BILL ANALYSIS                                                                                                                                                                                                    Ó



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          ASSEMBLY THIRD READING


          AJR  
          14 (Chu)


          As Introduced  May 7, 2015


          Majority vote


           ------------------------------------------------------------------- 
          |Committee       |Votes |Ayes                |Noes                  |
          |                |      |                    |                      |
          |                |      |                    |                      |
          |----------------+------+--------------------+----------------------|
          |Jobs            |8-0   |Eduardo Garcia,     |                      |
          |                |      |Kim, Brown, Chau,   |                      |
          |                |      |Chu, Gipson, Irwin, |                      |
          |                |      |Mathis              |                      |
          |                |      |                    |                      |
          |                |      |                    |                      |
           ------------------------------------------------------------------- 


          SUMMARY:  Memorializes the Legislature's desire for the United  
          States (U.S.) Congress to support legislation reauthorizing the  
          Export-Import Bank of the United States (Ex-Im Bank).   
          Specifically, this resolution:   


          1)Makes findings and declarations that, among other things, state:


             a)   The Ex-Im Bank is the official export credit agency of the  
               U.S. and exists for the purposes of financing and insuring  
               foreign purchases of U.S. goods for customers unable or  








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               unwilling to accept the credit risk;  


             b)   The Ex-Im Bank has supported more than $400 billion in  
               U.S. exports in the past 70 years and helps to cover critical  
               trade finance gaps by providing loan guarantees, export  
               credit insurance, and direct loans for U.S. exports in  
               developing markets where commercial bank financing is  
               unavailable or insufficient.  For federal fiscal year (FFY)  
               2014, the Ex-Im Bank provided $20.5 billion in loan  
               guarantees which leveraged $27.5 billion in exports while  
               supporting 164,000 U.S. jobs; 


             c)   The Ex-Im Bank is a self-sustaining agency, which operates  
               at no cost to the taxpayer and over the last three fiscal  
               years has generated more than $3 billion in fees from its  
               foreign customers which were deposited in the U.S. Treasury  
               to reduce the U.S. deficit and indebtedness;


             d)   Over the past five years, the Ex-Im Bank has assisted more  
               than 967 California companies to export their products.   
               Nearly 200 of those companies are owned by women or  
               minorities and over 700 are small businesses.  These  
               companies export their products and services around the globe  
               totaling more than $21 billion in sales.  Fifty-two of the 53  
               congressional districts in California had companies benefit  
               from the Ex-Im Bank loans; and


             e)   Legislation is pending before the 114th U.S. Congress that  
               would continue the Ex-Im Bank's capacity for creating jobs  
               while also making its practices more accountable and  
               transparent, as well as making the bank more solvent and  
               self-sufficient.


          2)Resolves that the California Legislature desires the U.S.  








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            Congress to support the reauthorizing of the Ex-Im Bank.   


          FISCAL EFFECT:  None


          COMMENTS:  The Ex-Im Bank is operating on a short-term extension  
          of its charter, which expires on June 30, 2015.  The Ex-Im Bank's  
          mission is to assist U.S. companies in exporting goods and  
          services to international markets.  California benefits through  
          jobs, tax dollars, and related development associated with being a  
          strategic business location within the global economy.


          Ex-Im Bank has shown over its 80 years of operations to be an  
          important tool for U.S. companies interested in doing business in  
          other countries.  The Ex-Im Bank does not compete with private  
          sector lenders but provides export financing products that fill  
          gaps in trade financing.  It assumes credit and country risks that  
          the private sector is unable or unwilling to accept.  It also  
          helps to level the playing field for U.S. exporters by matching  
          the financing that other governments provide to their exporting  
          businesses.


          Although the Ex-Im Bank's charter has been extended numerous  
          times, in the last several years its actions have come under  
          criticism by conservative groups relative to the appropriateness  
          of its role in aiding private businesses in their export  
          activities.  Supporters of the Ex-Im Bank, including the U.S.  
          Chamber of Commerce, strongly advocate for its reauthorization  
          because its ability to meet unmet business transaction needs,  
          which serves to level the playing field for U.S. firms exporting  
          into markets where their foreign competitors receive similar  
          government supported assistance.  This resolution seeks state  
          legislative support for federal advocacy to support the  
          reauthorization of the Ex-Im Bank.  With California businesses  
          being one of the largest users of Ex-Im Bank programs,  
          California's opinion on reauthorization has particular merit in  








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          the national debate.   


          In deliberating the appropriateness of this resolution, Members  
          may wish to consider the importance of trade within the California  
          economy, the continuing need for programs to assist businesses in  
          accessing capital and new markets, and the demonstrated ability of  
          the federal government to operate the Ex-Im Bank without ongoing  
          costs to the public.   


          Background on Ex-Im Bank:  The Ex-Im Bank is a wholly owned U.S.  
          government corporation, which was established by the U.S. Congress  
          to provide market-oriented public services and to produce revenues  
          to meet its expenditures.  The Ex-Im Bank provides a variety of  
          financial and insurance products that are designed to fill gaps in  
          private export financing.  Its charter was last extended through a  
          FFY 2015 continuing resolution which expires June 30, 2015.  The  
          Ex-Im Bank operates at no cost to American taxpayers and over the  
          past two decades the Bank has generated nearly $7 billion more  
          than the cost of its operations.


          In the FFY 2014, the Ex-Im Bank approved $20.5 billion in  
          financial authorizations, which supported an estimated $27.5  
          billion in export sales and approximately 164,000 U.S. jobs.  Of  
          the total transactions in 2014, approximately 89% (3,347) were  
          with small business for a total of $5.9 billion.  




          Between 2012 and 2015, $7 billion in financial authorizations went  
          to 704 California exporters, which supported $14 billion in  
          exports.  Of those exporters, 533 were small businesses, 90 were  
          minority-owned businesses, 63 were women-owned businesses, 10 were  
          businesses in renewable energy, and 34 were environmentally  
          beneficial.  









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          Analysis Prepared by:                          Toni Symonds / J.,  
          E.D., & E. / (916) 319-2090                            FN: 0000510