SB 66

Bill Subjects

Abstract

The California Small Business Financial Development Corporation Law authorizes the formation of small business financial development corporations to grant loans or loan guarantees for the purpose of stimulating small business development. The California Small Business Expansion Fund, which is a continuously appropriated fund created under that law, provides funds to be used to pay for defaulted loan guarantees and administrative costs of these corporations, among other investments. Existing law authorizes moneys in that fund to be paid out to a lending institution or financial company that will act as trustee of the funds, as specified. Existing law, effective July 28, 2009, makes state money, as defined, in the California Small Business Expansion Fund and the trust fund unavailable for new loans, loan guarantees, or other investments and requires state money not needed to guarantee existing loans, to administer existing loans, or for other existing investments, as determined by the Director of Finance, to revert to the General Fund. This bill would specify that upon the reversion to the General Fund of a total of $8,300,000, the prohibition on the use of state money in these funds and the reversion requirement shall become inoperative. By making money in excess of that amount available from the fund for purposes of loans, loan guarantees, and other investments, the bill would make an appropriation. This bill would declare that it is to take effect immediately as an urgency statute.