Amended in Assembly July 2, 2014

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 tobegin insert amend Sections 63088.5 and 63089.5 of, toend insert add Chapter 2.6 (commencing with Section 13996.85) to Part 4.7 of Division 3 of Title 2 of,begin insert to add Article 8.5 (commencing with Section 63089.85) to Chapter 6 of Division 1 of Title 6.7 of,end insert and to add Chapter 7 (commencing with Section 63090) to Division 1 of Title 6.7 of, the Government Code, relating to state government, and making an appropriation therefor.

LEGISLATIVE COUNSEL’S DIGEST

SB 511, as amended, Lieu. Trade promotion of California ports: California Export Finance Office.

(1) Existing law requires the Director of the Governor’s Office of Business and Economic Development, known as GO-Biz, 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.

(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.begin delete 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 deletebegin insert The bank administers the California Small Business Finance Center that administers programs to assist businesses seeking new capital resources. The Small Business Financial Assistance Act of 2013 continues in existence the California Small Business Expansion Fund (expansion fund), a continuously appropriated fund which includes General Fund moneys, and authorizes all or a portion of the funds in the expansion fund to be paid out to a financial institution or financial company that will establish a trust fund and act as a trustee of the funds, as specified. The Small Business Financial Assistance Act of 2013 authorizes the program manager, as defined, to create one or more accounts in the expansion fund and the trust fund for corporations participating in one or more specified programs.end insert

begin insert

The Small Business Financial Assistance Act of 2013 authorizes the bank board to continue programs funded by the expansion fund or to establish one or more programs administered by the bank or under contract with small business financial development corporations. Existing law further authorizes those programs to include specific types of financial products, including loan guarantees and surety bond guarantees. The expansion fund may be used to pay defaulted loan guarantee or surety bond losses, or other financial product defaults or losses, to fund direct loans and other debt instruments, to pay administrative costs of corporations, to pay state support and administrative costs, and to pay costs to protect a real property interest in a financial product default.

end insert
begin insert

This bill would authorize the bank to include insurance, coinsurance, and other forms of surety among the types of financial products included in programs administered by the bank, as prescribed. The bill would authorize the bank to act as agent for creditworthy California growers, manufacturers, and other exporters, to sell approved and insured accounts receivable to qualified parties, and function as a clearinghouse for the collection and disbursement of funds relative to those sales. By expanding the activities of the bank that are funded by continuous appropriation from the expansion fund, this bill would make an appropriation.

end insert
begin delete

This

end delete

begin insertTheend insert bill would establish the California Export Finance Office (office)begin insert within the California Small Business Finance Center,end insert 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 tobegin delete insure, coinsure, and guarantee loans for qualified export transactions,end deletebegin insert coordinate state export activities with international, federal, and other state entities andend insert disseminate information to Californiabegin delete exporters, and act as an agent for creditworthy California growers, manufacturers, and otherend delete exporters.

begin delete

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 delete

The bill would also establish within the office an 11-member California Export Financebegin insert Advisoryend insert Boardbegin delete (finance end deletebegin insert (export advisoryend insert 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 thebegin delete financeend deletebegin insert export advisoryend insert board, among other duties, tobegin delete 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 deletebegin insert advise on specified export-related programs and issue an annual report.end insert

The bill would require the office to comply with existing laws relating to open and public meetings and access to publicbegin delete 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 deletebegin insert records.end insert

begin delete

(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 delete

Vote: 23. Appropriation: yes. Fiscal committee: yes. State-mandated local program: no.

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

P4    1

SECTION 1.  

The Legislature finds and declares all of the
2following:

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.

9(b) California’s success as a trade leader cannot be taken for
10granted, 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
13 California’s market share as the expanded Panama Canal becomes
14operational in 2015.

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.

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.

24(e) Many small- and medium-sized California businesses and
25agricultural enterprises, both those that are already exporting and
P5    1want to expand their business and those that are new to exporting,
2would benefit from financing and technical assistance.

3(f) California-based small- and medium-sized exporters were
4assisted from 1985 to 2003, inclusive, under a state program
5designed to work with federal, state, and private institutions to
6provide California exporters with information, technical assistance,
7and financial resources, but the state program ceased when the
8Technology, Trade, and Commerce Agency was eliminated for
9budgetary reasons in 2004 by Chapter 229 of the Statutes of 2003.

10(g) Reestablishing the state program will expand job
11opportunities for California’s workforce by increasing exports of
12California goods, services, and agricultural commodities through
13the provision of information, technical assistance, and financial
14support to California exporters.

15

SEC. 2.  

Chapter 2.6 (commencing with Section 13996.85) is
16added to Part 4.7 of Division 3 of Title 2 of the Government Code,
17to read:

18 

19Chapter  2.6. Trade Promotion of California Ports
20

 

21

13996.85.  

The Director of the Governor’s Office of Business
22and Economic Development shall convene, no later than February
231, 2015, a statewide business partnership for promotion of trade
24for California ports and to explore greater utilization of California
25ports, as follows:

26(a) The business partnership shall include, but is not limited to,
27representatives from ports of entry, ocean carriers, marine terminal
28operators, warehouse operators, railroads, trucking companies,
29labor representatives, and foreign trade zones, representatives of
30environmental groups, and shippers, specifically including
31agricultural exporters, manufacturers, postconsumer secondary
32material handlers, and retailers.

33(b) The business partnership shall advise the Director of the
34Governor’s Office of Business and Economic Development on
35promoting trade for California ports while increasing the use of
36California ports of entry, and ways to increase the opportunity for
37growth and trade activity.

38begin insert

begin insertSEC. 3.end insert  

end insert

begin insertSection 63088.5 of the end insertbegin insertGovernment Codeend insertbegin insert is amended
39to read:end insert

P6    1

63088.5.  

(a) There is within the Governor’s Office of Business
2and Economic Development the California Infrastructure and
3Economic Development Bank, which shall, among other things,
4administer the California Small Business Finance Center that
5administers programs to assist businesses seeking new capital
6resources, including, but not limited to, the Small Business Loan
7Guarantee Program.

8(b) Pursuant to this chapter and Chapter 1 (commencing with
9Section 14000) of Part 5 of Division 3 of Title 1 of the
10Corporations Code, the bank board may continue programs funded
11by the Small Business Expansion Fund or establish one or more
12programs administered by the bank or under contract with small
13business financial development corporations. Programs established
14pursuant to this chapter or Chapter 1 (commencing with Section
1514000) of Part 5 of Division 3 of Title 1 of the Corporations Code
16may include the following types of financial products:

17(1) Loan guarantees and other credit enhancements.

18(2) Direct loans and other debt instruments.

19(3) Disaster loan guarantees.

20(4) Surety bond guarantees.

begin insert

21(5) Insurance, coinsurance, and other forms of surety.

end insert

22(c) In all of their state-funded programs, the corporations shall,
23to the extent practicable, be complementary to, and not competitive
24with, commercial lenders and other state and federal programs.

25(d) In carrying out this chapter the program manager, the
26executive director, and the bank board may call on the California
27Small Business Board for advice and recommendations. All actions
28by the California Small Business Board are advisory.

29(e) The California Small Business Board may also advise the
30Governor and the Small Business Advocate regarding issues and
31programs affecting California’s small business community,
32including, but not limited to, business innovation and expansion,
33export finance, state procurement, management and technical
34assistance, venture capital, and financial assistance.

35begin insert

begin insertSEC. 4.end insert  

end insert

begin insertSection 63089.5 of the end insertbegin insertGovernment Codeend insertbegin insert, as added
36by Section 4 of Chapter 537 of the Statutes of 2013, is amended
37to read:end insert

38

63089.5.  

(a) There is hereby continued in existence in the State
39Treasury the California Small Business Expansion Fund. All or a
40portion of the funds in the expansion fund may be paid out, with
P7    1the approval of the Department of Finance, to a financial institution
2or financial company that will establish a trust fund and act as
3trustee of the funds.

4(b) The expansion fund and the trust fund shall be used for the
5following purposes:

6(1) To pay defaulted loan guarantee or surety bond losses, or
7other financial product defaults or losses.

8(2) To fund direct loans and other debt instruments.

9(3) To pay administrative costs of corporations.

10(4) To pay state support and administrative costs.

11(5) To pay those costs necessary to protect a real property
12interest in a financial product default.

13(c) The expansion fund and trust fund are created solely for the
14purpose of receiving state, federal, or local government moneys,
15and other public or private moneys to make loans, guarantees, and
16other financial products that the California Small Business Finance
17Center or a financial development corporation is authorized to
18provide. The program manager shall provide written notice to the
19Joint Legislative Budget Committee and to the Chief Clerk of the
20Assembly and the Secretary of the Senate who shall provide a copy
21of the notice to the relevant policy committees within 10 days of
22any nonstate funds being deposited in the expansion fund. The
23notice shall include the source, purpose, timeliness, and other
24relevant information as determined by the bank board.

25(d) (1) One or more accounts in the expansion fund and the
26trust fund may be created by the program manager for corporations
27participating in one or more programs authorized under this chapter
28and Section 8684.2. Each account is a legally separate account,
29and shall not be used to satisfy loan guarantees or other financial
30product obligations of another corporation except when the
31expansion fund or trust fund is shared by multiple corporations.

32(2) The program manager may create one or more holding
33accounts in the expansion fund or the trust fund, or in both, to
34accommodate the temporary or permanent transfers of funds
35pursuant to Section 63089.3.

36(e) The amount of guarantee liability outstanding at any one
37time shall not exceed five times the amount of funds on deposit in
38the expansion fund plus any receivables due from funds loaned
39from the expansion fund to another fund in state government as
40directed by the Department of Finance pursuant to a statute enacted
P8    1by the Legislature, including each of the trust fund accounts within
2the trust fund.

begin insert

3(f) The amount of insured export transaction liability outstanding
4at any one time shall be secured by no less than a 25 percent
5reserve amount of funds on deposit in the expansion fund plus any
6receivables due from funds loaned from the expansion fund to
7another fund in state government as directed by the Department
8of Finance pursuant to a statute enacted by the Legislature,
9including each of the trust fund accounts within the trust fund.

end insert
begin delete

10(f)

end delete

11begin insert(g)end insert This section shall remain in effect only until January 1, 2018,
12and as of that date is repealed, unless a later enacted statute, that
13is enacted before January 1, 2018, deletes or extends that date.

14begin insert

begin insertSEC. 5.end insert  

end insert

begin insertSection 63089.5 of the end insertbegin insertGovernment Codeend insertbegin insert, as added
15by Section 4 of Chapter 537 of the Statutes of 2013, is amended
16to read:end insert

17

63089.5.  

(a) There is hereby continued in existence in the State
18Treasury the California Small Business Expansion Fund. All or a
19portion of the funds in the expansion fund may be paid out, with
20the approval of the Department of Finance, to a financial institution
21or financial company that will establish a trust fund and act as
22trustee of the funds.

23(b) The expansion fund and the trust fund shall be used for the
24following purposes:

25(1) To pay defaulted loan guarantee or surety bond losses, or
26other financial product defaults or losses.

27(2) To fund direct loans and other debt instruments.

28(3) To pay administrative costs of corporations.

29(4) To pay state support and administrative costs.

30(5) To pay those costs necessary to protect a real property
31interest in a financial product default.

32(c) The expansion fund and trust fund are created solely for the
33purpose of receiving state, federal, or local government moneys,
34and other public or private moneys to make loans, guarantees, and
35other financial products that the California Small Business Finance
36Center and a small business financial development corporation are
37authorized to provide.

38(d) One or more accounts in the expansion fund and the trust
39fund may be created by the program manager for corporations
40participating in one or more programs authorized under this
P9    1chapter. Each account is a legally separate account, and shall not
2be used to satisfy loan guarantees or other financial product
3obligations of another corporation except when the expansion fund
4or trust fund is shared by multiple corporations.

5(e) The amount of guarantee liability outstanding at any one
6time shall not exceed four times the amount of funds on deposit
7in the expansion fund plus any receivables due from funds loaned
8from the expansion fund to another fund in state government as
9directed by the Department of Finance pursuant to a statute enacted
10by the Legislature, including each of the trust fund accounts within
11the trust fund.

begin insert

12(f) The amount of insured export transaction liability outstanding
13at any one time shall be secured by no less than a 25 percent
14reserve amount of funds on deposit in the expansion fund plus any
15receivables due from funds loaned from the expansion fund to
16another fund in state government as directed by the Department
17of Finance pursuant to a statute enacted by the Legislature,
18including each of the trust fund accounts within the trust fund.

end insert
begin delete

19(f)

end delete

20begin insert(g)end insert This section shall become operative on January 1, 2018.

21begin insert

begin insertSEC. 6.end insert  

end insert

begin insertArticle 8.5 (commencing with Section 63089.85) is
22added to Chapter 6 of Division 1 of Title 6.7 of the end insert
begin insertGovernment
23Code
end insert
begin insert, to read:end insert

begin insert

24 

25Article begin insert8.5.end insert  Insurance, Coinsurance, and Other Forms of Surety
26

 

27

begin insert63089.85.end insert  

(a) The bank or its delegate may utilize funds for
28offering insurance or coinsurance to businesses with less than 250
29employees that export or plan to export pursuant to the directives
30and requirements.

31(b) The amount of funds available for insurance, coinsurance,
32and other forms of surety shall be determined by the directives
33and requirements.

34(c) The bank or its delegate shall not issue insurance,
35coinsurance, and other forms of surety unless and until it
36determines that all of the following conditions are satisfied:

37(1) The insurance, coinsurance, and other forms of surety
38assistance would not be granted by an insurer under reasonable
39terms and conditions and the business has demonstrated a
40reasonable prospect of repayment.

P10   1(2) The insurance will be extended exclusively to support the
2export of goods, services, and agricultural commodities produced
3or grown primarily in California by companies or agricultural
4enterprises that have California as the principal place from which
5their trade or business is directed or managed.

6(3) The business has a minimum equity interest in the business
7as determined by the directives and requirements.

8(4) As a result of the insurance, coinsurance, and other forms
9of surety instruments, the jobs generated or retained demonstrate
10reasonable conformance to any directives and requirements
11specifying employment criteria.

12(d) The maximum direct insurance, coinsurance, and other
13forms of surety instrument amount to a small business shall be set
14by the directives and requirements.

15(e) The bank shall establish directives and requirements for the
16formation, operation, and responsibilities of an insurance review
17committee, that, at a minimum, requires the following:

18(1) An insurance review committee shall be comprised of at
19least five or more persons, a majority of whom shall be experienced
20in insurance and export finance.

21(2) An insurance review committee shall expeditiously act to
22accept or reject loan applications.

23(3) A person who has a financial interest related to a matter
24over which the insurance review committee has authority shall not
25make, participate in making, or in any way attempt to influence
26that matter.

27(f) The bank board shall adopt collateral or security
28requirements to ensure the solvency of any insurance, coinsurance,
29or surety extended under this chapter and to assist in evaluating
30the program authorized by this chapter.

31(g) The bank may charge the applicant or financial institution
32an insurance origination fee or other fee on all insurance made
33by the bank or its insurance provider to defray the operating
34expenses of the program. The amount of the fee shall be determined
35by the directives and requirements.

36

begin insert63089.86.end insert  

The bank may do any of the following:

37(a) Act as agent for creditworthy California growers,
38manufacturers, and other exporters to sell accounts receivable
39that are approved by the office and insured by the Foreign Credit
P11   1Insurance Association or an acceptable private insurer, to qualified
2parties.

3(b) Function as a clearinghouse for the collection and
4disbursement of funds relative to those sales through the use of a
5segregated bank account.

6(c) Take any other related actions as may be appropriate and
7necessary to facilitate the sale of export accounts receivable for
8California exporters.

end insert
9

begin deleteSEC. 3.end delete
10begin insertSEC. 7.end insert  

Chapter 7 (commencing with Section 63090) is added
11to Division 1 of Title 6.7 of the Government Code, to read:

12 

13Chapter  7. California Export Finance
14

 

begin delete
15

63090.  

As used in this chapter:

end delete
16

63090.  

begin delete (a)end deletebegin insert As used in this chapter:end insert

17begin insert(a)end insert “California Export Financebegin insert Advisoryend insert Board” orbegin delete “financeend deletebegin insert end insert
18begin insert“export advisoryend insert board” means the California Export Finance
19begin insert Advisoryend insert Board established by 63090.7.

20(b) “California Export Finance Office” or “office” means the
21entity created by Section 63090.1.

begin delete

22(c) “Financial institution” means a bank or savings and loan
23association regulated by the state or federal government, an
24insurance company authorized to transact business in California,
25a personal property broker or industrial loan company that is
26regulated by the state, and a person whose primary business is
27lending money and is regulated by the state.

end delete
begin insert

28(c) “Small-size and medium-size businesses” mean firms with
29less than 250 employees.

end insert
30

begin delete63090.1end delete
31begin insert63090.1.end insert  

(a) The California Export Finance Office is hereby
32created within thebegin insert California Small Business Finance Center,
33within theend insert
bank.

34(b) The purpose of the office is to expand employment and
35income opportunities for Californians through increased exports
36of California goods, services, and agricultural commodities by
37providing actual and potential California exporters, specifically
38small- and medium-sized exporters, with information and technical
39 assistance on export opportunities, exporting techniques, and
40financial assistance in support of export transactions.

P12   1

63090.2.  

The executive director, or his or her designee, shall
2be the director of the California Export Finance Office and shall
3administer the programs of the California Export Finance Office
4and perform any duties delegated by thebegin delete financeend deletebegin insert bankend insert board.

5

63090.3.  

The executive director, or his or her designee, upon
6approval of thebegin delete financeend deletebegin insert bankend insert board, may do all of the following:

7(a) Contract for services.

8(b) Hold public hearings.

9(c) Call upon and reimburse for services any state agency or
10department for assistance in carrying out the objectives of this
11chapter.

12(d) Participate with government or private industry in programs
13for technical assistance,begin delete loans,end delete technology, transfer, or any other
14programs related to this chapter.

15(e) Undertake or commission studies on methods to increase
16financial resources to expand the exports of California goods,
17services, and agricultural commodities.

18(f) Exercise any other power as may be necessary to carry out
19the purposes of this chapter.

20(g) Providebegin insert or facilitate the provision ofend insert export finance training
21for staff and other individuals involved in export finance assistance,
22including, but not limited to, training sessions provided by the
23begin delete Export-Import Bank of the United States or otherend deletebegin insert federal
24government and other public and privateend insert
organizations.

25

63090.4.  

The office is authorized to do all of the following:

begin delete

26(a) Insure, coinsure, and guarantee loans related to qualified
27export transactions pursuant to regulations adopted by the finance
28board.

end delete
begin delete

11 29(b)

end delete

30begin insert(a)end insert Coordinatebegin delete to the maximum extent possible the efforts of
31the California Export Finance Office with program and goals of
32the Export-Import Bank of the United States, the International
33Trade Administration of the United States Department of
34Commerce, the Foreign Credit Insurance Association, and other
35public and private programsend delete
begin insert state export activities with
36international, federal, and other state entities that provide
37programs or services that areend insert
designed to provide export assistance
38and export-related financing.

begin delete

18 39(c)

end delete

P13   1begin insert(b)end insert Establish a network of contacts among public and private
2organizations that provide information, technical assistance, and
3financial support of exporting.

begin delete

21 4(d)

end delete

5begin insert(c)end insert Assemble, publish, and disseminate information to California
6exporters on export opportunities, techniques of exporting, sources
7of public and private export assistance, and sources of
8export-related financing.

begin delete

25 9(e)

end delete

10begin insert(d)end insert Organize, host, and participate in seminars and other forums
11designed to disseminate information and technical assistance on
12exporting and export-related financing to actual and potential
13California exporters.

begin delete

29 14(f)

end delete

15begin insert(e)end insert Providebegin insert small-size and medium-size businesses, includingend insert
16 individual firms and agriculturalbegin delete enterprisesend deletebegin insert enterprises,end insert with
17information and technical assistance relating to exporting and
18export financing.

19

63090.5.  

begin delete(a)end deletebegin deleteend deleteThe office shall comply with the Bagley-Keene
20Open Meeting Act (Article 9 (commencing with Section 11120)
21of Chapter 1 of Part 1 of Division 3 of Title 2) and the California
22Public Records Act (Chapter 3.5 (commencing with Section 6250)
23of Division 7 of Title 1), except as specified in subdivision (b).

begin delete

24(b) (1) Notwithstanding any other law, if the executive director
25determines that disclosure of financial data would be competitively
26injurious to an applicant, the disclosure of financial data contained
27in applications for financial assistance from the finance board shall
28not be required. For this purpose, financial data includes, but shall
29not be limited to, financial statements, details of accounts
30receivable and accounts payable, income tax returns, owner-officer
31compensation records, collateral details, cashflow analysis, orders,
32contracts and letters of credit, and other documents that would
33disclose specific names or addresses of customers or would-be
34customers.

35(2) Notwithstanding any other law, the finance board or a
36subcommittee of the finance board may review and approve loan
37guarantee requests by means of a telephone or cellular phone
38conference or in a meeting not open to the public.

end delete
begin delete
39

63090.6.  

The office may do any of the following:

P14   1(a) Act as agent for creditworthy California growers,
2manufacturers, and other exporters to sell accounts receivable that
3are approved by the office and insured by the Foreign Credit
4Insurance Association or an acceptable private insurer, to qualified
5parties.

6(b) Function as a clearing house for the collection and
7disbursement of funds relative to those sales through the use of a
8segregated bank account.

9(c) Take any other related actions as may be appropriate and
10necessary to facilitate the sale of export accounts receivable for
11California exporters.

end delete
12

63090.7.  

(a) The California Export Financebegin insert Advisoryend insert Board
13is established within the bank. Thebegin delete financeend deletebegin insert export advisoryend insert board
14shall consist of 11 members as follows:

15(1) The Secretary of Food and Agriculture, or his or her
16designee.

17(2) The executive director, or his or her designee.

18(3) One individual appointed by the Governor who shall be
19knowledgeable of, and experienced in, the exporting and export
20needs of California agriculture.

21(4) Three individuals appointed by the Governor and one
22individual appointed by the Speaker of the Assembly, each of
23whom shall be experienced in exporting, knowledgeable of the
24needs and problems of small and entrepreneurial exporters, and
25actively employed with an exporting firm, export trading company,
26or export management company.

27(5) One person appointed by the Governor and one person
28appointed by the Senate Committee on Rules, each of whom shall
29be experienced in export financing, knowledgeable of the export
30financing needs and problems of small and entrepreneurial
31exporters, and actively employed by a financial institution.

32(6) One person appointed by the Controller and one person
33appointed by the Treasurer, each of whom shall be an accomplished
34credit evaluation representative experienced in analyzing financial
35statements, including, but not limited to, loan applications, and in
36evaluating the creditworthiness of firms that are likely to seek
37insurance or loan guarantees from the office.

38(b) The members shall serve two-year terms at the pleasure of
39the appointing authority. Vacancies shall be filled by the appointing
40authority.

P15   1(c) begin deleteFinance end deletebegin insertExport advisory end insertboard members who are not
2employees of the state shall receive the per diem authorized in
3Section 11564.5 for each day they attendbegin delete financeend deletebegin insert export advisoryend insert
4 board orbegin delete financeend deletebegin insert export advisoryend insert board subcommittee meetings.
5In addition, these members shall be reimbursed for their expenses
6in accordance with the rules of the Department of Personnel
7Administration when attendingbegin delete financeend deletebegin insert export advisoryend insert board and
8begin deletefinanceend deletebegin insert export advisoryend insert board subcommittee meetings and
9conductingbegin delete financeend deletebegin insert export advisory end insert board businesses as determined
10by thebegin delete financeend deletebegin insert export advisoryend insert board.

11

63090.8.  

Thebegin delete financeend deletebegin insert export advisoryend insert board shall do all of the
12following:

13(a) Elect a chair and vice chair from among its members. The
14chair shall preside at meetings of thebegin delete financeend deletebegin insert export advisoryend insert board.

15(b) begin deleteOversee the program end deletebegin insertAdvise on the export-related programs end insert
16authorized bybegin insert Chapter 6 (commencing with Section 63088) andend insert
17 this begin delete chapter, promulgate rules and regulations that are necessary
18to carry out the responsibilities under this chapter, including, but
19not limited to, establishing programs to insure, coinsure, and
20provide loan guarantees to support export transactions. The finance
21board shall ensure that these programs conform to international
22trade agreements of the United States. The rules and regulations
23of the finance board shall be adopted in accordance with Article
245 (commencing with Section 11346) of Chapter 3.5 of Part 1 of
25Division 3 of Title 2.end delete
begin insert chapter.end insert

26(c) Adopt bylaws as are necessary to govern the conduct and
27operation of thebegin delete financeend deletebegin insert export advisoryend insert board.

28(d) Provide for the appointment of advisorybegin delete groupsend deletebegin insert subgroupsend insert
29 necessary tobegin delete carry out the powers and duties ofend deletebegin insert inform and
30deliberate on issues of significance toend insert
thebegin delete financeend deletebegin insert export advisoryend insert
31 board.

32(e) Hold regularly scheduled meetings, at least quarterly, in
33order to carry out the objectives and responsibilities of thebegin delete financeend delete
34begin insert export advisory end insertboard.

35(f) Issue an annual report critiquingbegin delete the program, its needs,end delete
36begin insert California’s export-related programs, service, and other activities,end insert
37 and recommended changes. The report shall include an evaluation
38ofbegin delete the program’send deletebegin insert how these activitiesend insert impactbegin delete onend delete all of the following:

39(1) Participation of financial institutions in export financing
40programs.

P16   1(2) Access of California firms to federal export financing
2programs.

3(3) Export volume of California firms.

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

begin delete

5(g) Adopt criteria establishing which exports and export
6transactions are eligible for the insurance, coinsurance, and loan
7guarantees as may be extended by the finance board. Pursuant to
8this subdivision, the finance board shall adopt regulations to ensure
9that all of the following criteria are met:

10(1) Borrowers have a minimum equity interest in the business
11as determined by the finance board.

12(2) Loan guarantees, insurance, and coinsurance are extended
13exclusively to support the export of goods, services, and
14 agricultural commodities produced or grown primarily in California
15by companies or agricultural enterprises that have California as
16the principal place from which their trade or business is directed
17or managed.

18(3) Financing assistance backed by or using funds from the
19Export Finance Fund shall be extended only for any of the
20following circumstances:

21(A) As part of a state match that may be required to secure
22participation of California firms or agricultural enterprises in
23federal, state, or private financing programs.

24(B) If adequate financing assistance is not readily available from
25public or private sources in a timely manner.

26(h) Adopt collateral or security requirements to ensure the full
27repayment of loan guarantees and solvency of any insurance and
28coinsurance program extended under this chapter and to assist in
29evaluating the program authorized by this chapter.

30(i) Approve any and all extensions of insurance, coinsurance,
31or loan guarantees under this chapter.

32(1) The finance board may elect to delegate the approval
33authority to a committee consisting of at least three members of
34the finance board.

35(2) The finance board may elect to delegate this approval to an
36office loan committee if the financial exposure to a borrower or
37insured does not exceed an aggregate of one hundred thousand
38dollars ($100,000). The office loan committee shall be composed
39of the director of the office and two others who shall be selected
40by, and who shall be responsible to, the finance board.

P17   1(3) All approvals delegated pursuant to paragraphs (1) and (2)
2shall be reported to, and shall be reviewed by, the finance board
3at the next regular finance board meeting.

4(j) Work with and seek assistance from the Export-Import Bank
5of the United States, the International Trade Administration of the
6United States Department of Commerce, the Foreign Credit
7Insurance Association, and other public and private programs
8designed to provide export assistance and export-related financing.

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

end delete
begin delete
10

63090.9.  

There is hereby created in the State Treasury the
11Export Finance Fund. The purpose of the Export Finance Fund is
12to receive all of the following moneys for purposes of this chapter:

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

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

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

16(d) Funds received from the return of investments pursuant to
17this chapter.

end delete
begin delete
18

63090.10.  

Notwithstanding Section 13340, all funds deposited
19in the Export Finance Fund are hereby continuously appropriated,
20without regard to fiscal years, for the purposes of this chapter.

end delete
begin delete
21

63090.11.  

The state shall not be liable or obligated in any way
22beyond the state funds that are allocated and deposited in the
23Export Finance Fund from state funds that are appropriated for
24those purposes.

end delete
begin delete
25

63090.12.  

The Treasurer, with the approval of the finance
26board, may cause funds in the Export Finance Fund to be invested
27and reinvested, from time to time, in the Surplus Money Investment
28Fund as provided in Article 4 (commencing with Section 16470)
29of Chapter 3 of Part 2 of Division 4 of Title 2. Funds in the Export
30Finance Fund and not so invested may be deposited from time to
31time in financial institutions authorized by law to receive deposits
32of public funds. Returns from investments and interest on deposits
33shall be deposited in the Export Finance Fund.

end delete
begin delete
34

63090.13.  

Funds in the Export Finance Fund shall be paid out
35by the Treasurer on warrants drawn by the Controller upon order
36of the finance board in furtherance of the purposes of this chapter,
37including, but not limited to, the payment of operating expenses,
38principal and interest on bonds, claims under loan guarantee and
39insurance and coinsurance programs, payments for reinsurance,
P18   1and payments required by state, federal, or private export programs
2conducted by the finance board.

end delete
begin delete
3

63090.14.  

The office may charge fees for its loan guarantees,
4insurance, coinsurance, and other services, the amount of which
5shall be determined by the finance board.

end delete
begin delete
6

63090.15.  

Loan guarantees and insured export transactions
7made by the office shall be secured by no less than a 25 percent
8reserve in the Export Finance Fund. The finance board may elect
9to require a higher reserve. The finance board shall adopt
10regulations on the terms and limits for loan guarantees, but a loan
11guarantee shall not exceed any of the following:

12(a) Ninety percent of the required financing.

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

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

end delete
begin delete
15

63090.16.  

The executive director shall submit an annual budget,
16as part of the budget of the bank, for inclusion in the annual budget.

end delete
begin delete
17

63090.17.  

If any provision of this chapter or the application
18thereof to any person or circumstance is held invalid, that invalidity
19shall not affect any other provision or application of this chapter
20that can be given effect without the invalid provision or application,
21and to this end the provisions of this chapter are severable.

end delete
begin delete
22

SEC. 4.  

The Legislature finds and declares that Section 3 of
23this act, which adds Section 63090.5 to the Government Code,
24imposes a limitation on the public’s right of access to the meetings
25of public bodies or the writings of public officials and agencies
26within the meaning of Section 3 of Article I of the California
27Constitution. Pursuant to that constitutional provision, the
28Legislature makes the following findings to demonstrate the interest
29protected by this limitation and the need for protecting that interest:

30Disclosure of financial data would be competitively injurious to
31California businesses.

end delete


O

    93