Amended in Senate June 30, 2015

Amended in Assembly May 18, 2015

California Legislature—2015–16 Regular Session

Assembly Bill No. 1393

Introduced by Assembly Member Burke

February 27, 2015

An act to amend Sections 44520, 44525, 44526, 44559.3, 44559.6, and 44559.11 of, and to repeal and add Section 44525.7 of, the Health and Safety Code, relating to the California Pollution Control Financing Authority.

LEGISLATIVE COUNSEL’S DIGEST

AB 1393, as amended, Burke. California Pollution Control Financing Authority.

The California Pollution Control Financing Authority Act establishes the California Pollution Control Financing Authority, with specified powers and duties, and authorizes the authority to approve financing for projects or pollution control facilities to prevent or reduce environmental pollution.

This bill would authorize the authority to lend financial assistance, including, but not limited to, grants, loans, credit enhancements, and other incentives. The bill also would authorize the authority to establish alternate provisions as necessary to enable the authority to participate in an alternative funding source program, including, but not limited to, implementing loan loss reserve programs to benefit any person, company, corporation, public agency, partnership, or firm engaged in activities in the state that require financing, and to adopt the policies of those alternative funding sources. The bill also would make conforming changes.

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.  

Section 44520 of the Health and Safety Code is
amended to read:

44520.  

(a)  The authority shall, in accordance with Chapter
3.5 (commencing with Section 11340) of Part 1 of Division 3 of
Title 2 of the Government Code, adopt all necessary rules and
regulations to carry out its powers and duties under this division.
The authority may call upon any board or department of the state
government for aid and assistance in the preparation of plans and
specifications and in the development of technology necessary to
effectively control pollution.

(b)  Notwithstanding subdivision (a), the authority, or any other
agency implementing a loan program or begin insert small business or end insert
brownfield site financing assistance program pursuant to an
interagency agreement with the authority, may adopt regulations
relating to the loans or begin insert small business or end insert brownfield site financing
as emergency regulations in accordance with the Administrative
Procedure Act (Chapter 3.5 (commencing with Section 11340) of
Part 1 of Division 3 of Title 2 of the Government Code). For
purposes of the Administrative Procedure Act, 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.

SEC. 2.  

Section 44525 of the Health and Safety Code is
amended to read:

44525.  

The authority may charge reasonable application and
project fees to reimburse the authority for costs incurred in
administering applications for financing pursuant to this division
and to support authority programs, including, but not limited to,
the Capital Access Loan Program authorized by Article 8
(commencing with Section 44559), and grants and loans as
authorized by subdivision (h) of Section 44526.

SEC. 3.  

Section 44525.7 of the Health and Safety Code, as
added by Section 7 of Chapter 915 of the Statutes of 2000, is
repealed.

SEC. 4.  

Section 44525.7 is added to the Health and Safety
Code, to read:

44525.7.  

Notwithstanding Section 10231.5 of the Government
Code, commencing in 2016 and annually thereafter, the authority
shall submit a report to the Legislature, pursuant to Section 9795
of the Government Code, regarding alternative financing programs
begin delete administrated under end delete begin insert administered pursuant to end insert subdivision (a) of
Section 44526.

SEC. 5.  

Section 44526 of the Health and Safety Code is
amended to read:

44526.  

The authority may do any of the following:

(a) Determine the location and character of any project to be
financed under the provisions of this division, lend financial
assistance, including grants, loans, credit enhancements, and other
incentives designed to leverage private capital, to any participating
party, construct, reconstruct, renovate, replace, lease, as lessor or
lessee, and regulate the same, and enter into contracts for the sale
of any pollution control facilities, including installment sales or
sales under conditional sales contracts, and make loans to
participating parties to lend financial assistance in the acquisition,
construction, or installation of a project.

(b) Issue bonds, notes, bond anticipation notes, and other
obligations of the authority for any of its corporate purposes, and
fund or refund the same, all as provided in this division.

(c) Fix fees and charges for pollution control facilities, or for
the loan of moneys to finance pollution control facilities, and to
revise from time to time those fees and charges, and collect rates,
rents, fees, loan repayments, and charges for the use of and for
any facilities or services furnished, or to be furnished, by a project
or any part of a project and contract with any person, partnership,
association, corporation, or public agency with respect to these
matters, and to fix the terms and conditions upon which any
pollution control facilities may be sold or disposed of, whether
upon installment sales contracts or otherwise.

(d) Employ and fix the compensation of bond counsel, financial
consultants, and advisers as may be necessary in its judgment in
connection with the issuance and sale of any bonds, notes, bond
anticipation notes, or other obligations of the authority; contract
for engineering, architectural, accounting, or other services of
appropriate agencies as may be necessary in the judgment of the
authority for the successful development of any project; and pay
the reasonable costs of consulting engineers, architects,
accountants, and construction experts employed by any
participating party if, in the judgment of the authority, those
services are necessary to the successful development of any project,
and those services are not obtainable from any public agency.

(e) Receive and accept loans, contributions, or begin delete grants, end delete begin insert grants end insert
of begin delete money, end delete begin insert moneys, end insert property, labor, or other things of begin delete value, end delete begin insert value end insert
for, or in aid of, the authority in carrying out the purposes of this
division, from any source, including, but not limited to, the federal
government, the state, or any agency of the state, any local
government or agency thereof, or any nonprofit or for-profit private
entity or individual.

(f) Apply for, and accept, subventions, grants, loans, advances,
and contributions from any begin delete source, end delete begin insert sources end insert of begin delete money, end delete begin insert moneys, end insert
property, labor, or other things of value. The sources may include,
but are not limited to, bond proceeds, dedicated taxes, state
appropriations, federal appropriations, federal grant and loan funds,
public and private sector retirement system funds, and proceeds
of loans from the Pooled Money Investment Account.

(g) [Reserved]

(h) (1) Provide a loan directly, or indirectly through one or
more public or private sector intermediaries, to any city, county,
school district, redevelopment agency, financial institution, as
defined in subdivision (d) of Section 44559.1, for-profit or
not-for-profit organization, or participating party, as defined in
Section 44506, to assist in financing, among other things, the costs
of performing or obtaining brownfield site assessments, remedial
action plans and reports, technical assistance, the cleanup,
remediation, or development of brownfield sites, or any other
similar or related costs, subject to all applicable federal, state, and
local laws, procedures, and regulations.

(2) The authority shall establish standards and criteria to ensure
that a recipient of direct or indirect financing for cleanup or
remediation pursuant to this subdivision has the necessary financial
resources and expertise to successfully and appropriately complete
the cleanup or remediation of the property.

(3) The authority may pay all, or a portion, of the associated
program development and implementation costs of any public or
private sector intermediaries through which a loan is made. A loan
authorized by this subdivision is subject to both of the following:

(A) A loan may be used in connection with a brownfield site
prior to a determination of whether the site has a reasonable
potential for economically beneficial reuse.

(B) A loan may be made upon the terms determined by the
authority and may provide for any rate of interest or no interest.

(4) The authority shall fund a loan made pursuant to this
subdivision from any funds available to it, from any funds set aside
for the authority’s administrative expenses, or from any small
business assistance fund established for these purposes pursuant
to Section 44548.

(5) The authority may waive repayment of all, or a portion, of
any loan made pursuant to this subdivision upon conditions to be
determined by the authority, and the amount so waived shall be
deemed a grant to the recipient.

(i) Do all things generally necessary or convenient to carry out
the purposes of this division.

SEC. 6.  

Section 44559.3 of the Health and Safety Code is
amended to read:

44559.3.  

(a)  The authority shall establish a loss reserve
account for each financial institution with which the authority
makes a contract.

(b) The loss reserve account for a financial institution shall
consist of moneys paid as fees by borrowers and the financial
institution, moneys transferred to the account from a small business
assistance fund, any matching federal moneys, and any other
moneys provided by the authority or other source.

(c) Notwithstanding any other law, the authority may establish
and maintain loss reserve accounts with any financial institution
under any policies the authority may adopt, including the policies
of other funding sources, pursuant to subdivision (b) of Section
44559.11.

(d) All moneys in a loss reserve account established pursuant
to this article are the exclusive property of, and solely controlled
by, the authority. Interest or income earned on moneys credited to
the loss reserve account shall be deemed to be part of the loss
reserve account. The authority may withdraw from the loss reserve
account all, or a portion of, the interest or other income that has
been credited to the loss reserve account. Any withdrawal made
pursuant to this subdivision may be made prior to paying any claim
and shall be used for the sole purpose of offsetting costs associated
with carrying out the program, including administrative costs and
loss reserve account contributions.

(e) The combined amount to be deposited by the participating
financial institution into any individual loss reserve account over
a three-year period, in connection with any single borrower or any
group of borrowers among which a common enterprise exists, shall
be not more than one hundred thousand dollars ($100,000).

SEC. 7.  

Section 44559.6 of the Health and Safety Code is
amended to read:

44559.6.  

(a) Notwithstanding Section 10231.5 of the
Government Code, 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
programs authorized under this article. Programmatic results shall
include, but not be limited to, the total number of business, entities,
and individuals served, jobs created, jobs retained, the geographic
distribution of the loans, and the breakdown of businesses served
by industry sector for all new loans issued since the report for the
prior year.

(b) The report submitted to the Legislature shall be submitted
in compliance with Section 9795 of the Government Code.

SEC. 8.  

Section 44559.11 of the Health and Safety Code is
amended to read:

44559.11.  

(a) It is the intent of the Legislature to ensure that
the state, through the authority, may make maximum, efficient use
of capital access programs enacted by all federal and state agencies,
as well as funding available from any governmental program whose
goals may be advanced by providing funding to the Capital Access
Loan Program.

(b) In furtherance of this intent, and notwithstanding any other
provision of this article, when the contributions required pursuant
to Section 44559.4 are entirely funded by a source that is a public
or quasi-public entity other than the authority, the authority may,
by regulation adopted pursuant to subdivision (b) of Section 44520,
establish alternate provisions as necessary to enable the authority
to participate in the alternative funding source program, including
implementing loan loss reserve programs to benefit any person,
company, corporation, public agency, partnership, or firm engaged
in activities in furtherance of the public or quasi-public entity’s
policy objectives in the state that require financing.