BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 2900|
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THIRD READING
Bill No: AB 2900
Author: Committee on Jobs, Economic Development, and the
Economy
Amended: 8/15/16 in Senate
Vote: 21
SENATE BUS., PROF. & ECON. DEV. COMMITTEE: 9-0, 6/20/16
AYES: Hill, Bates, Block, Gaines, Galgiani, Hernandez,
Jackson, Mendoza, Wieckowski
SENATE APPROPRIATIONS COMMITTEE: 7-0, 8/11/16
AYES: Lara, Bates, Beall, Hill, McGuire, Mendoza, Nielsen
ASSEMBLY FLOOR: 79-0, 6/1/16 - See last page for vote
SUBJECT: Small business technical assistance centers
SOURCE: Author
DIGEST: This bill requires a state department that awards state
funds to a federal small business technical assistance center to
report annually on the outcomes of those contracts. The bill
also creates three additional disclosure requirements for the
California Competes Tax Credit Program (CCTC Program) under the
Governor's Office of Business and Economic Development (GO-Biz).
ANALYSIS:
Existing law:
AB 2900
Page 2
1)Establishes GO-Biz to serve as the lead state entity for
economic strategy and marketing of California on issues
relating to business development, private sector investment,
and economic growth. (Government Code (GC) §§ 12096 -
12098.5)
2)Establishes the Office of Small Business Advocate (OSBA)
within the GO-Biz to advocate the causes of small business and
to provide small businesses with the information necessary to
survive in the marketplace. (GC §§ 12098 - 12098.9)
3)Requires GO-Biz to post information on its website relating to
the CCTC Program including: (Revenue and Taxation Code (RTC)
§ 17059.2 and § 23689)
a) The name of each taxpayer allocated a credit pursuant to
this section
b) The estimated amount of the investment by each taxpayer;
c) The estimated number of jobs created or retained;
d) The amount of the credit allocated to the taxpayer; and
e) The amount of the credit recaptured from the taxpayer,
if applicable.
1)Requires that priority for the CCTC Program be given to
applications from taxpayers with projects or businesses
located in high unemployment or high poverty areas. (RTC §
17059.2(c)(1) and § 23689(c)(1))
2)Requires that at least 25 percent of the CCTC Program's tax
credits be awarded to small businesses annually. (RTC §
17059.2(g)(2)(3) and § 23689(g)(2)(3))
This bill:
1)Requires a state department that awards state funds to a
federal small business technical assistance center to report
annually on the outcomes of the those contracts, including:
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Page 3
a) The purpose of the contract and contract metrics;
b) The amount of state funds awarded and expended during
the report year; and
c) Specific information about the businesses served and the
outcomes from that assistance provided by the federal small
business technical assistance center, including:
i) The total number of businesses assisted.
ii) The industry sectors of the businesses assisted,
number of businesses assisted by industry sector, as
reported by the businesses.
iii) 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.
iv) 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.
v) 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.
1)Defines an "awarding department" as a department, board,
agency, or authority of the state, or an officer, agent, or
other authorized representative of such a state entity
awarding a contract for services, including technical
assistance to small businesses.
2)Defines a "federal small business technical assistance center"
to mean a Small Business Development Center (SBDC), a Women's
Business Center, a Veteran Business Outreach Center, or a
Procurement Technical Assistance Center operating in
California under a federal contract.
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3)Requires 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.
4)Authorizes 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.
5)Specifies that this chapter applies to contracts awarded on or
after September 1, 2017 and before December 31, 2021.
6)Sunsets these reporting requirements on January 1, 2022.
7)Expands the reporting requirements of the CCTC Program to
include, on its Web site, the following information:
a) The primary location of the facility(s) for which the
taxpayer is applying for credits listed by city or, in the
case of unincorporated areas, by county;
b) Information that identifies each tax credit award that
was given a priority for being located in a high
unemployment or poverty area, as specified; and
c) Information that identifies each tax credit award that
is being counted toward the requirement that, each fiscal
year, 25 percent of the aggregate amount of credits
allocated are required to be reserved for small business,
as defined.
Background
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The Assembly Committee on Jobs, Economic Development, and the
Economy (JEDE) is the Author and sponsor of this bill.
According to the JEDE, "The federal small business technical
assistance centers are an important resource for California
entrepreneurs. A growing number of state agencies are
contracting with these centers to provide valuable assistance in
helping small businesses become ready to compete for state
contracts and comply with new state laws. This measure ensures
consistent reporting across agencies and greater transparency as
to which areas of the state are being provided services."
Originally, only the provisions relating to the small business
technical assistance centers were included in this bill; the
provisions relating to the CCTC Program were housed in a
separate measure. However, that measure was vetoed by the
Governor because of chaptering conflicts with a budget trailer
bill. After resolving the chaptering conflicts, AB 2900 was
amended in Senate Appropriations to include the CCTC Program
revisions. According to the JEDE, these provisions "codify the
reporting of key elements of the tax credit program, including
the identification of business or project location, credits
awarded to small businesses, and credit awards that received
priority consideration. Each of these new reporting
requirements represents a key element of the tax credit program
and is essential to providing appropriate oversight and program
transparency. These elements include information to identify:
areas that are not currently being served; whether the
requirements of the small business set aside are being met; and
which areas of the state are benefiting from the priority
application requirements for high unemployment and high
poverty."
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: No
According to the Senate Appropriations Committee analysis dated
August 11, 2016, "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
low tens of thousands of dollars per contract for agencies to
report outcomes of state funds provided to federal small
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business technical assistance centers. Actual costs would
depend on the existing ability of these federal centers to track
data. GO-Biz indicates that the reporting requirements included
in the proposed amendments would be minor and absorbable.
According to GO-Biz, information identifying the primary
location of facilities is available in the full awardee list and
small businesses are listed in meeting agenda's which are posted
online."
SUPPORT: (Verified8/11/16)
Los Angeles Area Chamber of Commerce
OPPOSITION: (Verified 8/11/16)
None received
ARGUMENTS IN SUPPORT: The Los Angeles Area Chamber of
Commerce supports the bill. They state, "This bill ensures
consistent reporting across agencies and greater transparency,
making the government more responsible to small business."
ASSEMBLY FLOOR: 79-0, 6/1/16
AYES: Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker,
Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke,
Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley,
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,
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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
NO VOTE RECORDED: Cooper
Prepared by:Nicole Billington / B., P. & E.D. / (916) 651-4104
8/16/16 9:30:48
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