BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
2734 (J Perez)
Hearing Date: 8/12/2010 Amended: 5/28/2010
Consultant: Bob Franzoia Policy Vote: G O 8-0
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BILL SUMMARY: AB 2734 would create the Office of Economic
Development as the lead entity for economic strategy and
marketing of California. This bill would create the California
Business Investment Services Program (CalBIS) within the office
for the purpose of serving employers, corporate executives,
business owners, and site location consultants who are
considering California for business investment and expansion.
This bill would move the Office of Small Business Advocate to
the Office of Economic Development. This bill would revise the
conditions relating to the preparation and reporting of the
California Economic Development Strategic Plan.
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Fiscal Impact (in thousands)
Major Provisions 2010-11 2011-12 2012-13 Fund
Creation of the Office of $1,250* $2,500
$2,500General/
Economic Development Various
Special
* Based on 22 professional positions (and projected three
support staff) within the Governor's Office of Economic
Development. The proposed 2002-03 Technology, Trade and
Commerce Agency budget was approximately $20 million but
included programs not referenced in this bill. This agency was
abolished in the 2003-04 Budget Act although several of its
programs were transferred to other departments.
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STAFF COMMENTS: SUSPENSE FILE. AS PROPOSED TO BE AMENDED.
Executive Order S-05-10 created the Governor's Office of
Economic Development (GOED). 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 shall exist
within the Governor's Office, be headed by a director designated
by the Governor, and shall be the state's lead entity for
economic development coordination with all public and private
entities.
Also according to the Executive Order, the Office of Economic
Development shall be created with existing resources and shall
be staffed with personnel from agencies and departments whose
functions relate to economic development, including small
business promotion. These agencies shall include, but not be
limited to, the Labor and Workforce Development Agency, the
Business, Transportation and Housing Agency, the Environmental
Protection Agency, the Natural Resources Agency, the State and
Consumer Services Agency, the Department of Food and
Agriculture, the Office of the Chief Information Officer, and
the Office of Planning and Research. Each member of
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AB 2734 (J Perez)
the Cabinet shall identify a senior manager within his or her
agency to coordinate
business support activities with the Office of Economic
Development.
The office has one Executive Director, six deputies and two
project managers in the CalBIS program, three deputies and one
project manager in small business, two deputies in innovation
and entrepreneurship, two deputies and one manager in
international trade, one deputy and one analyst in policy and
research planning, one deputy in marketing and communications,
and one deputy in external affairs.
The appropriate combination of programs and staffing will likely
vary and grow in future years. For example, programs in the
Technology, Trade and Commerce Agency included, among others:
California Infrastructure and Economic Development Bank (21 PY).
Military Base Retention and Reuse (6 PY).
California Film Commission (19 PY).
Regional Offices for Economic Development (117 PY).
International Trade and Investment (148 PY).
Tourism (21 PY).
There were 65.8 total administrative positions and a total of
367 authorized positions with a total budget of approximately
$20,000,000 (2002-03).
The proposed amendments would:
Delete the requirement for the five year plan to the
Legislature and the program plan provided to Finance.
More clearly define the role of GOED by moving specific
duties from CalBIS to GOED, and clarify that funding should
be done within existing resources, including the transfer
of staff.
Address concerns that the biennial report does not
adequately review how to keep existing industries here by
including information in the report on current industries
and job retention.
The amendments note the office shall provide assistance in
obtaining state and local permits, permitting, siting and other
regulatory information pertinent to business operation in
California, that during 2010-11, the office shall be funded with
existing resources and shall be staffed by personnel loaned from
agencies and departments and for 2011-12 and subsequent fiscal
years, the office shall develop a budget in coordination with
the Department of Finance pursuant to the normal state budgeting
processes, including the permanent transfer of associated
positions.