BILL ANALYSIS                                                                                                                                                                                                    



                                                                  SB 872
                                                                  Page  1


          SENATE THIRD READING
          SB 872 (Budget and Fiscal Review Committee)
          As Amended  October 7, 2010
          2/3 Vote.  Urgency. 

           SENATE VOTE  :Vote not relevant  
           
           SUMMARY  :  Appropriates $32 million from the General Fund for the  
          purposes of promoting economic development throughout the state.  
           Specifically,  this bill  :

          1)Appropriates $20 million for the existing Small Business Loan  
            Guarantee Program at the Business Transportation and Housing  
            Agency (BTH).  Program augmentation nearly doubles program  
            volume and leverages $100 million in bank loans and/or lines  
            of credit and will serve 1,000 businesses.

          2)Appropriates $6 million The California Capital Access Program  
            (CalCAP) at the State Treasurer's office encourages banks and  
            other financial institutions to make loans to small businesses  
            that fall just outside of most banks' conventional  
            underwriting standards by providing loan portfolio insurance  
            which may provide up to 100% coverage on certain loan  
            defaults. By participating in CalCAP, lenders have available  
            to them a proven financing mechanism to meet the financing  
            needs of California's small businesses.  This augmentation  
            would triple the current size of the program and would  
            leverage over $135 million in loans.  Intended to serve 1,000  
            businesses.  

          3)Appropriates $6 million for Small Business Development  
            Centers. This Augmentation will leverage an equal federal  
            match, which funds free technical assistance and business  
            counseling sessions to over 50,000 businesses.  

          4)Appropriates $350,000 to the BTH for participating entities in  
            the Federal Technology Center Program which leverages equal  
            federal match to fund free small business workshops on  
            competing for government contracts.  Augmentation is  
            anticipated to provide services to 2,000 businesses.

          5)States legislative intent that the California Pollution  
            Control Financing Authority at the State Treasurer's Office  
            may adjust regulations to allow for their participation in  








                                                                  SB 872
                                                                  Page  2


            federally funded small business loan programs.

          6)Urgency Clause.  Declares this bill take effect immediately as  
            an urgency statute.


           Analysis Prepared by  :  Keali'i Bright / BUDGET / (916) 319-2099


                                                                FN: 0007201