BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
AB 2900 (Committee on Jobs, Economic Development, and the
Economy) - Small business technical assistance centers
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|Version: May 27, 2016 |Policy Vote: B., P. & E.D. 9 - |
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|Urgency: No |Mandate: No |
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|Hearing Date: August 1, 2016 |Consultant: Robert Ingenito |
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This bill meets the criteria for referral to the Suspense File.
Bill
Summary: AB 2900 would, for contracts awarded between September
1, 2017, and December 31, 2021, require a state department that
awards state funds to a federal small business technical
assistance center to report annually on the outcomes of those
contracts.
Fiscal
Impact: The total fiscal impact of this bill is unknown, but
could exceed $150,000 annually (General Fund and/or special
funds). Administrative costs would likely total in the tens of
thousands of dollars per contract for agencies to report
outcomes of state funds provided to federal small business
technical assistance centers. Actual costs would depend on the
existing ability of these federal centers to track data.
AB 2900 (Committee on Jobs, Economic Development, and the
Economy) Page 1 of
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Background: The Small Business Development Center (SBDC) program is
sponsored by the United States Small Business Administration
(SBA) and functions as a cooperative effort of the private
sector, the educational community, and federal, state, and local
governments. Formal management of the partnership is provided
through the six Administrative Lead Centers that are designated
by and responsible to the SBA. Each Administrative Lead Center
serves a specific geographic area compromised of several SBDCs.
The California SBDC network serves businesses throughout
California with over 40 permanent and satellite offices.
The SBDCs facilitate the creation, expansion, and retention of
businesses. Each SBDC provides one-on-one counseling,
workshops, advisory services, and referrals to prospective and
existing business owners. The SBDCs assist with financing,
government contracting, business planning and management,
marketing, international trade, energy efficiency and
sustainability, disaster preparedness, and other business
issues. Each Administrative Lead Center has its own resources
and maintains links with other public and private small business
service providers in the region, such as financial institutions,
local workforce investment boards, economic development
corporations, as well as federal, state, and local government
entities.
There are also SBDCs which specialize in assisting
technology-based companies with advice and training on angel and
venture capital presentation preparation, funding strategies,
product positioning, market launch strategies, applications for
federal grants, technology transfers with research universities,
intellectual property issues, and strategic partnerships.
In 2014, the California SBDC network reported that they had
advised more than 60,000 clients and helped these small
businesses raised over $500 million in capital through its core
small business advising and training program, as well as through
its array of specialty programs.
AB 2900 (Committee on Jobs, Economic Development, and the
Economy) Page 2 of
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Proposed Law:
This bill would, among other things, do the following:
Require a state department that awards state funds, as
defined, to a federal small business technical assistance
center to report annually on the outcomes of the those
contracts, including (1) the purpose of the contract and
contract metrics, (2) the amount of state funds awarded and
expended during the report year, and (3) specified
information about the businesses served and the outcomes
from that assistance provided by the federal small business
technical assistance center, as defined, including:
o The amount of federal funds drawn down as a result
of funding through the state contract.
o The total number of businesses assisted.
o The number of businesses assisted by industry
sector, as reported by the businesses.
o The number of businesses assisted by city and
county. If the population of the county is less than
250,000, only the name of the county is required to be
reported.
o The number of businesses assisted based on the
following categories: no employees, five or fewer
employees, 25 or fewer employees, 100 or fewer employees,
and between 101 and 500 employees, as reported by the
businesses.
o If job creation is one of the purposes of the
program, the total number of jobs created and the total
number of jobs retained, as reported by the business.
AB 2900 (Committee on Jobs, Economic Development, and the
Economy) Page 3 of
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o Other program outcomes related to the purpose of the
program and contract metrics, as determined by the
reporting department.
Require the report to the Legislature be submitted in
compliance with state reporting and that a copy of the
report be posted on the Internet Web site of the awarding
department.
Provide that to the extent that any provision of this
bill conflicts with a federal regulation or law, the
provision in this bill will be inoperable.
Authorize a department to include these reporting
requirements as part of any other annual report as an
alternative to submitting a separate report. If the agency
chooses to include the information within a separate
report, deadline for submission may be modified for up to
three months.
Specify that (1) this chapter applies to contracts
awarded on or after September 1, 2017 and before December
31, 2021, and (2) sunsets these reporting requirements on
January 1, 2022.
Related
Legislation:
AB 184 (E. Garcia) of 2015 proposed to enact the Small
Business Technical Assistance Act of 2015, within the
I-Bank under the direction of GO-Biz to, among other
things, serve as the lead state entity for overseeing the
state's participation with the federal California Small
AB 2900 (Committee on Jobs, Economic Development, and the
Economy) Page 4 of
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Business Development Center (SBDC) Program, the Women's
Business Center program, the Veteran Business Outreach
Center program, the Service Corps of Retired Executives
(SCORE), and the Procurement Technical Assistance
Cooperative Agreement program. The bill was held under
submission on the Suspense File of the Assembly
Appropriations Committee.
.AB 2670 (E.Garcia) of 2014 designated the Governor's
Office of Business and Economic Development (GO-Biz) to
serve as the lead state entity for overseeing California's
participation in the federal California Small Business
Development Center Program, the Women's Business Center
program, the Veteran Business Outreach Center program, the
Service Corps of Retired Executives (SCORE), and the
Procurement Technical Assistance Cooperative Agreement
program. The bill was held under submission on the Suspense
File of the Assembly Appropriations Committee.
Staff
Comments: Funding for the program is provided through a federal
SBA population-based grant. In order to draw down these funds,
each Administrative Lead Center must provide a dollar-for-dollar
match. The federal government sets aside approximately $13
million for California SBDCs annually, which represents slightly
more than 11 percent of the national program. Since the demise
of the Technology, Trade, and Commerce Agency in 2003,
California has only received the full amount of eligible federal
funds once (FY 2010-11 after the passage of the budget in AB
1632 [Assembly Committee on Budget, Chapter 731, Statutes of
2010] which included $6 million in state monies for the SBDCs).
The 2014-15 and the 2015-16 state budgets included $2 million in
General Fund assistance for contracts with the SBDCs to assist
small businesses in accessing capital. Grant agreements were
awarded to 34 SBDCs in September 2014, covering activities
AB 2900 (Committee on Jobs, Economic Development, and the
Economy) Page 5 of
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beginning October 1, 2014 through September 30, 2015. In the
first year of the program, the Capital Infusion Program resulted
in $202,645,464 in documented capital infusion, exceeding the
capital infusion goal for the program by more than 50 percent.
The program served 9,702 small business owners across the state.
This bill would require more in-depth reporting on geographic
regions being served by the program, intended to capture
information that could, for example, allow a member of the
Legislature and the public to see whether businesses in a
certain part of the state were being served under the state
contract.
Departments and agencies that may be subject to requirements of
this bill include: the Employment Development Department, High
Speed Rail, CalTrans, Department of General Services and GO-Biz.
The total amount of contracts and agencies subject to this
reporting requirement is unknown. However, assuming one contract
per agency, total costs across all departments could be in the
low hundreds of thousands of dollars annually.
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