House File 2490 - Introduced HOUSE FILE BY SHOULTZ Passed House, Date Passed Senate, Date Vote: Ayes Nays Vote: Ayes Nays Approved A BILL FOR 1 An Act to create the model jobs, trade, and democracy Act. 2 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 3 TLSB 6146YH 81 4 jr/cf/24 PAG LIN 1 1 Section 1. MODEL JOBS, TRADE, AND DEMOCRACY ACT == 1 2 LEGISLATIVE FINDINGS. This Act shall be known and may be 1 3 cited as the "Model Jobs, Trade, and Democracy Act". 1 4 The general assembly finds all of the following: 1 5 1. Democratic, accountable governance in the states 1 6 generally, and specifically the authority granted by Article 1 7 III of the Constitution of the State of Iowa to the Iowa 1 8 general assembly to enact statutes governing the state of 1 9 Iowa, is being undermined by international commercial and 1 10 trade rules enforced by the world trade organization and 1 11 established by the North American free trade agreement, and is 1 12 further threatened by similar provisions in an array of 1 13 pending trade agreements. 1 14 2. Trade agreements have impacts which extend 1 15 significantly beyond the bounds of traditional trade matters 1 16 such as tariffs and quotas and instead grant foreign investors 1 17 and service providers certain rights and privileges regarding 1 18 operations within the state of Iowa, subject Iowa laws to 1 19 challenge as barriers to trade in the binding dispute 1 20 resolution bodies that accompany the pacts, and place limits 1 21 on the future policy options of state legislatures. 1 22 3. The North American free trade agreement grants foreign 1 23 firms new rights and privileges for operating within Iowa that 1 24 exceed those granted to businesses domiciled within the United 1 25 States under state and federal law. The North American free 1 26 trade agreement has already generated regulatory takings cases 1 27 against state and local land use decisions, state 1 28 environmental and public health policies, adverse state court 1 29 rulings, and state and local contracts that would not have 1 30 been possible in state or federal courts. 1 31 4. When states agree to government procurement provisions 1 32 contained in trade agreements, common economic development and 1 33 environmental policies, such as buy local laws and policies to 1 34 prevent the transfer of state jobs to foreign jurisdictions, 1 35 as well as recycled content laws, could be subject to 2 1 challenge as barriers to trade as they contradict the 2 2 obligations in the trade agreements. 2 3 5. Trade agreements also curtail state regulatory 2 4 authority by placing constraints on future policy options. 2 5 The world trade organization services agreement could 2 6 undermine state efforts to expand health care coverage and 2 7 rein in health care costs, and places constraints on state and 2 8 local land use planning. New negotiations in the services 2 9 area could have additional implications for state regulation 2 10 of water, energy, higher education, professional licensing, 2 11 and other areas. 2 12 6. Federal government trade negotiators have failed to 2 13 consult in a meaningful way with state legislatures when 2 14 seeking the consent of states to comply with trade agreement 2 15 provisions. 2 16 7. A statutory mechanism that requires federal trade 2 17 negotiators to seek consent from state legislatures prior to 2 18 binding states to conform their laws to the terms of 2 19 international commercial agreements is necessary to adhere to 2 20 the tenets of federalism and state sovereignty. 2 21 Sec. 3. LEGISLATIVE DECLARATION OF POLICY. 2 22 1. STATE LEGISLATIVE POINTS OF CONTACT. Two state 2 23 legislative points of contact shall be appointed at the 2 24 beginning of each legislative session, one by the president of 2 25 the senate and one by the speaker of the house of 2 26 representatives. The points of contact shall do all of the 2 27 following: 2 28 a. Serve as the state's official liaisons with the federal 2 29 government and the general assembly's liaisons with the 2 30 governor on trade=related matters. 2 31 b. Serve as the designated recipients of federal requests 2 32 for consent or consultation regarding investment, procurement, 2 33 services, or other provisions of international trade 2 34 agreements which may encroach on state law or regulatory 2 35 authority reserved to the states. 3 1 c. Transmit information regarding federal requests for 3 2 consent to the office of the governor, the attorney general, 3 3 and all appropriate legislative committees. 3 4 d. Inform all members of the general assembly on a regular 3 5 basis about ongoing trade negotiations and dispute settlement 3 6 proceedings with implications for the state more generally. 3 7 e. Communicate the interests and concerns of the general 3 8 assembly to the United States trade representative regarding 3 9 ongoing and proposed trade negotiations. 3 10 f. Notify the United States trade representative of any 3 11 legislative action that has taken place. 3 12 2. CONSENT BY JOINT RESOLUTION. Consent by the state of 3 13 Iowa to any provision of a trade agreement shall only occur 3 14 through a joint resolution by the general assembly, presented 3 15 to the governor for signature as provided in this subsection. 3 16 All of the following actions are required before the state 3 17 of Iowa may consent to the terms of a trade agreement: 3 18 a. A request for consent must contain all of the 3 19 following: 3 20 (1) An explanation as to how the agreement of the state of 3 21 Iowa to the specific provisions of the agreement will change 3 22 or affect existing law. 3 23 (2) A statement of any administrative action proposed to 3 24 implement the trade agreement provisions in the state of Iowa. 3 25 (3) A draft of a joint resolution authorizing the state to 3 26 consent to the specific listed provisions of the agreement. 3 27 b. The speaker of the house of representatives and the 3 28 president of the senate shall refer the request for consent 3 29 and any attached documents to the appropriate standing 3 30 committees of the general assembly. 3 31 c. The standing committee considering a request for 3 32 consent shall hold a public hearing before any final action is 3 33 taken by the committee. 3 34 d. A joint resolution is passed by the senate and the 3 35 house of representatives and is presented to the governor for 4 1 signature in the same manner as a bill, authorizing the state 4 2 of Iowa to consent to specific listed provisions of an 4 3 agreement. 4 4 Sec. 4. PRIOR CONSENT VOID. Any consent that has been 4 5 given for the state of Iowa to be bound by the government 4 6 procurement rules of any international trade agreement on or 4 7 before the effective date of this Act is declared invalid and 4 8 the state of Iowa is not bound by the government procurement 4 9 rules of any international trade agreement for which consent 4 10 has been given by the state of Iowa to be bound to on or 4 11 before the effective date of this Act. 4 12 Sec. 5. FEDERAL LAW FOR STATE CONSENT. It is the sense of 4 13 the general assembly that the Congress of the United States 4 14 should pass legislation instructing the United States trade 4 15 representative to fully and formally consult individual state 4 16 legislatures regarding procurement, services, investment, or 4 17 any other trade agreement provisions that impact state laws or 4 18 authority before negotiations begin on such an agreement and 4 19 as they develop, and to seek consent from state legislatures 4 20 prior to binding states to conform their laws to the terms of 4 21 international trade agreements. Such legislation is necessary 4 22 to ensure the prior informed consent of the state of Iowa with 4 23 regard to future international trade and investment 4 24 agreements. 4 25 Sec. 6. NOTICE. The attorney general shall notify the 4 26 United States trade representative of the provisions set forth 4 27 in section 3 of this Act, in writing no later than July 1, 4 28 2006, and shall provide copies of such notice to the president 4 29 of the senate, speaker of the house of representatives, the 4 30 governor, and Iowa's congressional delegation. 4 31 EXPLANATION 4 32 This bill relates to international commercial and trade 4 33 rules enforced by the world trade organization and established 4 34 by the North American free trade agreement. The bill contains 4 35 a series of legislative findings concerning the trade 5 1 negotiation process. 5 2 The bill establishes a specific procedure for state consent 5 3 for future trade agreements, requiring the enactment of a 5 4 joint resolution, presented to the governor for signature, in 5 5 the same manner as a bill. All previous consents which did 5 6 not follow this process are declared void. 5 7 The bill calls on the United States Congress to enact 5 8 legislation instructing the United States trade representative 5 9 to consult individual state legislatures regarding 5 10 procurement, services, investment, or any other trade 5 11 agreement provisions that impact state laws or authority 5 12 before negotiations begin and as they develop, and to seek 5 13 consent from state legislatures prior to binding states to 5 14 conform their laws to the terms of international trade 5 15 agreements. 5 16 The bill requires the attorney general to notify the United 5 17 States trade representative and Iowa's congressional 5 18 delegation of the process to give consent to an agreement no 5 19 later than July 1, 2006. 5 20 LSB 6146YH 81 5 21 jr:nh/cf/24