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 delete
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
begin delete insure, coinsure, and guarantee loans for qualified export transactions,end delete disseminate
information to California begin delete exporters, and act as an agent for creditworthy California growers, manufacturers, and otherend delete exporters.
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 Finance Board
begin delete (finance end delete 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 begin delete financeend delete
board, among other duties, to begin 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 delete
The bill would require the office to comply with existing laws relating to open and public meetings and access to public
begin 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 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: 2⁄3. Appropriation: yes. Fiscal committee: yes. State-mandated local program: no.
The people of the State of California do enact as follows:
The Legislature finds and declares all of the
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
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.
Chapter 2.6 (commencing with Section 13996.85) is
16added to Part 4.7 of Division 3 of Title 2 of the Government Code,
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.
(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
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.
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.
(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
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.
11 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.
(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
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.
20 This section shall become operative on January 1, 2018.
Chapter 7 (commencing with Section 63090) is added
11to Division 1 of Title 6.7 of the Government Code, to read:
As used in this chapter:
begin delete (a)end delete
17 “California Export Finance Board” or
begin delete “financeend delete
18 board” means the California Export Finance
19 Board established by 63090.7.
20(b) “California Export Finance Office” or “office” means the
21entity created by Section 63090.1.
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.
(a) The California Export Finance Office is hereby
32created within the 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.
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 the
begin delete financeend delete board.
The executive director, or his or her designee, upon
6approval of the
begin delete financeend delete 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
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) Provide export finance training
21for staff and other individuals involved in export finance assistance,
22including, but not limited to, training sessions provided by the
begin delete Export-Import Bank of the United States or otherend delete organizations.
The office is authorized to do all of the following:
26(a) Insure, coinsure, and guarantee loans related to qualified
27export transactions pursuant to regulations adopted by the finance
11 29(b)end delete
begin delete to the maximum extent possible the efforts of designed to provide export assistance
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
38and export-related financing.
18 39(c)end delete
P13 1 Establish a network of contacts among public and private
2organizations that provide information, technical assistance, and
3financial support of exporting.
21 4(d)end delete
5 Assemble, publish, and disseminate information to California
6exporters on export opportunities, techniques of exporting, sources
7of public and private export assistance, and sources of
25 9(e)end delete
10 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
29 14(f)end delete
16 individual firms and agricultural
begin delete enterprisesend delete with
17information and technical assistance relating to exporting and
begin delete(a)end delete begin delete end 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).
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
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.
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
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
(a) The California Export Finance Board
13is established within the bank. The
begin delete financeend delete board
14shall consist of 11 members as follows:
15(1) The Secretary of Food and Agriculture, or his or her
17(2) The executive director, or his or her designee.
18(3) One individual appointed by the Governor who
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
begin deleteFinance end deleteboard members who are not
2employees of the state shall receive the per diem authorized in
3Section 11564.5 for each day they attend
begin delete financeend delete
4 board or
begin delete financeend delete 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 attending
begin delete financeend delete board and
begin deletefinanceend delete board subcommittee meetings and
begin delete financeend delete board businesses as determined
begin delete financeend delete board.
begin delete financeend delete board shall do all of the
13(a) Elect a chair and vice chair from among its members. The
14chair shall preside at meetings of the
begin delete financeend delete board.
begin deleteOversee the program end delete
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
26(c) Adopt bylaws as are necessary to govern the conduct and
27operation of the
begin delete financeend delete board.
28(d) Provide for the appointment of advisory
begin delete groupsend delete
29 necessary to
begin delete carry out the powers and duties ofend delete the begin delete financeend delete
32(e) Hold regularly scheduled meetings, at least quarterly, in
33order to carry out the objectives and responsibilities of the
begin delete financeend delete
35(f) Issue an annual report critiquing
begin delete the program, its needs,end delete
37 and recommended changes. The report shall include an evaluation
begin delete the program’send delete impact begin delete onend delete all of the following:
39(1) Participation of financial institutions in export financing
P16 1(2) Access of California firms to federal export financing
3(3) Export volume of California firms.
4(4) Economic and social benefits of exports to the state.
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
18(3) Financing assistance backed by or using funds from the
19Export Finance Fund shall be extended only for any of the
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
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
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.
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
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.
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.
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.
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.
The executive director shall submit an annual budget,
16as part of the budget of the bank, for inclusion in the annual budget.
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.
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