BILL NUMBER: AB 1646	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Campos

                        FEBRUARY 13, 2012

   An act to add and repeal Article 6 (commencing with Section 12099)
to Chapter 1.6 of Part 2 of Division 3 of Title 2 of the Government
Code, relating to state government.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1646, as introduced, Campos. California Demonstration of
Emerging Market Opportunities Act.
   The Governor's Office of Business and Economic Development serves
as the Governor's lead entity for economic strategy and the marketing
of California on issues relating to business development, private
sector investment, and economic growth. The office, among others,
makes recommendations to the Governor and the Legislature regarding
policies, programs, and actions to advance statewide economic goals.
   Commencing January 1, 2014, this bill would require the office to
implement and administer the California Demonstration of Emerging
Market Opportunities Act, which would allow state agencies to enter
into partnership agreements, as defined, with specified businesses
and nonprofit organizations to test, evaluate, or demonstrate
innovative solutions and pilot projects, as defined, in a manner that
fulfills specified goals relating to economic development. This bill
would establish the California Demonstrated Innovation Seal that the
office would grant to selected businesses and nonprofit
organizations, as specified. This bill would authorize the Department
of General Services to charge a reasonable fee to the business or
nonprofit organization receiving the California Demonstrated
Innovation Seal to produce the seal. The bill would authorize an
agency to assess a fine of up to $10,000 against a business or
nonprofit organization that falsifies or fails to disclose
information in connection with a project.
   These provisions would remain operative only until January 1,
2019, and as of that date is repealed, unless that date is deleted or
extended.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  The Legislature finds and declares all of the
following:
   (a) California is home to many of the world's leading technology
companies, and the state seeks to spur economic growth, including job
growth, by supporting innovation by these companies.
   (b) The Governor's Office of Business and Economic Development has
launched a new, forward-thinking Innovation Hub (iHub) initiative in
an effort to harness and enhance California's innovative spirit. The
iHub initiative improves the state's national and global
competitiveness by stimulating partnerships, economic development,
and job creation around specific research clusters through
state-designated iHubs. The iHubs will leverage assets, such as
research parks, technology incubators, universities, and federal
laboratories, to provide an innovation platform for startup
companies, economic development organizations, business groups, and
venture capitalists.
   (c) In order to achieve the desired growth, however, inventive
businesses require support that reaches beyond traditional business
incubators and that streamlines the commercialization of innovative
products, services, and processes. The state can provide this support
by partnering to provide companies with an opportunity to
demonstrate their innovative products, services, and processes while
also increasing public awareness of these innovative solutions.
   (d) The California Demonstration of Emerging Market Opportunities
Act will allow the state to take advantage of emerging and innovative
technologies, products, and services while providing a new economic
development tool that will motivate local companies to excel in
technology development and attract new companies to this state.
  SEC. 2.  Article 6 (commencing with Section 12099) is added to
Chapter 1.6 of Part 2 of Division 3 of Title 2 of the Government
Code, to read:

      Article 6.  California Demonstration of Emerging Market
Opportunities Act


   12099.  Commencing January 1, 2014, the Governor's Office of
Business and Economic Development shall implement and administer the
California Demonstration of Emerging Market Opportunities (CalDEMO)
Program. The program shall be designed to accomplish all of the
following:
   (a) Directly aid businesses and nonprofit organizations by
developing a public platform to demonstrate their innovative
solutions and pilot projects for the purposes of providing:
   (1) Experience engaging with the state in the process of planning,
deploying, demonstrating, and maintaining their innovation.
   (2) High profile public exposure for the business or nonprofit
organization demonstrating an innovative solution or pilot project
that addresses an issue of statewide significance.
   (3) Data collection on an innovation's real-time performance in a
public setting.
   (4) An opportunity for a business or nonprofit organization to
demonstrate successfully that their innovation can be deployed,
operated, and maintained in a real-world setting.
   (5) An opportunity for a business or nonprofit organization to
demonstrate successfully that it has the capacity to sufficiently
plan, deploy, operate, and maintain the innovation in a real-world
setting.
   (6) Create new markets for innovative businesses and nonprofit
organizations.
   (b) Improve the quality, efficiency, and operation of state
services by utilizing innovative solutions and pilot projects.
   (c) Allow the state to enter into mutually beneficial agreements
whereby the state will benefit from the deployment of new
technologies.
   (d) Increase public awareness of innovative solutions and pilot
projects being developed and used by businesses and nonprofit
organizations in this state.
   (e) Create new jobs in this state.
   12099.1.  For purposes of this article, the following terms shall
be defined as follows:
   (a) "Demonstration and testing project" means a project involving
a request from a business or nonprofit organization to make state
resources available as a forum for testing, evaluating, or
demonstrating an innovative solution of the business or nonprofit
organization before the innovative solution is deployed in the
marketplace.
   (b) "Innovative solution" means a product, process, service, or
information technology that is new or improves upon an existing
product, process, service, or information technology and is not
presently available in the marketplace. An innovative solution shall
be expected to deliver identifiable and measurable benefits compared
to current practices in the areas of environmental benefits,
performance, overall process reliability and control, or economic and
social benefits. An innovative solution shall also consist of a
specific and identifiable research component.
   (c) "Mutual development opportunity project" means a partnership
agreement that the office has identified as a potential candidate for
making a contribution toward economic development in the state or
has the potential for a beneficial use by the state.
   (d) "Partnership agreement" means an agreement between a state
agency and a business or nonprofit organization to test, evaluate, or
demonstrate an innovative solution or pilot project. A partnership
agreement shall involve a pilot project, a demonstration and testing
project, or a mutual development opportunity project, as specified in
the scope of work.
   (e) "Pilot project" means a product, process, service, or
information technology that is currently available in the marketplace
and which the state may want to explore for further application to
improve state services.
   12099.2.  The Director of the Governor's Office of Business and
Economic Development shall designate a partnerships coordinator, who
shall do all of the following:
   (a) Provide guidance to the office and other state agencies
regarding the interpretation and the application of the CalDEMO
Program.
   (b) Review and assist in the development of proposed partnership
agreements.
   (c) Track and report on all approved partnership agreements. The
partnerships coordinator shall report to the office regarding the
implementation and administration of the CalDEMO Program and the
status of all approved partnership agreements.
   (d) Serve as a contact person for inquiries about the CalDEMO
Program and serve as a liaison to connect potential partners with
appropriate state agencies.
   (e) Propose regulations, for adoption by the office, that are
necessary for the implementation of this article.
   12099.3.  To ensure the efficient implementation and
administration of the CalDEMO Program, the office shall do both of
the following:
   (a) Approve or disapprove applications and proposed partnership
agreements for the CalDEMO Program based on merit.
   (b) Review applications and proposed partnership agreements for
consistency with Section 12099.
   12099.4.  (a) The office shall develop an application for the
CalDemo Program.
   (b) The application shall require the business or nonprofit
organization to provide the following information:
   (1) A description of the business or nonprofit organization.
   (2) The goals of the business or nonprofit organization and the
state, for the purpose of demonstrating that the proposed partnership
agreement will be mutually beneficial to the parties to the
agreement.
   (3) A description of the innovative solution or pilot project,
including whether the proposed partnership agreement shall be
identified as a pilot project, demonstration and testing project, or
a mutual development opportunity project.
   (4) Established performance measures that will be used to evaluate
the success of the project at the conclusion of the agreement.
   (5) A list of the state resources that will be used to demonstrate
the innovative solution or pilot project, including state-owned
land, facilities, equipment, rights-of-way, or data that is
reasonably necessary.
   (6) Any special consideration that should be taken into account.
   (7) Any other information deemed relevant by the office, including
information necessary for the office to prepare the report as
required by this section.
   (8) Identification of a problem the proposed innovative solution
or pilot project seeks to address.
   (9) How the innovative solution or pilot project can benefit the
state.
   (c) The partnerships coordinator shall prioritize applications
based on the following criteria:
   (1) Consistency of the goals of the proposed partnership agreement
with the purposes of this act.
   (2) Consistency of the proposed partnership agreement with
existing laws, regulations, and practices.
   (3) Balance between the potential benefits of the proposed
partnership agreement to the state and the level of risk assumed by
the state.
   (4) Preference for startup companies based in California. For
purposes of this section, "startup companies based in California"
means a business or nonprofit organization that has its headquarters
in California and produces the innovative solution or pilot project
to be demonstrated in California or a business or nonprofit
organization that has an office in California and substantially
manufactures the innovative solution or pilot project in California
or substantially develops the research for the innovative solution or
pilot project to be demonstrated in California.
   (5) The ease at which the project can be installed, set up,
utilized, or integrated for purposes of demonstration.
   (d) The office may charge a fee to the business or nonprofit
organization to process the application that shall not exceed the
reasonable costs to the office.
   12099.5.  (a) After an application is submitted to the office, the
partnerships coordinator shall identify the appropriate state
agencies and coordinate and oversee the development of a partnership
agreement between the state agency and the business or nonprofit
organization. Partnership agreements shall fulfill the goals of
Section 12099.
   (b) State agencies shall actively engage with the business or
nonprofit organization to assist in the development of a partnership
agreement. State agencies shall act in good faith to develop a
reasonable partnership agreement with the business or nonprofit
organization.
   (c) A proposed partnership agreement shall include, but is not
limited to, the following requirements:
   (1) The proposed partnership agreement shall be identified as a
pilot project, demonstration and testing project, or a mutual
development opportunity project.
   (2) The proposed partnership agreement shall include a termination
date.
   (3) The proposed partnership agreement shall clearly state the
goals of the business or nonprofit organization and the state, for
purposes of demonstrating that the proposed partnership agreement
will be mutually beneficial to the parties to the agreement.
   (4) The proposed partnership agreement shall include a set of
established performance measures that can be used to evaluate the
success of the project at the conclusion of the agreement.
   (5) The business or nonprofit organization shall agree to
indemnify the state against any liability or damages that may result
from the project. The state agency may agree, in recognition of an
identifiable public benefit to be received by the state under the
agreement, to share potential liability after consulting with other
appropriate state agencies.
   (6) The proposed partnership agreement shall authorize the state
agency to discontinue the project if it finds that the business or
nonprofit organization has falsified or withheld information that
should have been disclosed.
   (7) The proposed partnership agreement shall clearly state the
costs to be incurred by the state and provide the methodology used to
determine the costs.
   (d) For purposes of a proposed partnership agreement, the state
agency may do all of the following:
   (1) Authorize the temporary use of state-owned land, facilities,
equipment, rights-of-way, or data that are reasonably necessary in
conjunction with the project.
   (2) Absorb a portion of the costs to implement the project, in an
amount not to exceed the anticipated benefits to the state of
participating in the project.
   (3) Agree to nondisclosure agreements relating to proprietary
information that the state acquires from a business or nonprofit
organization during the implementation of a partnership agreement.
   (4) Perform a safety assessment of the project. The state agency
may enter into a memorandum of understanding with a qualified state
entity to provide the safety assessment. If the state agency has
reason to believe that the project is unsafe or likely to cause any
danger, the state agency shall discontinue the project.
   12099.6.  (a) No later than 60 days after the termination date,
the state agency shall develop a demonstration report and submit it
to the office. The demonstration report shall include all of the
following:
   (1) An evaluation of the project, the business or nonprofit
organization, and whether the state agency has sufficient reason to
believe that the demonstration successfully resulted in a public
benefit.
   (2) Difficulties that arose in demonstrating the project, if any.
This includes, but is not limited to, difficulties with the
innovative solution or pilot project, and during the installation,
setup, or predemonstration phase.
   (3) An evaluation of whether the project met all of the
performance criteria in the partnership agreement.
   (4) The value of contributions given to the business or nonprofit
organization by the state.
   (5) Other relevant information as necessary or requested by the
office.
   (b) Within 20 days of receiving the demonstration report, the
office shall make any changes to the demonstration report as
necessary, and post the report on its Internet Web site.
   12099.7.  (a) The California Demonstrated Innovation Seal is
established to recognize a business or nonprofit organization that
has developed an exceptional innovative solution or pilot project and
successfully deployed and demonstrated its utility. The office shall
award the seal to a business or nonprofit organization after the
termination of a successful partnership agreement. In making its
determination, the office shall consider the demonstration report and
any other relevant information.
   (b) The office's determination shall be posted on it's Internet
Web site.
   (c) The Department of General Services shall include innovative
solutions and pilot projects that have been awarded the California
Demonstrated Innovation Seal in the department's next price book and
in an addendum to the existing price book that the department shall
provide to all state agencies. It is the intent of the Legislature
that the department develop a Demonstrated Innovations catalog which
includes innovative solutions and pilot projects that have received
the California Demonstrated Innovation Seal.
   (d) The Department of General Services shall produce the
California Demonstrated Innovation Seal. The department may charge a
fee, which shall not exceed the reasonable costs to the department,
to the business or nonprofit organization receiving the seal to
produce it.
   12099.8.  (a) The office may enter into a partnership with
foundations or private sector sponsors to solicit funding for the
implementation of the CalDEMO Program. It is the intent of the
Legislature that the office seek private sector sponsors and partners
and foundations to solicit funding for the implementation of the
CalDEMO Program consistent with paragraph (f) of Section 12096.3.
   (b) The office may enter into a memorandum of understanding or an
interagency agreement to obtain technical, scientific, or
administrative services or expertise to support the CalDEMO Program.
It is the intent of the Legislature that state agencies with
appropriate subject matter expertise provide input to the office when
requested.
   (c) The office may enter into an agreement, including a memorandum
of understanding, with another state agency or organization for the
purpose of implementing the CalDEMO Program. The agreement shall be
entered into for the purpose of reducing costs to the state, reducing
or sharing risk, or obtaining technical, scientific, or
administrative services or expertise. The agreement shall also
specify, including, but not limited to, the metrics to be evaluated
in determining whether the project is successful.
   12099.9.  Any party to a partnership agreement, including
employees or potential subcontractors, shall comply with all
applicable laws, regulations, and any other requirements pertaining
to the implementation and execution of the partnership agreement.
   12100.  If at any time a representative of a business or nonprofit
organization is found to have falsified or withheld information that
should have been disclosed, the state agency may discontinue the
project and assess a fine of up to ten thousand dollars ($10,000)
against the business or nonprofit organization for a failure to
comply with this section.
   12100.1.  This article shall remain in effect only until January
1, 2019, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2019, deletes or extends
that date.