BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
SB 506 (Fuller) - Economic development: military and aerospace
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|Version: April 14, 2015 |Policy Vote: B., P. & E.D. 9 - |
| | 0, V.A. 5 - 0 |
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|Urgency: No |Mandate: No |
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|Hearing Date: May 11, 2015 |Consultant: Robert Ingenito |
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This bill meets the criteria for referral to the Suspense File.
Bill
Summary: SB 506 would (1) establish 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 installations, (2) create the Military and Aerospace
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
activities, and (3) establish 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.
Fiscal
Impact:
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GO-Biz indicates that it would incur annual General Fund costs
of at about $2 million to implement the provisions of the
bill.
The Governor's Office of Planning and Research (OPR) would
incur minor administrative costs.
Background: The federal government conducted four rounds of Base
Realignment and Closure (BRAC) closures 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 in excess of $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 15 percent of the Department
of Defense's (DoD's) total 275,264 personnel and 18 percent of
the major military bases around the country. Correspondingly,
the base closures over those four rounds hit the State
disproportionately hard.
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 OPR 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
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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.
Proposed Law:
This bill would, among other things, do the following:
The Military and Aerospace Support Act
Establish the Military and Aerospace Program (MA
Program) in GO-Biz in an effort to be proactive in
retaining and expanding military facilities, the aerospace
industry, and the jobs and intellectual capital associated
with them in the State.
State 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 agencies.
Authorize GO-Biz to establish a Military Advisory
Council (Council) to provide input, information, technical
advice, or other comments to the Program on military
related matters, as specified. Provide that participation
by Council members is voluntary and there is no
reimbursement for per diem or expenses. Provide that the
Council may include, but is not limited to, representatives
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from any legislative office, state agency, local
government, industry, and civic or research organizations
that may have an interest in defense related activities.
Require the MA Program to do all of the following:
o Develop and recommend to the Governor and the
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.
o 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.
o Help develop and coordinate state retention
advocacy efforts on the federal level.
o Conduct an evaluation of existing state
retention and conversion programs, as specified, and
provide the Legislature with recommendations on the
continuation of existing programs.
o 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
to minimize California's loss of bases and jobs in
future rounds of base closures. State that the new
plan shall include, but not be limited to, identifying
major installations in California, determining how
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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.
o 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.
o 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.
Authorize the MA Program, providing that funds and
resources are available, to also:
o 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
streamlining.
o Provide technical assistance to communities
with potential or existing base closure activities.
o Provide a central clearinghouse for all
defense retention and conversion funding, regulations,
and application procedures for federal or state
grants.
o 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
efforts.
o Identify available state and federal resources
to assist businesses, workers, communities, and
educational institutions that may have a stake in
retention and conversion activities.
o 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.
o 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
databases.
Authorize 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, which is
established in the Special Deposit Fund in the State
Treasury. Authorize 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.
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Require 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. State that in order to discourage
multiple grant applications for individual defense
installations in a region, the criteria for grants shall be
drafted to encourage a single application for grant funds
to develop a single regional defense retention strategy.
Require 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. State 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
funding.
Require GO-Biz to adopt necessary regulations to
implement the MA Program and MS Grant Program and shall
adopt these regulations as emergency regulations.
Space Enterprise Development Act
Require GO-Biz to implement a space enterprise
development program (Space Program) to foster activities
that increase the competitiveness of space enterprise in
California, as specified. Authorize 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.
Authorize 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. Require the nonprofit to be selected
through a solicitation process that includes specified
criteria. Establish requirements for a contract between
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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. Authorize the nonprofit to
perform specified activities, as determined contractually
between GO-Biz and the nonprofit.
Require 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. Set forth
application requirements. Designate 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.
Establish 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.
Require 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
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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. 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 California.
Require GO-Biz to adopt necessary regulations to
implement the Space Program and Space Grant Program.
Provisions Related to Local Retention Entities
Require a local retention authority (RA) to be
recognized for each active military installation in the
State. Require 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 the Office
of Planning and Research (OPR). Authorize a joint powers
authority to be designated or created if multiple affected
local governments are identified as an affected local
government.
Require the State to recognize an RA for each active
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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.
Provide 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.
Require 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.
State 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.
Related
Legislation:
SB 121 (Fuller) would require that school construction
projects on military installations that are eligible for
specified federal grants be given priority for funding
under the State School Facility program. The bill is
currently in the Senate Committee on Education.
Staff
Comments: GO-Biz's annual General Fund budget is about $10
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million. The estimated position and equipment costs to
administer this bill would increase the size of the department
by roughly 20 percent.
The 2005 Commission recommended that Congress authorize another
BRAC round in 2015, and then every 8 years ongoing. In May 2012,
the House Armed Services Committee rejected a proposal for a
2015 round of base closures. In March of 2015, an acting
assistant Secretary of Defense testified before a House
subcommittee, indicating that the Pentagon has begun the process
of requesting a new round of base closures.
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