BILL ANALYSIS Ó
AB 1233
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Date of Hearing: January 19, 2012
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 1233 (V. Manuel Perez) - As Amended: January 11, 2012
Policy Committee: JEDE Vote:6-0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill requires the Director of the Governor's Office of
Business and Economic Development (GO-BIZ) to prepare a
five-year economic and workforce development strategy.
Specifically, this bill:
1)Requires GO-BIZ, in consultation with the Secretary of the
Labor and Workforce Development Agency (LWD), to prepare, and
update every five years, the California Economic and Workforce
Development Strategy.
2)Requires the California Workforce Investment Board to assist
LWD in preparing the Strategy and provides that the Strategy
may serve to meet existing requirements to have a state
workforce strategy, one of the pre-conditions for drawing down
federal Workforce Investment Act moneys.
3)Requires that a preliminary Strategy be developed and that the
relevant policy and fiscal committees of the Legislature hold
one or more public hearings on the document. Following the
conclusion of those hearings, the Strategy may be finalized by
CAL-BIZ.
4)Provides for the posting of the preliminary and final strategy
on relevant state entity websites and requires notice of these
actions to the public and Legislature.
5)Prohibits state funds from being used to finance the
development of the preliminary Strategy.
6)Contains an urgency clause.
AB 1233
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FISCAL EFFECT
One time costs of approximately $250,000 to prepare plan as
specified. The bill requires that the development of the
preliminary strategy shall be funded from nonstate sources and
private donations, which, if raised would reduce the cost for
preparation of the draft. Nevertheless, the bill creates cost
pressure until and if these outside funding sources provide
the resources for the effort. There would also be costs of
approximately $25,000 to complete the preliminary strategy.
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COMMENTS
1)Purpose: According to the author, "Implementation of AB 1233
will help the state set a strategic path forward through
prioritizing and coordinating state activities, supporting
local and regional economic development activities and better
leveraging of private sector and other public sector
resources."
The author states that "without a blueprint to guide the
expenditure of state resources the state risks losing its
comparative advantages that have, up until now, allowed
workers and businesses to remain competitive within the global
economy. There is much work to be done," the author states,
"to support small businesses, improve infrastructure and
provide the education and workforce training necessary to be
competitive in a marketplace that has few geographic
boundaries."
April 2010, Governor Schwarzenegger issued Executive Order
S-05-10 (EO) as a means to operationalize the report
recommendations including the creation of the Governor's
Office of Economic Development (GOED). Under the auspices of
GOED, a number of state programs and services are
administered, including programs related to international
trade, permit assistance, the Office of the Small Business
Advocate, and innovation. There are 23 positions assigned to
GOED in 2011-12 Budget, which are funded through existing
state resources and staffed by personnel loaned from state
agencies and departments.
2)Background. In October 2011, the Governor signed AB 29 (John
Perez), which effectively codified GOED and changed its name
to GO-BIZ, effective January 1, 2012. The office is not
currently staffed or funded to undertake the work required by
AB 1233. The office will not fully staffed until adoption of
the 2012-13 budget.
3)Need for the bill? Given that GO-BIZ is not fully staffed
until later in this calendar year, the committee may want to
consider if this is the time to act on this significant
economic development legislation. In addition, enactment of
this bill essentially reinstates the functions of the Economic
Strategy Panel which was defunded and eliminated in the
2011-2012 budget.
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4)Possible amendment. This bill requires the policy and fiscal
committees to hold hearings on the draft strategy. The
committee may want to consider amending out this requirement
the bill places on the Legislature and allowing the houses and
committee chairs to decide if a hearing is warranted when the
strategy is completed.
5)Related legislation. The following is a list of related
bills.
a) Chapter 475, Statutes of 2011, AB 29 (John A. Pérez),
established the Office of Business and Economic Development
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.
b) AB 699 of 2009, (Portantino and V. Manuel Pérez) would
have updated the requirements for the development of a
State Economic Development Strategy, especially in the
areas of technology and innovation, and requires it be
submitted to the Legislature by May 1, 2010. Held in
Assembly Appropriations Committee.
Analysis Prepared by : Roger Dunstan / APPR. / (916) 319-2081