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<ns0:Description>
<ns0:Id>20250AB__040797AMD</ns0:Id>
<ns0:VersionNum>97</ns0:VersionNum>
<ns0:History>
<ns0:Action>
<ns0:ActionText>INTRODUCED</ns0:ActionText>
<ns0:ActionDate>2025-02-04</ns0:ActionDate>
</ns0:Action>
<ns0:Action>
<ns0:ActionText>AMENDED_ASSEMBLY</ns0:ActionText>
<ns0:ActionDate>2025-04-23</ns0:ActionDate>
</ns0:Action>
<ns0:Action>
<ns0:ActionText>AMENDED_ASSEMBLY</ns0:ActionText>
<ns0:ActionDate>2025-05-05</ns0:ActionDate>
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<ns0:LegislativeInfo>
<ns0:SessionYear>2025</ns0:SessionYear>
<ns0:SessionNum>0</ns0:SessionNum>
<ns0:MeasureType>AB</ns0:MeasureType>
<ns0:MeasureNum>407</ns0:MeasureNum>
<ns0:MeasureState>AMD</ns0:MeasureState>
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<ns0:AuthorText authorType="LEAD_AUTHOR">Introduced by Assembly Member Jackson</ns0:AuthorText>
<ns0:Authors>
<ns0:Legislator>
<ns0:Contribution>LEAD_AUTHOR</ns0:Contribution>
<ns0:House>ASSEMBLY</ns0:House>
<ns0:Name>Jackson</ns0:Name>
</ns0:Legislator>
</ns0:Authors>
<ns0:Title> An act to amend Sections 44559.1, 44559.13, and 44559.14 of, and to add Section 44559.10 to, the Health and Safety Code, relating to state government, and making an appropriation therefor.</ns0:Title>
<ns0:RelatingClause>state government, and making an appropriation therefor</ns0:RelatingClause>
<ns0:GeneralSubject>
<ns0:Subject>California Pollution Control Financing Authority.</ns0:Subject>
</ns0:GeneralSubject>
<ns0:DigestText>
<html:p>
(1)
<html:span class="EnSpace"/>
Existing law establishes the California Pollution Control Financing Authority (CPCFA), consisting of 3 members: the Director of Finance, the State Treasurer, and the State Controller. Existing law establishes the Capital Access Loan Program for Small Businesses, which is administered by the CPCFA, to assist qualifying small businesses in the state access capital. Existing law establishes the California Capital Access Fund within the authority to be used for purposes of the program.
</html:p>
<html:p>This bill would require all moneys accruing to the authority pursuant to the program to be deposited into the fund. The bill would authorize other private, state, or federal funding sources to be received and accepted into the fund, as specified. By creating a continuously appropriated fund, this bill would make an appropriation.</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
Existing law establishes the California Americans with Disabilities Act Small Business Capital Access Loan Program to assist small businesses in complying with the federal Americans with Disabilities Act of 1990. Existing law establishes the California Americans with Disabilities Act Small Business
Capital Access Loan Program Fund, which is continuously appropriated to CPCFA for carrying out the purposes of the program. Existing law requires that all moneys in the fund be held in trust for the life of the program, subject to program expenditures and costs of administering the program. Existing law specifies those program expenditures.
</html:p>
<html:p>This bill would include financial assistance, as defined and specified, as a program expenditure described above. By expanding the expenditures that may be made from a continuously appropriated fund, this bill would make an appropriation.</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
Existing law establishes the California Seismic
Safety Capital Access Loan Program to cover losses on qualified loans by participating lenders to qualified residential property owners or qualified small businesses, as those terms are defined. Existing law establishes the California Seismic Safety Capital Access Loan Program Fund, which is continuously appropriated to CPCFA for carrying out the purposes of the program. Existing law requires that all moneys in the fund be held in trust for the life of the program, subject to program expenditures and costs of administering the program. Existing law specifies those program expenditures.
</html:p>
<html:p>This bill would include financial assistance, as defined and specified, as a program expenditure described above. By expanding the expenditures that may be made from a continuously appropriated fund, this bill would make an appropriation.</html:p>
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<ns0:DigestKey>
<ns0:VoteRequired>TWO_THIRDS</ns0:VoteRequired>
<ns0:Appropriation>YES</ns0:Appropriation>
<ns0:FiscalCommittee>YES</ns0:FiscalCommittee>
<ns0:LocalProgram>NO</ns0:LocalProgram>
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<ns0:MeasureIndicators>
<ns0:ImmediateEffect>NO</ns0:ImmediateEffect>
<ns0:ImmediateEffectFlags>
<ns0:Urgency>NO</ns0:Urgency>
<ns0:TaxLevy>NO</ns0:TaxLevy>
<ns0:Election>NO</ns0:Election>
<ns0:UsualCurrentExpenses>NO</ns0:UsualCurrentExpenses>
<ns0:BudgetBill>NO</ns0:BudgetBill>
<ns0:Prop25TrailerBill>NO</ns0:Prop25TrailerBill>
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<ns0:Bill id="bill">
<ns0:Preamble>The people of the State of California do enact as follows:</ns0:Preamble>
<ns0:BillSection id="id_EADC9CA5-A5CD-45AE-854D-039485053664">
<ns0:Num>SECTION 1.</ns0:Num>
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Section 44559.1 of the
<ns0:DocName>Health and Safety Code</ns0:DocName>
is amended to read:
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<ns0:LawSection id="id_294117C5-1604-42DB-9E7A-E35218CA5435">
<ns0:Num>44559.1.</ns0:Num>
<ns0:LawSectionVersion id="id_60349EC6-F161-4304-B40B-0C118B78B539">
<ns0:Content>
<html:p>As used in this article, unless the context requires otherwise, all of the following terms have the following meanings:</html:p>
<html:p>
(a)
<html:span class="EnSpace"/>
“Authority” means the California Pollution Control Financing Authority.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
“California Capital Access Fund” means a fund created within the authority to be used for purposes of the program.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
“Executive director” means the Executive Director of the California Pollution Control Financing Authority.
</html:p>
<html:p>
(d)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
“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.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
(A)
<html:span class="EnSpace"/>
“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,
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, and a small business financial development corporation, as defined in Chapter 1 (commencing with Section 14000) of Part 5 of Division 3 of Title 1 of the Corporations Code, or microbusiness lender, as defined in Section 12100 of the Government Code, that meets standards that shall be established by the authority. 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.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
A financial
institution described in this paragraph shall meet either of the following conditions:
</html:p>
<html:p>
(i)
<html:span class="EnSpace"/>
It is domiciled in this state.
</html:p>
<html:p>
(ii)
<html:span class="EnSpace"/>
It has its principal office in this state.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
“Financial institution” also includes an insured depository institution, insured credit union, or community development financial institution, as these terms are defined in Section 4702 of Title 12 of the United States Code.
</html:p>
<html:p>
(e)
<html:span class="EnSpace"/>
“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:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
Depositing all required fees paid by the participating financial institution and the qualified business.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
Depositing contributions made by the state and, if applicable, the federal government or other sources.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
Covering losses on enrolled qualified loans sustained by the participating financial institution by disbursing funds accumulated in the loss reserve account.
</html:p>
<html:p>
(f)
<html:span class="EnSpace"/>
“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.
</html:p>
<html:p>
(g)
<html:span class="EnSpace"/>
“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:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
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.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
The ownership of real estate for the purpose of construction or renovation, until the completion of the construction or renovation phase.
</html:p>
<html:p>
(h)
<html:span class="EnSpace"/>
“Program” means the Capital Access Loan Program created pursuant
to this article.
</html:p>
<html:p>
(i)
<html:span class="EnSpace"/>
“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:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
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.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
It has its primary business location within the boundaries of the state.
</html:p>
<html:p>
(j)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
“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.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
“Qualified loan” does not include any of the following:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
A loan for the construction or purchase of residential housing.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
A loan to finance passive real estate
ownership.
</html:p>
<html:p>
(C)
<html:span class="EnSpace"/>
A loan for the refinancing of an existing loan when and to the extent that the outstanding balance is not increased.
</html:p>
<html:p>
(D)
<html:span class="EnSpace"/>
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.
</html:p>
<html:p>
(k)
<html:span class="EnSpace"/>
“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.
</html:p>
<html:p>
(l)
<html:span class="EnSpace"/>
“Small Business Assistance Fund” means a fund created within the authority pursuant to Section 44548.
</html:p>
<html:p>
(m)
<html:span class="EnSpace"/>
“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.
</html:p>
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</ns0:BillSection>
<ns0:BillSection id="id_A1BA1749-3284-4FF2-824C-854C98ED1270">
<ns0:Num>SEC. 2.</ns0:Num>
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Section 44559.10 is added to the
<ns0:DocName>Health and Safety Code</ns0:DocName>
, to read:
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<ns0:Fragment>
<ns0:LawSection id="id_4A793781-C2DF-42FC-8786-409D98266C1A">
<ns0:Num>44559.10.</ns0:Num>
<ns0:LawSectionVersion id="id_52A60FB3-5BE6-4A86-85AB-0ED97FE49104">
<ns0:Content>
<html:p>
(a)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
The California Capital Access Fund may receive and accept any other private, state, or federal funding source not otherwise described in this article to provide financial assistance for the purposes of this article.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
When the authority gains access to a funding source described in paragraph (1), the authority shall develop and adopt by resolution the terms and conditions describing the financial assistance to be provided with moneys from the funding source.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
The authority may divide the fund into separate accounts.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
All moneys accruing to the authority pursuant to this article from any source shall be deposited into the fund.
</html:p>
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</ns0:LawSection>
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<ns0:BillSection id="id_FF6B8FAD-4D70-4024-8404-06C2E3C0A791">
<ns0:Num>SEC. 3.</ns0:Num>
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Section 44559.13 of the
<ns0:DocName>Health and Safety Code</ns0:DocName>
is amended to read:
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<ns0:LawSection id="id_BCB892D6-F3F6-4C37-93A8-C9061737AB06">
<ns0:Num>44559.13.</ns0:Num>
<ns0:LawSectionVersion id="id_F260BE79-B955-4328-B7BA-19809483531D">
<ns0:Content>
<html:p>
(a)
<html:span class="EnSpace"/>
It is the intent of the Legislature in this act to create and fund the California Americans with Disabilities Act Small Business Capital Access Loan Program to assist small businesses in complying with the Americans with Disabilities Act. It is not the intent of the Legislature to assist the physical expansion of small businesses that includes modifications that comply with the Americans with Disabilities Act. The program shall be administered by the California Pollution Control Financing Authority and follow the terms and conditions for the Capital Access Loan Program for Small Businesses in this article with the additional program requirements specified under this section.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
For purposes of this section, unless the context requires otherwise, the following words and terms shall have the following meanings:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
“Americans with Disabilities Act” means the federal Americans with Disabilities Act of 1990 (42 U.S.C. Sec. 12101 et seq.) and amendments thereto.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
“California Americans with Disabilities Act Small Business Capital Access Loan Program Fund” or “fund” means a fund established and administered by the authority pursuant to Sections 44548 and 44549 to be used for purposes of this program.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
(A)
<html:span class="EnSpace"/>
“Eligible cost” means and includes all or any part of the price of construction, purchase price of real or personal property, the price of demolishing or removing
any buildings or structures, the price of all machinery and equipment, the amount of financing charges and interest before, during, and for a period not to exceed the later of one year or one year following completion of construction, as determined by the authority, the price of insurance during construction, the amount of funding or financing noncapital expenses, the amount of reserves for principal and interest and for extensions, enlargements, additions, replacements, renovations, and improvements, the price of engineering, financial, and legal services and other service contracts, the price of plans, specifications, studies, surveys, estimates, administrative expenses, and any other expenses of funding or financing, that are necessary and allocable to the eligible project.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
“Eligible cost” shall not include costs not directly related to
physical alterations necessary for compliance with the Americans with Disabilities Act.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
“Eligible project” means the physical alterations or retrofits to an existing small business facility of less than 10,000 square feet necessary to ensure that facility is in compliance with the Americans with Disabilities Act, and the financing necessary to pay eligible costs of the project.
</html:p>
<html:p>
(5)
<html:span class="EnSpace"/>
“Financial assistance” means any of the following:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
Loans.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
Loan loss reserves.
</html:p>
<html:p>
(C)
<html:span class="EnSpace"/>
Interest rate deductions.
</html:p>
<html:p>
(D)
<html:span class="EnSpace"/>
Proceeds of bonds
issued by the authority.
</html:p>
<html:p>
(E)
<html:span class="EnSpace"/>
Bond insurance.
</html:p>
<html:p>
(F)
<html:span class="EnSpace"/>
Loan participation payments.
</html:p>
<html:p>
(G)
<html:span class="EnSpace"/>
Credit enhancements.
</html:p>
<html:p>
(H)
<html:span class="EnSpace"/>
Liquidity facilities.
</html:p>
<html:p>
(I)
<html:span class="EnSpace"/>
Contributions of money.
</html:p>
<html:p>
(J)
<html:span class="EnSpace"/>
A combination of any of subparagraphs (A) to (I), inclusive.
</html:p>
<html:p>
(6)
<html:span class="EnSpace"/>
“Qualified loan” means a loan or portion of a loan as defined in subdivision (j) of Section 44559.1, where the proceeds of the loan or portion of the loan are limited to the eligible costs for an eligible project under this program, and where the loan or portion of
the loan does not exceed fifty thousand dollars ($50,000).
</html:p>
<html:p>
(7)
<html:span class="EnSpace"/>
“Small business” or “qualified business” means a business that is independently owned and operated and not dominant in its field that meets both of the following additional criteria:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
It has 30 or fewer full-time equivalent employees, or it has less than five million dollars ($5,000,000) in total gross annual income from all sources.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
It does not provide overnight accommodations.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
The California Americans with Disabilities Act Small Business Capital Access Loan Program Fund is established in the State Treasury for, and shall be administered by the authority pursuant to
Sections 44548 and 44549 for, this program. Notwithstanding Section 13340 of the Government Code, all money in the fund is continuously appropriated to the authority for carrying out the purposes of this section. The authority may divide the fund into separate accounts. All moneys accruing to the authority pursuant to this section from any source shall be deposited into the fund.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
All moneys in the fund derived from any source shall be held in trust for the life of this program, subject to the program expenditures and costs of administering this section, as follows:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
Program expenditures shall include all of the following:
</html:p>
<html:p>
(i)
<html:span class="EnSpace"/>
Contributions paid by the authority in support of qualified loans.
</html:p>
<html:p>
(ii)
<html:span class="EnSpace"/>
Payments made to borrowers enrolling loans to participate in the program, to the extent that moneys other than the initial appropriation are deposited into the fund by the authority and are authorized for that use pursuant to paragraph (3) of subdivision (d).
</html:p>
<html:p>
(iii)
<html:span class="EnSpace"/>
Reasonable costs to educate the small business community and participating lenders about the program, including travel within the state.
</html:p>
<html:p>
(iv)
<html:span class="EnSpace"/>
Financial assistance determined by, approved by resolution of, and provided by the authority, directly or indirectly, to a small business or qualified business under terms established by the authority.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
Administrative expenditures shall be
limited to 5 percent of the initial appropriation plus 5 percent of all moneys recaptured, and shall include all of the following:
</html:p>
<html:p>
(i)
<html:span class="EnSpace"/>
Personnel costs.
</html:p>
<html:p>
(ii)
<html:span class="EnSpace"/>
Service and vending contracts necessary to carry out the program.
</html:p>
<html:p>
(iii)
<html:span class="EnSpace"/>
Other reasonable direct and indirect administrative costs.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
The authority may direct the Treasurer to invest moneys in the fund that are not required for its current needs in the eligible securities specified in Section 16430 of the Government Code as the authority shall designate. The authority may direct the Treasurer to deposit moneys in interest-bearing accounts in state or national banks or other financial institutions having
principal offices located in the state. The authority may alternatively require the transfer of moneys in the fund to the Surplus Money Investment Fund for investment pursuant to Article 4 (commencing with Section 16470) of Chapter 3 of Part 2 of Division 4 of Title 2 of the Government Code. All interest or other increment resulting from an investment or deposit shall be deposited into the fund, notwithstanding Section 16305.7 of the Government Code. Moneys in the fund shall not be subject to transfer to any other fund pursuant to any provision of Part 2 (commencing with Section 16300) of Division 4 of Title 2 of the Government Code, excepting the Surplus Money Investment Fund.
</html:p>
<html:p>
(d)
<html:span class="EnSpace"/>
The authority shall adopt regulations pursuant to subdivision (c) of Section 44520 to implement the program, including provisions specific to this program
as described in this section and further including provisions to:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
Establish a new loss reserve account for each participating lender enrolling loans in this program.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
Obtain a certification from each participating lender and small business upon enrollment of a qualified loan that the proceeds of the loan will be used for the eligible costs of an eligible project.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
Contribute an additional incentive from the fund for each loan enrolled for a qualified business located in a severely affected community, or make nonreimbursable payments from other moneys to participating borrowers to offset all or a portion of the reasonable costs of architectural inspections obtained from a person who is certified as an access
specialist pursuant to the program described in Section 4459.5 of the Government Code.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
Restrict the enrollment of a qualified loan in any other Capital Access Loan Program for small business offered by the authority as long as funds are available for this program.
</html:p>
<html:p>
(5)
<html:span class="EnSpace"/>
Limit the term of loss coverage for each qualified loan to no more than five years.
</html:p>
<html:p>
(6)
<html:span class="EnSpace"/>
Recapture from the loss reserve account the authority’s contribution for each enrolled loan upon the maturation of such loan or after five years from the date of enrollment, whichever happens first, to be deposited into the fund and applied to future program and administrative expenditures.
</html:p>
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<ns0:BillSection id="id_DCD3C7A0-A35C-4A06-A1DB-799867AFEE12">
<ns0:Num>SEC. 4.</ns0:Num>
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Section 44559.14 of the
<ns0:DocName>Health and Safety Code</ns0:DocName>
is amended to read:
</ns0:ActionLine>
<ns0:Fragment>
<ns0:LawSection id="id_003F8067-9A30-402F-AF1D-26EBA559B3EE">
<ns0:Num>44559.14.</ns0:Num>
<ns0:LawSectionVersion id="id_C4D6DCF3-827B-4F37-86F6-FD3C1CC22031">
<ns0:Content>
<html:p>
(a)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
It is the intent of the Legislature in enacting the act adding this section to create and fund a program to assist residential property owners and small business owners in seismically retrofitting residences and small businesses with a priority on soft-story buildings and unreinforced brick and concrete buildings. It is not the intent of the Legislature to assist the physical expansion of small businesses and residences.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
The Legislature hereby establishes the California Seismic Safety Capital Access Loan Program. The program shall cover losses on qualified loans by participating lenders to qualified residential property owners or qualified small
businesses for eligible projects, as specified under this section. The program shall
be administered by the California Pollution Control Financing Authority and follow the terms and conditions for the Capital Access Loan Program in this article with the additional program requirements specified under this section.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
For purposes of this section, unless the context requires otherwise, the following words and terms shall have the following meanings:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
“Seismic retrofit construction” means alteration performed on or after January 1, 2017, of a qualified building or its components to substantially mitigate seismic damage. “Seismic retrofit construction” includes, but is not limited to, all of the following:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
Anchoring the structure to the foundation.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
Bracing cripple walls.
</html:p>
<html:p>
(C)
<html:span class="EnSpace"/>
Bracing hot water heaters.
</html:p>
<html:p>
(D)
<html:span class="EnSpace"/>
Installing automatic gas shutoff valves.
</html:p>
<html:p>
(E)
<html:span class="EnSpace"/>
Repairing or reinforcing the foundation to improve the integrity of the foundation against seismic damage.
</html:p>
<html:p>
(F)
<html:span class="EnSpace"/>
Anchoring fuel storage.
</html:p>
<html:p>
(G)
<html:span class="EnSpace"/>
Installing an earthquake-resistant bracing system for mobilehomes that are registered with the Department of Housing and Community Development.
</html:p>
<html:p>
(H)
<html:span class="EnSpace"/>
Strengthening a building’s lateral load resisting system.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
“Eligible costs” means the costs paid or incurred on or after January 1, 2017, for an eligible project, including any engineering or architectural design work necessary to permit or complete the eligible project less the amount of any grant provided by a public entity for the eligible project. “Eligible costs” do not include costs paid or incurred for any of the following:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
Maintenance, including abatement of deferred or inadequate maintenance, and correction of violations unrelated to the seismic retrofit construction.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
Repair, including repair of earthquake damage.
</html:p>
<html:p>
(C)
<html:span class="EnSpace"/>
Seismic retrofit construction required by local building codes as a result of addition, repair, building relocation, or change of
use or occupancy.
</html:p>
<html:p>
(D)
<html:span class="EnSpace"/>
Other work or improvement required by local building or planning codes as a result of the intended seismic retrofit construction.
</html:p>
<html:p>
(E)
<html:span class="EnSpace"/>
Rent reductions or other associated compensation, compliance actions, or other related coordination involving the qualified residential property owner or qualified small business and any other party, including a tenant, insurer, or lender.
</html:p>
<html:p>
(F)
<html:span class="EnSpace"/>
Replacement of existing building components, including equipment, except as needed to complete the seismic retrofit construction.
</html:p>
<html:p>
(G)
<html:span class="EnSpace"/>
Bracing or securing nonpermanent building contents.
</html:p>
<html:p>
(H)
<html:span class="EnSpace"/>
The
offset of costs, reimbursements, or other costs transferred from the qualified residential property owner or qualified small business to others.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
“Eligible project” means seismic retrofit construction that is necessary to ensure that the qualified building is capable of substantially mitigating seismic damage, and the financing necessary to pay eligible costs of the project.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
“Financial assistance” means any of the following:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
Loans.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
Loan loss reserves.
</html:p>
<html:p>
(C)
<html:span class="EnSpace"/>
Interest rate deductions.
</html:p>
<html:p>
(D)
<html:span class="EnSpace"/>
Proceeds of bonds issued by the
authority.
</html:p>
<html:p>
(E)
<html:span class="EnSpace"/>
Bond insurance.
</html:p>
<html:p>
(F)
<html:span class="EnSpace"/>
Loan participation payments.
</html:p>
<html:p>
(G)
<html:span class="EnSpace"/>
Credit enhancements.
</html:p>
<html:p>
(H)
<html:span class="EnSpace"/>
Liquidity facilities.
</html:p>
<html:p>
(I)
<html:span class="EnSpace"/>
Contributions of money.
</html:p>
<html:p>
(J)
<html:span class="EnSpace"/>
A combination of any of subparagraphs (A) to (I), inclusive.
</html:p>
<html:p>
(5)
<html:span class="EnSpace"/>
“Qualified building” means a residential or commercial building that is identified by the local building code official for the jurisdiction in which the building is located as a building in need of seismic retrofitting and is either a building of a type that is
potentially vulnerable in the event of a catastrophic earthquake or a building constructed before 1981.
</html:p>
<html:p>
(6)
<html:span class="EnSpace"/>
“Qualified loan” means a loan or portion of a loan as defined in subdivision (j) of Section 44559.1, where the proceeds of the loan or portion of the loan are limited to the eligible costs for an eligible project under this program, and where the loan or portion of the loan does not exceed two hundred fifty thousand dollars ($250,000).
</html:p>
<html:p>
(7)
<html:span class="EnSpace"/>
“Qualified small business” means a business referred to in subdivisions (i) and (m) of Section 44559.1 that owns a qualified building regardless of owner occupancy, notwithstanding the restriction on passive real estate ownership in subparagraph (B) of paragraph (2) of subdivision (j) of Section 44559.1.
</html:p>
<html:p>
(8)
<html:span class="EnSpace"/>
“Qualified residential property owner” means either an owner of a residential building that is a qualified building or a qualified small business that owns one or more residential buildings, including a multiunit housing building, that is a qualified building, notwithstanding the restriction on passive real estate ownership in subparagraph (B) of paragraph (2) of subdivision (j) of Section 44559.1.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
The California Seismic Safety Capital Access Loan Program Fund is established in the State Treasury and shall be administered by the authority pursuant to Sections 44548 and 44549 for this program. For purposes of this section, the references in Sections 44548 and 44549 to “small business” shall include “qualified residential property owner,” as defined
in this section. Notwithstanding Section 13340 of the Government Code, all moneys in the fund are continuously appropriated to the authority for carrying out this section. The authority may divide the fund into separate accounts. All moneys accruing to the authority pursuant to this section from any source shall be deposited into the fund.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
All moneys in the fund derived from any source shall be held in trust for the life of this program, for program expenditures and costs of administering this section, as follows:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
Program expenditures shall include both of the following:
</html:p>
<html:p>
(i)
<html:span class="EnSpace"/>
Contributions paid by the authority in support of qualified loans.
</html:p>
<html:p>
(ii)
<html:span class="EnSpace"/>
Costs for a qualified expert to validate that the proceeds of the loans are eligible costs, as defined under this section.
</html:p>
<html:p>
(iii)
<html:span class="EnSpace"/>
Reasonable costs to educate the small business community, residential property owners, and participating lenders about the program, including travel within the state.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
Administrative expenditures shall be limited to 5 percent of the initial appropriation plus 5 percent of all moneys recaptured, and shall include all of the following:
</html:p>
<html:p>
(i)
<html:span class="EnSpace"/>
Personnel costs.
</html:p>
<html:p>
(ii)
<html:span class="EnSpace"/>
Service and vending contracts, other than program expenditures described in subparagraph (A), that are necessary to carry out the program.
</html:p>
<html:p>
(iii)
<html:span class="EnSpace"/>
Other reasonable direct and indirect administrative costs.
</html:p>
<html:p>
(iv)
<html:span class="EnSpace"/>
Financial assistance determined by, approved by resolution of, and provided by the authority, directly or indirectly, to a qualified small business or qualified residential property owner under terms established by the authority.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
The authority may direct the Treasurer to invest moneys in the fund that are not required for its current needs in the eligible securities specified in Section 16430 of the Government Code as the authority shall designate. The authority may direct the Treasurer to deposit moneys in interest-bearing accounts in state or national banks or other financial institutions having principal offices located in the state. The authority
may alternatively require the transfer of moneys in the fund to the Surplus Money Investment Fund for investment pursuant to Article 4 (commencing with Section 16470) of Chapter 3 of Part 2 of Division 4 of Title 2 of the Government Code. All interest or other increment resulting from an investment or deposit shall be deposited into the fund, notwithstanding Section 16305.7 of the Government Code. Moneys in the fund shall not be subject to transfer to any other fund pursuant to any provision of Part 2 (commencing with Section 16300) of Division 4 of Title 2 of the Government Code, excepting the Surplus Money Investment Fund.
</html:p>
<html:p>
(d)
<html:span class="EnSpace"/>
The authority shall adopt regulations pursuant to Section 44520 to implement the program, including, but not limited to, provisions to:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
Establish a new loss reserve account for each participating lender enrolling loans in this program.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
Obtain a certification from each participating lender and qualified small business or qualified residential property owner upon enrollment of a qualified loan that the proceeds of the loan will be used for the eligible costs of an eligible project.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
Contribute an additional incentive from the fund for each loan enrolled for a qualified small business or qualified residential property owner located in a severely affected community.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
Restrict the enrollment of a qualified loan in any other Capital Access Loan Program for a qualified small business or qualified residential property owner offered by the
authority as long as funds are available for this program.
</html:p>
<html:p>
(5)
<html:span class="EnSpace"/>
Limit the term of loss coverage for each qualified loan to no more than 10 years.
</html:p>
<html:p>
(6)
<html:span class="EnSpace"/>
Recapture from the loss reserve account the authority’s contribution for each enrolled loan upon the maturation of that loan or after 10 years from the date of enrollment, whichever happens first, to be deposited into the fund and applied to future program and administrative expenditures.
</html:p>
<html:p>
(e)
<html:span class="EnSpace"/>
The authority may adopt regulations relating to residential property owner or small business financing as emergency regulations in accordance with Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code. For purposes of that
Chapter 3.5, including Section 11349.6 of the Government Code, the adoption of the regulations shall be considered by the Office of Administrative Law to be necessary for the immediate preservation of the public peace, health and safety, and general welfare. The regulations shall be repealed 180 days after their effective date, unless the adopting authority or agency complies with that Chapter 3.5.
</html:p>
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