BILL ANALYSIS Ó
AB 2600
Page 1
Date of Hearing: April 12, 2016
ASSEMBLY COMMITTEE ON HIGHER EDUCATION
Jose Medina, Chair
AB 2600
(Lackey) - As Amended March 16, 2016
SUBJECT: University of California: California Institute for
Aerospace
SUMMARY: Requests the University of California (UC) Regents
establish the California Institute for Aerospace. Specifically,
this bill:
1)Finds and declares all of the following:
a) California's aerospace industry is a world leader and a
powerful, reliable source of employment, innovation, and
export income, directly employing several hundred thousand
California workers.
b) The enactment of a state aerospace tax credit in 2014
has positioned California to receive thousands of new jobs
researching, designing, building, and testing the Long
Range Strike Bomber following the awarding of the contract
by the United States Air Force in 2015.
c) In order to maximize the state's potential for creating
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new research, design, and manufacturing jobs as a result of
this contract, NASA's recently announced New Aviation
Horizons initiative for aeronautics research and
development, and the numerous aerospace-related companies
already operating in the state, the creation of the
California Institute for Aerospace by the University of
California would greatly amplify the state's role in the
industry and improve public-private partnerships for
innovative research.
d) The model provided by the Collaborative Center for
Aerospace Sciences, a joint research venture of the United
States Air Force Research Laboratory and the University of
California, Los Angeles, is an example of the partnerships
the California Institute for Aerospace could form and
expand.
e) Throughout the history of the UC, many industries have
grown in partnership utilizing innovative research
conducted by the university.
2)Requests the UC Regents establish the California Institute for
Aerospace in order to achieve all of the following goals:
a) Grow California's economy and the aerospace industry by
creating new opportunities for jobs in aerospace research
and design.
b) Utilize public-private partnerships to perform
innovative research in aerospace technology.
c) Strengthen California's position as a global leader in
the aerospace industry by increasing the amount of
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research, development, and design taking place in the
state.
d) Maximize California's role in designing and building the
Long Range Strike Bomber.
e) Develop California's next generation of engineers and
technicians through expanded career technical education
opportunities within the aerospace industry.
f) Act as an incubator for aerospace-focused small
businesses and technology companies.
(b) Requests the UC Regents locate the California Institute for
Aerospace at a satellite campus within 20 miles of Edwards Air
Force Base or United States Air Force Plant 42 so that it will
be in close proximity to a large part of California's current
aerospace research and development.
(c) Provides that this bill shall only be implemented to the
extent that the UC Regents determine that adequate funding for
its purposes has been provided from federal, local, or private
sector sources, has been appropriated in the annual Budget Act
or in another statute, or has been provided from a combination
of these sources.
EXISTING LAW: Establishes UC as a public trust and confers the
full powers of the UC upon the UC Regents. The Constitution
establishes that the UC is subject to legislative control only
to the degree necessary to ensure the security of its funds and
compliance with the terms of its endowments. Judicial decisions
have held that there are three additional areas in which there
may be limited legislative intrusion into university operations:
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authority over the appropriation of state moneys; exercise of
the general police power to provide for the public health,
safety and welfare; and, legislation on matters of general
statewide concern not involving internal university affairs.
(Constitution of California, Article IX, Section 9)
FISCAL EFFECT: Unknown.
COMMENTS: Background. In 2014, the Legislature debated a
series of bills relative to the aerospace industry, a brief
history of the industry was included in those bill analyses:
The aerospace industry began in California with a few
aircraft builders around World War I, and then vastly
expanded in the mobilization for World War II. The industry
steadily grew during the Cold War encompassing a wide range
of activities, including military and civilian aircraft,
reconnaissance and communications satellites, strategic
missiles, and space exploration. By the 1980s, about 40% of
the aerospace business resided in southern California, and
the industry employed close to a half-million people. One
of the region's strongest selling points for aerospace was
its environment: the clear blue skies and ample open spaces
were ideal for testing new aircraft. California also was
home to a variety of related industries, particularly
petroleum, as well as top-notch research universities and a
large labor pool.
Defense spending peaked at $557 billion in 1985 (in constant
fiscal 2009 dollars) and then began a downward trend. The
collapse of the Soviet Union and the end the Cold War led to
more than 50 major defense companies consolidating into only
six. According to the Employment Development Department's
Labor Market Information Division, employment in the
Aerospace Production and Manufacturing sector declined from
139,300 in 1993 to 70,800 in 2013. Most of the decline
occurred before 2004. However, further job decline is
likely because defense spending is expected to fall due to
the implementation of federal budget cuts.
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Purpose of this bill. According to the author, "California's
aerospace companies in 2012 contributed $62 billion in tax
revenues, equivalent to more than a third of the state budget.
Employing a highly skilled and specialized workforce of more
than half a million people in commercial, military and civil
capacities, the aerospace industry's statewide economic impact
in 2012 exceeded $100 billion, with average annual aerospace
industry wages among the nation's highest." The author argues
"California institutes have been tremendous resources for
research in various industries. They have successfully
addressed critical issues facing the globe in the fields of
biology, physics, chemistry, economics, and medicine."
According to the author, "with a small investment, such
institutes provide a substantial economic impact on their
surrounding areas and the entire state by accelerating
research and product development. This institute would
strengthen California's position as a global leader in the
aerospace industry, increase public-private partnerships and
fully maximize our role in designing and building the Long
Range Strike Bomber."
Issues to consider. The committee may wish to consider where
the creation of a UC Institute for Aerospace falls within
Legislative priorities. Additionally, the committee may wish to
consider whether this bill necessary in light of AB 2664
(Irwin), which provides funding to UC to expand the
infrastructure necessary to increase innovation and
entrepreneurship for the purpose of creating economic
development for California. AB 2664 is supported by UC and
committee staff understands that it represents their priority
for innovation and economic development activities. Could
Legislative support for the creation of a UC Aerospace
Institute, as outlined in this bill, divert UC from its existing
focus?
REGISTERED SUPPORT / OPPOSITION:
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Support
Antelope Valley Board of Trade
Opposition
None on File
Analysis Prepared by:Laura Metune / HIGHER ED. / (916) 319-3960