BILL ANALYSIS Ó
AB 901
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Date of Hearing: May 27, 2011
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 901 (V. Manuel Perez) - As Amended: May 10, 2011
Policy Committee: Jobs Vote:6-0
Banking and Finance 12-0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill expands the definition of financial institutions
eligible to participate in the California Capital Access Program
(CalCAP) and increases CalCAP reporting requirements.
Specifically, this bill:
1)Adds small business financial development corporation or
microenterprise development organizations that meet standards
established by the California Pollution Control Financing
Authority (CPCFA).
2)Requires that when a financial institution contracts with the
CPCFA it will use the North American Industry Classification
System for reporting information about the qualified business.
3)Requires the CPCFA to include in their annual report to the
Governor and Legislature the specified programmatic results,
related to jobs created and retained, number of businesses
served and other results, as specified.
FISCAL EFFECT
Minor and absorbable costs to the California Pollution Control
Financing Authority.
COMMENTS
1)Purpose . According to the author, AB 901 helps to ensure
there are not technical hurdles that impede the successful
delivery of the state and federal Small Business Jobs Acts of
AB 901
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2010 that will provide $174 million in new dollars for
California small businesses. In addition, AB 901 adds
accountability provisions related to how the funds are used,
by specifying that the programmatic reports include the total
number of businesses served, jobs created, jobs retained, the
geographic distribution of the loans, and the types of
businesses served.
2)Background. CalCAP was established by legislation enacted in
1994. The program assists small businesses in obtaining loans
through participating financial institutions through a loss
reserve account model, which is described in the following
comment. The objective of the program is to provide
incentives for financial institutions to provide small
businesses with the capital to maintain and grow their
business. Loans can be used to finance the acquisition of
land, construction or renovation of buildings, the purchase of
equipment, other capital projects and working capital. While
eligible, there are limitations on real estate loans and loan
refinancing.
3)The Federal Small Business Jobs Act of 2010 creates the Small
Business Lending Fund Program that directs the Secretary of
the Treasury to make capital investments in eligible
institutions in order to increase the availability of credit
for small businesses, to amend the Internal Revenue Code of
1986 to provide tax incentives for small business job
creation, and for other purposes. Of the $505 billion dollars
to be distributed nationally, California is scheduled to
receive $168 million, which will be administered through two
state programs the CalCAP in the Treasurer's Office and the
California Small Business Loan Guarantee Program in the
California Business, Transportation and Housing Agency (BTH).
4)Related Legislation. AB 981 (Hueso) requires the CPCFA to
contribute a minimum of 150% of the fees paid by participating
financial institutions, if the qualified business is located
within a severely affected community. This bill is on the
Assembly floor.
Analysis Prepared by : Roger Dunstan / APPR. / (916) 319-2081
AB 901
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