California Assembly Bill AB1558 Amended / Bill

 BILL NUMBER: AB 1558AMENDED 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)