BILL NUMBER: AB 1646 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MAY 2, 2012
AMENDED IN ASSEMBLY APRIL 11, 2012
INTRODUCED BY Assembly Member Campos
( Coauthors: Assembly Members
Alejo and V. Manuel Pérez )
FEBRUARY 13, 2012
An act to add and repeal Article 6 (commencing with Section 12099)
to of 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 demonstration agreements, as defined, with specified businesses
and nonprofit organizations to test, evaluate, or demonstrate
innovative solutions pursuant to demonstration projects
and pilot projects, as defined. 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 aproject a project , as
specified. These provisions would be repealed as of January 1, 2019.
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.
(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.
(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. (a) 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.
(b) The CalDEMO Program shall be designed to provide businesses
and nonprofit organizations with the opportunity to do all of the
following:
(1) Experience engaging with the state in the process of planning,
deploying, demonstrating, and maintaining their innovation.
(2) Obtain high-profile public exposure for the business or
nonprofit organization demonstrating an innovative solution or pilot
project.
(3) Obtain data collection on a project's real-time performance in
a public setting.
(4) Demonstrate that their innovation can be deployed, operated,
and maintained in a real-world setting.
(5) Demonstrate that their business or nonprofit organization has
the capacity to sufficiently plan, deploy, operate, and maintain
their innovation in a real-world setting.
(6) Access new markets for innovative products.
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 before being 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
environmental, economic, or social benefits
compared to current practices in the areas of environmental benefits
, enhanced performance, or increases to the
overall process reliability and or
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 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)
(c) "Demonstration agreement" means an agreement
between a state agency and a business or nonprofit organization to
test, evaluate, or demonstrate an innovative solution or
pursuant to a demonstration project or pilot
project. A 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)
(d) "Pilot project" means a product, process,
service, or information technology 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 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
an innovation partnership 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 demonstration agreements.
(c) Track and report on all approved demonstration agreements. The
partnerships innovation partnership
coordinator shall report to the office regarding the implementation
and administration of the CalDEMO Program and the status of all
approved demonstration agreements.
(d) Serve as a contact person for inquiries about the CalDEMO
Program and serve as a liaison to connect potential business and
nonprofit organization partners with appropriate state
agencies.
(e) Develop and issue guidelines that are necessary for the
fulfillment of this article.
(f) Establish in the State Administrative Manual policies and
procedures for state agencies to engage with the CalDEMO Program.
12099.3. (a) (1) The office shall , at
least annually, issue a request from
for proposals from businesses and nonprofit organizations for
the CalDemo Program.
(2) A business or nonprofit organization may, at any time, submit
a proposal for a demonstration project or pilot project to the
office. If the innovation partnership coordinator has the resources,
the coordinator shall review the proposal.
(b) The business's or nonprofit organization's proposal shall
include, but is not limited to, the following information:
(1) A description of Background on
the business or nonprofit organization submitting the proposal
.
(2) The goals of the business or nonprofit organization and the
state, for the purpose of demonstrating that the proposed
demonstration agreement will be mutually beneficial to the parties to
the agreement.
(3)
(2) A description of the innovative solution
or pilot proposed project, including whether the
proposed demonstration agreement shall be identified as
project is a pilot project ,
demonstration and testing project, or a mutual development
opportunity or a demonstration project.
(3) Identification of a problem that the proposed innovative
solution seeks to address.
(4) Performance measures that will be used to evaluate the success
of the project at the conclusion of the agreement.
(5) A list of the requested state
resources that will could be used to
demonstrate the innovative solution or pilot
implement the 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.
(10) Identification of
(6) Certification that the proposed
project meets all current applicable industry standards, laws,
and applicable regulations , and whether the innovative
solution or pilot project meets those standards, laws, or regulations
.
(7) Any other information deemed relevant by the office, including
information necessary for the office to prepare the report as
required by this article.
(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, 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 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.
(d) The office may charge a fee to the business or nonprofit
organization to process the proposal that shall not exceed the
reasonable costs to the office.
(e) The office shall establish guidelines to implement the
requirements of this article.
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
demonstration agreement between the state agency and the business or
nonprofit organization.
12099.4. (a) To ensure the efficient
implementation and administration of the CalDEMO Program, the
innovation partnership coordinator shall do all of the following:
(1) Establish an investment advisory group to review and comment
on proposals.
(2) Review proposals, including comments from the advisory group,
and make a determination that the proposal meets the threshold
requirements of the law and guidelines adopted pursuant to this
article.
(3) Upon making the determination in paragraph (2), the innovation
partnership coordinator shall identify and refer the proposal to the
appropriate state agency or agencies. If the innovation partnership
coordinator determines that it is appropriate to refer the proposal
to more than one agency, the coordinator shall identify a lead state
agency for the purpose of the review.
(4) The innovation partnership coordinator shall convene an
initial meeting with the business or nonprofit organization and the
appropriate state agency or agencies. Following the initial meeting,
the appropriate state agency or the lead state agency, in the case of
more than one agency, may hold additional meetings and request
information from the business or nonprofit organization. The
appropriate state agency or lead agency shall keep the innovation
partnership coordinator informed of its discussions with the business
or nonprofit organization.
(5) If the appropriate state agency or agencies approve of the
proposal, the innovation partnership coordinator shall coordinate and
oversee the development of a demonstration agreement between the
appropriate state agency and the business or nonprofit organization.
A state agency shall act in good faith to assist in the development
of a demonstration agreement.
(b) The business or nonprofit organization participating in the
program shall , pursuant to guidance provided by the innovation
partnership coordinator and appropriate state agencies, develop
a demonstration agreement and scope of work that
sets forth details on how the innovative solution
demonstration project or pilot project is to be
demonstrated in consultation with the appropriate state agencies
implemented . State agencies shall act
in good faith to assist in the development of a demonstration
agreement.
(c) A proposed demonstration agreement shall include, but is not
limited to, the following requirements:
(1) The proposed demonstration agreement shall be
identified identify the project as a pilot
project , demonstration and testing project, or a mutual
development opportunity or demonstration
project.
(2) The proposed demonstration agreement shall include a
termination date.
(3) The proposed demonstration agreement shall clearly state the
goals of the business or nonprofit organization, for purposes of
demonstrating that the proposed demonstration agreement will be
mutually beneficial to the parties to the agreement.
(2) The proposed demonstration agreement shall describe the
project, including, but not limited to, a description of the types of
activities to be undertaken, facilities and resources to be used,
and relevant timelines, including a start and termination date.
(3) The proposed demonstration agreement shall identify the
participating state agency or agencies.
(4) The proposed demonstration agreement shall include a
set of performance measures that can
will be used by the business or nonprofit
organization to evaluate the success of the
project at the conclusion of the agreement .
The data obtained during the implementation of the project
may assist the state to better manage its own resources.
(5) The proposed demonstration agreement shall include a
provision that the business or nonprofit
organization shall agree agrees to
indemnify the state against any liability or damages that may result
from the project.
(6) The proposed demonstration agreement shall authorize
include a provision that authorizes the innovation
partnership coordinator or 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
shall include a provision that the business or
nonprofit organization agrees to purchase insurance
coverage necessary , as determined by the state, to cover
the costs of to the state for any
risks.
(8) The proposed demonstration agreement shall clearly state the
costs to be incurred by the state and provide the methodology used to
determine the costs.
(8) The proposed demonstration agreement shall include a provision
that sets the maximum costs that the state can incur, including 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 include a certification that the
demonstration project or pilot project is safe for
demonstration for state employees and the public
.
(10) The proposed demonstration agreement shall include
timelines and other metrics other information or
provisions determined by the innovation partnership coordinator to be
relevant to the successful and safe undertaking of the project
.
(d) For purposes of a proposed demonstration agreement, the state
agency may do all of the following:
(1) 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 To the extent that the state
may benefit from a demonstration project or pilot project, the state
agency may 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 demonstration agreement.
(4) Perform or cause to be performed 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.
12099.5. (a) Demonstration agreements must be approved by all
participating state agencies. After receiving approval from the
participating state agencies, the office must approve
shall provide the final approval of the
demonstration agreement.
(b) The office shall post on its Internet Web site a brief
description of each demonstration agreement , including
information on anticipated outcomes . 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 biennially post
on its Internet Web site information on the progress of the program.
Within 30 days of positing this information, the office shall send a
letter 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 notifying the committees that
the information is available and where the information is located on
the office's Internet Web site . This report
The posted information may include information on the
state of the demonstration agreements, challenges to program
implementation, and recommendations for program improvement.
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.
12099.8. Any party to a 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 demonstration agreement.
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. This article shall remain in effect only until January 1,
2019, and as of that date is repealed.