CONTENTS OF THIS ISSUE:
House Passes Landmark China Normal Trade Relations Legislation
Institute Reviews State Impacts of FY 2001 Appropriations Bills
    House and Senate Appropriations Bills for Labor-HHS-Education
    House and Senate Agriculture Appropriations
    House Interior Appropriations
    Transportation Appropriations
Colusa Basin Watershed Integrated Resources Management Act Reviewed by Senate Committee
PPIC Discusses Increase in Poverty Rates for California Families
Senate Continues Mark Up of Electricity Restructuring Legislation
House Immigration Subcommittee Reviews H-1B Program
Agriculture-High Tech Alliance Launched
Software Piracy Losses Continue to Increase
California House Delegation Votes on China PNTR

After months of lobbying for and against by the Administration, business, and labor, the House on Wednesday, May 24, passed legislation (H.R. 4444) granting China permanent normal trade relations (PNTR) status. The vote, 237-197, reflected a more comfortable margin than was previously expected. Both parties ended up with more members voting for the bill than their previous estimates, with 164 Republicans and 73 Democrats voting for passage. The legislation paves the way for China’s accession to the World Trade Organization (WTO) and is praised by its supporters as ensuring that the United States will be able to take full advantage of opening markets in China. Opponents, however, argued to the end that China will not abide by its trade agreements with the United States and that PNTR will undermine human rights, labor, and environmental issues in China.

The margin of victory is attributable in part to a side agreement worked out between the two sides last week. See, Bulletin Vol. 7, No. 17 (5/18/00). Under the agreement, crafted by Reps. Doug Bereuter (NE) and Sander Levin (MI), language is included to ensure that the United States can retaliate against any surge in imports from China. Provisions authorizing technical assistance to China for the establishment of democratic institutions, and a task force on prisons and forced labor are also included in the bill. Finally, Congress will have the opportunity annually to vote on China’s human rights record.

Before the final vote, Rep. Howard Berman (Valley Village) offered a motion to recommit the bill to Committee. The motion directed the Committee to include language clarifying that the United States would withdraw PNTR status from China if it blockaded or invaded Taiwan. The motion failed 176-258.

Companies in California, wanting to ensure their participation in China’s vast untapped market, put winning PNTR status at the top of their legislative agenda this year. In 1998, California exports to China valued almost $2.5 billion, an 8.7 percent increase over the year before, and almost a 50 percent increase over 1993 exports. On Tuesday, May 23, Jim Whittaker, Vice President of International Public Policy for Hewlett Packard, testified that China is expected to become the third largest semiconductor market and the second largest PC market by 2001, and that software, telecommunications, and Internet markets are also growing at an equally rapid pace. Mr. Whittaker testified on behalf of the U.S. High-Tech Industry Coalition on China at a May 23 hearing before the House Commerce Subcommittee on Finance and Hazardous Substances.

Although the issue is expected to pass in the Senate, action may be delayed. Majority Leader Trent Lott (MI) has indicated that floor action on appropriations bills may take higher priority, and opponents of the measure are threatening to offer numerous amendments to slow down consideration.

Given the intense interest in the subject, we have included at the end of this Bulletin a table of how members of the California congressional delegation voted on PNTR for China.
 

Institute Reviews State Impacts of FY 2001 Appropriations Bills
 

House and Senate Appropriations Bills for Labor-HHS-Education

This week, the California Institute reviewed the House and Senate versions of the FY 2001 Appropriations Bills for the Departments of Labor, Health and Human Services and Education. The House version of the bill would appropriate a grand total of $339.46 billion, while the Senate bill would appropriate $342.23 billion. The Senate Appropriations Subcommittee on Labor-HHS-Education marked up their version of the bill (S. 2553) on May 10, and the full committee completed work on May 11. The Senate committee report is S.Rept. 106-293. While the House subcommittee also marked up their bill on May 10, the full committee did not complete work until Tuesday, May 23, and no bill or report number was available at press time. The Institute report is available on our website in html text form at http://www.calinst.org/pubs/lheapp01.htm or in Adobe Acrobat (“pdf”) form at http://www.calinst.org/pubs/lheapp01.pdf .
 

House and Senate Agriculture Appropriations

This week, the Institute staff reviewed the FY01 Agriculture Appropriations bills (S. 2536 and H.R. 4461). Both the House and Senate proposals include approximately $75 billion total, with the Senate bill including about $100 million more than the House version. The Senate Appropriations Subcommittee on Agriculture marked up their version of the bill (S. 2536) on May 4, and the full committee completed work on May 9. The Senate committee report is S.Rept. 106-288. The House Agriculture Appropriations subcommittee marked up their bill (H.R. 4461) on May 4, and the full committee completed work on May 10. The House report is H.Rept. 106-619. The Institute report is available on our website in html text form at http://www.calinst.org/pubs/agapp01.htm or in Adobe Acrobat (“pdf”) form at http://www.calinst.org/pubs/agapp01.pdf .
 

House Interior Appropriations

The Institute also reviewed the House Interior appropriations bill, which includes a total of $14.6 billion for FY01. The House Appropriations Subcommittee on the Interior marked up their version of the bill on May 17, and the full committee completed work on Thursday, May 25. No bill or report number was available at press time. The Institute report on the House Interior appropriations bill is available on our website in html text form at http://www.calinst.org/pubs/interapp01.htm or in Adobe Acrobat (“pdf”) form at http://www.calinst.org/pubs/interapp01.pdf .
 

Transportation Appropriations

In addition, as reported previously, Institute staff reviewed the $45 billion FY01 Transportation Appropriations bill (H.R. 4475) as passed by the House Appropriations full Committee on May 16, and the results of that review are available on the Institute’s website at

http://www.calinst.org/pubs/tranapp01.htm .
 

Colusa Basin Watershed Integrated Resources Management Act Reviewed by Senate Committee

On Wednesday, May 24, the Senate Energy and Natural Resource’s Water and Power Subcommittee met to mark up a number of bills, including S. 2248, a measure on the million-acre Colusa Basin watershed. The bill would help reduce the devastation due to flooding by restoring the area’s natural ability to absorb water – an ability that has been affected by human activity. The program includes conservation measures to restore the ecosystem by increasing groundwater recharge and also creates 10,000 acres of wetlands.

Gaye Lopez, Manager of the Colusa Basin Drainage District, testified in support of the measure and noted that an identical measure to S. 2248 was approved in both the House and Senate in the 105^th Congress. The measure, however, was dropped from that year’s omnibus bill because of problems not related to the proposal. Ms. Lopez testified that “in 1995 and again in 1998 the three counties suffered an estimated $100 million in damages” from floods; they hope to find some relief from this devastation through S. 2248.

Commissioner Eluid L. Martinez of the Department of Interior’s Bureau of Reclamation testified in opposition to the measure. The Administration believes that this project should be incorporated into the CALFED initiatives in the Bay-Delta program concerning water management and environmental problems. The Administration also objects to the measure because it would provide blanket authority and funding for many new water projects in the Colusa Basin; an action they believe to be “premature.”

Senator Dianne Feinstein submitted a letter to the Subcommittee voicing her strong support for the bill. For more information, contact the Water and Power subcommittee at (202)224-2564.
 

PPIC Discusses Increase in Poverty Rates for California Families

In Trends in Family and Household Poverty, the latest report from the Public Policy Institute of California (PPIC), Hans P. Johnson and Sonya M. Tafoya study changes in poverty rates by household and family types in California and compare their findings to nationwide statistics.

When compared with the rest of the nation, California poverty rates have risen in the following household types: married with no children, married with children, single parent with children, children living with other family, and those in non-family households. Poverty rates increased the most in married couples with children – over six percent since 1978-79.

The report also finds that education, employment and immigration play a specific role when explaining increases in poverty rates in California. Forty-three percent of California’s married couples with children were headed by an immigrant, compared to just 11 percent in the rest of the country; half of the immigrant heads of these households did not have a high-school diploma. The report also finds that California has a high proportion of single parents who have not graduated from high school, which accounts for the increase in the poverty rates of single parents in California.

For more information or for a copy of the report, contact PPIC at (415)291-4400 or at their web site: http://www.ppic.org .
 

Senate Continues Mark Up of Electricity Restructuring Legislation

On Wednesday, May 24, the Senate Energy and Natural Resources Committee met for its second day of mark up of S. 2098 (Murkowski – AK), a bill addressing utility deregulation. See, Bulletin, Vol. 7, No. 17 (5/18/00). No votes occurred on any of the 30 amendments proposed to the bill, while Committee members continued their discussion on many recurring issues. The bulk of the discussion revolved around deciding which governmental agency would have control over transmission of electricity across state lines.

This week’s debate focused on: whether or not nuclear plants will be able to raise enough money to prepare for deregulation; retail reciprocity; and the Administration’s proposal to mandate that companies purchase more than seven percent of their power from renewable sources.

Chairman Murkowski plans to hold a third day of mark up on June 7, after which time, if a comprehensive package does not emerge, he plans to consider “alternatives.”

For more information contact the committee at (202) 224-4971 or at their web site: http://www.senate.gov~energy .
 

House Immigration Subcommittee Reviews H-1B Program

On Thursday, May 25, the House Judiciary’s Immigration and Claims Subcommittee held a hearing on the H1-B visa program, specifically the implementation of the American Competitiveness and Workforce Improvement Act of 1998 (ACWIA). Since the Act was signed into law in 1998, the Department of Labor and the Immigration and Naturalization Service (INS) have been developing regulations to implement the new provisions. The public comment period has already taken place, resulting in nearly 600 pages of comment.

A number of witnesses testified at the hearing, including: John Fraser, Deputy Administrator, Employment Standards Administration, U.S. Department of Labor; John Spotila, Administrator, Office of Information and Policy and Regulatory Affairs, U.S. Office of Management and Budget; John Templeton, Co-Convener, Coalition for Fair Employment in Silicon Valley, accompanied by Kevin Hinkston and Dr. Philip Emeagwali of the same organization; and Frank Brehm, Northwest Coordinator Programmer’s Guild.

Chairman Lamar Smith (TX) opened by voicing his concerns about the delay in implementation and the message that it sends to American workers. He pointed out, and the Administration acknowledged, that currently there are no safeguards to prevent U.S. employers from firing American workers and replacing them with foreign ones.

Both John Spotila and John Fraser responded to the Chairman’s concerns by pointing out that the process of developing regulations must be done carefully and thoroughly, taking into account all public comment. Even though Chairman Smith attempted to persuade Mr. Spotila to provide a general time frame for the completion of the review, he could not do so.

John Templeton, from the Coalition for Fair Employment in Silicon Valley, criticized ACWIA’s “lack of regulations.” He commented that ACWIA does not ” enforce such basic laws as the Civil Rights Act, of 1964″ which in turn, “undermines the foundation of immigration law.”

For more information, contact the subcommittee at (202)225-5727.
 

Agriculture-High Tech Alliance Launched

The Semiconductor Industry Association (SIA) and the Wine Institute took the lead in establishing a new coalition called the Agriculture-High Technology Alliance. The group is co-chaired by George Scalise, President of the SIA, and John DeLuca, President and CEO of the Wine Institute, and represents the following nine broad based industry associations: Agricultural Council of California; California Farm Bureau Federation; Consumer Electronics Association; Electronic Industries Alliance; Information Technology Industry Council; MultiMedia Telecommunications Association; Semiconductor Industry Association; Western Growers Association; and Wine Institute.

The mission of the Alliance is to identify public policy issues for joint action by the agriculture and high technology industries. The Alliance’s initial policy goal is permanent normal trade relations status for China. In addition, the Alliance will look at other areas of mutual interest, including education and electronic commerce.

Mr. DeLuca addressed the formation of the Alliance at a California State Society Golden State Roundtable lunch on May 16. See, Bulletin, Vol. 7, No. 17 (5/18/00).
 

Software Piracy Losses Continue to Increase

Revenue losses due to software piracy rose to over $12 billion in 1999, and cumulatively topped $59 billion for the last five years. The losses are documented in a study contracted by the Business Software Alliance and the Software Information Industry Association. The study was conducted by independent firm of International Planning & Research.

The report concludes that in 19 countries over 80 percent of all business software applications are pirated. These countries are led by Vietnam (98% piracy rate), China (91%), Russia (90%), and Indonesia (85%). Although piracy losses in the United States and Canada have steadily declined from 32 percent to 25 percent over the past year, the region continues to post the highest losses, because of the size of its markets. Revenue losses for the United States and Canada led the world with $3.62 billion in 1999, accounting for 26 percent of the total. Losses to Western European countries, however, also rose. With five of the ten highest-loss countries located there, piracy accounted for revenue losses of $3.6 billion, only two million behind Canada and the United States.

The complete report can be accessed at either: http://www.bsa.org or http://www.siia.net/piracy .
 

California House Delegation Votes on China PNTR

Votes of House members of the California congressional delegation on H.R. 4444, to extend permanent normal trade relations status to China:

Yea (31)
Becerra, Xavier (Los Angeles)
Bilbray, Brian (Imperial Beach)
Bono, Mary (Palm Springs)
Calvert, Ken (Corona)
Campbell, Tom (Campbell)
Capps, Lois (Santa Barbara)
Cox, Christopher (Newport Beach)
Cunningham, Randy “Duke” (San Diego)
Dixon, Julian (Los Angeles)
Dooley, Calvin (Visalia)
Doolittle, John (Rocklin)
Dreier, David (San Dimas)
Eshoo, Anna (Atherton)
Gallegly, Elton (Simi Valley)
Herger, Wally (Marysville)
Kuykendall, Steven (Rancho Palos Verdes)
Lewis, Jerry (Redlands)
Lofgren, Zoe (San Jose)
Martinez, Matthew (Monterey Park)
Matsui, Robert (Sacramento)
McKeon, Howard “Buck” (Santa Clarita)
Miller, Gary (Diamond Bar)
Ose, Doug (Sacramento)
Packard, Ron (Oceanside)
Radanovich, George (Mariposa)
Rogan, James (Glendale)
Royce, Ed (Fullerton)
Tauscher, Ellen (Pleasanton)
Thomas, William (Bakersfield)
Thompson, Michael (St. Helena)
Waxman, Henry (Los Angeles)

Nay (21)
Baca, Joseph (San Bernardino)
Berman, Howard (Valley Village)
Condit, Gary (Ceres)
Farr, Sam (Carmel)
Filner, Bob (San Diego)
Horn, Steve (Long Beach)
Hunter, Duncan (Alpine)
Lantos, Tom (San Mateo)
Lee, Barbara (Oakland)
Millender-McDonald, Juanita (Carson)
Miller, George (Martinez)
Napolitano, Grace (Norwalk)
Pelosi, Nancy (San Francisco)
Pombo, Richard (Tracy)
Rohrabacher, Dana (Huntington Beach)
Roybal-Allard, Lucille (Los Angeles)
Sanchez, Loretta (Anaheim)
Sherman, Brad (Sherman Oaks)
Stark, Fortney “Pete” (Fremont)
Waters, Maxine (Los Angeles)
Woolsey, Lynn (Petaluma)

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