BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
1276 (Skinner)
Hearing Date: 7/6/2009 Amended: As Introduced
Consultant: Bob Franzoia Policy Vote: G O 7-2
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BILL SUMMARY: AB 1276 would prohibit a state official, including
the Governor, from binding the state, or giving consent to the
federal government to bind the state, to provisions of a
Proposed International Trade Agreement, including the government
procurement rules, unless a statute is enacted that explicitly
authorizes a state official, including the Governor, to bind the
state or to give consent to bind the state to that trade
agreement.
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Fiscal Impact (in thousands)
Major Provisions 2009-10 2010-11 2011-12 Fund
Prohibition on trade agree- No new costs; unknown
potential foregone General/
ment participation savings or costs in future years
depending Special
on future action by Legislature and
Governor,
if any
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STAFF COMMENTS:
Chapter 663/2006 (SB 1513, Romero) specified that the Business,
Transportation and Housing (BT&H) Agency is the primary state
entity authorized to attract foreign investments, cooperate in
international infrastructure projects, and support California
businesses (not otherwise assisted by the California Department
of Food and Agriculture) and required the Secretary of BT&H to
develop an international trade and investment policy.
Under the World Trade Organization and the North American Free
Trade Agreement, once the state is bound to an agreement other
nations can challenge federal, state, and local laws in trade
tribunals. If a trade tribunal rules against a law or
regulation, it must be eliminated or changed before trade
sanctions are applied. State laws could be threatened under
federal preemption due to the rules of various trade agreements,
including Buy Local efforts, small business preference;
environmental standards, renewable energy purchasing
requirements, higher education subsidies, gambling restrictions,
etc. potentially allowing foreign businesses to gain
preferential treatment.
This bill is similar to SB 348 (Figueroa) 2005 which was vetoed
by the Governor with the following message:
This bill will not accomplish its intended goal because, under
the Supremacy Clause of the United State Constitution,
international trade agreements are treaties that preempt state
law.
Page 2
AB 1276 (Skinner)
However, for advice from states and local entities on trade
policy matters, the federal government has established the
Intergovernmental Policy Advisory Committee on Trade (IGPAC)
which is comprised entirely of state and local officials.
Appointed on a bipartisan basis, the committee makes
recommendations to the United States Trade Representative and
the Administration on trade policy matters. The ICPAC provides
the appropriate venue for the Legislature to express its views
on international trade agreements.