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
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          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
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          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