BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Kevin de Le�n, Chair
AB 2713 (Quirk-Silva) - Governor's Office of Business and
Economic Development: South Korea
Amended: May 5, 2014 Policy Vote: BP&ED 9-0
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 2713 would allow the Governor's Office of
Business and Economic Development (GO-Biz) to establish
public-private partnerships related to (1) the export of
California products and (2) the attraction of
employment-producing direct foreign investment with key country
and industry partners. Additionally, the bill would require
GO-Biz to establish a South Korean Trade Promotion Advisory
Committee to help guide state activities related to the exports
and the attraction of employment-producing direct foreign
investment by South Korean investors.
Fiscal Impact: GO-Biz estimates that it would require about
$100,000 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.
In February 2014, Governor Brown announced the creation of a
AB 2713 (Quirk-Silva)
Page 1
California International Trade and Investment Advisory Council
(Council). The purpose of the Council will be to advise GO-Biz
on strategies to expand international trade and investment for
California businesses. Specifically, in announcing its creation,
the Governor noted that the Council "will assist GO-Biz in
identifying foreign markets with the greatest potential for
export expansion and in developing specific export strategies
for those markets - including the state's top trading partners,
Canada, Mexico and China, and emerging markets such as Brazil
and India."
Recent data indicate that South Korea is California's fifth
largest export destination. According to the U.S. Census data,
California's 2013 exports to South Korea totalled $8.4 billion.
Additionally, the United States-Korea Free Trade Agreement
(KORUS FTA) took effect on March 15, 2012. The U.S.
International Trade Commission has estimated that the reduction
of Korean tariffs and tariff-rate quotas on goods will add $10
billion to $12 billion to annual U.S. Gross Domestic Product and
around $10 billion to annual merchandise exports to Korea.
USITR notes that in the two years that the agreement has been in
effect, Korea has become the United States' sixth-largest
trading partner.
Proposed Law: Specifically, this bill would do the following:
Authorize GO-BIZ to accept nonstate moneys for each
public-private partnership established, including, but not
limited to, private sector funds, for activities related to
this particular public-private partnership, consistent with
specified requirements.
Require GO-BIZ to establish a South Korean Trade
Promotion Advisory Committee to guide state activities
related to the exports and the attraction of
employment-producing direct foreign investment by South
Korean investors.
Require private sector moneys to be deposited in the
Public-Private Partnership Subaccount, which would be
established within the Economic Development and Trade
Promotion Account and would be continuously appropriated to
the Director of GO-BIZ, as specified.
.
AB 2713 (Quirk-Silva)
Page 2
Staff Comments: GO-Biz's estimation of resource needs is based
on one new position. To the extent that a large number of
public-private partnerships are created as a result of the bill,
staffing needs could be higher. The bill would permit GO-Biz to
accept private donations to help implement/administer the bill;
however, receiving such donations is not guaranteed.