BILL ANALYSIS                                                                                                                                                                                                    �



                                                                  AB 796
                                                                  Page  1

          Date of Hearing:   May 27, 2011

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Felipe Fuentes, Chair

                  AB 796 (Blumenfield) - As Amended:  May 11, 2011 

          Policy Committee:                              Natural 
          ResourcesVote:6-3

          Urgency:     No                   State Mandated Local Program: 
          No     Reimbursable:              No

           SUMMARY  

          This bill increases the limit on the amount of money a lender 
          may place into the Capital Access Loan Program (CalCAP) and 
          establishes a program, modeled on CalCAP, to provide loss 
          reserve for loans to renewable energy businesses.  Specifically, 
          this bill:

          1)Increases the amount, from $100,000 to $200,000, that a lender 
            may deposit over a three-year period into the CalCAP loan loss 
            reserve account, if the matching contribution made by the 
            California Pollution Control Financing Authority comes from 
            funds made available under the federal Small Business Jobs Act 
            of 2010.

          2)Establishes the Clean Energy Jobs Incentive Program, 
            administered by the California Alternative Energy and Advanced 
            Transportation Financing Authority (CAEATFA), to provide loan 
            loss reserve for financial institutions making loans to 
            renewable energy businesses, as defined. 

           FISCAL EFFECT  

          1)Doubles the amount of private loans that could benefit from 
            CalCAP loan insurance, from $2.5 million to $5 million, 
            provided the authority makes available federal Small Business 
            Jobs Act monies to match lender deposits.

          2)Minor, absorbable costs to the Treasurer's Office to establish 
            the Clean Energy Jobs Incentive Program.  (Special fund.)

          3)Cost pressure of an unknown amount, but potentially in the 








                                                                  AB 796
                                                                  Page  2

            millions of dollars, to provide funds to implement the Clean 
            Energy Jobs Incentive Program loan loss guarantee program.  
            (Federal funds, GF, or special funds.)

           COMMENTS  

           1)Rationale  .  The author intends to take advantage of the 
            availability of federal funds to increase the amount of loans 
            that can benefit from the CalCAP loan loss reserve program.  
            In creating the Clean Energy Jobs Incentive Program, the 
            author seeks to promote the development of in-state 
            manufacturing facilities and jobs that produce technologies 
            that reduce pollution, increase energy efficiency, reduce 
            greenhouse gas emissions, improve air quality, or reduce water 
            pollution. 

           2)Background.   The California Capital Access Program encourages 
            banks and other financial institutions to make loans to small 
            businesses that fall outside conventional underwriting 
            standards.  CalCAP is a form of loan portfolio insurance by 
            which loans made to small businesses are partially insured 
            against default by the borrower.  When a lender's first loan 
            is enrolled, CalCAP establishes a loss reserve account for 
            that lender. Each time a loan is enrolled under CalCAP, the 
            lender and borrower pay premiums into the portfolio loss 
            reserve account; CalCAP matches the premiums. The maximum loan 
            amount of a loan eligible to participate in CalCAP is $5 
            million and the maximum enrolled amount is $2.5 million.  
                
           3)Support  .  This bill is supported by Environmental Defense Fund 
            and renewable technology groups that could benefit from Clean 
            Energy Jobs Incentive Program.

           4)There is no formal opposition registered to this bill.
                
           Analysis Prepared by  :    Jay Dickenson / APPR. / (916) 319-2081