BILL NUMBER: AB 959 CHAPTERED 10/14/07 CHAPTER 687 FILED WITH SECRETARY OF STATE OCTOBER 14, 2007 APPROVED BY GOVERNOR OCTOBER 14, 2007 PASSED THE SENATE SEPTEMBER 5, 2007 PASSED THE ASSEMBLY SEPTEMBER 10, 2007 AMENDED IN SENATE AUGUST 29, 2007 AMENDED IN SENATE JUNE 18, 2007 AMENDED IN SENATE JUNE 5, 2007 AMENDED IN ASSEMBLY APRIL 10, 2007 INTRODUCED BY Assembly Member Soto FEBRUARY 22, 2007 An act to amend Section 19630.5 of the Welfare and Institutions Code, relating to blind persons, and making an appropriation therefor. LEGISLATIVE COUNSEL'S DIGEST AB 959, Soto. BEP Vendor Loan Interest Rate Buy-Down Fund. Existing state and federal laws provide for the establishment of vending facilities to be operated by blind vendors on state and federal property. The program is administered by the Director of Rehabilitation, and requires the director to establish the Business Enterprises Program for the Blind, and to encourage and establish these vending facilities. Existing law also provides for the Blind Vendor Revolving Loan Fund in the State Treasury, and continuously appropriates moneys in the fund to the department, for the purpose of providing loans for the purchase of inventory and equipment by existing blind vendors, in accordance with specified criteria. Existing law provides that the fund includes moneys appropriated by the Legislature, moneys collected from repayment of loans, and all interest and other earnings of moneys in the fund. This bill would, commencing January 1, 2008, rename the fund as the BEP Vendor Loan Interest Rate Buy-Down Fund, would delete moneys collected from repayment of loans from the fund, and would require the department to use moneys in the fund for the purposes of reducing the interest paid by vendors for loans. This bill would delete the department's authority to use the fund to grant loans and would, instead, authorize the department to use the fund to reduce the interest vendors must pay for loans issued by eligible lenders, as defined, to purchase inventory and equipment for vending facilities. The bill would require the department, in determining eligibility for interest buy-down assistance from this fund, to make any assistance contingent upon a determination that the blind vendor reasonably can be expected to repay the loan based, in part, on the vendor's expected income. The bill would permit the department, in the event that the total amount of assistance applied for exceeds the total amount of assistance that may be guaranteed, to establish a system of priorities for the approval of applications. By changing the purpose of a continuously appropriated fund, this bill would make an appropriation. Appropriation: yes. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 19630.5 of the Welfare and Institutions Code is amended to read: 19630.5. (a) The Blind Vendor Revolving Loan Fund is hereby created in the State Treasury, and, notwithstanding Section 13340 of the Government Code, is continuously appropriated without regard to fiscal years to the department for the purposes specified in this section. The fund shall be interest bearing. Commencing January 1, 2008, the fund is hereby renamed the BEP Vendor Loan Interest Rate Buy-Down Fund. (b) The fund shall consist of moneys appropriated to that fund by the Legislature, and notwithstanding Section 16305.7 of the Government Code, all interest, dividends, and pecuniary gains from investments or deposits of moneys in the fund. (c) (1) Moneys in the fund shall be used by the department for the purpose of reducing the interest that vendors must pay for loans issued by an eligible lender to purchase inventory and equipment for vending facilities. (2) The department shall make any funding contingent upon the vendor's good standing in the Business Enterprises Program and a determination that the department has not paid interest on any other loan obtained by the vendor. (3) Upon a determination that a vendor is eligible, the department shall pay, on behalf of the vendor, to an eligible lender, an amount not to exceed five thousand dollars ($5,000) to reduce the fair market interest rate of a loan described in paragraph (1) by up to 3 percent. (4) In the event that a vendor fails to repay a loan to an eligible lender, the lender shall reimburse the fund for the fund's share of any interest not yet accrued as of the time of default by the vendor. (d) In determining eligibility for a loan interest buy-down assistance from this fund, the department shall make any loan interest buy-down assistance contingent upon a determination that the blind vendor reasonably can be expected to repay the loan based on the vendor's expected income and that the applicant is currently an active vendor and has been in the Business Enterprises Program for at least one year. (e) For purposes of this section, "eligible lender" means a financial institution organized, chartered, or holding a license or authorization certificate under a law of this state or in the United States to make loans or extend credit and subject to supervision by an official or agency of this state or the United States. (f) Loan interest buy-down assistance pursuant to this section shall be made without regard to race, religion, creed, or sex. (g) The total amount of interest buy-down assistance that may be provided under this section is limited to the amount contained in the fund, and the state shall not be liable beyond the amount contained in that fund for these debts, obligations, and liabilities. (h) In the event that the total amount of loan interest buy-down assistance applied for under this section exceeds the total amount of assistance that may be provided pursuant to this section, the department may establish a system of priorities for the approval of applications.