BILL NUMBER: AB 1646 AMENDED
BILL TEXT
AMENDED IN SENATE JUNE 25, 2012
AMENDED IN ASSEMBLY MAY 25, 2012
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)
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 , as defined, to test,
evaluate, or demonstrate innovative solutions pursuant to
demonstration projects and pilot projects, as defined.
The bill would prohibit the office from approving more than 10
demonstratio n agreements per year. 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, 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These provisions would be repealed as of January 1, 2019.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.
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 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 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. An innovative
solution shall be expected to deliver identifiable and measurable
environmental, economic, or social benefits, enhanced performance, or
increases to the overall process reliability or control. An
innovative solution shall also consist of a specific and identifiable
research component.
(c) "Demonstration agreement" means an agreement between a state
agency and a business or nonprofit organization to test, evaluate, or
demonstrate an innovative solution pursuant to a demonstration
project or pilot project.
(d) "Pilot 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 that is currently available in the marketplace.
(e) "Business or nonprofit organization" means a business or
nonprofit organization primarily engaged in activities described in
Codes 11, 213111, 213112, 213113, 213114, 213115, 221119, 221122,
221210, 221310, 237110, 237130, 237310, 237990, 48-49, 484110,
485112, 511199, 511210, 512110, 512120, 512240, 512290, 518210,
541310, 541320, 541330, 541340, 541350, 541360, 541370, 541380,
541420, 541430, 541490, 541511, 541512, 541513, 541519, 541614,
541618, 541620, 541690, 541711, 541712, 541720, 541921, 541922,
541930, 541990, 811111, 811112, 811113, 811118, 811121, 811198,
811211, 811212, 811213, 811219, 811310, 811411, 811412, 811420,
811490, 812921, and 812922 of the North American Industry
Classification System Manual published by the United States Office of
Management and Budget, 2012 edition.
12099.2. The Director of the Governor's Office of Business and
Economic Development shall designate 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
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 issue a request 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) Background on the business or nonprofit organization
submitting the proposal.
(2) A description of the proposed project, including whether the
proposed project is a pilot project 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 requested state resources that could be used to
implement the project, including state-owned land, facilities,
equipment, rights-of-way, or data that is reasonably necessary.
(6) Certification that the proposed project meets all current
applicable industry standards, laws, and applicable 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.
(8) The office shall target the sectors for participation in the
CalDEMO Program. The office may limit applicants or applications by
any factors it deems appropriate, given the resources available to
the office to administer the program.
(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 may establish guidelines to implement the
requirements of this article.
12099.4. (a) To ensure the efficient implementation and
administration of the CalDEMO Program, the innovation partnership
coordinator may 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
scope of work that sets forth details on how the demonstration
project or pilot project is to be implemented.
(c) A proposed demonstration agreement shall include, but is not
limited to, the following requirements:
(1) The proposed demonstration agreement shall identify the
project as a pilot project or demonstration project.
(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 performance
measures that will be used by the business or nonprofit organization
to evaluate the project. 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 agrees to indemnify the
state against any liability or damages that may result from the
project.
(6) The proposed demonstration agreement shall 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 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 to the state for any risks.
(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 include a
certification that the demonstration project or pilot project is safe
for state employees and the public.
(10) The proposed demonstration agreement shall include 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) 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. 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 shall provide the final
approval of the demonstration agreement.
(b) The office shall not approve more than 10 demonstration
agreements per year.
(b)
(c) 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)
(d) The office shall biennially post on its Internet
Web site information on the progress of the program.
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.