BILL ANALYSIS �
SB 511
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Date of Hearing: August 6, 2014
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
SB 511 (Lieu) - As Amended: July 2, 2014
Policy Committee: JEDE Vote:7-0
Urgency: No State Mandated Local Program:
No Reimbursable: No
SUMMARY
This bill re-establishes the California Export Finance Office
(CEFO) 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)Requires the director of the GO-BIZ to convene a statewide
business partnership for promotion of trade for California
ports, no later than February 1, 2015. Specifies the
participants of the partnership and requires the partnership
to advise the GO-BIZ on promoting trade for California ports
and ways to increase the opportunity for growth and trade
activity.
2)Establishes the California Export Finance Office (CEFO) within
the California Small Business Finance Center 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.
Further authorizes the CEFO to coordinate export activities
with international, federal, and other state entities and
disseminate information to California exporters. Sets forth
responsibilities and duties of the executive director of the
I-Bank or his or her designee in serving as the director of
the CEFO.
3)Authorizes the I-Bank to include insurance, coinsurance, and
other forms of surety among the types of financial products
included in programs administered by the bank. Further
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authorizes the I-Bank to act as agent for creditworthy
California 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.
4)Specifies the amount of insured liability outstanding at any
one time shall be secured by no less than a 25% reserve amount
of funds on deposit in the California Small Business Expansion
Fund plus any receivables due from the funds loaned from the
California Small Business Expansion Fund to another fund in
state government, as specified.
5)Establishes an 11-member California Export Finance Board
authorized to implement the responsibilities and activities of
the CEFO, including the oversight of programs and promulgation
of regulations. The Board is also required to adopt by-laws,
appoint advisory committees, hold regularly scheduled
meetings, at least quarterly, and issue an annual report of
activities.
6)Requires the CEFO to comply with the Bagley-Keene Open Meeting
Act and the California Public Records Act.
FISCAL EFFECT
1)Annual General Fund administrative costs in the range of
$350,000 to $470,000 for the I-Bank to administer the
California Export Finance Office. The higher cost range
assumes activities such as establishing and operating a
program for the sale, collection and disbursement of the
accounts receivable of eligible California exporters.
2)Minor, absorbable costs to GO-Biz to convene a statewide
business partnership for promotion of trade for California
ports and to explore greater utilization of California ports.
COMMENTS
1)Purpose. This bill re-establishes the California Export
Finance Office (CEFO) which expired in 2003 with the
elimination of the Technology, Trade and Commerce Agency.
According to the author, re-establishing the CEFO will help
firms, especially medium and small businesses, finance their
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export sales of goods, services and California agricultural
commodities by providing working capital loan guarantees to
support export transactions. In addition to financial
assistance, the CEFO will provide businesses with information
and technical assistance on exporting opportunities and
techniques.
2)Background . This bill re-establishes the CEFO under the GO-Biz
administrative structure. GO-Biz is the primary state agency
responsible for state trade and foreign investment activity in
California. GO-Biz also administers the Office of the Small
Business Advocate, the Permit Assistance Unit, the Office of
Foreign Trade and Investment, and the Business Investment
Services Unit, the California Travel and Tourism Commission,
the I-Bank, the Small Business Loan Guarantee Program, and the
California Film Commission.
3)Continuous appropriation . This bill authorizes the I-Bank to
include insurance, coinsurance, and other forms of surety
among the types of financial products included in programs
administered by the bank. This bill also authorizes the I-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 I-Bank that are funded through a continuous appropriation
(California Small Business Expansion Fund), this bill requires
a 2/3 vote of the Legislature.
4)Prior legislation . SB 592 (Lieu) of 2013 contains an
identical provision requiring GO-Biz to create a statewide
business partnership for promotion of trade for California
ports. The bill also required GO-Biz to provide a port trade
promotion strategy to the Legislature. This bill was held on
the Suspense File in this committee.
Analysis Prepared by : Misty Feusahrens / APPR. / (916)
319-2081