NOTE: As provided in LFC policy, this report is
intended only for use by the standing finance committees of the
legislature. The Legislative Finance Committee does not assume
responsibility for the accuracy of the information in this report when used for
other purposes.
The most recent FIR
version (in HTML & Adobe PDF formats) is available on the Legislative
Website. The Adobe PDF version includes
all attachments, whereas the HTML version does not. Previously issued FIRs and attachments may be
obtained from the LFC in
|
SPONSOR: |
Romero |
DATE TYPED: |
|
HB |
|
||
|
SHORT TITLE: |
|
SB |
785 |
||||
|
|
ANALYST: |
Padilla |
|||||
APPROPRIATION
|
Appropriation
Contained |
Estimated
Additional Impact |
Recurring or
Non-Rec |
Fund Affected |
||
|
FY03 |
FY04 |
FY03 |
FY04 |
|
|
|
|
$500.0 |
|
|
Recurring |
General
Fund |
(Parenthesis
( ) Indicate Expenditure Decreases)
Duplicates HB 687 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
Senate Bill 785 appropriates $500.0 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 $500.0 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 2006 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 House Bill 687 in all
respects except the appropriation and its term.
HB 687 appropriates $204.3, versus the $500.0 in this bill. However, the appropriation in HB 687 can be
expended only in fiscal year 2004.
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/njw