BILL ANALYSIS Ó
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
AB 1137 (V Perez)
Hearing Date: 7/11/2011 Amended: 6/22/2011
Consultant: Bob Franzoia Policy Vote: B,P&ED 8-1
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BILL SUMMARY: AB 1137 would do the following:
- Establish the California Foreign Investment Program and
require the Business, Transportation and Housing Agency (agency)
to serve as the lead state entity under specified federal
provisions.
- Establish the California Export Promotion and Gap Financing
Program, and authorize the agency to apply for and receive
federal funding for the implementation of a state and federal
export financing program. The agency would be authorized to
adopt regulations and to report on the program.
- Require California's trade and investment policy to be
implemented pursuant to the strategy developed by the agency and
require the agency to consult with local and regional
governmental entities and associations.
- Authorize the agency, as a part of the consultation process,
to create an advisory board comprised of representatives from
certain entities to provide the secretary on advice on the
content of the study, and of the strategy that the agency is
developing.
- Require the agency, as a part of the consultation process, to
discuss certain issues related to trade and investment. This
bill would provide that this consultation may be conducted
within the existing business partnership framework or
separately, or both.
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Fiscal Impact (in thousands)
Major Provisions 2011-12 2012-13 2013-14 Fund
California Foreign $355 $430 $430 General
Investment Program
California Export Promotion $357 $614
$614General/
and Gap Financing Program Federal
- Grants Unknown major costs annually Federal
AB 1137 (V Perez)
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STAFF COMMENTS: This bill meets the criteria for referral to the
Suspense File.
As noted in the policy committee analysis, the EB-5 visa
category, which was created by Congress in 1990, is available to
immigrants seeking to enter the United States in order to invest
in a business or company that will benefit the economy. This
program is administered by the US Citizenship and Immigration
Service. The name "EB-5" is derived from the fact that it is
the 5th category of an Employment-Based visa.
Permanent-resident status through an EB-5 visa is available to
foreign investors who have invested - or are actively in the
process of investing - at least $1million into a new commercial
enterprise, which can entail the creation of an original
business, the purchase of an existing business and restructuring
or reorganizing the business to the extent that a new commercial
enterprise results or, a significant expansion of an existing
business.
This bill proposes the establishment of the California Foreign
Investment Program and requires the agency to serve as the lead
state entity for the administration of the EB-5 program. It
appear this program would run parallel to, or duplicate, the
federal EB-5 program, though it is unclear if the state needs to
duplicate the federal designation (or what state designation as
a regional center provides). To administer the program, the
agency would be required to determine the legal status of an
applicant, establish reporting and monitoring requirements and
oversee the program. This analysis estimates three associate
governmental program analysts ($92,767 total compensation each)
and operations ($100,000) would be needed to administer the
program.
This bill also proposes the establishment the California Export
Promotion and Gap Financing Program within the agency which
would implement a federally funded export assistance program.
This analysis estimates five analysts would be needed to
administer a grants program. Both programs would likely share
one staff services manager position ($109,279). It is unknown
when the state may receive federal funds to award grants.
AB 1137 (V Perez)
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Staff notes that in general agencies do not have the
infrastructure available at the department level to administer
or support state programs.