BILL ANALYSIS �
SB 928
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Date of Hearing: August 6, 2014
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
SB 928 (Correa) - As Amended: August 4, 2014
Policy Committee: JEDE Vote:8-0
Urgency: No State Mandated Local Program:
No Reimbursable: No
SUMMARY
This bill requires the Director of the Governor's Office of
Business and Economic Development (GO-Biz) to establish and
operate, or to create a public-private partnership to establish
and operate, a trade office in Mexico City, Mexico, by January
1, 2016. Specifically, this bill:
1)Requires the trade office to do all of the following:
a) Facilitate access to educational exchange programs
between California and Mexico.
b) Promote the export of California goods and services into
Mexico.
c) Encourage and facilitate capital investment from Mexico
into California.
2)Requires the Director of GO-Biz to include information on the
activities of the Mexico trade office, when reporting on other
foreign trade office-related activities, as specified.
3)Specifies that GO-Biz is only required to perform duties
related to the Mexico office to the extent private funds are
available for these purposes.
4)Expands the list of legislative committees that receive
information on GO-Biz' foreign trade activities to include the
Senate Select Committee on California-Mexico Cooperation.
FISCAL EFFECT
SB 928
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Unknown General Fund cost pressure to GO-Biz in the event
private funding is not fully realized. The bill requires GO-Biz
to perform the duties related to the trade office only to the
extent that private funds are available. GO-Biz indicates it
would require four positions and roughly $700,000 annually to
staff the trade office. No private funds have been identified at
this time.
COMMENTS
1)Purpose. According to the author, 23 states and the City of
San Antonio, Texas have trade offices in Mexico, with
additional offices opening for the cities of Phoenix and
Tucson. In 2012, Texas bilateral trade with Mexico totaled
$194 billion and in Arizona $6.3 billion. In that same year,
California trade with Mexico totaled $62 billion, which
supported 692,000 California jobs. The author contends a trade
office in Mexico would do more to encourage California
exports, foreign direct investment and economic growth.
2)Background. In 2003-04, California operated trade offices in
12 locations around the world. Seven foreign trade offices
were staffed by state employees, while five other offices were
staffed by contracted consultants. With the state elimination
of the Technology, Trade, and Commerce Agency, all of the
trade offices were soon closed, with the exception of a
"self-supporting" office in Armenia.
Pursuant to law established by AB 2012 (John A. P�rez),
Chapter 294, Statutes of 2012, GO-Biz has the authority to
establish and terminate international trade and investment
offices outside of the United States if certain requirements
are met. These requirements include: provision of a budget,
description of the staffing requirements and a strategy and
business plan illustrating how the proposed office will
facilitate an increase in direct foreign investment in
California or an increase in California exports, or both.
Statute also authorizes trade offices to be funded in whole or
in part by nonstate funds.
In April 2013, Governor Brown opened a trade office in
Shanghai, China. The Shanghai trade office was established
pursuant to a public-private partnership between the state and
the Bay Area Council. The operation of the China Office is
dependent on private donations and the collection of those
donations is the responsibility of the Bay Area Council.
SB 928
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Analysis Prepared by : Misty Feusahrens / APPR. / (916)
319-2081