PACIFIC GATEWAY SHIPBUILDING, AUTOMATION AND MARITIME INDUSTRIAL CORRIDOR Act @2026-10-07 02:55:16 - Calle 15 de Febrero

Proposed California Assembly Bill 2027-2028 Regular Session Assembly District 69 Proposed by: Evan Winter Program Sponsor / Proponent: Fiveo1 Date of Proposal: October 2026 Primary Geographic Area: Long Beach, Signal Hill, Carson, Avalon and Santa Catalina Island, the Port of Los Angeles, the Port of Long Beach, the San Pedro Bay maritime facilities, and connected Southern California transportation and maritime facilities. Official Correspondence (Post Mail Only): Fiveo1 PO Box 312786 Avalon, California 90704 United States of America Legislative Subject: Shipbuilding, maritime infrastructure, industrial automation, transportation, ports, workforce development, advanced manufacturing, energy infrastructure, international supply chains, economic development, and state investment. BILL SUMMARY An act to establish the California Pacific Gateway Shipbuilding and Maritime Automation Program for the development of a large-scale California shipbuilding, marine manufacturing, port infrastructure, transportation, industrial automation, energy, workforce and logistics network centered on Southern California. The program shall establish a coordinated industrial corridor connecting the Port of Los Angeles, Port of Long Beach, San Pedro Bay maritime facilities, Long Beach, Signal Hill, Carson, Avalon and other qualifying Southern California transportation and maritime facilities. The program shall be designed to support the long-term domestic construction, maintenance, repair, modernization and export of commercial vessels through substantially automated manufacturing systems. The program establishes a long-term planning objective of 25 to 40 commercially viable vessels annually from a single qualified production complex, subject to market demand, environmental approvals, financing, workforce availability, federal requirements and demonstrated production capacity. The program shall emphasize: Automated shipyard production. Robotic welding and fabrication. Automated material handling. Computer-controlled cutting, forming and machining. Digital vessel design and production records. Automated inspection and quality-control systems. Modular ship construction. Electrification and low-emission industrial equipment. Port, rail, road and marine transportation connections. Workforce training and skilled trades. Domestic supply-chain development. California-based maritime research and engineering. Qualified allied-nation shipbuilding partnerships. Diversified international supply chains. Public-private financing. Measurable economic return on state investment. Protection of existing maritime employment while increasing total industrial capacity. Infrastructure capable of supporting future commercial, emergency-response, research and transportation requirements. SECTION 1. SHORT TITLE This act shall be known and may be cited as the "Pacific Gateway Shipbuilding, Automation and Maritime Industrial Corridor Act" (the "Act"). SECTION 2. LEGISLATIVE FINDINGS AND DECLARATIONS The Legislature finds and declares all of the following: (a) The United States has identified restoration of domestic shipbuilding, maritime transportation capacity, maritime workforce development, port infrastructure, and national maritime capability as matters of economic and national security importance. (b) Federal policy has established a national objective of substantially expanding United States commercial maritime capacity. Federal legislation introduced as the SHIPS for America Act proposed a strategic commercial fleet of 250 additional U.S.-flagged ships over a 10-year period. That proposal equates to an average of 25 vessels per year nationally. The planning objective of this Act is a production capacity of 25 to 40 vessels per year at a single qualified production complex, which is of the same order of magnitude as the national average pace of that proposal; the vessel mix under this Act may include smaller vessel classes not counted in that proposal. (c) The President of the United States has directed federal action intended to strengthen American shipbuilding, maritime infrastructure, maritime workforce capacity, and the domestic industrial base. (d) California possesses one of the largest and most important maritime transportation systems in the United States, and contains major commercial ports, transportation infrastructure, manufacturing capacity, engineering resources, financial institutions, universities, and labor markets capable of supporting expansion of the United States maritime industrial base. (e) The San Pedro Bay port complex, comprising the Port of Los Angeles and the Port of Long Beach, is one of the principal maritime gateways of the United States and represents a major concentration of national and international maritime commerce. It provides an existing foundation for expanded shipbuilding, ship repair, cargo movement, logistics, manufacturing, and maritime transportation. (f) The Port of Los Angeles reported approximately 10.2 million twenty-foot equivalent units (TEUs) of containerized cargo in calendar year 2025 and identified the combined San Pedro Bay port complex as supporting approximately 990,000 jobs in the five-county region. The existing maritime economic base therefore provides an established industrial and logistics environment upon which additional shipbuilding capacity may be developed. (g) California's ports require continuing investment in transportation connections, energy systems, industrial facilities, information systems, workforce capacity and physical infrastructure. (h) California's 2026-27 enacted state budget contains approximately $351.7 billion in state funds, including approximately $18.8 billion identified for transportation. A maritime industrial program should therefore be structured within the existing state capital-planning and transportation-financing framework rather than assuming unrestricted General Fund financing. (i) Assembly District 69 includes Avalon and Santa Catalina Island, Signal Hill, and portions of Long Beach and Carson. These locations provide a geographically connected policy area involving maritime transportation, port activity, logistics, tourism, transportation infrastructure, and economic development. (j) Shipbuilding is a strategic industrial activity requiring steel, aluminum, electrical systems, engines, propulsion systems, electronics, software, machinery, logistics, engineering, skilled labor and transportation infrastructure. (k) Modern shipbuilding can substantially increase production through modular construction, robotics, automated material movement, computer-controlled fabrication, digital engineering and integrated quality-control systems. Substantial automation infrastructure, including robotic fabrication, automated material handling, modular assembly systems, computer-integrated production management, advanced welding robotics, and digital twin modeling, is essential to achieve competitive commercial shipbuilding throughput at scale while maintaining high safety and quality standards. (l) Increased automation shall be used to increase California's productive capacity, worker safety, precision and competitiveness rather than as a substitute for responsible workforce development. Highly automated production lines shift employment toward engineering, robotics maintenance, software systems, quality control, logistics, and system supervision, creating higher-skill, higher-wage career pathways for California workers. (m) International cooperation with qualified allied and partner-country shipbuilding companies may provide access to established shipbuilding technology, production methods, workforce training, engineering capability, and capital. (n) South Korean shipbuilding companies, including companies affiliated with Hanwha, have established United States shipbuilding operations and demonstrated experience in the construction of vessels serving the United States commercial maritime market. The acquisition of Philly Shipyard by Hanwha Systems and Hanwha Ocean demonstrates an existing model in which a foreign strategic investor operates through a United States shipbuilding enterprise. Any future California project must independently comply with all applicable federal ownership, national-security, export-control, maritime, procurement, and foreign-investment requirements. (o) California has an interest in developing resilient supply chains involving Central America, Colombia, Mexico, Canada, and other qualified international suppliers where such trade is lawful and economically advantageous. (p) Any proposed Venezuelan-origin material, mineral, petroleum-derived product, or other commodity must remain subject to all applicable federal sanctions, export controls, import restrictions, customs requirements, national-security requirements, and licenses. Nothing in this Act is intended to authorize a transaction prohibited by federal law. (q) The State of California has an interest in evaluating whether additional shipbuilding, fabrication, transportation, and goods-movement infrastructure can be developed without impairing existing maritime, environmental, residential, commercial, military, or conservation uses. (r) A long-term transportation system connecting maritime facilities, industrial areas, manufacturing facilities, and existing transportation networks should be studied before construction is authorized. (s) A California industrial shipbuilding program should be structured so that public expenditures establish infrastructure and economic capacity while private capital carries a substantial portion of commercial production risk. (t) Public investment shall be measured against defined performance requirements, including private capital attracted, employment created, taxable economic activity, vessel production, infrastructure utilization and operating revenues. (u) The Legislature intends that this Act create an industrial framework capable of attracting private investment comparable to or greater than the direct public expenditure required to establish the program. (v) Japan, the world's third-largest shipbuilding nation, completed 358 vessels totaling approximately 10.1 million gross tons in 2025, approximately 14 percent of global completions by gross tonnage, across its entire national industry. A single new United States production complex should therefore be planned at a scale proportionate to demonstrated yard performance rather than at a scale approaching the output of a national industry. (w) Japan has adopted a road map to double its national shipbuilding output from approximately 9.1 million gross tons to approximately 18 million gross tons by 2035, supported by approximately 1 trillion yen (approximately $6.4 billion) in combined public and private investment. The capital scale of that program informs the capital framework of this Act. (x) To the knowledge of the Legislature, fully automated commercial shipbuilding has not been demonstrated at commercial scale. Leading yards are developing and deploying automation in specific processes, including welding, and in production planning and coordination. Automation deployment under this Act shall therefore be phased in accordance with demonstrated technology readiness. SECTION 3. PURPOSE The purposes of this Act are to: (a) Establish California as a major North American center for automated commercial shipbuilding. (b) Establish Long Beach and connected Southern California facilities as a potential United States West Coast center for commercial shipbuilding, ship repair, fabrication, maritime logistics, and related manufacturing. (c) Increase domestic vessel production capacity. (d) Develop a connected maritime-industrial corridor in Southern California. (e) Evaluate and facilitate the development of new or expanded shipbuilding facilities incorporating substantial automation infrastructure. (f) Encourage qualified United States companies and qualified allied or partner-country companies to establish manufacturing and shipbuilding operations in California. (g) Develop a California-controlled organizational structure capable of entering lawful public-private partnerships. (h) Increase California manufacturing employment. (i) Create new skilled technical occupations. (j) Develop workforce-training programs for shipbuilding, steel fabrication, welding, engineering, electrical systems, robotics, industrial automation, maritime operations, logistics, and transportation. (k) Increase demand for California-produced industrial components. (l) Develop a resilient international maritime supply chain. (m) Improve maritime infrastructure. (n) Improve transportation connections between shipyards, ports, rail facilities and suppliers. (o) Evaluate a high-capacity subterranean or otherwise grade-separated transportation system connecting maritime and industrial facilities. (p) Develop automated manufacturing systems that can be transferred to other California industries. (q) Increase California's capacity to construct, repair and maintain commercial vessels. (r) Attract private capital without making the State of California responsible for private commercial losses. (s) Coordinate California activities with applicable federal maritime and industrial policy. (t) Provide measurable public return on infrastructure investment, and establish measurable return-on-investment and financial-performance frameworks for public infrastructure investments supporting the program. (u) Create an industrial platform capable of continuing beyond individual state budget cycles. SECTION 4. DEFINITIONS For purposes of this Act: "Act" means the Pacific Gateway Shipbuilding, Automation and Maritime Industrial Corridor Act. "Program" means the California Pacific Gateway Shipbuilding and Maritime Automation Program established under this Act. "Authority" means the Pacific Gateway Development Authority established pursuant to this Act, or another legally authorized public entity designated by the Governor or Legislature to administer the Program. "Corridor" or "maritime industrial corridor" means the network of shipyards, suppliers, ports, transportation facilities, energy facilities, training institutions, warehouses, rail facilities, highways, airports, manufacturing facilities and related industrial property participating in the Program. "Pacific Gateway" means the network of California maritime, industrial, manufacturing, and transportation facilities developed pursuant to this Act. "Qualified shipyard" means a privately or publicly operated shipbuilding facility meeting production, safety, environmental, workforce and financial requirements established under this Act. "Shipbuilding facility" means a facility used for construction, assembly, conversion, repair, modernization, maintenance, or fabrication of vessels. "Maritime industrial facility" means a facility supporting shipbuilding, marine engineering, steel fabrication, component manufacturing, logistics, vessel repair, or related industrial activity. "Automated shipbuilding" means the use of computer-controlled machinery, robotics, automated material movement, digital engineering, machine-assisted fabrication, machine vision, automated inspection or related technology in vessel construction. "Automation infrastructure" means the integrated systems of robotic fabrication, automated material handling, modular assembly lines, computer-integrated manufacturing, digital twin modeling, automated quality inspection, advanced welding robotics, automated coating systems, and related digital production-management technologies employed to achieve high-throughput commercial shipbuilding. "Commercial vessel" means a nonmilitary vessel constructed principally for commercial transportation, cargo, passenger, service, research, industrial, energy, port or other lawful commercial purposes. "Private capital" means equity, debt, retained earnings, institutional investment, equipment financing or other nonstate financing committed to an eligible project. "Qualified infrastructure" includes shipyard property, fabrication facilities, cranes, dry docks, marine terminals, rail connections, roads, electrical infrastructure, water systems, telecommunications, industrial automation systems, energy systems and other infrastructure directly supporting the Program. "Qualified foreign partner" means a company organized outside the United States that is not subject to applicable United States sanctions; is not owned or controlled by a prohibited person or government; can satisfy applicable United States national-security, export-control, and foreign-investment requirements; can demonstrate substantial shipbuilding, manufacturing, engineering, or maritime experience; and executes all required agreements concerning technology, intellectual property, security, ownership, labor, and compliance. "Qualified U.S. operating company" means a corporation, limited liability company, partnership, or other lawful business entity organized under the laws of the United States and capable of conducting the proposed activities in compliance with applicable federal and California law. "Subterranean transit line" means a grade-separated transportation system constructed below ground, including a tunnel, rail system, automated transit system, high-speed passenger system, or freight-capable transportation system, subject to applicable engineering, safety, and environmental requirements. SECTION 5. CALIFORNIA PACIFIC GATEWAY SHIPBUILDING AND MARITIME AUTOMATION PROGRAM (a) The State shall establish the California Pacific Gateway Shipbuilding and Maritime Automation Program, for the purpose of evaluating and facilitating shipbuilding; ship repair; vessel modernization; steel fabrication; marine component manufacturing; maritime engineering; port infrastructure; rail and goods movement; workforce development; maritime technology; logistics; international supply-chain development; transportation infrastructure; research and development; and substantial automation infrastructure. (b) The Program shall prioritize projects capable of increasing California's contribution to the national maritime industrial base through advanced automated production methods. (c) The Program shall operate as a coordinated economic-development and infrastructure program rather than as a single state-owned shipyard. (d) The Program shall permit participation by: Private shipbuilders. Manufacturers. Port authorities. Municipal governments. Counties. Transportation agencies. Labor organizations. Community colleges. Universities. Research institutions. Technology companies. Energy providers. Logistics companies. Financial institutions. Qualified allied and partner-country companies. Other qualified entities. (e) State participation shall prioritize infrastructure, financing mechanisms, site preparation, workforce development, permitting coordination and transportation improvements. (f) Commercial production shall remain subject to private contracts, market demand, applicable federal requirements and normal commercial risk. SECTION 6. DEVELOPMENT AUTHORITY (a) The Legislature authorizes the establishment of a public development authority, joint powers authority, public benefit corporation, or other legally appropriate public entity for implementation of the Program. (b) The Authority shall not be an operating shipbuilding company. Its principal function shall be to coordinate public infrastructure, financing, permitting, property development, workforce programs, automation-infrastructure standards, and public-private partnerships. (c) The Authority may: Conduct feasibility studies. Acquire or lease property where legally authorized. Enter into development agreements and public-private partnerships. Apply for federal and state grants and loans. Coordinate with ports and local governments. Issue or facilitate authorized revenue-backed financing. Contract for engineering and feasibility studies. Establish competitive procurement procedures. Negotiate development agreements with qualified companies. Establish performance requirements, including automation and production milestones. Require financial guarantees where appropriate. Require reporting by participating private entities. SECTION 7. PRIVATE OPERATING STRUCTURE The Legislature recognizes the following potential organizational model as a conceptual commercial structure that does not constitute a statutory ownership requirement: Fiveo1 -> U.S. Operating Company -> California Pacific Gateway Shipbuilding Joint Venture -> Separate operating subsidiaries for: shipyard operations; steel fabrication; marine fabrication; vessel repair; component manufacturing; logistics; transportation; transit infrastructure; automation systems integration. A public entity shall not transfer governmental authority to a private company. Any private company participating in the Program shall remain subject to all applicable procurement, labor, environmental, tax, securities, corporate, maritime, and regulatory requirements. SECTION 8. UNITED STATES OWNERSHIP AND CONTROL Any project receiving state financial assistance or public property under this Act shall establish ownership and control requirements appropriate to the project. For projects involving national-security-sensitive facilities, the project shall comply with applicable federal requirements concerning national security, foreign ownership, foreign control, foreign influence, classified information, export controls, defense production, maritime security, port security, customs, sanctions, and transportation security. Nothing in this section shall be interpreted to establish a state standard that conflicts with federal law. SECTION 9. QUALIFIED INTERNATIONAL SHIPBUILDING PARTNERS The Authority may solicit participation from qualified shipbuilding companies located in allied or partner nations. Potential partners may include companies headquartered in South Korea, Japan, Finland, Canada, the United Kingdom, Australia, or other nations determined by the appropriate federal authorities and the Authority to be appropriate partners. A proposed partnership with a foreign company shall be evaluated according to technical capability, financial capacity, shipbuilding experience, United States operations, workforce development, technology-transfer terms (including automation technology), security requirements, intellectual-property rights, supply-chain resilience, and federal approval requirements. SECTION 10. HANWHA AND OTHER STRATEGIC PARTNERS The State may evaluate proposals involving Hanwha or another qualified international shipbuilding enterprise. No company shall receive an exclusive right under this Act. Any project shall be awarded through a transparent competitive or otherwise legally authorized process. The State may negotiate directly with a qualified partner only where permitted by applicable procurement law and where a direct negotiation is independently justified. SECTION 11. GEOGRAPHIC CORRIDOR The initial geographic corridor shall include, but not be limited to: Primary Industrial Area: Long Beach San Pedro Wilmington Terminal Island Port of Los Angeles Port of Long Beach Signal Hill Carson Supporting Maritime and Transportation Area: Avalon Santa Catalina Island Los Angeles County Orange County Inland Southern California logistics facilities Rail-connected manufacturing facilities Qualified California suppliers and satellite facilities The State may designate additional sites where necessary to prevent excessive concentration of manufacturing, transportation or energy infrastructure at a single location. SECTION 12. SHIPYARD SITE EVALUATION AND AUTOMATION INFRASTRUCTURE (a) The Authority shall evaluate potential sites for a California shipbuilding complex. The evaluation shall include water depth, existing marine infrastructure, dry-dock potential, heavy-lift capability, rail access, highway access, workforce availability, electrical power (including capacity for high-demand automation systems), water availability, environmental constraints, seismic conditions, flood and sea-level-rise risk, port security, existing land uses, adjacent communities, construction cost, federal ownership and jurisdiction, long-term expansion capability, and suitability for large-scale automation infrastructure. (b) The primary industrial development area shall be evaluated in the greater Long Beach-Los Angeles maritime region. Avalon and Santa Catalina Island shall be treated separately as a geographically sensitive maritime, transportation, and research location rather than presumed to be the primary location for heavy industrial shipbuilding. (c) Substantial automation infrastructure shall be a core design requirement for any major shipbuilding facility developed under this Act. The Authority shall require participating developers to demonstrate plans for automated cutting, automated welding, automated material movement, modular assembly, robotic inspection, computerized production management, and digital twin integration capable of supporting high-volume commercial vessel production. (d) The site evaluation shall document, for each candidate site, available water depth at berth and channel, existing dry-dock and floating-dock capacity, available contiguous land area, and the land area required for the planned production capacity. SECTION 13. INDUSTRIAL AUTOMATION SYSTEM The Program shall establish an integrated industrial automation architecture. The architecture may include: (a) Robotic welding. (b) Automated steel and aluminum cutting. (c) Computer-controlled forming. (d) Robotic surface preparation. (e) Automated painting and coating systems where environmentally permitted. (f) Automated component transportation. (g) Autonomous or remotely supervised industrial vehicles. (h) Automated cranes and lifting systems. (i) Machine-vision inspection. (j) Three-dimensional scanning. (k) Automated dimensional verification. (l) Digital production records. (m) Computer-aided engineering. (n) Digital manufacturing models and digital twin modeling. (o) Automated inventory management. (p) Automated procurement and material tracking. (q) Automated production scheduling. (r) Predictive maintenance. (s) Industrial sensor networks. (t) Automated energy monitoring. (u) Cybersecurity systems. (v) Production-control systems. (w) Digital quality-control systems. (x) Automated documentation of vessel construction. (y) Other technologies capable of increasing production capacity, worker safety, quality or efficiency. Automation deployment shall be phased in accordance with demonstrated technology readiness. Qualified shipyards shall identify, for each automated process, whether the technology is commercially proven, in pilot deployment, or in development, and shall maintain conventional production capability for processes not yet proven. SECTION 14. MODULAR SHIP PRODUCTION (a) Qualified shipyards shall be encouraged to use modular construction. (b) Vessel construction may be divided into standardized production stages, including: Engineering. Material preparation. Plate and structural fabrication. Module construction. Mechanical installation. Electrical installation. Interior systems. Propulsion installation. Systems testing. Module integration. Dockside testing. Sea trials. Delivery. (c) Standardized production shall permit multiple vessels to be constructed simultaneously rather than requiring each vessel to occupy the entire production sequence independently. (d) Production lines may include hull modules, engine and propulsion modules, electrical systems, interior modules, pipe and mechanical systems, automated hull assembly, painting and coating, and final integration and testing. (e) The State shall encourage standardized interfaces that permit qualified California manufacturers to supply repeatable components. SECTION 15. SHIPYARD INFRASTRUCTURE Eligible infrastructure may include: (a) Dry docks. (b) Floating docks. (c) Ship lifts. (d) Marine construction berths. (e) Automated fabrication buildings. (f) Steel-processing facilities. (g) Aluminum-processing facilities. (h) Component manufacturing facilities. (i) Electrical substations. (j) Industrial microgrids. (k) Shore power. (l) Energy-storage systems. (m) Hydrogen or other alternative-fuel infrastructure where legally and technically appropriate. (n) Rail spurs. (o) Freight yards. (p) Heavy-haul road improvements. (q) Port access improvements. (r) Crane systems. (s) Automated storage systems. (t) Telecommunications. (u) Secure industrial data infrastructure. (v) Water and wastewater infrastructure. (w) Fire protection. (x) Emergency response infrastructure. (y) Worker training facilities. (z) Research and engineering facilities. SECTION 16. AUTOMATED LOGISTICS NETWORK The Program shall establish an integrated logistics system capable of coordinating: Raw-material delivery. Steel and aluminum movement. Component warehousing. Container movement. Rail transportation. Heavy trucking. Marine transportation. Shipyard inventory. Production scheduling. Finished-vessel movement. Export logistics. The State shall encourage systems capable of providing real-time visibility of material movement from supplier through vessel completion. SECTION 17. ENERGY INFRASTRUCTURE (a) The Program shall develop a long-term industrial energy plan, including the electrical capacity required for high-demand robotic and automation systems. (b) Projects may include: Electrical-grid upgrades. On-site generation. Battery storage. Microgrids. Shore power. Industrial charging infrastructure. Energy-management systems. Renewable generation where economically appropriate. Backup generation. Resilient communications and control systems. (c) Industrial energy infrastructure shall be designed to prevent production interruption caused by localized grid failures where technically and economically feasible. (d) The industrial energy plan shall quantify the peak and annual electrical demand of the planned production complex, the available grid capacity at each candidate site, the interconnection upgrades required, and the expected industrial electricity cost compared with competing shipbuilding regions. SECTION 18. WORKFORCE DEVELOPMENT AND AUTOMATION TRAINING (a) The Program shall establish a California Maritime Manufacturing Workforce Initiative. The Authority shall coordinate with community colleges, vocational schools, trade unions, apprenticeship programs, universities, maritime academies, private employers, and workforce-development agencies. (b) Training shall include: Welding. Pipefitting. Electrical systems. Machining. Robotics. Industrial controls. Industrial automation and automated production systems. Marine engineering. Naval architecture. Heavy fabrication. Computer-aided manufacturing. Machine maintenance. Industrial cybersecurity. Quality control. Nondestructive testing. Automated inspection. Crane and heavy-equipment operation. Marine systems. Ship repair. Logistics and port operations. Safety. Shipyard management. (c) Community colleges and technical institutions may establish accelerated programs aligned with qualified shipyard employment. (d) Existing experienced maritime workers shall be eligible for automation-transition training. (e) The Program shall establish measurable employment and training targets, with particular emphasis on preparing workers for automated shipyard environments. (f) The objective shall be to increase the number of highly skilled California maritime workers while increasing the productive output of each worker through automation. (g) The Initiative shall establish annual training-completion targets by occupation, document the existing California training capacity for welders, electricians, machinists and robotics and controls technicians, and document wage benchmarks, including California prevailing wage requirements, compared with competing shipbuilding regions. SECTION 19. LABOR STANDARDS Any project receiving state financial assistance shall comply with all applicable California labor laws. Contracts shall establish requirements concerning prevailing wage, workplace safety, apprenticeship utilization where applicable, worker classification, wage reporting, workers' compensation, nondiscrimination, and lawful employment practices. The Authority may establish additional labor requirements consistent with state and federal law. SECTION 20. PRIVATE CAPITAL REQUIREMENT (a) The State shall prioritize projects demonstrating substantial private investment. (b) A qualified capital project receiving state infrastructure assistance should, where commercially feasible, demonstrate a minimum private-to-state capital ratio of 1:1. (c) Major production facilities should target a private-to-public capital ratio of 1.5:1 or greater. (d) The Legislature may authorize exceptions for strategically necessary public infrastructure where the infrastructure has independent public transportation, energy, safety or economic-development value. (e) State funds shall not be used to guarantee commercial profitability. SECTION 21. FINANCING The Program may use, subject to existing law and legislative authorization: (a) General Fund appropriations. (b) Special funds. (c) Transportation funds. (d) Infrastructure bonds. (e) Revenue bonds. (f) Lease-revenue financing. (g) Federal grants. (h) Federal loans. (i) State loans. (j) Port financing. (k) Local government financing. (l) Qualified tax-exempt financing. (m) Industrial development bonds where legally available. (n) Public-private partnerships. (o) Industrial development financing. (p) Private equity. (q) Commercial and private debt. (r) Equipment financing. (s) Other lawful sources. No obligation authorized under this Act shall constitute a state guarantee of private commercial debt unless expressly authorized by subsequent legislation. The State shall not guarantee the profitability of a private shipbuilding enterprise. SECTION 22. CALIFORNIA INFRASTRUCTURE FINANCING The Authority shall evaluate eligibility for financing through the California Infrastructure and Economic Development Bank and other state financing programs. Eligible public infrastructure may include, where authorized, port facilities, public transit, goods-movement infrastructure, transportation, power infrastructure (including capacity required for automation systems), communications, economic-development facilities, environmental mitigation, and related public infrastructure. SECTION 23. FEDERAL MATCHING FUNDS The Authority shall seek federal participation in projects consistent with applicable federal programs. Federal applications shall identify the project as supporting American shipbuilding, maritime industrial capacity, supply-chain resilience, port infrastructure, transportation infrastructure, workforce development, national economic security, and national maritime security. The Authority shall coordinate applications with appropriate federal agencies. SECTION 24. PERFORMANCE-BASED PUBLIC INVESTMENT (a) State assistance shall be tied to measurable milestones. Any public-private development agreement shall establish measurable performance requirements. (b) Eligible agreements may require: Minimum private investment. Minimum employment. Minimum production capacity. Completion of infrastructure. Construction milestones. Automation deployment milestones. Environmental compliance. Workforce-training commitments. California procurement targets. Production milestones. Financial reporting. Safety performance. Security requirements. Energy-performance requirements. Financial guarantees. Termination provisions. Annual economic reporting. (c) Failure to meet material performance requirements may result in withholding, reduction, restructuring or recovery of state assistance, termination, repayment, loss of incentives, or other lawful remedies to the extent permitted by law. SECTION 25. PRODUCTION OBJECTIVE (a) The Program shall establish the following long-term planning objective for annual vessel capacity: Development Stage Annual Vessel Capacity Initial demonstration 5 Phase II 10 Phase III 20 Phase IV 30 Full industrial target 40 (b) The planning range is 25 to 40 vessels built in a single year at a single qualified production complex, with 40 vessels as the upper planning capacity. It is not a statutory requirement that the State purchase vessels annually, and not a mandatory production quota. Actual production shall depend upon commercial contracts, vessel type, size, market conditions, financing, environmental approvals, shipyard capacity, federal requirements and available labor. (c) At 250 operating days per year, 40 vessels annually equals 0.16 vessels per operating day, or approximately one completed vessel every 6.25 operating days, and 25 vessels annually equals 0.10 vessels per operating day. Production at this scale would require multiple parallel production lines and modular production rather than a single conventional keel-to-delivery shipyard. (d) The year-by-year ramp toward the full industrial target is set out in Section 54. SECTION 26. VESSEL CATEGORIES The Program may support production of: Cargo vessels. Feeder vessels. Short-sea vessels. Passenger vessels. Ferries. Research vessels. Workboats. Port service vessels. Offshore support vessels. Emergency-response vessels. Commercial transport vessels. Specialized industrial vessels. Electrified vessels. Low-emission vessels. Other lawful commercial vessels. Military and national-defense procurement shall remain governed by applicable federal authority and shall not be implied by this Act. Before any production, employment, steel, energy or economic target is adopted, the Authority shall establish the planned vessel mix and shall document the average deadweight tonnage, gross tonnage, steel tonnage and production man-hours per vessel for each vessel class selected. SECTION 27. CALIFORNIA SUPPLY CHAIN The Program shall establish a supplier-development program to increase California production of: Structural steel. Aluminum products. Electrical systems. Batteries. Motors. Propulsion components. Pumps. Valves. Marine electronics. Sensors. Automation equipment. Software. Communications equipment. Safety systems. Interior components. Paint and coatings. Mechanical components. Industrial machinery. Priority may be given to suppliers that establish or expand California production facilities. SECTION 28. STEEL AND FABRICATION SUPPLY CHAIN The Authority shall conduct a supply-chain study covering California steel, United States steel, Canadian steel, Mexican steel, Central American materials, Colombian materials, and other qualified international sources. The study shall evaluate price, availability, quality, transportation cost, tariff exposure, customs, sanctions, political risk, supply continuity, environmental requirements, domestic-content requirements, and federal procurement requirements. The objective shall be to establish a diversified supply chain rather than dependence upon one country or supplier. The study shall quantify the steel and aluminum tonnage required per vessel class and per year, identify available sources of shipbuilding-grade plate from California and other domestic mills, and document the import dependence of the planned production complex. SECTION 29. VENEZUELAN MATERIALS No provision of this Act shall authorize the importation, purchase, financing, transportation, processing, or use of Venezuelan-origin commodities where the transaction is prohibited by federal law. A Venezuelan supply arrangement may be considered only if the transaction is lawful under federal law, all applicable Office of Foreign Assets Control (OFAC) requirements are satisfied, all required licenses or authorizations have been obtained, the parties have completed sanctions screening, the transaction complies with applicable customs requirements, export controls, and anti-money-laundering requirements, the transaction does not involve a prohibited person, and federal agencies with jurisdiction have not prohibited the transaction. The Authority shall not represent that state legislation itself authorizes a Venezuelan transaction. SECTION 30. INTERNATIONAL MARITIME CORRIDOR The Authority shall study an international maritime supply corridor connecting California with qualified suppliers and industrial partners in Mexico, Central America, Colombia, South America, the Caribbean, Asia, Europe, and other qualified markets. The corridor may include ocean shipping, containerized cargo, bulk cargo, breakbulk cargo, rail, truck, warehousing, transloading, and customs facilities. All transportation shall remain subject to federal maritime law. SECTION 31. JONES ACT AND FEDERAL MARITIME LAW Nothing in this Act shall amend the Merchant Marine Act of 1920, waive the Jones Act, establish a state exemption from federal maritime law, authorize a foreign-built vessel to engage in domestic coastwise trade where federal law prohibits it, establish federal vessel documentation, establish federal vessel citizenship, or modify federal customs requirements. Projects shall be designed so that domestic transportation requirements can be satisfied independently from international transportation requirements. SECTION 32. RESEARCH AND DEVELOPMENT The State may support applied research involving: (a) Automated ship construction. (b) Digital shipyard systems. (c) Robotics. (d) Industrial machine vision. (e) Advanced materials. (f) Energy-efficient propulsion. (g) Marine electrification. (h) Automated inspection. (i) Industrial cybersecurity. (j) Maritime logistics. (k) Shipyard safety. (l) Production optimization. Research agreements shall require measurable deliverables and shall avoid unnecessary duplication of existing state, federal or private research programs. SECTION 33. PERMITTING AND PROJECT COORDINATION The State shall establish an interagency coordination process for qualified projects. The process may coordinate: Environmental review. Transportation approvals. Energy approvals. Water requirements. Local permitting. Port approvals. Rail access. Road access. Utility connections. Workforce programs. Financing. Nothing in this Act shall exempt a project from applicable federal or state environmental, labor, safety, maritime, coastal, building, water-quality or other legal requirements. SECTION 34. ENVIRONMENTAL REQUIREMENTS (a) All projects authorized or assisted pursuant to this Act shall comply with applicable environmental laws, including the California Environmental Quality Act, National Environmental Policy Act, California Coastal Act, federal Clean Water Act, federal Clean Air Act, Endangered Species Act, Marine Mammal Protection Act, and applicable port, state, and local environmental requirements. (b) Nothing in this Act shall exempt a project from environmental review unless a future statute expressly and lawfully provides an exemption. (c) The Program shall encourage: Electrified equipment. Reduced industrial emissions. Shore power. Energy-efficient production. Water recycling. Material recycling. Low-emission transportation. Responsible hazardous-material handling. Noise controls. Coastal-resource protection. Efficient use of existing industrial land. (d) Automation infrastructure shall not be used to bypass environmental requirements. SECTION 35. TRANSPORTATION CONNECTIONS The Program shall identify transportation bottlenecks affecting shipbuilding production. Eligible improvements may include: Rail. Freight roads. Bridges. Interchanges. Port gates. Heavy-haul corridors. Marine access. Intermodal facilities. Automated logistics infrastructure. Projects shall prioritize infrastructure capable of serving multiple industrial users. SECTION 36. SUBTERRANEAN PACIFIC GATEWAY TRANSIT SYSTEM (a) The Authority shall conduct a feasibility study for a high-capacity grade-separated transportation system. (b) The study shall evaluate possible connections between the Port of Long Beach, Port of Los Angeles, Long Beach industrial areas, Signal Hill, Carson, rail facilities, manufacturing facilities, logistics facilities, airport connections, and other major transportation nodes. (c) The study shall determine whether an underground transportation system is technically and economically preferable to surface rail, elevated rail, conventional freight rail, automated transit, or other alternatives. (d) No construction shall begin solely on the basis of this Act. SECTION 37. TRANSIT FEASIBILITY STUDY The feasibility study required by Section 36 shall evaluate geological conditions, seismic risk, tunnel depth, tunnel diameter, construction method, passenger capacity, freight capacity, emergency evacuation, ventilation, fire protection, security, power requirements, station locations, property acquisition, construction staging, operating costs, maintenance costs, ridership, freight demand, revenue, environmental impacts, community impacts, and alternative transportation systems. The study shall include a preliminary capital-cost range and lifecycle-cost analysis. SECTION 38. CATALINA ISLAND AND AVALON (a) Avalon and Santa Catalina Island may participate as a supporting maritime, transportation, communications, research, training, emergency-response and logistics location. (b) Nothing in this Act shall require construction of a heavy industrial shipyard on Santa Catalina Island. Nothing in this section authorizes large-scale industrial shipbuilding within Avalon or Santa Catalina Island without separate site-specific environmental, coastal, municipal and regulatory approvals. (c) Any proposed project on Santa Catalina Island shall account for environmental protection, island water and power limitations, transportation limitations, conservation, existing communities, tourism, marine habitat, emergency services, historic resources, land ownership, and coastal requirements. (d) The island component may include: Maritime communications. Emergency-response capability. Marine transportation and passenger transportation. Tourism-related transportation. Research and testing. Workforce education. Digital infrastructure. Small-vessel operations. Logistics support and emergency logistics. Limited support facilities. Environmental monitoring. Maritime technology testing where permitted. SECTION 39. DATA AND DIGITAL PRODUCTION SYSTEM Each participating major shipyard shall be encouraged to maintain a secure digital production record. The system may include: Engineering records. Component identification. Material origin. Production stage. Inspection records. Quality-control results. Maintenance records. Warranty information. Vessel configuration. Repair history. Systems shall comply with applicable privacy, cybersecurity, export-control and commercial-confidentiality requirements. SECTION 40. CYBERSECURITY AND SECURITY PROGRAM (a) Major automated facilities shall maintain cybersecurity programs appropriate to industrial control systems. Security requirements shall include, where applicable: (1) Network segmentation. (2) Access controls. (3) Authentication. (4) Backup systems. (5) Incident response. (6) Industrial-control monitoring. (7) Recovery procedures. (8) Protection of proprietary engineering data. (9) Protection of critical infrastructure systems. (b) The Authority shall establish a security program addressing physical security, cybersecurity (including protection of automation control systems and digital production data), port security, supply-chain security, foreign ownership, foreign influence, export controls, sensitive technology, critical infrastructure, and protection of government information. Federal security requirements shall control where federal jurisdiction applies. SECTION 41. PORT COORDINATION The Authority shall coordinate, where appropriate, with the Port of Long Beach, Port of Los Angeles, local governments, transportation agencies, rail operators, federal maritime agencies, Coast Guard, Maritime Administration, Department of Transportation, Department of Commerce, and other agencies with jurisdiction. No provision of this Act shall transfer powers belonging to an existing port authority or local government. SECTION 42. FEDERAL MARITIME POLICY The Legislature encourages the federal government to continue rebuilding the United States commercial shipbuilding industry, expand the U.S.-flagged commercial fleet, increase federal shipbuilding financing, expand maritime workforce programs, support allied shipbuilding partnerships, support domestic steel and marine fabrication, improve port infrastructure, establish predictable maritime industrial policy, support California maritime infrastructure projects, and consider California projects for federal maritime funding. The Legislature requests that Congress and the President evaluate the Pacific Gateway as a potential West Coast component of national maritime industrial policy. SECTION 43. FEDERAL LEGISLATIVE REQUEST AND COMPANION REQUEST (a) The Legislature may transmit a resolution or formal communication to California's congressional delegation requesting federal legislation or administrative action to support commercial shipbuilding in California, a strategic U.S.-flagged commercial fleet, United States shipyard financing, qualified allied shipbuilding partnerships, maritime workforce development, port infrastructure, domestic steel and fabrication, and appropriate federal treatment for qualifying Pacific Gateway projects. This section does not itself enact federal law. (b) Because California cannot establish federal maritime policy by state statute, the Legislature should transmit a companion request to Congress seeking federal legislation supporting the Pacific Gateway, including authority and funding for United States commercial shipbuilding, U.S.-flagged vessels, shipyard modernization, maritime workforce development, allied shipbuilding partnerships, port infrastructure, strategic materials, domestic steel production, maritime transportation, federal ship financing, and national supply-chain resilience, while expressly preserving federal control over sanctions, foreign commerce, customs, maritime law, national defense, and vessel documentation. SECTION 44. INTERNATIONAL PARTNERSHIP PRINCIPLES International participation shall be based upon reciprocal commercial benefit, lawful trade, national-security compatibility, transparency, financial accountability, intellectual-property protection, workforce development, supply-chain resilience, technological cooperation (including automation technology transfer under appropriate controls), and long-term economic benefit. No foreign partner shall receive governmental authority merely because it participates in the Program. SECTION 45. PROCUREMENT (a) Public procurement under this Act, including state-funded infrastructure, shall comply with applicable California procurement law, federal procurement requirements, competitive bidding requirements, conflict-of-interest requirements, public-record requirements, prevailing-wage requirements, and environmental requirements. (b) Contracts shall require: Competitive pricing. Performance requirements. Financial controls. Auditable expenditures. Construction milestones. Safety compliance. Environmental compliance. Conflict-of-interest controls. (c) The State shall not select a foreign company solely because of its nationality. SECTION 46. CONFLICTS OF INTEREST Any person participating in the administration of this Program shall comply with applicable California conflict-of-interest laws. A private sponsor or proponent may submit proposals but shall not exercise governmental authority. Private participants shall disclose material financial interests as required by law. SECTION 47. PROPERTY The Authority may evaluate acquisition, leasing, or use of property necessary for public infrastructure. No private property shall be acquired except pursuant to applicable California law. The Authority shall prioritize existing industrial land, existing port property, brownfield or redevelopment opportunities, underutilized industrial property, and existing transportation corridors. SECTION 48. TECHNOLOGY AND INTELLECTUAL PROPERTY Public-private agreements shall specify ownership and licensing rights concerning ship designs, engineering, software, manufacturing processes, robotics, automation systems, proprietary technology, patents, and technical data. Government funding shall not automatically transfer private intellectual property to the State unless expressly provided by contract or law. SECTION 49. NO FEDERAL PREEMPTION Nothing in this Act shall be interpreted to regulate foreign commerce in a manner preempted by federal law, regulate interstate commerce in a manner prohibited by the Constitution, modify federal maritime law, modify federal sanctions, modify federal immigration law, modify federal customs law, modify federal defense procurement, modify federal export controls, or modify federal vessel documentation requirements. SECTION 50. NO SANCTIONS AUTHORIZATION No state permit, contract, grant, bond, loan, or development agreement issued under this Act shall constitute authorization by the State of California to conduct a transaction prohibited under federal sanctions law. All participants shall independently determine and document their federal compliance obligations. SECTION 51. ECONOMIC DEVELOPMENT TARGET (a) The Program shall seek to generate economic activity exceeding direct public expenditures. (b) The Legislature establishes the following planning benchmark: at least $3 of private capital and economic activity for every $1 of direct state infrastructure investment. This benchmark shall be measured separately from broader indirect economic multipliers, and separately from the private-to-public capital ratio established in Sections 20 and 53. (c) The Authority shall distinguish projected benefits from verified results. SECTION 52. FIVE-YEAR CAPITAL PLAN The initial planning framework for public capital shall be: Category Planning Allocation Shipyard site and marine infrastructure $1.10 billion Transportation and rail infrastructure $0.55 billion Energy and electrical infrastructure $0.40 billion Automation and industrial technology $0.40 billion Workforce and training $0.20 billion Research and engineering $0.12 billion Environmental and permitting programs $0.08 billion Program administration, auditing and contingency $0.15 billion Total Initial Public Capital Framework $3.00 billion The amounts constitute a planning authorization framework, not an automatic appropriation. Actual appropriations shall be determined through the annual budget process and separate legislative authorization. The transportation allocation funds surface transportation, rail and goods-movement connections and the feasibility studies required by Sections 36 and 37. It does not fund construction of a subterranean transit line, which would require separate cost determination, environmental review and legislative authorization following completion of the feasibility study. The Authority shall compare the capital framework with the capital cost of comparable shipyard expansion and construction programs, including the national program of Japan described in Section 2(w), and shall report any material variance. The framework shall be revised if site-specific engineering shows that a facility of the planned capacity cannot be constructed within it. SECTION 53. PRIVATE CAPITAL TARGET (a) The Program shall establish an initial private-investment target of $4 billion or more. (b) The combined initial public and private development target shall therefore be approximately $7.0 billion, consisting of $3.0 billion in public capital and $4.0 billion in private capital, a private-to-public ratio of approximately 1.33 to 1. (c) Private investment may include shipyards, machinery, buildings, production systems, supplier facilities, energy systems, logistics facilities, engineering operations and working capital. (d) Any partner proposing private capital shall identify its source. SECTION 54. PRODUCTION AND REVENUE MODEL (a) For planning purposes, the Program shall use a standard vessel class with an average contract value of $55 million, within a planning range of $50 million to $60 million, and the following ten-year production trajectory, measured from the date commercial production begins under the Program's first qualified shipyard agreement: Year Vessels Delivered Modeled Production Revenue at $55M Average 1 0 $0 2 2 - 4 $0.11B - $0.22B 3 6 - 10 $0.33B - $0.55B 4 12 - 18 $0.66B - $0.99B 5 18 - 26 $0.99B - $1.43B 6 24 - 32 $1.32B - $1.76B 7 30 - 36 $1.65B - $1.98B 8 34 - 38 $1.87B - $2.09B 9 38 - 40 $2.09B - $2.20B 10 40 $2.20B Ten-year total: 204 - 244 vessels; $11.2B - $13.4B (b) These figures are a legislative economic-planning model and are not guaranteed sales forecasts. Actual revenue will vary substantially according to vessel size, specification, propulsion, equipment, financing and contract value. (c) Before any employment or economic figure is adopted as a Program target, the Authority shall establish a standard vessel class and an estimated average vessel value from current newbuilding price data for the selected vessel types. For illustration, annual production value at 40 vessels would be approximately $2.0 billion at $50 million per vessel, $2.2 billion at $55 million, and $2.4 billion at $60 million. Larger vessel classes would reduce annual vessel counts and require proportionally greater facilities and capital than the framework in Sections 52 and 53 provides. SECTION 55. OPERATING PROFIT AND LOSS MODEL At full production capacity of 40 vessels annually: Illustrative annual revenue: 40 vessels x $55 million average contract value = $2.20 billion. Illustrative annual operating costs: Expense Annual Estimate Direct materials $0.80B Direct production labor $0.45B Engineering and design $0.14B Automation and maintenance $0.12B Energy and utilities $0.09B Logistics $0.10B Administration $0.08B Insurance and compliance $0.05B Other production costs $0.15B Estimated operating cost $1.98B Illustrative operating result: Revenue: $2.20B Operating cost: $1.98B Operating profit: $0.22B Operating margin: approximately 10 percent. A mature industrial operating margin of approximately 8 to 10 percent represents the planning range, consistent with the margins of established commercial shipyards in favorable years, and is not a guaranteed result. At an 8 percent margin, estimated annual operating profit would be $176 million. At a 10 percent margin it would be $220 million. These figures are illustrative planning estimates and are not guarantees of commercial profitability. SECTION 56. PERMANENT EMPLOYMENT PLANNING ESTIMATE (a) At full production, a Pacific Gateway shipbuilding and maritime-industrial complex designed for approximately 40 vessel deliveries annually shall be planned for approximately 3,000 to 5,000 direct and integrated Pacific Gateway jobs, including a shipyard workforce of approximately 1,800 to 3,000. This range is consistent with the direct labor, engineering, maintenance and administrative cost categories of the model in Section 55. (b) Supplier, logistics and induced employment is planned at approximately 6,000 to 13,500 additional jobs, for a total supported employment planning range of approximately 9,000 to 18,500 jobs. The range applies a multiplier of 3.0 to 3.7 total supported jobs per direct job. The upper figure reflects the national ratio reported by the Maritime Administration for 2019, which counted approximately 107,000 people directly employed by United States private shipyards and approximately 393,390 total direct, indirect, and induced jobs supported, or approximately 3.7 total jobs per direct shipyard job. The lower figure reflects the expectation that automation will reduce direct labor intensity. That data describes the existing United States shipbuilding and repair industry as a whole and not a single automated production complex. (c) At the central direct-employment estimate of 4,000, total supported employment at the midpoint multiplier of 3.35 is approximately 13,400 jobs, or approximately 335 supported jobs per annual vessel of production. This figure measures supported employment across the entire industrial ecosystem and does not represent the number of people permanently employed per vessel. (d) Estimated employment by annual production level: Vessels per Year Direct and Integrated Jobs Total Supported Jobs 10 1,200 - 2,000 3,600 - 7,400 20 2,000 - 3,200 6,000 - 11,800 30 2,600 - 4,200 7,800 - 15,500 40 3,000 - 5,000 9,000 - 18,500 50 3,600 - 6,000 10,800 - 22,200 (e) These figures are planning estimates and not employment forecasts supported by an engineering production model. They require validation through project-specific economic studies. SECTION 57. CONSTRUCTION-PHASE EMPLOYMENT PLANNING ESTIMATE Construction of the shipyard, maritime infrastructure, fabrication facilities, warehouses, power systems, docks, cranes, automated production equipment, transportation infrastructure, and associated public infrastructure could generate approximately 6,000 to 12,000 temporary direct construction jobs plus approximately 4,000 to 8,000 indirect and induced jobs, for an estimated 10,000 to 20,000 total construction-related jobs during peak development. These jobs would not all exist simultaneously for the entire construction period. SECTION 58. TEN-YEAR EMPLOYMENT TRAJECTORY For planning purposes, the Program may use the following development trajectory, which corresponds to the production trajectory in Section 54 and applies the 3.0 to 3.7 supported-jobs multiplier of Section 56: Year Vessels per Year Direct and Integrated Jobs Total Supported Jobs 1 0 500 - 1,000 1,500 - 3,700 2 2 - 4 800 - 1,500 2,400 - 5,600 3 6 - 10 1,200 - 2,000 3,600 - 7,400 4 12 - 18 1,800 - 2,800 5,400 - 10,400 5 18 - 26 2,200 - 3,500 6,600 - 13,000 6 24 - 32 2,600 - 4,000 7,800 - 14,800 7 30 - 36 3,000 - 4,500 9,000 - 16,700 8 34 - 38 3,000 - 4,800 9,000 - 17,800 9 38 - 40 3,000 - 5,000 9,000 - 18,500 10 40 3,000 - 5,000 9,000 - 18,500 The Authority shall distinguish these projections from verified employment results as required by Section 51. SECTION 59. STATE RETURN ON INVESTMENT Using the $3.0 billion initial public capital framework and the $4.0 billion private investment target: Public capital: $3.0B Private capital: $4.0B Total initial investment: $7.0B At full production: Annual vessel revenue: approximately $2.2B Illustrative operating profit: approximately $176M to $220M A mature $220 million annual operating-profit level would equal approximately 7.3 percent of the initial public capital framework annually, and $176 million would equal approximately 5.9 percent, before considering broader tax receipts, employment effects, land-value effects, supplier investment and infrastructure value. A simple capital-recovery comparison would place the public investment's direct industrial capital-equivalent recovery at approximately $3.0B / $220M = 13.6 years, and $3.0B / $176M = 17.0 years, after reaching mature production. This calculation is not a state-government cash return on investment. State return on investment must separately account for tax revenue, public expenditures, infrastructure depreciation, financing costs and economic multipliers. SECTION 60. ECONOMIC RETURN ACCOUNTING The Department of Finance, in cooperation with designated transportation and economic-development agencies, shall establish an annual economic-return report. The report shall separately identify: State General Fund revenue. Special-fund revenue. Local tax revenue. Payroll-related economic activity. Private capital invested. Number of vessels completed. Vessel-production revenue. Number of direct jobs. Supplier employment. Training completions. Infrastructure completed. Port activity attributable to the Program. Energy consumption. Environmental performance. State expenditures. Federal funds obtained. Private funds obtained. Cost per job created. Public capital per vessel of annual capacity. Public capital leverage ratio. SECTION 61. RETURN ON INVESTMENT AND PROFIT AND LOSS FRAMEWORK (a) The Authority shall maintain a formal return-on-investment and profit-and-loss analytical framework for public infrastructure investments and for evaluating private-partner commercial performance under public-private agreements. Planning estimates in this Act illustrate potential economic scale and are not guarantees of commercial profitability. (b) Public capital directed primarily toward port facilities, power infrastructure required for automation systems, transportation connections, workforce training facilities, environmental mitigation, and related public infrastructure may generate returns through: (1) increased port throughput and related fees; (2) expanded property-tax and sales-tax base from industrial activity; (3) personal income-tax revenue from new high-wage employment; (4) federal matching funds and grants leveraged by state and local investment; and (5) long-term regional economic multiplier effects. (c) Private shipbuilding and manufacturing operations shall bear appropriate commercial risk. The State shall not guarantee private profitability. (d) Key drivers of private-operator profitability under a highly automated model include: vessel contract pricing and backlog; steel and component cost volatility; automation capital intensity and utilization rates; energy costs for high-demand robotic systems; skilled-labor availability and wage levels for automation specialists; federal and state incentives for domestic content and workforce training; and competitive positioning relative to Asian and European yards. (e) Detailed profit-and-loss modeling shall be required of any private partner seeking public assistance and shall be independently reviewed by the Authority. SECTION 62. PERFORMANCE BENCHMARKS The Program should target the following mature-state benchmarks: Measure Target Annual vessel capacity 25 - 40 (planning upper capacity 40) Annual production revenue approximately $2.2B at $55M average vessel value Private capital $4B or more Public capital framework approximately $3.0B Private-to-public capital ratio approximately 1.33 to 1 or greater Direct and integrated employment 3,000 - 5,000 Total supported employment 9,000 - 18,500 Mature operating margin 8 - 10 percent Mature operating profit model approximately $176M - $220M per year Production automation Phased in accordance with demonstrated technology readiness Annual state performance report Required SECTION 63. PUBLIC OWNERSHIP Nothing in this Act requires the State of California to own or operate commercial shipyards. The preferred structure shall be: public infrastructure, plus private capital, plus private production, plus public performance requirements. The State may own infrastructure where public ownership provides a demonstrated economic, transportation or strategic benefit. SECTION 64. AUDITING All state funds appropriated pursuant to this Act shall be subject to applicable state auditing requirements. The responsible agencies shall maintain sufficient records to determine: (a) Amount of public funds spent. (b) Amount of private funds invested. (c) Infrastructure completed. (d) Employment created. (e) Production achieved. (f) Contract performance. (g) Economic return. (h) Cost overruns. (i) Delays. (j) Outstanding obligations. SECTION 65. ANNUAL REPORT Beginning one year after implementation, the Authority shall submit an annual report to the Legislature containing: Projects under evaluation, approved, and under construction. Total expenditures. Private investment committed and invested. Public financing committed. Federal funding requested and received. Production capacity. Actual production, including ships constructed or repaired. Employment and jobs created. Training and apprentices trained. Manufacturing capacity added. Automation systems deployed. Supply-chain investments. Infrastructure completed. Environmental review status and environmental compliance. Transit feasibility findings. Security findings. Foreign-partner participation. Financial performance and revenue. Economic activity and projected economic impact, including return-on-investment metrics. Program deficiencies. Corrective actions. Recommendations for the subsequent fiscal year. SECTION 66. RESILIENCE Projects shall be evaluated for resilience against earthquakes, tsunamis, sea-level rise, flooding, wildfire, power interruption, cyberattack (including attacks on automation control systems), supply-chain disruption, port closure, international conflict, and transportation interruption. Critical infrastructure shall incorporate redundancy where economically and technically justified. SECTION 67. PHASED IMPLEMENTATION The Program shall be implemented in phases: Phase I - Feasibility (2027-2028): Governance, financing structure, site inventory and site analysis, supply-chain analysis, transit study, environmental screening and review, workforce study and programs, financial and return-on-investment analysis, federal jurisdiction analysis, automation technology assessment, supplier mapping and engineering studies. Phase II - Development (2028-2030): Property assembly, infrastructure planning, partner selection, federal coordination, financing, environmental review, engineering, automation system design, construction of priority infrastructure, establishment of automated fabrication facilities, expansion of rail and freight connections, establishment of training facilities, and the beginning of commercial production. Phase III - Construction and Expansion of Production (2030-2032): Port improvements, shipyard construction, fabrication facilities, automation infrastructure installation, transportation infrastructure, workforce facilities, expansion of modular production, supplier manufacturing and automated logistics. Phase IV - Operations (2032 and after): Vessel construction, vessel repair, manufacturing, logistics, workforce training, international trade, continuous automation optimization, and expansion of qualified shipyards and suppliers toward the long-term capacity objective of up to 40 vessels annually. Phase V - Expansion: Additional shipyard capacity, additional manufacturing, expanded maritime fleet support, additional transportation connections, and advanced automation upgrades. Production shall expand only where commercial contracts, infrastructure, workforce, financing and regulatory approvals support the expansion. The production years in Section 54 are measured from the commencement of commercial production and are not calendar years. SECTION 68. INITIAL TARGETS The Program shall use the following as planning objectives rather than mandatory production quotas: (a) Establish at least one major California shipbuilding development site incorporating substantial automation infrastructure. (b) Establish a United States-controlled operating structure. (c) Establish at least one qualified allied international shipbuilding partnership. (d) Establish a domestic and international steel and fabrication supply study. (e) Establish a maritime workforce and automation-training program. (f) Complete a Pacific Gateway transportation feasibility study. (g) Complete a subterranean transit feasibility study. (h) Pursue federal funding. (i) Pursue private capital. (j) Evaluate capacity sufficient to contribute materially to the national objective of expanding the United States commercial fleet. These objectives do not constitute a federal mandate to build a specified number of vessels. SECTION 69. FIVE-YEAR REVIEW Five years after commencement of the Program, the Legislature shall conduct a comprehensive review of economic performance, construction progress, employment, shipbuilding output, private investment, public expenditure, federal participation, environmental compliance, transit feasibility, international partnerships, supply-chain security, automation deployment results, and return-on-investment metrics. The review shall determine whether the Program: Increased California shipbuilding capacity. Attracted private investment. Created employment. Increased manufacturing. Improved port infrastructure. Reduced production bottlenecks. Produced measurable public economic benefits. Met environmental requirements. Met workforce objectives. Remains economically justified. The Legislature may modify, expand, reduce or terminate individual Program components based upon the review. SECTION 70. FISCAL SAFEGUARDS No provision of this Act shall be interpreted as requiring the State to spend the entire planning amount identified in this Act. Appropriations shall remain subject to: (a) Annual legislative authorization. (b) The state budget process. (c) Available revenues. (d) Bond authorization where applicable. (e) Federal funding requirements. (f) Project readiness. (g) Demonstrated private investment. (h) Performance milestones. SECTION 71. APPROPRIATIONS The Legislature may appropriate funds for implementation of this Act. No appropriation shall be implied solely by enactment of this Act. The Authority shall identify the source of funding for each project before entering into a financial commitment. SECTION 72. SUNSET Unless extended by statute, the authority to enter into new development agreements under this Act shall expire ten years after the effective date. Existing contracts, bonds, loans, leases, and development agreements shall remain in effect according to their terms. SECTION 73. SEVERABILITY If any provision of this Act or its application to any person or circumstance is held invalid, the invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application. SECTION 74. EFFECTIVE DATE This Act shall become operative on January 1 following enactment unless otherwise provided by law. SECTION 75. LEGISLATIVE COUNSEL AND BILL DRAFTING The Legislative Counsel shall convert this proposal into the technical form required for introduction as a California Assembly bill and shall determine appropriate Government Code, Public Resources Code, transportation and financing statutes, definitions, cross-references, constitutional limitations, appropriation requirements, bond authorization requirements, and necessary conforming amendments. SECTION 76. POLICY STATEMENT AND IMPLEMENTATION MODEL (a) California should seek to become a major Pacific maritime industrial center without attempting to replace federal maritime authority. The Pacific Gateway model shall therefore be based upon: California infrastructure, plus United States ownership and control, plus allied industrial expertise, plus diversified international supply chains, plus private capital, plus substantial automation infrastructure, plus federal maritime coordination. (b) The Program shall distinguish public infrastructure from private commercial operations. Public funds shall be directed primarily toward infrastructure, workforce development, feasibility, environmental review, automation-enabling power and digital infrastructure, and other legitimate public purposes. Private companies shall bear appropriate commercial risk for private shipbuilding and manufacturing operations. (c) The State of California shall not be required to operate the resulting commercial manufacturing system. The purpose of the Program is to establish the infrastructure and industrial conditions under which private companies can build, finance, operate and expand highly automated California shipbuilding facilities. The resulting system is intended to function as a permanent industrial corridor rather than a temporary construction project. (d) The recommended implementation structure is: STATE OF CALIFORNIA -> PACIFIC GATEWAY DEVELOPMENT AUTHORITY -> PORT / LOCAL GOVERNMENT / TRANSPORTATION AGENCIES -> U.S.-CONTROLLED OPERATING COMPANY -> SHIPBUILDING JOINT VENTURE -> QUALIFIED U.S. AND ALLIED SHIPBUILDING PARTNER -> Separate operating entities: Pacific Gateway Shipyard; Pacific Gateway Steel and Fabrication; Pacific Gateway Marine Manufacturing; Pacific Gateway Logistics; Pacific Gateway Transit; Pacific Gateway Research and Workforce; Pacific Gateway Automation Systems. The entities shall remain legally separate where appropriate for financing, liability, accounting, procurement, and regulatory purposes. SECTION 77. FINAL LEGISLATIVE OBJECTIVE It is the intent of the Legislature that California establish the legal, financial, transportation, workforce, automation-infrastructure, and physical-infrastructure framework necessary to determine whether Southern California can support a large-scale expansion of the United States maritime industrial base. The project shall begin with documented feasibility and lawful financing rather than an assumption that construction is commercially or technically justified. The ultimate objective is a functioning Pacific maritime industrial corridor capable of supporting American shipbuilding, American maritime employment, United States commercial shipping, port infrastructure, vessel repair, steel and marine fabrication, international trade, allied industrial cooperation, transportation efficiency, supply-chain resilience, advanced automation, and national economic security. LEGISLATIVE ECONOMIC STATEMENT Industrial Objective The Pacific Gateway program is intended to establish an integrated California maritime manufacturing system rather than simply subsidize individual shipyards. The central economic mechanism is: public infrastructure, leading to private investment, leading to automated production capacity, leading to vessel contracts, leading to manufacturing employment, leading to supplier expansion, leading to transportation activity, leading to taxable economic activity. The proposed $3.0 billion public capital framework is intended to leverage at least $4 billion of private capital. At full modeled production, 40 vessels annually at an average $55 million contract value would represent approximately $2.2 billion in annual vessel-production revenue. The economic model does not assume that California purchases the vessels. Production is intended to be supported by commercial contracts, exports, private operators, transportation companies, port operators, government procurement where legally authorized, and other qualified customers. Financial Model - Full Production Annual revenue $2.2 billion Estimated operating costs $1.98 billion Operating profit $0.22 billion (approximately 10 percent; planning range 8 to 10 percent) Initial public capital framework $3.0 billion Initial private capital target $4.0 billion Total initial capital formation $7.0 billion Private-to-public leverage Approximately $1.33 of private capital for every $1 of public capital Ten-year modeled production 204 to 244 vessels Ten-year modeled revenue $11.2 billion to $13.4 billion PROPOSER AND SPONSORING INFORMATION Proposed Legislative Vehicle: California Assembly Bill District: California Assembly District 69 Primary Geographic Focus: Long Beach, Carson, Signal Hill, Avalon and Santa Catalina Island Proponent: Fiveo1 Proposer and Proposal Contact: Evan Winter Official correspondence by post mail only: Fiveo1 PO Box 312786 Avalon, California 90704 United States of America PRIMARY LEGISLATIVE AND CONGRESSIONAL CONTACTS California State Assembly - District 69 Assemblymember Josh Lowenthal Capitol Office: 1021 O Street, Suite 8320, Sacramento, CA 95814, (916) 319-2069 District Office: 3777 Long Beach Boulevard, Suite 260, Long Beach, CA 90807, (562) 366-2769 Email: assemblymember.lowenthal@assembly.ca.gov California State Senate - District 33 Senator Lena A. Gonzalez Capitol Office: 1021 O Street, Suite 7510, Sacramento, CA 95814, (916) 651-4033 District Office: 3939 Atlantic Avenue, Suite 107, Long Beach, CA 90807, (562) 256-7921 Email: senator.gonzalez@senate.ca.gov United States House of Representatives - California 42nd District Congressman Robert Garcia Washington, D.C. Office: 109 Cannon House Office Building, Washington, DC 20515, (202) 225-7924 District Office: 415 West Ocean Boulevard, Suite 2803, Long Beach, CA 90802 United States Senate - California Senator Alex Padilla 331 Hart Senate Office Building, Washington, DC 20510, (202) 224-3553