Amended in Senate June 22, 2016

Amended in Assembly April 26, 2016

Amended in Assembly March 17, 2016

California Legislature—2015–16 Regular Session

Assembly Bill No. 2664

Introduced by Assembly Member Irwin

February 19, 2016

An act to add Chapter 14.5 (commencing with Section 92965) to Part 57 of Division 9 of Title 3 of the Education Code, relating to the University of California.

LEGISLATIVE COUNSEL’S DIGEST

AB 2664, as amended, Irwin. University of California: innovation and entrepreneurship expansion.

Existing law establishes the University of California, under the administration of the Regents of the University of California, as one of the segments of public postsecondary education in this state. The University of California comprises 10 campuses, which are located at Berkeley, Davis, Irvine, Los Angeles, Merced, Riverside, San Diego, San Francisco, Santa Barbara, and Santa begin delete Cruz, and other facilities operated by the university, including the Lawrence Berkeley National Laboratory (LBNL). end delete begin insert Cruz. end insert

This bill would require the University of California to begin delete expand the infrastructure necessary to increase innovation and entrepreneurship activities across the state for the purpose of creating economic development. The bill would specify that funds appropriated for that purpose shall be used to fund innovation and entrepreneurship programs as each of the university’s campuses, the LBNL, and in other areas of the state that may benefit from those programs, but would require the university to determine the manner in which the funding would be used, consistent with the bill’s provisions. In implementing these provisions, the bill would require the university to consult with public and private stakeholders and to design programs to enhance, not necessarily duplicate, the state’s network of innovation-based business development programs and services. end delete begin insert make one-time expenditures for activities to expand or accelerate economic development in the state in ways that are aligned with other efforts to support innovation and entrepreneurship. The bill would identify a specific funding source in the Budget Act of 2016 appropriated for that purpose and would allocate $2,200,000 under that appropriation to each of 10 campuses of the University of California. The bill would require the regents to designate an external advisory board, as provided, to encourage the effective use of these funds through planning and oversight and would prohibit a campus from expending these funds unless the external advisory body has certified that the chancellor of that campus has made certain demonstrations, including, among others, that funds will only be used for the costs of activities that support the expansion or acceleration of economic development in the state and that private funds that at least match the amount of state funds will also be used on those activities. end insert The bill would require the University of California to report to the Department of Finance and the Legislature begin delete annually on the use of the funding provided for purposes of the bill, as specified. The bill would make implementation of its provisions contingent on an appropriation for its purposes in the annual Budget Act. end delete begin insert on or before November 30, 2017, on the specific activities at each campus supported by these funds. end insert

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

With respect to innovation and entrepreneurship
begin delete expansion at end delete begin insert by those connected to end insert the University of California,
the Legislature finds and declares all of the following:

(a) The State of California is well-positioned to harness the
power of the University of California’s expertise to spur economic
development.

(b) The University of California contributed to the begin delete foundational
research breakthroughs that launched end delete begin insert launch and growth of end insert some
of California’s strongest industries, including aerospace,
agriculture, biotechnology, computers and semiconductors,
telecommunications, and digital media.

(c)  begin delete Research end delete begin insert Instruction and research end insert at the University of
California begin delete continues to create new inventions that will end delete begin insert can end insert be the
genesis of tomorrow’s industries, companies, and commercial
successes.

begin delete

(d) Innovation and entrepreneurship at the University of
California create equitable economic development throughout
California.

end delete begin insert

(d) As a public institution of higher education, the University
of California is positioned to address challenges faced by
entrepreneurs--challenges that are particularly acute for groups
such as women and minorities who are typically underrepresented
in private incubators and accelerators.

end insert

(e) It is therefore the intent of the Legislature to provide begin insert one-time end insert
funds begin delete to establish or expand the end delete begin insert for new end insert infrastructure at each
campus begin delete and the Lawrence Berkeley National Laboratory (LBNL)
for purposes of enhancing end delete begin insert to (1) enhance end insert the state’s network of
programs and services that support innovators, entrepreneurs,
startups, investors, and industry and community partners begin insert that are
locally based and committed to serving end insert in communities begin delete surrounding
University of California campuses, the LBNL, and across
California. end delete begin insert across California and (2) generate commitments of
private funds for these activities in an amount at least equal to the
amount of state funds. end insert

SEC. 2.  

Chapter 14.5 (commencing with Section 92965) is
added to Part 57 of Division 9 of Title 3 of the Education Code,
to read:

 

Chapter  14.5. Innovation and Entrepreneurship
Expansion

 

92965.  

(a) With funds appropriated begin delete for purposes of this
chapter, end delete begin insert in Item 6440-001-0001 of Section 2.00 of the Budget Act
of 2016, end insert the University of California shall begin delete increase innovation and
entrepreneurship activities across the state for the purpose of
creating economic development. end delete begin insert make one-time expenditures for
activities to expand or accelerate economic development in the
state in ways that are aligned with other efforts to support
innovation and entrepreneurship. end insert

begin delete

(b) The funds referenced in subdivision (a) shall be used to fund
innovation and entrepreneurship programs at each campus of the
University of California, the Lawrence Berkeley National
Laboratory (LBNL), and in other areas of the state that may benefit
from these programs.

(c) The manner in which the funds provided for purposes of this
chapter will be used shall be determined by the University of
California. These uses may include, but shall not necessarily be
limited to, the establishment of programs or projects and the
purchase of equipment to facilitate innovation-based economic
development in communities surrounding the 10 campuses of the
University of California, the LBNL, and other locations across
California for purposes such as any of the following:

(1) Providing business training and resources to reduce common
barriers to success for entrepreneurs and startup companies.

(2) Offering subsidized work and laboratory space to startups
for prototype development, proof-of-concept research, or both.

(3) Providing proof-of-concept funding to increase the likelihood
that entrepreneurs and startup companies will attract venture or
corporate capital backing.

(4) Providing mentorship, including mentorship to individuals
from population groups who have historically been
underrepresented in science and innovation-based industries.

(5) Coordinating and aligning innovation functions at a campus
of the university or at the LBNL, and building relationships
between the university environment and successful, independent
enterprises to facilitate the rollout of products to the market and
the public.

(d) In implementing this chapter, the University of California
shall design programs to enhance, not necessarily duplicate, the
state’s network of innovation-based business development
programs and services. The University of California shall also
consult with public and private stakeholders when implementing
this chapter in order to ensure programs authorized by this chapter
strengthen the state’s entrepreneurial capacity and global
competitiveness. This may include new partnerships and initiatives
with public and private economic development entities, including,
but not limited to, local and regional economic development
corporations, small business development centers, business
accelerators, and Innovation Hubs.

end delete begin insert

(b) From the funds specified in subdivision (a), two million two
hundred thousand dollars ($2,200,000) shall be allocated to each
of the following campuses of the University of California:

end insert begin insert

(1) Berkeley.

end insert begin insert

(2) Davis.

end insert begin insert

(3) Irvine.

end insert begin insert

(4) Los Angeles.

end insert begin insert

(5) Merced.

end insert begin insert

(6) Riverside.

end insert begin insert

(7) San Diego.

end insert begin insert

(8) San Francisco.

end insert begin insert

(9) Santa Barbara.

end insert begin insert

(10) Santa Cruz.

end insert begin insert

(c) The Regents of the University of California shall designate
an external advisory body, whose members have demonstrated
expertise in innovation and entrepreneurship, to encourage the
effective use of the funds specified in subdivision (b) through
planning and oversight.

end insert begin insert

(d) A campus shall not expend the funds specified in subdivision
(b) until the external advisory body has certified that the chancellor
of the campus has demonstrated all of the following:

end insert begin insert

(1) That the funds will be used only for the costs of activities
that support the expansion or acceleration of economic
development in the state, such as any of the following benefits for
entrepreneurs:

end insert begin insert

(A) Business training.

end insert begin insert

(B) Mentorship.

end insert begin insert

(C) Proof-of-concept grants.

end insert begin insert

(D) Work space.

end insert begin insert

(E) Laboratory space.

end insert begin insert

(F) Equipment.

end insert begin insert

(2) That the funds will be spent only after the uses and
beneficiaries have been determined through a transparent,
inclusive, and fair process.

end insert begin insert

(3) That private funds will also be used for these activities, with
the intent that the amount of private funds will be at least equal
to the amount specified in subdivision (b).

end insert begin insert

(4) That any financial benefit that results from the use of these
funds, including any revenues generated with these funds be
accounted for and also used on these activities.

end insert begin insert

(5) That a credible plan has been developed to support any
ongoing activities beyond the one-time expenditures of these funds.

end insert begin insert

(e) The external advisory body shall notify the Director of
Finance and the Legislature, no fewer than 10 days before
providing certification pursuant to subdivision (d) of its intent to
do so.

end insert begin insert

(f) (1) On or before November 30, 2017, the Regents of the
University of California shall report to the Director of Finance
and the Legislature on the specific activities at each campus
supported by these funds.

end insert begin insert

(2) The report shall be submitted to the Legislature pursuant
to Section 9795 of the Government Code.

end insert

begin delete

92966.  

(a) The University of California shall report to the
Department of Finance and the Legislature annually on the use of
the funding provided for purposes of this chapter.

(b) (1) The annual report shall include, at a minimum, all of
the following:

(A) The number of businesses and entrepreneurs assisted.

(B) The industry sectors of the businesses and entrepreneurs
assisted.

(C) The cities in which the businesses and entrepreneurs assisted
are located. For businesses or entrepreneurs assisted in cities with
a population of less than 250,000, only the county shall be listed.

(D) The number of total employees employed by the businesses
and entrepreneurs assisted at the time those businesses and
entrepreneurs were assisted, based on the following categories,
whichever is the most appropriate:

(i) No employees.

(ii) Five employees or fewer.

(iii) Twenty employees or fewer.

(iv) Under 50 employees.

(v) Under 100 employees.

(vi) Under 500 employees.

(E) The number of jobs created and the number of jobs retained.

(F) The amount of capital infusion, in both debt and equity,
obtained by businesses and entrepreneurs assisted.

(2) Subparagraphs (D) to (F), inclusive, shall be reported on an
aggregated basis.

(c) The annual report shall comply with Section 9795 of the
Government Code.

92967.  

This chapter shall not be implemented unless funds are
appropriated for its purposes in the annual Budget Act.

end delete