BILL ANALYSIS Ó
SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
Senator Isadore Hall, III
Chair
2015 - 2016 Regular
Bill No: AB 582 Hearing Date: 6/28/2016
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|Author: |Calderon |
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|Version: |6/15/2016 Amended |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant:|Felipe Lopez |
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SUBJECT: Entrepreneur-in-Residence Act of 2016
DIGEST: This bill enacts the Entrepreneur-in-Residence (EIR)
Act of 2016, which would establish the state EIR program within
the Government Operations Agency (GOA) for the purpose of
utilizing the expertise of private-sector entrepreneurs to help
make state governmental activities and practices more
streamlined and accessible.
ANALYSIS:
Existing law:
1)Establishes the GOA, within the Governor's office, which
consists of several state agencies, including the Department
of General Services and the Department of Technology.
2)Finds and declares that it is in the public interest to aid,
counsel, assist, and protect the interest of small business
concerns in order to maintain a healthy state economy.
This bill:
1)Enacts the EIR Act of 2016, which would establish the state
EIR program within the GOA for the purpose of utilizing the
expertise of private-sector entrepreneurs to help make state
governmental activities and practices more streamlined and
accessible.
AB 582 (Calderon) Page 2 of ?
2)Specifies that the GOA may appoint one or more EIRs under the
program during each year, however, the GOA shall not appoint
more than 10 EIRs during any calendar year.
3)Specifies that the GOA, with the approval of the state agency,
may appoint an EIR to any state agency.
4)Specifies that any person appointed as an EIR shall meet at
least one of the following qualifications:
a) The individual shall have demonstrated success in
working with California small businesses and entrepreneurs.
b) The individual shall have successfully developed,
invented, or created a product and brought the product to
the marketplace.
5)Prohibits any person appointed as an EIR in having a conflict
of interest with the activities of the state agency where he
or she is placed, including, but not limited to, having any
existing business before the state agency in which he or she
is proposed to be placed or is placed.
6)Requires the GOA to accept appointment applications for the
position of an EIR and to establish procedures for complying
with this bill no later than March 1, 2017. Among other
requirements, the procedures shall include the following:
a) A process for engaging with and receiving approval from
state agencies about prospective appointments.
b) A process for screening prospective appointees,
including checking background and references.
c) A standard memorandum of understanding that stipulates
the responsibilities of each party in undertaking an EIR
under the program, including, but not limited to, hours,
duties, goals, expected outcomes, agency support, and
office participation. This standard memorandum of
understanding shall be a model that shall be adapted to
address each individual placement to create the memorandum
of understanding into which the appointee, the agency, and
the office enter. As a condition of having a placement of
an EIR, the state agency shall agree to the memorandum.
7)Requires every individual selected to participate in the
program, before the effective date of an appointment, to enter
AB 582 (Calderon) Page 3 of ?
into a memorandum of understanding with the secretary of the
GOA and the head of the state agency where the entrepreneur
will serve. The memorandum of understanding shall be specific
to the placement and clearly identify the hours, duties,
goals, expected outcomes, agency support, and office
participation. The memorandum of understanding shall set the
benchmarks and metrics for evaluating the success of the
placement.
8)Specifies that in administering the EIR program, the GOA shall
appoint EIRs in a variety of interested agencies. However, to
the extent practicable, the secretary shall not appoint more
than two EIRs to positions in the same agency during the same
year.
9)Prohibits an EIR from serving as an EIR for no longer than two
years.
10) Requires an EIR to have all of the following duties:
a) Providing recommendations to the head of the state
agency where the EIR serves on how to streamline,
eliminate, or modify potentially inefficient or
duplicative activities, processes, and programs, if any,
at the state agency.
b) Providing recommendations to the head of the state
agency where the EIR serves on methods to improve program
efficiency at the state agency or new initiatives, if any,
that may be instituted at the state agency to address the
needs of small businesses and entrepreneurs.
c) Assisting the state agency in improving outreach and
service to small business concerns and entrepreneurs
including, but not limited to, the following:
i) Facilitating meetings and forums to educate
small businesses and entrepreneurs on programs or
initiatives of the state agency the EIR is serving.
ii) Facilitating in-service sessions with employees
of the office and the state agency the EIR is serving
on issues of concern to entrepreneurs and small
businesses.
iii) Providing technical assistance or mentorship to
small businesses and entrepreneurs in accessing
programs at the office and the state agency the EIR is
serving.
AB 582 (Calderon) Page 4 of ?
11) Requires an EIR to serve on a voluntary basis, and shall
dedicate at least 16 hours per week to the program, unless a
greater number of hours per week is otherwise agreed upon.
At the discretion of the head of a participating state
agency, the EIR shall have access to an office, computer,
and other related support services and equipment from the
participating state agency as the state agency determines to
be necessary for the EIR to discharge his or her duties.
12) Requires the EIR to report directly to the head of the
state agency in which the EIR is serving and shall also keep
the secretary of the GOA updated on his or her activities,
findings, and recommendations.
13) Requires the GOA to establish an informal working group of
EIR to discuss best practices, experiences, obstacles,
opportunities, and recommendations.
14) Requires the GOA to annually prepare and submit to the
Governor and the Assembly Committee on Jobs, Economic
Development, and the Economy a report on the program. The
report, at a minimum, shall include the following:
a) A progress report on the activities of each EIR during
the reporting period, based on the applicable memorandum
of understanding.
b) A general summary on how the overall program is
addressing the goals of the program, which are as follows:
i) Making state programs simpler, easier to access,
more efficient, and more responsive to the needs and
concerns of small businesses and entrepreneurs.
ii) Providing for better outreach by the state to
the private sector.
iii) Strengthening coordination and interaction
between the state and the private sector on issues
relevant to entrepreneurs and small business concerns.
15) Specifies that the requirement for submitting a report
imposed by this bill, shall become inoperative on January 1,
2021.
16) States that it is anticipated that program impacts will
not be fully measurable until recommended changes and
AB 582 (Calderon) Page 5 of ?
activities are fully implemented.
17) Requires the office and the agency where an EIR is placed
to continue to measure and report the impact of the
activities of the EIR for three years following the
placement of an EIR.
Background
Purpose of the bill. The author argues that, "without practical
experience with the limited administrative capacity in which
many small businesses operate or a realistic method for small
businesses to participate in the regulatory process, it is
difficult for state agencies to adopt rules that are considerate
of needs of these smaller size businesses while still meeting
the intended policy requirements."
Quality of the EIR Program. The bill currently specifies that
the EIR program is completely voluntary and that an EIR is
required to volunteer a minimum of 16 hours per week. Without
any compensation, and being required to work a minimum of 16
hours per week, it is hard to imagine that too many successful
entrepreneurs would volunteer for such an assignment.
In addition, the bill currently prohibits an EIR from being
placed in a state agency where the EIR might have a conflict of
interest. While understandable, the prohibition does diminish
the knowledge that such an EIR would provide for the state. If
the EIR is prohibited from volunteering in the state agency
where he/she would realistically have more of an expertise, are
we not then diminishing the role of an EIR?
Similar EIR Programs. EIR Programs are not necessarily a new
idea and have been used in the investment and business world for
decades. The use of EIR Programs to help government agencies is
more recently gaining traction. As an example, in 2012, the
Federal Drug Administration (FDA) established an EIR Program to
attract seasoned entrepreneurs in the medical industry that had
successfully navigated the FDA's regulatory process. The six to
seven month program was designed to help the FDA and small
businesses work together to introduce new products in the
marketplace both quickly and safely. The FDA not only improved
processes, FDA staff also gained a better understanding of the
challenges small businesses face and how to better network with
entrepreneurs in the future.
AB 582 (Calderon) Page 6 of ?
In another example, U.S. Citizenship and Immigration Services
(USCIS) established an EIR initiative with the goal of
recruiting a small "tactical team" of business experts to work
with USCIS staff to help streamline operations and enhance
pathways within existing immigration law to help immigrant
entrepreneurs start and grow businesses in the U.S. This was a
90-day project, which also included the other entities within
the Department of Homeland Security and was a component of the
White House Startup America initiative.
Prior/Related Legislation
SB 1140 (Moorlach, 2016) would have required the automatic
repeal of a statute that expressly or implicitly authorizes an
executive agency to promulgate regulations two years after the
statute goes into effect, unless the Legislature amends the
statute to state its intent that the statute not be repealed, or
unless the statute was passed in response to an emergency, as
defined. (Failed passage in Senate Governmental Organization
Committee)
AB 12 (Cooley, 2015) would have required every state agency to
review all provisions of the California Code of Regulations it
has adopted, and to adopt, amend, or repeal any regulations
identified as duplicative, overlapping, or out of date by
January 1, 2018. (Held on Senate Appropriations Suspense File)
AB 1675 (Calderon, 2014) would have established the EIR program
within the Governor's Office of Business and Economic
Development to provide private sector expertise and assistance
to help make government activities and practices streamlined and
accessible to small business. (Held on Senate Appropriations
Suspense File)
SB 981 (Huff, 2014) would have required each state agency to
review each regulation adopted prior to January 1, 2014, and to
develop a report to the Legislature containing prescribed
information. (Failed passage in Senate Governmental
Organization Committee)
FISCAL EFFECT: Appropriation: No Fiscal
Com.: Yes Local: No
AB 582 (Calderon) Page 7 of ?
SUPPORT:
TechNet
OPPOSITION:
None received
ARGUMENTS IN SUPPORT: According to TechNet, "This bill is a
great step in the right direction to support and encourage some
of the best and brightest minds in the private and small
business sectors to help positively influence the operation and
business processes and procedures at the governmental agency
level. AB 582 is a win-win for all involved and we believe will
not only provide the benefit to the public sector, but will move
to incent small business, private sector executives to build,
maintain and enhance their businesses in the State of
California."