00 HOUSE BILL NO. 288 01 "An Act establishing a small and medium business export finance assistance 02 program." 03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 04 * Section 1. AS 44 is amended by adding a new chapter to read: 05 Chapter 90. Small and Medium Business Export Finance Assistance Program. 06  Sec. 44.90.010. Legislative findings. The legislature finds that 07  (1) the exporting of goods and services from this state to international 08 markets, particularly Russia, is an important economic stimulus to the growth, 09 development, and stability of the state's businesses in both urban and rural areas, and 10 that these economic activities create needed jobs for the residents of the state; 11  (2) impediments to the entry of small and medium-sized businesses into 12 export markets have restricted growth in exports from the state; 13  (3) particularly significant impediments for many small and medium- 14 sized businesses are the lack of easily accessible information about export opportunities and 01 financing alternatives; 02  (4) there is a need for a small and medium business export finance 03 assistance program that will specialize in providing export assistance to small and 04 medium-sized businesses throughout the state by acquiring information about export 05 opportunities and financial alternatives for exporting, particularly to Russia. 06  Sec. 44.90.020. Small and medium business export finance assistance 07 program authorized; purposes. (a) A nonprofit corporation, to be known as the 08 small and medium business export finance assistance program, and branches subject 09 to its authority, may be formed under AS 10.20. Except as otherwise provided by this 10 chapter, the operation of the program is governed by AS 10.20. 11  (b) In addition to its powers under AS 10.20.011, the program shall 12  (1) assist small and medium-sized businesses in both urban and rural 13 areas in the financing of export transactions; 14  (2) provide, singly or in conjunction with other organizations, 15 information and assistance to the businesses identified in (1) of this subsection about 16 export opportunities and financing alternatives; 17  (3) provide information to and assist businesses identified in (1) of this 18 section interested in exporting products, including the opportunities available to them 19 in organizing export trading companies under 15 U.S.C. 4001 - 4053 (Export Trading 20 Company Act of 1982), for the purpose of increasing their comparative sales volume 21 and ability to export their products to foreign markets. 22  Sec. 44.90.030. Board of directors. (a) The program and its branches shall 23 be governed and managed by a board of 11 directors appointed by the governor. The 24 directors shall serve terms of six years. 25  (b) The directors shall be 26  (1) two representatives of state financial institutions engaged in the 27 financing of export transactions; 28  (2) the executive director of the authority; 29  (3) one representative of business from each judicial district in the 30 state; and 31  (4) one representative of the public selected from each judicial district 01 in the state. 02  (c) The representatives of businesses shall represent at least two different types 03 of businesses in different sized businesses as follows: 04  (1) one representative of a company employing fewer than 100 persons; 05 and 06  (2) one representative of a company employing between 100 and 500 07 persons. 08  (d) A vacancy on the board due to the expiration of a term or for another 09 reason shall be filled by appointment by the governor for the unexpired term. 10  (e) The directors may provide for the payment of their expenses. 11  Sec. 44.90.040. Powers and duties. (a) In exercising its powers under 12 AS 44.90.020(b), the program may 13  (1) provide export financial counseling to exporters in the state with 14 annual sales of $100,000,000 or less if counseling is not available from a for-profit 15 business in the state; 16  (2) contract with the federal government and its agencies to become a 17 program administrator for federally provided country risk insurance programs and for 18 the purposes of this chapter; and 19  (3) take whatever other action may be necessary to accomplish the 20 purposes of this chapter. 21  (b) The program shall make every effort to seek funds for its continued 22 operation that do not come from the treasury of the state. 23  (c) The program may receive gifts, grants, and endowments from public or 24 private sources as may be made from time to time, in trust or by other method, for the 25 use and benefit of the purposes of the program and may spend the money or any 26 income from the money according to the terms of the gifts, grants, or endowments. 27  Sec. 44.90.050. Export assistance services contract with department. (a) 28 Notwithstanding the procurement requirements of AS 36.30 (State Procurement Code), 29 the program shall enter into a contract under this chapter with the department. The 30 contract must require the program to provide export assistance services, consistent with 31 AS 44.90.060 - 44.90.120, must have a term of two years, and must require the 01 program to aggressively seek to fund its continued operation from funds that come 02 from the treasury of the state. The contract must also require the program to report 03 annually to the department on its success in obtaining funding from other sources. 04  (b) Notwithstanding the procurement requirements of AS 36.30, upon 05 expiration of the contract, any provisions within the contract applicable to the project 06 created under AS 44.90.070 shall be automatically renewed without change if the 07 legislature appropriates funds for administration of the program and the project. 08  (c) The provisions of the contract related to the project may be changed at any 09 time if the executive director of the authority or the president of the program presents 10 compelling reasons supporting the need for a contract change to the board of directors 11 and a majority of the board of directors agrees to the changes. 12  (d) The department and program shall report annually to the Alaska Legislative 13 Council on the progress of the project. 14  Sec. 44.90.060. Small and medium business export finance assistance 15 program fund. The small and medium business export finance assistance program 16 fund is created as a separate account in the general fund. The fund consists of 17 appropriations made to the fund by the legislature and other money received by the 18 fund. Subject to appropriation, expenditures from the fund may be used for the 19 purposes of funding the services of the program and the project under this chapter. 20 Only the president of the program or the president's designee may authorize 21 expenditures from the fund. The president of the program may not withhold funds 22 appropriated for the administration of the program and the project if the program 23 complies with the provisions of its contract under AS 44.90.050. Funding appropriated 24 by the state may not be used to provide services to other states or to foreign 25 governmental entities. 26  Sec. 44.90.070. State export assistance project. (a) The state export 27 assistance project is created to 28  (1) assist businesses that are relatively new to exporting and that have 29 gross annual revenues less than $25,000,000 with comprehensive services for designing 30 and managing introductory export strategies and in securing financing and credit 31 guarantees for export transactions; 01  (2) provide, in cooperation with the export promotion services offered 02 by the department, information and assistance to businesses with gross annual revenues 03 less than $25,000,000 about the methods and procedures of structuring company 04 specific export financing and credit guarantee alternatives; and 05  (3) provide information about opportunities in organizing cooperative 06 export networks, foreign sales corporations, or export trading companies under 07 15 U.S.C. 4001 - 4053 (Export Trading Company Act of 1982) for the purpose of 08 increasing comparative sales volume and the ability to export products to foreign 09 markets. 10  (b) The project is a separate branch of the program for accounting and auditing 11 purposes. 12  (c) The project is subject to the authority of the program under AS 44.90.020 13 and is governed and managed by the program's board of directors under AS 44.99.030. 14  (d) The project shall make every effort to obtain funds that are not from the 15 treasury of the state to fund its operations. 16  Sec. 44.90.080. Project duties and powers. (a) When exercising its authority 17 under AS 44.90.070(a)(3), the program may 18  (1) offer comprehensive export assistance and counseling to businesses 19 that are relatively new to exporting and that have gross annual revenues less than 20 $25,000,000; as close to 75 percent as possible of the program's new clients each year 21 must have gross annual revenues of less than $5,000,000 at the time of their initial 22 contract; counseling may include 23  (A) helping clients obtain debt or equity financing, constructing 24 competent proposals, and assessing federal guarantee and insurance programs 25 that underwrite exporting risk; 26  (B) advising clients on their products, guarantees, and post-sales 27 service requirements necessary to compete effectively in a foreign market; 28  (C) designing a competitive strategy for a firm's products in 29 targeted markets and methods of minimizing commercial and political risks; 30 and 31  (D) securing for clients specific assistance as needed, outside 01 the program's field of expertise, by referrals to other public or private 02 organizations. 03  (2) sign three-year counseling agreements with its clients that provide 04 for termination if adequate funding for the project is not provided in future 05 appropriations; counseling agreements may not be renewed unless there are compelling 06 reasons for renewal, and may not be renewed for more than two additional years; a 07 counseling agreement may not be renewed more than once; the counseling agreements 08 must have mutual performance clauses that, if not met, will be grounds for releasing 09 each party, without penalty, from the provisions of the agreement; a client shall be 10 immediately released from a counseling agreement with the project, without penalty, 11 if the client wishes to switch to a private export management service and produces a 12 valid contract signed with a private export management service, or if the president of 13 the program determines there are compelling reasons to release a client from the 14 provisions of the counseling agreement; 15  (3) contract with private or public international trade education services 16 to provide project clients with training in international business; the president and 17 board of directors of the program shall decide the amount of funding allocated for 18 educational services based on the availability of resources in the operating budget of 19 the project; 20  (4) provide biennial assessments of its performance; project personnel 21 shall work with the Department of Revenue and the Department of Labor to 22 confidentially track the performance of the project's clients in increasing tax revenues 23 to the state, increasing gross sales revenues and volume of products destined to foreign 24 clients, and in creating new jobs for state citizens; a biennial report shall be prepared 25 for the governor and legislature to assess the costs and benefits to the state from 26 creating the project; the president of the program shall design an appropriate 27 methodology for biennial assessments in consultation with the department; the 28 Department of Revenue and the Department of Labor shall provide data necessary to 29 complete the biennial evaluation, if the data being requested is available from existing 30 data bases; client-specific information generated from the files of the Department of 31 Revenue and the Department of Labor for the evaluation shall be kept strictly 01 confidential by each department and the program; and 02  (5) take whatever action may be necessary to accomplish the purposes 03 stated in AS 44.90.060 - 44.90.080. 04  (b) When exercising its authority under AS 44.90.070(a), the program shall 05 encourage the authority, the federal Small Business Administration, private financial 06 institutions experienced with international trade, the division of trade and development 07 of the department, and state, federal, and private organizations that promote 08 international trade to refer persons operating or interested in operating export 09 businesses to the program in order to avoid duplicating export programs and in order 10 to screen businesses for export financing assistance resources. 11  (c) The project may not provide counseling or assistance for the importation 12 of foreign made goods into the United States. 13  (d) The project shall focus its efforts on facilitating export transactions for its 14 clients and providing the technical services appropriate to accomplish its goals, either 15 with staff or outside consultants. 16  (e) The project may not assume ownership of or take title to the goods of its 17 clients. 18  (f) The program may solicit and receive gifts, grants, and endowments from 19 public or private sources as may be made from time to time, in trust or by other 20 method, for the use and benefit of the purposes of the project and spend the money 21 and any income from the money according to the terms of the gifts, grants, or 22 endowments. 23  Sec. 44.90.100. Emphasis on trade with Russia. When carrying out their 24 duties and powers under this chapter, the program and the project shall tailor their 25 programs to emphasize businesses exporting goods or services to Russia. 26  Sec. 44.90.110. Debts and use of funds. Debts of the program are program 27 debts only and may be satisfied only from the resources of the program. Debts of the 28 project are project debts only and may be satisfied only from the resources of the 29 project. The state is not liable for the debts of the program or the project. 30  Sec. 44.90.120. Fees for services. The program and the project are authorized 31 to charge reasonable fees for services. 01  Sec. 44.90.140. Regulations. The department may adopt regulations under 02 AS 44.62 (Administrative Procedure Act) to carry out the purposes of this chapter. 03  Sec. 44.90.190. Definitions. In this chapter, 04  (1) "authority" means the Alaska Industrial Development and Export 05 Authority created under AS 44.88.020; 06  (2) "department" means the Department of Commerce and Economic 07 Development; 08  (3) "program" means the small and medium business export finance 09 assistance program authorized under AS 44.90.020; 10  (4) "project" means the state export assistance project created under 11 AS 44.90.070. 12 * Sec. 2. TRANSITION. Notwithstanding AS 44.90.030, enacted by sec. 1 of this Act, 13 two of the initial directors who are appointed to the board of directors of the small and 14 medium business export finance assistance program under AS 44.90.030 shall serve for two 15 years and two shall serve for four years.