Amended in Assembly May 19, 2014

Amended in Senate January 22, 2014

Amended in Senate January 6, 2014

Amended in Senate April 30, 2013

Amended in Senate April 1, 2013

Senate BillNo. 511

Introduced by Senator Lieu

February 21, 2013

An act to add Chapter 2.6 (commencing with Section 13996.85) to Part 4.7 of Division 3 of Title 2 ofbegin insert, end insertbegin insertand to add Chapter 7 (commencing with Section 63090) to Division 1 of Title 6.7 of, end insert the Government Code, relating to statebegin delete government.end deletebegin insert government, and making an appropriation therefor.end insert


SB 511, as amended, Lieu. Trade promotion of Californiabegin delete ports.end deletebegin insert ports: California Export Finance Officeend insertbegin insert.end insert

begin delete


end delete

begin insert(1)end insertbegin insertend insertbegin insertExistingend insert law requires the Director of the Governor’s Office of Business and Economicbegin delete Developmentend deletebegin insert Development, known as GO-Biz,end insert to provide to the Legislature, not later than February 1, 2014, a strategy for international trade and investment that, at a minimum, includes specified information, goals, objectives, and actions related to the promotion of trade.

The bill would require the director to convene, no later than February 1, 2015, a statewide business partnership for the promotion of trade for California ports and to explore greater utilization of California ports, that would be required to advise the director for those purposes, as prescribed.

begin insert

(2) The Bergeson-Peace Infrastructure and Economic Development Bank Act authorizes the California Infrastructure and Economic Development Bank, within GO-Biz, to make loans and provide other assistance to public and private entities for various types of economic development projects, among other things. The bank is governed by a board of directors and under the direction of an executive director. The activities of the bank under these provisions are funded from the California Infrastructure and Economic Development Bank Fund, which is continuously appropriated for these purposes.

end insert
begin insert

This bill would establish the California Export Finance Office (office) within the bank, to be headed by the executive director, for the purpose of expanding employment and income opportunities for Californians through increased exports of California goods, services, and agricultural commodities. The bill would authorize the office to insure, coinsure, and guarantee loans for qualified export transactions, disseminate information to California exporters, and act as an agent for creditworthy California growers, manufacturers, and other exporters.

end insert
begin insert

The bill would establish the Export Finance Fund as a continuously appropriated fund, to receive, among other moneys, state, federal, and private funds, fees and collections made by the office, and the returns on investments made pursuant to these provisions. By establishing a continuously appropriated fund and authorizing deposits into that fund, the bill would make an appropriation.

end insert
begin insert

The bill would also establish within the office an 11-member California Export Finance Board (finance board), composed of specified state officers and individuals appointed by the Governor and the Legislature, to serve 2-year terms at the pleasure of their appointing authority, as specified. The bill would require the finance board, among other duties, to oversee the program authorized by these provisions, including, but not limited to, promulgating regulations establishing programs to insure, coinsure, and provide loan guarantees to support expert transactions. The bill would authorize the finance board to delegate the approval or extension of insurance, coinsurance, or loan guarantees, as specified.

end insert
begin insert

The bill would require the office to comply with existing laws relating to open and public meetings and access to public records, except, under certain circumstances, for records containing the financial data of applicants seeking financial assistance from the board, and telephone or cellular phone conferences or meetings of the board relating to its approval of an application for that financial assistance in the form of loan guarantees, as specified.

end insert
begin insert

(3) Existing constitutional provisions require that a statute that limits the right of access to the meetings of public bodies or the writings of public officials and agencies be adopted with findings demonstrating the interest protected by the limitation and the need for protecting that interest. This bill would make legislative findings to that effect.

end insert

Vote: begin deletemajority end deletebegin insert23end insert. Appropriation: begin deleteno end deletebegin insertyesend insert. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

P3    1begin insert

begin insertSECTION 1.end insert  

end insert
begin insert

The Legislature finds and declares all of the

end insert
begin insert

3(a) Trade is critical to California’s prosperity by fueling
4economic growth, supporting and creating jobs, and raising living
5standards. In 2012, California’s three customs districts led the
6nation by processing $579 billion in two-way trade value. Exports
7have been the second largest contributor to our nation’s gross
8domestic product since the recession ended.

end insert
begin insert

9(b) California’s success as a trade leader cannot be taken for
10 granted, given the weakening of the national and global economies,
11the European debt crisis, and the increased competition of Gulf,
12East Coast, and Mexican ports preparing to compete with
13California’s market share as the expanded Panama Canal becomes
14operational in 2015.

end insert
begin insert

15(c) There are substantial opportunities that can strengthen and
16grow California’s trade sector and increase jobs. As the gateway
17to China, India, and emerging countries, California is well
18positioned to access China, India, and emerging nations that are,
19or are becoming, large markets for exported goods and services.

end insert
begin insert

20(d) Exports support jobs for California workers and more than
21one million direct and indirect jobs. Exports sustain nearly 60,000
22businesses in the state, of which 96 percent are small- to
23medium-sized businesses.

end insert
begin insert

24(e) Many small- and medium-sized California businesses and
25agricultural enterprises, both those that are already exporting and
26want to expand their business and those that are new to exporting,
27would benefit from financing and technical assistance.

end insert
begin insert

P4    1(f) California-based small- and medium-sized exporters were
2assisted from 1985 to 2003, inclusive, under a state program
3designed to work with federal, state, and private institutions to
4provide California exporters with information, technical assistance,
5and financial resources, but the state program ceased when the
6Technology, Trade and Commerce Agency was eliminated for
7budgetary reasons in 2004 by Chapter 229 of the Statutes of 2003.

end insert
begin insert

8(g) Reestablishing the state program will expand job
9opportunities for California’s workforce by increasing exports of
10California goods, services, and agricultural commodities through
11the provision of information, technical assistance, and financial
12support to California exporters.

end insert

begin deleteSECTION 1.end delete
14begin insertSEC. 2.end insert  

Chapter 2.6 (commencing with Section 13996.85) is
15added to Part 4.7 of Division 3 of Title 2 of the Government Code,
16to read:


18Chapter  2.6. Trade Promotion of California Ports




The Director of the Governor’s Office of Business
21and Economic Development shall convene, no later than February
221, 2015, a statewide business partnership for promotion of trade
23for California ports and to explore greater utilization of California
24ports, as follows:

25(a) The business partnership shall include, but is not limited to,
26representatives from ports of entry, ocean carriers, marine terminal
27operators, warehouse operators, railroads, trucking companies,
28labor representatives, and foreign trade zones, representatives of
29environmental groups, and shippers, specifically including
30agricultural exporters, manufacturers, postconsumer secondary
31material handlers, and retailers.

32(b) The business partnership shall advise the Director of the
33Governor’s Office of Business and Economic Development on
34promoting trade for California ports while increasing the use of
35California ports of entry, and ways to increase the opportunity for
36growth and trade activity.

37begin insert

begin insertSEC. 3.end insert  

end insert

begin insertChapter 7 (commencing with Section 63090) is added
38to Division 1 of Title 6.7 of the end insert
begin insertGovernment Codeend insertbegin insert, to read:end insert

begin insert


P5    1Chapter  begin insert7.end insert California Export Finance



begin insert63090.end insert  

As used in this chapter:


begin insert63090.end insert  

(a) “California Export Finance Board” or “finance
5board” means the California Export Finance Board established
6by 63090.7.

7(b) “California Export Finance Office” or “office” means the
8entity created by Section 63090.1.

9(c) “Financial institution” means a bank or savings and loan
10association regulated by the state or federal government, an
11insurance company authorized to transact business in California,
12a personal property broker or industrial loan company that is
13regulated by the state, and a person whose primary business is
14lending money and is regulated by the state.


begin insert63090.1end insert  

(a) The California Export Finance Office is hereby
16created within the bank.

17(b) The purpose of the office is to expand employment and
18income opportunities for Californians through increased exports
19of California goods, services, and agricultural commodities by
20providing actual and potential California exporters, specifically
21small- and medium-sized exporters, with information and technical
22assistance on export opportunities, exporting techniques, and
23financial assistance in support of export transactions.


begin insert63090.2.end insert  

The executive director, or his or her designee, shall
25be the director of the California Export Finance Office and shall
26administer the programs of the California Export Finance Office
27and perform any duties delegated by the finance board.


begin insert63090.3.end insert  

The executive director, or his or her designee, upon
29approval of the finance board, may do all of the following:

30(a) Contract for services.

31(b) Hold public hearings.

32(c) Call upon and reimburse for services any state agency or
33department for assistance in carrying out the objectives of this

35(d) Participate with government or private industry in programs
36for technical assistance, loans, technology, transfer, or any other
37programs related to this chapter.

38(e) Undertake or commission studies on methods to increase
39financial resources to expand the exports of California goods,
40services, and agricultural commodities.

P6    1(f) Exercise any other power as may be necessary to carry out
2the purposes of this chapter.

3(g) Provide export finance training for staff and other
4individuals involved in export finance assistance, including, but
5not limited to, training sessions provided by the Export-Import
6Bank of the United States or other organizations.


begin insert63090.4.end insert  

The office is authorized to do all of the following:

8(a) Insure, coinsure, and guarantee loans related to qualified
9export transactions pursuant to regulations adopted by the finance

11(b) Coordinate to the maximum extent possible the efforts of
12the California Export Finance Office with program and goals of
13the Export-Import Bank of the United States, the International
14Trade Administration of the United States Department of
15Commerce, the Foreign Credit Insurance Association, and other
16public and private programs designed to provide export assistance
17and export-related financing.

18(c) Establish a network of contacts among public and private
19organizations that provide information, technical assistance, and
20financial support of exporting.

21(d) Assemble, publish, and disseminate information to California
22exporters on export opportunities, techniques of exporting, sources
23of public and private export assistance, and sources of
24export-related financing.

25(e) Organize, host, and participate in seminars and other forums
26designed to disseminate information and technical assistance on
27exporting and export-related financing to actual and potential
28California exporters.

29(f) Provide individual firms and agricultural enterprises with
30information and technical assistance relating to exporting and
31export financing.


begin insert63090.5.end insert  

(a) The office shall comply with the Bagley-Keene
33Open Meeting Act (Article 9 (commencing with Section 11120) of
34Chapter 1 of Part 1 of Division 3 of Title 2) and the California
35Public Records Act (Chapter 3.5 (commencing with Section 6250)
36of Division 7 of Title 1), except as specified in subdivision (b).

37(b) (1) Notwithstanding any other law, if the executive director
38determines that disclosure of financial data would be competitively
39injurious to an applicant, the disclosure of financial data contained
40in applications for financial assistance from the finance board
P7    1shall not be required. For this purpose, financial data includes,
2but shall not be limited to, financial statements, details of accounts
3receivable and accounts payable, income tax returns, owner-officer
4compensation records, collateral details, cashflow analysis, orders,
5contracts and letters of credit, and other documents that would
6disclose specific names or addresses of customers or would-be

8(2) Notwithstanding any other law, the finance board or a
9subcommittee of the finance board may review and approve loan
10guarantee requests by means of a telephone or cellular phone
11conference or in a meeting not open to the public.


begin insert63090.6.end insert  

The office may do any of the following:

13(a) Act as agent for creditworthy California growers,
14manufacturers, and other exporters to sell accounts receivable
15that are approved by the office and insured by the Foreign Credit
16Insurance Association or an acceptable private insurer, to qualified

18(b) Function as a clearing house for the collection and
19disbursement of funds relative to those sales through the use of a
20segregated bank account.

21(c) Take any other related actions as may be appropriate and
22necessary to facilitate the sale of export accounts receivable for
23California exporters.


begin insert63090.7.end insert  

(a) The California Export Finance Board is
25established within the bank. The finance board shall consist of 11
26members as follows:

27(1) The Secretary of Food and Agriculture, or his or her

29(2) The executive director, or his or her designee.

30(3) One individual appointed by the Governor who shall be
31knowledgeable of, and experienced in, the exporting and export
32needs of California agriculture.

33(4) Three individuals appointed by the Governor and one
34individual appointed by the Speaker of the Assembly, each of whom
35shall be experienced in exporting, knowledgeable of the needs and
36problems of small and entrepreneurial exporters, and actively
37employed with an exporting firm, export trading company, or
38export management company.

39(5) One person appointed by the Governor and one person
40appointed by the Senate Committee on Rules, each of whom shall
P8    1be experienced in export financing, knowledgeable of the export
2financing needs and problems of small and entrepreneurial
3exporters, and actively employed by a financial institution.

4(6) One person appointed by the Controller and one person
5appointed by the Treasurer, each of whom shall be an
6accomplished credit evaluation representative experienced in
7analyzing financial statements, including, but not limited to, loan
8applications, and in evaluating the creditworthiness of firms that
9are likely to seek insurance or loan guarantees from the office.

10(b) The members shall serve two-year terms at the pleasure of
11the appointing authority. Vacancies shall be filled by the appointing

13(c) Finance board members who are not employees of the state
14shall receive the per diem authorized in Section 11564.5 for each
15day they attend finance board or finance board subcommittee
16meetings. In addition, these members shall be reimbursed for their
17expenses in accordance with the rules of the Department of
18Personnel Administration when attending finance board and
19finance board subcommittee meetings and conducting finance
20board businesses as determined by the finance board.


begin insert63090.8.end insert  

The finance board shall do all of the following:

22(a) Elect a chair and vice chair from among its members. The
23chair shall preside at meetings of the finance board.

24(b) Oversee the program authorized by this chapter, promulgate
25rules and regulations that are necessary to carry out the
26responsibilities under this chapter, including, but not limited to,
27establishing programs to insure, coinsure, and provide loan
28guarantees to support export transactions. The finance board shall
29ensure that these programs conform to international trade
30agreements of the United States. The rules and regulations of the
31finance board shall be adopted in accordance with Article 5
32(commencing with Section 11346) of Chapter 3.5 of Part 1 of
33Division 3 of Title 2.

34(c) Adopt bylaws as are necessary to govern the conduct and
35operation of the finance board.

36(d) Provide for the appointment of advisory groups necessary
37to carry out the powers and duties of the finance board.

38(e) Hold regularly scheduled meetings, at least quarterly, in
39order to carry out the objectives and responsibilities of the finance

P9    1(f) Issue an annual report critiquing the program, its needs, and
2recommended changes. The report shall include an evaluation of
3the program’s impact on all of the following:

4(1) Participation of financial institutions in export financing

6(2) Access of California firms to federal export financing

8(3) Export volume of California firms.

9(4) Economic and social benefits of exports to the state.

10(g) Adopt criteria establishing which exports and export
11transactions are eligible for the insurance, coinsurance, and loan
12guarantees as may be extended by the finance board. Pursuant to
13this subdivision, the finance board shall adopt regulations to ensure
14that all of the following criteria are met:

15(1) Borrowers have a minimum equity interest in the business
16as determined by the finance board.

17(2) Loan guarantees, insurance, and coinsurance are extended
18exclusively to support the export of goods, services, and
19 agricultural commodities produced or grown primarily in
20California by companies or agricultural enterprises that have
21California as the principal place from which their trade or business
22is directed or managed.

23(3) Financing assistance backed by or using funds from the
24Export Finance Fund shall be extended only for any of the
25following circumstances:

26(A) As part of a state match that may be required to secure
27participation of California firms or agricultural enterprises in
28federal, state, or private financing programs.

29(B) If adequate financing assistance is not readily available
30from public or private sources in a timely manner.

31(h) Adopt collateral or security requirements to ensure the full
32repayment of loan guarantees and solvency of any insurance and
33coinsurance program extended under this chapter and to assist in
34evaluating the program authorized by this chapter.

35(i) Approve any and all extensions of insurance, coinsurance,
36or loan guarantees under this chapter.

37(1) The finance board may elect to delegate the approval
38authority to a committee consisting of at least three members of
39the finance board.

P10   1(2) The finance board may elect to delegate this approval to an
2office loan committee if the financial exposure to a borrower or
3insured does not exceed an aggregate of one hundred thousand
4dollars ($100,000). The office loan committee shall be composed
5of the director of the office and two others who shall be selected
6by, and who shall be responsible to, the finance board.

7(3) All approvals delegated pursuant to paragraphs (1) and (2)
8shall be reported to, and shall be reviewed by, the finance board
9at the next regular finance board meeting.

10(j) Work with and seek assistance from the Export-Import Bank
11of the United States, the International Trade Administration of the
12United States Department of Commerce, the Foreign Credit
13Insurance Association, and other public and private programs
14designed to provide export assistance and export-related financing.

15(k) Develop a streamlined application and review process.


begin insert63090.9.end insert  

There is hereby created in the State Treasury the
17Export Finance Fund. The purpose of the Export Finance Fund
18is to receive all of the following moneys for purposes of this

20(a) State, federal, and private funds.

21(b) Insurance premiums and other fees earned by the office.

22(c) Recoveries and collections on claims paid by the office.

23(d) Funds received from the return of investments pursuant to
24this chapter.


begin insert63090.10.end insert  

Notwithstanding Section 13340, all funds deposited
26in the Export Finance Fund are hereby continuously appropriated,
27without regard to fiscal years, for the purposes of this chapter.


begin insert63090.11.end insert  

The state shall not be liable or obligated in any way
29beyond the state funds that are allocated and deposited in the
30Export Finance Fund from state funds that are appropriated for
31those purposes.


begin insert63090.12.end insert  

The Treasurer, with the approval of the finance
33board, may cause funds in the Export Finance Fund to be invested
34and reinvested, from time to time, in the Surplus Money Investment
35Fund as provided in Article 4 (commencing with Section 16470)
36of Chapter 3 of Part 2 of Division 4 of Title 2. Funds in the Export
37Finance Fund and not so invested may be deposited from time to
38time in financial institutions authorized by law to receive deposits
39of public funds. Returns from investments and interest on deposits
40shall be deposited in the Export Finance Fund.

P11   1

begin insert63090.13.end insert  

Funds in the Export Finance Fund shall be paid out
2by the Treasurer on warrants drawn by the Controller upon order
3of the finance board in furtherance of the purposes of this chapter,
4including, but not limited to, the payment of operating expenses,
5principal and interest on bonds, claims under loan guarantee and
6insurance and coinsurance programs, payments for reinsurance,
7and payments required by state, federal, or private export
8programs conducted by the finance board.


begin insert63090.14.end insert  

The office may charge fees for its loan guarantees,
10insurance, coinsurance, and other services, the amount of which
11shall be determined by the finance board.


begin insert63090.15.end insert  

Loan guarantees and insured export transactions
13made by the office shall be secured by no less than a 25 percent
14reserve in the Export Finance Fund. The finance board may elect
15to require a higher reserve. The finance board shall adopt
16regulations on the terms and limits for loan guarantees, but a loan
17guarantee shall not exceed any of the following:

18(a) Ninety percent of the required financing.

19(b) Nine hundred thousand dollars ($900,000).

20(c) The lesser of five years or the useful life of the product.


begin insert63090.16.end insert  

The executive director shall submit an annual
22budget, as part of the budget of the bank, for inclusion in the
23annual budget.


begin insert63090.17.end insert  

If any provision of this chapter or the application
25thereof to any person or circumstance is held invalid, that invalidity
26shall not affect any other provision or application of this chapter
27that can be given effect without the invalid provision or application,
28and to this end the provisions of this chapter are severable.

end insert
29begin insert

begin insertSEC. 4.end insert  

end insert
begin insert

The Legislature finds and declares that Section 3 of
30this act, which adds Section 63090.5 to the Government Code,
31imposes a limitation on the public’s right of access to the meetings
32of public bodies or the writings of public officials and agencies
33within the meaning of Section 3 of Article I of the California
34Constitution. Pursuant to that constitutional provision, the
35Legislature makes the following findings to demonstrate the interest
36protected by this limitation and the need for protecting that

end insert
begin insert

38Disclosure of financial data would be competitively injurious
39to California businesses.

end insert