BILL NUMBER: AB 901 AMENDED
BILL TEXT
AMENDED IN SENATE JUNE 21, 2011
AMENDED IN ASSEMBLY MAY 27, 2011
AMENDED IN ASSEMBLY MAY 10, 2011
INTRODUCED BY Assembly Member V. Manuel Pérez
FEBRUARY 17, 2011
An act to add Chapter 12.9 (commencing with Section 7090) to
Division 7 of Title 1 of the Government Code, to amend
Sections 44559.1, 44559.2, and 44559.6 of the Health and Safety Code,
and to add Section 26041 to the Public Resources Code,
relating to economic development.
LEGISLATIVE COUNSEL'S DIGEST
AB 901, as amended, V. Manuel Pérez. Capital Access Loan
Program for Economic development: small business.
(1) Existing law establishes the California Economic Development
Fund in the State Treasury to receive economic development funds and
loan repayment and grant proceeds and authorizes the Secretary of
Business, Transportation and Housing, upon appropriation by the
Legislature, to expend the fund's revenue to provide matching funds
for economic development purposes.
Existing federal law authorizes the federal Small Business
Administration to make grants to a state to assist it in establishing
small business development centers conditioned upon the grant
applicant providing a matching amount.
This bill would establish the California Small Business
Development Center Program in which a small business center overseen
by an administrative lead center, defined as the entity contracting
with the federal Small Business Administration, would assist the
development and operation of small businesses. The bill would
establish the SBA Account within the California Economic Development
Fund and, upon appropriation by the Legislature, would authorize the
Secretary of Business, Transportation and Housing to expend those
funds for the sole purpose of providing matching funds for the
federal grants made for small business development centers. The bill
would require an administrative lead center to report to the
Governor, the Legislature, and the Business, Transportation and
Housing Agency for any year that state revenues are expended to
support the program, as specified.
Existing
(2) Existing law establishes the
Capital Access Loan Program, which is administered by the California
Pollution Control Financing Authority, and defines the term
"financial institution," for purposes of that program. The authority
is required to include specified terms in any contract that the
authority enters into with a financial institution participating in
the program, as specified. Existing law requires the authority to
report annually to the Governor and the Legislature that describes
the financial condition and the programmatic results of the Capital
Access Loan Program for small businesses.
This bill would revise the definition of the term "financial
institution" to include a small business financial development
corporation or microenterprise development organization that meets
standards that shall be established by the authority.
This bill would also require that the form contract used by the
authority shall revise the requirement that the financial institution
provide information that the authority may require to include the
number of jobs created and the number of jobs retained. The bill
would also specify, for purposes of the annual report to the Governor
and the Legislature, that programmatic results include, but is not
limited to, the total number of businesses served, jobs created, jobs
retained, the geographic distribution of the loans, and the
breakdown of businesses served by industry sector, as specified.
(3) The California Alternative Energy and Advanced Transportation
Financing Act requires the California Alternative Energy and Advanced
Transportation Financing Authority (CAEATFA), in consultation with
the State Energy Resources Conservation and Development Commission,
to establish criteria for selecting projects related to renewable
energy and alternative transportation technologies that would receive
financial assistance, including loans, loan loss reserves, interest
rate reductions, insurance, guarantees, and other credit enhancement
or liquidity facilities, from the authority.
This bill would require the state CAEATFA to establish the Clean
Energy and Jobs Incentive Program to provide financial assistance in
the form of loan loss reserves to a participating financial
institution providing loans to California-based entities for the
development and expansion of manufacturing facilities or the
installation of eligible technologies.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. (a) The Legislature finds and declares
the following:
(1) Small businesses are a vital part of the state's economic
well-being, and documented evidence shows that small businesses
contribute to increased productivity and innovation.
(2) The prudent expansion of small businesses can expand
employment opportunities and contribute to the financial health of
the state.
(3) In order to maintain a healthy state economy and to aid
communities, entrepreneurship among small businesses must be
stimulated and supported.
(4) The California Small Business Development Center (SBDC)
facilitates the success of small business by creating and retaining
jobs, increasing sales and profits, securing business financing, and
creating new businesses.
(5) A SBDC provides one-on-one business management counseling and
assists small businesses with business plans, marketing, financing,
and other business issues that promote and expand small businesses in
the state.
(b) The Legislature intends all of the following:
(1) To stimulate the economy and to promote new job opportunities
by assisting all small businesses by expanding and supporting the
further development of the state's network of services to small
businesses that shall include, among other things, management
assistance, business education and training, capital formation
assistance, economic and business data dissemination, and technical
assistance.
(2) To provide assistance to the state's small businesses through
management and staff experienced and knowledgeable in small business
matters, which skills are not always readily available within the
civil service system.
(3) To establish a structure that provides funding to match the
federal funds provided to each SBDC.
(4) To include the following as goals for the SBDC program:
(A) Identifying appropriate sources of federal, state, and local
public and private funding to support a SBDC.
(B) Promoting and rendering client services available through a
SBDC to special emphasis groups in the community as well as to the
general population of potential and existing business owners.
SEC. 2. Chapter 12.9 (commencing with Section
7090) is added to Division 7 of Title 1 of the Government
Code , to read:
CHAPTER 12.9. CALIFORNIA SMALL BUSINESS DEVELOPMENT CENTER
PROGRAM
7090. The following definitions apply for purposes of this
chapter:
(a) "Administrative lead center" means the entity with which the
federal Small Business Administration contracts to administer the
federal program funds pursuant to federal law under the Small
Business Development Center Act of 1980 (15 U.S.C. Sec. 631 et seq.).
(b) "SBDC" means a small business development center.
7091. (a) The California Small Business Development Center
Program is hereby established for the purpose of expanding and
supporting the further development of the state's network of services
to small businesses.
(b) The duties of a SBDC shall include, but are not limited to,
the following:
(1) Making referrals and disseminating information regarding
topics such as general legal requirements for starting a business,
public and private financing opportunities, local business
development profiles, and site inventory, and providing listings of
professional service providers.
(2) Providing specialized one-on-one counseling and technical
assistance in the areas of business planning and management,
financing, and marketing for small businesses with the greatest
potential for job retention and creation.
(3) Conducting regional workshops and conferences, as well as
local "how to" workshops, courses, and seminars with local cosponsors
such as community colleges, grantees of the federal Minority
Business Development Agency, the federal Small Business
Administration, the California Community Colleges Economic and
Workforce Development Program, and chambers of commerce.
(4) Coordinating with employee training and placement programs.
(5) Providing services to link small businesses to research and
development institutions for the purposes of transferring new
technology to a new or an expanding small business.
(c) An administrative lead center shall oversee and provide
assistance to each SBDC within its area.
(d) The California Small Business Development Center Program
shall, to the extent feasible, work in collaboration with the
activities of the Small Business Advocate, the California Small
Business Board within the Business, Transportation and Housing
Agency, the California Economic Strategy Panel, the Employment
Training Panel, the California Workforce Investment Board, and other
state economic and workforce development programs.
7092. (a) In order to qualify for funding pursuant to this
section, a SBDC shall be eligible for, and receive funds from, the
federal government pursuant to federal law under the Small Business
Development Center Act of 1980 (15 U.S.C. Sec. 631 et seq.).
(b) The SBA Account is hereby created within the California
Economic Development Fund, established pursuant to Section 13997.6.
Upon appropriation by the Legislature, moneys in the SBA Account may
be expended by the Secretary of Business, Transportation and Housing
for the sole purpose of providing matching funds for federal funds
under the Small Business Development Center Act of 1980 (15 U.S.C.
Sec. 631 et seq.).
(c) A SBDC may institute a policy for charging reasonable fees for
the training services it provides.
(d) A SBDC shall make every effort to secure additional funds from
federal, state, and local governments and from private funding
sources to support the services and programs it provides to small
businesses.
7093. (a) In any year that state revenues are expended to support
the California Small Business Development Center Program, the
administrative lead center that oversees a region in which the state
revenues are expended for federal matching purposes pursuant to the
Small Business Development Center Act of 1980 (15 U.S.C. Sec. 631 et
seq.), shall report by April 1 of the following year, to the
Governor, the Legislature, and the Business, Transportation and
Housing Agency on the activities of the California Small Business
Development Center Program in its region.
(b) The report shall include, at a minimum, the number of
businesses assisted, the number of employees employed by those
businesses, the number of jobs created, the number of jobs retained,
the amount of state tax dollars generated from those businesses, the
industry sectors of the businesses assisted, and the amount of
federal funding allocated to the regional center during the reporting
period. This information shall be posted on the Internet Web site of
the Business, Transportation and Housing Agency no later than three
months after the end of the report period.
SECTION 1. SEC. 3. Section 44559.1
of the Health and Safety Code is amended to read:
44559.1. As used in this article, unless the context requires
otherwise, all of the following terms have the following meanings:
(a) "Authority" means the California Pollution Control Financing
Authority.
(b) "California Capital Access Fund" means a fund created within
the authority to be used for purposes of the program.
(c) "Executive director" means the Executive Director of the
California Pollution Control Financing Authority.
(d) (1) "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.
(2) "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 or microenterprise development organization 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.
(3) A financial institution described in paragraph (2) shall be
domiciled or have its principal office in the State of California.
(e) "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:
(1) Depositing all required fees paid by the participating
financial institution and the qualified business.
(2) Depositing contributions made by the state and, if applicable,
the federal government or other sources.
(3) Covering losses on enrolled qualified loans sustained by the
participating financial institution by disbursing funds accumulated
in the loss reserve account.
(f) "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.
(g) "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:
(1) 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.
(2) The ownership of real estate for the purpose of construction
or renovation, until the completion of the construction or renovation
phase.
(h) "Program" means the Capital Access Loan Program created
pursuant to this article.
(i) "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:
(1) 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.
(2) It has its primary business location within the boundaries of
the state.
(j) (1) "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.
(2) "Qualified loan" does not include any of the following:
(A) A loan for the construction or purchase of residential
housing.
(B) A loan to finance passive real estate ownership.
(C) A loan for the refinancing of an existing loan when and to the
extent that the outstanding balance is not increased.
(D) 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.
(k) "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.
(l) "Small Business Assistance Fund" means a fund created within
the authority pursuant to Section 44548.
(m) "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.
SEC. 2. SEC. 4. Section 44559.2 of
the Health and Safety Code is amended to read:
44559.2. (a) The authority may contract with any financial
institution for the purpose of allowing the financial institution to
participate in the Capital Access Loan Program established by this
article.
(b) For purposes of this section, the authority may contract with
participating financial institutions and shall utilize a standard
form of contract that is reviewed and approved by the Department of
General Services. The standard form of contract shall provide for all
of the following:
(1) The creation of a loss reserve account by the authority for
the benefit of the financial institution.
(2) The financial institution, qualified business, and the
authority will deposit moneys to the credit of the institution's loss
reserve account when the financial institution makes a qualified
loan to a qualified business.
(3) The liability of the state and the authority to the financial
institution under the contract is limited to the amount of money
credited to the loss reserve account of the institution.
(4) The financial institution shall provide the information that
the authority may require, including financial information that is
identifiable with, or identifiable from the financial records of a
particular customer who is the recipient of a qualified loan. In
addition to any other information that the authority may require, the
financial institution shall provide the complete North American
Industry Classification System (NAICS) for the qualified business,
the number of jobs created, the number of jobs retained, and
information that provides the precise geographic location of both the
qualified business and the borrower, if different.
(5) The financial institution will file a report with the
executive director setting out a full description of the board of
directors, including size, race, ethnicity, and gender.
(6) The participating financial institution will require each
borrower, prior to receiving a loan under the program, to sign a
written representation to the participating financial institution
that the borrower has no legal, beneficial, or equitable interest in
the nonrefundable premium charges or any other funds credited to the
loss reserve account established by the authority for the
participating financial institution.
(7) Other terms that the authority may require for purposes of
this article.
(c) A financial institution is not subject to laws restricting the
disclosure of financial information when the financial institution
provides information to the authority as required by paragraph (4) of
subdivision (b).
(d) A credit union operating pursuant to a certificate issued
under the California Credit Union Law (Division 5 (commencing with
Section 14000) of the Financial Code) may participate in the Capital
Access Loan Program established pursuant to this article only to the
extent participation is in compliance with the California Credit
Union Law. Nothing in this article shall be construed to limit the
authority of the Commissioner of Financial Institutions to regulate
credit unions subject to the commissioner's jurisdiction under the
California Credit Union Law.
(e) Any individual, company, corporation, institution, utility,
government agency, or other entity, including any consortium of these
persons or entities, whether public or private, may participate in
the Capital Access Loan Program established pursuant to this article
by depositing funds in the California Capital Access Fund under those
terms and conditions as may be deemed appropriate by the authority.
SEC. 3. SEC. 5. Section 44559.6 of
the Health and Safety Code is amended to read:
44559.6. The authority shall annually prepare a report to the
Governor and the Legislature that describes the financial condition
and programmatic results of the capital access loan program for small
businesses authorized under this article. Programmatic results shall
include, but not be limited to, for all outstanding loans on the
date the report is issued and new loans issued since the report from
the prior year, the total number of businesses served, jobs created,
jobs retained, the geographic distribution of the loans, and the
breakdown of businesses served by industry sector.
SEC. 6. Section 26041 is added to the
Public Resources Code , to read:
26041. (a) The authority shall establish the Clean Energy and
Jobs Incentive Program for eligible California-based entities for the
development and expansion of manufacturing facilities or the
installation of eligible technologies.
(b) The program shall provide a loan loss reserve account to a
participating loan institution that would be responsible for the
overall financial structure of the financial assistance for clean
technology manufacturing development and expansion.
(c) The program shall evaluate an application based on need, job
development benefit, environmental benefit, and financial risk.
(d) The program shall allow a participating financial institution
to apply for loan loss reserve support for qualified loans for clean
energy technology manufacturing development and expansion.
(e) The program shall establish a process for allowing a lender
applicant to become a participating financial institution and enroll
in the loan loss reserve program.
(f) The process established pursuant to subdivision (e) shall, at
a minimum, require the lender applicant to provide certification of
all of the following:
(1) The applicant meets federal and state requirements for a
financial institution.
(2) The borrower has secured or made applications for all
applicable licenses or permits needed to conduct business, including
appropriate environmental review.
(3) The borrower is a California-based entity that is developing
an eligible technology.
(4) The lender applicant and the borrower would not be able to
enter into a loan without the loan loss reserve support.
(g) The program shall give priority to lender applicants that are
working with borrowers that have been offered financial assistance to
relocate to another state or other countries.
(h) To the extent funds are required to implement the program,
that authority, upon the appropriation of the Legislature, may use
federal funds as authorized by federal law, state funds, including
the renewable energy public goods charge collected pursuant to
Section 399.12 of the Public Utilities Code, or private funds to
develop the program.