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AB-1137 Economic development: foreign trade.(2011-2012)

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Amended  IN  Senate  July 06, 2012
Amended  IN  Senate  June 22, 2011
Amended  IN  Assembly  April 26, 2011

CALIFORNIA LEGISLATURE— 2011–2012 REGULAR SESSION

Assembly Bill
No. 1137


Introduced  by  Assembly Member V. Manuel Pérez

February 18, 2011


An act to amend Sections 6300, 13996.45, and 13996.6 of, and to add Section 12096.25 to, to add Chapter 4.2 (commencing with Section 6315) and Chapter 4.3 (commencing with Section 6317) to Division 7 of Title 1 of, and to repeal Section 13997 of, the Government Code, relating to economic development.


LEGISLATIVE COUNSEL'S DIGEST


AB 1137, as amended, V. Manuel Pérez. Economic development: foreign trade.
Existing law authorizes any public corporation, as defined, and specified private corporations to apply for the privilege of establishing, operating, and maintaining a foreign-trade zone in accordance with specified provisions of federal law, and authorizes any public or private corporation whose application is granted pursuant to those provisions of federal law to establish, operate, and maintain the foreign trade zone, subject to specified conditions and restrictions.
This bill would require these provisions of existing law to be known, and would authorize them to be cited as, the California Foreign Free Trade Zone Act.
Existing law establishes in state government the Governor’s Office of Business and Economic Development. The office is under the direct control of the Director of the Governor’s Office of Business and Economic Development.
This bill would establish the California Foreign Investment Program, require the Secretary of Business, Transportation and Housing Governor’s Office of Business and Economic Development to serve as the lead state entity under specified provisions of the federal Immigration and Nationality Act, and require the secretary Director of the Governor’s Office of Business and Economic Development to set the terms and conditions for issuing a state designation letter within the structure and scope of those provisions of federal law.
This bill would also establish the California Export Promotion and Gap Financing Program, and authorize the secretary director to apply for and receive federal funding for the implementation of a state and federal export financing program. The bill would require the secretary director, upon receipt of moneys pursuant to that application, to implement a program that meets specified conditions. The bill would require the secretary director to report on the program, as specified, and to annually post on the agency’s office’s Internet Web site a summary of the programs, annual activities, and key achievements, and a summary of the information related to the requirements of the program. The bill would authorize the secretary director to adopt regulations to implement the program, as specified.
Existing law requires the Secretary of Business, Transportation and Housing to prepare a study on the potential role of the state in global markets. Existing law requires the secretary to utilize that study to develop a strategy for international trade and investment. Existing law requires the secretary to develop a statewide business partnership for international trade and investment. Existing law states that California’s international trade and investment policy is directed through its state strategy.
This bill would instead require that the Governor’s Office of Business and Economic Development serve as the state agency primarily responsible for international trade and investment activities in the state, and, in that capacity, authorizes that agency to carry out the powers and duties described above.
This bill would require California’s trade and investment policy to be implemented pursuant to the a strategy developed by the secretary director.
This bill would require the secretary director to consult with local and regional governmental entities and associations. This The bill would authorize the secretary director, as a part of the consultation process, to create an advisory board comprised of representatives from certain entities to provide the secretary on director with advice on the content of the study, and of on the strategy that the secretary director is developing. This The bill would require the secretary director as a part of the consultation to discuss certain issues related to trade and investment. This The bill would provide that this consultation may be conducted within the existing business partnership framework or separately, or both.
Existing law creates within the Business, Transportation and Housing Agency, the Economic Development and Trade Promotion Account.
This bill would transfer this account to the Governor’s Office of Business and Economic Development for the same purposes. The bill would create a new subaccount within the account for purposes of funding the California Export Promotion and Gap Financing Program, subject to appropriation by the Legislature.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 Section 6300 of the Government Code is amended to read:

6300.
 (a) This chapter shall be known and may be cited as the California Foreign Free Trade Zone Act.
(b) As used in this chapter, “public corporation” means the state, any political subdivision thereof, any incorporated municipality therein, any public agency of the state, of any political subdivision thereof, or of any municipality therein, or any corporate municipal instrumentality of this state or of this state and one or more other states.

SEC. 2.

 Chapter 4.2 (commencing with Section 6315) is added to Division 7 of Title 1 of the Government Code, to read:
CHAPTER  4.2. California Foreign Investment Program

6315.
 (a) This chapter shall be known and may be cited as the California Foreign Investment Program.
(b) (1)As used in this chapter, “public For purposes of this chapter:
(1) “Director” means the Director of the Governor’s Office of Business and Economic Development.
(2) “Office” means the Governor’s Office of Business and Economic Development.
(3) “Public corporation” means the state, any political subdivision thereof, any incorporated municipality therein, any public agency of the state, of any political subdivision thereof, or of any municipality therein, or any corporate municipal instrumentality of this state or of this state and one or more other states.

(2)As used in this chapter ,

(4) “EB-5 Program” means Section 203(b)(5) of the Immigration and Nationality Act (8 U.S.C. Sec. 1153(b)(5)).

6315.1.
 (a) The Secretary of Business, Transportation and Housing office shall serve as the lead state entity under the EB-5 Program. The secretary director shall set the terms and conditions for issuing a state designation letter within the structure and scope of the EB-5 Program.
(b) Any public or private corporation may apply for the privilege of establishing, operating, and maintaining a regional center in accordance with the EB-5 Program.
(c) (1) Any application for designation as a regional center shall be accompanied by a letter of support from the secretary director attesting to the legal status of the applicant and that the applicant has agreed to the reporting and monitoring terms of the Business, Transportation and Housing Agency office.
(2) The secretary director shall establish reporting and monitoring requirements, consistent with federal and state requirements, that, at a minimum, do the following: identify the number of businesses assisted, the size of those businesses by number of employees and gross revenues, and the number of jobs created and retained.
(d) The secretary director shall not sign any designation letter without the applicant first entering into an agreement with the agency office to meet the agency’s office’s reporting and monitoring requirements.
(e) The secretary director shall post on the agency’s office’s Internet Web site a list with contact information for each regional center applicant that receives a designation letter from the secretary director.

6315.2.
 (a) Any public or private corporation authorized by this chapter to apply to establish, operate, and maintain a regional center whose application is granted pursuant to the terms of the Immigration and Nationality Act may establish, operate, and maintain the regional center subject to the conditions and restrictions of the EB-5 Program, and any amendments thereto, and any conditions and restrictions established by the secretary director pursuant to this chapter.
(b) If authorized to establish, operate, and maintain a regional center, a public corporation may, in addition to its other powers, do either of the following:
(1) Provide for indemnity or assurance to the federal government or its agencies as they may request.
(2) Deposit moneys with the federal government, as the federal government or its agencies may request, provided those moneys are available by direct appropriation or otherwise.
(c) This section shall apply only to EB-5 activities of the state relating to the EB-5 Program occurring on or after January 1, 2012 2013.

SEC. 3.

 Chapter 4.3 (commencing with Section 6317) is added to Division 7 of Title 1 of the Government Code, to read:
CHAPTER  4.3. California Export Promotion and Gap Financing Program

6317.
 This chapter shall be known and may be cited as the California Export Promotion and Gap Financing Program.

6317.01.
 For purposes of this chapter:
(a) “Director” means the Director of the Governor’s Office of Business and Economic Development.
(b) “Office” means the Governor’s Office of Business and Economic Development.

6317.1.
 (a) The Secretary of Business, Transportation and Housing director may apply for and receive federal funding for the implementation of a state and federal promotion or export financing program. Upon receipt of any moneys pursuant to this application, the secretary director shall cause to be implemented a program that meets the conditions of the federal program and all of the following conditions:
(1) Development of the program shall include local governments, economic development organizations, trade organizations, financial institutions, small business organizations, the federal Small Business Administration, the federal Rural Development initiatives administered by the United States Department of Agriculture, and financial and community intermediaries that are engaged or could be engaged in trade development.
(2) Among other elements, the program shall also include all of the following:
(A) A clear statement of the program’s objectives.
(B) A method for establishing a baseline and measurement of whether the objective was achieved on an annual basis.
(C) Reporting requirements for assisted businesses consistent with the program’s objectives.
(D) An identification of related federal, state, and local programs that would add value to the overall program if implemented in a collaborative fashion.
(E) A method for ensuring program resources are available to all areas of the state.
(F) An identification of how the program helps to implement the state’s international trade and foreign investment strategy, adopted pursuant to Section 13996.55.
(3) In reporting on the program, the secretary director shall address, but not be limited to, the number of businesses assisted, the size of those businesses by number of employees and gross revenues, the number of jobs created and retained, and an estimate of the economic impact of the financial assistance.
(b) The secretary director shall annually, in any year that the program is active, post on the Business, Transportation and Housing Agency’s office’s Internet Web site a summary of the programs, annual activities, and key achievements, and a summary of the information related to the requirements of subdivision (a).
(c) The secretary director shall, during any year that the program is active, consult with, on a regular and frequent basis, county and city governments, particularly those that have foreign trade offices, in developing or participating in trade missions or promotional efforts established by counties, cities, or special districts.
(d) If the federal requirements prohibit any of the requirements of this act, the secretary director shall notify the relevant policy and fiscal committees of the Legislature about the federal programmatic limitation. The secretary director may waive any of the requirements of paragraph (2) of subdivision (a) if the secretary director determines doing so is necessary to fulfill federal requirements for the implementation of the export financing or promotion program.
(e) The secretary director may adopt regulations to implement the provisions of this chapter. The secretary director may adopt emergency regulations to implement the provisions of this chapter if necessary to meet the time lines established by the federal government.
(f) The director may enter into partnership agreements and interagency agreements in order to further the purposes of the program.
(g) (1) There is hereby created within the Economic Development and Trade Promotion Account, established pursuant to Section 12096.25, a subaccount called the Export Subaccount. Upon appropriation by the Legislature, the subaccount shall be used to pay for trade promotion and export assistance pursuant to this chapter, including, but not limited to, administrative costs of the office.
(2) All moneys received from the federal government, foundations, and other public or private funding sources for the purpose of implementing the program shall be deposited in the subaccount. All loan repayments and interest shall be deposited back into the subaccount. No General Fund moneys shall be deposited in the subaccount.
(3) The office may use existing staff to apply for funds from the federal government, foundations, and other public and private funding sources, upon a determination by the director that there is a high likelihood that the application will be successful.
(h) The office shall not commence operation of the program prior to the director making a determination that there is sufficient money in the account or subaccount to cover the costs of implementing the program, including, but not limited to, appropriate oversight costs.
(i) Upon appropriation by the Legislature, all or a portion of the funds in the subaccount may be allocated by the office, with the approval of the Department of Finance, to a lending institution or financial company that will act as trustee of the funds.

(f)

(j) This section shall apply only to agency office activities occurring on or after January 1, 2012 2013.

SEC. 4.

 Section 12096.25 is added to the Government Code, to read:

12096.25.
 (a) The director may accept private sector moneys in an amount not in excess of ten thousand dollars ($10,000) per donation made to the state for the purposes of promoting international trade and investment, subject to Title 9 (commencing with Section 81000), and not in excess of a total of ten thousand dollars ($10,000) per quarter per donor. All private sector moneys shall be used for these purposes but the donor may specify the international trade and investment office or international trade or investment event for which the private sector money shall be used. The private sector moneys shall be deposited into the Economic Development and Trade Promotion Account, which is hereby established in the Special Deposit Fund in the State Treasury. The director may expend moneys in the account, without regard to fiscal years, for the purposes of this section. Moneys in the Economic Development and Trade Promotion Account may be allocated to an international trade and investment office, and if so allocated shall be maintained by that office in an account. Notwithstanding any other law, the director may use the private sector moneys for expenses incurred to promote international trade and investment that will directly benefit California businesses. Records of donations received and expenditures made pursuant to this section shall be subject to public disclosure.
(b) The international trade and investment office using the funds shall memorialize the payment in a written record as follows:
(1) Identifies the donor and the official or officials receiving or using the payment.
(2) Describes the official office use and the nature and amount of each payment.
(3) Is filed with the office that maintains the records of the office’s statements of economic interests, and the filing is done within 30 days of the receipt of the payment by the office.
(c) Nothing in this section shall affect any requirement of the Political Reform Act (Title 9 (commencing with Section 81000)).

SEC. 4.SEC. 5.

 Section 13996.45 of the Government Code is amended to read:

13996.45.
 (a) (1) Subject to paragraph (2), and subject to Section 13996.75, the Business, Transportation and Housing Agency Governor’s Office of Business and Economic Development shall be the primary state agency entity authorized to do all of the following:
(A) Attract employment-producing foreign investment to the state.
(B) Cooperate in international public infrastructure projects.
(C) Provide support for California business in accessing international markets, including, but not limited to, export assistance.
(D) Engage in other trade or foreign investment related activities specifically assigned by the Governor.
(2) Nothing in this chapter shall be construed to confer powers or impose duties upon the agency entity in conflict with any powers conferred or duties imposed upon the Department of Food and Agriculture with respect to the promotion of California agriculture, fish, and forest exports.
(b) The international trade and investment activities of the agency shall be monitored by the Legislature, and all public moneys in its budget expended for those purposes, shall be subject to approval by the Legislature.
(c) The Secretary of Business, Transportation and Housing Director of the Governor’s Office of Business and Economic Development shall develop an international trade and investment policy, which shall be consistent with the economic development strategic plan prepared by the California Economic Strategy Panel pursuant to Section 15570, and shall provide guidance to strategies and plans from other agencies and departments related to workforce and infrastructure development.
(d) California’s international trade and investment policy shall be implemented through the strategy developed pursuant to Section 13996.55, which shall be based on current and emerging market conditions and the needs of investors, businesses, and workers to be competitive in global markets.

SEC. 5.SEC. 6.

 Section 13996.6 of the Government Code is amended to read:

13996.6.
 (a) The Legislature finds and declares that the quality and effectiveness of the state’s international trade and foreign investment programs and activities are highly dependent on establishing and maintaining an open dialogue with a broad range of trade-related stakeholders including, but not limited to, businesses, trade and business assistance programs, worker organizations, education and workforce training entities, and local governments.
(b) The Secretary of Business, Transportation and Housing Director of the Governor’s Office of Business and Economic Development shall convene a statewide business partnership for international trade and investment no later than March 1, 2007.
(1) The business partnership shall include representatives from small, medium, and large businesses and industries, as well as nongovernmental organizations and government representatives.
(2) The business partnership shall advise the secretary director on business needs and strategy priorities as they relate to international trade and investment. This information shall be used in establishing the needs and priorities in the plan developed pursuant to Section 13996.5 and the strategy developed pursuant to Section 13996.55, and for any other uses as determined by the secretary director.
(c) (1) The secretary director shall consult with local and regional governmental entities and associations, particularly those entities and organizations that have foreign trade economic development offices, or develop or regularly participate in trade missions and other promotional efforts.
(2) As part of the consultation process, the secretary director may establish an advisory board comprised of representatives from counties, cities, and special districts for the purpose of providing advice on the content of the plan developed pursuant to Section 13996.5, and the strategy developed pursuant to Section 13996.55.
(3) Key issues to be discussed include, but are not limited to, how the state and local entities can work collaboratively on issues including, but not limited to, target nations or industries for exports, foreign district investment, and integration of the EB-5 Program. Participation on the advisory committee would be without compensation for time or travel.
(4) Consultation with local and regional governments may be conducted within the business partnership framework separately, or both.

SEC. 7.

 Section 13997 of the Government Code is repealed.
13997.

(a)The Secretary of Business, Transportation and Housing may accept private sector moneys in an amount not in excess of ten thousand dollars ($10,000) per donation made to the state for the purposes of promoting international trade and investment, subject to Title 9 (commencing with Section 81000), and not in excess of a total of ten thousand dollars ($10,000) per quarter per donor. All private sector moneys shall be used for these purposes but the donor may specify the international trade and investment office or international trade or investment event for which the private sector money shall be used. The private sector moneys shall be deposited into the Economic Development and Trade Promotion Account, which is hereby established in the Special Deposit Fund in the State Treasury. The secretary may expend moneys in the account, without regard to fiscal years, for the purposes of this section. Moneys in the Economic Development and Trade Promotion Account may be allocated to an international trade and investment office, and if so allocated shall be maintained by that office in an account. Notwithstanding any other provision of law, the secretary may use the private sector moneys for expenses incurred to promote international trade and investment that will directly benefit California business. Records of donations received and expenditures made pursuant to this section shall be subject to public disclosure.

(b)The international trade and investment office using the funds shall memorialize the payment in a written record as follows:

(1)Identifies the donor and the official or officials receiving or using the payment.

(2)Describes the official agency use and the nature and amount of each payment.

(3)Is filed with the Business, Transportation and Housing Agency that maintains the records of the agency’s statements of economic interests, and the filing is done within 30 days of the receipt of the payment by the agency.

(c)Nothing in this section shall affect any requirement of the Political Reform Act (Title 9 (commencing with Section 81000)).