BILL ANALYSIS �
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|SENATE RULES COMMITTEE | AB 690|
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THIRD READING
Bill No: AB 690
Author: Campos (D) and Medina (D), et al.
Amended: 6/30/14 in Senate
Vote: 21
SENATE BUSINESS, PROF. & ECON. DEV. COMMITTEE : 8-0, 6/23/14
AYES: Lieu, Wyland, Berryhill, Corbett, Galgiani, Hernandez,
Hill, Torres
NO VOTE RECORDED: Block
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 78-0, 1/29/14 - See last page for vote
SUBJECT : State government: international relations
SOURCE : Author
DIGEST : This bill repeals and recasts provisions related to
the Office of California-Mexico (Office) and the
California-Mexico Border Relations Council (Council).
ANALYSIS :
Existing law:
1. Establishes the Office to serve as a clearinghouse for
information and assistance to other state agencies involved
with Mexico and develop favorable relations with the State of
Baja California, the State of Baja California Sur, other
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Mexican states bordering on the United States, and the
remaining states and territories of Mexico. Requires the
Office to cooperate with similar organizations and agencies
situated within California, the United States, or Mexico, to
further economic development, improve working conditions and
living standards, and foster the protection and improvement
of the environment in Mexico and California.
2. Establishes the Council comprised of the Secretary of the
Natural Resources Agency, the Secretary for Environmental
Protection, the Secretary of Health and Human Services, the
Secretary of Transportation, the Secretary of Food and
Agriculture, and the Director of Emergency Services, with the
Secretary for Environmental Protection serving as Chair.
Requires the Council to coordinate activities of state
agencies that are related to cross-border programs,
initiatives, projects, and partnerships that exist within
state government, to improve the effectiveness of state and
local efforts that are of concern between California and
Mexico. Requires the Council to establish policies to
coordinate the collection and sharing of data related to
cross-border issues between and among agencies and make
recommendations to the Legislature.
3. Establishes the Governor's Office of Business and Economic
Development (GO-Biz) as the lead state entity for economic
strategy and marketing of California on issues relating to
business development, private sector investment and economic
growth.
4. Specifies that GO-Biz 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 Director of
GO-Biz to develop an international trade and investment (ITI)
program attracting employment-producing direct foreign
investment to the state and provides support for California
businesses in accessing international markets and increasing
exports. Authorizes GO-Biz to establish ITI offices outside
of the U.S. according to certain requirements. Requires
GO-Biz to prepare an ITI strategy and provide a report to the
Legislature on or before February 1, 2014, updated once every
five years.
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5. Provides that the State Controller shall not allocate any
state funds to GO-Biz for ITI activities unless the ITI
strategy has been submitted to the Legislature by May 1,
2014.
6. Establishes processes and accountability measures for GO-Biz
to accept private monies to fund, establish, and operate ITI
offices.
7. Provides for the following related to the role of stage
agencies with respect to international relations:
A. The Governor is the primary state officer
representing California's interest in international
affairs, to the extent that representation is not in
conflict with federal law or the California
Constitution.
B. The Lieutenant Governor is the Chair of the
California Commission for Economic Development, to
improve trade opportunities for California. The
Legislature finds that the Commission has developed
international partnerships that provide venues for
foreign companies to do business in the state and for
California-based companies to access foreign markets.
C. The Attorney General is the chief law officer of
California and as such assists the federal government in
defending against international challenges to California
laws.
D. The Secretary of State oversees the International
Business Relations Program, which aims to develop
stronger connections between the international business
community and the state by assisting foreign business
entities with the various filing processes and
procedures in California.
E. The Department of Food and Agriculture (CDFA) is the
primary state agency for the promotion of California
agriculture, fish, and forest exports.
F. The Natural Resources Agency and the California
Environmental Protection Agency (Cal EPA) are the
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primary state agencies for the promotion of
international exchange of environmental protection
technologies, alternative energy technologies, and the
promotion of the transfer of environmental technology to
and from the state.
G. GO-Biz is the primary state agency responsible for
ITI activities in areas other than those covered by
CDFA.
8. Establishes a state point of contact (SPOC), within the
executive branch, to act as the liaison between the state and
the Office of the U.S. Trade Representative (USTR) on
trade-related matters. Provides that the SPOC is often
provided the opportunity to review and comment on ongoing
trade negotiations and must promptly disseminate
correspondence or information from the USTR to the
appropriate state agencies and departments and legislative
committees and work with the appropriate state agencies and
departments, and the Legislature, to review the effects on
the California environment, and California businesses,
workers, and general lawmaking authority, of any proposed or
enacted trade agreement provisions and communicate those
findings to the USTR.
9. Requires the Office of Planning and Research to maintain and
update a full and comprehensive list of all state agreements
made with foreign governments, updated within 30 days of the
effective date of each new agreement.
This bill:
1. Repeals and recasts provisions related to the Council and
Office.
2. Strikes existing legislative intent language for the creation
of the Office regarding the need for state agencies to
address important United States-Mexico issues, and replaces
it with language related to:
A. Trade with Mexico and California's potential to
capitalize on Mexico's growing economy, impacts of
border crossing delays between Mexico and the United
States along the Imperial County-Baja California border;
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B. Recognition that faster foreign direct investment is
occurring elsewhere;
C. California's lack of a formal mechanism devoted to
maximizing trade, addressing challenges, and
coordinating cross-border programs for trade development
between the two countries; and
D. Establishing an official trade relationship with
Mexico that will help ensure that the state can improve
its global competitiveness and protect California
industry, proactively support the expansion and location
of businesses in California, provide international
business assistance to California businesses, and
support their entry and successful participation in the
growing Mexican marketplace.
3. Provides that the Governor, or his/her designee, shall serve
as the California member of any board, council, commission,
or other binational advisory or coordinating body convened
under the auspices of the Office.
4. Adds the Director of GO-Biz to the Council and establishes
the Secretary for Environmental Protection as the Chair of
the Council.
Comments
According to the author, "the state's two existing programs on
California-Mexico relations are basically shells. As a result,
existing law on California's trade programs is confusing and
does not give prominence to California-Mexico trade. Business
groups have noted that the state's laws on foreign relations and
trade are difficult to locate and understand because there isn't
one comprehensive code section for all trade programs." This
bill seeks to address that problem by updating California law to
create one comprehensive authorizing statute for the state's
international trade activities, what the author calls "a
technical fix that simply moves the authorizing statutes for the
Office and the Council to be within the other statutes relating
to foreign relations."
Background
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According to information provided by the author's office, Mexico
is California's number one export market. In 2012, California's
exports to Mexico were worth $26.3 billion. In comparison,
California exported $17.3 billion to Canada, $14 billion to
China, and $13.1 billion to Japan. By some estimates, trade
with Mexico in 2011 resulted in more than 250,000 California
jobs.
Increased Trade Equals Jobs - Despite the current economic
upturn, California continues to need job growth since there are
still 1.3 million unemployed Californians. Trade can be a major
source of jobs. For example, the U.S. Department of Commerce
estimates that 11 new jobs are created for every $1 million of
increased trade activity.
California Lacks a Formal Structure for Trade with Mexico -
Since the 2004 closure of California's trade office in Mexico,
the state has not had a truly coordinated and comprehensive
approach to trade with Mexico and has lacked a dedicated and
formal structure or program focused on trade with Mexico.
The state eliminated the Mexico trade office and the 11 other
trade offices, including China, in 2004 because of concerns over
poor performance and state budget constraints.
GO-Biz is Now Responsible for the State's Trade Programs -
Responsibility for the state's trade programs were transferred
to the Business, Transportation, and Housing Agency (BTH) until
2012. With the 2012 dismantling of BTH, they were transferred
to GO-Biz. Existing programs on California-Mexico relations Are
not connected to GO-Biz. The state's two existing Mexico
related programs are the Office of California-Mexico Affairs,
and the California-Mexico Border Relations Council.
Both these programs currently are not connected to GO-Biz and
operate independently. The Office, which was housed in the
Governor's Office until 2003, currently is not active.
This bill seeks to update the two existing California-Mexico
programs by (1) reorganizing the statutes by moving the
authorizing statutes for the Office and the Council to be within
the other statutes relating to foreign relations; (2) updating
the statutes on the Council to reflect the transfer of other
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trade programs to GO-Biz; and (3) adding GO-Biz to the Council
by making the GO-Biz Director a member of the Council.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No Local:
No
SUPPORT : (Verified 7/31/14)
Los Angeles County Business Federation
San Diego Regional Chamber of Commerce
United States-Mexico Chamber of Commerce
ARGUMENTS IN SUPPORT : The San Diego Regional Chamber of
Commerce writes, "AB 690 is crucial as it implements a formal
mechanism for trade development between California, Mexico, and
also the United States. Implementation of the legislation would
lead to better access to Mexican government officials, more
jobs, more economic gain, and would also improve and protect
various California Industries by amplifying their ability to
compete on a global scale. ?By passing AB 690, California can
not only enhance economic performance, but also it can create
more jobs than the approximately 692,240 trade-related jobs it
already retains."
ASSEMBLY FLOOR : 78-0, 1/29/14
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Bigelow, Bloom,
Bocanegra, Bonilla, Bonta, Bradford, Brown, Buchanan, Ian
Calderon, Campos, Chau, Ch�vez, Chesbro, Conway, Cooley,
Dababneh, Dahle, Daly, Dickinson, Donnelly, Eggman, Fong, Fox,
Frazier, Beth Gaines, Garcia, Gatto, Gomez, Gonzalez, Gordon,
Gorell, Gray, Grove, Hagman, Hall, Harkey, Roger Hern�ndez,
Holden, Jones, Jones-Sawyer, Levine, Linder, Lowenthal,
Maienschein, Mansoor, Medina, Melendez, Morrell, Mullin,
Muratsuchi, Nazarian, Nestande, Olsen, Pan, Patterson, V.
Manuel P�rez, Quirk, Quirk-Silva, Rendon, Ridley-Thomas,
Rodriguez, Salas, Skinner, Stone, Ting, Wagner, Waldron,
Weber, Wieckowski, Wilk, Williams, Yamada, John A. P�rez
NO VOTE RECORDED: Logue, Perea
MW:d 8/6/14 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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