Bill Text: CA AB1862 | 2015-2016 | Regular Session | Introduced

California Assembly Bill 1862 (Prior Session Legislation)

Introduced

Bill Title: Small Business Expansion Fund.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Failed) 2016-11-30 - Died at Desk. [AB1862 Detail]

Download: California-2015-AB1862-Introduced.html

BILL NUMBER: AB 1862	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Kim

                        FEBRUARY 10, 2016

   An act to amend Section 63089.70 of the Government Code, relating
to economic development.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1862, as introduced, Kim. Small Business Expansion Fund.
   Existing law creates the Small Business Expansion Fund to provide
guarantees to loans offered by financial institutions and financial
companies to small businesses. Existing law prohibits a corporation
from issuing a guarantee pursuant to these provisions unless it makes
specified determinations.
   This bill would make a technical, nonsubstantive change to these
provisions.
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 63089.70 of the Government Code is amended to
read:
   63089.70.  (a) The Small Business Expansion Fund, which is hereby
continued in existence, shall, among other things, provide guarantees
to loans offered by financial institutions and financial companies
to small businesses.
   (b) The Legislature finds and declares that the Small Business
Loan Guarantee Program has enabled participating small businesses
that do not qualify for conventional business loans or Small Business
Administration loans to secure funds to expand their businesses.
These small businesses would not have been able to expand their
businesses in the absence of the program. The program has also
provided valuable technical assistance to small businesses to ensure
growth and stability. The study commissioned by former Section
14069.6 of the Corporations Code, as added by Chapter 919 of the
Statutes of 1997, documented the return on investment of the program
and the need for its services. The value of the program has also been
recognized by the Governor through proposals contained in the May
Revision to the Budget Act of 2000 for the 2000-01 fiscal year.
   (c) A corporation shall not issue a guarantee  under
  pursuant to  this section unless it determines
that the following conditions are satisfied:
   (1) There is a low probability that the loan being guaranteed
would be granted by a financial company or financial institution
under reasonable terms and conditions and the borrower has
demonstrated a reasonable prospect of repayment.
   (2) The loan proceeds will be used exclusively in this state.
   (3) The loan qualifies as a small business loan or an employment
incentive loan.
   (4) The borrower has a minimum equity interest in the business as
determined by the directives and requirements.
   (5) As a result of the loan being guaranteed, the jobs generated
or retained demonstrate reasonable conformance to any directives and
requirements specifying employment criteria.