(June 8, 2004) A number of bills to limit or restrict worldwide outsourcing passed through the Legislature during the last month despite strong opposition from the California Chamber of Commerce.

These bills, aimed at limiting or restricting worldwide outsourcing,  would have a negative impact on the state’s economy, restricting economic and job growth and resulting in fewer jobs for workers in the state.

“International trade and free commerce are staples of the California economy and key sources of job protection,” said Jeanne Cain, Chamber senior vice president. “The passage of these bills is detrimental to job creation and these efforts to prohibit worldwide outsourcing could end up costing California more jobs that they’re intending to protect.”

According to the U.S. Department of Commerce, foreign direct investment in California was responsible for 713,500 jobs in the state in 2003. California also ranks first in the nation in the number of jobs created from foreign direct investment, making us particularly susceptible to polices that restrict free trade and commerce.

Last month the Chamber openly opposed 10 anti-outsourcing bills that in some way attempt to limit the free and open exchange of jobs and services, which could have serious implications and negatively impact California’s economy, job creation and competitiveness. 

Eight bills to limit or restrict worldwide outsourcing are currently moving through legislature despite strong Chamber opposition. Those bills are:

AB 664 (Correa; D-Santa Ana) Increases costs to businesses and consumers by imposing unnecessary, redundant requirements on businesses to disclose any information shared with companies outside the United States. Ignores already-existing stringent consumer protections. Passed Assembly 75-1. In Senate Judiciary Committee.

AB 1829 (Liu; La Cañada/Flintridge) Opens threat of retaliation by overseas trading partners and subsequent loss of jobs and foreign markets for California products by, in effect, prohibiting the state from contracting with companies that use employees outside of the United States to provide goods or services under the contract. Passed Assembly 46-32. Awaiting assignment to Senate policy committee.

AB 1950 (Wiggins; D-Santa Rosa), which was recently added to the Chamber-opposed list, increases costs to businesses and consumers and encourages needless litigation by requiring companies to establish unnecessary and costly security provisions for customers’ non-sensitive information. Fails to recognize already-existing protections for sensitive consumer information. Passed Assembly 69-3. Awaiting assignment to Senate policy committee.

AB 2715 (Reyes; D-Fresno) Increases costs to businesses and consumers in California by subjecting companies in the state to different regulatory requirements than companies in other states and requiring them to disclose the location of a call center at the beginning of a sales call.  Passed Assembly 44-30. Awaiting assignment to Senate policy committee.

AB 3021 (Committee on Labor and Employment) Increases the cost of doing business in California and adds to ongoing state costs, yet provides no added benefits to workers, consumers or taxpayers by subjecting California companies to different regulatory requirements than companies in other states and requiring California employers to report the number of workers employed outside the state. Creates reporting and administrative nightmare for employers. Passed Assembly 47-32. Awaiting assignment to Senate policy committee.

SB 1451 (Figueroa; D-Fremont) Increases costs to businesses and consumers by imposing unnecessary redundant requirement that California businesses disclose to customers if information will be processed overseas. Ignores already-existing stringent consumer protections. Passed Senate 22-14. In Assembly Banking and Finance and Assembly Judiciary committees.

SB 1453 (Figueroa; D-Fremont) Increases the cost of doing business in California and adds to ongoing state costs by subjecting companies in the state to different regulatory requirements than companies in other states and requiring employers to notify state and employees each time employees are relocated or transferred out of California due to outsourcing. Creates regulatory and administrative nightmare for employers. Passed Senate 21-14. Awaiting assignment to Assembly policy committee.

SB 1492 (Dunn; D-Garden Grove) Increases health care costs and delays processing of medical and payment information by imposing redundant requirements that increase costs to businesses and consumers. Under the guise of 'homeland security,' limits information, including medical information and any related transactions, that can be processed overseas. Ignores already-existing stringent consumer protections. Passed Senate 22-13. In Assembly Labor and Employment and Assembly Judiciary committees.

Two Chamber-opposed bills, SB 1452 and SB 1638 (Romero; D- Los Angeles), are currently in the Senate Appropriations Committee suspense file waiting to be called at a later date. Another Chamber opposed-bill, AB 2449 (Diaz; D-San Jose), was pulled from the Assembly Business and Professions Committee and never made it to the floor.

The Chamber believes that the free flow of jobs and services is key to the state’s economic recovery. Efforts to create jobs and bolster the economy should begin with making California a more business-friendly state.  These bills go directly against those efforts.

For more information on these or other business related bills, visit the Government Relations section of the website at www.calchamber.com.