BILL NUMBER: SB 1116	INTRODUCED
	BILL TEXT


INTRODUCED BY   Senator Leno

                        FEBRUARY 17, 2012

   An act to amend Section 44559.4 of the Health and Safety Code,
relating to California Pollution Control Financing Authority.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 1116, as introduced, Leno. California Pollution Control
Financing Authority: Capital Access Loan Program.
   The California Pollution Control Financing Authority Act
establishes the Capital Access Loan Program for small businesses,
administered by the California Pollution Control Financing Authority,
which provides loans through participating financial institutions to
qualifying small businesses. The authority is required to create a
loss reserve account for each financial institution. The act requires
a financial institution, if it decides to enroll a qualified loan
under the act in order to obtain the protection against loss provided
by its loss reserve account, to notify the authority in writing, as
specified, within 10 days after the date on which the loan is made.
The act requires a participating financial institution, when making a
qualified loan that will be enrolled under the act, to require the
qualified business to which the loan is made to pay a fee of not less
than 2% of the principal amount of the loan, but not more than 31/2%
of the principal amount, for deposit in the loss reserve account.
   This bill would instead require a financial institution, if it
decides to enroll a qualified loan under the act in order to obtain
the protection against loss provided by its loss reserve account, to
notify the authority in writing, as specified, within 15 days after
the date on which the loan is made. The bill also would instead
require a participating financial institution, when making a
qualified loan that will be enrolled under the act, to require the
qualified business to which the loan is made to pay a fee of not less
than 1% of the principal amount of the loan, but not more than 31/2%
of the principal amount, for deposit in the loss reserve account
   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 44559.4 of the Health and Safety Code is
amended to read:
   44559.4.  (a) If a financial institution that is participating in
the Capital Access Loan Program established pursuant to this article
decides to enroll a qualified loan under the program in order to
obtain the protection against loss provided by its loss reserve
account, it shall notify the authority in writing on a form
prescribed by the authority, within  10   15
 days after the date on which the loan is made, of all of the
following:
   (1) The disbursement of the loan.
   (2) The dollar amount of the loan enrolled.
   (3) The interest rate applicable to, and the term of, the loan.
   (4) The amount of the agreed upon premium.
   (b) The financial institution may make a qualified loan to be
enrolled under the program to an individual, or to a partnership or
trust wholly owned or controlled by an individual, for the purpose of
financing property that will be leased to a qualified business that
is wholly owned by that individual. In that case, the property shall
be treated as meeting the requirements of paragraph (1) of
subdivision (g) of Section 44559.1.
   (c) When making a qualified loan that will be enrolled under the
program, the participating financial institution shall require the
qualified business to which the loan is made to pay a fee of not less
than  2   1  percent of the principal
amount of the loan, but not more than 31/2 percent of the principal
amount. The financial institution shall also pay a fee in an amount
equal to the fee paid by the borrower. The financial institution
shall deliver the fees collected under this subdivision to the
authority for deposit in the loss reserve account for the
institution. The financial institution may recover from the borrower
the cost of its payments to the loss reserve account through the
financing of the loan, upon the agreement of the financial
institution and the borrower. The financial institution may cover the
cost of borrower payments to the loan loss reserve account.
   (d) When depositing fees collected under subdivision (c) to the
credit of the loss reserve account for a participating financial
institution, the authority shall do the following:
   (1) If no matching funds are available under a federal capital
access program or other source, the authority shall transfer to the
loss reserve account an amount that is not less than the amount of
the fees paid by the participating financial institution. However, if
the qualified business is located within a severely affected
community, the authority shall transfer to the loss reserve account
an amount not less than 150 percent of the amount of the fees paid by
the participating financial institution.
   (2) If matching funds are available under a federal capital access
program or other source, the authority shall transfer, on an
immediate or deferred basis, to the loss reserve account the amount
required by that federal program or other source. However, the total
amount deposited into the loss reserve account shall not be less than
the amount which would have been deposited in the absence of
matching funds.