BILL ANALYSIS �
------------------------------------------------------------
|SENATE RULES COMMITTEE | AB 1410|
|Office of Senate Floor Analyses | |
|1020 N Street, Suite 524 | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
------------------------------------------------------------
CONSENT
Bill No: AB 1410
Author: Assembly Jobs, Economic Develop., & the Econ.
Committee
Amended: 4/25/11 in Assembly
Vote: 21
SENATE BUSINESS, PROF. & ECON. DEV. COMM. : 8-0, 6/13/11
AYES: Price, Emmerson, Corbett, Hernandez, Negrete McLeod,
Vargas, Walters, Wyland
NO VOTE RECORDED: Correa
ASSEMBLY FLOOR : 73-0, 5/2/11 (Consent) - See last page for
vote
SUBJECT : State government: international relations
SOURCE : Author
DIGEST : This bill 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.
ANALYSIS :
Existing Law :
1. Establishes the Office of the California-Mexico Affairs
CONTINUED
AB 1410
Page
2
(Office) for the purpose of furthering and developing
favorable economic, educational, and cultural relations
with bordering Mexican states and United States
border-states.
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.
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.
4. Sets forth findings and declarations detailing:
A. The importance 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.
B. Data from 2000 shows that international trade
and investment activity in the state supports one
in every seven jobs.
C. Public Policy Institute of California data as to
the productivity of export business.
D. California has elements to form the foundation
for a global market-related economy.
E. California's multicultural and ethnic
populations offer unique opportunities for
international trade and investment.
F. High numbers of California workers are employed
by subsidiaries of foreign companies.
CONTINUED
AB 1410
Page
3
G. 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.
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
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.
Background
International Relations Code . California's formal trade
and trade promotion activities within state government are
currently quite limited. With the demise of the 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
CONTINUED
AB 1410
Page
4
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.
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 percent 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 percent of all state
exports, or $43 billion.
Manufacturing is California's most export-intensive
activity. Overall, manufacturing exports represent 9.4
percent of California's gross domestic product. More than
one-fifth (21.9 percent) of all manufacturing workers in
California directly depend on exports for their jobs.
Small- and medium-sized firms generated more than
two-fifths (43 percent) of California's total exports of
merchandise. This represents the seventh highest
percentage among states and is well above the 29 percent
national average export share for these firms.
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
CONTINUED
AB 1410
Page
5
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 percent 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.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
ARGUMENTS IN SUPPORT : According to the author's office,
this bill intends 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.
ASSEMBLY FLOOR :
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Beall, Bill
Berryhill, Block, Blumenfield, Bonilla, Bradford,
Brownley, Buchanan, Butler, Campos, Carter, Cedillo,
Chesbro, Conway, Cook, Davis, Dickinson, Donnelly, Eng,
Feuer, Fletcher, Fong, Furutani, Garrick, Gatto, Gordon,
Grove, Hagman, Halderman, Hall, Harkey, Hayashi, Hill,
Huber, Hueso, Huffman, Jeffries, Jones, Knight, Lara,
Logue, Bonnie Lowenthal, Ma, Mansoor, Miller, Mitchell,
Monning, Morrell, Nestande, Nielsen, Norby, Olsen, Pan,
Perea, V. Manuel P�rez, Portantino, Silva, Skinner,
Smyth, Solorio, Swanson, Torres, Valadao, Wagner,
Wieckowski, Williams, Yamada, John A. P�rez
NO VOTE RECORDED: Charles Calderon, Fuentes, Galgiani,
Gorell, Roger Hern�ndez, Mendoza, Vacancy
CONTINUED
AB 1410
Page
6
JJA:do 6/14/11 Senate Floor Analyses
SUPPORT/OPPOSITION: NONE RECEIVED
**** END ****
CONTINUED