BILL NUMBER: AB 2437 ENROLLED
BILL TEXT
PASSED THE SENATE AUGUST 24, 2010
PASSED THE ASSEMBLY AUGUST 31, 2010
AMENDED IN SENATE AUGUST 20, 2010
AMENDED IN SENATE AUGUST 2, 2010
AMENDED IN ASSEMBLY MAY 28, 2010
AMENDED IN ASSEMBLY APRIL 28, 2010
AMENDED IN ASSEMBLY APRIL 5, 2010
INTRODUCED BY Assembly Member V. Manuel Perez
FEBRUARY 19, 2010
An act to amend Sections 91502, 91503, 91504, and 91558 of, and to
add Article 6 (commencing with Section 91600) to Chapter 1 of Title
10 of, the Government Code, relating to economic development.
LEGISLATIVE COUNSEL'S DIGEST
AB 2437, V. Manuel Perez. State government: economic development.
The California Industrial Development Financing Act authorizes
cities, counties, cities and counties, and redevelopment agencies to
establish industrial development authorities that are authorized to
issue industrial development bonds, the proceeds of which may be used
to fund capital projects of private enterprise under terms and
conditions specified in the act. That act establishes the California
Industrial Development Financing Advisory Commission and grants it
various powers relating to industrial development bonds.
This bill, the California Manufacturing Competitiveness Act of
2010, would authorize the commission to establish the California
Manufacturing Competitiveness Loan and Loan Guarantee Program for the
purpose of attracting, retaining, and expanding manufacturing
facilities, and would require the commission to establish guidelines
for the implementation and oversight of the program, as specified.
The bill would require the commission to provide for the development
and administration of the program application and evaluation process,
and would require that applicants to the program demonstrate that
they meet specified requirements. The bill would also require each
applicant to pay a nonrefundable application fee that covers a
specified amount. The bill would specify that only companies with at
least 200 employees are eligible to receive assistance under the
program.
The bill would also create the Manufacturing Program Account
within the Industrial Development Fund. The bill would prohibit
General Fund moneys from being deposited in the account. The bill
would prohibit the commission from commencing the program prior to
its adoption of a resolution finding that there is sufficient money
in the account to cover the costs of implementing the program. The
bill would allow moneys in the account to be allocated to a lending
institution or financial company that will act as trustee of the
funds, with the approval of the Department of Finance. The bill would
further require the above-described application fees to be deposited
in the account to ensure that funds are available to the state for
the sole purpose of administration of the program.
The bill would require the commission, beginning October 1, 2012,
and annually thereafter, to post on its Internet Web site and provide
the Legislature with a report on the program's activities and impact
on the manufacturing industry, and on the state's economy generally.
The bill would provide that the above-described provisions shall
be implemented only to the extent that sufficient moneys are
available to the commission to implement the California Manufacturing
Competitiveness Loan and Loan Guarantee Program. The bill would
provide that its provisions only remain in effect until January 1,
2016, and as of that date are repealed.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 91502 of the Government Code is amended to
read:
91502. (a) It is the purpose of this title to carry out and make
effective the findings of the Legislature, and to that end, to
provide business with alternative methods of financing in acquiring,
constructing, or rehabilitating facilities, including, but not
limited to, equipment and furnishings, in accordance with the
criteria set forth in Section 91502.1, all to the mutual benefit of
the people of the state and to protect their health, welfare, and
safety.
(b) The Legislature further declares that it is the policy of
this state, consistent with environmental, resource conservation, job
creation and retention, economic development, and other policies,
to, on behalf of private enterprise, facilitate the acquisition of
property, either suitable for or evidencing an obligation respecting
one or more of the activities or uses set forth in Section 91503, and
access to working capital through the issuance of loans, loan
guarantees, and lines of credit by the commission, or on behalf of
the commission by a participating financial institution, or directly
by a participating financial institution for purposes of the
commission's loan, loan guarantee, or line of credit program, in
accordance with the criteria set forth in Article 6 (commencing with
Section 91600), and that this additional method of financing, when
made available in accordance with that policy, serves a public
purpose and will promote the prosperity, health, safety, and welfare
of the citizens of the state.
SEC. 2. Section 91503 of the Government Code is amended to read:
91503. The property acquired pursuant to this article shall be
suitable for, or shall evidence an obligation respecting, certain
activities or uses. The activities or uses shall include one or more
of the activities or uses described in subdivision (a) and, unless
incidental to those activities or uses, shall not include any of the
activities described in, and not excepted from, subdivision (b).
(a) (1) Industrial uses including, without limitation, assembling,
fabricating, manufacturing, processing, or warehousing activities
with respect to any products of agriculture, forestry, mining, or
manufacture, if these activities have demonstrated job creation or
retention potential.
(2) Energy development, production, collection, or conversion from
one form of energy to another.
(3) Research and development activities relating to commerce or
industry, including, without limitation, professional,
administrative, and scientific office and laboratory activities or
uses.
(4) Commercial uses located within an enterprise zone designated
pursuant to Chapter 12.8 (commencing with Section 7070) of Division 7
of Title 1, commercial activities within an empowerment zone and
enterprise community designated pursuant to Section 1391 of the
Internal Revenue Code of 1986, in effect on January 1, 1998,
commercial uses located within a recovery zone designated pursuant to
Section 1401 of the American Recovery and Reinvestment Act of 2009
(Public Law 111-5), or any amendments thereto, or other commercial
needs.
(5) Processing or manufacturing recycled or reused products and
materials by manufacturing facilities.
(6) Business activities with the purpose of creating or producing
intangible property.
(7) Business activities incidental to, or with the purpose of,
supporting the activities or uses specified in paragraphs (1) to (6),
inclusive.
(b) (1) Residential real property for family unit or other housing
activities.
(2) Airport, dock, wharf, or mass commuting activities, or storage
or training activities related to any of those activities, unless
the property acquired is suitable for one or more of the activities
described in paragraph (4) of subdivision (a).
(3) Sewage or solid waste disposal activities or electric energy
or gas furnishing activities, unless the property acquired is
suitable for one or more of the activities described in paragraph (2)
or (4) of subdivision (a).
(4) Water furnishing activities, unless the property acquired is
suitable for one or more of the activities described in paragraph (4)
of subdivision (a).
(5) Any activities of persons qualifying as exempt persons under
Section 501 of the Internal Revenue Code of 1986, as amended,
undertaken by those persons, other than activities constituting an
unrelated trade or business as described in Section 513 of that code.
SEC. 3. Section 91504 of the Government Code is amended to read:
91504. Unless the context otherwise requires, the definitions in
this article shall govern the construction of this title, as follows:
(a) "Acquire" and its variants means acquire, construct, improve,
furnish, equip, repair, reconstruct, or rehabilitate.
(b) "Administration expenses" means the reasonable and necessary
expenses incurred by an authority in the administration of this
title, including, without limitation, fees and costs of paying
agents, trustees, attorneys, consultants, and others.
(c) "Authority" means any industrial development authority
established pursuant to this title.
(d) "Board" means the board of directors of an authority.
(e) "Bonds" means the revenue obligations, inclusive of principal
(premium, if any) and interest authorized to be issued by any
authority pursuant to this title, including a single bond, a
promissory note or notes, including bond anticipation notes, or other
instruments evidencing an indebtedness or obligation.
(f) "Bond proceeds" means all amounts received by an authority
upon sale or other disposition of any bonds.
(g) "Commission" means the California Industrial Development
Financing Advisory Commission established pursuant to Article 3
(commencing with Section 91550).
(h) "Company" means a person, partnership, corporation, whether
for profit or not, limited liability company, trust, or other private
enterprise of whatever legal form, for which a project is undertaken
or proposed to be undertaken pursuant to this title or which is in
possession of property owned by an authority, and may include more
than a single enterprise.
(i) "Cost" as applied to any project, may embrace:
(1) The cost of construction, improvement, repair, rehabilitation,
and reconstruction.
(2) The cost of acquisition, including rights in land and other
property, both real and personal and improved and unimproved, and
franchises, and disposal rights.
(3) The cost of demolishing, removing, or relocating any building
or structures on lands so acquired, including the cost of acquiring
any lands to which the buildings or structures may be moved or
relocated.
(4) The cost of machinery, equipment, and furnishings, of
engineering and architectural surveys, plans, and specifications, and
of transportation and storage until the facility is operational.
(5) The cost of agents or consultants, including, without
limitation, legal, financial, engineering, accounting, and auditing,
necessary or incident to a project and of the determination as to the
feasibility or practicability of undertaking the project.
(6) The cost of issuance of any bonds and of financing, interest
prior to, during, and for a reasonable period after completion of a
project, and reserves for principal and interest and for extensions,
enlargements, additions, repairs, replacements, renovations,
rehabilitations, and improvements.
(7) The cost of acquiring or refinancing existing obligations
incident to the undertaking and carrying out, including the
financing, of a project, and the reimbursement to any governmental
entity or agency, or any company, of expenditures made by or on
behalf of the entity, agency, or company that are costs of the
project hereunder, without regard to whether or not the expenditures
may have been made before or after the adoption of a resolution of
intention with respect to that project by an authority.
(8) The cost of making relocation assistance payments as provided
by Chapter 16 (commencing with Section 7260) of Division 7 of Title
1.
(9) In the case only of taxable bonds, loans, loan guarantees, or
lines of credit, the cost of refunding or refinancing any outstanding
debt or obligations with respect to any facilities, or the cost of
any other working capital.
(10) Except as provided in paragraph (9), "cost" does not
otherwise include working capital.
(j) "Facilities" mean property suitable for any one or more of the
activities or uses described in Section 91503 and includes
incidental facilities.
(k) "Governing body" means the board of supervisors, city council,
or board of directors of a redevelopment agency, as the case may be.
( l ) "Indenture" means any mortgage, deed of trust,
trust indenture, security agreement, or other instrument relating to
establishing a lien or security interest in, or on, property, any
pledge or other instrument relating to the possession of property,
and any assignment or other instrument relating to establishing any
right, title, or interest in, or related to, property, including the
revenues therefrom, given by an authority to a corporate trustee,
which may be any trust company or bank having the powers of a trust
company within or without the state, or bondholder or agent, for the
security of its bonds and the benefit of the bondholders.
(m) (1) "Participating financial institution" means a financial
institution approved by the commission to do either of the following:
(A) Make a loan, provide a loan guarantee, or extend a line of
credit on behalf of the commission to a company pursuant to this
article.
(B) Participate in the commission's loan, loan guarantee, or line
of credit program by directly providing all or part of a loan or line
of credit to a company or accepting a loan guarantee in support of a
loan or line of credit issued to a company pursuant to the
commission's program.
(2) An approved financial institution shall be any of the
following: (A) a federal- or state-chartered bank, savings
association, credit union, nonprofit community development financial
institution certified under Part 1805 (commencing with Section
1805.100) of Charter XVIII of Title 12 of the Code of Federal
Regulations; (B) a lending institution that has executed a
participation agreement with the Small Business Administration under
the guaranteed loan program pursuant to Part 120 (commencing with
Section 120.1) of Chapter 1 of Title 13 of the Code of Federal
Regulations and that meets the requirements of Section 120.410 of
Chapter I of Title 13 of the Code of Federal Regulations, or a small
business investment company licensed by the Small Business
Administration pursuant to Part 107 (commencing with Section 107.20)
of Chapter I of Title 13 of the Code of Federal Regulations; (C) a
small business financial development corporation as specified in the
Small Business Financial Development Corporation Act (Chapter 1
(commencing with Section 14000) of Part 5 of Division 3 of the
Corporations Code); (D) or a consortium of these entities.
(n) "Proceedings" means the actions taken by an authority in
undertaking, carrying out, and completing a project, including,
without limitation, the project agreements, indenture, bonds, and
resolutions.
(o) "Project" means the acquisition, construction, improvement,
repair, rehabilitation, and reconstruction of facilities and the
acquisition and rehabilitation of machinery, equipment, and
furnishings, and the acquisition of engineering and architectural
surveys, plans, and specifications, and all other necessary and
related capital expenditures by the issuance of bonds, loans, loan
guarantees, or lines of credit upon the application of and to be
repaid by payments from a company for the purposes of this title. For
purposes of the loan, loan guarantee, and line of credit program, a
project may also consist of working capital expenditures.
(p) "Project agreements" means the agreements between an authority
and a company respecting a project, and may include, without
limitation, leases, subleases, options, and installment or other
contracts of purchase or sale, loan, loan guarantee, line of credit,
or guaranty agreements, notes, mortgages, deeds of trust, and
security agreements.
(q) "Property" means any land, air rights, water rights, disposal
rights, improvements, buildings or other structures, and any personal
property, tangible or intangible, and includes, but is not limited
to, machinery and equipment, whether or not in existence or under
construction, and interests in any of the foregoing, or promissory
notes or other obligations of any kind respecting such interests.
(r) "Public agency" means any county, city and county, city, or
redevelopment agency.
(s) "Revenues" means all rents, purchase payments, interest and
principal payments, and other income derived by an authority from, or
with respect to, the sale, lease, or other voluntary or involuntary
disposition of, or repayment of loans, loan guarantees, or lines of
credit with respect to, property, working capital, bond proceeds, and
any receipts derived from the deposit or investment of any such
income or proceeds in any fund or account of an authority, but does
not include receipts designated to cover administration expenses.
(t) "Tax-exempt" means, with respect to any bonds, that the
interest on the bonds is excluded from gross income of the holders
thereof for federal income tax purposes.
(u) "Taxable" means, with respect to any bonds, that the bonds are
not tax-exempt.
SEC. 4. Section 91558 of the Government Code is amended to read:
91558. (a) The commission may, upon request of two or more
authorities, in order to share expenses and facilitate bond issuance,
act as a pooling agent to issue bonds on a joint or composite basis
for companies which have applied for financing to the participating
authorities. Authorities shall enter into written agreements with the
commission specifying the projects which are to be delegated to the
commission for financing pursuant to this section.
(b) Prior to issuance of any bonds pursuant to this section, the
authority and public agency shall have completed the procedures
required by Section 91530.
(c) The commission may issue bonds as requested and authorized by
this section. For these purposes, the commission is granted all of
the powers of an authority and may enter into project agreements and
take all steps toward the sale, issuance, and security of bonds in
the same manner as authorities may do. The resolution required by
Section 91537 shall be adopted by the commission rather than by an
authority.
(d) The commission may make loans or lines of credit available to
companies, directly or through a contract with a participating
financial institution, for the purpose of acquiring, constructing, or
rehabilitating facilities or portions thereof, including, but not
limited to, equipment and furnishings, pursuant to Article 6
(commencing with Section 91600), all to the mutual benefit of the
people of the state and to protect their health, welfare, and safety.
(e) The commission may establish credit requirements, interest
rates, and other requirements for companies and participating
financial institutions and the nature of the information required for
the making of loans, loan guarantees, or lines of credit pursuant to
subdivision (d) of Section 91558.
SEC. 5. Article 6 (commencing with Section 91600) is added to
Chapter 1 of Title 10 of the Government Code, to read:
Article 6. California Manufacturing Competitiveness Act of
2010
91600. This act may be cited as the California Manufacturing
Competitiveness Act of 2010.
91601. (a) The Legislature finds and declares all of the
following:
(1) California is one of the largest and most diverse economies in
the world, with a state gross domestic product (GDP) of over $1.8
trillion in 2008. Based on figures from the International Monetary
Fund, if California were an independent nation it would rank as the
eighth largest economy in the world.
(2) Historically, the state's significance in the global
marketplace resulted from a variety of factors, including: its
strategic west coast location that provides direct access to the
growing markets in Asia; its economically diverse regional economies;
its large, ethnically diverse population, representing both a ready
workforce and significant consumer base; its access to a wide variety
of venture and other private capital; its broad base of small- and
medium-sized businesses that support the global manufacturing supply
chain; and its culture of innovation and entrepreneurship,
particularly in the area of high technology.
(3) Historically, economic growth in California has outpaced the
economic growth rate of the nation as a whole, and the state has led
the nation in export-related jobs, business startups, and innovation.
However, since the subprime home mortgage crisis in 2007, California
communities have struggled. With the increasing rates of home
foreclosure and the tightening of the credit markets, many businesses
have found their existing lines of credit unaccessible. Significant
drops in consumer spending have led to workforce reductions and
business bankruptcies.
(4) For much of 2009, the number of unemployed workers rose by
40,000 to 60,000 per month, and the year ended with 2.25 million
unemployed California workers. While California may have emerged from
the recession in the final quarter of 2009, unemployment is expected
to remain high throughout 2010 and 2011. Without specific
intervention to support job creation and business expansion, many
regions of California will be very slow to recover.
(5) Further, as California moves forward from this recession, it
is important that the state support the recovery of industries that
provide quality jobs, including manufacturing industries. A robust
manufacturing sector offers many benefits to the state, including
high-wage jobs, a basis for international trade, and one of the
highest multiplier effects on other industries and businesses. It has
been estimated that for every job created in manufacturing, two and
a half jobs are supported in other industry sectors. For instance, in
the electronic computer manufacturing industry, the multiplier
effect is 16 to one.
(6) Manufacturing employers and other large employers in
California, however, face many challenges in maintaining global and
domestic competitiveness, including maintaining a skilled workforce
and cost-effective productivity in the face of lower safety and wage
standards in emerging foreign markets.
(b) It is therefore the intent of the Legislature to strengthen
the manufacturing capacity of California through the implementation
of the California Manufacturing Competitiveness Act of 2010. The act
will provide the framework and focus to retool and expand California'
s manufacturing facilities, support a vibrant logistics network, and
retain and create more quality jobs.
91602. Unless the context requires otherwise, for the purposes of
this article, the following terms shall have the following meanings:
(a) "Administration expenses" means the reasonable and necessary
expenses incurred by a commission in the administration of this
title, including, without limitation, the fees and costs of paying
agents, trustees, attorneys, consultants, and others.
(b) "Applicant" means a company or a participating financial
institution on behalf of a company that applies to the commission for
a loan, a loan guarantee, or a line of credit to finance a project
undertaken or proposed to be undertaken pursuant to this title and
may be comprised of more than a single entity.
(c) "Commission" means the California Industrial Development
Financing Advisory Commission established pursuant to Article 3
(commencing with Section 91550).
(d) "Company" means a person, partnership, corporation, whether
for profit or not, limited liability company, trust, or other private
enterprise of whatever legal form, for which a project is undertaken
or proposed to be undertaken pursuant to this title or which is in
possession of property owned by an authority, and may include more
than a single enterprise.
(e) "Cost" as applied to any project, may include all of the
following:
(1) The cost of construction, improvement, repair, rehabilitation,
and reconstruction.
(2) The cost of acquisition, including rights in land and other
property, both real and personal and improved and unimproved, and
franchises, and disposal rights.
(3) The cost of demolishing, removing, or relocating any building
or structures on lands so acquired, including the cost of acquiring
any lands to which the buildings or structures may be moved or
relocated.
(4) The cost of machinery, equipment, and furnishings, of
engineering and architectural surveys, plans, and specifications, and
of transportation and storage until the facility is operational.
(5) The cost of agents or consultants, including, without
limitation, legal, financial, engineering, accounting, and auditing
costs, necessary or incident to a project and the determination as to
the feasibility or practicability of undertaking the project.
(6) The cost of acquiring or refinancing existing obligations
incident to the undertaking and carrying out, including the
financing, of a project, and the reimbursement to any governmental
entity or agency, or any company, of expenditures made by or on
behalf of the entity, agency, or company that are costs of the
project hereunder, without regard to whether or not the expenditures
may have been made before or after the adoption of a resolution of
intention with respect to that project by an authority.
(7) The cost of making relocation assistance payments as provided
by Chapter 16 (commencing with Section 7260) of Division 7 of Title
1.
(8) The cost of procuring raw materials and finished goods that
become integral to the property as a result of construction,
improvement, repair, rehabilitation, or reconstruction.
(9) In the case of taxable bonds, loans, loan guarantees, or lines
of credit, the cost of refunding or refinancing any outstanding debt
or obligations with respect to any facilities, or the cost of
working capital.
(f) "Fund" means the Manufacturing Program Account Fund.
(g) "Governing body" means the board of supervisors, city council,
or board of directors of a redevelopment agency, as the case may be.
(h) "Loan" means a loan, a portion of a loan, a loan guarantee, or
a line of credit or portion of a line of credit made or extended by
the commission, or by a participating financial institution on behalf
of the commission, or by a participating financial institution
pursuant to the commission's program, to a company for a project or
for a portion of a project encompassing one or more of the activities
or uses set forth in Section 91503.
(i) "Manufacturing Program Account" means the account established
within the Industrial Development Fund for moneys which are available
for direct loans and loan guarantees. Moneys in this account are not
subject to Section 91554.
(j) "Project" means the acquisition, construction, improvement,
repair, rehabilitation, and reconstruction of facilities and the
acquisition and rehabilitation of machinery, equipment, and
furnishings, and the acquisition of engineering and architectural
surveys, plans, and specifications, and all other necessary and
related capital expenditures by the issuance of bonds, loans, loan
guarantees, or lines of credit upon the application of and to be
repaid by payments from a company for the purposes of this title. For
purposes of this article and the commission loan, loan guarantee,
and line of credit program, a project may also consist of working
capital expenditures.
(k) (1) "Property" means any land, air rights, water rights,
disposal rights, improvements, buildings or other structures, and any
personal property, tangible or intangible, and includes, but is not
limited to, machinery and equipment, whether or not in existence or
under construction, and interests in any of the foregoing, or
promissory notes or other obligations of any kind respecting such
interests.
(2) "Property" also means property suitable for one or more of the
activities or uses described below:
(A) Industrial uses including, without limitation, assembling,
fabricating, manufacturing, processing, or warehousing activities
with respect to any products of agriculture, forestry, mining, or
manufacturing, if these activities have demonstrated job-creation or
retention potential.
(B) Energy development, production, collection, or conversion from
one form of energy to another.
(C) Research and development activities relating to commerce or
industry, including, without limitation, professional,
administrative, and scientific office and laboratory activities or
uses.
(D) Processing or manufacturing recycled or reused products and
materials by manufacturing facilities.
(E) Business activities with the purpose of creating or producing
intangible property.
(F) Airport, dock, wharf, or mass commuting activities, or storage
or training activities related to any of those activities are
prohibited unless the property acquired is suitable for one or more
of the activities described in subparagraphs (A) to (E), inclusive.
(G) Sewage or solid waste disposal activities or electric energy
or gas furnishing activities are prohibited unless the property
acquired is suitable for one or more of the activities described in
subparagraphs (A) to (E), inclusive.
(H) Water furnishing activities are prohibited unless the property
acquired is suitable for one or more of the activities described in
subparagraphs (A) to (E), inclusive.
(l) "Public agency" means any city, county, city and county, or
redevelopment agency.
(m) "Revenues" means all rents, purchase payments, and other
income derived from, or with respect to, the sale, lease, or other
voluntary or involuntary disposition of, or repayment of loans with
respect to, property, bond proceeds, repayment of loans and lines of
credit, moneys received in recovery of defaulted loans, loan
guarantees, or lines of credit, and any receipts derived from the
deposit or investment of any income or proceeds in the account, but
does not include receipts designated to cover administration expenses
or expenses associated with the recovery activities on defaulted
loans, loan guarantees, and lines of credit.
91603. (a) The commission may establish the California
Manufacturing Competitiveness Loan and Loan Guarantee Program for the
purpose of attracting, retaining, and expanding manufacturing
facilities and other companies in the state. The
commission shall establish guidelines for
the implementation of this program consistent with this article. The
commission shall not commence operation of the program prior to
adopting a resolution finding that there is sufficient money in the
Manufacturing Program Account, established pursuant to Section 91604,
to cover the costs of implementing the program, including, but not
limited to, appropriate oversight costs.
(b) In designing the California Manufacturing Competitiveness Loan
and Loan Guarantee Program, the commission shall develop a program
that meets all of the following objectives:
(1) Encourages the development of the state's long-term
manufacturing capacity.
(2) Creates jobs through the support of retooling and expansion of
manufacturing facilities.
(3) Supports quality manufacturing jobs that provide high wages,
including benefits.
(4) Allows manufacturers to access funds under terms and
conditions which would not otherwise be available in the private
market.
(5) Strengthens the supply chain of small businesses that support
this state's manufacturing competitiveness.
(6) Assists manufacturers to cost effectively respond to energy
efficiency regulations and new technologies.
(c) The commission shall adopt procedures and criteria to evaluate
and approve applicants for loans, loan guarantees, or lines of
credit and to evaluate and certify the participating financial
institutions that may make loans, loan guarantees, or extend lines of
credit on its behalf or directly to companies pursuant to the
commission's program. The evaluation and approval of applicants shall
include the assessment of the applicant's creditworthiness and the
valuation of guarantees and collateral to be posted by the applicant
to secure payment of principal and interest on the loan, line of
credit, or extension of a loan guarantee. The evaluation and
certification of participating financial institutions shall include
an assessment of the standards for due diligence for each loan, loan
guarantee, or line of credit made on behalf of the commission or made
directly to a company pursuant to the commission's program. The
commission shall provide for the development and administration of
the application, review, and evaluation process for the program,
including, but not limited to, defining the eligibility standards,
rating and ranking criteria, and other appropriate policies and
procedures for implementing and overseeing the program pursuant to
this article. Among other requirements, the loan, loan guarantee, and
line of credit shall be subject to all of the following provisions:
(1) Applicants must demonstrate they are in compliance with
applicable federal, state, and local laws and regulations, or that
the project for which they are requesting funding will bring them
into compliance.
(2) Outstanding loans must be paid in full six months prior to a
relocation of a facility outside of California. If the loan or loan
guarantee included a subsidized amount, that amount must also be
repaid subject to a sliding scale adopted by the commission.
(3) Applicants shall demonstrate where the facility or facilities
where the moneys will be expended are located and where the benefits
of the assistance will be realized in the state.
(4) That wages the applicant pays its employees in the state are
on average, equal to or more than the average monthly wage rate for
similar workers in the same industry subsector.
(5) The applicant's turnover rate has not exceeded 20 percent
annually at any facility where moneys obtained through the program
will be used.
(6) Upon the request of the commission, each applicant shall agree
to report to the commission in the year the funding was provided,
and the following years, on total capital investments made by the
company, the total employment at the project facility, and the wage
levels by type of work. The applicant shall also estimate the number
of jobs created or retained through the provision of this state
assistance, as well as provide other appropriate performance data, as
determined by the commission.
(d) (1) The commission shall develop a process for the ongoing
monitoring of current and outstanding loans, loan guarantees, and
lines of credit and develop and maintain a database on loans, loan
guarantees, or lines of credit from the fund, which shall include
data related to the applicant, participating financial institution,
the project, the terms of each loan, loan guarantee, or line of
credit, and the status of each loan, loan guarantee, or line of
credit.
(2) The commission shall adopt minimum standards for the
documentation, underwriting, and servicing of loans, loan guarantees,
or lines of credit made by the commission or made by participating
financial institutions on the commission's behalf or directly by a
participating financial institution pursuant to the commission's
program. The documentation, underwriting, and servicing standards
shall be designed to promote the integrity of the program, the fund,
and uniformity in the commission's process of evaluation and due
diligence.
(3) The commission shall provide technical assistance to
participating financial institutions in order to increase utilization
of the minimum documentation, underwriting, and servicing standards.
(e) The commission's evaluation criteria for reviewing
applications and determining financing approvals shall include all of
the following:
(1) Whether employment benefits arising out of the use of the
financing secures the employment of existing employees or increases
the overall number of full-time employees of the company.
(2) Whether the company provides compensation for employees at the
project facility which exceeds the average compensation for similar
employment within the company's jurisdiction or within the state.
(3) Whether the company provides health benefits to employees
employed at the project facility or contributions to employee
retirement benefits.
(4) Whether the project will provide energy, mineral or natural,
or cultivated resource conservation benefits.
(5) Whether the project will include building certified
environmentally beneficial facilities, bringing existing facilities
up to certified environmentally beneficial status, or implementing
energy efficiency measures and installing renewable energy equipment.
(6) Whether the company purchases raw materials or other products
from California-based companies.
(f) Priority for loans, loan guarantees, or lines of credit shall
be given to those companies that do all of the following:
(1) Retain or create the greatest number of jobs compensated at a
wage rate above the average monthly wage rate for a similar company
in the project jurisdiction or in the state.
(2) Have the greatest beneficial economic impact on the state and
local economies as a result of the financing.
(3) Have the greatest negative economic impact on the state and
local economies and on other businesses in the state if it moved its
operations to another state or otherwise ceased operations within the
state.
(g) Priority for loans, loan guarantees, or lines of credit shall
be given to those companies that submit applications jointly with the
union representing workers at the facility or the union with pending
representation of workers at the facility.
(h) The commission shall require that for any construction,
improvement, reconstruction, or rehabilitation financed, in whole or
in part, by means of loans, loan guarantees, or lines of credit
issued pursuant to this article that, pursuant to a resolution of
intention, all workers employed in that work, exclusive of
maintenance work, shall be paid not less than the general prevailing
rate of per diem wages for work of a similar character in the
locality in which the work is performed, and not less than the
general prevailing rate of per diem wages for holiday and overtime
work. Those rates shall be determined by the Director of the
Department of Industrial Relations in accordance with the standards
set forth in Section 1773 of the Labor Code. The director's
determination shall be final, and Sections 1773.1, 1773.5, 1774, and
1776, with the exception of subdivision (f) of Section 1776, of the
Labor Code shall apply.
(i) Each applicant shall pay a nonrefundable application fee that
covers the full amount of the cost for administering the program,
including a proportional share of the development of the program,
review of applications, and the monitoring and oversight of the
program. These moneys shall be deposited directly into the
Manufacturing Program Account, established pursuant to Section 91604,
for the purpose of ensuring that funds are available to the state
for the sole purpose of administration of the program.
91604. (a) There is hereby created within the Industrial
Development Fund, an account called the Manufacturing Program
Account. The account shall be used to pay for direct loans and
defaulted loan guarantees issued pursuant to this article,
administrative costs of the commission, and those costs necessary to
protect a real property interest in a defaulted loan or guarantee. No
moneys other than those moneys in the account may be used to pay for
the direct loans and defaulted loan guarantees issued pursuant to
this article.
(b) All moneys received from the federal government, foundations,
and other public or private funding sources for the purpose of
implementing the California Manufacturing Competitiveness Loan and
Loan Guarantee Program shall be deposited in the Manufacturing
Program Account. All loan repayments, interest, and royalties shall
be deposited back into the Manufacturing Program Account. No General
Fund moneys may be deposited in the Manufacturing Program Account.
(c) The commission shall not commence operation of the program
prior to adopting a resolution finding that there is sufficient money
in the account to cover the costs of implementing the program,
including, but not limited to, appropriate oversight costs.
(d) Moneys in the account shall not be subject to Section 91554.
(e) Upon appropriation by the Legislature, all or a portion of the
funds in the account may be allocated by the commission, with the
approval of the Department of Finance, to a lending institution or
financial company that will act as trustee of the funds.
91605. (a) Beginning October 1, 2012, and annually thereafter,
the commission shall post on its Internet Web site or provide the
Legislature with a report, whichever is more cost effective, on the
program's activities and impact on the manufacturing industry and on
the state's economy, in general.
(b) At a minimum, the information provided pursuant to subdivision
(a) shall include the following:
(1) The total amount of moneys in the Manufacturing Program
Account, at the beginning of the fiscal year and at the end of the
fiscal year.
(2) The number of projects funded and the number of manufacturers
and other businesses assisted.
(3) The number of jobs created and the number of jobs retained
through program assistance in each of the fiscal years.
(4) The amount of investments made by the manufacturer in the
prior year to their assistance and next two years.
(5) The amount of federal, state, and local taxes paid by the
companies in aggregate. Information on publicly held companies shall
also be reported separately.
91606. (a) This article shall be implemented only to the extent
that sufficient moneys are available to the commission to administer
the California Manufacturing Competitiveness Loan and Loan Guarantee
Program.
(b) This article shall remain in effect only until January 1,
2016, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2016, deletes or extends
that date.