BILL NUMBER: SB 511 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MAY 19, 2014
AMENDED IN SENATE JANUARY 22, 2014
AMENDED IN SENATE JANUARY 6, 2014
AMENDED IN SENATE APRIL 30, 2013
AMENDED IN SENATE APRIL 1, 2013
INTRODUCED BY Senator Lieu
FEBRUARY 21, 2013
An act to add Chapter 2.6 (commencing with Section 13996.85) to
Part 4.7 of Division 3 of Title 2 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.
government, and making an appropriation therefor.
LEGISLATIVE COUNSEL'S DIGEST
SB 511, as amended, Lieu. Trade promotion of California
ports. ports: California Export Finance Office
.
Existing
(1) Existing law requires the
Director of the Governor's Office of Business and Economic
Development Development, known as GO-Biz, to
provide to the Legislature, not later than February 1, 2014, a
strategy for international trade and investment that, at a minimum,
includes specified information, goals, objectives, and actions
related to the promotion of trade.
The bill would require the director to convene, no later than
February 1, 2015, 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.
(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 activities of the bank under these provisions
are funded from the California Infrastructure and Economic
Development Bank Fund, which is continuously appropriated for these
purposes.
This bill would establish the California Export Finance Office
(office) 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
insure, coinsure, and guarantee loans for qualified export
transactions, disseminate information to California exporters, and
act as an agent for creditworthy California growers, manufacturers,
and other exporters.
The bill would establish the Export Finance Fund as a continuously
appropriated fund, to receive, among other moneys, state, federal,
and private funds, fees and collections made by the office, and the
returns on investments made pursuant to these provisions. By
establishing a continuously appropriated fund and authorizing
deposits into that fund, the bill would make an appropriation.
The bill would also establish within the office an 11-member
California Export Finance Board (finance 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
finance board, among other duties, to oversee the program authorized
by these provisions, including, but not limited to, promulgating
regulations establishing programs to insure, coinsure, and provide
loan guarantees to support expert transactions. The bill would
authorize the finance board to delegate the approval or extension of
insurance, coinsurance, or loan guarantees, as specified.
The bill would require the office to comply with existing laws
relating to open and public meetings and access to public records,
except, under certain circumstances, for records containing the
financial data of applicants seeking financial assistance from the
board, and telephone or cellular phone conferences or meetings of the
board relating to its approval of an application for that financial
assistance in the form of loan guarantees, as specified.
(3) Existing constitutional provisions require that a statute that
limits the right of access to the meetings of public bodies or the
writings of public officials and agencies be adopted with findings
demonstrating the interest protected by the limitation and the need
for protecting that interest. This bill would make legislative
findings to that effect.
Vote: majority 2/3 . Appropriation:
no yes . Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The Legislature finds and declares all
of the following:
(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.
(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, East
Coast, and Mexican ports preparing to compete with California's
market share as the expanded Panama Canal becomes operational in
2015.
(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.
(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.
(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.
(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.
(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.
SECTION 1. SEC. 2. Chapter 2.6
(commencing with Section 13996.85) is added to Part 4.7 of Division 3
of Title 2 of the Government Code, to read:
CHAPTER 2.6. TRADE PROMOTION OF CALIFORNIA PORTS
13996.85. The Director of the Governor's Office of Business and
Economic Development shall convene, no later than February 1, 2015, 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.
SEC. 3. Chapter 7 (commencing with Section 63090)
is added to Division 1 of Title 6.7 of the Government Code
, to read:
CHAPTER 7. CALIFORNIA EXPORT FINANCE
63090. As used in this chapter:
63090. (a) "California Export Finance Board" or "finance board"
means the California Export Finance Board established by 63090.7.
(b) "California Export Finance Office" or "office" means the
entity created by Section 63090.1.
(c) "Financial institution" means a bank or savings and loan
association regulated by the state or federal government, an
insurance company authorized to transact business in California, a
personal property broker or industrial loan company that is regulated
by the state, and a person whose primary business is lending money
and is regulated by the state.
63090.1 (a) The California Export Finance Office is hereby
created 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.
63090.2. 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 finance board.
63090.3. The executive director, or his or her designee, upon
approval of the finance 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, loans, 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 export finance training for staff and other
individuals involved in export finance assistance, including, but not
limited to, training sessions provided by the Export-Import Bank of
the United States or other organizations.
63090.4. The office is authorized to do all of the following:
(a) Insure, coinsure, and guarantee loans related to qualified
export transactions pursuant to regulations adopted by the finance
board.
(b) Coordinate to the maximum extent possible the efforts of the
California Export Finance Office with program and goals of the
Export-Import Bank of the United States, the International Trade
Administration of the United States Department of Commerce, the
Foreign Credit Insurance Association, and other public and private
programs designed to provide export assistance and export-related
financing.
(c) Establish a network of contacts among public and private
organizations that provide information, technical assistance, and
financial support of exporting.
(d) 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.
(e) 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.
(f) Provide individual firms and agricultural enterprises with
information and technical assistance relating to exporting and export
financing.
63090.5. (a) 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), except as specified in subdivision (b).
(b) (1) Notwithstanding any other law, if the executive director
determines that disclosure of financial data would be competitively
injurious to an applicant, the disclosure of financial data contained
in applications for financial assistance from the finance board
shall not be required. For this purpose, financial data includes, but
shall not be limited to, financial statements, details of accounts
receivable and accounts payable, income tax returns, owner-officer
compensation records, collateral details, cashflow analysis, orders,
contracts and letters of credit, and other documents that would
disclose specific names or addresses of customers or would-be
customers.
(2) Notwithstanding any other law, the finance board or a
subcommittee of the finance board may review and approve loan
guarantee requests by means of a telephone or cellular phone
conference or in a meeting not open to the public.
63090.6. The office may do any of the following:
(a) Act as 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 clearing house 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.
63090.7. (a) The California Export Finance Board is established
within the bank. The finance 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) Finance board members who are not employees of the state shall
receive the per diem authorized in Section 11564.5 for each day they
attend finance board or finance 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 finance board and finance board
subcommittee meetings and conducting finance board businesses as
determined by the finance board.
63090.8. The finance 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 finance board.
(b) Oversee the program authorized by this chapter, promulgate
rules and regulations that are necessary to carry out the
responsibilities under this chapter, including, but not limited to,
establishing programs to insure, coinsure, and provide loan
guarantees to support export transactions. The finance board shall
ensure that these programs conform to international trade agreements
of the United States. The rules and regulations of the finance board
shall be adopted in accordance with Article 5 (commencing with
Section 11346) of Chapter 3.5 of Part 1 of Division 3 of Title 2.
(c) Adopt bylaws as are necessary to govern the conduct and
operation of the finance board.
(d) Provide for the appointment of advisory groups necessary to
carry out the powers and duties of the finance board.
(e) Hold regularly scheduled meetings, at least quarterly, in
order to carry out the objectives and responsibilities of the finance
board.
(f) Issue an annual report critiquing the program, its needs, and
recommended changes. The report shall include an evaluation of the
program's impact on 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.
(g) Adopt criteria establishing which exports and export
transactions are eligible for the insurance, coinsurance, and loan
guarantees as may be extended by the finance board. Pursuant to this
subdivision, the finance board shall adopt regulations to ensure that
all of the following criteria are met:
(1) Borrowers have a minimum equity interest in the business as
determined by the finance board.
(2) Loan guarantees, insurance, and coinsurance are 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) Financing assistance backed by or using funds from the Export
Finance Fund shall be extended only for any of the following
circumstances:
(A) As part of a state match that may be required to secure
participation of California firms or agricultural enterprises in
federal, state, or private financing programs.
(B) If adequate financing assistance is not readily available from
public or private sources in a timely manner.
(h) Adopt collateral or security requirements to ensure the full
repayment of loan guarantees and solvency of any insurance and
coinsurance program extended under this chapter and to assist in
evaluating the program authorized by this chapter.
(i) Approve any and all extensions of insurance, coinsurance, or
loan guarantees under this chapter.
(1) The finance board may elect to delegate the approval authority
to a committee consisting of at least three members of the finance
board.
(2) The finance board may elect to delegate this approval to an
office loan committee if the financial exposure to a borrower or
insured does not exceed an aggregate of one hundred thousand dollars
($100,000). The office loan committee shall be composed of the
director of the office and two others who shall be selected by, and
who shall be responsible to, the finance board.
(3) All approvals delegated pursuant to paragraphs (1) and (2)
shall be reported to, and shall be reviewed by, the finance board at
the next regular finance board meeting.
(j) Work with and seek assistance from the Export-Import Bank of
the United States, the International Trade Administration of the
United States Department of Commerce, the Foreign Credit Insurance
Association, and other public and private programs designed to
provide export assistance and export-related financing.
(k) Develop a streamlined application and review process.
63090.9. There is hereby created in the State Treasury the Export
Finance Fund. The purpose of the Export Finance Fund is to receive
all of the following moneys for purposes of this chapter:
(a) State, federal, and private funds.
(b) Insurance premiums and other fees earned by the office.
(c) Recoveries and collections on claims paid by the office.
(d) Funds received from the return of investments pursuant to this
chapter.
63090.10. Notwithstanding Section 13340, all funds deposited in
the Export Finance Fund are hereby continuously appropriated, without
regard to fiscal years, for the purposes of this chapter.
63090.11. The state shall not be liable or obligated in any way
beyond the state funds that are allocated and deposited in the Export
Finance Fund from state funds that are appropriated for those
purposes.
63090.12. The Treasurer, with the approval of the finance board,
may cause funds in the Export Finance Fund to be invested and
reinvested, from time to time, in the Surplus Money Investment Fund
as provided in Article 4 (commencing with Section 16470) of Chapter 3
of Part 2 of Division 4 of Title 2. Funds in the Export Finance Fund
and not so invested may be deposited from time to time in financial
institutions authorized by law to receive deposits of public funds.
Returns from investments and interest on deposits shall be deposited
in the Export Finance Fund.
63090.13. Funds in the Export Finance Fund shall be paid out by
the Treasurer on warrants drawn by the Controller upon order of the
finance board in furtherance of the purposes of this chapter,
including, but not limited to, the payment of operating expenses,
principal and interest on bonds, claims under loan guarantee and
insurance and coinsurance programs, payments for reinsurance, and
payments required by state, federal, or private export programs
conducted by the finance board.
63090.14. The office may charge fees for its loan guarantees,
insurance, coinsurance, and other services, the amount of which shall
be determined by the finance board.
63090.15. Loan guarantees and insured export transactions made by
the office shall be secured by no less than a 25 percent reserve in
the Export Finance Fund. The finance board may elect to require a
higher reserve. The finance board shall adopt regulations on the
terms and limits for loan guarantees, but a loan guarantee shall not
exceed any of the following:
(a) Ninety percent of the required financing.
(b) Nine hundred thousand dollars ($900,000).
(c) The lesser of five years or the useful life of the product.
63090.16. The executive director shall submit an annual budget,
as part of the budget of the bank, for inclusion in the annual
budget.
63090.17. If any provision of this chapter or the application
thereof to any person or circumstance is held invalid, that
invalidity shall not affect any other provision or application of
this chapter that can be given effect without the invalid provision
or application, and to this end the provisions of this chapter are
severable.
SEC. 4. The Legislature finds and declares that
Section 3 of this act, which adds Section 63090.5 to the Government
Code, imposes a limitation on the public's right of access to the
meetings of public bodies or the writings of public officials and
agencies within the meaning of Section 3 of Article I of the
California Constitution. Pursuant to that constitutional provision,
the Legislature makes the following findings to demonstrate the
interest protected by this limitation and the need for protecting
that interest:
Disclosure of financial data would be competitively injurious to
California businesses.