BILL NUMBER: AB 1646 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY APRIL 11, 2012
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 amended, 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 demonstration
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.
project, as specified. These provisions would
remain operative only until be repealed as of
January 1, 2019 , and as of that date is repealed, unless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) Despite California leading the nation in innovation and the
number of patents filed annually, emerging small technology
businesses face a myriad of challenges throughout their development
process.
(c) In order to achieve the desired growth, innovative 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. This may
be accomplished by using underutilized state resources.
(b)
(d) 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.
(e) The California Demonstration of Emerging Market Opportunities
(CalDEMO) Program shall be designed to provide all of the following:
(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.
(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) New markets for innovative products.
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 demonstration 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 "Demonstration
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
demonstration 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 , as necessary, in the
development of proposed partnership
demonstration agreements.
(c) Track and report on all approved partnership
demonstration 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 demonstration
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.
(e) Develop and issue guidelines that are necessary for the
fulfillment 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. 12099.3. (a) The office
shall develop an application issue a request
from proposals from businesses and nonprofit organizations for
the CalDemo Program.
(b) The application shall require the business
business's or nonprofit organization to provide
organization's proposal shall include, but is not
limited to, 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 demonstration 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
demonstration agreement shall be identified as a pilot project,
demonstration and testing project, or a mutual development
opportunity project.
(4) Established performance 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.
(10) Identification of all current applicable industry standards,
laws, and applicable regulations, and whether the innovative solution
or pilot project meets those standards, laws, or regulations.
(4) Preference
(c) The office shall provide a
preference for startup companies based in California. For
purposes of this section, "startup companies based in California"
means a small business or nonprofit organization
, as defined in paragraph (1) of subdivision (d) of
Section 14837, 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
proposal that shall not exceed the reasonable costs to
the office.
12099.4. (a) To ensure the efficient implementation and
administration of the CalDEMO Program, the partnerships coordinator
shall do all of the following:
(1) Establish an investment advisory group to review and comment
on proposals.
(2) Upon making the determination that the proposal may proceed
forward,
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 demonstration agreement between the
state agency and the business or nonprofit organization.
Partnership agreements shall fulfill the goals of Section 12099.
(b) The business or nonprofit organization
participating in the program shall develop a demonstration agreement
and scope of work that sets forth details on how the innovative
solution or pilot project is to be demonstrated in consultation with
the appropriate state agencies. State agencies shall
actively engage with the business or nonprofit organization
act in good faith to assist in the development of a
partnership demonstration agreement.
State agencies shall act in good faith to develop a
reasonable partnership agreement with the business or nonprofit
organization.
(c) A proposed partnership demonstration
agreement shall include, but is not limited to, the following
requirements:
(1) The proposed partnership demonstration
agreement shall be identified as a pilot project,
demonstration and testing project, or a mutual development
opportunity project.
(2) The proposed partnership demonstration
agreement shall include a termination date.
(3) The proposed partnership demonstration
agreement shall clearly state the goals of the business or
nonprofit organization and the state , for
purposes of demonstrating that the proposed partnership
demonstration agreement will be mutually
beneficial to the parties to the agreement.
(4) The proposed partnership demonstration
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 demonstration
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 demonstration agreement may require the business
or nonprofit organization to purchase insurance coverage necessary to
cover the costs of any risks.
(7)
(8) The proposed partnership
demonstration agreement shall clearly state the costs to be
incurred by the state and provide the methodology used to determine
the costs.
(9) The proposed demonstration agreement shall require the
business or nonprofit organization to certify that the innovative
solution or pilot project is safe for demonstration.
(10) The proposed demonstration agreement shall include timelines
and other metrics.
(d) For purposes of a proposed partnership
demonstration agreement, the state agency may do all of the
following:
(1) Authorize With approval of the
appropriate state agency, 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
demonstration 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.
12099.5. (a) Demonstration agreements must be approved by all
participating state agencies. After receiving approval from the
participating state agencies, the office must approve of the
demonstration agreement.
(b) The office shall post on its Internet Web site a brief
description of each demonstration agreement. The office shall not
make available any proprietary information that is subject to a
nondisclosure agreement under paragraph (3) of subdivision (d) of
Section 12099.4.
(c) The office shall report to the Assembly Committee on Jobs,
Economic Development, and the Economy and the Senate Committee on
Business, Professions and Economic Development biennially on the
progress of the program. This report may include information on the
state of the demonstration agreements, challenges to program
implementation, and recommendations for program improvement.
12099.8. 12099.6. (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.
12099.7. It is the intent of the Legislature that the state shall
not seek to co-own or procure any share of rights in the
intellectual property that is developed during participation in the
program.
12099.9. 12099.8. Any party to a
partnership demonstration 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 demonstration agreement.
12100. 12099.9. If at any time a
representative of a business or nonprofit organization is found
by clear and convincing evidence 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. 12100. 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 .
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CORRECTIONS Text--Pages 7, 8, 9, and 12.
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