(a) The Local Government Budget Sustainability Fund is hereby created within the Governor’s Office of Business and Economic Development. Upon appropriation, moneys in the fund shall be available for purposes of this article.

(b) The purpose of the program is to provide grants on a competitive basis to local entities that meet the requirements of the article and, when possible, prioritizing those that have the ability to leverage projects that are affiliated with a federal, state, or local program. The success of each grant shall be evaluated on a project-specific basis.

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(c) Grants shall be awarded to eligible local entities through at least one round of grants per fiscal year.

(d) The Governor’s Office of Business and Economic Development shall develop, in consultation with other state agencies and departments, criteria for the selection of grant recipients, which shall include, but not be limited to, all of the following:

(1) Applicants shall be limited to county governments in high-unemployment and high-poverty areas. For purposes of this grant program, high-unemployment and high-poverty areas are defined as geographic areas with a poverty rate or geographic rate that is 150 percent of the California statewide poverty rate, per the most recently updated data available from the United States Census Bureau’s American Community Survey 5-Year Estimates on or after January 1, 2022. Counties within geographic areas that fall under the high-unemployment and high-poverty designation as of July 1, 2022 are eligible for the duration of the program. Counties within geographic areas that fall under either the high-unemployment or high-poverty designations as of July 1, 2022, shall be eligible for the program if moneys are available following rounds designated for applicants that are county governments in high-unemployment and high-poverty areas.

(2) Applicants shall be participants in their region’s respective Community Economic Resilience Fund planning table.

(3) Applicants shall explain current challenges to local revenue sustainability for the next six years, and specifically challenges that pose a risk to the ability of applicants to continue existing government services.

(4) Applicants shall explain how funding secured from this program will be used for specific staffing needs to facilitate project identification, execution, construction, and implementation.

(5) Applicants shall explain how funding secured from this program will be used to support its ability to pursue projects that would advance one of the following five categories:

(A) Process improvement projects, which are defined as permit streamlining, inspections and siting review streamlining, business and community resource toolkits, or technological improvement and modernization, among others.

(B) Economic diversification and stability projects, such as those included in existing Comprehensive Economic Development Strategies, other regional economic development strategies, projects identified and prioritized by the regional high road transition collaboratives, which are defined as construction and nonconstruction opportunities aimed at new and emerging industry clusters that leverage workforce transition and skills generation, additional General Fund revenue sources, or construction and nonconstruction efforts to create new climate related accelerators or incubators and investment centers. Nonconstruction includes research, planning, strategic development and other predevelopment related expenses. Construction includes materials, labor, acquisition and final construction and other related activities.

(C) Workforce development projects, which are defined as construction and nonconstruction opportunities for new and existing workforce programs that will provide training, upskilling, or reskilling and can provide additional support services for participants specifically tied to economic diversification and stability opportunities.

(D) Existing process improvement, economic diversification and stability, and workforce development projects, as described in subparagraphs (A) to (C), inclusive, which have defined awards from federal agencies and include local jurisdiction matching funds requirements. Projects with a clear nexus to projects described in subparagraphs (A) to (C), inclusive, shall be considered.

(E) (i) Project identification and planning resources.

(ii) “Project identification and planning resources” means moneys intended to build staff specifically designed for staffing increases for the recognized economic development departments within the eligible counties to perform the actions required by this article, including for purposes of identifying, defining, applying for grants for, developing a Comprehensive Economic Development Strategy, as described in Section 303.7 of Title 13 of the Code of Federal Regulations, and developing projects described in subparagraphs (A) to (C), inclusive.

(iii) Funding provided pursuant to this subparagraph shall not exceed three million dollars ($3,000,000) in total to all applicants over the duration of the program.

(iv) A request made pursuant to this subparagraph shall include information on the applicable job requirements and skills needed to identify, propose, define, apply for grants for, and develop projects associated with subparagraphs (A) to (C), inclusive.

(6) If an applicant applies to receive funding pursuant to subparagraph (A), (B), or (C) of paragraph (5), the applicant shall provide details pertaining to projects that would be supported with these funds, including, but not limited to, budget, staffing, contracting, materials, equipment, and other expenses.

(7) Applicants shall include information pertaining to how projects are attributive to climate-resilience.

(8) Applicants shall agree to initiation meetings with office staff for resource identification, project scoping, industry engagement, regulatory agency engagement, other planning, and alignment with administration priorities.

(9) (A) Applicants shall be encouraged to utilize funds as match funding to other established state, federal, philanthropic, or other grant opportunities. Projects including a federal, local, or philanthropic match shall be prioritized by the Governor’s Office of Business and Economic Development.

(B) Applicants shall engage with the Governor’s Office of Business and Economic Development during development, and prior to, submission of an application that includes a local match. For projects where the local match funding requirements exceed the funding capacity of the program, the excess requirements shall be funded by the local jurisdiction providing the associated local match.

(C) Applicants shall provide detailed information, if they have match funding, on the matching funds available, in-kind matching funds budget details, grant application and submission details, grant award notices, and any other information that indicates the applicant’s receipt of match funding.

(10) Applicants shall provide a detailed assessment of the staffing requirements related to project applicants, including, but not limited to, duties and responsibilities, salary and benefits, working titles, reporting structure, and duration.

(11) Applicants shall include countywide government employment data as a part of an application.

(e) Grant recipients shall meet with the office periodically, at least bimonthly, to ensure projects are meeting specified benchmarks associated with climate resilience, business services process improvement, economic diversification, and long-term economic stability. If key indicators of progress are not being met, the office may take actions to terminate the grant agreement and have unspent dollars allocated to the project returned. The office may require reimbursement for allocated dollars that have been spent if it determines dollars have been spent improperly or in a manner that is outside the scope of the agreement.

(f) The office shall report to the Legislature each calendar year the number of grants and dollar amounts by local entity. The report shall be submitted in compliance with Section 9795.

(Added by Stats. 2022, Ch. 68, Sec. 24. (SB 193) Effective June 30, 2022. Repealed as of June 30, 2028, pursuant to Section 12100.125.)