BILL ANALYSIS
Bill No: AB
2734
SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
Senator Roderick D. Wright, Chair
2009-2010 Regular Session
Staff Analysis
AB 2734 Author: John A. Perez
As Amended: May 28, 2010
Hearing Date: June 29, 2010
Consultant: Art Terzakis
SUBJECT
Office of Economic Development
DESCRIPTION
AB 2734 establishes the Office of Economic Development
(Office) within the Governor's Office for the purpose of
serving as the lead entity for economic strategy and
marketing of California on issues relating to business
development, private sector investment and economic growth.
Specifically, this measure:
1. Creates the Office, including the position of Director,
to be appointed by the Governor, and requires the Office
to: (a) prepare a 5-year strategic plan to guide the
state's activities and investments relative to economic
and workforce development; (b) make recommendations to
the Legislature and the Governor on new policies,
programs, and actions; (c) assist the Department of
Finance in preparing an integrated program of priority
actions to achieve statewide economic goals and
objectives; (d) coordinate development of policies and
criteria to ensure federal grants advance statewide
economic goals and objectives; and, (e) market the
business and investment opportunities available in
California by working in partnership with governmental
entities and other state public and private institutions.
2. Creates the California Business Investment Services
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Program (CalBIS) within the Office, under direct
authority of the Director, and requires the program to:
(a) provide economic and demographic data; (b) financial
information; (c) workforce information; (d)
transportation and infrastructure information; (e)
assistance in obtaining state/local permits; (f)
information on tax credits and other relevant matters;
and (g) permitting, siting and other regulatory
information.
3. Moves the Office of Small Business Advocate to the
Office and makes other conforming changes.
4. Deletes an obsolete due date reference for submission
of a report to the Legislature by the economic strategy
panel and instead requires that the report be submitted
to the Governor's Office of Economic Development.
EXISTING LAW
Existing law provides for the California Commission on
Industrial Innovation which is composed of 25 members, five
from the public sector, four from academia, six from labor,
and 10 from firms characterized by industrial innovation.
Existing law provides for the California Economic Strategy
Panel within the Labor and Workforce Development Agency to
provide recommendations regarding an economic development
strategic plan and charges the panel with the new
responsibility of addressing the development of a system of
accountability for use in the annual state budget process.
Existing law, the California Small Business Financial
Development Corporation Law, creates the Office of the
California Small Business Board and imposes numerous duties
on the Secretary of Business, Transportation and Housing.
Existing law, the Enterprise Zone Act, imposes numerous
duties on the Employment Development Department and other
state entities to promote economic development within
specified geographic areas.
Existing law creates the Office of Small Business Advocate
within the Office of Planning and Research, and imposes
various duties and requires the Governor to appoint the
director of the Office of Small Business Advocate.
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Existing law provides for the State Job Training
Coordinating Council, Employment Development Department,
the Business, Transportation and Housing Agency, and its
secretary.
Existing law provides for the California Business
Investment Services program, which is currently operated by
the Labor and Workforce Development Agency.
BACKGROUND
Purpose of AB 2734: This measure creates the Office of
Economic Development within the Governor's Office, and
establishes specific tasks and duties for the Office,
including developing a statewide strategic economic plan
and reorganizing such entities as the Small Business
Advocate and CalBIS into this new office. Ultimately, this
new office will establish long-term economic goals and
strategies as well as specific and effective services to
California's businesses both large and small. According to
the author's office, this measure is intended to codify the
Governor's Office of Economic Development.
Governor's Executive Order: On April 8, 2010, Governor
Schwarzenegger signed Executive Order S-05-10, creating the
Governor's Office of Economic Development.
The executive order contains the same general thrust as AB
2734.
Little Hoover Commission Report: The Milton Marks "Little
Hoover" Commission on California State Government
Organization and the Economy released a report in February
2010 entitled., Making up for Lost Ground: Creating a
Governor's Office of Economic Development. The report can
be accessed through the following link:
http://www.lhc.ca.gov/studies/200/report200.html
The Little Hoover Commission (Commission) supports this
measure based on findings and recommendations in its
February report. The report urged the creation of a
visible economic development coordinating unit inside the
Governor's Office to respond and reach out to businesses
interested in moving to - or leaving - California. The
Commission also recommended that the Governor's Office of
Economic Development lead a strategic planning process to
create an action plan to guide and integrate the state's
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vast economic and workforce development activities and
investments.
To accomplish those goals, the Commission recommended
relocating and expanding CalBIS, as well as transferring
strategic planning duties from the Economic Strategy Panel
into the Governor's Office of Economic Development.
The Commission's rationale for recommending an Office of
Economic Development was not to reassemble the previous
commerce agency or create a large government bureaucracy to
administer new programs. Rather, the Commission suggested
building on existing resources to make the government more
responsive to businesses. The Commission noted, "Instead
of a traditional, top-down bureaucracy, a more agile entity
is needed to function as a convener and streamliner."
PRIOR/RELATED LEGISLATION
SB 1259 (DeSaulnier) 2009-10 Session. Would create the
Economic Development and Job Creation Agency and requires
the new agency to perform duties relating to economic
development and job creation. (Died on Senate
Appropriations Suspense File)
AB 1558 (V. Manuel Perez), 2009-2010 Legislative Session .
Would rename the Employment Development Department as the
"Economic and Employment Development Department" and
expands the duties of the department. (Pending in Senate
Policy Committee)
SUPPORT: As of June 25, 2010:
Little Hoover Commission
Solar Power, Inc.
California Association for Local Economic Development
OPPOSE: None on file as of June 25, 2010.
FISCAL COMMITTEE: Senate Appropriations Committee
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