BILL ANALYSIS �
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|SENATE RULES COMMITTEE | SB 460|
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THIRD READING
Bill No: SB 460
Author: Price (D)
Amended: 5/31/11
Vote: 21
SENATE BUS, PROF & ECON DEVELOP COMMITTEE : 9-0, 4/11/11
AYES: Price, Emmerson, Corbett, Correa, Hernandez, Negrete
McLeod, Vargas, Walters, Wyland
SENATE APPROPRIATIONS COMMITTEE : 8-0, 05/26/11
AYES: Kehoe, Walters, Alquist, Lieu, Pavley, Price,
Runner, Steinberg
NO VOTE RECORDED: Emmerson
SUBJECT : International trade marketing and promotion
SOURCE : Pacific Merchant Shipping Association
DIGEST : This bill requires the Secretary of the
Business, Transportation and Housing Agency (BT&H) to
convene a statewide business partnership for international
trade marketing and promotion that includes, but is not
limited to, representatives of public airports, land ports
of entry, seaports, ocean carriers, marine terminal
operators, air carriers, warehouse operators, railroads,
trucking companies, foreign trade zones, and shippers,
specifically including agricultural exporters,
manufacturers, post-consumer secondary material handlers,
and retailers, and requires the partnership to advise the
Secretary of the BT&H on what role the state should play in
CONTINUED
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international trade marketing and promotion, as specified.
ANALYSIS : Existing law:
1.Specifies that BT&H is the primary state agency
authorized to attract
foreign investments, cooperate in international public
infrastructure projects, and support California
businesses in accessing markets, and requires the
Secretary to develop an international trade and
investment policy.
2.Sets forth findings and declarations detailing: (1) The
importance of strengthening collaborative linkages among
remaining California-based international trade and
investment promotion programs operated at federal, state,
regional and local levels in light of the repeal of the
statutory authority for the Technology, Trade and
Commerce Agency in 2003; (2) Data from 2000 shows that
international trade and investment activity in the state
supports one in every seven jobs; (3) Public Policy
Institute of California (PPIC) data as to the
productivity of export business; (4) California has
elements to form the foundation for a global
market-related economy; (5) California's multicultural
and ethnic populations offer unique opportunities for
international trade and investment; (6) High numbers of
California workers are employed by subsidiaries of
foreign companies; and, (7) California's trade and
investment policy is a living document that should be
regularly updated to reflect emerging business trends and
the changing needs of California businesses and workers.
3.Requires the Secretary to complete a study on the
potential roles of the state in global markets and a
strategy for international trade and investment.
4.Requires the Secretary to convene a statewide business
partnership for international trade and investment.
5.Sets forth criteria by which the Secretary can establish
international trade and investment offices and the
Controller can allocate funds for those offices.
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6.Specifies that the Governor is the primary state officer
representing California's interest in international
affairs; the Lieutenant Governor is the Chair of the
California Commission for Economic Development to improve
trade opportunities for California; the Attorney General
assists the federal government in defending against
international challenges to California law; the
Secretary of State oversees the International Business
Relations Program which assists foreign business entities
with the various filing processes; the Department of Food
and Agriculture is the primary agency for the promotion
of California agriculture, fish and forest exports and;
BT&H is the agency responsible for international trade
and investment activities other than those covered by the
Department.
7.The California Tourism Marketing Act establishes the
California Travel and Tourism Commission as a separate,
independent California nonprofit mutual benefit
corporation with the purpose of increasing the number of
persons traveling to and within California and requires
the Commission to prepare a written marketing plan.
This bill:
1.Sets forth two new findings and declarations detailing:
(1) International trade, which accounts for nearly 25
percent of the state's economy, relies on airports, land
ports of entry, and the largest seaport facilities in the
U.S. to maintain California's status as a major gateway
for products entering and leaving the United States,
including such as industrial and postconsumer secondary
materials, originated in or destined for other states;
and, (2) According to the California Marine and
Intermodal Transportation System Advisory Council, more
than 40 percent of the total containerized cargo entering
the U.S. arrived at California ports, and almost 30
percent of the nation's exports flowed through ports in
this state which employ more than 500,000 people in
California and generate an estimated $7 billion dollars
in state and local taxes annually while nationwide, more
than two million jobs are linked to California's public
ports.
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2.Assigns BT&H as the primary state agency to coordinate
international trade marketing and promotion strategies.
Background
Ports are local government agencies governed by port
commission that are responsible for developing,
maintaining, and overseeing the operation of shoreside
facilities for the intermodal transfer of cargo between
ships, trucks, and railroads. In some cases, certain ports
have jurisdiction over affiliated airports, build and
maintain terminals for the passenger cruise ship industry,
or manage marinas and other public facilities. Existing
law establishes 11 ports in the state: Hueneme, Humboldt
Bay, Long Beach, Los Angeles, Oakland, Redwood City,
Richmond, Sacramento, San Diego, San Francisco, and
Stockton. The law allows each port to establish a general
plan and port system improvements and prescribe the
specifications for such improvements.
California's land, sea, and air ports of entry serve as key
international commercial gateways for products entering the
country. California exported $120 billion in goods in
2009, ranking only second to Texas with $163 billion in
export goods. Computers and electronic products were
California's top exports in 2008, accounting for 29.3
percent of all state exports, or $35 billion. Prior to the
economic downturn of the past two years, California ports
were projected to experience tremendous growth, with some
estimating that cargo volumes would triple by 2020.
According to information from a December 2010 article in
the Los Angeles Business Journal , officials at the ports of
Los Angeles and Long Beach are worried about the impact a
massive expansion of the Panama Canal could have on their
business. The $5 billion project aims to widen the Panama
Canal by 2014 to accommodate larger cargo ships, called
Post Panamax vessels which could result in large freighters
loaded with goods from Asia destined for the Eastern U.S.
bypassing California all-together and instead using the
canal to reach the other side of the country. The Panama
Canal Authority, which runs the canal, has entered into
memorandums of understandings with 20 ports on the Gulf and
East coasts, including New Orleans, Miami and Baltimore,
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that are intended to promote freight passage through the
canal to those ports. In the absence of a California
effort to market opportunities throughout the state, ports
themselves, like the Port of Long Beach, are approaching
the Panama Canal Authority individually to enter into their
own memorandum. There is some concern that California
ports now have to compete against one another since there
is no coordinated strategy at the state level to promote
all resources in California for international trade.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee:
Fiscal Impact (in thousands)
Major Provisions 2011-12 2012-13
2013-14 Fund
Study $120 to $140 one
time General
SUPPORT : (Verified 5/31/11)
Pacific Merchant Shipping Association (source)
California Trade Coalition
ARGUMENTS IN SUPPORT : According to the Pacific Merchant
Shipping Association, California serves as the gateway to
the Pacific Rim, with its ports handling over 40 percent of
containerized cargo for the U.S. PMSA notes that port
activity plays a critical role in the state's economy yet
there is no strategy to protect and promote it.
The California Trade Coalition, a collection of trade and
freight industries operating throughout the state writes in
support of this bill, noting that without the support of an
active business community, there will not be a strategy on
how best to promote the port and supply chain
infrastructure in this state. The Coalition believes that
this bill will set the stage to explore options to change
missed opportunities for trade promotion.
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JJA:nl 5/31/11 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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