BILL NUMBER: AB 1399 AMENDED
BILL TEXT
AMENDED IN SENATE AUGUST 22, 2013
INTRODUCED BY Committee on Jobs, Economic Development, and the
Economy (Medina (Chair), Campos, Daly, Fong, Fox,
Hueso, Linder, Mansoor, Melendez, and
V. Manuel Pérez V. Manuel Pérez
))
MARCH 11, 2013
An act to amend and renumber Sections 13997.2 and 13997.7 of, and
to add the heading of Article 6 (commencing with Section 12100) to
Chapter 1.6 of Part 2 of Division 3 of Title 2 of , the
Government Code, and to amend Section 44559.1 of the Health and
Safety Code, relating to economic development.
LEGISLATIVE COUNSEL'S DIGEST
AB 1399, as amended, Committee on Jobs, Economic Development, and
the Economy. Economic development.
Existing law defines specified terms relating to economic
development and authorizes the Business, Transportation and Housing
Agency, and its secretary, to expend specified funds.
This bill would renumber these provisions and
, instead authorize the Governor's Office of Business and
Economic Development, Development and
its director, director to expend these
funds. This bill would authorize the Executive Director of the
California Infrastructure and Economic Development Bank to expend
these funds, but only if AB 1247, relating to the Small Business
Assistance Act of 2013, is enacted and takes effect on or before
January 1, 2014. This bill would also make conforming changes.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The heading of Article 6 (commencing with Section
12100) is added to Chapter 1.6 of Part 2 of Division 3 of Title 2 of
the Government Code, to read:
Article 6. Local Economic Development
SEC. 2. Section 13997.2 of the Government Code is amended and
renumbered to read:
12100. (a) The Legislature finds and declares all of the
following:
(1) California's economic development organizations and
corporations are an integral component of the state job creation
effort because they are a critical link between state economic
development activities and the statewide business community,
providing an excellent opportunity to leverage state resources.
(2) Economic development corporations and organizations provide
broad public benefits to the residents of this state by alleviating
unemployment, encouraging private investment, and diversifying local
economies.
(3) Economic development corporations engage in a wide range of
programs and strategies to attract, retain, and expand businesses,
including marketing the community, small business lending, and other
financial services, a wide range of technical assistance to small
business, preparation of economic data, and business advocacy.
(4) By using public sector resources and powers to reduce the
risks and costs that could prohibit investment, the public sector
often sets the stage for employment-generating investment by the
private sector.
(b) For purposes of this chapter, all of the following definitions
apply:
(1) "Local economic development organization" means a public or
public-private job creation activity recognized by cities and
counties as the lead agency within that city or county for planning
and implementation of job creation involving business expansion,
business retention, and new business development.
(2) "Regional economic development organization" means an
organization comprised of any of the following:
(A) A single county.
(B) More than one county.
(C) A subregion within a county established by the cities and
county within that subregion.
(D) An economic development corporation.
(3) "Economic development corporation" means a local or regional
nonprofit public-private economic development organization recognized
in a defined region by the public and private sector as the lead
agency for the planning and implementation of job creation involving
business retention and new business development.
(4) "Regional economic development corporation" means a
corporation comprised of any of the following:
(A) A single county.
(B) More than one county.
(C) A subregion within a single county established by a group of
cities and counties.
(5) "Economic development" means any activity that enhances the
factors of productive capacity, such as land, labor, capital, and
technology, of a national, state, or local economy. "Economic
development" includes policies and programs expressly directed at
improving the business climate in business finance, marketing,
neighborhood development, small business development, business
retention and expansion, technology transfer, and real estate
redevelopment. "Economic development" is an investment program
designed to leverage private sector capital in such a way as to
induce actions that have a positive effect on the level of business
activity, employment, income distribution, and fiscal solvency of the
community.
(6) "Local economic development" is a process of deliberate
intervention in the normal economic process of a particular locality
to stimulate economic growth of the locality by making it more
attractive, resulting in more jobs, wealth, better quality of life,
and fiscal solvency. Prime examples of economic development include
business attraction, business expansion and retention, and business
creation.
(7) "Emerging domestic market" means people, places, or business
enterprises with growth potential that face capital constraints due
to systemic undervaluations as a result of imperfect market
information. These markets include, but are not limited to,
ethnic-owned and women-owned firms, urban and rural communities,
companies that serve low-income or moderate-income populations, and
other small- and medium-sized businesses.
(8) "Financial intermediary" means an institution, firm,
organization, or individual who performs intermediation between two
or more parties in a financial context, such as connecting sources of
funds with users of funds. A financial intermediary is typically an
entity that facilitates the channeling of funds between lenders,
investors, foundations, or other entities that have money and are
interested in connecting with businesses or communities where their
money can be deployed. Financial intermediaries include, but are not
limited to, banks, financial development corporations, economic
developers, microbusiness lenders, and community development
organizations.
(9) "Community development intermediary" means an institution,
firm, organization, or individual that performs intermediation
between two or more parties in a community development context, such
as connecting people and organizations that have a stake in the
future well-being of communities and individuals who may not easily
have access to these stakeholders. A community development
intermediary is typically an entity that channels financial and
nonfinancial resources between government and foundations and other
nonprofit organizations that have resources and are interested in
connecting with small- and medium-size businesses and low- and
moderate-income households and communities. Community development
intermediaries include, but are not limited to, community development
corporations, microbusiness lenders, and community development
financial institutions.
(10) "Triple bottom line" means the economic, environmental, and
social benefits arising from a project, investment, or community and
economic development activity.
(11) "Small businesses" means a business with less than 100
employees and with a gross revenue of less than five million dollars
($5,000,000), or a business that is otherwise targeted by or
participating in a federal or state program engaged in programs or
services for small businesses. Application of this definition may
only be used pursuant to a direct reference.
(12) "Community development" means a process designed to create
conditions of economic and social prosperity for the whole community,
or a targeted subset of the whole community, with the fullest
possible reliance on the community's initiative and active
participation.
(13) "Financial institution capital" means resources of a
financial institution, including, but not limited to, a bank or
credit union, that are legally available to be used to generate
wealth for the financial institution.
(14) "California Council on Science and Technology" means the
council established by California academic research institutions,
including the University of California, the University of Southern
California, the California Institute of Technology, Stanford
University, and the California State University, in support of
Assembly Concurrent Resolution No. 162 (Res. Ch. 148, Stats. 1988).
(15) "Microbusiness lender" means a nonprofit or nonbank lender
that serves very small businesses in low- and moderate-income
communities that experience barriers in accessing capital. These
businesses are often owned by minorities, immigrants, women, and
persons with disabilities. Microbusiness lenders generally provide
loans under fifty thousand dollars ($50,000) and offer business
technical assistance, both preloan and postloan, to improve an
applicant's ability to qualify and successfully repay a loan.
SEC. 3. Section 13997.7 of the Government Code is amended and
renumbered to read:
12098.7. (a) Notwithstanding any other law, effective January 1,
2008, the Economic Adjustment Assistance Grant funded through the
United States Economic Development Administration under Title IX of
the Public Works and Economic Development Act of 1965 (Grant No.
07-19-02709 and 07-19-2709.1) shall be administered by the director,
and, for the purpose of state administration of this grant, the
director shall be deemed to be the successor to the former
Secretary of Business, Transportation and Housing and the former
Secretary of Technology, Trade and Commerce. The director may
assign and contract administration of the grant to a public agency
created pursuant to Chapter 5 (commencing with Section 6500) of
Division 7 of Title 1.
(b) On January 1, 2008, all federal moneys held in the Sudden and
Severe Economic Dislocation Grant Account within the Special Deposit
Fund are hereby transferred to the Small Business Expansion Fund
created pursuant to Section 14030 of the Corporations Code for
expenditure by the office pursuant to Article 9 (commencing with
Section 14070) of the Corporations Code for purposes of the Sudden
and Severe Economic Dislocation Grant program, or other purposes
permitted by the cognizant federal agency.
(c) All loan repayments received on or after January 1, 2008, for
the Sudden and Severe Economic Dislocation Grant program loans issued
pursuant to former Section 15327 (repealed by Section 1.8 of Chapter
229 of the Statutes of 2003 (AB 1757)) and this section, shall be
deposited into the Small Business Expansion Fund and shall be
available to the office for expenditure pursuant to the provisions of
Article 9 (commencing with Section 14070) of the Corporations Code
for the Sudden and Severe Economic Dislocation Grant program, or
other purposes permitted by the cognizant federal agency.
SEC. 4. Section 13997.7 of the
Government Code is amended and renumbered to read:
13997.7. 63089.92. (a)
Notwithstanding any other provision of law,
effective January 1, 2008, the Economic Adjustment Assistance Grant
funded through the United States Economic Development Administration
under Title IX of the Public Works and Economic Development Act of
1965 (Grant No. 07-19-02709 and 07-19-2709.1) shall be administered
by the Secretary of Business, Transportation and Housing,
Executive Director of the California Infrastructure
and Economic Development Bank and, for the purpose of state
administration of this grant, the secretary
executive director shall be deemed to be the successor to the
former Secretary of Busines s, Transportation and
Housing and the former Secretary of Technology, Trade and
Commerce. The secretary executive director
may assign and contract administration of the grant to a public
agency created pursuant to Chapter 5 (commencing with Section 6500)
of Division 7 of Title 1.
(b) On January 1, 2008, all federal moneys held in the Sudden and
Severe Economic Dislocation Grant Account within the Special Deposit
Fund are hereby transferred to the Small Business Expansion Fund
created pursuant to Section 14030 of the Corporations Code for
expenditure by the Business, Transportation and Housing
Agency California Infrastructure and
Economic Development Bank pursuant to Article 9 (commencing
with Section 14070) of the Corporations Code for purposes of the
Sudden and Severe Economic Dislocation Grant program, or other
purposes permitted by the cognizant federal agency.
(c) All loan repayments received on or after January 1, 2008, for
the Sudden and Severe Economic Dislocation Grant program loans issued
pursuant to former Section 15327 (repealed by Section 1.8 of Chapter
229 of the Statutes of 2003 (AB 1757)) and this section, shall be
deposited into the Small Business Expansion Fund and shall be
available to the Business, Transportation and Housing Agency
California Infrastructure and Economic
Development Bank for expenditure pursuant to the provisions of
Article 9 (commencing with Section 14070) of the Corporations Code
for the Sudden and Severe Economic Dislocation Grant program, or
other purposes permitted by the cognizant federal agency.
SEC. 5. Section 44559.1 of the Health
and Safety Code is amended to read:
44559.1. As used in this article, unless the context requires
otherwise, all of the following terms have the following meanings:
(a) "Authority" means the California Pollution Control Financing
Authority.
(b) "California Capital Access Fund" means a fund created within
the authority to be used for purposes of the program.
(c) "Executive director" means the Executive Director of the
California Pollution Control Financing Authority.
(d) (1) "Financial institution" means a federal- or
state-chartered bank, savings association, credit union,
not-for-profit community development financial institution certified
under Part 1805 (commencing with Section 1805.100) of Chapter XVIII
of Title 12 of the Code of Federal Regulations, or a consortium of
these entities. A consortium of those entities may include a
nonfinancial corporation, if the percentage of capitalization by all
nonfinancial corporations in the consortium does not exceed 49
percent.
(2) (A) "Financial institution" also includes 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 I of
Title 13 of the Code of Federal Regulations and meets the
requirements of Section 120.410 of Chapter I of Title 13 of the Code
of Federal Regulations, a small business investment company licensed
pursuant to Part 107 (commencing with Section 107.20) of Chapter I of
Title 13 of the Code of Federal Regulations, and a small business
financial development corporation, as defined in Chapter 1
(commencing with Section 14000) of Part 5 of Division 3 of Title 1 of
the Corporations Code, or microbusiness lender, as defined in
Section 13997.2 12100 of the Government
Code, that meets standards that shall be established by the
authority. For loans where all or part of the fees and matching
contributions are paid by an entity participating in the program
pursuant to subdivision (e) of Section 44559.2, "financial
institution" also includes financial lenders, as defined in Section
22009 of the Financial Code, making commercial loans, as defined in
Section 22502 of the Financial Code.
(B) A financial institution described in this paragraph shall be
domiciled or have its principal office in the State of California.
(3) "Financial institution" also includes an insured depository
institution, insured credit union, or community development financial
institution, as these terms are defined in Section 4702 of Title 12
of the United States Code.
(e) "Loss reserve account" means an account in the State Treasury
or any financial institution that is established and maintained by
the authority for the benefit of a financial institution
participating in the Capital Access Loan Program established pursuant
to this article for the purposes of the following:
(1) Depositing all required fees paid by the participating
financial institution and the qualified business.
(2) Depositing contributions made by the state and, if applicable,
the federal government or other sources.
(3) Covering losses on enrolled qualified loans sustained by the
participating financial institution by disbursing funds accumulated
in the loss reserve account.
(f) "Participating financial institution" means a financial
institution that has been approved by the authority to enroll
qualified loans in the program and has agreed to all terms and
conditions set forth in this article and as may be required by any
applicable federal law providing matching funding.
(g) "Passive real estate ownership" means ownership of real estate
for the purpose of deriving income from speculation, trade, or
rental, but does not include any of the following:
(1) The ownership of that portion of real estate being used or
intended to be used for the operation of the business of the owner of
the real estate.
(2) The ownership of real estate for the purpose of construction
or renovation, until the completion of the construction or renovation
phase.
(h) "Program" means the Capital Access Loan Program created
pursuant to this article.
(i) "Qualified business" means a small business concern that meets
both of the following criteria, regardless of whether the small
business concern has operations that affect the environment:
(1) It is a corporation, partnership, cooperative, or other
entity, whether that entity is a nonprofit entity or an entity
established for profit, that is authorized to conduct business in the
state.
(2) It has its primary business location within the boundaries of
the state.
(j) (1) "Qualified loan" means a loan or a portion of a loan made
by a participating financial institution to a qualified business for
any business activity that has its primary economic effect in
California. A qualified loan may be made in the form of a line of
credit, in which case the participating financial institution shall
specify the amount of the line of credit to be covered under the
program, which may be equal to the maximum commitment under the line
of credit or an amount that is less than that maximum commitment. A
qualified loan made under the program may be made with the interest
rates, fees, and other terms and conditions agreed upon by the
participating financial institution and the borrower.
(2) "Qualified loan" does not include any of the following:
(A) A loan for the construction or purchase of residential
housing.
(B) A loan to finance passive real estate ownership.
(C) A loan for the refinancing of an existing loan when and to the
extent that the outstanding balance is not increased.
(D) A loan, the proceeds of which will be used in any manner that
could cause the interest on any bonds previously issued by the
authority to become subject to federal income tax.
(k) "Severely affected community" means any area classified as an
enterprise zone pursuant to the Enterprise Zone Act (Chapter 12.8
(commencing with Section 7070) of Division 7 of Title 1 of the
Government Code), any area, as designated by the executive director,
contiguous to the boundaries of a military base designated for
closure pursuant to Section 2687 of Title 10 of the United States
Code, as amended, and any other comparable economically distressed
geographic area so designated by the executive director from time to
time.
(l) "Small Business Assistance Fund" means a fund created within
the authority pursuant to Section 44548.
(m) "Small business concern" has the same meaning as in Section
632 of Title 15 of the United States Code, or as otherwise provided
in regulations of the authority.
SEC. 6. (a) Section 3 of this bill amends and
renumbers Section 13997.7 of the Government Code. It shall become
operative only if Assembly Bill 1247, relating to the Small Business
Financial Assistance Act of 2013, is not enacted and does not take
effect on or before January 1, 2014, in which case Section 4 of this
bill shall not become operative.
(b) Section 4 of this bill amends and renumbers Section 13997.7 of
the Government Code. It shall become operative only if Assembly Bill
1247, relating to the Small Business Financial Assistance Act of
2013, is enacted and takes effect on or before January 1, 2014, in
which case Section 3 of this bill shall not become operative.