BILL ANALYSIS
AB 1276
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Date of Hearing: May 6, 2009
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Kevin De Leon, Chair
AB 1276 (Skinner) - As Introduced: February 27, 2009
Policy Committee: Jobs Vote:5 - 2
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill prohibits 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, unless a statute is enacted
explicitly authorizing the state official to bind the state to a
specific trade agreement.
FISCAL EFFECT
No direct fiscal impact. (If a governor was unable to get
subsequent legislative authority to bind the state and a future
international trade agreement, there would be unknown fiscal
implications.)
COMMENTS
1)Rationale . Currently, when a trade agreement is under
negotiation, the United States Trade Representative (USTR)
directs all correspondence and requests to state governors.
According to the author, past California governors have
granted their consent for the state to be bound to the rules
regarding government procurement contained in trade agreements
even though there is no process for this in state law and even
though the California Legislative branch is charged with
setting the state's procurement policy. Under the current
system, the legislature is not informed of USTR requests and
is excluded from the trade-related consultation and
decision-making.
The proponents of AB 1276 state that the decision to provide
the federal government consent to bind the state to the rules
AB 1276
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of an international trade agreement is a legislative function
because it has the potential of altering the legal rights and
duties of the state, as well as setting state policies. This
is because once the state is bound to an agreement, the state
is constrained from implementing or enforcing legislation that
falls outside of the rules set forth in the trade agreement.
Further, the state is open to challenges in foreign trade
tribunals of its laws and regulations brought by foreign
businesses seeking preferential treatments guaranteed by the
trade agreements.
As an example, California has a number of state policies and
laws relating to procurement which direct state resources to
small businesses, business located in enterprise zones, and
disabled veteran-owned business enterprises. Potentially,
these types of laws could be found to be trade barriers to
foreign businesses who want to compete for state contracts.
The proponents state that the decision to commit a state to an
international trade agreement involves the state evaluating
its principles and priorities, weighing environmental, labor,
human rights, foreign relations, business, and budget
considerations against the opportunities and limitations of
being bound to an agreement. While it is the role of the
governor to implement state laws, it is the role of the
Legislature to set policy. Therefore, the governor cannot
unilaterally undertake a legislative function. AB 1276 is
intended to establish a legislative review of the potential
impacts of a trade agreement and limit the ability of the
governor to bind the state to an agreement without the consent
of the Legislature.
2)Related Legislation . In 2005, SB 348 (Figueroa), a
substantially similar bill, was vetoed by the governor. In
his veto message he wrote that the bill would not accomplish
its intended goal because, under the Supremacy Clause of the
United States Constitution, international trade agreements are
treaties that preempt state law.
Analysis Prepared by : Julie Salley-Gray / APPR. / (916)
319-2081