BILL ANALYSIS Ó
SB 245
Page 1
Date of Hearing: July 3, 2012
ASSEMBLY COMMITTEE ON JOBS, ECONOMIC DEVELOPMENT AND THE ECONOMY
V. Manuel Pérez, Chair
SB 245 (Rubio) - As Amended: June 22, 2011
SENATE VOTE : 28-8
SUBJECT : Military installations: plan for retention and
sustainability
SUMMARY : Re-establishes the Office of Military Support (OMS)
within the Business, Transportation and Housing Agency (BTH) for
the purpose of serving as a clearinghouse for state activities
related to the military including base closures. Specifically,
this bill :
1)Expresses legislative intent that, among other things,
California has experienced five rounds of base closures
resulting in the closure of 29 bases since 1988 and additional
bases may be considered in the future. Further, it expresses
that California lost more federal payroll jobs in its 29 base
closures under rounds one to four than all the rest of the
states put together.
2)Establishes the OMS, within BTH, for the purpose of providing
a central clearinghouse for all defense retention, conversion,
base reuse, and sustainability activities in the state and to
interact and communicate with U.S. military installations.
3)Requires the Governor to appoint a Governor's Advisor on
Military Affairs (AMA), who will be responsible for the
operations of OMS. The AMA's compensation is set by the
Secretary of BTH with the approval of the Department of
Personnel Administration.
4)Authorizes OMS to establish a Military Advisory Committee
(MAC) to advise the OMS on military-related matters including,
but not limited to, active U.S. Department of Defense (DOD)
installations and defense conversion issues. Meetings of the
MAC may be called on an as needed basis. No reimbursement for
expenses or payment of per diem is authorized for members of
the MAC. Membership is unlimited and may include policy level
representatives from state agencies and departments, higher
education systems, and Members of the Legislature.
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5)Requires OMS to, among other responsibilities:
a) Utilize and update the plan prepared by a prior Military
Advisors Council for the 1985 Base Realignment and Closure
(BRAC) proceeding. The updated plan is required to include
basic information about California's current military
instillations, outline a retention strategy, and coordinate
related activities between potentially impacted
communities, the Legislature, the Governor, and California
Congressional delegation. The plan is also required to
identify military installations or missions in other states
that could be recruited to California. An updated plan is
due to the Legislature by January 1, 2015.
b) Develop a strategic plan for state and local defense
sustainability, retention and conversion efforts, which
addresses the state's role in assisting communities with
potential base closures and those impacted by previous
closures. OMS may coordinate with interested state and
local entities on the strategic plan to retain current DOD
instillations, facilities, bases and related civilian
activities in California.
c) Conduct outreach and provide a network to facilitate
assistance and coordination of all defense retention and
conversion activities within the state.
d) Support the development and coordination of state
retention advocacy efforts at the federal level.
e) Conduct an evaluation of existing state retention and
conversion programs and provide the Legislature with
recommendations on the continuation, elimination or
modification of those programs including an assessment of
the adequacy of funding levels.
f) Serve as the primary state liaison with the DOD and its
installations in the state including resolving any disputes
or issues between the DOD and state entities.
g) Review and make recommendations regarding state actions
or programs that may affect or impact DOD installations or
the state's military base retention and reuse activities.
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h) Authorize, to the extent that moneys are available, that
OMS:
i) Act as a central clearinghouse for base retention or
conversion assistance activities, information, funding,
regulations, stakeholder input, and application
procedures for federal and state grants;
ii) Provide technical assistance to communities with
potential or existing base closure activities;
iii) Identify available state and federal resources to
assist workers, businesses, communities and educational
institutions;
iv) Standardize state endorsement procedures and develop
fast-track review procedures for proposals seeking state
funds to match federal defense conversion funding; and
v) Establish and maintain electronic access to
databases in such fields as defense-related companies,
industry organization proposals for the state and federal
defense industry, community assistance, training and base
retention.
6)Requires OMS to solicit and accept funds from industry,
foundations or other sources to support its operations.
Private funds are required to be deposited into a Military
Support Account, which is created by this bill, within the
existing Special Deposit Fund in the State Treasury.
7)Requires OMS to prepare a study considering strategies for the
long-term protection of lands adjacent to military bases from
development that would be incompatible with the continuing
missions of those bases.
8)Authorizes BTH, with input from OMS, to establish a military
support grant program to provide moneys to communities with
military bases to assist them with the development of a
retention strategy.
EXISTING LAW :
1)Establishes BTH for the purpose, among other things, of
overseeing and coordinating the activities of various
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government entities and programs with responsibility for
maintaining the strength and efficiency of California's
infrastructure and financial markets. BTH is specifically
designated as the state lead agency in issues of international
trade, excluding agriculture.
2)Establishes the Governor's Office of Planning and Research
(OPR) for the purpose, among other things, of developing
guidelines for the preparation and content of city and county
general plans, including providing advice on civilian
development and its relationship to military instillations.
3)Establishes the Governor's Office of Business and Economic
Development (GO-Biz) within the Governor's Office for the
purpose of serving as the lead state entity for economic
strategy and marketing of California on issues relating to
business development, private sector investment and economic
growth. GO-Biz also serves as the administrative oversight
for the California Business Investment Service and the Office
of the Small Business Advocate.
FISCAL EFFECT : The measure was referred from the Senate
Committee on Appropriations to the Senate Floor pursuant to
Senate Rule 28.8.
COMMENTS :
1)Author's Purpose : According to the author, "Over 230,000
active duty and civilian personnel are currently employed by
the Department of Defense and California receives close to $60
billion of the Department's direct expenditures. While the
military has always been an important participant in
California's economy, in today's current economic downturn the
military's role is even more crucial and the Legislature must
take a leadership role in preserving the state's relationship
with the military."
2)Governor's Reorganization Plan (GRP 2) and SB 245 : On May 3,
2012 Governor Jerry Brown submitted GRP 2 to the Legislature
for its review. Among other changes, the GRP 2 proposes to
eliminate BTH and redistribute its economic development
programs to GO-Biz.
The reorganization plan will go into effect on July 3, 2012
unless a resolution of disapproval is passed by a majority
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vote in one of the houses. As SB 245 proposes to establish
OMS within BTH, the Committee may want to consider relocating
OMS to GO-Biz.
3)Selecting the Best Strategy : DOD has requested two new BRAC
rounds, one in 2013 and another in 2015. While it is still
unclear whether a new commission will be constituted to
develop a list of base closures and realignments, two measures
ŬSB 245 and AB 342 (Atkins)] are currently before the
Legislature proposing conflicting views of how the state's
relationship with DOD and base closures should be carried out.
Staff has prepared the chart below to help Members select a
potential strategy for moving forward. For the purpose of
this exercise, the role of BTH in SB 245 is replaced by
GO-Biz, as suggested in the prior comment.
--------------------------------------------------------------
| Comparison of Key Elements of SB 245 and AB 342 |
--------------------------------------------------------------
|--------------+--------------+--------------+--------------+--------------+--------------+--------------|
| | Lead Agency | Advisor on | Stakeholder | Strategy for | Coordinate | Addresses |
| | | Military | Council | Base Reuse | with Local |Retention and |
| | | Affairs | | | Communi-ties | Conversion |
|--------------+--------------+--------------+--------------+--------------+--------------+--------------|
| | | | | | | |
|--------------+--------------+--------------+--------------+--------------+--------------+--------------|
|SB 245 | BTH/GO-Biz | Yes | Yes | Yes | Yes | Yes |
|--------------+--------------+--------------+--------------+--------------+--------------+--------------|
|AB 342 | OPR | No | No | Yes | Yes |Yes |
--------------------------------------------------------------------------------------------------------
While the measures have many areas in common, the capacity of
OPR and GO-Biz differ significantly. OPR, as an example, has
expertise in land use planning including the California
Environmental Quality Act and has existing relationships with
local planners, and therefore, local governments across the
states. GO-Biz, to its credit, has an existing network of
regional and local economic developers, as well as community
development financing entities.
One possible solution would be to use both OPR and GO-Biz in
moving forward on a proactive and comprehensive strategy to
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(a) leverage economic opportunities of existing bases; (b)
protect current bases from closure; and (c) support sound
conversion practices, should a base be selected for the BRAC
closure list.
If OPR were to maintain the lead agency status for U.S.
military engagement and focus its efforts on resolving land
use conflicts with DOD, GO-Biz could take the lead in
facilitating the development of an economic development
strategy that highlights the value of California and its
regions in delivering the military mission. Other areas where
GO-Biz would have expertise is in the economic development
conveyance (EDC) authority under Base Closure and Realignment
Law, as well as other economic and community development
related rules and considerations.
Subsequent comments describe the state's historical base
closure structure, the current activities of OPR related to
DOD and local planning, and related legislation from the
current and previous sessions.
4)Military Base Closures and the Impact on California : Due to
its strategic west coast location, good weather, wide open
spaces and varied terrain, California has historically served
as valuable location for military bases, installations and
military-related manufacturing facilities. Following World
War II, California's private sector economy leveraged war-time
public investments into an almost unparalleled California
technology boom driven by the deepening Cold War with the
Soviet Union and renewed interest in the commercialization of
military initiated research and development. Companies such
as Lockheed Martin and McDonald Douglas which played key
manufacturing roles during the war, began to expand production
lines to meet the needs of new civilian customers, while still
retaining their position within the U.S. military industrial
complex.
In 1988, as the Cold War was drawing to a close, President
Ronald Reagan and the U.S. Congress looked to downsizing
military facilities. Recognizing the challenges Congress
would face by directly selecting bases for closure, the BRAC
process was established to have an independent commission
periodically review DOD facility needs and submit a list of
recommendations for Congressional consideration. Once the
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BRAC list is submitted, Congress has the limited options of
approving or disapproving the list - no amendments are
allowed. Since 1988, five successive BRAC Commissions have
been convened (1989, 1991, 1993, 1995 and 2005) and have
recommended the closure of 350 military installations and the
related realignment in operations and functions across the
world.
Given the significance of the state's economic gains in
post-war America, as high as $66 billion in defense spending
in 1988, it is not necessarily surprising that federal
policies to reduce and realign the U.S. military presence
would substantially impact California. Even recognizing that,
data suggests that California facilities were
disproportionately affected. In the first four BRAC rounds,
California lost more federal payroll from its 29 base closures
than all of the rest of the states combined. The military
payroll in California dropped by over 100,000 civilian and
military workers and an additional 300,000 private sector
defense industry jobs were lost due to base closures and
reduction of federal military spending. These losses are in
stark contrast to the post-Vietnam closures where California
lost only 7 of the 100 bases closed nationwide.
According the terms of the bill, California currently has over
30 active bases, with 237,000 active duty and civilian defense
personnel. Direct DOD expenditures in California are over $59
billion including employees, contracts and capital
investments. The DOD pays $3 million annually in fees,
permits, and licenses with the state.
5)The State's Engagement on Base Closure and Reuse : Research
undertaken in preparing this analysis suggests that in the
early BRAC rounds, there was very little state-level activity.
Base retention advocacy was organized at the local level, San
Diego being one notable example. As an example, Governor Pete
Wilson issued Executive Order W-21-91 which formally
designated the Governor's Office of Planning and Research
(OPR) as the state's central point of contact and liaison for
closure and reuse of military bases; established an internal
working group led by OPR to address economic, employment and
planning issues; and established the California Base Closure
Environmental Committee to expedite environmental remediation
of closing bases.
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The state role in conversion was sequentially heightened in
1993 when Governor Wilson transferred lead entity status from
OPR to the Trade and Commerce Agency (TCA) with the issuance
of a second and third executive order. EO W-50-93 established
the intra-governmental California Military Base Reuse Task
Force and the latter order, EO W-44-93, established the
intergovernmental California Council on Defense Industry
Conversion and Technology Assessment (Defense Conversion
Council). The Governor committed $61.7 million to the Defense
Conversion Council in order to "boost defense conversion
efforts and help California compete for additional federal
funds." The State Senate and Assembly also chose a higher
profile strategy to address base closure issues with each
house convening special committees: the Senate Select
Committee on Defense Closures and the Assembly Task Force on
Defense Conversion. Legislation passed later that year
codified the key points of the EO including designating TCA as
the lead coordinating agency, as well as requiring the state's
network of nonprofit regional technology alliances to provide
technical assistance to small and medium size businesses on
defense conversion programs ŬSB 458 (Hart), Chapter 445,
Statues of 1993].
In 1994, state activities expanded to more aggressively
protect California bases from closure. EO W-87-94 established
the Office of Military Base Retention and Reuse (OMBRR) within
the TCA. By most measurement, California fared better,
comparatively, to other areas of the nation in the following
BRAC round. OMBRR was retained subsequent to the 1995 round
of base closures in order to provide ongoing assistance to
communities with closed bases, as well as communities with
active installations in an effort to ensure continued
viability and retention. The OMBRR was codified through the
enactment of SB 1099 (Knight et al), Chapter 425, Statues of
1999.
In 2003, the Legislature and Governor decided to eliminate the
TCA, which resulted in the transfer of the Defense Conversion
Council and OMBRR to BTH. The Governor established a new
position of Governor's Advisor on Military Affairs and
expanded the role of the OMBRR to include issues related to
the aerospace industry, resulting in a name change of Office
of Military and Aerospace Support (OMAS)ŬSB 926 (Knight and
Ashburn), Chapter 907, Statutes of 2004.] The bill also
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authorized local governments to access funds at the California
Infrastructure and Economic Development Bank in order to
develop projects on or near a military base that would enhance
the base's mission of making California more competitive in
future BRAC rounds. The authority for OMAS sunset on January
1, 2007.
SB 245 essentially codifies the 1999 and 2003 legislation,
excluding the aerospace industry provisions. Additional
bills related to the state's military base closure and
conversion activities are described in the comment, "Related
Legislation."
6)OPR's Relationship with the Military : In response to nearly a
decade of conflicts between U.S. military and state and local
land use activities, Governor Arnold Schwarzenegger issued
Executive Order EO S-16-06, to re-establish the position of
the Governor's AMA.
Under this executive order, OPR is designated as the lead
coordinator for state policies that affect the military,
including but not limited to, land use planning, development
of legislation that strengthens the California-DOD
relationship, and work on regulatory issues that affect the
sustainability of defense operations in California. In 2011,
AB 342 (Atkins) was introduced to substantially codify the EO,
excluding the appointment of an AMA. Amendments taken in
January 2012 expand OPR's duties, as outlined in the executive
order, to additionally include base realignment and closure
issues, thereby creating a conflict with SB 245. Below are
some examples of the types of activities OPR has undertaken in
its role as liaison with the U.S. military.
a) OPR prepared "The California Advisory Handbook for
Community and Military Compatibility Planning" to provide
guidance to local governments, the military and developers
on how to address land use activities near military
installations and activities.
b) OPR created a mapping tool that local governments and
developers can use to identify whether proposed planning
projects are located in the vicinity of military bases and
military airspace.
c) OPR prepared a supplemental General Plan guidance on
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addressing military compatibility issues when developing,
updating or significantly amending general plans.
7)Future BRAC Rounds : The White House has called for two new
BRAC rounds as a mechanism for reducing the DOD budget. Both
the House and Senate Armed Services Committees have produced
2013 spending bills, however, that deny DOD's request to
establish a BRAC in 2013. The Conference Committee charged
with reconciling the two bills contains no pro-BRAC members,
which would likely result in delaying the base closure process
another year, according to a Washington Post article 6/20/12.
DOD intends to use the potential savings from the closures to
offset Congress' 10-year DOD cut target of $487 billion.
Without authority for additional BRAC rounds, DOD will be
required to make deeper cuts in other areas of military
spending, which would likely impact California with its
significant annual military spending.
8)Technical Issues : SB 245 proposes a variety of studies,
strategies and advocacy responsibilities, some of which appear
redundant. Staff recommends that the requirements of the bill
be streamlined to allow flexibility in program delivery.
9)Related Legislation : Below is a list of related legislation
from the current and prior session.
a) AB 342(Atkins) Office of Planning and Research as DOD
Liaison : This bill directs OPR to serve as the state's
liaison to the U.S. Department of Defense in order to
facilitate coordination regarding issues that are of
significant interest to the state and the department,
particularly with regard to any proposed federal Base
Realignment and Closure actions. Status: The bill is
pending on the Senate Floor.
b) SB 268 (Roberti) Defense Conversion Matching Grant
Program : The bill created the Defense Conversion Matching
Grant Program, administered by the Office of Strategic
Technology within the TCA, and overseen by the Defense
Conversion Council. Also appropriated $5.5 million from
the Petroleum Violation Escrow Account to fund defense
conversion efforts. Status: The bill was signed by the
Governor, Chapter 441, Statutes of 1993. (The program was
repealed on 1/1/99.)
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c) SB 458 (Hart) California Defense Conversion Act of 1993 :
This bill enacted the
California Defense Conversion Act of 1993 to enable the
state to assume a leadership role in converting to a
peacetime economy. Also, the bill created a 15-member
Defense Conversion Council in the TCA with prescribed
powers and duties, including the establishment of criteria
for designation of regional technology alliances. Status:
The bill was signed by the Governor, Chapter 445, Statutes
of 1993. (The Act was repealed on 1/1/99.)
d) SB 926 (Knight and Ashburn) Consolidation of Defense
Retention and Conversion Programs : The bill changed the
name of OMBRR to OMAS, transferred its functions to BTH,
and set forth its duties and authority with respect to
state and local defense retention and conversion,
consolidating all such programs under a single office
within state government. The bill also provided for the use
of state Infrastructure and Economic Development Bank funds
by local governments to develop projects on or near a
military base that enhance the base's mission. Status: The
bill was signed by the Governor, Chapter 907, Statutes of
2004.
e) SB 1462 (Kuehl)Local Government Coordination with U.S.
Military : This bill required cities and counties to
forward to branches of the United States Armed Forces
copies of significant proposed amendments to their general
plans in instances where the proposed action lies within
military special use airspace or low-level flight paths.
Status: The bill was signed by the Governor, Chapter 906,
Statutes of 2004.
f) SB 1468 (Knight) Local Planning and Military
Instillations : This bill required cities and counties to
include military installations, aviation routes, airspace,
and readiness activities in their state-mandated general
plans, and requires OPR to provide guidance to local
officials as part of its advisory General Plan Guidelines.
Status: The bill was signed by the Governor, Chapter 971,
Statutes of 2002.
g) SB 1698 (Ashburn) Extension of OMAS : The bill extended
the authority for the Office of Military and Aerospace
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Support (OMAS) for two years, until January 1, 2009, and
expanded the duties of the OMAS to include outreach to the
aerospace industry for the purpose of fostering aerospace
enterprises in California. Status: The bill was signed by
the Governor, Chapter 681, Statutes of 2006.
REGISTERED SUPPORT / OPPOSITION :
Support - None received Opposition - None received
Analysis Prepared by : Toni Symonds / J., E.D. & E. / (916)
319-2090