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:








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          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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             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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