BILL ANALYSIS                                                                                                                                                                                                    Ó

                                                               SB 511
                                                               Page  1

       Date of Hearing:   June 24, 2014

                                 Jose Medina, Chair
                      SB 511 (Lieu) - As Amended:  May 19, 2014

        SENATE VOTE  :   31-0
       SUBJECT  :   Trade promotion and California ports 

        SUMMARY  :   Establishes the California Export Finance Office within the  
       California Infrastructure and Economic Development Bank (I-Bank) and  
       requires the Governor's Office of Business and Economic Development  
       (GO-Biz) to convene a statewide business partnership to discuss the  
       promotion and greater utilization of California ports.  Specifically,  
        this bill  :   

       1)Sets forth findings and declarations, including, but not limited to,  
         the value of trade to the California economy, that there are  
         substantial opportunities to strengthen and grow California's trade  
         sectors, and the benefits small and medium size businesses would  
         receive from financing and technical assistance.  

       2)Requires GO-Biz to convene a statewide business partnership by  
         February 1, 2015, for the purpose of advising the Director on  
         promoting trade for California ports, while increasing the use of  
         California ports of entry, and ways to increase the opportunity for  
         growth and trade activity.  

       3)Requires representatives from the following groups be included in  
         the business partnership:  ports of entry; ocean carriers; marine  
         terminal operators; warehouse operators; railroads; trucking  
         companies; labor representatives; foreign trade zones; environmental  
         group representatives; and shippers, as specified.

       4)Establishes the Export Finance Office within the I-Bank, for the  
         purpose of expanding employment and income opportunities for  
         Californians through increased exports of California goods,  
         services, and agricultural commodities.  This purpose is to be  
         achieved by providing actual and potential California small and  
         medium-size exporters with information and technical assistance on  
         export opportunities, exporting techniques, and financial assistance  
         in support of export transactions.   

       5)Requires the executive director of the I-Bank or his or her designee  


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         to serve as the director of the Export Finance Office.  Among other  
         activities the director is authorized to:

          a)   Hold public hearings;
          b)   Contract for services;
          c)   Call upon and reimburse other state entities for assisting in  
            carrying out the objectives of the Export Finance Office;
          d)   Participate with government or private industry in programs  
            for technical assistance, loans, technology, transfer, or any  
            other programs related to the Export Finance Office;
          e)   Undertake or commission studies on methods to increase  
            financial resources to expand the exports of California goods,  
            services, and agricultural commodities;
          f)   Exercise other power as may be necessary to carry out the  
            purpose of the Export Finance Office;
          g)   Provide export finance training for staff and other  
            individuals involved.

       6)Authorizes the California Export Finance Office to:

          a)   Insure, coinsure, and guarantee loans related to qualified  
            export transactions; 
          b)   Coordinate the activities of the California Export Finance  
            Office with the Export-Import Bank of the U.S., the International  
            Trade Administration, the Foreign Credit Insurance Association,  
            and other public and private programs designated to provide  
            export assistance and export-related financing;
          c)   Establish a network of contacts among public and private  
            organizations that provide technical assistance, information, and  
            financial support for exporting;
          d)   Assembly, publish, and disseminate information to California  
            exporters on export opportunities, techniques for exporting,  
            sources of public and private export assistance, and sources of  
            export-related financing;
          e)   Organize, host, and participate in seminars and other forums  
            designed to disseminate information and technical assistance on  
            exporting and export financing;  
          f)   Provide individual firms and agricultural enterprises with  
            information and technical assistance relating to exporting and  
            exporting finance;
          g)   Act as an agent for creditworthy California growers,  
            manufacturers, and other exporters to sell accounts receivable  
            that are approved by the California Export Finance Office and  
            insured by the Foreign Credit Insurance Association or an  
            acceptable insurer, to qualified parties; and


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          h)   Function as a clearinghouse for the collection and  
            disbursement of funds relative to those sales through the use of  
            a segregated bank account.

       7)Establishes an 11-member California Export Finance Board (Board) and  
         authorizes the Board to adopt regulations to implement the  
         responsibilities and activities of the California Export Finance  
         Office.  Board members are proposed to serve two-year terms, be  
         compensated for their time, as specified, and include:

          a)   The Executive Director of the I-Bank or his or her designee;
          b)   The Secretary of Food and Agriculture;
          c)   One individual appointed by the Governor who has knowledge of  
            exporting agricultural products;
          d)   Three individuals appointed by the Governor and one individual  
            appointed the Speaker who are knowledgeable and know the needs of  
            small exporters and are actively employed with an exporting firm;
          e)   One individual appointed by the Governor and one individual  
            appointed by the Senate Committee on Rules, each of whom are  
            knowledgeable about export financing, the problems of small and  
            entrepreneurial exporters, and actively employed by a financial  
          f)   One person appointed by the Controller and one person  
            appointed by the Treasurer, each of whom has expertise as an  
            accomplished credit evaluation representative experienced in  
            analyzing financial statements, as specified.

       8)Authorizes the Board to elect a chair and vice chair from among its  
         members, oversee the programs and promulgate rules and regulations  
         that are necessary to establish those programs, including, but not  
         limited to, programs to insure, co-insure, and provide loan  
         guarantees to support export transactions.   The Board is also  
         required to adopt by-laws; appoint advisory committees; and hold  
         regularly scheduled meetings, at least quarterly.

       9)Requires, as part of adopting the rules and regulations, to adopt  
         criteria establishing which exports and export transactions are  
         eligible for insurance, coinsurance, and loan guarantees, which  
         include all the following:

          a)   Borrowers have a minimum equity interest in the business, as  
          b)   Loan guarantees, insurance, and coinsurance are extended  
            exclusively to support the export of goods, services, and  
            agricultural commodities produced or grown primarily in  


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            California by companies or agricultural enterprises that have  
            California as a principal place from which their trade or  
            business is directed or managed;
          c)   Financing assistance, which is backed by money in the Export  
            Finance Funds, which is created in this bill, is only offered  
            under the following circumstances:
            i)     As part of a state match that is required to secure  
              participation of California firms or agricultural enterprise in  
              federal, state, or private financing;
            ii)    If inadequate financing assistance is not otherwise  
              readily available from other public or private sources in a  
              timely manner;
          d)   Collateral and security requirements to ensure full repayment  
            of loan guarantees and solvency of any insurance and coinsurance  
            program, as well as assisting in the evaluation of the program.
          e)   Approve all extensions of insurance, coinsurance, or loan  
            guarantees.  This authority may be delegated to three or more  
            members of the Board, as specified.

       10)Requires the Board to issue an annual report critiquing the  
         program, its needs, and recommend changes.  Requires the report to  
         also include an evaluation of the program's impact on all of the  

          a)   Participation of financial institutions in export finance  
          b)   Access of California firms to federal export financing  
          c)   Export volume of California firms; and
          d)   Economic and social benefits of exports to the state.

       11)Requires the California Export Finance Office to comply with the  
         Bagley-Keene Open Meeting Act and the California Public Records Act.

       12)Authorizes the executive director of the I-Bank to determine  
         whether the disclosure of financial data contained in applications  
         for financial assistance would be competitively injurious to the  
         applicant and, if so, not require such information.

       13)Establishes the Export Finance Fund, as a continuously appropriated  
         fund, for the purpose of receiving state, federal, and private  
         funds, fees and collections, and the return from investments made  
         pursuant to this bill.

       14)Provides that the state is not liable or obligated beyond the state  


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         funds deposited in the Export Finance Fund.

        EXISTING LAW:  

       1)Establishes GO-Biz for the purpose of serving as the lead state  
         entity for economic strategy and marketing of California on issues  
         related to business development, private sector investment, and  
         economic growth.  

       2)Establishes the I-Bank, within GO-Biz, to administer a range of  
         programs including the Small Business Finance Center, the State  
         Infrastructure Revolving Loan Fund, and to serve as a conduit bond  

        FISCAL EFFECT  :   Unknown

        COMMENTS  :    

        1)Author's Purpose  :  "Currently, the Government Code does not  
         explicitly require the California Infrastructure and Economic  
         Development Bank (I-Bank) to allocate funds for export finance.   
         From 1985-2003, California had a state entity, the California Export  
         Finance Office (CEFO), that provided capital loan guarantees to  
         banks and other financial institutions on behalf of small and  
         medium-sized California companies to support their export efforts,  
         much like the proposed office in SB 511. The program was successful  
         in that it helped many companies, generated nearly a half billion  
         dollars in export sales and was primarily fiscally self-sustaining.   
         Unfortunately, CEFO expired with the elimination of the Technology,  
         Trade and Commerce Agency in 2004.

         Given that China, India, and other Asian countries are now growing  
         their economies, a huge number of new middle class consumers will  
         emerge, providing an enormous market that California, as the gateway  
         to the Pacific Rim, is well positioned to go after.  To remain  
         competitive with Mexico and British Columbia - both of which have  
         dramatically increased exports in 2012 - California needs to engage  
         small and medium sized businesses into the export market. Namely,  
         reinstating CEFO would achieve this goal by providing transactional  
         export financing for small and medium sized businesses."

        2)Framing the Policy Issue  :  This measure proposes the  
         re-establishment of the California Export Finance Office, a  
         government entity which last existed in 2003 within the Technology,  
         Trade, and Commerce Agency (TTCA).  In 2003, the TTCA was eliminated  


                                                               SB 511
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         along with all of the trade-related programs.  The California Export  
         Finance Office was a very popular state program and served as an  
         important link within California's network of export-related  
         programs and services.  

         Today, however, California and the federal government offer small  
         business financing and technical assistance programs in an  
         organizational framework which is different from a decade ago.   
         Integrating, rather than duplicating, export program and service  
         responsibilities would result in a leaner California Export Finance  
         Office structure and offer opportunities to leverage existing  
         program proficiencies, while compensating for weaknesses. 

         The analysis includes information on the state's current  
         international trade programs and services, California's trade  
         dependent economy, and the national trade initiate.  Amendments are  
         discussed in Comment 8.

        3)Traded industries and Economic Growth  :  California's $2 trillion  
         economy naturally functions as an independent economic power within  
         the global economy.  In fact, compared to other nations, California  
         has one of the 10 largest economies in the world, due to it being a  
         top-tier trade partner, a best-in-class investment location, a high  
         quality producer of goods and services, and the home and key access  
         point for a massive consumer-base.  In 2013, California exported  
         $168 billion in products to over 220 foreign countries.  While  
         California has been significantly impacted by the recession, exports  
         continued to increase in almost every quarter from 2010 through  

         Recently, the value of trade-related industries, as a component of  
         the broader economy, was the subject of a study by the Brookings  
         Institute and JP Morgan Chase, Export Nation 2013.  The report found  
         that between 2003 to 2012 exports drove post-recession growth in the  
         100 largest metro areas including Los Angeles, San Diego, and the  
         Inland Empire.  

         The study is unique in that it collected data by origin of  
         production rather than origin of export movement, as is the case  
         with the U.S. Department of Commerce export data.  Using the Export  
         Nation methodology, total California exports for goods and services  
         in 2012 was $252 billion, as compared to the U.S. Census Bureau's  
         2012 number of $162 billion for goods only, as measured by origin of  


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         In 2012, exports represented 8.8% of California GDP, based on Export  
         Nation data.  The top five California metro areas with the highest  
         concentration of export-related GDP in the report period include:   
         (1) Los Angeles (37.1%); (2) San Francisco (15%); (3) San Jose  
         (13.7%); (4) San Diego (11.5%), and (5) the Inland Empire (9.2%).   
         Chart 1 includes more specific data on selected California exports  
         of goods and services, as expressed in 2012 dollars (adjusted for  
         inflation) and based on the Export Nation methodology.

         |        Chart 1 - Southern California Largest Metro Areas        |
         |    Exports (2007-2012)(in millions, adjusted for inflation)     |
         |Metropolitan  | 2003 Exports | 2012 Exports | Export Share |  Export in   |  Export in   |Annualized    |
         |Statistical   |  (millions)  |  (millions)  |    of GDP    |  Goods 2012  |Services 2012 |2009-2012     |
         |Area          |              |              |              |              |              |Growth in     |
         |              |              |              |              |              |              |Manufacturing |
         |              |              |              |              |              |              |(Post-Recessio|
         |              |              |              |              |              |              |n)            |
         |El Centro, CA |432.7954      |586.8708      |9.3%          |456.5946      |130.2762      |     8.9%     |
         |Metropolitan  |              |              |              |              |              |              |
         |Statistical   |              |              |              |              |              |              |
         |Area          |              |              |              |              |              |              |
         |Los           |62850.51      |93871.65      |12.0%         |56462.39      |37409.26      |     4.0%     |
         |Angeles-Long  |              |              |              |              |              |              |
         |Beach-Santa   |              |              |              |              |              |              |
         |Ana, CA       |              |              |              |              |              |              |
         |Metropolitan  |              |              |              |              |              |              |
         |Statistical   |              |              |              |              |              |              |
         |Area          |              |              |              |              |              |              |
         |Oxnard-Thousan|3997.99       |6462.674      |15.2%         |4822.016      |1640.658      |     3.8%     |
         |d             |              |              |              |              |              |              |
         |Oaks-Ventura, |              |              |              |              |              |              |
         |CA            |              |              |              |              |              |              |
         |Metropolitan  |              |              |              |              |              |              |
         |Statistical   |              |              |              |              |              |              |
         |Area          |              |              |              |              |              |              |
         |Riverside-San |7999.825      |13128.07      |9.2%          |8407.373      |4720.697      |     5.9%     |
         |Bernardino-Ont|              |              |              |              |              |              |


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         |ario, CA      |              |              |              |              |              |              |
         |Metropolitan  |              |              |              |              |              |              |
         |Statistical   |              |              |              |              |              |              |
         |Area          |              |              |              |              |              |              |
         |San           |11996.96      |21613.47      |11.5%         |13702.52      |7910.954      |     7.2%     |
         |Diego-Carlsbad|              |              |              |              |              |              |
         |-San Marcos,  |              |              |              |              |              |              |
         |CA            |              |              |              |              |              |              |
         |Metropolitan  |              |              |              |              |              |              |
         |Statistical   |              |              |              |              |              |              |
         |Area          |              |              |              |              |              |              |
         |San           |15417.44      |38046.75      |12.5%         |23306.12      |14740.64      |    -0.7%     |
         |Francisco-Oakl|              |              |              |              |              |              |
         |and-Fremont,  |              |              |              |              |              |              |
         |CA            |              |              |              |              |              |              |
         |Metropolitan  |              |              |              |              |              |              |
         |Statistical   |              |              |              |              |              |              |
         |Area          |              |              |              |              |              |              |
         |San           |21384.90      |34641.22      |23.8%         |26418.39      |8222.831      |    10.9%     |
         |Jose-Sunnyvale|              |              |              |              |              |              |
         |-Santa Clara, |              |              |              |              |              |              |
         |CA            |              |              |              |              |              |              |
         |Metropolitan  |              |              |              |              |              |              |
         |Statistical   |              |              |              |              |              |              |
         |Area          |              |              |              |              |              |              |
         |  Source:  Export Nation 2013, Global Cities Initiative, a joint |
         |project of Brookings Institute and JP Morgan Chase               |

         According to research by the California Employment Development  
         Department, the state's future economic growth will be strongly  
         correlated to the strength of its trade-related industry sectors  
         including advanced manufacturing, information technology, and  
         professional services.  The high growth potential of these industry  
         sectors is based on their links to external markets, as well as  
         internal markets in the U.S. and California.  
        4)California's Trade Framework  :  In California, the primary state  
         agency responsible for state trade and foreign investment activity  
         (excluding agriculture) is GO-Biz.  Initially established in 2011,  


                                                               SB 511
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         international trade responsibility was transferred from the  
         Business, Transportation, and Housing Agency to GO-Biz in 2012.   
         Among GO-Biz' assets are the Office of the Small Business Advocate,  
         the Permit Assistance Unit, the Office of Foreign Trade and  
         Investment, and the Business Investment Services Unit.  [AB 29 (John  
         A. Pérez), Chapter 475, Statutes of 2011 and AB 2012 (John A.  
         Pérez), Chapter 294, Statutes of 2012]   

         The Governor's Reorganization Plan transferred a number of  
         additional economic development related entities under the purview  
         of GO-Biz in 2012 including the California Travel and Tourism  
         Commission, the I-Bank, the Small Business Loan Guarantee Program,  
                                                                                 and the California Film Commission.  

         The graphic below illustrates the organization of GO-Biz.  Areas of  
         similar services or programs with SB 511 are marked with a *.


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         In 2013, the Innovation Hub Program and the EB-5 investment visa  
         program were codified under the administration of GO-Biz.  There are  
         14 ihubs throughout California, each focusing on specific industry  
         sectors including the Southern California Link that includes  
         Riverside, San Bernardino, and Los Angeles Counties which  
         collaborate on issues related to trade, manufacturing, and  
         logistics. [AB 250 (Holden and V. Manuel Pérez), Chapter 530,  
         Statutes of 2013]

         Also in 2013, a Small Business Finance Center was established within  
         the I-Bank and the small business debt and credit enhancement  
         programs were transferred from within GO-Biz to be managed under the  
         auspices of the new Center.  A range of finance programs are  
         delivered through a statewide network of 11 small business finance  
         development corporations (FDCs) using both state and federal Jobs  
         Act funds. Among other financial products, the FDCs offer loan  
         guarantees and lines of credit that can be used to support export  
         activities.  [AB 1247 (Medina and Bocanegra), Chapter 537, Statutes  
         of 2013]

         In addition, GO-Biz is responsible for preparing the International  
         Trade and Investment Strategy to guide state activities, oversee the  
         use of federal money received through the State Trade and Export  
         Promotion (STEP) Program, work with EB-5 investors and regional  
         centers, provide data and track global business and trade trends,  
         and to collaborate on the activities of California's new China Trade  

         STEP is a three-year pilot trade and export initiative authorized by  
         the federal Small Business Jobs Act of 2010.  The program is  
         regionally administered through a partnership between GO-Biz and the  
         California Community Colleges their network of Centers for  
         International Trade and Development.  The primary purpose of the  
         program is to create jobs by increasing the number of, and the  
         volume of, small businesses exporting.  

         The California Trade and Investment Office in Shanghai is the first  
         trade office opened under the AB 2012 program authority.  The Trade  
         Office is self-funded through private contributions and operates  
         under a cooperative agreement between GO-Biz and the Bay Area  
         Council, a San Francisco-headquartered nonprofit business  
         organization.  Opened in October 2012, the purpose of the Trade  
         Office is to provide Californian companies increased access to  
         Chinese business contacts, Chinese investors with access to  
         California projects, and spur new investment and trade growth  


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         between California and China. 

         SB 511 proposes the establishment of a number of new programs and  
         the undertaking of new activities that are materially similar to  
         existing programs and services.  Overlaps include, but are not  
         limited to:  providing credit enhancements to assist small  
         businesses access capital, marketing promotion activities, and  
         technical assistance.  These similar programs are identified with a  
         * (see chart on previous page).   As an example $2 million was just  
         approved in 2014-15 budget for the Small Business Development  
         Centers to assist small businesses prepare and access capital  
         support including for those businesses interested in export  

        5)California Export Activities  :  If California were a country, it  
         would be the 17th largest exporter and the 14th largest importer in  
         the world.  Merchandise exports from California ($168 billion)  
         accounted for over 10.6% of total U.S. exports in goods, shipping to  
         over 220 foreign destinations in 2013.  California's land, sea, and  
         air ports of entry served as key international commercial gateways  
         for the $538 billion in products entering and exiting the U.S. in  
         2012.  Statewide, 4.4 million California jobs are dependent on  
         foreign trade.  Over 562,700 California workers benefit from jobs  
         with foreign-owned firms, which accounts for 5.1% of all private  
         sector jobs in the state.  

         Mexico has been California's top trading partner since 1999 and in  
         2013, California exported $23.9 billion (14%) in goods.  Chart 2  
         shows export data on the state's top five trade partners.  Other  
         top-ranking export destinations not shown on the chart include Hong  
         Kong, Taiwan, Germany, the Netherlands, and the United Kingdom.

         |  Chart 2 - California Export based on Movement of Goods 2012 and   |
         |                                2013                                |
         |     Rank     |   Country    |  2012 Value  |  2013 Value  | 2012 % Share | 2013 % Share |  % Change,   |
         |              |              |              |              |              |              | 2012 - 2013  |
         |     ---      |Total         |       161,880|       168,128|          10.5|          10.6|           3.9|
         |              |California    |              |              |              |              |              |
         |              |Exports and % |              |              |              |              |              |
         |              |Share of U.S. |              |              |              |              |              |


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         |              |Total         |              |              |              |              |              |
         |     ---      |Total, Top 25 |       143,671|       149,020|          88.8|          88.6|           3.7|
         |              |Countries and |              |              |              |              |              |
         |              |% Share of    |              |              |              |              |              |
         |              |State Total   |              |              |              |              |              |
         |      1       |Mexico        |        26,370|        23,933|          16.3|          14.2|          -9.2|
         |      2       |Canada        |        17,424|        18,819|          10.8|          11.2|           8.0|
         |      3       |China         |        13,970|        16,359|           8.6|           9.7|          17.1|
         |      4       |Japan         |        13,033|        12,711|           8.1|           7.6|          -2.5|
         |      5       |South Korea   |         8,246|         8,394|           5.1|           5.0|           1.8|
         |Source:                                               |
         |                                                                    |
         |                                                                    |

         California's largest industry sector by employment is Trade,  
         Transportation, and Utilities, which encompasses everything from  
         major retail outlets, to import-export businesses, to transportation  
         and warehousing.  California leads the nation in export-related  
         jobs.  The U.S. Department of Commerce estimates that for every one  
         million dollars of increased trade activity, 11 new jobs are  
         supported.  Workers in trade-related jobs earn on average 13% to 28%  
         higher wages than the national average.  

         In today's globally linked economy, manufacturing utilizes products  
         from across the U.S., as well as from other nations.  In 2012, 61%  
         ($1.3 trillion) of the products imported into the U.S. were inputs  
         and components intended for use by American producers.  In addition,  
         U.S. imports often include components or benefited from services  
         provided by U.S. firms, including many California companies.  The  
         Wilson Center estimates that Mexican imports and Canadian imports  
         contain 40% and 20% U.S. components, respectively.

         Trade and foreign investment support new job creation, bring new  
         technologies and skills to California workers, generate local and  
         state revenues, and generally strengthen the state's economic base.   
         In the future, California's economy will become increasingly reliant  


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         on accessing foreign markets where a majority of global economic  
         growth is expected to occur.  

        6)National Export Initiative  :  In January 2010, the President launched  
         the National Export Initiative with the goal of doubling U.S.  
         exports over 5 years ($1.5 trillion to $3.17 trillion).  The  
         initiative is directed through a newly established Export Promotion  
         Cabinet and an internal Trade Promotion Coordinating Committee which  
         has been tasked to coordinate and align their export promotion  
         activities including counseling, customer matchmaking services, and  
         financing for exporters.  Chart 3 shows the U.S.' progress toward  
         meeting the national export goal.  The chart was developed using a  
         GAO analysis based on data from the U.S. Bureau of Economic  
         Analysis.  Priority initiatives include:

          a)   Exports by small and medium-sized businesses
          b)   Federal export assistance
          c)   Increased export credit
          d)   Reduced barriers to trade
          e)   Export promotion of services

         As noted earlier in the analysis, California is currently  
         participating in the federal STEP program.  Over the term of the  
         initiative, California exports have increased from $120 billion in  
         2009 to $169 billion in 2013, representing a 40% increase.

        7)Export Competition:  Domestic and Foreign  :  The California Center at  
         the Milken Institute released a study in 2012 that considered what  
         actions the state should consider in expanding export opportunities  
         for California businesses.  The report's major recommendation called  
         for the state to develop and implement a comprehensive trade  
         strategy that utilizes existing resources, leverages private sector  
         expertise, focuses on key export destinations, and includes a  
         detailed export promotion strategy.  Top barriers to export  
         promotion (cited from a prior BTH study) included regulatory  
         problems, access to capital, difficulty in identifying foreign  
         business partners, lack of internal resources and market knowledge,  
         and the fragmented state of trade services offered by California.

         As shown in Chart 4, the California Center found that California's  
         export growth fell far short of other states.  By comparison, the  
         study noted, states that had aggressively advanced trade promotion  
         strategies were more successful including Florida, Alabama, and  
         Pennsylvania.  These strategies often included partnerships with  
         private industry, overseas trade promotion, and trade assistance to  


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         exporting businesses.  Other examples highlighted in the report  
         included Germany and South Korea who both implemented robust trade  
         strategies which included direct investment in export promotion.   
         Germany also offered loan guarantees to small and medium-sized  
         businesses and South Korea help businesses identify growing markets  
         for goods and then assisting its companies to penetrate those  

 -------------------------------------------  --------------------------------------------  -------------------------------------------          In February 2014, GO-Biz issued the California International Trade  
         and Investment Strategy, which called for expanding the export of  
         California goods and services, and by increasing foreign direct  
         investment into the state.  Based on these guiding policy goals, the  
         California strategy sets forth a comprehensive set of  
         recommendations around six strategic objectives:

          1.   Develop a comprehensive, coordinated and cohesive strategy  
            framework with a clear vision to expand trade and investment,  
            which includes other relevant state agencies, with input from  
            private and public sector stakeholders; 

          2.   Implement more proactive outreach, awareness, education and  
            engagement programs both within the state for California-based  
            companies and through foreign partners and trade office(s); 

          3.   Maximize China Trade Office resources and opportunities to  
            expand exports and investment; 

          4.   Develop an action plan to address key challenges facing our  
            ports and related infrastructure to ensure their competitiveness;  

          5.   Re-engage and strengthen working relationships with the Office  
            of the U.S. Trade Representative and the state's Congressional  
            delegation to advocate California interests related to  
            international trade and investment; and

          6.   Develop and implement a more user-friendly, comprehensive,  
            interactive and useful website to assist California companies  
            wanting to export and to attract foreign investment. 

         SB 511 could assist in the implementation of these strategic  
         objectives and serve as a key facilitator for bringing resources  
         together into a comprehensive network for services for smaller size  
         exporting  businesses.


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        1)Amendments  :  In re-establishing the 2003 California Export Office in  
         a 2014 GO-Biz administrative structure a number of technical issues  
         arise including duplicative programs and services including, but not  
         limited to, the Small Business Finance Center, Small Business Loan  
         Guarantee Program, small business technical assistance, and  
         coordination with federal small business and export related  
         programs.  While duplications exist, given the significant role that  
         trade plays within the California economy, the Committee may wish to  
         consider the following:

          a)   Shifting the California Export Finance Office to a position  
            within the Small Business Finance Center, which is located at the  
          b)   Expanding the Small Business Finance Center's existing  
            authority to include insurance and co-insurance;
          c)   Designating the I-Bank Board to set and adopt directives and  
            requirements for the operations of the California Export Office  
            (removes the need for regulations); and
          d)   Expanding the scope of the Small Business Advisory Committee  
            to include members with export experience.

        2)Related Legislation  :  Below is a list of legislation from the  
         current and prior legislative sessions.

          a)   AB 1067 (Medina) EB-5 Immigration Oversight:  This bill  
            establishes the California Foreign Investment Program within the  
            Governor's Office of Business and Economic Development to oversee  
            the state's participation in the federal EB-5 foreign investment  
            visa program.  Among other things, this office will set the terms  
            and conditions regarding the designation of targeted employment  
            areas, as related to the EB-5 visas.  Status:  Signed by the  
            Governor, Chapter 535, Statutes of 2013.     

          b)   AB 1545 (V. Manuel Pérez) Bi-National Infrastructure and  
            Economic Development Bank:  This bill would have expanded the  
            role of the California Infrastructure and Economic Development  
            Bank to include facilitating infrastructure and economic  
            development financing activities within the California and Mexico  
            border region.  Status:  Held on the Suspense File of the Senate  
            Committee on Appropriations, 2012.

          c)   AB 2012 (John A. Pérez) Economic Development Reorganization:   
            This bill transferred the authority for undertaking international  
            trade and foreign investment activities from the Business,  


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            Transportation and Housing Agency to the Governor's Office of  
            Business and Economic Development.  In addition, the bill  
            transferred the responsibility for establishing an Internet-based  
            permit assistance center from the Secretary of the California  
            Environmental Protection Agency to GO-Biz.  Status:  Signed by  
            the Governor, Chapter 294, Statutes of 2012. 

          d)   AB 2713 (Qurik-Silva) Public Private Partnerships to Promote  
            Trade:  This bill authorizes the Governor's Office of Business  
            and Economic Development to establish public-private partnerships  
            to help guide state activities related to the export of  
            California products and the attraction of employment-producing  
            foreign investment.  The bill requires the establishment of a  
            subaccount to hold private donation for county and  
            industry-specific marketing activities.  The bill also requires  
            the establishment of a partnership to support California trade  
            and investment within South Korea.  Status:  Pending in the  
            Senate Appropriations Committee.

          e)   AB 337 (Allen) Ports and International Trade Strategy:   This  
            bill requires the Governor's Office of Business and Economic  
            Development (GO-Biz) to evaluate key issues affecting trade and  
            foreign investment as part of the development of the previously  
            mandated international trade and investment strategy.  In  
            undertaking this evaluation, GO-Biz is directed, to the greatest  
            extent possible, to use existing reports and other resources.   
            The evaluation required by this measure applies to the second  
            update of the strategy, which should occur no later than February  
            1, 2019.  Status:  Pending in the Senate Appropriations  

          f)   SB 460 (Price) International Trade Marketing and Promotion:   
            This bill would have required the Secretary of the Business,  
            Transportation and Housing Agency to convene a statewide business  
            partnership for international trade marketing and promotion.   
            Status:  Held on the Suspense File of the Assembly Committee on  
            Appropriations, 2011.

          g)   SB 592 (Lieu) Trade Promotion of California Ports:  This bill  
            would have required the Governor's Office of Business and  
            Economic Development to provide a port trade promotion strategy  
            to the Legislature and convene a statewide business partnership  
            for port trade promotion.  Status:  Held on the Suspense File of  
            the Assembly Committee on Appropriations, 2013.


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        California Association of Port Authorities 
       California Small Business Association 
       California State Controller 
       California Trucking Association 
       CleanTECH San Diego 
       Greater Los Angeles African American Chamber of Commerce 
       Harbor Association of Industry & Commerce 
       Jobs 1st Alliance 
       Los Angeles County Economic Corporation 
       National Association of Women Business Owners 
       Port of San Diego 
       Redondo Beach Chamber of Commerce 
       Regional Economic Association Leader of California 
       San Diego & Imperial District Export Council 
       San Diego North Economic Development Council 
       San Diego Regional Chamber of Commerce 
       Southern California Association of Governments 
       Southern California Leadership Council 
       Southern California Leadership Council 
       The California Contract Cities Association 
       The California Export Finance Office 
       The California Taxpayers Association 
       The Greater Los Angeles African American Chamber of Commerce 
       The Inland Empire Economic Partnership 
       The Los Angeles Area Chamber of Commerce 
       The Los Angeles Customs Brokers and Freight Forwarders Association,  
       The North San Diego Business Chamber 
       The Port of Los Angeles 
       The San Diego East County Economic Development Council 
       The San Diego Imperial District Export Council 
       The Southern California Association of Governments 
       The Valley Economic Development Center
       None received 

        Analysis Prepared by  :    Toni Symonds / J., E.D. & E. / (916) 319-2090  


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