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SPONSOR: |
Larranaga |
DATE TYPED: |
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HB |
687 |
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SHORT TITLE: |
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SB |
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ANALYST: |
Padilla |
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APPROPRIATION
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Appropriation
Contained |
Estimated
Additional Impact |
Recurring or
Non-Rec |
Fund Affected |
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FY03 |
FY04 |
FY03 |
FY04 |
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$204.3 |
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Recurring |
General
Fund |
(Parenthesis
( ) Indicate Expenditure Decreases)
Duplicates SB 785 except for the amount of the
appropriation and its term
Relates to SB 271, HB 133 and SB 134
LFC Files
Responses
Received From
Economic
Development Department
SUMMARY
Synopsis
of Bill
House Bill 687 appropriates $204.3 from the
general fund to the Economic Development Department for the purpose of
contracting for business incubation services in southeast
Significant
Issues
Although EDD did not identify the relevant
business incubator that would be funded by this bill, it is presumably the
incubator being planned by the Southeast Community Alliance in
According to EDD’s
report, there are currently no economic development or
multi-purpose incubators in the
Neither the bill nor EDD explains how the
incubator will receive the majority of its program and operating costs. The National Business Incubation Association
has found that incubation programs are more likely to be successful when there
is strong local support.
FISCAL IMPLICATIONS
The appropriation of $204.3 contained in this
bill is a recurring expense to the general fund. Unless the incubator has a business plan to
cover its operating costs every year, it will likely require state assistance
on a recurring basis.
Any unexpended or unencumbered balance remaining
at the end of fiscal year 2004 shall revert to the general fund.
EDD is concerned that there are no funds
attached to the bill for administration, evaluation and auditing costs.
ADMINISTRATIVE IMPLICATIONS
EDD believes it does not currently have the
staff to administer this program.
DUPLICATION AND RELATIONSHIP
This bill duplicates Senate Bill 785 in all
respects except the appropriation and its term.
SB 785 appropriates $500.0, versus the $204.3 in this bill. However, the
appropriation in SB 785 could be used through FY 2006.
This bill relates to HB 133 and SB 271, both of
which appropriate $500.0 to support a business incubator in
The bill also relates to HB 134, which
appropriates $1,500.0 to EDD to administer a statewide business
incubation program. This is the approach
that the 2002 EDD report recommended.
The report said that a statewide incubator programs could provide a
means of continued education and support to incubator managers and also enable
incubator tenants to become aware of other incubated companies in
POSSIBLE QUESTIONS
1. Is
this appropriation intended to fund a contract directly with a non-profit
business incubator?
2. Is
this business incubator affiliated with a university or other educational
institution?
3. Is the
City of
4. Would
a statewide business incubator program, such as that proposed in HB 134, be
preferable to support for individual programs?
LP/yr