BILL NUMBER: SB 1465 INTRODUCED
BILL TEXT
INTRODUCED BY Senator Yee
FEBRUARY 24, 2012
An act to add Title 10.5 (commencing with Section 91700) to the
Government Code, relating to state government, and making an
appropriation therefor.
LEGISLATIVE COUNSEL'S DIGEST
SB 1465, as introduced, Yee. California Agriculture and Clean
Energy (solar energy), biotech Export Loan Guarantee Financing
Program.
The California Industrial Development Financing Act establishes
the California Industrial Development Financing Advisory Commission,
consisting of the Treasurer, the Controller, the Director of Finance,
the Secretary of Business, Transportation and Housing, and the
Commissioner of Corporations.
This bill would create the California Agriculture and Clean Energy
(solar energy), biotech Export Loan Guarantee Financing Program, to
be implemented by the commission, to provide small businesses, as
defined, with financial and technical assistance. This bill would
also create the Export Financing Advisory Board, consisting of 11
members appointed by the Legislature, the Governor, and specified
state officials, to advise the commission on trends and opportunities
in export financing. Members of the board will serve at the pleasure
of their appointing authority and serve without compensation. This
bill would also create the Export Development Fund, a continuously
appropriated fund for the purposes of the program. By creating a
continuously appropriated fund and providing for the deposit of
moneys into the fund, this bill would make an appropriation.
Vote: 2/3. Appropriation: yes. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The Legislature finds and declares all of the
following:
(a) The great recession that began in 2007 has severely eroded
California's economy and the state must restore the agricultural and
clean energy (solar energy), biotech manufacturing and production
sectors by retaining jobs and promoting job growth in those sectors,
while improving revenue collections through an export financing loan
guarantee program for those sectors.
(b) International trade and expanding export markets have been an
important part of California's economic prosperity over the last 60
years. This legislation is necessary to assist California's most
successful and promising new and emerging businesses and industries
secure markets outside of the United States. The credit support
provided by this legislation is necessary to facilitate expansion of
financially secure businesses and industries that have insufficient
international experience or access to credit to secure financing from
private sources. The credit support provided by this legislation
will be used to facilitate export expansion and is intended to be
targeted to new or emerging ventures and provide temporary
assistance.
SEC. 2. Title 10.5 (commencing with Section 91700) is added to the
Government Code, to read:
TITLE 10.5. California Agriculture and Clean Energy (solar
energy), biotech Export Loan Guarantee Financing Program
91700. The following definitions shall apply to this title:
(a) "Board" means the Export Financing Advisory Board.
(b) "Commission" means the California Industrial Development
Financing Advisory Commission established pursuant to Section 91550.
(c) "Director" means the Executive Director of the California
Agriculture and Clean Energy (solar energy), biotech Export Loan
Guarantee Financing Program.
(d) "Financial institution" means any bank or savings and loan
association regulated by the state or the federal government, any
insurance company authorized to transact business in the state, and
any personal property broker or industrial loan company that is
regulated under state law.
(e) "Program" means the California Agriculture and Clean Energy
(solar energy), biotech Export Loan Guarantee Financing Program.
(f) "Small business" means an independently owned and operated
business that meets all of the following:
(1) Primarily engaged in agricultural support, production,
processing, and distribution or clean energy manufacturing and
production.
(2) Not dominant in its field of operation.
(3) The principal office is located in California and the officers
are domiciled in California.
(4) Together with affiliates it has 100 or fewer employees and has
average gross receipts of ten million dollars ($10,000,000) or less
over the previous three years.
(5) Creates and sells products that are at least 85 percent
produced and manufactured in California.
91701. The California Agriculture and Clean Energy (solar
energy), biotech Export Loan Guarantee Financing Program is hereby
established in the California Industrial Development Financing
Advisory Commission. The purpose of the program is to expand
employment and income opportunities through increased exports of
California goods, services, and agricultural commodities by providing
small businesses with financial and technical assistance on export
opportunities, exporting techniques, and financial assistance in
support of export transactions.
91702. The commission shall do all of the following:
(a) Implement this title and promulgate rules and regulations
necessary to carry out the responsibilities under this title,
including, but not limited to, establishing the program to insure,
coinsure, and provide loan guarantees to support export transactions.
The commission shall ensure that the program conforms to
international trade agreements of the United States.
(b) Create advisory groups as necessary to carry out the powers
and duties of the program.
(c) Publish an annual report critiquing the program, the continued
need for the program, and recommended changes to the program. The
report shall include, but not be limited to, an evaluation of the
program's impact on all of the following:
(1) Jobs created in the state by every program participant.
(2) Participation of private banks in export financing programs.
(3) Access by firms located in the state to federal export
financing programs.
(4) Export volume of firms located in the state.
(5) Other economic and social benefits to the state.
(d) Adopt criteria establishing which exporters and export
transactions shall be eligible for the insurance, coinsurance, and
loan guarantees as may be extended by the commission. Pursuant to
this subdivision, the commission shall adopt regulations to ensure
that all of the following criteria are met:
(1) Borrowers have a minimum equity interest in the business as
determined by the commission.
(2) The loan guarantees, insurance, and coinsurance are extended
exclusively to support the export of goods, services, and
agricultural commodities produced or grown primarily in the state by
companies or agricultural enterprises commercially domiciled in the
state, as defined in subdivision (b) of Section 25120 of the Revenue
and Taxation Code.
(3) That financing assistance using state funds shall be extended
only if at least one of the following circumstances is met:
(A) Assistance is part of a state match that may be required to
secure participation of California firms or agricultural enterprises
in federal, state, or private financing programs.
(B) If adequate financing assistance is not readily available from
public or private sources in a timely manner.
(e) Adopt collateral or security requirements to ensure the
reasonable expectation of the full repayment of loan guarantees and
solvency of any insurance and coinsurance program extended under this
title and to assist in evaluating the program.
(f) Consider and approve or reject any and all extensions of
insurance, coinsurance, or loan guarantees under this title.
(g) In order to expedite the implementation of this title, if a
loan guarantee does not exceed one hundred thousand dollars
($100,000), the commission may elect to delegate this approval
authority to the director. All approvals made by the director
pursuant to this paragraph shall be reported to, and reviewed by, the
commission at its next regular meeting.
(h) Consult with the office of the Governor to ensure that the
respective loan guarantee programs are not duplicative and that each
program makes full use of, to the extent practicable, the resources
of the other.
(i) Work to secure a delegated line of authority from the United
States Export-Import Bank in order to take advantage of this possible
new federal funding source.
(j) Develop a streamlined application and review process.
91703. (a) The director shall administer the program and perform
any duties delegated by the commission and shall exercise any other
power as may be necessary to carry out the purposes of this title.
The director shall provide export finance training for program staff
and other individuals involved in export finance assistance,
including any training sessions as may be provided by the United
States Export-Import Bank, the United States Department of Commerce,
or other organizations.
(b) The director shall have the power and authority to carry out
the following functions:
(1) To establish a network of contacts among those public and
private organizations that provide technical assistance and financial
support of exporting.
(2) To insure, coinsure, and guarantee loans related to qualified
export transactions pursuant to regulations adopted by the
commission.
(3) To seek public and private funding sources for the purpose of
guaranteeing loans.
(4) To coordinate to the maximum extent possible the efforts of
the program with programs and goals of the United States
Export-Import Bank, United States Department of Commerce, the United
States Small Business Administration, and other private and public
programs designed to provide export assistance and export-related
financing.
(5) Certify that exporters who borrow more than two hundred
thousand dollars ($200,000) create at least one job for each
increment thereof and retain those jobs through the repayment period
for the loan.
(6) Certify that exporters who borrow less than two hundred
thousand dollars ($200,000) retain all jobs at the time of
application through repayment of the loan.
(7) Take any other related actions as may be appropriate and
necessary to facilitate sale of export accounts receivable for
exporters located in the state.
(c) The director shall provide administrative assistance to the
board.
91704. (a) The Export Financing Advisory Board is hereby
established. The purpose of the board is to advise the commission on
trends and opportunities in export financing.
(b) The board shall consist of 11 members as follows:
(1) One member appointed by the Secretary of Food and Agriculture
who is knowledgeable about, and experienced in, the exporting and
export finance needs of California agriculture.
(2) Four members representing export firms, two each appointed by
the Governor and the Speaker of the Assembly, who are experienced in
exporting, knowledgeable about the needs and problems of small and
entrepreneurial exporters, and actively employed with an exporting
firm, export trading company, or export management company.
(3) Four members representing financial institutions, two each
appointed by the Governor and the Senate Committee on Rules, who
shall be experienced in export financing, knowledgeable about the
export financing needs and problems of small and entrepreneurial
exporters, and actively employed with financial institutions.
(4) Two members, one each appointed by the Treasurer and the
Controller, who shall be accomplished credit evaluation
representatives experienced in analyzing financial statements, such
as loan applications, and in evaluating the creditworthiness of the
types of loans, loan guarantees, and firms that are likely to come
before the board.
(c) The appointing authorities described in subdivision (a) shall
make their initial board appointments on or before April 1, 2013.
(d) Upon appointment of at least seven members under subdivision
(a), the board may commence formal action pursuant to this title, but
in no case shall this be later than June 1, 2013.
(e) The director shall call the initial meeting of the board and
serve as interim chair of the board until a chair has been elected.
(f) Board members shall serve at the pleasure of the appointing
authority and vacancies shall be filled by the appointing authority.
(g) Board members shall serve without compensation.
91705. The commission may charge fees, in amounts it determines,
for loan guarantees, insurance, and other services provided by the
program. Fees shall be deposited into the Export Development Fund,
created pursuant to Section 91707.
91706. Loan guarantees and insured export transactions made by
the commission under the program shall be secured by no less than 25
percent reserve in the Export Development Fund established pursuant
to Section 91707. The commission may require a higher reserve. The
commission shall adopt regulations on the terms and limits for loan
guarantees, but a loan guarantee shall not exceed any of the
following:
(a) Ninety percent of the required financing. However, the
commission may guarantee a higher percentage of the required
financing if there is evidence of lender credit exposure and adequate
analysis of foreign commercial and political risk.
(b) One million dollars ($1,000,000).
(c) The lesser of two years or the useful life of the product.
91707. (a) The Export Development Fund is hereby established in
the State Treasury.
(b) The fund is created for the purpose of receiving the following
moneys for the purposes of this title:
(1) State, federal, and nonpublic moneys.
(2) Insurance premiums and other fees earned by the program.
(3) Recoveries and collections on claims paid by the program.
(4) Moneys received from the return of investments of money in the
fund.
(c) Notwithstanding Section 13340, moneys in the fund are
continuously appropriated, without regard to fiscal year, for the
purposes of this title.
91708. Moneys in the Export Development Fund shall be paid out by
the Treasurer on warrants drawn by the Controller upon order of the
commission in furtherance of the purposes of this title, including
the payment of claims under loan guarantee and insurance programs,
payments for reinsurance, and payments required by state, federal, or
private export programs conducted by the commission.
91709. This title shall be implemented only to the extent that
funding is available for that purpose.