Amended in Senate August 9, 2016

Amended in Senate September 4, 2015

Amended in Senate August 17, 2015

Amended in Assembly April 20, 2015

Amended in Assembly March 26, 2015

California Legislature—2015–16 Regular Session

Assembly Bill No. 1169

Introduced by Assembly Member Gomez

February 27, 2015

begin delete An act to add Section 12815 to the Government Code, relating to public resources. end delete begin insert An act to amend Sections 44548, 44559.13, and 44559.14 of the Health and Safety Code, relating to economic development, making an appropriation therefor, and declaring the urgency thereof, to take effect immediately. end insert

LEGISLATIVE COUNSEL’S DIGEST

AB 1169, as amended, Gomez. begin delete Strategic Growth Council: state funding signs. end delete begin insert Economic development: Capital Access Loan Program. end insert

begin insert

Existing law establishes the Capital Access Loan Program to assist small businesses in financing the costs of complying with environmental mandates and the remediation of contamination on their properties, as specified. Existing law establishes within the program the California Americans with Disabilities Act Small Business Capital Access Loan Program (ADA program) to assist small businesses in financing the costs of projects that alter or retrofit existing small business facilities to comply with the federal Americans with Disabilities Act. Existing law, for the purposes of the ADA program, defines a small business as a business that has less than $1,000,000 in total gross annual income and meets other requirements and requires moneys in the ADA program fund, which is continuously appropriated, to be used for contributions in support of qualified loans, costs to educate the small business community and participating lenders about the program, and administrative expenditures, as specified. Existing law also establishes within the Capital Access Loan Program the California Seismic Safety Capital Access Loan Program to assist residential property owners and small business owners in seismically retrofitting residences and small businesses by covering losses on qualified loans for those purposes. Under existing law, the California Pollution Control Financing Authority administers all of these programs and is authorized to establish small business assistance funds for certain purposes, including, among others, funding the programs.

end insert begin insert

This bill would expand the definition of small business for the purposes of the ADA program to include businesses with less than $5,000,000 in total gross annual income. The bill would authorize moneys in the ADA program fund to be used for payments to participating financial institutions or borrowers to provide incentives to participate in the ADA program, as specified, would require the authority to adopt related regulations, and would authorize small business assistance funds to include contributions and nonreimbursable payments made directly to borrowers or participating financial institutions in furtherance of the ADA program, the Capital Access Loan Program, or other programs administered by the authority as part of the Capital Access Loan Program. By expanding the authorized uses of moneys in a continuously appropriated fund, the bill would make an appropriation.

end insert begin insert

Existing law, for the purposes of the California Seismic Safety Capital Access Loan Program, requires the authority to adopt regulations that limit the term of loss coverage for each qualified loan to no more than 10 years and that provide for recapture from the loss reserve account of the authority’s contribution for each enrolled loan upon maturation or after 10 years from the date of enrollment, whichever happens first.

end insert begin insert

This bill would shorten the 10-year period for loss coverage and recapture to 5 years.

end insert begin insert

This bill would declare that it is to take effect immediately as an urgency statute.

end insert begin delete

Existing law establishes the Strategic Growth Council in state government that consists of various heads of state agencies and certain other members. Existing law requires the council to engage in certain activities, including identifying and reviewing activities and funding programs of member state agencies that may be coordinated to improve air and water quality, improve natural resources protection, increase the availability of affordable housing, improve transportation, meet the goals of the California Global Warming Solutions Act of 2006, encourage sustainable land use planning, and revitalize urban and community centers in a sustainable manner. Existing law provides for the council to award grants and loans to support the planning and development of sustainable communities.

end delete begin delete

This bill would require recipients of state grant funding from the council or its member state agencies for certain projects to post signs acknowledging the sources of funds for the project pursuant to guidelines adopted by the council. The bill, if a project is funded from state and nonstate sources, would require the state funding sources to be listed first if state funding equals 50% or more of the total project costs.

end delete

Vote:  begin delete majority end delete begin insert ²⁄₃ end insert . Appropriation:  begin delete no end delete begin insert yes end insert . Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

begin insert

begin insert SECTION 1. end insert   

end insert

begin insert Section 44548 of the end insert begin insert Health and Safety Code end insert begin insert is
amended to read: end insert

44548.  

(a)  (1)  Subject to any prior contractual obligations
to any of its bondholders, the authority may establish one or more
small business assistance funds in order to do any of the following:

(A)  Assist small businesses to achieve financing of pollution
control facilities.

(B)  Assist with the financing of the costs of, among other things,
assessment, remedial planning and reporting, technical assistance,
cleanup, remediation, and development of brownfield sites, and
with other similar or related costs, by providing loans pursuant to
subdivision (h) of Section 44526.

(C)  Fund a capital access program for small businesses pursuant
to Article 8 (commencing with Section begin delete 44559). end delete begin insert 44559), including
contributions and nonreimbursable payments made directly to
borrowers or participating financial institutions in furtherance of
the program. end insert

(2)  For the purpose of establishing and maintaining small
business assistance funds as it determines to be necessary or
desirable to secure its bonds or any issuance thereof or for other
authorized purposes, the authority, pursuant to its contracts with
participating parties, may levy fees or other charges on, or require
deposits from, participating parties receiving financing for a project
under this division. The total amount of these fees, charges, and
deposits with respect to a single issue of bonds shall not exceed 3
percent of the principal amount of that issue of bonds.

(3)  Prior to levying any fees or charges or requiring deposits,
the authority shall adopt regulations for the operation of the small
business assistance funds, the amounts and any payment schedule
for the fees, charges, or deposits, eligibility standards for small
businesses desiring to use or benefit from the small business
assistance funds, and any other matters the authority determines
to be necessary for the establishment and maintenance of small
business assistance funds. The regulations may provide for
differential fees from participating parties based upon the size of
a project financed by the authority or other factors determined to
be relevant by the authority, and the regulations may restrict any
benefits to those eligible small businesses specified in the
regulations.

(4)  The authority may transfer any funds available to it or set
aside for its administrative expenses to any small business
assistance fund established under this section.

(b)  (1)  The forms of financial assistance that the authority
may provide under this section include, but are not limited to all
of the following:

(A)  Payments to reduce, but not eliminate, the interest rate on
loans.

(B)  Payments of part or all of the cost of acquiring letters of
credit.

(C)  Payments of part or all of the cost of acquiring insurance.

(D)  Payments of part or all of the cost of acquiring guarantees.

(E)  Payments of part or all of the cost of acquiring other forms
of credit support.

(F)  Payments of part or all of the authority’s expenses in issuing
revenue bonds or providing other assistance.

begin insert

(G) Contributions and nonreimbursable payments made directly
to borrowers or participating financial institutions in furtherance
of programs administered pursuant to Article 8 (commencing with
Section 44559).

end insert

(2)  The authority may also pledge any small business assistance
fund, on an individual or pooled basis, to repay, directly or
indirectly, the principal of, or interest or premium on, any issue
of bonds of the authority or any loan made or acquired pursuant
to this section.

(3)  The authority may also use moneys in a small business
assistance fund to assist in the financing of the costs of assessment
of, remedial planning and reporting for, technical assistance for,
and the cleanup, remediation or development of, brownfield sites,
and of other similar or related costs, by providing loans, pursuant
to, and under the terms permitted by, subdivision (h) of Section
44526.

(4)  In addition to other purposes set forth in this section, the
authority may use moneys in a small business assistance fund to
make or acquire loans or guarantee commercial loans to
participating parties eligible for assistance from those funds.

(5)  Any moneys repaid or returned to the authority in
connection with or as a result of any loan or financial assistance
made pursuant to this section shall be deposited in the small
business assistance fund from which the loan or assistance was
originally provided.

(6)  The authority may contract with qualified financial
institutions, including, but not limited to, banks, investment and
mortgage bankers, insurance companies, sureties, and guarantors,
to provide any necessary assistance in the granting of credit for
these purposes.

(c)  Each small business assistance fund established pursuant
to this section shall be deposited in a special account that the
Controller shall create. Notwithstanding any other provision of
law, and subject to any requirements of federal tax law or
regulations relative to maintaining the tax-exempt status of the
obligations of the authority, all interest or other gains earned by
investment or deposit of money in the special account pursuant to
any provision of Part 2 (commencing with Section 16300) of
Division 4 of Title 2 of the Government Code or pursuant to any
other provision of law shall be credited to, and deposited in, the
account.

(d)  In carrying out this section, the authority shall participate
with the air pollution control districts and air quality management
districts in providing financial assistance in its lending programs.

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 44559.13 of the end insert begin insert Health and Safety Code end insert begin insert is
amended to read: end insert

44559.13.  

(a) It is the intent of the Legislature in this act to
create and fund the California Americans with Disabilities begin insert Act end insert
Small Business Capital Access Loan Program to assist small
businesses in complying with the Americans with Disabilities Act.
It is not the intent of the Legislature to assist the physical expansion
of small businesses that includes modifications that comply with
the Americans with Disabilities Act. The program shall be
administered by the California Pollution Control Financing
Authority and follow the terms and conditions for the Capital
Access Loan Program for Small Businesses in this article with the
additional program requirements specified under this section.

(b) For purposes of this section, unless the context requires
otherwise, the following words and terms shall have the following
meanings:

(1) “Americans with Disabilities Act” means the federal
Americans with Disabilities Act begin insert of 1990 end insert (42 U.S.C. Sec. 12101 et
seq.) and amendments thereto.

(2) “California Americans with Disabilities Act Small Business
Capital Access Loan Program Fund” or “fund” means a fund
established and administered by the authority pursuant to Sections
44548 and 44549 to be used for purposes of this program.

(3) “Eligible cost” means and includes all or any part of the
price of construction, purchase price of real or personal property,
the price of demolishing or removing any buildings or structures,
the price of all machinery and equipment, the amount of financing
charges and interest prior to, during, and for a period not to exceed
the later of one year or one year following completion of
construction, as determined by the authority, the price of insurance
during construction, the amount of funding or financing noncapital
expenses, the amount of reserves for principal and interest and for
extensions, enlargements, additions, replacements, renovations,
and improvements, the price of engineering, financial, and legal
services and other service contracts, the price of plans,
specifications, studies, surveys, estimates, administrative expenses,
and any other expenses of funding or financing, that are necessary
and allocable to the eligible project, and shall not include costs
not directly related to physical alterations necessary for compliance
with the Americans with Disabilities Act.

(4) “Eligible project” means the physical alterations or retrofits
to an existing small business facility of less than 10,000 square
feet necessary to ensure that facility is in compliance with the
Americans with Disabilities Act, and the financing necessary to
pay eligible costs of the project.

(5) “Qualified loan” means a loan or portion of a loan as defined
in subdivision (j) of Section 44559.1, where the proceeds of the
loan or portion of the loan are limited to the eligible costs for an
eligible project under this program, and where the loan or portion
of the loan does not exceed fifty thousand dollars ($50,000).

(6) “Small business” or “qualified business” means a business
referred to in subdivisions (i) and (m) of Section 44559.1, that
meets the following additional criteria:

(A) Fifteen or fewer full-time equivalent employees.

(B) Less than begin delete one million dollars ($1,000,000) end delete begin insert five million
dollars ($5,000,000) end insert in total gross annual income from all sources.

(C) Does not provide overnight accommodations.

(c) (1) The California Americans with Disabilities Act Small
Business Capital Access Loan Program Fund is established in the
State Treasury for, and shall be administered by the authority
pursuant to Sections 44548 and 44549 for, this program.
Notwithstanding Section 13340 of the Government Code, all
money in the fund is continuously appropriated to the authority
for carrying out the purposes of this section. The authority may
divide the fund into separate accounts. All moneys accruing to the
authority pursuant to this section from any source shall be deposited
into the fund.

(2) All moneys in the fund derived from any source shall be
held in trust for the life of this program, subject to the program
expenditures and costs of administering this section, as follows:

(A) Program expenditures shall include both of the following:

(i) Contributions paid by the authority in support of qualified
loans.

begin insert

(ii) Payments made to participating financial institutions or
borrowers to provide incentives to participate in the program, to
the extent that moneys other than the initial appropriation are
deposited into the fund and are authorized for that use.

end insert begin delete

(ii)

end delete

begin insert (iii) end insert  Reasonable costs to educate the small business community
and participating lenders about the program, including travel within
the state.

(B) Administrative expenditures shall be limited to 5 percent
of the initial appropriation plus 5 percent of all moneys recaptured,
and shall include all of the following:

(i) Personnel costs.

(ii) Service and vending contracts necessary to carry out the
program.

(iii) Other reasonable direct and indirect administrative costs.

(3) The authority may direct the Treasurer to invest moneys in
the fund that are not required for its current needs in the eligible
securities specified in Section 16430 of the Government Code as
the authority shall designate. The authority may direct the Treasurer
to deposit moneys in interest-bearing accounts in state or national
banks or other financial institutions having principal offices located
in the state. The authority may alternatively require the transfer of
moneys in the fund to the Surplus Money Investment Fund for
investment pursuant to Article 4 (commencing with Section 16470)
of Chapter 3 of Part 2 of Division 4 of begin insert Title 2 of end insert the Government
Code. All interest or other increment resulting from an investment
or deposit shall be deposited into the fund, notwithstanding Section
16305.7 of the Government Code. Moneys in the fund shall not
be subject to transfer to any other fund pursuant to any provision
of Part 2 (commencing with Section 16300) of Division 4 of begin insert Title
2 of end insert the Government Code, excepting the Surplus Money
Investment Fund.

(d) The authority shall adopt regulations pursuant to subdivision
(c) of Section 44520 to implement the program, including
provisions specific to this program as described in this section and
further including provisions to:

(1) Establish a new loss reserve account for each participating
lender enrolling loans in this program.

(2) Obtain a certification from each participating lender and
small business upon enrollment of a qualified loan that the proceeds
of the loan will be used for the eligible costs of an eligible project.

(3) Contribute an additional incentive from the fund for each
loan enrolled for a qualified business located in a severely affected

begin delete community. end delete begin insert community, or make nonreimbursable payments from
other moneys to provide direct incentives to borrowers or
participating financial institutions to participate in the program. end insert

(4) Restrict the enrollment of a qualified loan in any other
Capital Access Loan Program for small business offered by the
authority as long as funds are available for this program.

(5) Limit the term of loss coverage for each qualified loan to
no more than five years.

(6) Recapture from the loss reserve account the authority’s
contribution for each enrolled loan upon the maturation of such
loan or after five years from the date of enrollment, whichever
happens first, to be deposited in the fund and applied to future
program and administrative expenditures.

begin insert

begin insert SEC. 3. end insert   

end insert

begin insert Section 44559.14 of the end insert begin insert Health and Safety Code end insert begin insert is
amended to read: end insert

44559.14.  

(a) (1) It is the intent of the Legislature in enacting
the act adding this section to create and fund a program to assist
residential property owners and small business owners in
seismically retrofitting residences and small businesses with a
priority on soft-story buildings and unreinforced brick and concrete
buildings. It is not the intent of the Legislature to assist the physical
expansion of small businesses and residences.

(2) The Legislature hereby establishes the California Seismic
Safety Capital Access Loan Program. The program shall cover
losses on qualified loans by participating lenders to qualified
residential property owners or qualified small businesses for
eligible projects, as specified under this section. The program shall
be administered by the California Pollution Control Financing
Authority and follow the terms and conditions for the Capital
Access Loan Program in this article with the additional program
requirements specified under this section.

(b) For purposes of this section, unless the context requires
otherwise, the following words and terms shall have the following
meanings:

(1) “Seismic retrofit construction” means alteration performed
on or after January 1, 2017, of a qualified building or its
components to substantially mitigate seismic damage. “Seismic
retrofit construction” includes, but is not limited to, all of the
following:

(A) Anchoring the structure to the foundation.

(B) Bracing cripple walls.

(C) Bracing hot water heaters.

(D) Installing automatic gas shutoff valves.

(E) Repairing or reinforcing the foundation to improve the
integrity of the foundation against seismic damage.

(F) Anchoring fuel storage.

(G) Installing an earthquake-resistant bracing system for
mobilehomes that are registered with the Department of Housing
and Community Development.

(2) “Eligible costs” means the costs paid or incurred on or after
January 1, 2017, for an eligible project, including any engineering
or architectural design work necessary to permit or complete the
eligible project less the amount of any grant provided by a public
entity for the eligible project. “Eligible costs” do not include costs
paid or incurred for any of the following:

(A) Maintenance, including abatement of deferred or inadequate
maintenance, and correction of violations unrelated to the seismic
retrofit construction.

(B) Repair, including repair of earthquake damage.

(C) Seismic retrofit construction required by local building
codes as a result of addition, repair, building relocation, or change
of use or occupancy.

(D) Other work or improvement required by local building or
planning codes as a result of the intended seismic retrofit
construction.

(E) Rent reductions or other associated compensation,
compliance actions, or other related coordination involving the
qualified residential property owner or qualified small business
and any other party, including a tenant, insurer, or lender.

(F) Replacement of existing building components, including
equipment, except as needed to complete the seismic retrofit
construction.

(G) Bracing or securing nonpermanent building contents.

(H) The offset of costs, reimbursements, or other costs
transferred from the qualified residential property owner or
qualified small business to others.

(3) “Eligible project” means seismic retrofit construction that
is necessary to ensure that the qualified building is capable of
substantially mitigating seismic damage, and the financing
necessary to pay eligible costs of the project.

(4) “Qualified building” means a building that is certified by
the appropriate local building code enforcement authority for the
jurisdiction in which the building is located as hazardous and in
danger of collapse in the event of a catastrophic earthquake.

(5) “Qualified loan” means a loan or portion of a loan as defined
in subdivision (j) of Section 44559.1, where the proceeds of the
loan or portion of the loan are limited to the eligible costs for an
eligible project under this program, and where the loan or portion
of the loan does not exceed two hundred fifty thousand dollars
($250,000).

(6) “Qualified small business” means a business referred to in
subdivisions (i) and (m) of Section 44559.1 that owns and occupies,
or intends to occupy, a qualified building for the operation of the
business.

(7) “Qualified residential property owner” means either an owner
and occupant of a residential building that is a qualified building
or a qualified small business that owns one or more residential
buildings, including a multiunit housing building, that is a qualified
building.

(c) (1) The California Seismic Safety Capital Access Loan
Program Fund is established in the State Treasury and shall be
administered by the authority pursuant to Sections 44548 and
44549 for this program. For purposes of this section, the references
in Sections 44548 and 44549 to “small business” shall include
“qualified residential property owner,” as defined in this section.
Notwithstanding Section 13340 of the Government Code, all
moneys in the fund are continuously appropriated to the authority
for carrying out this section. The authority may divide the fund
into separate accounts. All moneys accruing to the authority
pursuant to this section from any source shall be deposited into
the fund.

(2) All moneys in the fund derived from any source shall be
held in trust for the life of this program, for program expenditures
and costs of administering this section, as follows:

(A) Program expenditures shall include both of the following:

(i) Contributions paid by the authority in support of qualified
loans.

(ii) Costs for a qualified expert to validate that the proceeds of
the loans are eligible costs, as defined under this section.

(iii) Reasonable costs to educate the small business community,
residential property owners, and participating lenders about the
program, including travel within the state.

(B) Administrative expenditures shall be limited to 5 percent
of the initial appropriation plus 5 percent of all moneys recaptured,
and shall include all of the following:

(i) Personnel costs.

(ii) Service and vending contracts, other than program
expenditures described in subparagraph (A), that are necessary to
carry out the program.

(iii) Other reasonable direct and indirect administrative costs.

(3) The authority may direct the Treasurer to invest moneys in
the fund that are not required for its current needs in the eligible
securities specified in Section 16430 of the Government Code as
the authority shall designate. The authority may direct the Treasurer
to deposit moneys in interest-bearing accounts in state or national
banks or other financial institutions having principal offices located
in the state. The authority may alternatively require the transfer of
moneys in the fund to the Surplus Money Investment Fund for
investment pursuant to Article 4 (commencing with Section 16470)
of Chapter 3 of Part 2 of Division 4 of Title 2 of the Government
Code. All interest or other increment resulting from an investment
or deposit shall be deposited into the fund, notwithstanding Section
16305.7 of the Government Code. Moneys in the fund shall not
be subject to transfer to any other fund pursuant to any provision
of Part 2 (commencing with Section 16300) of Division 4 of Title
2 of the Government Code, excepting the Surplus Money
Investment Fund.

(d) The authority shall adopt regulations pursuant to Section
44520 to implement the program, including, but not limited to,
provisions to:

(1) Establish a new loss reserve account for each participating
lender enrolling loans in this program.

(2) Obtain a certification from each participating lender and
qualified small business or qualified residential property owner
upon enrollment of a qualified loan that the proceeds of the loan
will be used for the eligible costs of an eligible project.

(3) Contribute an additional incentive from the fund for each
loan enrolled for a qualified small business or qualified residential
property owner located in a severely affected community.

(4) Restrict the enrollment of a qualified loan in any other
Capital Access Loan Program for a qualified small business or
qualified residential property owner offered by the authority as
long as funds are available for this program.

(5) Limit the term of loss coverage for each qualified loan to
no more than begin delete 10 end delete begin insert five end insert years.

(6) Recapture from the loss reserve account the authority’s
contribution for each enrolled loan upon the maturation of that
loan or after begin delete 10 end delete begin insert five end insert years from the date of enrollment, whichever
happens first, to be deposited in the fund and applied to future
program and administrative expenditures.

(e) The authority may adopt regulations relating to residential
property owner or small business financing as emergency
regulations in accordance with Chapter 3.5 (commencing with
Section 11340) of Part 1 of Division 3 of Title 2 of the Government
Code. For purposes of that Chapter 3.5, including Section 11349.6
of the Government Code, the adoption of the regulations shall be
considered by the Office of Administrative Law to be necessary
for the immediate preservation of the public peace, health and
safety, and general welfare. The regulations shall be repealed 180
days after their effective date, unless the adopting authority or
agency complies with that Chapter 3.5.

begin insert

begin insert SEC. 4. end insert   

end insert begin insert

This act is an urgency statute necessary for the
immediate preservation of the public peace, health, or safety within
the meaning of Article IV of the Constitution and shall go into
immediate effect. The facts constituting the necessity are:

end insert begin insert

In order to provide timely assistance to small businesses
struggling to comply with the federal Americans with Disabilities
Act and to preserve the ability of those small businesses to operate,
it is necessary for this act to go into effect immediately.

end insert

begin delete

SECTION 1.  

Section 12815 is added to the Government Code,
to read:

12815.  

(a) For purposes of this section, “agency” means the
Strategic Growth Council established pursuant to Section 75121
of the Public Resources Code or any of its member agencies.

(b) An agency shall require recipients of state grant funding
from the agency for a project located in a public space and that
provides public benefits, as determined by the agency, to post signs
acknowledging the sources of funds for the project. If the project
is funded from state and nonstate sources, the state funding sources
shall be listed first if the state funding equals 50 percent or more
of the total project costs.

(c) The Strategic Growth Council shall develop model guidelines
for the signage requirements.

(d) Each agency shall develop signage requirements for its grant
programs consistent with the model guidelines developed pursuant
to subdivision (c).

end delete