BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
SB 1215 (Allen) - California Aerospace Commission
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|Version: February 18, 2016 |Policy Vote: B., P. & E.D. 9 - |
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|Urgency: No |Mandate: No |
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|Hearing Date: April 18, 2016 |Consultant: Robert Ingenito |
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This bill meets the criteria for referral to the Suspense File.
Bill
Summary: SB 1215 would establish the California Aerospace
Commission to foster the development of aerospace-related
activities in the State.
Fiscal
Impact: The bill does not give guidance on how often the
Commission would meet, nor how it would be staffed. Using the
Milton Marks "Little Hoover" Commission on California State
Organization and Economy (Little Hoover Commission) as a proxy,
annual costs to operate and staff the California Aerospace
Commission could total about $1 million annually (General Fund,
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see Staff Comments).
Background: The aircraft industry grew more rapidly over the first half of
the twentieth century than any other segment of the California
economy. In 1910, William Randolph Hearst offered $50,000 to
the first pilot who could fly from California to the East Coast
in thirty days or less; however, no one claimed the prize. That
same year saw the nation's first public aviation meet, which
occurred on Dominguez Ranch near Los Angeles. This event drew
over 200,000 people, and the meet established initial aviation
speed and endurance records. After World War I, Southern
California's airplane designers and manufacturers began to
construct a variety of aircraft. By 1935, the output of
California's aircraft industry totaled $20 million annually
($340 million in 2013 dollars).
The industry steadily grew through World War II and during the
Cold War, encompassing a wide range of activities, including
military and civilian aircraft, reconnaissance and
communications satellites, strategic missiles, and space
exploration. The region's economy became linked to the ebbs and
flows of defense spending. By the early 1960s, roughly 40
percent of the $6.1 billion U.S. Department of Defense prime
contracts for development, test and research work went to
California. That proportion continued into the 1980s, and the
industry employed roughly 500,000. 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
2009 dollars) and then began a downward trend. The federal
government conducted four rounds of Base Realignment and Closure
(BRAC) closures between late 1988 and 1993. Nationally, that
process led to (1) the closing of 350 large and small military
bases, and (2) 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
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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, Governor Wilson issued an
Executive Order (W-87-94) which directed the 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.
The collapse of the Soviet Union and the end the Cold War led to
more than 50 major defense companies consolidating into only
six. Employment Development Department (EDD) employment data
indicate that the Aerospace Production and Manufacturing sector
declined from 214,200 in 1990 to 71,900 in 2013, an average
annual decline of 8.7 percent; Los Angeles County's aerospace
employment comprises roughly 60 percent of the statewide total,
and shrank proportionately over the same time period. Most of
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the declines occurred before 2004. However, further job decline
is possible to the extent that reduced defense spending results
from federal budget cuts.
Proposed Law:
This bill would do the following:
Create the California Aerospace Commission (Commission)
to foster the development of activities in California
related to aerospace, including, but not limited to,
aviation, commercial and governmental space travel,
unmanned aerial vehicles, aerospace education and job
training, infrastructure and research launches,
manufacturing, academic research, applied research,
economic diversification, business development, tourism,
and education.
Establish that the Commission shall do the following:
o Receive grants from state or local government
sources or from private businesses or individuals, for
California aerospace-related activities, as specified.
o Be an advocate in support of California
aerospace-related activities, including, but not
limited to, the businesses, facilities, programs,
developments, alterations, modifications, educational
activities, and other programs impacting those
activities.
o Identify and recommend changes in federal,
state, and local statutes and regulations that will
enhance the development of California
aerospace-related activities.
o Report on the economic and employment impacts
of California aerospace-related activities to the
Governor and the Legislature and other state agencies
and commissions that adopt regulations or make
decisions or determinations that affect those
activities.
o Recommend to the Governor and the Legislature
appropriate state funding mechanisms and amounts to
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promote development of California aerospace-related
activities.
o Provide recommendations to the Governor and
the Legislature in the form of strategic planning
documents, with regard to the development of
California aerospace-related activities.
o Act as a clearinghouse for aerospace-related
issues and information.
o Foster and promote activities related to
aerospace in all parts of California.
Related
Legislation: SB 506 (Fuller) of 2015 would have established a
military and aerospace program within the Governor's Office of
Business and Economic Development (GO-Biz), tasked with
activities related to state and local defense retention,
conversion and base reuse activities and urged local governments
impacted by military installations to cooperate in efforts to
retain these installations and recognizes a local retention
authority for each active military installation in the state.
The bill was held on the suspense file of this Committee.
Staff
Comments: The bill as currently drafted gives little guidance
concerning (1) the number of Commission members, (2) how they
would be staffed, and (3) whether members would receive per diem
or have their travel expenses reimbursed. As noted earlier, the
Little Hoover Commission could serve as a proxy; it has a $1
million annual budget and is comprised of seven staff: an
executive director, three managers, and three analysts. The
Little Hoover Commission's personnel costs (salaries and
benefits) total about $700,000 annually; operating expenses and
equipment comprise the other $300,000 per year.