BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
AB 1646 (Campos) - California Demonstration of Emerging Market
Opportunities Act.
Amended: June 25, 2012 Policy Vote: B,P&ED 6-1
Urgency: No Mandate: No
Hearing Date: August 16, 2012 Consultant:
Bob Franzoia
SUSPENSE FILE.
Bill Summary: AB 1646 would require the Governor's Office of
Business and Economic Development (GO-Biz) to implement and
administer the California Demonstration of Emerging Market
Opportunities (CalDEMO) Act, which
Fiscal Impact: Estimated $250,000 to $300,000 annually from the
General Fund to GO-Biz to implement and administer the act.
Fees charged by GO-Biz may offset some administrative
costs.
Unknown costs annually from the General Fund and special
funds for state agencies to review and approve proposals.
GO-Biz may not approve more than ten demonstration
agreements annually.
The provisions of this bill would sunset on January 1,
2019.
Background: The Innovation Hub (iHub) initiative within GO-Biz
offers a regional approach to improving the state's national and
global competitiveness by stimulating partnerships, economic
development, and job creation around specific research clusters
through 12 state-designated iHubs. The iHubs 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. It appears the CalDEMO process
would focus on partnering businesses and nonprofit organizations
with state agencies for the purpose of implementing a
demonstration or pilot project.
The California Energy Commission's Energy Innovations Small
Grant Program provides up to $95,000 for hardware projects and
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$50,000 for modeling projects to small businesses, non-profits,
individuals and academic institutions to conduct research that
establishes the feasibility of new, innovative energy concepts.
Research projects must target one of the Public Interest Energy
Research research and development areas, address a California
energy problem and provide a potential benefit to California
electric and natural gas ratepayers.
To encourage participation in the program the application and
award process has been simplified and assistance is available in
gaining access to technical experts
Proposed Law: This bill would define a demonstration project to
mean 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.
GO-Biz would be required to designate an innovation partnership
coordinator who shall provide guidance to GO-Biz and state
agencies, assist in the development of demonstration agreements,
maintain oversight of demonstration agreements, serve as a
liaison about the CalDEMO program, develop and issue guidelines
and establish policies and procedures.
GO-Biz may enter into a partnership with foundations or private
sector sponsors to solicit funding for the implementation of the
CalDEMO program.
Related Legislation: AB 2012 (J Perez) would transfer the
authority for undertaking international trade and foreign
investment activities from the Business, Transportation and
Housing Agency to GO-Biz, including establishing any
international trade and investment office. In addition, the
bill transfers the responsibility for establishing an
Internet-based permit assistance center from the Secretary of
the California Environmental Protection Agency to GO-Biz. That
bill is on today's file.
Staff Comments: It is unclear how GO-Biz will implement the cap
of ten projects. It could incur significant costs if the
innovation partnership coordinator and the relevant state
agencies review all applications before determining which ten
projects may be funded, assuming funding can be secured, or it
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may approve the first ten projects submitted. While less state
workload intensive, this approach may disadvantage more viable
demonstration or pilot projects.