BILL ANALYSIS Ó AB 690 Page 1 CONCURRENCE IN SENATE AMENDMENTS AB 690 (Campos and Medina) As Amended August 11, 2014 Majority vote ----------------------------------------------------------------- |ASSEMBLY: |78-0 |(January 29, |SENATE: |36-0 |(August 13, | | | |2014) | | |2014) | ----------------------------------------------------------------- Original Committee Reference: L. GOV. SUMMARY : Repeals and recasts statutory provisions relating to the California-Mexico Border Relations Council (Border Relations Council) and adds the Director of the Governor's Office of Business and Economic Development (GO-Biz) to its membership. The Senate amendments remove the designation of GO-Biz as the chair of the Border Relations Council. The amendments also remove the provisions related to the Office of California-Mexico Affairs. EXISTING LAW : 1)Establishes a separate Government Code title for issues relating to foreign relations, which includes the assignment of responsibilities to specific government entities. GO-Biz is designated as the primary state agency responsible for international trade and foreign investment activities, excluding agriculture. The Natural Resources (NRA) and Environmental Protection (EPA) Agencies are designated as the primary state agencies responsible for the international exchange of environmental protection and alternative energy technologies. 2)Establishes the Border Relations Council consisting of the California state agency Secretaries of EPA (chair), NRA, Health and Human Services, Transportation, Food and Agriculture, and the Director of the Governor's Office of Emergency Services. FISCAL EFFECT : None COMMENTS : The United States (U.S.) and Mexican economies have become increasingly integrated, which has brought both AB 690 Page 2 opportunities and challenges to California, most notably in the areas of business development, labor relations, health care, and environmental protection. Beginning in 1999, Mexico became California's number one trade partner, receiving $23.9 billion (14% of all exports) in goods in 2013. Computers and electronic products have been California's highest single export to Mexico since 2000. The top five exports to Mexico were: Computer and Electronic Products ($5 billion); Transportation Equipment ($2.5 billion); Machinery, except Electrical ($2 billion); Petroleum and Coal Products ($1.5 billion); and Chemicals ($1.5 billion). In 2013, California imported $36 billion worth of goods and services from Mexico. Mexican imports accounted for 9.5% share of total imports to California. According to a Public Policy Institute study, much of the California-Mexico trade is two-way within the same commodity class, suggesting extensive production sharing. Components made in California are assembled or further processed in Mexico, and shipped back to California for distribution. One estimate is that 40% of the content of U.S. imports from Mexico were originally made in the U.S. That means a large portion of the money U.S. consumers spend on Mexican imports goes to U.S. companies and workers. Given the significance of California's trade with Mexico, it is unfortunate that the state's two key forums for engaging with Mexico do not include a role for the state's top economic and business development organization, GO-Biz. This bill addresses this policy oversight by adding GO-Biz to the Border Relations Council and designates the Director of GO-Biz as Chair. The policy committee analysis includes additional information on the history of the California-Mexico coordinating bodies and the economic importance of Mexico to the California economy. Analysis Prepared by : Toni Symonds / J., E.D. & E. / (916) 319-2090 FN: 0004890 AB 690 Page 3