Amended in Assembly March 26, 2015

California Legislature—2015–16 Regular Session

Assembly Bill No. 484

Introduced by Assembly Member Gipson

February 23, 2015

begin delete An act to amend Section 281 of the Harbors and Navigation Code, relating to navigation. end delete begin insert An act to amend Sections 63088.5 and 63089.5 of, to add Chapter 2.6 (commencing with Section 13996.85) to Part 4.7 of Division 3 of Title 2 of, to add Article 8.5 (commencing with Section 63089.85) to Chapter 6 of Division 1 of Title 6.7 of, 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. end insert

LEGISLATIVE COUNSEL’S DIGEST

AB 484, as amended, Gipson. begin delete Navigation rules: meeting vessels. end delete begin insert Trade promotion of California ports: California Export Finance Office. end insert

begin insert

(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, 2019, a strategy for international trade and investment that, at a minimum, includes specified information, goals, objectives, and actions related to the promotion of trade.

end insert begin insert

The bill would require the director to convene, no later than February 1, 2016, 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.

end insert begin insert

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

The bill would establish the California Export Finance Office (office) within the California Small Business Finance Center, 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 coordinate state export activities with international, federal, and other state entities and disseminate information to California exporters.

end insert begin insert

The bill would also establish within the office an 11-member California Export Finance Advisory Board (export advisory 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 export advisory board, among other duties, to advise on specified export-related programs and issue an annual report.

end insert begin insert

The bill would require the office to comply with existing laws relating to open and public meetings and access to public records.

end insert begin delete

Existing law requires that, whenever any vessel, whether a steam vessel or sailing vessel, proceeding in one direction, meets another vessel, whether a steam vessel or sailing vessel, proceeding in the opposite direction, so that if both were to continue their respective courses they would pass so near as to involve the risk of a collision, each vessel give right rudder, so as to pass on the port side of each other.

end delete begin delete

This bill would make a nonsubstantive change in those provisions.

end delete

Vote:  begin delete majority end delete begin insert ²⁄₃ end insert . Appropriation:  begin delete no end delete begin insert yes end insert . Fiscal committee:  begin delete no end delete begin insert yes end insert . State-mandated local program: no.

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

begin insert

begin insert SECTION 1. end insert   

end insert begin insert

The Legislature finds and declares all of the
following:

end insert begin insert

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

end insert begin insert

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

end insert begin insert

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

end insert begin insert

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

end insert begin insert

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

end insert begin insert

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

end insert begin insert

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

end insert

begin insert

begin insert SEC. 2. end insert   

end insert

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

begin insert

 

Chapter   begin insert 2.6. end insert Trade Promotion of California Ports

 

begin insert 13996.85. end insert   

The Director of the Governor’s Office of Business
and Economic Development shall convene, no later than February
1, 2016, a statewide business partnership for promotion of trade
for California ports and to explore greater utilization of California
ports, as follows:

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

(b) The business partnership shall advise the Director of the
Governor’s Office of Business and Economic Development 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.

end insert

begin insert

begin insert SEC. 3. end insert   

end insert

begin insert Section 63088.5 of the end insert begin insert Government Code end insert begin insert is amended
to read: end insert

63088.5.  

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

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

(1) Loan guarantees and other credit enhancements.

(2) Direct loans and other debt instruments.

(3) Disaster loan guarantees.

(4) Surety bond guarantees.

begin insert

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

end insert

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

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

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

begin insert

begin insert SEC. 4. end insert   

end insert

begin insert Section 63089.5 of the end insert begin insert Government Code end insert begin insert , as added
by Section 4 of Chapter 537 of the Statutes of 2013, is amended
to read: end insert

63089.5.  

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

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

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

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

(3) To pay administrative costs of corporations.

(4) To pay state support and administrative costs.

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

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

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

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

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

begin insert

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

end insert begin delete

(f)

end delete

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

begin insert

begin insert SEC. 5. end insert   

end insert

begin insert Section 63089.5 of the end insert begin insert Government Code end insert begin insert , as amended
by Section 8 of Chapter 132 of the Statutes of 2014, is amended
to read: end insert

63089.5.  

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

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

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

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

(3) To pay administrative costs of corporations.

(4) To pay state support and administrative costs.

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

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

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

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

begin insert

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

end insert begin delete

(f)

end delete

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

begin insert

begin insert SEC. 6. end insert   

end insert

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

begin insert

 

Article begin insert 8.5. end insert   Insurance, Coinsurance, and Other Forms of Surety

 

begin insert 63089.85. end insert   

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

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

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

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

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

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

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

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

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

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

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

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

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

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

begin insert 63089.86. end insert   

The bank may do any of the following:

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

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

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

end insert

begin insert

begin insert SEC. 7. end insert   

end insert

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

begin insert

 

Chapter   begin insert 7. end insert California Export Finance

 

begin insert 63090. end insert   

As used in this chapter:

(a) “California Export Finance Advisory Board” or “export
advisory board” means the California Export Finance Advisory
Board established by Section 63090.7.

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

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

begin insert 63090.1. end insert   

(a) The California Export Finance Office is hereby
created within the California Small Business Finance Center,
within the bank.

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

begin insert 63090.2. end insert   

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

begin insert 63090.3. end insert   

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

(a) Contract for services.

(b) Hold public hearings.

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

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

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

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

(g) Provide or facilitate the provision of export finance training
for staff and other individuals involved in export finance assistance,
including, but not limited to, training sessions provided by the
federal government and other public and private organizations.

begin insert 63090.4. end insert   

The office may do all of the following:

(a) Coordinate state export activities with international, federal,
and other state entities that provide programs or services that are
designed to provide export assistance and export-related financing.

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

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

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

(e) Provide small-size and medium-size businesses, including
individual firms and agricultural enterprises, with information
and technical assistance relating to exporting and export financing.

begin insert 63090.5. end insert   

The office shall comply with the Bagley-Keene Open
Meeting Act (Article 9 (commencing with Section 11120) of
Chapter 1 of Part 1 of Division 3 of Title 2) and the California
Public Records Act (Chapter 3.5 (commencing with Section 6250)
of Division 7 of Title 1).

begin insert 63090.7. end insert   

(a) The California Export Finance Advisory Board
is established within the bank. The export advisory board shall
consist of 11 members as follows:

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

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

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

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

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

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

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

(c) Export advisory board members who are not employees of
the state shall receive the per diem authorized in Section 11564.5
for each day they attend export advisory board or export advisory
board subcommittee meetings. In addition, these members shall
be reimbursed for their expenses in accordance with the rules of
the Department of Personnel Administration when attending export
advisory board and export advisory board subcommittee meetings
and conducting export advisory board business as determined by
the export advisory board.

begin insert 63090.8. end insert   

The export advisory board shall do all of the
following:

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

(b) Advise on the export-related programs authorized by Chapter
6 (commencing with Section 63088) and this chapter.

(c) Adopt bylaws as are necessary to govern the conduct and
operation of the export advisory board.

(d) Provide for the appointment of advisory subgroups necessary
to inform and deliberate on issues of significance to the export
advisory board.

(e) Hold regularly scheduled meetings, at least quarterly, in
order to carry out the objectives and responsibilities of the export
advisory board.

(f) Issue an annual report critiquing California’s export-related
programs, services, and other activities, and recommended
changes. The report shall include an evaluation of how these
activities impact all of the following:

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

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

(3) Export volume of California firms.

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

end insert

begin delete

SECTION 1.  

Section 281 of the Harbors and Navigation Code
is amended to read:

281.  

Whenever any vessel, whether a steam vessel or sailing
vessel, proceeding in one direction, meets another vessel, whether
a steam vessel or sailing vessel, proceeding in the opposite
direction, so that if both were to continue their respective courses
they would pass so near as to involve the risk of a collision, each
vessel shall give right rudder, so as to pass on the port side of each
other. This rule applies to all steam vessels and all sailing vessels
whether on the port or starboard tack, and whether close-hauled
or not, except where the circumstances of the case are such as to
render a departure from the rule necessary in order to avoid
immediate danger. It is subject to a due regard to the dangers of
navigation, and, as regards sailing vessels on the starboard tack
close-hauled, it is subject also to the keeping of such sailing vessels
under command.

end delete