BILL NUMBER: AB 1247 INTRODUCED
BILL TEXT
INTRODUCED BY Assembly Member Medina
FEBRUARY 22, 2013
An act to repeal and add Chapter 1 (commencing with Section 14000)
of Part 5 of Division 3 of Title 1 of the Corporations Code, and to
add Title 25 (commencing with Section 200000) to, to repeal Section
200009 of, and to repeal and add Sections 200020, 200022, and 200025
of, the Government Code, relating to business, and making an
appropriation therefor.
LEGISLATIVE COUNSEL'S DIGEST
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:
SECTION 1. Chapter 1 (commencing with Section 14000) of Part 5 of
Division 3 of Title 1 of the Corporations Code is repealed.
SEC. 2. Chapter 1 (commencing with Section 14000) is added to Part
5 of Division 3 of Title 1 of the Corporations Code, to read:
CHAPTER 1. CALIFORNIA SMALL BUSINESS FINANCIAL DEVELOPMENT
CORPORATIONS
Article 1. Introduction
14000. This chapter shall be known and may be cited as the
California Small Business Financial Development Corporation Law.
14001. (a) It is the intent of the Legislature in enacting this
chapter to promote the economic development of small businesses by
making available capital, general management assistance, and other
resources, including loan and equity investment services, personnel,
and business education to small business entrepreneurs, including
women and minority owned businesses, for the purpose of promoting the
health, safety, and social welfare of the citizens of California, to
eliminate unemployment of the economically disadvantaged of the
state, and to stimulate economic development, employment, minority
group, women, and disabled persons entrepreneurship.
(b) It is the further intent of the Legislature to provide a
flexible means to mobilize and commit all available and potential
resources in the various regions of the state to fulfill these
objectives, including federal, state, and local public resources, and
private debt and equity investment.
(c) It is the further intent of the Legislature that corporations
operating pursuant to this law, shall to the maximum extent feasible,
coordinate with other job and business development efforts within
their region directed toward implementing the purpose of this part.
(d) It is the further intent of the Legislature to provide
expanded resources allowing participation by small and emerging
contractors in state public works contracts. Increased access to
surety bonding resources will assist in supporting participation by
those firms in public works contracts, and by stimulating increased
participation by small firms, the state will benefit from increased
competition and lower bid costs.
14002. If any provision of this chapter or the application
thereof to any person or circumstances is held invalid, this
invalidity shall not affect other provisions or applications of the
chapter which can be given effect without the invalid provision or
application, and to this end the provisions of this chapter are
severable.
Article 2. Definitions
14003. Unless the context otherwise requires, the definitions in
this section shall govern the construction of this chapter.
(a) "Board of directors" means the board of directors of the
corporation.
(b) "Corporation" means any nonprofit California small business
financial development corporation created pursuant to this chapter.
(c) "Director" means the director of the Governor's Office of
Business and Economic Development.
(d) "Executive director" means the person designated to this title
by the director of the Governor's Office of Business and Economic
Development.
(e) "Expansion fund" means the California Small Business Expansion
Fund.
(f) "Loan committee" means a committee appointed by the board of
directors of a corporation to determine the course of action on a
loan application pursuant to Title 25 (commencing with Section
200000) of the Government Code.
(g) "Trust fund" means the money from the expansion fund that is
held in trust by financial institution or financial company. A trust
fund is not a deposit of state funds and is not subject to the
requirements of Section 16506 of the Government Code.
(h) "Trust fund account" means an account within the trust fund
that is allocated to a particular small business financial
development corporation for the purpose of paying loan defaults and
claims on bond guarantees for a specific small business financial
development corporation.
Article 3. Executive Director
14004. The executive director shall do all of the following:
(a) Administer this chapter.
(b) Expeditiously approve or disapprove the articles of
incorporation and any subsequent amendments to the articles of
incorporation of a corporation. This determination shall be based
upon the following:
(1) Review of the articles of incorporation and bylaws of the
corporation to determine whether they contain the provisions required
by this chapter and conform with the regulations adopted pursuant to
this chapter.
(2) A determination as to whether the legislative intent expressed
in Section 14001 shall be served by the proposed corporation.
(3) A determination as to whether the responsibility, character,
and general fitness of the individuals who will manage the
corporation are such as to command the confidence of the state and to
warrant the belief that the business of the proposed corporation
will be honestly and efficiently conducted in accordance with the
intent and purpose of this chapter and that they include
representatives of the financial and business community, as well as
the economically disadvantaged.
(c) Have the accounts of each corporation formed under this
chapter audited as of the close of business on June 30 of each year.
(d) Have the portfolio of each corporation audited a minimum of
once a year. Material audit exceptions that are not corrected by the
corporation within a reasonable period of time may result in the
suspension of the corporation pursuant to Section 200008 of the
Government Code.
(e) Review reports from the Department of Business Oversight and
inform corporations as to what corrective action is required.
(f) Examine, or cause to be examined, at any reasonable time, all
books, records, and documents of every kind, and the physical
properties of a corporation. The inspection shall include the right
to make copies, extracts, and search records.
(g) Attend and participate at corporation meetings. The executive
director, or his or her designee, shall be an ex officio, nonvoting
representative on the board of directors and loan committees of each
corporation. The executive director shall meet with the board of
directors of each corporation at least once each fiscal year,
commencing January 1, 2014.
Article 4. New Corporations
14005. Upon approval by the executive director to become a
corporation, an entity shall adopt or amend its articles of
incorporation to comply with the following:
(a) The name of the corporation shall include the words "small
business financial development corporation," except for those
corporations formed pursuant to this chapter prior to 2002, which may
also be called "small business development corporations," or those
formed prior to 1985, which may also be called "rural or urban
development corporations."
(b) The purposes for which the corporation is formed, which shall
be those specified in Section 14001. This requirement shall not be
deemed to preclude a statement of powers.
(c) A geographical description of the corporation's service area.
(d) The name and addresses of seven or more persons who are to act
in the capacity of directors until the selection of their
successors.
(e) That the corporation is organized pursuant to the California
Small Business Financial Development Corporation Law.
14006. If the executive director determines that the facts
disclosed by the investigation provided by Section 14004 are true and
finds that the proposed incorporation meets all the requirements of
this chapter, the executive director shall approve the articles of
incorporation and endorse the approval thereon and forward the same
to the Secretary of State for his or her approval and filing.
Likewise, the executive director shall approve or disapprove of all
amendments to the articles. The executive director shall endorse the
approval on the amendatory document before the document is forwarded
to the Secretary of State for his or her approval and filing.
14007. The corporation's existence as a small business
development corporation begins upon the filing of the articles with
the Secretary of State and continues perpetually, unless otherwise
expressly provided for by law.
14008. (a) Any request for proposal for selection of a
corporation shall require the winning bidder to adopt or amend its
bylaws to include provisions governing the election and qualification
of directors, the establishment and functions of loan committees of
the corporation, and the method of selecting the representative of
the corporation on the board.
(b) The bylaws shall provide for removal of officers only by a
two-thirds vote of the directors of the corporation.
14009. Each corporation shall have provisions establishing a
grievance procedure for employees, clients, or potential clients, to
appeal a decision or obtain redress of an action done by the staff or
loan committee of the corporation. The procedures shall be
established in writing during the probationary period of a new
corporation.
14010. The executive director may authorize the establishment of
a new corporation using a request for proposal process.
14011. The Nonprofit Public Benefit Corporation Law (Part 2
(commencing with Section 5110) of Division 2 of this title) applies
to corporations formed under this chapter, except as to matters
otherwise provided for in this chapter.
14012. For six months following the establishment of a
corporation, commencing upon filing of the articles of incorporation
with the Secretary of State, a corporation shall be on probation.
While on probation, a corporation may be suspended if suspension is
recommended by the executive director. This suspension is
nonappealable and not subject to the procedures for suspension
applicable to a corporation not on probation.
Article 5. Corporation Board
14013. The corporate powers of a corporation shall be exercised
by the board of directors.
14014. A request for proposal for selection of a corporation
shall require the winning bidder to adopt or amend its bylaws to
state that:
(a) A person may not serve on a board of directors who is not a
resident of, or person conducting business in, the service area
described in the articles of incorporation.
(b) Each board of directors shall include representatives from all
of the following:
(1) The financial community.
(2) The business community.
(3) The economically disadvantaged.
(c) Not more than one employee of the corporation may serve on the
board of directors at any one time.
(d) A person who has a financial interest related to a matter over
which the board has authority may not make, participate in making,
or in any way attempt to influence that matter.
14015. If any director ceases to meet the qualifications
established in Section 14014, he or she shall immediately vacate his
or her position as a director and such position shall be deemed
vacant.
14016. If any vacancy occurs in the elective membership of the
board of directors through death, resignation, or otherwise, the
remaining directors shall elect a person representing the appropriate
category to fill the vacancy for the unexpired term.
14017. (a) The office shall establish new small business
financial development corporations pursuant to the procedures
otherwise established by this chapter in the following areas:
(1) San Jose.
(2) Santa Ana.
(3) San Fernando Valley.
(4) Ontario.
(b) Upon an appropriation in the annual Budget Act for this
purpose, the office shall establish a small business financial
development corporation in southeast Los Angeles.
(c) In furtherance of the purposes of this chapter, up to one-half
of the trust funds may be used to guarantee loans utilized to
establish a Business and Industrial Development Corporation (BIDCO)
under Division 15 (commencing with Section 31000) of the Financial
Code.
Article 6. Corporations, Miscellaneous
14018. Every corporation shall provide for, and maintain a
central staff to perform, all administrative requirements of the
corporation, including all those functions required of a corporation
by the director.
14019. Reasonable costs incurred by a corporation in the creation
and maintenance of a central staff shall be paid to the corporation
from state funds, including a portion of the interest earned on the
expansion fund and the corporation's trust fund account, if the
corporation has a trust fund account, otherwise, on the expansion
fund.
14020. A corporation shall report to the executive director, or
his or her designated representative, all statistical and other
reports required by this chapter, responses to audit reports, budget
requirements, and other information relating to the establishment,
monitoring, and suspension of a corporation.
14021. A corporation shall make a report to the executive
director, as of the close of business on June 30 of each year,
describing the corporation's activities and any additional
information requested by the executive director, on or before August
1 of each year.
Article 7. Conflict of Interest
14022. It shall be unlawful for the director, executive director,
or any person who is an officer, director, or employee of a
corporation, or who is a member of a loan committee, or who is an
employee of the office to do any of the following:
(a) Ask for, consent, or agree to receive, any commission,
emolument, gratuity, money, property, or thing of value for his or
her own use, benefit, or personal advantage, for procuring or
endeavoring to procure for any person, partnership, joint venture,
association, or corporation, any loan, guarantee, financial, or other
assistance from any corporation.
(b) Borrow money, property, or to benefit knowingly, directly or
indirectly, from the use of the money, credit, or property of any
corporation.
(c) Make, maintain, or attempt to make or maintain, a deposit of
the funds of a corporation with any other corporation or association
on condition, or with the understanding, expressed or implied, that
the corporation or association receiving the deposit shall pay any
money or make a loan or advance, directly or indirectly, to any
person, partnership, joint venture, association, or corporation,
other than to a corporation formed under this chapter.
14023. It shall be unlawful for the director, executive director,
or any person who is an officer or director of a corporation, or who
is an employee of the office, to purchase or receive, or to be
otherwise interested in the purchase or receipt, directly or
indirectly, of any asset of a corporation, without paying to the
corporation the fair market value of the asset at the time of the
transaction.
14024. Violation of any provision of this article shall
constitute a felony.
SEC. 3. Title 25 (commencing with Section 200000) is added to the
Government Code, to read:
TITLE 25. Small Business Financial Assistance Act of 2013
CHAPTER 1. INTRODUCTION
200000. This title shall be known and may be cited as the Small
Business Financial Assistance Act of 2013.
200001. The Legislature finds that:
(a) Small businesses form the core of the California economy and
that it is in the interest of the state to increase opportunities for
entrepreneurs, the self-employed, and microbusiness and small
business owners to have better access to capital and other technical
resources.
(b) Unemployment in California is a matter of statewide concern
requiring concerted public and private action to develop employment
opportunities for the disadvantaged, youth, veterans, and unemployed
persons.
(c) It is necessary to direct additional capital, general
management assistance, business education, and other resources to
encourage the development of small business opportunities,
particularly for minority, women, and disabled persons, to alleviate
unemployment.
CHAPTER 2. DEFINITIONS
200002. Unless the context otherwise requires, the definitions in
this section shall govern the construction of this title.
(a) "Corporation" means any nonprofit California small business
financial development corporation created pursuant to Chapter 1
(commencing with Section 14000) of Part 5 of Division 3 of Title 1 of
the Corporations Code.
(b) "Director" means the director of the Governor's Office of
Business and Economic Development.
(c) "Employment incentive loan" means a loan to a qualified
business or to a business located within an enterprise zone, as
defined in subdivision (d) of Section 7072.
(d) "Executive director" means the person designated to this title
by the director of the Governor's Office of Business and Economic
Development.
(e) "Expansion fund" or "expansion fund" means the California
Small Business Expansion Fund.
(f) "Financial company" means banking organizations, including
national banks and trust companies, savings and loan associations,
state insurance companies, mutual insurance companies, and other
public and private banking, lending, retirement, and insurance
organizations.
(g) "Financial institution" means banking organizations, including
national banks and trust companies authorized to conduct business in
California and state-chartered commercial banks, trust companies,
community development financial institutions, microlenders, and
savings and loan associations.
(h) "Loan committee" means a committee appointed by the board of
directors of a corporation to determine the course of action on a
loan application pursuant to this title.
(i) "Office" means the Governor's Office of Business and Economic
Development.
(j) Unless otherwise defined by the director by regulation, "small
business loan" means a loan to a business defined as an eligible
small business as set forth in Section 121.3-10 of Part 121 of
Chapter 1 of Title 13 of the Code of Federal Regulations, including
those businesses organized for agricultural purposes that create or
retain employment as a result of the loan. From time to time, the
director shall provide guidelines as to the preferred ratio of jobs
created or retained to total funds borrowed for guidance to the
corporations.
(k) "Trust fund" means the money from the expansion fund that is
held in trust by a financial institution or financial company. A
trust fund is not a deposit of state funds and is not subject to the
requirements of Section 16506.
(l) "Trust fund account" means an account within the trust fund
that is allocated to a particular small business financial
development corporation for the purpose of paying loan defaults and
claims on bond guarantees for a specific small business financial
development corporation.
(m) "Trustee" means the lending institution or financial company
selected by the office to hold and invest the trust funds. An
agreement made pursuant to this title and the trustee shall not be
construed to be a deposit of state funds.
CHAPTER 3. PROGRAM PURPOSE
200003. (a) There is within the Governor's Office of Business and
Economic Development the California Business Investment Service,
which shall, among other things, assist businesses seeking new
capital resources.
(b) Pursuant to this title, the office may establish one or more
programs administered regionally under contract with small business
financial development corporations. Programs established pursuant to
this title may include the following types of financial products:
(1) Loan guarantees.
(2) Direct loans.
(3) Disaster assistance loans.
(4) Surety bond guarantees.
(c) In all of their state-funded programs, the corporations shall,
to the extent practicable, be complementary to, and not competitive
with, commercial lenders and other state and federal programs.
200004. To implement its responsibilities, a corporation shall
undertake a program that shall include, but not be limited to, the
following:
(a) Outreach to low-resource small businesses and microbusinesses.
The corporations located in rural areas shall give priority to
low-resource farmers, rural, and agriculturally related businesses.
(b) Collaboration with other organizations and lenders to identify
and assist those businesses that are creditworthy but face
impediments to accessing conventional sources because of reasons,
such as low equity, inadequate collateral, unacceptable legal
structure (such as a co-op or nonprofit organization), management
inadequacies, and language problems.
(c) To the extent possible, bringing all possible financial
resources (low-interest lenders, BIDCOs, MESBICs, other guarantors,
etc.) to bear on the borrower's problems.
(d) Technical assistance to businesses receiving loans or
guarantees that will maximize the probability of loan repayment.
(e) Ongoing strategies for increasing program resources through
private sector involvement and nonstate funds.
(f) A program for collecting and liquidating defaulted loans so
that the corporations can qualify to become full-service lenders
under the Small Business Administration. Corporations located in
rural areas shall, in addition, try to qualify for lender status
under the Farmers Home Administration.
(g) Become an agent for other lenders and guarantors.
CHAPTER 4. ADMINISTRATIVE STRUCTURE
200005. If regulations have not already been adopted under
Chapter 1 (commencing with Section 14000) of Part 5 of Division 3 of
Title 1 of the Corporations Code, as that chapter read on January 1,
2013, then the office shall adopt regulations concerning the
implementation of this title, Chapter 1 (commencing with Section
14000) of Part 5 of Division 3 of Title 1 of the Corporations Code,
and direct lending as emergency regulations in accordance with
Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3
of Title 2. The adoption of these regulations is an emergency and
necessary for the immediate preservation of the public peace, health
and safety, or general welfare within the meaning of subdivision (b)
of Section 11346.1. Notwithstanding subdivision (e) of Section
11346.1, the regulations shall not remain in effect for more than 180
days unless the office complies with all provisions of Chapter 3.5
(commencing with Section 11340) of Part 1 of Division 3 of Title 2,
as required by subdivision (e) of Section 11346.1. This section also
applies to any direct loan program administered by the office.
200006. The executive director shall do all of the following:
(a) Administer this title.
(b) Contract for services under this title and Chapter 1
(commencing with Section 14000) of Part 5 of Division 3 of Title 1 of
the Corporations Code.
(c) In accordance with available resources, use branch offices for
the purposes of making the programs under this title accessible to
all areas of the state.
(d) Require each corporation to submit an annual written plan of
operation.
(e) Authorize the distribution, transfer, and withholding of
moneys in the expansion fund and trust funds.
(f) Authorize the investment of expansion and trust fund moneys.
(g) Oversee the operations of one or more programs authorized
pursuant to this title.
(h) Approve, suspend, or terminate a corporation's ability to
participate in a program under this title.
(i) Advise the Governor, the director, and the Small Business
Advocate regarding issues and programs affecting California's small
business community, including, but not limited to, business
innovation and expansion, export financing, state procurement,
management and technical assistance, venture capital, and financial
assistance.
200007. The use of state funds paid out to the trust fund and the
return on those funds from investment pursuant to Section 200014 is
conditional pursuant to Sections 200008 and 200015. Each corporation
shall enter into a written signed agreement with the state at the
beginning of each fiscal year. The agreement shall govern the
activities in which the corporations engage, the investment of state
funds and its return, and the budgeted administrative expenses the
corporations may incur. In the event the state and corporation do not
reach an agreement, or the state finds the corporation has violated
the terms of an active agreement, the state may take any action under
Section 200008 or 200015, or any other action as appropriate. In the
event the state and corporation do not reach agreement or the state
finds the corporation has violated the terms of an active agreement,
the corporation shall have no authority to withdraw or encumber the
trust fund or the return of those funds by the issuance of
guarantees, by incurring expenses against the fund and its return in
any manner whatsoever, and the state may take any action under
Section 200008 or 200015, or any other action as appropriate. Any
guarantee or other encumbrance made by the corporation in violation
of this section shall be null and void, and neither the state nor the
trust fund will be liable therefor.
200008. (a) Upon a finding by the executive director that
irreparable harm may occur if guarantee or direct loan authority is
not temporarily withdrawn from a corporation, the executive director
may temporarily withdraw guarantee or direct loan, or both, authority
from a corporation. The notice of temporary withdrawal sent to the
corporation shall specify the reasons for the action.
(1) As used in this section, "guarantee and direct loan authority"
means the authority to make or guarantee any loan that encumbers
funds in a trust fund account, any account or subaccount under the
direct control of the office or other state entity, or the expansion
fund.
(2) The executive director shall make one of the determinations
specified in subdivision (c) within 30 days of the effective date of
the temporary withdrawal, unless the corporation and the executive
director mutually agree to an extension. The corporation shall have
the opportunity to submit written material to the executive director
addressing the items stated in the temporary withdrawal notice. If
the executive director does not make any determinations within 30
days, the temporary withdrawal shall be negated. The corporation's
yearly contract shall remain in effect during the period of temporary
withdrawal, and the corporation shall continue to receive
reimbursement of necessary operating expenses.
(b) Failure of a corporation to substantially comply with the
following may result in the suspension of a corporation:
(1) Regulations implementing the California Small Business
Development Corporation Law (Chapter 1 (commencing with Section
14000) of Part 5 of Division 3 of Title 1 of the Corporations Code).
(2) Fiscal and portfolio requirements, as contained in
the fiscal and portfolio audits specified in Section 14004 of the
Corporations Code.
(3) Milestones and scope of work as contained in the annual
contract between the corporation and the office.
(c) Pursuant to subdivision (a) or (b), the executive director may
do the following:
(1) Terminate the temporary withdrawal.
(2) Terminate the temporary withdrawal subject to the corporation'
s adoption of a specified remedial action plan.
(3) Temporarily withdraw, or continue to withdraw, guarantee
authority until a specified time. This determination by the executive
director shall require a finding that the corporation has failed to
comply with the California Small Business Development Corporation Law
(Chapter 1 (commencing with Section 14000) of Part 5 of Division 3
of Title 1 of the Corporations Code).
(4) Suspend the corporation.
(5) Suspend the corporation, with suspension stayed until the
corporation provides a remedial action plan to the executive
director, and the executive director decides whether to repeal or
implement the stayed suspension.
(d) The determinations contained in paragraphs (4) and (5) of
subdivision (c) require a finding that irreparable harm will occur
unless the corporation is suspended.
(e) In considering a determination regarding the recommended
suspension and possible remedial action plans, the executive director
shall consider, along with other criteria as specified in
subdivision (b), the corporation's history and past performance.
(f) Upon suspension of a corporation, the executive director shall
transfer all funds, whether encumbered or not, in the trust fund
account of the suspended corporation into either the expansion fund
or temporarily transfer the funds to another corporation.
(g) If the executive director decides to take any action against
the corporation pursuant to paragraphs (2) to (5), inclusive, of
subdivision (c), the corporation shall be notified of the action 10
days before the effective date of the action. The corporation shall
have the right to appeal the executive director's decision to the
director within that 10-day period by sending notice to the director.
Once the director receives notice that the action is being appealed,
the executive director's action shall be stayed except for temporary
withdrawal of guarantee authority. Upon receipt of the notice, the
director shall consider and make a final determination on the appeal
within 30 days. The director may elect to take any of the actions
listed in subdivision (h). The temporary withdrawal of corporation
guarantee authority shall remain in effect until the director issues
a decision.
(h) Pursuant to subdivision (g), the director may do any of the
following:
(1) Terminate the action taken by the executive director.
(2) Modify the action taken by the executive director subject to
the adoption by the corporation of a specified remedial action plan.
(3) Affirm the action taken by the executive director.
(i) Following suspension, the corporation may continue its
existence as a nonprofit corporation pursuant to the Nonprofit Public
Benefit Corporation Law (Part 2 (commencing with Section 5110) of
Division 2 of Title 1 of the Corporations Code), but shall no longer
be registered with the Secretary of State as a small business
financial development corporation. A corporation shall not enjoy any
of the benefits of a small business financial development corporation
following suspension.
(j) The funds in the trust fund account of a corporation under
temporary withdrawal shall be transferred to the expansion fund. Upon
termination of the temporary withdrawal, unless the termination is
caused by suspension, the funds of the corporation that were
transferred to the expansion fund from the trust fund account shall
be returned to the corporation's trust fund account, notwithstanding
Section 200011. While the funds of a corporation's trust fund account
reside in the expansion fund, use of the principal on the funds
shall be governed by the implementing regulations specifying use of
funds in the expansion fund. Interest on the funds moved from a
corporation's trust fund account upon temporary withdrawal shall be
limited to payment of the corporation's administrative expenses, as
contained in the contract between the corporation and the state
pursuant to this title.
CHAPTER 5. EXPANSION FUND
200009. (a) There is hereby continued in existence in the State
Treasury the California Small Business Expansion Fund. All or a
portion of the funds in the expansion fund may be paid out, with the
approval of the Department of Finance, to a lending institution or
financial company that will act as trustee of the funds.
(b) The expansion fund and the trust fund shall be used to pay for
defaulted loan guarantees issued pursuant to this title, surety bond
losses, administrative costs of corporations, and those costs
necessary to protect a real property interest in a defaulted loan or
guarantee.
(c) The expansion fund and trust fund are created solely for the
purpose of receiving state, federal, or local government money, and
other public or private money to make loans, guarantees, and
restricted investments pursuant to this title.
(d) One or more accounts may be created by the executive director
for corporations participating in one or more programs authorized
under this title. Each account is a legally separate account, and
shall not be used to satisfy loan or surety bond guarantees or other
obligations of another corporation.
(e) The amount of guarantee liability outstanding at any one time
shall not exceed five times the amount of funds on deposit in the
expansion fund plus any receivables due from funds loaned from the
expansion fund to another fund in state government as directed by the
Department of Finance pursuant to a statute enacted by the
Legislature, including each of the trust fund accounts within the
trust fund.
(f) This section shall remain in effect only until January 1,
2018, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2018, deletes or extends
that date.
200009.5. (a) All money deposited in the expansion fund is hereby
continuously appropriated, without regard to fiscal years, for the
purposes of this title.
(b) Except as specified in subdivision (a) of Section 200011, the
state shall not be liable or obligated in any way beyond the state
money that is allocated in the expansion fund from moneys from the
General Fund moneys appropriated for such purposes.
200010. (a) The executive director at his or her discretion, with
the approval of the Director of Finance, may request the trustee to
invest those funds in the trust fund in any of the securities
described in Section 16430. Returns from these investments shall be
deposited in the expansion fund and shall be used to support the
programs of this title.
(b) Any investments made in securities described in Section 16430
shall be governed by the statement of investment policy prepared by
the Treasurer pursuant to subdivision (a) of Section 16481.2.
200011. (a) The state shall not be liable or obligated in any way
beyond the money that is allocated and deposited in the corporation'
s trust fund account.
(b) The executive director may reallocate funds held within a
corporation's trust fund account.
(1) The executive director shall reallocate funds based on which
corporation is most effectively using its guarantee funds. If funds
are withdrawn from a less effective corporation as part of a
reallocation, the executive director shall make that withdrawal only
after giving consideration to that corporation's fiscal solvency, its
ability to honor loan guarantee defaults, and its ability to
maintain a viable presence within the region it serves. Reallocation
of funds shall occur no more frequently than once per fiscal year.
Any decision made by the executive director pursuant to this
subdivision may be appealed to the director. The director has
authority to repeal or modify any decision to reallocate funds.
(2) The executive director may authorize a corporation to exceed
the leverage ratio specified in Section 200009 or subdivision (a) of
Section 200025, or subdivision (c) of Section 14017 of the
Corporations Code, pending the annual reallocation of funds pursuant
to this section. However, no corporation shall be permitted to exceed
an outstanding guarantee liability of more than five times its
portion of funds on deposit in the expansion fund.
200012. (a) There is hereby created in the State Treasury the
Small Business Disaster Recovery Loan Loss Reserve Account, as part
of the expansion fund. This account shall be used to pay for
unrecovered losses resulting from loan guarantees issued pursuant to
subdivision (a) of Section 200030 or subdivision (b) of this section,
and disaster loan guarantees issued prior to the effective date of
this section that are in default.
(b) Any lending institution that issues a low-interest loan that
is guaranteed by resources in this account shall be fully reimbursed
for the guaranteed portion of principal and interest that result from
a loan or loans that are in default. If there are insufficient funds
in this account to fully satisfy all claimants, the full faith of
the resources in the General Fund are pledged to satisfy the
obligations of this account. This account may only guarantee as much
loan dollar value as is specifically authorized by the Director of
Finance with the concurrence of the Governor. This account shall
receive all moneys transferred pursuant to Section 200013, and any
unencumbered balances transferred to the California Small Business
Expansion Fund pursuant to Chapters 11 and 12 of the First
Extraordinary Session of the Statutes of 1989, and Chapter 1525 of
the Statutes of 1990, as of July 1, 1992.
(c) The Governor may utilize this authority to prevent business
insolvencies and loss of employment in an area affected by a state of
emergency within the state and declared a disaster by the President
of the United States, by the Administrator of the United States Small
Business Administration, or by the United States Secretary of
Agriculture, or declared to be in a state of emergency by the
Governor of California.
200013. The Director of Finance, with the approval of the
Governor, may transfer moneys in the Special Fund for Economic
Uncertainties to the California Small Business Expansion Fund for use
as authorized by the director, in an amount necessary to make loan
guarantees pursuant to this title.
200014. (a) The funds in the expansion fund shall be paid out to
trust fund accounts by the Treasurer on warrants drawn by the
Controller and requisitioned by the executive director, pursuant to
the purposes of this title. The executive director may transfer funds
allocated from the expansion fund to accounts, established solely to
receive the funds, in lending institutions designated by the office
to act as trustee. The lending institutions so designated shall be
approved by the state for the receipt of state deposits. Interest
earned on the trust fund accounts in lending institutions may be
utilized by the corporations pursuant to the purposes of this title.
(b) Except as specified in subdivision (d), the executive director
shall allocate and transfer money to trust fund accounts based on
performance-based criteria. The criteria shall include, but not be
limited to, the following:
(1) The default record of the corporation.
(2) The number and amount of loans guaranteed by a corporation.
(3) The number and amount of loans made by a corporation if state
funds were used to make those loans.
(4) The number and amount of surety bonds guaranteed by a
corporation.
(c) Any decision made by the executive director pursuant to
subdivision (b) may be appealed to the director within 15 days of
notice of the proposed action. The director may repeal or modify any
reallocation and transfer decisions made by the executive director.
(d) The criteria specified in subdivision (b) shall not apply to a
corporation that has been in existence for five years or less. If
not already adopted, the office shall develop regulations specifying
the basis for transferring account funds to those corporations that
have been in existence for five years or less.
200015. Pursuant to this section and any regulations adopted
pursuant to this title, the state has residual interest in the funds
deposited by the state to a trust fund account and to the return on
these funds from investments. On dissolution or suspension of the
corporation, these funds shall be withdrawn by the executive director
from the trust fund account and returned to the expansion fund or
temporarily transferred to another trust fund account. This provision
shall be contained in the trust instructions to the trustee.
200016. Each trust fund account shall consist of a loan guarantee
account, and, upon recommendation by the executive director, a bond
guarantee account, each of which is a legally separate account, and
the assets of one account shall not be used to satisfy loan
guarantees or other obligations of another corporation. Not more than
one-third of a trust fund account shall be allocated to a bond
guarantee account. A corporation shall not use trust fund accounts to
secure a corporate indebtedness. State funds deposited in the trust
fund accounts, with the exception of guarantees established pursuant
to this title, shall not be subject to liens or encumbrances of the
corporation or its creditors.
200017. (a) The financial institution that is to act as trustee
of the trust fund shall be designated after review by the executive
director. The corporation shall not receive money on deposit to
support guarantees issued under this title without the approval of
the executive director.
(b) State funds may not be used to finance an expense incurred by
a corporation in a location not approved pursuant to a statewide
plan. The prohibition against use of state funds also applies to the
location of satellite offices, and the area served from a corporation
office.
CHAPTER 6. GUARANTEE PROGRAM
200018. (a) The Small Business Loan Guarantee Program, which is
hereby continued in existence, shall provide guarantees to loans
offered by financial institutions to small businesses.
(b) The Legislature finds and declares that the Small Business
Loan Guarantee Program has enabled participating small businesses
that do not qualify for conventional business loans or Small Business
Administration loans to secure funds to expand their businesses.
These small businesses would not have been able to expand their
businesses in the absence of the program. The program has also
provided valuable technical assistance to small businesses to ensure
growth and stability. The study commissioned by former Section
14069.6 of the Corporations Code, as added by Chapter 919 of the
Statutes of 1997, documented the return on investment of the program
and the need for its services. The value of the program has also been
recognized by the Governor through proposals contained in the May
Revision to the Budget Act of 2000 for the 2000-01 fiscal year.
200019. The executive director, following notification to the
director, may do all of the following:
(a) Contract for services entered into pursuant to this title.
(b) Hold public hearings.
(c) Act as liaison between corporations, other state and federal
agencies, lenders, and the Legislature.
(d) Process and tabulate on a monthly basis all corporate reports.
(e) Attend board meetings.
(f) Attend and participate at corporation meetings. The executive
director, or his or her designee, shall be an ex officio, nonvoting
representative on the board of directors and loan committees of each
corporation. The executive director shall meet with the board of
directors of each corporation at least once each fiscal year.
(g) Assist corporations in applying for public and private funding
opportunities, and in obtaining program support from the business
community.
200020. (a) The executive director shall recommend whether the
expansion fund and trust fund accounts are to be leveraged, and if
so, by how much. Upon the request of the corporation, the executive
director's decision may be repealed or modified by an office
resolution.
(b) The amount of guarantee liability outstanding at any one time
shall not exceed five times the amount of funds on deposit in the
expansion fund plus any receivables due from funds loaned from the
expansion fund to another fund in state government as directed by the
Department of Finance pursuant to a statute enacted by the
Legislature, including each of the trust fund accounts within the
trust fund.
(c) This section shall remain in effect only until January 1,
2018, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2018, deletes or extends
that date.
200020. (a) The executive director shall recommend whether the
expansion fund and trust fund accounts are to be leveraged, and if
so, by how much. Upon the request of the corporation, the executive
director's decision may be repealed or modified by an office
resolution.
(b) The amount of guarantee liability outstanding at any one time
shall not exceed four times the amount of funds on deposit in the
expansion fund plus any receivables due from funds loaned from the
expansion fund to another fund in state government as directed by the
Department of Finance pursuant to a statute enacted by the
Legislature, including each of the trust fund accounts within the
trust fund, unless the executive director has permitted a higher
leverage ratio for an individual corporation pursuant to subdivision
(b) of Section 200011.
(c) This section shall become operative on January 1, 2018.
200022. (a) The corporate guarantee shall be backed by funds on
deposit in the corporation's trust fund account, or by receivables
due from funds loaned from the corporation's trust fund account to
another fund in state government, as directed by the Department of
Finance pursuant to a statute enacted by the Legislature.
(b) Loan guarantees shall be secured by a reserve of at least 20
percent to be determined by the executive director.
(c) The expansion fund and trust fund accounts shall be used
exclusively to guarantee obligations and pay the administrative costs
of the corporations.
(d) This section shall remain in effect only until January 1,
2018, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2018, deletes or extends
that date.
200022. (a) The corporate guarantee shall be backed by funds on
deposit in the corporation's trust fund account, or by receivables
due from funds loaned from the corporation's trust fund account to
another fund in state government, as directed by the Department of
Finance pursuant to a statute enacted by the Legislature.
(b) Loan guarantees shall be secured by a reserve of at least 25
percent to be determined by the executive director, unless the
executive director authorizes a higher leverage ratio for an
individual corporation pursuant to subdivision (b) of Section 200011.
(c) The expansion fund and trust fund accounts shall be used
exclusively to guarantee obligations and pay the administrative costs
of the corporations.
(d) This section shall become operative on January 1, 2018.
200024. A corporation may charge the borrower or financial
institution a loan fee on all loans made or guaranteed by the
corporation to defray the operating expenses of the corporation. The
amount of the fee shall be determined by the executive director.
200025. (a) It is the intent of the Legislature that the
corporations make maximal use of their statutory authority to
guarantee loans and surety bonds, including the authority to secure
loans with a minimum loan loss reserve of only 20 percent, so that
the financing needs of small business may be met as fully as possible
within the limits of corporations' loan loss reserves. The office
shall report annually to the Legislature on the financial status of
the corporations and their portfolio of loans and surety bonds
guaranteed pursuant to Section 9795.
(b) Any corporation that serves an area declared to be in a state
of emergency by the Governor or a disaster area by the President of
the United States, the Administrator of the United States Small
Business Administration, or the United States Secretary of
Agriculture shall increase the portfolio of loan guarantees where the
dollar amount of the loan is less than one hundred thousand dollars
($100,000), so that at least 15 percent of the dollar value of loans
guaranteed by the corporation is for those loans. The corporation
shall comply with this requirement within one year of the date the
emergency or disaster is declared. Upon application of a corporation,
the executive director may waive or modify the rule for the
corporation if the corporation demonstrates that it made a good faith
effort to comply and failed to locate lending institutions in the
region that the corporation serves that are willing to make
guaranteed loans in that amount.
(c) This section shall remain in effect only until January 1,
2018, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2018, deletes or extends
that date.
200025. (a) It is the intent of the Legislature that the
corporations make maximal use of their statutory authority to
guarantee loans and surety bonds, including the authority to secure
loans with a minimum loan loss reserve of only 25 percent, unless the
office authorizes a higher leverage ratio for an individual
corporation pursuant to subdivision (b) of Section 200011, so that
the financing needs of small business may be met as fully as possible
within the limits of corporations' loan loss reserves. The office
shall report annually to the Legislature on the financial status of
the corporations and their portfolio of loans and surety bonds
guaranteed pursuant to Section 9795.
(b) Any corporation that serves an area declared to be in a state
of emergency by the Governor or a disaster area by the President of
the United States, the Administrator of the United States Small
Business Administration, or the United States Secretary of
Agriculture shall increase the portfolio of loan guarantees where the
dollar amount of the loan is less than one hundred thousand dollars
($100,000), so that at least 15 percent of the dollar value of loans
guaranteed by the corporation is for those loans. The corporation
shall comply with this requirement within one year of the date the
emergency or disaster is declared. Upon application of a corporation,
the executive director may waive or modify the rule for the
corporation if the corporation demonstrates that it made a good faith
effort to comply and failed to locate lending institutions in the
region that the corporation serves that are willing to make
guaranteed loans in that amount.
(c) This section shall become operative on January 1, 2018.
200026. (a) A corporation shall establish one or more loan
committees, each of which shall be composed of five or more persons,
a majority of whom shall be experienced in banking and lending
operations.
(b) A loan committee shall review applications to the corporation
for a loan or guarantee and shall do each of the following:
(1) Determine the feasibility of the proposed transaction. The
loan committee shall recommend approval of the application only upon
a determination that there is a reasonable chance that the loan will
be repaid.
(2) On the basis of that determination, recommend to the board of
directors any action that the loan committee deems appropriate under
the circumstances, or, in the event that approval authority has been
delegated to the loan committee by the board of directors, approve or
disapprove the loan application.
(c) A loan committee shall expeditiously act to accept or reject
loan applications.
(d) A person who has a financial interest related to a matter over
which the loan committee has authority may not make, participate in
making, or in any way attempt to influence that matter.
200027. Unless delegated to its loan committee, the corporation's
board of directors, upon a recommendation from its loan committee
shall do all of the following:
(a) Emphasize consideration to applications that will increase
employment of disadvantaged, disabled, or unemployed persons, or
increase employment of youth residing in areas of high youth
unemployment and high youth delinquency.
(b) Give consideration to applications from traditional and
safety-net providers of Medi-Cal services that will promote access to
quality medical care for individuals enrolled in Medi-Cal managed
health care networks that are contracting with or owned or operated
by a county board of supervisors, a county health commission, or a
county health authority organized pursuant to Section 14018.7,
14087.31, 14087.35, 14087.36, 14087.38, or 14087.9605 of the Welfare
and Institutions Code.
(c) Not grant a loan or guarantee, unless it determines that the
conditions of Section 200033 are satisfied.
200028. (a) Among other priorities, corporations shall give high
priority to the issuance of loan guarantees to small business
incubators, and to businesses that lease space in incubators.
(b) For the purposes of this section, "incubator" means a facility
that allows new small businesses to increase their probability of
success by sharing needed capital equipment, services, and
facilities, which may include, but is not limited to, the following:
(1) Reception and meeting area.
(2) Secretarial services, such as collating, telephone answering,
or mailhandling.
(3) Accounting and bookkeeping services.
(4) Research libraries.
(5) Onsite financial and management counseling.
(6) Parking.
(7) Flexible lease arrangements for flexible space.
(8) Computer or word processing facilities.
(9) Day care facilities.
(10) Office furniture rentals.
(11) A graduation policy sometimes requiring firms to leave after
three to five years in a subsidized, nurturing environment.
(12) Employee training and placement services.
(c) Among other priorities, corporations shall give high priority
to marketing their services to Phase 1 or Phase 2 Small Business
Innovation Research (SBIR) recipients and providing loan guarantees,
whenever possible.
CHAPTER 7. DIRECT LENDING
200029. (a) A corporation may utilize funds for direct lending as
long as at least 80 percent of the corporate funds, calculated by
dollar amount, and all expansion funds are guaranteed by another
public or private financial institution.
(b) The amount of funds available for direct lending shall be
determined by the executive director. In its capacity as a direct
lender, the corporation may sell in the secondary market the
guaranteed portion of each loan so as to raise additional funds for
direct lending. The office shall issue regulations governing these
direct loans, including the maximum amount of these loans.
(c) To execute the direct loan programs established in this
chapter, the executive director may loan trust funds to a corporation
located in a rural area for the express purpose of lending those
funds to an identified borrower. The loan authorized by the executive
director to the corporation shall be on terms similar to the loan
between the corporation and the borrower.
(d) The amount of the loan may be in excess of the amount of a
loan to any individual borrower, but actual disbursements pursuant to
the office loan agreement shall be required to be supported by a
loan agreement between the borrower and the corporation in an amount
at least equal to the requested disbursement. The loan between the
office and the corporation shall be evidenced by a credit agreement.
In the event that any loan between the corporation and borrower is
not guaranteed by a governmental agency, the portion of the credit
agreement attributable to that loan shall be secured by assignment of
any note, executed in favor of the corporation by the borrower to
the office. The terms and conditions of the credit agreement shall be
similar to the loan agreement between the corporation and the
borrower, which shall be collateralized by the note between the
corporation and the borrower.
(e) In the absence of fraud on the part of the corporation, the
liability of the corporation to repay the loan to the office is
limited to the repayment received by the corporation from the
borrower, except in a case where the United States Department of
Agriculture requires exposure by the corporation in rule or
regulation. The corporation may use trust funds for loan repayment to
the office if the corporation has exhausted a loan loss reserve
created for this purpose. Interest and principal received by the
office from the corporation shall be deposited into the same account
from which the funds were originally borrowed.
(f) Upon the approval of the executive director, a corporation
shall be authorized to borrow trust funds from the office for the
purpose of relending those funds to small businesses. A corporation
shall demonstrate to the executive director that it has the capacity
to administer a direct loan program, and has procedures in place to
limit the default rate for loans to startup businesses. Not more than
25 percent of any trust fund account shall be used for the direct
lending established pursuant to this subdivision. A loan to a
corporation shall not exceed the amount of funds likely to be lent to
small businesses within three months following the loan to the
corporation.
(g) The maximum loan amount to a small business is fifty thousand
dollars ($50,000). In the absence of fraud on the part of the
corporation, the repayment obligation pursuant to the loan to the
corporation shall be limited to the amount of funds received by the
corporation for the loan to the small business and any other funds
received from the office that are not disbursed. The corporation
shall be authorized to charge a fee to the small business borrower,
in an amount determined by the executive director pursuant to
regulation. The program provided for in this subdivision shall be
available in all geographic areas of the state.
CHAPTER 8. DISASTER LOAN GUARANTEES
200030. (a) A corporation may, in an area affected by a state of
emergency within the state and declared a disaster by the President
of the United States, the Administrator of the United States Small
Business Administration, or the United States Secretary of
Agriculture, or declared to be in a state of emergency by the
Governor of California, provide loan guarantees from funds allocated
in Section 200013 to small businesses, small farms, nurseries, and
agriculture-related enterprises that have suffered actual physical
damage or significant economic injury as a result of the disaster.
(b) If regulations have not otherwise been adopted, the office may
adopt or readopt regulations to implement the loan guarantee program
authorized by this section. The office may adopt these regulations
as emergency regulations in accordance with Chapter 3.5 (commencing
with Section 11340) of Part 1 of Division 3 of Title 2, and for
purposes of that chapter, including Section 11349.6, the adoption of
the regulations shall be considered by the Office of Administrative
Law to be necessary for the immediate preservation of the public
peace, health and safety, and general welfare. Notwithstanding
subdivision (e) of Section 11346.1, the regulations shall be repealed
within 180 days after their effective date unless the office
complies with Chapter 3.5 (commencing with Section 11340) of Part 1
of Division 3 of Title 2, as provided in subdivision (e) of Section
11346.1.
(c) Allocations pursuant to subdivision (a) shall be deemed to be
for extraordinary emergency or disaster response operations costs
incurred by the office.
CHAPTER 9. ENERGY EFFICIENCY LOANS
200031. (a) Corporations may grant energy efficiency improvement
loans.
(b) The office shall enter into an agreement with the California
Energy Extension Service of the Office of Planning and Research to
assist small business owners in reducing their energy costs through
low-interest loans and by providing assistance and information.
CHAPTER 10. SURETY BONDS
200033. In furtherance of the purposes set forth in Section
200001 of this code and Section 14002 of the Corporations Code, a
corporation may do any one or more of the following activities, but
only to the extent that the activities are authorized pursuant to the
contract between the office and corporation: guarantee, endorse, or
act as surety on the bonds, notes, contracts, or other obligations
of, or assist financially, any person, firm, corporation, or
association, and may establish and regulate the terms and conditions
with respect to any such loans or financial assistance and the
charges for interest and service connected therewith, except that the
corporation shall not make or guarantee any loan, unless and until
it determines:
(a) There is no probability that the loan or other financial
assistance would be granted by a financial company under reasonable
terms or conditions, and the borrower has demonstrated a reasonable
prospect of repayment of the loan.
(b) The loan proceeds shall be used exclusively in this state.
(c) The loan qualifies as a small business loan or an employment
incentive loan.
(d) That the borrower has a minimum equity interest in the
business as determined by the director.
(e) As a result of the loan, the jobs generated or retained
demonstrate reasonable conformance to the regulations specifying
employment criteria.
200034. (a) In addition to the authority granted by Section
200033, upon approval of the executive director, a corporation may
act as guarantor on a surety bond for any small business contractor,
including, but not limited to, women, minority, and disabled veteran
contractors.
(b) The provisions of subdivision (a) allowing a corporation to
act as a guarantor on surety bonds may be funded through appropriate
federal funding sources. Federal funds shall be deposited in the
Federal Trust Fund in the State Treasury in accordance with Section
16360, for transfer to the expansion fund.
CHAPTER 11. REPORTING
200035. (a) Except as otherwise provided in this title, the trust
fund account shall be used solely to make loans, guarantee bonds,
and guarantee loans, approved by the corporation, that meet the loan
criteria under this title. The state shall not be liable or obligated
in any way as a result of the allocation of state money to a trust
fund account beyond the state money that is allocated and deposited
in the fund pursuant to this title, and that is not otherwise
withdrawn by the state pursuant to this title.
(b) A summary of all loans and bonds to which a state guarantee is
attached shall be submitted to the executive director upon execution
of the loan agreement and periodically thereafter.
(c) A summary of all loans made by a corporation shall be
submitted to the executive director upon execution of the loan
agreement and periodically thereafter.
200036. (a) Annually, not later than January 1 of each year
commencing January 1, 2014, the executive director shall prepare a
report regarding the loss experience for the expansion fund for loan
guarantees, loss reserves, and surety bond guarantees for the
preceding fiscal year. At a minimum, the report shall also include
data regarding numbers of surety bond and loan guarantees awarded
through the expansion fund, including ethnicity and gender data of
participating contractors and other entities, and experience of
surety insurer participants in the bond guarantee program. The report
shall include the information described in Section 200025. The
executive director shall submit that report to the Governor and the
Legislature pursuant to Section 9795.
(b) A corporation shall also report to the executive director, or
his or her designated representative, all statistical and other
reports required by this title, responses to audit reports, budget
requirements, invoices submitted for payment by the state, and
information concerning loans made or guaranteed.
200037. Pursuant to subdivision (f) of Section 8684.2, within 60
days of the conclusion of the period for guaranteeing loans under any
small business disaster loan guarantee program conducted for a
disaster as authorized by Section 8684.2 or 200030, the office shall
provide a report to the Legislature on loan guarantees approved and
rejected by gender, ethnic group, type of business and location, and
each participating loan institution pursuant to Section 9795. The
office need only submit one report to comply with this section and
subdivision (f) of Section 8684.2.
SEC. 4. No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.