BILL ANALYSIS
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THIRD READING
Bill No: AB 1632
Author: Assembly Budget Committee
Amended: 10/6/10 in Senate
Vote: 27 - Urgency
PRIOR VOTES NOT RELEVANT
SUBJECT : Budget Act of 2010: job creation and small
business
development
SOURCE : Author
DIGEST : Senate Floor Amendments of 10/6/10 delete the
prior version of the bill which expressed the intent of the
Legislature to enact statutory changes relating to the
Budget Act of 2010, and add the current content relating to
job creation and small business development.
This bill now provides the necessary statutory changes in
the area of job creation and small business development in
order to implement the 2010 Budget Act.
ANALYSIS : This bill transfers $32.4 million from the
General Fund to support four small-business and jobs
programs that exist in current law. The funding
appropriated in this bill goes to the following entities:
1. Small Business Loan Guarantee Program: $20 million .
The augmentation provides funding for the existing Small
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Business Loan Guarantee Program at the Business
Transportation and Housing Agency. This program is run
through partnerships with 11 regional Financial
Development Corporations located around the state. The
program augmentation nearly doubles program volume and
leverages about $100 million in bank loans and/or lines
of credit and serves 1,000 businesses.
2. California Capital Access Fund: $6 million . The
augmentation provides funding for the California Capital
Access Program (CalCAP) at the Treasurer's office, which
encourages banks and other financial institutions to
make loans to small businesses that fall just outside of
most banks' conventional underwriting standards by
providing loan portfolio insurance that may provide up
to 100 percent coverage on certain loan defaults. By
participating in CalCAP, lenders have available to them
a proven financing mechanism to meet the financing needs
of California's small businesses. This augmentation
triples the current size of the program and leverages
over $135 million in loans intended to serve 1,000
businesses.
3. Small Business Development Centers: $6 million . The
funding leverages an equal federal match to support free
technical assistance and business counseling sessions to
over 50,000 businesses. The funding is estimated to
result in $118 million in taxable revenues from
statewide businesses.
4. Federal Technology Center: $350,000 . The funding goes
to participating entities in the Federal Technology
Center Program, which leverages an equal federal match
to fund free small business workshops on competing for
government contracts. Serves 2,000 businesses and in
2009, similar funding levels resulted in $287 million in
contracts awarded to participating businesses.
FISCAL EFFECT : Appropriation: Yes Fiscal Com.: Yes
Local: No
JJA:do 10/6/10 Senate Floor Analyses
SUPPORT/OPPOSITION: NONE RECEIVED
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