BILL ANALYSIS �
AB 1646
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ASSEMBLY THIRD READING
AB 1646 (Campos)
As Amended May 25, 2012
Majority vote
ECONOMIC DEVELOPMENT 4-1 APPROPRIATIONS 12-5
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|Ayes:|V. Manuel P�rez, Beall, |Ayes:|Fuentes, Blumenfield, |
| |Block, Hueso | |Bradford, Charles |
| | | |Calderon, Campos, Davis, |
| | | |Gatto, Ammiano, Hill, |
| | | |Lara, Mitchell, Solorio |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Morrell |Nays:|Harkey, Donnelly, |
| | | |Nielsen, Norby, Wagner |
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SUMMARY : Establishes the California Demonstration of Emerging
Market Opportunities Program (CalDEMO Program), within the
Governor's Office of Business and Economic Development (GO-Biz),
for the purpose of facilitating agreements with for-profit and
nonprofit organizations to use state facilities and other
resources to test and deploy at scale innovative products,
services and processes. Specifically, this bill :
1)Expresses legislative findings and declarations that CalDEMO
can provide businesses and nonprofit organizations with:
a) Experience engaging with the state in the process of
planning, deploying, demonstrating, and maintaining their
innovation;
b) High profile public exposure for the business or
nonprofit organization;
c) Data collection on an innovation's real-time performance
in a public setting;
d) An opportunity for a business or nonprofit organization
to demonstrate successfully that its innovation can be
deployed, operated, and maintained in a real-world setting;
and,
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e) The creation of new markets for innovative businesses
and nonprofit organizations.
2)Designates the Governor's Office of Business and Economic
Development (GO-Biz) as the administrator of the CalDEMO
Program. Projects are to be selected from applications
submitted by businesses and nonprofit organizations for the
use of state resources, including lands, data and state
facilities. A preference is provided for California start-up
companies. Successful applications are required to be approved
by both GO-Biz and all participating state agencies. Each
project is to be governed through a demonstration agreement
and scope of work, which set forth the responsibilities of the
state and other key terms of the agreement.
3)Sunsets the authority for the CalDEMO Program on January 1,
2019.
EXISTING LAW establishes GO-Biz within the Governor's Office for
the purpose of serving as the lead state entity for economic
strategy and marketing of California on issues relating to
business development, private sector investment and economic
growth. GO-Biz also serves as the administrative oversight for
the California Business Investment Service and the Office of the
Small Business Advocate.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, initial costs to GO-Biz of developing program of
approximately $50,000. Subsequent costs to state will depend on
the number of businesses that apply. Specific costs for
successful applicants could be defrayed by the fee that can be
charged applicants.
COMMENTS : For decades, California has been known as a place
where innovation and creativity flourishes. A 2007 study on
California's global competitiveness identified eight key
dominant and emerging industry clusters including high-tech
manufacturing, biotech and clean technologies. While the report
found that the state was uniquely positioned to be a preferred
global partner in the areas of innovation, science, and
technology, the study also stated that California was facing
significant challenges from a growing talent pool in other
countries and the global redistribution of manufacturing abroad.
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The CalDEMO Act will directly aid small businesses in emerging
technology fields by allowing the state to become a partner in
the public demonstration of their innovations. Demonstrations
will provide participating firms with the ability to test and
demonstrate product viability at a commercial scale resulting in
important product development data and obtain high profile
public exposure for the innovation and innovator.
Case Study of Government as a Partner in Demonstrating New
Technologies
In June 2008, the City of San Jose (City) adopted a framework
for engaging in and evaluating public/private technology
partnerships for the purpose of testing and demonstrating
innovative products, services and processes. According to the
City's Web site, these demonstration partnerships advance the
community's goals related to obtaining a more robust and green
economy, as well as making its ongoing operations more cost
effective: "Through these partnerships, we hope to create new
markets and new jobs or/and support existing local innovators;
advance the City's Green Vision and Economic Development
Strategy; and educate the public about innovative solutions."
Under the demonstration partnership agreements, the City allows
businesses to temporarily utilize City owned land, facilities,
equipment, rights-of-way and data in order to test innovative
solutions at-scale. In some instances, the City provides
financial assistance and/or absorbs some costs for project
implementation. Another key program element is the ability for
the business to request exemption from City policies.
Examples of the types of projects which the City has approved
include street lighting, electrical charging stations and a
range of energy efficiency pilots and demonstration projects.
According to the City's demonstration program manager, the
program has resulted in mutual benefits to both the companies
who are able to demonstrate the efficacy of their technologies
and the City. During the past few years, the manager reported
that the City gained a better understanding of how technologies
can be used to manage its operational costs, lower carbon
emissions through its everyday activities and more accurately
gauge return on public investment.
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One of the City's first demonstration projects provided for the
installation of a Colomb electrical charging station across from
City Hall. From this first station, installed in 2009, the
company currently has stations in over 14 countries. This
demonstration project also helped facilitate other key
demonstration funding from the federal Department of Energy
(approximately $34 million) and the California Energy Commission
($4 million) to help with the final installation of the
equipment.
Other local governments in the Bay Area have adopted
demonstration ordinances including the Town of Los Gatos, the
County of Santa Clara and the City of Livermore. This bill
would create a similar state program for helping businesses and
nonprofit organizations test and otherwise demonstrate
innovative products, solutions and processes at scale. Members
may want to consider how a similar state demonstration program
could be integrated into this growing network of local
demonstration programs.
Reorganization
On May 3, 2012, the Governor submitted to the Legislature a
broad-based reorganization plan. Among other things, GPR 2
proposes dismantling Business, Transportation and Housing (BTH)
and the State and Consumer Services Agency (SCS) and moving
programs to other existing and new agencies. Overall, the
number of state agencies is reduced from 12 to 10. In addition,
the proposal transfers the following programs from BTH to
GO-Biz:
1)The Small Business Loan Guarantee Program;
2)The California Travel and Tourism Commission;
3)The California Film Commission;
4)The Film California First Program; and,
5)The Infrastructure and Economic Development Bank.
The Legislature has 60 days to consider the plan. The plan goes
into effect unless the Legislature takes an action to disapprove
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the plan with a majority of the Members in either house voting.
Analysis Prepared by : Toni Symonds / J., E.D. & E. /
(916)319-2090
FN: 0003925