BILL ANALYSIS Ó
AB 29
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Date of Hearing: May 18, 2011
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 29 (John A. Perez) - As Introduced: December 6, 2010
Policy Committee: Jobs Vote:6-0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill codifies the Governor's Office of Economic Development
(GOED) and establishes its powers and duties. Specifically, this
bill:
1)Codifies the Governor's Office of Economic Development (GOED)
with a director appointed by the governor and subject to
confirmation by the Senate.
2)Transfers the existing Office of the Small Business Advocate
(OSBA) to GOED.
3)Creates the California Business Investment Services Program
(CalBIS) within the office and states that CalBIS role is to
service employers, corporate executives, business owners and
site location consultants considering California as a site for
investment and expansion.
4)Specifies the economic develop duties for GOED, including
making recommendations to the Governor and Legislature on new
and existing state policies, programs and actions for the
purpose of advancing statewide economic goals.
5)Provides that funding for GOED in the 2011-12 fiscal year
shall be from existing resources and staffed by personnel
loaned from other state agencies and departments
FISCAL EFFECT
1)Ongoing costs in the range of $500,000 per year to maintain
and update the website, to advertise the required phone
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number, and to provide staff to answer the dedicated telephone
line and assist callers.
2)General Fund costs in the range of $400,000 for the Economic
Development Council to produce the required strategic plan.
3)General Fund costs in excess of $200,000 for the director and
support staff.
4)Despite the intent of the bill to redirect existing resources,
presumably such a redirection results in reduced production
from the redirected entities.
COMMENTS
1)Purpose. In February 2010, the Little Hoover Commission
released a report entitled Making up for Lost Ground: Creating
a Governor's Office of Economic Development . The report
analyzed the status and effectiveness of the various pieces of
the defunct Technology, Trade and Commerce Agency that had
been reorganized into other entities. The report recommended
the creation of a new governmental entity that would promote
greater economic development, foster job creation, and deliver
specific services (i.e. permitting, tax, regulatory, and other
information) directly to the California business community.
According to the author, AB 29 creates the Office of Economic
Development within the Governor's Office, and establishes
specific tasks and duties for the office, including
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."
2)Executive Order S-05-10 , issued on April 8, 2010, creates the
Governor's Office of Economic Development or GOED. The
governor stated 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.
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3)The Little Hoover Commission and renewed legislative
responses : While the commission heard substantial criticism
about the state's business climate, this report focused on how
the state could better organize and utilize its existing
business focused and broader economic and workforce
development programs and services. The report noted that the
state's current economic development activities are spread out
over numerous agencies, boards, commissions and financing
authorities.
4)Related legislation. AB 1233 (V. Manuel Pérez), authorizes
the creation of a joint economic and workforce development
strategic plan as well as making other updates to its content.
AB 1233 is a two-year bill.
5)Previous legislation. AB 2734 (John Pérez) of 2010 was
similar to this bill. AB 2734 was vetoed by Governor
Schwarzenegger, with the message that the director of GOED was
subject to Senate confirmation, which inappropriately
infringed on the rights and powers of the Governor.
6)There is no registered opposition to this bill.
Analysis Prepared by : Roger Dunstan / APPR. / (916) 319-2081