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