BILL ANALYSIS Ó
SENATE COMMITTEE ON EDUCATION
Senator Carol Liu, Chair
2015 - 2016 Regular
Bill No: AB 2664
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|Author: |Irwin |
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|Version: |June 22, 2016 Hearing |
| |Date: June 29, 2016 |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant:|Olgalilia Ramirez |
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Subject: University of California: innovation and
entrepreneurship expansion
SUMMARY
This bill requires the University of California (UC) to make
one-time expenditures, with funds appropriated in Budget Act of
2016, for activities to expand or accelerate economic
development in the state in ways that are aligned with efforts
to support innovation and entrepreneurship.
BACKGROUND
The California Constitution establishes the UC, a public trust
to be administered by the Regents of the UC and grants the
Regents full powers of organization and government, subject only
to such legislative control as may be necessary to insure
security of its funds, compliance with the terms of its
endowments, statutory requirements around competitive bidding
and contracts, sales of property and the purchase of materials,
goods and services. (Article IX, Section (9)(a) of the
California Constitution)
Existing law establishes the Donahoe Higher Education, setting
forth the mission and function of the University of California
designates, among other things, UC as the primary
state-supported academic agency for research. (EC § 66010.4)
ANALYSIS
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This bill requires the UC to make one-time expenditures, with
funds appropriated in the Budget Act of 2016, for activities to
expand or accelerate economic development in the state in ways
that are aligned with efforts to support innovation and
entrepreneurship. Specifically it:
1) Identifies a specific funding source in the Budget Act of
2016 and allocates $2 million from that source to each of
the 10 campuses of the UC.
2) Requires the Regents of the UC to designate an external
advisory body, whose members have demonstrated expertise
innovation and entrepreneurship, to encourage the effective
use of specified funds through planning and oversight. The
external advisory body must notify the Director of Finance
and the Legislature of its intent to certify, no fewer than
10 days before providing certification.
3) Prohibits a campus from expending funds until the external
advisory body has certified that the chancellor of the
campus has demonstrated all of the following:
a) That the funds will be used only for the costs of
activities that support the
expansion or acceleration of economic development in
the state
benefitting entrepreneurs, such as any of the
following:
i) Business training.
ii) Mentorship.
iii) Proof-of-concept grants.
iv) Work space.
v) Laboratory space.
vi) Equipment.
b) That funds will be spent only after the uses and
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beneficiaries have been
determined through a transparent, inclusive and fair
process.
c) That private funds will also be used for the
specified activities, with the
intent that the amount of private funds will be at
least equal to the amount of state funds.
d) That any financial benefit that results from the
use of these funds be
accounted for and also used on the specified
activities, as described.
e) That a credible plan has been developed to
support any ongoing activities
beyond the one-time expenditures of these funds.
4) Requires the University of California (UC) to report to the
Department of Finance and the Legislature on or before
November 30, 2017, on the specific activities at each
campus as specified.
5) Makes various findings and declarations relative to the
UC's position in addressing challenges faced by
entrepreneurs that are particularly acute for
underrepresented groups and the state's ability to harness
the power of the UC's expertise in this field to spur
economic development.
6) States that it is the intent of the Legislature to:
a) Provide one-time funds for new infrastructure at
each campus.
b) Enhance the state's network of programs
and services that support innovators, entrepreneurs,
startups, investors, and industry and community
partners that are locally based and committed to
serving in communities across California.
c) Generate commitments of private funds for these
activities in the amount
at least equal to the amount of state funds.
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STAFF COMMENTS
1) Need for the bill. The Budget bill, SB 826 (Leno, Budget
Act of 2016), provides $22 million for innovation and
entrepreneurship efforts at University of California (UC).
This bill provides implementation language for that
purpose. According to the author, "the goal of the funding
is to aid researchers who have innovations that can be
taken to market by providing the institutional resources
and expertise needed to get it to the next level." The
author contends that entrepreneurship in California is
declining and investments are needed in order to keep pace
with the demand for innovation and entrepreneurial
infrastructure, resources and support programs. This bill
seeks to leverage UC research to spur economic development
in the state by laying a foundation for innovation and
entrepreneurship at each UC campus.
2) Related activities at University of California.
The UC system, as the research arm of the state, has
historically played a significant and foundational role
within California's innovation-based industries. In 2000,
the state through AB 2883 (Villaraigosa, Chapter 79,
Statutes of 2000) established the California Institutes
for Science and Innovation (Cal-ISIs) at the UC for the
purpose of accelerating business growth in the state,
developing research and innovations to meet California's
needs and training future scientist. At that time, the
state provided start-up funds of $400 million for the
Cal-ISIs with the UC providing a 2-to-1 match from a
combination of business and federal sources. Four centers
were established as a result of this investment, which
include the following:
a) Center for Information Technology Research in
the Interests of Society (CITRIS) which is
headquartered at UC, Berkeley with partnerships and
collaborations to researchers at UC, Santa Cruz, UC,
Davis, UC Merced and over 60 corporations. It creates
information technology solutions for pressing social,
environmental and healthcare problems. Research at
CITRIS focuses on four core initiatives: Energy,
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Health Care, Intelligent Infrastructure, and Data and
Democracy.
b) California Nanosystems Institute at UC, Los
Angeles and UC, Berkeley seeks technological
breakthroughs by understanding of how to manipulate,
control and manufacture at the nanometer scale.
Control of material at this scale allows for compact,
complex and multifunctional systems at the macro-scale
that can dramatically improve present-day
communications, computation, medical therapies and
environmental remediation.
c) California Institute for Telecom and
Information Technology at UC, San Diego and UC, Irvine
focuses its research on Enabling Technologies
(Wireless, Photonics, Cyber infrastructure,
Nanotechnology/MEMS) to realize the goals of its
socially relevant Application Thrusts (Culture,
Energy, Environment, Health).
d) California Institute for Quantitative
Biosciences (QB3) at UC, Berkeley, UC, San Francisco,
UC, Santa Cruz and UC, Davis covers the "quantitative
biosciences," meeting challenges in molecular biology
using the techniques of physics, chemistry, and
computer sciences. This enables UC to convert life
science research into solutions for better health, a
sustainable environment, and a dynamic economy. QB3
has built a matrix of support for entrepreneurs that
include a renowned incubator network and a venture
capital fund.
The state continues to reap the benefits of this original
investment. For example the QB3 program has helped to
incorporated over 250 companies, provided work space for
over 100 companies and raised $36 million in seed venture
funds. In 2014, active UC startups based in California
employed over 19,000 Californians and brought in more than
$14 million in revenue.
In addition to using state funds for similar activities,
this bill requires UC to generate commitments of private
monies and encourages that the amount of private funds
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match the amount of state funds.
1) Related budget activity. The Budget Act of 2016 includes
$22 million on a one-time basis for innovation and
entrepreneurship. As noted, this bill provides
implementation language for those funds.
2) Prior and related legislation.
SB 826 (Leno, Budget Act of 2016) provides $22 million in a
one-time basis for innovation and entrepreneurship programs
pursuant to legislation enacted in the 2015-16 legislative
session.
AB 2883 (Villaraigosa, Chapter 79, Statutes of 2000)
authorized the University of California and established
three, competitively bid, California Institutes for Science
and Innovation, which would be devoted to basic and applied
cross-disciplinary research, focusing on problems of
significant scale and on scientific advances that may
provide the underpinnings of future economic activity in
California.
SUPPORT
California Chamber of Commerce
California Manufacturer and Technology Association
Computing Technology Industry Association (CompTIA)
Late Tahoe South Shore Chamber of Commerce TechNet
University of California
OPPOSITION
None received.
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