BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
AB 2664 (Irwin) - University of California: innovation and
entrepreneurship expansion
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|Version: June 22, 2016 |Policy Vote: ED. 9 - 0 |
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|Urgency: No |Mandate: No |
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|Hearing Date: August 1, 2016 |Consultant: Jillian Kissee |
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This bill meets the criteria for referral to the Suspense File.
Bill
Summary: This bill requires University of California (UC) to
make one-time expenditures on activities, using the $22 million
General Fund provided in the Budget Act of 2016, to expand or
accelerate economic development in the state in ways that
support innovation and entrepreneurship.
Fiscal
Impact:
The Budget Act of 2016 provides $22 million one-time General
Fund for innovation and entrepreneurship programs. This bill
provides implementation language for those funds.
Potential campus-level cost pressure to the extent the
advisory body overseeing the use of funds is unable to certify
that a chancellor of a campus has demonstrated that private
funds will be used for these activities, with the intent that
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the amount of private funds will be at least $2.2 million. It
is unclear whether expenditure of the campus' state allocation
is permissible without certification of this level of private
funds.
Background: Existing law establishes the UC as the primary state-supported
academic agency for research. According to the UC, as of June
30, 2014, it has almost 12,000 active inventions, almost 4,500
active U.S. patents; generated $118 million in royalty and fee
income for the fiscal year, and 843 companies were founded based
on UC technologies. UC startups employ over 19,000 people and
brought in $14 billion in revenue in the 2013-14 fiscal year.
In 2000, the state established the California Institutes for
Science and Innovation, through AB 2883 (Villaraigosa, Chapter
79, Statutes of 2000). The state provided start-up funds of
$400 million with the UC providing a two-to-one match from
federal and private sources. The four institutes are jointly
operated by multiple UC campuses and focus research in a number
of areas including, information technology, telecommunications,
nanotechnology, quantitative biosciences, and health and health
care delivery.
Proposed Law:
This bill requires that $2.2 million within the UC's General
Fund budget appropriation provided in the Budget Act of 2016 be
allocated to each of its 10 campuses for one-time activities to
expand or accelerate economic development in the state in ways
that support innovation and entrepreneurship.
The UC is required to designate an external advisory body to
encourage the effective use of funds through planning and
oversight. In order for a campus to spend its allocation the
advisory body must certify the campus has demonstrated all of
the following:
That funds will be used only for the costs of activities that
support expansion or acceleration of economic development in
the state, as specified;
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That funds will be spent only after the uses and beneficiaries
have been determined through a transparent, inclusive, and
fair process;
That private funds will also be used for these activities,
with the intent that the amount will be at least equal to the
campus' state allocation of $2.2 million;
That any financial benefit that results from the use of these
funds be accounted for and also used on these activities; and
That a credible plan has been developed to support any ongoing
activities beyond the one-time expenditures of these funds.
The advisory body is required to notify the Director of Finance
and the Legislature before providing certification of the above
elements. By November 30, 2017, the UC Regents must report to
the Director of Finance and the Legislature on the specific
activities at each campus supported by these funds.
Staff
Comments: 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."
Specifically, these funds would be used to support the creation
of startups amongst students, faculty, and other innovators
based on research already completed. This bill authorizes the
use of funds on business training, mentorship, proof-of-concept
grants, work space, laboratory space, and equipment.
This bill also requires the advisory body to certify that each
chancellor of a campus has demonstrated a number of things,
including that a credible plan has been developed to support any
ongoing activities beyond the one-time expenditure of state
funds. This requirement mitigates state pressure to fund
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ongoing activities.
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