" to mean a geographical area certified pursuant to this chapter with a concentration of cultural facilities, creative enterprises, or arts venues that does any of the following: a) Attracts artists, creative entrepreneurs, and cultural enterprises; AB 189 Page 2 b) Encourages economic development and supports entrepreneurship in the creative community; c) Encourages the preservation and reuse of historic buildings and other artistic and culturally significant structures; d) Fosters local cultural development; and, e) Provides a focal point for celebrating and strengthening the unique cultural identity of the community. 3)Requires the Arts Council, in executing its powers and duties under this chapter, to do all of the following: a) Establish a competitive application system by which a community may apply for certification as a state-designated cultural district; b) Provide technical assistance and promotional support for state-designated cultural districts; and, c) Collaborate with other public agencies and private entities to maximize the benefits AB 189 Page 3 of state-designated cultural districts. 4)Provides that initial certification as a state-designated cultural district shall be for a period of five years, after which a certified district may renew certification every three years. 5)Authorizes the Arts Council to solicit and receive gifts, donations, bequests, grant of funds, or any other revenues from public or private sources and expend those moneys, upon appropriation of the Legislature, for a state-designated cultural district program and for any other purpose it deems necessary. EXISTING LAW: 1)Creates the Arts Council, consisting of 11 members who serve four-year, staggered terms. Nine members are appointed by the Governor, subject to Senate confirmation, and the Speaker of the Assembly and the Senate Committee on Rules appoint one member each. 2)Directs the Arts Council to encourage artistic awareness, participation, and expression; to help independent local groups develop their own arts programs; to promote employment of artists and those skilled in crafts in the public and private sector; to provide for exhibition of artistic works in public buildings; and, to enlist the aid of all state agencies in the task of ensuring the fullest expression of artistic potential. FISCAL EFFECT: This bill is keyed fiscal. AB 189 Page 4 COMMENTS: 1)Bill Summary. This bill requires the Arts Council to establish criteria and guidelines for state-designated cultural districts. This bill defines a "state-designated cultural district" as a geographical area with a concentration of cultural facilities, creative enterprises, or arts venues that does any of the following: Attracts artists, creative entrepreneurs, and cultural enterprises; encourages economic development and supports entrepreneurship in the creative community; encourages the preservation and reuse of historic buildings and other artistic and culturally significant structures; fosters local cultural development; and, provides a focal point for celebrating and strengthening the unique cultural identity of the community. Under this bill, the Arts Council will establish a competitive application system, provide technical assistance and promotional support, and collaborate with other public agencies and private entities to maximize the benefits of state-designated cultural districts. This bill is sponsored by the California Arts Council. 2)Author's Statement. According to the author, "The Creative Economy is a major powerhouse of jobs and revenue in California, generating over 7% of the state's economic activity and supporting 1.4 million jobs. Whether it is music, film or visual arts, California's creative economy has long been an important part of our state's cultural and economic infrastructure. Studies have shown that creative entities and business often cluster into certain areas, likely due to the benefits from exchanging and sharing resources, entrepreneurial dialogue, and economic activity. These clusters are often well-loved parts AB 189 Page 5 of cities and can be found throughout the state. "The creative clusters around California could benefit greatly from being designated as official state cultural districts. Almost three quarters of "leisure travel" in the U.S. is spent on arts and cultural experiences. Establishing cultural districts will create resources for this sector of the tourism industry and would be very beneficial to local economies. Other states, such as Maryland, have successfully implemented their own cultural district programs and seen noticeable economic benefits for the designated areas. Arts and cultural districts in other states have spurred new business, increased community interaction, attracted more tourism, and increased government revenue based on the economic growth. "This bill would allow the California Arts Council to designate these kinds of areas as official California Cultural Districts. Establishing state-designated cultural districts will help to draw more tourism and commerce to these creative clusters. The California Arts Council is the ideal state agency to administer a cultural districts program. The main focus of the Council is to advance California through the arts and creativity, a mission that aligns with the intended purpose of cultural districts. The agency is familiar with thousands of nonprofits and supports a network of local arts agencies and arts support organizations. The Council works closely with other state and local agencies on arts and culture subjects and promotes workforce development in the creative economy. Therefore, the Council is well equipped to help future districts reach their full potential. Almost all states with arts and cultural districts programs have designated their state arts agency as the lead for their programs. Through technical support provided by the Council, the California Cultural Districts program has the potential to significantly increase tourism and encourage commerce in creative communities." AB 189 Page 6 3)Policy Considerations. The Committee may wish to consider the following: a) Applicant. The Committee may wish to ask the author to further specify what entity will be applying to the Arts Council for certification as a state-designated cultural district. This bill allows a community to apply for certification, but does not define what a community is. If the author's intent is to have local agencies - cities and counties - be the applicant, the bill should reflect that. Under existing law, many businesses choose to create a business improvement district, or specifically a tourism marketing district, to levy assessments on themselves as business owners to pay for marketing and other activities that promote tourism within the district. The Committee may wish to ask the author if the intent is also to allow business improvement districts or other similar financing districts to qualify to as an applicant. b) Funding. If the Arts Council intends to provide all of the funding from their existing budget, the Committee may wish to ask the sponsor if applicants will be required to pay for certification. Similar legislation in other states has provided financial incentives to participate. For example, Maryland's Arts & Entertainment Districts have tax-related incentives and funding through technical assistance grants. 4)Arguments in Support. Supporters argue that this bill would allow the Council to help local communities, along with their partners in the arts, community development, and municipal government to improve the quality and vitality of these areas. Additionally, cultural districts would enhance the experience AB 189 Page 7 for visitors, attracting more tourist dollars, tax revenue, and community pride. 5)Arguments in Opposition. None on file. 6)Double-Referral. This bill was heard by the Arts, Entertainment, Sports, Tourism, and Internet Media Committee on April 7, 2015, and passed with a 6-0 vote. REGISTERED SUPPORT / OPPOSITION: Support California Arts Council [SPONSOR] Arts Orange County Artspace Projects California Alliance for Arts Education California Arts Advocates AB 189 Page 8 California Association of Museums Californians for the Arts MACLA (Movimiento de Arte y Cultura Latino Americana) San Luis Obispo Symphony Theatre Bay Area Opposition None on file Analysis Prepared by:Misa Lennox / L. GOV. / (916) 319-3958 AB 189 Page 9