BILL NUMBER: AB 1862INTRODUCED 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 guaranteeunderpursuant 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.