BILL NUMBER: AB 1556 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY JANUARY 4, 2010
AMENDED IN ASSEMBLY MAY 6, 2009
AMENDED IN ASSEMBLY APRIL 21, 2009
INTRODUCED BY Committee on Jobs, Economic Development, and the
Economy (V. Manuel Perez (Chair), Beall, Block, Huber, and Salas)
MARCH 11, 2009
An act to amend Section 50826 Sections
50826 and 50832.1 of the Health and Safety Code, relating to
community development.
LEGISLATIVE COUNSEL'S DIGEST
AB 1556, as amended, Committee on Jobs, Economic Development, and
the Economy. Community development: grants.
Existing law requires the Department of Housing and Community
Development to allocate funds under the federal Community Development
Block Grant Program to cities and counties. Existing law
authorizes the department to utilize specified amounts of the program'
s economic development set aside for a reservation of funds program
to establish or enhance local revolving loan fund programs.
This bill would define the term "qualified financial
intermediary" for purposes of this program. This bill
would make several declarations of legislative intent and findings
relating to local revolving loan funds receiving federal Community
Development Block Grant Program assistance. The bill would
require the department to require that grantees of the program
contract with an approved financial intermediary, as defined, to
manage or administer the local revolving loan fund and to maintain a
record of the approved financial intermediaries.
Vote: majority. Appropriation: no. Fiscal committee: no
yes . State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. (a) It is the intent of the Legislature
that the Department of Housing and Community Development create a
list of certified local nonbank financial institutions and government
agencies with expertise in lending and loan underwriting to assist
local revolving loan funds that receive federal Community Development
Block Grant funds through the department. The Legislature finds and
declares that local revolving loan programs provide funding for local
economic development projects which can create valuable jobs in
rural communities.
(b) The Legislature finds and declares that there are qualified
nonbank financial institutions and government offices in communities
that can assist local revolving loan funds by identifying investment
opportunities that create jobs and by providing underwriting
expertise in the packaging of loans.
(c) It is the intent of the Legislature that any grantee receiving
a Community Development Block Grant from the department use a
financial intermediary or government office that is annually approved
by the department to provide the required loan underwriting and
conform to the United States Department of Housing and Urban
Development guidelines. As part of the Community Development Block
Grant contract, the grantee should identify the financial
intermediary that will provide the underwriting service.
(d) It is further the intent of the Legislature that in certifying
the financial intermediary, the department base its certification on
the following criteria:
(1) High level of proficiency in economic development lending.
(2) Knowledge of the federal Community Development Block Grant
program.
(3) Ability to comprehend, interpret, and apply federal
regulations.
(4) Expert knowledge of community-based and economic development
lending programs.
(5) Leadership ability.
(6) Organization, administrative, and management skills.
SECTION 1. SEC. 2. Section 50826 of
the Health and Safety Code is amended to read:
50826. As used in this chapter:
(a) "Approved financial intermediary" means a nonprofit
organization, government office, or a financial development
corporation with direct lending experience and is certified by the
department to underwrite and administer a revolving loan fund for one
or more eligible city or county jurisdictions. The approved
financial intermediary may be an employee of the grantee, consultant,
or economic development lending organization procured and contracted
by the grantee.
(a)
(b) "Eligible city or county" means an area that is not
a metropolitan city or part of an urban county, as defined by
paragraphs (4) and (6), respectively, of subsection (a) of Section
5302 of Title 42 of the United States Code.
(b)
(c) "NOFA" means notice of funding availability, a
public announcement that an estimated amount of funding will be
awarded by a department program according to specified criteria and
schedules.
(c) "Qualified financial intermediary" means a nonprofit
organization certified by the department or a financial development
corporation with direct lending experience, as established pursuant
to Section 14060.6 of the Corporations Code, to administer small
business land and grant programs for one or more eligible city or
county jurisdictions.
(d) "Persons and families of low or moderate income" means persons
and families whose income does not exceed 80 percent of the area
median income, adjusted for family size, as determined pursuant to
regulations adopted by the department.
(e) "Program" means the State Community Development Block Grant
Program created pursuant to federal law (42 U.S.C. 5301, et seq.).
SEC. 3. Section 50832.1 of the Health
and Safety Code is amended to read:
50832.1. (a) (1) The department is authorized
to may utilize specified amounts of the
economic development set aside for a reservation of funds program to
establish or enhance local revolving loan fund programs.
(2) The department shall require that grantees contract with an
approved financial intermediary to manage or administer the local
revolving loan fund. The department shall maintain a record of those
approved financial intermediaries.
(b) To the extent that the department determines that some local
communities lack capacity to apply for and administer projects under
this section and Section 50832, the department may utilize federal
training dollars to provide training services to those communities.
In providing training, the department may contract with training
entities, provide the training directly, or make stipends available
for that training.
(c) Utilizing only existing Community Development Block Grant
administrative funds, the department shall make every effort to
assist communities unable to demonstrate compliance with federal
regulations to come into compliance, which may include providing
communities training in revolving loan fund administration through
outside contractors.