Source: http://www.leginfo.ca.gov/pub/13-14/bill/asm/ab_1201-1250/ab_1247_bill_20130618_amended_sen_v96.htm
Timestamp: 2019-10-23 09:54:14
Document Index: 44993415

Matched Legal Cases: ['art 5', 'art 5', 'art 5', 'art\n38', 'art.\n7', 'art 2', 'art 2', 'art\n332', 'art 5', 'art 1', 'art 1', 'art 5', 'art 121', 'art 5', 'art 5', 'art 5', 'art 5', 'art 5', 'art 1', 'art 1', 'art 5', 'art 5', 'art 5', 'art 5', 'art 2', 'art 5', 'art 5', 'art 5', 'art 2', 'art 2', 'art\n17', 'art 1', 'art 1', 'art 5']

AB 1247 Assembly Bill – AMENDED
Amended in Senate June 18, 2013
Amended in Senate June 5, 2013
Assembly BillNo. 1247
An act to repeal and add Chapter 1 (commencing with Section 14000) of Part 5 of Division 3 of Title 1 of the Corporations Code, andbegin insert to amend Section 8684.2 of, andend insert to add Chapter 6 (commencing with Section 63088) to Division 1 of Title 6.7 to, to repeal Sections 63089.5,begin delete 63089.63, 63089.64, and 63089.66 of,end deletebegin insert 63089.60, 63089.61, and 63089.62 of,end insert the Government Code, relating to business, making an appropriation therefor, and declaring the urgency thereof to take effect immediately.
AB 1247, as amended, Medina. Business investments: Small Business Financial Assistance Act of 2013.
Existing law, the California Small Business Financial Development Corporation Law, creates the California Small Business Board and the California Small Business Expansion Fund, a continuously appropriated fund, which includes General Fund moneys. Existing law authorizes the formation of small business financial development corporations to grant loans from, or guarantee loans made by a financial institution or financial company, as defined, against, moneys awarded to the corporation from the expansion fund for the purpose of stimulating small business development. Existing law authorizes a director designated by the Secretary of Business, Transportation and Housing to perform specified duties under that law. A violation of certain conflict-of-interest provisions by the director and other persons, as specified, is a crime.
This bill would revise and recast these provisions, and would transfer the administration of the California Small Business Financial Development Corporation Law to the California Infrastructure and Economic Development Bankbegin insert (I-Bank)end insert and a program manager designated by the executive director of thebegin delete Infrastructure and Economic Development Bankend deletebegin insert I-Bankend insert, as specified. The bill would expand the definitions of “financial institution” and “financial company” for those purposes. Because the above-described conflict-of-interest provisions would apply to thebegin delete director andend deletebegin insert members of the I-Bank’s board of directors, the program manager, theend insert executive director, and other officers and employees, as specified, the bill would extend the application of a crime, and impose a state-mandated local program.
Chapter 1 (commencing with Section 14000) of
2Part 5 of Division 3 of Title 1 of the Corporations Code is repealed.
Chapter 1 (commencing with Section 14000) is added
4to Part 5 of Division 3 of Title 1 of the Corporations Code , to read:
P3 1Chapter 1. California Small Business Financial
2Development Corporations
4Article 1. Introduction
This chapter shall be known and may be cited as the
7California Small Business Financial Development Corporation
8Law.
10chapter to promote the economic development of small businesses
11begin insert through the California Small Business Finance Center end insert by making
12available capital, general management assistance, and other
13resources, includingbegin delete loan and equity investmentend deletebegin insert financialend insert services,
14personnel, and business education to small business entrepreneurs,
15including womenbegin insert, veteran,end insert and minority owned businesses, for
16the purpose of promoting the health, safety, and social welfare of
17the citizens of California, to eliminate unemployment of the
18economically disadvantaged of the state, and to stimulate economic
19development, employment, minority group, women, and disabled
20persons entrepreneurship.
21(b) It is the further intent of the Legislature to provide a flexible
22means to mobilize and commit all available and potential resources
23in the various regions of the state to fulfill these objectives,
24including federal, state, and local public resources, and private
25debt and equity investment.
26(c) It is the further intent of the Legislature that corporations
27operating pursuant to this law, shall to the maximum extent
28feasible, coordinate with other job and business development
29efforts within their region directed toward implementing the
30purpose of this chapter.
31(d) It is the further intent of the Legislature to provide expanded
32resources allowing participation by small and emerging contractors
33in state public works contracts. Increased access to surety bonding
34resources will assist in supporting participation by those firms in
35public works contracts, and by stimulating increased participation
36by small firms, the state will benefit from increased competition
37and lower bid costs.
If any provision of this chapter or the application thereof
39to any person or circumstances is held invalid, this invalidity shall
40not affect other provisions or applications of the chapter which
P4 1can be given effect without the invalid provision or application,
2and to this end the provisions of this chapter are severable.
4Article 2. Definitions
Unless the context otherwise requires, the definitions
7in this section shall govern the construction of this chapter.
8(a) “Bank” means the California Infrastructure and Economic
9Development Bank.
11begin insert(b)end insert “Bank board” means the board of directors of the California
12Infrastructure and Economic Development Bank.
13(b) “Board” means the California Small Business Board.
14(c) “Board of directors” means the board of directors of the
15corporation.
16(d) “California Small Business Finance Center” means the
17governmental unit with the administrative responsibility for
18programs authorized pursuant to Section 63088.5 of the
19Government Code and this chapter.
21begin insert(e)end insert “Corporation” means any nonprofit California small business
22financial development corporation created pursuant to this chapterbegin insert,
23or pursuant to Chapter 1 (commencing with Section 32000) of
24Division 15.5 of the Financial Codeend insert.
25(f) “Directives and requirements” means a document adopted
26by the bank board setting forth policy direction as well as key rules
27governing a particular subject area.
29begin insert(g)end insert “Executive director” means the executive director of the
30Infrastructure and Economic Development Bank.
31(f)
32begin insert(h)end insert “Expansion fund” means the California Small Business
33Expansion Fund.
35begin insert(i)end insert “Financial company” means banking organizations, including
36national banks and trust companies, savings and loan associations,
37certified community development financial institutions,
38microbusiness lenders, state insurance companies, mutual insurance
39companies, and other public and private banking, lending,
40retirement, and insurance organizations.
P5 1(h)
2begin insert(j)end insert “Financial institution” means regulated banking
3organizations, including national banks and trust companies
4authorized to conduct business in the state and state-chartered
5commercial banks, trust companies, credit unions, and savings and
6loan associations.
7(k) “Financial product” means the type of financial assistance
8described in Section 63088.5 of the Government Code.
10begin insert(end insertbegin insertlend insertbegin insert)end insert “Loan committee” means a committee appointed by the board
11of directors of a corporation to determine the course of action on
12a loan application pursuant to Chapter 6 (commencing with Section
1363088) of Division 1 of Title 6.7 of the Government Code.
14(j)
15begin insert(m)end insert “Program Manager” means the manager ofbegin delete a specific
16programend deletebegin insert the California Small Business Finance Centerend insert as
17designated to this title by the executive director of thebegin delete Infrastructure
18and Economic Development Bankend deletebegin insert bankend insert.
19(k)
20begin insert(n)end insert “Trust fund” means the money from the expansion fund that
21is held in trust by a financial institution or financial company. A
22trust fund is not a deposit of state funds and is not subject to the
23requirements of Section 16506 of the Government Code.
24(l)
25begin insert(o)end insert “Trust fund account” means an account within the trust fund
26that isbegin insert eitherend insert allocated to a particularbegin delete small business financial
27developmentend delete corporationbegin insert or shared by multiple corporationsend insert for
28the purpose of paying loan defaults and claims on bond guarantees
29begin delete for a specific small business financial development corporationend deletebegin insert or
30other financial products and program uses provided in this chapterend insert.
32Article 3. Program Manager
35(1) Administer this chapter.
36(2) Make recommendations to thebegin insert executive director and the
37bankend insert board on the approval or disapproval of the articles of
38incorporation. This determination shall be based upon the
P6 1(A) Review of the articles of incorporation and bylaws of the
2corporation to determine whether they contain the provisions
3required by this chapter and conform with thebegin delete regulationsend deletebegin insert directives
4and requirementsend insert adoptedbegin insert by the bank board end insert pursuant to this
5chapter.
6(B) A determination as to whether the legislative intent
7expressed in Section 14001 shall be served by the proposed
8corporation.
9(C) A determination as to whether the responsibility, character,
10and general fitness of the individuals who will manage the
11 corporation are such as to command the confidence of the state
12and to warrant the belief that the business of the proposed
13 corporation will be honestly and efficiently conducted in
14accordance with the intent and purpose of this chapter and that
15they include representatives of the financial and business
16community, as well as the economically disadvantaged.
17(D) A determination by the program manager that there is
18significant need for a new corporation.
19(3) Have the accounts of each corporation formed under this
20chapter audited as of the close of business on June 30 of each year.begin insert end insert
21begin insertMaterial audit exceptions that are not corrected by the corporation
22within a reasonable period of time may result in the suspension
23 or termination of the corporation pursuant to Section 63089.3 of
24the Government Code.end insert
25(4) Have the portfolio of each corporation audited a minimum
26of once a year. Material audit exceptions that are not corrected by
27the corporation within a reasonable period of time may result in
28the suspensionbegin insert or terminationend insert of the corporation pursuant to
29Section 63089.3 of the Government Code.
30(5) Review reports from the Department of Business Oversight
31and inform corporations as to what corrective action is required.
32(6) Examine, or cause to be examined, at any reasonable time,
33all books, records, and documents of every kind, and the physical
34properties of a corporation. The inspection shall include the right
35to make copies, extracts, and search records.
36(b) The program manager may attend and participate at
37corporation meetings. The program manager, or his or her designee,
38shall be an ex officio, nonvoting representative on the board of
39directors and loan committees of each corporation. The program
40manager shall meetbegin insert through telecommunication or in personend insert with
P7 1the board of directors of each corporation at least once each fiscal
2year, commencing January 1, 2014.
(a) The California Small Business Board is hereby
4continued and created as an advisory board to the California
5Infrastructure and Economic Development Bank Board, the
6executive director, and the program manager. Thebegin insert California Small
7Business Board may also advise the Governor and the Small
8Business Advocate regarding issues and programs affecting
9California’s small business community, including, but not limited
10to, business innovation and expansion, export finance, state
11procurement, management and technical assistance, venture
12capital, and financial assistance.end insert
13begin insert(b)end insertbegin insert end insertbegin insertTheend insert California Small Business Board consists of the
14following membership:
15(1) The Director of Finance or his or her designee.
16(2) The Director of the Office of the Small Business Advocate
17or his or her designee.
18(3) The Treasurer or his or her designee.
19(4) begin deleteTwo end deletebegin insertA representative from two different end insertcorporations
20selected by the corporations.
21(5) Two members appointed by the Governor, one of whom
22will serve as chair of thebegin delete boardend deletebegin insert California Small Business Boardend insert,
23who are actively involved in the California small business
24community.
25(6) Two persons actively involved in the business or agricultural
26communities, one appointed by the Speaker of the Assembly and
27one appointed by the Senate Committee on Rules.
28(7) Two Members of the Legislature, or their designees, one
29appointed by the Speaker of the Assembly and one appointed by
30the Senate Committee on Rules, so long as it does not conflict with
31the duties of their duties as legislators.
33begin insert(c)end insert The California Small Business Board shallbegin delete do each of the
34following:end deletebegin insert advise the program manager on matters regarding this
35chapter and Chapter 6 (commencing with Section 63088) of
36Division 1 of Title 6.7 of the Government Code.end insert
37(1) Advise the program manager on matters regarding this part
38and Chapter 6 (commencing with Section 63088) of Division 1 of
39Title 6.7 of the Government Code.
P8 1(2) Approve new corporations recommended by the program
2manager, based on an examination of each of the following:
3(A) Review of the articles of incorporation and bylaws of the
4corporation to determine whether they contain the provisions
5required by this chapter and conform with the regulations adopted
6pursuant to this part.
7(B) Determination as to whether the legislative intent expressed
8in Section 14002 will be served by the proposed corporation.
9(C) Determination as to whether the responsibility, character,
11corporation are able to command the confidence of the state and
12to warrant the belief that the business of the proposed corporation
13will be honestly and efficiently conducted in accordance with the
14intent and purpose of this chapter and that they include
15representatives of the financial and business community, as well
16as the economically disadvantaged.
18begin insert(d)end insert The public members of thebegin delete boardend deletebegin insert California Small Business
19Boardend insert, at the discretion of the bank board, may be reimbursed per
20diem and travel expenses pursuant to state law.
begin insert14004.2.end insert
The bank board shall approve new corporations
22recommended by the program manager, based on an examination
23of each of the following:
24(a) Review of the articles of incorporation and bylaws of the
25corporation to determine whether they contain the provisions
26required by this chapter and conform with the directives and
27requirements adopted by the bank board pursuant to this chapter.
28(b) Determination as to whether the legislative intent expressed
29in Section 14001 will be served by the proposed corporation.
30(c) Determination as to whether the responsibility, character,
31and general fitness of the individuals who will manage the
32corporation are able to command the confidence of the state and
33to warrant the belief that the business of the proposed corporation
34will be honestly and efficiently conducted in accordance with the
35intent and purpose of this chapter and that they include
36representatives of the financial and business community, as well
37as the economically disadvantaged.
38(d) Determination of the program manager that there is
39significant need for a new corporation.
P9 1Article 4. New Corporations
Upon approval by thebegin insert bankend insert board to become a
4corporation, an entity shall adopt or amend its articles of
5incorporation to comply with the following:
6(a) The name of the corporation shall include the words “small
7business financial development corporation,” except for those
8corporations formed pursuant to this chapter prior to 2002, which
9may also be called “small business development corporations,” or
10those formed prior to 1985, which may also be called “rural or
11urban development corporations.”
12(b) The purposes for which the corporation is formed, which
13shall be those specified in Section 14001. This requirement shall
14not be deemed to preclude a statement of powers.
15(c) A geographical description of the corporation’s primary
16service area.
17(d) The name and addresses of seven or more persons who are
18to act in the capacity of directors until the selection of their
19successors.
20(e) That the corporation is organized pursuant to the California
21Small Business Financial Development Corporation Law.
If thebegin delete board determines that the facts disclosed by the
23investigation provided by Section 14004 are true and finds that
24the proposed incorporation meets all the requirements of this
25chapter, the program manager shallend deletebegin insert bank boardend insertbegin insert concurs with the
26findings of the program manager pursuant to Section 14004, the
27bank board shall direct the program manager toend insert approve the
28articles of incorporation and endorse the approval thereon and
29forward the same to the Secretary of State for his or her approval
30and filing. Likewise, the program manager shall review all
31amendments to the articlesbegin insert of incorporationend insert to ensure consistency
32with the purposes ofbegin delete the articleend deletebegin insert this chapterend insert.
(a) The corporation’s existence as a small business
34development corporation begins upon the filing of the articles with
35the Secretary of State and continues perpetually, unless otherwise
36expressly provided for by law.
37(b) If a corporation isbegin delete suspended, the corporation mayend deletebegin insert terminated
38from participation in all programs, in order toend insert continue its
39existence as a nonprofit corporation pursuant to the Nonprofit
40Public Benefit Corporation Law (Part 2 (commencing with Section
P10 15110) of Division 2 of Title 1 of the Corporations Code),begin delete butend deletebegin insert the
2corporation shall amend its articles of incorporation in accordance
3with Chapter 8 (commencing with Section 5180) of Part 2 of
4Division 2 of Title 1 to remove the provisions required by Section
514005, including an amendment to remove the words “small
6business financial development corporation,” “small business
7development corporation,” or “rural or urban development
8corporation,” as applicable, from the corporate name, andend insert shall
9no longer be registered with the Secretary of State as a small
10business financial development corporation. A corporation shall
11not enjoy any of the benefits of a small business financial
12development corporation following suspension.
(a) Any request for proposal for selection of a
14corporation shall be approved by the bank and require the winning
15bidder to adopt or amend its bylaws to include provisions governing
16the election and qualification of directors, the establishment and
17functions of loan committees of the corporation, and the method
18of selecting the representative of the corporation on the board.
19(b) The bylaws shall provide for removal of officers only by a
20two-thirds vote of the directors of the corporation.
begin insert(a)end insertbegin insert end insert Each corporation shall have provisions establishing
22a grievance procedure for employees, clients, or potential clients,
23to appeal a decision or obtain redress of an action done by the staff
24or loan committee of the corporation. The procedures shall be
25established in writing during the probationary period of a new
26corporation.
27(b) The bylaws of the corporation shall authorize the removal
28of officers only by a two-thirds vote of the directors of the
29corporation.
The program manager may authorize the establishment
31of a new corporation using a request for proposal process.
The Nonprofit Public Benefit Corporation Law (Part
332 (commencing with Section 5110) of Division 2 of this title)
34applies to corporations formed under this chapter, except as to
35matters otherwise provided for in this chapter.
For six months following the establishment of a
37corporation, commencing upon filing of the articles of
38incorporation with the Secretary of State, a corporation shall be
39on probation. While on probation, a corporation may be suspended
40if suspension is recommended by the program managerbegin insert and
P11 1affirmed by the executive directorend insert. This suspension is
2nonappealable and not subject to the procedures for suspension
3applicable to a corporation not on probation.
5Article 5. Corporation Board
The corporate powers of a corporation shall be exercised
8by the board of directors.
begin deleteA request for proposal for selection of a corporation end delete
10begin insertThe bank shall enter into a contract with each corporation that end insert
11shall requirebegin delete the winning bidder to adopt or amend its bylaws to
12stateend delete that:
13(a) A person may not serve on a board of directors who is not
14a resident of, or person conducting business in, thebegin insert primaryend insert service
15area described in the articles of incorporation.
16(b) begin deleteEach end deletebegin insertA end insertboard of directors shall include representatives from
18(1) The financial community.
19(2) The business community.
20(3) The economically disadvantaged.
21(c) Not more than one employee of the corporation may serve
22on the board of directors at any one time.
23(d) A person who has a financial interest related to a matter over
24which the boardbegin insert of directorsend insert has authority may not make,
25participate in making, or in any way attempt to influence that
26matter.
If any director ceases to meet the qualifications
28established in Section 14014, he or she shall immediately vacate
29his or her position as a director andbegin delete suchend deletebegin insert theend insert position shall be
30deemed vacant.
If any vacancy occurs in the elective membership of
32the board of directors through death, resignation, or otherwise, the
33remaining directors shall elect a person representing the appropriate
34category to fill the vacancy for the unexpired term.
begin delete(a)end deletebegin delete end deletebegin deleteThe California Infrastructure and Economic
36Development Bank end deletebegin insertThe bank board end insertshallbegin insert direct the program
37manager toend insert establish new small business financial development
38corporations pursuant to thebegin delete procedures otherwise established by
39this chapter. In approving the request for proposal, the bank shall
40ensureend deletebegin insert directives and requirements. The directives and
P12 1requirements shall include steps to achieve a goal of ensuring thatend insert
2 small businesses in all areas of the state would have reasonable
3access to the financialbegin delete programs inend deletebegin insert products authorized by Chapter
46 (commencing with Section 63088) of Division 1 of Title 6.7 of
5the Government Code forend insert which they are eligible.begin delete Establishment
6of a new corporation is dependent upon sufficient funding being
7available.end delete
8(b) Additional corporations have been proposed in the following
9areas:
10(1) San Jose.
11(2) Santa Ana.
12(3) San Fernando Valley.
13(4) Ontario.
14(c) Upon an appropriation in the annual Budget Act for this
15purpose, the California Infrastructure and Economic Development
16Bank shall approve the issuance of a request for a proposal to
17establish a small business financial development corporation in
18southeast Los Angeles.
19(d) In furtherance of the purposes of this chapter, up to one-half
20of the trust funds may be used to guarantee loans utilized to
21establish a Business and Industrial Development Corporation
22(BIDCO) under Division 15 (commencing with Section 31000)
23of the Financial Code.
25Article 6. Corporations, Miscellaneous
Every corporation shall provide for, and maintain a
28central staff to perform, all administrative requirements of the
29corporation, including all those functions required of a corporation
30by thebegin delete directorend deletebegin insert contract and this chapterend insert.
Reasonable costs incurred by a corporation in the
32creation and maintenance of a central staff shall be paid to the
33corporation from state funds, including a portion of the interest
34earned on the expansion fund and the corporation’s trust fund
35account, if the corporation has a trust fund account, otherwise, on
36the expansion fund.
A corporation shall report to the program manager, or
38his or her designated representative, all statistical and other reports
39required by thisbegin delete chapter,end deletebegin insert chapter and Chapter 6 (commencing with
40Section 63088) of Division 1 of Title 6.7 of the Government Code,
P13 1includingend insert responses to audit reports, budget requirements, and
2other information relating to the establishment, monitoring, and
3suspensionbegin insert or terminationend insert of a corporation.
A corporation shall make a report to the program
5manager, asbegin delete of the close of business on June 30 of each year,
6describing the corporation’s activities and any additional
7information requested by the program manager, on or before
8August 1 of each yearend deletebegin insert required byend insertbegin insert Chapter 6 (commencing with
9Section 63088) of Division 1 of Title 6.7 of the Government Codeend insert.
11Article 7. Conflict of Interest
It shall be unlawful forbegin insert a member of the bank board or
14forend insert the executive director, program manager, or any person who
15is an officer, director,begin insert contractor,end insert or employee of a corporation,
16or who is a member of a loan committee, or who is an employee
17of the California Infrastructure and Economic Development Bank
18to do any of the following:
19(a) Ask for, consent, or agree to receive, any commission,
20emolument, gratuity, money, property, or thing of value for his or
21her own use, benefit, or personal advantage, for procuring or
22endeavoring to procure for any person, partnership, joint venture,
23association, or corporation, any loan, guarantee, financial, or other
24assistance from any corporation.
25(b) Borrow money, property, or to benefit knowingly, directly
26or indirectly, from the use of the money, credit, or property of any
27corporation.
28(c) Make, maintain, or attempt to make or maintain, a deposit
29of the funds of a corporation with any other corporation or
30association on condition, or with the understanding, expressed or
31implied, that the corporation or association receiving the deposit
32shall pay any money or make a loan or advance, directly or
33indirectly, to any person, partnership, joint venture, association,
34or corporation, other than to a corporation formed under this
35chapter.
37forend insert the executive director, program manager, or any person who
38is an officer or director of a corporation, or who is an employee
39of the California Infrastructure and Economic Development Bank
40to purchase or receive, or to be otherwise interested in the purchase
P14 1or receipt, directly or indirectly, of any asset of a corporation,
2without paying to the corporation the fair market value of the asset
3at the time of the transaction.
Violation of any provision of this article shall constitute
5a felony.
begin insertSection 8684.2 of the end insertbegin insert Government Code end insertbegin insert is amended
7to read:end insert
9(1) To provide the Governor with appropriate emergency powers
10in order to enable utilization of available emergency funding to
11provide guarantees for interim loans to be made by lending
12institutions, in connection with relief provided for those persons
13affected by disasters or a state of emergency in affected areas
14during periods of disaster relief assistance, for the purpose of
15supplying interim financing to enable small businesses to continue
16operations pending receipt of federal disaster assistance.
17(2) That the Governor should utilize this authority to prevent
18business insolvencies and loss of employment in areas affected by
19these disasters.
20(b) In addition to the allocations authorized by Section 8683
21and the loan guarantee provisions of Sectionbegin delete 14030.1 of the
22Corporations Codeend deletebegin insert 63089.90end insert, the Governor may allocate funds
23made available for the purposes of this chapter, in connection with
24relief provided, in affected areas during the period of federal
25disaster relief, to the Small Business Expansion Fund for use by
26thebegin delete Office of Small Businessend deletebegin insert California Infrastructure and
27Economic Development Bankend insert, pursuant to Chapter 1 (commencing
28with Section 14000) of Part 5 of Division 3 of Title 1 of the
29Corporations Codebegin insert and Chapter 6 (commencing with Section
3063088) of Division 1 of Title 6.7 of this codeend insert, to provide guarantees
31for low-interest interim loans to be made by lending institutions
32for the purpose of providing interim financing to enable small
33businesses that have suffered actual physical damage or significant
34economic losses, as a result of the disaster or state of emergency
35for which funding under this section is made available, to continue
36or resume operations pending receipt of loans made or guaranteed
37by the federal Small Business Administration. The maximum
38amount of any loan guarantee funded under this paragraph shall
39begin insert be limited by the directives and requirements and shallend insert not exceed
40two hundred thousand dollars ($200,000). Each loan guarantee
P15 1shall not exceed 95 percent of the loan amount, except that a loan
2guarantee may be for 100 percent of the loan amount if the
3applicant can demonstrate that access to business records pertinent
4to the loan application has been precluded by official action
5prohibiting necessary reentry into the affected business premises
6 or that those business records pertinent to the loan application have
7been destroyed. The term of the loan shall be determined by the
8lending institution providing the loan or shall be made payable on
9the date the proceeds of a loan made or guaranteed by the federal
10Small Business Administration with respect to the same damage
11or loss are made available to the borrower, whichever event first
12occurs.
13(c) Loan guarantees for which the initial 12-month term has
14expired and for which an application for disaster assistance funding
15from the federal Small Business Administration is still pending
16may be extended until the Small Business Administration has
17 reached a final decision on the application. Applications for interim
18loans shall be processed in an expeditious manner. Wherever
19possible, lending institutions shall fund nonconstruction loans
20within 60 calendar days of application. Loan guarantees for loans
21that have been denied funding by the federal Small Business
22Administration, may be extended by the financial institution
23provided that the loan is for no longer than a maximum of seven
24years, if the business demonstrates the ability to repay the loan
25with an extended loan term, and a new credit analysis is provided.
26All loans extended under this provision shall be repaid in
27installments of principal and interest, and be fully amortized over
28the term of the loan. Nothing in this section shall preclude the
29lender from charging reasonable administrative fees in connection
30with the loan.
31(d) Allocations pursuant to this section shall, for purposes of
32all provisions of law, be deemed to be for extraordinary emergency
33or disaster response operation costs, as provided in Section 8690.6,
34incurred by state employees assigned to work on the financial
35development corporation program.
36(e) Thebegin delete Business, Transportation and Housing Agencyend delete
37begin insert California Infrastructure and Economic Development Bankend insert may
38adoptbegin delete regulationsend deletebegin insert directives and requirementsend insert to implement the
39loan guarantee program authorized by this section.begin delete The agency
40may adopt these regulations as emergency regulations in
P16 1accordance with Chapter 3.5 (commencing with Section 11340)
2of Part 1 of Division 3, and for purposes of that chapter, including
3Section 11349.6, the adoption of the regulations shall be considered
4by the Office of Administrative Law to be necessary for the
5immediate preservation of the public peace, health and safety, and
6general welfare. Notwithstanding subdivision (e) of Section
711346.1, the regulations shall be repealed within 180 days after
8their effective date unless the agency complies with Chapter 3.5
9(commencing with Section 11340) of Part 1 of Division 3, as
10provided in subdivision (e) of Section 11346.1.end delete
11(f) begin deleteWithin 60 days of the conclusion of the period for
12guaranteeing loans under any small business disaster loan guarantee
13program conducted for a disaster end deletebegin insertAs long as there are any
14outstanding small business disaster loan guarantees, end insertas authorized
15by Section 8684.2begin delete, or Section 14075 of the Corporations Codeend deletebegin insert or
1663089.90end insert, thebegin delete agencyend deletebegin insert bankend insert shall provide a report to the Legislature
17on loan guarantees approved and rejected by gender, ethnic group,
18type of business and location, and each participating loan
19institution.begin insert The report may be combined with the report required
20in Section 63089.98.end insert
22begin insertSEC. 4.end insert
Chapter 6 (commencing with Section 63088) is added
23to Division 1 of Title 6.7 of the Government Code , to read:
25Chapter 6. Small Business Financial Assistance Act of
28Article 1. Introduction
begin insert(a)end insertbegin insert end insert This chapter shall be known, and may be cited, as
31the Small Business Financial Assistance Act of 2013.
32(b) Notwithstanding any other provision of this division, this
33chapter shall not apply to any other activities, powers, and duties
34of the bank under any of the other chapters of this division.
36(a) Small businesses form the core of the California economy
37and that it is in the interest of the state to increase opportunities
38for entrepreneurs, the self-employed, and microbusiness and small
39business owners to have better access to capital and other technical
40resources.
P17 1(b) Unemployment in California is a matter of statewide concern
2requiring concerted public and private action to develop
3employment opportunities for the disadvantaged, unemployed
4persons, veterans, and youth.
5(c) It is necessary to direct additional capital, general
6management assistance, business education, and other resources
7to encourage the development of small business opportunities,
8particularly for minorities, women, and disabled persons, to
9alleviate unemployment.
11Article 2. Definitions
14in this section shall govern the construction of this chapter.begin insert The
15definitions provided in this section shall only apply to this chapter
16and not to any other chapter of this division.end insert
17(a) “Bank” means the California Infrastructure and Economic
18Development Bank.
19(b) “Bank board” means the board of directors of the California
20Infrastructure and Economic Development Bank.
21(c) “Board” means the California Small Business Board.
22(c) “Board of directors” means the board of directors of a
23corporation.
24(d) “California Small Business Finance Center” means the
25governmental unit with the administrative responsibility for
26programs authorized pursuant to Section 63088.5 and this chapter.
28begin insert(e)end insert “Corporation” means any nonprofit California small business
29financial development corporation created pursuant to Chapter 1
30(commencing with Section 14000) of Part 5 of Division 3 of Title
311 of the Corporations Codebegin insert, or pursuant to Chapter 1 (commencing
32with Section 32000) of Division 15.5 of the Financial Codeend insert.
33(f) “Directives and requirements” means a document adopted
34by the bank board setting forth policy direction as well as key rules
35governing a particular subject area.
37begin insert(g)end insert “Employment incentive loan” means a loan to a qualified
38business or to a business located within an enterprise zone, as
39defined in subdivision (d) of Section 7072.
P18 1begin insert(h)end insert “Executive director” means the executive director of the
2begin insert Californiaend insert Infrastructure and Economic Development Bank.
4begin insert(i)end insert “Expansion fund” means the California Small Business
5Expansion Fund.
7begin insert(j)end insert “Financial company” means banking organizations, including
8national banks and trust companies, savings and loan associations,
9certified community development financial institutions,
10begin delete microlenders,end deletebegin insert microbusiness lenders,end insert state insurance companies,
11mutual insurance companies, and other public and private banking,
12lending, retirement, and insurance organizations.
14begin insert(k)end insert “Financial institution” means regulated banking
15organizations, including national banks and trust companies
16authorized to conduct business in California and state-chartered
17commercial banks, trust companies, credit unions, and savings and
18loan associations.
19(l) “Financial product” means the type of financial assistance
20described in Section 63088.5.
21(j)
22begin insert(m)end insert “Loan committee” means a committee appointed by the
23board of directors of a corporation to determine the course of action
24on a loan application pursuant to thisbegin delete titleend deletebegin insert chapterend insert.
25(k)
26begin insert(n)end insert “Program manager” means thebegin delete personend deletebegin insert manager of the
27California Small Business Finance Center asend insert designated to this
28title by the executive director of the California Infrastructure and
29Economic Development Bank.
30(l) Unless otherwise defined by the executive director by
31regulation, “small
32begin insert(o)end insertbegin insert end insertbegin insert“Smallend insert business loan” means a loan to a business defined
33as an eligible small business as set forth in Section 121.3-10 of
34Part 121 of Chapter 1 of Title 13 of the Code of Federal
35Regulations, including those businesses organized for agricultural
36purposes that create or retain employment as a result of the loan
37begin insert unless otherwise defined by the executive director by regulationend insert.
38begin delete From time to time, the executive directorend deletebegin insert Directives and
39requirementsend insert shall provide guidelines as to the preferred ratio of
P19 1jobs created or retained to total funds borrowed for guidance to
2the corporations.
4begin insert(p)end insert “Trust fund” means the moneys from the expansion fund
5that is held in trust by a financial institution or financial company.
6A trust fund is not a deposit of state funds and is not subject to the
7requirements of Section 16506.
9begin insert(q)end insert “Trustee” means the lending institution or financial company
10selected by thebegin delete officeend deletebegin insert bank boardend insert to hold and invest the trust fundsbegin insert,
11or selected by a predecessor agency to the bank, if applicableend insert. An
12agreement made pursuant to thisbegin delete titleend deletebegin insert chapterend insert and the trustee shall
13not be construed to be a deposit of state funds.
14(o)
15begin insert(r)end insert “Trust fund account” means an account within the trust fund
16that isbegin insert eitherend insert allocated to a particularbegin delete small business financial
17developmentend delete corporationbegin insert or shared by multiple corporationsend insert for
18the purpose of paying loan defaults and claims on bond guarantees
19begin delete for a specific small business financial development corporationend deletebegin insert or
20other financial products and program uses provided in this chapterend insert.
22Article 3. begin deleteProgram end deletePurpose
(a) There is within the Governor’s Office of Business
25and Economic Development the California Infrastructure and
26Economic Development Bank, which shall, among other things,
27begin insert administer the California Small Business Financial Center that
28administers programs to end insertassist businesses seeking new capital
29resources.
30(b) Pursuant to thisbegin delete titleend deletebegin insert chapter and Chapter 1 (commencing
31with Section 14000) of Part 5 of Title 1 of the Corporations Codeend insert,
32the bankbegin insert boardend insert maybegin insert continue programs funded by the Small
33Business Expansion Fund orend insert establish one or more programs
34administeredbegin delete regionallyend delete under contract with small business
35financial development corporations. Programs established pursuant
36to thisbegin delete titleend deletebegin insert chapter or Chapter 1 (commencing with Section 14000)
37of Part 5 of Title 1 of the Corporations Codeend insert may include the
38following types of financial products:
39(1) Loan guaranteesbegin insert and other credit enhancementsend insert.
40(2) Direct loansbegin insert and other debit instrumentsend insert.
P20 1(3) Disasterbegin delete assistance loans.end deletebegin insert loan guarantees.end insert
2(4) Surety bond guarantees.
3(c) In all of their state-funded programs, the corporations shall,
4to the extent practicable, be complementary to, and not competitive
5with, commercial lenders and other state and federal programs.
6(d) In carrying out this chapter thebegin insert program manager, the
7executive director, and theend insert bankbegin insert boardend insert may call on the California
8Small Business Board for advice and recommendations. All actions
9by the California Small Business Board are advisorybegin delete except where
10specifically assigned a duty and authorityend delete.
11(e) Thebegin insert Californiaend insert Small Business Board may also advise the
12begin delete Governor, the director,end deletebegin insert Governorend insert and the Small Business Advocate
13regarding issues and programs affecting California’s small business
14community, including, but not limited to, business innovation and
15expansion, export finance, state procurement, management and
16technical assistance, venture capital, and financial assistance.
To implement its responsibilities, a corporation shall
18undertakebegin delete aend delete programbegin insert activitiesend insert that shall include, but not be limited
19to, the following:
20(a) Outreach to low-resource small businesses and
21microbusinesses. The corporations located in rural areas shall give
22priority to low-resource farmers and rural and agriculturally related
23businesses.
24(b) Collaboration with other organizations and lenders to identify
25and assist those businesses that are creditworthy but face
26impediments to accessing conventional sources because of reasons,
27such as low equity, inadequate collateral, unacceptable legal
28structure (such as a co-op or nonprofit organization), management
29inadequacies, and language problems.
30(c) To the extent possible, bringing all possible financial
31resources (low-interest lenders, BIDCOs, MESBICs, other
32guarantors, etc.) to bear on the borrower’s problems.
33(d) Technical assistance to businesses receiving loans or
34guarantees that will maximize the probability of loan repayment.
35(e) Ongoing strategies for increasing program resources through
36private sector involvement and nonstate funds.
37(f) A program for collecting and liquidating defaulted loans so
38that the corporations can qualify to become full-service lenders
39under the Small Business Administration. Corporations located in
40rural areas shall, in addition, try to qualify for lender status under
P21 1the United States Department of Agriculture’s Rural Development
2and Farm Services Agency.
3(g) Become an agent for other financial institutions and financial
4companies.
6Article 4. Administrative Structure
begin deleteIf regulations have not already been adopted under end deletebegin insertThe
9bank board shall adopt directives and requirements concerning
10the implementation of this chapterend insertbegin insert and pursuant to end insertChapter 1
11(commencing with Section 14000) of Part 5 of Division 3 of Title
121 of the Corporations Codebegin insert. Any regulations adoptedend insertbegin insert end insertbegin insertpursuant to
13Chapter 1 (commencing with Section 14000) of Part 5 ofend insertbegin insert end insertbegin insertDivision
143 of Title 1 of the Corporations Codeend insert, as that chapter read on
15January 1, 2013, begin delete then the bank shall adopt regulations concerning
16the implementation of this title, Chapter 1 (commencing with
17Section 14000) of Part 5 of Division 3 of Title 1 of the
18Corporations Code, and direct lending as emergency regulations
19in accordance with Chapter 3.5 (commencing with Section 11340)
20of Part 1 of Division 3 of Title 2. The adoption of these regulations
21is an emergency and necessary for the immediate preservation of
22the public peace, health and safety, or general welfare within the
23meaning of subdivision (b) of Section 11346.1. Notwithstanding
24subdivision (e) of Section 11346.1, the regulations shall not remain
25in effect for more than 180 days unless the office complies with
26all provisions of Chapter 3.5 (commencing with Section 11340)
27of Part 1 of Division 3 of Title 2, as required by subdivision (e) of
28Section 11346.1. This section also applies to any direct loan
29program administered by the bankend delete begin insert shall remain in effect until the
30bank board adopts directives and requirements relating to the
31specific policy or activity, but in no case beyond June 1, 2015end insert.
The program managerbegin insert acting under the guidance of
33the executive directorend insert shall do all of the following:
34(a) Administer this chapter.
35(b) begin deleteContract for services end deletebegin insertEnter into a contract between the bank
36and each corporation for services to be provided by the
37corporations for one or more programs end insertunder this chapter and
38Chapter 1 (commencing with Section 14000) of Part 5 of Division
393 of Title 1 of the Corporations Code.
P22 1(c) In accordance with available resources,begin delete useend deletebegin insert end insertbegin insertallow the use ofend insert
2 branch offices for the purposes of making these programs under
3this chapter accessible to all areas of the state.
4(d) Require each corporation to submit an annual written plan
5of operation.
6(e) Authorize the distribution, transfer, and withholding of
7moneys in the expansion fund and trust funds.
8(f) Authorize the investment of expansion and trust fund moneys.
9(g) Oversee the operations of one or more programs authorized
10pursuant to thisbegin delete titleend deletebegin insert chapterend insert.
11(h) Approve, suspend, or terminate a corporation’s ability to
12participate in a program under this title.
13(h) Act as liaison between corporations, other state and federal
14agencies, lenders, and the Legislature.
15(i) Act as secretary to the California Small Business Board, and
16attend meetings of the California Small Business Board and the
17bank board.
18(j) Attend and participate at corporation meetings. The program
19manager or his or her designee shall be an ex officio, nonvoting
20representative on the board of directors and loan committees of
21each corporation. The program manager shall confer with the
22board of directors of each corporation as appropriate and
23necessary to carry out his or her duties, but in no case shall the
24program manager confer less than once each fiscal year.
25(k) Assist corporations in applying for public and private
26funding opportunities, and in obtaining program support from the
27business community.
The use of state funds paid out to the trust fund and
29the return on those funds from investment pursuant to Section
3063089.56 is conditional pursuant to Sections 63089.3 and 63089.57.
31Each corporation shall enter into a written signed agreement with
32thebegin delete state at the beginning of each fiscal yearend deletebegin insert bank to provide
33program management services for one or more programs
34authorized under this chapter and Chapter 1 (commencing with
35Section 14000) of Part 5 of Division 3 of Title 1 of the Corporations
36Code. Agreements with the corporations entered into pursuant to
37this chapter are exempt from the requirements of Sections 10295,
38and 10335 to 10381, inclusive, of the Public Contracts Codeend insert. The
39agreement shallbegin insert, at a minimum, end insert govern the activities in which the
40begin delete corporations engageend deletebegin insert corporation engagesend insert, the investment of state
P23 1funds and its return, and the budgeted administrative expenses the
2corporations may incur. In the event thebegin delete stateend deletebegin insert program managerend insert
3 and corporation do not reach an agreement, or thebegin delete stateend deletebegin insert program
4manager end insert finds the corporation has violated the terms of an active
5agreement, thebegin delete stateend deletebegin insert program managerend insert may take any action under
6Section 63089.3 or 63089.57, or any other action as appropriate.
7In the event thebegin delete	stateend deletebegin insert program managerend insert and corporation do not
8reach agreement or thebegin delete stateend deletebegin insert program managerend insert finds the
9corporation has violated the terms of an active agreement, the
10corporation shall have no authority to withdraw or encumber the
11begin insert moneys in the end insert trust fund or the return of those funds by the
12issuance of guarantees,begin insert commitments for other financial products,
13or end insert by incurring expenses against the fund and its return in any
14manner whatsoever, and thebegin delete stateend deletebegin insert program managerend insert may take any
15action under Section 63089.3 or 63089.57, or any other action as
16appropriate. Any guarantee or other encumbrance made by the
17corporation in violation of this section shall be null and void, and
18begin delete neitherend delete the statebegin delete norend deletebegin insert, the bank, the expansion fund, orend insert the trust fund
19willbegin insert notend insert be liable therefor.
(a) Upon a finding by the program manager that
21irreparable harm may occur if guarantee or direct loan authority
22is not temporarily withdrawn from a corporation, the program
23manager may temporarily withdraw guarantee or direct loan, or
24both, authority from a corporation. The notice of temporary
25withdrawal sent to the corporation shall specify the reasons for the
26action.
27(1) As used in this section, “guarantee and direct loan authority”
28means the authority to make or guarantee any loan that encumbers
29funds in a trust fund account, any account or subaccount under the
30direct control of the office or other state entity, or the expansion
31fund.
32(2) The program manager shall make one of the determinations
33specified in subdivision (c) within 30 days of the effective date of
34the temporary withdrawal, unless the corporation and the executive
35director mutually agree to an extension. The corporation shall have
36the opportunity to submit written material to the program manager
37addressing the items stated in the temporary withdrawal notice. If
38the program manager does not make any determinations within
3930 days, the temporary withdrawal shall be negated. The
40corporation’s yearly contract shall remain in effect during the
P24 1period of temporary withdrawal, and the corporation shall continue
2to receive reimbursement of necessary operating expenses.
3(b) Failure of a corporation to substantially comply with the
4following may result in the suspension of a corporation:
5(1) Regulations implementing the California Small Business
6Development Corporation Law (Chapter 1 (commencing with
7Section 14000) of Part 5 of Division 3 of Title 1 of the
8Corporations Code).
9(2) Fiscal and portfolio requirements, as contained in the fiscal
10and portfolio audits specified in Section 14004 of the Corporations
12(3) Milestones and scope of work as contained in the annual
13contract between the corporation and the office.
14(c) Pursuant to subdivision (a) or (b), the program manager may
15do the following:
16(1) Terminate the temporary withdrawal.
17(2) Terminate the temporary withdrawal subject to the
18corporation’s adoption of a specified remedial action plan.
19(3) Temporarily withdraw, or continue to withdraw, guarantee
20 authority until a specified time. This determination by the program
21manager shall require a finding that the corporation has failed to
22comply with the California Small Business Development
23Corporation Law (Chapter 1 (commencing with Section 14000)
24of Part 5 of Division 3 of Title 1 of the Corporations Code).
25(4) Suspend the corporation.
26(5) Suspend the corporation, with suspension stayed until the
27corporation provides a remedial action plan to the executive
28director, and the executive director decides whether to repeal or
29implement the stayed suspension.
30(d) The determinations contained in paragraphs (4) and (5) of
31subdivision (c) require a finding that irreparable harm will occur
32unless the corporation is suspended.
33(e) In considering a determination regarding the recommended
34suspension and possible remedial action plans, the program
35manager shall consider, along with other criteria as specified in
36subdivision (b), the corporation’s history and past performance.
37(f) Upon suspension of a corporation, the program manager
38shall transfer all funds, whether encumbered or not, in the trust
39fund account of the suspended corporation into either the expansion
40fund or temporarily transfer the funds to another corporation.
P25 1(g) If the program manager decides to take any action against
2the corporation pursuant to paragraphs (2) to (5), inclusive, of
3subdivision (c), the corporation shall be notified of the action 10
4days before the effective date of the action. The corporation shall
5have the right to appeal the program manager’s decision to the
6director of the California Small Business Board within that 10-day
7period by sending notice to the executive director. Once the
8executive director receives notice that the action is being appealed,
9the program manager’s action shall be stayed except for temporary
10withdrawal of guarantee authority. Upon receipt of the notice from
11the corporation, the executive director shall notify the small
12business board within three working days. The California Small
13Business Board shall consider and make a final determination on
14the appeal within 30 days of receiving notice. The small business
15board may elect to take any of the actions listed in subdivision (h).
16The temporary withdrawal of corporation guarantee authority shall
17remain in effect until the executive director small business board
18 issues a decision.
19(h) Pursuant to subdivision (g), the small business board may
20do any of the following:
21(1) Terminate the action taken by the program manager.
22(2) Modify the action taken by the program manager subject to
23the adoption by the corporation of a specified remedial action plan.
24(3) Affirm the action taken by the program manager.
25(i) Following suspension, the corporation may continue its
26existence as a nonprofit corporation pursuant to the Nonprofit
27Public Benefit Corporation Law (Part 2 (commencing with Section
285110) of Division 2 of Title 1 of the Corporations Code), but shall
29no longer be registered with the Secretary of State as a small
30business financial development corporation. A corporation shall
31not enjoy any of the benefits of a small business financial
32development corporation following suspension.
33(j) The funds in the trust fund account of a corporation under
34temporary withdrawal shall be transferred to the expansion fund.
35Upon termination of the temporary withdrawal, unless the
36termination is caused by suspension, the funds of the corporation
37that were transferred to the expansion fund from the trust fund
38account shall be returned to the corporation’s trust fund account,
39notwithstanding Section 63089.53. While the funds of a
40corporation’s trust fund account reside in the expansion fund, use
P26 1of the principal on the funds shall be governed by the implementing
2regulations specifying use of funds in the expansion fund. Interest
3on the funds moved from a corporation’s trust fund account upon
4temporary withdrawal shall be limited to payment of the
5corporation’s administrative expenses, as contained in the contract
6between the corporation and the state pursuant to this title.
begin insert63089.3.end insert
(a) The program manager may temporarily suspend
8the guarantee authority or other financial product authority of a
9corporation if in the determination of the program manager a
10corporation has substantially failed to comply with any of the
11requirements in subdivision (b) causing irreparable harm to the
12program, the corporation’s guarantee or any other financial
13products authority. The notice of temporary suspension sent to the
14corporation shall specify the reasons for the action.
15(1) As used in this section, “guarantee or any other financial
16products authority” means the authority to make or guarantee or
17administer any other financial products that encumber funds in a
18trust fund account, any account or subaccount under the direct
19control of the bank or other state entity, or the expansion fund.
20(2) The program manager shall make one of the determinations
21specified in subdivision (b) within 30 days of the effective date of
22the temporary suspension, unless the corporation and the program
23manager mutually agree to an extension. The corporation shall
24have the opportunity to submit written material to the program
25manager addressing the items stated in the temporary suspension
26notice. If the program manager does not make any determinations
27within 30 days, the temporary suspension shall be reversed. The
28corporation’s yearly contract shall remain in effect during the
29period of temporary suspension, and the corporation shall continue
30to receive reimbursement of necessary operating expenses.
31(b) Failure of a corporation to substantially comply with the
32following may result in the suspension or termination of a
33corporation:
34(1) Directives and requirements adopted by the bank board, for
35implementing the California Small Business Development
36Corporation Law (Chapter 1 (commencing with Section 14000)
37of Part 5 of Division 3 of Title 1 of the Corporations Code) and
38this chapter.
39(2) Failure to meet any fiscal, audit, or portfolio requirement,
40as contained in the directives and requirements.
P27 1(3) Failure to significantly meet any milestones or scope of work
2as contained in the performance contract between the corporation
3and the bank.
4(4) Any other action in the opinion of the program manager
5that causes irreparable harm to the corporation, the expansion
6fund, or the trust fund.
7(c) Pursuant to subdivisions (a) and (b), the program manager
8may take any of the following actions:
9(1) Terminate the temporary suspension.
10(2) Terminate the temporary suspension subject to the
11corporation’s adoption of a specified remedial action plan
12approved by the program manager.
13(3) Continue the temporary suspension of guarantee and other
14financial product authority until a specified time.
15(4) Terminate the corporation’s authority to administer specified
16loan guarantees or other financial products.
17(5) Terminate the corporation’s authority to remain a
18corporation authorized pursuant to the California Small Business
19Development Corporation Law (Chapter 1 (commencing with
20section 14000) of Part 5 of Division 3 of Title 1 of the Corporations
21Code) and this chapter.
22(d) The program manager shall make one of the determinations
23specified in subdivision (c) within 30 days of the effective date of
24the temporary suspension notice, unless the corporation and the
25program manager mutually agree to an extension. If the program
26manager does not make any determinations within 30 days, the
27temporary suspension shall be negated. The corporation’s yearly
28contract shall remain in effect during the period of temporary
29suspension, and the corporation shall continue to receive
30reimbursement of necessary operating expenses.
31(e) The actions contained in paragraphs (3) to (5), inclusive,
32of subdivision (c) require a finding that irreparable harm will
33occur unless the action is taken, and a finding that the corporation
34has failed to comply with the California Small Business
35Development Corporation Law (Chapter 1 (commencing with
36Section 14000) of Part 5 of Division 3 of Title 1 of the Corporations
37Code) and this chapter.
38(f) In considering any action specified in subdivision (c), the
39program manager shall consider, along with other criteria as
P28 1specified in subdivision (b), the corporation’s history and past
2performance.
3(g) If the program manager decides to take any action pursuant
4to paragraphs (3) to (5), inclusive, of subdivision (c), the program
5manager shall transfer all funds subject to the action, whether
6encumbered or not, in the trust fund account of the suspended or
7terminated corporation into either the expansion fund, or either
8permanently or temporarily transfer the funds to the trust fund
9account of another corporation, unless an appeal is received from
10the corporation pursuant to subdivision (h).
11(h) If the program manager intends to transfer funds as specified
12in paragraph (g), the corporation shall be notified of the funds
13transfer 10 days before the effective date of the transfer. The
14corporation shall have the right to appeal the program manager’s
15decision to the executive director within that 10-day period by
16sending written notice to the executive director. Once the executive
17director receives notice that the action is being appealed, the
18program manager’s funds transfer shall be stayed.
19(i) The corporation shall have the opportunity to submit written
20material to the executive director addressing the actions and
21findings stated in the program manager’s determination. The
22executive director shall consider and make a final determination
23on the appeal within 30 days of receiving the appeal notice from
24the corporation, or such longer time as agreed to by the executive
25director and the corporation. The executive director may elect to
26take any of the actions listed in subdivision (j). The action of the
27program manager shall remain in effect until the executive director
28issues a decision. The corporation’s performance contract shall
29remain in effect during the appeal period, and the corporation
30shall continue to receive reimbursement of necessary operating
31expenses.
32(j) Pursuant to subdivision (i), the executive director may
33independently take action or seek the advice and recommendation
34of the small business board prior to taking any of the following
35actions:
36(1) Rescind the action taken by the program manager.
37(2) Modify the action taken by the program manager subject to
38the adoption by the corporation of a specified remedial action plan
39approved by the executive director.
40(3) Affirm the action taken by the program manager.
P29 1(k) Following the executive director’s concurrence any action
2pursuant to paragraphs (3) to (5), inclusive, of subdivision (c), the
3program manager shall transfer all funds subject to the action,
4whether encumbered or not, in the trust fund account of the
5suspended or terminated corporation into either the expansion
6fund, or either permanently or temporarily transfer the funds to
7the trust fund account of another corporation. The corporation
8shall be notified of the funds transfer 10 days before the effective
9date of the transfer. The corporation shall have the right to appeal
10the executive director’s decision to the bank board within that
1110-day period by sending written notice to the chair of the bank
12board. Once the chair of the bank board receives notice that the
13executive director’s determination is being appealed, the program
14manager’s funds transfer shall be stayed.
15(l) The corporation shall have the opportunity to submit written
16material to the bank board addressing the actions and findings
17stated in the executive director’s determination. The bank board
18shall consider and make a final determination on the appeal within
1930 days of receiving the appeal notice from the corporation, or
20such longer time as agreed to by the chair of the bank board and
21the corporation. The action of the executive director shall remain
22in effect until the bank board issues a decision. The corporation’s
23performance contract shall remain in effect during the appeal
24period, and the corporation shall continue to receive
25reimbursement of necessary operating expenses.
26(m) Pursuant to subdivision (l), the bank board may
27independently take action or seek the advice and recommendation
28of the California Small Business Board prior to taking any of the
29following actions:
30(1) Rescind the action taken by the executive director.
31(2) Modify the action taken by the executive director subject to
32the adoption by the corporation of a specified remedial action plan
33acceptable to the executive director.
34(3) Affirm the action taken by the executive director. The
35decision of the bank board is final.
36(n) Following the bank board’s concurrence with the executive
37director’s determination consistent with any action pursuant to
38paragraphs (3) to (5), inclusive, of subdivision (c), transfer all
39funds subject to the action, whether encumbered or not, in the trust
40fund account of the suspended or terminated corporation into
P30 1either the expansion fund, or either permanently or temporarily
2transfer the funds to the trust fund account of another corporation.
3The corporation shall be notified of the funds transfer 10 days
4before the effective date of the transfer.
5(o) Notwithstanding Section 63089.53, in the event a final
6determination was made by the program manager, the executive
7director or the bank board, whichever is applicable, to temporarily
8transfer the funds of the corporation to the expansion fund or to
9the trust fund account of another corporation, upon compliance
10with all requirements of that final determination as determined by
11the executive director, the transferred funds shall be returned to
12the corporations trust fund account. While the funds of a
13corporation’s trust fund account reside in the expansion fund, use
14of the principal on the funds shall be governed by the implementing
15directives and requirements specifying use of funds in the
16expansion fund. Interest on the funds moved from a corporation’s
17trust fund account upon temporary withdrawal shall be limited to
18 payment of the corporation’s administrative expenses, as contained
19in the contract between the corporation and the bank pursuant to
20this chapter.
21(p) Following a final determination of termination of all
22activities of an active corporation, in order to continue its existence
23as a nonprofit corporation pursuant to the Nonprofit Public Benefit
24Corporation Law (Part 2 (commencing with Section 5110) of
25Division 2 of Title 1 of the Corporations Code), the corporation
26must amend its articles of incorporation in accordance with
27Chapter 8 of Part 2 of Division 2 of the Corporations Code to
28remove the provisions required by Section 14005 of the
29Corporations Code, including an amendment to remove the words
30“small business financial development corporation,” “small
31business development corporation,” or “rural or urban
32development corporation,” as applicable, from the corporate name
33and shall no longer be registered with the Secretary of State as a
34small business financial development corporation. A corporation
35shall not enjoy any of the benefits of a small business financial
36development corporation following suspension.
begin insert63089.4.end insert
38(a) Approve new corporations recommended by the program
39manager.
P31 1(b) Enter into contracts with corporations for program
2management services.
3(c) Select a financial institution or financial company to act as
4trustee of the trust fund as specified in this chapter.
5(d) Invest expansion fund and trust fund moneys as specified in
6this chapter.
7(e) Affirm, modify, or rescind the determinations of the program
8manager and the executive director as specified in this chapter.
9(f) Adopt directives and requirements as specified in this
10chapter.
11(g) Authorize new financial product programs pursuant to the
12provisions of this chapter.
14Article 5. Expansion Fundbegin insert and Trust Fundend insert
(a) There is hereby continued in existence in the State
17Treasury the California Small Business Expansion Fund. All or a
18portion of the funds in the expansion fund may be paid out, with
19the approval of the Department of Finance, to abegin delete lendingend deletebegin insert financialend insert
20 institution or financial company that willbegin insert establish a trust fund
21andend insert act as trustee of the funds.
22(b) The expansion fund and the trust fund shall be used to pay
23for defaulted loan guarantees issued pursuant to this title, surety
24bond losses, administrative costs of corporations, and those costs
25necessary to protect a real property interest in a defaulted loan or
26guarantee.
27(b) The expansion fund and the trust fund shall be used for the
28following purposes:
29(1) To pay defaulted loan guarantee or surety bond losses, or
30other financial product defaults or losses.
31(2) To fund direct loans and other debt instruments.
32(3) To pay administrative costs of corporations.
33(4) To pay state support and administrative costs.
34(5) To pay those costs necessary to protect a real property
35interest in a financial product default.
36(c) The expansion fund and trust fund are created solely for the
37purpose of receiving state, federal, or local government moneys,
38and other public or privatebegin delete moneyend deletebegin insert moneysend insert to make loans,
39guarantees, andbegin delete restricted investmentsend deletebegin insert other financial productsend insert
40 pursuant to thisbegin delete titleend deletebegin insert chapterend insert.
P32 1(d) One or more accountsbegin insert in the expansion fund and the trust
2fundend insert may be created by the program manager for corporations
3participating in one or more programs authorized under thisbegin delete titleend delete
4begin insert chapterend insert. Each account is a legally separate account, and shall not
5be used to satisfy loan begin deleteor surety bondend delete guarantees or otherbegin insert financial
6productend insert obligations of another corporationbegin insert except when the
7expansion fund or trust fund is shared by multiple corporationsend insert.
8(e) The amount of guarantee liability outstanding at any one
9time shall not exceed five times the amount of funds on deposit in
10the expansion fund plus any receivables due from funds loaned
11from the expansion fund to another fund in state government as
12directed by the Department of Finance pursuant to a statute enacted
13by the Legislature, including each of the trust fund accounts within
14the trust fund.
15(f) This section shall remain in effect only until January 1, 2018,
begin insert63089.5.end insert
19Treasury the California Small Business Expansion Fund. All or a
20portion of the funds in the expansion fund may be paid out, with
21the approval of the Department of Finance, to a financial
22institution or financial company that will establish a trust fund
23and act as trustee of the funds.
24(b) The expansion fund and the trust fund shall be used for the
25following purposes:
26(1) To pay defaulted loan guarantee or surety bond losses, or
27other financial product defaults or losses.
28(2) To fund direct loans and other debt instruments.
29(3) To pay administrative costs of corporations.
30(4) To pay state support and administrative costs.
31(5) To pay those costs necessary to protect a real property
32interest in a financial product default.
33(c) The expansion fund and trust fund are created solely for the
34purpose of receiving state, federal, or local government moneys,
35and other public or private moneys to make loans, guarantees,
36and other financial products pursuant to this chapter.
37(d) One or more accounts in the expansion fund and the trust
38fund may be created by the program manager for corporations
39participating in one or more programs authorized under this
40chapter. Each account is a legally separate account, and shall not
P33 1be used to satisfy loan guarantees or other financial product
2obligations of another corporation except when the expansion fund
3or trust fund is shared by multiple corporations.
4(e) The amount of guarantee liability outstanding at any one
5time shall not exceed four times the amount of funds on deposit in
6the expansion fund plus any receivables due from funds loaned
7from the expansion fund to another fund in state government as
8directed by the Department of Finance pursuant to a statute
9enacted by the Legislature, including each of the trust fund
10accounts within the trust fund.
11(f) This section shall become operative on January 1, 2018.
(a) All money deposited in the expansion fund is
13hereby continuously appropriated, without regard to fiscal years,
14for the purposes of thisbegin delete titleend deletebegin insert chapterend insert.
15(b) Except as specified in subdivisionbegin delete (a) of Section 63089.53,end delete
16begin insert (b) of Section 63089.54, end insert the statebegin insert or the bankend insert shall not be liable
17or obligated in any way beyond the state money that is allocated
18in the expansion fund from moneys from the General Fundbegin delete moneysend delete
19 appropriated for those purposes.
(a) The program manager at his or her discretion,
21with the approval of thebegin delete Director of Financeend deletebegin insert executive directorend insert,
22may request the trustee to invest thosebegin delete fundsend deletebegin insert moneysend insert in the trust
23fund in any of the securities described in Section 16430. Returns
24from these investments shall be deposited in the expansion fund
25and shall be used to support the programs of thisbegin delete titleend deletebegin insert chapterend insert.
26(b) Any investments made in securities described in Section
2716430 shall be governed by thebegin delete statement ofend delete investment policy
28begin delete prepared by the Treasurer pursuant to subdivision (a) of Section
2916481.2end deletebegin insert approved by the bank boardend insert.
(a) The statebegin insert Except as specified in subdivision (b)
31of Section 63089.54, the state or the bankend insert shall not be liable or
32obligated in any way beyond the money that is allocated and
33deposited in thebegin delete corporation’send delete trust fundbegin delete accountend deletebegin insert accountsend insert.
34(b) The program manager may reallocate funds held within a
35corporation’s trust fund account.
36(1) The program manager shall reallocate funds based on which
37corporation is most effectively using its guarantee funds. If funds
38are withdrawn from a less effective corporation as part of a
39reallocation, the program manager shall make that withdrawal only
40after giving consideration to that corporation’s fiscal solvency, its
P34 1ability to honor loan guarantee defaults, and its ability to maintain
2a viable presence within the region it serves. Reallocation of funds
3shall occur no more frequently than once per fiscal year. Any
4decision made by the program manager pursuant to this subdivision
5may be appealed to the bank board unless otherwise specified. The
6program manager has the authority to repeal or modify any decision
7to reallocate funds.
8(2) The program manager may authorize a corporation to exceed
9the leverage ratio specified in Section 63089.5 or subdivision (a)
10of Section 63089.66, or subdivision (c) of Section 14017 of the
11Corporations Code, pending the annual reallocation of funds
12pursuant to this section. However, no corporation shall be permitted
13to exceed an outstanding guarantee liability of more than five times
14its portion of funds on deposit in the expansion fund.
(a) There is hereby created in the State Treasury
16the Small Business Disaster Recovery Loan Loss Reserve Account,
17as part of the expansion fund. This account shall be used to pay
18forbegin delete unrecoveredend delete losses resulting from loan guarantees issued
19pursuant to subdivision (a) of Section 63089.90 or subdivision (b)
20of this section, and disaster loan guaranteesbegin insert and other credit
21enhancement defaultsend insert issued prior to the effective date of this
22section that are in default.
23(b) Any lending institution that issues abegin delete low-interestend delete loan that
24is guaranteed by resources in this account shall be fully reimbursed
25for the guaranteed portion of principal and interest that result from
26a loan or loans that are in default. If there are insufficient funds in
27this account to fully satisfy all claimants, the full faith of the
28resources in the General Fund are pledged to satisfy the obligations
29of this account. This account may only guarantee as much loan
30dollar value as is specifically authorized by the Director of Finance
31with the concurrence of the Governor. This account shall receive
32all moneys transferred pursuant to Section 63089.55, and any
33unencumbered balances transferred to the California Small
34Business Expansion Fund pursuant to Chapters 11 and 12 of the
35First Extraordinary Session of the Statutes of 1989, and Chapter
361525 of the Statutes of 1990, as of July 1, 1992.
37(c) The Governor may utilize this authority to prevent business
38insolvencies and loss of employment in an area affected by a state
39of emergency within the state and declared a disaster by the
40President of the United States, by the Administrator of the United
P35 1States Small Business Administration, or by the United States
2Secretary of Agriculture, or declared to be in a state of emergency
3by the Governor of California.
The Director of Finance, with the approval of the
5Governor, may transfer moneys in the Special Fund for Economic
6Uncertainties to the California Small Business Expansion Fund
7for use as authorized by the bank board, in an amount necessary
8to make loan guarantees pursuant tobegin delete this titleend deletebegin insert Section 8684.2 and
9this chapterend insert.
(a) The funds in the expansion fund shall be paid
11out to trust fund accounts by the Treasurer onbegin delete warrantsend deletebegin insert fundsend insert drawn
12by the Controller and requisitioned by thebegin delete executive directorend delete
13begin insert program managerend insert, pursuant to the purposes of thisbegin delete titleend deletebegin insert chapterend insert.
14 The program manager may transfer funds allocated from the
15expansion fund to accounts, established solely to receive the funds,
16inbegin delete lending institutionsend deletebegin insert financial institutions or financial companiesend insert
17 designated by thebegin delete officeend deletebegin insert bankend insert to act as trustee. Thebegin delete lending
18institutionsend deletebegin insert financial institutions or financial companiesend insert so
19designated shall be approved by the state for the receipt of state
20deposits. Interest earned on the trust fund accounts inbegin delete lending
21institutionsend deletebegin insert financial institutions or financial companies end insert may be
22utilized by the corporationsbegin insert or the bankend insert pursuant to the purposes
23of thisbegin delete titleend deletebegin insert chapterend insert.
24(b) The program manager may reallocate funds held within a
25corporation’s trust fund account.
26(1) The program manager shall reallocate funds based on which
27corporation is most effectively using its guarantee funds. If funds
28are withdrawn from a less effective corporation as part of a
29reallocation, the program manager shall make that withdrawal
30only after giving consideration to that corporation’s fiscal
31solvency, its ability to honor loan guarantee defaults, and its ability
32to maintain a viable presence within the region it serves.
33Reallocation of funds shall occur no more frequently than once
34per fiscal year. Any decision made by the program manager
35pursuant to this subdivision may be appealed to the executive
36director unless otherwise specified. The executive director has the
37authority to repeal or modify any decision to reallocate funds.
38(2) The program manager may authorize a corporation to
39exceed the leverage ratio specified in Section 63089.5 or
40subdivision (a) of Section 63089.62, pending the annual
P36 1reallocation of funds pursuant to this section. However, no
2corporation shall be permitted to exceed an outstanding guarantee
3liability of more than specified in subdivision (a) of Section
463089.62 after a reallocation is made.
6begin insert(c)end insert Except as specified in subdivisionbegin delete (d),end deletebegin insert (e),end insert the program
7manager shall allocate and transfer money to trust fund accounts
8based on performance-based criteria. The criteria shall include,
9but not be limited to, the following:
10(1) The default record of the corporation.
11(2) The number and amount of loans guaranteed by a
13(3) The number and amount of loans made by a corporation if
14state funds were used to make those loans.
15(4) The number and amount of surety bonds guaranteed by a
17(5) The number and amount of other financial product activity.
18(6) The number of jobs created or retained due to the financial
19product activity.
20(c) Any decision made by the executive director pursuant to
21subdivision (b) may be appealed to the director within 15 days of
22notice of the proposed action. The director may repeal or modify
23any reallocation and transfer decisions made by the executive
24director.
25(d) The criteria specified in subdivisionbegin delete (b)end deletebegin insert (c)end insert shall not apply
26to a corporation that has been in existence for five years or less.
27If not already adopted, thebegin delete officeend deletebegin insert bank boardend insert shall develop
28begin delete regulationsend deletebegin insert directives and requirementsend insert specifying the basis for
29transferring account funds to those corporations that have been in
30existence for five years or less.
31(e) Any decision made by the program manager pursuant to
32this section may be appealed to the executive director within 15
33days of notice of the proposed action. The executive director may
34repeal or modify any reallocation and transfer decisions made by
35the program manager. The appealing corporation shall submit,
36in writing, the specific area or areas of appeal and set forth any
37recommendation to the executive director for consideration. The
38 executive director shall render a final decision within five business
39days of receiving the written appeal.
P37 1(f) Any decision made by the executive director shall be
2appealable in writing to the bank board within 15 days of the
3executive director’s decision, or such longer period as agreed to
4between the executive director and the corporation. The bank
5board shall make a final reallocation or transfer decision within
630 days of receiving the appeal, or such longer period agreed to
7between the executive director and the corporation.
8(g) In the event of an appeal under this section, all allocations
9or transfers of money to trust fund accounts shall be on hold
10pending resolution by the executive director or bank board, as
11applicable.
Pursuant to thisbegin delete section and any regulationsend deletebegin insert chapter
13and any directives and requirementsend insert adopted pursuant to thisbegin delete titleend delete
14begin insert chapterend insert, the state has residual interest in the funds deposited by
15the state to a trust fund account and to the return on these funds
16from investments. Onbegin delete dissolution or suspensionend deletebegin insert dissolution,
17suspension, or terminationend insert of the corporation, these funds shall be
18withdrawn by thebegin delete executive directorend deletebegin insert program managerend insert from the
19trust fund account and returned to the expansion fund or
20temporarily transferred to another trust fund account. This
21provision shall be contained in the trust instructions to the trustee.
Each trust fund account shall consist of a loan
23guarantee account, and, upon recommendation by the program
24manager, a bond guarantee accountbegin insert or other financial product
25accountend insert, each of which is a legally separate account, and the assets
26of one account shall not be used to satisfy loan guarantees or other
27begin insert financial productend insert obligations of another corporationbegin delete. Not more
28than one-third of a trust fund account shall be allocated to a bond
29guarantee accountend deletebegin insert, except when a trust fund account is designated
30by the program manager to be shared by multiple corporations.
31The amount of funds allocated to a bond guarantee account shall
32be pursuant to the directives and requirementsend insert. A corporation shall
33not use trust fund accounts to secure a corporate indebtedness.
34State funds deposited in the trust fund accounts, with the exception
35of guarantees established pursuant to thisbegin delete titleend deletebegin insert chapterend insert, shall not
36be subject to liens or encumbrances of the corporation or its
37creditors.
(a) The financial institutionbegin insert or financial companyend insert
39 that is to act as trustee of the trust fund shall be designatedbegin delete after
40review by the program managerend deletebegin insert by the bankend insert. The corporation shall
P38 1not receive money on deposit to support guaranteesbegin insert or other
2financial productsend insert issued under thisbegin delete titleend deletebegin insert chapterend insert without the
3approval of the program manager.
4(b) State funds may not be used to finance an expense incurred
5by a corporation in a location not approved pursuant tobegin delete a statewide
6planend deletebegin insert the contract between the bank and the corporationend insert. The
7prohibition against use of state funds also applies to the location
8of satellite offices, and the area served from a corporation office.
9(c) Except as otherwise provided in this chapter, the trust fund
10account shall be used solely to make loans, guarantee bonds and
11loans, and provide other financial products approved by the
12 corporation that meet the financial product criteria of the directives
13and requirements. Except as provided in subdivision (b) of Section
1463089.54, the state or the bank shall not be liable or obligated in
15any way as a result of the allocation of state moneys to a trust fund
16account beyond the state moneys that are allocated and deposited
17in the fund pursuant to this chapter, and that are not otherwise
18withdrawn by the state pursuant to this chapter.
begin insert63089.60.end insert
(a) The program manager shall recommend whether
20the expansion fund and trust fund accounts are to be leveraged,
21and if so, by how much. Upon the request of the corporation, the
22program manager’s decision may be repealed or modified by the
23executive director or the bank board.
24(b) The amount of guarantee liability outstanding at any one
25time shall not exceed five times the amount of funds on deposit in
26the expansion fund plus any receivables due from funds loaned
27from the expansion fund to another fund in state government as
28directed by the Department of Finance pursuant to a statute
29enacted by the Legislature, including each of the trust fund
30accounts within the trust fund.
31(c) This section shall remain in effect only until January 1, 2018,
35the expansion fund and trust fund accounts are to be leveraged,
36and if so, by how much. Upon the request of the corporation, the
37program manager’s decision may be repealed or modified by the
38executive director or the bank board.
39(b) The amount of guarantee liability outstanding at any one
40time shall not exceed four times the amount of funds on deposit in
P39 1the expansion fund plus any receivables due from funds loaned
2from the expansion fund to another fund in state government as
3directed by the Department of Finance pursuant to a statute
4enacted by the Legislature, including each of the trust fund
5accounts within the trust fund, unless the program manager has
6permitted a higher leverage ratio for an individual corporation
7pursuant to subdivision (b) of Section 63089.56.
8(c) This section shall become operative on January 1, 2018.
begin insert63089.61.end insert
(a) The corporate guarantee shall be backed by
10funds on deposit in the corporation’s trust fund account, or by
11receivables due from funds loaned from the corporation’s trust
12fund account to another fund in state government, as directed by
13the Department of Finance pursuant to a statute enacted by the
14Legislature.
15(b) Loan guarantees shall be secured by a reserve of at least
1620 percent to be determined by the program manager unless a
17higher leverage ratio for an individual corporation has been
18approved pursuant to subdivision (b) of Section 63089.56.
19(c) The expansion fund and trust fund accounts shall be used
20to guarantee obligations and other financial product obligations,
21 to pay the administrative costs of the corporations, and for other
22uses pursuant to this chapter.
23(d) This section shall remain in effect only until January 1, 2018,
25is enacted before January 1, 2018, deletes or extends that date.
27funds on deposit in the corporation’s trust fund account, or by
28receivables due from funds loaned from the corporation’s trust
29fund account to another fund in state government, as directed by
30the Department of Finance pursuant to a statute enacted by the
31Legislature.
32(b) Loan guarantees shall be secured by a reserve of at least
3325 percent to be determined by the program manager, unless a
34higher leverage ratio has been approved for an individual
35corporation pursuant to subdivision (b) of Section 63089.56.
36(c) The expansion fund and trust fund accounts shall be used
37to guarantee obligations and other financial product obligations,
38 to pay the administrative costs of the corporations, and for other
39uses pursuant to this chapter.
40(d) This section shall become operative on January 1, 2018.
begin insert63089.62.end insert
(a) It is the intent of the Legislature that the
2corporations make maximum use of their statutory authority to
3guarantee loans and surety bonds, and administer other financial
4products, including the authority to secure loans with a minimum
5loan loss reserve of only 20 percent, unless the program manager
6authorizes a higher leverage ratio for an individual corporation
7pursuant to subdivision (b) of Section 63089.56, so that the
8financing needs of small business may be met as fully as possible
9within the limits of corporations’ trust fund account balance.
10(b) Any corporation that serves an area declared to be in a state
11of emergency by the Governor or a disaster area by the President
12of the United States, the Administrator of the United States Small
13Business Administration, or the United States Secretary of
14Agriculture shall increase the portfolio of loan guarantees where
15the dollar amount of the loan is less than one hundred thousand
16dollars ($100,000), so that at least 15 percent of the dollar value
17of loans guaranteed by the corporation is for those loans. The
18corporation shall comply with this requirement within one year
19of the date the emergency or disaster is declared. Upon application
20of a corporation, the executive director may waive or modify the
21rule for the corporation if the corporation demonstrates that it
22made a good faith effort to comply and failed to locate lending
23institutions in the region that the corporation serves that are willing
24to make guaranteed loans in that amount.
25(c) This section shall remain in effect only until January 1, 2018,
27is enacted before January 1, 2018, deletes or extends that date.
29corporations make maximum use of their statutory authority to
30guarantee loans and surety bonds, and administer other financial
31products, including the authority to secure loans with a minimum
32loan loss reserve of only 25 percent, unless the program manager
33authorizes a higher leverage ratio for an individual corporation
34pursuant to subdivision (b) of Section 63089.56, so that the
35financing needs of small business may be met as fully as possible
36within the limits of corporations’ trust fund account balance.
37(b) Any corporation that serves an area declared to be in a state
38of emergency by the Governor or a disaster area by the President
39of the United States, the Administrator of the United States Small
40Business Administration, or the United States Secretary of
P41 1Agriculture shall increase the portfolio of loan guarantees where
2the dollar amount of the loan is less than one hundred thousand
3dollars ($100,000), so that at least 15 percent of the dollar value
4of loans guaranteed by the corporation is for those loans. The
5corporation shall comply with this requirement within one year
6of the date the emergency or disaster is declared. Upon application
7of a corporation, the program manager may waive or modify the
8rule for the corporation if the corporation demonstrates that it
9made a good faith effort to comply and failed to locate lending
10institutions in the region that the corporation serves that are willing
11to make guaranteed loans in that amount.
12(c) This section shall become operative on January 1, 2018.
14Article 6. begin deleteGuarantee Program end deletebegin insertCorporations, Miscellaneousend insert
(a) The Small Business Loan Guarantee Program,
17which is hereby continued in existence, shall provide guarantees
18to loans offered by financial institutions to small businesses.
19(b) The Legislature finds and declares that the Small Business
20Loan Guarantee Program has enabled participating small businesses
21that do not qualify for conventional business loans or Small
22Business Administration loans to secure funds to expand their
23businesses. These small businesses would not have been able to
24expand their businesses in the absence of the program. The program
25has also provided valuable technical assistance to small businesses
26to ensure growth and stability. The study commissioned by former
27Section 14069.6 of the Corporations Code, as added by Chapter
28919 of the Statutes of 1997, documented the return on investment
29of the program and the need for its services. The value of the
30program has also been recognized by the Governor through
31proposals contained in the May Revision to the Budget Act of
322000 for the 2000-01 fiscal year.
The program manager, following notification to the
34bank director, may do all of the following:
35(a) Contract for services entered into pursuant to this title.
36(b) Hold public hearings.
37(c) Act as liaison between corporations, other state and federal
38agencies, lenders, and the Legislature.
39(d) Process and tabulate on a monthly basis all corporate reports.
40(e) Attend board meetings.
P42 1(f) Attend and participate at corporation meetings. The program
2manager, or his or her designee, shall be an ex officio, nonvoting
3representative on the board of directors and loan committees of
4each corporation. The program manager shall meet with the board
5of directors of each corporation at least once each fiscal year.
6(g) Assist corporations in applying for public and private funding
7opportunities, and in obtaining program support from the business
8community.
63089.63.
10the expansion fund and trust fund accounts are to be leveraged,
11and if so, by how much. Upon the request of the corporation, the
12program manager’s decision may be repealed or modified by a
13bank board resolution.
14(b) The amount of guarantee liability outstanding at any one
15time shall not exceed five times the amount of funds on deposit in
16the expansion fund plus any receivables due from funds loaned
17from the expansion fund to another fund in state government as
18directed by the Department of Finance pursuant to a statute enacted
19by the Legislature, including each of the trust fund accounts within
20the trust fund.
21(c) This section shall remain in effect only until January 1, 2018,
22and as of that date is repealed, unless a later enacted statute, that
23is enacted before January 1, 2018, deletes or extends that date.
25the expansion fund and trust fund accounts are to be leveraged,
26and if so, by how much. Upon the request of the corporation, the
27program manager’s decision may be repealed or modified by an
28office resolution.
29(b) The amount of guarantee liability outstanding at any one
30time shall not exceed four times the amount of funds on deposit
31in the expansion fund plus any receivables due from funds loaned
32from the expansion fund to another fund in state government as
33directed by the Department of Finance pursuant to a statute enacted
34by the Legislature, including each of the trust fund accounts within
35the trust fund, unless the program manager has permitted a higher
36leverage ratio for an individual corporation pursuant to subdivision
37(b) of Section 63089.53.
38(c) This section shall become operative on January 1, 2018.
63089.64.
40funds on deposit in the corporation’s trust fund account, or by
P43 1receivables due from funds loaned from the corporation’s trust
2fund account to another fund in state government, as directed by
3the Department of Finance pursuant to a statute enacted by the
4Legislature.
5(b) Loan guarantees shall be secured by a reserve of at least 20
6percent to be determined by the executive director.
7(c) The expansion fund and trust fund accounts shall be used
8exclusively to guarantee obligations and pay the administrative
9costs of the corporations.
10(d) This section shall remain in effect only until January 1, 2018,
14funds on deposit in the corporation’s trust fund account, or by
15receivables due from funds loaned from the corporation’s trust
16fund account to another fund in state government, as directed by
17the Department of Finance pursuant to a statute enacted by the
18Legislature.
19(b) Loan guarantees shall be secured by a reserve of at least 25
20percent to be determined by the executive director, unless the
21executive director authorizes a higher leverage ratio for an
22individual corporation pursuant to subdivision (b) of Section
2363089.53.
24(c) The expansion fund and trust fund accounts shall be used
25exclusively to guarantee obligations and pay the administrative
26costs of the corporations.
27(d) This section shall become operative on January 1, 2018.
A corporation may charge the borrower or financial
29institution a loan fee on all loans made or guaranteed by the
30corporation to defray the operating expenses of the corporation.
31The amount of the fee shall be determined by the program manager.
33corporations make maximal use of their statutory authority to
34guarantee loans and surety bonds, including the authority to secure
35loans with a minimum loan loss reserve of only 20 percent, so that
36the financing needs of small business may be met as fully as
37possible within the limits of corporations’ loan loss reserves. The
38office shall report annually to the Legislature on the financial status
39of the corporations and their portfolio of loans and surety bonds
40guaranteed pursuant to Section 9795.
P44 1(b) Any corporation that serves an area declared to be in a state
2of emergency by the Governor or a disaster area by the President
3of the United States, the Administrator of the United States Small
4Business Administration, or the United States Secretary of
5Agriculture shall increase the portfolio of loan guarantees where
6the dollar amount of the loan is less than one hundred thousand
7dollars ($100,000), so that at least 15 percent of the dollar value
8of loans guaranteed by the corporation is for those loans. The
9corporation shall comply with this requirement within one year of
10the date the emergency or disaster is declared. Upon application
11of a corporation, the executive director may waive or modify the
12rule for the corporation if the corporation demonstrates that it made
13a good faith effort to comply and failed to locate lending
14institutions in the region that the corporation serves that are willing
15to make guaranteed loans in that amount.
16(c) This section shall remain in effect only until January 1, 2018,
17and as of that date is repealed, unless a later enacted statute, that
18is enacted before January 1, 2018, deletes or extends that date.
20corporations make maximal use of their statutory authority to
21guarantee loans and surety bonds, including the authority to secure
22loans with a minimum loan loss reserve of only 25 percent, unless
23the office authorizes a higher leverage ratio for an individual
24corporation pursuant to subdivision (b) of Section 63089.53, so
25that the financing needs of small business may be met as fully as
26possible within the limits of corporations’ loan loss reserves. The
27bank shall report annually to the Legislature on the financial status
28of the corporations and their portfolio of loans and surety bonds
29guaranteed pursuant to Section 9795.
30(b) Any corporation that serves an area declared to be in a state
31of emergency by the Governor or a disaster area by the President
32of the United States, the Administrator of the United States Small
33Business Administration, or the United States Secretary of
34Agriculture shall increase the portfolio of loan guarantees where
35the dollar amount of the loan is less than one hundred thousand
36dollars ($100,000), so that at least 15 percent of the dollar value
37of loans guaranteed by the corporation is for those loans. The
38corporation shall comply with this requirement within one year of
39the date the emergency or disaster is declared. Upon application
40of a corporation, the program manager may waive or modify the
P45 1rule for the corporation if the corporation demonstrates that it made
2a good faith effort to comply and failed to locate lending
3institutions in the region that the corporation serves that are willing
4to make guaranteed loans in that amount.
5(c) This section shall become operative on January 1, 2018.
begin delete63089.67.end delete
7begin insert63089.65.end insert
(a) A corporation shall establish one or more loan
8committees, each of which shall be composed of five or more
9persons, a majority of whom shall be experienced in banking and
10lending operations.
11(b) A loan committee shall review applications to the corporation
12for a loan or guarantee and shall do each of the following:
13(1) Determine the feasibility of the proposed transaction. The
14loan committee shall recommend approval of the application only
15upon a determination that there is a reasonable chance that the loan
16will be repaid.
17(2) On the basis of that determination, recommend to the board
18of directors any action that the loan committee deems appropriate
19under the circumstances, or, in the event that approval authority
20has been delegated to the loan committee by the board of directors,
21approve or disapprove the loan application.
22(c) A loan committee shall expeditiously act to accept or reject
23loan applications.
24(d) A person who has a financial interest related to a matter over
25which the loan committee has authority may not make, participate
26in making, or in any way attempt to influence that matter.
begin delete63089.68.end delete
28begin insert63089.66.end insert
Unless delegated to its loan committee, the
29corporation’s board of directors, upon a recommendation from its
30loan committee, shall do all of the following:
31(a) Emphasize consideration to applications that will increase
32employment of disadvantaged, disabled, or unemployed persons,
33or increase employment of youth residing in areas of high youth
34unemployment and high youth delinquency.
35(b) Give consideration to applications from traditional and
36safety-net providers of Medi-Cal services that will promote access
37to quality medical care for individuals enrolled in Medi-Cal
38managed health care networks that are contracting with or owned
39or operated by a county board of supervisors, a county health
40commission, or a county health authority organized pursuant to
P46 1Section 14018.7, 14087.31, 14087.35, 14087.36, 14087.38, or
214087.9605 of the Welfare and Institutions Code.
3(c) Not grant a loan or guarantee, unless it determines that the
4conditions of Section 200033 are satisfied.
63089.69.
(a) Among other priorities, corporations shall give
6high priority to the issuance of loan guarantees to small business
7incubators and to businesses that lease space in incubators.
8(b) For the purposes of this section, “incubator” means a facility
9that allows new small businesses to increase their probability of
10success by sharing needed capital equipment, services, and
11facilities, which may include, but are not limited to, the following:
12(1) Reception and meeting area.
13(2) Secretarial services, such as collating, telephone answering,
14or mailhandling.
15(3) Accounting and bookkeeping services.
16(4) Research libraries.
17(5) Onsite financial and management counseling.
18(6) Parking.
19(7) Flexible lease arrangements for flexible space.
20(8) Computer or word processing facilities.
21(9) Day care facilities.
22(10) Office furniture rentals.
23(11) A graduation policy sometimes requiring firms to leave
24after three to five years in a subsidized, nurturing environment.
25(12) Employee training and placement services.
26(c) Among other priorities, corporations shall give high priority
27to marketing their services to Phase 1 or Phase 2 Small Business
28Innovation Research (SBIR) recipients and providing loan
29guarantees, whenever possible.
begin insert63089.67.end insert
31institution a loan fee or credit enhancement fee on all loans made
32or guaranteed by the corporation to defray the operating expenses
33of the corporation. The amount of the fee shall be determined by
34the directives and requirements.
36Article begin insert7.end insert begin insertLoan Guaranteesend insert
end insert37
begin insert63089.70.end insert
(a) The Small Business Expansion Fund, which is
39hereby continued in existence, shall, among other things, provide
P47 1guarantees to loans offered by financial institutions and financial
2companies to small businesses.
3(b) The Legislature finds and declares that the Small Business
4Loan Guarantee Program has enabled participating small
5businesses that do not qualify for conventional business loans or
6Small Business Administration loans to secure funds to expand
7their businesses. These small businesses would not have been able
8to expand their businesses in the absence of the program. The
9program has also provided valuable technical assistance to small
10businesses to ensure growth and stability. The study commissioned
11by former Section 14069.6 of the Corporations Code, as added by
12Chapter 919 of the Statutes of 1997, documented the return on
13investment of the program and the need for its services. The value
14of the program has also been recognized by the Governor through
15proposals contained in the May Revision to the Budget Act of 2000
16for the 2000-01 fiscal year.
17(c) A corporation shall not issue a loan or guarantee, unless it
18determines that the following conditions are satisfied:
19(1) There is no probability that the loan would be granted by a
20financial company or financial institution under reasonable terms
21and conditions and the borrower has demonstrated a reasonable
22prospect of repayment.
23(2) The loan proceeds will be used exclusively in this state.
24(3) The loan qualifies as a small business loan or an employment
25incentive loan.
26(4) The borrower has a minimum equity interest in the business
27as determined by the directives and requirements.
28(5) As a result of the loan, the jobs generated or retained
29demonstrate reasonable conformance to any directives and
30requirements specifying employment criteria.
begin insert63089.71.end insert
32high priority to the issuance of loan guarantees to small business
33incubators and to businesses that lease space in incubators.
34(b) For the purposes of this section, “incubator” means a facility
35that allows new small businesses to increase their probability of
36success by sharing needed capital equipment, services, and
37facilities, which may include, but are not limited to, the following:
38(1) Reception and meeting area.
39(2) Secretarial services, such as collating, telephone answering,
40or mailhandling.
P48 1(3) Accounting and bookkeeping services.
2(4) Research libraries.
3(5) Onsite financial and management counseling.
4(6) Parking.
5(7) Flexible lease arrangements for flexible space.
6(8) Computer or word processing facilities.
7(9) Day care facilities.
8(10) Office furniture rentals.
9(11) A graduation policy sometimes requiring firms to leave
10after three to five years in a subsidized, nurturing environment.
11(12) Employee training and placement services.
12(c) Among other priorities, corporations shall give high priority
13to marketing their services to Phase 1 or Phase 2 Small Business
14Innovation Research (SBIR) recipients and providing loan
15guarantees, whenever possible.
17Article begin delete7.end deletebegin insert8.end insert Direct Lendingbegin insert and Other Debt Instrumentsend insert
(a) A corporation may utilize funds for direct
20lendingbegin delete as long as at least 80 percent of the corporate funds,
21calculated by dollar amount, and all expansion funds are guaranteed
22by another public or private financial institutionend deletebegin insert or other debt
23instruments pursuant to the directives and requirementsend insert.
24(b) The amount of funds available for direct lendingbegin insert andend insertbegin insert other
25debt instrumentsend insert shall be determined by thebegin delete program managerend delete
26begin insert directives and requirementsend insert. In its capacity as a direct lender, the
27corporation may sell in the secondary market the guaranteed
28portion of each loanbegin insert, if guaranteed,end insert so as to raise additional funds
29for direct lending.begin delete The office shall issue regulations governing
30these direct loans, including the maximum amount of these loans.end delete
31(c) To execute the direct loanbegin insert and other debt instrumentend insert
32 programs established in this chapter, thebegin delete program managerend deletebegin insert bankend insert
33 may loan trust funds to a corporationbegin delete located in a rural areaend delete for the
34express purpose of lending those funds to an identified borrower.
35The loan authorized by thebegin delete program managerend deletebegin insert bankend insert to the
36corporation shall be on terms similar to the loan between the
37corporation and the borrower.
38(d) The amount of the loan may be in excess of the amount of
39a loan to any individual borrower, but actual disbursements
40 pursuant to thebegin delete officeend deletebegin insert bankend insert loan agreement shall be required to be
P49 1supported by a loan agreement between the borrower and the
2corporation in an amount at least equal to the requested
3disbursement. The loan between the bank and the corporation shall
4be evidenced by a credit agreement. In the event that any loan
5between the corporation and borrower is not guaranteed by a
6governmental agency, the portion of the credit agreement
7attributable to that loan shall be secured by assignment of any note,
8executed in favor of the corporation by the borrower to the bank.
9The terms and conditions of the credit agreement shall be similar
10to the loan agreement between the corporation and the borrower,
11which shall be collateralized by the note between the corporation
12and the borrower.
13(e) In the absence of fraud on the part of the corporation, the
14liability of the corporation to repay the loan to the bank is limited
15to the repayment received by the corporation from the borrower,
16except in a case where the United States Department of Agriculture
17requires exposure by the corporation in rule or regulation. The
18corporation may use trust funds for loan repayment to thebegin delete officeend delete
19begin insert bank end insert if the corporation has exhausted a loan loss reserve created
20for this purpose. Interest and principal received by thebegin delete officeend deletebegin insert bankend insert
21 from the corporation shall be deposited into the same account from
22which the funds were originally borrowed.
23(f) Upon the approval of the program manager, a corporation
24shall be authorized to borrow trust funds from the bank for the
25purpose of relending those funds to small businesses. A corporation
26shall demonstrate to the program manager that it has the capacity
27to administer a direct loan program, and has procedures in place
28to limit the default rate for loans to startup businesses.begin delete Not more
29than 25 percentend deletebegin insert The percentageend insert of any trust fund accountbegin delete shallend deletebegin insert toend insert
30 be used for the direct lendingbegin delete establishedend delete pursuant to this
31subdivision begin delete. A loan to a corporation shall not exceed the amount
32of funds likely to be lent to small businesses within three months
33following the loan to the corporationend delete begin insert shall be established in the
34directives and requirementsend insert.
35(g) A corporation shall not issue a direct loan or other financial
36product, unless and until it determines that all of the following
37conditions are satisfied:
38(1) The direct loan or other financial product assistance would
39not be granted by a financial company or financial institution
P50 1under reasonable terms and conditions and the borrower has
2demonstrated a reasonable prospect of repayment.
3(2) The loan or financial product proceeds will be used
4exclusively in this state.
5(3) The direct loan or financial product qualifies as a small
6business loan or employment incentive loan.
7(4) The borrower has a minimum equity interest in the business
8as determined by the directives and requirements.
9(5) As a result of the direct loan or other debt instrument, the
10jobs generated or retained demonstrate reasonable conformance
11to any directives and requirements specifying employment criteria.
12(g)
13begin insert(h)end insert The maximum loanbegin insert or other debt instrumentend insert amount to a
14small business shall be set by thebegin delete program manager, but in no case
15shall it be more than three hundred thousand dollars ($300,000)end delete
16begin insert directives and requirementsend insert. In the absence of fraud on the part
17of the corporation, the repayment obligation pursuant to the loanbegin insert end insert
18begin insertor other debt instrumentend insert to the corporation shall be limited to the
19amount of funds received by the corporation for the loanbegin insert end insertbegin insertor other
20debt instrumentend insert to the small business and any other funds received
21from thebegin delete officeend deletebegin insert bankend insert that are not disbursed. The corporation shall
22be authorized to charge a fee to the small business borrower, in an
23amount determinedbegin delete by the executive director pursuant to regulationend delete
24begin insert pursuant to the directives and requirementsend insert. Thebegin delete programend delete
25begin insert programsend insert provided for in this subdivision shall be available in all
26geographic areas of the state.
28Article begin delete8.end deletebegin insert9.end insert Disaster Loan Guarantees
(a) begin deleteA end deletebegin insertPursuant to Section 8684.2 and the contract
31between a corporation and the bank, a end insertcorporation may, in an area
32affected by a state of emergency within the state and declared a
33disaster by the President of the United States, the Administrator
34of the United States Small Business Administration, or the United
35States Secretary of Agriculture, or declared to be in a state of
36emergency by the Governor of California, provide loan guarantees
37from funds allocated in Section 63089.55 to small businesses,
38small farms, nurseries, and agriculture-related enterprises that have
39suffered actual physical damage or significant economic injury as
40a result of the disaster.
P51 1(b) begin deleteIf regulations have not otherwise been adopted, the end deletebegin insertThe end insertbank
2board may adopt begin delete or readopt regulationsend delete begin insert directives and requirementsend insert
3 to implement thebegin insert disasterend insert loan guarantee program authorized by
4this section.begin delete The bank board may adopt these regulations as
5emergency regulations in accordance with Chapter 3.5
6(commencing with Section 11340) of Part 1 of Division 3 of Title
72, and for purposes of that chapter, including Section 11349.6, the
8adoption of the regulations shall be considered by the Office of
9Administrative Law to be necessary for the immediate preservation
10of the public peace, health and safety, and general welfare.
11Notwithstanding subdivision (e) of Section 11346.1, the regulations
12shall be repealed within 180 days after their effective date unless
13the office complies with Chapter 3.5 (commencing with Section
1411340) of Part 1 of Division 3 of Title 2, as provided in subdivision
15(e) of Section 11346.1.end deletebegin insert Any regulations adopted under Chapter 1
16(commencing with Section 14000) of Part 5 of Division 3 of Title
171 of the Corporations Code shall remain in effect until the bank
18adopts directives and requirements.end insert
19(c) A corporation shall not issue a disaster loan guarantee
20unless and until it determines that the following conditions are
21satisfied:
22(1) The borrower cannot reasonably obtain a loan without some
23form of credit enhancement.
24(2) The borrower has demonstrated a reasonable prospect of
25repayment.
26(3) The guaranteed loan will be used exclusively in this state.
27(4) The disaster loan qualifies as a small business loan or
28employment incentive loan.
30begin insert(d)end insert Allocations pursuant to subdivision (a) shall be deemed to
31be for extraordinary emergency or disaster response operations
32costs incurred by thebegin delete officeend deletebegin insert issuance of disaster loan guaranteesend insert.
34Article 9. Energy Efficiency Loans
63089.93.
(a) Corporations may grant energy efficiency
37improvement loans.
38(b) The bank shall enter into an agreement with the California
39Energy Extension Service of the Office of Planning and Research
40to assist small business owners in reducing their energy costs
P52 1through low-interest loans and by providing assistance and
2information.
4Article 10. Suretybegin delete Bondsend deletebegin insert Bond Guaranteesend insert
In furtherance of the purposes set forth in Section
763088.1 of this code and Sectionbegin delete 14002end deletebegin insert 14001end insert of the Corporations
8Code, a corporation may do any one or more of the following
9activities, but only to the extent that the activities are authorized
10pursuant to the contract between the bank and corporation:
11guarantee, endorse, or act as surety on the bonds, notes, contracts,
12or other obligations of, or assist financially, any person, firm,
13corporation, or association, and may establish and regulate the
14terms and conditions with respect to any such loans or financial
15assistance and the charges for interest and service connected
16therewith, except that the corporation shall not make or guarantee
17any loan, unless and until it determines:
18(a) There is no probability that the loan or other financial
19assistance would be granted by abegin insert financial institution orend insert financial
20company under reasonable terms or conditions, and the borrower
21has demonstrated a reasonable prospect of repayment of the loan.
22(b) The loan proceedsbegin delete shallend deletebegin insert willend insert be used exclusively in this state.
23(c) The loan qualifies as a small business loan or an employment
24incentive loan.
25(d) begin deleteThat the end deletebegin insertThe end insertborrower has a minimum equity interest in the
26business as determined by thebegin delete directorend deletebegin insert directives and requirementsend insert.
27(e) As a result of the loan, the jobs generated or retained
28demonstrate reasonable conformance to thebegin delete regulationsend deletebegin insert directives
29and requirementsend insert specifying employment criteria.
(a) In addition to the authority granted by Section
3163089.95,begin delete upon approval of the executive director,end deletebegin insert pursuant to theend insert
32begin insert directives and requirementsend insert a corporation may act as guarantor
33on a surety bond for any small business contractor, including, but
34not limited to, women, minority, and disabled veteran contractors.
35(b) The provisions of subdivision (a) allowing a corporation to
36act as a guarantor on surety bonds may be funded through
37appropriatebegin insert state orend insert federal funding sources. Federal funds shall
38be deposited in the Federal Trust Fund in the State Treasury in
39accordance with Section 16360, for transfer to the expansion fund.
P53 1Article 11. Reporting
begin delete(a)end deletebegin delete end deletebegin deleteExcept as otherwise provided in this title, the
4trust fund account shall be used solely to make loans, guarantee
5bonds, and guarantee loans, approved by the corporation, that meet
6the loan criteria under this chapter. The state shall not be liable or
7obligated in any way as a result of the allocation of state moneys
8to a trust fund account beyond the state moneys that is allocated
9and deposited in the fund pursuant to this title, and that is not
10otherwise withdrawn by the state pursuant to this chapter.end deletebegin insert Each
11corporation shall provide to the program manager, in a format
12prescribed by him or her, the following data and reports:end insert
14begin insert(a)end insert A summary of allbegin delete loans and bondsend deletebegin insert outstanding loans, bonds,
15and other credit enhancementsend insert to which abegin delete stateend deletebegin insert corporationend insert
16 guaranteebegin insert, as authorized by this chapter,end insert is attached begin delete shall be
17submitted to the program manager upon execution of the loan
18agreement and periodically thereafterend delete begin insert, on a schedule determined
19by the program managerend insert.
21begin insert(b)end insert A summary of allbegin delete loansend deletebegin insert outstanding loans and other debt
22instrumentsend insert made by a corporationbegin delete shall be submitted to the
23program manager upon execution of the loan agreement and
24periodically thereafterend deletebegin insert, as authorized by this chapter, on a schedule
25determined by the program managerend insert.
26(c) A summary of all outstanding other financial project
27obligations made by a corporation, as authorized by this chapter,
28on a schedule of determined by the program manager.
29(d) Statement of economic interests from each designated person
30pursuant to Section 87302.
31(e) No later than July 31 of each fiscal year, commencing
32January 1, 2014, each of the following documents:
33(1) A copy of the corporation board approved budget for the
34current fiscal year.
35(2) Projected fiscal year summary of authorized program
36activities including loans, loan guarantees, bond guarantees, and
37other financial product activity supported by the expansion fund.
38(3) A copy of the written plan of operation or strategic plan for
39the current fiscal year as approved by the corporations board of
40directors.
P54 1(4) A copy of the current and valid articles of incorporation
2and bylaws of the corporation with noted amendments from the
3prior fiscal year.
4(f) No later than October 31 of each year commencing January
51, 2014, a copy of the corporation’s prior fiscal year audit, auditor
6findings, if any, and finding responses.
7(g) Any other statistical and other data, reports, or other
8information required by the directives and requirements or the
9program manager.
(a) Annually, not later than January 1 of each year
11commencing January 1, 2014, the program manager shall prepare
12begin delete a report regarding the loss experience for the expansion fund for
13loan guarantees, loss reserves, and surety bond guarantees for the
14preceding fiscal year. At a minimum, the report shall also include
15data regarding numbers of surety bond and loan guarantees awarded
16through the expansion fund, including ethnicityend deletebegin insert and submit to the
17Governor and the Legislature, pursuant to Section 9795, a report
18for the preceding fiscal year ending June 30, containing the
19expansion fund and trust fund financial product activity of each
20 corporation, including all of the following:end insert
21(1) Loans, guarantees, and other financial products awarded
22and outstanding balances.
23(2) Default and loss statistics.
24(3) Employment data.
25begin insert (4)end insertbegin insert end insertbegin insertEthnicityend insert and gender data of participating contractors and
26other entities, and experience of surety insurer participants in the
27bond guarantee program.begin delete The report shall include the information
28described in Section 63089.66.end deletebegin deleteTheend delete
29begin insert(5)end insertbegin insert end insertbegin insertSignificant events.end insert
30begin insert(b)end insertbegin insert end insertbegin insertTheend insert program manager shall post thebegin delete informationend deletebegin insert reportend insert on
31thebegin delete bank’end deletebegin insert bank’send insert Internet Web site begin delete and submit notice report to the
32Governor and the Legislature when that information is available
33on its Internet Web siteend delete .
34(b) A corporation shall also report to the program manager, or
35his or her designated representative, all statistical and other reports
36required by this title, responses to audit reports, budget
37requirements, invoices submitted for payment by the state, and
38information concerning loans made or guaranteed.
63089.99.
Pursuant to subdivision (f) of Section 8684.2, within
4060 days of the conclusion of the period for guaranteeing loans
P55 1under any small business disaster loan guarantee program
2conducted for a disaster as authorized by Section 8684.2 or 200030,
3the bank shall provide a report to the Legislature on loan guarantees
4approved and rejected by gender, ethnic group, type of business
5and location, and each participating loan institution pursuant to
6Section 9795. The bank need only submit one report to comply
7with this section and subdivision (f) of Section 8684.2.
9begin insertSEC. 5.end insert
10Section 6 of Article XIII B of the California Constitution because
11the only costs that may be incurred by a local agency or school
12district will be incurred because this act creates a new crime or
13infraction, eliminates a crime or infraction, or changes the penalty
14for a crime or infraction, within the meaning of Section 17556 of
15the Government Code, or changes the definition of a crime within
16the meaning of Section 6 of Article XIII B of the California
17Constitution.
19begin insertSEC. 6.end insert
20immediate preservation of the public peace, health, or safety within
21the meaning of Article IV of the Constitution and shall go into
22immediate effect. The facts constituting the necessity are:
23It is necessary that this bill take effect immediately in order to
24provide, as is necessary to timely implement the Governor’s
25reorganization plan, for a better managed and more efficient
26transition of small business assistance programs from the soon to
27be defunct Business, Transportation and Housing Agency to the
28 California Infrastructure and Economic Development Bank within
29the Governor’s Office of Business and Economic Development.