BILL ANALYSIS �
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|SENATE RULES COMMITTEE | AB 337|
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THIRD READING
Bill No: AB 337
Author: Allen (R), et al.
Amended: 8/14/14 in Senate
Vote: 21
SENATE BUSINESS, PROF. & ECON. DEV. COMM. : 9-0, 6/16/14
AYES: Lieu, Wyland, Berryhill, Block, Corbett, Galgiani,
Hernandez, Hill, Torres
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 76-1, 1/27/14 - See last page for vote
SUBJECT : Economic development: international trade and
investment strategy
SOURCE : Author
DIGEST : This bill updates requirements for the international
trade and investment (ITI) strategy prepared by the Governor's
Office of Business and Economic Development (GO-Biz) to be based
on current and emerging market conditions and the needs of
investors, businesses, and workers to be competitive in global
markets.
Senate Floor Amendments of 8/14/14 make technical changes.
ANALYSIS :
Existing law:
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1.Establishes GO-Biz 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.
2.Specifies that GO-Biz is the primary state agency authorized
to attract foreign investments, cooperate in international
public infrastructure projects, and support California
businesses in accessing markets; and requires the Director of
GO-Biz to develop an ITI program attracting
employment-producing direct foreign investment to the state
and provides support for California businesses in accessing
international markets and increasing exports.
3.Authorizes GO-Biz to establish ITI offices outside of the U.S.
according to certain requirements.
4.Requires GO-Biz to prepare an ITI strategy and provide a
report to the Legislature on or before February 1, 2014,
updated once every five years that includes (a) policy goals,
objectives and recommendations necessary to implement a
comprehensive ITI program; (b) measurable outcomes and
timelines for the goals, objectives and actions for the ITI
program; (c) impediments to achieving goals and objectives;
(d) key stakeholder partnerships that will be used to
implement the ITI strategy; (e) options for funding; and (f)
an organizational structure for state administration of ITI
policies, programs and services.
5.Requires the Director of GO-Biz to prepare the following:
A. A budget for the ITI program and a separately stated
budget for each ITI office, with specified information.
B. A strategy and business plan for the ITI program, with
specified information, that is developed with input from
California businesses that shall include, but not be
limited to, measurable goals, objectives, and outcomes and
timelines necessary to attract employment-producing direct
foreign investment to the state and increase California
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exports.
C. A written review of the implementation of the prior
year's strategy and business plan for the ITI program that
addresses the performance of the ITI program and each ITI
office.
1.Provides that the State Controller shall not allocate any
state funds to GO-Biz for ITI activities unless the ITI
strategy has been submitted to the Legislature by May 1, 2014.
2.Establishes processes and accountability measures for GO-Biz
to accept private monies to fund, establish and operate
international trade offices. Authorizes GO-Biz to accept
private sector monies in an amount not in excess of $10,000
per donation made to the state for the purpose of promoting
ITI, subject to the Political Reform Act requirements, and not
in excess of a total of $10,000 per quarter per donor, and
specifies the purposes for which monies may be used.
3.Creates the California Economic Development Fund (Fund) in the
State Treasury for the purpose of receiving federal, state,
local and private economic development funds, and receiving
repayment of loans or grant proceeds and interest on those
loans and grants, and provides that upon appropriation by the
Legislature, monies in the Fund may be expended by GO-Biz to
provide matching funds for loans or grants to public agencies,
nonprofit organizations, and private entities, and for other
economic development purposes, consistent with the purposes
for which monies were received.
4.Specifies that GO-Biz is the primary state agency responsible
for ITI activities in areas other than those covered by the
Department of Food and Agriculture.
This bill:
1.Requires the next ITI strategy, on or before February 1, 2019,
to be based on current and emerging market conditions and the
needs of investors, businesses, and workers to be competitive
in global markets.
2.Requires the ITI strategy to include, in addition to requisite
policy goals, objectives, and recommendations, a framework
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that enables GO-Biz to evaluate on an ongoing basis, as
appropriate, current workforce, infrastructure, research and
development, and other needs of small and large firms,
including, but not limited to, highways, airports, and rail
that link businesses with the state's ports of entry and
foreign and domestic markets.
3.Authorizes GO-Biz to base the ITI strategy, to the extent
relevant and feasible, on existing studies and reports,
including, but not limited to, the Goods Movement Action Plan,
the California Strategic Workforce Development Plan, the
California Export of Recycled Materials Report, the California
Five-Year Infrastructure Plan, and the Environmental Goals and
Policy Report.
Background
Infrastructure needs and prior evaluations . This bill allows
GO-Biz to base the state's ITI strategy on the following studies
and reports:
Goods Movement Action Plan (GMAP) . In 2006, California voters
approved Proposition 1B, the Highway Safety, Traffic
Reduction, Air Quality, and Port Security Bond Act of 2006 to
authorize $19.925 billion of state general obligation bonds
for specified purposes. Proposition 1B required the
California Transportation Commission (CTC) to consult a trade
infrastructure and goods movement plan submitted to CTC by the
Secretary of the former Business, Transportation and Housing
Agency and California Environmental Protection Agency
(Cal/EPA) in determining the allocation of around $3 billion
of the over $19 billion authorized by the bond. The GMAP was
issued in 2007 as a comprehensive plan to address economic and
environmental issues associated with moving goods via the
state's highways, railways, and ports. Last year, the Freight
Mobility Plan was created to comply with the federally enacted
Moving Ahead for Progress in the 21st Century Act, known as
MAP-21 which authorizes federal transportation funding to
states through September 30, 2014. The new California plan is
intended to provide a comprehensive plan to govern the state's
short- and long-term planning activities and capital
investments relating to freight movement.
California Strategic Workforce Development Plan . The federal
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Workforce Investment Act (WIA) requires the Governor to submit
a WIA/Wagner-Peyser Act State Plan to the United States
Department of Labor. This plan outlines a five-year strategy
for the investment of federal workforce training and
employment services dollars. SB 293 (Ducheny, Chapter 630,
Statutes of 2006) required the California Workforce Investment
Board (CWIB) to collaborate with the Chancellor of the
California Community Colleges, the California Department of
Education, other appropriate state agencies, and local
workforce investment boards to develop a comprehensive state
plan that serves as a framework for public policy, fiscal
investment, and operation of all state labor exchange,
workforce education, and training programs. The current plan
prepared by the CWIB for 2013-2017, Shared Strategy for Shared
Prosperity, states that public and private institutions,
including education, training, unemployment, and re-employment
systems, must support a "retraining economy" for California to
maintain its status as a place of innovation and shared
prosperity and that workers must be learners who can traverse
a labor market landscape that is less about "jobs" and more
about a set of marketable skills broadly relevant to industry
sectors within regional economies.
California Export of Recycled Materials Report . Issued in
July 2013, the report contains information about the types of
recyclables exported from California's ports, the amount
shipped, and their value. The report found that overall,
recyclables exported by sea made up over one-quarter of the
total weight (28%) shipped from California ports in 2012, and
these recyclables accounted for approximately 8% of the total
value of all exports shipped from California. The report also
noted that China continues to be the largest market for
recycled materials, receiving over half of the total weight
shipped out from California by sea.
California Five-Year Infrastructure Plan . The California
Infrastructure Planning Act requires the Governor to submit a
five-year infrastructure plan to the Legislature for
consideration with the annual budget bill. According to the
2014 plan, it evaluates the state's infrastructure needs in
the overall context of available funding sources, what the
state can afford, and how the state can grow in the most
sustainable way possible. The plan states that the
preservation of the state's long-term fiscal stability means
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the General Fund cannot afford to shoulder the cost of all
potential infrastructure investments and instead, the state
must focus its limited infrastructure dollars on core state
responsibilities. The plan proposes to invest $56.7 billion
in capital funding to renovate and augment California's aging
infrastructure over the next five years.
Environmental Goals and Policy Report . AB 2070 (Chapter 1534,
Statutes of 1970) created the Governor's Office of Planning
and Research (OPR) and called for OPR to prepare and maintain
an Environmental Goals and Policy Report (EGPR). The EGPR
aims to provide an overview of the state's environmental
goals, keys steps to achieving these goals, and develop a
framework of metrics and indicators to help inform decision
making, at all levels, to help track progress toward reaching
these goals. The 2013 draft EGPR, "California's Climate
Future," states that "as the state continues to grow, we must
do so in a way that is in harmony with the state's environment
and natural resources." The report also seeks to consider
growth in the context of climate change, "undoubtedly the
biggest environmental challenge of our time. Climate change
and the state's efforts to confront it will touch nearly every
aspect of the state's planning and investment for the future."
Comments
According to the author, "California has not fully studied our
current trade infrastructure system and the capacity needs that
can promote our International Trade abilities, yet the state
continues to try and push forward with policies that may not be
addressing the actual needs of our trade infrastructure
throughout the state." The author believes that while it is
necessary to begin to look for economic development
opportunities and set goals to achieve those, including the
crucial role international trade should play, the current
criteria required to be a part of the ITI strategy do not go far
enough. In response, the author intends for this bill to
require a full analysis of the transportation infrastructure and
physical capacity necessary to meet the import and export needs
of California's land, sea and air ports of entry.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
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SUPPORT : (Verified 6/30/14)
California Asian Pacific Chamber of Commerce
California Association of Port Authorities
Harbor Association of Industry & Commerce
ARGUMENTS IN SUPPORT : The California Asian Pacific Chamber of
Commerce believes that "it is important to ensure there is a
clear understanding of foreign investment and trade and that it
should include the role that the ports of entry in California
have on the overall economy of the state."
According to the Harbor Association of Industry & Commerce, the
"twin ports of Los Angeles-Long Beach are the driving economic
force in Southern California and we need to help not only Los
Angeles-Long Beach ports but all California ports to keep their
leading edge".
ASSEMBLY FLOOR : 76-1, 1/27/14
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Bigelow, Bloom,
Bocanegra, Bonilla, Bonta, Bradford, Brown, Buchanan, Ian
Calderon, Campos, Chau, Ch�vez, Chesbro, Conway, Cooley,
Dababneh, Dahle, Daly, Dickinson, Donnelly, Eggman, Fong, Fox,
Frazier, Beth Gaines, Garcia, Gomez, Gonzalez, Gordon, Gorell,
Gray, Grove, Hagman, Hall, Harkey, Roger Hern�ndez, Holden,
Jones, Jones-Sawyer, Levine, Linder, Lowenthal, Maienschein,
Mansoor, Medina, Melendez, Morrell, Mullin, Muratsuchi,
Nazarian, Olsen, Pan, Patterson, Perea, Quirk, Quirk-Silva,
Rendon, Ridley-Thomas, Rodriguez, Salas, Skinner, Stone, Ting,
Wagner, Waldron, Weber, Wieckowski, Wilk,
Williams, Yamada, John A. P�rez
NOES: Gatto
NO VOTE RECORDED: Logue, Nestande, V. Manuel P�rez
MW:e 8/16/14 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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