BILL ANALYSIS �
AB 2670
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Date of Hearing: May 14, 2014
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
AB 2670 (Medina) - As Amended: May 6, 2014
Policy Committee: JEDE Vote:7-0
Urgency: No State Mandated Local Program:
No Reimbursable: No
SUMMARY
This bill establishes the Small Business Development Center
(SBDC) Program, within the I-Bank, and under the direction of
the Governor's Office of Business and Economic Development
(GO-Biz). GO-Biz will serve as the lead state entity for
overseeing California's participation in the federal
California Small Business Development Center Program, the
Women's Business Center program, the Veteran Business Outreach
Center program, the Service Corps of Retired Executives (SCORE),
and the Procurement Technical Assistance Cooperative Agreement
program. Specifically, this bill:
1)Authorizes GO-Biz to collaborate and support federal small
business technical assistance centers in the provision of
technical assistance and other related services to small
businesses.
2)Recognizes that SBDCs may, pursuant to Congressional action on
January 1, 2014, offer a range of services including, but not
limited to, providing specialized counseling and technical
assistance, offering expert start-up business advising,
commercialism assistance, conducting workshops and seminars,
and coordinating employee training and placement programs.
3)Requires small business technical assistance centers to report
on any activities that are the result of state funds being
contributed to the California SBDC Program, including, the
number of businesses assisted, number of jobs created and
retained as a result of assistance, estimated amount of tax
dollars generated, increase in sales reported as a result of
the assistance, the amount of capital infusion obtained by the
assistance, and the amount of total federal funds allocated to
AB 2670
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each region. For general tracking purposes, the report is
required to also provide information on the businesses
assisted including industry sector and size of the business
based on employment.
FISCAL EFFECT
General Fund administrative costs to GO-Biz of approximately
$215,000 to oversee the state's participation with the
California Small Business Development Center Program.
COMMENTS :
1)Purpose . This bill recognizes SBDCs and their role in
promoting small businesses and designates GO-Biz as the lead
state entity for facilitating the state's engagement with
these centers. The bill also recognizes the federal
requirement that SBDCs must provide a financial match in order
to draw down federal funds and sets reporting requirements for
the use of any state moneys. According to the author, while
prior legislation proposed to codify the federal SBDC program
in state statute, this bill instead establishes a state
liaison for collaborating with the federal program and
establishes rules for state collaborative actions.
2)Background . The SBDC program is administered by the federal
SBA. The SBDCs assist small businesses with financing,
government contracting, business planning and management,
marketing, international trade, energy efficiency and
sustainability, disaster preparedness, and other business
issues. In California, SBDCs are administered through a
partnership between the California State Universities at
Chico, Humboldt, and Fullerton; the University of California
at Merced; Long Beach City College; and Southwestern Community
College.
3)Small Business Development Center Program : The SBDC program
is sponsored by the federal SBA and functions as a cooperative
effort of the private sector, the educational community, and
federal, state, and local governments. The SBDCs facilitate
the creation, expansion, and retention of businesses. In
California, SBDCs are administered through a partnership
between the California State Universities at Chico, Humboldt,
and Fullerton; the University of California at Merced; Long
Beach City College; and Southwestern Community College.
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Formal management of the partnership is provided through an
Administrative Lead Center that is designated by, and
responsible to, the SBA. Each Administrative Lead Center
serves a specific geographic area compromised of several
SBDCs. The California SBDC network serves businesses
throughout California with over 30 permanent and satellite
office.
Funding for the program is provided through a federal SBA
population-based grant. Each Administrative Lead Center must
provide a dollar-for-dollar match to receive federal funds.
The federal government sets aside approximately $12 million
for California SBDCs annually, which represents slightly more
than 11% of the national program.
4)Related legislation . AB 2717 (Bonta), pending in this
committee, appropriates $6 million from the General Fund to
the California Economic Development Fund for the purpose of
providing a cash match for the administrative lead centers
that have contracts with the U.S. Small Business
Administration (SBA) to administer the regional networks of
Small Business Development Centers (SBDCs). AB 2717 is
contingent upon the enactment of this bill.
Analysis Prepared by : Misty Feusahrens / APPR. / (916)
319-2081