BILL ANALYSIS
AB 699
Page 1
Date of Hearing: May 20, 2009
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Kevin De Leon, Chair
AB 699 (Portantino and V. Manuel Perez) - As Amended: May 6,
2009
Policy Committee: Jobs, Economic
Development & the Economy Vote: 7 - 0
Urgency: Yes State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill updates the requirements for the development of a
State Economic Development Strategy (ED Strategy) and requires
it be submitted to the Legislature by May 1, 2010.
Specifically, this bill:
1)Modifies the content of the ED Strategy to reflect current
economic best practices and key issues, including the role of
innovation in the California economy and the need to attract
more private capital to the state's border regions and other
emerging domestic markets.
2)Expands the membership of the California Economic Strategy
Panel (ESP) from 15 to 19 members by including the Small
Business Advocate and the Secretaries for the Business,
Transportation and Housing (BTH) Agency and the Department of
Food and Agriculture (CDFA). The bill also requires that at
least one member of the ESP be a representative of economic
developers.
3)Extends the term of the ED Strategy from every two-years to
every five-years. In order to provide adequate oversight, the
ESP is required to submit a summary of activities to the
Legislature every two years.
4)Deletes the requirement that the ESP convene a meeting in
every community in the state with a population over 500,000,
and instead, directs the ESP to meet with key stakeholder
groups in preparation of the ED Strategy, as specified.
AB 699
Page 2
5)Requires that the cost of updating the ED Strategy come from
private donations, as specified.
FISCAL EFFECT
GF cost pressure in excess of $300,000 for the ESP to produce
the required strategic plan.
COMMENTS
Purpose . According to the authors, California stands at a
crossroads without a comprehensive plan to guide its recovery
efforts. California workers and businesses are currently facing
some of the harshest economic conditions since the Great
Depression. Unemployment in California has reached 11% and is
projected to rise to over 12% before the current recession is
over. Some areas of the state, however, are already
experiencing unemployment rates of nearly 27%. Almost every
industry sector is experiencing a loss of jobs and will likely
continue to experience losses as the global economy
progressively deteriorates. In summary, credit markets are
frozen, unemployment is rising, and production is stalled.
Implementation of AB 699, updates the requirements of the ED
Strategy to better reflect the state's current economic crisis
and sets a specific date for its next update. However, as with
previous legislation in this area, no funding is provided in
this legislation for the ESP to create a state economic
development strategy.
Existing law requires the ESP to prepare an ED Strategy every
two years to help guide the state's financial investments and
activities related to economic and workforce development. The
last ED Strategy was completed in 2002. Although the ESP has
continued to meet during the last seven years, due to a lack of
funding no ED Strategy has been prepared.
This bill is intended to require ESP to provide the state with a
current assessment of economic conditions; a prioritization of
issues; a coordination of federal, state, and local efforts; the
impact of federal stimulus dollars; and the efforts of public
and private sectors to retain jobs and improve local economies.
Without this assessment, the authors believe the state's
economic recovery will be limited.
AB 699
Page 3
Analysis Prepared by : Julie Salley-Gray / APPR. / (916)
319-2081