BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Kevin de Le�n, Chair
AB 1675 (Calderon) - Entrepreneur-in-Residence Act of 2014
Amended: June 19, 2014 Policy Vote: BP&ED 8-0
Urgency: No Mandate: No
Hearing Date: June 30, 2014
Consultant: Robert Ingenito
This bill meets the criteria for referral to the Suspense File.
Bill Summary: AB 1675 would establish the
Entrepreneur-in-Residence (EIR) Program within the Governor's
Office of Business and Economic Development (GO-Biz) to provide
private sector expertise and assistance to help make government
activities and practices streamlined and accessible to small
business.
Fiscal Impact: GO-Biz estimates that it would require about
$265,000 annually (General Fund) to implement the bill's
provisions.
Background: In February 2010, the Little Hoover Commission
reviewed the State's economic and workforce development
programs. Specifically, it analyzed the effectiveness of all
current programs since the elimination of the California
Technology, Trade and Commerce Agency (TTCA) in 2003, and
recommended the creation of a new governmental entity to replace
TTCA, to promote greater economic development, foster job
creation, serve as a policy advisor and deliver specific
services (e.g. permitting, regulatory and other information)
directly to the State's business community. In 2012, the
Legislature created GO-Biz for these purposes. Since its
creation, GO-Biz has reportedly served over 3,000 businesses in
the areas of permit streamlining, business creation, relocation,
expansion, and regulation.
California small businesses reportedly comprised 96 percent of
the State's exporters in 2009, accounting for 44 percent of the
State's total exports. Business owners with zero employees
totaled 2.8 million, and accounted for the single largest
component of the State's 3.5 million firms in 2010.
Microenterprises (businesses with less than five employees)
AB 1675 (Calderon)
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represent over 90 percent of the total. These business can incur
certain challenges in meeting regulatory requirements, accessing
capital, and marketing their goods and services.
Proposed Law: This bill would, among other things, do the
following:
Establish the EIR Program within GO-Biz for the purpose of
utilizing the expertise of private-sector entrepreneurs to
help make state governmental activities and practices more
streamlined and accessible to small businesses.
Authorize GO-Biz to appoint up to ten EIRs annually within
state agencies, as specified.
Require that entrepreneurs selected for participation
demonstrate either (1) success with California small
businesses and entrepreneurs, or (2) success in developing,
inventing, and marketing a product.
Provide that an EIR shall not have a conflict of interest
with the activities of the state agency where they are
placed, including, but not limited to, having any existing
business before the state agency in which they are proposing
to be placed or are placed.
Require GO-Biz to accept applications and establish
procedures for compliance with the EIR program by March 1,
2015, as specified. Require GO-Biz to develop a standard
memorandum of understanding that stipulates duties and
expected outcomes.
Require specific duties, including recommendations on how to
streamline, eliminate or modify potentially inefficient or
duplicative activities, processes, and programs at the state
agency. Require an EIR to assist in improving outreach and
service to small business concerns and entrepreneurs.
Provide that an EIR shall serve on a voluntary basis but
dedicate at least 16 hours per week to the program.
Require GO-Biz to establish an informal working group of
EIRs to discuss best practices, experiences, obstacles,
opportunities, and recommendations and prepare an annual
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report on the program, submitted to the Governor and
Legislature, as specified.
Staff Comments: GO-Biz's estimation of resource needs is based
on two new positions. This bill would establish a process for
imbedding entrepreneurs within state agencies so they can help
facilitate change from within the government organization. It
is a process that has been used by the private sector to create
leaner administrative processes and is more recently being
considered by local, state, and federal governments.