ARTICLE 6.2. California Innovation Initiatives [12099.1 - 12099.7.5]
( Heading of Article 6.2 renumbered from Article 6 (as added by Stats. 2013, Ch. 530, Sec. 1) by Stats. 2015, Ch. 303, Sec. 191. )
(a) The Accelerate California: Inclusive Innovation Hub Program is hereby created within the office, within the California Office of the Small Business Advocate.
(b) The office shall designate Accelerate California: Inclusive Innovation Hub within the state to accelerate the startup and growth of technology and science-based firms in key industry areas with a focus on diverse founders, including women and people of color, and on underserved geographies and regions. Accelerate California shall offer diverse entrepreneurs the opportunity to develop and grow their innovative ideas by bridging the connection to local networks and communities and increasing access to critical advising and training services.
(c) The office shall oversee, coordinate, and provide assistance to each Accelerate California: Inclusive Innovation Hub.
(Amended by Stats. 2022, Ch. 68, Sec. 6. (SB 193) Effective June 30, 2022.)
For purposes of this article, the following terms shall be defined as follows:
(a) “Accelerate California: Inclusive Innovation Hub” is a network of interrelated firms, local governments, economic development organizations, educational entities, and industry professionals that collectively drive economic growth within a defined geographic area and for defined underserved business owners and underserved markets that are selected by the office and is responsible for all of the following:
(1) Carrying out the state’s objectives of
the Accelerate California: Inclusive Innovation Hub Program.
(2) Serving as the primary agent responsible for coordinating services and resources and maintaining the Accelerate California: Inclusive Innovation Hub agreement with the office.
(3) Serving as the primary liaison to the state and the office.
(b) “Accelerate California Entrepreneurship Fund” means the program administered by the office to award acceleration grants to entrepreneurs and small businesses participating in the Accelerate
California: Inclusive Innovation Hubs.
(c) “Applicant” means one or more entities that submit an application to the office. Eligible applicants shall be one or more of the following:
(1) A fully accredited institution of higher education.
(2) A private nonprofit corporation engaged in economic development activities.
(3) A county or municipality in this state that has a preexisting economic development department or program or both.
(4) A public economic development institution such as
a workforce investment board or an economic development corporation.
(5) A Community Economic Resilience Fund regional stakeholder.
(d) “Community Economic Resilience Fund Region” means a region established pursuant to Section 14531 of the Unemployment Insurance Code.
(e) “GO-Biz” means the Governor’s Office of Business and Economic Development.
(f) “Office” means the California Office of the Small Business Advocate within GO-Biz.
(g) “Underserved” means, with respect to geographic areas and business owners, currently or have historically experienced relatively limited access to resources, such as early-state investment capital, technical assistance, mentorship, financial services, community engagement, and investment.
(1) Underserved geographic areas shall include low-wealth or rural regions, or regions designated or otherwise termed as disadvantaged by a federal entity.
(2) Underserved business owners shall include entrepreneurs and the owners of startup businesses that are women, minority, formerly incarcerated, disabled, or veterans. For purposes of this paragraph, “startup” means a company in the first stages of operations, such as prerevenue and proof of concept. “Startups” may be founded by one or more entrepreneurs who want to develop a product or service for which they believe there is demand. “Startups” generally start with high costs and limited revenue and typically look for capital from a variety of sources, such as angel or venture capitalists.
(Amended by Stats. 2022, Ch. 68, Sec. 7. (SB 193) Effective June 30, 2022.)
(a) The office shall issue a request for proposals for the Accelerate California: Inclusive Innovation Hub Program.
(b) An applicant’s proposal shall include, but shall not be limited to, all of the following information:
(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 Accelerate California: Inclusive Innovation Hub.
(3) A designated Accelerate California: Inclusive Innovation Hub director who will be responsible for statewide program oversight and coordination of statewide activities, convening of statewide partners, and engagement of regional Accelerate California: Inclusive Innovation Hub designees.
(4) Identification of one Accelerate California: Inclusive Innovation Hub per Community Economic Resilience Fund region, where applicable.
(5) A clearly stated regional Accelerate California Hub designee to coordinate Accelerate California: Inclusive Innovation Hub activities within its respective service area.
(6) A clearly identified location with an explanation as to how the location is central to the potential client base.
(7) Clearly identified benchmarks or milestones with approximate dates as to when they will be achieved.
(8) A complete budget including a description of secured funds with proof, pending funds, and potential future funding sources.
(9) A list and brief description of local and regional incentives and support programming that aligns with the objectives of the Accelerate California: Inclusive Innovation Hub program and the applicant’s proposal and focus area.
(10) A clearly articulated commercial market focus and plan.
(11) A clearly articulated Accelerate California: Inclusive Innovation Hub management structure and plan that may include a description of the capabilities, qualifications, and experience of the proposed management team, team leaders, or key personnel who are critical to achieving the proposed objectives.
(12) A list of Accelerate California: Inclusive Innovation Hub assets and resources.
(13) A clearly articulated focus area of the Accelerate California: Inclusive Innovation Hub including underserved geographic areas, industry sectors, and business owners, or other targeted areas for development and growth that will be served by grant funds.
(14) A list of specific resources available to support and guide startup companies in Accelerate California: Inclusive Innovation Hub industry sectors.
(15) A clearly articulated list of goals to be achieved with the certification of the Accelerate California: Inclusive Innovation Hub.
(16) Expectations for job development and business creation, growth, and expansion.
(17) Defined performance standards agreed upon by the partners involved in the development of the application for an Accelerate California: Inclusive Innovation Hub. This shall include how the hub will identify and support the selected underserved geographic areas and underserved business owners.
(18) Evaluation procedures that will be used to measure the level of achievement for each stated goal.
(19) A plan for sustainability that includes an extension of the program beyond the initial four years.
(20) Organizational experience including capabilities, related experience, facilities, techniques, unusual resources, or unique combinations of these that are integral factors for achieving the proposed objectives.
(21) Demonstrated experience in developing innovation programming, such as technology transfer and commercialization programs in partnership with industry, university, or federal partners.
(22) Demonstrated experience with intellectual property management and licensing.
(23) Evidence of community engagement and established partnerships in the proposed region.
(24) A clearly articulated plan to outreach to the designated underserved geographic regions and underserved business owners.
(25) A list of small business technical assistance grantees, as described in Article 7 (commencing with Section 12100.60) who serve the designated regions.
(26) A detailed program
design and implementation plan describing how the hub will develop and implement the program, including specifics on attracting entrepreneurs and small business to the program, any application and selection processes, and program components.
(c) The office may waive any of the requirements listed in subdivision (b) for purposes of waiving requirements that disadvantage a rural community that applies and does not have all of the required components.
(d) The office may designate an Accelerate California: Inclusive Innovation Hub for a term of not more than four years. An Accelerate California: Inclusive Innovation Hub may reapply for a designation without limitation on the number of times.
(e) (1) The Accelerate California: Inclusive Innovation Hub designation shall not be official until a grant agreement is entered into by the applicant and the office. The grant agreement shall include the goals and performance standards identified in the application and other related requirements as determined by the office.
(2) For an iHub previously designated by GO-Biz or an iHub2 previously designated by the office to be designated as an Accelerate California: Inclusive Innovation Hub by the office, the designation is required to be newly awarded under the Accelerate California: Inclusive Innovation Hub Program.
(f) One Accelerate California: Inclusive Innovation Hub may be awarded per applicable Community Economic Resilience Fund region.
(g) The office shall set guidelines for approval, designation, operation, reporting, redesignation, and dedesignation of Accelerate California: Inclusive Innovation Hubs. The guidelines shall include all of the following:
(1) A protest and appeal process relative to the designation of a hub.
(2) A dispute resolution process
(3) All relevant information for applying for a grant.
(h) (1) An Accelerate California: Inclusive Innovation Hub shall quarterly and annually report to the office on its progress in meeting the goals and performance standards as described in the Accelerate California: Inclusive Innovation Hub application and implementing grant agreement with the office.
(2) The office shall annually prepare a report that summarizes the information collected from paragraph (1). This reporting requirement may be met by providing the same information in the annual report of the office. This report shall include for each Accelerate California: Inclusive Innovation Hub the following information:
(A) A description of the service area or areas as articulated in the
application and implementing grant agreement, including how its services were made and equitably available to underserved geographic areas and underserved business owners.
(B) The goals and performance standards identified in the application and implementing grant agreement.
(C) Descriptive information about the educational, research, governmental, business, nonprofit, philanthropic, financial, or investor entities involved in the Accelerate California: Inclusive Innovation Hub.
(D) A financial
statement showing total revenues, including the sources of revenue, expenditures, and assets. The financial statements should be presented in a consistent manner across the Accelerate California: Inclusive Innovation Hubs.
(E) The number of participating entrepreneurs and startup businesses and the change in the number and composition of participating startup businesses.
(F) Descriptive information about the participating startup businesses that may include, but are not limited to, geographic location, industry sectors, business legal structure, owners’ demographics, financing acquired, equity capital raised during the year, revenues, profits, and number of
employees.
(G) A description of the progress in meeting the goals and performance standards identified in the application and implementing grant agreement.
(H) A description of the services provided by the office throughout the year to support the Accelerate California: Inclusive Innovation Hubs.
(3) The office shall post the report described in paragraph (2) on its internet website and provide notice to the Governor, the relevant policy committees of the Legislature, and the Legislative Analyst’s
Office that the information is available on the internet website.
(i) The office shall evaluate, on or before January 1, 2026, the effectiveness of the Accelerate California: Inclusive Innovation Hub program to submit a written report to the Director of Finance, the relevant policy committees of the Legislature, and the Joint Legislative Budget Committee. This report shall do all of the following:
(1) Evaluate the extent to which each Accelerate California: Inclusive Innovation Hub achieved the goals and performance standards identified in their applications and implementing grant agreements.
(2) Evaluate the level of accessibility and availability of services to underserved geographic areas, industry sectors, and underserved business owners.
(3) Evaluate the sustainability of each Accelerate California: Inclusive Innovation Hub.
(4) Identify specific actions that could be taken to improve program outcomes in future years.
(Amended by Stats. 2022, Ch. 68, Sec. 8. (SB 193) Effective June 30, 2022.)
A designated Accelerate California: Inclusive Innovation Hub shall include at least one major university or research center or institute, one economic development organization, and consist of at least four of the following, in any combination:
(a) A business support organization including a workforce development or training organization, incubator or business accelerator, business technical assistance providers, chamber of commerce, and networking organization that supports innovation.
(b) An angel or venture capital network.
(c) A business foundation, innovation foundation, science foundation, laboratory research institution, federal laboratory, university laboratory, or research and development facility.
(d) A municipal economic development division or department.
(e) A federal government partner such as a national laboratory.
(Amended by Stats. 2022, Ch. 68, Sec. 9. (SB 193) Effective June 30, 2022.)
Before an official designation as an Accelerate California: Inclusive Innovation Hub the applicant shall self-certify both of the following:
(a) That the Accelerate California: Inclusive Innovation Hub will comply with the state’s nondiscrimination policy.
(b) That the Accelerate California: Inclusive Innovation Hub and its principals are current in payment of all state and local taxes owed unless they have entered into an agreement that was deemed satisfactory by the respective taxing authority and are in full compliance with the agreement.
(Amended by Stats. 2022, Ch. 68, Sec. 10. (SB 193) Effective June 30, 2022.)
(a) An Accelerate California: Inclusive Innovation Hub may do all of, but shall not be limited to, the following:
(1) Provide free or low-cost advisory services and technical assistance to entrepreneurs and startups. An Accelerate California: Inclusive Innovation Hub shall make every effort to ensure services are accessible and equally available to underserved geographic areas and underserved business owners.
(2) Facilitate community programming and engagement with local partners, including, but not limited to, state universities and research institutes, state community colleges, local governments, state and federal service providers, private industry, workforce investment boards and agencies, small business and microenterprise development organizations, economic development organizations, and chambers of commerce.
(3) Facilitate partnerships between innovative startup businesses, research institutions, and venture capitalists or financial institutions.
(b) The Accelerate California: Inclusive Innovation Hub shall, to the extent feasible, work in close collaboration with the activities of the office as its primary statewide partner.
(Amended by Stats. 2022, Ch. 68, Sec. 11. (SB 193) Effective June 30, 2022.)
The Inclusive Innovation Accelerator Account is hereby created within the California Economic Development Fund in the State Treasury. Subject to the approval of the Department of Finance, all moneys collected and received by the office or the Governor’s Office of Business and Economic Development on the office’s behalf for California Inclusive Innovation Initiatives from gifts, bequests, or donations shall be deposited in the Inclusive Innovation Accelerator Account. Notwithstanding Section 13340, the moneys in the account are continuously appropriated to the office to be used for Accelerate California: Inclusive Innovation Initiatives pursuant to the terms of the gift, bequest, or donation.
(Amended by Stats. 2022, Ch. 68, Sec. 12. (SB 193) Effective June 30, 2022.)
(a) Upon appropriation by the Legislature, the office shall administer the Accelerate California Entrepreneurship Fund to provide acceleration grants to small businesses and entrepreneurs that participate in the Accelerate California: Inclusive Innovation Hubs. The purpose of the acceleration grants is to spur high-growth industries and startups and build a pipeline of scalable firms and well-paid jobs, and increase access to private investment for diverse founders as well as those in geographically isolated and underserved regions. The office shall develop guidance for priority areas of funding and process for the funding and selection of grantees. Funding disbursements shall begin in the second year of the program after a hub has achieved satisfactory reporting for the first year of performance.
(b) (1) To receive an acceleration grant, small businesses and entrepreneurs shall satisfy all of the following:
(A) Be located in the geographic region of the Accelerate California: Inclusive Innovation Hub.
(B) Have an existing relationship with the Accelerate California: Inclusive Innovation Hub and have been incubated or accelerated at the hub.
(C) Complete a grant application with a letter of support included in the application from its regional Accelerate California: Innovation Hub and provide the Accelerate California: Inclusive Innovation Hub with a description of its innovation model and provide an equity and sustainability statement.
(D) Have not received a
previous grant from the Accelerate California Entrepreneurship Fund.
(2) Applications shall be evaluated based on breadth and quality of service and demonstrated ability to reach target populations.
(c) Applications from underserved business groups, including women, minority, and veteran-owned businesses, and businesses in low-wealth, rural, or disaster-impacted communities included in a state or federal emergency declaration or proclamation, shall be given preference if the applicants are eligible and have met program requirements to receive a grant.
(Added by Stats. 2022, Ch. 68, Sec. 13. (SB 193) Effective June 30, 2022.)