BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 2664|
|Office of Senate Floor Analyses | |
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THIRD READING
Bill No: AB 2664
Author: Irwin (D)
Amended: 6/22/16 in Senate
Vote: 21
SENATE EDUCATION COMMITTEE: 9-0, 6/29/16
AYES: Liu, Block, Hancock, Huff, Leyva, Mendoza, Monning, Pan,
Vidak
SENATE APPROPRIATIONS COMMITTEE: 7-0, 8/11/16
AYES: Lara, Bates, Beall, Hill, McGuire, Mendoza, Nielsen
ASSEMBLY FLOOR: 80-0, 5/31/16 - See last page for vote
SUBJECT: University of California: innovation and
entrepreneurship expansion
SOURCE: Author
DIGEST: 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.
ANALYSIS:
Existing law:
1)Establishes the UC, a public trust to be administered by the
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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)
2)Establishes the Donahoe Higher Education, setting forth the
mission and function of the UC designates, among other things,
UC as the primary state-supported academic agency for
research. (EC § 66010.4)
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.
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iv) Work space.
v) Laboratory space.
vi) Equipment.
b) That funds will be spent only after the uses and
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 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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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 the 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 the UC. 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, Health Care, Intelligent
Infrastructure, and Data and Democracy.
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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 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.
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Related/Prior 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 UC and established three, competitively bid, Cal-ISIs, 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.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: No
According to the Senate Appropriations Committee, 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. There is 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 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.
SUPPORT: (Verified 8/11/16)
California Chamber of Commerce
California Manufacturers and Technology Association
Computing Technology Industry Association
Lake Tahoe South Shore Chamber of Commerce
TechNet
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University of California
OPPOSITION: (Verified8/11/16)
None received
ASSEMBLY FLOOR: 80-0, 5/31/16
AYES: Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker,
Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke,
Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley,
Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Beth
Gaines, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto,
Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper,
Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim,
Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis,
Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte,
O'Donnell, Olsen, Patterson, Quirk, Ridley-Thomas, Rodriguez,
Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting,
Wagner, Waldron, Weber, Wilk, Williams, Wood, Rendon
Prepared by:Olgalilia Ramirez / ED. / (916) 651-4105
8/15/16 20:22:29
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