BILL ANALYSIS
AB 2437
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CONCURRENCE IN SENATE AMENDMENTS
AB 2437 (V. Manuel Perez)
As Amended August 20, 2010
Majority vote
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|ASSEMBLY: |74-0 |(June 2, 2010) |SENATE: |23-11|(August 24, |
| | | | | |2010) |
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Original Committee Reference: J., E.D. & E.
SUMMARY : Authorizes the establishment of the California
Manufacturing Competitiveness Act of 2010 for the purpose of
supporting the retooling and expansion of California's
manufacturing facilities, enhancing the state's logistics
network, and retaining and creating jobs.
The Senate amendments make technical and clarifying changes to
the California Manufacturing Competitiveness Loan and Loan
Guarantee Program (Program) including, but not limited to:
1)Eliminating the specific size of business and financing
limitations and, instead, provide that these and other
relevant selection and review requirements would be laid out
through adoption of procedures by the California Industrial
Development Financing Advisory Commission (CIDFAC).
2)Making a large number of technical and conforming amendments
to the Industrial Development Financing Act.
AS PASSED BY THE ASSEMBLY , this bill authorized the
establishment of the California Manufacturing Competitiveness
Act of 2010 for the purpose of supporting the retooling and
expansion of California's manufacturing facilities, enhancing
the state's logistics network, and retaining and creating jobs.
Specifically, this bill :
1)Required CIDFAC to establish the Program for purpose of
attracting, retaining and expanding manufacturing facilities
with more than 200 employees.
2)Required CIDFAC to annually provide specified information on
the program's activities and impact on the manufacturing
industry and on the state's economy.
AB 2437
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3)Sunseted the provisions of the bill on January 1, 2016.
FISCAL EFFECT : According to the Senate Appropriations
Committee, no significant costs related to this legislation.
COMMENTS :
1)According to the author, "the choices that Californians make
in the next year will set the foundation for the state's
economy for decades to come. Historically, the state's growth
strategy has been to aggressively seize new ideas,
operationalize the idea and birth a new industry or transform
an old industry. Today, we can decide whether to shy away
from manufacturing after the loss of so many jobs, or to
transform the state's old manufacturing strengths into new
products, markets, and opportunities. We can decide to opt out
of the national shift to a lower-carbon economy, or to be at
the forefront of developing clean and renewable energy
industries and quality jobs." This bill provides a new
financial component - "a deal closer" - in California's
ability to attract, retain and grow the state's manufacturing
sector.
2)Manufacturing is one of the top five private industry sectors,
responsible for employing 1.4 million workers (9.3%) and
contributing $179 billion to the state's $1.8 trillion Gross
Domestic Product (GDP).
A robust manufacturing sector has many benefits, including
high wage jobs and a multiplier effect on other industries and
businesses. As an example, the Milken Institute estimates
that every job created in manufacturing supports 2.5 jobs in
other sectors. In some industry sectors, such as the
electronic computer manufacturing, the multiplier effect is 16
to one.
Manufacturing is California's most export-intensive activity.
Overall, manufacturing exports represent 9.4% ($120 billion in
goods) of California's GDP, and computers and electronic
products constitute 29.3% of the state's total manufacturing
exports. More than one-fifth (21.9%) of all manufacturing
workers in California directly depend on exports for their
jobs.
AB 2437
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Manufacturing in California, however, even prior to the
current economic recession, faced many challenges maintaining
global and domestic competitiveness, including providing a
skilled workforce to support the changing needs of
manufacturing and goods movement and maintaining
cost-effective productivity in the face of lower safety and
wage standards in emerging foreign markets.
3)A number of significant manufacturing related actions are
taking place at the federal level. In December, the President
put forth a new national strategy on manufacturing and in the
months since, has made a number of key funding announcements
including a $130 million for a new Energy Innovation Hub.
Congress has also increased its interest in supporting
manufacturing. In 2009, Senator Sherrod Brown (D-OH)
introduced the IMPACT Act, which will provide $30 million to
states for assisting manufactures transition to the clean
energy economy.
Greater targeting of existing federal funding is also expected
following a March 17, 2010 hearing by the House Subcommittee
on Science and Technology, where much of the discussion
centered on the funding priorities for the agencies overseen
by the committee, including the National Science Foundation,
the National Institute of Standards and Technology, the
Manufacturing Engineering Laboratory, the Manufacturing
Extension Partnership and Technology Innovation Program.
AB 2437 would establish a manufacturing loan and loan
guarantee program to help ensure California remains
competitive as the federal government rolls out new and
expanded funding programs.
Analysis Prepared by : Toni Symonds / J., E.D. & E. / (916)
319-2090
FN:
0005977