BILL ANALYSIS �
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|Hearing Date:June 13, 2011 |Bill No:AB |
| |1410 |
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SENATE COMMITTEE ON BUSINESS, PROFESSIONS
AND ECONOMIC DEVELOPMENT
Senator Curren D. Price, Jr., Chair
Bill No: AB 1410Author:Committee on Jobs, Economic Development
and the Economy
As Amended:April 25, 2011 Fiscal:No
SUBJECT: State government: international relations.
SUMMARY: Reorganizes the statutory placement of the Office of the
California-Mexico Affairs and the California-Mexico Border Relations
Council from a general title within state government to a more
specific title on foreign relations within the Government Code, but
does not make any changes to the content of the sections of the law.
Existing law:
1)Establishes the Office of the California-Mexico Affairs (Office) for
the purpose of furthering and developing favorable economic,
educational, and cultural relations with bordering Mexican states
and United States border-states. (Government Code (GC) � 8702 and �
8705)
2)Places within the Office, the operations of the California Office of
the Southwest Border Regional Conference (Conference). The members
of the Conference are the Governors of the four American
border-states: California, Arizona, New Mexico, and Texas. (GC �
8703)
3)Establishes the California-Mexico Border Relations Council (Border
Council), consisting of the California state agency Secretaries of
the Resources Agency, Environmental Protection, Health and human
Services, Business Transportation and Housing, Food and Agriculture
and the Director of Emergency Services. (GC � 8711)
4)Sets forth findings and declarations detailing: (1) The importance
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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 (TTCA) 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. (GC � 13996.4)
5)Specifies that the Business, Transportation and Housing Agency
(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. (GC � 13996.45)
This bill:
1) Reorganizes the statutory placement of the California-Mexico
Affairs Office and the Border Council from a general title within
state government to a more specific title on foreign relations
within the Government Code.
2) Clarifies that the purpose of this act is to reorganize various
code sections and clarifies that the changes are non-substantive
and technical in nature
FISCAL EFFECT: None. This measure is keyed "non-fiscal" by
Legislative Counsel.
COMMENTS:
1. Purpose. This bill is sponsored by the Author . According to the
Author, the bill is intended to make necessary, technical changes
to ensure that all foreign relations related issues are under
foreign relations code sections, for the purposes of having one
comprehensive code for the state's international trade activities
and programs.
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2. International Relations Code. California's formal trade and trade
promotion activities within state government are currently quite
limited. With the demise of the Technology Trade and Commerce
Agency (TTCA) in 2003, numerous trade related programs and services
were eliminated, and the few remaining came under the umbrella of
the BT&H. The former International Investment Division under TTCA
had 91 employees and a budget of $43 million, allowing it to engage
in activities like formal marketing. There is now only a very
small number of former International Investment Division staff
working on trade related issues and activities for the state.
During the 2005-06 Legislative Session, significant changes were
made in the area of state international trade and development with
the enactment of SB 1513 (Romero, Chapter 663, Statutes of 2006)
which re-established statutory authority for BT&H to conduct
international trade and foreign investment activities. According
to the Author, during deliberations on the re-establishment of
trade authority for BT&H, concerns were raised by international
business groups that the state lacked a comprehensive or even
generally understandable statutory scheme related to trade and
foreign relations. A new statutory title was added for the state's
foreign relations activities.
This bill further reorganizes the Government Code by consolidating
two additional foreign relations programs under the title.
3. California's Trade Economy. According to information provided by
the Author, international trade is a very important component of
California's $1.9 trillion economy. If California were a country,
it would be the 11th largest exporter in the world. Exports from
California accounted for over 11% of total U.S. exports in goods,
shipping to over 226 foreign destinations in 2010.
California's land, sea, and air ports of entry serve as key
international commercial gateways for products entering the
country. California exported $143 billion in goods in 2010 (up
from 120 billion in 2009), ranking only second to Texas with $163
billion in export goods.
Computers and electronic products were California's top exports in
2010, accounting for 30.1% of all state exports, or $43 billion.
Manufacturing is California's most export-intensive activity.
Overall, manufacturing exports represent 9.4% of California's gross
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domestic product. More than one-fifth (21.9%) of all manufacturing
workers in California directly depend on exports for their jobs.
Small- and medium-sized firms generated more than two-fifths (43%)
of California's total exports of merchandise. This represents the
seventh highest percentage among states and is well above the 29%
national average export share for these firms.
4. California and Mexico. The United States and Mexican economies
have become increasingly integrated, particularly since the 1994
North American Free Trade Agreement NAFTA. This integration has
brought California and Mexico both opportunities and challenges,
most notably in the areas of economic development, labor relations,
health care, and environmental protection. Beginning in 1999,
Mexico became California's number one trade partner. In 2009,
California posted exports to Mexico of $17.5 billion, which
accounted for 15% of the nation's exports.
According to a 2004 study by the Public Policy Institute of
California, 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. Top commodities for this
type of trade include: machinery, vehicles, instruments, and
electronics and electronic equipment.
5. Similar and Related Legislation. AB 1558 (Assembly Committee on
Jobs) of 2009 aimed to recodify and reorganize sections of the
Government Code to create one comprehensive code for the state's
international trade activities and programs. The measure was
amended to deal with reorganization of the state's economic
development programs. This measure was held in the Senate
Committee on Appropriations in 2010.
AB 89 (Garcia) of 2008 would have required BT&H to prepare a study
by January 1, 2010, regarding infrastructure development along the
California-Mexico border, including an assessment of whether
alternative financing mechanisms may be necessary to meet the
development needs of the bi-national region. This measure was
vetoed by the Governor.
AB 1719 (Assembly Committee on Jobs) of 2008 would have made
technical and non-substantive changes to codes relating to the
state's international trade activities but was later amended to
deal with an entirely different subject matter. This measure was
held in the Assembly Committee on Rules.
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AB 3021 (Nu�ez, Chapter 621, Statutes of 2006) established the
Border Council.
SB 1513 (Romero, Chapter 663, Statutes of 2006) provides new
authority for BT&H to undertake international trade and investment
activities, and as a condition of that new authority, directs the
development of a comprehensive international trade and investment
policy for California.
SB 772 (Ducheny, Chapter 214, Statutes of 2005) requires the
California Integrated Waste Management Board to include in the
waste tire recycling program five-year plan information pertaining
to border region activities.
SUPPORT AND OPPOSITION:
Support: None on file as of June 7, 2011
Opposition: None on file as of June 7, 2011
Consultant:Sarah Mason