BILL ANALYSIS Ó
Senate Appropriations Committee Fiscal Summary
Senator Kevin de León, Chair
AB 53 (Perez) - Governor's Office of Business and Economic
Development: Biennial California Economic Development Strategic
Plan
Amended: July 3, 2013 Policy Vote: BP&ED 8-1
Urgency: No Mandate: No
Hearing Date: August 12, 2013
Consultant: Robert Ingenito
This bill meets the criteria for referral to the Suspense File.
Bill Summary: AB 53 would require the Governor's Office of
Business and Economic Development (GO-Biz) to lead the
preparation of a biennial California Economic Development
Strategic Plan, as specified. Additionally, the Employment
Development Department (EDD) would be required to post a copy of
any notice provided by an employer of a mass layoff, relocation
or termination.
Fiscal Impact: GO-Biz estimates that it would incur a cost of
$500,000 (General Fund) to implement the provisions of the bill.
EDD would incur minor and absorbable costs.
Background: In April 2010, the Governor's Office of Economic
Development was established to provide a One-Stop-Shop for
serving the needs of businesses and economic developers. While
initially established through Executive Order S-01-10, the
office was later codified and renamed as the Governor's Office
of Business and Economic Development (GO-Biz), in AB 29, Chapter
475, Statues of 2010. In 2012, GO-Biz directly assisted 5,308
companies, resulting in the creation and/or retention of 9,050
jobs and $1.45 billion in investments.
Among other programs, GO-Biz provides permit and other technical
assistance for new and expanding businesses, as well as
administering the California Innovation Hub Program in
partnership with the statewide network of 12 regional economic
development partnerships. The Office of the Small Business
Advocate is located at GO-Biz and the state's international
trade and foreign investment activities are coordinated through
GO-Biz.
AB 53 (Perez)
Page 1
In 2012, a comprehensive reorganization of the state's
administrative structure was undertaken. Key changes included
the dismantling of the Business, Transportation and Housing
Agency (BTH) and further consolidating of GO-Biz' position as
the state's lead in economic development. Effective July 1,
2013, GO-Biz will have administrative authority for more
economic development related programs and services including the
Small Business Loan Guarantee Program and the Infrastructure and
Economic Development Bank.
Proposed Law: This bill would require GO-Biz to commission a
study as part of the California Economic Development Strategic
Plan. The study shall include, but not be limited to, all of the
following:
Recommendations regarding an economic development
strategic plan for the state, covering a two-year period
for the first report and a three-year time period for
subsequent reports and containing a statement of economic
goals for the state.
Governmental and nongovernmental impediments to economic
development and a list of legislative, regulatory, and
administrative reforms necessary to ease those impediments
and improvements to the business climate and economy of the
state.
An evaluation of the effectiveness of the state's
economic development programs.
A list of key industries in which the state shall focus
its economic development efforts, and strategies to foster
job growth and economic development covering all state
agencies, offices, boards, and commissions that have
economic development responsibilities.
An evaluation of policies and goals developed at the
regional level.
Strengths and weaknesses of the California economy and
the state's prospects for future economic prosperity.
Existing, emerging, and declining industries in
AB 53 (Perez)
Page 2
California and elsewhere.
Effectiveness of California's economic development
programs in creating and retaining jobs and attracting
industries.
Adequacy of state and local physical and economic
infrastructure.
Opportunities to leverage federal resources for state
priorities.
Tactics for attracting private capital to the state and
investment in state priority areas.
Additionally, the bill would do all of the following:
Provide that upon completion of the study, GO-Biz shall
convene a stakeholder advisory group consisting of
representatives from businesses, labor unions,
organizations representing the interests of diverse ethnic
and gender groups, local government leaders, academic
economists and business professors, chambers of commerce
and other business organizations, economic development
organizations, government agencies and key industries to
assist with evaluating and preparing the California
Economic Development Strategy.
Require GO-Biz to submit a report of its findings and
recommendations to the Governor and Legislature no later
than October 1, 2016 and every three years thereafter.
Add GO-Biz to the list of entities that an employer must
provide notice of any mass layoff, relocation, or
termination.
Related Legislation: AB 1233 (V. Manuel Pérez) of 2012, would
have required the Director of GO-Biz to prepare a five-year
economic and workforce development strategy. This bill was held
in the Assembly Appropriations Committee.
AB 699 (Portantino and V. Manuel Pérez) of 2009, would have
updated the requirements for the development of a State Economic
AB 53 (Perez)
Page 3
Development Strategy. This bill was held in Assembly
Appropriations Committee.
Staff Comments: Typically, a comprehensive economic development
strategy and coordinating strategic plan allows for the
identification of important issues and engaging appropriate
stakeholders for the purpose of prioritizing key state actions.
The last plan was prepared in 2002. Previously, current law
established the Economic Strategy Panel (ESP) which was tasked
with preparing a California Economic Development Strategic Plan.
The ESP was supported by the EDD and Department of Industrial
Relations. As part of a larger Administration proposal to reduce
state government and achieve savings, the ESP was eliminated in
the 2011-12 Budget (AB 119, Committee on Budget, Chapter 31,
Statutes of 2011). This bill tasks GO-Biz with similar
requirements of the former ESP.
GO-Biz estimates costs to be $500,000, to contract out for the
study. Go-Biz would use existing resources for convening the
advisory group, compiling the report's information, and
disseminating to the various recipients.