State Codes and Statutes

Statutes > California > Hsc > 44559-44559.11

HEALTH AND SAFETY CODE
SECTION 44559-44559.11



44559.  (a) The Legislature finds and declares that small businesses
are responsible for a significant amount of environmental emissions
in the state, but are less able than larger businesses to afford the
investment in new equipment or process modifications needed to comply
with environmental regulations, with regard to controlling
emissions, preventing the creation of pollutants, contaminants, or
waste products, and remediating contamination of properties with a
reasonable potential for economically beneficial reuse. Additionally,
small businesses faced with financial pressures will be likely to
reduce expenditures to achieve environmental compliance. Better
access to capital will allow small businesses to more easily comply
with environmental mandates, and to remediate contamination of
properties with a reasonable potential of economically beneficial
reuse, and to succeed economically, generating additional revenue to
state and local governments that can be used for environmental
improvements, all to the benefit of all the residents of the state.
   (b) The Legislature also finds and declares that it is in the best
interest of the state to expand the Capital Access Loan Program for
small business regardless of whether the operations of the small
business affect the environment, and to permit business loans to be
included in the program for small businesses whose operations do not,
necessarily, affect the environment. Small businesses have
difficulty gaining access to capital for startup and expansion
purposes. Small businesses owned by minorities and women have special
capital access difficulties. In addition, small businesses operating
in areas affected by military base closures are disadvantaged by
limited access to capital. The Legislature finds that improving
access to capital for these small businesses will spur investment,
create jobs, expand economic opportunities, assist in the recovery of
communities affected by defense and aerospace losses, assist in the
recovery of neighborhoods and communities affected by contaminated
properties that are not being used for economically beneficial
purposes but which could be so used if the contamination was
remediated, and help sustain and strengthen economic recovery in
California.



44559.1.  As used in this article, unless the context requires
otherwise, all of the following terms have the following meanings:
   (a) "Authority" means the California Pollution Control Financing
Authority.
   (b) "California Capital Access Fund" means a fund created within
the authority to be used for purposes of the program.
   (c) "Executive director" means the Executive Director of the
California Pollution Control Financing Authority.
   (d) (1) "Financial institution" means a federal- or
state-chartered bank, savings association, credit union,
not-for-profit community development financial institution certified
under Part 1805 (commencing with Section 1805.100) of Chapter XVIII
of Title 12 of the Code of Federal Regulations, or a consortium of
these entities. A consortium of those entities may include a
nonfinancial corporation, if the percentage of capitalization by all
nonfinancial corporations in the consortium does not exceed 49
percent.
   (2) "Financial institution" also includes a lending institution
that has executed a participation agreement with the Small Business
Administration under the guaranteed loan program pursuant to Part 120
(commencing with Section 120.1) of Chapter I of Title 13 of the Code
of Federal Regulations and meets the requirements of Section 120.410
of Chapter I of Title 13 of the Code of Federal Regulations, and a
small business investment company licensed pursuant to Part 107
(commencing with Section 107.20) of Chapter I of Title 13 of the Code
of Federal Regulations. For loans where all or part of the fees and
matching contributions are paid by an entity participating in the
program pursuant to subdivision (e) of Section 44559.2, "financial
institution" also includes financial lenders, as defined in Section
22009 of the Financial Code, making commercial loans, as defined in
Section 22502 of the Financial Code.
   (3) A financial institution described in paragraph (2) shall be
domiciled or have its principal office in the State of California.
   (e) "Loss reserve account" means an account in the State Treasury
or any financial institution that is established and maintained by
the authority for the benefit of a financial institution
participating in the Capital Access Loan Program established pursuant
to this article for the purposes of the following:
   (1) Depositing all required fees paid by the participating
financial institution and the qualified business.
   (2) Depositing contributions made by the state and, if applicable,
the federal government or other sources.
   (3) Covering losses on enrolled qualified loans sustained by the
participating financial institution by disbursing funds accumulated
in the loss reserve account.
   (f) "Participating financial institution" means a financial
institution that has been approved by the authority to enroll
qualified loans in the program and has agreed to all terms and
conditions set forth in this article and as may be required by any
applicable federal law providing matching funding.
   (g) "Passive real estate ownership" means ownership of real estate
for the purpose of deriving income from speculation, trade, or
rental, but does not include any of the following:
   (1) The ownership of that portion of real estate being used or
intended to be used for the operation of the business of the owner of
the real estate.
   (2) The ownership of real estate for the purpose of construction
or renovation, until the completion of the construction or renovation
phase.
   (h) "Program" means the Capital Access Loan Program created
pursuant to this article.
   (i) "Qualified business" means a small business concern that meets
both of the following criteria, regardless of whether the small
business concern has operations that affect the environment:
   (1) It is a corporation, partnership, cooperative, or other
entity, whether that entity is a nonprofit entity or an entity
established for profit, that is authorized to conduct business in the
state.
   (2) It has its primary business location within the boundaries of
the state.
   (j) (1) "Qualified loan" means a loan or a portion of a loan made
by a participating financial institution to a qualified business for
any business activity that has its primary economic effect in
California. A qualified loan may be made in the form of a line of
credit, in which case the participating financial institution shall
specify the amount of the line of credit to be covered under the
program, which may be equal to the maximum commitment under the line
of credit or an amount that is less than that maximum commitment. A
qualified loan made under the program may be made with the interest
rates, fees, and other terms and conditions agreed upon by the
participating financial institution and the borrower.
   (2) "Qualified loan" does not include any of the following:
   (A) A loan for the construction or purchase of residential
housing.
   (B) A loan to finance passive real estate ownership.
   (C) A loan for the refinancing of an existing loan when and to the
extent that the outstanding balance is not increased.
   (D) A loan, the proceeds of which will be used in any manner that
could cause the interest on any bonds previously issued by the
authority to become subject to federal income tax.
   (k) "Severely affected community" means any area classified as an
enterprise zone pursuant to the Enterprise Zone Act (Chapter 12.8
(commencing with Section 7070) of Division 7 of Title 1 of the
Government Code), any area, as designated by the executive director,
contiguous to the boundaries of a military base designated for
closure pursuant to Section 2687 of Title 10 of the United States
Code, as amended, and any other comparable economically distressed
geographic area so designated by the executive director from time to
time.
   (l) "Small Business Assistance Fund" means a fund created within
the authority pursuant to Section 44548.
   (m) "Small business concern" has the same meaning as in Section
632 of Title 15 of the United States Code, or as otherwise provided
in regulations of the authority.



44559.2.  (a) The authority may contract with any financial
institution for the purpose of allowing the financial institution to
participate in the Capital Access Loan Program established by this
article.
   (b) For purposes of this section, the authority may contract with
participating financial institutions and shall utilize a standard
form of contract that is reviewed and approved by the Department of
General Services. The standard form of contract shall provide for all
of the following:
   (1) The creation of a loss reserve account by the authority for
the benefit of the financial institution.
   (2) The financial institution, qualified business, and the
authority will deposit moneys to the credit of the institution's loss
reserve account when the financial institution makes a qualified
loan to a qualified business.
   (3) The liability of the state and the authority to the financial
institution under the contract is limited to the amount of money
credited to the loss reserve account of the institution.
   (4) The financial institution shall provide the information that
the authority may require, including financial information that is
identifiable with, or identifiable from the financial records of a
particular customer who is the recipient of a qualified loan. In
addition to any other information that the authority may require, the
financial institution shall provide the complete Standard Industrial
Classification (SIC) code for the qualified business and information
that provides the precise geographic location of both the qualified
business and the borrower, if different.
   (5) The financial institution will file a report with the
executive director setting out a full description of the board of
directors, including size, race, ethnicity, and gender.
   (6) The participating financial institution will require each
borrower, prior to receiving a loan under the program, to sign a
written representation to the participating financial institution
that the borrower has no legal, beneficial, or equitable interest in
the nonrefundable premium charges or any other funds credited to the
loss reserve account established by the authority for the
participating financial institution.
   (7) Other terms that the authority may require for purposes of
this article.
   (c) A financial institution is not subject to laws restricting the
disclosure of financial information when the financial institution
provides information to the authority as required by paragraph (4) of
subdivision (b).
   (d) A credit union operating pursuant to a certificate issued
under the California Credit Union Law (Division 5 (commencing with
Section 14000) of the Financial Code) may participate in the Capital
Access Loan Program established pursuant to this article only to the
extent participation is in compliance with the California Credit
Union Law. Nothing in this article shall be construed to limit the
authority of the Commissioner of Financial Institutions to regulate
credit unions subject to the commissioner's jurisdiction under the
California Credit Union Law.
   (e) Any individual, company, corporation, institution, utility,
government agency, or other entity, including any consortium of these
persons or entities, whether public or private, may participate in
the Capital Access Loan Program established pursuant to this article
by depositing funds in the California Capital Access Fund under those
terms and conditions as may be deemed appropriate by the authority.



44559.3.  (a) The authority shall establish a loss reserve account
for each financial institution with which the authority makes a
contract.
   (b) The loss reserve account for a financial institution shall
consist of moneys paid as fees by borrowers and the financial
institution, moneys transferred to the account from a small business
assistance fund, any matching federal moneys, and any other moneys
provided by the authority or other source.
   (c) Notwithstanding any other provision of law, the authority may
establish and maintain loss reserve accounts with any financial
institution under such policies as the authority may adopt.
   (d) All moneys in a loss reserve account established pursuant to
this article are the exclusive property of, and solely controlled by,
the authority. Interest or income earned on moneys credited to the
loss reserve account shall be deemed to be part of the loss reserve
account. The authority may withdraw from the loss reserve account all
interest or other income that has been credited to the loss reserve
account. Any withdrawal made pursuant to this subdivision may be made
prior to paying any claim and shall be used for the sole purpose of
offsetting costs associated with carrying out the program, including
administrative costs and loss reserve account contributions.
   (e) The combined amount to be deposited by the participating
financial institution into any individual loss reserve account over a
three-year period, in connection with any single borrower or any
group of borrowers among which a common enterprise exists, shall be
not more than one hundred thousand dollars ($100,000).



44559.4.  (a) If a financial institution that is participating in
the Capital Access Loan Program established pursuant to this article
decides to enroll a qualified loan under the program in order to
obtain the protection against loss provided by its loss reserve
account, it shall notify the authority in writing on a form
prescribed by the authority, within 10 days after the date on which
the loan is made, of all of the following:
   (1) The disbursement of the loan.
   (2) The dollar amount of the loan enrolled.
   (3) The interest rate applicable to, and the term of, the loan.
   (4) The amount of the agreed upon premium.
   (b) The financial institution may make a qualified loan to be
enrolled under the program to an individual, or to a partnership or
trust wholly owned or controlled by an individual, for the purpose of
financing property that will be leased to a qualified business that
is wholly owned by that individual. In that case, the property shall
be treated as meeting the requirements of paragraph (1) of
subdivision (g) of Section 44559.1.
   (c) When making a qualified loan that will be enrolled under the
program, the participating financial institution shall require the
qualified business to which the loan is made to pay a fee of not less
than 2 percent of the principal amount of the loan, but not more
than 3 1/2 percent of the principal amount. The financial institution
shall also pay a fee in an amount equal to the fee paid by the
borrower. The financial institution shall deliver the fees collected
under this subdivision to the authority for deposit in the loss
reserve account for the institution. The financial institution may
recover from the borrower the cost of its payments to the loss
reserve account through the financing of the loan, upon the agreement
of the financial institution and the borrower. The financial
institution may cover the cost of borrower payments to the loan loss
reserve account.
   (d) When depositing fees collected under subdivision (c) to the
credit of the loss reserve account for a participating financial
institution, the authority shall do the following:
   (1) If no matching funds are available under a federal capital
access program or other source, the authority shall transfer to the
loss reserve account an amount that is not less than the amount of
the fees paid by the participating financial institution. However, if
the qualified business is located within a severely affected
community, the authority shall transfer to the loss reserve account
an amount equal to 150 percent of the amount of the fees paid by the
participating financial institution.
   (2) If matching funds are available under a federal capital access
program or other source, the authority shall transfer, on an
immediate or deferred basis, to the loss reserve account the amount
required by that federal program or other source. However, the total
amount deposited into the loss reserve account shall not be less than
the amount which would have been deposited in the absence of
matching funds.



44559.5.  (a) The authority shall establish procedures under which
financial institutions participating in the program established
pursuant to this article may submit claims for reimbursement for
losses incurred as a result of qualified loan defaults. A
participating financial institution that charges off all or part of
an enrolled loan to the loss reserve account may file a claim for
reimbursement with the authority if both of the following conditions
are met:
   (1) The claim occurs contemporaneously with the action of the
participating financial institution to charge off all or part of the
loan.
   (2) The charge off on an enrolled loan is made in a manner that is
consistent with the participating financial institution's usual
method for making determinations on business loans that are not
enrolled loans.
   (b) Costs for which a financial institution may be reimbursed from
its loss reserve account include the amount of loan principal
charged off, accrued interest on the principal, reasonable
out-of-pocket expenses incurred in pursuing its collection efforts,
including preservation of collateral, and any other related costs.
Proper documentation of the expenses shall be presented at the time
of the claim.
   (c) If a participating financial institution files two or more
claims contemporaneously, and there are insufficient funds in the
reserve fund at that time to cover the entire amount of such claims,
the institution may designate the order of priority in which the
claims shall be paid.
   (d) A financial institution may seek reimbursement of loan losses
prior to the liquidation of collateral from defaulted loans. The
financial institution shall repay its loss reserve account for any
moneys received as reimbursement under this section if the financial
institution recovers moneys from the borrower or from the liquidation
of collateral for the defaulted loan, less any reasonable
out-of-pocket expenses incurred in collection of such amount.
   (e) In any case in which the payment of a claim under this section
has fully covered a participating financial institution's loss on an
enrolled loan, the participating financial institution shall assign
to the authority, and to any applicable federal agency in the event
federal matching funds are involved, any right, title, or interest to
any collateral, security, or other right of recovery in connection
with a loan made under the program.
   (f) The executive director may adopt necessary rules for the
authority to carry out its duties, functions, and powers relating to
the program established pursuant to this article.



44559.6.  The authority shall annually prepare a report to the
Governor and the Legislature that describes the financial condition
and programmatic results of the capital access loan program for small
businesses authorized under this article.




44559.7.  The authority may enter into agreements with commercial
banks or other financial institutions, or with other agencies of the
state, to provide necessary assistance in carrying out the program
authorized by this article, including origination and servicing of
loans.



44559.8.  Notwithstanding this article, the authority may facilitate
the development of a secondary market for a loan enrolled in the
capital access loan program by providing security for that loan,
thereby increasing participation in the program by financial
institutions and improving access to capital for small businesses.
For purposes of this section, the actions that the authority may take
include, but are not necessarily limited to, assigning all, or a
portion of, any loss reserve account to any other entity in
connection with providing security for a loan, including a trustee of
a securitization trust, transferring an enrolled loan from a
participating financial institution to a securitization trust, and
assisting underwriters in marketing a loan to the secondary market.



44559.9.  The authority shall expand the Capital Access Loan Program
established by this article to include outreach to financial
institutions that service agricultural interests in the state for the
purpose of funding air pollution control measures.




44559.11.  It is the intent of the Legislature to ensure that the
state, through the authority, may make maximum, efficient use of
capital access programs enacted by all federal and state agencies, as
well as funding available from any governmental program whose goals
may be advanced by providing funding to the Capital Access Loan
Program. In furtherance of this intent, and not withstanding any
other provision of this article, when the contributions required
pursuant to subdivision (c) of Section 44559.4 are entirely funded by
a source other than the authority, the authority may, by regulation
adopted pursuant to subdivision (b) of Section 44520, establish
alternate provisions as necessary to enable the authority to
participate in the alternative funding source program.


State Codes and Statutes

Statutes > California > Hsc > 44559-44559.11

HEALTH AND SAFETY CODE
SECTION 44559-44559.11



44559.  (a) The Legislature finds and declares that small businesses
are responsible for a significant amount of environmental emissions
in the state, but are less able than larger businesses to afford the
investment in new equipment or process modifications needed to comply
with environmental regulations, with regard to controlling
emissions, preventing the creation of pollutants, contaminants, or
waste products, and remediating contamination of properties with a
reasonable potential for economically beneficial reuse. Additionally,
small businesses faced with financial pressures will be likely to
reduce expenditures to achieve environmental compliance. Better
access to capital will allow small businesses to more easily comply
with environmental mandates, and to remediate contamination of
properties with a reasonable potential of economically beneficial
reuse, and to succeed economically, generating additional revenue to
state and local governments that can be used for environmental
improvements, all to the benefit of all the residents of the state.
   (b) The Legislature also finds and declares that it is in the best
interest of the state to expand the Capital Access Loan Program for
small business regardless of whether the operations of the small
business affect the environment, and to permit business loans to be
included in the program for small businesses whose operations do not,
necessarily, affect the environment. Small businesses have
difficulty gaining access to capital for startup and expansion
purposes. Small businesses owned by minorities and women have special
capital access difficulties. In addition, small businesses operating
in areas affected by military base closures are disadvantaged by
limited access to capital. The Legislature finds that improving
access to capital for these small businesses will spur investment,
create jobs, expand economic opportunities, assist in the recovery of
communities affected by defense and aerospace losses, assist in the
recovery of neighborhoods and communities affected by contaminated
properties that are not being used for economically beneficial
purposes but which could be so used if the contamination was
remediated, and help sustain and strengthen economic recovery in
California.



44559.1.  As used in this article, unless the context requires
otherwise, all of the following terms have the following meanings:
   (a) "Authority" means the California Pollution Control Financing
Authority.
   (b) "California Capital Access Fund" means a fund created within
the authority to be used for purposes of the program.
   (c) "Executive director" means the Executive Director of the
California Pollution Control Financing Authority.
   (d) (1) "Financial institution" means a federal- or
state-chartered bank, savings association, credit union,
not-for-profit community development financial institution certified
under Part 1805 (commencing with Section 1805.100) of Chapter XVIII
of Title 12 of the Code of Federal Regulations, or a consortium of
these entities. A consortium of those entities may include a
nonfinancial corporation, if the percentage of capitalization by all
nonfinancial corporations in the consortium does not exceed 49
percent.
   (2) "Financial institution" also includes a lending institution
that has executed a participation agreement with the Small Business
Administration under the guaranteed loan program pursuant to Part 120
(commencing with Section 120.1) of Chapter I of Title 13 of the Code
of Federal Regulations and meets the requirements of Section 120.410
of Chapter I of Title 13 of the Code of Federal Regulations, and a
small business investment company licensed pursuant to Part 107
(commencing with Section 107.20) of Chapter I of Title 13 of the Code
of Federal Regulations. For loans where all or part of the fees and
matching contributions are paid by an entity participating in the
program pursuant to subdivision (e) of Section 44559.2, "financial
institution" also includes financial lenders, as defined in Section
22009 of the Financial Code, making commercial loans, as defined in
Section 22502 of the Financial Code.
   (3) A financial institution described in paragraph (2) shall be
domiciled or have its principal office in the State of California.
   (e) "Loss reserve account" means an account in the State Treasury
or any financial institution that is established and maintained by
the authority for the benefit of a financial institution
participating in the Capital Access Loan Program established pursuant
to this article for the purposes of the following:
   (1) Depositing all required fees paid by the participating
financial institution and the qualified business.
   (2) Depositing contributions made by the state and, if applicable,
the federal government or other sources.
   (3) Covering losses on enrolled qualified loans sustained by the
participating financial institution by disbursing funds accumulated
in the loss reserve account.
   (f) "Participating financial institution" means a financial
institution that has been approved by the authority to enroll
qualified loans in the program and has agreed to all terms and
conditions set forth in this article and as may be required by any
applicable federal law providing matching funding.
   (g) "Passive real estate ownership" means ownership of real estate
for the purpose of deriving income from speculation, trade, or
rental, but does not include any of the following:
   (1) The ownership of that portion of real estate being used or
intended to be used for the operation of the business of the owner of
the real estate.
   (2) The ownership of real estate for the purpose of construction
or renovation, until the completion of the construction or renovation
phase.
   (h) "Program" means the Capital Access Loan Program created
pursuant to this article.
   (i) "Qualified business" means a small business concern that meets
both of the following criteria, regardless of whether the small
business concern has operations that affect the environment:
   (1) It is a corporation, partnership, cooperative, or other
entity, whether that entity is a nonprofit entity or an entity
established for profit, that is authorized to conduct business in the
state.
   (2) It has its primary business location within the boundaries of
the state.
   (j) (1) "Qualified loan" means a loan or a portion of a loan made
by a participating financial institution to a qualified business for
any business activity that has its primary economic effect in
California. A qualified loan may be made in the form of a line of
credit, in which case the participating financial institution shall
specify the amount of the line of credit to be covered under the
program, which may be equal to the maximum commitment under the line
of credit or an amount that is less than that maximum commitment. A
qualified loan made under the program may be made with the interest
rates, fees, and other terms and conditions agreed upon by the
participating financial institution and the borrower.
   (2) "Qualified loan" does not include any of the following:
   (A) A loan for the construction or purchase of residential
housing.
   (B) A loan to finance passive real estate ownership.
   (C) A loan for the refinancing of an existing loan when and to the
extent that the outstanding balance is not increased.
   (D) A loan, the proceeds of which will be used in any manner that
could cause the interest on any bonds previously issued by the
authority to become subject to federal income tax.
   (k) "Severely affected community" means any area classified as an
enterprise zone pursuant to the Enterprise Zone Act (Chapter 12.8
(commencing with Section 7070) of Division 7 of Title 1 of the
Government Code), any area, as designated by the executive director,
contiguous to the boundaries of a military base designated for
closure pursuant to Section 2687 of Title 10 of the United States
Code, as amended, and any other comparable economically distressed
geographic area so designated by the executive director from time to
time.
   (l) "Small Business Assistance Fund" means a fund created within
the authority pursuant to Section 44548.
   (m) "Small business concern" has the same meaning as in Section
632 of Title 15 of the United States Code, or as otherwise provided
in regulations of the authority.



44559.2.  (a) The authority may contract with any financial
institution for the purpose of allowing the financial institution to
participate in the Capital Access Loan Program established by this
article.
   (b) For purposes of this section, the authority may contract with
participating financial institutions and shall utilize a standard
form of contract that is reviewed and approved by the Department of
General Services. The standard form of contract shall provide for all
of the following:
   (1) The creation of a loss reserve account by the authority for
the benefit of the financial institution.
   (2) The financial institution, qualified business, and the
authority will deposit moneys to the credit of the institution's loss
reserve account when the financial institution makes a qualified
loan to a qualified business.
   (3) The liability of the state and the authority to the financial
institution under the contract is limited to the amount of money
credited to the loss reserve account of the institution.
   (4) The financial institution shall provide the information that
the authority may require, including financial information that is
identifiable with, or identifiable from the financial records of a
particular customer who is the recipient of a qualified loan. In
addition to any other information that the authority may require, the
financial institution shall provide the complete Standard Industrial
Classification (SIC) code for the qualified business and information
that provides the precise geographic location of both the qualified
business and the borrower, if different.
   (5) The financial institution will file a report with the
executive director setting out a full description of the board of
directors, including size, race, ethnicity, and gender.
   (6) The participating financial institution will require each
borrower, prior to receiving a loan under the program, to sign a
written representation to the participating financial institution
that the borrower has no legal, beneficial, or equitable interest in
the nonrefundable premium charges or any other funds credited to the
loss reserve account established by the authority for the
participating financial institution.
   (7) Other terms that the authority may require for purposes of
this article.
   (c) A financial institution is not subject to laws restricting the
disclosure of financial information when the financial institution
provides information to the authority as required by paragraph (4) of
subdivision (b).
   (d) A credit union operating pursuant to a certificate issued
under the California Credit Union Law (Division 5 (commencing with
Section 14000) of the Financial Code) may participate in the Capital
Access Loan Program established pursuant to this article only to the
extent participation is in compliance with the California Credit
Union Law. Nothing in this article shall be construed to limit the
authority of the Commissioner of Financial Institutions to regulate
credit unions subject to the commissioner's jurisdiction under the
California Credit Union Law.
   (e) Any individual, company, corporation, institution, utility,
government agency, or other entity, including any consortium of these
persons or entities, whether public or private, may participate in
the Capital Access Loan Program established pursuant to this article
by depositing funds in the California Capital Access Fund under those
terms and conditions as may be deemed appropriate by the authority.



44559.3.  (a) The authority shall establish a loss reserve account
for each financial institution with which the authority makes a
contract.
   (b) The loss reserve account for a financial institution shall
consist of moneys paid as fees by borrowers and the financial
institution, moneys transferred to the account from a small business
assistance fund, any matching federal moneys, and any other moneys
provided by the authority or other source.
   (c) Notwithstanding any other provision of law, the authority may
establish and maintain loss reserve accounts with any financial
institution under such policies as the authority may adopt.
   (d) All moneys in a loss reserve account established pursuant to
this article are the exclusive property of, and solely controlled by,
the authority. Interest or income earned on moneys credited to the
loss reserve account shall be deemed to be part of the loss reserve
account. The authority may withdraw from the loss reserve account all
interest or other income that has been credited to the loss reserve
account. Any withdrawal made pursuant to this subdivision may be made
prior to paying any claim and shall be used for the sole purpose of
offsetting costs associated with carrying out the program, including
administrative costs and loss reserve account contributions.
   (e) The combined amount to be deposited by the participating
financial institution into any individual loss reserve account over a
three-year period, in connection with any single borrower or any
group of borrowers among which a common enterprise exists, shall be
not more than one hundred thousand dollars ($100,000).



44559.4.  (a) If a financial institution that is participating in
the Capital Access Loan Program established pursuant to this article
decides to enroll a qualified loan under the program in order to
obtain the protection against loss provided by its loss reserve
account, it shall notify the authority in writing on a form
prescribed by the authority, within 10 days after the date on which
the loan is made, of all of the following:
   (1) The disbursement of the loan.
   (2) The dollar amount of the loan enrolled.
   (3) The interest rate applicable to, and the term of, the loan.
   (4) The amount of the agreed upon premium.
   (b) The financial institution may make a qualified loan to be
enrolled under the program to an individual, or to a partnership or
trust wholly owned or controlled by an individual, for the purpose of
financing property that will be leased to a qualified business that
is wholly owned by that individual. In that case, the property shall
be treated as meeting the requirements of paragraph (1) of
subdivision (g) of Section 44559.1.
   (c) When making a qualified loan that will be enrolled under the
program, the participating financial institution shall require the
qualified business to which the loan is made to pay a fee of not less
than 2 percent of the principal amount of the loan, but not more
than 3 1/2 percent of the principal amount. The financial institution
shall also pay a fee in an amount equal to the fee paid by the
borrower. The financial institution shall deliver the fees collected
under this subdivision to the authority for deposit in the loss
reserve account for the institution. The financial institution may
recover from the borrower the cost of its payments to the loss
reserve account through the financing of the loan, upon the agreement
of the financial institution and the borrower. The financial
institution may cover the cost of borrower payments to the loan loss
reserve account.
   (d) When depositing fees collected under subdivision (c) to the
credit of the loss reserve account for a participating financial
institution, the authority shall do the following:
   (1) If no matching funds are available under a federal capital
access program or other source, the authority shall transfer to the
loss reserve account an amount that is not less than the amount of
the fees paid by the participating financial institution. However, if
the qualified business is located within a severely affected
community, the authority shall transfer to the loss reserve account
an amount equal to 150 percent of the amount of the fees paid by the
participating financial institution.
   (2) If matching funds are available under a federal capital access
program or other source, the authority shall transfer, on an
immediate or deferred basis, to the loss reserve account the amount
required by that federal program or other source. However, the total
amount deposited into the loss reserve account shall not be less than
the amount which would have been deposited in the absence of
matching funds.



44559.5.  (a) The authority shall establish procedures under which
financial institutions participating in the program established
pursuant to this article may submit claims for reimbursement for
losses incurred as a result of qualified loan defaults. A
participating financial institution that charges off all or part of
an enrolled loan to the loss reserve account may file a claim for
reimbursement with the authority if both of the following conditions
are met:
   (1) The claim occurs contemporaneously with the action of the
participating financial institution to charge off all or part of the
loan.
   (2) The charge off on an enrolled loan is made in a manner that is
consistent with the participating financial institution's usual
method for making determinations on business loans that are not
enrolled loans.
   (b) Costs for which a financial institution may be reimbursed from
its loss reserve account include the amount of loan principal
charged off, accrued interest on the principal, reasonable
out-of-pocket expenses incurred in pursuing its collection efforts,
including preservation of collateral, and any other related costs.
Proper documentation of the expenses shall be presented at the time
of the claim.
   (c) If a participating financial institution files two or more
claims contemporaneously, and there are insufficient funds in the
reserve fund at that time to cover the entire amount of such claims,
the institution may designate the order of priority in which the
claims shall be paid.
   (d) A financial institution may seek reimbursement of loan losses
prior to the liquidation of collateral from defaulted loans. The
financial institution shall repay its loss reserve account for any
moneys received as reimbursement under this section if the financial
institution recovers moneys from the borrower or from the liquidation
of collateral for the defaulted loan, less any reasonable
out-of-pocket expenses incurred in collection of such amount.
   (e) In any case in which the payment of a claim under this section
has fully covered a participating financial institution's loss on an
enrolled loan, the participating financial institution shall assign
to the authority, and to any applicable federal agency in the event
federal matching funds are involved, any right, title, or interest to
any collateral, security, or other right of recovery in connection
with a loan made under the program.
   (f) The executive director may adopt necessary rules for the
authority to carry out its duties, functions, and powers relating to
the program established pursuant to this article.



44559.6.  The authority shall annually prepare a report to the
Governor and the Legislature that describes the financial condition
and programmatic results of the capital access loan program for small
businesses authorized under this article.




44559.7.  The authority may enter into agreements with commercial
banks or other financial institutions, or with other agencies of the
state, to provide necessary assistance in carrying out the program
authorized by this article, including origination and servicing of
loans.



44559.8.  Notwithstanding this article, the authority may facilitate
the development of a secondary market for a loan enrolled in the
capital access loan program by providing security for that loan,
thereby increasing participation in the program by financial
institutions and improving access to capital for small businesses.
For purposes of this section, the actions that the authority may take
include, but are not necessarily limited to, assigning all, or a
portion of, any loss reserve account to any other entity in
connection with providing security for a loan, including a trustee of
a securitization trust, transferring an enrolled loan from a
participating financial institution to a securitization trust, and
assisting underwriters in marketing a loan to the secondary market.



44559.9.  The authority shall expand the Capital Access Loan Program
established by this article to include outreach to financial
institutions that service agricultural interests in the state for the
purpose of funding air pollution control measures.




44559.11.  It is the intent of the Legislature to ensure that the
state, through the authority, may make maximum, efficient use of
capital access programs enacted by all federal and state agencies, as
well as funding available from any governmental program whose goals
may be advanced by providing funding to the Capital Access Loan
Program. In furtherance of this intent, and not withstanding any
other provision of this article, when the contributions required
pursuant to subdivision (c) of Section 44559.4 are entirely funded by
a source other than the authority, the authority may, by regulation
adopted pursuant to subdivision (b) of Section 44520, establish
alternate provisions as necessary to enable the authority to
participate in the alternative funding source program.



State Codes and Statutes

State Codes and Statutes

Statutes > California > Hsc > 44559-44559.11

HEALTH AND SAFETY CODE
SECTION 44559-44559.11



44559.  (a) The Legislature finds and declares that small businesses
are responsible for a significant amount of environmental emissions
in the state, but are less able than larger businesses to afford the
investment in new equipment or process modifications needed to comply
with environmental regulations, with regard to controlling
emissions, preventing the creation of pollutants, contaminants, or
waste products, and remediating contamination of properties with a
reasonable potential for economically beneficial reuse. Additionally,
small businesses faced with financial pressures will be likely to
reduce expenditures to achieve environmental compliance. Better
access to capital will allow small businesses to more easily comply
with environmental mandates, and to remediate contamination of
properties with a reasonable potential of economically beneficial
reuse, and to succeed economically, generating additional revenue to
state and local governments that can be used for environmental
improvements, all to the benefit of all the residents of the state.
   (b) The Legislature also finds and declares that it is in the best
interest of the state to expand the Capital Access Loan Program for
small business regardless of whether the operations of the small
business affect the environment, and to permit business loans to be
included in the program for small businesses whose operations do not,
necessarily, affect the environment. Small businesses have
difficulty gaining access to capital for startup and expansion
purposes. Small businesses owned by minorities and women have special
capital access difficulties. In addition, small businesses operating
in areas affected by military base closures are disadvantaged by
limited access to capital. The Legislature finds that improving
access to capital for these small businesses will spur investment,
create jobs, expand economic opportunities, assist in the recovery of
communities affected by defense and aerospace losses, assist in the
recovery of neighborhoods and communities affected by contaminated
properties that are not being used for economically beneficial
purposes but which could be so used if the contamination was
remediated, and help sustain and strengthen economic recovery in
California.



44559.1.  As used in this article, unless the context requires
otherwise, all of the following terms have the following meanings:
   (a) "Authority" means the California Pollution Control Financing
Authority.
   (b) "California Capital Access Fund" means a fund created within
the authority to be used for purposes of the program.
   (c) "Executive director" means the Executive Director of the
California Pollution Control Financing Authority.
   (d) (1) "Financial institution" means a federal- or
state-chartered bank, savings association, credit union,
not-for-profit community development financial institution certified
under Part 1805 (commencing with Section 1805.100) of Chapter XVIII
of Title 12 of the Code of Federal Regulations, or a consortium of
these entities. A consortium of those entities may include a
nonfinancial corporation, if the percentage of capitalization by all
nonfinancial corporations in the consortium does not exceed 49
percent.
   (2) "Financial institution" also includes a lending institution
that has executed a participation agreement with the Small Business
Administration under the guaranteed loan program pursuant to Part 120
(commencing with Section 120.1) of Chapter I of Title 13 of the Code
of Federal Regulations and meets the requirements of Section 120.410
of Chapter I of Title 13 of the Code of Federal Regulations, and a
small business investment company licensed pursuant to Part 107
(commencing with Section 107.20) of Chapter I of Title 13 of the Code
of Federal Regulations. For loans where all or part of the fees and
matching contributions are paid by an entity participating in the
program pursuant to subdivision (e) of Section 44559.2, "financial
institution" also includes financial lenders, as defined in Section
22009 of the Financial Code, making commercial loans, as defined in
Section 22502 of the Financial Code.
   (3) A financial institution described in paragraph (2) shall be
domiciled or have its principal office in the State of California.
   (e) "Loss reserve account" means an account in the State Treasury
or any financial institution that is established and maintained by
the authority for the benefit of a financial institution
participating in the Capital Access Loan Program established pursuant
to this article for the purposes of the following:
   (1) Depositing all required fees paid by the participating
financial institution and the qualified business.
   (2) Depositing contributions made by the state and, if applicable,
the federal government or other sources.
   (3) Covering losses on enrolled qualified loans sustained by the
participating financial institution by disbursing funds accumulated
in the loss reserve account.
   (f) "Participating financial institution" means a financial
institution that has been approved by the authority to enroll
qualified loans in the program and has agreed to all terms and
conditions set forth in this article and as may be required by any
applicable federal law providing matching funding.
   (g) "Passive real estate ownership" means ownership of real estate
for the purpose of deriving income from speculation, trade, or
rental, but does not include any of the following:
   (1) The ownership of that portion of real estate being used or
intended to be used for the operation of the business of the owner of
the real estate.
   (2) The ownership of real estate for the purpose of construction
or renovation, until the completion of the construction or renovation
phase.
   (h) "Program" means the Capital Access Loan Program created
pursuant to this article.
   (i) "Qualified business" means a small business concern that meets
both of the following criteria, regardless of whether the small
business concern has operations that affect the environment:
   (1) It is a corporation, partnership, cooperative, or other
entity, whether that entity is a nonprofit entity or an entity
established for profit, that is authorized to conduct business in the
state.
   (2) It has its primary business location within the boundaries of
the state.
   (j) (1) "Qualified loan" means a loan or a portion of a loan made
by a participating financial institution to a qualified business for
any business activity that has its primary economic effect in
California. A qualified loan may be made in the form of a line of
credit, in which case the participating financial institution shall
specify the amount of the line of credit to be covered under the
program, which may be equal to the maximum commitment under the line
of credit or an amount that is less than that maximum commitment. A
qualified loan made under the program may be made with the interest
rates, fees, and other terms and conditions agreed upon by the
participating financial institution and the borrower.
   (2) "Qualified loan" does not include any of the following:
   (A) A loan for the construction or purchase of residential
housing.
   (B) A loan to finance passive real estate ownership.
   (C) A loan for the refinancing of an existing loan when and to the
extent that the outstanding balance is not increased.
   (D) A loan, the proceeds of which will be used in any manner that
could cause the interest on any bonds previously issued by the
authority to become subject to federal income tax.
   (k) "Severely affected community" means any area classified as an
enterprise zone pursuant to the Enterprise Zone Act (Chapter 12.8
(commencing with Section 7070) of Division 7 of Title 1 of the
Government Code), any area, as designated by the executive director,
contiguous to the boundaries of a military base designated for
closure pursuant to Section 2687 of Title 10 of the United States
Code, as amended, and any other comparable economically distressed
geographic area so designated by the executive director from time to
time.
   (l) "Small Business Assistance Fund" means a fund created within
the authority pursuant to Section 44548.
   (m) "Small business concern" has the same meaning as in Section
632 of Title 15 of the United States Code, or as otherwise provided
in regulations of the authority.



44559.2.  (a) The authority may contract with any financial
institution for the purpose of allowing the financial institution to
participate in the Capital Access Loan Program established by this
article.
   (b) For purposes of this section, the authority may contract with
participating financial institutions and shall utilize a standard
form of contract that is reviewed and approved by the Department of
General Services. The standard form of contract shall provide for all
of the following:
   (1) The creation of a loss reserve account by the authority for
the benefit of the financial institution.
   (2) The financial institution, qualified business, and the
authority will deposit moneys to the credit of the institution's loss
reserve account when the financial institution makes a qualified
loan to a qualified business.
   (3) The liability of the state and the authority to the financial
institution under the contract is limited to the amount of money
credited to the loss reserve account of the institution.
   (4) The financial institution shall provide the information that
the authority may require, including financial information that is
identifiable with, or identifiable from the financial records of a
particular customer who is the recipient of a qualified loan. In
addition to any other information that the authority may require, the
financial institution shall provide the complete Standard Industrial
Classification (SIC) code for the qualified business and information
that provides the precise geographic location of both the qualified
business and the borrower, if different.
   (5) The financial institution will file a report with the
executive director setting out a full description of the board of
directors, including size, race, ethnicity, and gender.
   (6) The participating financial institution will require each
borrower, prior to receiving a loan under the program, to sign a
written representation to the participating financial institution
that the borrower has no legal, beneficial, or equitable interest in
the nonrefundable premium charges or any other funds credited to the
loss reserve account established by the authority for the
participating financial institution.
   (7) Other terms that the authority may require for purposes of
this article.
   (c) A financial institution is not subject to laws restricting the
disclosure of financial information when the financial institution
provides information to the authority as required by paragraph (4) of
subdivision (b).
   (d) A credit union operating pursuant to a certificate issued
under the California Credit Union Law (Division 5 (commencing with
Section 14000) of the Financial Code) may participate in the Capital
Access Loan Program established pursuant to this article only to the
extent participation is in compliance with the California Credit
Union Law. Nothing in this article shall be construed to limit the
authority of the Commissioner of Financial Institutions to regulate
credit unions subject to the commissioner's jurisdiction under the
California Credit Union Law.
   (e) Any individual, company, corporation, institution, utility,
government agency, or other entity, including any consortium of these
persons or entities, whether public or private, may participate in
the Capital Access Loan Program established pursuant to this article
by depositing funds in the California Capital Access Fund under those
terms and conditions as may be deemed appropriate by the authority.



44559.3.  (a) The authority shall establish a loss reserve account
for each financial institution with which the authority makes a
contract.
   (b) The loss reserve account for a financial institution shall
consist of moneys paid as fees by borrowers and the financial
institution, moneys transferred to the account from a small business
assistance fund, any matching federal moneys, and any other moneys
provided by the authority or other source.
   (c) Notwithstanding any other provision of law, the authority may
establish and maintain loss reserve accounts with any financial
institution under such policies as the authority may adopt.
   (d) All moneys in a loss reserve account established pursuant to
this article are the exclusive property of, and solely controlled by,
the authority. Interest or income earned on moneys credited to the
loss reserve account shall be deemed to be part of the loss reserve
account. The authority may withdraw from the loss reserve account all
interest or other income that has been credited to the loss reserve
account. Any withdrawal made pursuant to this subdivision may be made
prior to paying any claim and shall be used for the sole purpose of
offsetting costs associated with carrying out the program, including
administrative costs and loss reserve account contributions.
   (e) The combined amount to be deposited by the participating
financial institution into any individual loss reserve account over a
three-year period, in connection with any single borrower or any
group of borrowers among which a common enterprise exists, shall be
not more than one hundred thousand dollars ($100,000).



44559.4.  (a) If a financial institution that is participating in
the Capital Access Loan Program established pursuant to this article
decides to enroll a qualified loan under the program in order to
obtain the protection against loss provided by its loss reserve
account, it shall notify the authority in writing on a form
prescribed by the authority, within 10 days after the date on which
the loan is made, of all of the following:
   (1) The disbursement of the loan.
   (2) The dollar amount of the loan enrolled.
   (3) The interest rate applicable to, and the term of, the loan.
   (4) The amount of the agreed upon premium.
   (b) The financial institution may make a qualified loan to be
enrolled under the program to an individual, or to a partnership or
trust wholly owned or controlled by an individual, for the purpose of
financing property that will be leased to a qualified business that
is wholly owned by that individual. In that case, the property shall
be treated as meeting the requirements of paragraph (1) of
subdivision (g) of Section 44559.1.
   (c) When making a qualified loan that will be enrolled under the
program, the participating financial institution shall require the
qualified business to which the loan is made to pay a fee of not less
than 2 percent of the principal amount of the loan, but not more
than 3 1/2 percent of the principal amount. The financial institution
shall also pay a fee in an amount equal to the fee paid by the
borrower. The financial institution shall deliver the fees collected
under this subdivision to the authority for deposit in the loss
reserve account for the institution. The financial institution may
recover from the borrower the cost of its payments to the loss
reserve account through the financing of the loan, upon the agreement
of the financial institution and the borrower. The financial
institution may cover the cost of borrower payments to the loan loss
reserve account.
   (d) When depositing fees collected under subdivision (c) to the
credit of the loss reserve account for a participating financial
institution, the authority shall do the following:
   (1) If no matching funds are available under a federal capital
access program or other source, the authority shall transfer to the
loss reserve account an amount that is not less than the amount of
the fees paid by the participating financial institution. However, if
the qualified business is located within a severely affected
community, the authority shall transfer to the loss reserve account
an amount equal to 150 percent of the amount of the fees paid by the
participating financial institution.
   (2) If matching funds are available under a federal capital access
program or other source, the authority shall transfer, on an
immediate or deferred basis, to the loss reserve account the amount
required by that federal program or other source. However, the total
amount deposited into the loss reserve account shall not be less than
the amount which would have been deposited in the absence of
matching funds.



44559.5.  (a) The authority shall establish procedures under which
financial institutions participating in the program established
pursuant to this article may submit claims for reimbursement for
losses incurred as a result of qualified loan defaults. A
participating financial institution that charges off all or part of
an enrolled loan to the loss reserve account may file a claim for
reimbursement with the authority if both of the following conditions
are met:
   (1) The claim occurs contemporaneously with the action of the
participating financial institution to charge off all or part of the
loan.
   (2) The charge off on an enrolled loan is made in a manner that is
consistent with the participating financial institution's usual
method for making determinations on business loans that are not
enrolled loans.
   (b) Costs for which a financial institution may be reimbursed from
its loss reserve account include the amount of loan principal
charged off, accrued interest on the principal, reasonable
out-of-pocket expenses incurred in pursuing its collection efforts,
including preservation of collateral, and any other related costs.
Proper documentation of the expenses shall be presented at the time
of the claim.
   (c) If a participating financial institution files two or more
claims contemporaneously, and there are insufficient funds in the
reserve fund at that time to cover the entire amount of such claims,
the institution may designate the order of priority in which the
claims shall be paid.
   (d) A financial institution may seek reimbursement of loan losses
prior to the liquidation of collateral from defaulted loans. The
financial institution shall repay its loss reserve account for any
moneys received as reimbursement under this section if the financial
institution recovers moneys from the borrower or from the liquidation
of collateral for the defaulted loan, less any reasonable
out-of-pocket expenses incurred in collection of such amount.
   (e) In any case in which the payment of a claim under this section
has fully covered a participating financial institution's loss on an
enrolled loan, the participating financial institution shall assign
to the authority, and to any applicable federal agency in the event
federal matching funds are involved, any right, title, or interest to
any collateral, security, or other right of recovery in connection
with a loan made under the program.
   (f) The executive director may adopt necessary rules for the
authority to carry out its duties, functions, and powers relating to
the program established pursuant to this article.



44559.6.  The authority shall annually prepare a report to the
Governor and the Legislature that describes the financial condition
and programmatic results of the capital access loan program for small
businesses authorized under this article.




44559.7.  The authority may enter into agreements with commercial
banks or other financial institutions, or with other agencies of the
state, to provide necessary assistance in carrying out the program
authorized by this article, including origination and servicing of
loans.



44559.8.  Notwithstanding this article, the authority may facilitate
the development of a secondary market for a loan enrolled in the
capital access loan program by providing security for that loan,
thereby increasing participation in the program by financial
institutions and improving access to capital for small businesses.
For purposes of this section, the actions that the authority may take
include, but are not necessarily limited to, assigning all, or a
portion of, any loss reserve account to any other entity in
connection with providing security for a loan, including a trustee of
a securitization trust, transferring an enrolled loan from a
participating financial institution to a securitization trust, and
assisting underwriters in marketing a loan to the secondary market.



44559.9.  The authority shall expand the Capital Access Loan Program
established by this article to include outreach to financial
institutions that service agricultural interests in the state for the
purpose of funding air pollution control measures.




44559.11.  It is the intent of the Legislature to ensure that the
state, through the authority, may make maximum, efficient use of
capital access programs enacted by all federal and state agencies, as
well as funding available from any governmental program whose goals
may be advanced by providing funding to the Capital Access Loan
Program. In furtherance of this intent, and not withstanding any
other provision of this article, when the contributions required
pursuant to subdivision (c) of Section 44559.4 are entirely funded by
a source other than the authority, the authority may, by regulation
adopted pursuant to subdivision (b) of Section 44520, establish
alternate provisions as necessary to enable the authority to
participate in the alternative funding source program.