California Pollution Control Financing Authority: Capital Access Loan Program.

(1) Existing law establishes the Capital Access Loan Program for small businesses, administered by the California Pollution Control Financing Authority (authority) , which provides loans through participating financial institutions to qualifying small businesses. This bill would expand the definition of financial institution for purposes of the program to include depository institutions, insured credit unions, and community development financial institutions, as defined pursuant to federal law. (2) Existing law requires the authority to create a loss reserve account for each financial institution in order to provide protection against loss. The loss reserve account for a financial institution consists of moneys paid as fees by borrowers and the financial institution, moneys transferred to the account from a small business assistance fund, matching federal moneys, and other moneys provided by the authority or other source. The authority is authorized to withdraw from the loss reserve account all interest or other income that has been credited to the loss reserve account, to be used for the sole purpose of offsetting costs associated with carrying out the program, including administrative costs and loss reserve account contributions. This bill would also authorize the authority to withdraw a portion of the interest or other income that has been credited to the loss reserve account. (3) Existing law requires the authority, if matching funds are not available, to transfer to the loss reserve account an amount that is not less than the amount of the fees paid by the participating financial institution. If the qualified business is located within a severely affected community, as defined, the authority is required to transfer to the loss reserve account an amount equal to 150% of the amount of the fees paid by the participating financial institution. This bill would instead require the authority to contribute an amount not less than 150% of the amount of the fees paid by the participating financial institution, if the qualified business is located within a severely affected community. (4) This bill would incorporate additional changes in Section 44559.1 of the Health and Safety Code proposed by AB 901, to be operative only if AB 901 and this bill are both chaptered and become effective on or before January 1, 2012, and this bill is chaptered last.