BILL ANALYSIS
AB 2287
Page 1
Date of Hearing: May 19, 2010
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 2287 (Bass) - As Amended: April 28, 2010
Policy Committee: Jobs, Econ.
Development and the Economy Vote: 6 - 0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill codifies the Governor's Office of Economic Development
(GOED) and creates the California Business Investment Services
(CalBIS) Program within that office. Specifically, this bill:
1)Codifies the Governor's Office of Economic Development (GOED).
2)Creates a cabinet-level Secretary of the Office of Economic
Development.
3)Creates the California Business Investment Services Program
(CalBIS) within the office and requires the program to
provide:
a) Economic and demographic data
b) Financial information
c) Workforce information
d) Transportation and infrastructure information
e) Assistance on obtaining permits
f) Regulatory information
4)Requires that CalBIS have a well-advertised phone number, and
interactive Internet Web site and an administrative structure
effective enough to support business development.
5)Establishes in statute a 25% small business procurement goal.
6)Requires each agency to identify a Small Business Advocate who
will develop and share procurement and contracting practices
to increase small business opportunities.
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7)Requires the secretary of economic development and the
director of the Department of General Services to monitor the
progress of all state agencies toward meeting the small
business participation goal.
FISCAL EFFECT
1)CalBIS Program:
One time costs in excess of $750,000 GF to create the CalBIS
website and to gather all of the required information. With
on-going costs in the range of $500,000 GF per year to
maintain and update the website, to advertise the required
phone number, and to provide staff to answer the dedicated
telephone line and assist callers.
2)25% Small Business Procurement Goal:
a) GF costs for DGS and GOED to implement the new program,
monitor progress, and report on department progress would
be in the range of $300,000 per year.
b) Unknown GF costs, in excess of $500,000 for the workload
associated with state agencies and departments preparing
annual reports that include statistics regarding small
business participation and preparing the required
implementation plans.
c) To the extent that the 25% small business requirement
increases the number of state contracts awarded to other
than the low bidder, state contracting costs will increase.
Given the thousands of state contracts awarded annually
totaling several billion dollars, the cost impact of the
bill could be at least in the tens of millions of dollars
each year.
3)Small Business Advocates:
To the extent departments do not have staff available to
fulfill the required duties of the small business advocate, it
could cost several hundred thousand dollars statewide for
additional staff.
4)Secretary of Economic Development:
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GF costs in excess of $200,000 for the cabinet secretary
position and the necessary support staff.
COMMENTS
1)Rationale . The intent of this legislation is to implement a
series of changes designed to assist small businesses in the
state. Creating the CalBIS program is intended to provide
small business owners and potential owners with a "one stop
shop" for receiving all of the information they need to run a
small business in the state. Creating small business
advocates in each department throughout the state and
establishing a 25% small business contracting goal is intended
to increase the number of state contracts that are awarded to
small businesses.
2)Executive Order S-05-10 , issued on April 8, 2010, creates the
Governor's Office of Economic Development. The governor states
that its purpose is to promote California as a place to do
business, to support those interested in starting, growing,
financing, expanding or relocating a business in California,
and to help, to the extent possible, those businesses facing
challenges to operating in California. The Office of Economic
Development was created within the Governor's Office, and is
headed by a director designated by the governor.
3)Related Legislation . Currently, AB 2714 (V.M. Perez) moves
the office of the Small Business Advocate from the governor's
Office of Planning and Research (OPR) to the Business,
Transportation, and Housing (BTH) agency. In addition, this
bill adds a representative of the Office of the Small Business
Advocate to the Small Business Board. That bill is currently
pending on this committee's Suspense File.
AB 2734 (John Perez) codifies the Governor's Office of
Economic Development and locates the Small Business Advocate
within that office. In addition, that bill creates a
California Business Investment Services Program within that
office. That bill is currently pending in this committee.
In 2008, AB 2854 (Mendoza) required, upon available funding,
the Office of the Small Business Advocate to create a one-stop
web site for small business-related announcements and funding
opportunities offered by state agencies. That bill was
vetoed. In his veto message the governor noted, that "this
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bill does not offer any additional significant information to
these businesses that is not already provided on the existing
Small Business Advocate website." In addition, he stated, "The
report mandate in this bill would create additional workload
that would result in a General Fund cost pressure that is
unsustainable during our current budget situation."
In 2009, AB 309 (Price) required all state agencies and
departments to establish and achieve a 25% small business
participation rate for state contracts and requires the
Department of General Services (DGS) to monitor progress in
meeting this rate. That bill was held on this committee's
Suspense File.
Analysis Prepared by : Julie Salley-Gray / APPR. / (916)
319-2081