BILL ANALYSIS Ó
AJR 4
Page 1
ASSEMBLY THIRD READING
AJR 4 (Hueso and V. Manuel Pérez)
As Amended February 27, 2013
Majority vote
ECONOMIC DEVELOPMENT 9-0
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|Ayes:|Medina, Mansoor, Daly, | | |
| |Fong, Fox, Hueso, Linder, | | |
| |Melendez, | | |
| |V. Manuel Pérez | | |
| | | | |
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SUMMARY : Memorializes the California Legislature's desire to
have the federal government fund improvements at the San Ysidro,
Otay Mesa, and Calexico Ports of Entry (POE). Specifically,
this bill :
1)Makes, among other declarations, that:
a) The U.S, Canada, and Mexico signed the North American
Free Trade Agreement (NAFTA) in 1993 to foster trade among
the three countries and improve the region's global
competitiveness. Since its enactment, trade between the
U.S. and Mexico has quintupled, totaling $500 billion in
2011;
b) Mexico continues to be California's number one export
market with $25.8 billion in goods being exported to Mexico
in 2011 and accounting for 16% of all California exports;
c) Ninety-nine percent of trade between California and
Mexico is transported by trucks. Border traffic congestion
and delays along the San Diego and Imperial Counties cost
the U.S. and Mexican economies an estimated $8.63 billion
in gross output and more than 73,900 jobs in 2007;
d) New land POEs and improvement projects are under federal
jurisdiction and that border improvements are underway or
planned for the POE facilities at San Ysidro-Puerta Mexico,
Otay Mesa-Mesa de Otay, Calexico West;
e) The General Accountability Office and the Department of
AJR 4
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Homeland Security estimate that $6 billion in border
infrastructure is needed to fulfill their mission of
preventing unlawful entry and smuggling while facilitating
legitimate trade and tourism; and
f) Since February 2009, the federal government has not
funded border infrastructure projects.
2)Resolves that the Assembly and the Senate of the State of
California urge the federal government, including the
Department of Homeland Security and the General Services
Administration (GSA), to fund necessary improvements at the
San Ysidro, Otay Mesa, and Calexico POE.
FISCAL EFFECT : None
COMMENTS : This resolution seeks legislative support for federal
advocacy on behalf of three POE projects along the California
border with Mexico. While it is the federal government's
responsibility to maintain the nation's borders, without
intervention, there is a concern that badly needed upgrades will
be delayed or eliminated due to broader federal budget
discussions.
In making the case for full legislative support, the authors
cite the importance of trade to the overall California economy,
the inability for existing facilities to keep up with the demand
resulting from NAFTA, and the documented security issues with
the existing POE facilities.
Background: California's $1.9 trillion economy is highly
dependent on international trade. One-in-five manufacturing
jobs are dependent on trade and over 76,000 Californians work in
the logistics industry. Mexico is the state's number one trade
partner, receiving $26 billion of the state's $159 billion in
exports in 2011. As the middle class in Mexico has grown,
interest in California products has increased. Top exports to
Mexico in 2011 include: Computer and Electronic Products ($9.2
billion); Transportation Equipment ($2 billion); Machinery,
except Electrical ($1.8 billion); Chemicals ($1.3 billion); and
Food Manufactures ($1.3 billion). Over 90% of trade with Mexico
is transported by truck, making California's POEs essential
infrastructure to the state's economy.
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U.S. firms with significant business passing through the
Imperial and San Diego County POEs report that their
logistics-supply chains are highly time sensitive. Long wait
times (as high as three to four hours) between Imperial County
and the Mexico border accounted for an estimated output loss of
$1.4 billion and 11,600 lost jobs nationally in 2007. More
recent studies on the Imperial POEs show that losses to
California, alone, were $620 million. The San Diego POEs have
similarly been impacted, with 2005 estimated output losses of
$716 million and $204 million in labor income losses (or more
than 3,600 jobs).
Recognizing the need for improvement, the GSA developed
expansion projects for three of the six POEs along the
California and Mexico border: San Ysidro ($285 million),
Calexico ($318 million), and Otay Mesa Land ($161 million) POEs.
Delays in receiving anticipated federal funding have
jeopardized timely project completion.
The Sequestration: On March 1, 2013, $85 million in automatic
across-the-board federal budget reductions became effective. In
moving forward, it is likely that the federal Administration and
Congress will be reworking budgets of some impacted programs in
order to better align existing resources with national
priorities. While federal money may be tight, to the extent
that AJR 4 seeks federal funding for existing projects
recommended by GSA to support economic growth and protect the
security of the nation, there may be funding opportunities as
part of broader budget discussions.
Analysis Prepared by : Toni Symonds / J., E.D. & E. / (916)
319-2090
FN:
0000020