BILL NUMBER: AB 1558	AMENDED
	BILL TEXT

	AMENDED IN SENATE  SEPTEMBER 4, 2009

INTRODUCED BY    Committee on Jobs, Economic Development, and
the Economy   (   V. Manuel Perez
(Chair), Logue (Vice Chair), Beall, Bill Berryhill, Block, Huber, and
Salas   )   Assembly Member  
V. Manuel Perez 

                        MARCH 11, 2009

    An act to add the heading of Chapter 1 (commencing with
Section 99500) to Title 20 of, to add Chapter 2 (commencing with
Section 99600), Chapter 3 (commencing with Section 99700), and
Chapter 4 (commencing with Section 99800) to Title 20 of, to repeal
Chapter 4 (commencing with Section 6300) of Division 7 of Title 1 of,
and to repeal Chapter 8 (commencing with Section 8700) and Chapter
8.1 (commencing with Section 8710) of Division 1 of Title 2 of, the
Government Code, relating to international relations.  
An act to amend Sections 14010, 14020, 14021, 14022, 14023, 14024,
14025, 14026, 14030, 14030.2, 14034, 14074, and 14076 of, to add
Section 14000.7 to, and to repeal Section 14075 of, the Corporations
Code, to amend Sections 4532, 7073, 7079, 7081, 7082, 7085, 7086,
  7114.5, 7117, 7280.6, 7280.8, 7281.4, 8684.2, 13994,
13994.1, 13994.5, 13994.6, 13994.8, 13994.9, 13994.11, 13994.12,
13996, 13996.1, 13996.2, 13996.45, 13996.5, 13996.55, 13996.6,
13996.65, 13996.7, 13996.75, 13999.1, 13999.2, 13999.4, 15570, 15901,
63021, 63021.5, 65054, 65054.1, 65054.3, 65054.4, and 99502 of, to
add Section 65054.5 to, and to repeal Chapter 1.5 (commencing with
Section 12095) of Part 2 of Division 3 of Title 2 of, the Government
Code, and to amend Sections 9101, 9102, 9600.5, 10200, 10201,
10201.5, 10202, 10205, 10213, 10214, 10510, 10529, 10530, and 10533
of the Unemployment Insurance Code, relating to state government.




	LEGISLATIVE COUNSEL'S DIGEST


   AB 1558, as amended,  Committee on Jobs, Economic
Development, and the Economy   V. Manuel Perez  .
 International relations.   State government.
 
   (1) Existing law, the California Small Business Financial
Development Corporation Law, creates the Office of the California
Small Business Board and imposes numerous duties on the Secretary of
Business, Transportation and Housing.  
   This bill would eliminate the duties of the secretary and transfer
modified duties under these provisions to a director and executive
director of a renamed Economic and Employment Development Department,
which would succeed to some of the duties of the existing Employment
Development Department under this bill.  
   (2) Existing law, the Target Area Contract Preference Act, defines
the term "distressed" for purposes of its provisions as, among other
things, being an urbanized area identified by the Office of Planning
and Research.  
   This bill would eliminate the Office of Planning and Research from
identifying the area, and instead require the Department of Finance
to make the identification.  
   (3) Existing law, the Enterprise Zone Act, imposes numerous duties
on the Employment Development Department and other state entities to
promote economic development within specified geographic areas.
 
   This bill would eliminate the duties of the Employment Development
Department under these provisions and instead transfer them to the
renamed entity, the Economic and Employment Development Department.
This bill would also modify other duties under these provisions.
 
   (4) Existing law, the Local Agency Military Base Recovery Area
Act, imposes numerous duties on the California Environmental
Protection Agency (Cal EPA) and the Office of Permit Assistance.
 
   This bill would eliminate certain duties of Cal EPA and instead
transfer them to state licensing and regulatory bodies, generally.
This bill would state that the Office of Permit Assistance is within
the renamed Economic and Employment Development Department. 

   (5) Existing law, the Burton-Stull Vietnam Veterans Employment
Act, imposes duties on the Employment Development Department. 

   This bill would eliminate the duties of the Employment Development
Department and transfer them to the renamed Economic and Employment
Development Department.  
   (6) Existing law, the California Disaster Assistance Act,
authorizes the Business, Transportation and Housing Agency to adopt
specified regulations to implement a loan program.  
   This bill would eliminate these duties of the Business,
Transportation and Housing Agency and transfer them to the Office of
Small Business or the renamed Economic and Employment Development
Department, as specified.  
   (7) Existing law creates the California Commission for Industrial
Innovation within the office of the Governor to encourage industrial
innovation and develop policies to maintain the state's leadership in
the national economy.  
   This bill repeals these provisions, thereby eliminating the
commission.  
   (8) Existing law establishes the Manufacturing Technology Program
and imposes duties on the Business, Transportation and Housing Agency
under the program.  
   This bill would eliminate the duties of the agency under these
provisions and transfer them to the Office of Technology and
Innovation, which is created within the renamed Economic and
Employment Development Department. This bill would also impose
specified duties under this program on the new department and a
director and executive director of the department.  
   (9) Existing law imposes specified duties on the Business,
Transportation and Housing Agency and the secretary of the agency
with regard to international trade and investment.  
   This bill would eliminate the duties of the Business,
Transportation and Housing Agency and its secretary and transfer them
yo the renamed Economic and Employment Development Department. This
bill would also rename the Economic Strategy Panel as the California
Economic and Workforce Development Panel.  
   (10) Existing law establishes the Regional Technology Alliance
Program within the Business, Transportation and Housing Agency, and
imposes specified duties on the agency and its secretary.  
   This bill would eliminate the duties of the Business,
Transportation and Housing Agency and its secretary and transfer them
to the Office of Technology and Innovation or to the renamed
Economic and Employment Development Department, as specified. 

   (11) Existing law creates the Space Enterprise Development Act and
imposes duties on the Business, Transportation and Housing Agency
and its secretary.  
   This bill would eliminate the duties of the Business,
Transportation and Housing Agency and its secretary and transfer them
to the Office of Technology and Innovation or on the renamed
Economic and Employment Development Department, as specified. 

   (12) Existing law imposes specified duties on the Secretary of
Business, Transportation and Housing regarding a biennial California
Economic Development Strategic Plan.  
   This bill would rename the plan the California Economic and
Employment Development Strategic Plan. The bill would also eliminate
the duties of the Business, Transportation and Housing Agency and its
secretary and transfer modified duties to a director of the renamed
Economic and Employment Development Department. The bill would
specifically modify the requirement of a biennial strategic plan to
one every 5 years.  
   (13) Existing law establishes the Infrastructure and Economic and
Development Bank within the Business, Transportation and Housing
Agency.  
   This bill would eliminate the duties of the Business,
Transportation and Housing Agency and its secretary and transfer them
to the renamed Economic and Employment Development Department. 

   (14) Existing law creates the Office of Small Business Advocate
within the Office of Planning and Research, and imposes various
duties. Existing law requires the Governor to appoint the director of
the Office of Small Business Advocate.  
   This bill renames the office as the Office of Small Business,
eliminates the duties of the Office of Planning and Research, and
transfers modified duties to the renamed Economic and Employment
Development Department. This bill also eliminates the Governor's
requirement to appoint a director, and instead requires the Small
Business Board to appoint the director. This bill establishes the
Small Business Board, consisting of specified members, to perform
certain duties, adopt bylaws, and hold public hearings.  
   (15) Existing law requires the Office of Planning and Research to
maintain and update a list of state agreements with foreign
governments.  
   This bill would eliminate this duty of the Office of Planning and
Research and transfer it to the office of the Governor.  
   (16) Existing law imposes various duties on the State Job Training
Coordinating Council, Employment Development Department, the
Business, Transportation and Housing Agency, and its secretary. 

   This bill would eliminate certain specified duties of the State
Job Training Coordinating Council, Employment Development Department,
the Business, Transportation and Housing Agency, and its secretary
and transfer them to the renamed Economic and Employment Development
Department. This bill would also rename the federal Job Training
Partnership Act as the Workforce Investment Act.  
   Existing law authorizes any public corporation, as defined, and
specified private corporations to apply for the privilege of
establishing, operating, and maintaining a foreign trade zone in
accordance with federal law, and provides that any public or private
corporation whose application is granted pursuant to federal law is
authorized to establish, operate, and maintain a foreign trade zone,
subject to specified conditions.  
   Existing law establishes the Office of California-Mexico Affairs
to serve as a clearinghouse for information and assistance to other
state agencies involved with Mexico, and to develop favorable
relations with Mexico.  
   Existing law establishes the California-Mexico Border Relations
Council to consist of specified state officials. The duties of the
council include, among other things, coordinating activities of state
agencies that are related to cross-border programs, initiatives,
projects, and partnerships that exist within state government. The
council is required to annually submit a report on its activities to
the Legislature.  
   This bill would recodify and reorganize the above provisions.

   Vote: majority. Appropriation: no. Fiscal committee:  no
  yes  . State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

   SECTION 1.    Section 14000.7 is added to the 
 Corporations Code   , to read:  
   14000.7.  There exists within the Office of Small Business of the
Department of Economic and Employment Development, the California
Small Business Loan and Guarantee Program. 
   SEC. 2.   Section 14010 of the  
Corporations Code   is amended to read: 
   14010.  Unless the context otherwise requires, the definitions in
this section govern the construction of this part.
   (a) "Corporation" or "the corporation" means any nonprofit
California small business financial development corporation created
pursuant to this part.
   (b) "Financial institution" means banking organizations including
national banks and trust companies authorized to conduct business in
California and state-chartered commercial banks, trust companies, and
savings and loan associations.
   (c) "Financial company" means banking organizations including
national banks and trust companies, savings and loan associations,
state insurance companies, mutual insurance companies, and other
banking, lending, retirement, and insurance organizations.
   (d) "Expansion Fund" means the California Small Business Expansion
Fund.
   (e) Unless otherwise defined by the director by regulation, "small
business loan" means a loan to a business defined as an eligible
small business as set forth in Section 121.3-10 of Part 121 of
Chapter 1 of Title 13 of the Code of Federal Regulations, including
those businesses organized for agricultural purposes that create or
retain employment as a result of the loan. From time to time, the
director shall provide guidelines as to the preferred ratio of jobs
created or retained to total funds borrowed for guidance to the
corporations.
   (f) "Employment incentive loan" means a loan to a qualified
business, as defined in subdivision (h) of Section 7082 of the
Government Code, or to a business located within an enterprise zone,
as defined in subdivision (b) of Section 7072 of the Government Code.

   (g) "Loan committee" means a committee appointed by the board of
directors of a corporation to determine the course of action on a
loan application pursuant to Section 14060.  
   (h) "Board of directors" means the board of directors of the
corporation.  
   (i) "Board" means the California Small Business Board. 

   (j) "Agency" means the Business, Transportation and Housing
Agency.  
   (k) "Director" 
    (g)     "Executive Director"  means
the person designated to this title by the  secretary
  director who administers the Small Business Loan
Guarantee Program  . 
   () "Secretary" means the Secretary of Business, Transportation and
Housing Agency.  
   (m) 
    (h)    "Trust fund" means the money from the
expansion fund that is held in trust by a financial institution or a
financial company. A trust fund is not a deposit of state funds and
is not subject to the requirements of Section 16506 of the Government
Code. 
   (n) 
    (i)    "Trust fund account" means an account
within the trust fund that is allocated to a particular small
business financial development corporation for the purpose of paying
loan defaults and claims on bond guarantees for a specific small
business financial development corporation. 
   (o) 
    (j)    "Trustee" is the lending institution or
financial company selected by the office to hold and invest the trust
fund. The agreement between the agency and the trustee shall not be
construed to be a deposit of state funds. 
   (k) "Director" means the Director of the Economic and Employment
Development Department.  
   (l) "Small Business Advocate" means the person selected by the
California Small Business Board to direct the Office of Small
Business.  
   (m) "Program" means the Small Business Loan and Guarantee Program.
 
   (n) "Office" means the Office of Small Business within the
Economic and Employment Development Department.  
   (o) "Department" means the Economic and Employment Development
Department. 
   SEC. 3.    Section 14020 of the  
Corporations Code   is amended to read: 
   14020.  There is in the  agency   office
 the California Small Business Board.
   SEC. 4.    Section 14021 of the  
Corporations Code   is amended to read: 
   14021.  The board consists of the following membership:
   (a) The  Secretary of Business, Transportation and Housing
  Director of the Economic and Employment Development
Department,  or his or her designee.
   (b) Six members appointed by the Governor, one of whom will serve
as chair of the board, who are actively involved in the California
small business community.
   (c) Two persons actively involved in the business or agricultural
communities, one appointed by the Speaker of the Assembly and one
appointed by the Senate Committee on Rules.
   (d) Two Members of the Legislature or their designees, one
appointed by the Speaker of the Assembly and one appointed by the
Senate Committee on Rules, shall serve on the board insofar as it
does not conflict with the duties of the legislators. 
   (e) The Director of the Office of Small Business, who shall be
selected by the members of the board. 
   SEC. 5.    Section 14022 of the  
Corporations Code   is amended to read: 
   14022.  The board shall do each of the following:
   (a) Advise  the director on matters regarding this part.
  the Governor and the director regarding issues and
programs affecting California's small business community, including,
but not limited to, business innovation and expansion, export
financing, state procurement, management and technical assistance,
venture capital, and financial assistance. 
   (b) Select a vice chairperson of the board and adopt bylaws as are
required to govern the conduct and operation of the board. 
   (c) Approve new corporations recommended by the director, based on
an examination of each of the following:  
   (1) Review of the articles of incorporation and bylaws of the
corporation to determine whether they contain the provisions required
by this chapter and conform with the regulations adopted pursuant to
this part.  
   (2) Determination as to whether the legislative intent expressed
in Section 14002 shall be served by the proposed corporation.
 
   (3) Determination as to whether the responsibility, character, and
general fitness of the individuals who will manage the corporation
are such as to command the confidence of the state and to warrant the
belief that the business of the proposed corporation will be
honestly and efficiently conducted in accordance with the intent and
purpose of this chapter and that they include representatives of the
financial and business community, as well as the economically
disadvantaged.  
   (d) 
    (c)    Hold public hearings in order to carry
out the objectives of the agency in regards to its responsibilities
as legislative advocate and ombudsman for the state's small business
community. 
   (e) Advise the Governor, the director, and the Small Business
Advocate regarding issues and programs affecting California's small
business community, including, but not limited to, business
innovation and expansion, export financing, state procurement,
management and technical assistance, venture capital, and financial
assistance. 
   SEC. 6.    Section 14023 of the  
Corporations Code   is amended to read: 
   14023.  The public members of the board may, at the discretion of
the  agency   department  , be reimbursed
per diem and travel expenses pursuant to state law.
   SEC. 7.    Section 14024 of the 
Corporations Code   is amended to read: 
   14024.  The  agency   office  shall
adopt regulations concerning the implementation of this chapter and
direct lending as emergency regulations in accordance with Chapter
3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title
2 of the Government Code. The adoption of these regulations is an
emergency and necessary for the immediate preservation of the public
peace, health and safety, or general welfare within the meaning of
subdivision (b) of Section 11346.1 of the Government Code.
Notwithstanding subdivision (e) of Section 11346.1 of the Government
Code, the regulations shall not remain in effect for more than 180
days unless the  agency   office  complies
with all provisions of Chapter 3.5 (commencing with Section 11340) of
Part 1 of Division 3 of Title 2 of the Government Code, as required
by subdivision (e) of Section 11346.1 of the Government Code. This
section also applies to any direct loan program administered by the
 agency   office  .
   SEC. 8.    Section 14025 of the  
Corporations Code   is amended to read: 
   14025.  The  executive  director shall do all of the
following:
   (a) Administer this part.
   (b) In accordance with program resources, stimulate the formation
of corporations and the use of branch offices for the purposes of
making this program accessible to all areas of the state.
   (c) Expeditiously approve or disapprove the articles of
incorporation and any subsequent amendments to the articles of
incorporation of a corporation.
   (d) Require each corporation to submit an annual written plan of
operation.
   (e) Review reports from the Department of Financial Institutions
and inform corporations as to what corrective action is required.
   (f) Examine, or cause to be examined, at any reasonable time, all
books, records, and documents of every kind, and the physical
properties of a corporation. The inspection shall include the right
to make copies, extracts, and search records.
   SEC. 9.    Section 14026 of the  
Corporations Code   is amended to read: 
   14026.  The  executive  director, following notification
to the  secretary   director  , may do all
of the following:
   (a) Contract for services entered into pursuant to this chapter.
   (b) Hold public hearings.
   (c) Act as liaison between corporations formed under this part,
other state and federal agencies, lenders, and the Legislature.
   (d) Process and tabulate on a monthly basis all corporate reports.

   (e) Attend board meetings  of the California Small Business
Board  .
   (f) Attend and participate at corporation meetings. The 
executive  director, or his or her designee, shall be an ex
officio, nonvoting representative on the board of directors and loan
committees of each corporation. The  executive  director
shall meet with the board of directors of each corporation at least
once each fiscal year, commencing July 1, 1999.
   (g) Assist corporations in applying for federal grant
applications, and in obtaining program support from the business
community.
   SEC. 10.    Section 14030 of the   
 Corporations Code   , as added by Section 2 of Chapter
601 of the Statutes of 2007, is amended to read: 
   14030.  (a) There is hereby created in the State Treasury the
California Small Business Expansion Fund. All or a portion of the
funds in the expansion fund may be paid out, with the approval of the
Department of Finance, to a lending institution or financial company
that will act as trustee of the funds. The expansion fund and the
trust fund shall be used to pay for defaulted loan guarantees issued
pursuant to Article 9 (commencing with Section 14070), administrative
costs of corporations, and those costs necessary to protect a real
property interest in a defaulted loan or guarantee. The amount of
guarantee liability outstanding at any one time shall not exceed four
times the amount of funds on deposit in the expansion fund plus any
receivables due from funds loaned from the expansion fund to another
fund in state government as directed by the Department of Finance
pursuant to a statute enacted by the Legislature, including each of
the trust fund accounts within the trust fund, unless the 
executive  director has permitted a higher leverage ratio for an
individual corporation pursuant to subdivision (b) of Section 14037.

   (b) This section shall become operative on January 1, 2013.
   SEC. 11.    Section 14030.2 of the  
Corporations Code   is amended to read: 
   14030.2.  (a) The  executive  director may establish
accounts within the expansion fund for loan guarantees and surety
bond guarantees, including loan loss reserves. Each account is a
legally separate account, and shall not be used to satisfy loan or
surety bond guarantees or other obligations of another corporation.
The  executive  director shall recommend whether the
expansion fund and trust fund accounts are to be leveraged, and if
so, by how much. Upon the request of the corporation, the 
executive  director's decision may be repealed or modified by
 a board resolution   the director of the
department  .
   (b) Annually, not later than January 1 of each year commencing
January 1, 1996, the  executive  director shall prepare a
report regarding the loss experience for the expansion fund for loan
guarantees and surety bond guarantees for the preceding fiscal year.
At a minimum, the report shall also include data regarding numbers of
surety bond and loan guarantees awarded through the expansion fund,
including ethnicity and gender data of participating contractors and
other entities, and experience of surety insurer participants in the
bond guarantee program. The  executive  director shall
submit that report  to the Secretary of Business,
Transportation and Housing for transmission  to the Governor
and the Legislature.
   SEC. 12.    Section 14034 of the  
Corporations Code   is amended to read: 
   14034.  (a) The  executive  director at his or her
discretion, with the approval of the Director of Finance, may request
the trustee to invest those funds in the trust fund in any of the
securities described in Section 16430 of the Government Code. Returns
from these investments shall be deposited in the expansion fund and
shall be used to support the programs of this part.
   (b) Any investments made in securities described in Section 16430
of the Government Code shall be governed by the statement of
investment policy prepared by the Treasurer pursuant to subdivision
(a) of Section 16481.2 of the Government Code.
   SEC. 13.    Section 14074 of the  
Corporations Code   is amended to read: 
   14074.  The  agency   Office of Small
Business  shall enter into an agreement with the California
Energy  Extension Service of the Office of Planning and
Research   Department  to assist small business
owners in reducing their energy costs through low interest loans and
by providing assistance and information.
   SEC. 14.    Section 14075 of the  
Corporations Code   is repealed.  
   14075.  (a) A corporation may, in an area affected by a state of
emergency within the state and declared a disaster by the President
of the United States, or by the Administrator of the United States
Small Business Administration, or by the United States Secretary of
Agriculture or declared to be in a state of emergency by the Governor
of California, provide loan guarantees from funds allocated in
Section 14037.5 to small businesses, small farms, nurseries, and
agriculture-related enterprises that have suffered actual physical
damage or significant economic injury as a result of the disaster.
   (b) The agency may adopt regulations to implement the loan
guarantee program authorized by this section. The agency may adopt
these regulations as emergency regulations in accordance with Chapter
3.5 (commencing with Section 11340) of Part 1 of Division 3 of the
Government Code, and for purposes of that chapter, including Section
11349.6 of the Government Code, the adoption of the regulations shall
be considered by the Office of Administrative Law to be necessary
for the immediate preservation of the public peace, health and
safety, and general welfare. Notwithstanding subdivision (e) of
Section 11346.1 of the Government Code, the regulations shall be
repealed within 180 days after their effective date unless the agency
complies with Chapter 3.5 (commencing with Section 11340) of Part 1
of Division 3 of the Government Code, as provided in subdivision (e)
of Section 11346.1 of the Government Code.
   (c) Allocations pursuant to subdivision (a) shall be deemed to be
for extraordinary emergency or disaster response operations costs
incurred by the agency. 
   SEC. 15.    Section 14076 of the  
Corporations Code   ,   as amended by Section 7 of
Chapter 601 of the Statutes of 2007, is amended to read: 
   14076.  (a) It is the intent of the Legislature that the
corporations make maximal use of their statutory authority to
guarantee loans and surety bonds, including the authority to secure
loans with a minimum loan loss reserve of only 20 percent, so that
the financing needs of small business may be met as fully as possible
within the limits of corporations' loan loss reserves. The 
agency   Office of Small Business  shall report
annually to the Legislature on the financial status of the
corporations and their portfolio of loans and surety bonds
guaranteed.
   (b) Any corporation that serves an area declared to be in a state
of emergency by the Governor or a disaster area by the President of
the United States, the Administrator of the United States Small
Business Administration, or the United States Secretary of
Agriculture shall increase the portfolio of loan guarantees where the
dollar amount of the loan is less than one hundred thousand dollars
($100,000), so that at least 15 percent of the dollar value of loans
guaranteed by the corporation is for those loans. The corporation
shall comply with this requirement within one year of the date the
emergency or disaster is declared. Upon application of a corporation,
the  executive  director may waive or modify the rule for
the corporation if the corporation demonstrates that it made a good
faith effort to comply and failed to locate lending institutions in
the region that the corporation serves that are willing to make
guaranteed loans in that amount.
   (c) This section shall remain in effect only until January 1,
2013, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2013, deletes or extends
that date.
   SEC. 16.    Section 14076 of the   
 Corporations Code   , as added by Section 8 of Chapter
601 of the Statutes of 2007, is amended to read: 
   14076.  (a) It is the intent of the Legislature that the
corporations make maximal use of their statutory authority to
guarantee loans and surety bonds, including the authority to secure
loans with a minimum loan loss reserve of only 25 percent, unless the
 agency   executive director  authorizes a
higher leverage ratio for an individual corporation pursuant to
subdivision (b) of Section 14037, so that the financing needs of
small business may be met as fully as possible within the limits of
corporations' loan loss reserves. The  agency  
Office of Small Business  shall report annually to the
Legislature on the financial status of the corporations and their
portfolio of loans and surety bonds guaranteed.
   (b) Any corporation that serves an area declared to be in a state
of emergency by the Governor or a disaster area by the President of
the United States, the Administrator of the United States Small
Business Administration, or the United States Secretary of
Agriculture shall increase the portfolio of loan guarantees where the
dollar amount of the loan is less than one hundred thousand dollars
($100,000), so that at least 15 percent of the dollar value of loans
guaranteed by the corporation is for those loans. The corporation
shall comply with this requirement within one year of the date the
emergency or disaster is declared. Upon application of a corporation,
the director may waive or modify the rule for the corporation if the
corporation demonstrates that it made a good faith effort to comply
and failed to locate lending institutions in the region that the
corporation serves that are willing to make guaranteed loans in that
amount.
   (c) This section shall become operative on January 1, 2013.
   SEC. 17.   Section 4532 of the   Government
Code   is amended to read: 
   4532.  As used in this chapter:
   (a) "Block group" means the smallest area for which the United
States Department of Commerce, Bureau of the Census provides data on
personal income.
   (b) "Urbanized area" means a central city or cities and
surrounding closely settled territory, as defined by the United
States Department of Commerce, Bureau of the Census in the Federal
Register, Vol. 39, Number 85, for Wednesday, May 1, 1974, at pages
15202-15203 and as periodically updated.
   (c) "Cluster of block groups" means one or more contiguous block
groups.
   (d) "Distressed" means an urbanized area, within the State of
California and as identified by the  Office of Planning and
Research   Department of Finance  , which contains
at least 3,000 people in a cluster of block groups, each of which
meet at least five of the following criteria according to the most
recent available census information compared to the last statewide
census:
   (1) The percentage of the block group's population over age 25
with less than a high school education was within the upper quartile
of all block groups.
   (2) The unemployment rate of the block group was within the upper
quartile of all block groups.
   (3) The per capita income of the block group was within the lower
quartile of all block groups.
   (4) The percentage of the block group's households which were
female-headed households in poverty with children present was within
the upper quartile of all block groups.
   (5) The percentage of the block group's population over 65 who
were in poverty was within the upper quartile of all block groups.
   (6) The percentage of the block group's households with more than
1.01 persons per room was within the upper quartile of all block
groups.
   (7) The percentage of the block group's population younger than 18
who were in poverty was within the upper quartile of all block
groups.
   (8) The percentage of the block group's population who were
nonwhite or  hispanic   Hispanic  was
within the upper quartile of all block groups.
   (e) "Approved special census" means a special census approved by
the Population Research Unit of the Department of Finance.
   (f) "Person with a high risk of unemployment" means a person who:
   (1) As a member of one of the eligible groups defined in Section
321 of Public Law 95-600, qualifies an employer who hires him or her
for the Targeted Jobs Tax Credit. These groups are: economically
disadvantaged youth, economically disadvantaged Vietnam-era veterans,
economically disadvantaged ex-convicts, vocational rehabilitation
referrals, youth participating in a qualified cooperative education
program, recipients of supplemental security income benefits under
Title XVI of the Social Security Act, and general assistance
recipients.
   (2) Would have qualified an employer hiring him or her for the
Work Incentive/Welfare Tax Credit authorized by Section 322 of Public
Law 95-600. These persons include applicants and recipients of aid
to families with dependent children who would have registered for the
Work Incentive Program, and aid to families with dependent children
recipients who have been receiving welfare for at least 90 days.
   (g) "Poverty" means the poverty level, as defined by the United
States Department of Commerce, Bureau of the Census in the Federal
Register, Volume 43, Number 87, for Thursday, May 4, 1978, at pages
19260-19269, and as periodically updated.
   (h) "California based company" means either of the following:
   (1) A business or corporation whose principal office is located in
California, and the owners, or officers if the entity is a
corporation, are domiciled in California.
   (2) A business or corporation that has a major office or
manufacturing facility located in California and that has been
licensed by the state on a continuous basis to conduct business
within the state and has continuously employed California residents
for work within the state during the three years prior to submitting
a bid or proposal for a state contract.
   (i) "Worksite" means either of the following:
   (1) A business located within a distressed area.
   (2) A business located in directly adjoining census tract blocks
that when attached to the distressed area forms a contiguous
boundary. A company that intends to perform the work at a worksite
described in this paragraph shall submit a map with the bid or
proposal identifying where the worksite is located.
   SEC. 18.    Section 7073 of the   Government
Code   is amended to read: 
   7073.  (a) Except as provided in subdivision (e), any city,
county, or city and county with an eligible area within its
jurisdiction may complete a preliminary application for designation
as an enterprise zone. The applying entity shall establish definitive
boundaries for the proposed enterprise zone and the targeted
employment area.
   (b) (1) In designating enterprise zones, the department shall
select from the applications submitted those proposed enterprise
zones that, upon a comparison of all of the applications submitted,
indicate that they propose the most appropriate, innovative, and
comprehensive regulatory, tax, program, and other incentives in
attracting private sector investment in the zone proposed.
   (2) For purposes of this subdivision, regulatory incentives
include, but are not limited to, all of the following:
   (A) The suspension or relaxation of locally originated or modified
building codes, zoning laws, general development plans, or rent
controls.
   (B) The elimination or reduction of fees for applications,
permits, and local government services.
   (C) The establishment of a streamlined permit process.
   (3) For purposes of this subdivision, tax incentives include, but
are not limited to, the elimination or reduction of construction
taxes or business license taxes.
                                           (4) For the purposes of
this subdivision, program and other incentives may include, but are
not limited to, all of the following:
   (A) The provision or expansion of infrastructure.
   (B) The targeting of federal block grant moneys, including small
cities, education, and health and welfare block grants.
   (C) The targeting of economic development grants and loan moneys,
including grant and loan moneys provided by the federal Urban
Development Action Grant program and the federal Economic Development
Administration.
   (D) The targeting of state and federal job disadvantaged and
vocational education grant moneys, including moneys provided by the
federal Job Training Partnership Act of 1982 (Public Law 97-300).
   (E) The targeting of federal or state transportation grant moneys.

   (F) The targeting of federal or state low-income housing and
rental assistance moneys.
   (G) The use of tax allocation bonds, special assessment bonds,
bonds under the Mello-Roos Community Facilities Act of 1982 (Chapter
2.5 (commencing with Section 53311) of Part 1 of Division 2 of Title
5), industrial development bonds, revenue bonds, private activity
bonds, housing bonds, bonds issued pursuant to the Marks-Roos Local
Bond Pooling Act of 1985 (Article 4 (commencing with Section 6584) of
Chapter 5), certificates of participation, hospital bonds,
redevelopment bonds, school bonds, and all special provisions
provided for under federal tax law for enterprise community or
empowerment zone bonds.
   (5) In the process of designating new enterprise zones, the
department shall take into consideration the location of existing
zones and make every effort to locate new zones in a manner that will
not adversely affect any existing zones.
   (6) In designating new enterprise zones, the department shall
include in its criteria the fact that jurisdictions have been
declared disaster areas by the President of the United States within
the last seven years.
   (7) When reviewing and ranking new enterprise zone applications,
the department shall give special consideration or bonus points, or
both, to applications from jurisdictions that meet at least two of
the following criteria:
   (A) The percentage of households within the census tracts of the
proposed enterprise zone area, the income of which is below the
poverty level, is at least 17.5 percent.
   (B) The average unemployment rate for the census tracts of the
proposed enterprise zone area was not less than five percentage
points above the statewide average for the most recent calendar year
as determined by the  Economic and  Employment Development
Department.
   (C) The applicant jurisdiction has, and can document that it has,
a unique distress factor affecting long-term economic development,
including, but not limited to, resource depletion, plant closure,
industry recession, natural disaster, or military base closure.
   (c) In evaluating applications for designation, the department
shall ensure that applications are not disqualified solely because of
technical deficiencies, and shall provide applicants with an
opportunity to correct the deficiencies. Applications shall be
disqualified if the deficiencies are not corrected within two weeks.
   (d) (1) Except as provided in paragraph (2), or upon dedesignation
pursuant to subdivision (c) of Section 7076.1 or Section 7076.2, a
designation made by the department shall be binding for a period of
15 years from the date of the original designation.
   (2) The designation period for any zone designated pursuant to
either Section 7073 or 7085 prior to 1990 may total 20 years, subject
to possible dedesignation pursuant to subdivision (c) of Section
7076.1 or Section 7076.2, if the following requirements are met:
   (A) The zone receives a superior or passing audit pursuant to
subdivision (c) of Section 7076.1.
   (B) The local jurisdictions comprising the zone submit an updated
economic development plan to the department justifying the need for
an additional five years by defining goals and objectives that still
need to be achieved and indicating what actions are to be taken to
achieve these goals and objectives.
   (e) (1) Notwithstanding any other provision of law, any area
designated as an enterprise zone pursuant to Chapter 12.8 (commencing
with Section 7070) as it read prior to January 1, 1997, or as a
targeted economic development area, neighborhood economic development
area, or program area pursuant to Chapter 12.9 (commencing with
Section 7080) as it read prior to January 1, 1997, or any program
area or part of a program area deemed designated as an enterprise
zone pursuant to Section 7085.5 as it read prior to January 1, 1997,
shall be deemed to be designated as an enterprise zone pursuant to
this chapter. The effective date of designation of the enterprise
zone shall be that of the original designation of the enterprise zone
pursuant to Chapter 12.8 (commencing with Section 7070) as it read
prior to January 1, 1997, or of the program area pursuant to Chapter
12.9 (commencing with Section 7080) as it read prior to January 1,
1997, and in no event may the total designation period exceed 15
years, except as provided in paragraph (2) of subdivision (d).
   (2) Notwithstanding any other provision of law, any enterprise
zone authorized, but not designated, pursuant to Chapter 12.8
(commencing with Section 7070) as it read prior to January 1, 1997,
shall be allowed to complete the application process started pursuant
to that chapter, and to receive final designation as an enterprise
zone pursuant to this chapter.
   (3) Notwithstanding any other provision of law, any expansion of a
designated enterprise zone or program area authorized pursuant to
Chapter 12.8 (commencing with Section 7070) as it read prior to
January 1, 1997, or Chapter 12.9 (commencing with Section 7080) as it
read prior to January 1, 1997, shall be deemed to be authorized as
an expansion for a designated enterprise zone pursuant to this
chapter.
   (4) No part of this chapter may be construed to require a new
application for designation by an enterprise zone designated pursuant
to Chapter 12.8 (commencing with Section 7070) as it read prior to
January 1, 1997, or a targeted economic development area,
neighborhood economic development area, or program area designated
pursuant to Chapter 12.9 (commencing with Section 7080) as it read
prior to January 1, 1997.
   (f) Notwithstanding any other provision of law, a city, county, or
city and county may designate a joint powers authority to administer
the enterprise zone.
   (g) This section shall only apply to enterprise zone applications
for which the department has issued a solicitation for new enterprise
zone designations prior to January 1, 2007.
   SEC. 19.   Section 7079 of the   Government
Code   is amended to read: 
   7079.  Notwithstanding any other provision of law, the Office of
Small Business  , within the Economic and Employment Development
Department,  shall establish regulations for loans and loan
guarantees administered by the office that give high priority to
businesses in a designated enterprise zone.
   SEC. 20.    Section 7081 of the   Government
Code   is amended to read: 
   7081.  Notwithstanding any other provision of state law, and to
the extent permitted by federal law, the  Economic and 
Employment Development Department and the State Department of
Education shall give high priority to the training of unemployed
individuals who reside in a targeted employment area or a designated
enterprise zone. The department may assist localities in designating
local business, labor, and education consortia to broker activities
between the employment community and educational and training
institutions. Any available discretionary funds may be used to assist
the creation of those consortia.
   SEC. 21.    Section 7082 of the   Government
Code   is amended to read: 
   7082.  Notwithstanding any other provision of law, the 
Office of Criminal Justice Planning   California
Emergency Management Agency  shall give high priority to
designated enterprise zones in the allocation of its program
resources.
   SEC. 22.    Section 7085 of the   Government
Code   is amended to read: 
   7085.  (a) Notwithstanding Section 7550.5, the department shall
submit a report to the Legislature every five years beginning January
1, 1998, that evaluates the effect of the program on employment,
investment, and incomes, and on state and local tax revenues in
designated enterprise zones. The report shall include a department
review of the progress and effectiveness of each enterprise zone,
including, but not limited to, any efforts made regarding training of
unemployed individuals pursuant to Section 7081. The  Economic
and  Employment Development Department shall, for the purposes
of the report, provide the department with existing data on
unemployed individuals receiving training. The Franchise Tax Board
shall make available to the department and the Legislature aggregate
information on the dollar value of enterprise zone tax credits that
are claimed each year by businesses.
   (b) An enterprise zone governing body shall provide information at
the request of the department as necessary for the department to
prepare the report required pursuant to subdivision (a).
   SEC. 23.    Section 7086 of the   Government
Code   is amended to read: 
   7086.  (a) The department shall design, develop, and make
available the applications and the criteria for selection of
enterprise zones pursuant to Section 7073 and shall adopt all
regulations necessary to carry out this chapter.
   (b) The department shall adopt regulations concerning the
designation procedures and application process as emergency
regulations in accordance with Chapter 3.5 (commencing with Section
11340) of Part 1 of Division 3 of Title 2. The adoption of the
regulations shall be deemed to be an emergency and necessary for the
immediate preservation of the public peace, health and safety, or
general welfare, notwithstanding subdivision (e) of Section 11346.1.
Notwithstanding subdivision (e) of Section 11346.1, the regulations
shall not remain in effect more than 120 days unless the department
complies with all provisions of Chapter 3.5 as required by
subdivision (e) of Section 11346.1.
   (c) The Department of General Services, with the cooperation of
the  Economic and  Employment Development Department,
 the Department of Industrial Relations, and the Office of
Planning and Research, and under the direction of the State and
Consumer Services Agency,  shall adopt appropriate rules,
regulations, and guidelines to implement Section 7084.
   (d) The department shall adopt regulations governing the
imposition and collection of fees pursuant to subdivision (c) of
Section 7076, and the issuance of certificates pursuant to
subdivision (j) of Section 17053.47 of, subdivision (c) of Section
17053.74 of, subdivision (c) of Section 23622.7 of, or subdivision
(i) of Section 23622.8 of, the Revenue and Taxation Code. The
regulations shall provide for a notice or invoice to fee payers as to
the amount and purpose of the fee. The adoption of the regulations
shall be deemed to be an emergency and necessary for the immediate
preservation of the public peace, health and safety, or general
welfare. Notwithstanding subdivision (e) of Section 11346.1, the
regulations shall remain in effect for no more that 360 days unless
the agency complies with all the provisions of Chapter 3.5
(commencing with Section 11340) of Part 1 of Division 3 of Title 2 as
required by subdivision (e) of Section 11346.1.
   SEC. 24.    Section 7114.5 of the  
Government Code   is amended to read: 
   7114.5.  (a) The department shall provide, as a high priority, to
a designated local agency military base recovery area  the
following  :
   (1) Technical assistance for state and federal grant applications
as requested by the governing body.
   (2) Technical assistance for small business loans through the
State of California and the federal government as requested by the
governing body.
   (b)  The California Environmental Protection Agency
  State licensing and regulatory bodies  shall
provide, as a high priority, to a designated local agency military
base recovery area technical permit assistance for those permits that
fall under the jurisdiction of the agency as requested by the
governing body.
   (c) The Office of Permit Assistance  , with the assistance of
the Economic and Employment Development Department,  shall
provide, as a high priority, to a designated local agency military
base recovery area technical assistance on permits as requested by
the governing body.
   SEC. 25.    Section 7117 of the   Government
Code   , as added by Section 3 of Chapter 1012 of the
Statutes of 1998, is amended to read: 
   7117.  Notwithstanding any other provision of law, the Office of
Small Business  , within the Economic and Employment Development
Department,  shall establish regulations for loans and loan
guarantees administered by the office that give high priority to
businesses in a local agency military base recovery area.
   SEC. 26.    Section 7280.6 of the  
Government Code   is amended to read: 
   7280.6.  The provisions of this chapter shall be administered by,
and payments shall be disbursed through, the Department of 
Economic and  Employment Development, in addition to any other
functions or duties which are imposed upon it by law.
   SEC. 27.    Section 7280.8 of the  
Government Code   is amended to read: 
   7280.8.  The Director of the Department of  Economic and 
Employment Development, or his designee, shall certify to employers
such veterans as certified trainees under this chapter as he or his
designee shall deem to be qualified for training in employment by
such employer. The director or his designee, when certifying trainees
to employers, shall make every effort to insure that at least 50
percent of the certified trainees reside in economically
disadvantaged areas, as such term is defined in Section 9111 of the
Unemployment Insurance Code.
   SEC. 28.    Section 7281.4 of the  
Government Code   is amended to read: 
   7281.4.  Such portion of the funds appropriated each year by the
Legislature for the purposes of this chapter as the Director of the
Department of  Economic and  Employment Development shall
determine may be used for advertising and mailing costs to inform
employers in the state of the provisions of this chapter and any
other programs for unemployed Vietnam veterans.
   SEC. 29.    Section 8684.2 of the  
Government Code   is amended to read: 
   8684.2.  (a) It is the intent of the Legislature:
   (1) To provide the Governor with appropriate emergency powers in
order to enable utilization of available emergency funding to provide
guarantees for interim loans to be made by lending institutions, in
connection with relief provided for those persons affected by
disasters or a state of emergency in affected areas during periods of
disaster relief assistance, for the purpose of supplying interim
financing to enable small businesses to continue operations pending
receipt of federal disaster assistance.
   (2) That the Governor should utilize this authority to prevent
business insolvencies and loss of employment in areas affected by
these disasters.
   (b) In addition to the allocations authorized by Section 8683 and
the loan guarantee provisions of Section 14030.1 of the Corporations
Code, the Governor may allocate funds made available for the purposes
of this chapter, in connection with relief provided, in affected
areas during the period of federal disaster relief, to the Small
Business Expansion Fund for use by the Office of Small Business,
pursuant to Chapter 1 (commencing with Section 14000) of Part 5 of
Division 3 of Title 1 of the Corporations Code, to provide guarantees
for low-interest interim loans to be made by lending institutions
for the purpose of providing interim financing to enable small
businesses that have suffered actual physical damage or significant
economic losses, as a result of the disaster or state of emergency
for which funding under this section is made available, to continue
or resume operations pending receipt of loans made or guaranteed by
the federal Small Business Administration. The maximum amount of any
loan guarantee funded under this paragraph shall not exceed two
hundred thousand dollars ($200,000). Each loan guarantee shall not
exceed 95 percent of the loan amount, except that a loan guarantee
may be for 100 percent of the loan amount if the applicant can
demonstrate that access to business records pertinent to the loan
application has been precluded by official action prohibiting
necessary reentry into the affected business premises or that those
business records pertinent to the loan application have been
destroyed. The term of the loan shall be determined by the lending
institution providing the loan or shall be made payable on the date
the proceeds of a loan made or guaranteed by the federal Small
Business Administration with respect to the same damage or loss are
made available to the borrower, whichever event first occurs.
   (c) Loan guarantees for which the initial 12-month term has
expired and for which an application for disaster assistance funding
from the federal Small Business Administration is still pending may
be extended until the Small Business Administration has reached a
final decision on the application. Applications for interim loans
shall be processed in an expeditious manner. Wherever possible,
lending institutions shall fund nonconstruction loans within 60
calendar days of application. Loan guarantees for loans that have
been denied funding by the federal Small Business Administration, may
be extended by the financial institution provided that the loan is
for no longer than a maximum of seven years, if the business
demonstrates the ability to repay the loan with an extended loan
term, and a new credit analysis is provided. All loans extended under
this provision shall be repaid in installments of principal and
interest, and be fully amortized over the term of the loan. Nothing
in this section shall preclude the lender from charging reasonable
administrative fees in connection with the loan.
   (d) Allocations pursuant to this section shall, for purposes of
all provisions of law, be deemed to be for extraordinary emergency or
disaster response operation costs, as provided in Section 8690.6,
incurred by state employees assigned to work on the financial
development corporation program.
   (e) The  Business, Transportation and Housing Agency
  Economic and Employment Development Department 
may adopt regulations to implement the loan guarantee program
authorized by this section. The agency may adopt these regulations as
emergency regulations in accordance with Chapter 3.5 (commencing
with Section 11340) of Part 1 of Division 3, and for purposes of that
chapter, including Section 11349.6, the adoption of the regulations
shall be considered by the Office of Administrative Law to be
necessary for the immediate preservation of the public peace, health
and safety, and general welfare. Notwithstanding subdivision (e) of
Section 11346.1, the regulations shall be repealed within 180 days
after their effective date unless the  agency  
department  complies with Chapter 3.5 (commencing with Section
11340) of Part 1 of Division 3, as provided in subdivision (e) of
Section 11346.1.
   (f) Within 60 days of the conclusion of the period for
guaranteeing loans under any small business disaster loan guarantee
program conducted for a disaster as authorized by Section 8684.2, or
Section 14075 of the Corporations Code, the  agency 
 Office of Small Business  shall provide a report to the
Legislature on loan guarantees approved and rejected by gender,
ethnic group, type of business and location, and each participating
loan institution.
   SEC. 30.    Chapter 1.5 (commencing with Section
12095) of Part 2 of Division 3 of Title 2 of the  
Government Code   is repealed. 
   SEC. 31.    Section 13994 of the  
Government Code   is amended to read: 
   13994.  Unless the context otherwise requires, the definitions in
this section govern the construction of this chapter. 
   (a) "Agency" means the Business, Transportation and Housing
Agency.  
   (b) 
    (a)  "California-based foundation" means an organization
defined in the Internal Revenue Code as a private foundation, which
is incorporated in, and primarily conducts its activities within, the
state and receives funding in whole or in substantial part from
California-based companies. 
   (c) 
    (b)  "Collaborative research" means technological or
scientific research that accelerates existing research toward the
commercialization of products, processes, and services, and is
conducted jointly or funded jointly by some or all of the following:
   (1) The private sector, including intraindustry groups,
California-based private foundations, industry associations, and
nonprofit cooperative associations.
   (2) The federal government.
   (3) The state.
   (4) Public or private universities, colleges, and laboratories.
   (d) "Consortia" means jointly funded or jointly operated nonprofit
independent research and development organizations. "Consortia
development" means the establishment of consortia to manage and fund
a variety of technology transfer projects within a specific
technology or industry priority. 
   (e)  
   (c) "Executive director" means the executive director of the
Office of Technology and Innovation. 
    (d)  "Industry association" is a nonprofit organization
with a substantial presence in California whose membership consists
in whole or in part of California-based companies, and whose funding
is derived in whole or in part from California-based companies.

   (f) 
    (e)  "Information technology" includes, but is not
limited to, all electronic technology systems and services, automated
information handling, system design and analysis, conversion of
data, computer programming, information storage and retrieval,
telecommunications that include voice, video, and data
communications, requisite system controls, simulation, electronic
commerce, and all related interactions between people and machines.

   (g) 
    (f)  "Nonprofit cooperative association" means an
association, organized and operating pursuant to either Chapter 1
(commencing with Section 54001) of Division 20 of the Food and
Agricultural Code or Part 2 (commencing with Section 12200) of
Division 3 of Title 1 of the Corporations Code. 
   (g) "Office" means the Office of Technology and Innovation. 
   (h) "Technology" includes, but is not limited to, the application
of science and engineering to research and development, especially
for industrial or commercial objectives, in sectors that include
telecommunications, information technologies, electronics,
biochemistry, medicine, agriculture, transportation, space, and
aerospace.
   (i) "Technology transfer" means the movement of the results of
basic or applied technological or scientific research to the design,
development, and production of new or improved products, services, or
processes.
   SEC. 32.    Section 13994.1 of the  
Government Code   is amended to read: 
   13994.1.  (a) (1) There is within the  agency 
 office  the Regional Technology Alliance Program. The
intent of the regional technology alliances is to decentralize the
delivery of services and resources, programs and activities for
technology development, commercialization, application, and
competitiveness at a regional level.
   (2) The  agency   executive director 
may designate new regional technology alliances upon application to
carry out activities described in this section.
   (3) The  agency   executive director 
may establish criteria for designation that includes, but need not be
limited to, criteria previously established by the Defense
Conversion Council pursuant to Article 3.7 (commencing with Section
15346) of Chapter 1, as it read on December 31, 1998.
   (b) Each alliance shall perform the following activities:
   (1) Raise and leverage funds from multiple public and private
sources to support technology development, commercialization, and
application and industry competitiveness particularly in response to
defense industry conversion and diversification.
   (2) Assist in the formation of new businesses.
   (3) Maintain an electronic network and access to databases that
encourages business ventures.
   (4) Coordinate with activities and efforts of industry, academia,
federal laboratories, and governments.
   (5) Recommend administrative actions or programs that could assist
California's defense-dependent industries to successfully convert to
commercial markets.
   (6) Provide information about state and federal defense conversion
programs, including, but not limited to, job training, economic
development, industrial modernization, dual-use technology, new
management techniques, and technology development and transfer.
   (7) Identify emerging industries that may include commercial space
applications, transportation, environment, high performance
computing and communications, biotechnology and advanced materials,
and processing and critical existing industries.
   (c) Each alliance may also perform, but need not be limited to,
the following activities:
   (1) Assist in identifying businesses that could benefit from
defense conversion programs and defense-dislocated workers who
require employment and training opportunities.
   (2) Assist and provide coordination in determining job
opportunities within and outside of the defense industry for which
displaced workers could be retrained and placed.
   (3) Serve as a forum for industrywide networking linking
producers, suppliers, and consumers.
   (4) Assist individual businesses and industry consortia in
applying for state and federal defense conversion program funds.
   (5) Provide information and assistance in upgrading individual
businesses and industrywide production and management processes.
   (6) Provide information on available state and federal resources
to aid businesses and workers affected by defense spending
reductions, base closures, plant closures, and layoffs, to foster
long-term economic vitality, industrial growth, and job
opportunities.
   (d) Each alliance is encouraged to develop activities that achieve
the following results:
                                                  (1) Creation and
retention of jobs.
   (2) Creation of new businesses.
   (3) Development of new commercial or dual-use products.
   (4) Establishment of industry partnerships and consortia.
   (5) Demonstration of productivity enhancement such as return on
investment, reduced cost, employee training, and upgrades.
   (6) Establishment of public and private partnerships.
   (7) Commitment of industry support, participation, and capital.
   (8) Leverage of state funds.
   (9) Loan repayment ratio.
   (10) Participation of small businesses and minority-, women-, and
disabled veteran-owned businesses.
   (11) Workforce training.
   (e) The  agency   executive director 
shall be authorized to enter into a contract for services with any
alliance to provide services to the office. These contracts shall be
sole source contracts, and exempt from the competitive bid process.
   (f) During the first two years following selection of an alliance,
the alliance shall monitor the performance of any application funded
pursuant to Section 13994.2, and each invoice for payment shall be
reviewed and approved by the alliance, but the contract for services
shall be directly between the agency and the entity receiving grant
funding. Commencing with the third year of designation, any alliance
with procedures and processes approved by the  agency
  executive director  shall be authorized to
directly contract with grant recipients. The  agency
  executive director  shall audit these grants on a
regular basis.
   SEC. 33.    Section 13994.5 of the  
Government Code   is amended to read: 
   13994.5.  (a) In awarding technology transfer grants, the 
agency   executive director  shall consider the
following:
   (1) The likelihood of commercialization of a product, service, or
process.
   (2) The potential impact on the state's economy.
   (3) The cost-effectiveness of the project.
   (4) The importance of state funding for the viability of the
project.
   (5) Cost sharing by other participants.
   (6) The involvement of small businesses and minority-, disabled
veteran-, and women-owned businesses.
   (7) Projects that will result in a prototype by the end of the
grant period.
   (8) Other criteria that the agency determines are consistent with
the purposes of the program.
   (b) The  agency   executive director 
shall target industries and technologies with a potential for
enhancing the California economy, and shall fund projects within
those industries and utilizing those technologies.
   SEC. 34.    Section 13994.6 of the  
Government Code   is amended to read: 
   13994.6.  Technology transfer projects may include reasonable
overhead costs incurred by a research institute and related to the
project that shall not exceed the allowable federal overhead costs
for research. All other projects may include any costs authorized by
the principal funding  agency   executive
director  , and not precluded by state requirements.
   SEC. 35.    Section 13994.8 of the  
Government Code   is amended to read: 
   13994.8.  (a) The  agency   executive
director  may obtain scientific and technological expertise as
needed to provide advice and input on the program, the establishment
of targeted technologies and industries, the review of grant
applications, and the review of project performance.
   (b) The  agency   executive director may
award funds over a multiyear period to a grantee without requiring
the grantee to reapply, so long as the funds in multiple years are
utilized for the same project originally funded.
   SEC. 36.    Section 13994.9 of the  
Government Code   is amended to read: 
   13994.9.  (a) Notwithstanding Sections 13994.2, 13994.3, 13994.4,
and 13994.5, and the regulations implementing this chapter, the
 secretary   executive director  may award
discretionary technology transfer grants totaling not more than 5
percent or one hundred thousand dollars ($100,000), whichever is
greater, of the funds appropriated each year for this program.
   (b) Notwithstanding Sections 13994.2, 13994.3, 13994.4, 13994.5,
and subdivision (a) of this section, the  secretary 
 executive director  may award up to 15 percent of the
funds appropriated for a given fiscal year for consortia development
projects that do not have private sector match but will have private
sector match within six months from the date of the award of funding.
For purposes of this subdivision, "private sector match" means a
cash or in-kind contribution available for expenditure or use to a
consortium development project. If, after six months, no private
sector match is available, funding under the program shall cease and
all moneys previously received shall be returned to the state.
   SEC. 37.    Section 13994.11 of the  
Government Code   is amended to read: 
   13994.11.  The  agency   office  shall
report on this program to the Governor and the Legislature.
   SEC. 38.    Section 13994.12 of the  
Government Code   is amended to read: 
   13994.12.  There is hereby established within the  agency
  office  the Technology Planning Program. The
program shall provide grants and technical assistance to California
nonprofit organizations and public entities working within specific
industries to identify conversion or expansion projects. Grants may
be awarded in the areas of strategic planning and strategic
alliances. The program shall award grants based upon a competitive
application process addressing the project's eligibility, a review of
the proposal's scientific and technological aspects, and ability to
fulfill goals of the program. Priority shall be given to those
projects with the identified support of industry representatives,
matching funding, projects likely to receive federal funds requiring
matching funds, and any other criteria determined by the 
agency   offic   e  . A project example is
a joint effort to develop and commercialize defense-related
technologies by federal laboratories, universities, and companies in
close geographical proximity.
   SEC. 39.    Section 13996 of the  
Government Code   is amended to read: 
   13996.  Unless the context otherwise requires, the definitions in
this section govern the construction of this chapter. 
   (a) "Agency" means the Business, Transportation and Housing
Agency.  
   (b) 
    (a)  "Consortia" means jointly funded or jointly
operated nonprofit independent research and development
organizations. "Consortia development" means the establishment of
consortia to manage and fund a variety of projects within a specific
technology or industry priority. 
   (c)  
   (b) "Department" means the Economic and Employment Development
Department.  
   (c) "Executive director" means the person designated by the
Director of the Economic and Employment Development Department to
lead the Office of Technology and Innovation. 
    (d)  "Industry association" means a nonprofit
organization with a substantial presence in California whose
membership consists in whole or in part of California-based
companies, and whose funding is derived in whole or in part from
California-based companies. 
   (d) 
    (e)  "Manufacturing technology" means the assessment and
implementation of strategies designed to enhance the competitiveness
and viability of specific manufacturing industries. 
   (e) "Secretary" means the Secretary of Business, Transportation
and Housing.  
   (f) "Office" means the Office of Technology and Innovation within
the Economic and Employment Development Department.  
   (f) 
    (g)  "Strategic technology" means the utilization of
technology as an economic development tool. 
   (g) 
    (h)  "Technology planning" means industry specific
alliances to identify planning strategies and strategic alliances.

   (h) 
    (i)  "Technology transfer" means the movement of the
results of applied technology or scientific research to the design
development and production of new or improved products, services, or
processes, including the utilization of results of a military or
defense-related technology to the development or production of
commercial applications.
   SEC. 40.    Section 13996.1 of the  
Government Code   is amended to read: 
   13996.1.  The  agency   department 
shall adopt regulations to implement the programs authorized in this
chapter. The agency shall adopt these regulations as emergency
regulations in accordance with Chapter 3.5 (commencing with Section
11340) of Part 1, and for purposes of that chapter, including Section
11349.6, the adoption of the regulations shall be considered by the
Office of Administrative Law to be necessary for the immediate
preservation of the public peace, health and safety, and general
welfare. Notwithstanding subdivision (e) of Section 11346.1, the
regulations shall be repealed within 180 days after their effective
date, unless the agency complies with Chapter 3.5 (commencing with
Section 11340) of Part 1 as provided in subdivision (e) of Section
11346.1.
   SEC. 41.    Section 1399   6.2 of the 
 Government Code   is amended to read: 
   13996.2.  There is hereby established within the  agency
the Manufacturing Technology Program.   department the
Office of Technology and Innovation. The office is responsible for
administering the Manufacturing Technology Program and the Regional
Technology Alliance Program.  The  program 
 Manufacturing Technology Program  shall provide matching
grants and technical assistance to California nonprofit organizations
and public agencies to perform one or more of the following
functions:
   (a) Establish and fund a California manufacturers excellence
program.
   (b) Develop and disseminate an inventory of resources available to
assist manufacturers.
   (c) Implement a strategy for addressing needs identified in the
statewide California Manufacturing Excellence Program Plan, given
available resources.
   (d) Projects resulting in consortia partnership or alliances for
manufacturing technology.
   SEC. 42.    Section 13996.45 of the  
Government Code   is amended to read: 
   13996.45.  (a) (1) Subject to paragraph (2), and subject to
Section 13996.75, the  Business, Transportation and Housing
Agency   Office of Trade and Investment within the
Economic and Employment Development Department  shall be the
primary state agency authorized to do all of the following:
   (A) Attract employment-producing foreign investment to the state.
   (B) Cooperate in international public infrastructure projects.
   (C) Provide support for California business in accessing
international markets, including, but not limited to, export
assistance.
   (D) Engage in other trade or foreign investment related activities
specifically assigned by the Governor.
   (2) Nothing in this chapter shall be construed to confer powers or
impose duties upon the agency in conflict with any powers conferred
or duties imposed upon the Department of Food and Agriculture with
respect to the promotion of California agriculture, fish, and forest
exports.
   (b) The international trade and investment activities of the
agency shall be monitored by the Legislature, and all public moneys
in its budget expended for those purposes, shall be subject to
approval by the Legislature.
   (c) The  Secretary of Business, Transportation and Housing
  Executive Director of the Office of Trade and
Investment at the   Economic and Employment Development
Department  shall develop an international trade and investment
policy, which shall be consistent with the  state  economic
development strategic plan prepared  by the California
Economic Strategy Panel  pursuant to Section 15570, and
shall provide guidance to strategies and plans from other agencies
and departments related to workforce and infrastructure development.
   (d) California's international trade and investment policy shall
be directed through its state strategy, which shall be based on
current and emerging market conditions and the needs of investors,
businesses, and workers to be competitive in global markets.
   SEC. 43.    Section 13996.5 of the  
Government Code   is amended to read: 
   13996.5.  (a) Not later than October 1, 2007, the 
Secretary of Business, Transportation and Housing  
Executive Director of the Office of Trade and Investment at the
Economic and Employment Development Department  shall complete a
study on the potential roles of the state in global markets.
   (b) The study shall include, but not be limited to, all of the
following:
   (1) A discussion of California's economy and its relationship to
global markets, including identification of current and emerging
trends, industries, services, and areas of comparative advantage.
   (2) An inventory and gap analysis of existing programs and
services provided by local, state, federal, and private entities,
which serve, or could serve, businesses in opening new foreign
markets for their products, attracting foreign investment to their
businesses, or generally assisting California businesses in global
markets.
   (3) An assessment and gap analysis of the current and future
physical and human infrastructure related to foreign trade and
investment markets, and the appropriate role for state government to
improve the infrastructure needs.
   (4) The results of a survey of businesses on their needs and
priorities related to foreign trade and investment. The study may
rely on current surveys prepared by trade organizations or academic
centers dedicated to economic development, or other surveys, as
appropriate.
   (5) An examination of how best to coordinate and leverage existing
local, state, and federal organizations, programs, and services
related to international trade and investment.
   (6) An assessment of unique opportunities and challenges in
developing businesses and attracting investment along the border and
in historically underserved urban and rural areas.
   (c) (1) The study shall make recommendations on policies,
programs, and funding needs for the next three years, seven years,
and over the long term.
   (2) Recommendations may include infrastructure improvements,
workforce training needs, incentives for business or investors, and
need for international trade and investment offices in relation to
the international trade and investment needs of the state.
   (3) To the extent international trade and investment offices are
found to be appropriate, the study may make general recommendations
on the administration, oversight, and mission or missions of the
offices.
   (4) The study shall recommend priorities for state activities and
funding related to international trade and investment. The priorities
shall be based on the assessment of current and emerging market
trends, the inventory and gap analysis of programs and services, the
assessment of current and future infrastructure and workforce needs,
and input by the business community.
   (5) The study shall recommend an organizational structure for the
state administration of international trade and investment policies,
programs, and services.
   (d) During the course of the study, the secretary shall consult
with other agencies, boards, and commissions that have statutory
responsibilities related to workforce development, infrastructure,
business, and international trade and investment including, but not
limited to,  the Economic Strategy Panel,   the
Economic and Employment Development Department,  the California
Commission on Industrial Innovation, the Office of the Small Business
Advocate, the California Transportation Commission, the California
Community Colleges, the University of California, the California
State University, the Workforce Investment Board, the Employment
Training Panel, and the California Energy Commission.
   (e) The results of the study shall be submitted to the Chief Clerk
of the Assembly and the Secretary of the Senate. A copy of the study
shall be provided to the Speaker of the Assembly, the President pro
Tempore of the Senate, and the chairs of the Assembly Committee on
Jobs, Economic Development, and the Economy and the Senate Committee
on Business, Professions and Economic Development, or the successor
committees with jurisdiction over international trade and economic
development programs.
   SEC. 44.    Section 13996.55 of the  
Government Code   is amended to read: 
   13996.55.  (a) Based on the study prepared pursuant to Section
13996.5, the  Secretary of Business, Transportation and
Housing   Executive   Director of the Office of
Trade and Investment at the Economic and Employment Development
Panel  shall provide to the Legislature, not later than February
1, 2008, a strategy for international trade and investment that, at
a minimum, includes all of the following:
   (1) Policy goals, objectives, and recommendations necessary to
implement a comprehensive international trade and investment program
for the State of California. This information shall be provided in a
fashion that clearly indicates priority within the overall strategy.
   (2) Measurable outcomes and timelines for the goals, objectives,
and actions for the international trade and investment program.
   (3) Identification of impediments for achieving goals and
objectives.
   (4) Identification of key stakeholder partnerships that will be
used in implementing the strategy.
   (5) Identification of options for funding recommended actions.
   (6) Identification of an international trade and investment
organizational structure for the state administration of
international trade and investment policies, programs, and services.
   (b) The strategy shall be developed in consultation with the
California  Economic Strategy Panel   Economic
and Employment Development Panel  . In the course of developing
the strategy, the secretary shall also consult with other agencies,
boards, and commissions that have statutory responsibilities related
to workforce development, infrastructure, business, and international
trade and investment including, but not limited to, the California
Commission on Industrial Innovation, the Office of the Small Business
Advocate, the California Transportation Commission, the California
Community Colleges, the University of California, the California
State University, the Workforce Investment Board, the Employment
Training Panel, and the California Energy Commission.
   (c) The strategy shall be submitted to the Chief Clerk of the
Assembly and the Secretary of the Senate. A copy of the strategy
shall be provided to the Speaker of the Assembly, the President pro
Tempore of the Senate, and the chairs of the Assembly Committee on
Jobs, Economic Development, and the Economy and the Senate Committee
on Business, Professions and Economic Development, or the successor
committees with jurisdiction over international trade and economic
development programs.
   (d) (1) The strategy shall be reviewed in at least one public
hearing by the relevant policy and fiscal committees of each house of
the Legislature. The hearings shall be held within 60 days of the
strategy being submitted to the Legislature. If the strategy is
submitted when the Legislature is in recess, the hearings shall occur
within 60 days of the members convening.
   (2) The legislative committees may make recommendations to the
secretary on the strategy, and the secretary may modify the strategy
accordingly.
   (e) The secretary shall report to the fiscal committees of the
Legislature on or before February 1, 2009, and by that date each year
thereafter, on how the Governor's proposed budget relates to the
strategy.
   (f) The strategy shall be updated pursuant to the procedures of
this section at least once every five years.
   SEC. 45.    Section 13996.6 of the  
Government Code   is amended to read: 
   13996.6.  (a) The  Secretary of Business, Transportation
and Housing   Executive Director of the Office of Trade
and Investment at the Economic and Employment Development Department
 shall convene a statewide business partnership for
international trade and investment no later than March 1, 2007.
   (b) The business partnership shall include representatives from
small, medium, and large businesses and industries, as well as
nongovernmental organizations and government representatives.
   (c) The business partnership shall advise the  secretary
  executive director  on business needs and
strategy priorities as they relate to international trade and
investment. This information shall be used in establishing the needs
and priorities in the plan developed pursuant to Section 13996.5 and
the strategy developed pursuant to Section 13996.55, and for any
other uses as determined by the  secretary  
executive director  .
   SEC. 46.    Section 13996.65 of the  
Government Code   is amended to read: 
   13996.65.  (a) (1) The  Secretary of Business,
Transportation and Housing   Executive Director of the
Office of Trade and Investment  is prohibited from establishing
any international trade and investment office unless the following
conditions are met:
   (A) The  secretary   executive director 
determines that, based on a review of the international trade and
investment policies and the recommendations and priorities
established in the international trade and investment strategy
developed pursuant to Section 13996.55, it is appropriate to consider
establishing international trade and investment offices.
   (B) The  secretary   executive director 
prepares a separate international trade and investment office
strategy, that meets the requirements and conditions of this section.

   (C) The international trade and investment office strategy
receives statutory authorization pursuant to the requirements and
conditions of this section.
   (D) The  secretary   executiv   e
director  submits a business plan to the Legislature, that meets
the requirements of Section 13996.7.
   (2) This chapter does not apply to any international trade and
investment office established pursuant to Section 13997.1.
   (b) If the  secretary   executive director
 determines that opening international trade and investment
offices is in the best interest of the state, the  secretary
  executive director  shall develop a strategy for
selecting, opening, and managing international trade and investment
offices.
   (c) The international trade and investment office strategy shall
conform to at least all of the following requirements:
   (1) It shall be based on the needs and priorities of California's
businesses.
   (2) It shall be consistent with the resources and priorities of
the overall trade and investment strategy submitted to the
Legislature pursuant to Section 13996.55.
   (3) It shall define the program's goals, objectives, and timelines
for achieving quantifiable targets. Individual offices may have
separate missions or play different roles within the overall
international trade and investment office strategy. To the extent
that the proposed offices are expected to assist businesses in
opening new markets, these activities shall be targeted primarily to
small- and medium-sized businesses.
   (4) It shall outline the  Business, Transportation and
Housing Agency's   Office of Trade and Investment's
 management and oversight responsibilities, funding levels, and
activities.
   (5) It shall outline how international trade and investment office
locations will be selected by the  secretary  
executive director  and approved by the Governor, including the
general geographic locations, number of offices, a process for
determining how long an office should remain operational, and duties
undertaken by the offices.
   (6) It shall define how the offices will be funded, including
funding for oversight and monitoring.
   (7) It shall consider how offices will be staffed, including
staffing levels and types of positions needed to operate the offices
proposed in the international trade and investment office strategy.
   (8) It shall provide a conflict-of-interest policy and gift
policy.
   (9) It shall provide for the appointment of a senior level
international trade and investment office manager as described in
subdivision (c) of Section 99106.
   (d) The international trade and investment office strategy shall
be submitted to the Chief Clerk of the Assembly and the Secretary of
the Senate. A copy of the strategy shall be provided to the Speaker
of the Assembly, the President pro Tempore of the Senate, and the
chairs of the Assembly Committee on Jobs, Economic Development, and
the Economy and the Senate Committee on Business, Professions and
Economic Development, or the successor committees with jurisdiction
over international trade and economic development programs.
   (e) (1) The international trade and investment office strategy
shall be reviewed in at least one public hearing by the relevant
policy and fiscal committees of each house of the Legislature. The
hearings shall be held within 60 days of the strategy being submitted
to the Legislature. If the strategy is submitted when the
Legislature is in recess, the hearings shall occur within 60 days of
the members convening.
   (2) The legislative committees may make recommendations to the
 secretary   executive director  on the
strategy, and the  secretary   executive
director  may modify the strategy accordingly.
   (f) The international trade and investment office strategy shall
be updated no less than every five years from the date that the first
strategy is submitted to the Chief Clerk of the Assembly and the
Secretary of the Senate.
   (g) The international trade and investment office strategy shall
be implemented only upon statutory authorization by the Legislature.
   SEC. 47.    Section 13996.7 of the  
Government Code   is amended to read: 
   13996.7.  (a) Except as specified in Section 13997.1,
international trade and investment offices are prohibited from being
established except under the conditions specified in the
international trade and investment office strategy described in
Section 13996.65. Except as specified in Section 13997.1, no office
may be established except as provided in this chapter.
   (b) In establishing offices pursuant to this section, the 
secretary   executive director  shall submit to
the Legislature a business plan for each proposed office, which shall
include, but not be limited to, all of the following:
                                               (1) The mission of the
office, goals, objectives, and timelines for achieving quantifiable
targets.
   (2) The level of staffing and staff expertise requirements needed
to successfully operate the office.
   (3) The proposed terms for the operation of the offices, including
the duration and oversight needed for office operations.
   (4) How the opening of the office relates to the international
trade and investment office strategy and the overall international
trade and investment strategy.
   (c) (1) The international trade and investment offices shall be
under the direction of a manager of international trade and
investment offices  within the agency  , to be
designated by the  secretary   executive
director  . The manager shall be an individual with experience
in management and oversight of public agencies or experience in
international trade, investments, or global business.
   (2) No international trade and investment office shall be opened
until the position of the manager of international trade and
investment offices is filled  within the agency  .
   (3) The position of the manager of the international trade and
investment offices shall be a state employee position funded and
staffed in a manner consistent with the international trade and
investment office strategy.
   (d) (1) Each office established pursuant to this chapter shall
submit a report to the  agency   Office of Trade
and Investment  by December 1 of each year on meeting its
goals, objectives, and timelines as outlined in its business plan.
   (2) The  secretary   executive director 
shall provide a summary of the reports to the relevant policy
committees of each house of the Legislature, as set forth in
paragraph (2) of subdivision (f), by the following February 1 of each
year.
   (e) The  agency   executive director 
shall conduct an annual performance review of each office for the
first three years of the office's operation. After this term, upon
the determination of the  secretary   executive
director  , the performance reviews may be undertaken at a
longer interval, but not to exceed five years. If the 
secretary   executive director  determines that an
extended interval is appropriate for a particular office, this shall
be clearly indicated in the  secretary's  
executive director's  annual report to the Legislature on the
activities of the offices.
   (f) (1) The  secretary   executive director
 shall contract for an independent study of the operations and
effectiveness of the international trade and investment offices
established pursuant to this section at the conclusion of the first
two years of operation and at four year intervals after the initial
study.
   (2) The report on the results of the study shall be submitted to
the Chief Clerk of the Assembly and the Secretary of the Senate no
later than two years after the opening of the first office pursuant
to this chapter. A copy of the report shall be provided to the
Speaker of the Assembly, the President pro Tempore of the Senate, and
the chairs of the Assembly Committee on Jobs, Economic Development,
and the Economy and the Senate Committee on Business, Professions and
Economic Development, or the successor committees with jurisdiction
over international trade and economic development programs.
   (g) International trade and investment offices shall be funded
only according to the international trade and investment office
strategy authorized pursuant to subdivision (g) of Section 13996.65,
except as provided for in Section 13997.1. All nonstate sources of
funding shall be identified on the  agency  
office Internet  Web site by name and the amount contributed.
The  agency   office  shall be responsible
for all state administrative and oversight costs. The agency shall
also be responsible for some portion of the costs of each office, not
to exceed one hundred thousand dollars ($100,000) per office.
   (h) Consistent with the international trade and investment office
strategy, the  secretary   executive director
 shall make a determination by September 1 of each year that
sufficient funds have been appropriated in the annual Budget Act to
meet its oversight and management responsibilities related to the
proper operation of the offices. If, in the opinion of the 
secretary   executive director  , insufficient
funding has been provided, the  secretary  
executive director  shall notify the Joint Legislative Budget
Committee and submit a budget change proposal to request sufficient
funding.
   SEC. 48.    Section 13996.75 of the  
Government Code   is amended to read: 
   13996.75.  The Controller shall not allocate any state funds to
the  Business, Transportation and Housing Agency 
 Office of Trade and Investment  for international trade and
investment activities if any of the following conditions occur:
   (a) The strategy for international trade and investment has not
been submitted to the Legislature pursuant to subdivision (a) of
Section 13996.55 by May 1, 2008, or the strategy update required by
subdivision (f) of that section has not been completed within six
years of the completion of the original strategy or the most recent
update, as applicable.
   (b) The report to the fiscal committees of the Legislature
required by subdivision (e) of Section 13996.55 has not been
submitted by May 1 of the year in which it is due.
   (c) The summary required by paragraph (2) of subdivision (d) of
Section 13996.7 has not been submitted to the Legislature by May 1 of
the year in which it is due.
   (d) The determination required by subdivision (h) of Section
13996.7 has not been made by December 1 of the year in which it is
due.
   SEC. 49.   Section 13999.1 of the  
Government Code   is amended to read: 
   13999.1.  For purposes of this act, the following terms have the
following meanings: 
   (a) "Agency" means the Business, Transportation and Housing
Agency.  
   (b) 
    (a)  "Authority" means the California Spaceport
Authority. 
   (c) 
    (b)  "Date of designation" means the date that the
spaceport receives designation by the authority pursuant to Section
13999.3. 
   (d)  
   (c) "Executive director" means the Executive Director of the
Office of Technology and Innovation. 
    (d)  "Governing body" means the governing body of a
city, county, city and county, special district, or joint powers
authority.
   (e) "Launch" means to place, or attempt to place, a launch vehicle
into a ballistic, suborbital, or orbital trajectory, into Earth
orbit in outer space, or otherwise into outer space, and also is a
means of placing a commercial, civil, or military payload into Earth
orbit or beyond, including all activities involved in the preparation
of a launch vehicle for flight, including all processing, servicing,
and support activities that take place at a launch site or at a
California mission control support site for ocean launches. A "launch"
begins with the arrival of the launch vehicle or payload at the
launch site.
   (f) "Launch site" means a location from which a space launch or
operation directly associated with a space launch takes place, a
location at which a launch vehicle or its payload, if any, is
intended to land, or as defined in the Commercial Space Launch Act
(49 U.S.C. Sec. 70101 and following). The site includes any
right-of-way directly associated with the space launch or reentry
operations and all facilities and support infrastructure related to
launch, reentry, or payload processing.
   (g) "Launch vehicle" means a vehicle specifically designed and
built to operate in or place a payload in the upper atmosphere or
outer space. "Launch vehicles" include, but are not limited to,
expendable space launch vehicles and reusable launch vehicles. 
   (h) "Office" means the Office of Technology and Innovation within
the Economic and Employment Development Department.  
   (h) 
    (i)  "Operation of a launch site" means the conduct of
approved safety operations at a launch site to support the launching
of vehicles and payloads. 
   (i) 
    (j)  "Operation of a reentry site" means the conduct of
safety operations at a fixed site on Earth at which a reentry vehicle
and its payload, if any, is intended to land. 
   (j) 
    (k)  "Payload" means an object, including, but not
limited to, a satellite that a licensed launch site undertakes to
place into outer space by means of a launch vehicle, including
components of the vehicle specifically designed or adopted to support
that activity. 
   (k) 
    (l)  "Person" means any individual and any corporation,
partnership, joint venture, association, or other entity organized or
existing under the laws of any state or nation. 
   (l) 
    (m)  "Reentry" means the return of any launch vehicle
that has been placed in a ballistic, suborbital, or orbital
trajectory, and its payload, if any, to the Earth. "Reentry" includes
all activities involved in the postflight ground operations. A
"reentry" ends when a launch vehicle or payload, if any, has
completed its descent to Earth and is retrieved. 
   (m) 
    (n)  "Reentry site" means the location on Earth at which
a reentry is intended to occur, as defined in a license issued or
transferred by the United States Secretary of Transportation, and any
necessary support infrastructure related to reentry or payload
recovery. 
   (n) 
    (o)  "Reusable launch vehicle" means a vehicle that is
designed to launch into an orbital or suborbital trajectory, into
Earth orbit in outer space, or otherwise into outer space, that
returns to Earth and is reused for a subsequent future launch.

   (o) 
    (p)  "Secretary" means the Secretary of Business,
Transportation and Housing. 
   (p) 
    (q)  "Spaceport" means an entity that has been
designated pursuant to Section 13999.3.
   SEC. 50.    Section 13999.2 of the  
Government Code   is amended to read: 
   13999.2.  (a) Subject to the availability of funds appropriated
for that purpose, the  Business, Transportation and Housing
Agency   office  shall implement a space enterprise
development 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.
   (b) The  agency   office  may 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.
   (c) The  secretary   executive director 
shall select a California nonprofit corporation to assist the agency
in its administration of space enterprise economic development
activities through programs, projects, grants, partnerships,
networks, and collaboration. The corporation shall be selected
through a solicitation process established by the agency. The
solicitation process shall include criteria for selection of the
corporation, which shall include, but not be limited to, demonstrated
experience in space enterprise and the ability to perform space
enterprise development activities described in subdivision (d).
   (d) The corporation may perform one or more of the following
activities, as determined contractually between the agency and the
corporation:
   (1) Serve as the California Spaceport Authority with
responsibilities specified in Section 13999.3.
   (2) 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.
   (3) Identify science and technology trends that are significant to
space enterprise and the state and act as a clearinghouse for space
enterprise issues and information.
   (4) 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.
   (5) Provide information to the  secretary  
executive director  relevant to changes in federal, state, and
local statutes and regulations that will enhance the development of
space enterprise in California.
   (6) Provide information to the  secretary  
executive director  regarding the development of laws,
regulations, decisions, or determinations affecting the economic and
employment impacts of space enterprise in California.
   (7) Provide recommendations to the  secretary 
 executive director  for appropriate state funding
mechanisms and amounts to promote development of space enterprise in
California, including education and workforce development.
   (8) Provide recommendations to the  secretary 
 executive director  in the form of strategic planning
documents.
   (9) Review applications for, and promote, the California Space
Enterprise Competitive Grant Program established by Section 13999.4.
   (e) (1) The  agency   office  and the
corporation shall enter into an annual contract specifying the
activities to be performed by the corporation.
   (2) Pursuant to the contract, the corporation shall submit to the
 agency   office  quarterly reports of its
activities and finances. The quarterly reports shall be of sufficient
detail for the  agency   office  to
determine whether the corporation is in compliance with the annual
contract between the  agency   office  and
the corporation.
   (3) The annual contract shall include conflict of interest
requirements developed by the  agency   office
 .
   (4) Failure of the corporation to comply with the conditions in
the annual contract, as evidenced in the quarterly reports and any
supplemental monitoring of the corporation by the  agency
  office  , shall result in the cancellation of the
annual contract and deselection of the corporation. Upon the
deselection of the corporation, the  agency  
office  shall utilize the solicitation process set forth in
subdivision (c) to select a replacement corporation.
   SEC. 51.    Section 13999.4 of the  
Government Code   is amended to read: 
   13999.4.  (a) The California Space Enterprise Competitive Grant
Program is hereby established within the  Business,
Transportation and Housing Agency   office  to
provide funding, upon appropriation by the Legislature, for the
development of space enterprise in California. For purposes of this
section, space enterprise activities shall 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. Entities conducting activities in California intended to
improve the competitiveness of space enterprise in California,
including public, private, educational, commercial, nonprofit, or
for-profit entities may apply for grants.
   (b) (1) If program funding is appropriated by the Legislature, the
corporation selected pursuant to subdivision (c) of Section 13999.2
of this bill shall, at least annually, issue solicitations. No
solicitation shall be issued without the prior review and approval by
the  agency   office  . If the corporation
has not issued a solicitation within 180 days of the appropriation
of funds, the  agency   office  shall issue
the solicitation.
   (2) Solicitations developed by the corporation shall include
minimum eligibility and requirements. Additional requirements may be
added to each year's grant solicitation. The solicitation shall
address at least all of the following:
   (A) Jobs created and retained by the implementation of the
project.
   (B) Cost sharing by other project participants, which should
include at least one of the following:
   (i) A private sector company or companies.
   (ii) One or more foundations, industry associations, or nonprofit
cooperative associations, or any combination thereof.
   (iii) In-kind support, which may include staff and facilities.
   (iv) Federal or local government funding.
   (C) A condition that grant funds will not be used to supplant
other project funds.
   (D) A demonstration that a majority of the project will be
undertaken in California.
   (E) An agreement among all project participants as to intellectual
property rights relative to the project.
   (F) The potential impact on the state's economy.
   (G) The cost-effectiveness of the project.
   (H) The importance of state funding for the viability of the
project.
   (I) A demonstration of technical feasibility and an assessment of
programmatic risk.
   (c) In evaluating grant proposals, the corporation shall establish
an impartial review panel composed of technical and scientific
experts and government representatives to review grant applications.
The panel shall be composed of members from throughout the state who
are knowledgeable about activities related to space enterprise. No
more than 30 percent of the panel members shall be government
representatives, and all other members shall either be actively
involved in, or be technical and scientific experts in activities
related to, space enterprise. No more than 30 percent of the panel
members shall be members of, or on the board of directors of, the
corporation.
   (d) (1) The review panel shall review all applications received by
the deadline specified in the solicitation in order to determine the
applications that are complete and that meet the criteria set forth
in the solicitation. The review panel may rely on experts who are not
part of the panel in order to determine compliance with one or more
criteria.
   (2) All applications meeting the criteria set forth in paragraph
(1) shall be submitted to the  agency   office
 .
   (3) The  agency   office  may remove one
or more applications from those submitted by the review panel upon a
determination that the application did not meet the criteria set
forth in paragraph (1). The  agency   office
 shall rank the grant applications received from the review
panel, minus any applications removed by the  agency
  office  because of failure to meet the criteria.
The ranking shall be based upon criteria stated in the solicitation.
The ranking shall include recommendations as to the amount of state
funding for each grant application.
   (e) The  secretary   executive director 
shall award program grants based upon the criteria set forth in
paragraph (1) of subdivision (d).
   (f) The funding determination shall be transmitted to the Governor
and the chairpersons of the Senate and Assembly fiscal committees
and shall be subject to the availability of funds appropriated for
that purpose.
   (g) The solicitation process set forth in this section shall not
be subject to Chapter 3.5 (commencing with Section 11340) of Part 1.
   (h) The Legislature hereby finds and declares 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.
   SEC. 52.    Section 15570 of the  
Government Code   is amended to read: 
   15570.  (a) The  secretary   director 
shall lead the preparation of a biennial California Economic  and
Employment  Development Strategic Plan. In fulfilling this
duty, the  secretary   director  shall
 do the following: 
    (1)    Review the
recommendations made by the California Economic Strategy Panel in
their biennial economic development strategic plan document.
  call on the assistance of the California Economic and
Workforce Investment Board.  This document shall make
recommendations regarding an economic development strategic plan for
the state, covering a  two-year   five-year
 time period and containing a statement of economic goals for
the state, a prioritized list identifying significant issues learned
from economic development strategic plan panel meetings, proposals
for legislation, regulations, and administrative reforms necessary to
improve the business climate and economy of the state, evaluation of
the effectiveness of the state's economic development programs, a
list of key industries in which the state shall focus its economic
development efforts, and strategies to foster job growth and economic
development covering all state agencies, offices, boards, and
commissions that have economic development responsibilities. 

   (2) Convene a biennial economic strategy panel to provide
recommendations regarding a California economic development strategic
plan. This panel shall conduct meetings in Sacramento, all cities of
the state with populations over 500,000, and in major cities of
other regions of California as designated by the secretary. The
secretary shall invite businesses, labor unions, organizations
representing the interests of diverse ethnic and gender groups, local
government leaders, academic economists and business professors,
chambers of commerce and other business organizations, government
agencies, and key industries to contribute to the preparation of the
recommended economic strategy. These meetings shall address at least
the following matters of concern:  
   (A) Strengths and weaknesses of the California economy and the
state's prospects for future economic prosperity.  
   (B) Emerging and declining industries in California and elsewhere.
 
   (C) Effectiveness of California's economic development programs in
creating and retaining jobs and attracting industries. 

   (D) Adequacy of state and local physical and economic
infrastructure.  
   (E) Government impediments to economic development. 

   (F) The development of a system of accountability for use in the
annual state budget process and in the legislative process to measure
the performance of all state policies, programs, and tax
expenditures intended to stimulate the economy. In developing a
system of accountability, the panel shall, by using only existing
resources and without future budget augmentation made for this
purpose, do all of the following:  
   (i) Develop a standard definition of economic development.
 
   (ii) Develop, for use in state law, standard measurements of real
per capita income, job growth, new business creation, private sector
investment, minority entrepreneurship, and income inequality.
 
   (iii) Survey and evaluate efforts in other states to develop
accountability measures for public investments in economic
development.  
   (iv) Determine whether a return on investment calculation is
feasible for public investments in economic development. 

   (v) Conduct a comparative study of various methodologies for
preparing the economic development sections of a state budget,
including unified functional budget, zero-based budget, and
performance-based budget methodologies.  
   (vi) Study the feasibility of statutory disclosure requirements on
specified publicly funded subsidies to private sector businesses.
 
   (vii) Submit a report of its findings and recommendations
regarding this subparagraph to the Legislature no later than one year
after its first meeting after January 1, 2005.  
   (b) The panel shall be composed of the following 15 members:
 
   (1) The Secretary of Labor and Workforce Development, who shall
serve as chair of the panel.  
   (2) Eight persons appointed by the Governor.  
   (3) The Speaker of the Assembly or his or her designee. 

   (4) The President pro Tempore of the Senate or his or her
designee.  
   (5) The Minority Leader of the Assembly or his or her designee.
 
   (6) The Minority Leader of the Senate or his or her designee.
 
   (7) One person appointed by the Speaker of the Assembly. 

   (8) One person appointed by the Senate Committee on Rules.
 
   (c) The panel shall be representative of state government,
business, labor, finance, and academic institutions, and shall be
broadly reflective of the state's population as to gender, ethnicity,
and geographic residence within California.  
   At least one-half of all the persons on the panel shall be from
the private sector and at least two appointments shall be from
private businesses with less than 50 employees. At least two
appointments shall be from rural areas of the state. Beginning
January 1, 2004, appointments to the panel shall be for four-year
terms, except that the Governor's appointments made pursuant to
paragraph (2) of subdivision (b) shall be made as follows: 

   (1) Four members shall be appointed on January 1, 2004, and every
four years thereafter.  
   (2) Four members shall be appointed on January 1, 2004, for a
two-year term.  
   (3) Upon the expiration of the initial appointments made pursuant
to paragraph (2), four members shall be appointed on January 1, 2006,
and every four years thereafter. 
   (d) 
    (b)  The  secretary   director
 shall deliver copies of the economic strategy panel's
recommended California economic development strategic plan to every
constitutional officer, legislator, member of the Governor's cabinet,
members of the economic development strategic plan panel, and every
state agency, office, board, and commission having economic
development responsibilities. 
   (e) 
    (c)  In each succeeding  two-year  
five-year  cycle, the  secretary  
director  shall  undertake this process anew, so as to
 update the economic strategy on or before October 31 of
each succeeding  second   fifth  year.
   SEC. 53.    Section 15901 of the  
Government Code   is amended to read: 
   15901.  (a) The Governor, utilizing his staff and the resources of
state  agencies   entities  , shall
transmit to the Legislature, not later than April 15 of each year, an
economic report to be designated as the "Economic Report of the
Governor" setting forth all of the following:
            (1) A review of economic developments during the
preceding calendar year, including trends in employment,
unemployment, income, construction, and major economic sectors
providing a measure of economic growth.
   (2) Forecasts of trends in employment, income, and investment for
the coming year and trends in such major economic sectors as it is
feasible to project.
   (3) Additional material on the California economy that is
pertinent and of general interest, with historical analysis and
projections of use in economic planning whenever possible.
   (4) Insofar as possible, summaries of state policies and actions
that relate to the economic development of the state pursuant to
Section 15900.
   (b) In conjunction with the economic report, the Governor shall
present an economic message reviewing significant economic
achievements of the past year, outlining problem areas, and defining
economic policy, and shall make recommendations as may be appropriate
for programs to further economic development to increase employment,
income, and investment in the state.
   (c) The Governor may transmit from time to time to the
Legislature, reports supplementary to the economic report, providing
information on the current status of the California economy and any
new or revised recommendations as he deems necessary or desirable to
achieve the policy declared in Section 15900.
   SEC. 54.    Section 63021 of the  
Government Code   is amended to read: 
   63021.  (a) There is within the  Business, Transportation
and Housing Agency   Economic and Employment Development
Department  the Infrastructure and Economic Development Bank
which shall be responsible for administering this division.
   (b) The bank shall be under the direction of an executive director
appointed by the Governor, and who shall serve at the pleasure of
the Governor. The appointment shall be subject to confirmation by the
Senate.
   SEC. 55.    Section 63021.5 of the  
Government Code   is amended to read: 
   63021.5.  (a) The bank shall be governed and its corporate power
exercised by a board of directors that shall consist of the following
persons:
   (1) The Director of Finance or his or her designee.
   (2) The Treasurer or his or her designee.
   (3) The  Secretary of Business, Transportation and Housing
  Director of the Economic and Employment Development
Department  or his or her designee, who shall serve as chair of
the board.
   (4) An appointee of the Governor. 
   (5) The Secretary of State and Consumer Services Agency or his or
her designee. 
   (b) Any designated director shall serve at the pleasure of the
designating power.
   (c) Three of the members shall constitute a quorum and the
affirmative vote of three board members shall be necessary for any
action to be taken by the board.
   (d) A member of the board shall not participate in any bank action
or attempt to influence any decision or recommendation by any
employee of, or consultant to, the bank that involves a sponsor of
which he or she is a representative or in which the member or a
member of his or her immediate family has a personal financial
interest within the meaning of Section 87100. For purposes of this
section, "immediate family" means the spouse, children, and parents
of the member.
   (e) Except as provided in this subdivision, the members of the
board shall serve without compensation, but shall be reimbursed for
actual and necessary expenses incurred in the performance of their
duties to the extent that reimbursement for these expenses is not
otherwise provided or payable by another public agency, and shall
receive one hundred dollars ($100) for each full day of attending
meetings of the authority.
   SEC. 56.    Section 65054 of the  
Government Code   is amended to read: 
   65054.  (a) The Legislature finds and declares that it is in the
public interest to aid, counsel, assist, and protect, insofar as is
possible, the interests of small business concerns in order to
preserve free competitive enterprise and maintain a healthy state
economy.
   (b) In order to advocate the causes of small business and to
provide small businesses with the information they need to survive in
the marketplace, there is created within the  Office of
Planning and Research   Economic and Employment
Development Department  the Office of Small Business 
Advocate  . 
   (c) The advocate shall post on its Internet Web site the name and
telephone number of the small business liaison designated pursuant to
Section 14846. 
   SEC. 57.    Section 65054.1 of the  
Government Code   is amended to read: 
   65054.1.  The following definitions apply to this article, unless
otherwise indicated:
   (a) "Advocate" means the California Small Business Advocate who is
also the Director of the Office of Small Business  Advocate
 . 
   (b) "Board" means the California Small Business Board. 
    (b)     "Director"
means the Director of the Office of Small Business Advocate
.
   (c) "Office" means the Office of Small Business  Advocate
  within the Economic and Employment Development
Department  .
   SEC. 58.    Section 65054.3 of the  
Government Code   is amended to read: 
   65054.3.  (a) The Director of the Office of Small Business
Advocate shall be appointed by, and shall serve at the pleasure of,
the  Governor   California Small Business Board
 . 
   (b) The Governor shall appoint the employees that are needed to
accomplish the purposes of Section 65054, this section, and Section
65054.4.  
   (c) 
    (b)  The duties and functions of the advocate shall
include all of the following:
   (1) Serve as the principal advocate in the state on behalf of
small businesses, including, but not limited to, advisory
participation in the consideration of all legislation and
administrative regulations that affect small businesses, and advocacy
on state policy and programs related to small businesses on disaster
preparedness and recovery including providing technical assistance.
   (2) Represent the views and interests of small businesses before
other state agencies whose policies and activities may affect small
business.
   (3) Enlist the cooperation and assistance of public and private
agencies, businesses, and other organizations in disseminating
information about the programs and services provided by state
government that are of benefit to small businesses, and information
on how small businesses can participate in, or make use of, those
programs and services.
   (4) Issue a report every two years evaluating the efforts of state
agencies and, where appropriate, specific departments that
significantly regulate small businesses to assist minority and other
small business enterprises, and making recommendations that may be
appropriate to assist the development and strengthening of minority
and other small business enterprises.
   (5) Consult with experts and authorities in the fields of small
business investment, venture capital investment, and commercial
banking and other comparable financial institutions involved in the
financing of business, and with individuals with regulatory, legal,
economic, or financial expertise, including members of the academic
community, and individuals who generally represent the public
interest.
   (6) Determine the desirability of developing a set of rational,
objective criteria to be used to define small business, and develop
that criteria, if appropriate.
   (7) Seek the assistance and cooperation of all state agencies and
departments providing services to, or affecting, small business,
including the small business liaison designated pursuant to Section
14846, to ensure coordination of state efforts.
   (8) Receive and respond to complaints from small businesses
concerning the actions of state agencies and the operative effects of
state laws and regulations adversely affecting those businesses.
   (9) Counsel small businesses on how to resolve questions and
problems concerning the relationship of small business to state
government.
   (10) Maintain, publicize, and distribute an annual list of persons
serving as small business ombudsmen throughout state government.
   (11) Consult with the Department of Transportation in the
development and administration of the Small and Emerging Contractor
Technical Assistance Program established pursuant to Article 2.6
(commencing with Section 14137) of Chapter 2 of Part 5 of Division 3
of Title 2. 
   (12) Oversee the state operations of programs that receive funding
from the federal Small Business Development Center Program. 

   (13) Support the work of the California Small Business Board.

   SEC. 59.    Section 65054.4 of the  
Government Code   is amended to read: 
   65054.4.  (a) Each agency of the state shall furnish to the
advocate the reports, documents, and information that are public
records and that the director deems necessary to carry out his or her
functions under this chapter.
   (b) The advocate shall prepare and submit a written annual report
to the Governor and to the Legislature that describes the activities
and recommendations of the office.
   (c) The advocate may establish a centralized interactive telephone
referral system to assist small and minority businesses in their
operations, including governmental requirements, such as taxation,
accounting, and pollution control, and to provide information
concerning the agency from which more specialized assistance may be
obtained. The advocate may establish and advertise a telephone number
to serve this centralized interactive telephone referral system.

   (d) The advocate shall post on its Internet Web site the name and
telephone number of the small business liaison designated pursuant to
Section 14846. 
   SEC. 60.    Section 65054.5 is added to the 
 Government Code   , to read:  
   65054.5.  (a) There is in the Office of Small Business the Small
Business Board.
   (b) The board consists of the following membership:
   (1) The Director of the Economic and Employment Development
Department or his or her designee.
   (2) Six members appointed by the Governor, one of whom will serve
as chair of the board, who are actively involved in the California
small business community.
   (3) Two persons actively involved in the business or agricultural
communities, one appointed by the Speaker of the Assembly and one
appointed by the Senate Committee on Rules.
   (4) Two Members of the Legislature or their designees, one
appointed by the Speaker of the Assembly and one appointed by the
Senate Committee on Rules, shall serve on the board insofar as it
does not conflict with the duties of the legislators.
   (c) The board shall do each of the following:
   (1) Advise the Governor, the director, and the advocate regarding
issues and programs affecting California's small business community,
including, but not limited to, business innovation and expansion,
export financing, state procurement, management and technical
assistance, venture capital, and financial assistance.
   (2) Adopt bylaws as are required to govern the conduct and
operation of the board.
   (3) Hold public hearings in order to carry out the objectives of
the office in regards to its responsibilities as legislative advocate
and ombudsman for the state's small business community.
   (d) The public members of the board may, at the discretion of the
department be reimbursed per diem and travel expenses pursuant to
state law. 
   SEC. 61.    Section 99502 of the  
Government Code   is amended to read: 
   99502.  (a) The  Office of Planning and Research 
 office of the Governor  shall maintain and update, a full
and comprehensive list of all state agreements made with foreign
governments. The list shall be updated within 30 days of the
effective date of each new agreement. The list shall include at least
all of the following:
   (1) The dates of enactment or approval and termination.
   (2) The agency, department, board, commission, or other
governmental entity responsible for implementation.
   (3) Activities proposed.
   (4) Expected outcomes.
   (b) Agencies may separately maintain detailed information or
reports on these activities as those agencies determine to be
appropriate, but that information or those reports shall not be
deemed to meet the requirements of this section.
   SEC. 62.    Section 9101 of the  
Unemployment Insurance Code   is amended to read: 
   9101.  "Department" means the  Economic and  Employment
Development Department, which may also be referred to as the
Department of  Economic and  Employment Development 
Department  .
   SEC. 63.    Section 9102 of the  
Unemployment Insurance Code   is amended to read: 
   9102.  "Director" means the Director of  the Economic and
 Employment Development.
   SEC. 64.    Section 9600.5 of the  
Unemployment Insurance Code   is amended to read: 
   9600.5.  The  director   Director  of
the  Economic and  Employment Development Department shall
report annually to the Governor, the Legislature, and the California
Workforce Investment Board, no later than November 30, regarding the
training expenditures made by local workforce investment boards in
the prior fiscal year. The department shall specify what expenditures
qualify as training expenditures, including, but not limited to, the
price paid for classroom instruction or other training
opportunities, contracted services for customized training and
on-the-job training, development of training materials, and
supportive services, including case management, that enable a
participant to attend and complete training. The annual report shall
specify the total amount of federal funding provided to the state and
to each of the local workforce investment areas for the adult and
dislocated persons programs and the amount within each program
expended for training services.
   SEC. 65.    Section 10200 of the  
Unemployment Insurance Code   is amended to read: 
   10200.  The Legislature finds and declares the following:
   (a) California's economy is being challenged by competition from
other states and overseas. In order to meet this challenge,
California's employers, workers, labor organizations, and government
need to invest in a skilled and productive workforce, and in
developing the skills of frontline workers. For purposes of this
section, "frontline worker" means a worker who directly produces or
delivers goods or services.
   The purpose of this chapter is to establish a strategically
designed employment training program to promote a healthy labor
market in a growing, competitive economy that shall fund only
projects that meet the following criteria:
   (1) Foster creation of high-wage, high-skilled jobs, or foster
retention of high-wage, high-skilled jobs in manufacturing and other
industries that are threatened by out-of-state and global
competition, including, but not limited to, those industries in which
targeted training resources for California's small and medium-sized
business suppliers will increase the state's competitiveness to
secure federal, private sector, and other nonstate funds. In
addition, provide for retraining contracts in companies that make a
monetary or in-kind contribution to the funded training enhancements.

   (2) Encourage industry-based investment in human resources
development that promotes the competitiveness of California industry
through productivity and product quality enhancements.
   (3) Result in secure jobs for those who successfully complete
training. All training shall be customized to the specific
requirements of one or more employers or a discrete industry and
shall include general skills that trainees can use in the future.
   (4) Supplement, rather than displace, funds available through
existing programs conducted by employers and government-funded
training programs, such as the Workforce Investment Act of 1998 (29
U.S.C. Sec. 2801 et seq.), the Carl D. Perkins Vocational Education
Act (P.L. 98-524), CalWORKs (Chapter 2 (commencing with Section
11200) of Part 3 of Division 9 of the Welfare and Institutions Code),
the Enterprise Zone Act (Chapter 12.8 (commencing with Section 7070)
of Division 7 of Title 1 of the Government Code), and the
McKinney-Vento Homeless Assistance Act (42 U.S.C. Sec. 11301 et
seq.), the California Community Colleges Economic Development
Program, or apportionment funds allocated to the community colleges,
regional occupational centers and programs, or other local
educational agencies. In addition, it is further the intention of the
Legislature that programs developed pursuant to this chapter shall
not replace, parallel, supplant, compete with, or duplicate in any
way already existing approved apprenticeship programs.
   (b) The Employment Training Panel, in funding projects that meet
the requirements of subdivision (a), shall give funding priority to
those projects that best meet the following goals:
   (1) Result in the growth of the California economy by stimulating
exports from the state and the production of goods and services that
would otherwise be imported from outside the state.
   (2) Train new employees of firms locating or expanding in the
state that provide high-skilled, high-wage jobs and are committed to
an ongoing investment in the training of frontline workers.
   (3) Develop workers with skills that prepare them for the
challenges of a high performance workplace of the future.
   (4) Train workers who have been displaced, have received
notification of impending layoff, or are subject to displacement,
because of a plant closure, workforce reduction, changes in
technology, or significantly increasing levels of international and
out-of-state competition.
   (5) Are jointly developed by business management and worker
representatives.
   (6) Develop career ladders for workers.
   (7) Promote the retention and expansion of the state's
manufacturing workforce.
   (c) The program established through this chapter is to be
coordinated with all existing employment training programs and
economic development programs, including, but not limited to,
programs such as the Workforce Investment Act of 1998 (29 U.S.C. Sec.
2801 et seq.), the California Community Colleges, the regional
occupational programs, vocational education programs, joint
labor-management training programs, and related programs under the
 Economic and  Employment Development Department 
and the Business, Transportation and Housing Agency  .
   SEC. 66.    Section 10201 of the  
Unemployment Insurance Code   is amended to read: 
   10201.  As used in this chapter:
   (a) "Department" means the  Economic and  Employment
Development Department.
   (b) "Employer" or "eligible employer" means any employer subject
to Part 1 (commencing with Section 100) of Division 1, except any
public entity, or any nonprofit organization which has elected an
alternate method of financing its liability for unemployment
insurance compensation benefits pursuant to Article 5 (commencing
with Section 801), or Article 6 (commencing with Section 821) of
Chapter 3.
   Any public entity or nonprofit organization that has elected an
alternate method of financing its liability for unemployment
insurance compensation benefits pursuant to Article 5 (commencing
with Section 801), or Article 6 (commencing with Section 821) of
Chapter 3, shall be deemed to be an employer only for purposes of
placement of new hire trainees who received training as an incidental
part of a training project designed to meet the needs of one or more
private sector employers.
   (c) "Eligible participant" means any person who, prior to
beginning training or employment pursuant to this chapter, is any of
the following:
   (1) Unemployed and has established an unemployment insurance claim
in this state, or has exhausted eligibility for unemployment
insurance benefits from this state within the previous 24 months.
   (2) Employed for a minimum of 90 days by his or her employer, or
if employed for less than 90 days, met the conditions of paragraph
(1) at the time of hire, had received a notice of layoff from the
prior employer, or was employed by an employer for a period of not
less than 90 days during the 180-day period prior to the employee's
current employment at the start of training with an eligible
employer, as provided in subdivision (b). The panel may waive this
requirement for trainees employed by a business locating or expanding
operations in the state, provided it is part of a state and local
economic development effort endeavoring to create or retain
California jobs. The panel may also waive the requirement for up to
10 percent of the trainee population, if it determines a business
meets standard funding requirements set out under subdivision (a) of
Section 10200.
   (d) "Executive director" means the executive director appointed
pursuant to Section 10202.
   (e) "Fund" means the Employment Training Fund created by Section
1610.
   (f) "Job" means employment on a basis customarily considered full
time for the occupation and industry. The employment shall have
definite career potential and a substantial likelihood of providing
long-term job security, with reportable California earnings during
the employment retention period. Furthermore, the employment shall
provide earnings, upon completion of the employment requirement
specified in subdivision (f) of Section 10209, equal to 50 percent,
in the case of new hire training, or 60 percent, in the case of
retraining, of the state or regional average hourly wage. However, in
no case shall the employment result in earnings of less than 45
percent of the state average hourly wage for new hire training and 55
percent of the state average hourly wage for retraining. The panel
may consider the dollar value of health benefits that are voluntarily
paid for by an employer when computing earnings to meet the minimum
wage requirements.
   (g) "New hire training" means employment training, including
job-related literacy training, for persons who, at the start of
training, are unemployed.
   (h) "Panel" means the Employment Training Panel created by Section
10202.
   (i) "Retraining" means employment-related skill and literacy
training for persons who are employed and who meet the definition of
paragraph (2) of subdivision (c) prior to commencement of training
and will continue to be employed by the same employer for at least 90
days following completion of training.
   (j) "State average hourly wage" means the average weekly wage paid
by employers to employees covered by unemployment insurance, as
reported to the Employment Development Department for the four
calendar quarters ending June 30 of the preceding calendar year,
divided by 40 hours.
   (k) "Trainee" means an eligible participant.
   () "Training agency" means any private training entity or local
educational agency.
   SEC. 67.    Section 10201.5 of the  
Unemployment Insurance Code   is amended to read: 
   10201.5.  With respect to funding appropriated in the annual
Budget Act to the  Economic and  Employment Development
Department for allocation by the Employment Training Panel and
identified for training of workers in regions suffering from high
unemployment and low job creation, including the working poor, the
panel, notwithstanding subdivision (g) of Section 10201, may waive
the minimum wage requirements included in that subdivision provided
that the post-retention wage of each trainee who has completed
training and the required training period exceeds his or her wage
before and during training. This determination shall be made on a
case-by-case basis to ensure that post-training improvements in
earnings are sufficient to warrant the investment of public funds.
   SEC. 68.    Section 10202 of the  
Unemployment Insurance Code   is amended to read: 
   10202.  (a) The Employment Training Panel is established in the
 Economic and  Employment Development Department.
   (b) The executive director shall be appointed by the Governor, and
shall be well qualified for the position with experience in
government. The executive director may perform all duties, exercise
all powers, discharge all responsibilities, and administer and
enforce all laws, rules, and regulations under the jurisdiction of
the panel, with the approval of the panel. The executive director
shall administer this chapter, with the approval of the panel, in the
manner he or she deems necessary to conduct the work of the panel
properly. With the approval of the panel, the executive director may
create divisions and subdivisions as necessary, and change and
abolish these divisions and subdivisions from time to time.
   (c) The panel may employ personnel necessary to carry out the
purposes of this chapter. All personnel shall be appointed pursuant
to the State Civil Service Act (Part 1 (commencing with Section
18000) of Division 5 of Title 2 of the Government Code), except for
an executive director, and two assistant directors, who shall be
exempt from state civil service.
   (d) All personnel of the panel shall be appointed, directed, and
controlled only by the panel or its authorized deputies or agents to
whom it may delegate its powers.
   (e) The Governor shall appoint two assistant directors, to serve
at the pleasure of the Governor. The assistant directors shall have
the duties as assigned by the executive director, and shall be
responsible to the executive director for the performance of their
duties.
   SEC. 69.    Section 10205 of the  
Unemployment Insurance Code  is amended to read: 
   10205.  The panel shall do all of the following:
   (a) Establish a three-year plan that shall be updated annually,
based on the demand of employers for trained workers, changes in the
state's economy and labor markets, and continuous reviews of the
effectiveness of panel training contracts. The updated plan shall be
submitted to the Governor and the Legislature not later than January
1 of each year. In carrying out this section, the panel shall review
information in the following areas:
   (1) Labor market information, including the state-local labor
market information program in the  Economic and  Employment
Development Department  , the California Economic Strategy
Panel,  and other relevant regional or
                        statewide initiatives and collaboratives.
   (2) Evaluations of the effectiveness of training as measured by
increased security of employment for workers and benefits to the
California economy.
   (3) The demand for training by industry, type of training, and
size of employer.
   (4) Changes in skills necessary to perform jobs, including changes
in basic literacy skills.
   (5) Changes in the demographics of the labor force and the
population entering the labor market.
   (6) Proposed expenditures by other agencies of federal Workforce
Investment Act funds and other state and federal training and
vocational education funds on eligible participants.
   (b) Maintain a system to continuously monitor economic and other
data required under this plan. If this data changes significantly
during the life of the plan, the plan shall be amended by the panel.
Each plan shall include all of the following:
   (1) The panel's objectives with respect to the criteria and
priorities specified in Section 10200 and the distribution of funds
between new-hire training and retraining.
   (2) The identification of specific industries, production and
quality control techniques, and regions of the state where employment
training funds would most benefit the state's economy and plans to
encourage training in these areas, including specific standards and a
system for expedited review of proposals that meet the standards.
   (3) A system for expedited review of proposals that are
substantially similar with respect to employer needs, training
curriculum, duration of training, and costs of training, in order to
encourage the development of proposals that meet the needs identified
in paragraph (2).
   (4) The panel's goals, operational objectives, and strategies to
meet the needs of small businesses, including, but not limited to,
those small businesses with 100 or fewer employees. These strategies
proposed by the panel may include, but not be limited to, pilot
demonstration projects designed to identify potential barriers that
small businesses may experience in accessing panel programs and
workforce training resources, including barriers that may exist
within small businesses.
   (5) The research objectives of the panel that contribute to the
effectiveness of this chapter in benefiting the economy of the state
as a whole.
   (6) A priority list of skills or occupations that are in such
short supply that employers are choosing to not locate or expand
their businesses in the state or are importing labor in response to
these skills shortages.
   (7) A review of the panel's efforts to coordinate with the
California Workforce Investment Board and local boards to achieve an
effective and coordinated approach in the delivery of the state's
workforce resources.
   (A) The panel will consider specific strategies to achieve this
goal that include the development of initiatives to engage local
workforce investment boards in enhancing the utilization of panel
training resources by companies in priority sectors, special
populations, and in geographically underserved areas of the state.
   (B) Various approaches to foster greater program integration
between workforce investment boards and the panel will also be
considered, which may include marketing agreements, expanded
technical assistance, modification of program regulations and policy,
and expanded use of multiple employer contracts.
   (c) Solicit proposals and write contracts on the basis of
proposals made directly to it. Contracts for the purpose of providing
employment training may be written with any of the following:
   (1) An employer or group of employers.
   (2) A training agency.
   (3) A local workforce investment board with the approval of the
appropriate local elected officials in the local workforce investment
area.
   (4) A grant recipient or administrative entity selected pursuant
to the federal Workforce Investment Act of 1998, with the approval of
the local workforce investment board and the appropriate local
elected officials.
   These contracts shall be in the form of fixed-fee performance
contracts. Notwithstanding any provision of law to the contrary,
contracts entered into pursuant to this chapter shall not be subject
to competitive bidding procedures. Contracts for training may be
written for a period not to exceed 24 months for the purpose of
administration by the panel and the contracting employer or any group
of employers acting jointly or any training agency for the purpose
of providing employment training.
   (d) Fund training projects that best meet the priorities
identified annually. In doing so, the panel shall seek to facilitate
the employment of the maximum number of eligible participants.
   (e) Establish minimum standards for the consideration of
proposals, which shall include, but not be limited to, evidence of
labor market demand, the number of jobs available, the skill
requirements for the identified jobs, the projected cost per person
trained, hired, and retained in employment, the wages paid successful
trainees upon placement, and the curriculum for the training. No
proposal shall be considered or approved that proposes training for
employment covered by a collective bargaining agreement unless the
signatory labor organization agrees in writing.
   (f) Ensure the provision of adequate fiscal and accounting
controls for, monitoring and auditing of, and other appropriate
technical and administrative assistance to, projects funded by this
chapter.
   (g) Provide for evaluation of projects funded by this chapter. The
evaluations shall assess the effectiveness of training previously
funded by the panel to improve job security and stability for
workers, and benefit participating employers and the state's economy,
and shall compare the wages of trainees in the 12-month period prior
to training as well as the 12-month period subsequent to completion
of training, as reflected in the department's unemployment insurance
tax records. Individual project evaluations shall contain a summary
description of the project, the number of persons entering training,
the number of persons completing training, the number of persons
employed at the end of the project, the number of persons still
employed three months after the end of the project, the wages paid,
the total costs of the project, and the total reimbursement received
from the Employment Training Fund.
   (h) Report annually to the Legislature, by November 30, on
projects operating during the previous state fiscal year. These
annual reports shall provide separate summaries of all of the
following:
   (1) Projects completed during the year, including their individual
and aggregate performance and cost.
   (2) Projects not completed during the year, briefly describing
each project and identifying approved contract amounts by contract
and for this category as a whole, and identifying any projects in
which funds are expected to be disencumbered.
   (3) Projects terminated prior to completion and the reasons for
the termination.
   (4) A description of the amount, type, and effectiveness of
literacy training funded by the panel.
   (5) Results of complete project evaluations.
   (6) A description of pilot projects, and the strategies that were
identified through these projects, to increase access by small
businesses to panel training contracts.
   (7) A listing of training projects that were funded in high
unemployment areas and a detailed description of the policies and
procedures that were used to designate geographic regions and
municipalities as high unemployment areas.
   In addition, based upon its experience in administering job
training projects, the panel shall include in these reports policy
recommendations concerning the impact of job training and the panel's
program on economic development, labor-management relations,
employment security, and other related issues.
   (i) Conduct ongoing reviews of panel policies with the goal of
developing an improved process for developing, funding, and
implementing panel contracts as described in this chapter.
   (j) Expedite the processing of contracts for firms considering
locating or expanding businesses in the state, in accordance with the
priorities for employment training programs set forth in subdivision
(b) of Section 10200.
   (k) Coordinate and consult regularly with business groups and
labor organizations, the California Workforce Investment Board, the
State Department of Education, the office of the Chancellor of the
California Community Colleges, and the Employment Development
Department.
   (l) Adopt by regulation procedures for the conduct of panel
business, including the scheduling and conduct of meetings, the
review of proposals, the disclosure of contacts between panel members
and parties at interest concerning particular proposals, contracts
or cases before the panel or its staff, the awarding of contracts,
the administration of contracts, and the payment of amounts due to
contractors. All decisions by the panel shall be made by resolution
of the panel and any adverse decision shall include a statement of
the reason for the decision.
   (m) Adopt regulations and procedures providing reasonable
confidentiality for the proprietary information of employers seeking
training funds from the panel if the public disclosure of that
information would result in an unfair competitive disadvantage to the
employer supplying the information. The panel may not withhold
information from the public regarding its operations, procedures, and
decisions that would otherwise be subject to disclosure under the
California Public Records Act (Chapter 3.5 (commencing with Section
6250) of Division 7 of Title 1 of the Government Code).
   (n) Review and comment on the budget and performance of any
program, project, or activity funded by the panel utilizing funds
collected pursuant to Section 976.6.
   SEC. 70.    Section 10213 of the  
Unemployment Insurance Code   is amended to read: 
   10213.  The  Economic and  Employment Development
Department shall cooperate with the panel by offering necessary
technical assistance, which may include, but is not limited to, labor
market information, projections of occupational demand, and
information and advice on alternative training strategies.
   SEC. 71.    Section 10214 of the  
Unemployment Insurance Code   is amended to read: 
   10214.  To assist the panel and the Legislature in assessing the
impact of this chapter over an extended period of time, the 
Economic and  Employment Development Department shall develop
and maintain a continuous employment, wage, and benefit history of
unemployment insurance participants.
   SEC. 72.    Section 10510 of the  
Unemployment Insurance Code   is amended to read: 
   10510.  It is the intent of the Legislature, in enacting this
chapter, to establish and implement a program of comprehensive and
coordinated employment and training planning in California in
accordance with the federal  Job Training Partnership Act
  Workforce Investment Act  , as amended. The
Legislature recognizes the need for a new employment and training
planning structure which will provide for comprehensive analysis of
alternative expenditure possibilities for the fiscal resources
available in this field. The basic principles of the system are as
follows:
   (a) That the employment and training needs at the local, regional,
and state levels, be addressed.
   (b) That the expenditure of available funds meets the needs at the
local level.
   (c) That employment and training programs be integrated into a
uniform employment and training services planning system within
substate regions.
   (d) That a uniform planning system shall coordinate employment and
training programs and eliminate duplication of programs among state
and local agencies.
   (e) That decisionmaking be decentralized, insofar as is
practicable, to the governmental level closest to the people.
   SEC. 73.    Section 10529 of the  
Unemployment Insurance Code   is amended to read: 
   10529.  (a) The services provided by the existing labor market
information system within the department shall include workforce and
economic information that does all of the following:
   (1) Provides data and information to the state  Economic and
 Workforce Investment Board created pursuant to Section 2821 of
Title 29 of the United States Code, to enable the board to plan,
operate, and evaluate investments in the state's workforce
preparation system that will make the California economy more
productive and competitive.
   (2) Provides data and information to the California Economic
Strategy Panel for continuous strategic planning and the development
of policies for the growth and competitiveness of the California
economy.
   (3) Identifies and combines information from various state data
bases to produce useful, geographically based analysis and products,
to the extent possible using existing resources.
   (4) Provides technical assistance related to accessing workforce
and economic information to local governments, public-sector
entities, research institutes, nonprofit organizations, and community
groups that have various levels of expertise, to the extent possible
using existing resources.
   (b) The department shall coordinate with the State Department of
Education, the Chancellor of the California Community Colleges, the
State Department of Social Services, the California Postsecondary
Education Commission, the Department of Finance, and the Franchise
Tax Board in developing economic and workforce information. The
department shall also solicit input in the operation of the program
from public and private agencies and individuals that make use of the
labor market information provided by the department.
   SEC. 74.    Section 10530 of the  
Unemployment Insurance Code   is amended to read: 
   10530.  It is the intent of the Legislature to establish a
statewide comprehensive labor market and occupational supply and
demand information system to coordinate the labor market information
needs, including those specified in the statutes cited below, for the
following entities: 
   (1) 
    (a)  The Board of Governors of the California Community
Colleges pursuant to its responsibilities under Sections 70901,
70901.5, 71050, 78015, and 78016 of the Education Code. 
   (2) 
    (b)  The State Department of Education, pursuant to its
responsibilities under Sections 321, 323, 332, 341, 343, 421, 422,
and 423 of the federal Carl D. Perkins Vocational Education Act (20
U.S.C. Sec. 2301 et seq.), and Sections 8031, 8081, 8500, 51228,
52300, 52301.5, 52302, 52302.3, 52302.5, 52304, 52309, 52381, 52519,
52520, 52910, 52911, and 52912 of the Education Code. 
   (3) 
    (c)  The  Economic and  Employment Development
Department, pursuant to its responsibilities under Article 1
(commencing with Section 1251) and Article 1.5 (commencing with
Section 1266) of Chapter 5 of Part 1 of Division 1, Chapter 9
(commencing with Section 2051) of Part 1 of Division 1, Article 2
(commencing with Section 10521) of Chapter 4.5 of Part 1 of Division
3, and Chapter 6 (commencing with Section 15050) and Chapter 7.5
(commencing with Section 15075) of Division 8. 
   (4) 
    (d)  The Employment Training Panel, pursuant to its
responsibilities under Chapter 3.5 (commencing with Section 10200) of
Part 1 of Division 3. 
   (5) 
    (e)  The Department of Rehabilitation, pursuant to its
responsibilities under Section 19152 of the Welfare and Institutions
Code. 
   (6) 
    (f)  The State Department of Social Services, pursuant
to its responsibilities under Article 3.2 (commencing with Section
11320) of Chapter 2 of Part 3 of Division 9 of the Welfare and
Institutions Code. 
   (7) 
   (g)  The  State Job Training Coordinating
Council, pursuant to its responsibilities under Chapter 4.5
(commencing with Section 10510) of Part 1 of Division 3, and Chapter
3 (commencing with Section 15020.1), Chapter 4 (commencing with
Section 15030), Chapter 4.5 (commencing with Section 15035), and
Chapter 7.5 (commencing with Section 15075) of Division 8 
 Workforce Investment Board  .
   SEC. 75.    Section 10533 of the  
Unemployment Insurance Code   is amended to read: 
   10533.  (a) The  Economic and  Employment Development
Department shall operate the State-Local Cooperative Labor Market
Information Program as the primary component of the comprehensive
labor market and occupational supply and demand information system
described by Section 10530. The department shall consult with
agencies listed in Section 10530 in the development and operation of
this program.
   (b) The objectives of this program shall be to produce, through
extensive local participation and for distribution in effective
formats to all local users, reliable occupational information, and to
achieve cost-efficient production by avoiding duplication of
efforts. The program shall be a primary source for local and
statewide occupational information and shall be available in all
labor market areas in the state.
   (c) In producing this information, state and local agencies shall
use state occupational forecasts and other indicators of occupational
growth, combined with local employer surveys of recruitment
practices, job qualifications, earnings and hours, advancement and
outlook, to provide statistically valid occupational analyses for
local job training and education programs.
   (d) Local labor market information studies shall be conducted by
the department or by a local entity and shall include the
participation of local users of the information. All matter omitted
in this version of the bill appears in the bill as introduced in
Assembly, March 11, 2009 (JR11)