BILL ANALYSIS                                                                                                                                                                                                    Ó

                             Senator Jim Nielsen, Chair
                                2015 - 2016  Regular 

          Bill No:             SB 506         Hearing Date:    4/28/15
          |Author:    |Fuller                                               |
          |Version:   |4/14/15                                              |
          |Urgency:   |No                     |Fiscal:    |Yes              |
          |Consultant:|Wade Teasdale                                        |
          |           |                                                     |
               Subject:  Economic development:  military and aerospace

           *This measure was scheduled to be heard on Monday, April 27,  
              2015 in the Committee on Business, Professions and Economic  

              1.   Establishes a process for the designation of a local  
               retention authority to serve as the lead local government  
               entity responsible for efforts to retain local military  

             2.   Creates the Military and Aerospace (MA) Program under  
               the Governor's Office of Business and Economic Development  
               (GO-Biz) to address concerns relating to state and local  
               defense retention, base conversion and base reuse  

             3.   Establishes the Space Enterprise Development Program  
               within GO-Biz to foster activities that increase the  
               competitiveness of space enterprise in California,  
               including the commercial use of space, space vehicle  
               launches, space launch infrastructure, manufacturing,  
               applied research, technology development, economic  
               diversification, and business development.

           Existing law:


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           Provisions Related to Military Base Retention, Conversion and  

             1.   Establishes the Office of Planning and Research (OPR) in  
               the Governor's office and tasks OPR with the formulation,  
               evaluation and updating of long-age goals and policies for  
               land use, population growth and distribution.

             2.   Requires OPR to develop and adopt guidelines for the  
               preparation and content of the mandatory elements required  
               in city and county general plans that, among other  

                  a.        Contain advice including recommendations for  
                    best practices to allow for collaborative land use  
                    planning of adjacent civilian and military lands and  

                  b.        Encourage enhanced land use compatibility  
                    between civilian lands and any adjacent or nearby  
                    military facilities through the examination of  
                    potential impacts upon one another.

                  c.        Contain advice for addressing the effects of  
                    civilian development on military readiness activities  
                    carried out on military installations, operating  
                    areas, training areas, training routes, airspace and  
                    other territory adjacent to those installations and  

             3.   Requires OPR to prepare and publish an advisory planning  
               handbook for use by local officials, planners, and builders  
               that explains how to reduce land use conflicts between the  
               effects of civilian development and military readiness  
               activities carried out on military installations, operating  
               areas, training areas, training routes, and airspace, and  
               other territory adjacent to those installations and areas.

             4.   Requires OPR to serve as the state's liaison to the  
               United States Department of Defense (DoD) in order to  
               facilitate coordination on issues of mutual significant  
               interest, particularly with regard to any proposed federal  
               Base Realignment and Closure (BRAC) actions.


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                  a.        Provides that OPR shall:

                        i.              Coordinate with DoD, other state  
                         agencies and departments, local governments, and  
                         other private and public entities to ensure the  
                         sustainability of defense activities within the  

                        ii.                            Develop legislation  
                         that supports the relationship between the state  
                         and DoD;

                        iii.                           Work with federal  
                         defense agencies to address regulatory activities  
                         by state agencies that affect the sustainability  
                         of defense operations within the state and;

                        iv.                            Develop any  
                         regional or statewide strategies necessary for  
                         the establishment and retention of the state's  
                         military facilities and installations that are  
                         potentially impacted by any proposed federal BRAC  

             5.   Establishes the Military Base Reuse Authority Act to  
               plan for, finance and manage the transition of military  
               bases from military to civilian use.

             6.   Establishes GO-Biz within the Governor's Office and  
               authorizes it to:

                  a.        Serve as lead entity for economic strategy and  
                    the marketing of California on issues relating to  
                    business development, private sector investment and  
                    economic growth.

                  b.        Coordinate development of policies and  
                    criteria to ensure that federal grants administered or  
                    directly expended by state government advance  
                    statewide economic goals and objectives.

                  c.        Market the business and investment  
                    opportunities available in California by working in  


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                    partnership with local, regional, federal, and other  
                    state public and private institutions to encourage  
                    business development and investment in the state.

                  d.        Support small businesses by providing  
                    information about accessing capital, complying with  
                    regulations, and supporting state initiatives that  
                    support small business.

             7.   Requires GO-Biz to designate Innovation Hubs (iHubs)  
               within the state to stimulate partnerships, economic  
               development, and job creation by leveraging assets to  
               provide an innovation platform for startup businesses,  
               economic development organizations, business groups, and  
               venture capitalists.

             8.   Requires an iHub to: (a) provide counseling and  
               technical assistance in the areas of entrepreneurial  
               business planning and management, financing, and marketing  
               for small businesses; (b) provide expert advice to  
               entrepreneurs on starting a business, including legal  
               requirements for starting a business and access to  
               financing opportunities; (c) conduct business workshops,  
               seminars, and conferences with local partners; and (d)  
               facilitate partnerships between innovative startup  
               businesses, research institutions, and venture capitalists  
               or financial institutions.

             9.   Creates the Innovation Accelerator Account within the  
               California Economic Development Fund in the State Treasury  
               and states that, subject to the approval of the Department  
               of Finance, all moneys collected and received by GO-Biz for  
               California Innovation Initiatives from gifts, bequests, or  
               donations shall be deposited in the Innovation Accelerator  
               Account and continuously appropriated to GO-Biz pursuant to  
               requirements for a gift, bequest, or donation. 

             10.             Specifies that GO-Biz is the primary state  
               agency authorized to attract foreign investments, cooperate  
               in international public infrastructure projects, and  
               support California businesses in accessing markets, and  
               requires the Director of GO-Biz to develop an international  
               trade and investment program attracting  
               employment-producing direct foreign investment to the state  


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               and provides support for California businesses in accessing  
               international markets and increasing exports.

             11.             Authorizes GO-Biz to establish international  
               trade and investment (ITI) offices outside of the U.S.  
               according to certain requirements.  Establishes processes  
               and accountability measures for GO-Biz to accept private  
               moneys to fund, establish and operate international trade  

             12.             Establishes the California Economic  
               Development Fund in the State Treasury for the purpose of  
               receiving federal, state, local, and private economic  
               development funds, and receiving repayment of loans or  
               grant proceeds and interest on those loans or grants.   
               Provides that upon appropriation by the Legislature, moneys  
               in the fund may be expended by GO-Biz to provide matching  
               funds for loans or grants to public agencies, nonprofit  
               organizations, and private entities, and for other economic  
               development purposes, consistent with the purposes for  
               which the moneys were received.

           This bill:

           Provisions relating to The Military and Aerospace Support Act

             1.   Enacts the Military and Aerospace Support Act.

             2.   Establishes the MA Program within GO-Biz to be proactive  
               in retaining and expanding military facilities, the  
               aerospace industry, and the jobs and intellectual capital  
               associated with them in the state. States that the purpose  
               of the MA Program is to provide a central clearinghouse for  
               all defense retention, conversion, and base reuse  
               activities in the state and interacting and communicating  
               with military installations in the state and to retain and  
               encourage growth in the aerospace and space flight  
               industries through technical and regulatory advice, grants  
               and other programs administered by GO-Biz or other state  

             3.   Authorizes GO-Biz to establish a Military Advisory  
               Council (Council) to provide input, information, technical  
               advice, or other comments to the MA Program on military  


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               related matters, including, but not limited to, active DoD  
               installations in California and defense conversion issues.  
               Provides that participation by Council members is voluntary  
               and there is no reimbursement for per diem or expenses.   
               Provides that the Council may include, but is not limited  
               to, representatives from any legislative office, state  
               agency, local government, industry, and civic or research  
               organizations that may have an interest in defense related  

             4.   Requires the MA Program to do all of the following:

                  a.        Develop and recommend to the Governor and  
                    Legislature a strategic plan for state and local  
                    defense retention and conversion efforts. The plan  
                    shall address the state's role in assisting  
                    communities with potential base closures and those  
                    impacted by previous closures. GO-Biz may coordinate  
                    with other state agencies, local groups, and  
                    interested organizations on this strategic plan to  
                    retain current DoD installations, facilities, bases,  
                    and related civilian activities.

                  b.        Conduct outreach to entities and parties  
                    involved in defense retention and conversion across  
                    the state and provide a network to facilitate  
                    assistance and coordination for all defense retention  
                    and conversion activities within the state.

                  c.        Help develop and coordinate state retention  
                    advocacy efforts on the federal level.

                  d.        Until January 1, 2020, conduct an evaluation  
                    of existing state retention and conversion programs  
                    and provide the Legislature with recommendations on  
                    the continuation of existing programs, including, but  
                    not limited to, the possible elimination or alteration  
                    of those programs and provide recommendations to the  
                    Legislature on the necessity of new programs for  
                    defense retention and adequate funding levels.

                  e.        Update the plan prepared by the Defense  
                    Conversion Council as it existed on December 31, 1998,  
                    and any subsequent state agency reports, with the goal  


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                    to minimize California's loss of bases and jobs in  
                    future rounds of base closures. States that the new  
                    plan shall include, but not be limited to, identifying  
                    major installations in California, determining how  
                    best to defend existing bases and base employment in  
                    this state, coordinating retention activities with  
                    communities that may face base closures, developing  
                    data and analyses on bases in this state and  
                    coordinating with the state congressional delegation,  
                    the Legislature, and the Governor. Authorizes GO-Biz  
                    to temporarily borrow technical, policy, and  
                    administrative staff from other state agencies,  
                    including the Legislature.

                  f.        Serve as the primary state liaison with DoD  
                    and its installations in this state and assist in  
                    resolving any disputes or issues between the DoD and  
                    state entities.

                  g.        Review actions or programs by state agencies  
                    that may affect or impact DoD installations or the  
                    state's military base retention and reuse activities,  
                    and recommend to the Governor and the Legislature  
                    actions that may be taken to resolve or prevent  
                    similar problems in the future.

             5.   Authorizes the MA Program, providing that funds and  
               resources are available, to also:

                  a.        Provide a central clearinghouse for all base  
                    retention or conversion assistance activities,  
                    including, but not limited to, employee training  
                    programs and regulation review and permit  

                  b.        Provide technical assistance to communities  
                    with potential or existing base closure activities.

                  c.        Provide a central clearinghouse for all  
                    defense retention and conversion funding, regulations,  
                    and application procedures for federal or state  

                  d.        Serve as a central clearinghouse for input and  


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                    information, including needs, issues, and  
                    recommendations from businesses, industry  
                    representatives, labor, local government, and  
                    communities relative to retention and conversion  

                  e.        Identify available state and federal resources  
                    to assist businesses, workers, communities, and  
                    educational institutions that may have a stake in  
                    retention and conversion activities.

                  f.        Provide one-stop coordination, maintain and  
                    disseminate information, standardize state endorsement  
                    procedures, and develop fast-track review procedures  
                    for proposals seeking state funds to match funding  
                    from federal defense conversion programs.

                  g.        Maintain and establish databases in fields  
                    such as defense-related companies, industry  
                    organization proposals for the state and federal  
                    defense industry, community assistance, training, and  
                    base retention, and provide electronic access to the  

             6.   Authorizes GO-Biz to apply for grants and seek  
               contributions from private industry to fund MA Program  
               operations. Provides that any private funds shall be  
               deposited into the Military and Aerospace Account.  
               Authorizes GO-Biz to expend moneys in the account, upon  
               appropriation by the Legislature in the annual Budget Act,  
               only for the purposes outlined above related to the MA  
               Program. Provides that records of funds received and  
               expenditures made shall be subject to public disclosure and  
               a report describing the receipt and expenditure of these  
               funds shall be submitted to the Department of Finance, the  
               Assembly Committee on Budget, and the Senate Committee on  
               Budget and Fiscal Review at least biennially.

             7.   Requires GO-Biz to establish a Military Support Grant  
               program (MS Grant Program) to grant funds to communities  
               with DoD installations to assist them in developing a  
               retention strategy. States that to discourage multiple  
               grant applications for individual defense installations in  
               a region, the criteria for grants shall be drafted to  


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               encourage a single application for grant funds to develop a  
               single regional defense retention strategy. Requires that  
               the structure, requirements, administration, and funding  
               procedures of the grant program be submitted to the  
               Legislature for review at least 90 days prior to making the  
               first grant disbursement. States that GO-Biz may only make  
               a grant award if the local community provides at least 50  
               percent or more in matching funds or in-kind services, with  
               at least 50 percent of that match being in the form of  

             8.   Requires GO-Biz to adopt necessary regulations to  
               implement the MA Program and MS Grant Program and shall  
               adopt these regulations as emergency regulations.

          Provisions Related to Local Military Retention Entities

             9.   Defines the following terms for provisions related to  
               local retention entities:

                  a.        "Military installation" means a base, camp,  
                    post, station, yard, center, homeport facility for any  
                    ship, or other facility under the jurisdiction of the  

                  b.        "Affected local government" means any county  
                    or city identified as located wholly or partly within  
                    the boundaries of a military installation or as having  
                    a sphere of influence over any portion of the  
                    installation with responsibility for local zoning and  
                    planning decisions.

             10.             Finds and declares the following: 

                  a.        Because of the tremendous economic impact that  
                    military installations have on the state, it is in the  
                    best interest of the state to facilitate their  

                  b.        It is the intent of the Legislature to  
                    encourage cooperation among affected local governments  
                    in their efforts to retain military installations in  
                    this state by authorizing the creation of a joint  
                    powers authority.


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             11.             The Legislature also encourages affected  
               local governments to engage other community-based  
               organizations in their retention activities.

             12.             Requires a local retention authority (RA) to  
               be recognized for each active military installation in this  
               state. Requires a list of RAs or their successors,  
               including, but not limited to, separate airport or port  
               authorities recognized as the local retention authority for  
               the military installations, to be maintained by OPR.  
               Authorizes a joint powers authority to be designated or  
               created if multiple affected local governments are  
               identified as an affected local government.

             13.             Requires the state to recognize an RA for  
               each active military installation if resolutions  
               acknowledging it as the RA are adopted by all Boards of  
               Supervisors (BOSs) and City Councils (CCs) for counties and  
               cities identified as affected local governments.

             14.             Provides that, if prior to January 1, 2004, a  
               local government was awarded grant moneys pursuant to any  
               predecessor agency for a specific military installation and  
               still qualifies as an affected local government, the  
               recipient local government shall be recognized by the state  
               as the RA unless resolutions acknowledging a different RA  
               are adopted by all County BOSs and CCs for counties and  
               cities identified as affected local governments.

             15.             Requires OPR, in consultation with GO-Biz, to  
               recognize an RA for each military installation if the  
               necessary resolutions are not adopted and forwarded before  
               October 1, 2016 to OPR.

             16.             States that the RA shall be recognized by all  
               state agencies as the local retention planning authority  
               for the military installation and requires the state to  
               encourage the federal government and other local  
               jurisdictions to recognize these RAs.

          Provisions Related to the Space Enterprise Development Act

             17.             Enacts the Space Enterprise Development Act  


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               and defines the necessary terms:

             18.             Requires GO-Biz to implement a space  
               enterprise development program (Space Program) to foster  
                                                                   activities that increase the competitiveness of space  
               enterprise in California, including, but not limited to,  
               the commercial use of space, space vehicle launches, space  
               launch infrastructure, manufacturing, applied research,  
               technology development, economic diversification, and  
               business development. Authorizes GO-Biz to contract with  
               other state or private agencies, nonprofit corporations,  
               universities, firms, or individuals for the performance of  
               technical or specialized work, or for services related to  
               space enterprise development programs.

             19.             Authorizes GO-Biz to select a California  
               nonprofit corporation to assist in the administration of  
               space enterprise economic development activities through  
               programs, projects, grants, partnerships, networks, and  
               collaboration. Requires the nonprofit to be selected  
               through a solicitation process that includes criteria for  
               selection of the corporation, which includes, but is not  
               limited to, demonstrated experience in space enterprise and  
               the ability to perform space enterprise development  
               activities. Establishes requirements for a contract between  
               GO-Biz and the nonprofit which include quarterly reports of  
               the nonprofit's activities and finances, conflict of  
               interest provisions developed by GO-Biz and the ability for  
               GO-Biz to cancel the contract if the nonprofit does not  
               comply with requirements. Authorizes the nonprofit to  
               perform one or more of the following activities, as  
               determined contractually between GO-Biz and the nonprofit:

                  a.        Serve as the Authority.

                  b.        Pursue grants from the federal government or  
                    from private businesses, foundations, or individuals,  
                    for California space enterprise activities, including,  
                    but not limited to, studies, services, infrastructure  
                    improvements and modernization, and defense transition  
                    programs, to the extent permitted by law.

                  c.        Identify science and technology trends that  
                    are significant to space enterprise and the state and  


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                    act as a clearinghouse for space enterprise issues and  

                  d.        Develop and implement a state strategy for  
                    applying and commercializing technology to create  
                    jobs, respond to industry changes, and foster  
                    innovation and competitiveness in space enterprise.

                  e.        Provide information to the Director relevant  
                    to changes in federal, state, and local statutes and  
                    regulations that will enhance the development of space  
                    enterprise in California.

                  f.        Provide information to GO-Biz regarding the  
                    development of laws, regulations, decisions, or  
                    determinations affecting the economic and employment  
                    impacts of space enterprise in California.

                  g.        Provide recommendations to the Director for  
                    appropriate state funding mechanisms and amounts to  
                    promote development of space enterprise in California,  
                    including education and workforce development.

                  h.        Provide recommendations to the director in the  
                    form of strategic planning documents.

                  i.        Review applications for, and promote, the  
                    California Space Enterprise Competitive Grant Program.

             20.             Requires the Authority to designate  
               spaceports for the operation of launch sites or reentry  
               sites and specifies that any city, county, city and county,  
               special district, joint powers authority, or private  
               entity, may apply to the Authority for designation as a  
               spaceport. Sets forth application requirements. Designates  
               an entity that has a federal launch site operator's license  
               from the United States Secretary of Transportation under  
               the authority of the Commercial Space Launch Act (49 U.S.C.  
               Sec. 7101 et seq.) as a spaceport as long as they maintain  
               their federal designation and provide proof of their  
               extension to the Authority upon request. Clarifies that  
               these provisions do not apply to any launch site operator  
               who is federally licensed on or before January 1, 2005.


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             21.             Establishes the California Space Enterprise  
               Competitive Grant Program (Space Grant Program) within  
               GO-Biz to provide funding, upon appropriation by the  
               Legislature, for the development of space enterprise in  
               California. Authorizes entities conducting activities  
               intended to improve the competitiveness of space enterprise  
               in California, including public, private, educational,  
               commercial, nonprofit, or for-profit entities to apply for  
               grants. Clarifies that space enterprise activities include,  
               but are not limited to, the commercial use of space, space  
               vehicle launches, space launch infrastructure,  
               manufacturing, applied research, technology development,  
               economic diversification, and business development. 

             22.             Requires GO-Biz or the nonprofit acting as  
               the Authority to issue solicitations that include minimum  
               eligibility and requirements for grants and that address  
               jobs created and retained by the implementation of the  
               project, cost sharing by other project participants, a  
               condition that grant funds will not be used to supplant  
               other project funds, a demonstration that a majority of the  
               project will be undertaken in California, an agreement  
               among all project participants as to intellectual property  
               rights relative to the project, the potential impact on the  
               state's economy, the cost-effectiveness of the project, the  
               importance of state funding for the viability of the  
               project, a demonstration of technical feasibility and an  
               assessment of programmatic risk. Requires an impartial  
               review panel to evaluate grant proposals, comprised of  
               technical and scientific experts and government  
               representatives from throughout the state who are  
               knowledgeable about activities related to space enterprise.  
               Requires applications to be ranked and include  
               recommendations as to the amount of state funding for each  
               grant application and. States that the granting of funds to  
               private entities serves a public purpose by assisting an  
               industry vital to the health and welfare of the State of  

             23.             Requires GO-Biz to adopt necessary  
               regulations to implement the Space Program and Space Grant  


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           Base Realignment and Closure

           California has a strategic location, unique landscape and  
          valuable resources that help further U.S. military readiness for  
          actions around the globe. As a result, the DoD has made many  
          economic and technological investments in the state, including  
          large investments in land and military installations. The  
          state's unique resources and the military's investments have  
          fostered a strong partnership, and the ensuing collaboration is  
          vital for economic, resource management, and military readiness  
          reasons. State and local economies are influenced by the  
          military's presence. The burden of maintaining this partnership  
          often falls on the shoulders of cities and counties. In addition  
          to juggling the competing demands of expanding development,  
          promoting economic development and upholding environmental  
          quality standards, local governments must also consider the  
          needs of local military installations in their land use  
          planning. Traditionally, military installations were  
          strategically located in underdeveloped areas so as to avoid  
          land use conflicts. As the population of the state continues to  
          grow and the land use needs of communities continue to expand  
          outward, the need for stronger relationships and communication  
          between local governments and the military developed. Without  
          adequate communication and coordinated land use efforts,  
          military missions, quality of life and public safety are  
          increasingly jeopardized. Growth encroaching on a military  
          installation so as to hinder its mission can contribute to the  
          installation's closure.

          The federal government worked its way through four initial  
          iterations of the BRAC process between late 1988 and 1993.  
          Nationally, that process led to the closing of 350 large and  
          small military bases and 55 major realignments. Reportedly, this  
          saved federal taxpayers more than $16 billion through 2001 and  
          six billion dollars more each subsequent year.  

          Prior to 1988, California had, by far, the largest military  
          presence of any state, and was home to 335,979 (14.7%) of the  
          Department of Defense's (DoD) total 2,275,264 personnel and 91  
          (18.3%) of the 495 major military bases then scattered around  
          the nation.  Not surprisingly, the BRAC cuts fell heavily on  


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          Through the first four rounds (1988, 1991, 1993, 1995), the  
          state suffered the loss of 93,546 uniformed and civilian DoD  
          jobs, which represented 53.8% of the net cuts nationally.  
          California lost nearly 28 percent of its military personnel,  
          while the rest of the nation saw a reduction of just 3.6  

          In terms of major base closures, California lost 24  
          installations; Texas, seven; Pennsylvania, six; Illinois and New  
          York, five each; and Florida, Indiana, Maryland and Virginia,  
          four each.

          Prior to the mid 1990's, California's response to BRAC was  
          primarily focused on assisting local communities in the reuse of  
          shuttered military bases. In 1994, then-Governor Wilson issued  
          an Executive Order (W-87-94) which directed the Governor's  
          Office of Planning and Research to coordinate the state's effort  
          to assist local communities in developing strategies to protect  
          California bases from further closings, as a means of focusing  
          on the importance military bases have on the state's economy. 

          Subsequent legislation (AB 639, Alby, 1998 and SB 1099, Knight,  
          1999) codified an Office of Military Base Retention and Reuse  
          (OMBRR), placing it within the Technology, Trade and Commerce  
          Agency (TTCA) and outlining the responsibilities of the office,  
          including the creation of a Defense Retention Grant Program. The  
          grant program aided local communities in preparing for future  
          BRAC rounds. SB 926 (Knight and Ashburn, 2004) then renamed  
          OMBRR to the Office of Military and Aerospace Support (OMAS),  
          signifying the close relationship between military and aerospace  
          activities. OMAS exited through the 2005 BRAC round and  
          subsequently sunsetted in January of 2007.

          Unlike previous rounds, the fifth BRAC round (2005) focused more  
          on realignment than closure. Along with saving money, a top  
          priority was military force readiness, consolidating assets onto  
          centralized installations from which they can be deployed  
          rapidly and flexibly in support of an evolving global situation,  
          and joint service missions. Implementation of the 2005 BRAC  
          recommendations was completed in 2011.

          When a military installation is closed or its tenant units  


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          merely downsized, the communities in the area are adversely  
          affected, particularly in the short-term. Military and civilian  
          personnel face the loss or relocation of jobs. The uniformed  
          personnel expect to be transferred regularly, but civilian  
          workers on base usually are long-term local residents. 

          Local retailers who support the bases directly or indirectly  
          suffer serious revenue decreases and may even be forced to  
          close. Area governments lose revenues needed to maintain  
          services and infrastructure. In addition, the negotiation and  
          execution of land transfer, environmental cleanup, and  
          redevelopment of the properties can be a challenging, alien  
          process to communities.

          The enabling BRAC statute typically provides a variety of  
          mechanisms for disposing of property at closed or realigned  
          military installations. In the past, some federal real property  
          has been made available by public benefit conveyances for  
          airport, education, and homeless assistance. Some have been  
          converted to military reserve component bases. Others have been  
          transferred to native American tribes. For some properties,  
          economic development conveyances have been awarded to local  
          redevelopment authorities. Some have been put up for public  

          The 2005 BRAC Commission recommended that Congress authorize  
          another BRAC round in 2015, and then every 8 years thereafter.  
          In 2012 then-Defense Secretary Leon Panetta called for two BRAC  
          rounds for 2013 and 2015, but Congress rejected Panetta's  
          requests and also declined to fund a Pentagon request in 2014 to  
          fund another BRAC round.

           Aerospace in California  

          According to a recent report by the Los Angeles Economic  
          Development Corporation (LAEDC), the aerospace industry is  
          comprised of companies that manufacture aircraft (civil and  
          military), missiles, satellites and other space vehicles and the  
          companies that manufacture and distribute parts and components.   
          Buyers of these products include private industry, the military  
          and government space administrations.  The report notes that  
          today, aerospace is a highly concentrated industry, dominated by  
          a small number of large firms that are supported by a large  
          number of smaller contractors. It is also characterized as a  


          SB 506 (Fuller)                                         Page 17  
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          capital intensive and high-value added industry. Profitability  
          depends a great deal on technical expertise, innovation and the  
          ability to accurately price long-term contracts for programs  
          that may take years to design, develop and build.  According to  
          the report, demand for aerospace products is driven by both  
          civil and military requirements. 

          The California Spaceport Authority (Authority) to provide was  
          originally created to recognize the support and unique services  
          required for the development of commercial launch,  
          manufacturing, and academic and research operations related to  
          space flight.  A nonprofit corporation was designated as the  
          Authority with a mission of developing the commercial space  
          industry in California and assisting with defense conversion  
          efforts.  AB 1475 (Bordonaro, Chapter 938, Statutes of 1997)  
          then designated a new nonprofit corporation as the Authority and  
          also created two grant programs to foster space flight-related  
          infrastructure and associated activities -The Space Flight  
          Competitive Grant Program and the Highway to Space Competitive  
          Grant Program ultimately administered by two separate nonprofit  
          entities, both responsible for the promotion of commercial space  
          flight activities in the state.  In 2003, all space flight  
          related promotions and programs were consolidated under one  
          entity and grant program with the passage of AB 1532 (Nakano,  
          Chapter 627, Statutes of 2003) which tasked the Authority with  
          responsibility for attraction and promotion of space flight  
          industries in California and the administration of the space  
          enterprise development program.  Following the 2008 economic  
          downturn, state and private funding for the Authority became  
          limited or reallocated.  In 2010, the nonprofit corporation  
          selected to administer the space enterprise development program  
          shuttered and no action was taken to select another nonprofit to  
          administer the program.  Language in the Government Code related  
          to the Space Enterprise Development Program was repealed in  

          California's robust aerospace industry suffered a significant  
          downsizing and restructuring with the decline in military  
          spending following the end of the Cold War and as a result of  
          numerous BRAC rounds.  In the early 1990s, there were efforts to  
          retain many of California's aerospace companies and jobs through  
          the development of commercial space activities on California's  
          Central Coast at Vandenberg Air Force Base.  These efforts  
          generated legislation (AB 279, 1993) to designate California's  


          SB 506 (Fuller)                                         Page 18  
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          first Spaceport Authority. This designation then allowed this  
          Authority to lease federal property deemed excess capacity under  
          the Federal Commercial Space Launch Act.  The excess property  
          was known as Space Launch Complex (SLC 6) [Formerly West Coast  
          launch site for the Space Shuttle].  

          According to a brief prepared by the California Research Bureau,  
          aerospace is one of the nations standout industries. Its  
          workforce is highly skilled and well paid~ its exports grow our  
          economy~ and it is a continuing source of innovation.  Aerospace  
          encompasses a diverse range of productive activities, including  
          the manufacturing of both civilian and military aircraft, space  
          vehicles, guided missiles and associated parts. In 2011,  
          California's aerospace industry produced over $31 billion worth  
          of goods.  Nationally, the aerospace industry produced more than  
          $183 billion in goods in 2011. California represented 17 percent  
          of this total. This was a slight increase over recent years.  
          Overall, aerospace represented more than 72 percent of all  
          transportation equipment manufacturing in California in 2011.   
          Across all manufacturing sectors, aerospace contributed more  
          than 6.3 percent of the $495 billion in manufactured goods  
          produced in California in 2011. (Source: California Research  
          Bureau, "CRB Briefly Stated: Aerospace Manufacturing in  
          California's Economy," April 2012)
           1.According to the Author (paraphrased)  :

             Despite the tremendous economic impact and jobs associated  
             with defense and aerospace in California, there is no  
             statewide entity designated in law responsible for helping  
             retain military installations and grow aerospace activities.  
             This bill recognizes the unique synergy between DoD  
             activities in the state and aerospace/space flight  
             industries, by designating GO-Biz as the lead state entity  
             for fostering these two economic activities.

             Nothing in current law ensures there is a continuity of  
             actions or focus from one administration to the next with  
             respect to military installation issues and future base  
             realignment and closures. While GO-Biz has the iHUB program  
             with centers of innovation throughout the state that are  
             typically focused on regional economic clusters (including  


          SB 506 (Fuller)                                         Page 19  
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             the Innovation Hub for Defense, Energy and Aerospace (iDEA  
             Hub)), this system does not provide for a statewide focus on  
             military installations as well as aerospace and spaceflight  
             activities. The iDEA Hub region encompasses California's  
             Kern, Ventura, Orange, Los Angeles, and San Diego counties  
             but leaves out other significant aerospace/defense regions  
             like the Central Coast and Silicon Valley.

             This bill provides continuity on issues related to military  
             installations by designating GO-Biz as the statewide lead on  
             fostering the state's military, aerospace and spaceflight  
             sectors and provides flexibility for the administration to  
             organize and operate programs by allowing GO-Biz to contract  
             with other state or private agencies, nonprofit corporations,  
             universities, firms, or individuals to fulfill any of its  

             California has benefited significantly from the spending on  
             the war on terror starting in the early 2000's and that with  
             a new round of base closures always on the horizon,  
             California cannot wait to implement measures aimed at keeping  
             military bases open and operational. Bigger and more  
             immediate threats to military installations other than BRAC  
             include federal budget reductions, non-BRAC force  
             realignments and reductions in aircraft inventory. During  
             past BRAC rounds, cities and counties within California were  
             pitted against each other, fighting to keep their local base  
             from closing and when a base was closed, there was confusion  
             and debate over which local entity was responsible for the  
             conversion and cleanup of the base. In some communities,  
             multiple local jurisdictions claimed management and  
             development rights to the closed base.

             A process was established to end these disputes that involved  
             bringing the communities together to select single local base  
             reuse authority. The law was then expanded to select a single  
             local retention authority responsible for fending off future  
             BRAC rounds and to promote the retention of the selected  
             military base. This law was in effect during the 2005 BRAC  
             round, but was subsequently sunsetted in January 2007. This  
             bill would reestablish a process for one local retention  
             authority to be recognized for each military installation in  
             the state.


          SB 506 (Fuller)                                         Page 20  
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           2.Related Legislation

           Current Year:

              1.   SB 121 (Fuller, 2015  ) requires that school construction  
               projects on military installations that are eligible for  
               specified federal grants are given priority for funding  
               under the State School Facility program. (Pending Senate  
               Committee on Education)

             2.   AB 442 (Irwin, 2015  ) codifies the Governor's Military  
               Council, under the direction of the California Military  
               Department, and provides for appointment to the council by  
               the Governor. (Pending Assembly Floor)

              3.   AB 1080 (Obernolte, 2015  ) authorizes the Department of  
               Finance to find that an agreement between a former  
               redevelopment agency and a joint powers authority that was  
               created to exercise the powers provided by the Military  
               Base Reuse Authority Act is an enforceable obligation.  
                       (Pending Assembly Committee on Local Government)

              4.   AJR 11 (Burke and Atkins, 2015  ) memorializes the  
               President and the Congress of the United States to  
               recognize the unique military value of California's defense  
               installations and the disproportionate sacrifices  
               California has endured in previous BRAC rounds. (Pending  
               Senate Committee on Rules)

          Prior Years:

              1.   AB 1997 (Gorell, 2013  ) provided that tax exemptions for  
               persons engaged in aircraft manufacturing, for use  
               primarily in manufacturing, processing, refining,  
               fabricating, or recycling of property, or research and  
               development also applies to local sales and use taxes and  
               those specified state taxes with respect to qualified  
               tangible personal property purchased by a qualified person  
               that is engaged in aircraft manufacturing of unmanned  
               aerial vehicles. (Referred to but not heard in Assembly  
               Committee on Revenue and Taxation)

              2.   AB 250 (Holden, Chapter 530, Statutes of 2013  ) codified  
               the iHub program at GO-Biz and expanded the program.


          SB 506 (Fuller)                                         Page 21  
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              3.   AB 737 (Fox, 2013  ) would have required GO-Biz to prepare  
               and submit a proposal for an unmanned aircraft test site to  
               the FAA on or before May 6, 2013. (Referred to but not  
               heard in Senate Committee on Business, Professions and  
               Economic Development)

              4.   SB 245 (Rubio, 2011  ) would have re-established the  
               Office of Military Support within the Governor's Office of  
               Planning and Research (OPR) for the purpose of serving as a  
               clearinghouse for state activities related to the military,  
               including base closures.( Died on Suspense, Assembly  
               Committee on Appropriations)

             5.   AB 29 (John A. Pérez, Chapter 475, Statutes of 2011  )  
               established GO-Biz within the Governor's Office for the  
               purpose of serving as the lead entity for economic strategy  
               and marketing of California on issues relating to business  
               development, private sector investment and economic growth.

              6.   AB 2287 (Bass, 2010  ) would have established the Office  
               of Economic Development, which includes the California  
               Business Investment Services Program, within the  
               then-Governor's Economic Development Office.  
               (Gut-and-amended into a different topic while in its  
               initial Assembly policy committee)

              7.   AB 2734 (John A. Perez, 2010  ) created the Office of  
               Economic Development which included the California Business  
               Investment Services Program within the Governor's Office.  
               Required the Office to serve the Governor as the lead  
               entity for economic strategy and marketing of California  
               and make recommendations to the Governor and Legislature  
               regarding polices, programs, and actions to advance  
               statewide economic goals. (Vetoed.)

              8.   SB 1259 (DeSaulnier, 2010  ) would have created the  
               Economic Development and Job Creation Agency and require  
               the new agency to perform duties relating to economic  
               development and job creation. It requires the secretary to  
               develop a reorganization plan and propose a structure for  
               the agency. (Died on Suspense, Senate Committee on  


          SB 506 (Fuller)                                         Page 22  
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              9.   AB 2711 (Portantino, 2008  )  Would have required the  
               Secretary of Business, Transportation, and Housing Agency  
               (BT & H) to develop a comprehensive state technology and  
               innovation plan. Included a provision that extended the  
               sunset date for the Office of Military and Aerospace  
               Support (OMAS) from January 1, 2009 to January 1, 2012.  
               (Died on Suspense, Assembly Committee on Appropriations)

              10.             SB 1698 (Ashburn, Chapter 681, Statutes of  
               2006  ) extended the authority for 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.

              11.             AB 2565 (Parra, Chapter 763, Statutes of  
               2004  ) requires that the strategic plan originally prepared  
               by the California Defense Retention and Conversion Council  
               as it existed in 1998 be updated.

             12.             AB 1202 (Laird, Chapter 330, Statues of 2005)  
               replaced obsolete references to the Defense Conversion  
               Council with OMAS and revised the definition of military  
               bases, required the Director of OPR to select a mediator,  
               in consultation with the federal Office of Economic  
               Adjustment, to reach agreement among different  
               jurisdictions on a local reuse entity in the event that the  
               multiple local governments cannot agree on a single reuse  
               entity for each base.

              13.             SB 926 (Knight and Ashburn, Chapter 907,  
               Statutes of 2004  ) consolidated the defense retention and  
               conversion efforts in the state. 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.

              14.             AB 1532 (Nakano, Chapter 627, Statutes of  
               2003  ) transferred the Technology Planning Program,  
               California Space Enterprise Competitive Grant Program, and  


          SB 506 (Fuller)                                         Page 23  
          of ?
               the Challenge Grant Program in the TTCA to the BTH and  
               referred to these programs as the Space Enterprise  
               Development Program.

              15.             SB 296 (Soto, 2001  ) would have enacted the  
               Department of Defense Operational Effectiveness  
               Preparedness Act to help prevent any further base closures  
               in the state. (Referred but not heard in Senate Committee  
               on Governmental Organization)

              16.             SB 1468 (Knight, Chapter 971, Statutes of  
               2002  ) 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.

              17.             SB 1099 (Knight, Chapter 425, Statutes of  
               1999  ), the California Defense Retention and Conversion Act,  
               reconstituted the defunct Defense Conversion Council as the  
               California Defense and Retention and Conversion Council as  
               well as required the establishment of a Defense Retention  
               Grant Program.

              18.             AB 639 (Alby Chapter 952, Statutes of 1998  )  
               enacted the Defense Conversion, Reuse and Retention Omnibus  
               Act which was designed to assist communities in both  
               closure and retention efforts.

              19.             AB 1475 (Bordonaro, Chapter 938, Statutes of  
               1997  ) established the California Space and Technology  
               Alliance as the primary California Space Authority to  
               oversee the operations of the California Space Flight  
               Competitive Grant Program and the Highway to Space Program.

              20.             SB 268 (Roberti, Chapter 441, Statutes of  
               1993  ) created the Defense Conversion Matching Grant  
               Program, administered by the Office of Strategic Technology  
               within the Trade and Commerce Agency, and overseen by the  
               Defense Conversion Council. Also appropriated $5.5 million  
               from the Petroleum Violation Escrow Account to fund defense  
               conversion efforts.

              21.             SB 458 (Hart, Chapter 445, Statutes of 1993  )  


          SB 506 (Fuller)                                         Page 24  
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               enacted the California Defense Conversion Act of 1993 to  
               enable the state to assume a leadership role in converting  
               to a peacetime economy. Also created a 15-member Defense  
               Conversion Council in the Trade and Commerce Agency with  
               prescribed powers and duties, including the establishment  
               of criteria for designation of regional technology  

          Sponsor:  Author

          Support:  None on file (4/24/2015)

          Oppose:   None on file (4/24/2015)

                                      -- END --