AGENDA – November 30 2010
ACA BOARD MEETING
30, 1. Call to order
2. Roll call
3. Opening remarks
4. Co‐Chair remarks
5. Approval of minutes
6. President & CEO report
Vision 2011‐2012
7. Growth sector presentations
• Retention
• Science & Technology
• Aerospace & Defense
• Renewable Energy
• Small Business
8. Legislative session update
9. Next steps
OPENING REMARKS
Jan Brewer
Governor of Arizona
November 30, 2010
CO‐CHAIR REMARKS
Jerry Colangelo
Co‐Chair, ACA
November 30, 2010
AGENDA – November 30 2010
ACA BOARD MEETING
30, 1. Call to order
2. Roll call
3. Opening remarks
4. Co‐Chair remarks
5. Approval of minutes
6. President & CEO report
Vision 2011‐2012
7. Growth sector presentations
• Retention
• Science & Technology
• Aerospace & Defense
• Renewable Energy
• Small Business
8. Legislative session update
9. Next steps
President Report
Vision 2011‐2012
& CEO Donald Cardon
President & CEO, ACA
November 30, 2010
GROWTH SECTOR
BUSINESS RETENTION
Jerry Colangelo
Growth Sector Leader
Marty Shultz
Presenter
November 30, 2010
GROWTH SECTOR
BUSINESS RETENTION
COMMITTEE
Jerry Colangelo, Chair
Don Cardon
Eileen Klein
Mart Sh lt
Top 100 Employers
Marty Shultz
Sandra Watson
GROWTH SECTOR FORCE MULTIPLIERS
BUSINESS RETENTION
Competitive Business Climate
Effective P‐20 Education System
Diverse, Talented and Growing Workforce
Concentration of Employers
Retention Tools and Programs
GROWTH SECTOR RECOMMENDATIONS
BUSINESS RETENTION
1. Tax and policy considerations
100% Sales Factor
Deal‐Closing Fund
Reduce Taxes – Corporate & Personal Property
Enhance R&D Tax Credits – link to Universities
Modernize existing programs – Angel Investment
and Enterprise Zone
Streamline Regulatory Process
GROWTH SECTOR
BUSINESS RETENTION
RECOMMENDATIONS
2 Establish 2. Early Warning System to Identify At‐Risk
Businesses
Monthly CEO Roundtable Series
Retention Visits – CEOs
Establish Arizona’s Ambassadors Program
Work with Growth Sector Leaders to
Implement Retention Programs
Establish a Research and Data‐Based System to
Identify Targets (RAPID Response Team)
GROWTH SECTOR
BUSINESS RETENTION
RECOMMENDATIONS
3 Attract 3. Attract, Educate, Retain and Retrain Arizona’s
Workforce
Support STEM Initiatives
Implement Arizona’s Race To The Top Proposal
4. Endorse Existing Retention Tools
B3 Program
Arizona’s Manufacturing Extension Partnership
Reinstate the AZFAST Program to Support SBIR
Match Business Capabilities with Opportunities
GROWTH SECTOR
SCIENCE & TECHNOLOGY
Dr. Craig Barrett
Growth Sector Leader
November 30, 2010
GROWTH SECTOR
SCIENCE & TECHNOLOGY
COMMITTEE
Dr. Craig Barrett, Chair
Richard Adkerson
Dr. Michael Crow
Jerry Fuentes
PUBLIC HEARING
y October 18, 2010
Dr. Bill Harris
Linda Hunt
Kevin Kinsall
Michael Manson
Mo Stein
Sandra Watson
GROWTH SECTOR
SCIENCE & TECHNOLOGY
FORCE MULTIPLIERS
STEM Education
Highly Trained Workforce
Research and Development
Research Talent
Innovation Cycle
Access to Private Risk Capital
GROWTH SECTOR RECOMMENDATIONS
SCIENCE & TECHNOLOGY
1. Continue focus on STEM education, the starting
point for innovation
Implement Arizona’s Race to the Top Plan
2. Focus on the innovation cycle to grow
knowledge‐based economy businesses
Identify R&D funding to support SFAz
Develop a collaborative statewide
commercialization system
Leverage proximity to California
GROWTH SECTOR
SCIENCE & TECHNOLOGY
RECOMMENDATIONS
3. Enhance Arizona’s economic development toolbox
100% Sales Factor
Deal‐Closing Fund
Reduce Taxes – Corporate & Personal Property
Enhance R&D Tax Credits – link to Universities
Modernize existing programs – Angel Investment
and Enterprise Zone
4. Improve Arizona’s regulatory environment
Streamline Process
Eliminate Unnecessary Burdens
GROWTH SECTOR
AEROSPACE & DEFENSE
Dr. Vicki Panhuise
Growth Sector Leader
November 30, 2010
GROWTH SECTOR
AEROSPACE & DEFENSE
COMMITTEE
Dr. Vicki Panhuise, Chair
Gary Abrams
Maria Baier
Drew Brown PUBLIC HEARING
October 22, 2010
Sherman Jennings
Mary Peters
Victor Smith
Dr. Patrick Soon‐Shiong
Sandra Watson
GROWTH SECTOR
AEROSPACE & DEFENSE
FORCE MULTIPLIERS
Create Statewide Aerospace and Defense
Plan
Leverage and Market Key Assets
Enhance Research and Development
Capabilities
Competitive Business Climate
Attract and Retain Quality Workforce
GROWTH SECTOR
AEROSPACE & DEFENSE
RECOMMENDATIONS
1. Enhance Arizona’s Business Climate
Modernize Existing Programs – Angel
Investment and Enterprise Zone
Support $100M Fund of Funds Program
100% Sales Factor
Establish Matching Funds for SBIR
Evaluate Property Tax Structure
Regulatory Reform
GROWTH SECTOR
AEROSPACE & DEFENSE
RECOMMENDATIONS
2. Accelerate Educational Improvements
Support K‐12 STEM Programs
Enhance Training and Workforce
Development Initiatives
3. Encourage Small Business Growth
Sponsor Requirements Conference
Foster Collaboration
GROWTH SECTOR
AEROSPACE & DEFENSE
RECOMMENDATIONS
4. Coordinate partnerships to enhance A&D
Establish ACA as the Voice for A&D
Assist SFAz with Governor’s Aerospace
Initiative
5. Build Arizona’s Research Competitiveness
Enhance Research Opportunities with SFAz
Enhance R&D Tax Credit
Support Centers of Excellence
Leverage Federally Funded Research
Centers
GROWTH SECTOR
RENEWABLE ENERGY
Michael Bidwill
Growth Sector Leader
November 30, 2010
GROWTH SECTOR
RENEWABLE ENERGY
COMMITTEE
Michael Bidwill, Chair
Hon. Kirk Adams
Maria Baier
Steve Cowman
Margie Emmermann
Herb Guenther
Ben PUBLIC HEARING
Grumbles
October 25, 2010
Dr. John Haeger
Michael Ingram
Kevin Kinsall
Doug Pruitt
Dr. Robert Shelton
Dr. Jeanne Swarthoug
Sandra Watson
Judy Wood
GROWTH SECTOR
RENEWABLE ENERGY
FORCE MULTIPLIERS
Develop Export Capabilities
Enhance Transmission and Storage Capacity
Upgrade Aging Infrastructure
Renewable Energy Finance Opportunities
Renewable Energy Coordination
Educated and Trained Workforce
GROWTH SECTOR
RENEWABLE ENERGY
RECOMMENDATIONS
1. Expand the ACA Renewable Energy Committee to
advance economic development
Establish a Coordinating Forum/Process
Ensure Economic and Environmental Benefits
are Maximized
2. Establish an aggressive economic toolkit to
attract and retain manufacturing opportunities
Deal‐Closing Fund
100% Sales Factor
Maintain Competitive Position
Market Renewable Energy Tax Credit
Programs
GROWTH SECTOR
RENEWABLE ENERGY
RECOMMENDATIONS
3. Expand Transmission for Export of Energy
Educate Leaders on Transmission Capacity
Limitations
Determine Impact of Expanding Transmission
Evaluate Financing Options to Expand
Transmission
4. Study Options to Increase Solar Energy Demand
Renewable Energy Standard
Non ACC Regulated Activity
Distributed Generation
Feed‐in Tariffs
GROWTH SECTOR
SMALL BUSINESS & ENTREPRENEURSHIP
Pat Sullivan
Growth Sector Leader
November 30, 2010
SMALL BUSINESS & ENTREPRENEURSHIP
GROWTH SECTOR
COMMITTEE
Pat Sullivan, Chair
Benito Almanza
Les Brun
Sherry Henry
PUBLIC HEARING
y y October 20, 2010
Peter Herder
Michael Kennedy
Victor Smith
Sandra Watson
Judy Wood
Entrepreneurship Committee
Recommendations
A Time to be BOLD
The Problem
• $650MM deficit for 2011
• $1.4B for 2012
• $2 Billion deficit forecast for 2014,
• Governor and legislature have already cut $2.2B
• $2B already borrowed by the State
• Already raised taxes by 14.5%
• Over 70% of our Deficits are “baked” in via
“MANDATES”
• Without employees our tax base shrinks
��� People want JOBS, not hand outs
The Problem
• We lack capital to start businesses in AZ
• We lack talented Entrepreneurs with great
ideas
• Our University Graduates move away –talent
drain
• Extremely fragmented support organizations
• Competition for start ups is growing fierce
A Solution
• Make Arizona “The Start Up State”
• Start a 30 year plan NOW
• We already have much to attract businesses
here
• We need something to coalesce all we have
to offer
• A “Catalyst” is needed to put us on the map
The Catalyst
• Annual $120MM “seed” fund every year (1.3
tenths of 1% of our annual budget)
• A competition held EVERY month for $10MM
of seed funding
• TWO FUNDS:
• $9MM targeted at companies who could grow
to over 100 employees – Average less than
$75,000 per company
• $1MM for “micro financing” of companies that
could grow to 10 or more employees –
Average less than $2,000 per Co.
• Goal is to help start 1,000 to 1,500+
companies per month
The Outcome
• Arizona would be the first to do something
BOLD
• Would attract ideas and management teams
from all over the world to compete and move
here
• Would steadily increase Sales and Personal
Income Taxes
• Would put Arizona on the Business Map
How?
• Start on a shoe string
• Attract VC’s from all over the world here for
follow on investments
• Build huge infrastructure of mentors and
focused support orgs
• Keep our talent and ideas here
• California is the Titanic
N P di
ECONOMIC DEVELOPMENT
New Paradigm
Eileen Klein
Chief of Staff
Office of Governor Brewer 21st Century Model
November 30, 2010
New Paradigm 21st Century Model
ECONOMIC DEVELOPMENT
Repeal Arizona Department of Commerce
Transfer Non‐Related Functions to Other
Agencies
Replace with Arizona Commerce Authority
Highly Privatized, Highly Accountable
Authorized with Tools Designed to Attract and
Retain Business
Funded with Recurring, Non‐General Fund
Appropriations; Private Sector Match
Advance with Package Designed to Enhance
Arizona’s Competitive Position
Competitiveness Package Goals and Objectives
ECONOMIC DEVELOPMENT
Increase Arizona’s Long‐Term Competitiveness for
Business Attraction, Retention and Growth
Incent High‐Value, High‐Growth Export‐Based
Business
Recapture Arizona’s Position for Quality Job Creation
Enhance Capital Formation
Improve Arizona’s Tax Ranking Among Competitor
States
Align with 2020 Educational Goals
Competitiveness Package GUARD RAILS
ECONOMIC DEVELOPMENT
Must Not Result in “Dead Weight
Loss” to the State
Minimize Impact to State Budget
Phased in Approach for Tax Policy
Reductions to occur after
expiration of Prop 100
Avoid Shifts to Homeowners
Competitiveness Package CONSENSUS PROPOSAL
ECONOMIC DEVELOPMENT
Attract New Base Industry Investments
Arizona Competes – Deal Closing Fund
Competitive
Tax Credits
Modernize Enterprise Zone ‐ Quality Jobs
Competitiveness Rank: 9 to 3 (Mountain West)
Extend/Modify Angel Investment Program
Competitiveness Rank: Top 10
Enhance Research and Development
Competitiveness Rank: Top 3
Competitiveness Package CONSENSUS PROPOSAL
ECONOMIC DEVELOPMENT
Attract, Retain and Grow Base Industries
Modernize Enterprise Zone Property Reclassification
Real & Personal
Long‐Term Tax Policy
100% Sales Factor
Competitiveness Rank: 19 to 1 (Top Tier)
Corporate Income Tax Reduction
Competitiveness Rank: 24 to 5
Eliminate Capital Gains Tax for Investment in
Qualified Small Businesses
Competitive
Summary Recommendations CONSENSUS PROPOSAL
ECONOMIC DEVELOPMENT
Establish and Fund ACA
Economic Development Toolbox
Competitiveness Package
Long‐Term Policy
Regulatory Reform
Education/Training
R&D
NEXT STEPS
Jan Brewer
Governor of Arizona
November 30, 2010
November 30 ACA BOARD MEETING
30, 2010
