BILL ANALYSIS
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|SENATE RULES COMMITTEE | AB 2734|
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THIRD READING
Bill No: AB 2734
Author: John A. Perez (D)
Amended: 8/17/10 in Senate
Vote: 21
SENATE GOVERNMENTAL ORG. COMMITTEE : 8-0, 6/29/10
AYES: Wright, Harman, Calderon, Florez, Negrete McLeod,
Padilla, Price, Yee
NO VOTE RECORDED: Denham, Oropeza, Wyland
SENATE APPROPRIATIONS COMMITTEE : 7-4, 8/12/10
AYES: Kehoe, Alquist, Corbett, Leno, Price, Wolk, Yee
NOES: Ashburn, Emmerson, Walters, Wyland
ASSEMBLY FLOOR : 75-0, 6/2/10 - See last page for vote
SUBJECT : Office of Economic Development
SOURCE : Author
DIGEST : This bill establishes the Office of Economic
Development within the Governors 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.
ANALYSIS : Existing law provides for the California
Commission on Industrial Innovation which is composed of 25
members, five from the public sector, four from academia,
CONTINUED
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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.
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.
This bill:
1.Creates the Office of Economic Development, including the
position of Director, to be appointed by the Governor,
and requires the Office to: (a) make recommendations to
the Legislature and the Governor on new policies,
programs, and actions; (b) coordinate development of
policies and criteria to ensure federal grants advance
statewide economic goals and objectives; and, (c) market
the business and investment opportunities available in
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California by working in partnership with governmental
entities and other state public and private institutions.
2.Creates the California Business Investment Services
Program (CalBIS) within the Office, under direct
authority of the Director, and requires the program to
provide all of the following:
A. Economic and demographic data.
B. Financial information to help link businesses
with state and local public and private programs.
C. Workforce information, including, but not
limited to, labor availability, training, and
education programs.
D. Transportation and infrastructure information.
E. Assistance in obtaining state and local
permits.
F. Information on tax credits and other
incentives.
G. Permitting, siting, and other regulatory
information pertinent to business operations in the
state.
(1) Establish a well-advertised
telephone number, an interactive Internet Web
site, and an administrative structure that
effectively supports the facilitation of business
development and investment in the state.
(2) Encourage collaboration among
research institutions, startup companies, local
governments, venture capitalists, and economic
development agencies to promote innovation.
(3) In cooperation with the federal
government, foster relationships with overseas
entities to improve the state's image as a
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destination for business investment and
expansion.
(4) Conduct research on the state's
business climate, including, but not limited to,
research on how the state can remain on the
leading edge of innovation and emerging sectors.
(5) Support small businesses by
providing information about accessing capital,
complying with regulations, and supporting state
initiatives that support small business.
3.Provides that during the 2010-11 fiscal year, the office
shall be funded with existing resources and staffed by
personnel loaned from agencies and departments that
address economic development, including, but not limited
to, the promotion of small business. The agencies shall
include, but not be limited to, the Labor and Workforce
Development Agency, the Business, Transportation and
Housing Agency, the California Environmental Protection
Agency, the Natural Resources Agency, the State and
Consumer Services Agency, the Department of Food and
Agriculture, the State Chief Information Officer, and the
Office of Planning and Research.
4.Moves the Office of Small Business Advocate to the Office
and makes other conforming changes.
5.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.
Background
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
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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 supports this bill 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 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."
Comments
This bill 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.
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FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee:
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.
SUPPORT : (Verified 8/17/10)
Little Hoover Commission
Solar Power, Inc.
California Association for Local Economic Development
ASSEMBLY FLOOR :
AYES: Adams, Ammiano, Anderson, Arambula, Bass, Beall, Bill
Berryhill, Blakeslee, Block, Blumenfield, Bradford,
Brownley, Buchanan, Caballero, Charles Calderon, Carter,
Chesbro, Conway, Cook, Coto, Davis, De La Torre, De Leon,
DeVore, Emmerson, Eng, Evans, Feuer, Fletcher, Fong,
Fuentes, Fuller, Furutani, Gaines, Galgiani, Garrick,
Gilmore, Hagman, Hall, Harkey, Hayashi, Hernandez, Hill,
Huber, Huffman, Jeffries, Jones, Knight, Logue, Bonnie
Lowenthal, Ma, Mendoza, Miller, Monning, Nava, Nestande,
Niello, Nielsen, V. Manuel Perez, Portantino, Ruskin,
Salas, Saldana, Silva, Skinner, Smyth, Solorio, Swanson,
Torlakson, Torres, Torrico, Tran, Villines, Yamada, John
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A. Perez
NO VOTE RECORDED: Tom Berryhill, Lieu, Norby, Audra
Strickland, Vacancy
TSM:nl 8/17/10 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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