Bill Text: CA SB431 | 2013-2014 | Regular Session | Amended
Bill Title: Economic development: California Socioeconomic
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2014-02-03 - Returned to Secretary of Senate pursuant to Joint Rule 56. [SB431 Detail]
Download: California-2013-SB431-Amended.html
BILL NUMBER: SB 431 AMENDED
BILL TEXT
AMENDED IN SENATE APRIL 2, 2013
INTRODUCED BY Senator Price
FEBRUARY 21, 2013
An act to add Article 6 (commencing with Section 12099) to
Chapter 1.6 of Part 2 of Division 3 of Title 2 of the Government
Code, relating to economic development , and making an
appropriation therefor .
LEGISLATIVE COUNSEL'S DIGEST
SB 431, as amended, Price. Local government: economic
development. Economic development: California
Socioeconomic Development Pods Program.
Existing law establishes the Governor's Office of Business
and Economic Development, which is administered by a director
appointed by the Governor. The office serves the Governor as the lead
entity for economic strategy and the marketing of California on
issues relating to business development, private sector investment,
and economic growth. Existing law provides for various economic
development programs that foster community sustainability and
community and economic development initiatives throughout the state.
This bill would establish the California Socioeconomic Development
Pods Program within the Governor's Office of Business and Economic
Development to encourage the use of social innovative financing, as
defined, within blighted areas in the state. The bill would also
create the Pod Accelerator Fund, a continuously appropriated fund,
within the State Treasury, to receive moneys collected and received
by the Governor's Office of Business and Economic Development for the
California Socioeconomic Development Pod Program from gifts,
bequests, or donations.
This bill would express the intent of the Legislature to enact
legislation that would implement a regional pilot program or programs
in low income regions of the state that would encourage the growth
of a unique industry not common to that region, and retrain the
community through social innovative financing to meet the industry's
workforce needs.
Vote: majority. Appropriation: no yes
. Fiscal committee: no yes .
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Article 6 (commencing with Section
12099) is added to Chapter 1.6 of Part 2 of Division 3 of
Title 2 of the Government Code , to read:
Article 6. California Socioeconomic Development Pods Program
12099. The Legislature finds and declares all of the following:
(a) Job creation is a critical part of improving the economic
well-being of the state's designated blighted neighborhoods.
(b) Introducing new industries into these blighted areas, such as
high-tech, biomed and genomics, space technology, and manufacturing
industries, and coupling them with social innovative financing to
provide the resources needed to retrain the community will help to
create employment opportunities at an accelerated rate, which will
lead to the state's improved financial health and economic
competitiveness.
(c) In order to maintain a healthy state economy and to aid
communities, social and economic development must occur
simultaneously.
(d) The socioeconomic development pods are operated in California
through a cooperative agreement between the Governor's Office of
Business and Economic Development and initially two geographically
distinct regions, all of which are partnered with public
universities, community college districts, local governments,
research institutions, industry, social innovative financing
networks, and traditional financial institutions. The socioeconomic
development pods are California's premier tool for facilitating
growth and socioeconomic development within underrepresented and
low-income communities in California. Providing residents of these
communities with viable employment opportunities through the creation
and retention of jobs in the newly developed industry will
facilitate a change in demographics and economic outcomes of the
designated neighborhood by removing the "blighted" stigma
permanently.
(e) Social innovative financing is characterized by the following
steps:
(1) A governmental entity contracts with an intermediary to obtain
a service.
(2) Private investors provide the funding for the service to the
intermediary.
(3) The intermediary then distributes the money to the service
provider.
(4) The intermediary issues a "pay for success contract" to the
investor.
(5) The government is responsible for paying investors the
principal and agreed-upon interest earned if and only if the
benchmarks are met.
12099.1. For purposes of this article, the following terms shall
be defined as follows:
(a) "Blighted community" means an area that was previously a
functioning city, or part of a city, that has fallen into disrepair
and decrepitude. A blighted community may feature
deindustrialization, depopulation or changing population, economic
restructuring, abandoned buildings, high local unemployment,
fragmented families, political disenfranchisement, crime, and a
desolate, inhospitable city landscape.
(b) "Pod" means a specific geographical area designated as
"blighted" or underrepresented, identified and developed into a pod
by ZIP Codes, including or close to a university, research facility,
or community college within the designated ZIP Codes.
(c) "Socioeconomic development" means the process of social and
economic development in a society. Socioeconomic development is
measured with indicators such as gross domestic product, life
expectancy, literacy, and levels of employment. Socioeconomic
development also includes changes in less tangible factors, such as
personal dignity, freedom of association, personal safety and freedom
from fear of physical harm, and the extent of participation in civil
society.
(d) "Socioeconomic development pod" means a hybrid urban
enterprise zone that utilizes some of the incentives of the urban
enterprise zone to encourage certain industries to develop in a
designated blighted area where retraining of the community is
financed by social innovative financing. Social redevelopment and
economic redevelopment occurs simultaneously.
(e) "Social innovative financing" means an approach to expanding
social programs whereby the government pays a service provider based
on the results delivered, as opposed to the activities performed.
Social innovative financing means a partnership in which
philanthropic funders and impact investors take on the financial risk
of scaling up social programs.
12099.2. (a) The California Socioeconomic Development Pod Program
is hereby created within the office.
(b) The office shall designate socioeconomic development pods
within the state to stimulate partnerships, economic development, and
job creation by leveraging assets to provide stimulation and
incentives for industry, economic development organizations, business
groups, and social innovation funders. The assets may include, but
are not limited to, research parks, technology incubators,
universities, and federal laboratories.
(c) The office shall oversee, coordinate, and provide assistance
to each socioeconomic development pod.
12099.3. (a) The office shall identify blighted areas suited for
the California Socioeconomic Development Pod Program.
(b) The office shall include, but not be limited to, any of the
following in the designation of a pod:
(1) A statement of purpose.
(2) A signed statement of cooperation and a description of the
roles and relationships of each entity involved in the partnership.
(3) A designated socioeconomic development pod coordinator.
(4) A clear explanation and map conveying the pod's physical
boundary.
(5) A clearly identified designee to coordinate pod activities.
(6) A clearly identified central location.
(7) Clearly identified benchmarks or milestones with approximate
dates as to when they will be achieved.
(8) A list and brief description of local and regional incentives
and support programs.
(9) A list of the pod's assets and resources.
(10) A clearly articulated focus area of the pod, including
industry sectors or other targeted areas for development and growth.
(11) A list of specific resources available to support and guide
training.
(12) Expectations for job development and business creation.
(13) Defined performance standards agreed upon by the partners
involved in the development of the pod.
(14) Evaluation procedures that will be used to measure the level
of achievement for each stated goal.
(15) A plan for sustainability.
12099.4. (a) A designated pod shall include at least one major
university or research center or institute, one economic development
organization, and at least two of the following:
(1) A business support organization including a workforce
development or training organization, incubator or business
accelerator, chamber of commerce, and networking organization that
supports innovation.
(2) An educational consortium including technology training
representatives.
(3) A social innovative financing network including traditional
investors.
(4) A community-based organization specializing in retraining,
reducing recidivism, or homelessness.
(5) A municipal economic development division or department.
(6) A federal government partner.
12099.5. (a) A pod may, but is not be limited to doing, any of
the following:
(1) Provide counseling and technical assistance, either by direct
or indirect services, in the areas of retraining or reduction in
recidivism.
(2) Conduct workshops, seminars, or conferences with local
partners including, but not limited to, state universities, state
community colleges, local governments, state and federal service
providers, private industry, workforce investment boards and
agencies, small business service agencies, economic development
organizations, or chambers of commerce.
(3) Facilitate partnerships between innovative startup businesses,
research institutions, and venture capitalists or financial
institutions.
(b) The pod shall, to the extent feasible, do all of the
following:
(1) Perform activities in close collaboration with the office as
its primary statewide partner.
(2) Coordinate activities with the Employment Training Panel, the
California Workforce Investment Board, the Office of the Chancellor
of the California Community Colleges, the University of California,
the California State University, and other state economic and
workforce development programs.
12099.6. (a) Notwithstanding any other law, the office may, with
the consent of the Director of the Department of General Services,
use vacant or underused state-owned or leased property, or both, that
is controlled by the Department of General Services for purposes
including, but not limited to, assisting Pods in the establishment of
incubators and demonstration sites.
(b) State property under this section, when authorized by law, may
be used as matching funds to meet federal funding requirements.
12099.7. (a) The office may authorize a business or nonprofit
organization to use a state-owned or leased property, or both,
pursuant to Section 12099.6.
(b) State-owned or leased property under this section shall be
used only in furtherance of this chapter.
12099.8. The Pod Accelerator Fund is hereby created within the
State Treasury. Subject to the approval of the Department of Finance,
all moneys collected and received by the Governor's Office of
Business and Economic Development for the California Socioeconomic
Development Pod Program from gifts, bequests, or donations shall be
deposited in the Pod Accelerator Fund. Notwithstanding Section 13340,
the moneys in the fund are continuously appropriated to the office
to be used for the California Socioeconomic Development Pod Program
pursuant to the terms of the gift, bequest, or donation.
SECTION 1. It is the intent of the Legislature
to enact legislation that would implement a regional pilot program or
programs in low income regions of the state that would encourage the
growth of a unique industry not common to that region, and retrain
the community through social innovative financing to meet the
industry's workforce needs.
