BILL ANALYSIS SB 888 Page 1 Date of Hearing: June 23, 2004 ASSEMBLY COMMITTEE ON LABOR AND EMPLOYMENT Paul Koretz, Chair SB 888 (Dunn) - As Amended: June 9, 2004 SENATE VOTE : Vote not relevant. SUBJECT : Employment: confidential information. SUMMARY : Prohibits the performance of any work involving information that is essential to homeland security at a work site outside of the United States. Specifically, this bill : 1) Prohibits any work involving information that is essential to homeland security from being performed at a work site outside of the United States, unless the material or expertise necessary to perform the work is unavailable in the United States. 2) Defines "information essential to homeland security" as either of the following: a) Information necessary to enhance the capability of state and local jurisdictions to prepare for and respond to terrorist acts, including, but not limited to, acts of terrorism involving weapons of mass destruction and nuclear, radiological, incendiary, chemical, and explosive devices; or b) Information relating to physical and information infrastructures, including, but not limited to, the telecommunications, energy, financial services, water, and transportation sectors. EXISTING LAW , by executive order of the Governor, establishes the Office of Homeland Security. FISCAL EFFECT : Unknown COMMENTS : According to the author's office, recent media reports about sensitive and private information being offshored raise serious concerns about how to best enforce our state's privacy and security protections in today's global economy. SB 888 Page 2 According to the author, since September 11, 2001, we have become increasingly concerned with protecting our state from terrorist attack. At a time when we are spending hundreds of millions of federal and state dollars to protect our dams, bridges, roadways and other infrastructure, it seems foolish to be allowing engineering schematics relating to the state's electricity grid to be worked on overseas. Recently, a container exploded at the Port of Los Angeles after being inspected at an offshore site. More and more, containers are not being inspected for their contents once they enter a California port. This puts the health and safety of port workers as well as the public at large at risk. Similarly, the California Labor Federation, AFL-CIO contends that in these times where we experience the threat of terrorist attacks, Californians should not have to compromise their security simply because businesses are looking for a cheaper bottom line. The International Longshore and Warehouse Union, AFL-CIO (ILWU) argues that prior to September 11, 2001, ILWU marine clerks verified the manifest of cargo containers in California and elsewhere on the West Coast. The clerks also inspected every empty container that came to port. The ILWU contends that, ironically, since September 11th this no longer happens with any regularity. This bill will ensure that work related to homeland security at our California ports will be performed in the United States instead of a foreign country. Opponents, writing in opposition to an earlier version of the bill (see discussion below), argued that the damage this bill will do to Californians attempting to participate in the global economy outweighs any of the benefits derived. For example, an individual wishing to purchase property in another country would be required to individually identify each piece of financial information to be sent out of the United States. Medical providers could prohibit individuals from seeking medical treatment in foreign countries due to the administrative burden and enhanced liability for the provider. (This opposition was received before the bill was amended to contain only those provisions related to information essential to homeland security). Legislative History of This Bill : The provisions of this bill were originally contained in SB 1492 (Dunn) which, in addition to addressing issues related to homeland security, also SB 888 Page 3 prohibited health care businesses from transmitting individually identifiable health information to a site outside of the United States. However, SB 1492 was recently amended to divide these provisions into two separate bills. Therefore, SB 1492 currently contains only those provisions related to medical privacy. The homeland security provisions of SB 1492 were amended into this bill. REGISTERED SUPPORT / OPPOSITION : Support American Federation of State, County and Municipal Employees California Labor Federation, AFL-CIO California School Employees Association International Longshore & Warehouse Union Ship Clerk's Association, Local 34 Opposition America's Health Insurance Plans Association of California Life & Health Insurance Companies California Healthcare Association Analysis Prepared by : Ben Ebbink / L. & E. / (916) 319-2091