BILL ANALYSIS Ó
AB 1230
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB
1230 (Gomez)
As Amended September 3, 2015
2/3 vote
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|ASSEMBLY: |77-1 |(June 2, 2015) |SENATE: |39-0 |(September 8, |
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Original Committee Reference: B. & F.
SUMMARY: Establishes the California Americans with Disabilities
Act Small Business Capital Access Loan Program (Program) to
provide loans to small businesses so they can comply with the
requirements of the Americans with Disabilities Act (ADA).
Specifically, this bill:
1)Establishes the Program within the California Pollution
Control Financing Authority (CPCFA).
2)States that it is the intent of Legislature to establish a
self-sustaining program within CPCFA to provide loans to
assist small businesses in complying with the ADA.
a) Defines "small business" as a business located in
California that meets all of the following criteria:
i) Fifteen or fewer full-time equivalent employees;
ii) Less than $1 million in total gross annual income
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from all sources; and,
iii) Does not provide overnight accommodations.
3)Provides that CPCFA may direct the Treasurer to invest moneys
in the Americans with Disabilities Act Small Business
Compliance Financing Authority Fund (Fund) that are not
required for its current needs, in the eligible securities as
specified, or in interest-bearing accounts in state or
national banks or other financial institutions having
principal offices located in the state. The CPCFA may
alternatively require the transfer of moneys to the Surplus
Money Investment Fund for investment.
4)Requires CPCFA adopt regulations that do the following:
a) Establish a new loss reserve account for each
participating lender enrolling loans in this program;
b) 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;
c) Contribute an additional incentive from the fund for
each loan enrolled for a qualified business located in a
severely affected community;
d) 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;
e) Limit the term of loss coverage for each qualified loan
to no more than five years; and
f) Recapture from the loss reserve account the authority's
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contribution for each enrolled loan upon the maturation of
such loan or after five years from the date of enrollment,
which ever happens first, to be deposited in the fund and
applied to program and administrative costs.
5)Appropriates a sum of $10 million from the General Fund (GF)
to the Fund for the purposes of funding the activities of the
California Americans with Disabilities Act Small Business
Compliance Financing Authority (Authority).
6)Defines the following:
a) "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 ADA.
b) "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 ADA, and the financing necessary
to pay eligible costs of the project.
c) "Qualified loan" means a loan or portion of loan where
the proceeds of the loan or portion of loan are limited to
the eligible costs for an eligible project under this
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program, and where the loan or portion of loan does not
exceed $50,000.
7)Provides that all moneys in the fund derived from any source
shall be held in trust for the life of the program.
a) Specifies that program expenditures shall include both
of the following:
b) Contributions paid by the authority in support of
qualified loans; and,
c) Reasonable costs to educate the small business community
and participating lenders about the program, including
travel within the state.
8)Requires administrative expenditures to be limited to 5% of
the initial appropriation plus 5% of all moneys recaptured,
and shall include all of the following:
a) Personnel costs;
b) Service and vending contracts necessary to carry out the
program; and,
c) Other reasonable direct and indirect administrative
costs.
The Senate amendments:
1)Place administration of the loan program within CPCFA.
2)Change the name of the program from "California Americans with
Disabilities Act Small Business Compliance Financing Act" to
the "California Americans with Disabilities small Business
Capital Access Loan Program."
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3)Lower the amount of one-time GF appropriation from $50 million
to $10 million.
4)Define and limit administrative expenditures.
EXISTING LAW: Provides for various financing authorities
administered by the state Treasury including:
1)CPCFA: CPCFA is able to facilitate low cost financing to
qualified waste and recycling projects. Other projects to
control pollution and improve water supply can qualify for
tax-exempt financing as allowed by federal tax law. Examples
of recent assistance include projects to purchase clean-air
vehicles by waste companies, construct and operate anaerobic
digesters, recycle used oil, convert animal waste to clean
burning fuel, and develop construction and demolition debris
recycling programs.
2)The California Health Facilities Financing Authority (CHFFA)
was established to be the state's vehicle for providing
financial assistance to public and non-profit health care
providers through loans, grants and tax-exempt bonds.
3)The California Educational Facilities Authority (CEFA)
administers programs that provide tax-exempt, low-cost
financing to private, non-profit higher educational
facilities.
4)Additionally, CEFA manages the California Student Loan
Authority, which has the authority to issue tax-exempt bonds
to fund student loans and to purchase federally reinsured
student loans from eligible lending institutions.
5)California Transportation Financing Authority (CTFA). CTFA is
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authorized to issue, or approve the issuance of, revenue bonds
to finance transportation projects. The CTFA will review
proposed projects to ensure they are financially sound, and
has the ability to approve tolls as part of the financing
plans to repay revenue bonds.
FISCAL EFFECT: According to the Senate Appropriations
Committee:
1)The bill includes a one-time GF appropriation of $50 million.
2)CPCFA would incur annual administrative costs of $376,000
(special funds).
COMMENTS: Need for this bill.
Every year, hundreds of lawsuits are filed against small
businesses and "mom and pop stores," claiming they are
violating disability regulations. In fact, more than 40
percent of the nation's ADA cases are filed in
California. Often, these lawsuits are filed by a handful
of attorneys, usually in limited jurisdiction, seeking
only statutory penalty damages, as opposed to injunctive
or remedial relief centered on securing substantial
public value for the disabilities community. This type
of predatory litigation arguably weakens the rights of
the disabilities community by compelling small businesses
to spend more money on legal fees and costs than on
improving their establishments to improve accessibility.
Our solution is to create the California Americans with
Disabilities, Small Business Compliance Financing
Authority, a self-sustaining program to provide
affordable loans to assist small businesses finance the
costs of facility alterations and retrofits necessary to
comply with the ADA.
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AB 1230 would establish a related authority and
continuously appropriate fund to finance the activities
of the authority, while transferring $50,000,000 from the
state's GF to the California Americans with Disabilities
Act Small Business Compliance Financing Authority Fund.
This initial investment would be seed money for the loans
and repayments will make the program self-sustaining.
This bill establishes a system to help small businesses become
ADA compliant. It establishes a direct loan program that would
allow loans or the purchase of loans in connection with the
financing of projects pursuant to an agreement between the
Authority and qualifying businesses. Initial costs of setting
up this program would be covered via a transfer of $50 million
from the GF to the Authority.
Analysis Prepared by:
Mark Farouk / B. & F. / (916) 319-3081 FN:
0002246