AB 1247, as introduced, Medina. Business investments: Small Business Financial Assistance Act of 2013.
Existing law, the California Small Business Financial Development Corporation Law, creates the California Small Business Board and the California Small Business Expansion Fund, a continuously appropriated fund, which includes General Fund moneys. Existing law authorizes the formation of small business financial development corporations to grant loans from, or guarantee loans made by a financial institution or financial company, as defined, against, moneys awarded to the corporation from the expansion fund for the purpose of stimulating small business development. Existing law authorizes a director designated by the Secretary of Business, Transportation and Housing to perform specified duties under that law. A violation of certain conflict-of-interest provisions by the director and other persons, as specified, is a crime.
This bill would revise and recast these provisions, and would transfer the administration of the California Small Business Financial Development Corporation Law to the Governor’s Office of Business and Economic Development and an executive director designated by the director of the office, as specified. The bill would expand the definitions of “financial institution” and “financial company” for those purposes. Because the above-described conflict-of-interest provisions would apply to the director and executive director, and other officers and employees, as specified, the bill would extend the application of a crime, and impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
Because this bill would expand the purposes for which a continuously appropriated fund is expended, the bill would make an appropriation.
Vote: 2⁄3. Appropriation: yes. Fiscal committee: yes. State-mandated local program: yes.
The people of the State of California do enact as follows:
Chapter 1 (commencing with Section 14000) of
2Part 5 of Division 3 of Title 1 of the Corporations Code is repealed.
Chapter 1 (commencing with Section 14000) is added
4to Part 5 of Division 3 of Title 1 of the Corporations Code, to read:
This chapter shall be known and may be cited as the
12California Small Business Financial Development Corporation
(a) It is the intent of the Legislature in enacting this
15chapter to promote the economic development of small businesses
16by making available capital, general management assistance, and
17other resources, including loan and equity investment services,
18personnel, and business education to small business entrepreneurs,
19including women and minority owned businesses, for the purpose
20of promoting the health, safety, and social welfare of the citizens
P3 1of California, to eliminate unemployment of the economically
2disadvantaged of the state, and to stimulate economic development,
3employment, minority group, women, and disabled persons
5(b) It is the further intent of the Legislature to provide a flexible
6means to mobilize and commit all available and potential resources
7in the various regions of the state to fulfill these objectives,
8including federal, state, and local public resources, and private
9debt and equity investment.
10(c) It is the further intent of the Legislature that corporations
11operating pursuant to this law, shall to the maximum extent
12feasible, coordinate with other job and business development
13efforts within their region directed toward implementing the
14purpose of this part.
15(d) It is the further intent of the Legislature to provide expanded
16resources allowing participation by small and emerging contractors
17in state public works contracts. Increased access to surety bonding
18resources will assist in supporting participation by those firms in
19public works contracts, and by stimulating increased participation
20by small firms, the state will benefit from increased competition
21and lower bid costs.
If any provision of this chapter or the application thereof
23to any person or circumstances is held invalid, this invalidity shall
24not affect other provisions or applications of the chapter which
25can be given effect without the invalid provision or application,
26and to this end the provisions of this chapter are severable.
Unless the context otherwise requires, the definitions
31in this section shall govern the construction of this chapter.
32(a) “Board of directors” means the board of directors of the
34(b) “Corporation” means any nonprofit California small business
35financial development corporation created pursuant to this chapter.
36(c) “Director” means the director of the Governor’s Office of
37Business and Economic Development.
38(d) “Executive director” means the person designated to this
39title by the director of the Governor’s Office of Business and
P4 1(e) “Expansion fund” means the California Small Business
3(f) “Loan committee” means a committee appointed by the
4board of directors of a corporation to determine the course of action
5on a loan application pursuant to Title 25 (commencing with
6Section 200000) of the Government Code.
7(g) “Trust fund” means the money from the expansion fund that
8is held in trust by financial institution or financial company. A
9trust fund is not a deposit of state funds and is not subject to the
10requirements of Section 16506 of the Government Code.
11(h) “Trust fund account” means an account within the trust fund
12that is allocated to a particular small business financial
13development corporation for the purpose of paying loan defaults
14and claims on bond guarantees for a specific small business
15financial development corporation.
The executive director shall do all of the following:
20(a) Administer this chapter.
21(b) Expeditiously approve or disapprove the articles of
22incorporation and any subsequent amendments to the articles of
23incorporation of a corporation. This determination shall be based
24upon the following:
25(1) Review of the articles of incorporation and bylaws of the
26corporation to determine whether they contain the provisions
27required by this chapter and conform with the regulations adopted
28pursuant to this chapter.
29(2) A determination as to whether the legislative intent expressed
30in Section 14001 shall be served by the proposed corporation.
31(3) A determination as to whether the responsibility, character,
32and general fitness of the individuals who will manage the
33corporation are such as to command the confidence of the state
34and to warrant the belief that the business of the proposed
35corporation will be honestly and efficiently conducted in
36accordance with the intent and purpose of this chapter and that
37they include representatives of the financial and business
38community, as well as the economically disadvantaged.
39(c) Have the accounts of each corporation formed under this
40chapter audited as of the close of business on June 30 of each year.
P5 1(d) Have the portfolio of each corporation audited a minimum
2of once a year. Material audit exceptions that are not corrected by
3the corporation within a reasonable period of time may result in
4the suspension of the corporation pursuant to Section 200008 of
5the Government Code.
6(e) Review reports from the Department of Business Oversight
7and inform corporations as to what corrective action is required.
8(f) Examine, or cause to be examined, at any reasonable time,
9all books, records, and documents of every kind, and the physical
10properties of a corporation. The inspection shall include the right
11to make copies, extracts, and search records.
12(g) Attend and participate at corporation meetings. The executive
13director, or his or her designee, shall be an ex officio, nonvoting
14representative on the board of directors and loan committees of
15each corporation. The executive director shall meet with the board
16of directors of each corporation at least once each fiscal year,
17commencing January 1, 2014.
Upon approval by the executive director to become a
22corporation, an entity shall adopt or amend its articles of
23incorporation to comply with the following:
24(a) The name of the corporation shall include the words “small
25business financial development corporation,” except for those
26corporations formed pursuant to this chapter prior to 2002, which
27may also be called “small business development corporations,” or
28those formed prior to 1985, which may also be called “rural or
29urban development corporations.”
30(b) The purposes for which the corporation is formed, which
31shall be those specified in Section 14001. This requirement shall
32not be deemed to preclude a statement of powers.
33(c) A geographical description of the corporation’s service area.
34(d) The name and addresses of seven or more persons who are
35to act in the capacity of directors until the selection of their
37(e) That the corporation is organized pursuant to the California
38Small Business Financial Development Corporation Law.
If the executive director determines that the facts
40disclosed by the investigation provided by Section 14004 are true
P6 1and finds that the proposed incorporation meets all the requirements
2of this chapter, the executive director shall approve the articles of
3incorporation and endorse the approval thereon and forward the
4same to the Secretary of State for his or her approval and filing.
5Likewise, the executive director shall approve or disapprove of all
6amendments to the articles. The executive director shall endorse
7the approval on the amendatory document before the document is
8forwarded to the Secretary of State for his or her approval and
The corporation’s existence as a small business
11development corporation begins upon the filing of the articles with
12the Secretary of State and continues perpetually, unless otherwise
13expressly provided for by law.
(a) Any request for proposal for selection of a
15corporation shall require the winning bidder to adopt or amend its
16bylaws to include provisions governing the election and
17qualification of directors, the establishment and functions of loan
18committees of the corporation, and the method of selecting the
19representative of the corporation on the board.
20(b) The bylaws shall provide for removal of officers only by a
21two-thirds vote of the directors of the corporation.
Each corporation shall have provisions establishing a
23grievance procedure for employees, clients, or potential clients,
24to appeal a decision or obtain redress of an action done by the staff
25or loan committee of the corporation. The procedures shall be
26established in writing during the probationary period of a new
The executive director may authorize the establishment
29of a new corporation using a request for proposal process.
The Nonprofit Public Benefit Corporation Law (Part
312 (commencing with Section 5110) of Division 2 of this title)
32applies to corporations formed under this chapter, except as to
33matters otherwise provided for in this chapter.
For six months following the establishment of a
35corporation, commencing upon filing of the articles of
36incorporation with the Secretary of State, a corporation shall be
37on probation. While on probation, a corporation may be suspended
38if suspension is recommended by the executive director. This
39suspension is nonappealable and not subject to the procedures for
40suspension applicable to a corporation not on probation.
The corporate powers of a corporation shall be exercised
4by the board of directors.
A request for proposal for selection of a corporation
6shall require the winning bidder to adopt or amend its bylaws to
8(a) A person may not serve on a board of directors who is not
9a resident of, or person conducting business in, the service area
10described in the articles of incorporation.
11(b) Each board of directors shall include representatives from
12all of the following:
13(1) The financial community.
14(2) The business community.
15(3) The economically disadvantaged.
16(c) Not more than one employee of the corporation may serve
17on the board of directors at any one time.
18(d) A person who has a financial interest related to a matter over
19which the board has authority may not make, participate in making,
20or in any way attempt to influence that matter.
If any director ceases to meet the qualifications
22established in Section 14014, he or she shall immediately vacate
23his or her position as a director and such position shall be deemed
If any vacancy occurs in the elective membership of
26the board of directors through death, resignation, or otherwise, the
27remaining directors shall elect a person representing the appropriate
28category to fill the vacancy for the unexpired term.
(a) The office shall establish new small business
30financial development corporations pursuant to the procedures
31otherwise established by this chapter in the following areas:
32(1) San Jose.
33(2) Santa Ana.
34(3) San Fernando Valley.
36(b) Upon an appropriation in the annual Budget Act for this
37purpose, the office shall establish a small business financial
38development corporation in southeast Los Angeles.
39(c) In furtherance of the purposes of this chapter, up to one-half
40of the trust funds may be used to guarantee loans utilized to
P8 1establish a Business and Industrial Development Corporation
2(BIDCO) under Division 15 (commencing with Section 31000)
3of the Financial Code.
Every corporation shall provide for, and maintain a
8central staff to perform, all administrative requirements of the
9corporation, including all those functions required of a corporation
10by the director.
Reasonable costs incurred by a corporation in the
12creation and maintenance of a central staff shall be paid to the
13corporation from state funds, including a portion of the interest
14earned on the expansion fund and the corporation’s trust fund
15account, if the corporation has a trust fund account, otherwise, on
16the expansion fund.
A corporation shall report to the executive director, or
18his or her designated representative, all statistical and other reports
19required by this chapter, responses to audit reports, budget
20requirements, and other information relating to the establishment,
21monitoring, and suspension of a corporation.
A corporation shall make a report to the executive
23director, as of the close of business on June 30 of each year,
24describing the corporation’s activities and any additional
25information requested by the executive director, on or before
26August 1 of each year.
It shall be unlawful for the director, executive director,
31or any person who is an officer, director, or employee of a
32corporation, or who is a member of a loan committee, or who is
33an employee of the office to do any of the following:
34(a) Ask for, consent, or agree to receive, any commission,
35emolument, gratuity, money, property, or thing of value for his or
36her own use, benefit, or personal advantage, for procuring or
37endeavoring to procure for any person, partnership, joint venture,
38association, or corporation, any loan, guarantee, financial, or other
39assistance from any corporation.
P9 1(b) Borrow money, property, or to benefit knowingly, directly
2or indirectly, from the use of the money, credit, or property of any
4(c) Make, maintain, or attempt to make or maintain, a deposit
5of the funds of a corporation with any other corporation or
6association on condition, or with the understanding, expressed or
7implied, that the corporation or association receiving the deposit
8shall pay any money or make a loan or advance, directly or
9indirectly, to any person, partnership, joint venture, association,
10or corporation, other than to a corporation formed under this
It shall be unlawful for the director, executive director,
13or any person who is an officer or director of a corporation, or who
14is an employee of the office, to purchase or receive, or to be
15otherwise interested in the purchase or receipt, directly or
16indirectly, of any asset of a corporation, without paying to the
17corporation the fair market value of the asset at the time of the
Violation of any provision of this article shall constitute
Title 25 (commencing with Section 200000) is added
22to the Government Code, to read:
This title shall be known and may be cited as the Small
30Business Financial Assistance Act of 2013.
The Legislature finds that:
32(a) Small businesses form the core of the California economy
33and that it is in the interest of the state to increase opportunities
34for entrepreneurs, the self-employed, and microbusiness and small
35business owners to have better access to capital and other technical
37(b) Unemployment in California is a matter of statewide concern
38requiring concerted public and private action to develop
39employment opportunities for the disadvantaged, youth, veterans,
40and unemployed persons.
P10 1(c) It is necessary to direct additional capital, general
2management assistance, business education, and other resources
3to encourage the development of small business opportunities,
4particularly for minority, women, and disabled persons, to alleviate
Unless the context otherwise requires, the definitions
10in this section shall govern the construction of this title.
11(a) “Corporation” means any nonprofit California small business
12financial development corporation created pursuant to Chapter 1
13(commencing with Section 14000) of Part 5 of Division 3 of Title
141 of the Corporations Code.
15(b) “Director” means the director of the Governor’s Office of
16Business and Economic Development.
17(c) “Employment incentive loan” means a loan to a qualified
18business or to a business located within an enterprise zone, as
19defined in subdivision (d) of Section 7072.
20(d) “Executive director” means the person designated to this
21title by the director of the Governor’s Office of Business and
23(e) “Expansion fund” or “expansion fund” means the California
24Small Business Expansion Fund.
25(f) “Financial company” means banking organizations, including
26national banks and trust companies, savings and loan associations,
27state insurance companies, mutual insurance companies, and other
28public and private banking, lending, retirement, and insurance
30(g) “Financial institution” means banking organizations,
31including national banks and trust companies authorized to conduct
32business in California and state-chartered commercial banks, trust
33companies, community development financial institutions,
34microlenders, and savings and loan associations.
35(h) “Loan committee” means a committee appointed by the
36board of directors of a corporation to determine the course of action
37on a loan application pursuant to this title.
38(i) “Office” means the Governor’s Office of Business and
P11 1(j) Unless otherwise defined by the director by regulation, “small
2business loan” means a loan to a business defined as an eligible
3small business as set forth in Section 121.3-10 of Part 121 of
4Chapter 1 of Title 13 of the Code of Federal Regulations, including
5those businesses organized for agricultural purposes that create or
6retain employment as a result of the loan. From time to time, the
7director shall provide guidelines as to the preferred ratio of jobs
8 created or retained to total funds borrowed for guidance to the
10(k) “Trust fund” means the money from the expansion fund that
11is held in trust by a financial institution or financial company. A
12trust fund is not a deposit of state funds and is not subject to the
13requirements of Section 16506.
14(l) “Trust fund account” means an account within the trust fund
15that is allocated to a particular small business financial
16development corporation for the purpose of paying loan defaults
17and claims on bond guarantees for a specific small business
18financial development corporation.
19(m) “Trustee” means the lending institution or financial company
20selected by the office to hold and invest the trust funds. An
21 agreement made pursuant to this title and the trustee shall not be
22construed to be a deposit of state funds.
(a) There is within the Governor’s Office of Business
27and Economic Development the California Business Investment
28Service, which shall, among other things, assist businesses seeking
29new capital resources.
30(b) Pursuant to this title, the office may establish one or more
31programs administered regionally under contract with small
32business financial development corporations. Programs established
33pursuant to this title may include the following types of financial
35(1) Loan guarantees.
36(2) Direct loans.
37(3) Disaster assistance loans.
38(4) Surety bond guarantees.
P12 1(c) In all of their state-funded programs, the corporations shall,
2to the extent practicable, be complementary to, and not competitive
3with, commercial lenders and other state and federal programs.
To implement its responsibilities, a corporation shall
5undertake a program that shall include, but not be limited to, the
7(a) Outreach to low-resource small businesses and
8microbusinesses. The corporations located in rural areas shall give
9priority to low-resource farmers, rural, and agriculturally related
11(b) Collaboration with other organizations and lenders to identify
12and assist those businesses that are creditworthy but face
13impediments to accessing conventional sources because of reasons,
14such as low equity, inadequate collateral, unacceptable legal
15structure (such as a co-op or nonprofit organization), management
16inadequacies, and language problems.
17(c) To the extent possible, bringing all possible financial
18resources (low-interest lenders, BIDCOs, MESBICs, other
19guarantors, etc.) to bear on the borrower’s problems.
20(d) Technical assistance to businesses receiving loans or
21guarantees that will maximize the probability of loan repayment.
22(e) Ongoing strategies for increasing program resources through
23private sector involvement and nonstate funds.
24(f) A program for collecting and liquidating defaulted loans so
25that the corporations can qualify to become full-service lenders
26under the Small Business Administration. Corporations located in
27rural areas shall, in addition, try to qualify for lender status under
28the Farmers Home Administration.
29(g) Become an agent for other lenders and guarantors.
If regulations have not already been adopted under
34Chapter 1 (commencing with Section 14000) of Part 5 of Division
353 of Title 1 of the Corporations Code, as that chapter read on
36January 1, 2013, then the office shall adopt regulations concerning
37the implementation of this title, Chapter 1 (commencing with
38Section 14000) of Part 5 of Division 3 of Title 1 of the
39Corporations Code, and direct lending as emergency regulations
40in accordance with Chapter 3.5 (commencing with Section 11340)
P13 1of Part 1 of Division 3 of Title 2. The adoption of these regulations
2is an emergency and necessary for the immediate preservation of
3the public peace, health and safety, or general welfare within the
4meaning of subdivision (b) of Section 11346.1. Notwithstanding
5subdivision (e) of Section 11346.1, the regulations shall not remain
6in effect for more than 180 days unless the office complies with
7all provisions of Chapter 3.5 (commencing with Section 11340)
8of Part 1 of Division 3 of Title 2, as required by subdivision (e) of
9Section 11346.1. This section also applies to any direct loan
10program administered by the office.
The executive director shall do all of the following:
12(a) Administer this title.
13(b) Contract for services under this title and Chapter 1
14(commencing with Section 14000) of Part 5 of Division 3 of Title
151 of the Corporations Code.
16(c) In accordance with available resources, use branch offices
17for the purposes of making the programs under this title accessible
18to all areas of the state.
19(d) Require each corporation to submit an annual written plan
21(e) Authorize the distribution, transfer, and
22moneys in the expansion fund and trust funds.
23(f) Authorize the investment of expansion and trust fund moneys.
24(g) Oversee the operations of one or more programs authorized
25pursuant to this title.
26(h) Approve, suspend, or terminate a corporation’s ability to
27participate in a program under this title.
28(i) Advise the Governor, the director, and the Small Business
29Advocate regarding issues and programs affecting California’s
30small business community, including, but not limited to, business
31innovation and expansion, export financing, state procurement,
32management and technical assistance, venture capital, and financial
The use of state funds paid out to the trust fund and
35the return on those funds from investment pursuant to Section
36200014 is conditional pursuant to Sections 200008 and 200015.
37Each corporation shall enter into a written signed agreement with
38the state at the beginning of each fiscal year. The agreement shall
39govern the activities in which the corporations engage, the
40investment of state funds and its return, and the budgeted
P14 1administrative expenses the corporations may incur. In the event
2the state and corporation do not reach an agreement, or the state
3finds the corporation has violated the terms of an active agreement,
4the state may take any action under Section 200008 or 200015, or
5any other action as appropriate. In the event the state and
6corporation do not reach agreement or the state finds the
7corporation has violated the terms of an active agreement, the
8corporation shall have no authority to withdraw or encumber the
9trust fund or the return of those funds by the issuance of guarantees,
10by incurring expenses against the fund and its return in any manner
11whatsoever, and the state may take any action under Section
12200008 or 200015, or any other action as appropriate. Any
13guarantee or other encumbrance made by the corporation in
14violation of this section shall be null and void, and neither the state
15nor the trust fund will be liable therefor.
(a) Upon a finding by the executive director that
17irreparable harm may occur if guarantee or direct loan authority
18is not temporarily withdrawn from a corporation, the executive
19director may temporarily withdraw guarantee or direct loan, or
20both, authority from a corporation. The notice of temporary
21withdrawal sent to the corporation shall specify the reasons for the
23(1) As used in this section, “guarantee and direct loan authority”
24means the authority to make or guarantee any loan that encumbers
25funds in a trust fund account, any account or subaccount under the
26direct control of the office or other state entity, or the expansion
28(2) The executive director shall
make one of the determinations
29specified in subdivision (c) within 30 days of the effective date of
30the temporary withdrawal, unless the corporation and the executive
31director mutually agree to an extension. The corporation shall have
32the opportunity to submit written material to the executive director
33addressing the items stated in the temporary withdrawal notice. If
34the executive director does not make any determinations within
3530 days, the temporary withdrawal shall be negated. The
36corporation’s yearly contract shall remain in effect during the
37period of temporary withdrawal, and the corporation shall continue
38to receive reimbursement of necessary operating expenses.
39(b) Failure of a corporation to substantially comply with the
40following may result in the suspension of a corporation:
P15 1(1) Regulations implementing the California Small Business
2Development Corporation Law (Chapter 1 (commencing with
3Section 14000) of Part 5 of Division 3 of Title 1 of the
5(2) Fiscal and portfolio requirements, as contained in the fiscal
6and portfolio audits specified in Section 14004 of the Corporations
8(3) Milestones and scope of work as contained in the annual
9contract between the corporation and the office.
10(c) Pursuant to subdivision (a) or (b), the executive director may
11do the following:
12(1) Terminate the temporary withdrawal.
13(2) Terminate the temporary withdrawal subject to the
14corporation’s adoption of a specified remedial action plan.
15(3) Temporarily withdraw, or continue to
16authority until a specified time. This determination by the executive
17director shall require a finding that the corporation has failed to
18comply with the California Small Business Development
19Corporation Law (Chapter 1 (commencing with Section 14000)
20of Part 5 of Division 3 of Title 1 of the Corporations Code).
21(4) Suspend the corporation.
22(5) Suspend the corporation, with suspension stayed until the
23corporation provides a remedial action plan to the executive
24director, and the executive director decides whether to repeal or
25implement the stayed suspension.
26(d) The determinations contained in paragraphs (4) and (5) of
27subdivision (c) require a finding that irreparable harm will occur
28unless the corporation is suspended.
considering a determination regarding the recommended
30suspension and possible remedial action plans, the executive
31director shall consider, along with other criteria as specified in
32subdivision (b), the corporation’s history and past performance.
33(f) Upon suspension of a corporation, the executive director
34shall transfer all funds, whether encumbered or not, in the trust
35fund account of the suspended corporation into either the expansion
36fund or temporarily transfer the funds to another corporation.
37(g) If the executive director decides to take any action against
38the corporation pursuant to paragraphs (2) to (5), inclusive, of
39subdivision (c), the corporation shall be notified of the action 10
40days before the effective date of the action. The corporation shall
P16 1have the right to appeal the executive director’s decision to the
2director within that 10-day period by sending notice to the director.
3Once the director receives notice that the action is being appealed,
4the executive director’s action shall be stayed except for temporary
5withdrawal of guarantee authority. Upon receipt of the notice, the
6director shall consider and make a final determination on the appeal
7within 30 days. The director may elect to take any of the actions
8listed in subdivision (h). The temporary withdrawal of corporation
9guarantee authority shall remain in effect until the director issues
11(h) Pursuant to subdivision (g), the director may do any of the
13(1) Terminate the action taken by the executive director.
14(2) Modify the action taken by the executive director subject to
15the adoption by the corporation of a specified remedial action plan.
16(3) Affirm the action taken by the executive director.
17(i) Following suspension, the corporation may continue its
18existence as a nonprofit corporation pursuant to the Nonprofit
19Public Benefit Corporation Law (Part 2 (commencing with Section
205110) of Division 2 of Title 1 of the Corporations Code), but shall
21no longer be registered with the Secretary of State as a small
22business financial development corporation. A corporation shall
23not enjoy any of the benefits of a small business financial
24development corporation following suspension.
25(j) The funds in the trust fund account of a corporation under
26temporary withdrawal shall be transferred to the expansion fund.
27Upon termination of the temporary withdrawal, unless the
28termination is caused by suspension, the funds of the corporation
29that were transferred to the expansion fund from the trust fund
30account shall be returned to the corporation’s trust fund account,
31notwithstanding Section 200011. While the funds of a corporation’s
32trust fund account reside in the expansion fund, use of the principal
33on the funds shall be governed by the implementing regulations
34specifying use of funds in the expansion fund. Interest on the funds
35moved from a corporation’s trust fund account upon temporary
36withdrawal shall be limited to payment of the corporation’s
37administrative expenses, as contained in the contract between the
38corporation and the state pursuant to this title.
(a) There is hereby continued in existence in the State
4Treasury the California Small Business Expansion Fund. All or a
5portion of the funds in the expansion fund may be paid out, with
6the approval of the Department of Finance, to a lending institution
7or financial company that will act as trustee of the funds.
8(b) The expansion fund and the trust fund shall be used to pay
9for defaulted loan guarantees issued pursuant to this title, surety
10bond losses, administrative costs of corporations, and those costs
11necessary to protect a real property interest in a defaulted loan or
13(c) The expansion fund and trust fund are created solely for the
14purpose of receiving state, federal, or local government money,
15and other public or private money to make loans, guarantees, and
16restricted investments pursuant to this title.
17(d) One or more accounts may be created by the executive
18director for corporations participating in one or more programs
19authorized under this title. Each account is a legally separate
20account, and shall not be used to satisfy loan or surety bond
21guarantees or other obligations of another corporation.
22(e) The amount of guarantee liability outstanding at any one
23time shall not exceed five times the amount of funds on deposit in
24the expansion fund plus any receivables due from funds loaned
25from the expansion fund to another fund in state government as
26directed by the Department of Finance pursuant to a statute enacted
27by the Legislature, including each of the trust fund accounts within
28the trust fund.
29(f) This section shall remain in effect only until January 1, 2018,
30and as of that date is repealed, unless a later enacted statute, that
31is enacted before January 1, 2018, deletes or extends that date.
(a) All money deposited in the expansion fund is
33hereby continuously appropriated, without regard to fiscal years,
34for the purposes of this title.
35(b) Except as specified in subdivision (a) of Section 200011,
36the state shall not be liable or obligated in any way beyond the
37state money that is allocated in the expansion fund from moneys
38from the General Fund moneys appropriated for such purposes.
(a) The executive director at his or her discretion,
40with the approval of the Director of Finance, may request the
P18 1trustee to invest those funds in the trust fund in any of the securities
2described in Section 16430. Returns from these investments shall
3be deposited in the expansion fund and shall be used to support
4the programs of this title.
5(b) Any investments made in securities described in Section
616430 shall be governed by the statement of investment policy
7prepared by the Treasurer pursuant to subdivision (a) of Section
(a) The state shall not be liable or obligated in any
10way beyond the money that is allocated and deposited in the
11corporation’s trust fund account.
12(b) The executive director may reallocate funds held within a
13corporation’s trust fund account.
14(1) The executive director shall reallocate funds based on which
15corporation is most effectively using its guarantee funds. If funds
16are withdrawn from a less effective corporation as part of a
17reallocation, the executive director shall make that withdrawal
18only after giving consideration to that corporation’s fiscal solvency,
19its ability to honor loan guarantee defaults, and its ability to
20maintain a viable presence within the region it serves. Reallocation
21of funds shall occur no more frequently than once per fiscal year.
22Any decision made by the executive director pursuant to this
23subdivision may be appealed to the director. The director has
24authority to repeal or modify any decision to reallocate funds.
25(2) The executive director may authorize a corporation to exceed
26the leverage ratio specified in Section 200009 or subdivision (a)
27of Section 200025, or subdivision (c) of Section 14017 of the
28Corporations Code, pending the annual reallocation of funds
29pursuant to this section. However, no corporation shall be permitted
30to exceed an outstanding guarantee liability of more than five times
31its portion of funds on deposit in the expansion fund.
(a) There is hereby created in the State Treasury the
33Small Business Disaster Recovery Loan Loss Reserve Account,
34as part of the expansion fund. This account shall be used to pay
35for unrecovered losses resulting from loan guarantees issued
36pursuant to subdivision (a) of Section 200030 or subdivision (b)
37of this section, and disaster loan guarantees issued prior to the
38effective date of this section that are in default.
39(b) Any lending institution that issues a low-interest loan that
40is guaranteed by resources in this account shall be fully reimbursed
P19 1for the guaranteed portion of principal and interest that result from
2a loan or loans that are in default. If there are insufficient funds in
3this account to fully satisfy all claimants, the full faith of the
4resources in the General Fund are pledged to satisfy the obligations
5of this account. This account may only guarantee as much loan
6dollar value as is specifically authorized by the Director of Finance
7with the concurrence of the Governor. This account shall receive
8all moneys transferred pursuant to Section 200013, and any
9unencumbered balances transferred to the California Small
10Business Expansion Fund pursuant to Chapters 11 and 12 of the
11First Extraordinary Session of the Statutes of 1989, and Chapter
121525 of the Statutes of 1990, as of July 1, 1992.
13(c) The Governor may utilize this authority to prevent business
14insolvencies and loss of employment in an area affected by a state
15of emergency within the state and declared a disaster by the
16President of the United States, by the Administrator of the United
17States Small Business Administration, or by the United States
18Secretary of Agriculture, or declared to be in a state of emergency
19by the Governor of California.
The Director of Finance, with the approval of the
21Governor, may transfer moneys in the Special Fund for Economic
22Uncertainties to the California Small Business Expansion Fund
23for use as authorized by the director, in an amount necessary to
24make loan guarantees pursuant to this title.
(a) The funds in the expansion fund shall be paid out
26to trust fund accounts by the Treasurer on warrants drawn by the
27Controller and requisitioned by the executive director, pursuant
28to the purposes of this title. The executive director may transfer
29funds allocated from the expansion fund to accounts, established
30solely to receive the funds, in lending institutions designated by
31the office to act as trustee. The lending institutions so designated
32shall be approved by the state for the receipt of state deposits.
33Interest earned on the trust fund accounts in lending institutions
34may be utilized by the corporations pursuant to the purposes of
36(b) Except as specified in subdivision (d), the executive director
37shall allocate and transfer money to trust fund accounts based on
38performance-based criteria. The criteria shall include, but not be
39limited to, the following:
40(1) The default record of the corporation.
P20 1(2) The number and amount of loans guaranteed by a
3(3) The number and amount of loans made by a corporation if
4state funds were used to make those loans.
5(4) The number and amount of surety bonds guaranteed by a
7(c) Any decision made by the executive director pursuant to
8subdivision (b) may be appealed to the director within 15 days of
9notice of the proposed action. The director may repeal or modify
10any reallocation and transfer decisions made by the executive
12(d) The criteria specified in subdivision (b) shall not apply to a
13corporation that has been in existence for five years or less. If not
14already adopted, the office shall develop regulations specifying
15the basis for transferring account funds to those corporations that
16have been in existence for five years or less.
Pursuant to this section and any regulations adopted
18pursuant to this title, the state has residual interest in the funds
19deposited by the state to a trust fund account and to the return on
20these funds from investments. On dissolution or suspension of the
21corporation, these funds shall be withdrawn by the executive
22director from the trust fund account and returned to the expansion
23fund or temporarily transferred to another trust fund account. This
24provision shall be contained in the trust instructions to the trustee.
Each trust fund account shall consist of a loan
26guarantee account, and, upon recommendation by the executive
27director, a bond guarantee account, each of which is a legally
28separate account, and the assets of one account shall not be used
29to satisfy loan guarantees or other obligations of another
30corporation. Not more than one-third of a trust fund account shall
31be allocated to a bond guarantee account. A corporation shall not
32use trust fund accounts to secure a corporate indebtedness. State
33funds deposited in the trust fund accounts, with the exception of
34guarantees established pursuant to this title, shall not be subject
35to liens or encumbrances of the corporation or its creditors.
(a) The financial institution that is to act as trustee of
37the trust fund shall be designated after review by the executive
38director. The corporation shall not receive money on deposit to
39support guarantees issued under this title without the approval of
40the executive director.
P21 1(b) State funds may not be used to finance an expense incurred
2by a corporation in a location not approved pursuant to a statewide
3plan. The prohibition against use of state funds also applies to the
4location of satellite offices, and the area served from a corporation
(a) The Small Business Loan Guarantee Program,
10which is hereby continued in existence, shall provide guarantees
11to loans offered by financial institutions to small businesses.
12(b) The Legislature finds and declares that the Small Business
13Loan Guarantee Program has enabled participating small businesses
14that do not qualify for conventional business loans or Small
15Business Administration loans to secure funds to expand their
16businesses. These small businesses would not have been able to
17expand their businesses in the absence of the program. The program
18has also provided valuable technical assistance to small businesses
19to ensure growth and stability. The study commissioned by former
20Section 14069.6 of the Corporations Code, as added by Chapter
21919 of the Statutes of 1997, documented the return on investment
22of the program and the need for its services. The value of the
23program has also been recognized by the Governor through
24proposals contained in the May Revision to the Budget Act of
252000 for the 2000-01 fiscal year.
The executive director, following notification to the
27director, may do all of the following:
28(a) Contract for services entered into pursuant to this title.
29(b) Hold public hearings.
30(c) Act as liaison between corporations, other state and federal
31agencies, lenders, and the Legislature.
32(d) Process and tabulate on a monthly basis all corporate reports.
33(e) Attend board meetings.
34(f) Attend and participate at corporation meetings. The executive
35 director, or his or her designee, shall be an ex officio, nonvoting
36representative on the board of directors and loan committees of
37each corporation. The executive director shall meet with the board
38of directors of each corporation at least once each fiscal year.
P22 1(g) Assist corporations in applying for public and private funding
2opportunities, and in obtaining program support from the business
(a) The executive director shall recommend whether
5the expansion fund and trust fund accounts are to be leveraged,
6and if so, by how much. Upon the request of the corporation, the
7executive director’s decision may be repealed or modified by an
9(b) The amount of guarantee liability outstanding at any one
10time shall not exceed five times the amount of funds on deposit in
11the expansion fund plus any receivables due from funds loaned
12from the expansion fund to another fund in state government as
13directed by the Department of Finance pursuant to a statute enacted
14by the Legislature, including each of the trust fund accounts within
15the trust fund.
section shall remain in effect only until January 1, 2018,
17and as of that date is repealed, unless a later enacted statute, that
18is enacted before January 1, 2018, deletes or extends that date.
(a) The executive director shall recommend whether
20the expansion fund and trust fund accounts are to be leveraged,
21and if so, by how much. Upon the request of the corporation, the
22executive director’s decision may be repealed or modified by an
24(b) The amount of guarantee liability outstanding at any one
25time shall not exceed four times the amount of funds on deposit
26in the expansion fund plus any receivables due from funds loaned
27from the expansion fund to another fund in state government as
28directed by the Department of Finance pursuant to a statute enacted
29by the Legislature, including each of the trust fund accounts within
30the trust fund, unless the executive director has permitted a higher
31leverage ratio for an individual corporation pursuant to subdivision
32(b) of Section 200011.
33(c) This section shall become operative on January 1, 2018.
(a) The corporate guarantee shall be backed by funds
35on deposit in the corporation’s trust fund account, or by receivables
36due from funds loaned from the corporation’s trust fund account
37to another fund in state government, as directed by the Department
38of Finance pursuant to a statute enacted by the Legislature.
39(b) Loan guarantees shall be secured by a reserve of at least 20
40percent to be determined by the executive director.
P23 1(c) The expansion fund and trust fund accounts shall be used
2exclusively to guarantee obligations and pay the administrative
3costs of the corporations.
4(d) This section shall
remain in effect only until January 1, 2018,
5and as of that date is repealed, unless a later enacted statute, that
6is enacted before January 1, 2018, deletes or extends that date.
(a) The corporate guarantee shall be backed by funds
8on deposit in the corporation’s trust fund account, or by receivables
9due from funds loaned from the corporation’s trust fund account
10to another fund in state government, as directed by the Department
11of Finance pursuant to a statute enacted by the Legislature.
12(b) Loan guarantees shall be secured by a reserve of at least 25
13percent to be determined by the executive director, unless the
14executive director authorizes a higher leverage ratio for an
15individual corporation pursuant to subdivision (b) of Section
17(c) The expansion fund and trust fund accounts shall be used
18exclusively to guarantee obligations and pay the administrative
19costs of the corporations.
20(d) This section shall become operative on January 1, 2018.
A corporation may charge the borrower or financial
22institution a loan fee on all loans made or guaranteed by the
23corporation to defray the operating expenses of the corporation.
24The amount of the fee shall be determined by the executive
(a) It is the intent of the Legislature that the
27corporations make maximal use of their statutory authority to
28guarantee loans and surety bonds, including the authority to secure
29loans with a minimum loan loss reserve of only 20 percent, so that
30the financing needs of small business may be met as fully as
31possible within the limits of corporations’ loan loss reserves. The
32office shall report annually to the Legislature on the financial status
33of the corporations and their portfolio of loans and surety bonds
34guaranteed pursuant to Section 9795.
35(b) Any corporation that serves an area declared to be in a state
36of emergency by the Governor or a disaster area by the President
37of the United States, the Administrator of the United States Small
38 Business Administration, or the United States Secretary of
39Agriculture shall increase the portfolio of loan guarantees where
40the dollar amount of the loan is less than one hundred thousand
P24 1dollars ($100,000), so that at least 15 percent of the dollar value
2of loans guaranteed by the corporation is for those loans. The
3corporation shall comply with this requirement within one year of
4the date the emergency or disaster is declared. Upon application
5of a corporation, the executive director may waive or modify the
6rule for the corporation if the corporation demonstrates that it made
7a good faith effort to comply and failed to locate lending
8institutions in the region that the corporation serves that are willing
9to make guaranteed loans in that amount.
10(c) This section shall remain in effect only until January 1, 2018,
11and as of that date is repealed, unless a later enacted statute, that
12is enacted before January 1, 2018, deletes or extends that date.
(a) It is the intent of the Legislature that the
14corporations make maximal use of their statutory authority to
15guarantee loans and surety bonds, including the authority to secure
16loans with a minimum loan loss reserve of only 25 percent, unless
17the office authorizes a higher leverage ratio for an individual
18corporation pursuant to subdivision (b) of Section 200011, so that
19the financing needs of small business may be met as fully as
20possible within the limits of corporations’ loan loss reserves. The
21office shall report annually to the Legislature on the financial status
22of the corporations and their portfolio of loans and surety bonds
23guaranteed pursuant to Section 9795.
24(b) Any corporation that serves an area declared to be in a state
25of emergency by the Governor or a disaster area by the President
26of the United States, the Administrator of the United States Small
27Business Administration, or the United States Secretary of
28Agriculture shall increase the portfolio of loan guarantees where
29the dollar amount of the loan is less than one hundred thousand
30dollars ($100,000), so that at least 15 percent of the dollar value
31of loans guaranteed by the corporation is for those loans. The
32corporation shall comply with this requirement within one year of
33the date the emergency or disaster is declared. Upon application
34of a corporation, the executive director may waive or modify the
35rule for the corporation if the corporation demonstrates that it made
36a good faith effort to comply and failed to locate lending
37institutions in the region that the corporation serves that are willing
38to make guaranteed loans in that amount.
39(c) This section shall become operative on January 1, 2018.
(a) A corporation shall establish one or more loan
2committees, each of which shall be composed of five or more
3persons, a majority of whom shall be experienced in banking and
5(b) A loan committee shall review applications to the corporation
6for a loan or guarantee and shall do each of the following:
7(1) Determine the feasibility of the proposed transaction. The
8loan committee shall recommend approval of the application only
9upon a determination that there is a reasonable chance that the loan
10will be repaid.
11(2) On the basis of that determination, recommend to the board
12of directors any action that the loan committee deems appropriate
13under the circumstances, or, in the event that approval authority
14has been delegated to the loan committee by the board of directors,
15approve or disapprove the loan application.
16(c) A loan committee shall expeditiously act to accept or reject
18(d) A person who has a financial interest related to a matter over
19which the loan committee has authority may not make, participate
20in making, or in any way attempt to influence that matter.
Unless delegated to its loan committee, the
22corporation’s board of directors, upon a recommendation from its
23loan committee shall do all of the following:
24(a) Emphasize consideration to applications that will increase
25employment of disadvantaged, disabled, or unemployed persons,
26or increase employment of youth residing in areas of high youth
27unemployment and high youth delinquency.
28(b) Give consideration to applications from traditional and
29safety-net providers of Medi-Cal services that will promote access
30to quality medical care for individuals enrolled in Medi-Cal
31managed health care networks that are contracting with or owned
32or operated by a county board of supervisors, a county health
33 commission, or a county health authority organized pursuant to
34Section 14018.7, 14087.31, 14087.35, 14087.36, 14087.38, or
3514087.9605 of the Welfare and Institutions Code.
36(c) Not grant a loan or guarantee, unless it determines that the
37conditions of Section 200033 are satisfied.
(a) Among other priorities, corporations shall give
39high priority to the issuance of loan guarantees to small business
40incubators, and to businesses that lease space in incubators.
P26 1(b) For the purposes of this section, “incubator” means a facility
2that allows new small businesses to increase their probability of
3success by sharing needed capital equipment, services, and
4facilities, which may include, but is not limited to, the following:
5(1) Reception and meeting area.
6(2) Secretarial services, such as collating, telephone answering,
8(3) Accounting and bookkeeping services.
9(4) Research libraries.
10(5) Onsite financial and management counseling.
12(7) Flexible lease arrangements for flexible space.
13(8) Computer or word processing facilities.
14(9) Day care facilities.
15(10) Office furniture rentals.
16(11) A graduation policy sometimes requiring firms to leave
17after three to five years in a subsidized, nurturing environment.
18(12) Employee training and placement services.
19(c) Among other priorities, corporations shall give high priority
20to marketing their services to Phase 1 or Phase 2 Small Business
21Innovation Research (SBIR) recipients and providing loan
22guarantees, whenever possible.
(a) A corporation may utilize funds for direct lending
27as long as at least 80 percent of the corporate funds, calculated by
28dollar amount, and all expansion funds are guaranteed by another
29public or private financial institution.
30(b) The amount of funds available for direct lending shall be
31determined by the executive director. In its capacity as a direct
32lender, the corporation may sell in the secondary market the
33guaranteed portion of each loan so as to raise additional funds for
34direct lending. The office shall issue regulations governing these
35direct loans, including the maximum amount of these loans.
36(c) To execute the direct loan programs established in this
37chapter, the executive director may loan trust funds to a corporation
38located in a rural area for the express purpose of lending those
39funds to an identified borrower. The loan authorized by the
P27 1executive director to the corporation shall be on terms similar to
2the loan between the corporation and the borrower.
3(d) The amount of the loan may be in excess of the amount of
4a loan to any individual borrower, but actual disbursements
5pursuant to the office loan agreement shall be required to be
6supported by a loan agreement between the borrower and the
7corporation in an amount at least equal to the requested
8disbursement. The loan between the office and the corporation
9shall be evidenced by a credit agreement. In the event that any
10loan between the corporation and borrower is not guaranteed by
11a governmental agency, the portion of the credit agreement
12attributable to that loan shall be secured by assignment of any note,
13executed in favor of the corporation by the borrower to the office.
14The terms and conditions of the credit agreement shall be similar
15to the loan agreement between the corporation and the borrower,
16which shall be collateralized by the note between the corporation
17and the borrower.
18(e) In the absence of fraud on the part of the corporation, the
19liability of the corporation to repay the loan to the office is limited
20to the repayment received by the corporation from the borrower,
21except in a case where the United States Department of Agriculture
22requires exposure by the corporation in rule or regulation. The
23corporation may use trust funds for loan repayment to the office
24if the corporation has exhausted a loan loss reserve created for this
25purpose. Interest and principal received by the office from the
26corporation shall be deposited into the same account from which
27the funds were originally borrowed.
28(f) Upon the approval
of the executive director, a corporation
29shall be authorized to borrow trust funds from the office for the
30purpose of relending those funds to small businesses. A corporation
31shall demonstrate to the executive director that it has the capacity
32to administer a direct loan program, and has procedures in place
33to limit the default rate for loans to startup businesses. Not more
34than 25 percent of any trust fund account shall be used for the
35direct lending established pursuant to this subdivision. A loan to
36a corporation shall not exceed the amount of funds likely to be
37lent to small businesses within three months following the loan to
39(g) The maximum loan amount to a small business is fifty
40thousand dollars ($50,000). In the absence of fraud on the part of
P28 1the corporation, the repayment obligation pursuant to the loan to
2the corporation shall be limited to the amount of funds received
3by the corporation for the loan to the small business and any other
4funds received from the office that are not disbursed. The
5corporation shall be authorized to charge a fee to the small business
6borrower, in an amount determined by the executive director
7pursuant to regulation. The program provided for in this subdivision
8shall be available in all geographic areas of the state.
(a) A corporation may, in an area affected by a state
13of emergency within the state and declared a disaster by the
14President of the United States, the Administrator of the United
15States Small Business Administration, or the United States
16Secretary of Agriculture, or declared to be in a state of emergency
17by the Governor of California, provide loan guarantees from funds
18allocated in Section 200013 to small businesses, small farms,
19nurseries, and agriculture-related enterprises that have suffered
20actual physical damage or significant economic injury as a result
21of the disaster.
22(b) If regulations have not otherwise been adopted, the office
23may adopt or readopt regulations to implement the loan guarantee
24program authorized by this section. The office may adopt these
25regulations as emergency regulations in accordance with Chapter
263.5 (commencing with Section 11340) of Part 1 of Division 3 of
27Title 2, and for purposes of that chapter, including Section 11349.6,
28the adoption of the regulations shall be considered by the Office
29of Administrative Law to be necessary for the immediate
30preservation of the public peace, health and safety, and general
31welfare. Notwithstanding subdivision (e) of Section 11346.1, the
32regulations shall be repealed within 180 days after their effective
33date unless the office complies with Chapter 3.5 (commencing
34with Section 11340) of Part 1 of Division 3 of Title 2, as provided
35in subdivision (e) of Section 11346.1.
36(c) Allocations pursuant to subdivision (a) shall be deemed to
37be for extraordinary emergency or disaster response operations
38costs incurred by the office.
(a) Corporations may grant energy efficiency
5(b) The office shall enter into an agreement with the California
6Energy Extension Service of the Office of Planning and Research
7to assist small business owners in reducing their energy costs
8through low-interest loans and by providing assistance and
In furtherance of the purposes set forth in Section
14200001 of this code and Section 14002 of the Corporations Code,
15a corporation may do any one or more of the following activities,
16but only to the extent that the activities are authorized pursuant to
17the contract between the office and corporation: guarantee, endorse,
18or act as surety on the bonds, notes, contracts, or other obligations
19of, or assist financially, any person, firm, corporation, or
20association, and may establish and regulate the terms and
21conditions with respect to any such loans or financial assistance
22and the charges for interest and service connected therewith, except
23that the corporation shall not make or guarantee any loan, unless
24and until it determines:
25(a) There is no probability that the
loan or other financial
26assistance would be granted by a financial company under
27reasonable terms or conditions, and the borrower has demonstrated
28a reasonable prospect of repayment of the loan.
29(b) The loan proceeds shall be used exclusively in this state.
30(c) The loan qualifies as a small business loan or an employment
32(d) That the borrower has a minimum equity interest in the
33business as determined by the director.
34(e) As a result of the loan, the jobs generated or retained
35demonstrate reasonable conformance to the regulations specifying
(a) In addition to the authority granted by Section
38200033, upon approval of the executive director, a corporation
39may act as guarantor on a surety bond for any small business
P30 1contractor, including, but not limited to, women, minority, and
2disabled veteran contractors.
3(b) The provisions of subdivision (a) allowing a corporation to
4act as a guarantor on surety bonds may be funded through
5appropriate federal funding sources. Federal funds shall be
6deposited in the Federal Trust Fund in the State Treasury in
7accordance with Section 16360, for transfer to the expansion fund.
(a) Except as otherwise provided in this title, the trust
12fund account shall be used solely to make loans, guarantee bonds,
13and guarantee loans, approved by the corporation, that meet the
14loan criteria under this title. The state shall not be liable or
15obligated in any way as a result of the allocation of state money
16to a trust fund account beyond the state money that is allocated
17and deposited in the fund pursuant to this title, and that is not
18otherwise withdrawn by the state pursuant to this title.
19(b) A summary of all loans and bonds to which a state guarantee
20is attached shall be submitted to the executive director upon
21execution of the loan agreement and periodically thereafter.
22(c) A summary of all loans made by a corporation shall be
23submitted to the executive director upon execution of the loan
24agreement and periodically thereafter.
(a) Annually, not later than January 1 of each year
26commencing January 1, 2014, the executive director shall prepare
27a report regarding the loss experience for the expansion fund for
28loan guarantees, loss reserves, and surety bond guarantees for the
29preceding fiscal year. At a minimum, the report shall also include
30data regarding numbers of surety bond and loan guarantees awarded
31through the expansion fund, including ethnicity and gender data
32of participating contractors and other entities, and experience of
33surety insurer participants in the bond guarantee program. The
34report shall include the information described in Section 200025.
35The executive director shall submit that report to the Governor
36and the Legislature pursuant to Section 9795.
37(b) A corporation shall also report to the executive director, or
38his or her designated representative, all statistical and other reports
39required by this title, responses to audit reports, budget
P31 1requirements, invoices submitted for payment by the state, and
2information concerning loans made or guaranteed.
Pursuant to subdivision (f) of Section 8684.2, within
460 days of the conclusion of the period for guaranteeing loans
5under any small business disaster loan guarantee program
6conducted for a disaster as authorized by Section 8684.2 or 200030,
7the office shall provide a report to the Legislature on loan
8guarantees approved and rejected by gender, ethnic group, type of
9business and location, and each participating loan institution
10pursuant to Section 9795. The office need only submit one report
11to comply with this section and subdivision (f) of Section 8684.2.
No reimbursement is required by this act pursuant to
13Section 6 of Article XIII B of the California Constitution because
14the only costs that may be incurred by a local agency or school
15district will be incurred because this act creates a new crime or
16infraction, eliminates a crime or infraction, or changes the penalty
17for a crime or infraction, within the meaning of Section 17556 of
18the Government Code, or changes the definition of a crime within
19the meaning of Section 6 of Article XIII B of the California